CITY of TULSA, OKLAHOMA GENERAL OBLIGATION REFUNDING BONDS of 2012, SERIES a Ies May Not Be Sold Nor Offers To

PRELIMINARY OFFICIAL STATEMENT DATED, APRIL 18, 2012

MOODY’S: Aa1 S&P: AA

NEW ISSUE BOOK-ENTRY ONLY

In the opinion of Bond Counsel, under existing statutes and court decisions, assuming continuing compliance with certain conditions imposed by applicable federal tax law as described herein, interest on the Bonds is excluded from the gross income of the owners thereof for federal income tax purposes. Interest on the Bonds will not be treated as a preference item in calculating the alternative minimum tax imposed under the Internal Revenue Code of 1986, as amended, with respect buy be accepted prior to the time to individuals and corporations. It should be noted, however, that for the purpose of computing the buy nor shall there be any sale of these sale of these any be there shall nor buy alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings. The interest on the Bonds is excluded from gross income for state of Oklahoma income tax purposes. See "TAX EXEMPTION" herein.

$10,575,000 CITY OF TULSA, OKLAHOMA GENERAL OBLIGATION REFUNDING BONDS OF 2012, SERIES A ies may not be sold nor offers to

offer to sell or a solicitation of an offer to offer to sell or a solicitation of an Dated: June 1, 2012 Due: June 1, as shown Interest on the Bonds is payable on each June 1 and December 1, commencing December 1, 2012. The

on under the securities laws of such jurisdiction. Bonds will be issued and registered in the name of Cede & Co., as nominee of the Depository Trust Company, New York, New York ("DTC"), to which all payments of principal and interest will be made. Purchasers will

t constitute an acquire beneficial interests in the Bonds, in principal amounts of $5,000 and integral multiples thereof, by book- entry only. Purchasers of the Bonds will not receive physical delivery of bond certificates. The Bonds will not be transferable or exchangeable, except for transfers to another nominee of DTC or otherwise as described herein. See "DESCRIPTION OF THE BONDS — Book-Entry-Only System" herein. The Bonds are not subject to

gistration or qualificati redemption prior to maturity.

Official Statemen

Principal Maturity Interest Amount June 1, Rate Yield Cusip 2,280,000 2013 be unlawful prior to re 2,195,000 2014

herein are subject to completion or amendment. These securit These or amendment. are herein to completion subject 2,110,000 2015 2,035,000 2016

or sale would 1,955,000 2017 rcumstances shall this Preliminary

(Accrued interest to be added to prices of all Bonds)

The Bonds are offered when, as and if issued, subject to the approval of legality by Hilborne and Weidman, a professional corporation, Tulsa, Oklahoma, Bond Counsel. Certain legal matters will be passed upon by the Attorney General of the State of Oklahoma. Certain legal matters for the City will be passed upon which such offer, solicitation by the City Attorney David O’Melia. Delivery of the Bonds is anticipated to occur in New York, New York, ered in final form. Under no ci on or about June 1, 2012. securities in any jurisdiction Official Statement is deliv This Preliminary Official Statement and the information contained contained information the and Statement Official Preliminary This

CITY OF TULSA

LIST OF PRINCIPAL OFFICIALS

MAYOR

Dewey F. Bartlett, Jr.

COUNCIL MEMBERS

Jack R. Henderson District 1 Jeannie Cue District 2 David Patrick District 3 Blake Ewing District 4 Karen Gilbert District 5 Byron Steele District 6 Thomas Mansur District 7 Phil Lakin, Jr. District 8 G. T. Bynum District 9

CHIEF OF STAFF Jarred Brejcha

DIRECTOR OF FINANCE Michael P. Kier, CPFO

CITY AUDITOR Clift Richards

This Preliminary Official Statement does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the Bonds to any person in any jurisdiction in which it is unlawful to make such offer, solicitation or sale. No dealer, broker, salesman or other person has been authorized to give any information or to make any representation other than contained in this Preliminary Official Statement. If given or made, such information or representation must not be relied upon.

The Bonds will not be registered under the Securities Act of 1933, as amended, and the City does not intend to list the Bonds on any stock or other securities exchange. The Securities and Exchange Commission has not passed upon the accuracy or adequacy of this Preliminary Official Statement. With respect to the various states in which the Bonds may be offered, no attorney general, state official, state agency or bureau or other state or local governmental entity has passed upon the accuracy or adequacy of this Preliminary Official Statement or passed upon or endorsed the merits of this offering of the Bonds.

The information set forth herein has been obtained from the City, public officials, official records, and other sources which are believed to be reliable, but is not guaranteed as to accuracy or completeness, and is not to be construed as a representation by any of such sources as to information from any other source. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Preliminary Official Statement nor any sale made hereunder shall under any circumstances create any implication that there has been no change in the affairs of the City since the date hereof.

Any statements, contained in this Preliminary Official Statement including matters of opinion, estimations or projections, whether or not expressly so stated, are intended as such and not as representations of facts. This Preliminary Official Statement shall not be construed as a contract or agreement between the City and the purchasers or holders of any of the Bonds.

TABLE OF CONTENTS INTRODUCTION...... 1 DESCRIPTION OF THE BONDS...... 1 General...... 1 Book-Entry Only System...... 1 Payment of and Security for the Bonds ...... 3 Tax Levy and Collection Procedures...... 3 ESTIMATED SOURCES AND USES OF FUNDS...... 4 PLAN OF REFUNDING ...... 4 THE CITY OF TULSA...... 5 Governmental Structure and General Information...... 5 Principal Government Services...... 6 Economic and Demographic Characteristics of the City ...... 6 FINANCIAL MANAGEMENT AND CONTROLS ...... 7 Accounting and Reporting Practices...... 7 Government-Wide Highlights...... 8 Fund Financial Statements...... 8 Changes in net assets ...... 8 General Fund Budget and Actual Year Ended June 30, 2010 ...... 10 Sales Tax Revenue History...... 11 CITY INDEBTEDNESS...... 11 Authorization ...... 11 General Long-Term Liabilities ...... 12 Subsequent Maturities General Obligation Debt ...... 13 Debt Ratios ...... 13 Direct and Overlapping Debt...... 14 Tax Collections ...... 15 Property Tax Base...... 15 Principal Taxpayers ...... 17 Public Trusts and Authorities...... 17 Multi-Beneficiary Trusts-Joint Venture...... 18 Other Obligations...... 19 Municipal Employees’ Retirement Plan ...... 19 Oklahoma Firefighters’ Pension and Retirement System ...... 20 Oklahoma Police Pension and Retirement System ...... 20 ABSENCE OF MATERIAL LITIGATION ...... 21 INCONTESTABILITY...... 21 LEGAL MATTERS ...... 21 TAX EXEMPTION...... 21 INDEPENDENT AUDITORS ...... 22 CREDIT RATINGS ...... 22 CERTIFICATE WITH RESPECT TO PRELIMINARY OFFICIAL STATEMENT ...... 22 CONTINUING DISCLOSURE ...... 22 DEEMED FINAL...... 23 MISCELLANEOUS...... 23

Appendix A—Basic Financial Statements of The City of Tulsa for The Year Ended June 30, 2011 Appendix B—Additional Demographic and Economic Information Regarding the City (Unaudited) Appendix C—Monthly Executive Summary as of December 31, 2011 (Unaudited) Appendix D—Form of Opinion of Bond Counsel Appendix E—Form of Continuing Disclosure Certificate

iii

PRELIMINARY OFFICIAL STATEMENT

$10,575,000 THE CITY OF TULSA, OKLAHOMA GENERAL OBLIGATION REFUNDING BONDS OF 2012, SERIES A

INTRODUCTION

The City of Tulsa, Oklahoma (the "City") is issuing its General Obligation Refunding Bonds of 2012, Series A (the "Bonds") for the purpose of refunding certain outstanding general obligation bonds of the City initially issued to fund certain capital improvements to be owned by the City, as more particularly described in "PLAN OF FINANCING" herein. The Bonds are being issued in accordance with the provisions of Article X, Section 27 of the Oklahoma Constitution as well as the laws of the State of Oklahoma supplementary and amendatory thereto. The Bonds constitute direct and general obligations of the City, payable from ad valorem taxes levied against all taxable property, excepting homestead exemptions, located therein without limitation as to rate or amount.

Tulsa, the second largest city in the state of Oklahoma, is located in the northeastern part of the state and is the business, financial, employment and cultural center of the metropolitan area and northeastern Oklahoma. The population of the City, as reflected in the 2010 census, was 391,906, and the population of the Tulsa MSA (comprised of Tulsa, Osage, Creek, Rogers, Wagoner, Pawnee and Okmulgee Counties) was 937,478.

The City has previously issued $28,000,000 General Obligation Refunding Bonds of 2002, Series C in accordance with Article X, Section 27, of the Oklahoma Constitution. The General Obligation Refunding Bonds of 2002, Series C (“Prior Bonds”) were used to refinance certain outstanding general obligation bonds of the City on a current refunding basis. The proceeds of the Bonds, will be used to currently refund the outstanding principal of the Prior Bonds. See “PLAN OF REFUNDING”.

DESCRIPTION OF THE BONDS General

The Bonds will be dated June 1, 2012, and will mature in the amounts and on the dates set forth on the cover page of this Preliminary Official Statement. The Bonds will bear interest from June 1, 2012, at the rates set forth on the cover page hereof, payable on each June 1 and December 1, commencing December 1, 2012. Interest on the Bonds shall be computed on the basis of a 360-day year, consisting of twelve (12) thirty (30) day months.

Book-Entry Only System

THE INFORMATION IN THIS SECTION, “BOOK-ENTRY-ONLY SYSTEM”, HAS BEEN FURNISHED BY THE DEPOSITORY TRUST COMPANY. NO REPRESENTATION IS MADE BY THE CITY AS TO THE COMPLETENESS OR ACCURACY OF SUCH INFORMATION OR AS TO THE ABSENCE OF MATERIAL ADVERSE CHANGES IN SUCH INFORMATION SUBSEQUENT TO THE DATE HEREOF. NO ATTEMPT HAS BEEN MADE BY THE CITY TO DETERMINE WHETHER DTC IS OR WILL BE FINANCIALLY OR OTHERWISE CAPABLE OF FULFILLING ITS OBLIGATIONS. THE CITY SHALL HAVE NO RESPONSIBILITY OR OBLIGATION TO DTC PARTICIPANTS, INDIRECT PARTICIPANTS OR THE PERSONS FOR WHICH THEY ACT AS NOMINEES WITH RESPECT TO THE BONDS, OR FOR ANY PRINCIPAL, PREMIUM, IF ANY OR INTEREST PAYMENT THEREOF.

The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered bonds in the name of Cede & Co.,(DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered Bond certificate will be issued for each maturity of the Bonds in the aggregate principal amount of such

1 maturity, and will be deposited with DTC at the office of the Trustee on behalf of DTC utilizing the DTC FAST system of registration.

DTC, the world’s largest depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 2 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 85 countries that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book-entry transfers and pledges between Direct Participant’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Government Securities Clearing Corporation, MBS Clearing Corporation, and Emerging Markets Clearing Corporation, (NSCC, GSCC, MBSCC and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others, such as both U.S. and non-U.S. securities brokers and dealers, banks, and trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has Standard & Poors’s highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com

Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchases. Beneficial Owners are, however, expected to receive written confirmation providing details of the transactions, as well as periodic statements of their holdings, from the Direct or Indirect Participants through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.

To facilitate subsequent transfers, all Bonds deposited by Participants with DTC (or the Trustee on behalf of DTC utilizing the DTC FAST system of registration) are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC (or the Paying Agent on behalf of DTC utilizing the DTC FAST system of registration) and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holders on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.

Redemption notices shall be sent to DTC. If less than all of a series of bonds within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee), will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC’s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

2 Principal and interest payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the City or UMB Bank, N. A. as the paying agent (“Paying Agent”) on the payable date in accordance with their respective holding shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name”, and will be the responsibility of such Participant and not of DTC, the Paying Agent, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest on the Bonds to Cede & Co. (or such other nominee as may be requested by and authorized representative of DTC) is the responsibility of the City or the Paying Agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursements of such payment to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the City or the Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, The Bond certificates are required to be printed and delivered.

The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, The Bond certificates will be printed and delivered.

The City and the Paying Agent, so long as Cede & Co., as nominee of DTC, is the registered owner of the Bonds, will recognize DTC or its nominee as the Owner of the Bond or Bonds for all purposes, including notices and voting. The Paying Agent, so long as Cede & Co., as nominee of DTC, is the registered owner of the Bonds, will send any notice to bondholders only to DTC. Any failure of DTC to advise any Participant, or of any Participant to notify the Beneficial Owner, of any such notice and its content or effect will not affect the validity or sufficiency of the proceedings premised on such notice.

The City and the Paying Agent have no responsibility or liability for any aspects of the records relating to or payments made on account of beneficial ownership, or for maintaining, supervising or reviewing any records relating to beneficial ownership of the Bonds.

The City cannot and does not give any assurances that DTC, Participants or others will distribute payments of the principal of or interest on the Bonds paid to DTC or its nominee as the registered owner, or any redemption or other notices, to the Beneficial Owners, or that they will do so on a timely basis, or that DTC will service and act in the manner described in this Official Statement.

Payment of and Security for the Bonds

The Bonds are payable from ad valorem taxes on the taxable property within the City including real, business personal and public service property. Such property is currently assessed by the County Assessor at an average rate of 11.0% of estimated market value. Pursuant to Oklahoma statutes, the County Assessor is required to reassess both the business personal property and the real property within the County annually.

The ad valorem tax rates are set by determining the actual dollars of revenues required for payment of principal and interest payments on indebtedness and judicial judgments. Such total amount may be reduced by any surplus from the prior year and any contribution made into the Sinking Fund. To the resulting net requirements, a reserve for delinquent taxes, in an amount of not less than 5% nor more than 20% of the net required tax collection, is added to the required collections. Such final total requirement is then divided by the total net assessed valuation of all real, business personal, and public service property in order to determine the appropriate tax rate for each property owner.

Tax Levy and Collection Procedures

The Oklahoma Constitution requires that the City make annually an ad valorem tax levy for a Sinking Fund which shall, with cash and investments in such fund, be sufficient to pay, first, interest on bonded indebtedness as it falls due; second, the principal of bonded indebtedness as it falls due; and third, such judgments as the City may by law, be required to pay.

3 After the Mayor computes the levy requirements for the Sinking Fund, and pursuant to direction from the City Council, copies of the Sinking Fund estimates are submitted to the County Excise Board to determine the ad valorem tax levy appropriations. This submission is required by July 20 of each year. The estimates are for the purposes of determining ad valorem taxes required to fund the Sinking Fund. The amounts contained in the estimate of needs are verified by the County Excise Board and upon verification, the levies contained therein are ordered to be certified to the County Assessor in order that the County Assessor may extend said levies upon the tax rolls for the year for which the estimate of needs is being submitted. The County Excise Board further certifies that the appropriations contained in the estimate of needs and the mill rate levies are within the limitations provided by law.

Cities and counties in Oklahoma are limited to a combined total of ten (10.3) mills from ad valorem taxes for operating purposes. Since 1977, the Tulsa County Excise Board has not approved any millage for the City for operating purposes since the ten (10.3) mills have gone to Tulsa County for its operating fund. For purposes of the General Obligation bond debt service, however, there is no limitation as to the mill levy for debt issued under Sections 26 or 27 of Article X of the Oklahoma Constitution. State statutes make it mandatory for any unit of local government to annually provide for a tax sufficient to pay the principal and interest as they become due on any outstanding debt.

The County Assessor is required to file a tax roll report on or before October 1, each year with the County Treasurer indicating the net assessed valuation for each municipality within the County. This report includes the assessed valuation for all real, business personal and public service property (public service property assessed valuations are determined by the Oklahoma Tax Commission). The County Treasurer must begin collecting taxes by November 1. Half of the taxes are payable before January 1, and the second half become payable before April 1. Ad valorem taxes not paid before April 1 are considered delinquent.

Each unit of government receives its proportionate share of tax receipts from the County Clerk, based on their individual mill levies, in the month following the collection of the same.

ESTIMATED SOURCES AND USES OF FUNDS

The proceeds to be received from the sale of Series 2012A Bonds (excluding accrued interest), together with other available funds, are estimated to be applied as follows:

Sources of Funds: Proceeds of the Series 2012A Bonds$ 10,575,000.00 Transfer From City Sinking Fund 2,455,250.00 Total Sources of Funds $ 13,030,250.00

Uses of Funds: Deposit to Series 2012A Escrow Account$ 12,904,500.00 Series 2012A Costs of Issuance 125,750.00 Total Uses of Funds $ 13,030,250.00

PLAN OF REFUNDING

The Bonds are being issued to provide funds for the current refunding of the Prior Bonds. The unpaid aggregate principal amount of the Prior Bonds is $12,600,000. The City will deposit a portion of the proceeds of the Bonds along with moneys from its Sinking Fund into the City of Tulsa, Oklahoma, General Obligation Refunding Bonds of 2012, Series A Special Escrow Fund (the “Series 2012A Escrow Fund”), to be held by BOKF, NA dba Bank of Oklahoma, Tulsa, Oklahoma, as Escrow Agent under the City of Tulsa, Oklahoma, General Obligation Refunding Bonds of 2012, Series A Special Escrow Fund Agreement, (“Escrow Agreement”) dated as of June 1, 2012. The moneys in the Series 2012A Escrow Fund will be sufficient to pay principal and interest of the Prior Bonds upon their redemption on June 1, 2012. Upon the creation of the Series 2012A Escrow Fund, the Prior Bonds will continue to be considered general obligations of the City but will not be deemed outstanding for purposes of determining compliance with debt limitation. The Prior Bonds will be secured solely by the moneys and investments held for them under the Escrow Agreement. See “VERIFICATION”.

4 THE CITY OF TULSA

Governmental Structure and General Information

Tulsa has grown dramatically since its incorporation in 1898. A town site survey in 1900 indicated a population of 1,390. The population of the Tulsa MSA (comprised of Creek, Okmulgee, Osage, Pawnee, Rogers, Tulsa and Wagoner counties), as reflected in the 2010 census is 937,478.

The City was governed under a Commission form of government from 1909 until May 1990, at which time City government changed to a Mayor-Council form under a voter-approved Charter change. The Mayor, elected every four years, serves as the chief executive of the City and is responsible for all administration of city departments and preparing and submitting an annual budget to the City Council pursuant to the City Charter and the Oklahoma Municipal Budget Act. The City Council consists of nine members, elected for two year terms and by geographic districts, and serves as the legislative branch under the direction of a Chairman, elected by and from its nine members. The City Auditor, elected biennially, and the Mayor are the only two officials elected at large.

The City Council has the authority to establish procedures for the appropriation of funds and amendment of City budgets. Annual budget requests are prepared by each department and agency of the City desiring public funds. These requests are submitted to the Department of Finance and reviewed by the Mayor and his/her management team. The Mayor’s proposed annual budget is submitted to the City Council on or before May 1 for its review. State law requires the annual budget to be adopted no later than seven days before the start of the new fiscal year on July 1. The City Council may increase, reduce or omit any item, subject to the veto power of the Mayor. A veto by the Mayor can be overridden by a two-thirds super-majority of the City Council. Budget expenditures cannot exceed estimated revenues and fund balance available for appropriation, and it is unlawful for the City to create or authorize a deficit in any fund. Unencumbered appropriation balances lapse at the end of the year.

Downtown Tulsa is the business, financial, governmental and cultural center for the metropolitan area. It contains half of the region’s office space and is the site of the Tulsa Performing Arts Center, Maxwell Convention Center and an 18,000 seat all-purpose arena, Bank of Oklahoma Center, which opened in September 2008. Additionally, ONEOK Field was completed and opened for use in April 2010. The nearly 8,000 seat stadium is home to Tulsa’s AA baseball affiliate.

Tulsa County Independent School District No. 1, the second largest school district in Oklahoma, serves most of the area within the city limits. Other school districts serving parts of Tulsa include: Broken Arrow (No. 3), Bixby (No. 4), Jenks (No.5) and Union (No. 9). The Tulsa Technology Center, which serves high school students not going to college, has been recognized as one of the best job training programs in the country. Both of the state’s major universities, the University of Oklahoma and Oklahoma State University, have branch campuses in Tulsa. Tulsa is also home of the largest community college in the state, Tulsa Community College. Long standing private universities, the University of Tulsa and Oral Roberts University, also offer a wide variety of graduate and post graduate degrees.

As in many cities across the country, medical service is becoming an important component of the region’s economic base. Tulsa is the region’s medical center with five major hospital facilities. There are also special facilities catering to patients with special needs. Two of the local hospitals are affiliated with the OU and OSU medical schools.

Tulsa has numerous points of interest and cultural institutions. There are 130 parks including Mohawk Park, the sixth largest municipal park in the United States and the site of two golf courses, a nature center and the Tulsa Zoo. Woodward Park is the site of a nationally recognized municipal rose garden. Cultural institutions include: Philbrook Museum, the city owned Thomas Gilcrease Institute of American History and Art, and nationally recognized opera and ballet companies. Tulsa is the home of professional baseball, hockey, basketball and arena football, as well as a full complement of NCAA Division I college athletics including: football, basketball, golf, baseball, soccer, and tennis.

Tulsa also offers a wide range of shipping options: rail, water, truck, and air. The completion of the McClellen-Kerr Arkansas River Navigation System in 1970 made Tulsa the westernmost inland port on the Inland Waterway System.

Principal Government Services

Among the basic municipal services the City provides are; police and fire protection, airport facilities, parks, street construction and maintenance, mass transit, convention and performing arts centers, parking facilities, water and sewer systems, refuse collection and disposal, recycling, neighborhood revitalization and land use regulation. The City does not provide educational, hospital, or welfare services. Sales and use taxes, and user fees, provide most of the revenue for the City’s annual operating budget.

Historically, the City and public trusts established for the City’s benefit, have financed capital projects with: earmarked sales tax revenues, General Obligation bonds, revenue bonds backed by user fees and federal and state grants.

Economic and Demographic Characteristics of the City

The Tulsa Metropolitan Statistical Area (TMSA) comprises 25% of the state’s population and 32.5% of the state’s economy (TMSA share equals $35.2 billion in 2010 constant dollars). Though the local economy contracted in 2009, the TMSA never experienced the contraction seen at the national level. Therefore, the TMSA is positioned to grow faster than the U.S. in both employment and the production of goods and services thru the remainder of 2011 and into 2012. Key characteristics such as: low rent, low energy costs and low taxes – have kept the cost of doing business in the TMSA a strong 11% below the national average. Furthermore, the cost of living in the Tulsa area is 12% below the U.S. average. These, among other factors, have led Forbes to predict strong growth in the Tulsa metro, naming it the No. 4 city for jobs in 2011.

Beginning in April of 2009, Tulsa sales tax began a decline that continued for 13 straight months resulting in a 7.3% decline in FY 10. It was the steepest decline in the history of the City’s sales tax. Further decline was anticipated in FY 11, but at a lower rate of 3.0%. Fortunately, by mid year the economy appeared to have stabilized, and sales tax again began to grow. FY 11 ended with a year over year increase in sales tax of 2.5%. A review of current indicators suggests that a similar growth rate can be expected for FY 12.

The declines previously seen in the TMSA labor force appear to have stabilized over 2010. The Oklahoma Employment Security Commission (OESC) forecasts slight growth in 2011; followed by 0.41% annual growth in 2012 through 2015. Wage & Salary employment has fared even better over the last year. After losing close to 15,000 seasonally adjusted jobs in 2010, the TMSA is now seeing slight but steady monthly gains. The OESC forecasts growth in Wage & Salary employment of 3.3% in 2011 and an annual growth rate of 2.3% for the four following years. The TMSA has already seen a gain of 5,000 jobs from January, 2011 to July, 2011 in its monthly actuals. With OSU’s Center for Applied Economic Research (CAER) forecasting an annual population growth of 1.3% in population, job opportunities should outpace the rising labor force over the next 4 years. The OESC forecasts the TMSA’s 12 month moving unemployment average to peak at 7.3% in 2011 before falling to 6.9% in 2012. It is forecast to decline to 5.4% by 2015.

As the labor force grows and unemployment recedes, the Bureau of Economic Analysis (BEA) forecasts that real per capita income in the TMSA should grow by 2.8% in 2011 and an annual 3.7% through 2015. As consumer confidence gradually rises, this should allow for greater retail activity in the TMSA.

A review of the last 30 years of retail sales in the TMSA and the CAER’s predictions indicate that 3% growth in 2012 and beyond might not be overly-optimistic. Forecasting a 3% annual increase in total retail sales in FY 12 and 13 is positively correlated with historic growth rates. Additionally, Moody’s Analytics has forecasted a 2.9% growth in the TMSA’s Gross Metro Product (GMP) in 2012; and thereafter an annualized growth rate of 2.0% until 2015. This lends support to the likelihood of 2-3% annual growth in sales tax over the near-term future. Specifically, it appears that non-durable sales will outperform durable sales over the next 5 years; with non-durable increasing close to 14% and durable increasing about 9%. This is due to the fact that production of durables is often more energy and material intensive to produce and distribute. Even as energy and raw material prices continue to climb, producers have shown either an unwillingness or inability to pass those costs on to consumers in a meaningful manner. Therefore, it is reasonable to assume that as consumers remain ever price-sensitive, producers of non-durable goods will have less of their profit margins erode. Although more related to manufacturing than retail, this could be a problem the TMSA faces in the future as it has a very dense concentration of durable goods manufacturing. However, as most of the durable goods produced in the TMSA are categorized as “miscellaneous durable” (manufactured parts), this sector should have less trouble than arenas of more traditional durable goods productions.

6 Considering the forecasted growth in employment and improved GMP the local economy should soon experience greater momentum in its recovery.

For details on the economic and demographic characteristics of the City and the metropolitan area, see APPENDIX B hereto.

FINANCIAL MANAGEMENT AND CONTROLS

Accounting and Reporting Practices

The accounting and reporting policies of the City conform to generally accepted accounting principles for state and local governments. Generally accepted accounting principles for municipalities are defined as those principles promulgated by the Governmental Accounting Standards Board ("GASB").

In accordance with GASB Statement 39, "The Financial Reporting Entity," the City, for financial reporting purposes, includes all funds, account groups, agencies, boards, commissions and other authorities for which the City is financially accountable.

The City's financial statements are prepared in conformity with generally accepted accounting principles. For primary government activities (General, Special Revenue, Capital Projects, and Debt Service), revenues are recognized when measurable and available to finance current expenditures. Expenditures are recognized when a liability is incurred. The City's business type activities (Enterprise and Internal Service) are accounted for on the accrual basis. Revenues are recognized when earned and expenses when incurred.

In developing the City's accounting system, consideration is given to the adequacy of internal accounting controls. Internal accounting controls are designed to provide reasonable assurance regarding the safeguarding of assets against loss from unauthorized use and the reliability of financial records for preparing financial statements and maintaining accountability for assets.

Estimated purchase orders and contract amounts are encumbered prior to issuance to a vendor or the signing of a contract. Purchase orders and contracts which result in an overrun of encumbered balances are not issued or approved unless additional appropriations are made available. Open encumbrances are reported as reservations of fund balances for governmental activities.

The City has been awarded a Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association of the United States and Canada (GFOA) for its Comprehensive Annual Financial Report (CAFR) for the year ended June 30, 2010 and for each of the previous 29 years. The June 30, 2011 CAFR has been submitted for review by the GFOA. The Certificate of Achievement for Excellence in Financial Reporting is the highest form of recognition in the area of governmental accounting and financial reporting, and its attainment represents a significant accomplishment by a government and its management.

In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized CAFR, the content of which conforms to program standards. Such reports must satisfy both generally accepted accounting principles and applicable legal requirements.

Eligible CAFRs are evaluated by an impartial special review committee composed of government finance officers, independent certified public accountants, educators, and others with particular expertise in governmental accounting and financial reporting. The basic financial statements of the City for the year ended June 30, 2011, are included in Appendix A which should be read in its entirety. The CAFR may be obtained from the City Controller, 175 E 2nd St, Suite 885, Tulsa, OK 74103. Included in Appendix C is the City’s Financial Report Executive Summary for the period ended December 31, 2011, which is unaudited, and is prepared on a budgetary basis for use by the City’s management. The budgetary basis used by the City in preparing this summary is the cash basis of accounting, whereas accruals for asset and liability accounts are not incorporated and payments for debt service and capital items are displayed as expenditures. Exhibit C should be read in its entirety. McGladrey & Pullen, LLP, our independent auditor, has not been engaged to perform, and has not performed, any procedures on the Financial Report Executive Summary contained in Exhibit C, and accordingly, is not associated with this information. Appendix C should be read in its entirety. These and other financial reports may also be found on the City’s website (http://www.cityoftulsa.org/our-city/financial- reports.aspx).

Government-Wide Highlights The government-wide statements report information about the City as a whole using accounting methods similar to those used by private-sector companies. The statement of net assets includes all of the government’s assets and liabilities. All of the current year’s revenues and expenses are accounted for in the statement of activities regardless of when cash is received or paid.

The two government-wide statements report the City’s net assets and how they have changed. Net assets—the difference between the City’s assets and liabilities—is one way to measure the City’s financial health, or position.

Fund Financial Statements The fund financial statements provide more detailed information about the City’s most significant funds- not the City as a whole. Funds are grouping of related accounts that the City uses to keep track of specific sources of funding.

The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund.

Changes in net assets The City’s total revenues increased 2.3% to $468.3 million in 2011. Sales taxes, the largest revenue category, increased to $199.4 million in 2011 from $193.5 million in 2010. Property taxes increased to $49.3 million in 2011 from $42.0 million in 2010, satisfying debt service requirements on recent general obligation bond issues. Program revenue generated $135.5 million, consisting of charges for services, federal and state grants, and other contributions, down from $160.3 million in 2010.

8 CITY OF TULSA CHANGES IN NET ASSETS Last Five Years (accrual basis of accounting) (amounts expressed in thousands) 2011 2010 2009 2008 2007 Expenses: Governmental activities: Administrative and support $ 28,756 $ 34,010 $ 29,132 $ 34,165 $ 33,430 Public safety and protection 193,869 184,640 196,987 205,923 177,351 Public works and transportation 58,636 83,295 87,318 90,855 116,374 Culture and recreation 15,812 17,749 21,752 25,460 27,841 Social and economic 21,894 31,310 28,325 28,346 25,776 Interest on long-term debt 12,624 10,910 12,560 14,134 11,046 Total governmental activities expenses 331,591 361,914 376,074 398,883 391,818 Business-type activities: Stormwater 26,050 24,859 23,743 21,646 19,862 One Technology Center 9,884 9,431 9,993 6,527 - Arena & Convention 22,480 22,182 17,434 6,044 - Tulsa Stadium Trust 3,768 - - - - Golf Courses 3,316 3,503 3,615 3,233 2,470 Total business-type activities 65,498 59,975 54,785 37,450 22,332 Total primary government 397,089 421,889 430,859 436,333 414,150 Program Revenues: Governmental activities: Charges for services Administrative and support 5,501 4,200 4,960 4,807 9,314 Public safety and protection 16,815 20,289 22,674 25,090 18,275 Public works and transportation 34,574 30,853 35,311 33,839 28,619 Culture and recreation 4,887 5,638 3,797 3,903 4,545 Social and economic 543 530 1,375 2,246 3,228 Operating grants and contributions 13,609 32,262 25,944 39,700 33,172 Capital grants and contributions 9,924 12,185 11,560 24,891 57,665 Total governmental activities program revenues 85,853 105,957 105,621 134,476 154,818 Business-type activities: Charges for services Stormwater 23,231 22,007 21,424 19,296 17,742 One Technology Center 8,560 6,637 5,787 2,478 - Arena & Convention 12,300 12,130 10,281 1,128 - Tulsa Stadium Trust 163 - - - - Golf Courses 2,024 2,733 2,713 1,683 1,084 Operating grants and contributions - 79 - - - Capital grants and contributions 3,319 10,735 36,839 113,759 11,082 Total business-type activities program revenues 49,597 54,321 77,044 138,344 29,908 Total primary government program revenues $ 135,450 $ 160,278 $ 182,665 $ 272,820 $ 184,726 Net (expense) revenue: Governmental activities (245,738) (255,957) (270,453) (264,407) (236,999) Business-type activities (15,901) (5,654) 22,259 100,894 7,576 Total primary government net expense $ (261,639) $ (261,611) $ (248,194) $ (163,513) $ (229,423) General Revenues and Other Changes in Net Assets: Taxes Sales tax 199,384 193,505 207,289 210,633 201,717 Property tax 49,315 41,989 39,090 34,475 29,182 Franchise tax 27,225 26,144 25,871 23,211 22,213 Use tax 17,927 15,622 18,422 18,501 18,346 Hotel / motel tax 5,683 5,821 6,327 6,819 6,134 Unrestricted grants and contributions 22,667 2,508 8,857 8,112 8,122 Payments from component units 76 13 1,808 2,008 181 Investment earnings 7,513 9,566 19,570 24,151 18,971 Miscellaneous 2,490 - 3,788 5,246 2,014 Transfers (11,950) 1,705 (22,248) (105,851) (4,292) Capital contributions - - - - - Total governmental activities 320,330 296,873 308,774 227,305 302,588 Business-type activities: Investment earnings and other 611 680 1,290 1,209 633 Transfers & capital contributions 11,950 21,612 22,248 105,851 4,292 Total business-type activities 12,561 22,292 23,538 107,060 4,925 Total primary government $ 332,891 $ 319,165 $ 332,312 $ 334,365 $ 307,513 Changes in Net Assets: Governmental activities 74,592 40,916 38,321 (37,102) 65,589 Business-type activities (3,340) 16,638 45,797 207,954 12,501 Total primary government $ 71,252 $ 57,554 $ 84,118 $ 170,852 $ 78,090

General Fund Budget and Actual Year Ended June 30, 2010

The General Fund is summarized below.

CITY OF TULSA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES- BUDGET AND ACTUAL (BUDGETARY BASIS) Year ended June 30, 2011 (amounts expressed in thousands)

Budgeted Amounts Variance with Final Original Final Actual Amounts Budget Revenues Taxes $ 163,514 $ 168,440 $ 173,566 $ 5,126 Licenses and permits 5,059 5,059 5,922 863 Intergovernmental 8,686 8,709 9,054 345 Charges for service 35,788 35,047 33,648 (1,399) Fines and forfeitures 8,076 8,141 10,805 2,664 Investment income 5,231 5,231 4,452 (779) Miscellaneous 1,295 2,701 3,541 840 Total revenues 227,649 233,328 240,988 7,660

Payments to component units 5,775 5,775 5,775 - Total expenditures 227,047 237,969 230,127 7,842 Excess (deficiency) of revenues over expenditures 602 (4,641) 10,861 15,502

Other financing sources (uses) Transfers in 2,375 2,375 2,387 12 Transfers out (5,845) (7,337) (7,337) - Total other financing uses (3,470) (4,962) (4,950) 12

Net change in fund balances (2,868) (9,603) 5,911 15,514 Fund balances, beginning of year (budgetary basis) 35,545 35,545 35,545 - Prior year encumbrances paid in current year 5,759 5,759 5,759 - Fund balances, end of year (budgetary basis) $ 38,436 $ 31,701 47,215 $ 15,514

Reconciliation to GAAP basis - basis differences: Reserve for encumbrances 6,809 Reserve for advances 1,096 Receivables 11,247 Non-budgetary payables (552) Decrease in fair value of investments 1,302 Fund balance (GAAP basis) $ 67,117

Fund balance:

Reserved for: Body armor 403 Metropolitan Tulsa Transit Authority 201 Imprest cash 113 Repayment of gr ants 92 Designated for: Working capital 13,674 Unreserved, undesignated 32,732 Fund balance (budgetary basis) $ 47,215

10 Sales Tax Revenue History The City's most significant source of General Governmental Revenues is the sales tax. Sales tax collections in 2011 represented 60% of all such governmental revenues received by the City (exclusive of business-type activities). The City's sales tax is a 3.167% tax, of which 1% (the 2006 sales tax) is a special tax dedicated to capital improvements and 0.167% will fund $166.6 million in street improvement projects. This sales tax will remain in effect until June 30, 2014.

Sales tax revenues increased from 2002 to 2011 at an average growth rate of 0.65%.

Sales Tax Revenues ($ in MM)

$235 $225 $215 $205 $195 $185 $175 $165 $155 $145 $135 $125 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

CITY INDEBTEDNESS

The Constitution of Oklahoma provides that without approval of the voters, the City is prohibited from becoming indebted in any year in an amount exceeding the income and revenue to be received for such year. General Obligation bonds have been approved by the voters and issued by the City for various municipal improvements. These bonds are backed by the full faith and credit of the City.

Authorization Political subdivisions in the State of Oklahoma must have authorization from the voters of such political subdivision in order to become indebted in any year in an amount in excess of the income and revenue provided for such year. All existing general obligation indebtedness has been issued under Article X, Sections 26 or 27 of the Oklahoma Constitution.

Article X, Section 26 Political subdivisions issuing bonds under such section may issue obligations in a total amount such that the total aggregate net indebtedness shall not exceed 10 percent of the net assessed valuation of the taxable property therein, providing that three-fifths of the voters voting at an election held for such purpose shall vote to approve the issuance of such obligations.

Article X, Section 27 Cities or towns issuing bonds under such subsection shall use the proceeds for the purpose of purchasing or constructing public utilities or for repairing the same, to be owned exclusively by such city or town, or for the purpose of constructing, reconstructing, improving or repairing streets and bridges. Provided that a majority of the voters of the city or town voting at an election to be held for such purpose shall vote to approve the issuance of such obligations. There is not a limit on the amount of General Obligation bonds which may be issued pursuant to Section 27.

11 General Long-Term Liabilities

Long-term liability activity for year ended June 30, 2011:

Beginning Balance, Due Within One as restated Additions Reductions Ending Balance Year PRIMARY GOVERNMENT

Business-type activities: Revenue bonds 110,316 3,900 (7,669) 106,547 2,834 Unamortized discount--revenue bonds (151) - 6 (145) - Unamortized deferred loss on refunding - revenue bonds (41) - 18 (23) - Compensated absences 871 712 (732) 851 572 Other post-employment benefits 867 121 - 988 - Pension liability 154 212 - 366 - Total business-type activities 112,016 4,945 (8,377) 108,584 3,406 Total primary government $ 562,609 $ 139,634 $ (103,140) $ 599,103 $ 76,001

COMPONENT UNITS

Revenue bonds: TAIT 168,930 13,520 (20,440) 162,010 7,650 TMUA 144,225 24,100 (6,895) 161,430 8,080 Other component units 21,660 - (1,375) 20,285 1,420 Premium on debt issuance - TMUA 938 23 (69) 892 - Unamortized deferred loss on refunding - TMUA (1,049) - 56 (993) - Unamortized deferred loss on refunding - other component units (268) - 33 (235) - Premium on debt issuance - TAIT 506 33 (452) 87 - Unamortized bond discount - TAIT (384) (111) 128 (367) - Unamortized deferred loss on refunding - TAIT (10,196) (423) 711 (9,908) - Unamortized bond discount - other component unit (180) - 13 (167) - 324,182 37,142 (28,290) 333,034 17,150 General obligation bonds 56,580 - (5,254) 51,326 5,316 Premium on debt issuance - TMUA 1,647 - (283) 1,364 - 58,227 - (5,537) 52,690 5,316 Promissory notes 134,658 32,958 (10,202) 157,414 8,308 Unamortized bond discount - TMUA (127) 21 - (106) - Premium on debt issuance - TMUA 1,836 976 (186) 2,626 - 136,367 33,955 (10,388) 159,934 8,308 Capital lease 9,603 - (433) 9,170 451 Water main extension contracts 8,144 - (1,073) 7,071 529 Compensated absences 5,610 5,216 (4,625) 6,201 3,767 Other post-employment benefits 5,503 1,098 (40) 6,561 - Pension liability 1,113 1,932 (398) 2,647 68 Due to other governments 210 - (210) - - Pollution remediation obligation 166 - - 166 - Arbitrage rebate liability 10 - (9) 1 - Deposits subject to refund 12 4 - 16 - Total component units $ 549,147 $ 79,347 $ (51,003) $ 577,491 $ 35,589

General Obligation bonds are recorded in the Government-wide Financial Statements except those applicable to sewer operations which are recorded as Component Unit debt. Funds used to meet the City's general obligation debt are derived from two sources: ad valorem taxes and sewer revenues. Ad valorem taxes, the primary source of funds, amounted to $52,268,000; these taxes were derived from a levy of $16.98 per $1,000 of assessed property valuation in 2011.

12 Subsequent Maturities General Obligation Debt

At June 30, 2011, the City had outstanding General Obligation Bonds of $437,795,000. Principal and interest requirements for such outstanding debt are as follows: (amounts expressed in thousands)

General Obligation Primary Government Component Units Year Principal Interest Principal Interest

2012 $ 27,778 $ 16,451 $ 5,316 $ 2,243 2013 35,456 15,262 5,289 2,041 2014 35,342 13,895 5,263 1,815 2015 35,251 12,446 5,239 1,590 2016 34,006 10,934 5,104 1,358 2017-2021 146,238 33,257 15,338 4,030 2022-2026 57,792 10,405 8,013 1,424 2027-2031 14,606 1,007 1,764 119 $ 386,469 $ 113,657 $ 51,326 $ 14,620

Debt Ratios The following table sets forth information with respect to the approximate ratio of the City's net general bonded debt to certain financial and economic factors:

CITY OF TULSA RATIOS OF OUTSTANDING DEBT BY TYPE Last Ten Years (amounts expressed in thousands, except per capita)

General Bonded Debt Other Business Percentage Go vern men tal Type Gen eral of Net Activit ies Debt Activities Debt Total Percentage Ob ligatio n Assessed Per Revenue Revenue Primary of Personal Per Year Bonds, Net a Value a Capita b Bonds, Net Bonds, Net Go vernmen t c Income b Capita b 2011 $394,399 12.60% $ 1,006 $ 14,125 $ 106,547 $ 515,071 3.21% $ 1,314 2010 358,257 11.64% 919 27,515 90,505 476,277 3.10% 1,221 2009 307,832 10.40% 795 40,239 92,725 440,796 3.26% 1,139 2008 251,449 8.90% 655 51,965 95,270 398,684 2.61% 1,033 2007 229,448 8.44% 604 73,350 2,425 305,223 2.19% 803 2006 198,977 7.66% 517 89,579 2,780 291,336 2.22% 757 2005 183,781 7.32% 470 27,401 3,125 214,307 1.72% 562 2004 157,284 6.39% 405 39,113 3,460 199,857 1.73% 523 2003 174,341 7.13% 444 49,640 3,600 227,581 1.96% 588 2002 189,871 8.40% 478 58,607 3,855 252,333 2.10% 645

Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. a See Schedule of Ratios of Net General Bonded Debt To Assessed Values and Net Bonded Debt Per Capita for net assessed value data. b Population and personal income data can be found on Schedule of Demographics and Economic Statistics. c Includes general bonded debt, other governmental activities debt, and business-type activities debt.

Certain General Obligation bonds issued to fund water and sewer projects are repayable 50% from component unit revenues and 50% from ad valorem revenues. The portions of these issues, net of any reserves that are repayable from ad valorem revenues, are included in the amount of net bonded debt per capita.

13 Direct and Overlapping Debt The proportionate share of the net debt of overlapping governments located wholly or partially within the limits of the City as of June 30, 2011, was $528,037,000. This debt is borne by taxable real and business personal property owners within the City.

CITY OF TULSA COMPUTATION OF DIRECT AND OVERLAPPING DEBT June 30, 2011 (amounts expressed in thousands) Estimated(2) Estimated Percentage Share Net Debt(1) Applicable to Applicable to Governmental Unit Outstanding City of Tulsa City of Tulsa

Debt repaid with property taxes

Independent School District: No. 1 TPS $ 129,287 64.9% $ 83,884 No. 3 BA 74,000 1.0% 719 No. 4 Bixby 27,500 1.1% 315 No. 5 Jenks 72,170 15.4% 11,125 No. 9 Union 73,050 17.6% 12,834 108,877

City direct debt $ 419,160 100.0% 419,160 Total direct and overlapping debt $ 528,037

Notes: (1) General bonded debt net of reserves. (2) Ratio of assessed valuation of property within the overlapping unit to assessed valuation of property within the City of Tulsa.

Sources: Tulsa County Assessor Independent School Districts

CITY OF TULSA PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS (Per $1,000 of Net Assessed Valuation) Last Ten Years (amounts expressed in thousands) DIRECT OVERLAPPING General Sinking County County Year Fund Fund City Schools County Library Health 2011 $ - $ 16.98 $ 16.98 $ 88.44 $ 10.31 $ 5.32 $ 2.58 2010 - 14.15 14.15 89.49 10.31 5.32 2.58 2009 - 14.08 14.08 88.31 10.31 5.32 2.58 2008 - 13.48 13.48 88.31 10.31 5.32 2.58 2007 - 12.67 12.67 87.47 10.31 5.32 2.58 2006 - 9.97 9.97 89.16 10.69 5.32 2.58 2005 - 10.11 10.11 89.45 10.71 5.32 2.58 2004 - 11.16 11.16 91.40 10.99 5.32 2.58 2003 - 11.23 11.23 89.18 11.93 5.32 2.58 2002 - 11.53 11.53 88.85 12.41 5.32 2.58 Source: Tulsa County Assessor

14 Tax Collections Set forth below is the tax collection record of the City for the past ten years:

CITY OF TULSA PROPERTY TAX LEVIES AND COLLECTIONS Last Ten Years (amounts expressed in thousands)

Percent of Total Percent Delinquent Delinquent Delinquent Total Tax Current Tax of Levy Taxes Percent of Tax Total Collections to Year Levy Collections Collected Receivable Levy Collections Collections Tax Levy 2011 $ 53,163 $ 50,945 95.8% $ 9,955 18.7% $ 1,323 $ 52,268 98.3% 2010 43,557 41,887 96.2% 9,060 20.8% 1,079 42,966 98.6% 2009 41,663 40,014 96.0% 8,469 20.3% 877 40,891 98.1% 2008 38,098 36,305 95.3% 7,697 20.2% 1,766 38,071 99.9% 2007 34,420 33,018 95.9% 7,387 21.5% 275 33,293 96.7% 2006 25,893 24,799 95.8% 6,260 24.2% 760 25,559 98.7% 2005 25,386 24,163 95.2% 5,926 23.3% 783 24,946 98.3% 2004 27,467 26,184 95.3% 5,769 21.0% 1,000 27,184 99.0% 2003 27,460 25,997 94.7% 5,486 20.0% 739 26,736 97.4% 2002 26,061 26,202 100.5% 4,762 18.3% 612 26,814 102.9%

Source: City of Tulsa

Property Tax Base The net assessed valuation of the City's property tax base value increased from $1.17 billion in 1982 to $3.13 billion in 2011. The net assessed valuation declined in 1988 and 1989 largely as a result of the lowering of the assessment ratio on residential property by the County Assessor. The State Board of Equalization in 1989, however, increased the ratio to 11% (Tulsa's minimum was 10%) which increased the value in 1990 by 2.78%. The net assessed valuation of the City's property tax base increased by 1.67% in 2011 over 2010. Net assessed valuation is comprised of three components: real property, personal property and public service property. Net changes from 2011 to 2010 are as follows: real property increased 2.34%, personal property decreased 3.88%, and public service property increased 4.29%. Real property and personal property are valued by the Tulsa County Assessor and public service property is valued by the State of Oklahoma.

15 Net Assessed Value Taxable Property Within the City of Tulsa 1983-2012

Net Assessed Percentage Valuation Change From Year ($ in 000's) Previous Year 2012 $3,115,456 -0.47% 2011 3,130,174 1.67 2010 3,078,866 4.05 2009 2,959,096 4.76 2008 2,824,670 3.93 2007 2,717,965 4.6 2006 2,598,320 3.44 2005 2,511,861 2.05 2004 2,461,392 0.65 2003 2,445,574 7.6 2002 2,259,672 5.67 2001 2,131,775 6.25 2000 2,006,377 7.84 1999 1,860,436 4.01 1998 1,788,628 3.93 1997 1,720,961 5.95 1996 1,624,365 5.27 1995 1,543,110 0.06 1994 1,542,157 0.97 1993 1,527,256 -3.16 1992 1,577,136 3.53 1991 1,523,369 -2.42 1990 1,561,114 2.78 1989 1,518,861 -3.32 1988 1,571,098 -2.75 1987 1,615,599 3.72 1986 1,557,712 5.13 1985 1,481,692 7.1 1984 1,383,433 8.28 1983 1,277,602 9.52

The City has five Tax Increment Financed Districts (TIF) and one Tax Incentive District. The Brady TIF, formed in 1994, the Tulsa Technology TIF, formed in 1999, the North Peoria TIF, formed in 2002, the Blue Dome TIF, formed in 2003, and the Tulsa Hills TIF formed in 2006 all have a lifespan of 15 years, with the exception of the Brady TIF which was extended 10 years in 2008 to the maximum allowable lifespan of 25 years. All are available to receive revenues from Ad Valorem and Sales Tax increments.

In July 2008 the Tulsa Stadium Improvement District (TSID) was created with assessments beginning July 1, 2009 to create a funding mechanism for the construction of a multi-purpose recreational facility with a primary purpose as a ballpark, together with its maintenance and other improvements and services. The current boundary consists of all tracts and parcels of real property lying within the City’s Inner Dispersal Loop (IDL). District revenue also supports enhancement and redevelopment of downtown property and will increase the economic benefit derived from the downtown infrastructure and BOK Center investments. The services portion of the assessment will increase annually based on the Consumer Price Index with a 4% annual cap. Properties owned by the U.S. government, religious organizations used primarily for religious purposes, and residences with homestead exemptions are excluded from the assessments.

The Whittier Square Improvement District (WSID) was created to provide enhanced street, alley and sidewalk cleaning, parking lot maintenance and landscaping maintenance at a service level higher than normal City standards. The increased services help ensure a more pleasing and convenient business environment for customers, property owners and businesses in the area. The City provides approximately 50% of the revenue required to provide these services with a transfer from the General Fund. The City has contracted with a non- profit corporation, Whittier Square Improvement District, Inc., which was formed by owners of the properties to collectively manage the daily affairs of the district and oversee the service providers.

Principal Taxpayers The principal ad valorem taxpayers in the City at June 30, 2011, are shown below. No single employer within the City represents more than 2.50% of the City's ad valorem tax base.

CITY OF TULSA PRINCIPAL PROPERTY TAXPAYERS June 30, 2011

Taxable Percentage of Assessed Assessed Taxpayer Type of Business Valuation Rank Valuation A T & T COMPANIES/SERVICES Telephone Utility $73,400,340 1 2.36% PUBLIC SERVICE CO OF OKLA Electrical Utility $41,060,894 2 1.32% OKLAHOMA NATURAL GAS CO Gas Utility/ONEOK $30,535,973 3 0.98% AHS HILLCREST/TULSA HOLDINGS Hillcrest & Tulsa Regional $28,741,786 4 0.93% WAL MART STORES Retail $16,068,835 5 0.52% WOODLAND HILLS MALL Mall $15,608,358 6 0.50% WILLIAMS COMPANIES Oil & Gas $15,001,857 7 0.48% WARREN FOUNDATION Charity $13,072,183 8 0.42% COX COMMUNICATIONS Communications $12,522,509 9 0.40% QUIK TRIP CORP Retail $8,949,930 10 0.29% HELMERICH & PAYNE Oil & Gas $8,662,349 11 0.28% KANBAR PROP MGMT LLC Real Estaste $8,542,715 12 0.27% ST JOHNS HOSPITAL Hospital $7,280,932 13 0.23% SOUTHCREST HOSPITAL Hospital $6,923,423 14 0.22% TARGET CORPORATION Retail $6,620,538 15 0.21% $292,992,622 9.43%

Source: Tulsa County Assessor

Public Trusts and Authorities The following trusts and authorities are included with the City for financial reporting purposes: Metropolitan Tulsa Transit Authority—MTTA provides public transportation systems and facilities that primarily benefit City residents. MTTA cannot incur indebtedness in excess of $100,000 within any year. As of June 30, 2011, MTTA had no outstanding debt. Tulsa Airports Fund—The Tulsa International and Richard L. Jones, Jr. Airports have been combined with the Tulsa Airports Improvements Trust ("TAIT") and are included in the Airports fund. The Tulsa Airport Authority ("TAA") is responsible for operating the City's airports. The purpose of TAIT is to fund airport improvements through the issuance of revenue bonds. All improvements are leased by TAIT to TAA and become the property of the City upon termination of the lease. The City is designated as the sole beneficiary of the Trust. TAIT has outstanding bonded indebtedness in the amount of $162,010,000, as of June 30, 2011, all of which are payable from airport facility user fees. TAA and TAIT trustees are appointed by the Mayor and approved by the City Council. Tulsa Metropolitan Utility Authority—The City is the sole beneficiary of TMUA which operates and maintains its water and wastewater utility properties. As of June 30, 2011, the outstanding indebtedness of TMUA including general obligation debt, revenue bonds and promissory notes, was $371,534,000. TMUA trustees are appointed by the Mayor and approved by the City Council. Tulsa Public Facilities Authority—TPFA promotes the acquisition, construction and operation of various facilities and public improvements in and for the City, which is the sole beneficiary of TPFA. TPFA issues its revenue bonds for such purposes, and the City enters into various agreements with TPFA including certain leases of assets from TPFA for amounts equal to debt service on the particular bond issue. The five trustees of TPFA are the Mayor and four mayoral appointees approved by the City Council. As of June 30, 2011, the outstanding bonded indebtedness of TPFA was $88,155,000.

17 Tulsa Authority for the Recovery of Energy—TARE was created for the benefit of the City to provide for the collection, removal, transportation, and disposal of solid waste. TARE trustees are appointed by the Mayor and approved by the City Council. TARE had no outstanding debt as of June 30, 2011.

Tulsa Parking Authority—TPA was created as a public trust to construct and manage various parking facilities within the City. The City of Tulsa is its sole beneficiary. The City maintains the accounts of TPA, as well as its cash and investments. As of June 30, 2011, TPA had an aggregate of $21,660,000 in bonded indebtedness outstanding. TPA trustees are the Mayor and four mayoral appointees. Tulsa Development Authority—TDA is a public authority created to finance urban renewal, rehabilitation, and redevelopment. The City staffs TDA and maintains its accounts. The primary source of funding for TDA is from City of Tulsa Community Development Block Grant funds. TDA Commissioners are appointed by the Mayor and approved by the City Council. TDA had no outstanding debt as of June 30, 2011. Tulsa Performing Arts Center Trust—TPACT is a public trust formed for the purpose of expanding performing arts in the City. TPACT has a 15-member board appointed by the Mayor and confirmed by the City Council. TPACT had no outstanding indebtedness at June 30, 2011. Tulsa Industrial Authority—TIA is a public trust created to provide for the issuance of industrial development bonds upon approval by the City Council, and to lend the proceeds of such issuance to third party organizations. The bonds do not constitute debt of the City and are collateralized solely by the revenues of the borrowing organizations upon whose behalf the bonds are issued. The Mayor of the City is ex-officio trustee and seven additional trustees are appointed by the Mayor and approved by the City Council.

Tulsa Stadium Trust—TST is a public trust created to acquire, construct, own, operate and maintain a baseball stadium in downtown Tulsa and related amenities and facilities, and to incur indebtedness. Debt issuance requires the approval of two-thirds of the Tulsa City Council. The City is sole beneficiary of the TST. The Mayor of the City is ex-officio trustee and eight additional trustees are appointed by the Mayor and approved by the City Council. As of June 30, 2011, TST had an aggregate of $18,392,000 in outstanding indebtedness.

Multi-Beneficiary Trusts-Joint Venture The City participates in three joint ventures with other governmental units to provide services to their respective constituents. Emergency Medical Services Authority—The Authority (EMSA) is a public trust created to provide emergency medical care and transportation and is governed by a ten-member board composed of five appointees from the City and five from other Oklahoma cities and towns. In accordance with the joint venture agreement, Tulsa and Oklahoma City are entitled to their respective share of annual operating income or loss. The City’s net investment in EMSA is $15,662 resulting from EMSA’s net income in 2011 and previous years. Complete financial statements for EMSA can be obtained from EMSA’s Chief Financial Officer, 1417 North Lansing, Tulsa, Oklahoma 74106. River Parks Authority—The City is a participant with Tulsa County in a joint venture to operate and maintain a park along the Arkansas River. RPA, a trust, was created for that purpose. The City and Tulsa County contribute to the annual operating budget of RPA. The Board of Trustees comprises seven members, three appointed by the City, three appointed by the County, and one by the Tulsa Metropolitan Area Planning Commission. Complete financial statements for RPA can be obtained from the Executive Director, 717 S. Houston, Suite 10, Tulsa, Oklahoma 74127. The City does not have an equity interest in this organization.

Regional Metropolitan Utility Authority–The City is a participant with the City of Broken Arrow, Oklahoma, to operate a sewage treatment facility. The Authority (“RMUA”), a trust, was created for that purpose. The City contributes one-half of the Authority’s annual operating and capital budget and operates a facility for RMUA and leases the facility site to the Authority. The City appoints two of the ten Trustees. The remaining Trustees are appointed two each by the four other participating cities. Services are provided approximately 50% each to the City and the City of Broken Arrow. Upon termination of the trust, the net assets will be distributed to the beneficiaries based upon their pro rata interest. The City’s net investment of $10,144 is reported in the TMUA statement of net assets. Complete financial statements for RMUA can be obtained from the Office of the Controller, City of Tulsa, 175 East 2nd Street, Suite 885, Tulsa, OK 74103.

The City records its equity interest in the joint ventures, however, the joint ventures are not included in the City’s financial statements.

The following related or jointly governed organizations are excluded from the City's CAFR. These organizations are excluded from the City's reporting entity because the City does not retain an ongoing financial interest or an ongoing financial responsibility.

Tulsa City/County Library

Tulsa Housing Authority

Tulsa City/County Health Department

Tulsa County Criminal Justice Authority

City of Tulsa-Rogers County Port Authority

Tulsa Municipal Airport Trust

Tulsa County Vision 2025 Authority

Oklahoma State University Medical Center Trust

Other Obligations Long-term installment judgments payable to employees and dependents, which are indeterminable as to total amount at the time of judgment, are paid as they become due. These judgments totaled $5,410,000 as of June 30, 2011, and are recorded at their net present value of $3,859,000 in the Employee Insurance Service Fund.

The City records an estimated liability for workers' compensation claims against the City. Claims liabilities are based on estimates of the ultimate cost of reported claims (including future claim adjustment expenses) plus an estimate for claims which have been incurred but not reported based on historical experience. The estimated liability at June 30, 2011, was $19,179,000.

Retirement Plans—Each qualified employee is included in one of the three retirement plans in which the City participates. These are the Municipal Employees Retirement Plan, Oklahoma Firefighters Pension and Retirement System, and Oklahoma Police Pension and Retirement System. The City does not maintain the accounting records, hold the investments or administer the firefighter or police retirement funds. The police and firefighter plans are statewide systems administered by the State of Oklahoma. The municipal employees’ plan is administered by a separate board of trustees and the assets are held in custody by a local bank. A summary of significant data for each of the retirement plans follows: Municipal Employees’ Retirement Plan

The City contributes to the Municipal Employees’ Retirement Plan ("Plan") which is a single employer-defined benefit pension plan. The Plan was established by the City in accordance with the City Charter and state statutes, and is a component unit of the City's financial reporting entity, reported as a Pension Trust Fund. For the year ended June 30, 2011, the City's total payroll for all employees amounted to $192,461,000, including police and fire employees. Excluding police and fire employees, the City's total payroll was $107,437,000. Total covered payroll amounted to $93,640,000. Covered payroll refers to all compensation paid by the City to active employees covered by the Plan.

19 As of January 1, 2011, employee membership data related to the Plan was as follows:

Retirees and beneficiaries currently receiving benefits and terminated employees entitled to benefits but not yet receiving benefits 1,857 Active Plan Participants 2,387 Total 4,244 The non-uniformed, non-elected, full-time employees of the City are eligible to participate in the Plan on the first day of the month following the first day of their employment, and become 100% vested after five years of employment. Employees contribute 4% of base pay, while the City contributes remaining amounts necessary to fund the Plan, using the actuarial basis specified by City ordinance. The Actuarial Accrued Liability (AAL) is based upon a standardized measure established by the Governmental Accounting Standards Board in its Statement No. 25.

The actuarial assumptions and methods used to determine the AAL are as follows:

Valuation date January 1, 2011 Actuarial cost method Entry Age Normal Amortization method Level percent, open Remaining amortization periods 30 years Actuarial asset valuation method 5 year smoothed FMV Investment rate of return 7.75% Projected salary increases 4.25%-13.70% Inflation Rate 3.25% Cost-of-living adjustments None

Actuarial UAAL as a Actuarial Accrued Unfunded Percentage Actuarial Value of Liability (AAL) AAL Funded Covered of Covered Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll Date (a) (b) (b-a) (a/b) ( c ) ((b-a)/c)

1/1/11 $ 372,469 $ 484,698 $ 112,229 76.8% $ 101,690 110.4% 1/1/10 365,775 457,233 91,458 80.0% 108,423 84.4% 1/1/09 359,191 437,504 78,313 82.1% 111,170 70.4% 1/1/08 392,428 412,704 20,276 95.1% 107,574 18.8% 1/1/07 370,778 384,173 13,395 96.5% 103,358 13.0% 1/1/06 347,721 347,121 (600) 100.2% 95,804 (0.6)% 1/1/05 330,079 322,939 (7,140) 102.2% 89,434 (8.0)%

Oklahoma Firefighters’ Pension and Retirement System Uniformed members of the City's Fire Department participate in the Oklahoma Firefighters’ Pension and Retirement System, a system administered by the State of Oklahoma. In conformity with state law, the plan does not purport to be an actuarially funded plan; however, benefits are guaranteed by the State of Oklahoma. The contributions to the plan are established by the State, and the City is required to contribute 13% of covered payroll. Each firefighter contributes 8% of covered payroll. Contributions by the City to the system for the year ended June 30, 2011, amounted to $5,092,000, paid by the General Fund.

Oklahoma Police Pension and Retirement System Uniformed members of the City's Police Department participate in the Oklahoma Police Pension and Retirement System, a system administered by the State of Oklahoma. The plan covers full-time police officers of the City and provides retirement, death and disability benefits. In conformity with state law, the plan does not purport to be an actuarially funded plan; however, benefits are guaranteed by the State of Oklahoma.

20 Contributions to the plan are established by the State, and the City is required to contribute 13% of base pay and each police officer contributes 8% of base pay. Contributions by the City amounted to $5,961,000 for the year ended June 30, 2011, paid by the General Fund.

ABSENCE OF MATERIAL LITIGATION

No litigation is pending (a) seeking to restrain or enjoin the issuance or delivery of the Bonds or the application of the Bond proceeds as contemplated in the Preliminary Official Statement, (b) contesting or affecting any authority for or the validity of the Bonds, (c) contesting the power of the City to issue the Bonds or the power of the City to offer and sell them, (d) affecting the power of the City to levy and collect taxes to pay the Bonds, or (e) contesting the corporate existence or boundaries of the City.

INCONTESTABILITY

Thirty days after the issuance of an opinion of the Attorney General of the State of Oklahoma as ex- officio Bond Commissioner of the State, the Bonds shall be incontestable for any cause whatsoever.

LEGAL MATTERS

Legal matters incidental to the authorization and issuance of the Bonds are subject to the approval of Hilborne & Weidman, a professional corporation, Bond Counsel. Certain legal matters will be passed upon by the Attorney General of the State of Oklahoma. Certain legal matters for the City will be passed upon by the City Attorney.

TAX EXEMPTION

The Internal Revenue Code of 1986, as amended (the "Code"), establishes certain requirements that must be met subsequent to the issuance and delivery of the Bonds in order that interest on the Bonds be and remain excludable from gross income for federal income tax purposes under Section 103 of the Code. The Arbitrage and Use of Proceeds Certificate of the City, which will be delivered concurrently with the delivery of the Bonds, will contain provisions and procedures relating to compliance with the requirements of the Code. The City, in executing its Arbitrage and Use of Proceeds Certificate, will certify to the effect that it will comply with the provisions and procedures set forth therein and that it will do and perform all acts and things necessary or desirable to assure that interest paid on the Bonds is excludable from gross income under Section 103 of the Code. Noncompliance by the City with such provisions and procedures may require inclusion in gross income of interest on the Bonds retroactive to the date of issuance of the Bonds, regardless of when such noncompliance occurs. Prospective purchasers of the Bonds should be aware that (a) Section 265 of the Code denies a deduction for interest on indebtedness incurred or continued to purchase or carry the Bonds or, in the case of a financial institution, that portion of a holder's interest expense allocated to interest on the Bonds (other than "qualified obligations"), and that the Bonds are not qualified obligations for this purpose, (b) with respect to insurance companies subject to the tax imposed by Section 831 of the Code, Section 832 (b)(5)(B)(i) reduces the deduction for loss reserves by 15 percent of the sum of certain items, including interest on the Bonds, (c) interest on the Bonds earned by some corporations could be subject to the environmental tax imposed by Section 59A of the Code, (d) interest on the Bonds earned by certain foreign corporations doing business in the United States could be subject to a branch profits tax imposed by Section 884 of the Code, (e) passive investment income including interest on the Bonds may be subject to federal income taxation under Section 1375 of the Code for Subchapter S corporations that have Subchapter C earnings and profits at the close of the taxable year if greater than 25 percent of the gross receipts of such Subchapter S corporation is passive investment income and (f) Section 86 of the Code requires recipients of certain Social Security and certain Railroad Retirement benefits to take into account in determining gross income, receipts or accruals of interest on the Bonds. Assuming that the City complies with the provisions and procedures set forth in the Arbitrage and Use of Proceeds Certificate, in the opinion of Hilborne & Weidman, Bond Counsel, a form of which is attached hereto as Appendix D, under existing statutes and court decisions, interest on the Bonds is excludable 21 from the gross income of the recipients thereof pursuant to Section 103 of the Code for federal income tax purposes, and interest on the Bonds is not treated as a preference item in calculating alternative minimum taxable income of individuals or corporations. The interest on the Bonds are exempt for State of Oklahoma income taxation purposes.

INDEPENDENT AUDITORS

The basic financial statements of the City as of June 30, 2011 and for the year then ended, included in Appendix A of this Official Statement, have been audited by McGladrey & Pullen, LLP, independent auditors, as stated in their report included in Appendix A.

CREDIT RATINGS

The Bonds have been rated Aa1 by Moody's Investors Service ("Moody's") and AA by Standard & Poor's Corporation ("Standard & Poor's"). The ratings assigned by Moody's and Standard & Poor's express only the view of each respective rating agency. The explanation of the significance of each rating may be obtained from Moody's and Standard & Poor's, respectively. There is no assurance that any rating will continue for any period of time or that it will not be revised or withdrawn. Any revision or withdrawal of rating may have an effect on the market price of the Bonds.

CERTIFICATE WITH RESPECT TO PRELIMINARY OFFICIAL STATEMENT

At the time of original delivery of and payment for the Bonds, the City will deliver a certificate of the Director of Finance addressed to the Purchaser to the effect that each has examined this Preliminary Official Statement (including the Appendices) and the financial and other data concerning the City contained herein and that, to the best of their knowledge and belief: (a) this Preliminary Official Statement, both as of its date and as of the date of delivery of the Bonds, does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements herein, in the light of the circumstances under which they were made, not misleading and (b) between the date of this Preliminary Official Statement and the date of delivery of the Bonds there has been no material change in the affairs (financial or other), financial condition or results of operations of the City except as set forth in or contemplated by this Preliminary Official Statement.

CONTINUING DISCLOSURE AND OTHER AGREEMENTS OF THE ISSUER

The City has covenanted for the benefit of the Bondholders to provide certain financial information and operating data relating to the City by not later than December 31 in each year commencing December 31, 2012 (the "Annual Report"), and to provide notices of the occurrence of certain enumerated events, if deemed by the City to be material. The Annual Report and the notices of material events will be filed by the City with the Municipal Securities Rulemaking Board. The specific nature of the information to be contained in the Annual Report or the notices of material events is summarized below under the caption "Appendix E – Form of Continuing Disclosure Certificate." The City has covenanted to provide the final Official Statement to the purchaser within seven business days after final agreement to purchase, offer, or sell the Bonds in an offering and in sufficient time to accompany any confirmation that request payment from any customer. The City has not defaulted or failed to comply with any continuing disclosure obligations or events on any previous undertakings. These covenants have been made in order to assist the Underwriters in complying with S.E.C. Rule 15c2-12.

22 DEEMED FINAL

THE CITY HAS CERTIFIED THAT THIS PRELIMINARY OFFICIAL STATEMENT WAS DEEMED FINAL AS OF ITS DATE FOR PURPOSES OF RULE 15c2-12(b), EXCEPT FOR THE INFORMATION NOT REQUIRIED TO BE INCLUDED THEREIN UNDER RULE 15c2-12(b). Concurrently with the delivery of the Bonds, the City will furnish a certificate executed on behalf of the City by the undersigned to the effect that this Preliminary Official Statement, as of the date of the Preliminary Official Statement and as of the date of delivery of the Bonds, does not contain any untrue statement of a material fact or omit to state any material fact necessary to make to the statements herein, in light of the circumstances under which they were made, not misleading.

MISCELLANEOUS

All quotations from and summaries and explanation of law herein do not purport to be complete and reference is made to said laws for full and complete statements of their provisions. This Preliminary Official Statement is not to be construed as a contract or agreement between the City and the purchasers or holder of any of the Bonds. Any statements made in this Preliminary Official Statement involving matters of opinion are intended merely as opinion and not as representation of fact. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Preliminary Official Statement nor any sale made thereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City, or its agencies and authorities, since the date hereof.

/s/ DEWEY F. BARTLETT, JR. Mayor, City of Tulsa, Oklahoma

23 APPENDIX A

BASIC FINANCIAL STATEMENTS OF THE CITY OF TULSA FOR THE YEAR ENDED JUNE 30, 2011

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The Honorable Mayor and City Council City of Tulsa, Oklahoma Tulsa, Oklahoma

We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Tulsa, Oklahoma, as of and for the year ended June 30, 2011, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City of Tulsa, Oklahoma's management. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Tulsa Industrial Authority (TIA), which is a discretely presented component unit of the City. The financial statements of TIA, which comprise 1 percent of total assets and 0.4 percent of total revenues of the aggregate discretely presented component units, were audited by other auditors whose report has been furnished to us and our opinion, insofar as it relates to the amounts included for TIA, are based solely on the reports of the other auditor. Also, we did not audit the financial statements of the Tulsa Stadium Trust (TST), which is a blended component unit and major enterprise fund of the City. The financial statements of TST, which comprise 7 percent of total assets and 2 percent of total revenues of the business-type activities and represent 100 percent of the assets and revenues of the TST major enterprise fund, were audited by other auditors whose report has been furnished to us and our opinion, insofar as it relates to the amounts included for TST, are based solely on the report of the other auditor. Also, we did not audit the financial statements of The Operations of The BOK Center, as Managed by SMG, and The Operations of The Tulsa Convention Center, as Managed by SMG, an agent operating these facilities (collectively, SMG), which are presented within the Arena and Convention Center Fund, a major enterprise fund of the City. The financial statements of SMG, which collectively comprise 4 percent and 59 percent, respectively, of the total assets and total revenues of the Arena and Convention Center major enterprise fund and 2 percent and 20 percent, respectively, of the total assets and total revenues of the business-type activities. Those statements were audited by other auditors whose reports have been furnished to us and our opinion, insofar as it relates to the amounts included for The Operations of the BOK Center, as managed by SMG and The Operations of the Tulsa Convention Center, as managed by SMG, are based solely on the reports of the other auditors.

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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the reports of the other auditors provide a reasonable basis for our opinions.

In our opinion, based on our audit and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Tulsa, Oklahoma, as of June 30, 2011, and the respective changes in financial position and the cash flows, where applicable, thereof and the respective budgetary comparison for the General Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America.

As explained in Note 2(3.)to the basic financial statements, the City adopted GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, which changed its classifications for JRYHUQPHQWDOIXQGV¶IXQGEDODQFHV, and restated the Sales Tax Fund and aggregate remaining fund beginning fund balances. The City also adopted GASB Statement No. 61, The Financial Reporting Entity: Omnibus, an amendment of GASB Statements No. 14 and 34, which changed its presentation of the Tulsa Stadium Trust from a discretely presented component unit to a blended component unit and major enterprise fund, and restated beginning net assets of the business-type activities, the Tulsa Stadium Trust major enterprise fund and the aggregate discretely presented component units.

7KHDFFRPSDQ\LQJPDQDJHPHQW¶VGLVFXVVLRQDQGDQDO\VLVDQGSHQVLRQDQGSRVWHPSOR\PHQWLQIRUPDWLRQ as listed in the table of contents are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it.

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the &LW\RI7XOVD2NODKRPD¶V basic financial statements. The combining and individual nonmajor fund financial statements and other schedules, listed in the table of contents as supplementary information, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.

The accompanying introductory and statistical sections, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. This information has not been subjected to the auditing procedures applied in our audit of the basic financial statements and, accordingly, we express no opinion on them.

Kansas City, Missouri December 13, 2011

2 CITY OF TULSA COMPREHENSIVE ANNUAL FINANCIAL REPORT Year ended June 30, 2011

TABLE OF CONTENTS

Page INTRODUCTORY SECTION

Letter of Transmittal i List of Principal Officials viii Organizational Chart ix Certificate of Achievement x

FINANCIAL SECTION

Independent Accountants’ Report on Financial Statements and Supplementary Information

Management’s Discussion and Analysis MDA-1

Basic Financial Statements

Government-wide Financial Statements: Statement of Net Assets 1 Statement of Activities 2

Fund Financial Statements: Governmental Funds: Balance Sheet 3 Statement of Revenues, Expenditures and Changes in Fund Balances 4 Reconciliation of the Statement of Revenues, Expenditures and Changes in 5 Fund Balances of Governmental Funds to the Statement of Activities General Fund Statement of Revenues, Expenditures and Changes in Fund Balance – 6 Budget and Actual, Budgetary Basis

Proprietary Funds: Statement of Net Assets 7 Statement of Revenues, Expenses and Changes in Fund Net Assets 8 Statement of Cash Flows 9

Fiduciary Funds: Statement of Fiduciary Net Assets 10 Statement of Changes in Fiduciary Net Assets 11

Discretely Presented Component Units: Statement of Net Assets 12 Statement of Revenues, Expenses and Changes in Fund Net Assets 13 Recast of the Combining Statement of Changes in Net Assets into the 14 Statement of Activities Format

Notes to Basic Financial Statements 15

Required Supplementary Information

Defined Benefit Pension Trust: Schedule of Funding Progress 55 Schedule of Employer Contributions 55 Schedule of Actuarial Valuation, Methods and Assumptions 55

Other Post Employment Benefits: Schedule of Funding Progress 56 Schedule of Actuarial Valuation, Methods and Assumptions 56 City of Tulsa, Oklahoma Management’s Discussion and Analysis June 30, 2011

As management of the City of Tulsa, Oklahoma (the City), we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2011. We encourage readers to consider the information presented here in conjunction with our letter of transmittal in the Introductory Section of this report and the City’s financial statements, which follow this management’s discussion and analysis. All amounts, unless otherwise indicated, are expressed in thousands of dollars and references to a year, such as 2011, contain an implied reference to the fiscal year, such as “fiscal year 2011.”

Financial Highlights

Government-Wide Financial Statements

x The primary government’s net assets increased 4.2% or $71.3 million during 2011 due to capital assets transferred from Tulsa Development Authority, compared to an increase of $35.9 million during 2010. Public safety and protection expenditures increased $9.2 million during 2011 compared to a decrease of $12.3 million during 2010. Public works and transportation expenditures decreased by $24.7 million during 2011 compared to a decrease of $17.5 million during 2010. Culture and recreation expenditures decreased $1.9 million during 2011 compared to a decrease of $4.0 million during 2010. Social and economic development expenditures decreased $9.4 million during 2011 compared to an increase of $3.0 million during 2010. Investment earnings decreased $2.2 million during 2011 compared to a decrease of $10.6 million during 2010. Revenue from capital grants and contributions decreased $27.9 million during 2011 compared to a $25.5 million decrease during 2010. Revenue from operating grants and contributions decreased $18.7 million during 2011 compared to a $6.4 million increase during 2010. The business-type activities net assets decreased by $3.3 million during 2011, compared to a $16.6 million increase during 2010. The net assets of the business-type activities of the Tulsa Public Facilities Authority (a blended component unit of the City) decreased by $5.4 million in 2011, compared to a $0.9 million increase in 2010. Long term renovation initiatives at the Convention Center were completed during 2010. No new renovation projects for either the Convention Center or BOK Center were started. Stormwater management net assets increased by $3.1 million in 2011, compared to a $16.6 million increase in 2010 owing to ongoing investment in capital assets to maintain and improve the City’s infrastructure. The Tulsa Stadium Trust, contributing $29.9 million, is now included in business-type activities due to a change in reporting entity resulting from the issuance of GASB 61-The Financial Reporting Entity. Golf courses net assets experienced little change in 2011.

x In 2011, governmental activities’ sales tax revenue increased $5.9 million owing to the stabilizing economy. Property tax revenue increased by $7.3 million as tax assessments for bonded debt and judgments continue to rise.

x In 2011, the City issued $91.1 million of general obligation (GO) bonds. Proceeds totaling $70 million will be used to fund capital projects. The remaining $21.1 million were issued to refund Series 2002 GO bonds.

x In 2011, investment income fell $2.2 million for the primary government, a 21.2% decrease along with the fall of market interest rates throughout the year.

x In 2011, the City’s primary government expenses decreased by $30.3 million, or 8.4%. Contributing to the change, expenses for public works and transportation decreased $24.7 million, expenses for administration and support decreased $5.3 million, while expenses for public safety and protection increased by $9.2 million. Expenses for culture & recreation, social & economic development and interest on long term debt decreased $9.6 million.

MDA - 1 City of Tulsa, Oklahoma Management’s Discussion and Analysis June 30, 2011

Fund Financial Statements - Major Governmental and Proprietary Funds

Governmental funds reported a combined fund balance of $397.1 million, up 26.2% from 2010. The General Fund’s fund balance increased $12.3 million to $67.1 million. In addition, other notable changes follow:

x General Fund use tax revenue increased 14.8% as economic activity and development enjoyed a modest recovery in the Tulsa area.

x Capital project infrastructure expenditures of $42.2 million of Sales Tax Funds decreased by $4.8 million which was anticipated in the annual budget.

x The Bond Funds fund balance increased $34.8 million after receiving the proceeds from the General Obligation bond issue and spending $31.9 million in capital outlays. Capital project expenditures in the Bond Funds fund decreased by $3.9 million as construction for infrastructure projects slowed.

x Social and economic expenditures decreased $8.8 million due to reduction in grant funding.

x Stormwater management fund incurred an operating loss of $2.7 million while receiving $1.6 million from governmental funds for additional capital improvements to the stormwater management system. Combined with non-operating revenue from grants and investment income, this resulted in a $3.1 million increase in net assets.

x The Golf Courses’ fund revenues and expenses experienced little change from 2010. Transfers into the fund were $0.6 million more than 2010. Net assets experienced a $0.1 million decrease for the year. The golf courses are operated by an independent third party management company, resulting in the City’s moderate expenses.

x One Technology Center contributed lease revenue of $8.6 million, an increase of $1.9 million.

x BOK Center and the Convention Center contributed $12.3 million in revenue, up $0.2 million from the previous year. Major entertainment events were booked contributing to their continuing successes.

Debt Offerings

x General Obligation bonds – In December 2010 and February 2011, the City issued General Obligation bonds totaling $102.7 million which includes $11.6 million for premium on debt issuance. $70 million of the proceeds are to be used for street improvements and will be repaid 100% from the sinking fund. The remaining $21.1 million proceeds were used to refund Series 2002 and will be repaid 100% from the sinking fund. The remaining reductions totaling $21.4 million represent principal payments on existing obligations. Refer to Note 11.

x Revenue bonds – The reductions totaling $21 million represent principal payments on existing obligations for governmental and business activities of $13 million and $8 million respectively.

x The Tulsa Metropolitan Utility Authority Sewer Fund issued promissory notes in the amount of $33 million and reduced existing obligations by $10.2 million. The proceeds of these notes are to be used for improvements to the wastewater systems. These loans from the Oklahoma Water Resources Board are collateralized by a first lien and security interest in the TMUA’s wastewater treatment system, water distribution system, and the associated revenues. The TMUA also issued $24.1 million in revenue bonds series 2011 and reduced debt obligations by $6.9 million.

x Tulsa Airport Improvement Trust – The TAIT issued $13.5 million in revenue bonds series 2010 to fund development at the airport. Reductions totaling $20.4 million represent principal payments on existing obligations.

MDA - 2 City of Tulsa, Oklahoma Management’s Discussion and Analysis June 30, 2011

Overview of the Financial Statements

This discussion and analysis is intended to serve as an introduction to the City’s financial statements, comprising the following three components:

1. Government-wide financial statements 2. Fund financial statements 3. Notes to the financial statements including other supplementary information

Government-Wide Financial Statements

Government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, similar to private-sector business.

The statement of net assets presents information on all of the City’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets can serve as a useful indicator of whether the financial position of the City is improving or deteriorating.

The statement of activities presents information showing how the government’s net assets changed during the year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the cash flows. Thus, revenues and expenses reported in this statement for some items will only result in cash flows in future fiscal periods (for example, uncollected taxes and earned but unused vacation leave).

The government-wide financial statements of the City are divided into three categories:

x Governmental activities - Most of the City’s basic services are included here, such as public safety and protection, social and economic, public works and transportation, culture and recreation, and administrative and support functions. Sales, use, and property taxes, charges for services, and state and federal grants finance most of these activities.

x Business-type activities - The City charges fees to customers to help it cover the costs of certain services it provides. BOK Center and Convention Center, One Technology Center, Golf Course, Tulsa Stadium Trust and Stormwater Management operations are included here.

x Discretely presented component units - The City includes eight other entities in its report— Tulsa Metropolitan Utility Authority, Tulsa Authority for Recovery of Energy, Tulsa Airports, and the Other Component Units comprising of the Tulsa Development Authority, Metropolitan Tulsa Transit Authority, Tulsa Industrial Authority, Tulsa Parking Authority, and the Tulsa Performing Arts Center Trust. Although legally separate, these “component units” are important because the City is financially accountable for them.

Fund Financial Statements

A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements, State law and bond covenants. The fund financial statements provide the reader with information about the City’s most significant funds—not the City as a whole.

MDA - 3 City of Tulsa, Oklahoma Management’s Discussion and Analysis June 30, 2011

The funds of the City are divided into three categories:

x Governmental funds – Most of the City’s basic services are included in governmental funds, which focus on (1) how cash and other financial assets that can readily be converted to cash flow in and out and (2) the balances left at year-end that are available for spending. Consequently, the governmental funds statements provide a detailed short-term view that helps one determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. Because this information does not encompass the additional long-term focus of the government-wide statements, we provide additional information at the bottom of the governmental funds statement, or on the subsequent page, that explains the relationships (or differences) between them.

x Proprietary funds – Services for which the City charges customers a fee are generally reported in proprietary funds. Proprietary funds, like the government-wide statements, provide both long and short-term financial information.

x In fact, the City’s enterprise funds (one type of proprietary fund) are used to report the same functions presented as business type activities in the government-wide financial statements, but with additional detailed information, such as cash flows.

x We use internal service funds (the other type of proprietary fund) to report activities that provide supplies and services for the City’s other programs and activities.

x Fiduciary funds – The City is the trustee, or fiduciary, for its employees’ pension plans. Fiduciary activities are reported in a statement of fiduciary net assets and a statement of changes in fiduciary net assets. We exclude these activities from the City’s government-wide financial statements because the City cannot use these assets to finance its operations.

Notes to the Financial Statements - The notes to the financial statements 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 are located immediately following the basic financial statements.

Required supplementary information - In addition to the basic financial statements and accompanying notes, this report presents two categories of required supplementary information (“RSI”) following the notes.

x The City’s progress in funding its obligation to provide pension benefits to its employees

x The City’s progress in funding its obligation to provide post employment benefits to its employees

Other information - Combining statements, which include nonmajor governmental funds, internal service funds, and nonmajor discretely presented component units are presented immediately following the RSI.

Government-Wide Financial Analysis

Net Assets of the City of Tulsa -- As of June 30, 2011, the City’s combined net assets were $1.78 billion, with $1.88 billion investment in capital assets before its related debt of $349.4 million. Restricted net assets totaling $169.0 million is composed of $29.2 million in debt service, $129.0 million in capital projects, and $10.8 million for other purposes. Unrestricted net assets totals $82.7 million. Governmental activities’ net assets increased $74.6 million and Business-type activities’ net assets decreased $3.3 million.

MDA - 4 City of Tulsa, Oklahoma Management’s Discussion and Analysis June 30, 2011

Governmental Business-type Activities Activities Total 2011 2010 2011 2010 2011 2010

Current and other assets$ 553,472 $ 444,109 $ 46,186 $ 51,526 $ 599,658 $ 495,635 Capital assets 1,237,660 1,193,295 642,926 647,217 1,880,586 1,840,512 1,791,132 1,637,404 689,112 698,743 2,480,244 2,336,147

Current and other liabilities 156,981 101,514 17,247 19,687 174,228 121,201 Long-term liabilities 417,924 394,255 105,178 109,029 523,102 503,284 574,905 495,769 122,425 128,716 697,330 624,485

Net assets: Invested in capital assets, net of related debt 989,918 967,462 541,280 541,099 1,531,198 1,508,561 Restricted 160,049 121,161 8,936 11,702 168,985 132,863 Unrestricted 66,260 53,012 16,471 17,226 82,731 70,238 $ 1,216,227 $ 1,141,635 $ 566,687 $ 570,027 $ 1,782,914 $ 1,711,662

Highlights - The City possesses sufficient funds to meet requirements for cash outlays in the next year, and possesses the financial capacity to meet its long-term obligations in the years to come.

The net assets of Business-type activities decreased 0.6% to $566.7 million in 2011 from $570.0 million in 2010, which included unrestricted net assets of $16.5 million and $17.2 million at June 30, 2011 and 2010, respectively.

The City’s total revenues increased 2.3% to $468.3 million in 2011. Sales Taxes, the largest revenue category, increased to $199.4 million in 2010 from $193.5 million in 2010. The increase is a result of the modest economic upturn. Property taxes increased to $49.3 million in 2011 from $42.0 million in 2010, satisfying debt service requirements on recent general obligation bond issues.

Program revenue generated $135.5 million, consisting of charges for services, federal and state grants, and other contributions, down from $160.3 million in 2010. Capital grants revenue decreased by $27.9 million while revenue for services increased by $3.6 million. Operating grant revenue decreased $18.7 million.

Business-type activity revenues totaling $50.2 million include revenue generated by the One Technology Center and the BOK and Convention Centers totaling $8.6 million and $12.9 million respectively. Stormwater revenues increased $1.2 million or 5.6%. Fees collected at the City’s two thirty-six holes golf courses decreased to $2.4 million.

Expenses for the primary government decreased 8.4% to $331.6 million. The City’s expenses cover a range of services, including public safety, public works, culture and recreation, and social and economic programs.

MDA - 5 City of Tulsa, Oklahoma Management’s Discussion and Analysis June 30, 2011

Changes in Net Assets Governmental Business-type Activities Activities Total 2011 2010 2011 2010 2011 2010 Re ve nue s: Program revenues: C ha rge s fo r s ervi ces$ 62 ,3 20 $ 61,510 $ 46,278 $ 43,568 $ 108,598 $ 105,078 Ope rati ng g ran ts/co ntrib uti ons 13 ,6 09 3 2,26 2 - 79 13,609 32,341

Capital grants/contributions 9,924 12,185 3,319 28,950 13,243 41,135 General revenues: Sa le s ta xes 1 99 ,3 84 19 3,50 5 - - 199,384 193,505 Property taxes 49,315 41,989 - - 49,315 41,989 Fran chi se 27 ,2 25 2 6,14 4 - - 27,225 26,144 U se tax 17 ,9 27 1 5,62 2 - - 17,927 15,622 Hotel/Motel taxes 5,683 5,821 - - 5,683 5,821 Intergovernmental revenue 22,667 2,508 - - 22,667 2,508

Other 10,079 11,284 611 708 10,690 11,992 418,133 402,830 50,208 73,305 468,341 476,135 Expenses: Administrative and support 28,756 34,010 - - 28,756 34,010 Public safety and protection 193,869 184,640 - - 193,869 184,640 Public works and transportation 58,636 83,295 - - 58,636 83,295 Cu ltu re an d rec rea ti on 15 ,8 12 1 7,74 9 - - 15,812 17,749 Social and economic development 21,894 31,310 - - 21,894 31,310 Interest on long-term debt 12,624 10,910 - - 12,624 10,910 Stormwater - - 26,050 24,859 26,050 24,859 One Technology Center - - 9,884 9,431 9,884 9,431 Arena & Convention - - 22,480 22,182 22,480 22,182

Tulsa Stadium Trust - 3,768 2,071 3,768 2,071 Golf courses - - 3,316 3,503 3,316 3,503 331,591 361,914 65,498 62,046 397,089 423,960 Changes before transfers 86,542 40,916 (15,290) 11,259 71,252 52,175 Transfers (11,950) (21,612) 11,950 21,612 - - Ch an ge i n ne t a sse ts 74 ,5 92 1 9,30 4 (3,3 40 ) 3 2,87 1 7 1,2 52 52,175 Net assets, beginning as restated 1,141,635 1,122,331 5 70,0 27 537,156 1,711,662 1,659,487 Net assets, ending$ 1,216,227 $ 1,14 1,63 5 $ 566,687 $ 570,027 $ 1,782,914 $ 1,71 1,6 62

Governmental Activities - Governmental Activities’ general revenues increased 11.9%, while expenses decreased 8.4%. Sales tax revenues increased 3.0% due to an improving economy. Property tax revenues increased 17.4% while franchise, use, and hotel taxes increased a combined 6.8%. Transfers from governmental activities to business-type activities decreased $9.7 million. Transfers to the golf course fund increased $0.6 million.

x Administrative and support expenses decreased 15.4% due to the City’s continued efforts to reduce costs through attrition and operating efficiencies. Debt Service decreased 9%, partly due to the black officers’ 2010 settlement not repeated in 2011.

MDA - 6 City of Tulsa, Oklahoma Management’s Discussion and Analysis June 30, 2011 x Public safety expenses are 5.0% higher. In 2011, the Fire and Police Department’s position count increased by 3.5% and 11.6%, respectively. Police and Fire each held an academy in January 2011 and May 2011 respectively. x Public works and transportation expenses decreased 29.6% as depreciation expense decreased. x Culture and recreation expenses decreased by 10.9%. x Social and economic development expenses are 30.1% lower.

Graph 1 below illustrates the cost of delivering services in the City’s five largest programs – public safety, public works, social and economic development, administrative and support, and culture and recreation – by comparing cost to program income.

Graph 1 - Expenses and Program Revenues – Governmental Activities

$250,000

$200,000

$150,000

$100,000 Expenses $50,000 Revenues $- t t t or ion on ion n eb pp ct ati at me d su te rt re op on d ro po ec el t n ns r ev es ea ndp ra & d ter tiv a t ure ic In ra ety s & lt om ist af rk Cu on in c s wo ec dm bli ic & A u bl al P Pu ci So

The net cost indicates the financial burden of each of these functions.

The cost of all governmental activities this year was $331.6 million. A portion of the costs were paid by those who directly benefited from the programs ($62.3 million), or by other governments and organizations that subsidized certain programs with grants and contributions ($23.5 million).

The remaining costs were paid as follows:

x The City paid for the $249.7 million “public benefit” portion with $336.3 million from taxes and other revenues, such as interest earnings and unrestricted grants.

x Public safety required the largest amount of public funds with a subsidy of $170.8 million.

x Administration and support service costs were 8.7% of overall expenses in 2011, down from 9.4% in 2010.

MDA - 7 City of Tulsa, Oklahoma Management’s Discussion and Analysis June 30, 2011

x For every dollar of social and economic expenses in 2011, 40 cents came from federal and state grants, down from 63 cents in 2010.

x Governmental Activities transferred $12.0 million to Business-Type Activities, in the form of transfers and capital contributions. Another $9.9 million was transferred to Component Units, as follows: Metropolitan Tulsa Transit Authority - $5.8 million, Tulsa Metropolitan Utility Authority - $2.1 million, Tulsa Development Authority - $1.4 million, Tulsa Airports - $0.5 million and TARE - $0.1 million.

x 48% of Governmental Activities revenue came from sales taxes (see Graph 2).

Graph 2 - Governmental Activities – Revenue by Source

Non-restricted grants and other taxes 9% Charges for services 15%

Use tax 4% Operating grants & contributions 3% Franchise tax 7% Capital grants & contributions 2%

Property taxes 12%

Sales taxes 48%

MDA - 8 City of Tulsa, Oklahoma Management’s Discussion and Analysis June 30, 2011

The mix of various revenues does not remain constant as illustrated by Graph 3.

Graph 3 - Governmental Activities – Change in Revenue by Source

50.0%

45.0%

40.0%

35.0%

30.0%

25.0%

20.0%

15.0%

10.0% 5.0% 0.0% 2010 - % of total 2011 - % of total Use tax Other Franchise Sales taxes Operating Property taxes Hotel/Motel tax Hotel/Motel grants/contributions Charges for services Capital grants/contributions Capital Intergovernmental revenue

Graph 4 – Expenses and Program Revenues – Business-type Activities

35,000

30,000

25,000

20,000

15,000

10,000

5,000

- Arena & Convention One Technology Center Golf Courses Tulsa Stadium Trust Stormwater

Expenses Program Revenues

MDA - 9 City of Tulsa, Oklahoma Management’s Discussion and Analysis June 30, 2011

Of the Governmental Activities expenses, 58.5% were for public safety and protection and 17.7% were for public works and transportation (see Graph 5).

Graph 5 - Expenses – Governmental Activities

Public safety Public w orks and protection and transportation 58.5% 17.7%

Culture & recreation 4.8% Social and economic development Interest 6.6% Administrative 3.8% 8.7%

Graph 6 – Government-Wide Net Assets

$2,000,000 $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 Governmental Activities $800,000 Net Assets $600,000 Business-Type Activities $400,000 Net Assets $200,000 $0 Total Primary Government Net Assets 2005 2006 2007 2008 2009 2010 2011

MDA - 10 City of Tulsa, Oklahoma Management’s Discussion and Analysis June 30, 2011

Graph 7 – Employment Levels

430,000 425,000 420,000 415,000 410,000 405,000 400,000 395,000 390,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Chart 9 – Unemployment Levels

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

MDA - 11 City of Tulsa, Oklahoma Management’s Discussion and Analysis June 30, 2011

Budgetary Highlights

The General Fund is the only major fund requiring an annually adopted budget.

General Fund Budgetary Highlights

The original FY 11 General Fund budget adopted by the Mayor and City Council totaled $232.9 million. The budget was balanced by revenue estimates of $230.0 million and fund balance totaling $2.9 million. It was 4.8 percent less then the FY 10 original budget. Taking into consideration carry over encumbrances the total authorized expenditure amount on July 1, 2010 was $239.3 million.

Original Amended Budgetary Basis Budget Budget Actual Variance 2011 2010 2011 2010 2011 2010 2011 2010 Revenues: Taxes$ 163,514 $ 176,957 $ 168,440 $ 163,230 $ 173,566 $ 166,261 $ (5,126) $ (3,031) Licenses and permits 5,059 6,092 5,059 5,072 5,922 5,176 (863) (104) Intergovernmental 8,686 8,166 8,709 7,916 9,054 8,371 (345) (455) Charges for service 35,788 34,874 35,047 34,774 33,648 35,852 1,399 (1,078) Fines and forfeitures 8,076 9,005 8,141 8,105 10,805 8,146 (2,664) (41) Investment income 5,231 5,760 5,231 5,760 4,452 6,846 779 (1,086) Miscellaneous 1,295 1,512 2,701 1,555 3,541 2,206 (840) (651) Transfers In 2,375 2,020 2,375 2,020 2,387 2,000 (12) 20 $ 230,024 $ 244,386 $ 235,703 $ 228,432 $ 243,375 $ 234,858 $ (7,672) $ (6,426) Expenses: Administration and support$ 21,417 $ 20,914 $ 22,919 $ 21,641 $ 19,828 $ 21,192 $ 3,091 $ 449 Public works and transportation 26,870 28,331 30,811 28,516 30,135 27,833 676 683 Social and economic development 8,711 10,107 9,689 10,217 9,303 7,393 386 2,824 Public safety and protection 149,828 159,823 154,090 154,233 150,961 153,150 3,129 1,083 Culture and recreation 14,446 15,735 14,685 15,321 14,125 15,218 560 103 Payments to component units 5,775 6,166 5,775 5,748 5,775 5,748 - - Transfers out 5,845 3,435 7,337 3,389 7,337 1,879 - 1,510 $ 232,892 $ 244,511 $ 245,306 $ 239,065 $ 237,464 $ 232,413 $ 7,842 $ 6,652

The lower budget continued many of the reductions made during FY 10. While sales tax revenue had stabilized and was no longer declining by the time the FY 11 budget was adopted, the local economy was still not showing signs of growth necessary to confidently project revenue increases.

Fortunately, actual revenue collections were higher than the conservative FY 11 revenue estimates and the elected officials were able to use the additional dollars to restore the wage and benefit concessions made by employees in FY 10, and end the furlough program for civilian employees, and comparable reduction to firefighters, mid way through the fiscal year. The extra collections were also appropriated to respond to a historic snowfall in February. Private firms were hired to help remove snow from city streets and the salt supply was restocked after being nearly exhausted. This was the major FY 11 budget amendment in a year that saw smaller adjustments usually involving receipt and appropriation of dedicated resources for specific programs.

MDA - 12 City of Tulsa, Oklahoma Management’s Discussion and Analysis June 30, 2011

Prudent management of the city’s General Fund resources produced a healthy fund balance available for appropriation at the end of FY 11. The 6 percent emergency operating reserve was fully funded and the elected officials committed other fund balance for a payment to a yet to be established trust fund being set up to finance the City’s OPEB liability. While the total recovery to pre FY 10 service levels had not been achieved by the end of FY 11, progress had been made and it continued into FY 12.

Economic Factors and Next Year’s Budget and Rates

Beginning in April of 2009, Tulsa’s sales tax collections began a decline that continued for 13 straight months. The FY 10 amount was 7.3% less than FY 09. It was the steepest loss in the City’s sales tax history. Further decline was anticipated in FY 11, but at a lower rate of 3%. Fortunately, by mid year the economy had stabilized and sales tax again began to grow. FY 11 ended with a year over year sales tax increase of 2.5%. Based on current indicators a similar growth rate is projected for FY 12. The 2012 budget was based on the assumption that the local economy will experience modest growth.

The declines seen in the TMSA labor force appear to have stabilized over 2010. The Tulsa Metro Chamber forecasts slight growth in 2011 followed by 0.41% annual growth in 2012 through 2015. Wage & Salary employment has fared even better over the last year. After losing close to 15,000 jobs in 2010, the TMSA is now seeing steady monthly gains. The Chamber forecasts growth in Wage & Salary employment of 3.3% in 2011 and an annual growth rate of 2.3% for the four following years. The TMSA has already seen a gain of 5,000 jobs over the first six months of 2011. With OSU’s Center for Applied Economic Research (CAER) forecasting an annual population growth of 1.3% in population; job opportunities should outpace the rising labor force over the next 4 years. Lastly, Moody’s Analytics has forecasted a 2.9% growth in the TMSA’s Gross Metro Product (GMP) in 2012.

Considering the forecasted growth in wage & salary employment and GMP with the fact that the City ended FY 11 with an annual sales tax growth of 2.5%, it is not unreasonable to assume a 2% to 3% growth in sales tax in FY 12. Therefore, after reductions in FY 10 and a presumption of flat revenue in FY 11, the City has included modest expenditure increases in FY 12’s budget. The City has lifted the Mayor’s hiring review for all vacant positions and has included academies for sworn police and fire personnel in the FY 12. Additionally, the Tulsa Metropolitan Utility Authority recommended and the City Council approved water and sewer rate increases that will positively affect the City’s revenues. There will be no increase in stormwater or EMSA fees in FY 12 and the Council has not shown an interest in increasing rates for solid waste disposal.

While Tulsa has been significantly affected by the recession, the impact has been less than in many cities. Stabilization and modest growth were seen in the final months of FY 11 and are expected to continue in FY 12.

MDA - 13 City of Tulsa, Oklahoma Management’s Discussion and Analysis June 30, 2011

Capital Assets and Debt Administration

Capital Assets - At the end of 2011 the City had invested $1.88 billion in a broad range of capital assets, including police and fire equipment, buildings, park facilities, roads, and bridges. This amount represents a net increase (after additions, deductions, and depreciation) of $88 million, or 4.9% over last year (see Note 7 to the financial statements for additional detailed information regarding capital assets). The inventory of construction projects in progress increased by $30 million, and land acquisition costs increased by $10 million. Expenditures for infrastructure decreased $5 million.

Capital Assets, net of depreciation (amounts expressed in millions)

Governmental Activities Business Activities Total Percentage 2011 2010 2011 2010 2011 2010 Change Land$ 466 $ 462 $ 82 $ 77 $ 549 $ 539 1.9% Buildings and improvements 123 126 502 438 625 564 10.8% Equipment 49 52 45 49 94 102 -7.8% Infrastructure 391 396 - - 391 396 -1.4% Construction in progress 208 157 14 35 222 192 15.2% $ 1,238 $ 1,193 $ 643 $ 600 $ 1,880 $ 1,793 4.8%

Long-term Debt - At year end, the City had $529 million in bonds outstanding, an increase of 12.6% from last year, as shown below. More detailed information about the City’s long-term liabilities is presented in Note 11 to the financial statements. Lo ng -term Debt (amounts expressed in millions)

Governmental Activities Business Activities Total 2011 2010 2011 2010 2011 2010 General obligation bonds$ 408 $ 351 $ - $ - $ 408 $ 351 Revenue bonds 14 28 106 91 120 119 Compensated absences 28 31 1 1 29 32 Other long-term debt 41 41 1 1 42 42 $ 491 $ 451 $ 109 $ 93 $ 600 $ 544

Bond Ratings - In their reports dated October 2011, Moody’s Investors Service assigned and affirmed an Aa1 rating while Standard and Poor’s assigned and affirmed an AA rating to the City’s general obligation bonds.

Contacting the City’s Financial Management

Questions about this report or requests for additional information should be directed to:

City of Tulsa Office of the Controller 175 East 2nd Street, Suite 885 Tulsa, Oklahoma 74103

MDA - 14 CITY OF TULSA STATEMENT OF NET ASSETS June 30, 2011 (amounts expressed in thousands)

Primary Government Governmental Business-type Component Activities Activities Total Units ASSETS Current assets: Cash and cash equivalents$ 385,333 $ 24,594 $ 409,927 $ 92,864 Cash and cash equivalents - restricted - - - 1,775 Investments - - - 3,832 Receivables, net 96,319 4,130 100,449 33,947 Prepaid expenses - 529 529 - Internal balances 1,196 (1,196) - - Inventories 581 254 835 3,544 Current portion of notes receivable - restricted - - - 366 Other current assets - restricted - - - 206 Total current assets 483,429 28,311 511,740 136,534

Noncurrent assets: Cash and cash equivalents - restricted 2,599 11,446 14,045 49,538 Receivables, net 14,202 63 14,265 3,679 Receivables, net - restricted 359 - 359 11,326 Investments - - - 3,505 Investments - restricted 18,568 2,879 21,447 126,746 Advances to primary government - restricted - - - 3,157 Advances to primary government - - - 127 Advances to component units 326 - 326 - Land held for resale, net - restricted - - - 7,926 Other assets 18,327 3,487 21,814 5,312 Equity interest in joint ventures 15,662 - 15,662 11,816 Nondepreciable capital assets 674,469 95,788 770,257 254,407 Capital assets, net 563,191 547,138 1,110,329 1,183,193 Total noncurrent assets 1,307,703 660,801 1,968,504 1,660,732 Total assets 1,791,132 689,112 2,480,244 1,797,266 LIABILITIES Current liabilities: Accounts payable and accrued liabilities 23,881 6,880 30,761 28,564 Unearned revenue 57,153 5,325 62,478 1,223 Current portion of long-term liabilities 72,595 3,406 76,001 35,589 Deposits subject to refund 68 - 68 9,755 Total current liabilities 153,697 15,611 169,308 75,131 Noncurrent liabilities: Advances from primary government - - - 326 Advances from component units 3,284 - 3,284 - Unearned revenue - 1,636 1,636 4 Long-term liabilities 417,924 105,178 523,102 541,902 Total noncurrent liabilities 421,208 106,814 528,022 542,232 Total liabilities 574,905 122,425 697,330 617,363 NET ASSETS Invested in capital assets, net of related debt 989,918 541,280 1,531,198 984,633 Restricted for: Debt service 26,762 2,468 29,230 36,361 Capital projects 122,732 6,232 128,964 27,313 Other purposes 10,555 236 10,791 8,739 Unrestricted 66,260 16,471 82,731 122,857 Total net assets$ 1,216,227 $ 566,687 $ 1,782,914 $ 1,179,903

The notes to the financial statements are an integral part of this statement.

1 CITY OF TULSA STATEMENT OF ACTIVITIES Year ended June 30, 2011 (amounts expressed in thousands)

Net (Expenses) Revenues and Program Revenues Changes in Net Assets Charges for Operating Capital Primary Government Services Grants and Grants and Governmental Business-type Component Functions/Programs Expenses and Fines Contributions Contributions Activities Activities Total Units Primary government: Governmental activities: Administrative and support$ 28,756 $ 5,501 $ - $ - $ (23,255) $ - $ (23,255) $ - Public safety and protection 193,869 16,815 5,713 576 (170,765) - (170,765) - Public works and transportation 58,636 34,574 682 5,372 (18,008) - (18,008) - Culture and recreation 15,812 4,887 235 - (10,690) - (10,690) - Social and economic development 21,894 543 6,979 3,976 (10,396) - (10,396) - Interest on long-term debt 12,624 - - - (12,624) - (12,624) - Total governmental activities 331,591 62,320 13,609 9,924 (245,738) - (245,738) - Business-type activities: Stormwater 26,050 23,231 - 1,593 - (1,226) (1,226) - One Technology Center 9,884 8,560 - - - (1,324) (1,324) - Arena & Convention 22,480 12,300 - 556 - (9,624) (9,624) -

2 Tulsa Stadium Trust 3,768 163 - 755 - (2,850) (2,850) - Golf Courses 3,316 2,024 - 415 - (877) (877) - Total business-type activities 65,498 46,278 - 3,319 - (15,901) (15,901) - Total primary government$ 397,089 $ 108,598 $ 13,609 $ 13,243 (245,738) (15,901) (261,639) - Component units$ 246,734 $ 218,632 $ 21,817 $ 20,024 13,739

General revenues: Taxes: Sales taxes 199,384 - 199,384 318 Property taxes 49,315 - 49,315 4,713 Franchise taxes 27,225 - 27,225 - Use taxes 17,927 - 17,927 - Hotel/Motel taxes 5,683 - 5,683 - Intergovernmental revenue, unrestricted 22,667 - 22,667 - Payments from City of Tulsa - - - 9,940 Payments from (to) component units 76 - 76 - Unrestricted investment earnings 7,513 558 8,071 2,874 Miscellaneous 2,490 53 2,543 1,544 Transfers (11,950) 11,950 - - Total general revenues and transfers 320,330 12,561 332,891 19,389 Change in net assets 74,592 (3,340) 71,252 33,128 Net assets--beginning, as restated 1,141,635 570,027 1,711,662 1,146,775 Net assets--end of year$ 1,216,227 $ 566,687 $ 1,782,914 $ 1,179,903

The notes to the financial statements are an integral part of this statement. CITY OF TULSA BALANCE SHEET GOVERNMENTAL FUNDS June 30, 2011 (amounts expressed in thousands)

cmb 10/14/11 SP10/6/11 SJP 10/10/11 Other Total Governmental Governmental General Bond Sales Tax Funds Funds Assets Cash and cash equivalents$ 45,042 $ 167,774 $ 109,133 $ 52,697 $ 374,646 Receivables, net 25,246 789 9,165 60,986 96,186 Due from other funds 238 - - - 238 Advances to other funds 729 - 6,867 - 7,596 Advances to component units 326 - - - 326 Total assets$ 71,581 $ 168,563 $ 125,165 $ 113,683 $ 478,992

Liabilities and fund balances Liabilities: Accounts payable and accrued liabilities 4,218 6,018 6,342 2,405 18,983 Deposits subject to refund - - 68 - 68 Advances from other funds - - - 2,141 2,141 Advances from component units 127 3,157 - - 3,284 Deferred revenue 119 - - 57,248 57,367 Total liabilities 4,464 9,175 6,410 61,794 81,843

Fund balances: Nonspendable 1,055 - - - 1,055 Restricted - 159,388 118,755 47,038 325,181 Committed - - - 1,135 1,135 Assigned 13,807 - - 3,977 17,784 Unassigned 52,255 - - (261) 51,994 Total fund balances 67,117 159,388 118,755 51,889 397,149 Total liabilities and fund balances$ 71,581 $ 168,563 $ 125,165 $ 113,683

Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds 1,230,515 Receivables from other governments that are not available to pay current-period expenditures and therefore not reported in the funds 359 Internal service funds are used by management to charge costs of equipment management, employee insurance and office services. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net assets 11,503 Assets and liabilities included in governmental activities statement of net assets but not in governmental funds: Internal balances due to elimination of internal service funds 1,769 Deferred lease 15,930 Unamortized bond issue costs 728 Accrued interest payable does not require the use of current resources and therefore is not reported in the governmental funds (3,614) Long-term liabilities are not due and payable in the current period, and therefore, are not reported in the funds The detail of the individual long-term liabilities is as follows: General obligation debt (386,469) Unamortized bond premium (21,389) Compensated absences (27,683) Governmental deferred revenue 1,384 Other post employment benefits liability (6,601) Net pension obligation (2,442) Judgements (8,724) Due to other governments (1,850) Investment in joint venture is not reported in the funds. 15,662 Governmental activities net assets $ 1,216,227

The notes to the financial statements are an integral part of this statement.

3 CITY OF TULSA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS Year ended June 30, 2011 (amounts expressed in thousands)

cmb 10/14/11 SP10/6/11 SJP 10/10/11 Other Total Governmental Governmental General Bond Sales Tax Funds Funds Revenues Sales tax$ 132,912 $ - $ 66,472 $ - $ 199,384 Property tax - - - 44,690 44,690 Franchise tax 22,917 - - 4,308 27,225 Use tax 17,927 - - - 17,927 Hotel/motel tax 114 - - 5,569 5,683 Special assessment tax - - - 3,169 3,169 Charges for services 35,740 - - 178 35,918 Intergovernmental revenues 24,018 - - 18,243 42,261 Fines and forfeitures 10,670 - - 205 10,875 Investment income 3,032 - 2,723 385 6,140 Licenses, permits and fees 5,922 - - - 5,922 Program income from grants - - - 440 440 Payments from component units - - - 57 57 Miscellaneous 1,830 - 227 435 2,492 Total revenues 255,082 - 69,422 77,679 402,183

Expenditures Current: Administration and support 21,533 - - 105 21,638 Public safety and protection 161,799 - - 9,753 171,552 Public works and transportation 29,393 - - 2,164 31,557 Culture and recreation 13,768 - - 617 14,385 Social and economic development 9,074 - - 11,141 20,215 Payments to component units 5,985 - 4,295 74 10,354 Capital outlay - 31,878 42,206 5,596 79,680 Debt service - - - 40,468 40,468 Total expenditures 241,552 31,878 46,501 69,918 389,849

Excess (deficiency) of revenues over (under) expenditures 13,530 (31,878) 22,921 7,761 12,334

Other financing sources (uses) Transfers in 313 - - 3,628 3,941 Transfers out (3,192) (3,348) (2,227) (7,798) (16,565) Sale of capital assets 1,691 - - - 1,691 Bond issuance - 70,000 - - 70,000 Refunding bonds issued - - - 21,546 21,546 Premium on bonds issued - - - 11,143 11,143 Payment to refunded bond escrow agent - - - (21,546) (21,546) Total other financing sources (uses) (1,188) 66,652 (2,227) 6,973 70,210

Net change in fund balances 12,342 34,774 20,694 14,734 82,544 Fund balances, beginning of year, as restated 54,775 124,614 98,061 37,155 314,605 Fund balances, end of year$ 67,117 $ 159,388 $ 118,755 $ 51,889 $ 397,149

The notes to the financial statements are an integral part of this statement.

4 CITY OF TULSA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES Year ended June 30, 2011 (amounts expressed in thousands)

Amounts reported for governmental activities in the statement of activities are different because:

Net change in fund balances--total governmental funds $ 82,544

Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense: Capital outlays 75,089 Capital contributions 6,960 Depreciation expense (31,078) 50,971

The effect of miscellaneous transactions involving capital assets: Loss on disposal of capital assets (5,624) Proceeds from sale of capital assets (1,691) (7,315)

The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of principal of long-term debt consumes current financial resources: Bond issuance (70,000) Premium on bond issuance (11,143) Refunding bonds issued (21,546) Interest expense on refunding (587) Payment to bond escrow 21,546 Payment of bond principal 21,624 (60,106)

Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds: Accrued interest expense 46 Amortization of premium on bond issuance 3,435 Increase in other post employment benefit expense (465) Increase in net pension obligation (1,269) Amortization of bond issue costs (12) Decrease in compensated absences expense 2,657 Increase in liability to other governments (1,297) Decrease in arbitrage rebate expense 64 Decrease in tort claims and judgments expense 2,501 Amortization of deferred lease (368) 5,292

Some revenues reported in the statement of revenues, expenses and changes in net assets do not represent accrual based revenue in the entity-wide statements: Intergovernmental revenue (471)

Some revenues reported in the statement of activities do not provide current financial resources in governmental funds: Earnings from investment in joint venture 1,213

Some revenues deferred in the governmental funds represent accrual based revenue in the entity-wide statements: Intergovernmental revenue 1,384

The net revenue of internal service funds is reported within governmental activities: Change in net assets of internal service funds 932 Internal balances resulting from the elimination of internal service fund revenues 148 1,080

Change in net assets--statement of activities $ 74,592

The notes to the financial statements are an integral part of this statement.

5 CITY OF TULSA GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES- BUDGET AND ACTUAL (BUDGETARY BASIS) Year ended June 30, 2011 (amounts expressed in thousands)

Budgeted Amounts Actual Variance with Original Final Amounts Final Budget Revenues Taxes$ 163,514 $ 168,440 $ 173,566 $ 5,126 Licenses and permits 5,059 5,059 5,922 863 Intergovernmental 8,686 8,709 9,054 345 Charges for service 35,788 35,047 33,648 (1,399) Fines and forfeitures 8,076 8,141 10,805 2,664 Investment income 5,231 5,231 4,452 (779) Miscellaneous 1,295 2,701 3,541 840 Total revenues 227,649 233,328 240,988 7,660

Expenditures Administration and support 21,417 22,919 19,828 3,091 Public works and transportation 26,870 30,811 30,135 676 Social and economic development 8,711 9,689 9,303 386 Public safety and protection 149,828 154,090 150,961 3,129 Culture and recreation 14,446 14,685 14,125 560 Payments to component units 5,775 5,775 5,775 - Total expenditures 227,047 237,969 230,127 7,842 Excess (deficiency) of revenues over expenditures 602 (4,641) 10,861 15,502 Other financing sources (uses) Transfers in 2,375 2,375 2,387 12 Transfers out (5,845) (7,337) (7,337) - Total other financing uses (3,470) (4,962) (4,950) 12 Net change in fund balances (2,868) (9,603) 5,911 15,514 Fund balances, beginning of year (budgetary basis) 35,545 35,545 35,545 - Prior year encumbrances paid in current year 5,759 5,759 5,759 - Fund balances, end of year (budgetary basis)$ 38,436 $ 31,701 47,215 $ 15,514

Fund balance: Reserved for: Body armor 403 Metropolitan Tulsa Transit Authority 201 Imprest cash 113 Repayment of grants 92 Designated for: Working capital 13,674 Unreserved, undesignated 32,732 Fund balance (budgetary basis)$ 47,215

The notes to the financial statements are an integral part of this statement.

6 CITY OF TULSA STATEMENT OF NET ASSETS PROPRIETARY FUNDS June 30, 2011 (amounts expressed in thousands)

rd 12/1/11 kw 1/30/11 kw 11/30/11 KW 11/8/11 Business-type Activities Governmental Enterprise Funds Activities-- One Arena Tulsa Nonmajor - Internal Stormwater Technology Convention Stadium Golf Service Management Center Center Trust Courses Total Funds

ASSETS Current assets: Cash and cash equivalents$ 11,477 $ 2,990 $ 9,361 $ 59 $ 707 $ 24,594 $ 10,687 Receivables, net 2,571 377 1,124 58 - 4,130 133 Advances to other funds - - 758 - - 758 - Prepaid expenses - 154 335 - 40 529 - Inventories, net - - 197 - 57 254 581 14,048 3,521 11,775 117 804 30,265 11,401

Noncurrent assets: Cash and cash equivalents, restricted 5,240 4,032 1,883 - 291 11,446 2,599 Investments - restricted 3 1,251 1,625 - - 2,879 18,568 Receivables, net - 45 18 - - 63 14,202 Advances to other funds ------800 Other 3 1,657 1,673 148 6 3,487 1,669 Nondepreciable capital assets 76,439 3,012 9,036 5,691 1,608 95,786 - Depreciable capital assets, net 226,398 51,916 220,063 43,082 5,681 547,140 7,145 308,083 61,913 234,298 48,921 7,586 660,801 44,983 Total assets 322,131 65,434 246,073 49,038 8,390 691,066 56,384

LIABILITIES Current liabilities: Accounts payable and accrued liabilities 1,900 924 3,002 753 301 6,880 1,284 Current portion of long-term liabilities 572 - 2,065 339 430 3,406 14,905 Unearned revenue - 235 5,090 - - 5,325 1,170 Workers compensation claims ------7,374 Due to other funds - - 185 - - 185 53 2,472 1,159 10,342 1,092 731 15,796 24,786

Noncurrent liabilities: Long-term liabilities 1,635 67,005 18,065 18,052 421 105,178 1,277 Workers compensation claims ------11,805 Unearned revenue - - 1,636 - - 1,636 - Advance from other funds ------7,013 1,635 67,005 19,701 18,052 421 106,814 20,095 Total liabilities 4,107 68,164 30,043 19,144 1,152 122,610 44,881

NET ASSETS (DEFICIT) Invested in capital assets, net of related debt 302,849 (8,620) 210,942 29,666 6,443 541,280 7,145 Restricted for: Debt service - 1,032 1,145 - 291 2,468 - Capital projects 5,243 989 - - - 6,232 - Other purposes - 236 - - - 236 - Unrestricted 9,932 3,633 3,943 228 504 18,240 4,358 Total net assets (deficit) $ 318,024 $ (2,730) $ 216,030 $ 29,894 $ 7,238 568,456$ 11,503 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds (1,769) Net assets of business-type activities $ 566,687

The notes to the financial statements are an integral part of this statement.

7 CITY OF TULSA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS Year ended June 30, 2011 (amounts expressed in thousands)

rd 12/1/11 kw 11/30/11 kw 11/30/11 KW 11/8/11 Business-type Activities Governmental Enterprise Funds Activities-- One Arena Tulsa Nonmajor - Internal Stormwater Technology Convention Stadium Golf Service Management Center Center Trust Courses Total Funds

Operating revenues Charges for services$ 22,611 $ 8,529 $ 12,300 $ 163 $ 2,024 $ 45,627 $ 14,915 Insurance premiums ------20,113 Workers compensation premiums ------5,290 Other 620 31 - - - 651 178 23,231 8,560 12,300 163 2,024 46,278 40,496

Operating expenses Salaries and wages 8,751 479 - - - 9,230 4,010 Materials and supplies 881 71 - - - 952 8,537 Other services and charges 8,718 3,762 11,035 677 2,697 26,889 2,748 Workers compensation claims ------8,650 Depreciation and amortization 7,566 1,924 10,150 1,933 562 22,135 201 25,916 6,236 21,185 2,610 3,259 59,206 45,122

Operating income (loss) (2,685) 2,324 (8,885) (2,447) (1,235) (12,928) (4,626)

Nonoperating revenues (expenses) Investment income 343 91 24 108 (8) 558 156 Interest expense - (3,606) (1,295) (1,158) (51) (6,110) (5) Property taxes ------4,625 Gain (loss) on sale of equipment 53 - - - - 53 (2) Intergovernmental revenue ------30 Contributions - - 41 755 - 796 - Payments from component units ------19 Other, net 13 (42) - - (5) (34) 61 Net nonoperating revenues (expenses) 409 (3,557) (1,230) (295) (64) (4,737) 4,884

Income (loss) before transfers (2,276) (1,233) (10,115) (2,742) (1,299) (17,665) 258

Transfers in 4,311 1,169 4,224 2,015 794 12,513 824 Transfers out (563) - - - - (563) (150) Net transfers 3,748 1,169 4,224 2,015 794 11,950 674

Capital contributions 1,593 - 515 - 415 2,523 -

Change in net assets 3,065 (64) (5,376) (727) (90) (3,192) 932

Net assets (deficit) - beginning, as restated (Note 2) 314,959 (2,666) 221,406 30,621 7,328 10,571 Net assets (deficit) - end of year$ 318,024 $ (2,730) $ 216,030 $ 29,894 $ 7,238 $ 11,503 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds (148) Change in net assets of business-type activities $ (3,340)

The notes to the financial statements are an integral part of this statement.

8 CITY OF TULSA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS Year ended June 30, 2011 (amounts expressed in thousands)

OOB rd 12/1/11 kw 11/30/11 kw 11/30/11 KW 11/8/11 Business-type Activities Governmental Enterprise Funds Activities-- One Arena Tulsa Nonmajor - Internal Stormwater Technology Convention Stadium Golf Service Management Center Center Trust Courses Total Funds

Cash flows from operating activities: Receipts from customers$ 22,871 $ 8,572 $ 10,882 $ 163 $ 2,024 $ 44,512 $ 84,243 Payments to suppliers (7,093) (3,622) (10,713) (698) (2,633) (24,759) (86,133) Payments to employees (8,439) (466) - - - (8,905) (3,876) Other payments (1,678) - - - - (1,678) -

Net cash provided (used) by operating activities 5,661 4,484 169 (535) (609) 9,170 (5,766)

Cash flows from noncapital financing activities: Property taxes received ------4,542 Noncapital gifts and contributions received 13 - 41 3,914 - 3,968 - Payments from interfund activity (563) - 1,136 2,015 794 3,382 682 Proceeds from insurance reimbursements ------61

Net cash provided (used) by financing activities (550) - 1,177 5,929 794 7,350 5,285

Cash flows from capital and related financing activities: Acquisition and construction of capital assets (9,767) (669) (2,115) (5,208) (428) (18,187) (901) Intergovernmental revenue ------30 Principal paid on debt - - (1,940) (5,319) (410) (7,669) - Interest paid on debt - (3,606) (1,316) (1,174) (36) (6,132) - Proceeds from sale of capital assets 108 - - - - 108 13 Proceeds from issuance of debt - - - 3,900 - 3,900 - Payments from financing activities - - - 136 - 136 - Contributions received - - 515 - - 515 19 Transfers in 4,311 1,169 2,747 - - 8,227 -

Net cash used for capital and related financing activities (5,348) (3,106) (2,109) (7,665) (874) (19,102) (839)

Cash flows from investing activities: Interest earned 364 77 64 108 (6) 607 169 Repayments on notes receivable - 285 - - - 285 - Purchase of investments - (2,750) - - - (2,750) - Proceeds from sale or maturities of investments - 1,499 - - - 1,499 -

Net cash provided (used) by investing activities 364 (889) 64 108 (6) (359) 169

Net increase (decrease) in cash and cash equivalents 127 489 (699) (2,163) (695) (2,941) (1,151)

Cash and cash equivalents, beginning 16,590 6,533 11,943 2,222 1,693 38,981 14,437

Cash and cash equivalents, end of year $ 16,717 $ 7,022 $ 11,244 $ 59 $ 998 $ 36,040 $ 13,286

Reconciliation of cash and cash equivalents to the Statement of Net Assets: Cash and cash equivalents 11,477 2,990 9,361 59 707 24,594 10,687 Cash and cash equivalents - restricted 5,240 4,032 1,883 - 291 11,446 2,599

Total cash and cash equivalents$ 16,717 $ 7,022 $ 11,244 $ 59 $ 998 $ 36,040 $ 13,286

Reconciliation of operating income (loss) to net cash provided used by operating activities Operating income (loss) (2,685) 2,324 (8,885) (2,447) (1,235) (12,928) (4,626) Adjustment to reconcile operating income (loss) to net cash provided by (used for) operating activities: Depreciation and amortization 7,566 1,924 10,150 1,933 562 22,135 201 (Increase) decrease in accounts receivable and other assets (350) 166 311 - 6 133 43,880 Increase (decrease) in accounts payable and other liabilities 1,130 70 (1,407) (21) 58 (170) (45,221)

Net cash provided by (used for) operating activities$ 5,661 $ 4,484 $ 169 $ (535) $ (609) $ 9,170 $ (5,766)

NON-CASH TRANSACTIONS: Capital contributions$ 1,593 $ - $ - $ - $ 415 $ 2,008 $ - Captial acquisitions in accounts payable and retainage payable$ - $ - $ (364) $ 13 $ (65) $ (416) $ -

The notes to the financial statements are an integral part of this statement.

9 CITY OF TULSA STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS Year ended June 30, 2011 (amounts expressed in thousands)

CMB 10/6/10 CMB 10/6/10 Municipal Employees Pension Agency Trust Funds

ASSETS Cash and cash equivalents$ 6,630 $ 4,711 Investments: US Government obligations 36,054 - Corporate bonds 14,273 - Preferred stock 236 - Common stock 23,877 - Foreign obligations 2,798 - Mutual funds 274,735 - Timber 196 - Accounts receivable 101 540 Investment income receivable 357 - Total assets 359,257 5,251

LIABILITIES Accounts payable and accrued liabilities 1,195 1,002 Deposits payable - 4,249 Total liabilities 1,195 5,251

NET ASSETS Held in trust for pension benefits 358,062 - Total net assets$ 358,062 $ -

The notes to the financial statements are an integral part of this statement.

10 CITY OF TULSA STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS Year ended June 30, 2011 (amounts expressed in thousands)

CMB 10/6/10 Municipal Employees Pension Trust

ADDITIONS Investment income (loss): Net appreciation in fair value of investments$ 57,642 Interest 2,419 Dividends 1,200 61,261 Less: investment expense (934) Net investment income 60,327

Contributions: Employer 6,744 Plan members 4,287 11,031 Total additions 71,358

DEDUCTIONS Benefits 26,766 Refunds of contributions 884 Administrative expense 303 Total deductions 27,953

Change in net assets 43,405

NET ASSETS Held in trust for pension benefits, beginning of year 314,657

Held in trust for pension benefits, end of year$ 358,062

The notes to the financial statements are an integral part of this statement.

11 CITY OF TULSA STATEMENT OF NET ASSETS DISCRETELY PRESENTED COMPONENT UNITS June 30, 2011 (amounts expressed in thousands)

clb 11/30/11 cmb 10/22/11 cmb 10/22/11 Tulsa Tulsa Metropolitan Authority Other Total Utility for Recovery Tulsa Component Component Authority of Energy Airports Units Units

ASSETS Current assets: Cash and cash equivalents$ 53,654 $ 14,514 $ 15,687 $ 9,009 $ 92,864 Cash and cash equivalents - restricted - - 426 1,349 1,775 Investments - - - 3,832 3,832 Receivables, net 21,749 2,474 7,571 2,153 33,947 Inventories 1,969 - 1,283 292 3,544 Other current assets - - - 366 366 Other current assets - restricted - - 39 167 206 77,372 16,988 25,006 17,168 136,534

Noncurrent assets: Cash and cash equivalents - restricted 10,616 - 26,921 12,001 49,538 Investments - - 2,848 657 3,505 Investments - restricted 105,075 - 21,671 - 126,746 Advances to primary government - restricted 3,157 - - - 3,157 Advances to primary government - - 127 - 127 Receivables, net - - - 3,679 3,679 Receivables, net - restricted 277 - 723 10,326 11,326 Land held for resale, net - restricted - - - 7,926 7,926 Equity interest in joint ventures 11,816 - - - 11,816 Other noncurrent assets 813 - 3,169 1,330 5,312 Nondepreciable capital assets 71,027 - 169,502 13,878 254,407 Depreciable capital assets, net 975,400 3,096 162,638 42,059 1,183,193 1,178,181 3,096 387,599 91,856 1,660,732 Total assets 1,255,553 20,084 412,605 109,024 1,797,266

LIABILITIES Current liabilities: Accounts payable and accrued liabilities 15,932 1,187 8,008 3,437 28,564 Unearned revenue - - 636 587 1,223 Current portion of long-term liabilities 25,279 230 8,511 1,569 35,589 Deposits subject to refund 9,498 - 102 155 9,755 50,709 1,417 17,257 5,748 75,131

Noncurrent liabilities: Advances from primary government - - - 326 326 Unearned revenue and deposits - - - 4 4 Long-term liabilities 371,507 674 150,018 19,703 541,902 371,507 674 150,018 20,033 542,232 Total liabilities 422,216 2,091 167,275 25,781 617,363

NET ASSETS Invested in capital assets, net of related debt 756,859 3,096 185,183 39,495 984,633 Restricted for: Debt service 8,187 - 26,632 1,542 36,361 Capital projects - - 5,986 21,327 27,313 Other purposes - - 51 8,688 8,739 Unrestricted 68,291 14,897 27,478 12,191 122,857 Total net assets $ 833,337 $ 17,993 $ 245,330 $ 83,243 $ 1,179,903

The notes to the financial statements are an integral part of this statement.

12 CITY OF TULSA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS DISCRETELY PRESENTED COMPONENT UNITS Year ended June 30, 2011 (amounts expressed in thousands)

clb 11/30/11 im 9/27/11 cmb 10/22/11 Tulsa Tulsa Metropolitan Authority Other Total Utility for Recovery Tulsa Component Component Authority of Energy Airports Units Units

Operating revenues Water and sewer services$ 154,845 $ - $ - $ - $ 154,845 Fuel sales and commissions - - 790 - 790 Refuse services - 21,657 - - 21,657 Property rentals - - 30,715 571 31,286 Parking revenues - - - 5,798 5,798 Transit services - - - 2,992 2,992 Event revenues - - - 95 95 Other income - - - 1,169 1,169

154,845 21,657 31,505 10,625 218,632

Operating expenses Salaries and wages 44,897 3,609 8,718 9,129 66,353 Materials and supplies 12,090 - 1,124 3,244 16,458 Other services and charges 51,435 17,830 10,613 10,231 90,109 Unrealized loss on land held for resale - - - 894 894 Depreciation 28,887 297 14,418 3,861 47,463 Relocation and improvement - - - 265 265

137,309 21,736 34,873 27,624 221,542

Operating income (loss) 17,536 (79) (3,368) (16,999) (2,910)

Nonoperating revenues (expenses) Investment income 1,729 79 575 491 2,874 Interest expense (8,841) - (10,645) (973) (20,459) Sales taxes - - - 318 318 Property taxes 3,900 - - 813 4,713 Federal and state grant revenues 3,836 - 7,547 10,325 21,708 Contributions - - - 1,281 1,281 Payments from primary government 2,133 50 585 7,172 9,940 Payments to primary government - (19) - (57) (76) Gain (loss) on disposition of capital assets (429) (127) (125) - (681) Other, net - - 486 1,058 1,544

2,328 (17) (1,577) 20,428 21,162 Income (loss) before capital contributions, grants, and charges 19,864 (96) (4,945) 3,429 18,252

Federal and state capital grant revenues - - 14,018 1,551 15,569 Capital contributions to primary government - - - (3,976) (3,976) Capital contributions from primary government - - - 999 999 Capital contributions 2,284 - - - 2,284

2,284 - 14,018 (1,426) 14,876

Change in net assets 22,148 (96) 9,073 2,003 33,128

Net assets - beginning, as restated (Note 2) 811,189 18,089 236,257 81,240 1,146,775 Net assets - end of year$ 833,337 $ 17,993 $ 245,330 $ 83,243 $ 1,179,903

The notes to the financial statements are an integral part of this statement.

13 CITY OF TULSA RECAST OF THE COMBINING STATEMENT OF CHANGES IN NET ASSETS INTO THE STATEMENT OF ACTIVITIES FORMAT DISCRETELY PRESENTED COMPONENT UNITS Year ended June 30, 2011 (amounts expressed in thousands)

Net (Expense) Revenue and Program Revenues Changes in Net Assets Operating Capital Charges for Grants and Grants and Tulsa Functions/Programs Expenses Services Contributions Contributions TMUA TARE Airports Other Total Tulsa Metropolitan Utility Authority$ 146,579 $ 154,845 $ 3,836 $ 2,284 $ 14,386 $ - $ - $ - $ 14,386 Tulsa Authority for Recovery of Energy 21,882 21,657 - - - (225) - - (225) Tulsa Airports 45,643 31,505 7,547 14,018 - - 7,427 - 7,427 Other 32,630 10,625 10,434 3,722 - - - (7,849) (7,849) $ 246,734 $ 218,632 $ 21,817 $ 20,024 14,386 (225) 7,427 (7,849) 13,739

General revenues: 14 Taxes: Sales taxes - - - 318 318 Property taxes 3,900 - - 813 4,713 Payments from City of Tulsa 2,133 50 585 7,172 9,940 Investment earnings 1,729 79 575 491 2,874 Miscellaneous - - 486 1,058 1,544 Total general revenues 7,762 129 1,646 9,852 19,389 Change in net assets 22,148 (96) 9,073 2,003 33,128 Net assets--beginning, restated (Note 2) 811,189 18,089 236,257 81,240 1,146,775 Net assets--end of year$ 833,337 $ 17,993 $ 245,330 $ 83,243 $ 1,179,903

The notes to the financial statements are an integral part of this statement. CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The City of Tulsa, Oklahoma (the “City”), is an Tulsa Authority for Recovery of Energy (“TARE”) - A Oklahoma municipal corporation governed by an elected public trust created to provide a system of collection, mayor and nine-member council. transportation and disposal of solid waste. Trustees for TARE are appointed by the Mayor and approved by the The financial statements of the City are prepared in City Council. The City participates in management accordance with Generally Accepted Accounting decisions and acts as a collection agent by collecting Principles in the United States of America (“GAAP”) as TARE revenues as part of the City’s utility bill. The City promulgated by the Governmental Accounting provides staffing to, and maintains the accounting records Standards Board (“GASB”), the standard-setting body of TARE. for governmental accounting and financial reporting. Tulsa Airports - Tulsa Airports Improvement Trust (“TAIT”) A. REPORTING ENTITY and Tulsa Airports Authority (“TAA”) operate and maintain the City’s two airports, Tulsa International and Richard L. The accompanying financial statements present the Jones, Jr. Airports, and finance capital improvements. government and its component units, entities for which The Tulsa International and Richard L. Jones, Jr. Airports the City is considered to be financially accountable. A have been combined with TAIT and are included in the blended component unit, although a legally separate Airports fund. The purpose of TAIT is to fund airport entity, is, in substance, part of the City’s operations and improvements through the issuance of revenue bonds. so data from the blended component unit is combined All improvements are leased by TAIT to TAA and become with data of the City, the primary government,. A the property of the City upon termination of the lease. discretely presented component unit, on the other hand, The City is also designated as the sole beneficiary of the is reported in a separate column in the combined trust. TAIT and TAA trustees are appointed by the Mayor financial statements to emphasize that it is legally and approved by the City Council. separate from the City. Tulsa Development Authority (“TDA”) - A public authority 1. Blended Component Unit created to finance urban renewal rehabilitation and redevelopment. Commissioners of TDA are appointed by The Tulsa Public Facilities Authority (“TPFA”) - Trustees the Mayor and approved by the City Council. The City of TPFA are appointed by the Mayor and approved by approves urban renewal plans and the City must approve the City Council. Although it is legally separate from the all modifications to the plan. The City provides staffing City, TPFA is reported as if it were part of the primary to, and maintains the accounting records of TDA. government because its primary purposes are to issue revenue bonds to finance major capital improvements Metropolitan Tulsa Transit Authority (“MTTA”) - A public and manage certain properties on behalf of the City. trust created to provide public transportation systems and Financing activities of this fund are included as an facilities. The Mayor appoints trustees of MTTA. The City internal service fund and enterprise activities are is the sole beneficiary and finances a significant portion of included as enterprise funds. annual operations and MTTA cannot incur indebtedness in excess of $100 within a year without the City’s Tulsa Stadium Trust (“TST”) – A public trust created to approval. acquire, construct, own, operate and maintain a baseball stadium in downtown Tulsa and related amenities and Tulsa Industrial Authority (“TIA”) - A public trust created to facilities, and to incur indebtedness. Debt issuance provide for the issuance of industrial development bonds requires the approval of two-thirds of the Tulsa City upon approval by the City Council, and to lend the Council. The City is the sole beneficiary of the TST. The proceeds of such issuance to third party organizations. Mayor of the City is ex-officio trustee and eight additional The bonds do not constitute debt of the City and are trustees are appointed by the Mayor and approved by the collateralized solely by the revenues of the borrowing City Council. The City is obligated for the debt of TST organizations upon whose behalf the bonds are issued. through the collection of special assessments. The The Mayor of the City is ex-officio trustee and seven activity of TST is reported as a major enterprise fund. additional trustees are appointed by the Mayor and approved by the City Council. 2. Discretely Presented Component Units Tulsa Parking Authority (“TPA”) - A public trust created by Tulsa Metropolitan Utility Authority (“TMUA”) - A public the City to construct and manage various parking facilities trust created to provide for water delivery utility systems within the City. Trustees of TPA consist of the Mayor and and a wastewater utility. Trustees of TMUA are the same four trustees who are appointed by the Mayor. The City as those on the City’s Utility Board. The City is the sole provides certain resources to TPA. The City is the sole beneficiary of the trust and will receive all trust properties beneficiary of TPA and will receive the remaining assets and resulting revenues upon retirement of all trust of TPA upon termination. The City provides staffing to, indebtedness. The rates for user charges and bond and maintains the accounting records of TPA. issuance authorization are also approved by the City Council. The City provides staffing to, and maintains the Tulsa Performing Arts Center Trust (“TPACT”) - A public accounting records of TMUA. trust created to assist the City in operating the Tulsa Performing Arts Center and to sponsor events promoting the use of the Tulsa Performing Arts Center. Trustees are

15 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES appointed by the Mayor and approved by the City Council. Oklahoma, to operate a sewage treatment facility. The The City is the sole beneficiary of the Trust. Authority (“RMUA”), a trust, was created for that purpose. The City contributes one-half of the Authority’s annual Separate financial statements for the individual operating and capital budget and operates a facility for component units are available upon request to the Office RMUA and leases the facility site to the Authority. The of the Controller, 175 East 2nd Street, Suite 885, Tulsa, City appoints two of the ten Trustees. The remaining OK 74103. Trustees are appointed two each by the four other participating cities. Services are provided approximately Governmental accounting standards require reasonable 50% each to the City and the City of Broken Arrow. Upon separation between the primary government (including termination of the trust, the net assets will be distributed to its blended component units) and its discretely the beneficiaries based upon their pro rata interest. The presented component units, both in the financial City’s equity interest of $11,816 is reported in TMUA’s statements and in the related notes and required statement of net assets. Complete financial statements for supplementary information. RMUA can be obtained from the Office of the Controller, City of Tulsa, 175 East 2nd Street, Suite 885, Tulsa, OK Because the discretely presented component units, 74103. although legally separate, have been and are operated as if each is part of the primary government, there are limited 2. Related Organizations instances where special note reference or separation will be required. If no separate note reference or The City’s officials are also responsible for appointing the categorization is made, the user should assume that board members of other organizations; however, the information presented is equally applicable. City’s accountability for those organizations does not extend beyond the making of appointments. B. JOINT VENTURES AND RELATED ORGANIZATIONS The following organizations are related organizations that are excluded from the reporting entity: 1. Joint Ventures Tulsa Housing Authority (“THA”) - Commissioners of the Authority are appointed by the Mayor, however, the City A joint venture is a legal entity or other organization that does not provide funding, has no obligation for the debt results from a contractual agreement and that is owned, issued by THA and cannot impose its will. operated, or governed by two or more participants as a separate and specific activity subject to joint control in City of Tulsa/Rogers County Port Authority (“TRCPA”) - which the participants retain (a) an ongoing financial The City appoints six of the nine Board members of interest or (b) an ongoing financial responsibility. TRCPA. The City does not provide any funding to TRCPA. The City participates in the following joint ventures: Tulsa City-County Health Department (“TCCHD”) - The Emergency Medical Services Authority (“EMSA”) - EMSA City appoints five of the nine TCCHD Board members. is a public trust created to provide emergency medical The City does not provide any funding to the TCCHD. care and transportation and is governed by a ten-member board composed of five appointees from the City and five Tulsa City-County Library (“TCCL”) - The Tulsa City- from other Oklahoma cities and towns. In accordance County Library Board is composed of eleven members, of with the joint venture agreement, Tulsa and Oklahoma which the City appoints six. The City does not provide City are entitled to their respective share of annual any funding to the TCCL. operating income or loss. The City’s equity interest in EMSA is $15,662. Complete financial statements for Tulsa Municipal Airport Trust ("TMAT") - The Mayor of EMSA can be obtained from EMSA’s Chief Financial the City is ex-officio trustee and the additional four Officer, 1417 North Lansing, Tulsa, Oklahoma 74106. trustees are approved by the City Council. The City does not provide any funding to TMAT and has no obligation River Parks Authority (“RPA”) – The City is a participant for the debt issued by TMAT. with Tulsa County in a joint venture to operate and maintain a park along the Arkansas River. RPA, a trust, OSU Medical Center Trust (“OSUMCT”) – The Mayor of was created for that purpose. The City and Tulsa County the City is ex-officio trustee and the additional eight contribute to the annual operating budget of RPA. The trustees are approved by the City Council. The City does Board of Trustees comprises seven members, three not provide any funding to OSUMCT and has no appointed by the City, three appointed by the County, and obligation for the debt issued by OSUMCT. one by the Tulsa Metropolitan Area Planning Commission. Complete financial statements for RPA can 3. Jointly Governed Organizations be obtained from the Executive Director, 717 S. Houston, Suite 10, Tulsa, Oklahoma 74127. The City does not The following organizations are jointly governed have an equity interest in this organization. organizations that are excluded from the City’s reporting entity. These organizations are not a joint venture Regional Metropolitan Utility Authority (“RMUA”) – The because the City does not retain an on-going financial City is a participant with the City of Broken Arrow, interest or an on-going financial responsibility.

16 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The City, in conjunction with Tulsa County and other financial position resulting from the activities of the fiscal municipalities, has created the following organizations: period.

Tulsa County Criminal Justice Authority (“TCCJA”) --The Non-current assets and liabilities are reported in the TCCJA was created for the purpose of acquiring a site governmental activities column in the government-wide and erecting, furnishing, equipping, operating, statement of net assets and are not reflected in the maintaining, remodeling and repairing a county jail and governmental funds balance sheet. other detention facilities owned or operated by Tulsa County. TCCJA is administered by a seven person Board In the fund financial statements the emphasis is on the of Trustees comprising three Tulsa County major funds in either the governmental or business-type Commissioners, the Mayor of the City of Tulsa (“ex- officio categories. Nonmajor funds (by category) or fund type trustees”), and the Mayors of three additional cities are summarized into a single column. situated in whole or in part within the limits of Tulsa County. The City does not provide any funding to the The enterprise fund statements will match the business- TCCJA. type activity column presented in the government-wide statements. Tulsa County Vision 2025 Authority (“TCVA”) – The TCVA was created for the purpose of determining the use of The governmental funds financial statements are County sales tax receipts in excess of capital presented on a current financial resource and modified improvements costs generally known as Vision 2025 accrual basis of accounting. projects throughout Tulsa County. TCVA is administered This presentation is deemed most appropriate to (a) by a seven person Board of Trustees composed of three demonstrate legal and covenant compliance, (b) Tulsa County Commissioners, the Mayor of the City of demonstrate the source and use of liquid resources, and Tulsa (“ex-officio trustees”), and the Mayors of three (c) demonstrate how the City’s actual experience additional cities situated in whole or in part within the conforms to the budget or fiscal plan. Since the limits of Tulsa County. The City does not provide any governmental fund statements are presented on a funding to the TCVA. different measurement focus and basis of accounting than the government-wide statements’ governmental column, a C. GOVERNMENT-WIDE AND FUND FINANCIAL reconciliation is presented either on the fund statement or STATEMENTS on the page following each statement which briefly explains the adjustments necessary to transform the fund- Government-wide and fund financial statements based financial statements into the governmental column categorize activities as either governmental activities or of the government-wide presentation. business-type activities. In the government-wide statement of net assets, both the governmental and Internal service funds of a government (which traditionally business-type activities columns (a) are presented on a provide services primarily to other funds of the consolidated basis by column, and (b) are reflected, on a government) are presented in the summary form as part full accrual, economic resource basis, which incorporates of the proprietary fund financial statements. Since the long-term assets and receivables as well as long-term principal users of the internal services are the City’s debt and obligations. governmental activities, financial statements of internal service funds are consolidated into the governmental The government-wide statement of activities reflects both column when presented at the government-wide level. To the gross and net cost per functional category (public the extent possible, the costs of these services are safety, public works, etc.), which are otherwise being reflected in the appropriate functional activity (public supported by general government revenues (property safety, public works, etc.). taxes, sales and use taxes, certain intergovernmental revenues, etc.). The statement of activities reduces gross The City’s fiduciary funds are presented in the fund expenses (including depreciation) by related program financial statements by type (pension and agency). Since revenues and operating and capital grants. by definition these assets are being held for the benefit of a third party (other local governments, private parties, The program revenues must be directly associated with pension participants, etc.) and cannot be used to address the function or a business-type activity. Program activities or obligations of the government, these funds revenues include revenues from fines and forfeitures, are not incorporated into the government-wide licenses and permits fees, special assessment taxes, and statements. charges for services. The operating grants include operating-specific and discretionary (either operating or D. BASIS OF PRESENTATION capital) grants while the capital grants column reflects capital-specific grants. The net costs (by function or The financial transactions of the City are recorded in business-type activity) are normally covered by general individual funds. The various funds are reported by revenue (sales taxes, franchise taxes, property taxes, generic classification within the financial statements. intergovernmental revenues, interest income, etc.). Major funds are determined by criteria - percentage of the This government-wide focus is more on the sustainability assets, liabilities, revenues or expenditures/expenses of of the City as an entity and the change in aggregate either fund category or the governmental and enterprise

17 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES combined, or in the case of component units, the total of maintain a baseball stadium in downtown Tulsa and the above plus component units. The nonmajor funds related amenities and facilities, and to incur are combined in a single column in the fund financial indebtedness. statements. 3. Internal Service Funds – accounts for employee Proprietary funds distinguish operating revenues and health benefits, risk management services, vehicle and expenses from non-operating items. Operating revenues equipment services, print services and financing. and expenses generally result from providing services and producing and delivering goods in connection with a Employee Insurance Fund accounts for the collection proprietary fund’s principal on-going activity. and payment of health, dental, life and long term disability insurance premiums and workers’ Operating expenses include cost of sales and service, compensation medical claims, judgments and administrative expenses, and depreciation on capital administrative expenses. assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and Equipment Management Fund accounts for the expenses. maintenance and repair of licensed motor vehicles and their related costs to other departments. 1. Governmental Funds – The City reports the following major governmental funds: Office Services Fund accounts for office supplies and reproduction services and their related costs charged General Fund is the general operating fund of the City. to user departments. It is used to account for all financial resources except those required to be accounted for in another fund. Tulsa Public Facilities Authority issues debt, the proceeds of which are loaned to the City or to one of Bond Fund accounts for capital improvements that are its component units. financed by the City’s general obligation bond issues, 4. Fiduciary Funds – The pension trust fund accounts for excluding those accounted for in proprietary funds. the general municipal employees’ retirement trust. The (Capital projects fund) agency fund accounts for monies held on behalf of others. Sales Tax Fund accounts for those capital improvements that are financed by a one-cent sales Municipal Employees Pension Trust (MERP) is used tax. (Capital projects fund) to report resources that are held in trust for the members and beneficiaries of Municipal Employees 2. Proprietary Funds – are accounted for on the flow of Pension Fund, a cost-sharing multiple-employer economic resources measurement focus and use the defined benefit retirement plan. accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at Agency funds are used to report resources held by the time liabilities are incurred. The City reports the the City in a purely custodial capacity (assets equal following proprietary funds: liabilities) and include EMSA Utility Fee, Municipal Court Bonds, Escrow Fund, Police Property Room, Enterprise Funds are used to report activities for which Watermain Extension Contract Escrow, Payroll a fee is charged to external users for goods and Withholdings, Unclaimed Property and PAC Ticket services. In the entity-wide financial statements, these Office Escrow. enterprise funds are combined into a single, aggregated presentation as business-type activities. E. BASIS OF ACCOUNTING The City reports the following major enterprise funds: Basis of accounting refers to the point at which revenues Stormwater Management Fund accounts for a special or expenditures/expenses are recognized in the accounts stormwater utility fee and other revenue dedicated to and reported in the financial statements. It relates to the improving the City’s stormwater drainage system. timing of the measurements made, regardless of the measurement focus applied. One Technology Center Fund, a blended TPFA fund, accounts for the operation of the One Technology The government-wide financial statements and the Center, a 15 story building in downtown Tulsa. The proprietary, fiduciary and component unit fund financial building is occupied by the City of Tulsa and other statements are presented on an accrual basis of commercial tenants. accounting. The governmental funds in the fund financial statements are presented on a modified accrual basis. Arena and Convention Centers Fund, a blended TPFA fund, accounts for the operation of the Arena and Accrual – Revenues are recognized when earned and Convention Center; both are sports and entertainment expenses are recognized when incurred. facilities in downtown Tulsa. Modified Accrual – All governmental funds are accounted Tulsa Stadium Trust – a blended component unit, for using the modified accrual basis of accounting. created to acquire, construct, own, operate and Under the modified accrual basis of accounting,

18 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES revenues are recorded when susceptible to accrual; i.e., A “Pooled Cash” concept is therefore used in maintaining both measurable and available. “Measurable” means the the cash and investment accounts in the accounting amount of the transaction can be determined. records. Under this method, all cash is pooled for "Available" means collectible within the current period or investment purposes and each fund has equity in the soon enough thereafter to be used to pay liabilities of pooled amount. All amounts included in the pooled cash the current period. and investment accounts are considered to be cash and cash equivalents. The City defined the length of time used for “available” for purposes of revenue recognition in the governmental For purposes of the statement of cash flows, the City fund financial statements to be 60 days. considers cash and cash equivalents (including restricted cash and cash equivalents) to be currency on hand, Expenditures are generally recognized under the demand deposits with banks, amounts included in pooled modified accrual basis of accounting when the related cash and investment accounts and liquid investments liability is incurred. The exception to this general rule is held outside the pooled fund with a maturity of three that principal and interest on general obligation long- months or less when purchased. term debt, if any, is recognized when due. 2. Investments In applying the “susceptible to accrual” concept to Investments are stated at fair value in the statement of intergovernmental revenues pursuant to GASB No. 33, net assets. Securities traded on a national or “Accounting and Financial Reporting for Non-exchange international exchange are valued at the last reported Transactions” the provider should recognize liabilities sales price, at current exchange rates. A net change in and expenses and the recipient should recognize fair value of investments is recognized and reported as a receivables and revenue when the applicable eligibility change in investment income in the financial statements requirements, including time requirements, are met. for the year ended. Resources transmitted before the eligibility requirements are met should, under most circumstances, be reported The amount of the increase for the year is as follows: as advances by the provider and as unearned revenue by the recipient. Governmental activities$ (578) Business-type activities 33 F. BASIS OF BUDGETING Component units 326 Net increase in fair value$ (219) Budget Policy – City Charter and the Oklahoma Municipal Budget Act (Act) require the Mayor to prepare and submit an annual budget to the City 3. Accounts Receivable and Taxes Receivable Council. A budget is prepared for the General Fund and all Special Revenue Funds, exclusive of most Accounts receivable and taxes receivable are shown net Federal and State Grant Funds and the Special of an allowance for uncollectible accounts. Development Fund. These budgets are prepared on a cash basis plus due from other funds for revenues The allowance for general government accounts and transfers, and an accrual basis plus receivable is derived from the age of the individual encumbrances for expenditures. The appropriations receivable with age categories ranging from 30 days past for these funds cannot exceed the estimated due to three years past due. Uncollectible percentages revenues, including investment income, and fund by revenue category are derived using historical write-off balance. It is unlawful for the City to create or experience and range from 1% to 33%. authorize creation of a deficit in any fund that is subject to the Act. The allowance for utility services accounts receivable reported in the component units and enterprise funds is Budgetary Data – During the year, several derived from the age of the individual receivable. An supplemental appropriations were necessary. All allowance is established at one-half of the active accounts budget amounts presented in the accompanying over 90 days from date of billing plus 100% of the closed supplementary information reflect the original budget accounts over 90 days from date of billing. and the amended budget (which have been adjusted for legally authorized revisions to the annual budgets 4. Inventories during the year). Appropriations, except remaining project appropriations, encumbrances, and Parts and supplies inventories - are stated at cost unexpended grant appropriations, lapse at the end of (specific identification or first-in, first-out basis), which is each fiscal year. not in excess of market. Inventories consist primarily of materials and supplies held for consumption. The cost is G. ASSETS, LIABILITIES AND NET ASSETS recorded as an expense at the time individual inventory items are used. 1. Cash and Cash Equivalents The City Charter requires all cash belonging to the City to Land held for resale - Land acquired for rehabilitation and be placed in the custody of the City Treasurer. held for resale by TDA is recorded at the lower of cost or fair value (specific identification basis). The cost of land

19 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES acquired and held for resale at year end amounted to The City owns a collection of art housed in the Gilcrease $8,267 and was carried at the lower of cost or fair value of Museum. The collection is not capitalized because it $7,926. meets all the following conditions:

5. Internal Balances y The collection is held for reasons other than financial gain. Amounts reported in the fund financial statements as y The collection is protected, kept unencumbered, interfund receivables and payables are eliminated in the cared for, and preserved. entity-wide governmental and business-type activities y The collection is subject to an organizational policy columns of the statement of net assets, except for the requiring that the proceeds from sales of collection net residual amounts due between governmental and items be used to acquire other items for collections. business-type activities, which are presented as internal balances. Within the governmental fund financial Interest is capitalized in proprietary funds and discretely statements, advances to other funds are equally offset presented component units on assets acquired with tax- by a fund balance reserve that indicates they do not exempt debt. The amount of interest capitalized is the net constitute available spendable resources. interest expense incurred (interest expense less interest income) from the date of the borrowing until the project is Due To/Due From – Amounts which are due within one placed into service. year and owed to one fund or component unit by another are reported as due to other funds or component units. 8. Privately Funded Public Improvements Advances To/From Other Funds – Amounts which are not due within one year and owed to one fund or Watermain Extension Contracts - TMUA contracts with component unit by another are reported as advances various developers for the construction of watermains to to/from other funds or component units. provide water service to areas under development.

6. Deferred Lease Upon completion, the new watermains become an extension of the City’s existing water distribution system. The City is a party to an agreement with the The contract with the developers provides that the Oklahoma Board of Regents whereby the City leases developer initially pay for all construction costs. from the Oklahoma Board of Regents office and Repayments to the developers are generally limited to laboratory facilities for a term of 50 years. The lease 40% or 60% of the collected revenues generated by the terms call for the City to pay a proportionate share of respective watermain extension, not to exceed the total the design and construction costs of the facility and, in cost as defined in the contract. turn, the City has the right to use the facilities until the expiration of the lease on June 30, 2058. The lease The contracts are payable over a ten-year period, and costs are amortized over the life of the lease. The are non-interest bearing. TMUA has no liability after the lease with a value of $15,930, net of amortization, is ten-year period if the respective revenues generated are reflected in other assets on the Government-wide insufficient to cover the developers’ costs. Historically, Statement of Net Assets. revenues generated within the ten-year period are sufficient to permit recovery of the total costs incurred 7. Capital Assets for the respective watermain extensions.

Capital assets purchased or acquired are carried at The liability for watermain extension contracts is $7,071 historical cost or estimated historical cost. Contributed as of year end. Annual payments of $529 are due in assets are recorded at fair value as of the date donated. accordance with these contracts. Additions, improvements and other capital outlays that significantly extend the useful life of an asset are Sewer Line Extensions - Private and non-assessed sewer capitalized whereas costs incurred for repairs and line extensions contributed to TMUA totaled $1,377 maintenance are expensed as incurred. during the year.

Depreciation or amortization of capital assets is calculated 9. Interest Capitalization using the straight-line basis over the following estimated useful lives. Component units capitalized net interest cost in the Estimated amount of $4,423 related to tax exempt financing for Service Capitalization capital construction projects during the year. Component Life Threshold units incurred interest costs of $27,197 during the year. Buildings 20-50 years $ 5 Land Improvements 20-30 years 5 Enterprise funds capitalized net interest cost in the Equipment 2-50 years 5 amount of $139 related to tax exempt financing for capital Water and sewer Lines 33-100 years 5 construction projects during the year. Enterprise funds Intangible assets Indefinite 5 incurred interest costs of $6,249. Streets 25 years 100 Bridges 50 years 100

20 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

10. Restricted Assets x Committed – includes fund balance amounts that are constrained for specific purposes that are Certain debt proceeds as well as certain resources set internally imposed by the government through aside for their repayment, are classified as restricted formal action of the highest level of decision assets on the statements of net assets because their use making authority and does not lapse at year-end. is limited by applicable bond covenants and they are maintained in separate bank accounts. x Assigned – includes fund balance amounts that are intended to be used for specific purposes that 11. Bond Premiums, Discounts and Issuance Costs are neither considered restricted or committed. Fund Balance may be assigned by the Mayor. In the governmental funds, bond premiums, discounts and issuance costs are treated as period costs in the year x Unassigned – includes positive fund balance of issuance. Bond issuance costs are reported as within the General Fund which has not been expenditures in governmental funds. classified within the above mentioned categories and negative fund balances in other In proprietary funds, bond premiums and discounts are governmental funds. deferred and amortized over the term of the bonds using the effective interest method. Bond premiums and Spending Policy of the General Fund - The City discounts are presented as additions and reductions of receives inflows from revenue and other financing the face amount of the revenue bonds payable whereas sources from numerous sources for use in the General issuance costs are recorded as other assets. Bond Fund. The Fund will expend those resources on issuance costs are amortized on the straight-line method multiple purposes of the local government. The over the term of the bond. intention of this spending policy is to identify the expenditure order of resource categories for the As part of the reconciliation and presentation at the General Fund. When both restricted and unrestricted government-wide level these costs in the governmental resources are available in the General Fund, the funds are adjusted and reflected similarly to proprietary following spending policy will apply; funds. x 1st Restricted 12. Encumbrances – Budgetary Statements x 2nd Committed x 3rd Assigned Encumbrance accounting, under which purchase orders, x 4th Unassigned contracts and other commitments for the expenditure of monies are recorded in order to reserve that portion of The Mayor has the authority to express assignments in the applicable appropriation, is employed as an the General Fund. extension of formal budgetary integration in the funds. Other commitments include encumbrances that have Spending Policy of Other Governmental Funds – The been established for future planned expenditures where City receives inflows from revenue and other financing the purpose is known but a specific contract with a sources from various sources for use in Special vendor has not yet been finalized. Revenue Funds. Special Revenue Funds will expend those resources on the specific purpose of the fund. 13. Fund Balances The intention of this spending policy is to identify the expenditure order of resource categories for all Special Fund balances for governmental funds are reported in Revenue Funds. When both restricted and unrestricted classifications that comprise a hierarchy based primarily resources are available in a Special Revenue Fund, the on the extent to which the City is bound to honor following spending policy will apply; constraints on the specific purposes for which amounts in those funds can be spent. The categories and their x 1st Restricted purposes are: x 2nd Committed x 3rd Assigned x Nonspendable – includes fund balance amounts that cannot be spent either because it is not in The Mayor has the authority to express assignments in spendable form or because of legal or contractual Special Revenue Funds. constraints. Minimum Fund Balance Policy – The City has adopted a x Restricted – includes fund balance amounts that minimum fund balance policy for the General Fund, where are constrained for specific purposes which are by an operating reserve is set and maintained at 6% of externally imposed by providers, such as General Fund revenues. This operating reserve is creditors or amounts constrained due to contained in the City’s annual budget proposed by the constitutional provisions or enabling legislation. Mayor and adopted by the City Council.

21 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

14. Net Assets estimated tax collections) by the 20th of the following month. In the government-wide and proprietary fund financial statements, equity is displayed in three components as Sales tax revenue is recognized in the period when the follows: underlying exchange transaction occurs and the resources are available. x Invested in Capital Assets, Net of Related Debt – This 2. Property Tax Revenue consists of capital assets, net of accumulated depreciation, less the outstanding balances of any Oklahoma statutes require that the City make a property bonds, notes, or other borrowings that are tax levy for a sinking fund (Debt Service Fund) which attributable to the acquisition, construction, or shall, with cash and investments in the fund, be sufficient improvement of those assets. to pay all the bonded indebtedness, interest and one-third of all outstanding judgments coming due in the following x Restricted – This consists of net assets that are fiscal year. legally restricted by outside parties or by law through constitutional provisions or enabling legislation. After review and approval by the City, the sinking fund $122,732 in net assets are restricted by enabling estimates are submitted to the County Excise Board to legislation. When both restricted and unrestricted determine the property tax levy. This submission is made resources are available for use, it is generally the by July 20th of each year. The County Assessor is City’s policy to use restricted resources first, then required to file a tax roll report on or before October 1st unrestricted resources as they are needed. each year with the County Treasurer indicating the net assessed valuation for all real and public service property. x Unrestricted – This consists of net assets that do not meet the definition of “restricted” or “invested in The Oklahoma Tax Commission determines property capital assets, net of related debt”. assessed valuations. The assessment ratio in Tulsa County currently averages 11% of market value.

H. REVENUES, EXPENSES AND EXPENDITURES Property tax is levied each October 1st on the assessed valuation of non-exempt real property located in the City Identification of Major Revenue Sources Susceptible to as of the preceding January 1st, the lien date. Property Accrual taxes are due on November 1st following the levy date, although they may be paid in two equal installments (if the In the Governmental Funds, property taxes, sales taxes, first installment is paid prior to January 1st, the second franchise taxes, licenses, intergovernmental grants, and installment is not delinquent until April 1st). Property taxes interest associated with the current fiscal period are all are collected by the County Treasurers of Tulsa, Wagoner considered to be susceptible to accrual and so have been and Osage Counties, Oklahoma, and are remitted to the recognized as revenues of the current fiscal period. All City. Property tax receivables are recorded on the lien other revenue items are considered to be measurable and date, although the related revenue is deferred and will not available only when the government receives cash. be recognized as revenue until the year for which it is levied. Expenditures are recognized when the related fund liability is incurred except for the following, which are 3. Arena Revenues – Naming Rights, Club Sales permitted by generally accepted accounting principles. Revenues derived from naming rights and club sales are General obligation long-term debt principal and interest, recognized over the life of the agreement, generally 3 to judgments, compensated absences, pension and other 20 years. Unearned revenue is recorded for amounts benefits, and other long-term liabilities are reported only received to the extent they exceed amounts earned. when due. Naming rights revenue of $550 has been recognized in the current year. 1. Sales Tax Revenue 4. Grant Revenue The City has a 3% sales tax levy that is collected monthly by the State of Oklahoma and remitted to the City. Two- The City, a recipient of grant revenues, recognizes thirds of the tax revenue is recorded in the General Fund. revenues (net of estimated uncollectible amounts, if any), One-third of the tax revenue is recorded in the Sales Tax when all applicable eligibility requirements are met. Fund and is restricted for capital improvements. The tax Resources transmitted to the City before the eligibility is collected by the merchants and remitted to the State. requirements are met are reported as unearned The City receives its tax receipts from the State by the revenues. 10th of each month. Vendors owing an average of $2.5 or more per month to the State are required to remit Some grants and contributions consist of capital assets or actual taxes collected plus an estimate of tax collections resources that are restricted for capital purposes – to for the first 15 days of the following month with remittance purchase, construct, or renovate capital assets associated due by the 20th of that same month. All other vendors are with a specific program. These are reported separately required to remit the actual amount collected (without any from grants and contributions that may be used either for

22 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES operating expenses or for capital expenditures of the external transactions—that is, as revenues and expenses. program at the discretion of the City. Resource flows between the primary government and blended component units are classified as internal activity 5. Commercial Lease Revenue in the financial statements.

In September 2007, the TPFA acquired a building in Payments to component units are primarily subsidized downtown Tulsa known as the One Technology Center. funding for capital construction projects financed with The building containing approximately 626,000 square sales tax revenues for the benefit of the component feet has been used to consolidate City operations units. In addition, included in payments to component previously located in several locations in or near the units, is the City subsidy to MTTA for bus and other central business district in downtown Tulsa. transportation services.

In addition to acquiring the building, the TPFA assumed 10. Compensated Absences existing commercial leases to various tenants occupying approximately 183,000 square feet. The leases are Vacation and sick leave is granted to all regular and comprised of both cancelable and noncancelable leases part-time employees. The annual amount of vacation for periods up to ten years. Annual revenue from these time accrued varies from 14 to 26 days depending upon leases averages approximately $3,800 through 2018. years of service. The maximum amount of vacation time that may be accumulated is twice the amount that may 6. Investment Income be earned in one calendar year.

Investment income from pooled cash and investments is Accumulated vacation leave vests, and the City is allocated monthly based on the percentage of a fund’s obligated to make payment if the employee terminates. average daily equity in pooled cash and investments to The liability for compensated absences attributable to the total average daily pooled equity in pooled cash and the City’s governmental funds is recorded in the entity- investments. Investment earnings and losses from the wide statements. The amount attributable to the special revenue, agency, debt service, and bond funds business-type activities is charged to expense with a are reported as investment earnings of the general fund. corresponding liability established in the entity-wide statements as well as the applicable business-type 7. Unearned / Deferred Revenue funds. Unearned revenue represents payments and/or revenue Sick leave accrues at rates based on the classification of received but not yet recognized since it has not been employee and years of service. Sick leave for members earned. At the government-wide level, unearned revenue of the City’s Labor and Trade union, Tulsa Police is primarily composed of money received from Federal Department, and the Tulsa Fire Department is based and/or State grants in advance of services to be provided upon the current labor contract. For nonunion and property tax receivables that will be recognized as employees, sick leave accrues in accordance with the revenue in the subsequent year. At the fund level, City’s personnel policy guideline. Vested sick leave is unearned revenue is primarily composed of deferred payable upon retirement, disability, or death based on property taxes and money received from Federal and/or the employee’s classification, as follows: State grants in advance of services to be provided or • Labor and Trade union members whose service is receivables that are not available to pay current-period terminated for reason of retirement, disability, or expenditures. death are paid for one-half of accrued sick leave in excess of 29 days. 8. Interfund Transactions • Police Officers may convert sick leave over 120 Interfund transactions are loans, services provided, days to vacation leave. Upon retirement or death, reimbursements or transfers. Loans are reported as those with at least 20 years service shall receive receivables and payables as appropriate and are subject payment for one-half accrued sick leave up to a to elimination upon consolidation. Services, deemed to be maximum of 60 days. reasonably equivalent in value, are treated as revenues and expenditures/expenses. Reimbursements are when • Firefighters are paid, upon retirement or death, sick one fund incurs a cost, charges the appropriate benefiting leave accrued in excess of 55 24-hour shifts or fund and reduces its related cost as a reimbursement. All 161.7 8-hour shifts. other interfund transactions are presented as transfers. • All other City employees may convert any sick leave Transfers within governmental activities or within in excess of 120 days to vacation leave. Upon business-type activities are eliminated upon consolidation retirement or death, the employee is eligible to in the government-wide statements. receive payment for one-third of the 120 days. 9. Payments between the City and Component Units 11. Other Post-Employment Benefits The City of Tulsa offers a post-employment health Resource flows (except those that affect the statement of insurance benefit whereby the City provides a subsidy for net assets/balance sheet only, such as loans and the cost of health care insurance for those retirees repayments) between a primary government and its remaining with the City's group health plan. The post- discretely presented component units are reported as

23 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES employment benefits are not a part of a qualified plan and than the debt service fund to pay the judgment creditor are on a pay as you go basis. in full and effectively acquire in exchange, the judgment creditor’s rights to the future cash flows and interest 12. Operating Subsidies, Grants and Impact Fees earnings on those cash flows. Subsidies and grants to proprietary funds, which finance either capital or current operations, are recorded as non- Under state statutes, three conditions must be met operating revenue. related to the judgments for the City to invest in its judgments: The City’s wastewater treatment policy requires restriction of all monies collected as impact fees. These 1. A judgment is rendered fees represent a capacity charge for the proportionate 2. By a court of record and share of the cost of expanding, over-sizing, separating 3. The judgment is against the City or constructing new additions to the wastewater system. Under the City’s investment policy, the City uses The City is obligated to expend these funds only to available funds from its pooled cash and investments provide expanded capacity to the system and is portfolio to purchase judgments as investments, just as permitted to pay applicable debt service on one or more it purchases treasury instruments and other permissible series of bonds. investments within its cash and investments portfolio. Accordingly, the City does not record interfund activity 13. Judgments related to the above transactions.

Judgments (tort liabilities) rendered against the City are I. USE OF ESTIMATES funded through subsequent property tax levies over a three-year period beginning with the first year of the The preparation of financial statements in conformity judgment. Levies for District Court judgments are with accounting principles generally accepted in the reported in the debt service fund whereas levies for United States of America requires management to workers’ compensation judgments are recorded in the make estimates and assumptions that affect the employee insurance fund. reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the During the intervening time period from the time the date of the financial statements and the reported judgment is rendered until the judgment is ultimately amounts of revenues, expenses and other changes in funded by the debt service fund, the City is permitted by net assets during the reporting period. Actual results state statutes to use funds available from a fund other could differ from those estimates.

NOTE 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY

1. Net Assets/Fund Balance Deficit 2. Federal Financial Assistance – Disallowed Cost

Office Services – An internal service fund, has a net The U.S. Department of Housing and Urban deficit of $304 resulting from a decrease in operating Development (HUD) disallowed $1,439 of charges for revenue and an increase in operating expenses. It is the ineligible CDBG program expenditures related to prior City’s intent to set future fees in amounts sufficient to program activity. The City has accrued a liability for fund current expenditures and eliminate the deficit. this disallowed cost as a governmental activities long- term liability. One Technology Center – An enterprise fund, has a net deficit of $2,730 resulting from insufficient operating income to cover interest payments on outstanding debt. It is the City’s intent to secure additional revenues and manage expenses to eliminate the deficit.

24 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY

3. Restatements

The beginning fund balance of the Sales Tax Fund and the aggregate remaining fund information are restated for the adoption of GASB Statement No. 54, “Fund Balance Reporting and Governmental Fund Type Definitions”. The effect on year 2010 is as follows:

2010 Previously 2010 Presented Restatement Restated Sales Tax Fund: Total assets$ 96,242 $ 13,078 $ 109,320 Total liabilities 10,806 453 11,259 Fund balance 85,436 12,625 98,061 Total revenue 67,323 80 67,403 Total expenditures 53,775 13,278 67,053 Other financing sources, transfers out (22,154) 12,358 (9,796) Net change in fund balance (8,606) (840) (9,446)

Aggregate Remaining Fund Information: Total assets$ 458,265 $ (13,078) $ 445,187 Total liabilities 77,795 (453) 77,342 Fund balance / net assets 375,008 (12,625) 362,383 Total revenue / additions 174,577 (80) 174,497 Total expenditures / deductions 170,233 (13,278) 156,955 Other financing sources, transfers in 25,921 (12,358) 13,563 Net change in fund balance / net assets 22,290 840 23,130

The beginning net assets of the business-type activities and the aggregate discretely presented Component Units in the Entity-wide statements and the Tulsa Stadium Trust of the Proprietary Fund statements are restated for the adoption of GASB Statement No. 61, “The Financial Reporting Entity: Omnibus—an amendment of GASB Statements No. 14 and No. 34”. The effect on year 2010 is as follows:

2010 Previously 2010 Presented Restatement Restated Business-type Activities: Current assets$ 40,135 $ 5,059 $ 45,194 Noncurrent assets 605,446 48,103 653,549 Current liabilities 14,883 3,049 17,932 Noncurrent liabilities 91,292 19,492 110,784 Net assets 539,406 30,621 570,027 Expenses 59,975 2,070 62,045 Program revenues 54,321 16,286 70,607 Net (expenses) revenues and changes in net assets (5,654) 14,216 8,562 General revenues 680 11 691 Transfers 21,612 2,007 23,619 Change in net assets 16,638 16,233 32,871

25 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY

Aggregate Discretely Presented Component Units: Current assets$ 216,053 $ (5,059) $ 210,994 Noncurrent assets 1,568,909 (48,103) 1,520,806 Current liabilities 68,669 (3,049) 65,620 Noncurrent liabilities 538,897 (19,492) 519,405 Net assets 1,177,396 (30,621) 1,146,775 Expenses 227,958 (2,070) 225,888 Program revenues 255,600 (16,286) 239,314 Net (expenses) revenues and changes in net assets 27,642 (14,216) 13,426 General revenues 20,668 (11) 20,657 Change in net assets 48,310 (16,233) 32,077

Tulsa Stadium Trust - Major Enterprise Fund: Current assets - 5,059 5,059 Noncurrent assets - 48,103 48,103 Current liabilities - 3,049 3,049 Noncurrent liabilities - 19,492 19,492 Net assets - 30,621 30,621 Operating revenues - 60 60 Operating expenses - 1,198 1,198 Operating loss - (1,137) (1,137) Nonoperating income - 15,363 15,363 Income before transfers - 14,226 14,226 Transfers - 2,007 2,007 Change in net assets - 16,233 16,233

26 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 3. DEPOSITS AND INVESTMENTS

Custodial Credit Risk—City of Tulsa Policy: with the reinvestment of the proceeds, then this provision is also allowed. Deposits. The City’s investment policy requires that demand deposits be collateralized at least by 110% of In accordance with its investment policy, the City the amount that is not federally insured. An irrevocable manages its interest rate risk by limiting the weighted letter of credit issued to the City, by the Federal Home average maturity of its investment portfolio to three (3) Loan Bank of Topeka, serves as collateral for the City’s years or less. No security, at the time of purchase, shall cash deposits. have a maturity exceeding five (5) years, with the exception that GNMA mortgage backed pass-through Securities pledged as collateral are held by a third party. securities, as a group, shall, at time of purchase, have Joint custody safekeeping receipts are held in the name an average life not to exceed five (5) years. of the depository institution, but pledged to the City. The security can not be released, substituted or sold without Credit Risk. The City’s investment policy prohibits the City’s approval and release of the security. purchasing any investments rated below AA at the time of purchase. Certificates of deposit are, according to the City’s investment policy, to be collateralized at least by 102% Concentration of Credit Risk. While the City may choose of the amount that is not federally insured. As of June to maintain one-hundred percent (100%) of its 30, 2011, the City had no deposits exposed to custodial investment portfolio in U. S. Treasury bills, notes, and credit risk. bonds, at no time will the portfolio be composed of more than seventy percent (70%) related federal agencies. Investments. The City’s investment policy requires that securities be registered in the name of the City. All The agencies in which the City invests are outlined in safekeeping receipts for investment instruments are held Section 7.0 of the City’s investment policy. in accounts in the City’s name and all securities are Diversification among authorized investment registered in the City’s name. broker/dealers is required, with not more than fifty percent (50%) of the City’s investment portfolio invested State statutes and City ordinances govern the City’s through any one financial institution or broker/dealer. investment policies. Permissible investments include direct obligations of the U.S. Government and agency Investment Policy. Repurchase agreements under 14 securities, municipal bonds, money market funds, days are limited to thirty percent (30%) of the investment certificates of deposit and savings accounts, repurchase portfolio. Money market funds, collateralized repurchase agreements, judgments, and bank or guaranteed agreements over 14 days, certificates of deposit and investment contracts. Collateral is required for demand demand deposits are all limited to not exceed twenty deposits, certificates of deposit and repurchase percent (20%) of the investment. Prime bankers agreements at 102% of all amounts not covered by acceptances are limited to five percent (5%) of the federal deposit insurance. Obligations that may be investment portfolio. pledged as collateral are obligations of the United States and its agencies and obligations of the State and its The City invests in various investment securities. subdivisions. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level Interest Rate Risk. Investments are made based upon of risk associated with certain investment securities, it is prevailing market conditions at the time of the at least reasonably possible that changes in the values transaction with the intent to hold the instrument until of investment securities will occur in the near term and maturity. If the yield of the portfolio can be improved those changes could materially affect the investment upon by the sale of an investment, prior to its maturity, amounts reported in the accompanying financial statements of the City and its component units.

27 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 3. DEPOSITS AND INVESTMENTS

Information regarding the interest rate risk and concentrations of credit risk of the City’s pooled and non-pooled investments, as well as any credit ratings by Moody’s Investors Service and Standard & Poor’s, are as follows:

Pooled Portfolio Investments – Primary Government:

Weighted Average Percent of Fair Maturity Pooled Investments--Primary Government Value (years) Concentration Portfolio Moody's S & P U.S. Treasury securities$ 118,009 1.89 n/a 29.2% n/a n/a Property tax judgments 9,120 1.14 n/a 2.3% n/a n/a Federal Farm Credit Bank securities 61,388 2.46 17.0% 15.2% Aaa AAA Federal Home Loan Bank securities 53,308 2.21 14.7% 13.2% Aaa AAA Federal Home Loan Mortgage Corporation securities 69,409 3.02 19.2% 17.2% Aaa AAA Federal National Mortgage Association securities 49,353 2.81 13.6% 12.2% Aaa AAA Certificates of Deposit 1,221 n/a 0.3% 0.3% n/a n/a $ 361,808 2.07 64.8% 89.6%

Non- Pooled Investments – Primary Government: Weighted Avera ge Maturity Investment s--I ntern al Service Funds Fair Value (ye ars) Co nce ntrat ion Mood y's S & P Federal Hom e Loan Mortage Corporation securities$ 6,274 0.21 29.6% Aaa AAA Federal Nat ional Mortgage Association securities 3,015 0.49 14.2% Aaa AAA U.S. Treasury securities 9,279 0.81 43.8% n/a n/a Money Market 2,599 n/a 12.3% Aaa AAA $ 21,167 0.70 100.0%

Weighted Avera ge Maturity Investment s--Propriet ary Funds Fair Value (ye ars) Co nce ntrat ion Mood y's S & P

Federal Hom e Loan Bank securities$ 1,625 0.69 20.5% Aaa AAA

U.S. Treasury securities 1,251 0.08 15.8% n/a n/a Money Market 5,037 n/a 63.7% Aaa AAA $ 7,913 0.69 100.0%

Non- Pooled Investments – Fiduciary Funds: investments that are evidenced by securities are registered in MERP’s name. Custodial Credit Risk. Custodial credit risk is the risk that, in the event of the failure of the counterparty, the Credit Risk. Fixed income securities are subject to MERP will not be able to recover the value of its credit risk. Credit quality rating is one method of investments that are in the possession of the assessing the ability of the issuer to meet its obligation. counterparty. Investment securities are exposed to MERP’s investment policy requires that at the time of custodial credit risk if they are both uninsured and are purchase all fixed income portfolios are to be invested not registered in the name of the MERP, and are held by primarily in high quality securities but also allows up to the counterparty or the counterparty’s trust department 10% of the portfolio to be invested in below grade but not in the name of MERP. MERP has no exposure securities rated no lower than single B- (by Standard & to custodial credit risk because all of MERP’s Poors) or B3 (by Moody’s). The credit ratings of MERP’s debt securities are as follows:

28 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 3. DEPOSITS AND INVESTMENTS

Rating Not Credit Ratings Available Standard & Poors/Moody's or Not Investment Type AAA/Aaa A/A BBB/Baa Rated Total U.S. agency obligations$ 5,438 $ - $ - $ - $ 5,438 Government mortgage backed securities 19,236 - - - 19,236 Corporate bonds - 6,575 4,262 - 10,837 Asset backed securities 287 491 - - 778 Commercial mortgage backed securities 1,299 903 - 456 2,658 Foreign obligations - 1,842 956 - 2,798

$ 26,260 $ 9,811 $ 5,218 $ 456 $ 41,745

Concentration of Credit Risk. MERP’s investment Interest Rate Risk. Interest rate risk is the risk that guidelines do not specifically address concentration of changes in interest rates will adversely affect the fair credit risk. The asset allocation guidelines for fixed value of an investment. While all investments are income investments at June 30, 2011 were 32% subject to market changes, securities invested in index strategic with a lower limit of 27% and an upper limit of funds are more sensitive to market risk. Although 37%. MERP’s investment policy does not specifically address the duration of fixed-income securities, MERP’s management does monitor interest rate risk by monitoring the performance of each investment manager.

As of June 30, 2011 the MERP had the following investments with maturities:

Weighted Average Fair Maturity Non-Pooled Investments--Fiduciary Funds Value (years) U.S. Treasury securities$ 11,380 9.15 Federal Home Loan Mortgage Corp securities 5,438 19.36 Federal National Mortgage Association securities 17,761 24.02 Government National Mortgage Association securities 1,475 35.29 Mutual funds 274,735 N/A Corporate obligations 14,273 13.15 Foreign obligations 2,798 10.19 Common Stock 23,877 N/A Preferred Stock 236 N/A Timber 196 N/A

$ 352,169 1.79

29 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 3. DEPOSITS AND INVESTMENTS

Non- Pooled Investments – Discretely Presented not in the component unit’s name. The investment in Component Units: money market mutual funds are not categorized as to custodial credit risk because the investment is not Certain component units invest in money market evidenced by securities that exist in physical form or mutual funds, U.S. agency obligations, equity index book entry form. In addition, the component units funds and state and local government securities place no limits on the amount that may be invested in (SLUG). The component units do not have a formal any one issuer. At June 30, 2011, the component policy for limiting its exposure to fair value losses units investment in FHLB constituted 23% of its total arising from rising interest rates, nor do they have a investments. Money market mutual funds, equity formal policy to address credit risk. For custodial index fund and U.S. Treasury securities are not credit risk, the component units’ investments in U.S. subject to concentration of credit risk disclosure. The agency obligations at June 30, 2011 are uninsured component units’ non-pooled investments as of June and unregistered with securities held by the 30, 2011 consisted of the following: counterparty or by its trust department or agent, but

Maturities in Years Investment Type Fair Value > 1 1 - 10 > 10 Moody's S&P

U.S. agency obligations$ 38,041 $ 8,458 $ 28,772 $ 811 Aaa AAA State and local government securities 690 - - 690 n/a n/a Money market mutual funds 36,651 36,651 - - Aaa AAA Equity index funds 704 704 - - n/a n/a U.S. Treasury securities 96,062 56,817 39,245 - n/a n/a $ 172,148 $ 102,630 $ 68,017 $ 1,501

30 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands) NOTE 4. RECEIVABLES

Receivables for the government’s individual major funds and aggregate nonmajor, enterprise funds, internal service funds, and component units, including applicable allowances for uncollectible accounts and discounts, are as follows:

Governmental Funds Adjustment Nonmajor Total Internal Government- Total Sales Governmental Governmental Service wide Governmental General Bond Tax Funds Funds Funds Statements Activities Current receivables, net: Int erest receivable$ 160 $ - $ 55 $ 35 $ 250 $ - $ - $ 250 Taxes r ecei vabl e 23,951 - 9,110 55,474 88,535 - - 88,535 Accounts receivable, gross 3,056 789 - 2,909 6,754 133 - 6,887 Due from other governments - - - 2,767 2,767 - - 2,767 N otes r ecei vable - - - 12 12 - - 12 27,167 789 9,165 61,197 98,318 133 - 98,451 Less: allowance for uncollect ibles (1,921) - - (211) (2,132) - - (2,132)

$ 25,246 $ 789 $ 9,165 $ 60,986 $ 96,186 $ 133 $ - $ 96,319 Noncurrent receivables, net: Taxes r ecei vabl e - - - - - 14,133 - 14,133 Int erest receivable - restricted - - - - - 36 - 36 Accounts r ecei vable - - - - - 42 - 42 Due from other governments ------359 359 - - - - - 14,211 359 14,570

Less: Allowance for uncollectibles - - - - - (9) - (9)

$ - $ - $ - $ - $ - $ 14,202 $ 359 $ 14,561

Business-type Tulsa Tulsa Activities Metropolitan Authority Other Total Enterprise Utility for Recovery Tulsa Component Component Funds Authority of Energy Airports Units Units Current receivables, net: Interest receivable $ 20 $ 20 $ 7 $ - $ 41 $ 68 Accounts receivable, gross 4,050 21,857 2,497 2,628 381 27,363 Due from other governments 220 - - 4,963 1,731 6,694 4,290 21,877 2,504 7,591 2,153 34,125 Less: allowance for uncollectibles (160) (128) (30) (20) - (178)

$ 4,130 $ 21,749 $ 2,474 $ 7,571 $ 2,153 $ 33,947 Noncurrent receivables, net: Notes receivable, net 29 - - - 3,679 3,679 Notes receivable, net - restricted - - - - 10,213 10,213 Accounts receivable - restricted - - - 628 87 715 Interest receivable - restricted 34 277 - 95 26 398

$ 63 $ 277 $ - $ 723 $ 14,005 $ 15,005

31 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands) NOTE 5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities for the government’s individual major funds and aggregate nonmajor, enterprise funds, internal service funds, and component units are as follows:

Adjustments Governmental Funds to Nonmajor Internal Total Government Total Sales Governmental Service Governmental Wide Governmental General Bond Tax Funds Total Funds Funds Statements Activities

Accounts payable$ - $ 5,197 $ 5,231 $ 1,768 $ 12,196 $ 362 $ 12,558 $ - $ 12,558 Accrued payables 3,715 821 1,111 609 6,256 741 6,997 - 6,997 Accrued payroll 503 - - 4 507 118 625 - 625 Accrued interest - - - - - 63 63 3,614 3,677 Due to other governments - - - 24 24 - 24 - 24 $ 4,218 $ 6,018 $ 6,342 $ 2,405 $ 18,983 $ 1,284 $ 20,267 $ 3,614 $ 23,881

Component Units Business-type Tulsa Tulsa Activities Metropolitan Authority Other Total Enterprise Utility for Recovery Tulsa Component Component Funds Authority of Energy Airports Units Units

Accounts payable$ 4,437 $ 8,786 $ 1,187 $ 195 $ 1,941 $ 12,109 Accounts payable - rest ricted - 6,442 - 6,893 448 13,783 Accrued payables 1,436 - - - 426 426 Accrued payroll 117 704 - 101 331 1,136 Accrued intere st 890 - - - - - Accrued intere st - restricted - - - 819 440 1,259

$ 6,880 $ 15,932 $ 1,187 $ 8,008 $ 3,586 $ 28,713

32 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NNOOTTEE 3 6. .D IENPTOERSIFTUSN ADN TDR IANNVSEASCTMTIEONNTSS

Primary government interfund receivables and payables consist of the following:

Amount Due From Other Funds Due To Other Funds Purpose

$ 185 General Fund Arena & Convention To finance capital projects 53 General Fund Internal Service Funds To provide cash flow 238

Advances To Other Funds Advances From Other Funds Purpose 583 General Fund Federal and State Grants To advance fund grants 146 General Fund Office Services To provide cash flow 6,867 Sales tax TPFA To finance capital projects 800 TPFA Special Revenue Funds To finance capital projects 758 Arena & Convention Fund Tourism and Convention To provide cash flow $ 9,154

Advances To Primary Advances From Component Government Units Purpose 127 Tulsa Airports General Fund To fund firefighter services 3,157 TMUA Bond To fund capital improvements $ 3,284

Advances From Primary Advances To Component Units Government Purpose $ 326 General Fund MTTA To provide cash flow

33 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NNOOTTEE 3 6. .DIENPTOERSFITUSN ADN TDR IANNVSEASCTMTIEONNTSS

Primary government interfund transfers for the year ended consist of the following amounts:

Transfers From

Sales Nonmajor Internal General Bond Tax Governmental Service Enterprise Transfers To Total Fund Fund Fund Funds Funds Funds

Governmental Funds: Major Funds: General Fund$ 313 $ - $ - $ - $ 313 $ - $ - Nonmajor Funds 3,628 77 - 430 2,408 150 563

Total Governmental Funds 3,941 77 - 430 2,721 150 563

Internal Service Funds 824 - 75 599 150 - -

Enterprise Funds: Stormwater Management Fund 4,311 - 3,273 994 44 - - TPFA / CC and Arena 4,224 1,356 - - 2,868 - - TPFA / OTC Building 1,169 1,169 - - - - - Tulsa Stadium Trust 2,015 - - - 2,015 - - Golf Courses Fund 794 590 - 204 - - - Total Enterprise Funds 12,513 3,115 3,273 1,198 4,927 - - Total Primary Government $ 17,278 $ 3,192 $ 3,348 $ 2,227 $ 7,798 $ 150 $ 563

Transfers - in Transfers - out Governmental Funds$ 3,941 Governmental Funds$ 16,565 Internal Service Funds 824 Internal Service Funds 150 Enterprise Funds 12,513 Enterprise Funds 563 Total Primary Government$ 17,278 Total Primary Government$ 17,278

1. Purpose of Transfers 2. Eliminations

The above transfers occur principally to fund operations Interfund transfers are reported in the governmental and finance capital assets acquisitions. Transfers are activities and business-type activities fund financial used to (1) move revenues from the fund that State statements. In the government-wide statements, statutes or City ordinances requires to collect them to interfund transfers are eliminated within the the fund that State statutes or City ordinances requires governmental activities column and within the business- to expend them, (2) move receipts restricted to debt type activities column. 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.

34 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 7. CAPITAL ASSETS

Capital asset activity for the year ended is as follows:

Beginning Ending Balance Additions Reductions Balance GOVERNMENTAL ACTIVITIES: Nondepreciable capital assets: Land $ 25,808 $ 6,155 $ (1,839) $ 30,124 Land - Infrastructure use 436,133 117 - 436,250 Construction in progress: General government 26,466 9,595 (4,714) 31,347 Infrastructure 130,521 59,262 (13,035) 176,748 Total construction in progress 156,987 68,857 (17,749) 208,095 Total nondepreciable capital assets 618,928 75,129 (19,588) 674,469 Depreciable capital assets: Land improvements 82,752 2,744 (100) 85,396 Buildings 178,437 984 (7,498) 171,923 Equipment 153,794 9,195 (12,379) 150,610 Street network 2,671,103 12,642 - 2,683,745 Bridge network 106,897 5 - 106,902 Total depreciable capital assets 3,192,983 25,570 (19,977) 3,198,576 Total capital assets 3,811,911 100,699 (39,565) 3,873,045

Accumulated depreciation: Land improvements (62,239) (459) 100 (62,598) Buildings (73,448) (2,807) 4,729 (71,526) Equipment (101,343) (9,753) 9,656 (101,440) Street network (2,287,551) (15,966) - (2,303,517) Bridge network (94,035) (2,269) - (96,304) Total accumulated depreciation (2,618,616) (31,254) 14,485 (2,635,385) Total depreciable capital assets, net 574,367 (5,684) (5,492) 563,191 Governmental activities capital assets, net $ 1,193,295 $ 69,445 $ (25,080) $ 1,237,660

35 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 7. CAPITAL ASSETS

Beginning Balance, as Ending restated Additions Reductions Balance BUSINESS-TYPE ACTIVITIES: Nondepreciable capital assets: Land $ 79,422 $ 2,850 $ - $ 82,272 Construction in progress 35,445 11,091 (33,022) 13,514 Total nondepreciable assets 114,867 13,941 (33,022) 95,786 Depreciable capital assets: Land improvements 266,374 32,794 - 299,168 Buildings 292,211 234 - 292,445 Equipment 74,464 4,056 (1,147) 77,373 Total depreciable capital assets 633,049 37,084 (1,147) 668,986 Total capital assets 747,916 51,025 (34,169) 764,772

Accumulated depreciation: Land improvements (43,813) (7,205) - (51,018) Buildings (33,673) (5,124) 35 (38,762) Equipment (23,215) (9,806) 955 (32,066) Total accumulated depreciation (100,701) (22,135) 990 (121,846) Total depreciable capital assets, net 532,348 14,949 (157) 547,140 Business-type activities capital assets, net $ 647,215 $ 28,890 $ (33,179) $ 642,926

DISCRETELY PRESENTED COMPONENT UNITS: Nondepreciable capital assets: Land, easements and other $ 172,516 $ 5,666 $ (893) $ 177,289 Water rights 9,567 26 - 9,593 Construction in progress 154,924 80,994 (168,393) 67,525 Total nondepreciable capital assets 337,007 86,686 (169,286) 254,407

Depreciable capital assets: Land improvements and water and sewer Lines 1,262,162 147,246 - 1,409,408 Buildings 485,073 6,785 (10,442) 481,416 Equipment 140,520 31,974 (11,574) 160,920 Total depreciable capital assets 1,887,755 186,005 (22,016) 2,051,744 Total capital assets 2,224,762 272,691 (191,302) 2,306,151

Accumulated depreciation: Land improvements and water and sewer Lines (508,479) (25,258) - (533,737) Buildings (244,789) (11,842) 7,849 (248,782) Equipment (86,163) (10,363) 10,494 (86,032) Total accumulated depreciation (839,431) (47,463) 18,343 (868,551) Total depreciable capital assets, net 1,048,324 138,542 (3,673) 1,183,193 Component unit capital assets, net $ 1,385,331 $ 225,228 $ (172,959) $ 1,437,600

36 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 7. CAPITAL ASSETS

Depreciation expense is charged to functions as follows:

Governmental Activities Business-type Activities Component Units

Administrative and support$ 542 Golf courses$ 562 TMUA$ 28,887 Public safety and protection 8,261 One Technology Center$ 1,924 TARE 297 Public works and transportation 20,511 Arena/Convention 10,150 TAIT 14,418 Social and economic development 286 Stormwater management 7,566 Other 3,861 Culture and recreation 1,654 Tulsa Stadium Trust 1,933 $ 47,463 $ 31,254 $ 22,135

NOTE 8. RISK MANAGEMENT

The City’s risk-management activities are recorded in Workers’ compensation judgments include lump-sum the Employee Insurance Fund. The purpose of the fund judgments and installment judgments. Lump-sum is to administer the workers’ compensation, health and judgments are paid in full at the time of judgment dental insurance programs of the City. The use of this whereas installment judgments are payable over time. fund does not constitute a transfer of risk from the City. The total amount of installment judgments is indeterminable at the time of judgment. Insurance - Significant losses are covered by commercial insurance for all major programs except Judgments paid are included in the subsequent property workers’ compensation, for which the City retains all risk tax levy. The levy amount is recorded as a receivable. of loss. For insured programs, there have been no significant reductions in insurance coverage. Settlement The carrying amount of the liability for judgments in the amounts have not exceeded insurance coverage for the amount of $5,410 is discounted at an annual rate of current year or the three prior years. 3.8% and presented at their net present value of $3,859.

Judgments - Judgments (tort liability) are funded through Workers’ Compensation - The City records a liability for property taxes over a three-year period. Tax revenues workers’ compensation claims. Claims liabilities are are reported in the Debt Service Fund and amounts based on estimates of the ultimate cost of reported associated with workers’ compensation judgments are claims (including future claim adjustment expenses) plus recorded in the Employee Insurance Fund.. an estimate for claims which have been incurred but not reported based on historical experience.

Change in Workers' Compensation Liabilities

2011 2010 2009

Claims liability at beginning of year$ 18,937 $ 18,038 $ 16,718 Current year claims and changes in estimates 8,650 8,292 9,124 Claims payments (8,408) (7,393) (7,804) Claims liability at end of year$ 19,179 $ 18,937 $ 18,038

Assets available to pay claims at June 30$ 24,463 $ 25,367 $ 19,806

37 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 9. RETIREMENT AND DEFERRED COMPENSATION PLANS

Each qualified employee is included in one of the three employees, the City’s total payroll was $107,437. Total retirement plans in which the City participates. These covered payroll was $93,640. Covered payroll refers to are the Municipal Employees’ Pension Fund (MERP), all compensation paid by the City to active employees Oklahoma Firefighters’ Pension Fund, and Oklahoma covered by the Plan. Police Pension and Retirement System. The City does not maintain the accounting records, hold the 2. Summary of Significant Accounting Policies investments or administer the police officers’ and firefighters’ retirement funds. The police officers’ and Basis of Accounting – The Municipal Employees’ firefighters’ plans are statewide systems administered by Pension Trust Fund financial statements are prepared the State of Oklahoma. The Municipal Employees’ on the accrual basis of accounting. Both employer and Pension Fund is administered by a separate board of employee contributions are recognized as revenue in trustees and a local bank holds the assets in custody. the period in which employees provide services. Actuarial valuations for these plans are performed annually. Unless otherwise indicated, information in this Method Used to Value Investments – Investment income note related to the Municipal Employees’ Pension Fund is recognized when earned. Investments are reported at is provided as of the latest actuarial valuation, January fair value which is determined using selected bases, as 1, 2011. Also, unless otherwise indicated, information in follows: short-term investments are reported at cost, this note related to Oklahoma Police and Firefighters’ which approximates fair value; securities traded on a Pension and Retirement systems are provided as of the national or international exchange are valued at the last latest actuarial valuations, July 1, 2011. reported sales price at current exchange rates; investments that do not have an established market are A summary of significant information for each of the reported at estimated fair value. Gains and losses on retirement plans follows. sales and exchanges are recognized on the transaction date. Administrative costs are financed with investment A. MUNICIPAL EMPLOYEES’ PENSION FUND earnings of the plan. 1. Plan Description 3. Contributions The City contributes to the Municipal Employees’ Retirement Plan (“Plan”) which is a cost-sharing multiple The contribution requirements of Plan members and the employer defined benefit pension plan. The Plan was City are established by City ordinance. Employees of the established by the City in accordance with the City City are required to contribute 4% of covered Charter and State statutes, and is reported as a pension compensation to the Plan. The contributions are trust fund. All full-time employees of the City and related deducted from the employee’s wages or salary and agencies, except employees covered under the pension remitted by the City to the Plan on a semi-monthly basis. program established for police officers and firefighters, The City is required to contribute the remaining amounts are eligible to participate in the system on the first day of necessary to fund the system, using the actuarial basis the month which coincides with, or next following, their specified by City ordinance. first day of employment. The Plan covers four participating entities. Administrative costs of the Plan are 4. Benefits and Refunds Paid financed through investment earnings. Any participant whose years of continuous employment, The Plan does not issue a stand-alone financial report when added to the participant’s age equals or exceeds and is not included in the report of a public employee 80, may retire without a reduction in the monthly benefit. retirement system or a report of another entity. The amount of retirement income is established by City ordinance and is equal to 2.35% of final average Employee membership data related to the pension plan, earnings, up to covered compensation, times years of as of January 1, 2011 was as follows: service.

Membership Pension provisions include death benefits for the surviving spouse. The system does not provide a monthly Active plan members 2,387 income for disabled participants; however, under certain Retirees and beneficiaries conditions, employees who become disabled may be currently receiving benefits 1,595 eligible to receive their full retirement at age 65 even Termintated employees entitled to though they were unable to work up to the retirement age. Benefits vest at 100% after five years of service. but not yet receiving benefits 262 Total 4,244 5. Concentrations

There are no investments in any one organization For the year ended June 30, 2011, the City’s total representing 5% or more of the Plan net assets. There payroll for all employees was $192,461, including are no investments in, loans to, or leases with related police and fire employees. Excluding police and fire parties to the Plan.

38 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 9. RETIREMENT AND DEFERRED COMPENSATION PLANS

6. Annual Pension Cost Trend Information pension payments equal to 50% of the member’s final Annual Net average compensation. Pension Percentage Pension The Oklahoma State Legislature has the authority to Year Cost Contributed Obligation grant percentage increases or special one-time 2011 $ 8,698 65.1% $ 5,338 payments to persons receiving benefits from the 2010 8,490 72.8% 6,184 System, and is required by statute to make 2009 6,326 100% - appropriations as necessary to insure that benefit payments are made. 7. Actuarial Valuation, Methods and Assumptions The City’s covered payroll for the Firefighters’ System was $39,170, while the City’s total payroll for all Valuation date January 1, 2011 employees was $192,461 during the same time period. Actuarial cost method Ent ry Age Normal Amortization method Level percent, open The Firefighters’ System issues a stand-alone financial report which can be obtained from the Oklahoma State Remaining amortization periods 30 years Firefighters’ Retirement Board at 4545 North Lincoln Actuarial asset valuation method 5 year smoothed FMV Boulevard, Suite 265, Oklahoma City, Oklahoma 73105. Investme nt rate of return 7.75% Projected salary increases 4.25%-13.70% 2. Contributions Inflation Rate 3.3% Members of the Firefighters’ System are required to pay Cost-of-living adjustments None 8% of their covered compensation to the pension plan. The City makes a contribution of 13% of the members’ 8. Funded Status and Funding Progress covered compensation to the system as required by state statute. The total contribution to the Firefighters’ The funded status of the plan as of January 1, 2011, was System amounted to $8,226 of which $5,092 was made as follows (in millions). by the City and $3,134 was made by the employees. These contributions represent approximately 13% (City) Actuarial accrued liability (AAL) $ 485 and 8% (member) of covered payroll. Actuarial value of plan assets (AVA) $ 372 The City’s contributions represent 25% of the Unfunded actuarial accrued liability (UAAL)$ (113) Firefighters’ System total annual contributions state- Funded ratio 76.8% wide. Covered payroll$ 102 UAAL as a percentage of funded payroll 110.4% 3. Annual Required Contribution Trend Information Required Percentage The schedule of funding progress, presented as required Year Contribution Contributed supplementary information (RSI) following the notes to 2011$ 8,226 100% the financial statements, present multiyear trend 2010 8,571 100% information about whether the actuarial values of plan 2009 8,847 100% assets are increasing or decreasing over time, relative to the AALs for benefits. 4. Related Party Investments B. OKLAHOMA FIREFIGHTERS’ PENSION AND RETIREMENT SYSTEM As of and for the year ended June 30, 2011, the Firefighters’ System held no securities issued by the City 1. Plan Description or other related parties.

Members of the City’s Fire Department are covered by C. OKLAHOMA POLICE PENSION AND the Oklahoma Firefighters’ Pension and Retirement RETIREMENT SYSTEM System, (the “Firefighters’ System”) which is a statewide cost sharing multiple-employer defined benefit plan 1. Plan Description established by the State of Oklahoma that provides participants with retirement, death and disability Members of the City’s Police Department are covered by benefits, and a deferred option plan. All full-time the Oklahoma Police Pension and Retirement System, firefighters who are hired before age 45 are eligible to (“the Police System”) which is a statewide cost sharing participate in the Firefighters’ System. multiple-employer defined benefit pension plan established by the State of Oklahoma that provides Participants become vested upon completing ten years participants with retirement, death and disability of credited service as a contributing participant of the benefits, and a deferred option plan. Police officers Firefighters’ System. Any participant who completes 20 employed by participating municipalities are required to years of credited service, regardless of age, is entitled to participate in the Police System.

39 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 9. RETIREMENT AND DEFERRED COMPENSATION PLANS

Participants become vested upon completing ten years D. DEFERRED COMPENSATION PLAN of credited service as a contributing participant of the Police System. Any participant who completes 20 years The City offers its employees a deferred compensation of credited service, regardless of age is entitled to plan created in accordance with Internal Revenue Code pension payments equal to 50% of the member’s final Section 457. The plan, available to all City employees, average compensation. permits them to defer a portion of their current salary until future years. The deferred compensation is not The Oklahoma State Legislature has the authority to available to the employees until termination, retirement, grant percentage increases or special one-time death, or unforeseeable emergency. payments to persons receiving benefits from the Police System, and is required by statute to make The City appoints a committee of employees that appropriations as necessary to insure that benefit represents the City in all matters concerning the payments are made. administration of the deferred compensation plan. The committee has full power and authority to adopt rules The City’s covered payroll for the Police System was and regulations for the administration of the deferred $45,855, while the City’s total payroll for all employees compensation plan. The committee also contracts with was $192,461 during the same time period. providers to manage the investment of plan assets and is responsible for selecting the plan investment options. The Police System issues a stand-alone financial report Additionally, the committee reviews and approves which can be obtained from the Oklahoma State Police withdrawals, terminations, and benefit payments. Retirement Board at 1001 NW 63rd Street, Suite 305, Oklahoma City, Oklahoma 73116. The City accounts for and reports its deferred compensation plan under the provisions of both GASB 2. Contributions No. 32, “Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Members of the Police System are required to pay 8% of Plans;” and GASB No. 34. GASB No. 32 rescinded their covered compensation to the pension plan. The GASB No. 2 (“Financial Reporting of Deferred City makes a contribution of 13% of the members’ Compensation Plans Adopted under the Provisions of covered compensation to the Police system as required Internal Revenue Code Section 457”) and established by state statute. Total contributions to the Police accounting and financial reporting standards for Internal System amounted to $9,629, of which $5,961 is from the Revenue Code Section 457 deferred compensation City’s contributions and $3,668 is from employee plans of state and local government employers. The contributions. These contributions represent laws governing these plans were changed to state that approximately 13% (City) and 8% (member) of covered as of August 20, 1996, new plans would not be payroll. considered eligible plans unless all assets and income of the plan are held in trust or covered by annuity The City’s contributions represent 29% of the Police contract for the exclusive benefits of the participants and System total annual contributions state-wide. their beneficiaries. The City’s plan meets this requirement. 3. Annual Required Contribution Trend Information The plan is not reported in the City’s financial statements because the assets are held in trust by an Required Percentage independent trustee for the benefit of the participating Year Contribution Contributed employees. 2011$ 9,629 100% 2010 9,874 100% 2009 10,637 100%

4. Related Party Investments

During the year ended June 30, 2011 and as of June 30, 2011, the Police System held no securities issued by the City or other related parties.

40 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 9. NROETEIR 1E0M. E ONTTH AENRD P DOESFTE-ERMRPELDO CYOMMEPNETN BSEANTEIOFINT SPLANS

A. PLAN DESCRIPTION the death of the retiree. Spouses of employees eligible for benefits and who die in active service can receive The City provides post employment healthcare benefits coverage. (OPEB) for retired employees and their dependents through the City of Tulsa Postretirement Medical Plan C. MEMBERSHIP (the Plan), a single-employer defined benefit healthcare plan. The governmental activities, business type At July 1, 2010, membership consisted of the following: activities and component units account for 94% of the Retirees and beneficiaries currently receiving benefi 371 OPEB liability. Other organizations, not in the reporting Active employees 2,764 entity account for the remaining 6%. The benefits, 3,135 coverage levels, employee contributions and employer D. FUNDING POLICY contributions are governed by the City and can be amended by the City through its personnel manual and The City contributes a fixed premium subsidy towards union contracts. The Plan does not issue a stand-alone the medical coverage of retirees and their dependents. financial report. For the fiscal year ending June 30, 2011, the City contributed $72.73 per month for participants retiring B. BENEFITS PROVIDED prior to July 1, 1998 and $101.37 per month for The Plan covers all current retirees who elected participants retiring after June 30, 1998. Additionally, the postretirement medical coverage through the City of City contributed $108.03 per month for dependent Tulsa and future retired general employees. All current coverage. The retirees and their dependents are active police officers and firefighters are covered by a responsible for the remainder of the group contract rate separate trust established specifically to provide medical for the medical plan chosen. As of June 30, 2011, no benefits to the City of Tulsa police officers and irrevocable trust had been established for the funding of firefighters and are not considered for this disclosure. the Plan’s post-retirement benefit obligation. The premium subsidy paid by the City is funded on a pay-as- All healthcare benefits are provided through the City’s you-go basis. fully insured health plan. The benefit levels are the same as those afforded to active employees. Benefits include E. ANNUAL OPEB COSTS general inpatient and outpatient medical services and prescriptions. General employees are eligible for Percentage membership in the Plan if they retire from the City on or of Annual after age 55 with 5 years of service or with age and Annual OPEB Cost Net OPEB service totaling 80 points. Coverage ceases upon Employer eligibility of the member (retiree or dependent) for Year OPEB Cost Contributions Contributed Obligation Medicare. Coverage for dependents can continue upon 2011 $ 3,017 $ 537 18% $ 15,450 2010 $ 3,077 $ 522 17% $ 12,970 2009 $ 2,950 $ 285 10% $ 10,415 F. NET OPEB OBLIGATION:

The net OPEB obligation was calculated as follows: Annual Required Contribution$ 3,219 Interest on Net OPEB Obligation 519 Adjustment to Annual Required Contribution (721) Annual OPEB Cost 3,017 Contributions (537) Increase (Decrease) in Net OPEB Obligation 2,480 Net OPEB Obligation, beginning of year 12,970 Net OPEB Obligation, end of year$ 15,450

Net OPEB Obligation reported in: Governmental activities 7,046 Business type activities 988 Component units 6,561 Organizations not in reporting entity 855 $ 15,450

41 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 10. OTHER POST-EMPLOYMENT BENEFITS

G. SCHEDULE OF FUNDING PROGRESS

The funded status of the plan as of July 1, 2010 Actuarial Accrued Liability (AAL)$ 34,166 Actuarial value of plan assets$ - Unfunded Actuarial Accrued Liability (UAAL)$ 34,166 Funded ratio (actuarial value of plan assets / AAL) 0% Covered payroll (active plan members)$ 102,941 UAAL as a percentage of covered payroll 33%

H. ACTUARIAL METHODS AND ASSUMPTIONS Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and Projections of benefits for financial reporting purposes assumptions about the probability of occurrence of are based on the substantive Plan (the Plan as events far into the future. Examples include assumptions understood by the employer and Plan members) and about future employment, mortality and the healthcare include the types of benefits provided at the time of each cost trend. Amounts determined regarding the funded valuation and the historical pattern of sharing of benefit status of the plan and the ARCs of the employer are costs between the employer and plan members to that subject to continual revision as actual results are point. The actuarial methods and assumptions used compared with past expectations and new estimates are include techniques that are designed to reduce short- made about the future. The schedule of funding term volatility in actuarial accrued liabilities and the progress, presented as required supplementary actuarial value of assets, consistent with the long-term information following the notes to financial statements, perspective of the calculations. presents multi-year trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.

Valuation date July 1, 2010 Actuarial cost method Entry Age Amortization method Level dollar Remaining amortization periods 30 years open Discount rate 4% Initial annual healthcare cost trend rate 8.0% Annual reduction of healthcare cost trend rate 0.5% Ultimate annual healthcare cost trend rate 5%

42 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 11. LONG-TERM LIABILITIES A. LONG-TERM LIABILITIES A summary of long-term liability activity is as follows (additional detailed information is available on the following pages):

Beginning Balance, as Due Within restated Additions Reductions Ending Balance One Year PRIMARY GOVERNMENT

Governmental activities: General obligation bonds $ 337,865 $ 91,105 $ (42,501) $ 386,469 $ 27,778 Revenue bonds 27,515 - (13,390) 14,125 14,125 Other long-term liabilities 71,577 32,000 (35,171) 68,406 30,692 Premium on debt issuance - GO bonds 13,240 11,584 (3,435) 21,389 - Premium on debt issuance - Revenue bonds 396 - (266) 130 - Total governmental activities 450,593 134,689 (94,763) 490,519 72,595 Business-type activities: Revenue bonds 110,316 3,900 (7,669) 106,547 2,834 Unamortized discount--revenue bonds (151) - 6 (145) - Unamortized deferred loss on refunding - revenue bonds (41) - 18 (23) - Compensated absences 871 712 (732) 851 572 Other post-employment benefits 867 121 - 988 - Pension liability 154 212 - 366 - Total business-type activities 112,016 4,945 (8,377) 108,584 3,406

Total primary government$ 562,609 $ 139,634 $ (103,140) $ 599,103 $ 76,001

COMPONENT UNITS

General obligation bonds 56,580 - (5,254) 51,326 5,316 Premium on debt issuance - TMUA 1,647 - (283) 1,364 - 58,227 - (5,537) 52,690 5,316

Promissory notes 134,658 32,958 (10,202) 157,414 8,308 Unamortized bond discount - TMUA (127) 21 - (106) - Premium on debt issuance - TMUA 1,836 976 (186) 2,626 - 136,367 33,955 (10,388) 159,934 8,308

Capital lease 9,603 - (433) 9,170 451 Water main extension contracts 8,144 - (1,073) 7,071 529 Compensated absences 5,610 5,216 (4,625) 6,201 3,767 Other post-employment benefits 5,503 1,098 (40) 6,561 - Pension liability 1,113 1,932 (398) 2,647 68 Due to other governments 210 - (210) - - Pollution remediation obligation 166 - - 166 - Arbitrage rebate liability 10 - (9) 1 - Deposits subject to refund 12 4 - 16 -

Total component units$ 549,147 $ 79,347 $ (51,003) $ 577,491 $ 35,589

43 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 11. LONG-TERM LIABILITIES

The City issues general obligation bonds to provide The City is subject to legal debt limits set forth in the funds for the acquisition and construction of major Oklahoma Constitution. While the City’s legal debt limit capital facilities. General obligation bonds have been is $313,017, no currently outstanding City general issued for both governmental and business-type obligation bonds are subject to that limit. activities as well as component units. General obligation bonds are direct obligations and pledge the full faith and B. PRIMARY GOVERNMENT credit of the City. The Constitution of Oklahoma prohibits the City from General obligation bonds issued for governmental becoming indebted for any amount exceeding the activity purposes are liquidated by the Debt Service revenue to be received for any fiscal year, without the Fund. General obligation bonds issued for component approval of the voters. General obligation bonds have unit purposes are liquidated by the component unit. been approved by the voters and issued by the City for Revenue bonds issued for governmental activities are various municipal improvements. These bonds are to be liquidated by the TPFA internal service fund from lease fully paid, generally within 20 years from the date of and loan repayments. Revenue bonds and promissory issue, and are backed by the full faith and credit of the notes issued for business-type activities or by City. component units are repaid from those activities or component units. Compensated absences incurred by General Obligation Bond Refunding governmental activities are liquidated by the fund which pays the salary. On February 23, 2011, the City issued $21,105 in Series 2011A Refunding General Obligation Bonds. The Compensated absences incurred by business-type proceeds of these issues along with $2,095 from the activities or by component units are liquidated by those Debt Service Fund were used to currently refund the activities or component units. City’s Series 2002 General Obligation Bonds. The funds were temporarily held in escrow until March 1, 2011 at The workers’ compensation liability will be liquidated which time the refunding took place. primarily through a portion of a property tax levy of the Employee Insurance Fund and secondarily by charging This transaction will reduce debt service payments by the other funds based on management’s assessment of $2,981 over the next 11 years and result in an economic the insurance risk that should be assumed by the gain (difference between the present values of the debt individual funds. service payments on the old and new debt) of $4,246. The refunding resulted in a deferred accounting loss of $35 which will be amortized over the life of the new bonds. The amortization and related deferred loss are reported in the financial statements.

44 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 11. LONG-TERM LIABILITIES

Primary government long-term liability activity is as follows:

Issue Maturity Interest Beginning Ending Due Within Amount Date Rate Balance Additions Reductions Balance One Year Governmental activities General obligation bonds: Series 2002$ 40,675 2022 4.38-4.8%$ 25,695 $ - $ (25,695) $ - $ - Series 2004-A, Refunding 28,021 2016 5.00% 14,095 - (2,321) 11,774 2,321 Series 2004-B, Refunding 11,582 2015 3.25-5.0% 5,434 - (275) 5,159 1,285 Series 2005 36,781 2025 5.00% 29,010 - (1,942) 27,068 1,942 Series 2006 30,183 2026 4.0-4.5% 25,392 - (1,597) 23,795 1,597 Series 2007 65,933 2027 4.0-4.25% 62,269 - (3,663) 58,606 3,664 Series 2008 35,851 2028 4.0-4.75% 33,958 - (1,893) 32,065 1,893 Series 2009 48,454 2029 2.5-4.25% 48,454 - (2,573) 45,881 2,572 Series 2009B 70,000 2020 4.0-5.0% 70,000 - - 70,000 7,800 Series 2009A, Refunding 9,153 2019 3.0-4.0% 9,153 - (1,103) 8,050 1,078 Series 2009B, Refunding 14,405 2021 3.0-5.0% 14,405 - (1,439) 12,966 1,406 Series 2010 70,000 2021 3.0-5.0% - 70,000 - 70,000 - Series 2011A, Refunding 21,105 2022 2.25-4.25% - 21,105 - 21,105 2,220 337,865 91,105 (42,501) 386,469 27,778

Premium on debt issuance 13,240 11,584 (3,435) 21,389 -

351,105 102,689 (45,936) 407,858 27,778 Revenue bonds: Capital Improvements - 2006-A 72,965 2012 5.00% 27,515 - (13,390) 14,125 14,125 Premium on debt issuance 396 - (266) 130 -

27,911 - (13,656) 14,255 14,125 Other long-term liabilities: Compensated absences 30,838 17,050 (19,727) 28,161 18,924 Other post-employment benefits 6,600 1,309 (863) 7,046 - Pension liability 1,173 1,434 - 2,607 - Arbitrage rebate liability 1,086 - (1,043) 43 - Claims and judgments 30,162 10,511 (12,770) 27,903 10,768 E911 Promissory Note - 2005 2,500 2013 4.30% 1,165 - (369) 796 389 Due to other governments 553 1,696 (399) 1,850 611

71,577 32,000 (35,171) 68,406 30,692

Total governmental activities$ 450,593 $ 134,689 $ (94,763) $ 490,519 $ 72,595 Business-type activities Revenue bonds: Recreational Facilities - 2003 3,460 2013 2.9-3.35% 1,285 - (410) 875 430 Assembly Center - 1985 23,335 2015 6.60% 7,160 - (1,260) 5,900 1,340 Lease Rev Bonds 2007A 34,620 2038 4.625-5.25% 34,620 - - 34,620 - Lease Rev Bonds 2007B 33,130 2030 5.06-6.6% 32,530 - - 32,530 - Capital Improvements - 2008 16,000 2027 3.8-6.069% 14,910 - (680) 14,230 725 Series 2008-1 & 2008-2 - TST 25,000 2039 6.50% 19,811 3,900 (5,319) 18,392 339 110,316 3,900 (7,669) 106,547 2,834

Unamortized discount (151) - 6 (145) - Unamortized deferred loss on refunding (41) - 18 (23) - 110,124 3,900 (7,645) 106,379 2,834

Compensated absences 871 712 (732) 851 572 Other post-employment benefits 867 132 - 999 - Pension liability 154 212 - 366 -

Total business-type activities$ 112,016 $ 4,956 $ (8,377) $ 108,595 $ 3,406

45 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 11. LONG-TERM LIABILITIES

Summary of general obligation bonds outstanding at year end:

Maturity Interest Ending Primary Component General Obligation Series Date Rate Balance Government Units

Series 2002-C, Refunding 2017 4.0-5.0%$ 12,600 $ - $ 12,600 Series 2004-A, Refunding (3% Sewer) 2016 5.0% 12,170 11,774 396 Series 2004-B, Refunding (8% Sewer) 2015 3.25-5.0% 5,620 5,159 461 Series 2005 (26% Sewer) 2025 5.00% 36,800 27,068 9,732 Series 2006 (2.635% Sewer) 2026 4.0-4.5% 24,440 23,795 645 Series 2007 (9.295% Sewer) 2027 4.0-4.25% 64,610 58,606 6,004 Series 2008 (19.45405530% Sewer) 2028 4.0-4.75% 39,810 32,065 7,745 Series 2009 (6.4604247% Sewer) 2029 2.5-4.25% 49,050 45,881 3,169 Series 2009B 2020 4.0-5.0% 70,000 70,000 - Series 2009A, Refunding (37.668% Sewer) 2019 3.0-4.0% 12,915 8,050 4,865 Series 2009B, Refunding (30.5625% Sewer) 2021 3.0-5.0% 18,675 12,966 5,709 Series 2010 2021 3.0-5.0% 70,000 70,000 - Series 2011A, Refunding 2022 2.25-4.25% 21,105 21,105 -

$ 437,795 $ 386,469 $ 51,326

C. COMPONENT UNITS and generally requires semi-annual principal and interest payments. During the year ended June 30, 1. Revenue Bonds 2011, the Series 2011C Promissory Note for $16,700 Revenue bonds outstanding include debt issued by was authorized but unissued. component units of the City. The debt of these 4. Conduit Debt component units does not constitute debt of the City and is payable solely from resources of the authorities or To pay the costs of certain modifications, rehabilitation, trusts. Revenue bonds are collateralized primarily by the and reconstruction to special facilities located at the trust estates and revenues derived there from. Tulsa International Airport, the Airport issued a series of Special Facility Revenue Bonds. At June 30, 2011, Various bond indentures, loan agreements, and pledge Special Facility Revenue Bonds outstanding aggregated and security agreements contain significant limitations $10,120. and restrictions for annual debt requirements and flow of monies through various restricted accounts. The outstanding amounts are special limited obligations of the Airport, payable solely from and collateralized by 2. Revenue Bond Refunding a pledge of rentals to be received from a lease On November 10, 2010 the Tulsa Airports Improvement agreement between the Airport and Biz Jet International. Trust issued $13,520 in Series 2010C Revenue Bonds. The bonds do not constitute a debt or pledge of the faith The proceeds of these issues were used to currently and credit of the Airport or the City, and accordingly, refund the Trust’s Series 1999B, 2001 and 2000A, in neither the assets nor the debt are reported in the part. This transaction will reduce debt service payments accompanying financial statements. by $1,391 over the next 16 years and result in an Notes and bonds issued by the Tulsa Industrial Authority economic gain (difference between the present values of are utilized by industrial, commercial and other the debt service payments on the old and new debt) of organizations to promote economic development within $747. This transaction resulted in a deferred accounting and near the territorial limits of the City of Tulsa. The loss of $423, which will be amortized over the life of the Authority loans the proceeds from the notes and bonds new bonds. to organizations or enters into lease-purchase 3. Promissory Notes agreements for the facilities. The notes and bonds issued by the Authority are special and limited The TMUA’s outstanding loans with the Oklahoma obligations of the Authority, payable solely out of Water Resources Board are collateralized by a first lien revenues from the loan agreements and security and security interest in the TMUA’s wastewater provided by the loan agreements. At June 30, 2011, the treatment system and the revenues derived there from aggregate outstanding principal balances due on these notes and bonds are approximately $180,000.

46 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 11. LONG-TERM LIABILITIES

Component Unit long-term liability activity is as follows:

Issue Maturity Interest Beginning Ending Due Within Amount Date Rate Balance Additions Reductions Balance One Year REVENUE BONDS: Tulsa Airports Improvement Trust Series 1999-B$ 14,665 2026 5.5 - 6.125%$ 7,850 $ - $ (7,850) $ - $ - Series 2000-A 11,000 2020 6.00% 7,345 - (2,345) 5,000 - Series 2001-A 54,000 2017 5.20% 3,000 - (3,000) - - Series 2004-A 17,800 2018 4.25-5.00% 12,245 - (1,280) 10,965 1,345 Series 2004-B 2,200 2017 4.95% 1,400 - (200) 1,200 200 Series 2009-A 42,705 2024 3.0 - 5.375% 39,620 - (2,170) 37,450 2,235 Series 2009-B 25,865 2031 3.0 - 5.75% 25,865 - (910) 24,955 930 Series 2009-C 4,020 2023 3.0 - 6.0% 4,000 - (30) 3,970 30 Series 2009-D 56,615 2031 2.726-7.759% 53,620 - (945) 52,675 990 Series 2010-A 5,770 2021 3.0 - 5.0% 5,770 - - 5,770 275 Series 2010-B 8,215 2021 2.71 - 6.5% 8,215 - (500) 7,715 640 Series 2010-C 13,520 2025 4.0 - 5.25% - 13,520 (1,210) 12,310 1,005 168,930 13,520 (20,440) 162,010 7,650

Premium on debt issuance 506 33 (452) 87 - Unamortized discount (384) (111) 128 (367) - Unamortized deferred loss on refunding (10,196) (423) 711 (9,908) -

158,856 13,019 (20,053) 151,822 7,650 Tulsa Metropolitan Utility Authority Series 2003 - Refunding 8,890 2019 3.7 - 4.45% 5,800 - (560) 5,240 580 Series 2004 17,695 2025 3.75 - 4.6% 14,070 - (770) 13,300 795 Series 2005 78,720 2026 4.0 - 4.5% 66,870 - (2,900) 63,970 3,015 Series 2007 27,815 2027 4.0 - 4.5% 22,115 - (2,000) 20,115 2,100 Series 2009 21,500 2029 3.0 - 4.75% 20,860 - (665) 20,195 690 Series 2010 14,510 2030 2.0 - 4.0% 14,510 - - 14,510 - Series 2011 24,100 2031 0.375-4.375% - 24,100 24,100 900 144,225 24,100 (6,895) 161,430 8,080

Premium on debt issuance 938 23 (69) 892 - Unamortized deferred loss on refunding (1,049) - 56 (993) -

144,114 24,123 (6,908) 161,329 8,080 Other Component Units Series 2002 - Parking Systems 9,030 2019 4.05 - 4.75% 7,285 - (680) 6,605 705 Series 2003 - Parking Systems 12,315 2029 3.25 - 4.7% 10,580 - (375) 10,205 385 Series 2004 - Parking Systems 5,250 2020 3.0 - 4.25% 3,795 - (320) 3,475 330

21,660 - (1,375) 20,285 1,420

Unamortized deferred loss on refunding (268) - 33 (235) - Unamortized discount (180) - 13 (167) -

21,212 - (1,329) 19,883 1,420

$ 324,182 $ 37,142 $ (28,290) $ 333,034 $ 17,150

47 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 11. LONG-TERM LIABILITIES

Issue Maturity Interest Beginning Ending Due Within Description Amount Date Rate Balance Additions Reductions Balance One Year

PROMISSORY NOTES:

Tulsa Metropolitan Utility Authority Series 1992-A, Sanitary Sewer$ 4,299 2012 0.50%$ 537 $ - $ (215) $ 322 $ 215 Series 1997-A, Sanitary Sewer 4,035 2016 0.50% 1,340 - (206) 1,134 206 Series 1998-B, Sanitary Sewer 4,392 2017 0.50% 1,719 - (229) 1,490 229 Series 1998-C, Sanitary Sewer 8,500 2017 4.95 - 5.145% 4,445 - (465) 3,980 490 Series 2001-B, Sanitary Sewer 4,996 2020 0.50% 2,629 - (263) 2,366 263 Series 2002-D, Sanitary Sewer 6,813 2022 0.50% 4,019 - (349) 3,670 349 Series 2003, Sanitary Sewer 4,310 2012 3.05 - 3.745% 1,515 - (490) 1,025 505 Series 2004-B, Sanitary Sewer 1,560 2023 0.50% 1,080 - (80) 1,000 80 Series 2005-B, Sanitary Sewer 7,900 2027 3.10% 7,082 28 (395) 6,715 395 Series 2005-C, Sanitary Sewer 1,203 2025 0.50% 932 - (60) 872 60 Series 2006-A, Sanitary Sewer 3,130 2028 3.10% 2,496 98 (158) 2,436 157 Series 2006-B, Sanitary Sewer 835 2016 4.90% 534 - (82) 452 86 Series 2006-C, Sanitary Sewer 17,825 2027 3.10% 15,305 1,402 (891) 15,816 891 Series 2006, Sanitary Sewer 52,585 2025 4.15 - 5.145% 46,770 - (2,096) 44,674 2,180 Series 2007-A, Sanitary Sewer 5,131 2026 0.50% 4,342 - (263) 4,079 263 Series 2007-B, Sanitary Sewer 8,365 2026 4.15% 7,605 - (321) 7,284 331 Series 2008-A, Water 1,250 2014 2.03% 53 228 (53) 228 156 Series 2009-A, Sanitary Sewer 11,320 2032 3.22% 2,875 4,570 - 7,445 283 Series 2009-B, Sanitary Sewer 7,350 2032 2.41% - 6,217 (2,000) 4,217 - Series 2009-C, Water 5,225 2032 2.82% - 3,866 (1,586) 2,280 114 Series 2010-A, Sanitary Sewer 27,757 2032 2.39% - 2,274 - 2,274 - Series 2010-B, Sanitary Sewer 32,000 2030 0.645 - 5.145% 29,380 - - 29,380 1,055 Series 2011-B, Sanitary Sewer 14,275 2032 .0545-5.145% - 14,275 - 14,275 - 134,658 32,958 (10,202) 157,414 8,308

Premium on debt issuance-TMUA 1,836 976 (186) 2,626 - Unamortized discount-TMUA (127) 21 - (106) -

$ 136,367 $ 33,955 $ (10,388) $ 159,934 $ 8,308

GENERAL OBLIGATION BONDS:

Tulsa Metropolitan Utility Authority Series 2002-C, Refunding 28,000 2017 4.0-5.0% 14,700 - (2,100) 12,600 2,100 Series 2004-A, Refunding 949 2016 5.0% 475 - (79) 396 79 Series 2004-B, Refunding 1,038 2015 3.25-5.0% 486 - (25) 461 115 Series 2005, Sanitary Sewer 13,219 2025 5.0% 10,430 - (698) 9,732 698 Series 2006, Sanitary Sewer 817 2026 4.0-4.5% 688 - (43) 645 43 Series 2007, Sanitary Sewer 6,757 2027 4.0-4.25% 6,380 - (376) 6,004 376 Series 2008, Sanitary Sewer 8,659 2028 4.0-4.75% 8,202 - (457) 7,745 457 Series 2009, Sanitary Sewer 3,347 2029 2.5-4.25% 3,347 - (178) 3,169 178 Series 2009A Refunding, Sanitary Sewer 5,532 2019 3.0-4.0% 5,532 - (667) 4,865 651 Series 2009B Refunding, Sanitary Sewer 6,340 2021 3.0-5.0% 6,340 - (631) 5,709 619 56,580 - (5,254) 51,326 5,316

Premium on debt issuance-TMUA 1,647 - (283) 1,364 -

$ 58,227 $ - $ (5,537) $ 52,690 $ 5,316

48 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 11. LONG-TERM LIABILITIES

Principal and Interest Payments in Subsequent Years:

Primary Government General Obligation Revenue Bonds Promissory Notes Year Principal Interest Principal Interest Principal Interest

2012$ 27,778 $ 16,451 $ 16,959 $ 6,877 $ 389 $ 31 2013 35,456 15,262 3,065 6,026 407 13 2014 35,342 13,895 4,078 5,812 - - 2015 35,251 12,446 4,342 5,560 - - 2016 34,006 10,934 2,908 5,346 - - 2017-2021 146,238 33,257 15,429 24,024 - - 2022-2026 57,792 10,405 17,992 18,777 - - 2027-2031 14,606 1,007 21,482 12,383 - - 2032-2036 - - 24,330 6,086 - - 2037-2041 - - 10,087 565 - -

$ 386,469 $ 113,657 $ 120,672 $ 91,456 $ 796 $ 44

Component Units General Obligation Revenue Bonds Promissory Notes Year Principal Interest Principal Interest Principal Interest

2012$ 5,316 $ 2,243 $ 17,150 $ 16,299 $ 8,308 $ 5,580 2013 5,289 2,041 18,505 15,770 10,010 5,537 2014 5,263 1,815 19,335 15,084 10,178 5,236 2015 5,239 1,590 21,250 14,334 9,160 4,926 2016 5,104 1,358 21,110 13,474 9,139 4,634 2017-2021 15,338 4,030 99,825 53,754 44,560 18,468 2022-2026 8,013 1,424 90,815 30,711 45,575 9,687 2027-2031 1,764 119 55,735 10,573 19,424 2,405 2032-2036 - - - - 1,060 29

$ 51,326 $ 14,620 $ 343,725 $ 169,999 $ 157,414 $ 56,502

Variable Rate Terms - Interest requirements for variable rate debt are calculated using the interest rate effective at the end of the reporting year. The interest rate is reset semiannually and is based upon the Oklahoma Water Resources Board bond rate plus program costs. The variable rate included in the above requirements is 2.115%, which includes program costs of 1.465% and an interest rate of .65%.

D. APPLICABILITY OF FEDERAL ARBITRAGE REGULATIONS

Debt issuances of the City and various Authorities issued after the Tax Reform Act of 1986 are subject to the federal arbitrage regulations. The arbitrage rebate regulations require that all earnings from the investment of gross proceeds of a bond issue in excess of the amount that could have been earned, had the yield on the investment been equal to the yield on the bonds, be remitted to the federal government. These rules carry strict penalties for noncompliance, including taxability of interest retroactive to the date of the issue. City management believes the City is in compliance with these rules and regulations.

49 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 11. LONG-TERM LIABILITIES

E. DEFEASED DEBT

Certain outstanding general obligation and revenue bonds of the City have been defeased by placing the proceeds of refunding bonds in irrevocable escrow accounts held and managed by bank trustees, and invested in U. S. Treasury obligations, the principal and interest on which would provide amounts sufficient to pay the principal and interest on the defeased bonds in accordance with the schedule of remaining payments due. Accordingly, the escrow accounts and the defeased bonds are not included in the City’s financial statements. The defeased bonds outstanding and considered extinguished are as follows:

Tulsa Airport 1997B Revenue Bonds $22,465

NOTE 12. FUND BALANCES OF GOVERNMENTAL FUNDS

In fiscal year 2011, the City adopted GASB Statement No. 54 “Fund Balance Reporting and Governmental Fund Type Definitions.” This statement establishes criteria for classifying fund balances into specifically defined classifications and clarifies fund balance definitions for governmental fund types. The details for the City’s fund balances are as follows:

Other Total Governmental Governmental General Bond Sales Tax Funds Funds

Fund balances: Nonspendable: Not in spendable form: Advances to other funds$ 1,055 $ - $ - $ - $ 1,055 Legal or contractual constraints - - - - - 1,055 - - - 1,055

Restricted for: Debt service - - - 39,100 39,100 Capital projects - 159,388 118,755 - 278,143 Federal and state grants - - - 2,645 2,645 E-911 operations - - - 2,546 2,546 Economic development - - - 325 325 Tourism and convention - - - 1,087 1,087 Tulsa Stadium district improvements - - - 599 599 Miscellaneous special revenue funds - - - 736 736 - 159,388 118,755 47,038 325,181

Committed: Law enforcement training - - - 74 74 Juvenile crime - - - 20 20 Operation of Air Force Plant 3 facility - - - 987 987 Whittier Square district improvements - - - 54 54 - - - 1,135 1,135

Assigned to: Budgetary resources for subsequent year 13,203 - - - 13,203 Capital projects - - - 3,977 3,977 Public safety body armor 403 - - - 403 MTTA operations 201 - - - 201 13,807 - - 3,977 17,784

Unassigned 52,255 - - (261) 51,994 $ 67,117 $ 159,388 $ 118,755 $ 51,889 $ 397,149

50 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 13. PLEDGED REVENUES

1. Tax Increment Revenues Pledged TPFA - The Authority has pledged future gross revenues derived from the operations of certain golf courses to In March 2006, the City passed an ordinance creating repay approximately $3,460 in recreational facility bonds the Tulsa Hills Increment District, a Tax Increment issued. Proceeds from the bonds refunded existing debt Financing District. In June 2006, the TIA issued its issued for the construction of an 18 hole golf course and Series 2006 Tax Apportionment Bonds in the amount of improvements of a 36 hole golf course owned by the $18,500 to finance improvements within the Tulsa Hills City. The bonds are payable from gross revenue and Increment District. certain payments from the City through November 2012. The City pledged a portion of its future sales tax Annual principal and interest payments on the bonds revenues to repay these bonds. The 2006A bonds are required 22% of gross revenues. The total principal and payable from increased ad valorem tax revenue derived interest remaining to be paid on the bonds is $904. from increased property valuations within the district. Principal and interest paid for the year was $444. Total The 2006B bonds are payable from incremental sales gross revenues were $2,024. tax revenues pledged by the City and generated by TPFA – The Authority has pledged future gross lease increased retail sales in the district. Incremental ad revenues derived from the operation of the Convention valorem tax and sales tax revenues combined were Center facilities, including money received from the City projected to produce a range from 134.3% to 345.7% of pursuant to the lease and other funds, to repay the debt service requirements over the life of the bonds. approximately $23,335 in lease revenue bonds issued. Revenues from ad valorem and sales tax in excess of Proceeds from the bonds provided financing for certain debt service requirements are cross pledged. improvements, additions, and the refunding of existing Principal and interest of $7,400 and $2,020, respectively debt issued to construct the facilities. The bonds are remains on the Series 2006A Ad valorem Tax Increment payable from new and existing leases and other Bonds, payable through January 2017. Principal and revenues and are payable through 2015. The total interest of $9,140 and $4,799 respectively, remains on principal and interest remaining to be paid on the bonds the Series 2006B Sales Tax Increment Bonds, payable is $6,709. Principal and interest paid for the year was through July 2021. Principal payments for the Series $1,691. Total hotel/motel taxes received by the 2006A&B bonds amounted to $940 and $115, Authority for debt service were $1,691. respectively, and interest amounted to $607 and $689, The Authority has pledged future sponsorship and respectively. Total gross revenues were $1,659 from ad naming rights revenues derived from the operation of valorem taxes and $4,356 from sales taxes. the BOK Arena to repay approximately $16,000 in 2. Sales Tax Revenues Pledged capital improvement bonds issued. Proceeds from the bonds provided financing for the acquisition, In May 2006, the City approved the levy of a one percent construction, furnishing and equipping of capital sales tax for the purpose of providing funds for certain improvements and additions to the BOK Arena. The specified capital improvements, and reducing bonds are payable from new and existing sponsorship indebtedness of trust authorities for which the City is and naming rights revenues and are payable through beneficiary made for such capital improvements. In 2027. The total principal and interest remaining to be June 2006, TPFA issued Series 2006A capital paid on the bonds is $21,524. Principal and interest improvement revenue bonds in the amount of $72,965 paid for the year was $1,561. Total gross sponsorship to finance the specified capital improvements. The City and naming rights revenues were $2,140. pledged a portion of its future sales tax revenues to repay these bonds through June 2012. Principal and TST – The TST has pledged future gross revenues interest payments during the year were $14,766. Total derived from operations of the baseball stadium and principal and interest remaining to be paid total $14,831. related facilities to repay approximately $24,711 in Total sales tax revenues related to the levy were revenue bonds issued. Proceeds from the bonds $66,472. provided financing for construction of the baseball stadium and related facilities. The bonds are payable 3. Revenues Pledged in Connection with Proprietary from gross revenues along with property tax Fund Debt assessments of the Tulsa Stadium Improvement District TPFA – The Authority has pledged future gross lease received from the City and are payable through 2035. revenues derived from the operation of the OTC facility, Annual principal and interest payments on the bonds including money received from the City pursuant to the required 64% of total gross revenues. The total principal lease and other funds, to repay approximately $67,750 and interest remaining to be paid on the bonds is in revenue bonds issued. Proceeds from the bonds $37,849. Principal and interest required to be paid for provided financing for the acquisition and improvement the year was $1,466 exclusive of any additional amounts of the facilities. The bonds are payable from new and paid. Total gross revenues were $270 and property tax existing leases and other revenues and are payable assessments received from the City were $2,015. through 2038. Annual principal and interest payments on the bonds required 38% of gross revenues. The total principal and interest remaining to be paid on the bonds is $130,310. Principal and interest paid on the bonds amounted to $3,734. Total gross revenues were $7,524.

51 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 13. PLEDGED REVENUES

4. Revenues Pledged in Connection with Component derived from the operation of the Airports to repay Unit Debt approximately $187,710 in revenue bonds issued. Proceeds from the bonds provided financing for various TMUA - The TMUA has pledged future water and airport capital projects and debt refundings. The bonds wastewater customer revenues, net of specified are payable solely from gross revenues and are payable operating expenses, to repay $198,347 and $225,961 in through 2031. Annual principal and interest payments water and wastewater system revenue bonds issued, on the bonds required 38% of gross revenues. The total respectively. Proceeds from the bonds provided principal and interest remaining to be paid on the bonds financing for the construction of various water and is $262,498. Principal and interest paid for the year was wastewater capital projects. The bonds are payable $17,220, exclusive of the debt refunding. Total gross solely from water and wastewater customer net revenues were $45,917. revenues and are payable through 2032. Annual principal and interest payments on the bonds required TPA - The TPA has pledged future gross revenues 15% and 17% of water and wastewater gross revenues, derived from the operation of the parking facilities to respectively. The total principal and interest remaining repay approximately $26,595 in revenue bonds issued. to be paid on the bonds is $227,453 and $210,682 for Proceeds from the bonds provided financing for various water and wastewater, respectively. Combined principal parking facilities and debt refundings. The bonds are and interest paid for the year were $12,919 and payable solely from gross revenues and are payable $11,524, for water and wastewater respectively. Total through 2029. Annual principal and interest payments customer net revenues were $26,483 and $21,668, on the bonds required 39% of gross revenues. The total respectively. principal and interest remaining to be paid on the bonds is $27,006. Principal and interest paid for the year was Airport - The TAIT has pledged future gross revenues $2,280. Total gross revenues were $5,860.

NOTE 14. LEASE COMMITMENTS

Operating Leases subject to annual appropriations. Lease expenditures were $833 for all types of leases for the primary The City has entered into a number of operating leases. government and $353 for its component units. These leases contain cancellation provisions and are

NOTE 15. CONTINGENT LIABILITIES

Police Probe - The City is a named defendant in The Office of the Inspector General of the U.S. multiple civil cases arising from a prior grand jury Department of Transportation was asked to perform a investigation which charged six former or current review of certain issues at the Authority, and which police officers and a former federal agent in a later included the financial support of GPA. In May corruption probe. Charges include allegations that the 2004, the Inspector General noted improprieties with officers stole drug money, falsified reports, planted the Support Agreement and notified the Federal drugs, committed perjury and violated civil rights. Aviation Administration (FAA). The FAA advised TAIT that airport funds were not to be used to subsidize Twenty-one individuals, two of which were serving life airlines and that should TAIT purchase the property sentences, were freed from prison or their conviction under the or case was dismissed because of the grand jury Support Agreement, it would constitute a direct investigation. subsidy to the airline in violation of FAA policy.

The civil cases named the City as defendant, among In October 2004, TIA (at the direction of BOK) filed suit other named defendants. At this time, we are unable against TAIT and its former legal counsel. The City to form an opinion as to the outcome of this litigation. was included in the litigation and the matter was settled between the City, BOK and the Airport Airport – Great Plains Airline: In December 2000, the Trustees in June, 2008. The settlement in the case Tulsa Airports Improvement Trust (“TAIT”) entered into was pursuant to a Settlement Agreement approved by a Support (Contingent Purchase and Sale) Agreement the District Court. with the Tulsa Industrial Authority (TIA) and Bank of Oklahoma (BOK) as part of a $30 million loan On July 8, 2008 the City received a taxpayers’ Qui transaction involving the City of Tulsa, TIA, Great Tam Demand challenging the legality of the Plains Airlines (GPA), and BOK. The Support settlement. In response, and according to the terms of Agreement included a provision that upon the the Settlement Agreement, the Mayor and City filed a occurrence of a trigger event (as defined by the loans), Declaratory Judgment action in Tulsa County District BOK could direct TIA to sell the property to TAIT for Court on July 14, 2008, seeking a judicial declaration the amount of any existing indebtedness on the loan to that their actions in executing the Settlement GPA. GPA declared bankruptcy in January 2004.

52 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands)

NOTE 15. CONTINGENT LIABILITIES

Agreement and transferring the Settlement Payment financial condition of the City government. Resulting were authorized by Oklahoma law. In October 2011 judgments, if any, will likely be paid from ad valorem the State Supreme court ruled in favor of the Qui Tam taxes to be received over a three year period. reinstating the TIA/BOK litigation (originally filed in October, 2004) against the Trust. Federal Grants: In the normal course of operations, the City receives grant funds from various federal and Other Litigation: The City is a party to numerous legal state agencies. The grant programs are subject to proceedings, many of which normally occur in audit by agents of the granting authority, the purpose governmental operations. Such litigation includes, but of which is to insure compliance with conditions is not limited to, claims assessed against the City for precedent to the granting of funds. Any liability for property damages and personal injury, employment reimbursement which may arise as the result of audits related matters, civil rights matters, alleged breaches of grant funds is not believed to be material. of contract, condemnation proceedings and other alleged violations of city, state and federal laws. Although the aggregated claims are material and the outcome of each claim is not presently determinable, Management believes that the resolution of these matters will not have a material adverse effect on the

NOTE 16. COMMITMENTS

Encumbrances - Encumbrance balances in governmental funds at June 30, 2011 are as follows:

General Fund$ 6,809 Sales Tax Fund 31,363 Bond Fund 22,667 Aggregate nonmajor funds 7,325 $ 60,839

NOTE 17. SUBSEQUENT EVENTS

The City has evaluated events or transactions that General Obligation Bonds: occurred subsequent to June 30, 2011 through December 13, 2011, the date these financial statements On November 3, 2011, the City sold its General were available to be issued, for potential recognition or Obligation Bonds Series 2011 dated December 1, 2011, disclosure in these financial statements. in the amount of $50,000. The proceeds will provide funds for the purposes of financing a portion of the costs for streets, bridges and fire support projects for the City of Tulsa.

53 CITY OF TULSA NOTES TO BASIC FINANCIAL STATEMENTS June 30, 2011 (dollar amounts expressed in thousands) NOTE 18. FUTURE CHANGES IN ACCOUNTING PRONOUNCEMENTS

The following GASB pronouncements have been issued, but which we have not yet adopted and are not disclosed in the financial statements since the new standards are not expected to have a significant impact on the City’s financial statements:

GASB Statement No. 57 – OPEB Measurements by outflows of resources, liabilities deferred inflows of Agent Employers and Agent Multiple-Employer Plans, resources and net position (which is the net residual issued January 2010, will be effective beginning with amount of the other elements). The Statement its year ending June 30, 2012. This Statement requires that deferred outflows of resources and addresses issues related to measurement of OPEB deferred inflows of resources be reported separately obligations by certain employers participating in agent from assets and liabilities. This Statement also multiple-employer OPEB plans. GASB 57 amends amends certain provisions of Statement No. 34, Basic GASB Statement NO. 43, Financial Reporting for Financial Statements-and Management’s Discussion Postemployment Benefit Plans Other Than Pension and Analysis-for State and Local Governments, and Plans, and GASB Statement No. 45, Accounting and related pronouncements to reflect the residual Financial Reporting by Employers for measure in the statement of financial position as net Postemployment Benefits Other Than Pensions. position, rather than net assets.

GASB Statement No. 60 - Accounting and Financial GASB Statement No. 64 – Derivative Instruments: Reporting for Service Concession Arrangements, Application of Hedge Accounting Termination issued November 2010, will be effective beginning Provisions (an Amendment of GASB Statement No. with its year ending June 30, 2013. This Statement is 53), issued July 2011, will be effective beginning with intended to improve financial reporting by addressing its year ending June 30, 2012. This Statement issues related to service concession arrangements clarifies that when certain conditions are met, the use (SCAs), which are a type of public-private or public- of hedge accounting should not be terminated. Those public partnership. Specifically, this Statement conditions are: (a) the collectability of swap payments improves financial reporting by establishing is considered to be probable, (b) the replacement of recognition, measurement and disclosure the counterparty or credit support provider meets the requirements SCAs for both transferors and criteria of an assignment or in-substance assignment governmental operators, requiring governments to as described in the Statement, and (c) the account for and report SCAs in the same manner, counterparty or counterparty credit support provider which improves the comparability of financial (an not the government) has committed the act of statements. This Statement also improves the default or termination event. When all of these decision usefulness of financial reporting by requiring conditions exist, the GASB believes that the hedging that specific relevant disclosures be made by relationship continues and hedge accounting should transferors and governmental operators about SCAs. continue to be applied.

GASB Statement No. 63 – Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, issued July 2011, will be effective beginning with its year ending June 30, 2013. This Statement is intended to improve financial reporting by providing citizens and other users of state and local government financial reports with information about how past transactions will continue to impact a government’s financial statements in the future. This Statement provides a new statement of net position format to report all assets, deferred

54 CITY OF TULSA REQUIRED SUPPLEMENTARY INFORMATION DEFINED BENEFIT PENSION TRUST June 30, 2011 (dollars amounts expressed in thousands)

SCHEDULE OF FUNDING PROGRESS

1/1/11$ 372,469 $ 484,698 $ 112,229 76.8%$ 101,690 110.4% 1/1/10 365,775 457,233 91,458 80.0% 108,423 84.4% 1/1/09 359,191 437,504 78,313 82.1% 111,170 70.4% 1/1/08 392,428 412,704 20,276 95.1% 107,574 18.8% 1/1/07 370,778 384,173 13,395 96.5% 103,358 13.0% 1/1/06 347,721 347,121 (600) 100.2% 95,804 (0.6)%

SCHEDULE OF EMPLOYER CONTRIBUTIONS

Annual Required Percentage Year Contribution Contributed

2011 $ 9,783 72% 2010 9,747 72% 2009 7,004 100% 2008 6,777 100% 2007 6,512 100% 2006 6,036 100%

SCHEDULE OF ACTUARIAL VALUATION, METHODS AND ASSUMPTIONS

55 CITY OF TULSA REQUIRED SUPPLEMENTARY INFORMATION OTHER POST-EMPLOYMENT BENEFITS June 30, 2011 (dollars amounts expressed in thousands)

SCHEDULE OF FUNDING PROGRESS

7/1/10$ - $ 34,166 $ 34,166 0.0%$ 102,941 33.2% 7/1/09 - 33,852 33,852 0.0% 134,178 25.2% 7/1/08 - 33,036 33,036 0.0% 103,825 31.8%

SCHEDULE OF ACTUARIAL VALUATION, METHODS AND ASSUMPTIONS

Valuation date July 1, 2010 Actuarial cost method Entry Age Amortization method Level dollar Remaining amortization periods 30 years open Discount rate 4.0% Initial annual healthcare cost trend rate 8.0% Annual reduction of healthcare cost trend rate 0.5% Ultimate annual healthcare cost trend rate 5.0%

56 APPENDIX B

ADDITIONAL DEMOGRAPHIC AND ECONOMIC INFORMATION REGARDING THE CITY OF TULSA, OKLAHOMA (UNAUDITED)

C-1 CITY OF TULSA NET ASSETS BY COMPONENT Last Ten Years (accrual basis of accounting) (amounts expressed in thousands)

2011 2010 2009* 2008 2007 2006 2005 2004 2003 2002 Governmental activities Invested in capital assets, net of related debt$ 989,918 $ 967,462 $ 951,466 $ 952,282 $ 1,032,890 $ 941,096 $ 850,368 $ 847,135 $ 824,532 $ 870,763 Restricted 160,049 121,161 132,695 148,553 123,475 153,941 204,727 162,724 164,689 114,394 Unrestricted 66,260 53,012 38,170 5,168 33,889 29,628 30,720 31,590 26,799 32,916 $ 1,216,227 $ 1,141,635 $ 1,122,331 $ 1,106,003 $ 1,190,254 $ 1,124,665 $ 1,085,815 $ 1,041,449 $ 1,016,020 $ 1,018,073

Business-type activities Invested in capital assets, net of related debt 541,280 516,148 498,405 457,012 257,841 247,242 243,070 238,150 229,908 221,155 Restricted 8,936 11,185 9,482 13,582 9,528 7,806 7,154 7,017 6,002 6,539 Unrestricted 16,471 12,073 14,881 9,033 4,526 4,346 5,077 5,837 6,061 3,909 $ 566,687 $ 539,406 $ 522,768 $ 479,627 $ 271,895 $ 259,394 $ 255,301 $ 251,004 $ 241,971 $ 231,603 83 Primary government Invested in capital assets, net of related debt 1,531,198 1,483,610 1,449,871 1,409,294 1,290,731 1,188,338 1,093,438 1,085,285 1,054,440 1,091,918 Restricted 168,985 132,346 142,177 162,135 133,003 161,747 211,881 169,741 170,691 120,933 Unrestricted 82,731 65,085 53,051 14,201 38,415 33,974 35,797 37,427 32,860 36,825 $ 1,782,914 $ 1,681,041 $ 1,645,099 $ 1,585,630 $ 1,462,149 $ 1,384,059 $ 1,341,116 $ 1,292,453 $ 1,257,991 $ 1,249,676

* The June 30, 2009 governmental activities and business-type activities were restated $43,441 and $3,011 respectively to correct errors in capital asset depreciation. This schedule does not reflect these changes prior to 2009. CITY OF TULSA CHANGES IN NET ASSETS Last Ten Years (accrual basis of accounting) (amounts expressedin thousands)

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 Expenses: Governmental activities: Administrative and support$ 28,756 $ 34,010 $ 29,132 $ 34,165 $ 33,430 $ 34,029 $ 27,445 $ 24,647 $ 24,322 $ 37,225 Public safety and protection 193,869 184,640 196,987 205,923 177,351 173,514 154,604 156,900 164,972 161,417 Public works and transportation 58,636 83,295 87,318 90,855 116,374 84,817 76,775 73,192 78,477 81,241 Culture and recreation 15,812 17,749 21,752 25,460 27,841 24,148 24,346 22,130 25,383 27,844 Social and economic 21,894 31,310 28,325 28,346 25,776 22,023 25,410 23,889 23,296 18,319 Interest on long-term debt 12,624 10,910 12,560 14,134 11,046 8,765 8,076 9,372 11,028 11,021 Total governmental activities expenses 331,591 361,914 376,074 398,883 391,818 347,296 316,656 310,130 327,478 337,067 Business-type activities: Stormwater 26,050 24,859 23,743 21,646 19,862 17,575 16,556 14,078 13,084 14,392 One Technology Center 9,884 9,431 9,993 6,527 ------Arena & Convention 22,480 22,182 17,434 6,044 ------Tulsa Stadium Trust 3,768 ------Golf Courses 3,316 3,503 3,615 3,233 2,470 2,599 2,591 2,573 2,572 2,802 Total business-type activities 65,498 59,975 54,785 37,450 22,332 20,174 19,147 16,651 15,656 17,194 Total primary government 397,089 421,889 430,859 436,333 414,150 367,470 335,803 326,781 343,134 354,261 Program Revenues: Governmental activities: Charges for services Administrative and support 5,501 4,200 4,960 4,807 9,314 11,828 10,050 9,398 8,974 9,151 Public safety and protection 16,815 20,289 22,674 25,090 18,275 8,233 9,880 10,689 10,195 10,599 Public works and transportation 34,574 30,853 35,311 33,839 28,619 27,288 26,455 22,932 22,315 21,349 Culture and recreation 4,887 5,638 3,797 3,903 4,545 4,355 4,188 3,741 4,225 3,976 Social and economic 543 530 1,375 2,246 3,228 3,001 1,838 3,583 2,165 3,359 Operating grants and contributions 13,609 32,262 25,944 39,700 33,172 41,077 25,951 37,453 40,347 36,077 Capital grants and contributions 9,924 12,185 11,560 24,891 57,665 25,802 28,854 11,247 7,175 11,977 Total governmental activities program revenues 85,853 105,957 105,621 134,476 154,818 121,584 107,216 99,043 95,396 96,488 Business-type activities: 84 Charges for services Stormwater 23,231 22,007 21,424 19,296 17,742 14,651 14,286 13,505 12,833 12,651 One Technology Center 8,560 6,637 5,787 2,478 ------Arena & Convention 12,300 12,130 10,281 1,128 ------Tulsa Stadium Trust 163 ------Golf Courses 2,024 2,733 2,713 1,683 1,084 1,221 1,392 1,401 1,456 1,635 Operating grants and contributions - 79 ------Capital grants and contributions 3,319 10,735 36,839 113,759 11,082 6,211 - 2,342 2,063 4,786 Total business-type activities program revenues 49,597 54,321 77,044 138,344 29,908 22,083 15,678 17,248 16,352 19,072 Total primary government program revenues$ 135,450 $ 160,278 $ 182,665 $ 272,820 $ 184,726 $ 143,667 $ 122,894 $ 116,291 $ 111,748 $ 115,560 Net (expense) revenue: Governmental activities (245,738) (255,957) (270,453) (264,407) (236,999) (225,712) (209,440) (211,087) (232,082) (240,579) Business-type activities (15,901) (5,654) 22,259 100,894 7,576 1,909 (3,469) 597 696 1,878 Total primary government net expense$ (261,639) $ (261,611) $ (248,194) $ (163,513) $ (229,423) $ (223,803) $ (212,909) $ (210,490) $ (231,386) $ (238,701) General Revenues and Other Changes in Net Assets: Taxes Sales tax 199,384 193,505 207,289 210,633 201,717 192,261 182,136 177,732 176,510 184,004 Property tax 49,315 41,989 39,090 34,475 29,182 22,501 19,594 18,581 17,475 16,168 Franchise tax 27,225 26,144 25,871 23,211 22,213 22,064 22,753 22,661 21,817 22,012 Use tax 17,927 15,622 18,422 18,501 18,346 16,480 14,765 13,464 11,416 11,655 Hotel / motel tax 5,683 5,821 6,327 6,819 6,134 5,508 5,032 4,880 4,302 4,886 Unrestricted grants and contributions 22,667 2,508 8,857 8,112 8,122 7,685 5,446 4,553 4,740 4,802 Payments from component units 76 13 1,808 2,008 181 229 2,081 521 667 1,466 Investment earnings 7,513 9,566 19,570 24,151 18,971 4,927 4,060 282 11,821 16,201 Miscellaneous 2,490 - 3,788 5,246 2,014 1,011 1,178 2,182 1,537 898 Transfers (11,950) 1,705 (22,248) (105,851) (4,292) (8,103) (7,387) (8,340) (9,499) (6,824) Capital contributions ------Total governmental activities 320,330 296,873 308,774 227,305 302,588 264,563 249,658 236,516 240,786 255,268 Business-type activities: Investment earnings and other 611 680 1,290 1,209 633 292 379 96 467 510 Transfers & capital contributions 11,950 21,612 22,248 105,851 4,292 1,892 7,387 8,340 9,499 6,824 Total business-type activities 12,561 22,292 23,538 107,060 4,925 2,184 7,766 8,436 9,966 7,334 Total primary government$ 332,891 $ 319,165 $ 332,312 $ 334,365 $ 307,513 $ 266,747 $ 257,424 $ 244,952 $ 250,752 $ 262,602 Changes in Net Assets: Governmental activities 74,592 40,916 38,321 (37,102) 65,589 38,851 40,218 25,429 8,704 14,689 Business-type activities (3,340) 16,638 45,797 207,954 12,501 4,093 4,297 9,033 10,662 9,212 Total primary government$ 71,252 $ 57,554 $ 84,118 $ 170,852 $ 78,090 $ 42,944 $ 44,515 $ 34,462 $ 19,366 $ 23,901 CITY OF TULSA GOVERNMENTAL ACTIVITIES - TAX REVENUES BY SOURCE Last Ten Years (accrual basis of accounting) (amounts expressed in thousands)

Property Franchise Hotel / Year Sales Tax Tax Tax Use Tax Motel Tax Total 2011$ 199,384 $ 49,315 $ 27,225 $ 17,927 $ 5,683 $ 299,534 2010 193,505 41,989 26,144 15,622 5,821 283,081 2009 207,289 39,090 25,871 18,422 6,327 296,999 2008 210,633 34,475 23,211 18,501 6,819 293,639 85 2007 201,717 29,182 22,213 18,346 6,134 277,592 2006 192,261 22,064 22,501 16,480 5,508 258,814 2005 182,136 22,753 19,594 14,765 5,032 244,280 2004 177,732 22,661 18,581 13,464 4,880 237,318 2003 176,520 21,817 17,475 11,416 4,302 231,530 2002 184,004 22,012 16,168 11,655 4,886 238,725 CITY OF TULSA PROGRAM REVENUE BY FUNCTION / PROGRAM Last Ten Years (accrual basis of accounting) (amounts expressed in thousands)

Function/Program: 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 Governmental activities: Administrative and support$ 5,501 $ 4,933 $ 5,204 $ 4,829 $ 9,314 $ 11,828 $ 10,050 $ 9,398 $ 8,974 $ 9,151 Public safety and protection 23,104 37,973 39,454 49,018 37,459 35,254 17,616 31,962 32,018 31,209 Public works and transportation 40,628 41,823 45,800 63,128 83,896 52,097 54,937 34,560 31,273 33,475 Culture and recreation 5,122 5,960 3,801 3,943 4,545 4,355 4,205 3,765 4,225 4,060 Social and economic 11,498 15,268 11,362 13,558 19,604 18,050 20,408 19,358 18,906 18,593 Total governmental activities 85,853 105,957 105,621 134,476 154,818 121,584 107,216 99,043 95,396 96,488 Business-type activities: Stormwater 24,824 25,078 33,057 20,657 17,742 14,651 14,286 15,847 14,815 17,437 One Technology Center 8,560 6,637 5,787 2,478 ------

86 Arena & Convention 12,856 19,871 35,487 113,526 ------Tulsa Stadium Trust a 918 ------Tulsa Golf Courses 2,439 2,735 2,713 1,683 1,084 1,221 1,392 1,401 1,537 1,635 Total business-type activities 49,597 54,321 77,044 138,344 18,826 15,872 15,678 17,248 16,352 19,072 Total primary government$ 135,450 $ 160,278 $ 182,665 $ 272,820 $ 173,644 $ 137,456 $ 122,894 $ 116,291 $ 111,748 $ 115,560

a Prior to 2011 and the adoption of GASB 61, The Financial Reporting Entity, Omnibus , the Tulsa Stadium Trust was reported as a discretely presented component unit of the City. CITY OF TULSA FUND BALANCES OF GOVERNMENTAL FUNDS June 30, 2011 (modified accrual basis of accounting) (amounts expressed in thousands)

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 General Fund: General Fund: Nonspendable$ 1,055 Reserved $7,730 $8,876 $13,273 $9,668 $8,831 $10,659 $10,871 $10,930 $10,344 Restricted - Unreserved 47,045 41,647 37,759 43,778 38,665 32,809 35,294 30,076 40,652 Committed - $54,775 $50,523 $51,032 $53,446 $47,496 $43,468 $46,165 $41,006 $50,996 Assigned 13,807 Unassigned 52,255 $ 67,117

Other Governmental Funds: Other Governmental Funds: Nonspendable - Reserved 229,880 224,633 221,997 229,496 206,626 182,231 141,698 145,341 167,317 Restricted 325,181 Unreserved Committed 1,135 Special revenue funds 15,572 9,552 9,412 12,842 10,294 12,959 11,481 12,950 8,875 87 Assigned 3,977 Debt service funds 12,412 4,014 3,948 3,439 2,733 5,650 5,665 3,919 4,897 Unassigned (261) Capital projects funds 1,966 1,692 1,095 832 358 5,895 5,964 4,735 5,081 $ 330,032 $ 259,830 $ 239,891 $ 236,452 $ 246,609 $ 220,011 $ 206,735 $ 164,808 $ 166,945 $ 186,170

Note: GASB Statement No. 54 changed the reporting of fund balances by establishing fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. The City adopted GASB Statement No. 54 for the year ending June 30, 2011. Accordingly, information for prior years is unavailable. CITY OF TULSA CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS Last Ten Years (modified accrual basis of accounting) (amounts expressed in thousands)

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 Revenues Sales tax$ 199,384 $ 193,505 $ 207,289 $ 210,633 $ 201,716 $ 192,261 $ 182,136 $ 177,732 $ 176,520 $ 184,004 Property tax 44,690 34,457 33,287 30,838 22,213 19,047 18,511 21,276 20,503 19,364 Franchise tax 27,225 26,144 25,871 23,211 26,322 22,501 19,594 18,581 17,475 16,168 Use tax 17,927 15,622 18,422 18,501 18,346 16,480 14,765 13,464 11,416 11,655 Hotel/motel tax 5,683 5,821 6,327 6,819 6,134 5,508 5,032 4,880 4,302 4,886 Special assessment tax 3,169 3,275 855 910 869 795 530 539 539 541 Charges for services 35,918 40,385 42,353 39,554 35,123 33,723 32,386 29,129 29,109 27,764 Intergovernmental revenues 42,261 51,776 50,761 71,134 98,539 65,972 54,805 48,644 47,339 47,223 Fines and forfeitures 10,875 8,257 8,763 12,001 10,350 8,957 8,424 8,341 7,924 8,628 Investment income 6,140 8,663 12,913 18,911 15,279 6,638 5,780 988 9,524 11,339 Licenses, permits and fees 5,922 5,175 6,191 6,745 5,823 5,979 5,625 4,970 4,922 4,703 Program income from grants 440 530 793 1,606 3,228 2,421 1,267 2,979 1,557 2,818 Payments from component units 57 13 1,808 2,008 181 229 2,081 521 667 1,466 Miscellaneous 2,492 2,794 3,787 5,935 2,664 2,080 1,523 1,786 1,899 2,087 Total revenues 402,183 396,417 419,420 448,806 446,787 382,591 352,459 333,830 333,696 342,646

Expenditures Current: Administration and support 21,638 20,819 20,826 19,781 17,376 16,988 14,947 14,064 14,661 24,516 Public safety and protection 171,552 174,401 188,475 193,595 174,293 169,218 143,780 146,794 151,019 141,659

88 Public works and transportation 31,557 31,412 32,174 35,064 30,072 26,855 27,060 23,146 26,154 27,180 Culture and recreation 14,385 15,362 19,473 22,753 25,385 23,631 22,535 20,937 22,190 24,012 Social and economic development 20,215 28,991 25,611 26,897 25,259 21,465 24,744 23,804 23,214 18,079 Refund of sales and use taxes ------376 1,921 8,218 - Payments to component units 10,354 16,535 23,480 21,970 31,899 9,675 12,052 13,106 14,820 18,863 Capital outlay 79,680 105,904 102,681 122,328 142,399 93,566 74,665 57,139 75,136 91,206 Debt service: Principal 24,581 18,860 17,354 20,481 17,392 16,114 12,703 13,969 8,531 10,248 Interest 15,887 14,433 12,251 10,172 7,436 7,436 6,148 6,814 7,332 6,892 Total expenditures 389,849 426,717 442,325 473,041 471,511 384,948 339,010 321,694 351,275 362,655

Excess (deficiency) of revenues over (under) expenditures 12,334 (30,300) (22,905) (24,235) (24,724) (2,357) 13,449 12,136 (17,579) (20,009)

Other financing sources (uses) Transfers in 3,941 25,758 12,761 13,590 20,083 17,262 10,108 11,777 15,779 14,166 Transfers out (16,565) (47,650) (35,395) (37,777) (29,163) (21,177) (21,083) (22,784) (26,993) (22,736) Sale of capital assets 1,691 821 ------Bond issuance 70,000 70,000 48,453 35,851 65,934 (6,211) 36,781 - - 40,675 Refunding bond issuance 21,546 23,558 - - - 30,183 12,917 28,021 12,339 10,658 Premium on refunding bonds issuance 11,143 12,017 16 - 418 - 2,652 2,758 - - Payment to bond escrow agent (21,546) (30,013) - - - 229 (16,419) (28,886) (12,761) (13,765) Total other financing sources (uses) 70,210 54,491 25,835 11,664 57,272 20,286 24,956 (9,114) (11,636) 28,998

Net changes in fund balances 82,544 24,191 2,930 (12,571) 32,548 17,929 38,405 3,022 (29,215) 8,989 Fund balance, beginning 314,605 290,414 287,484 300,055 268,132 250,203 210,973 207,951 237,166 228,177 Cumulative effect of change in acctg. principle - - - - (625) - 825 - - - Fund balance, ending$ 397,149 $ 314,605 $ 290,414 $ 287,484 $ 300,055 $ 268,132 $ 250,203 $ 210,973 $ 207,951 $ 237,166

Debt service as a percentage of noncapital expenditures 12.86% 10.38% 8.72% 8.74% 7.54% 8.08% 7.13% 7.86% 5.74% 6.31% CITY OF TULSA GENERAL GOVERNMENTAL TAX REVENUES BY SOURCE Last Ten Years (modified accrual basis of accounting) (amounts expressed in thousands)

Property Franchise Hotel/Motel Year Sales Tax Tax Tax Use Tax Tax Total 2011$ 199,384 $ 44,690 $ 27,225 $ 17,927 $ 5,683 $ 294,909 2010 193,505 34,457 26,144 15,622 5,821 275,549 2009 207,289 33,287 25,871 18,422 6,327 291,196 2008 208,435 33,287 23,999 18,348 6,807 290,876 2007 201,716 26,322 22,213 18,346 6,134 274,731

89 2006 192,261 19,047 22,501 16,480 5,508 255,797 2005 182,136 18,511 19,594 14,765 5,032 240,038 2004 177,732 21,276 18,581 13,464 4,880 235,933 2003 176,520 20,503 17,475 11,416 4,302 230,216 2002 184,004 19,364 16,168 11,655 4,886 236,077 CITY OF TULSA PRINCIPAL SALES TAX REMITTERS (amounts expressed in thousands) June 30, 2011

2011 2010

SIC Amount Revenue Percentage of Total SIC Amount Revenue Percentage of Total Code Sales Tax Remitter Remitted Base Revenue Base Code Sales Tax Remitter Remitted Base Revenue Base 53 General Merchandise Stores $32,866 $1,095,533 16.44% 53 General Merchandise Stores $32,648 $1,088,282 16.74% 58 Eating and Drinking Places 25,132 837,733 12.57% 57 Furniture & Home Furnishings Stores 24,829 827,622 12.73% 59 Miscellaneous Retail 20,966 698,867 10.49% 59 Miscellaneous Retail 22,857 761,898 11.72% 49 Electric, Gas, & Sanitary Services 15,497 516,567 7.75% 54 Food Stores 16,721 557,380 8.58% 57 Furniture & Home Furnishings Store 14,930 497,667 7.47% 58 Eating And Drinking Places 14,549 484,962 7.46% 54 Food Stores 14,538 484,600 7.27% 50 Wholesale Trade-Durable Goods 14,293 476,439 7.33% 52 Building Materials & Garden Supplies 11,617 387,233 5.81% 49 Electric, Gas, And Sanitary Services 13,873 462,439 7.12% 50 Wholesale Trade-Durable Goods 10,447 348,233 5.23% 48 Communication 11,864 395,472 6.08% 56 Apparel And Accessory Stores 9,888 329,600 4.95% 52 Building Materials & Garden Supplies 10,050 335,000 5.15% 48 Communication 8,806 293,533 4.40% 56 Apparel And Accessory Stores 9,854 328,451 5.05%

$164,687 $5,489,567 82.38% $171,538 $5,717,945 87.96% 90

Sources: Oklahoma Tax Commission CITY OF TULSA DIRECT AND OVERLAPPING SALES TAX RATES Last Ten Years

City of Tulsa State of Year Tulsa County Oklahoma 2011 3.017% 1.000% 4.500% 2010 3.000% 1.017% 4.500% 2009 3.000% 1.017% 4.500% 2008 3.000% 1.017% 4.500% 2007 3.000% 1.017% 4.500% 91 2006 3.000% 1.017% 4.500% 2005 3.000% 1.017% 4.500% 2004 3.000% 1.017% 4.500% 2003 3.000% 0.417% 4.500% 2002 3.000% 0.417% 4.500%

Source: City of Tulsa CITY OF TULSA ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY Last Ten Years (amounts expressed in thousands)

Real Property Personal Property Public Service Property TOTAL Estimated Net Tax Rate Estimated Net Tax Rate Estimated Net Tax Rate Estimated Net Tax Rate Assessed to Actual Assessed Per Actual Assessed Per Actual Assessed Per Actual Assessed Per Estimated Year Value Value $1,000 Value Value $1,000 Value Value $1,000 Value Value $1,000 Actual Value 2011$ 22,980,865 $ 2,528,148 13.71$ 3,836,900 $ 383,690 2.08$ 687,020 $ 218,335 1.18$ 27,504,785 $ 3,130,173 16.98 11.4% 2010 22,455,554 2,470,358 11.35 3,991,610 399,161 1.83 658,738 209,347 0.96 27,105,902 3,078,866 14.15 11.4% 2009 21,699,539 2,387,188 11.36 3,857,010 385,701 1.84 585,925 186,207 0.89 26,142,474 2,959,096 14.08 11.3% 2008 20,631,446 2,269,686 13.48 3,617,470 361,747 13.48 608,046 193,237 13.48 24,856,962 2,824,670 13.48 11.4% 2007 19,558,898 2,151,694 12.67 3,504,620 350,462 12.67 679,072 215,809 12.67 23,742,590 2,717,965 12.67 11.4% 2006 18,733,445 2,060,885 9.97 3,149,020 314,902 9.97 700,230 222,533 9.97 22,582,695 2,598,320 9.97 11.5% 2005 17,739,317 1,951,520 10.11 3,241,550 324,155 10.11 743,191 236,186 10.11 21,724,058 2,511,861 10.11 11.6% 2004 16,987,974 1,868,864 11.16 3,304,960 330,496 11.16 824,519 262,032 11.16 21,117,453 2,461,392 11.16 11.7% 2003 16,249,020 1,787,571 11.23 3,395,050 339,505 11.23 1,002,196 318,498 11.23 20,646,266 2,445,574 11.23 11.8% 2002 15,596,877 1,715,828 11.53 3,365,870 336,587 11.53 946,379 207,257 11.53 19,909,126 2,259,672 11.53 11.3% 92

Source: Tulsa County Assessor CITY OF TULSA PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS (Per $1,000 of Net Assessed Valuation) Last Ten Years (amounts expressed in thousands)

DIRECT OVERLAPPING General Sinking County County Year Fund Fund City Schools County Library Health Total 2011$ - $ 16.98 $ 16.98 $ 88.44 $ 10.31 $ 5.32 $ 2.58 $ 123.63 2010 - 14.15 14.15 89.49 10.31 5.32 2.58 121.85 2009 - 14.08 14.08 88.31 10.31 5.32 2.58 120.60 2008 - 13.48 13.48 88.31 10.31 5.32 2.58 120.00 93 2007 - 12.67 12.67 87.47 10.31 5.32 2.58 118.35 2006 - 9.97 9.97 89.16 10.69 5.32 2.58 117.72 2005 - 10.11 10.11 89.45 10.71 5.32 2.58 118.17 2004 - 11.16 11.16 91.40 10.99 5.32 2.58 121.45 2003 - 11.23 11.23 89.18 11.93 5.32 2.58 120.24 2002 - 11.53 11.53 88.85 12.41 5.32 2.58 120.69

Source: Tulsa County Assessor CITY OF TULSA PROPERTY TAX LEVIES AND COLLECTIONS Last Ten Years (amounts expressed in thousands)

94 2006 25,893 24,799 95.8% 6,260 24.2% 760 25,559 98.7% 2005 25,386 24,163 95.2% 5,926 23.3% 783 24,946 98.3% 2004 27,467 26,184 95.3% 5,769 21.0% 1,000 27,184 99.0% 2003 27,460 25,997 94.7% 5,486 20.0% 739 26,736 97.4% 2002 26,061 26,202 100.5% 4,762 18.3% 612 26,814 102.9% CITY OF TULSA RATIOS OF OUTSTANDING DEBT BY TYPE Last Ten Years (amounts expressed in thousands, except per capita)

General Bonded Debt Other Business Percentage Governmental Type General of NetActivities Debt Activities Debt Total Percentage Obligation Assessed Per Revenue Revenue Primary of Personal Per Year Bonds, Net a Value a Capita b Bonds, Net Bonds, Net Government c Income b Capita b 2011$ 394,399 12.60%$ 1,006 $ 14,125 $ 106,547 $ 515,071 3.21%$ 1,314 2010 358,257 11.64% 919 27,515 90,505 476,277 3.10% 1,221 2009 307,832 10.40% 795 40,239 92,725 440,796 3.26% 1,139 2008 251,449 8.90% 655 51,965 95,270 398,684 2.61% 1,033 2007 229,448 8.44% 604 73,350 2,425 305,223 2.19% 803 2006 198,977 7.66% 517 89,579 2,780 291,336 2.22% 757

95 2005 183,781 7.32% 470 27,401 3,125 214,307 1.72% 562 2004 157,284 6.39% 405 39,113 3,460 199,857 1.73% 523 2003 174,341 7.13% 444 49,640 3,600 227,581 1.96% 588 2002 189,871 8.40% 478 58,607 3,855 252,333 2.10% 645

Gross Less Debt Ratio of Net Net Bonded Net General Less Payable From Bonded Debt Debt Per Assessed Bonded Bond Component Unit Net Bonded To Assessed Capita Year Population Value Debt Reserves Revenues Debt a Value (Percentage) (In dollars) 2011 392,000$ 3,130,173 $ 437,795 $ 18,635 $ 24,761 $ 394,399 12.60%$ 1,006 2010 390,000 3,078,866 394,445 8,120 28,068 358,257 11.64% 919 2009 387,000 2,959,096 350,475 11,900 30,743 307,832 10.40% 795 2008 384,000 2,824,690 316,429 7,860 57,120 251,449 8.90% 655 2007 380,000 2,717,965 291,009 9,160 52,401 229,448 8.44% 604 2006 385,000 2,598,320 236,199 7,920 29,302 198,977 7.66% 517 2005 391,000 2,511,861 226,060 11,005 31,274 183,781 7.32% 470 96 2004 388,000 2,461,392 197,385 12,340 27,761 157,284 6.39% 405 2003 392,910 2,445,574 215,740 11,240 30,159 174,341 7.13% 444 2002 397,137 2,259,952 229,790 6,700 33,219 189,871 8.40% 478

a Certain General Obligation bonds issued to fund water and sewer projects are repayable 50% from component unit revenues and 50% from property revenues. The portion of these issues, net of any reserves, that are repayable from property tax revenues are included in the amount of net bonded debt per capita.

Sources: Net Assessed Value - Tulsa County Assessor Other data: City of Tulsa CITY OF TULSA RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL BONDED DEBT TO TOTAL GENERAL GOVERNMENTAL EXPENDITURES Last Ten Years (amounts expressed in thousands)

Total Ratio of Debt Total General Service to General Debt Governmental Expenditure Year Principal Interest Service Expenditures (Percentage) 2011$ 22,060 $ 18,052 $ 40,112 $ 389,849 10.3 % 2010 17,610 16,008 33,618 426,717 7.9 % 2009 17,755 14,326 32,081 442,325 7.3 %

97 2008 19,090 13,129 32,219 473,041 6.8 % 2007 17,880 10,866 28,746 471,511 6.1 % 2006 20,860 10,247 31,107 384,948 8.1 % 2005 18,305 8,795 27,100 339,010 8.0 % 2004 15,955 10,507 26,462 318,029 8.3 % 2003 12,650 11,968 24,618 351,275 7.0 % 2002 15,580 11,050 26,630 362,655 7.3 % CITY OF TULSA COMPUTATION OF DIRECT AND OVERLAPPING DEBT June 30, 2011 (amounts expressed in thousands)

Estimated(2) Estimated Percentage Share Net Debt(1) Applicable to Applicable to Governmental Unit Outstanding City of Tulsa City of Tulsa

Debt repaid with property taxes

Independent School District: No. 1 TPS$ 129,287 64.9%$ 83,884 No. 3 BA 74,000 1.0% 719 No. 4 Bixby 27,500 1.1% 315 98 No. 5 Jenks 72,170 15.4% 11,125 No. 9 Union 73,050 17.6% 12,834 108,877

City direct debt $ 419,160 100.0% 419,160 Total direct and overlapping debt $ 528,037

Notes: (1) General bonded debt net of reserves. (2) Ratio of assessed valuation of property within the overlapping unit to assessed valuation of property within the City of Tulsa.

Sources: Tulsa County Assessor Independent School Districts CITY OF TULSA COMPUTATION OF LEGAL DEBT MARGIN Last Ten Years (amounts expressed in thousands)

2011 2010 2009 2008 2007 2006 2005 2004 2003 2002

Debt limit 1-2 $ 313,017 $ 307,877 $ 295,910 $ 282,469 $ 271,797 $ 259,832 $ 251,186 $ 246,139 $ 244,557 $ 225,967

Total net debt subject to limit 3 ------3,200 6,305 9,395

Legal debt margin $ 313,017 $ 307,877 $ 295,910 $ 282,469 $ 271,797 $ 259,832 $ 251,186 $ 242,939 $ 238,252 $ 216,572 99 Total net debt applicable to the limit as a percentage of debt limit 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 1.30% 2.58% 4.16%

Sources: 1 Tulsa County Assessor - Net Assessed Valuation 2 Article 10, Section 26, Oklahoma Constitution - 10% of Net Assessed Valuation 3 Article 10, Section 27, Oklahoma Constitution - debt subject to limit CITY OF TULSA PRINCIPAL EMPLOYERS CURRENT YEAR AND PREVIOUS YEAR

2011 2010 Percentage of Percentage of Total MSA Total MSA Employer Employees Rank EmploymentEmployees Rank Employment

Wal-Mart/Sam's Club 7,500 1 1.78% 7,500 1 1.78% Tulsa Public Schools 7,500 2 1.78% 7,000 3 1.66% American Airlines Maintenance Base 7,500 3 1.78% 7,500 2 1.78% St. John Medical Center 6,500 4 1.55% 2,750 6 0.65% Saint Francis Healthcare System 6,500 5 1.55% 4,500 4 1.07% City of Tulsa 5,500 6 1.31% 4,437 5 1.06% Hillcrest Healthcare System 5,500 7 1.31% 1,600 17 0.38% Cherokee Hard Rock Hotel and Casino 3,500 8 0.83% 1,000 33 0.24% Reasor's (all Tulsa area locations) 3,500 9 0.83% 2,000 12 0.48% Bank of Oklahoma Financial 3,500 10 0.83% 2,719 7 0.65% Broken Arrow Public Schools 3,500 11 0.83% 2,300 9 0.55% Spirit AeroSystems (formerly Boeing North American, Inc.) 2,000 12 0.48% 1,875 15 0.45% Tulsa County 2,000 13 0.48% 2,000 13 0.48% 102 Union Public Schools 2,000 14 0.48% 2,000 14 0.48% Tulsa Community College 2,000 15 0.48% 2,500 8 0.59% U.S. Postal Services 1,500 16 0.36% 1,500 18 0.36% QuikTrip 1,500 17 0.36% 1,400 25 0.33% Jenks Public School 1,500 18 0.36% 1,750 16 0.42% AT&T (Telephone and wireless employees) 1,500 19 0.36% 1,400 23 0.33% DirecTV 1,500 20 0.36% 1,500 19 0.36% Baker Hughes (all locations) 1,500 21 0.36% 1,500 20 0.36% Nordam Group 1,500 22 0.36% 2,000 11 0.48% Williams Companies 1,500 23 0.36% 1,100 30 0.26% Oneok 1,500 24 0.36% 2,100 10 0.50% Owasso Public Schools 1,500 25 0.36% 1,200 29 0.29% Mazzio's 1,500 26 0.36% 1,500 21 0.36% OSU Medical Center 1,500 27 0.36% 1,400 26 0.33% University of Tulsa 1,500 28 0.36% 1,200 28 0.29% AEP/Public Service Company of Oklahoma 1,500 29 0.36% 1,100 31 0.26% Whirlpool Corporation 1,500 30 0.36% 1,400 25 0.33% River Spirit Casino 1,500 31 0.36% 1,500 22 0.36% Verizon Business (formerly MCI, WorldCom) 1,500 32 0.36% 900 37 0.21% Aaon 1,500 33 0.36% 719 38 0.17% Ic of Oklahoma LLC (Bus manufacturing) 1,000 34 0.24% 1,000 34 0.24% State Farm 1,000 35 0.24% 1,300 27 0.31% Tulsa Technology Center 1,000 36 0.24% 1,000 36 0.24% Blue Cross/Blue Shield of Okla. 1,000 37 0.24% 1,100 32 0.26% HP Enterprise Services (formerly EDS) 1,000 38 0.24% 1,000 35 0.24%

100,500 23.90% 82,250 19.56%

Data Notes: Source: Tulsa Metropolitan Chamber of Commerce Chamber Sources: Direct Contact with Companies, D&B Million Dollar Database: Global Reach, ReferenceUSA & Tulsa World articles. Employer headcount survey includes regular full-time and part-time employees. Total employment for all locations of the company in the Tulsa MSA area. CITY OF TULSA DEMOGRAPHIC AND ECONOMIC STATISTICS Last Ten Years (amounts expressed in thousands)

MSA Per MSA Current Capita Percent of Personal Income Personal Median High School Unemployment Year Population (in millions) Income Age Graduates Rate 2011 392,000$ 38,347 $ 40,904 34.7 84.3% 6.0% 2010 390,000 36,642 39,442 37.3 N/A 7.5% 2009 387,000 37,540 40,981 37.1 N/A 6.5% 2008 386,000 35,796 39,524 36.9 89.7 6.8% 2007 384,000 34,392 38,529 36.6 N/A 4.0% 2006 382,000 30,734 34,860 36.4 N/A 4.0% 2005 381,000 28,614 32,621 36.2 N/A 4.6% 103 2004 382,000 26,536 30,260 36.0 85.1% 5.6% 2003 387,000 26,297 30,061 35.7 87.0% 5.7% 2002 391,000 26,629 30,689 35.5 84.7% 4.3%

Sources: Population - U.S. Department of Commerce, Bureau of the Census. Total Personal Income Current Dollars - U.S. Bureau of Economic Analysis (BEA) Per Capita Personal Income - U.S. Bureau of Economic Analysis Median age - calculated by extrapolating reported 2000 Census number and 2011 projection Percent of High School Graduates - American Community Survey Ranking Tables 2000-2004 Bureau of the Census Unemployment Rate - Oklahoma Employment Security Commission CITY OF TULSA Number of City Employees Last Ten Years

Departments 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002

Public Works 1,245 1,441 1,453 1,445 1,426 1,608 1,609 1,471 1,507 1,520 Police 874 888 897 898 892 936 926 919 939 940 Fire 698 708 714 714 713 721 719 718 730 730 Information Technology 249 270 278 277 273 193 193 194 215 217 Park & Recreation 180 270 273 274 274 384 384 400 514 556 Airports 157 158 172 171 169 174 173 162 163 156 Urban Development n/a n/a n/a n/a n/a n/a n/a 127 127 130 Finance 153 89 84 84 78 76 76 77 86 96 Planning and Economic Development 118 91 93 93 84 n/a n/a n/a n/a n/a Equipment Management 79 79 83 83 83 83 83 90 93 94

104 Working in Neighborhoods 72 87 91 86 83 n/a n/a n/a n/a n/a Municipal Courts 50 53 58 58 58 63 62 62 65 65 All Other (1) 200 227 242 254 286 256 250 249 262 277 4,075 4,361 4,438 4,437 4,419 4,494 4,475 4,469 4,701 4,781

(1) Other departments include: Elected Officials Offices, Legal, Human Resources and other departments with less than fifty positions.

Source: City of Tulsa, Annual Budget Book CITY OF TULSA OPERATING INDICATORS BY FUNCTION / PROGRAM Last Seven Years

Function/Program 2011 2010 2009 2008 2007 2006 2005

Public Safety & Protection: Municipal Court 1. 50% compliance with sentences of the Court N/A 65% 68% 52% 42% 65% 63% Police Department 1. Reduction in major crimes as measured by the Uniform Crime Reporting 5.0% less than 9.0% less than 1.6% less than -1.7% less than 5% less than 1% less than FY 6% more than System FY 10 FY 09 FY 08 FY 07 FY 06 05 FY 04 2. Complete all requests for analysis 5.0% less than 20.7% more 6.8% more than -8.4% less than 7% less than FY 10 than FY 09 FY 08 FY 07 FY 06 N/A N/A 3. Investigate all complaints received. Solve/close as many as possible. 15% increase 16.1% decrease 0.7% decrease 14% increase 1% increase over FY 10 over FY 09 over FY 08 over FY 07 over FY 06 N/A N/A Fire Department 1. Fire fatalities: Civilian - 0 N/A 13 14 8466 2. Fire fatalities: Firefighter - 0 N/A 0 0 0000 3. Property: Loss (millions) – $18.0 N/A $12.60 $27.60 $20.70 $21.00 $17.70 $11.90 4. EMS: Pulse restored percentage - 30% N/A 40% 50% 29% 17% 31% 26% Telecommunications/Information Services 1. Achieve or exceed national standard for 911call handling and dispatching (95% within 10 seconds) >95% 95% 93% 95% 95% 94% 94% 2. Network availability of 98% or better 100% 100% 99% 99.50% 99.50% 99.50% 99.50% 3.Permits turnaround within one week Meet Met Met 72% N/A N/A N/A Culture and Recreation: Parks 1.Attract 500,000 participants in recreation programs N/A 49,647 N/A 544,999 N/A N/A N/A 2.Facilitate 100 partnerships with community organizations N/A 104 101 101 N/A N/A N/A 3.Attract 500,000 participants in Oxley Nature Center programs N/A 575,000 560,000 558,172 N/A N/A N/A 4.Maintain a 20% park revenue to expenditure ratio N/A 127 N/A 0 N/A N/A N/A Gilcrease Museum 1. Attract 140,000 visitors annually 110,000 105,000 100,000 80,000 105,000 102,000 125,000 2. Maintain proper climate in building 100% of the time 100% 100% 100% 100% 97% 100% 100% Performing Arts Center 1. Possible 10 points on customer surveys N/A 9.8 9.8 9.7 9.7 9.7 9.7 2. Meet 100% of events’ technical demands N/A 100% 100% 100% 100% 100% 100% 3.Schedule and service 500 attended events annually N/A 520 274 517 1 N/A N/A 4.Generate $5.5 million gross ticket sales per year N/A 9,203,000 5,997,000 7,600,000 1 N/A N/A Social & Economic Development: Economic Development Commission 1. Respond to visitor inquiries 47,000 46,000 49,000 68,000 68,000 68,000 48,000 2. Maintain current levels of future room nights 100% 81% 100% 100% 100% 100% 75% 3. Generate and respond to 800 out of state inquiries from event planners 800 677 793 770 770 770 770 Development Services 1. Review permits within 5 days (on average) N/A 100% 95% 80% 80% Yes No 2.Complete 98% of all inspections within the same day assigned N/A 99.5% 98.3% 99.50% N/A N/A Planning Department 1. Public/private investment in planning areas, based on EDA Private to 6 plans completed 7 plans completed Public Investment Ratio standard of 4:1 N/A N/A N/A N/A N/A 2.engaging citizens in the various planning activities 75% in new City-wide 50% of Planning N/A Planning areas involvement in areas N/A N/A N/A 3. Public/private investment in planning areas, based on EDA Private to Exceeded level of Exceeded EDA Exceed Exceed Public Investment Ratio standard of 4:1 N/A 10:1 standard of 4:1 standard of 4:1 standard of 4:1 N/A N/A Public Works & Transportation: Airports 1. Maintain and improve facilities to meet the demands of the passengers 2.90 million 3.03 million 3.25 million 3.246 million 3.1 million 3.1 million and tenants N/A persons served persons served persons served persons served persons served persons served Public Works And Development 1. 95% of projects designed & completed within scheduled time frame N/A Yes Yes Yes Yes Yes Yes 2. Meet service demand 99% of the time N/A Yes Yes Yes Yes Yes Yes 3. Maintain compliance with administrative orders N/A Yes Yes Yes Yes Yes Yes 4. Collection of 99% of all revenue billed N/A Yes Yes Yes Yes Yes Yes 5. On average restore service within five hours of water line breaks N/A No Yes Yes Yes Yes Yes 6. Pavement management index; 60% of all streets have a PCI above 75 N/A Yes Yes No No No No Metropolitan Tulsa Transit Authority 1. Total passenger trips for fixed route service 2,440,000 2,560,000 2,689,000 2,544,000 2,318,000 2,255,000 1,770,000 2. Total passenger trips for lift program 201,000 206,000 232,000 231,000 210,000 210,000 201,000 Administrative and Support Services: Human Rights Department 1. Percentage of filed complaints resolved within 160 days N/A 70% 80% 80% 80% 80% 100% Legal Department 1. Review and approve 80% of all contracts within 14 calendar days from receipt N/A Meets Meets 90% 93% 93% N/A Human Resources Department Achieve the following customer ratings: 1. Very Satisfied – 80% N/A 90% 90% 80% 80% 75% 75% 2. Satisfied – 15% N/A 3% 10% 20% 20% 25% 25% 3. Moderately Satisfied or lower - <5% N/A 20% 15% 0% 0% 0% 0% Indian Nations Council of Governments (INCOG) 1.Process 100% of development applications in a timely manner N/A 100% 98% 99% 99% 99% N/A 2. Maintain Fed trans eligibility and surface trans funding N/A 14,106,000 13,556,000 N/A N/A N/A N/A Finance Department 1. Achieve Bond Rating: Standard & Poor’s- AA AA AA AA AA AA AA AA 2. Achieve Bond Rating: Moody’s- Aa2 Aa2 Aa2 Aa2 Aa2 Aa2 Aa2 Aa2 3. GFOA Certificate of Excellence in Financial Reporting(CAFR) and Distinguished Budget Presentation Award N/A Yes Yes Yes Yes Yes Yes Communications Department 1. Answer calls within 24 seconds (4 rings) N/A 60% 58% 76% 76% 76% N/A Equipment Management Department 1. Maintain all City Equipment at 90% availability N/A 93% 93% 90% 90% 94% 94% 2. Maintain 95% customer satisfaction N/A 100% 95% 95% 99% 99% 99%

Source: City of Tulsa

105 CITY OF TULSA CAPITAL ASSETS - STATISTICS BY FUNCTION June 30, 2011

Functions

Public Works & Transportation Streets - lane miles 4,312 Water mains - miles 2,187 Fire hydrants 15,324 Meters in service 141,389 Sewer mains - miles 1,897

Public Safety & Protection Police: Stations 3 Detention centers 1

Fire: Stations 31 Ladder Trucks 13 Pumper Trucks 39

Cultural Development & Recreation Parks: Parks 123 Zoo 1 Golf courses 2 Recreation Centers 11 Swimming Pools 9

Public Events: Venues 2

106 APPENDIX C

MONTHLY EXECUTIVE SUMMARY OF THE CITY OF TULSA, OKLAHOMA AS OF DECEMBER 31, 2011 (UNAUDITED)

McGladrey & Pullen, LLP, our independent auditor, has not been engaged to perform, and has not performed, any procedures on the Financial Report Executive Summary in Appendix C, and accordingly, is not associated with this information.

D-1 DEPARTMENT OF FINANCE

MONTHLY FINANCIAL REPORT EXECUTIVE SUMMARY (Also available at www.cityoftulsa.org) Period Ending December 31, 2011

Michael P. Kier Director of Finance MONTHLY FINANCIAL REPORT EXECUTIVE SUMMARY

Dewey F. Bartlett, Jr. Mayor

DEPARTMENT OF FINANCE Michael P. Kier, Director Patrick B. Connelly, Budget Division Manager Robert S. Jones, Jr., Treasury Division Manager Larry C. Hood, Purchasing Agent David W. Bryant, CPA, Controller Foreword

Total revenues as reflected on the Consolidated Statement of Operations increased by 6% or $19.2 million to a level of $338.5 million. The largest increase took place in water and sewer charges, which grew by $11.4 million or 14.1% to a level of $92.3 million. The sales tax increased by 5% or $5 million to a level of $104.5 million. In addition to the revenues, other financing sources contributed $50.6 million as a result of the sale of General Obligation bonds. Overall expenditures and expenses were $310.8 million, an increase of 2.9% or $8.8 million. Operating expenses increased by 11.6% to $222.2 million. Capital outlay declined by 27% or $22.1 million to a level of $59.6 million. Debt service increased by $7.7 million to $28.9 million for the first six months of the year.

General Fund revenues were $4.4 million or 3.7% higher than the budget estimate. The revenues totaled $126 million. Overall expenditures, encumbrances and commitments stood at 54.5% of the $261.5 million budget. This is slightly ahead of the even expenditure estimate and a little above last year’s 53.1%.

The Tulsa Metropolitan Utility Authority (TMUA) Water Operating Fund saw an increase in revenues of $8.2 million or 17% above budget estimates to a level of $56.6 million. Total expenditures, encumbrances and commitments stood at $50.3 million, or 50.6% of the adopted budget. This level is below the anticipated position of 52.7% and slightly below last year’s level. The TMUA Sewer Operating Fund saw revenues for the first six months of $51.3 million, which was at the estimated level. Expenditures, encumbrances and commitments totaled $57.1 million, which was 54.6% of the budget, a little ahead of the expected level of 54.1% and ahead of last year’s level of 49.8%.

Michael P. Kier D i r e c t o r o f F i n a n c e

December 31, 2011 Table of Contents

PAGE Consolidated Statement of Operations ...... 1-2

Economic Indicators...... 3-5

Estimated/Actual Revenue Charts ...... 6-9

Revenue Report - Major Funds...... 10-12

Status Report on Capital Improvement Funds...... 13-14

General Fund Balance Sheet ...... 15 Statement of Revenue, Expenditures and Encumbrances...... 16 Expenditures, Encumbrances Analysis...... 17 Expenditures, Encumbrances Year to Date ...... 18 Schedule of Sales Tax Revenue ...... 19 Schedule of Use Tax Revenue ...... 20

Tulsa Metropolitan Utility Authority Management Report - Water Operating Fund ...... 21 Monthly Revenues, Billings, and Collections - Water Operating Fund...... 22-23 Water Pumpage ...... 24 Rainfall ...... 25 Management Report - Sewer Operating Fund...... 26 Monthly Revenues, Billings, and Collections - Sewer Operating Fund...... 27-28

Tulsa Authority for the Recovery of Energy Management Report - TARE Operating Fund...... 29 Monthly Revenues, Billings, and Collections - TARE Operating Fund...... 30-31

Stormwater Drainage Advisory Board Management Report - Stormwater Enterprise Fund...... 32 Monthly Revenues, Billings, and Collections - Stormwater Enterprise Fund ...... 33-34 Fee-in-lieu Funds...... 35

Tulsa Airport Authority ...... 36

Tulsa Airport Trust ...... 37

Personal Services Accounts - Estimated/Actual...... 38-39

Overtime Expenditures ...... 40

Position Status Report ...... 41-42

Sinking Fund Expenditures ...... 43

Investment Report ...... 44-53 CITY OF TULSA CONSOLIDATED STATEMENT OF OPERATIONS Six Months Ended December 31, 2011

FY 2012 FY 2011 Year-to-year Amount % of Total Amount % of TotalChange Ref * REVENUES & OTHER FINANCING SOURCES: Revenues: Taxes: Sales taxes $104,474,067 26.84% $99,481,833 29.12% 5.02% $4,992,234 Use taxes 9,397,521 2.41% 8,450,438 2.47% 11.21% 1 947,083 Franchise taxes 11,618,559 2.99% 11,437,064 3.35% 1.59% 181,495 Property taxes 3,519,577 0.90% 3,719,420 1.09% -5.37% (199,843) Hotel/Motel tax 3,193,854 0.82% 2,870,538 0.84% 11.26% 2 323,316 Special assessments 3,235,154 0.83% 3,316,103 0.97% -2.44% (80,949) Total taxes 135,438,733 34.80% 129,275,396 37.84% 4.77% 6,163,337 Charges for services: Water and sewer 92,260,216 23.71% 80,861,301 23.67% 14.10% 3 11,398,915 Stormwater fees 11,516,193 2.96% 10,903,435 3.19% 5.62% 612,758 Refuse fees 10,755,056 2.76% 10,795,286 3.16% -0.37% (40,230) Airport charges 17,678,035 4.54% 17,714,481 5.19% -0.21% (36,446) EMSA - Service fees 2,594,341 0.67% 2,611,781 0.76% -0.67% (17,439) Other 32,386,248 8.32% 30,118,165 8.82% 7.53% 2,268,084 Total charges for services 167,190,090 42.96% 153,004,448 44.79% 9.27% 14,185,642 Licenses and permits 4,268,121 1.10% 3,278,409 0.96% 30.19% 4 989,712 Revenue from grants and other governments 13,906,412 3.57% 14,126,168 4.14% -1.56% (219,756) Investment income 4,195,391 1.08% 4,446,761 1.30% -5.65% (251,370) Fines and forfeitures 5,588,767 1.44% 5,156,910 1.51% 8.37% 431,857 Other revenue sources 7,941,822 2.04% 10,061,204 2.95% -21.06% 5 (2,119,382) Total revenue 338,529,336 9.22% 319,349,296 93.49% 6.01% 19,180,040 General obligation bonds 50,000,000 12.85% 11,101,000 3.25% 350.41% 6 38,899,000 Premium on general obligation bonds 646,695 0.17% 11,143,320 3.26% -94.20% 7 (10,496,625) Total other financing sources 50,646,695 13.01% 22,244,320 6.51% 256.21% 28,402,375 Total revenue & other financing sources $389,176,031 100.00% $341,593,616 100.00% 13.93% $47,582,415

EXPENDITURES/EXPENSES: Operating expenditures: Police $39,435,521 12.69% $37,081,208 12.28% 6.35% $2,354,313 Fire 32,806,491 10.56% 28,674,726 9.49% 14.41% 8 4,131,765 Public Works 81,505,189 26.23% 74,720,925 24.74% 9.08% 6,784,264 Airports 6,152,388 1.98% 6,747,916 2.23% -8.83% (595,528) Transfers to agencies 8,024,831 2.58% 6,979,146 2.31% 14.98% 9 1,045,685 Other departments 54,302,929 17.47% 44,911,264 14.87% 20.91% 10 9,391,665 Total operating 222,227,349 71.51% 199,115,185 65.93% 11.61% 23,112,164 Capital outlay: Police 992,807 0.32% 3,736,919 1.24% -73.43% 11 (2,744,112) Fire 1,264,926 0.41% 260,008 0.09% 386.50% 1,004,918 Public Works 51,579,778 16.60% 70,590,451 23.37% -26.93% 12 (19,010,673) Other departments 5,800,260 1.87% 7,101,847 2.35% -18.33% 13 (1,301,587) Total capital outlay 59,637,772 19.19% 81,689,225 27.05% -26.99% (22,051,453) Debt service: General long-term debt 17,182,432 5.53% 9,388,458 3.11% 83.02% 14 7,793,974 Water fund 4,810,467 1.55% 5,704,996 1.89% -15.68% 15 (894,529) Sewer fund 6,913,682 2.22% 6,104,432 2.02% 13.26% 16 809,250

Total debt service & other financing uses 28,906,581 9.30% 21,197,886 7.02% 36.37% 7,708,695

Total expenditures/expenses $310,771,701 100.00% $302,002,296 100.00% 2.90% $8,769,405

Net revenues over (under) expenses $78,404,330 $39,591,320

COMMITMENTS: Purchase orders and contracts$ 191,344,978 $140,599

*Ref: this is the reference number for the variance analysis on the next page.

-1- CITY OF TULSA CONSOLIDATED OPERATIONS VARIANCE ANALYSIS December 31, 2011

1. Use taxes – Use tax receipts increased $947K over the same period last year.

2. Hotel/Motel taxes – Hotel/Motel tax receipts increased $323K over the same period last year.

3. Water and Sewer — Increased $11M over same period last due to increased usage and rates.

4. Licenses and Permits – License and Permit receipts were $990K greater than the prior year primarily due to a $580K increase in building inspections, $136K increase in right of way permits, $100K in PFPI & System fees, and $51K increase in restaurant fees.

5. Other revenue sources — Other revenues decreased $2M compared to the prior year primarily due to a decrease in reimbursements for OSU’s portion of construction costs of the police forensics lab expansion project from the prior year.

6. General obligation bonds – General obligation bond proceeds for the Series 2011 bonds were $50M compared to the proceeds for the Series 2010 bonds of $11.1M.

7. Premium on general obligation bonds – Premiums on bonds issued for the 2011 Series were $647K compared to the $11.1M received on the 2009B refundings bonds and Series 2010 bonds issued.

8. Fire operating expenditures – Fire operating expenditures increased $4.1M in the current year due to increased personal services expenditures.

9. Transfers to agencies - Increased $1M mostly due to transfers to the Metropolitan Tulsa Transit Authority.

10. Other departments expenditures – Increased $9.4M due to increased personnel costs of $2.1M primarily due to organization restructuring, fuel purchases increased $1.7M, and services expenses increased approximately $5.6M across all other departments.

11. Police capital outlay — Police capital outlay decreased $2.7M compared to last year primarily due to significant IT equipment purchased last year.

12. Public Works capital outlay — Expenditures for streets, bridges, water, and stormwater projects decreased approximately $19M compared to the same period last year.

13. Other departments capital outlay – Decreased approximately $1.3M compared to last year due primarily to park and recreation capital expenditures and telecommunication capital expenditures.

14. General long-term debt service – Increased due to repayment of debt issued in 2010 and 2011.

15. Water fund debt service – Decreased $894K due to a decrease in debt service requirements.

16. Sewer fund debt service – Increased $809K due to an increase in debt service requirements.

2 Report on Tulsa Economic Indicators December, 2011

Report On Tulsa Economic Indicators December, 2011

Wage & Salary Employment Conditions The metro jobless rate fell to 6.4% from 6.7% in October. The jobless rate for this time last year was 7.5%. The state’s rate remained at 6.1% while the national rate increased slightly to 8.6% from 8.5% in October. The total labor force in the TMSA grew by 3,100 in November. Lynn Gray (the OESC’s Chief Economist) stated that the rise in employment in November was the largest increase Tulsa has seen in all Novembers since 1997. Both the Manufacturing and Trade sectors increased over the previous month by 100 and 300 jobs, respectively. Construction employment fell by 300 jobs in November, although construction activity is expected to rise as spring draws closer.

Locally, the Tulsa Metro Chamber’s “Tulsa’s Future” program reported to have aided or created over 8,000 new jobs in the metro area throughout 2011. More than 4,000 of these jobs posted minimum annual salaries of $50,000. Bob Ball, the chamber’s economist estimated that these “high value jobs and their spinoff employment have an estimated income totaling more than $295 million.” Furthermore, the latest Manpower Employment Outlook Survey for the first quarter of 2012 placed the TMSA as the 5th best place in the nation to find employment. Additionally, FiscalTimes listed Tulsa among the nation’s 10 best places to find work. Using data from the BLS, FiscalTimes ranked Tulsa as the 4th best among the 100 largest metros in the nation. The criterion was based on job generation over the previous 12 months.

Employment in the TMSA is anticipated to continue its recovery. As the energy sector continues to benefit from rising spot prices (with oil rising to $102 a barrel most recently) and stable demand; the local service sector will benefit as it continues to service the needs of the energy sector. Baker Hughes reports the current active rig count in Oklahoma to be 192. This is three less active rigs than in October, but 28 more than in November of 2010. Locally, ONEOK Partners plans to allocate $1.9 billion in capital expenditures in 2012. WPX, likewise, plans to spend $1.8 billion. The energy sector anticipates laying out large sums of money to expand production, and the local area economy will benefit from this growth.

Construction Conditions There were 22 single family permits issued in November. This was 8 less than October, however still 2 more than November, 2010. There were no multiͲfamily permits issued in November, although multiͲfamily construction tends to be cyclical and it could be expected to pick up as better weather arrives in the coming months. November was a lackluster month for commercial construction, although this could be due to seasonality, with $3.6 million collected for commercial construction permits. This was about $29 million less than October – though it’s worth noting that October, 2011 collections were much higher than their trended monthly collection rate. It was especially boosted by Office receipts which were $30 million in October. There was $1.62 million collected for Office construction in November, 2011. Total commercial construction receipts for November 2011were $10 million less than what was collected in November, last year. Retail receipts totaled $1.04 million (decrease of $1.86 million), Industrial receipts totaled $1 million (increase of $500,000). Even given the TMSA’s poor construction performance this month, it was still ranked among the top performing metros nationwide this year by the Associated General Contractors of America (AGCA). The TMSA can expect to see an increase in commercial construction this spring. Specifically, hospital related construction has been forecasted to rise. Currently, Saint Francis is preparing a $200 million expansion of their facilities.

Freight Conditions The Tulsa International Airport saw its passenger count fall by 8.3% over the month of October. However, over the same time last year – this is a 1.6% increase. American Airlines (AA) saw their revenue passenger miles (metric of flying one paying customer one mile) fall by 0.9% over the same time last year. AA flew 10.23 billion revenue passenger miles in December of 2011. AA’s load capacity reached 80.8% in December, 2011; this was a decrease of 1.2% over December, 2010. Air freight at the airport increased by 6.4% over the previous month. This was an increase of 9% over the previous year. In 2011, AA few 143.8 million cargo ton miles (metric of flying one ton of cargo one mile). There were 4.79 million tons shipped in the month of November. Activity increased at the Port of Catoosa in November. Barge tonnage increased by 20,204 tons in November, totaling 4.79 million tons. Port officials continue to believe the annual freight total will reach its unofficial benchmark of 2 million tons by year’s end. The year’s total is currently at 1.89 million tons. November’s figures were boosted by larger than average increases in inbound steel shipments and outbound shipments of: gypsum, soy, and crude oil.

Enterprise Customers Sewer customers decreased by 0.22% in November to 128,134; this was a decrease of 0.25% over the same time last year. Water Customers decreased 0.23% in November to 136,388; this was a 0.4% decrease over the same time last year.

Price Indices PPI moved up 0.2% in November to 186.3 MCI moved up 0.3% in November to 224.2 CPIͲU remained stable in November at 221.6*

*The annualized average for Fiscal Year 2010 was 216.7. The annualized average for the last 3 Fiscal Years was 214.3.

20 Year GO Bond rates moved down 8 points in November to 4.05% Revenue Bond rates moved down 129 point in November to 3.78% 30ͲDay Treasury Bill rates moved up 0.1 points in November to- 3 0.002% - Tulsa Economic Indicators Most Recent Twelve Months (unless otherwise Indicated)

December 10 to December 09 to November 11 November 10 Change Wage & Salary Employment (TMSA 12 Mo. Avg.): Nov-11 Nov-10 Manufacturing 47,600 44,000 8.2% Services 202,200 197,500 2.4% Trade 80,500 82,600 (2.5%) Other 81,300 83,000 (2.0%) Total 411,600 407,100 1.1%

Unemployment Rates (TMSA 12 Mo. Avg): Nov-11 Nov-10 Tulsa MSA 6.6% 7.6% -1.0 Oklahoma 6.0% 6.8% -0.8 United States 9.0% 9.7% -0.7

Tulsa City Construction (Calendar YTD): Nov-11 Nov-10 Single Family Units 340 324 4.9% Multi-Family Units 695 2 >100.00% Value of : Retail Permits $62,520,000 $22,570,000 >100.00% Office Permits $105,660,000 $23,050,000 >100.00% Industrial Permits $18,910,001 $8,470,001 >100.00%

Nov-11 Nov-10 Air Passengers (Calendar YTD): 2,569,000 2,617,400 (1.8%) Barge Tonnage (Calendar YTD): 1,899,700 2,015,900 (5.8%)

Price and Cost Indices: Nov-11 Nov-10 Consumer Price Index - Urban 221.6 218.2 1.6% Producer Price Index 186.3 180.5 3.2% Municipal Cost Index (Est.) 224.2 213.7 4.9% (Indices are not adjusted for seasonality)

Financial Rates (Monthly Avg.): Nov-11 Nov-10 30-Day Treasury Bill 0.002% 0.13% (0.13) Municipal General Obligation Bond Buyer 11 Bond Index (20 Yr. A-AAA) 4.05% 4.40% (0.35) Municipal Revenue Bond Buyer 25 Bond Index (25 Yr. A-AA+) 3.78% 5.00% (1.22)

Utilities: Nov-11 Nov-10 Water Customers 136,400 136,900 (0.4%) Sewer Customers 128,100 128,500 (0.3%)

- 4 - Rates on Municipal Investments and Cost of Financing 10/1/2010 Consumers, Producers, and 7.0% Revenue Municipal Price/Cost Indices Bonds (30 Yr. A+) 6.0% 250.0 General 5.0% Obligation 240.0 Bonds 4.0% (20 Yr. AA) CPI-U 230.0 3.0% 30 Day Treasury Bill 220.0 2.0% Average MCI 210.0 1.0% 200.0 0.0% PPI 190.0 Jul Apr Oct Jun Feb Mar Aug Sep Nov May

Jan 11 180.0 Dec 10

170.0 Jul Apr Oct Jun Feb Mar Nov Aug Sep May Jan 11 Dec 10

Monthly (- -) and Average (——) Unemployment Rates (Most Recent 12 Months)

Tulsa MSA Wage & Salary Employment Tulsa MSA Oklahoma U.S. and 12 Month Moving Average (000's) 11.0 440.0 Moving Average 10.0 430.0 9.0

8.0 420.0

7.0 410.0 6.0 400.0 5.0

4.0 390.0 Jul Apr Oct Jun Feb Mar Aug Sep Nov 3.0 May Jan 11 Dec 10 Jun Jun Jun Mar Sep Mar Mar Sep Sep Dec 10 Dec 10 Dec 10

- 5 - Estimate/Actual Monthly Revenue Through December 31, 2011

$24.0 $753,931 FY 12 Actual 3.8% FY 12 Estimate

FY 11 Actual $18.0

($70,143) (1.0%)

$12.0

($87,509) ($543,015) $145,556 (4.6%) (8.7%) 2.5% in millions in millions

$6.0

$0.0 General Fund TARE Fund TMUA--Water TMUA--Sewer 2006 Third Penny Operating Fund Operating Fund Sales Tax Fund

$2.4 ($43,222) (2.2%) FY 12 Actual

FY 12 Estimate

FY 11 Actual $1.8

$1.2 ($247,554) ($39,794) (31.9%) (11.1%) in millions

$0.6 $18,798 10.9%

$0.0 Stormwater Enterprise Convention Fund Economic Development E-911 Fee Operating Fund Fund Fund

- 6 - Estimate/Actual Year-to-Date Revenue Through December 31, 2011

FY 12 Actual $160.0 $4,436,103 3.7% FY 12 Estimate

FY 11 Actual

$120.0

$8,231,046 ($25,294) $637,281 $80.0 17.0% (0.0%) 1.9% in millions

($86,540) $40.0 (0.8%)

$0.0 General Fund TARE Fund TMUA--Water TMUA--Sewer 2006 Third Penny Operating Fund Operating Fund Sales Tax Fund

Estimate/Actual Year-to-Date Revenue Through December 31, 2008 FY 12 Actual $12.0 ($251,278) (2.1%) FY 12 Estimate

FY 11 Actual

$9.0

($296,136) $102,205 $106,611 $6.0 (8.5%) 9.1% 4.9% in millions

$3.0

$0.0 Stormwater Enterprise Convention Fund Economic E-911 Fee Operating Fund Development Fund Fund

- 7 - CITY OF TULSA Through December 31, 2011

Variation Percent Fund Actual Estimate from Estimate Variation

General Month - $20,804,931 $20,051,000 $753,931 3.8% YTD - $125,955,103 $121,519,000 $4,436,103 3.7%

The General Fund revenue is 3.8% above the original budget estimate for December and 3.7% for the year-to-date estimate. Sales Tax ($421,215), Licenses and Permits ($215,022), and Public Safety Charges ($111,699) being greater than estimates explain the monthly variance. The annual variance consists of Sales Tax ($1,458,203), Use Tax ($121,521) ONG ($260,115), PSO ($249,861), Capital Contribution Fee ($210,958), Licenses & Permits ($986,890), Code Enforcement ($881,111), and Municipal Court Fines ($364,834).

A. Sales Tax Month - $11,516,215 $11,095,000 $421,215 3.8% YTD - $68,599,204 $67,141,000 $1,458,204 2.2%

Sales Tax collections are 3.8% above the budget estimate for December and 2.2% above the year-to-date. amount. December collections are also 8.16% more than last year's comparable amount.

B. Use Tax Month - $1,621,472 $1,598,000 $23,472 1.5% YTD - $9,397,521 $9,276,000 $121,521 1.3%

Use Tax collections for December are 1.5% above the monthly estimate, and 1.3% above theYTD projection.

C. Franchise Taxes Month - $1,639,414 $1,703,000 ($63,586) (3.7%) YTD - $11,618,559 $11,242,000 $376,559 3.3%

Franchise taxes for December were 3.7% below the original budget . The YTD collections are 3.3% more than the estimate. Actual YTD revenues more than forecast are from ONG (+$257,193), PSO (+$280,790.93) and the Capital Contribution Fee ($210,958.96).

E-911 Fee Operating Fund Month - $320,206 $360,000 ($39,794) (11.1%) YTD - $2,267,611 $2,161,000 $106,611 4.9%

December revenues in the E-911 Fee Operating Fund are 11.1% less than estimates. Year-to-date amount is 4.9% above estimates. In both instances cell phone fees were greater than estimated.

Economic Development Month - $190,798 $172,000 $18,798 10.9% YTD - $1,225,205 $1,123,000 $102,205 9.1%

The Economic Development Commission Fund monthly revenues are 10.9% more than the December estimate and are 9.1% above the year-to-date estimate. Greater Hotel/Motel taxes were collected than estimated.

- 8 - CITY OF TULSA Through December 31, 2011

Variation Percent Fund Actual Estimate from Estimate Variation

Convention Month - $528,446 $776,000 ($247,554) (31.9%) YTD - $3,203,864 $3,500,000 ($296,136) (8.5%)

The Convention Fund December receipt was 31.9% below the estimate, and 8.5% below the year-to-date total. Arena sponsorship receipts explain the monthly shortfall.

Tulsa Authority for the Month - $1,817,491 $1,905,000 ($87,509) (4.6%) Recovery of Energy YTD - $10,987,460 $11,074,000 ($86,540) (0.8%)

December revenues were 4.6% less than estimated . YTD revenues in the TARE Fund are virtually the same as the budget estimate. Lower utility service charge receipts explain both monthly and YTD differences.

Stormwater Month - $1,911,778 $1,955,000 ($43,222) (2.2%) YTD - $11,495,722 $11,747,000 ($251,278) (2.1%)

Stormwater Management Fund revenues for December are 2.2% below monthly estimate and 2.1% less than year-to- date projections. Lower utility service charge receipts explain both monthly and YTD differences.

Water Month - $6,764,857 $6,835,000 ($70,143) (1.0%) YTD - $56,608,046 $48,377,000 $8,231,046 17.0%

The Water Fund's revenue is 1.0% less than the monthly and 17.0% greater than the year-to-date estimate. Increased water sales due to historically warmer and drier weather explain the positive variance.

Sewer Month - $5,701,985 $6,245,000 ($543,015) (8.7%) YTD - $51,252,706 $51,278,000 ($25,294) (0.0%)

The TMUA Sewer Operating Fund revenue has an 8.7% negative variance for December and is vitually the same as the year-to-date estimate. OWRB loan proceeds of $14 million are included in YTD totals.

2006 Sales Tax Month - $5,882,556 $5,737,000 $145,556 2.5% YTD - $35,011,281 $34,374,000 $637,281 1.9%

The 2006 Third Penny Sales Tax Program revenue is 2.5% above the monthly and 1.9% more than the year-to-date estimate. Sales Tax collection comments apply.

- 9 - MAJOR FUNDS EXPENDITURES, ENCUMBRANCES, TRANSFERS OUT & COMMITMENTS THROUGH DECEMBER 31, 2011

Expenditures/ Percent YTD Current Encumbrances/ Expend./Encumb./Commit. Budget Appropriations Commitments Estimate * FY-12 Actual FY-11 Actual Balance

GENERAL FUND Personal Services $ 180,809,000 $ 88,957,000 50.0 49.2 48.7 $ 91,852,000 Materials & Supplies 9,491,000 5,397,000 64.9 56.9 50.7 4,094,000 Other Services 71,168,000 48,058,000 54.2 67.5 66.9 23,110,000 TOTAL $ 261,468,000 $ 142,412,000 51.7 54.5 53.1 $ 119,056,000

E-911 FEE--OPERATING FUND TOTAL $ 5,256,000 $ 2,695,000 51.1 51.3 52.1 $ 2,561,000

ECONOMIC DEVELOPMENT COMMISSION FUND TOTAL $ 2,223,000 $ 2,072,000 54.6 93.2 49.0 $ 151,000

CONVENTION FUND TOTAL $ 6,301,000 $ 2,080,000 51.4 33.0 28.3 $ 4,221,000

TARE OPERATING FUND Personal Services $ 3,582,000 $ 1,563,000 50.0 43.6 44.9 $ 2,019,000 Materials & Supplies 542,000 174,000 57.7 32.1 58.1 368,000 Other Services 19,894,000 9,925,000 51.2 49.9 55.9 9,969,000 Capital Outlay 5,152,000 1,739,000 51.7 33.8 10.2 3,413,000 TOTAL $ 29,170,000 $ 13,401,000 51.2 45.9 49.5 $ 15,769,000

AIRPORT OPERATIONS FUND Personal Services $ 8,893,000 $ 4,109,000 50.0 46.2 46.6 $ 4,784,000 Materials & Supplies 1,106,000 612,000 53.0 55.3 58.2 494,000 Other Services 3,558,000 2,044,000 50.4 57.4 47.1 1,514,000 Capital Outlay 6,000 6,000 100.0 100.0 100.0 0 TOTAL $ 13,563,000 $ 6,771,000 50.4 49.9 47.9 $ 6,792,000

* Based on prior year encumbrances and level expenditures of departmental budgets.

- 10 - Expenditures/ Percent YTD Current Encumbrances/ Expend./Encumb./Commit. Budget Appropriations Commitments Estimate * FY-12 Actual FY-11 Actual Balance

STORMWATER ENTERPRISE FUND Personal Services $ 9,309,000 $ 4,029,000 50.0 43.3 44.8 $ 5,280,000 Materials & Supplies 1,123,000 705,000 59.5 62.8 67.3 418,000 Other Services 14,059,000 8,853,000 56.3 63.0 59.4 5,206,000 Capital Outlay 1,949,000 972,000 64.3 49.9 80.4 977,000

TOTAL $ 26,440,000 $ 14,559,000 54.8 55.1 56.6 $ 11,881,000

TMUA--WATER OPERATING FUND Personal Services $ 25,614,000 $ 11,995,000 50.0 46.8 46.4 $ 13,619,000 Materials & Supplies 11,014,000 7,628,000 57.8 69.3 68.8 3,386,000 Other Services 38,728,000 20,399,000 52.5 52.7 49.6 18,329,000 Capital Outlay 10,804,000 5,461,000 57.7 50.5 61.6 5,343,000 Debt Service 13,260,000 4,810,000 50.0 36.3 41.4 8,450,000

TOTAL $ 99,420,000 $ 50,293,000 52.7 50.6 50.9 $ 49,127,000

TMUA--SEWER OPERATING FUND Personal Services $ 19,913,000 $ 9,031,000 50.0 45.4 46.3 $ 10,882,000 Materials & Supplies 4,821,000 2,907,000 57.6 60.3 55.0 1,914,000 Other Services 51,767,000 32,891,000 54.5 63.5 44.8 18,876,000 Capital Outlay 13,880,000 5,330,000 61.2 38.4 65.2 8,550,000 Debt Service 14,234,000 6,914,000 50.0 48.6 53.5 7,320,000 TOTAL $ 104,615,000 $ 57,073,000 54.1 54.6 49.8 $ 47,542,000

GOLF COURSE FUND Other Services $ 3,709,000 $ 1,762,000 50.0 47.5 45.1 $ 1,947,000 Capital Outlay 290,000 249,000 65.5 85.9 56.6 41,000 TOTAL $ 3,999,000 $ 2,011,000 51.1 50.3 45.8 $ 1,988,000

* Based on prior year encumbrances and level expenditures of departmental budgets.

- 11 - CURRENT APPROPRIATIONS

The current appropriations reflect the FY 12 original budget, FY 11 carryover, budget amendments and transfers. No budget amendments, Council transfers or Mayor's transfers were processed in December 2011.

BUDGET BALANCE

Materials and Supplies, Other Services, and Capital Outlay accounts reflect encumbrances carried forward from FY 11. Funds for these purchases, which were outstanding at year-end, were brought forward as appropriations in the new fiscal year. As the year transpires, the effect of these carryovers will diminish. In the early part of the fiscal year, however, expenditures as a percentage of the current budget are expected to be higher than average. Many annual contracts are encumbered at the beginning of the fiscal year, which also results in obligations exceeding the uniform spending level estimate. Examples of this for the General Fund are the encumbrance for Tulsa Zoo Management, thermal energy and Fire Department uniforms. An example for the Economic Development fund is the contract with the Tulsa Chamber of Commerce for economic development, tourism & convention facility usage. The Stormwater Enterprise service accounts are above projection due to encumbrances for ditching, silt removal and street sweeping.

- 12 - Status Report on Capital Improvement Funds As of December 31, 2011

2008 Sales Tax Special Temporary Streets Fund The Special Temporary Streets fund has total appropriations of $6.47 million. At the end of December $626,000 is encumbered, leaving an unspent balance of $5.4 million.

2006 Special Extended Sales Tax December expenditures totaled $4.4 million with $1.5 million spent on the Residential Streets Rehab project. Encumbrances and commitments total $27.7 million. Total appropriations are $401.7 million. There is a current appropriation balance of $101.1 million.

2001 Third Penny Sales Tax and 2006 Advanced Funded Sales Tax These two programs contain funding for the projects in the original 2001 Sales Tax Ordinance.

December expenditures totaled $291,000. The following are the projects with the highest expenditures:

Charles page Blvd Plan Implementation (A & E) $22,400 General park Improvements $154,000

To date, $372.4 million has been spent on projects in these funds. Encumbrances and commitments total $4.9 million. Appropriations to date total $388.8 million with a balance of $11.4 million.

2008 General Obligation Bonds There has been $140 million appropriated for the Fix the Streets package. To date, $34.8 million has been spent and $33.2 million encumbered and committed. There is a balance of $71.8 million. December expenditures totaled $4 million. The following is the project with the highest expenditure:

Citywide – Local Match $634,000

2005 General Obligation Bonds Expenditures in December totaled $1.4 million and of that amount $358,000 was spent on the 41st West – Young to West 31st Street North project. Life to date expenditures total $230 million and encumbrances and commitments total $14.9 million. Appropriations to date are $273.8 million. There is an appropriation balance of $28.8 million.

TMUA Water Capital Funds Expenditures in December totaled $828,000. Of that amount, $426,000 was spent on Water Main Replacement – Citywide (Water Distribution Mains). To date $334.2 million has been spent in these funds. Current appropriations total to $378 million. There is now a $36.7 million appropriation balance remaining to be spent on approved projects.

TMUA Sewer Capital Funds December expenditures in these funds totaled $2.6 million with $455,000 being spent on the Sewer Rehab Area- wide (Main Sewer Lines & Appurt) project. Encumbrances and commitments total $39.9 million. The to-date appropriations total to $181.3 million. There is now a $30.9 million appropriation balance in all the TMUA sewer capital funds.

*Funds 6037-6039, 6050 have been de-activated and therefore have been removed from the report

-13- MAJOR CAPITAL IMPROVEMENTS CONSTRUCTION FUNDS SUMMARY As of December 31, 2011

To-Date Expenditures Encumb./ Pct. Expend. Appropriations Current Mo. To-Date Committ. Comm./Enc. Balance

Fund 6011 2008 Sales Tax Special Temporary Streets Fund $6,473,000 $727 $399,346 $626,070 16% $5,447,584

Fund 6009 2006 Special Extended Sales Tax Fund $401,742,000 $4,419,822 $272,906,070 $27,709,367 75% $101,126,563

Fund 6008 and Fund 6010 2001 Third Penny Sales Tax and 2006 Advance Funded Sales Tax $388,852,078 $290,735 $372,428,766 $4,983,640 97% $11,438,586

Funds 6321-6323 2008 General Obligation Bonds $140,000,000 $3,708,854 $34,884,692 $33,235,646 49% $71,879,662 - 14 - Funds 6315-6320 2005 General Obligation Bonds $273,800,000 $1,416,616 $230,021,577 $14,905,676 89% $28,872,747

Fund 6021, 6023 - 6029 TMUA--Water Capital Fund $378,340,798 $828,327 $334,216,162 $7,325,978 90% $36,798,614

Funds 6031 - 6039, 6050 - 6056 TMUA-Sanitary Sewer Capital Funds $181,372,098 $2,590,165 $110,460,071 $39,964,033 83% $30,943,672

* Fund 6007 (1996 Sales Tax) and Funds 6311-6312 (1999 General Obligation Bonds) are now substantially complete and have been removed from the report.

**Funds 6037-6039, 6050 have been de-activated and therefore have been removed from the report CITY OF TULSA GENERAL FUND BALANCE SHEET (Budgetary Basis) December 31, 2011 and 2010

FY 2011-2012 FY 2010-2011

ASSETS

Cash and cash equivalents$ 37,202,516 $ 33,418,424 Due from other funds 187,607 235,958

Total assets$ 37,390,123 $ 33,654,382

LIABILITIES AND FUND BALANCE

Liabilities: Due to other funds$ 1,333,056 $ 763,993 Reserve for encumbrances 12,991,581 13,035,996

14,324,637 13,799,989 Fund Balance: Reserved Reserve for imprest cash 112,865 113,515 Reserve for arbitrage - 64,163 Reserve for MTTA 200,862 200,862 Reserve for body armor 403,120 403,120 Reserve for HUD refund 1,284,831 - Unreserved Designated for operations 15,234,000 13,674,000 Designated for OPEB 1,797,000 - Undesignated 4,032,808 5,398,733

Total fund balance 23,065,486 19,854,393

Total liabilities and fund balance $ 37,390,123 $ 33,654,382

-15- CITY OF TULSA GENERAL FUND STATEMENTS OF REVENUES, EXPENDITURES, ENCUMBRANCES AND CHANGES IN FUND BALANCE (BUDGETARY BASIS) 6 MONTHS ENDED December 31, 2011 AND 2010 (50% OF THE FISCAL YEAR)

Percent Change FY 2011-2012 Percent FY 2011-2012 FY 2010-2011 Between Original Budget of REVENUES Year To Date Year To Date Years and Revisions Budget Taxes$ 90,097,187 $ 84,981,160 6.02$ 178,195,000 50.56 Licenses & permits 3,717,819 2,837,364 31.03 5,524,000 67.30 Intergovernmental revenue 3,774,368 4,863,084 (22.39) 8,111,000 46.53 Charges for services 18,349,539 19,209,905 (4.48) 35,112,000 52.26 Fines & forfeitures 5,444,835 5,017,444 8.52 10,541,000 51.65 Investment income 1,837,520 1,700,681 8.05 5,277,000 34.82 Transfers in 437,498 1,337,500 (67.29) 875,000 50.00 Miscellaneous 2,303,877 1,732,315 32.99 2,416,000 95.36 Total revenue 125,962,643 121,679,453 3.52 246,051,000 51.19

EXPENDITURES & ENCUMBRANCES Personal services 88,956,556 85,565,448 3.96 180,808,799 49.20 Materials and supplies 2,796,434 2,202,900 26.94 9,491,062 29.46 Other services General 16,401,927 17,103,418 (4.10) 38,657,029 42.43 Internal billings 6,847,377 6,054,666 13.09 13,403,076 51.09 Intergovernmental transfers 1,375,500 1,252,000 9.86 1,664,000 82.66 Transfers 13,864,643 9,112,518 52.15 17,444,000 79.48 Total expenditures and encumbrances 130,242,437 121,290,950 7.38 261,467,966 49.81

Excess (deficiency) of revenue over expenditures and encumbrances (4,279,794) 388,503 $ (15,416,966)

Beginning fund balance, budgetary basis 31,814,618 16,493,786 Prior period adjustments (4,469,338) 2,972,104

Ending fund balance, budgetary basis$ 23,065,486 $ 19,854,393

-16- GENERAL FUND YEAR TO DATE EXPENDITURES, ENCUMBRANCES, AND COMMITMENTS THROUGH DECEMBER 31, 2011

General Fund Fund expenditures, expenditures encumbrancesand encumbrances and commitments for the month for ending the fiscal December year ending 31, 2011 June exceeded 30, 2009 General Fund expenditures,expenditures and encumbrances encumbrances and for commitments the month ending for the October fiscal year 31, ending 2011 exceeded June 30, $ 2008 exceeded$141exceeded million. $262 $265 This million million represents - - 98.2% 98.5% 54.46% of of the the of$268 $270 the million $261.5million inmillion in appropriations. appropriations. in appropriations. The The spending spending levels levels in in FY FY 07 06 andand FY FY 08 07 were were 98.4% 98% and and 98.4%, 98.5%, respectively. respectively. Year-end Year-end encumbrances encumbrances of of $10.4 $7.5 million million will will be be carriedHistorically,carried over over into into encumbrances FY FY 10. 09. For For made the the year, year, early pre-audit pre-audit in the expenditures fiscal expenditures year include exceeded exceeded annual pre-audit pre-audit contracts revenues revenues that by by elevate about about $2.5spending$12.3 million. million. levels. It Immediate was anticipated, spending in formulating of the prior theyear's FY carryover 08 budget, also that contributes some fund to balance higher spending would be earlyused. in In the addition, fiscal costs year. associated Transfers with to Other the Decembe Funds isr ice elevated storm recovery because required of the timing further of use quarterly of fund transfers.balance. Grants As of year to agencies end all isof elevated the reimbursements as a result of from MTTA FEMA receiving have not most been of itsreceived; allocation so the in the 5% firstThecash six amounts operating months in reserve of this the report year. was They forless the need than period thefully local funded. ending dollars June However, as 30,their 2009 Federal it is have expected revenues not thatbeen are the notaudited remaining received and untiladjustmentsreimbursements after January. may will be necessary. fully fund the Final cash audited operating expenditures reserve in will FY 09. be published in the Comprehensive Annual Financial Report. ActualThe amounts expenditures in this and report encumbrances for the periodfor the currentending fiscal June year 30, 2008 through have December not been 2011 audited are $14.3 and millionadjustments more may than bethose necessary. for last fiscal Final year's audited comparable expenditures period. will be published in the Comprehensive Annual Financial Report.

- 17 - GENERAL FUND YEAR T0 DATE EXPENDITURES, ENCUMBRANCES AND COMMITMENTS THROUGH DECEMBER 31, 2011

Current Expenditures/ % Budget Appropriations Encumbrances Estimate * Actual Commitments Balance

DEPARTMENT MUNICIPAL COURT $ 2,793,000 $ 1,373,000 50.3 49.2 $ 0 $ 1,420,000

POLICE 79,393,000 39,660,000 50.8 50.0 49,000 39,684,000

FIRE 61,901,000 32,735,000 50.6 53.2 204,000 28,962,000

INFORMATION TECHNOLOGY 18,026,000 9,058,000 53.9 53.8 632,000 8,336,000

PARK & RECREATION 9,114,000 6,733,000 52.2 73.9 0 2,381,000

GILCREASE MUSEUM 2,787,000 2,783,000 50.1 99.9 0 4,000

PERFORMING ARTS 2,269,000 1,230,000 50.6 54.2 0 1,039,000

WORKING IN NEIGHBORHOODS 5,066,000 2,696,000 52.1 53.2 0 2,370,000

PLANNING & ECONOMIC DEVELOPMENT 5,939,000 2,315,000 50.5 39.0 0 3,624,000

PW STREETS & STORMWATER 22,220,000 11,316,000 54.5 51.4 112,000 10,792,000

PW WATER & SEWER 46,000 27,000 50.0 58.7 0 19,000

PW ENGINEERING 8,658,000 3,411,000 53.1 39.4 0 5,247,000

HUMAN RIGHTS 651,000 335,000 50.0 51.5 0 316,000

LEGAL DEPARTMENT 3,226,000 1,512,000 51.3 46.9 0 1,714,000

HUMAN RESOURCES 4,482,000 2,328,000 57.1 51.9 0 2,154,000

ELECTED & ADMINISTRATION 3,389,000 1,458,000 50.0 43.0 0 1,931,000

GENERAL GOVERNMENT 3,441,000 2,540,000 59.0 73.8 0 901,000

FINANCE 8,122,000 4,263,000 54.3 52.5 0 3,859,000

COMMUNICATIONS 852,000 402,000 50.0 47.2 0 450,000

TRANSFERS TO OTHER FUNDS 9,994,000 7,035,000 52.0 70.4 0 2,959,000

GRANTS TO AGENCIES 9,099,000 8,205,000 50.0 90.2 0 894,000

TOTAL GENERAL FUND $ 261,468,000 $ 141,415,000 51.7 54.5 $ 997,000 $ 119,056,000

* Estimate shows what the percentage would be if prior year carryover encumbrances and the current year's departmental budgets were spent on a uniform monthly basis.

-18-

Tulsa Metropolitan Utility Authority Financial Management Report Water Operating Fund (7020) As of December 31, 2011 Budgetary Basis Actual Total Year-to-Date YTD Percent of Resources Estimate Actual Estimate Budget

Appropriated Fund Balance $ 10,041,000 $ 10,041,000 100.0% 100.0% Revenues: Licenses/Permits 250,000 235,000 49.6% 94.0% Charges for Services 84,209,000 53,290,000 54.4% 63.3% Other Charges 3,129,000 2,124,000 55.2% 67.9% Interest Income 1,100,000 436,000 50.0% 39.6% Miscellaneous Revenue 691,000 523,000 26.8% 75.7% Total Revenue 89,379,000 56,608,000 54.1% 63.3% Total Resources $ 99,420,000 $ 66,649,000 48.7% 67.0%

Year-to-Date Actual Expenditures/ Actual Total Encumbrances/ YTD Percent of Budget Appropriations/Commitments Appropriation Commitments Estimate Budget Balance

PW - Water & Sewer Department Personal Services$ 17,325,000 $ 8,208,000 50.0% 47.4%$ 9,117,000 Materials and Supplies 10,265,000 7,179,000 57.1% 69.9% 3,086,000 Other Services and Charges 31,181,000 16,262,000 51.9% 52.2% 14,919,000 Capital Outlay 10,370,000 5,338,000 57.5% 51.5% 5,032,000 PW - Streets & Stormwater Department Personal Services 343,000 145,000 50.0% 42.3% 198,000 Materials and Supplies 159,000 122,000 82.2% 76.7% 37,000 Other Services and Charges 369,000 288,000 76.4% 78.0% 81,000 PW - Engineering Department Personal Services 3,119,000 1,494,000 50.0% 47.9% 1,625,000 Materials and Supplies 42,000 22,000 50.0% 52.4% 20,000 Other Services and Charges 399,000 201,000 53.8% 50.4% 198,000 Capital Outlay 191,000 105,000 77.5% 55.0% 86,000 Planning & Economic Development Personal Services 942,000 415,000 50.0% 44.1% 527,000 Materials and Supplies 18,000 5,000 62.1% 27.8% 13,000 Other Services and Charges 82,000 47,000 50.0% 57.3% 35,000 Communications Department Personal Services 490,000 212,000 50.0% 43.3% 278,000 Materials and Supplies 4,000 - 50.0% 0.0% 4,000 Other Services and Charges 15,000 2,000 50.0% 13.3% 13,000 Finance Department Personal Services 1,894,000 843,000 50.0% 44.5% 1,051,000 Materials and Supplies 269,000 133,000 50.0% 49.4% 136,000 Other Services and Charges 600,000 322,000 50.0% 53.7% 278,000 Human Resources Department Personal Services 39,000 13,000 50.0% 33.3% 26,000 Materials and Supplies 1,000 - 50.0% 0.0% 1,000 Other Services and Charges 15,000 6,000 50.0% 40.0% 9,000 IT Department Personal Services 1,462,000 665,000 50.0% 45.5% 797,000 Materials and Supplies 256,000 167,000 82.6% 65.2% 89,000 Other Services and Charges 1,262,000 641,000 71.0% 50.8% 621,000 Capital Outlay 243,000 18,000 53.6% 7.4% 225,000 Debt Service 13,260,000 4,810,000 50.0% 36.3% 8,450,000 Transfer/Projects 4,805,000 2,630,000 50.0% 54.7% 2,175,000 Total Appropriations/Commitments $ 99,420,000 $ 50,293,000 52.7% 50.6%$ 49,127,000

- 21 - Tulsa Metropolitan Utility Authority Water Operating Fund (7020) Schedule of Monthly Budgeted Revenue Estimates, Water Billings, and Collections As of December 31, 2011 Budgetary Basis

Actual Actual Month Budget Actual Billings* % of Budget Actual Collections** % of Billings % of Budget Jul$ 7,911,000 $ 10,462,000 132%$ 7,889,000 75% 100% Aug 8,768,000 11,875,000 135% 11,916,000 100% 136% Sep 8,560,000 10,184,000 119% 10,631,000 104% 124% Oct 7,387,000 7,791,000 105% 9,713,000 125% 131% Nov 6,745,000 6,675,000 99% 7,232,000 108% 107% Dec 6,421,000 6,303,000 98% 6,435,000 102% 100% Jan 6,424,000 Feb 5,996,000 Mar 5,673,000 Apr 6,206,000 May 6,527,000 Jun 7,591,000 -

22 Total$ 84,209,000 $ 53,290,000 63%$ 53,816,000 101% 64% - * Revenue estimates from City Departments are included in monthly budget estimates. ** Water accounts receivable were $5,375,095 as of December 31, 2011 with $4,154,563 (0 - 30 Days), $786,465 (31 - 60 Days), $258,888 (61 - 90 Days) and $175,179 (Over 91 Days).

Monthly Budget Estimates Budget Compared to Actual Billings and Collections Billings

$12,000,000 Collections $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Tulsa Metropolitan Utility Authority Water Operating Fund (7020) Comparison of Monthly Budget Estimates, Water Billings, and Consumption to Prior Year As of December 31, 2011 Budgetary Basis

Budget Estimate Actual Billings Billed Consumption (Billion Gallons) Month FY10-11 FY11-12 Change FY10-11 FY11-12 Change FY10-11 FY11-12 Change Jul$ 7,400,000 $ 7,911,000 7%$ 7,405,000 $ 10,462,000 41% 3.3 4.4 34% Aug 8,200,000 8,768,000 7% 8,805,000 11,875,000 35% 4.0 5.0 25% Sep 8,000,000 8,560,000 7% 9,071,000 10,184,000 12% 4.1 4.3 6% Oct 6,900,000 7,387,000 7% 7,168,000 7,791,000 9% 3.2 3.3 5% Nov 6,300,000 6,745,000 7% 6,540,000 6,675,000 2% 2.7 2.6 -5% Dec 6,000,000 6,421,000 7% 6,128,000 6,303,000 3% 2.4 2.5 3% Jan 6,000,000 6,424,000 7% 5,906,000 - 2.5 Feb 5,600,000 5,996,000 7% 5,550,000 - 2.4 Mar 5,300,000 5,673,000 7% 5,041,000 - 2.1 Apr 5,800,000 6,206,000 7% 6,064,000 - 2.6 May 6,100,000 6,527,000 7% 6,717,000 - 2.8

- Jun 7,100,000 7,591,000 7% 7,491,000 - 3.2 23

- Total$ 78,700,000 $ 84,209,000 7%$ 81,886,000 $ 53,290,000 NA 35.0 22.1 NA City of Tulsa Average Monthly Water Pumpage As of December 31, 2011 (Millions of Gallons per Day)

Month 10 Year Avg 09 Avg 10 Avg 11 Avg 11 Total Jan 91.1 89.3 97.7 87.0 2,696.6 Feb 88.4 90.2 89.1 99.0 2,772.2 Mar 86.2 87.9 86.9 91.4 2,832.7 Apr 93.1 88.9 95.8 98.6 2,956.6 May 99.7 97.1 102.1 101.6 3,149.9 Jun 115.1 132.1 119.6 138.0 4,139.3 Jul 134.9 142.8 126.2 183.3 5,500.1 Aug 138.7 130.0 162.0 161.5 5,007.5 Sep 115.6 103.4 121.2 130.3 3,908.1 Oct 101.8 91.3 112.4 110.6 3,429.3 Nov 90.3 94.9 96.5 89.5 2,685.7 Dec 85.3 91.4 84.6 84.7 2,625.6

200

10 Year Avg 11 Avg 134247.29 180 10 Avg 66347.48 09 Avg

160

140

120 Millions of Gallons per Day per of Gallons Millions

100

60 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

- 24 - City of Tulsa Total Rainfall (Inches) As of December 31, 2011 30 Year 3 Year Month Normal 2008 2009 2010 2011 Average Jan 1.60 0.88 0.68 2.36 0.57 1.20 Feb 1.95 2.01 2.28 2.03 2.57 2.29 Mar 3.57 4.73 5.02 3.25 1.00 3.09 Apr 3.95 9.33 4.34 2.08 5.41 3.94 May 6.11 9.60 6.80 5.23 3.58 5.20 Jun 4.72 9.43 3.51 7.07 1.47 4.02 Jul 2.96 4.64 2.84 4.67 0.36 2.62 Aug 2.85 4.59 3.76 1.19 5.76 3.57 Sep 4.76 4.40 8.29 2.85 2.58 4.57 Oct 4.05 2.75 6.14 1.23 1.87 3.08 Nov 3.47 1.96 0.58 1.96 5.37 2.64 Dec 2.43 1.77 1.88 0.55 1.45 1.29 Total 42.42 56.09 46.12 34.47 31.99 37.53

3 Year Avg. 8 134247.29 66347.48 2011

2010 7 2009

5 Inches

0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

- 25 - Tulsa Metropolitan Utility Authority Financial Management Report Sewer Operating Fund (7030) As of December 31, 2011 Budgetary Basis Actual Total Year-to-Date YTD Percent of Resources Estimate Actual Estimate Budget

Appropriated Fund Balance $ 16,425,000 $ 16,425,000 100.0% 100.0% Revenues: Licenses/Permits 299,000 61,000 49.8% 20.4% Charges for Services 70,767,000 36,064,000 50.3% 51.0% Other Charges 2,363,000 720,000 52.7% 30.5% Interest Income 457,000 225,000 50.1% 49.2% Miscellaneous Revenue 14,304,000 14,183,000 98.5% 99.2% Total Revenue 88,190,000 51,253,000 58.1% 58.1% Total Resources $ 104,615,000 $ 67,678,000 49.0% 64.7%

Year-to-Date Actual Expenditures/ Actual Total Encumbrances/ YTD Percent of Budget Appropriations/Commitments Appropriation Commitments Estimate Budget Balance

PW - Water & Sewer Department Personal Services$ 14,573,000 $ 6,581,000 50.0% 45.2%$ 7,992,000 Materials and Supplies 4,474,000 2,699,000 56.2% 60.3% 1,775,000 Other Services and Charges 27,730,000 14,480,000 56.5% 52.2% 13,250,000 Capital Outlay 13,733,000 5,242,000 61.1% 38.2% 8,491,000 PW - Streets & Stormwater Department Personal Services 229,000 99,000 50.0% 43.2% 130,000 Materials and Supplies 158,000 117,000 87.7% 74.1% 41,000 Other Services and Charges 523,000 327,000 68.2% 62.5% 196,000 PW - Engineering Department Personal Services 2,514,000 1,197,000 50.0% 47.6% 1,317,000 Materials and Supplies 42,000 22,000 50.0% 52.4% 20,000 Other Services and Charges 1,757,000 233,000 71.2% 13.3% 1,524,000 Capital Outlay 98,000 39,000 62.8% 39.8% 59,000 Planning & Economic Development Personal Services 477,000 227,000 50.0% 47.6% 250,000 Materials and Supplies 9,000 2,000 54.9% 22.2% 7,000 Other Services and Charges 18,000 7,000 50.0% 38.9% 11,000 Communications Department Personal Services 407,000 176,000 50.0% 43.2% 231,000 Materials and Supplies 3,000 - 50.0% 0.0% 3,000 Other Services and Charges 12,000 2,000 50.0% 16.7% 10,000 Finance Department Personal Services 1,166,000 525,000 50.0% 45.0% 641,000 Materials and Supplies 55,000 16,000 50.0% 29.1% 39,000 Other Services and Charges 494,000 267,000 50.0% 54.0% 227,000 Human Resources Department Personal Services 27,000 9,000 50.0% 33.3% 18,000 Materials and Supplies 1,000 - 50.0% 0.0% 1,000 Other Services and Charges 10,000 4,000 50.0% 40.0% 6,000 IT Department Personal Services 418,000 168,000 50.0% 40.2% 250,000 Materials and Supplies 78,000 51,000 83.0% 65.4% 27,000 Other Services and Charges 332,000 146,000 70.3% 44.0% 186,000 Capital Outlay 49,000 49,000 100.0% 100.0% - WIN Department Personal Services 102,000 49,000 50.0% 48.0% 53,000 Materials and Supplies 1,000 - 50.0% 0.0% 1,000 Other Services and Charges 1,000 - 50.0% 0.0% 1,000 Debt Service 14,234,000 6,914,000 50.0% 48.6% 7,320,000 Transfer/Projects 20,890,000 17,425,000 50.0% 83.4% 3,465,000 Total Appropriations/Commitments $ 104,615,000 $ 57,073,000 54.1% 54.6%$ 47,542,000

- 26 - Tulsa Metropolitan Utility Authority Sewer Operating Fund (7030) Schedule of Monthly Budgeted Revenue Estimates, Sewer Billings, and Collections As of December 31, 2011 Budgetary Basis

Actual Actual Month Budget Actual Billings* % of Budget Actual Collections** % of Billings % of Budget Jul$ 5,963,000 $ 6,385,000 107%$ 5,616,000 88% 94% Aug 5,855,000 6,414,000 110% 6,809,000 106% 116% Sep 5,855,000 6,442,000 110% 6,220,000 97% 106% Oct 5,856,000 5,540,000 95% 6,231,000 112% 106% Nov 6,074,000 5,650,000 93% 5,439,000 96% 90% Dec 5,964,000 5,633,000 94% 5,567,000 99% 93% Jan 5,964,000 Feb 5,748,000 Mar 5,639,000 Apr 5,748,000 May 5,965,000 Jun 6,136,000 - 27 Total$ 70,767,000 $ 36,064,000 51%$ 35,882,000 99% 51% -

* Revenue estimates from City Departments are included in monthly budget estimates. ** Sewer accounts receivable were $4,332,167 as of December 31, 2011 with $3,729,501 (0 - 30 Days), $460,398 (31 - 60 Days), $89,074 (61 - 90 Days) and $53,194 (Over 91 Days).

Budget Monthly Budget Estimates Compared to Actual Billings and Collections Billings $8,000,000 Collections $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $- Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Tulsa Metropolitan Utility Authority Sewer Operating Fund (7030) Comparison of Monthly Budget Estimates and Sewer Billings to Prior Year As of December 31, 2011 Budgetary Basis

Budget Estimate Actual Billings Month FY10-11 FY11-12 Change FY10-11 FY11-12 Change Jul$ 5,500,000 $ 5,963,000 8%$ 5,458,000 $ 6,385,000 17% Aug 5,400,000 5,855,000 8% 5,718,000 6,414,000 12% Sep 5,400,000 5,855,000 8% 5,892,000 6,442,000 9% Oct 5,400,000 5,856,000 8% 5,199,000 5,540,000 7% Nov 5,600,000 6,074,000 8% 5,346,000 5,650,000 6% Dec 5,500,000 5,964,000 8% 5,321,000 5,633,000 6% 28- - Jan 5,500,000 5,964,000 8% 5,462,000 - Feb 5,300,000 5,748,000 8% 5,224,000 - Mar 5,200,000 5,639,000 8% 4,500,000 - Apr 5,300,000 5,748,000 8% 5,125,000 - May 5,500,000 5,965,000 8% 5,511,000 - Jun 5,659,000 6,136,000 8% 5,666,000 - Total$ 65,259,000 $ 70,767,000 8%$ 64,422,000 $ 36,064,000 NA Tulsa Authority for the Recovery of Energy Financial Management Report TARE Operating Fund (3623) As of December 31, 2011 Budgetary Basis Actual Total Year-to-Date YTD Percent of Resources Estimate Actual Estimate Budget

Appropriated Fund Balance $ 6,660,000 $ 6,660,000 100.0% 100.0% Revenues: Charges for Services 22,227,000 10,755,000 49.2% 48.4% Interest Income 186,000 114,000 50.0% 61.3% Miscellaneous Revenue 97,000 118,000 50.5% 121.6% Total Revenue 22,510,000 10,987,000 49.2% 48.8% Total Resources $ 29,170,000 $ 17,647,000 60.8% 60.5%

Year-to-Date Actual Expenditures/ Actual Total Encumbrances/ YTD Percent of Budget Appropriations/Commitments Appropriation Commitments Estimate Budget Balance

PW - Water & Sewer Department Personal Services$ 139,000 $ 66,000 50.0% 47.5%$ 73,000 Materials and Supplies 7,000 4,000 50.0% 57.1% 3,000 Other Services and Charges 6,000 2,000 50.0% 33.3% 4,000 PW - Streets & Stormwater Department Personal Services 2,607,000 1,140,000 50.0% 43.7% 1,467,000 Materials and Supplies 458,000 125,000 54.6% 27.3% 333,000 Other Services and Charges 19,395,000 9,658,000 50.9% 49.8% 9,737,000 Capital Outlay 5,152,000 1,739,000 51.7% 33.8% 3,413,000 Communications Department Personal Services 131,000 57,000 50.0% 43.5% 74,000 Materials and Supplies 1,000 - 50.0% 0.0% 1,000 Other Services and Charges 4,000 1,000 50.0% 25.0% 3,000 Finance Department Personal Services 358,000 162,000 50.0% 45.3% 196,000 Materials and Supplies 13,000 3,000 50.0% 23.1% 10,000 Other Services and Charges 159,000 86,000 50.0% 54.1% 73,000 Human Resources Department Personal Services 7,000 2,000 50.0% 28.6% 5,000 Other Services and Charges 2,000 1,000 50.0% 50.0% 1,000 IT Department Personal Services 340,000 136,000 50.0% 40.0% 204,000 Materials and Supplies 63,000 42,000 83.2% 66.7% 21,000 Other Services and Charges 270,000 119,000 70.3% 44.1% 151,000 Transfer 58,000 58,000 100.0% 100.0% - Total Appropriations/Commitments $ 29,170,000 $ 13,401,000 51.2% 45.9%$ 15,769,000

- 29 - Tulsa Authority for Recovery of Energy Tulsa Authority for Recovery of Energy Fund (3623) Schedule of Monthly Budgeted Revenue Estimates, Refuse Billings, and Collections As of December 31, 2011 Budgetary Basis

Actual Actual Month Budget Actual Billings * % of Budget Actual Collections ** % of Billings % of Budget Jul$ 1,793,000 $ 1,798,000 100%$ 1,694,000 94% 94% Aug 1,792,000 1,787,000 100% 1,897,000 106% 106% Sep 1,792,000 1,789,000 100% 1,715,000 96% 96% Oct 1,794,000 1,791,000 100% 1,807,000 101% 101% Nov 1,878,000 1,799,000 96% 1,778,000 99% 95% Dec 1,883,000 1,791,000 95% 1,738,000 97% 92% Jan 1,883,000 Feb 1,882,000 Mar 1,882,000 Apr 1,884,000 May 1,881,000

30 - - Jun 1,883,000 Total$ 22,227,000 $ 10,755,000 48%$ 10,629,000 99% 48%

* Revenue estimates from City Departments are included in monthly budget estimates. ** TARE accounts receivable were $1,451,859 as of December 31, 2011 with $1,113,643 (0 - 30 Days), $225,180 (31 - 60 Days), $60,796 (61 - 90 Days) and $52,240 (Over 91 Days).

Monthly Budget Estimates Budget Compared to Actual Billings and Collections Billings

$1,950,000 Collections $1,900,000 $1,850,000 $1,800,000 $1,750,000 $1,700,000 $1,650,000 $1,600,000 $1,550,000 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Tulsa Authority for Recovery of Energy Tulsa Authority for Recovery of Energy Fund (3623) Comparison of Monthly Budget Estimates and Refuse Billings to Prior Year As of December 31, 2011

Budget Estimate Actual Billings Month FY 10-11 FY 11-12 Change FY 10-11 FY 11-12 Change Jul$ 1,797,000 $ 1,793,000 0%$ 1,797,000 $ 1,798,000 0% Aug 1,797,000 1,792,000 0% 1,797,000 1,787,000 -1% Sep 1,800,000 1,792,000 0% 1,794,000 1,789,000 0% Oct 1,798,000 1,794,000 0% 1,794,000 1,791,000 0% Nov 1,797,000 1,878,000 5% 1,811,000 1,799,000 -1% Dec 1,799,000 1,883,000 5% 1,803,000 1,791,000 -1% 31- - Jan 1,798,000 1,883,000 5% 1,801,000 - Feb 1,797,000 1,882,000 5% 1,793,000 - Mar 1,800,000 1,882,000 5% 1,800,000 - Apr 1,796,000 1,884,000 5% 1,794,000 - May 1,793,000 1,881,000 5% 1,788,000 - Jun 1,794,000 1,883,000 5% 1,787,000 - Total$ 21,566,000 $ 22,227,000 3%$ 21,559,000 $ 10,755,000 NA Stormwater Drainage Advisory Board Financial Management Report Stormwater Enterprise Fund (7010) As of December 31, 2011 Budgetary Basis Actual Total Year-to-Date YTD Percent of Resources Estimate Actual Estimate Budget

Appropriated Fund Balance $ 2,947,000 $ 2,947,000 100.0% 100.0%

Licenses/Permits 90,000 73,000 50.0% 81.1% Charges for Services 22,943,000 11,236,000 50.0% 49.0% Interest Income 200,000 69,000 50.0% 34.5% Miscellaneous Revenue 260,000 119,000 50.0% 45.8% Total Revenue 23,493,000 11,497,000 50.0% 48.9% Total Resources $ 26,440,000 $ 14,444,000 55.6% 54.6%

Year-to-Date Actual Expenditures/ Actual Total Encumbrances/ YTD Percent of Budget Appropriations/Commitments Appropriation Commitments Estimate Budget Balance

PW - Water & Sewer Department Personal Services$ 732,000 $ 354,000 50.0% 48.4%$ 378,000 Materials and Supplies 107,000 27,000 73.1% 25.2% 80,000 Other Services and Charges 116,000 58,000 59.1% 50.0% 58,000 PW - Streets & Stormwater Department Personal Services 4,874,000 1,953,000 50.0% 40.1% 2,921,000 Materials and Supplies 887,000 617,000 57.6% 69.6% 270,000 Other Services and Charges 10,068,000 6,770,000 57.5% 67.2% 3,298,000 Capital Outlay 1,872,000 929,000 63.8% 49.6% 943,000 PW - Engineering Department Personal Services 2,305,000 1,100,000 50.0% 47.7% 1,205,000 Materials and Supplies 43,000 19,000 50.0% 44.2% 24,000 Other Services and Charges 725,000 349,000 61.3% 48.1% 376,000 Capital Outlay 77,000 43,000 75.5% 55.8% 34,000 Planning & Economic Development Personal Services 576,000 268,000 50.0% 46.5% 308,000 Materials and Supplies 14,000 3,000 55.8% 21.4% 11,000 Other Services and Charges 51,000 19,000 50.0% 37.3% 32,000 Communications Department Personal Services 144,000 62,000 50.0% 43.1% 82,000 Materials and Supplies 1,000 - 50.0% 0.0% 1,000 Other Services and Charges 4,000 1,000 50.0% 25.0% 3,000 Finance Department Personal Services 429,000 193,000 50.0% 45.0% 236,000 Materials and Supplies 27,000 10,000 50.0% 37.0% 17,000 Other Services and Charges 175,000 94,000 50.0% 53.7% 81,000 Human Resources Department Personal Services 14,000 5,000 50.0% 35.7% 9,000 Other Services and Charges 5,000 2,000 50.0% 40.0% 3,000 IT Department Personal Services 235,000 94,000 50.0% 40.0% 141,000 Materials and Supplies 44,000 29,000 82.9% 65.9% 15,000 Other Services and Charges 187,000 82,000 70.3% 43.9% 105,000 Transfer/Projects 2,728,000 1,478,000 50.0% 54.2% 1,250,000 Total Appropriations/Commitments $ 26,440,000 $ 14,559,000 54.8% 55.1%$ 11,881,000

- 32 - Stormwater Drainage Advisory Board Stormwater Enterprise Fund (7010) Schedule of Monthly Budgeted Revenue Estimates, Stormwater Billings, and Collections As of December 31, 2011 Budgetary Basis

Actual Actual Month Budget Actual Billings* % of Budget Actual Collections** % of Billings % of Budget Jul$ 1,913,000 $ 1,964,000 103%$ 1,746,000 89% 91% Aug 1,911,000 1,781,000 93% 1,991,000 112% 104% Sep 1,912,000 1,872,000 98% 1,625,000 87% 85% Oct 1,912,000 1,872,000 98% 1,892,000 101% 99% Nov 1,912,000 1,869,000 98% 1,818,201 97% 95% Dec 1,911,000 1,863,000 97% 1,884,000 101% 99% Jan 1,913,000 Feb 1,911,000 Mar 1,912,000 Apr 1,912,000 May 1,912,000 Jun 1,912,000

33- - Total$ 22,943,000 $ 11,221,000 49%$ 10,956,201 98% 48%

* Revenue estimates from City Departments are included in monthly budget estimates. ** Stormwater accounts receivable were $1,666,529 as of December 31, 2011 with $1,176,224 (0 - 30 Days), $141,404 (31 - 60 Days), $46,457 (61 - 90 Days) and $302,444 (Over 91 Days).

Monthly Budget Estimates Budget Compared to Actual Billings and Collections Billings Collections $2,500,000

$2,000,000

$1,500,000

$1,000,000

$500,000

$- Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Stormwater Drainage Advisory Board Stormwater Enterprise Fund (7010) Comparison of Monthly Budget Estimates Stormwater Billings to Prior Year As of December 31, 2011 Budgetary Basis

Budget Estimate Actual Billings Month FY10-11 FY11-12 Change FY10-11 FY11-12 Change Jul$ 1,866,000 $ 1,913,000 3%$ 2,318,000 $ 1,964,000 -15% Aug 1,866,000 1,911,000 2% 1,412,000 1,781,000 26% Sep 1,866,000 1,912,000 2% 1,853,000 1,872,000 1% Oct 1,866,000 1,912,000 2% 1,866,000 1,872,000 0% Nov 1,867,000 1,912,000 2% 1,869,000 1,869,000 0% Dec 1,867,000 1,911,000 2% 1,870,000 1,863,000 0% Jan 1,867,000 1,913,000 2% 1,867,000 - Feb 1,867,000 1,911,000 2% 1,869,000 - 34- - Mar 1,867,000 1,912,000 2% 1,868,000 - Apr 1,867,000 1,912,000 2% 1,864,000 - May 1,867,000 1,912,000 2% 1,872,000 - Jun 1,867,000 1,912,000 2% 1,847,000 - Total$ 22,400,000 $ 22,943,000 2%$ 22,375,000 $ 11,221,000 NA Stormwater Fee-In-Lieu Funds As of December 31, 2011

Fees Collected Interest Earned Expenditures Appropriated Encumbered/ Available Fund Name December FYTD December FYTD for Projects December Committed for Projects

Mingo Creek (6101) $1,552 $31,757 $944 $5,880 $207,968 $0 $62,931 $556,202 Haikey Creek (6102) 0 66,154 541 3,331 $78,628 0 0 362,489 Fry Ditch No. 2 (6103) 0 62,976 544 3,410 $360,000 0 0 83,870 Vensel Creek (6104) 0 0 955 6,091 562,363 0 509,117 216,622 Flat Rock Creek (6105) 0 58,476 397 2,317 0 0 0 324,107 Coal Creek (6106) 4,131 5,450 264 1,659 24,968 0 0 191,861 Harlow Creek (6107) 0 0 149 951 0 0 0 121,642 35- - Mooser Creek (6108) 0 0 746 4,759 0 0 0 608,621 Cherry Creek (6109) 0 0 433 2,762 0 0 0 353,211 Spunky Creek (6110) 0 18,435 273 1,704 15,325 0 0 203,845 Fred Creek (6111) 0 213 187 1,192 0 0 0 152,422 Downtown (6112) 0 4,786 223 1,399 0 0 0 181,664 Parkview (6113) 0 0 82 521 0 0 0 66,659 Perryman (6114) 0 2,079 317 2,021 227,000 0 0 31,232 Joe Creek (6115) 19,653 31,729 110 595 54 0 0 103,642 Crow Creek (6116) 101 101 161 1,028 36,542 0 0 95,058 Hager/Riverside (6117) 0 0 86 546 25,086 0 0 44,751 ------Total $25,437 $282,155 $6,409 $40,166 $1,537,934 $0 $572,048 $3,697,898 Tulsa Airport Authority Financial Management Report Airport Operating Fund (3701) As of December 31, 2011

Total Year-to-Date YTD Percent of Resources Estimate Actual Estimate Budget

Appropriated Fund Balance $ 183,000 $ 183,000 100.0% 100.0% Revenues: Interest Income 65,000 22,000 49.2% 33.8% Transfers In 13,315,000 6,338,000 50.0% 47.6% Miscellaneous Revenue 0 25,000 N/A N/A Total Revenue 13,380,000 6,385,000 50.0% 47.7% Total Resources $ 13,563,000 $ 6,568,000 50.7% 48.4%

Year-to-Date Actual Expenditures/ Total Encumbrances/ YTD Percent of Budget Appropriations/Commitments Appropriation Commitments Estimate Budget Balance Airport - Engineering 00702 Personal Services$ 1,057,000 $ 516,000 50.0% 48.8%$ 541,000 Materials and Supplies 5,000 0 50.0% 0.0% 5,000 Other Services and Charges 28,000 24,000 67.9% 85.7% 4,000 Airport - Maintenance 00704 Personal Services 3,459,000 1,455,000 50.0% 42.1% 2,004,000 Materials and Supplies 811,000 458,000 53.3% 56.5% 353,000 Other Services and Charges 235,000 243,000 50.6% 103.4% (8,000) Capital Outlay 6,000 6,000 100.0% 100.0% 0 Airport - Administrative 00705 Personal Services 1,479,000 690,000 50.0% 46.7% 789,000 Materials and Supplies 76,000 82,000 53.8% 107.9% (6,000) Other Services and Charges 1,361,000 713,000 50.2% 52.4% 648,000 Airport - Operations Personal Services 00706 2,591,000 1,308,000 50.0% 50.5% 1,283,000 Materials and Supplies 121,000 44,000 51.7% 36.4% 77,000 Other Services and Charges 1,760,000 897,000 50.3% 51.0% 863,000 Jones Airport 00707 Personal Services 308,000 140,000 50.0% 45.5% 168,000 Materials and Supplies 93,000 27,000 51.4% 29.0% 66,000 Other Services and Charges 26,000 20,000 50.0% 76.9% 6,000 Transfer/Projects 147,000 147,000 50.0% 100.0% - Total Appropriations/Commitments $ 13,563,000 $ 6,770,000 50.4% 49.9%$ 6,793,000

- 36 - Tulsa Airport Trust Fund Financial Management Report Airport Trust Activity (3703) As of December 31, 2011 Budgetary Basis

Total Year-to-Date YTD Percent of Resources Estimate Actual Estimate Budget

Revenues: Charges for Services$ 30,759,000 $ 16,807,000 50.0% 54.6% Interest Income & Misc. 325,000 90,000 49.8% 27.7% Total Resources $ 31,084,000 $ 16,897,000 50.0% 54.4%

Year-to-Date Actual Expenditures/ Total Encumbrances/ YTD Percent of Budget Appropriations/Commitments Appropriation Commitments Estimate Budget Balance

Airport Trust Debt Service & Other Expenditures$ 17,769,000 $ 8,885,000 50.0% 50.0%$ 8,884,000 Transfers (3701) 13,315,000 6,338,000 50.0% 47.6% 6,977,000 Total Appropriations/Commitments $ 31,084,000 $ 15,223,000 50.0% 49.0%$ 15,861,000

* 3701 Operating Fund $ 13,563,000 $ 6,770,000 50.4% 49.9%$ 6,793,000

* Note: Includes original budget ($13,315,000) plus carryover ($100,000).

- 37 - 2011-12 PERSONAL SERVICES ACCOUNTS YEAR-TO-DATE ESTIMATE VS YEAR-TO-DATE ACTUAL

$260 $240 $220 M $200 I $180 L $160 L I $140 O $120 N $100 S $80 $60 $40 $20 $0 JUL AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUNE ESTIMATE ACTUALS

MTD BUDGET CUMULATED DECEMBER DECEMBER UNDER TRANS/ADM UNDER FUND DEPARTMENT ESTIMATE ACTUAL (OVER) EST INCR/(DECR) (OVER) EST

GENERAL FUND MUNICIPAL COURT $203,990 $202,834 $1,156 $0 $25,528 LAW ENFORCEMENT 5,377,545 5,307,837 69,708 0 706,420 COMMUNITY FIRE SERVICE 4,515,824 4,952,208 (436,384) 0 (172,870) INFORMATION TECHNOLOGY 960,205 850,782 109,423 0 637,921 PARK & RECREATION 206,849 188,157 18,692 0 64,096 PERFORMING ARTS CENTER 111,308 109,417 1,891 0 11,898 WORKING IN NEIGHBORHOODS 253,446 245,647 7,799 0 112,268 PLANNING & ECONOMIC DEVELOPMENT 263,911 182,897 81,014 0 315,848 PUBLIC WORKS - STREETS & STORMWATER 436,943 454,428 (17,485) 0 73,439 MAYOR 75,333 53,770 21,563 0 101,025 CITY AUDITOR 80,000 77,147 2,853 0 21,819 CITY COUNCIL 99,211 82,079 17,132 0 39,216 HUMAN RIGHTS 50,994 54,108 (3,114) 0 (18,741) LEGAL REPRESENTATION 238,527 213,031 25,496 0 174,793 HUMAN RESOURCES 216,759 214,434 2,325 0 (3,538) FINANCE 467,585 455,338 12,247 0 81,845 COMMUNICATIONS 64,718 64,174 544 0 31,624

TOTAL GENERAL FUND $13,623,148 $13,708,288 ($85,140) $0 $2,202,588

This report only lists selected Personal Services Accounts that are projected for the annual budget. Not all Personal Services Accounts are reported. - 38 - 2011-12 PERSONAL SERVICES ACCOUNTS

MTD BUDGET CUMULATED DECEMBER DECEMBER UNDER TRANS/ADM UNDER FUND DEPARTMENT ESTIMATE ACTUAL (OVER) EST INCR/(DECR) (OVER) EST

TARE-REFUSE OPERATING FUND PUBLIC WORKS - STREETS & STORMWATER $188,583 $175,268 $13,315 $0 $151,974

AIRPORT OPERATIONS FUND AIRPORT $709,848 $702,308 $7,540 $0 $334,908

STORMWATER ENTERPRISE FUND PUBLIC WORKS - STREETS & STORMWATER $296,638 $241,489 $55,149 $0 $425,937

TMUA-WATER OPERATING FUND INFORMATION TECHNOLOGY $8,638 $8,467 $171 $0 $1,026 PUBLIC WORKS - WATER & SEWER 1,138,068 1,065,660 72,408 0 720,543

TMUA-WATER OPER. FUND TOTAL $1,146,706 $1,074,127 $72,579 $0 $721,569

TMUA - SEWER OPERATING FUND WORKING IN NEIGHBORHOODS $8,458 $8,132 $326 $0 $1,961 PUBLIC WORKS - WATER & SEWER 811,440 762,059 49,381 0 632,312 TMUA-SEWER OPER. FUND TOTAL $819,898 $770,191 $49,707 $0 $634,273

COST ALLOCATION FUND * INFORMATION TECHNOLOGY $216,996 $182,372 $34,624 $0 $195,426 PLANNING & ECONOMIC DEVELOPMENT 350,844 313,768 37,076 0 185,776 PUBLIC WORKS - STREETS & STORMWATER 1,320,108 1,306,009 14,099 0 174,597 PUBLIC WORKS - WATER & SEWER 789,563 680,246 109,317 0 921,107 HUMAN RESOURCES 9,117 5,978 3,139 0 18,835 FINANCE 329,576 301,545 28,031 0 196,815 COMMUNICATIONS 99,735 93,040 6,695 0 87,597

COST ALLOCATION FUND TOTAL $3,115,939 $2,882,958 $232,981 $0 $1,780,154

EQUIPMENT MANAGEMENT SERVICE FUND EQUIPMENT MANAGEMENT $342,656 $330,887 $11,769 $0 $210,275

GRAND TOTAL $20,243,416 $19,885,516 $357,900 $0 $6,461,678

* Charges allocated to General Fund, Solid Waste Operating Fund, Stormwater Fund, TMUA - Water Operating Fund, and TMUA - Sewer Operating Fund.

This report only lists selected Personal Services Accounts that are projected for the annual budget. Not all Personal Services Accounts are reported. - 39 - MAJOR FUNDS PRIOR YEAR, CURRENT MONTH, and YTD OVERTIME EXPENDITURES THROUGH December 31, 2011

Prior Year Current DecemberYear-to-Date % Budget Expenditures/ Appropriations Expenditures/ Expenditures/ Actual Balance Departments MUNICIPAL COURT $ 17,465 $ 8,500 $ 1,807 $ 12,204 143.6 $ (3,704)

POLICE 3,975,621 3,638,615 523,430 2,035,848 56.0 1,602,767

FIRE 1,784,204 1,079,707 103,691 1,208,989 112.0 (129,282)

INFORMATION TECHNOLOGY 589,242 462,871 79,121 314,628 68.0 148,243

PARK & RECREATION 93,114 0 687 2,215 N/A (2,215)

PERFORMING ARTS CENTER 55,173 87,000 3,316 21,327 24.5 65,673

WORKING IN 40,627 59,238 3,725 20,183 34.1 39,055 NEIGHBORHOODS

PLANNING & ECONOMIC 32,741 34,867 3,572 18,847 54.1 16,020 DEVELOPMENT

AIRPORTS 324,791 273,000 31,727 122,117 44.7 150,883

PUBLIC WORKS 980,891 600,670 37,377 223,755 37.3 376,915 STREETS & STORMWATER

PUBLIC WORKS 1,713,096 1,049,050 152,807 932,319 88.9 116,731 WATER & SEWER

HUMAN RIGHTS 3,829 0 0 0 N/A 0

LEGAL REPRESENTATION 47 0 937 3,375 N/A (3,375)

HUMAN RESOURCES 6,225 3,100 813 1,292 41.7 1,808

FINANCE 10,224 41,000 1,546 13,228 32.3 27,772

COMMUNICATIONS 0 16,500 0 0 0.0 16,500

EQUIPMENT MANAGEMENT 78,630 74,970 1,092 8,818 11.8 66,152

TOTAL OVERTIME $ 9,705,920 $ 7,429,088 $ 945,648 $ 4,939,145 66.5 $ 2,489,943

Note: The FY12 Overtime budget is 2.52% of the total Personal Services budget for major funds which totaled $292,500,000 for FY12.

Major funds are: General Fund, E-911 Fee Operating Fund, Convention Fund, Tare - Refuse Operating Fund, Airport Operating Fund, Stormwater Enterprise Fund, TMUA - Water Operating Fund, TMUA - Sewer Operating Fund, Equipment Management Internal Services Fund.

- 40 - MONTHLY POSITION STATUS REPORT As of January 05, 2012

FULL AND FULL AND PART-TIME PART-TIME DEPARTMENT POSITIONS EMPLOYEES VACANCIES

005 - Parks & Recreation 40 39 1

007 - Airports 156 145 11

010 - Mayor 0 0 0

012 - Finance Department 171 158 13

014 - Human Rights Department 11 11 0

015 - Legal Department 32 29 3

017 - Human Resources 42 40 2

018 - Municipal Court 42 41 1

020 - Working In Neighborhoods 75 68 7

028 - Performing Arts 28 27 1

031 - Police Department 876 842 34

032 - Fire Department 699 678 21

034 - Information Technology 243 207 36

040 - Public Works - Streets & Stormwater 535 482 53

043 - Public Works - Water & Sewer 642 587 55

041 - Planning & Economic Development 108 90 18

042 - Communications 47 42 5

053 - Equipment Management 79 74 5

060 - City Auditor 11 10 1

070 - City Council 14 12 2

TOTALS 3851 3582 269

REPT: POS001A NOTE: Data excludes abolished, temporary, SE and UC DATE: 5, January 2012 classifications; excludes dual encumbrances.

- 41 - REPORT ON MONTHLY POSITION VACANCIES

FY 12 400

NUMBER OF VACANCIES FY 11 363 365

350 330 342 327 332 313 324 326 -42 -

298 303 300 266

250

311 299 291 335 271 269 200 July September November January March May SINKING FUND EXPENDITURES Period Ending December 31, 2011 and 2010

FY 2012 FY 2011 Worker's Compensation:

Administration Airport (5) $ 84,188 (2) $ 20,275 Working in Neighborhoods (1) 22,272 (1) 5,113 Fire (22) 386,503 (17) 320,011 Human Resources (1) 7,871 - - Municipal Court (1) 16,302 (1) 30,166 Park (2) 165,875 (1) 16,951 Police (25) 504,990 (27) 638,031 Public Works - - (15) 302,948 Streets & Stormwater (12) 230,534 - - Telecommunications - - (3) 57,467 Water & Wastewater (9) 200,189 - -

Total$ 1,618,724 $ 1,390,962

District Court:

Gilstrap, Judy $ 22,063 Gomez, Juana 5,567 Johnson, Roy C., et al 27,654 Lucy, Erin 16,000 Mizener, William 6,076 Morgan, O'Queenia 8,600 Naaman, Randa 19,500 Thompson, Laura 5,618 WLA Investments D.B.A. Summer Stone Duplexes 6,886 330,622

Total 117,964 330,622

Grand total$ 1,736,688 $ 1,721,584

- 43 - INVESTMENT REPORT Executive Summary December 31, 2011

The City of Tulsa’s average principal balance of pooled funds totaled $537 million for the month ending December 31, 2011. Total interest earned was $648,8081 comprised of $400,584 in received interest and a $248,224 increase in accrued interest. The annualized yield was 1.45%, 146 basis points (bps) over the benchmark yield2 of -0.01% and 18 bps under the December 2010 pool yield of 1.63%. The weighted-average maturity of the pool was 1.93 years. For the same period last year, the pool’s weighted-average Interest Rates Consensus -Quarterly Avg. Latest 1Q 2Q 3Q 4Q 1Q 2Q maturity was 1.98 years. Bonds 4Q ’11 ‘12 ‘12 ‘12 ‘12 ‘13 ‘13 purchased during the month of Fed. Funds Rate 0.07 0.1 0.1 0.1 01 0.1 0.2 December had an average yield of Prime Rate 3.25 3.3 3.3 3.3 3.3 3.3 3.3 0.82% and a 2-year weighted-average maturity. The weighted-average yield 3-m T-Bill 0.01 0.0 0.1 0.1 0.1 0.1 0.2 of matured and called bonds was 6-m T-Bill 0.05 0.1 0.1 0.1 0.1 0.2 0.3 1.59%. 1-y T-Bill 0.11 0.1 0.2 0.2 0.3 0.3 0.5 2-y T-Note 0.26 0.3 0.3 0.4 0.5 0.6 0.8 According to panelists participating in 5-y T-Note 0.95 1.0 1.1 1.2 1.4 1.5 1.7 the Blue Chip Financial Forecast3, “U.S. economic growth in the first half Source: 1-1-12 Blue Chip Financial Forecast of 2012 is predicted to be marginally softer than in the second half of 2011, second half 2012 growth will pick up and improve further in the first half of 2013. Consumer price inflation is slowing and will stabilize at around 2.2% over the forecast horizon. The Fed will continue to run a very accommodative policy through the first half of 2013, says the consensus. Nonetheless, Treasury bond yields will gradually begin to creep higher as economic growth improves and investors’ tolerance for risk increases.”

1 Net Interest Income – Interest received and any capital gains realized for the month plus the change in accrued interest from the prior month. 2 The City’s Investment Policy uses the average 30-day United States Treasury bill yield as a benchmark for portfolio performance. 3 Blue Chip Financial Forecast, January 1, 2012

- 44- 12 Month Rolling Average Portfolio and Benchmark Yields

Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11

Pooled Portfolio 1.81% 1.77% 1.75% 1.71% 1.69% 1.67% 1.65% 1.64% 1.64% 1.62% 1.56% 1.54%

T-Bill Benchmark 0.12% 0.12% 0.12% 0.11% 0.10% 0.09% 0.09% 0.08% 0.07% 0.05% 0.04% 0.03% Spread 169 165 163 161 160 158 157 157 157 157 152 151

2.20%

2.00%

1.80%

-45- 1.60%

1.40%

1.20%

1.00%

0.80%

0.60%

0.40%

0.20%

0.00% Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11

Pooled Portfolio T-Bill Benchmark Pooled Portfolio Performance

Interest Capital Total Accrued Net Average Annualized Benchmark FYTD FYTD Bench- Month Received Gains Received Interest Income Portfolio Yield Yield Avg Yield mark Avg Yld FY 11 - 12 7/31/11 $900,622.88 - 900,622.88 (220,321.59) 680,301.29 506,071,086 1.61% 0.03% 1.61% 0.03% 8/31/11 640,876.12 - 640,876.12 127,675.94 768,552.06 507,353,997 1.82% 0.01% 1.72% 0.02% 9/30/11 497,723.59 - 497,723.59 150,441.79 648,165.38 510,073,873 1.53% 0.00% 1.65% 0.01% 10/31/11 440,680.75 - 440,680.75 189,907.22 630,587.97 503,718,961 1.50% 0.00% 1.61% 0.01% 11/30/11 369,791.89 - 369,791.89 179,180.95 548,972.84 505,447,988 1.30% 0.00% 1.55% 0.01% 12/31/11 400,583.97 - 400,583.97 248,224.04 648,808.01 536,736,956 1.45% -0.01% 1.54% 0.01% 1/31/12 - - - - 1.54% 0.01% 2/29/12 - - - - 1.54% 0.01% 3/31/12 - - - - 1.54% 0.01% 4/30/12 - - - - 1.54% 0.01% 5/31/12 - - - - 1.54% 0.01% 6/30/12 - - - - 1.54% 0.01% -46- Total $3,250,279.20 - 3,250,279.20 675,108.35 3,925,387.55 $511,567,143 1.535% 0.005% 1.660% 0.021%

* Capital Gains + interest at sale - purchase premium Pooled Portfolio/Budget Comparison

Month Net Income Projected Income Variance $ Percentage % Average Portfolio FY 11-12 7/31/11 $680,301.29 683,911 -3,609.71 -0.53% 506,071,086 8/31/11 768,552.06 680,743 87,809.06 12.90% 507,353,997 9/30/11 648,165.38 684,406 -36,240.62 -5.30% 510,073,873 10/31/11 630,587.97 694,130 -63,542.03 -9.15% 503,718,961 11/30/11 548,972.84 771,663 -222,690.16 -28.86% 505,447,988 12/31/11 648,808.01 775,785 -126,976.99 -16.37% 536,736,956 1/31/12 776,690 - - 2/29/12 786,153 - - 3/31/12 786,028 - - 4/30/12 800,954 - - 5/31/12 801,389 - - 6/30/12 813,103 - - -47- Total Fiscal Y-T-D $3,925,387.55 4,290,638 (365,250.45) -8.51% 511,567,143 Pooled Portfolio Purchases

For Month Ended: 12/31/11

Maturity Investment # Type Yield Purchase Date Call Date Date Principal Par

2001761 FNMA q 4/17/12 0.82% 12/1/11 4/17/12 10/17/14 $5,000,000 $4,997,500

2001762 FNMA c 11/15/12 0.55% 12/5/11 11/15/12 11/15/13 $5,000,000 $5,000,000

2001763 FHLMC f 12/5/14 0.75% * 12/5/11 12/5/12 12/5/12 $5,000,000 $5,012,500

2001764 FFCB f 12/7/15 1.13% * 12/7/11 12/7/12 12/7/12 $5,000,000 $5,010,000

2001765 FNMA q 3/6/12 0.50% 12/7/11 3/6/12 9/6/13 $5,000,000 $4,999,700

2001766 FHLB 0.21% 12/12/11 1/8/13 $10,000,000 $10,000,000

2001767 FHLMC q10/19/12 1.15% 12/12/11 10/19/12 10/19/15 $5,000,000 $5,000,000

2001768 FHLMC q12/14/12 1.25% 12/14/11 12/14/12 12/14/15 $5,000,000 $4,999,700

2001769 FHLB cc 3/29/12 1.01% 12/29/11 3/29/12 9/29/15 $5,000,000 $4,999,050

2001770 FHLMC f 12-15 0.94% * 12/30/11 12/30/13 12/30/13 $5,000,000 $5,005,500

2001771 FNMA q 12/28/12 1.13% 12/30/11 12/28/12 12/28/15 $5,000,000 $4,994,700

* yield to call

*Excludes $10mm money market fund purchased & sold in current month. Grand Total: $60,000,000 $60,018,650

* yield to call

Weighted Avg. Yield to Maturity: 0.819% Weighted Avg. Maturity: 2.31 years

Weighted Avg. Yield to Call: 0.830% Weighted Avg. Life to Call: 0.86 years

-48- Pooled Portfolio Maturities, Calls and Sales

For Month Ended: 1/31/11

Purchase Call /Sale Investment # Type Yield Date Maturity Date Date Principal Par Value

Maturities

2001591 USTN 1.03% 9/14/09 12/31/11 $5,405,859 $5,000,000

$5,405,859 $5,000,000

Called Bonds

2001708 FHLMC q12/30/11 2.27% 1/26/11 12/30/15 12/30/11 $4,978,750 $5,000,000

2001729 FHLMC sq f6/16 1.50% 6/30/11 12/30/13 12/30/11 $5,000,000 $5,000,000

$9,978,750 $10,000,000

Weighted Avg Yield to Maturity : 1.59% Grand Total: $15,384,609 $15,000,000

*Excludes $10mmWeighted m Avg Yield to Call: 1.71%

-49- Pooled Portfolio by Type as of December 31, 2011

Investment Yield to Purchase WAM Avg Number Type Maturity Date Maturity Date Days to Maturity Price Par Value Total Type % Type Yield 2001754 FHLB sq f 9-16 0.75% 9/28/11 9/28/12 272 100.00 10,000,000 2001756 FHLB c 1/3/12 0.35% 10/3/11 10/3/12 277 100.00 5,000,000 2001763 FHLMC f 12/5/14 0.75% 12/5/11 12/5/12 340 100.25 5,000,000 2001764 FFCB f 12/7/15 1.13% 12/7/11 12/7/12 342 100.20 5,000,000 2001618 FHLB 1.57% 11/20/09 12/14/12 349 100.54 10,000,000 2001766 FHLB 0.21% 12/12/11 1/8/13 374 100.00 10,000,000 2001713 FHLMC c 2/15/12 1.10% 2/15/11 2/15/13 412 100.00 5,000,000 2001501 FHLB nc 3.51% 3/28/08 3/8/13 433 101.62 5,000,000 2001727 FFCB cc 0.49% 6/13/11 3/13/13 438 99.98 5,000,000 2001520 FFCB 3.70% 5/9/08 3/25/13 450 99.32 5,000,000 2001508 FNMA nc 4.05% 4/18/08 4/18/13 474 100.00 5,000,000 2001738 FFCB cc 0.43% 8/22/11 8/22/13 600 99.96 5,000,000 2001765 FNMA q 3/6/12 0.50% 12/7/11 9/6/13 615 99.99 5,000,000 2001762 FNMA c 11/15/12 0.55% 12/5/11 11/15/13 685 100.00 5,000,000 2001770 FHLMC f 12-15 0.94% 12/30/11 12/30/13 730 100.11 5,000,000 2001706 FFCB cc 1/24/12 1.39% 1/24/11 1/24/14 755 100.00 5,000,000 2001740 FHLMC sq f8/16 1.75% 8/22/11 2/22/14 784 99.83 5,000,000 2001671 FNMA nc 1.35% 8/24/10 2/24/14 786 100.00 5,000,000 2001757 FHLMC sq f10-16 1.00% 10/3/11 4/3/14 824 100.00 10,000,000 2001718 FHLMC c 5/9/12 1.39% 5/9/11 5/9/14 860 99.96 5,000,000 2001742 FFCB cc 0.69% 8/24/11 5/23/14 874 99.95 5,000,000 2001748 FHLB 0.46% 9/9/11 6/13/14 895 105.59 5,000,000 2001707 FHLMC c 7/25/12 1.53% 1/25/11 7/25/14 937 99.90 5,000,000 2001744 FNMA c 8/28/12 0.65% 8/29/11 8/28/14 971 100.00 5,000,000 2001745 FNMA c 8/28/12 0.65% 8/29/11 8/28/14 971 100.00 5,000,000 2001746 FNMA c 8/28/12 0.65% 8/29/11 8/28/14 971 100.00 5,000,000 2001674 FNMA nc 1.51% 9/8/10 9/8/14 982 99.95 5,000,000 2001728 FHLMC c 3/30/12 1.10% 6/30/11 9/30/14 1004 100.00 5,000,000 2001755 FHLMC q 3/30/12 0.75% 9/30/11 9/30/14 1004 100.00 5,000,000 2001761 FNMA q 4/17/12 0.82% 12/1/11 10/17/14 1021 99.95 5,000,000 2001685 FNMA nc 1.18% 11/18/10 11/18/14 1053 99.87 5,000,000 2001743 FFCB cc 0.85% 8/25/11 11/25/14 1060 100.00 5,000,000 2001698 FFCB cc 1/5/12 2.10% 1/5/11 1/5/15 1101 100.00 5,000,000 2001731 FHLB c 1/27/12 1.39% 7/27/11 4/27/15 1213 99.95 5,000,000 2001758 FHLB q 4/27/12 0.99% 10/27/11 4/27/15 1213 99.97 4,000,000 2001739 FHLMC q 2/22/12 1.00% 8/22/11 5/22/15 1238 99.99 5,000,000 2001735 FFCB cc 8/17/12 1.00% 8/17/11 8/17/15 1325 99.87 5,000,000 2001747 FNMA c 3/8/13 0.98% 9/8/11 9/8/15 1347 99.90 10,000,000 2001677 FNMA nc 1.93% 9/10/10 9/9/15 1348 99.75 5,000,000 2001749 FHLB q 3/15/12 1.13% 9/15/11 9/15/15 1354 100.00 4,000,000 2001750 FHLB q 3/15/12 1.13% 9/15/11 9/15/15 1354 100.00 3,000,000 2001751 FHLB q 3/15/12 1.13% 9/15/11 9/15/15 1354 100.00 3,000,000 2001678 FNMA nc 2.00% 9/21/10 9/21/15 1360 99.99 5,000,000 2001769 FHLB cc 3/29/12 1.01% 12/29/11 9/29/15 1368 99.98 5,000,000 2001767 FHLMC q10/19/12 1.15% 12/12/11 10/19/15 1388 100.00 5,000,000 2001736 FFCB cc 1.37% 8/18/11 11/18/15 1418 100.00 5,000,000 2001737 FFCB cc 1.37% 8/18/11 11/18/15 1418 99.99 5,000,000 2001726 FHLMC c 6/1/12 2.00% 6/1/11 12/1/15 1431 100.00 5,000,000 2001768 FHLMC q12/14/12 1.25% 12/14/11 12/14/15 1444 99.99 5,000,000 2001771 FNMA q 12/28/12 1.13% 12/30/11 12/28/15 1458 99.89 5,000,000 2001705 FFCB cc 1/11/12 2.47% 1/11/11 1/11/16 1472 99.51 5,000,000 2001760 FNMA q 5/16/12 1.80% 11/16/11 1/16/16 1477 99.99 5,000,000 2001732 FNMA q 1/18/12 2.25% 7/28/11 7/18/16 1661 100.00 5,000,000 2001741 FFCB cc 8/22/12 1.50% 8/22/11 8/22/16 1696 100.00 10,000,000 2001752 FNMA c 9/20/13 1.42% 9/20/11 9/20/16 1725 100.00 5,000,000 2001753 FHLB cc 9/21/12 1.38% 9/21/11 9/21/16 1726 100.00 5,000,000 WAM = 2.73 2001759 FFCB cc 11/7/12 1.57% 11/7/11 11/7/16 1773 100.00 5,000,000 WAMC = 0.78 Avg 1.30% $309,000,000 56.95% Avg Yld = 1.28%

5 Cash 0.17% 12/31/11 1/3/12 3 1.00 104,121,520 WAM = 0.008 $104,121,520 19.19% Avg Yld = 0.17%

2001730 CD 0.71% 7/7/11 1/5/12 5 1.00 1,500,000 WAM = 0.01 $1,500,000 0.28% Avg Yld = 0.71%

1 Judgments 7.01% 7/29/09 1/31/12 31 1.00 6,666,946 2 Judgments 5.25% 10/31/10 1/31/13 397 1.00 3,439,292 3 Judgments 5.25% 4/3/11 1/31/14 762 1.00 2,251,414 4 Judgments 5.25% 9/30/11 1/31/15 1127 1.00 578,896 WAM = 0.83 Avg 5.69% $12,936,549 2.38% Avg Yld = 6.16% 2001510 USTN 2.83% 5/1/08 1/31/12 31 106.79 10,000,000 2001648 USTN 0.89% 5/11/10 6/30/12 182 108.42 5,000,000 2001571 USTN 1.75% 6/17/09 7/31/12 213 108.70 5,000,000 2001568 USTN 1.94% 6/15/09 8/31/12 244 106.76 5,000,000 2001601 USTN 1.33% 10/8/09 9/15/12 259 100.13 5,000,000 2001610 USTN 1.50% 10/27/09 10/15/12 289 99.63 5,000,000 2001477 USTN 3.30% 12/12/07 11/30/12 335 100.32 5,000,000 2001593 USTN 1.72% 9/16/09 2/28/13 425 103.43 5,000,000 2001669 USTN 0.82% 7/30/10 4/15/13 471 102.49 5,000,000 2001582 USTN 1.86% 7/10/09 6/30/13 547 105.78 5,000,000 2001572 USTN 2.21% 6/17/09 7/31/13 578 104.55 5,000,000 2001611 USTN 1.99% 10/27/09 10/31/13 670 102.91 5,000,000 2001602 USTN 1.83% 10/8/09 11/30/13 700 100.66 5,000,000 2001647 USTN 2.24% 3/26/10 3/31/14 821 98.14 5,000,000 2001580 USTN 2.29% 7/9/09 6/30/14 912 101.56 10,000,000 2001589 USTN 2.51% 8/25/09 7/31/14 943 100.53 5,000,000 2001612 USTN 2.34% 10/27/09 8/31/14 974 100.16 5,000,000 2001603 USTN 2.19% 10/8/09 9/30/14 1004 100.87 5,000,000 2001643 USTN 2.34% 3/8/10 2/28/15 1155 100.16 5,000,000 2001650 USTN 2.24% 5/11/10 4/30/15 1216 101.22 5,000,000 2001662 USTN 1.82% 7/9/10 6/30/15 1277 100.24 5,000,000 WAM = 1.69 Avg 2.00% $115,000,000 21.20% Avg Yld = 2.05%

Percentage total are greater than 100% due to rounding $542,558,069 100.00%

-50- Portfolio Segmentation

Agencies Treasury Notes 56.95% 21.20%

-51- Judgments 2.38%

CD's 0.28%

Cash 19.19% Pooled Portfolio by Maturity Date as of December 31, 2011 Yield to Days to Purchase Investment Number Type Description Maturity Purchase Date Call Date Maturity Date Maturity Price Par Value 5 Cash Cash 0.17% 12/31/11 1/3/12 3 1.00 104,121,520 2001730 CD Valley NB 0.71% 7/7/11 1/5/12 5 1.00 1,500,000 1 Judgments Judgments 7.01% 7/29/09 1/31/12 31 1.00 6,666,946 2001510 Treasury Note USTN 2.83% 5/1/08 1/31/12 31 106.79 10,000,000 2001648 Treasury Note USTN 0.89% 5/11/10 6/30/12 182 108.42 5,000,000 2001571 Treasury Note USTN 1.75% 6/17/09 7/31/12 213 108.70 5,000,000 2001568 Treasury Note USTN 1.94% 6/15/09 8/31/12 244 106.76 5,000,000 2001601 Treasury Note USTN 1.33% 10/8/09 9/15/12 259 100.13 5,000,000 2001754 Agency FHLB sq f 9-16 0.75% 9/28/11 3/28/12 9/28/12 272 100.00 10,000,000 2001756 Agency FHLB c 1/3/12 0.35% 10/3/11 1/3/12 10/3/12 277 100.00 5,000,000 2001610 Treasury Note USTN 1.50% 10/27/09 10/15/12 289 99.63 5,000,000 2001477 Treasury Note USTN 3.30% 12/12/07 11/30/12 335 100.32 5,000,000 2001763 Agency FHLMC f 12/5/14 0.75% 12/5/11 12/5/12 12/5/12 340 100.25 5,000,000 2001764 Agency FFCB f 12/7/15 1.13% 12/7/11 12/7/12 12/7/12 342 100.20 5,000,000 2001618 Agency FHLB 1.57% 11/20/09 12/14/12 349 100.54 10,000,000 2001766 Agency FHLB 0.21% 12/12/11 1/8/13 374 100.00 10,000,000 2 Judgments Judgments 5.25% 10/31/10 1/31/13 397 1.00 3,439,292 2001713 Agency FHLMC c 2/15/12 1.10% 2/15/11 2/15/12 2/15/13 412 100.00 5,000,000 2001593 Treasury Note USTN 1.72% 9/16/09 2/28/13 425 103.43 5,000,000 2001501 Agency FHLB nc 3.51% 3/28/08 3/8/13 433 101.62 5,000,000

2001727 Agency FFCB cc 0.49% 6/13/11 1/5/00 3/13/13 438 99.98 5,000,000 2001520 Agency FFCB 3.70% 5/9/08 3/25/13 450 99.32 5,000,000 2001669 Treasury Note USTN 0.82% 7/30/10 4/15/13 471 102.49 5,000,000 2001508 Agency FNMA nc 4.05% 4/18/08 4/18/13 474 100.00 5,000,000 2001582 Treasury Note USTN 1.86% 7/10/09 6/30/13 547 105.78 5,000,000 2001572 Treasury Note USTN 2.21% 6/17/09 7/31/13 578 104.55 5,000,000 2001738 Agency FFCB cc 0.45% 8/22/11 1/5/12 8/22/13 600 99.96 5,000,000 2001765 Agency FNMA q 3/6/12 0.50% 12/7/11 3/6/12 9/6/13 615 99.99 5,000,000 2001611 Treasury Note USTN 1.99% 10/27/09 10/31/13 670 102.91 5,000,000 2001762 Agency FNMA c 11/15/12 0.55% 12/5/11 11/15/12 11/15/13 685 100.00 5,000,000 2001602 Treasury Note USTN 1.83% 10/8/09 11/30/13 700 100.66 5,000,000 2001770 Agency FHLMC f 12-15 0.94% 12/30/11 12/30/13 12/30/13 730 100.11 5,000,000 2001706 Agency FFCB cc 1.39% 1/24/11 1/5/12 1/24/14 755 100.00 5,000,000 3 Judgments Judgments 5.25% 4/3/11 1/31/14 762 1.00 2,251,414 2001740 Agency FHLMC sq f8/16 1.82% 8/22/11 8/22/12 2/22/14 784 99.83 5,000,000 2001671 Agency FNMA nc 1.35% 8/24/10 2/24/14 786 100.00 5,000,000 2001647 Treasury Note USTN 2.24% 3/26/10 3/31/14 821 98.14 5,000,000 2001757 Agency FHLMC sq f10-16 1.00% 10/3/11 4/3/12 4/3/14 824 100.00 10,000,000 2001718 Agency FHLMC c 5/9/12 1.39% 5/9/11 5/9/12 5/9/14 860 99.96 5,000,000 2001742 Agency FFCB cc 0.71% 8/24/11 1/5/12 5/23/14 874 99.95 5,000,000 2001748 Agency FHLB 0.46% 9/9/11 6/13/14 895 105.59 5,000,000 2001580 Treasury Note USTN 2.29% 7/9/09 6/30/14 912 101.6 10,000,000 2001707 Agency FHLMC c 7/25/12 1.53% 1/25/11 7/25/12 7/25/14 937 99.90 5,000,000 2001589 Treasury Note USTN 2.51% 8/25/09 7/31/14 943 100.53 5,000,000 2001744 Agency FNMA c 8/28/12 0.65% 8/29/11 8/28/12 8/28/14 971 100.00 5,000,000 2001745 Agency FNMA c 8/28/12 0.65% 8/29/11 8/28/12 8/28/14 971 100.00 5,000,000 2001746 Agency FNMA c 8/28/12 0.65% 8/29/11 8/28/12 8/28/14 971 100.00 5,000,000 2001612 Treasury Note USTN 2.34% 10/27/09 8/31/14 974 100.16 5,000,000 2001674 Agency FNMA nc 1.51% 9/8/10 9/8/14 982 100.0 5,000,000 2001603 Treasury Note USTN 2.19% 10/8/09 9/30/14 1004 100.87 5,000,000 2001728 Agency FHLMC c 3/30/12 1.10% 6/30/11 3/30/12 9/30/14 1004 100.00 5,000,000 2001755 Agency FHLMC q 3/30/12 0.75% 9/30/11 3/30/12 9/30/14 1004 100.00 5,000,000 2001761 Agency FNMA q 4/17/12 0.82% 12/1/11 4/17/12 10/17/14 1021 99.95 5,000,000 2001685 Agency FNMA nc 1.18% 11/18/10 11/18/14 1053 99.87 5,000,000 2001743 Agency FFCB cc 0.85% 8/25/11 1/5/12 11/25/14 1060 100.00 5,000,000 2001698 Agency FFCB cc 1/5/12 2.10% 1/5/11 1/5/12 1/5/15 1101 100.00 5,000,000 4 Judgments Judgments 0.00% 9/30/11 1/31/15 1127 1.00 578,896 2001643 Treasury Note USTN 2.34% 3/8/10 2/28/15 1155 100.16 5,000,000 2001731 Agency FHLB c 1/27/12 1.39% 7/27/11 1/27/12 4/27/15 1213 99.95 5,000,000 2001758 Agency FHLB q 4/27/12 0.99% 10/27/11 4/27/12 4/27/15 1213 99.97 4,000,000 2001650 Treasury Note USTN 2.24% 5/11/10 4/30/15 1216 101.22 5,000,000 2001739 Agency FHLMC q 2/22/12 1.00% 8/22/11 2/22/12 5/22/15 1238 99.99 5,000,000 2001662 Treasury Note USTN 1.82% 7/9/10 6/30/15 1277 100.24 5,000,000 2001735 Agency FFCB cc 8/17/12 1.03% 8/17/11 8/17/12 8/17/15 1325 99.87 5,000,000 2001747 Agency FNMA c 3/8/13 0.98% 9/8/11 3/8/13 9/8/15 1347 99.90 10,000,000 2001677 Agency FNMA nc 1.93% 9/10/10 9/9/15 1348 99.75 5,000,000 2001749 Agency FHLB q 3/15/12 1.13% 9/15/11 3/15/12 9/15/15 1354 100.00 4,000,000 2001750 Agency FHLB q 3/15/12 1.13% 9/15/11 3/15/12 9/15/15 1354 100.00 3,000,000 2001751 Agency FHLB q 3/15/12 1.13% 9/15/11 3/15/12 9/15/15 1354 100.00 3,000,000 2001678 Agency FNMA nc 2.00% 9/21/10 9/21/15 1360 99.99 5,000,000 2001769 Agency FHLB cc 3/29/12 1.01% 12/29/11 3/29/12 9/29/15 1368 99.98 5,000,000 2001767 Agency FHLMC q10/19/12 1.15% 12/12/11 10/19/12 10/19/15 1388 100.00 5,000,000 2001736 Agency FFCB cc 1.37% 8/18/11 1/5/12 11/18/15 1418 100.00 5,000,000 2001737 Agency FFCB cc 1.37% 8/18/11 1/5/12 11/18/15 1418 99.99 5,000,000 2001726 Agency FHLMC c 6/1/12 2.00% 6/1/11 6/1/12 12/1/15 1431 100.00 5,000,000 2001768 Agency FHLMC q12/14/12 1.25% 12/14/11 12/14/12 12/14/15 1444 99.99 5,000,000 2001771 Agency FNMA q 12/28/12 1.13% 12/30/11 12/28/12 12/28/15 1458 99.89 5,000,000 2001705 Agency FFCB cc 1/11/12 2.47% 1/11/11 1/11/12 1/11/16 1472 99.51 5,000,000 2001760 Agency FNMA q 5/16/12 1.80% 11/16/11 5/16/12 1/16/16 1477 99.99 5,000,000 2001732 Agency FNMA q 1/18/12 2.25% 7/28/11 1/18/12 7/18/16 1661 100.00 5,000,000

2001741 Agency FFCB cc 8/22/12 1.50% 8/22/11 8/22/12 8/22/16 1696 100.00 10,000,000 2001752 Agency FNMA c 9/20/13 1.42% 9/20/11 9/20/13 9/20/16 1725 100.00 5,000,000 2001753 Agency FHLB cc 9/21/12 1.38% 9/21/11 9/21/12 9/21/16 1726 100.00 5,000,000 2001759 Agency FFCB cc 11/7/12 1.57% 11/7/11 11/7/12 11/7/16 1773 100.00 5,000,000

$542,558,069.00

Weighted Years to Maturity 1.93 Investments <= 15 Days to Maturity 19.47% Investments <= 30 Days to Maturity 19.47% Investments <= 90 Days to Maturity 22.54% Investments <= 365 Days to Maturity 34.52% Investments > 365 Days to Maturity 65.48%

-52- 12/31/11 Portfolio Maturity Structure

1st Q 17 - 4th Q 16 5 3rd Q 16 25 2nd Q 16 -

1st Q 16 10 4th Q 15 30

3rd Q 15 40 2nd Q 15 24

1st Q 15 11 4th Q 14 15 -53- 3rd Q 14 50 2nd Q 14 35

1st Q 14 22 4th Q 13 20

3rd Q 13 15 2nd Q 13 15 1st Q 13 38 4th Q 12 35 3rd Q 12 25 2nd Q 12 5

1st Q 12 122

0 102030405060708090100110120130 APPENDIX D

FORM OF OPINION OF BOND COUNSEL

D-1

June 1, 2012

We have examined into the validity of "General Obligation Refunding Bonds of 2012, Series A" (the "Bonds") of the City of Tulsa, Oklahoma (the "City"), in the principal amount of $10,575,000.00, dated June 1, 2012. The Bonds are due serially as follows: $2,280,000.00 due June 1, 2013, $2,195,000.00 due June 1, 2014, $2,110,000.00 due June 1, 2015, $2,035,000.00 due June 1, 2016, and $1,955,000.00 due June 1, 2017, bear interest from date until paid, payable on the 1st day of June and December of each year, beginning December 1, 2012, at the following annual rates: $2,280,000.00 due June 1, 2013: %; $2,195,000.00 due June 1, 2014: %; $2,110,000.00 due June 1, 2015: %; $2,035,000.00 due June 1, 2016: %; and $1,955,000.00 due June 1, 2017: %.

We have not been engaged or undertaken to review the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds and we express no opinion relating thereto.

We have examined (a) originals or certified copies of the proceedings relating to the issuance of the Bonds as contained in a Transcript of Proceedings had in connection therewith, and (b) an executed Bond of said issue with the Certificate of the Attorney General as Bond Commissioner of the State of Oklahoma, required by Title 62, Oklahoma Statutes 2011, Sections 13 and 14, thereon. In addition, we have examined such other documents and instruments as we have deemed necessary to express the opinions hereinafter set forth. As to questions of fact material to our opinion we have relied upon the Transcript of Proceedings and other certifications of public officials furnished to us without undertaking to verify the same by independent investigation.

Based upon the foregoing, we are of the opinion that, under existing law:

1. The Bonds are valid and binding general obligations of the City.

2. The interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; it should be noted, however, that for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings; it should be noted, however, that for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings. The opinions set forth in the preceding sentence are subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986 (the "Code") that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The City has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds.

3. The interest on the Bonds is excluded from gross income for state of Oklahoma income taxation purposes.

We express no opinion regarding other federal tax consequences arising with respect to the Bonds.

It is to be understood that the rights of the holders of the Bonds and the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases.

Respectfully submitted,

APPENDIX E

FORM OF CONTINUING DISCLOSURE CERTIFICATE

D-1 CONTINUING DISCLOSURE CERTIFICATE

This Continuing Disclosure Certificate (the “Certificate”) dated as of June 1, 2012, is executed and delivered by the City of Tulsa, Oklahoma (the “Issuer”) in connection with the issuance of the Issuer’s $ 10,575,000.00 General Obligation Refunding Bonds of 2012, Series A (the “Bonds”). Capitalized terms used in this Certificate shall have the respective meanings specified in Article IV hereof. The Issuer covenants and agrees as follows:

ARTICLE I The Undertaking

Section 1.1. Purpose. This Certificate is being executed and delivered solely to assist the Underwriter in complying with subsection (b)(5) of the Rule.

Section 1.2. Annual Financial Information. (a) The Issuer shall provide Annual Financial Information with respect to each fiscal year of the Issuer, commencing with fiscal year ending June 30, 2012, by no later than 6 months after the end of the respective fiscal year, to the MSRB.

(b) The Issuer shall provide, in a timely manner, notice of any failure to provide the Annual Financial Information by the date specified in subsection (a) above to the MSRB.

Section 1.3. Audited Financial Statements. If not provided as part of the Annual Financial Information by the date required by Section 1.2(a) hereof, the Issuer shall provide Audited Financial Statements, when and if available, to the MSRB.

Section 1.4. Listed Event Notices. (a) If a Listed Event occurs, the Issuer shall provide, within 10 business days of the occurrence of the applicable event, notice of such Listed Event to the MSRB on the MSRB’s Internet Web Site. Provided that any event under (ii), (vii), (viii), (x), (xiv) or (xv) of the definition of Listed Event must be filed only if the event is material. Notwithstanding the foregoing, notice of a Listed Event described in subsections (viii) and (ix) need not be given under this section any earlier than the notice (if any) of the underlying event is given to holders of affected Bonds pursuant to the Bond Documents..

(b) Any notice of a defeasance of Bonds shall state whether the Bonds have been escrowed to maturity or to an earlier redemption date and the timing of such maturity or redemption.

Section 1.5 Nothing in this Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Certificate or any other means of communication, or including any other information in any Annual Financial Information or notice of Listed Event hereunder, in addition to that which is required by this Certificate. If the Issuer chooses to do so, the Issuer shall have no obligation under this Certificate to update such additional information or include it in any future Annual Financial Information or notice of a Listed Event hereunder.

Section 1.6. Suspension of Obligations. Anything herein to the contrary notwithstanding, the obligations to file Annual Financial Information, Audited Financial Statements, Listed Event Notices and additional information pursuant to Sections 1.2, 1.3, 1.4 and 1.5 hereof may be suspended for so long as the Bonds are eligible for exception from the requirements of the Rule pursuant to Section 15c2- 12(d)(1)(iii) thereof, provided that notice of such suspension is filed promptly to the extent and in the manner that otherwise would be required for Annual Financial Information, Audited Financial Statements, Listed Event Notices and such additional information.

1 Section 1.7. Additional Disclosure Obligations. The Issuer acknowledges and understands that other state and federal laws, including but not limited to the Securities Act of 1933 and Rule 10b-5 promulgated under the Securities Exchange Act of 1934, may apply to the Issuer and that, under some circumstances, compliance with this Certificate without additional disclosures or other action may not fully discharge all duties and obligations of the Issuer under such laws.

Section 1.8. No Previous Non-Compliance. The Issuer represents that in the previous five years it has not failed to comply in all material respects with any previous undertaking in a written contract or agreement specified in paragraph (b)(5)(i) of the Rule.

ARTICLE II Operating Rules

Section 2.1. Reference to Other Filed Documents. It shall be sufficient for purposes of Section 1.2 hereof if the Issuer provides Annual Financial Information (but not Listed Event notices) by specific reference to documents either (i) available to the public on the MSRB Internet Web Site or (ii) filed with the SEC.

Section 2.2. Submission of Information. Annual Financial Information may be set forth or provided in one document or a set of documents, and at one time or in part from time to time.

Section 2.3. Dissemination Agents. The Issuer may from time to time designate an agent to act on its behalf in providing or filing notices, documents and information as required of the Issuer under this Certificate, and revoke or modify any such designation.

Section 2.4. Transmission of Information and Notices. Unless otherwise required by law all notices, documents and information provided to the MSRB shall be provided in an electronic format as prescribed by the MSRB (presently the MSRB Internet Web Site), and shall be accompanied by identifying information as prescribed by the MSRB.

Section 2.5. Fiscal Year. The Issuer’s current fiscal year is July 1 – June 30, and the Issuer shall promptly provide notice of each change in its fiscal year to the MSRB.

(b) Annual Financial Information shall be provided at least annually notwithstanding any fiscal year longer than 12 calendar months.

ARTICLE III Effective Date, Termination, Amendment and Enforcement

Section 3.1. Effective Date, Termination. (a) This Certificate shall be effective upon the issuance of the Bonds.

(b) The Issuer’s obligations under this Certificate shall terminate upon a legal defeasance, prior redemption or payment in full of all of the Bonds.

(c) This Certificate, or any provision hereof, shall be null and void in the event that (1) the Issuer obtains an opinion of Counsel, addressed to the Issuer to the effect that those portions of the Rule which require this Certificate, or such provision, as the case may be, do not or no longer apply to the Bonds, whether because such portions of the Rule are invalid, have been repealed, or otherwise, as shall be specified in such opinion, and (2) the Issuer delivers a copy of such opinion within one Business Day after receipt by the Issuer to the MSRB. Section 3.2. Amendment. (a) This Certificate may be amended, without the consent of the holders of the Bonds (except to the extent required under clause (4)(ii) below), if all of the following 2 conditions are satisfied: (1) such amendment is made in connection with a change in circumstances that arises from a change in legal (including regulatory) requirements, a change in law (including rules or regulations) or in interpretations thereof, or a change in the identity, nature or status of the Issuer or the type of business conducted thereby, (2) this Certificate as so amended would have complied with the requirements of the Rule as of the date of this Certificate, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances, (3) the Issuer shall have obtained an opinion of Counsel, addressed to the Issuer to the same effect as set forth in clause (2) above, (4) either (i) the Issuer shall have obtained an opinion of Counsel or a determination by a person, in each case unaffiliated with the Issuer (such as bond counsel), and addressed to the Issuer, to the effect that the amendment does not materially impair the interests of the holders of the Bonds or (ii) the holders of the Bonds consent to the amendment to this Certificate, and (5) the Issuer shall have delivered copies of such opinion(s) and amendment to the MSRB within one Business Day after receipt by the Issuer.

(b) In addition to subsection (a) above, this Certificate may be amended without the consent of the holders of the Bonds, if all of the following conditions are satisfied: (1) an amendment to the Rule is adopted, or a new or modified official interpretation of the Rule is issued, after the effective date of this Certificate which is applicable to this Certificate, (2) the Issuer shall have obtained an opinion of Counsel, addressed to the Issuer, to the effect that performance by the Issuer under this Certificate as so amended will not result in a violation of the Rule and (3) the Issuer shall have delivered copies of such opinion and amendment to the MSRB within one Business Day after receipt by the Issuer.

(c) This Certificate may be amended without the consent of the holders of the Bonds, to amend the information and dates specified in Section 1.5(a) hereof.

(d) This Certificate may be amended without the consent of the holders of the Bonds, if all of the following conditions are satisfied: (1) the Issuer shall have obtained an opinion of Counsel, addressed to the Issuer, to the effect that the amendment is permitted by rule, order or other official pronouncement, or is consistent with any interpretive advice or no-action positions of staff of the SEC, and (2) the Issuer shall have delivered copies of such opinion and amendment to the MSRB within one Business Day after receipt by the Issuer.

(e) To the extent any amendment to this Certificate results in a change in the type of financial information or operating data provided pursuant to this Certificate, the first Annual Financial Information provided thereafter shall include a narrative explanation of the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided.

(f) If an amendment is made pursuant to Section 3.2 (a) hereof to the accounting principles to be followed by the Issuer in preparing its financial statements, the Annual Financial Information for the fiscal year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Such comparison shall include a qualitative and, to the extent reasonably feasible, quantitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information.

Section 3.3. Benefit; Third-Party Beneficiaries; Enforcement. (a) The provisions of this Certificate shall constitute a contract with and inure solely to the benefit of the holders from time to time of the Bonds, except that (i) beneficial owners of Bonds shall be third-party beneficiaries of this Certificate. The provisions of this Certificate shall create no rights in any person or entity except as provided in this subsection (a) and in subsection (b) of this Section.

(b) The obligations of the Issuer to comply with the provisions of this Certificate shall be enforceable by any holder of Outstanding Bonds. The holders’ rights to enforce the provisions of this Certificate shall be limited solely to a right, by action in mandamus or for specific performance, to 3 compel performance of the Issuer’s obligations under this Certificate. In consideration of the third-party beneficiary status of beneficial owners of Bonds pursuant to subsection (a) of this Section, beneficial owners shall be deemed to be holders of Bonds for purposes of this subsection (b).

c) Any failure by the Issuer to perform in accordance with this Certificate shall not constitute a default under the Bonds.

(d) This Certificate shall be construed and interpreted in accordance with the laws of the State, and any suits and actions arising out of this Certificate shall be instituted in a court of competent jurisdiction in the State; provided, however, that to the extent this Certificate addresses matters of federal securities laws, including the Rule, this Certificate shall be construed in accordance with such federal securities laws and official interpretations thereof.

ARTICLE IV Definitions

Section 4.1. Definitions. The following terms used in this Certificate shall have the following respective meanings:

(1) “Annual Financial Information” means, collectively, (i) updated versions of the following financial information and operating data contained in the Official Statement, for each fiscal year of the Issuer, as follows:

The financial information and operating data set forth in Appendix A and Appendix B of the Official Statement; and (ii) the information regarding amendments to this Certificate required pursuant to Sections 3.2(e) and (f) of this Certificate. Annual Financial Information shall include Audited Financial Statements, if available, or Unaudited Financial Statements.

The descriptions contained in Section 4.1(1)(i) hereof of financial information and operating data constituting Annual Financial Information are of general categories of financial information and operating data. When such descriptions include information that no longer can be generated because the operations to which it related have been materially changed or discontinued, a statement to that effect shall be provided in lieu of such information. Any Annual Financial Information containing modified financial information or operating data shall explain, in narrative form, the reasons for the modification and the impact of the modification on the type of financial information or operating data being provided.

(2) “Audited Financial Statements” means the annual financial statements, if any, of the Issuer, audited by such auditor as shall then be required or permitted by State law. Audited Financial Statements shall be prepared in accordance with GAAP; provided, however, that pursuant to Sections 3.2(a) and (f) hereof, the Issuer may from time to time, if required by Federal or State legal requirements, modify the accounting principles to be followed in preparing its financial statements. The notice of any such modification required by Section 3.2(a) hereof shall include a reference to the specific Federal or State law or regulation describing such accounting principles, or other description thereof.

(3) “Counsel” means Hilborne & Weidman, A Professional Corporation, Tulsa, Oklahoma or other nationally recognized bond counsel or counsel expert in federal securities laws.

(4) “GAAP” means generally accepted accounting principles as prescribed from time to time for governmental units by the Governmental Accounting Standards Board, or any successor to the duties or responsibilities thereof.

4 (5) “Internet Web Site” means the MSRB’s Electronic Municipal Market Access (EMMA) system, presently at http://emma.msrb.org.

(6) “Listed Event” means any of the following events with respect to the Bonds whether relating to the Issuer or otherwise:

(i) principal and interest payment delinquencies; (ii) non-payment related defaults; (iii) unscheduled draws on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements reflecting financial difficulties; (v) substitution of credit or liquidity providers, or their failure to perform; (vi) adverse tax opinions, the issuance by the IRS of proposed or final determinations of taxability, notices of Proposed Issue (IRS Form 5701-TEB), or other material notices or determinations with respect to the tax status of the security, or other events affecting the tax status of the security (including Build America Bonds); (vii) modifications to rights of Bondholders; (viii) bond calls; (ix) defeasances; (x) release, substitution or sale of property securing repayment of the Bonds; (xi) rating changes; (xii) tender offers; (xiii) bankruptcy, insolvency, receivership or similar event of the obligated group; (xiv) consummation of a merger, consolidation, or acquisition involving an obligated person, or the sale of all or substantially all the assets of the obligated person, other than in the ordinary course of business, the entry of a definitive agreement to undertake such an action or the termination of a definitive agreement relating to such actions, other than pursuant to its terms; and (xv) appointment of a successor or additional trustee or the change of name of a trustee.

(7) “MSRB” means the Municipal Securities Rulemaking Board established pursuant to Section 15B(b)(1) of the Securities Exchange Act of 1934, or any successor thereto or to the functions of the MSRB contemplated by this Certificate.

(8) “Official Statement” means the Official Statement dated , 2012 of the Issuer relating to the Bonds.

(9) “Rule” means Rule 15c2-12 promulgated by the SEC under the Securities Exchange Act of 1934 (17 CFR Part 240, §240.15c2-12), as amended, as in effect on the date of this Certificate, including any official interpretations thereof issued either before or after the effective date of this Certificate which are applicable to this Certificate.

(10) “SEC” means the United States Securities and Exchange Commission.

(11) “Unaudited Financial Statements” means the same as Audited Financial Statements, except that they shall not have been audited.

ARTICLE V Miscellaneous

5 Section 5.1 Counterparts. This Certificate may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

Date: June 1, 2012

CITY OF TULSA, OKLAHOMA

ATTEST: Mayor

City Clerk

(SEAL)