Comprehensive Annual Financial Report Exhibit a February 13, 2008 Page 1 of 177
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Board Resolution 6558 - Comprehensive Annual Financial Report Exhibit A February 13, 2008 Page 1 of 177 Investing in Portland’s Future Exhibit A Page 2 of 177 On the Cover: Board Resolution 6558 - Comprehensive Annual Financial Report February 13, 2008 UNDER THE AUTUMN MOON FESTIVAL 2006 Culminating a planning process that began December 2005, the Portland Develop- ment Commisison (PDC) spearheaded an effort in September 2006 to celebrate the $5.3 million in streetscape improvements in Old Town/Chinatown (OTCT). More than 35,000 people attended the two and a half-day public event, called “Under the Autumn Moon.” The festivities kicked off Friday evening , September 29, with a ribbon cutting on NW Davis Street. A full day of activities and events began Saturday, September 30, with a parade (including grand marshal Mayor Tom Potter), two non-stop music stages, food booths, cooking demonstrations, a glob- al bazaar, tours of the district, an outdoor movie and a fireworks display. Events continued on Sunday, October 1, when the Chinese Classical Garden was open for free all day. Restaurants and businesses in OTCT participated by inviting crowds in to sample foods and wares. Many of the restaurants were packed throughout the event. Many people attending were from the Chinese community, some of whom had not been in Old Town/Chinatown for years. We hope this will be the first of many such events on the new festival streets and that those who attended the Under the Autumn Moon Festival will return often. The vision for the streetscape improvements was to strengthen the identity of the historic district, foster cultural and economic diversity, and promote a vibrant pe- destrian environment for commercial, retail and residential uses. The improvements brought new streets, sidewalks, hundreds of new trees, new streetlights and public art to Old Town/Chinatown. The new streetscape was a joint project of the Portland Office of Transportation, PDC and the OTCT neighborhood. Cover Photo: Fireworks on Saturday night taken from inside the Portland Classical Chinese Garden (photo by ©Loren Nelson). Exhibit A Page 3 of 177 PORTLAND DEVELOPMENT COMMISSION A Component Unit of the City of Portland, Oregon Board Resolution 6558 - Comprehensive Annual Financial Report February 13, 2008 Comprehensive Annual Financial Report Prepared by the Portland Development Commission Central Services Department Bruce A. Warner, Executive Director Julie V. Cody, Interim Central Services Director For the fiscal year ended June 30, 2007 Exhibit A Page 4 of 177 Board Resolution 6558 - Comprehensive Annual Financial Report February 13, 2008 About PDC Where We’ve Been… Where We’re Headed… In 1958, Portland voters created the Portland Development Commission (the “Commission” or “PDC”) as the City agency to deliver projects and programs which achieve the City’s housing, economic development, and redevelopment priorities and link citizens to jobs. Specifically, the Commission is the City agency that helps provide sustained livability for our City and region and has played a major role in keeping Portland one of America’s most livable cities. PDC’s Mission Our Mission is to bring together resources to achieve Portland’s vision of a diverse, sustainable community with healthy neighborhoods, a vibrant central city, a strong regional economy, and quality jobs and housing for all. PDC’s Vision The Portland Development Commission’s Vision is to be a catalyst for positive change in the creation of a world-class 21st Century city; a city in which economic prosperity, quality housing, and employment opportunities are available to all. We will leverage PDC’s resources and innovative capacity systematically and selectively to become the Portland region’s housing, economic development, and public development agency of choice. We will do this by providing service and product leadership to current and potential customers and generating “top line” for city government. This includes building the organization foundation, work environment, and incentives that will support this vision. It also includes a commitment to continuous improvement of all that we do and providing the highest possible quality service to our customers. The Commission is responsible for maintaining an accounting system and providing for a comprehensive independent financial audit. The following pages are the Commission’s Comprehensive Annual Financial Report with accompanying report of independent auditor. Exhibit A Page 5 of 177 Board Resolution 6558 - Comprehensive Annual Financial Report FebruaryTable 13, 2008 of Contents Page INTRODUCTORY SECTION Letter of Transmittal from Executive Director and Interim Central Services Director .............. i-vi Governing Board ........................................................................................................................vii Organization Chart ....................................................................................................................viii Map of Urban Renewal Areas .................................................................................................... ix Certificate of Achievement for Excellence in Financial Reporting............................................... x FINANCIAL SECTION Independent Auditor’s Report...................................................................................................1-2 Management’s Discussion and Analysis................................................................................3-18 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets..................................................................................................19 Statement of Activities ................................................................................................20-21 Fund Financial Statements: Balance Sheet – Governmental Funds ......................................................................22-23 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets ...................................................................................24 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds...................................................................25-26 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities..................................................................................................27 Statement of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual: General Fund (adopted as Urban Redevelopment Fund).........................................28 Housing and Community Development Contract Fund.............................................29 Statement of Net Assets – Proprietary Funds .................................................................30 Statement of Revenues, Expenses, and Changes in Fund Net Assets – Proprietary Funds ..........................................................................31 Statement of Cash Flows – Proprietary Funds................................................................32 Statement of Fiduciary Assets and Liabilities – Agency Fund ........................................33 Exhibit A Page 6 of 177 Table of Contents (continued) Board Resolution 6558 - Comprehensive Annual Financial Report February 13, 2008 Page FINANCIAL SECTION, Continued: Basic Financial Statements, Continued: Notes to the Basic Financial Statements: I. Summary of Significant Accounting Policies.............................................................34 II. Stewardship, Compliance, and Accountability ..........................................................40 III. Detailed Notes on All Funds: A. Cash and Cash Equivalents and Cash with City of Portland Investment Pool .........................................................................................41 B. Internal Balances and Transfers..................................................................43 C. Loans Receivable ........................................................................................44 D. Property Held for Sale..................................................................................50 E. Capital Assets ..............................................................................................50 F. Operating Leases.........................................................................................51 G. Private Lender Participation Agreements and Notes Payable..................... 51 H. Amounts Due To and From the City of Portland..........................................53 IV. Other Information: A. Retirement and Deferred Compensation Plans ..........................................54 B. Other Postemployment Benefits ..................................................................56 C. Commitments...............................................................................................56 D. PDC’s Use of the City of Portland’s Conduit Debt.......................................56 E. Contingencies ..............................................................................................57 F. Risk Management ........................................................................................58 G. Related Party Transactions..........................................................................59 H. Reviews by Grantor Agencies......................................................................60 I. Voluntary Non-Exchange