OFFICIAL STATEMENT DATED JANUARY 25, 2011 NEW ISSUE – Competitive Ratings: Moody’s Aa2 and S&P AA Book-Entry Only See “Ratings” herein
In the opinion of K&L Gates LLP, Bond Counsel to the City (“Bond Counsel”), assuming compliance with certain covenants of the City, interest on the Bonds is excludable from gross income for federal income tax purposes under existing law and interest on the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individual and corporations; however, interest on the Bonds is included in adjusted current earnings for the purpose of computing the federal alternative minimum tax imposed on certain corporations. See “Tax Matters” herein for a discussion of the opinion of Bond Counsel. In the opinion of Bond Counsel, interest on the Bonds is exempt from Oregon personal income tax under existing law.
CITY OF TIGARD WASHINGTON COUNTY, OREGON $17,000,000 $8,655,000 General Obligation Bonds, General Obligation Refunding Bonds, Series 2011A Series 2011B
Dated: Date of Delivery Due: Series A: June 1; Series B: December 1, as shown on inside cover
The General Obligation Bonds, Series 2011A (the “2011A Bonds”) and the General Obligation Bonds, Series 2011B (the “2011B Bonds”) (the “2011A Bonds” and with the “2011B Bonds”, collectively, the “Bonds”) will be issued by the City of Tigard, Washington County, Oregon (the “City”), in book-entry only form in denominations of $5,000 or integral multiples thereof. The Bonds are registered bonds issued in the name of CEDE & Co., as nominee of The Depository Trust Company ("DTC"), New York, New York. (See "BOOK-ENTRY SYSTEM ONLY" herein.) Interest is payable semiannually on December 1 and June 1 of each year, commencing December 1, 2011, through the principal trust offices of the City’s paying agent, currently The Bank of New York Mellon Trust Company, N.A., Seattle, Washington (the “Paying Agent”). The proceeds of the sale of the Bonds will be used to acquire open spaces, protect clean water, improve parklands, refund the City’s outstanding general obligation bonds to achieve debt service savings and to pay the costs of issuing the Bonds. The City has pledged its full faith and credit for the punctual payment of the Bonds. The City has covenanted to levy annually, and as provided by law, a direct ad valorem tax upon all of the taxable property within the City in sufficient amount to pay the Bonds promptly as they mature. The City covenants to levy this tax each year until all the Bonds are paid. This tax shall be in addition to all other taxes of the City, and this tax shall not be limited in rate, amount or otherwise, by Sections 11 or 11b of Article XI of the Oregon Constitution. The Series 2011A Bonds and the Series 2011B Bonds are subject to optional redemption. The 2011A Bonds are also subject to mandatory redemption prior to maturity. See "Redemption of the Bonds" herein. ______Maturity Schedule On Inside Cover ______
Wells Fargo Bank National Association purchased the 2011A Bonds and Citigroup Global Markets Inc. purchased the 2011B Bonds via competitive sale on January 25, 2011. The Bonds are offered when, as and if issued and sold by the City and accepted by the Bond Purchasers, subject to the approving opinion of K&L Gates LLP, Portland, Oregon, Bond Counsel to the City. The City expects that the Bonds will be available for delivery to the Paying Agent for Fast Automated Securities Transfer on behalf of DTC, on or about February 3, 2011. This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must read the entire official statement to obtain information essential to the making of an informed investment decision.
Western Financial Group, LLC 333 State Street, Suite V Lake Oswego, Oregon 97034
MATURITY SCHEDULES
$ 17,000,000 GENERAL OBLIGATION BONDS, SERIES 2011A
Due Principal Interest CUSIP#† June 1 Amount Rate Yield 886708 2012 $ 395,000 3.00% 0.42% EV4 2013 625,000 3.00 0.83 EW2 2014 645,000 3.00 1.21 EX0 2015 665,000 3.00 1.67 EY8 2016 685,000 3.00 1.99 EZ5 2017 705,000 3.00 2.30 FA9 2018 725,000 3.00 2.66 FB7 2019 750,000 4.00 2.99 FC5 2020 780,000 4.00 3.27 FD3 2021 810,000 4.00 3.52 FE1 2022 845,000 4.00 3.76* FF8 2023 875,000 4.00 3.94* FG6 2024 910,000 4.00 4.10 FH4 2025 950,000 4.25 4.25 F J0 2026 990,000 4.25 4.40 FK7 $2,105,000 4.50% Term Bond due June 1, 2028 @ 4.62% CUSIP#†886708 FL5 $3,540,000 4.75% Term Bond due June 1, 2031 @ 4.75% CUSIP#†886708 FM3 * Priced to the first call date of June 1, 2021 at par.
$ 8,655,000 GENERAL OBLIGATION REFUNDING BONDS, SERIES 2011B Due Principal Interest CUSIP#† December 1 Amount Rate Yield 886708 2011 $ 510,000 3.00% 0.40% FN1 2012 625,000 3.00 0.60 FP6 2013 645,000 3.00 1.00 FQ4 2014 665,000 3.00 1.25 FR2 2015 685,000 3.00 1.75 FS0 2016 705,000 3.00 2.00 FT8 2017 730,000 3.00 2.35 FU5 2018 755,000 4.00 2.68 FV3 2019 785,000 4.00 3.05 FW1 2020 815,000 4.00 3.35 FX9 2021 850,000 4.00 3.57* FY7 2022 885,000 4.00 3.78* FZ4 * Priced to the first call date of December 1, 2020 at par. This Official Statement does not constitute an offer to sell the Bonds in any jurisdiction in which or to a person to whom it is unlawful to make such an offer. No dealer, salesperson or other person has been authorized by the City, the Financial Advisor or the Bond Purchasers to give any information or to make any representations, other than those contained herein, in connection with the offering of the Bonds and, if given or made, such information or representations must not be relied upon. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder will, under any circumstances, create an implication that there has been no change in the affairs of the City since the date hereof. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL STATEME NT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. † © 2010, American Bankers Association. CUSIP® is a registered trademark of the American Bankers Association. The CUSIP numbers are provided by Standard & Poor’s CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. These numbers are not intended to create a database and do not serve in any way as a substitute for CUSIP service. CUSIP numbers are provided for convenience and reference only and are subject to change. The City makes no representation regarding, nor is it responsible for, the accuracy of the CUSIP numbers. OFFICIAL STATEMENT
CITY OF TIGARD WASHINGTON COUNTY, OREGON 13125 S.W. Hall Blvd. Tigard, Oregon 97223 (503) 639-4171
RELATING TO $17,000,000 GENERAL OBLIGATION BONDS, SERIES 2011A AND $8,655,000 GENERAL OBLIGATION REFUNDING BONDS, SERIES 2011B
CITY COUNCIL
Craig Dirksen, Mayor Nick Wilson, President Gretchen Buehner Marland Henderson Marc Woodard
ADMINISTRATION
City Manager Craig Prosser Assistant City Manager Elizabeth Ann Newton Finance and Information Services Director Toby LaFrance Assistant Finance Director Debbie Smith-Wagar Public Works Director Dennis Koellermeier Park and Facilities Manager Steven F. Martin
PROFESSIONAL SERVICES
K&L Gates LLP, Bond Counsel Western Financial Group LLC, Financial Advisor The Bank of New York Mellon Trust Company, N.A., Seattle, Washington, Paying Agent
(THIS PAGE INTENTIONALLY LEFT BLANK) TABLE OF CONTENTS
THE BONDS ...... 1 Deferred Compensation Plans ...... 24 Authorization and Purpose ...... 1 Other Post-Employment Benefits ...... 24 Security...... 1 ECONOMIC AND DEMOGRAPHIC INFORMATION . 25 Redemption of the Bonds ...... 2 Population ...... 25 Paying Agent, Registration ...... 2 Table 17 - Estimated Population ...... 25 Transfer of the Bonds ...... 2 Employment ...... 26 Use of Proceeds ...... 3 Table 18 - Washington County Labor Force ...... 26 Table 1 - Sources and Uses of Funds ...... 3 Table 19 - Washington County Non-Agricultural Wage and Table 2 - General Obligation Bond Debt Service Salary Employment NAICS ...... 27 Requirements ...... 4 Table 20 - Major Employers ...... 28 DEBT INFORMATION ...... 5 Economic Development ...... 28 Debt Ratios ...... 5 Table 21 - Income Estimates for the County, State and Debt Limitation ...... 5 Nation ...... 29 Short Term Debt ...... 5 Housing ...... 29 Future Debt Plans ...... 5 Table 22 - Building Activity in the City ...... 29 Overlapping Debt and Outstanding Obligations ...... 6 Transportation ...... 30 Table 3 - Overlapping Debt ...... 6 Utilities ...... 30 Table 4 – Outstanding Long-Term Obligations...... 6 Public Facilities ...... 30 Information Sources ...... 31 PROPERTY TAX INFORMATION ...... 7 LITIGATION ...... 32 Strategic Investments Program ...... 8 Data Tables...... 9 LEGAL MATTERS ...... 32 Table 5 - 2010-11 Representative Consolidated Tax Rates THE INITIATIVE PROCESS ...... 32 for Code Area 23.74 ...... 9 Proposed Initiatives that Qualify to Be Placed on the Ballot .. 32 Table 6 - 2010-11 Major Taxpayers in the City ...... 10 Initiative History ...... 33 Table 7 - Assessed Valuation and Levy Record ...... 10 Table 23 – Initiative Petitions that Qualified and Passed ... 33 Table 8 - Tax Collection Record ...... 11 TAX MATTERS ...... 33 Table 9 - Bond and Levy Election Record ...... 11 State of Oregon Tax Exemption ...... 34 CITY OF TIGARD ...... 12 RATINGS ...... 34 Government ...... 12 Table 10 - City Council ...... 12 FORWARD-LOOKING STATEMENTS ...... 34 Administration ...... 12 CONTINUING DISCLOSURE ...... 34 Staff ...... 13 MISCELLANEOUS ...... 34 Table 11 - Bargaining Units and Contract Status ...... 13 Capital Improvement Program ...... 13 CONCLUDING STATEMENT ...... 35 Table 12 - Capital Improvements ...... 13 Park System Master Plan ...... 14 APPENDIX A: Forms of Bond Declaration FINANCIAL INFORMATION ...... 14 APPENDIX B: Comprehensive Annual Financial Report Basis of Accounting ...... 14 for the fiscal year ended June 30, 2010 Fiscal Year ...... 14 APPENDIX C: Forms of Legal Opinion Audits ...... 14 APPENDIX D: Forms of Continuing Disclosure Certificate Budgeting Process ...... 14 APPENDIX E: Book-Entry-Only System Table 13 - Summary of 2010-11 Adopted General Fund Budget ...... 16 Financial Tables ...... 17 Table 14 – Statement of Net Assets ...... 17 Table 15 - General Fund Consecutive Balance Sheets ...... 18 Table 16 - General Fund Consecutive Statement of Revenue, Expenditures and Changes in Fund Balances ...... 19 Other Financing Sources ...... 19 Cash and Investments ...... 20 Insurance and risk ...... 21 Litigation related to Tort Claims Against Oregon Governments21 Retirement Plan- ICMARC Plans...... 22 Police Pension Plan ...... 22 (THIS PAGE INTENTIONALLY LEFT BLANK) OFFICIAL STATEMENT
CITY OF TIGARD WASHINGTON COUNTY, OREGON $17,000,000 $8,655,000 General Obligation Bonds, General Obligation Refunding Bonds, Series 2011A Series 2011B
The purpose of this Official Statement is to set forth certain information concerning the City of Tigard, Washington County, Oregon (the "City"), and the City's $17,000,000 General Obligation Bonds, Series 2011A (the “2011A Bonds”) and $8,655,000 General Obligation Refunding Bonds, Series 2011B (the “2011B Bonds”) (the “2011A Bonds” and with the “2011B Bonds”, collectively, the “Bonds”), which are dated their date of delivery (the "Bonds"). This Official Statement, which includes the cover page and all attachments hereto, provides information concerning the City and the Bonds. THE BONDS
The Series 2011A Bonds and the Series 2011B Bonds will be issued in the aggregate principal amount of $17,000,000 and $8,655,000, respectively, and will be dated and bear interest from the date of delivery. The Bonds will mature on the dates and in the principal amounts, and will bear interest payable semi-annually on December 1 and June 1, commencing December 1, 2011 at the rates as set forth on the inside cover of this Official Statement. The Bonds will be issued only as fully registered bonds without coupons in principal denominations of $5,000 or any integral multiple thereof. Interest on the Bonds will be remitted by the registrar and paying agent of the City, currently The Bank of New York Mellon Trust Company, N.A., Seattle, Washington (the “Paying Agent”) to DTC, which in turn will be required to distribute such payment to DTC Participants for ultimate distribution to Beneficial Owners. AUTHORIZATION AND PURPOSE The 2011A Bonds are being issued pursuant to Oregon Revised Statutes (“ORS”) Chapter 287A, inclusive, the authority granted by the voters of the City at an election held November 2, 2010, the City’s authorizing Resolution No. 10-75 adopted by the City on December 28, 2010 (the “Bond Resolution”) and a Bond Declaration (the “2011A Bond Declaration”) that is dated the date of delivery of the Bonds, a form of which is included in APPENDIX A. The proceeds of the sale of the 2011A Bonds will be used to acquire open spaces, protect clean water, improve parklands and to pay the costs of issuance of the 2011A Bonds. The 2011B Bonds are authorized to refinance the Series 2002 Bonds pursuant to ORS Section 287A.360, the Bond Resolution, and a Bond Declaration (the “2011B Bond Declaration” and collectively with the 2011A Bond Declaration, the “Bond Declarations”) that is dated the date of delivery of the Bonds, a form of which is included in APPENDIX A. The City issued a $13,000,000 general obligation bond associated with the Community Facilities Loan Number K03001 dated December 4, 2002 with the Oregon Business Development Department (formerly the Oregon Community Economic Development Department) to build and equip the City’s Library (the “Series 2002 Bonds”). The current principal balance of the Series 2002 Bonds is $8,867,819. SECURITY The Bonds are general obligations of the City. The City pledges its full faith and credit to pay the Bonds. The City covenants to levy a direct ad valorem tax upon all of the taxable property within the City which is sufficient, after taking into consideration discounts taken and delinquencies that may occur in the payment of such taxes, to pay all Bond principal and interest when due. The City covenants to levy this tax each year until all the Bonds are paid. This tax shall be in addition to all other taxes of the City, and this tax shall not be limited in rate, amount or otherwise, by Sections 11 or 11b of Article XI of the Oregon Constitution. The Bonds do not constitute a debt or obligation of Washington County, the State of Oregon or any political subdivision thereof other than the City.
1 REDEMPTION OF THE BONDS Optional Redemption The 2011A Bonds maturing in years 2012 through 2021, inclusive, are not subject to optional redemption prior to maturity. The 2011A Bonds maturing on June 1, 2022 and on any date thereafter are subject to redemption at the option of the City prior to their stated maturity at any time on or after June 1, 2021, as a whole or in part, and if in part, with maturities to be selected by the City and by DTC or by lot within a maturity at a price of par, plus accrued interest, if any, to the date of redemption. The Series 2011B Bonds maturing on December 1, 2021 and on any date thereafter are subject to redemption at the option of the City prior to their stated maturity at any time on or after December 1, 2020, as a whole or in part, and if in part, with maturities to be selected by the City and by DTC or by lot within a maturity at a price of par, plus accrued interest, if any, to the date of redemption. Mandatory Redemption If not previously redeemed as described above, the 2011A Term Bonds shown below are subject to mandatory redemption, (in such manner as the Paying Agent and DTC shall determine) on June 1 of the following years in the following principal amounts at par plus accrued interest to the date of redemption: 2011A Term Bond Due June 1, 2028 Year Amount 2027 $1,030,000 2028 1,075,000*
2011A Term Bond Due June 1, 2031 Year Amount 2029 $1,125,000 2030 1,180,000 2031 1,235,000*
*Final maturity.
Optional prepayments of the 2011A Term Bonds may be credited against mandatory prepayments in the manner determined by the City. Notice of Redemption While the Bonds are in book-entry form, the Paying Agent will give notice of any redemption to DTC, and DTC will be responsible for giving notice and making redemption payments to Beneficial Owners. Notice of redemption will be given pursuant to the Bond Declarations. Conditional Redemption Any notice of optional redemption to the Paying Agent or to the Bond owners may state that the optional redemption is conditional upon receipt by the Paying Agent of moneys sufficient to pay the redemption price of such Bonds or upon the satisfaction of any other condition, and/or that such notice may be rescinded upon the occurrence of any other event, and any conditional notice so given may be rescinded at any time before payment of such redemption price if any such condition so specified is not satisfied or if any such other event occurs. Notice of such rescission or of the failure of any such condition shall be given by the Paying Agent to affected Bond owners as promptly as practicable upon the failure of such condition or the occurrence of such other event. PAYING AGENT, REGISTRATION The Bonds will be registered and payable upon presentation at the principal corporate trust office of the Paying Agent, in Seattle, Washington. TRANSFER OF THE BONDS While the Bonds are in book-entry only form, Beneficial Owners may transfer the bonds only through DTC. If the Bonds cease to be in book-entry only form, the Bonds may be transferred upon the books of the Paying Agent as provided in the Bond Declarations. 2 USE OF PROCEEDS Series 2011A Bonds The proceeds of the sale of the Series 2011A Bonds will be used to acquire open spaces, protect clean water and improve parklands as described in City Measure #34-181 approved by the voters on November 2, 2010, and to pay the costs of issuance of the 2011A Bonds. The City expects to use the 2011A Bond proceeds to fund land acquisition, restoration, capital construction and improvements; including land acquisition to preserve open space, parklands, and wildlife habitat, and protect streams for improved local water quality; and creation and improvement of community parks, recreational areas and trails. At least 80 percent of bond proceeds will go toward land acquisition for open spaces, parks or trail corridors. Up to 20 percent of bond proceeds will go toward improvements and development of park land. Up to $1.7 million may be spent for a downtown area park acquisition and development. Series 2011B Bonds The proceeds of the sale of the Series 2011B Bonds will be used to refinance the outstanding Series 2002 Bonds for debt service savings and to pay the costs of issuance of the Series 2011B Bonds. On the Date of Delivery of the 2011B Bonds, the City will send funds to the Oregon Business Development Department to prepay the outstanding Series 2002 Bonds, along with a premium on February 15, 2010.
Table 1 - Sources and Uses of Funds
Series 2011A Bonds Sources of Funds Par Amount $17,000,000.00 Net Original Issue Premium 298,942.60 Total Sources of Funds $17,298,942.60
Uses of Funds Project Costs $17,033,462.60 Costs of Issuance 83,750.00 Underwriter’s Discount 181,730.00 Total Uses of Funds $17,298,942.60 Series 2011B Bonds Sources of Funds Par Amount $8,655,000.00 Original Issue Premium 442,282.15 Contribution from 2002 Debt Service Fund 100,000.00 Total Sources of Funds $9,197,282.15
Uses of Funds Series 2002 Bond Prepayment $9,111,983.82 Costs of Issuance 30,703.12 Underwriter’s Discount 54,595.21 Total Uses of Funds $9,197,282.15
Source: City of Tigard.
3
Table 2 - General Obligation Bond Debt Service Requirements1
Fiscal Year Series 2011A General Series 2011B General Obligation Total G.O. Debt Ending Outstanding Refunded Obligation Bonds Refunding Bonds Service June 30 G.O. Bonds2 G.O. Bonds2 Principal Interest Principal Interest Requirements 2011 $ 974,758 ($ 974,758) 2012 977,118 (977,118) $ 395,000 $ 899,536 $ 510,000 $ 391,414 $ 2,195,950 2013 972,993 (972,993) 625,000 665,625 625,000 275,875 2,191,500 2014 972,518 (972,518) 645,000 646,875 645,000 256,825 2,193,700 2015 975,719 (975,719) 665,000 627,525 665,000 237,175 2,194,700 2016 972,348 (972,348) 685,000 607,575 685,000 216,925 2,194,500 2017 972,273 (972,273) 705,000 587,025 705,000 196,075 2,193,100 2018 975,367 (975,367) 725,000 565,875 730,000 174,550 2,195,425 2019 976,342 (976,342) 750,000 544,125 755,000 148,500 2,197,625 2020 975,291 (975,291) 780,000 514,125 785,000 117,700 2,196,825 2021 972,157 (972,157) 810,000 482,925 815,000 85,700 2,193,625 2022 972,244 (972,244) 845,000 450,525 850,000 52,400 2,197,925 2023 - - 875,000 416,725 885,000 17,700 2,194,425 2024 - - 910,000 381,725 - - 1,291,725 2025 - - 950,000 345,325 - - 1,295,325 2026 - - 990,000 304,950 - - 1,294,950 2027 - - 1,030,000 262,875 - - 1,292,875 2028 - - 1,075,000 216,525 - - 1,291,525 2029 - - 1,125,000 168,150 - - 1,293,150 2030 - - 1,180,000 114,713 - - 1,294,713 2031 - - 1,235,000 58,663 - - 1,293,663 Total $11,689,128 ($11,689,128) $17,000,000 $8,861,386 $ 8,655,000 $ 2,170,839 $36,687,225
1. Columns may not foot due to rounding. 2. The Series 2002 Bonds. See Table 4 – Outstanding Obligations.
Source: City of Tigard.
4 DEBT INFORMATION
DEBT RATIOS Percent of Values Per Capita Real Market Value
2010 Population 47,595 -- -- 2010-11 Real Market Value $7,260,251,256 $152,542 -- Net Direct Debt $25,655,000 $539 0.35% Net Overlapping Debt $112,062,864 $2,355 1.54% Net Direct and Net Overlapping Debt $137,717,864 $2,894 1.90%
DEBT LIMITATION Unless the city charter provides a lesser limit, ORS 287A.050 limits the general obligation debt which an Oregon city may have outstanding at any time to three percent of the real market value of the city. The limitation does not apply to general obligation bonds issued to finance local improvements assessed and paid for in installments under statutory or charter authority or to finance capital construction or capital improvements for: (a) water supply, treatment or distribution; (b) sanitary or storm sewage collection or treatment; (c) hospitals or infirmaries; (d) gas, power or lighting; or (e) off-street motor vehicle parking facilities. In addition, ORS 223.295 limits the amount of improvement (Bancroft) bonded debt which a city may have outstanding at any one time to three percent of the real market value of the city.
2010-11 RMV $7,260,251,256 G.O. debt limitation (3% of RMV) $217,807,538 Applicable bonded debt1 $25,655,000 Remaining Debt capacity $192,152,538 Percent of limit issued 11.78%
1. Includes the Series 2011 Bonds.
SHORT TERM DEBT On June 17, 2009, the City entered into a $6 million line of credit secured by water system revenues. The City has drawn down $4 million from this line of credit and expects to refinance this line of credit by issuing long-term water revenue bonds or other obligations prior to the line of credit’s maturity on June 30, 2012. FUTURE DEBT PLANS The City entered into a partnership with the City of Lake Oswego to improve their water treatment plant and provide water to both jurisdictions. On November 9, 2010, the Tigard City Council adopted the Water Finance Plan. This plan is the basis for funding the City’s portion of the joint project. The plan has $125.5 million in revenue bonds in three issues between Fiscal Year 2012 and Fiscal Year 2017.
5 OVERLAPPING DEBT AND OUTSTANDING OBLIGATIONS
Table 3 - Overlapping Debt (As of December 30, 2010)
2010-11 OVERLAPPING Real Market Percent Gross Property- Net Property- Overlapping District Valuation Overlapping Tax Backed Debt 1 Tax Backed Debt 2 Metro $208,138,998,272 3.71% $ 8,578,829 $6,645,848 Northwest Regional ESD 90,354,786,396 8.54 555,638 0 Port of Portland 228,377,750,177 3.38 2,413,617 0 Portland Community College 165,643,687,831 4.66 18,849,198 10,048,246 Tri-Met 207,106,827,948 3.73 712,320 712,320 Tualatin Valley Fire & Rescue District 61,322,615,295 12.59 5,648,867 3,509,383 Washington County 68,906,340,513 11.20 14,103,544 2,273,681 Washington County School Dist. No. 23J 12,764,398,295 50.28 66,316,254 66,316,254 Washington County School Dist. No. 48J 32,940,744,340 3.95 22,557,132 22,557,132 Totals $139,735,399 $112,062,864
NOTE: Columns may not foot due to rounding. Does not include the Series 2011A or the 2011B Bonds.
1. “Gross Property-tax Backed Debt” includes all voter approved general obligation bonds, limited tax bonds, and any other bonds, certificates of participation or leases backed by the full faith and credit of the issuer. Debt whose term is less than one year is not included. 2. “Net Property-tax Backed Debt” is Gross Property-tax Backed Debt less self-supporting obligations.
Source: Municipal Debt Advisory Commission, Oregon State Treasury.
Table 4 – Outstanding Long-Term Obligations (As of February 3, 2011)
Principal Dated Maturity Principal Outstanding Date Date Issued as of 2/3/11 General Obligation Bonds Series 2002 (OBDD Library Loan) 12/04/02 12/01/22 $13,000,000 $ 8,886,210 Less: Refunded (8,886,210) Series 2011A (Open spaces & parks) 02/03/11 06/01/31 17,000,000 17,000,000 Series 2011B (Library refunding) 02/03/11 12/01/22 8,655,000 8,655,000 Total general obligation bonds (net direct debt) $38,655,000 $25,655,000
Full Faith & Credit Obligations of the City Series 2002 (Cook Park)1 01/23/02 01/23/12 $ 2,290,248 $ 270,925 Series 2010 (Transportation)2 06/21/10 06/01/20 7,250,000 7,250,000 Series 2002 (69th Avenue)3 06/27/02 06/27/19 1,307,969 661,223 Series 2003 (Dartmouth Street)3 12/04/03 11/15/13 1,947,678 190,029 $12,795,895 $8,372,177
Note: This table shows all outstanding long-term obligations of the City.
1. Repayment comes from installment contracts with property owners. 2. Repayment comes from gas taxes. 3. Repayment comes from park system development charges. Source: City of Tigard.
6 PROPERTY TAX INFORMATION
Most local governments, school districts, education services districts and community college districts (“local governments”) have permanent authority to levy property taxes for operations (“Permanent Rates”) up to a maximum rate (the “Operating Tax Rate Limit”). Local governments that have never levied property taxes may request that voters approve a new Operating Tax Rate Limit. Local governments with operating tax rates may not increase the Operating Tax Rate Limits; rather they may request only that voters approve limited term levies for operations or capital expenditures (“Local Option Levies”) or levies to repay general obligation bonded indebtedness (“General Obligation Bond Levies”). The City’s Operating Tax Rate is Limit is $2.5131 per $1,000 of assessed property value. Local Option Levies that fund operating expenses are limited to five years, and Local Option Levies that are dedicated to capital expenditures are limited to ten years. The City currently does not have any Local Option Levies. Local governments impose property taxes by certifying their levies to the county assessor of the county in which the local government is located. Property taxes ordinarily can only be levied once each Fiscal Year, which is July 1 through June 30. The local government ordinarily must notify the county assessor of its levies by July 15. Valuation of Property – Real Market Value. “Real Market Value” is the minimum amount in cash which could reasonably be expected by an informed seller acting without compulsion, from an informed buyer acting without compulsion, in an “arms- length” transaction during the period for which the property is taxed. Property subject to taxation includes all privately owned real property (land, buildings and improvements) and personal property (machinery, office furniture and equipment) for non-residential taxpayers. There is no property tax on household furnishings, personal belongings, automobiles, crops, orchards, business inventories or intangible property such as stocks, bonds or bank accounts, except for centrally assessed utilities, for which intangible personal property is subject to taxation. Property used for charitable, religious, fraternal and governmental purposes is exempt from taxation. Special assessments that provide a reduction in the taxable Real Market Value may be granted (upon application) for veterans’ homesteads, farm and forest land, open space and historic buildings. The Real Market Value of specially assessed properties is often called the “Taxable Real Market Value” or “Measure 5 Real Market Value.” The assessment roll, a listing of all taxable property, is prepared as of January 1 of each year. Valuation of Property – Assessment. Property taxes are imposed on the assessed value of property. The assessed value of each parcel cannot exceed its Taxable Real Market Value, and ordinarily is less than its Taxable Real Market Value. The assessed value of property was initially established in 1997 as a result of a constitutional amendment. That amendment (now Article XI, Section 11, often called “Measure 50”) assigned each property a value and limited increases in that assessed value to three percent per year, unless the property is improved, rezoned, subdivided, or ceases to qualify for exemption. When property is newly constructed or reassessed because it is improved, rezoned, subdivided, or ceases to qualify for exemption, it is assigned an assessed value that is comparable to the assessed value of similar property. The Oregon Department of Revenue (“ODR”) appraises and establishes values for utility property, forestland and most large industrial property for county tax rolls. It collects taxes on harvested timber for distribution to schools, county taxing districts, and State programs related to timber. Certain properties, such as utilities, are valued on the unitary valuation approach. Under the unitary valuation approach, the taxpaying entity’s operating system is defined and a value is assigned for the operating unit using the market value approach (cost, market value and income appraisals). Values are then allocated to the entities’ operations in Oregon, and then to each county the entity operates in and finally to site locations. Generally speaking, industrial properties are valued using an income approach, but ODR may apply additions or retirements of the property value through a cost of materials approach. Under the income and cost of materials approaches, property values fluctuate from year-to-year. Tax Rate Limitation – Measure 5. A tax rate limitation was established in 1990 as a result of a constitutional amendment. That amendment (now Article XI, Section 11b, often called “Measure 5”) separates property taxes into two categories: one to fund the public school system (kindergarten through grade twelve school districts, education service districts and community college districts, collectively “Education Taxes”) and one to fund government operations other than the public school system (“General Government Taxes”). Education Taxes are limited to $5 per $1,000 and General Government Taxes are limited to $10 per $1,000 of the Taxable Real Market Value of property (the “Measure 5 Limits”). If the taxes on a property exceed the Measure 5 Limit for Education or General Government, then tax rates are compressed to the Measure 5 Limit. Local Option Levy compress to zero before there is any compression of Permanent Rates.
7 Taxes imposed to pay the principal and interest on the following bonded indebtedness are not subject to Measure 5 Limit: (1) bonded indebtedness authorized by a specific provision of the State Constitution; and (2) general obligation bonds that are approved by the voters and issued to pay for costs of capital construction or improvements; and (3) general obligation bonds issued to refund previously issued general obligation bonds. The Bonds are exempt from Measure 5 limits. In 2007, the Oregon Supreme Court determined that taxes levied by general purpose governments (such as cities and counties) may be subject to the $5 per $1,000 limit if those taxes are used for educational services provided by public schools. For the 2010-11 tax year there was no compression of the City’s tax levy. Property Tax Collections. The County Assessor is required to deliver the tax roll to the County Tax Collector in sufficient time to mail tax statements on or before October 25 each year. All tax levy revenues collected by the County for all taxing units within the County are required to be placed in an unsegregated pool, and each taxing unit shares in the pool in the same proportion as its levy bears to the total of all taxes levied by all taxing units within the County. As a result, the tax collection record of each taxing unit is a pro-rata share of the total tax collection record of all taxing units within the County combined. Under the partial payment schedule, taxes are payable in three equal installments on the 15th of November, February and May of the same Fiscal Year. The method of giving notice of taxes due, the county treasurer’s account for the money collected, the division of the taxes among the various taxing districts, notices of delinquency, and collection procedures are all specified by detailed statutes. The lien for property taxes is prior to all other liens or encumbrances of any kind on real or personal property subject to taxation. By law, the County may not commence foreclosure of a tax lien on real property until three years have passed since the first delinquency. A Senior Citizen Property Tax Deferral Program (1963) allows certain homeowners to defer taxes until death or sale of the home. A similar program is offered for Disability Tax Deferral (2001), which does not have an age limitation. STRATEGIC INVESTMENTS PROGRAM The Strategic Investment Program (“SIP”) was authorized by the Oregon Legislature in 1993 to provide tax incentives for capital intensive investments by firms in Oregon’s key industries, particularly in the high technology and metals industries. SIP recipients receive a tax break on the assessed value of new construction over $100 million for 15 years. The $100 million cap on assessed value increases by 3 percent per year. SIP recipients pay an annual Community Service Fee which is equal to one- fourth of the value of the tax break and which is allocated to local governments. The Community Service Fee is not considered a property tax and thus is outside of the constitutional property tax rate limitations. There are no SIP recipients in the City.
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8 DATA TABLES The following tables provide information about the City’s assessed valuation, real market value, tax levies, tax rates, tax collection and principal taxpayers. The following table presents the representative consolidated tax rates for the largest tax code area in the City.
Table 5 - 2010-11 Representative Consolidated Tax Rates for Code Area 23.74 1
Tax Rates for Tax Rate Tax Rate Operations For Bonds Total Schools Education Service District $ 0.1530 - $ 0.1530 Portland Community College 0.2814 $ 0.3522 0.6336 School District No. 23 - Tigard 5.9581 1.3805 7.3386 Total Schools 6.3925 1.7327 8.1252
Local governments Washington County 2 2.8266 0.1407 2.9673 Tualatin Valley Fire & Rescue 1.7672 0.1076 1.8748 City of Tigard 3 2.5000 0.2087 2.7087 Port of Portland 0.0698 - 0.0698 Metro 0.0961 0.3114 0.4075 Tri-Met - 0.0874 0.0874 Tigard Tualatin Aquatic Center 0.0895 - 0.0895 Urban Renewal 0.0729 - 0.0729 Total Local Government 7.4221 0.8558 8.2779
Total Consolidated Tax Rate $ 13.8146 $ 2.5885 $ 16.4031
1. The 2010-11 Assessed Value to compute the tax rate of Tax Code Area 23.74 in Washington County is $2,868,506,076 which is 57.0 percent of the Assessed Value of the City. 2. Tax rates for operations include two local option levies. The first is a 5-year local option levy for public safety services with a rate of $0.42 per $1,000 assessed value and runs through June 2016. An additional local option levy for library service was also renewed in the November 2, 2010 election that levies $0.17 per $1,000 of assessed value. The library services levy also runs through June 2016. 3. $2.5000 per thousand dollars of assessed value is an effective rate, calculated on the total assessed value of property inside the City. The permanent tax rate for the City is $2.5131 and the City levies that rate each year on the assessed value of all property inside the City that is subject to taxation by the City. Part of the total assessed value of the City is “incremental value” of urban renewal districts, and is not subject to taxation by the City. The effective rate is lower than the permanent tax rate, reflecting the inability of the City to tax the incremental value of property within urban renewal districts.
Source: Washington County Assessor's Office.
9 Table 6 - 2010-11 Major Taxpayers in the City
Assessed Assessed Percent of Taxpayer Type of Business Taxes Value City AV 1
Pacific Realty Associates Commercial properties $ 3,007,320 $ 184,436,213 3.7% PPR Washington Square LLC Retail shopping mall 1,955,415 122,805,991 2.4 Lincoln Center LLC Commercial properties 1,328,925 81,818,120 1.6 Frontier Communications Telecommunications 882,802 58,229,000 1.2 Walton CWOR Commercial properties 625,186 38,203,140 0.8 Portland General Electric Electrical utility 487,878 32,348,717 0.6 Comcast Corporation Telecommunications 422,161 28,124,200 0.6 NW Natural Gas utility 405,089 26,811,900 0.5 Constance Robinson Commercial properties 384,231 24,405,830 0.5 Macy's Department Stores Inc. Retail department store 357,149 22,553,550 0.4 Total Top Ten Taxpayers $ 9,856,156 $ 619,736,661 12.3% Remaining City Taxpayers $3,515,697 $4,408,935,066 87.7% Total All Taxpayers $13,371,853 $5,028,671,727 100.0%
1. Total 2010-11 Assessed Value for the City of Tigard is $5,028,671,727.
Source: Washington County Assessor’s Office.
Table 7 - Assessed Valuation and Levy Record 1
Estimated Tax Rate Fiscal Assessed Percent Total Percent Real Market Percent Per Year Value Change Levy Change Value Change $1,0002 1999-00 $3,033,029,082 - $ 7,881,754 - $3,938,205,819 - 2.59 2000-01 3,254,596,701 6.8% 8,479,977 7.1% 4,354,132,334 9.6% 2.60 2001-02 3,470,578,863 6.2 8,984,987 5.6 4,624,009,037 5.8 2.58 2002-03 3,621,710,974 4.2 10,521,836 14.6 4,804,794,161 3.8 2.90 2003-04 3,754,359,399 3.5 10,072,155 -4.5 5,151,890,520 6.7 2.68 2004-05 3,908,208,975 3.9 10,568,724 4.7 5,402,433,125 4.6 2.70 2005-06 4,087,904,786 4.4 11,115,136 4.9 5,913,857,305 8.6 2.72 2006-07 4,344,665,155 5.9 11,871,043 6.4 7,152,421,012 17.3 2.73 2007-08 4,572,357,820 5.0 12,515,279 5.1 7,449,594,674 4.0 2.74 2008-09 4,741,943,700 3.6 12,732,804 1.7 8,161,684,333 8.7 2.69 2009-10 4,914,142,310 3.5 13,371,853 4.8 7,738,192,442 -5.5 2.72 2010-11 5,028,671,727 2.3 13,621,207 1.9 7,260,251,256 -6.2 2.71
1. Includes Washington County Assessed Values and Levy amounts. For 2010-11 the Assessed Value including urban renewal excess in Washington County is $5,028,671,727. Urban renewal excess is the value above the “frozen value” of an urban renewal plan. The “frozen value” is the taxable value of all of the property in the area when the urban renewal plan is first set up. 2. Tax rate includes General Government, G.O. Bond, and any serial levies for the City. Does not include tax rate for urban renewal.
Sources: Derived from current and prior years' financial statements. Washington County Assessor's Office.
10 Table 8 - Tax Collection Record1
Percent Percent Fiscal Collected Collected Year Year of Levy 1 As of 6/30/101 2000-01 94.5% 97.2% 2001-02 94.6 97.3 2002-03 94.5 97.1 2003-04 94.5 97.1 2004-05 94.9 97.1 2005-06 95.1 97.0 2006-07 95.2 98.2 2007-08 95.0 96.9 2008-09 94.3 96.2 2009-10 94.4 94.4
1. "Percent Collected" is for Washington County as a whole.
Sources: Washington County Assessor's Office.
Table 9 - Bond and Levy Election Record (Last Ten Years)
Date of Amount Votes Percent Election Purpose Requested Yes No Margin Passed (Failed)
11/07/00 G.O. Bond - Transportation $16 million 5,919 10,454 (4,535) (63.8%) System Improvements 05/21/02 G.O. Bond - Library $13 million 6,720 4,537 2,183 59.6% 11/03/09 G.O. Bond – Natural Areas, Parks $20 million 4,201 4,691 (490) (52.8%) & Trails 11/02/10 G.O. Bond – Open Spaces, $17 million 9,122 8,352 770 52.2% Protect Clean Water & Improve Parklands
Source: City of Tigard.
11 CITY OF TIGARD
The City of Tigard, population 47,460, was incorporated in 1961, and presently encompasses an area of 11.81 square miles in the City limits. The City is located in the southeastern part of Washington County, 15 minutes from downtown Portland, Oregon and along major highways, Interstate 5 and Highway 217. The City is included in the Metro urban growth boundary and its closest neighboring cities include Beaverton, Lake Oswego, Tualatin, Durham, Portland, and King City. GOVERNMENT The City has a council-manager form of government and is governed by an elected Mayor and four council members who comprise the City Council. The City Manager or Administrator is appointed by the Council. The Mayor is elected to a four-year term and the council members serve four-year terms. The City provides a full range of municipal services including police protection; street construction, maintenance and lighting; planning, zoning, building; library, parks and recreation, code enforcement and general administrative services. The City also operates water, sewer, storm and sanitary systems. Fire protection is provided by Tualatin Valley Fire & Rescue, an independent district. All other utilities are privately owned and operated.
Table 10 - City Council
Service Term Council Member Position Occupation Began Expires
Craig Dirksen Mayor Industrial designer 1/01/98 12/31/14 Nick Wilson President Landscape architect 1/01/03 12/31/12 Gretchen Buehner Councilor Attorney 1/01/05 12/31/14 Marland Henderson Councilor General contractor 1/01/99 12/31/12 Marc Woodard Councilor Fitness and health consultant 1/01/11 12/31/14
Source: City of Tigard.
ADMINISTRATION Craig Prosser, City Manager, began service with the City in 1999 when he was hired as Finance Director. He worked as Finance Director for the City until 2005 when he was hired as City Manager. Mr. Prosser worked as a financial Planning Manager with Metro from 1993 until 1999 and before that, worked as Chief Deputy Auditor for the City of Portland, Oregon for eleven years. He maintains membership in the International City/County Management Association (ICMA), and is a past member of the Oregon Municipal Finance Officers Association and Government Finance Officers Association. Mr. Prosser earned his B.A. in political science from Whitman College in Walla Walla, Washington and a Master of Public Administration from American University in Washington D.C. Elizabeth Ann Newton, Assistant City Manager, has worked for the City since 1982 when she was hired as an Assistant Planner. She has worked as Associate Planner, Community Involvement Coordinator, Assistant to the City Manager prior to becoming Assistant City Manager in 2005. Ms. Newton earned her B.A. and a Certificate in Urban Studies from Portland State University and a Certificate in Public Management from the Executive Leadership Institute of the Mark Hatfield School of Government at Portland State University. Toby LaFrance, Finance and Information Services Director, was hired by the City in 2008. Mr. LaFrance’s prior work experience includes work as Department Finance Manager – Community Development with Clark County, Washington from 2000 until 2008 and as Senior Management Analyst in the Budget Office from 1996 until 2000. He maintains memberships in the Government Finance Officers Association and the Oregon Municipal Finance Officers Association and is a past member of the Washington Finance Officers Association. Mr. LaFrance graduated from Willamette University with a B.S. in Economics in 1992.
12 Debbie Smith-Wagar, CPA, Assistant Finance Director, was hired by the City in 2008. Ms. Smith-Wagar previously worked for four years as a systems analyst for Springbrook Software and served for five years as the Assistant Finance Director for the City of Newberg, Oregon. She maintains membership in the Government Finance Officers Association, Oregon Municipal Finance Officers Association, American Institute of Certified Public Accountants and Oregon Society of Certified Public Accountants. Ms. Smith-Wagar earned a B.S. in Accounting from Lake Superior State University in Michigan and B.A. in Journalism from the University of Oregon in Eugene, Oregon. Dennis Koellermeier, Public Works Director, has served the City of Tigard since 2001 working first as the Assistant Public Works Director and since 2004 as Public Works Director. Prior to his work with the City, Mr. Koellermeier worked as Operations Manager for the City of West Linn for twenty-six years. He maintains membership in the American Public Works Association and American Water Works Association. Mr. Koellermeier earned an A.S. degree from Clackamas Community College. Steven F. Martin, Park and Facilities Manager, began work for the City in 1999 following nine years as part-owner and Field Supervisor with Pacific Gardens and Waterworks. Prior work over eight years was completed in landscaping, irrigation construction, and forestry. Mr. Martin earned his B.A. in Forest Management/Sciences and a M.S. in Forestry/Forest Protection from the University of Washington in Seattle, Washington. STAFF The City has 237 full-time employees including the Mayor and 52 part-time employees including Council members. The City enters into written bargaining agreements with each of the bargaining organizations; agreements contain provisions on such matters as salaries, vacation, sick leave, medical and dental insurance, working conditions, and grievance procedures.
Table 11 - Bargaining Units and Contract Status
Number of Contract Status of Collective Bargaining Unit Employees Expires Contract
SEIU Local 503/OPEU 114 June 30, 2013 Settled Tualatin Police Officers Association 66 June 30, 2011 Settled
Source: City of Tigard.
CAPITAL IMPROVEMENT PROGRAM The City Capital Improvement Program (CIP) is a five-year projection of anticipated capital needs in the City. The following table outlines the CIP for the five years including projected yearend figures for FY 2009-10 and FYs ending June 30, 2011 through 2015:
Table 12 - Capital Improvements
System 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Totals
Downtown $ 3,535,273 $ 3,734,782 $ 389,000 - - - $ 7,659,055 General Facilities 205,018 76,640 13,320 $ 700,000 $ 256,027 - 1,251,005 Parks System 325,072 6,074,100 288,365 1,813,040 1,063,944 $ 132,000 9,696,521 Sanitary Sewer System 883,274 829,667 407,833 50,000 50,000 50,000 2,270,774 Storm System 219,368 304,000 513,000 322,000 85,000 85,000 1,528,368 Street System 3,930,820 3,547,433 1,352,467 1,631,400 2,162,900 4,163,900 16,788,920 Water 4,448,994 9,562,003 5,684,960 10,664,960 25,472,389 27,264,531 83,097,837 Totals $13,547,819 $24,128,625 $8,648,945 $15,181,400 $29,090,260 $31,695,431 $122,292,480
Source: City of Tigard.
13
PARK SYSTEM MASTER PLAN To plan for the City’s parks system, the City inventoried existing facilities, underwent a year-long public involvement process, summarized a needs analysis for Tigard Parks, and developed a planning and implementation framework. This culminated in the adoption of the Tigard Park System Master Plan Update (TPSMP) in July 2009. The TPSMP identifies $80 million in capital improvement projects, with over $20 million of priority-one projects listed. Open space land acquisitions were identified as opportunistic acquisitions. The City expects to pay for these projects from a combination of sources including the Series 2011A Bond proceeds and $2.5 million in Parks system development charges. The City has agreements in place to purchase one five-acre site for needed development adjacent to a recently- purchased 43- acre community park site and one 20-acre site for development as a community park. Over the next year, the Park and Recreation Advisory Board expects to identify and recommend additional properties to purchase and develop.
FINANCIAL INFORMATION
BASIS OF ACCOUNTING
The governmental fund types are maintained on the modified accrual basis of accounting. The proprietary and fiduciary fund types are accounted for using the accrual basis of accounting. The City's accounting practices conform to generally accepted accounting principles. FISCAL YEAR
July 1 to June 30 AUDITS
The Oregon Municipal Audit Law (ORS 297.405 - 297.555) requires an audit and examination to be made of the accounts and financial affairs of every municipal corporation at least once a year. Unless the municipality elects to have the audit performed by the State Division of Audits, the audit shall be made by accountants whose names are included on the roster prepared by the State Board of Accountancy. The City's audits for fiscal years ended June 30, 2006 through 2010 were performed by Grove, Mueller & Swank, P.C., Salem, Oregon. The auditors did not review this Official Statement and offer no opinion regarding this Official Statement. A copy of the City's comprehensive annual financial statements for the fiscal year ended June 30, 2010, is provided in APPENDIX B. BUDGETING PROCESS
The City prepares an annual budget in accordance with provisions of the Oregon Local Budget Law (ORS 294), which provides standard procedures for the preparation, presentation, administration and appraisal of budgets. Staff begins preparing the annual budget several months prior to adoption. From December through March, staff completes a five year forecast of all revenues, expenditures and fund balances. The forecast takes the budget and known future changes in fees, technology, laws, and impact of capital construction on operating costs. The forecast does not assume future decisions in staffing levels or proposed programs. By producing a forecast on known items, it allows the City to see the size of decisions that need to be made. The City Manager reviews the forecasts for all funds and determines which future expenditures must be postponed or eliminated to ensure a stable, financial future, but still provide the necessary resources to continue to provide current services at the same level of service in the future and accomplish City goals. Budget parameters and guidelines for the coming fiscal year are set in relation to the finalized five year forecast. Guidelines can include the number of additional or reduced staffing allowed in the budget requests, changes in programs or equipment replacement. In January, department staff prepares their requested budgets while at the same time the City Council sets its goals for the coming year. These goals and the necessary resources to accomplish them are included in the budget requests and may require adjustments to the forecast and budget guidelines. After departments submit their requested budget, Finance staff reviews the requests and meets with the departments to discuss the requests and obtain additional information to assist with their analysis. In February and March, Finance staff finalizes their budget analyses and meets with the City Manager and Department Directors to review the requests. The City Manager makes decisions on the requested budgets, which are then incorporated into the Proposed budget.
14 In April and May, the City Manager presents the Proposed Budget to the Budget Committee. The Budget Committee, in accordance with Oregon Budget Law, is made up of the City Council and an equal number of citizen members. In Tigard’s case, the Budget Committee is the Mayor, four Council Members, and five citizens. All budget meetings are open to the public and are required to be advertised as such. At each budget meeting, time for public comment and input is provided. After all input has been received, the Budget Committee approves the budget with any changes and forwards it to the City Council for adoption. In June, the City Council holds a final public hearing to allow for additional public comment. After the public hearing, the Approved Budget is adopted by City Council resolution. The Adopted Budget takes effect on July 1. According to Oregon Budget Law, a budget must be adopted prior to July 1. Supplemental budgets may be prepared as needed during the fiscal year, utilizing transfers between the appropriation categories which are approved by the City Council. Supplemental budgets are considered and adopted by a process similar to that used for the regular budget, including public hearings and notices of hearings. A budget is prepared for each fund, except for the Pension Trust Fund, essentially in accordance with the modified accrual basis of accounting used by governmental funds, which is in accordance with the legal requirements of Oregon Local Budget Law. The resolution authorizing appropriations sets the maximum level of expenditures for each fund. Appropriations may not be legally over expended. Appropriations lapse at the end of each fiscal year. Appropriations are made at the major program level for each fund, for example, Community Services, Public Works, Community Development, Policy and Administration, Debt Service, Capital Improvements and Contingency. The detail budget document is required to contain more detailed information for the above-mentioned expenditure categories. Budget amounts include original approved amounts and all subsequent appropriation transfers approved by the City Council. After budget approval, the City Council may approve supplemental budgeted appropriations if an occurrence, condition, or need exists which had not been ascertained at the time the budget was adopted. A supplemental budget may require hearings before the public, publications in newspapers and approval by the City Council. Original and supplemental budgets may be modified by the use of appropriations transfers between the levels of control. Such transfers require approval by the City Council. Management may not amend the budget without Council approval. The budgets for each of the funds include capital outlay appropriations. Debt service is also budgeted separately. For GAAP presentation, the transfers from operating funds for services provided by the internal service funds and the General Fund are considered revenues and expenses/expenditures, as appropriate, but are considered to be interfund transfers for budgetary purposes. The City’s policy is to maintain an unallocated fund balance in the General Fund of at least two months of operating expenses and to have adequate fund balance to provide sufficient cashflow from July 1 until property taxes are received in November. City revenues were flat during the last two years after significant growth in the prior five years. Due to the City’s conservative approach to financial operations, the City’s General Fund ending balance grew from $7.9 million at end of FY 2003 to $10.8 million at end of FY 2008. In the last two years, the City has purposely used fund balance to help reduce cuts to City services. In FY 2010 the City determined that it could not maintain existing levels of City services as expenditures were increasing faster than revenues. In order to bring expenditures in line with revenues, the City made targeted cuts in personnel and materials and services. As the City prepares the budget for FY 2012, it expects that service levels will be balanced against available resources.
15 Table 13 - Summary of 2010-11 Adopted General Fund Budget
2010-11 Resources
Beginning Fund Balance $6,117,299
Taxes 12,218,117 Franchise Fees 4,706,831 Licenses and Permits 861,296 Intergovernmental 5,616,141 Charges for Services 254,793 Fines & Forfeitures 936,000 Interest Earnings 102,184 Miscellaneous 22,209 Other Financing Sources 249,000 Total Revenues 24,966,571 Transfers In 3,523,981 Total Resources 34,607,851
Requirements Program Expenditures 27,732,394 Loan to CCDA 249,000
Transfers Out 872,956 Contingency 918,466 Total Budget 29,772,816 Reserved for Future Expenditures 4,835,035 Total Requirements $34,607,851
Source: City of Tigard.
16 FINANCIAL TABLES
Table 14 – Statement of Net Assets
Governmental Business-type FY ended June 30, 2010 Activities Activities Total Assets Cash and investments $ 26,769,926 $ 18,405,864 $ 45,175,790 Accounts receivable 1,665,263 3,476,967 5,142,230 Property taxes receivable 745,575 - 745,575 Assessments liens receivable 894,540 - 894,540 Prepaid expenses 324,196 - 324,196 Inventory 12,673 50,463 63,136 Capital assets: Land and construction in process 16,833,257 13,065,181 29,898,438 Other capital assets (net of accumulated depreciation) 175,638,183 60,731,133 236,369,316 Total Assets 222,883,613 95,729,608 318,613,221 Liabilities Accounts payable and accrued 3,264,624 4,441,664 7,706,289 Customer deposits 1,912,706 46,473 2,034,574 Accrued interest payable 261,106 - 261,106 Noncurrent liabilities: Due within one year Notes payable 259,053 - 259,053 Bonds payable 1,176,890 - 1,176,890 Accrued compensated absences 1,014,233 55,438 1,069,671 Special assessment bonded debt with government commitment 182,111 - 133,593 Due in more than one year: Notes payable 270,925 - 270,925 Line of credit - 2,853,868 2,853,868 Bonds payable 15,531,210 - 15,531,210 Accrued compensated absences 338,078 18,478 356,556 Special assessment bonded debt with government commitment 1,021,619 - 1,070,137 Total liabilities 25,232,555 7,415,921 32,723,872 Net Assets Invested in capital assets, net of related debt 175,233,362 70,942,446 246,175,809 Restricted for: Capital projects 4,945,265 - 4,945,265 Debt service 1,927,247 - 1,927,247 Unrestricted 15,469,788 17,371,241 32,841,028 Total Net Assets $ 197,575,662 $ 88,313,687 $ 285,889,349
Source: Derived from annual audited financial statements.
17 Table 15 - General Fund Consecutive Balance Sheets
As of June 30 (GAAP Basis) 2006 2007 2008 2009 2010
Assets Cash & investments $11,058,374 $10,425,823 $9,242,444 $8,200,469 $7,636,473 Accounts receivable 1,043,473 352,112 217,293 535,800 948,853 Property taxes receivable 390,963 319,464 287,303 510,981 543,814 Prepaid expense - 209,378 20,291 419,488 273,726 Total Assets $12,492,810 $11,306,777 $9,767,331 $9,666,738 $9,402,866
Liabilities Accounts payable and accrued liab. $ 1,032,826 $ 861,548 $ 761,655 $1,360,093 $1,468,864 Customer deposits 379,435 323,599 419,903 156,130 139,225 Deferred revenue Property taxes 286,492 195,608 196,689 392,199 405,747 Grants - - - - 47,778 Total Liabilities 1,698,753 1,380,755 1,378,247 1,908,422 2,061,614
Fund Balances Reserved for prepaid expense - 209,378 20,291 419,488 273,726 Unreserved, reported in General fund 10,794,057 9,716,643 8,368,793 7,338,828 7,067,526 Total Fund Balances 10,794,057 9,926,021 8,389,084 7,758,316 7,341,252
Total Liabilities & Fund Balances $12,492,810 $11,306,776 $9,767,331 $9,666,738 $9,402,866
Note: The ending fund balance as of June 30, 2011 is estimated to be $7.7 million, which includes $1million of one-time resources.
Source: Derived from annual audited financial statements.
18 Table 16 - General Fund Consecutive Statement of Revenue, Expenditures and Changes in Fund Balances
As of June 30 (GAAP Basis) 2006 2007 2008 2009 2010 Revenues Taxes $11,096,523 $10,628,053 $9,998,252 $11,476,355 $11,935,841 Franchise fees 4,551,169 3,835,007 3,042,187 3,887,078 4,548,520 Licenses and Permits 674,422 299,515 354,545 647,461 - Intergovernmental revenues 5,250,929 3,374,005 2,882,918 5,568,542 5,819,081 Charges For Services 756,253 1,965,307 1,700,433 534,163 1,286,411 Fines and forfeitures 847,069 850,335 702,469 804,128 915,524 Interest earnings 530,391 520,742 290,879 323,492 88,889 Miscellaneous 20,098 60,096 18,892 46,021 210,996 Total Revenues 23,726,854 21,533,060 18,990,575 23,287,240 24,805,262
Expenditures Current operating: Community services 13,801,110 11,918,362 11,377,118 18,214,907 18,870,804 Public works 2,757,289 2,383,009 2,273,569 3,463,390 5,129,767 Community Development 3,128,507 2,708,092 2,673,696 4,566,264 3,555,391 Policy and administration 397,510 3,961,487 3,788,655 907,661 787,209 General government - 23,000 - - - Capital Outlay - - - 44,083 292,221 Total Expenditures 20,084,416 20,993,950 20,113,038 27,196,305 28,635,392
Excess (deficiency) of revenue 3,642,438 539,110 (1,122,463) (3,909,065) (3,830,130) over (under) expenditures
Other Financing Sources Proceeds from capital lease Transfers In 2,617,862 1,414,769 1,355,068 1,706,781 4,058,709 Transfers Out (5,392,264) (416,942) (29,265) (833,457) (645,643) Total Other Financing Sources(Uses) (2,774,402) 997,827 1,325,803 873,324 3,413,066
Net Change in Fund Balances 868,036 1,536,937 203,340 (3,035,741) (417,064)
Fund Balances Beginning 9,926,021 8,389,084 8,185,744 10,794,057 7,758,316 Fund Balances Ending $10,794,057 $9,926,021 $8,389,084 $7,758,316 $7,341,252
Source: Derived from annual audited financial statements.
19 CASH AND INVESTMENTS ORS 294.035 permits Oregon local governments like the City to invest “surplus funds” (defined as all funds that are not pension funds and that are not required for immediate expenditures) in the following: general obligations of the United States and agencies and instrumentalities of the United States; debt obligations of the agencies and instrumentalities of the state and its political subdivisions that have a long-term rating of A by a nationally recognized statistical rating organization; debt obligations of the states of California, Idaho and Washington and political subdivisions of those states if the obligations have a long-term rating of AA; time deposit open accounts, certificates of deposit and savings accounts in insured institutions as defined in Oregon statutes, credit unions as defined in Oregon statutes or in federal credit unions, if the institution or credit union maintains a head office or a branch in Oregon; share accounts and savings accounts in credit unions; fixed or variable life insurance or annuity contracts as defined in Oregon statutes and guaranteed investment contracts issued by life insurance companies authorized to do business in Oregon; banker’s acceptances; corporate indebtedness rated on the settlement date, with certain exceptions, P-1 or Aa or better by Moody’s Investor’s Service or A-1 or AA or better by Standard and Poor’s Corporation or equivalent rating by any nationally recognized statistical rating organization; and repurchase agreements collateralized by general obligations of the United States, agencies and instrumentalities of the United States or enterprises sponsored by the United States. ORS Chapter 295 limits the deposit of public funds to depositories approved by Oregon law. It also requires depositories to collateralize the public funds deposited with those depositories and provides guidelines for the amount of funds that can be deposited with any depository bank. Oregon law also requires local governments like the City to adopt an investment policy before investing in securities that mature in more than 18 months. The City’s investment policy was adopted in January 2002. The City in the past has used Oregon State Treasurer’s Investment Pool (the “the LGIP”) for investment purposes for the largest portion of its funds because of the liquidity and diversification the pool allows. Smaller proportions of funds were invested with brokers and banks. The City is currently exploring the possibility of testing the placing of parcels of liquid funds to be managed by outside brokers and overseen by the City. Such an arrangement would require that any broker involved would have to certify knowledge of and adherence to State law and the City’s investment policy. As of December 31, 2010, the City’s investments consisted of the following: Money Market Funds $ 5,782,305 LGIP– Tigard Transportation Bond 7,258,323 LGIP – Misc Government Revenues 15,167,393 U.S. Government Securities and Corporate Bonds 17,177,225 Total $45,385,247*
* Column may not foot due to rounding.
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20 INSURANCE AND RISK The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees and others; and natural disasters. The City purchases commercial insurance to deal with substantially all these risks with normal deductibles. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years. Insurance
The City carries the following insurance coverage: Policy Per Occurrence Limit Annual Aggregate General and Auto Liability $500,000 $1,500,000 General and Auto Liability Excess $9,500,000 $28,500,000 Auto Physical Damage - ACV on rented or leased autos not to exceed $100k ACV* per schedule ACV per schedule
Property Buildings and contents (includes bridges, parks improvements, reservoirs, GRV, ACV & RV** GRV, ACV & RV per signalized intersections, etc.) per schedule schedule Employee Crime Coverage $50,000 $50,000 Employee Crime Coverage Excess $1,000,000 $1,000,000 Inland Marine Coverage ACV per schedule ACV per schedule ACV per schedule or ACV per schedule or $100,000,000, $100,000,000, Mobile Equipment & Equipment Breakdown including property damage whichever is less whichever is less Flood/Earthquake + $1.4 mill in additional extra expense coverage $30,000,000 $30,000,000
National Flood Insurance Program - Three policies (flood coverage pays first for losses of City buildings near or in the flood plain. City-County Insurance Pool then picks up rest of loss up to GRV/RV** per schedule.) # 2045837200 Police Modular - building & contents $260,800 $260,800 #2045837300 Storage Modular - building & contents $122,300 $122,300 # 2045837400 CH/PC/PD - building & contents $1,000,000 $1,000,000 Underground Storage Tank Coverage - 7 tanks $1,000,000 $2,000,000
Workers’ Compensation Coverage A Statutory Statutory Coverage B $3,000,000 $3,000,000
* - ACV = actual cash value. ** - GRV = Guaranteed Replacement Value, Actual Cash Value and Replacement Value depending on type and age of asset.
LITIGATION RELATED TO TORT CLAIMS AGAINST OREGON GOVERNMENTS In response to a decision by the Oregon Supreme Court in Clarke v. Oregon Health Sciences University (“OHSU”), related to the constitutionality of portions of the Oregon Tort Claims Act (“OTCA”), the 2009 Legislative Assembly enacted Oregon Laws 2009, chapter 67 (“OR Laws 2009, Ch 67”). This law increased the liability limits for Oregon public bodies under the OTCA, as described below. The State is subject to different limits. Personal Injury and Death Claim. The liability of a local public body and its officers, employees and agents acting within the scope of their employment or duties, to any single claimant for covered personal injury or death claims (and not property claims) arising out of a single accident or occurrence may not exceed $500,000, for causes of action arising on or after July 1, 2009, and before July 1, 2010. From July 1, 2010, through June 30, 2015, this cap increases incrementally to $666,700. The liability limits to all claimants for covered personal injury or death claims (and not property claims) arising from a single accident or occurrence increase from $1 million, for causes of action arising on or after July 1, 2009, and before July 1, 2010, incrementally to $1,333,300, for causes of action arising on or after July 1, 2014, and before July 1, 2015. For causes of action arising on or after July 1, 2015, the liability limits for both a single claimant and all claimants will be adjusted based on a determination by a State Court Administrator of the percentage increase or decrease in the cost of living for
21 the previous calendar year as provided in the formula in OR Laws 2009, Ch 67. The adjustment may not exceed 3 percent for any year. Property Damage or Destruction Claim. The liability of a public body and its officers, employees and agents acting within the scope of their employment or duties, for covered claims for damage and destruction of property that arise from causes of action arising on or after July 1, 2009, are as follows: (a) $100,000, adjusted as described below, to any single claimant, and (b) $500,000, adjusted as described below, to all claimants. Beginning in 2010, these liability limits shall be adjusted based on a determination by a State Court Administrator of the percentage increase or decrease in the cost of living for the previous calendar year as provided in the formula in OR Laws 2009, Ch 67. The adjustment may not exceed 3 percent for any year. RETIREMENT PLAN- ICMARC PLANS The majority of City employees participate in the International City Managers Association Retirement Corp. (ICMRAC) Money Purchase Plans. The City contributes to defined contribution, single employer retirement plans at a specified percent of gross salary depending on the employment group, for all employees who participate in the ICMRAC Money Purchase Plan. Contributions are calculated as a percentage of gross payroll. The contributions range from 10 to 11 percent for all eligible employees participating in the plans. Employees do not make contributions to these plans. The City is required to make contributions to these plans under authority of City Council resolution and the plan documents. Employees become eligible to participate in the plans after six months of service and vest immediately. Employees may withdraw funds upon retirement or termination of employment. Contributions to the plans are made to a fiduciary. Since the plans are administered by the City, the assets, equity and operations of the plans are accounted for in the General Employees Pension Plan Fund, a pension trust fund. The plans invest in various money market and equity mutual funds. Required and actual contributions to the plan were $1,393,091 for the year ended June 30, 2009. At June 30, 2010, the City had 206 employees in the IMARC Plans. Because these are defined contribution plans, there is no unfunded liability associated with these plans. POLICE PENSION PLAN General. The City participates in a retirement pension benefit program under the State of Oregon Public Employees Retirement System ("PERS" or the "System"). Substantially all full-time police employees are participants in PERS. At June 30, 2010, the City had 72 employees in PERS. T1/T2 Pension Programs. Employees hired before August 29, 2003 participate in the "Tier 1" and "Tier 2" pension programs (the "T1/T2 Pension Programs"). The benefits provided through the T1/T2 Pension Programs are based primarily on a defined benefit pension model and provide retirement and disability benefits, annual cost-of-living adjustments, and death benefits to members and their beneficiaries. Different benefit structures apply to participants depending on their date of hire. Effective January 1, 2004, T1/T2 Pension Program participant contributions fund individual retirement accounts under the separate defined contribution program described below. OPSRP. Employees hired on or after August 29, 2003 participate in the Oregon Public Service Retirement Plan ("OPSRP") unless membership was previously established in the T1/T2 Pension Programs. OPSRP is a hybrid defined contribution defined benefit pension plan with two components. Employer contributions fund the defined benefit program and employee contributions fund individual retirement accounts under the separate defined contribution program. Effective January 1, 2004, T1/T2 Pension Program participant contributions also fund individual retirement accounts under the separate defined contribution program. Actuarial Valuation. Oregon statutes require an actuarial valuation of the System at least once every two years. Based on the biennial actuarial valuations as of December 31 of odd-numbered years, such as 2007 and 2009, the Public Employees Retirement Board ("PERB") establishes the contribution rates that employers will pay to fund the T1/T2 Pension Programs, OPSRP and the PERS-sponsored Retirement Health Insurance Account program ("RHIA") described herein. Actuarial valuations are performed annually as of December 31 of each year, with the valuations as of December 31 of even-numbered years (such as 2008) used for advisory purposes only. Actuarial valuations are performed for the entire System (the “System Valuation”), and for each participating employer, including the City (the “City Valuation”). Valuations are released approximately one year after the valuation date. PER’S current actuary is Mercer (US), Inc. (“Mercer”). Valuation Release Date Rates Effective December 31, 2007 September 2008 July 1, 2009-June 30, 2011 December 31, 2008 October 2009 Advisory only December 31, 2009 September 2010 July 1, 2011-June 30, 2013
22 Employer Assets, Liabilities, and Unfunded Actuarial Liabilities. An employer's unfunded actuarial liability ("UAL") is the excess of the actuarially determined present value of the employer's benefit obligations to employees over the existing actuarially determined assets available to pay those benefits. For the T1/T2 Pension Programs, the City is pooled with the State of Oregon and other local government and community college district public employers (the “State and Local Government Rate Pool” or “SLGRP”). The City’s portion of PERS’ assets and liabilities is based on the City’s proportionate share of the SLGRP’s pooled payroll (“City Allocated T1/T2 UAL”). OPSRP's assets and liabilities are pooled on a program-wide basis. These assets and liabilities are not tracked or calculated on an employer basis. The City's allocated share of OPSRP's assets and liabilities is based on the City's proportionate share of OPSRP's pooled payroll (the “City Allocated OPSRP UAL”). Changes in the City’s relative growth in payroll will cause and other pool participants’ failure to pay their full employer contributions may cause the City Allocated T1/T2 UAL and City Allocated OPSRP UAL to shift. The City’s net unfunded pension UAL is the total of the City’s Allocated T1/T2 UAL, Allocated OPSRP UAL and the City’s side account. The City’s net unfunded pension UAL as of the valuation as of December 31, 2008 (the “2008 City Advisory Valuation”) and the valuation as of December 31, 2009 (the “2009 City Valuation”) is shown in the following table: 2009 Valuation 2008 Valuation Allocated pooled SLGRP T1/T2 UAL $ 7,369,427 $ 8,621,805 Allocated pre-SLGRP pooled liability/(surplus)1 (1,169,248) (1,149,682) Transition liability/(surplus) 2 (3,536,597) (3,597,524) Allocated Pooled OPSRP UAL 57,753 41,302 Net unfunded pension actuarial accrued liability/(surplus) $ 2,721,312 $ 3,915,901
(1) The Allocated pre-SLGRP pooled liability represents the allocation to the City of the liability/surplus that remained when the local government rate pool (LGRP) was disbanded and the SLGRP was created. The City shares this liability/surplus with other former participants in the LGRP, and it is allocated based on the City’s proportionate share of the former participants’ payroll. (2) The transition surplus represents the surplus that was created when the City joined the LGRP. The transition surplus is solely the City’s.
Source: 2008 City Advisory Valuation and 2009 City Valuation The funded status of the PERS and of the City will change over time depending on the market performance of the securities that the Oregon Public Employees’ Retirement Fund is invested, future changes in compensation and benefits of covered employees, demographic characteristics of members and methodologies and assumptions used by the actuary in estimating the assets and liabilities of PERS. Significant actuarial assumptions and methods used in the valuations included: (a) Projected Unit Credit actuarial cost method, (b) asset valuation method based on market value, (c) rate of return on the investment of present and future assets of 8%, (d) payroll growth rate of 3.75%, (e) consumer price inflation of 2.75% per year, and (f) UAL amortization method of a level percentage of payroll over 21 years (fixed) for the T1/T2 Pension Programs and16 years (fixed) for OPSRP. Employer Contribution Rates. Employer contribution rates are calculated as a percent of covered payroll. The rates are based on the current and projected cost of benefits and the anticipated level of funding available from the Oregon Public Employees Retirement Fund ( the “OPERF”) , including anticipated investment performance of the fund. Contribution rates are subject to future adjustment based on factors such as the result of subsequent actuarial valuations and changes in benefits resulting from legislative modifications. Employees are required to contribute 6 percent of their annual salary to the respective programs. Employers are allowed to pay the employees' contribution in addition to the required employers' contribution. The City has elected to make the employee contribution. Employer contribution rate changes from one period to the next are limited by a contribution rate collar. Contribution Rate Collar. In January 2010 the PERS Board adopted a revised implementation of the rate collar limiting increases in employer contribution rates from biennium to biennium (the “Rate Collar”). Under normal conditions, the Rate Collar is the greater of three percent of payroll or 20 percent of the current base rate. If the funded status of independent employers is below 80 percent, the Rate Collar increases by 0.3 percent for every percentage point under the 80 percent funded level until it reaches 6 percent at the 70 percent funded level. The 2009 System Valuation found that independent employers were 82 percent funded, resulting in a Rate Collar of three percent. The Rate Collar limits increases in employer contribution rates before rate reductions from side accounts are deducted, and does not cover charges associated with RHIA and RHIPA. Because the 2011-2013 employer contribution rates were reduced by the Rate Collar, further rate increases are anticipated for the 2013-2015 biennium. Presently, PERS anticipates that system-wide, the 2013-2015 rates will be
23 increased by approximately 5% of covered payroll as a result of the implementation of the Rate Collar in the 2011-2013 biennium. This increase, however, will be subject to change based on the investment performance of OPERF and other factors. The City’s actual 2013-2015 contribution rate increase also may vary from the system-wide number. City Contribution Rates. The City's current contribution rates which are based on the 2007 City Valuation and are effective through June 30, 2011 are 10.66 percent for Tier 1 and Tier 2 members, 3.32 percent for general service OPSRP members and 6.03 percent for OPSRP Police and Fire Employees. Included in these rates are contribution rates for the PERS Retirement Health Insurance Account program for Tier 1 and Tier 2 participants described below. The 2009 City Valuation was released in September 2010. Employer contribution rates for the 2011-2013 biennium for the City are as follows: 15.24 percent for Tier 1 and Tier 2 members, 5.97 percent for general service OPSRP members and 8.68 percent for OPSRP Police and Fire Employees. The estimated annual impact of the PERs rate increases is approximately $330,000. DEFERRED COMPENSATION PLANS The City offers certain employees deferred compensation plans created in accordance with Internal Revenue Code Section 457. The plans permit employees to defer a portion of their salary until future years. Contributions for the plans are made to fiduciaries who hold the funds in trust for the plans' participants. The deferred compensation plans are not considered City funds and are excluded from the City’s financial statements. At June 30, 2010, the City had 157 employees with deferred compensation plans. OTHER POST-EMPLOYMENT BENEFITS GASB 45 requires the City to determine the extent of its liability for post employment benefits (“OPEB”) and record the liability in its financial statements on an actuarial basis. This includes the requirement under ORS 243.303 of offering the same healthcare benefits for current employees to all retirees and their dependents until such time as the retirees are eligible for Medicare. GASB 45 refers to this as an “implicit subsidy” and requires that the corresponding liability be determined and reported. The City received its actuarial report related to GASB 45 prepared by Milliman dated August 3, 2009 that determines the Annual Required Contribution (ARC) and Annual OPEB Cost under GASB 45 for the fiscal years ending June 30, 2009 and 2010. The actuarial report indicates that as of August 1, 2008, the City’s UAL for its non-PERS OPEB is based solely on the implicit subsidy and was approximately $1,725,443. The report projected the annual OPEB cost for fiscal year ending June 30, 2009 would be $325,795 with the City contributing $100,205, resulting in a net OPEB obligation of $225,590 for the fiscal year. For Fiscal Year ending June 30, 2010, the report projected an increase in net OPEB Obligation of $241,593, resulting in total Net OPEB Obligation of $467,183. The City currently pays its non-PERS OPEB on a “pay-as-you-go” basis and currently plans to continue to pay this OPEB on a “pay-as-you-go” basis. Retirement Health Insurance Account. PERS retirees who receive benefits through the T1/T2 Pension Programs and are enrolled in certain PERS administered health insurance programs, may receive a subsidy towards the payment of health insurance premiums. Under ORS 238.420, retirees may receive a subsidy for Medicare supplemental health insurance of up to $60 per month towards the cost of their health insurance premium under the RHIA plan. According to the 2008 System Valuation, this program had a UAL of approximately $310 million and according to the 2009 System Valuation, this program has a UAL of approximately $297 million. The RHIA program’s assets and liabilities are pooled on a system-wide basis and are not tracked or calculated on an employer basis. The City’s allocated share of the RHIA program’s assets and liabilities is based on the City’s proportionate share of the program’s pooled payroll. According to the 2009 City Valuation, the City's allocated share of the RHIA program's UAL is $190,340. According to the 2008 City Advisory Valuation, the City's allocated share of the RHIA program's UAL was $193,340. Based on the 2009 City Valuation, the City’s employer contribution rates to fund RHIA benefits are 0.59% for the T1/T2 Pension Programs and 0.50% for the OSRP Program.
24 ECONOMIC AND DEMOGRAPHIC INFORMATION
The City of Tigard, incorporated in 1961, is situated on 11.71 square miles in the Portland metropolitan area, in southeast Washington County. The City evolved from a small rural town to a suburban community, and has developed an economic base of commercial and industrial enterprises. The economy of the area is based on light, diversified manufacturing, and in recent years the retail trade sector has grown significantly, aided by the establishment of the City's Central Urban Renewal Area in the downtown. The City includes more than 400 acres of parks and greenways and wetland that cover 285 acres. Major employers in the City include a diversified range of companies. The City is also part of the Portland-Beaverton-Vancouver Metropolitan Statistical Area (the “Portland MSA”). POPULATION The City grew at an annual compound rate of 1.8 percent for the years 2000 to 2010. In 2000, the City had a population of 39,672; by 2010 it had increased to 47,595. Washington County has the second largest population of Oregon counties, with a 2010 population of 532,620, which is an increase of 18.6 percent over 2000. Population in Washington County increased at an annual compounded rate of 1.7 percent between 2000 and 2010. The County's population has increased at a higher rate than the State as a whole and has been one of the fastest growing counties in the State. Historical and projected population statistics for the City, County and State are shown in the following table.
Table 17 - Estimated Population
City of Percent Washington Percent State of Percent Tigard Change County Change Oregon Change
2000 39,672 6.7% 449,250 11.0% 3,365,900 2.0% 2001 42,260 6.5 455,800 1.5 3,471,700 3.1 2002 43,040 1.9 463,050 1.6 3,504,700 1.0 2003 44,070 2.4 472,600 2.1 3,541,500 1.1 2004 44,650 1.3 480,200 1.6 3,582,600 1.2 2005 45,500 1.9 489,785 2.0 3,631,440 1.4 2006 46,300 1.8 500,585 2.2 3,690,505 1.6 2007 46,400 0.2 511,075 2.1 3,745,455 1.5 2008 46,715 0.7 519,925 1.7 3,791,075 1.2 2009 47,460 1.6 527,140 1.4 3,823,465 0.9 2010 47,595 0.3 532,620 1.0 3,844,195 0.5
2000-10 CARG 1.8% 1.7% 1.3%
Note: CARG = Compounded annual rate of growth.
Source: Under state law, the State Board of Higher Education must estimate annually the population of Oregon cities and counties so that shared revenues may be properly apportioned. The Center for Population Research and Census at Portland State University performs this statutory duty.
25 EMPLOYMENT
Table 18 - Washington County Labor Force By Place of Residence
Unemployment as a Resident Civilian Percent of Total Year Labor Force Unemployment Labor Force Employment*
2000 258,275 10,048 3.9 248,227 2001 264,585 14,449 5.5 250,136 2002 265,363 18,355 6.9 247,008 2003 265,300 19,564 7.4 245,736 2004 265,583 16,462 6.2 249,121 2005 269,807 13,982 5.2 255,825 2006 278,642 12,282 4.4 266,360 2007 283,211 12,179 4.3 271,032 2008 288,451 15,140 5.2 273,311 2009 288,884 26,884 9.3 262,000 2010** 240,157 21,492 7.4 218,664
* Includes non-agricultural wage and salary, self-employed, unpaid family workers, domestics, agricultural workers and labor disputants. ** Preliminary data averaged January through October 2010. Source: State of Oregon Department of Human Resources, Employment Division.
26 Table 19 - Washington County Non-Agricultural Wage and Salary Employment NAICS (000s)
2009 % 2008 2009 of Total Total Non-agricultural Employment 247,743 231,969 100.0% Total Private 225,679 209,645 90.4 Industry Natural resources and mining 3,644 3,341 1.4 Construction 14,243 11,160 4.8 Manufacturing 44,939 40,794 17.6 Trade, transportation & utilities 50,663 47,226 20.4 Wholesale trade 17,240 16,565 7.1 Retail trade 29,613 27,225 11.7 Transportation, warehousing, and utilities 3,810 3,436 1.5 Information 7,998 7,899 3.4 Financial activities 13,890 13,351 5.8 Professional and business services 35,092 31,935 13.8 Education and health services 26,672 27,193 11.7 Leisure and hospitality 20,761 19,384 8.4 Other services 7,675 7,316 3.2 Government 22,064 22,324 9.6 Federal government 825 856 0.4 State government 2,615 2,618 1.1 Local government 18,624 18,850 8.1
* Columns may not foot due to rounding. Employment data is by place of work.
Source: State of Oregon Employment Department.
27 Table 20 - Major Employers Estimated Employment Employer Product or Service 2010
HSBC Card Services Credit and card services center 948 Tigard-Tualatin School District No. 23J Education 779 Nordstrom Retail department store 613 Costco Wholesale Corporation Wholesale goods 400 Providence Health System Health care 377 Western Partitions Inc. Plastering and drywall contractors 321 Lowe’s Co. Inc. Lumber and home improvement 300 TrueGreen LandCare Landscaping services 284 Health Net Health Plan of Oregon Inc. Health insurance 250 Coe Manufacturing Co. Inc. Wood products manufacturing 250 The Cheesecake Factory Food services 250 City of Tigard Government 237
Source: City of Tigard.
ECONOMIC DEVELOPMENT The City has recently updated the Tigard 2027 Comprehensive Plan which includes an Economic Development section. The City is a member of the Association of Regional Economic Development Partners that has prepared a federal Economic Development Administration Comprehensive Economic Development Strategy for the Portland area (Washington, Clackamas, Multnomah and Clark Counties). The City is also a member of the Westside Economic Alliance. Portland MSA and Regional Manufacturing The economy of the Portland MSA is broad and widely diversified, and includes the State’s largest employers, including Intel Inc., Providence Health System, Safeway, Oregon Heath & Sciences University, Fred Meyer, Kaiser Foundation Health Plan, Legacy Health System, and Nike. In November 2010, Intel Inc. announced a new round of investment that is expected to create a total of between 6,000 and 8,000 construction jobs and 800 to 1,000 permanent jobs—primarily in Washington County, Oregon—at its U.S. facilities. The investment will build a new factory/fabrication plant, at Intel's Ronler Acres campus in Hillsboro and upgrade two existing facilities in Oregon. While the company declined to reveal specific cost figures, a new chip factory alone typically costs $3 billion to $3.5 billion. Shopping and Retail Retail sales constitute an important sector of the County's economy. Several major regional shopping centers are located in the City limits, and several other large shopping centers are located in the County. Bridgeport Village built in 2005 and located in both the City and nearby Tualatin offers 0.5 million square feet of retail space, an 18-screen theater, an IMAX theater and leasable office space. Washington Square, also located in the City, a commercial center space of approximately 1.5 million square feet of retail space and 170 stores is one of the largest shopping malls in the Portland metro area and one of the highest grossing malls per square foot in the United States. A major $200 million reconstruction of the open-air mall was completed in Spring 2005. Commercial and Industrial Presently there is over 4.5 million square feet of commercial and industrial space in the City at business parks such as Lincoln Center, Oregon Business Park, Forum Properties Business Centers, Tigard Industrial Center, Commerce Plaza, Sequoia Parkway and Plaza West.
28 Income Personal income includes wages and salaries, other labor-related income (such as employer contributions to pension funds), proprietors' income, rental income, dividends paid by corporations, interest income from all sources, and transfer payments (such as pensions and welfare assistance). In recent years, per capita income in Washington County has been consistently higher than in the state and the nation, as noted in the table below.
Table 21 - Income Estimates for the County, State and Nation
Total Personal Income (000s) Per Capita Income Washington State of Washington State of Year County Oregon County Oregon USA 1998 $ 12,814 $87,218 $30,222 $26,016 $27,258 1999 13,737 91,691 31,535 27,016 28,333 2000 15,223 98,530 33,942 28,718 30,318 2001 15,348 101,476 33,198 29,241 31,145 2002 15,418 104,697 32,706 29,768 31,462 2003 15,921 108,506 33,301 30,564 32,271 2004 16,643 113,001 34,298 31,622 33,881 2005 17,890 117,671 35,991 32,525 35,424 2006 19,365 127,448 37,969 34,656 37,698 2007 20,561 133,405 39,660 35,737 39,392 2008 21,186 137,570 40,188 36,365 40,166
Source: U.S. Department of Commerce, Bureau of Economic Analysis. Data as of August 9, 2010
HOUSING The average number of single family units built during the five-year period has averaged approximately 200 a year. According to the Portland Metropolitan Area Multiple Listing Service, the average selling price of a home in the Tigard- Wilsonville area as of October 2010 year-to-date was $304,200 and the median sales price was $278,500.
Table 22 - Building Activity in the City
Commercial Construction Residential Construction Permits Value (000s) Permits1 Value (000s)
2000 22 $55,244 198 $ 37,202 2001 23 47,263 576 114,188 2002 12 21,583 387 96,340 2003 10 22,289 375 104,652 2004 17 59,524 375 99,056 2005 11 49,646 325 96,002 2006 8 50,744 299 100,966 2007 9 50,513 231 67,798 2008 6 73,614 93 31,811 2009 4 1,945 42 9,324 2010 4 2,003 123 27,972
1. Residential totals for permits and value include amounts from Urban/Washington County as well as the City. Source: City of Tigard.
29
TRANSPORTATION The City is well served by regional rail and highway transportation. Interstate 5, which bisects the City, forms the eastern boundary of the area, providing easy access to the north and the south and Oregon Route 217 are the main freeways in the city, with Oregon Route 99W and Oregon Route 210 serving as other major highways. The southern terminus of the Interstate 205 Beltway, located two miles south of the area, provides easy access to Clackamas County, east Multnomah County, and Clark County, Washington. Boones Ferry Road, a state highway, is also a major arterial in the area. Freight rail service is provided in the area by Burlington Northern Santa Fe and Union Pacific Railroads. The Tri-County Metropolitan Transportation District operates a 12-mile light-rail line, the Westside Express Service from downtown Portland through Washington County to 185th and Baseline and into Hillsboro in Washington County. The light rail also links with PDX International Airport, the Portland Expo Center and Gresham in East Multnomah County. PDX International Airport handled more than 13.3 million passengers in 2009. Thirteen passenger airlines and six cargo airlines currently operate out of the airport. The airport has undergone extensive expansion in recent years. PDX International Airport currently offers nonstop international flights to Vancouver, British Columbia; Toronto, Ontario; Amsterdam, Netherlands; and Tokyo, Japan. The Hillsboro Airport, a general aviation airport also operated by the Port of Portland, is the state's busiest airport in its class. Although there are no scheduled flights in or out of the Hillsboro Airport, it functions as a reliever airport for Portland International Airport, and will support international and corporate jets. The Hillsboro Airport’s two runways are 4,500 feet and 6,600 feet long. Several fixed base operators are located at the airport. The Port of Portland also includes on-call customs clearing services to the Hillsboro Airport. The Port of Portland is a municipal corporation that is coterminous with Multnomah, Clackamas, and Washington counties. The Port owns and operates marine berthing, terminal and repair facilities; docks, piers and storage and warehouse facilities; and other support facilities for incoming and outgoing marine commerce. In addition to seaport functions, Portland serves as the hub to more than 450 miles of inland barge traffic on the Columbia, Lower Snake and Willamette rivers. UTILITIES NW Natural supplies natural gas to the Tualatin area. Telephone service to the area is provided by a variety of communications service providers. Electricity is provided by Portland General Electric Company. PUBLIC FACILITIES Sewer and Water The City owns and maintains the collection system with its boundaries. The City’s sewerage system includes 161 miles of sanitary sewers, 131 miles of storm sewers and 17,900 service connections. Clean Water Services operates and maintains wastewater treatment systems that serve most of the unincorporated areas of Washington County, including those areas not serviced by the respective cities. The City's water system currently receives its supply from the City of Portland water system. The major source of supply is the Bull Run system, owned and operated by the City of Portland. In August 2008, the City entered into partnership with the City of Lake Oswego to share drinking water resources and costs. The partnership expects to invest an estimated $152 million in development of raw water intake, a raw water pipeline, water treatment plant, treated water pipelines, a treated water reservoir and a special water pump station to achieve mutually beneficial water resource goals over the next ten years. The City currently maintains more than 225 miles of water mains, 13 reservoirs and 17,900 water service accounts. Public Safety Fire protection within the City's boundaries is provided by Tualatin Valley Fire and Rescue (“TVFR”). TVFR provides full-time fire protection and a rescue unit with full life supports; the City has a fire insurance rating of 2. The City has its own police department with 93 staff including sworn officers, and full-time and part-time administrative staff. Dispatch services are provided through Washington County Consolidated Communications Agency. Education The City has four separate school districts but is primarily served by Tigard-Tualatin School District No. 23J. Tigard-Tualatin School District No. 23J currently has 12,469 students enrolled in ten elementary schools, three middle schools and two high
30 schools and serves a population of approximately 75,000. Three of the elementary schools, one middle school and one high school are located in Tualatin. The main campus of Portland Community College is located north of Tualatin. Approximately 30,000 students are enrolled each term at this campus. Other post-secondary education facilities in the metropolitan area include the Oregon Health Sciences University, Northwestern School of Law, Portland State University, and numerous private colleges and universities. Health Care Providence Bridgeport Health Center is located in the City and offers an immediate care center, a pharmacy, day surgery, imaging services, diagnostic imaging, rehabilitation, family medical practice, and specialized medical services. Kaiser Permanente operates a 51,000-square-foot medical office nearby in Tualatin which accommodates services for primary care, specialized eye care, mental health, chemical dependency, occupational health, physical and speech therapy. Kaiser operates a dental clinic in the City. Kaiser also began construction on a 126-bed hospital nearby in Hillsboro’s Tanasbourne District in June 2009. The $375 million, 412,00 square-foot project is employing between approximately 2,000 for construction and expected to employ 1,100 in the hospital when complete in 2013. Legacy Meridian Park Hospital serves the health care needs of the community with a 150-bed capacity but only uses 128 of the beds. Hospital facilities now include ten surgery suites and seven post-partum rooms. Located in nearby Tualatin, the hospital is Tualatin’s largest employer with more than 800 employees. The Heritage, an independently operated facility, operates an assisted living center for the elderly on the hospital's 48-acre campus; this facility houses 120 persons. There are many other health care facilities in the county and the metropolitan area. These include public health facilities, hospitals and private clinics. INFORMATION SOURCES Historical data have been collected from generally accepted standard sources, usually from public bodies. In Oregon data is frequently available for counties and also, to a somewhat lesser degree, for cities. Because the City is located within the Portland Primary Metropolitan Statistical Area, this statement presents data for that area, as well as for Washington County and the City when available.
31 LITIGATION
There is no litigation pending questioning the validity of the Bonds nor the power and authority of the City to issue the Bonds. There is no litigation pending which would materially and adversely affect the finances of the City or affect the City's ability to meet debt service requirements on the Bonds.
LEGAL MATTERS
Legal matters incident to the authorization, issuance and sale of the Bonds by the City are subject to the approving opinions of K&L Gates LLP, Portland, Oregon, Bond Counsel to the City. The proposed text of that opinion is set forth in APPENDIX C to this Official Statement. Bond Counsel has reviewed the Official Statement only to confirm that the portions of it describing the Bonds, the Bond Resolution and the authority to issue the Bonds, conform to the Bonds and the applicable laws under which they are issued.
THE INITIATIVE PROCESS
The State Constitution, Article IV, Section 1, reserves to the people of the State the initiative power to amend the State constitution or to enact State legislation by placing measures on the statewide general election ballot for consideration by the voters. Oregon law therefore permits any registered Oregon voter to file a proposed initiative with the Oregon Secretary of State’s office without payment of fees or other burdensome requirements. Consequently, a large number of initiative measures are submitted to the Oregon Secretary of State’s office, and a much smaller number of petitions obtain sufficient signatures to be placed on the ballot. Because many proposed initiative measures are submitted which do not qualify for the ballot, the City does not formally or systematically monitor the impact of those measures or estimate their financial effect prior to the time the measures qualify for the ballot. Consequently, the City does not ordinarily disclose information about proposed initiative measures that have not qualified for the ballot. PROPOSED INITIATIVES THAT QUALIFY TO BE PLACED ON THE BALLOT To be placed on a general election ballot, the proponents of a proposed initiative must submit to the Secretary of State initiative petitions signed by a number of qualified voters equal to a specified percentage of the total number of votes cast for all candidates for governor at the gubernatorial election at which a Governor was elected for a term of four years next preceding the filing of the petition with the Secretary of State. For the 2010 general election, the requirements are eight percent (110,358 signatures) for a constitutional amendment measure and six percent (82,769 signatures) for a statutory initiative. Any elector may sign an initiative petition for any measure on which the elector is entitled to vote. The initiative petition must be submitted to the Secretary of State not less than four months prior to the general election at which the proposed measure is to be voted upon. As a practical matter, proponents of an initiative have approximately two years in which to gather the necessary number of signatures. State law permits persons circulating initiative petitions to pay money to persons obtaining signatures for the petition. If the person obtaining signatures is being paid, the signature sheet must contain a notice of such payment. Once an initiative measure has gathered a sufficient number of signatures and qualified for placement on the ballot, the State is required to prepare a formal estimate of the measure’s financial impact. Typically, this estimate is limited to an evaluation of the direct dollar impact only. Two statewide measures were approved by voters at the November 2010 election. Neither of these statewide measures is expected to have a material and adverse effect on the City. Voters approved Measure 34-181 and the Bonds on the November 2010 ballot. Historically, a larger number of initiative measures have qualified to be placed on the ballot than have been approved by the electors. According to the Elections Division of the Oregon Secretary of State, the total number of initiative petitions that have qualified for the ballot and the numbers that have passed in recent general elections are shown in the following table.
32 INITIATIVE HISTORY
Table 23 – Initiative Petitions that Qualified and Passed (2000-2010)
Number of Number of Year of Initiatives that Initiatives that General Election Qualified Passed 2000 18 4 2002 7 3 2004 6 2 2006 10 3 2008 8 0 2010 4 2
Source: Elections Division, Oregon Secretary of State.
TAX MATTERS
In the opinion of Bond Counsel, interest on the Bonds is excludable 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 individual and corporations; however, interest on the Bonds is included in adjusted current earnings for the purpose of computing the federal alternative minimum tax imposed on certain corporations. Federal income tax law contains a number of requirements that apply to the Bonds, including investment restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the use of proceeds of the Bonds and the facilities financed with proceeds of the Bonds and certain other matters. The City has covenanted to comply with all applicable requirements. Bond Counsel’s opinion is subject to the condition that the City comply with the above-referenced covenants and, in addition, will rely on representations by the City and its advisors with respect to matters solely within the knowledge of the City and its advisors, respectively, which Bond Counsel has not independently verified. If the City fails to comply with such covenants or if the foregoing representations are determined to be inaccurate or incomplete, interest on the Bonds could be included in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds, regardless of the date on which the event causing taxability occurs. Except as expressly stated in this “Tax Matters” section, Bond Counsel expresses no opinion regarding any other federal income tax consequences of acquiring, carrying, owning or disposing of the Bonds. Owners of the Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of owning the Bonds, which may include original issue discount, original issue premium, purchase at a market discount or at a premium, taxation upon sale, redemption or other disposition, and various withholding requirements. Prospective purchasers of the Bonds should be aware that ownership of the Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, certain S corporations with “excess net passive income,” foreign corporations subject to the branch profits tax, life insurance companies and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry or have paid or incurred certain expenses allocable to the Bonds. Bond Counsel expresses no opinion regarding any collateral tax consequences. Prospective purchasers of the Bonds should consult their tax advisors regarding collateral federal income tax consequences. Payments of interest on Tax-Exempt obligations such as the Bonds, are in many cases required to be reported to the Internal Revenue Service (the “IRS”). Additionally, backup withholding may apply to any such payments made to any owner who is not an “exempt recipient” and who fails to provide certain identifying information. Individuals generally are not exempt recipients, whereas corporations and certain other entities generally are exempt recipients. Bond Counsel’s opinion is not a guarantee of result and is not binding on the IRS; rather, the opinion represents Bond Counsel’s legal judgment based on its review of existing law and in reliance on the representations made to Bond Counsel and the City’s compliance with its covenants. The IRS has established an ongoing program to audit tax-exempt obligations to determine whether interest on such obligations is includable in gross income for federal income tax purposes. Bond Counsel cannot predict
33 whether the IRS will commence an audit of the Bonds. Owners of the Bonds are advised that, if the IRS does audit the Bonds, under current IRS procedures, at least during the early stages of an audit, the IRS will treat the City as the taxpayer, and the owners of the Bonds may have limited rights to participate in the audit. The commencement of an audit could adversely affect the market value and liquidity of the Bonds until the audit is concluded, regardless of the ultimate outcome. Original Issue Premium. The initial public offering price of certain Bonds may be greater than the amount payable on the Bonds at maturity. Bond Counsel expresses no opinion with respect to the treatment of this additional amount. Original Issue Discount. The initial public offering price of certain 2011A Bonds (the "Original Issue Discount Bonds"), may be less than the amount payable at maturity. This difference between (i) the stated amount payable at the maturity of an Original Issue Discount Bond and (ii) the initial public offering price of that Original Issue Discount Bond constitutes original issue discount with respect to that Original Issue Discount Bond in the hands of the owner who purchased that Original Issue Discount Bond at the initial public offering price in the initial public offering of the Bonds. The initial owner is entitled to exclude from gross income (as defined in Section 61 of the Code) an amount of income with respect to an Original Issue Discount Bond equal to that portion of the amount of the original issue discount allocable to the period that such Original Issue Discount Bond continues to be owned by the initial owner. In the event of the redemption, sale or other taxable disposition of an Original Issue Discount Bond prior to its stated maturity, however, the amount realized by the initial owner in excess of the basis of the Original Issue Discount Bond in the hands of its initial owner (adjusted upward by the portion of the original issue discount allocable to the period for which such Bond was held by the initial owner) is includable in gross income. Purchasers of Original Issue Discount Bonds should consult their tax advisors regarding the determination and treatment of original issue discount for federal income tax purposes and the state and local tax consequences of owning Original Issue Discount Bonds. STATE OF OREGON TAX EXEMPTION In the opinion of Bond Counsel, interest on the Bonds is exempt from Oregon personal income taxation under existing law.
RATINGS
Moody's Investors Service and Standard & Poor’s Ratings Group, a Division of the McGraw-Hill Companies, have assigned ratings of Aa2 and AA, respectively, on the Bonds. An explanation of the significance of the ratings can be obtained from the rating agencies. There are no assurances that the ratings will continue for any given period of time or that the ratings will not be revised downward or withdrawn entirely by the rating agencies if, in the judgment of the rating agencies, circumstances so warrant. Any such downward revision or withdrawal of the ratings may adversely affect the market price of the Bonds.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this Official Statement, including the appendices, do not reflect historical facts but are forecasts and “forward-looking statements.” No assurance can be given that the future results discussed herein will be achieved, and actual results may differ materially from the forecasts described herein. In this respect, words such as “estimate,” “forecast,” “anticipate,” “expect,” “intend,” “plan,” “believe,” and similar expressions are intended to identify forward-looking statements. All projections, forecasts, assumptions and other forward-looking statements are expressly qualified in their entirety by the cautionary statements set forth in this Official Statement.
CONTINUING DISCLOSURE
Pursuant to SEC Rule 15c2-12, as amended (17 CFR Part 240, § 240.15c2-12) (the “Rule"), the City, as the “obligated person” within the meaning of the Rule, will execute and deliver a Continuing Disclosure Certificate, substantially in the form attached hereto as APPENDIX D for the benefit of the Bond holders. The City previously has executed and delivered a Continuing Disclosure Certificate with respect to a debt issue for which the City is the “obligated person” as defined in the Rule. The City has complied with such previous Continuing Disclosure Certificates.
MISCELLANEOUS
All quotations from and summaries and explanations of provisions of law herein do not purport to be complete and reference is made to those laws for full and complete statements of their provisions. This Official Statement is not to be construed as a contract or agreement between the City and the purchasers or holders of any of the Bonds. Any statements made in this Official Statement involving matters of opinion herein are subject to change without notice and neither the delivery of this Official
34 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.
CONCLUDING STATEMENT
At the time of the original delivery of the Bonds, the City will deliver a certificate of the Authorized Official addressed to the Bond Purchaser to the effect that he has examined the Official Statement and the financial and other data concerning the City contained herein and that, to the best of his knowledge and belief, (i) this Official Statement, both as of its date and as of the date of delivery of the Bonds, does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, in light of the circumstances under which the statements were made, and (ii) between the date of the Official Statement and the date of delivery of the Bonds, there has been no material change in the affairs (financial or otherwise), financial condition or results of operations of the City except as set forth in this Official Statement.
35 (THIS PAGE INTENTIONALLY LEFT BLANK) APPENDIX A Forms of Bond Declaration
B OND D ECLARATION
City of Tigard, Oregon
$17,000,000
General Obligation Bonds
Series 2011A
Executed on behalf of the City of Tigard, Oregon
as of the 3rd day of February, 2011
Table of Contents Section 1. Definitions. 1 Section 2. Bonds Authorized. 2 Section 3. Security for Bonds. 2 Section 4. Tax Covenants. 3 Section 5. Book Entry System. 3 Section 6. Redemption of Bonds. 4 Section 7. Notice of Redemption. 5 Section 8. Conditional Redemption. 5 Section 9. Authentication, Registration and Transfer. 5 Section 10. Amendment of Bond Declaration. 6 Section 11. Default and Remedies. 7 Section 12. Defeasance. 8 Section 13. Form of Bond. 8 Section 14. Rules of Construction. 8 Exhibit A –Form of Bond
This table of contents is not a part of the bond declaration but is provided for reference only.
B OND D ECLARATION
THIS BOND DECLARATION is executed as of February 3, 2011, on behalf of the City of Tigard, Oregon by its City Official pursuant to and as defined in Resolution No. 10-75 adopted by the City Council on December 28, 2010 (the “Resolution”). The Resolution authorizes the City Official to execute a bond declaration which contains the terms of the City’s General Obligation Bonds, Series 2011A the covenants of the City relating to those bonds. Section 1. Definitions. Unless the context clearly requires otherwise, the following terms shall have the following meanings: “BEO” means “book-entry-only” and refers to a system for clearance and settlement of securities transactions through electronic book-entry changes, which eliminates the need for physical movement of securities. “Bond Declaration” means this Bond Declaration, including any amendments made in accordance with Section 10 of this Bond Declaration. “Bonds” means the City’s General Obligation Bonds, Series 2011A, that are described in Section 2 of this Bond Declaration. “Business Day” means any day except a Saturday, a Sunday, a legal holiday, a day on which the Paying Agent or offices of banks in Oregon or New York are authorized or required by law or executive order to remain closed, or a day on which the New York Stock Exchange is closed. “City” means the City of Tigard, Oregon. “City Official” means the Financial and Information Services Director, City Manager or the Assistant City Manager. “Code” means the Internal Revenue Code of 1986, as amended. “Election Measure” means Measure 34-181, approved by the voters of the City at the November 2, 2010 general election. “Event of Default” refers to an Event of Default listed in Section 11(1) of this Bond Declaration. “Government Obligations” means direct noncallable obligations of the United States, or obligations the principal of and interest on which are fully and unconditionally guaranteed by the United States. “Outstanding” refers to all Bonds authorized and delivered pursuant to this Bond Declaration except Bonds which have been paid, canceled, or defeased pursuant to Section 12 of this Bond Declaration, and Bonds which have matured but have not been presented for payment for the payment of which adequate money has been transferred to the Paying Agent. “Owner” means the person shown on the Bond register maintained by the Paying Agent as the registered owner of a Bond. Page 1 – Bond Declaration
“Paying Agent” means the registrar and paying agent for the Bonds, which, at the time of execution of this Bond Declaration, is The Bank of New York Mellon Trust Company, N.A. “Record Date” means the 15th day of the month preceding a payment date. “Resolution” means Resolution No. 10-75 adopted by the City Council on December 28, 2010, which authorize the issuance and sale of the Bonds, the execution of this Bond Declaration, and delegates the City Officials authorized to act on behalf of the City in connection with the Bonds. Section 2. Bonds Authorized. (1) Pursuant to Oregon Revised Statutes Section 287A.050, the Election Measure, and the Resolution, the City hereby authorizes the issuance, sale and delivery of the Bonds in accordance with this Bond Declaration and in the principal amount of $17,000,000. The Bonds shall be dated February 3, 2011, shall bear interest which is payable on June 1 and December 1 of each year, commencing December 1, 2011. The Bonds shall mature on the following dates in the following principal amounts: Maturity Principal Interest CUSIP Number Date Amount Rate (%) (Base 886708) (June 1) ($) 2012 395,000 3.00 EV4 2013 625,000 3.00 EW2 2014 645,000 3.00 EX0 2015 665,000 3.00 EY8 2016 685,000 3.00 EZ5 2017 705,000 3.00 FA9 2018 725,000 3.00 FB7 2019 750,000 4.00 FC5 2020 780,000 4.00 FD3 2021 810,000 4.00 FE1 2022 845,000 4.00 FF8 2023 875,000 4.00 FG6 2024 910,000 4.00 FH4 2025 950,000 4.25 FJ0 2026 990,000 4.25 FK7 2028 2,105,000 4.50 FL5 2031 3,540,000 4.75 FM3
(2) Bond proceeds will be used to finance the costs described in the Election Measure and to pay the costs of issuance of the Bonds.
Section 3. Security for Bonds.
(1) The Bonds are general obligations of the City. The City hereby pledges its full faith and credit to pay the Bonds when due. The City covenants for the benefit of the Owners that the City shall levy, annually, as provided by law, in addition to its other ad valorem property taxes and outside the limitations of Section 11 and 11b of Article
Page 2 – Bond Declaration
IX of the Oregon Constitution, a direct ad valorem tax upon all of the taxable property within the City in sufficient amount, after considering discounts taken and delinquencies that may occur in the payment of taxes, to pay the Bonds promptly as they mature. The City covenants with the Owners of the Bonds to levy such a tax annually during each year that any of the Bond are outstanding.
(2) This Bond Declaration shall constitute a contract with the Owners.
Section 4. Tax Covenants.
The City intends for the interest on the Bonds to be excluded from gross income for federal income tax purposes pursuant to Sections 103 and 141 through 150 of the Code, and the applicable Income Tax Regulations. The City covenants not to take any action, or knowingly omit to take any action within its control, that if taken or omitted would cause the interest on the Bonds to be includable in gross income for federal income tax purposes.
Section 5. Book Entry System.
(1) The Bonds shall be initially issued in BEO form and shall be governed by this Section 5. While the Bonds are in BEO form no physical Bonds shall be provided to the Owners. An official of the City has executed and delivered a blanket letter of representations to The Depository Trust Company (“DTC”). While the Bonds are in BEO form, registration and transfer of beneficial interests in the Bonds shall be governed by that letter and the operational arrangements of DTC, as they may be amended from time to time, as provided in the blanket issuer letter of representations. So long as the Bonds are in BEO form:
DTC shall be treated as the Owner for all purposes, including payment and the giving of notices to the Owners of the Bonds. Bond payments shall be made, and notices shall be given, to DTC in accordance with the letter of representations. Any failure of DTC to advise any of its participants, or of any participant to notify the beneficial owner, of any such notice and its content or effect will not affect the validity of the redemption of the Bonds or of any other action premised on such notice.
(2) The City may discontinue maintaining the Bonds in BEO form at any time. The City shall discontinue maintaining the Bonds in BEO form if DTC determines not to continue to act as securities depository for the Bonds, or fails to perform satisfactorily as depository, and a satisfactory substitute depository cannot reasonably be found.
(3) If the City discontinues maintaining the Bonds in book-entry only form, the City shall cause the Paying Agent to authenticate and deliver replacement Bonds in fully registered form in authorized denominations in the names of the beneficial owners or their nominees; thereafter the provisions set forth in Section 9 below, regarding registration, transfer and exchange of Bonds shall apply.
(4) The City and the Paying Agent shall have no responsibility or obligation to any participant or correspondent of DTC or to any beneficial owner on behalf of which
Page 3 – Bond Declaration
such participants or correspondents act as agent for the beneficial owner with respect to: (A) the accuracy of the records of DTC, the nominee or any participant or correspondent with respect to any beneficial owner's interest in the Bonds; (B) the delivery to any participant or correspondent or any other person of any notice with respect to the Bonds, including any notice of prepayment; (C) the selection by DTC of the beneficial interest in Bonds to be redeemed prior to maturity; or (D) the payment to any participant, correspondent, or any other person other than the registered owner of the Bonds as shown in the registration books maintained by the Paying Agent, of any amount with respect to principal, any premium or interest on the Bonds. (5) The provisions of this Section 5 may be modified without the consent of the beneficial owners in order to conform this Section 5 to the standard practices of DTC or any successor depository for bonds issued in book-entry only form.
Section 6. Redemption of Bonds. Optional Redemption. The Bonds maturing in years 2012 through 2021, inclusive, are not subject to optional redemption prior to maturity. The Bonds maturing on June 1, 2022 and on any date thereafter are subject to redemption at the option of the City prior to their stated maturity at any time on or after June 1, 2021, as a whole or in part, and if in part, with maturities to be selected by the City and by DTC or by lot within a maturity at a price of par, plus accrued interest, if any, to the date of redemption. Mandatory Redemption. If not previously redeemed as described above, the Term Bonds due on June 1, 2028 and June 1, 2031 will be called for redemption (in such manner as the Paying Agent and DTC will determine) at a price of par, plus accrued interest on the date of redemption, on June 1 in the years and amounts as follows: 2028 Term Bonds Due June 1 Amount ($) 2027 1,030,000 2028 1,075,000* *Final maturity 2031 Term Bonds Due June 1 Amount ($) 2029 1,125,000 2030 1,180,000 2031 1,235,000 *Final maturity Optional redemption of the Term Bonds may be credited against mandatory redemption in the manner determined by the City.
Page 4 – Bond Declaration
Section 7. Notice of Redemption.
Unless the book-entry-only system is discontinued, notice of any call for redemption shall be given as required by the Blanket Issuer Letter of Representations to The Depository Trust Company. Unless The Depository Trust Company consents to a shorter period, the Paying Agent will notify The Depository Trust Company of any Bonds called for redemption not less than 20 days nor more than 60 days prior to the date fixed for redemption. If the book-entry- only system is discontinued, notice of redemption shall be given under the system established by the City pursuant to the next sentence. If the book-entry-only system is discontinued, the Paying Agent and the City shall, amend this Bond Declaration without the consent of Owners to provide for an alternative system of providing notice of redemption and such other matters as need to be updated for the Bonds that is of general acceptance in the municipal bond markets.
Section 8. Conditional Redemption.
Any notice of optional redemption given for the Bonds pursuant to 0may state that the optional redemption is conditional upon receipt by the Paying Agent of moneys sufficient to pay the redemption price of such Bonds or upon the satisfaction of any other condition, and/or that such notice may be rescinded upon the occurrence of any other event, and any conditional notice so given may be rescinded at any time before payment of such redemption price if any such condition so specified is not satisfied or if any such other event occurs. Notice of such rescission or of the failure of any such condition shall be given by the Paying Agent to affected owners of the Bonds as promptly as practicable.
Section 9. Authentication, Registration and Transfer.
(1) No Bond shall be entitled to any right or benefit under this Bond Declaration unless it shall have been authenticated by an authorized officer of the Paying Agent. The Paying Agent shall authenticate all Bonds to be delivered at the closing of the Bonds, and shall additionally authenticate all Bonds properly surrendered for exchange or transfer pursuant to this Bond Declaration.
(2) The ownership of all Bonds shall be entered in the Bond register maintained by the Paying Agent, and the City and the Paying Agent may treat the person listed as Owner in the Bond register as the Owner of the Bond for all purposes.
(3) While the Bonds are in book-entry only form, the Paying Agent shall transfer Bond principal and interest payments in the manner required by DTC.
(4) If the Bonds cease to be in book-entry only form, the Paying Agent shall mail each interest payment on the interest payment date (or the next Business Day if the payment date is not a Business Day) to the name and address of the Owners as they appear on the Bond register as of the Record Date for the Bonds. If payment is so mailed, neither the City nor the Paying Agent shall have any further liability to any party for such payment.
Page 5 – Bond Declaration
(5) Bonds may be exchanged for an equal principal amount of Bonds of the same maturity which are in different denominations, and Bonds may be transferred to other Owners if the Owner submits the following to the Paying Agent: written instructions for exchange or transfer satisfactory to the Paying Agent, signed by the Owner or attorney in fact and guaranteed or witnessed in a manner satisfactory to the Paying Agent, and the Bonds to be exchanged or transferred.
(6) The Paying Agent shall not be required to exchange or transfer any Bonds submitted to it during any period beginning with a Record Date and ending on the next following payment date; however, such Bonds shall be exchanged or transferred promptly following that payment date.
(7) The Paying Agent shall note the date of authentication on each Bond. The date of authentication shall be the date on which the Owner's name is listed on the Bond register.
(8) For purposes of this Section 9, Bonds shall be considered submitted to the Paying Agent on the date the Paying Agent actually receives the materials described in Section 9(5), above.
(9) The City may alter these provisions regarding registration and transfer by mailing notification of the altered provisions to all Owners. The altered provisions shall take effect on the date stated in the notice, which shall not be earlier than 45 days after notice is mailed.
Section 10. Amendment of Bond Declaration.
(1) The City may amend this Bond Declaration without the consent of any Owner for any one or more of the following purposes:
(A) To cure any ambiguity or formal defect or omission in this Bond Declaration;
(B) To add to the covenants and agreements of the City in this Bond Declaration other covenants and agreements to be observed by the City which are not contrary to or inconsistent with this Bond Declaration as theretofore in effect;
(C) To confirm, as further assurance, any security interest or pledge created under this Bond Declaration;
(D) To make any change which, in the reasonable judgment of the City, does not materially and adversely affect the rights of the Owners.
(2) This Bond Declaration may be amended for any other purpose only upon consent of Owners representing not less than fifty-one percent (51%) in aggregate principal amount of the adversely affected Bonds then Outstanding. However, no amendment shall be valid which:
Page 6 – Bond Declaration
(A) Extends the maturity of any Bonds, reduces the rate of interest upon any Bonds, extends the time of payment of interest on any Bonds, reduces the amount of principal payable on any Bonds, or reduces any premium payable on any Bonds, without the consent of the affected Owner; or
(B) Reduces the percent of Owners required to approve amendments to this Bond Declaration.
Section 11. Default and Remedies.
(1) The occurrence of one or more of the following shall constitute an Event of Default under this Bond Declaration:
(A) Failure by the City to pay Bond principal, interest or premium when due (whether at maturity, or upon redemption after a Bond has been properly called for redemption);
(B) Failure by the City to observe and perform any covenant, condition or agreement on its part to be observed or performed for the benefit of Owners of Bonds, for a period of 60 days after written notice to the City by the Owners of ten percent or more of the principal amount of Bonds then Outstanding specifying such failure and requesting that it be remedied; provided however, that if the failure stated in the notice cannot be corrected within such 60 day period, it shall not constitute an Event of Default so long as corrective action is instituted by the City within the 60 day period and diligently pursued, and the default is corrected as promptly as practicable after the written notice referred to in this Section; or,
(C) The City is adjudged insolvent by a court of competent jurisdiction, admits in writing its inability to pay its debts generally as they become due, files a petition in bankruptcy, or consents to the appointment of a receiver for the installment payments.
(2) The Owners of ten percent or more of the principal amount of Bonds then Outstanding may waive any Event of Default and its consequences, except an Event of Default described in Section 11(1)(A).
(3) Upon the occurrence and continuance of any Event of Default hereunder the Owners of ten percent or more of the principal amount of Bonds then Outstanding may take whatever action may appear necessary or desirable to enforce or to protect any of the rights of the Owners of Bonds, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Bond Declaration or in aid of the exercise of any power granted in this Bond Declaration or for the enforcement of any other legal or equitable right vested in the Owners of Bonds by this Bond Declaration or by law. However, the Bonds shall not be subject to acceleration.
Page 7 – Bond Declaration
(4) No remedy in this Bond Declaration conferred upon or reserved to Owners of Bonds is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Bond Declaration or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. To entitle the Owners of Bonds to exercise any remedy reserved to them, it shall not be necessary to give any notice other than such notice as may be required by this Bond Declaration or by law.
Section 12. Defeasance.
The City shall be obligated to pay Bonds which are defeased pursuant to this Section solely from the money and Government Obligations deposited with an escrow agent or independent trustee, and the City shall have no further obligation to pay the defeased Bonds from any source except the amounts deposited in the escrow. Bonds shall be deemed defeased if the City:
(1) irrevocably deposits money or noncallable Government Obligations in escrow with an independent trustee or escrow agent which are calculated to be sufficient for the payment of the Bonds which are to be defeased without reinvestment; and
(2) files with the escrow agent or trustee a verification from an independent, certified public accountant to the effect that calculation described above is accurate; and
(3) files with the escrow agent or trustee an opinion of nationally recognized bond counsel that the proposed defeasance will not cause the interest component of the Bonds to be includable in gross income under the Code.
Section 13. Form of Bond.
The Bonds shall be issued in substantially the form attached to this Bond Declaration as Exhibit A, with any changes that are approved by the City Official. The Bonds shall be executed on behalf of the City with the facsimile or manual signature of the City Official.
Section 14. Rules of Construction.
In determining the meaning of provisions of this Bond Declaration, the following rules shall apply unless the context clearly requires application of a different meaning:
(1) References to section numbers shall be construed as references to sections of this Bond Declaration.
(2) References to one gender shall include all genders.
(3) References to the singular shall include the plural, and references to the plural shall include the singular. [The remainder of this page is left blank intentionally.]
Page 8 – Bond Declaration
Page 9 – Bond Declaration
Dated as of the 3rd day of February, 2011.
City of Tigard, Oregon
By: ______Financial and Information Services Director
Signature Page – Bond Declaration
Exhibit A Form of Bond No. R-«BondNumber» $«PrincipalAmtNumber» United States of America State of Oregon County of Washington City of Tigard General Obligation Bond Series 2011A
Dated Date: February 3, 2011 Interest Rate Per Annum: «CouponRate»% Maturity Date: June 1, «MaturityYear» CUSIP Number: 886708«CUSIPNumbr» Registered Owner: -----Cede & Co.----- Principal Amount: -----«PrincipalAmtSpelled» Dollars-----
The City of Tigard, Oregon (the "City"), for value received, acknowledges itself indebted and hereby promises to pay to the Registered Owner hereof, or registered assigns, the Principal Amount indicated above on the Maturity Date indicated above together with interest thereon from the date hereof at the Interest Rate Per Annum indicated above, computed on the basis of a 360-day year of twelve 30-day months. Interest is payable semiannually on the first day of June and the first day of December in each year until maturity or prior redemption, commencing December 1, 2011. Payment of each installment of interest shall be made on the payment date to the Registered Owner hereof whose name appears on the registration books of the City maintained by the City's paying agent and registrar, which is currently The Bank of New York Mellon Trust Company, N.A. (the "Paying Agent"), as the Registered Owners appear on the registration books as of the 15th day of the month immediately preceding the applicable interest payment date. For so long as this Bond is subject to a book-entry-only system, principal and interest payments shall be paid on each payment date to the nominee of the securities depository for the Bonds. On the date of issuance of this Bond, the securities depository for the Bonds is The Depository Trust Company, New York, New York, and Cede & Co. is the nominee of The Depository Trust Company. Such payments shall be made payable to the order of "Cede & Co." This Bond is one of a duly authorized series of bonds aggregating $17,000,000 in principal amount designated as General Obligation Bonds, Series 2011A (the "Bonds"). The Bonds are issued to acquire, preserve and protect open spaces, water quality, habitat and parks as described in Measure 34-181 approved by the City’s electors at the November 2, 2010 election. The Bonds are issued under and pursuant to Resolution No. 10-75 adopted by the City Council on December 28, 2010 (the “Resolution”), a Bond Declaration dated as of the date of delivery of the Bonds (the "Declaration") executed pursuant to the Resolution, and the approving vote of the City’s electors at the November 2, 2010 election. The Bonds are issued in full and strict accordance and compliance with all of the provisions of the Constitution and Statutes of the State of Oregon and the Charter of the City. The Bonds constitute valid and legally binding obligations of the City. The City has pledged its full faith and credit to pay the Bonds when due. The City covenanted for the benefit of the owners that the City will levy, annually, as provided by law, in addition to its other ad valorem property taxes and outside the limitations of Section 11 and 11b of Article IX of the Oregon Constitution, a direct ad valorem tax upon all of the taxable property within the City in sufficient amount, after considering discounts taken and delinquencies that may occur in the payment of taxes, to pay the Bonds promptly as they mature. The City covenanted with the owners of the Bonds to levy such a tax annually during each year that any of the Bonds are outstanding. The Bonds do not constitute a debt or indebtedness of Washington County, the State of Oregon, or any political subdivision thereof other than the City. The rights and obligations of the City and the Registered Owners with respect to the Bonds are subject to the terms described in the Declaration. The Bonds are initially issued as a book-entry-only security issue with no certificates provided to the beneficial owners. Records of ownership of beneficial interests in the Bonds will be maintained by The Depository Trust Company and its participants.
Exhibit A: Form of Bond - City of Tigard, Oregon, General Obligation Bond, Series 2011
Should the book-entry only security system be discontinued, the Bonds shall be issued in the form of registered Bonds without coupons in denominations of $5,000 or any integral multiple thereof. Such Bonds may be exchanged for Bonds of the same aggregate principal amount, interest rate and maturity date, but different authorized denominations, as provided in the Declaration. The Bonds shall mature and be subject to redemption as described in the Declaration and in the final Official Statement for the Bonds which is dated January 25, 2011. Unless the book-entry-only system is discontinued, notice of any call for redemption shall be given as required by the Blanket Issuer Letter of Representations to The Depository Trust Company, as referenced in the Declaration. Unless The Depository Trust Company consents to a shorter period, the Paying Agent will notify The Depository Trust Company of any Bonds called for redemption not less than 20 days nor more than 60 days prior to the date fixed for redemption. The Bonds are subject to conditional notice of redemption as described in the Declaration. If the book-entry-only system is discontinued, the Paying Agent and the City shall provide for an alternative system of providing notice of redemption and such other matters as need to be updated for the Bonds that is of general acceptance in the municipal bond markets. However, any failure to give notice shall not invalidate the redemption of the Bonds. Any exchange or transfer of this Bond must be registered, as provided in the Declaration, upon the bond register kept for that purpose by the Paying Agent. The exchange or transfer of this Bond may be registered only by surrendering it, together with a written instrument of exchange or transfer which is satisfactory to the Paying Agent and which is executed by the registered owner or duly authorized attorney. Upon registration, a new registered Bond or Bonds, of the same series and maturity and in the same aggregate principal amount, shall be issued to the transferee as provided in the Declaration. The City and the Paying Agent may treat the person in whose name this Bond is registered on the bond register as its absolute owner for all purposes, as provided in the Declaration. Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”) to the City or the Paying Agent for registration of transfer, exchange or payment, and any Bond issued is registered in the name of Cede & Co. or such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entry as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. This Bond shall remain in the Paying Agent’s custody subject to the provisions of the FAST Balance Certificate Agreement currently in effect between the Paying Agent’s and The Depository Trust Company. IT IS HEREBY CERTIFIED, RECITED, AND DECLARED that all conditions, acts, and things required to exist, to happen, and to be performed precedent to and in the issuance of this Bond have existed, have happened, and have been performed in due time, form, and manner as required by the Constitution and Statutes of the State of Oregon and the Charter of the City; and that the issue of which this Bond is a part, and all other obligations of the City, are within every debt limitation and other limit prescribed by such Constitution and Statutes and City Charter; and that the City has covenanted to levy a tax upon all taxable property within the City in an amount sufficient, with other available funds, to pay when due the interest on and the principal of the Bonds. IN WITNESS WHEREOF, the Council of the City of Tigard, Oregon, has authorized this Bond to be signed by the facsimile signature of its City Official as of the 3rd day of February, 2011. City of Tigard, Oregon
______Financial and Information Services Director
Exhibit A: Form of Bond - City of Tigard, Oregon, General Obligation Bond, Series 2011
THIS BOND SHALL NOT BE VALID UNLESS PROPERLY AUTHENTICATED BY THE PAYING AGENT IN THE SPACE INDICATED BELOW. This Bond is one of a series of $17,000,000 aggregate principal amount of City of Tigard, Oregon, General Obligation Bonds, Series 2011A issued pursuant to the Declaration described herein. Date of authentication: February 3, 2011. The Bank of New York Mellon Trust Company, N.A., as Paying Agent and Registrar
Authorized Officer
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto
(Please insert social security or other identifying number of assignee) this Bond and does hereby irrevocably constitute and appoint as attorney to transfer this Bond on the books kept for registration thereof with the full power of substitution in the premises.
Dated: ------NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears upon the face of this Bond in every particular, without alteration or enlargement or any change whatever.
NOTICE: Signature(s) must be guaranteed by a member of Signature Guaranteed the New York Stock Exchange or a commercial bank or trust ______company (Bank, Trust Company or Brokerage Firm)
______Authorized Officer
The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM -- tenants in common TEN ENT -- as tenants by the entireties JT TEN -- as joint tenants with right of survivorship and not as tenants in common OREGON CUSTODIANS use the following ______CUST UL OREG ______MIN as custodian for (name of minor) OR UNIF TRANS MIN ACT under the Oregon Uniform Transfer to Minors Act
Additional abbreviations may also be used though not in the list above.
Exhibit A: Form of Bond - City of Tigard, Oregon, General Obligation Bond, Series 2011
B OND D ECLARATION
City of Tigard, Oregon
$8,655,000
General Obligation Refunding Bonds
Series 2011B
Executed on behalf of the City of Tigard, Oregon
as of the 3rd day of February, 2011
Table of Contents Section 1. Definitions. 1 Section 2. Bonds Authorized. 2 Section 3. Security for Bonds. 2 Section 4. Tax Covenants. 3 Section 5. Book Entry System. 3 Section 6. Redemption of Bonds. 4 Section 7. Notice of Redemption. 4 Section 8. Conditional Redemption. 4 Section 9. Authentication, Registration and Transfer. 5 Section 10. Amendment of Bond Declaration. 6 Section 11. Default and Remedies. 6 Section 12. Defeasance. 7 Section 13. Form of Bond. 8 Section 14. Rules of Construction. 8 Exhibit A –Form of Bond
This table of contents is not a part of the bond declaration but is provided for reference only.
B OND D ECLARATION
THIS BOND DECLARATION is executed as of February 3, 2011, on behalf of the City of Tigard, Oregon by its City Official pursuant to and as defined in Resolution No. 10-75 adopted by the City Council on December 28, 2010 (the “Resolution”). The Resolution authorizes the City Official to execute a bond declaration which contains the terms of the City’s General Obligation Refunding Bonds, Series 2011B the covenants of the City relating to those bonds. Section 1. Definitions. Unless the context clearly requires otherwise, the following terms shall have the following meanings: “BEO” means “book-entry-only” and refers to a system for clearance and settlement of securities transactions through electronic book-entry changes, which eliminates the need for physical movement of securities. “Bond Declaration” means this Bond Declaration, including any amendments made in accordance with Section 10 of this Bond Declaration. “Bonds” means the City’s General Obligation Refunding Bonds, Series 2011B, that are described in Section 2 of this Bond Declaration. “Business Day” means any day except a Saturday, a Sunday, a legal holiday, a day on which the Paying Agent or offices of banks in Oregon or New York are authorized or required by law or executive order to remain closed, or a day on which the New York Stock Exchange is closed. “City” means the City of Tigard, Oregon. “City Official” means the Financial and Information Services Director, City Manager or the Assistant City Manager. “Code” means the Internal Revenue Code of 1986, as amended. “Event of Default” refers to an Event of Default listed in Section 11(1) of this Bond Declaration. “Government Obligations” means direct noncallable obligations of the United States, or obligations the principal of and interest on which are fully and unconditionally guaranteed by the United States. “Outstanding” refers to all Bonds authorized and delivered pursuant to this Bond Declaration except Bonds which have been paid, canceled, or defeased pursuant to Section 12 of this Bond Declaration, and Bonds which have matured but have not been presented for payment for the payment of which adequate money has been transferred to the Paying Agent. “Owner” means the person shown on the Bond register maintained by the Paying Agent as the registered owner of a Bond.
Page 1 – Bond Declaration
“Paying Agent” means the registrar and paying agent for the Bonds, which, at the time of execution of this Bond Declaration, is The Bank of New York Mellon Trust Company, N.A. “Record Date” means the 15th day of the month preceding a payment date. “Resolution” means Resolution No. 10-75 adopted by the City Council on December 28, 2010, which authorize the issuance and sale of the Bonds, the execution of this Bond Declaration, and delegates the City Officials authorized to act on behalf of the City in connection with the Bonds. Section 2. Bonds Authorized. (1) Pursuant to Oregon Revised Statutes Section 287A.360 and the Resolution, the City hereby authorizes the issuance, sale and delivery of the Bonds in accordance with this Bond Declaration and in the principal amount of $8,655,000. The Bonds shall be dated February 3, 2011, shall bear interest which is payable on June 1 and December 1 of each year, commencing December 1, 2011. The Bonds shall mature on the following dates in the following principal amounts: Maturity Principal Interest CUSIP Number Date Amount Rate (%) (Base 886708) (December 1) ($) 2011 510,000 3.00 FN1 2012 625,000 3.00 FP6 2013 645,000 3.00 FQ4 2014 665,000 3.00 FR2 2015 685,000 3.00 FS0 2016 705,000 3.00 FT8 2017 730,000 3.00 FU5 2018 755,000 4.00 FV3 2019 785,000 4.00 FW1 2020 815,000 4.00 FX9 2021 850,000 4.00 FY7 2022 885,000 4.00 FZ4
(2) Bond proceeds will be used to refund the City’s outstanding general obligation borrowing that was sold to the Oregon Business Development Department, formerly Oregon Economic and Community Development Department, in Community Facilities Loan Number K03001, and to pay the costs of issuance of the Bonds.
Section 3. Security for Bonds.
(1) The Bonds are general obligations of the City. The City hereby pledges its full faith and credit to pay the Bonds when due. The City covenants for the benefit of the Owners that the City shall levy, annually, as provided by law, in addition to its other ad valorem property taxes and outside the limitations of Section 11 and 11b of Article IX of the Oregon Constitution, a direct ad valorem tax upon all of the taxable property within the City in sufficient amount, after considering discounts taken and delinquencies that may occur in the payment of taxes, to pay the Bonds promptly as
Page 2 – Bond Declaration
they mature. The City covenants with the Owners of the Bonds to levy such a tax annually during each year that any of the Bond are outstanding.
(2) This Bond Declaration shall constitute a contract with the Owners.
Section 4. Tax Covenants.
The City intends for the interest on the Bonds to be excluded from gross income for federal income tax purposes pursuant to Sections 103 and 141 through 150 of the Code, and the applicable Income Tax Regulations. The City covenants not to take any action, or knowingly omit to take any action within its control, that if taken or omitted would cause the interest on the Bonds to be includable in gross income for federal income tax purposes.
Section 5. Book Entry System.
(1) The Bonds shall be initially issued in BEO form and shall be governed by this Section 5. While the Bonds are in BEO form no physical Bonds shall be provided to the Owners. An official of the City has executed and delivered a blanket letter of representations to The Depository Trust Company (“DTC”). While the Bonds are in BEO form, registration and transfer of beneficial interests in the Bonds shall be governed by that letter and the operational arrangements of DTC, as they may be amended from time to time, as provided in the blanket issuer letter of representations. So long as the Bonds are in BEO form DTC shall be treated as the Owner for all purposes, including payment and the giving of notices to the Owners of the Bonds. Bond payments shall be made, and notices shall be given, to DTC in accordance with the letter of representations. Any failure of DTC to advise any of its participants, or of any participant to notify the beneficial owner, of any such notice and its content or effect will not affect the validity of the redemption of the Bonds or of any other action premised on such notice.
(2) The City may discontinue maintaining the Bonds in BEO form at any time. The City shall discontinue maintaining the Bonds in BEO form if DTC determines not to continue to act as securities depository for the Bonds, or fails to perform satisfactorily as depository, and a satisfactory substitute depository cannot reasonably be found.
(3) If the City discontinues maintaining the Bonds in book-entry only form, the City shall cause the Paying Agent to authenticate and deliver replacement Bonds in fully registered form in authorized denominations in the names of the beneficial owners or their nominees; thereafter the provisions set forth in Section 7 below, regarding registration, transfer and exchange of Bonds shall apply.
(4) The City and the Paying Agent shall have no responsibility or obligation to any participant or correspondent of DTC or to any beneficial owner on behalf of which such participants or correspondents act as agent for the beneficial owner with respect to:
Page 3 – Bond Declaration
(A) the accuracy of the records of DTC, the nominee or any participant or correspondent with respect to any beneficial owner's interest in the Bonds;
(B) the delivery to any participant or correspondent or any other person of any notice with respect to the Bonds, including any notice of prepayment;
(C) the selection by DTC of the beneficial interest in Bonds to be redeemed prior to maturity; or
(D) the payment to any participant, correspondent, or any other person other than the registered owner of the Bonds as shown in the registration books maintained by the Paying Agent, of any amount with respect to principal, any premium or interest on the Bonds.
(5) The provisions of this Section 5 may be modified without the consent of the beneficial owners in order to conform this Section 5 to the standard practices of DTC or any successor depository for bonds issued in book-entry only form.
Section 6. Redemption of Bonds.
Optional Redemption. The Bonds maturing in years 2011 through 2020, inclusive, are not subject to optional redemption prior to maturity. The Bonds maturing on December 1, 2021 and on any date thereafter are subject to redemption at the option of the City prior to their stated maturity at any time on or after December 1, 2020, as a whole or in part, and if in part, with maturities to be selected by the City and by DTC or by lot within a maturity at a price of par, plus accrued interest, if any, to the date of redemption.
Section 7. Notice of Redemption.
Unless the book-entry-only system is discontinued, notice of any call for redemption shall be given as required by the Blanket Issuer Letter of Representations to The Depository Trust Company. Unless The Depository Trust Company consents to a shorter period, the Paying Agent will notify The Depository Trust Company of any Bonds called for redemption not less than 20 days nor more than 60 days prior to the date fixed for redemption. If the book-entry- only system is discontinued, notice of redemption shall be given under the system established by the City pursuant to the next sentence. If the book-entry-only system is discontinued, the Paying Agent and the City shall, amend this Bond Declaration without the consent of Owners to provide for an alternative system of providing notice of redemption and such other matters as need to be updated for the Bonds that is of general acceptance in the municipal bond markets.
Section 8. Conditional Redemption.
Any notice of optional redemption given for the Bonds pursuant to Section 7 may state that the optional redemption is conditional upon receipt by the Paying Agent of moneys sufficient to pay the redemption price of such Bonds or upon the satisfaction of any other condition, and/or that such notice may be rescinded upon the occurrence of any other event, and any conditional notice so given may be rescinded at any time before payment of such redemption price if any such
Page 4 – Bond Declaration
condition so specified is not satisfied or if any such other event occurs. Notice of such rescission or of the failure of any such condition shall be given by the Paying Agent to affected owners of the Bonds as promptly as practicable.
Section 9. Authentication, Registration and Transfer.
(1) No Bond shall be entitled to any right or benefit under this Bond Declaration unless it shall have been authenticated by an authorized officer of the Paying Agent. The Paying Agent shall authenticate all Bonds to be delivered at the closing of the Bonds, and shall additionally authenticate all Bonds properly surrendered for exchange or transfer pursuant to this Bond Declaration.
(2) The ownership of all Bonds shall be entered in the Bond register maintained by the Paying Agent, and the City and the Paying Agent may treat the person listed as Owner in the Bond register as the Owner of the Bond for all purposes.
(3) While the Bonds are in book-entry only form, the Paying Agent shall transfer Bond principal and interest payments in the manner required by DTC.
(4) If the Bonds cease to be in book-entry only form, the Paying Agent shall mail each interest payment on the interest payment date (or the next Business Day if the payment date is not a Business Day) to the name and address of the Owners as they appear on the Bond register as of the Record Date for the Bonds. If payment is so mailed, neither the City nor the Paying Agent shall have any further liability to any party for such payment.
(5) Bonds may be exchanged for an equal principal amount of Bonds of the same maturity which are in different denominations, and Bonds may be transferred to other Owners if the Owner submits the following to the Paying Agent: written instructions for exchange or transfer satisfactory to the Paying Agent, signed by the Owner or attorney in fact and guaranteed or witnessed in a manner satisfactory to the Paying Agent, and the Bonds to be exchanged or transferred.
(6) The Paying Agent shall not be required to exchange or transfer any Bonds submitted to it during any period beginning with a Record Date and ending on the next following payment date; however, such Bonds shall be exchanged or transferred promptly following that payment date.
(7) The Paying Agent shall note the date of authentication on each Bond. The date of authentication shall be the date on which the Owner's name is listed on the Bond register.
(8) For purposes of this Section 7, Bonds shall be considered submitted to the Paying Agent on the date the Paying Agent actually receives the materials described in Section 9(5), above.
Page 5 – Bond Declaration
(9) The City may alter these provisions regarding registration and transfer by mailing notification of the altered provisions to all Owners. The altered provisions shall take effect on the date stated in the notice, which shall not be earlier than 45 days after notice is mailed.
Section 10. Amendment of Bond Declaration.
(1) The City may amend this Bond Declaration without the consent of any Owner for any one or more of the following purposes:
(A) To cure any ambiguity or formal defect or omission in this Bond Declaration;
(B) To add to the covenants and agreements of the City in this Bond Declaration other covenants and agreements to be observed by the City which are not contrary to or inconsistent with this Bond Declaration as theretofore in effect;
(C) To confirm, as further assurance, any security interest or pledge created under this Bond Declaration;
(D) To make any change which, in the reasonable judgment of the City, does not materially and adversely affect the rights of the Owners.
(2) This Bond Declaration may be amended for any other purpose only upon consent of Owners representing not less than fifty-one percent (51%) in aggregate principal amount of the adversely affected Bonds then Outstanding. However, no amendment shall be valid which:
(A) Extends the maturity of any Bonds, reduces the rate of interest upon any Bonds, extends the time of payment of interest on any Bonds, reduces the amount of principal payable on any Bonds, or reduces any premium payable on any Bonds, without the consent of the affected Owner; or
(B) Reduces the percent of Owners required to approve amendments to this Bond Declaration.
Section 11. Default and Remedies.
(1) The occurrence of one or more of the following shall constitute an Event of Default under this Bond Declaration:
(A) Failure by the City to pay Bond principal, interest or premium when due (whether at maturity, or upon redemption after a Bond has been properly called for redemption);
(B) Failure by the City to observe and perform any covenant, condition or agreement on its part to be observed or performed for the benefit of Owners of Bonds, for a period of 60 days after written notice to the City by the Owners of ten percent or more of the principal amount of Bonds then Outstanding specifying such failure Page 6 – Bond Declaration
and requesting that it be remedied; provided however, that if the failure stated in the notice cannot be corrected within such 60 day period, it shall not constitute an Event of Default so long as corrective action is instituted by the City within the 60 day period and diligently pursued, and the default is corrected as promptly as practicable after the written notice referred to in this Section; or,
(C) The City is adjudged insolvent by a court of competent jurisdiction, admits in writing its inability to pay its debts generally as they become due, files a petition in bankruptcy, or consents to the appointment of a receiver for the installment payments.
(2) The Owners of ten percent or more of the principal amount of Bonds then Outstanding may waive any Event of Default and its consequences, except an Event of Default described in Section 11(1)(A).
(3) Upon the occurrence and continuance of any Event of Default hereunder the Owners of ten percent or more of the principal amount of Bonds then Outstanding may take whatever action may appear necessary or desirable to enforce or to protect any of the rights of the Owners of Bonds, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Bond Declaration or in aid of the exercise of any power granted in this Bond Declaration or for the enforcement of any other legal or equitable right vested in the Owners of Bonds by this Bond Declaration or by law. However, the Bonds shall not be subject to acceleration.
(4) No remedy in this Bond Declaration conferred upon or reserved to Owners of Bonds is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Bond Declaration or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. To entitle the Owners of Bonds to exercise any remedy reserved to them, it shall not be necessary to give any notice other than such notice as may be required by this Bond Declaration or by law.
Section 12. Defeasance.
The City shall be obligated to pay Bonds which are defeased pursuant to this Section solely from the money and Government Obligations deposited with an escrow agent or independent trustee, and the City shall have no further obligation to pay the defeased Bonds from any source except the amounts deposited in the escrow. Bonds shall be deemed defeased if the City:
(1) irrevocably deposits money or noncallable Government Obligations in escrow with an independent trustee or escrow agent which are calculated to be sufficient for the payment of the Bonds which are to be defeased without reinvestment; and
Page 7 – Bond Declaration
(2) files with the escrow agent or trustee a verification from an independent, certified public accountant to the effect that calculation described above is accurate; and
(3) files with the escrow agent or trustee an opinion of nationally recognized bond counsel that the proposed defeasance will not cause the interest component of the Bonds to be includable in gross income under the Code.
Section 13. Form of Bond.
The Bonds shall be issued in substantially the form attached to this Bond Declaration as Exhibit A, with any changes that are approved by the City Official. The Bonds shall be executed on behalf of the City with the facsimile or manual signature of the City Official.
Section 14. Rules of Construction.
In determining the meaning of provisions of this Bond Declaration, the following rules shall apply unless the context clearly requires application of a different meaning:
(1) References to section numbers shall be construed as references to sections of this Bond Declaration.
(2) References to one gender shall include all genders.
(3) References to the singular shall include the plural, and references to the plural shall include the singular. [The remainder of this page is left blank intentionally.]
Page 8 – Bond Declaration
Dated as of the 3rd day of February, 2011.
City of Tigard, Oregon
By: ______Financial and Information Services Director
Signature Page – Bond Declaration
Exhibit A Form of Bond No. R-«BondNumber» $«PrincipalAmtNumber» United States of America State of Oregon County of Washington City of Tigard General Obligation Refunding Bond Series 2011B
Dated Date: February 3, 2011 Interest Rate Per Annum: «CouponRate»% Maturity Date: December 1, «MaturityYear» CUSIP Number: 886708«CUSIPNumbr» Registered Owner: -----Cede & Co.----- Principal Amount: -----«PrincipalAmtSpelled» Dollars-----
The City of Tigard, Oregon (the "City"), for value received, acknowledges itself indebted and hereby promises to pay to the Registered Owner hereof, or registered assigns, the Principal Amount indicated above on the Maturity Date indicated above together with interest thereon from the date hereof at the Interest Rate Per Annum indicated above, computed on the basis of a 360-day year of twelve 30-day months. Interest is payable semiannually on the first day of June and the first day of December in each year until maturity or prior redemption, commencing December 1, 2011. Payment of each installment of interest shall be made on the payment date to the Registered Owner hereof whose name appears on the registration books of the City maintained by the City's paying agent and registrar, which is currently The Bank of New York Mellon Trust Company, N.A. (the "Paying Agent"), as the Registered Owners appear on the registration books as of the 15th day of the month immediately preceding the applicable interest payment date. For so long as this Bond is subject to a book-entry-only system, principal and interest payments shall be paid on each payment date to the nominee of the securities depository for the Bonds. On the date of issuance of this Bond, the securities depository for the Bonds is The Depository Trust Company, New York, New York, and Cede & Co. is the nominee of The Depository Trust Company. Such payments shall be made payable to the order of "Cede & Co." This Bond is one of a duly authorized series of bonds aggregating $8,655,000 in principal amount designated as General Obligation Refunding Bonds, Series 2011B (the "Bonds"). The Bonds are issued to refund the City’s outstanding general obligation borrowing that was sold to the Oregon Business Development Department, formerly Oregon Economic and Community Development Department, in Community Facilities Loan Number K03001 . The Bonds are issued under and pursuant to Resolution No. 10-75 adopted by the City Council on December 28, 2010 (the “Resolution”), and a Bond Declaration dated as of the date of delivery of the Bonds (the "Declaration") executed pursuant to the Resolution. The Bonds are issued in full and strict accordance and compliance with all of the provisions of the Constitution and Statutes of the State of Oregon and the Charter of the City. The Bonds constitute valid and legally binding obligations of the City. The City has pledged its full faith and credit to pay the Bonds when due. The City covenanted for the benefit of the owners that the City will levy, annually, as provided by law, in addition to its other ad valorem property taxes and outside the limitations of Section 11 and 11b of Article IX of the Oregon Constitution, a direct ad valorem tax upon all of the taxable property within the City in sufficient amount, after considering discounts taken and delinquencies that may occur in the payment of taxes, to pay the Bonds promptly as they mature. The City covenanted with the owners of the Bonds to levy such a tax annually during each year that any of the Bonds are outstanding. The Bonds do not constitute a debt or indebtedness of Washington County, the State of Oregon, or any political subdivision thereof other than the City. The rights and obligations of the City and the Registered Owners with respect to the Bonds are subject to the terms described in the Declaration.
Exhibit A: Form of Bond - City of Tigard, Oregon, General Obligation Refunding Bond, Series 2011B
The Bonds are initially issued as a book-entry-only security issue with no certificates provided to the beneficial owners. Records of ownership of beneficial interests in the Bonds will be maintained by The Depository Trust Company and its participants. Should the book-entry only security system be discontinued, the Bonds shall be issued in the form of registered Bonds without coupons in denominations of $5,000 or any integral multiple thereof. Such Bonds may be exchanged for Bonds of the same aggregate principal amount, interest rate and maturity date, but different authorized denominations, as provided in the Declaration. The Bonds shall mature and be subject to redemption as described in the Declaration and in the final Official Statement for the Bonds which is dated January 25, 2011. Unless the book-entry-only system is discontinued, notice of any call for redemption shall be given as required by the Blanket Issuer Letter of Representations to The Depository Trust Company, as referenced in the Declaration. Unless The Depository Trust Company consents to a shorter period, the Paying Agent will notify The Depository Trust Company of any Bonds called for redemption not less than 20 days nor more than 60 days prior to the date fixed for redemption. The Bonds are subject to conditional notice of redemption as described in the Declaration. If the book-entry-only system is discontinued, the Paying Agent and the City shall provide for an alternative system of providing notice of redemption and such other matters as need to be updated for the Bonds that is of general acceptance in the municipal bond markets. However, any failure to give notice shall not invalidate the redemption of the Bonds. Any exchange or transfer of this Bond must be registered, as provided in the Declaration, upon the bond register kept for that purpose by the Paying Agent. The exchange or transfer of this Bond may be registered only by surrendering it, together with a written instrument of exchange or transfer which is satisfactory to the Paying Agent and which is executed by the registered owner or duly authorized attorney. Upon registration, a new registered Bond or Bonds, of the same series and maturity and in the same aggregate principal amount, shall be issued to the transferee as provided in the Declaration. The City and the Paying Agent may treat the person in whose name this Bond is registered on the bond register as its absolute owner for all purposes, as provided in the Declaration. Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”) to the City or the Paying Agent for registration of transfer, exchange or payment, and any Bond issued is registered in the name of Cede & Co. or such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entry as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. This Bond shall remain in the Paying Agent’s custody subject to the provisions of the FAST Balance Certificate Agreement currently in effect between the Paying Agent’s and The Depository Trust Company. IT IS HEREBY CERTIFIED, RECITED, AND DECLARED that all conditions, acts, and things required to exist, to happen, and to be performed precedent to and in the issuance of this Bond have existed, have happened, and have been performed in due time, form, and manner as required by the Constitution and Statutes of the State of Oregon and the Charter of the City; and that the issue of which this Bond is a part, and all other obligations of the City, are within every debt limitation and other limit prescribed by such Constitution and Statutes and City Charter; and that the City has covenanted to levy a tax upon all taxable property within the City in an amount sufficient, with other available funds, to pay when due the interest on and the principal of the Bonds. IN WITNESS WHEREOF, the Council of the City of Tigard, Oregon, has authorized this Bond to be signed by the facsimile signature of its City Official as of the 3rd day of February, 2011. City of Tigard, Oregon
______Financial and Information Services Director
Exhibit A: Form of Bond - City of Tigard, Oregon, General Obligation Refunding Bond, Series 2011B
THIS BOND SHALL NOT BE VALID UNLESS PROPERLY AUTHENTICATED BY THE PAYING AGENT IN THE SPACE INDICATED BELOW. This Bond is one of a series of $8,655,000 aggregate principal amount of City of Tigard, Oregon, General Obligation Refunding Bonds, Series 2011B issued pursuant to the Declaration described herein. Date of authentication: February 3, 2011. The Bank of New York Mellon Trust Company, N.A., as Paying Agent and Registrar
Authorized Officer
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto
(Please insert social security or other identifying number of assignee) this Bond and does hereby irrevocably constitute and appoint as attorney to transfer this Bond on the books kept for registration thereof with the full power of substitution in the premises.
Dated: ------NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears upon the face of this Bond in every particular, without alteration or enlargement or any change whatever.
NOTICE: Signature(s) must be guaranteed by a member of Signature Guaranteed the New York Stock Exchange or a commercial bank or trust ______company (Bank, Trust Company or Brokerage Firm)
______Authorized Officer
The following abbreviations, when used in the inscription on the face of this Bond, shall be construed as though they were written out in full according to applicable laws or regulations. TEN COM -- tenants in common TEN ENT -- as tenants by the entireties JT TEN -- as joint tenants with right of survivorship and not as tenants in common OREGON CUSTODIANS use the following ______CUST UL OREG ______MIN as custodian for (name of minor) OR UNIF TRANS MIN ACT under the Oregon Uniform Transfer to Minors Act
Additional abbreviations may also be used though not in the list above.
Exhibit A: Form of Bond - City of Tigard, Oregon, General Obligation Refunding Bond, Series 2011B
APPENDIX B Comprehensive Annual Financial Report for the fiscal year ended June 30, 2010
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Fiscal Year ended June 30, 2010
13125 SW Hall Boulevard | Tigard, OR 97223 | www.tigard-or.gov
CITY OF TIGARD, OREGON
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the fiscal year ended June 30, 2010
Prepared by:
City of Tigard – Financial and Information Services Department
City of Tigard, Oregon City of Tigard, Oregon Table of Contents Table of Contents, Continued Page Page FINANCIAL SECTION, Continued: INTRODUCTORY SECTION: Other Supplementary Information, Continued: Letter of Transmittal ...... 3 Debt Service Funds: Certificate of Achievement for Excellence in Financial Reporting ...... Combining Balance Sheet – Nonmajor Debt Service Funds ...... Organization Chart ...... 1 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance ...... 9 Mayor and City Council Members ...... 1 Schedules of Revenues and Expenditures – Budget and Actual: Bancroft Debt Service Fund ...... 9 FINANCIAL SECTION: General Obligation Bond Debt Service Fund ...... 9 Independent Auditors’ Report...... 1 Urban Renewal Agency Debt Service Fund ...... 9 Capital Projects Funds: Management’s Discussion and Analysis ...... 1 Combining Balance Sheet – Nonmajor Capital Projects Funds ...... Combining Statement of Revenues, Expenditures and Basic Financial Statements: Changes in Fund Balances – Nonmajor Capital Projects Funds ...... Government-Wide Financial Statements Facility Fund ...... Statement of Net Assets ...... 35 Transportation Development Tax Fund ...... 10 Statement of Activities ...... 36 Traffic Impact Fee Fund ...... 10 Fund Financial Statements Underground Utility Fund ...... 10 Major Governmental Funds: Street Maintenance Fee Fund ...... 10 Balance Sheet ...... 3 Parks Capital Fund ...... 1 Statement of Revenues, Expenditures, and Changes in Fund Balance ...... 3 Parks SDC Fund ...... 1 Urban Renewal Agency Capital Projects Fund ...... 1 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balance to the Statement of Activities ...... Proprietary Funds: Proprietary Funds: Enterprise Funds: Statement of Net Assets ...... 4 Schedules of Revenues and Expenditures – Budget and Actual: Statement of Revenues, Expenses, and Changes in Fund Net Assets...... 4 Sanitary Sewer Fund ...... 11 Statement of Cash Flows ...... 4 Reconciliation of Budgetary Revenues and Expenditures to Proprietary Pension Trust Fund: Revenues and Expenses – Sanitary Sewer Fund ...... 11 Statement of Plan Net Assets...... 4 Storm Sewer Fund ...... 11 Statement of Changes in Plan Net Assets...... 44 Water Quality and Quantity Fund ...... 11 Notes to Basic Financial Statements ...... 4 Reconciliation of Budgetary Revenues and Expenditures to Proprietary Revenues and Expenses – Storm Sewer Funds ...... 11 Required Supplementary Information: Water General Fund ...... 1 Schedules of Revenues and Expenditures – Budget and Actual: Water System Development Fund ...... 1 General Fund ...... 7 Water Capital Projects Fund ...... 12 Gas Tax Fund ...... 7 Reconciliation of Budgetary Revenues and Expenditures to Proprietary City Gas Tax Fund ...... 7 Revenues and Expenses – Water Funds ...... 12 Tree Replacement Fund ...... 7 Reconciliation of Budgetary Fund Balances to Generally Accepted Notes to Required Supplemental Information – Budget to GAAP Reconciliation ...... 7 Accounting Principles Basis Net Assets ...... 12
Other Supplementary Information: Internal Service Funds: Nonmajor Governmental Funds Combining Statements: Combining Statement of Net Assets ...... 12 Combining Balance Sheet ...... Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets ...... 12 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ...... Combining Statement of Cash Flows ...... 12 Special Revenue Funds: Schedules of Revenues and Expenditures – Budget and Actual: Combining Balance Sheet – Nonmajor Special Revenue Funds ...... 8 Central Service Fund ...... 1 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance ...... 8 Fleet/Property Management Fund ...... 1 Schedules of Revenues and Expenditures – Budget and Actual: Insurance Fund ...... 13 Electrical Inspection Fund...... 8 Criminal Forfeiture Fund ...... Building Fund ...... Library Fund......
City of Tigard, Oregon Table of Contents, Continued
Page FINANCIAL SECTION, Continued: Other Supplementary Information, Continued: Other Schedules: Schedule of Property Tax Transactions and Outstanding Balances ...... 13 Schedule of Bond and Bond Interest Transactions ...... 13 Schedule of Future Debt Service Requirements of Long-term Notes Payable ...... 1 Schedule of Future Debt Service Requirements of Bancroft Improvement Bonds ...... 13 Schedule of Future Debt Service Requirements of General Obligation Bonds ...... 13
STATISTICAL SECTION: Net Assets by Component ...... 14 Changes in Net Assets ...... 14 Fund Balances of Governmental Funds ...... 1 ! " ########################################################################################################### Government – Wide Revenues ...... 15 Government – Wide Expenses by Function...... 15 General Governmental Revenues by Sources ...... 15 General Governmental Expenses by Function ...... 15 Market Value and Assessed Value of Taxable Property ...... 15 Property Tax Rates – Direct and Overlapping Governments ...... 15 Principal Property Taxpayers ...... 15 Property Tax Levies and Collections ...... 1 Special Assessment Collection ...... 1 Ratio of Annual Debt Service Expenditures for Long-Term Debt to Total Governmental Expenditures...... 1 Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt per Capita ...... 16 Computation of Direct and Overlapping General Obligation Debt ...... 16 Computation of Legal Debt Margin ...... 16 Ratio Debt by Type ...... 16 Demographics Statistics ...... 16 Principal Employers ...... 16 Property Value and Construction ...... 16 Full-time Equivalent City Government Employees by Function ...... 1 Operating Indicators by Function/Program ...... 1 Capital Assets Statistics by Function ...... 1
AUDIT COMMENTS AND DISCLOSURES REQUIRED BY STATE REGULATIONS:
Auditors’ Comments and Disclosures...... 1
INTRODUCTORY SECTION
1 2 Profile of the Government
The City of Tigard is located in southeast Washington County, 15 minutes from downtown Portland, Oregon and along major highways, Interstate 5 and Highway 217. The City is included in the Metro urban growth boundary and Tigard’s closest neighboring cities include Beaverton, Lake Oswego, Tualatin,
Durham, Portland, and King City. A state highway, 99W, runs north and south through the eastern portion of the City and is a major transportation corridor leading to the City of Portland. There is also a December 30, 2010 major greenway called Fanno Creek that connects neighborhoods to the natural environment and several of the City's parks. The incorporated area of the City represents 11.81 square miles and has a population of 47,595. The City has experienced a steady growth since its incorporation in 1961. Population increases Citizens of Tigard have varied from a yearly change of less than 1% to almost 50% since incorporation. It is projected that Honorable Mayor the City will have a population of close to 48,000 by 2011. The City can extend its corporate limits by Members of the City Council annexation which is permitted by state statute.
The City is governed by an elected Mayor and four council members who comprise the City Council. The It is our pleasure to submit to you the Comprehensive Annual Financial Report of the City of Tigard, City's Charter established the Mayor/Council form of government. Each member of the City Council is Oregon, for the fiscal year ended June 30, 2010. elected at-large to serve a four-year term. The Mayor presides at Council meetings and is elected at-large for a four-year term. The Mayor and Council provide community leadership, develop policies to guide the Oregon Revised Statutes (ORS) 297.425 requires that every municipal corporation publish within six City in delivering services and achieving community goals, and encourage citizen awareness and months of the close of each fiscal year a complete set of financial statements presented in conformity with involvement. accounting principles generally accepted in the United States of America (GAAP) and audited in accordance with auditing standards generally accepted in the United States of America by a firm of The City Council appoints a City Manager, who is the chief administrative officer of the City. The City licensed certified public accountants. Manager is responsible for ensuring Council policies are implemented using resources appropriated by the Council to achieve desired service results in the community. This report consists of management’s representations concerning the finances of the City. Consequently, management assumes full responsibility for the completeness and reliability of all of the information The City provides a full range of municipal services. These services include police, municipal court, presented in this report. To provide a reasonable basis for making these representations, management of community planning and development, parks, library, capital improvement planning, administration and the City has established a comprehensive internal control framework that is designed both to protect the central services, street maintenance, water, and other general public works activities. The City owns and City’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation maintains the wastewater and storm drainage system within the City limits under an agreement with Clean of the City's financial statements in conformity with GAAP. Because the cost of internal controls should Water Services. Fire protection is provided by Tualatin Valley Fire and Rescue. not outweigh their benefits, the City's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material The City maintains budgetary controls to ensure compliance with legal provisions in the annual misstatements. As management, we assert that, to the best of our knowledge and belief, this financial appropriated budget adopted by the City Council. Activities of all funds are included in the annual report is complete and reliable in all material respects. adopted budget. The level of budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount) is established by program within each individual fund. The City's financial statements were audited by Grove, Mueller & Swank, P.C., a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the As demonstrated by the statements and schedules included in the financial section of this report, the City financial statements of the City for the fiscal year ended June 30, 2010, are free of material misstatement. continues meeting its responsibility for sound financial management. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by the management; and evaluating the overall financial statement presentation. The independent Factors Affecting Financial Condition auditors concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the City's basic financial statements for the fiscal year ended June 30, 2010, are fairly The information presented in the financial statements is perhaps best understood when it is considered presented, in all material respects, in conformity with GAAP. The independent auditor's report is included from the broader perspective of the specific environment within which the City of Tigard operates. in the Financial Section of this report.
GAAP require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City's MD&A can be found immediately following the report of the independent auditors.
3 4 Local economy Ten Largest Employers (as of March 2010) The City's location in the Portland metropolitan area provides citizens with many diverse employment opportunities. Unemployment data is reported specifically for Tigard as well as Washington County and Employer Product or service Em ployment the Portland Metro area. HSBC Card Services Financial Services 948 Tigard - Tualatin School District Local school district 779
Macy's Retail department store 704 The chart below shows a six year comparison of unemployment rates for the state and local areas as well Nordstrom Retail department store 579 as the U.S. The City of Tigard has the lowest rates over the six year time period and the Portland Metro Oregon Public Employees Retirement Public retirement system 396 area and the State of Oregon have the highest rates. Although in the past year the rate for every category, Providence Health System Health care provider 377 except the U.S., decreased from the previous year due to the slow economic recovery in 2010. Costco Wholesale Corporation Box store 300 City of Tigard Local government 266 The Cheesecake Factory Food service 250 Home Depot Home imp rovement store 241 14.00% Long-term financial planning 12.00%
10.00% The City has developed a comprehensive long-term financial forecast every year since the 1980's. By Oregon forecasting and anticipating financial trends, the City can develop strategies to respond to emerging 8.00% US financial trends. The City forecasts operating fund revenues and expenditures over a five-year period. 6.00% Ptld Metro The forecast is adjusted as each year's final results are known and as budgets are prepared for the following year. In addition, the City also prepares a five-year Capital Improvement Program (CIP) that is also Wash Co. 4.00% updated every year. The CIP is developed through a process separate from, but parallel to the budget Tigard process. The impact on future operating and maintenance costs are projected from the CIP and then 2.00% incorporated in the long-term financial forecast.
0.00% 2005 2006 2007 2008 2009 2010 Relevant financial policies
The City of Tigard has an important responsibility to its citizens to carefully account for public funds, Wholesale trade, retail trade, and the service industry all play a large role in Tigard's economy. Retail trade manage municipal finances wisely, and plan adequate funding of services and facilities desired and needed has the most establishments; and the retail and service industries employ the most people. The City has by the public. within its boundaries one of the largest shopping malls in the region, Washington Square. The mall has five major department stores and more than 140 specialty shops. In 2005, Washington Square completed In support of this effort, the City has established a set of fiscal policies to ensure that the public’s trust is an 80,000 sq. ft. expansion that added an additional 28 specialty stores and restaurants. This expansion upheld. With such fiscal policies, the City has established the framework under which it will conduct its increased the size of the mall to over 1.3 million square feet. fiscal affairs, ensuring that it is and will continue to be capable of funding and providing outstanding local government services. Summary of Economic Data The goals of Tigard’s fiscal policies are: Number of Businesses, as of October 2010 3,355 Median Household Income (estimated 2008) $66,377 To enhance the City Council’s policy-making ability by providing accurate information on program and operating costs. Primary Economic Sector (receipts/sales) Wholesale Trade To assist sound management of the City government by providing accurate and timely information General Fund Permanent Tax Rate $2.51310 per $1000 on current and anticipated financial conditions. of assessed value Total Assessed Value (2010) $4,914,142,310 To provide sound principles to guide important decisions of the Council and management which have significant fiscal impact.
To set forth operational principles, which minimize the cost and financial risk of the City’s government consistent with services, desired by the public.
5 6 Although it will take time for tax revenues to accumulate under the tax increment financing process, it is anticipated that enough funding will be available for $22 million in public improvements for downtown. To employ revenue policies which prevent undue or unbalanced reliance on any one source, The implementation of all of the projects such as streets, parks, plazas, a public market and performing distribute the cost of municipal services fairly, and provide adequate funds to operate desired arts center will take up to 20 years to accomplish but that doesn’t mean citizens won’t see improvements in
programs. the near future. Design is continuing on street improvements, a downtown streetscape design, and other
improvements. Construction on a redesigned Burnham Street began shortly after the end of fiscal year To provide and maintain essential public facilities, utilities, infrastructure and capital equipment. 2009.
To protect and enhance the City’s credit rating. Awards and Acknowledgements
To insure that all surplus cash is prudently invested in accordance with the investment policy The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for adopted by the Council to protect City funds and realize a reasonable rate of return. Excellence in Financial Reporting to the City of Tigard for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2009. This was the 25th consecutive year that the City has Major initiatives received this esteemed award. In order to be awarded a Certificate of Achievement, the government published an easily readable and efficiently organized CAFR. This report satisfied both GAAP and The Tigard City Council meets at the beginning of each calendar year to establish goals. Council goals applicable legal requirements. comprise high-priority tasks or programs that the City Council intends to complete or initiate during the year, though attainment of these goals may take several years. The goals are based on the City’s Vision A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR Task Force goals, departmental needs, and City Council priorities. In the goal setting meeting, the City continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the Council reviews information and develops its annual and long-term goals. Council goals set the priorities GFOA to determine its eligibility for another certificate. for City government and are incorporated into departmental work plans. For 2010 Council established five goals for the City as follows: In addition, the City also received the GFOA's Distinguished Budget Presentation Award for its annual budget for fiscal year 2010-2011. This was the 23rd consecutive year that the City has received this 1. Implement Comprehensive Plan prestigious award. In order to qualify for the Distinguished Budget Presentation Award, the City's budget a. Complete the Transportation System Plan (TSP) and begin area plans (Tigard Triangle, 99W document was judged to be proficient in several categories, including as a policy document, a financial Corridor, etc.) plan, an operations guide, and a communications device. b. Update Tree Code to meet Comprehensive Plan c. Continue to promote and plan for light rail in 99W Corridor The preparation of this report was made possible by the dedicated service of the staff of the Financial and Information Services and our auditors. Each member of the Department has our sincere appreciation for 2. Implement Downtown Urban Renewal the contributions made in the preparation of this report. Special recognition should be given to the a. Initiate developer outreach/recruitment Financial Operations staff for their work in preparing this document. Credit also must be given to the b. Adopt Downtown Circulation Plan Mayor and City Council for their unfailing support for maintaining the highest standards of professionalism in the management of the City of Tigard's finances. 3. Strategize with Park and Recreation Advisory Board on a 2010 Parks Bond a. Decide whether to return to ballot and, if so, when b. Develop land acquisition strategies (potential options to purchase, etc.) Respectfully submitted,
4. Advance Methods of Communication a. External: Develop communication strategy and methods in support of City goals. b. Internal: Support staff efforts to change the organizational culture to create a proactive environment of exceptional people and service, promoting the values of “respect and care,” “get it done,” and “do the right thing” (Strategic Clarity).
Craig Prosser Toby LaFrance 5. Support 2010 Washington County Cooperative Library Services (WCCLS) and Washington City Manager Director of Financial and County Public Safety Levies Information Services
With the passage of Tigard’s Urban Renewal ballot measure, the City established a permanent funding base to implement the Tigard Downtown Improvement Plan. The formation of the Urban Renewal District sends a clear message that the City is now financially committed to carrying out its Downtown Plan and will be in a position to support investments there.
7 8 9 10 CITY OF TIGARD, OREGON
PRINCIPAL OFFICIALS AS OF JUNE 30, 2010
ELECTED OFFICIALS:
Name Term Expires
Mayor Craig Dirksen December 31, 2010
Councilor Nick Wilson December 31, 2012
Councilor Gretchen Buehner December 31, 2010
Councilor Marland Henderson December 31, 2012
Councilor Sydney Webb December 31, 2010
APPOINTED OFFICIALS:
Craig Prosser, City Manager
Toby LaFrance, Director of Finance and Information Services
All may be reached at:
13125 SW Hall Boulevard Tigard, OR 97223
LEGAL COUNSEL
Ramis, Crew, Corrigan & Bachrach 1727 NW Hoyt Street Portland, OR 97209
xiii
11 12
FINANCIAL SECTION
13 14 consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to 475 Cottage Street NE, Suite 200, Salem, Oregon 97301 express an opinion or provide any assurance. (503) 581-7788
INDEPENDENT AUDITOR’S REPORT Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s financial statements as a whole. The introductory, combining and individual fund financial statements, other financial schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual fund financial statements are the Honorable Mayor and Members of the City Council responsibility of management and were derived from and relate directly to the underlying accounting and other City of Tigard records used to prepare the financial statements. The information has been subjected to the auditing procedures 13125 SW Hall Boulevard applied in the audit of the financial statements and certain additional procedures, including comparing and Tigard, Oregon 97223 reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all We have audited the accompanying financial statements of the governmental activities, the business-type activities, material respects in relation to the financial statements as a whole. The introductory, other financial schedules, and each major fund, and the aggregate remaining fund information of the City of Tigard, Oregon as of and for the year statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial ended June 30, 2010, which collectively comprise the City’s basic financial statements as listed in the table of statements and, accordingly, we do not express an opinion or provide any assurance on them. contents. These financial statements are the responsibility of the City’s management. Our responsibility is to express opinions on these financial statements based on our audit. GROVE, MUELLER & SWANK, P.C. CERTIFIED PUBLIC ACCOUNTANTS We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. 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 By: examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit Charles A. Swank, A Shareholder also includes assessing the accounting principles used and significant estimates made by management, as well as December 30, 2010 evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Tigard, Oregon as of June 30, 2010, and the respective changes in financial position and, where applicable, its cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated December 30, 2010 on our consideration of the City’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.
Accounting principles generally accepted in the United States of America require that the management's discussion and analysis be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which
15 16 Management's Discussion and Analysis Overview of the Financial Statements
In addition to this discussion and analysis, the financial section of this annual report contains the basic As management of the City of Tigard, we offer readers this narrative overview and analysis of the financial financial statements, required supplementary information, and the combining statements of the non-major activities of the City of Tigard for the fiscal year ended June 30, 2010. It focuses on significant financial funds and schedules demonstrating legal compliance. issues, major financial activities, and resulting changes in financial positions, as well as economic factors affecting the City. This Management’s Discussion and Analysis (MD&A) is based on currently known The basic financial statements also include notes that explain the information in the financial statements facts, decisions, and conditions that existed as of the date of the independent auditors’ report. and provide more details. The statements are followed by the required supplementary information section that supports the information in the financial statements. We encourage readers to consider the information presented here in conjunction with the transmittal letter at the front of this report and the City’s financial statements which follow this discussion and analysis. Required Elements of the Comprehensive Annual Financial Report Financial Highlights MANAGEMENT'S DISCUSSION AND ANALYSIS The assets of the City exceeded its liabilities at the close of the most recent fiscal year by $285.9 million (net assets). Of this amount, $32.9 million (unrestricted net assets) may be used to meet the City’s FINANCIAL STATEMENTS ongoing obligations to citizens and creditors.
The City’s net assets decreased $2.0 million over the course of this year’s operations. Within this total Fund the net assets of our business-type activities decreased by $0.4 million or 0.4 percent, and net assets of Government-wide (full accrual) Governmental (modified accrual) Governmental Activities our governmental activities decreased by $1.6 million or 0.8 percent. Proprietary (full accrual) Business-type Activities Fiduciary (full accrual) During the fiscal year, the City generated $32.4 million in taxes, charges for services, and other revenues for governmental programs while incurring expenses from governmental activities totaling $35.3 million, for a decrease in net assets of $1.6 million. This includes $1.3 million of transfers into Notes to Basic Financial Statements governmental activities from business-type activities. REQUIRED SUPPLEMENTAL INFORMATION (other than MD&A) In the City’s business-type activities, revenues increased by about $0.3 million, while expenses increased by about $0.1 million. The City increased water rates by 7 percent, sewer rates by 5 percent OTHER SUPPLEMENTARY INFORMATION and storm water fees by 20 percent. The smaller than expected increase in revenues received from
customers is due primarily to a decrease in water consumption due to conservation and an increasing Government-wide Financial Statements number of vacant homes due to foreclosures.
The government-wide financial statements are designed to provide readers with a broad overview of the As of the close of fiscal year 2010, the City’s governmental funds reported combined ending fund City's finances, in a manner similar to a private-sector business. balances of $22.3 million, an increase of $2.8 million. This increase reflects bond proceeds of $7.25 million. Without the bond proceeds, the governmental funds would have decreased approximately The Statement of Net Assets presents information on all of the City’s assets and liabilities, with the
$4.5 million. This is primarily due to increasing expenses and flat revenues. difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. At the end of the fiscal year, unreserved fund balance for the General Fund was $7.3 million, a decrease of $0.4 million or a six percent decrease from the previous year. In anticipation of this The Statement of Activities presents information showing how the City's net assets changed during the decrease, the City has implemented cost-cutting measures, the most notable of which is decreasing most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to staff by approximately 15 full-time equivalency near the end of fiscal year 2010. the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in a future fiscal period. Examples The City’s total debt increased by $6.4 million during fiscal year 2010. This is due to the issuance of of such items include earned, but uncollected property taxes, and earned, but unused compensated $7.25 million in general obligation bonds to fund two street projects – the reconstruction of Burnham absences. Street and improvements to the Greenburg/Pacific Highway/Main Street intersection, offset by $0.75 million of normal annual debt service payments on the general obligation bonds, long-term notes, and Both of the government-wide financial statements distinguish functions of the City that are principally Bancroft improvement bonds. supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities).
17 18 The governmental activities of the City include the following: Proprietary funds are used to account for a government's business-type activities. The City maintains two different types of proprietary funds - enterprise funds and internal service funds. Enterprise funds are Community services, police, library, and social services used to report the same functions presented as business-type activities in the governmental-wide financial Public works, including parks and recreation statements. The City uses enterprise funds to account for its sanitary sewer, storm water, and water Community development, current and long-range planning operations. Internal service funds are an accounting device used to accumulate and allocate costs Policy and administration internally among the City's various functions. The City uses internal service funds to account for fleet maintenance, risk management, office services, finance and accounting, and other management services. The business-type activities of the City include the following: The City reports all three of the enterprise funds as major funds. These funds are the Sanitary Sewer Fund, the Storm Sewer Fund, (which consists of the budgetary Storm Sewer and the Water Sanitary sewer Quality/Quantity Funds), and the Water Fund, (which includes the budgetary Water, Water SDC, and Storm water Water CIP Funds). However, for budgetary and legal purposes these funds are accounted for separately. Water Conversely, all internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided as other The government-wide financial statements can be found on pages 35-36 of this report. supplementary information.
Fund Financial Statements are designed to display compliance with finance-related legal requirements The City also adopts an annual appropriated budget for all proprietary funds. To demonstrate compliance demonstrated by the use of fund accounting. A fund is a grouping of related accounts that is used to with the budget, budgetary comparison statements have been provided for the enterprise funds as other maintain control over resources that have been segregated for specific activities and objectives. The funds supplementary information on pages 1 -1 of this report. Budgetary comparisons for the internal of the City can be divided into the following categories: governmental funds, proprietary funds, and a service funds are provided on pages 1 -1 of this report. fiduciary fund. The proprietary fund financial statements can be found on pages - in the basic financial statements. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial Fiduciary funds are used to report assets held in a trustee or agency capacity for others and therefore statements, governmental fund financial statements focus on near-term inflows and outflows of available cannot be used to support the government's own programs. The City has a pension trust fund that resources, as well as on balances of available resources at the end of the fiscal year. Such information may accounts for employee defined contribution plans. The accounting used for the fiduciary fund is much be useful in evaluating a government's near-term financial capability. like that used for the proprietary funds.
Because the focus of governmental funds is narrower than that of the government-wide financial No budget is adopted for the fiduciary fund in accordance with Oregon Local Budget Law. statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing The fiduciary fund financial statements can be found on page 4 in the basic financial statements. so, readers may better understand the long-term impact of the City's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and Notes to the Basic Financial Statements provide additional information that is essential to a full changes in fund balance provide a reconciliation to facilitate this comparison between governmental funds understanding of the data provided in the government-wide and fund financial statements. The notes to and governmental activities. the financial statements can be found on pages 4 -6 of this report.
The City maintains 21 individual governmental funds. Information is presented separately in the The combining statements referred to earlier in connection with non-major governmental funds and governmental fund balance sheet and the statement of revenues, expenditures, and changes in fund business-type funds are presented immediately following the required supplementary information. balances for those funds that are considered significant (major) to the City taken as a whole. These Combining and individual fund statements and schedules can be found on pages 1-1 of this report. financial statements report five major funds: General Fund, Gas Tax Fund, City Gas Tax Fund, the Bancroft Debt Service Fund and the Tree Replacement Fund. Data from the other 14 governmental Government-wide Financial Analysis funds are combined into a single, aggregated presentation. Individual fund data for each of these non- major governmental funds is provided in the form of combining statements elsewhere in this report. Net assets: As noted earlier, net assets may serve over time as a useful indicator of the City's financial position. In the case of the City, assets exceeded liabilities by $285.9 million at June 30, 2010. The City adopts an annual appropriated budget for all of its governmental funds. A budgetary comparison statement has been provided for each fund individually to demonstrate compliance with their budgets. The largest portion of the City's net assets (86 percent) reflects its investment in capital assets (e.g., land, buildings, roads, sewers, storm water facilities, etc.) less any related debt used to acquire those assets that is The basic governmental fund financial statements can be found on pages 37-39 of this report. still outstanding. None of these capital assets, including the City infrastructure, are available for future spending. Although the City's investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since capital assets themselves cannot be used to liquidate these liabilities.
19 20 City of Tigard, Oregon City of Tigard, Oregon Net Assets as of Fiscal Year-end Changes in Net Assets (in millions) (in millions)
Governmental Business-type Governmental Business-type Activities Activities Total Activities Activities Total FY 09-10 FY 08-09 FY 09-10 FY 08-09 FY 09-10 FY 08-09 FY 09-10 FY 08-09 FY 09-10 FY 08-09 FY 09-10 FY 08-09
Assets Revenues Current and other assets $ 30.4 26.7$ 22.0$ 21.8$ 52.4$ $ 48.5 Program Revenues Net capital assets 192.5 190.3 73.7 71.6 266.2 261.9 Charges for services $ 3.6 4.0$ $ 10.8 10.3$ 14.4$ $ 14.3 Total assets 222.9 217.0 95.7 93.4 318.6 310.4 Capital grants and contributions 0.3 - 1.0 - 1.3 - Operating grants and contributions 0.2 0.2 - 0.8 0.2 1.0 Liabilities Total Program revenues 4.1 4.2 11.8 11.1 15.9 15.3 Other liabilities 5.5 4.4 4.5 1.8 10.0 6.2 Taxes 16.1 12.4 - - 16.1 12.4 Outstanding debt 19.8 13.4 2.9 2.9 22.7 16.3 Interest 0.3 0.9 0.1 0.6 0.4 1.5 Total liabilities 25.3 17.8 7.4 4.7 32.7 22.5 Other 11.9 13.6 0.2 0.1 12.1 13.7 Total General revenues 28.3 26.9 0.3 0.7 28.6 27.6 Net assets Total revenues 32.4 31.1 12.1 11.8 44.5 42.9 Invested in capital assets, net of related debt 175.2 179.6 70.9 68.7 246.1 248.3 Expenses Restricted 6.9 1.5 - 3.8 6.9 5.3 Community services 19.8 18.4 - - 19.8 18.4 Unrestricted 15.5 18.1 17.4 16.2 32.9 34.3 Public works 8.6 2.5 - - 8.6 2.5 Total net assets$ 197.6 199.2$ 88.3$ $ 88.7 $ 285.9 $ 287.9 Community development 4.9 7.2 - - 4.9 7.2 Policy and administration 1.5 6.0 - - 1.5 6.0 Interest on long-term debt 0.5 0.5 - - 0.5 0.5 The City's net assets decreased by $2.0 million during the fiscal year. This decrease is due to flat revenues Sewer - - 1.3 1.6 1.3 1.6 with increasing expenses. Storm water - - 2.0 1.9 2.0 1.9 Water - - 7.9 7.6 7.9 7.6 Total expenses 35.3 34.6 11.2 11.1 46.5 45.7 The revenues and expenses shown on the next table explain changes in net assets for fiscal year 2010. Transfers in (out) 1.3 - (1.3) - - -
Changes in net assets (1.6) (3.5) (0.4) 0.7 (2.0) (2.8)
Beginning net assets 199.2 202.7 88.7 88.0 287.9 290.7 Ending net assets $ 197.6 199.2$ $ 88.3 88.7$ $ 285.9 $ 287.9
Revenues – Governmental Activities
Property taxes continue to be a major source of revenue for the funding of City programs. Oregon voters passed Measure 50, a State constitutional amendment, which fundamentally changed property tax calculation and administration in Oregon in May 1997. Measure 50 converted operating property tax authority from a “levy-based” system to a “rate-based” system, and it became effective in FY 1997-98. The City’s tax base, which was $6,891,856 in FY 1997-98, was converted to a permanent tax rate of $2.5131 by the measure. The measure established FY 1997-98 assessed value at FY 1995-96 values less 10 percent.
21 22 The permanent rate is multiplied by the assessed value each year to arrive at the tax authority for that year. Assessed value growth is limited to 3 percent per year, plus a pro-rated share of new construction and Charges for services represent 90 percent of total revenues and are composed of fees that are charged to annexations. The City has seen significant growth in construction since then and the annexation of the all users for services provided such as water, sanitary sewer, and storm water. The sanitary and storm Walnut Island area which occurred in FY 1999-00. water fees are established by Clean Water Services (CWS) and are set by the agency each year. The City Council, through an intergovernmental agreement with other water system participants, sets the water Measure 50 did not change the basis for calculating General Obligation (GO) debt service levies. GO debt rates. service levies are calculated to produce enough tax revenues that (when combined with other resources such as interest earnings and fund balance) will be enough to pay debt service due on these voter approved The City is continuing to pursue efforts to secure a long-term water source to meet future demands over bonds. On May 21, 2002, voters approved a bond measure in the amount of $13.0 million for a new the next 50 years. In August 2009 the City entered into an intergovernmental agreement with the City of library. The City sold the bonds to the Oregon Economic and Community Development Department. Lake Oswego in which the City of Tigard will share the cost of upgrading and expanding Lake Oswego’s Taxes collected through the tax levy will repay this bonded debt. water treatment plant in return for a long-term water contract. Over the past seven years, the City Council has approved a yearly 7 percent water rate adjustment in anticipation of having to issue revenue bonds to Both other revenues and charges for services combined constitute 53 percent of total governmental finance capital projects associated with these potential water sources. The City will be conducting a water revenues. The primary sources include the following: rate study during fiscal year 201 . The City Council approved rate increases of 30.5 % on January 1, 2011, along with 14% increases on January 1, 2012, 2013, and 2014. Franchise fees are charged to public utilities for the use of the public right-of-way. Franchised activities paying the fee include electricity, natural gas, telecommunications, cable television, and Sanitary rates have been traditionally adjusted by CWS annually with the increase in revenues being solid waste haulers - $4,548,520. dedicated to debt service requirements for treatment plant expansions made by the agency.
Intergovernmental revenue is the other significant revenue category in other revenues and totals Storm water rates increased approximately 20% in fiscal year 2010 after not having been adjusted for $6,993,245. These revenue sources include state shared revenues such as cigarette tax, liquor tax, several years. and revenue sharing. In addition, this category also includes the City’s portion of the county-wide Hotel/Motel Tax and the WCCLS.
Charges for service includes a variety of land use planning and permit fees, library fines, and other miscellaneous types of fees and charges - $3,583,366. Governmental Activities Fiscal Year 2010 Revenues by Source Operating Grants $32,386,618 Charges for Service and Contributions $3,583,366 $199,506 11% <1%
Other $11,918,649 Capital Grants and 37% Contributions $305,398 1%
Interest $308,853 Taxes 1% $16,070,846 50%
23 24 Expenses - Business-type Activities Expenses - Governmental Activities The majority of the expenses (70 percent) relate to the drinking water service provider activity. The City Expenses related to governmental activities are shown in the chart below and are expressed as a percent of does not have its own water source, so it has to purchase water from other agencies. This water purchase total expenses for all governmental activities. expense is a major portion of the total water expenses. The water expense decreased slightly over last year due to a decrease in wages and benefits and material costs. The majority of the expenses (56 percent) relate to the City Library and Police Department within the Community services activity. Both the sanitary and storm water expenses increased only slightly from the previous fiscal year. Neither of these activities has experienced major growth or expansion of their respective systems, so expenses Overall, expenses in Governmental activities increased by $0.7 million over the previous fiscal year. The continue to increase only moderately due to increases in personal costs and material costs such as fuel. majority of this increase can be attributed to increases in salaries and benefits. Increases were largely offset by a reduction in staff that took place prior to the end of fiscal year 2010. Expenses by Service Type Fiscal Year 2010 Business-type Activities $11,321,325 Sewer $1,379,105 12%
Expenses by Service Type Fiscal Year 2010 Governmental Activities Storm water Policy and $35,303,972 Interest on long- $2,061,622 administration term debt 18% $1,511,956 $548,987 4% 2% Water $7,880,598 Community 70% development $4,846,494 14% Community services $19,832,642 56%
Public works $8,563,893 24% Financial Analysis of the City's Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
Governmental Funds
The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unreserved fund balance may serve as a useful measure of the City's net resources available for spending at the end of the fiscal year.
As of the end of the fiscal year 2010, the City's governmental funds reported combined ending fund balances of $22.3 million, an increase of $2.8 million in comparison with the prior year. The full amount of governmental fund balance is reported as unreserved and undesignated.
25 26 General Fund The unrestricted net assets of the business-type activities which include the Sanitary Sewer, Storm Sewer, and Water Funds at the end of the year amounted to $17.4 million. The total decrease in net assets for The General Fund is the chief operating fund of the City. At the end of the fiscal year 2010, the these funds was $0.4 million. unreserved fund balance was $7.3 million that can be used for funding of City programs. This was a decrease of $0.4 million. This decrease can be primarily attributed to the combined decrease in transfers The factors concerning the finances of the funds have already been addressed in the discussion of the in. City’s business-type activities.
Gas Tax Fund General Fund Budgetary Highlights
This fund records shared revenues from State and County taxes on sale and use of motor vehicle fuel. The City Council approved four budget amendments to the adopted General Fund budget. Total increase Funds are used for construction, reconstruction, improvement, repair, maintenance, operation, and use of in appropriations was $9,114,198. The changes are summarized as follows: public highways, roads, streets, and roadside rest areas. This revenue source can also be used for street lighting and cleaning, storm drainage, traffic control devices, and cost of administration. At the end of Increase of $86,099 in grant revenues for police services. fiscal year 2010, the fund balance was $4.4 million, an increase of $1.9 million. This increase includes Increase of $5,650,392 in various funds. The majority of this budget increase occurred in the $4.75 million of debt proceeds. The debt is being used to improve Burnham Street. Approximately $2.2 Water CIP Fund to recognize federal grants. million was spent on the Burnham Street project during fiscal year 2010, with another $4.2 million Increase of $127,797 in the Police, Library, and Public Works Departments to recognize various budgeted in fiscal year 2011. This project is expected to be completed in fiscal year 2011. grants. $3,250,000 increase in the City Gas Tax Fund to recognize bond proceeds. City Gas Tax Fund The overall change to the budget in the General Fund after these four amendments was less than one This fund records shared revenues from City taxes on sale and use of motor vehicle fuel. Funds are percent and had no significant affect on future services or liquidity. specifically pledged for the improvement of the Greenburg/Pacific Highway/Main Street intersection. At the end of fiscal year 2010, the fund balance was $2.4 million, an increase of $1.4 million. This increase The City underwent a significant reorganization in late summer and fall 2009. The reorganization came as includes $2.5 million of debt proceeds. Approximately $1.8 million was spent on the Greenburg/Pacific the result of a review of the City’s engineering division by an external company, FCS Group. In order to Highway/Main Street project during fiscal year 2010, with another $2.25 million budgeted in fiscal year make the City’s construction in progress process and engineering division more effective, FCS Group 2011. This project is expected to be completed in fiscal year 2011. came up with 20 recommendations for improvements. During spring and summer 2009, affected department directors and their assistants met to discuss actual implementation of the recommendations. Bancroft Debt Service Fund Key budgetary changes were:
The Bancroft Debt Service Fund accounts for the payment of Bancroft improvement bond principal and 1. Capital Construction and Transportation moved from being supervised by the Community interest. The sources of revenue are the collection of assessments against benefited property, interest, and Development Department (CD) to being supervised by Public Works (PW). This resulted in the contributions from other funds for their share of costs. Revenues may only be used for the retirement of majority of the City’s engineers and their support staff being moved to PW. debt. At the end of fiscal year 2010, the fund balance was $1.3 million, an increase of $0.2 million. This increase is considered insignificant. As assessment payments build up in the fund, that money is remitted 2. Finance and Information Services (FIS) became the department responsible for preparing the five- to the bank to pay the related bond principal and interest. year construction in progress document, which is updated annually. As part of that move, a senior management analyst moved from CD to FIS. Tree Replacement Fund This resulted in approximately $1.7 million in budgetary appropriations being moved from CD to PW, and The Tree Replacement Fund accounts for developer fees that are paid in lieu of planting trees in new $110,263 being moved from CD to FIS. This was only a transfer of appropriations between departments developments throughout the City. At the end of fiscal year 2010, the fund balance was $204,958, a and did not increase overall appropriations for the City. decrease of $88,823. This decrease is considered insignificant. This fund is a major fund because of the large liability of customer deposits. Staff is monitoring these customer deposits and expects a significant The City budgeted the General Fund with the anticipation that ending fund balance would decrease by amount to become revenue over the next few years as developers fail to improve property that is slated for approximately $5.2 million. Actual results decreased fund balance by about $0.4 million. This difference development. was caused by revenues coming in slightly higher than budget and expenditures that were $3.1 million lower than budget. Proprietary Funds For expenditures, the variance was primarily due to a conservative approach to the budget and about $750 thousand of contingency that was budgeted but not needed. The City's proprietary funds include the Sanitary Sewer, Storm Sewer, Water, and Internal Services Funds.
27 28 and Community Development Department (OECDD). This loan was secured by current and future park system development charges collected by the City. The business-type activity debt is a draw against a line of credit for water system improvements. The amount outstanding is $2.9 million. The total available is $6.0 million. Principal payments are not required under the credit agreement until 2012. The City intends to issue revenue bonds to pay off the line of credit. The most recent bond rating occurred in 1993 and the rating given by Moody’s was A1. Existing debt ! levels have no direct impact on current or future City operations. " ## $ # #%# #& & # # # % # The State of Oregon limits the amount of general obligation debt that cities can issue to 3 percent of the #'( #))' real market value of all taxable property within the City limits. The City’s total outstanding general ' ' # ## obligation debt is significantly below the 3 percent limit of $244.9 million. Additional information on the City's debt can be found on pages - of this report. % ) * + City of Tigard, Oregon " # # $ , ## & # Outstanding Debt at Fiscal Year-end # ' # #' (in millions) % ) ' #- S ' Total ( ) *+ ) Totals Percentage FY 09-10 FY 08-09 Change ,- ( . Governmental: , . General obligation$ 16.7 10.0$ 67.0% Local improvement 1.2 1.3 -7.7% Long-term note 0.5 0.8 -37.5% Total outstanding debt $ 18.4 $ 12.1 52.1% / # + * 0 1 1 1 1 1 Business-type: + 1 + 0 * ! ! Line of credit $ 2.9 $ 2.9 % 2# #%# 0 ! * 1 1 * + 1 / # 1 ! ) ) 1 ! 3' ) ) ! ! 0 ! ! 0 Economic Factors
3# ) ) The unemployment rate for the Washington County area was 9.0 percent at the end of the fiscal year, June 4 ) ) * 0 * 0 30, 2010. This is a slight decrease from the same period last year, when the rate was 9.7 percent. The rate 5 #& + 1 1 0 is still below the national average of 10.1 percent for June 2010. 6 #( + ! 1 , !! !* ) ) !! !* The City of Tigard issues licenses for businesses operating within the City limits. As of June 30, 2010, $ !"# "%$ &%" $$ & "' $ !''"% $!' " there were 3,355 businesses licensed in the City. The U.S. Economic Census, which takes place every five years, provides data on industry sales within the City. Wholesale trade is generating the most dollars in 6## % # !!)!* shipments, sales, and receipts. Retail trade employed the most people, and also ranks second in the amount of dollars generated. + ) Almost 70 percent of land within the City is planned to accommodate residential use, ranging from low 6 ) # # #% # ' # density single family homes to high density multi-family dwellings. The City tracks buildable lands through % ) #% # % % # " 0 * $ #% a yearly inventory process. At the end of 2007, less than 10 percent of land within the City was considered S - # % # " $ #% buildable. Residential home construction, which includes free standing and attached, hit a high of 576 ' ' # " ! *+$7 8 units in 2001 and dipped to a low of 42 in 2009, reflecting the fact that all construction declined significantly in 2009. Residential construction valuation dropped from about $67.8 million in 2007-08 to
29 30 $31.8 million in 2008-09. Total housing units added in the City during 2008-09 totaled 42, down from 93 in 2007-08 and 231 in 2006-07.
The City of Tigard has developed a comprehensive long-term financial forecast every year since the 1980’s. This forecast allows the City to project expected revenues and expenditures for each of its funds to help anticipate financial requirements.
The comprehensive long-term financial forecast continues to be central to Tigard's financial management strategy. By forecasting and anticipating financial trends, Tigard can develop strategies to respond to these emerging financial trends.
The current forecast shows that in the short-term the City’s financial condition is stable in most funds. The FY 2009-10 budget continued addressing a projected General Fund deficit that had been forecasted to occur earlier than what is now projected. By including a utility franchise fee, the City can delay the deficit by one year. This revenue source would continue to create a more stable financial condition over time, although more substantive options might need to be considered in the future.
More adjustments were made to the forecast model during with the FY 2010-11 budget taking into account the City never spends 100% of its appropriations. Also there are forecasted positions (FTE’s) which may not be needed to maintain the level of service proposed in the forecast. The City will carefully weigh the long-term effect these options may have before approving them.
The City will also need to establish sound financing for the capital improvement program that is needed in order to maintain and improve the City’s infrastructure. A Downtown Revitalization Plan was adopted by the City Council and recommended the creation of an Urban Renewal District. The creation of the district and use of tax increment financing was approved by the voters in May 2006. The City will still need to fund some catalyst projects that are identified in the Plan and financing of these projects will need to come from other sources. The voters in Washington County and the City of Tigard just recently approved an operational tax levy throughout the County that will help in sustaining the operation of the City’s library.
Requests for Information
This financial report is designed to provide a general overview of the City of Tigard's finances for all those with an interest in the City's finances. Questions concerning any of the information provided in the report or requests for additional financial information should be addressed to the Financial and Information Services Director, City of Tigard, 13125 SW Hall Blvd., Tigard, Oregon 97223.
31 32
BASIC FINANCIAL STATEMENTS
33 34 The accompanying notesarean The accompanying Functions/Programs June 30,2010 STATEMENT OF ACTIVITIES OFTIGARD, OREGONCITY Total 46,625,297 Business-type activities: Business-type Governmental activities: Total business-type activities Totalbusiness-type Water Storm water Public works Interest onlong-term debt Policy andadministration Community development Sewer Totalgovernmentalactivities / + / 0*+01+- Community services 2 131- +-1 221 2 5 % *!
of part theba integral
221 2 # 0*0 0 +1!+01 1! *!* 6 % 00! 0 1*0 0* ! 1 sic financial statements. Transfers between Governmentalan Transfers between Net assets--ending Net assets--beginning assets innet Change revenues Totalgeneral Miscellaneous Interest earnings revenues Unrestricted intergovernmental Franchise taxes taxes, service forProperty levied debt purposes taxes,for general levied Property General Revenues:
$
9 - % !* + ) !* + $ 6 % 0*+ 0 ) 0*+ 0 Expenses 9#- 1 0 ) 1 0 11,321,325 19,832,642 35,303,972 7,880,598 1,379,105 2,061,622 1,511,956 8,563,893 4,846,494
, 0* !10 0 0 548,987 : / # # 0+ !* 0* 1* !!*
$ $
7 " ## $ *!0+ + 0 +1 0*0 ! Charges Services d Business-type Activities Business-type d 14,408,876 10,825,510 for 7,834,978 1,872,545 1,751,341 1,490,701 1,117,987 3,583,366 232,384 6 ++0 !* 0+ +0 108,940
4/ /4/ /12 -
$ $
6 % ##% 010 1 111 001 **0 ++ Program RevenuesProgram Contributions
# ++ 101* 1!*1 and Grants Operating 6# % 0 0 ) 0 0 199,506 199,506 ; % : 199,506 <' : - - - - - ; % ! ! ) ! ! - - -
- - $ $
2 # % *0+ ) *0+ Contributions
6# #% 1 !!1+ 0 0* and Grants 3 % ###% Capital 1,327,443 1,022,045 972,528 199,284 106,114 ' +10 ) +10 305,398 19,803 29,714 < : - - ; % * ! ) * ! - / # ) +!+0+ +!+0+ 2 # % !! !! $
(169,274) (231,404)
$
6# #% +*+ +1*+ !0!!0 oenetlBusiness-type Governmental
3 % ###% Activities 197,575,662 199,216,216 (31,215,702) (19,400,752) (31,215,702) 28,298,348 14,789,719 (6,613,268) (3,249,679) (1,640,554) (1,403,016) 6,993,245 4,548,520 1,281,127 ' 0 ) 0 1,276,800 (548,987) 376,884 308,853 Net (Expense) Revenue and
/% !* ! *1 ! * +* - - Changes in NetAssets Primary Government Primary
$
(169,274) (231,404)
(19,400,752) $
(31,215,702)
-1 221 2 Activities 88,313,687 88,706,530 (1,276,800) (392,843) 926,908 357,727 204,427 153,300 526,230 , # ##% 0!**! 0 * 1 110 0* **+ 526,230 = #: ------> 1 1! 0! ) 1 1! 0! - - -
$ $
$ $
<% * 1* ) * 1* ? # 1 *+++ ** 1 1 285,889,349 287,922,746 (30,689,471) Total 28,656,075 14,789,719 (2,033,396) (1,403,016) (6,613,268) (3,249,679) 6,993,245 4,548,520 1,281,127 (548,987) 926,908 581,311 462,153 526,230 ;6 *!*!00 ++ 0+* +!++ 1 - %
35 36 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON GOVERNMENTAL FUNDS GOVERNMENTAL FUNDS BALANCE SHEET STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE June 30, 2010 For the fiscal year ended June 30, 2010 Bancroft City Tree Other Total General Gas Tax Debt Service Gas Tax Replacement Governmental Governmental Fund Fund Fund Fund Fund Funds Funds ASSETS Bancroft City Tree Other Total Cash and investments $ 7,636,473 $ 5,226,660 $ 1,337,714 $ 2,981,243 $ 1,373,824 $ 6,595,038 25,150,952 General Gas Tax Debt Service Gas Tax Replacement Governmental Governmental Accounts receivable 948,853 397,048 - 126,707 - 171,712 1,644,320 Property taxes receivable 543,814 - - - - 28,484 572,298 Fund Fund Fund Fund Fund Funds Funds Assessment liens receivable - - 894,540 - - 173,276 1,067,816 REVENUES Prepaid expense 273,726 - - - - - 273,726 Taxes $ 11,935,841 $ 2,150,981 $ - $ 685,885 $ - $ 1,306,081 $ 16,078,788 Total assets $ 9,402,866 $ 5,623,708 $ 2,232,254 $ 3,107,950 $ 1,373,824 $ 6,968,510 $ 28,709,112 Franchise fees 4,548,520 - - - - - 4,548,520 Special assessments - - 284,202 - - - 284,202 LIABILITIES Licenses and permits - - - - - 1,229,880 1,229,880 Accounts payable and accrued liabilities $ 1,468,864 $ 595,021 $ - 678,058$ $ 12,979 $ 125,838 $ 2,880,760 Intergovernmental revenues 5,819,081 344,792 - - - 194,520 6,358,393 Customer deposits 139,225 594,759 - - 1,155,887 22,835 1,912,706 Charges for services 1,286,411 2,746 - - 71,946 1,721,984 3,083,087 Due to others - - - - - 75,395 75,395 Fines and forfeitures 915,524 - - - - - 915,524 Deferred revenues: - Interest earnings 88,889 24,234 114,570 3,910 10,437 58,086 300,126 Property taxes 405,747 - - - - 10,342 416,089 Miscellaneous 210,996 - - - - 38,184 249,180 Grants 47,778 - - - - - 47,778 Assessment liens - - 894,540 - - 173,278 1,067,818 Total revenues 24,805,262 2,522,753 398,772 689,795 82,383 4,548,735 33,047,700 Total liabilities 2,061,614 1,189,780 894,540 678,058 1,168,866 407,688 6,400,546
FUND BALANCES EXPENDITURES Reserved for: Current operating: Prepaid expense 273,726 - - - - - 273,726 Community services 18,870,804 547,694 - - - - 19,418,498 Unreserved, undesignated, reported in: Public works 5,129,767 - - - - - 5,129,767 General Fund 7,067,526 - - - - - 7,067,526 Community development 3,555,391 - - - - 1,118,617 4,674,008 Special revenue funds - 4,433,928 - 2,429,892 204,958 1,026,024 8,094,802 Policy and administration 787,209 - - - - - 787,209 Capital projects funds - - - - - 4,945,265 4,945,265 Debt service: Debt service funds - - 1,337,714 - - 589,533 1,927,247 Principal - - 74,400 - - 801,113 875,513 Total fund balances 7,341,252 4,433,928 1,337,714 2,429,892 204,958 6,560,822 22,308,566 Interest - - 101,358 - - 455,703 557,061 Capital outlay 292,221 2,854,189 - 1,836,421 96,206 2,294,006 7,373,043 Total liabilities and fund balances $ 9,402,866 $ 5,623,708 $ 2,232,254 $ 3,107,950 $ 1,373,824 $ 6,968,510 Total expenditures 28,635,392 3,401,883 175,758 1,836,421 96,206 4,669,439 38,815,099 Amounts reported for governmental activities in the Statement Excess (deficiency) of revenues of Net Assets are different because: over (under) expenditures (3,830,130) (879,130) 223,014 (1,146,626) (13,823) (120,704) (5,767,399) Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds, net OTHER FINANCING SOURCES (USES) of accumulated depreciation of $67,517,627. 192,471,440 * +" - 4,750,000 - 2,500,000 - - 7,250,000 Other long-term assets are not available to pay for current-period Transfers in 4,058,709 - - - - 906,301 4,965,010 expenditures and, therefore are deferred in the funds: Transfers out (645,643) (1,944,920) - - (75,000) (1,022,647) (3,688,210) Assessment liens 1,067,818 Property taxes earned but not available 416,089 Total other financing sources (uses) 3,413,066 2,805,080 - 2,500,000 (75,000) (116,346) 8,526,800 Grants earned but not available 47,778 Net change in fund balances (417,064) 1,925,950 223,014 1,353,374 (88,823) (237,050) 2,759,401 Internal service funds are used by management to charge the cost of administrative functions as well as fleet and property Fund balances - beginning of year 7,758,316 2,507,977 1,114,700 1,076,518 293,781 6,797,871 19,549,163 management to individual funds. A portion of the assets and liabilities of the internal service funds are included in Fund balances - end of year $ 7,341,252 $ 4,433,927 $ 1,337,714 $ 2,429,892 $ 204,958 $ 6,560,821 $ 22,308,564 governmental activities in the statement of activities. 1,319,196
Accrued compensated absences are not due and payable in the current period and therefore are not reported in the funds. (1,352,311) The accompanying notes are an integral part of the basic financial statements. Long-term liabilities - not reported in the funds: Bonds, notes payable and other liabilities, not due and payable in current period (18,441,808) Accrued interest payable, not due and payable in the current period (261,106)
Net Assets of Governmental Activities $ 197,575,662
The accompanying notes are an integral part of the basic financial statements.
37 38 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND PROPRIETARY FUNDS BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES STATEMENT OF NET ASSETS June 30, 2010 For the fiscal year ended June 30, 2010
Business-type Activities Governmental Enterprise Funds Activities
Net change in fund balances--total governmental funds $ 2,759,401 Internal Amounts reported for governmental activities in the Sanitary Storm Service Statement of Activities are different because: Sewer Sewer Water Totals Funds ASSETS Governmental funds report capital outlays as expenditures Current assets: Cash and investments $ 8,797,312 $ 2,209,523 $ 7,399,029 $ 18,405,864 $ 1,618,975 while governmental activities report depreciation expense to Accounts receivable 1,299,942 366,787 1,810,238 3,476,967 20,944 allocate those expenditures over the life of the assets. This is Prepaid expenses - - - - 50,470 the amount by which capital outlay exceeded depreciation Inventory - - 50,463 50,463 12,673 in the current period. Total current assets 10,097,254 2,576,310 9,259,730 21,933,294 1,703,062 Expenditures for capital assets 6,940,040 Less current year depreciation (4,239,120) 2,700,920 Noncurrent assets: Capital assets: In the Statement of Activities, the loss on the disposition Land and construction in process 901,483 - 11,770,989 12,672,472 - of capital assets is reported. The loss is not a use of Other capital assets (net of accumulated depreciation) 15,577,154 11,470,497 34,076,191 61,123,842 - current resources and thus is not reported in the funds. (602,893) Total noncurrent assets 16,478,637 11,470,497 45,847,180 73,796,314 -
Revenues in the Statement of Activities that do not Total assets 26,575,891 14,046,807 55,106,910 95,729,608 1,703,062 provide current financial resources are not reported as revenues in the funds. LIABILITIES Property taxes (7,942) Current liabilities: Assessment liens (286,014) Accounts payable and accrued liabilities 1,463,005 179,351 2,799,308 4,441,664 383,865 Grants 47,778 (246,178) Customer deposits - 4,754 41,719 46,473 - Accrued compensated absences 11,576 14,458 29,404 55,438 192,571 Repayment of bond principal is an expenditure in the Total current liabilities 1,474,581 198,563 2,870,431 4,543,575 576,436 governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Assets. Noncurrent liabilities: by which proceeds exceeded repayments. Accrued compensated absences 3,858 4,819 9,801 18,478 64,190 Bond and loan proceeds (7,250,000) Long-term debt - - 2,853,868 2,853,868 - Principal payments 875,513 (6,374,487) Total noncurrent liabilities 3,858 4,819 2,863,669 2,872,346 64,190
Total liabilities 1,478,439 203,382 5,734,100 7,415,921 640,626 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 NET ASSETS governmental funds. Invested in capital assets, net of related debt 16,478,637 11,470,497 42,993,312 70,942,446 - Compensated absences (73,380) Unrestricted 8,618,815 2,372,928 6,379,498 17,371,241 1,062,436 Accrued interest on debt 8,074 (65,306) Total net assets $ 25,097,452 $ 13,843,425 $ 49,372,810 $ 88,313,687 $ 1,062,436 Internal service funds are used by management to charge the cost of administrative functions as well as fleet and property management to individual funds. The net revenue of a portion of internal service funds is reported with governmental activities. Change in Net Assets - Internal Service Funds = The accompanying notes are an integral part of the basic financial statements.
Change in Net Assets of Governmental Activities $ (1, , )
The accompanying notes are an integral part of the basic financial statements.
39 40 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON PROPRIETARY FUNDS PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS STATEMENT OF CASH FLOWS For the fiscal year ended June 30, 2010 For the fiscal year ended June 30, 2010
Governmental Business-type Activities Governmental Business-type Activities - Enterprise Funds Activities Enterprise Funds Activities Sanitary Storm Internal Sewer Sewer Water Totals Service Funds
Internal CASH FLOWS FROM OPERATING ACTIVITIES Sanitary Storm Service Receipts from customers $ 1,085,844 $ 1,823,327 $ 7,394,393 $ 10,303,564 $ 7,628,416 Sewer Sewer Water Totals Funds Payments to suppliers (156,366) (1,026,804) (2,862,091) (4,045,261) (3,187,997) Payments to employees (183,161) (558,458) (1,390,026) (2,131,645) (4,307,663) OPERATING REVENUES Other receipts - - 204,427 204,427 127,704 Net cash provided (used) by operating activities 746,317 238,065 3,346,703 4,331,085 260,460 Charges for services $ 1,117,987 $ 1,872,545 $ 7,834,978 $ 10,825,510 $ 7,632,031 Miscellaneous - - 204,427 204,427 127,704 CASH FLOWS FROM CAPITAL AND RELATED Total operating revenues 1,117,987 1,872,545 8,039,405 11,029,937 7,759,735 FINANCING ACTIVITIES System development revenue 29,714 19,803 311,796 361,313 - Interest expense - - (60,190) (60,190) - OPERATING EXPENSES Grant proceeds - - 660,732 660,732 - Transfers to other funds (392,342) (441,512) (654,531) (1,488,385) - Salaries and wages 385,904 560,620 1,368,936 2,315,460 4,307,663 Proceeds from other funds - - 211,585 211,585 - Contracted services 5,745 321,490 3,109,701 3,436,936 1,588,617 Acquisition of capital assets (1,026,362) (19,080) (3,575,890) (4,621,332) - General, administrative and other 366,195 755,117 1,969,978 3,091,290 1,628,050 Net cash (used) by capital and related Depreciation 621,261 424,395 1,371,793 2,417,449 - financing activities (1,388,990) (440,789) (3,106,498) (4,936,277) - Total operating expenses 1,379,105 2,061,622 7,820,408 11,261,135 7,524,330 CASH FLOWS FROM INVESTING ACTIVITIES Operating income (loss) (261,118) (189,077) 218,997 (231,198) 235,405 Interest earnings 67,432 17,775 53,072 138,279 8,727 Net increase (decrease) in cash and cash equivalents (575,241) (184,949) 293,277 (466,913) 269,187
Cash and investments--beginning of the year 9,372,553 2,394,472 7,105,751 18,872,776 1,349,789 NONOPERATING REVENUES (EXPENSES) Investment revenue 67,432 17,775 53,072 138,279 8,727 Cash and investments--end of the year $ 8,797,312 $ 2,209,523 $ 7,399,028 $ 18,405,863 $ 1,618,976 Interest expense - - (60,190) (60,190) - Federal grant revenues - - 660,732 660,732 - RECONCILIATION OF OPERATING INCOME (LOSS) TO System development revenue 29,714 19,803 311,796 361,313 - NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income (loss) $ (261,118) $ (189,077) $ 218,997 $ (231,198) $ 235,405 Adjustments to reconcile operating income to net cash Total non-operating revenue 97,146 37,578 965,410 1,100,134 8,727 provided by operating activities: Cash flows reported in other categories: Net income before contributions (loss) (163,972) (151,499) 1,184,407 868,936 244,132 Depreciation expense 621,261 424,395 1,371,793 2,417,449 - Change in assets and liabilities: Transfers in - - 211,585 211,585 - Receivables (32,143) (49,218) (442,703) (524,064) (3,886) Transfers out (392,342) (441,512) (654,531) (1,488,385) - Prepaid expenses - - - - 45,934 Inventory - - (44,384) (44,384) 1,461 Accounts payable and accrued liabilities 415,574 49,803 2,261,972 2,727,349 (18,454) Change in net assets (556,314) (593,011) 741,461 (407,864) 244,132 Accrued compensated absences 3,801 2,162 (21,090) (15,127) - Unearned revenue (1,058) - - (1,058) - Net assets--beginning of year 25,653,766 14,436,436 48,631,349 88,721,551 818,304 Customer deposits - - 2,118 2,118 - Net assets--end of year $ 25,097,452 $ 13,843,425 $ 49,372,810 $ 88,313,687 $ 1,062,436 Net cash provided (used) by operating activities $ 746,317 $ 238,065 $ 3,346,703 $ 4,331,085 $ 260,460
The accompanying notes are an integral part of the basic financial statements. The accompanying notes are an integral part of the basic financial statements.
41 42
CITY OF TIGARD, OREGON
STATEMENT OF PLAN NET ASSETS PENSION TRUST FUND June 30, 2010
Assets Cash and cash equivalents $ 5,501,176 Corporate bonds 489,369 Corporate stocks > 8,912,829 Total assets 14,903,374
Net assets held in trust for pension benefits $ 14,903,374
STATEMENT OF CHANGES IN PLAN NET ASSETS PENSION TRUST FUND For the fiscal year ended June 30, 2010
Additions: Contributions - employer $ 1,223,697 Contributions - employee 32,283 Investment income 1,333,733
Total additions 2,589,713
Deductions: Benefit payments and withdrawals 349,210
* in net assets 2,240,503
Net assets held in trust for pension benefits Beginning of year 12,662,871
End of year $ 14,903,374
The accompanying notes are an integral part of the basic financial statements.
43 44
Notes to Basic Financial Statements
45 46
1. Summary of Significant Accounting Policies: 1. Summary of Significant Accounting Policies Continued:
The City of Tigard, under its Charter of 1961, is governed by an elected mayor and four council clearly identifiable with a specific function or segment. Program revenues include 1) charges to members who comprise the City Council. The City Council appoints a City Manager, who acts customers or applicants who purchase, use, or directly benefit from goods, services or as the administrative head of government for the City. privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. In accordance with GASB Statement No. 14, The Financial Reporting Entity, the activities of Indirect expenses are recovered through internal service fund charges. These indirect expenses the Tigard Urban Renewal Agency (the Agency) are included in the City’s financial statements as are allocated based on a full-cost approach, thereby allocating indirect expenses among functions a blended component unit. The Agency is a legally separate entity, which is governed by a board with the objective of allocating all expenses. Taxes and other items not properly included comprised of the City Council, as stipulated in the bylaws. The Council has the ability to impose among program revenues are reported instead as general revenues. its will on the Agency as determined on the basis of budget adoption, taxing authority, and funding. The purpose of the Agency is to undertake urban renewal projects and activities Separate financial statements are provided for governmental funds, proprietary funds, and the pursuant to the City’s downtown redevelopment plan. The financial results of the Agency are pension trust fund, even though the pension trust fund is excluded from the government-wide reported herein as a debt service fund and a capital projects fund. The Agency also prepares a financial statements. Major individual governmental funds and major individual enterprise funds separate component unit financial report that may be obtained from the Agency’s administrative are reported as separate columns in the fund financial statements. offices at 13125 SW Hall Blvd., Tigard, Oregon 97223. Fund financial statements display information at the individual fund level. Each fund is The financial statements of the City have been prepared in accordance with accounting considered to be a separate accounting entity. Funds are classified and summarized as principles generally accepted in the United States of America (GAAP). GAAP statements governmental, proprietary, or fiduciary. include all relevant GASB pronouncements. For purposes of the government-wide and proprietary fund financial statements, the City has elected not to apply private-sector standards Currently, the City has governmental, proprietary, and fiduciary fund types. Non-major funds of accounting and financial reporting issued after November 30, 1989, unless specifically are combined into a single column in the basic financial statements and are detailed in the adopted by GASB pronouncements. The City applies the provisions of all applicable GASB supplemental information. Statements that define requirements and the reporting model for the annual financial reports of state and local governments. The City has recorded capital and certain other long-term assets Basis of Presentation and liabilities in the statement of net assets, reported all revenues and the cost of providing services under the accrual basis of accounting in the statement of activities, and uses the direct The financial transactions of the City are recorded in individual funds. Each fund is accounted method of reporting cash flows. for by providing a separate set of self-balancing accounts that comprises its assets, liabilities, fund equity, revenues and expenditures/expenses. Basic Financial Statements Professional standards set forth minimum criteria (percentage of the assets, liabilities, revenues Basic financial statements are presented at both the government-wide and fund financial level. or expenditures/expenses or either fund category or the governmental and enterprise combined) Both levels of statements categorize activities as either governmental or business-type. for the determination of major funds. The City electively added funds as major funds, which Governmental activities, which are normally supported by taxes and intergovernmental either had debt outstanding or specific community focus. Non-major funds are combined in a revenues, are reported separately from business-type activities, which rely to a significant extent column in the fund financial statements and detailed elsewhere in the financial report. on fees and charges for support. Measurement Focus and Basis of Accounting Government-wide financial statements display information about the City as a whole. For the most part, the effect of interfund activity has been removed from these statements. Interfund Measurement focus is a term used to describe which transactions are recorded within the various services provided by one fund and charged to another have been eliminated in the Statement of financial statements. Basis of accounting refers to when transactions are recorded regardless of Activities. These statements focus on the sustainability of the City as an entity and the change in the measurement focus. aggregate financial position resulting from the activities of the fiscal year. These aggregated statements consist of the Statement of Net Assets and the Statement of Activities. The government-wide, proprietary fund and fiduciary fund financial statements are presented on a full accrual basis of accounting with an economic resource measurement focus. An economic The Statement of Activities demonstrates the degree to which the direct expenses of a given resource focus concentrates on an entity or fund’s net assets. All transactions and events that function or segment is offset by program revenues. Direct expenses are those that are affect the total economic resources (net assets) during the
47 48
1. Summary of Significant Accounting Policies Continued: 1. Summary of Significant Accounting Policies Continued:
period are reported. An economic resources measurement focus is inextricably connected with related accrued liability for long-term portions of debt and compensated absences must be full accrual accounting. Under the full accrual basis of accounting, revenues are recorded when included. Since the governmental fund statements are presented on a different measurement earned and expenses are recorded at the time liabilities are incurred, regardless of the timing of focus and basis of accounting than the government-wide statements’ governmental column, a related cash inflows and outflows. reconciliation is necessary to explain the adjustments needed to transform the fund based financial statements into the governmental column of the government-wide presentation. This Governmental funds financial statements are presented on a modified accrual basis of reconciliation is part of the basic financial statements. accounting with a current financial resource measurement focus. This measurement focus concentrates on the fund’s resources available for spending currently or in the near future. Only Amounts reported as program revenues include 1) charges to customers or applicants for goods, transactions and events affecting the fund’s current financial resources during the period are services, or privileges provided, 2) operating grants and contributions and 3) capital grants and reported. contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Similar to the connection between an economic resource measurement focus and full accrual accounting, a current financial resource measurement focus is inseparable from a modified Proprietary funds distinguish operating revenues and expenses from non-operating items. accrual basis of accounting. Under modified accrual accounting, revenues are recognized as Operating revenues and expenses generally result from providing services, and producing and soon as they are both measurable and available. Revenues are considered to be available when delivering goods in connection with a proprietary fund’s principal ongoing operations. The they are collectible within the current period or soon enough thereafter to pay liabilities of the principal operating revenues of the City’s Sanitary Sewer, Storm Sewer and Water Funds are current period. For this purpose, the City considers revenues to be available if they are collected charges to customers for sales and services. The Sanitary Sewer, Storm Sewer and Water Funds within 60 days of the end of the current fiscal year. Expenditures generally are recorded when a also recognize fees intended to recover the cost of connecting new customers to the City’s utility liability is incurred, as under accrual accounting. Property taxes, intergovernmental and interest systems as operating revenues. Operating expenses for enterprise funds include the cost of sales associated with the current fiscal period are all considered to be susceptible to accrual and so and services, administrative expenses and overheads, and depreciation on capital assets. All have been recognized as revenues of the current fiscal period. Only the portion of special revenues and expenses not meeting this definition are reported as non-operating revenues and assessments receivable due within the current fiscal period is considered susceptible to accrual as expenses. revenue of the current period. All other revenues are considered to be measurable and available only when cash is received by the City. The fiduciary fund accounts for the resources held by the City in a custodial capacity, on behalf of the employees of the City. A deferred revenue liability arises in the governmental funds balance sheet when potential revenue does not meet both the measurable and available criteria for recognition in the current When both restricted and unrestricted resources are available for use, it is the City’s policy to use year. This unavailable deferred revenue consists primarily of uncollected property restricted resources first, then unrestricted resources as they are needed. taxes and assessments not deemed available to finance operation of the current period. In the government-wide Statement of Activities, with a full accrual basis of accounting, revenue must Assets, Liabilities, and Equity be recognized as soon as it is earned regardless of its availability. Receivables and Payables Thus, the liability created on the governmental fund balance sheet for unavailable deferred revenue is eliminated. Note that deferred revenues also arise outside the scope of measurement Property taxes are levied and become a lien on July 1. Collection dates are November 15, focus and basis of accounting, such as when the City receives resources before it has a legal February 15, and May 15 following the lien date. Discounts are allowed if the amount due is claim to them. For instance, when grant monies are received prior to the incurrence of received by November 15 or February 15. Taxes unpaid and outstanding on May 16 are qualifying expenditures. considered delinquent.
Similar to the way revenues are recorded, governmental funds only record those expenditures Inventories that affect current financial resources. Principal and interest on general long-term debt is recorded as a fund liability only when due, or to the extent that it is expected to be liquidated Inventories of parts, materials and supplies are stated at cost on the first-in, first-out basis in the with expendable financial resources. However in the government-wide financial statements with proprietary funds. The purchases method is used in accounting for inventory for all funds on the full accrual basis of accounting, all expenditures affecting the economic resource status of the budgetary basis. The consumption method is used for the government-wide presentation as well government must be recognized. Thus, the expense and as the proprietary funds and business-type activities.
49 50 1. Summary of Significant Accounting Policies Continued: 1. Summary of Significant Accounting Policies Continued:
Capital Assets Interfund Transfers, Continued:
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g. roads, pathways, street lights, etc.) are reported in the applicable governmental or business type Transfers activities columns in the government-wide financial statements. From Other Transfers To Funds Other Funds Capital assets are charged to expenditures as purchased or constructed in the governmental fund General Fund 4,058,709$ $ 645,643 statements, and capitalized in the proprietary fund statements. Capital assets are recorded at Gas Tax Fund - 1,944,920 historical cost or estimated historical cost. Donated assets are recorded at estimated fair market Tree Replacement Fund - 75,000 value as of the date of the donation. Nonmajor Capital Project Funds 320,071 758,382 Nonmajor Special Revenue Funds 586,231 264,265 Capital assets are defined by the City as assets with an initial, individual cost of $5,000 or more, Enterprise Funds 211,585 1,488,385 $ 5,176,596 $ 5,176,595 and an estimated useful life of greater than one year. Additions or improvements and other
capital outlays that significantly extend the useful life of an asset, or that significantly increase the These transfers have been eliminated in the government-wide statement of activities other than capacity of an asset are capitalized. Other costs for repairs and maintenance are expensed as the net effect between governmental activities and business-type activities. incurred. Long-term Debt Depreciation on exhaustible assets is recorded as an allocated expense in the Statement of Activities with accumulated depreciation reflected in the Statement of Net Assets and is In the government-wide financial statements, and proprietary fund types in the fund financial provided on the straight-line basis over the following estimated useful lives: statements, long-term debt and other long-term obligations are reported as liabilities in the
applicable governmental activities, business-type activities, or proprietary fund type in the Asset Years Statement of Net Assets. Bond premiums and discounts are deferred and amortized over the Buildings and improvements 25-40 life of the bonds. Bonds payable are reported net of the applicable bond premium or discount. Improvements other than buildings 10-20 Bond issuance costs, which are immaterial, are treated as period costs in the year of issue and are Machinery and equipment 5-10 shown as other financing uses. Vehicles 5-10 Utility systems 25-40 In the fund financial statements, governmental fund types recognize bond premiums and Infrastructure 20-40 discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources while discounts on debt issuances are reported as Accrued Compensated Absences and Sick Pay other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. It is the City’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. There is no liability for unpaid accumulated sick leave, since the City does not have Fund Equity a policy to pay any amounts when employees separate from the City. All vacation pay is accrued when incurred in the government-wide and proprietary fund financial statements. A liability for In the fund financial statements, governmental funds report reservations of fund balance for these amounts is reported in the governmental funds only when it has matured, for example, as amounts that are not available for appropriation or are legally restricted by outside parties for result of employee resignations or retirements. At June 30, 2010 there were no governmental use for a specific purpose. Designations of fund balance represent tentative management plans fund liabilities for accrued compensated absences. that are subject to change. The City currently has no designations of fund balance.
Interfund Transfers Use of Estimates
Interfund transfers are used to pay administrative services, provide funds for debt service, In preparing the City’s financial statements, management is required to make estimates and contribute toward the cost of capital projects, and provide operational resources. Transfers for assumptions that affect the reported amounts of assets and liabilities, the disclosure of fiscal year ended June 30, 2010 are as follows: contingent assets and liabilities at the date of the financial statements, and the reported amounts
51 52 1. Summary of Significant Accounting Policies Continued: 2. Fund Types:
of revenues and expenses/expenditures during the reporting period. Actual results could differ from those estimates. The City's financial operations are accounted for in the following funds:
Cash and Investments Governmental Funds Investments included in cash and investments are stated at cost, which is approximate to the fair value. Investments in the pension trust fund are stated at fair value. Governmental funds finance most governmental functions of the City. The acquisition, use For purposes of the statement of cash flows, the City considers the proprietary funds' cash and and balances of the City’s expendable financial resources and the related liabilities, excluding investments with initial maturities to the City of three months or less, and the amounts in the those accounted for in proprietary funds, are accounted for through governmental funds. Oregon State Treasurer's Investment Pool, to be cash equivalents. The measurement focus is upon determination of changes in current financial resources, rather than upon net income determination. The following are the City’s major governmental funds:
Budget General Fund - This fund accounts for the City's general operations. It is used to account for all transactions not specifically required to be accounted for in the City's A budget is prepared for each fund, except for the Pension Trust Fund, essentially in other funds. accordance with the modified accrual basis of accounting used by governmental funds, which is in accordance with the legal requirements of Oregon Local Budget Law. Gas Tax Fund - This fund records shared revenues from the State and County taxes on the sale and use of motor vehicle fuel. Funds are used for construction, The resolution authorizing appropriations sets the maximum level of expenditures for each reconstruction, improvement, repair, maintenance, operation and use of public fund. Appropriations may not be legally over expended. Appropriations lapse at the end of highways, roads, streets, and roadside rest areas. Monies may also be used for street each fiscal year. Appropriations are made at the major program level for each fund, for lighting and cleaning, storm drainage, traffic control devices and administration costs. example, Community Services, Public Works, Development Services, Policy and Administration, General Government, Debt Service, Capital Improvements and Contingency. The detail budget document is required to contain more detailed information Bancroft Debt Service Fund – This fund accounts for the payment of Bancroft for the above-mentioned expenditure categories. Budget amounts include original approved improvement bond principal and interest. The sources of revenue are the collection amounts and all subsequent appropriation transfers approved by the City Council. After of assessments against benefited property, interest and contributions from other budget approval, the City Council may approve supplemental budgeted appropriations if an funds for their share of costs. occurrence, condition, or need exists which had not been ascertained at the time the budget was adopted. A supplemental budget may require hearings before the public, publications in City Gas Tax Fund – This fund accounts for revenues generated from Tigard’s local newspapers and approval by the City Council. Original and supplemental budgets may be gas tax. This tax was developed to fund improvements to the Greenburg modified by the use of appropriations transfers between the levels of control. Such transfers Rd./99W/Main St. intersection and all proceeds are dedicated to this one project. require approval by the City Council. Management may not amend the budget without Council approval. Tree Replacement Fund – This fund accounts for funds collected from developers The budgets for each of the funds include capital outlay appropriations. in lieu of preserving or planting trees. Funds are used by the City to plant trees in the public rights-of-way and other public properties.
Debt service is also budgeted separately. For GAAP presentation, the transfers from operating funds for services provided by the internal service funds and the General Fund are considered revenues and expenses/expenditures, as appropriate, but are considered to be interfund transfers for budgetary purposes.
53 54 2. Fund Types, Continued: 2. Fund Types, Continued:
Proprietary Funds Nonmajor Governmental Funds
Proprietary funds are used to account for the acquisition, operation and maintenance of Other governmental funds include nonmajor special revenue, debt service, and capital projects sewer, storm drainage, and water systems in the City. These funds are entirely or funds of the City. The following lists all other governmental funds by governmental fund predominantly self-supported through user charges to customers. The measurement focus is type: upon net income determination, rather than upon determination of changes in current financial resources. The following are the City’s major proprietary funds: Special Revenue Funds:
Electrical Inspection Fund Enterprise Funds: Criminal Forfeiture Fund Sanitary Sewer Fund - This fund accounts for the City's sewer utility operations. Building Fund Library Fund Storm Sewer Fund – This fund accounts for the City’s storm drainage operations which consists of the following two budgetary funds: Storm Sewer Fund and Water Debt Service Funds: Quality/Quantity Fund. General Obligation Debt Service Fund Urban Renewal Debt Service Fund Water Fund - This fund accounts for the City’s water operations which consists of the following three budgetary funds: Water Fund, Water SDC Fund and Water CIP Fund. Capital Projects Funds:
Facility Fund Transportation Development Tax Fund Additionally, the City reports the following fund type. Neither of these funds are major funds: Traffic Impact Fee Fund Internal Service Funds: Underground Utility Fund
Central Services Fund – This fund accounts for the central administrative functions Street Maintenance Fee Fund within the City which are generally allocated to other funds. Parks Capital Fund Fleet/Property Management Fund – This fund accounts for all activity related to the Parks SDC Fund Fleet Maintenance and Property Management divisions in the City. Urban Renewal Capital Projects Fund Insurance Fund – This fund was established to track worker’s compensation and
other insurance related revenues as well as limited expenditures.
Fiduciary Fund:
Pension Trust Fund - This fund accounts for the City's employee defined contribution pension plan.
55 56 3. Cash and Investments: 3. Cash and Investments, Continued:
The City maintains a cash and investment pool that is available for use by all funds, except The Office of the State Treasurer categorizes the financial institutions in Oregon. In the the Pension Trust Fund. Each fund type's portion of this pool is displayed on the combined event of a bank failure, the entire pool of collateral pledged by all qualified Oregon public balance sheet as "cash and investments". The investments of the Pension Trust Fund are funds bank depositories is available to repay deposits of public funds of government entities. held separately from those of other City funds. The Office of the State Treasurer maintains a list of qualified financial institutions for the deposit of public funds in excess of FDIC insurance. The financial institutions holding City deposits are all on the State Treasurer’s list. Cash and investments are comprised of the following at June 30, 2010:
Investments Cash on hand $ 3,450 Cash held by Department of Finance, Washington County 58,434 State statutes authorize the City to invest primarily in general obligations of the U.S. Deposits with financial institutions 7,878,935 government and its agencies, certain bonded obligations of Oregon municipalities, bank Investments 37,234,970 repurchase agreements, bankers’ acceptances, certain commercial paper and the State of Oregon Local Government Investment Pool. Total cash and investments $ 45,175,789 Interest rate risk. In accordance with its investment policy, the City manages its exposure to declines in fair value by limiting the individual maturities in its investment portfolio to Deposits eighteen months or less. The City does have a provision in its investment policy that up to twenty percent of the portfolio can have maturities from eighteen months to thirty-six months. Deposits with financial institutions include bank demand deposits and time deposit accounts. The total bank balance is $8,308,972 (book balance is $7,856,558). Of these deposits, $500,000 was covered by federal depository insurance and $7,808,972 was Custodial credit risk – investments. For an investment, this is the risk that, in the event collateralized in accordance with Oregon statutes. of failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. All of the City’s investments, except for the investment in the Local Government Investment Pool, which is Custodial credit risk – deposits. In the case of deposits, this is the risk that in the event not evidenced by securities, are held in safekeeping by the financial institution counterparty of bank failure, the City’s deposits may not be returned to it. The Federal Depository in the financial institution’s general customer account name. Insurance Corporation (FDIC) provides insurance for the City’s deposits with financial institutions up to $250,000 each for the aggregate of all non-interest bearing accounts and aggregate of all interest bearing accounts at each institution. Institutions with deposits in The City participates in the Oregon State Treasurer’s Local Government Investment Pool excess of FDIC coverage participate in the Oregon Public Funds Collateralization Program (LGIP), an open-ended; no-load diversified portfolio created under ORS 294.805 to 294.895 (PFCP). The PFCP is a shared liability structure for participating bank depositories. It that is not registered with the U.S, Securities and Exchange Commission as an investment provides some protection for public funds, although it does not guarantee that all funds are company. The LGIP is administered by the State Treasurer and the Oregon Investment 100% protected. Barring any exceptions, a bank depository is required to pledge collateral Council with the advice of the Oregon Short-Term Fund Board. These funds must be valued as follows: invested and managed, as a prudent investor would, exercising reasonable care, skill and caution. The Oregon Audits Division of the Secretary of State’s Office audits the LGIP If well capitalized, 10% annually. If adequately capitalized, 25% If undercapitalized, 110% The City employees participate in a defined contribution pension plan. These funds are recorded in the City’s Pension Trust Fund. The balance at June 30, 2010 is $14,903,374. This balance is not included in the government-wide or fund financial statements, but is shown separately on page 4 .
57 58 3. Cash and Investments, Continued: 3. Cash and Investments, Continued:
As of June 30, 2010, the City had the following investments: The City has a formal investment policy that explicitly limits investment maturities as a means of managing its exposure to fair value loss arising from increasing interest rates. At June 30, 2010, the concentration of those maturities included the Local Government Investment Pool, Money Markets, Percentage of and investments with average maturities of twelve months or less at 67.70% of the total portfolio. Investment Type Fair Value Cost Portfolio Investments with maturities between twelve and eighteen months made up 9.60% of the portfolio and investments with maturities between eighteen and thirty-six months were 22.70% of the total State Treasurer's Local portfolio. Government Investment Pool $ 19,184,048 $ 19,184,048 51.52% Money markets 6,115,126 6,115,126 16.42% 4. Assessment Liens Receivable: U.S. Government Securities 5,067,028 5,067,028 13.61% Corporate bonds 6,868,768 6,868,768 18.45% Assessment liens receivable represent the uncollected amounts levied against benefited property for the cost of local improvements. Because the assessments are liens against the benefited property, an Total Investments $ 37,234,970 $ 37,234,970 100.00% allowance for uncollectible amounts is not deemed necessary. Substantially all assessments are payable over a period of 10 to 20 years. Assessments bear interest from 5.2 to 9.4 percent. At June
30, 2010, the portion of the assessments receivable balance that represents delinquent accounts is Concentration of credit risk: The City’s policy for investing in individual issuers varies $2,987. depending on the type of investments. Agency securities are restricted to no more than 90 percent of the total portfolio. Municipal bonds are restricted to no more than 25 percent of the total portfolio. No more the 35 percent of the total portfolio of investments may be invested in corporate bonds. Investments in corporate bonds of any one issuer may not exceed 5 percent of the investment portfolio.
Credit risk: The City’s policy, which adheres to State of Oregon law, is to limit its Corporate and Municipal investments to the following: Issuers within Oregon must be rated “A” (bonds) or A-2 / P-2 (commercial paper) or better by Standard and Poor’s, Moody’s Investors Service or any other nationally recognized statistical rating organization. Issuers not in Oregon must be rated AA / Aa (bonds) or A-1 / P-1 (commercial paper) or better.
At June 30, 2010, the City’s investments were rated as follows:
Highest Rating from Moody's Investors Service or Standard & Poor's Corporation Investment Type Total Aaa / AAA Aa / AA Not Rated
LGIP $ 19,184,048 $ - $ - $ 19,184,048 Money markets 6,115,126 - - 6,115,126 US Government securities 5,067,028 5,067,028 - -
Corporate bonds 6,868,768 6,868,768 -
Total $ 37,234,970 $ 11,935,796 $ - $ 25,299,174
59 60 5. Capital Assets: 5. Capital Assets Continued:
Capital asset activity for governmental activities for the year ended June 30, 2010 was as follows: Capital assets activity for business-type activities for the year ended June 30, 2010, was as Balances Balances follows: June, 30 Reclassifications June, 30
2009 Additions Adjustments Retirements 2010 Non-depreciable Land $ 7,604,017 $ 50,593 $ 312,459 $ - $ 7,967,069 Construction in progress 4,938,908 5,905,793 (1,379,949) (598,564) 8,866,188 Balances Reclassifications Balances Total non-depreciable 12,542,925 5,956,386 (1,067,490) (598,564) 16,833,257 June 30, 2009 Additions Adjustments Retirements June 30, 2010 Depreciable Non-depreciable Building and imp rovements 21,210,113 - 16,652 - 21,226,765 Land $ 4,422,170 $ - $ - -$ $ 4,422,170 Land improvements 6,742,375 - - - 6,742,375 Construction in progress 10,709,373 4,257,137 (6,716,208) - 8,250,302 Machinery and equipment 2,025,320 48,241 - (18,967) 2,054,594 Total non-depreciable 15,131,543 4,257,137 (6,716,208) - 12,672,472 Autos and trucks 2,652,573 439,134 - (693,070) 2,398,637 Depreciable Office equipment 1,521,368 48,241 552,207 (137,502) 1,984,314 Land improvements 360,669 32,041 - 392,710 Infrastructure 207,802,456 448,038 498,631 - 208,749,125 Buildings and improvements 2,010,974 - - 2,010,974 Total depreciable 241,954,205 983,654 1,067,490 (849,539) 243,155,810 Sewer System 22,781,174 41,294 - 22,822,468 Storm drainage system 16,252,755 304,039 - 16,556,794 Accumulated depreciation Water system 48,535,997 6,338,834 - 54,874,831 Building and imp rovements (4,197,912) (515,754) - - (4,713,666) Equipment 1,455,360 10,454 - 1,465,814 Land improvements (5,191,510) (136,893) - - (5,328,403) Auto and trucks 1,314,439 364,195 (10,454) (163,554) 1,504,626 Machinery and equipment (1,584,172) (170,840) - 18,967 (1,736,045) Total depreciable 92,711,368 364,195 6,716,208 (163,554) 99,628,217 Autos and trucks (1,858,399) (372,145) - 688,741 (1,541,803) Office equipment (510,177) (151,636) - 137,502 (524,311) Accumulated depreciation Infrastruc ture (50,781,547) (2,891,852) - - (53,673,399) Land improvements (360,669) - - (360,669) Total accumulated depreciation (64,123,717) (4,239,120) - 845,210 (67,517,627) Buildings and improvements (579,111) (28,665) - - (607,776) Governmental activities Sewer system (7,221,511) (538,431) - - (7,759,942) capital assets, net $ 190,373,413 $ 2,700,920 $ - $ (602,893) $ 192,471,440 Storm drainage system (5,229,712) (400,991) - - (5,630,703) Water system (20,844,399) (1,158,514) - - (22,002,913) **Adjustments column include reclassifications and construction in progress in previous years that were completed within Equipment (945,098) (186,480) - - (1,131,578) the current fiscal year. Auto and trucks (1,069,981) (98,423) - 157,610 (1,010,794) Total accumulated depreciation (36,250,481) (2,411,504) - 157,610 (38,504,375) Business-type activities Depreciation expense for governmental activities is charged to functions as follows: capital assets, net $ 71,592,430 $ 2,209,828 $ - $ (5,944) $ 73,796,314
Community services $ 368,418 **Adjustments column include reclassifications from previous years recording of capital assets. Public works 2,987,590 Community development 159,134 Policy and administration 723,978 Depreciation expense for business-type activities is charged to activities as follows:
Total depreciation for governmental activities $ 4,239,120 Sanitary sewer $ 617,009 Storm sewer 421,905 Water 1,372,590
Total depreciation for business-type activities$ 2,411,504
61 62 6. Long-term Debt and Other Debt: 6. Long-term Debt and Other Debt Continued:
General Obligation Bonds payable Bancroft improvement bonds – original amount of $1,307,969 for 69th Avenue Local Bond transactions for the year ended June 30, 2010, and future maturities of bond principal Improvement District and original amount of $1,947,678 for Dartmouth Street Local and interest, are as follows: Improvement District.
General Obligation bond issues – Oregon Bond Bank: original amount was $13,000,000. Funds were used to build new library. Interest rates from 3 percent to 4.75 percent. Notes Payable: Transportation Bonds: original amount was $7,250,000. Funds were used for street improvements. Interest rate is 4.35%. Note payable issued January 23, 2003 – Original amount of $2,290,248. Funds were used for expansion and updating for Cook Park. Interest rates from 3 percent to 4.35 percent; payable from Parks SDC Fund. Fiscal Year Amount Added Paid Outstanding Due Due During Year During Year June 30, 2010
2010 $ 553,795 $ - $ (553,795) $ - Fiscal Year Amount Paid Outstanding Future 2011 571,890 605,000 - 1,176,890 Due Due During Year June 30, 2010 Interest 2012 590,281 660,000 - 1,250,281 2010 $ 247,318 $ (247,318) $ - -$ 2013 613,891 680,000 - 1,293,891 2011 259,053 - 259,053 22,795 2014 632,787 695,000 - 1,327,787 2012 270,925 - 270,925 11,785 2015 656,991 715,000 - 1,371,991 $ 777,296 $ (247,318) $ 529,978 $ 34,580 2016-2020 3,728,911 3,895,000 - 7,623,911
2021-2025 2,663,349 - - 2,663,349
$ 10,011,895 $ 7,250,000 $ (553,795) $ 16,708,100 Water line of credit opened June 17, 2010 – Maximum amount is $6,000,000; maturity date June 30, 2012; interest is a variable rate using either the LIBOR Fixed Rate or the BBA LIBOR Daily Floating Rate Option. In addition, the City pays a commitment fee of 0.50% per annum of the unused portion of the line of credit. Water revenues are pledged for Bancroft Improvement Bonds: repayment, but the City intends to issue revenue bonds and repay the line of credit from the bond proceeds in future years. The proceeds from the line of credit were used to begin Bancroft improvement bond issues – Interest rates from 3.9 percent to 7.25 percent; payable funding an intergovernmental agreement with the City of Lake Oswego for long-term water first from assessments to benefited properties and second, from the general credit of the supply. The amount outstanding at June 30, 2010 is $2,853,868. City.
Paid and Fiscal Year Amount Called Outstanding Future Due Due During Year June 30, 2010 Interest Fiscal Year Amount Due Future 2010 $ 224,276 $ (74,400) $ 149,876 $ - 2011 133,593 - 133,593 59,789 Due Due During Year Interest 2012 140,720 - 140,720 52,661 2012$ 2,853,868 $ (2,853,868) TB 2013 148,271 - 148,271 45,115 2014 111,243 - 111,243 37,123 2015 72,100 72,100 31,311 2016-2020 447,927 - 447,927 69,123
$ 1,278,130 $ (74,400) $ 1,203,730 $ 295,122
63 64 6. Long-term Debt and Other Debt, Continued: 8. Retirement Plans, Continued:
Other long-term obligations for accrued compensated absences and changes thereto during Oregon Public Employees Union Employees ICMARC Money Purchase Plan the year ended June 30, 2010 are as follows: Balance Balance Due Tigard Police Officers State of Oregon Public Employees Retirement June 30, June 30, in one System (OPERS) 2009 Additions Retirements 2010 year Governmental activities: Compensated absences$ 1,278,931 $ 1,626,616 $ (1,553,236) $ 1,352,311 $ 1,014,233
Business -type activities: Compensated absences$ 89,042 $ 113,249 $ (128,375) $ 73,916 $ 55,438 Oregon Public Employees Retirement Systems (OPERS)
Expenditures for liquidating compensated absences liabilities are recorded in the General, Special Revenue, Capital Projects, Enterprise, and Internal Service Funds. Plan Description
The City is a participating employer in the Oregon Public Employees Retirement System 7. Transfers: (OPERS), a cost sharing multiple-employer public employee retirement system, established under Oregon Revised Statutes, Section 238.600, which acts as a common investment and administrative agent for public employers in the State of Oregon. Substantially all full-time The City utilizes three types of interfund transfers. The first type is transfers received for police employees are participants in PERS. The plan provides retirement, death and services provided. These transfers are based on a cost allocation plan and are reflected as disability benefits to participants or their beneficiaries. Benefits are established by State expenses of the appropriate activity in the government–wide statements. The second type of Statute, and employer contributions are made at an actuarially determined rate as adopted by transfer is a transfer of resources. Typically, this transfer is made to close out funds that are the OPERS Retirement Board. OPERS, a component unit of the State of Oregon, issues a no longer needed for financial reporting. The third type of transfer is a transfer for direct comprehensive annual financial report, which may be obtained by writing to Oregon Public costs that can be specifically identified and billed directly to the benefiting fund. These types Employees Retirement System, P.O. Box 23700, Tigard, Oregon 97281-3700. of transfers are reflected as expenses of the appropriate activity in the government–wide statements. Funding Policy 8. Retirement Plans: The City's annual required contribution rate, as of the most recent actuarial valuation of July 1, 2007, is 10.66 percent of covered payroll for Tier I & II employees and 6.03 percent of The City contributes to retirement plans on behalf of all eligible employees. At June 30, covered payroll for Oregon Public Service Retirement Plan (OPSRP) employees. At June 2010, the following employee groups were covered by the following retirement plans: 30, 2010 the City had 30 employees in OPSRP. Group Retirement Plan The City is required by State Statute to contribute its current employer rate of 10.66 percent Management/Professional Staff (Non-union) International City Managers Association and 6.03 percent of covered wages, and has contractually committed to pay the employee contributions of 6 percent. Retirement Corp. (ICMARC) Money Purchase Plan
65 66 Annual Pension Cost 9. Transactions with Clean Water Services of Washington County:
Because all OPERS participating employers are required by law to submit the contributions The City collects charges for treatment of City sewage on behalf of the Clean Water Services as adopted by the OPERS Retirement Board, there is no net pension obligation to report of Washington County and remits all collections to Clean Water Services, except for 16.60 and the annual contributions are equal to the annual pension cost. For the fiscal years ended percent of sewer service charges collected and 4 percent of connection charges collected, in June 30, 2010, 2009 and 2008, the City's annual pension cost was $814,738, $914,958 and accordance with an agreement between the City and Clean Water Services. Payments of $831,166 respectively. $8,552,555 were made to Clean Water Services during fiscal year 2010 under this agreement.
ICMARC Plans The net amount retained by the City is reported as revenue in the enterprise funds in the proprietary funds statement of revenues, expenses and changes in fund net assets. Revenues are reported net because the City acts in a fiduciary capacity on behalf of Clean Water The City contributes to defined contribution, single employer retirement plans at a specified Services. percent of gross salary depending on the employment group, for all employees who are not covered under the Police Pension Plan. Employees do not make contributions to these plans. The City is required to make contributions to these plans under authority of City 10. Constitutional Property Tax Limitations: Council resolution and the plan documents.
In November 1990, the Oregon voters approved a State constitutional limit on property Employees become eligible to participate in the plans after six months of service and vest taxes for schools and nonschool government operations. Under the provisions of the immediately. Employees may withdraw funds upon retirement or termination of limitation, tax revenues are separated into those for the public school system and those for employment. local government operations other than the public school system. The limitation specifies Contributions to the plans are made to a fiduciary. Since the plans are administered by the $10 is the maximum allowable tax for each $1,000 of property real market value imposed by City, the assets, equity and operations of the plans are accounted for in the General local governments other than the public school system. Employees Pension Plan Fund, a pension trust fund. The plans invest in various money market and equity mutual funds. The limitation applies to all state and local taxes and charges on property except for the following: Required and actual contributions to the plan were $1,223,697 for the year ended June 30, 2010. Contributions are calculated as a percentage of gross payroll. The contributions range from 10 to 11 percent for all eligible employees participating in the plans. 1. Incurred charges for goods or services received at the owner’s option;
2. Assessments for capital construction that provide a special benefit to the property and Deferred Compensation Plans that can be paid off over at least ten years;
The City offers certain employees deferred compensation plans created in accordance with 3. Taxes to repay bonded debt authorized by the state constitution; Internal Revenue Code Section 457. The plans permit employees to defer a portion of their salary until future years. Contributions for the plans are made to fiduciaries that hold the 4. Taxes to repay existing bonded debt for capital construction, and funds in trust for the plans' participants. The deferred compensation plans are not considered City funds and are excluded from the City’s financial statements. 5. Taxes to repay new bonded debt for capital construction if approved by voters.
67 68
10. Constitutional Property Tax Limitations, Continued: During May 1997, Oregon voters approved Measure 50 which limits taxes on each property by reducing the 1997-98 assessed value of each property to 90 percent of its 1995-96 value. Measure 50 also limits future growth of the taxable value of each property to 3 percent per year with certain exceptions. Measure 50 also establishes permanent tax rates for Oregon’s local taxing districts, which replace the former tax base amounts of the districts. Tigard’s taxing authority is limited to its permanent rate of $2.51 per thousand dollars of assessed value.
At the beginning of each fiscal year, the Washington County Assessor determines assessed values of properties in the City. Washington County is responsible for the levying and collecting the property taxes as well as distributing the tax revenue to all taxing jurisdictions in the County.
11. Risk Management:
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees and others; and natural disasters. The City purchases commercial insurance to deal with substantially all these risks with nominal deductibles. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years.
12. Subsequent Events:
On November 2, City of Tigard voters approved a parks bond measure allowing the City to issue up to $17 million to acquire land for parks and open spaces. At least 80% of the funds will be for land acquisition for open spaces, parks or trail corridors, and up to 20% will go to improvements and development of park land. The City has agreements to purchase two properties with additional recommendations coming over the next year using the Parks System Master Plan as a guide.
The City adopted the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 165, “Subsequent Events” (ASC 855). ASC 855 establishes new accounting and disclosure requirements for subsequent events. Management has evaluated subsequent events through December 30, 2010, the date on which the financial statements were available to be issued. Management is not aware of any additional subsequent events that require recognition or disclosure in the financial statements.
69 70 Required Supplementary Information
71 72 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON GENERAL FUND GAS TAX FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL For the fiscal year ended June 30, 2010 For the fiscal year ended June 30, 2010
Variance Variance Budgeted Amounts Actual Over Budgeted Amounts Actual Over Original Final Amounts (Under) Original Final Amounts (Under) REVENUES: REVENUES: Taxes $ 11,640,610 11,640,610$ $ 11,935,841 $ 295,231 Grants$ 510,356 $ 510,356 $ 344,792 $ (165,564) Grants 367,492 597,788 301,161 (296,627) State gas tax 2,014,048 2,014,048 1,966,091 (47,957) Interagency revenue 5,299,942 5,299,942 5,261,885 (38,057) County gas tax 199,413 199,413 184,890 (14,523) Charges for services 1,358,518 1,358,518 1,286,411 (72,107) Charges for services 6,500 6,500 2,746 (3,754) Fines and forfeitures 880,876 880,876 915,524 34,648 Interest earnings 37,071 37,071 24,234 (12,837) Franchise fees 4,192,242 4,192,242 4,548,520 356,278 Interest earnings 140,685 140,685 88,889 (51,796) Total revenues 2,767,388 2,767,388 2,522,753 (244,635) Miscellaneous 30,000 30,000 210,996 180,996 EXPENDITURES: Total revenues 23,910,365 24,140,661 24,549,227 408,566 Community development 592,374 592,374 547,694 44,680 Capital projects 4,207,170 4,207,170 2,854,189 1,352,981 EXPENDITURES: Community services 20,068,571 20,239,474 18,870,804 1,368,670 Total expenditures 4,799,544 4,799,544 3,401,883 1,397,661 Public works 4,581,525 6,056,730 5,129,767 926,963 Community development 5,325,778 3,854,575 3,555,391 299,184 Change in fund balance Policy and administration 805,213 843,464 787,209 56,255 before other financing sources (uses) (2,032,156) (2,032,156) (879,130) 1,153,026 Capital improvements 768,667 768,667 292,221 476,446 Other financing sources (uses): Total expenditures 31,549,754 31,762,910 28,635,392 3,127,518 Xransfer out (1,944,921) (1,944,921) (1,944,920) 1 * +" 6,350,000 6,350,000 4,750,000 (1,600,000) Change in fund balance before other financing sources (uses) (7,639,389) (7,622,249) (4,086,165) 3,536,084 Total other financing sources (uses) 4,405,079 4,405,079 2,805,080 (1,599,999)
Other financing sources (uses): Contingency (87,750) (87,750) - 87,750 Operating transfer in 4,337,189 4,337,189 4,314,744 (22,445) Loans to CCDA (150,000) (150,000) (70,071) 79,929 Change in fund balance 2,285,173 2,285,173 1,925,950 (359,223) Operating transfer out (971,607) (1,034,941) (575,572) 459,369 FUND BALANCE BEGINNING OF YEAR 1,681,243 1,681,243 2,507,977 826,734 Total other financing sources (uses) 3,215,582 3,152,248 3,669,101 516,853 FUND BALANCE END OF YEAR $ 3,966,416 $ 3,966,416 $ 4,433,928 $ 467,511 Contingency (750,000) (728,537) - 728,537
Change in fund balance (5,173,807) (5,198,538) (417,064) 4,781,474
FUND BALANCE BEGINNING OF YEAR 8,545,876 8,680,876 7,758,316 (922,560)
FUND BALANCE END OF YEAR $ 3,372,069 3,482,338$ 7,341,252$ $ 3,858,914
73 74 CITY OF TIGARD, OREGON CITY GAS TAX FUND CITY OF TIGARD, OREGON SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL TREE REPLACEMENT FUND For the fiscal year ended June 30, 2010 SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL For the fiscal year ended June 30, 2010
Variance Budgeted Amounts Actual Over Variance Original Final Amounts (Under) Budgeted Amounts Actual Over REVENUES: Original Final Amounts (Under) City gas tax $ 650,000 $ 650,000 $ 685,885 $ 35,885 REVENUES: Interest earnings 7,217 7,217 3,910 (3,307) Tree replacement revenue $ 100,000 100,000$ $ 71,946 $ (28,054) Interest earnings - - 10,437 10,437 Total revenues 657,217 657,217 689,795 32,578 Total revenues 100,000 100,000 82,383 (17,617) EXPENDITURES: Capital projects 620,000 3,870,000 1,836,421 2,033,579 EXPENDITURES: Capital projects 150,000 150,000 96,206 53,794 Other financing sources: Debt proceeds - 3,250,000 2,500,000 (750,000) Change in fund balance before other financing sources (uses) (50,000) (50,000) (13,823) 36,177 Contingency (109,412) (109,412) - 109,412 Other financing sources (uses): Change in fund balance (72,195) (72,195) 1,353,374 1,425,569 Operating transfer in 268,000 268,000 - (268,000) Operating transfer out (75,000) (75,000) (75,000) - FUND BALANCE BEGINNING OF YEAR 777,185 777,185 1,076,518 299,333 Total other financing sources (uses) 193,000 193,000 (75,000) (268,000) FUND BALANCE END OF YEAR $ 704,990 $ 704,990 $ 2,429,892 $ 1,724,902 Change in fund balance 143,000 143,000 (88,823) (231,823)
FUND BALANCE BEGINNING OF YEAR 500,000 500,000 293,781 (206,219)
FUND BALANCE END OF YEAR $ 643,000 643,000$ $ 204,958 $ (438,042)
75 76
CITY OF TIGARD, OREGON NOTES TO REQUIRED SUPPLEMENTAL INFORMATION BUDGET TO GAAP RECONCILIATION For the fiscal year ended June 30, 2010
Sections of Oregon Revised Statutes (Oregon Budget Law) require most transactions be budgeted on the modified accrual basis of accounting. However, there are certain transactions where statutory budget requirements conflict with generally accepted accounting principles (GAAP).
The following discusses the differences between the budget basis and GAAP basis of accounting for the General Fund and the Gas Tax Fund:
General Fund
Net change in fund balance - budget basis
Budgeted resources not qualifying as revenues or other financing sources under GAAP: Indirect and other cost reimbursements received are reported as revenues or other financing sources on a budget basis. Such receipts are reclassified as a reduction of expenditures on a GAAP basis. $ (256,035)
Budgeted expenditures not qualifying as expenditures or other financing sources under GAAP: Indirect and other costs reimbursed are reported as expenditures on a budget basis. Such disbursements are reclassified as a reduction of revenues and other financing sources on a GAAP basis. 256,035
Net change in fund balance - GAAP basis $ -
77 78
Other Supplementary Information
79 80 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON COMBINING BALANCE SHEET COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS NONMAJOR GOVERNMENTAL FUNDS June 30, 2010 For the fiscal year ended June 30, 2010
Special Capital Debt Special Capital Debt Revenue Projects Service Revenue Projects Service Funds Funds Funds Total Funds Funds Funds Total ASSETS: REVENUES: Property taxes $ - $ - $ 1,306,081 $ 1,306,081 Cash and investments $ 1,230,959 $ 4,792,688 $ 571,391 $ 6,595,038 Licenses and permits 1,229,880 - - 1,229,880 Accounts receivable 5,289 166,423 - 171,712 Intergovernmental revenues - 194,520 - 194,520 Assessments receivable - - 28,484 28,484 Charges for services - 1,721,984 - 1,721,984 Assessment liens receivable - 173,276 - 173,276 Interest earnings 4,372 52,468 1,246 58,086 Miscellaneous revenues - 38,184 - 38,184 Total assets $ 1,236,248 $ 5,132,387 $ 599,875 $ 6,968,510 Total revenues 1,234,252 2,007,156 1,307,327 4,548,735 LIABILITIES: EXPENDITURES: Accounts payable $ 111,994 $ 13,844 $ - $ 125,838 Community development 983,286 - - 983,286 Customer deposits 22,835 - - 22,835 Debt service: Due to others 75,395 - - 75,395 Principal - 247,318 553,795 801,113 Deferred revenues - Property taxes - - 10,342 10,342 Interest - 32,935 422,768 455,703 Deferred revenues - Assessment liens - 173,278 - 173,278 Capital outlay - 2,294,006 - 2,294,006
Total liabilities 210,224 187,122 10,342 407,688 Total expenditures 983,286 2,574,259 976,563 4,534,108
Changes in fund balance FUND BALANCE UNRESERVED 1,026,024 4,945,265 589,533 6,560,822 before other financing sources (uses) 250,966 (567,103) 330,764 14,627 Total liabilities and fund balances $ 1,236,248 $ 5,132,387 $ 599,875 $ 6,968,510 Other financing sources (uses): Operating transfer in 450,900 320,071 - 770,971 Indirect charges (141,405) - - (141,405) Operating transfer out (122,860) (758,382) - (881,242)
Total other financing sources (uses) 186,635 (438,311) - (251,676)
Changes in fund balance 437,601 (1,005,414) 330,764 (237,049)
FUND BALANCE - beginning of year 588,423 5,950,679 258,769 6,797,871
FUND BALANCE - end of year $ 1,026,024 $ 4,945,265 $ 589,533 $ 6,560,822
81 82
Special Revenue Funds
The balance sheet and statement of revenues, expenditures, and changes in fund balance of the nonmajor special revenue funds are reported in the combining governmental fund statements. Fund statements for the major special revenue funds are reported in the basic financial statements.
Schedules of revenues, expenditures, and changes in fund balance – budget and actual are also presented here for each individual special revenue fund.
Nonmajor Special Revenue Funds:
Electrical Inspection Fund - This fund accounts for fees charged for permits, plan check fees and inspection of electrical improvements.
Criminal Forfeiture Fund - This fund accounts for funds and property seized from criminals in connection with crimes committed prior to passage of Ballot Measure 3
Building Fund - This fund accounts for fees charged for building inspection and plan review activities.
Library Fund – This fund accounts for the amounts received from several donations and bequests for various special projects and artwork.
83 84 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON NONMAJOR SPECIAL REVENUE FUNDS NONMAJOR SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE June 30, 2010 For the fiscal year ended June 30, 2010
Electrical Criminal Electrical Criminal Inspection Forfeiture Building Library Inspection Forfeiture Building Library Fund Fund Fund Fund Total Fund Fund Fund Fund Total REVENUES: ASSETS: Licenses and permits $ 165,693 $ - $ 1,064,187 $ - $ 1,229,880 Cash and investments$ 130,479 $ 136,437 $ 494,753 $ 469,290 $ 1,230,959 Interest earnings 317 442 235 3,378 4,372 Accounts receivable - - 5,289 - 5,289 Total revenues 166,010 442 1,064,422 3,378 1,234,252 Total assets $ 130,479 $ 136,437 $ 500,042 $ 469,290 $ 1,236,248 EXPENDITURES: LIABILITIES AND FUND BALANCES: Community development - - 983,286 - 983,286
LIABILITIES: Changes in fund balance Accounts payable $ 21,650 $ - $ 90,344 $ - $ 111,994 before other financing sources (uses) 166,010 442 81,136 3,378 250,966 Due to others - 75,395 - - 75,395 Customer deposits - 3,797 19,038 - 22,835 Other financing sources (uses): Operating transfer in - - 450,900 - 450,900 Total liabilities 21,650 79,192 109,382 - 210,224 Indirect charges - - (141,405) - (141,405) Operating transfer out (122,860) - - - (122,860) FUND BALANCE UNRESERVED 108,829 57,245 390,660 469,290 1,026,024 Total other financing sources (uses) (122,860) - 309,495 - 186,635 Total liabilities and fund balances $ 130,479 $ 136,437 $ 500,042 $ 469,290 $ 1,236,248 Changes in fund balance 43,150 442 390,631 3,378 437,601
FUND BALANCE - beginning of year 65,679 56,803 29 465,912 588,423
FUND BALANCE - end of year $ 108,829 $ 57,245 $ 390,660 $ 469,290 $ 1,026,024
85 86 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON ELECTRICAL INSPECTION FUND CRIMINAL FORFEITURE FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL For the fiscal year ended June 30, 2010 For the fiscal year ended June 30, 2010
Variance Variance Budgeted Amounts Actual Over Budgeted Amounts Actual Over Original Final Amounts (Under) Original Final Amounts (Under) REVENUES: REVENUES: Interest earnings $ 5,534 $ 5,534 $ 442 $ (5,092) Licenses and permits$ 123,000 $ 123,000 $ 165,693 $ 42,693 Interest earnings 1,378 1,378 317 (1,061) Other financing (uses): Operating transfer out (10,000) (10,000) - 10,000 Total revenues 124,378 124,378 166,010 41,632 Change in fund balance (4,466) (4,466) 442 4,908 Other financing sources (uses): Operating transfer out (122,860) (122,860) (122,860) - FUND BALANCE BEGINNING OF YEAR 56,109 56,109 56,803 694
Contingency (24,780) (24,780) - 24,780 FUND BALANCE END OF YEAR $ 51,643 $ 51,643 $ 57,245 $ 5,602
Change in fund balance (23,262) (23,262) - 43,150 66,412
FUND BALANCE BEGINNING OF YEAR 52,331 52,331 65,679 13,348
FUND BALANCE END OF YEAR $ 29,069 $ 29,069 108,829$ $ 79,760
87 88 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON BUILDING FUND LIBRARY FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL For the fiscal year ended June 30, 2010 For the fiscal year ended June 30, 2010
Variance Variance Budgeted Amounts Actual Over Budgeted Amounts Actual Over Original Final Amounts (Under) Original Final Amounts (Under) REVENUES: REVENUES: Licenses and permits$ 719,200 $ 719,200 $ 1,064,187 $ 344,987 Interest earnings $ 4,524 $ 4,524 $ 3,378 $ (1,146) Interest earnings 8,168 8,168 235 (7,933) EXPENDITURES: - - - - Total revenues 727,368 727,368 1,064,422 337,054 Change in fund balance EXPENDITURES: before other financing sources (uses) 4,524 4,524 3,378 (1,146) Community development 1,066,695 1,066,695 983,286 83,409 Other financing (uses): Change in fund balance Operating transfer out (100,000) (100,000) - 100,000 before other financing sources (uses) (339,327) (339,327) 81,136 420,463 Change in fund balance (95,476) (95,476) 3,378 98,854 Other financing sources (uses): Operating transfer in 478,935 478,935 450,900 (28,035) FUND BALANCE BEGINNING OF YEAR 448,500 448,500 465,912 17,412 Transfers out (141,405) (141,405) (141,405) - FUND BALANCE END OF YEAR $ 353,024 353,024$ 469,290$ $ 116,266 Total other financing sources (uses) 337,530 337,530 309,495 (28,035)
Contingency (120,000) (120,000) - 120,000
Change in fund balance (121,797) (121,797) 390,631 512,428
FUND BALANCE BEGINNING OF YEAR 129,551 129,551 29 (129,522)
FUND BALANCE END OF YEAR $ 7,755 $ 7,755 $ 390,660 $ 382,906
89 90
Debt Service Funds
The balance sheet and statement of revenues, expenditures, and changes in fund balance of the nonmajor debt service fund is reported in the combining nonmajor governmental fund statements. Fund statements for the major debt service fund are reported in the basic financial statements.
Schedules of revenues, expenditures, and changes in fund balance – budget and actual are also presented here for each debt service fund.
Major Debt Service Funds:
Bancroft Debt Service Fund - This fund accounts for payment of Bancroft improvement bond principal and interest. The source of revenue is the collection of assessments against benefited property, interest and contributions from other funds for their share of costs.
Nonmajor Debt Service Fund:
General Obligation Debt Service Fund - This fund accounts for payment of general obligation bond principal and interest. The source of revenue is from property taxes and interest earnings.
Urban Renewal Agency Debt Service Fund - This fund accounts for payment of the Tigard Urban Renewal Agency bond principal and interest. The source of revenue is from property taxes and interest earnings.
91 92 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON NONMAJOR DEBT SERVICE FUNDS NONMAJOR DEBT SERVICE FUNDS COMBINING BALANCE SHEET COMBINING STATEMENT OF REVENUES, EXPENDITURES June 30, 2010 June 30, 2010
General Urban Renewal General Urban Renewal Obligation Agency Obligation Agency Debt Debt Debt Debt Service Fund Service Fund Total Service Fund Service Fund Total ASSETS: REVENUES:
Cash and investments $ 159,397 $ 411,994 $ 571,391 Taxes $ 1,050,480 $ 255,601 $ 1,306,081 Property taxes receivable 19,709 8,775 28,484 Interest earnings 351 895 1,246
Total assets $ 179,106 $ 420,769 $ 599,875 Total revenues 1,050,831 256,496 1,307,327
LIABILITIES AND FUND BALANCES: EXPENDITURES: Debt service: LIABILITIES: Principal 553,795 - 553,795 Deferred revenues: Interest 422,768 - 422,768 Property taxes $ 3,648 $ 6,694 $ 10,342 Total expenditures 976,563 - 976,563 Total liabilities 3,648 6,694 10,342 Change in fund balance 74,268 256,496 330,764 FUND BALANCE UNRESERVED 175,458 414,075 589,533 FUND BALANCE - beginning of year 101,190 157,579 258,769 Total liabilities and fund balances $ 179,106 $ 420,769 $ 599,875 FUND BALANCE - end of year $ 175,458 $ 414,075 $ 589,533
93 94 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON BANCROFT BOND DEBT SERVICE FUND GENERAL OBLIGATION DEBT SERVICE FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL For the fiscal year ended June 30, 2010 For the fiscal year ended June 30, 2010
Variance Variance Budgeted Amounts Actual Over Budgeted Amounts Actual Over Original Final Amounts (Under) Original Final Amounts (Under) REVENUES: REVENUES: Collection of bonded assessments$ 124,726 $ 124,726 284,202$ $ 159,476 Taxes$ 991,563 $ 991,563 $ 1,050,480 $ 58,917 Interest earnings 10,458 10,458 114,570 104,112 Interest earnings 1,478 1,478 351 (1,127)
Total revenues 135,184 135,184 398,772 263,588 Total revenues 993,041 993,041 1,050,831 57,790
EXPENDITURES: EXPENDITURES: Debt service 193,409 193,409 175,758 17,651 Debt service 976,563 976,563 976,563 -
Change in fund balance (58,225) (58,225) 223,014 281,239 Change in fund balance 16,478 16,478 74,268 57,790
FUND BALANCE BEGINNING OF YEAR 982,391 982,391 1,114,700 132,309 FUND BALANCE BEGINNING OF YEAR 108,033 108,033 101,190 (6,843)
FUND BALANCE END OF YEAR $ 924,166 $ 924,166 $ 1,337,714 $ 413,548 FUND BALANCE END OF YEAR $ 124,511 $ 124,511 $ 175,458 $ 50,947
95 96
CITY OF TIGARD, OREGON URBAN RENEWAL AGENCY DEBT SERVICE FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL For the fiscal year ended June 30, 2010
Variance Budgeted Amounts Actual Over Original Final Amounts (Under) REVENUES: Property taxes$ 177,004 $ 177,004 $ 255,601 $ 78,597 Interest earnings 718 718 895 177
Total revenues 177,722 177,722 256,496 78,774
Change in fund balance 177,722 177,722 256,496 78,774
FUND BALANCE BEGINNING OF YEAR 159,979 159,979 157,579 (2,400)
FUND BALANCE END OF YEAR $ 337,701 $ 337,701 $ 414,075 $ 76,374
97 98
Capital Project Funds
Combining statements for all individual nonmajor capital projects funds are reported here. The combined totals are reported in the combining nonmajor governmental fund statements. Fund statements for the major capital projects fund are reported in the basic financial statements.
Schedules of revenues, expenditures, and changes in fund balance – budget and actual are also presented here for each capital projects fund.
Major Capital Projects Fund: Parks Capital Fund - This fund accounts for system development charges for major improvements to recreational facilities within the City
Non-major Capital Projects Funds: Facility Fund - This fund accounts for monies set aside for future major City facility improvements. Transportation Development Tax Fund – This fund accounts for traffic impact fees collected on roads within the City’s urban service areas. This fund replaces TIF starting July 1, 2009. Traffic Impact Fee Urban Services Fund - This fund accounts for traffic impact fees collected on roads within the City’s urban services area. Funds will be used for highway and transit capital improvements approved in the City’s Capital Improvement Plan (CIP). This fund was closed this year as the services were transferred back to Washington County. Underground Utility Fund - This fund accounts for monies received from developers for future underground utility improvements. Street Maintenance Fee Fund – This fund was established in FY 2003-04 to track the revenues and expenditures for the Street Maintenance Fee. This fee provides revenue designated for use in the maintenance of existing streets. Parks SDC Fund – This fund was established in FY 2005-06 to track the revenues associated with the collection of Parks System Development Charges. These funds are used to fund the acquisition, development, and expansion of additional recreation spaces and facilities that are included in the City’s Park Master Plan. Urban Renewal Agency Capital Projects Fund - This fund was established in FY 2007-08 for the creation of a new urban renewal agency improve downtown Tigard. Although expenditures were budgeted in this fund for FY 2007-08, there were no actual expenditures from the fund for this fiscal year.
99 100 CITY OF TIGARD, OREGON CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE For the fiscal year ended June 30, 2010
Transportation Traffic Street Urban Renewal Development Impact Underground Maintenance Parks Parks Agency Facility Tax Fee Utility Fee Capital SDC Capital Fund Fund Fund Fund Fund Fund Fund Projects Fund Total REVENUES: Grants $ - $ - $ - $ - $ - $ 40,595 $ 136,905 $ - $ 177,500 Interagency revenues ------17,020 17,020 Charges for services - 179,243 85,518 8,754 880,366 - 568,103 - 1,721,984 Interest earnings 379 (213) 16,798 4,329 558 6,056 24,561 - 52,468 Miscellaneous revenues - - 3,482 - - 34,702 - - 38,184
Total revenues 379 179,030 105,798 13,083 880,924 81,353 729,569 17,020 2,007,156
EXPENDITURES: Debt service: Principal ------247,318 - 247,318 Interest ------32,935 - 32,935 Capital projects 18,144 - 953,489 95,530 734,145 47,081 373,004 72,613 2,294,006
Total expenditures 18,144 - 953,489 95,530 734,145 47,081 653,257 72,613 2,574,259
Change in fund balance
before other financing sources (17,765) 179,030 (847,691) (82,447) 146,779 34,272 76,312 (55,593) (567,103) 102
Other financing sources (uses): Transfers in 250,000 ------70,071 320,071 Transfers out - - (294,570) - (84,000) - (379,812) - (758,382)
Total other financing sources (uses) 250,000 - (294,570) - (84,000) - (379,812) 70,071 (438,311)
Change in fund balance 232,235 179,030 (1,142,261) (82,447) 62,779 34,272 (303,500) 14,478 (1,005,414)
FUND BALANCE - beginning of year 78,069 - 2,060,956 589,110 283,924 91,994 2,818,659 27,967 5,950,679
FUND BALANCE - end of year $ 310,304 $ 179,030 $ 918,695 $ 506,663 $ 346,703 $ 126,266 $ 2,515,159 $ 42,445 $ 4,945,265
CITY OF TIGARD, OREGON CAPITAL PROJECTS FUNDS COMBINING BALANCE SHEET June 30, 2010
Transportation Traffic Street Urban Renewal Development Impact Underground Maintenance Parks Parks Agency Facility Tax Fee Utility Fee Capital SDC Capital Fund Fund Fund Fund Fund Fund Fund Projects Fund Total ASSETS:
Cash and investments$ 311,916 $ 179,030 $ 920,475 $ 514,723 $ 212,153 $ 122,733 $ 2,488,270 $ 43,388 $ 4,792,688 Accounts receivable - - - - 134,806 3,535 28,082 - 166,423 Assessments liens receivable - - 30,518 - - 142,758 - - 173,276
Total assets $ 311,916 $ 179,030 $ 950,993 $ 514,723 $ 346,959 $ 269,026 $ 2,516,352 $ 43,388 $ 5,132,387
LIABILITIES AND FUND BALANCES:
LIABILITIES: Accounts payable and accrued liabilities $ 1,612 $ - $ 1,780 $ 8,060 $ 256 $ 1,193 $ 943 $ 13,844 Deferred revenues - - 30,518 - - 142,760 - - 173,278 101 Total liabilities 1,612 - 32,298 8,060 256 142,760 1,193 943 187,123
FUND BALANCES - UNRESERVED 310,304 179,030 918,695 506,663 346,703 126,266 2,515,159 42,445 4,945,265
Total liabilities and fund balances $ 311,916 $ 179,030 $ 950,993 $ 514,723 $ 346,959 $ 269,026 $ 2,516,352 $ 43,388 $ 5,132,387 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON TRANSPORTATION DEVELOPMENT TAX FUND CAPITAL PROJECTS FUND - FACILITIES SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL For the fiscal year ended June 30, 2010 For the fiscal year ended June 30, 2010
Variance Budgeted Amounts Actual Over Variance Original Final Amounts (Under) Budgeted Amounts Actual Over REVENUES: Original Final Amounts (Under) REVENUES: Charges for services$ 100,622 100,622$ $ 179,243 $ 78,621 Grants $ - $ 230,500 $ - $ (230,500) Interest earnings - - (213) (213) Interest earnings 3,932 3,932 379 (3,553) Total revenues 100,622 100,622 179,030 78,408 Total revenues 3,932 234,432 379 (234,053) EXPENDITURES: EXPENDITURES: Capital outlay 100,000 100,000 - 100,000 Capital projects 155,000 385,500 18,144 367,356 Change in fund balance 622 622 179,030 178,408 Change in fund balance before other financing sources (151,068) (151,068) (17,765) 133,303 FUND BALANCE BEGINNING OF YEAR - - - -
Other financing sources: FUND BALANCE END OF YEAR $ 622 $ 622 $ 179,030 $ 178,408 Operating transfer in 350,000 350,000 250,000 (100,000)
Contingency (23,250) (23,250) - 23,250
Change in fund balance 175,682 175,682 232,235 56,553
FUND BALANCE BEGINNING OF YEAR 348,440 348,440 78,069 (270,371)
FUND BALANCE END OF YEAR $ 524,122 524,122$ $ 310,304 $ (213,818)
103 104 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON TRAFFIC IMPACT FEE FUND UNDERGROUND UTILITY FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL For the fiscal year ended June 30, 2010 For the fiscal year ended June 30, 2010
Variance Variance Budgeted Amounts Actual Over Budgeted Amounts Actual Over Original Final Amounts (Under) Original Final Amounts (Under) REVENUES: REVENUES: Charges for services $ 137,724 137,724$ $ 85,518 $ (52,206) Charges for services$ 51,000 $ 51,000 $ 8,754 $ (42,246) Interest earnings 24,878 24,878 16,798 (8,080) Interest earnings 5,414 5,414 4,329 (1,085) Miscellaneous revenues - - 3,482 3,482 Total revenues 56,414 56,414 13,083 (43,331) Total revenues 162,602 162,602 105,798 (56,804) EXPENDITURES: EXPENDITURES: Capital outlay 300,000 300,000 95,530 204,470 Capital outlay 950,000 1,200,000 953,489 246,511 Contingency (52,941) (52,941) - 52,941 Change in fund balance before other financing (uses) (787,398) (1,037,398) (847,691) 189,707 Change in fund balance (296,527) (296,527) (82,447) 214,080
Other financing (uses): FUND BALANCE BEGINNING OF YEAR 604,937 604,937 589,110 (15,827) Transfers out (294,570) (294,570) (294,570) - FUND BALANCE END OF YEAR $ 308,410 308,410$ 506,663$ $ 198,253 Contingency (60,724) (60,724) - 60,724
Change in fund balance (1,142,692) (1,392,692) (1,142,261) 250,431
FUND BALANCE BEGINNING OF YEAR 1,167,220 1,417,220 2,060,956 643,736
FUND BALANCE END OF YEAR $ 24,528 $ 24,528 $ 918,695 $ 894,167
105 106 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON STREET MAINTENANCE FEE FUND PARKS CAPITAL FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL For the fiscal year ended June 30, 2010 For the fiscal year ended June 30, 2010
Variance Variance Budgeted Amounts Actual Over Budgeted Amounts Actual Over Original Final Amounts (Under) Original Final Amounts (Under) REVENUES: REVENUES: Charges for services$ 860,000 860,000$ $ 880,366 $ 20,366 Grants $ 110,000 $ 110,000 $ 40,595 $ (69,405) Interest earnings 13,954 13,954 6,056 (7,898) Interest earnings - - 558 558 Miscellaneous revenues 1,001,316 1,001,316 34,702 (966,614) Total revenues 860,000 860,000 880,924 20,924 Total revenues 1,125,270 1,125,270 81,353 (1,043,917) EXPENDITURES: EXPENDITURES: Capital projects 776,000 776,000 734,145 41,855 Capital projects 1,121,316 1,121,316 47,081 1,074,235
Change in fund balance Contingency (150,000) (150,000) - 150,000 before other financing (uses) 84,000 84,000 146,779 62,779 Change in fund balance (146,046) (146,046) 34,272 180,318 Other financing (uses): Transfer out (84,000) (84,000) (84,000) - FUND BALANCE BEGINNING OF YEAR 203,738 203,738 91,994 (111,744)
Contingency (151,765) (151,765) - 151,765 FUND BALANCE END OF YEAR $ 57,692 $ 57,692 $ 126,266 $ 68,574
Change in fund balance (151,765) (151,765) 62,779 214,544
FUND BALANCE BEGINNING OF YEAR 304,125 304,125 283,924 (20,201)
FUND BALANCE END OF YEAR $ 152,360 152,360$ 346,703$ $ 194,343
107 108 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON PARKS SDC FUND URBAN RENEWAL AGENCY CAPITAL PROJECT FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL For the fiscal year ended June 30, 2010 For the fiscal year ended June 30, 2010
Variance Variance Budgeted Amounts Actual Over Budgeted Amounts Actual Over Original Final Amounts (Under) Original Final Amounts (Under) REVENUES: REVENUES: Grants$ - $ - $ 136,905 $ 136,905 Intergovernmental $ 150,000 $ 150,000 $ 17,020 $ (132,980) Charges for services 175,000 175,000 568,103 393,103 Interest earnings 31,300 31,300 24,561 (6,739) EXPENDITURES: Capital projects 177,967 177,967 72,613 105,354 Total revenues 206,300 206,300 729,569 523,269 Change in fund balance EXPENDITURES: before other financing sources (27,967) (27,967) (55,593) (27,626) Debt Service 280,253 280,253 280,253 - Capital projects 580,016 715,645 373,004 342,641 Other financing sources: Operating transfer in - - 70,071 70,071 Total expenditures 860,269 995,898 653,257 342,641 Change in fund balance (27,967) (27,967) 14,478 42,445 Change in fund balance before other financing (uses) (653,969) (789,598) 76,312 865,910 FUND BALANCE BEGINNING OF YEAR 27,967 27,967 27,967 - Other financing (uses): FUND BALANCE END OF YEAR $ - $ - $ 42,445 $ 42,445 Operating transfer out (379,812) (379,812) (379,812) -
Contingency (157,593) (157,593) - 157,593
Change in fund balance (1,191,374) (1,327,003) (303,500) 1,023,503
FUND BALANCE BEGINNING OF YEAR 2,185,472 2,321,101 2,818,659 497,558
FUND BALANCE END OF YEAR $ 994,098 $ 994,098 $ 2,515,159 $ 1,521,061
109 110
Enterprise Funds
For GAAP reporting purposes, the City reports three proprietary funds as major funds. These funds are the Sanitary Sewer Fund, the Storm Sewer Fund which consists of the Storm Sewer Fund and the Water Quality/Quantity Fund, and the Water Fund which includes the Water Fund, Water SDC Fund and Water CIP Fund, however, for budgetary and legal purposes these funds are accounted for separately as listed below.
All of the City’s enterprise funds meet the criteria for major fund reporting and are reported in the basic financial statements.
Schedules or revenues and changes in fund net assets – budget and actual are presented here for each individual enterprise fund as required by Oregon regulations.
Major Enterprise Funds:
Sanitary Sewer Fund - This fund accounts for the City's sewer utility operations.
Storm Sewer Fund - This fund accounts for the City's storm drainage operations. Storm Sewer Fund (budgetary basis financial statements only) Water Quality/Quantity Fund (budgetary basis financial statements only)
Water Fund - This fund accounts for the City's water operations. Water Fund (budgetary basis financial statements only) Water SDC Fund (budgetary basis financial statements only) Water CIP Fund (budgetary basis financial statements only)
111 112 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON SANITARY SEWER FUND SANITARY SEWER FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL RECONCILIATION OF BUDGETARY REVENUES AND EXPENDITURES For the fiscal year ended June 30, 2010 TO PROPRIETARY REVENUES AND EXPENSES For the fiscal year ended June 30, 2010
Variance Budgeted Amounts Actual Over Original Final Amounts (Under) Operating and REVENUES: Non-Operating Expenditures Charges for services $ 1,654,877 1,654,877$ $ 1,146,645 $ (508,232) Revenues / Expenses Interest earnings 91,715 91,715 67,432 (24,283) Budgetary basis $ 1,214,077 $ 1,761,050 Total revenues 1,746,592 1,746,592 1,214,077 (532,515)
EXPENDITURES: Deferred revenue 1,056 - Public works 890,764 890,764 785,666 105,098 Change in accrued compensated absences - 3,801 Capital projects 1,676,000 1,676,000 975,384 700,616 Expenditures capitalized - (1,026,363) Central services - 19,356 Total expenditures 2,566,764 2,566,764 1,761,050 805,714 Depreciation expense - 621,261 Operating and non-operating Change in fund balance revenue and expenses - page $ 1,215,133 $ 1,379,105 before other financing sources (uses) (820,172) (820,172) (546,973) 273,199
Other financing (uses): Transfers out (411,698) (411,698) (411,696) 2
Contingency (423,895) (423,895) - 423,895
Change in fund balance (1,655,765) (1,655,765) (958,669) 697,096
FUND BALANCE BEGINNING OF YEAR 9,255,084 9,255,084 9,585,252 330,168
FUND BALANCE END OF YEAR $ 7,599,319 7,599,319$ $ 8,626,583 $ 1,027,264
113 114 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON STORM SEWER FUND WATER QUALITY/QUANTITY FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL For the fiscal year ended June 30, 2010 For the fiscal year ended June 30, 2010
Variance Variance Budgeted Amounts Actual Over Budgeted Amounts Actual Over Original Final Amounts (Under) Original Final Amounts (Under) REVENUES: REVENUES: Charges for services$ 1,763,097 1,763,097$ $ 1,885,823 $ 122,726 Charges for services$ 5,500 5,500$ $ 6,525 $ 1,025 Interest earnings 6,861 6,861 3,749 (3,112) Interest earnings 19,868 19,868 14,026 (5,842)
Total revenues 1,769,958 1,769,958 1,889,572 119,614 Total revenues 25,368 25,368 20,551 (4,817)
EXPENDITURES: EXPENDITURES: Public works 1,409,117 1,497,117 1,404,631 92,486 Capital projects 330,000 330,000 180,976 149,024 Capital projects 345,000 345,000 5,375 339,625 Change in fund balance before other financing sources (uses) (304,632) (304,632) (160,425) 144,207 Total expenditures 1,754,117 1,842,117 1,410,006 432,111 Other financing (uses): Change in fund balance Operating transfer out (115,793) (115,793) (112,742) 3,051 before other financing sources (uses) 15,841 (72,159) 479,566 551,725 Contingency (56,683) (56,683) - 56,683 Other financing (uses): Transfers out (391,935) (391,935) (391,932) 3 Change in fund balance (477,108) (477,108) (273,167) 203,941
Contingency (40,000) (40,000) - 40,000 FUND BALANCE BEGINNING OF YEAR 1,559,034 1,559,034 1,824,459 265,425
Change in fund balance (416,094) (504,094) 87,634 591,728 FUND BALANCE END OF YEAR $ 1,081,926 $ 1,081,926 $ 1,551,292 $ 469,366
FUND BALANCE BEGINNING OF YEAR 441,292 529,293 753,276 223,983
FUND BALANCE END OF YEAR $ 25,199 $ 25,199 $ 840,910 $ 815,711
115 116 / + / 0*+01+- CITY OF TIGARD, OREGON 2 +03216107-2 WATER FUND 01+-/4/ /+-+71 00181-712 -19:1-/ 7012 SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL +:0+:0/1 00181-712 -19:1-212 For the fiscal year ended June 30, 2010 ; ( 5 % *!
Variance Budgeted Amounts Actual Over + ) Original Final Amounts (Under) - + ) 1< = REVENUES: 0 1< Charges for services$ 8,510,541 $ 8,543,093 $ 7,834,978 $ (708,115) System development charges 60,000 60,000 380,281 320,281 33' ++ !* 1 0 Interest earnings 47,857 47,857 43,339 (4,518) 4@ A@ !! + *0 Miscellaneous - - 204,427 204,427
%# % ! + Total revenues 8,618,398 8,650,950 8,463,025 (187,925)
# #% ) 0 EXPENDITURES: Public works 6,607,336 6,684,888 6,008,017 676,871 8- # B# ) " +$ Capital projects 834,578 834,578 331,814 502,764 3 #% # ) 0 0 < - ) 1 1 ! Total expenditures 7,441,914 7,519,466 6,339,831 1,179,635
7 # ) Change in fund balance #- )1 0 0 before other financing sources (uses) 1,176,484 1,131,484 2,123,194 991,710
Other financing (uses): Transfers out (5,735,646) (5,735,646) (5,585,650) 149,996
Contingency (125,000) (125,000) - 125,000
Change in fund balance (4,684,162) (4,729,162) (3,462,456) 1,266,706
FUND BALANCE BEGINNING OF YEAR 4,771,186 4,771,186 6,246,208 1,475,022
FUND BALANCE END OF YEAR $ 87,024 $ 42,024 $ 2,783,752 $ 2,741,728
117 118 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON WATER SDC FUND WATER CIP FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL For the fiscal year ended June 30, 2010 For the fiscal year ended June 30, 2010
Variance Variance Budgeted Amounts Actual Over Budgeted Amounts Actual Over Original Final Amounts (Under) Original Final Amounts (Under) REVENUES: REVENUES: System development charges$ 90,000 $ 90,000 $ 300,346 $ 210,346 System development charges$ 85,000 $ 85,000 $ 301,166 $ 216,166 Other income - 750,000 - (750,000) Interest earnings 4,838 4,838 2,145 (2,693) Interest earnings 24,564 24,564 7,588 (16,976)
Total revenues 89,838 89,838 303,311 213,473 Total revenues 114,564 864,564 307,934 (556,630)
EXPENDITURES: EXPENDITURES: Capital projects 230,749 230,749 9,389 221,36 Capital projects 7,558,611 9,058,611 3,365,255 5,693,356
Change in fund balance Change in fund balance before other financing sources (uses) (140,911) (140,911) 293,922 434,833 before other financing sources (uses) (7,444,047) (8,194,047) (3,057,321) 5,136,726
FUND BALANCE BEGINNING OF YEAR 143,237 143,237 120,466 (22,771) Other financing sources (uses): Xransfer in 4,961,585 4,961,585 4,811,585 (150,000) FUND BALANCE END OF YEAR $ 2,326 $ 2,326 $ 414,388 $ 412,062 Debt service (150,000) (150,000) (60,190) 89,810 * +" 2,600,000 3,350,000 - (3,350,000)
Total other financing sources (uses) 7,411,585 8,161,585 4,751,395 (3,410,190)
Change in fund balance (32,462) (32,462) 1,694,074 1,726,536
FUND BALANCE BEGINNING OF YEAR 38,486 38,486 865,758 827,272
FUND BALANCE END OF YEAR $ 6,024 $ 6,024 $ 2,559,832 $ 2,553,808
119 120 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON WATER FUNDS ENTERPRISE FUNDS RECONCILIATION OF BUDGETARY REVENUES AND EXPENDITURES RECONCILIATION OF BUDGETARY FUND BALANCE TO TO PROPRIETARY REVENUES AND EXPENSES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES BASIS NET ASSETS For the fiscal year ended June 30, 2010 For the fiscal year ended June 30, 2010
Operating and Total Total Non-Operating Expenditures / Sanitary Storm Total Revenues Expenses Sewer Sewer Water Water $ 8,463,025 $ 6,339,831 Water SDC 303,311 9,389 Sanitary Sewer Fund $ 8,626,583 $ - -$ Water CIP 307,934 3,365,255 Storm Sewer Fund - 840,910 - Water Quality /Quantity Fund - 1,551,292 - Total, budgetary basis 9,074,270 9,714,475 Water Fund - - 2,783,752 System development revenue (669,996) - Water SDC Fund - - 414,388 Deferred revenue 660,732 Water CIP Fund - - 2,559,832 Change in accrued compensated absences - (21,090) Fund balance - budget basis 8,626,583 2,392,202 5,757,972 Expenditures capitalized - (3,575,886) Central services - 331,116 Depreciation expense - 1,371,793 Adjustments from budgetary basis to Operating and non-operating generally accepted accounting principles basis: revenue and expenses - page $ 9,065,006 $ 7,820,408 Capital assets, net 16,478,637 11,470,497 45,847,180 Revenue deferred on budgetary statement - - 660,732 Deferred revenue 7,666 - - Accrued vacation payable (15,434) (19,274) (39,206) Long-term debt - - (2,853,868)
Total Net Assets - generally accepted accounting - - principles basis - pages and $ 25,097,452 $ 13,843,425 $ 49,372,810
121 122
Internal Service Funds
Combining statements for internal service funds are reported here. The combined totals are reported alongside the enterprise funds in the basic financial statements.
Schedules of revenues, expenses, and changes in fund net assets – budget and actual are also presented here for each internal service fund as required by Oregon regulations.
Central Services Fund – This fund accounts for the central administrative functions within the City
Fleet/Property Management Fund – This fund accounts for all activity related to the Fleet Maintenance and Property Management divisions in the City Insurance Fund – Records refunds of prior years workers’ compensation premiums and other insurance related revenues.
123 124 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON INTERNAL SERVICE FUNDS INTERNAL SERVICE FUNDS COMBINING STATEMENT OF NET ASSETS COMBINING STATEMENT OF REVENUES, EXPENSES June 30, 2010 AND CHANGES IN FUND NET ASSETS For the fiscal year ended June 30, 2010
Central Fleet/Property Central Fleet/Property Services Management Insurance Services Management Insurance Fund Fund Fund Total Fund Fund Fund Total ASSETS OPERATING REVENUES: Current assets: Charges for services $ 6,145,114 $ 1,486,917 $ - 7,632,031$ Cash and investments $ 506,547 $ 184,442 $ 927,986 $ 1,618,975 Miscellaneous 82,228 1,002 44,474 127,704 Accounts Receivable 17,830 1,947 1,167 20,944 Prepaid Expense 50,470 - - 50,470 Total operating revenues 6,227,342 1,487,919 44,474 7,759,735 Inventory - 12,673 - 12,673 OPERATING EXPENSES: Total assets 574,847 199,062 929,153 1,703,062 Salaries and wages 3,825,679 481,984 - 4,307,663 Contracted services 1,208,398 380,219 - 1,588,617 General, administrative and other 1,041,230 586,820 - 1,628,050 LIABILITIES Current liabilities: Total operating expenses 6,075,307 1,449,023 - 7,524,330 Accounts payable and accrued liabilities 301,963 81,902 - 383,865 Operating income (loss) 152,035 38,896 44,474 235,405 Accrued compensated absences 233,871 22,890 - 256,761 NONOPERATING REVENUE: Total liabilities 535,834 104,792 - 640,626 Interest revenue 1,848 590 6,289 8,727
NET ASSETS Net income (loss) 153,883 39,486 50,763 244,132 Net assets, unrestricted $ 39,013 $ 94,270 $ 929,153 $ 1,062,436 NET ASSETS - beginning of year (114,870) 54,784 878,390 818,304
NET ASSETS - end of year $ 39,013 $ 94,270 $ 929,153 $ 1,062,436
125 126 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS CENTRAL SERVICES FUND For the fiscal year ended June 30, 2010 SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL For the fiscal year ended June 30, 2010
Central Fleet/Property Services Management Insurance Variance Fund Fund Fund Totals Budgeted Amounts Actual Over CASH FLOWS FROM OPERATING ACTIVITIES Original Final Amounts (Under) Receipts from customers $ 6,135,372 $ 1,493,044 $ - $ 7,628,416 REVENUES: Payments to suppliers (2,241,436) (946,290) (271) (3,187,997) Interest earnings $ 7,338 $ 7,338 $ 1,848 $ (5,490) Payments to employees (3,825,679) (481,984) - (4,307,663) Miscellaneous - - 82,228 82,228 Other receipts 82,228 1,002 44,474 127,704 Net cash provided (used) by operating activities 150,485 65,772 44,203 260,460 Total revenues 7,338 7,338 84,076 76,738 CASH FLOWS FROM INVESTING ACTIVITIES Interest earnings collected 1,848 590 6,289 8,727 EXPENDITURES: Policy and administration 6,617,284 6,883,450 5,819,272 1,064,178 Net increase in cash and cash equivalents 152,333 66,362 50,492 269,187
Cash and investments--beginning of the year 354,213 118,081 877,495 1,349,789 Change in fund balance Cash and investments--end of the year $ 506,546 $ 184,443 $ 927,987 $ 1,618,976 before other financing sources (uses) (6,609,946) (6,876,112) (5,735,196) 1,140,916
RECONCILIATION OF OPERATING INCOME (LOSS) TO Other financing sources (uses): NET CASH PROVIDED BY OPERATING ACTIVITIES Interdepartmental charges 6,600,899 6,664,233 6,145,114 (519,119) Operating income (loss) $ 152,035 $ 38,896 $ 44,474 $ 235,405 Operating transfer out (265,426) (265,426) (256,035) 9,391 Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Change in assets and liabilities: Total other financing sources (uses) 6,335,473 6,398,807 5,889,079 (509,728) Receivables (9,742) 6,127 (271) (3,886) Prepaids 45,854 80 - 45,934 Contingency (250,000) (157,430) - 157,430 Inventories - 1,461 - 1,461 Accounts payable (37,662) 19,208 - (18,454) Change in fund balance (524,473) (477,305) 153,883 631,188 Net cash provided (used) by operating activities $ 150,485 $ 65,772 $ 44,203 $ 260,460 FUND BALANCE BEGINNING OF YEAR 533,750 533,750 (114,870) (648,620)
FUND BALANCE END OF YEAR $ 9,278 $ 56,445 $ 39,014 $ (17,432)
127 128 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON FLEET/PROPERTY MANAGEMENT FUND INSURANCE FUND SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL For the fiscal year ended June 30, 2010 For the fiscal year ended June 30, 2010
Variance Variance Budgeted Amounts Actual Over Budgeted Amounts Actual Over Original Final Amounts (Under) Original Final Amounts (Under) REVENUES: REVENUES: Interest earnings $ 1,228 $ 1,228 $ 590 $ (638) Interest earnings$ 7,849 $ 7,849 $ 6,289 $ (1,560) Miscellaneous - - 1,002 1,002 Miscellaneous 60,000 60,000 44,474 (15,526)
Total revenues 1,228 1,228 1,592 364 Total revenues 67,849 67,849 50,763 (17,086)
EXPENDITURES: EXPENDITURES: - - - - Public works 1,658,332 1,658,332 1,449,024 209,308 Change in fund balance 67,849 67,849 50,763 (17,086) Change in fund balance before other financing sources (uses) (1,657,104) (1,657,104) (1,447,432) 209,672 FUND BALANCE BEGINNING OF YEAR 874,095 874,095 878,390 4,295
Other financing sources (uses): FUND BALANCE END OF YEAR $ 941,944 $ 941,944 $ 929,153 $ (12,791) Indirect Charges 1,658,332 1,658,332 1,486,917 (171,415)
Contingency (100,000) (100,000) - 100,000
Change in fund balance (98,772) (98,772) 39,485 138,257
FUND BALANCE BEGINNING OF YEAR 115,536 115,536 54,784 (60,752)
FUND BALANCE END OF YEAR $ 16,765 $ 16,765 94,269$ $ 77,505
129 130
Other Supplementary Schedules
Schedules included in this section are:
Property Tax Transactions and Outstanding Balances
Bond and Bond Interest Transactions
Future Debt Service Requirements of Long Term Notes Payable
Future Debt Service Requirements of Bancroft Improvement Bonds
Future Debt Service Requirements of General Obligation Bonds
131 132 / + / 0*+01+- CITY OF TIGARD, OREGON 2>1741+:0+:10 9 0 -2 /+-2 -+7 2 -/- 4 -12 SCHEDULE OF BOND AND BOND INTEREST TRANSACTIONS ; ( 5 % *! For the fiscal year ended June 30, 2010
Bond Transactions Interest Transactions : : < 4 < 0 1< 0 5 % * , . 5 % * ! ? @ / ! Outstanding Matured/ Outstanding Bancroft Bonds Original Issue June 30, 2009 Additions Called Paid June 30, 2010 Matured Paid ) ) * +! "0 **$ "1 !$ 1*0* " 0 !1 $ * *0 Issued June 27, 2002$ 1,307,969 $ 762,247 $ - $ 74,400 $ (74,400) $ 687,847 $ 21,825 $ (21,825) +) + ! ) 1! " *!$ !0* " 11+*$ 1 ! Issued December 3, 2003 1,947,678 515,883 - - - 515,883 10,060 (10,060) *) + **0 ) *1 10 +!0 "!!*1$ ! + $ 1,278,130 $ - $ 74,400 $ (74,400) $ 1,203,730 $ 31,885 $ (31,885) 0) * ) 01 "!*$ 0 " 0**$ General Obligation Bonds !) 0 !++ ) 11 ! "*0**$ ! Issued December 4, 2002$ 13,000,000 $ 10,011,895 $ - $ 553,795 $ (553,795) $ 9,458,100 422,768$ $ (422,768) 1) ! ! ) " +$ 10+ "!*0$ +1* Issued June 21, 2010 $ 7,250,000 $ Z $ = = - $ - $ 7,250,000 $ - -$ ) 1 01* ) + " 1+$ !!1 " $ 1*1+ $$ 1 , ,895 = = $ 553,795 $ (553,795) $ 16,708,100 $ 422,768 $ (422,768)
! * * +! "!+*$ "0 ++$ +!+ " !1* !$ !++++
9 - = % < %# ' :
C D #: 0 ++ 11!0 9 * !+
C D # 1 ! !1+ 1
<%3 D # : 9 *! ! 0
<%3 D # 1!00 11!*1
!1* ! !++++
;78:- C D # 3 = 8- # # D #2 " $ # ##%
133 134 CITY OF TIGARD, OREGON / + / 0*+01+- SCHEDULE OF FUTURE DEBT SERVICE REQUIREMENTS 2>1741+7 7011 2108/101A7/0131- 2 OF LONG-TERM NOTES PAYABLE + -0+ /3:0+8131- +-2 June 30, 2010 5 % *!
Issued - January 23, 2002 , # , # 3.00% to 4.35% * <% Original Issue - $ 2,290,248 E =& * !F F Total 5 9 , 9 , 9 , Payment Coupon Debt Date Principal Interest Rate Service ) 1 +*0 ) ) ) 1 +*0 )
January 1, 2011 259,053 22,795 4.25% 281,848 ) ! ! *+ !1 1 *1 * 0 !
January 1, 2012 270,925 11,785 4.35% 282,710 ) 1* ! 00 !+ 1! * + ! *1++
Totals $ 529,978 $ 34,580 $ 564,558 ) 1+ * 1! ! 0 ! 1+** +!** 1 +
) 1 1 * 0* 0 0 11 1 +0
1) ! * * ) )
1) 11* * 0 11* * 0 ) )
* ! *0 * * 11 *
)
135 136
/ + / 0*+01+- 2>1741+7 7011 2108/101A7/0131- 2 +1-10 4+4/ /+-+-2 5 % *!
D , #:<%1 , #: E <% F1 *!F 1 !F 5 =& 9 , 9 ,
) +* * !* + 111 0! *+!1
) + 0 ! + +11** 00 + !+
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0) +! * + 1 + + ! ! ++1
) ! +0 0* 1 !01 ) )
* !+ 1!+ *1 * ! * 001*
137 138
STATISTICAL SECTION
This part of the City of Tigard’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, required supplementary information, and supplementary information says about the City’s overall financial health.
Contents Page
Financial Trends 125 - 133 These schedules contain trend information to help the reader understand how financial performance has changed over time.
Revenue Capacity 134 - 141 These schedules contain information to help the reader assess the City’s most significant local revenue source, property taxes.
Debt Capacity 142 - 147 These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future.
Demographic and Economic Information 148 - 150 These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place.
Operating Information 151 - 153 These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The City implemented GASB Statement 34 in fiscal year 2003 and implemented GASB Statement 44 in fiscal year 2006.
139 140 CITY OF TIGARD, OREGON NET ASSETS BY COMPONENT for the last eight fiscal years (accrual basis of accounting)
Fiscal Year Fiscal Year
2003 2004 2005 2006 2007 2008 2009 2010
Governmental activities Invested in capital assets, net of related debt$ 165,584,303 $ 167,289,278 $ 169,543,524 $ 168,577,473 $ 173,401,138 $ 177,656,465 $ 179,584,222 $ 175,233,362 Restricted 2,529,038 1,782,382 1,367,179 2,812,994 1,490,484 1,992,734 1,540,638 6,872,512 Unrestricted 21,057,629 21,197,594 21,178,146 21,685,865 25,234,231 23,053,474 18,091,356 15,469,788
Total governmental activities net assets 189,170,970 190,269,254 192,088,849 193,076,332 200,125,853 202,702,673 199,216,216 197,575,662
Business-type activities Invested in capital assets, net of related debt 48,011,698 51,186,594 51,861,963 58,058,208 64,000,824 68,398,209 68,738,562 70,942,446 Restricted 5,816,599 5,548,698 3,761,976 3,761,976 3,783,324 3,783,324 3,783,324 - Unrestricted 18,755,869 19,877,044 20,374,983 20,480,106 18,463,817 15,826,866 16,184,644 17,371,241
Total business-type activities net assets 72,584,166 76,612,336 75,998,922 82,300,290 86,247,965 88,008,399 88,706,530 88,313,687
Primary government Invested in capital assets, net of related debt 213,596,001 218,475,872 221,405,487 226,635,681 237,401,962 246,054,674 248,322,784 246,175,808 Restricted 8,345,637 7,331,080 5,129,155 6,574,970 5,273,808 5,776,058 5,323,962 6,872,512 Unrestricted 39,813,498 41,074,638 41,553,129 42,165,971 43,698,048 38,880,340 34,275,999 32,841,029
Total primary government net assets $ 261,755,136 $ 266,881,590 $ 268,087,771 $ 275,376,622 $ 286,373,818 $ 290,711,072 $ 287,922,745 $ 285,889,349
*Fiscal year 2002-03 was the first year that the new reporting requirements of GASB 34 were implemented at the City of Tigard.
Source: Comprehensive Annual Financial Report of the City.
141 142 CITY OF TIGARD, OREGON CHANGES IN NET ASSETS for the last eight fiscal years (accrual basis of accounting)
Fiscal Year Fiscal Year
2003 2004 2005 2006 2007 2008 2009 2010 Expenses Governmental activities Community services $ 8,058,670 $ 8,744,613 $ 10,253,764 $ 11,241,521 $ 11,656,248 $ 13,678,913 $ 18,365,997 $ 19,832,642 Public works 1,890,644 2,735,212 2,172,874 3,078,772 2,383,009 2,373,710 2,468,981 8,563,893 Community development 3,311,058 3,791,317 4,224,696 4,669,452 4,714,636 5,186,834 7,238,839 4,846,494 Policy and administration 3,548,649 6,175,917 6,166,577 7,447,828 4,398,213 3,992,478 5,997,644 1,511,956 Interest on long-term debt 602,291 947,848 716,899 935,359 153,319 354,664 526,825 548,987 Total governmental activities expenses 17,411,312 22,394,907 23,534,810 27,372,932 23,305,425 25,586,599 34,598,286 35,303,972
Business-type activities Sewer 901,779 945,102 1,297,582 1,454,150 1,461,458 1,963,223 1,597,413 1,379,105 Storm Water 1,056,795 1,090,550 1,374,459 1,391,158 1,533,391 1,585,105 1,920,640 2,061,622 Water 5,325,045 5,555,590 8,200,928 7,291,602 7,452,480 6,792,833 7,624,478 7,880,598 Total business-type activities program expenses 7,283,619 7,591,242 10,872,969 10,136,910 10,447,329 10,341,161 11,142,531 11,321,325 Total primary government expenses $ 24,694,931 $ 29,986,149 $ 34,407,779 $ 37,509,842 $ 33,752,754 $ 35,927,760 $ 45,740,817 $ 46,625,297
Program Revenues Governmental activities Charges for services: Community services - 114,454 119,513 146,798 151,448 168,232 180,425 232,384 Public works - 603,352 1,741,747 2,165,451 1,866,123 1,377,855 952,652 1,751,341 Community development 73,332 2,928,733 3,335,125 4,463,283 3,982,018 2,331,834 1,249,995 1,490,701 Policy and administration - 822,177 908,053 1,015,976 1,146,301 1,524,653 1,463,736 108,940 Operating grants and contributions 133,253 252,805 285,888 133,509 1,537,714 739,171 153,447 199,506 Capital grants and contributions - - - - 2,596,223 3,103,521 199,112 305,398 Total governmental activities program revenues 206,585 4,721,521 6,390,326 7,925,017 11,279,827 9,245,266 4,199,367 4,088,270
Business-type activities Charges for services: Sewer 1,923,596 1,809,032 1,601,113 1,555,358 1,641,740 2,322,462 1,348,750 1,117,987 Storm Water 1,246,809 1,156,863 1,156,220 1,176,816 1,190,521 1,593,097 1,484,627 1,872,545 Water 6,877,765 7,202,910 7,762,153 6,953,809 6,336,186 7,002,872 7,417,827 7,834,978 Capital grants and contributions - - - 6,077,864 3,886,120 136,331 834,660 1,022,045 Total business-type activities program revenues 10,048,170 10,168,805 10,519,486 15,763,847 13,054,567 11,054,762 11,085,864 11,847,555 Total primary government program revenues $ 10,254,755 $ 14,890,326 $ 16,909,812 $ 23,688,864 $ 24,334,394 $ 20,300,028 > 15,285,231 > 15,935,825
*Fiscal year 2002-03 was the first year that the new reporting requirements of GASB 34 were implemented at the City of Tigard.
Source: Comprehensive Annual Financial Report of the City.
143 144 CITY OF TIGARD, OREGON CHANGES IN NET ASSETS (CONTINUED) for the last eight fiscal years (accrual basis of accounting)
Fiscal Year Fiscal Year
2003 2004 2005 2006 2007 2008 2009 2010 Net (Expense) Revenue Governmental activities $ (17,204,727) $ (17,613,386) $ (17,144,484) $ (19,447,915) $ (12,025,598) $ (16,341,333) $ (30,398,918) $ (31,215,702) Business-type activities 2,764,553 2,577,563 716,899 5,626,937 2,607,238 713,601 (56,667) 526,230 Total primary government net expenses $ (14,440,174) $ (15,035,823) $ (16,427,585) $ (13,820,978) $ (9,418,360) $ (15,627,731) $ (30,455,585) $ (30,689,471)
General Revenues and Other Changes in Net Assets Governmental activities: Taxes Property taxes $ 10,472,108 $ 9,763,281 $ 10,273,332 $ 10,804,524 $ 11,552,817 $ 9,133,664 $ 12,526,541 $ 16,070,846 Franchise taxes 2,567,881 2,431,324 2,670,050 3,042,187 3,835,007 4,551,169 3,887,078 4,548,520 Restricted intergovernmental revenues (excluding grants) - - 3,447,895 3,288,530 - - - - Unrestricted intergovernmental revenues 8,778,951 5,204,135 1,430,206 1,863,706 1,836,291 2,912,647 8,925,520 6,993,245 Interest earnings 912,288 890,785 859,057 922,508 1,548,735 1,503,619 947,247 308,853 Miscellaneous (90,350) 422,145 283,539 513,943 302,269 817,054 626,075 376,884 Transfers between Governmental and Business-type ------1,276,800 Total governmental activities 22,640,878 18,711,670 18,964,079 20,435,398 19,075,119 18,918,153 26,912,461 29,575,148 Business-type activities: Interest earnings 593,484 426,853 604,977 580,004 1,050,352 1,039,593 649,231 153,300 Miscellaneous 248,885 23,754 135,092 94,427 147,310 150,015 105,567 204,427 Transfers between Governmental and Business-type ------(1,276,800) Total business-type activities 842,369 450,607 740,069 674,431 1,197,662 1,189,608 754,798 (919,073) Total primary government $ 23,483,247 $ 19,162,277 $ 19,704,148 $ 21,109,829 $ 20,272,781 $ 20,107,761 $ 27,667,259 $ 28,656,075
Change in Net Assets Governmental activities $ 5,436,151 $ 1,098,284 $ 1,819,595 $ 987,483 $ 7,049,521 $ 2,576,820 $ (3,486,457) $ (1,640,554) Business-type activities 3,606,922 3,028,170 386,586 6,301,368 3,804,900 1,903,209 698,131 (392,843) Total primary government $ 9,043,073 $ 4,126,454 $ 2,206,181 $ 7,288,851 $ 10,854,421 $ 4,480,029 $ (2,788,325) $ (2,033,396)
*Fiscal year 2002-03 was the first year that the new reporting requirements of GASB 34 were implemented at the City of Tigard.
Source: Comprehensive Annual Financial Report of the City.
145 146 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON FUND BALANCES OF GOVERNMENTAL FUNDS for the last eight fiscal years CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS (modified accrual basis of accounting) for the last eight fiscal years (modified accrual basis of accounting)
Fiscal Year
2003 2004 2005 2006 2007 2008 2009 2010
General Fund Fiscal Year Reserved$ 58,523 $ 69,069 $ 54,632 $ 20,291 $ 209,378 $ - $ 419,488 $ 273,726 Unreserved 7,878,589 8,343,762 8,131,112 8,368,793 9,716,643 10,794,057 7,338,828 7,067,526 Total general fund $ 7,937,112 $ 8,412,831 $ 8,185,744 $ 8,389,084 $ 9,926,021 $ 10,794,057 $ 7,758,316 $ 7,341,252 2003 2004 2005 2006 REVENUES All other governmental funds Taxes $ 10,453,992 $ 9,775,325 $ 10,334,295 $ 10,817,886 Reserved $ 15,612,154 $ 7,198,519 $ 4,821,174 $ 2,719,998 $ - $ - $ - $ - Franchise fees 2,567,881 2,431,324 2,670,050 3,042,187 Unreserved, reported in: Special revenue funds 8,355,147 7,282,391 9,253,467 10,208,277 13,445,092 12,481,406 11,097,739 8,094,802 Special assessments 542,816 568,971 373,141 1,421,765 Debt service funds - - - 1,811,861 2,027,633 682,960 167,169 1,927,247 Licenses and permits 3,505,499 3,668,335 4,442,222 4,852,719 Capital projects funds 9,050 8,971 - 1,589,018 1,087,826 1,309,774 1,373,469 4,945,265 Total all other governmental funds $ 23,976,351 $ 14,489,881 $ 14,074,641 $ 16,329,154 $ 16,560,551 $ 14,474,140 $ 12,638,377 $ 14,967,314 Intergovernmental revenues 4,837,982 5,456,940 5,134,991 5,285,744 Charges for service 1,539,676 1,819,907 2,354,372 2,689,485 *Fiscal year 2002-03 was the first year that the new reporting requirements of GASB 34 were implemented at the City of Tigard. Fines and forfeitures 480,963 613,785 646,406 702,469
Source: Comprehensive Annual Financial Report of the City. Interest earnings 902,312 880,070 836,359 903,637 Miscellaneous 424,525 420,390 280,411 502,951
Total revenues 25,255,646 25,635,047 27,072,247 30,218,843
EXPENDITURES Current operating: Community services 8,692,327 9,014,200 10,750,344 11,377,118 Public works 2,236,753 2,104,617 2,172,875 2,273,569 Community development 3,628,238 3,891,491 4,316,517 4,709,433 Policy and administration 3,884,883 4,051,476 4,334,147 4,564,400 Citywide support - - - - Debt service: Principal 2,344,496 1,300,979 1,285,275 1,526,286 Interest 302,674 951,072 748,417 697,305 Capital outlay 6,613,827 13,210,578 4,106,999 2,352,123
Total expenditures 27,703,198 34,524,413 27,714,574 27,500,234
Excess (deficiency) of revenues over (under) expenditures (2,447,552) (8,889,366) (642,327) 2,718,609
OTHER FINANCING SOURCES (USES)
Proceeds from bond / long-term note 14,509,175 1,947,678 - - Operating transfers in 3,747,649 2,581,668 2,893,435 4,046,802 Operating transfers out (3,747,649) (2,581,668) (2,893,435) (4,046,802)
Total other financing sources (uses) 14,509,175 1,947,678 - -
Net change in fund balances $ 12,061,623 $ (6,941,688) $ (642,327) $ 2,718,609
Debt service as a percentage of non-capital expenditures 14.35% 11.81% 9.43% 9.70%
*Fiscal year 2002-03 was the first year that the new reporting requirements of GASB 34 were implemented at the City of Tigard.
Source: Comprehensive Annual Financial Report of the City.
147 148 Source: Comprehensive Annual Financial Report of the City. * For the last eight fiscal years* GOVERNMENTAL REVENUES OREGON TIGARD, CITY OF Fiscal year 2002-03 was thefirst year that thenewrequirem Year Ended for Grants and Grants and Intergovernmental Interest Donated of Capital of Donated Interest Intergovernmental and Grants and Grants for Ended Year ue3 evcsCnrbtosCnrbtosTxsFranchi Taxes Contributions Contributions Services 30 June iclCagsOeaigCapital Operating Charges Fiscal 2010 2009 2008 2007 0617,477,491 2006 0516,623,924 2005 0416,561,227 2004 0314,107,966 2003
$ $ 3,583,366 3,846,808 5,402,574 7,145,890
$ $
Fiscal Year Revenues Program
2007 2008 2009 2010 1,537,714 199,506 153,447 739,171 133,509 285,888 252,805 $ 11,553,044 $ 12,137,977 $ 12,405,880 $ 16,078,788 133,253 ents ofGASB 34were implemented at ofTigard. theCity 3,835,007 4,551,169 3,887,078 4,548,520 163,379 120,678 87,208 284,202
10,273,332
3,011,348 1,871,841 1,282,438 1,229,880 $ 3,103,521 2,596,223 6,077,864 5,970,228 7,807,667 7,560,542 6,358,393 6,077,864 305,398 199,112 3,989,491 3,469,358 2,536,590 3,083,087 87,760
850,335 847,069 804,128 915,524 - 1,507,065 1,475,808 930,382 300,126
$ $ 16,070,846 12,526,541 12,237,185 11,552,817 10,804,524 283,712 747,532 513,392 249,180 10,472,108 9,763,281
31,163,609 33,029,099 30,007,640 33,047,700
$ $ eTxsRvne annsAst sesMselnosTotal Miscellaneous Assets Assets Earnings Revenues Taxes se 4,548,520 3,887,078 4,551,169 3,835,007 3,042,187 2,670,050 2,431,324 2,567,881 11,918,362 13,801,110 18,214,907 19,418,498 2,383,009 2,757,289 3,463,390 5,129,767 4,772,780 5,191,797 7,184,355 4,674,008
4,717,967 397,510 907,661 787,209 $ 23,000 - 796,995 - 6,993,245 8,925,520 2,912,647 1,836,291 5,152,236 4,878,101 4,704,729 5,204,135 166,571 922,907 794,853 875,513 630,916 454,403 530,403 557,061 3,543,422 6,319,092 3,940,781 7,373,043 General Revenues General
$ $ 1,503,619 2,599,087 1,502,512 1,505,772 1,464,034 1,317,638 28,156,027 29,844,108 35,833,344 38,815,099 308,853 947,247
3,007,582 3,184,991 (5,825,705) (5,767,399) $ (27,850) ------on Disposition 376,884 626,075 (2,286,467) 449,579 608,370 418,631 445,899 $ Gain (Loss)
- - - 7,250,000 (491,023) 2,667,149 4,896,127 3,342,328 4,965,010 ------(2,667,149) (9,299,491) (2,357,267) (3,688,210) -
$ $ - (4,403,364) 985,061 8,526,800 677,408 $ 3,007,582 $ (1,218,373) $ (4,840,644) $ 2,759,401
$ 32,386,618 31,111,828 28,163,419 31,552,608 44,798,693 36,613,960 33,738,004 3.35% 6.22% 4.34% 4.71% 42,054,173
149 150 24,581,212 24,952,351 26,461,366 30,218,843 31,163,609 24,074,951 30,007,640 33,047,700 21,837,697 22,217,175
$ $ 833,508 1,869,653 1,858,371 1,489,909 2,828,353 1,954,156 2,344,018 1,530,983 1,359,360 1,730,569
$ $ 480,963 480,963 613,785 646,406 702,469 850,335 847,069 804,128 915,524 415,760 415,760 367,732$ 367,732$
865,242 443,418 732,797 1,148,271 1,743,493 2,689,485 3,989,491 1,475,808 2,536,590 3,083,087
$ $ 847,069 152 5,456,940 5,134,991 5,285,744 5,970,228 7,560,542 6,358,393 4,837,982 4,778,451 4,760,711
$ $ 3,668,335 3,668,335 4,442,222 4,852,719 3,011,348 1,871,841 1,282,438 1,229,880 3,505,499 3,505,499 3,147,960 3,147,960 4,057,117$ 4,057,117$ Licenses Inter- Charges
2,431,324 2,431,324 2,670,050 3,042,187 3,835,007 4,551,169 3,887,078 4,548,520 2,567,881 2,674,388 2,674,388 2,063,978$ 2,063,978$ Franchise and governmental For and Fines Miscellaneous
llections and private donations. and private llections
$ $ 20042005 9,775,325 2006 10,334,295 2007 10,817,886 2008 11,553,044 2009 12,137,977 2010 12,405,880 16,078,788 2003 10,453,992 2002 9,018,360 2001 8,504,271 Fiscal June 30 Taxes Fees Permits Revenues Services Forfeitures * Revenues Total Year Ended Year * Includes special assessments co assessments special * Includes Types Fund for all Governmental Reports Financial Annual Comprehensive from derived Information CITY OF TIGARD, OREGON BY - SOURCES REVENUES GOVERNMENTAL GENERAL BUDGETARY BASIS theFor last ten fiscal years
CITY OF TIGARD, OREGON GOVERNMENTAL EXPENSES BY FUNCTION For the last eight fiscal years*
Fiscal Interest on Year Ended Community Community Policy and Long-Term Storm June 30 Services Public Works Development Administration Debt Sewer Water Water Total
2003 $ 8,058,670 $ 1,890,644 $ 3,311,058 $ 3,548,649 602,291$ $ 901,779 $ 1,056,795 5,325,045$ $ 24,694,931 2004 8,744,613 2,735,212 3,791,317 6,175,917 947,848 945,102 1,080,550 5,555,590 29,976,149 2005 10,253,764 2,172,874 4,224,696 6,166,577 716,899 1,297,582 1,374,459 8,200,928 34,407,779 2006 11,241,521 3,078,772 4,669,452 7,447,828 935,359 1,454,150 1,391,158 7,291,602 37,509,842 2007 11,656,248 2,383,009 4,714,636 4,398,213 153,319 1,461,458 1,533,391 7,452,480 33,752,754 2008 13,678,913 2,373,710 2,373,710 3,992,478 526,825 1,963,223 1,585,105 6,792,833 33,286,797
2009 18,365,997 2,468,981 7,238,839 5,997,644 526,825 1,597,413 1,920,640 7,624,478 45,740,817 151 2010 19,832,642 8,563,893 4,846,494 1,511,956 548,987 1,379,105 2,061,622 7,880,598 46,625,297
*Fiscal year 2002-03 was the first year that the new requirements of GASB 34 were implemented at the City of Tigard.
Source: Comprehensive Annual Financial Report of the City. CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION - MARKET VALUE AND ASSESSED VALUE OF TAXABLE PROPERTY BUDGETARY BASIS For the last ten fiscal years For the last ten fiscal years
Fiscal Assessed Value Assessed to City-Wide Year Public Total Estimated Value as a Support Ended Real Personal Utility Total Direct Real Market Percentage June 30 Property Property Property Assessed Value Tax Rate * Value (RMV) of RMV Public Works Functions, Fiscal and Capital 2001$ 2,903,403,430 $ 229,530,723 $ 121,662,548 $ 3,254,596,701 $ 3 $ 4,354,132,334 74.75% Year Ended Community Community Policy and Projects Debt June 30 Services Development Administration and Other Service Total 2002 3,085,457,460 221,564,523 163,556,880 3,470,578,863 2.58 4,624,009,037 75.06%
2001 $ 8,696,210 $ 4,832,637 $ 2,593,816 $ 3,894,954 $ 672,656 $ 20,690,273 2003 3,227,082,340 215,829,652 178,798,982 3,621,710,974 2.90 4,804,794,161 75.38%
2002 8,372,801 5,927,523 309,559 2,700,075 2,785,404 20,095,362 2004 3,376,409,604 206,038,692 171,911,103 3,754,359,399 2.68 5,151,890,520 72.87%
2005 3,543,033,334 204,589,409 160,586,232 3,908,208,975 2.70 5,402,433,125 72.34% 2003 8,692,327 5,864,991 279,753 2,971,446 2,647,170 20,455,687 2006 3,717,827,074 210,841,242 159,236,470 4,087,904,786 2.72 5,913,857,305 69.12% 2004 9,014,200 5,996,108 821,553 13,210,578 4,310,054 33,352,493 2007 3,932,173,130 229,401,995 183,090,030 4,344,665,155 2.73 7,152,421,012 60.74% 2005 10,750,344 6,489,391 1,017,764 4,106,999 2,033,691 24,398,189 2008 4,104,676,710 234,099,260 233,581,850 4,572,357,820 2.74 7,449,594,674 61.38% 2006 11,377,118 3,983,002 4,564,400 2,352,123 2,223,591 24,500,234 2009 4,306,936,640 247,691,980 187,315,080 4,741,943,700 2.69 8,161,684,333 58.10% 2007 11,918,362 7,155,789 4,717,967 3,566,422 2,297,487 29,656,027 2010 4,476,784,320 249,636,920 187,721,070 4,914,142,310 2.73 7,738,192,442 63.51% 2008 13,801,110 7,949,086 397,510 6,319,092 1,377,310 29,844,108
2009 18,214,907 10,647,745 1,704,656 3,940,781 1,325,256 35,833,344 Assessed Value by Type for the fiscal year ended 2010 Public Utility 2010 19,418,498 9,803,775 787,209 7,373,043 1,432,574 38,815,099 Property Personal Property 4% 5% Information derived from Comprehensive Annual Financial Reports for all Governmental Fund Types
Real Property 91%
* per $1,000 of assessed value Source: Washington County Assessment and Taxation
153 154 - - - 0.52% 13.35% Assessed Percentage
of Total City of Total 1 4 5 7 8 6 3 9 10 3.58% 2.32% 0.00% - 1.55% 0.65% 0.62% 0.61%
0.64% 2.31% 0.55%
2001 - - - Value Rank Value > 2 $ $ - -
- - - - 50,418,106 - 21,124,330 - 20,043,600 - - 16,782,000 - - 17,997,260 - 12.73% 434,283,062 Assessed Assessed Percentage of Total Cityof Total Taxable 1 3.63% 116,451,600 5 1.13% 19,831,446 7 0.62% 20,991,700 6 0.75% 75,068,410 8 0.57% 9 0.45% 10 0.41% 156 2010 - - - - - Value Rank Value 27,936,896 55,309,352 30,530,230 37,090,568 20,298,056 21,896,667 Taxable 178,231,550 625,784,827 Assessed > 2 2.30% 75,574,610 3 1.65% - 4 1.23% $ -
1 Arbor Heights 1 Arbor CITY OF TIGARD, OREGON CITY OF TIGARD, TAXPAYERS PRINCIPAL PROPERTY and nine years ago For current Taxpayer Pacific Realty Associates Pacific Washington Square LLC Square Washington 112,841,214 Lincoln Center LLC Center Lincoln 81,321,250 Verizon Northwest Inc. Northwest Verizon 60,329,044 Source: Washington County Assessment & Taxation records. Taxation & County Assessment Washington Source: Sprint Nextel Corp. Nextel Sprint GTE Northwest Trust Communities Archstone Associates Hotel Portland Park 217 & Nelson Business Park Business Nelson 217 & Park Northwest Natural Gas Natural Northwest Portland General Electric General Portland Stores Department Macy's (Trust) Constance Robinson The May Department Stores Holland Holdings Holdings Holland
CITY OF TIGARD, OREGON PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS (Dollars per $1,000 of Assessed Value rounded to the nearest cent) For the last ten fiscal years
City of Tigard Overlapping Rates
Tigard/ Washington Fiscal Metzger Tualatin Beaverton Tualatin County Total Direct Year Direct Rates Water School School Valley Rural Fire Portland Other & Ended Perm Debt Urban District Washington District District Fire & Rescue District Community Taxing Overlapping June 30 Rate Svc Renewal Total Combined County No. 23-J No. 48 District No. 2 College Agencies Rates
2001$ 2.51 $ 0.09 $ - 2.60$ $ 0.25 $ 2.53 $ 7.24 $ 6.12 $ 1.59 $ 1.30 $ 0.37 $ 0.70 $ 22.70
2002 2.51 0.07 - 2.58 0.23 2.96 7.04 6.37 1.83 1.31 0.55 0.69 23.56
2003 2.51 0.39 - 2.90 0.23 2.91 7.90 6.56 1.82 1.12 0.49 0.63 24.56
2004 2.51 0.17 - 2.68 0.22 2.90 7.88 8.01 1.83 1.12 0.51 0.62 25.77
2005 2.51 0.19 - 2.70 0.13 2.87 7.79 6.60 1.83 1.12 0.51 0.62 24.16
2006 2.51 0.21 - 2.72 - 2.84 7.85 7.98 1.82 1.12 0.50 0.63 25.45
2007 2.51 0.22 - 2.73 - 2.45 7.67 6.29 1.82 1.12 0.49 0.60 23.17 155 2008 2.51 0.23 0.01 2.75 - 2.44 7.59 6.74 1.56 1.12 0.28 0.61 23.09
2009 2.51 0.18 0.01 2.70 - 2.39 7.52 6.56 1.54 1.12 0.50 0.70 23.04
2010 2.51 0.21 0.06 2.78 - 2.98 7.65 6.88 1.89 1.69 0.63 0.75 25.26
Taxes levied may be composed of three types of levies: (1) a base operating levy, (2) a special operating levy approved by the voters in the district and (3) a debt service levy. Each district with outstanding General Obligation bonded debt is required to levy taxes sufficient with other available funds, to meet principal and interest payments when due.
All operating levies were converted to a permanent rate by the passage of measure 50 in 1997. Permanent rates can not be changed. Prior to Measure 50, rates were dependent on both the levy and assessed value.
Assessment and tax rolls are prepared and maintained by Washington County for all taxing districts with territory in the County. The County collects all taxes against property in the County (except assessments for improvements charged to benefited property) and distributes taxes collected at least monthly. No charges are made to the taxing districts for these services.
NOTE: - Not all taxing districts are charged on each parcel of property, actual rates on tax bills are a combination of the above depending upon the location of the parcel and the school district and sewer and water district boundaries. Total overlapping tax rates for property in Tigard in 2010 ranged from $13.44/$1,000 to $16.43/$1,000.
Source: Washington County Department of Assessment and Taxation. CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON PROPERTY TAX LEVIES AND COLLECTIONS SPECIAL ASSESSMENT COLLECTIONS For the last ten fiscal years For the last ten fiscal years
Percent Percent Total Tax Delinquent Fiscal Total Percent Delinquent Total Collections Outstanding Taxes Fiscal Year Current Ratio of Total Year Ended Tax Current Tax of Levy Tax Tax To Tax Delinquent To Tax June 30 Levy Collections Collections Collections Collections Levy Taxes Levy Ended Assessments Assessments Collections Outstanding June 30 Due (1) Collected (2) to Amount Due Assessments 2001 $ 8,479,977 $ 8,017,056 94.54%$ 241,309 $ 8,258,365 97.39%$ 365,837 4.31% 2001 $ 234,907 $ 290,268 123.57% $ 3,494,465 2002 8,984,987 8,498,029 94.58% 241,336 8,739,365 97.27% 373,584 4.16%
2003 10,521,836 9,942,473 94.49% 252,892 10,195,365 96.90% 394,897 3.75% 2002 240,894 343,642 142.65% 4,621,388
2004 10,072,155 9,519,258 94.51% 249,358 9,768,616 96.99% 388,113 3.85% 2003 185,975 542,816 291.88% 4,150,052 2005 10,568,724 10,032,595 94.93% 293,729 10,326,324 97.71% 330,296 3.13% 2004 637,900 557,911 87.46% 3,471,643 2006 11,115,136 10,571,115 95.11% 252,844 10,823,959 97.38% 310,629 2.79%
2007 11,871,043 11,514,034 96.99% 210,217 11,724,251 98.76% 346,648 2.92% 2005 598,804 373,141 62.31% 3,074,031
2008 12,515,279 11,895,526 95.05% 121,148 12,016,674 96.02% 425,546 3.40% 2006 821,321 1,421,765 173.11% 1,639,875
2009 12,732,804 12,005,730 94.29% 142,047 12,147,777 95.41% 531,172 4.17% 2007 937,916 163,379 17.42% 1,461,838 2010 13,371,853 12,625,421 94.42% 329,304 12,954,725 96.88% 572,298 4.28% 2008 116,194 120,678 103.86% 1,264,746
Taxes are levied as of July 1 each year and are payable in three installments, without interest, on November 15, February 15, and May 15. Interest is charged at the rate of 1% per month on delinquent taxes. Tax liens are foreclosed after three year's delinquencies. 2009 23,100 87,208 377.52% 1,353,832 Taxpayers receive a discount of 3% for payment in full by November 15 and 2% for payment of two thirds of the total taxes due. 2010 74,400 284,202 381.99% 1,144,030
City Property Taxes Levied (1) This amount is equal to the matured principal on Bancroft improvement bonds.
16,000,000 (2) Represents collections of current assessments for payment of Bancroft improvement bonds as well as assessment collections on projects for which such bonds have not been issued. 14,000,000 12,000,000 10,000,000 Source: City assessment records 8,000,000 6,000,000 4,000,000 2,000,000 - 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
157 158 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR LONG-TERM RATIO OF NET GENERAL BONDED DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA DEBT TO TOTAL GENERAL GOVERNMENTAL EXPENDITURES For the last ten fiscal years For the last ten fiscal years
Gross General Ratio of Total Percent of Debt Obligation Less Debt Net Bonded Fiscal Year Total General Service to Fiscal Year Bonded Service Net Debt to Net Bonded Ended Debt Governmental Total General Ended Assessed Debt Out- Monies Bonded Assessed Debt Per June 30 Population Value Standing ** Available Debt Value Capita June 30 Principal Interest Service Expenditures Expenditures 2001 42,260 $ 4,354,132,334 $ 1,982,168 $ 1,609,030 $ 373,138 0.01% $ 8.83 2001 $ 2,408,085 $ 207,914 $ 2,615,999 $ 22,638,451 11.56% 2002 43,040 3,470,578,863 2,824,243 2,154,758 669,485 0.02% 15.55 2002 4,195,966 325,036 4,521,002 20,095,362 22.50% 2003 44,070 4,804,794,161 15,393,293 2,270,985 13,122,308 0.27% 297.76
2003 2,351,917 254,833 2,606,750 20,455,687 12.74% 2004 44,650 3,754,359,399 16,239,519 1,713,313 14,526,206 0.39% 325.33
2004 3,358,982 929,462 4,288,444 34,524,413 12.42% 2005 45,500 3,908,208,975 15,164,807 1,312,547 13,852,260 0.35% 304.45 2006 46,300 4,087,904,786 11,572,205 1,849,770 9,722,435 0.24% 209.99 2005 1,285,275 748,817 2,034,092 27,714,574 7.34% 2007 46,400 4,344,665,155 11,066,369 1,849,770 9,216,599 0.21% 198.63 2006 1,526,286 697,305 2,223,591 27,500,234 8.09% 2008 46,715 4,572,357,820 10,547,958 296,805 10,251,153 0.22% 219.44
2007 1,666,571 630,916 2,297,487 29,656,027 7.75% 2009 47,460 4,741,943,700 10,011,895 258,769 9,753,126 0.21% 205.50
2008 922,907 454,403 1,377,310 29,844,108 4.62% 2010 47,595 4,914,142,310 16,708,100 101,190 16,606,910 0.34% 348.92
2009 794,853 530,403 1,325,256 35,833,344 3.70% ** Excludes bond anticipation notes payable.
2010 875,513 557,061 1,432,574 38,815,099 3.69% Sources: City budget documents, Comprehensive Annual Financial Reports of the City and Washington County Department of Assessment and Taxation.
Source: Comprehensive Annual Financial Reports of the City.
(1) Includes bond anticipation notes principal and interest.
(2) Includes bond anticipation notes interest and certificates of participation principal and interest
159 160 Debt limit Legal debt margin Total net debt applicable to limit as a percentage a of as debt limit limit the to applicable debt net Total For the last ten fiscalyears MARGIN DEBT OFLEGAL COMPUTATION OREGON OFTIGARD, CITY
CITY OF TIGARD, OREGON COMPUTATION OF DIRECT AND OVERLAPPING GENERAL OBLIGATION DEBT June 30, 2010 $ 138,720,271 $ 138,475,271 Percent Amount 130,378,970 Applicable Applicable 130,623,970 2001 245,000
Net Debt Inside City Inside City 0. Jurisdiction Outstanding of Tigard of Tigard 7. 7.44% 9.34% 13.55% 0.18% 19% $ 144,143,825 Tigard/Tualatin School District #23-J $ 138,870,000 50.0312% $ 69,478,327 $ 124,617,239 2002 245,000 Tri-Met 44,395,000 3.8455% 1,707,210 Source: Washington County Department of Taxation Assessment and 3percent of real market value Note: Pursuant to Oregon Revised Statutes 287.004,outstanding general obligation debt is limited to $ Metro 205,626,671 3.8230% 7,861,108 $ 19,526,586 2003 Beaverton School District #48 377,140,000 3.7495% 14,140,864
Portland Community College 44,405,000 4.8553% 2,155,996 $ 162,072,994 $ 150,012,454 154,556,716 140,128,068 14,428,648
Washington County 36,780,000 11.1846% 4,113,696 2004
Tualatin Valley Fire & Rescue District 1,475,000 12.4000% 182,900 as apercentage of debt limit limit the to applicable debt net Total Legal debt margin -amount available for future indebtedness Debt subject to limitation Excludable debt -Bancroft improvement bonds Gross bonded debt Debt applicable to limit: Debt Limit (3% of total property real market value) True cashvalue (2009-2010) Legal MarginCalculation Debt 30,2010 atJune $ 122,637,144 $ 113,347,885
Sub-Total of Overlapping Debt 848,691,671 99,640,101 12,060,540 2005
City of Tigard 16,708,100 100.0000% 16,708,100 $ 130,339,955
Total for Overlapping Debt $ 865,399,771 $ 116,348,201 $ 120,615,119 9,289,259 2006 7 7.46% 57% $ 137,170,735
Source: Oregon State Treasury Debt Management Division $ 126,622,777 9,724,836 2007
$ $ 10,547,958 2008 7.69% $
$ $ 142,258,311 132,246,416 10,011,895 17,911,830 (1,203,730) 2009 .4 11.33% 7.04% $ $
$ $ 4,914,142,310 147,424,269 147,424,269 130,716,169 130,716,169 16,708,100 16,708,100 2010 11.33% 3%
161 162 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON RATIO OF DEBT BY TYPE DEMOGRAPHICS STATISTICS For the last ten fiscal years For the last ten fiscal years
Business-Type Governmental Activities Activities
(1) Fiscal Year General Long-Term Percentage (2) Ended Obligation Bancroft Note Payable Notes Payable Total Primary of Personal Per (4) June 30 Population Bonded Debt Bonded Debt Debt Debt Government Income Capita Assessed Total (2) Value Personal Unemployment 2001 42,260 $ 1,982,168 $ 1,512,168 $ - $ - $ 3,494,336 0.34% $ 82.69 of Taxable (3) (4) Income Rate Fiscal Year (1) Property School Per Capita (thousands Portland 2002 43,040 2,824,243 2,579,243 2,290,248 - 7,693,734 0.74% 178.76 Ended June 30 Population Per Capita Enrollment Income * of dollars) * Metro Area 2003 44,070 15,393,293 2,393,293 2,091,727 - 19,878,313 1.91% 451.06 2001 42,260 $ 77,014 11,500 $ 27,128 $ 1,146,445 4.50% 2004 44,650 16,239,519 3,703,071 1,892,200 - 21,834,790 2.09% 483.82 2002 43,040 80,636 11,785 26,584 1,144,177 7.50% 2003 44,070 82,181 11,686 26,145 1,152,206 8.80% 2005 45,500 15,164,807 3,104,267 1,681,637 - 19,950,711 N/A 446.82 2004 44,650 83,190 11,831 25,734 1,161,384 6.80% 2006 46,300 11,572,205 2,282,946 1,465,007 - 15,320,158 N/A 330.10 2005 45,500 87,530 11,653 N/A N/A 6.30% 2006 46,300 88,081 12,134 N/A N/A 6.30% 2007 46,400 11,066,369 1,345,030 1,242,187 - 13,653,586 N/A 294.26 2007 46,400 93,635 12,100 N/A N/A 4.80% 2008 46,715 97,878 12,451 N/A N/A 5.30% 2008 46,715 10,547,958 1,301,230 1,012,986 - 12,862,174 N/A 275.33 2009 47,460 99,915 12,685 N/A N/A 9.70% 2009 47,460 10,011,895 1,278,130 777,296 2,853,868 14,921,189 N/A 314.40 2010 47,595 103,249 12,913 N/A N/A 8.40%
2010 47,595 16,708,100 1,203,730 529,978 2,853,868 21,295,676 N/A 447.44 Sources of Information: (1) State of Oregon, Department of Administrative Services (1) See page 154 for personal income data (2) U.S. Bureau of Labor Statistics (2) Per capita data is using Tigard's population (3) Tigard/Tualatin School District #23-J - City student totals not available (4) Washington State University - Northwest Income Indicators Project N/A = Not available * Personal income data for Tigard was not available so data was calculated using the ratio of Tigard's population to Washington County's total population. The ratio was then applied to total personal income for Washington County Sources: City budget documents, Comprehensive Annual Financial Reports of the City and Washington County Department of Assessment and Taxation. to arrive at an estimated personal income for the City of Tigard.
Population and School Enrollment Trends 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Population School Enrollment
163 164 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON PRINCIPAL EMPLOYERS PROPERTY VALUE AND CONSTRUCTION For current year and nine years ago For the last ten fiscal years
2010 2001 Commercial Residential Fiscal Year Construction (1) Construction (1) Percentage Percentage Ended Number of Number of of total City of total City June 30 Permits Value Permits Value Employer Employees Rank employment Employees Rank employment 2001 23 $ 47,262,611 576 (2)$ 114,188,480 HSBC Card Services 948 1 3.36% - - - Tigard - Tualatin School District 779 2 2.76% - - - 2002 12 21,583,399 387 (2) 96,339,584 Macy's 704 3 2.49% 502 2 2.18% Nordstrom 579 4 2.05% 461 3 2.01% 2003 10 22,289,054 375 (2) 104,951,598 Oregon Public Employees Retirement 396 5 1.40% - - - Providence Health System 377 6 1.34% - - - Costco Wholesale Corporation 300 7 1.06% - - - 2004 17 59,523,557 375 (2) 99,056,117 City of Tigard 266 8 0.94% - - - The Cheesecake Factory 250 9 0.89% - - - 2005 11 49,645,891 325 (2) 96,002,190 Home Depot 241 10 0.85% - - - Renaissance Credit Services - - 1,116 1 4.86% 2006 8 50,744,300 299 (2) 100,965,847 Servicemaster Building Maintenance - - 250 4 1.09% Rockwell Collins Flight Dynamics - - 249 5 1.08% 2007 9 50,512,736 231 (2) 67,798,361
4,840 17.14% 2,578 11.22% 2008 6 73,614,404 93 (2) 31,810,734
2009 4 1,944,775 42 (2) 9,324,154
Source: City of Tigard Adopted Budget and Tigard Chamber of Commerce. 2010 4 2,003,118 123 (2) 27,972,462
(1) From City of Tigard Building Department. Multi-family permits are included in the number of permits issued for residential construction.
(2) Residential totals for permits and value include amounts from Urban/Washington County as well as City of Tigard.
165 166 CITY OF TIGARD, OREGON CITY OF TIGARD, OREGON FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION OPERATING INDICATORS BY FUNCTION/PROGRAM For the last ten fiscal years For the last eight fiscal years
Fiscal Year Full-time Equivalent Employees as of June 30 Functions/Programs 2003 2004 2005 2006 2007 2008 2009 2010
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Governmental activities: Function / Program Community services Police-number of traffic citations issued 6,815 6,815 6,006 6,800 6,979 6,383 6,925 9,101 Community services Police-number of calls for service 49,333 49,333 53,754 51,062 51,000 51,377 50,115 51,158 Police 76.33 75.50 75.00 76.00 77.00 78.00 80.00 93.00 93.00 90.10 Library-number of items in collection 115,618 115,618 125,570 143,500 156,500 176,210 193,710 216,110 Library 31.00 30.70 30.65 28.90 33.20 33.20 34.20 41.90 41.90 38.80 Library-materials checked out each year 685,000 685,000 728,250 850,000 918,540 1,131,093 1,249,462 1,462,304 Parks maintenance (a) ------Public works Acres of park land maintained 170 170 176 176 180 184 189 189 Public works Crack sealing completed annually (linear feet) 98,000 98,000 150,000 151,000 160,000 160,000 160,000 160,000 Administration 6.00 6.50 7.00 7.00 7.85 7.60 7.60 8.85 8.85 9.35 Vehicles maintained to industry standard 140 140 144 148 150 153 158 160 Parks maintenance (a) 9.50 9.75 10.25 11.00 10.75 10.75 10.75 9.75 9.75 9.75 Community development Street maintenance 11.50 9.35 9.20 8.50 8.00 7.00 7.00 7.00 7.00 7.00 Number of inspections (Tigard) 14,200 14,200 21,000 19,550 23,000 23,500 7,778 8,700 Fleet maintenance 3.00 3.22 3.10 3.25 3.00 2.50 2.50 2.50 2.50 2.00 Number of permits (all types) in Tigard 3,300 3,300 3,600 3,351 4,500 4,850 2,278 3,025 Property management 3.00 3.38 3.25 3.25 3.25 3.25 3.25 4.25 4.25 4.25 Number of development applications 400 400 430 374 507 450 508 370 Engineering (f) 15.50 16.00 16.00 15.50 15.50 15.50 10.50 10.50 10.50 11.80 Policy and administration Number of job applications 1,800 1,800 1,900 2,000 2,000 2,300 2,215 1,900 Community development Laptops and computers to maintain 325 325 445 500 540 435 451 488 Administration 3.00 3.00 3.00 3.00 3.00 3.00 2.00 3.00 3.00 2.00 Insured value of City's real property (in millions)$ 27.9 27.9$ 38.8$ 40.8$ $ 46.2 $ 73.5 Building inspection 12.50 13.50 13.50 16.30 18.30 18.80 19.80 17.80 6.20 6.24 Number of utility bills sent 106,055 106,055 109,854 112,775 113,502 115,574 114,500 116,800 Current planning 9.00 9.00 9.00 8.20 8.20 8.20 8.20 10.20 10.20 7.56 Average fine amount collected $ 68 68$ 78$ 97$ 90$ $ 94 90$ $ 90 Long range planning 4.00 5.00 5.00 5.00 5.00 7.00 8.00 7.00 7.00 7.00 Development Engineering (b) 5.00 5.00 4.00 1.60 Business-type activities: Downtown Redevelopment (c) 1.00 1.00 1.00 Sewer Policy and Administration Miles of sewer lines cleaned (annual goal) 53.2 53.2 48.5 50.8 51.6 53.4 46.6 40.7 City management 5.80 5.80 5.80 4.00 3.80 3.80 3.80 5.30 5.30 4.50 Miles of sewer lines video inspected (annual goal) 20.7 20.7 26.1 21.8 22.1 23.0 23.2 23.3 Human resources 3.50 4.00 4.00 4.00 4.00 4.00 4.00 5.00 5.00 5.00 Storm Water Information technology 4.50 8.00 8.00 6.00 6.00 7.00 8.00 7.00 7.00 7.00 Miles of storm sewer lines cleaned 30.2 30.2 13.7 28.5 29.6 43.6 30.2 30.6 Risk management 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.50 2.50 2.30 Number of Water Quality facilities 60 60 62 70 73 75 78 72 Finance administration 2.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 5.30 Total number of catch basins cleaned 3,867 3,867 3,915 4,045 4,150 4,915 4,437 4,437 Financial operations 10.75 10.80 10.80 10.80 10.80 10.80 10.80 5.50 5.50 4.50 Water Utility Billing (d) 6.50 6.50 5.50 Number of accounts 16,712 16,712 17,022 17,300 17,400 17,870 17,900 17,900 Office services 7.00 7.00 7.00 7.30 7.30 7.30 7.30 4.50 4.50 3.05 Number of main breaks repaired 15 15 10 10 10 20 10 10 City Recorder/Records (e) 3.00 3.00 3.25 Municipal court 4.00 4.00 3.00 3.00 3.00 3.00 3.00 3.25 3.25 3.50 *Fiscal year 2002-03 was the first year that the new reporting requirements of GASB 34 were Sanitary Sewer 7.00 6.93 6.95 7.25 7.75 7.25 7.35 5.35 5.35 5.25 implemented at the City of Tigard.
Storm Sewer 7.00 6.92 6.95 7.75 8.25 7.25 6.35 7.10 7.10 7.00 Source: City of Tigard Finance Department
Water 17.00 17.95 18.00 17.00 16.25 16.50 17.30 16.30 16.30 13.00
Total 254.88 261.30 260.45 258.00 265.20 266.70 271.70 296.05 283.45 267.60
Source: City of Tigard Finance Department
(a) Parks maintenance was budgeted in Community Services until FY 2001-02 at which time it was moved to the Public Works division. (b) Development Engineering was budgeted with Capital Construction & Transportation as Engineering until FY 2006-07. (c) Downtown Redevelopment was budgeted with Long Range Planning until FY 2008-09. (d) Utility Billing was budgeted with Financial Operations until FY 2007-08. (e) City Recorder/Records was budgeted with Office Services until FY 2008-09. (f) Engineering was budgeted with Development Services until FY 2009-10.
167 168
CITY OF TIGARD, OREGON CAPITAL ASSETS STATISTICS BY FUNCTION For the last eight fiscal years
Fiscal Year Functions/Programs 2003 2004 2005 2006 2007 2008 2009 2010
Governmental activities: Community services Police stations 1 1 1 1 1 1 1 1 Library buildings 1 1 1 1 1 1 1 1 Public works Number of parks 11 13 13 13 13 13 14 14 Acres of park and greenspaces 293.5 347.0 347.0 347.0 348.0 348.0 396.0 396.0 Miles of streets 142.5 150.0 150.0 150.0 150.0 150.0 150.0 150.0 Community development See Note Policy and administration City-owned building facilities 4 5 5 5 5 5 5 5
Business-type activities: Sewer Total miles of sanitary sewer lines 142.0 146.6 148.0 152.8 160.4 160.4 161.0 162.8
Storm Water Total miles of storm sewer lines 111.0 110.6 113.0 116.6 130.9 131.0 131.0 131.0 Number of Water Quality facilities 45 60 62 62 77 77 79 79 Water Water mains in miles 210 210 220 224 225.1 225.1 225.1 235.0 Number of reservoirs 13 13 13 13 13 13 13 13
Source: City of Tigard Finance Department Note: No capital assets indicators are available for development services functions. *Fiscal year 2002-03 was the first year that the new reporting requirements of GASB 34 were implemented at the City of Tigard.
169 170
AUDIT COMMENTS AND DISCLOSURE REQUIRED BY STATE REGULATIONS
171 172 (THIS PAGE INTENTIONALLY LEFT BLANK) APPENDIX C Proposed Forms of Legal Opinion
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February 3, 2011
City of Tigard Wells Fargo Bank, National Association 13125 SW Hall Boulevard 301 S. College St. Tigard, Oregon 97223-8144 Charlotte, NC 28202
Subject: $17,000,000 City of Tigard, Oregon, General Obligation Bonds, Series 2011A
Ladies and Gentlemen: We have acted as bond counsel in connection with the issuance by the City of Tigard, Oregon (the “City”) of its General Obligation Bonds, Series 2011A (the “Bonds”), which are dated February 3, 2011 and are in the aggregate principal amount of $17,000,000. The Bonds are authorized by the authority granted by the voters of the City at an election held on November 2, 2010, City Resolution No. 10-75 adopted December 28, 2010, and a Bond Declaration dated the date of delivery of the Bonds (collectively, the “Resolution”). We have examined the law and such certified proceedings and other documents as we deem necessary to render this opinion. We have not been engaged or undertaken to review the accuracy, completeness or sufficiency of the official statement or other offering materials relating to the Bonds, and we express no opinion relating thereto, excepting only the matters set forth as our opinion in the official statement. Regarding questions of fact material to our opinion, we have relied on representations of the City in the Resolution and in the certified proceedings and on other certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation. Based on the foregoing, we are of the opinion that, under existing law: 1. The Bonds have been legally authorized, sold and issued under and pursuant to the Constitution and Statutes of the State of Oregon, the City Charter, and the Resolution. The Bonds constitute valid and legally binding general obligations of the City enforceable in accordance with their terms. 2. The City has pledged its full faith and credit to the payment of the Bonds. The Bonds are payable from ad valorem taxes which may be levied without limitation as to rate or amount on all taxable property within the boundaries of the City. 3. Interest on the Bonds (including any original issue discount properly allocable to an owner thereof) is excludable 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; however, such interest is taken into account in determining adjusted current earnings for the purpose of computing the federal alternative minimum tax imposed on certain corporations. The portion of the opinion set forth in this paragraph is subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Code”), that must be satisfied subsequent to the issuance of the Bonds in order that the interest thereon be, and continue to be, excludable 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 interest on the Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. 4. Interest on the Bonds is exempt from Oregon personal income tax. We note that the City has not designated the Bonds as “qualified tax-exempt obligations” within the meaning of Section 265(b)(3)(B) of the Code.
Legal Opinion February 3, 2011 Page 2
Except as expressly stated above, we express no opinion regarding any other federal or state income tax consequences of acquiring, carrying, owning or disposing of the Bonds. Owners of the Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of owning the Bonds, which may include original issue discount, original issue premium, purchase at a market discount or at a premium, taxation upon sale, redemption or other disposition, and various withholding requirements. The portion of this opinion that is set forth in paragraph 1, above, is qualified only to the extent that enforceability of the Bonds may be limited by or rendered ineffective by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors’ rights generally; (ii) the application of equitable principles and the exercise of judicial discretion in appropriate cases; (iii) common law and statutes affecting the enforceability of contractual obligations generally; (iv) principles of public policy concerning, affecting or limiting the enforcement of rights or remedies against governmental entities such as the City. This opinion is given as of the date hereof, and we assume no obligation to update, revise, or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. This opinion is provided to you as a legal opinion only, and not as a guaranty or warranty of the matters discussed herein. No opinions may be inferred or implied beyond the matters expressly stated herein. No qualification, limitation or exception contained herein shall be construed in any way to limit the scope of the other qualifications, limitations and exceptions. For purposes of this opinion, the terms “law” and “laws” do not include unpublished judicial decisions, and we disclaim the effect of any such decision on this opinion. This opinion speaks as of its date only, and we disclaim any undertaking or obligation to advise you of any changes that hereafter may be brought to our attention or any change in law that may hereafter occur. This opinion is given solely for your benefit in connection with the above referenced bond financing and may not be relied on in any manner or for any purpose by any person or entity other than the addressees listed above and the owners of the Bonds, nor may copies be furnished to any other person or entity, without the prior written consent of K&L Gates LLP. We have served only as bond counsel to the City in connection with the Bonds and have not represented any other party in connection with the Bonds. Therefore, no attorney-client relationship shall arise by virtue of our addressing this opinion to persons other than the City. This opinion is limited to matters of Oregon law and applicable federal law, and we assume no responsibility as to the applicability of laws of other jurisdictions. Respectfully submitted,
K&L G ATES LLP
Lawyers
February 3, 2011
City of Tigard Citigroup Global Markets Inc. 13125 SW Hall Boulevard 444 South Flower Street, 36th Floor Tigard, Oregon 97223-8144 Los Angeles, California 90071
Subject: $8,655,000 City of Tigard, Oregon, General Obligation Refunding Bonds, Series 2011B
Ladies and Gentlemen: We have acted as bond counsel in connection with the issuance by the City of Tigard, Oregon (the “City”) of its General Obligation Refunding Bonds, Series 2011B (the “Bonds”), which are dated February 3, 2011 and are in the aggregate principal amount of $8,655,000. The Bonds are authorized by Oregon Revised Statutes Section 287A.360, City Resolution No. 10-75 adopted December 28, 2010, and a Bond Declaration dated the date of delivery of the Bonds (collectively, the “Resolution”). We have examined the law and such certified proceedings and other documents as we deem necessary to render this opinion. We have not been engaged or undertaken to review the accuracy, completeness or sufficiency of the official statement or other offering materials relating to the Bonds, and we express no opinion relating thereto, excepting only the matters set forth as our opinion in the official statement. Regarding questions of fact material to our opinion, we have relied on representations of the City in the Resolution and in the certified proceedings and on other certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation. Based on the foregoing, we are of the opinion that, under existing law: 1. The Bonds have been legally authorized, sold and issued under and pursuant to the Constitution and Statutes of the State of Oregon, the City Charter, and the Resolution. The Bonds constitute valid and legally binding general obligations of the City enforceable in accordance with their terms. 2. The City has pledged its full faith and credit to the payment of the Bonds. The Bonds are payable from ad valorem taxes which may be levied without limitation as to rate or amount on all taxable property within the boundaries of the City. 3. Interest on the Bonds is excludable 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; however, such interest is taken into account in determining adjusted current earnings for the purpose of computing the federal alternative minimum tax imposed on certain corporations. The portion of the opinion set forth in this paragraph is subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Code”), that must be satisfied subsequent to the issuance of the Bonds in order that the interest thereon be, and continue to be, excludable 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 interest on the Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. 4. Interest on the Bonds is exempt from Oregon personal income tax. We note that the City has not designated the Bonds as “qualified tax-exempt obligations” within the meaning of Section 265(b)(3)(B) of the Code.
Legal Opinion February 3, 2011 Page 2
Except as expressly stated above, we express no opinion regarding any other federal or state income tax consequences of acquiring, carrying, owning or disposing of the Bonds. Owners of the Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of owning the Bonds, which may include original issue discount, original issue premium, purchase at a market discount or at a premium, taxation upon sale, redemption or other disposition, and various withholding requirements. The portion of this opinion that is set forth in paragraph 1, above, is qualified only to the extent that enforceability of the Bonds may be limited by or rendered ineffective by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors’ rights generally; (ii) the application of equitable principles and the exercise of judicial discretion in appropriate cases; (iii) common law and statutes affecting the enforceability of contractual obligations generally; (iv) principles of public policy concerning, affecting or limiting the enforcement of rights or remedies against governmental entities such as the City. This opinion is given as of the date hereof, and we assume no obligation to update, revise, or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. This opinion is provided to you as a legal opinion only, and not as a guaranty or warranty of the matters discussed herein. No opinions may be inferred or implied beyond the matters expressly stated herein. No qualification, limitation or exception contained herein shall be construed in any way to limit the scope of the other qualifications, limitations and exceptions. For purposes of this opinion, the terms “law” and “laws” do not include unpublished judicial decisions, and we disclaim the effect of any such decision on this opinion. This opinion speaks as of its date only, and we disclaim any undertaking or obligation to advise you of any changes that hereafter may be brought to our attention or any change in law that may hereafter occur. This opinion is given solely for your benefit in connection with the above referenced bond financing and may not be relied on in any manner or for any purpose by any person or entity other than the addressees listed above and the owners of the Bonds, nor may copies be furnished to any other person or entity, without the prior written consent of K&L Gates LLP. We have served only as bond counsel to the City in connection with the Bonds and have not represented any other party in connection with the Bonds. Therefore, no attorney-client relationship shall arise by virtue of our addressing this opinion to persons other than the City. This opinion is limited to matters of Oregon law and applicable federal law, and we assume no responsibility as to the applicability of laws of other jurisdictions. Respectfully submitted,
K&L G ATES LLP
Lawyers APPENDIX D Proposed Forms of Continuing Disclosure Certificate
CONTINUING DISCLOSURE CERTIFICATE
$17,000,000 City of Tigard General Obligation Bonds Series 2011A
This Continuing Disclosure Certificate (the “Certificate”) is executed and delivered by City of Tigard, Oregon (the “Issuer”) in connection with the issuance of the Issuer’s General Obligation Bonds, Series 2011A (the “Security” or “Securities”).
Section 1. Purpose of Certificate. This Certificate is being executed and delivered by the Issuer for the benefit of the holders of the Securities and to assist the underwriter(s) of the Securities in complying with paragraph (b)(5) of the United States Securities and Exchange Commission Rule 15c2-12 (17 C.F.R. § 240.15c2-12) as amended (the “Rule”). This Certificate constitutes the Issuer’s written undertaking for the benefit of the owners of the Securities as required by paragraph (b)(5) of the Rule.
Section 2. Definitions. Unless the context otherwise requires, the terms defined in this Section shall, for purposes of this Certificate, have the meanings herein specified.
“Beneficial Owner” means any person who has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of any Securities, including persons holding Securities through nominees or depositories.
“Commission” means the United States Securities and Exchange Commission.
“MSRB” means the United States Municipal Securities Rulemaking Board or any successor to its functions.
“Official Statement” means the final official statement for the Securities dated January 25, 2011.
“Rule” means the Commission’s Rule 15c2-12 under the Securities Exchange Act of 1934, as it has been and may be amended.
Section 3. Financial Information. The Issuer agrees to provide or cause to be provided to the MSRB, the Issuer’s latest publicly available annual financial statements prepared in accordance with the Oregon Local Budget Law (or any successor statute) and in accordance with generally accepted accounting principles so prescribed by the Governmental Accounting Standards Board (or its successors) and generally of the type included in the Official Statement under the heading “Appendix B: Comprehensive Annual Financial Report for the fiscal year ended June 30, 2010.”
To the extent not included in its annual financial statements, the Issuer shall also provide information, of the type set forth in the Official Statement, containing: (1) the total real market value and total assessed value of property within the Issuer (as indicated in the records of the county assessors); (2) the amount or rate of property taxes levied by the Issuer for the fiscal
Page 1 - Continuing Disclosure Certificate year, and the amount of property taxes the Issuer received during the fiscal year; (3) the aggregate tax rate for all ad valorem property taxes levied within the boundaries of the Issuer; and, (4) the total principal amount of general obligation bonds and other tax-supported obligations of the Issuer which are outstanding at the end of the fiscal year
Section 4. Timing. The information described in the preceding paragraph shall be provided on or before nine months after the end of the Issuer's fiscal year, commencing with information for fiscal year 2010-2011. The information described in the preceding paragraph will be provided in the form of audited financial statements if they are then available, and otherwise will be provided in the form of unaudited financial statements. The Issuer's current fiscal year ends June 30. The Issuer may adjust this fiscal year by providing written notice of the change of fiscal year to the MSRB. In lieu of providing this annual financial information separately, the Issuer may cross-reference to other documents provided to the MSRB.
The Issuer agrees to provide or cause to be provided, in a timely manner, to the MSRB notice of its failure to provide the annual financial information described in Section 3 on or prior to the date set forth in the preceding paragraph.
If not provided as part of the annual financial information discussed above, the Issuer shall provide the Issuer’s audited annual financial statement prepared in accordance with the Oregon Local Budget Law (or any successor statute) and in accordance with generally accepted accounting principles so prescribed by the Governmental Accounting Standards Board (or its successors) when and if available to the MSRB.
Section 5. Material Events. The Issuer agrees to provide or cause to be provided to the MSRB in a timely manner not in excess of ten business days after the occurrence of the event, notice of any of the following events with respect to the Securities: 1. principal and interest payment delinquencies; 2. non-payment related defaults, if material; 3. unscheduled draws on debt service reserves reflecting financial difficulties; 4. unscheduled draws on credit enhancements reflecting financial difficulties; 5. substitution of credit or liquidity providers or their failure to perform; 6. adverse tax opinions, the issuance by the Internal Revenue Service 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 material events affecting the tax status of the security; 7. modifications to rights of security holders, if material; 8. bond calls, if material, and tender offers;
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9. defeasances; 10. release, substitution or sale of property securing repayment of the securities, if material; 11. rating changes; 12. bankruptcy, insolvency, receivership or similar event of the obligated person; (Note: For the purposes of the event identified in this paragraph 12, the event is considered to occur when any of the following occur: The appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person.); 13. the consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; 14. appointment of a successor or additional trustee or the change of name of a trustee, if material.
Section 6. Termination/Modification. The Issuer’s obligations to provide notices of material events shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Securities. This Certificate, or any provision hereof, shall be null and void if the Issuer (a) obtains an opinion of nationally recognized bond counsel to the effect that those portions of the Rule which require this Certificate, or any such provision, are invalid, have been repealed retroactively or otherwise do not apply to the Securities; and (b) notifies the MSRB of such opinion and the cancellation of this Certificate.
Section 7. Amendment. Notwithstanding any other provision of this Certificate, the Issuer may amend this Certificate, and any provision of this Certificate may be waived, provided that the following conditions are satisfied:
A. If the amendment or waiver relates to the provisions of Sections 3 or 5 hereof, it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of the Issuer with respect to the Securities, or the type of business conducted;
B. The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of
Page 3 - Continuing Disclosure Certificate the Rule at the time of the original issuance of the Securities, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and
C. The amendment or waiver either (i) is approved by the owners of the Securities or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the owners or Beneficial Owners of the Securities.
In the event of any amendment or waiver of a provision of this Certificate, the Issuer shall describe such amendment in the next annual report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a material event under Section 5 hereof, and (ii) the annual report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.
Section 8. Securities Owner’s Remedies Under This Certificate. The right of any holder of Securities or Beneficial Owner of Securities to enforce the provisions of this Certificate shall be limited to a right to obtain specific enforcement of the Issuer’s obligations hereunder, and any failure by the Issuer to comply with the provisions of this undertaking shall not be an event of default with respect to the obligations hereunder.
Section 9. Form of Information. All information required to be provided under this certificate will be provided in an electronic format as prescribed by the MSRB and with the identifying information prescribed by the MSRB.
Section 10. Submitting Information Through EMMA. So long as the MSRB continues to approve the use of the Electronic Municipal Market Access (“EMMA”) continuing disclosure service, any information required to be provided to the MSRB under this Certificate may be provided through EMMA. As of the date of this Certificate, the web portal for EMMA is emma.msrb.org.
Section 11. Choice of Law. This Certificate shall be governed by and construed in accordance with the laws of the State of Oregon, provided 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.
Dated as of the 3rd day of February, 2011.
City of Tigard, Oregon
______Financial and Information Services Director
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CONTINUING DISCLOSURE CERTIFICATE
$8,655,000 City of Tigard General Obligation Refunding Bonds Series 2011B
This Continuing Disclosure Certificate (the “Certificate”) is executed and delivered by City of Tigard, Oregon (the “Issuer”) in connection with the issuance of the Issuer’s General Obligation Refunding Bonds, Series 2011B (the “Security” or “Securities”).
Section 1. Purpose of Certificate. This Certificate is being executed and delivered by the Issuer for the benefit of the holders of the Securities and to assist the underwriter(s) of the Securities in complying with paragraph (b)(5) of the United States Securities and Exchange Commission Rule 15c2-12 (17 C.F.R. § 240.15c2-12) as amended (the “Rule”). This Certificate constitutes the Issuer’s written undertaking for the benefit of the owners of the Securities as required by paragraph (b)(5) of the Rule.
Section 2. Definitions. Unless the context otherwise requires, the terms defined in this Section shall, for purposes of this Certificate, have the meanings herein specified.
“Beneficial Owner” means any person who has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of any Securities, including persons holding Securities through nominees or depositories.
“Commission” means the United States Securities and Exchange Commission.
“MSRB” means the United States Municipal Securities Rulemaking Board or any successor to its functions.
“Official Statement” means the final official statement for the Securities dated January 25, 2011.
“Rule” means the Commission’s Rule 15c2-12 under the Securities Exchange Act of 1934, as it has been and may be amended.
Section 3. Financial Information. The Issuer agrees to provide or cause to be provided to the MSRB, the Issuer’s latest publicly available annual financial statements prepared in accordance with the Oregon Local Budget Law (or any successor statute) and in accordance with generally accepted accounting principles so prescribed by the Governmental Accounting Standards Board (or its successors) and generally of the type included in the Official Statement under the heading “Appendix B: Comprehensive Annual Financial Report for the fiscal year ended June 30, 2010.
To the extent not included in its annual financial statements, the Issuer shall also provide information, of the type set forth in the Official Statement, containing: (1) the total real market value and total assessed value of property within the Issuer (as indicated in the records of the county assessors); (2) the amount or rate of property taxes levied by the Issuer for the fiscal
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year, and the amount of property taxes the Issuer received during the fiscal year; (3) the aggregate tax rate for all ad valorem property taxes levied within the boundaries of the Issuer; and, (4) the total principal amount of general obligation bonds and other tax-supported obligations of the Issuer which are outstanding at the end of the fiscal year
Section 4. Timing. The information described in the preceding paragraph shall be provided on or before nine months after the end of the Issuer's fiscal year, commencing with information for fiscal year 2010-2011. The information described in the preceding paragraph will be provided in the form of audited financial statements if they are then available, and otherwise will be provided in the form of unaudited financial statements. The Issuer's current fiscal year ends June 30. The Issuer may adjust this fiscal year by providing written notice of the change of fiscal year to the MSRB. In lieu of providing this annual financial information separately, the Issuer may cross-reference to other documents provided to the MSRB.
The Issuer agrees to provide or cause to be provided, in a timely manner, to the MSRB notice of its failure to provide the annual financial information described in Section 3 on or prior to the date set forth in the preceding paragraph.
If not provided as part of the annual financial information discussed above, the Issuer shall provide the Issuer’s audited annual financial statement prepared in accordance with the Oregon Local Budget Law (or any successor statute) and in accordance with generally accepted accounting principles so prescribed by the Governmental Accounting Standards Board (or its successors) when and if available to the MSRB.
Section 5. Material Events. The Issuer agrees to provide or cause to be provided to the MSRB in a timely manner not in excess of ten business days after the occurrence of the event, notice of any of the following events with respect to the Securities: 1. principal and interest payment delinquencies; 2. non-payment related defaults, if material; 3. unscheduled draws on debt service reserves reflecting financial difficulties; 4. unscheduled draws on credit enhancements reflecting financial difficulties; 5. substitution of credit or liquidity providers or their failure to perform; 6. adverse tax opinions, the issuance by the Internal Revenue Service 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 material events affecting the tax status of the security; 7. modifications to rights of security holders, if material; 8. bond calls, if material, and tender offers;
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9. defeasances; 10. release, substitution or sale of property securing repayment of the securities, if material; 11. rating changes; 12. bankruptcy, insolvency, receivership or similar event of the obligated person; (Note: For the purposes of the event identified in this paragraph 12, the event is considered to occur when any of the following occur: The appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person.); 13. the consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; 14. appointment of a successor or additional trustee or the change of name of a trustee, if material.
Section 6. Termination/Modification. The Issuer’s obligations to provide notices of material events shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Securities. This Certificate, or any provision hereof, shall be null and void if the Issuer (a) obtains an opinion of nationally recognized bond counsel to the effect that those portions of the Rule which require this Certificate, or any such provision, are invalid, have been repealed retroactively or otherwise do not apply to the Securities; and (b) notifies the MSRB of such opinion and the cancellation of this Certificate.
Section 7. Amendment. Notwithstanding any other provision of this Certificate, the Issuer may amend this Certificate, and any provision of this Certificate may be waived, provided that the following conditions are satisfied:
A. If the amendment or waiver relates to the provisions of Sections 3 or 5 hereof, it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of the Issuer with respect to the Securities, or the type of business conducted;
B. The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of
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the Rule at the time of the original issuance of the Securities, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and
C. The amendment or waiver either (i) is approved by the owners of the Securities or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the owners or Beneficial Owners of the Securities.
In the event of any amendment or waiver of a provision of this Certificate, the Issuer shall describe such amendment in the next annual report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a material event under Section 5 hereof, and (ii) the annual report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.
Section 8. Securities Owner’s Remedies Under This Certificate. The right of any holder of Securities or Beneficial Owner of Securities to enforce the provisions of this Certificate shall be limited to a right to obtain specific enforcement of the Issuer’s obligations hereunder, and any failure by the Issuer to comply with the provisions of this undertaking shall not be an event of default with respect to the obligations hereunder.
Section 9. Form of Information. All information required to be provided under this certificate will be provided in an electronic format as prescribed by the MSRB and with the identifying information prescribed by the MSRB.
Section 10. Submitting Information Through EMMA. So long as the MSRB continues to approve the use of the Electronic Municipal Market Access (“EMMA”) continuing disclosure service, any information required to be provided to the MSRB under this Certificate may be provided through EMMA. As of the date of this Certificate, the web portal for EMMA is emma.msrb.org.
Section 11. Choice of Law. This Certificate shall be governed by and construed in accordance with the laws of the State of Oregon, provided 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.
Dated as of the 3rd day of February, 2011.
City of Tigard, Oregon
______Financial and Information Services Director
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(THIS PAGE INTENTIONALLY LEFT BLANK) APPENDIX E Book-Entry Only System
The following information has been provided by DTC. The City makes no representation regarding the accuracy or completeness thereof. Beneficial Owners should therefore confirm the following with DTC or the Participants (as hereinafter defined).
(THIS PAGE INTENTIONALLY LEFT BLANK) The Depository Trust Company A subsidiary of The Depository Trust & Clearing Corporation
Sample Offering Document Language Describing DTC and Book-Entry-Only Issuance
1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the securities (the “Securities”). The Securities will be issued as fully-registered securities registered 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 Security certificate will be issued for [each issue of] the Securities, [each] in the aggregate principal amount of such issue, and will be deposited with DTC. [If, however, the aggregate principal amount of [any] issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.]
2. DTC, the world’s largest securities 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 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 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 Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both 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 is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, 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 & Poor’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 and www.dtc.org.
3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest
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SOL-12/07 of each actual purchaser of each Security (“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 purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC 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 Securities with DTC 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 Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
5. 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. [Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.]
6. Redemption notices shall be sent to DTC. If less than all of the Securities 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.
7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer 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 Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).
8. Redemption proceeds, distributions, and dividend payments on the Securities 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
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SOL-12/07 corresponding detail information from Issuer or Agent, on payable date in accordance with their respective holdings 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, Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to [Tender/Remarketing] Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant’s interest in the Securities, on DTC’s records, to [Tender/Remarketing] Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Securities to [Tender/Remarketing] Agent’s DTC account.
10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.
11. Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC.
12. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof.
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