CITY OF PITTSBURGH, PENNSYLVANIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003 Prepared by: Office ofCity Controller TOM FLAHERTY,CONTROLLER 1- V ^ Tom Flaherty City Controller H 31 O D C n H INTRODUCTION CITY OF PITTSBURGH,PENNSYLVANIA Table of Contents Page I. Introductory Section: Table of Contents I-l Certificate of Achievement 1-5 City Officials 1-7 IL Financial Section: Independent Auditors' Report 1 Management's Discussion and Analysis (Required Supplementary Information) 3-14 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Assets/(Deficit) 15-16 Statement of Activities 17-18 Fund Financial Statements: Governmental Fund Financial Statements: Balance Sheet - Governmental Funds 19 Reconciliation of the Balance Sheet to the Statement of Net Assets - Governmental Funds 20 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 21 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 22 Budgetary Comparison Statement - General Fund 23 Budgetary Comparison Statement - Community Development Fund 31 Fiduciary Fund Financial Statements: Statement of Fiduciary Net Assets 33 Statement of Changes in Fiduciary Net Assets 34 Combining Statements of Component Units: Statement of Net Assets 35 Statement of Activities 36-37 Notes to Basic Financial Statements: 1. Organization and Summary of Significant Accounting Policies 38 A. The Financial Reporting Entity 38 B. Net Asset Deficit and Liquidity 39 C. Individual Component Unit Disclosures 39 D. Financial Statement Presentation 44 E. Basis of Accounting 46 F. Cash and Cash Equivalents 47 G. Investments 47 H. Due To/From Other Governments 47 CITY OF PITTSBURGH,PENNSYLVANIA Table of Contents Page I. Taxpayer Assessed Taxes Receivable 47 J. Assets Held for Sale 47 K. Loans Receivable 48 L. Other Receivables 48 M. Capital Assets 48 N. Workers' Compensation 48 O. Compensated Absences • 49 P. Pensions 49 Q. Long-Term Obligations 49 R. Interfund Transactions 49 S. Encumbrances 50 T. Net Assets 50 U. Use of Estimates 50 2. Budgets and Budgetary Accounting 50 3. Deposits and Investments 51 A. Governmental Funds and Agency Funds 55 B. Pension Trust 55 C. Water and Sewer Authority 57 D. Stadium Authority 57 E. Public Parking Authority 57 F. Urban Redevelopment Authority and PDF Trust 57 4. Transactions With the Pittsburgh Water and Sewer Authority 58 A. Cooperation Agreement 58 B. System Lease 58 5. Real Estate Taxes 59 6. Capital Assets 60 7. Pension Plans 01 A. Organization and Description of Plans 61 B. Funding Status and Progress 66 8. Other Postemployment Benefits 70 MUMiiiiiaiiii CITY OF PITTSBURGH,PENNSYLVANIA Table of Contents Page 9. Long-Term Liabilities 72 A. Council and Public Election General Obligation Bonds 88 B. Stadium Authority g9 C. Pittsburgh Water and Sewer Authority 90 D. Urban Redevelopment Authority of Pittsburgh 90 E. Urban Redevelopment Authority of Pittsburgh 92 F. Other Long-Term Obligations 95 JO. Due From/To Other Governments 96 11. Interfund Receivable and Payable Balances 97 12. Operating Transfers 97 13. Fund Deficits 93 14. Related Party Transactions 98 15. Construction and Lease Commitments 99 16. Regional Asset District Revenues 100 17. Contingencies jOO 18. Risk Management jOi Required Supplementary Information: Pension Trust Funds Schedule of Funding Progress j02 Supplementary Information: Combining Statement of Fiduciary Net Assets - Agency Funds 103 Combining Balance Sheet — Other Governmental Funds 104 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Other Governmental Funds IO5 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Data on the Budgetary Basis - Capital Projects 106 Budgetary Comparison Statement - Capital Projects Funds 107 CITY OF PITTSBURGH,PENNSYLVANIA Table of Contents Page III. Statistical Section Table 1 - General Govemmenial Revenues 108-109 Table 1A - General Fund Tax Revenues by Source 110-111 Table 2 - General Governmental Expenditures 112-113 Table 3 - Assessed Value, Tax Rate, Levy, and Collections 114-115 Table 4 - Assessed and Estimated Actual Value of Property 116 Table 5 - Property Tax Rales - Direct and Overlapping Governments 117 Table 6 - Pri ncipal Real Estate Taxpayers 118 Table 7 - Net Debt and Remaining Debt Incurring Margin in Accordance With Act No. 52, Approved April 28,1978 119-120 Table 8 - Ratio of Net General Obligation Bonded Debt to Assessed Value and Net General Obligation Bonded Debt Per Capita 121 Table 9- Ratio of Annual Debt Service Expenditures for General Obligation Bonded Debt to Total General Governmental Expenditures 122 Table 10- Computation of Direct and Overlapping Debt 123 Table 11 - Revenue Bond Coverage - Pittsburgh Water and Sewer Authority 124 Table 11A - Revenue Bond Coverage - The Stadium Authority of the City of Pittsburgh 125 Table 12 - Demographic Statistics 126 Table 13 - Property Value, Construction, and Bank Deposits 127 Table 14 - City Employment 128 IV. Other Information Salaries and Surety Bonds of Principal Officials 129 Schedule of Bonds and Notes Payable 130-167 Certificate of Achievement for Excellence in Financial Reporting Presented to City of Pittsburgh, Pennsylvania For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 31,2002 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports(CAFRs) achieve the highest standards in government accounting and financial reporting. vMTronjtirs CAWOA coxpounoN President Executive Director TUT CITY OF PITTSBURGH,PENNSYLVANIA ELECTED CITY OFFICIALS December 31,2003 n MAYOR Tom Murphy CONTROLLER Tom Flaherty MEMBERS OF COUNCIL Eugene Ricciardi, President, District 3 Alan Hertzberg, Finance/Budget Committee, District 2 Luke Ravenstahl, District 1 Sala Udin, District 6 Jim Motznik (President Pro Tem),District 4 Doug Shields, District 5 Len Bodack, District 7 Bill Peduto, District 8 Twanda Carlisle, District 9 1-7 CITIZENS OF THE CITY OF PITTSBURGH CITY MAYOR ECONOMIC DEVELOPMENT CITY COUNCIL CONTROLLER MANAGEMENT & BUDGET SERVICE CENTER CITY ENQINESRINO A INFORMATION CONSTRUCTION CITY CLERK SYSTEMS GENERAL MAGISTRATES SERVICES COURT HUMAN PUBLIC WORKS RELATIONS COMMISSION pnTfiQURQH STADIUM WATER & 8BWBR POLICE PUBLIC SAFETY FINANCE AUTHORITY AUTHORITY \ liRRAN SPORTS A PARKS & FIRE LAW ReoeVBLOPMeNT RECREATION EXHIBITION AUTHORITY h" AUTHORITY EMERGENCY OFFICE OF EQUIPMENT HOUSINO CITIZENS POLICE MEDICAL MUNICIPAL LEASING AUTHORin REVIEW BOARD SERVICES INVBSTIOATIONS AUTHORITY EMERGENCY PERSONNELA OPPICQ OP BUSIH6SS i PARKING OPERATIONS CIVIL SERVICE CMPIOYMEHT AUTHORITY CENTER COMMISSION OPPOntUNITIBS BUILDING CITY PLANNING INSPECTION FINANCIAL o > KPMG LLP Telephone 412 391 9710 One Mellon Center Fax 412 391 8963 Pittsburgh. PA 15219 Internet www.us.kpmg.com Independent Auditors' Report The Honorable Members of Council City of Pittsburgh. Pennsylvania: We have audited the accompanying financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Pittsburgh. Pennsylvania (the City), as of and for the year ended December 31, 2003. which collectively comprise the City's basic financial statements, as listed in the accompanying table of 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. We did not audit the financial statements of the Urban Redevelopment Authority of Pittsburgh (the URA). the Public Parking Authority of Pittsburgh (the Parking Authority), the Pittsburgh Water and Sewer Authority (the PWSA). and the Stadium Authority of the City of Pittsburgh (the Stadium Authority), which represent 99% of the assets and 97% of the revenues of the aggregate discretely presented component units. We also did not audit the financial statements of the City of Pittsburgh Pension Trust Fund (the Pension Fund), which represents 94% and 81%, respectively, of the assets and revenues (including pension additions) of the aggregate remaining fund information. These financial statements were audited by other auditors whose reports thereon have been furnished to us, and our opinions, insofar as they relate to the amounts included for the URA. the Parking Authority, the PWSA, the Stadium Authority, and the Pension Fund, are based solely upon the reports of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the reports of other auditors provide a reasonable basis for our opinions. In our opinion, based on our audit and the reports of other auditors, the financial statements