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Home My WebLink AboutItem 4D: Resolution Acknowledging Receipt of CAFR ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Adoption of Resolution 4924 Acknowledging Receipt of the City of Eugene, Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2007 Meeting Date: January 14, 2008 Agenda Item Number: 4D Department: Central Services Staff Contact: Fionan Cronin www.eugene-or.gov Contact Telephone Number: 682-5394 ISSUE STATEMENT This is a resolution acknowledging receipt of the City of Eugene, Comprehensive Annual Financial Report (CAFR) for the fiscal year which ended June 30, 2007. This resolution demonstrates compliance with ORS 297.465(2), which requires that a copy of the City’s CAFR, containing a signed expression of opinion, be furnished to each member of the governing body. BACKGROUND Under Oregon Municipal Audit Law, the City is required each fiscal year to contract with an authorized accounting firm for the audit of its accounts and fiscal affairs (ORS 297.425). The firm of Isler CPA (auditors) has completed the audit of the City of Eugene's financial statements for the fiscal year which ended June 30, 2007 and issued an unqualified opinion on the basic financial statements. The auditors conduct the audit of the City's basic financial statements in accordance with generally accepted auditing standards and the Minimum Standards for Audits of Oregon Municipal Corporations. In addition, as a recipient of federal grants, the City is subject to the Federal Single Audit Act of 1984, which requires that the audit be conducted in accordance with Government Auditing Standards, issued by the Comptroller General of the United States and Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments and Non-Profit Organizations. These standards and OMB Circular A-133 require that the auditors plan and perform the audit to obtain reasonable assurance about whether the basic financial statements are free of material misstatement and whether the City complied with the laws and regulations pertaining to federally-funded programs. In addition to state and federal requirements, the City has bond covenants in connection with certain debt issuances which require that the City issue annual audited financial statements. Management is responsible for the information contained in, and the preparation of, the City's financial statements. To effectively fulfill this responsibility and to contain the cost of auditor services, City staff devotes significant effort to the closing of accounting records, the preparation of schedules and audit workpapers, and the production of the CAFR. This also results in staff expertise being developed on specific financial and service issues that can then be used to assist departments and other pertinent parties. F:\CMO\2008 Council Agendas\M080114\S0801144D.doc The key pages of the CAFR which the council may wish to review are pages 11-12 and pages 155-156, where two of the auditors' reports are found. In the first report, the auditors have issued an unqualified opinion (also known as a "clean opinion") on the City's basic financial statements, indicating that the City has prepared these statements in conformity with generally accepted accounting principles (GAAP). GAAP for state and local governments is promulgated by the Governmental Accounting Standards Board (GASB) to ensure consistency in accounting and comparability in financial reporting among state and local governments. A clean opinion is a fundamental financial goal for every government, as it represents the highest level of opinion a government can receive from its independent auditors. A clean opinion is an important indicator of sound financial management and creditworthiness to the citizens, other governmental jurisdictions (state and federal), credit rating agencies, investment bankers, bond holders, and other private sector entities. In the second report, the auditors address the City’s compliance with applicable provisions of Oregon Revised Statutes including, requirements related to debt, deposit of public funds, preparation and adoption of the budget, accounting records and related internal control structure, etc. In addition, the auditors also report if the City had any significant internal control weaknesses. The auditors noted that the City complied with all laws with one exception - the City exceeded its legal budget (page 47) in three funds. ? The Urban Renewal Agency (URA) General Fund exceeded its operating budget by $72,443, or 24%. When PDD staff finalized the FY07 budget in February, 2006 for the Urban Renewal, they budgeted 53% of operating expenses to Downtown district and 47% to the Riverfront district. During FY07, however, expenditures for Downtown activity consumed approximately 75% of the total staff expenditures with the majority of the staff effort focused on the West Broadway project in the latter part of the year. As a result, the URA General Fund exceeded its approved budget. The money to pay for this over-expenditure came from within the URA Debt Service Fund. ? The URA Debt Service Fund, which provides funding to the URA General Fund for administrative expenses, exceeded its transfer authority by $72,425, or 6%. This was a result of the over- expenditure in the URA General Fund, as described above. ? The Professional Services Internal Service Fund (PSF Fund) overspent its transfer authority by $13,947, or 3%. As part of the FY07 budget process, the facilities professional function was moved from the PSF Fund to the Facilities Internal Service Fund (Facilities Fund). Staff under-estimated the transfer of equity from the PSF Fund to the Facilities Fund by this amount. ORS require that all over-expenditures be brought to the attention of the governing body. Because there is no dollar threshold, it is common for local governments to have occasional over-expenditures. As a benchmark for reference, in the past decade with total annual budgets of between $400-500 million, the City has been cited for four other over-expenditures totaling $11,403. This indicates that over- expenditures occur rarely. Two additional reports, beginning on page 159, specifically address compliance with Federal laws, regulations, contracts and grants, and indicate that the auditors found no material instances of the City's noncompliance with these requirements, nor were there any findings or questioned costs noted in relation to Federal awards made to the City. F:\CMO\2008 Council Agendas\M080114\S0801144D.doc The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Eugene for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2006. This was the 31st consecutive year that the City has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized CAFR, which satisfies both generally accepted accounting principles and applicable legal requirements. In addition, the requirements for the certificate provide much of the information needed for the City’s credit assessments. RELATED CITY POLICIES Policy B.1 of the City’s Financial Management Goals and Policies states that “The City will maintain an accounting and financial reporting system that allows reporting in conformance with Generally Accepted Accounting Principles and Oregon Local Budget Law and will issue a Comprehensive Annual Financial Report each fiscal year.” This action signifies formal completion of this process for the fiscal year which ended June 30, 2007, and demonstrates Council’s compliance with the policy. COUNCIL OPTIONS None. CITY MANAGER’S RECOMMENDATION The City Manager recommends adoption of the resolution. SUGGESTED MOTION Move to adopt Resolution 4924 acknowledging receipt of the Comprehensive Annual Financial Report (CAFR) for the City of Eugene for the fiscal year ended June 30, 2007. ATTACHMENTS A.Resolution B.Copy of the 2007 Comprehensive Annual Financial Report FOR MORE INFORMATION Staff Contact: Fionan Cronin Telephone: 682-5394 Staff E-Mail: finn.j.cronin@ci.eugene.or.us F:\CMO\2008 Council Agendas\M080114\S0801144D.doc ATTACHMENT A RESOLUTION NO. A RESOLUTION ACKNOWLEDGING THE RECEIPT OF THE COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY OF EUGENE FOR THE FISCAL YEAR ENDED JUNE 30, 2007 The City Council of the City of Eugene finds that: The firm of Isler CPA has completed the audit of the financial statements of the City of Eugene for the fiscal year ended June 30, 2007, as required by ORS 297.425 and, pursuant to ORS 297.465, reported to the Mayor and City Council on its findings. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Eugene, a Municipal Corporation of the State of Oregon, as follows: Section 1. That the Council hereby acknowledges that it has received the Comprehensive Annual Financial Report for the fiscal year ended June 30, 2007. The foregoing resolution adopted the 14th day of January, 2008. City Recorder Ý·¬§ ±º Û«¹»²»ô Ñ®»¹±² Ü»²²· Óò Ì¿§´±®ô Ý·¬§ Ó¿²¿¹»® Ý±³°®»¸»²·ª» ß²²«¿´ Ú·²¿²½·¿´ Î»°±®¬ Ú·½¿´ Ç»¿® Û²¼»¼ Ö«²» íðô îððé COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF EUGENE, OREGON FISCAL YEAR ENDED JUNE 30, 2007 REPORT PREPARED BY THE CITY FINANCIAL SERVICES DIVISION ×ÒÌÎÑÜËÝÌÑÎÇ ÍÛÝÌ×ÑÒ CITY OF EUGENE, OREGON Comprehensive Annual Financial Report Year ended June 30, 2007 Table of Contents ExhibitPage(s) INTRODUCTORY SECTION Letter of Transmittal 1 - 7 GFOA Certificate of Achievement 8 Organizational Chart 9 Principal City Officials 10 FINANCIAL SECTION Independent Auditor’s Report 11 - 12 Management’s Discussion and Analysis 13 - 22 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets 1 23 Statement of Activities 2 24 Fund Financial Statements: Balance Sheet - Governmental Funds 3 25 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 4 26 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 5 27 Statement of Fund Net Assets - Proprietary Funds 6 28 - 29 Statement of Revenues, Expenses, and Changes in Fund Net Assets - Proprietary Funds 7 31 Statement of Cash Flows - Proprietary Funds 8 32 - 33 Notes to Basic Financial Statements 35 - 73 i CITY OF EUGENE, OREGON Comprehensive Annual Financial Report Table of Contents, continued Schedule Page(s) FINANCIAL SECTION, CONTINUED Required Supplementary Information: Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual: General Fund A-1 75 Community Development Fund A-2 76 Notes to Required Supplementary Information 77 - 78 Other Supplementary Information: Nonmajor Governmental Funds Combining Statements: Combining Balance Sheet B-1 79 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances B-2 80 Special Revenue Funds: Combining Balance Sheet - Nonmajor Special Revenue Funds C-1 81 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Special Revenue Funds C-2 82 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual: Construction Permits Fund C-3 83 Library Local Option Levy Fund C-4 84 Library, Parks, and Recreation Fund C-5 85 Public Safety Answering Point Fund C-6 86 Road Fund C-7 87 Solid Waste and Recycling Fund C-8 88 Special Assessment Management Fund C-9 89 Telecom Registration and Licensing Fund C-10 90 ii CITY OF EUGENE, OREGON Comprehensive Annual Financial Report Table of Contents, continued Schedule Page(s) FINANCIAL SECTION, CONTINUED Other Supplementary Information, continued: Special Revenue Funds, continued: Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual, continued: Transportation Utility Fund C-11 91 Urban Renewal Agency General Fund C-12 92 Urban Renewal Agency Riverfront Fund C-13 93 Youth and School Services Levy Fund C-14 94 Debt Service Funds: Combining Balance Sheet - Nonmajor Debt Service Funds D-1 95 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Debt Service Funds D-2 96 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual: General Obligation Debt Service Fund D-3 97 Library Debt Service Fund D-4 98 Special Assessment Bond Debt Service Fund D-5 99 Urban Renewal Agency Debt Service Fund D-6 100 Urban Renewal Agency Riverfront Debt Service Fund D-7 101 Capital Projects Funds: Combining Balance Sheet - Nonmajor Capital Projects Funds E-1 103 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Capital Projects Funds E-2 104 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual: General Capital Projects Fund E-3 105 Road Capital Projects Fund E-4 106 Special Assessment Capital Projects Fund E-5 107 iii CITY OF EUGENE, OREGON Comprehensive Annual Financial Report Table of Contents, continued Schedule Page(s) FINANCIAL SECTION, CONTINUED Other Supplementary Information, continued: Capital Projects Funds, continued: Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual, continued: Systems Development Capital Projects Fund E-6 108 Urban Renewal Agency Capital Projects Fund E-7 109 Urban Renewal Agency Riverfront Capital Projects Fund E-8 110 Enterprise Funds: Schedule of Revenues, Expenses, and Changes in Fund Net Assets - Budget and Actual: Ambulance Transport Fund F-1 111 Municipal Airport Fund F-2 112 Parking Services Fund F-3 113 Stormwater Utility Fund F-4 114 Wastewater Utility Fund F-5 115 Internal Service Funds: Combining Statement of Net Assets G-1 117 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets G-2 119 Combining Statement of Cash Flows G-3 120 - 121 Schedule of Revenues, Expenses, and Changes in Fund Net Assets - Budget and Actual: Facilities Services Fund G-4 122 Fleet Services Fund G-5 123 Information Systems and Services Fund G-6 124 Professional Services Fund G-7 125 Risk and Benefits Fund G-8 126 iv CITY OF EUGENE, OREGON Comprehensive Annual Financial Report Table of Contents, continued Schedule Page(s) FINANCIAL SECTION, CONTINUED Other Supplementary Schedules: Schedule of Property Tax Transactions H-1 127 Schedule of Bonded Debt Transactions H-2 128 - 129 STATISTICAL TABLES SECTION Government-wide Information: Net Assets by Component I-1 131 Changes in Net Assets I-2 132 - 133 Fund Information: Fund Balances - Governmental Funds I-3 134 Changes in Fund Balances - Governmental Funds I-4 136 - 137 Taxable Assessed Value and Actual Value of Property I-5 138 Direct and Overlapping Property Tax Rates I-6 139 Property Tax Levies and Collections I-7 140 Ten Principal Property Taxpayers I-8 141 Ratio of Outstanding Debt by Type I-9 142 Ratio of General Bonded Debt Outstanding I-10 143 Direct and Overlapping Governmental Activities Debt I-11 144 Legal Debt Margin - General Obligation Bonded Debt I-12 145 Rate Covenant - Airport Revenue Refunding Bonds, Series 2000 I-13 146 Pledged-Revenue Coverage - Special Assessment Bonds I-14 147 Demographic and Economic Statistics I-15 148 Ten Principal Employers I-16 149 City Government Employees by Function/Program I-17 150 v CITY OF EUGENE, OREGON Comprehensive Annual Financial Report Table of Contents, continued Schedule Page(s) STATISTICAL TABLES SECTION, CONTINUED Fund Information, continued: Operating Indicators by Function/Program I-18 151 Capital Asset Statistics by Function/Program I-19 152 AUDIT COMMENTS AND GOVERNMENT AUDITING STANDARDS SECTIONS Audit Comments: Report of Independent Accountants on Internal Control and Other Comments and Disclosures Required by State Regulators 155 - 156 Government Auditing Standards: Government Auditing Standards Report: Independent Auditor’s Report on Internal Control Over Financial Reporting on Compliance and Other Matters Based on an Audit of Financial Statements Performed In Accordance with Government Auditing Standards 159 - 160 OMB Circular A-133 (Single Audit) Report: Independent Auditor’s Report on Compliance with Requirements Applicable to Each Major Program and Internal Control Over Compliance in Accordance with OMB Circular A-133 163 - 164 Schedule of Findings and Questioned Costs 165 Schedule of Expenditures of Federal Awards J-1 166 - 167 Notes to Schedule of Expenditures of Federal Awards 168 vi Central Services Finance Division City of Eugene th 100 W 10 Avenue, Suite 400 Eugene, Oregon 97401 (541) 682-5041 December 10, 2007 (541) 682-5802 FAX www.eugene-or.gov Citizens of Eugene The Honorable Kitty Piercy, Mayor Members of the City Council Angel Jones, City Manager Pro Tem It is my pleasure to submit to you the Comprehensive Annual Financial Report of the City of Eugene, Oregon, for the fiscal year ended June 30, 2007. Local ordinances and state statutes require that the City of Eugene issue a report on its financial position and activity within six months of the close of each fiscal year. In addition, this report must be audited in accordance with generally accepted auditing standards by an independent firm of certified public accountants. This report consists of management’s representations concerning the finances of the City. Consequently, responsibility for the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with management. To provide a reasonable basis for making these representations, management has established an internal control structure designed to safeguard City assets against loss, theft, or misappropriation, and to ensure the reliability of financial records for preparing financial statements in conformity with generally accepted accounting principles (GAAP). The internal control structure has been designed to provide reasonable, but not absolute, assurance that these objectives are being met. The concept of reasonable assurance recognizes (1) the cost of the control structure should not exceed the benefits likely to be derived; and (2) the evaluation of cost and benefits require estimates and judgments by management. We believe that the City's internal control structure adequately safeguards assets and provides reasonable assurance of proper recording of financial transactions. To the best of our knowledge and belief, the enclosed data is presented accurately, in all material respects, along with disclosures necessary to provide the reader with a reasonable understanding of the City's financial affairs. The City’s financial statements were audited by Isler CPA, a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended June 30, 2007 are free of material misstatement. 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 management; and evaluating the overall financial statement presentation. The independent auditor 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, 2007, are fairly presented, in all material respects, in conformity with GAAP. The independent auditor’s report on the Basic Financial Statements is included in the Financial Section of this report. In addition to meeting the requirements set forth above, the independent audit was also designed to meet the special needs of federal grantor agencies as provided for in the Federal Single Audit Act and the Office of Management and Budget’s (OMB) Circular A-133. These standards require the independent auditor to not only report on the fair presentation of the basic financial statements, but also on the audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. The results of the independent audit for the fiscal year ended June 30, 2007, indicated no instances of material weaknesses in the internal control structure or significant violations of applicable laws and regulations. The independent auditor’s reports related specifically to the Single Audit and OMB Circular A-133 are included in the Government Auditing Standards Section of this report. ï 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 independent auditor’s report on the basic financial statements. City Overview Incorporated in 1862, the citizens of Eugene adopted the council/manager form of government in 1944. The City Council develops legislation and policies to direct the City but hires a professional manager (the City Manager) to oversee City of Eugene personnel and operations. The Mayor is elected at-large to a four-year term and acts as the formal representative of the City and presides over council meetings. The City Council has eight members elected by ward to four-year terms, with one-half of the council elected every two years. Empowered by state statute, the City levies a property tax on real and personal property located within its boundaries. As of July 1, 2006, 148,595 people resided in Eugene, making it Oregon’s third largest city. City boundaries encompassed 42 square miles in Lane County. The Willamette River runs through the heart of the City and the McKenzie River joins the Willamette to the north of town. Eugene is the center of government and education including County, State and Federal government agencies, and is home to the University of Oregon. Since 1990, population within the city limits has increased an average of 2.0% annually. The size of the City has increased by approximately 4 square miles. The City provides a full range of municipal services. These services include police, fire, emergency medical services, and municipal court; community planning and development; parks, library, recreational and cultural activities; airport, wastewater treatment, stormwater management, and general public works; and central services, administration, and other functions associated with a full-service city. These services are provided primarily to citizens who live within the corporate limits. However, many of the services and facilities operated by the City are provided for and financed by regional service areas larger than the City. For financial reporting purposes, the City includes all funds of the City subject to appropriation by the City Council. In addition, the City includes all governmental organizations and activities for which the City Council is financially accountable. Therefore, the financial statements of the Urban Renewal Agency of the City of Eugene, although legally separate, have been blended with those of the City by including them in the appropriate statements and schedules in this report. For financial planning and control, the City prepares and adopts an annual budget in accordance with Oregon Revised Statutes Chapters 294.305 through 294.565. Budgeting in Oregon is a joint effort between the people affected by the budget and the appointed and elected officials responsible for providing the services. Elected or appointed officials determine the allocation of resources to the service system. The State of Oregon Department of Revenue checks to see that the budget is prepared according to law. Citizens involved with budget preparation see that programs they want and need are adequately funded. To give the public ample opportunity to participate in the budgeting process, Local Budget Law requires that a budget officer be appointed and a budget committee be formed. The budget officer draws together necessary information and prepares the first draft of the budget. The budget committee then reviews and revises the proposed budget before making a recommendation to the City Council. Notices are published, budgets are made available for review, and at least two public hearings are heldone meeting is held before the Budget Committee, which is composed of the eight City Councilors and eight citizen members, and one meeting is held before the City Council. These requirements encourage public participation in the budget making process and give public exposure to budgeted programs and fiscal policies before the governing body of the municipal corporation adopts the budget. The legally adopted budget is at the fund and departmental level for current expenditures, with separate appropriations established for capital projects, debt service, interfund transfers, interfund loans, intergovernmental expenditures, and miscellaneous fiscal transactions. Budgetary control is internally administered at a more restrictive level. Budget-to-actual comparisons are provided in this report for each individual fund for which an appropriated annual budget has been adopted. For the General Fund and Community Development Special Revenue Fund this comparison is presented as required supplementary information in this report. For all other funds, this comparison is presented as other supplementary information. î Local Economy Eugene is located in western Oregon in the southern Willamette Valley, in close proximity to the Pacific Ocean and the Cascade Mountain Range. Residents and visitors enjoy the mild climate, recreation and fitness opportunities, and the diverse cultural events it has to offer. Interstate 5 connects Eugene to the Portland metropolitan area and Washington state to the north, and California to the south. State highways provide access east to the Cascade Mountains, and the recreational opportunities of eastern Oregon, and to the picturesque coastal towns, state parks, and public beaches to the west. Eugene’s municipal airport is served by five air carriers, linking Eugene to Seattle, Portland, Los Angeles, Denver, Phoenix, Las Vegas, San Francisco, and Salt Lake City. Eugene is the largest city in Lane County and the third largest city in Oregon, representing 44% of the county’s and 4% of the state’s population. The Eugene economy typically follows the trend of the national economy. In FY07 Eugene continued to rebound from the recession of 2001-2002. Employment grew at about 1.9% from the prior year. Approximately 86,700 jobs were located within Eugene in 2006, representing 60% of all jobs in Lane County and 63% of all non-manufacturing jobs. The unemployment rate for city residents was 4.9%; this was about 0.5% below the County and State levels. The City of Eugene’s unemployment rate is typically less than the State and County rates, but greater than the national average. Average Annual Unemployment As a Percent of Labor Force 9 8 7 % 6 5 4 3 19901991199219931994199519961997199819992000200120022003200420052006 EugeneLane CountyOregonU.S. Source: U.S. Dept. of Labor, Bureau of Labor Statistics The two pillars providing stability in Eugene’s economy are its large public sector base and steady population in- migration. County, State, and Federal government agencies are centered in Eugene, as well as the University of Oregon and Lane Community College. The public sector industry does not grow rapidly during periods of economic expansion, but also does not contract as fast when other parts of the economy are sluggish. In-migration is a second stabilizing driver to the local economy. Multiple characteristics play a role in encouraging new residents. The University of Oregon, excellent access to a wide range of recreational opportunities, attractive environmental amenities, mature and diverse arts and cultural offerings, and relative lower cost of living all play a role in encouraging a steady flow of new residents. California represents the largest source of new residents to the area due to Eugene’s proximity to that state. The local unemployment rate has declined since its peak in 2003 and job growth continues at a moderate pace. The steady influx of new residents has helped the economy diversify away from lumber and wood manufacturing. An increased share of employment is in non-manufacturing sectors, such as professional and business services, financial activities, and education and health services. Additionally, the construction industry has benefited from the demand for residential housing and related commercial development. The construction sector will continue to be an economic growth engine in the economy. Several large public and commercial construction projects now underway have offset decreasing demand for residential construction due to rising interest rates. Enrollment at the University of Oregon has remained stable at about 20,400 for several years. The University is a major center for academic and research activity. Its presence has contributed to the level of education in Eugene í being well above the national average, with 39.9% of the City’s population having earned a Bachelor’s degree or higher. Eugene has become a hub for scientific research and educational support industries in Oregon. These two industries combined are projected to grow 25% – well above the countywide average of 14.8% – between 2004 and 2014. These emerging industries owe much of their growth to connections with the University of Oregon. Many owners, employees, and researchers of these businesses have ties with the university. The symbiotic relationship between the university and research and support industries has helped these industries grow and produce or contribute to the success of many new and innovative businesses. Long-term Financial Planning The City of Eugene recognizes the importance of strategic long term financial planning. Each year, forecasts are prepared to estimate the financial health of each major fund over the next six years. These forecasts are included in the published budget document. The City also utilizes three additional important planning documents: the Capital Improvement Program, the Multi-Year Financial Plan, and the Debt Affordability Study. In March 2007 the City Council approved the Capital Improvement Program (CIP) for FY08 to FY13. The CIP forecasts the City’s capital needs over a six-year period based on various long-range plans, goals, and policies. The underlying strategy of the CIP is to plan for land acquisition, construction, and major maintenance of public facilities necessary for the safe and efficient management of City assets. A critical element of a balanced CIP is the provision of funds to preserve or enhance existing facilities and provide new assets which will help the City respond to changing service needs and community growth. The program serves as the basis for the Capital Budget and is updated every two years. The FY08-13 CIP totals about $175 million in projects with funding secured or identified from a variety of funds. Just over $51 million in anticipated capital spending will be for Parks and Open Space projects, with neighborhood and community park acquisition and development accounting for over $39 million of this amount. Transportation is the second largest category with over $20 million put towards pavement preservation. Airport improvements, including expansion of taxiways and cargo handling facilities, will account for $33 million. About $22 million for Public Buildings will primarily be invested in preservation and capital maintenance of existing city facilities. Improvements to preserve and rehabilitate the City’s Wastewater system will be funded with $16 million. Included in these improvements is $11.8 million to preserve and rehabilitate the aging wastewater system, decrease inflow and infiltration, and address increased wet weather flows. Under the City’s Stormwater program, stream corridor acquisition, bank stabilization, system upgrades, and capacity enhancements are to be funded at $12.8 million. In January 2007, the Mayor and members of the Budget Committee reviewed the Multi-Year Financial Plan challenges and (MYFP) for FY08 to FY13. The MYFP is an annual compilation of significant, but unfunded, opportunities that are likely to occur over the next six years. It serves as a strategic planning tool and helps address Council’s goal for “Fair, Stable, and Adequate Resources.” It provides an important means to improve the City’s ability to link the council goals process, the Capital Improvement Program, the General Fund Six-year Financial Forecast, other project or service specific strategic plans, and the annual budget process. The MYFP includes General Fund and other current service funding shortfalls, preservation and maintenance of existing City assets and facilities, and implementation of adopted plans or policies. The FY08-13 MYFP identified a total of about $429 million in unfunded challenges and opportunities that may occur within the next six years. These include items with capital, operating, and preservation and maintenance needs. The estimated unfunded costs by group are $59.4 million for General Fund shortfall and continuing current services, $64.2 million to preserve and maintain existing assets, and $305.4 million to implement adopted plans and policies. With the significant amount of future capital projects, as well as identified unfunded needs, the City also recognizes the need to be thoughtful and deliberate in planning future debt levels. As a result, the City developed aDebt Affordability Study in 2003, and updates that study every two years in conjunction with the CIP update. This study looks at not just the legally allowable level of debt, but the level of debt that the community would consider to be affordable, given the ability of the community to pay for that debt. The Budget Committee adopted a debt policy limit of total outstanding debt of no more than 1% of real market value of property. The Debt Affordability Study measures future debt plans against this debt policy limit to determine whether those plans are considered affordable and those results are included in the CIP. As of June 30, 2007, the City’s debt burden was 0.27%. ì Major Initiatives City Council Goals Each year, the Eugene City Council reviews the progress on previously adopted Council Goals and then adopts a revised set of priority issues that inspire the development of work plans over the next year. The Council Goals were most recently reviewed and updated by the council in January and February 2007. Two Council Goals were determined to have been completed in FY07: Development Plan Phase of City Hall Complex – This phase addresses financing, public involvement, public opinion research, and site selection deliberations for a new City Hall complex. Police Complaint Oversight (Measure 20-106) – This is part of the City’s response to the March 2005 Management Review of the Eugene Police Department report completed by the International City/County Management Association (ICMA) and the Police Executive Research Forum. The report had 57 recommendations for improving policing in Eugene. One recommendation was to create a police auditor function in the City and a citizen review board to review complaints against the police. Eugene voters approved an amendment to the City Charter on November 8, 2005 authorizing the City Council to provide for external review of police-related complaints. The police auditor was funded in the FY07 budget, and the Police Department Strategic Plan was launched. Ongoing Council Goals in FY07 include the following: Neighborhood Empowerment – This goal includes redesign of the neighborhood initiative, which includes the following: public participation in the livability and protection of neighborhoods; identification of specific redevelopment strategies that preserve the integrity of residential uses, including design standards, site review, down zoning, infill regulation, and bolstering and empowering neighborhood associations to get more involvement. The FY07 budget allocated $100,000 for neighborhood empowerment efforts, $66,500 for neighborhood matching grants, and $80,000 to River Road and Santa Clara neighborhoods for newsletters, planning, and project support. The matching grant program generated sixteen applications in March 2007. The first Neighborhood Summit was held on February 17, 2007. All 19 neighborhood associations or community organizations were represented, as well as City and County elected officials, other local government agencies, City Council advisory committees, the City’s Executive Management team, and City staff. The council-adopted Neighborhood Action Plan was reviewed and action items were prioritized by Summit participants. Following the Summit, City staff will continue the development of plans for implementation of high priority action items. Adopt Implementation Plan for Parallel Process for City Hall and Patrol Facility Construction – Completed in 1964, the existing City Hall building is nearing the end of its useful life without major capital reinvestment. In addition to being expensive to operate and maintain, the building is functionally inadequate and structural deficiencies leave the building vulnerable to catastrophic damage from an earthquake. Resolution of this priority issue will need to address such policy-level questions as whether City Hall should be renovated or replaced, what level of City service consolidation should be planned for, and how any desired improvements should be financed. In January 2007, the council approved initiation of the Implementation Plan Phase with partial funding of $1.0 million from the Facility Replacement Reserve, and budgeting for the completion of the Implementation Plan Phase to be addressed in FY08. The Implementation Phase will entail refinement of the conceptual design from the Development Plan into design options with enough detail for the consultant team to generate accurate project cost estimates. The design options will then go through another round of review and comment by council, then community, and City staff. This phase will conclude with council adoption of an Implementation ë Plan that includes specific information about timing, level of consolidation, financing, property acquisition, and project delivery methods. Facilitate the Development of a Full-service Hospital in Eugene – TheCity Council has taken several actions designed to encourage a hospital to locate in the City’s central core. McKenzie-Willamette Medical Center initially indicated interest in locating on the EWEB site, which would have been within the incentive zone for hospital development. Subsequently, McKenzie-Willamette signed a purchase agreement for the Delta Ridge site. Since that time, opposition to the Delta Ridge site emerged in the community and a legal challenge to the Delta Ridge site was not resolved in FY07. Strengthen and Promote Community Arts and Outdoors Assets – Eugene's arts and outdoor resources are unique assets of our city and major contributors to the community's overall quality of life. Strengthening and promoting these vital assets has two significant benefits: 1) improved sustainable economic activity through increased tourism and commerce and, 2) enhanced community livability with expanded access to arts and outdoor amenities for area residents. A $27.5 million bond measure for Parks, Athletic Fields and Preservation of Open Space was approved by voters in the November 2006 election. This provides funding to begin implementation of the Parks, Recreation and Open Space (PROS) Plan that was approved by the City Council in February 2006. This plan will guide the City for the next several decades in the acquisition and development of parks, recreation, and open space projects. In addition, Eugene has been selected to host the 2008 U.S. Olympic Track and Field Trials, and the FY07 budget allocated $150,000 for the City’s contribution to this event. Enhance Understanding of Race Issues and Improve Community Relationships – The council priority on race outlines a plan that the Council as a body, and the Mayor and councilors as individuals, can use to build a better understanding of race issues among themselves, and improve race relations in the community. In FY07, the plan focused on community input and Mayor and council education on issues of race as a background for action. City Council and staff have continued to make a significant effort to develop community conversations on race-related issues, and staff training continued to be provided to ensure that community diversity is recognized, welcomed, and addressed in delivery of services. Develop a Strategy to Help the Homeless in Eugene – Because homelessness has the potential to touch every resident within the City, the scope of this goal was expanded to include community members who are “at risk” of becoming homeless because they cannot afford food and shelter. The FY07 budget allocated $150,000 to fund this initiative. These funds were used for homeless prevention, transportation, and day services for homeless people. On February 8, 2007, over 1,000 homeless people took advantage of the free food, clothing, services, and other resources provided at the first annual Project Homeless Connect event. The Mayor, with the approval of the City Council, appointed a committee of representatives from non-profit and public organizations serving the homeless. The committee began an examination of the local impact of homelessness, with the goals of identifying strategies and making recommendations to the council on new funding and finance options to address homelessness. New items added to the Council Goals in FY07: Sustainability Initiative – The Sustainable Business Initiative report was presented to City Council on October 23, 2006. The report recommended development of an Office of Sustainability and a Sustainability Commission that supports broad sustainable practices. The commission’s charge is to create tools and processes needed to support businesses that produce sustainable products or provide or utilize sustainable practices. The FY07 budget allocated $100,000 to begin carrying out this recommendation. Downtown Initiative – This goal shows how the City Council and the community as a whole is growing more focused on revitalization of our downtown core. FY07 saw the WestTown on 8th affordable housing project get underway. This will provide 102 rental units for those earning less than 60% of the median income, and nine market-rate units. Discussions with EWEB about new uses for their waterfront property were ongoing, and transportation projects connecting the new Courthouse District with downtown were under construction. Significant ê é è CITY OF EUGENE, OREGON Eugene City Hall 777 Pearl Street Eugene, Oregon 97401 Mayor and City Council as of June 30, 2007 NameTerm Expires Mayor:Kitty Piercy January 2009 Councilors:Bonny Bettman (Ward 1) January 2009 Betty Taylor (Ward 2) January 2009 Alan Zelenka (Ward 3) January 2011 George Poling (Ward 4) January 2011 Mike Clark (Ward 5) January 2011 Jennifer Solomon (Ward 6) January 2011 Andrea Ortiz (Ward 7) January 2009 Chris Pryor (Ward 8) January 2009 Principal Officialsas of June 30, 2007 Dennis M. Taylor, City Manager Angel Jones, Acting Assistant City Manager James R. Carlson, Central Services Executive Director Randall B. Groves, Fire and Emergency Medical Services Chief Lauren Chouinard, Human Resources and Risk Services Executive Director Renee Grube, Acting Library, Recreation, and Cultural Services Executive Director Susan L. Muir, Planning and Development Executive Director Robert M. Lehner, Chief of Police Kurt Corey, Public Works Executive Director ïð Ú×ÒßÒÝ×ßÔ ÍÛÝÌ×ÑÒ óîø÷ì÷îø÷îèûçøóèíêªéê÷ìíêè ×ÒÜÛÐÛÒÜÛÒÌ ßËÜ×ÌÑÎÍ ÎÛÐÑÎÌ Ì± ¬¸» Ø±²±®¿¾´» Ó¿§±® ¿²¼ Ó»³¾»® ±º ¬¸» Ý·¬§ Ý±«²½·´ Ý·¬§ ±º Û«¹»²»ô Ñ®»¹±² ¬§°» ¿½¬·ª·¬·»ô »¿½¸ ³¿¶±® º«²¼ô ¿²¼ ¬¸» ¿¹¹®»¹¿¬» ®»³¿·²·²¹ º«²¼ ·²º±®³¿¬·±² ±º Ý·¬§ ±º Û«¹»²»ô Ñ®»¹±² É» ½±²¼«½¬»¼ ±«® ¿«¼·¬ ·² ¿½½±®¼¿²½» ©·¬¸ ¿«¼·¬·²¹ ¬¿²¼¿®¼ ¹»²»®¿´´§ ¿½½»°¬»¼ ·² ¬¸» Ë²·¬»¼ Í¬¿¬» Ù±ª»®²³»²¬ ß«¼·¬·²¹ Í¬¿²¼¿®¼ô ·«»¼ ¾§ ¬¸» Ý±³°¬®±´´»® Ù»²»®¿´ ±º ¬¸» Ë²·¬»¼ Í¬¿¬»ò Ì¸±» ¬¿²¼¿®¼ ®»¯«·®» ¬¸¿¬ ©» °´¿² ¿²¼ ³¿¬»®·¿´ ³·¬¿¬»³»²¬ò ß² ¿«¼·¬ ·²½´«¼» »¨¿³·²·²¹ô ±² ¿ ¬»¬ ¾¿·ô »ª·¼»²½» «°°±®¬·²¹ ¬¸» ¿³±«²¬ ¿²¼ °®»»²¬¿¬·±²ò É» ¾»´·»ª» ¬¸¿¬ ±«® ¿«¼·¬ °®±ª·¼» ¿ ®»¿±²¿¾´» ¾¿· º±® ±«® ±°·²·±²ò ¿²¼ ¬¸» ¿¹¹®»¹¿¬» ®»³¿·²·²¹ º«²¼ ·²º±®³¿¬·±² ±º ¬¸» Ý·¬§ô ¿ ±º Ö«²» íðô îððéô ¿²¼ ¬¸» ®»°»½¬·ª» ½¸¿²¹» ¿½½±«²¬·²¹ °®·²½·°´» ¹»²»®¿´´§ ¿½½»°¬»¼ ·² ¬¸» Ë²·¬»¼ Í¬¿¬» ±º ß³»®·½¿ò ×² ¿½½±®¼¿²½» ©·¬¸ Ù±ª»®²³»²¬ ß«¼·¬·²¹ Í¬¿²¼¿®¼ô ©» ¸¿ª» ¿´± ·«»¼ ±«® ®»°±®¬ ¼¿¬»¼ Ñ½¬±¾»® íðô ½±³°´·¿²½» ©·¬¸ ½»®¬¿·² °®±ª··±² ±º ´¿©ô ®»¹«´¿¬·±²ô ½±²¬®¿½¬ô ¿²¼ ¹®¿²¬ ¿¹®»»³»²¬ ¿²¼ ±¬¸»® ³¿¬¬»®ò ¿²¼ ½±³°´·¿²½» ¿²¼ ¬¸» ®»«´¬ ±º ¬¸¿¬ ¬»¬·²¹ô ¿²¼ ²±¬ ¬± °®±ª·¼» ¿² ±°·²·±² ±² ¬¸» ·²¬»®²¿´ ½±²¬®±´ ±ª»® ©·¬¸Ù±ª»®²³»²¬ ß«¼·¬·²¹ Í¬¿²¼¿®¼ ¿²¼ ¸±«´¼ ¾» ®»¿¼ ·² ½±²¶«²½¬·±² ©·¬¸ ¬¸· ®»°±®¬ ·² ½±²·¼»®·²¹ ¬¸» ®»«´¬ ±º ±«® ¿«¼·¬ò Ì¸» ³¿²¿¹»³»²¬ ¼·½«·±² ¿²¼ ¿²¿´§· ±² °¿¹» ïí ¬¸®±«¹¸ îîå ¾«¼¹»¬¿®§ ½±³°¿®·±² ·²º±®³¿¬·±² ±² °¿¹» éë ¬¸®±«¹¸ éê ¿²¼ô ¬¸» ½¸»¼«´» ±º °»²·±² º«²¼·²¹ °®±¹®» ±² °¿¹» ééô ¿®» ²±¬ ®»¯«·®»¼ ¹»²»®¿´´§ ¿½½»°¬»¼ ·² ¬¸» Ë²·¬»¼ Í¬¿¬» ±º ß³»®·½¿ò É» ¸¿ª» ¿°°´·»¼ ½»®¬¿·² ´·³·¬»¼ °®±½»¼«®»ô ©¸·½¸ ½±²·¬»¼ °®·²½·°¿´´§ ±º ·²¯«·®·» ±º ³¿²¿¹»³»²¬ ®»¹¿®¼·²¹ ¬¸» ³»¬¸±¼ ±º ³»¿«®»³»²¬ ¿²¼ °®»»²¬¿¬·±² ±º ¬¸» ®»¯«·®»¼ «°°´»³»²¬¿®§ ·²º±®³¿¬·±²ò Ø±©»ª»®ô ©» ¼·¼ ²±¬ ¿«¼·¬ ¬¸» ·²º±®³¿¬·±² ¿²¼ »¨°®» ²± ±°·²·±² ±² ·¬ò ïï ô ¿²¼ · ¿´± ½·¿´ ¬¿¬»³»²¬ ¿²¼ ¬¸» ½¸»¼«´» ±º »¨°»²¼·¬«®» ±º º»¼»®¿´ ¿©¿®¼ ¸¿ª» ¾»»² «¾¶»½¬»¼ ¬± ¬¸» ¿«¼·¬·²¹ ¬¿¬»³»²¬ ¿²¼ô ¿½½±®¼·²¹´§ô ©» »¨°®» ²± ±°·²·±² ±² ¬¸»³ò ×ÍÔÛÎ ÝÐß Þ§æ ÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁ Û«¹»²»ô Ñ®»¹±² Ü»½»³¾»® ïðô îððé ïî Management’s Discussion and Analysis The management of the City of Eugene, Oregon (City) presents this narrative overview and analysis to facilitate both a short and a long-term analysis of the financial activities of the City for the fiscal year ended June 30, 2007. This Management’s Discussion and Analysis (MD&A) is based on currently known facts, decisions, and conditions that existed as of the date of the independent auditor’s report. Additional information outside the scope of this analysis can be found in the Letter of Transmittal. Financial Highlights The City’s total assets at June 30, 2007 increased $23.0 million from $868.5million to $891.5 million, or 2.7% from the prior year. $22.7 million of this increase was due to the recognition of capital assets in both the governmental and business-type activity columns, including $10.6 million in stormwater and wastewater improvements and $6.3 million in municipal airport construction projects. The City’s total liabilities decreased $9.6 million from $170.8 million to $161.2 million. The decrease was due to a $13.5 million decrease in bonded debt, which was offset by a $2.5 million increase in net OPEB obligations as a result of early implementation of GASB 45, and a $1.4 million draw on the general obligation revolving credit facility. The net assets of the City (assets less liabilities) at June 30, 2007 increased $32.6 million from $697.7 million to $730.3 million, or 4.7% from the prior year. Total net assets of $122.3 million are unrestricted. At June 30, 2007, the City’s governmental funds reported combined ending fund balances of $96.8 million, a decrease of $2.5 million in comparison to the prior year. Approximately $92.3 million is unreserved and available for spending at the government’s discretion, subject to reporting fund-type limitations. The General Fund’s unreserved fund balance at the end of the current fiscal year was $30.8 million, or 28.3% of General Fund expenditures. Overview of the Financial Statements The following discussion and analysis is intended to serve as an introduction to the City’s basic financial statements and other required supplementary information. The City’s basic financial statements comprise three components: 1. Government-wide financial statements 2. Fund financial statements 3. Notes to the basic financial statements Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business. The Statement of Net Assets presents information on all of the City’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The Statement of Activities presents information showing how the City’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of 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 of such items include earned, but uncollected property taxes, and earned, but unused compensated absences. Both of the government-wide financial statements distinguish functions of the City that are principally 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). The governmental activities of the City include the following: Central services Fire and emergency medical services Library, recreation, and cultural services Planning and development Police Public works ïí The business-type activities of the City include the following: Ambulance transport Municipal airport Parking services Stormwater utility Wastewater utility The government-wide financial statements include not only the City itself (known as the primary government), but also a legally separate Urban Renewal Agency (URA) for which the City is financially accountable. Although legally separate, the URA’s governing body is identical to the City’s, and because the services of the URA are exclusively for the benefit of the City, it is included as an integral part of the primary government. The government-wide financial statements can be found at Exhibits 1 and 2 in the basic financial statements. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds. Governmental funds. Governmental funds are used to account for activities where the emphasis is placed on available financial resources, rather than upon net income determination. Therefore, unlike the government-wide financial statements, governmental fund financial statements focus on the acquisition and use of current spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term requirements. Because the focus of governmental funds is narrower than that of the government-wide financial 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 so, readers may better understand the long-term impact of the government’s near-term financial decisions. Both the governmental fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. These reconciliations can be found at Exhibits 3 and 5 in the basic financial statements. The City maintains 25 individual governmental funds. Information is presented separately in the governmental fund Balance Sheet and in the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances for those funds that are considered significant (major) to the City taken as a whole. These financial statements report four major funds: General Fund, Community Development Special Revenue Fund, General Capital Projects Fund, and the Systems Development Capital Projects Fund. Data from the other 21 governmental funds are combined into a single, aggregated presentation. Summary fund data by fund-type for these nonmajor governmental funds is provided in the form of combining statements at B-1 and B-2 of this report. Individual fund data for each of these nonmajor governmental funds is provided as other supplementary information in the form of combining statements at C-1, C-2, D- 1, D-2, E-1, and E-2. The City adopts an annual appropriated budget for all governmental funds. To demonstrate compliance with the budget, budgetary comparison statements have been provided for the General Fund and the major special revenue fund as required supplementary information at A-1 and A-2. Budgetary comparisons for all other governmental funds have been provided as other supplementary information at C-3 through C-14, D-3 through D-7, and E-3 through E-8. The governmental fund financial statements can be found at Exhibits 3 and 4 in the basic financial statements. Proprietary funds. Proprietary funds are used to account for activities where the emphasis is placed on net income determination. The City maintains two different types of proprietary funds – enterprise funds and internal service funds. Enterprise funds are used to report the same functions presented as business-type activities in the governmental-wide financial statements. The City uses enterprise funds to account for its ambulance transport, municipal airport, parking services, stormwater utility, and wastewater utility operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for engineering services, facilities services, fleet services, information systems and services, and risk and benefits management activities. Because internal service funds predominantly benefit governmental rather than business-type functions, their assets and liabilities have been included with the governmental activities in the government-wide financial statements. ïì The enterprise funds, all of which are considered to be major funds of the City, are reported separately as proprietary fund financial statements in the basic financial statements. 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 supplementary information in the form of combining statements at G-1, G-2, and G-3. The City adopts an annual appropriated budget for all proprietary funds. To demonstrate compliance with the budget, budgetary comparison statements have been provided for the enterprise funds as other supplementary information at F- 1 though F-5. Budgetary comparisons for the internal service funds are provided as other supplementary information at G-4 through G-8. The proprietary fund financial statements can be found at Exhibits 6, 7, and 8 in the basic financial statements. Notes to the basic financial statements. The notes provide additional information that is essential for a full understanding of the data provided in the government-wide and fund financial statements. They are an integral part of the financial statements and should be read in conjunction with them. Required supplementary information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning budgetary comparisons for the general and major special revenue funds, information about the City’s progress in funding its obligation to provide pension and other post employment benefits to its employees, and the budget to GAAP reconciliation schedule. Other supplementary information . The combining statements and schedules referred to earlier and the schedules of property tax and bonded debt transactions follow the required supplementary information in this report. Government-wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. In the case of the City, assets exceeded liabilities by $730.3 million at the close of the fiscal year ending June 30, 2007. City of Eugene's Net Assets Governmental ActivitiesBusiness-type ActivitiesTotal 200720062007200620072006 Capital assets$368,160,483352,260,363230,714,398223,926,247598,874,881576,186,610 Other assets252,053,219254,880,04040,628,95537,432,392292,682,174292,312,432 Total assets 620,213,702607,140,403271,343,353261,358,639891,557,055868,499,042 Noncurrent liabilities110,722,635133,782,8475,866,60710,181,379116,589,242143,964,226 Other liabilities38,834,07923,636,4095,816,3863,211,29044,650,46526,847,699 Total liabilities149,556,714157,419,25611,682,99313,392,669161,239,707170,811,925 Net assets: Invested in capital assets, net of related debt317,131,090289,352,542223,938,416215,793,591541,069,506505,146,133 Restricted60,354,92261,462,2206,580,8676,183,65666,935,78967,645,876 Unrestricted93,170,97698,906,38529,141,07725,988,723122,312,053124,895,108 Total net assets$470,656,988449,721,147259,660,360247,965,970730,317,348697,687,117 The largest portion of the City’s net assets are its investment in capital assets (e.g., land and right-of-way, buildings, improvements, equipment, and infrastructure, net of accumulated depreciation) of $541.1 million (74.1%), less any related debt used to acquire those assets that is still outstanding. Although the City’s investment in its capital assets is reported net of related debt, the resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City’s net assets, $66.9 million (9.2%), represents resources that are subject to external restrictions on how they may be used. The remaining balance of net assets $122.3 million (16.7%) are unrestricted and may be used to meet the government’s ongoing obligations to citizens and creditors. ïë City of Eugene's Change in Net Assets Governmental ActivitiesBusiness-type ActivitiesTotal Revenues:200720062007200620072006 Program revenues: Fees, fines, and charges for services$33,719,68635,736,79746,260,69044,721,66279,980,37680,458,459 Operating grants and contributions17,572,72413,920,9171,025,2931,091,91518,598,01715,012,832 Capital grants and contributions14,581,5327,306,49411,140,19710,550,16225,721,72917,856,656 General revenues: Taxes93,560,26792,137,0260093,560,26792,137,026 Grants and contributions not restricted to specific programs2,926,0842,848,225002,926,0842,848,225 Contributions in lieu of taxes11,913,37911,251,7130011,913,37911,251,713 Franchise fees on telecom providers revenues8,389,1568,100,845008,389,1568,100,845 Unrestricted investment earnings6,697,8574,920,6491,168,535632,8727,866,3925,553,521 Total revenues189,360,685176,222,66659,594,71556,996,611248,955,400233,219,277 Expenses: Central services14,074,70416,160,9140014,074,70416,160,914 Fire and emergency medical services25,625,31523,732,9020025,625,31523,732,902 Library, recreation, and cultural services28,318,25326,273,9380028,318,25326,273,938 Planning and development20,368,62616,620,9860020,368,62616,620,986 Police44,649,82242,460,8950044,649,82242,460,895 Public works26,796,67325,056,3990026,796,67325,056,399 Interest on long-term debt7,296,1317,424,942007,296,1317,424,942 Ambulance transport005,570,8685,350,7975,570,8685,350,797 Municipal airport009,506,4968,576,4219,506,4968,576,421 Parking services004,194,5494,191,0324,194,5494,191,032 Stormwater utility0010,533,6968,994,86710,533,6968,994,867 Wastewater utility0019,390,03618,817,96119,390,03618,817,961 Total expenses167,129,524157,730,97649,195,64545,931,078216,325,169203,662,054 Increase in net assets before transfers22,231,16118,491,69010,399,07011,065,53332,630,23129,557,223 Transfers(1,295,320)(3,579,438)1,295,3203,579,43800 Increase in net assets after transfers20,935,84114,912,25211,694,39014,644,97132,630,23129,557,223 Net assets, July 1449,721,147434,808,895247,965,970233,320,999697,687,117668,129,894 Net assets, June 30$470,656,988449,721,147259,660,360247,965,970730,317,348697,687,117 Expenses above include the indirect expenses as allocated in Exhibit 2 of the basic financial statements. Governmental activities. Governmental-type activities increased the City’s total net assets by $22.2 million before transfers, accounting for 68.1% of the growth in total net assets. This increase is $3.7 million more than the prior year’s increase. The key factors of this increase are as follows: Fees, fines, and charges for services decreased by $2.0 million during the year, partially due to a $1.6 million decrease in systems development charges, which are levied against developing properties. Capital grants and contributions increased $7.3 million during the year, primarily due to a $7.1 million increase in contributed transportation infrastructure stemming from the development of new residential areas within the City limits. Operating grants and contributions increased $3.7 million, mainly due to an increase of $1.3 million in grants from the U.S. Department of Justice for emergency communications equipment and infrastructure and a $0.9 million increase in grants from the U.S. Department of Housing and Urban Development for community development projects. Planning and development expenses increased by $3.7 million, the result of a $1.1 million increase in contractual services for community development projects and a $0.8 million increase in personnel costs. ïê Police expenses increased $2.2 million, largely due to a $1.5 million increase in personnel costs, a $1.0 million increase in allocated indirect expenses as a result of higher overhead costs, and a $0.9 million increase in health care costs, which was offset by a $1.7 million decrease in internal insurance charges. This next chart compares program revenues and expenses for the individual governmental activities for the current year. As the chart reflects, most governmental activities relied on general revenues to support the function. Governmental Activities Program Revenues Program Revenues and Expenses Expenses 5.6 Central services 14.1 2.7 Fire & EMS 25.6 6.2 LRCS 28.3 14.0 Planning & development 20.4 6.8 Police 44.6 30.5 Public works 26.8 Interest on debt 7.3 (in millions of dollars) The next chart shows the percent of the total for each source of revenue supporting governmental activities. Governmental Activities Revenues by Source Fees, fines, and charges for services Operating grants and contributions Capital grants and contributions 3.5% 4.4% 17.8% 6.3% 1.6% Taxes 9.3% Grants and contributions not restricted to specific programs Contributions in lieu of taxes 7.7% 49.4% Franchise fees on telecom providers revenues Unrestricted investment earnings Business-type activities. Business-type activities increased the City’s net assets by $10.4 million before transfers, accounting for 31.9% of the total growth in net assets. The following chart compares program revenues to expenses by individual business-type activity for the current year. In comparison to governmental activities, business-type activities typically recover their costs through program revenues. For the current year, the business-type activities generated sufficient revenues to cover expenses. ïé Business-type Activities Program Revenues Program Revenues and Expenses Expenses 6.3 Ambulance transport 5.6 13.2 Municipal airport 9.5 4.8 Parking services 4.2 13.3 Stormwater utility 10.5 22.0 Wastewater utility 19.4 (in millions of dollars) The chart below shows that 96.3% of revenues for business-type activities are generated from fees, fines, and charges for services and capital grants and contributions. Capital grants and contributions were derived predominantly from grants from the Federal Aviation Administration and the donation of transportation infrastructure stemming from the development of new residential areas Business-type Activities Revenues by Source Fees, fines, and charges for services 2.0% 18.7% Operating grants and contributions 1.7% Capital grants and contributions Unrestricted investment earnings 77.6% Capital assets . The City’s investment in capital assets for its governmental and business-type activities as of June 30, 2007 amounted to $598.9 million (net of accumulated depreciation). The investment in capital assets includes land, right-of-ways, construction in progress, buildings and equipment, improvements other than buildings (such as parks and park improvements), storm sewers and trunk sewers (stormwater and wastewater systems), and infrastructure (such as roads and sidewalks). The total increase in the City’s investment in capital assets for the current fiscal year was 3.9% (4.5% for governmental activities and 3.0% for business-type activities). ïè City of Eugene's Capital Assets, Net of Accumulated Depreciation Governmental ActivitiesBusiness-type ActivitiesTotal 200720062007200620072006 Land$55,116,10552,826,59114,249,57314,195,48069,365,67867,022,071 Construction in progress14,583,68217,672,1417,131,1679,387,71221,714,84927,059,853 Buildings and equipment146,040,698145,482,65937,994,17035,110,852184,034,868180,593,511 Improvements other than buildings31,016,27125,772,12944,928,05242,824,23875,944,32368,596,367 Storm sewers and trunk sewers00126,411,436122,407,965126,411,436122,407,965 Infrastructure121,403,727110,506,84300121,403,727110,506,843 $368,160,483352,260,363230,714,398223,926,247598,874,881576,186,610 Major capital asset additions during the current fiscal year included the following: Road and other infrastructure-type public improvements Various municipal airport construction projects Additional information on the City’s capital assets can be found in the note 4(E) to the basic financial statements. Bonded Debt. At the end of the current fiscal year, the City had total liabilities of $161.2 million. Of this amount, $119.3 million represented outstanding bonded indebtedness. Outstanding bonded debt included $37.8 million in general obligation bonds to be serviced by general property taxes, $1.5 million in certificates of participation to be serviced by general property taxes, $6.6 million in certificates of participation to be serviced by tax increment revenues, $0.9 million in limited tax improvement bonds to be serviced by property owners subject to the improvements, and $64.0 million in limited tax pension bonds to be repaid from existing revenue sources, all backed by the full faith and credit of the City. The remainder of the City’s bonded debt includes $0.4 million in general obligation bonds, $5.8 million in limited tax bonds, $0.6 million in revenue bonds, and $1.7 million in certificates of participation, all serviced by specific fund revenues. City of Eugene's Bonded Debt Governmental ActivitiesBusiness-type ActivitiesTotal 200720062007200620072006 General obligation bonds$37,820,00040,385,000415,000810,00038,235,00041,195,000 Certificates of participation 9,785,00012,075,000009,785,00012,075,000 Limited tax bonds 64,869,25472,251,9895,790,0006,040,00070,659,25478,291,989 Revenue bonds00590,0001,145,000590,0001,145,000 Deferred amounts42,34365,223(19,018)(22,198)23,32543,025 $112,516,597124,777,2126,775,9827,972,802119,292,579132,750,014 The City’s total bonded debt decreased by $13.5 million (10.1%) during the current fiscal year, due to $6.8 million in scheduled debt payments and a $7.7 million early call on limited tax pension bonds, less $1.0 million in accretion of deep discounts on limited tax pension bonds. Moody’s Investors Service rates most of the City’s bond issues. The City’s most recent ratings from Moody’s are as follows: Aa2 for general obligation bonds (February 2006). Baa1 for municipal airport revenue refunding bonds (October 2006). Aa3 for full faith and credit obligations, which includes the Library Obligations, the Atrium Obligations, the Santa Clara Fire Station Obligations, and the Broadway Garages Limited Tax Bonds (October 2003). A3 underlying and Aaa insured for the pension obligations: The pension obligations were issued as one offering for certain Oregon cities, counties, and special districts. The City of Eugene’s share of the total pension obligations on which the rating was based is 29.7%. ïç Under Oregon Revised Statutes, general obligation debt issues are limited to 3% of the real market value of all taxable property within the City’s boundaries. The $39.7 million in general obligation debt applicable to this limit, less $0.3 million in funds currently held to pay the principal thereof, is well below the $597.9 million ceiling. The City’s net direct general obligation bonded debt per capita is $267. Additional information on the City’s bonded debt can be found in the note 4(J) to the basic financial statements. Fund-based Financial Analysis As previously discussed, 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 a government’s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $96.8 million, a decrease of $2.5 million in comparison to the prior year. Approximately 95.3% of this total amount ($92.3 million) constitutes unreserved fund balance, which is available for spending at the government’s discretion, subject to reporting fund-type limitations. The remainder of fund balance is reserved, indicating that it is not available for new spending because it has already been committed to pay for debt service ($0.8 million), or has been reserved for other purposes ($3.7 million). Reservations of fund balance for other purposes include 1) prepaid expenditures for rentals, memberships, and maintenance contracts, 2) inventories unexpended at the end of the year, and 3) assets held for resale at June 30, 2007. The fund balance of the City’s General Fund decreased $2.1 million from $33.3 million to $31.2 million during the current fiscal year. The key factors in the decrease was a $3.4 million increase in police expenditures, a $1.7 million increase in library, recreation, and cultural services expenditures, a $1.5 million increase in transfers out to the Transportation Utility Fund, a $1.4 million increase in fire and emergency medical services expenditures, which was offset by a $3.6 million increase in tax revenues, and a $2.4 million increase in intergovernmental revenues. The fund balance in the Community Development Special Revenue Fund decreased $0.3 million from $1.9 million to $1.6 million during the current fiscal year. The decrease is the result of a $1.8 million increase in planning and development expenditures, which was offset by a $1.1 million increase in intergovernmental revenues, and a $0.4 million decrease in capital outlay expenditures. The fund balance in the General Capital Projects Fund decreased $2.2 million from $7.8 million to $5.6 million during the current fiscal year. The decrease in the fund balance was caused by current year expenditures of $6.7 million, which were in excess of current year revenues requiring the utilization of $2.2 million in resources accumulated in prior years. The fund balance in the Systems Development Capital Projects Fund experienced a decrease of $1.6 million from $15.5 million to $13.9 million during the current fiscal year. The decrease was largely due to a $2.1 million increase in current year capital outlay expenditures that were funded by prior year’s resources. . Proprietary funds The City’s proprietary fund statements provide the same type of information found in the government-wide financial statements, but in more detail. Unrestricted net assets and its percent to total net assets of each proprietary fund are as follows: $ 1.9 million (63.0%) Ambulance Transport 4.8 million (6.2%) Municipal Airport 4.8 million (22.7%) Parking Services 7.9 million (15.7%) Stormwater Utility 3.4 million (3.3%) Wastewater Utility îð Total business-type net assets increased $10.3 million in the current fiscal year. Significant issues regarding proprietary funds are as follows: The Ambulance Transport Fund reported a $0.2 million increase in net assets. There were no significant changes within the Fund during fiscal year 2007. The Municipal Airport Fund reported a $3.3 million increase in net assets. The increase was largely due to capital contributions of $4.7 million for airport projects. The Parking Services Fund reported a $0.2 million decrease in net assets. During fiscal year 2006, Symantec Corporation relocated their offices which resulted in a $0.2 million decrease in monthly parking revenues for fiscal year 2007. The Stormwater Utility Fund reported a $3.3 million increase in net assets. The increase was principally due to capital contributions of $2.7 million from developers for stormwater improvements. The Wastewater Utility Fund reported a $3.7 million increase in net assets. The increase was mainly due to capital contributions of $6.0 million for wastewater improvements and infrastructure. Other factors concerning the finances of proprietary funds can be found in the previous discussion of the City’s business-type activities. General Fund Budgetary Highlights The City’s final budget differs from the original budget in that it contains carry-forward appropriations for various programs and projects, and supplemental appropriations approved during the fiscal year. The final fiscal year 2007 budget for the General Fund was increased by $8.0 million. The primary reasons for this increase are as follows: $5.8 million increase to police, including $5.1 million for grant-funded activities. $1.2 million in interfund transfers, including $0.9 million to the General Capital Projects Fund. These changes were funded primarily by an increase of $5.2 million in intergovernmental revenues and $2.3 million in unspent resources from the prior year. The net decrease of $2.0 million in budget basis fund balance for the year ended June 30, 2007 was a significant improvement over the projected deficit of $6.0 million in the General Fund final amended budget. Actual revenues were $3.0 million lower than budget, primarily due to intergovernmental revenues that were below budget projections by $2.4 million, which was offset by charges for services and miscellaneous revenues which both exceeded budget projections by $0.2 million and $0.6 million, respectively. On the expenditure side, departments under-spent their budgets by a total of $6.4 million. The significant changes were in Police ($3.3 million), Central Services ($1.1 million), and Planning and Development ($0.6 million). Economic Factors and Next Year’s Budgets and Rates During the preparation of the budget for the ensuing fiscal year, the long-term impacts of the local economy were examined in conjunction with business decisions made by the City. The following are the major assumptions used in developing the FY 2008 budget: Interest rates on investments will be 5.0%. Property tax revenue is expected to decrease 7.0% in 2008, this is partially the result of the decision not to renew the Youth and School Services local option levy. Non-represented salaries will increase by 3.0%, collectively bargained agreements will increase between 3.2% - 4.2%. Health benefit rates will increase by 6.0%. PERS costs are expected to be 26% of payroll, which is a 3% decrease from the prior year. During the current fiscal year, budget basis unreserved fund balance in the General Fund decreased to $26.9 million, a decrease of $6.0 million over the prior year. City staff will be submitting a fiscal year 2008 supplemental budget to the City Council in December which appropriates $1.9 million in fiscal year 2007 ending fund balance for a $0.9 million transfer to the Road Capital Projects Fund and $1.0 million for reappropriations and reserves. îï Requests for Information This financial report is designed to provide a general overview of the City’s finances for those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to: Fionan Cronin, CPA Financial Reporting Manager City of Eugene th 100 West 10 Avenue, Suite 400 Eugene, Oregon 97401 îî ÞßÍ×Ý Ú×ÒßÒÝ×ßÔ ÍÌßÌÛÓÛÒÌÍ City of Eugene, Oregon Exhibit 1 Statement of Net Assets June 30, 2007 (amounts in dollars) GovernmentalBusiness-type ActivitiesActivitiesTotal Assets Current assets Equity in pooled cash and investments159,012,26925,349,714184,361,983 Receivables (net of allowance)21,464,2434,731,12526,195,368 Internal balances(6,424,340)6,424,3400 Due from other governments4,660,8991,647,3836,308,282 Inventories1,129,341872,9392,002,280 Prepaids and deposits4,456,8031,107,3155,564,118 Assets held for resale2,407,96702,407,967 Total current assets186,707,18240,132,816226,839,998 Noncurrent assets Loans and notes receivable0471,303471,303 Deferred charges1,491,60924,8361,516,445 Pension assets63,854,428063,854,428 Capital assets: Land and construction in progress69,699,78721,380,74091,080,527 Other capital assets (net of accumulated depreciation)298,460,696209,333,658507,794,354 Total noncurrent assets433,506,520231,210,537664,717,057 Total assets620,213,702271,343,353891,557,055 Liabilities Current liabilities Accounts payable2,641,920579,2053,221,125 Wages payable6,162,9841,228,5987,391,582 Compensated absences payable7,013,1691,472,3058,485,474 Due to other governments1,000,933174,9031,175,836 Claims payable9,878,13409,878,134 Deposits1,177,810715,2441,893,054 Notes and contracts payable327,7160327,716 General obligation bond and revolving credit facility1,425,00001,425,000 Interest payable509,140183,074692,214 Unearned revenue3,039,583173,0573,212,640 Assessment deferral loans5020502 Certificates of participation payable2,420,00002,420,000 Bonds payable3,237,1881,290,0004,527,188 Total current liabilities38,834,0795,816,38644,650,465 Noncurrent liabilities Compensated absences payable883,41880,251963,669 Assessment deferral loans11,945011,945 Rebatable arbitrage291,9020291,902 Notes and contracts payable513,8380513,838 Certificates of participation payable7,365,00007,365,000 Bonds payable (net of unamortized discount/premium)99,494,4095,485,982104,980,391 Net OPEB obligation2,162,123300,3742,462,497 Total noncurrent liabilities110,722,6355,866,607116,589,242 Total liabilities149,556,71411,682,993161,239,707 Net assets Invested in capital assets (net of related debt)317,131,090223,938,416541,069,506 Restricted for: Capital projects24,818,1634,919,04129,737,204 Debt service1,698,1341,661,8263,359,960 Community development11,072,272011,072,272 Urban renewal13,044,734013,044,734 Other purposes9,721,61909,721,619 Unrestricted93,170,97629,141,077122,312,053 Total net assets470,656,988259,660,360730,317,348 The accompanying notes are an integral part of the financial statements. îí City of Eugene, Oregon Exhibit 2 Statement of Activities For the fiscal year ended June 30, 2007 (amounts in dollars) Net (Expense) Revenue and Program RevenuesChanges in Net Assets Fees, IndirectFines, andOperatingCapital DirectExpensesCharges forGrants andGrants andGovernmentalBusiness-type ExpensesAllocationServicesContributionsContributionsActivitiesActivitiesTotal Functions/Programs Governmental activities: Central services31,630,887(17,556,183)5,541,01015,4840(8,518,210)0(8,518,210) Fire and emergency medical services22,125,7643,499,5512,200,740523,8036,530(22,894,242)0(22,894,242) Library, recreation, and cultural services25,511,8082,806,4455,523,221710,2830(22,084,749)0(22,084,749) Planning and development18,818,2231,550,4039,130,5534,760,886144,744(6,332,443)0(6,332,443) Police38,846,4325,803,3903,630,9563,196,0980(37,822,768)0(37,822,768) Public works25,101,7791,694,8947,693,2068,366,17014,430,2583,692,96103,692,961 Interest on long term debt7,296,1310000(7,296,131)0(7,296,131) Total governmental activities169,331,024(2,201,500)33,719,68617,572,72414,581,532(101,255,582)0(101,255,582) Business-type activities: Ambulance transport5,200,868370,0006,208,00719,10000656,239656,239 Municipal airport9,209,496297,0007,146,3521,000,1244,713,53303,353,5133,353,513 Parking services4,077,049117,5004,509,409000314,860314,860 Stormwater utility10,147,696386,00010,988,5426,0691,949,45902,410,3742,410,374 Wastewater utility18,359,0361,031,00017,408,38004,477,20502,495,5492,495,549 Total business-type activities46,994,1452,201,50046,260,6901,025,29311,140,19709,230,5359,230,535 Total activities216,325,169079,980,37618,598,01725,721,729(101,255,582)9,230,535(92,025,047) General revenues: Property taxes88,531,791088,531,791 Transient room tax1,668,94001,668,940 Local motor vehicle fuel tax3,359,53603,359,536 Contributions in lieu of taxes11,913,379011,913,379 Franchise fees on telecom providers revenues8,389,15608,389,156 Grants and contributions not restricted to specific programs2,926,08402,926,084 Unrestricted investment earnings6,697,8571,168,5357,866,392 Transfers(1,295,320)1,295,3200 Total general revenues and transfers122,191,4232,463,855124,655,278 Change in net assets20,935,84111,694,39032,630,231 Net assets, July 1, 2006449,721,147247,965,970697,687,117 Net assets, June 30, 2007470,656,988259,660,360730,317,348 The accompanying notes are an integral part of the financial statements. îì City of Eugene, Oregon Exhibit 3 Balance heet S Governmental Funds June 30, 2007 (amounts in dollars) CommunitySystems DevelopmentGeneralDevelopmentOtherTotal SpecialCapitalCapitalGovernmentalGovernmental General RevenueProjectsProjectsFundsFunds Assets Equity in pooled cash and investments34,324,7041,253,3887,558,74713,294,64441,811,32298,242,805 Receivables: Interest752,000000160,551912,551 Taxes3,457,369000910,6224,367,991 Accounts2,696,90134,05601,707,344682,3355,120,636 Assessments00001,270,2321,270,232 Loans and notes010,046,23056,7779,108278,42910,390,544 Allowance for uncollectibles(875)000(449)(1,324) Due from other funds46,866000046,866 Due from other governments2,101,878393,717002,127,4334,623,028 Prepaids and deposits371,847000115,367487,214 Inventories0000861,357861,357 Assets held for resale00002,407,9672,407,967 Total assets43,750,69011,727,3917,615,52415,011,09650,625,166128,729,867 Liabilities and fund balances Liabilities Accounts payable415,128110,185579,669158,925793,4182,057,325 Wages payable4,561,19427,811015,599788,9205,393,524 Due to other funds000046,86646,866 Due to other governments605,63782,61153198,32380,112867,214 Deposits453,906000482,765936,671 General obligation bond and revolving credit facility001,425,000001,425,000 Interest payable0000448448 Deferred revenue6,554,2719,941,23855,698809,4083,832,46621,193,081 Assessment deferral loans0000502502 Total liabilities12,590,13610,161,8452,060,8981,082,2556,025,49731,920,631 Fund balances Reserved for prepaid expenditures371,847000115,367487,214 Reserved for debt service0000764,555764,555 Reserved for inventories0000861,357861,357 Reserved for assets held for resale00002,407,9672,407,967 Unreserved30,788,7071,565,5465,554,62613,928,841051,837,720 Unreserved, reported in nonmajor: Special revenue funds000029,195,51129,195,511 Debt service funds00007,023,3447,023,344 Capital project funds00004,231,5684,231,568 Total fund balances31,160,5541,565,5465,554,62613,928,84144,599,66996,809,236 Total liabilities and fund balances43,750,69011,727,3917,615,52415,011,09650,625,166 Reconciliation to the tatement o Net Assets: Sf The Statement of Net Assets reports receivables at their net realizable value. However, receivables not available to pay for current-period expenditures are deferred in governmental funds.17,542,399 Capital assets are not financial resources in governmental funds, but are reported in the Statement of Net Assets at their net depreciable value.349,205,317 All liabilities are reported in the Statement of Net Assets. However, if they are not due and payable in the current period, they are not recorded in governmental funds.(55,691,613) Internal service funds are proprietary funds and not reported with governmental funds. However, because internal service funds primarily benefit governmental activities, their assets, liabilities, and net assets are reported along with governmental activities in the Statement of Net Assets.62,791,649 Net assets of governmental activities470,656,988 The accompanying notes are an integral part of the financial statements. îë City of Eugene, Oregon Exhibit 4 Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the fiscal year ended June 30, 2007 (amounts in dollars) CommunitySystems DevelopmentGeneralDevelopmentOtherTotal SpecialCapitalCapitalGovernmentalGovernmental GeneralRevenueProjectsProjectsFundsFunds Revenues Taxes82,358,84400023,005,788105,364,632 Licenses and permits5,950,5390006,471,36612,421,905 Intergovernmental5,995,5703,818,9850011,635,87321,450,428 Rental income98,375027,9420152,431278,748 Charges for services10,676,45522,77304,743,1484,752,87720,195,253 Fines and forfeits3,407,15600091,4483,498,604 Special assessments0000352,648352,648 Repayment of revolving loans01,038,2360037,1631,075,399 Miscellaneous2,565,720613,293442,682796,7263,080,7207,499,141 Total revenues111,052,6595,493,287470,6245,539,87449,580,314172,136,758 Expenditures Current - departmental: Central services16,257,40367,5004,31759,2723,734,00520,122,497 Fire and emergency medical services21,607,704000375,02321,982,727 Library, recreation, and cultural services18,317,2260006,641,63924,958,865 Planning and development6,828,0165,787,3250101,2455,840,08418,556,670 Police39,891,0310002,071,10941,962,140 Public works5,550,48200311,3068,430,93514,292,723 Debt service: Principal211,19400316,3224,762,5675,290,083 Interest56,74202,94443,5442,075,9772,179,207 Arbitrage fee00008,1328,132 Issuance costs454027,7550028,209 Capital outlay0164,1636,391,2706,246,7797,544,72720,346,939 Intergovernmental00006,397,4516,397,451 Total expenditures108,720,2526,018,9886,426,2867,078,46847,881,649176,125,643 Excess (deficiency) of revenues over expenditures2,332,407(525,701)(5,955,662)(1,538,594)1,698,665(3,988,885) Other financing sources (uses) Transfers in2,303,250200,0004,019,30005,742,99512,265,545 Transfers out(6,760,769)0(317,216)0(3,717,469)(10,795,454) Total other financing sources (uses)(4,457,519)200,0003,702,08402,025,5261,470,091 Net change in fund balances(2,125,112)(325,701)(2,253,578)(1,538,594)3,724,191(2,518,794) Fund balances, July 1, 200633,285,6661,891,2477,808,20415,467,43540,875,47899,328,030 Fund balances, June 30, 200731,160,5541,565,5465,554,62613,928,84144,599,66996,809,236 The accompanying notes are an integral part of the financial statements. îê City of Eugene, Oregon Exhibit 5 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the fiscal year ended June 30, 2007 (amounts in dollars) Net change in fund balances - total governmental funds(2,518,794) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds defer revenues that do not provide current financial resources. However, the Statement of Activities recognizes such revenues at their net realizable value when earned, regardless of when received.648,599 Donations of capital assets are reported as capital contributions in the Statement of Activities, but do not appear in the governmental funds because they are not financial resources. In addition, the Statement of Activities reports gains and losses arising from the disposal of existing capital assets, while governmental funds do not.10,509,483 Governmental funds do not report expenditures for unpaid compensated absences, interest expense, or arbitrage since they do not require the use of current financial resources. However, the Statement of Activities reports such expenses when incurred, regardless of when settlement ultimately occurs.(1,478,989) Capital outlays are reported as expenditures in governmental funds. However, the Statement of Activities allocates the cost of capital outlays over their estimated useful lives as depreciation expense.7,301,117 Proceeds from the issuance of long-term debt provide current financial resources to governmental funds and are reported as revenues. In the same way, repayments of long-term debt use current financial resources and are reported as expenditures in governmental funds. However, the receipt of debt proceeds nor the payment of debt principal affect the Statement of Activities, but are reported as increases and decreases in noncurrent liabilities in the Statement of Net Assets.5,289,598 Transfers of capital assets are often made between proprietary funds and governmental funds when the use of an asset changes. Transfers of liabilities are sometimes made between proprietary funds and governmental funds when the fund responsible for repayment changes. Such transfers will provide or use economic resources in proprietary funds, but may not necessarily provide or use spendable financial resources in governmental funds.(2,685,434) Internal service funds are used by management to charge the costs of certain activities, such as insurance, facilities, and fleet services to individual funds. The net revenue (expense) of certain internal service funds is reported with governmental activities.3,870,261 Change in net assets of governmental activities20,935,841 The accompanying notes are an integral part of the financial statements. îé (this page intentionally left blank) íð City of Eugene, Oregon Exhibit 7 Statement of Revenues, Expenses, and Changes in Fund Net Assets Proprietary Funds For the fiscal year ended June 30, 2007 (amounts in dollars) Business-type Activities Governmental Enterprise Funds Activities Total AmbulanceMunicipalParkingStormwaterWastewaterInternal Service TransportAirportServicesUtilityUtilityTotalsFunds Operating revenues Licenses and permits000127,7900127,7909,679 Intergovernmental19,1001,000,12406,06901,025,29311,259 Rental income02,786,714550,57837,26322,9243,397,479651,360 Charges for services6,158,3044,289,8502,952,48210,798,69217,357,54741,556,87556,227,641 Fines and forfeits06,4741,006,3481,4003,4201,017,6420 Miscellaneous49,70363,314023,39724,489160,903328,000 Total operating revenues6,227,1078,146,4764,509,40810,994,61117,408,38047,285,98257,227,939 Operating expenses Personnel services4,134,0943,107,4681,244,3895,666,7899,559,57923,712,31915,588,190 Contractual services285,672503,845620,4751,468,583917,3073,795,8823,467,409 Materials and supplies369,152919,936139,218687,5102,057,7244,173,5403,667,879 Maintenance505,856269,160963,2251,345,3801,529,2224,612,8431,547,465 Utilities10,413377,43322,65672,190939,9911,422,6833,030,245 Rent0224,77239,70027,15386,477378,102273,850 Taxes0037,4390037,43911,540 Insurance40,089151,23396,00470,616151,480509,4222,231,392 Claims00000016,351,025 Central business functions370,000297,000117,500386,0001,031,0002,201,5001,583,000 Depreciation63,8413,753,307763,9111,069,8073,594,2059,245,0712,623,291 Total operating expenses5,779,1179,604,1544,044,51710,794,02819,866,98550,088,80150,375,286 Operating income (loss)447,990(1,457,678)464,891200,583(2,458,605)(2,802,819)6,852,653 Nonoperating revenues (expenses) Interest revenue58,367314,552281,073366,406148,1371,168,5353,540,704 Interest expense0(88,262)(406,752)(3,676)(3,843)(502,533)(4,993,617) Amortization of issuance costs0(8,094)(3,521)00(11,615)(42,198) Total nonoperating revenues (expenses)58,367218,196(129,200)362,730144,294654,387(1,495,111) Income (loss) before capital contributions and transfers506,357(1,239,482)335,691563,313(2,314,311)(2,148,432)5,357,542 Capital contributions41,5204,713,53302,748,2246,005,21413,508,491319,522 Transfers in007,500007,5001,952,898 Transfers out(329,060)(189,649)(547,000)(14,765)0(1,080,474)(2,352,396) Change in net assets218,8173,284,402(203,809)3,296,7723,690,90310,287,0855,277,566 Total net assets, July 1, 20062,793,68873,774,48421,234,20147,006,80498,139,75863,938,423 Total net assets, June 30, 20073,012,50577,058,88621,030,39250,303,576101,830,66169,215,989 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds.1,407,305 Change in net assets of business-type activities11,694,390 The accompanying notes are an integral part of the financial statements. íï CITY OF EUGENE, OREGON Notes to Basic Financial Statements Notes Index (1)Summary of Significant Accounting Policies Page(s) (A) The Financial Reporting Entity 35 (B) Organization and Operation 35 (C) Government-wide and Fund Financial Statements 35 - 36 (D) Measurement Focus, Basis of Accounting, and Financial Statement Presentation 36 - 40 (E) Self-insurance 40 (F) Equity in Pooled Cash and Investments 40 - 41 (G) Receivables 41 (H) Interfund Receivables and Payables 41 (I) Inventories and Prepaid Items 41 (J) Capital Assets 42 - 43 (K) Capitalized Interest 43 (L) Compensated Absences 43 (M) Noncurrent Obligations 43 (N) Fund Balance 43 (O) Indirect Expenses Allocation 43 (2)Reconciliation of Government-wide and Fund Financial Statements (A) Explanation of Differences Between the Government-wide Statement of Net Assets and the Governmental Fund Balance Sheet 44 (B) Explanation of Differences Between the Government-wide Statement of Activities and the Fund Statement of Revenues, Expenditures and Changes in Fund Balances 45 - 46 (3)Stewardship, Compliance, and Accountability (A) Budgetary Information 46 - 47 (B) Over-expenditures of Appropriations 47 (4) Detailed Notes on All Funds (A) Equity in Pooled Cash and Investments 47 - 49 (B) Receivables 50 (C) Interfund Receivables, Payables, and Transfers 51 - 52 (D) Due From Other Governments 53 (E) Capital Assets 54 - 56 (F) Deferred Revenue 57 (G) Operating Leases 57 - 58 (H) Bond Anticipation Notes 58 (I) General Obligation Bond and Revolving Credit Facility 58 (J) Noncurrent Liabilities 59 - 65 (5)Other Information (A) Risk Management 66 (B) Joint Ventures 67 (C) Retirement Plan 67 - 70 (D) Other Post-employment Benefits (OPEB) 70 - 72 (E) Contingencies 72 (F) Outstanding Encumbrances 73 íì CITY OF EUGENE, OREGON Notes to Basic Financial Statements June 30, 2007 (1) Summary of Significant Accounting Policies The financial statements of the City of Eugene, Oregon (City) have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting standards. The City has early implemented GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other than Pensions. The more significant of the City's accounting policies are described below. (A) The Financial Reporting Entity As defined by GAAP, the financial reporting entity consists of the primary government, as well as its component units, which are legally separate organizations for which the elected officials of the primary government are financially accountable. Financial accountability is defined as appointment of a voting majority of the component unit's board, and either a) the ability to impose its will on the component unit, or b) the possibility that the component unit will provide a financial benefit to or impose a financial burden on the primary government. The accompanying financial statements present the City of Eugene, Oregon (the primary government) and its component unit. The City of Eugene is a municipal corporation governed by a council comprised of eight members, each elected by and representing the citizens of a different ward of the City, and a Mayor, who is elected at large. The component unit discussed in the next paragraph is included in the City's reporting entity because of the significance of its operational and financial relationship with the City. Blended Component Unit. The Urban Renewal Agency of the City of Eugene (Agency) is a legally separate public body, corporate and politic, created by ordinance of the City, and governed by the City Council, acting in its capacity as the Urban Renewal Agency Board. Because the Agency's governing body is identical to the City's, and because the services of the Agency are exclusively for the benefit of the City, the funds of the Agency are blended with those of the City by including them in the appropriate statements and schedules of this Comprehensive Annual Financial Report. Separate financial statements for the Agency can be obtained from the Financial Services Division of the City of Eugene. (B) Organization and Operation The City operates under the Eugene Charter of 1976, a general grant of powers charter. The City Council, composed of the Mayor and eight council members, forms the legislative branch of the City government, while the City Manager acts as the administrative head. The accounts of the City are organized on the basis of funds. Fund accounting is designed to demonstrate legal compliance and aid financial management by segregating government functions and activities. The operations of each fund are accounted for by providing a separate set of self-balancing accounts which comprise its assets, liabilities, fund balances (net assets), revenues, and expenditures (expenses). (C) Government-wide and Fund Financial Statements The government-wide financial statements (Exhibits 1 and 2) report information on all activities of the primary government and its component unit. As a general rule, the effect of interfund activity has been eliminated from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees, fines, and charges for services. continued íë CITY OF EUGENE, OREGON Notes to Basic Financial Statements (1) Summary of Significant Accounting Policies, continued (C) Government-wide and Fund Financial Statements, continued The Statement of Activities (Exhibit 2) demonstrates the degree to which the direct and allocated indirect expenses of a given function or business-type activity are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or program. Indirect expenses are those costs, usually administrative in nature, that support all City functions and enable direct services to be provided. Program revenues include 1) fees, fines, and charges to customers who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or program, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or program. Taxes and other items not properly included among program revenues are reported instead as general revenues. Fund financial statements (Exhibits 3 through 8) are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. (D) Measurement Focus, Basis of Accounting, and Financial Statement Presentation Measurement focus refers to what is being measured by a fund. Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Government-wide and Proprietary Fund Financial Statements The government-wide and proprietary fund financial statements are accounted for using an economic resources measurement focus, whereby all assets and liabilities are included in the Statement of Net Assets and the Statement of Fund Net Assets. The increases and decreases in those net assets are presented in the government-wide Statement of Activities and in the proprietary fund Statement of Revenues, Expenses, and Changes in Fund Net Assets. These funds use the accrual basis of accounting whereby revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. The City's government-wide and proprietary fund accounting and financial reporting practices are based on all applicable GASB pronouncements as well as the following pronouncements issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements: Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principles Board (APB) Opinions, and Accounting Research Bulletins (ARBs) of the Committee on Accounting Procedures. The City has elected not to apply FASB guidance issued subsequent to November 30, 1989 to business-type activities and to enterprise funds, unless specifically adopted by the GASB. Interfund activity consists of transfers, services provided and/or used, reimbursements, advances, and loans. As a general rule the effect of interfund activity has been eliminated from the governmental-wide financial statements. Exceptions to this general rule include interfund services provided and/or used. Interfund services provided and/or used are accounted for as revenues and expenses since the elimination of such revenues and expenses would distort the direct costs and program revenues reported for the various functions. Amounts reported as program revenues in the Statement of Activities include 1) fees, fines, and charges for services, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Grants and contributions not restricted to specific programs are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. continued íê CITY OF EUGENE, OREGON Notes to Basic Financial Statements (1) Summary of Significant Accounting Policies, continued (D) Measurement Focus, Basis of Accounting, and Financial Statement Presentation, continued Government-wide and Proprietary Fund Financial Statements, continued Operating revenues and operating expenses are intermediate components within the proprietary fund Statement of Revenues, Expenses, and Changes in Fund Net Assets, and include only those transactions that constitute their principal, ongoing activities exclusive of investing or financing transactions. Significant operating revenues include charges for services, rental income, and intergovernmental revenue. Significant operating expenses include personnel, materials and supplies, outside services, and depreciation. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. Governmental Fund Financial Statements The governmental fund financial statements are accounted for using a current financial resources measurement focus, whereby only current assets and current liabilities generally are included in the Balance Sheet, and the Statement of Revenues, Expenditures, and Changes in Fund Balances present increases and decreases in those net current assets. These funds use the modified accrual basis of accounting whereby revenues are recorded only when susceptible to accrual (both measurable and available). "Measurable" means that the amount of the transaction can be determined. "Available" is defined as being collectible within the current period or soon enough thereafter (60 days) to be used to liquidate liabilities of the current period. Expenditures, other than interest on noncurrent obligations, are recorded when the fund liability is incurred. Real and personal property taxes are levied as of July 1 for each fiscal year on values assessed as of January 1. Property taxes are an enforceable lien on both real and personal property as of July 1 and are due and payable in three installments on November 15, February 15, and May 15. All property taxes are billed and collected by Lane County and remitted to the City. In the governmental fund financial statements, property taxes are reflected as revenues in the fiscal period for which they were levied, provided they are due, or past due and receivable within the current period, and collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities of the current period (60 days). Otherwise, they are reported as deferred revenues. Property taxes which are held at year-end by the collecting agency, Lane County, and are remitted to the City within the 60-day period are reported as "Due from other governments." Intergovernmental revenues are recognized as revenues when all eligibility requirements are met. There are however, essentially two types of intergovernmental revenues. In one, monies must be expended on the specific purpose or project before any amounts will be paid to the City; therefore, all eligibility requirements are determined to be met when the underlying expenditures are recorded. In the other, monies are virtually unrestricted as to the purpose of the expenditure and are usually revocable only for failure to comply with prescribed requirements; therefore, all eligibility requirements are determined to be met at the time of receipt or earlier if the susceptible to accrual criteria are met. Licenses and permits, charges for services, fines and forfeits, and miscellaneous revenues (except investment earnings) are recorded as revenues when received in cash because they are generally not measurable until actually received. Investment earnings are recorded as earned since they are measurable and available. Rental income is typically received in advance and is deferred when appropriate. Special assessments receivable and repayment of revolving loans expected to be collected within sixty days after year-end are considered measurable and available and are recognized as revenue. Assessment installments that are long-term are offset by deferred revenues. When both restricted and unrestricted resources are available for use, it is the City’s practice to use restricted resources first, then unrestricted resources as they are needed. continued íé CITY OF EUGENE, OREGON Notes to Basic Financial Statements (1) Summary of Significant Accounting Policies, continued (D) Measurement Focus, Basis of Accounting, and Financial Statement Presentation, continued Governmental Funds Governmental funds finance most governmental functions of the City. The acquisition, use, and balances of the City's expendable financial resources and the related liabilities, excluding those accounted for in proprietary funds, are accounted for through governmental funds. 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: General Fund The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Principal sources of revenue are property taxes, charges for services, licenses and permits, and intergovernmental revenues. Primary expenditures of the General Fund are made for fire and emergency medical services, library, recreation, and cultural services, planning and development, police, public works, and general administration. Community Development Special Revenue Fund The Community Development Special Revenue Fund is used to account for grant revenues received from the Federal government under provisions of Title I of the Community Development Act of 1974. Major expenditures include development loans to individuals and businesses, as well as capital improvements benefiting low-income persons. General Capital Projects Fund The General Capital Projects Fund is used to account for the financing and construction of capital facilities not financed by proprietary or other capital projects funds. General Fund revenues, federal and state grants, and bond proceeds provide the financing for the expenditures of this fund. Systems Development Capital Projects Fund The Systems Development Capital Projects Fund is used to account for construction of the non-assessable portion of capacity-enhancing capital projects. Financing is provided by a systems development charge levied against developing properties. Expenditures are restricted by state law to capacity-enhancing projects for the following systems: transportation, sanitary sewers, storm sewers, and parks facilities. Proprietary Funds Proprietary funds are used to account for the City's ongoing operations and activities which are similar to those found in the private sector. The measurement focus is upon the determination of net income. The following are the City's major proprietary funds: Ambulance Transport Fund The Ambulance Transport Fund accounts for the operation of emergency medical services provided to the public. Revenues are provided by user charges. continued íè CITY OF EUGENE, OREGON Notes to Basic Financial Statements (1) Summary of Significant Accounting Policies, continued (D) Measurement Focus, Basis of Accounting, and Financial Statement Presentation, continued Proprietary Funds, continued Municipal Airport Fund The Municipal Airport Fund accounts for the operations of the municipal airport. Principal sources of revenues are rental of terminal space to airlines and other service providers, landing fees, and parking fees. The fund receives Airport Improvement Program monies from the Federal Aviation Administration for capital improvements. The fund also imposes passenger facility charges on passengers utilizing the airport, the proceeds of which are restricted for use in financing eligible projects as determined by regulation. Parking Services Fund The Parking Services Fund accounts for the operations of City-owned parking facilities. Revenue sources include parking fees and fines, meter receipts, and rentals. The revenue is used to operate and maintain the parking facilities. Stormwater Utility Fund The Stormwater Utility Fund accounts for the operation and maintenance of the stormwater drainage system and the wetland resource protection and enhancement program. Primary revenues are stormwater user fees and the sale of wetland mitigation credits. Wastewater Utility Fund The Wastewater Utility Fund accounts for the operation, construction, and maintenance of the wastewater collection and treatment system. Primary revenues are wastewater user fees. Additionally, the City reports the following fund type: Internal Service Funds Internal service funds account for those activities and services furnished internally to other organizational units within the City on a cost reimbursement basis. Charges are made to the various departments to support these activities. The City's internal service funds include facilities services, fleet services, information systems and services, professional services, and risk and benefits. The aggregate of all internal service funds are reflected in the fund financial statements. Other Governmental Funds Other governmental funds include all nonmajor special revenue, debt service, and capital projects funds of the City. The following lists all other governmental funds by governmental fund type: Special Revenue Funds: Construction Permits Library Local Option Levy Library, Parks, and Recreation Public Safety Answering Point Road continued íç CITY OF EUGENE, OREGON Notes to Basic Financial Statements (1) Summary of Significant Accounting Policies, continued (D) Measurement Focus, Basis of Accounting, and Financial Statement Presentation, continued Other Governmental Funds, continued Special Revenue Funds, continued: Solid Waste and Recycling Special Assessment Management Telecom Registration and Licensing Transportation Utility Urban Renewal Agency General Urban Renewal Agency Riverfront Youth and School Services Levy Debt Service Funds: General Obligation Library Special Assessment Bond Urban Renewal Agency Urban Renewal Agency Riverfront Capital Projects Funds: Road Special Assessment Urban Renewal Agency Urban Renewal Agency Riverfront (E) Self-insurance The City retains a portion of the risk of loss for workers' compensation, general liability, and medical, dental, and vision employee benefits. The amount estimated to be payable is based on an actuarial report of the estimated ultimate loss, including incurred but not reported claims as of the Statement of Fund Net Assets date. Claims payable include all incremental costs directly incurred as a result of a claim, and consider estimated recoveries on both settled and unsettled claims. Claims expense is reduced by amounts recovered or expected to be recovered. Claims liability/expense are accounted for in the City's basic financial statements in an internal service fund. (F) Equity in Pooled Cash and Investments Policies adopted by the Investment Advisory Board and the Eugene City Council authorize the City to invest in obligations of the U.S. Treasury and its agencies, time certificates of deposit, bankers’ acceptances, municipal bonds, corporate bonds, commercial paper, repurchase agreements, reverse repurchase agreements, and the Oregon Local Government Investment Pool. continued ìð CITY OF EUGENE, OREGON Notes to Basic Financial Statements (1) Summary of Significant Accounting Policies, continued (F) Equity in Pooled Cash and Investments, continued It is the City’s policy to report at amortized cost all short-term, highly-liquid money market investments (including corporate bonds, commercial paper, bankers’ acceptances, municipal bonds, and U.S. Treasury and agency obligations) and participating interest-earning investment contracts with a remaining maturity at time of purchase of one year or less. Such investments are stated at cost, increased by accretion of discounts and reduced by amortization of premiums, both computed by the straight-line method. Callable investments purchased at a discount are amortized to the maturity date, and callable investments purchased at a premium are amortized to the first call date. Investments with a remaining maturity at time of purchase of more than one year are valued at fair value. The City maintains a common cash and investments pool for all City funds. Interest earned on the pooled cash and investments is allocated quarterly based on each fund’s average cash and investments balance as a proportion of the City’s total pooled cash and investments. For purposes of the Statement of Cash Flows, the City considers “cash” to include the pooled cash and investments, since the pool has the general characteristics of a demand deposit account, in that any participating fund may deposit additional cash at any time and also may withdraw cash at any time without prior notice or penalty. (G) Receivables Unbilled service accounts receivable that are significant and meet the measurable and available criteria for revenue recognition are accrued as revenue in the governmental fund financial statements at year-end. Significant unbilled service accounts receivable relating to the government-wide and proprietary fund financial statements are accrued as revenue when earned. (H) Interfund Receivables and Payables In the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. These receivables and payables are classified as "Due from other funds" or "Due to other funds" in the fund financial statements. During the year, borrowings that occur between funds are classified as interfund loans or advances. In the fund financial statements, the short-term portion of such borrowings are classified as “Interfund loans receivable” or “Interfund loans payable”. The noncurrent portion is classified as “Advances to other funds” or “Advances from other funds”. The governmental fund financial statements report a reservation of fund balance to indicate they are not available for appropriation and are not expendable available financial resources. In the government-wide financial statements, all interfund receivables and payables are combined and any residual balances between the governmental and business-type activities are reported as “Internal balances.” See Note 4(C) to the basic financial statements for details of outstanding interfund assets and liabilities at year- end. (I) Inventories and Prepaid Items Inventories of materials and supplies are valued at cost or average cost using the first-in/first-out method. Inventories are capitalized and charged to operations as consumed in both the government-wide and fund financial statements. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements. continued ìï CITY OF EUGENE, OREGON Notes to Basic Financial Statements (1) Summary of Significant Accounting Policies, continued (J) Capital Assets Capital assets include land, right-of-way (included with land), buildings, improvements, equipment, infrastructure, and other tangible assets costing over $5,000 used in operations that have initial useful lives extending beyond a year. Infrastructure are those capital assets that are stationary in nature and can be preserved for a significantly greater number of years than most other capital assets. The City has a transportation infrastructure system reported in governmental activities consisting of roads, bridges, sidewalks, and traffic and lighting systems. Infrastructure reported in business-type activities consists of a regional airfield, and stormwater and wastewater collection systems. As permitted by GASB 34, the City has limited the retroactive capitalization of governmental fund infrastructure to fiscal years ending after June 30, 1980. Although, the majority of such infrastructure was placed in service before that date, it has not been included in these financial statements since it has been primarily depreciated. All capital assets, except for infrastructure in governmental activities prior to July 1, 1980, have been capitalized in the government-wide and proprietary fund financial statements. In accordance with the current financial resources measurement focus, capital assets are not capitalized in the governmental fund financial statements. All purchased capital assets are valued at cost where historical records are available and at estimated historical cost where no historical records exist. Historical cost is measured by the cash or cash equivalent price of obtaining an asset, including ancillary charges necessary to place the asset into its intended location and condition for use. Donated capital assets are reported at their estimated fair value at the time of acquisition plus ancillary charges, if any. Additions, improvements, and other capital outlays that significantly extend the useful life of an asset are capitalized. Amounts expended for maintenance and repairs are charged to expenditures/expenses in the appropriate funds as incurred and are not capitalized. Capital improvements financed by special assessments which provide assets to the City’s Stormwater Utility Fund and Wastewater Utility Fund are capitalized on the proprietary fund Statement of Fund Net Assets. Capital assets are depreciated unless they are inexhaustible in nature (e.g., land and right-of-ways). Depreciation is an accounting process to allocate the cost of capital assets to expense in a systematic and rational manner to those periods expected to benefit from the use of capital assets. Depreciation is not intended to represent an estimate in the decline of fair market value, nor are capital assets, net of accumulated depreciation, intended to represent an estimate of the current condition of the assets, or the maintenance requirements needed to maintain the assets at their current level of condition. Depreciation is computed over the estimated useful lives of the capital assets. All estimates of useful lives are based on actual experience by City departments with identical or similar capital assets. Depreciation is calculated on the straight-line basis, except for infrastructure and improvements other than buildings reported in the governmental activities column of the government-wide financial statements, which are calculated using a composite depreciation method. The estimated useful lives of the various categories of assets are as follows: Estimated useful life Category Buildings 40-50 years Improvements other than buildings 20 years Infrastructure25-40 years Equipment 3-15 years Upon disposal of capital assets, cost and accumulated depreciation are removed from the accounts and, if appropriate, a gain or loss on the disposal is recognized. In accordance with the composite depreciation method, no gain or loss is recorded upon disposal, but rather, cost is removed from the capital asset account and charged to the accumulated depreciation account. continued ìî CITY OF EUGENE, OREGON Notes to Basic Financial Statements (1) Summary of Significant Accounting Policies, continued (J) Capital Assets, continued Capital assets of proprietary funds are reported net of accumulated depreciation in the government-wide Statement of Net Assets and the proprietary funds Statement of Fund Net Assets. Capital assets not specifically related to activities reported in proprietary funds are reported net of accumulated depreciation in the governmental activities column in the government-wide Statement of Net Assets. Depreciation expense on proprietary fund capital assets is reported in the government-wide Statement of Activities and the proprietary fund Statement of Revenues, Expenses, and Changes in Fund Net Assets. Depreciation expense on general capital assets is reported in the government-wide Statement of Activities as a direct expense. (K) Capitalized Interest Interest is capitalized on constructed assets in proprietary funds. For the year ended June 30, 2007, no interest was capitalized on proprietary fund capital assets. (L) Compensated Absences Liabilities for accumulated or vested vacation leave and compensation time benefits (compensated absences) are recorded in the government-wide financial statements and proprietary fund financial statements. The governmental fund financial statements do not report liabilities for compensated absences unless they are due for payment. Sick leave does not vest and is recorded in all funds as taken. (M) Noncurrent Obligations Noncurrent obligations are reported in the government-wide and proprietary fund financial statements as liabilities. The governmental fund financial statements do not report noncurrent obligations because they do not require the use of current financial resources. Bond discounts, premiums, and issuance costs are deferred and amortized over the term of the bonds using the bonds-outstanding method in the government-wide and proprietary fund financial statements, but are recognized during the current period in the governmental fund financial statements. The bonds-outstanding method does not differ significantly from the effective interest method. The limited tax pension obligations are deep discount bonds that increase in value based on the initial yield to maturity. This increase in value is reflected as an increase in noncurrent liabilities on the Statement of Net Assets and as interest expense on the Statement of Activities. (N) Fund Balance In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for specific purposes. (O) Indirect Expenses Allocation In the fund financial statements, the City allocates certain indirect costs incurred by the central services function of the General Fund to non-general funds in order to recover expenditures made on behalf of those other City funds. This allocation has been removed from the direct expenses column in the government-wide Statement of Activities and a separate column titled indirect expenses allocation has been presented. Indirect costs allocated to business-type activities are equal to the amount actually paid by the function. The remaining indirect costs are allocated to governmental activities based on personnel service costs. The remaining net expense in the central services function represents direct program activity of that function including their share of allocated indirect costs. ìí CITY OF EUGENE, OREGON Notes to Basic Financial Statements (2) Reconciliation of Government-wide and Fund Financial Statements (A) Explanation of Differences Between the Government-wide Statement of Net Assets and the Governmental Fund Balance Sheet The Balance Sheet for governmental funds (Exhibit 3) includes a reconciliation between total fund balances and total net assets of governmental activities in the Statement of Net Assets (Exhibit 1). The following are selected elements of that reconciliation. The Statement of Net Assets reports receivables at their net realizable value. However, receivables not available to pay for current-period expenditures are deferred in governmental funds. The details of this $17,542,399 difference are as follows: Receivables: Interest$912,549 Taxes4,196,337 Systems development charges800,300 Municipal court796,295 Assessments1,255,082 Loans and notes10,276,774 Subtotal18,237,337 Allowance for uncollectibles(694,938) Net adjustment$17,542,399 Capital assets are not financial resources in governmental funds, but reported in the Statement of Net Assets at their net depreciable value. The details of this $349,205,317 difference are as follows: Capital assets (net of accumulated depreciation) reported in the Statement of Net Assets - governmental activities column: Land and construction in progress$69,699,787 Other capital assets (net of accumulated depreciation)298,460,696 Capital assets (net of accumulated depreciation) reported in internal service funds included in the Statement of Net Assets - governmental activities column(18,955,166) Net adjustment$349,205,317 All liabilities are reported in the Statement of Net Assets. However, if they are not due and payable in the current period, they are not recorded in governmental funds. The details of this $55,691,613 difference are as follows: Bonds payable (less: deferred charge for issuance costs)$(46,217,957) Assessment deferral loans(11,945) Notes and contracts payable(841,554) Accrued interest payable(224,994) Compensated absences(7,013,516) Net OPEB obligation(1,089,745) Rebatable arbitrage(291,902) Net adjustment$(55,691,613) continued ìì CITY OF EUGENE, OREGON Notes to Basic Financial Statements (2) Reconciliation of Government-wide and Fund Financial Statements, continued (B) Explanation of Differences Between the Government-wide Statement of Activities and the Fund Statement of Revenues, Expenditures, and Changes in Fund Balances The Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities is provided at Exhibit 5. The following are selected elements of that reconciliation: Governmental funds defer revenues that do not provide current financial resources. However, the Statement of Activities recognizes such revenues at their net realizable value when earned, regardless of when received. The details of this $648,599 difference are as follows: Change in deferred revenue from the following sources: Property taxes receivable$109,014 Special assessments receivable(349,932) System development charges receivable(140,177) Municipal court receivables(91,264) Notes receivable1,139,675 Subtotal667,316 Change in the allowance for uncollectibles(18,717) Net adjustment$648,599 Donations of capital assets are reported as capital contributions in the Statement of Activities, but do not appear in the governmental funds because they are not financial resources. In addition, the Statement of Activities reports gains and losses arising from the disposal of existing capital assets, while governmental funds do not. The details of this $10,509,483 difference are as follows: Donations of capital assets$10,516,960 Sale of capital assets(7,477) Net adjustment$10,509,483 Governmental funds do not report expenditures for unpaid compensated absences, interest expense, or arbitrage since they do not require the use of current financial resources. However, the Statement of Activities reports such expenses when incurred, regardless of when settlement ultimately occurs. The details of this $1,478,989 difference are as follows: Compensated absences$(302,762) Net OPEB obligation(1,089,745) Accrued interest51,585 Amortization of issuance costs(138,067) Net adjustment$(1,478,989) continued ìë CITY OF EUGENE, OREGON Notes to Basic Financial Statements (2) Reconciliation of Government-wide and Fund Financial Statements, continued (B) Explanation of Differences Between the Government-wide Statement of Activities and the Fund Statement of Revenues, Expenditures, and Changes in Fund Balances, continued Capital outlay is reported as expenditures in governmental funds. However, the Statement of Activities allocates the cost of capital outlay over their estimated useful lives as depreciation expense. The details of this $7,301,117 difference are as follows: Capital outlay$21,518,787 Depreciation expense(14,217,670) Net adjustment$7,301,117 Repayments of long-term debt use current financial resources and are reported as expenditures in governmental funds. The payment of debt principal affects the Statement of Activities and is reported as a decrease in noncurrent liabilities in the Statement of Net Assets. The details of this $5,289,598 difference are as follows: Principal payments: General obligation debt$2,565,000 Certificates of participation2,185,000 Limited tax bonds220,057 State assessment deferral loans2,026 Notes and contracts payable317,515 Net adjustment$5,289,598 Transfers of capital assets are often made between proprietary funds and governmental funds when the use of an asset changes. Transfers of liabilities are sometimes made between proprietary funds and governmental funds when the fund responsible for repayment changes. Such transfers will provide or use economic resources in proprietary funds, but may not necessarily provide or use spendable financial resources in governmental funds. Transfer of governmental capital assets to proprietary funds$(2,685,434) (3) Stewardship, Compliance, and Accountability (A) Budgetary Information The City Manager submits to the Budget Committee a proposed operating and capital budget a sufficient length of time in advance to allow adoption of the budget prior to July 1. The operating and capital budget includes proposed expenditures and the means of financing them. Public hearings are conducted to obtain taxpayer comments. continued ìê CITY OF EUGENE, OREGON Notes to Basic Financial Statements (3) Stewardship, Compliance, and Accountability, continued (A) Budgetary Information, continued The City legally adopts its budget annually for all funds prior to July 1 through passage of a resolution. The resolution authorizes fund appropriations as current annual departmental requirements, debt service, capital outlay, interfund transfers, interfund loans, intergovernmental, and miscellaneous fiscal transactions. Expenditures cannot legally exceed appropriations at these control levels. Appropriations which have not been spent at year-end lapse, although an amending resolution passed in the subsequent year specifically provides for the reappropriation of prior-year lapsed encumbrances. Unexpected additional resources or appropriations may be added to the budget through the use of a supplementalbudget. A supplemental budget requires hearings before the public, publications in newspapers, and approval by the City Council. Original and supplemental budgets may be modified by the use of appropriation transfers between the levels of control. Such transfers require approval by passing a Council resolution authorizing the transfer. All budget amendments are subject to the limitations put forth in the Oregon Revised Statutes Chapters 294.305 through 294.565 (Oregon Budget Law). Supplemental appropriations, permitted by Oregon Budget Law, were authorized by the City Council during the fiscal year. The net effect of amending resolutions passed during the fiscal year was an appropriation increase of $28,815,212. (B) Overexpenditures of Appropriations For the year ended June 30, 2007, the Urban Renewal Agency Special Revenue Fund, the Urban Renewal Agency Debt Service Fund, and the Professional Services Internal Service Fund had budget-basis expenditures in excess of legal appropriations of $72,443, $72,425, and $13,947, respectively. (4) Detailed Notes on All Funds (A) Equity in Pooled Cash and Investments The City maintains a common cash and investments pool that is available for use by all funds. Each fund’s portion of this pool is displayed in the Statement of Net Assets, the Statement of Fund Net Assets, or the Balance Sheet as "Equity in pooled cash and investments.” Cash and investments are comprised of the following at June 30, 2007: Cash on hand$56,179 Deposits with banks17,512,651 Investments166,793,153 $184,361,983 Deposits At June 30, 2007, the City’s deposits with various financial institutions have a bank value of $20,889,128. For deposits in excess of federal depository insurance, Oregon Revised Statutes require the depository institution to maintain on deposit with a custodian, in a collateral pool, securities having a value not less than 25% of the outstanding certificates of participation which are issued by the collateral pool manager. The certificates of participation are issued in the City’s name and are held by the City. Custodial Credit Risk Custodial credit risk is the risk that in the event of a bank failure, the government’s deposits may not be returned to it. At June 30, 2007, the City has deposits of $13,379,198 insured by federal depository insurance and $4,500,000 collateralized by a minimum of 25% of the certificates of participation (per Oregon Revised Statutes). The remaining $3,009,930 is uncollateralized. continued ìé CITY OF EUGENE, OREGON Notes to Basic Financial Statements (4) Detailed Notes on All Funds, continued (A) Equity in Pooled Cash and Investments, continued Investments As of June 30, 2007, the City held the following investments and maturities: Weighted average% of Carryingmaturityinvestment Investment typevaluein yearsportfolio Corporate securities$40,531,9420.42824.2% Local government investment pool6,779,2980.0034.1% Municipal bonds8,766,3330.4805.3% U.S. agency securities106,667,3170.70064.0% U.S. treasury securities4,048,2632.1612.4% Total$166,793,1530.630100.0% The "weighted average maturity in years" calculation assumes that all investments are held until maturity. Interest Rate Risk As a means of limiting its exposure to losses arising from rising interest rates, the City’s investment policy limits investment as follows: MaximumMaximum % oflength Investment typeportfolioto maturity Bankers' acceptances50%6 months Corporate securities35%18 months Local government investment pool100%1 day State and local government obligations50%2 years U.S. agency securities100%2 years U.S. treasury securities100%3 years With the exception of pass-through funds, the maximum amount of pooled investments to be placed in the Local Government Investment Pool is limited by Oregon Statute to $39,836,066, which will increase proportionately to the Portland Consumer Price Index. The limit can be temporarily exceeded for ten business days and does not apply either to pass-through funds or to funds invested on behalf of another governmental unit. continued ìè CITY OF EUGENE, OREGON Notes to Basic Financial Statements (4) Detailed Notes on All Funds, continued (A) Equity in Pooled Cash and Investments, continued Investments, continued 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, 2007, the City’s investments were rated as follows: Highest Rating From Moody's Investors Service or Standard & Poor's Corporation Investment typeTotalAaa/AAAAa/AAA/AP-1/A-1Not rated Corporate securities$40,531,9425,029,46226,922,3426,607,2421,972,8960 Local government investment pool6,779,29800 0 06,779,298 Municipal bonds8,766,3338,766,3330 0 00 U.S. agency securities106,667,317106,667,3170 0 00 U.S. treasury securities4,048,2634,048,2630 0 00 Total$166,793,153124,511,37526,922,3426,607,2421,972,8966,779,298 The Oregon State Treasurer maintains the Oregon Short Term Fund (OSTF), of which the Local Government Investment Pool (LGIP) is a part. Participation by local governments is voluntary. The State of Oregon investment policies are governed by statute and the Oregon Investment Council. In accordance with Oregon Statutes, funds are invested as a prudent investor would do, exercising reasonable care, skill and caution. LGIP was created to offer a short-term investment alternative to Oregon local governments and it is not registered with the U.S. Securities and Exchange Commission. The investments are regulated by the OSTF and approved by the Oregon Investment Council (ORS 294.805 to 294.895). At June 30, 2007, the fair value of the City’s deposits with the LGIP approximates cost. The OSTF financial statements are available at http://ost.state.or.us. üüü The LGIP’s portfolio concentration of credit risk at June 30, 2007 included: Commercial Paper (31.0%), Corporate Bonds (17.9%), Certificates of Deposits (1.2%), U.S. Agency securities (49.0%) and Bank Notes (0.9%). The credit risk associated with the investments was: AAA rating (50.8%), AA rating (11.6%), A rating (34.2%), and not rated (3.4%). Concentration of Credit Risk The City’s policy for investing in individual issuers varies depending on the type of investments. Agency securities are restricted to no more than 25% for any one issuer. No more than 25% of the total portfolio of investments may be invested in a single issuer of bankers’ acceptances. Investments in commercial paper or corporate bonds of any one issuer may not exceed 5% of the investment portfolio. At June 30, 2007, more than 5% of the City’s portfolio was invested in Federal National Mortgage Association (17.5%), Federal Home Loan Mortgage Corporation (15.5%), Federal Home Loan Bank (14.6%), and Federal Farm Credit Bank (12.6%) securities. continued ìç CITY OF EUGENE, OREGON Notes to Basic Financial Statements (4) Detailed Notes on All Funds, continued (C) Interfund Receivables, Payables, and Transfers The composition of interfund receivables and payables at June 30, 2007 is as follows: Receivable fundPayable fundAmount Interfund loans receivable/payable (current portion of advances) Internal service fundsInternal service funds$199,805 Total interfund loans receivable/payable$199,805 Advances to/from other funds Internal service fundsInternal service funds$430,081 Total advances to/from other funds$430,081 Due to/from other funds GeneralOther governmental funds $ 46,866 Total due to/from other funds$46,866 The Facilities Services Fund borrowed $1,338,384 from the Fleet Services Fund to pay for various energy retrofit projects. The outstanding balance on June 30, 2007 is $629,886. The current and noncurrent portions of the borrowing are $199,805 and $430,081, respectively. The Public Safety Answering Point Special Revenue Fund had a cash deficit of $46,866 as of June 30, 2007. The deficit is due to the timing of revenue collections. The General Fund transferred funds to cover the temporary deficit. continued ëï CITY OF EUGENE, OREGON Notes to Basic Financial Statements (4) Detailed Notes on All Funds, continued (E) Capital Assets, continued Depreciation expense was charged to functions/programs as follows: Governmental activities: Central services$105,131 Fire and emergency medical services875,144 Library, recreation, and cultural services2,007,837 Planning and development390,641 Police 687,144 Public works10,151,773 Capital assets held by the government's internal service funds are charged to the various functions based on their usage of the assets2,623,291 $16,840,961 Business-type activities: Ambulance transport$63,841 Municipal airport3,753,307 Parking services763,911 Stormwater utility1,069,807 Wastewater utility3,594,205 $9,245,071 continued ëê CITY OF EUGENE, OREGON Notes to Basic Financial Statements (4) Detailed Notes on All Funds, continued (F) Deferred Revenue Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. In addition, governmental funds and proprietary funds report deferred revenue in connection with resources that have been received but not yet earned. The various components of deferred revenue consist of the following: Fund by type Unavailable Unearned Total Property taxes receivable: General $4,037,71504,037,715 Other governmental funds1,071,17201,071,172 Assessments receivable: Other governmental funds1,253,27501,253,275 Systems development charges receivable: Systems Development Capital Projects800,3000800,300 Notes receivable: Community Development Special Revenue9,941,23809,941,238 General Capital Projects55,698055,698 Systems Development Capital Projects9,10809,108 Other governmental funds270,7300270,730 Other: General796,2951,720,2612,516,556 Road Capital Projects011,82811,828 Ambulance Transport023,45623,456 Municipal Airport054,61954,619 Parking Services07,5277,527 Stormwater Utility087,45587,455 Internal service funds083,84083,840 Other governmental funds1,8071,223,6541,225,461 Total deferred revenue$18,237,3383,212,64021,449,978 (G) Operating Leases The City conducts some of its operations from leased facilities located both inside and outside the central business district. All such leases for facilities are classified as operating leases and expire within the next five years. The total rental expense for the year ended June 30, 2007, for operating leases was $431,302. Most of these leases for facilities contain an option whereby the City can, after the initial lease term, renew its lease for periods of one to ten years. These options enable the City to retain use of facilities in desirable operating areas. The following is a schedule of future minimum rental payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of June 30, 2007: continued ëé CITY OF EUGENE, OREGON Notes to Basic Financial Statements (4) Detailed Notes on All Funds, continued (G) Operating Leases, continued Fiscal year ending June 30Rentals 2008$365,766 2009130,625 2010107,990 201153,356 20122,747 Total minimum future rental$660,484 (H) Bond Anticipation Note The City entered into an arrangement with KeyBank National Association in the form of a Revolving Credit Facility dated November 9, 2004, currently bearing interest at 6.35%, and having an authorized limit of $2,500,000 maturing on November 29, 2009. As of June 30, 2007, the City had a $0 balance on this credit facility with no draws made during the current fiscal year. Draws on this credit facility are recorded as a liability of the Special Assessment Capital Projects Fund. The line of credit is available to finance construction of local improvement projects which primarily benefit the property owners against whose properties special assessments are levied. (I) General Obligation Bond and Revolving Credit Facility On November 7, 2006, Eugene voters passed Measure 20-110, authorizing the City to issue a maximum of $27,490,000 of general obligation (G.O.) bonds. The proceeds from the sale of the bonds are to be used for costs related to the purchase of land for parks and open space, and the construction and improvement of athletic fields and the West Eugene Wetlands Education Center. The City can issue the bonds in one or more series. The bonds can be issued to provide interim financing and to refund the bonds that provide interim financing. On May 13, 2007, the City entered into a General Obligation Bond and Revolving Credit Facility with Bank of America, currently bearing interest at 5.75% with a maturity date of June 1, 2012. The facility has an authorized limit of $6,875,000 and is further limited to $27,490,000 less the amount of any general obligation bonds issued for the purpose of repaying the credit facility. As of June 30, 2007, the City had a $1,425,000 balance on the credit facility with no long-term bonds issued to repay this debt. Draws on this credit facility are recorded as a liability of the General Capital Projects Fund. The debt will be repaid from general property tax revenues or by the future issuance of long-term general obligation bonds, which can be issued at the City’s discretion. The General Obligation Bond and Revolving Credit Facility is backed by the full faith and credit of the City and is included in the City’s G.O. bonded debt margin limit. Beginning Ending balanceIncreaseDecreasebalance Governmental activities G.O. bond and revolving credit facility$01,425,00001,425,000 continued ëè CITY OF EUGENE, OREGON Notes to Basic Financial Statements (4) Detailed Notes on All Funds, continued (J) Noncurrent Liabilities General Obligation Bonds The City issues general obligation bonds to finance major construction projects in governmental and business- type activities. G.O. bonds in governmental activities are backed by the full faith and credit of the City and are serviced by general property tax revenues. The Airport Refunding Bonds are accounted for as a business-type activity and are also backed by the full faith and credit of the City, although the debt payments are to be paid from airport revenues. The City’s G.O. bonded debt is subject to a debt margin of 3% of real market value per ORS 287.004. For the year ended June 30, 2007, the City had 93% of capacity available. G.O. bonds currently outstanding are as follows: OriginalEnding Governmental activitiesissuanceInterest rates (%)balance General obligation bonds serviced by general property taxes: Parks and Open Spaces Bonds, Series 1999$19,000,0004.600% to 5.250%1,760,000 Fire Projects Bonds, Series 20028,680,0003.000% to 4.650%6,860,000 Parks and Open Spaces Bonds, Series 20046,305,0002.500% to 4.650%5,300,000 General Obligation Refunding Bonds, Series 200624,990,0003.500% to 4.125%23,900,000 58,975,00037,820,000 Business-type activities General obligation bonds serviced by specific fund revenues: Airport Refunding Bonds, Series 19973,935,0004.625% to 4.700%415,000 Total general obligation bonds$62,910,00038,235,000 In prior years, the City defeased certain general obligation bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City’s financial statements. At June 30, 2007, $23.4 million of bonds outstanding are considered defeased. Annual debt service requirements to maturity for general obligation bonds are as follows: Governmental activitiesBusiness-type activities Fiscal year ending June 30PrincipalInterestPrincipalInterest 2008$2,670,0001,527,315415,00019,505 20092,755,0001,424,40900 20102,870,0001,316,34400 20112,965,0001,206,61300 20123,070,0001,087,81200 2013-201715,725,0003,512,12000 2018-20227,435,000857,55500 2023330,00015,34500 $37,820,00010,947,513415,00019,505 continued ëç CITY OF EUGENE, OREGON Notes to Basic Financial Statements (4) Detailed Notes on All Funds, continued (J) Noncurrent Liabilities, continued Certificates of Participation The City issues certificates of participation (COPs) to finance major construction projects in governmental activities. The Library Obligations are backed by the full faith and credit of the City, although the debt payments are serviced from Urban Renewal Agency tax increment revenues under an intergovernmental agreement. Pursuant to the intergovernmental agreement between the City and the Urban Renewal Agency, the tax increment revenues provided by the Urban Renewal Agency are recorded as a transfer into the Library Debt Service Fund. The Atrium Obligations are also backed by the full faith and credit of the City, although the debt payments are to be paid from rental payments made by property occupants, including City departments. The Santa Clara Fire Obligations are also backed by the full faith and credit of the City and the debt payments are made by the General Fund. OriginalEnding Governmental activitiesissuanceInterest rates (%)balance Certificates of participation serviced by tax increment revenues: Library Obligations, Series 2000$18,500,0005.000%6,650,000 Certificates of participation serviced by general property taxes: Santa Clara Fire Station, Series 20032,090,0002.000% to 4.000%1,485,000 Certificates of participation serviced by specific fund revenues: Atrium Obligations, Series 1998A (tax-exempt)1,200,0004.300% to 4.900%805,000 Atrium Obligations, Series 1998B (taxable)1,200,0006.125% to 6.200%845,000 Total certificates of participation$22,990,0009,785,000 Annual debt service requirements to maturity for certificates of participation are as follows: Governmental activities Fiscal year ending June 30PrincipalInterest 2008$2,420,000419,375 20092,525,000300,823 20102,680,000175,247 2011340,000103,463 2012355,00089,230 2013-20171,265,000225,878 2018200,00011,165 $9,785,0001,325,181 continued êð CITY OF EUGENE, OREGON Notes to Basic Financial Statements (4) Detailed Notes on All Funds, continued (J) Noncurrent Liabilities, continued Limited Tax Bonds The City issues limited tax bonds in governmental and business-type activities. Limited tax bonds in governmental activities include limited tax improvement bonds and limited tax pension bonds. Limited tax improvement bonds finance public improvements that benefit private parties. Improvement bonds are secured by the benefited properties and are to be repaid in installments from property owners. Limited tax pension bonds finance a portion of the estimated unfunded actuarial liability with the Oregon Public Employees Retirement System. The pension bonds are to be repaid from existing revenue sources. Limited tax bonds in business-type activities financed the Broadway Garages construction project and are serviced from available parking revenues. All limited tax bonds are backed by the full faith and credit of the City, within the limitations of Article XI of the Oregon Constitution. OriginalEnding Governmental activitiesissuanceInterest rates (%)balance Limited tax bonds: Limited Tax Improvement Bonds, Series 1999 S$970,0004.550% to 4.650%40,000 Limited Tax Pension Bonds, Series 2002 84,335,0005.850% to 7.410%63,952,884 Limited Tax Improvement Bonds, Series 20061,036,4275.100%876,370 Subtotal86,341,42764,869,254 Business-type activities Limited tax bonds: Broadway Garages Limited Tax Bonds, Series 1997 (taxable)7,000,0006.750% to 7.000%5,790,000 Total limited tax bonds$93,341,42770,659,254 The Limited Tax Pension Bonds, Series 2002, in governmental activities, are deep discount bonds and reported net of accretion. However, the annual debt service requirements to maturity are reported on a cash basis and do not account for accreted amounts. The following table reconciles the ending balance of limited tax bonded debt and the annual debt service requirements to maturity schedule: Total limited tax bonds$64,869,254 Less: Accretion of deep discount(4,737,904) Total debt service requirements for limited tax bonds$60,131,350 On June 1, 2007, the City exercised an optional redemption provision on its Limited Tax Pension Bond, Series 2002. The bonds, with a maturity date of June 1, 2025, were called at par in the amount of $7,665,000. continued êï CITY OF EUGENE, OREGON Notes to Basic Financial Statements (4) Detailed Notes on All Funds, continued (J) Noncurrent Liabilities, continued Limited Tax Bonds, continued Annual debt service requirements to maturity for limited tax improvement bonds are as follows: Governmental activitiesBusiness-type activities Fiscal year ending June 30PrincipalInterestPrincipalInterest 2008$40,00045,624285,000392,405 2009044,695325,000371,513 2010044,695370,000347,663 2011044,695420,000320,506 2012044,695470,000289,913 2013-2017876,370178,7803,110,000865,928 201800810,00028,350 $916,370403,1845,790,0002,616,278 Annual debt service requirements to maturity for limited tax pension bonds are as follows: Governmental activitiesBusiness-type activities Fiscal year ending June 30PrincipalInterestPrincipalInterest 2008$527,1883,557,18400 2009627,2383,672,13400 2010706,9863,812,38700 2011781,7473,972,62500 2012844,0994,150,27300 2013-20174,859,49224,112,37100 2018-202214,923,23021,833,56500 2023-202731,005,0008,690,59400 20284,940,000338,39000 59,214,98074,139,52300 Total limited tax bonds$60,131,35074,542,7075,790,0002,616,278 continued êî CITY OF EUGENE, OREGON Notes to Basic Financial Statements (4) Detailed Notes on All Funds, continued (J) Noncurrent Liabilities, continued Revenue Bonds The City issues revenue bonds to finance major construction projects in business-type activities. The Airport Revenue Refunding Bonds are not backed by the full faith and credit of the City, but rather, are secured and serviced by pledged net revenues of the airport. The Airport Revenue Refunding Bonds include a rate covenant requiring the airport to maintain net revenues at a minimum of 1.25 times debt service. For the year ended June 30, 2007, the debt service coverage ratio was 4.43. OriginalEnding Business-type activitiesissuanceInterest rates (%)balance Revenue bonds serviced by specific fund revenues: Airport Revenue Refunding Bonds, Series 2000$3,905,0005.650% to 5.700%590,000 Annual debt service requirements to maturity for revenue bonds are as follows: Business-type activities Fiscal year ending June 30PrincipalInterest 2008$590,00033,630 $590,00033,630 Notes Payable The City issues notes to finance major construction projects in governmental and business-type activities. The Oregon Department of Environmental Quality (ODEQ) note pays interest at 4.07% and is secured by a pledge of available net sewer revenues. LoanInterestEnding Governmental activitiesamountratebalance Notes payable: Oregon Department of Environmental Quality - Barger-Greenhill Pump Station and Force Main$2,962,3444.070%841,554 Annual debt service requirements to maturity for notes payable are as follows: Governmental activites Fiscal year ending June 30PrincipalInterest 2008$327,71630,540 2009339,52017,069 2010174,3183,112 $841,55450,721 continued êí CITY OF EUGENE, OREGON Notes to Basic Financial Statements (4) Detailed Notes on All Funds, continued (J)Noncurrent Liabilities, continued Notes Payable, continued The ODEQ note in governmental activities will be repaid from system development receipts collected in the System Development Capital Projects Fund. The ODEQ note includes a coverage requirement to maintain sewer rates sufficient to generate net revenues that maintain a debt service coverage factor of 1.05. At June 30, 2007, the coverage factor for the Barger- Greenhill Pump Station and Force Main note was 3.88. Assessment Deferral Loans The City of Eugene has entered into loan agreements under the Oregon Department of Environmental Quality Assessment Deferral Loan Program. Under this program, deferral loans are granted to assist property owners who will experience extreme financial hardship from payment of mandated sewer assessments. Each sewer assessment deferral is evidenced by a contract between the City and the property owner. The sewer assessment deferral loans are repaid to the ODEQ in quarterly installments equaling the amounts collected from the qualifying property owners. As of June 30, 2007, the City has drawn advances of $632,311 from the ODEQ for purposes of deferring sewer assessments, of which $619,864 had been repaid by year-end. ODEQ . assessment deferral loans are liabilities of the Special Assessment Management Special Revenue Fund Rebatable Arbitrage The City rebates interest earned on arbitrage as required by the federal tax code. Arbitrage reviews are performed periodically on all City tax-exempt bonds and obligations, and material liabilities are recorded in proprietary funds when incurred. The City had an estimated rebatable arbitrage of $291,102 at June 30, 2007 which will be liquidated when due with existing reserves, accumulated from excess interest revenues in the General Capital Projects Fund and the Library Debt Service Fund. Compensated Absences At June 30, 2007, the City had compensated absences of $7,896,587 included in governmental activities. The General Fund, internal service funds, and other governmental funds are typically used to liquidate these liabilities. Internal Service Fund Debt Based on an analysis of billings, governmental activities have been determined to be the predominant source of revenue for all internal service funds. Therefore, noncurrent liabilities in governmental activities include those in internal service funds. As of June 30, 2007, internal service fund debt included the Atrium Obligations of $1,650,000, Limited Tax Pension Bonds of $63,952,884, deferred bond discounts net of premiums of $158,290, and $883,071 in compensated absences. continued êì CITY OF EUGENE, OREGON Notes to Basic Financial Statements (5) Other Information (A) Risk Management The City has established an internal service fund to account for and finance its risks of loss. The City has a self-insured liability program which covers personal injury, public officials errors and omissions, automobile, and employer’s liability, with a maximum self-insured retention of $500,000 per occurrence. In addition, the City has a self-insured workers’ compensation program which covers employees’ work related illnesses and injuries, including employer’s liability, with a maximum self-insured retention of $500,000 per occurrence. All regular full and part-time City employees are eligible for medical, dental, and vision insurance coverage. Employees may choose between two self-insured plans: the City Health Plan, a Preferred Provider Organization (PPO) plan or the City Managed Care Plan, a Point of Service (POS) plan. The City has established a self-insurance fund to pay medical, dental, and vision claims of employees and their dependents on the City Health Plan, up to the self-insurance retention limit of $100,000 per employee. Coverage for workers’ compensation, general liability, and employees’ health claims in excess of the self- insurance retention limit is purchased from commercial insurers. The City also purchases all-risk property insurance coverage from a commercial insurer. The property insurance policy has a basic $25,000 deductible, with earthquake and flood insurance coverages subject to $250,000 deductible per occurrence. During the previous three fiscal years, there were two general liability claims that exceeded the insurance coverage levels. Claims liabilities reported by the City are based on an actuarial estimate of the ultimate cost of settling claims incurred, including incurred but not reported (IBNR) claims as of June 30, 2007. Claims liabilities include all incremental costs incurred directly as a result of a claim, and consider estimated recoveries on both settled and unsettled claims. Claims expense has been reduced by amounts recovered, or expected to be recovered through excess insurance. At June 30, 2007, a total claims liability of $9,878,134 is reported in the Risk and Benefits Internal Service Fund. All prior and current year claims are fully reserved and have not been discounted. The City does not utilize annuity contracts from commercial insurers. Therefore, during this reporting period, all known liabilities have been disclosed. The following changes occurred in the claims liability in the current and previous fiscal year: FiscalLiabilityCurrent-year year balance atclaims andLiability endedbeginningchanges inClaimbalance at June 30of yearestimatespaymentsend of year $ 20069,837,66216,527,043(16,584,653)9,780,052 20079,780,05216,351,025(16,252,943)9,878,134 continued êê CITY OF EUGENE, OREGON Notes to Basic Financial Statements (5) Other Information, continued (B) Joint Ventures The City of Eugene is a participant with Lane County, the City of Springfield, the Eugene Water and Electric Board, and the Lane Council of Governments in the Regional Executive Group (REG). The REG is governed by a seven-member board consisting of the Chief Administrative Officer of each of the participating governments, plus the County Assessor and the County Sheriff, all of whom have an equal vote in the REG operations. The REG is a joint venture established by intergovernmental agreement to administer and set policy for the Regional Information Service (RIS), the computer center serving the participating governments. The City of Eugene maintains an ongoing financial responsibility for its share of RIS liabilities and for its proportionate share of any RIS contracts entered into while bound by the intergovernmental agreement, until such contracts are paid off. Additionally, the City has an ongoing financial responsibility as the REG's primary customer, providing approximately 43% of its revenues. Although the City of Eugene has no explicit, measurable equity interest in the REG, it does maintain a residual interest in RIS assets upon dissolution of the joint venture. The REG does not issue a separate financial report. All RIS financial activity is accounted for in the Information Services Fund, an enterprise fund of the Lane County reporting entity. Lane County’s most recently published financial statement was for the year ended June 30, 2006, where its Information Services Fund reflected operating income of $647,883, an increase in net assets of $653,005 and total net assets of $4,652,761. For the fiscal year ended June 30, 2007, the City paid $1,891,547 to Lane County for its share of RIS operations. The City of Eugene is also a participant with Lane County and the City of Springfield in the Metropolitan Wastewater Management Commission (MWMC), a joint venture established by intergovernmental agreement to construct, maintain, and operate regional sewerage facilities. The MWMC consists of a seven-member board to which the City of Eugene appoints three voting members. The City of Eugene has no explicit, measurable equity interest in the MWMC. However, the City has an ongoing financial responsibility for the operations of the MWMC in that the City is obligated to adopt disposal rates and charges not less than those adopted by the MWMC, and to forward to the MWMC, its share of the revenues as specified in the adopted financing plan, which requires that all MWMC administrative, operational, and maintenance expenses be financed through a uniform district-wide monthly fee. MWMC contracts with the City of Eugene for operation of the regional sewerage facilities on a cost reimbursement basis which is accounted for in the Wastewater Utility Fund. For the fiscal year ended June 30, 2007, the City provided billable operations to MWMC costing $10,174,337 and MWMC owed the City $1,063,797 for unreimbursed costs at year-end. The City of Springfield includes the MWMC as a component unit of its financial reporting entity. MWMC’s most recently published financial statement was for the year ended June 30, 2006, which reflected net income of $385,839 and total fund equity of $96,152,038. Separate financial statements for MWMC can be obtained from the City of Springfield Finance Department. (C) Retirement Plan Plan Description The City is a participating employer in the Oregon Public Employees Retirement System (PERS), an agent multiple-employer public employee retirement system established under Oregon Revised Statutes 238.600 that acts as a common investment and administrative agent for public employers in the State of Oregon. PERS is a defined benefit pension plan that provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to members and their beneficiaries. Benefits are established by state statute. continued êé CITY OF EUGENE, OREGON Notes to Basic Financial Statements (5) Other Information, continued (C) Retirement Plan, continued Plan Description, continued In the 2003 legislative session, the Oregon Legislative Assembly created a successor plan for PERS. The Oregon Public Service Retirement Plan (OPSRP) a cost-sharing multiple-employer defined benefit and defined contribution pension plan. OPSRP is effective for all employees hired on or after August 29, 2003, and applies to any inactive PERS members who return to employment following a six month or greater break in service. The new plan consists of a defined benefit program (the “Pension Program”) and a defined contribution portion (the Individual Account Program or “IAP”). The Pension Program portion of OPSRP provides a life pension funded by employer contributions. Benefits are calculated by a formula for members who attain normal retirement age. The formula takes into account final average salary, years of service, and a factor that varies based on type of service (general versus police or fire). The defined contribution portion of OPSRP is provided to all members who are PERS or OPSRP eligible. State statute requires that covered employees contribute 6.0% of their annual covered salary to the IAP plan effective January 1, 2004. Statute allows that the employer may elect to pay any or all of the employees’ required IAP contributions. Those employees who had established a PERS membership prior to the creation of OPSRP will retain their existing PERS accounts, but member contributions made after the beginning of 2004 will be deposited into the member’s IAP account. Both PERS and OPSRP are administered by the Oregon Public Employees Retirement Board (OPERB). The comprehensive annual financial report of the funds administered by the OPERB may be obtained by writing to Oregon Public Employees Retirement System, P.O. Box 23700, Tigard, OR 97281-3700, by calling (503) 598- http://oregon.gov/PERS/ . 7377, or by accessing the PERS web site at Funding Policy The City has elected to pay all of the employees’ required IAP contributions. For the fiscal year ended June 30, 2007, the 6.0% IAP contribution was $4,875,909 (6.01% of covered payroll). In addition to the IAP contribution, the City contributed 16.49% of covered payroll to the defined benefit pension plans. This contribution rate was determined as part of the December 31, 2003 PERS actuarial valuation. The most recent actuarial valuation was prepared as of December 31, 2005. The 2005 valuation was used to establish rates as of July 1, 2007. The City also charges an internal rate of 6.0% of payroll to departments to fund the repayment of the City’s pension obligation bonds, which were issued in 2002. Annual Pension Cost All participating employers are required by law to submit the contributions as adopted by OPERB. For the fiscal year ended June 30, 2007, the City’s annual pension expenditures/expense exclusive of the 6.0% IAP contribution was $14,557,979. This amount consisted of the annual required contribution to the defined benefit pension plans of $13,385,408 and $1,172,571 in amortization of pension assets. The City’s contributions were equal to the annual required contributions, which were less than the annual pension cost as a result of the amortization of pension assets. The City’s annual pension cost and pension assets for the year ended June 30, 2007, were as follows: continued êè CITY OF EUGENE, OREGON Notes to Basic Financial Statements (5) Other Information, continued (C) Retirement Plan, continued Annual Pension Cost, continued Annual required contribution$13,385,408 Interest on pension assets(5,202,160) Adjustment to the annual required contribution6,374,731 Annual pension cost14,557,979 Contributions made13,385,408 Decrease in pension assets(1,172,571) Pension assets, beginning of year65,026,999 Pension assets, end of year$63,854,428 For the fiscal year ending June 30, 2007, the City’s annual required contribution rate for PERS was determined using the entry age normal method. Beginning July 1, 2007, the City’s pension liability and annual required contribution rate for PERS will be determined using the projected unit credit method. The change in the PERS unfunded accrued liability (UAL), due to the change from the entry age normal to projected unit credit method, will be amortized as a level percentage of the combined valuation payroll (PERS plus OPSRP payroll) over a rolling three year period. The December 31, 2005 PERS and OPSRP defined benefit pension plan actuarial valuations were based on the projected unit credit cost method. The actuarial assumptions included an investment return of 8.0% (8.5% for PERS variable account balances), a projected salary growth of 3.75%, and a projected inflation rate of 2.75%. The PERS actuarial valuation included a healthcare cost inflation trend rate of 9.0% in 2007 decreasing to 5.0% in 2013. The actuarial value of assets equals the market value of assets. The unfunded actuarially accrued liability and plan gains and losses are amortized as a level percentage of the combined valuation payroll over a closed period of 20 years for PERS and 16 years for OPSRP. Both the PERS and OPSRP defined benefit pension plans utilize a contribution rate stabilization method to restrict the degree of change to new contribution rates. The new contribution rate will not increase or decrease from the prior contribution rate by more than the greater of 3 percentage points or 20 percent of the prior contribution rate. If the plan’s funded percentage drops below 80 percent or increases above 120 percent, the size of the collar doubles. The actuarial value of assets is equal to their fair market value less contingency, capital preservation, and rate guarantee reserves. The Oregon Legislative Assembly created a second level or “Tier” of PERS benefits that modified service and disability retirement allowances payable to persons who established PERS membership on or after January 1, 1996 (“Tier Two” members). Future interest credits on all member contributions in Tier One and Tier Two Regular Accounts are assumed to accrue at an annual rate of 8.0%, compounded annually. The following table presents three-year trend information for the City’s defined benefit pension plans: Annual Percentage Fiscal year pension of APC Pension contributed ending June 30 cost (APC)Contributionassets 2005$6,117,6865,617,89792%65,632,289 200613,230,96912,625,67995%65,026,999 200714,557,97913,385,40892%63,854,428 continued êç CITY OF EUGENE, OREGON Notes to Basic Financial Statements (5) Other Information, continued (C) Retirement Plan, continued Annual Pension Cost, continued Based on the PERS December 31, 2005 actuarial valuation, the City has an expected UAL of ($8,784,819). The December 31, 2005 valuation does not take into account investment performance since that date. (D) Other Post-employment Benefits (OPEB) Plan Description The City administers a single-employer defined benefit healthcare plan per the requirements of collective bargaining agreements. The healthcare plan provides post-retirement medical, dental, and vision coverage for eligible retirees, their spouses, domestic partners, and dependents on a self-pay basis. Benefit provisions are established through negotiations between the City and representatives of collective bargaining units. Eligible participants may select from one of the City’s two self-insured healthcare plans: the City Health Plan or the City Managed Care Plan. The level of benefits provided by the plans are the same as those afforded to active employees. Coverage is provided to retirees, spouses, and domestic partners until they become eligible for Medicare, typically age 65, and eligible dependents until age 18. The City’s post-retirement healthcare plan was established in accordance with Oregon Revised Statutes (ORS) 243.303. ORS stipulate that for the purpose of establishing healthcare premiums, the rate must be based on all plan members, including both active employees and retirees. The difference between retiree claims costs, which because of the effect of age is generally higher in comparison to all plan members, and the amount of retiree healthcare premiums represents the City’s implicit employer contribution. The City also provides post-employment life insurance benefits to fully disabled employees through a single employer defined benefit plan. The plan provides a waiver of life insurance premiums for employees who participate in the City’s life insurance plan who become totally disabled; the plan is underwritten by Standard Insurance Company, whereby the City pays a premium rate for active and disabled employees, and Standard Insurance Company provides term life insurance coverage. In the event the City changes life insurance carriers, Standard Insurance Company does not retain any liability for future death benefits. In changing life insurance carriers, if the new carrier was unwilling to accept the liability for the disabled employees, the City would be responsible for any future death benefits. The City’s post-employment life insurance benefit for disabled employees is an elective benefit offered by the City, this benefit is subject to collective bargaining agreements. The amount of life insurance benefits that a disabled employee receives is based on the amount of coverage and the reduction pattern in effect at the time of disablement. The coverage amount varies per employer group; the maximum benefit is $250,000. The City did not establish an irrevocable trust (or equivalent arrangement) to account for either plan. Instead, the activities of the plans are reported in the City’s Risk and Benefits Internal Service Fund. Neither plan issues a separate report. The City has adopted early implementation (effective June 30, 2007) of GASB Statement No. 45 (GASB 45), Accounting and Financial Reporting by Employers for Postemployment Benefits Other than Pensions. At the June 30, 2007 implementation date, an initial net OPEB obligation was established on the estimated cumulative effect if GASB 45 had been in effect for the previous fiscal years. Funding Policy The City has the authority to establish and amend contribution requirements. The required contribution is based on projected pay-as-you-go financing requirements. Since the City’s healthcare plan is self-insured, the annual required contributions can fluctuate. For the fiscal year ending June 30, 2007, the City’s combined plan contributions were $914,520. continued éð CITY OF EUGENE, OREGON Notes to Basic Financial Statements (5) Other Information, continued (D) Other Post-employment Benefits (OPEB), continued Annual OPEB Cost and Net OPEB Obligation The City’s annual other post-employment benefit cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance within the parameters of GASB 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the City’s annual OPEB cost for the fiscal year ending June 30, 2007, the amount actually contributed to the plans, and changes in the City’s net OPEB obligation: Annual required contribution$2,805,747 Interest on net OPEB obligation29,000 Adjustment to the annual required contribution(37,730) Annual OPEB cost (expense)2,797,017 Contributions made914,520 Increase in net OPEB obligation1,882,497 Net OPEB obligation, beginning of year580,000 Net OPEB obligation, end of year$2,462,497 Based on prior actuarial valuations, the City had recorded a $580,000 liability for post-employment life insurance benefits for disabled employees. Upon implementing GASB 45, this liability has been reported as a beginning of year net OPEB obligation. The City’s annual OPEB cost, the contribution, the percentage of annual OPEB cost contributed to the plans, and the net OPEB obligation for 2007 were as follows: Percentage of Fiscal yearAnnualannual OPEBNet OPEB ending June 30OPEB costContributioncost contributedobligation 2007$2,797,017914,52033%2,462,497 Funded Status and Funding Progress As of June 30, 2007, the most recent actuarial valuation date, the actuarial accrued liability for benefits was $22,854,225, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $22,854,225. The covered payroll (annual payroll of active employees covered by the plans) was $75,075,500, and the ratio of the UAAL to the covered payroll was 30 percent. For the fiscal year ending June 30, 2007, the City has set aside $889,074 to pay for future post-employment life insurance benefits for disabled employees, which is included in the unrestricted portion of net assets in the Risk and Benefits internal service fund. Since these assets have not been placed in a qualified trust (or equivalent arrangement) they have not been recognized as part of the actuarial valuation. continued éï CITY OF EUGENE, OREGON Notes to Basic Financial Statements (5) Other Information, continued (D) Other Post-employment Benefits (OPEB), continued Funded Status and Funding Progress, continued Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information, following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time, relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The June 30, 2007 actuarial valuations for the healthcare plan and the post-employment life insurance benefits for disabled employees were based on the entry age normal and the projected unit credit actuarial cost methods, respectively. The actuarial assumptions for both valuations included an investment return of 5.0%. The healthcare plan actuarial valuation included a healthcare cost inflation trend rate of 9.0% in 2007 decreasing to 6.0% in 2020. The unfunded actuarially accrued liability and the gains and losses for both plans are amortized as a level dollar amount over an open period of 30 years. (E) Contingencies The City is contingently liable with respect to lawsuits and other claims incidental to the ordinary course of its operations. Claims covered by the City’s self-insurance internal service fund are reviewed and losses are accrued based upon the judgment of City management. Based upon the advice of legal counsel with respect to such litigation and claims, City management cannot determine what effect the ultimate disposition of these matters will have on the financial position or results of operations of City funds. continued éî CITY OF EUGENE, OREGON Notes to Basic Financial Statements (5) Other Information, continued (F) Outstanding Encumbrances At June 30, 2007, the City has encumbered the following significant commitments: FundAmount General$4,014,782 Community Development Special Revenue565,322 General Capital Projects1,277,430 Road Capital Projects941,876 Systems Development Capital Projects994,932 Ambulance Transport9,680 Municipal Airport2,005,906 Parking Services60,823 Stormwater Utility984,390 Wastewater Utility81,466 Internal service funds1,191,403 Other governmental funds3,491,536 Total outstanding encumbrances$15,619,546 éí (this page intentionally left blank) éì ÎÛÏË×ÎÛÜ ÍËÐÐÔÛÓÛÒÌßÎÇ ×ÒÚÑÎÓßÌ×ÑÒ City of Eugene, OregonA-1 General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) BudgetActual Budget GAAP Original Final basis Adjustment basis Revenues Taxes82,792,75582,792,75582,358,844082,358,844 Licenses and permits6,759,6006,759,6005,950,53905,950,539 Intergovernmental3,285,0198,467,0176,114,973(119,403)5,995,570 Rental income58,50058,50098,375098,375 Charges for services11,076,86511,368,55211,535,350(858,895)10,676,455 Fines and forfeits3,529,0603,556,6543,407,15603,407,156 Miscellaneous1,727,5952,001,6352,588,239(22,519)2,565,720 Total revenues109,229,394115,004,713112,053,476(1,000,817)111,052,659 Expenditures Current - departmental: Central services22,193,08222,235,03121,140,826(4,883,423)16,257,403 Fire and emergency medical services21,759,76621,951,22721,612,386(4,682)21,607,704 Library, recreation, and cultural services18,422,51318,681,72218,325,700(8,474)18,317,226 Planning and development7,440,8197,785,5647,156,882(328,866)6,828,016 Police37,457,94543,222,58739,881,03110,00039,891,031 Public works5,749,3325,985,1485,555,513(5,031)5,550,482 Debt service270,000270,000268,3900268,390 Intergovernmental650,000650,000437,740(437,740)0 Total expenditures113,943,457120,781,279114,378,468(5,658,216)108,720,252 Excess (deficiency) of revenues over expenditures(4,714,063)(5,776,566)(2,324,992)4,657,3992,332,407 Other financing sources (uses) Interfund loans issued and repaid(62,500)(62,500)(62,500)62,5000 Transfers in7,280,0607,280,0607,160,060(4,856,810)2,303,250 Transfers out(6,209,975)(7,402,439)(6,801,769)41,000(6,760,769) Total other financing sources (uses)1,007,585(184,879)295,791(4,753,310)(4,457,519) Net change in fund balance(3,706,478)(5,961,445)(2,029,201)(95,911)(2,125,112) Fund balance, July 1, 200631,388,83932,840,42732,840,427445,23933,285,666 Fund balance, June 30, 200727,682,36126,878,98230,811,226349,32831,160,554 éë City of Eugene, OregonA-2 Community Development Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) BudgetActual Budget GAAP Original Final basis Adjustment basis Revenues Intergovernmental3,759,7655,155,9393,818,98503,818,985 Charges for services24,10024,10022,773022,773 Repayment of revolving loans0001,038,2361,038,236 Miscellaneous886,000886,000613,765(472)613,293 Total revenues4,669,8656,066,0394,455,5231,037,7645,493,287 Expenditures Current - departmental: Central services4,0004,0001,50066,00067,500 Planning and development4,534,0255,132,2883,762,6702,024,6555,787,325 Capital outlay604,264437,174164,1630164,163 Loans granted4,053,9694,142,8242,024,655(2,024,655)0 Total expenditures9,196,2589,716,2865,952,98866,0006,018,988 Excess (deficiency) of revenues over expenditures(4,526,393)(3,650,247)(1,497,465)971,764(525,701) Other financing sources (uses) Principal payments received1,590,0001,590,0001,038,236(1,038,236)0 Transfers in0235,000200,0000200,000 Transfers out(66,000)(66,000)(66,000)66,0000 Total other financing sources (uses)1,524,0001,759,0001,172,236(972,236)200,000 Net change in fund balance(3,002,393)(1,891,247)(325,229)(472)(325,701) Fund balance, July 1, 20063,002,3931,891,2471,891,24701,891,247 Fund balance, June 30, 2007001,566,018(472)1,565,546 éê CITY OF EUGENE, OREGON Notes to Required Supplementary Information June 30, 2007 (1)Schedule of Funding Progress – Oregon PERS Oregon Public Employee Retirement System’s schedule of funding progress for the City of Eugene: ActuarialUnfundedUnfunded ActuarialActuarialaccruedactuarialactuarial liability valuationvalue ofliability,accruedFundedCoveredas a percentage dateassetsentry ageliabilityratiopayrollof covered payroll 12/31/01$415,689,042416,268,737579,695100%65,136,5921% 12/31/03470,039,745506,073,41236,033,66793%70,016,20151% 12/31/05579,816,082571,031,263(8,784,819)102%75,604,360-12% (2)Schedule of Funding Progress – OPEB Other Post Employment Benefits schedule of funding progress: UnfundedUnfunded ActuarialActuarialActuarialactuarialactuarial liability valuationvalue ofaccruedaccruedFundedCoveredas a percentage dateassetsliabilityliabilityratiopayrollof covered payroll 06/30/07$ 022,854,22522,854,2250%75,075,50030% The City’s other post employment benefits include retiree healthcare and waiver of life insurance premiums for disabled employees. The actuarial cost method for retiree healthcare benefits is entry age normal; the cost method for waiver of life insurance premiums for disabled employees is projected unit credit. éé CITY OF EUGENE, OREGON Notes to Required Supplementary Information (3)Budget to GAAP Reconciliation 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 Community Development Special Revenue Fund. Community GeneralDevelopment Net change in fund balance - budget basis$(2,029,201)(325,229) Budget resources not qualifying as revenues or other financing sources under GAAP: Indirect and other cost reimbursements received are reported as revenues or other financing sources on a budget basis. Such receipts are reclassified as a reduction of expenditures on a GAAP basis.(5,835,109)0 Revenues and other financing sources required by GAAP not qualifying as budget resources: Adjustment for fair value of investments at year end is reported as miscellaneous revenue on a GAAP basis. Such revenues are not reflected on a Budget basis.(22,519)(472) Budget expenditures not qualifying as expenditures or other financing uses under GAAP: Indirect and other costs reimbursed are reported as expenditures on a budget basis. Such disbursements are reclassified as a reduction of revenues and other financing sources on a GAAP basis.5,835,1090 Prepaid expenses are recorded in the year paid on a budget basis. However, such expenses are matched to the accounting period benefited under GAAP.(135,892)0 Loans made to other funds are reported as an other financing use on a budget basis. Such loans are reclassified as either interfund loans receivable (current portion) or advances to other funds (long-term portion) on a GAAP basis.62,5000 Net change in fund balance - GAAP basis.$(2,125,112)(325,701) Principle payments received of $1,038,236 and loans granted of $2,024,655 are reported in the Community Development Fund as other financing sources and non-departmental expenditures, respectively. Such amounts have been reclassified as revenues and departmental expenditures on a GAAP basis. In addition, indirect cost reimbursements are reclassified from transfers to departmental administrative expenditures on a GAAP basis. Such reclassifications are not included in the above schedule. éè ÑÌØÛÎ ÍËÐÐÔÛÓÛÒÌßÎÇ ×ÒÚÑÎÓßÌ×ÑÒ îíîïûòíêõíæ÷êîï÷îèûðöçîøé ùíïúóîóîõéèûè÷ï÷îèé City of Eugene, OregonB-1 Combining Balance Sheet Nonmajor Governmental Funds June 30, 2007 (amounts in dollars) Total SpecialDebtCapitalOther RevenueServiceProjectsGovernmental FundsFundsFundsFunds Assets Equity in pooled cash and investments29,936,9297,732,4094,141,98441,811,322 Receivables: Interest69,88690,6650160,551 Taxes525,515385,1070910,622 Accounts682,33500682,335 Assessments203,770901,457165,0051,270,232 Loans and notes278,42900278,429 Allowance for uncollectibles(449)00(449) Due from other governments1,471,48940,074615,8702,127,433 Prepaids and deposits115,36700115,367 Inventories861,35700861,357 Assets held for resale538,9291,5411,867,4972,407,967 Total assets34,683,5579,151,2536,790,35650,625,166 Liabilities and fund balances Liabilities Accounts payable760,728032,690793,418 Wages payable788,92000788,920 Due to other funds46,8660046,866 Due to other governments80,05006280,112 Deposits1,3240481,441482,765 Interest payable44800448 Deferred revenue2,293,5551,361,813177,0983,832,466 Assessment deferral loans50200502 Total liabilities3,972,3931,361,813691,2916,025,497 Fund balances Reserved for prepaid expenditures115,36700115,367 Reserved for debt service0764,5550764,555 Reserved for inventories861,35700861,357 Reserved for assets held for resale538,9291,5411,867,4972,407,967 Unreserved29,195,5117,023,3444,231,56840,450,423 Total fund balances30,711,1647,789,4406,099,06544,599,669 Total liabilities and fund balances34,683,5579,151,2536,790,35650,625,166 éç City of Eugene, OregonB-2 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds For the fiscal year ended June 30, 2007 (amounts in dollars) Total SpecialDebtCapitalOther RevenueServiceProjectsGovernmental FundsFundsFundsFunds Revenues Taxes15,695,1017,310,687023,005,788 Licenses and permits6,471,366006,471,366 Intergovernmental9,735,24401,900,62911,635,873 Rental income103,122049,309152,431 Charges for services3,813,3700939,5074,752,877 Fines and forfeits91,4480091,448 Special assessments35,834237,84378,971352,648 Repayment of revolving loans37,1630037,163 Miscellaneous2,086,599568,209425,9123,080,720 Total revenues38,069,2478,116,7393,394,32849,580,314 Expenditures Current - departmental: Central services3,734,005003,734,005 Fire and emergency medical services375,02300375,023 Library, recreation, and cultural services6,641,639006,641,639 Planning and development5,840,084005,840,084 Police2,071,109002,071,109 Public works8,430,935008,430,935 Debt service: Principal2,5104,760,05704,762,567 Interest13,1392,057,8724,9662,075,977 Arbitrage fee 08,13208,132 Capital outlay4,780,24802,764,4797,544,727 Intergovernmental6,397,451006,397,451 Total expenditures38,286,1436,826,0612,769,44547,881,649 Excess (deficiency) of revenues over expenditures(216,896)1,290,678624,8831,698,665 Other financing sources (uses) Transfers in1,889,9902,395,6451,457,3605,742,995 Transfers out(25,000)(3,674,736)(17,733)(3,717,469) Total other financing sources (uses)1,864,990(1,279,091)1,439,6272,025,526 Net change in fund balances1,648,09411,5872,064,5103,724,191 Fund balances, July 1, 200629,063,0707,777,8534,034,55540,875,478 Fund balances, June 30, 200730,711,1647,789,4406,099,06544,599,669 ` èð ÍÐÛÝ×ßÔ ÎÛÊÛÒËÛ ÚËÒÜÍ Ý±³¾·²·²¹ ¬¿¬»³»²¬ º±® ¿´´ ·²¼·ª·¼«¿´ ²±²³¿¶±® °»½·¿´ ®»ª»²«» º«²¼ ¿®» ®»°±®¬»¼ ¸»®»ò Ì¸» ½±³¾·²»¼ ¬±¬¿´ ¿®» ®»°±®¬»¼ ·² ¬¸» ½±³¾·²·²¹ ²±²³¿¶±® ¹±ª»®²³»²¬¿´ º«²¼ ¬¿¬»³»²¬ ¿¬ Þóï ¿²¼ Þóîò Ú«²¼ ¬¿¬»³»²¬ º±® ³¿¶±® °»½·¿´ Í½¸»¼«´» ±º ®»ª»²«»ô »¨°»²¼·¬«®»ô ¿²¼ ½¸¿²¹» ·² º«²¼ ¾¿´¿²½» ó ¾«¼¹»¬ ¿²¼ ¿½¬«¿´ ¿®» ¿´± °®»»²¬»¼ ¸»®» º±® »¿½¸ ·²¼·ª·¼«¿´ ²±²³¿¶±® °»½·¿´ ®»ª»²«» º«²¼ò Þ«¼¹»¬ ¿²¼ ¿½¬«¿´ ½±³°¿®·±² º±® ³¿¶±® °»½·¿´ ®»ª»²«» º«²¼ ¿®» ®»°±®¬»¼ ¿ ®»¯«·®»¼ «°°´»³»²¬¿®§ ·²º±®³¿¬·±² ¿¬ ßóîò Ó¿¶±® Í°»½·¿´ Î»ª»²«» Ú«²¼æ Ý±³³«²·¬§ Ü»ª»´±°³»²¬ Ú«²¼ ó Ì± ¿½½±«²¬ º±® ¹®¿²¬ ®»ª»²«» ®»½»·ª»¼ º®±³ ¬¸» Ú»¼»®¿´ ¹±ª»®²³»²¬ò Ó¿¶±® »¨ó Ò±²³¿¶±® Í°»½·¿´ Î»ª»²«» Ú«²¼æ Ý±²¬®«½¬·±² Ð»®³·¬ Ú«²¼ Ô·¾®¿®§ Ô±½¿´ Ñ°¬·±² Ô»ª§ Ú«²¼ ó Ì± ¿½½±«²¬ º±® ®»ª»²«» ®»½»·ª»¼ º®±³ ¿ º±«®ó§»¿® ´·¾®¿®§ ´±½¿´ ±°¬·±² ´»ª§ ¬± Ô·¾®¿®§ô Ð¿®µô ¿²¼ Î»½®»¿¬·±² Ú«²¼ ó Ì± ¿½½±«²¬ º±® ½±²¬®·¾«¬·±² º®±³ °®·ª¿¬» ¼±²±® ¬± «°°±®¬ ¬¸» °«¾´·½ ó Ì± ¿½½±«²¬ º±® ±°»®¿¬·±² ±º ¬¸» »³»®¹»²½§ ¼·°¿¬½¸ ½»²¬»®ò Î»±«®½» ¿®» °®·³¿®·´§ º®±³ ¬»´»°¸±²» »¨½·» ¬¿¨» ¿²¼ ·²¬»®¹±ª»®²³»²¬¿´ ®»ª»²«»ò Î±¿¼ Ú«²¼ ó Ì± ¿½½±«²¬ º±® ¬¸» ±°»®¿¬·±² ¿²¼ ³¿·²¬»²¿²½» ±º ¬¸» Ý·¬§ù ¬®»»¬ ¬®¿²°±®¬¿¬·±² §¬»³ò Î»±«®½» Ð¿®¬²»®¸·° ß¹®»»³»²¬ô Í¬¿¬» ÑÌ×ß ××× ³±²·»ô º»» ¿²¼ °»®³·¬ô ¿²¼ ±¬¸»® ³·½»´´¿²»±« ¹®¿²¬ò Í±´·¼ É¿¬» ¿²¼ Î»½§½´·²¹ Ú«²¼ Í°»½·¿´ ß»³»²¬ Ó¿²¿¹»³»²¬ Ú«²¼ ó Ì± ¿½½±«²¬ º±® ±°»®¿¬·±² ±º ¬¸» °®±°»®¬§ ³¿²¿¹»³»²¬ ¿²¼ ¿»ó ³»²¬ ¸¿®¼¸·° ¼»º»®®¿´ °®±¹®¿³ò Ì»´»½±³ Î»¹·¬®¿¬·±² ¿²¼ Ô·½»²·²¹ Ú«²¼ ó Ì± ¿½½±«²¬ º±® ®»¹·¬®¿¬·±² º»» ¿²¼ ¾«·²» °®·ª·´»¹» ¬¿¨» ½±´´»½¬»¼ º®±³ °®±ª·¼»® ±º ¬»´»½±³³«²·½¿¬·±² »®ª·½» ·² Û«¹»²»ò Î»±«®½» ¿®» «»¼ º±® °®±¹®¿³ ¿¼³·²·¬®¿¬·±² ¿²¼ Ì®¿²°±®¬¿¬·±² Ë¬·´·¬§ Ú«²¼ ó Ì± ¿½½±«²¬ º±® ¼»¼·½¿¬»¼ ®»ª»²«» ¿²¼ ®»´¿¬»¼ ½¿°·¬¿´ °®±¶»½¬ »¨°»²¼·¬«®» ·²½«®®»¼ ª»¸·½´» º«»´ ¬¿¨ ¿²¼ Ô¿²» Ý±«²¬§ ÑÌ×ß ××× ³±²·»ò ó Ì± ¿½½±«²¬ º±® ®»ª»²«» ®»½»·ª»¼ º®±³ ¿² ¿¼ ª¿´±®»³ ¬¿¨ ±² °®±°»®¬§ ´±½¿¬»¼ ·² ¬¸» Î·ª»®º®±²¬ Î»»¿®½¸ Ð¿®µò Î»±«®½» ¿®» «»¼ º±® ·³°®±ª·²¹ ¬¸» ½±²¼·¬·±² ¿²¼ ¿°°»¿®¿²½» ±º ¬¸» Î·ª»®º®±²¬ Î»»¿®½¸ Ð¿®µò Ç±«¬¸ ¿²¼ Í½¸±±´ Í»®ª·½» Ô»ª§ Ú«²¼ ó Ì± ¿½½±«²¬ º±® °®±½»»¼ ±º ¬¸» Ç±«¬¸ ¿²¼ Í½¸±±´ Í»®ª·½» Ô»ª§ ¿°°®±ª»¼ ¬¸» Û«¹»²» ìÖ ¿²¼ Þ»¬¸»´ ½¸±±´ ¼·¬®·½¬ò City of Eugene, OregonC-3 Construction Permits Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Licenses and permits4,315,6003,036,70903,036,709 Intergovernmental04,132(4,132)0 Charges for services2,863,4002,222,00802,222,008 Fines and forfeits10,00091,448091,448 Miscellaneous290,000329,343(3,776)325,567 Total revenues7,479,0005,683,640(7,908)5,675,732 Expenditures Current - departmental: Central services00345,000345,000 Fire and emergency medical services471,957375,0230375,023 Planning and development5,836,0464,777,495(4,157)4,773,338 Public works486,008391,5610391,561 Total expenditures6,794,0115,544,079340,8435,884,922 Excess (deficiency) of revenues over expenditures684,989139,561(348,751)(209,190) Other financing sources (uses) Transfers out(345,000)(345,000)345,0000 Total other financing sources (uses)(345,000)(345,000)345,0000 Net change in fund balance339,989(205,439)(3,751)(209,190) Fund balance, July 1, 20065,996,7365,996,7368,3106,005,046 Fund balance, June 30, 20076,336,7255,791,2974,5595,795,856 èí City of Eugene, OregonC-4 Library Local Option Levy Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Taxes4,731,1594,759,20104,759,201 Rental income25,24026,634026,634 Miscellaneous115,751142,062(1,370)140,692 Total revenues4,872,1504,927,897(1,370)4,926,527 Expenditures Current - departmental: Library, recreation, and cultural services5,534,8005,529,776(55,087)5,474,689 Total expenditures5,534,8005,529,776(55,087)5,474,689 Excess (deficiency) of revenues over expenditures(662,650)(601,879)53,717(548,162) Total other financing sources (uses)0000 Net change in fund balance(662,650)(601,879)53,717(548,162) Fund balance, July 1, 20062,214,4472,214,44745,2772,259,724 Fund balance, June 30, 20071,551,7971,612,56898,9941,711,562 èì City of Eugene, OregonC-5 Library, Parks, and Recreation Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Intergovernmental01,04901,049 Miscellaneous245,975439,060(1,391)437,669 Total revenues245,975440,109(1,391)438,718 Expenditures Current - departmental: Library, recreation, and cultural services174,845108,3590108,359 Capital outlay272,15394,079094,079 Total expenditures446,998202,4380202,438 Excess (deficiency) of revenues over expenditures(201,023)237,671(1,391)236,280 Total other financing sources (uses)0000 Net change in fund balance(201,023)237,671(1,391)236,280 Fund balance, July 1, 20061,969,4681,969,46801,969,468 Fund balance, June 30, 20071,768,4452,207,139(1,391)2,205,748 èë City of Eugene, OregonC-6 Public Safety Answering Point Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Intergovernmental840,000784,3470784,347 Charges for services1,381,0961,355,17001,355,170 Miscellaneous4515,59205,592 Total revenues2,221,5472,145,10902,145,109 Expenditures Current - departmental: Central services0074,00074,000 Police2,147,5472,071,10902,071,109 Total expenditures2,147,5472,071,10974,0002,145,109 Excess (deficiency) of revenues over expenditures74,00074,000(74,000)0 Other financing sources (uses) Transfers out(74,000)(74,000)74,0000 Total other financing sources (uses)(74,000)(74,000)74,0000 Net change in fund balance0000 Fund balance, July 1, 20060000 Fund balance, June 30, 20070000 èê City of Eugene, OregonC-7 Road Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Licenses and permits305,000318,6500318,650 Intergovernmental8,370,4308,129,18608,129,186 Rental income43,90051,190051,190 Charges for services125,000166,8920166,892 Miscellaneous233,000367,558(2,794)364,764 Total revenues9,077,3309,033,476(2,794)9,030,682 Expenditures Current - departmental: Central services00537,000537,000 Public works8,577,1058,066,325(26,951)8,039,374 Total expenditures8,577,1058,066,325510,0498,576,374 Excess (deficiency) of revenues over expenditures500,225967,151(512,843)454,308 Other financing sources (uses) Transfers out(537,000)(537,000)537,0000 Total other financing sources (uses)(537,000)(537,000)537,0000 Net change in fund balance(36,775)430,15124,157454,308 Fund balance, July 1, 20064,267,4324,267,432834,4075,101,839 Fund balance, June 30, 20074,230,6574,697,583858,5645,556,147 èé City of Eugene, OregonC-8 Solid Waste and Recycling Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Licenses and permits549,250567,1790567,179 Intergovernmental024,365024,365 Charges for services2507,32307,323 Fines and forfeits2,500000 Miscellaneous8,00018,953(224)18,729 Total revenues560,000617,820(224)617,596 Expenditures Current - departmental: Central services0026,00026,000 Planning and development444,137386,7800386,780 Total expenditures444,137386,78026,000412,780 Excess (deficiency) of revenues over expenditures115,863231,040(26,224)204,816 Other financing sources (uses) Transfers out(26,000)(26,000)26,0000 Total other financing sources (uses)(26,000)(26,000)26,0000 Net change in fund balance89,863205,040(224)204,816 Fund balance, July 1, 2006164,641164,6410164,641 Fund balance, June 30, 2007254,504369,681(224)369,457 èè City of Eugene, OregonC-9 Special Assessment Management Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Charges for services85,82037,965037,965 Special assessments0035,83435,834 Miscellaneous78,000110,983(884)110,099 Total revenues163,820148,94834,950183,898 Expenditures Current - departmental: Central services117,464115,45424,000139,454 Debt service20,0003,90203,902 Total expenditures137,464119,35624,000143,356 Excess (deficiency) of revenues over expenditures26,35629,59210,95040,542 Other financing sources (uses) Principal payments received42,00035,834(35,834)0 Loans - deferred assessments(60,000)000 Transfers in60,00017,733017,733 Transfers out(74,000)(24,000)24,0000 Total other financing sources (uses)(32,000)29,567(11,834)17,733 Net change in fund balance(5,644)59,159(884)58,275 Fund balance, July 1, 20061,358,5901,358,59001,358,590 Fund balance, June 30, 20071,352,9461,417,749(884)1,416,865 èç City of Eugene, OregonC-10 Telecom Registration and Licensing Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Licenses and permits2,510,0002,548,82802,548,828 Miscellaneous150,000294,531(3,512)291,019 Total revenues2,660,0002,843,359(3,512)2,839,847 Expenditures Current - departmental: Central services4,646,7862,524,11045,4412,569,551 Total expenditures4,646,7862,524,11045,4412,569,551 Excess (deficiency) of revenues over expenditures(1,986,786)319,249(48,953)270,296 Other financing sources (uses) Transfers out(38,000)(38,000)38,0000 Total other financing sources (uses)(38,000)(38,000)38,0000 Net change in fund balance(2,024,786)281,249(10,953)270,296 Fund balance, July 1, 20065,699,5055,699,50514,1075,713,612 Fund balance, June 30, 20073,674,7195,980,7543,1545,983,908 çð City of Eugene, OregonC-11 Transportation Utility Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Taxes3,419,0003,359,53603,359,536 Intergovernmental1,864,174643,2860643,286 Miscellaneous82,000201,984(3,398)198,586 Total revenues5,365,1744,204,806(3,398)4,201,408 Expenditures Debt service14,00011,747011,747 Capital outlay10,061,6624,686,16904,686,169 Total expenditures10,075,6624,697,91604,697,916 Excess (deficiency) of revenues over expenditures(4,710,488)(493,110)(3,398)(496,508) Other financing sources (uses) Interfund loans issued and repaid(234,000)(234,000)234,0000 Transfers in1,500,0001,500,00001,500,000 Total other financing sources (uses)1,266,0001,266,000234,0001,500,000 Net change in fund balance(3,444,488)772,890230,6021,003,492 Fund balance, July 1, 20063,446,2373,446,237(234,000)3,212,237 Fund balance, June 30, 20071,7494,219,127(3,398)4,215,729 çï City of Eugene, OregonC-12 Urban Renewal Agency General Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Charges for services5002,46002,460 Repayment of revolving loans0037,16337,163 Miscellaneous105,000120,857(1,251)119,606 Total revenues105,500123,31735,912159,229 Expenditures Current - departmental: Central services0021,50021,500 Planning and development299,832372,275194,750567,025 Loans granted2,214,421216,250(216,250)0 Total expenditures2,514,253588,5250588,525 Excess (deficiency) of revenues over expenditures(2,408,753)(465,208)35,912(429,296) Other financing sources (uses) Principal payments received50,00037,163(37,163)0 Transfers in299,832372,2570372,257 Total other financing sources (uses)349,832409,420(37,163)372,257 Net change in fund balance(2,058,921)(55,788)(1,251)(57,039) Fund balance, July 1, 20062,108,9212,108,921538,9292,647,850 Fund balance, June 30, 200750,0002,053,133537,6782,590,811 çî City of Eugene, OregonC-13 Urban Renewal Agency Riverfront Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Taxes575,000588,9020588,902 Rental income25,00025,298025,298 Miscellaneous25,00022,101(403)21,698 Total revenues625,000636,301(403)635,898 Expenditures Current - departmental: Central services0021,50021,500 Planning and development261,316134,441(21,500)112,941 Intergovernmental25,00025,000(25,000)0 Total expenditures286,316159,441(25,000)134,441 Excess (deficiency) of revenues over expenditures338,684476,86024,597501,457 Other financing sources (uses) Transfers out(320,000)0(25,000)(25,000) Total other financing sources (uses)(320,000)0(25,000)(25,000) Net change in fund balance18,684476,860(403)476,457 Fund balance, July 1, 200651,48351,483051,483 Fund balance, June 30, 200770,167528,343(403)527,940 çí City of Eugene, OregonC-14 Youth and School Services Levy Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Taxes8,594,0006,987,46206,987,462 Intergovernmental193,137153,0110153,011 Charges for services18,00021,552021,552 Miscellaneous271,00052,838(260)52,578 Total revenues9,076,1377,214,863(260)7,214,603 Expenditures Current - departmental: Library, recreation, and cultural services1,160,6911,058,59101,058,591 Intergovernmental8,239,0006,397,45106,397,451 Total expenditures9,399,6917,456,04207,456,042 Excess (deficiency) of revenues over expenditures(323,554)(241,179)(260)(241,439) Total other financing sources (uses)0000 Net change in fund balance(323,554)(241,179)(260)(241,439) Fund balance, July 1, 2006578,580578,5800578,580 Fund balance, June 30, 2007255,026337,401(260)337,141 çì ÜÛÞÌ ÍÛÎÊ×ÝÛ ÚËÒÜÍ Ò±²» ±º ¬¸» Ý·¬§ ¼»¾¬ »®ª·½» º«²¼ ³»»¬ ¬¸» ½®·¬»®·¿ º±® ³¿¶±® º«²¼ ®»°±®¬·²¹ò Ì¸»®»º±®»ô ¬¸» ½±³¾·²·²¹ ¬¿¬»³»²¬ º±® ¿´´ ·²¼·ª·¼«¿´ ¼»¾¬ »®ª·½» º«²¼ ¿®» ®»°±®¬»¼ ¸»®»ò Ì¸» ½±³¾·²»¼ ¬±¬¿´ ¿®» ®»°±®¬»¼ ·² ¬¸» ½±³¾·²·²¹ ²±²³¿¶±® ¹±ª»®²³»²¬¿´ º«²¼ ¬¿¬»³»²¬ ¿¬ Þóï ¿²¼ Þóîò Í½¸»¼«´» ±º ®»ª»²«»ô »¨°»²¼·¬«®»ô ¿²¼ ½¸¿²¹» ·² º«²¼ ¾¿´¿²½» ó ¾«¼¹»¬ ¿²¼ ¿½¬«¿´ ¿®» ¿´± °®»»²¬»¼ ¸»®» º±® »¿½¸ ·²¼·ª·¼«¿´ ¼»¾¬ »®ª·½» º«²¼ò Ò±²³¿¶±® Ü»¾¬ Í»®ª·½» Ú«²¼æ ó Ì± ¿½½±«²¬ º±® ¬¸» ¿½½«³«´¿¬·±² ±º ®»±«®½» º±®ô ¿²¼ ¬¸» °¿§³»²¬ ±ºô ¹»²»®¿´ ±¾´·¹¿¬·±² ·²¼»¾¬»¼²» ±º ¬¸» Ý·¬§ô »¨½´«¼·²¹ ¼»¾¬ ¿½½±«²¬»¼ º±® ¿ °®±°®·»¬¿®§ º«²¼ ±® °»½·¿´ ¿»ó Ô·¾®¿®§ Ü»¾¬ Í»®ª·½» Ú«²¼ Í°»½·¿´ ß»³»²¬ Þ±²¼ Ü»¾¬ Í»®ª·½» Ú«²¼ ó Ì± ¿½½±«²¬ º±® °»½·¿´ ¿»³»²¬ ®»½»·ª¿¾´» ¿²¼ ¬¸» »®ª·½ó ½±´´»½¬·±² ¿²¼ ·²¬»®»¬ ·²½±³»ò ó Ì± ¿½½±«²¬ º±® ¬¸» ¿½½«³«´¿¬·±² ±º ¬¿¨ ·²½®»³»²¬ ®»±«®½» ¿²¼ ó Ì± ¿½½±«²¬ º±® ¬¸» °®±½»»¼ ±º ¼»¾¬ ·«»¼ ¬± °¿§ º±® ¬¸» City of Eugene, Oregon D-1 Combining Balance Sheet Nonmajor Debt Service Funds June 30, 2007 (amounts in dollars) Urban SpecialUrbanRenewal GeneralAssessmentRenewalAgency ObligationLibraryBondAgencyRiverfrontTotal Assets Equity in pooled cash and investments256,69559,300413,0006,849,407154,0077,732,409 Receivables: Interest48,7560041,909090,665 Taxes195,03200190,0750385,107 Assessments00901,45700901,457 Due from other governments20,1450019,929040,074 Assets held for resale001,541001,541 Total assets520,62859,3001,315,9987,101,320154,0079,151,253 Liabilities and fund balances Liabilities Deferred revenue243,7880886,042231,98301,361,813 Total liabilities243,7880886,042231,98301,361,813 Fund balances Reserved for debt service276,84059,300428,41500764,555 Reserved for assets held for resale001,541001,541 Unreserved0006,869,337154,0077,023,344 Total fund balances276,84059,300429,9566,869,337154,0077,789,440 Total liabilities and fund balances520,62859,3001,315,9987,101,320154,0079,151,253 çë City of Eugene, Oregon D-2 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Debt Service Funds For the fiscal year ended June 30, 2007 (amounts in dollars) Urban SpecialUrbanRenewal GeneralAssessmentRenewalAgency ObligationLibraryBondAgencyRiverfrontTotal Revenues Taxes3,631,121003,679,56607,310,687 Special assessments00237,84300237,843 Miscellaneous107,5253,06075,970371,43910,215568,209 Total revenues3,738,6463,060313,8134,051,00510,2158,116,739 Expenditures Debt service: Principal2,565,0001,975,000220,057004,760,057 Interest1,623,805381,87552,192002,057,872 Arbitrage fee0089907,2338,132 Total expenditures4,188,8052,356,875273,14807,2336,826,061 Excess (deficiency) of revenues over expenditures(450,159)(2,353,815)40,6654,051,0052,9821,290,678 Other financing sources (uses) Transfers in38,7932,356,8520002,395,645 Transfers out000(3,674,736)0(3,674,736) Total other financing sources (uses)38,7932,356,8520(3,674,736)0(1,279,091) Net change in fund balances(411,366)3,03740,665376,2692,98211,587 Fund balances, July 1, 2006688,20656,263389,2916,493,068151,0257,777,853 Fund balances, June 30, 2007276,84059,300429,9566,869,337154,0077,789,440 çê City of Eugene, OregonD-3 General Obligation Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Taxes3,635,4433,631,12103,631,121 Miscellaneous69,000108,682(1,157)107,525 Total revenues3,704,4433,739,803(1,157)3,738,646 Expenditures Debt service4,188,8064,188,80504,188,805 Total expenditures4,188,8064,188,80504,188,805 Excess (deficiency) of revenues over expenditures(484,363)(449,002)(1,157)(450,159) Other financing sources (uses) Transfers in100,00038,793038,793 Total other financing sources (uses)100,00038,793038,793 Net change in fund balance(384,363)(410,209)(1,157)(411,366) Fund balance, July 1, 2006688,206688,2060688,206 Fund balance, June 30, 2007303,843277,997(1,157)276,840 çé City of Eugene, OregonD-4 Library Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Intergovernmental2,356,8752,356,852(2,356,852)0 Miscellaneous3,0003,097(37)3,060 Total revenues2,359,8752,359,949(2,356,889)3,060 Expenditures Debt service2,356,8752,356,87502,356,875 Total expenditures2,356,8752,356,87502,356,875 Excess (deficiency) of revenues over expenditures3,0003,074(2,356,889)(2,353,815) Other financing sources (uses) Transfers in002,356,8522,356,852 Total other financing sources (uses)002,356,8522,356,852 Net change in fund balance3,0003,074(37)3,037 Fund balance, July 1, 200656,26356,263056,263 Fund balance, June 30, 200759,26359,337(37)59,300 çè City of Eugene, OregonD-5 Special Assessment Bond Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Special assessments00237,843237,843 Miscellaneous192,90076,270(300)75,970 Total revenues192,90076,270237,543313,813 Expenditures Debt service463,225273,1480273,148 Total expenditures463,225273,1480273,148 Excess (deficiency) of revenues over expenditures(270,325)(196,878)237,54340,665 Other financing sources (uses) Principal payments received309,643237,843(237,843)0 Transfers out(140,000)000 Total other financing sources (uses)169,643237,843(237,843)0 Net change in fund balance(100,682)40,965(300)40,665 Fund balance, July 1, 2006389,291389,2910389,291 Fund balance, June 30, 2007288,609430,256(300)429,956 çç City of Eugene, OregonD-6 Urban Renewal Agency Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Taxes3,680,0003,679,56603,679,566 Miscellaneous240,000376,023(4,584)371,439 Total revenues3,920,0004,055,589(4,584)4,051,005 Expenditures Intergovernmental2,441,5652,441,542(2,441,542)0 Total expenditures2,441,5652,441,542(2,441,542)0 Excess (deficiency) of revenues over expenditures1,478,4351,614,0472,436,9584,051,005 Other financing sources (uses) Transfers out(1,160,769)(1,233,194)(2,441,542)(3,674,736) Total other financing sources (uses)(1,160,769)(1,233,194)(2,441,542)(3,674,736) Net change in fund balance317,666380,853(4,584)376,269 Fund balance, July 1, 20066,493,0686,493,06806,493,068 Fund balance, June 30, 20076,810,7346,873,921(4,584)6,869,337 ïðð City of Eugene, OregonD-7 Urban Renewal Agency Riverfront Debt Service Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Miscellaneous010,312(97)10,215 Total revenues010,312(97)10,215 Expenditures Debt service71,0257,23307,233 Intergovernmental4,000,000000 Total expenditures4,071,0257,23307,233 Excess (deficiency) of revenues over expenditures(4,071,025)3,079(97)2,982 Other financing sources (uses) Proceeds of debt issuance4,000,000000 Transfers in320,000000 Total other financing sources (uses)4,320,000000 Net change in fund balance248,9753,079(97)2,982 Fund balance, July 1, 2006151,025151,0250151,025 Fund balance, June 30, 2007400,000154,104(97)154,007 ïðï (this page intentionally left blank) ïðî ÝßÐ×ÌßÔ ÐÎÑÖÛÝÌÍ ÚËÒÜÍ Ý±³¾·²·²¹ ¬¿¬»³»²¬ º±® ¿´´ ·²¼·ª·¼«¿´ ²±²³¿¶±® ½¿°·¬¿´ °®±¶»½¬ º«²¼ ¿®» ®»°±®¬»¼ ¸»®»ò Ì¸» ½±³¾·²»¼ ¬±¬¿´ ¿®» ®»°±®¬»¼ ·² ¬¸» ½±³¾·²·²¹ ²±²³¿¶±® ¹±ª»®²³»²¬¿´ º«²¼ ¬¿¬»³»²¬ ¿¬ Þóï ¿²¼ Þóîò Ú«²¼ ¬¿¬»³»²¬ º±® ³¿¶±® ½¿°·¬¿´ Í½¸»¼«´» ±º ®»ª»²«»ô »¨°»²¼·¬«®»ô ¿²¼ ½¸¿²¹» ·² º«²¼ ¾¿´¿²½» ó ¾«¼¹»¬ ¿²¼ ¿½¬«¿´ ¿®» ¿´± °®»»²¬»¼ ¸»®» º±® »¿½¸ ·²¼·ª·¼«¿´ ½¿°·¬¿´ °®±¶»½¬ º«²¼ò Ó¿¶±® Ý¿°·¬¿´ Ð®±¶»½¬ Ú«²¼æ ó Ì± ¿½½±«²¬ ¬¸» »¨°»²¼·¬«®» ±º ¬¸· º«²¼ò Í§¬»³ Ü»ª»´±°³»²¬ Ý¿°·¬¿´ Ð®±¶»½¬ Ú«²¼ ó Ì± ¿½½±«²¬ º±® ½±²¬®«½¬·±² ±º ¬¸» ²±²ó¿»¿¾´» °±®¬·±² ±º ½¿°¿½·¬§ó»²¸¿²½·²¹ ½¿°·¬¿´ °®±¶»½¬ò Ú·²¿²½·²¹ · °®±ª·¼»¼ ¾§ ¿ §¬»³ ¼»ª»´±°³»²¬ ½¸¿®¹» ´»ª·»¼ ¿¹¿·²¬ Ò±²³¿¶±® Ý¿°·¬¿´ Ð®±¶»½¬ Ú«²¼æ ó Ì± ¿½½±«²¬ Í°»½·¿´ ß»³»²¬ Ý¿°·¬¿´ Ð®±¶»½¬ Ú«²¼ ó ¼»¾¬ô ¿²¼ ·²¬»®»¬ ±² ·²ª»¬³»²¬ò ó Ì± ¿½½±«²¬ º±® ½±¬ ±º ½±²¬®«½¬·²¹ ¿²¼ ·³°®±ª·²¹ ½¿°·¬¿´ ¿²¼ ·²¬»®»¬ ±² ·²ª»¬³»²¬ò ó Ì± ¿½½±«²¬ º±® ½±¬ ±º ½±²¬®«½¬·²¹ ¿²¼ ·³°®±ª·²¹ Î·ª»®º®±²¬ Ú«²¼ ¿²¼ ·²¬»®»¬ ±² ·²ª»¬³»²¬ò City of Eugene, Oregon E-1 Combining Balance Sheet Nonmajor Capital Projects Funds June 30, 2007 (amounts in dollars) Urban UrbanRenewal SpecialRenewalAgency RoadAssessmentAgencyRiverfrontTotal Assets Equity in pooled cash and investments774,9792,831,119467,51168,3754,141,984 Receivables: Assessments0165,00500165,005 Due from other governments615,870000615,870 Assets held for resale026501,867,2321,867,497 Total assets1,390,8492,996,389467,5111,935,6076,790,356 Liabilities and fund balances Liabilities Accounts payable2,209030,481032,690 Due to other governments6200062 Deposits0481,44100481,441 Deferred revenue11,828165,27000177,098 Total liabilities14,099646,71130,4810691,291 Fund balances Reserved for assets held for resale026501,867,2321,867,497 Unreserved1,376,7502,349,413437,03068,3754,231,568 Total fund balances1,376,7502,349,678437,0301,935,6076,099,065 Total liabilities and fund balances1,390,8492,996,389467,5111,935,6076,790,356 ïðí City of Eugene, Oregon E-2 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Capital Projects Funds For the fiscal year ended June 30, 2007 (amounts in dollars) Urban UrbanRenewal SpecialRenewalAgency RoadAssessmentAgencyRiverfrontTotal Revenues Intergovernmental1,900,6290001,900,629 Rental income49,30900049,309 Charges for services889,85949,64800939,507 Special assessments078,9710078,971 Miscellaneous266,291136,78618,4354,400425,912 Total revenues3,106,088265,40518,4354,4003,394,328 Expenditures Debt service: Interest4,9660004,966 Capital outlay2,320,7950442,3421,3422,764,479 Total expenditures2,325,7610442,3421,3422,769,445 Excess (deficiency) of revenues over expenditures780,327265,405(423,907)3,058624,883 Other financing sources (uses) Transfers in596,4230860,93701,457,360 Transfers out0(17,733)00(17,733) Total other financing sources (uses)596,423(17,733)860,93701,439,627 Net change in fund balances1,376,750247,672437,0303,0582,064,510 Fund balances, July 1, 200602,102,00601,932,5494,034,555 Fund balances, June 30, 20071,376,7502,349,678437,0301,935,6076,099,065 ïðì City of Eugene, OregonE-3 General Capital Projects Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Rental income28,09627,942027,942 Miscellaneous504,307440,0992,583442,682 Total revenues532,403468,0412,583470,624 Expenditures Current - departmental: Central services9,0494,31704,317 Debt service54,00030,699030,699 Capital outlay17,009,0666,391,27006,391,270 Total expenditures17,072,1156,426,28606,426,286 Excess (deficiency) of revenues over expenditures(16,539,712)(5,958,245)2,583(5,955,662) Other financing sources (uses) Principal payments received7,3037,477(7,477)0 Interfund loan proceeds and repayments62,50062,500(62,500)0 Interfund loans issued and repaid(58,534)(58,534)58,5340 Proceeds of debt issuance5,000,0001,425,000(1,425,000)0 Transfers in4,619,3004,019,30004,019,300 Transfers out(1,335,000)(415,916)98,700(317,216) Total other financing sources (uses)8,295,5695,039,827(1,337,743)3,702,084 Net change in fund balance(8,244,143)(918,418)(1,335,160)(2,253,578) Fund balance, July 1, 20068,725,8157,902,938(94,734)7,808,204 Fund balance, June 30, 2007481,6726,984,520(1,429,894)5,554,626 ïðë City of Eugene, OregonE-4 Road Capital Projects Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Intergovernmental3,473,6131,900,62901,900,629 Rental income049,309049,309 Charges for services691,067889,8590889,859 Miscellaneous83,000266,735(444)266,291 Total revenues4,247,6803,106,532(444)3,106,088 Expenditures Current - departmental: Debt service6,0004,96604,966 Capital outlay4,733,8252,320,79502,320,795 Total expenditures4,739,8252,325,76102,325,761 Excess (deficiency) of revenues over expenditures(492,145)780,771(444)780,327 Other financing sources (uses) Interfund loans issued and repaid(98,700)(98,700)98,7000 Transfers in1,518,000695,123(98,700)596,423 Total other financing sources (uses)1,419,300596,4230596,423 Net change in fund balance927,1551,377,194(444)1,376,750 Fund balance, July 1, 20060000 Fund balance, June 30, 2007927,1551,377,194(444)1,376,750 ïðê City of Eugene, OregonE-5 Special Assessment Capital Projects Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Charges for services049,648049,648 Special assessments0078,97178,971 Miscellaneous97,000138,454(1,668)136,786 Total revenues97,000188,10277,303265,405 Expenditures Debt service1,500,000000 Capital outlay2,747,705000 Total expenditures4,247,705000 Excess (deficiency) of revenues over expenditures(4,150,705)188,10277,303265,405 Other financing sources (uses) Principal payments received23,00078,971(78,971)0 Proceeds of debt issuance3,264,121000 Interfund loan proceeds and repayments234,000234,000(234,000)0 Transfers in50,000000 Transfers out(40,000)(17,733)0(17,733) Total other financing sources (uses)3,531,121295,238(312,971)(17,733) Net change in fund balance(619,584)483,340(235,668)247,672 Fund balance, July 1, 20061,868,0061,868,006234,0002,102,006 Fund balance, June 30, 20071,248,4222,351,346(1,668)2,349,678 ïðé City of Eugene, OregonE-6 Systems Development Capital Projects Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Charges for services8,551,8415,803,246(1,060,098)4,743,148 Miscellaneous701,768805,224(8,498)796,726 Total revenues9,253,6096,608,470(1,068,596)5,539,874 Expenditures Current - departmental: Central services40,00028,27231,00059,272 Planning and development109,367101,2450101,245 Public works441,445311,3060311,306 Debt service359,866359,8660359,866 Capital outlay16,107,8346,246,77906,246,779 Intergovernmental1,699,1301,060,329(1,060,329)0 Total expenditures18,757,6428,107,797(1,029,329)7,078,468 Excess (deficiency) of revenues over expenditures(9,504,033)(1,499,327)(39,267)(1,538,594) Other financing sources (uses) Principal payments received0230(230)0 Transfers out(31,000)(31,000)31,0000 Total other financing sources (uses)(31,000)(30,770)30,7700 Net change in fund balance(9,535,033)(1,530,097)(8,497)(1,538,594) Fund balance, July 1, 200615,467,43515,467,435015,467,435 Fund balance, June 30, 20075,932,40213,937,338(8,497)13,928,841 ïðè City of Eugene, OregonE-7 Urban Renewal Agency Capital Projects Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Miscellaneous018,757(322)18,435 Total revenues018,757(322)18,435 Expenditures Capital outlay860,937442,3420442,342 Total expenditures860,937442,3420442,342 Excess (deficiency) of revenues over expenditures(860,937)(423,585)(322)(423,907) Other financing sources (uses) Transfers in860,937860,9370860,937 Total other financing sources (uses)860,937860,9370860,937 Net change in fund balance0437,352(322)437,030 Fund balance, July 1, 20060000 Fund balance, June 30, 20070437,352(322)437,030 ïðç City of Eugene, OregonE-8 Urban Renewal Agency Riverfront Capital Projects Fund Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Miscellaneous20,0004,443(43)4,400 Total revenues20,0004,443(43)4,400 Expenditures Capital outlay83,2361,34201,342 Total expenditures83,2361,34201,342 Excess (deficiency) of revenues over expenditures(63,236)3,101(43)3,058 Total other financing sources (uses)0000 Net change in fund balance(63,236)3,101(43)3,058 Fund balance, July 1, 200665,31765,3171,867,2321,932,549 Fund balance, June 30, 20072,08168,4181,867,1891,935,607 ïïð ÛÒÌÛÎÐÎ×ÍÛ ÚËÒÜÍ ß´´ ±º ¬¸» Ý·¬§ »²¬»®°®·» º«²¼ ³»»¬ ¬¸» ½®·¬»®·¿ º±® ³¿¶±® º«²¼ ®»°±®¬·²¹ ¿²¼ ¿®» ®»°±®¬»¼ ·² Û¨¸·¾·¬ êô éô ¿²¼ è ±º ¬¸» Í½¸»¼«´» ±º ®»ª»²«»ô »¨°»²»ô ¿²¼ ½¸¿²¹» ·² º«²¼ ²»¬ ¿»¬ ó ¾«¼¹»¬ ¿²¼ ¿½¬«¿´ ¿®» °®»»²¬»¼ ¸»®» º±® »¿½¸ ·²¼·ª·¼«¿´ »²¬»®°®·» º«²¼ò Ó¿¶±® Û²¬»®°®·» Ú«²¼æ ß³¾«´¿²½» Ì®¿²°±®¬ Ú«²¼ ó Ì± ¿½½±«²¬ º±® ¬¸» ±°»®¿¬·±² ±º »³»®¹»²½§ ³»¼·½¿´ »®ª·½» °®±ª·¼»¼ ¬± ¬¸» °«¾´·½ò Î»ª»²«» ¿®» °®±ª·¼»¼ ¾§ «»® ½¸¿®¹»ò Ó«²·½·°¿´ ß·®°±®¬ Ú«²¼ ó Ì± ¿½½±«²¬ º±® ¬¸» ±°»®¿¬·±² ±º ¬¸» ³«²·½·°¿´ ¿·®°±®¬ò Ð®·²½·°¿´ ±«®½» ±º ®»ª»²«» ¿®» ®»²¬¿´ ±º ¬»®³·²¿´ °¿½» ¬± ¿·®´·²» ¿²¼ ±¬¸»® »®ª·½» °®±ª·¼»®ô ´¿²¼·²¹ º»»ô ¿²¼ °¿®µ·²¹ º»»ò Ì¸» º«²¼ ®»½»·ª» ß·®°±®¬ ×³°®±ª»³»²¬ Ð®±¹®¿³ ³±²·» º®±³ ¬¸» Ú»¼»®¿´ ßª·¿¬·±² ß¼³·²·¬®¿¬·±² º±® ½¿°·¬¿´ ·³°®±ª»ó ³»²¬ò Ì¸» º«²¼ ¿´± ·³°±» °¿»²¹»® º¿½·´·¬§ ½¸¿®¹» ±² °¿»²¹»® «¬·´·¦·²¹ ¬¸» ¿·®°±®¬ô ¬¸» °®±½»»¼ ±º Ð¿®µ·²¹ Í»®ª·½» Ú«²¼ º¿½·´·¬·»ò ó ó City of Eugene, OregonF-1 Ambulance Transport Fund Schedule of Revenues, Expenses, and Changes in Fund Net Assets - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Intergovernmental019,100019,100 Charges for services6,369,5006,158,30406,158,304 Miscellaneous100,393108,04228108,070 Total revenues6,469,8936,285,446286,285,474 Expenses Current - departmental: Central services00370,000370,000 Fire and emergency medical services6,481,6766,367,810(1,022,534)5,345,276 Depreciation0063,84163,841 Total expenses6,481,6766,367,810(588,693)5,779,117 Excess (deficiency) of revenues over expenses(11,783)(82,364)588,721506,357 Other financing sources (uses) Capital contributions0041,52041,520 Transfers out(699,060)(699,060)370,000(329,060) Total other financing sources (uses)(699,060)(699,060)411,520(287,540) Change in net assets(710,843)(781,424)1,000,241218,817 Total net assets, July 1, 20061,918,8051,918,805874,8832,793,688 Total net assets, June 30, 20071,207,9621,137,3811,875,1243,012,505 ïïï City of Eugene, OregonF-2 Municipal Airport Fund Schedule of Revenues, Expenses, and Changes in Fund Net Assets - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Intergovernmental11,453,7885,576,093(4,575,969)1,000,124 Rental income3,286,1942,786,71402,786,714 Charges for services3,793,9934,289,85004,289,850 Fines and forfeits6,0006,47406,474 Miscellaneous326,388520,713(142,847)377,866 Total revenues18,866,36313,179,844(4,718,816)8,461,028 Expenses Current - departmental: Central services00297,000297,000 Fire and emergency medical services690,538690,0415,140695,181 Police367,888355,2863,240358,526 Public works4,642,1574,419,96780,1734,500,140 Debt service1,052,7621,052,761(964,499)88,262 Capital outlay14,261,5715,767,436(5,767,436)0 Depreciation003,753,3073,753,307 Amortization008,0948,094 Total expenses21,014,91612,285,491(2,584,981)9,700,510 Excess (deficiency) of revenues over expenses(2,148,553)894,353(2,133,835)(1,239,482) Other financing sources (uses) Principal payments received045,823(45,823)0 Capital contributions004,713,5334,713,533 Transfers out(297,000)(297,000)107,351(189,649) Total other financing sources (uses)(297,000)(251,177)4,775,0614,523,884 Change in net assets(2,445,553)643,1762,641,2263,284,402 Total net assets, July 1, 20069,275,0239,275,02364,499,46173,774,484 Total net assets, June 30, 20076,829,4709,918,19967,140,68777,058,886 ïïî City of Eugene, OregonF-3 Parking Services Fund Schedule of Revenues, Expenses, and Changes in Fund Net Assets - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Intergovernmental4,000,000000 Rental income517,810550,5780550,578 Charges for services2,952,5302,952,48202,952,482 Fines and forfeits1,035,8001,006,34801,006,348 Miscellaneous90,407284,645(3,572)281,073 Total revenues8,596,5474,794,053(3,572)4,790,481 Expenses Current - departmental: Central services447,065430,413142,919573,332 Planning and development2,719,4642,588,07183,8432,671,914 Public works108,94935,672(312)35,360 Debt service660,604660,604(253,852)406,752 Capital outlay7,961,320263,827(263,827)0 Depreciation00763,911763,911 Amortization003,5213,521 Total expenses11,897,4023,978,587476,2034,454,790 Excess (deficiency) of revenues over expenses(3,300,855)815,466(479,775)335,691 Other financing sources (uses) Transfers in7,5007,50007,500 Transfers out(664,500)(664,500)117,500(547,000) Total other financing sources (uses)(657,000)(657,000)117,500(539,500) Change in net assets(3,957,855)158,466(362,275)(203,809) Total net assets, July 1, 20066,083,9466,083,94615,150,25521,234,201 Total net assets, June 30, 20072,126,0916,242,41214,787,98021,030,392 ïïí City of Eugene, OregonF-4 Stormwater Utility Fund Schedule of Revenues, Expenses, and Changes in Fund Net Assets - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Licenses and permits127,500127,7900127,790 Intergovernmental466,159189,029(182,960)6,069 Rental income43,07237,263037,263 Charges for services11,488,31610,800,342(1,650)10,798,692 Fines and forfeits5001,40001,400 Miscellaneous267,000394,265(4,462)389,803 Total revenues12,392,54711,550,089(189,072)11,361,017 Expenses Current - departmental: Central services00386,000386,000 Public works9,806,5909,058,928279,2939,338,221 Debt service5,0003,67603,676 Capital outlay5,727,9161,657,264(1,657,264)0 Depreciation001,069,8071,069,807 Intergovernmental15,0001,650(1,650)0 Total expenses15,554,50610,721,51876,18610,797,704 Excess (deficiency) of revenues over expenses(3,161,959)828,571(265,258)563,313 Other financing sources (uses) Capital contributions002,748,2242,748,224 Interfund loans issued and repaid(73,067)(73,066)73,0660 Transfers in41,00041,000(41,000)0 Transfers out(427,000)(427,000)412,235(14,765) Total other financing sources (uses)(459,067)(459,066)3,192,5252,733,459 Change in net assets(3,621,026)369,5052,927,2673,296,772 Total net assets, July 1, 20067,643,0277,643,02739,363,77747,006,804 Total net assets, June 30, 20074,022,0018,012,53242,291,04450,303,576 ïïì City of Eugene, OregonF-5 Wastewater Utility Fund Schedule of Revenues, Expenses, and Changes in Fund Net Assets - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Intergovernmental02,715(2,715)0 Rental income26,31222,924022,924 Charges for services32,863,07731,020,830(13,663,283)17,357,547 Fines and forfeits2,5753,42003,420 Miscellaneous82,000174,716(2,089)172,627 Total revenues32,973,96431,224,605(13,668,087)17,556,518 Expenses Current - departmental: Central services001,031,0001,031,000 Public works15,999,77315,032,111209,67015,241,781 Debt service165,707164,941(161,098)3,843 Capital outlay1,719,242412,152(412,152)0 Depreciation003,594,2053,594,205 Intergovernmental14,850,00013,663,283(13,663,283)0 Total expenses32,734,72229,272,487(9,401,658)19,870,829 Excess (deficiency) of revenues over expenses239,2421,952,118(4,266,429)(2,314,311) Other financing sources (uses) Capital contributions006,005,2146,005,214 Interfund loans issued and repaid(44,400)(44,400)44,4000 Transfers out(1,031,000)(1,031,000)1,031,0000 Total other financing sources (uses)(1,075,400)(1,075,400)7,080,6146,005,214 Change in net assets(836,158)876,7182,814,1853,690,903 Total net assets, July 1, 20062,700,1512,700,15195,439,60798,139,758 Total net assets, June 30, 20071,863,9933,576,86998,253,792101,830,661 ïïë (this page intentionally left blank) ïïê ×ÒÌÛÎÒßÔ ÍÛÎÊ×ÝÛ ÚËÒÜÍ Ý±³¾·²·²¹ ¬¿¬»³»²¬ º±® ¿´´ ·²¬»®²¿´ »®ª·½» º«²¼ ¿®» ®»°±®¬»¼ ¸»®»ò Ì¸» ½±³¾·²»¼ ¬±¬¿´ ¿®» ®»°±®¬»¼ ¿´±²¹·¼» ¬¸» Í½¸»¼«´» ±º ®»ª»²«»ô »¨°»²»ô ¿²¼ ½¸¿²¹» ·² º«²¼ ²»¬ ¿»¬ ó ¾«¼¹»¬ ¿²¼ ¿½¬«¿´ ¿®» ¿´± °®»»²¬»¼ ¸»®» º±® »¿½¸ ·²¼·ª·¼«¿´ ·²¬»®²¿´ »®ª·½» º«²¼ò Ò±²³¿¶±® ×²¬»®²¿´ Í»®ª·½» Ú«²¼æ Ú¿½·´·¬·» Í»®ª·½» Ú«²¼ ó Ì± ¿½½±«²¬ º±® º¿½·´·¬§ ³¿·²¬»²¿²½» »®ª·½» ±² Ý·¬§ ¾«·´¼·²¹ò Ú¿½·´·¬§ ³¿·²¬»²¿²½» ®¿¬» ¿²¼ ®»²¬¿´ ®¿¬» ¿®» ½¸¿®¹»¼ ±² ¬¸» ¾¿· ±º ¯«¿®» º±±¬¿¹» ¿²¼ ¿®» »¬ ¬± ®»½±ª»® ¬¸» º«´´ ½±¬ ±º »®ª·½» °®±ª·¼»¼ò Ú´»»¬ Í»®ª·½» Ú«²¼ ó Ì± ¿½½±«²¬ º±® ¬¸» °«®½¸¿» ±º ª»¸·½´» ¿²¼ »¯«·°³»²¬ ¿²¼ ¬¸» ³¿·²¬»²¿²½» ¬¸»®»±²ò ¿²¼ »¯«·°³»²¬ ±´¼ ±® ®»³±ª»¼ º®±³ «»ò ×²º±®³¿¬·±² Í§¬»³ ¿²¼ Í»®ª·½» Ú«²¼ ó Ì± ¿½½±«²¬ º±® ¼¿¬¿ °®±½»·²¹ ¿²¼ ®»°®±¼«½¬·±²ô »¯«·°³»²¬ ¿½¯«··ó ¬·±² ¿²¼ ³¿·²¬»²¿²½»ô °±¬¿¹»ô ¬»´»°¸±²»ô ³·²«¬» ®»½±®¼·²¹ô ¿²¼ °®·²¬·²¹ñ¹®¿°¸·½ »®ª·½» °®±ª·¼»¼ ¬± ±¬¸»® Ý·¬§ º«²¼ò Ë»® ½¸¿®¹» ½±ª»® ¬¸» ½±¬ ±º ±°»®¿¬·±² ¿²¼ «°°´·»ò Ð®±º»·±²¿´ Í»®ª·½» Ú«²¼ ±¬¸»® Ý·¬§ º«²¼ò Î»ª»²«» ¿®» °®±ª·¼»¼ ¾§ ½¸¿®¹» º±® ¬¸»» »®ª·½»ò ó Ì± ¿½½±«²¬ º±® ½±¬ ±º ¬¸» Ý·¬§ »´ºó·²«®¿²½» °®±¹®¿³ò Ì¸» Ý·¬§ · »´ºó·²«®»¼ ·²«®¿²½»ò ß² ¿½¬«¿®·¿´ ª¿´«¿¬·±² · ¬¸» ¾¿· º±® ®»½±®¼·²¹ ¬¸» ½´¿·³ ´·¿¾·´·¬§ò Ë»® ½¸¿®¹» ¿®» ¾¿»¼ ±² ¿½¬«¿´ »¨°»®·»²½» ±® ¿² »¬·³¿¬»ô ¼»°»²¼·²¹ ±² ¬¸» ²¿¬«®» ±º ¬¸» ·²«®¿²½»ò Ì¸· º«²¼ ¿´± ¿½½±«²¬ º±® ¬¸» G-1 City of Eugene, Oregon Combining Statement of Net Assets All Internal Service Funds June 30, 2007 (amounts in dollars)Information FacilitiesFleetSystems andProfessionalRisk and AssetsServicesServicesServicesServicesBenefitsTotal Current assets Equity in pooled cash and investments25,511,8747,899,2732,673,4331,216,75323,468,13160,769,464 Receivables: Accounts012,0002,62685,5760100,202 Allowance for uncollectibles00(30)(1,621)0(1,651) Due from other governments07,54328,5341,794037,871 Interfund loans receivable0199,805000199,805 Inventories0267,983000267,983 Prepaids and deposits03,818,230141,90009,4593,969,589 Total current assets25,511,87412,204,8342,846,4631,302,50223,477,59065,343,263 Noncurrent assets Deferred charges13,886000623,677637,563 Advances to other funds0430,081000430,081 Pension assets000063,854,42863,854,428 Capital assets: Land0455,834000455,834 Improvements other than buildings051,91300051,913 Buildings and equipment4,004,58631,828,0475,078,722234,4236,19541,151,973 Construction in progress77,783000077,783 Accumulated depreciation(835,242)(17,017,895)(4,815,627)(107,378)(6,195)(22,782,337) Total noncurrent assets3,261,01315,747,980263,095127,04564,478,10583,877,238 Total assets28,772,88727,952,8143,109,5581,429,54787,955,695149,220,501 Liabilities Current liabilities Accounts payable53,648137,300119,31711,525262,801584,591 Wages payable240,214124,849112,446209,44582,507769,461 Compensated absences payable243,233110,976113,718171,59169,948709,466 Due to other governments00129,3054,4150133,720 Claims payable00009,878,1349,878,134 Deposits880000240,260241,140 Interfund loans payable199,8050000199,805 Interest payable7,499000276,198283,697 Unearned revenue83,840000083,840 Certificates of participation payable110,0000000110,000 Bonds payable0000527,188527,188 Total current liabilities939,119373,125474,786396,97611,337,03613,521,042 Noncurrent liabilities Compensated absences payable80,78936,66633,2843,13219,734173,605 Advances from other funds430,0810000430,081 Certificates of participation payable1,540,00000001,540,000 Bonds payable (net of unamortized discount/premium)000063,267,40663,267,406 Net OPEB obligation70,37929,14127,14343,507902,2081,072,378 Total noncurrent liabilities2,121,24965,80760,42746,63964,189,34866,483,470 Total liabilities3,060,368438,932535,213443,61575,526,38480,004,512 Net assets Invested in capital assets (net of related debt)1,597,12715,317,899263,095127,045017,305,166 Unrestricted24,115,39212,195,9832,311,250858,88712,429,31151,910,823 Total net assets25,712,51927,513,8822,574,345985,93212,429,31169,215,989 ïïé (this page intentionally left blank) ïïè City of Eugene, Oregon G-2 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets All Internal Service Funds For the fiscal year ended June 30, 2007 (amounts in dollars) Information FacilitiesFleetSystems andProfessionalRisk and ServicesServicesServicesServicesBenefitsTotal Operating revenues Licenses and permits0009,67909,679 Intergovernmental06,259005,00011,259 Rental income621,77529,585000651,360 Charges for services9,784,1346,270,9177,061,9695,099,61228,011,00956,227,641 Miscellaneous24,159223,17403,09677,571328,000 Total operating revenues10,430,0686,529,9357,061,9695,112,38728,093,58057,227,939 Operating expenses Personnel services4,841,9042,195,8102,225,1433,973,7622,351,57115,588,190 Contractual services530,879344,524925,81997,4101,568,7773,467,409 Materials and supplies460,3711,416,5521,477,977150,241162,7383,667,879 Maintenance392,136381,138447,627208,866117,6981,547,465 Utilities2,108,30921,802842,81244,31413,0083,030,245 Rent5,4770208,76359,6100273,850 Taxes11,540000011,540 Insurance76,274327,77419,99149,4301,757,9232,231,392 Claims000016,351,02516,351,025 Central business functions455,000259,000284,000436,000149,0001,583,000 Depreciation103,5422,333,933171,47714,33902,623,291 Total operating expenses8,985,4327,280,5336,603,6095,033,97222,471,74050,375,286 Operating income (loss)1,444,636(750,598)458,36078,4155,621,8406,852,653 Nonoperating revenues (expenses) Interest revenue1,376,848494,219114,52055,0321,500,0853,540,704 Interest expense(138,108)000(4,855,509)(4,993,617) Amortization of issuance costs(2,473)000(39,725)(42,198) Total nonoperating revenues (expenses)1,236,267494,219114,52055,032(3,395,149)(1,495,111) Income (loss) before capital contributions and transfers2,680,903(256,379)572,880133,4472,226,6915,357,542 Capital contributions14,000305,522000319,522 Transfers in226,2941,697,979028,62501,952,898 Transfers out(1,091,125)(2,381)(3,890)0(1,255,000)(2,352,396) Change in net assets1,830,0721,744,741568,990162,072971,6915,277,566 Total net assets, July 1, 200623,882,44725,769,1412,005,355823,86011,457,62063,938,423 Total net assets, June 30, 200725,712,51927,513,8822,574,345985,93212,429,31169,215,989 ïïç City of Eugene, OregonG-4 Facilities Services Fund Schedule of Revenues, Expenses, and Changes in Fund Net Assets - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Rental income615,100605,77516,000621,775 Charges for services9,962,9929,784,13409,784,134 Miscellaneous1,229,0001,417,475(16,468)1,401,007 Total revenues11,807,09211,807,384(468)11,806,916 Expenses Current - departmental: Central services8,434,7588,117,097541,0408,658,137 Planning and development230,260223,7530223,753 Debt service248,408243,560(105,452)138,108 Capital outlay236,74719,580(19,580)0 Depreciation00103,542103,542 Amortization002,4732,473 Total expenses9,150,1738,603,990522,0239,126,013 Excess (deficiency) of revenues over expenses2,656,9193,203,394(522,491)2,680,903 Other financing sources (uses) Capital contributions0014,00014,000 Interfund loans issued and repaid(190,290)(190,290)190,2900 Transfers in251,964265,241(38,947)226,294 Transfers out(1,542,500)(1,517,500)426,375(1,091,125) Total other financing sources (uses)(1,480,826)(1,442,549)591,718(850,831) Change in net assets1,176,0931,760,84569,2271,830,072 Total net assets, July 1, 200623,507,86223,468,915413,53223,882,447 Total net assets, June 30, 200724,683,95525,229,760482,75925,712,519 ïîî City of Eugene, OregonG-5 Fleet Services Fund Schedule of Revenues, Expenses, and Changes in Fund Net Assets - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Intergovernmental8,9006,25906,259 Rental income28,14429,585029,585 Charges for services6,235,6516,270,91706,270,917 Miscellaneous679,000764,791(47,398)717,393 Total revenues6,951,6957,071,552(47,398)7,024,154 Expenses Current - departmental: Central services00259,000259,000 Public works14,572,32111,175,067(6,487,467)4,687,600 Capital outlay22,7591,326(1,326)0 Depreciation002,333,9332,333,933 Total expenses14,595,08011,176,393(3,895,860)7,280,533 Excess (deficiency) of revenues over expenses(7,643,385)(4,104,841)3,848,462(256,379) Other financing sources (uses) Capital contributions00305,522305,522 Interfund loan proceeds and repayments464,991464,990(464,990)0 Transfers in1,489,6751,489,675208,3041,697,979 Transfers out(259,000)(259,000)256,619(2,381) Total other financing sources (uses)1,695,6661,695,665305,4552,001,120 Change in net assets(5,947,719)(2,409,176)4,153,9171,744,741 Total net assets, July 1, 200610,070,37610,070,37615,698,76525,769,141 Total net assets, June 30, 20074,122,6577,661,20019,852,68227,513,882 ïîí City of Eugene, OregonG-6 Information Systems and Services Fund Schedule of Revenues, Expenses, and Changes in Fund Net Assets - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Charges for services6,578,6867,061,96907,061,969 Miscellaneous81,000116,033(1,513)114,520 Total revenues6,659,6867,178,002(1,513)7,176,489 Expenses Current - departmental: Central services6,814,4756,284,939147,1936,432,132 Depreciation00171,477171,477 Total expenses6,814,4756,284,939318,6706,603,609 Excess (deficiency) of revenues over expenses(154,789)893,063(320,183)572,880 Other financing sources (uses) Transfers out(284,000)(284,000)280,110(3,890) Total other financing sources (uses)(284,000)(284,000)280,110(3,890) Change in net assets(438,789)609,063(40,073)568,990 Total net assets, July 1, 20061,735,9441,735,944269,4112,005,355 Total net assets, June 30, 20071,297,1552,345,007229,3382,574,345 ïîì City of Eugene, OregonG-7 Professional Services Fund Schedule of Revenues, Expenses, and Changes in Fund Net Assets - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Licenses and permits09,67909,679 Intergovernmental110,000000 Charges for services5,838,6825,099,61205,099,612 Miscellaneous14,00058,730(602)58,128 Total revenues5,962,6825,168,021(602)5,167,419 Expenses Current - departmental: Central services00436,000436,000 Public works5,483,1994,644,825(61,192)4,583,633 Depreciation0014,33914,339 Total expenses5,483,1994,644,825389,1475,033,972 Excess (deficiency) of revenues over expenses479,483523,196(389,749)133,447 Other financing sources (uses) Transfers in25,000028,62528,625 Transfers out(461,000)(474,947)474,9470 Total other financing sources (uses)(436,000)(474,947)503,57228,625 Change in net assets43,48348,249113,823162,072 Total net assets, July 1, 2006990,5231,029,470(205,610)823,860 Total net assets, June 30, 20071,034,0061,077,719(91,787)985,932 ïîë City of Eugene, OregonG-8 Risk and Benefits Fund Schedule of Revenues, Expenses, and Changes in Fund Net Assets - Budget and Actual For the fiscal year ended June 30, 2007 (amounts in dollars) Actual Budget GAAP Budget basis Adjustment basis Revenues Intergovernmental9705,240(240)5,000 Charges for services28,763,09628,011,009028,011,009 Miscellaneous1,449,0002,577,658(1,000,002)1,577,656 Total revenues30,213,06630,593,907(1,000,242)29,593,665 Expenses Current - departmental: Central services23,512,90822,122,825348,91522,471,740 Debt service12,050,26412,050,262(7,194,753)4,855,509 Amortization0039,72539,725 Total expenses35,563,17234,173,087(6,806,113)27,366,974 Excess (deficiency) of revenues over expenses(5,350,106)(3,579,180)5,805,8712,226,691 Other financing sources (uses) Transfers out(1,404,000)(1,404,000)149,000(1,255,000) Total other financing sources (uses)(1,404,000)(1,404,000)149,000(1,255,000) Change in net assets(6,754,106)(4,983,180)5,954,871971,691 Total net assets, July 1, 200617,113,38617,113,386(5,655,766)11,457,620 Total net assets, June 30, 200710,359,28012,130,206299,10512,429,311 ïîê ÑÌØÛÎ ÍËÐÐÔÛÓÛÒÌßÎÇ ÍÝØÛÜËÔÛÍ City of Eugene, Oregon H-1 Schedule of Property Tax Transactions For the fiscal year ended June 30, 2007 (amounts in dollars) UncollectedAdjustments,Uncollected balancesCurrentinterest, andbalances Fiscal yearJuly 1, 2006year's levydiscountsCollectionsJune 30, 2007 1965-01593,66703,162(14,119)582,710 200291,340064(11,383)80,021 2003173,92309,787(93,288)90,422 2004458,675013,464(306,826)165,313 2005820,866023,951(424,795)420,022 20061,973,5640(7,886)(1,159,308)806,370 2007091,054,148(2,647,774)(86,354,896)2,051,478 Totals4,112,03591,054,148(2,605,232)(88,364,615)4,196,336 Summary by fund type General Fund(68,717,838)3,285,714 Special Revenue Funds(12,338,274)525,516 Debt Service Funds(7,308,503)385,106 Totals(88,364,615)4,196,336 ïîé (this page intentionally left blank) ïíð ÍÌßÌ×ÍÌ×ÝßÔ ÍÛÝÌ×ÑÒ ó Ú·²¿²½·¿´Ì®»²¼ øÍ½¸»¼«´» ×óï ¬± ×óì÷ ¿²¼ ©»´´ó¾»·²¹ ¸¿ª» ½¸¿²¹»¼ ±ª»® ¬·³»ò Î»ª»²«»Ý¿°¿½·¬§ øÍ½¸»¼«´» ×óë ¬± ×óè÷ Ì¸»» ½¸»¼«´» ½±²¬¿·² ·²º±®³¿¬·±² ¬± ¸»´° ¬¸» ®»¿¼»® ¿» ¬¸» º¿½¬±® ¿ºº»½¬·²¹ ¬¸» Ý·¬§ ¿¾·´·¬§ ¬± ¹»²»®ó ¿¬» ·¬ °®±°»®¬§ ¬¿¨»ò Ü»¾¬Ý¿°¿½·¬§ øÍ½¸»¼«´» ×óç ¬± ×óïì÷ Ì¸»» ½¸»¼«´» °®»»²¬ ·²º±®³¿¬·±² ¬± ¸»´° ¬¸» ®»¿¼»® ¿» ¬¸» ¿ºº±®¼¿¾·´·¬§ ±º ¬¸» Ý·¬§ ½«®®»²¬ ´»ª»´ ±º ±«¬¬¿²¼·²¹ ¼»¾¬ ¿²¼ ¬¸» Ý·¬§ ¿¾·´·¬§ ¬± ·«» ¿¼¼·¬·±²¿´ ¼»¾¬ ·² ¬¸» º«¬«®»ò Ü»³±¹®¿°¸·½ ¿²¼ Û½±²±³·½ ×²º±®³¿¬·±² øÍ½¸»¼«´» ×óïë ¬± ×óïê÷ Ì¸»» ½¸»¼«´» ±ºº»® ¼»³±¹®¿°¸·½ ¿²¼ »½±²±³·½ ·²¼·½¿¬±® ¬± ¸»´° ¬¸» ®»¿¼»® «²¼»®¬¿²¼ ¬¸» »²ª·®±²³»²¬ ¹±ª»®²³»²¬ò Ñ°»®¿¬·²¹ ×²º±®³¿¬·±² øÍ½¸»¼«´» ×óïé ¬± ×óïç÷ Ì¸»» ½¸»¼«´» ½±²¬¿·² ·²º±®³¿¬·±² ¿¾±«¬ ¬¸» Ý·¬§ ±°»®¿¬·±² ¿²¼ ®»±«®½» ¬± ¸»´° ¬¸» ®»¿¼»® «²¼»®¬¿²¼ (this page intentionally left blank) ïíë City of Eugene, Oregon I-8 Ten Principal Property Taxpayers Current year and three years ago - unaudited (amounts in dollars) FY 2007FY 2004 PercentagePercentage of totalof total TaxabletaxableTaxabletaxable assessedassessedassessedassessed Taxpayervaluevaluevaluevalue Hynix Semiconductor614,685,6406.08%456,687,9355.21% Valley River Center LLC84,629,8670.84%77,129,5920.88% QWEST Corporation (formerly US West)70,996,9000.70%102,625,3601.17% PeaceHealth (formerly Sacred Heart Hospital)42,356,9170.42%26,828,1900.31% Northwest Natural Gas Company39,323,3000.39%33,742,0000.38% Guard Publishing Company30,777,8730.30%28,550,2870.33% Chase Village LLC29,670,6690.29%00.00% McKay Investment Company21,877,4840.22%18,781,6900.21% Metropolitan Life Insurance Company19,907,1570.20%18,186,9510.21% Kinder Morgan Energy Partner18,721,1000.19%00.00% SHLP Financing LLC00.00%28,476,4560.32% Trus Joist, Inc.00.00%23,352,6500.27% Subtotal972,946,9079.63%814,361,1119.29% All other taxpayers9,132,078,55190.37%7,958,736,60490.71% Total taxpayers 10,105,025,458100.00%8,773,097,715100.00% Notes a) Reliable top ten taxpayer information is not available prior to FY2004. Therefore, the City will use FY2004 for comparative purposes until FY2014. b) Chase Village LLC and Kinder Morgan Energy Partner were not among the top ten taxpayers in FY2004. c) SHLP Financing LLC and Trus Joist, Inc were not among the top ten taxpayers in FY2007. Data source Lane County Department of Assessment and Taxation City of Eugene Financial Services Division ïìï City of Eugene, Oregon I-10 Ratio of General Bonded Debt Outstanding Last ten fiscal years - unaudited (amounts in dollars) General bonded debt outstanding GeneralPercentage obligationCertificates ofof real marketPer Fiscal yearbondsparticipationLimited tax bondsTotalvaluecapita 199825,800,0006,720,4369,137,56741,658,0030.53%322 199923,035,0002,355,4258,517,56733,907,9920.41%254 200039,530,00020,765,3879,071,39369,366,7800.70%508 200137,750,00019,265,3508,315,17465,330,5240.61%471 200235,865,00017,665,00075,491,461129,021,4611.21%918 200342,010,00016,005,00076,053,652134,068,6521.26%942 200445,955,00016,310,00076,560,046138,825,0461.24%965 200543,300,00014,250,00077,013,970134,563,9701.08%930 200641,195,00012,075,00078,291,989131,561,9890.93%900 200739,660,0009,785,00070,659,254120,104,2540.60%808 Notes a) Details regarding the City's outstanding debt can be found in the notes to the financial statements. b) All debt is shown net of unamortized premiums and discounts. c) Percentage of real market value was calculated using property value information from Schedule I-5. d) Debt per capita was calculated using population data from Schedule I-15. Data source City of Eugene Financial Services Division ïìí City of Eugene, Oregon I-11 Direct and Overlapping Governmental Activities Debt As of June 30, 2007 - unaudited (amounts in dollars) PercentageCity's share Debtapplicableof overlapping Governmental unitoutstandingto the Citydebt City of Eugene109,161,350100.0000%109,161,350 Less: Funds available for principal payment(764,555) City of Eugene net direct debt108,396,795 Lane County105,559,46246.3572%48,934,411 River Road Park and Recreation District1,110,0009.2200%102,342 Junction City Water Control District318,90069.8200%222,656 School District 4J200,073,92980.8993%161,858,408 School District 5237,365,00076.6382%28,635,863 Lane Community College60,507,50645.7438%27,678,433 Total overlapping debt267,432,113 Total direct and overlapping debt375,828,908 Data source Oregon State Treasury Debt Management Information System ïìì City of Eugene, Oregon I-14 Pledged-Revenue Coverage - Special Assessment Bonds Last ten fiscal years - unaudited (amounts in dollars) Special assessment Fiscal yearcollectionsPrincipalInterestDebt serviceCoverage 1998805,096545,00083,573628,5731.28 1999766,257620,00097,058717,0581.07 20001,086,762385,00095,152480,1522.26 2001742,566680,00090,631770,6310.96 2002662,621535,00064,149599,1491.11 2003371,393280,00039,563319,5631.16 2004327,059225,00028,650253,6501.29 2005140,707140,00018,530158,5300.89 2006102,930190,00010,540200,5400.51 2007266,270220,05752,192272,2490.98 Notes a) Details regarding the City's outstanding debt can be found in the notes to the financial statements. b) These bonds are backed by the full faith and credit of the City. Data source City of Eugene Financial Services Division ïìé City of Eugene, Oregon I-15 Demographic and Economic Statistics Last ten fiscal years - unaudited City of EugeneLane County Personal UnemploymentincomePercapita PopulationratePopulation(thousands)income Fiscal year 1998129,3005.10%315,7907,544,06423,601 1999133,4604.80%318,7307,825,02324,318 2000136,4905.00%320,9708,247,54425,497 2001138,6156.40%323,9508,420,55725,947 2002140,5506.70%325,9008,672,33726,522 2003142,3807.50%328,1508,846,99926,818 2004143,9106.80%329,4009,414,56928,416 2005144,6405.50%333,3509,981,27629,841 2006146,1604.90%336,085n/an/a 2007148,595n/a339,740n/an/a Notes a) Personal income information is not available for the City. b) Personal and Per Capita income for Lane County was computed using Census Bureau midyear population estimates. c) Unemployment rates for 2000-2006 reflect new statewide controls and revised inputs and reestimations by BLS. Data source Portland State University’s Center for Population Research and Census Bureau of Economic Analysis, U.S. Department of Commerce Bureau of Labor Statistics, U.S. Department of Labor - rates presented are annualized for the calendar year ïìè City of Eugene, Oregon I-16 Ten Principal Employers Current year and nine years ago 20071998 PercentagePercentage of totalof total EmployerEmployeesemploymentEmployeesemployment PeaceHealth Medical Group4,3004.96%3,200n/a University of Oregon3,6764.24%2,761n/a Lane Community College2,5312.92%1,984n/a Lane County1,7862.06%1,300n/a Eugene School District 4J1,4771.70%1,949n/a City of Eugene1,4571.68%1,313n/a Hynix Semiconductor1,1561.33%0n/a State of Oregon1,1001.27%0n/a Bethel School District 527040.81%0n/a Datalogic Scanning6000.69%0n/a HMT Technologies00.00%800n/a Willamette Industries, Inc.00.00%730n/a States Industries00.00%550n/a Symantec00.00%550n/a Total18,78721.67%15,137n/a Notes a) Total employment information for the City is not available for FY1998. b) This table excludes US Government employees working in Eugene as this information is not available. c) Lane Community College numbers include part-time employees and student instructors. d) Hynix Semiconductor, State of Oregon, Bethel School District, and Datalogic Scanning were not one of the top ten employers in FY1998. e) HMT Technology and Symantec left the Eugene area in FY2002 and FY2003, respectively. f) In FY2002, Willamette Industries closed its Eugene facilities and sold its property to various other timber companies. g) States Industries was not one of the top ten employers in FY2007. Data source Eugene Chamber of Commerce Lane County Financial Services Bethel School District Eugene 4J School District University of Oregon ïìç City of Eugene, Oregon I-17 City Government Employees by Function/Program Last ten fiscal years - unaudited Function/Program Library, Fire andrecreation, emergencyandPlanning CentralmedicalculturalandPublic servicesservicesservicesdevelopmentPoliceworksTotal Fiscal year 20022251871511012954071,366 2003234192159962903921,363 2004236195168942933851,371 2005227200193912893901,390 20062302061901002933891,408 20072392041951133034031,457 Notes a) Number of employees is provided per Full-Time Equivalent (FTE) for full-time and part-time regular employees as of the last day of the fiscal year. b) FTE by function is not available prior to FY2002. Data source City of Eugene Financial Services Division ïëð City of Eugene, Oregon I-19 Capital Asset Statistics by Function/Program Last ten fiscal years - unaudited Fiscal Year 1998199920002001200220032004200520062007 Function/Program Fire and emergency medical services: Ambulances8888899101011 Fire stations11101010101010111111 Fire trucks25252525252624232423 Library, recreation, and cultural services: Amphitheatre1111111111 Performing arts center1111111111 Community centers8888888888 9-hole golf course1111111111 Indoor/outdoor pool3333333333 Police: Patrol vehicles50555555576051516363 Public works: Jogging and hiking trails (miles)15151515162327272929 On/off street biking trails (miles)106117120112115119122122126130 Park acreage2,0192,0192,1592,2842,4002,4002,9022,9022,9023,150 Streets maintained (miles)477483487498501503510511516526 Alleys (miles)49494943434343434242 Sidewalks (miles)570583585601606616621622633654 Drainage Lines (miles)467473504508529506525518527567 Sanitary sewers (miles)702735741750754754770774781797 Data source Individual City Departments ïëî ßËÜ×Ì ÝÑÓÓÛÒÌÍ ßÒÜ ÙÑÊÛÎÒÓÛÒÌ ßËÜ×Ì×ÒÙÍÌßÒÜßÎÜÍÍÛÝÌ×ÑÒÍ ßËÜ×Ì ÝÑÓÓÛÒÌÍ AUDIT COMMENTS (Comments and Disclosures Required by State Regulators) _________ Oregon Administrative Rules 162-010-050 through 162-010-320, of the Minimum Standards for Audits of Oregon Municipal Corporations, prescribed by the Secretary of State in cooperation with the Oregon State Board of Accountancy, enumerate the financial statements, schedules, comments and disclosures required in audit reports. The required financial statements and schedules are set forth in preceding sections of this report. Required comments and disclosures related to the audit of such statements and schedules are set forth following. ïëí (this page intentionally left blank) ïëì COMMENTS AND DISCLOSURES OF INDEPENDENT AUDITORS' REQUIRED BY STATE STATUTE To the Honorable Mayor, Members of the City Council and the City Manager City of Eugene, Oregon We have audited the financial statements and schedules of City of Eugene, Oregon as of and for the year ended June 30, 2007, and have issued our report thereon dated December 10, 2007. We conducted our audit in accordance with auditing standards generally accepted in the United States and the provisions of the Minimum Standards for Audits of Oregon Municipal Corporations, prescribed by the Secretary of State, and 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. Compliance with laws, regulations, contracts and grants applicable to the City of Eugene, Oregon is the responsibility of the City's management. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed tests of the City’s compliance with certain provisions of laws, regulations, contracts and grants. However, our objective was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion. Certain areas covered, as required by Oregon Administrative Rules 162-10-230 through 162-10-320, included but were not limited to the following: Accounting and Internal Control Structure - Our report on the accounting and internal control structure is presented separately under this cover. Programs Funded from Outside Sources - Reports related to such programs are presented separately under this cover. Financial Reporting Requirements - Whether financial reports and related data filed with other governmental agencies in conjunction with programs funded wholly or partially by such agencies were in agreement with or supported by the accounting records. Compliance with Legal or Other Requirements: Collateral - Pertaining to the amount and adequacy of collateral pledged by depositories to secure the deposit of public funds (see requirements for public fund deposits as specified in Oregon Revised Statutes (ORS) 295). Indebtedness - Relating to debt and the limitation on the debt amount, liquidation of debt within the prescribed period of time, and compliance with provisions of indentures or agreements, including restrictions on the use of monies available to retire indebtedness. ïëë Budget - Relating to the preparation, adoption and execution of the annual budget for the current fiscal year and the preparation and adoption of the budget for the next succeeding fiscal year (see ORS 294.305 to 294.565). Taxes on Motor Vehicle Use and Fuel and the use of a Road Fund - Pertaining to (as contained in Article IX, Section 3a of the Oregon constitution) the use of revenue from taxes on motor vehicle use and fuel and the use of a road fund (as contained in ORS 294 and 373). Insurance - Relating to insurance and fidelity bond coverage. Investments - Pertaining to the investment of public funds (see ORS Chapter 294.035 to 294.046). Public Contracts and Purchasing - Pertaining to (as contained in ORS Chapter 279) the awarding of public contracts and the construction of public improvements. The results of our tests indicate that with respect to the items tested, the City of Eugene, Oregon complied, in all material respects, with the provisions referred to above except for the following: 1. Overexpenditure of appropriations as noted in Note 3(B) of the City’s financial statements. This report is intended for the information of the Honorable Mayor, members of the City Council, the City Manager and management for the City of Eugene, and the Secretary of State, Division of Audits, of the State of Oregon. However, this report is a matter of public record and its distribution is not limited. ISLER CPA By: Paul Nielson, CPA, a member of the firm Eugene, Oregon December 10, 2007 ïëê ÙÑÊÛÎÒÓÛÒÌ ßËÜ×Ì×ÒÙÍÌßÒÜßÎÜÍ Government Auditing Standards Report ïëé (this page intentionally left blank) ïëè ÎÛÐÑÎÌ ÑÒ ×ÒÌÛÎÒßÔ ÝÑÒÌÎÑÔ ÑÊÛÎ Ú×ÒßÒÝ×ßÔ ÎÛÐÑÎÌ×ÒÙ ßÒÜ ÑÒ ÝÑÓÐÔ×ßÒÝÛ ßÒÜ ÑÌØÛÎ ÓßÌÌÛÎÍ ÞßÍÛÜ ÑÒ ßÒ ßËÜ×Ì ÑÚ Ú×ÒßÒÝ×ßÔ ÍÌßÌÛÓÛÒÌÍ ÐÛÎÚÑÎÓÛÜ ×Ò ßÝÝÑÎÜßÒÝÛ É×ÌØ ÙÑÊÛÎÒÓÛÒÌ ßËÜ×Ì×ÒÙ ÍÌßÒÜßÎÜÍ Ì± ¬¸» Ø±²±®¿¾´» Ó¿§±® ¿²¼ Ó»³¾»® ±º ¬¸» Ý·¬§ Ý±«²½·´ Ý·¬§ ±º Û«¹»²»ô Ñ®»¹±² ³¿¶±® º«²¼ô ¿²¼ ¬¸» ¿¹¹®»¹¿¬» ®»³¿·²·²¹ º«²¼ ·²º±®³¿¬·±² ±º Ý·¬§ ±º Û«¹»²»ô Ñ®»¹±²ô ¿ ±º ¿²¼ º±® ¬¸» §»¿® Ù±ª»®²³»²¬ ß«¼·¬·²¹ Í¬¿²¼¿®¼ò ïëç ×´»® ÝÐß Þ§æ ÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁ Û«¹»²»ô Ñ®»¹±² ïêð OMB Circular A-133 (Single Audit) Report ________ ïêï (this page intentionally left blank) ïêî ÎÛÐÑÎÌ ÑÒ ÝÑÓÐÔ×ßÒÝÛ É×ÌØ ÎÛÏË×ÎÛÓÛÒÌÍ ßÐÐÔ×ÝßÞÔÛ ÌÑ ÛßÝØ ÓßÖÑÎ ÐÎÑÙÎßÓ ßÒÜ ÑÒ ×ÒÌÛÎÒßÔ ÝÑÒÌÎÑÔ Ì± ¬¸» Ø±²±®¿¾´» Ó¿§±® ¿²¼ Ó»³¾»® ±º ¬¸» Ý·¬§ Ý±«²½·´ Ý·¬§ ±º Û«¹»²»ô Ñ®»¹±² Ù±ª»®²³»²¬ ß«¼·¬·²¹ Í¬¿²¼¿®¼ ß«¼·¬ ±º ïêí ×´»® ÝÐß Þ§æ ÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁÁ ïêì CITY OF EUGENE, OREGON Schedule of Findings and Questioned Costs June 30, 2007 Section I - Summary of Auditor’s Results Financial Statements: Type of auditor’s report issued: Unqualified Internal control over financial reporting: Material weakness(es) identified? No Reportable condition(s) identified that are not considered to be material weaknesses? No Noncompliance material to financial statements noted? No Federal Awards: Internal control over major programs: Material weakness(es) identified? No Reportable condition(s) identified that are not considered to be material weaknesses? No Type of auditor’s report issued on compliance for major programs: Unqualified Any audit findings disclosed that are required to be reported in accordance with section 510(a) of Circular A-133? No Identification of Major Programs: CFDA NumbersName of Federal Program or Cluster 14.218Community Development Block Grants/Entitlement Grants 16.710Public Safety Partnership and Community Policing Grants 20.205Highway Planning and Construction 97.083State Homeland Security Program (SHSP) Dollar threshold used to distinguish between type A and type B programs: $335,675 Auditee qualified as low-risk auditee? Yes Section II - Financial Statement Findings None Section III - Federal Award Findings and Questioned Costs None ïêë J-1 City of Eugene, Oregon Schedule of Expenditures of Federal Awards For the fiscal year ended June 30, 2007 (amounts in dollars) Federal CFDAGrant Federal Grantor Program TitlenumbernumberExpenditures U.S. Department of Housing and Urban Development Direct program: Community Development Block Grants/Entitlement Grants14.218B-05-MC-41-0001964,314$ Community Development Block Grants/Entitlement Grants14.218B-06-MC-41-0001594,265 HOME Investment Partnerships Program 14.239M-05-DC-41-02001,003,403 HOME Investment Partnerships Program 14.239M-06-DC-41-02001,257,003 Grants passed through Lane County Oregon: Resident Opportunity and Supportive Services14.87004-S-0027-B3,440 Total U.S. Department of Housing and Urban Development3,822,425 Department of the Interior Direct program: Bureau of Land Management Assistance Agreement15.DAKHAA031M00141,321 Grants passed through State of Oregon: East Alton Baker Park Restoration15.625001-3197-S-Wildlife9,909 Historic Preservation Fund Grants-In-Aid15.904HPF OR-05-0812,500 Total U.S. Department of Interior163,730 U.S. Department of Justice Direct programs: Public Safety Partnership and Community Policing Grants16.7102005-IN-WX-00171,333,464 Grants passed through Lane County Oregon: Juvenile Accountability Incentive Block Grants16.5232005-0101911,118 Edward Byrne Memorial Justice Assistance Grant Program16.7382005-DJ-BX-033018,166 Grants passed through National Association of Police Athletic Leagues: Developing, Testing, and Demonstrating Promising New Programs16.541PALYEP 2006-07-OR0392,512 Total U.S. Department of Justice1,365,260 U.S. Department of Transportation Direct program: Airport Improvement Program20.1063-41-0018-3282,236 Airport Improvement Program20.1063-41-0018-33168,712 Airport Improvement Program20.1063-41-0018-351,512,835 Airport Improvement Program20.1063-41-0018-36830,090 Airport Improvement Program20.1063-41-0018-37180,251 Airport Improvement Program20.1063-41-0018-381,000,124 Grants passed through State of Oregon: Highway Planning and Construction20.2052172643,857 Highway Planning and Construction20.2052211753,500 Highway Planning and Construction20.20522213143,075 Highway Planning and Construction20.2052228188,582 Highway Planning and Construction20.20523076149,492 Highway Planning and Construction20.205232937,439 Highway Planning and Construction20.2052335917,465 Highway Planning and Construction20.205234235,622 Highway Planning and Construction20.2052369020,090 Highway Planning and Construction20.2052375027,759 Recreational Trails Program20.219RTP 06-1269 continued ïêê J-1, continued City of Eugene, Oregon Schedule of Expenditures of Federal Awards For the fiscal year ended June 30, 2007 (amounts in dollars) Federal CFDAGrant Federal Grantor Program TitlenumbernumberExpenditures U.S. Department of Transportation, continued Grants passed through Lane Council of Governments: Highway Planning and Construction20.2052007-0020865,000 Grants passed through Oregon Association Chiefs of Police: State and Community Highway Safety20.600OP-06-45-024,552 Occupant Protection20.602J2-06-46-085,715 Minimum Penalties for Repeat Offenders for Driving While Intoxicated20.608164AL-06-14-0214,035 Grants passed through Community Cycling Center: Safety Incentive Grants for Use of Seatbelts20.604157PS-07-68-062,436 Total U.S. Department of Transportation4,422,936 U.S. Environmental Protection Agency Direct program: Solid Waste Management Assistance Grants66.808X1-96030401-06,891 Grants passed through Lane County Oregon: Ultra Low Sulfur Diesel Grant Agreement66.034XA-83168401-0457 Total U.S. Environmental Protection Agency7,348 U.S. Department of Education Grants passed through Eugene School District 4J: Fund for the Improvement of Education84.2152006-0100890,230 Twenty-First Century Community Learning Centers84.287673351,368 Total U.S. Department of Education141,598 U.S. Department of Health and Human Services Grants passed through Lane County Oregon: Basic Center Grant93.6232006-010068,978 Total U.S. Department of Health and Human Services8,978 U.S. Department of Homeland Security Direct program: Cooperating Technical Partners97.045EMS-2004-GR-003524,500 Staffing for Adequate Fire and Emergency Response (SAFER)97.083EMW-2005-FF-00527509,897 Grants passed through State of Oregon: State Homeland Security Program (SHSP)97.07304-33119,100 State Homeland Security Program (SHSP)97.07304-33832,471 State Homeland Security Program (SHSP)97.07305-222394,051 State Homeland Security Program (SHSP)97.07306-2178,844 Law Enforcement Terrorism Prevention Program (LETPP)97.07404-16032,843 Law Enforcement Terrorism Prevention Program (LETPP)97.07405-151157,140 Law Enforcement Terrorism Prevention Program (LETPP)97.07406-15921,718 Buffer Zone Protection Plan (BZPP)97.07805-08348,990 Grants passed through Lane County Oregon: State and Local Homeland Security Exercise Support97.006na7,345 Total U.S. Department of Homeland Security1,256,899 Total Federal Financial Assistance$ 11,189,174 ïêé CITY OF EUGENE, OREGON Notes to Schedule of Expenditures of Federal Awards June 30, 2007 (1) Purpose of the Schedule The accompanying schedule of expenditures of federal awards (the “Schedule”) is a supplementary schedule to the City of Eugene’s basic financial statements and is presented for purposes of additional analysis. Because the Schedule presents only a selected portion of the activities of the City of Eugene, Oregon, it is not intended to and does not present either the financial position, changes in fund balances, or the operating funds’ revenues or expenditures of the City of Eugene, Oregon. (2)Significant Accounting Policies Basis of Presentation The information in the Schedule is presented in accordance with OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Federal Financial Assistance Pursuant to the Single Audit Act of 1984 and OMB Circular A-133, federal financial assistance is defined as assistance provided by a federal agency, either directly or indirectly, in the form of grants, contracts, cooperative agreements, loans, loan guarantees, property, interest subsidies, insurance or direct appropriations. Accordingly, nonmonetary federal assistance, including federal surplus property, is included in federal financial assistance and, therefore, is reported on the Schedule, if applicable. Federal financial assistance does not include direct federal cash assistance to individuals. Solicited contracts between the state and federal government for which the federal government procures tangible goods or services are not considered to be federal financial assistance. Major Programs The Single Audit Act of 1984 and OMB Circular A-133 establish criteria to be used in defining major federal financial assistance programs. Major programs for the City of Eugene, Oregon are those programs selected for testing by the auditor using a risk-assessment model, as well as certain minimum expenditure requirements, as outlined in OMB Circular A-133. Programs with similar requirements may be grouped into a cluster for testing purposes. Reporting Entity The reporting entity is fully described in Note 1(A) to the City of Eugene, Oregon’s Basic Financial Statements. Additionally, the Schedule includes all federal programs administered by the City of Eugene, Oregon for the year ended June 30, 2007. Revenue and Expenditure Recognition The receipt and expenditure of federal awards are accounted for under the modified accrual basis of accounting. Revenues are recorded as received in cash or on the accrual basis where measurable and available. Expenditures are recorded when the liability is incurred. ïêè