2022 Tigard Town Center Development Agency Financial Statement I '
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Town Center Development Agency
Table of Contents
Introductory Section:
Listof Officials..................................................................................................................... 4
Financial Section:
Report of Independent Auditors......................................................................................... 7
Management's Discussion and Analysis........................................................................... 11
Basic Financial Statements:
Government-Wide Financial Statements
Statement of Net Position .................................................................................... 19
Statement of Activities.......................................................................................... 20
Fund Financial Statements—Governmental Funds
Balance Sheet and Reconciliation ........................................................................ 21
Statement of Revenues and Expenditures and Reconciliation ............................ 22
Notes to the Basic Financial Statements .......................................................................... 25
Other Supplementary Information:
Schedule of Revenues, Expenditures and Changes in Fund Balance— Budget and
Actual:
City Center Capital Projects Fund ......................................................................... 35
Tigard Triangle Capital Projects Fund ................................................................... 36
City Center Debt Service Fund.............................................................................. 37
Tigard Triangle Debt Service Fund........................................................................ 38
Audit Comments and Disclosure Requirements:
Report of Independent Auditors Required by Oregon State Regulations........................ 41
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Town Center Development Agency
List of Officials
Fiscal Year 2021-2022
TOWN CENTER DEVELOPMENT AGENCY BUDGET COMMITTEE
Timothy Cadman Mayor Jason Snider
Siobhan Chandler Councilor John Goodhouse
Leah Voit Councilor Jeanette Shaw
Jim Knowlton Councilor Heidi Leub
Clarissa Benfield Councilor Liz Newton
TOWN CENTER DEVELOPMENT AGENCY BOARD
Jason Snider, Chair
John Goodhouse Liz Newton
Heidi Lueb Jeanette Shaw
EXECUTIVE DIRECTOR
Steve Rymer
COMMUNITY DEVELOPMENT DIRECTOR
Kenny Asher
REDEVELOPMENT PROJECT MANAGER for DOWNTOWN
Sean Farrelly
FINANCE DIRECTOR
Cindy Trimp
TOWN CENTER DEVELOPMENT AGENCY
City of Tigard 1 13125 Hall Blvd. I Tigard,OR 97223 1 503-639-4171
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INDEPENDENT AUDITOR'S REPORT
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�In MOSSADAMS
Report of Independent Auditors
Board Members
Town Center Development Agency (A component unit of the City of Tigard, Oregon)
Tigard, Oregon
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities and each major fund of the
Town Center Development Agency(a component unit of the City of Tigard, Oregon) (the Agency) as
of and for the year ended June 30, 2022, and the related notes to the financial statements, which
collectively comprise the Agency's basic financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements referred to above present fairly, in all material
respects, the respective financial position of the governmental activities and each major fund of the
Agency as of June 30, 2022, and the respective changes in financial position for the year then ended
in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America (GARS). Our responsibilities under those standards are further described in the
Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are
required to be independent of the Agency and to meet our other ethical responsibilities, in accordance
with the relevant ethical requirements relating to our audit. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and for
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor's report
that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute
assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will
always detect a material misstatement when it exists. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Misstatements are considered material if there is a substantial likelihood that, individually or in the
aggregate, they would influence the judgment made by a reasonable user based on the financial
statements.
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v22-09
In performing an audit in accordance with GAAS, we
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such
procedures include examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Agency's internal control. Accordingly, no such opinion is
expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit, significant audit findings, and certain internal
control—related matters that we identified during the audit.
Emphasis of Matter
As discussed in Note 1, the financial statements present only the Agency and do not purport to, and
do not, present fairly the financial position of City of Tigard, Oregon, as of June 30, 2022, the changes
in its financial position, or, where applicable, its cash flows for the years then ended in accordance
with accounting principles generally accepted in the United States of America. Our opinion is not
modified with respect to this matter
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis on pages 11 through 15 be presented to supplement the
basic financial statements. Such information is the responsibility of management and, although not a
part of the basic financial statements, is required by the Governmental Accounting Standards Board
who considers it to be an essential part of financial reporting for placing the basic financial statements
in an appropriate operational, economic, or historical context. We have applied certain limited
procedures to the required supplementary information in accordance with auditing standards
generally accepted in the United States of America, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency with
management's responses to our inquiries, the basic financial statements, and other knowledge we
obtained during our audit of the basic financial statements. We do not express an opinion or provide
any assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
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v22-09
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Agency's basic financial statements. The budgetary schedules on pages 33
through 36 are presented for purposes of additional analysis and are not a required part of the basic
financial statements. Such information is the responsibility of management and was derived from and
relates directly to the underlying accounting and other records used to prepare the basic financial
statements. The information has been subjected to the auditing procedures applied in the audit of the
basic financial statements and certain additional procedures, including comparing and reconciling
such information directly to the underlying accounting and other records used to prepare the basic
financial statements or to the basic financial statements themselves, and other additional procedures
in accordance with auditing standards generally accepted in the United States of America. In our
opinion, the budgetary schedules are fairly stated, in all material respects, in relation to the basic
financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other
information comprises the introductory section but does not include the basic financial statements and
our auditor's report thereon. Our opinions on the basic financial statements do not cover the other
information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other
information and consider whether a material inconsistency exists between the other information and
the basic financial statements, or the other information otherwise appears to be materially misstated.
If, based on the work performed, we conclude that an uncorrected material misstatement of the other
information exists, we are required to describe it in our report.
Other Reporting Required by Minimum Standards for Audits of Oregon Municipal
Corporations
In accordance with the Minimum Standards for Audits of Oregon Municipal Corporations, we have
also issued our report dated December 22, 2022, on our consideration of the Agency's compliance
with certain provisions of laws, regulations, contracts, and grant agreements, including the provisions
of Oregon Revised Statutes as specified in Oregon Administrative Rules 162-010-0000 through 162-
010-0330 of the Minimum Standards for Audits of Oregon Municipal Corporations. The purpose of
that report is to describe the scope of our testing of compliance and the results of that testing and not
to provide an opinion on compliance.
XA a.4 9:to- ;1��-
Keith Simovic, Partner
For Moss Adams LLP
Portland, Oregon
December 22, 2022
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Town Center Development Agency
Management's Discussion and Analysis
As part of this Annual Financial Report,the Town Center Development Agency(agency),a component unit
of the City of Tigard, Oregon, offers readers this narrative overview and analysis of the financial activities
of the agency for the fiscal year ended June 30, 2022. It focuses on significant financial issues, major
financial activities, and resulting changes in financial position, as well as economic factors affecting the
agency. 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 report.
Financial Highlights
• The assets of the agency exceeded its liabilities at the close of the most recent fiscal year by
$5,123,044. Of this amount, $2,978,937 is restricted for the repayment of debt, and $1,960,320
is for net investment in capital assets.The agency has an unrestricted net position of$183,787.
• The agency's net position (assets less liabilities) increased $1,220,882 over the course of the year,
primarily due to property tax revenue exceeding expenses.
• In the fund financial statements for fiscal year 2021-22 expenditures in the Capital Projects Fund
($1,497,023) were for capital outlay in the amount of $1,299,759, most of which was for the
downtown plaza construction. The payments in the Debt Service Fund ($954,491) were for
principal and interest payments on commercial bank borrowings and to the City of Tigard.
• Also in the fund financial statements,the agency recognized$1,766,145 in revenue from property
taxes, $338,789 in intergovernmental revenues and $32,621 in interest earnings.
Overview of the Financial Statements
The following discussion and analysis is intended to serve as an introduction to the agency's basic financial
statements. The agency's basic financial statements include three components:
1. Government-wide financial statements,
2. Fund financial statements, and
3. Notes to the financial statements.
Government-wide financial statements
Government-wide financial statements are designed to provide readers with a broad overview of the
agency's finances, in a manner that is similar to a private-sector business.
The Statement of Net Position presents information on all of the agency's assets and liabilities, with the
difference between the two reported as net position. Over time, increases or decreases in net position
may serve as a useful indicator of whether the financial position of the agency is improving or
deteriorating.
The Statement of Activities presents information on how the agency's net position changed during the
most recent fiscal year. All changes in net position are reported as soon as the underlying event occurs,
regardless of the timing of related cash flows. Thus, revenues and expenses are reported in the statement
for some items that will result in cash flows in a future period such as earned, but uncollected property
taxes.
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Town Center Development Agency
Management's Discussion and Analysis
The government-wide financial statements indicate that the functions of the agency are principally
supported by property taxes and are considered governmental activities. The agency does not have
business-type activities in which costs are covered through user fees or charges.
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 functions. The agency uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. All of the funds of the agency are
considered governmental funds.
Governmental funds are used to account for agency functions that are supported primarily by taxes and
intergovernmental revenues.These are essentially the same functions that are reported as governmental
activities in the government-wide financial statements. Unlike government-wide financial statements,
governmental fund financial statements focus on the acquisition and use of spendable resources, as well
as balances of available spendable resources at the end of the fiscal year.Such information may be useful
in evaluating the agency's near-term requirements.
The agency maintains four separate governmental funds consisting of the City Center Debt Service Fund,
City Center Capital Projects Fund, Tigard Triangle Debt Service Fund and Tigard Triangle Capital Projects
Fund.The Capital Projects Funds function as the agency's general operations funds for the separate urban
renewal areas. Fund information is presented as combined amounts for Capital Projects Funds and Debt
Service Funds in the governmental funds balance sheet and in the governmental funds statement of
revenues and expenditures.
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.
Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of the agency's financial position.
In the case of the agency, assets exceeded liabilities by $5,123,044 in fiscal year 2022 compared to a net
position of$3,902,162 in fiscal year 2021.
A significant portion of the agency's net position (38.3 percent) reflects its investment in capital assets,
consisting mostly of infrastructure and land. The agency uses these capital assets in the redevelopment
of the designated City Center Urban Renewal area and the Tigard Triangle Urban Renewal area and, as
such, are not available for future spending. In fiscal year 2022 the capital assets increased by$1,088,837
as the agency began work on the downtown universal plaza project. $2,978,937 or 58.1 percent is
restricted for the payment of debt incurred by the agency.The agency has an unrestricted net position of
$183,787 (3.6%of net position).
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Town Center Development Agency
Management's Discussion and Analysis
Town Center Development Agency
Statement of Net Position
June 30,
2022 2021
ASSETS:
Cash and restricted cash $ 14,796,961 $ 6,269,340
Receivables 526,136 8,655
Capital assets, net of accumulated depreciation 5,479,788 4,390,951
Total assets 20,802,885 10,668,946
LIABILITIES:
Accounts payable and other short-term liabilities 1,134,840 340,483
Long-term liabilities 14,545,001 6,426,301
Total liabilities 15,679,841 6,766,784
NET POSITION:
Net investment in capital assets 1,960,320 1,782,776
Restricted for debt service 2,978,937 2,197,936
Unrestricted 183,787 (78,550)
Total net position $ 5,123,044 $ 3,902,162
Town Center Development Agency
Change in Net Position
For the Year Ended June 30,
REVENUES: 2022 2021
Program revenues $ - $ -
General revenues 1,956,086 2,125,901
Total revenues 1,956,086 2,125,901
EXPENSES:
Community development 408,186 556,664
Interest on long-term debt 327,018 187,523
Total expenses 735,204 744,187
SPECIAL ITEM
Loss on capital asset disposal - (846,589)
Change in net position 1,220,882 535,125
Net position-beginning 3,902,162 3,367,037
Net position-ending 5,123,044 3,902,162
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Town Center Development Agency
Management's Discussion and Analysis
Capital Assets and Debt Administration
Capital Assets
As of June 30, 2022 the agency had invested $5,479,788 in capital assets as reflected in the following
table:
Governmental Activities
2022 2021
Land $ 1,279,951 $ 1,279,951
Construction in progress 2,573,221 1,428,524
Infrastructure 1,951,748 1,951,748
Accumulated depreciation (325,132) (269,272)
Total $ 5,479,788 $ 4,390,951
The Town Center Development Agency purchased the 9110 SW Burnham Street property in 2014. For six
years it continued the lease with Ferguson Plumbing. In March 2020 the Agency facilitated the relocation
of the business to a new location, in order to prepare the site to be redeveloped as a public plaza.
Landscape architects and associated consultants were engaged in February 2020 to start designing the
plaza. In June 2020 the existing building was demolished and development of the plaza began.
Construction of the plaza was fully underway and was the primary focus in fiscal year 2021-2022. In
January 2021 the Main Street at Fanno Creek property was sold to developers who plan to build a mixed-
use building on the site.Additional information on the agency's capital assets can be found on page 28 of
this report.
Debt
Under the Intergovernmental Agreement(IGA) between the agency and the City of Tigard, loans from the
city to the agency are repaid in ten equal payments on the principal starting ten years after the loan;
however, interest payments start in the second year after the loan. In fiscal year 2021-22,the agency did
not receive a loan from the city and only made interest payments on the outstanding loans.
Total debt increased by $8,671,400 during the current fiscal year. In fiscal year 2022 the agency issued
$4,687,800 in Urban Renewal and Redevelopment bonds solely backed by tax increment revenue
generated from the Tigard Triangle Urban Renewal Plan. Additionally, the city issued $4,624,600 in full
faith and credit financing agreement (bonds). The bonds were issued to fund Urban Renewal projects
within the agency.At June 30, 2022 the outstanding balance on this debt was$8,919,400.
In fiscal year 2019-2020 the city issued $5,929,000 in full faith and credit financing agreement (bonds).
The bonds were issued to fund Urban Renewal projects within the agency. At June 30, 2022 the
outstanding balance on the bonds was $5,440,000. Additional information on the agency's debt can be
found on pages 29-30 of this report.
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Town Center Development Agency
Management's Discussion and Analysis
Budgetary Highlights
The Town Center Development Agency budget consists of four funds: The City Center Capital Projects
Fund, which functions as the agency's general operations fund for the Downtown Urban Renewal Area,
and the Tigard Triangle Capital Projects Fund, which functions as the agency's general operations for the
Triangle Urban Renewal Area. The agency also has a City Center Debt Service Fund and Tigard Triangle
Debt Service Fund.The Capital Projects Fund activity is supported by loans from the City of Tigard and the
bonds issuances.The city loans will be repaid with interest once the agency begins generating enough tax
increment revenue.The focus of the fiscal year 2021-22 budget was primarily on the universal plaza.
The budget for fiscal year 2022-23 will include further construction of Universal Plaza, Main Street Green
Street improvements, and Streetscape Improvements. The agency will also provide development
assistance to support affordable housing in the area. The agency will further engage the District's
merchants and business owners together with the Tigard Downtown Alliance to promote new businesses
in the district.
Economic Factors
The Town Center Development Agency is an urban renewal agency approved by voters in 2006. The
primary funding source for the agency is property tax increment financing, which generally means that
the property taxes resulting from growth in property value within the Urban Renewal area can be used to
finance improvement projects and programs. In order to facilitate the redevelopment of the Urban
Renewal area, the agency adopted a City Center Urban Renewal Plan that allows the agency to incur a
maximum amount of indebtedness (amount of tax increment financing for projects and programs) of
$22,000,000 for a duration of 20 years. As of fiscal year 2021-22, the total debt issued is $11.6 million.
Current and proposed projects include additional fagade improvement grants for local businesses,
redevelopment of Main Street where it connects to Fanno Creek, completion of Tigard Street Heritage
trail for improved pedestrian traffic and construction of Universal Plaza offering more public space for
events and local activities.
In May 2017 the voters approved the creation of a second urban renewal area,the Tigard Triangle Urban
Renewal Area, for 35 years with maximum principal indebtedness of$188 million. As of fiscal year 2021-
22,the total debt issued is$8.9 million. No new debt will be incurred after the fiscal year 2052-53 as part
of this plan.The agency's ability to borrow additional funds will remain constrained for several more years
as tax increment revenue is based on property tax increases over time and growth was fairly slow at the
time the agency was created. Despite the slow growth,the agency has been able to leverage state,county
and local funds to make major improvements to streets, bicycle and pedestrian paths in the district. The
agency will continue to seek additional funding from outside sources for redevelopment opportunities as
planning continues for affordable housing and infrastructure improvements.
Requests for Information
This financial report is designed to provide a general overview of the agency's finances for all 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 the Finance Director, City
of Tigard, 13125 SW Hall Blvd.,Tigard, Oregon 97223.
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Basic Financial Statements
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Town Center Development Agency
Statement of Net Position
June 30,2022
Governmental
Activities
ASSETS:
Property taxes receivable $ 22,473
Accounts receivable 3,663
Note receivable 500,000
Restricted cash and cash equivalents 14,796,961
Land and construction in progress 3,853,172
Other capital assets, net of accumulated depreciation 1,626,616
Total assets 20,802,885
LIABILITIES:
Accounts payable and other accrued liabilities 307,395
Interest payable 26,745
Due within one year:
Bank loan payable 800,700
Due within more than one year:
Advances from city 986,301
Bonds payable 13,558,700
Total liabilities 15,679,841
NET POSITION:
Net investment in capital assets 1,960,320
Restricted for debt service 2,978,937
Unrestricted 183,787
Total net position $ 5,123,044
The accompanying notes are an integral part of the basic financial statements.
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Town Center Development Agency
Statement of Activities
Year Ended June 30,2022
Net
(Expense)/Revenue
Program and Change in Net
Revenues Position
Rental Income and Total
Charges for Governmental
Functions/Programs Expenses Services Activities
Governmental activities:
Community development $ 408,186 $ - $ (408,186)
Interest on long-term debt 327,018 - (327,018)
Total governmental activities $ 735,204 $ - (735,204)
General revenues:
Property taxes 1,770,139
Interest earnings(loss) (152,868)
Intergovernmental 338,789
Miscellaneous 26
Total revenues 1,956,086
Change in net position 1,220,882
Net position -beginning 3,902,162
Net position -ending $ 5,123,044
The accompanying notes are an integral part of the basic financial statements.
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Town Center Development Agency
Balance Sheet-Governmental Funds and
Reconciliation to the Statement of Net Position
June 30,2022
Total
Capital Debt Governmental
Projects Service Funds
ASSETS:
Property taxes receivable $ $ 22,473 $ 22,473
Accounts receivable - 3,663 3,663
Note receivable 500,000 - 500,000
Restricted cash and cash equivalents 11,826,233 2,970,728 14,796,961
Total assets $ 12,326,233 $ 2,996,864 $ 15,323,097
LIABILITIES:
Accounts payable and accrued liabilities $ 307,395 $ - $ 307,395
Total liabilities 307,395 - 307,395
DEFERRED INFLOWS OF RESOURCES:
Unavailable revenues-property taxes - 17,927 17,927
Total deferred inflows of resources - 17,927 17,927
FUND BALANCES:
Restricted for:
Debt service - 2,978,937 2,978,937
Urban development and improvements 12,018,838 - 12,018,838
Total fund balances 12,018,838 2,978,937 14,997,775
Total liabilities,deferred inflows
of resources and fund balances $ 12,326,233 $ 2,996,864
Capital assets used in governmental activities are not financial resources and are
not reported in the funds. 5,479,788
Property taxes that do not provide current financial resources 17,927
Interest on long-term debt not accrued in the fund statements (26,745)
Long-term liabilities-not reported in the funds:
Loan from City of Tigard, not due and payable in the current period (986,301)
Bonds, not due and payable in the current period (14,359,400)
Net Position of Governmental Activities $ 5,123,044
The accompanying notes are an integral part of the basic financial statements.
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Town Center Development Agency
Statement of Revenues,Expenditures and Changes in Fund Balance-Governmental Funds and
Reconciliation to the Statement of Activities
Year Ended June 30,2022
Total
Capital Debt Governmental
Projects Service Funds
REVENUES:
Taxes $ - $ 1,766,145 $ 1,766,145
Interest earnings 18,513 14,108 32,621
Net Increase(decrease) in investment fair value (140,728) (44,761) (185,489)
Intergovernmental revenues 338,789 - 338,789
Miscellaneous revenues 26 - 26
Total revenues 216,600 1,735,492 1,952,092
EXPENDITURES:
Community Development 352,326 - 352,326
Capital projects 1,144,697 - 1,144,697
Debt service
Principal - 641,000 641,000
Interest - 313,491 313,491
Total expenditures 1,497,023 954,491 2,451,514
Change in fund balance before
other financing sources(uses) (1,280,423) 781,001 (499,422)
Other financing sources(uses):
Debt Proceeds 9,312,400 - 9,312,400
Change in fund balance 8,031,977 781,001 8,812,978
Fund balance-beginning 3,986,861 2,197,936 6,184,797
Fund balance-ending $ 12,018,838 $2,978,937 $ 14,997,775
Net change in fund balances-total governmental funds $ 8,812,978
Governmental funds report capital outlays as expenditures while govermental activities
report depreciation expense to allocate thoses expenditures over the life of the assets.
Expenditures for capitalized assets 1,144,697
Depreciation reported in the government-wide statements (55,860)
Property taxes that do not provide current financial resources 3,994
Interest on long-term debt not accrued in the fund statements (13,527)
Long-term liabilities not reported in the funds (9,312,400)
Principal payments expensed on the fund financial statements 641,000
Change in Net Position of Governmental Activities $ 1,220,882
The accompanying notes are an integral part of the basic financial statements.
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Notes to Basic Financial Statements
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Town Center Development Agency
Notes to the Basic Financial Statements
1. Summary of Significant Accounting Policies:
The financial statements of the Town Center Development Agency(agency), previously Tigard City Center
Development Agency (CCDA), have been prepared in accordance with accounting principles generally
accepted in the United States of America (GAAP) as applied to government units. GAAP statements
include all relevant Governmental Accounting Standards Board (GASB) pronouncements.
The Agency
The Town Center Development Agency,formerly the CCDA,was approved on May 16, 2006 with plans to
commence operations during fiscal year 2009 under the provisions of Oregon Revised Statutes, Chapter
457 (ORS 457), to provide improvements in the downtown area so that it will be economically healthy
while maintaining its "uniquely Tigard" character. The plan's duration is 20 years with maximum
indebtedness of$22 million.
In May 2017 the voters approved the creation of a second urban renewal area,the Tigard Triangle Urban
Renewal Area,for 35 years with maximum indebtedness of$188 million.
The agency is a legally separate entity, which is governed by a board comprised of the City Council of the
City of Tigard, Oregon, as stipulated in the bylaws. The Council has the ability to impose its will on the
agency as determined on the basis of budget adoption,taxing authority, and funding. The purpose of the
agency is to undertake urban renewal projects and activities pursuant to the city's downtown
redevelopment plan. The financial results of the agency are reported herein as debt service funds and
capital projects funds.
The agency boundaries include primarily the city's central business district, general commercial district,
professional commercial district and the Tigard Triangle (an area bordered by 1-5, Highway 217, and
Highway 99 East). The agency is a blended component unit of the City of Tigard and its financial activities
are included in the basic financial statements of the city, which can be viewed on the city's website at
http://www.tigard-or.gov.
Basic Financial Statements
The agency's financial operations are presented at both the government-wide and fund financial levels.
All activities of the agency are categorized as governmental activities.
Government-wide financial statements
The Statement of Net Position and the Statement of Activities display information about the agency as a
whole. These statements include all the financial activities of the agency.
The Statement of Activities presents a comparison between direct expenses and program revenues for
each function of the agency's governmental activities. Direct expenses are clearly identifiable with a
specific function. All costs are supported by general revenues which include property taxes and interest
earnings.
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Town Center Development Agency
Notes to the Basic Financial Statements
Fund financial statements
These statements display information at the individual fund level. Each fund is considered to be a separate
accounting entity. Funds are classified and summarized as governmental, proprietary and fiduciary.
Currently the agency has only governmental fund types.
Basis of Presentation
The financial transactions of the agency are recorded in individual funds. Each fund is accounted for by
providing a separate set of self-balancing accounts that comprises its assets, deferred outflows of
resources, liabilities, deferred inflows of resources,fund balance, revenues and expenditures.
GASB Statement No. 34 sets forth criteria (percentage of the assets, deferred outflows of resources,
liabilities, deferred inflows of resources, revenues or expenditures/expenses or either fund category or
the governmental and enterprise combined) for the determination of major funds. For purposes of
presentation, each of the agency's funds is presented as a major fund.
The City Center Debt Service Fund accounts for the accumulation of resources and payments for long-
term borrowings related to the City Center Urban Renewal Area.
The Tigard Triangle Debt Service Fund accounts for the accumulation of resources and payments for long-
term borrowings related to the Tigard Triangle Urban Renewal Area.
The City Center Capital Projects Fund accounts for the acquisition and development of capital assets
related to the City Center Urban Renewal Area.
The Tigard Triangle Capital Projects accounts for the acquisition and development of capital assets related
to the Tigard Triangle Urban Renewal Area.
Measurement Focus and Basis of Accounting
Measurement focus is a term used to describe which transactions are recorded within the various financial
statements. Basis of accounting refers to when transactions are recorded, regardless of the measurement
focus.
The government-wide financial statements are reported using the economic resources measurement
focus and the full accrual basis of accounting. Revenues are recorded as program revenues when earned
and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.
Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the
provider have been met.
The governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as
they are both measurable and available. Revenues are considered to be available when they are
collectible within the current period or soon enough thereafter to pay liabilities of the current period. For
this purpose, the agency considers revenues to be available if they are collectible within 60 days of the
end of the current fiscal period. The agency considers property taxes subject to accrual. Expenditures
generally are recorded when a liability is incurred, as under accrual accounting. However, payment on
long-term borrowing is recorded only when payment is due.
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Town Center Development Agency
Notes to the Basic Financial Statements
Since the governmental fund statements are presented on a different measurement focus and basis of
accounting than the government-wide statements, reconciliation is necessary to explain the adjustments
needed to transform the fund-based financial statements into the government-wide presentation. These
reconciliations are presented with the governmental fund statements.
Cash and Investments
The city maintains a common cash and cash equivalents pool for all city funds, including funds of the
agency. Interest is earned and allocated monthly on pooled cash and cash equivalents based on each
fund's cash balances as a proportion of the city's total pooled cash and cash equivalents. The agency
considers cash and cash equivalents to include the pooled cash, 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.
The agency reports certain cash and cash equivalents as restricted because their use is limited by parties
external to the agency. Restrictions may be imposed by creditors, other governments, laws and/or
enabling legislation.
Receivables and Payables
Property taxes are levied and become a lien on July 1. Collection dates are November 15, February 15,
and May 15 following the lien date. Discounts are allowed if the amount due is received by November 15
or February 15. Taxes unpaid and outstanding on May 16 are considered delinquent.
The majority of the agency's receivables are property taxes, which are deemed to be substantially
collectible.
Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets (e.g. roads, pathways,
street lights, etc.) are reported in the government-wide financial statements.
Capital assets are charged to expenditures as purchased or constructed in the governmental fund
statements, and capitalized in the government-wide financial statements. Capital assets are recorded at
historical cost or estimated historical cost. Upon disposal of an asset, cost and accumulated depreciation
(if applicable) is removed from the accounts and, if appropriate, a gain or loss on the disposal is
recognized.
Capital assets are defined for the agency as assets with an initial, individual cost of$5,000 or more, and
an estimated useful life of greater than one year. Additions or improvements and other capital outlays
that significantly extend the useful life of an asset, or that significantly increase the capacity of an asset
are capitalized. Donated capital assets are recorded at their estimated acquisition value at the time of
donation. Other costs for repairs and maintenance are expensed as incurred.
Depreciation on exhaustible assets is calculated on the straight-line basis over the following estimated
useful lives:
Asset Years
Buildings and improvements 25-40
Improvements other than buildings 10-20
Infrastructure 20-40
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Town Center Development Agency
Notes to the Basic Financial Statements
Deferred Inflows of Resources
In addition to liabilities, the governmental fund balance sheet reports a separate section for deferred
inflows of resources. Deferred inflows of resources represent unavailable revenue that will be recognized
in a future period. The agency reports delinquent property tax revenue in this section under the modified
accrual basis of accounting. These revenues are deferred and recognized as an inflow of resources in the
period that the revenues become available.
Net Position and Fund Balance
Net position is reported on the Statement of Net Position. Within net position, the net investment in
capital assets represents total capital assets less accumulated depreciation, less any debt related to the
acquisition of the assets. Of the total net position, the majority is net investment in capital assets and
amounts restricted for debt service.
In the fund financial statements, the fund balance for governmental funds is reported in classifications
that comprise a hierarchy based primarily on the extent to which the government is bound to honor
constraints on the specific purposes for which amounts in those funds can be spent.
Fund balance is reported as restricted when the constraints placed on the use of resources are either: (a)
externally imposed by creditors (such as through debt covenants), grantors, contributors or laws or
regulations of other governments; or (b) imposed by law through constitutional provisions or enabling
legislation.
Use of Estimates
In preparing the agency's financial statements, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities,the disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported amounts of revenues and
expenses/expenditures during the reporting period. Actual results could differ from those estimates.
2. Stewardship, Compliance, and Accountability:
Budgets
The agency's budget is prepared in accordance with Oregon local budget law. All annual appropriations
lapse at fiscal year-end. During the month of February each year, the agency submits requests for
appropriations to the executive director so that a budget may be prepared. In June,the proposed budget
is presented to the agency's board of directors for approval. The board holds public hearings and a final
budget must be prepared and adopted no later than June 30.
The adopted budget is prepared by fund and function. The legal level of budgetary control, (i.e.,the level
at which expenditures may not legally exceed appropriations) is the fund and function level.
3. Cash and Investments:
The agency's cash and investments reported on the Statement of Net Position and Balance Sheet
represent the agency's share of the city's cash and investment pool. The agency's participation in the
cash and investment pool is involuntary. Interest earnings from this pool are allocated to the agency on
a monthly basis based on the cash and investment balance of the agency to the total investments in the
pool. At June 30,2022 the agency's share of the city's cash and investment pool, including restricted and
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Town Center Development Agency
Notes to the Basic Financial Statements
unrestricted,totaled $14,796,961 all of which is restricted by the requirements of the agency's property
tax levy. It is not practical to determine the investment risk, collateral risk or insurance coverage for the
agency's share of its pooled investments. Investments for the city as well as its component unit are
reported at fair value.
Information about the pooled investments is included in the city's annual financial report and may be
obtained by contacting the city's Finance Department at 13125 SW Hall Blvd.,Tigard, OR 97223 or found
online at: https://www.tigard-or.gov/vour-government/departments/finance.
4. Receivables and Payables:
Property taxes are levied and become a lien on July 1. Collection dates are November 15, February 15,
and May 15 following the lien date. Discounts are allowed if the amount due is received by November 15
or February 15. Taxes unpaid and outstanding on May 16 are considered delinquent. The agency's
receivables, including property taxes and assessments are deemed to be substantially collectible. Tax and
assessments receivable can be recovered through foreclosure on the subject property.
In October 2021, the agency issued a promissory note to lend $500,000 to Community Partners for
Affordable Housing for affordable housing development assistance,with a term of five years at an interest
rate of 2%.The repayment of principal and accrued interest are due at the end of the five year note term.
The promissory note contains provisions for loan forgiveness if certain requirements are met. As of June
30, 2022, the outstanding balance of the note receivable is$500,000.
Accounts payable to vendors and contractors include general accounts payable not included in short-term
or long-term liabilities.
S. Capital Assets:
Capital assets include a property purchase for redevelopment projects on Main Street, the completion
of two projects for the Strolling Street landscaping program, Main Street gateway improvements and
public artwork.
Balance Balance
July 1, 2021 Additions June 30,2022
Land $ 1,279,951 $ - $ 1,279,951
Construction in Progress 1,428,524 1,144,697 2,573,221
Infrastructure 1,951,748 - 1,951,748
Total cost 4,660,223 1,144,697 5,804,920
Depreciation
Infrastructure (269,272) (55,860) (325,132)
Capital assets, net $ 4,390,951 $ 1,088,837 $ 5,479,788
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Town Center Development Agency
Notes to the Basic Financial Statements
6. Long-term Borrowing:
The agency has two urban renewal district areas approved to finance improvement projects with
property tax increment financing.The first area is the City Center Urban Renewal District (CCUR) with a
maximum indebtedness of $22 million for a duration of 20 years. As of fiscal year 2021-22, the CCUR
issued $11.6 million in total debt against the maximum indebtedness. The second area is the Tigard
Triangle Urban Renewal District (TTUR) with a maximum indebtedness of$188 million for a duration of
35 years. As of fiscal year 2021-22, the TTUR issued $8.9M in total debt against the maximum
indebtedness.
In order to finance improvement projects, the agency and the city entered into an intergovernmental
agreement (IGA) that states the city will loan the agency resources as needed to cover project costs
related to the Town Center Urban Renewal Plan. All of the outstanding debt of the agency is considered
from direct borrowings and placements.
The terms of the IGA state that the agency agrees to repay the principal and accrued interest on all loan
amounts solely from tax increment revenues. The interest rate calculated for the loans is based on the
same average rate as that earned on other funds invested by the city at the time of the loan, which
currently ranges from 0.50%to 2.85%. Interest-only payments are scheduled to be paid to the city prior
to July 1, each fiscal year.
During the fiscal year ending June 30, 2025 the agency will begin making principal payments to the city
on outstanding loans. Payments are to be made as tax increment revenue or other funding sources are
available. In no case shall the repayment timeline exceed the life of the agency. Under the terms of the
IGA, the city may forgive or reduce the interest and/or principal due from the agency. The agency may
also repay the debt early. The agency did not receive any loans from the city for fiscal year 2022. In fiscal
year 2022 the agency elected to repay none of the outstanding principal on the loans.
In fiscal year 2021-2022 the agency issued Urban Renewal and Redevelopment bond for $4,687,800 in
Series 2021 Federally Taxable bonds.The bonds were issued to fund Urban Renewal projects within the
Tigard Triangle Urban Renewal Plan.The bond is backed solely by tax increment revenue generated from
the Tigard Triangle Urban Renewal Area. At June 30, 2022 the outstanding balance on the bond was
$4,482,000.
In fiscal year 2021-2022 the city issued full faith and credit financing agreement (bonds) for$3,604,900
in Series 2021A Tax-Exempt bonds, and $1,019,700 Series 2021B Federally Taxable bonds. The bonds
were issued to fund Urban Renewal projects within the CCDA. In connection with the financing
agreement, CCDA and the city executed an intergovernmental agreement(IGA)for CCDA to be obligated
for the debt service payments on the bonds. The IGA constitutes indebtedness of the agency in the
amount of the financing of$4,624,600. Pursuant to ORS 287A.310,the agency pledges the tax increment
revenues to pay the financing payments or debt service.The outstanding bonds carry an Event of Default
clause which allows the lender to exercise any remedy available at law or in equity, with the exception
of acceleration. At June 30, 2022 the outstanding balance on the bonds was $3,458,000 for the Series
2021A and $979,400 for the Series 202113.
In fiscal year 2019-2020 the city issued full faith and credit financing agreement (bonds) for$1,896,000
in Series 2019A Tax-Exempt bonds, and $4,033,000 Series 20198 Federally Taxable bonds. The bonds
were issued to fund Urban Renewal projects within the CCDA. In connection with the financing
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Town Center Development Agency
Notes to the Basic Financial Statements
agreement, CCDA and the city executed an intergovernmental agreement(IGA)for CCDA to be obligated
for the debt service payments on the bonds. The IGA constitutes indebtedness of the agency in the
amount of the financing of$5,929,000. Pursuant to ORS 287A.310,the agency pledges the tax increment
revenues to pay the financing payments or debt service.The outstanding bonds carry an Event of Default
clause which allows the lender to exercise any remedy available at law or in equity, with the exception
of acceleration. At June 30, 2022 the outstanding balance on the bonds was $1,734,000 for the Series
2019A and $3,706,000 for the Series 2019B.
Long-term debt activity for the year ended June 30, 2022 was as follows:
Borrowing Transactions Interest
Outstanding Outstanding Due in
Outstanding Debt June 30,2021 Additions Paid June 30,2022 Paid one year
Loans from City of Tigard
for urban renewal projects:
Loan#5 June 30,2013 $ 102,320 $ $ $ 102,320 $ 512 $
Loan#5 June 30,2013 40,112 40,112 200
Loan#6 June 30,2014 361,000 361,000 1,949
Loan#7 June 30,2015 254,000 254,000 1,270
Loan#8 June 30,2019 183,273 183,273 5,040
Loan#9 June 30,2020 45,596 45,596 456 -
2019A Bonds with Key Bank 1,816,000 (82,000) 1,734,000 42,858 84,000
2019B Bonds with Key Bank 3,872,000 (166,000) 3,706,000 115,773 170,000
2021 Bonds with Zions Bank - 4,687,800 (205,800) 4,482,000 89,810 265,000
2021A Bonds with Zions Bank 3,604,900 (146,900) 3,458,000 40,954 221,000
2021B Bonds with Zions Bank 1,019,700 (40,300) 979,400 14,669 60,700
Total $ 6,674,301 $ 9,312,400 $ (641,000) $ 15,345,701 $ 313,491 $ 800,700
Future requirements related to long-term borrowing are as follows:
Fiscal Year Loans from City Key Bank Bonds Zions Bank Bonds Totals
Ending June 30 Principal Interest Principal Interest Principal Interest Principal Interest
2023 $ $ 9,428 $ 254,000 $ 151,732 $ 546,700 $ 207,136 $ 800,700 $ 368,296
2024 9,428 262,000 144,666 559,300 194,550 821,300 348,644
2025 13,926 9,428 269,000 137,374 572,200 181,658 855,126 328,460
2026 49,227 9,358 276,000 129,886 585,400 168,451 910,627 307,695
2027 74,321 9,098 284,000 122,200 598,900 154,922 957,221 286,220
2028-2032 414,577 39,217 1,544,000 487,703 3,209,600 559,817 5,168,177 1,086,737
2033-2037 355,177 20,187 2,551,000 133,146 2,847,300 168,292 5,753,477 321,625
2038-2041 79,073 3,819 - - - - 79,073 3,819
$ 986,301 $ 109,963 $ 5,440,000 $ 1,306,707 $ 8,919,400 $ 1,634,826 $ 15,345,701 $ 3,051,496
7. Risk Management:
As a component unit of the city, the agency is exposed to various risks of loss related to torts; theft of,
damage to and destruction of assets;errors and omissions;and natural disasters for which the city carries
commercial insurance. The city has established risk management programs for liability insurance
coverage. The agency is covered under policies and programs insuring the city. There were no insurance
claims attributable to the agency as of June 30, 2022.
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Other Supplementary Information
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Town Center Development Agency
City Center Capital Projects Fund
Schedule of Revenues and Expenditures- Budget and Actual
Year Ended June 30,2022
Variance with
Budgeted Amounts Actual Final Budget
Original Final Amounts Over(Under)
REVENUES:
Intergovernmental revenues $ 1,571,000 $ 1,657,000 $ 338,789 $ (1,318,211)
Interest Earnings - - 18,513 18,513
Net Increase (decrease) in investment
fair value - - (61,858) (61,858)
Miscellaneous - - 10 10
Total revenues 1,571,000 1,657,000 295,454 (1,361,546)
EXPENDITURES:
Capital projects 4,588,000 4,787,000 1,299,759 3,487,241
Total expenditures 4,588,000 4,787,000 1,299,759 3,487,241
Change in fund balance before
other financing sources (uses) (3,017,000) (3,130,000) (1,004,305) 2,125,695
OTHER FINANCING SOURCES:
Transfers in 730,000 730,000 - (730,000)
Debt proceeds - - 1,019,700 1,019,700
Reserve for future expenditure (25,600) (25,600) - 25,600
Total other financing sources 704,400 704,400 1,019,700 315,300
Change in fund balance (2,312,600) (2,425,600) 15,395 2,440,995
Fund balance- Beginning of the year 2,312,600 2,425,600 3,880,320 1,454,720
Fund balance- End of the year $ - $ - $ 3,895,715 $ 3,895,715
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Town Center Development Agency
Tigard Triangle Capital Projects Fund
Schedule of Revenues and Expenditures- Budget and Actual
Year Ended June 30, 2022
Variance with
Budgeted Amounts Actual Final Budget
Original Final Amounts Over(Under)
REVENUES:
Net Increase (decrease) in investment
fair value $ - $ - $ (78,870) $ (78,870)
Miscellaneous revenues - - 16 16
Total revenues - - (78,854) (78,854)
EXPENDITURES:
Community development 2,190,000 2,190,000 197,264 1,992,736
Capital projects* - - - -
Total expenditures 2,190,000 2,190,000 197,264 1,992,736
Change in fund balance before
other financing sources (uses) (2,190,000) (2,190,000) (276,118) 1,913,882
OTHER FINANCING SOURCES:
Transfers in 5,163,500 5,163,500 - (5,163,500)
Transfers out (2,973,500) (2,973,500) - 2,973,500
Debt Proceeds - - 8,292,700 8,292,700
Total other financing sources 2,190,000 2,190,000 8,292,700 6,102,700
Change in fund balance - - 8,016,582 8,016,582
Fund balance- Beginning of the year - - 106,541 106,541
Fund balance- End of the year $ - $ - $ 8,123,123 $ 8,123,123
* For budgetary purposes expenditures are appropriated as capital projects, however on the
GAAP statements non-capital transactions are recorded as program expenditures.
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Town Center Development Agency
City Center Debt Service Fund
Schedule of Revenues and Expenditures-Budget and Actual
Year Ended June 30,2022
Variance with
Budgeted Amounts Actual Final Budget
Original Final Amounts Over(Under)
REVENUES:
Property taxes $ 697,000 $ 697,000 $ 728,711 $ 31,711
Interest earnings 8,325 8,325 7,626 (699)
Net increase(decrease) in investment
fair value - - (22,508) (22,508)
Total revenues 705,325 705,325 713,829 8,504
EXPENDITURES:
* Debt service:
Principal 247,500 288,500 288,300 200
Interest 177,525 177,525 177,231 294
Total expenditures 425,025 466,025 465,531 494
Change in fund balance before
other financing sources(uses) 280,300 239,300 248,298 8,998
OTHER FINANCING USES
Transfers out (730,000) (730,000) - 730,000
Reserve for future expenditure (175,475) (134,475) - 134,475
Total other financing sources (uses) (905,475) (864,475) - 864,475
Change in fund balance (625,175) (625,175) 248,298 873,473
Fund balance- Beginning of the year 625,175 625,175 1,347,913 722,738
Fund balance- End of the year $ - $ - $ 1,596,211 $ 1,596,211
* Budget appropriation for the Urban Renewal Agency is made at the debt service program level.
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Town Center Development Agency
Tigard Triangle Debt Service Fund
Schedule of Revenues and Expenditures-Budget and Actual
Year Ended June 30,2022
Variance with
Budgeted Amounts Actual Final Budget
Original Final Amounts Over(Under)
REVENUES:
Property taxes $ 798,000 $ 798,000 $ 1,037,434 $ 239,434
Interest earnings - - 6,482 6,482
Net increase(decrease) in investment
fair value - - (22,253) (22,253)
Total revenues 798,000 798,000 1,021,663 223,663
EXPENDITURES:
* Debt service:
Principal - 352,800 352,700 100
Interest 5,600 136,300 136,260 40
Change in fund balance before
other financing sources(uses) 792,400 308,900 532,703 223,803
OTHER FINANCING SOURCES(USES)
Transfers out (5,163,500) (5,163,500) - 5,163,500
Debt proceeds 8,000,000 8,000,000 - (8,000,000)
Reserve for future expenditure (3,681,000) (3,197,500) - 3,197,500
Total other financing sources (uses) (844,500) (361,000) - 361,000
Change in fund balance (52,100) (52,100) 532,703 584,803
Fund balance-Beginning of the year 52,100 52,100 850,023 797,923
Fund balance-End of the year $ $ $ 1,382,726 $ 1,382,726
* Budget appropriation for the Urban Renewal Agency is made at the debt service program level.
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INDEPENDENT AUDITOR'S REPORT REQUIRED BY OREGON STATE REGULATIONS
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40
MOSSADAMS
Report of Independent Auditors Required by Oregon State
Regulations
Board Members
Town Center Development Agency (A component unit of the City of Tigard, Oregon)
Tigard, Oregon
We have audited, in accordance with auditing standards generally accepted in the United States of
America the financial statements of the governmental activities and each major fund of the Town
Center Development Agency, a component unit of the City of Tigard, Oregon (the Agency), as of and
for the year ended June 30, 2022, and the related notes to the financial statements, which collectively
comprise Agency's basic financial statements, and have issued our report thereon dated
December 22, 2022.
Compliance
As part of obtaining reasonable assurance about whether the Agency's basic financial statements are
free from material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, including provisions of Oregon Revised Statutes (ORS)
as specified in Oregon Administrative Rules (OAR) 162-010-0000 to 162-010-0330, of the Minimum
Standards for Audits of Oregon Municipal Corporations, noncompliance with which could have a
direct and material effect on the financial statements: However, providing an opinion on compliance
with those provisions was not an objective of our audit and, accordingly, we do not express such an
opinion.
We performed procedures to the extent we considered necessary to address the required comments
and disclosures which included, but were not limited to, the following:
• Accounting records and internal control
• Public fund deposits
• Indebtedness
• Budget
• Insurance and fidelity bonds
• Investments
• Public contracts and purchasing
In connection with our testing, nothing came to our attention that caused us to believe the Agency
was not in substantial compliance with certain provisions of laws, regulations, contracts, and grant
agreements, including the provisions of ORS as specified in OAR 162-010-0000 through 162-010-
0330 of the Minimum Standards for Audits of Oregon Municipal Corporations.
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v22-09
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Agency's internal
control over financial reporting (internal control) as a basis for designing audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinions on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of the Agency's
internal control. Accordingly, we do not express an opinion on the effectiveness of the Agency's
internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the entity's financial statements will not be prevented, or detected and
corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies,
in internal control that is less severe than a material weakness, yet important enough to merit
attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify
any deficiencies in internal control that we consider to be material weaknesses. However, material
weaknesses or significant deficiencies may exist that have not been identified.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity's internal control or on compliance. Accordingly, this communication is not suitable for any other
purpose.
This report is intended solely for the information and use of the Board Members and management of
the Agency and the Oregon Secretary of State and is not intended to be and should not be used by
anyone other than these parties.
xjdl;��Of ;-��-
Keith Simovic, Partner
for Moss Adams LLP
Portland, Oregon
December 22, 2022
2
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