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CCDA Budget - FY2008-2009 CITY CENTER DEVELOPMENT AGENCY II il f UlTili\ imiu\u _ � F il I i � W ___ ---- / t 1 , . 19°I Afsv I., ir ,.... ,,, I tt 7 ri 33 i Tigard U r b an Renewal District TIGARD CITY CENTER DEVELOPMENT AGENCY ANNUAL FINANCIAL REPORT For the fiscal year ended June 30, 2009 Prepared by: City of Tigard - Financial and Information Services Department City Center Development Agency Table of Contents Mayor and City Council Members 3 Independent Accountant's Review Report 4 Management's Discussion and Analysis 6 Basic Financial Statements 10 Government -Wide Financial Statements Statement of Net Assets 11 Statement of Activities 12 Fund Financial Statements - Governmental Funds Balance Sheet 13 Statement of Revenues and Expenditures 14 Notes to Basic Financial Statements 15 Supplementary Data 21 Schedules of Revenues and Expenditures - Budget and Actual: Urban Renewal Agency Debt Service Fund 22 Urban Renewal Agency Capital Projects Fund 23 Schedule of Property Tax Transactions and Outstanding Balances: Urban Renewal Agency Debt Service Fund 24 Schedule of Future Debt Service Requirements: Urban Renewal Agency Debt Service Fund 25 Accountant's Review Comments and Disclosures Required by State Regulations 26 2 Tigard City Center Development Agency Fiscal Year 2008 -2009 CITY CENTER DEVELOPMENT AGENCY BUDGET COMMITTEE Jason Snider Craig Dirksen Rick Parker Gretchen Buehner John Bailey Sydney Sherwood Dena Struck Marland Henderson Cameron James Nick Wilson Brian McCarry (Alternate) CITY CENTER DEVELOPMENT AGENCY BOARD Craig Dirksen, Chair Gretchen Buehner Nick Wilson Sydney Sherwood Marland Henderson EXECUTIVE DIRECTOR Craig Prosser COMMUNITY DEVELOPMENT DIRECTOR Ron Bunch REDEVELOPMENT SENIOR PLANNER Sean Farrelly FINANCIAL and INFORMATION SERVICES DIRECTOR Toby LaFrance CITY CENTER DEVELOPMENT AGENCY City of Tigard 1 13125 Hall Blvd.' Tigard, OR 97223 1 503 - 639 -4171 3 41111 X111'1 GROVE, MUELLER & SWANK, P.C. CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTAN l S 475 Cottage Street NE, Suite 200, Salem, Oregon 97301 (503) 581 -7788 INDEPENDENT ACCOUNTANT'S REVIEW REPORT Honorable Mayor and Council Members Tigard City Center Development Agency 13125 Hall Boulevard Tigard, Oregon 97223 We have reviewed the accompanying financial statements of the governmental activities and each major fund of the Tigard City Center Development Agency (a component unit of the City of Tigard, Oregon) as of and for the year ended June 30, 2009, which collectively comprise the Agency's basic financial statements, as listed in the table of contents. Our review was made in accordance with Statements of Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the District's management. A review consists principally of inquiries of the Agency's personnel and analytical procedures applied to fmancial data. It is substantially less in scope than an audit in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the fmancial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying fmancial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America.. Management's discussion and analysis is not a required part of the basic financial statements, but is supplementary information required by accounting standards generally accepted in the United States of America. We have applied certain limited procedures that consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplementary information. However, we did not audit or review the information and express no opinion or assurance on it. Our review was made for the purpose of expressing limited assurance that there are no material modifications that should be made to the basic fmancial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America. The supplementary information is not a required part of the basic financial statements, but is supplementary information required by accounting principles generally accepted in the United States of America. Such information 4 has been subjected to the inquiry and analytical procedures applied in the review of the basic financial statements and we did not become aware of any material modifications that should be made to such information. GROVE, MUELLER & SWANK, P.C. CERTIFIED PUBLIC ACCOUNTANTS / By: +. Charles A. Swank, A Shareholder January 25, 2010 5 Management's Discussion and Analysis As part of this Annual Financial Report, the Tigard City Center Development Agency (Agency) offers readers this narrative overview and analysis of the financial activities of the Agency for the fiscal year ended June 30, 2009. It focuses on significant financial issues, major financial activities, and resulting changes in financial positions, 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 • There were expenses of $39,603 for FY 2008 -09. The payments were for development and design of the downtown area as well as property relocation services. • The Agency recognized $120,642 in revenue from property taxes and 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 Assets presents information on all of the Agency'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 Agency is improving or deteriorating. The Statement of Activities presents information on how the Agency's net assets changed during the most recent fiscal year. All changes in net assets 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. 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 activities in which costs are covered through user fees or charges. 6 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 two separate governmental funds consisting of the Urban Renewal Debt Service Fund and the Urban Renewal Capital Projects Fund. Information is presented separately in the governmental fund 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 assets may serve over time as a useful indicator of the Agency's financial position. In the case of the Agency, assets decreased due to the first loan from the City of Tigard for capital projects. Tigard City Center Development Agency Statement of Net Assets June 30, Governmental Activities 2009 2008 ASSETS: Current and other assets $ 187,553 $ 39,662 Property taxes receivable 3,695 - Capital assets 256,046 Total assets 447,294 39,662 LIABILITIES: Other liabilities 2,977 - Long-term debt 323,616 - Total liabilities 326,593 - NET ASSETS: Investment in capital assets, net of related debt (39,603) - Restricted 160,304 39,662 Total net assets $ 120,701 $ 39,662 7 Tigard City Center Development Agency Governmental Activities Change Net Assets For the Year Ended June 30, REVENUES: 2009 2008 General revenues: Property taxes $ 117,744 $ 38,469 Interest earnings 2,898 1,193 Total revenues 120,642 39,662 EXPENSES: Capital projects 39,603 - Excess (deficiency) of revenues over expenses 81,039 39,662 Change in net assets 81,039 39,662 Net assets - beginning 39,662 Net assets - ending $ 120,701 $ 39,662 Capital Assets As of June 30, 2009 the Agency had invested $256,046 in capital assets as reflected in the following table. Land $ 256,046 The Agency invested in land right -of -way purchases in order to construct improvements in the Downtown Tigard area per the Urban Renewal Plan. Economic Factors and Next Year's Budget The Tigard City Center Development Agency budget consists of two funds: The Capital Projects Fund and the Debt Service Fund. The Capital Projects Fund is supported by loans from the City of Tigard. These loans will be repaid with interest once the District begins generating enough tax increment revenue. The fund supports portions of two projects: that portion of the Burnham Street project that is directly attributable to the Agency's plans for downtown, including wider sidewalks and the installation of street furniture and medians, and the local match to the Metro Green Street grant for the design of the Main Street Improvements. The Debt Service Fund reflects the revenues anticipated to be generated by the growth in the assessed value of the urban renewal district. In FY 2009 -10 we expect that increment to be $177,004 which is reflective of the anticipated growth in the assessed value of the District. This fund also contains a beginning fund balance of $157,579, which represents the tax increment collected in FY 2007 -08 and FY 2008 -09. Under state law, these revenues may only be used for the repayment of indebtedness. 8 Under the Intergovernmental Agreement (IGA) between the Agency and the City of Tigard, loans from Tigard to the Agency are repaid in ten equal payments on the principle starting ten years after the loan; however, interest payments start in the second year after the loan. In FY 2008 -09, the Agency took its first loan from Tigard General Fund in the amount of $323,616. Since the IGA with Tigard states that interest payments start in the second year after the loan, no payments will be necessary until FY 2010 -11 and no loan repayments are budgeted in FY 2009 -10. 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 Financial and Information Services Director, City of Tigard, 13125 SW Hall Blvd., Tigard, Oregon 97223. 9 Basic Financial Statements 10 Tigard City Center Development Agency Statement of Net Assets June 30, 2009 Governmental Activities ASSETS: Current and other assets $ 187,553 Property taxes receivable 3,695 Capital assets 256,046 Total assets 447,294 LIABILITIES: Other liabilities 2,977 Long -term debt 323,616 Total liabilities 326,593 NET ASSETS: Investment in capital assets, net of related debt (39,603) Restricted for debt service 160,304 Total net assets $ 120,701 See independent accountant's review report and notes to financial statements 11 Tigard City Center Development Agency Statement of Activities Year Ended June 30, 2009 Net (Expense) /Revenue and Change in Net Program Revenues Assets Total Charges for Governmental Functions /Programs Expenses Services Activities Governmental activities: Community development $ 39,603 $ - $ 39,603 Total governmental activities $ 39,603 $ - $ 39,603 General revenues: Property taxes 117,744 Interest earnings 2,898 Total general revenues 120,642 Change in net assets 81,039 Net assets - beginning 39,662 Net assets - ending $ 120,701 See independent accountant's review report and notes to financial statements 12 Tigard City Center Development Agency Balance Sheet - Governmental Funds June 30, 2009 Total Debt Capital Governmental Service Projects Funds ASSETS: Cash and investments $ 156,609 $ 30,944 $ 187,553 Property taxes receivable 3,695 - 3,695 Total assets $ 160,304 $ 30,944 $ 191,248 LIABILITIES AND FUND BALANCES: LIABILITIES: Accounts payable and accrued liabilities $ - $ 2,977 $ 2,977 Deferred revenues: Property taxes 2,725 - 2,725 Total liabilities 2,725 2,977 5,702 FUND BALANCES: Unreserved 157,579 27,967 185,546 Total fund balances 157,579 27,967 185,546 Total liabilities and fund balances $ 160,304 $ 30,944 Capital assets used in governmental activities are not financial resources and are not reported in the funds. 256,046 Long -term assets not available to pay for current - period expenditures and, therefore, are deferred in the funds: Property taxes earned but not available 2,725 Long -term liabilities - not reported in funds: Loan from City of Tigard, not due and payable in the current period (323,616) Net Assets of Governmental Activities $ 120,701 See independent accountant's review report and notes to financial statements 13 Tigard City Center Development Agency Statement of Revenues and Expenditures - Governmental Funds Year Ended June 30, 2009 Total Debt Capital Governmental Service Projects Funds REVENUES: Taxes $ 115,019 $ - $ 115,019 Interest earnings 2,898 - 2,898 Total revenues 117,917 - 117,917 EXPENDITURES: Capital projects - 295,649 295,649 Change in fund balance before other financing sources: 117,917 (295,649) (177,732) Other financing sources: Proceeds from issuance of debt - 323,616 323,616 Change in fund balance 117,917 27,967 145,884 FUND BALANCE, BEGINNING OF YEAR 39,662 - 39,662 FUND BALANCE, END OF YEAR $ 157,579 $ 27,967 $ 185,546 Net change in fund balances - total governmental funds $ 145,884 Governmental funds report capital outlays as expenditures while governmental activities report depreciation expense to allocate those expenditures over the life of the assets. Expenditures for capitalized assets 256,046 Property taxes reported in the government -wide as revenue. 2,725 Other financing sources reported in the government - wide statements as a liability. (323,616) Change in Net Assets of Governmental Activities $ 81,039 See independent accountant's review report and notes to financial statements 14 Notes to Basic Financial Statements 15 Summary of Significant Accounting Policies: Year Ended June 30, 2009 The financial statements of the Tigard City Center Development Agency (Agency) 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 Tigard City Center Development Agency 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 Tigard City Center Development Agency is a legally separate entity, which is governed by a board comprised of the City Council, 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 a debt service fund and a capital projects fund. 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. The Agency boundaries include primarily the City's central business district, general commercial district and professional commercial district. 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 assets 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 and revenues are clearly identifiable with a specific function. All costs are supported by general revenues which include property taxes and interest earnings. 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. 16 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, liabilities, fund equity, revenues and expenditures /expenses. Professional standards set forth minimum criteria (percentage of the assets liabilities, 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 Urban Renewal Debt Service Fund accounts for the accumulation of resources and payments for long -term debt related to the Tigard City Center Development Agency. The Urban Renewal Capital Projects Fund accounts for the acquisition and development of capital assets related to the Tigard City Center Development Agency. Measurement Focus and Basis of Accounting Measurement focus is a term used to describe which transactions are recorded with 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 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. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, long -term debt and compensated absences are recorded only when payment is due. 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. Cash and Investments For purposes of the statements of cash flows, the Agency considers cash equivalents as all highly liquid debt instruments purchased with maturity of three months or less. Investments included in cash and cash equivalents are reported at fair value. 17 Capital Assets Capital assets, which include property, plant, equipment and infrastructure assets (e.g. roads, pathways, street lights, etc.) are reported in the applicable governmental type activities columns 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. Donated assets are recorded at estimated fair market value as of the date of the donation. Capital assets are defined 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. Other costs for repairs and maintenance are expensed as incurred. Depreciation on exhaustible assets is recorded as an allocated expense in the Statement of Activities with accumulated depreciation reflected in the Statement of Net Assets and is provided on the straight -line basis over the following estimated useful lives: Asset Years Buildings and improvements 25 - 40 Improvements other than buildings 10 - 20 Utility systems 25 - 40 Infrastructure 20 - 40 Fund Equity 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 use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. The Agency currently has no designations of fund balance. 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. 1. 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 City Manager that a budget may be prepared. In June, the proposed budget is presented to the City Council for approval. The Council holds public hearings and a final budget must be prepared and adopted no later than June 30. 18 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. 2. Cash and Investments: The Agency's cash and investments reported on the statement of net assets 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. At June 30, 2009 the Agency's share of the City's cash and investment pool totaled $187,553. 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. 3. 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, 2009. 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. 5. Capital Assets: Capital assets include land right -of -way purchases for the Burnham Street reconstruction, which includes plans for wider sidewalks, landscaped medians, pedestrian crossings and on- street parking. Balance Balance July 1, 2008 Additions Depreciation June 30, 2009 Land $ - $ 256,046 $ - $ 256,046 6. Long -term Debt: The Agency received a loan of $323,616 from the City of Tigard for urban renewal projects approved in the Urban Renewal Plan. The interest rate calculated for the loan is based on the same average rate as that earned on other funds invested by the City, which is currently 1 %. 19 Tigard City Center Development Agency Schedule of Long -Term Debt Transactions For the fiscal year ended June 30, 2009 Debt Transactions Interest Outstanding Outstanding June 30, 2008 Additions Paid June 30, 2009 Paid Loan from City of Tigard for urban renewal projects. Annual interest only payments starting June 30, 2011. Annual premium payments starting June 30, 2019. $ - $ 323,616 $ - $ 323,616 $ Future debt service requirements are as follows: Fiscal Year Ending June 30 Principal Interest Total 2010 $ - $ - $ - 2011 - 3,236 3,236 2012 - 3,236 3,236 2013 - 3,236 3,236 2014 - 3,236 3,236 2015 -2019 32,362 16,181 48,543 2020 -2024 161,808 11,327 173,135 2025 -2028 129,446 3,236 132,682 $ 323,616 $ 43,688 $ 367,304 See independent accountant's review report 20 Supplementary Data 21 Tigard City Center Development Agency Urban Renewal Agency Debt Service Fund Schedule of Revenues and Expenditures - Budget and Actual For the fiscal year ended June 30, 2009 Variance Budgeted Amounts Actual Over REVENUES: Original Final Amounts (Under) Property taxes $ 41,000 $ 41,000 $ 115,019 $ 74,019 Interest earnings 3,000 3,000 2,898 (102) Total revenues 44,000 44,000 117,917 73,917 EXPENDITURES: Debt service 80,000 80,000 - 80,000 Change in fund balance (36,000) (36,000) 117,917 153,917 FUND BALANCE BEGINNING OF YEAR 40,750 40,750 39,662 (1,088) FUND BALANCE END OF YEAR $ 4,750 $ 4,750 $ 157,579 $ 152,829 See independent accountant's review report 22 Tigard City Center Development Agency Urban Renewal Agency Capital Projects Fund Schedule of Revenues and Expenditures - Budget and Actual For the fiscal year ended June 30, 2009 Variance Budgeted Amounts Actual Over REVENUES: Original Final Amounts (Under) Intergovernmental revenues $ 380,000 $ 380,000 $ - $ (380,000) EXPENDITURES: Capital projects 379,269 379,269 295,649 83,620 Change in fund balance before other financing sources (uses) 731 731 (295,649) (296,380) Other financing sources (uses): Proceeds from issuance of debt - - 323,616 323,616 Change in fund balance 731 731 27,967 27,236 FUND BALANCE BEGINNING OF YEAR - - - FUND BALANCE END OF YEAR $ 731 $ 731 $ 27,967 $ 27,236 See independent accountant's review report 23 Tigard City Center Development Agency Urban Renewal Agency Debt Service Fund Schedule of Property Tax Transactions and Outstanding Balances For the fiscal year ended June 30, 2009 Property Levy as Interest, Property Taxes Extended Discounts Taxes Year of Receivable by and Receivable Levy July 1, 2008 Assessor Adjustments Turnovers June 30, 2009 2008 -09 $ - $ 120,906 $ (3,209) $ 114,002 $ 3,695 See independent accountant's review report 24 Tigard City Center Development Agency Urban Renewal Agency Debt Service Fund Schedule of Future Debt Service Requirements For the fiscal year ended June 30, 2009 Future debt service requirements are as follows: Fiscal Year Ending June 30 Principal Interest Total 2010 $ - $ - $ - 2011 - 3,236 3,236 2012 - 3,236 3,236 2013 - 3,236 3,236 2014 - 3,236 3,236 2015 -2019 32,362 16,181 48,543 2020 -2024 161,808 11,327 173,135 2025 -2028 129,446 3,236 132,682 $ 323,616 $ 43,688 $ 367,304 See independent accountant's review report 25 TIGARD CITY CENTER DEVELOPMENT AGENCY ACCOUNTANT'S REVIEW COMMENTS AND DISCLOSURES REQUIRED BY STATE REGULATIONS YEAR ENDED JUNE 30, 2009 Oregon Administrative Rules 162 -40 -000 through 162 -40 -160 of the Minimum Standards for Review 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 annual financial reports. Required comments and disclosures related to our review of such financial statements and schedules are set forth on the following pages. Significant Accounting Policies The significant accounting policies followed in preparing the Agency's financial statements are summarized in the notes to the basic financial statements. Organization and Fund Structure The organization and fund structure of the Agency is documented on the title page and in the notes to the basic financial statements. Internal Accounting Control We have reviewed the financial statements of the Tigard City Center Development Agency as of and for the year ended June 30, 2009, and have issued our report thereon dated January 25, 2010. In accordance with Statements of Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants, we performed inquiry and analyzed procedures related to the accounting records and adequacy of accounting and internal control systems. No material weaknesses were noted. Indebtedness The Agency has no general obligation bonded indebtedness. We noted no defaults in principal, interest, sinking fund, or redemption provisions with respect to any of the City's liabilities, and no breach of the bond agreements, at June 30, 2009. Adequacy of Collateral Securing Depository Balances We are not aware of any failure to comply with Oregon Revised Statutes Chapter 295 in relation to deposit accounts. Budget Compliance We are not aware of any failure to comply with Local Budget Law (ORS 294) in the preparation, adoption and execution of the budget and tax levies for fiscal years ending June 30, 2009 and 2010. Insurance and Fidelity Bonds We are not aware of any failure to comply with legal requirements relating to insurance coverage at June 30, 2009. Investments We are not aware of any failure to comply with ORS 294, as it pertains to investment of public funds, during the year ended June 30, 2009. 26 TIGARD CITY CENTER DEVELOPMENT AGENCY ACCOUNTANT'S REVIEW COMMENTS AND DISCLOSURES REQUIRED BY STATE REGULATIONS (Continued) YEAR ENDED JUNE 30, 2009 Public Contracting and Purchasing We are not aware of any failure to comply with the legal requirements relating to public contracting, purchasing procedures and construction of public improvements. Highway Funds The Agency received no revenue from taxes on motor fuel under Article IX, Section 3a of the Oregon Constitution. Programs Funded from Outside Sources and Financial Reporting Requirements The Agency had no programs funded from outside sources. This report is intended for the information and use of the City Council and management of the Tigard City Center Development Agency and is not intended to be and should not be used by anyone than those specific parties. GROVE, MUELLER & SWANK, P.C. CERTIFIED PUBLIC ACCOUNTANTS By s. _ �� Charles A. Swank, A Shareholder January 25, 2010 27