CCDA Report FY Ending June 30, 2014 14 al Ci Center Development Agency
CCDA The City of Tigard's Urban Renewal Agency
Annual Financial Report I For the fiscal year ended June 30, 2014
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TIGARD CITY CENTER DEVELOPMENT AGENCY
(A Component Unit of the City of Tigard, Oregon)
ANNUAL FINANCIAL REPORT
For the fiscal year ended June 30, 2014
Prepared by:
City of Tigard — Financial and Information Services Department
City Center Development Agency
Table of Contents
List of Officials 1
Independent Auditor's Report 2
Management's Discussion and Analysis 5
Basic Financial Statements
Government-Wide Financial Statements
Statement of Net Position 10
Statement of Activities 11
Fund Financial Statements—Governmental Funds
Balance Sheet 12
Statement of Revenues and Expenditures 13
Notes to Basic Financial Statements 15
Required Supplementary Information
Schedule of Revenues and Expenditures—Budget and Actual:
Urban Renewal Agency Capital Projects Fund 21
Other Supplementary Information
Schedule of Revenues and Expenditures—Budget and Actual:
Urban Renewal Agency Debt Service Fund 23
Schedule of Property Tax Transactions and Outstanding Balances:
Urban Renewal Agency Debt Service Fund 24
Independent Auditor's Report Required by Oregon State Regulations 25
Tigard City Center Development Agency
Fiscal Year 2013-2014
CITY CENTER DEVELOPMENT AGENCY BUDGET COMMITTEE
Don Fisher John L. Cook
Melody Graeber Gretchen Buehner
Melanie Boekee Marland Henderson
Cameron James Jason Snider
Clifford Rone Marc Woodard
CITY CENTER DEVELOPMENT AGENCY BOARD
John L. Cook, Chair
Gretchen Buehner Jason Snider
Marc Woodard Marland Henderson
EXECUTIVE DIRECTOR
Marty Wine
COMMUNITY DEVELOPMENT DIRECTOR
Kenny Asher
REDEVELOPMENT PROJECT MANAGER for DOWNTOWN
Sean Farrelly
FINANCE and INFORMATION SERVICES DIRECTOR
Toby LaFrance
CITY CENTER DEVELOPMENT AGENCY
City of Tigard 1 13125 Hall Blvd. I Tigard,OR 97223 1 503-639-4171
1
0-0 ik INDEPENDENT AUDITOR'S REPORT
0 k Board Members
Tigard City Center Development Agency
(A component unit of the City of Tigard, Oregon)
1 Tigard, Oregon
REPORT ON THE FINANCIAL STATEMENTS
TKIIII We have audited the accompanying financial statements of the governmental
activities and each major fund of the Tigard City Center Development Agency (the
Agency), a component unit of the City of Tigard, Oregon as of and for the year ended
Talbot,Korvola June 30, 2014, and the related notes to the financial statements, which collectively
&Warwick,LLP comprise the Agency's basic financial statements as listed in the Table of Contents.
Certified Public Accountants
uConsuitants MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
ACHIEVE MORE Management is responsible for the preparation and fair presentation of these
financial statements in accordance with accounting principles generally accepted in
the United States of America; this includes the design, implementation, and
4800 Meadows Road,Suite 200 maintenance of internal control relevant to the preparation and fair presentation of
Lake Oswego,Oregon 97035-4293 financial statements that are free from material misstatement, whether due to fraud
P 503.274.2849 or error.
F 503.274.2853
wwwtkw.com AUDITOR'S RESPONSIBILITY
Our responsibility is to express opinions on these financial statements based on our
audit. We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts
and disclosures in the financial statements. The procedures selected depend on the
auditor's judgment, including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements 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 entity's internal control.
Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinions.
ndependa_„�vD,.,ned ,ereer I
MCGLADREY ALLIANCE Mcc adrey
2
The McGladrey Al lance is a premier affiliation of independent accounting and consulting firms. The McGladrey Alliance member firms maintain their name,
autonomy and Independence and are responsible for their own client fee arrangements,delivery of services and maintenance of client relationships.
INDEPENDENT AUDITOR'S REPORT (Continued)
Board Members
Tigard City Center Development Agency
(A component unit of the City of Tigard, Oregon)
Page 2
OPINIONS
In our opinion, the 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, 2014, 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.
OTHER MATTERS
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that
Management's Discussion and Analysis, as listed in the Table of Contents, be presented to
supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board who
considers it to be an essential part of financial reporting for placing the basic financial
statements in an appropriate operational, economic, or historical context. We have applied
certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which 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.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Agency's basic financial statements. The accompanying budgetary
comparison information for the Urban Renewal Agency Capital Projects Fund, as listed in the
Table of Contents as Required Supplementary Information is not a required part of the basic
financial statements and is presented for purposes of additional analysis, and 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. 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. This 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 Required
Supplementary Information is fairly stated, in all material respects, in relation to the basic
financial statements as a whole.
3
INDEPENDENT AUDITOR'S REPORT (Continued)
Board Members
Tigard City Center Development Agency
(A component unit of the City of Tigard, Oregon)
Page 3
OTHER MATTERS (Continued)
Other 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 other schedules, as listed in
the Table of Contents as Other Supplementary Information, are presented for purposes of
additional analysis and are not a required part of the basic financial statements. The Other
Supplementary 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. Such 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 Other Supplementary Information
is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
OTHER REPORTING REQUIRED BY OREGON MINIMUM STANDARDS
In accordance with Minimum Standards for Audits of Oregon Municipal Corporations, we have
also issued our report dated December 16, 2014, on our consideration of the Agency's
compliance with certain provisions of laws and regulations, including the provisions of Oregon
Revised Statutes as specified in Oregon Administrative Rules. 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.
TALBOT, KORVOLA&WARWICK, LLP
By: I
Timothy R. illette, P.; ner
Lake Oswego, Oregon
December 16, 2014
4
Management's Discussion and Analysis
As part of this Annual Financial Report,the Tigard City 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 30,2014. 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
$1,045,338. Of this amount, $848,513 is restricted for the repayment of debt and $51,870 is
restricted for capital projects.
• The agency's net position increased $102,770 over the course of the year, primarily due to property
tax revenue exceeding expenses.
• In the fund financial statements, there were expenditures of$971,461 for FY 2013-14. The payments
in the Capital Projects Fund ($610,461) were for development and design of the downtown area as
well as consulting for potential real estate purchases. The payments in the Debt Service Fund
($361,000)were for principal and interest payments to the City of Tigard.
• Also in the fund financial statements, the agency recognized $458,916 in revenue from property
taxes,miscellaneous revenue 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 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.
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.
5
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. The Capital Projects Fund functions as the agency's general
operations fund. Information for each fund is presented separately 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 increased as revenues,primarily property taxes, exceeded expenses and resulted
in an increase in cash and receivables.
Tigard City Center Development Agency
(A Component Unit of the City of Tigard,Oregon)
Governmental Activities
Statement of Net Position
June 30,
2014 2013
ASSETS:
Cash and investments $ 835,967 $ 1,127,082
Receivables 90,193 14,198
Capital assets 949,750 693,642
Total assets 1,875,910 1,834,922
LIABILITIES:
Other liabilities 25,777 90,569
Long-term debt 804,795 801,785
Total liabilities 830,572 892,354
NET POSITION:
Investment in capital assets 144,955 (108,143)
Restricted for debt service 848,513 850,249
Restricted for capital projects 51,870 200,462
Total net position $ 1,045,338 $ 942,568
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Tigard City Center Development Agency
(A Component Unit of the City of Tigard,Oregon)
Governmental Activities
Change in Net Position
For the Year Ended June 30,
REVENUES: 2014 2013
General revenues:
Property taxes $ 331,148 $ 290,619
Intergovernmental revenue 100,000 -
Miscellaneous 869 1,803
Interest earnings 28,116 4,320
Total revenues 460,133 296,742
EXPENSES:
Capital projects 354,353 146,114
Interest on long-term debt 3,010 6,559
Total expenses 357,363 152,673
Change in net position 102,770 144,069
Net position-beginning 942,568 798,499
Net position-ending $ 1,045,338 $ 942,568
Capital Assets and Debt Administration
Capital Assets
As of June 30,2014 the agency had invested$949,750 in capital assets as reflected in the following table:
Capital Assets at June 30
Governmental Activities
2014 2013
Land $256,046 $256,046
Infrastructure 444,712 200,000
Construction in progress 264,011 242,607
Accumulated depreciation (15,019) (5,011)
Total $949,750 $693,642
The agency invested in land right-of-way purchases in order to construct improvements, such as expanded
sidewalks, signage and road design in the Downtown Tigard area per the Urban Renewal Plan. Additional
information on the agency's capital assets can be found on pages 16-18 of this report.
7
Debt
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 principal starting ten years after the loan;
however, interest payments start in the second year after the loan. In FY 2013-14, the agency took its sixth
loan from Tigard General Fund in the amount of$361,000. The Debt Service Fund elected to make an early
repayment of$357,990 during the year. Additional information on the agency's debt can be found on pages
18-19 of this report.
Budgetary Highlights
The Tigard City Center Development Agency budget consists of two funds: The Capital Projects Fund,
which functions as the agency's general operations 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 agency
begins generating enough tax increment revenue. The focus of the fiscal year 2013-14 budget was parking
lots, signage, continuation of the facade improvement program and real estate consulting. These projects are
on-going and have been carried over into the 2014-15 budget. One budget adjustment was necessary during
the year to recognize receipt of a $100,000 construction excise tax grant used to fund a pre-development
feasibility study for the downtown area.
The budget for fiscal year 2014-15 includes continuation of the items listed above, along with funding for
improvements to vacant properties that could house restaurants and targeted retail businesses on Main Street.
In addition,various marketing and development opportunities will be pursued.
Economic Factors
The Tigard City Center Development Agency is a relatively young urban renewal agency. Approved by
voters in 2006, the agency started at the beginning of the recession that has contributed to very slow growth
in property values. Urban renewal agencies always start slow since revenue is generated by incremental
increases in property values, and the timing of the recession is causing the agency to grow at an even slower
pace than originally anticipated. 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. In
addition, up to $1.7 million of the parks levy approved by voters in November 2010 can be used to purchase
property for parks and make improvements to that property in downtown.
In addition to funding from outside sources, the agency is approaching a funding base that will allow it to
secure private financing. In fiscal year 2014-15 staff will pursue outside funding for any large projects that are
planned in the area.
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.
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Basic Financial Statements
9
Tigard City Center Development Agency
Statement of Net Position
June 30, 2014
Governmental
Activities
ASSETS:
Cash and investments $ 835,967
Receivables 90,193
Capital assets 949,750
Total assets 1,875,910
LIABILITIES:
Accounts payable and other accrued liabilities 25,777
Long-term obligations 804,795
Total liabilities 830,572
NET POSITION:
Net investment in capital assets 144,955
Restricted for debt service 848,513
Restricted for capital projects 51,870
Total net position $ 1,045,338
The accompanying notes are an integral part of the basic financial statements.
10
Tigard City Center Development Agency
Statement of Activities
Year Ended June 30, 2014
Net
(Expense)/Revenue
and Change in Net
Program Revenues Position
Total
Operating Grants Governmental
Functions/Programs Expenses and Contributions Activities
Governmental activities:
Community development $ 354,353 $ 100,000 $ (254,353)
Interest on long-term debt 3,010 - (3,010)
Total governmental activities $ 357,363 $ 100,000 (257,363)
General revenues:
Property taxes 331,148
Miscellaneous 869
Interest earnings 28,116
Total general revenues 360,133
Change in net position 102,770
Net position-beginning 942,568
Net position-ending $ 1,045,338
The accompanying notes are an integral part of the basic financial statements.
11
Tigard City Center Development Agency
Balance Sheet - Governmental Funds
June 30, 2014
Total
Capital Debt Governmental
Projects Service Funds
ASSETS:
Cash and investments $ 2,647 $ 833,320 $ 835,967
Property taxes receivable - 15,193 15,193
Other receivables 75,000 - 75,000
Total assets $ 77,647 $ 848,513 $ 926,160
LIABILITIES:
Acwunts payable and accrued liabilities $ 25,777 $ - $ 25,777
Total liabilities 25,777 - 25,777
DEFERRED INFLOWS OF RESOURCES:
Unavailable revenues
Property taxes - 13,955 13,955
Total deferred inflows of resources - 13,955 13,955
FUND BALANCES:
Restricted for debt service - 834,558 834,558
Restricted for capital projects 51,870 - 51,870
Total fund balances 51,870 834,558 886,428
Total liabilities,deferred inflows
of resources and fund balances $ 77,647 $ 848,513
Capital assets used in governmental activities
are not finandal resources and are not reported
in the funds. 949,750
Long-term assets are not available
to pay for current-period
expenditures and,therefore,are
deferred in the funds:
Property taxes earned but not available 13,955
Long-term liabilities-not reported
in funds:
Loan from City of Tigard,not due
and payable in the current period (804,795)
Net Position of Governmental Activities $ 1,045,338
The accompanying notes are an integral part of the basic financial statements.
12
Tigard City Center Development Agency
Statement of Revenues and Expenditures - Governmental Funds
Year Ended June 30, 2014
Total
Capital Debt Governmental
Projects Service Funds
REVENUES:
Taxes $ - $ 329,931 $ 329,931
Intergovernmental revenues 100,000 - 100,000
Miscellaneous 869 - 869
Interest earnings - 28,116 28,116
Total revenues 100,869 358,047 458,916
EXPENDITURES:
Capital projects 610,461 - 610,461
Debt service
Prindpal - 357,990 357,990
Interest - 3,010 3,010
Total expenditures 610,461 361,000 971,461
Change in fund balance
before other financing sources: (509,592) (2,953) (512,545)
Other financing sources:
Proceeds from borrowing 361,000 - 361,000
Change in fund balance (148,592) (2,953) (151,545)
FUND BALANCE-BEGINNING 200,462 837,511 1,037,973
FUND BALANCE-ENDING $ 51,870 $ 834,558 $ 886,428
Net dzange in fund balances-total governmental funds $ (151,545)
Governmental funds report capital outlays as expenditures
while governmental activities report depredation expense
to allocate those expenditures over the life of the assets.
Expenditures for capitalized assets 266,116
Depredation reported in the government-wide statements (10,008)
Property taxes that do not provide current finandal resources 1,217
Long-tLun liabilities not reported in the funds (361,000)
Prindpal payments expensed on the fund fnandal statements 357,990
Change in Net Position of Governmental Activities $ 102,770
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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1. Summary of Significant Accounting Policies:
Year Ended June 30,2014
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 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.
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 equity,revenues and expenditures.
15
1. Summary of Significant Accounting Policies Cont'd:
Professional standards set forth minimum 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 Urban Renewal Debt Service Fund accounts for the accumulation of resources and payments for
long-term borrowings 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 and serves as the agency's general operations
fund.
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 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.
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 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.
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.
16
1. Summary of Significant Accounting Policies Cont'd:
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. 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
Fund Balance
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. All of the agency's fund balance is restricted under state law.
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. At June 30, 2014 the agency's share of the city's cash and investment pool totaled
$835,967. 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.
17
4. 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 30,2014.
5. 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.
6. Capital Assets:
Capital assets include land purchases for the Burnham Street reconstruction, which includes wider
sidewalks, landscaped medians, pedestrian crossings, Main Street gateway improvements and a parking
lot on Burnham Street.
Balance Balance
June 30,2013 Additions Deletions Transfers June 30, 2014
Land $ 256,046 $ - $ - $ - $ 256,046
Construction in Progress 242,607 266,116 - (244,712) 264,011
Infrastructure 200,000 - - 244,712 444,712
Total cost 698,653 266,116 - - 964,769
Depreciation
Infrastructure (5,011) (10,008) - - (15,019)
Capital assets,net $ 693,642 $ 256,108 $ - $ - $ 949,750
7. Long-term Borrowing:
The agency received an additional amount of $361,000 in the current year under an existing loan
agreement 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 0.54%. Interest-only payments are scheduled to be paid to the
city prior to July 1, 2016. During the fiscal year ending June 30, 2024 the agency will begin making
principal payments to the city. 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
intergovernmental agreement, the city may forgive or reduce the interest and/or principal due from the
agency. The agency may also repay the debt early. In fiscal year 2013-2014 the agency elected to repay
$357,990 of outstanding principal.
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7. Long Term Borrowing Cont'd:
Tigard City Center Development Agency
Schedule of Long-Term Borrowing Transactions
For the fiscal year ended June 30,2014
Borrowing Transactions Interest
Loan from City of Tigard Outstanding Outstanding
for urban renewal projects June 30,2013 Additions Paid June 30,2014 Paid
Loan#3 June 30,2011 $ 151,941 $ - $ (151,941) $ - $ 760
Loan#4 June 30,2012 369,844 - (206,049) 163,795 2,250
Loan#5 June 30,2013 280,000 - - 280,000 -
Loan#6 June 30,2014 - 361,000 - 361,000
Total $ 801,785 $ 361,000 $ (357,990) $ 804,795 $ 3,010
Future requirements related to long-term borrowing
are as follows:
Fiscal Year
Ending
June 30 Principal Interest Total
2015 $ - $ 2,383 $ 2,383
2016 - 4,332 4,332
2017 - 4,332 4,332
2018 - 4,332 4,332
2019 - 4,332 4,332
2020-2024 15,942 21,661 37,603
2025-2029 361,483 17,693 379,176
2030-2034 390,389 7,093 397,482
2035 36,981 200 37,181
$ 804,795 $ 66,358 $ 871,153
8. Subsequent events:
On September 2,2014, the Agency borrowed $1.3 million from US Bank to buy property located in the
downtown area. On September 5, 2014 the Agency purchased the property located at 9110 SW
Burnham Street in Tigard. The Agency has assumed a lease agreement as the lessor that extends
through July 31,2018 with the option of two additional extensions of three years each.
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Required Supplementary Information
20
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, 2014
Variance
Budgeted Amounts Actual Over
Original Final Amounts (Under)
REVENUES:
Intergovernmental revenue $ - $ 100,000 $100,000 $ -
Miscellaneous - - 869 869
Total revenues - 100,000 100,869 869
EXPENDITURES:
Capital projects 581,000 681,000 610,461 70,539
Change in fund balance
before other financing sources (581,000) (581,000) (509,592) 71,408
Other financing sources:
Proceeds from borrowing 361,000 361,000 361,000 -
Change in fund balance (220,000) (220,000) (148,592) 71,408
FUND BALANCE BEGINNING OF YEAR 220,000 220,000 200,462 (19,538)
FUND BALANCE END OF YEAR $ - $ - $ 51,870 $ 51,870
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Other Supplementary Information
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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, 2014
Variance
Budgeted Amounts Actual Over
Original Final Amounts (Under)
REVENUES:
Property taxes $300,940 $ 300,940 $329,931 $ 28,991
Interest earnings - - 28,116 28,116
Total revenues 300,940 300,940 358,047 57,107
EXPENDITURES:
Debt service payment 361,000 361,000 361,000 -
Reserve for future expenditure 666,388 666,388 666,388
Change in fund balance (726,448) (726,448) (2,953) 723,495
FUND BALANCE BEGINNING OF YEAR 726,448 726,448 837,511 111,063
FUND BALANCE END OF YEAR $ - $ - $ 834,558 $ 834,558
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Urban Renewal Agency Debt Service Fund
Schedule of Property Tax Transactions and Outstanding Balances
For the fiscal year ended June 30, 2014
Property Levy as Interest, Property
Taxes Extended Discounts Taxes
Year of Receivable by and Receivable
Levy June 30,2013 Assessor Adjustments Turnovers June 30,2014
2013-14 $ - $ 340,161 $ (9,800) $ (323,613) $ 6,748
2012-13 6,287 - 43 (3,293) 3,037
2011-12 3,608 - 284 (1,387) 2,505
2010-11 2,798 - 376 (1,347) 1,827
2009-10 1,359 - 36 (352) 1,043
2008-09 65 - (4) (28) 33
$ 14,117 $ 340,161 $ (9,065) $ (330,020) $ 15,193
Levy as extended $ 340,161
Discounts (11,125)
Revenue 329,036
Induded as interest 895
Recorded as property tax revenue $ 329,931
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INDEPENDENT AUDITOR'S REPORT
REQUIRED BY OREGON STATE REGULATIONS
/0 1 Board Members
Tigard City Center Development Agency
/ , (A component unit of the City of Tigard, Oregon)
Tigard, Oregon
TK111 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 Tigard City Center Development Agency (the Agency), a
component unit of the City of Tigard, Oregon as of and for the year ended June 30,
Talbot,Korvola 2014, which collectively comprise the basic financial statements of the Agency and
&Warwick,LLP have issued our report thereon dated December 16, 2014.
Certified Public Accountants
8.Consultants COMPLIANCE
ACHIEVE MORE As part of obtaining reasonable assurance about whether the Agency's financial
statements are free of material misstatement, we performed tests of its compliance
with certain provisions of laws, regulations, contracts, and grants, including the
4800 Meadows Road,Suite 200 provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules
Lake Oswego,Oregon 910354293 162-10-000 through 162-10-320 of the Minimum Standards for Audits of Oregon
P503.274.2849 Municipal Corporations, noncompliance with which could have a direct and material
F503.274.2853 effect on the determination of financial statement amounts. However, providing an
www.tkw.com 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:
• Deposit of public funds with financial institutions (ORS Chapter 295).
• Indebtedness limitations, restrictions and repayment.
• Budgets legally required (ORS Chapter 294).
• Insurance and fidelity bonds in force or required by law.
• Authorized investment of surplus funds (ORS Chapter 294).
• Public contracts and purchasing (ORS Chapters 279A, 279B, 279C).
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 grants, including the provisions of Oregon
Revised Statutes as specified in Oregon Administrative Rules 162-10-000 through
162-10-320 of the Minimum Standards for Audits of Oregon Municipal
Corporations.
An dApndently o.vneS Menbe
MCA L,A,DREYALLIANCE McGlaarey
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The,lcGladrey Alliance is a premier affiliation of independent accounting and consulting firms, The McGladrey Alliance member firms maintain their name,
autonomy and independence and are responsible for their own client fee arrangements,delivery of services and maintenance of client relationships.
INDEPENDENT AUDITOR'S REPORT
REQUIRED BY OREGON STATE REGULATIONS (Continued)
Page 3
OAR 162-10-0230 INTERNAL CONTROL
In planning and performing our audit of the financial statements, we considered the Agency's
internal control over financial reporting to determine the 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.
RESTRICTION ON USE
This report is intended solely for the information and use of the Board Members, Oregon
Secretary of State Audits Division, and management and is not intended to be and should not
be used by anyone other than these specified parties.
7,4dirytKee//(754 & Wei444 1,a4
Lake Oswego, Oregon
December 16, 2 014
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