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City Council Packet - 02/20/2018 IN - ' City=of Tigard Tigard Business/Workshop Meeting—Agenda TIGARD TIGARD CITY COUNCIL MEETING DATE AND TIME: February 20, 2018 - 6:30 p.m. MEETING LOCATION: City of Tigard-Town Hall- 13125 SW Hall Blvd.,Tigard, OR 97223 PUBLIC NOTICE: Times noted are estimated. Assistive Listening Devices are available for persons with impaired hearing and should be scheduled for Council meetings by noon on the Monday prior to the Council meeting. Please call 503-718-2419 (voice) or 503-684-2772 (IDD -Telecommunications Devices for the Deaf). Upon request, the City will also endeavor to arrange for the following services: • Qualified sign language interpreters for persons with speech or hearing impairments; and • Qualified bilingual interpreters. Since these services must be scheduled with outside service providers,it is important to allow as much lead time as possible. Please notify the City of your need by 5:00 p.m. on the Thursday preceding the meeting by calling: 503-639-4171, ext. 2410 (voice) or 503-684-2772 (1'DD -Telecommunications Devices for the Deaf). VIEW LIVE VIDEO STREAMING ONLINE: http://live.ti2ard-or.gov Workshop meetings are cablecast on Tualatin Valley Community TV as follows: Replay Schedule for Tigard City Council Workshop Meetings-Channel 28 •Every Sunday at 12 a.m. •Every Monday at 1 p.m. •Every Thursday at 12 p.m. •Every Friday at 10:30 a.m. SEE ATTACHED AGENDA 1111 City of Tigard Tigard Business/Workshop Meeting—Agenda T'EGA Rpt TIGARD CITY COUNCIL MEETING DATE AND TIME: February 20,2018 - 6:30 p.m. MEETING LOCATION: City of Tigard-Town Hall- 13125 SW Hall Blvd.,Tigard, OR 97223 6:30 PM 1. WORKSHOP MEETING A. Call to Order- City Council B. Roll Call C. Pledge of Allegiance D. Call to Council and Staff for Non-Agenda Items 2. RECEIVE UPDATE AND AWARD FROM THE HEAL CAMPAIGN RECOGNIZING TIGARD 6:30 p.m. estimated time 3. REVIEW DOWNTOWN UNIVERSAL PLAZA CONCEPT 6:40 p.m. estimated time 4. EXTERNAL FINANCIAL AUDIT&CAFR PRESENTATION WITH MOSS ADAMS 7:05 p.m. estimated time 5. CONSIDER LOCAL OPTION LEVY BALLOT TITLE ALTERNATIVE 7:35 p.m. estimated time 6. NON AGENDA ITEMS 7. EXECUTIVE SESSION: The Tigard City Council may go into Executive Session. If an Executive Session is called to order,the appropriate ORS citation will be announced identifying the applicable statute.All discussions are confidential and those present may disclose nothing from the Session. Representatives of the news media are allowed to attend Executive Sessions,as provided by ORS 192.660(4),but must not disclose any information discussed.No Executive Session may be held for the purpose of taking any final action or making any final decision. Executive Sessions are closed to the public. 8. ADJOURNMENT 7:55 p.m. estimated time AIS-3399 2. Workshop Meeting Meeting Date: 02/20/2018 Length (in minutes): 10 Minutes Agenda Title: HEAL City Campaign Recognizing Tigard Prepared For: Dana Bennett, City Management Submitted By: Dana Bennett, City Management Item Type: Receive and File Meeting Type: Council Business Meeting - Main Public Hearing: No Publication Date: Information ISSUE Receive an update from staff on some of the City of Tigard's progress as a HEAL City (Healthy Eating Active Living City), and receive a plaque from the HEAL Campaign for achieving the highest level a City can attain within the program. STAFF RECOMMENDATION / ACTION REQUEST Staff recommend that the Mayor accept the plaque on behalf of Council and encourage staff to continue working in ways that help increase access to healthy eating and active living in Tigard, and encourage both residents and staff to live healthy and interconnected lives. KEY FACTS AND INFORMATION SUMMARY HEAL Cities is a joint campaign between the Oregon Public Health Institute and the League of Oregon Cities, with funding provided through Kaiser Permanente. The HEAL Campaign is intended to promote policies that will lead to equitable health outcomes and support the overall well-being of families and businesses within our city. The campaign encourages cities like Tigard to take a more proactive approach to the health of our community. Some of the activities of staff and Council which have led to our attainment of the top ranking within the HEAL Campaign include: Smoke and Vape-free Ordinance, which demonstrates Council support for a healthy community by encouraging a healthier environment for residents and visitors in Tigard. Metzeger School Park Project, which provides food access and education through community gardening. This project included working with the local community to help program the park space. Although the project is not complete, the large community garden space, which contains more than thirty garden beds, has been installed and is in full use. Transportation CIP Prioritization, which ensures that compatibility with our Strategic Vision is part of the prioritization process, emphasizing projects that enhance walkability and/or help people of all ages and abilities to enjoy health interconnected lives. Wellness Committee, which programs an annual calendar that includes informational articles and classes or events around wellness topics in addition to coordination of the annual wellness fair and sponsoring mini-competitions to encourage Tigard staff to engage in their own personal health and wellness. OTHER ALTERNATIVES COUNCIL GOALS, POLICIES, APPROVED MASTER PLANS The HEAL City Campaign is in alignment with the City's Strategic Plan to make Tigard more walkable and to encourage people of all ages and abilities to enjoy health and interconnected lives. DATES OF PREVIOUS COUNCIL CONSIDERATION On April 28, 2015 Council adopted Resolution No.15-14 setting forth the City of Tigard's commitment to healthy living for the community. The resolution acknowledged Tigard's commitment to join the HEAL Cities Campaign and work toward policies that improve local livability and community health and well-being. AIS-3393 3. Workshop Meeting Meeting Date: 02/20/2018 Length (in minutes): 25 Minutes Agenda Title: Review Downtown Universal Plaza Concept Submitted By: Sean Farrelly, Community Development Item Type: Update, Discussion, Direct Staff Meeting Type: Town Center Development Agency Public Hearing: No Publication Date: Information ISSUE Review the concept for "Universal Plaza" on Burnham Street. STAFF RECOMMENDATION / ACTION REQUEST The Board of the TCDA is requested to provide comment on the proposed plaza location and design concepts. KEY FACTS AND INFORMATION SUMMARY Goal 3 of Tigard City Council's Goals and Priorities for 2017-19 is to "Make Downtown Tigard a Place Where People Want to Be," with the sub-goal to "Focus on identifying and acquiring property and developing the Downtown Plaza." The City Center Urban Renewal Plan has a goal to "develop urban spaces that will provide active and passive recreational opportunities for pedestrians and attract residents and visitors to downtown." At their May 16, 2017 meeting, the TCDA Board discussed public spaces in Downtown. The Board directed staff to pursue larger plaza options in addition to the smaller public spaces being planned like Rotary Plaza and Main Street at Fanno. This larger plaza could provide a venue for larger events, like the Tigard Farmer's Market, and feature amenities like a splash pad that would attract people citywide. Staff identified the Agency-owned "Miller property" on Burnham Street as a potential plaza site. The 1.18 acre site has many of the qualities that were identified by urban strategist Michele Reeves for successful public spaces- such as being adjacent to Fanno Creek Park. It also lacks several qualities for a successful plaza location; for example, it is not on Main Street and is not currently adjacent to development that would activate the space (see attached Reeve's 2011 plaza feasibility report). The site is currently leased by Ferguson Plumbing (which has the right to renew its lease through July 2024.) Staff has been in contact with representatives of Ferguson corporate headquarters to inform them that the site is under consideration for a plaza and that relocation benefits would be available if the plaza plan moves forward. Staff engaged Resolve Architecture and Planning to develop a concept for the site. The design considerations for the plaza included: •Activation of the site •Contours of the site •Views from and of the site •Connectivity to Fanno Creek Park and Burnham Street •Budget to construct •Maintenance considerations •Versatility and Identity The concept to be presented to the Board on February 20 is the "Universal Plaza." "Universal" refers to the plaza design incorporating amenities that are usable by people of all ages and abilities and its connection to the natural universe. The design of the plaza is inspired by the Golden Rectangle ratio that occurs in nature and science (e.g. flower petals, shells, spiral galaxies.) The concept features four distinct "paths" with design elements based on the four traditional elements of earth, air, fire and water. The plaza concept includes features that will have educational value. For example, as part of the air theme there would be a kinetic sculpture that would indicate the current air quality. These type of features will make the plaza an ideal destination for school field trips. Educational opportunities would include following the four different "elements paths" (earth, air, etc.) to interact with the interpretive artwork and installations. Students would be able to learn about natural ecosystems through data, art, history and stories. The concept includes a study of how the plaza would function for musical and other events seating up to 900 people. The Tigard Farmers Market with over 60 booths and other events could be accommodated. Parking would be partially provided with a new street connection with twenty-four on-street spaces. These spaces and existing on-street spaces should be able to accommodate typical everyday use of the plaza. This would be supplemented with parking available at City Hall and the Public Works building for larger weekend and evening events. The SW Corridor project may also prove an opportunity for a parking structure with parking spaces available for downtown visitors. If the Board supports the plaza concept, staff will work encourage Ferguson to work with their brokers to find a new location in the area and will begin negotiations for payment of relocation expenses. Subsequent work will include refining the concept and cost estimates, and final design and engineering. Sufficient tax increment from the City Center Urban Renewal District will be available in FY 19-20 to do a borrowing to finance the project. OTHER ALTERNATIVES The Board could direct staff to revise or rethink the plaza concept. COUNCIL GOALS, POLICIES, APPROVED MASTER PLANS Tigard City Council Goals and Priorities 2017-19 Goal 3: Make Downtown Tigard a Place Where People Want to Be. Focus on identifying and acquiring property and developing the Downtown Plaza. •Design and develop Tigard Street Heritage Trailhead plaza as a gathering place and event space. •Complete design and engineering for Main Street at Fanno Creek public space. •Evaluate locations for other plaza/public space, including as part of Civic Center visioning. City Center Urban Renewal Plan Goal 4B: Develop urban spaces that will provide active and passive recreational opportunities for pedestrians and attract residents and visitors to downtown. DATES OF PREVIOUS COUNCIL CONSIDERATION The Board of the CCDA discussed Downtown open spaces at their May 16, 2017 meeting. This is the first time the Universal Plaza concept has been presented to the Board of the TCDA. Attachments Reeves 2011 Plaza Feasibility Report Plaza Concept Plan Package PLAZA SITE REVIEW presented to Tigard City Center Development Agency City Center Advisory Commission „. CIVILIS CONSULTANTS CI\ /I LIJ V I 1310 NW Naito Pkwy, #303 Portland, OR 97209 Consultants 503.867.8465 Rethinking Urban Places michele@michelereeves.com ACKNOWLEDGEMENTS A big thank you to the following people and organizations: City Center Development Agency City Center Advisory Commission City of Tigard Sean Farrelly, Redevelopment Project Manager Laura Conroy, Hillsboro Market Director CIVILISE kcthinxlriy Uinan Plam r -" OVERVIEW Adopted in 2008, the Fanno Creek Park and Plaza Master Plan for the City of Tigard con- tains a vision for the improvement of the existing Fanno Creek Park and calls for the cre- ation of a downtown playa. According to the city, "The Fanno Creek Park and Plaza Master Plan establishes a `Green Heart' identified in the downtown plan by locating the primary open space and plaza between Downtown and the community's unique natural resource — Fanno Creek." The objective of this plan, highlighted visually below, was to "redefine the Downtown through a sustainable, open space network that directly connects daily life to the natural environment. The Downtown Plaza was designed to meet the need for a community gath- ering space for events and everyday use, and the goal of initiating redevelopment under a new Urban Renewal District approved in May of 2006." New Bddge and �' „gpl �� 0 ��i , '/ " , � Boardwalks - r> 's4}' ' New Mixed Use �",J^ r� �r' e e,t, iii,- v._ . .„- - , : / 0,,,, \ ,, \\ , -,. :„.. , --4 ....,,,. - \\, i � ,, ,, ,,,, ,, - : ,-, ,, ,,,„ ,--- , ,,, ,...., ., L ek Remeander _ [t, ., � \ .s t Fi,' ,tbi��8 i Interpretive Point ‹ \ N w Boar {` ': ,��-Entrance Feature A. ) ! 7 _ '3 X t _ --Lower Park '2 5 ' Wetland S Fnhancemen[Area - - \,^' New Boardwalk -�. t 1` Isi cC ,}„ _ Wetland Mitigation Area l ! _ L Relocated Bridge Upgrade r `.. New Badge �� Entrance i ‹/ / 72'RegionaTrail Vorld9 <\\,. / y N'i "'cog, UPgrade ti 1 D yy o 1 / t 1:. n ; Upgr.ee New Bridge ;.,,s ,� ^g'w= '• Entrance C Fanno Creek Park Master Plan CIVLIA Page 1 `Rethinking Ikban%aces (--- The site that was selected for the development of the plaza, Steven's Marine Inc at 9180 Southwest Burnham St, is shown on the previous page; however, the city has been unable to purchase this property and has gone back to the drawing board in terms of identifying alternatives. As a result of this reexamination, the City Center Advisory Commission has singled out seven possibilities, shown below. The purpose of this report is to evaluate these plaza site alternatives and make recommen- dations. AIV SITE NAMES 407> o 1. Car Wash \''9:4e, � —30,000 Square Feet 4* Illy '�� 2. Dolan House NN, � `��a —18,000 Square Feet ` 3. Ferguson 1��:;, � �, �t `ice+ , , © N ' /1 `•% 51,000 Square Feet � �� 4. Miller &Ash Do Park* *0 „A 9 .j' s� <?/AW �" —30,000 Square Feet 4‘.. �,� ; e� \*44 5. Wyatt —40,000 Square Feet 4150.\N 6. Spohn & Former Zuber* —27,000 Square Feet 7. Johnson / —62,000 Square Feet ik 'These two named sites would be combined *fp Map of Potential Plaza Sites as Reviewed by the CCAC at July 13th Meeting CIVILISPage 2 Consultants `Xcthlnkxg Uban Plan:v PUBLIC SPACES Public spaces come in many shapes and forms. Cozy ' ti streets, sidewalks, pedestrian alleys, pocket parks, green spaces, grand boulevards, plazas and squares of various shapes and sizes. These spaces are the stage upon which ;t a vibrant mixed-use district shows its wares and offers its y entertainments. It is the stage upon which we expect to observe, and participate in, the human experience. z For the purposes of this report, two types of public spaces are going to be examined more closely to understand what makes them successful: 1) plazas and squares; and, 2) green spaces. };;r.• Plazas and Squares • Venetian Street Public plazas and squares consist of spaces that have a substantial amount of paving or hard surface. They can vary in size dramatically, from quite large and grand, to small alcoves, like the one created by the winding Venetian streets and dense buildings shown above. Successful plazas and squares are pedestrian friendly and people scaled, and are primarily served by foot traffic. They can be used as formal and in- formal gathering places—a spot where you might sit to grab some lunch, or a place where a large planned event might be held. Framing Streets and plazas are similar in that they are defined by what frames them. A plaza is a public gathering space, an open air living room, and it doesn't feel comfortable if it is not contained within boundaries of a scale and quality that help to define it, as well as activate it. Size What is the ideal size for a public plaza? The answer is: whatever size a city can successfully activate so the space does not feel dead. There is nothing more off putting than an empty public plaza. In general, the space needed for a successful plaza is often smaller than might be thought. The authors in A Pattern Language: Towns, Buildings, Construction recommend that a public square should have a di- ameter of 70 feet or less on its shortest axis. The long axis can be a greater dimen- sion, however. CIVILIS Page 3 Consultants Activation "The life of a public square forms naturally around its edge. If the edge fails, then the space never becomes lively" Again, the authors from A Pattern Language: Towns, Buildings, Construction observe that public space that has less than one person per 300 square feet begins to feel lifeless. Plazas that are the most engaging, and the most successful, encourage every day cafe seating, music busking, and people watching. They are places that people pass through, creating life just from the activity of walking to and fro. Town squares also house regular events (weekly, monthly, and annually), such as farmers markets, craft shows, and concerts. Design Aside from avoiding a plaza design that is too large, there are additional elements that help make these spaces more successful, including these two key factors men- tioned in A Pattern Language: Towns, Buildings, Construction: 1) creating grade changes so there are vantage points and action areas; and, 2) putting something in the middle of the pla7a so as to avoid the feeling of a vast, empty expanse of space without a center. Local Plaza Examples GRESHAM CENTER FOR THE ARTS PLAZA. The city of Gresham has built the new Gresham Center for the Arts Plaza only two blocks from their downtown core, which is centered around Main Street. But, as you can see on the map on the fol- lowing page, the pla7a is surrounded by empty lots and a few office buildings. It is an example of a pla7a without framing to give it context, with little content in the center, and no activation along its edges. It also does not currently have a public fountain. The pictures shown on the next page were taken on beautiful spring and summer days and there was not a person in the plaza. The farmer's market has not been willing to move to the plaza and occupies a parking lot 3 blocks to the west. This plaza's longest dimension is around 500 feet and its shortest is roughly 207 feet. It is trapezoid shaped and has a total area of roughly 95,000 square feet. To use the formula mentioned previously, to not feel dead, there would need to be at least a single person per 300 SF, resulting in a need to attract over 300 people regularly for the plaza to have a vibrant and active feel. CIVILIS Consultants Page 4 Rethink,ng Urban Places I go • I f• !t IP *yule .l ,T ' 's .r .. 4 .11,42, Gresham Center • iwU 1111114 "" 7r g` et for the Arts Plaza 11 Iin :lb i-vm 4 .1e-' • i Den ' i * .16N.=,ino iiii I,.•1 n ■ ♦ • a r Z pia r IiU .ill -1111111 I' Main Street ea iii ......... I, I 1 r. , t:ul 7 Z 11 - ' i' . I -A' is g r . . ..1 . m . . 1 • P r *. I • •s. w Map of Downtown Gresham GRESHAM CENTER FOR THE ARTS PLAZA PHOTOS , s r e v t.- rw _ ----n"_ •• VMIIIIIIIIIb' • I • ate. N. CIVILIS Page 5 Rethinking U has Places r OREGON CITY LIBERTY PLAZA. This is a small public plaza that was built next to the courthouse on Main Street in Historic Downtown Oregon City. This square is framed by a courthouse, which is an imposing historic building, a parking lot, and a two-story county services building that is inward facing and beige. This plaza is approximately 85 feet by 100 feet, or roughly 8,500 square feet total. It is much closer to the dimensions called for by A Pattern Language than the Gresham plaza; however, this public space is generally not populated, has little to activate it along its edges, and pedestrians almost always choose to walk on the other side of the street where there is a continuous stock of attractive and engaging buildings. LIBERTY PLAZA, DOWNTOWN OREGON CITY Liberty Plaza, Oregon City Courthouse Framing Plaza to the Southwest j, E y". County Building Framing Plaza to the Northeast Parking Lot Framing Plaza to the Northwest _ -Fi I ,d. . . „,,„ _ v‘ ‘, „ii, ,i -f . _i1 St ii MIR ,nam __--)ClVlLl5 Page 6 Consultants Re[hlnking Urban Glares r --- DIRECTOR PARK, PORTLAND. This pla7a is one of Portland's newest and most well-used plazas. It is roughly 135 feet by 200 feet for a total of 27,000 square feet. Along its edges, on three sides, are high rise and mid rise buildings that include a mix of uses, from hotel, to office, to movie theaters, to restaurants. It is well framed, with the exception of the empty lot to the north, which is a building whose construc- tion was put on hold after the economic recession began. The fact that it is miss- ing its fourth wall does make it more uncomfortable on that side. This plaza is very heavily programmed, with small events planned nearly every day. It has an abun- dance of seating, contains a fountain, is staffed by a Portland Parks and Recreation employee, and features an on-site healthy fast food lunch and dinner restaurant named Violetta. DIRECTOR PARK, PORTLAND .;:,,,, .. . 0:, - ... ...=i ..iilli - i a a a .. - _ •iiia 1 ai ,yes _ �r. ti,M_ 0 Iv ,- ,: ., 0 M. i � ' ;,.. —i* ' '—I' 4 mow a. \ _ iii a -------[ -'-. tt j:- t iiL4 CIVIL'S Page 7 <Rethinking Uban Places MISSISSIPPI COMMONS, PORTLAND. This is private property upon which several buildings were constructed set back from the sidewalk. The owners redeveloped these structures and transformed the private frontage into a public plaza that has been very successful. The buildings were all attractively renovated and activated with a lot of glass and small storefronts. The bioswale in the middle of the pla7a serves as a bench, focal point, and sometime play area for visiting children! This plaza is irregular in shape. Its shortest dimension is 24 feet and its longest is nearly 100 feet. It's rough area is about 3,100 square feet. It is small and appropri- ately framed by one and two-story buildings adjacent to the plaza on three sides. Once again, wielding the formula of one person per 300 square feet, this plaza only needs ten people to feel activated. MISSISSIPPI COMMONS, PORTLAND s•. 1I 4 he 11ledda 1 ` i ili1t: 1 • T _ • ` 1 ♦ --- 4 . . . .a" :4. Ntl 4 ...... .......),, ,,it , , Ili.. ... : _. .. 1 ' -'glligll"b'Tl .ate ,`. CIVILI$ Page 8 Consultants Re[hlnking INban Places Green Spaces Typically, green space in a city setting is a place to commune with, and connect back to, nature. These spaces provide a respite from the hustle and bustle of city life. They are generally most successful when found near dense areas of residential use, or in mixed-use areas that have a fair amount of people living in the district. They might include historic trees, dramatic landscaping, or special areas for pets or wildlife refuge. Frequency Y.■ ill?... .rz - . t_. `- ,4 ` i ' mac* _ The forward thinking contributors to A Pattern Language: Towns, Build- 11 -crr ings, Construction, conducted re- " f search for their book that suggests '° =� s� ,1-5** - �- that the people who make regular , Ard *i Alt .,+ use of parks and green spaces are " ` awe. ' x those who live or work only a three NMI vgt- - .a ' : minute walk away. An example of a e " 11.N.C3 F ott residential grid that fulfills this need •s• �.' . a4 Asa .i:� ✓ ;.:2P1.4 wk .111 for close proximity to green space � �; .�x -.: •* .. lie, • �,- ii• its,,moi i< 0 fi;- is shown in the picture to the right ... aiFat , -. r.1.! ►. in Savannah, Georgia. Each of the " ',` : '7 ' 'p '' squares represents a park space / ,- * =''_� that averages about 50,000 square �I: 1 .!ti! �. feet in size, all within close Proxim- Savannah, Georgia Green Space Open Squares ity to one another and containing a web of pedestrian ways underneath mature tree canopies. It is a world famous grid layout because of its great park access. Size Green spaces should be large enough so that when you are in the middle of them, you feel you are in touch with nature and away from the hustle and bustle. Accord- ing to A Pattern Language: Towns, Buildings, Construction, this requires about a minimum of 60,000 square feet in area, and a minimum diameter of at least 150 feet; however, urban landscapes can successfully absorb smaller green space sizes. Design Successful green space design takes on many forms, but often incorporates strate- gic use of tree canopy, the creation of areas or rooms through the use of landscape and hardscape, and may have a wall or landscape barrier to separate it from the surrounding city. The Chinese Gardens located in the Historic Old Town/Chinatown pRe[hVILIS ConsuUrbanltanPurrsts Page 9 lng district in Portland, Oregon is an extreme example of this separation, with an actual wall built around the perimeter that was designed with openings for pedestrians to peek into the gardens from the sidewalk. It is literally a city center walled oasis. Local Green Space Examples TANNER SPRINGS PARK, PORTLAND. This is a new green space located smack in the middle of Portland, Oregon's Pearl district—one of the city's most dense residential districts. It is framed on three sides by high rise buildings and on the fourth, there is an empty parking lot at this time. It is the location of a daylighted spring and features a sloping grade that sinks below the level of the sidewalk. It is planted with native greenery that is still young, so its tree canopy has yet to develop to its full potential for providing sanctuary. This park forbids pets and offers visitors meandering paths, benches, and a bridge that crosses the spring. It is an urban contemplative park and is very popular with nearby residents. It is roughly 185 feet by 165 feet and is a total of approximately 31 ,000 Square Feet. TANNER SPRINGS PARK, PORTLAND ;_ A I - ,..1 ,,,,,..4., , .1 , µms .., a i ti / f � ` ,r- J CIVILIS Page 10 Consultants a Rethlnking Ihban Places r --- BEAVERTON CITY PARK. This green space is located in between ' —", " ` ' a residential neighborhood and „ a mixed-use business district =r populated with one- and two- ,... story buildings. It has bathroom ` " :•• ; : -i facilities, a playground area pro- y� tected by a tree canopy, a fountain " 4 1 and an abundance of very green 1 grass. It is framed by parking I lots, housing, and a library. The - :M:-,, z 1 overall dimensions of the park are • _il s.- �� . 4 approximately 800 feet by 225 - '` "'_ feet, creating a space of roughly Aerial of Beaverton City Park 180,000 square feet. The aerial shot of this park, above right, demonstrates how the park is divided into three sec- tions. The first is covered by the heavy tree canopy at the left of the picture, which is where the playground is housed. The middle section is the home of the fountain. And the right hand third is a courtyard in front of the library. It is successful as a neighborhood gathering place because of the playground, fountain, proximity to the library, landscaping, and surrounding residential neighborhood. Additionally, events are held at this green space, such as Flicks by the Fountain. BEAVERTON CITY PARK . t T F , ..5 it, 1°. L i d gg 4. r s^ 4 i .+_ �- . g .' ilif ' f! ' ;�u ! ria` _ �'.a. .. �. 4 # .i�f i - VSA\l `�� ,`:.r.-.4114:,",� . CIVILIS Page > > Consultants) RCNinkiiiLv;.in P.icr- Public Space Conclusions Activation is the key for successful public places of all types and should be considered at all stages of site selection and throughout design. Because plazas and squares are often large, hardscaped areas without a lot of grade change, it is very easy for them to feel empty and lifeless. The ability to keep a plaza or square activated is paramount to its avoiding failure. All of the elements we discussed earlier influence how well it is used. Framing. A pla7a and park must be well framed with "walls" that are formed by a dense concentration of buildings, landscape, and active ground floor uses. Without appropriate walls, plazas are prone to feeling vacant and blank. Size. Smaller is better! Design. Breaking space up, creating "rooms", building focal points, and allowing for grade change and visual articulation all contribute to creating a place where people want to spend time. Programming and Entertainment. Having fountains, play areas, kiosks, events and markets in the plaza helps to maintain a consistently high level of activity. Pure green spaces are bit more forgiving in terms of activity, not needing as many people on site to feel comfortable. Additionally, they are most successful when they provide users with a respite from the urban environment, which allows for them to be larger than a typi- cal plaza or town square. It is important to note; however, that green spaces which are not frequently used, and that lack a significant residential constituency nearby, can feel more unsafe and unwelcome than an empty town square. CIVILIS: Page 12 Consultants. r ANALYSIS OF SITE ALTERNATIVES The seven sites selected as possible locations for the Tigard public plaza are shown below and fall naturally into three major categories: Main Street Sites, Park Side Sites, and SW Burnham Sites. �`e 40 - k 1 SITE NAMES 4e a,P • . 11.• 1. Car Wash ,� .+.(0*,4„) .,e, -30,000 Square Feet c2. Dolan House r -18,000 Square Feet t> '''' ��`4.. 4.••"'.16. Wt*.,v, ,0 3. Ferguson h* • ,, —51,000 Square Feet 0 ' # 4,o/NOT,,T 4. Miller &Ash DogPark* � � ♦ � 30,000 Square Feet iis‘ystk)iitiN �� 5. Wyatt • 40,000 Square Feet ,o* ` 6. Spohn & Former Zuber* � —27,000 Square Feet 7. Johnson / , —62,000 Square Feet J *These two named sites would be combined 11 I �� ! SITE CATEGORIES ! Main Street Sites wait Park Side Sites SW Burnham Sites Map of Potential Plaza Sites in Downtown Tigard CIVILIS Consultants Page 13 Re[t�U�k4>g Wban Places Main Street Sites Presently, the environment that encompasses Tigard's Main Street is undergoing dramatic improvement that involves significant upgrades as well as greening where it intersects with Fanno Creek. The meandering nature and grade change that are present on this street, and the fact that it is located well below the adjacent Pacific Highway, lend this byway the opportunity to foster a thriving mixed-use district that is pedestrian friendly. It can provide a welcome respite from the noise, speed, and pace that exist on the automobile corridors nearby. Additionally, the building form on Main Street, particularly on the southern portion of the road, is very conducive to creating a community-friendly district for all of Tigard. The ability to generate activity is borne from having a continuous run of people-scale buildings that are constructed to the sidewalk. If these structures are upgraded and tenanted with en- gaging, outward-facing uses, the economic output of this district will increase significantly. Downtown Tigard's ability to attract outside investment and foster new development will partially depend upon creating a vibrant place through the utilization of the existing infra- structure found on Main Street. When this commercial district is revitalized, then investors and builders are going to be much more likely to erect new structures along SW Burnham St, adjacent to the park. Site 1, Car Wash Currently, there is one option being considered along Main Street for the playa, and that is Site 1 , which houses a car wash. The site ad- ts dress is 12485 Main Street and it _ � � ;5: is pictured to the right. The plot's area is just over 30,000 squareET', ,,. 4 feet in the center of the downtown retail district. .-- This is a desirable location in the retail core because it is a part of the southern node of Main Street, which is the area that features Site 1, Car Wash the most dense concentration of buildings constructed to the sidewalk, with the most potential to house retail ten- ants that will help to activate the district in the years ahead. The Pacific Highway viaduct behind the site would give an opportunity for more framing and greenery. With a fountain, road noise would be negligible, as it is in the pocket park in Colum- bus Circle, located at one of Manhattan's busiest intersections. �IVILIS Page 14 Consultants Rethinking um;,n Piaccs SITE 1, ADVANTAGES • Good framing by surrounding infrastructure and the Pacific Highway viaduct, • Located in the heart of downtown, • Has visual connection to SW Burnham St, where future development is desired, • Proximity to many storefronts that could be activating. SITE 1, DISADVANTAGES • Somewhat large for a pure plaza concept. Park Side Sites SW Burnham St is a newly improved road that travels through a primarily industrial district to the south of Tigard's retail Main Street. SW Burnham St will be a prime spot for the next wave of development that happens in downtown Tigard because of its proximity to so much green space in the form of Fanno Creek Park. There are three plaza alternatives located in the Park Side site category. Site 2, Dolan House, and Site 4 Miller & Dog Park do not have direct access to the park. Site 3, Fergu- son could provide access to the creek, the Fanno Creek Trail, and the park from the site. 3 0 Site 2, Dolan House • This site presently contains a single family house that has been spruced up, and now is home _ I to a wedding planning firm. The y _ w lot is nearly 18,000 SF total and does not extend back to make a m. physical connection with either the park, the creek, or the trail. Site 2, Dolan House CIVlTheLIS Page 15 Rethinking Urban ses SITE 2, ADVANTAGES • Smallest size of all seven sites, making it the easiest to activate. • Best proximity to activity on Main Street of the Park Side locations. SITE 2, DISADVANTAGES • No physical connection to the park. • No physical connection to the trail. • Not surrounded by activating retail. • Framed by industrial uses in an industrial district. Site 3, Ferguson Ferguson Enterprises, Inc, a plumbing and building supply company, is located at 9110 SW Burnham St. The lot has a large warehouse positioned at its cen- ter. It potentially has access to Fanno Creek Park and the trail to the rear of the lot. It is situated over 400 feet from Main Street, definitely losing any pedestrian I connection to the core part of town. The lot square footage is just a bit over 51,000 square feet. Site 3, Ferguson SITE 3, ADVANTAGES • Adjacency to the park and the trail. SITE 3, DISADVANTAGES • Very large. • No connection to Main Street. • Not surrounded by activating retail. • Framed by industrial uses in the middle of an industrial district. CIVILIS Page 16 Consultants Relhlnking Urban Places i Site 4, Miller and Ash Dog Park This is a combination of two sites, _t r�~ one of which, the dog park, is al- `� ready owned and controlled by the *; , ' tK city. The Miller Automotive site is about 16,000 square feet and the ,• dog park would add almost 14,000 square feet, bringing the total site size to just over 30,000 square feet. This location would not have direct access to the park and the '' ' trail, but it would be very close to an entry point. Of the Park Side lo- cations, it is the furthest from Main Street at over 1000 feet. Site 4, Miller and Ash Dog Park SITE 4 ADVANTAGES • Nearly adjacent to the park and the trail • Access from two streets, • One lot is already controlled by the city. SITE 4 DISADVANTAGES • Very large. • There is no connection to Main Street. • Not surrounded by activating retail. • Framed by industrial uses in the middle of an industrial district, SW Burnham Sites This category includes sites that are on the north side of SW Burnahm road. None of these locations have direct access to the park, the trail, or Main Street and are in the midst of an industrial district where single story warehouse buildings predominate. CIVILIS Page 17 Consultants R(^[Itlnkin<j Urban Places Site 5, Wyatt The address for this location is 9095 SW Burn- ham road and it is the home of Wyatt Fire Pro- tection. This roughly 40,000 SF lot is the clos- est to Main Street amongst the SW Burnham sites, but at 500 feet, it is still not close enough `4 to form a true pedestrian connection. Like all of the choices in the SW Burnham category, there is no access to the park or the trail from these parcels. Site 5, Wyatt SITE 5, ADVANTAGES • None SITE 5, DISADVANTAGES • Very large. • No connection to Main Street, • No nearby activating retail. • Framed by industrial uses in the midst of an industrial district. • No direct connection to nearby Fanno Creek Park or Fanno Creek Trail. Site 6, Spohn and Former Zuber • This is the second site that is a combination of two lots with different owners. The Spohn site at 9053 SW Burnham St is roughly 15,000 square feet, and the Former Zuber site, which ° + — -'4: is city-owned, at 9025 SW Burnham St adds roughly 12,500 SF, bringing the total combined ` Site 6 square footage to nearly 27,000. The � ` Former Zuber lot sits on a corner, giving this combination access to two community edges. Site 6, Spohn and Former Zuber 91191 Page 18 Re,binking Ioban Maces I SITE 6, ADVANTAGES • Access from two streets. • One lot is city-owned. SITE 6, DISADVANTAGES • Still somewhat large for a pure plaza. • No connection to Main Street. • No nearby activating retail. • Framed by industrial uses in the midst of an industrial district. • No direct connection to nearby Fanno Creek Park or Fanno Creek Trail. Site 7, Johnson Gray's Automotive Machine Shop is the final site under consideration in this • %, category. It is located at 8965 SW Burn- ham St on a corner parcel that is roughly - - 62,000 SF. It also is one of the furthest sites from Main Street, coming in at roughly 1000 feet away. There has been significant streetscape work completed at the intersection on the corner of the site, as shown in the photo to the right. Site 7, Johnson SITE 7, ADVANTAGES • Access from two streets. SITE 7, DISADVANTAGES • No connection to Main Street. • No nearby activating retail. • Framed by industrial uses in the midst of an industrial district. • No direct connection to nearby Fanno Creek Park or Fanno Creek Trail. CIVILIS Page 19 Consultants Rethinking Ihban Places CONCLUSIONS N RECOMMENDATIONS In order to encourage the type of growth in downtown Tigard that has been envisioned in the city's planning process, there must first be a critical mass of activity on, and community connection with, Main Street. If Main Street's buildings were improved, if downtown's i11i businesses had more interconnections, if it developed a brand and reached out to engage the entire city, • then these successes would naturally lead to private sector development along the edges of Main Street. Pia77a San Marco, Frederico Paolo Nerly SW Burnham St would be the logical place for this new construction to begin due to its street improvements, its intersection with Main Street, and its adjacency to the amenities of living next to a lovely park with a meandering stream. Plaza Site Conclusions The primary reason to build a public plaza/green space is to create a vibrant community gathering place. As is clear in this report, the key to successful plazas is activation. When they are not surrounded by residents, or energized with fountains and events, or populated with denizens of a lively street retail scene, they are dead, unsuccessful places. A secondary impetus for the creation of a plaza is to spur further development of mixed- use buildings and bring more residents to downtown Tigard. These two objectives clearly point to Main Street sites as being far and away the most de- sirable because they have the best chance to be activated. Main Street is the only location in downtown where it is possible to generate vitality by building upon an existing commer- cial district with retail activity. If Site 1 is not able to be acquired, identifying an alternative on Main Street would be more desirable than considering a Park Side or SW Burnham site. The Park Side and SW Burnham locations would essentially require the plaza to function as a catalyst, which is not a realistic expectation. Because these public spaces need a lot of time and attention to activate, placing one in the midst of an industrial district with no retail or residential uses nearby is not recommended. It is going to take more than a single new building or adaptive reuse project along SW Burnham St to provide an environment where a plaza can thrive. If Main Street is improved, which should be the primary focus of downtown policy, then the Park Side and the SW Burnham sites could be suitable for a second-generation plaza as new development begins to occur on SW Burnham St, hopefully bringing new residents to downtown. CIVILIS Page 20 Consultants, 1 Plaza Site Recommendations Main Street Sites are far and away the best choice for a pla7a because they can be more easily activated, they will encourage future development, and they are able to foster local economic improvement and benefit. - ' Create a Hybrid Plaza/Green Space Ideal sizes for public plazas are somewhat smaller than the site sizes evaluated for this report. To use the formula discussed earlier, where at least one person per 300 SF is re- quired for a space to feel active, Site 1, Car Wash would require about 100 people in order to avoid appearing empty since it's nearly 30,000 square feet in size. This would be a difficult number of people to consistently attract to a plaza on Main Street, especially initially. In fact, it is a problematic number of people to engage, even for down- town Portland's Director Park, which is why that plaza has an employee devoted to its maintenance and programming. As a result, it makes some sense to marry features of a green space together with a pla7a in Tigard to help attract people, to bring a piece of the park to Main Street, and to break up the space so it doesn't require as many people for an active feeling. This means providing activity with a fountain, adding more copious landscaping than might traditionally be found in a plaza, and introducing a tree canopy. An example of a successful hybrid plaza/ :1 .,, lb,,'- - , 1 green space concept can be found in 'i" � a li i "" _ ,' _..' Portland at Jamison Square Park, pic- �. �' tured to the right. 1 , t. 1 . ' . .-7 r = . 4 4— . . PH _ , Thisplaza is roughly 47,000 '` __ g y square feet, � � '��#; �, with dimensions of 235 feet by 200 feet. . , t f,c It is well framed by residential and mixed -� 1 i. + ; use buildings. It has a wooden board- - Y 'r. " walk on its east side, replacing the typical r : ' • 1 concrete used for sidewalks. It fronts onF �, . :- ` d▪ -. - two restaurants that have outdoor seating t y < r along its northern border. 1 I '# Aerial of Jam• ison Square Park -___. ___) CIVILIS Consultants Page 21 RethinF•,u rvn„o-r:,,: Jamison is divided roughly in half by steps, from which water cascades into a pool that waxes and wanes. It is a very popular fountain for families because it is suitable for espe- cially young children. When the weather is nice, this park is always full. It is a testament to what a popular destination it is since the immediate neighborhood has very few kids in residence. The west half of the park is focused on the fountain, and contains a lush green with tree canopy that faces the tidal waters of the fountain. The east half boasts a European-style gravel treatment that plays host to benches, trees, and bocce ball competitions. There are tree-lined walks with benches that run east-west on the northern and southern borders of the park. JAMISON SQUARE PARK r : 4:1-, .k.,, ,,,, ...„.. Y• 4.4 ir, ..., , , 4 *41-;:?. '"I'" s''' '.' an *:4411:1.A : ' . '.' ' te,,, ,,,, A t .7N ;;;" s Y..'♦ ♦ 4.: :4011111... - • g 1 ' - t1 , __. max.. - _ _ - - - 114, , ' ' _ -`t • :di- .M. f/ • -. L h�f , , s r4,' 04 _ . 4:,,,,i- .„..• _ . -.iv lair .„. , , .- _ __J FHILI$ Page 22 Consultants Activate the Plaza A large plaza space with a fountain is not enough to create a sense of place. Pictured below is the public plaza in front of the Rose Garden Arena in Portland, Oregon. This area is quite large, at the nexus of nearly every major transportation route in the city, and sports what is arguably the best fountain in Portland. But, there are no residents here. There is no framing here. There is no retail activity here. In short, even on its best day, on a week- end, in the summer, with the most fantastic weather, the plaza is as active as you see in the center photograph below. ROSE GARDEN ARENA PLAZA _ ;:. p4 The key to the success of the Tigard plaza is going to be activation. This will require co- ordinating with nearby landlords to ensure more food service and outward facing uses are tenanted near the playa. The duties of a Main Street or Downtown Manager would be to help plan regular events for the plaza, such as movie nights or weekly concerts in the sum- mer. A fountain and a play area would make it family friendly throughout the year. It would be incredible to make downtown the gateway to the Fanno Creek Trail and have a self serve bike share kiosk that would allow the plaza to act as access to recreation for those who do not own a bike. In the summer, a , ; roller blade rental kiosk could be added as well. If feasible, the farmer's market should • r, be moved to the plaza, or an ancillary market on a different day should be created just for -4:4 the plaza. Mir I ir I OIL* - IF Because the site is large-30,000 square _ feet—creating appropriate framing and op- portunities for retail, including adding incuba- tor kiosk spaces, will create more buzz along the edge while essentially shrinking plaza size, both desirable outcomes. Outdoor Seating at Amnesia Brewing CIVILIS Consultants Page 23 Rethlnkiny Urban vlcr- UNIVERSAL PLAZA 1 Design Considerations k , 4 // • Contours Alr / ' 7- II, 11 • Views - . • Connectivity 41:014111 / if • Budget P 2 ' , • Maintenance 1 1 .7 (r( _II 1--------------------7 ffmalis.— , • Versatility I i/ , 1 I iim........- 7ys, '...1( 9:76:# 4.--.7.-.41 -:- -- IT'IJ. : \ /,, • Identity II - ! . L P c,' \j1( 5. ...•• I , i 1 4,44% I Ii z---------,-7 RESOLVE ARCHITECTURE + PLANNING i 'r Tigard 1 Universa: -roza U—Is-r,,pt r)cs1F-;-, Design Symbolism The Golden Rectangle ratio (Phi) appears in nature and science • flower petals / seed heads / pine cones / tree branches Interpretive Elements: • shells / animal bodies / fingers / DNA molecules • Air • spiral galaxies / hurricanes • Water 1 • Fireb • Earth 4,,., I / 4 k. s maze icons. �, ,. �. air / water / - A,< inscriptions & whimsical art fire / earth ,r 0 / ii / 1_ 1 i 1 1 1 1 1 1. 1 1 1_ J RESOLVE ARCHITECTURE + PLANNING .� . Design Concept �; iconic Monkey Puzzle Tree sculptural air quality indicator canopy court WC light beacons vY - • Y fire pit _ r- ' .r t ^ r a I , ,,- I interpretive paving Q.,—.),__ I . ' splash pad sculptural seating b — — tool sharing pavilion parking I 1 i . RESOLVE ARCHITECTURE + PLANNING Tigard I Universal Plaza Concept Design _. .. • L , I 4 Elements -- __.._ , . _ am..........---s--------._7_ , H -- -7 - :---J imm........... .-- i Paths 1 __I- -1_1_ , ! mom 0 L !ICarryir .._ f` I' I .. 111111MalsOlainneffillm. .• I MO MI AU - moo WI / RE UM SUP , H , kumiummuniimmicuis III 111111711111MMIll IIIMIN Ol I a MUM Ma%41 IS 0 I Nail/Primminmi Nme I Pim Ail 11111 III!! mjnil . ,, liNtinidihra NI C____3 f, iim ... 1111111111111111 0 • re 1111111•11 MI 1•111.1111111 rENIIIIIIIMMINI A 0 . 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Programming Ideas .,„,,, KEY: 411110, Performer Event Opportunities Audience estimated seating 800 — 900 • performance Or I • public events kj , + exhibitions IIILtfr 41 INIP • wedding receptions Mi v • school field trips v ! , i ? / I 41, 40 „..,, 0 - , RESOLVE ARCHITECTURE + PLANNING Tigard I Universal Plaza Concept Design Farmers Market Tent Layout 6 Design Considerations • Easy installation - - • Easyto navigate *1st*. . i • 10'x10' tent al is �2 ` '410 1 1,116 * i *II I 1111 4 module o o' �+ ■ i 0 • 1' separationfl i o ma:,. ■sfl«: mr1 between tents ii o _ Al �� 1 •i i~�,. `~�iiirIa. o 10 • 15' minimum aisle 6 - '�■� '�'�■■�'■'■i�� VA Mll ■■'t■[i■�"� i width i o .° bill/AIM ■airMblurs • Vehicle access I I 1 o ®®® 34 35iimirnrini �i I.` �lMMOMAl I0 vO. 50 49 48 47 46 Lit I-11 0 ��L �'�� • capability I Immo 'cot,f� m i ■ :a e■ss_6_6 0 I-- _. Water feature ► �! ?4?4? ego : o \ needs to be wimp 1 _'rt •. H � partially turned off I ! during market � RESOLVE ARCHITECTURE + PLANNING 2. . f siso View at Plaza ......,.,. .. .....r.,r.„, -,„...... , ....... ,..„, , ...,..., 'r . , .i . I . , . . '' , I 1 fi ' t4.t.":(14...'4',"-:',..".; ',,•,,,...: ',.'..,, ..,..,,',.'.,'-‘,,t, llil ' , .. Si • , .., ......,. „, ,,,. I 4 . ,,,, . , . '',,, ;..4. , .:,-.'''..!,,''''f"''.1,4t!., , .,#,,-,•':,t.',,ir . ''''"4"...1.-' ''''''' • "1 ''' 0 '''1!., '. 7.,. ' ''' ' . . . '11' '.'" ''''':‘ ''':','•'''''tki,,,,,,. ',,, .., , •• ,. „ ,, . ,.• „,,, , ,•,,,. . ,. . , • „- •,• . ... ,- 4-1ftlik. 10,k. ., ,,, •,. , .. .„. ... ....... ,..., . ,..,..,. . ....... -11... , , ....,,.. .' ' ' . 4, , .•,,, ,..,..,......... ,...... . ., , ,. ,. ii ,, . , , .. .. li% . , 4.,1 ''''''''* „. . „. .. . 1 . - - ' ' 111111116144' '''' .4''''. ..k''' ..,, .. ',? '''-,,r,'''Itg•S,r,- ‘'... 1. ., ..i . ,........,,,, ': #: . ..„,,,.......„, ''' ' Al' ,' ,• '.1 ,.,. 4,''''' •• ...-.. ..„ ,..,,,,... ..,,... , . . 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''IN to `,' it . 1 — p '4.41/4 A ..,.., , tiled 3813 u!tAllm las i_moD uo!t!ned gled 83.1VM 2upeLislooi suomepaw azeiN/AdoueD anpaadaalui Buole saAnldinDs Al!uncuwo3 tiled 831VM 2uReas annaadialui aoleo!pu! &Joie u!elunoj tiled HIUN/3 Alnenb ped 14seldS 2uoie sNDoiq Ouqeas al nldinDs alp D!laupi It Now ann.aidJalui Diujaadialu! luawaia aiLd /aini.dinos luatualaipv ezeid le ma!A Night aerial view at Plaza 9 .,, t, ... . ‘ ......,,,,..,.. „ , . .. . . ,..., . ...... _... , .,.„. ,.. ....0.0* . ..../ • eitrile • r . :It. • , . , st . ! 0 I, • . , - RESOLVE ARCHITECTURE + PLANNING 2 . 7 . 2018 Night aerial view at Plaza 1 0 Monkey Puzzle Tree Canopy/ Maze — light beacons backlit interpretive <',•,.- Court at crosswalk medallions set ' w11*'''' FIRE element within FIRE Path wimp community interpretive ,{ -„ + ` 4ir 'tool sharing ';- .: •..• .� " et pavilion sculpture pavilion "r AIR element sculpture / ..lik kinetic air quality .. ` indicator WC/mech rm. s :i7.. � ` fiber optics sparkles and ground lights along EARTH Path v, interpretive rock f seating blocks along EARTH Path colored lights at fountain along interpretive seating WATER Path sculptures along WATER Path 4 RESOLVE C ARCHITECTURE + PLANNING _ , 7 . 201.8 . -= 1 1 View at Canopy / daze Court .�;, r° ,, _° ' • y 4 a. r V r�X.h ear • 1�.; I. . W IFI.:‘' ,S mkt � �+: .k �,�� 1♦`Y .e r1� h t rr qqk 3�;,'. �1 w 6 Y„+,, of ,\: r is � w°,. �r w f . Miiii e RESOLVE ARCHITECTURE + PLANNING L t ��. d r cxH,,, ..� 3�., Plaza "Concept S. esig: AIS-3419 4. Workshop Meeting Meeting Date: 02/20/2018 Length (in minutes): 30 Minutes Agenda Title: External Financial Audit & CAFR Presentation with Moss Adams Prepared For: Toby LaFrance, Finance and Information Services Submitted By: Liz Lutz, Finance and Information Services Item Type: Receive and File Meeting Type: Council Workshop Mtg. Public Hearing: No Publication Date: Information ISSUE This meeting is to present the Comprehensive Annual Financial Report (CAFR) along with other related communication and results from the external financial audit for the city and the City Center Development Agency for the fiscal year ending June 30, 2017. STAFF RECOMMENDATION / ACTION REQUEST No action required. Management, and the external auditors from Moss Adams will present the CAFR and results from the audit to council. KEY FACTS AND INFORMATION SUMMARY Oregon Revised Statues 297.425 requires that every city publish a complete set of financial statements presented in conformity with accounting principles generally accepted in the United States of America (GAAP) and audited in accordance with auditing standards generally accepted by a firm of licensed certified public accountants. Moss Adams, the city's external audit firm, performed an audit of the city's financial operations for fiscal year ending June 30, 2017. They reported their findings to the Audit Committee on January 22, 2018. Their reports are included in the city's Comprehensive Annual Financial Report (CAFR) and the CCDA financial report. Moss Adams will provide an overview of audit procedures performed and highlight areas with opportunities for improvement or best practices. The Council will approve a remedy to the finding in a separate future action. Additionally, the city's Comprehensive Annual Financial Report was submitted to the Government Finance Officers' Association for their Excellence in Financial Reporting Certificate program. OTHER ALTERNATIVES N/A COUNCIL GOALS, POLICIES, APPROVED MASTER PLANS N/A DATES OF PREVIOUS COUNCIL CONSIDERATION N/A Attachments CAFR CCDA Financial Report Auditor Letter CityofTigard, Oregon Comprehensive Annual Financial Report FISCAL YEAR '� ENDED JUNE 30, 2017 j f 4 jit 3 � � �" ,00 1.11 m. ' , � � _ i ...„. r _ , . , , _ _,,... \ _.__ _ , _ _ ... __ _ y f ,m 1111 c II 13125 SW Hall Boulevard Tigard, OR 97223 www.tigard-or.gov ON THE COVER Photographer: Doug Vorwaller Artists:Andrew and Andrea Baxley The New Burnham Street project was completed in 2011 and we invited the community to a celebration. We had a pooch parade, scavenger hunt,and sidewalk activities. One of the most creative activities was the chalk art event on the new sidewalk panels along Burnham Street. Participants worked alone, in pairs or in groups and left our street with colorful art that we could appreciate for days. 111 II • _ TIGARD City of Tigard, Oregon Comprehensive Annual Financial Report For the fiscal year ended, June 30, 2017 Prepared by: City of Tigard — Finance and Information Services Department City of Tigard, Oregon Table of Contents Introductory Section Letter of Transmittal 1 Certificate of Achievement for Excellence in Financial Reporting 9 Organization Chart 10 Principal Officials 11 Financial Section Independent Auditor's Report 12 Management's Discussion and Analysis 15 Basic Financial Statements: Government-Wide Financial Statements Statement of Net Position 30 Statement of Activities 31 Fund Financial Statements Major Governmental Funds: Balance Sheet 33 Reconciliation of the Balance Sheet to the Statement of Net Position 34 Statement of Revenues, Expenditures, and Changes in Fund Balance 35 Reconciliation of the Statement of Revenues, Expenditures,and Changes in Fund Balance to the Statement of Activities 36 Proprietary Funds: Statement of Net Position 37 Statement of Revenues, Expenses,and Changes in Fund Net Position 38 Statement of Cash Flows 39 Pension Trust Fund: Statement of Fiduciary Net Position 40 Statement of Changes in Fiduciary Net Position 41 Notes to Basic Financial Statements 42 Required Supplementary Information: Schedules of Revenues and Expenditures—Budget and Actual: General Fund 89 Gas Tax Fund 90 Notes to Required Supplemental Information: Budget to GAAP Reconciliation 91 Schedule of the City's Proportionate Share of the Net Pension Liability(Asset) 92 Schedule of Plan Contributions 93 Other Supplementary Information: Nonmajor Governmental Funds Combining Statements: Combining Balance Sheet 94 • Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 95 Special Revenue Funds: Combining Balance Sheet—Nonmajor Special Revenue Funds 96 Combining Statement of Revenues, Expenditures,and Changes in Fund Balance 98 Schedules of Revenues and Expenditures—Budget and Actual: City Gas Tax Fund 100 Electrical Inspection Fund 101 City of Tigard, Oregon Table of Contents, continued Financial Section, Continued Other Supplementary Information,Continued: Building Fund 102 Criminal Forfeiture Fund 103 Urban Forestry Fund 104 Parks Utility Fund 105 Library Fund 106 Debt Service Funds: Combining Balance Sheet—Nonmajor Debt Service Funds 107 Combining Statement of Revenues, Expenditures,and Changes in Fund Balance 108 Schedules of Revenues and Expenditures—Budget and Actual: Bancroft Bond Debt Service Fund 109 General Obligation Debt Service Fund 110 Urban Renewal Agency Debt Service Fund 111 Capital Projects Funds: Combining Balance Sheet—Nonmajor Capital Projects Funds 112 Combining Statement of Revenues, Expenditures and Changes in Fund Balance—Nonmajor Capital Projects Funds 114 Schedule of Revenues and Expenditures—Budget and Actual: Facility Fund 116 Underground Utility Fund 117 Street Maintenance Fee Fund 118 Transportation SDC Fund 119 Parks Capital Fund 120 Parks Bond Fund 121 Transportation CIP Fund 122 Urban Renewal Agency Capital Projects Fund 123 Major Capital Projects Funds Schedule of Revenues and Expenditures—Budget and Actual: Transportation Development Tax Fund 124 Parks SDC Fund 125 Proprietary Funds: Enterprise Funds: Schedules of Revenues and Expenditures—Budget and Actual: Sanitary Sewer Fund 126 Reconciliation of Budgetary Revenues and Expenditures to Proprietary Revenues and Expenses—Sanitary Sewer Fund 127 Stormwater Fund 128 Water Quality and Quantity Fund 129 Reconciliation of Budgetary Revenues and Expenditures to Proprietary Revenues and Expenses—Stormwater Funds 130 Water Fund 131 Water SDC Fund 132 Water CIP Fund 133 Water Debt Service Fund 134 Reconciliation of Budgetary Revenues and Expenditures to Proprietary Revenues and Expenses—Water Funds 135 Reconciliation of Budgetary Fund Balance to Generally Accepted Accounting Principles Basis Net Position 136 Internal Service Funds: Combining Statement of Net Position 137 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position 138 Combining Statement of Cash Flows 139 City of Tigard, Oregon Table of Contents,continued Financial Section, Continued Other Supplementary Information,Continued: Internal Service Funds,Continued: Schedules of Revenues and Expenditures—Budget and Actual: Central Service Fund 140 Fleet/Property Management Fund 141 Insurance Fund 142 Other Schedules: Schedule of Bond and Bond Interest Transactions 143 Schedule of Future Debt Service Requirements of: Local Improvement District Bonds 144 General Obligation Bonds 145 Bank Loan Payable 146 Water Revenue Bonds 147 Safe Drinking Water Revolving Loan Funds 148 Statistical Section Net Position by Component 149 Changes in Net Position 151 Fund Balances of Governmental Funds 155 Changes in Fund Balances of Governmental Funds 157 Governmental and Business-Type Revenues 159 Governmental and Business-Type Expenses by Function 161 General Governmental Revenues by Sources 163 General Governmental Expenditures by Function 165 Market Value and Assessed Value of Taxable Property 166 Property Tax Rates—Direct and Overlapping Governments 167 Principal Property Taxpayers 169 Property Tax Levies and Collections 170 Special Assessment Collections 171 Ratio of Annual Debt Service Expenditures for Long-Term Debt to Total Governmental Expenditures 172 Ratio of Net General.Bonded Debt to Assessed Value and Net Bonded Debt per Capita 173 Computation of Direct and Overlapping Debt 174 Computation of Legal Debt Margin 175 Ratio of Debt by Type 177 Computation of Water Revenue Bonds Debt Coverage 179 Demographics Statistics 180 Principal Employers 181 Property Value and Construction 182 Full-time Equivalent City Government Employees by Function 183 Operating Indicators by Function/Program 184 Capital Assets Statistics by Function 186 Miscellaneous Statistical Data 187 Audit Comments and Disclosure Requirements Independent Auditor's Report Required by Oregon State Regulations 188 Introductory Section IN Y i TICARD City of Tigard January 31, 2018 Citizens of Tigard Honorable Mayor Members of the City Council We are pleased to submit the Comprehensive Annual Financial Report of the City of Tigard, Oregon, for the fiscal year ended June 30, 2017, together with the opinion thereon of our independent certified public accountants, Moss Adams, LLP. This report is required by Oregon Revised Statutes 297.425 and is prepared by the Department of Finance and Information Services. This report presents fairly the financial position of the various funds of the city at June 30, 2017, and the results of operations of such funds and the cash flows of the proprietary fund types for the year then ended in conformity with accounting principles generally accepted in the United States of America (GAAP). It is prepared in conformance with the guidelines for financial reporting developed by the Government Finance Officers Association of the United States and Canada and the principles established by the Governmental Accounting Standards Board (GASB), including all effective GASB pronouncements. This report consists of management's representations concerning the finances of the city. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the city has established a comprehensive internal control framework that is designed both to protect the city's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the city's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the city's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatements. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The city's financial statements were audited by Moss Adams, LLP, a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the city for the fiscal year ended June 30, 2017, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the city's basic financial statements for the fiscal year ended June 30,2017,are fairly presented, in all material respects, in conformity with GAAP. The independent auditor's report is included in the financial section of this report. 1 GAAP require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The city's MD&A can be found immediately following the report of the independent auditors. Profile of the City of Tigard, Oregon The City of Tigard is located in southeast Washington County, 9 miles from • downtown Portland, Oregon. The city is included in the Metro urban growth boundary and Tigard's neighboring cities include Beaverton, Lake Oswego, Tualatin, Durham, Portland,and King City.State Highway 99W,runs north and Oregon south through the eastern portion of the city as a major commuter corridor to the City of Portland. Interstate 5 and Highway 217 connect Tigard's residents and workforce to the regional economy of 2.5 million residents. Tigard's major greenway called Fanno Creek connects neighborhoods to the natural environment and several of the city's parks.The incorporated area of the city represents 12.2 square miles and has a population just over 50,000. The city can extend its corporate limits by annexation,which is permitted by state statute.Since 2012,the city has annexed over 500 acres of land west of the city that was largely farmland. Planning for development in that area, known as River Terrace, began in earnest during fiscal year 2014 and continued in fiscal year 2015 with the adoption of the River Terrace Community Plan, a long-range plan to guide public and private investment and development to aid with transition from farmland to residential land over the next several decades. ti g j Throughout fiscal year 2017, permitting and construction 'yap I phase of development of River Terrace was in full swing. Portland Full build out is expected to take roughly 20 years. Upon completion, River Terrace is expected to be home to around 6,500 new residents. More information about Tigard's newest neighborhood is on the city's website at: Beaverton http://projects.tigard-or.gov/projects/river-terrace/. m The city is governed by an elected mayor and four council members who comprise the city council.The city's charter Tigard established the Mayor/Council form of government. Each or �� Lake member of the city council is elected at-large to serve a . Oswego four-year term. The mayor presides at council meetings and is elected at-large for a four-year term.The mayor and council provide community leadership, develop policies to Tualatin guide the city in delivering services and achieving t-las community goals, and encourage citizen awareness and involvement. The city council appoints a city manager, who is the chief administrative officer of the city. The city manager is responsible for ensuring council policies are implemented using resources appropriated by the council to achieve desired service results in the community. 2 The city provides a full range of municipal services. These services include police, municipal court,community planning and development, parks, library, capital improvement planning, administration and central services, street maintenance, water, and other general public works activities. The city owns and maintains the wastewater and storm drainage system within the city limits under an agreement with Clean Water Services. Fire protection is provided by Tualatin Valley Fire and Rescue. The legally separate City Center Development Agency(CCDA) is also included in the city's financial statements as a component unit. CCDA is the city's urban renewal and redevelopment agency with a primary purpose to undertake urban renewal projects and activities pursuant to the city's downtown redevelopment plan. The city maintains budgetary controls to ensure compliance with legal provisions in the annual appropriated budget adopted by the city council.Activities of all funds are included in the annual adopted budget.The level of budgetary control (that is,the level at which expenditures cannot legally exceed the appropriated amount) is established by program within each individual fund. Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City of Tigard operates. Local Economy The city's location in the Portland metropolitan region provides residents with many diverse employment opportunities. The majority of Tigard's residents in the workforce commute to a job somewhere else in the region. Every day more than 43,000 residents from somewhere else in the region commute into Tigard for work and more than 30,000 Tigard residents are employed in Tigard or commute to employment somewhere else in the Portland metro region. The chart below shows an eight-year comparison of unemployment rates for the state and local areas as well as the U.S. by fiscal year. The area's unemployment rate has steadily declined over the past eight years. Tigard's most current unemployment rate is 3.5 percent as of June 2017, which is 0.2 percent lower than the Portland Metro area and the State of Oregon. aJ Unemployment trends aJ' 14.0% °C 12.0% 10.0% E 86..°0;: .0%6.0 ,- 0 % - £ 4.0% 2.0% - - 0.0% - 2010 2011 2012 2013 2014 2015 2016 2017 -State of Oregon 10.5% 9.4% 8.5% 8.1% 6.8% 5.5% 4.8% 3.7% United States 9.6% 9.2% 8.2% 7.8% 6.1% 5.3% 4.9% 4.3% -Portland Metro 9.7% 9.5% 8.0% 7.6% 6.1% 5.4% 4.9% 3.7% -Washington County 9.0% 8.1% 8.2% 6.6% 5.6% 5.0% 4.7% 3.5% City of Tigard 8.4% 8.1% 8.2% 6.6% 5.4% 4.5% 4.4% 3.5% Fiscal year 3 2017 Summary of Local Statistics Number of businesses 2,976 Median household income (2015) $62,048 General fund permanent tax rate $2.5131 per$1,000 of assessed value Total assessed value (est. 2016/2017) 6,123,501,297 Long-term Financial Planning The city prepares a comprehensive long-term financial forecast annually. By forecasting and anticipating financial trends, the city can develop strategies to respond to emerging financial trends. The city forecasts operating fund revenues and expenditures over a six-year period. The forecast is adjusted as each year's final results are known and as budgets are prepared for the following year. In addition,the city also prepares a six- year Capital Improvement Plan (CIP) that is also updated every year. The OP is developed through a process separate from, but parallel to the budget process.The impact on future operating and maintenance costs are projected from the CIP and then incorporated in the long-term financial forecast.The city's adopted fiscal year 2018—2023 CIP can be found on line at http://www.tigard-or.gov/city hall/cip.php Financial Policies The City of Tigard has established financial policies to account for public funds, manage municipal finances wisely and plan adequate funding of services and facilities desired and needed by the public. The financial policies are adopted annually by the city council in connection with the budget process.Consistent application of these financial policies has helped ensure the city has appropriately recorded and accounted for transactions in our financial statements. The adopted fiscal year 2017 budget document includes the city's financial policies noted in the appendix starting on page 422. The policies can be found on line at: http://publicrecords.tigard-or.gov/Public/DocView.aspx?id=724227&dbid=0 The goals of Tigard's fiscal policies are: • To enhance the city council's policy-making ability by providing accurate information on program and operating costs. • To assist sound management of the city government by providing accurate and timely information on current and anticipated financial conditions. • To provide sound principles to guide important decisions of the council and management which have significant fiscal impact. • To set forth operational principles,which minimize the cost and financial risk of the city's government consistent with services, desired by the public. • To employ revenue policies, which prevent undue or unbalanced reliance on any one source, distribute the cost of municipal services fairly, and provide adequate funds to operate desired programs. • To provide and maintain essential public facilities, utilities, infrastructure and capital equipment. • To protect and enhance the city's credit rating. • To insure that all surplus cash is prudently invested in accordance with the investment policy adopted by the council to protect city funds and realize a reasonable rate of return. 4 Major initiatives The Tigard City Council meets annually in connection with the budget process to establish goals.Council goals comprise high-priority tasks or programs that the city council intends to complete or initiate during the year, though attainment of these goals may take several years. The goals are based on departmental needs, bi- annual community survey results and city council priorities. In the goal-setting meeting, the city council reviews information and develops its annual and long-term goals. Council goals set the priorities for city government and are incorporated into departmental work plans. For 2017-2019 council established goals for the city as follows: 1. Advance a Local Option Levy and Facilities Bond to Voters to Increase Resources and Space for Day- to-Day City Services. • Develop key messages to inform/educate the public about city services and funding challenges for outreach effort • Develop and administer a second community survey or focus groups to test key messages for levy support • Launch a comprehensive outreach campaign to inform and educate the community about specific funding challenges • Develop and administer a third community survey or focus groups that tests support for a local option levy • Quarterly briefings with city council to plan for local option levy • Using findings from completed outreach and research, draft local option levy alternatives for council consideration • Present local option levy possibilities for council review; decision about whether to pursue a local option levy on the May 2018 ballot • Launch education and information on levy proposal • File ballot measure with Washington County for May election 2. Expand Recreation Opportunities for the People of Tigard. • Continue to implement city recreation program in 2017-18 and 2018-19 adopted budget o Continue to implement recommendations of the Recreation Program Study from 2013 o Pilot for after school programming at Metzger Elementary School o Add additional afterschool programs at other schools o Expand programs and classes with outside providers o Expand outdoor events (movies, concerts, pop-ups in the park) o Offer indoor events and programming using Fanno Creek House, Dirksen modular facility and school facilities • Continue to pursue feasibility of partnership opportunities with other cities and organizations. o Discuss partnerships with the Tigard-Tualatin School District including programming and facilities at Templeton, Metzger, Alberta Rider, Tigard High School, and Art Rutkin sites o Form a Recreation Task Force made up of PRAB (Parks and Recreation Advisory Board) members to evaluate recreation partnerships and make recommendations to council, including: • Explore partnership opportunities with the cities of Sherwood,Tualatin and Wilsonville • Prepare a white paper about recreation opportunities 5 ■ Suggest recreation-related questions for the 2017 Community Attitudes Survey 3. Make Downtown Tigard a Place Where People Want to Be. • Focus on identifying and acquiring property and developing the Downtown Plaza. o Design and develop Tigard Street Heritage Trailhead plaza as a gathering place and event space o Complete design and engineering for Main Street at Fanno Creek public space o Evaluate locations for other plaza/public space, including as part of Civic Center visioning • Make Downtown Tigard a livable community with something to offer residents 18 hours a day, 7 days a week; develop housing units within downtown. o Complete cleanup and redevelopment of the Main Street at Fanno Creek property into a mixed use building and public space o Complete Metro grant funded pre-development projects to attract new housing/mixed use development, including affordable housing, and engage with developers o Build the capacity of the Tigard Downtown Alliance to produce programs and projects that meet the council goal o Work with a range of community groups to design and program the Tigard Street Heritage Trail o Enable existing businesses to improve their properties and attract new businesses to vacant buildings through the Urban Renewal Improvement Matching Grant Program o Partner with the TDA to pursue Oregon Main Street grant funding for property improvements. • Implement Downtown Projects. o Main Street Green Street Phase II o Tigard Street Trail o Fanno and Main 4. Pursue Development of Light Rail Along the Southwest Corridor. • Advocate for Light Rail to come to Downtown Tigard o Support request to the State Legislature for$150M in state lottery funding for the Southwest Corridor Project. o Support legislation to grant the Metro Council authority to consolidate multijurisdictional land use actions involving the SW Corridor into a single decision and expedited land use appeal process. • Adopt a Locally Preferred Alternative (LPA) in 2018 that advances Tigard's land use and transportation priorities: o Direct service to downtown Tigard o Vehicle and pedestrian crossing at Ash Avenue • Development of three light rail stations including one downtown and two in the Tigard Triangle o Structured parking facilities in downtown,the Triangle,or both districts,to be made available for short-term public parking (non-commuters) o Implementation of Shared Investment Strategy projects that enhance the walkability and connectivity of the community near transit stations 6 o Construction of affordable housing in the Triangle and downtown near transit stations, including replacement housing for"at risk"units due to SWC light rail construction concurrent with, or prior to, light rail construction o Mitigation and enhancement of sensitive lands, congested intersections, and other community assets due to light rail construction and operation. o Adoption of design standards and guidelines in TMC Title 18 to ensure that the quality of light rail components meet a high standard of urban design. o Effective outreach and communication with impacted neighborhoods. Environmental justice for low-income or non-English speaking residents for whom impacts are most disruptive. o Effective outreach and communication with impacted businesses. Economic development support for displaced or impacted Tigard businesses. o Execution of an intergovernmental agreement with TriMet for Services Related to Design Review, Permitting, Shared Parking and Facilitation of Affordable Housing o Participation on a Sustainable City Year Program multi-jurisdictional team to support City of Tigard goals in the SWC. 5. Implement Tigard Triangle Strategic Plan (TTSP). • Consider Lean Code and Plan Amendments o Lean Code (Describes development) o Zoning Map (Designates zoning on specific property) o Transportation System Plan/TPR Analysis (street network map, streets with bike facilities, alley map) o TTSP(Describes the vision for the Triangle) • Infrastructure Planning o Triangle Stormwater Implementation Plan (Area-wide stormwater management) o 72nd Avenue Study(capacity and ultimate street section design) • Development of Funding Tools o Establish Urban Renewal Agency—public vote on UR plan 6. Annex Territory into the City. • Prioritize annexation of islands including a strategy and incentives. o Review overall project approach, draft letter to island residents, outreach plan, potential incentives and legal process with council—1st week in March, 2017 o Schedule and conduct small group meetings/conversations, identify incentives — March — April, 2017. o Follow-up on incentives, develop schedule for hearings and final action—May—July 2017. o Develop a strategy for communication and outreach to residents, with the council in the lead for outreach. o Develop a strategy for future annexations of the remaining Urban Growth Boundary (UGB). o Beginning July, 2018 develop a work plan for future annexations of the UGB. Include dates and deadlines for needed studies and outreach. Identify logical phasing options. Present work plan to council by the end of 2018. More information about the city's goals and initiatives can be found on the city's Finance and Information Services web page: http://www.tigard-or.govjcity hall/finance and information services.php. Awards and Acknowledgements The Government Finance Officers Association (GFOA)awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Tigard for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2016. This was the 31st consecutive year that the city has received this esteemed award. In order to be awarded a Certificate of Achievement, the government published an easily readable and efficiently organized CAFR. This report satisfied both GAAP and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. In addition, the city also received the GFOA's Distinguished Budget Presentation Award for its annual budget for fiscal year 2017. This was the 29th consecutive year that the city has received this prestigious award. In order to qualify for the Distinguished Budget Presentation Award, the city's budget document was judged to be proficient in several categories, including as a policy document, a financial plan, an operations guide, and a communications device. The city has submitted its fiscal year 2018 budget document and believes that it meets the Distinguished Budget Presentation Award's requirements. The preparation of this report was made possible by the dedicated service of the staff of the Financial and Information Services department. Each member of the department has our sincere appreciation for the contributions made in the preparation of this report. Special recognition should be given to the financial operations staff for their work in preparing this document. Special thanks should be given to the City of Tigard Audit Committee for their dedicated service of overseeing the work performed by the independent auditors.Credit also must be given to the Mayor and city council for their unfailing support for maintaining the highest standards of professionalism in the management of the City of Tigard's finances. Respectfully submitted, Y-f7/4 )- 6fy. Marty Wine Toby La France City Manager Director of Finance and Information Services 8 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Tigard Oregon For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016 iffirer19040,-, Executive Director/CEO 9 City of Tigard, Oregon Citywide Organizational Chart as of July 1,2017 CITY OF TIG vRD CITIZENS OF TIGARll 1 Mayor&City City Attorney G>uncJ City Manager i s - . • r l Administrative Cis eta naeemenc Community Finance& Library Public Works Services Development Information Services Design& Human Resources CD Planning Administration Admi oistra don Administration \dministtation Communications City Recorder/ Risk Management Building Financial Operations Circulation Support Services Public Works Engineering Records Municipal Court City Manager's Office Economic Development Information Services Reader Services Poke Operations Parks&Grounds Fleet Maintenance Utility Billing Technical Services Storm Water PrContracts&Purchasing Water Management Sanitary Sewer Street Maintenance Street Lights& Signals 10 City of Tigard, Oregon Principal Officials as of July 1, 2017 Elected Officials Name Term Expires Mayor John Cook December 31, 2018 Councilor Jason Snider December 31, 2020 Councilor John Goodhouse December 31, 2018 Councilor Tom Anderson December 31, 2020 Councilor Marc Woodard December 31, 2018 Appointed Officials Name Title Marty Wine City Manager Toby La France Director of Finance and Information Services All may be reached at: 13125 SW Hall Boulevard Tigard, OR 97223 Legal Counsel Jordan Ramis PC Two Centerpointe Drive, 6th Floor Lake Oswego, OR 97035 11 No content appears on this page by design. Financial Section MOSSADAMS Report of Independent Auditors City Council City of Tigard, Oregon Tigard, Oregon Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business- type activities, each major fund and the aggregate remaining fund information of the City of Tigard, Oregon (the City), as of June 30, 2017, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements 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 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 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. 12 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City as of June 30, 2017, and the respective changes in financial position and, where applicable, cash flows thereof 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, budgetary comparison schedules for the General Fund and Gas Tax Fund, the schedule of proportionate share of the net pension liability and the schedule of plan contributions (collectively, the required supplementary information) on pages 15 through 29 and 89 through 93, 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 management's discussion and analysis, the schedule of proportionate share of the net pension liability and the schedule of plan contributions on pages 15 through 29, and pages 92 through 93 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 this 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 City's basic financial statements. The budgetary schedules for the General Fund and Gas Tax Fund described above on pages 89 through 91 are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. The budgetary schedules for the General Fund and Gas Tax Fund have 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 for the General Fund and Gas Tax Fund are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The combining and individual nonmajor fund financial statements, budgetary schedules, and other financial schedules on pages 89 to 142 are presented for purposes of additional analysis and are not a required part of the basic financial statements. 13 This 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. 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 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, combining and individual nonmajor fund financial statements, and other financial schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The introductory and statistical sections are presented for purposes of additional analysis and are not a required part of the basic financial statements. The introductory section and statistical information have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it. Report on Other Legal and Regulatory Requirements In accordance with the Minimum Standards of Audits of Oregon Municipal Corporations, we have issued our report dated January 31, 2018 on our consideration of the City'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. ‘Let4./A or Moss Adams LLP Portland, Oregon January 31, 2018 14 No content appears on this page by design. City of Tigard, Oregon Management's Discussion and Analysis As management of the City of Tigard, we offer readers this narrative overview and analysis of the financial activities of the City of Tigard for the fiscal year ended June 30, 2017. It focuses on significant financial issues, major financial activities,and resulting changes in financial positions, as well as economic factors affecting the city. This Management's Discussion and Analysis (MD&A) is based on currently known facts, decisions, and conditions that existed as of the date of the independent auditor's report. We encourage readers to consider the information presented here in conjunction with the transmittal letter at the front of this report and the city's financial statements which follow this discussion and analysis. Financial Highlights • Assets and deferred outflows of resources of the city exceeded its liabilities and deferred inflows of resources at the close at June 30, 2017 by$397,315,760 (net position). Of this amount, $16,994,300 is restricted for transportation construction, maintenance and utility undergrounding, $2,272,522 is restricted for park development and improvements, $8,551,308 is restricted for water system construction and improvements, $8,669,030 is restricted for debt service,$4,519,413 is restricted for building development plan review and inspection, $477,966 is restricted for library capital improvements and $216,517 is restricted for law enforcement equipment. $51,529,793 is unrestricted net position may be used to meet the city's ongoing obligations to citizens and creditors and $304,084,911 is for net investment in capital assets. • The city's total net position had a net increase of$41,381,657 or 11.6 percent from the June 30, 2016 net position. Governmental activities net position increased by $19,721,258, or 8.7 percent. The business-type activities net position increased by $21,660,399 or 16.7 percent. The reasons for the increase are noted in the financial analysis section of the MD&A. • The city's governmental funds reported combined ending fund balances of$52,864,147, an increase of 16,737,609 or 46.3 percent from fiscal year 2016. Of the combined ending governmental fund balances, $14,159,416 or approximately 26.8 percent is available for spending at the city's discretion subject to council approved policies and actions. • At the end of the fiscal year, unassigned fund balance for the General Fund was $14,884,712, up $1,914,042 over the prior year. • The city's total debt decreased by$5,098,837 or 3.1 percent from fiscal year 2016. Overview of the Financial Statements In addition to this discussion and analysis,the financial section of this annual report contains the basic financial statements, required supplementary information, and the combining statements of the non-major funds and schedules demonstrating legal compliance. The basic financial statements also include notes that explain the information in the financial statements and provide more details. The statements are followed by the required supplementary information section that supports the information in the financial statements. Government-wide financial statements The government-wide financial statements are designed to provide readers with a broad overview of the city's finances, in a manner similar to a private-sector business. 15 City of Tigard, Oregon Management's Discussion and Analysis The Statement of Net Position presents information on all of the city's assets and deferred outflows of resources and liabilities and deferred inflows of resources,with the difference 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 city is improving or deteriorating. The Statement of Activities presents information showing how the city's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will result in cash flows in a future fiscal period. Examples of such items include earned, but uncollected property taxes, and earned, but unused compensated absences. Both of the government-wide financial statements distinguish functions of the city that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the city include the following: • Community services, police, library, and social services • Public works, including parks and recreation • Community development, current and long-range planning • Policy and administration The business-type activities of the city include the following: • Sanitary sewer • Stormwater • Water The government-wide financial statements can be found on pages 30-32 of this report. Fund Financial Statements are designed to display compliance with finance-related legal requirements demonstrated by the use of fund accounting.A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities and objectives. The funds of the city can be divided into the following categories: governmental funds, proprietary funds, and a fiduciary fund. Governmental Funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of available resources, as well as on balances of available resources at the end of the fiscal year.Such information may be useful in evaluating a government's near-term financial capability. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the city's near-term financing decisions. Both the governmental fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures,and Changes in Fund Balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. 16 City of Tigard, Oregon Management's Discussion and Analysis The city maintains 22 individual governmental funds. Information is presented separately in the governmental fund Balance Sheet and the Statement of Revenues, Expenditures, and Changes in Fund Balances for those funds that are considered significant (major) to the city taken as a whole. These financial statements report four major funds: General, Gas Tax, Transportation Development Tax, and Parks SDC Funds. Data from the other 18 governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. The city adopts an annual appropriated budget for all of its governmental funds. A budgetary comparison statement has been provided for each fund individually to demonstrate compliance with their budgets. The basic governmental fund financial statements can be found on pages 33-36 of this report. Proprietary Funds are used to account for a government's business-type activities. The city maintains two different types of proprietary funds - enterprise funds and internal service funds. Enterprise funds are used to report the same functions presented as business-type activities in the governmental-wide financial statements. The city uses enterprise funds to account for its sanitary sewer, stormwater, and water operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the city's various functions. The city uses internal service funds to account for fleet and property maintenance, risk management, design and communication,finance and accounting, and other management services. The city reports all three of the enterprise funds as major funds. These funds are the Sanitary Sewer Fund, the Stormwater Fund, (which consists of the budgetary Stormwater and the Water Quality/Quantity Funds), and the Water Fund, (which includes the budgetary Water, Water SDC, Water CIP and Water Debt Service Funds). However,for budgetary and legal purposes these funds are accounted for separately. Conversely,all internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided as other supplementary information. The city also adopts an annual appropriated budget for all proprietary funds. To demonstrate compliance with the budget, budgetary comparison statements have been provided for the enterprise funds as other supplementary information on pages 126-136 of this report. Budgetary comparisons for the internal service funds are provided on pages 137-142 of this report. The proprietary fund financial statements can be found on pages 37-39 in the basic financial statements. Fiduciary Funds are used to account for assets held in a trustee or agency capacity for others and therefore cannot be used to support the government's own programs. The city has a pension trust fund that accounts for employee defined contribution plans. The accounting used for the fiduciary fund is much like that used for the proprietary funds. No budget is adopted for the fiduciary fund in accordance with Oregon Local Budget Law. The fiduciary fund financial statements can be found on page 40-41 in the basic financial statements. Notes to the Basic Financial Statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 42-88 of this report. 17 City of Tigard, Oregon Management's Discussion and Analysis Required Supplementary Information includes Schedule of Revenues and Expenditures— Budget and Actual for the General Fund and the Gas Tax fund. The Budget to GAAP reconciliation for the General Fund is also included. This section also presents the schedule of the city's proportionate share of the net pension liability (asset) and the schedule of contributions. Required supplementary information can be found beginning on page 89 of this report. The combining statements referred to earlier in connection with non-major governmental funds and business- type funds are presented immediately following the required supplementary information. Combining and individual fund statements and schedules can be found on pages 94-142 of this report. Government-wide Financial Analysis—Statement of Net Position Net position: As noted earlier, net position may serve over time as a useful indicator of the city's financial position. In the case of the city, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by$397,315,760 at June 30, 2017. The largest portion of the city's net position, approximately 76.5 percent, is its investment in capital assets (e.g., land, construction in progress, buildings, roads, sewers, stormwater facilities, etc.), net of accumulated depreciation and any related debt used to acquire those assets that is still outstanding. The city uses these capital assets to provide services to citizens;consequently,these assets are not available for future spending. Although the city's investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since capital assets themselves cannot be used to liquidate these liabilities. The city's restricted net position in the amount of $41,701,056 or approximately 10.5 percent represents resources that are subject to external restrictions on how they may be used. By definition, the city cannot remove these restrictions as they are imposed by parties outside of the city. The remaining balance is unrestricted net position in the amount of$51,529,793 or approximately 13.0 percent of total net position. At the end of the current year, the city is able to report positive balances in all categories of net position for governmental and business-type activities. • Total net position increased by $41,381,657 or 11.6 percent during the current fiscal year. Total assets for governmental activities increased by approximately$19.1 million, or approximately 7.2 percent. Noteworthy changes included an increase in cash and investments of approximately $9.4 million or 20 percent. This increase is due to development activity in the city resulting in higher fee collection in the Building, Transportation Development Tax,Transportation SDC, Parks SDC and Water SDC funds. Governmental activities liabilities increased by approximately $4.8 million or 12.7 percent. Noteworthy changes include a significant increase in net pension liability of approximately $6.5 million or 139.8 percent due to changes in actuarial assumptions associated with the rate of return on investments. See note 10 for more information. Excluding the net pension liability increase,the governmental activities liabilities decreased by approximately$1.8 million or 5.5 percent. Governmental activities reported a decrease of $638,326 or 59.2 percent for deferred inflows of resources related to pensions. As previously discussed, fiscal year 2017 represented the third year of implementation of GASB Statement No.68. The net pension asset/liability may fluctuate and effect the related deferrals given the various factors impacting the actuarial valuation. 18 City of Tigard, Oregon Management's Discussion and Analysis Business-type activities total assets increased by approximately $17.1 million or 6.1 percent over the prior year. Land and construction in progress increased by approximately$13.6 million or 8.3 percent over the prior year for the ongoing Tigard Water Supply Partnership Project with Lake Oswego. The Lake Oswego-Tigard Water Partnership was formed in 2009 to acquire a permanent source of raw water and treatment facilities for potable water as well as making capital improvements for storage and transmission facilities. Total long-term debt for business-type activities decreased by$2,683,971 or approximately 1.9 percent,which primarily represents payment of principal and amortization of the bond premium on the water revenue bond issues.The water revenue bonds were issued in fiscal years 2012 and 2015 for the Lake Oswego-Tigard Water Partnership. City of Tigard—Summary of Net Position Governmental Business-Type Total Activities Activities 2017 2016 2017 2016 2017 2016 Current and other assets $ 63,545,186 $ 45,652,598 $ 53,753,388 $ 50,280,345 $117,298,574 $ 95,932,943 Capital assets 219,410,373 218,225,516 242,037,622 228,453,349 461,447,995 446,678,865 Total Assets 282,955,559 263,878,114 295,791,010 278,733,694 578,746,569 542,611,808 Deferred outflows related to pension 5,928,602 1,170,397 - - 5,928,602 1,170,397 Current and other liabilities 9,807,520 9,147,544 9,005,416 10,863,362 18,812,936 20,010,906 Long-term liabilities outstanding 32,356,764 28,264,022 135,750,445 138,495,582 168,107,209 166,759,604 Total Liabilities 42,164,284 37,411,566 144,755,861 149,358,944 186,920,145 186,770,510 Deferred inflows related to pension 439,266 1,077,592 - - 439,266 1,077,592 Net investment in capital assets 199,214,099 195,142,143 104,870,812 95,247,967 304,084,911 290,390,110 Restricted 26,313,186 20,392,998 15,387,870 12,279,628 41,701,056 32,672,626 Unrestricted 20,753,326 11,024,212 30,776,467 21,847,155 51,529,793 32,871,367 Total Net Position $246,280,611 $226,559,353 $151,035,149 $129,374,750 $397,315,760 $355,934,103 19 City of Tigard, Oregon Management's Discussion and Analysis City of Tigard—Summary of Changes in Net Position Governmental Business-Type Total Activities Activities 2017 2016 2017 2016 2017 2016 Revenues Program revenues: Charges for services $ 12,352,802 $ 9,544,047 $ 27,214,719 $ 25,768,181 $ 39,567,521 $ 35,312,228 Operating grants and contributions 6,880,727 7,756,718 - - 6,880,727 7,756,718 Capital grants and contributions 15,691,507 11,785,524 7,670,388 5,806,590 23,361,895 17,592,114 General revenues: Property taxes 17,616,798 17,177,591 - - 17,616,798 17,177,591 Franchise fees 5,890,113 5,734,540 - - 5,890,113 5,734,540 Unrestricted intergovernmental revenues 2,074,428 2,840,903 285,524 127,148 2,359,952 2,968,051 Interest 824,213 688,087 106,628 302,890 930,841 990,977 Miscellaneous 268,380 228,779 270,628 193,645 539,008 422,424 Total revenues 61,598,968 55,756,189 35,547,887 32,198,454 97,146,855 87,954,643 Expenses Community services 23,461,915 25,089,790 - - 23,461,915 25,089,790 Public works 8,342,833 10,865,800 - - 8,342,833 10,865,800 Community development 5,831,389 7,030,142 - - 5,831,389 7,030,142 Policy and administration 3,583,751 1,226,166 - - 3,583,751 1,226,166 Interest on long-term debt 949,136 958,204 - - 949,136 958,204 Sewer - - 2,595,606 2,536,988 2,595,606 2,536,988 Stormwater - - 2,738,673 2,123,162 2,738,673 2,123,162 Water - - 8,261,895 14,720,167 8,261,895 14,720,167 Total expenses 42,169,024 45,170,102 13,596,174 19,380,317 55,765,198 64,550,419 Revenues over expenses 19,429,944 10,586,087 21,951,713 12,818,137 41,381,657 7 23,404,224 Transfers in(out) 291,314 817,481 (291,314) (817,481) - - Changes in net position 19,721,258 11,403,568 21,660,399 12,000,656 41,381,657 23,404,224 Beginning net position 226,559,353 215,155,785 129,374,750 117,374,094 355,934,103 332,529,879 Ending net position $246,280,611 $226,559,353 $151,035,149 $129,374,750 $397,315,760 $355,934,103 Expenses and Program Revenues—Governmental activities—June 30, 2017 $25,000,000 i 1 $20,000,000 9 $15,000,000 $10,000,000 -4 : ::::: $5,000,000 L III 4.2 MP$0 v�`�i 5�N`ce� Y J `\�'si°ck5 d�ye\o��`�t d�;��,,', `oma ��"Ne�C�ae�� ce tom��1�vt� Q�\,`y and a yi�iQteS`o%�\o 20 City of Tigard, Oregon Management's Discussion and Analysis Governmental Activities Governmental activities increased the city's net position by$19,721,258. Noteworthy reasons for the change from the prior year are as follows: • Charges for services for Community Development increased by approximately $2.8 million or 29.4 percent from 2016. The increase is primarily due to significant increases in permitting fees related to various development going on around the city including the River Terrace neighborhood. • Total capital grants and contributions increased by approximately $3.9 million over the prior year primarily due to private development contributions for improvements to city infrastructure assets such as streets and right-of-way. • Franchise fee revenue totaled $5,890,113 in fiscal year 2017, which was a slight increase of approximately $156,000 or 2.7 percent from fiscal year 2016. Franchise fees are charged to public utilities for the use of the public right-of-way. Franchised activities paying the fee include electricity, natural gas,telecommunications, cable television, water, sewer and solid waste haulers. • Property taxes constitute approximately 30 percent of total governmental revenues and continues to be a major source of revenue for the funding of city programs. Property tax revenues are up by approximately $439,000 or 2.6 percent over 2016. Oregon has a "rate-based" system in which property taxes are expressed in a dollar amount per thousand dollars of assessed value. The City of Tigard's permanent tax rate is $2.5131 per thousand dollars of assessed value. The money raised by this levy is available for general purposes. The permanent rate is multiplied by the assessed value each year to arrive at the tax authority for that year. Assessed value growth is limited to a maximum 3 percent per year, plus a pro-rated share of new construction and annexations. Assessed value cannot exceed real market value. General Obligation(GO)debt service levies are calculated to produce enough tax revenues that(when combined with other resources such as interest earnings and fund balance)will be enough to pay debt service due on these voter-approved bonds. On November 2, 2010,voters approved a bond measure in the amount of$17.0 million for acquisition and development of park land. These bonds were sold on February 3, 2011 to Wells Fargo Bank, National Association. Also on that date, the city refunded $9.0 million of outstanding general obligation bonds that were approved on May 21, 2002, by voters to build a new library. Taxes collected through the tax levy repay the bonded debt. • Expenses for Policy and Administration increased by approximately$2.4 million or 192.3 percent over the prior fiscal year. This increase is primarily due to the Property Management and Fleet divisions being added to Central Services from Public Works. 21 City of Tigard, Oregon Management's Discussion and Analysis Revenues by Source—Governmental Activities-June 30, 2017 Capital grants and contributions Taxes 26% 32% Operating - � grants and _ Interest contributions 1% 11% Franchise fees Charges for 10% services Misc 20% 0% Business-type Activities Business-type activities increased the city's net position by$21,660,399. The primary reasons for the current year's increases are: • Charges for services represent approximately 76.6 percent of total business-type revenues and are composed of fees that are charged to all users for services provided such as water, sanitary sewer, and stormwater. The sanitary and stormwater fees are established by Clean Water Services (CWS) and are set by the agency each year. The city council, through an intergovernmental agreement with other water system participants, sets the water rates. Total charges for services increased by approximately $1.4 million or 5.6 percent over fiscal year 2016, with the largest increase in sanitary sewer revenues. • Sanitary sewer charges for services increased by approximately $1.2 million or 68.2 percent over the prior fiscal year due to the implementation of the city sewer surcharge. This monthly charge of $2.07/dwelling unit was adopted to help the city fund the growing system infrastructure needs. • Capital grants and contributions increased by approximately $1.9 million over fiscal year 2016. The increase is attributable to capital contributions for stormwater,sanitary sewer and water lines related to various private developments completed in fiscal year 2017. • Expenses for water operations decreased approximately $6.5 million or 43.9 percent from the prior fiscal year. The decrease is due to a decrease in the cost of water of approximately$2.9 million and approximately $5.3 million in interest expense capitalization related to the water revenue bonds. In fiscal year 2015,the city issued $30.8 million in water revenue bonds and interest on the debt did not come due until fiscal year 2017. 22 City of Tigard, Oregon Management's Discussion and Analysis Expenses and Program Revenues—Business-type Activities—June 30, 2017 $20,000,000 $17,500,000 $15,000,000 f•' $12,500,000 $10,000,000 Revenues $7,500,000 $5,000,000 ' ■Expenses $2,500,000 $0 S �ace< N.142:`"°N.142:`"°Sa ,0.2, e ° S�otrc` Financial Analysis of the City's Funds As noted earlier, the city uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds The focus of the city's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the city's financing requirements. In particular, unassigned fund balance may serve as a useful measure of the city's net resources available for spending at the end of the fiscal year. As of the end of the fiscal year 2017, the city's governmental funds reported combined ending fund balances of$52,864,147 an increase of$16,737,609 over the prior year. Approximately 30.0 percent or $15,884,502 of this total amount constitutes assigned and unassigned fund balances, which is available for spending at the government's discretion.The restricted fund balance is$31,914,910 or 60.4 percent of the total fund balance. Most of the restricted fund balance is dedicated for park acquisition and development or for street maintenance and improvements. Other restricted resources include building inspection, library improvements, Police services and future debt service. The remainder of fund balance is either committed for resources constrained on use by the city council via a city ordinance or a council resolution or is non- spendable to indicate that it is not available for discretionary spending, such as advances to other funds and prepaids. General Fund The General Fund is the chief operating fund of the city. At the end of the fiscal year 2017, the unassigned fund balance was $14,884,712 or approximately 95.5 percent of the total fund balance of$15,591,124. As a measure of the General Fund's liquidity, it may be useful to compare fund balance to total fund expenditures. Unassigned fund balance represents 49.2 percent of total General Fund expenditures. The fund balance of the General Fund increased by $1,956,200 or 14.4 percent. The increase is primarily attributable to a decrease in transfers out to the Parks Utility Fund due to the parks and recreation fee 23 City of Tigard, Oregon Management's Discussion and Analysis implemented April 1, 2016. The fee partially pays for park support and operations directly, allowing the General Fund to reduce the amount of expenses contributed. Other revenue increases included interest revenue, up more than 35.6 percent over the fiscal year 2017, and increases in intergovernmental revenue sharing with the State of Oregon and Washington County taxing entities. Gas Tax Fund This fund records shared revenues from state and county taxes on the sale and use of motor vehicle fuel. The majority of the revenue comes from a flat per-gallon tax on gasoline. Funds are restricted for construction, reconstruction, improvement, repair, maintenance,operation,and use of public highways, roads,streets, and roadside rest areas. This revenue source can also be used for street lighting and cleaning, storm drainage, traffic control devices, and cost of administration. At the end of fiscal year 2017,the fund balance was$2,679,225, an increase of$329,446 from the prior year. Total revenues of $3,528,772 are used to fund street maintenance, street lighting and debt service on transportation bonds. The increase in fund balance is primarily due to an increase in gas tax revenues and higher interest earnings on investments. Transportation Development Tax Fund This fund accounts for the traffic impact fees collected on roads within the city's urban service areas. Funds are used for highways and transit capital improvements in the city's capital improvement plan. At the end of fiscal year 2017, the fund balance was $7,528,398, an increase of $4,136,091 from the prior year. Charges for services increased approximately $1.5 million or 58.2 percent due to an increase in development fees associated primarily with the River Terrace housing development. Parks SDC Fund This fund accounts for revenues associated with the collections of Parks System Development Charges.These revenues are used to fund the acquisition, development and expansion of additional recreation spaces and facilities that are included in the city's Park Master Plan. At the end of fiscal year 2017, the fund balance was $8,136,660, an increase of $4,207,428 from the prior year. Charges for services increased approximately$2.2 million or 100.0 percent due to an increase in system development charges for the new River Terrace housing development. Proprietary Funds The city's proprietary funds include the Sanitary Sewer, Stormwater, Water, and Internal Services Funds. The unrestricted net position of the business-type activities at year-end amounted to $30,776,467 with individual fund unrestricted net position at: • Sanitary Sewer $5,245,224 • Stormwater $7,548,329 • Water Funds $17,982,914 The factors concerning the finances of these funds have already been addressed in the discussion of the city's business-type activities. 24 City of Tigard, Oregon Management's Discussion and Analysis General Fund Budgetary Highlights The city council approved three supplementary budget amendments to the adopted General Fund budget. Total final adopted budgeted expenditures increased by $183,754 from the original budgeted numbers. Budgeted transfers out of the General Fund was increased by $139,860 and General Fund contingency was decreased by$246,860 or 21 percent. Following are noteworthy changes from the original budget to the final adopted budget in the General Fund: • Transfers Out - $120,000 to the Central Services Fund for consultant fees related to the project management of the operational levy. Lighter, Quicker, Cheaper project to replace deteriorating railroad steps in connecting neighborhoods added $19,860. • Public Works - Full-time Engineering Supervisor position added $83,000 to assist in future council goals for development. Engineering Water Project Coordinator added for part of the fiscal year at $19,000 and will continue working on the Water Master Plan in future years. The contingency transactions account for increase in budgeted expenditures not related to increased revenues. There was no effect on ending General Fund budgetary fund balance as a result of these budget amendments. Noteworthy variances from the final adopted budget to actual revenues in the General Fund are as follows: • Interest earnings—variance with budget in the amount of$289,474 due to an increase in the Local Government Investment Pool interest rates of.58 percent. • Intergovernmental revenues — variance with budget of $1,201,511 due to increases in local and federal grants plus additional library funds from Washington County Cooperative Library Services (WCCLS). Capital Asset and Debt Administration Capital Assets Governmental Activities The city's investment in capital assets for its governmental activities as of June 30, 2017, amounts to $219,410,373 (net of accumulated depreciation). This investment in capital assets primarily includes land, right-of-ways, buildings and improvements, machinery and equipment, office equipment and infrastructure. The infrastructure includes roads, curbs and sidewalks, signage, streetlights and right-of-ways. The total increase in the city's investment in governmental activities capital assets was$1,184,857 or approximately 0.5 percent over the prior year. The city recorded approximately$1.5 million in developer contributions for street and transportation infrastructure due to the growing subdivisions within the city. Other governmental asset additions include street and transportation projects and park development as resources from the parks bonds issued in fiscal year 2011 continues to be spent. Expenditures on capital assets were higher than overall depreciation expense, leading to the increase in net capital assets. Business-type Activities The city's investment in capital assets for its business-type activities as of June 30, 2017, amounts to $242,037,622 (net of accumulated depreciation). In addition to machinery, equipment and vehicles, the capital assets include the sanitary sewer collection system, stormwater, and water systems. Total increase in 25 City of Tigard, Oregon Management's Discussion and Analysis the city's investment in business-type activities capital assets was$13,584,273 or 5.9 percent.This increase is primarily noted in the Water fund for the construction in progress on the water partnership with the City of Lake Oswego to manage the expansion and upgrade of the city's water supply system. In addition,contributed capital for water, sanitary sewer and stormwater were significantly higher than in the prior year as a result of the increased development throughout the city. Capital Assets, net of depreciation Governmental Business-Type Total Activities Activities 2017 2016 2017 2016 2017 2016 Land $ 26,009,224 $ 25,889,224 $ 5,237,285 $ 5,237,285 $ 31,246,509 $ 31,126,509 Construction in progress 5,621,366 3,451,257 172,290,721 158,706,084 177,912,087 162,157,341 Buildings and building improvements 14,533,523 14,975,332 688,200 733,614 15,221,723 15,708,946 Land improvements 1,883,044 2,445,839 - - 1,883,044 2,445,839 Sewer system - - 17,041,202 16,913,483 17,041,202 16,913,483 Stormwater system - - 11,533,929 10,855,787 11,533,929 10,855,787 Water system - - 34,896,334 35,578,202 34,896,334 35,578,202 Machinery and equipment 240,453 320,672 214,794 243,764 455,247 564,436 Autos and trucks 862,935 771,050 135,158 185,130 998,093 956,180 Office equipment 1,387,993 962,754 - - 1,387,993 962,754 Infrastructure 168,871,836 169,409,388 - - 168,871,836 169,409,388 Total Capital Assets $219,410,373 $218,225,516 $242,037,623 $228,453,349 $461,447,996 $446,678,865 The following chart indicates the city's capital assets as of June 30, 2017. Additional information on the city's capital assets can be found in the notes on pages 64-65 of this report. Total Capital Assets Land 6.8% Construction in Infrastructure progress 36.6% 38.6% Office - r equipment 0.3% Autos and trucks 0.2% Machinery and Water system ' equipment 7.6% Storm Sewer Buildings and Land building 0.1% drainage system system 3 7% improvements improvements 2.5% 0.4% 3.3% 26 City of Tigard, Oregon Management's Discussion and Analysis Debt Outstanding As of year-end, the city had total debt outstanding of$160,271,117. Of this amount $20,675,137 is general obligation and full faith and credit bonds; $136,420,282 represents water revenue bonds; $1,907,007 represents a note payable;$213,219 represents special assessment bonded debt or local improvement district bonds; $1,040,000 for urban renewal bank loan payable; and the remainder of the city's debt represents capitalized leases. Both general obligation bonds and full faith credit bonds are direct obligations pledging the full faith and credit of the city. Total debt decreased by$5,098,836 or approximately 3.1 percent during the current fiscal year. In fiscal year 2015 the city issued $1,300,000 for the city center development agency for urban renewal in governmental activities. The balance on this loan is $1,040,000 at year-end. For the business-type activity, in fiscal year 2015 the city issued water revenue bonds with a par value of$30,810,000. Proceeds from these bonds are used to fund water capital projects, primarily the costs associated with the Tigard/Lake Oswego Water Partnership. The city began making principal payments on these bonds during fiscal year 2017. The city also has an outstanding note payable that is part of a grant and low interest loan package provided to the city to make improvements to one of the city's water reservoirs. These funds were part of the American Recovery and Reinvestment Act(ARRA). The outstanding balance on this debt is$1,907,007 at year-end. During fiscal year 2015,in anticipation of issuing water revenue bonds,the city received a revenue bond rating of Al from Moody's Investors Service and AA-from Standard&Poor's Ratings Services. During fiscal year 2017 Moody's Investor Services reviewed the city's water enterprise activities and upgraded the city's rating from Al to Aa3. The State of Oregon statutes limit the amount of general obligation debt that cities can issue to 3.0 percent of the real market value of all taxable property within the city limits.The current debt limitation for the city for general obligation debt is $270 million, which is significantly in excess of the city's outstanding general obligation debt. The following chart indicates the city's long-term liabilities as of June 30, 2017. Additional information on the city's debt can be found on pages 66-70 of this report. Governmental Business-Type Total Activities Activities 2017 2016 2017 2016 2017 2016 General obligation $ 20,675,137 $ 22,862,084 - - $ 20,675,137 $ 22,862,084 Local improvement 213,219 296,319 - - 213,219 296,319 Bank loan payable 1,040,000 1,170,000 - - 1,040,000 1,170,000 Capital lease 15,472 30,290 - - 15,472 30,290 Note payable - - $ 1,907,007 $ 2,007,952 1,907,007 2,007,952 Revenue bonds - - 136,420,282 139,003,308 136,420,282 139,003,308 Total Outstanding Debt $ 23,276,325 $ 24,358,693 $138,327,289 $141,011,260 $ 160,271,117 $165,369,953 27 City of Tigard, Oregon Management's Discussion and Analysis Total Outstanding Long-Term Debt General Bank loan obligation payable 12.9% 0.7% Capital Revenue bonds Lease 85.1% 0.01% Local improvement 0.1% Note payable 1.2 Economic Factors and Budget Information for Next Year The following economic factors currently affect the city and were considered in developing the city's budget for fiscal year 2018: • The unemployment rate for the Portland metropolitan area was 3.9 percent at the end of the fiscal year, June 30, 2017. This is almost in line with the State of Oregon rate of 3.7 percent and less than the national average, which is 4.4 percent for June 2017. Economic conditions have finally reached levels commensurate with a typical economic recovery. • Property tax revenues are the single largest sources of revenue in the General Fund and it accounts for 46 percent of ongoing revenues. Tigard's low permanent property tax levy rate ($2.51/1,000 AV), which is the second lowest of any city within Washington County with a population over 5,000, is limited and therefore, General Fund growth is particularly sensitive to taxable growth. Property tax revenues are forecasted to increase by 3 percent based on prior year's modest growth in assessed values and anticipated development. • There is room to increase Tigard's very low permanent property tax rate. One approach to address this would be through a local option levy. For example,a local option levy of$1.00/$1,000 of assessed value would still keep Tigard's rate below average in Washington County and would raise approximately $6,000,000 annually, allowing the city to maintain the current level of services being provided.The city is currently considering a local option levy based upon recommendations from The Levy and Bond Task Force, a group consisting of 17 Tigard community members tasked with determining the rate and timing of a potential levy. • The River Terrace subdivision will provide an increase in revenue for the city, at an estimated 0.5 percent in annual revenue growth. This subdivision will add approximately 200 homes a year for the next five years, thus creating additional demands on city services. • The City of Tigard issues licenses for businesses operating within the city limits. As of June 30, 2017, there were 2,992 businesses licensed in the city as compared to 2,976 a year ago. Business license revenues are highly sensitive to economic conditions. With the planned economic development in 28 City of Tigard, Oregon Management's Discussion and Analysis urban renewal, the city projects a continued increase in business licenses, but any increase will be gradual over time. The fiscal year 2017 budget includes an increase to the business license fee in order to fund an additional officer in the Commercial Crimes Unit in the Police Department. • Fiscal year 2018 budget includes a plan to fund maintenance and development on park and recreational areas. Park land has been acquired each year since the issuance of the 2011 Parks General Obligation Bonds. Parks are currently funded through a park and recreation fee that is anticipated to generate approximately $1 million annually. Additional transfers from the General Fund to the Park Utility special revenue fund are also necessary for maintenance and upkeep on the city's expanding park system. • Business-type activities are funded through water,sanitary sewer and stormwater management rates and system development charges. The city has the ability to increase rates to keep pace with growing costs as well as increasing demands on the system infrastructure. Tigard's water customer charge and water usage charge increased by 3.25 percent in fiscal year 2017 and will increase each year thereafter through 2019. Sanitary Sewer revenues increased in fiscal year 2017 due to a city surcharge of$2.07/dwelling unit that went into effect late in 2016. This surcharge will help the city fund the growing infrastructure needs of the system. Clean Water Services sets rates for sanitary sewer and storm water management(SWM). Fiscal year 2018 budget includes a 3.0 percent increase for sanitary sewer rates, 6.5 percent increase for stormwater management rates and a 3.54 percent combined sewer and SWM rate increase for the average residential customer. The rate increases are necessary to expand, replace and upgrade aging infrastructure and to meet state and federal pollution control requirements. All of these factors were considered in preparing the city's budget for fiscal year 2017-2018. The current forecast shows that in the short-term the city's financial condition is stable in most funds. The fiscal year 2018 budget continued addressing a projected General Fund deficit that had been forecasted to occur earlier than what is now projected. City budgets are developed to address the continuing challenge of flat revenues and increasing expenditure rates. Requests for Information This financial report is designed to provide a general overview of the City of Tigard's finances for all those with an interest in the city's finances. Questions concerning any of the information provided in the report or requests for additional financial information should be addressed to: City of Tigard Financial and Information Services Director 13125 SW Hall Blvd. Tigard, Oregon 97223 29 No content appears on this page by design. Basic Financial Section CITY OF TIGARD,OREGON STATEMENT OF NET POSITION June 30,2017 Governmental Business-Type ASSETS Total Activities Activities Cash and investments $ 25,217,686 $ 30,224,726 $ 55,442,412 Accounts receivable,net 4,237,447 5,183,669 9,421,116 Property taxes receivable 794,388 - 794,388 Assessment liens receivable 373,342 - 373,342 Prepaids 141,554 2,083 143,637 Inventory 37,143 189,105 226,248 Property held for resale - 445,042 445,042 Restricted cash and investments 32,743,626 17,708,763 50,452,389 Capital assets: Land and construction in process 31,630,590 177,528,005 209,158,595 Other capital assets(net of accumulated depreciation) 187,779,783 64,509,617 252,289,400 Total assets 282,955,559 295,791,010 578,746,569 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pension 5,928,602 - 5,928,602 Total deferred outflows 5,928,602 - 5,928,602 LIABILITIES Accounts payable and accrued liabilities 3,429,134 3,605,619 7,034,753 Deposits 1,675,600 44,091 1,719,691 Due to others 666,949 - 666,949 Internal balances 102,320 (102,320) - Unearned revenue 75,374 - 75,374 Accrued interest payable 88,434 2,612,813 2,701,247 Due within one year: Notes payable - 103,973 103,973 Bonds payable 2,255,840 2,644,356 4,900,196 Accrued compensated absences 1,279,197 96,884 1,376,081 Bank loan payable 130,000 - 130,000 Special assessment bonded debt with government commitment 89,200 - 89,200 Capital lease 15,472 - 15,472 Due in more than one year: Notes payable - 1,803,034 1,803,034 Bonds payable 18,419,297 133,775,926 152,195,223 Accrued compensated absences 53,300 3,286 56,586 Bank loan payable 910,000 - 910,000 Special assessment bonded debt with government commitment 124,019 - 124,019 Net other post employment benefit obligation 1,633,150 168,199 1,801,349 Net pension liability 11,216,998 - 11,216,998 Total liabilities 42,164,284 144,755,861 186,920,145 DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pension 439,266 - 439,266 Total deferred inflows 439,266 - 439,266 NET POSITION Net investment in capital assets 199,214,099 104,870,812 304,084,911 Restricted for: Transportation construction,maintenance and utility undergrounding 16,994,300 - 16,994,300 Park development and improvements 2,272,522 - 2,272,522 Water system construction and improvements - 8,551,308 8,551,308 Debt service 1,832,468 6,836,562 8,669,030 Building development plan review and inspection 4,519,413 - 4,519,413 Library capital improvements 477,966 - 477,966 Law enforcement equipment 216,517 - 216,517 Unrestricted 20,753,326 30,776,467 51,529,793 Total net position $ 246,280,611 $ 151,035,149 $ 397,315,760 The accompanying notes are an integral part of the basic financial statements. 30 CITY OF TIGARD,OREGON STATEMENT OF ACTIVITIES for the year ended June 30,2017 Program Revenues Charges Operating for Grants and Functions/Programs Expenses Services Contributions Governmental activities: Community services $ 23,461,915 $ 2,482,811 $ 3,628,412 Public works 8,342,833 5,165,280 3,159,576 Community development 5,831,389 4,341,128 - Policy and administration 3,583,751 363,583 92,739 Interest on long-term debt 949,136 - - Total governmental activities 42,169,024 12,352,802 6,880,727 Business-type activities: Sewer 2,595,606 3,013,314 - Stormwater 2,738,673 3,275,083 - Water 8,261,895 20,926,322 - Total business-type activities 13,596,174 27,214,719 - Total $ 55,765,198 $ 39,567,521 $ 6,880,727 The accompanying notes are an integral part of the basic financial statements. 31 Net(Expense)Revenue and Changes in Net Position- Primary Government Capital Grants and Governmental Business-type Contributions Activities Activities Total $ - $ (17,350,692) $ - $ (17,350,692) 15,086,543 15,068,566 - 15,068,566 604,964 (885,297) - (885,297) - (3,127,429) - (3,127,429) (949,136) - (949,136) 15,691,507 (7,243,988) - (7,243,988) 432,473 - 850,181 850,181 407,096 - 943,506 943,506 6,830,819 - 19,495,246 19,495,246 7,670,388 - 21,288,933 21,288,933 $ 23,361,895 (7,243,988) 21,288,933 14,044,945 General Revenues: Property taxes,levied for general purposes 15,298,993 - 15,298,993 Property taxes,levied for debt service 2,317,805 - 2,317,805 Franchise fees 5,890,113 - 5,890,113 Unrestricted intergovernmental revenues 2,074,428 285,524 2,359,952 Interest earnings 824,213 106,628 930,841 Miscellaneous 268,380 270,628 539,008 Total general revenues 26,673,932 662,780 27,336,712 Transfers between Governmental and Business-type Activites 291,314 (291,314) - Change in net position 19,721,258 21,660,399 41,381,657 Net position,beginning 226,559,353 129,374,750 355,934,103 Net position,ending $ 246,280,611 $ 151,035,149 $ 397,315,760 32 CITY OF TIGARD,OREGON GOVERNMENTAL FUNDS-BALANCE SHEET June 30,2017 Transportation Other Total General Gas Tax Development Parks SDC Governmental Governmental Fund Fund Tax Fund Fund Funds Funds ASSETS Cash and cash equivalents $ 14,926,763 $ 2,757,730 $ - $ - $ 4,590,545 $ 22,275,038 Accounts receivable 3,085,448 287,728 572 776 802,629 4,177,153 Property taxes receivable 671,106 - - - 123,282 794,388 Assessment liens receivable - - 3,413 - 369,929 373,342 Interest receivable 11,660 - - - 10,047 21,707 Advances to other funds 655,112 - - - - 655,112 Prepaids 51,300 - - - 23,425 74,725 Restricted cash and cash equivalents - - 8,073,304 8,137,499 _ 16,532,823 32,743,626 Total assets $ 19,401,389 $ 3,045,458 $ 8,077,289 $ 8,138,275 $ 22,452,680 $ 61,115,091 LIABILITIES Accounts payable and accrued liabilities $ 1,042,174 $ 99,274 $ 545,478 $ 1,615 $ 1,303,871 $ 2,992,412 Deposits 914,959 266,959 - - 493,682 1,675,600 Due to others 490,456 - - - 176,493 666,949 Advances from other funds - - - - 757,432 757,432 Unearned revenue - - - - 59,660 59,660 Total liabilities 2,447,589 366,233 545,478 1,615 2,791,138 6,152,053 DEFERRED INFLOWS OF RESOURCES Resources not yet available: Property taxes 896,578 - 122,873 1,019,451 Municipal court receivable 466,098 - - 466,098 Special assessment liens - - 3,413 609,929 613,342 Total deferred inflows of resources 1,362,676 - 3,413 - 732,802 2,098,891 FUND BALANCES Nonspendable: Advances to other funds 655,112 - - - - 655,112 Prepaids 51,300 - - - 16,485 67,785 Restricted for: Street maintenance and improvements - 2,679,225 7,528,398 - 4,634,400 14,842,023 Debt service - - - - 1,339,666 1,339,666 Park development and improvements - - - 8,136,660 2,272,522 10,409,182 Underground utilities - - - - 110,143 110,143 Building inspection - - 4,519,413 4,519,413 Police services - - 216,517 216,517 Library improvements - - 477,966 477,966 Committed for: Street maintenance and improvements - - - - 3,125,501 3,125,501 Urban forestry - - - - 1,216,337 1,216,337 Assigned to: City facilities - - - - 1,016,775 1,016,775 Park and recreation - - 708,311 708,311 Unassigned 14,884,712 - - - (725,296) 14,159,416 Total fund balances 15,591,124 2,679,225 7,528,398 8,136,660 18,928,740 52,864,147 Total liabilities,deferred inflows of resources and fund balances $ 19,401,389 $ 3,045,458 $ 8,077,289 $ 8,138,275 $ 22,452,680 $ 61,115,091 The accompanying notes are an integral part of the basic financial statements. 33 CITY OF TIGARD,OREGON RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION GOVERNMENTAL FUNDS June 30,2017 Fund Balances-Governmental Funds $ 52,864,147 Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. Governmental capital assets $ 318,341,659 Less accumulated depreciation (98,931,286) 219,410,373 Pension assets or liabilities,with related deferred outflows of resources and deferred inflows of resources,are not reported in governmental funds,but are reported on the statement of net position. The amounts included in governmental activities on the statement of net position: Net pension liability (11,216,998) Deferred outflows of resources related to pensions 5,928,602 Deferred inflows of resources related to pensions (439,266) (5,727,662) Other long-term assets are not available to pay for current-period expenditures and therefore are deferred in the governmental funds and recognized as revenue in the Statement of Activities. Property taxes earned but not available 791,797 Franchise fees earned but not available 137,516 Municipal court receivable 466,098 Grant receivable 330,138 Assessment liens 373,342 2,098,891 Internal service funds are used by management to charge the cost of administrative functions as well as fleet and property management to individual funds.The assets and liabilities of the internal service funds are included in governmental activities in the statement of activities. 2,027,242 Accrued compensated absences are not due and payable in the current period and therefore are not (1,038,067) reported in the funds. Long-term liabilities,including bonds payable are not due and payable in the current period and therefore are not reported in the governmental funds. Bonds payable (20,675,137) Loans payable (1,040,000) Special assessment debt bonded with government commitment (213,219) Capital leases payable (15,472) Accrued interest payable,not due and payable in the current period (88,434) Net other post employment benefit(OPEB)obligation (1,322,051) Net Position of Governmental Activities $ 246,280,611 The accompanying notes are an integral part of the basic financial statements. 34 CITY OF TIGARD,OREGON GOVERNMENTAL FUNDS- STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE for the year ended June 30,2017 Transportation Other Total General Gas Tax Development Parks SOC Governmental Governmental Fund Fund Tax Fund Fund Funds Funds REVENUES Taxes $ 14,795,445 $ 3,150,308 $ - $ - $ 3,603,168 $ 21,548,921 Franchise fees 5,886,791 - - - - 5,886,791 Special assessments - - - - 52,146 52,146 Licenses and permits 2,991,946 93,663 - - 3,577,181 6,662,790 Intergovernmental revenues 6,985,926 - - - 1,242,767 8,228,693 Charges for services 2,297,499 - 4,179,562 4,661,765 6,525,364 17,664,190 Fines and forfeitures 688,767 - - - 24,292 713,059 Rental revenues - - - - 84,425 84,425 Interest earnings 396,616 243,690 5,147 5,449 148,846 799,748 Miscellaneous revenues 101,681 41,111 - - 121,881 264,673 Total revenues 34,144,671 3,528,772 4,184,709 4,667,214 15,380,070 61,905,436 EXPENDITURES Current operating: Community services 21,734,723 - - - 190,446 21,925,169 Public works 4,119,250 1,917,807 - - 2,254,148 8,291,205 Community development 3,613,095 - - - 2,194,741 5,807,836 Policy and administration 787,681 - - - - 787,681 Debt service: Principal - 494,501 - .. 1,883,599 2,378,100 Interest - 90,060 - - 887,479 977,539 Capital outlay - - - - 4,705,720 4,705,720 Total expenditures 30,254,749 2,502,368 - - 12,116,133 44,873,250 Excess of revenues over expenditures 3,889,922 1,026,404 4,184,709 4,667,214 3,263,937 17,032,186 OTHER FINANCING SOURCES(USES) Transfer in - 150,000 - - 4,605,215 4,755,215 Transfer out (1,933,722) (846,958) (48,618) (459,786) (1,760,708) (5,049,792) Total other financing sources(uses) (1,933,722) (696,958) (48,618) (459,786) 2,844,507 (294,577) Net change in fund balances 1,956,200 329,446 4,136,091 4,207,428 6,108,444 16,737,609 Fund balances-beginning of the year 13,634,924 2,349,779 3,392,307 3,929,232 12,820,296 36,126,538 Fund balances-end of year $ 15,591,124 $ 2,679,225 $ 7,528,398 $ 8,136,660 $ 18,928,740 $ 52,864,147 The accompanying notes are an integral part of the basic financial statements. 35 CITY OF TIGARD,OREGON RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES GOVERNMENTAL FUNDS for the year ended June 30,2017 Net change in fund balances-Governmental Funds $ 16,737,609 Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures, However in the Statement of Activities the cost of those assets is depreciated over their estimated useful lives Expenditures for capital assets 5,652,762 Current year depreciation expense (5,738,429) Contributed capital 1,635,350 Loss on disposal of capital assets (348,672) 1,201,011 Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds Increase in deferred inflows of resources-property taxes 63,051 Increase in franchise fees 3,322 Decrease in municipal court receivable (24,358) Increase in grants receivable 314,484 Decrease in assessment liens (52,146) 304,353 Long-term debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Position. Repayment of long-term debt is reported as an expenditure in the governmental funds, but a reduction of long-term liabilities in the Statement of Net Position. Principal payments 2,356,329 Reimbursement on internal loans (176) Amortization of premium on long-term debt 21,947 2,378,100 Some expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds: Decrease in accrued interest payable 28,649 Increase in compensated absences (37,667) Pension expense (1,141,867) Increase in accrued other post employment benefits(OPEB)liability (33,421) (1,184,306) Internal service funds are used by management to charge the cost of administrative functions as well as fleet and property management to individual funds. The net revenue of internal service funds is reported with governmental activities. Change in Net Position- Internal Service Funds 284,491 Change in Net Position of Governmental Activities $ 19,721,258 The accompanying notes are an integral part of the basic financial statements. 36 CITY OF TIGARD,OREGON PROPRIETARY FUNDS STATEMENT OF NET POSITION June 30,2017 Business-type Activities- Governmental Enterprise Funds Activities- Sanitary Internal Sewer Stormwater Water Totals Service Funds ASSETS Current assets: Cash and cash equivalents $ 5,574,969 $ 7,063,523 $ 17,586,234 $ 30,224,726 $ 2,942,648 Accounts receivable 1,730,782 553,938 2,898,949 5,183,669 38,587 Advances to other funds-Interfund loan 102,320 - - 102,320 - Prepaids - 833 1,250 2,083 66,826 Property held for resale 185,021 260,021 - 445,042 - Inventory 11,932 11,932 165,241 189,105 37,143 Total current assets 7,605,024 7,890,247 20,651,674 36,146,945 3,085,204 Noncurrent assets: Restricted cash and cash equivalents - - 17,708,763 17,708,763 - Capital assets: Land and construction in process 807,416 171,752 176,548,837 177,528,005 - Other capital assets(net of accumulated depreciation) 17,152,086 11,980,545 35,376,986 64,509,617 - Total noncurrent assets 17,959,502 12,152,297 229,634,586 259,746,385 - Total assets 25,564,526 20,042,544 250,286,260 295,893,330 3,085,204 LIABILITIES Current liabilities: Accounts payable and accrued liabilities 2,299,708 264,477 1,041,434 3,605,619 436,719 Unearned revenue - - - - 15,714 Deposits - 8,833 35,258 44,091 - Accrued interest payable - - 2,612,813 2,612,813 - Accrued compensated absences 20,324 23,230 53,330 96,884 283,242 Current portion of bonds payable - - 2,644,356 2,644,356 - Current portion of note payable - - 103,973 103,973 - Total current liabilities 2,320,032 296,540 6,491,164 9,107,736 735,675 Noncurrent liabilities: Accrued compensated absences 689 788 1,809 3,286 11,188 Note payable-long-term portion - - 1,803,034 1,803,034 - Bonds payable-long-term portion - - 133,775,926 133,775,926 Net OPEB obligation 39,079 44,590 84,530 168,199 311,099 Total noncurrent liabilities 39,768 45,378 135,665,299 135,750,445 322,287 Total liabilities 2,359,800 341,918 142,156,463 144,858,181 1,057,962 NET POSITION Net investment in capital assets 17,959,502 12,152,297 74,759,013 104,870,812 - Restricted for capital projects - - 8,551,308 8,551,308 - Restricted for debt service - - 6,836,562 6,836,562 - Unrestricted 5,245,224 7,548,329 17,982,914 30,776,467 2,027,242 Total net position $ 23,204,726 $ 19,700,626 $ 108,129,797 $ 151,035,149 $ 2,027,242 The accompanying notes are an integral part of the basic financial statements. 37 CITY OF TIGARD,OREGON PROPRIETARY FUNDS STATEMENT OF REVENUES,EXPENSES,AND CHANGES IN FUND NET POSITION for the year ended June 30,2017 Business-type Activities- Governmental Enterprise Funds Activities- Sanitary Internal Sewer Stormwater Water Totals Service Funds OPERATING REVENUES Charges for services $ 3,013,314 $ 3,275,083 $ 20,926,322 $ 27,214,719 $ 9,302,474 Miscellaneous revenues 81,858 3,982 184,788 270,628 297,402 Total operating revenues 3,095,172 3,279,065 21,111,110 27,485,347 9,599,876 OPERATING EXPENSES Salaries and wages 471,145 663,690 1,148,575 2,283,410 5,324,878 Contracted services 7,575 302,836 1,785,477 2,095,888 1,027,432 General,administrative and other 1,398,509 1,253,451 3,572,453 6,224,413 3,573,741 Depreciation 718,377 518,696 1,411,940 2,649,013 - Total operating expenses 2,595,606 2,738,673 7,918,445 13,252,724 9,926,051 Operating income(loss) 499,566 540,392 13,192,665 14,232,623 (326,175) NON-OPERATING REVENUES(EXPENSES) Interest earnings 5,206 6,800 94,622 106,628 24,775 Interest expense - - (343,450) (343,450) - Intergovernmental revenue 198,519 87,005 - 285,524 - Total non-operating revenue 203,725 93,805 (248,828) 48,702 24,775 Net income(loss)before contributions and transfers 703,291 634,197 12,943,837 14,281,325 (301,400) System development revenue 127,623 3,300 6,532,039 6,662,962 - Capital contributions 304,850 403,796 298,780 1,007,426 - Transfers in 39 85,597 58,751 144,387 586,161 Transfers out (141,577) (128,668) (165,456) (435,701) (270) Change in net position 994,226 998,222 19,667,951 21,660,399 284,491 Net position--beginning of year 22,210,500 18,702,404 88,461,846 129,374,750 1,742,751 Net position--end of year $ 23,204,726 $ 19,700,626 $ 108,129,797 $ 151,035,149 $ 2,027,242 The accompanying notes are an integral part of the basic financial statements. 38 CITY OF TIGARD,OREGON PROPRIETARY FUNDS STATEMENT OF CASH FLOWS for the year ended June 30,2017 Business-type Activities- Governmental Enterprise Funds Activities- Sanitary Internal Sewer Stormwater Water Totals Service Funds CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 15,683,943 $ 3,831,365 $ 20,741,795 $ 40,257,103 $ 9,283,933 Payments to suppliers (13,303,938) (2,109,858) (8,389,862) (23,803,658) (4,628,800) Payments to employees (473,172) (665,018) (1,181,215) (2,319,405) (5,321,536) Other receipts 81,858 3,982 184,788 270,628 299,878 Net cash provided(used)by operating activities 1,988,691 1,060,471 11,355,506 14,404,668 (366,525) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Principal collected on interfund loan 175 - - 175 - Transfers to other funds (141,577) (128,668) (165,456) (435,701) (270) Transfers from other funds 39 - 58,751 58,790 586,161 Net cash(used)by noncapital financing activities (141,363) (128,668) (106,705) (376,736) 585,891 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES System development revenue 127,623 3,300 6,532,039 6,662,962 - Intergovernmental revenue 198,519 87,005 - 285,524 - Principal payments - - (2,683,971) (2,683,971) - Interest payments - - (344,966) (344,966) - Acquisition of capital assets (677,021) (688,817) (13,774,425) (15,140,263) Net cash(used)by capital and related financing activities (350,879) (598,512) (10,271,323) (11,220,714) - CASH FLOWS FROM INVESTING ACTIVITIES Interest earnings 5,206 6,800 94,622 106,628 24,775 Net increase(decrease)in cash and investments 1,501,655 340,091 1,072,100 2,913,846 244,141 Cash and investments--beginning of the year 4,073,314 6,723,432 34,222,897 45,019,643 2,698,507 Cash and investments--end of the year $ 5,574,969 $ 7,063,523 $ 35,294,997 $ 47,933,489 $ 2,942,648 RECONCILIATION OF OPERATING INCOME(LOSS)TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income(loss) $ 499,566 $ 540,392 $ 13,192,665 $ 14,232,623 $ (326,175) Cash flows reported in other categories: Depreciation expense 718,377 518,696 1,411,940 2,649,013 - Change in assets and liabilities: Receivables (248,532) (138,754) (190,014) (577,300) (16,065) Prepaid expenses 640 - 640 (33,552) Inventory 13,215 13,215 (8,967) 17,463 (5,222) Accounts payable and accrued liabilities 1,008,092 127,610 (3,022,961) (1,887,259) 11,147 Accrued compensated absences (2,996) (2,729) (34,790) (40,515) (4,650) Deposits 5,483 5,483 - OPEB obligation 969 1,401 2,150 4,520 7,992 Net cash provided(used)by operating activities $ 1,988,691 $ 1,060,471 $ 11,355,506 $ 14,404,668 $ (366,525) Non-cash capital and related financing activities: Developer contributed sewer,stormwater and water lines $ 304,850 $ 403,796 $ 298,780 $ 1,007,426 - The accompanying notes are an integral part of the basic financial statements. 39 Fiduciary Funds This funds account for resources received and held by the city in a fiduciary capacity. Disbursements from these funds are made in accordance with the plan document agreement or the applicable Internal Revenue Code Section. The accrual basis of accounting is used to record transactions in the pension trust funds. Pension Trust Fund—this fund accounts for the city's retirement plan for employees. The retirement plan is a defined contribution plan 401(a). CITY OF TIGARD,OREGON STATEMENT OF FIDUCIARY NET POSITION PENSION TRUST June 30,2017 ASSETS Investments: Restricted stable value fund $ 5,246,758 Restricted corporate bonds 1,087,539 Restricted corporate stocks 21,137,982 Total assets 27,472,279 NET POSITION Restricted for pension benefits $ 27,472,279 The accompanying notes are an integral part of the basic financial statements. 40 CITY OF TIGARD,OREGON STATEMENT OF CHANGES IN FIDUCIARY NET POSITION PENSION TRUST for the year ended June 30,2017 ADDITIONS Contributions-employer $ 1,375,848 Contributions-plan members 268,998 Investment income 2,956,439 Total additions 4,601,285 DEDUCTIONS Benefit payments and withdrawals 1,092,561 Administrative expenses 4,840 Total deductions 1,097,401 Change in net position 3,503,884 Net position of assets held in trust for pension benefits: Beginning of year 23,968,395 End of year $ 27,472,279 The accompanying notes are an integral part of the basic financial statements. 41 Notes to Basic Financial Statements City of Tigard, Oregon Notes to Basic Financial Statements 1. Summary of Significant Accounting Policies Financial Reporting Entity The City of Tigard, Oregon under its Charter of 1961, is governed by an elected mayor and four council members who comprise the City Council. The City Council appoints a City Manager, who acts as the administrative head of government for the city. The accompanying financial statements present the city (primary government) and its component unit (the city's urban renewal agency), an entity for which the city is financially accountable. Financial accountability is defined as the appointment of a voting majority of the organization's governing board and where (1) the city is able to significantly influence the programs or services performed or provided by the organization or (2) the city is legally entitled to or can otherwise access the organization's resources. Blended component units, although legally separate entities, are, in substance, part of the city's operations. Component units may include organizations which are fiscally dependent on the city in that the city approves the budget, issues debt or levies taxes. The city has two blended component unit included in this financial report. Blended Component Units The Tigard City Center Development Agency (CCDA) was created in 2006 when the voters approved the creation of an urban renewal area for 20 years with maximum principal indebtedness of $22 million. In May 2017 the voters approved the creation of a second urban renewal area, the Tigard Triangle Urban Renewal Area (TTURA), for 35 years with maximum principal indebtedness of $188 million. The TTURA and the CCDA were created under the provisions of the Oregon Revised Statutes, Chapter 457 (ORS 457). The City of Tigard Council members serve as the CCDA's governing body. The activities of the CCDA are included in the city's financial statements as a blended component unit. The TTURA did not have any activities for the fiscal year ended June 30, 2017. The CCDA and the TTURA are legally separate entities, which are 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 CCDA and TTURA as determined on the basis of budget adoption, taxing authority, and funding. The purpose of the CCDA and the TTURA is to undertake urban renewal projects and activities pursuant to the city's downtown redevelopment plan. The financial results of the CCDA are reported herein as debt service and capital projects funds. The CCDA prepared a separate component unit financial report, which is published on the city's website www.CityofTigardOregon.gov or a copy can be obtained from the city's administrative offices at 13125 SW Hall Blvd, Tigard, Oregon 97223. 42 City of Tigard, Oregon Notes to Basic Financial Statements The city administers a single employer defined contribution plan (the Pension Plan) covering only city employees who are not eligible to participate in OPERS. Named fiduciaries on the Pension Plan are certain city management employees and the plan is fiscally dependent upon the city's contributions. As a result, the Pension Plan is reported as a fiduciary fund in the city's financial statements. Joint Venture The city has entered into an intergovernmental agreement (IGA) with the City of Lake Oswego for the Lake Oswego/Tigard Water Partnership. The Water Partnership created a reliable water system to deliver high-quality drinking water to the City of Tigard and the City of Lake Oswego. The new water system replaced aging, vulnerable, at-capacity infrastructure with a cutting-edge system designed to the highest seismic resiliency standards. Final governance of the system has yet to be decided. Currently the city's investment in the partnership is part of the Construction in progress section of the capital assets. Once the project is complete, the city's portion of the assets will be capitalized. Basic Financial Statements Basic financial statements are presented at both the government-wide and fund financial level. Both levels of statements categorize activities as either governmental or business-type. Governmental activities, which are normally supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Government-wide financial statements display information on all of the non-fiduciary activities of the city. For the most part, the effect of interfund activity has been removed from these statements. These statements focus on the sustainability of the city as an entity and the change in aggregate financial position resulting from the activities of the fiscal year. These aggregated statements consist of the Statement of Net Position and the Statement of Activities. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Indirect expenses are recovered through internal service fund charges. These indirect expenses are allocated based on a full-cost approach, thereby allocating indirect expenses among 43 City of Tigard, Oregon Notes to Basic Financial Statements functions with the objective of allocating all expenses. Taxes and other items not included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds, and the pension trust fund, even though the pension trust fund is excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. Fund financial 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, or fiduciary. Currently, the city has governmental, proprietary, and fiduciary fund types. Non-major funds are combined into a single column in the basic financial statements and are detailed in the supplementary information. Basis of Presentation The financial transactions of the city 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/expenses. 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. The city may also elect to add major funds that city officials believe are particularly useful to financial statement users. The city has elected to report the enterprise funds as major as well as include the Gas Tax, Transportation Development Tax, and Parks SDC Funds as major funds in the current financial statements. Non-major funds are combined in a column in the fund financial statements and detailed as supplementary information in the financial report. 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. The financial statements of the city have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). GAAP statements include all relevant GASB pronouncements. The city applies the provisions of all applicable GASB statements that define requirements and the reporting model for the annual financial reports of state and local governments. The city has recorded capital and certain other long-term assets 44 City of Tigard, Oregon Notes to Basic Financial Statements and liabilities in the Statement of Net Position, reported all revenues and the cost of providing services under the accrual basis of accounting in the Statement of Activities, and uses the direct method of reporting cash flows. The government-wide, proprietary fund and fiduciary fund financial statements are presented on a full accrual basis of accounting with an economic resource measurement focus. An economic resource focus concentrates on an entity or fund's net position. All transactions and events that affect the total economic resources (net position) during the period are reported. An economic resources measurement focus is inextricably connected with full-accrual accounting. Under the full accrual basis of accounting, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of the timing of related cash inflows and outflows. Governmental funds financial statements are presented on a modified accrual basis of accounting with a current financial resource measurement focus. This measurement focus concentrates on the fund's resources available for spending currently or in the near future. Only transactions and events affecting the fund's current financial resources during the period are reported. Similar to the connection between an economic resource measurement focus and full accrual accounting, a current financial resource measurement focus is inseparable from a modified accrual basis of accounting. Under modified accrual 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 city considers revenues to be available if they are collected within 60 days of the end of the current fiscal year. Property taxes, intergovernmental and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered susceptible to accrual as revenue of the current period. All other revenues are considered to be measurable and available only when cash is received by the city. A deferred inflow of resources, shown as unavailable revenue, arises in the governmental funds balance sheet when potential revenue does not meet both the measurable and available criteria for recognition in the current year. This unavailable revenue consists primarily of uncollected property taxes and assessments not deemed available to finance operation of the current period. In the government-wide Statement of Activities, with a full accrual basis of accounting, revenue must be recognized as soon as it is earned regardless of its availability. Thus, the liability created on the governmental fund balance sheet for unavailable revenue is eliminated. 45 City of Tigard, Oregon Notes to Basic Financial Statements Similar to the way revenues are recorded, governmental funds only record those expenditures that affect current financial resources. Principal and interest on general long-term debt is recorded as a fund liability only when due, or to the extent that it is expected to be liquidated with expendable financial resources. However, in the government-wide financial statements with full accrual basis of accounting, all expenditures affecting the economic resource status of the government must be recognized. Thus, the expense and related accrued liability for long- term portions of debt, interest, other postemployment benefits and compensated absences must be included. Since the governmental fund statements are presented on a different measurement focus and basis of accounting than the government-wide statements' governmental column, a reconciliation is necessary to explain the adjustments needed to transform the fund-based financial statements into the governmental column of the government-wide presentation. This reconciliation is part of the basic financial statements. Interfund activity consists of transfers, services provided and/or used, reimbursements, advances and loans. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between enterprise and various other city functions. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions and 3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services, and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the city's Sanitary Sewer, Stormwater and Water Funds are charges to customers for sales and services. The Sanitary Sewer, Stormwater and Water Funds recognize fees intended to recover the cost of connecting new customers to the city's utility systems as non-operating revenues. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses and overheads, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. The fiduciary fund accounts for the resources held by the city in a custodial capacity, on behalf of the employees of the city. 46 City of Tigard, Oregon Notes to Basic Financial Statements New Accounting Pronouncements and Accounting Standards During the fiscal year ended June 30, 2017, the city implemented the following GASB pronouncements: GASB Statement No. 77, Tax Abatements This statement defines a tax abatement and contains required disclosures about a reporting government's own tax abatement agreements and those that are entered into by other governments and that reduce the reporting government's tax revenues. The city implemented this standard for the fiscal year ending June 30, 2017. See Note 12 for additional information. The following pronouncements have been issued by the Governmental Accounting Standards Board (GASB) but not yet implement by the city: GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pension This statement replaces the requirements of Statements No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions (OPEB), as amended, and Statement No. 57, OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans,for OPEB. Statement No. 74, Financial Reporting for Pasternployment Benefit Plans Other Than Pension Plans, establishes new accounting and financial reporting requirements for OPEB plans. GASB Statement No. 75 will be effective for the city, fiscal year ending June 30, 2018. GASB Statement No. 81, Irrevocable Split-Interest Agreements This statement improves accounting and reporting for irrevocable split-interest agreements by providing recognition and measurement guidance for situations in which a government is a beneficiary of the agreement. Examples of these types of agreements include charitable lead trusts, charitable remainder trusts and life-interests in real estate. This statement is effective for fiscal year ending June 30, 2018. The city has not yet evaluated the impact of this standard to the financial statements. GASB Statement No. 83, Certain Asset Retirement Obligations Issued November 2016, this statement addresses accounting and financial reporting for certain asset retirement obligations. GASB 83 will be effective for the city, fiscal year ending June 30, 2019. 47 City of Tigard, Oregon Notes to Basic Financial Statements GASB Statement No. 84, Fiduciary Activities Issued January 2017, this statement establishes criteria for identifying fiduciary activities of all state and local governments. GASB 84 will be effective for the City, fiscal year ending June 30, 2020. GASB Statement No. 85, Omnibus 2017 Issued March 2017, this Statement is to address practice issues that have been identified during implementation and application of certain GASB Statements. This Statement addresses a variety of topics including issues related to blending component units, good will fair value measurement and application, and postemployment benefits (pensions and OPEB). Specifically, this Statement addresses the following topics: • Blending a component unit in circumstances in which the primary government is a business-type activity that reports in a single column for financial statement presentation • Reporting amounts previously reported as good will and "negative" goodwill • Classifying real estate held by insurance entities • Measuring certain money market investments and participating interest-earning investment contract at amortized cost • Timing of the measurement of pension or OPEB liabilities and expenditures recognized in financial statements prepared using the current financial resources measurement focus • Recognizing on-behalf payments for pensions or OPEB in employer financial statements • Presenting payroll-related measures in required supplementary information for purposes of reporting by OPEB plans and employers that provide OPEB • Simplifying certain aspects of the alternative measurement method for OPEB • Accounting and financial reporting for OPEB provided through certain multiple- employer defined benefit OPEB plans. GASB Statement No. 85 will be effective for the City, fiscal year ending June 30, 2018. GASB Statement No. 86, Certain Debt Extinguishment Issues Issued May 2017, the purpose of this Statement is to improve consistency in accounting and financial reporting for in-substance defeasance of debt by providing guidance for transactions in which cash and other monetary assets acquired with only existing resources-resources other than the proceeds of refunding debt-are placed in an irrevocable trust for the sole purpose of extinguishing debt. This Statement also improves accounting and financial reporting for prepaid insurance on debt that is extinguished and notes to financial statements for debt that is defeased in substance. GASB Statement No. 86 will be effective for the City, fiscal year ending June 30, 2018. 48 City of Tigard, Oregon Notes to Basic Financial Statements GASB Statement No. 87, Leases This Statement was issued June 2017 to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments and increases the usefulness of governments' financial statements. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments' leasing activities. GASB Statement No. 87 will be effective for the City for fiscal year ending June 30, 2021. The city will implement new GASB pronouncements no later than the required effective date. The city is currently evaluating whether or not the above listed new GASB pronouncements will have a significant impact to the City's financial statements. Assets, Deferred Outflows/Inflows of Resources, Liabilities, and Net Position/Fund Balance Cash and Investments Cash and cash equivalents are generally considered short-term, highly liquid investments with a maturity of three months or less from the purchase date. The city's cash and cash equivalents consists of cash on hand, demand deposits and cash deposits that are held in an investment pool, Local Government Investment Pool, that has the general characteristic of a demand deposit account (deposits of additional cash may be made at any time and cash may be withdrawn at any time without prior notice or penalty). Interest earned on cash and cash equivalents is allocated monthly based on each fund's average cash balance as a proportion of the city's total. For purposes of the statement of cash flows, the city considers the proprietary funds' cash and cash equivalents to be cash on hand, demand deposits and cash deposits that are held in an investment pool with original maturities of three months or less. Investments are recorded at fair value in accordance with GASB Statement No. 72, Fair Value Measurement and Application. Accordingly, the change in fair value of investments is recognized as an increase or decrease to investment assets and investment income. Interest earned on investments is allocated monthly based on each fund's average cash balance as a proportion of the city's total cash and investments. The city reports cash with fiscal agent and certain cash and investments as restricted because their use is limited by parties external to the city. Restrictions may be from bond proceeds, imposed by creditors, other governments, laws and/or enabling legislation. When both restricted and unrestricted resources are available for use, it is the city's policy to use restricted resources first, then unrestricted resources as they are needed. 49 City of Tigard, Oregon Notes to Basic Financial Statements Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as "Advances to/Advances from other funds". Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances." 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 city also has receivables outstanding for assessments on private property. These assessments include street and sidewalk improvements, sewer line installations and deferral of certain impact fees (system development charges). Proprietary fund receivables are recorded as revenue when earned, including services earned but not billed. The receivables of proprietary funds include billing for residential and commercial customers utilizing the city's water, sanitary sewer and stormwater management services. The city's receivables, including property taxes, assessments and proprietary fund receivables are deemed to be substantially collectible. Tax and assessments receivable can be recovered through foreclosure on the subject property. Services can be disconnected if proprietary fund receivables remain unpaid. Accordingly, no allowance for doubtful accounts is deemed necessary for these receivables. The city records a receivable and related allowance for municipal court accounts receivable. Accounts payable to vendors and contractors include general accounts payable, retainage payable, deposits payable and other accrued liabilities not included in short-term or long-term liabilities. Inventories and Prepaids Inventories of parts, materials and supplies are stated at cost on the first-in, first-out basis, in the proprietary funds. The consumption method is used in accounting for inventory for all funds on the budgetary basis. The consumption method is used for the government-wide presentation as well as the proprietary funds and business-type activities. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaids in both government-wide and fund financial statements. Payments classified as prepaid are primarily items that are being amortized such as prepaid insurance. 50 City of Tigard, Oregon Notes to Basic Financial Statements Property Held for Resale Property held for resale is recorded as an asset and includes land and building inventory stated at the lower of cost or market. At year-end no reductions in value were necessary, therefore recorded amounts were equal to original cost. 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 or business-type activities columns in the government-wide financial statements, and in the proprietary fund statements. Capital assets are charged to expenditures as purchased or constructed in the governmental fund statements, and capitalized in the proprietary fund statements. Capital assets are recorded at historical cost or estimated historical cost. Donated assets, donated works of art and similar items, and capital assets received in a service concession arrangement are recorded at acquisition value. Capital assets are defined by the city 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 Position 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 Machinery and equipment 5-10 Autos and trucks 5-10 Infrastructure 20-40 Deposits In general deposits represent developer funds collected by the city, primarily when issuing permits for new construction and infrastructure development. Various funds report deposits, including the General Fund, Gas Tax Fund, Electrical Inspection Fund, Building Fund, Urban Forestry Fund, Stormwater Fund, and Water Fund. Deposits are held by the city until the 51 City of Tigard, Oregon Notes to Basic Financial Statements obligations for the projects have been completed or forfeited for non-compliance with development requirements as determined by city inspection staff. Unearned Revenues Unearned revenues will be recognized as revenue in the fiscal year they are earned in accordance with the accrual basis of accounting. Revenue is considered earned when all eligibility criteria are met, and the amount is measurable. Deferred Outflows/Inflows of Resources Deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. Deferred outflows of resources follow assets on the Statement of Net Position. Deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and therefore will not be recognized as an inflow of resources (revenue) until that time. In the Statement of Net Position, this includes resources that are received before the city has met eligibility requirements related to time. In the governmental fund financial statements, deferred inflows of resources include revenues that are measureable but not available. For purposes of measuring the net pension (asset) liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Oregon Public Employees Retirement System (OPERS) and additions to/deductions from OPERS's fiduciary net position have been determined on the same basis as they are reported by OPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Accrued Compensated Absences It is the city's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. There is no liability for unpaid accumulated sick leave, since the city does not have a policy to pay any amounts when employees separate from the city. Vacation pay is accrued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in the governmental funds only when it has matured, for example, as result of employee resignations or retirements. Long-term Debt In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the 52 City of Tigard, Oregon Notes to Basic Financial Statements applicable governmental activities, business-type activities, or proprietary fund type in the Statement of Net Position. Bond premiums and discounts are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are treated as period costs in the year of issue. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources while premiums and discounts on debt issuances are reported as other financing sources and uses, respectively. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Other Post-Employment Benefits (OPEB) The city's net OPEB obligation is recognized as a long-term liability in the government-wide financial statements, the amount of which is actuarially determined. Net Pension Liability The city reports its proportionate share of the Net Pension Liability of the Oregon Public Employees Retirement System (OPERS). A negative Net Pension Liability is reported as a Net Pension Asset. The net pension asset/liability is measured as the portion of the present value of projected benefits payment to be provided through the pension plan to current active and inactive qualifying employees that is attributed to those employees past periods of service less the amount of the pension plan's fiduciary net position. Contributions Capital contributions from developers are credited to contribution revenue and the related capital assets are recorded in the government-wide financial statements. Fund Balances and Net Position In the fund financial statements, the fund balance for governmental funds is reported in a hierarchy of classifications 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. The city reports fund balances into the following categories: Nonspendable for resources cannot be spent because they are either in a nonspendable form or legally or contractually required to be maintained intact. Resources in nonspendable form include inventories, prepaids, deposits, advances from internal loans and property assets held for resale. 53 City of Tigard, Oregon Notes to Basic Financial Statements Restricted for amounts with constraints placed on the use of resources are either (1) externally imposed by creditors (such as through debt covenants), grantors, contributors, laws or regulations of other governments; or (2) imposed by law through constitutional provisions or enabling legislation. Committed for amounts that City Council passes an ordinance or council resolution, a formal action made by the entity's highest level of decision making authority, which places specific constraints on how the resources may be used. Resolutions and ordinances are considered equally binding in that the City Council can modify or rescind the ordinance or resolution at any time through passage of an additional ordinance or resolution. Assigned for resources that are constrained by the government's intent to use them for a specific purpose, but are neither restricted nor committed, are reported as assigned fund balance. The City Council expresses their intent to use a resource for a specific purpose by including that resource in the adopted annual budget for funds outside of the General Fund. Assigned fund balances are not reported in the General Fund as the city has not established a policy regarding the assignment of funds. Unassigned fund balance is the residual classification for the General Fund. This classification represents fund balance that is not assigned, committed, restricted or nonspendable within the General Fund. This classification is also used to report any deficit fund balance amounts in other governmental funds. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the city considers restricted amounts to have been spent. Likewise, when an expenditure is incurred for purposes for which either committed or assigned fund balance is available, the city considers committed or assigned amounts to have been spent. On the government-wide Statement of Net Position, the proprietary funds' Statement of Net Position, and the fiduciary funds' Statement of Fiduciary Net Position, net position is segregated into restricted and unrestricted balances. Restrictions are limitations on how the net position may be used. Restrictions may be placed on net position by an external party that provided the resources, by enabling legislation or by the nature of the asset. The net investment in capital assets component of net position represents total capital assets less accumulated depreciation, less debt directly related to capital assets. This amount is reported on the Statement of Net Position and in the financial statements for Proprietary Fund types. 54 City of Tigard, Oregon Notes to Basic Financial Statements Use of Estimates In preparing the city'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. Fund Types: The city's financial operations are accounted for in the following funds: Governmental funds Governmental funds finance most governmental functions of the city. The acquisition, use and balances of the city's expendable financial resources and the related liabilities, excluding those accounted for in proprietary funds, are accounted for through governmental funds. The measurement focus is upon determination of changes in current financial resources, rather than upon net position determination. The following are the city's major governmental funds: General Fund - This fund accounts for the city's general operations. It is used to account for all transactions not specifically required to be accounted for in the city's other funds. Gas Tax Fund — This special revenue fund records shared revenues from the state and county taxes on the sale and use of motor vehicle fuel. Funds are used for construction, reconstruction, improvement, repair, maintenance, operation and use of public highways, roads, streets, and roadside rest areas. Monies may also be used for street lighting and cleaning, storm drainage, traffic control devices and administration costs. Transportation Development Tax Fund — This capital project fund accounts for traffic impact fees collected on roads within the city's urban service areas. Funds are used for highways and transit capital improvements in the city's Capital Improvement Plan. Parks System Development Charges (SDC) Fund —This capital project fund accounts for revenues associated with the collection of Parks SDCs. Resources are used to fund the acquisition, development and expansion of additional recreation spaces and facilities that are included in the city's Park Master Plan. Proprietary funds Proprietary funds are used to account for the acquisition, operation and maintenance of sewer, storm drainage, and water systems in the city. These funds are entirely or 55 City of Tigard, Oregon Notes to Basic Financial Statements predominantly self-supported through user charges to customers. The measurement focus is upon net income determination, rather than upon determination of changes in current financial resources. The following enterprise funds are the city's major proprietary funds: Enterprise funds: Sanitary Sewer Fund -This fund accounts for the city's sewer utility operations. Stormwater Fund — This fund accounts for the city's storm drainage operations which consists of the following two budgetary funds: Stormwater Fund and Water Quality/Quantity Fund. Water Fund - This fund accounts for the city's water operations which consists of the following four budgetary funds: Water Fund, Water SDC Fund, Water CIP Fund and Water Debt Service Fund. Additionally, the city reports the following fund types: Nonmajor governmental funds: Special Revenue funds account for restricted or committed revenues for specific purposes. Debt Service funds account for the accumulation of resources to pay principal and interest on the city's long-term obligations. Capital Projects funds account for the accumulation of resources for construction or acquisition of facilities and equipment. Internal service funds Internal service funds account for goods and services provided by one city department to another on a cost reimbursement basis. The internal service funds account for the activities of health insurance for employees, liability insurance, workers' compensation insurance, facilities and fleet and support and administrative services. Fiduciary Fund Fiduciary funds focus on net position and changes in net position. The city's fiduciary fund is the defined contribution pension plan for the benefit of employees. 56 City of Tigard, Oregon Notes to Basic Financial Statements 2. Stewardship, Compliance and Accountability Budgetary information A budget is prepared for each fund, except for the Pension Trust Fund, under the modified accrual basis of accounting used by governmental funds, which is in accordance with the legal requirements of Oregon Local Budget Law. The resolution authorizing appropriations sets the maximum level of expenditures for each fund and may not legally be over expended. Appropriations lapse at the end of each fiscal year. Appropriations are made at the major program level for each fund, for example, Community Services, Public Works, Community Development, Policy and Administration, Debt Service, Capital Improvements and Contingency. The detail budget document is required to contain more detailed information for the above-mentioned expenditure categories. After budget approval, the City Council may approve supplemental budgeted appropriations if an occurrence, condition, or need exists which had not been ascertained at the time the budget was adopted. A supplemental budget may require hearings before the public, publications in newspapers and approval by the City Council. Original and supplemental budgets may be modified by the use of appropriations transfers between the levels of control. Such transfers require approval by the City Council. Management may not amend the budget without council approval. The City Council approved three supplemental budgets throughout the fiscal year. For GAAP presentation, the transfers from non-operating funds for services provided by the internal service funds and the General Fund are considered revenues and expenses/expenditures, as appropriate, but may be considered to be interfund transfers for budgetary purposes. Expenditures in Excess of Appropriations and Deficit Fund Balance Oregon state law requires disclosure of fund expenditures in excess of budgeted appropriations. For the year-ended June 30, 2017, expenditures exceeded appropriations in the Bancroft Bond debt service fund by $225. This over expenditure was due to the interest payable accrual not being sufficiently budgeted. The over expenditure was covered by available fund balance. The Urban Renewal Agency Capital Projects reported a deficit fund balance $725,296 on a GAAP basis as June 30, 2017. This deficit is due to internal loans from the General Fund and the Sewer Fund that have been spent on activities in the downtown urban renewal district. The loans or advances are repaid over time with future revenues from tax increment collections. For additional details on advances and interfund transactions see Note 7. 57 City of Tigard, Oregon Notes to Basic Financial Statements 3. Cash and Investments The city maintains a cash and investment pool that is available for use by all funds except the Pension Trust Fund. Each fund type's portion of this pool is displayed on the combined balance sheet as "cash and investments". Unrestricted and restricted cash and investments for the primary government are reported in governmental and business-type activities. Restricted balances reported in cash and investments are restricted by legal or contractual requirements. Restricted investments reported in fiduciary activities represent the Pension Trust Fund. These investments are for the city's defined contribution plan and held separately from city funds and managed by a third party. Cash and investments, restricted and unrestricted, at June 30, 2017: Primary Fiduciary Type Government Activities Total State Investment Pool (LGIP) $ 82,358,681 $ - $ 82,358,681 Money markets 5,896,160 - 5,896,160 Deposits with financial institutions 9,588,549 - 9,588,549 Cash with fiscal agent 62,822 - 62,822 Petty cash/cash on hand 7,394 - 7,394 Total cash 97,913,606 - 97,913,606 U.S. Agencies 7,477,375 - 7,477,375 Collective trust/stable value fund - 5,246,758 5,246,758 Corporate bonds 503,820 1,087,539 1,591,359 Corporate stocks - 21,137,982 21,137,982 Total investments 7,981,195 27,472,279 35,453,474 Total cash and investments $ 105,894,801 $ 27,472,279 $ 133,367,080 Governmental Business Type Fiduciary Activities Activities Activities Total Cash and investments $ 25,217,686 $ 30,224,726 $ - $ 55,442,412 Restricted cash and investments 32,743,626 17,708,763 27,472,279 77,924,668 Total cash and investments $ 57,961,312 $ 47,933,489 $ 27,472,279 $ 133,367,080 Deposits Custodial Credit Risk. There is a risk that, in the event of a bank failure, the city's deposits may not be returned. Cash with financial institutions include bank demand deposits and bank money market accounts. The combined total book balance at June 30, 2017 was $15,484,709 58 City of Tigard, Oregon Notes to Basic Financial Statements and the total bank balance is $15,283,860. Of these deposits, $500,000 was covered by federal depository insurance and $14,783,860 was collateralized in accordance with Oregon Revised Statutes (ORS) 295. The Federal Depository Insurance Corporation (FDIC) provides deposit insurance up to $250,000 for each institution. Institutions with deposits in excess of FDIC coverage participate in the Oregon Public Funds Collateralization Program (PFCP) as defined in Oregon Revised Statutes (ORS) 295. This provides additional protection for public funds in the event of a bank failure, although it does not guarantee 100 percent protection. The Office of the State Treasurer categorizes the financial institutions in Oregon. Based on that categorization, banks must pledge collateral valued at between 10 percent and 110 percent of their public fund deposits. In the event of a bank failure, the entire pool of collateral pledged by all qualified Oregon public funds bank depositories is available to repay deposits of public funds of government entities. The Office of the State Treasurer maintains a list of qualified financial institutions for the deposit of public funds in excess of FDIC insurance. The financial institutions holding city deposits are noted on the State Treasurer's qualified list. The city's investment policy states bank deposits with any one qualified institution shall not exceed 20 percent of the portfolio. In addition, the policy states bank deposits of any one qualified financial institution shall not exceed 1 percent of the institution's total assets. The city is in compliance with this policy at year-end. Investments State statutes authorize the city to invest primarily in general obligations of the U.S. government and its agencies, certain bonded obligations of Oregon municipalities, bank repurchase agreements, bankers' acceptances, certain commercial paper and corporate bonds and the State of Oregon Local Government Investment Pool. Annually, the city adopts an investment policy in connection with the budget process. The Local Government Investment Pool (LGIP) is administered by the Oregon State Treasury. The LGIP is an open-ended no-load diversified portfolio offered to any agency, political subdivision or public corporation of the State who by law is made the custodian of, or has control of, any fund. The LGIP is commingled with the State's short-term funds. In seeking to best serve local governments of Oregon, the Oregon Legislature established the Oregon Short- Term Fund Board, which is not registered with the U.S. Securities and Exchange Commission as an investment company. The purpose of the Board is to advise the Oregon State Treasury in the management and investment of the LGIP. The Oregon Audits Division of the Secretary of State's Office audits the LGIP annually. 59 City of Tigard, Oregon Notes to Basic Financial Statements At June 30, 2017, the city's fair value in the LGIP was $82,358,681. Financial statement for the Oregon Short-Term Fund can be found on line at: http://www.oregon.gov/treasury/Divisions/Investment/Pages/Oregon-Short-Term-Fund- (OSTF).aspx In accordance with the implementation of GASB Statement No. 72, Fair Value Measurement and Application, the city categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets; Level 2 inputs are significant other observable inputs; Level 3 are significant unobservable inputs. The city has the following investments and recurring fair value measurements as of June 30, 2017: • U.S. Agencies at $7,477,375 are valued using a matrix-pricing model (Level 2). • Corporate Bonds at $503,820 are valued using a matrix-pricing model (Level 2). The LGIP includes investments in external investment pools and does not meet the requirements for "leveling" disclosures as established in GASB Statement No. 72. Therefore, fair value of the LGIP is determined by the pool's underlying portfolio. The city's Pension Trust Fund accounts for the defined contribution pension plan for eligible employees. The employees direct the investment options within the plan. Funds invested in the plan are for the sole benefit of the employee and therefore restricted. At June 30, 2017 the total restricted investments in the pension plan were $27,472,279. The value of the pension plan's investments at year-end are measured at fair value by a third party custodian based on the net asset value of the individual mutual funds, and therefore, are not classified within the fair value hierarchy noted above. Interest rate risk. In accordance with its investment policy, the city manages its exposure to declines in fair value by limiting the individual maturities in its investment portfolio to eighteen months or less. The city's investment policy states that at least 30 percent of the portfolio can have maturities less than ninety days and up to 20 percent of the portfolio can have maturities from eighteen months to thirty-six months. Per the policy, no investments will be made for a period to exceed thirty-six months. The city does not actively trade investments, usually holding them to maturity. The city was in compliance with its policy at year-end. 60 City of Tigard, Oregon Notes to Basic Financial Statements At June 30, 2017, the city had the following investments and maturities at fair value: Weighted Average Maturity Risk (in Investment Type Fair Value Concentration months) Local Government Investment Pool (LGIP) * $ 82,358,681 91% < 1 U.S. Agencies 7,477,375 8% 1.76 Corporate Bonds 503,820 1% < 1 Total investments $ 90,339,876 100% Portfolio weighted average maturity 1.93 * LGIP is considered an investment per the city's investment policy. For financial reporting, LGIP is considered cash and cash equivalents due to the liquid nature of the accounts. Concentration of credit risk: Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The city's policy for investing in individual issuers varies depending on the type of investments. Following are maximum instrument diversification per city policy. At year-end the city was in compliance with this policy. • U.S. Agency securities are restricted to no more than 90 percent • Certificates of deposit are restricted to no more than 25 percent • Corporate bonds are restricted to no more than 35 percent. In addition, investments in corporate bonds of any one issuer may not exceed 5 percent of the investment portfolio. Credit risk: For an investment, this is the risk that, in the event of failure of the counterparty, the city will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. All of the city's investments, except for the Local Government Investment Pool, are held in safekeeping by the financial institution in the city's name. The city's policy, which adheres to State of Oregon law, is to limit its Corporate and Municipal investments to the following: Issuers within Oregon must be rated "A" (bonds) or A- 2 / P-2 (commercial paper) or better by Standard and Poor's, Moody's Investors Service or any other nationally recognized statistical rating organization. Issuers not in Oregon must be rated AA/Aa (bonds) or A-1/ P-1 (commercial paper) or better. 61 City of Tigard, Oregon Notes to Basic Financial Statements At June 30, 2017 the city's investments were rated as follows: % of Fair Investment Type Moody's S & P Fitch Fair Value Value State Investment Pool (LGIP) N/R N/R N/R $ 82,358,681 91.18% Corporate Bonds Aa2 AA A+ 503,820 0.56% US Agency Aaa AA+ AAA 499,815 0.55% US Agency N/R N/R N/R 500,330 0.55% US Agency N/R AA+ N/R 998,190 1.10% US Agency Aaa AA+ AAA 497,425 0.55% US Agency Aaa N/R AAA 991,800 1.10% US Agency N/R N/R N/R 998,190 1.10% US Agency N/R N/R N/R 494,365 0.55% US Agency N/R AA+ N/R 999,730 1.11% US Agency Aaa AA+ N/R 998,190 1.10% US Agency Aaa AA+ AAA 499,340 0.55% Total investments $ 90,339,876 100.00% At year-end, the city held the following restricted and unrestricted cash and investments: June 30, 2017 Investments $ 7,981,195 Local Government Investment Pool 83,358,681 Deposits with financial institutions 9,588,549 Petty cash 7,394 Cash with fiscal agent 62,822 Total primary government cash and investments 105,894,801 Statement of Fiduciary Net Position - Pension Trust Fund 27,472,279 Total cash and investments $ 133,367,080 4. Accounts Receivable Accounts receivable as of June 30, 2017 for the city's individual major funds, nonmajor and internal service funds in the aggregate, including the applicable allowances for uncollectible accounts are noted below: 62 City of Tigard, Oregon Notes to Basic Financial Statements Allowance Gross for Doubtful Receivables, Accounts Taxes Assessments Receivables Accounts Net Governmental Activities General $4,941,720 $671,106 $ - $5,612,826 $ (1,844,612) $ 3,768,214 Gas tax 287,728 - - 287,728 - 287,728 Transportation development tax 572 - 3,413 3,985 - 3,985 Parks SDC 776 - - 776 - 776 Nonmajor governmental 812,676 123,282 369,929 1,305,887 - 1,305,887 Internal service 38,587 - - 38,587 - 38,587 $6,082,059 $794,388 $ 373,342 $7,249,789 $ (1,844,612) $ 5,405,177 Business-Type Activities Sanitary sewer $1,730,782 $ - $ - $1,730,782 $ - $ 1,730,782 Stormwater 553,938 553,938 - 553,938 Water 2,898,949 2,898,949 - 2,898,949 $5,183,669 $ - $ - $5,183,669 $ - $ 5,183,669 Total receivables $10,588,846 Shown on the Statement of Net Positions as: Accounts receivable,net $ 9,421,116 Property taxes receivable 794,388 Assessment liens receivable 373,342 $10,588,846 Under State of Oregon statutes, municipal court receivables are valid for ten years and are then renewable for another ten years. According to city policy, these receivables are turned over to an external collection agency after approximately 180 days. Historical collection percentages average about 25 percent. Accordingly, at June 30, 2017, $2,459,481 was outstanding for municipal court receivables with a related allowance for doubtful accounts of$1,844,612. Assessment liens receivable represent the uncollected amounts levied against benefited property for the cost of local capital improvements. Because the assessments are liens against the benefited property, an allowance for uncollectible amounts is not deemed necessary. Substantially all assessments are payable over a period of 10 to 20 years. Assessments bear interest from 5.2 to 9.4 percent. At June 30, 2017, the portion of the assessments receivable balance that represents delinquent accounts is insignificant. 63 City of Tigard, Oregon Notes to Basic Financial Statements 5. Capital Assets Capital asset activity for governmental activities for the year ended June 30, 2017 was as follows: Balances Balances Governmental activities June 30, 2016 Additions Deletions Transfers June 30,2017 Non-depreciable: Land $ 25,889,224 $ 120,000 $ - $ - $ 26,009,224 Construction in progress 3,451,257 4,276,648 (318,510) (1,788,029) 5,621,366 Total non-depreciable 29,340,481 4,396,648 (318,510) (1,788,029) 31,630,590 Depreciable: Building and improvements 23,344,063 199,970 - - 23,544,033 Land improvements 8,760,942 - - - 8,760,942 Machinery and equipment 2,633,346 115,824 (13,802) - 2,735,368 Autos and trucks 2,689,886 398,157 (214,185) - 2,873,858 Office equipment 2,495,637 646,009 - - 3,141,646 Infrastructure 242,351,844 1,515,350 - 1,788,029 245,655,223 Total depreciable 282,275,718 2,875,310 (227,988) 1,788,029 286,711,069 Accumulated depreciation: Building and improvements (8,368,731) (641,779) - - (9,010,510) Land improvements (6,315,103) (562,795) - - (6,877,898) Machinery and equipment (2,312,674) (196,043) 13,802 - (2,494,915) Autos and trucks (1,918,836) (276,111) 184,023 - (2,010,923) Office equipment (1,532,883) (220,770) - - (1,753,653) Infrastructure (72,942,456) (3,840,931) - - (76,783,387) Total accumulated depreciation (93,390,683) (5,738,429) 197,826 - (98,931,286) Governmental activities capital assets, net $218,225,516 $1,533,529 $(348,672) $ - $219,410,373 Depreciation expense for governmental activities is charged to functions as follows: Community services $ 369,127 Public works 5,162,734 Community development 7,306 Policy and administration 199,262 Total depreciation for governmental activities $ 5,738,429 64 City of Tigard, Oregon Notes to Basic Financial Statements Capital assets activity for business-type activities for the year ended June 30, 2017, was as follows: Balances Balances Business-type activities June 30, 2016 Additions Deletions Transfers June 30, 2017 Non-depreciable: Land $ 5,237,285 $ - $ - $ - $ 5,237,285 Construction in progress 158,706,084 15,235,803 (67,443) (1,583,724) 172,290,720 Total non-depreciable 163,943,369 15,235,803 (67,443) (1,583,724) 177,528,005 Depreciable: Building and improvements 1,879,733 - - - 1,879,733 Sewer system 28,095,809 304,850 - 477,733 28,878,392 Stormwater system 19,087,126 403,796 - 765,263 20,256,185 Water system 65,342,421 298,780 - 340,728 65,981,929 Equipment 1,798,279 57,500 - - 1,855,779 Autos and trucks 1,796,998 - - - 1,796,998 Total depreciable 118,000,366 1,064,926 - 1,583,724 120,649,016 Accumulated depreciation: Building and improvements (1,146,119) (45,414) - - (1,191,533) Sewer system (11,182,326) (654,864) - - (11,837,190) Stormwater system (8,231,339) (490,917) - - (8,722,256) Water system (29,764,219) (1,321,376) - - (31,085,595) Equipment (1,554,515) (86,470) - - (1,640,985) Autos and trucks (1,611,868) (49,972) - - (1,661,840) Total accumulated depreciation (53,490,386) (2,649,013) - - (56,139,399) Business-type activities capital assets, net $228,453,349 $13,651,716 $(67,443) $ - $242,037,622 Total interest costs incurred in business-type activities in fiscal year ended June 30, 2017 was $6,262,339, of which $5,364,347 was capitalized to construction in progress for the Lake Oswego-Tigard water partnership project. Depreciation expense for business-type activities is charged to activities as follows: Sanitary sewer $ 718,377 Stormwater 518,696 Water 1,411,940 Total depreciation for business-type activities $ 2,649,013 65 City of Tigard, Oregon Notes to Basic Financial Statements 6. Long-term Debt and Other Debt Governmental Activities General Obligation Bonds and Full Faith and Credit Bonds Library Bonds: In fiscal year 2010-2011 the city issued $8,655,000 of general obligation bonds, series 2011B, for a current refunding of bonds originally issued in 2002 to build a new library. Interest rates on the new bonds range from 3.0 percent to 4.0 percent on specific maturities. At June 30, 2017 the outstanding balance on the 2011B bonds was $4,820,000. Parks Bonds: In fiscal year 2010-2011 the city issued $17,000,000 of general obligation bonds, series 2011A at a premium of $297,213. The proceeds of the bonds were issued to acquire open spaces, protect and improve parklands. At least 80 percent of the bond proceeds went towards land acquisition for open spaces, parks or trail corridors with up to 20 percent towards improvements and development of park land. Interest rates range from 3.0 percent to 4.75 percent on specific maturities. At June 30, 2017, the outstanding balance on the bonds was $13,280,000 and the balance of the unamortized premium was $170,137. Transportation Bonds: In fiscal year 2009-2010 the city issued $7,250,000 of full faith and credit Build America Bonds. The bonds were issued to fund specific street and highway improvements. Interest rate on the bonds is set at 4.35 percent. At June 30, 2017 the outstanding balance on the bonds was$2,405,000. Future maturities of bond principal and interest on general obligation bonds and full faith and credit bonds are as follows: Year Ending June 30, Principal Interest Total 2018 $ 2,235,000 $ 845,043 $ 3,080,043 2019 2,305,000 763,313 3,068,313 2020 2,390,000 667,713 3,057,713 2021 1,625,000 568,625 2,193,625 2022 1,695,000 502,925 2,197,925 2023-2027 5,640,000 1,729,300 7,369,300 2028-2031 4,615,000 558,051 5,173,051 $ 20,505,000 $ 5,634,970 $ 26,139,970 Premium 170,137 Total $ 20,675,137 66 City of Tigard, Oregon Notes to Basic Financial Statements Local Improvement District Bonds In fiscal year 2001-2002 the city issued Local Improvement District (LID) bonds in the amount of$1,307,969 for improvement on 69th Avenue. Interest rate on the LID bonds is 7.25 percent; payable first from assessments to benefited properties and second, from the general credit of the city. The balance of the LID bonds at June 30, 2017 was $213,219 with principal and interest payments as follows: Year Ending June 30, Principal Interest Total 2018 $ 89,200 $ 13,866 $ 103,066 2019 95,800 7,279 103,079 2020 28,219 1,021 29,240 Total $ 213,219 $ 22,166 $ 235,385 Bank Loan Payable In fiscal year 2014-2015 the city entered into a financing agreement with a bank in the amount of$1,300,000 at an interest rate of 3.00 percent. The loan is for urban renewal projects within the City Center Urban Renewal Area (CCDA). In connection with the financing agreement, CCDA and the city executed an intergovernmental agreement (IGA) for CCDA to be obligated for the financing payments on the loan. The IGA constitutes indebtedness of the agency in the amount of the financing or $1,300,000. Pursuant to ORS 287A.310, the agency pledges the tax increment revenues to pay the financing payments or debt service. As of June 30, 2017, the balance outstanding on the bank loan was $1,040,000. Future principal and interest payments on the loan are as follows: Year Ending June 30, Principal Interest Total 2018 $ 130,000 $ 28,980 $ 158,980 2019 130,000 25,118 155,118 2020 780,000 11,681 791,681 Total $ 1,040,000 $ 65,779 $ 1,105,779 Capital Lease The city entered into a lease/purchase agreement in fiscal year 2012-2013 to purchase a piece of street equipment. This lease agreement qualifies as a capital lease and has been capitalized in accordance with accounting principles generally accepted in the United States of America (GAAP). The asset was acquired at the purchase price of $71,091. At June 30, 2017 the net book value of the equipment is $14,179 ($71,091 less $56,912 of accumulated depreciation). The outstanding balance on the capital lease at June 30, 2017 is $15,472 and has an effective interest rate of 4.4 percent. 67 City of Tigard, Oregon Notes to Basic Financial Statements Future minimum lease payments on the capital lease are as follows: Year Ending June 30, Principal Interest Total 2018 $ 15,472 $ 683 $ 16,155 Business-type Activities Note Payable In fiscal year 2009-2010 the city was awarded $4,796,000 in federal funds under the American Recovery and Reinvestment Act (ARRA). These funds were distributed to the city as a loan, with 50 percent constituting an ARRA Forgivable Loan and 50 percent a low-interest loan under the Safe Drinking Water Revolving Loan Fund program. These ARRA funds were used to develop a city water reservoir. In fiscal year 2011-2012 the city drew down the funds that are considered the loan portion. The interest rate on the note payable is 3.0 percent. At June 30, 2017, the balance on the note payable was $1,907,007. Future debt service requirements are as follows: Year Ending June 30, Principal Interest Total 2018 $ 103,973 $ 57,210 $ 161,183 2019 107,092 54,091 161,183 2020 110,305 50,878 161,183 2021 113,614 47,569 161,183 2022 117,022 44,161 161,183 2023-2027 639,927 165,989 805,916 2028-2032 715,074 64,065 779,139 Total $ 1,907,007 $ 483,963 $ 2,390,970 Water Project Financing In fiscal year 2010-2011 the City of Tigard's City Council authorized up to $160 million in bonds to help finance a joint water supply project with the City of Lake Oswego to provide Tigard a share of a local water source. The arrangement with Lake Oswego to share a water system is referred to as the Lake Oswego/Tigard Water Partnership project. In fiscal year 2011-2012 the city issued $97,720,000 of water revenue bonds to be used to fund capital projects for the water system in connection with the Lake Oswego/Tigard Water Partnership project. The bonds were issued at a premium of $8,196,325 with interest rates 68 City of Tigard, Oregon Notes to Basic Financial Statements from 3.0 percent to 5.0 percent. At June 30, 2017, the balance of the 2012 water revenue bonds was $95,850,000 and the balance of the unamortized premium was $5,850,817. In fiscal year 2014-2015 the city issued $30,810,000 of water revenue bonds with interest rates from 3.0 percent to 5.0 percent. The bonds were issued at a premium of $4,449,380. These bonds are the second of two borrowings by Tigard to help finance the joint water supply project with the City of Lake Oswego (Lake Oswego/Tigard Water Partnership project). At June 30, 2017, the balance of the 2015 water revenue bonds was $30,650,000 and the balance of the unamortized premium was $4,069,463. Net water system revenues and system development charges for the Water System are pledged to the payment of principal of and interest on the revenue bonds. Net system revenues for fiscal year 2017 were $14,402,173 as compared to the total debt service of $8,232,100. The computation of water revenue bonds debt coverage is noted in the statistical section of this document on page 179. Interest rates on the bonds range from 3 percent to 5 percent on specific maturities. Future maturities of bond principal and premium and interest on the revenue bonds are as follows: Year Ending June 30, Principal Interest Total 2018 $ 2,100,000 $ 6,129,650 $ 8,229,650 2019 2,185,000 6,043,950 8,228,950 2020 2,275,000 5,954,750 8,229,750 2021 2,370,000 5,861,850 8,231,850 2022 2,465,000 5,765,150 8,230,150 2023-2027 14,140,000 27,012,700 41,152,700 2028-2032 18,095,000 23,051,725 41,146,725 2033-2037 23,215,000 17,931,875 41,146,875 2038-2042 29,815,000 11,335,875 41,150,875 2043-2046 29,840,000 3,077,250 32,917,250 126,500,000 $ 112,164,775 $ 238,664,775 Premium 9,920,282 Total $ 136,420,282 69 City of Tigard, Oregon Notes to Basic Financial Statements Long-term debt activity, including compensated absences, for the year ended June 30, 2017 was as follows: Balances June Balances June Due in one 30,2016 Additions Retirements 30, 2017 year Governmental activities Bonds payable $ 22,862,084 $ - $ 2,186,947 $ 20,675,137 $ 2,255,840 Special assessment debt 296,319 - 83,100 213,219 89,200 Bank loan payable 1,170,000 - 130,000 1,040,000 130,000 Capital lease 30,290 - 14,818 15,472 15,472 Total debt 24,358,693 - 2,414,865 21,943,828 2,490,512 Other long-term liabilities Compensated absences 1,299,480 1,786,625 1,753,608 1,332,497 1,279,197 Governmental activities $ 25,658,173 $ 1,786,625 $ 4,168,473 $ 23,276,325 $ 3,769,709 Business-type activities Note payable $ 2,007,952 $ - $ 100,945 $ 1,907,007 $ 103,973 Bonds payable 139,003,308 - 2,583,026 136,420,282 2,644,356 Total debt 141,011,260 - 2,683,971 138,327,289 2,748,329 Other long-term liabilities Compensated absences 140,684 154,775 195,289 100,170 96,884 Business-type activities $ 141,151,944 $ 154,775 $ 2,879,260 $ 138,427,459 $2,845,213 Expenditures for liquidating compensated absences liabilities are recorded in the General, Special Revenue, Enterprise and Internal Service funds. 7. Interfund Receivables, Payables and Transfers Interfund loan transactions between funds are recorded as "advances to" and "advances from" other funds. Interfund loans represent interim financing from the General Fund and the Sanitary Sewer fund to a capital project fund for various downtown development projects. Repayment of these transactions occurs in years subsequent to year-end. The net effect of interfund loans is reported on the Statement of Net Position as Internal Balances. The composition of interfund loans and the related elimination as of June 30, 2017 are as follows: Net Receivable Fund Payable Fund Amount Elimination Balance General Fund Nonmajor governmental fund $ 655,112 $ (655,112) $ - Sanitary Sewer Fund Nonmajor governmental fund 102,320 - 102,320 $ 757,432 $ (655,112) $ 102,320 70 City of Tigard, Oregon Notes to Basic Financial Statements Future maturities on the interfund loans are as follows: Interfund Loans Elimination Net Balance Year Ending June 30, Principal Interest Principal Interest Principal Interest 2018 $ - $ 3,932 $ - $ (3,420) $ - $ 512 2019 - 3,932 - (3,420) - 512 2020 - 3,932 - (3,420) - 512 2021 - 3,932 - (3,420) - 512 2022 - 3,932 - (3,420) - 512 2023-2027 137,473 19,258 (107,311) (16,851) 30,162 2,408 2028-2032 377,430 12,182 (326,147) (10,888) 51,284 1,294 2033-2036 242,529 2,704 (221,655) (2,548) 20,874 157 $ 757,432 $53,802 $(655,112) $(47,386) $102,320 $6,416 Interfund transfers are used to provide funds for debt service, contribute toward the cost of capital projects and provide operational resources. Transfers for fiscal year ended June 30, 2017 are as follows: Gas Tax Non-Major Internal Total Fund Fund Govt'I Fund Service Sewer Storm Water Transfers Out General $ - $1,755,890 $150,372 $ - $ - $ 27,460 $ 1,933,722 Gas Tax - 842,251 4,707 - - - 846,958 Trans DevTax - 25,425 23,193 - - - 48,618 Parks SDC - 443,624 16,163 - - - 459,786 Nonmajor 150,000 1,408,952 201,748 8 - - 1,760,708 Internal Service - - 270 - - - 270 Sanitary Sewer - 18,740 23,827 - 85,597 13,413 141,577 Stormwater - 106,359 4,400 32 - 17,878 128,668 Water - 3,975 161,481 - - - 165,456 Total Transfers In $150,000 $4,605,215 $586,161 $ 39 $85,597 $ 58,751 $ 5,485,764 Reconciliation: Transferred to governmental funds from: Sewer Fund $ 42,568 Stormwater Fund 110,759 Water Fund 165,456 Transferred from governmental funds to enterprise funds: From General Fund to Water Fund (27,460) From Non-major funds to Sewer Fund (8) Total transfers per Statement of Activities $291,314 These transfers have been eliminated in the government-wide statement of activities other than the net effect between governmental activities and business-type activities. 71 City of Tigard, Oregon Notes to Basic Financial Statements 8. Post-Employment Benefits Other than Pensions (OPEB) Plan Description The city is required by Oregon Revised Statute 243.303 to provide retirees (if they elect) with group health and dental insurance coverage from the date of retirement age to age 65 at the same premium rates as offered to active city employees. The retiree is responsible for the premiums. Benefit provisions are established through negotiations between the city and representatives of collective bargaining units. The Governmental Accounting Standards Board Statement No. 45, Accounting and Financial Reporting by Employers for Post-employment Benefits Other Than Pensions, is applicable to the city due to the resulting implicit rate subsidy. This single-employer "plan" is not a stand-alone plan and there are no separately issued financial statements. The city does not provide any explicit employee benefits related to this plan. Funding Policy Retirees make premium payments to fund the plan to the extent of current-year insurance premium requirements on a pay-as-you-go basis. The city has not established an irrevocable trust to accumulate assets to fund the cost of the net OPEB obligation that arises from the implicit subsidy. The premium rates are set annually by the city's insurance carrier. As of the actuarial report date October 27, 2017, six retirees and two spouses were participating in the plan. Annual OPEB Cost and Net OPEB Obligation The city's annual OPEB cost is calculated based on the Annual Required Contribution (ARC) of the city, an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liabilities over a period of 15 years. The following schedule shows the components of the city's annual OPEB cost for the year ending June 30, 2016, the amount actually contributed to the plan and the changes in the city's OPEB obligation to the plan: Annual Required Contribution (ARC) $ 254,854 Interest on prior year net OPEB contribution 61,440 Adjustment to ARC (211,073) Annual OPEB cost 105,221 Implicit benefit payments (59,288) Increase in net OPEB obligation 45,933 Net OPEB obligation - beginning of the year 1,755,416 Net OPEB obligation - end of the year $ 1,801,349 72 City of Tigard, Oregon Notes to Basic Financial Statements The city's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation for the current fiscal year and two prior were as follows: % of Annual Year Ended Annual OPEB Cost Net OPEB June 30, OPEB Cost Contributed Obligation 2015 $ 305,940 27% $1,612,873 2016 225,365 37% 1,755,416 2017 105,221 56% 1,801,349 Funding Status and Funding Progress As of July 1, 2016, the most recent actuarial valuation, the plan was zero percent funded as the plan is funded on a pay-as-you-go basis. The actuarial liability for benefits was $1,352,640 and also equaled the unfunded actuarial liability (UAAL). Schedule of Funding Progress: Actuarial Actuarial Actuarial Unfunded UAAL as a Valuation Value of Accrued Liability Funded Covered %of Date Plan Assets Liability (UAAL) Ratio Payroll Payroll 08/01/12 $ - $ 1,844,990 $ 1,844,990 0% $ 18,629,041 9.9% 08/01/14 - 1,808,960 1,808,960 0% 20,753,905 8.7% 07/01/16 - 1,352,640 1,352,640 0% 20,965,767 6.5% The plan's actuarial valuation involves estimates of amounts and assumptions about the probability of events far into the future, such as, future employment, mortality and healthcare cost trends. Amounts determined about the funding status of the plan and the annual required contributions are subject to periodic revision as actual results for each period are compared with past expectations and new assumptions are made about the future. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan and include the health benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the city and plan members. The actuarial methods and assumptions include techniques that are designed to reduce the effects of short-term volatility in actuarial results consistent with the long term perspective of the calculations. 73 City of Tigard, Oregon Notes to Basic Financial Statements In the July 1, 2016 valuation, the entry age normal cost method was used. With this method the present value of benefits is allocated over the service for each active employee from their date of hire to their expected retirement age, as a level percent of the employee's pay. The investment return for the city was assumed to be 3.50 percent to reflect the long-term annual investment returns for the Oregon Local Government Investment Pool and comparable investment vehicles. The actuarial report incorporates the projected effect of the healthcare reform law, The Patient Protection and Affordable Care Act (PPACA), passed into law in March 2010. A significant item in the law begins in 2020 when the city's plan may be subject to a 40 percent excise tax on the value of benefits provided above a certain dollar level. Because of some uncertainties in the excise tax component, the calculation of a precise obligation for this tax is impossible at this time. The report assumes medical and vision premium increases to be 7.00 percent in the first year. In future years, the medical and vision cost trend varies between 7.50 percent and 5.00 percent due to the timing of the excise tax scheduled to affect health care benefits beginning in 2020. The health care trend then settles to an ultimate rate of 5.00 percent. Dental premium increases were assumed to increase 4.50 percent in all future years. A general inflation rate of 2.75 percent per year was used to develop other economic assumptions. 9. PERS Retirement Health Insurance Account Plan Description As a member of Oregon Public Employees Retirement System (OPERS) the city contributes to the Retirement Health Insurance Account (RHIA) for each of its eligible employees. RHIA is a cost-sharing multiple-employer defined benefit other postemployment benefit plan administered by OPERS. RHIA pays a monthly contribution toward the cost of Medicare companion health insurance premiums of eligible retirees. Oregon Revised Statute (ORS) 238.420 established this trust fund. Authority to establish and amend the benefit provisions of RHIA reside with the Oregon Legislature. The plan is closed to new entrants after January 1, 2004. OPERS issues a publicly available financial report that includes financial statements and required supplementary information. OPERS produces an independently audited CAFR which can be found at: http://www.oregon.gov/pers/Pages/Financials/Actuarial-Financial-Information.aspx Funding Policy Because RHIA was created by enabling legislation (ORS 238.420), contribution requirements of the plan members and the participating employers were established and may be amended only by the Oregon Legislature. ORS require that an amount equal to $60 or the total monthly cost of Medicare companion health insurance premiums coverage, whichever is less, shall be paid from the Retirement Health Insurance Account established by the employer, and any 74 City of Tigard, Oregon Notes to Basic Financial Statements monthly cost in excess of $60 shall be paid by the eligible retired member in the manner provided in ORS 238.410. To be eligible to receive this monthly payment toward the premium cost the member must: (1) have eight years or more of qualifying service in OPERS at the time of retirement or receive a disability allowance as if the member had eight years or more of creditable service in OPERS, (2) receive both Medicare Parts A and B coverage, and (3) enroll in a OPERS-sponsored health plan. An eligible surviving spouse or dependent of a deceased PERS retiree may receive the subsidy if he or she (1) is receiving a retirement benefit or allowance from PERS or (2) was insured at the time the member died and the member retired before May 1, 1991. Participating cities are contractually required to contribute to RHIA at a rate assessed each year by OPERS, currently 0.59 percent of annual covered payroll for Tier One/Tier Two, and 0.49 percent for OPSRP. The OPERS Board of Trustees sets the employer contribution rate based on the annual required contribution (ARC) of the employers, an amount actuarially determined in accordance with the parameters of GASB Statement No. 45, Accounting and Financial Reporting by Employers for Post-employment Benefits Other Than Pensions. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) of the plan over a period not to exceed thirty years. The City's contributions to RHIA equaled the required contributions each year and were: Year ended RHIA June 30, Contributions 2015 $ 32,789 2016 32,500 2017 31,820 10. Pension Plan Oregon Public Employees Retirement Systems (OPERS) Plan Description City of Tigard Police Officers are provided with pensions through Oregon Public Employees Retirement System (OPERS); a cost-sharing multiple-employer defined benefit pension plan that acts as a common investment and administrative agent for government units in the State of Oregon. Police Officers hired before August 29, 2003 belong to the Tier One/Tier Two Retirement Benefit Program (established pursuant to ORS Chapter 238), while Officers hired on or after August 29, 2003 belong to the OPSRP Pension Program (established pursuant to ORS Chapter 238A). OPERS produces an independently audited CAFR which can be found at: http://www.oregon.gov/pers/Pages/Financials/Actuarial-Financial-Information.aspx 75 City of Tigard, Oregon Notes to Basic Financial Statements Benefits Provided Tier One/Tier Two Retirement Benefit Pension Benefits. The PERS retirement allowance is payable monthly for life. It may be selected from 13 retirement benefit options. These options include survivorship benefits and lump-sum refunds. The basic benefit is based on years of service and final average salary. For city sworn officers, 2.0 percent is multiplied by the number of years of service and the final average salary. Benefits may also be calculated under either a formula plus annuity (for members who were contributing before August 21, 1981) or a money match computation if a greater benefit results. A member is considered vested and will be eligible at a minimum retirement age for a service retirement allowance if he or she has had contribution in each of five calendar years or has reached at least 45 years of age before ceasing employment with a participating employer. Police members are eligible after reaching age 50. Tier One police member benefits are reduced if retirement occurs prior to age 55 with fewer than 25 years of service. Tier Two members are eligible for full benefits at age 60. The ORS Chapter 238 Defined Benefit Pension Plan is closed to new members hired on or after August 29, 2003. Death Benefits. Upon the death of a non-retired member, the beneficiary receives a lump-sum refund of the member's account balance (accumulated contributions and interest). In addition, the beneficiary will receive a lump-sum payment from employer funds equal to the account balance, provided one or more of the following conditions are met: • the member was employed by a PERS employer at the time of death, • the member died within 120 days after termination of OPERS-covered employment, • the member died as a result of injury sustained while employed in a OPERS-covered job, or • the member was on an official leave of absence from a OPERS-covered job at the time of death. Disability Benefits. A member with 10 or more years of creditable service who becomes disabled from other than duty-connected causes may receive a non-duty disability benefit. A disability resulting from a job-incurred injury or illness qualifies a member for disability benefit regardless of the length of OPERS-covered service. Upon qualifying for either a non-duty or duty disability, service time is computed to age 55 for police members when determining the monthly benefit. Benefit Changes After Retirement. Members may choose to continue participation in a variable equities investment account after retiring and may experience annual benefit fluctuations due 76 City of Tigard, Oregon Notes to Basic Financial Statements to changes in the market value of equity investments. Under ORS 238.360 monthly benefits are adjusted annually through cost-of-living changes. The COLA is capped at 2.0 percent. OPSRP Pension Program Pension Benefits. The OPSRP Pension Program (ORS Chapter 238A) provides benefits to members hired on or after August 29, 2003. This portion of OPSRP provides a life pension funded by employer contributions. Benefits are calculated by formula for members who attain normal retirement age. For police members, 1.8 percent is multiplied by the number of years of service and the final average salary. Normal retirement age for police members is age 60 or age 53 with 25 years of retirement credit. To be classified as a police member, the individual must have been employed continuously as a police member for at least five years immediately preceding retirement. A member of the OPSRP Pension Program becomes vested on the earliest of the following dates: the date the member completes 600 hours of service in each of five calendar years, the date the member reaches normal retirement age, and if the pension program is terminated, the date on which termination becomes effective. Death Benefits. Upon the death of a non-retired member, the spouse or other person who is constitutionally required to be treated in the same manner as the spouse, receives for life 50 percent of the pension that would otherwise have been paid to the deceased member. Disability Benefits. A member who has accrued 10 or more years of retirement credits before the member becomes disabled or a member who becomes disabled due to job-related injury shall receive a disability benefit of 45 percent of the member's salary determined as of the last full month of employment before the disability occurred. Benefit Changes After Retirement. Under ORS 238A.210 monthly benefits are adjusted annually through cost-of-living changes. The COLA is capped at 2.0 percent. OPSRP Individual Account Program (IAP) Pension Benefits. The IAP member becomes vested on the date the employee account is established or on the date the rollover account was established. If the employer makes optional employer contributions for a member, the member becomes vested on the earliest of the following dates: the date the member completes 600 hours of service in each of five calendar years, the date the member reaches normal retirement age, the date the IAP is terminated, the date the active member becomes disabled, or the date the active member dies. 77 City of Tigard, Oregon Notes to Basic Financial Statements Upon retirement, a member of the OPSRP IAP may receive the amounts in his or her employee account, rollover account, and vested employer account as a lump-sum payment or in equal installments over a 5-, 10-, 15-, 20-year period or an anticipated life span option. Each distribution option has a $200 minimum distribution limit. Death Benefits. Upon the death of a non-retired member, the beneficiary receives in a lump sum the member's account balance, rollover account balance, and vested employer optional contribution account balance. If a retired member dies before the installment payments are completed, the beneficiary may receive the remaining installment payments or choose a lump- sum payment. Recordkeeping. OPERS contracts with VOYA Financial to maintain IAP participant records. Contributions. OPERS funding policy provides for monthly employer contributions at actuarially determined rates. These contributions, expressed as a percentage of covered payroll, are intended to accumulate sufficient assets to pay benefits when due. Employer contribution rates for the period were based on the December 31, 2013 actuarial valuation. The rates based on a percentage of payroll, first became effective July 1, 2015. The rates in effect for the period were 15.07 percent for Tier One/Tier Two police members and 9.99 percent for OPSRP Pension Program Police member. The city's total contributions exclusive of the 6 percent "pick- up" was $795,869. Covered employees are required to contribute 6 percent of their salary to the Plan, but the employer is allowed to pay any or all of the employees' contribution in addition to the required employers' contribution. The city has elected to contribute the 6 percent "pick-up" or $375,425 of the employees' contribution. Pension Assets, Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2017, the city reported a liability of $11,216,998 for its proportionate share of the OPERS net pension liability. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of December 31, 2014 rolled forward to June 30, 2016. The city's proportion of the net pension liability was based on a projection of the city's long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. At June 30, 2016, the city's proportion of OPERS net pension liability was 0.0747 percent. 78 City of Tigard, Oregon Notes to Basic Financial Statements Annual Pension Cost For the year ended June 30, 2017, the city recognized pension expense of$6,191,936. At June 30, 2017, the city reported deferred outflows or resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Description Resources Resources Differences between expected and actual experience $ 371,107 $ - Changes of assumptions 2,392,316 - Net difference between projected and actual earnings on investments 2,216,008 - Changes in proportion 99,052 364,426 Differences between employer contributions and proportionate share of contributions 54,250 74,840 Total (prior to post-MD contributions) 5,132,733 439,266 Contributions subsequent to the MD 795,869 - Total $5,928,602 $439,266 Deferred outflows of resources related to pensions of $795,869 resulting from the city's contributions subsequent to the measurement date will be recognized as either a reduction of the net pension liability or an increase in the net pension liability in the year ended June 30, 2017. Other amounts reported as deferred inflows of resources related to pensions will be recognized in pension expense as follows: Deferred Outflows Deferred Inflows Amortization Period Amortization Period FY2017 $ 941,041 FY2017 $ 106,761 FY2018 941,041 FY2018 106,761 FY2019 1,754,870 FY2019 106,761 FY2020 1,313,115 FY2020 93,557 FY2021 182,666 FY2021 25,426 Total $5,132,733 Total $ 439,266 79 City of Tigard, Oregon Notes to Basic Financial Statements Actuarial Methods and Assumptions The total pension liability in the December 31, 2014 actuarial valuation was determined using the following actuarial methods and assumptions: Valuation Date December 31, 2014 Measurement Date June 30, 2016 Experience Study Report 2014, published September 2015 Actuarial Cost Method Entry Age Normal Actuarial Assumptions: Inflation Rate 2.50 percent Long-Term Expected Rate of Return 7.50 percent Discount Rate 7.50 percent Projected Salary Increases 3.50 percent overall payroll growth Cost of Living Adjustments (COLA) Blend of 2.00% COLA and graded COLA (1.25%/0.15%) in accordance with Moro decision, blend based on service Health retirees and beneficiaries: RP-2000 Sex-distinct, generational per Scale BB, with collar adjustments and set-backs as described in the valuation. Mortality Active Members: Mortality rates are a percentage of healthy retiree rates that vary by group, as described in the valuation. Disabled retirees: Mortality rates are a percentage (70% for males, 95%for females) of the RP-2000 Sex-distinct generational per Scale BB, disabled mortality table. Actuarial valuations of an ongoing plan involve estimates of the value of projected benefits and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. Experience studies are performed as of December 31 of even numbered years. The methods and assumptions shown above are based on the 2014 experience study which reviewed experience for the four-year period ending on December 31, 2014. Long-Term Expected Rate of Return To develop an analytical basis for the selection of the long-term expected rate of return assumption, in July 2015 the OPERS Board reviewed long-term assumptions developed by both Milliman's capital market assumptions team and the Oregon Investment Council's (OIC) investment advisors. The table below shows Milliman's assumptions for each of the asset classes in which the plan was invested at that time based on the OIC long-term target asset allocation. The OTC's description of each asset class was used to map the target allocation to the asset classes shown below. Each asset class assumption was based on a consistent set of 80 City of Tigard, Oregon Notes to Basic Financial Statements underlying assumptions, and includes adjustment for the inflation assumption. These assumptions are not based on historical returns, but instead are based on a forward-looking capital market economic model. Compounded Target Annual Return Asset Class Allocation (Geometric) Core Fixed Income 7.20% 4.50% Short-Term Bonds 8.00% 3.70% Intermediate -Term Bonds 3.00% 4.10% High Yield Bonds 1.80% 6.66% Large Cap US Equities 11.65% 7.20% Mid Cap US Equities 3.88% 7.30% Small Cap US Equities 2.27% 7.45% Developed Foreign Equities 14.21% 6.90% Emerging Foreign Equities 5.49% 7.40% Private Equities 20.00% 8.26% Opportunity Funds/Absolute Return 5.00% 6.01% Real Estate (Property) 13.75% 6.51% Real Estate (REITS) 2.50% 6.76% Commodities 1.25% 6.07% Tota I 100.00% Assumed Inflation - Mean 2.50% Changes in Plan Provisions During the Measurement Period At its September 25, 2015 meeting, the OPERS Board reduced the assumed rate of return on investments from 7.75 percent to 7.50 percent. On July 28, 2017, subsequent to the June 30, 2016 measurement date, the OPERS Board lowered the assumed earnings rate from 7.50 percent to 7.20 percent. The new assumed earnings rate will affect rates that go into effect on July 1, 2019. The effect on the City has not been determined. Discount Rate The discount rate used to measure the total pension liability was 7.50 percent for the Defined Benefit Pension Plan. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and those contributing employers are made at the contractually required rates, as actuarially determined. Based on those assumptions, the 81 City of Tigard, Oregon Notes to Basic Financial Statements pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments for the Defined Benefit Pension Plan was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the City's proportionate share of net pension liability (asset) to changes in the discount rate The following presents the city's proportionate share of the net pension liability (asset) calculated using the discount rate of 7.50 percent, as well as what the city's proportionate share of the net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower (6.50 percent) or 1-percentage-point higher (8.50 percent) than the current rate: 1% Decrease Discount Rate 1% Increase (6.50%) (7.50%) (8.50%) City's proportionate share of the net pension liability $ 18,111,712 $ 11,216,998 $ 5,454,224 Pension Plan Fiduciary Net Position Detailed information about the pension plan's fiduciary net position is available in the separately issued OPERS financial report at: http://www.oregon.gov/pers/Pages/Financials/Actuarial-Financial-lnformation.aspx 11. Retirement Plans—Defined Contribution Plan The city contributes to a retirement plan on behalf of all eligible employees. Contributions are to International City Managers Association Retirement Corp. (ICMARC), a defined contribution single employer retirement plan (The Plan) for those employees not eligible for the defined benefit plan (OPERS). The Plan is a defined contribution plan created in accordance with Internal Revenue Code Section 401(a). Employees become eligible to participate in the plans after six months of service and vest immediately. Employees may withdraw funds upon retirement or termination of employment. Employees enrolled in The Plan at June 30, 2017: Classification of eligible employees Enrollment Represented (SEIU) employees 73 Management employees 114 Police (non-sworn) employees 16 Total enrolled employees 203 82 City of Tigard, Oregon Notes to Basic Financial Statements Contributions to The Plan range from 10 to 11 percent of gross salary depending on the employment group for all eligible employees participating in the plans. The city is required to contribute to these plans under authority of City Council resolution and the plan documents. Employees may also contribute to these plans. Required and actual contributions to the plan were $1,375,848 for the year ended June 30, 2017. Contributions to the plans are made to a fiduciary. All assets and income of the Plan are held in trust for the exclusive benefit of the participants and their beneficiaries. Since the plans are administered by the city, the assets, equity and operations of the plans are accounted for in the General Employees Pension Plan Fund, a pension trust fund. The plans invest in various money market and equity mutual funds. At June 30, 2017, the total net position of the pension plan was $27,472,279, which approximates fair value. Deferred Compensation Plans The city offers employees a voluntary deferred compensation plan created in accordance with Internal Revenue Code Section 457 and administered by the city. The Plan is a defined contribution plan. Amendments to the plan require City Council approval. The Plan is available to any individual who is an elected official of the city or who is employed by the city after completing 30 days of service. Participation in the plan is voluntary. Contributions to fiduciaries that hold the funds in trust for the plans' participants are made through salary withholdings from participating employees up to the amounts specified in the code. No contributions are required by the city. Amounts deferred are not available to employees until termination, retirement, death, or unforeseeable emergency. All assets and income of the plan are held in trust for the exclusive benefit of the participants and their beneficiaries. The amounts accumulated under the 457 plan including investments earnings are excluded from the financial statements of the city. 12.Tax Abatements As of June 30, 2017, the city provides property tax abatements through three programs. An Enterprise Zone program, a Non-Profit Corporation Low-Income Housing program and a Vertical Housing Development Zone program. Enterprise Zone The city's Enterprise Zone (EZ) is authorized by Oregon Revised Statute (ORS) 285C.050 — 285C.250, the Oregon Enterprise Zone Act (the Act). The city created the Tigard EZ through Resolution No. 14-51. This resolution was approved by City Council on October 28, 2014. The 83 City of Tigard, Oregon Notes to Basic Financial Statements city subsequently expanded the EZ to include a portion of the City of Lake Oswego via Resolution No. 15-48 on October 27, 2015, and renamed the EZ the Tigard/Lake Oswego Enterprise Zone. ORS 285C.255 defines the sunset of all enterprise zone programs,terminating existing programs as of June 30, 2025. The City of Tigard elected to add the following additional incentives and requirements to its program: • Fast tracking the land use review process. • Pre-application conference fees, business registration fees, and sign permit fee are waived by 50 percent. • City Council may extend the standard exemption by up to two more years if a qualifying company increases employment by 10 percent each year and new jobs are compensated (wages plus benefits) at 200 percent of Oregon Minimum Wage. • A minimum investment of$500,000 is required. • Total compensation for 75 percent of company's EZ facility jobs (wages plus benefits) must exceed 200 percent of Oregon minimum wage after one year of employment. • A company must provide benefits to employees that meet or exceed the national average of non-mandated benefits for the size of the company, and the company must offer sufficient training and advancement opportunities for all employees. • A procurement plan increasing purchasing with Tigard based companies is required. • An application fee totaling one tenth of one percent (.001) of the value of the investment for the qualified property that is proposed in the application. This fee is capped at $25,000. • Companies applying for the two year extended abatement must pay a community service fee. This fee is calculated at a rate of 20 percent of the abated taxes for years four and five. The fee is paid to the city. Applications are reviewed by the city and by the county assessor. Review includes a preauthorization consultation and a review of written application materials. For approved applications, City Council may adopt a resolution finding that: the business is eligible for the exemption under the Act, the size of the proposed investment meets requirements, the employment opportunities provide by the facility or firm and/or the nature of the activities undertaken by the facility or firm within the EZ will significantly enhance the local economy, and the activities of the facility or firm will promote the purposes for which the zone was created and increase employment within the zone. Taxes are abated via an exemption of assessed value from all applicable tax levies. These taxes are abated for a period of three tax years, beginning with the first year the property is placed in service. Applicable tax levies include the permanent rate levies and operating levies for all taxing districts that include the property. Additionally, any community service fees received by the city from participating businesses are restricted for use on economic development activities. 84 City of Tigard, Oregon Notes to Basic Financial Statements Recipients of the EZ tax abatement make commitments to the city in their application in a number of areas, including statutory requirements for an increase in full-time employment of 10 percent, no concurrent job losses in Oregon within 30 miles of the EZ, maintenance of employment levels during the exemption period, and first-source agreements with local job training providers. For the fiscal year ended June 30, 2017, the city's property tax revenues were reduced by an estimated $1,000 as a result of the EZ program. For the fiscal year ended June 30, 2017, the Tigard Urban Renewal's property tax revenues were reduced by an estimated $20 as a result of the EZ program. If necessary, abated taxes can be reassessed for reasons defined in ORS 285C.240. Reasons for reassessment include; sale of a qualifying business or subject property outside of the EZ, reduction in business operations and/or closure of a business, failure of a business to meet statutory or city requirements, and/or if they use the property for ineligible activities. At disqualification, the county assessor will assess any previously abated taxes in a subsequent assessment year, less any amounts that have been paid to the city as a community service fee. Non-Profit Low Income Housing Limited Tax Exemption The city's Non-Profit Low Income Housing Limited Tax Exemption (NPLTE) program is authorized by ORS 307.540-548. In 1996, the city's NPLTE program was established by Tigard Municipal Code 3.50, Non-Profit Corporation Low-Income Housing, Ordinance No. 96-34. The program allows exemption from property taxes for non-profit corporations owning a low- income housing facility that meet specific criteria. The criteria include: • The property is owned or being purchased by a corporation that is exempt from income taxes under section 501(c) (3) or (4) of the Internal Revenue Code as amended before December 1, 1984. • Upon liquidation, the assets of the corporation are required to be applied first in payment of all outstanding obligations, and the balance remaining, in cash and in kind, to be distributed to corporations exempt from taxation and operated exclusively for religious, charitable, scientific, literary or educational purposes or to the State of Oregon. • The property is occupied by low-income persons. • The property or portion of the property receiving the exemption, is actually and exclusively used for the purposes described in section 501(c) (3) or (4) of the Internal Revenue Code as amended before December 1, 1984. • The application for exemption has been approved by the City Council. To qualify for the exemption the corporation shall file an application for exemption with the governing body for each assessment year of exemption. The application shall be filed on or 85 City of Tigard, Oregon Notes to Basic Financial Statements before March 1, of the assessment year for which the exemption is applied for, except that when the property designated is acquired after March 1 and before July 1, the claim for that year shall be filed within 30 days after the date of acquisition. For the fiscal year ended June 30, 2017, the city's property tax revenues were reduced by an estimated $33,000 as a result of this program. For fiscal year ended June 30, 2017 the Tigard Urban Renewal's property tax revenues were reduced by an estimated $1,000 as a result of this program. Vertical Housing Development Zone The city's Vertical Housing Development Zone (VHDZ) tax exemption program is authorized by ORS 285C.450 to 285C.480 and 307.864. This ORS allows municipalities to create special districts to encourage mixed-use development. In 2014, the city passed Resolution No. 14-38 establishing this program. VHDZ allows for partial exemption from property taxes for mixed use multi-story development in core areas of the city. VHDZ encourages development which supports downtown revitalization. Areas identifies for this program include Tigard's Town Center and parts of the Tigard Triangle. This exemption allows for a decrease in total property tax for new construction of 20 percent per floor; exemption applies to new construction on the first four floors of residential development built above a non-residential ground floor. Taxes are abated via an exemption of assessed value from applicable tax levies for a period of 10 successive years, beginning in the year following the year the project was completed and would have otherwise been added to the tax rolls. For the fiscal year ended June 30, 2017, the city's property tax revenues were reduced by an estimated $1,000 as a result of this program. For the fiscal year ended June 30, 2017 the Tigard Urban Renewal's property tax revenues were reduced by an estimated $30 as a result of this program. For the fiscal year ended June 30, 2017, the city abated property taxes totaling $35,000 under the three programs. For fiscal year ended June 30, 2017, the Tigard Urban Renewal's abated property taxes totaling$1,050 under the three programs. FY 2017 Taxes Abated Tigard Urban Tax Abatement Program City of Tigard Renewal Enterprise Zone $ 1,000 $ 20 Non-Profit Low Income Housing Limited Tax Exemption 33,000 1,000 Vertical Housing Development Zone 1,000 30 Total $ 35,000 $ 1,050 86 City of Tigard, Oregon Notes to Basic Financial Statements 13.Transactions with Clean Water Services of Washington County The city collects charges for treatment of city sewage and stormwater on behalf of the Clean Water Services of Washington County and remits all collections to Clean Water Services, except for 16.45 percent of sewer service charges collected, 3.98 percent of sewer connection charges collected and 75 percent of stormwater service charges collected, in accordance with an agreement between the city and Clean Water Services. During fiscal year 2017 the city paid $13,614,197 to Clean Water Services under this agreement. The net amount retained by the city is reported as revenue in the enterprise funds in the proprietary funds Statement of Revenues, Expenses and Changes in Fund Net Position. Revenues are reported net because the city acts in a fiduciary capacity on behalf of Clean Water Services. 14. Risk Management The city is exposed to various risks of loss related to torts; employment liability; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees and others; and natural disasters. The city is insured through a member trust consisting of cities and counties in Oregon and purchases public entity insurance through the trust to deal with these risks with nominal deductibles. Settled claims resulting from these risks have not exceeded public entity insurance coverage in any of the past three fiscal years and there has not been any material change to insurance coverages from the previous year. 15.Tigard/Lake Oswego Water Infrastructure Joint Venture The city has entered into an intergovernmental agreement (IGA) with the City of Lake Oswego for the Lake Oswego/Tigard Water Partnership. The Water Partnership created a reliable water system to deliver high-quality drinking water to the City of Tigard and the City of Lake Oswego. The new water system replaced aging, vulnerable, at-capacity infrastructure with a cutting- edge system designed to the highest seismic resiliency standards. The city's share of the project is estimated at approximately $132 million. As stated in Note 6, the city issued $97.7 million in revenue bonds during fiscal year 2012 to partially fund the project. The city issued an additional $30.8 million in revenue bonds in fiscal year 2015 for the continuing water infrastructure needs. This multi-year project was nearly completed by the end of fiscal year 2017. As of June 30, 2017, the city had approximately $500,000 outstanding for construction costs on the intergovernmental agreement with Lake Oswego. This amount will be paid in fiscal year 2018 with unspent bond proceeds. Upon project completion, the city anticipates capitalizing its portion of the assets. The parties to the IGA are operating as a joint venture. The city has kept its water revenues and operating expenses separate. 87 City of Tigard, Oregon Notes to Basic Financial Statements 16. Commitments The City of Tigard has entered into one contract for pavement rehabilitation for total of $993,489. This contract will be completed during the first half of fiscal year 2018. The city's street maintenance fee is the resource for the pavement rehabilitation project. In addition the city has entered into a contract of sale with a private property owner to purchase approximately 28 acres of undeveloped land. The total consideration for property transaction is $1,400,000. The property will be acquired using a combination of Park Bonds resources and system development charges for parks. Interest on the outstanding balance accrues at 2 percent per annum. The property owner resides on the property until the last payment under the contract of sale is made, at which time title to the property will pass to the city. Therefore the city has not recorded an asset or debt related to this transaction. As of June 30, 2017 the city has paid $800,000 under the contract with the following remaining payment terms: Year ending Payment June 30 Amount Due 2018 600,000 Total $ 600,000 17. Contingent Liabilities The city is a defendant in various lawsuits. Most of these lawsuits are covered by the city's insurance policies. Although the outcome of these lawsuits is not presently determinable, it is the opinion of management that resolution of these matters will not have a material adverse effect on the financial condition of the city. Claims not covered by the city's insurer are recognized when it appears probable that the loss has been incurred and the amount can be reasonably estimated. 18. Subsequent Events In August 2017 the city amended the Municipal Code to impose a local transient lodging tax (TLT) of 2.5 percent. This tax is in addition to the state-wide tax of 1.8 percent. The state of Oregon and its cities, counties and regional governments have the authority to impose and collect taxes on paid overnight stays at lodging properties such as hotels, motels, resorts, inns, bed & breakfasts or short-term home rentals. The 2.5 percent tax by the city is estimated to generate approximately $625,000 in additional revenue. Per state requirements, at least 70 percent of any revenue generated by a net increase in the TLT rate would be required to be allocated for tourism promotion or tourism-related purposes. 88 No content appears on this page by design. Required Supplementary Information CITY OF TIGARD,OREGON GENERAL FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Taxes $ 14,762,850 $ 14,762,850 $ 14,795,445 $ 32,595 Licenses and permits 3,375,552 3,375,552 2,991,946 (383,606) Intergovernmental revenues 5,809,893 5,784,415 6,985,926 1,201,511 Charges for services 2,568,504 2,568,504 2,297,499 (271,005) Fines and forfeitures 807,789 807,789 688,767 (119,022) Franchise fees 6,112,431 6,112,431 5,886,791 (225,640) Interest earnings 103,722 103,722 393,195 289,473 Miscellaneous revenues56,432 88,477 101,681 13,204 Total revenues 33,597,173 33,603,740 34,141,250 537,510 EXPENDITURES Community services 23,203,766 23,252,920 21,734,723 1,518,197 Public works 4,289,438 4,391,438 4,119,250 272,188 Community development 3,795,043 3,827,643 3,613,095 214,548 Policy and administration 838,199 838,199 787,681 50,518 Total expenditures 32,126,446 32,310,200 30,254,749 2,055,451 Change in fund balance before other financing sources(uses) 1,470,727 1,293,540 3,886,501 2,592,961 OTHER FINANCING SOURCES(USES) Transfer in 54,125 54,125 - (54,125) Repayment of interfund loan - - 3,492 3,492 Transfer out (1,845,439) (1,985,299) (1,933,722) 51,577 Contingency (1,173,000) (926,140) 926,140 Reserve for future expenditures (9,627,881) (9,627,881) - 9,627,881 Total other financing(uses) (12,592,195) (12,485,195) (1,930,230) 10,554,965 Change in fund balance (11,121,468) (11,191,655) 1,956,271 13,147,926 Fund balance-beginning of the year 11,121,468 11,191,655 12,979,741 1,788,086 Fund balance-end of the year $ - $ - 14,936,012 $ 14,936,012 Interfund loans are treated as reimbursements on a budgetary basis and as receivables on a GAAP basis 655,112 Fund balance-GAAP basis $ 15,591,124 89 CITY OF TIGARD,OREGON GAS TAX FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES State gas tax $ 2,912,205 $ 2,912,205 $ 2,964,086 $ 51,881 County gas tax 191,494 191,494 186,222 (5,272) Licenses and permits 14,974 68,974 93,663 24,689 Interest earnings 55,732 55,732 243,690 187,958 Miscellaneous revenues 62,818 62,818 41,111 (21,707) Total revenues 3,237,223 3,291,223 3,528,772 237,549 EXPENDITURES Public works 2,243,370 2,297,370 1,917,807 379,563 *Debt service: Principal 475,248 475,248 494,501 (19,253) Interest 109,313 109,313 90,060 19,253 Total expenditures 2,827,931 2,881,931 2,502,368 379,563 Change in fund balance before other financing sources(uses) 409,292 409,292 1,026,404 617,112 OTHER FINANCING SOURCES(USES) Transfer in 150,000 150,000 150,000 - Transfer out (1,024,281) (1,035,081) (846,958) 188,123 Contingency (200,000) (200,000) - 200,000 Reserve for future expenditures (1,315,104) (1,315,104) - 1,315,104 Total other financing(uses) (2,389,385) (2,400,185) (696,958) 1,703,227 Change in fund balance (1,980,093) (1,990,893) 329,446 2,320,339 Fund balance-Beginning of the year 1,980,093 1,990,893 2,349,779 358,886 Fund balance-End of the year $ - $ - $ 2,679,225 $ 2,679,225 * Budget appropriation is made at the debt service program level 90 CITY OF TIGARD,OREGON NOTES TO REQUIRED SUPPLEMENTARY INFORMATION BUDGET TO GAAP RECONCILIATION for the year ended June 30,2017 Sections of Oregon Revised Statutes (Oregon Budget Law) require most transactions be budgeted on the modified accrual basis of accounting. However,there are certain transactions where statutory budget requirements conflict with generally accepted accounting principles(GAAP). The following discusses the differences between the budget basis and GAAP basis of accounting for the General Fund: General Fund Net change in fund balance-budget basis $ 1,956,271 Budgeted expenditures not qualifying as expenditures or other financing sources under GAAP: Interfund loans are treated as transfers on a budgetary basis.Such expenditures are reclassified as receivables on a GAAP basis. Repayment on internal loans (71) Net change in fund balance-GAAP basis $ 1,956,200 91 City of Tigard Oregon Schedule of the City's Proportionate Share of the Net Pension Liability (Asset) Oregon Public Employees Retirement System Last Four Fiscal Years 2017 2016 2015 2014 City's proportion of the net pension liability (asset) 0.081488% 0.081488% 0.074022% 0.074022% City's proportionate share of the net pension liability(asset) $ 11,216,998 $ 4,678,602 $(1,677,869) $ 3,777,455 City's covered-employee payroll $ 6,610,002 $ 6,187,208 $ 6,025,900 $ 5,426,379 City's proportionate share of the net pension liability (asset)as a percentage of its covered- employee payroll 169.70% 75.62% -27.84% 69.61% [hide row]Total Pension Liability 77,094.4 70,665.1 63,134.8 63,582.1 [hide row] Plan Fiduciary Net Position 62,082.1 64,923.6 65,401.5 58,478.9 Plan fiduciary net position as a percentage of the total pension liability 80.53% 91.88% 103.59% 91.97% 10-year trend information required by GASB Statement 68 will be presented prospectively 2 Amounts presented are for the measurement period reported during the fiscal year, which for FY 2017 is July 1, 2015 -June 30. 2016. NOTES TO SCHEDULE Changes in Benefit Terms Senate Bill 822 was enacted during the 2013 Oregon regular legislative session to lower the cap on the cost-of- living adjustment (COLA)from 2 percent to 1.5 percent for 2013, and eliminated the tax remedy benefit for recipients who do not pay Oregon state income taxes because they do not reside in Oregon. Senate Bill 861 was enacted during the 2013 Oregon special legislative session, further lowering the post-retirement COLA for years beyond 2013 to 1.25% on the first$60,000 of annual benefit and 0.15% on annual benefits above $60,000. The combined impact of these Senate Bills are reflected in the June 30, 2014 total pension liability, resulting in a net pension asset reported by the City for fiscal year 2015. The Oregon Supreme Court (Court)ruled in Moro v. State of Oregon on April 30, 2015 that certain provisions of Senate Bill 822 and Senate Bill 861 were unconstitutional. The Court ruled that benefits could be modified prospectively, but not retrospectively. As a result, those who retired before the bills were passed will continue to receive a COLA tied to the Consumer Price Index that normally results in a 2% increase annually. OPERS members who have accrued benefits before and after the effective dates of the 2013 legislation will have a blended COLA rate when they retire. The impact of the Court's decision is reflected in the June 30, 2015 total pension liability, which contributes to the net pension liability reported by the City for fiscal year 2016. Change in Assumptions The PERS Board adopted assumption changes that were used to measure the June 30, 2016 total pension liability, which contributs to the net pension liability reported by the city for fiscal year 2017. The changes include lowering the long-term expected rate of return to 7.50 percent and lowering the assumed inflation to 2.50 percent. In addition, the healthy mortality assumption was changed to reflect an updated mortality improvement scale for all groups, and assumptions were updated for merit increases, unused sick leave, and vacation pay. 92 City of Tigard, Oregon Schedule of the City's Contributions Oregon Public Employees Retirement System Last Four Fiscal Years ' 2017 2016 2015 2014 Contractually required contributions $ 787,306 $ 761,228 $ 782,812 $ 722,108 Contributions in relation to the contractually required contribution (787,306) (761,228) (782,812) (722,108) Contribution deficiency(excess) $ _ $ _ $ _ $ - City's covered-employee payroll $ 6,280,408 $ 6,610,002 $ 6,187,208 $ 6,025,900 Contributions as a percentage of covered- employee payroll 12.54% 11.52% 12.65% 11.98% 10-year trend information required by GASB Statement 68 will be presented prospectively NOTES TO SCHEDULE Actuarial Assumptions and Methods Used to Actuarially Determine Contributions: Actuarial Valuation December 31, 2013 December 31, 2011 Effective July 2015 -June 2017 July 2013 -June 2015 Actuarial cost method: Entry Age Normal Projected Unit Credit Actuarial valuation method: Market Value Market Value Actuarial assumption: Inflation rate 2.75 percent 2.75 percent Projected salary increases 3.75 percent 3.75 percent Investment rate of return 7.75 percent 8.00 percent 93 No content appears on this page by design. Other Supplementary Information CITY OF TIGARD,OREGON COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS June 30,2017 Special Debt Service Capital Project Revenue Funds Funds Funds Total ASSETS Cash and investments $ 1,618,476 $ - $ 2,972,069 $ 4,590,545 Accounts receivable 288,147 - 514,482 802,629 Property taxes receivable - 123,282 - 123,282 Assessment liens receivable - 369,929 - 369,929 Interest receivable - 10,047 - 10,047 Prepaids 16,485 - 6,940 23,425 Restricted cash and investments 7,561,979 1,329,210 7,641,634 16,532,823 Total assets $ 9,485,087 $ 1,832,468 $ 11,135,125 $ 22,452,680 LIABILITIES Accounts payable and accrued liabilities $ 516,856 $ - $ 787,015 $ 1,303,871 Deposits 493,682 - - 493,682 Due to others 176,493 - - 176,493 Advances from other funds - - 757,432 757,432 Unearned revenue 59,660 - - 59,660 Total liabilities 1,246,691 - 1,544,447 2,791,138 DEFERRED INFLOWS OF RESOURCES Resources not yet available: Property taxes - 122,873 - 122,873 Special assessment liens - 369,929 240,000 609,929 Total deferred inflows of resources - 492,802 240,000 732,802 FUND BALANCES Non-spendable: Prepaids 16,485 - - 16,485 Restricted for: Street maintenance and improvements - - 4,634,400 4,634,400 Debt service - 1,339,666 - 1,339,666 Park development and improvements - - 2,272,522 2,272,522 Underground utilities - - 110,143 110,143 Building inspection 4,519,413 - - 4,519,413 Police services 216,517 - - 216,517 Library improvements 477,966 - - 477,966 Committed for: Street maintenance and improvements 1,083,367 - 2,042,134 3,125,501 Urban forestry 1,216,337 - - 1,216,337 Assigned to: City facilities - - 1,016,775 1,016,775 Park and recreation 708,311 - - 708,311 Unassigned - - (725,296) (725,296) Total fund balances 8,238,396 1,339,666 9,350,678 18,928,740 Total liabilities,deferred inflows of resources and fund balances $ 9,485,087 $ 1,832,468 $ 11,135,125 $ 22,452,680 94 CITY OF TIGARD,OREGON COMBINING STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS for the year ended June 30,2017 Special Debt Service Capital Project Revenue Funds Funds Funds Total REVENUES Taxes $ 844,866 $ 2,758,302 $ - $ 3,603,168 Special assessments - 52,146 - 52,146 Licenses and permits 3,577,181 - - 3,577,181 Intergovernmental revenues 68,799 - 1,173,968 1,242,767 Charges for services 1,153,559 - 5,371,805 6,525,364 Rental revenues - - 84,425 84,425 Fines and forfeitures 24,292 - - 24,292 Interest earnings 71,040 62,088 15,718 148,846 Miscellaneous revenues 44,707 - 77,174 121,881 Total revenues 5,784,444 2,872,536 6,723,090 15,380,070 EXPENDITURES Community services 190,446 - - 190,446 Public works 2,254,148 - - 2,254,148 Community development 2,161,660 - 33,081 2,194,741 Debt service: Principal 260,499 1,623,346 - 1,883,845 Interest 47,400 840,079 - 887,479 Capital outlay - - 4,705,720 4,705,720 Total expenditures 4,914,153 2,463,425 4,738,801 12,116,379 Changes in fund balance before other financing sources(uses) 870,291 409,111 1,984,289 3,263,691 OTHER FINANCING SOURCES(USES) Transfer in 1,777,714 - 2,827,501 4,605,215 Transfer out (425,171) (515,500) (819,791) (1,760,462) Total other financing sources(uses) 1,352,543 (515,500) 2,007,710 2,844,753 Changes in fund balance 2,222,834 (106,389) 3,991,999 6,108,444 Fund Balance- Beginning of the year 6,015,562 1,446,055 5,358,679 12,820,296 Fund Balance-End of the year $ 8,238,396 $ 1,339,666 $ 9,350,678 $ 18,928,740 95 Special Revenue Funds The balance sheet and statement of revenues, expenditures and changes in fund balance of the non-major special revenue funds are reported in the combining governmental fund statements. Fund statements for the major special revenue funds are reported in the basic financial statements. Schedules of revenues, expenditures and changes in fund balance — budget and actual — are also presented here for each special revenue fund. Major Special Revenue Fund: Gas Tax Fund–This fund records shared revenues from the State of Oregon and Washington County taxes on sale of motor vehicle fuel. The city uses these revenues to fund various construction, reconstruction, improvements, repairs, maintenance and operation of public highways, roads and streets. Non-major Special Revenue Funds: City Gas Tax Fund –This fund accounts for revenues generated from Tigard's local gas tax and funds projects for transportation improvements. Electrical Inspection Fund–This fund accounts for fees charged for permits, plan check fees and inspection of electrical improvements. Building Fund–This fund accounts for fees charged for building inspection and plan review activities. Criminal Forfeiture Fund–This fund accounts for funds and property seized from criminals. Urban Forestry Fund–This fund accounts for funds collected from developers in lieu of preserving trees, which the city can use to plant trees in public right-of-way and other public properties. Parks Utility Fund–This fund accounts for fees charged for the maintenance and operation of city parks, trails, and green spaces. Library Fund–This fund accounts for the amounts received from several donations and bequests for various special projects and artwork. No content appears on this page by design. CITY OF TIGARD,OREGON NONMAJOR SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET June 30,2017 City Gas Electrical Criminal Tax Inspection Building Forfeiture Fund Fund Fund Fund ASSETS Cash and investments $ 924,727 $ - $ - $ - Accounts receivable 158,640 54 913 - Prepaids - - 16,485 - Restricted cash and investments - 337,196 4,773,111 256,140 Total assets $ 1,083,367 $ 337,250 $ 4,790,509 $ 256,140 LIABILITIES Accounts payable $ - $ 969 $ 402,629 $ - Due to others - 603 136,267 39,623 Deposits - 24,702 26,691 - Unearned revenue - - - - Totalliabilities - 26,274 565,587 39,623 FUND BALANCE Non-spendable: Prepaids - - 16,485 - Restricted for: Building inspection - 310,976 4,208,437 - Police services - - - 216,517 Library improvements - - - - Committed for: Street maintenance and improvements 1,083,367 - - - Urban forestry - - - - Assigned for: Park and recreation - - - - Total fund balances 1,083,367 310,976 4,224,922 216,517 Total liabilities and fund balances $ 1,083,367 $ 337,250 $ 4,790,509 $ 256,140 96 Urban Parks Forestry Utility Library Fund Fund Fund Total $ - $ 693,749 $ - $ 1,618,476 586 127,820 134 288,147 16,485 1,658,040 - 537,492 7,561,979 $ 1,658,626 $ 821,569 $ 537,626 $ 9,485,087 $ - $ 113,258 $ - $ 516,856 176,493 442,289 - - 493,682 59,660 59,660 442,289 113,258 59,660 1,246,691 - 16,485 - - - 4,519,413 - - - 216,517 477,966 477,966 - - - 1,083,367 1,216,337 - - 1,216,337 - 708,311 - 708,311 1,216,337 708,311 477,966 8,238,396 $ 1,658,626 $ 821,569 $ 537,626 $ 9,485,087 97 CITY OF TIGARD,OREGON NONMAJOR SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCE for the year ended June 30,2017 City Gas Electrical Criminal Tax Inspection Building Forfeiture Fund Fund Fund Fund REVENUES City gas tax $ 844,866 $ - $ - $ - Licenses and permits - 344,301 3,232,880 - Chargesforservices - - - - Intergovernmental revenues - - 63,799 - Fines and forfeitures - - - 24,292 Tree replacement revenue - - - - Interest earnings 64,061 326 3,453 13 Miscellaneous revenues 15,444 - 25,271 27 Total revenues 924,371 344,627 3,325,403 24,332 EXPENDITURES Community services - - - 190,446 Public works - - - - Community development - - 2,161,660 - Debt service: Principal 260,499 - - - Interest 47,400 - - - Total expenditures 307,899 - 2,161,660 190,446 Changes in fund balance before other financing sources(uses) 616,472 344,627 1,163,743 (166,114) OTHER FINANCING SOURCES(USES) Transfer in 127,714 - 300,000 - Transfer out (15,769) (303,121) - (2,744) Total other financing sources(uses) 111,945 (303,121) 300,000 (2,744) Changes in fund balance 728,417 41,506 1,463,743 (168,858) Fund balance-Beginning of the year 354,950 269,470 2,761,179 385,375 Fund balance-End of the year $ 1,083,367 $ 310,976 $ 4,224,922 $ 216,517 98 Urban Parks Forestry Utility Library Fund Fund Fund Total $ - $ - $ - $ 844,866 - - - 3,577,181 - 1,134,852 - 1,134,852 - 5,000 - 68,799 - - 24,292 18,707 - - 18,707 1,627 487 1,073 71,040 - 3,965 - 44,707 20,334 1,144,304 1,073 5,784,444 - - - 190,446 - 2,254,148 - 2,254,148 - - 2,161,660 - - - 260,499 - - - 47,400 - 2,254,148 - 4,914,153 20,334 (1,109,844) 1,073 870,291 - 1,350,000 - 1,777,714 (103,537) - - (425,171) (103,537) 1,350,000 -' 1,352,543 (83,203) 240,156 1,073 2,222,834 1,299,540 468,155 476,893 6,015,562 $ 1,216,337 $ 708,311 $ 477,966 $ 8,238,396 99 CITY OF TIGARD,OREGON CITY GAS TAX FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES City gas tax $ 619,511 $ 619,511 $ 844,866 $ 225,355 State grants 3 3 - (3) Interest earnings 34,584 34,584 64,061 29,477 Miscellaneous revenues 32,052 _ 32,052 15,444 (16,608) Total revenues 686,150 686,150 924,371 238,221 EXPENDITURES *Debt service: Principal 250,322 250,322 260,499 (10,177) Interest 57,577 57,577 47,400 10,177 Total expenditures 307,899 307,899 307,899 - Changes in fund balance before other financing sources(uses) 378,251 378,251 616,472 238,221 OTHER FINANCING SOURCES(USES) Transfer in 200,000 200,000 127,714 (72,286) Transfer out (334,668) (334,668) (15,769) 318,899 Contingency (300,000) (300,000) - 300,000 Reserve for future expenditures (141,709) (141,709) - 141,709 Total other financing sources(uses) (576,377) (576,377) 111,945 688,322 Change in fund balance (198,126) (198,126) 728,417 926,543 Fund balance-Beginning of the year 198,126 198,126 354,950 156,824 Fund balance-End of the year $ - $ - $ 1,083,367 $ 1,083,367 * Budget appropriation is made at the debt service program level 100 CITY OF TIGARD,OREGON ELECTRICAL INSPECTION FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Licenses and permits $ 476,287 $ 476,287 $ 344,301 $ (131,986) Interest earnings 1,207 1,207 326 (881) Total revenues 477,494 477,494 344,627 (132,867) OTHER FINANCING(USES) Transfer out (303,121) (303,121) (303,121) - Contingency (50,000) (50,000) - 50,000 Reserve for future expenditures (293,767) (293,767) - 293,767 Total other financing(uses) (646,888) (646,888) (303,121) 343,767 Change in fund balance (169,394) (169,394) 41,506 210,900 Fund balance-Beginning of the year 169,394 169,394 269,470 100,076 Fund balance-End of the year $ - $ - $ 310,976 $ 310,976 101 CITY OF TIGARD,OREGON BUILDING FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Licenses and permits $ 4,565,141 $ 4,565,141 $ 3,232,880 $ (1,332,261) Intergovernmental revenues 8,281 8,281 63,799 55,518 Interest earnings 19,782 19,782 3,453 (16,329) Miscellaneous revenues 7,967 7,967 25,271 17,304 Total revenues 4,601,171 4,601,171 3,325,403 (1,275,768) EXPENDITURES Community development 2,414,784 2,422,784 2,161,660 261,124 Change in fund balance before other financing sources(uses) 2,186,387 2,178,387 1,163,743 (1,014,644) OTHER FINANCING SOURCES(USES) Transfer in 300,000 300,000 300,000 - Contingency (250,000) (242,000) - 242,000 Reserve for future expenditures (4,455,879) (4,455,879) - 4,455,879 Total other financing sources(uses) (4,405,879) (4,397,879) 300,000 4,697,879 Change in fund balance (2,219,492) (2,219,492) 1,463,743 3,683,235 Fund balance-Beginning of the year 2,219,492 2,219,492 2,761,179 541,687 Fund balance-End of the year $ - $ - $ 4,224,922 $ 4,224,922 102 CITY OF TIGARD,OREGON CRIMINAL FORFEITURE FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Interest earnings $ 1,892 $ 1,892 $ 13 $ (1,879) Forfeitures 43,000 43,000 24,292 (18,708) Miscellaneous revenues - - 27 27 Total revenues 44,892 44,892 24,332 (20,560) EXPENDITURES Community services 150,000 200,000 190,446 9,554 Change in fund balance before other financing sources(uses) (105,108) (155,108) (166,114) (11,006) OTHER FINANCING SOURCES(USES) Transfer out (2,744) (2,744) (2,744) - Reserve for future expenditures (86,255) (86,255) - 86,255 Total other financing sources(uses) (88,999) (88,999) (2,744) 86,255 Change in fund balance (194,107) (244,107) (168,858) 75,249 Fund balance-Beginning of the year 194,107 244,107 385,375 141,268 Fund balance-End of the year $ - $ - $ 216,517 $ 216,517 103 CITY OF TIGARD,OREGON URBAN FORESTRY FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Tree replacement revenue $ 32,813 $ 32,813 $ 18,707 $ (14,106) Interest earnings 4,060 4,060 1,627 (2,433) Total revenues 36,873 36,873 20,334 (16,539) OTHER FINANCING SOURCES(USES) Transfer out (153,382) (153,382) (103,537) 49,845 Contingency (50,000) (50,000) - 50,000 Reserve for future expenditures (987,524) (987,524) - 987,524 Total other financing sources(uses) (1,190,906) (1,190,906) (103,537) 1,087,369 Change in fund balance (1,154,033) (1,154,033) (83,203) 1,070,830 Fund balance-Beginning of the year 1,154,033 1,154,033 1,299,540 145,507 Fund balance-End of the year $ - $ - $ 1,216,337 $ 1,216,337 104 CITY OF TIGARD,OREGON PARKS UTILITY FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Charges for services $ 1,000,000 $ 1,000,000 $ 1,134,852 $ 134,852 Intergovernmental revenues - - 5,000 5,000 Interest earnings - - 487 487 Miscellaneous revenues - - 3,965 3,965 Total revenues 1,000,000 1,000,000 1,144,304 144,304 EXPENDITURES Public works 2,460,583 2,490,293 2,254,148 236,145 Change in fund balance before other financing sources(uses) (1,460,583) (1,490,293) (1,109,844) 380,449 OTHER FINANCING SOURCES(USES) Transfer in 1,535,000 1,554,860 1,350,000 (204,860) Contingency (100,000) (90,150) - 90,150 Reserve for future expenditures (131,174) (131,174) - 131,174 Total other financing sources(uses) 1,303,826 1,333,536 1,350,000 16,464 Change in fund balance (156,757) (156,757) 240,156 396,913 Fund balance-Beginning of the year 156,757 156,757 468,155 311,398 Fund balance-End of the year $ - $ - $ 708,311 $ 708,311 105 CITY OF TIGARD,OREGON LIBRARY FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES: Donations $ - $ - $ 562 $ 562 Interest earnings - - 511 511 Total revenue - - 1,073 1,073 OTHER FINANCING SOURCES(USES) Transfers out (100,000) (100,000) - 100,000 Reserve for future expenditures (374,648) (374,648) - 374,648 Total other financing sources(uses) (474,648) (474,648) - 474,648 Change in fund balance (474,648) (474,648) 1,073 475,721 Fund balance-Beginning of the year 474,648 474,648 476,893 2,245 Fund balance-End of the year $ - $ - $ 477,966 $ 477,966 106 Debt Service Funds The balance sheet and statement of revenues, expenditures and changes in fund balance of the non- major debt service funds are reported in the combining non-major governmental fund statements. Schedules of revenues, expenditures and changes in fund balance — budget and actual — are also presented for each debt service fund. Non-major Debt Service Funds: Bancroft Bond Debt Service Fund – This fund accounts for payment of Bancroft improvement bond principal and interest. Revenues are derived from the collection of assessments against benefitted property and interest earnings. General Obligation Debt Service Fund – This fund accounts for payment of general obligation bond principal and interest. Revenues are derived from property taxes and interest earnings. Urban Renewal Agency Debt Service Fund –This fund accounts for principal and interest payments on debt for the Tigard Urban Renewal Agency and transfers to the Urban Renewal Agency Capital Improvement Fund. Revenues are from property taxes and interest earnings. CITY OF TIGARD,OREGON NONMAJOR DEBT SERVICE FUNDS COMBINING BALANCE SHEET June 30,2017 Bancroft Bond General Urban Renewal Debt Service Obligation Debt Agency Debt Fund Service Fund Service Fund Total ASSETS Property taxes receivable $ - $ 105,250 $ 18,032 $ 123,282 Assessment liens receivable 369,929 - - 369,929 Interest receivable - 8,549 1,498 10,047 Restricted cash and investments 97,768 1,108,671 122,771 1,329,210 Total assets $ 467,697 $ 1,222,470 $ 142,301 $ 1,832,468 DEFERRED INFLOWS OF RESOURCES Resources not yet available: Special assessments/liens $ 369,929 $ - $ - $ 369,929 Property taxes - 104,914 17,959 122,873 Total deferred inflows of resources 369,929 104,914 17,959 492,802 FUND BALANCES Restricted for debt service 97,768 1,117,556 124,342 1,339,666 Total deferred inflows of resources and fund balances $ 467,697 $ 1,222,470 $ 142,301 $ 1,832,468 107 CITY OF TIGARD,OREGON NONMAJOR DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES for the year ended June 30,2017 Bancroft Bond General Urban Renewal Debt Service Obligation Debt Agency Debt Fund Service Fund Service Fund Total REVENUES Taxes $ - $ 2,317,805 $ 440,497 $ 2,758,302 Collection of bonded assessments 52,146 - - 52,146 Interest earnings 36,678 21,272 4,138 62,088 Total revenues 88,824 2,339,077 444,635 2,872,536 EXPENDITURES Debt service: Principal 83,100 1,410,000 130,246 1,623,346 Interest 20,225 783,100 36,754 840,079 Total expenditures 103,325 2,193,100 167,000 2,463,425 Change in fund balance before other financing sources(uses) (14,501) 145,977 277,635 409,111 OTHER FINANCING SOURCES(USES) Transfer out - - (515,500) (515,500) Change in fund balance (14,501) 145,977 (237,865) (106,389) Fund balance-Beginning of the year 112,269 971,579 362,207 1,446,055 Fund balance-End of the year $ 97,768 $ 1,117,556 $ 124,342 $ 1,339,666 108 CITY OF TIGARD,OREGON BANCROFT BOND DEBT SERVICE FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Collection of bonded assessments $ 120,000 $ 120,000 $ 52,146 $ (67,854) Interest earnings - - 36,678 36,678 Total revenues 120,000 120,000 88,824 (31,176) EXPENDITURES Debt service: Principal 83,100 83,100 83,100 - Interest 20,000 20,000 20,225 (225) Total expenditures 103,100 103,100 103,325 (225) Change in fund balance before other financing sources(uses) 16,900 16,900 (14,501) (31,401) OTHER FINANCING SOURCES(USES) Transfers out (1,536) (1,536) - 1,536 Reserve for future expenditures (158,894) (158,894) - 158,894 Total other financing sources(uses) (160,430) (160,430) - 160,430 Change in fund balance (143,530) (143,530) (14,501) 129,029 Fund balance-Beginning of the year 143,530 143,530 112,269 (31,261) Fund balance-End of the year $ - $ - $ 97,768 $ 97,768 109 CITY OF TIGARD,OREGON GENERAL OBLIGATION DEBT SERVICE FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Taxes $ 2,562,005 $ 2,562,005 $ 2,317,805 $ (244,200) Interest earnings 4,612 4,612 21,272 16,660 Total revenues 2,566,617 2,566,617 2,339,077 (227,540) EXPENDITURES Debt service: Principal 1,410,000 1,410,000 1,410,000 - Interest 783,200 783,200 783,100 100 Total expenditures 2,193,200 2,193,200 2,193,100 100 Change in fund balance before other financing sources(uses) 373,417 373,417 145,977 (227,440) OTHER FINANCING SOURCES(USES) Transfer out (1,352) (1,352) - 1,352 Reserve for future expenditures (1,378,361) (1,378,361) - 1,378,361 Total other financing sources(uses) (1,379,713) (1,379,713) - 1,379,713 Change in fund balance (1,006,296) (1,006,296) 145,977 1,152,273 Fund balance-Beginning of the year 1,006,296 1,006,296 971,579 (34,717) Fund balance-End of the year $ - $ - $ 1,117,556 $ 1,117,556 110 CITY OF TIGARD,OREGON URBAN RENEWAL AGENCY DEBT SERVICE FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Property taxes $ 434,000 $ 434,000 $ 440,497 $ 6,497 Interest earnings - - 4,138 4,138 Total revenues 434,000 434,000 444,635 10,635 EXPENDITURES *Debt service: Principal 130,246 130,246 130,246 - Interest 36,754 36,754 36,754 - Total expenditures 167,000 167,000 167,000 - Change in fund balance before other financing sources(uses) 267,000 267,000 277,635 10,635 OTHER FINANCING SOURCES(USES) Transfers out (629,000) (629,000) (515,500) 113,500 Reserve for future expenditure (20,000) (20,000) - 20,000 Total other financing sources(uses) (649,000) (649,000) (515,500) 133,500 Change in fund balance (382,000) (382,000) (237,865) 144,135 Fund balance-Beginning of the year 382,000 382,000 362,207 (19,793) Fund balance-End of the year $ - $ - $ 124,342 $ 124,342 *Budget appropriation is made at the debt service program level Principal payments,budgetary basis $ 130,246 Amount that reduces debt in the Urban Renewal Capital Projects Fund (246) Principal payments,GAAP basis $ 130,000 Transfers out,budgetary basis $ (515,500) Amount that reduces debt in the Urban Renewal Capital Projects Fund (246) Transfers out,GAAP basis $ (515,746) 111 No content appears on this page by design. Capital Project Funds Combining statements for all individual non-major capital projects funds are reported here. The combined totals are reported in the combining non-major governmental fund statements. Schedules of revenues,expenditures and changes in fund balance—budget and actual—are also presented here for each capital projects fund. Non-major Capital Projects Funds: Facility Fund–Accounts for major city owned facility improvements. Resources are primarily transfers in from the General Fund. Transportation System Development Charges (SDC) Fund –this fund was established to track the revenues and expenditures associated with the collection of transportation system development charges.The fee is collected on the issue of building permits for any new residential multi-family, or commercial construction to assist with infrastructure capacity needs. Underground Utility Fund –Accounts for resources received from developers for future underground utility improvements. Street Maintenance Fee Fund –Accounts for revenues and expenditures for the Street Maintenance Fee.This fee provides revenue designated for use in the maintenance of existing city streets. Parks Capital Fund–Accounts for revenues earmarked for improvements to park and recreational facilities within the city. Resources are primarily transfers in of system development charges and other funds and grants and donations. Expenditures consist of various park,trail development and open space acquisition projects. Parks Bond Fund–Accounts for the voter approved a$17 million parks bond debt issued for purchase of land and green spaces to develop city parks. Transportation Capital Improvement Project Fund–Accountsforcapital improvement projectsfunded with transportation revenues; including Gas Tax, Traffic Impact Fees and Transportation Development Tax. Urban Renewal Agency Capital Improvement Fund–This fund was established in FY 2007-08 for the creation of a new urban renewal agency to improve downtown Tigard. Expenses are for capital improvements within the urban renewal plan. Resources are from financing proceeds or transfers in from the Urban Renewal Debt Service Fund. Major Capital Projects Funds: Transportation Development Tax Fund–Accounts for traffic impact fees collected on roads within the city's urban service areas.This fund replaced theTraffic Impact Fee Fund starting July 1,2009. Funds will be used for highways and transit capital improvements in the city's Capital Improvement Plan. Parks System Development Charges (SDC) Fund –Accounts for revenues associated with the collection of Parks System Development Charges. Resources are used to fund the acquisition, development and expansion of additional recreation spaces and facilities that are included in the city's Park Master Plan. No content appears on this page by design. CITY OF TIGARD,OREGON CAPITAL PROJECTS FUNDS COMBINING BALANCE SHEET June 30,2017 Underground Street Transportation Facility Utility Maintenance SDC Fund Fund Fee Fund Fund ASSETS Cash and investments $ 1,028,114 $ - $ 1,938,576 $ - Accounts receivable 325 170 304,188 (42) Prepaids - - - - Restricted cash and investments - 109,973 - 3,882,305 Total assets $ 1,028,439 $ 110,143 $ 2,242,764 $ 3,882,263 LIABILITIES Accounts payable and accrued liabilities $ 11,664 $ - $ 200,630 $ 5,488 Advances from other funds-interfund loans - - - - Total liabilities 11,664 - 200,630 5,488 DEFERRED INFLOWS OF RESOURCES Special assessments/liens - - - - FUND BALANCES(DEFICIT) Restricted for: Street maintenance and improvements - - - 3,876,775 Park development and improvements - - - - Underground utilities - 110,143 - - Committed for: Street maintenance and improvements - - 2,042,134 - Assigned to: City facilities 1,016,775 - - - Unassigned - - - - Total fund balances(deficit) 1,016,775 110,143 2,042,134 3,876,775 Total liabilities,deferred inflows of resources and fund balance $ 1,028,439 $ 110,143 $ 2,242,764 $ 3,882,263 112 Transportation Parks Parks Capital Urban Renewal Capital Bond Improvement Agency Capital Fund Fund Fund Projects Fund Total $ - $ - $ - $ 5,379 $ 2,972,069 120,503 - 33,453 55,885 514,482 - - 6,940 - 6,940 949,690 1,647,805 1,051,861 - 7,641,634 $ 1,070,193 $ 1,647,805 $ 1,092,254 $ 61,264 $ 11,135,125 $ 205,476 $ - $ 334,629 $ 29,128 $ 787,015 - - 757,432 757,432 205,476 - 334,629 786,560 1,544,447 240,000 - - - 240,000 757,625 - 4,634,400 624,717 1,647,805 - - 2,272,522 - 110,143 - - - 2,042,134 - - - - 1,016,775 - (725,296) (725,296) 624,717 1,647,805 757,625 (725,296) 9,350,678 $ 1,070,193 $ 1,647,805 $ 1,092,254 $ 61,264 $ 11,135,125 113 CITY OF TIGARD,OREGON CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCE for the year ended June 30,2017 Underground Street Transportation Facility Utility Maintenance SDC Fund Fund Fee Fund Fund REVENUES Charges for services $ - $ 12,320 $ 2,462,642 $ 2,892,575 Intergovernmental revenues - - - - Rental revenues - - - - Interest earnings 1,080 444 826 1,067 Miscellaneous revenues 39 - 55 - Total revenues 1,119 12,764 2,463,523 2,893,642 EXPENDITURES Community development - - - - Capital projects 312,482 - 1,713,235 - Total expenditures 312,482 - 1,713,235 - Change in fund balance before other financing sources(uses) (311,363) 12,764 750,288 2,893,642 OTHER FINANCING SOURCES(USES) Transfer in 215,314 - - - Transfer out (16,794) (353,542) (313,900) (5,496) Total other financing sources(uses) 198,520 (353,542) (313,900) (5,496) Change in fund balance (112,843) (340,778) 436,388 2,888,146 Fund balance-Beginning of the year 1,129,618 450,921 1,605,746 988,629 Fund balance-End of the year $ 1,016,775 $ 110,143 $ 2,042,134 $ 3,876,775 114 Transportation Parks Parks Capital Urban Renewal Capital Bond Improvement Agency Capital Fund Fund Fund Projects Fund Total $ - $ - $ 4,268 $ - $ 5,371,805 249,494 515,500 268,630 140,344 1,173,968 - - - 84,425 84,425 12,301 - - 15,718 76 - 77,004 - 77,174 249,570 527,801 349,902 224,769 6,723,090 - - - 33,081 33,081 862,911 - 1,001,691 815,401 4,705,720 862,911 - 1,001,691 848,482 4,738,801 (613,341) 527,801 (651,789) (623,713) 1,984,289 845,941 - 1,250,500 515,746 2,827,501 - (2,345) (127,714) - (819,791) 845,941 (2,345) 1,122,786 515,746 2,007,710 232,600 525,456 470,997 (107,967) 3,991,999 392,117 1,122,349 286,628 (617,329) 5,358,679 $ 624,717 $ 1,647,805 $ 757,625 $ (725,296) $ 9,350,678 115 CITY OF TIGARD,OREGON FACILITY FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Interest earnings $ 3,212 $ 3,212 $ 1,080 $ (2,132) Miscellaneous revenues - - 39 _ 39 Total revenues 3,212 3,212 1,119 (2,093) EXPENDITURES Capital projects 315,000 515,000 312,482 202,518 Change in fund balance before other financing sources(uses) (311,788) (511,788) (311,363) 200,425 OTHER FINANCING SOURCES(USES) Transfer in 314,166 314,166 215,314 (98,852) Transfer out (16,794) (16,794) (16,794) - Contingency (50,000) (50,000) - 50,000 Reserve for future expenditures (438,038) (238,038) - 238,038 Total other financing sources(uses) (190,666) 9,334 198,520 189,186 Change in fund balance (502,454) (502,454) (112,843) 389,611 Fund balance-Beginning of the year 502,454 502,454 1,129,618 627,164 Fund balance-End of the year $ - $ - $ 1,016,775 $ 1,016,775 116 CITY OF TIGARD,OREGON UNDERGROUND UTILITY FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Charges for services $ 124,817 $ 124,817 $ 12,320 $ (112,497) Interest earnings 7,160 7,160 444 (6,716) Total revenues 131,977 131,977 12,764 (119,213) OTHER FINANCING SOURCES(USES) Transfer out (324,139) (384,619) (353,542) 31,077 Reserve for future expenditures (42,135) (42,135) - 42,135 Total other financing uses (366,274) (426,754) (353,542) 73,212 Change in fund balance (234,297) (294,777) (340,778) (46,001) Fund balance-Beginning of the year 234,297 294,777 450,921 156,144 Fund balance-End of the year $ - $ - $ 110,143 $ 110,143 117 CITY OF TIGARD,OREGON STREET MAINTENANCE FEE FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Charges for services $ 2,239,103 $ 2,239,103 $ 2,462,642 $ 223,539 Interest earnings 2,043 2,043 826 (1,217) Miscellaneous revenues 1,299 1,299 55 (1,244) Total revenues 2,242,445 2,242,445 2,463,523 221,078 EXPENDITURES Capital projects 1,985,000 1,985,000 1,713,235 271,765 Change in fund balance before other financing sources(uses) 257,445 257,445 750,288 492,843 OTHER FINANCING SOURCES(USES) Transfer out (313,900) (320,600) (313,900) 6,700 Contingency (200,000) (193,300) - 193,300 Reserve for future expenditures (1,253,853) (1,253,853) - 1,253,853 Total other financing sources(uses) (1,767,753) (1,767,753) (313,900) 1,453,853 Change in fund balance (1,510,308) (1,510,308) 436,388 1,946,696 Fund balance-Beginning of the year 1,510,308 1,510,308 1,605,746 95,438 Fund balance-End of the year $ - $ - $ 2,042,134 $ 2,042,134 118 CITY OF TIGARD,OREGON TRANSPORTATION SDC FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Charges for services $ 1,614,750 $ 1,614,750 $ 2,892,575 $ 1,277,825 Interest earnings - - 1,067 1,067 Total revenues 1,614,750 1,614,750 2,893,642 1,278,892 OTHER FINANCING SOURCES(USES) Transfer out (221,015) (227,015) (5,496) 221,519 Contingency (50,000) (44,000) - 44,000 Reserve for future expenditures (1,397,735) (1,397,735) - 1,397,735 Total other financing sources(uses) (1,668,750) (1,668,750) (5,496) 1,663,254 Change in fund balance (54,000) (54,000) 2,888,146 2,942,146 Fund balance-Beginning of the year 54,000 54,000 988,629 934,629 Fund balance-End of the year $ - $ - $ 3,876,775 $ 3,876,775 119 CITY OF TIGARD,OREGON PARKS CAPITAL FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Intergovernmental revenues $ 572,000 $ 572,000 $ 249,494 $ (322,506) Interest earnings 3,015 3,015 - (3,015) Miscellaneous revenues - - 76 76 Total revenues 575,015 575,015 249,570 (325,445) EXPENDITURES Capital projects 3,110,319 3,572,319 862,911 2,709,408 Change in fund balance before other financing sources(uses) (2,535,304) (2,997,304) (613,341) 2,383,963 OTHER FINANCING SOURCES(USES) Transfer in 2,558,638 3,020,638 845,941 (2,174,697) Reserve for future expenditures (428,373) (428,373) - 428,373 Total other financing sources(uses) 2,130,265 2,592,265 845,941 (1,746,324) Change in fund balance (405,039) (405,039) 232,600 637,639 Fund balance-Beginning of the year 405,039 405,039 392,117 (12,922) Fund balance-End of the year $ - $ - $ 624,717 $ 624,717 120 CITY OF TIGARD,OREGON PARKS BOND FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Intergovernmental revenues $ 515,000 $ 515,000 $ 515,500 $ 500 Interest earnings 2,000 2,000 12,301 10,301 Total revenues 517,000 517,000 527,801 10,801 OTHER FINANCING SOURCES(USES) Transfer out (1,285,000) (1,327,000) (2,345) 1,324,655 Reserve for future expenditures (16,997) (16,997) - 16,997 Total other financing uses (1,301,997) (1,343,997) (2,345) 1,341,652 Change in fund balance (784,997) (826,997) 525,456 1,352,453 Fund balance-Beginning of the year 784,997 826,997 1,122,349 295,352 Fund balance-End of the year $ - $ - $ 1,647,805 $ 1,647,805 121 CITY OF TIGARD,OREGON TRANSPORTATION CIP FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Intergovernmental revenues $ 3,911,000 $ 3,911,000 $ 268,630 $ (3,642,370) Miscellaneous revenues 1,526,000 1,526,000 77,004 (1,448,996) Charges for services - - 4,268 4,268 Total revenues 5,437,000 5,437,000 349,902 (5,087,098) EXPENDITURES Capital projects 7,260,044 7,740,044 1,001,691 6,738,353 Change in fund balance before other financing sources(uses) (1,823,044) (2,303,044) (651,789) 1,651,255 OTHER FINANCING SOURCES(USES) Transfers in 2,033,044 2,513,044 1,250,500 (1,262,544) Transfer out (200,000) (200,000) (127,714) 72,286 Reserve for future expenditures (177,821) (177,821) - 177,821 Total other financing sources 1,655,223 2,135,223 1,122,786 (1,012,437) Change in fund balance (167,821) (167,821) 470,997 638,818 Fund balance-Beginning of the year 167,821 167,821 286,628 118,807 Fund balance-End of the year $ - $ - $ 757,625 $ 757,625 122 CITY OF TIGARD,OREGON URBAN RENEWAL AGENCY CAPITAL PROJECT FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Intergovernmental revenues $ 500,000 $ 500,000 $ 140,344 $ (359,656) Rental revenues 78,000 78,000 84,425 6,425 Total revenues 578,000 578,000 224,769 (353,231) EXPENDITURES * Capital projects 1,207,000 1,207,000 848,482 358,518 Total expenditures 1,207,000 1,207,000 848,482 358,518 Change in fund balance before other financing sources(uses) (629,000) (629,000) (623,713) 5,287 OTHER FINANCING SOURCES(USES) Transfer in 629,000 629,000 515,500 (113,500) Change in fund balance - - (108,213) (108,213) Fund balance-Beginning of the year - - 140,349 140,349 Fund balance-End of the year $ - $ - 32,136 $ 32,136 Reconciliation of budgetary fund balance to GAAP basis fund balance: Budgeted resources not qualifying as revenues or other financing sources under GAAP: Interfund loans are treated as revenue on a budgetary basis. (757,432) Fund balance-GAAP basis $ (725,296) Transfers in,budgetary basis $ 515,500 Payments on interfund debt provided by Urban Renewal Debt Service Fund 246 Transfers in,GAAP basis $ 515,746 *For budgetary puposes expenditures are appropriated as capital projects,however on the GAAP statements non-capital transactions are recorded as program expenditures 123 CITY OF TIGARD,OREGON TRANSPORTATION DEVELOPMENT TAX FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Charges for services $ 1,785,000 $ 1,785,000 $ 4,179,562 $ 2,394,562 Interest earnings 11,279 11,279 5,147 (6,132) Total revenues 1,796,279 1,796,279 4,184,709 2,388,430 OTHER FINANCING SOURCES(USES) Transfer out (87,486) (104,486) (48,618) 55,868 Contingency (250,000) (233,000) - 233,000 Reserve for future expenditures (2,738,083) (2,738,083) - 2,738,083 Total other financing sources(uses) (3,075,569) (3,075,569) (48,618) 3,026,951 Change in fund balance (1,279,290) (1,279,290) 4,136,091 5,415,381 Fund balance-Beginning of the year 1,279,290 1,279,290 3,392,307 2,113,017 Fund balance-End of the year $ - $ - $ 7,528,398 $ 7,528,398 124 CITY OF TIGARD,OREGON PARKS SDC FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Charges for services $ 1,218,969 $ 1,218,969 $ 4,661,765 $ 3,442,796 Interest earnings 19,782 19,782 5,449 (14,333) Total revenues 1,238,751 1,238,751 4,667,214 3,428,463 OTHER FINANCING SOURCES(USES) Transfer out (1,086,045) (1,521,045) (459,786) 1,061,259 Contingency (47,681) (32,681) - 32,681 Reserve for future expenditures (1,400,599) (1,400,599) - 1,400,599 Total other financing sources(uses) (2,534,325) (2,954,325) (459,786) 2,494,539 Change in fund balance (1,295,574) (1,715,574) 4,207,428 5,923,002 Fund balance-Beginning of the year 1,295,574 1,715,574 3,929,232 2,213,658 Fund balance-End of the year $ - $ - $ 8,136,660 $ 8,136,660 125 No content appears on this page by design. Enterprise Funds For GAAP reporting purposes, the city reports three proprietary funds as major funds. These funds are the Sanitary Sewer Fund, the Stormwater Fund (which consists of the Stormwater Fund and the Water Quality/Quantity Fund) and the Water Fund (which includes the Water Fund, Water SDC Fund, Water CIP Fund and Water Debt Service Fund). For budgetary and legal purposes, these funds are accounted for separately as listed below. The city's enterprise funds meet the criteria for major fund reporting and are reported in the basic financial statements. Schedules or revenues and changes in fund net position — budget and actual are presented here for each individual enterprise fund as required by Oregon regulations. Sanitary Sewer Fund–Accounts for the city's sewer utility operations. Stormwater Fund – Accounts for the city's storm drainage operations and includes the following fund: • Water Quality/Quantity Fund – Accounts for the fees charged to new development for the additional impact on the stormwater system. Water Fund–Accounts for the city's water utility operations and includes the following funds: • Water SDC Fund – Accounts for the water impact fees charged to new development. • Water CIP Fund – Accounts for capital projects to expand or improve the city's water system infrastructure. • Water Debt Service Fund – Accounts for debt service on the water revenue bonds and long-term note. CITY OF TIGARD,OREGON SANITARY SEWER FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Charges for services $ 1,664,796 $ 1,664,796 $ 3,013,314 $ 1,348,518 Connection fees 42,200 42,200 163,276 121,076 Intergovernmental revenues 383,000 383,000 198,519 (184,481) Interest earnings 100,333 100,333 4,693 (95,640) Miscellaneous revenues 143,091 143,091 81,858 (61,233) Total revenues 2,333,420 2,333,420 3,461,660 1,128,240 EXPENDITURES Public works 2,181,253 2,247,443 1,840,399 407,044 Capital projects 1,160,111 1,160,111 715,878 444,233 Total expenditures 3,341,364 3,407,554 2,556,277 851,277 Change in fund balance before other financing sources(uses) (1,007,944) (1,074,134) 905,383 1,979,517 OTHER FINANCING SOURCES(USES) Transfer in - - 39 39 Transfer out (164,726) (164,726) (141,577) 23,149 Repayment on interfund loan - - 687 687 Contingency (400,000) (333,810) - 333,810 Reserve for future expenditures (2,037,180) (2,037,180) - 2,037,180 Total other financing sources(uses) (2,601,906) (2,535,716) (140,851) 2,394,865 Change in fund balance (3,609,850) (3,609,850) 764,532 4,374,382 Fund balance-Beginning of the year 3,609,850 3,609,850 4,229,917 620,067 Fund balance-End of the year $ - $ - $ 4,994,449 $ 4,994,449 126 CITY OF TIGARD,OREGON SANITARY SEWER FUND RECONCILIATION OF BUDGETARY REVENUES AND EXPENDITURES TO PROPRIETARY REVENUES AND EXPENSES for the year ended June 30,2017 Operating and Non-Operating Expenditures/ Revenues Expenses Budgetary basis $ 3,462,386 $ 2,556,277 Unavailable revenue (35,652) - Contributed capital 304,850 - Interfund loan payments (175) - Compensated absences - (2,996) Expenditures capitalized - (677,021) Depreciation expense - 718,377 Net OPEB obligation - 969 Operating and non-operating revenue and expenses-GAAP basis $ 3,731,409 $ 2,595,606 127 CITY OF TIGARD,OREGON STORMWATER FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Charges for services $ 2,676,445 $ 2,676,445 $ 3,275,083 $ 598,638 Federal grants - - 87,005 87,005 Interest earnings 7,936 7,936 5,630 (2,306) Miscellaneous revenues 3,100 3,100 3,982 882 Total revenues 2,687,481 2,687,481 3,371,700 684,219 EXPENDITURES Public works 1,999,819 2,008,755 1,665,257 343,498 Capital projects 1,050,611 1,479,611 1,330,462 149,149 Total expenditures 3,050,430 3,488,366 2,995,719 492,647 Change in fund balance before other financing sources(uses) (362,949) (800,885) 375,981 1,176,866 OTHER FINANCING USES Transfer in 93,500 93,500 85,597 (7,903) Transfer out (220,566) (229,566) (128,668) 100,898 Contingency (200,000) (191,064) - 191,064 Reserve for future expenditures (3,360,717) (3,360,717) - 3,360,717 Total other financing uses (3,687,783) (3,687,847) (43,071) 3,644,776 Change in fund balance (4,050,732) (4,488,732) 332,910 4,821,642 Fund balance-Beginning of the year 4,050,732 4,488,732 5,770,171 1,281,439 Fund balance-End of the year $ - $ - $ 6,103,081 $ 6,103,081 128 CITY OF TIGARD,OREGON WATER QUALITY/QUANTITY FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Charges for services $ - $ - $ 3,300 $ 3,300 Interest earnings 15,102 15,102 1,170 (13,932) Total revenues 15,102 15,102 4,470 (10,632) OTHER FINANCING SOURCES(USES) Transfer out (37,017) (37,017) - 37,017 Contingency (50,000) (50,000) - 50,000 Reserve for future expenditures (1,187,327) (1,187,327) - 1,187,327 Total other financing sources(uses) (1,274,344) (1,274,344) - 1,274,344 Change in fund balance (1,259,242) (1,259,242) 4,470 1,263,712 Fund balance-Beginning of the year 1,259,242 1,259,242 1,249,364 (9,878) Fund balance-End of the year $ - $ - $ 1,253,834 $ 1,253,834 129 CITY OF TIGARD,OREGON STORMWATER FUNDS RECONCILIATION OF BUDGETARY REVENUES AND EXPENDITURES TO PROPRIETARY REVENUES AND EXPENSES for the year ended June 30,2017 Operating and Non-operating Expenditures/ Revenues Expenses Stormwater $ 3,371,700 $ 3,124,387 Water Quality/Quantity 4,470 - Total, budgetary basis 3,376,170 3,124,387 Contributed capital (3,300) Loss on disposal of capital assets - - Compensated absences - (2,729) Expenditures capitalized - (774,414) Depreciation expense - 518,696 Net OPEB obligation - 1,401 Operating and non-operating revenue and expenses-GAAP basis $ 3,372,870 $ 2,867,341 130 CITY OF TIGARD,OREGON WATER FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Charges for services $ 19,742,336 $ 19,742,336 $ 20,926,322 $ 1,183,986 Interest earnings 30,644 30,644 13,698 (16,946) Miscellaneous revenues 10,933 10,933 152,456 141,523 Total revenues 19,783,913 19,783,913 21,092,476 1,308,563 EXPENDITURES Public works 7,249,963 7,325,645 6,251,065 1,074,580 Change in fund balance before other financing sources(uses) 12,533,950 12,458,268 14,841,411 2,383,143 OTHER FINANCING SOURCES(USES) Transfer in 58,751 58,751 58,751 - Transfer out (11,006,307) (12,718,062) (10,966,886) 1,751,176 Contingency (500,000) (24,598) - 24,598 Reserve for future expenditures (7,919,192) (7,919,192) - 7,919,192 Total other financing sources(uses) (19,366,748) (20,603,101) (10,908,135) 9,694,966 Change in fund balance (6,832,798) (8,144,833) 3,933,276 12,078,109 Fund balance-Beginning of the year 6,832,798 8,144,833 16,312,464 8,167,631 Fund balance-End of the year $ - $ - $ 20,245,740 $ 20,245,740 131 CITY OF TIGARD,OREGON WATER SDC FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES System development charges $ 2,227,973 $ 2,227,973 $ 6,532,039 $ 4,304,066 Interest earnings 233 233 6,660 6,427 Total revenues 2,228,206 2,228,206 6,538,699 4,310,493 OTHER FINANCING SOURCES(USES) Transfer out (2,720,960) (3,504,720) (3,504,720) - Contingency (100,000) (100,000) - 100,000 Reserve for future expenditures (1,153,660) (1,153,660) - 1,153,660 Total other financing sources(uses) (3,974,620) (4,758,380) (3,504,720) 1,253,660 Change in fund balance (1,746,414) (2,530,174) 3,033,979 5,564,153 Fund balance-Beginning of the year 1,746,414 2,530,174 5,517,329 2,987,155 Fund balance-End of the year $ - $ - $ 8,551,308 $ 8,551,308 132 CITY OF TIGARD,OREGON WATER CIP FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Interest earnings $ 13,096 $ 13,096 $ - $ (13,096) Miscellaneous revenues 5,318 5,318 32,332 27,014 Total revenues 18,414 18,414 32,332 13,918 EXPENDITURES Capital projects 10,432,158 10,432,158 8,698,152 1,734,006 Change in fund balance before other financing sources(uses) (10,413,744) (10,413,744) (8,665,820) 1,747,924 OTHER FINANCING SOURCES(USES) Transfer in 5,198,158 5,198,158 5,964,802 766,644 Transfer out (51,935) (51,935) (51,935) - Reserve for future expenditures (3,023,678) (3,023,678) - 3,023,678 Total other financing sources(uses) 2,122,545 2,122,545 5,912,867 3,790,322 Change in fund balance (8,291,199) (8,291,199) (2,752,953) 5,538,246 Fund balance-Beginning of the year 8,291,199 8,291,199 4,403,089 (3,888,110) Fund balance-End of the year $ - $ - $ 1,650,136 $ 1,650,136 133 CITY OF TIGARD,OREGON WATER DEBT SERVICE FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Interest earnings $ - $ - $ 74,264 $ 74,264 Total revenues - - 74,264 74,264 EXPENDITURES Debt service: Principal 2,130,945 2,130,945 2,130,945 - Interest 6,262,339 6,262,339 6,262,339 - Total expenditures 8,393,284 8,393,284 8,393,284 - Change in fund balance before other financing sources(uses) (8,393,284) (8,393,284) (8,319,020) 74,264 OTHER FINANCING SOURCES(USES) Transfer in 8,393,283 8,393,283 8,393,283 - Reserve for future expenditures (6,670,795) (6,670,795) - 6,670,795 Total other financing sources(uses) 1,722,488 1,722,488 8,393,283 6,670,795 Change in fund balance (6,670,796) (6,670,796) 74,263 6,745,059 Fund balance-Beginning of the year 6,670,796 6,670,796 6,762,299 91,503 Fund balance-End of the year $ - $ - $ 6,836,562 $ 6,836,562 134 CITY OF TIGARD,OREGON WATER FUNDS RECONCILIATION OF BUDGETARY REVENUES AND EXPENDITURES TO PROPRIETARY REVENUES AND EXPENSES for the year ended June 30,2017 Operating and Non-operating Expenditures/ Revenues Expenses Water $ 21,151,227 $ 17,217,951 Water SDC 6,538,699 3,504,720 Water CIP 5,997,134 8,750,087 Water Debt Service 8,467,547 8,393,284 Total, budgetary basis 42,154,607 37,866,042 Contributed capital 298,780 - Elimination of water interfund transfers (14,358,085) (14,358,085) Compensated absences - (34,790) Expenditures capitalized - (8,410,072) Principal payments - (2,130,945) Accrued interest - (1,515) Amortization of bond premium - (554,542) Interest capitalized - (5,362,832) Depreciation expense - 1,411,940 Net OPEB obligation - 2,150 Operating and non-operating revenue and expenses-GAAP basis $ 28,095,302 $ 8,427,351 135 CITY OF TIGARD,OREGON ENTERPRISE FUNDS RECONCILIATION OF BUDGETARY FUND BALANCE TO GENERALLY ACCEPTED ACCOUNTING PRINCIPLES BASIS NET POSITION June 30,2017 Total Total Total Sanitary Sewer Stormwater Water Sanitary Sewer Fund $ 4,994,449 $ - $ - Stormwater Fund - 6,103,081 - Water Quality/Quantity Fund - 1,253,834 - Water Fund - - 20,245,740 Water SDC Fund - - 8,551,308 Water CIP Fund - - 1,650,136 Water Debt Service Fund - - 6,836,562 Fund balance-budget basis 4,994,449 7,356,915 37,283,746 Adjustments from budgetary basis to generally accepted accounting principles basis: Capital assets, net 17,959,502 12,152,297 211,925,823 Sewer funds payable (21,779) - - Assets held for resale 185,021 260,021 - Unavailable revenue 45,305 - - Compensated absences (21,013) (24,017) (55,139) Long-term debt - - (138,327,290) Accrued interest payable - - (2,612,813) Interfund loans 102,320 - - OPEB obligation (39,079) (44,590) (84,530) Total Net Position-GAAP basis $ 23,204,726 $ 19,700,626 $ 108,129,797 136 No content appears on this page by design. Internal Service Funds Combining statements for internal service funds are reported here. The combined totals are reported alongside the enterprise funds in the basic financial statements. Schedules of revenues, expenses and changes in fund net position — budget and actual — are presented here for each internal service fund as required by Oregon regulations. Internal Service Funds: Central Services Fund — Accounts for the central administrative functions within the city. Expenditures are primarily payroll and related expenses for city policy and administration functions. Resources are charges for services to city departments and internal customers. Fleet/Property Management Fund — Accounts for activity related to the fleet maintenance and property management divisions in the city. Resources are charges for services to city departments and internal customers. Insurance Fund — Accounts for the city's risk management program and insurance coverage premiums and related costs to help reduce the overall insurance cost to the city. Resources are primarily refunds of prior years' premiums. CITY OF TIGARD,OREGON INTERNAL SERVICE FUNDS COMBINING STATEMENT OF NET POSITION June 30,2017 Central Fleet/Property Services Management Insurance Fund Fund Fund Total ASSETS Cash and investments $ 1,480,448 $ 379,033 $ 1,083,167 $ 2,942,648 Accounts receivable 38,203 - 384 38,587 Prepaids 66,826 - - 66,826 Inventory - 37,143 - 37,143 Total assets 1,585,477 416,176 1,083,551 3,085,204 LIABILITIES Accounts payable and accrued liabilities 276,490 160,229 - 436,719 Unearned revenue 15,714 - - 15,714 Accrued compensated absences 265,765 28,665 - 294,430 Net OPEB obligation 286,213 24,886 - 311,099 Total liabilities 844,182 213,780 - 1,057,962 NET POSITION Net position, unrestricted $ 741,295 $ 202,396 $ 1,083,551 $ 2,027,242 137 CITY OF TIGARD,OREGON INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES,EXPENSES AND CHANGES IN FUND NET POSITION for the year ended June 30,2017 Central Fleet/Property Services Management Insurance Fund Fund Fund Total OPERATING REVENUES Charges for services $ 7,374,686 $ 1,927,788 $ - $ 9,302,474 Miscellaneous revenues 76,544 1,837 219,021 297,402 Total operating revenues 7,451,230 1,929,625 219,021 9,599,876 OPERATING EXPENSES Salaries and wages 4,671,972 652,906 - 5,324,878 Contracted services 633,046 394,200 186 1,027,432 General,administrative and other 2,624,220 913,097 36,424 3,573,741 Total operating expenses 7,929,238 1,960,203 36,610 9,926,051 Operating income(loss) (478,008) (30,578) 182,411 (326,175) NONOPERATING REVENUE Interest revenue 23,932 - 843 24,775 Income(loss)before contrigutions and transfers (454,076) (30,578) 183,254 (301,400) CONTRIBUTIONS AND TRANSFERS Transfer in 456,161 130,000 - 586,161 Transfer out - - (270) (270) Change in net position 2,085 99,422 182,984 284,491 Net position-Beginning of year 739,210 102,974 900,567 1,742,751 Net position-End of year $ 741,295 $ 202,396 $ 1,083,551 $ 2,027,242 138 CITY OF TIGARD,OREGON INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS for the year ended June 30,2017 Fleet/Property Central Services Management Insurance Fund Fund Fund Total CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 7,356,145 $ 1,927,788 $ - $ 9,283,933 Payments to suppliers (3,179,717) (1,412,431) (36,652) (4,628,800) Payments to employees (4,668,889) (652,647) - (5,321,536) Other receipts 76,544 1,837 221,497 299,878 Net cash provided(used)by operating activities (415,917) (135,453) 184,845 (366,525) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfer from other funds 456,161 130,000 - 586,161 Transfer to other funds - - (270) (270) Net cash flows from noncapital financing activities 456,161 130,000 (270) 585,891 Net increase in cash and investments 40,244 (5,453) 184,575 219,366 CASH FLOWS FROM INVESTING ACTIVITIES Interest earnings 23,932 - 843 24,775 Cash and investments--beginning of the year 1,416,272 384,486 897,749 2,698,507 Cash and investments--end of the year $ 1,480,448 $ 379,033 $ 1,083,167 $ 2,942,648 RECONCILIATION OF OPERATING INCOME(LOSS)TO NET CASH PROVIDED(USED)BY OPERATING ACTIVITIES Operating income(loss) $ (478,008) $ (30,578) $ 182,411 $ (326,175) Adjustments to reconcile operating income(loss)to net cash provided(used)by operating activities CHANGE IN ASSETS AND LIABILITIES Receivables (18,541) - 2,476 (16,065) Prepaids (33,552) - - (33,552) Inventory - (5,222) - (5,222) Accounts Payable 111,101 (99,912) (42) 11,147 Accrued compensated absences (3,951) (699) - (4,650) Net OPEB Obligation 7,034 958 - 7,992 Net cash provided(used)by operating activities $ (415,917) $ (135,453) $ 184,845 $ (366,525) 139 CITY OF TIGARD,OREGON CENTRAL SERVICES FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Charges for services $ 7,361,969 $ 7,509,128 $ 7,374,686 $ (134,442) Intergovernmental revenues - 70,600 - (70,600) Interest earnings 22,593 22,593 23,932 1,339 Miscellaneous revenues 13,400 13,400 76,544 63,144 Total revenues 7,397,962 7,615,721 7,475,162 (140,559) EXPENDITURES Policy and administration 8,082,249 8,920,227 7,922,204 998,023 Change in fund balance before other financing sources(uses) (684,287) (1,304,506) (447,042) 857,464 OTHER FINANCING SOURCES(USES) Transfer in 478,001 642,701 456,161 (186,540) Contingency (250,000) (107,051) - 107,051 Reserve for future expenditures (249,533) (249,533) - 249,533 Total other financing sources(uses) (21,532) 286,117 456,161 170,044 Change in fund balance (705,819) (1,018,389) 9,119 1,027,508 Fund balance-Beginning of the year 705,819 1,018,389 1,018,389 - Fund balance-End of the year $ - $ - 1,027,508 $ 1,027,508 Reconciliation of budgetary fund balance to GAAP basis net position: Net OPEB obligation (286,213) Total net position,GAAP basis $ 741,295 140 CITY OF TIGARD,OREGON FLEET/PROPERTY MANAGEMENT FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Charges for services $ 1,927,788 $ 1,927,788 $ 1,927,788 $ - Miscellaneous revenues 29,686 29,686 1,837 (27,849) Total revenues 1,957,474 1,957,474 1,929,625 (27,849) EXPENDITURES Policy and administration 2,041,913 2,041,913 1,959,245 82,668 Change in fund balance before other financing sources(uses) (84,439) (84,439) (29,620) 54,819 OTHER FINANCING SOURCES(USES) Transfer in 167,017 167,017 130,000 (37,017) Contingency (75,000) (75,000) - 75,000 Reserve for future expenditures (93,526) (93,526) - 93,526 Total other financing sources(uses) (1,509) (1,509) 130,000 131,509 Change in fund balance (85,948) (85,948) 100,380 186,328 Fund balance-Beginning of the year 85,948 85,948 126,902 40,954 Fund balance-End of the year $ - $ - 227,282 $ 227,282 Reconciliation of budgetary fund balance to GAAP basis net position: Net OPEB obligation (24,886) Total net position,GAAP basis $ 202,396 141 CITY OF TIGARD,OREGON INSURANCE FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2017 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Interest earnings $ 15,620 $ 15,620 $ 843 $ (14,777) Miscellaneous revenues 39,000 39,000 219,021 180,021 Total revenues 54,620 54,620 219,864 165,244 EXPENDITURES Policy and administration 50,000 50,000 36,610 13,390 Change in fund balance before other financing sources(uses) 4,620 4,620 183,254 178,634 OTHER FINANCING SOURCES(USES) Transfer out (31,270) (31,270) (270) 31,000 Reserve for future expenditures (855,626) (855,626) - 855,626 Total other financing sources(uses) (886,896) (886,896) (270) 886,626 Change in fund balance (882,276) (882,276) 182,984 1,065,260 Fund balance-Beginning of the year 882,276 882,276 900,567 18,291 Fund balance-End of the year $ - $ - $ 1,083,551 $ 1,083,551 142 Other Schedules CITY OF TIGARD,OREGON SCHEDULE OF BOND AND BOND INTEREST TRANSACTIONS For the fiscal year ended June 30,2017 Interest Transactions Original Outstanding Matured/ Outstanding Issue June 30,2016 Additions Called Paid Matured Paid June 30,2017 Bancroft Bonds Issued June 27,2002 $ 1,307,969 $ 296,319 $ - $ 83,100 $ (83,100) $ 213,219 $ 20,000 $ (20,000) General Obligation Bonds Issued February 3,2011 $ 8,655,000 $ 5,525,000 $ - $ 705,000 $ (705,000) $ 4,820,000 $ 196,075 $ (196,075) Issued June 21,2010 7,250,000 3,160,000 - 755,000 (755,000) 2,405,000 137,460 (137,460) Issued February 3,2011 17,000,000 13,985,000 - 705,000 (705,000) 13,280,000 587,025 (587,025) $ 22,670,000 $ - $2,165,000 $ (2,165,000) $ 20,505,000 $ 920,560 $ (920,560) Bank Loan Issued September 1,2014 $ 1,300,000 $ 1,170,000 $ - $ 130,000 $ (130,000) $ 1,040,000 $ 32,821 $ (32,821) Revenue Bonds Issued May 1,2012 $97,720,000 $ 97,720,000 $ - $ 1,870,000 $ (1,870,000) $ 95,850,000 $4,691,800 $ (4,691,800) Issued May 1,2015 30,810,000 30,810,000 - 160,000 (160,000) 30,650,000 1,510,300 (1,510,300) $ 128,530,000 $ - $ 2,030,000 $ (2,030,000) $ 126,500,000 $6,202,100 $ (6,202,100) Long-term Note Issued December 1,2011 $ 2,398,000 $ 2,007,952 $ - $ 100,945 $ (100,945) $ 1,907,007 $ 60,239 $ (60,239) 143 CITY OF TIGARD,OREGON SCHEDULE OF FUTURE DEBT SERVICE REQUIREMENTS OF LOCAL IMPROVEMENT DISTRICT BONDS For the fiscal year ended June 30,2017 Total Debt Service Requirement Issued June 27,2002 Fiscal Year Total Total 7.25% of Maturity Principal Interest Principal Interest 2018 $ 89,200 $ 13,866 $ 89,200 $ 13,866 2019 95,800 7,279 95,800 7,279 2020 28,219 1,021 28,219 1,021 $ 213,219 $ 22,166 $ 213,219 $ 22,166 144 CITY OF TIGARD,OREGON SCHEDULE OF FUTURE DEBT SERVICE REQUIREMENTS OF GENERAL OBLIGATION BONDS For the fiscal year ended June 30,2017 Total Debt Series 2011B Transportation Bonds Series 2011A Service Requirement Issued: February 3,2011 Issued:June 21,2010 Issued: February 3,2011 Fiscal Year Total Total 3.00%to 4.00% 4.35% 3.00%to 4.75% of Maturity Principal Interest Principal Interest Principal Interest Principal Interest 2018 $ 2,235,000 $ 845,043 $ 730,000 $ 174,550 $ 780,000 $ 104,618 $ 725,000 $ 565,875 2019 2,305,000 763,313 755,000 148,500 800,000 70,688 750,000 544,125 2020 2,390,000 667,713 785,000 117,700 825,000 35,888 780,000 514,125 2021 1,625,000 568,625 815,000 85,700 - - 810,000 482,925 2022 1,695,000 502,925 850,000 52,400 - - 845,000 450,525 2023 1,760,000 434,425 885,000 17,700 - - 875,000 416,725 2024 910,000 381,725 - - - - 910,000 381,725 2025 950,000 345,325 - - - - 950,000 345,325 2026 990,000 304,950 - - - - 990,000 304,950 2027 1,030,000 262,875 - - - - 1,030,000 262,875 2028 1,075,000 216,525 - - - - 1,075,000 216,525 2029 1,125,000 168,150 - - - - 1,125,000 168,150 2030 1,180,000 114,713 - - - - 1,180,000 114,713 2031 1,235,000 58,663 - - - - 1,235,000 58,663 $ 20,505,000 $ 5,634,970 $ 4,820,000 $ 596,550 $ 2,405,000 $ 211,194 $ 13,280,000 $4,827,226 145 CITY OF TIGARD,OREGON SCHEDULE OF FUTURE DEBT SERVICE REQUIREMENTS OF BANK LOAN PAYABLE For the fiscal year ended June 30,2017 Total Debt Service Requirement Issued:September 1, 2014 Fiscal Year Total Total 3.00% of Maturity _ Principal Interest Principal Interest 2018 $ 130,000 $ 28,980 $ 130,000 $ 28,980 2019 130,000 25,118 130,000 25,118 2020 780,000 11,681 780,000 11,681 $ 1,040,000 $ 65,779 $ 1,040,000 $ 65,779 146 CITY OF TIGARD,OREGON SCHEDULE OF FUTURE DEBT SERVICE REQUIREMENTS OF WATER REVENUE BONDS For the fiscal year ended June 30,2017 Total Debt Service Requirement Issued:May 1,2012 Issued: May 3,2015 Fiscal Year Total Total 3.00%to 5.00% 3.00%to 5.00% of Maturity Principal Interest Principal Interest Principal Interest 2018 $ 2,100,000 $ 6,129,650 $ 1,935,000 $ 4,625,050 $ 165,000 $ 1,504,600 2019 2,185,000 6,043,950 2,015,000 4,546,050 170,000 1,497,900 2020 2,275,000 5,954,750 2,100,000 4,463,750 175,000 1,491,000 2021 2,370,000 5,861,850 2,185,000 4,378,050 185,000 1,483,800 2022 2,465,000 5,765,150 2,275,000 4,288,850 190,000 1,476,300 2023 2,565,000 5,664,550 2,365,000 4,196,050 200,000 1,468,500 2024 2,685,000 5,547,175 2,475,000 4,086,875 210,000 1,460,300 2025 2,820,000 5,411,675 2,605,000 3,959,875 215,000 1,451,800 2026 2,960,000 5,269,375 2,735,000 3,826,375 225,000 1,443,000 2027 3,110,000 5,119,925 2,875,000 3,686,125 235,000 1,433,800 2028 3,270,000 4,961,600 3,025,000 3,538,625 245,000 1,422,975 2029 3,435,000 4,793,975 3,180,000 3,383,500 255,000 1,410,475 2030 3,610,000 4,617,850 3,340,000 3,220,500 270,000 1,397,350 2031 3,795,000 4,435,175 3,515,000 3,049,125 280,000 1,386,050 2032 3,985,000 4,243,125 3,695,000 2,868,875 290,000 1,374,250 2033 4,190,000 4,038,750 3,885,000 2,679,375 305,000 1,359,375 2034 4,405,000 3,823,875 4,080,000 2,480,250 325,000 1,343,625 2035 4,630,000 3,598,000 4,290,000 2,271,000 340,000 1,327,000 2036 4,870,000 3,360,500 4,510,000 2,051,000 360,000 1,309,500 2037 5,120,000 3,110,750 4,745,000 1,819,625 375,000 1,291,125 2038 5,380,000 2,848,250 4,985,000 1,576,375 395,000 1,271,875 2039 5,660,000 2,572,250 5,240,000 1,320,750 420,000 1,251,500 2040 5,950,000 2,282,000 5,510,000 1,052,000 440,000 1,230,000 2041 6,250,000 1,977,000 5,795,000 769,375 455,000 1,207,625 2042 6,575,000 1,656,375 6,090,000 472,250 485,000 1,184,125 2043 6,910,000 1,319,250 6,400,000 160,000 510,000 1,159,250 2044 7,265,000 964,875 - - 7,265,000 964,875 2044 7,635,000 592,375 - - 7,635,000 592,375 2046 8,030,000 200,750 - - 8,030,000 200,750 $ 126,500,000 $ 112,164,775 $ 95,850,000 $ 74,769,675 $ 30,650,000 $ 37,395,100 147 CITY OF TIGARD,OREGON SCHEDULE OF FUTURE DEBT SERVICE REQUIREMENTS OF SAFE DRINKING WATER REVOLVING LOAN FUNDS For the fiscal year ended June 30, 2017 Total Debt Service Requirement Issued: December 1, 2011 Fiscal Year Total Total 3.00%to 5.00% of Maturity Principal Interest Principal Interest 2018 $ 103,973 $ 57,210 $ 103,973 $ 57,210 2019 107,092 54,091 107,092 54,091 2020 110,305 50,878 110,305 50,878 2021 113,614 47,569 113,614 47,569 2022 117,022 44,161 117,022 44,161 2023 120,533 40,650 120,533 40,650 2024 124,149 37,034 124,149 37,034 2025 127,874 33,310 127,874 33,310 2026 131,710 29,473 131,710 29,473 2027 135,661 25,522 135,661 25,522 2028 139,731 21,452 139,731 21,452 2029 143,923 17,260 143,923 17,260 2030 148,241 12,943 148,241 12,943 2031 152,688 8,495 152,688 8,495 2032 130,491 3,915 130,491 3,915 $ 1,907,007 $ 483,963 $ 1,907,007 $ 483,963 148 Statistical Section This part of the City of Tigard's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, required supplementary information and other supplementary information says about the city's overall financial health. Contents Page Financial Trends—These schedules contain trend information to help the reader understand how financial performance has changed over time. 149-165 Revenue Capacity—These schedules contain information to help the reader assess the city's most significant local revenue source, property taxes. 166-171 Debt Capacity—These schedules contain information to help the reader assess the affordability of the city's current levels of outstanding debt and the city's ability to issue additional debt in the future. 172-179 Demographic and Economic Information—These schedules offer demographic and economic indicators to help the reader understand the environment within the city's financial activities take place. 180-182 Operating Information—These schedules contain service and infrastructure data to help the reader understand how the information in the city's financial report relates to the services the city provides and the activities it performs. 183-187 No content appears on this page by design. CITY OF TIGARD,OREGON NET POSITION BY COMPONENT for the last ten fiscal years (accrual basis of accounting) Fiscal Year Fiscal Year Fiscal Year 2008 2009 2010 GOVERNMENTAL ACTIVITIES Net investment in capital assets $ 177,656,465 $ 179,584,222 $ 165,775,262 Restricted 1,992,734 1,540,638 6,872,512 Unrestricted 23,053,474 18,091,356 24,927,888 Total governmental activities net position 202,702,673 199,216,216 197,575,662 BUSINESS-TYPE ACTIVITIES Net investment in capital assets 68,398,209 68,738,562 70,942,446 Restricted 3,783,324 3,783,324 - U nrestricted 15,826,866 16,184,644 17,371,241 Total business-type activities net position 88,008,399 88,706,530 88,313,687 PRIMARY GOVERNMENT Net investment in capital assets 246,054,674 248,322,784 236,717,708 Restricted 5,776,058 5,323,962 6,872,512 Unrestricted 38,880,340 34,275,999 42,299,129 Total primary government net position $ 290,711,072 $ 287,922,745 $ 285,889,349 Source: Comprehensive Annual Financial Report of the City. 149 Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year 2011 2012 2013 2014(Restated) 2015 2016 2017 $ 181,343,650 $ 179,626,050 $ 181,196,030 $ 185,242,899 $ 189,748,234 $ 195,142,143 $ 199,214,099 5,880,755 13,180,057 12,041,725 10,941,117 12,376,136 20,392,998 26,313,186 11,880,945 8,431,166 14,311,478 13,596,004 13,031,415 11,024,212 20,753,326 199,105,350 201,237,273 207,549,233 209,780,020 215,155,785 226,559,353 246,280,611 78,920,831 65,218,645 74,044,470 79,627,259 84,867,665 95,247,967 104,870,812 6,005,540 13,184,382 9,683,852 10,551,442 11,250,300 12,279,628 15,387,870 8,675,865 19,429,375 18,523,616 16,721,508 21,256,129 21,847,155 30,776,467 93,602,236 97,832,402 102,251,938 106,900,209 117,374,094 129,374,750 151,035,149 260,264,481 244,844,695 255,240,500 264,870,158 274,615,899 290,390,110 304,084,911 11,886,295 26,364,439 21,725,577 21,492,559 23,626,436 32,672,626 41,701,056 20,556,810 27,860,541 32,835,094 30,317,512 34,287,544 32,871,367 51,529,793 $ 292,707,586 $ 299,069,675 $ 309,801,171 $ 316,680,229 $ 332,529,879 $ 355,934,103 $ 397,315,760 150 CITY OF TIGARD,OREGON CHANGES IN NET POSITION for the last ten fiscal years (accrual basis of accounting) Fiscal Year Fiscal Year Fiscal Year 2008 2009 2010 EXPENSES Governmental activities Community services $ 13,678,913 $ 18,365,997 $ 19,832,642 Public works 2,373,710 2,468,981 8,563,893 Community development 5,186,834 7,238,839 4,846,494 Policy and administration 3,992,478 5,997,644 1,511,956 Interest on long-term debt 354,664 526,825 548,987 Total governmental activities expenses 25,586,599 34,598,286 35,303,972 Business-type activities Sewer 1,963,223 1,597,413 1,379,105 Stormwater 1,585,105 1,920,640 2,061,622 Water 6,792,833 7,624,478 7,880,598 Total business-type activities program expenses 10,341,161 11,142,531 11,321,325 Total primary government expenses $ 35,927,760 $ 45,740,817 $ 46,625,297 PROGRAM REVENUES Governmental activities Charges for services: Community services $ 168,232 $ 180,425 $ 232,384 Public works 1,377,855 952,652 1,751,341 Community development 2,331,834 1,249,995 1,490,701 Policy and administration 1,524,653 1,463,736 108,940 Operating grants and contributions 739,171 153,447 199,506 Capital grants and contributions 3,103,521 199,112 305,398 Total governmental activities program revenues 9,245,266 4,199,367 4,088,270 Business-type activities Charges for services: Sewer 2,322,462 1,348,750 1,117,987 Stormwater 1,593,097 1,484,627 1,872,545 Water 7,002,872 7,417,827 7,834,978 Capital grants and contributions 136,331 834,660 1,022,045 Total business-type activities program revenues 11,054,762 11,085,864 11,847,555 Total primary government program revenues $ 20,300,028 $ 15,285,231 $ 15,935,825 Source: Comprehensive Annual Financial Report of the City. 151 Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year 2011 2012 2013 2014(Restated) 2015 2016 2017 $ 19,987,961 $ 20,025,191 $ 19,085,777 $ 23,078,512 $ 18,542,379 $ 25,089,790 $ 23,461,915 10,911,875 12,489,448 8,585,063 8,399,436 10,408,399 10,865,800 8,342,833 4,159,289 4,709,751 3,988,011 4,267,328 4,688,686 7,030,142 5,831,389 1,825,398 2,117,198 1,339,254 1,732,016 1,323,435 1,226,166 3,583,751 1,214,420 1,125,259 1,226,774 1,147,024 1,185,507 958,204 949,136 38,098,943 40,466,847 34,224,879 38,624,316 36,148,406 45,170,102 42,169,024 1,386,597 1,743,929 2,114,054 2,617,625 2,518,708 2,536,988 2,595,606 1,667,699 1,649,715 2,045,399 1,958,551 2,077,589 2,123,162 2,738,673 6,996,463 7,807,706 11,989,337 11,730,347 10,839,483 14,720,167 8,261,895 10,050,759 11,201,350 16,148,790 16,306,523 15,435,780 19,380,317 13,596,174 $ 48,149,702 $ 51,668,197 $ 50,373,669 $ 54,930,839 $ 51,584,186 $ 64,550,419 $ 55,765,198 $ 1,008,691 $ 1,191,417 $ 2,252,945 $ 1,872,350 $ 1,731,639 $ 1,879,576 $ 2,482,811 2,096,677 1,915,631 2,120,366 2,519,515 2,239,431 2,860,543 5,165,280 1,747,617 1,684,287 2,579,329 1,765,005 3,040,501 4,684,733 4,341,128 84,065 105,755 65,233 142,277 119,195 363,583 6,516,004 6,952,717 6,924,053 6,318,382 6,508,556 7,756,718 6,880,727 230,500 1,049,774 2,173,900 1,804,398 2,021,422 11,785,524 15,691,507 11,599,489 12,877,891 16,156,348 14,344,883 15,683,826 29,086,289 34,925,036 1,021,840 1,025,732 1,203,187 1,727,206 1,773,388 1,791,302 3,013,314 2,178,298 2,402,189 2,629,694 2,733,346 2,899,180 3,058,382 3,275,083 9,065,554 11,895,044 14,907,664 15,985,607 18,804,645 20,918,497 20,926,322 4,583,764 2,871,726 1,675,987 1,111,346 2,066,696 5,806,590 7,670,388 16,849,456 18,194,691 20,416,532 21,557,505 25,543,909 31,574,771 34,885,107 $ 28,448,945 $ 31,072,582 $ 36,572,880 $ 35,902,388 $ 41,227,735 $ 60,661,060 $ 69,810,143 152 CITY OF TIGARD,OREGON CHANGES IN NET POSITION(CONTINUED) for the last ten fiscal years (accrual basis of accounting) Fiscal Year Fiscal Year Fiscal Year 2008 2009 2010 NET(EXPENSE)REVENUE Governmental activities $ (16,341,333) $ (30,398,918) $ (31,215,702) Business-type activities 713,601 (56,667) 526,230 Total primary government net expenses (15,627,731) (30,455,585) (30,689,471) GENERAL REVENUES AND OTHER CHANGES IN NET POSITION Governmental activities: Property taxes 9,133,664 12,526,541 16,070,846 Franchise fees 4,551,169 3,887,078 4,548,520 Unrestricted intergovernmental revenues 2,912,647 8,925,520 6,993,245 Interest earnings 1,503,619 947,247 308,853 Miscellaneous 817,054 626,075 376,884 Transfers between Governmental and Business-type - - 1,276,800 Total governmental activities 18,918,153 26,912,461 29,575,148 Business-type activities: Interest earnings 1,039,593 649,231 153,300 Miscellaneous 150,015 105,567 204,427 Unrestricted intergovernmental revenues - - - Transfers between Governmental and Business-type - - (1,276,800) Total business-type activities 1,189,608 754,798 (919,073) Total primary government 20,107,761 27,667,259 28,656,075 CHANGES IN NET POSITION Governmental activities(restated) 2,576,820 (3,486,457) (1,640,554) Business-type activities 1,903,209 698,131 (392,843) Total primary government $ 4,480,029 $ (2,788,325) $ (2,033,396) Source: Comprehensive Annual Financial Report of the City. 153 Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year 2011 2012 2013 2014(Restated) 2015 2016 2017 $ (26,499,454) $ (27,588,956) $ (18,068,531) $ (24,279,433) $ (20,464,580) $ (16,083,813) $ (7,243,988) 6,798,697 6,993,341 4,267,742 5,250,982 10,108,129 12,194,454 21,288,933 (19,700,757) (20,595,615) (13,800,789) (19,028,451) (10,356,451) (3,889,359) 14,044,945 13,604,285 15,182,467 15,338,744 15,796,663 16,523,361 17,177,591 17,616,798 4,375,420 4,880,635 5,855,956 5,542,647 5,687,456 5,734,540 5,890,113 2,838,802 4,798,949 2,500,240 2,955,652 3,004,341 2,840,903 2,074,428 296,964 283,273 248,812 421,211 434,401 688,087 824,213 5,284,426 1,583,989 316,512 776,154 247,154 228,779 268,380 1,629,245 2,991,566 120,227 1,017,893 (56,368) 817,481 291,314 28,029,142 29,720,879 24,380,491 26,510,220 25,840,345 27,487,381 26,965,246 115,828 73,228 114,661 270,415 131,485 302,890 106,628 3,269 155,164 157,360 144,767 177,903 193,645 270,628 - - - - 127,148 285,524 (1,629,245) (2,991,566) (120,227) (1,017,893) 56,368 (817,481) (291,314) (1,510,148) (2,763,174) 151,794 (602,711) 365,756 (193,798) 371,466 26,518,994 26,957,705 24,532,285 25,907,509 26,206,101 27,293,583 27,336,712 1,529,688 2,131,923 6,311,960 2,230,787 5,375,765 11,403,568 19,721,258 5,288,549 4,230,167 4,419,536 4,648,271 10,473,885 12,000,656 21,660,399 $ 6,818,237 $ 6,362,090 $ 10,731,496 $ 6,879,058 $ 15,849,650 $ 23,404,224 $ 41,381,657 154 CITY OF TIGARD,OREGON FUND BALANCES OF GOVERNMENTAL FUNDS for the last ten fiscal years (modified accrual basis of accounting) Fiscal Year Fiscal Year Fiscal Year 2008 2009 2010 GENERAL FUND Reserved $ - $ 419,488 $ 273,726 Unreserved 10,794,057 7,338,828 7,067,526 Nonspendable - - - Unassigned - - - Total General Fund $ 10,794,057 $ 7,758,316 $ 7,341,252 ALL OTHER GOVERNMENTAL FUNDS Reserved $ - $ - $ - Unreserved, reported in: Special revenue funds 12,481,406 11,097,739 8,094,802 Debt service funds 682,960 167,169 1,927,247 Capital projects funds 1,309,774 1,373,469 4,945,265 Nonspendable - - - Restricted - - - Committed - - - Assigned - - - Unassigned - - - Total all other governmental funds $ 14,474,140 $ 12,638,377 $ 14,967,314 *This schedule was modified with the implementation of GASB 54,effective fiscal year 2011,which affected the categories used to report fund balances. Source: Comprehensive Annual Financial Report of the City. 155 Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year 2011 2012 2013 2014 2015 2016 2017 $ - $ - $ - $ - $ - $ - $ - 305,164 471,975 472,941 508,374 542,543 664,254 706,412 7,247,383 7,378,411 9,687,736 11,474,700 12,115,436 12,970,670 14,884,712 $ 7,552,547 $ 7,850,386 $ 10,160,677 $ 11,983,074 $ 12,657,979 $ 13,634,924 $ 15,591,124 $ - $ - $ - $ - $ - $ - $ - - - 14,986 16,055 11,225 - 16,485 16,855,664 15,568,787 14,859,784 12,504,001 11,791,605 18,250,934 31,914,910 2,263,088 3,217,309 4,020,435 4,457,233 2,801,857 3,260,236 4,341,838 417,479 428,823 670,223 905,166 1,156,788 1,597,773 1,725,086 (382,937) (498,110) (601,324) (752,925) (352,684) (617,329) (725,296) $ 19,153,294 $ 18,716,809 $ 18,964,104 $ 17,129,530 $ 15,408,791 $ 22,491,614 $ 37,273,023 156 CITY OF TIGARD,OREGON CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS for the last ten fiscal years (modified accrual basis of accounting) Fiscal Year Fiscal Year Fiscal Year 2008 2009 2010 REVENUES Taxes $ 12,137,977 $ 12,405,880 $ 16,078,788 City gas tax* - - - Franchise fees 4,551,169 3,887,078 4,548,520 Special assessments 120,678 87,208 284,202 Licenses and permits 1,871,841 1,282,438 1,229,880 Intergovernmental revenues 7,807,667 7,560,542 6,358,393 Charges for service 3,469,358 2,536,590 3,083,087 Fines and forfeitures 847,069 804,128 915,524 Interest earnings 1,475,808 930,382 300,126 Miscellaneous 747,532 513,392 249,180 Total revenues 33,029,099 30,007,640 33,047,700 EXPENDITURES Current operating: Community services 13,801,110 18,214,907 19,418,498 Public works 2,757,289 3,463,390 5,129,767 Community development 5,191,797 7,184,355 4,674,008 Policy and administration 397,510 907,661 787,209 Debt service: Principal 922,907 794,853 875,513 Interest 454,403 530,403 557,061 Refunded bonds - - - Refunding bond issuance cost - - - Capital outlay 6,319,092 3,940,781 7,373,043 Total expenditures 29,844,108 35,833,344 38,815,099 Excess(deficiency)of revenues over(under)expenditures 3,184,991 (5,825,705) (5,767,399) OTHER FINANCING SOURCES(USES) Proceeds from bond/long-term note - - 7,250,000 Operating transfers in 4,896,127 3,342,328 4,965,010 Operating transfers out (9,299,491) (2,357,267) (3,688,210) Total other financing sources(uses) (4,403,364) 985,061 8,526,800 Net change in fund balances $ (1,218,373) $ (4,840,644) $ 2,759,401 Debt services as a percentage of non-capital expenditures 6.22% 4.34% 4.77% • * City gas tax was broken out of intergovernmental revenues beginning in fiscal year 2013. Source: Comprehensive Annual Financial Report of the City. 157 Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year 2011 2012 2013 2014 2015 2016 2017 $ 16,753,457 $ 17,767,128 $ 18,208,253 $ 18,822,449 $ 19,575,665 $ 20,191,927 $ 20,704,055 - - 830,031 638,852 558,740 712,408 844,866 4,375,420 4,880,635 5,724,192 5,542,647 5,691,960 5,732,448 5,886,791 40,164 38,776 43,170 258,831 35,359 65,243 52,146 2,590,516 2,444,551 3,175,118 3,098,875 4,030,120 5,751,472 6,662,790 9,834,646 6,586,757 6,040,986 6,386,961 6,370,732 6,684,667 8,228,693 3,127,307 3,059,653 6,632,779 5,937,889 5,303,984 10,974,400 17,664,190 907,216 1,092,296 1,038,948 929,293 924,266 972,560 713,059 287,284 262,080 254,237 424,221 434,401 653,879 799,748 47,489 633,575 206,443 312,815 413,736 220,894 349,098 37,963,499 36,765,451 42,154,157 42,352,833 43,338,963 51,959,898 61,905,436 19,182,018 19,638,469 18,636,382 19,420,335 20,325,635 20,784,186 21,925,169 6,059,692 6,354,390 6,551,980 6,914,185 7,512,446 7,606,128 8,291,205 3,975,257 3,902,223 3,937,089 4,219,481 4,640,737 6,981,903 5,807,836 711,743 819,034 711,385 701,172 778,840 831,876 787,681 2,590,456 1,894,125 1,992,500 2,445,993 2,117,045 2,361,892 2,378,100 67,294 1,652,691 1,264,795 1,178,637 1,118,238 1,059,733 977,539 8,836,046 - - - - - - 81,236 - - - - - - 19,247,942 4,037,766 6,357,256 7,657,993 8,924,317 6,200,291 4,705,720 60,751,684 38,298,698 39,451,387 42,537,796 45,417,258 45,826,009 44,873,250 (22,788,185) (1,533,247) 2,702,770 (184,963) (2,078,295) 6,133,889 17,032,186 26,214,495 - - - 1,300,000 1,650,000 - 16,977,142 6,969,663 4,735,619 6,420,053 6,178,215 6,378,318 4,755,215 (16,006,177) (5,575,062) (4,880,803) (6,247,267) (6,445,754) (6,102,439) (5,049,792) 27,185,460 1,394,601 (145,184) 172,786 1,032,461 1,925,879 (294,577) $ 4,397,275 $ (138,646) $ 2,557,586 $ (12,177) $ (1,045,834) $ 8,059,768 $ 16,737,609 5.20% 11.55% 10.92% 11.06% 8.60% 9.17% 8.49% 158 CITY OF TIGARD,OREGON GOVERNMENTAL REVENUES For the last ten fiscal years Program Revenues Fiscal Charges Operating Capital Year Ended for Grants and Grants and Franchise June 30 Services Contributions Contributions Taxes Fees 2008 $ 5,402,574 $ 739,171 $ 3,103,521 $ 12,237,185 $ 4,551,169 2009 3,846,808 153,447 199,112 12,526,541 3,887,078 2010 3,583,366 199,506 305,398 16,070,846 4,548,520 2011 4,852,985 6,516,004 230,500 13,604,285 4,375,420 2012 4,875,400 6,952,717 1,049,774 15,182,467 4,880,635 2013 7,058,395 6,924,053 2,173,900 15,338,744 5,855,956 2014 6,222,103 6,318,382 1,804,398 15,796,663 5,542,647 2015 7,153,848 6,508,556 2,021,422 16,523,361 5,687,456 2016 9,544,047 7,756,718 11,785,524 17,177,591 5,734,540 2017 12,352,802 6,880,727 15,691,507 17,616,798 5,890,113 CITY OF TIGARD,OREGON BUSINESS-TYPE REVENUES For the last ten fiscal years Program Revenues Fiscal Charges Operating Capital Year Ended for Grants and Grants and Franchise June 30 Services Contributions Contributions Taxes Fees 2008 $ 10,918,431 $ - $ 136,331 $ - $ - 2009 10,251,204 - 834,660 - - 2010 10,825,510 - 1,022,045 - - 2011 12,265,692 - 4,583,764 - - 2012 15,322,964 - 2,871,726 - - 2013 18,740,545 - 1,675,987 - - 2014 20,446,159 - 1,111,346 - - 2015 23,477,213 - 2,066,696 - - 2016 25,768,181 - 5,806,590 - - 2017 27,214,719 - 7,670,388 - - Source: Comprehensive Annual Financial Report of the City-Statement of Activities. 159 General Revenues Gain(Loss)on Intergovernmental Interest Disposition of Revenues Earnings Capital Assets Miscellaneous Total $ 2,912,647 $ 1,503,619 $ - $ (2,286,467) $ 28,163,419 8,925,520 947,247 - 626,075 31,111,828 6,993,245 308,853 - 376,884 32,386,618 2,838,802 296,964 - 5,284,426 37,999,386 4,798,949 283,273 - 1,583,989 39,607,204 2,500,240 248,812 - 316,508 40,416,608 2,955,652 421,211 - 776,154 39,837,210 3,004,341 434,401 (25,998) 273,152 41,580,539 2,840,903 688,087 - 228,779 55,756,189 2,074,428 824,213 - 268,380 61,598,968 General Revenues Gain(Loss)on Intergovernmental Interest Disposition of Revenues Earnings Capital Assets Miscellaneous Total $ - $ 1,039,593 $ - $ 150,015 $ 12,244,370 649,231 - 105,567 11,840,662 153,300 - 204,427 12,205,282 115,828 - 3,269 16,968,553 73,228 - 155,164 18,423,082 114,661 - 157,360 20,688,553 270,415 - 144,767 21,972,687 131,485 - 177,903 25,853,297 127,148 302,890 - 193,645 32,198,454 285,524 106,628 - 270,628 35,547,887 160 CITY OF TIGARD,OREGON GOVERNMENTAL EXPENSES BY FUNCTION For the last ten fiscal years Fiscal Year Ended Community Community Policy and June 30 Services Public Works Development Administration 2008 $ 13,678,913 $ 2,373,710 $ 2,373,710 $ 3,992,478 2009 18,365,997 2,468,981 7,238,839 5,997,644 2010 19,832,642 8,563,893 4,846,494 1,511,956 2011 19,987,961 10,911,875 4,159,289 1,825,398 2012 20,025,189 12,489,448 4,709,750 2,117,198 2013 19,085,777 8,585,063 3,988,011 1,339,254 2014(Restated) 23,078,512 8,399,436 4,267,328 1,732,016 2015 18,542,379 10,408,399 4,688,686 1,323,435 2016 25,089,790 10,865,800 7,030,142 1,226,166 2017 23,461,915 8,342,833 5,831,389 3,583,751 CITY OF TIGARD,OREGON BUSINESS-TYPE EXPENSES BY FUNCTION For the last ten fiscal years Fiscal Year Ended June 30 Sewer Stormwater Water Total 2008 $ 1,963,223 $ 1,585,105 $ 6,792,833 $ 10,341,161 2009 1,597,413 1,920,640 7,624,478 11,142,531 2010 1,379,105 2,061,622 7,880,598 11,321,325 2011 1,386,597 1,667,699 6,996,463 10,050,759 2012 1,743,929 1,649,718 7,807,706 11,201,353 2013 2,114,054 2,045,399 11,989,337 16,148,790 2014 2,617,625 1,958,551 11,730,347 16,306,523 2015 2,518,708 2,077,589 10,839,483 15,435,780 2016 2,536,988 2,123,162 14,720,167 19,380,317 2017 2,595,606 2,738,673 8,261,895 13,596,174 Source: Comprehensive Annual Financial Report of the City. 161 Interest on Long-Term Debt Total $ 526,825 $ 22,945,636 526,825 34,598,286 548,987 35,303,972 1,214,420 38,098,943 1,125,259 ' 40,466,844 1,226,774 34,224,879 1,147,024 38,624,316 1,185,507 36,148,406 958,204 45,170,102 949,136 42,169,024 162 CITY OF TIGARD,OREGON GENERAL GOVERNMENTAL REVENUES BY SOURCES- BUDGETARY BASIS For the last ten fiscal years Fiscal Licenses Inter- Year Ended Franchise and governmental June 30 Taxes Fees Permits Revenues 2008 $ 12,137,977 $ 4,551,169 $ 1,871,841 $ 847,069 2009 12,405,880 3,887,078 1,282,438 7,560,542 2010 16,078,788 4,548,520 1,229,880 6,358,393 2011 16,753,457 4,375,420 2,590,516 9,834,646 2012 17,767,128 4,880,635 2,444,551 6,586,757 2013 18,208,253 5,724,192 3,175,118 6,871,017 2014 19,720,132 5,542,647 3,098,875 6,386,961 2015 19,575,665 5,691,960 4,030,120 6,929,472 2016 20,904,335 5,732,448 5,751,472 6,684,667 2017 21,548,921 5,886,791 6,662,790 8,228,693 * Includes special assessments collections,interest earnings,and other revenues. Information derived from Comprehensive Annual Financial Reports for all Governmental Fund Types 163 Charges For Fines and Miscellaneous Services Forfeitures Revenues* Total $ 1,475,808 $ 847,069 $ 2,344,018 $ 24,074,951 2,536,590 804,128 1,530,983 30,007,640 3,083,087 915,524 833,508 33,047,700 3,127,307 907,216 374,937 37,963,499 3,059,653 1,092,296 934,431 36,765,451 6,632,779 1,038,948 503,850 42,154,157 5,937,889 929,293 737,036 42,352,833 5,303,984 924,266 883,496 43,338,963 10,974,400 972,560 940,016 51,959,898 17,664,190 713,059 1,200,992 61,905,436 164 CITY OF TIGARD,OREGON GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION- BUDGETARY BASIS For the last ten fiscal years City-Wide Support Fiscal Public Works Functions, Year Ended Community and Community Policy and Capital Projects Debt June 30 Services Development Administration and Other Service Total 2008 $ 13,801,110 $ 7,949,086 $ 397,510 $ 6,319,092 $ 1,377,310 $ 29,844,108 2009 18,214,907 10,647,745 1,704,656 3,940,781 1,325,256 35,833,344 2010 19,418,498 9,803,775 787,209 7,373,043 1,432,574 38,815,099 2011 19,182,018 10,034,949 711,743 19,247,942 11,575,032 60,751,684 2012 19,638,468 10,256,613 819,034 4,037,766 3,546,816 38,298,697 2013 18,636,382 10,489,069 711,385 6,357,256 3,257,295 39,451,387 2014 19,420,335 11,133,666 701,172 7,657,993 3,624,630 42,537,796 2015 20,325,635 12,153,183 778,840 8,924,317 3,235,283 45,417,258 2016 20,784,186 14,588,031 831,876 6,200,291 3,421,625 45,826,009 2017 21,925,169 14,099,041 787,681 4,705,720 3,355,639 44,873,250 Information derived from Comprehensive Annual Financial Reports for all Governmental Fund Types 165 CITY OF TIGARD,OREGON MARKET VALUE AND ASSESSED VALUE OF TAXABLE PROPERTY For the last ten fiscal years Fiscal Assessed Value Assessed Year Total Estimated Real to Value Ended Personal Public Utility Total Assessed Direct Market Value as a% June 30 Real Property Property Property Value Tax Rate* (RMV) of RMV 2008 $ 4,104,676,710 $ 234,099,260 $ 233,581,850 $ 4,572,357,820 $ 2.75 $ 7,449,594,674 61.38% 2009 4,306,936,640 247,691,980 187,315,080 4,741,943,700 2.70 8,161,684,333 58.10% 2010 4,476,784,320 249,636,920 187,721,070 4,914,142,310 2.78 7,738,192,442 63.51% 2011 4,605,287,760 236,758,507 186,625,460 5,028,671,727 2.79 7,260,251,256 69.26% 2012 4,740,820,190 233,150,042 185,094,100 5,159,064,332 3.86 6,916,823,794 74.59% 2013 4,879,417,110 234,122,196 168,258,100 5,281,797,406 4.28 6,727,550,189 78.51% 2014 5,066,140,190 235,966,170 165,074,260 5,467,180,620 3.44 7,032,753,815 77.74% 2015 5,269,294,630 252,215,379 188,500,300 5,710,010,309 4.24 7,699,660,882 74.16% 2016 5,468,508,420 257,861,916 181,220,400 5,907,590,736 4.69 8,082,751,732 73.09% 2017 5,685,260,390 269,725,107 168,515,800 6,123,501,297 4.66 8,989,238,324 68.12% * per$1,000 of assessed value/including phase in rates Source: Washington County Assessment and Taxation 166 CITY OF TIGARD,OREGON PROPERTY TAX RATES-DIRECT AND OVERLAPPING GOVERNMENTS (Dollars per$1,000 of Assessed Value rounded to the nearest cent) For the last ten fiscal years City of Tigard Direct Rates Fiscal Total Metzger Year Ended Perm Debt Urban City of Water District Washington June 30 Rate Svc Renewal Phase In Tigard Combined County _ 2008 $ 2.51 $ 0.23 $ 0.01 $ - $ 2.75 $ - $ 2.44 2009 2.51 0.18 0.01 - 2.70 - 2.39 2010 2.51 0.21 0.06 - 2.78 - 2.98 2011 2.51 0.21 0.07 - 2.79 - 2.98 2012 2.51 0.45 0.06 0.83 3.85 - 2.97 2013 2.51 0.44 0.06 1.27 4.28 - 2.96 2014 2.51 0.44 0.06 0.43 3.44 - 2.96 2015 2.51 0.42 0.07 1.24 4.24 - 2.83 2016 2.51 0.42 0.07 1.68 4.69 - 2.83 2017 2.51 0.39 0.08 1.68 4.66 - 2.95 Taxes levied may be composed of three types of levies: (1)a base operating levy, (2)a special operating levy approved by the voters in the district and(3)a debt service levy. Each district with outstanding General Obligation bonded debt is required to levy taxes sufficient with other available funds,to meet principal and interest payments when due. Assessment and tax rolls are prepared and maintained by Washington County for all taxing districts with territory in the County.The County collects all taxes against property in the County(except assessments for improvements charged to benefited property)and distributes taxes collected at least monthly. No charges are made to the taxing districts for these services. NOTE:-Not all taxing districts are charged on each parcel of property,actual rates on tax bills are a combination of the above depending upon the location of the parcel and the school district and sewer and water district boundaries. Total overlapping tax rates for property in Tigard in 2015 ranged from$13.31/$1,000 to$16.60/$1,000. Source: Washington County Department of Assessment and Taxation. 167 Overlapping Rates Tigard/ Washington Tualatin Beaverton Tualatin County Hillsboro Total Direct School School Valley Rural Fire Portland School Other & District District Fire&Rescue District Community District Taxing Overlapping No.23-J No.48-1 District No.2 College No.1-J Agencies Rates $ 7.59 $ 6.74 $ 1.56 $ 1.12 $ 0.28 $ - $ 0.61 $ 23.09 7.52 6.56 1.54 1.12 0.50 - 0.70 23.03 7.65 6.88 1.89 1.69 0.63 - 0.75 25.25 7.37 6.78 1.88 1.69 0.64 - 0.81 24.94 7.44 6.86 1.92 1.69 0.60 7.47 1.88 34.68 7.38 6.77 1.91 1.69 0.66 7.50 0.72 33.87 7.41 8.05 1.91 1.69 0.73 7.41 0.78 34.38 7.43 8.04 1.88 - 0.72 - 0.77 25.91 7.43 7.96 2.10 - 0.58 - 0.70 26.28 7.41 7.92 2.09 - 0.68 - 0.71 26.42 168 CITY OF TIGARD,OREGON PRINCIPAL PROPERTY TAXPAYERS For current and nine years ago 2017 2008 Percentage Percentage Taxable of Total City Taxable of Total City Taxpayer Assessed Value Rank Assessed Value Assessed Value Rank Assessed Value Pacific Realty Associates $ 219,780,947 1 4.02% $ 166,182,644 1 3.63% PPR Washington Square LLC 146,992,934 2 2.69% 107,197,341 2 2.34% Lincoln Center LLC 92,098,279 3 1.68% 76,653,130 3 1.68% Comcast Corporation 44,459,100 4 0.81% ICON Owner Pool 1 West LLC 43,248,510 5 0.79% Portland General Electric 34,885,000 6 0.64% 28,463,317 7 0.62% ROIC Oregon LLC 33,234,800 7 0.61% Macy's Department Stores 26,930,090 8 0.49% FO Portland Property LLC 25,645,940 9 0.47% SPUS7 Arbor Heights LP 24,963,910 10 0.46% Verizon Northwest Inc 54,582,283 4 1.19% Sprint Communications 41,797,708 5 0.91% Calwest Industrial Holdings, LLC 34,961,527 6 0.76% Northwest Natural Gas 24,785,115 8 0.54% Robinson,Constance(Trust) 23,188,485 9 0.51% Nesbitt Portland Property LLC 22,235,534 10 0.49% Total $ 692,239,510 12.66% $ 580,047,084 12.67% Source: Washington County Assessment&Taxation records. 169 CITY OF TIGARD,OREGON PROPERTY TAX LEVIES AND COLLECTIONS For the last ten fiscal years Fiscal Percent Percent Year Percent Delinquent Total Tax Outstanding Delinquent Ended Total Tax Current Tax of Levy Tax Total Tax Collections Delinquent Taxes To June 30 Levy Collections Collections Collections Collections To Tax Levy Taxes Tax Levy 2008 $ 12,528,573 $ 11,895,526 94.95% $ 229,506 $ 12,125,032 96.78% $ 425,546 3.40% 2009* 12,636,185 12,119,732 95.91% 260,455 12,380,187 97.97% 549,855 4.35% 2010 12,999,886 12,877,595 99.06% 331,616 13,209,211 101.61% 597,164 4.59% 2011 13,995,535 13,249,558 94.67% 385,213 13,634,771 97.42% 567,082 4.05% 2012 15,594,066 14,835,580 95.14% 240,430 15,076,010 96.68% 737,903 4.73% 2013 15,878,914 15,161,562 95.48% 232,090 15,393,652 96.94% 704,610 4.44% 2014 16,326,904 15,532,675 95.14% 318,264 15,850,939 97.08% 740,392 4.53% 2015 16,999,999 16,251,269 95.60% 302,878 16,554,147 97.38% 713,889 4.20% 2016 17,642,931 16,861,073 95.57% 241,354 17,102,427 96.94% 792,515 4.49% 2017 18,145,192 17,322,014 95.46% 230,652 17,552,666 96.73% 857,408 4.73% Taxes are levied as of July 1 each year and are payable in three installments,without interest,on November 15, February 15 and May 15. Interest is charged at the rate of 1%per month on delinquent taxes. Tax liens are foreclosed after three year's delinquencies.Taxpayers receive a discount of 3%for payment in full by November 15 and 2%for payment of two thirds of the total taxes due. *Taxes were levied and collected for the City Center Development Agency,the City of Tigard's Urban Renewal District, beginning in fiscal year 2008-2009. Source:Washington County Property Tax Schedule. 170 CITY OF TIGARD,OREGON SPECIAL ASSESSMENT COLLECTIONS For the last ten fiscal years Fiscal Current Ratio of Total Year Ended Assessments Assessments Collections Assessments Outstanding June 30 Due�1� Collected(2) to Amount Due Added Assessments 2008 $ 116,194 $ 120,678 103.86% - $ 1,266,871 2009 23,100 87,208 377.52% - 1,178,745 2010 74,400 284,202 381.99% - 968,943 2011 179,200 40,164 22.41% - 854,377 2012 38,776 28,365 73.15% - 826,012 2013 62,500 118,888 190.22% 196,615 903,739 2014 457,983 457,983 100.00% - 445,756 2015 72,045 72,045 100.00% - 373,711 2016 77,392 77,392 100.00% - 296,319 2017 83,100 52,146 62.75% 24,877 373,342 (1)This amount is equal to the matured principal on Bancroft improvement bonds. (2)Represents collections of current assessments for payment of Bancroft improvement bonds as well as assessment collections on projects for which such bonds have not been issued. Source: City assessment records. 171 CITY OF TIGARD,OREGON RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR LONG-TERM DEBT TO TOTAL GENERAL GOVERNMENTAL EXPENDITURES For the last ten fiscal years Percent of Fiscal Total General Debt Service to Year Ended Total Debt Governmental Total General June 30 Principal Interest Service Expenditures Expenditures 2008 $ 922,907 $ 454,403 $ 1,377,310 $ 29,844,108 4.62% 2009 794,853 530,403 1,325,256 35,833,344 3.70% 2010 875,513 557,061 1,432,574 38,815,099 3.69% 2011 2,590,456 67,294 2,657,750 60,751,684 4.37% 2012 1,894,126 1,652,691 3,546,817 38,298,698 9.26% 2013 1,992,500 1,264,795 3,257,295 39,451,387 8.26% 2014 2,445,993 1,178,637 3,624,630 42,537,796 8.52% 2015 2,117,045 1,118,238 3,235,283 45,417,258 7.12% 2016 2,361,892 1,059,733 3,421,625 45,829,009 7.47% 2017 2,378,100 977,539 3,355,639 44,873,250 7.48% Source: Comprehensive Annual Financial Report of the City. 172 CITY OF TIGARD,OREGON RATIO OF NET GENERAL BONDED DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA For the last ten fiscal years Gross General Less Debt Ratio of Net Fiscal Obligation Service Net Bonded Debt Net Bonded Year Ended Assessed Bonded Debt Monies Bonded to Assessed Debt Per June 30 Population Value Outstanding Available Debt Value Capita 2008 46,715 $ 4,572,357,820 $ 10,547,958 $ 296,805 $ 10,251,153 0.22% $ 219.44 2009 47,460 4,741,943,700 10,011,895 258,769 9,753,126 0.21% 205.50 2010 47,595 4,914,142,310 16,708,100 101,190 16,606,910 0.34% 348.92 2011 48,035 5,028,671,727 25,655,000 175,458 25,479,542 0.51% 530.44 2012 48,415 5,159,064,332 30,735,000 263,629 30,471,371 0.59% 629.38 2013 48,695 5,281,797,406 29,397,612 592,612 28,805,000 0.55% 591.54 2014 50,444 5,467,180,620 27,504,927 532,328 26,972,599 0.49% 534.70 2015 50,787 5,710,010,309 24,990,106 722,540 24,267,566 0.43% 477.83 2016 51,253 5,907,590,736 22,862,084 971,579 21,890,505 0.37% 427.11 2017 51,902 6,123,501,297 20,675,137 1,117,556 19,557,581 0.32% 376.82 Source: City budget documents,Comprehensive Annual Financial Reports of the city and Washington Department of Assessment and Taxation. 173 CITY OF TIGARD,OREGON COMPUTATION OF DIRECT AND OVERLAPPING DEBT June 30,2017 Percent Amount Applicable Applicable Net Debt Inside City of Inside City of Jurisdiction Outstanding Tigard* Tigard Tigard/Tualatin School District#23-.I $ 271,154,318 46.55% $ 126,213,387 Metro 183,510,000 3.27% 6,004,998 Beaverton School District#48 1,076,544,613 3.75% 40,393,030 Portland Community College 302,275,000 4.12% 12,452,823 Washington County 232,180,277 10.30% 23,915,265 Tualatin Valley Fire&Rescue District 48,820,000 11.76% 5,740,451 Sub-Total of Overlapping Debt 2,114,484,208 214,719,954 City of Tigard 21,943,828 100.00% 21,943,828 Total for Overlapping Debt $ 2,136,428,036 $ 236,663,782 *The City of Tigard does not calculate this percentage;it is provided by the State of Oregon. Source: Oregon State Treasury Debt Management Division. 174 CITY OF TIGARD,OREGON COMPUTATION OF LEGAL DEBT MARGIN For the last ten fiscal years 2008 2009 2010 Debt limit $ 238,791,040 $ 244,850,530 $232,145,773 Total net debt applicable to limit 10,547,958 10,011,895 16,708,100 Legal debt margin $ 228,243,082 $ 234,838,635 $215,437,673 Total net debt applicable to the limit as a percentage of debt limit 4.42% 4.09% 7.20% Note: Pursuant to Oregon Revised Statutes 223.295 outstanding general obligation debt is limited to 3%real market value. Source: Washington County Department of Assessment and Taxation. 175 2011 2012 2013 2014 2015 2016 2017 $217,807,538 $207,504,714 $201,826,506 $ 210,982,614 $ 230,989,826 $242,482,552 $269,677,150 32,300,000 30,735,000 28,800,576 26,820,000 24,775,000 22,670,000 20,505,000 $ 185,507,538 $ 176,769,714 $ 173,025,930 $ 137,195,419 $ 206,214,826 $219,812,552 $249,172,150 14.83% 14.81% 14.27% 12.71% 10.73% 9.35% 7.60% Legal Debt Margin Calculation at June 30,2016 True cash value(2016-2017) $ 8,989,238,324 Limit as a percent 3% Debt Limit(as a percent of real market value) 269,677,150 Debt applicable to limit: Gross bonded debt $ 21,943,828 Excludable debt-Bancroft improvement bonds,bond premium, capital lease and commercial bank loan (1,438,828) Debt subject to limitation 20,505,000 Legal debt margin-amount available for future indebtedness 249,172,150 Total net debt applicable to the limit as a percent of debt limit 7.60% 176 CITY OF TIGARD,OREGON RATIO OF DEBT BY TYPE For the last ten fiscal years Governmental Activities Fiscal General Bank Year Ended Obligation Bancroft Loan Capital June 30 Population •Bonded Debt Bonded Debt Payable Lease 2008 46,715 $ 10,547,958 $ 1,301,230 $ - $ - 2009 47,460 10,011,895 1,278,130 - - 2010 47,595 16,708,100 1,203,730 - - 2011 48,035 32,597,213 1,024,530 - - 2012 48,415 30,735,000 966,239 - - 2013 48,695 28,805,000 903,739 - 58,074 2014 50,444 27,059,171 445,756 - 58,074 2015 50,787 24,990,106 373,711 1,300,000 44,482 2016 51,253 22,862,084 296,319 1,170,000 30,290 2017 51,902 20,675,137 213,219 1,040,000 15,472 *Revenue bonds issued for improvements to the Tigard Water Service Area(TWSA)are liabilities of the City of Tigard, but were not issued as full faith and credit obligations. Debt service on these bonds will be paid by customers of TWSA,which includes residents in the cities of Tigard,Durham and King City,and an unincorporated area of Washington County. ** Personal income is not available for the City of Tigard,so per capita income for Washington County is used. Sources: City budget documents,Comprehensive Annual Financial Reports of the city and Washington County Deaprtment of Assessment and Taxation. 177 Business-type Activities Long-Term Percentage Note Payable Notes Payable Revenue Total Primary of Personal Per Debt Debt Bonds* Government Income** Capita _ $ 1,012,986 $ - $ - $ 12,862,174 0.90% $ 275 777,296 2,853,868 - 14,921,189 1.03% 314 529,978 2,853,868 - 21,295,676 1.47% 447 270,925 5,953,868 - 39,846,536 2.72% 830 2,398,000 105,367,290 139,466,529 9.44% 2,881 2,293,486 104,896,687 136,956,986 9.21% 2,813 2,201,107 104,896,686 134,660,794 8.75% 2,670 2,105,957 139,643,153 168,457,409 10.87% 3,317 2,007,952 139,003,308 165,369,953 10.57% 3,227 1,907,007 136,420,282 160,271,117 10.12% 3,088 178 CITY OF TIGARD,OREGON COMPUTATION OF WATER REVENUE BONDS DEBT COVERAGE For the last three fiscal years(1) 2015 2016 2017 Gross revenues $ 18,944,301 $ 20,918,497 $ 20,926,322 System Development Charges(SDC) related: SDC Fund interest earnings 9,294 35,173 6,660 Reimbursement fee receipts(2) 308,896 1,242,297 3,010,263 Improvement fee receipts(3) 503,853 1,569,645 3,521,776 Total SDC-related 822,043 2,847,115 6,538,699 Operating expense: Salaries and wages 1,462,677 1,117,286 1,148,575 Contracted services 336,178 353,396 1,785,477 Water purchases 2,644,491 4,212,357 17,648 General,admin and other 2,781,892 3,111,194 3,572,450 Total operating expenses 7,225,238 8,794,233 6,524,150 Net revenues(including SDCs) 12,541,106 14,971,379 20,940,871 Net revenues(excluding SDCs) $ 11,719,063 $ 12,124,264 $ 14,402,172 Debt service-first lien bonds: 2012 bonds $ 4,719,850 $ 4,719,850 $ 6,561,800 2015 bonds - 1,378,238 1,670,300 Total debt service $ 4,719,850 $ 6,098,088 $ 8,232,100 Debt service coverage-first lien bonds (excluding system development charges) 2.48 1.99 1.75 (1) Revenue bonds were issued in May 2012 and February 2015. One of the debt covenants requires debt service coverage(Net revenues divided by debt service)to be a minimum of 1.1x. (2) Reimbursement fees may not be available to pay debt service on the 2012 Bonds until City Council takes action to authorize that use of those fees for the projects. (3) Improvement fees have been approved for the projects related to the Lake Oswego-Tigard Water Partnership. Tigard anticipated approximately 85%of the bond proceeds to be used to finance projects related to the Partnership and approximately 15%of the bond proceeds to be used to finance projects that are not directly related to the partnership. 179 CITY OF TIGARD,OREGON DEMOGRAPHICS STATISTICS For the last ten fiscal years Assessed Total Unemployment Value Personal Rate Fiscal of Taxable Income (Portland) Year Ended Property School Per Capita (thousands Metropolitan June 30 Population(1) Per Capita Enrollment(2) Income(3) of dollars)(3) Area(4) 2008 46,715 $ 97,878 12,451 N/A N/A 5.3% 2009 47,460 99,915 12,685 N/A N/A 9.7% 2010 47,595 103,249 12,913 N/A N/A 8.4% 2011 48,035 104,688 12,688 N/A N/A 9.5% 2012 48,415 106,559 12,691 30,522 1,477,723 8.2% 2013 48,695 108,467 12,688 32,527 1,583,902 7.5% 2014 50,444 108,381 12,718 33,709 1,700,417 6.4% 2015 50,787 112,431 12,676 34,878 1,771,349 5.4% 2016 51,253 115,263 12,799 35,837 1,836,754 4.9% 2017 51,902 117,982 12,808 34,312 1,780,861 3.7% Sources of Information: (1)United States Census Bureau (2)Tigard/Tualatin School District#23-J-City student totals not available (3)Washington State University-Northwest Income Indicators Project (4)US Department of Labor, Bureau of Labor Statistics 180 CITY OF TIGARD,OREGON PRINCIPAL EMPLOYERS For current year and nine years ago 2017 2008 Percentage Percentage of Total City of Total City Employer Employees Rank Employment Employees Rank Employment Tigard-Tualatin School District#23-.1 779 1 2.63% 779 2 2.43% Comcast of Oregon Inc 624 2 2.11% Nordstrom 422 3 1.43% 461 4 1.44% Costco Wholesale Corporation 398 4 1.34% 300 7 0.93% Macy's Federated Department Store 372 5 1.26% 704 3 2.19% Oregon Public Employees Retirement System 364 6 1.23% 396 5 1.23% City of Tigard 7 0.00% 283 8 0.88% The Cheesecake Factory 250 8 0.84% 250 10 0.78% Gerber Legendary Blades 232 9 0.78% Wumbler Services dba Service Master Solutions 220 10 0.74% HSBC Card Services 1,116 1 3.48% Providence Health System 377 6 1.17% Rockwell Collins Inc 264 9 0.82% Total 3,661 12.36% 4,930 15.35% Source: City of Tigard Adopted Budget and Tigard Chamber of Commerce. 181 CITY OF TIGARD,OREGON PROPERTY VALUE AND CONSTRUCTION For the last ten fiscal years Fiscal Commercial Construction(1) Residential Construction(1) Year Ended Number of Number of June 30 Permits Value Permits Value 2008 6 $ 73,614,404 93 $ 31,810,734 2009 4 1,944,775 42 9,324,154 2010 4 2,003,118 123 27,972,462 2011 5 837,655 113 28,150,102 2012 5 2,589,566 104 27,794,839 2013 8 20,053,155 174 41,954,242 2014 9 24,964,563 72 21,410,225 2015 10 31,518,023 280 45,546,665 2016 5 18,381,597 242 81,847,774 2017 7 12,874,739 450 156,457,972 (1)From City of Tigard Building Department. Multi-family permits are included in the number of permits issued for residential construction. 182 CITY OF TIGARD,OREGON FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION For the last ten fiscal years Function/Program 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 GOVERNMENTAL ACTIVITIES Community services Police 93.00 93.00 90.10 90.10 91.10 84.50 84.50 82.50 83.50 87.50 Library 41.90 41.90 38.80 38.80 38.80 34.80 34.80 34.80 38.30 39.70 Public works Administration 8.85 8.85 9.35 9.75 8.75 9.00 9.20 9.20 9.00 9.50 Parks maintenance 9.75 9.75 9.75 9.75 9.75 9.75 9.75 10.75 11.67 12.17 Recreation - - - - - - - - - 0.33 Street maintenance 7.00 7.00 7.00 7.00 7.00 7.00 7.25 7.25 6.33 7.00 Healthy Streams - - - - - 1.00 - - - - Engineering(a) 10.50 10.50 11.80 11.80 11.80 12.00 13.00 14.00 14.00 17.00 Community development Administration 3.00 3.00 2.00 2.00 3.00 2.00 2.00 2.00 3.00 3.00 Building inspection 17.80 6.20 6.24 7.20 8.10 7.80 8.80 9.00 9.00 10.00 Development Services 10.20 10.20 7.56 7.80 5.90 4.80 3.80 3.80 3.80 - Community Planning 7.00 7.00 7.00 7.00 9.00 9.00 9.00 9.00 9.00 16.50 Development Engineering(b) 5.00 4.00 1.60 - - - - - - - Economic Development(`) 1.00 1.00 1.00 1.00 1.50 1.00 2,00 2.00 2.00 2.00 Policy and Administration City management 5.30 5.30 4.50 4.50 4.20 4.00 4.00 5.00 5.50 4.90 Human resources 5.00 5.00 5.00 5.00 5.00 4.80 4.80 4.50 4.80 4.50 Information technology 7.00 7.00 7.00 7.00 7.00 6.30 5.80 7.00 7.00 8.00 Risk management 2.50 2.50 2.30 2.30 2.30 2.10 2.10 2.10 2.30 1.50 Finance administration 3.00 3.00 5.30 3.00 3.00 3.00 3.00 3.00 3.00 3.00 Financial operations 5.50 5.50 4.50 4.50 4.50 4.60 4.60 4.60 4.60 4.80 Utility Billing(d) 6.50 6.50 5.50 5.50 6.30 6.50 6.80 6.80 6.80 6.80 Design&Communication 4.50 4.50 3.05 3.05 3.25 3.05 3.05 3.05 3.05 4.25 Contracts&Purchasing lel - - - 2.30 2.30 1.80 2.00 2.00 2.00 2.00 City Recorder/Records(f) 3.00 3.00 3.25 3.25 3.35 4.15 4.15 4.15 3.35 3.85 Municipal court 3.25 3.25 3.50 3.75 3.75 3.65 3.65 3.65 3.65 3.50 Fleet maintenance(g) 2.50 2.50 2.00 2.60 2.60 1.50 0.95 1.95 1.80 2.35 Property management(g) 4.25 4.25 4.25 4.25 4.25 3.75 3.85 4.85 5.20 4.90 BUSINESS-TYPE ACTIVITIES Public works Sanitary sewer 5.35 5.35 5.25 5.25 6.25 6.25 6.50 5.50 6.00 6.50 Stormwater 7.10 7.10 7.00 7.00 6.25 5.25 5.50 6.50 7.00 7.50 Water 16.30 16.30 13.00 _ 12.00 12.75 12.50 12.00 13.00 13.00 13.00 Total 296.05 283.45 267.60 267.45 271.75 255.85 256.85 261.95 268.65 286.05 Source: City of Tigard Finance Department (a) Engineering was budgeted with Development Services until FY 2009-10. (b) Development Engineering was budgeted with Capital Construction&Transportation as Engineering until FY 2006-07. (`) Downtown Redevelopment was budgeted with Long range planning until FY 2008-09. (d) Utility Billing was budgeted with Financial operations until FY 2007-08. (e) Contracts&Purchasing was budgeted with Finance administration until FY 2010-2011. (1) City Recorder/Records was budgeted with Office services until FY 2008-09. (g) Fleet/Property Management budgeted with Public Works until FY 2015-16. 183 No content appears on this page by design. CITY OF TIGARD,OREGON OPERATING INDICATORS BY FUNCTION/PROGRAM For the last ten fiscal years Functions/Programs 2008 2009 2010 GOVERNMENTAL ACTIVITIES Community services Police-number of traffic citations issued 6,383 6,925 9,101 Police-number of calls for service 51,377 50,115 51,158 Library-number of items in collection 176,210 193,710 22,400 Library-materials checked out each year 1,131,093 1,249,462 1,462,304 Public works Acres of park land maintained 184 189 189 Crack sealing completed annually(linear feet) 160,000 160,000 160,000 Vehicles maintained to industry standard 153 158 160 Community development Number of inspections(Tigard) 23,500 7,778 8,700 Number of permits(all types)in Tigard 4,850 2,278 3,025 Number of development applications 450 508 370 Policy and administration Number of job applications 2,300 2,215 1,900 Laptops and computers to maintain 435 451 488 Insured value of city's real property(in millions) 74 78 82 Number of utility bills sent** 115,574 114,500 116,800 Average fine amount collected 94 90 90 BUSINESS-TYPE ACTIVITIES Sewer Miles of sewer lines cleaned(annual goal) 53 47 41 Miles of sewer lines video inspected (annual goal) 23 23 23 Stormwater Miles of stormwater lines cleaned 44 30 31 Number of water quality facilities*** 75 78 72 Total number of catch basins cleaned*** 4,915 4,437 4,437 Water Number of accounts 17,870 17,900 17,900 **City of Tigard started monthly utility billing in January 2011. ***GIS data improvement Source: City of Tigard Finance Department 184 2011 2012 2013 2014 2015 2016 2017 7,021 8,308 8,939 7,177 6,462 5,745 5,057 49,358 52,226 52,420 48,840 47,247 43,299 41,874 21,000 244,154 250,454 245,000 248,225 253,725 229,344 1,507,248 1,522,422 1,459,334 1,385,376 1,280,376 1,243,774 1,159,446 233 _ 243 248 253 255 301 301 160,000 160,000 160,000 160,000 160,000 160,000 107,727 149 149 148 157 160 159 162 9,990 10,000 12,500 12,382 9,009 10,814 27,551 3,220 3,047 3,049 3,404 2,958 3,860 4,281 370 381 357 341 251 388 818 1,000 1,100 2,500 2,000 2,100 2,200 3,726 491 491 503 523 525 530 585 82 82 82 82 82 82 120 176,274 236,389 238,400 241,500 244,000 256,500 248,560 126 126 140 140 160 160 149 41 41 42 42 42 42 51 23 23 24 21 21 24 23 31 31 32 21 21 21 23 90 90 125 126 126 126 164 4,368 4,368 2,768 2,840 2,840 2,917 3,939 18,129 18,265 18,350 19,207 19,737 20,500 21,509 185 CITY OF TIGARD,OREGON CAPITAL ASSETS STATISTICS BY FUNCTION For the last ten fiscal years Functions/Programs 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 GOVERNMENTAL ACTIVITIES Community services Police stations 1 1 1 1 1 1 1 1 1 1 Library buildings 1 1 1 1 1 1 1 1 1 1 Public works Number of parks 13 14 14 14 18 20 20 20 20 21 Acres of park and greenspaces 348.0 396.0 396.0 435.4 447.0 493.0 499.0 514.0 514.0 548.0 Miles of streets 150.0 150.0 150.0 150.0 150.0 150.0 150.0 150.0 150.0 157.0 Community development See Note Policy and administration City-owned building facilities 5 5 5 5 5 5 5 5 5 5 BUSINESS-TYPE ACTIVITIES Sewer Total miles of sanitary sewer lines 160.4 161.0 162.8 164.5 166.1 166.9 166.9 166.9 168.0 168.3 Stormwater Total miles of stormwater lines* 131.0 131.0 131.0 131.0 131.0 126.0 130.0 130.0 130.0 131.2 Number of water quality facilities* 77 79 79 92 92 125 126 126 126 164 Water Water mains in miles 225.1 225.1 235.0 245.0 248.0 248.0 248.0 248.0 248.0 251.3 Number of reservoirs 13 13 13 13 13 13 13 13 14 14 Source:City of Tigard Finance Department *GIS data improvement Note: No capital assets indicators are available for development services functions. 186 CITY OF TIGARD,OREGON MISCELLANEOUS STATISTICAL DATA June 30,2017 Date of Incorporation 1961 Form of government Mayor/Council with a City Manager as the administrative head of the government of the City Area(Square Miles-incorporated area) 13 Miles of streets 157 Police protection: -Number of stations 1 -Number of sworn police officers 69 Education: - Attendance centers 17 -Number of teachers\FTE 708 -Number of students 12,808 Building Permits issued(2016-2017) 813 Recreation and culture: -Number of parks 21 developed and 6 undeveloped,totaling 27 at 301 acres -Greenways 247 acres -Number of libraries 1 -Number of volumes(estimated) 229,344 Employees: -Classified service(union) 129 -Unclassified (non-union) 110 Information obtained from the various departments of the City of Tigard,Oregon and Tigard/Tualatin School District#23-J City student totals not available. 187 No content appears on this page by design. Audit Comments and Disclosure Requirements MOSSADAMS Report of Independent Auditors on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Oregon Minimum Audit Standards City Council City of Tigard, Oregon We have audited the basic financial statements of the City of Tigard, Oregon (City) as of and for the year ended June 30, 2017 and have issued our report thereon dated January 31, 2018. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the provisions of the Minimum Standards for Audits of Oregon Municipal Corporations, prescribed by the Secretary of State. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the basic financial statements are free from material misstatement. Compliance As part of obtaining reasonable assurance about whether the City's basic financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, grants, including provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules OAR 162-010-0000 to 162-010-0330, as set forth below, noncompliance with which could have a direct and material effect on the determination of financial statement amounts: Instances of Non- Compliance OAR Section Identified? 162-010-0000 Preface None Noted 162-010-0010 Definitions None Noted 162-010-0020 Introduction None Noted 162-010-0030 General Requirements None Noted 162-010-0050 Financial Statements None Noted 162-010-0115 Required Supplementary Information(RSI) None Noted 162-010-0120 Other Supplementary Information None Noted 162-010-0130 Schedule of Revenues, Expenditures/Expenses,and Changes in Fund Balances,/Net None Noted Assets, Budget and Actual(Each Fund) 162-010-0150 Schedule of Property Tax Transactions or Acreage Assessments None Noted 162-010-0160 Schedule of Bonded or Long-Term Debt Transactions None Noted 162-010-0170 Schedule of Future Requirements for Retirement of Bonded or Long-Term Debt None Noted 162-010-0190 Other Financial or Statistical Information None Noted 162-010-0200 Required Disclosures and Independent Auditors Comments None Noted 162-010-0230 Accounting Records and Internal Control None Noted 162-010-0240 Public Fund Deposits None Noted 162-010-0250 Indebtedness None Noted 162-010-0260 Budget None Noted 162-010-0270 Insurance and Fidelity Bonds None Noted 162-010-0280 Programs Funded from Outside Sources None Noted 162-010-0295 Highway Funds None Noted 162-010-0300 Investments None Noted 162-010-0310 Public Contracts and Purchasing None Noted 162-010-0320 Other Comments and Disclosures None Noted 188 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. The results of our test disclosed no instances of noncompliance that are required to be reported under Minimum Standards for Audits of Oregon Municipal Corporations, prescribed by the Secretary of State. Internal Control Over Financial Reporting In planning and performing our audit, we considered the City's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City'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 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 over financial reporting 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 deficiencies, significant deficiencies or material weaknesses. We did identify a deficiency in internal control over financial reporting that we consider to be material weaknesses as defined above. Discussion of this deficiency can be found in our Communication to Those Charged with Governance and Internal Control Related Matters dated January 31, 2018. 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 do not provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Minimum Standards for Audits of Oregon Municipal Corporations, prescribed by the Secretary of State, in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. For Moss Adams LLP Portland, Oregon January 31, 2018 189 TIGARD CITY CENTER DEVELOPMENT AGENCY (A Component Unit of the City of Tigard, Oregon) ANNUAL FINANCIAL REPORT For the fiscal year ended June 30, 2017 Prepared by: City of Tigard —Financial and Information Services Department City Center Development Agency Table of Contents Introductory Section: List of Officials 1 Financial Section: Report of Independent Auditors 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 and Reconciliation 12 Statement of Revenues and Expenditures and Reconciliation 13 Notes to the Basic Financial Statements 14 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 22 Audit Comments and Disclosure Requirements: Report of Independent Auditors Required by Oregon State Regulations 23 Tigard City Center Development Agency Fiscal Year 2016-2017 CITY CENTER DEVELOPMENT AGENCY BUDGET COMMITTEE Bill Ludwig Mayor John L. Cook Nathan Rix Councilor John Goodhouse Thomas Schweizer Councilor Tom Anderson Stephanie Veal Councilor Jason Snider Clifford Rone Councilor Marc Woodard Rajendra Patel,Alternate CITY CENTER DEVELOPMENT AGENCY BOARD John L. Cook, Chair John Goodhouse Jason Snider Marc Woodard Tom Anderson 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 113125 Hall Blvd. 1 Tigard,OR 972231503-639-4171 1 INDEPENDENT AUDITOR'S REPORT 0 MOSSADAMS Report of Independent Auditors Board Members Tigard City Center Development Agency (A component unit of the City of Tigard, Oregon) Tigard, Oregon Report on the Financial Statements 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 June 30, 2017, and the related notes to the financial statements, which collectively comprise the Agency's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements 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 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 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. 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, 2017, 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 on pages 5 through 9 and the budgetary schedules for the Capital Projects Fund on page 21, 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 management's discussion and analysis 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 this 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 City's basic financial statements. The budgetary schedule for the Capital Projects Fund described above is the responsibility of management and was derived from and related directly to the underlying accounting and other records used to prepare the basic financial statements. The budgetary schedule for the Capital Projects Fund 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 schedule for the Capital Projects Fund are fairly stated, in all material respects, in relation to the basic financial statements as a whole. 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 schedule on page 22 is presented for purposes of additional analysis and are not a required part of the basic financial statements. 3 This 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. 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 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 schedule is fairly stated, in all material respects, in relation to the basic financial statements as a whole. 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 introductory section is presented for purposes of additional analysis and is not a required part of the basic financial statements. The introductory section has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it. Report on Other Legal and Regulatory Requirements In accordance with the Minimum Standards of Audits of Oregon Municipal Corporations, we have issued our report dated January 31, 2018 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. (friaea C 'L60172 For Moss Adams LLP Portland, Oregon January 31, 2018 4 No content appears on this page by design. City Center Development Agency 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 30,2017. 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 $1,821,862. Of this amount, $142,301 is restricted for the repayment of debt, $1,647,425 is for net investment in capital assets and the remaining $32,136 is unrestricted and may be used to meet the agency's ongoing obligations to citizens and creditors. • The agency's net position (assets less liabilities) increased $193,920 over the course of the year, primarily due to intergovernmental revenues. The city received two Brownfield Grants for the Saxony property on Tigard's Main Street. These grants will enable the cleanup of this property for redevelopment on Main Street near Fanno Creek. • In the fund financial statements for fiscal year 2016-17 expenditures in the Capital Projects Fund ($848,482) were for capital outlay in the amount of $815,401, most of which was for the final payment to the city for the purchase of the Saxony property.The payments in the Debt Service Fund ($167,000) were for principal and interest payments on a commercial bank loan and to the City of Tigard. • Also in the fund financial statements, the agency recognized $669,404 in revenue from property taxes,rental revenues,intergovernmental revenues 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 City Center Development Agency Management's Discussion and Analysis 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 thatare 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 exceeded liabilities by$1,821,862 in fiscal year 2017 compared to a net position of$1,627,942 in fiscal year 2016. A significant portion of the agency's net position (90.4 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 Urban Renewal downtown area and, as such, are not available for future spending. In fiscal year 2017 the capital assets increased due to the agency completing two projects for the Strolling Street landscaping program, Main Street gateway improvements and public artwork. $142,301 or 7.8 percent is restricted for the payment of debt incurred by the agency and the remaining net position of$32,136 or 1.8 percent is unrestricted. 6 City Center Development Agency Management's Discussion and Analysis Tigard City Center Development Agency Statement of Net Position June 30, 2017 2016 ASSETS: Cash and restricted cash $ 128,150 $ 513,818 Receivables 75,415 16,784 Capital assets,net of accumulated depreciation 3,444,857 3,037,639 Total assets 3,648,422 3,568,241 LL\BILITIES: Accounts payable and other short-term liabilities 159,128 142,621 Long-term liabilities 1,667,432 1,797,678 Total liabilities 1,826,560 1,940,299 NET POSITION: Net investment in capital assets 1,647,425 1,109,961 Restricted for debt service 142,301 377,632 Unrestricted 32,136 140,349 Total net position $ 1,821,862 $ 1,627,942 Tigard City Center Development Agency Change in Net Position For the Year Ended June 30, REVENUES: 2017 2016 Program revenues $ 84,425 $ 130,516 General revenues 587,513 376,321 Gain on sale of capital assets - 1,525,128 Total revenues 671,938 2,031,965 EXPENSES: Community development 441,264 1,774,329 Interest on long-term debt 36,754 39,688 Total expenses 478,018 1,814,017 Change in net position 193,920 217,948 Net position-beginning 1,627,942 1,409,994 Net position-ending $ 1,821,862 $ 1,627,942 7 City Center Development Agency Management's Discussion and Analysis Capital Assets and Debt Administration Capital Assets As of June 30,2017 the agency had invested$3,444,857 in capital assets as reflected in the following table: Governmental Activities 2017 2016 Land $ 985,504 $ 985,504 Construction in progress 878,318 506,075 Infrastructure 1,669,087 1,594,255 Accumulated depredation (88,052) (48,196) Total $ 3,444,857 $ 3,037,638 On November 24, 2015 the agency acquired two property lots (Main Street Saxony properties) in the downtown area from the city. Per the Purchase and Sale Agreement between the city and the agency, the purchase price for these properties was $515,000 (representing the original purchase price for the property paid by the city) or the amount established by an independent MAI appraisal,whichever is greater,with $1.00 due at closing and the balance due on June 30, 2017. The purchase and sale agreement includes covenants that bind the agency to repaying the city (Park Bond fund) the original purchase amount, or market value, whichever is greater, for the portion of the property not used for public space by January 30, 2017 as these properties were originally purchased by the city using Park Bond funds. The agency payed the $515,500 to the city by June 30, 2017. Additional information on the agency's capital assets can be found on page 18 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 2016-17,the agency did not receive any additional loans from the city. In fiscal year 2015 the agency borrowed $1,300,000 from a financial institution to purchase property located in the downtown area. Payments of principal and interest are due in March and September annually until the final payment in September of 2019. 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 activity is supported by loans from the City of Tigard and a bank loan. The city loans will be repaid with interest once the agency begins generating enough tax increment revenue. The focus of the fiscal year 2016- 17 budget included continuation of the facade improvements and strolling street programs, payment to the city for the Main Street property (Saxony) purchase, cleanup and site demolition for the Saxony properties, paid for with an Environmental Protection Agency grant and redevelopment planning for the transit center. These projects are on-going and have been carried over into the fiscal year 2017-18 budget. 8 City Center Development Agency Management's Discussion and Analysis The agency received additional rental income of$6,425 over budgeted amounts for fiscal year 2016-17 from tenants leasing the newly acquired Saxony property. The Saxony tenants will be relocating when the process for redevelopment begins, including environmental studies and planning for building demolition. The city also received two Brownfield Grants for the Saxony property on Tigard's Main Street. These grants will enable the cleanup of this property for redevelopment on Main Street near Fanno Creek. The budget for fiscal year 2017-18 includes the clean-up of the Saxony site for redevelopment.Along with the clean-up, the agency will begin to work with a developer for the site. The Agency will also provide a small amount in an Opportunity Fund for Strolling Street projects, Targeted Improvement, Facade Improvement and Skyline Improvements. The CCDA will further engage the District's merchants and business owners together with the Tigard Downtown Affiance to address parking challenges in Tigard's Downtown. Economic Factors The Tigard City 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. 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. 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. 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 and Information Services Director,City of Tigard, 13125 SW Hall Blvd.,Tigard,Oregon 97223. 9 No content appears on this page by design. Basic Financial Statements Tigard City Center Development Agency Statement of Net Position June 30,2017 Governmental Activities ASSETS: Cash and cash equivalents $ 5,379 Property taxes receivable 18,032 Accounts receivable 55,885 Interest receivable 1,498 Restricted cash and cash equivalents 122,771 Land and construction in progress 1,863,822 Other capital assets,net of accumulated depreciation 1,581,035 Total assets 3,648,422 LIABILITIES: Accounts payable and other accrued liabilities 29,128 Due within one year: Bank loan payable 130,000 Due within more than one year: Advances from City 757,432 Bank loan payable 910,000 Total liabilities 1,826,560 NET POSITION: Net investment in capital assets 1,647,425 Restricted for debt service 142,301 Unrestricted 32,136 Total net position $ 1,821,862 The accompanying notes are an integral part of the basic financial statements. 10 Tigard City Center Development Agency Statement of Activities Year Ended June 30,2017 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 $ 441,264 $ 84,425 $ (356,839) Interest on long-term debt 36,754 - (36,754) Total governmental activities $ 478,018 $ 84,425 (393,593) General revenues: Property taxes 443,031 Interest earnings 4,138 Miscellaneous 140,344 Total revenues 587,513 Change in net position 193,920 Net position- beginning 1,627,942 Net position-ending $ 1,821,862 The accompanying notes are an integral part of the basic financial statements. 11 Tigard City Center Development Agency Balance Sheet-Governmental Funds and Reconciliation to the Statement of Net Position June 30,2017 Total Capital Debt Governmental Projects Service Funds ASSETS: Cash and cash equivalents $ 5,379 $ - $ 5,379 Property taxes receivable - 18,032 18,032 Accounts receivable 55,885 - 55,885 Interest receivable - 1,498 1,498 Restricted cash and cash equivalents - 122,771 122,771 Total assets $ 61,264 $ 142,301 $ 203,565 LIABILITIES: Accounts payable and accrued liabilities $ 29,128 $ - $ 29,128 Total liabilities 29,128 - 29,128 DEFERRED INFLOWS OF RESOURCES: Unavailable revenues-property taxes - 17,959 17,959 FUND BALANCES: Restricted for debt service - 124,342 124,342 Unassigned 32,136 - 32,136 Total fund balances 32,136 124,342 156,478 Total liabilities,deferred inflows of resources and fund balances $ 61,264 $ 142,301 Capital assets used in governmental activities are not financial resources and are not reported in the funds. 3,444,857 Long-term assets are not available to pay for current period expenditures and, therefore are unearned in the funds-property taxes earned but not available 17,959 Long-term liabilities-not reported in the funds: Loan from City of Tigard,not due and payable in the current period (757,432) Loan from financial institution,not due and payable in the current period (1,040,000) Net Position of Governmental Activities $ 1,821,862 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 and Reconciliation to the Statement of Activities Year Ended June 30,2017 Total Capital Debt Governmental Projects Service Funds REVENUES: Taxes $ - $ 440,497 $ 440,497 Rental revenues 84,425 - 84,425 Interest earnings - 4,138 4,138 Intergovernmental revenues 140,344 - 140,344 Total revenues 224,769 444,635 669,404 EXPENDITURES: Community Development 33,081 33,081 Capital projects 815,401 - 815,401 Debt service Principal - 130,246 130,246 Interest - 36,754 36,754 Total expenditures 848,482 167,000 1,015,482 Change in fund balance before other financing sources (uses) (623,713) 277,635 (346,078) Other financing sources (uses): Transfers in 515,500 - 515,500 Transfers out - (515,500) (515,500) Total other financing sources (uses) 515,500 (515,500) - Change in fund balance (108,213) (237,865) (346,078) Fund balance-beginning 140,349 362,207 502,556 Fund balance-ending $ 32,136 $ 124,342 $ 156,478 Net change in fund balances-total governmental funds $ (346,078) 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 732,931 Disposals of capitalized assets (285,857) Depreciation reported in the government-wide statements (39,856) Property taxes that do not provide current financial resources 2,534 Principal payments expensed on the fund financial statements 130,246 Change in Net Position of Governmental Activities $ 193,920 The accompanying notes are an integral part of the basic financial statements. 13 Notes to Basic Financial Statements City Center Development Agency Notes to the Basic Financial Statements 1. Summary of Significant Accounting Policies: 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 boundaries include primarily the city's central business district, general commercial district and professional commercial district. 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 web site 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. 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. 14 City Center Development Agency Notes to the Basic Financial Statements 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 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 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 equivalents. The agency considers cash and 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 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. 15 City Center Development Agency Notes to the Basic Financial Statements 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 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 the remaining amount is 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 16 City Center Development Agency Notes to the Basic Financial Statements 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, 2017 the agency's share of the city's cash and investment pool, including restricted and unrestricted, totaled $128,150. Of this amount $122,771 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 on line at: http://www.tigard-or.gov/city hall/finance and information services.php 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. Accounts payable to vendors and contractors include general accounts payable not included in short-term or long-term liabilities. 17 City Center Development Agency Notes to the Basic Financial Statements 5. 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 June 30,2016 Additions Deletions Transfers June 30,2017 Land $ 985,504 $ - $ - $ - $ 985,504 Construction in Progress 506,076 732,931 (285,857) (74,832) 878,318 Infrastructure 1,594,255 - - 74,832 1,669,087 Total cost 3,085,835 732,931 (285,857) - 3,532,909 Depreciation Infrastructure (48,196) (39,856) - - (88,052) Capital assets,net $ 3,037,639 $ 693,075 S (285,857) $ - $ 3,444,857 6. Leased Property In connection with acquiring property and a building in the downtown area, the agency assumed a lease agreement as the lessor that extends through July 31, 2018. The lease has the option of two additional extensions of three years each. The property and building are recorded at $1,360,929 less the related accumulated depreciation of $31,574 for a net book value of $1,329,355. Minimum future rental income under the lease agreement is as follows: Year ending June 30 2018 86,400 2019 7,200 Total minimum payments S 93,600 , 7. Long-term Borrowing: 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 Tigard City Center Urban Renewal Plan. 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 0.54%. 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. In fiscal year 2017 the agency elected to repay $246 of outstanding principal on the loans. In fiscal year 2017 the agency did not enter into any new loans from the city. 18 City Center Development Agency Notes to the Basic Financial Statements In fiscal year 2015 the city received a $1,300,000 loan from a financial institution borrowed at 3.00% to finance a property purchase within the CCDA. At the time of the bank loan, the city and the agency entered into an Intergovernmental Agreement (IGA) for CCDA to be obligated for the payments on the loan. This agreement states the agency will make the payments on the bank loan to the financial institution from the tax increment revenues. The IGA constitutes indebtedness of the agency in the amount of the financing or $1,300,000. As of June 30,2017,the bank loan principal outstanding was $1,040,000. Future principal and interest payments on the bank loan and the city loans are as follows: Borrowing Transactions Interest Outstanding Outstanding Due in Outstanding Loans June 30,2016 Additions Paid June 30,2017 Paid one year Loans from City of Tigard for urban renewal projects: Loan#5 June 30,2013 $ 102,495 $ - $ (175) $ 102,320 $ 512 $ - Loan#5 June 30,2013 40,183 - (71) 40,112 201 - Loan#6 June 30,2014 361,000 - - 361,000 1,949 - Loan#7 June 30,2015 254,000 - - 254,000 1,270 - Bank loan payable 1,170,000 - (130,000) 1,040,000 32,821 130,000 Total $ 1,927,678 $ - $ (130,246) $ 1,797,432 $ 36,754 $ 130,000 Future requirements related to long-term borrowing are as follows: Fiscal Year Ending Loans from the City Bank Loan Totals June 30 Principal Interest Principal Interest Principal Interest 2018 $ - $ 3,932 $ 130,000 $ 28,980 $ 130,000 $ 32,912 2019 - 3,932 130,000 25,118 130,000 29,050 2020 - 3,932 780,000 11,681 780,000 15,613 2021 - 3,932 - 3,932 2022 - 3,932 3,932 2023-2027 137,473 19,258 - - 137,473 19,258 2028-2032 377,430 12,182 - - 377,430 12,182 2033-2036 242,529 2,704 - - 242,529 2,704 $ 757,432 $ 53,802 $ 1,040,000 $ 65,779 $ 1,797,432 $ 119,581 8. Related Party Transactions In fiscal year 2017 the agency repaid $515,500 to the city for the Saxony properties purchased with Parks Bond funds in 2015 for future downtown development. Per the purchase and sale agreement, the Parks Bond fund would be repaid for any portion of the property that is not used for public space by January 30,2017. 19 City Center Development Agency Notes to the Basic Financial Statements 9. 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 30,2017. 10. Subsequent Events: In the first quarter of fiscal year 2018 the agency was in the process of demolishing the Saxony properties for future redevelopment using a$400,000 federal grant from the U.S. Environmental Protection Agency for the cleanup of the Saxony properties as a Brownfields site in downtown Tigard. Further testing of the site for possible contamination will continue in fiscal year 2018 to determine cleanup requirements. Brownfields are defined as real property, the expansion, development or reuse of which may be complicated by the presence or potential presence of a hazardous substance,pollutant or contaminant. 20 No content appears on this page by design. Required Supplementary Information 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 30,2017 Variance with Budgeted Amounts Actual Final Budget Original Final Amounts Over(Under) REVENUES: Rental revenues $ 78,000 $ 78,000 $ 84,425 $ 6,425 Intergovernmental revenues 500,000 500,000 140,344 (359,656) Total revenues 578,000 578,000 224,769 (353,231) EXPENDITURES: Capital projects* 1,207,000 1,207,000 848,482 358,518 Change in fund balance before other financing sources (629,000) (629,000) (623,713) 5,287 OTHER FINANCING SOURCES: Transfers in 629,000 629,000 515,500 (113,500) Total other financing sources 629,000 629,000 515,500 (113,500) Change in fund balance - - (108,213) (108,213) Fund balance-Beginning of the year - - 140,349 140,349 Fund balance- End of the year $ - $ - $ 32,136 $ 32,136 * For budgetary purposes expenditures are appropriated as capital projects,however on the GAAP statements non-capital transactions are recorded as program expenditures. 21 No content appears on this page by design. Other Supplementary Information 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 30,2017 Variance with Budgeted Amounts Actual Final Budget Original Final Amounts Over(Under) REVENUES: Property taxes $ 434,000 $ 434,000 $ 440,497 $ 6,497 Interest earnings - - 4,138 4,138 Total revenues 434,000 434,000 111,635 10,635 EXPENDITURES: Debt service:* Principal 130,246 130,246 130,246 - Interest 36,754 36,754 36,754 - Total expenditures 167,000 167,000 167,000 - Change in fund balance before other financing sources (uses) 267,000 267,000 277,635 10,635 OTHER FINANCING USES Reserve for future expenditure (20,000) (20,000) - 20,000 Transfers out (629,000) (629,000) (515,500) 113,500 Total other financing sources (uses) (649,000) (649,000) (515,500) 133,500 Change in fund balance (382,000) (382,000) (237,865) 144,135 Fund balance-Beginning of the year 382,000 382,000 362,207 (19,793) Fund balance-End of the year $ - $ - $ 124,342 $ 124,342 * Budget appropriation for the Urban Renewal Agency is made at the debt service program level. 22 No content appears on this page by design. INDEPENDENT AUDITOR'S REPORT REQUIRED BY OREGON STATE REGULATIONS MOSSADAMS Report of Independent Auditors on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Oregon Minimum Audit Standards Board Members Tigard City Center Development Agency (A component unit of the City of Tigard, Oregon) Tigard, Oregon We have audited the basic financial statements of the Tigard City Center Development Agency, a component unit of the City of Tigard, Oregon (the Agency) as of and for the year ended June 30, 2017 and have issued our report thereon dated January 31, 2018. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the provisions of the Minimum Standards for Audits of Oregon Municipal Corporations, prescribed by the Secretary of State. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the basic financial statements are free from material misstatement. 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, grants, including provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules OAR 162-010-0000 to 162-010-0330, as set forth below, noncompliance with which could have a direct and material effect on the determination of financial statement amounts: Instances of Non- Compliance OAR Section Identified? 162-010-0000 Preface None Noted 162-010-0010 Definitions None Noted 162-010-0020 Introduction None Noted 162-010-0030 General Requirements None Noted 162-010-0050 Financial Statements None Noted 162-010-0115 Required Supplementary Information(RSI) None Noted 162-010-0120 Other Supplementary Information None Noted 162-010-0130 Schedule of Revenues,Expenditures/Expenses.and Changes in Fund Balances,/Net Assets.Budget None Noted and Actual(Each Fund) 162-010-0150 Schedule of Property Tax Transactions or Acreage Assessments None Noted 162-010-0160 Schedule of Bonded or Long-Term Debt Transactions None Noted 162-010-0170 Schedule of Future Requirements for Retirement of Bonded or Long-Term Debt None Noted 162-010-0190 Other Financial or Statistical Information None Noted 162-010-0200 Required Disclosures and Independent Auditors Comments None Noted 162-010-0230 Accounting Records and Internal Control None Noted 162-010-0240 Public Fund Deposits None Noted 162-010-0250 Indebtedness None Noted 162-010-0260 Budget None Noted 162-010-0270 Insurance and Fidelity Bonds None Noted 162-010-0280 Programs Funded from Outside Sources None Noted 162-010-0300 Investments None Noted 162-010-0310 Public Contracts and Purchasing None Noted 162-010-0320 Other Comments and Disclosures None Noted 23 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. The results of our test disclosed no instances of noncompliance that are required to be reported under Minimum Standards for Audits of Oregon Municipal Corporations, prescribed by the Secretary of State. Internal Control Over Financial Reporting In planning and performing our audit, we considered the Agency's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Agency's internal control over financial reporting. 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 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 over financial reporting 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 deficiencies, significant deficiencies or material weaknesses. Given these limitations, during our audit we did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. We noted certain additional matters that we reported to the City of Tigard and the Agency in a separately issued letter to management. 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 do not provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Minimum Standards for Audits of Oregon Municipal Corporations, prescribed by the Secretary of State, in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. (7weizi,) For Moss Adams LLP Portland, Oregon January 31, 2018 24 X COMMUNICATION TO THOSE CHARGED WITH GOVERNANCE AND INTERNAL CONTROL RELATED MATTERS CITY OF TIGARD, OREGON June 30 2017 ® MOSSADAMS MOSSADAMS Communication to Those Charged with Governance and Internal Control Related Matters To the City Council Members City of Tigard, Oregon We have audited the financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City of Tigard, Oregon (the City) as of and for the year ended June 30, 2017, and have issued our report thereon dated January 31, 2018. Professional standards require that we provide you with the following information related to our audit. OUR RESPONSIBILITY UNDER AUDITING STANDARDS GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA As stated in our audit contract dated April 27, 2016, our responsibility, as described by professional standards, is to form and express an opinion about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles. Our audit of the financial statements does not relieve you or management of your responsibilities. Our responsibility is to plan and perform the audit in accordance with generally accepted auditing standards and to design the audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control over financial reporting. Accordingly, we considered the City's internal control solely for the purposes of determining our audit procedures and not to provide assurance concerning such internal control. We are also responsible for communicating significant matters related to the financial statement audit that, in our professional judgment, are relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you. We are also responsible for performing tests of compliance with certain provisions of laws, regulations, contracts, and grant agreements, including provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules OAR 162-10-000 to 162-10-330 of the Minimum Standards for Audits of Oregon Municipal Corporations, noncompliance of which could have a direct and material effect on the determination of financial statement amounts. 1 MOSSADAMS key factors and assumptions used to develop unbilled revenue in determining that it is reasonable in relation to the financial statements taken as a whole. Allowance for Doubtful Accounts—This represents an estimate of the amount of accounts receivable that will not be collected. We have evaluated the key factors and assumptions used to develop the allowance in determining that it is reasonable in relation to the financial statements taken as a whole. Recovery Periods for the Cost of Capital Assets—This represents the depreciation of capital assets. We have evaluated the key factors and assumptions used to develop the recovery periods in determining that they are reasonable in relation to the financial statements taken as a whole. Other Post-Employment Benefit Obligations—This represents the amount of annual expenses recognized for post-employment benefits. The amount is actuarially determined with management input. We have evaluated the key factors and assumptions used to develop the annual expenses in determining that it is reasonable in relation to the financial statements taken as a whole. Financial Statement Disclosures The disclosures in the financial statements are consistent, clear, and understandable. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. We did not note any disclosures in the financial statements which we consider sensitive to potential users. Difficulties Encountered in Performing the Audit We encountered no difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. For purposes of this letter, professional standards define an audit adjustment as a proposed correction of the financial statements made subsequent to the start of audit final fieldwork. An audit adjustment may or may not indicate matters that could have a significant effect on the City's financial reporting process (that is, cause future financial statements to be materially misstated). We identified the following audit adjustments during the course of our audit procedures: 1) To correct deferred inflows of resources and pension expense—$5.0 million 3 MOSSADAMS PLANNED SCOPE AND TIMING OF THE AUDIT We performed the audit according to the planned scope and timing previously communicated to you in the engagement letter. SIGNIFICANT AUDIT FINDINGS Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in the notes to the financial statements. In August 2015, GASB issued Statement No. 77, Tax Abatement Disclosures(GASB 77). The Statement requires disclosure of information about the nature and magnitude of tax abatements, which is aimed at making these transactions more transparent to financial statement users. Users are expected to be better equipped to understand how tax abatements affect a government's future ability to raise resources and meet its financial obligations. The City implemented the required disclosures related to GASB 77 in the current year. Implementation of this Statement did not impact the balances or transactions recorded in the basic financial statements. No other new accounting policies were adopted and there were no changes in the application of existing policies during fiscal year 2017. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. There are no significant transactions that have been recognized in the financial statements in a different period than when the transaction occurred, Significant Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most significant estimates affecting the financial statements include: Net pension liability and related pension expense—This represents the amount of annual expense recognized for pensions and the related pension asset or liability. The amount is actuarially determined, with OPERS management input. We have evaluated the key factors and assumptions used to develop the annual expense in determining that it is reasonable in relation to the combined and individual financial statements taken as a whole. Unbilled Revenue— Unbilled revenue is a measure of revenue earned through the end of the reporting period that has yet to be billed. This generally represents accounts with billing cycles that start in the reporting year and end in the subsequent year. We have evaluated the 2 MOSSADAMS Passed adjustments are those entries found during the course of the audit that management has decided to not post to the financial statements. We identified the following passed audit adjustments during the course of our audit procedures. 1) Recognize restricted donations that have been incorrectly recorded as deferred credits— $278,000 2) Record the impact on beginning fund balance and deferred outflows of resources for not recording a loss on refunding previously for the Series 2011B Library Refunding Bonds— $375,000 3) Correct capitalized interest related to debt-financed projects—$7.5 million Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated January 31, 2018. Management Consultation with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the City's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Significant Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. 4 MOSSADAMS Communication of Internal Control Related Matters In planning and performing our audit of the financial statements of the City as of and for the year ended June 30, 2017, in accordance with auditing standards generally accepted in the United States of America, we considered the City's internal control over financial reporting (internal control) as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City'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. Our consideration of internal control was for the limited purpose described in the first paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as discussed below, we identified certain deficiencies in internal control that we consider to be material weaknesses. Review of pension schedules and capitalized interest schedules— 1) During our review of the worksheets supporting the GASB 68 pension entries and the capitalized interest calculation, we noted formula errors within the spreadsheets that resulted in City personnel recording entries to the general ledger that were not accurate and in line with the applicable GASB guidance and supporting documentation for these entries. The results of the spreadsheet errors included an audit adjustment related to pensions totaling $5 million and a passed adjustment related to capitalized interest of $7.5 million. We recommend that management establish review procedures to ensure the final entries are in line with the supporting documentation from the State PERS plan for pensions, and that the capitalized interest spreadsheet be reviewed for proper calculations in accordance with GASB guidance. In addition to the required communications, we have identified the following matters for your consideration. Our recommendations are based on observations and testing during the course of our audit. These recommendations should be evaluated by management and the Council Members for implementation and the City should conduct a cost benefit analysis including consideration of the risks for the recommended action. 5 MOSSADAMS Other Matters Utility Billing— 1) During our review of the sewer billing rate modification process for the winter average formula, we noted that no procedure was in place to require a review of the inputs used in the calculation. As a result, management noted that the formula was incorrect for one month's billings and the City had to correct the rate and send out revised bills to the affected customers. We recommend that a review process be implemented to ensure that customers are billed at the correct rate. 2) During our review of the customer adjustment process, we noted that some of the adjustments selected for testing did not include evidence supporting the approval of the adjustment. We recommend that all adjustments include a review and approval process to ensure they are booked at the correct amount, to the correct customer account and are appropriately authorized. Work Orders— 1) During our work order control testing, we noted a lack of communication between the project manager and the finance department regarding the status of ongoing work orders. We recommend that routine meetings between finance and operations occur to review the various open work orders to ensure the activity is properly captured and reflected in the general ledger. Further, we recommend that the finance department work closely with operations to identify and expense any work orders that will not continue into the construction phase. 2) During our work order control testing, we noted that no process was in place to review the general ledger reconciliation. We recommend that a review process to be implemented to ensure costs are not only capitalized or expensed appropriately, but also allocated to the correct funds. 3) During our review of contributed capital, we noted that there is not a review of the contributed capital allocation worksheets that are utilized to allocate the value of the assets contributed to the various funds. We recommend that a review process be implemented to ensure the allocations are reasonable and calculated accurately. Fees and Permitting— 1) During our revenue and cash receipting control testing, we noted that for one of the days selected to trace through cash receipts to the general ledger, the cash receipts from community development were booked inappropriately to a liability account in the general ledger. We recommend that a review process be implemented to ensure that cash receipts and revenue are recorded accurately to the correct general ledger account. 6 MOSSADAMS Financial Statement Review— 1) During our control procedures over the financial close and reporting cycle, we noted a lack of documentation of management's review and approval of the draft financial statements. We also noted that a disclosure checklist was not completed in conjunction with the review of the CAFR. We recommend that the financial statement document be reviewed and approved by someone other than the person drafting the financial statement, and that the approval be documented. We also recommend that management complete a detailed disclosure checklist as part of the financial statement review process to ensure the City is including all of the required disclosure under the applicable GASB guidance. This communication is intended solely for the information and use of management and the Council Members and is not intended to be and should not be used by anyone other than these specified parties. Noief bediv` i��,� LII Portland, Oregon January 31, 2018 7 MOSSADAMS AIS-3432 5. Workshop Meeting Meeting Date: 02/20/2018 Length (in minutes): 20 Minutes Agenda Title: Local Option Levy Ballot Title Alternative Prepared For: Marty Wine Submitted By: Kelly Burgoyne, Central Services Item Type: Motion Requested Meeting Type: Council Resolution Workshop Mtg. Public Hearing Yes Newspaper Legal Ad Required?: Public Hearing Publication Date in Newspaper: Information ISSUE Shall the City Council consider alternative language for the ballot title question for local option levy referral? STAFF RECOMMENDATION / ACTION REQUEST Adopt a resolution amending the ballot title question to list the city services to be supported by a local option levy. KEY FACTS AND INFORMATION SUMMARY When the City Council referred a local option levy to Tigard voters at the meeting of February 13, concern was expressed that the question in the ballot title should be clear, as descriptive as possible, and include the services that would be supported by a local option levy. In considering the concerns raised, staff and the City Attorney have reconsidered the ballot title question and offer alternative language for Council to consider, listed in Exhibit 1 to the Resolution. The ballot title is intended to simply describe the measure that will be placed before voters. It is composed of a caption (10 words), question (20 words) and summary (175 words). Statutory requirements include the question must include the name of the taxing district, the purpose of the tax, the first fiscal year and number of years that the tax will be imposed; and has required language to indicate if property taxes may increase more than three percent. The purpose of the language must also be explained in plain language and not advocate for a yes or no answer. OTHER ALTERNATIVES COUNCIL OR TCDA GOALS, POLICIES, MASTER PLANS Consideration of a local option levy is part of the City Council's 2017-2019 goal to "Advance a Local Option Levy and Facilities Bond to Voters to Increase Resources and Space for Day-to-Day City Services." DATES OF PREVIOUS CONSIDERATION February 13, 2018 - Council adopted Resolution 18-09 including ballot title, referring a local option levy to voters. February 6, 2018 - Council considered alternative levy packages to determine whether,when and what should be included in a proposed operating levy. December 12, 2017 - Levy and Bond Advisory Task Force presented unanimous recommendation to City County recommending levy referral to voters and Council directed staff to develop alternative levy packages for consideration. Attachments Resolution-Ballot Title 2 Ballot Title 2 CITY OF TIGARD, OREGON TIGARD CITY COUNCIL RESOLUTION NO. 18- A RESOLUTION APPROVING REFERRAL TO THE ELECTORS OF THE CITY OF TIGARD AT THE MAY 15, 2018 PRIMARY ELECTION, THE QUESTION OF WHETHER TO ISSUE A FIVE- YEAR OPERATING LEVY WHEREAS, a majority of the Tigard City Council has determined that the voters of the City of Tigard should be asked to vote on a five-year local option levy at a rate of$1.18 per $1,000 of assessed value, beginning July 1,2018,which will help the City maintain and expand its current level of services; WHEREAS,Council has identified police services,parks and recreation,library programs,and sidewalks,as the operating levy's funding priorities;and WHEREAS, Council discussed and received input about the clarity of description of services in Resolution 18-09 and is proposing amendments in response; NOW,THEREFORE,BE IT RESOLVED by the Tigard City Council that: SECTION 1: Resolution 18-09 is hereby repealed in its entirety. SECTION 2: Election. An election is called in the City of Tigard for the purpose of submitting to the legal voters of the City a five-year local option levy at a rate of$1.18 per$1,000 of assessed value, beginning July 1,2018. The ballot tide to appear on the ballot is attached and incorporated as Exhibit 1. SECTION 3: Election Conducted by Mail. The measure election will be held on Tuesday, May 15 2018. The precinct for the election will be all of the territory within the corporate limits of the City of Tigard. As required by ORS 254.465 and ORS 254.470, the election will be conducted by mail by the Washington County Elections Department,according to the procedures adopted by the Oregon Secretary of State. SECTION 4: Notice of Ballot Tide. The City Elections Officer is directed to publish notice of receipt of the ballot tide in the Tigard Times or The Oregonian in compliance with ORS 250.275(5). SECTION 5: Ballot Tide. Pursuant to ORS 250.285 and ORS 254.095,the Tigard City Council directs the City Elections Officer to file a notice of City Measure Election in substantially the form of Exhibit 2, with the Washington County Elections Office, unless, pursuant to a valid ballot tide challenge,the Tigard City Council certifies a different Notice of City Measure Election be filed, such filing will occur no earlier than the eighth business day after the date on which Exhibit 2 is filed with the City Elections Officer and not later than March 15,2018. SECTION 6: Explanatory Statement. Pursuant to ORS 251.345 and TMC 1.12.050, the Tigard City Council directs the City Manager to prepare a Measure Explanatory Statement for publication in the county voters' pamphlet; said statement will be filed with the Washington County Elections Office at the same time the Notice of City Measure Election is filed by the City Elections Officer. RESOLUTION NO. 18- Page 1 SECTION 7: Delegation. The Tigard City Council authorizes the City Manager or a designee of the City Manager to act on behalf of the City of Tigard and to take such further action as is necessary to carry out the intent and purposes herein in compliance with the applicable provisions of law. SECTION 8: This resolution is effective immediately upon passage. PASSED: This day of 2018. Mayor-City of Tigard ATTEST: City Recorder-City of Tigard RESOLUTION NO. 18- Page 2 Exhibit 1 BALLOT TITLE CAPTION: Operating and capital levy to maintain and increase city services. QUESTION: Shall Tigard issue five-year operating/capital levy, $1.18/$1,000 assessed value, for police,parks,library,and city services,beginning 2019? SUMMARY: This measure would help pay for and increase city services,including police, park maintenance,library hours and programs,and safe walking routes and sidewalks. Funding priorities would include: Police: • Reducing police response times • Increasing neighborhood patrols • Increasing traffic enforcement • Maintaining community policing and crime prevention • Investigating elder abuse,drug trafficking,theft and property crimes • Retaining school resource officer program,peer court,and youth programs Parks and Recreation: • Maintaining parks,trails,playgrounds, sports fields,and natural areas • Watering and repairing sports fields;addressing graffiti and vandalism • Expanding recreation programs,activities,and events Library: • Sustaining library programs and open hours • Increasing programs and events for children and seniors • Expanding library collection Safety: • Delivering sidewalk improvements with a focus on safe walking and biking routes to schools • Preserving the Community Emergency Response Team(CERT) Accountability of funds will be provided through annual performance and efficiency audits and oversight committee. Without this additional revenue,all general fund services,including police,park maintenance,library,and recreation,would be decreased. Estimated revenues for each year of levy: $7,790,000 in 2019-20 $8,030,000 in 2020-21 $8,270,000 in 2021-22 $8,510,000 in 2022-23 $8,770,000 in 2023-24 c1 kec J Council Woodard Local Option Levy, Opposition Statement- Council Business Meeting,20 Feb 18 'T1 • Most recently on 6, 13 and now 20 Feb 2018 Council Meetings- in consideration of a ♦ ' Local Option Levy referral to voters on 15 May 2018 - I adamantly OPPOSE and DO d NOT RECOMMEND Referring a Local Option Levy this May. Instead... 16, I highly recommend City Council consider referring a Resolution to the Citizens for 74, Sensible Oversight proposal for an independent performance audit to the legal Electors , of the City of Tigard — Specifically, "a Measure proposing a Charter Amendment to 9,, include an Independent Performance Auditor, or Annual Performance Audit process Accountable to the City Council. And prior to Charter Amendment vote - a "Performance Auditor Study Group" provides audit scope with public input and support. c A similar process is now in motion within the City of Eugene —The City of Tigard has a c, 53 Charter Performance Audit Amendment process it can follow through the hard work of another City council. Whereas their council supports the Charter Amendment oversight process — I too agree with their sensible oversight Charter amendment logic and recommend the City of Tigard follow their lead— "Following on her pledge to make city government more accountable and transparent, Mayor Lucy Vinis convened a Eugene Performance Auditor Study Group to develop an objective,factual matrix of models for a performance auditor position. Now that the Study Group has completed their work,this matrix will inform discussions by the public and the City Council as they consider different approaches to improving city government." On Monday, February 12th, 2018, at 7:3o pm, "the Eugene City Council... `Voted on a resolution to refer the Citizens for Sensible Oversight proposal for an independent performance auditor to voters on the May 2018 ballot. Eugene Council Resolution No. 5219 Title reads — 'A resolution calling a City Election on May 15, 2018 for the purpose of referring to the legal Electors of the City of Eugene a Measure proposing a Charter Amendment to Create an Independent Performance Auditor Accountable to the City Council." The Resolution Passed: 5:2 in favor of a Charter Amendment put to a vote. Within our City Charter there is no independent City Performance Audit Function, statement, scope, oversight guidelines or requirement to perform any such annual City performance audit. Instead our City Charter accountability and transparency provisions are very vague with respect to finance and budget process - with no oversight requirement.The fiscal and budget function and process guidelines are found in two charter Sections: 22A-Under Finance Officer—It simply states,"The Finance Officer shall be responsible for the administration of the City's fiscal functions and shall sign all orders on the treasury[Measure 52,November 5, 1985 election].And 20A- City Manager—"(h) Prepare and transmit to the Council an annual City budget [Measure 34- 58, November 5, 1996 election]." Nowhere in the City Charter is there any principled business practices or operational efficiency oversight requirement of City leadership. Unless the City Charter is amended by vote of the people to broaden its fiscal and budget process and oversight function,role, responsibilities and accountability—non a Jo j or�M>Vbl -- 1 r0c� s -L '-4-7()3/e 64,4 / like cciaz-riei /ckQ, Council Woodard Local Option Levy, Opposition Statement- Council Business Meeting,20 Feb 18 transparent practices will increasingly be challenged by the public— Our Charter is decades overdue for change review; and not-up-to-date with Ops excellence practices. The Cities financial and budgetary practices have not changed since 1985 and 1996. Recall, to be competitive in business operations within the 21st Century... "Governments and not-for-profit organizations are expected to demonstrate performance levels typically demanded of the private sector while demonstrating accountability and transparency. As a result, boards, councils, and management teams have to rethink how they operate and put a greater emphasis on continuous improvement, performance metrics, and community outcomes."[Moss Adams: Performance Audit Services Overview]." City Performance Audits are no stranger of our neighboring municipalities: Washington County's Auditor, "conducts performance audits and special studies that provide accountability to the public and improve Washington County programs, services, and operations." The "Metro Auditor and staff are responsible for conducting performance audits and reviewing Metro operations with the purpose of improving efficiency and effectiveness."The City of Portland auditor works"with outside service providers to conduct organizational efficiency and compliance assessments..." The reality of Tigard's budget and General Fund situation - it is not going to change much over the next 2 years if a Local Option Levy is not referred to voters this May. A two year time frame would provide council time needed to amend the City Charter to include oversight performance audits expected of todays and tomorrow's City governments to ensure sustainable&affordable city services; and gain public trust. As stated during 12 December 2017 business meeting in front of the 15 panel task force "if I had the other half of the information — or spends oversight efficiency data,which doesn't exist... I could make a decision on whether I could support this Local Option Levy. However, I can't in good conscious ask more money of the tax payer without operational oversight spends data missing from the revenues gap equation. I don't have enough info to determine if the levy amount is correct or even necessary at this time. I highly recommend council not adapt a Local Option Levy referral for a vote this May. Instead —put forth a Resolution to "Refer the Citizens for Sensible Oversight proposal November 2018 election cycle." "A Measure proposing a Charter Amendment to Create an Independent Annual City Performance and Sustainable City Services Auditor position; or amend it to include an independent City Performance Audit annually based on `Performance Auditor Study Group' scope recommendations." Thereafter city officials could put forth a revised local option levy if necessary in May or November of 2019 -if audit results justify a significant Net Revenues Gap need. Thank you for the time to make the statement. Councilor Woodard