CCDA Report FY Ending June 30, 2017 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. I Tigard,OR 97223 1503-639-4171
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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.
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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.
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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.
/6(1,V C 460/Ai
For Moss Adams LLP
Portland, Oregon
January 31, 2018
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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.
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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 that are reported as governmental
activities in the government-wide financial statements. Unlike government-wide financial statements,
governmental fund financial statements focus on the acquisition and use of spendable resources, as well as
balances of available spendable resources at the end of the fiscal year. Such information may be useful in
evaluating the agency's near-term requirements.
The agency maintains two separate governmental funds consisting of the Urban Renewal Debt Service Fund
and the Urban Renewal Capital Projects Fund. The Capital Projects Fund functions as the agency's general
operations fund. Information for each fund is presented separately in the governmental funds balance sheet
and in the governmental funds statement of revenues and expenditures.
Notes to the basic Financial Statements
The notes provide additional information that is essential for a full understanding of the data provided in the
government-wide and fund financial statements. They are an integral part of the financial statements and
should be read in conjunction with them.
Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of the agency's financial position. In
the case of the agency, assets 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.
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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
LIABILITIES:
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
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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,'1'1'1,857 $ 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.
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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.
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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.
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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.
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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.
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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.
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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
website at http://www.tigard-or.gov.
Basic Financial Statements
The agency's financial operations are presented at both the government-wide and fund financial levels. All
activities of the agency are categorized as governmental activities.
Government-wide financial statements
The Statement of Net Position and the Statement of Activities display information about the agency as a
whole. These statements include all the financial activities of the agency.
The Statement of Activities presents a comparison between direct expenses and program revenues for each
function of the agency's governmental activities. Direct expenses are clearly identifiable with a specific
function. All costs are supported by general revenues which include property taxes and interest earnings.
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.
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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.
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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
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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.
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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 $ (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 $ 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.
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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.
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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.
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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.
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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 434,000 434,000 444,635 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 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.
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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
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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.
‘Uaa 4em,f?ti
For Moss Adams LLP
Portland, Oregon
January 31, 2018
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