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2019 City of Tigard CAFR City of Tigard, Oregon Comprehensive Annual Financial Report FISCAL YEAR ENDED JUNE 30, 2019 Al .4ALI, . iiki. . . ,.. .,.... ... , . • a., . AP. ,, 4 ..- :' •7 , I .. . .0 .7 •I me...„7:Y.i.:7,0--P.-*.. :"..filr;t4..:;f 11 '.• i , ••• -.. I . . *..,2. '6 a• Alt A -01111fr • .. i .-•'"_,:k,,, 6.1.1 ...._ _ . ' . . - __ 1'zi-:• - . •-, 3..--;:7-"-•;-•- A W.:14" t _ i4.2ft- 411 •1 -' ' .. . . . . .. pti g II 444nE t'i''''' ) rOUtE it . . , ,. . ,„, . ...,, „,..,. i._. ...-,"! 7,t,:-., ..-r• A - Lk.. ''' 1 CLU 01 . , _.- Jle.4 •o- • . • ...- • - 10 . .p-4,40, -1. , _ _ -. , - , ....-...iv L..• .4 -N.- ."- r r 0 rt F.0,.4c,..- ,.,f.'7..,„, ., ,. _-., ,z,s, ,L, ... .,,_ . ,.,' 0 — - - i'f' I„,: • . ,. 1,4„.• •r, /ON.- ;i, . - ,r. ' ,•• 4:4W." 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City of Tigard 13125 SW Hall Boulevard I Tigard, OR 97223 I 1 www.tigard-or.gov IN UI _ ._ T I GARD City of Tigard, Oregon Comprehensive Annual Financial Report For the fiscal year ended, June 30, 2019 Prepared by: City of Tigard — Finance and Information Services Department 3 City of Tigard, Oregon Table of Contents Introductory Section Letter of Transmittal 11 Certificate of Achievement for Excellence in Financial Reporting 19 Organization Chart 20 Principal Officials 21 Financial Section Report of Independent Auditors 25 Management's Discussion and Analysis 29 Basic Financial Statements: Government-Wide Financial Statements Statement of Net Position 47 Statement of Activities 48 Fund Financial Statements Major Governmental Funds: Balance Sheet 50 Reconciliation of the Balance Sheet to the Statement of Net Position 51 Statement of Revenues, Expenditures, and Changes in Fund Balance 52 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balance to the Statement of Activities 53 Proprietary Funds: Statement of Net Position 54 Statement of Revenues, Expenses,and Changes in Fund Net Position 55 Statement of Cash Flows 56 Pension Trust Fund: Statement of Fiduciary Net Position 59 Statement of Changes in Fiduciary Net Position 60 Notes to Basic Financial Statements 63 Required Supplementary Information: Schedules of Revenues and Expenditures—Budget and Actual: General Fund 119 Schedule of the City's Proportionate Share of the Net Pension Liability(Asset) 120 Schedule of City's Contributions—Oregon Public Employees Retirement System 121 Schedule of the Changes in the City's Total OPEB Liability and Related Ratios—Implicit Rate Subsidy Plan 122 Schedule of the City's Proportionate Share of the Net OPEB Liability(Asset)—Oregon Public Employees Retirement System, Retirement Health Insurance Account 123 Schedule of the City's Contributions—Oregon Public Employees Retirement System, Retirement Health Insurance Account 124 Other Supplementary Information: Nonmajor Governmental Funds Combining Statements: Combining Balance Sheet 127 Combining Statement of Revenues, Expenditures,and Changes in Fund Balances 128 Special Revenue Funds: Combining Balance Sheet—Nonmajor Special Revenue Funds 132 4 City of Tigard, Oregon Table of Contents, continued Financial Section, Continued Other Supplementary Information,Continued: Combining Statement of Revenues, Expenditures,and Changes in Fund Balance 134 Schedules of Revenues and Expenditures—Budget and Actual: Gas Tax Fund 136 City Gas Tax Fund 137 Transient Lodging Tax Fund 138 Electrical Inspection Fund 139 Building Fund 140 Criminal Forfeiture Fund 141 Urban Forestry Fund 142 Parks Utility Fund 143 Library Fund 144 Debt Service Funds: Combining Balance Sheet—Nonmajor Debt Service Funds 148 Combining Statement of Revenues, Expenditures,and Changes in Fund Balance 150 Schedules of Revenues and Expenditures—Budget and Actual: Bancroft Bond Debt Service Fund 152 General Obligation Debt Service Fund 153 City Center Urban Renewal Debt Service Fund 154 Tigard Triangle Debt Service Fund 155 Capital Projects Funds: Combining Balance Sheet—Nonmajor Capital Projects Funds 160 Combining Statement of Revenues, Expenditures and Changes in Fund Balance—Nonmajor Capital Projects Funds 162 Schedule of Revenues and Expenditures—Budget and Actual: Facility Fund 164 Underground Utility Fund 165 Street Maintenance Fee Fund 166 Transportation SDC Fund 167 Parks Capital Fund 168 Parks Bond Fund 169 City Center Capital Improvements Fund 170 Tigard Triangle Capital Improvements Fund 171 Major Capital Projects Funds Schedule of Revenues and Expenditures—Budget and Actual: Transportation Development Tax Fund 172 Parks SDC Fund 173 Transportation CIP Fund 174 Proprietary Funds: Enterprise Funds: Schedules of Revenues and Expenditures—Budget and Actual: Sanitary Sewer Fund 177 Reconciliation of Budgetary Revenues and Expenditures to Proprietary Revenues and Expenses—Sanitary Sewer Fund 178 Stormwater Fund 179 Water Quality and Quantity Fund 180 Reconciliation of Budgetary Revenues and Expenditures to Proprietary Revenues and Expenses—Stormwater Funds 181 Water Fund 182 Water SDC Fund 183 Water CIP Fund 184 5 City of Tigard, Oregon Table of Contents, continued Financial Section, Continued Other Supplementary Information,Continued: Water Debt Service Fund 185 Reconciliation of Budgetary Revenues and Expenditures to Proprietary Revenues and Expenses—Water Funds 186 Reconciliation of Budgetary Fund Balance to Generally Accepted Accounting Principles Basis Net Position 187 Internal Service Funds: Combining Statement of Net Position 192 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position 194 Combining Statement of Cash Flows 196 Internal Service Funds,Continued: Schedules of Revenues and Expenditures—Budget and Actual: Central Service Fund 198 Public Works Administration Fund 199 Public Works Engineering Fund 200 Fleet/Property Management Fund 201 Insurance Fund 202 Other Schedules: Schedule of Bond and Bond Interest Transactions 205 Schedule of Future Debt Service Requirements of: Local Improvement District Bonds 206 General Obligation Bonds 207 Bank Loan Payable 208 Water Revenue Bonds 209 Safe Drinking Water Revolving Loan Funds 210 Statistical Section Net Position by Component 214 Changes in Net Position 216 Fund Balances of Governmental Funds 220 Changes in Fund Balances of Governmental Funds 222 Governmental and Business-Type Revenues 224 Governmental and Business-Type Expenses by Function 226 General Governmental Revenues by Sources 228 General Governmental Expenditures by Function 230 Market Value and Assessed Value of Taxable Property 231 Property Tax Rates—Direct and Overlapping Governments 232 Principal Property Taxpayers 234 Property Tax Levies and Collections 235 Special Assessment Collections 236 Ratio of Annual Debt Service Expenditures for Long-Term Debt to Total Governmental Expenditures 237 Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt per Capita 238 Computation of Direct and Overlapping Debt 239 Computation of Legal Debt Margin 240 Ratio of Debt by Type 242 Computation of Water Revenue Bonds Debt Coverage 244 Demographics Statistics 246 Principal Employers 247 Property Value and Construction 248 6 City of Tigard, Oregon Table of Contents, continued Statistical Section,Continued Full-time Equivalent City Government Employees by Function 249 Operating Indicators by Function/Program 250 Capital Assets Statistics by Function 252 Miscellaneous Statistical Data 253 Audit Comments and Disclosure Requirements Report of Independent Auditors Required by Oregon State Regulations 258 Report of Independent Auditors on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 260 Report of Independent Auditors on Compliance for the Major Federal Program and Report on Internal Control Over Compliance as Required by the Uniform Guidance 262 Schedule of Expenditures of Federal Awards 264 Schedule of Findings and Questioned Costs 266 7 No content appears on this page by design. 8 Introductory Section 9 10 Pp! City of Tigard December 5, 2019 Citizens of Tigard Honorable Mayor and 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, 2019, 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, 2019, 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, 2019, 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, 2019, 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. 11 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 rt Jay The City of Tigard is located in southeast Washington County, 9 miles from 1.►�. downtown Portland, Oregon. The city is included in the Metro urban growth Tligprd 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. Throughout fiscal year 2019, permitting and construction hwy2s phase of development of River Terrace was in full swing. Portland Full build out is expected to take roughly 20 years. Upon ii completion, River Terrace is expected to be home to around 6,500 new residents. More information about F! Tigard's newest neighborhood is on the city's website at: Beaverton http://www.tigard-or.gov/river terrace.php. 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 g member of the city council is elected at-large to serve a s� Osw o es' four-year term. The mayor presides at council meetings h 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 1-205 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. 12 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 Tigard Town Center Development Agency(TCDA),formerly the City Center Development Agency, is also included in the city's financial statements as a component unit.TCDA 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 and Tigard Triangle 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 a ten-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 this period. Tigard's most current unemployment rate is 3.4 percent as of June 2019,which is 0.6 percent lower than the Portland Metro area and the State of Oregon. Unemployment trends • 10.0% cc• 8.0% 6.0% 4.0% - a • 2.0% • 0.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 -State of Oregon 10.5% 9.4% 8.596 8.1% 6.8% 5.5% 4.8% 3.7% 4.096 4.0% -United States 9.6% 9.2% 8.2% 7.8% 6.1% 5.3% 4.9% 4.3% 4.0% 3.746 -Portland Metro 9.7% 9.5% 8.096 7.6% 6.1% 5.4% 4.9% 3.7% 3.6% 4.096 -Washington County 9.0% 8.1% 8.2% 6.6% 5.6% 5.096 4.7% 3.5% 3.5% 3.496 -City of Tigard 8.446 8.1% 8.2% 6.696 5.4% 4.5% 4.4% 3.5% 3.5% 3.4% Fiscal year 13 2019 Summary of Local Statistics Number of businesses 2,713 Median household income $70,120 Median home value $345,200 General fund permanent tax rate $2.5131 per$1,000 of assessed value Total assessed value (est. 2018/2019) 6,766,067,829 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 CIP 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 2019—2024 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 2019 budget document includes the city's financial policies noted in the appendix starting on page 385. The policies can be found on line at: http://publicrecords.tigard-or.gov/Public/DocView.aspx?id=896203&dbid=0&repo=CitvOffigard 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. 14 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 two- year timeframe that the Council will serve together,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 ■ Suggest recreation-related questions for the 2017 Community Attitudes Survey 15 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 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 16 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.gov/city hall/finance and information services.php. 17 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, 2018. This was the 33rd 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 2019. This was the 31st 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 2020 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, 4111 Marty Wine Toby LaFrance City Manager Director of Finance and Information Services 18 id G3 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, 2018 . eitu.retiai 1). 2ifezAA:te Executive Director/CEO 19 III . �1 T I GARD City of Tigard, Oregon Citywide Organizational Chart as of June 30, 2019 City of Tigard 11 If Citizens of Tigard I Mayor& City City Council Attorney ll City Manager 11 I I I I I I Central City Community Finance& 1 Library i 1 Police Public Works Services Management Development Information Svcs. Design& Human Community Administration Administration Administration Administration Communications Resources Planning Green Team Financial Circulation Support City Recorder Risk Building Operations Services Public Works Management Reader Engineering Municipal Economic Information Services Police Court City Manager's Development Services Operations Parks Office Technical Maintenance Fleet Utility Billing Services Maintenance Recreation Contracts Property &Purchasing Storm Water Management Sanitary Sewer Street Maintenance Street Lights &Signals 20 City of Tigard, Oregon Principal Officials as of July 1, 2019 Elected Officials Name Term Expires Mayor Jason Snider December 31, 2022 Councilor John Goodhouse December 31, 2022 Councilor Tom Anderson December 31, 2020 Councilor Heidi Lueb December 31, 2020 Councilor Liz Newton December 31, 2022 Appointed Officials Name Title Marty Wine City Manager Michael O'Brien Municipal Judge Shelby Rihala City Attorney Carol Krager City Recorder All may be reached at: 13125 SW Hall Boulevard Tigard, OR 97223 21 No content appears on this page by design. 22 Financial Section 23 24 ® MOSSADAMS Report of Independent Auditors The 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 and for the year ended June 30, 2019, 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 and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. 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 City'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 City'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. 25 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, 2019, 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 the management's discussion and analysis, budgetary comparison schedule for the General Fund, the schedule of proportionate share of the net pension liability, the schedule of plan contributions, and the schedule of other employee postemployment benefits information (collectively, the required supplementary information) on pages 29 through 43 and 119 through 124 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, the schedule of plan contributions, and the schedule of other employee postemployment benefits information on pages 29 through 43 and 120 through 124 in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The budgetary schedule for the General Fund described above on page 119 is the responsibility of management and was derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. The budgetary schedule for the General 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 General Fund is 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 schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and the combining and individual nonmajor fund financial statements, budgetary schedules, other financial schedules on pages 127 to 202 and 264 are presented for purposes of additional analysis and are not a required part of the basic financial statements. 26 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, other financial schedules, and the schedule of expenditures of federal awards 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 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 5, 2019 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. Other Reporting Required by Minimum Standards for Audits of Oregon Municipal Corporations In accordance with Minimum Standards of Audits of Oregon Municipal Corporations, we have issued our report dated December 5, 2019 on our consideration of the City's compliance with certain provisions of laws and regulations, including the provisions of Oregon Revised Statues 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. P11/11/ L. For Moss Adams LLP Portland, Oregon December 5, 2019 27 No content appears on this page by design. 28 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, 2019. 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, 2019 by$474,099,211 (net position). Of this amount, $26,807,603 is restricted for transportation construction, maintenance and utility undergrounding, $1,163,893 is restricted for park development and improvements, $519,802 is restricted for tourism, $12,903,512 is restricted for water system construction and improvements, $9,641,926 is restricted for debt service, $8,850,454 is restricted for building development plan review and inspection, $590,078 is restricted for library capital improvements,$147,164 is restricted for urban development and improvements and $327,964 is restricted for law enforcement equipment. $86,524,226 is unrestricted net position may be used to meet the city's ongoing obligations to citizens and creditors and $326,622,589 is for net investment in capital assets. • The city's total net position had a net increase of$33,549,832 or 7.6 percent from the June 30, 2018 net position. Governmental activities net position increased by $21,126,166, or 7.8 percent. The business-type activities net position increased by $12,423,666 or 7.4 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 $80,492,906, an increase of 10,468,079 or 14.9 percent from fiscal year 2018. Of the combined ending governmental fund balances, $25,510,000 or approximately 31.7 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 $23,121,341, up $4,123,402 over the prior year. • The city's total debt decreased by$5,377,930 or 3.5 percent from fiscal year 2018. 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. 29 City of Tigard, Oregon Management's Discussion and Analysis 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. 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 in the financial section of this report, immediately following the Independent Auditor's 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. 30 City of Tigard, Oregon Management's Discussion and Analysis 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. The city maintains 28 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, Transportation Development Tax, Parks SDC, and Transportation CIP Funds. Data from the other 24 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 in the Basic Financial Statements section 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, public works administration, engineering, 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 in the Enterprise Funds section of this report. Budgetary comparisons for the internal service funds are provided in the Internal Service Funds section of this report. 31 City of Tigard, Oregon Management's Discussion and Analysis The proprietary fund financial statements can be found in the Basic Financial Statements section of this report. 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 in the Fiduciary Funds section of this report. 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 in the Notes to Basic Financial Statements section of this report. Required Supplementary Information includes Schedule of Revenues and Expenditures— Budget and Actual for the General 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 liability/(asset) and the schedule of contributions for net pensions and other post-employment benefits (OPEB). Required supplementary information can be found immediately following the notes to the financial statements 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. 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 $474,099,211 at June 30, 2019. The largest portion of the city's net position, approximately 68.9 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 $60,952,396 or approximately 12.9 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 $86,524,226 or approximately 18.3 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 $33,549,832 or 7.6 percent during the current fiscal year. Total assets for governmental activities increased by approximately$19.2 million, or approximately 6.2 percent. Noteworthy changes included an increase in cash and investments of approximately $12 million or 16.2 percent. This 32 City of Tigard, Oregon Management's Discussion and Analysis increase is due to development activity in the city resulting in higher fee collection in the Building, Transportation SDC, and Parks SDC. Governmental activities liabilities decreased by approximately $1.9 million or 4.8 percent. Noteworthy changes include a bond payments of approximately $2.3 million. See the notes to the basic financial statements for more information. Business-type activities total assets increased by approximately$9.4 million or 3.0 percent over the prior year. Cash and investments increased by approximately $12.8 million or 23.3 percent over the prior year. This increase is mainly due to increased interest earnings, and higher utility rates. Total long-term debt for business-type activities decreased by$2,827,427 or approximately 2.1 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 2019 2018 2019 2018 2019 2018 Current and other assets $ 95,799,843 $ 83,576,759 $ 75,303,377 $ 62,309,827 $171,103,220 $145,886,586 Capital assets 231,549,294 224,533,503 242,740,818 246,364,639 474,290,112 470,898,142 Total Assets 327,349,137 308,110,262 318,044,195 308,674,466 645,393,332 616,784,728 Deferred outflows 4,227,691 3,539,744 9,191 4,315 4,236,882 3,544,059 Current and other liabilities 11,164,421 10,901,193 7,169,015 7,297,504 18,333,436 18,198,697 Long-term liabilities outstanding 26,005,313 28,136,984 129,950,948 132,894,927 155,956,261 161,031,911 Total Liabilities 37,169,734 39,038,177 137,119,963 140,192,431 174,289,697 179,230,608 Deferred inflows 1,210,413 541,314 30,893 7,486 1,241,306 548,800 Net investment in capital assets 216,080,286 207,113,453 110,542,303 110,785,680 326,622,589 317,899,133 Restricted 40,908,235 38,019,099 20,044,161 18,811,969 60,952,396 56,831,068 Unrestricted 36,208,160 26,937,963 50,316,066 38,881,215 86,524,226 65,819,178 Total Net Position $293,196,681 $272,070,515 $180,902,530 $168,478,864 $474,099,211 $440,549,379 33 City of Tigard, Oregon Management's Discussion and Analysis City of Tigard —Summary of Changes in Net Position Governmental Business-Type Total Activities Activities 2019 2018 2019 2018 2019 2018 Revenues Program revenues: Charges for services $ 13,203,823 $ 13,124,594 $ 30,952,487 $ 29,907,227 $ 44,156,310 $ 43,031,821 Operating grants and contributions 9,594,291 8,321,435 - - 9,594,291 8,321,435 Capital grants and contributions 12,268,270 16,307,318 3,285,377 6,795,717 15,553,647 23,103,035 General revenues: Property taxes 19,101,543 18,387,321 - - 19,101,543 18,387,321 Franchise fees 6,211,736 6,095,852 - - 6,211,736 6,095,852 Unrestricted intergovernmental revenues 2,522,428 3,022,051 - - 2,522,428 3,022,051 Interest 2,416,827 1,683,282 1,606,834 139,926 4,023,661 1,823,208 Miscellaneous 453,435 416,785 652,421 177,276 1,105,856 594,061 Total revenues 65,772,353 67,358,638 36,497,119 37,020,146 102,269,472 104,378,784 Expenses Community services 23,370,174 24,099,976 - - 23,370,174 24,099,976 Public works 12,129,476 8,900,831 - - 12,129,476 8,900,831 Community development 5,146,891 5,330,390 - - 5,146,891 5,330,390 Policy and administration 3,688,137 2,945,936 - - 3,688,137 2,945,936 Interest on long-term debt 771,834 863,803 - - 771,834 863,803 Sewer - - 3,128,483 2,789,140 3,128,483 2,789,140 Stormwater - - 3,261,312 2,470,085 3,261,312 2,470,085 Water - - 17,223,333 14,123,903 17,223,333 14,123,903 Total expenses 45,106,512 42,140,936 23,613,128 19,383,128 68,719,640 61,524,064 Revenues over expenses 20,665,841 25,217,702 12,883,991 17,637,018 33,549,832 42,854,720 Transfers in(out) 460,325 220,392 (460,325) (220,392) - - Changes in net position 21,126,166 25,438,094 12,423,666 17,416,626 33,549,832 42,854,720 Beginning net position,as originally stated 272,070,515 246,280,611 168,478,864 151,035,149 440,549,379 397,315,760 Cumulative effect of restatement - 351,810 - 27,089 - 378,899 Beginning net position,as restated 272,070,515 246,632,421 168,478,864 151,062,238 440,549,379 397,694,659 Ending net position $293,196,681 $272,070,515 $180,902,530 $168,478,864 $474,099,211 $440,549,379 34 City of Tigard, Oregon Management's Discussion and Analysis Expenses and Program Revenues—Governmental activities—June 30, 2019 $25,000,000 - $20,000,000 - $15,000,000 - $10,000,000 - ■ Revenues $5,000,000 - • -I ■ Expenses $0 �n'�y seN�ces Q��1iG�o� dese\oilmen as .c%, tato ons tette aea� (0.0 (� and t°n\ co po�c�i metes Governmental Activities Governmental activities increased the city's net position by $21,126,166. This increase is less than the approximate $25.4 million increase in net position from governmental activities experienced in fiscal year 2018. While most revenues, including property taxes, interest, and franchise fees experienced increases during fiscal year 2019, the decrease comes from an approximate $4 million less capital grants and contributions. Noteworthy reasons for the change from the prior year are as follows: • Total operating grants and contributions increased by approximately $1.3 million over the prior year due to an increase in gas tax collections (approximately$549,000) and the implementation of a county wide vehicle registration fee (approximately$869,000). • Property taxes constitute approximately 29 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$714,000 or 3.9 percent over 2018. 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 35 City of Tigard, Oregon Management's Discussion and Analysis 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. • Capital grants and contributions experienced an approximate $4.0 million decrease from fiscal year 2018. This decrease is due to a reduction in new construction and activities generating system development charges. • Overall expenses for governmental activities of $45,106,512 increased from the prior fiscal year by approximately $2.9 million. This increase was due to an escalation in engineering activities and capital improvement projects. Revenues by Source—Governmental Activities-June 30, 2019 Capital grants and contributions Taxes 19% 33% Operating grants and contributions Interest 14% €1114% Franchise fees Charges for 9% services M i sc 20% 1% Business-type Activities Business-type activities increased the city's net position by$12,423,666. The primary reasons for the current year's increases are: • Charges for services represent approximately 84.8 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 $1.0 million or 3.5 percent over fiscal year 2018, with the largest increase in water revenues. • Expenses for water operations increased approximately $3.1 million or 21.9 percent from the prior fiscal year. The increase is primarily due to an increase in water construction projects. 36 City of Tigard, Oregon Management's Discussion and Analysis Expenses and Program Revenues— Business-type Activities—June 30, 2019 $20,000,000 - $17,500,000 - $15,000,000 - $12,500,000 - $10,000,000 - ■ Revenues $7,500,000 - • Expenses $5,000,000 - $2,500,000 - MO ill ,,,,,, $0 Se Qt Isatet \1,Ptec San�at�4 9-') 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 2019, the city's governmental funds reported combined ending fund balances of $80,492,906 an increase of $10,468,079 over the prior year. Approximately 31.7 percent or $25,510,000 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$51,414,137 or 63.9 percent of the total fund balance. Most of the restricted fund balance is dedicated for park acquisition and development, building inspections, or for street maintenance and improvements. Other restricted resources include library improvements, Police services, urban development and improvements 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 prepaids. General Fund The General Fund is the chief operating fund of the city. At the end of the fiscal year 2019, the unassigned fund balance was $23,121,341 or approximately 99.0 percent of the total fund balance of$23,347,315. 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 88.0 percent of total General Fund expenditures. 37 City of Tigard, Oregon Management's Discussion and Analysis The fund balance of the General Fund increased by $3,940,129 or 20.3 percent. The increase is primarily attributable to the reclassification of public works administration and engineering to separate internal service funds. Another reason for the increase is due to a rise in taxes of approximately $1.1 million, or 7.1 percent, more than fiscal year 2018. Transportation Development Tax Fund This fund accounts for the traffic impact fees collected on roads within the city's urban service areas. At the end of fiscal year 2019, the fund balance was $11,607,601, an increase of $36,103 from the prior year. The small increase was due to the year's revenues being transferred to the Transportation Capital Improvement fund for various street projects across the city. Total revenues of$2,382,911 are used for highways and transit capital improvements in the city's Capital Improvement Plan. The development fees are 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. At the end of fiscal year 2019, the fund balance was $10,798,916, an increase of$668,347 from the prior year. The increase was due to interest earnings and SDC collections. The fund balance has grown over the last several years due to the River Terrace housing development and are now being spent on Parks capital projects. The fund transferred approximately $1.1 million to the Parks Capital fund for various projects during the fiscal year. Total revenues of $1,787,025 are used for the acquisition, development and expansion of additional recreation spaces and facilities that are included in the city's Park Master Plan. The development fees are associated primarily with the River Terrace housing development. Transportation Capital Improvement Fund This fund accounts for capital improvement projects funded with transportation revenues; including Gas Tax, Traffic Impact Fees and Transportation Development Tax.At the end of fiscal year 2019, Capital Outlay for this fund totaled $4,747,819, the majority of which was for the Hunziker Core project. The Hunziker Core project is for building new public infrastructure improvements to SW Wall Street, providing a new public street from SW Hunziker Road to the railroad tracks. The project supports development and redevelopment of adjacent industrial lands to achieve higher levels of employment.The majority of this project is funded through federal and state grants, and developer contributions. 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 $50,316,066 with individual fund unrestricted net position at: • Sanitary Sewer $6,525,102 • Stormwater $9,256,523 • Water Funds $34,534,441 The factors concerning the finances of these funds have already been addressed in the discussion of the city's business-type activities. 38 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 $1,503,430 from the original budgeted numbers. Budgeted General Fund contingency was decreased by $825,880 or 64.3 percent. Following are noteworthy changes from the original budget to the final adopted budget in the General Fund: • Community Services - Budget appropriation increases totaled $360,172, the majority of which was to loan funds to the Tigard Triangle Capital Improvements fund. The Triangle Urban Renewal Area did not receive the tax funding that it anticipated receiving at the time the budget was adopted. • Policy and Administration — Budget appropriation increases totaled $255,478, the majority of which was to implement a photo red light enforcement program. The contingency transactions account for increase in budgeted expenditures not related to increased revenues. There was an increase to ending General Fund budgetary fund balance of $215,300 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 $719,685 due to an increase in the Local Government Investment Pool interest rates and a growing balance. • Intergovernmental revenues—variance with budget of$864,631 due to increases in local and federal grants plus additional library funds from Washington County Cooperative Library Services (WCCLS). • Taxes — variance with budget of $584,717 due mainly to a settlement of the Comcast property tax lawsuit. The lawsuit required that taxes be held in reserve pending the outcome of the trial. With the settlement the reserved taxes were released to the associated taxing districts. Capital Asset and Debt Administration Capital Assets Governmental Activities The city's investment in capital assets for its governmental activities as of June 30, 2019, amounts to $231,549,294 (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$7,015,792 or approximately 3.7 percent over the prior year. The city recorded approximately$4.0 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, 2019, amounts to $242,740,818 (net of accumulated depreciation). In addition to machinery, equipment and vehicles, the 39 City of Tigard, Oregon Management's Discussion and Analysis capital assets include the sanitary sewer collection system, stormwater, and water systems. Total decrease in the city's investment in business-type activities capital assets was $3,623,820 or 1.6 percent. This decrease is due to expenditures on capital assets being lower than the overall depreciation expense, leading to a decrease in net capital assets. Capital Assets, net of depreciation Governmental Business-Type Total Activities Activities 2019 2018 2019 2018 2019 2018 Land $ 26,380,089 $ 26,009,224 $ 11,975,910 $ 11,975,910 $ 38,355,999 $ 37,985,134 Construction in progress 6,140,084 7,520,815 1,689,824 2,073,062 7,829,908 9,593,877 Buildings and building improvements 13,224,286 13,878,881 74,834,822 76,086,458 88,059,108 89,965,339 Land improvements 7,604,041 1,991,594 7,505,761 7,505,761 15,109,802 9,497,355 Sewer system - - 18,651,593 18,964,253 18,651,593 18,964,253 Stormwater system - - 12,374,258 12,255,567 12,374,258 12,255,567 Water system - - 113,087,699 115,419,467 113,087,699 115,419,467 Machinery and equipment 279,540 339,249 2,046,019 1,734,309 2,325,559 2,073,558 Autos and trucks 1,225,357 1,036,672 574,932 349,851 1,800,289 1,386,523 Office equipment 2,092,324 1,348,511 - - 2,092,324 1,348,511 Infrastructure 174,603,573 172,408,557 - - 174,603,573 172,408,557 Total Capital Assets $ 231,549,294 $ 224,533,503 $ 242,740,818 $ 246,364,638 $ 474,290,112 $ 470,898,141 The following chart indicates the city's capital assets as of June 30, 2019. Additional information on the city's capital assets can be found in Note 5. Capital Assets in the notes to the basic financial statements of this report. Total Capital Assets Land Construction in g 1% progress 1.7% Buildings and building Infrastructure improvements 36.896 18.6% Office equipment 0.4% Land improvements Autos and trucks 3.296 0.4% Sewer system Storm drainage 3.9% Machinery and_ Water system system equipment 2.6% 0.5% 23.8% 40 City of Tigard, Oregon Management's Discussion and Analysis Debt Outstanding As of year-end, the city had total debt outstanding of $149,654,545. Of this amount $16,094,594 is general obligation and full faith and credit bonds; $131,055,590 represents water revenue bonds; $1,695,942 represents a note payable; $28,419 represents special assessment bonded debt or local improvement district bonds; and $780,000 for urban renewal bank loan payable. 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 $5,377,931 or approximately 3.5 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 $780,000 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 $1,695,942 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 $322 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, 2019. Additional information on the city's debt can be found in Note 6. Long-Term Debt and Other Debt in the notes to the basic financial statements of this report. Governmental Activities Business-Type Activities Total 2019 2018 2019 2018 2019 2018 General obligation $ 16,094,594 $ 18,419,297 $ - $ - $ 16,094,594 $ 18,419,297 Local improvement 28,419 124,219 - - 28,419 124,219 Bank loan payable 780,000 910,000 - - 780,000 910,000 Note payable - - 1,695,942 1,803,034 1,695,942 1,803,034 Revenue bonds - - 131,055,590 133,775,926 131,055,590 133,775,926 Total Outstanding Debt $ 16,903,013 $ 19,453,516 $ 132,751,532 $ 135,578,960 $ 149,654,545 $ 155,032,476 41 City of Tigard, Oregon Management's Discussion and Analysis Total Outstanding Long-Term Debt Bank loan General obligation payable 10.8%_ 0.5% N\ Local improvement - 0.0% Note payable 1.1% Revenue bonds 87.6% 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 2020: • The unemployment rate for the City of Tigard was 3.4 percent at the end of the fiscal year, June 30, 2019. This is less than the State of Oregon rate and the national average of 4.0 percent for June 2019. • Property tax revenues are the single largest sources of revenue in the General Fund and it accounts for 52 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 4.1 percent based on prior year's modest growth in assessed values and anticipated development. • 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, 2019, there were 2,713 businesses licensed in the city as compared to 2, 795 a year ago. Business license revenues are highly sensitive to economic conditions. With the planned economic development in urban renewal, the city projects an increase in business licenses, but any increase will be gradual over time. 42 City of Tigard, Oregon Management's Discussion and Analysis • 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 2020. Clean Water Services sets rates for sanitary sewer and storm water management (SWM). Fiscal year 2020 budget includes minor increases for sanitary sewer and stormwater management rates. All of these factors were considered in preparing the city's budget for fiscal year 2019-2020. The current forecast shows that in the short-term the city's financial condition is stable in most funds. The fiscal year 2020 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 43 No content appears on this page by design. 44 Basic Financial Section 45 46 CITY OF TIGARD,OREGON STATEMENT OF NET POSITION June 30,2019 Governmental Business-Type ASSETS Activities Activities Total Cash and investments $ 35,946,503 $ 46,057,770 $ 82,004,273 Accounts receivable,net 5,502,309 5,954,358 11,456,667 Property taxes receivable 316,677 - 316,677 Assessment liens receivable 263,308 - 263,308 Prepaids 279,564 - 279,564 Inventory 16,105 276,170 292,275 Investment in joint venture - 1,005,705 1,005,705 Property held for resale - 445,042 445,042 Restricted cash and investments 53,410,728 21,564,332 74,975,060 Net other post employment benefit asset 64,649 - 64,649 Capital assets: Land and construction in process 32,520,173 13,665,734 46,185,907 Other capital assets(net of accumulated depreciation) 199,029,121 229,075,084 428,104,205 Total assets 327,349,137 318,044,195 645,393,332 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pension 4,133,593 - 4,133,593 Deferred outflows related to OPEB 94,098 9,191 103,289 Total deferred outflows 4,227,691 9,191 4,236,882 LIABILITIES Accounts payable and accrued liabilities 3,304,152 1,669,056 4,973,208 Deposits 2,499,227 42,157 2,541,384 Due to other entities/agencies 684,897 - 684,897 Internal balances 102,320 (102,320) - Unearned revenue 66,500 - 66,500 Accrued interest payable 72,080 2,543,751 2,615,831 Due within one year: Notes payable - 110,305 110,305 Bonds payable 2,408,526 2,800,946 5,209,472 Accrued compensated absences 1,218,300 105,120 1,323,420 Bank loan payable 780,000 - 780,000 Special assessment bonded debt with government commitment 28,419 - 28,419 Due in more than one year: Notes payable - 1,585,637 1,585,637 Bonds payable 13,686,068 128,254,644 141,940,712 Accrued compensated absences 50,762 3,564 54,326 Net other post employment benefit liability 1,161,160 107,103 1,268,263 Net pension liability 11,107,323 - 11,107,323 Total liabilities 37,169,734 137,119,963 174,289,697 DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pension 880,202 - 880,202 Deferred inflows related to OPEB 330,211 30,893 361,104 Total deferred inflows 1,210,413 30,893 1,241,306 NET POSITION Net investment in capital assets 216,080,286 110,542,303 326,622,589 Restricted for: Transportation construction,maintenance and utility undergrounding 26,807,603 - 26,807,603 Park development and improvements 1,163,893 - 1,163,893 Tourism 519,802 - 519,802 Water system construction and improvements - 12,903,512 12,903,512 Debt service 2,501,277 7,140,649 9,641,926 Building development plan review and inspection 8,850,454 - 8,850,454 Library capital improvements 590,078 - 590,078 Urban development and improvements 147,164 - 147,164 Law enforcement equipment 327,964 - 327,964 Unrestricted 36,208,160 50,316,066 86,524,226 Total net position $ 293,196,681 $ 180,902,530 $ 474,099,211 The accompanying notes are an integral part of the basic financial statements. 47 CITY OF TIGARD,OREGON STATEMENT OF ACTIVITIES for the year ended June 30,2019 Program Revenues Charges Operating for Grants and Functions/Programs Expenses Services Contributions Governmental activities: Community services $ 23,370,174 $ 1,628,237 $ 4,663,921 Public works 12,129,476 4,797,891 4,892,643 Community development 5,146,891 6,432,190 - Policy and administration 3,688,137 345,505 37,727 Interest on long-term debt 771,834 - - Total governmental activities 45,106,512 13,203,823 9,594,291 Business-type activities: Sewer 3,128,483 3,389,281 - Stormwater 3,261,312 3,812,133 - Water 17,223,333 23,751,073 - Total business-type activities 23,613,128 30,952,487 - Total $ 68,719,640 $ 44,156,310 $ 9,594,291 The accompanying notes are an integral part of the basic financial statements. 48 Net(Expense)Revenue and Changes in Net Position- Primary Government Capital Grants and Governmental Business-type Contributions Activities Activities Total $ 832,245 $ (16,245,771) $ - $ (16,245,771) 11,206,928 8,767,986 - 8,767,986 229,097 1,514,396 - 1,514,396 - (3,304,905) - (3,304,905) - (771,834) - (771,834) 12,268,270 (10,040,128) - (10,040,128) 529,743 - 790,541 790,541 633,876 - 1,184,697 1,184,697 2,121,758 - 8,649,498 8,649,498 3,285,377 - 10,624,736 10,624,736 $ 15,553,647 (10,040,128) 10,624,736 584,608 General Revenues: Property taxes,levied for general purposes 16,700,604 - 16,700,604 Property taxes,levied for debt service 2,400,939 - 2,400,939 Franchise fees 6,211,736 - 6,211,736 Unrestricted intergovernmental revenues 2,522,428 - 2,522,428 Interest earnings 2,416,827 1,606,834 4,023,661 Miscellaneous 453,435 652,421 1,105,856 Total general revenues 30,705,969 2,259,255 32,965,224 Transfers between Governmental and Business-type Activites 460,325 (460,325) - Change in net position 21,126,166 12,423,666 33,549,832 Net position,beginning 272,070,515 168,478,864 440,549,379 Net position,ending $ 293,196,681 $ 180,902,530 $ 474,099,211 49 CITY OF TIGARD,OREGON GOVERNMENTAL FUNDS-BALANCE SHEET June 30,2019 Major Capital Project Funds Transportation Transportation Capital Other Total General Development Parks SDC Improvement Governmental Governmental Fund Tax Fund Fund Fund Funds Funds ASSETS Cash and cash equivalents $ 24,204,432 $ - $ - $ - $ 4,504,827 $ 28,709,259 Accounts receivable 2,801,445 6,189 5,625 1,264,641 1,370,150 5,448,050 Property taxes receivable 268,845 - - - 47,832 316,677 Assessment liens receivable - 3,413 - - 259,895 263,308 Interest receivable 26,227 - - - 7,574 33,801 Prepaids 225,974 - - - 17,560 243,534 Restricted cash and cash equivalents - 11,601,412 10,793,291 588,179 30,427,846 53,410,728 Total assets $ 27,526,923 $ 11,611,014 $ 10,798,916 $ 1,852,820 $ 36,635,684 $ 88,425,357 LIABILITIES Accounts payable and accrued liabilities $ 1,361,046 $ - $ - $ 108,698 $ 1,092,704 $ 2,562,448 Deposits 1,456,965 - - - 999,600 2,456,565 Due to other entities/agencies 483,362 - - - 201,535 684,897 Unearned revenue - - - - 50,000 50,000 Total liabilities 3,301,373 - - 108,698 2,343,839 5,753,910 DEFERRED INFLOWS OF RESOURCES Resources not yet available: Property taxes 228,475 - - - 33,119 261,594 Municipal court receivable 525,452 - - - - 525,452 Transportation refund credits - - - - 23,295 23,295 Grant receivable - - - 910,132 - 910,132 Special assessment liens - 3,413 - - 330,347 333,760 Franchise fees 124,308 - - - - 124,308 Total deferred inflows of resources 878,235 3,413 - 910,132 386,761 2,178,541 FUND BALANCES Nonspendable: Prepaids 225,974 - - - 17,560 243,534 Restricted for: Street maintenance and improvements - 11,607,601 - 833,990 13,916,463 26,358,054 Tourism - - - - 519,802 519,802 Debt service - - - - 2,208,263 2,208,263 Park development and improvements - - 10,798,916 - 1,163,893 11,962,809 Underground utilities - - - - 449,549 449,549 Building inspection - - - - 8,850,454 8,850,454 Police services - - - - 327,964 327,964 Library improvements - - - - 590,078 590,078 Urban development and improvements - - - - 147,164 147,164 Committed for: Street maintenance and improvements - - - - 2,287,747 2,287,747 Urban forestry - - - - 1,037,488 1,037,488 Assigned to: City facilities - - - - 929,921 929,921 Park and recreation - - - - 1,458,738 1,458,738 Unassigned 23,121,341 - - - - 23,121,341 Total fund balances 23,347,315 11,607,601 10,798,916 833,990 33,905,084 80,492,906 Total liabilities,deferred inflows of resources and fund balances $ 27,526,923 $ 11,611,014 $ 10,798,916 $ 1,852,820 $ 36,635,684 $ 88,425,357 The accompanying notes are an integral part of the basic financial statements. 50 CITY OF TIGARD,OREGON RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION GOVERNMENTAL FUNDS June 30,2019 Fund Balances-Governmental Funds $ 80,492,906 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 $ 340,369,748 Less accumulated depreciation (108,820,454) 231,549,294 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 (11,107,323) Deferred outflows of resources related to pensions and OPEB 4,190,919 Deferred inflows of resources related to pensions and OPEB (1,086,819) (8,003,223) 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 261,594 Franchise fees earned but not available 124,308 Municipal court receivable 525,452 Grant receivable 910,132 Transportation refund credits 23,295 Assessment liens 333,760 2,178,541 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. 5,555,705 Accrued compensated absences are not due and payable in the current period and therefore are not (831,114) 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 (16,094,594) Loans payable (780,000) Special assessment debt bonded with government commitment (28,419) Internal loans (102,320) Accrued interest payable,not due and payable in the current period (72,080) Net other post employment benefit(OPEB)asset 64,649 Net other post employment benefit(OPEB) liability (732,664) Net Position of Governmental Activities $ 293,196,681 The accompanying notes are an integral part of the basic financial statements. 51 CITY OF TIGARD,OREGON GOVERNMENTAL FUNDS- STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE for the year ended June 30,2019 Major Capital Project Funds Transportation Transportation Capital Other Total General Development Parks SDC Improvement Governmental Governmental Fund Tax Fund Fund Fund Funds Funds REVENUES Taxes $ 16,716,747 $ - $ - $ - $ 9,420,638 $ 26,137,385 Franchise fees 6,218,353 - - - - 6,218,353 Special assessments - - - - 59,999 59,999 Licenses and permits 1,290,733 - - - 3,887,323 5,178,056 Intergovernmental revenues 7,219,903 - - 1,055,380 1,223,227 9,498,510 Charges for services 264,272 - - 32,831 4,351,293 4,648,396 System development charges - 2,043,589 1,495,466 - 701,855 4,240,910 Fines and forfeitures 682,647 - - - 160,453 843,100 Rental revenues - - - - 107,371 107,371 Interest earnings 823,407 339,322 291,559 4,051 885,355 2,343,694 Miscellaneous revenues 53,281 - - 919,396 204,181 1,176,858 Total revenues 33,269,343 2,382,911 1,787,025 2,011,658 21,001,695 60,452,632 EXPENDITURES Current operating: Community services 21,952,061 - - - 99,470 22,051,531 Public works - - - - 6,105,157 6,105,157 Community development 3,317,805 - - - 1,954,370 5,272,175 Policy and administration 993,346 - - - - 993,346 Debt service: Principal - - - - 2,530,800 2,530,800 Interest - - - - 799,646 799,646 Capital outlay - - - 4,747,819 6,339,699 11,087,518 Total expenditures 26,263,212 - - 4,747,819 17,829,142 48,840,173 Excess of revenues over expenditures 7,006,131 2,382,911 1,787,025 (2,736,161) 3,172,553 11,612,459 OTHER FINANCING SOURCES(USES) Transfer in 237,070 - - 2,973,271 5,598,179 8,808,520 Interfund loan (183,273) - - - - (183,273) Transfer out (3,119,799) (2,346,808) (1,118,678) - (3,367,615) (9,952,900) Debt proceeds - - - - 183,273 183,273 Total other financing sources(uses) (3,066,002) (2,346,808) (1,118,678) 2,973,271 2,413,837 (1,144,380) Net change in fund balances 3,940,129 36,103 668,347 237,110 5,586,390 10,468,079 Fund balances-beginning of the year 19,407,186 11,571,498 10,130,569 596,880 28,318,694 70,024,827 Fund balances-end of year $ 23,347,315 $ 11,607,601 $ 10,798,916 $ 833,990 $ 33,905,084 $ 80,492,906 The accompanying notes are an integral part of the basic financial statements. 52 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 30,2019 Net change in fund balances-Governmental Funds $ 10,468,079 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 8,907,102 Current year depreciation expense (5,351,980) Contributed capital 4,002,161 Loss on disposal of capital assets (541,491) Proceeds from disposal of capital assets 26,378 7,042,170 Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds Change in deferred inflows of resources-property taxes (537,192) Change in franchise fees (6,617) Change in municipal court receivable 26,377 Change in grants receivable (162,229) Change in assessment liens (59,999) (739,660) 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 2,530,800 Amortization of premium on long-term debt 19,703 2,550,503 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: Change in accrued interest payable 8,109 Change in compensated absences 262,616 Pension expense (1,034,811) OPEB expense 169,492 (594,594) 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 2,399,668 Change in Net Position of Governmental Activities $ 21,126,166 The accompanying notes are an integral part of the basic financial statements. 53 CITY OF TIGARD,OREGON PROPRIETARY FUNDS STATEMENT OF NET POSITION June 30,2019 Business-type Activities- Governmental Enterprise Funds Activities- Sanitary Internal Sewer Stormwater Water Totals Service Funds ASSETS Current assets: Cash and cash equivalents $ 5,675,507 $ 8,817,620 $ 31,564,643 $ 46,057,770 $ 7,237,244 Accounts receivable 1,777,680 570,332 3,606,346 5,954,358 20,458 Advances to other funds-Interfund loan 102,320 - - 102,320 - Prepaids - - - - 36,030 Property held for resale 185,021 260,021 - 445,042 - Inventory 8,665 8,665 258,840 276,170 16,105 Total current assets 7,749,193 9,656,638 35,429,829 52,835,660 7,309,837 Noncurrent assets: Restricted cash and cash equivalents - - 21,564,332 21,564,332 - Investment in joint venture - - 1,005,705 1,005,705 - Capital assets: Land and construction in process 645,779 210,447 12,809,508 13,665,734 - Other capital assets(net of accumulated depreciation) 19,184,279 13,285,077 196,605,728 229,075,084 - Totalnoncurrentassets 19,830,058 13,495,524 231,985,273 265,310,855 - Total assets 27,579,251 23,152,162 267,415,102 318,146,515 7,309,837 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to OPEB 2,169 3,098 3,924 9,191 36,772 LIABILITIES Current liabilities: Accounts payable and accrued liabilities 1,166,287 315,402 187,367 1,669,056 741,702 Unearned revenue - - - - 16,500 Deposits - 8,833 33,324 42,157 42,662 Accrued interest payable - - 2,543,751 2,543,751 - Accrued compensated absences 26,515 31,398 47,207 105,120 421,306 Current portion of bonds payable - - 2,800,946 2,800,946 - Current portion of note payable - - 110,305 110,305 - Total current liabilities 1,192,802 355,633 5,722,900 7,271,335 1,222,170 Noncurrent liabilities: Accrued compensated absences 899 1,065 1,600 3,564 16,642 Note payable-long-term portion - - 1,585,637 1,585,637 - Bonds payable-long-term portion - - 128,254,644 128,254,644 Net OPEB liability 25,270 36,102 45,731 107,103 428,498 Total noncurrent liabilities 26,169 37,167 129,887,612 129,950,948 445,140 Total liabilities 1,218,971 392,800 135,610,512 137,222,283 1,667,310 DEFERRED INFLOWS OF RESOURCES Deferred inflows related to OPEB 7,289 10,413 13,191 30,893 123,594 NET POSITION Net investment in capital assets 19,830,058 13,495,524 77,216,721 110,542,303 - Restricted for capital projects - - 12,903,512 12,903,512 - Restricted for debt service - - 7,140,649 7,140,649 - Unrestricted 6,525,102 9,256,523 34,534,441 50,316,066 5,555,705 Total net position $ 26,355,160 $ 22,752,047 $ 131,795,323 $ 180,902,530 $ 5,555,705 The accompanying notes are an integral part of the basic financial statements. 54 CITY OF TIGARD,OREGON PROPRIETARY FUNDS STATEMENT OF REVENUES,EXPENSES,AND CHANGES IN FUND NET POSITION for the year ended June 30,2019 Business-type Activities- Governmental Enterprise Funds Activities- Sanitary Internal Sewer Stormwater Water Totals Service Funds OPERATING REVENUES Charges for services $ 3,389,281 $ 3,812,133 $ 23,751,073 $ 30,952,487 $ 16,518,155 Miscellaneous revenues 138,165 8,909 505,346 652,420 303,888 Total operating revenues 3,527,446 3,821,042 24,256,419 31,604,907 16,822,043 OPERATING EXPENSES Salaries and wages 564,963 866,487 1,005,718 2,437,168 9,331,344 Contracted services 36,668 290,355 2,139,641 2,466,664 1,397,653 General,administrative and other 1,727,444 1,517,378 4,572,968 7,817,790 5,371,214 Depreciation 799,408 587,092 3,971,175 5,357,675 - Total operating expenses 3,128,483 3,261,312 11,689,502 18,079,297 16,100,211 Operating income(loss) 398,963 559,730 12,566,917 13,525,610 721,832 NON-OPERATING REVENUES(EXPENSES) Interest earnings 163,890 207,253 1,235,691 1,606,834 73,132 Interest expense - - (5,525,391) (5,525,391) - Loss on investment in joint venture - - (8,440) (8,440) - Total non-operating revenue(expense) 163,890 207,253 (4,298,140) (3,926,997) 73,132 Net income(loss)before contributions and transfers 562,853 766,983 8,268,777 9,598,613 794,964 System development revenue 126,456 18,149 1,870,435 2,015,040 - Capital contributions 403,287 615,727 251,323 1,270,337 - Transfers in 42,860 84,544 58,751 186,155 1,604,704 Transfers out (164,457) (212,623) (269,399) (646,479) - Change in net position 970,999 1,272,780 10,179,887 12,423,666 2,399,668 Net position--beginning of year 25,384,161 21,479,267 121,615,436 168,478,864 3,156,037 Net position--end of year $ 26,355,160 $ 22,752,047 $ 131,795,323 $ 180,902,530 $ 5,555,705 The accompanying notes are an integral part of the basic financial statements. 55 CITY OF TIGARD,OREGON PROPRIETARY FUNDS STATEMENT OF CASH FLOWS for the year ended June 30,2019 Business-type Activities- Governmental Enterprise Funds Activities- Sanitary Internal Sewer Stormwater Water Totals Service Funds CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 14,278,469 $ 4,507,267 $ 23,669,472 $ 42,455,208 $ 16,616,492 Payments to suppliers (10,317,055) (2,313,269) (7,366,839) (19,997,163) (6,418,729) Payments to employees (1,762,622) (867,220) (1,017,057) (3,646,899) (8,967,052) Other receipts 138,165 8,909 505,346 652,420 303,018 Net cash provided(used)by operating activities 2,336,957 1,335,687 15,790,922 19,463,566 1,533,729 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers to other funds (164,457) (212,623) (269,399) (646,479) - Transfers from other funds - - 58,751 58,751 1,604,704 Net cash(used)by noncapital financing activities (164,457) (212,623) (210,648) (587,728) 1,604,704 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES System development revenue 126,456 18,149 1,870,435 2,015,040 - Principal payments - - (2,292,092) (2,292,092) - Interest payments - - (6,098,040) (6,098,040) - Transfers in for capital assets 42,860 84,544 - 127,404 - Acquisition of capital assets (465,552) (564,353) (183,857) (1,213,762) - Net cash(used)by capital and related financing activities (296,236) (461,660) (6,703,554) (7,461,450) - CASH FLOWS FROM INVESTING ACTIVITIES Investment in joint venture - - (263,906) (263,906) - Interest earnings 163,890 207,253 1,235,691 1,606,834 73,132 Net cash(used)by investing activities 163,890 207,253 971,785 1,342,928 73,132 Net increase(decrease)in cash and investments 2,040,154 868,657 9,848,505 12,757,316 3,211,565 Cash and investments--beginning of the year 3,635,353 7,948,963 43,280,470 54,864,786 4,025,679 Cash and investments--end of the year $ 5,675,507 $ 8,817,620 $ 53,128,975 $ 67,622,102 $ 7,237,244 RECONCILIATION OF OPERATING INCOME(LOSS)TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income(loss) $ 398,963 $ 559,730 $ 12,566,917 $ 13,525,610 $ 721,832 Adjustments to reconcile operating income(loss) to net cash provided by operating activities: Cash flows reported in other categories: Depreciation expense 799,408 587,092 3,971,175 5,357,675 - Change in assets and liabilities: Receivables 938,751 (31,682) (82,401) 824,668 50,966 Prepaid expenses - 833 1,250 2,083 118,629 Inventory 2,692 2,692 (62,656) (57,272) 11,496 Accounts payable and accrued liabilities 195,653 217,755 (592,827) (179,419) 223,853 Unearned revenue - - - - 42,662 Accrued compensated absences 1,816 270 1,648 3,734 109,593 Deposits - - 803 803 - OPEB liability (326) (1,003) (12,987) (14,316) 254,698 Net cash provided(used)by operating activities $ 2,336,957 $ 1,335,687 $ 15,790,922 $ 19,463,566 $ 1,533,729 Non-cash capital and related financing activities: Developer contributed sewer,stormwater and water lines $ 403,287 $ 615,727 $ 251,323 $ 1,270,337 - The accompanying notes are an integral part of the basic financial statements. 56 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). 57 58 CITY OF TIGARD,OREGON STATEMENT OF FIDUCIARY NET POSITION PENSION TRUST June 30,2019 ASSETS Investments: Restricted stable value fund $ 16,966,677 Restricted corporate bonds 1,011,555 Restricted corporate stocks 12,526,333 Total assets 30,504,565 NET POSITION Restricted for pension benefits $ 30,504,565 The accompanying notes are an integral part of the basic financial statements. 59 CITY OF TIGARD,OREGON STATEMENT OF CHANGES IN FIDUCIARY NET POSITION PENSION TRUST for the year ended June 30,2019 ADDITIONS Contributions-employer $ 1,674,245 Contributions-plan members 167,532 Investment income 1,852,097 Total additions 3,693,874 DEDUCTIONS Benefit payments and withdrawals 1,451,670 Administrative expenses 37,432 Total deductions 1,489,102 Change in net position 2,204,772 Net position of assets held in trust for pension benefits: Beginning of year 28,299,793 End of year $ 30,504,565 The accompanying notes are an integral part of the basic financial statements. 60 Notes to Basic Financial Statements 61 62 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 units included in this financial report. Blended Component Unit The Tigard Town Center Development Agency (TCDA), formerly the City Center Development Agency, oversees and administers the city's two urban renewal areas: the City Center Urban Renewal Area (CCURA) and the Tigard Triangle Urban Renewal Area (TTURA). Voters authorized the CCURA in 2006. The plan's duration is 20 years with maximum indebtedness of $22 million. In May 2017 the voters approved the creation of a second urban renewal area, the TTURA, for 35 years with maximum indebtedness of$188 million. The TTURA and the CCURA were created under the provisions of the Oregon Revised Statutes, Chapter 457 (ORS 457). The City of Tigard Council members serve as the TCDA's governing body. The activities of the TCDA are included in the city's financial statements as a blended component unit. The CCURA and the TTURA are part of a legally separate entity, which is governed by a board comprised of the City Council members, as stipulated in the Tigard Municipal Code. The Council has the ability to impose its will on the TCDA as determined based on budget adoption, taxing authority, and funding. The purpose of the TCDA is to undertake urban renewal projects and activities pursuant to the city's adopted urban renewal plans. The financial results of the TCDA are reported herein as debt service and capital projects funds. The TCDA prepared a separate component unit financial report, which is published on the city's website www.tigard-or.gov or a copy can be obtained from the city's administrative offices at 13125 SW Hall Blvd, Tigard, Oregon 97223. 63 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 an ownership position in the Willamette Intake Facility (WIF) for the treatment and distribution of water from the Willamette River. The WIF is a joint venture of the city and the Tualatin Valley Water District and the cities of Wilsonville, Sherwood, Hillsboro and Beaverton. The financial statements of the WIF may be obtained from Tualatin Valley Water District, Finance Department, 1850 SW 170th Avenue, Beaverton, OR 97003. For more information on the WIF joint venture see footnote 14. Lake Oswego/Tigard Water Partnership The city has entered into an intergovernmental agreement (IGA) with the City of Lake Oswego for the Lake Oswego/Tigard Water Partnership (Partnership). The 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. For more information on the Partnership see footnote 15. 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. 64 City of Tigard, Oregon Notes to Basic Financial Statements 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 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 Transportation Development Tax, Parks SDC, and Transportation CIP 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 65 City of Tigard, Oregon Notes to Basic Financial Statements of state and local governments. The city has recorded capital and certain other long-term assets 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 revenues 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 66 City of Tigard, Oregon Notes to Basic Financial Statements soon as it is earned regardless of its availability. Thus, the liability created on the governmental fund balance sheet for unavailable revenue is eliminated. 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. 67 City of Tigard, Oregon Notes to Basic Financial Statements New Accounting Pronouncements and Accounting Standards During the fiscal year ended June 30, 2019, the city implemented the following GASB pronouncements: GASB Statement No. 83, Certain Asset Retirement Obligations Issued November 2016, this statement addresses accounting and financial reporting for certain asset retirement obligations. This statement did not have a significant impact on the city's financial statements. GASB Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements The primary objective of this Statement is to improve the information that is disclosed in notes to government financial statements related to debt, including direct borrowings and direct placements. It also clarifies which liabilities governments should include when disclosing information related to debt. This Statement defines debt for purposes of disclosure in notes to financial statements as a liability that arises from a contractual obligation to pay cash (or other assets that may be used in lieu of cash) in one or more payments to settle an amount that is fixed at the date the contractual obligation is established. This Statement requires that additional essential information related to debt be disclosed in notes to financial statements, including unused lines of credit; assets pledged as collateral for the debt; and terms specified in debt agreements related to significant events of default with finance-related consequences, significant termination events with finance-related consequences, and significant subjective acceleration clauses. The city implemented this standard for fiscal year ending June 30, 2019. See footnote 6 for more information. The following pronouncements have been issued by the Governmental Accounting Standards Board (GASB) but not yet implemented by the city: 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. 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. 68 City of Tigard, Oregon Notes to Basic Financial Statements GASB Statement No. 90, Majority Equity Interests Issued August 2018, the primary objective of this statement is to improve the consistency and comparability of reporting a government's majority equity interest in a legally separate organization; and to improve the relevance of financial statement information for certain component units. GASB Statement No. 90 will be effective for the city for fiscal year ending June 30, 2020. 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. 69 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. 70 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, Water Fund, and Urban Renewal Agency Capital Improvement Fund. Deposits are held by the city until the obligations for the projects have been completed 71 City of Tigard, Oregon Notes to Basic Financial Statements 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 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. 72 City of Tigard, Oregon Notes to Basic Financial Statements 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 liability 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 in the following categories: Nonspendable for resources that 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. 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 73 City of Tigard, Oregon Notes to Basic Financial Statements 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. Net Position 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. 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. 74 City of Tigard, Oregon Notes to Basic Financial Statements 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. 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. Transportation Capital Improvement Project Fund — This capital project fund accounts for capital improvement projects funded with transportation revenues; including Gas Tax, Traffic Impact Fees and Transportation Development Tax. 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 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. 75 City of Tigard, Oregon Notes to Basic Financial Statements 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. 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 76 City of Tigard, Oregon Notes to Basic Financial Statements 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. 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, 2019: Primary Fiduciary Type Government Activities Total Deposits with financial institutions $ 9,989,139 $ - $ 9,989,139 Money markets 6,061,813 - 6,061,813 Cash deposits 16,050,952 - 16,050,952 Cash with fiscal agent 48,940 - 48,940 Petty cash/cash on hand 9,692 - 9,692 Total cash 16,109,584 - 16,109,584 State Investment Pool (LGIP) 128,857,077 - 128,857,077 U.S. Agencies 11,512,850 - 11,512,850 Asset allocation/stable value fund - 16,966,677 16,966,677 Corporate bonds 499,820 1,011,555 1,511,375 Corporate stocks - 12,526,333 12,526,333 Total investments 140,869,747 30,504,565 171,374,312 Total cash and investments $ 156,979,331 $ 30,504,565 $187,483,896 77 City of Tigard, Oregon Notes to Basic Financial Statements Governmental Business Type Fiduciary Total Activities Activities Activities Cash and investments $ 35,946,503 $ 46,057,771 $ - $ 82,004,274 Restricted cash and investments 53,410,725 21,564,332 30,504,565 105,479,622 Total cash and investments $ 89,357,228 $ 67,622,103 $ 30,504,565 $ 187,483,896 Deposits Custodial Credit Risk. There is a risk that, in the event of a bank failure, the city's deposits may not be returned. The city's deposit policy is in accordance with Oregon Revised Statutes (ORS) 295. Cash with financial institutions include bank demand deposits and bank money market accounts. The combined total book balance at June 30, 2019 was $16,050,952 and the total bank balance is $15,872,379. Of these deposits, $500,000 was covered by federal depository insurance and $15,372,379 was collateralized in accordance with 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. In addition, the city's 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 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 investment policy, which adheres to State of Oregon law, states bank deposits with any one qualified institution shall not exceed 20 percent of the portfolio. 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 78 City of Tigard, Oregon Notes to Basic Financial Statements 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 fair value of the city's position is the same as the value of the city's pool shares. 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. At June 30, 2019, the city's fair value in the LGIP was $128,857,077. 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, 2019: Fair Value Fair Value Measurement Primary Government Amortized Cost Not Local Government Investment Pool (LGIP) $ 128,857,077 Measured at Fair Value U.S. Agencies 11,512,850 Level 2 Corporate Bonds 499,820 Level 2 Total Primary Government investments 140,869,747 Fiduciary Activities Asset allocation/stable value fund 16,966,677 Level 2 Corporate bonds 1,011,555 Level 2 Corporate stocks 12,526,333 Level 1 Total Fiduciary Activities investments 30,504,565 Total Investments $ 171,374,312 79 City of Tigard, Oregon Notes to Basic Financial Statements 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, 2019 the total restricted investments in the pension plan were $30,504,565. 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. Interest rate risk. Interest rate risk is the risk that the value of a debt security may fall when interest rates rise. In general, the market price of debt securities with longer maturities will go up or down in response to changes in interest rates more than the market price of shorter- term securities. Additionally, securities issued or guaranteed by the U.S. Government, its agencies, instrumentalities and sponsored enterprises have historically involved little risk of loss of principal if held to maturity. However, due to fluctuations in interest rates, the market value of such securities may vary prior to maturity. 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. 80 City of Tigard, Oregon Notes to Basic Financial Statements At June 30, 2019, the city had the following investments and maturities at fair value: Weighted Average Maturity Risk (in Investment Type Fair Value Concentration months) Primary government Local Government Investment Pool (LGIP) * $ 128,857,077 75.2% < 1 U.S. Agencies 11,512,850 6.7% 1.89 Corporate Bonds 499,820 0.3% < 1 Total primary government investments 140,869,747 82.2% Fiduciary activities Asset allocation/stable value fund 16,966,677 9.9% N/A Corporate bonds 1,011,555 0.6% ** Corporate stocks 12,526,333 7.3% N/A Total fiduciary activities investments 30,504,565 17.8% Total Investments $ 171,374,312 100.0% 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. ** Maturity information not available for Fiduciary Activities. 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: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. 81 City of Tigard, Oregon Notes to Basic Financial Statements At June 30, 2019 the city's investments were rated as follows: of Fair Investment Type Moody's S & P Fitch Fair Value Value Primary Government State Investment Pool (LGIP) N/R N/R N/R $ 128,857,077 75.2% Corporate Bonds N/R AA A+ 499,820 0.3% US Agency N/R N/R N/R 498,335 0.3% US Agency Aaa AA+ AAA 501,210 0.3% US Agency Aaa AA+ N/R 1,000,250 0.6% US Agency N/R AA+ N/R 1,000,180 0.6% US Agency Aaa N/R N/R 1,002,500 0.6% US Agency N/R AA+ N/R 5,001,000 2.8% US Agency Aaa AA+ N/R 2,509,375 1.5% Total Primary Government investments 140,869,747 82.2% Fiduciary Activities Asset allocation/stable value fund 16,966,677 9.9% Corporate bonds 1,011,555 0.6% Corporate stocks 12,526,333 7.3% Total Fiduciary Activities investments 30,504,565 17.8% Total Investments $ 171,374,312 100.0% Rating agency information not available for Fiduciary Activities. 82 City of Tigard, Oregon Notes to Basic Financial Statements 4. Accounts Receivable Accounts receivable as of June 30, 2019 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: Allowance Gross for Doubtful Receivables, Accounts Taxes Assessments Receivables Accounts Net Governmental Activities General $5,117,800 $268,845 $ - $5,386,645 $ (2,290,128) $ 3,096,517 Transportation development tax 6,189 - 3,413 9,602 - 9,602 Parks SDC 5,625 - - 5,625 - 5,625 Transportation capital improvement fund 1,264,641 - - 1,264,641 - 1,264,641 Nonmajor governmental 1,377,724 47,832 259,895 1,685,451 - 1,685,451 Internal service 20,458 - - 20,458 - 20,458 $7,792,437 $316,677 $ 263,308 $8,372,422 $ (2,290,128) $ 6,082,294 Business-Type Activities Sanitary sewer $1,777,680 $ - $ - $1,777,680 $ - $ 1,777,680 Stormwater 570,332 - - 570,332 - 570,332 Water 3,606,346 - - 3,606,346 - 3,606,346 $5,954,358 $ - $ - $5,954,358 $ - $ 5,954,358 Total receivables $12,036,652 Shown on the Statement of Net Positions as: Accounts receivable, net $11,456,667 Property taxes receivable 316,677 Assessment liens receivable 263,308 $12,036,652 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, 2019, $3,053,503 was outstanding for municipal court receivables with a related allowance for doubtful accounts of$2,290,128. 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, 2019, the portion of the assessments receivable balance that represents delinquent accounts is insignificant. 83 City of Tigard, Oregon Notes to Basic Financial Statements 5. Capital Assets Capital asset activity for governmental activities for the year ended June 30, 2019 was as follows: Balances Balances Governmental activities June 30,2018 Additions Deletions Transfers June 30,2019 Non-depreciable: Land $ 26,009,224 $ - $ - $ 370,865 $ 26,380,089 Construction in progress 7,520,815 8,094,942 (541,491) (8,934,182) 6,140,084 Total non-depreciable 33,530,039 8,094,942 (541,491) (8,563,317) 32,520,173 Depreciable: Building and improvements 23,544,033 - - - 23,544,033 Land improvements 9,432,054 - - 6,186,997 15,619,051 Machinery and equipment 2,922,042 73,593 (175,328) - 2,820,306 Autos and trucks 3,096,055 491,307 (142,252) - 3,445,109 Office equipment 3,366,841 1,079,505 - - 4,446,346 Infrastructure 252,428,494 3,169,916 - 2,376,320 257,974,730 Total depreciable 294,789,518 4,814,321 (317,580) 8,563,317 307,849,575 Accumulated depreciation: Building and improvements (9,665,152) (654,595) - - (10,319,747) Land improvements (7,440,460) (574,550) - - (8,015,010) Machinery and equipment (2,582,793) (133,301) 175,328 - (2,540,766) Autos and trucks (2,059,382) (302,622) 142,252 - (2,219,752) Office equipment (2,018,330) (335,692) - - (2,354,022) Infrastructure (80,019,937) (3,351,220) - - (83,371,157) Total accumulated depreciation (103,786,054) (5,351,980) 317,580 - (108,820,454) Net depreciable assets 191,003,464 (537,659) - 8,563,317 199,029,121 Governmental activities capital assets, net $224,533,503 $7,557,283 $(541,4911 $ - $231,549,294 Depreciation expense for governmental activities is charged to functions as follows: Community services $ 314,935 Public works 4,830,477 Community development 7,306 Policy and administration 199,262 Total depreciation for governmental activities $ 5,351,980 84 City of Tigard, Oregon Notes to Basic Financial Statements Capital assets activity for business-type activities for the year ended June 30, 2019, was as follows: Balances Balances Business-type activities June 30,2018 Additions Deletions Transfers June 30,2019 Non-depreciable: Land $ 11,975,910 $ - $ - $ - $ 11,975,910 Construction in progress 2,073,062 410,212 (750,239) (43,211) 1,689,824 Total non-depreciable 14,048,972 410,212 (750,239) (43,211) 13,665,734 Depreciable: Building and improvements 77,323,567 - - - 77,323,567 Land Improvements 7,505,761 - - - 7,505,761 Sewer system 31,475,651 403,287 - - 31,878,938 Stormwater system 21,497,935 615,727 - 43,211 22,156,873 Water system 147,833,207 251,323 - - 148,084,530 Equipment 3,473,237 505,050 - - 3,978,287 Autos and trucks 2,061,631 298,496 (29,991) - 2,330,136 Total depreciable 291,170,989 2,073,883 (29,991) 43,211 293,258,092 Accumulated depreciation: Building and improvements (1,237,109) (1,251,636) - - (2,488,745) Sewer system (12,511,398) (715,947) - - (13,227,345) Stormwater system (9,242,368) (540,247) - - (9,782,615) Water system (32,413,740) (2,583,091) - - (34,996,831) Equipment (1,738,928) (193,340) - - (1,932,268) Autos and trucks (1,711,780) (73,415) 29,991 - (1,755,204) Total accumulated depreciation (58,855,323) (5,357,676) 29,991 - (64,183,008) Net depreciable assets 232,315,666 (3,283,793) - 43,211 229,075,084 Business-type activities capital assets, net $246,364,638 $ (2,873,581) $(750,239) $ - $242,740,818 Depreciation expense for business-type activities is charged to activities as follows: Sanitary sewer $ 799,409 Stormwater 587,092 Water 3,971,175 Total depreciation for business-type activities $ 5,357,676 85 City of Tigard, Oregon Notes to Basic Financial Statements 6. Long-term Debt and Other Debt Governmental Activities Direct Borrowings and Placements 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. The outstanding loan carries an Event of Default clause which allows the lender to exercise any remedy available at law or in equity, with the exception of acceleration. As of June 30, 2019, the balance outstanding on the bank loan was $780,000. Future principal and interest payments on the loan are as follows: Year Ending June 30, Principal Interest Total 2020 $ 780,000 $ 11,681 $ 791,681 General Obligation Bonds and Full Faith and Credit Bonds 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. The outstanding bond carry an Events of Default and Remedies clause which permits the Bank of America to increase the interest rate by three percent above the stated rate of the bonds until such time that the default is remedied. At June 30, 2019 the outstanding balance on the bonds was $825,000. Future principal and interest payments on the bonds are as follows: Year Ending June 30, Principal Interest Total 2020 $ 825,000 $ 35,888 $ 860,888 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, 2019 was $28,419 with principal and interest payments as follows: Year Ending June 30, Principal Interest Total 2020 $ 28,419 $ 1,021 $ 29,440 86 City of Tigard, Oregon Notes to Basic Financial Statements Other Debt 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, 2019 the outstanding balance on the 2011B bonds was $3,335,000. 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, 2019, the outstanding balance on the bonds was $11,805,000 and the balance of the unamortized premium was $129,594. The outstanding bonds carry a Default and Remedies clause which allows owners of ten percent or more of the principal amount of the bonds then outstanding to exercise any remedy available at law or in equity, with the exception of acceleration. 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 2020 $ 1,565,000 $ 631,825 $ 2,196,825 2021 1,625,000 568,625 2,193,625 2022 1,695,000 502,925 2,197,925 2023 1,760,000 434,425 2,194,425 2024 910,000 381,725 1,291,725 2025-2029 5,170,000 1,297,825 6,467,825 2030-2031 2,415,000 173,376 2,588,376 $ 15,140,000 $ 3,990,726 $ 19,130,726 Premium 129,594 Total $ 15,269,594 Business-type Activities Direct Borrowings and Placements 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, 87 City of Tigard, Oregon Notes to Basic Financial Statements 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. Within the note agreement the state, in the event of default, may pursue any or all the following remedies or any other remedies available at law or in equity: • termination of the loan agreement • termination of the state's obligations to make the loan or any disbursement, • repayment of the loan due upon demand, • payment of interest earned by the city on the loan proceeds due upon demand, • acceleration of the loan, • declaration of the city's ineligibility to receive future awards, and • the withholding pursuant to ORS 285A.213(6) and OAR 123-049-0040 of other state funds. At June 30, 2019, the balance on the note payable was $1,695,942. Future debt service requirements are as follows: Year Ending June 30, Principal Interest Total 2020 $ 110,305 $ 50,878 $ 161,183 2021 113,614 47,569 161,183 2022 117,022 44,161 161,183 2023 120,533 40,650 161,183 2024 124,149 37,034 161,183 2025-2029 678,899 127,017 805,916 2030-2032 431,420 25,353 456,773 Total $ 1,695,942 $ 372,662 $ 2,068,604 Other Debt 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 88 City of Tigard, Oregon Notes to Basic Financial Statements from 3.0 percent to 5.0 percent. At June 30, 2019, the balance of the 2012 water revenue bonds was $91,900,000 and the balance of the unamortized premium was $5,105,107. 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, 2019, the balance of the 2015 water revenue bonds was $30,315,000 and the balance of the unamortized premium was $3,735,483. 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 2019 were $16,106,944 as compared to the total debt service of $8,229,750. The computation of water revenue bonds debt coverage is as follows: Gross revenues $ 23,751,073 System Development Charges (SDC) related: SDC Fund interest earnings 343,069 Reimbursement fee receipts 921,379 Improvement fee receipts 949,056 Total SDC-related 2,213,504 Operating expense: Salaries and wages 1,005,720 Contracted services 453,971 Water purchases 1,685,669 General, admin and other 4,498,769 Total operating expenses 7,644,129 Net revenues (including SDCs) 18,320,448 Net revenues (excluding SDCs) $ 16,106,944 Debt service - first lien bonds: 2012 bonds $ 6,563,750 2015 bonds 1,666,000 Total debt service $ 8,229,750 Debt service coverage - first lien bonds (excluding system development charges) 1.96 89 City of Tigard, Oregon Notes to Basic Financial Statements Interest rates on the bonds range from 3 percent to 5 percent on specific maturities. The outstanding bonds carry a Default and Remedies clause which allows owners to exercise any remedy available at law or in equity, with the exception of acceleration. Future maturities of bond principal and premium and interest on the revenue bonds are as follows: Year Ending June 30, Principal Interest Total 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 2,565,000 5,664,550 8,229,550 2024 2,685,000 5,547,175 8,232,175 2025-2029 15,595,000 25,556,550 41,151,550 2030-2034 19,985,000 21,158,775 41,143,775 2035-2039 25,660,000 15,489,750 41,149,750 2040-2044 32,950,000 8,199,500 41,149,500 2045-2046 15,665,000 793,125 16,458,125 122,215,000 $ 99,991,175 $ 222,206,175 Premium 8,840,590 Total $ 131,055,590 90 City of Tigard, Oregon Notes to Basic Financial Statements Long-term debt activity, including compensated absences, for the year ended June 30, 2019 was as follows: Balances June Balances June Due in one 30,2018 Additions Retirements 30,2019 year Governmental activities Direct borrowings and placements Bank loan payable $ 910,000 $ - $ (130,000) $ 780,000 $ 780,000 Bonds payable 1,625,000 - (800,000) 825,000 825,000 Special assessment debt 124,219 - (95,800) 28,419 28,419 Total direct borrowings and placements 2,659,219 - (1,025,800) 1,633,419 1,633,419 Other debt Bonds payable 16,645,000 - (1,505,000) 15,140,000 1,565,000 Total governmental debt 19,304,219 - (2,530,800) 16,773,419 3,198,419 Premium on bonds 149,297 - (19,703) 129,594 18,526 Other long-term liabilities Compensated absences 1,422,054 1,870,095 (2,023,086) 1,269,063 1,218,300 Governmental activities $ 20,726,273 $ 1,870,095 $(4,553,886) $ 18,042,482 $4,416,719 Business-type activities Direct borrowings and placements Note payable $ 1,803,034 $ - $ (107,092) $ 1,695,942 $ 110,305 Other debt Bonds payable 124,400,000 - (2,185,000) 122,215,000 2,275,000 Total business-type debt 126,203,034 - (2,292,092) 123,910,942 2,385,305 Premium on bonds 9,375,925 - (535,335) 8,840,590 525,946 Other long-term liabilities Compensated absences 104,950 158,575 (154,840) 108,685 105,120 Business-type activities $ 126,307,984 $ 158,575 $(2,446,932) $ 124,019,627 $2,490,425 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 urban renewal development projects. Repayment of these transactions occurs in years subsequent to year-end. 91 City of Tigard, Oregon Notes to Basic Financial Statements 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, 2019 are as follows: Net Receivable Fund Payable Fund Amount Elimination Balance General Fund Non major governmental fund $ 838,385 $ (838,385) $ - Sanitary Sewer Fund Nonmajor governmental fund 102,320 - 102,320 $ 940,705 $ (838,385) $ 102,320 Future maturities on the interfund loans are as follows: Interfund Loans Elimination Net Balance Year Ending June 30, Principal Interest Principal Interest Principal Interest 2020 $ - $ 3,932 $ - $ (3,420) $ - $ 512 2021 - 8,972 - (8,460) - 512 2022 - 8,972 - (8,460) - 512 2023 - 8,972 - (8,460) - 512 2024 - 8,972 - (8,460) - 512 2025-2029 287,274 42,640 (236,752) (40,584) 50,522 2,056 2030-2034 448,764 30,736 (396,967) (29,957) 51,797 779 2035-2039 184,023 11,425 (184,023) (11,425) - - 2040 20,643 568 (20,643) (568) - - $ 940,704 $ 125,189 $ (838,385) $ (119,794) $ 102,319 $ 5,395 92 City of Tigard, Oregon Notes to Basic Financial Statements Transfers for fiscal year ended June 30, 2019 are as follows: Transfer To Transfer From Amount Purpose General Nonmajor Governmental $ 237,070 $ 237,070 Unrestricted portion of the city's transient lodging tax Transportation Transportation CIP Development Tax 2,325,863 SDC related capital projects Stormwater 9 Stormwater component of street project Nonmajor Governmental 647,399 Gas tax funding for street projects 2,973,271 Nonmajor Governmental General 2,947,316 Fund park and various other operations Parks SDC 1,003,985 Fund parks capital projects Nonmajor Governmental 1,623,817 Fund parks capital projects Stormwater 23,061 Fund stormwater component of parks capital project 5,598,179 Sanitary Sewer Stormwater 42,860 42,860 Fund sewer component of stormwater project Stormwater Sanitary Sewer 84,544 84,544 Fund stormwater component of sewer project Water General 27,460 Lease payments for water building Sanitary Sewer 13,413 Lease payments for water building Stormwater 17,878 Lease payments for water building 58,751 Funding of public works administration and Internal Service General 145,023 engineering Transportation Development Tax 20,945 Funding for contracting and accounting Parks SDC 114,693 Funding for contracting and accounting Nonmajor Governmental 859,328 Capital project funding contracting and accounting Funding of public works administration and Sanitary Sewer 66,500 engineering Funding of public works administration and Stormwater 128,816 engineering Funding of public works administration and Water 269,399 engineering 1,604,704 $10,599,379 Reconciliation: Transferred to governmental funds from: Sewer Fund $ 66,500 Stormwater Fund 151,885 Water Fund 269,399 Transferred from governmental funds to enterprise funds: From General Fund to Water Fund (27,460) Total transfers per Statement of Activities $460,325 These transfers have been eliminated in the government-wide statement of activities other than the net effect between governmental activities and business-type activities. 93 City of Tigard, Oregon Notes to Basic Financial Statements 8. Post-Employment Benefits Other than Pensions (OPEB) The other postemployment benefits (OPEB) for the city combines two separate plans. The city provides an implicit rate subsidy for retiree health insurance premiums, and a contribution to the State of Oregon's PERS cost-sharing multiple-employer defined health insurance benefit plan. Financial Statement Presentation The city's two OPEB plans are presented in the aggregate on the Statement of Net Position. The amounts on the financial statements relate to the plans as follows: Implicit Rate PERS RHIA Total OPEB Subsidy Plan Plan on Financials Net OPEB Asset $ - $ 64,649 $ 64,649 Deferred Outflows of Resources Differences between expected and actual experience 13,312 - 13,312 Change in proportionate share - 521 521 Contributions After the Measurement Date 59,353 30,103 89,456 Total Deferred Outflows of Resources 72,665 30,624 103,289 Total OPEB Liability 1,268,263 - 1,268,263 Deferred Inflows of Resources Differences between expected and actual experience - 3,664 3,664 Net difference between projected and actual earnings on investment - 13,938 13,938 Change in Proportionate Share - 777 777 Change in Assumptions 328,582 205 328,787 Difference in Earnings - 13,938 13,938 Total Deferred Inflows of Resources 328,582 32,522 361,104 OPEB Expense (Income) 126,316 (6,298) 120,018 (Included in program expenses on Statement of Activities) Implicit Rate Subsidy Plan Description The city's single-employer defined benefit postemployment healthcare plan is administered by Citycounty Insurance Services of Oregon (CIS). Benefit provisions are established through negotiations between the city and representatives of collective bargaining units or through resolutions passed by city council. No assets are accumulated in a trust that meet the criteria in paragraph 4 of Statement 75. 94 City of Tigard, Oregon Notes to Basic Financial Statements The city's postemployment healthcare plan administrator issues a publicly available financial report that includes financial statements and required supplementary information for CIS. This report may be obtained on their website at www.cisoregon.org/About/TrustDocs. Benefits Provided The plan provides eligible retirees and their dependents under age 65 the same health care coverage at the same premium rates as offered to active employees. The retiree is responsible for the premiums. As of the valuation date of July 1, 2018, the following employees were covered by the benefit terms: Inactive employees or beneficiaries receiving benefits 6 Active employees 287 293 Total OPEB Liability, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB The city's total OPEB liability of $1,268,263 was measured as of June 30, 2019, and was determined by an actuarial valuation as of July 1, 2018. For the fiscal year ended June 30, 2019, the city recognized OPEB expense from this plan of $126,316. At June 30, 2019, the city reported deferred outflows of resources and deferred inflows of resources related to this OPEB plan from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual experience $ 13,312 $ - Changes of assumptions - (328,582) Contributions subsequent to the measurement date 59,353 - Total $ 72,665 $ (328,582) Deferred outflows of resources related to OPEB of $59,353 resulting from the city's contributions subsequent to the measurement date will be recognized as a reduction of the total OPEB liability in the year ended June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year ended June 30: Annual Recognition 2020 $ (45,526) 2021 (45,526) 2022 (45,526) 2023 (45,526) 2024 (45,526) Thereafter (87,640) $ (315,270) 95 City of Tigard, Oregon Notes to Basic Financial Statements Actuarial Assumptions and Other Inputs The total OPEB liability in the July 1, 2018 valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified: Actuarial cost method Entry Age Normal Inflation 2.5 percent Salary increases 3.5 percent Healthy mortality RP-2014 healthy annuitant, sex distinct mortality tables blended 50/50 blue collar and white collar, set back one year for males. Mortality is projected on a generational basis using the Unisex Social Security Data Scale. Discount rate 3.87 percent (change from 3.58 percent in previous measurement period) Healthcare cost trend rate Medical and vision: 6.75 percent per year, decreasing to 4.75 percent Dental: 4.5 percent per year The discount rate was based on Bond Buyer 20-Year General Obligation Bond Index. Changes in the Total OPEB Liability Total OPEB Liability Balance as of June 30, 2018 $ 1,421,584 Changes for the year: Service cost 117,599 Interest on total OPEB liability 54,243 Effect of economic/demographic gains and losses 15,135 Effect of assumptions changes or inputs (291,814) Benefit payments (48,484) Balance as of June 30, 2019 $ 1,268,263 Changes in assumptions is the result of the change in the discount rate from 3.58 percent to 3.87 percent. Sensitivity of the Total OPEB Liability The following presents the city's total OPEB liability, as well as what the liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2.87 percent) or 1- 96 City of Tigard, Oregon Notes to Basic Financial Statements percentage-point higher (4.87 percent) than the current discount rate. A similar sensitivity analysis is then presented for changes in the healthcare trend assumption. Discount Rate: 1% Decrease Current Discount 1% Increase (2.87%) Rate (3.87%) (4.87%) Total OPEB Liability $ 1,389,137 $ 1,268,263 $ 1,157,132 Healthcare Cost Trend: 1% Decrease Current Healthcare 1% Increase (5.75%) Trend Rate (6.75%) (7.75%) Total OPEB Liability $ 1,112,273 $ 1,268,263 $ 1,452,685 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 August 29, 2003. 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 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 97 City of Tigard, Oregon Notes to Basic Financial Statements from PERS or (2) was insured at the time the member died and the member retired before May 1, 1991. Contributions PERS funding policy provides for 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, 2016 actuarial valuation. The rates based on a percentage of payroll, first became effective July 1, 2018. The city's contribution rates for the period were 0.50% for Tier One/Tier Two members, and 0.43% for OPSRP members. The city's total contributions for the year ended June 30, 2019 was $30,103. OPEB Assets, Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB At June 30, 2019, the city reported an asset of $64,649 for its proportionate share of the OPERS net OPEB asset. The net OPEB asset was measured as of June 30, 2018, and the total OPEB liability used to calculate the net OPEB asset was determined by an actuarial valuation as of December 31, 2016 rolled forward to June 30, 2018. The city's proportion of the net OPEB asset was based on the city's contributions to the RHIA program during the measurement period relative to contributions from all participating employers. At June 30, 2018, the city's proportionate share was 0.0579%, which is a decrease from its proportion of 0.0612% as of June 30, 2017. For the year ended June 30, 2019, the city recognized OPEB income from this plan of $6,298. At June 30, 2019, the city reported deferred outflows of resources and deferred inflows of resources related to this OPEB plan from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual experience $ - $ 3,664 Change of assumptions - 205 Net difference between projected and actual earnings - 13,938 Changes in proportionate share 521 777 Contributions subsequent to the measurement date 30,103 - Total $ 30,624 $ 18,584 Deferred outflows of resources related to OPEB of $30,103 resulting from the city's contributions subsequent to the measurement date will be recognized as either a reduction of the net OPEB liability or an increase in the net OPEB asset in the year ended June 30, 2020. 98 City of Tigard, Oregon Notes to Basic Financial Statements Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year ended June 30: Annual Recognition 2020 $ (6,096) 2021 (5,961) 2022 (4,620) 2023 (1,386) $ (18,063) Actuarial Methods and Assumptions The total OPEB liability in the December 31, 2016 actuarial valuation was determined using the following actuarial methods and assumptions: Actuarial cost method Entry Age Normal Amortization method Amortized as a level percentage of payroll as layered bases over a closed 10 year period Asset valuation method Market value of assets Inflation 2.5 percent Investment rate of return 7.2 percent Salary increases 3.5 percent Healthy mortality Healthy retirees and beneficiaries: RP-2014 Healthy annuitant, sex-distinct, generational with Unisex, Social Security Data Scale, with collar adjustments and set-backs as described in the valuation. Active members: RP-2014 Employees, sex-distinct, generational with Unisex, Social Security Data Scale, with collar adjustments and set- backs as described in the valuation. Disabled retirees: RP-2014 Disabled retirees, sex-distinct, generational with Unisex, Social Security Data Scale. 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 99 City of Tigard, Oregon Notes to Basic Financial Statements on the 2016 experience study which reviewed experience for the four-year period ending on December 31, 2016. 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 PERS 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 OIC'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 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. Compound Asset Class Target Annual Return (Geometric) Core Fixed Income 8.00% 3.49% Short-Term Bonds 8.00 3.38 Bank/Leveraged Loans 3.00 5.09 High Yield Bonds 1.00 6.45 Large/Mid Cap US Equities 15.75 6.30 Small Cap US Equities 1.31 6.69 Micro Cap US Equities 1.31 6.80 Developed Foreign Equities 13.13 6.71 Emerging Market Equities 4.13 7.45 Non-US Small Cap Equities 1.88 7.01 Private Equity 17.50 7.82 Real Estate (Property) 10.00 5.51 Real Estate (REITS) 2.50 6.37 Hedge Fund of Funds - Diversified 2.50 4.09 Hedge Fund - Event-driven 0.63 5.86 Timber 1.88 5.62 Farmland 1.88 6.15 Infrastructure 3.75 6.60 Commodities 1.88 3.84 Assumed Inflation - Mean 2.50 100 City of Tigard, Oregon Notes to Basic Financial Statements Discount Rate The discount rate used to measure the total OPEB liability was 7.20 percent for the RHIA 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 RHIA 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 RHIA Plan was applied to all periods of projected benefit payments to determine the total OPEB liability. Sensitivity of the City's proportionate share of the net OPEB liability (asset) to changes in the discount rate The following presents the city's proportionate share of the net OPEB liability (asset) calculated using the discount rate of 7.20 percent, as well as what the city's proportionate share of the net OPEB liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower (6.20 percent) or 1-percentage-point higher (8.20 percent) than the current rate: 1% Decrease Current Discount 1% Increase (6.20%) Rate (7.20%) (8.20%) Net OPEB Liability (Asset) $ (37,642) $ (64,649) $ (87,638) OPEB 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-Information.aspx 9. 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 101 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 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. 102 City of Tigard, Oregon Notes to Basic Financial Statements 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. 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. 103 City of Tigard, Oregon Notes to Basic Financial Statements 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, 2016 actuarial valuation. The rates based on a percentage of payroll, first became effective July 1, 2017. The rates in effect for the period were 20.51 percent for Tier One/Tier Two police members and 13.39 percent for OPSRP Pension Program Police member. The city's total contributions exclusive of the 6 percent "pick- up" was $1,016,600. 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 $376,970 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, 2019, the city reported a liability of $11,107,323 for its proportionate share of the OPERS net pension liability. The net pension liability was measured as of June 30, 2018, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of December 31, 2016 rolled forward to June 30, 2018. 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, 2018, the city's proportion of OPERS net pension liability was 0.07332 percent. 104 City of Tigard, Oregon Notes to Basic Financial Statements Annual Pension Cost For the year ended June 30, 2019, the city recognized pension expense of $2,070,287. At June 30, 2019, 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 $ 377,838 $ - Changes of assumptions 2,582,432 - Net difference between projected and actual earnings on investments - 493,228 Changes in proportion 70,702 286,334 Differences between employer contributions and proportionate share of contributions 62,930 100,640 Total (prior to post-MD contributions) 3,093,902 880,202 Contributions subsequent to the MD 1,039,691 - Total $4,133,593 $880,202 Deferred outflows of resources related to pensions of $1,039,691 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, 2020. Other amounts reported as deferred inflows of resources related to pensions will be recognized in pension expense as follows: Deferred Outflows Deferred Inflows Net Deferred Outflows/Inflows Amortization Period Amortization Period Amortization Period FY2020 $ 998,220 FY2020 $(225,954) FY2020 $1,224,174 FY2021 945,002 FY2021 141,537 FY2021 803,465 FY2022 876,530 FY2022 732,404 FY2022 144,126 FY2023 270,629 FY2023 228,889 FY2023 41,740 FY2024 3,521 FY2024 3,326 FY2024 195 Total $3,093,902 Total $ 880,202 Total $2,213,700 105 City of Tigard, Oregon Notes to Basic Financial Statements Actuarial Methods and Assumptions The total pension liability in the December 31, 2016 actuarial valuation was determined using the following actuarial methods and assumptions: Actuarial Methods and Assumptions Valuation Date December 31, 2016 Measurement Date June 30, 2018 Experience Study Report 2016. published July 26, 2017 Actuarial Cost Method Entry Age Normal Actuarial Assumptions: Inflation Rate 2.50 percent Long-Term Expected Rate of Return 7.20 percent Discount Rate 7.20 percent Proiected Salary Increases 3.50 percent overall payroll erowth 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-2014 Healthy annuitant, sex- distinct, generational with Unisex, Social Security Data Sacale, with collar adjustments and set-backs as described in the valuation. Mortality Active Members: RP-2014 Employes, sex-distinct, generational with Unisex, Social Security Data Sacale, with collar adjustments and set-backs as described in the valuation. Disabled retirees: RP-2014 Disabled retirees, sex-distinct, generational with Unisex, Social Security Data Sacale. 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 2016 experience study which reviewed experience for the four-year period ending on December 31, 2016. 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 OIC'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 underlying assumptions, and includes adjustment for the inflation assumption. These 106 City of Tigard, Oregon Notes to Basic Financial Statements assumptions are not based on historical returns, but instead are based on a forward-looking capital market economic model. Compound Asset Class Target Annual Return (Geometric) Core Fixed Income 8.00% 3.49% Short-Term Bonds 8.00 3.38 Bank/Leveraged Loans 3.00 5.09 High Yield Bonds 1.00 6.45 Large/Mid Cap US Equities 15.75 6.30 Small Cap US Equities 1.31 6.69 Micro Cap US Equities 1.31 6.80 Developed Foreign Equities 13.13 6.71 Emerging Market Equities 4.13 7.41 Non-US Small Cap Equities 1.88 7.01 Private Equity 17.50 7.82 Real Estate (Property) 10.00 5.51 Real Estate (REITS) 2.50 6.37 Hedge Fund of Funds - Diversified 2.50 4.09 Hedge Fund - Event-driven 0.63 5.86 Timber 1.88 5.62 Farmland 1.88 6.15 Infrastructure 3.75 6.60 Commodities 1.88 3.84 Assumed Inflation - Mean 2.50 Discount Rate The discount rate used to measure the total pension liability was 7.20 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 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 7.20 percent, as well as what the city's proportionate 107 City of Tigard, Oregon Notes to Basic Financial Statements share of the net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower (6.20 percent) or 1-percentage-point higher (8.20 percent) than the current rate: 1% Decrease Discount Rate 1% Increase (6.20%) (7.20%) (8.20%) City's proportionate share of the net pension liability $ 18,562,436 $ 11,107,323 $ 4,953,738 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-Information.aspx 10. Retirement Plans—Defined Contribution Plan The city contributes to a retirement plan on behalf of all eligible employees. Contributions are to Mass Mutual, 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, 2019: Classification of eligible employees Enrollment Represented (SEIU)/Police (non-sworn) employees 118 Management employees 85 Total enrolled employees 203 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 $1,674,245 for the year ended June 30, 2019. 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, 2019, the total net position of the pension plan was $30,504,565, which approximates fair value. 108 City of Tigard, Oregon Notes to Basic Financial Statements 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. 11.Tax Abatements As of June 30, 2019, 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 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. 109 City of Tigard, Oregon Notes to Basic Financial Statements • 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. 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, 2019, the city's property tax revenues were reduced by an estimated $12,000 as a result of the EZ program. For the fiscal year ended June 30, 2019, the Tigard Urban Renewal's property tax revenues were reduced by an estimated $360 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 110 City of Tigard, Oregon Notes to Basic Financial Statements 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 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, 2019, the city's property tax revenues were reduced by an estimated $34,000 as a result of this program. For fiscal year ended June 30, 2019 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- 111 City of Tigard, Oregon Notes to Basic Financial Statements 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 enourages development which supports downtown revitalizeation. 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, 2019, the city's property tax revenues were reduced by an estimated $22,000 as a result of this program. For the fiscal year ended June 30, 2019 the Tigard Urban Renewal's property tax revenues were reduced by an estimated $700 as a result of this program. For the fiscal year ended June 30, 2019, the city abated property taxes totaling $68,000 under the three programs. For fiscal year ended June 30, 2019 the Tigard Urban Renewal's abated property taxes totaling $2,060 under the three programs. FY 2019 Taxes Abated Tigard Urban Tax Abatement Program City of Tigard Renewal Enterprise Zone $ 12,000 $ 360 Non-Profit Low Income Housing Limited Tax Exemption 34,000 1,000 Vertical Housing Development Zone 22,000 700 Total $ 68,000 $ 2,060 12.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 20.57 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 2019 the city paid $13,914,368 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. 112 City of Tigard, Oregon Notes to Basic Financial Statements Revenues are reported net because the city acts in a fiduciary capacity on behalf of Clean Water Services. 13. 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 liability risks with nominal deductibles. Employee injuries are insured through SAIF, the State Accident Insurance Fund. 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. 14.Joint Venture Willamette Intake Facilities Commission Willamette Intake Facilities Commission (the Commission or WIF) was organized in April 2018 under Oregon Revised Statute (ORS) 190 and was established by an agreement between the cities of Wilsonville, Hillsboro, Tigard, Beaverton, Sherwood, and Tualatin Valley Water District. The Commission is governed by a six-member board, with one representative appointed by each member jurisdiction. The purpose of the Commission is to provide for the ownership, management, and operation of the Willamette intake facilities which are used to withdraw and transmit water to the parties. The Commission is managed by Tualatin Valley Water District. Expenses are allocated on a unit basis by the Commission. Each joint venturer's apportioned share of the general administration expenses is determined by the following formula: 25 percent of the administrative costs for the fiscal year is divided evenly among the Commission's membership; the remainder is divided among the Commission membership according to their percentage share of the capacity ownership in the intake facilities. Operations, maintenance, and repair expenses that are a result of use of the facilities are allocated based on each party's proportionate use of the WIF. Operations, maintenance, and repair expenses unrelated to usage will be allocated based on each party's proportionate ownership of the WIF. 113 City of Tigard, Oregon Notes to Basic Financial Statements The following percentages were in effect at June 30, 2019: Tualatin Valley Water District 39.40 City of Wilsonville 16.67 City of Sherwood 6.47 City of Tigard 10.00 City of Hillsboro 24.13 City of Beaverton 3.33 The investment in joint venture is recorded at cost in the Water Fund, and the city's share of the annual net income or loss is used to adjust the ending balance of the city's equity interest in the joint venture. Financial statements for the WIF may be obtained from Tualatin Valley Water District, Finance Department at 1850 SW 170th Avenue, Beaverton, Oregon 97003. At June 30, 2019 the city's investment in the WIF was: Investment in joint venture at June 30, 2018 $ 750,239 Contributions 263,906 Loss for the year (8,440) Investment in joint venture at June 30, 2019 $ 1,005,705 15. Lake Oswego/Tigard Water Partnership The city has an intergovernmental agreement (IGA) with the City of Lake Oswego for the Lake Oswego/Tigard Water Partnership (Partnership). The city's share of the Partnership is estimated at approximately $132 million. The Partnership built a water system that has the capacity to produce 38 million gallons of usable water per day (MGD). Tigard's portion is 18 of the 38 MGD, or 47.37 percent. While the Partnership is still operating under the original agreement, recently the cities have adopted a Lake Oswego/Tigard Water Partnership Operations plan. The cities are also discussing a long-term governance agreement. Assets Upon completion of the multi-year project Lake Oswego conveyed to Tigard an undivided proportionate interest of the supply facilities and property. The city then recorded its share of capital assets in land, land improvements, building and improvements, water system infrastructure and equipment. Depreciation for the depreciable assets is based on each asset's respective useful life. Debt 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 114 City of Tigard, Oregon Notes to Basic Financial Statements year 2015 for the continuing water infrastructure needs. As of June 30, 2019, the outstanding debt amount for the project is $131,055,591. Operating costs and future capital expense Operating costs and future capital expenses are based on different criteria for each section of the system: Allocation Percentage Water System Section Fixed Cost Variable Cost Water treatment plant, pipe infrastructure, raw water intake facility 47.37% Based on usage Waluga Resivoir 51.43% Based on usage Pipeline after Waluga Resivoir, Bonita pump station 100.00% 100.00% The monthly operating costs paid to Lake Oswego are based on an annual budget for fixed costs and projected usage for variable costs. Annually, a true up is completed based on actual usage. The city exclusively operates the Bonita pump station and therefore does not pay Lake Oswego for those costs. For the fixed costs associated with the Waluga Reservoir, Tigard's portion is 1.8 of the 3.5 million gallon capacity, or 51.43 percent. The revenue and expenses associated with ongoing operations of the system are recorded within water operations. 16. Commitments The city has entered into two contracts for pavement maintenance and rehabilitation for total of $1,813,717, with $1,669,248 remaining at June 30, 2019. This contract will be completed during the first half of fiscal year 2020. The city's street maintenance fee is the resource for the pavement rehabilitation project. The city has entered into other contracts for various services with commitments at June 30, 2019 of approximately $1,228,000. These contracts will be funded with existing resources. 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 would be recognized when it appeared probable that the loss had been incurred and the amount could be reasonably estimated. 115 City of Tigard, Oregon Notes to Basic Financial Statements 18. Subsequent Event On August 29, 2019 the city entered into a financing agreement with Key Government Finance to refinance the existing loan with US Bank, which has a balloon payment of $780,000 due on September 2, 2019 and provide additional funding for urban renewal projects. The existing $1.3 million loan with US Bank was made in 2014 to purchase property on Burnham Street. As part of the new financing agreement, the city was approved to borrow $5,149,000 to fund future urban renewal projects in addition to the $780,000 balloon payment to US Bank for a total borrowing of$5,929,000. At the time of the bank loan, the city and the agency entered into an Intergovernmental Agreement (IGA) for TCDA to be obligated for the payments on the loan. The IGA states the agency will make the payments on the bank loan to the financial institution from the tax increment revenues. The TCDA is a blended component unit of the city. Future projects funded under the new financing agreement include Universal Plaza, Fanno Creek Overlook, trail lighting and a public restroom. 116 Required Supplementary Information 118 CITY OF TIGARD,OREGON GENERAL FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Taxes $ 16,132,030 $ 16,132,030 $ 16,716,747 $ 584,717 Licenses and permits 1,157,614 1,157,614 1,290,733 133,119 Intergovernmental revenues 6,308,022 6,355,272 7,219,903 864,631 Charges for services 294,055 294,055 264,272 (29,783) Fines and forfeitures 654,498 1,069,498 682,647 (386,851) Franchise fees 6,255,307 6,255,307 6,218,353 (36,954) Interest earnings 103,722 103,722 823,407 719,685 Miscellaneous revenues 56,432 56,432 53,281 (3,151) Total revenues 30,961,680 31,423,930 33,269,343 1,845,413 EXPENDITURES Community services 23,992,971 24,353,143 21,952,061 2,401,082 Community development 3,569,242 3,584,252 3,317,805 266,447 Policy and administration 901,357 1,156,835 993,346 163,489 Total expenditures 28,463,570 29,094,230 26,263,212 2,831,018 Change in fund balance before other financing sources(uses) 2,498,110 2,329,700 7,006,131 4,676,431 OTHER FINANCING SOURCES(USES) Transfer in 237,070 237,070 237,070 - Interfund loan (1,000) (341,000) (183,273) 157,727 Transfer out (2,827,416) (3,360,186) (3,119,799) 240,387 Contingency (1,285,000) (459,120) - 459,120 Reserve for future expenditures (13,390,375) (13,390,375) - 13,390,375 Total other financing(uses) (17,266,721) (17,313,611) (3,066,002) 14,247,609 Change in fund balance (14,768,611) (14,983,911) 3,940,129 18,924,040 Fund balance-beginning of the year 14,768,611 14,983,911 19,407,186 4,423,275 Fund balance-end of the year $ - $ - $ 23,347,315 $ 23,347,315 119 City of Tigard Oregon Schedule of the City's Proportionate Share of the Net Pension Liability(Asset) Oregon Public Employees Retirement System Last Six Fiscal Years 1,2 2019 2018 2017 2016 2015 2014 City's proportion of the net pension liability (asset) 0.073322% 0.072960% 0.074719% 0.081488% 0.074022% 0.074022% City's proportionate share of the net pension liability(asset) $ 11,107,323 $ 9,835,041 $ 11,216,998 $ 4,678,602 $ (1,677,869) $ 3,777,455 City's covered payroll $ 5,941,342 $ 6,280,408 $ 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 payroll 186.95% 156.60% 169.70% 75.62% -27.84% 69.61% Plan fiduciary net position as a percentage of the total pension liability 82.07% 83.12% 80.53% 91.88% 103.59% 91.97% 110-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 2019 is July 1,2017-June 30,2018. 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 contributes 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. On July 28,2017,the OPERS Board lowered the assumed earnings rate from 7.50 percent to 7.20 percent.The new assumed earnings rate affected rates on July 1,2018. 120 City of Tigard,Oregon Schedule of the City's Contributions Oregon Public Employees Retirement System Last Six Fiscal Years 1 2019 2018 2017 2016 2015 2014 Contractually required contributions $ 1,039,691 $ 937,027 $ 787,306 $ 761,228 $ 782,812 $ 722,108 Contributions in relation to the contractually required contribution (1,039,691) (937,027) (787,306) (761,228) (782,812) (722,108) Contribution deficiency(excess) $ - $ - $ - $ - $ - $ - City's covered payroll $ 6,331,572 $ 5,941,342 $ 6,280,408 $ 6,610,002 $ 6,187,208 $ 6,025,900 Contributions as a percentage of covered payroll 16.42% 15.77% 12.54% 11.52% 12.65% 11.98% 110-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 31,2016 December 31,2015 December 31,2013 December 31,2011 Effective July 2018-June 2019 July 2017-June 2018 July 2015-June 2017 July 2013-June 2015 Actuarial cost method: Entry Age Normal Entry Age Normal Entry Age Normal Projected Unit Credit Actuarial valuation method: Market Value Market Value Market Value Market Value Actuarial assumption: Inflation rate 2.50 Percent 2.50 Percent 2.75 percent 2.75 percent Projected salary increases 3.50 percent 3.50 percent 3.75 percent 3.75 percent Investment rate of return 7.20 percent 7.50 percent 7.75 percent 8.00 percent 121 City of Tigard, Oregon Schedule of the Changes in the City's Total OPEB Liability and Related Ratios Implicit Rate Subsidy Plan Last Two Fiscal Years 1,2 2019 2018 Total OPEB Liability(in 1,000s) Service cost $ 117 $ 100 Interest 54 43 Changes in benefit terms - - Economic/demographic losses 15 - Changes of assumptions or other inputs (292) (96) Benefit payments (49) (59) Net change in OPEB liability (155) (12) Total OPEB Liability- beginning 1,423 1,435 Total OPEB Liability- ending 1,268 1,423 Covered-employee payroll 21,705 21,438 Total OBEP Liability as a % of covered payroll 5.84% 6.64% 110-year trend information required by GASB Statement 75 will be presented prospectively 2 Amounts presented are for the measurement period reported during the fiscal year, which for FY 2019 is July 1, 2017 -June 30, 2018 122 City of Tigard, Oregon Schedule of the City's Proportionate Share of the Net OPEB Liability(Asset) Oregon Public Employees Retirement System, Retiremen Health Insurance Account Last Three Fiscal Years 1'2 2019 2018 2017 City's proportion of the net OPEB liability (asset) 0.0579% 0.0613% 0.0675% City's proportionate share of the net OPEB liability (asset) $ (64,649) $ (25,563) $ 18,323 City's covered payroll $ 5,941,342 $ 6,280,408 $ 6,610,002 City's proportionate share of the net OPEB liability (asset) as a percentage of its covered payroll -1.1% -0.4% 0.3% Plan fiduciary net position as a percentage of the total OPEB liability 124.0% 108.9% 80.5% 110-year trend information required by GASB Statement 75 will be presented prospectively 2 Amounts presented are for the measurement period reported during the fiscal year, which for FY 2019 is July 1, 2017 -June 30, 2018 123 City of Tigard,Oregon Schedule of the City's Contributions Oregon Public Employees Retirement System,Retirement Health Insurance Account Last Three Fiscal Years 1 2019 2018 2017 Contractually required contributions $ 30,103 $ 29,366 $ 31,820 Contributions in relation to the contractually required contribution (30,103) (29,366) (31,820) Contribution deficiency(excess) $ - $ - $ - City's covered payroll $ 6,331,572 $ 5,941,342 $ 6,280,408 Contributions as a percentage of covered payroll 0.48% 0.49% 0.51% 110-year trend information required by GASB Statement 75 will be presented prospectively NOTES TO SCHEDULE Actuarial Assumptions and Methods Used to Actuarially Determine Contributions: Actuarial Valuation December 31,2016 December 31,2015 December 31,2013 Effective July 2018-June 2019 July 2017-June 2018 July 2015-June 2017 Actuarial cost method: Entry Age Normal Entry Age Normal Entry Age Normal Actuarial valuation method: Market Value Market Value Market Value Actuarial assumption: Inflation rate 2.50 percent 2.50 percent 2.75 percent Projected salary increases 3.50 percent 3.50 percent 3.75 percent Investment rate of return 7.20 percent 7.50 percent 7.75 percent 124 Other Supplementary Information 125 126 CITY OF TIGARD,OREGON COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS June 30,2019 Special Debt Service Capital Project Revenue Funds Funds Funds Total ASSETS Cash and investments $ 1,437,539 $ - $ 3,067,288 $ 4,504,827 Accounts receivable 999,866 - 370,284 1,370,150 Property taxes receivable - 47,832 - 47,832 Assessment liens receivable - 259,895 - 259,895 Interest receivable - 7,574 - 7,574 Restricted cash and investments 18,759,087 2,185,976 9,482,783 30,427,846 Total assets $ 21,214,052 $ 2,501,277 $ 12,920,355 $ 36,635,684 LIABILITIES Accounts payable and accrued liabilities $ 809,758 $ - $ 282,946 $ 1,092,704 Deposits 999,600 - - 999,600 Due to others 201,535 - - 201,535 Advances from other funds - - - - Unearned revenue 50,000 - - 50,000 Total liabilities 2,060,893 - 282,946 2,343,839 DEFERRED INFLOWS OF RESOURCES Resources not yet available: Property taxes - 33,119 - 33,119 Transportation refund credits 23,295 - - 23,295 Special assessment liens - 259,895 70,452 330,347 Total deferred inflows of resources 23,295 293,014 70,452 386,761 FUND BALANCES Restricted for: Street maintenance and improvements 6,327,780 - 7,588,683 13,916,463 Tourism 519,802 - - 519,802 Debt service - 2,208,263 - 2,208,263 Park development and improvements - - 1,163,893 1,163,893 Underground utilities - - 449,549 449,549 Building inspection 8,850,454 - - 8,850,454 Police services 327,964 - - 327,964 Library improvements 590,078 - - 590,078 Urban development and improvements - - 147,164 147,164 Committed for: Street maintenance and improvements - - 2,287,747 2,287,747 Urban forestry 1,037,488 - - 1,037,488 Assigned to: City facilities - - 929,921 929,921 Park and recreation 1,458,738 - - 1,458,738 Total fund balances 19,129,864 2,208,263 12,566,957 33,905,084 Total liabilities,deferred inflows of resources and fund balances $ 21,214,052 $ 2,501,277 $ 12,920,355 $ 36,635,684 127 CITY OF TIGARD,OREGON COMBINING STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS for the year ended June 30,2019 Special Debt Service Capital Project Revenue Funds Funds Funds Total REVENUES Taxes $ 6,498,650 $ 2,921,988 $ - $ 9,420,638 Special assessments - 59,999 - 59,999 Licenses and permits 3,887,323 - - 3,887,323 Intergovernmental revenues 34,678 - 1,188,549 1,223,227 Charges for services 1,395,555 - 2,955,738 4,351,293 System development charges - - 701,855 701,855 Rental revenues - - 107,371 107,371 Fines and forfeitures 160,453 - - 160,453 Interest earnings 478,572 89,927 316,856 885,355 Miscellaneous revenues 96,380 - 107,801 204,181 Total revenues 12,551,611 3,071,914 5,378,170 21,001,695 EXPENDITURES Community services 99,470 - - 99,470 Public works 6,105,157 - - 6,105,157 Community development 1,630,514 - 323,856 1,954,370 Debt service: Principal 800,000 1,730,800 - 2,530,800 Interest 70,688 728,958 - 799,646 Capital outlay - - 6,339,699 6,339,699 Total expenditures 8,705,829 2,459,758 6,663,555 17,829,142 Changes in fund balance before other financing sources(uses) 3,845,782 612,156 (1,285,385) 3,172,553 OTHER FINANCING SOURCES(USES) Transfer in 2,994,053 - 2,604,126 5,598,179 Transfer out (1,758,351) (187,706) (1,421,558) (3,367,615) Debt proceeds - - 183,273 183,273 Total other financing sources(uses) 1,235,702 (187,706) 1,365,841 2,413,837 Changes in fund balance 5,081,484 424,450 80,456 5,586,390 Fund Balance-Beginning of the year 14,048,380 1,783,813 12,486,501 28,318,694 Fund Balance-End of the year $ 19,129,864 $ 2,208,263 $ 12,566,957 $ 33,905,084 128 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. 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. City Gas Tax Fund–This fund accounts for revenues generated from Tigard's local gas tax and funds projects for transportation improvements. Transient Lodging Tax Fund–This fund accounts for revenues generated from Tigard's local hotel/motel tax and funds projects to promote tourism. 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. 129 130 No content appears on this page by design. 131 CITY OF TIGARD,OREGON NONMAJOR SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET June 30,2019 City Gas Transient Electrical Gas Tax Tax Lodging Tax Inspection Fund Fund Fund Fund ASSETS Cash and investments $ - $ - $ - $ - Accounts receivable 566,463 164,827 79,607 3,033 Restricted cash and investments 4,173,424 2,021,610 440,195 399,767 Total assets $ 4,739,887 $ 2,186,437 $ 519,802 $ 402,800 LIABILITIES Accounts payable $ 206,216 $ - $ - $ - Due to others - - - 603 Deposits 369,033 - - 24,702 Unearned revenue - - - Total liabilities 575,249 - - 25,305 DEFERRED INFLOWS OF RESOURCES Transportation refund credits 15,263 8,032 - - FUND BALANCE Restricted for: Street maintenance and improvements 4,149,375 2,178,405 - - Tourism - - 519,802 - Building inspection - - - 377,495 Police services - - - - Library improvements - - - - Committed for: Urban forestry - - - - Assigned for: Park and recreation - - - - Total fund balances 4,149,375 2,178,405 519,802 377,495 Total liabilities and fund balances $ 4,739,887 $ 2,186,437 $ 519,802 $ 402,800 132 Criminal Urban Parks Building Forfeiture Forestry Utility Library Fund Fund Fund Fund Fund Total $ - $ - $ - $ 1,437,539 $ - $ 1,437,539 4,729 - 1,345 179,451 411 999,866 9,078,945 390,162 1,615,317 - 639,667 18,759,087 $ 9,101,234 $ 390,162 $ 1,616,662 $ 1,616,990 $ 640,078 $ 21,214,052 $ 438,391 $ 6,899 $ - $ 158,252 $ - $ 809,758 145,633 55,299 - - - 201,535 26,691 - 579,174 - - 999,600 - - - - 50,000 50,000 610,715 62,198 579,174 158,252 50,000 2,060,893 - - - - - 23,295 - - - - - 6,327,780 - - - - - 519,802 8,472,959 - - - - 8,850,454 - 327,964 - - - 327,964 - - - - 590,078 590,078 - - 1,037,488 - - 1,037,488 - - - 1,458,738 - 1,458,738 8,490,519 327,964 1,037,488 1,458,738 590,078 19,129,864 $ 9,101,234 $ 390,162 $ 1,616,662 $ 1,616,990 $ 640,078 $ 21,214,052 133 CITY OF TIGARD,OREGON NONMAJOR SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCE for the year ended June 30,2019 City Gas Transient Electrical Gas Tax Tax Lodging Tax Inspection Fund Fund Fund Fund REVENUES Gas tax $ 4,860,112 $ - $ - $ - City gas tax - 888,913 - - Hotel/Motel tax - - 749,625 - Licenses and permits 44,660 - - 305,825 Charges for services - - - - Intergovernmental revenues - - - - Fines and forfeitures - - - - Tree replacement revenue - - - - Interest earnings 106,169 59,136 9,747 11,125 Miscellaneous revenues 70,145 11,792 - - Total revenues 5,081,086 959,841 759,372 316,950 EXPENDITURES Community services - - - - Public works 2,843,299 - - - Debt service: Principal 524,138 275,862 - - Interest 46,313 24,375 - - Total expenditures 3,413,750 300,237 - - Changes in fund balance before other financing sources(uses) 1,667,336 659,604 759,372 316,950 OTHER FINANCING SOURCES(USES) Transfer in 150,000 - - - Transfer out (867,655) (155,580) (239,570) (250,000) Total other financing sources(uses) (717,655) (155,580) (239,570) (250,000) Changes in fund balance 949,681 504,024 519,802 66,950 Fund balance-Beginning of the year 3,199,694 1,674,381 - 310,545 Fund balance-End of the year $ 4,149,375 $ 2,178,405 $ 519,802 $ 377,495 134 Criminal Urban Parks Building Forfeiture Forestry Utility Library Fund Fund Fund Fund Fund Total $ - $ - $ - $ - $ - $ 4,860,112 - - - - - 888,913 - - - - - 749,625 3,536,838 - - - - 3,887,323 - - - 1,388,909 - 1,388,909 34,678 - - - - 34,678 - 160,453 - - - 160,453 - - 6,646 - - 6,646 224,016 888 43,335 8,777 15,379 478,572 6,242 - - 8,201 - 96,380 3,801,774 161,341 49,981 1,405,887 15,379 12,551,611 - 99,470 - - - 99,470 - - - 3,261,858 - 6,105,157 - - - - - 800,000 - - - - - 70,688 1,630,514 99,470 - 3,261,858 - 8,705,829 2,171,260 61,871 49,981 (1,855,971) 15,379 3,845,782 250,000 - - 2,594,053 - 2,994,053 - - (141,946) (103,600) - (1,758,351) 250,000 - (141,946) 2,490,453 - 1,235,702 2,421,260 61,871 (91,965) 634,482 15,379 5,081,484 6,069,259 266,093 1,129,453 824,256 574,699 14,048,380 $ 8,490,519 $ 327,964 $ 1,037,488 $ 1,458,738 $ 590,078 $ 19,129,864 135 CITY OF TIGARD,OREGON GAS TAX FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES State gas tax $ 3,134,705 $ 3,134,705 $ 3,802,505 $ 667,800 County gas tax 195,343 215,343 1,057,607 842,264 Licenses and permits 68,974 68,974 44,660 (24,314) Intergovernmental revenues - 20,000 - (20,000) Interest earnings 55,732 55,732 106,169 50,437 Miscellaneous revenues 62,818 62,818 70,145 7,327 Total revenues 3,517,572 3,557,572 5,081,086 1,523,514 EXPENDITURES Public works 3,198,468 3,285,468 2,843,299 442,169 *Debt service: Principal 525,000 525,000 524,138 862 Interest 50,000 50,000 46,313 3,687 Total expenditures 3,773,468 3,860,468 3,413,750 446,718 Change in fund balance before other financing sources(uses) (255,896) (302,896) 1,667,336 1,970,232 OTHER FINANCING SOURCES(USES) Transfer in 150,000 150,000 150,000 - Transfer out (1,308,100) (1,372,100) (867,655) 504,445 Contingency (200,000) (148,000) - 148,000 Reserve for future expenditures (401,063) (401,063) - 401,063 Total other financing(uses) (1,759,163) (1,771,163) (717,655) 1,053,508 Change in fund balance (2,015,059) (2,074,059) 949,681 3,023,740 Fund balance-Beginning of the year 2,015,059 2,074,059 3,199,694 1,125,635 Fund balance-End of the year $ - $ - $ 4,149,375 $ 4,149,375 * Budget appropriation is made at the debt service program level 136 CITY OF TIGARD,OREGON CITY GAS TAX FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES City gas tax $ 619,511 $ 619,511 $ 888,913 $ 269,402 Interest earnings 34,584 34,584 59,136 24,552 Miscellaneous revenues 32,052 32,052 11,792 (20,260) Total revenues 686,147 686,147 959,841 273,694 EXPENDITURES *Debt service: Principal 280,000 280,000 275,862 4,138 Interest 26,000 26,000 24,375 1,625 Total expenditures 306,000 306,000 300,237 5,763 Changes in fund balance before other financing sources(uses) 380,147 380,147 659,604 279,457 OTHER FINANCING SOURCES(USES) Transfer out (295,000) (295,000) (155,580) 139,420 Contingency (300,000) (300,000) - 300,000 Reserve for future expenditures (1,016,824) (1,016,824) - 1,016,824 Total other financing sources(uses) (1,611,824) (1,611,824) (155,580) 1,456,244 Change in fund balance (1,231,677) (1,231,677) 504,024 1,735,701 Fund balance-Beginning of the year 1,231,677 1,231,677 1,674,381 442,704 Fund balance-End of the year $ - $ - $ 2,178,405 $ 2,178,405 * Budget appropriation is made at the debt service program level 137 CITY OF TIGARD,OREGON TRANSIENT LODGING TAX FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Hotel/Motel tax $ 644,000 $ 644,000 $ 749,625 $ 105,625 Interest earnings - - 9,747 9,747 Total revenues 644,000 644,000 759,372 115,372 OTHER FINANCING SOURCES(USES) Transfer out (237,070) (272,070) (239,570) 32,500 Contingency (450,000) (415,000) - 415,000 Reserve for future expenditures (286,930) (286,930) - 286,930 Total other financing sources(uses) (974,000) (974,000) (239,570) 734,430 Change in fund balance (330,000) (330,000) 519,802 849,802 Fund balance-Beginning of the year 330,000 330,000 - (330,000) Fund balance-End of the year $ - $ - $ 519,802 $ 519,802 138 CITY OF TIGARD,OREGON ELECTRICAL INSPECTION FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Licenses and permits $ 243,397 $ 243,397 $ 305,825 $ 62,428 Interest earnings 1,207 1,207 11,125 9,918 Total revenues 244,604 244,604 316,950 72,346 OTHER FINANCING(USES) Transfer out (250,000) (250,000) (250,000) - Contingency (50,000) (50,000) - 50,000 Reserve for future expenditures (315,780) (315,780) - 315,780 Total other financing(uses) (615,780) (615,780) (250,000) 365,780 Change in fund balance (371,176) (371,176) 66,950 438,126 Fund balance-Beginning of the year 371,176 371,176 310,545 (60,631) Fund balance-End of the year $ - $ - $ 377,495 $ 377,495 139 CITY OF TIGARD,OREGON BUILDING FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Licenses and permits $ 2,409,484 $ 2,409,484 $ 3,536,838 $ 1,127,354 Intergovernmental revenues 8,281 8,281 34,678 26,397 Interest earnings 19,782 19,782 224,016 204,234 Miscellaneous revenues 7,967 7,967 6,242 (1,725) Total revenues 2,445,514 2,445,514 3,801,774 1,356,260 EXPENDITURES Community development 1,714,237 1,785,567 1,630,514 155,053 Change in fund balance before other financing sources(uses) 731,277 659,947 2,171,260 1,511,313 OTHER FINANCING SOURCES(USES) Transfer in 250,000 250,000 250,000 - Contingency (250,000) (178,670) - 178,670 Reserve for future expenditures (6,540,770) (6,540,770) - 6,540,770 Total other financing sources(uses) (6,540,770) (6,469,440) 250,000 6,719,440 Change in fund balance (5,809,493) (5,809,493) 2,421,260 8,230,753 Fund balance-Beginning of the year 5,809,493 5,809,493 6,069,259 259,766 Fund balance-End of the year $ - $ - $ 8,490,519 $ 8,490,519 140 CITY OF TIGARD,OREGON CRIMINAL FORFEITURE FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Interest earnings $ 1,892 $ 1,892 $ 888 $ (1,004) Forfeitures 43,459 43,459 160,453 116,994 Total revenues 45,351 45,351 161,341 115,990 EXPENDITURES Community services 150,893 150,893 99,470 51,423 Change in fund balance before other financing sources(uses) (105,542) (105,542) 61,871 167,413 OTHER FINANCING SOURCES(USES) Reserve for future expenditures (11,831) (11,831) - 11,831 Total other financing sources(uses) (11,831) (11,831) - 11,831 Change in fund balance (117,373) (117,373) 61,871 179,244 Fund balance-Beginning of the year 117,373 117,373 266,093 148,720 Fund balance-End of the year $ - $ - $ 327,964 $ 327,964 141 CITY OF TIGARD,OREGON URBAN FORESTRY FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Tree replacement revenue $ 27,891 $ 27,891 $ 6,646 $ (21,245) Interest earnings 4,060 4,060 43,335 39,275 Total revenues 31,951 31,951 49,981 18,030 OTHER FINANCING SOURCES(USES) Transfer out (150,000) (175,000) (141,946) 33,054 Contingency (50,000) (50,000) - 50,000 Reserve for future expenditures (901,769) (901,769) - 901,769 Total other financing sources(uses) (1,101,769) (1,126,769) (141,946) 984,823 Change in fund balance (1,069,818) (1,094,818) (91,965) 1,002,853 Fund balance-Beginning of the year 1,069,818 1,094,818 1,129,453 34,635 Fund balance-End of the year $ - $ - $ 1,037,488 $ 1,037,488 142 CITY OF TIGARD,OREGON PARKS UTILITY FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Charges for services $ 1,042,600 $ 1,067,900 $ 1,388,909 $ 321,009 Interest earnings 500 500 8,777 8,277 Miscellaneous revenues - - 8,201 8,201 Total revenues 1,043,100 1,068,400 1,405,887 337,487 EXPENDITURES Public works 3,504,538 3,530,108 3,261,858 268,250 Change in fund balance before other financing sources(uses) (2,461,438) (2,461,708) (1,855,971) 605,737 OTHER FINANCING SOURCES(USES) Transfer in 2,682,100 2,682,370 2,594,053 (88,317) Transfer out (103,600) (106,858) (103,600) 3,258 Contingency (100,000) (96,742) - 96,742 Reserve for future expenditures (842,189) (842,189) - 842,189 Total other financing sources(uses) 1,636,311 1,636,581 2,490,453 853,872 Change in fund balance (825,127) (825,127) 634,482 1,459,609 Fund balance-Beginning of the year 825,127 825,127 824,256 (871) Fund balance-End of the year $ - $ - $ 1,458,738 $ 1,458,738 143 CITY OF TIGARD,OREGON LIBRARY FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES: Interest earnings $ 1,000 $ 1,000 $ 15,379 $ 14,379 OTHER FINANCING SOURCES(USES) Transfer out (100,000) (100,000) - 100,000 Reserve for future expenditures (284,966) (284,966) - 284,966 Total other financing sources(uses) (384,966) (384,966) - 384,966 Change in fund balance (383,966) (383,966) 15,379 399,345 Fund balance-Beginning of the year 383,966 383,966 574,699 190,733 Fund balance-End of the year $ - $ - $ 590,078 $ 590,078 144 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. City Center Urban Renewal Debt Service Fund –This fund accounts for principal and interest payments on debt for the City Center Urban Renewal Area and transfers to the City Center Capital Improvement Fund. Revenues are from property taxes and interest earnings. Tigard Triangle Debt Service Fund –This fund accounts for principal and interest payments on debt for the Tigard Triangle Urban Renewal Area and transfers to the Tigard Triangle Improvement Fund. Revenues are from property taxes and interest earnings. 145 146 No content appears on this page by design. 147 CITY OF TIGARD,OREGON NONMAJOR DEBT SERVICE FUNDS COMBINING BALANCE SHEET June 30,2019 Bancroft Bond General City Center Urban Debt Service Obligation Debt Renewal Debt Fund Service Fund Service Fund ASSETS Property taxes receivable $ - $ 39,678 $ 8,154 Assessment liens receivable 259,895 - - Interest receivable - 6,300 1,274 Restricted cash and investments 67,982 1,491,388 626,606 Total assets $ 327,877 $ 1,537,366 $ 636,034 DEFERRED INFLOWS OF RESOURCES Resources not yet available: Special assessments/liens $ 259,895 $ - $ - Property taxes - 26,397 6,722 Total deferred inflows of resources 259,895 26,397 6,722 FUND BALANCES Restricted for debt service 67,982 1,510,969 629,312 Total deferred inflows of resources and fund balances $ 327,877 $ 1,537,366 $ 636,034 148 Tigard Triangle Debt Service Fund Total $ - $ 47,832 - 259,895 - 7,574 - 2,185,976 $ - $ 2,501,277 $ - $ 259,895 33,119 - 293,014 - 2,208,263 $ - $ 2,501,277 149 CITY OF TIGARD,OREGON NONMAJOR DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCES for the year ended June 30,2019 Bancroft Bond General City Center Urban Debt Service Obligation Debt Renewal Debt Fund Service Fund Service Fund REVENUES Taxes $ - $ 2,400,938 $ 521,050 Collection of bonded assessments 59,999 - - Interest earnings 29,269 44,526 16,132 Total revenues 89,268 2,445,464 537,182 EXPENDITURES Debt service: Principal 95,800 1,505,000 130,000 Interest 7,347 692,625 28,986 Total expenditures 103,147 2,197,625 158,986 Change in fund balance before other financing sources(uses) (13,879) 247,839 378,196 OTHER FINANCING SOURCES(USES) Transfer out - - (187,706) Change in fund balance (13,879) 247,839 190,490 Fund balance-Beginning of the year 81,861 1,263,130 438,822 Fund balance-End of the year $ 67,982 $ 1,510,969 $ 629,312 150 Tigard Triangle Debt Service Fund Total $ - $ 2,921,988 - 59,999 - 89,927 - 3,071,914 - 1,730,800 - 728,958 - 2,459,758 - 612,156 (187,706) - 424,450 1,783,813 $ - $ 2,208,263 151 CITY OF TIGARD,OREGON BANCROFT BOND DEBT SERVICE FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Collection of bonded assessments $ 60,000 $ 60,000 $ 59,999 $ (1) Interest earnings 10,000 10,000 29,269 19,269 Total revenues 70,000 70,000 89,268 19,268 EXPENDITURES *Debt service: Principal 95,000 95,000 95,800 (800) Interest 12,000 12,000 7,347 4,653 Total expenditures 107,000 107,000 103,147 3,853 Change in fund balance before other financing sources(uses) (37,000) (37,000) (13,879) 23,121 OTHER FINANCING SOURCES(USES) Reserve for future expenditures (22,130) (22,130) - 22,130 Total other financing sources(uses) (22,130) (22,130) - 22,130 Change in fund balance (59,130) (59,130) (13,879) 45,251 Fund balance-Beginning of the year 59,130 59,130 81,861 22,731 Fund balance-End of the year $ - $ - $ 67,982 $ 67,982 152 CITY OF TIGARD,OREGON GENERAL OBLIGATION DEBT SERVICE FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Taxes $ 2,212,005 $ 2,212,005 $ 2,400,938 $ 188,933 Interest earnings 4,612 4,612 44,526 39,914 Total revenues 2,216,617 2,216,617 2,445,464 228,847 EXPENDITURES Debt service: Principal 1,510,000 1,510,000 1,505,000 5,000 Interest 715,000 715,000 692,625 22,375 Total expenditures 2,225,000 2,225,000 2,197,625 27,375 Change in fund balance before other financing sources(uses) (8,383) (8,383) 247,839 256,222 OTHER FINANCING SOURCES(USES) Reserve for future expenditures (1,090,790) (1,090,790) - 1,090,790 Total other financing sources(uses) (1,090,790) (1,090,790) - 1,090,790 Change in fund balance (1,099,173) (1,099,173) 247,839 1,347,012 Fund balance-Beginning of the year 1,099,173 1,099,173 1,263,130 163,957 Fund balance-End of the year $ - $ - $ 1,510,969 $ 1,510,969 153 CITY OF TIGARD,OREGON CITY CENTER URBAN RENEWAL DEBT SERVICE FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Property taxes $ 492,519 $ 492,519 $ 521,050 $ 28,531 Interest earnings 1,500 1,500 16,132 14,632 Total revenues 494,019 494,019 537,182 43,163 EXPENDITURES Debt service: Principal 133,500 133,500 130,000 3,500 Interest 29,052 29,052 28,986 66 Total expenditures 162,552 162,552 158,986 3,566 Change in fund balance before other financing sources(uses) 331,467 331,467 378,196 46,729 OTHER FINANCING SOURCES(USES) Transfer out (306,000) (366,500) (187,706) 178,794 Reserve for future expenditure (189,467) (189,467) - 189,467 Total other financing sources(uses) (495,467) (555,967) (187,706) 368,261 Change in fund balance (164,000) (224,500) 190,490 414,990 Fund balance-Beginning of the year 164,000 224,500 438,822 214,322 Fund balance-End of the year $ - $ - $ 629,312 $ 629,312 154 CITY OF TIGARD,OREGON TIGARD TRIANGLE DEBT SERVICE FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Property taxes $ 382,689 $ 382,689 $ - $ (382,689) Change in fund balance before other financing sources(uses) 382,689 382,689 - (382,689) OTHER FINANCING SOURCES(USES) Transfers out (350,950) (350,950) - 350,950 Reserve for future expenditure (31,739) (31,739) - 31,739 Total other financing sources(uses) (382,689) (382,689) - 382,689 Change in fund balance - - - - Fund balance-Beginning of the year - - - - Fund balance-End of the year $ - $ - $ - $ - 155 No content appears on this page by design. 156 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. City Center 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 City Center Urban Renewal Debt Service Fund. Tigard Triangle Improvement Fund –This fund was established in FY 2016-17 for the creation of a new urban renewal agency to improve the Tigard Triangle area. Expenses are for capital improvements within the urban renewal plan. Resources are from financing proceeds or transfers in from the Tigard Triangle 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 the Traffic 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. Transportation Capital Improvement Project Fund–Accounts for capital improvement projects funded with transportation revenues; including Gas Tax, Traffic Impact Fees and Transportation Development Tax. 157 158 No content appears on this page by design. 159 CITY OF TIGARD,OREGON CAPITAL PROJECTS FUNDS COMBINING BALANCE SHEET June 30,2019 Underground Street Transportation Facility Utility Maintenance SDC Fund Fund Fee Fund Fund ASSETS Cash and investments $ 954,598 $ - $ 2,112,690 $ - Accounts receivable 731 363 353,348 3,335 Restricted cash and investments - 449,186 - 7,585,348 Total assets $ 955,329 $ 449,549 $ 2,466,038 $ 7,588,683 LIABILITIES Accounts payable and accrued liabilities $ 25,408 $ - $ 178,291 $ - DEFERRED INFLOWS OF RESOURCES Special assessments/liens - - - - FUND BALANCES(DEFICIT) Restricted for: Street maintenance and improvements - - - 7,588,683 Park development and improvements - - - - Underground utilities - 449,549 - - Urban development and improvements - - - - Committed for: Street maintenance and improvements - - 2,287,747 - Assigned to: City facilities 929,921 - - - Total fund balances 929,921 449,549 2,287,747 7,588,683 Total liabilities,deferred inflows of resources and fund balance $ 955,329 $ 449,549 $ 2,466,038 $ 7,588,683 160 Parks Parks City Center Captial Tigard Triangle Capital Bond Improvement Improvement Fund Fund Fund Fund Total $ - $ - $ - $ - $ 3,067,288 12,507 - - - 370,284 460,564 807,401 149,992 30,292 9,482,783 $ 473,071 $ 807,401 $ 149,992 $ 30,292 $ 12,920,355 $ 46,127 $ - $ 2,828 $ 30,292 $ 282,946 70,452 - - - 70,452 7,588,683 356,492 807,401 - - 1,163,893 - - 449,549 - 147,164 - 147,164 - - 2,287,747 - - 929,921 356,492 807,401 147,164 - 12,566,957 $ 473,071 $ 807,401 $ 149,992 $ 30,292 $ 12,920,355 161 CITY OF TIGARD,OREGON CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCE for the year ended June 30,2019 Underground Street Transportation Facility Utility Maintenance SDC Fund Fund Fee Fund Fund REVENUES Charges for services $ - $ 78,010 $ 2,877,728 $ - System development charges - - - 701,855 Intergovernmental revenues - - - - Rental revenues - - - - Interest earnings 20,239 10,693 40,182 214,756 Miscellaneous revenues 202 - 61,878 - Total revenues 20,441 88,703 2,979,788 916,611 EXPENDITURES Community development - - - - Capital projects 341,355 - 2,381,411 - Total expenditures 341,355 - 2,381,411 - Change in fund balance before other financing sources(uses) (320,914) 88,703 598,377 916,611 OTHER FINANCING SOURCES(USES) Transfer in 336,873 - - - Transfer out - (1,740) (488,907) (109,845) Debt proceeds - - - - Total other financing sources(uses) 336,873 (1,740) (488,907) (109,845) Change in fund balance 15,959 86,963 109,470 806,766 Fund balance-Beginning of the year 913,962 362,586 2,178,277 6,781,917 Fund balance-End of the year $ 929,921 $ 449,549 $ 2,287,747 $ 7,588,683 162 Parks Parks City Center Captial Tigard Triangle Capital Bond Improvement Improvement Fund Fund Fund Fund Total $ - $ - $ - $ - $ 2,955,738 - - 701,855 1,174,200 - 4,349 10,000 1,188,549 - - 107,371 - 107,371 30,936 50 - 316,856 43,281 - 2,440 - 107,801 1,217,481 30,936 114,210 10,000 5,378,170 - - 130,583 193,273 323,856 3,559,809 - 57,124 - 6,339,699 3,559,809 - 187,707 193,273 6,663,555 (2,342,328) 30,936 (73,497) (183,273) (1,285,385) 2,079,547 - 187,706 - 2,604,126 (821,066) - - (1,421,558) - - - 183,273 183,273 2,079,547 (821,066) 187,706 183,273 1,365,841 (262,781) (790,130) 114,209 - 80,456 619,273 1,597,531 32,955 - 12,486,501 $ 356,492 $ 807,401 $ 147,164 $ - $ 12,566,957 163 CITY OF TIGARD,OREGON FACILITY FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Interest earnings $ 3,212 $ 3,212 $ 20,239 $ 17,027 Miscellaneous revenues - - 202 202 Total revenues 3,212 3,212 20,441 17,229 EXPENDITURES Capital projects 120,000 470,000 341,355 128,645 Change in fund balance before other financing sources(uses) (116,788) (466,788) (320,914) 145,874 OTHER FINANCING SOURCES(USES) Transfer in 100,000 450,000 336,873 (113,127) Contingency (50,000) (50,000) - 50,000 Reserve for future expenditures (958,199) (958,199) - 958,199 Total other financing sources(uses) (908,199) (558,199) 336,873 895,072 Change in fund balance (1,024,987) (1,024,987) 15,959 1,040,946 Fund balance-Beginning of the year 1,024,987 1,024,987 913,962 (111,025) Fund balance-End of the year $ - $ - $ 929,921 $ 929,921 164 CITY OF TIGARD,OREGON UNDERGROUND UTILITY FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Charges for services $ 124,817 $ 124,817 $ 78,010 $ (46,807) Interest earnings 7,160 7,160 10,693 3,533 Total revenues 131,977 131,977 88,703 (43,274) OTHER FINANCING SOURCES(USES) Transfer out (21,635) (21,635) (1,740) 19,895 Contingency (50,000) (50,000) - 50,000 Reserve for future expenditures (228,916) (228,916) - 228,916 Total other financing uses (300,551) (300,551) (1,740) 298,811 Change in fund balance (168,574) (168,574) 86,963 255,537 Fund balance-Beginning of the year 168,574 168,574 362,586 194,012 Fund balance-End of the year $ - $ - $ 449,549 $ 449,549 165 CITY OF TIGARD,OREGON STREET MAINTENANCE FEE FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Charges for services $ 2,993,611 $ 2,993,611 $ 2,877,728 $ (115,883) Interest earnings 2,043 2,043 40,182 38,139 Miscellaneous revenues 1,299 1,299 61,878 60,579 Total revenues 2,996,953 2,996,953 2,979,788 (17,165) EXPENDITURES Capital projects 2,800,000 2,800,000 2,381,411 418,589 Change in fund balance before other financing sources(uses) 196,953 196,953 598,377 401,424 OTHER FINANCING SOURCES(USES) Transfer out (488,907) (492,154) (488,907) 3,247 Contingency (200,000) (196,753) - 196,753 Reserve for future expenditures (1,865,651) (1,865,651) - 1,865,651 Total other financing sources(uses) (2,554,558) (2,554,558) (488,907) 2,065,651 Change in fund balance (2,357,605) (2,357,605) 109,470 2,467,075 Fund balance-Beginning of the year 2,357,605 2,357,605 2,178,277 (179,328) Fund balance-End of the year $ - $ - $ 2,287,747 $ 2,287,747 166 CITY OF TIGARD,OREGON TRANSPORTATION SDC FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES System development charges $ 855,540 $ 855,540 $ 701,855 $ (153,685) Interest earnings 500 500 214,756 214,256 Total revenues 856,040 856,040 916,611 60,571 OTHER FINANCING SOURCES(USES) Transfer out (100,000) (201,406) (109,845) 91,561 Contingency (50,000) (30,000) - 30,000 Reserve for future expenditures (5,792,842) (5,792,842) - 5,792,842 Total other financing sources(uses) (5,942,842) (6,024,248) (109,845) 5,914,403 Change in fund balance (5,086,802) (5,168,208) 806,766 5,974,974 Fund balance-Beginning of the year 5,086,802 5,168,208 6,781,917 1,613,709 Fund balance-End of the year $ - $ - $ 7,588,683 $ 7,588,683 167 CITY OF TIGARD,OREGON PARKS CAPITAL FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Intergovernmental revenues $ 2,002,398 $ 2,175,398 $ 1,174,200 $ (1,001,198) Interest earnings 3,015 3,015 - (3,015) Miscellaneous revenues - - 43,281 43,281 Total revenues 2,005,413 2,178,413 1,217,481 (960,932) EXPENDITURES Capital projects 5,988,500 7,444,200 3,559,809 3,884,391 Change in fund balance before other financing sources(uses) (3,983,087) (5,265,787) (2,342,328) 2,923,459 OTHER FINANCING SOURCES(USES) Transfer in 3,986,102 5,268,802 2,079,547 (3,189,255) Reserve for future expenditures (562,051) (562,051) - 562,051 Total other financing sources(uses) 3,424,051 4,706,751 2,079,547 (2,627,204) Change in fund balance (559,036) (559,036) (262,781) 296,255 Fund balance-Beginning of the year 559,036 559,036 619,273 60,237 Fund balance-End of the year $ - $ - $ 356,492 $ 356,492 168 CITY OF TIGARD,OREGON PARKS BOND FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Interest earnings $ 2,000 $ 2,000 $ 30,936 $ 28,936 OTHER FINANCING SOURCES(USES) Transfer out (1,279,000) (1,433,000) (821,066) 611,934 Reserve for future expenditures (114,805) (114,805) - 114,805 Total other financing uses (1,393,805) (1,547,805) (821,066) 726,739 Change in fund balance (1,391,805) (1,545,805) (790,130) 755,675 Fund balance-Beginning of the year 1,391,805 1,545,805 1,597,531 51,726 Fund balance-End of the year $ - $ - $ 807,401 $ 807,401 169 CITY OF TIGARD,OREGON CITY CENTER CAPITAL IMPROVEMENTS FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Intergovernmental revenues $ - $ - $ 4,349 $ 4,349 Rental revenues 95,000 95,000 107,371 12,371 Interest earnings - - 50 50 Miscellaneous revenues 390,000 390,000 2,440 (387,560) Total revenues 485,000 485,000 114,210 (370,790) EXPENDITURES * Capital projects 400,950 461,450 187,707 273,743 Change in fund balance before other financing sources(uses) 84,050 23,550 (73,497) (97,047) OTHER FINANCING SOURCES(USES) Transfer in 306,000 366,500 187,706 (178,794) Total other financing sources 306,000 366,500 187,706 (178,794) Change in fund balance 390,050 390,050 114,209 (275,841) Fund balance-Beginning of the year - - 32,955 32,955 Fund balance-End of the year $ 390,050 $ 390,050 $ 147,164 $ (242,886) * For budgetary puposes expenditures are appropriated as capital projects, however on the GAAP statements non-capital transactions are recorded as program expenditures 170 CITY OF TIGARD,OREGON TIGARD TRIANGLE CAPITAL IMPROVEMENTS FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Intergovernmental revenues $ 340,246 $ 340,246 $ 10,000 $ (330,246) EXPENDITURES Community development 690,196 690,196 193,273 496,923 * Capital projects 1,000 1,000 - 1,000 Total expenditures 691,196 691,196 193,273 497,923 Change in fund balance before other financing sources(uses) (350,950) (350,950) (183,273) 167,677 OTHER FINANCING SOURCES(USES) Transfer in 350,950 350,950 - (350,950) Debt proceeds - - 183,273 183,273 Total other financing sources 350,950 350,950 183,273 (167,677) Change in fund balance - - - - Fund balance-Beginning of the year - - - - Fund balance-End of the year $ - $ - $ - $ - * For budgetary puposes expenditures are appropriated as capital projects, however on the GAAP statements non-capital transactions are recorded as program expenditures 171 CITY OF TIGARD,OREGON TRANSPORTATION DEVELOPMENT TAX FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES System development charges $ 1,190,700 $ 1,190,700 $ 2,043,589 $ 852,889 Interest earnings 11,279 11,279 339,322 328,043 Total revenues 1,201,979 1,201,979 2,382,911 1,180,932 OTHER FINANCING SOURCES(USES) Transfer out (1,040,945) (3,314,371) (2,346,808) 967,563 Contingency (250,000) (250,000) - 250,000 Reserve for future expenditures (8,238,513) (8,238,513) - 8,238,513 Total other financing sources(uses) (9,529,458) (11,802,884) (2,346,808) 9,456,076 Change in fund balance (8,327,479) (10,600,905) 36,103 10,637,008 Fund balance-Beginning of the year 8,327,479 10,600,905 11,571,498 970,593 Fund balance-End of the year $ - $ - $ 11,607,601 $ 11,607,601 172 CITY OF TIGARD,OREGON PARKS SDC FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES System development charges $ 728,351 $ 728,351 $ 1,495,466 $ 767,115 Interest earnings 19,782 19,782 291,559 271,777 Total revenues 748,133 748,133 1,787,025 1,038,892 OTHER FINANCING SOURCES(USES) Transfer out (2,572,601) (3,562,301) (1,118,678) 2,443,623 Contingency (80,000) (80,000) - 80,000 Reserve for future expenditures (6,785,773) (6,785,773) - 6,785,773 Total other financing sources(uses) (9,438,374) (10,428,074) (1,118,678) 9,309,396 Change in fund balance (8,690,241) (9,679,941) 668,347 10,348,288 Fund balance-Beginning of the year 8,690,241 9,679,941 10,130,569 450,628 Fund balance-End of the year $ - $ - $ 10,798,916 $ 10,798,916 173 CITY OF TIGARD,OREGON TRANSPORTATION CIP FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Intergovernmental revenues $ 1,133,230 $ 2,132,905 $ 1,055,380 $ (1,077,525) Miscellaneous revenues 195,000 927,325 919,396 (7,929) Charges for services - - 32,831 32,831 Interest earnings - - 4,051 4,051 Total revenues 1,328,230 3,060,230 2,011,658 (1,048,572) EXPENDITURES Capital projects 3,473,230 7,565,062 4,747,819 2,817,243 Total expenditures 3,473,230 7,565,062 4,747,819 2,817,243 Change in fund balance before other financing sources(uses) (2,145,000) (4,504,832) (2,736,161) 1,768,671 OTHER FINANCING SOURCES(USES) Transfer in 2,145,000 4,504,832 2,973,271 (1,531,561) Reserve for future expenditures (1,058,100) (1,058,100) - 1,058,100 Total other financing sources 1,086,900 3,446,732 2,973,271 (473,461) Change in fund balance (1,058,100) (1,058,100) 237,110 1,295,210 Fund balance-Beginning of the year 1,058,100 1,058,100 596,880 (461,220) Fund balance-End of the year $ - $ - $ 833,990 $ 833,990 174 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. 175 176 CITY OF TIGARD,OREGON SANITARY SEWER FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Charges for services $ 2,867,135 $ 2,867,135 $ 3,389,281 $ 522,146 Connection fees 42,200 42,200 132,207 90,007 Intergovernmental revenues 1,285,835 1,285,835 - (1,285,835) Interest earnings 10,333 10,333 163,890 153,557 Miscellaneous revenues 13,091 13,091 138,165 125,074 Total revenues 4,218,594 4,218,594 3,823,543 (395,051) EXPENDITURES Public works 2,668,472 2,728,072 2,638,795 89,277 Capital projects 859,200 859,200 154,342 704,858 Total expenditures 3,527,672 3,587,272 2,793,137 794,135 Change in fund balance before other financing sources(uses) 690,922 631,322 1,030,406 399,084 OTHER FINANCING SOURCES(USES) Transfer in 218,100 218,100 42,860 (175,240) Transfer out (823,263) (826,350) (164,457) 661,893 Contingency (400,000) (337,313) - 337,313 Reserve for future expenditures (3,955,879) (3,955,879) - 3,955,879 Total other financing sources(uses) (4,961,042) (4,901,442) (121,597) 4,779,845 Change in fund balance (4,270,120) (4,270,120) 908,809 5,178,929 Fund balance-Beginning of the year 4,270,120 4,270,120 5,386,207 1,116,087 Fund balance-End of the year $ - $ - $ 6,295,016 $ 6,295,016 177 CITY OF TIGARD,OREGON SANITARY SEWER FUND RECONCILIATION OF BUDGETARY REVENUES AND EXPENDITURES TO PROPRIETARY REVENUES AND EXPENSES for the year ended June 30,2019 Operating and Non-Operating Expenditures/ Revenues Expenses Budgetary basis $ 3,866,403 $ 2,793,137 Unavailable revenue (5,751) - Contributed capital 403,287 - Compensated absences - 1,816 Expenditures capitalized - (465,552) Depreciation expense - 799,408 Net OPEB obligation - (326) Operating and non-operating revenue and expenses-GAAP basis $ 4,263,939 $ 3,128,483 178 CITY OF TIGARD,OREGON STORM WATER FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Charges for services $ 2,848,455 $ 2,848,455 $ 3,812,133 $ 963,678 Licenses and permits - - 15,969 15,969 Interest earnings 7,936 7,936 175,203 167,267 Miscellaneous revenues 3,100 3,100 8,909 5,809 Total revenues 2,859,491 2,859,491 4,012,214 1,152,723 EXPENDITURES Public works 2,969,785 3,064,435 2,745,348 319,087 Capital projects 2,293,600 2,293,600 493,958 1,799,642 Total expenditures 5,263,385 5,358,035 3,239,306 2,118,729 Change in fund balance before other financing sources(uses) (2,403,894) (2,498,544) 772,908 3,271,452 OTHER FINANCING USES Transfer in 681,250 681,250 84,544 (596,706) Transfer out (433,278) (436,468) (212,623) 223,845 Contingency (200,000) (102,160) - 102,160 Reserve for future expenditures (3,077,884) (3,077,884) - 3,077,884 Total other financing uses (3,029,912) (2,935,262) (128,079) 2,807,183 Change in fund balance (5,433,806) (5,433,806) 644,829 6,078,635 Fund balance-Beginning of the year 5,433,806 5,433,806 7,138,714 1,704,908 Fund balance-End of the year $ - $ - $ 7,783,543 $ 7,783,543 179 CITY OF TIGARD,OREGON WATER QUALITY/QUANTITY FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Charges for services $ - $ - $ 2,180 $ 2,180 Interest earnings 15,102 15,102 32,050 16,948 Total revenues 15,102 15,102 34,230 19,128 OTHER FINANCING SOURCES(USES) Transfer out (56,421) (56,421) - 56,421 Contingency (50,000) (50,000) - 50,000 Reserve for future expenditures (1,157,668) (1,157,668) - 1,157,668 Total other financing sources(uses) (1,264,089) (1,264,089) - 1,264,089 Change in fund balance (1,248,987) (1,248,987) 34,230 1,283,217 Fund balance-Beginning of the year 1,248,987 1,248,987 1,254,609 5,622 Fund balance-End of the year $ - $ - $ 1,288,839 $ 1,288,839 180 CITY OF TIGARD,OREGON STORMWATER FUNDS RECONCILIATION OF BUDGETARY REVENUES AND EXPENDITURES TO PROPRIETARY REVENUES AND EXPENSES for the year ended June 30,2019 Operating and Non-operating Expenditures/ Revenues Expenses Stormwater $ 4,096,758 $ 3,451,929 Water Quality/Quantity 34,230 - Total,budgetary basis 4,130,988 3,451,929 Contributed capital 615,727 - Compensated absences - 270 Expenditures capitalized - (564,353) Depreciation expense - 587,092 Net OPEB obligation - (1,003) Operating and non-operating revenue and expenses-GAAP basis $ 4,746,715 $ 3,473,935 181 CITY OF TIGARD,OREGON WATER FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Charges for services $ 21,538,429 $ 21,538,429 $ 23,751,073 $ 2,212,644 Interest earnings 30,644 30,644 742,046 711,402 Miscellaneous revenues 10,933 10,933 502,424 491,491 Total revenues 21,580,006 21,580,006 24,995,543 3,415,537 EXPENDITURES Public works 8,106,244 8,420,594 6,618,117 1,802,477 Change in fund balance before other financing sources(uses) 13,473,762 13,159,412 18,377,426 5,218,014 OTHER FINANCING SOURCES(USES) Transfer in 58,751 58,751 58,751 - Transfer out (10,576,100) (10,684,238) (9,148,864) 1,535,374 Contingency (500,000) (175,512) - 175,512 Reserve for future expenditures (20,236,132) (20,236,132) - 20,236,132 Total other financing sources(uses) (31,253,481) (31,037,131) (9,090,113) 21,947,018 Change in fund balance (17,779,719) (17,877,719) 9,287,313 27,165,032 Fund balance-Beginning of the year 17,779,719 17,877,719 25,963,968 8,086,249 Fund balance-End of the year $ - $ - $ 35,251,281 $ 35,251,281 182 CITY OF TIGARD,OREGON WATER SDC FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES System development charges $ 1,466,005 $ 1,466,005 $ 1,870,435 $ 404,430 Interest earnings 233 233 343,069 342,836 Total revenues 1,466,238 1,466,238 2,213,504 747,266 OTHER FINANCING SOURCES(USES) Transfer out (726,000) (1,556,721) (1,166,581) 390,140 Contingency (100,000) (100,000) - 100,000 Reserve for future expenditures (8,688,870) (8,688,870) - 8,688,870 Total other financing sources(uses) (9,514,870) (10,345,591) (1,166,581) 9,179,010 Change in fund balance (8,048,632) (8,879,353) 1,046,923 9,926,276 Fund balance-Beginning of the year 8,048,632 8,879,353 11,856,589 2,977,236 Fund balance-End of the year $ - $ - $ 12,903,512 $ 12,903,512 183 CITY OF TIGARD,OREGON WATER CIP FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Interest earnings $ 13,096 $ 13,096 $ - $ (13,096) Investment valuation adjustment - - (34,693) (34,693) Miscellaneous revenues - - 2,922 2,922 Total revenues 13,096 13,096 (31,771) (44,867) EXPENDITURES Capital projects 2,615,500 3,544,221 1,559,313 1,984,908 Change in fund balance before other financing sources(uses) (2,602,404) (3,531,125) (1,591,084) 1,940,041 OTHER FINANCING SOURCES(USES) Transfer in 2,615,500 3,544,221 1,655,913 (1,888,308) Reserve for future expenditures (1,937,546) (1,937,546) - 1,937,546 Total other financing sources(uses) 677,954 1,606,675 1,655,913 49,238 Change in fund balance (1,924,450) (1,924,450) 64,829 1,989,279 Fund balance-Beginning of the year 1,924,450 1,924,450 1,413,195 (511,255) Fund balance-End of the year $ - $ - $ 1,478,024 $ 1,478,024 184 CITY OF TIGARD,OREGON WATER DEBT SERVICE FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Interest earnings $ 45,000 $ 45,000 $ 185,269 $ 140,269 EXPENDITURES Debt service: Principal 2,305,000 2,305,000 2,292,092 12,908 Interest 6,120,000 6,120,000 6,098,041 21,959 Total expenditures 8,425,000 8,425,000 8,390,133 34,867 Change in fund balance before other financing sources(uses) (8,380,000) (8,380,000) (8,204,864) 175,136 OTHER FINANCING SOURCES(USES) Transfer in 8,408,000 8,408,000 8,390,133 (17,867) Reserve for future expenditures (6,909,562) (6,909,562) - 6,909,562 Total other financing sources(uses) 1,498,438 1,498,438 8,390,133 6,891,695 Change in fund balance (6,881,562) (6,881,562) 185,269 7,066,831 Fund balance-Beginning of the year 6,881,562 6,881,562 6,955,380 73,818 Fund balance-End of the year $ - $ - $ 7,140,649 $ 7,140,649 185 CITY OF TIGARD,OREGON WATER FUNDS RECONCILIATION OF BUDGETARY REVENUES AND EXPENDITURES TO PROPRIETARY REVENUES AND EXPENSES for the year ended June 30,2019 Operating and Non-operating Expenditures/ Revenues Expenses Water $ 25,054,294 $ 15,766,981 Water SDC 2,213,504 1,166,581 Water CIP 1,624,142 1,559,313 Water Debt Service 8,575,402 8,390,133 Total,budgetary basis 37,467,342 26,883,008 Contributed capital 251,323 - Loss on investment in joint venture (8,440) - Elimination of water interfund transfers (10,046,046) (10,046,046) Compensated absences - 1,647 Expenditures capitalized - (447,763) Principal payments - (2,292,092) Accrued interest - (37,315) Amortization of bond premium - (535,335) Depreciation expense - 3,971,175 Net OPEB obligation - (12,987) Operating and non-operating revenue and expenses-GAAP basis $ 27,664,179 $ 17,484,292 186 CITY OF TIGARD,OREGON ENTERPRISE FUNDS RECONCILIATION OF BUDGETARY FUND BALANCE TO GENERALLY ACCEPTED ACCOUNTING PRINCIPLES BASIS NET POSITION June 30,2019 Total Total Total Sanitary Sewer Stormwater Water Sanitary Sewer Fund $ 6,295,016 $ - $ - Stormwater Fund - 7,783,543 - Water Quality/Quantity Fund - 1,288,839 - Water Fund - - 35,251,281 Water SDC Fund - - 12,903,512 Water CIP Fund - - 1,478,024 Water Debt Service Fund - - 7,140,649 Fund balance-budget basis 6,295,016 9,072,382 56,773,466 Adjustments from budgetary basis to generally accepted accounting principles basis: Capital assets, net 19,830,058 13,495,524 209,415,236 Investment in joint venture - - 1,005,705 Sewer funds payable (21,781) - - Assets held for resale 185,021 260,021 - Unavailable revenue 22,330 - - Compensated absences (27,414) (32,463) (48,807) Long-term debt - - (132,751,532) Accrued interest payable - - (2,543,751) Interfund loans 102,320 - - Deferred Outflow OPEB 2,169 3,098 3,924 Deferred Inflow OPEB (7,289) (10,413) (13,191) OPEB liability (25,270) (36,102) (45,731) Total Net Position-GAAP basis $ 26,355,160 $ 22,752,047 $ 131,795,323 187 No content appears on this page by design. 188 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. Public Works Administration Fund — Accounts for activity related to the administration of public works in the city. Resources are charges for services to city departments and internal customers. Public Works Engineering Fund — Accounts for activity related to engineering in the city. 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. 189 190 No content appears on this page by design. 191 CITY OF TIGARD, OREGON INTERNAL SERVICE FUNDS COMBINING STATEMENT OF NET POSITION June 30, 2019 Central Public Works Services Administration Fund Fund ASSETS Cash and investments $ 2,736,038 $ 552,167 Accounts receivable 19,143 - Prepaids 32,830 - Inventory - - Total assets 2,788,011 552,167 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to OPEB 16,527 5,701 LIABILITIES Accounts payable and accrued liabilities 417,694 40,939 Customer deposits - - Unearned revenue 16,500 - Accrued compensated absences 273,373 58,706 Net OPEB obligation 192,585 66,437 Total liabilities 900,152 166,082 DEFERRED INFLOWS OF RESOURCES Deferred inflows related to OPEB 55,548 19,163 NET POSITION Net position, unrestricted $ 1,848,838 $ 372,623 192 Public Works Fleet/Property Engineering Management Insurance Fund Fund Fund Total $ 1,575,689 $ 836,565 $ 1,536,785 $ 7,237,244 - - 1,315 20,458 3,200 36,030 16,105 - 16,105 1,575,689 852,670 1,541,300 7,309,837 11,238 3,306 - 36,772 101,696 180,364 1,009 741,702 42,662 - - 42,662 16,500 67,262 38,351 256 437,948 130,956 38,520 - 428,498 342,576 257,235 1,265 1,667,310 37,772 11,111 - 123,594 $ 1,206,579 $ 587,630 $ 1,540,035 $ 5,555,705 193 CITY OF TIGARD, OREGON INTERNAL SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION for the year ended June 30, 2019 Central Public Works Services Administration Fund Fund OPERATING REVENUES Charges for services $ 7,895,582 $ 2,002,875 Miscellaneous revenues 38,703 571 Total operating revenues 7,934,285 2,003,446 OPERATING EXPENSES Salaries and wages 5,038,360 1,108,966 Contracted services 839,110 71,206 General, administrative and other 2,314,952 855,549 Total operating expenses 8,192,422 2,035,721 Operating income (loss) (258,137) (32,275) NONOPERATING REVENUE Interest revenue 39,967 - Income (loss) before contrigutions and transfers (218,170) (32,275) CONTRIBUTIONS AND TRANSFERS Transfer in 505,023 404,898 Change in net position 286,853 372,623 Net position - Beginning of year, as originally stated 1,561,985 Net position - End of year $ 1,848,838 $ 372,623 194 Public Works Fleet/Property Engineering Management Insurance Fund Fund Fund Total $ 4,210,587 $ 2,409,111 $ - $ 16,518,155 832 1,592 262,190 303,888 4,211,419 2,410,703 262,190 16,822,043 2,277,371 885,003 21,644 9,331,344 172,390 314,947 - 1,397,653 1,256,362 932,663 11,688 5,371,214 3,706,123 2,132,613 33,332 16,100,211 505,296 278,090 228,858 721,832 6,500 100 26,565 73,132 511,796 278,190 255,423 794,964 694,783 - - 1,604,704 1,206,579 278,190 255,423 2,399,668 - 309,440 1,284,612 3,156,037 $ 1,206,579 $ 587,630 $ 1,540,035 $ 5,555,705 195 CITY OF TIGARD,OREGON INTERNAL SERVICE FUNDS COMBINING STATEMENT OF CASH FLOWS for the year ended June 30,2019 Public Works Central Services Administration Fund Fund CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 7,945,093 $ 2,002,874 Payments to suppliers (2,996,446) (885,815) Payments to employees (5,058,460) (970,361) Other receipts 38,703 571 Net cash provided(used)by operating activities (71,110) 147,269 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfer from other funds 505,023 404,898 CASH FLOWS FROM INVESTING ACTIVITIES Interest earnings 39,967 Net increase in cash and investments 473,880 552,167 Cash and investments--beginning of the year 2,262,158 - Cash and investments--end of the year $ 2,736,038 $ 552,167 RECONCILIATION OF OPERATING INCOME(LOSS)TO NET CASH PROVIDED(USED)BY OPERATING ACTIVITIES Operating income(loss) $ (258,137) $ (32,275) Adjustments to reconcile operating income(loss)to net cash provided(used)by operating activities CHANGE IN ASSETS AND LIABILITIES Receivables 49,511 - Prepaids 117,989 - Inventory - - Accounts Payable 39,627 40,940 Customer Deposits - - Accrued compensated absences (28,349) 58,706 Net OPEB Obligation 8,249 79,898 Net cash provided(used)by operating activities $ (71,110) $ 147,269 196 Public Works Fleet/Property Engineering Management Insurance Fund Fund Fund Total $ 4,253,249 $ 2,415,276 $ - $ 16,616,492 (1,327,056) (1,194,558) (14,854) (6,418,729) (2,052,619) (864,224) (21,388) (8,967,052) 832 1,592 261,320 303,018 874,406 358,086 225,078 1,533,729 694,783 - - 1,604,704 6,500 100 26,565 73,132 1,575,689 358,186 251,643 3,211,565 - 478,379 1,285,142 4,025,679 $ 1,575,689 $ 836,565 $ 1,536,785 $ 7,237,244 $ 505,296 $ 278,090 $ 228,858 $ 721,832 - 2,325 (870) 50,966 - 3,840 (3,200) 118,629 - 11,496 - 11,496 101,696 41,556 34 223,853 42,662 - - 42,662 67,262 11,718 256 109,593 157,490 9,061 - 254,698 $ 874,406 $ 358,086 $ 225,078 $ 1,533,729 197 CITY OF TIGARD,OREGON CENTRAL SERVICES FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Charges for services $ 8,393,613 $ 8,548,613 $ 7,895,582 $ (653,031) Intergovernmental revenues - 74,900 - (74,900) Interest earnings 22,593 22,593 39,967 17,374 Miscellaneous revenues 13,400 107,100 38,703 (68,397) Total revenues 8,429,606 8,753,206 7,974,252 (778,954) EXPENDITURES Policy and administration 8,588,675 9,174,455 8,184,173 990,282 Total expenditures 8,588,675 9,174,455 8,184,173 990,282 Change in fund balance before other financing sources(uses) (159,069) (421,249) (209,921) 211,328 OTHER FINANCING SOURCES(USES) Transfer in 470,630 641,050 505,023 (136,027) Contingency (250,000) (169,520) - 169,520 Reserve for future expenditures (1,086,958) (1,086,958) - 1,086,958 Total other financing sources(uses) (866,328) (615,428) 505,023 1,120,451 Change in fund balance (1,025,397) (1,036,677) 295,102 1,331,779 Fund balance-Beginning of the year 1,025,397 1,036,677 1,785,342 748,665 Fund balance-End of the year $ - $ - 2,080,444 $ 2,080,444 Reconciliation of budgetary fund balance to GAAP basis net position: Net OPEB liability (192,585) Deferred Outflow OPEB 16,527 Deferred Inflow OPEB (55,548) Total net position,GAAP basis $ 1,848,838 198 CITY OF TIGARD,OREGON PUBLIC WORKS ADMINISTRATION FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Charges for services $ 2,017,775 $ 2,017,775 $ 2,002,875 $ (14,900) Intergovernmental revenues - 15,100 - (15,100) Miscellaneous revenues - - 571 571 Total revenues 2,017,775 2,032,875 2,003,446 (29,429) EXPENDITURES Policy and administration 2,101,448 2,151,548 1,955,822 195,726 Change in fund balance before other financing sources(uses) (83,673) (118,673) 47,624 166,297 OTHER FINANCING SOURCES(USES) Transfer in 389,124 424,124 404,898 (19,226) Contingency (100,000) (100,000) - 100,000 Reserve for future expenditures (205,451) (205,451) - 205,451 Total other financing sources(uses) 83,673 118,673 404,898 286,225 Change in fund balance - - 452,522 452,522 Fund balance-Beginning of the year - - - - Fund balance-End of the year $ - $ - 452,522 $ 452,522 Reconciliation of budgetary fund balance to GAAP basis net position: Net OPEB liability (66,437) Deferred Outflow OPEB 5,701 Deferred Inflow OPEB (19,163) Total net position,GAAP basis $ 372,623 199 CITY OF TIGARD,OREGON PUBLIC WORKS ENGINEERING FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Charges for services $ 3,248,604 $ 3,248,604 $ 4,210,587 $ 961,983 Interest earnings - - 6,500 6,500 Miscellaneous revenues - - 832 832 Total revenues 3,248,604 3,248,604 4,217,919 969,315 EXPENDITURES Policy and administration 3,718,753 3,728,563 3,548,633 179,930 Change in fund balance before other financing sources(uses) (470,149) (479,959) 669,286 1,149,245 OTHER FINANCING SOURCES(USES) Transfer in 941,288 941,288 694,783 (246,505) Contingency (100,000) (90,190) - 90,190 Reserve for future expenditures (371,139) (371,139) - 371,139 Total other financing sources(uses) 470,149 479,959 694,783 214,824 Change in fund balance - - 1,364,069 1,364,069 Fund balance-Beginning of the year - - - - Fund balance-End of the year $ - $ - 1,364,069 $ 1,364,069 Reconciliation of budgetary fund balance to GAAP basis net position: Net OPEB liability (130,956) Deferred Outflow OPEB 11,238 Deferred Inflow OPEB (37,772) Total net position,GAAP basis $ 1,206,579 200 CITY OF TIGARD,OREGON FLEET/PROPERTY MANAGEMENT FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Charges for services $ 2,409,111 $ 2,409,111 $ 2,409,111 $ - Interest earnings 2,000 2,000 100 (1,900) Miscellaneous revenues 29,686 29,686 1,592 (28,094) Total revenues 2,440,797 2,440,797 2,410,803 (29,994) EXPENDITURES Policy and administration 2,208,128 2,208,128 2,123,551 84,577 Change in fund balance before other financing sources(uses) 232,669 232,669 287,252 54,583 OTHER FINANCING SOURCES(USES) Transfer in 56,421 56,421 - (56,421) Contingency (200,000) (200,000) - 200,000 Reserve for future expenditures (272,648) (272,648) - 272,648 Total other financing sources(uses) (416,227) (416,227) - 416,227 Change in fund balance (183,558) (183,558) 287,252 470,810 Fund balance-Beginning of the year 183,558 183,558 346,703 163,145 Fund balance-End of the year $ - $ - 633,955 $ 633,955 Reconciliation of budgetary fund balance to GAAP basis net position: Net OPEB liability (38,520) Deferred Outflow OPEB 3,306 Deferred Inflow OPEB (11,111) Total net position,GAAP basis $ 587,630 201 CITY OF TIGARD,OREGON INSURANCE FUND SCHEDULE OF REVENUES AND EXPENDITURES-BUDGET AND ACTUAL for the year ended June 30,2019 Budgeted Amounts Variance Actual with final Original Final Amounts budget REVENUES Interest earnings $ 3,620 $ 3,620 $ 26,565 $ 22,945 Miscellaneous revenues 119,000 119,000 262,190 143,190 Total revenues 122,620 122,620 288,755 166,135 EXPENDITURES Policy and administration 64,408 64,408 33,332 31,076 Change in fund balance before other financing sources(uses) 58,212 58,212 255,423 197,211 OTHER FINANCING SOURCES(USES) Contingency (25,000) (25,000) - 25,000 Reserve for future expenditures (1,111,903) (1,111,903) - 1,111,903 Total other financing sources(uses) (1,136,903) (1,136,903) - 1,136,903 Change in fund balance (1,078,691) (1,078,691) 255,423 1,334,114 Fund balance-Beginning of the year 1,078,691 1,078,691 1,284,612 205,921 Fund balance-End of the year $ - $ - $ 1,540,035 $ 1,540,035 202 Other Schedules 203 204 CITY OF TIGARD,OREGON SCHEDULE OF BOND AND BOND INTEREST TRANSACTIONS For the fiscal year ended June 30,2019 Interest Transactions Original Outstanding Matured/ Outstanding Issue June 30,2018 Additions Called Paid Matured Paid June 30,2019 Bancroft Bonds Issued June 27,2002 $ 1,307,969 $ 124,219 $ - $ 95,800 $ (95,800) $ 28,419 $ 7,347 $ (7,347) General Obligation Bonds Issued February 3,2011 $ 8,655,000 $ 4,090,000 $ - $ 755,000 $ (755,000) $ 3,335,000 $ 148,500 $ (148,500) Issued June 21,2010 7,250,000 1,625,000 - 800,000 (800,000) 825,000 70,688 (70,688) Issued February 3,2011 17,000,000 12,555,000 - 750,000 (750,000) 11,805,000 544,125 (544,125) $ 18,270,000 $ - $2,305,000 $ (2,305,000) $ 15,965,000 $ 763,313 $ (763,313) Bank Loan Issued September 1,2014 $ 1,300,000 $ 910,000 $ - $ 130,000 $ (130,000) $ 780,000 $ 7,787 $ (7,787) Revenue Bonds Issued May 1,2012 $97,720,000 $ 93,915,000 $ - $2,015,000 $ (2,015,000) $ 91,900,000 $4,546,040 $ (4,546,040) Issued May 1,2015 30,810,000 30,485,000 - 170,000 (170,000) 30,315,000 1,497,900 (1,497,900) $ 124,400,000 $ - $2,185,000 $ (2,185,000) $ 122,215,000 $6,043,940 $ (6,043,940) Long-term Note Issued December 1,2011 $ 2,398,000 $ 1,803,034 $ - $ 107,092 $ (107,092) $ 1,695,942 $ 54,091 $ (54,091) 205 CITY OF TIGARD,OREGON SCHEDULE OF FUTURE DEBT SERVICE REQUIREMENTS OF LOCAL IMPROVEMENT DISTRICT BONDS For the fiscal year ended June 30,2019 Total Debt Service Requirement Issued June 27,2002 Fiscal Year Total Total 7.25% of Maturity Principal Interest Principal Interest 2020 $ 28,419 $ 1,021 $ 28,419 $ 1,021 206 CITY OF TIGARD,OREGON SCHEDULE OF FUTURE DEBT SERVICE REQUIREMENTS OF GENERAL OBLIGATION BONDS For the fiscal year ended June 30,2019 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 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 $ 15,965,000 $ 4,026,614 $ 3,335,000 $ 273,500 $ 825,000 $ 35,888 $ 11,805,000 $3,717,226 207 CITY OF TIGARD,OREGON SCHEDULE OF FUTURE DEBT SERVICE REQUIREMENTS OF BANK LOAN PAYABLE For the fiscal year ended June 30,2019 Total Debt Service Requirement Issued:September 1, 2014 Fiscal Year Total Total 3.00% of Maturity Principal Interest Principal Interest 2020 $ 780,000 $ 11,681 $ 780,000 $ 11,681 208 CITY OF TIGARD,OREGON SCHEDULE OF FUTURE DEBT SERVICE REQUIREMENTS OF WATER REVENUE BONDS For the fiscal year ended June 30,2019 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 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 2045 7,635,000 592,375 - - 7,635,000 592,375 2046 8,030,000 200,750 - - 8,030,000 200,750 $ 122,215,000 $ 99,991,175 $ 91,900,000 $ 65,598,575 $ 30,315,000 $ 34,392,600 209 CITY OF TIGARD,OREGON SCHEDULE OF FUTURE DEBT SERVICE REQUIREMENTS OF SAFE DRINKING WATER REVOLVING LOAN FUNDS For the fiscal year ended June 30,2019 Total Debt Service Requirement Issued: December 1, 2011 Fiscal Year Total Total 3.00%to 5.00% of Maturity Principal Interest Principal Interest 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 $ 1,695,942 $ 372,662 $ 1,695,942 $ 372,662 210 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. 214-230 Revenue Capacity—These schedules contain information to help the reader assess the city's most significant local revenue source, property taxes. 231-236 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. 237-245 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. 246-248 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. 249-253 211 212 No content appears on this page by design. 213 CITY OF TIGARD,OREGON NET POSITION BY COMPONENT for the last ten fiscal years (accrual basis of accounting) Fiscal Year Fiscal Year Fiscal Year 2010 2011 2012 GOVERNMENTAL ACTIVITIES Net investment in capital assets $ 165,775,262 $ 181,343,650 $ 179,626,050 Restricted 6,872,512 5,880,755 13,180,057 Unrestricted 24,927,888 11,880,945 8,431,166 Total governmental activities net position 197,575,662 199,105,350 201,237,273 BUSINESS-TYPE ACTIVITIES Net investment in capital assets 70,942,446 78,920,831 65,218,645 Restricted - 6,005,540 13,184,382 Unrestricted 17,371,241 8,675,865 19,429,375 Total business-type activities net position 88,313,687 93,602,236 97,832,402 PRIMARY GOVERNMENT Net investment in capital assets 236,717,708 260,264,481 244,844,695 Restricted 6,872,512 11,886,295 26,364,439 Unrestricted 42,299,129 20,556,810 27,860,541 Total primary government net position $ 285,889,349 $ 292,707,586 $ 299,069,675 Source: Comprehensive Annual Financial Report of the City. 214 Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year 2013 2014(Restated) 2015 2016 2017(Restated) 2018 2019 $ 181,196,030 $ 185,242,899 $ 189,748,234 $ 195,142,143 $ 199,214,099 $ 207,113,453 $ 216,080,286 12,041,725 10,941,117 12,376,136 20,392,998 26,313,186 38,019,099 40,908,235 14,311,478 13,596,004 13,031,415 11,024,212 21,105,136 26,937,963 36,208,160 207,549,233 209,780,020 215,155,785 226,559,353 246,632,421 272,070,515 293,196,681 74,044,470 79,627,259 84,867,665 95,247,967 104,870,812 110,785,680 110,542,303 9,683,852 10,551,442 11,250,300 12,279,628 15,387,870 18,811,969 20,044,161 18,523,616 16,721,508 21,256,129 21,847,155 30,803,556 38,881,215 50,316,066 102,251,938 106,900,209 117,374,094 129,374,750 151,062,238 168,478,864 180,902,530 255,240,500 264,870,158 274,615,899 290,390,110 304,084,911 317,899,133 326,622,589 21,725,577 21,492,559 23,626,436 32,672,626 41,701,056 56,831,068 60,952,396 32,835,094 30,317,512 34,287,544 32,871,367 51,908,692 65,819,178 86,524,226 $ 309,801,171 $ 316,680,229 $ 332,529,879 $ 355,934,103 $ 397,694,659 $ 440,549,379 $ 474,099,211 215 CITY OF TIGARD,OREGON CHANGES IN NET POSITION for the last ten fiscal years (accrual basis of accounting) Fiscal Year Fiscal Year Fiscal Year 2010 2011 2012 EXPENSES Governmental activities Community services $ 19,832,642 $ 19,987,961 $ 20,025,191 Public works 8,563,893 10,911,875 12,489,448 Community development 4,846,494 4,159,289 4,709,751 Policy and administration 1,511,956 1,825,398 2,117,198 Interest on long-term debt 548,987 1,214,420 1,125,259 Total governmental activities expenses 35,303,972 38,098,943 40,466,847 Business-type activities Sewer 1,379,105 1,386,597 1,743,929 Stormwater 2,061,622 1,667,699 1,649,715 Water 7,880,598 6,996,463 7,807,706 Total business-type activities program expenses 11,321,325 10,050,759 11,201,350 Total primary government expenses $ 46,625,297 $ 48,149,702 $ 51,668,197 PROGRAM REVENUES Governmental activities Charges for services: Community services $ 232,384 $ 1,008,691 $ 1,191,417 Public works 1,751,341 2,096,677 1,915,631 Community development 1,490,701 1,747,617 1,684,287 Policy and administration 108,940 84,065 Operating grants and contributions 199,506 6,516,004 6,952,717 Capital grants and contributions 305,398 230,500 1,049,774 Total governmental activities program revenues 4,088,270 11,599,489 12,877,891 Business-type activities Charges for services: Sewer 1,117,987 1,021,840 1,025,732 Stormwater 1,872,545 2,178,298 2,402,189 Water 7,834,978 9,065,554 11,895,044 Capital grants and contributions 1,022,045 4,583,764 2,871,726 Total business-type activities program revenues 11,847,555 16,849,456 18,194,691 Total primary government program revenues $ 15,935,825 $ 28,448,945 $ 31,072,582 Source: Comprehensive Annual Financial Report of the City. 216 Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year 2013 2014(Restated) 2015 2016 2017(Restated) 2018 2019 $ 19,085,777 $ 23,078,512 $ 18,542,379 $ 25,089,790 $ 23,268,637 $ 24,099,976 $ 23,370,174 8,585,063 8,399,436 10,408,399 10,865,800 8,263,304 8,900,831 12,129,476 3,988,011 4,267,328 4,688,686 7,030,142 5,807,204 5,330,390 5,146,891 1,339,254 1,732,016 1,323,435 1,226,166 3,528,933 2,945,936 3,688,137 1,226,774 1,147,024 1,185,507 958,204 949,136 863,803 771,834 34,224,879 38,624,316 36,148,406 45,170,102 41,817,214 42,140,936 45,106,512 2,114,054 2,617,625 2,518,708 2,536,988 2,586,769 2,789,140 3,128,483 2,045,399 1,958,551 2,077,589 2,123,162 2,737,825 2,470,085 3,261,312 11,989,337 11,730,347 10,839,483 14,720,167 8,244,491 14,123,903 17,223,333 16,148,790 16,306,523 15,435,780 19,380,317 13,569,085 19,383,128 23,613,128 $ 50,373,669 $ 54,930,839 $ 51,584,186 $ 64,550,419 $ 55,386,299 $ 61,524,064 $ 68,719,640 $ 2,252,945 $ 1,872,350 $ 1,731,639 $ 1,879,576 $ 2,482,811 $ 1,557,082 $ 1,628,237 2,120,366 2,519,515 2,239,431 2,860,543 5,165,280 4,708,329 4,797,891 2,579,329 1,765,005 3,040,501 4,684,733 4,341,128 6,518,737 6,432,190 105,755 65,233 142,277 119,195 363,583 340,446 345,505 6,924,053 6,318,382 6,508,556 7,756,718 6,880,727 8,321,435 9,594,291 2,173,900 1,804,398 2,021,422 11,785,524 15,691,507 16,307,318 12,268,270 16,156,348 14,344,883 15,683,826 29,086,289 34,925,036 37,753,347 35,066,384 1,203,187 1,727,206 1,773,388 1,791,302 3,013,314 3,208,783 3,389,281 2,629,694 2,733,346 2,899,180 3,058,382 3,275,083 3,620,431 3,812,133 14,907,664 15,985,607 18,804,645 20,918,497 20,926,322 23,078,013 23,751,073 1,675,987 1,111,346 2,066,696 5,806,590 7,670,388 6,795,717 3,285,377 20,416,532 21,557,505 25,543,909 31,574,771 34,885,107 36,702,944 34,237,864 $ 36,572,880 $ 35,902,388 $ 41,227,735 $ 60,661,060 $ 69,810,143 $ 74,456,291 $ 69,304,248 217 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 2010 2011 2012 NET(EXPENSE)REVENUE Governmental activities $ (31,215,702) $ (26,499,454) $ (27,588,956) Business-type activities 526,230 6,798,697 6,993,341 Total primary government net expenses (30,689,471) (19,700,757) (20,595,615) GENERAL REVENUES AND OTHER CHANGES IN NET POSITION Governmental activities: Property taxes 16,070,846 13,604,285 15,182,467 Franchise fees 4,548,520 4,375,420 4,880,635 Unrestricted intergovernmental revenues 6,993,245 2,838,802 4,798,949 Interest earnings 308,853 296,964 283,273 Miscellaneous 376,884 5,284,426 1,583,989 Transfers between Governmental and Business-type 1,276,800 1,629,245 2,991,566 Total governmental activities 29,575,148 28,029,142 29,720,879 Business-type activities: Interest earnings 153,300 115,828 73,228 Miscellaneous 204,427 3,269 155,164 Unrestricted intergovernmental revenues - - - Transfers between Governmental and Business-type (1,276,800) (1,629,245) (2,991,566) Total business-type activities (919,073) (1,510,148) (2,763,174) Total primary government 28,656,075 26,518,994 26,957,705 CHANGES IN NET POSITION Governmental activities(restated) (1,640,554) 1,529,688 2,131,923 Business-type activities(restated) (392,843) 5,288,549 4,230,167 Total primary government $ (2,033,396) $ 6,818,237 $ 6,362,090 Source: Comprehensive Annual Financial Report of the City. 218 Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year 2013 2014(Restated) 2015 2016 2017(Restated) 2018 2019 $ (18,068,531) $ (24,279,433) $ (20,464,580) $ (16,083,813) $ (6,892,178) $ (4,387,589) $ (10,040,128) 4,267,742 5,250,982 10,108,129 12,194,454 21,316,022 17,319,816 10,624,736 (13,800,789) (19,028,451) (10,356,451) (3,889,359) 14,423,844 12,932,227 584,608 15,338,744 15,796,663 16,523,361 17,177,591 17,616,798 18,387,321 19,101,543 5,855,956 5,542,647 5,687,456 5,734,540 5,890,113 6,095,852 6,211,736 2,500,240 2,955,652 3,004,341 2,840,903 2,074,428 3,022,051 2,522,428 248,812 421,211 434,401 688,087 824,213 1,683,282 2,416,827 316,512 776,154 247,154 228,779 268,380 416,785 453,435 120,227 1,017,893 (56,368) 817,481 291,314 220,392 460,325 24,380,491 26,510,220 25,840,345 27,487,381 26,965,246 29,825,683 31,166,294 114,661 270,415 131,485 302,890 106,628 139,926 1,606,834 157,360 144,767 177,903 193,645 270,628 177,276 652,421 - - - 127,148 285,524 - - (120,227) (1,017,893) 56,368 (817,481) (291,314) (220,392) (460,325) 151,794 (602,711) 365,756 (193,798) 371,466 96,810 1,798,930 24,532,285 25,907,509 26,206,101 27,293,583 27,336,712 29,922,493 32,965,224 6,311,960 2,230,787 5,375,765 11,403,568 20,073,068 25,438,094 21,126,166 4,419,536 4,648,271 10,473,885 12,000,656 21,687,488 17,416,626 12,423,666 $ 10,731,496 $ 6,879,058 $ 15,849,650 $ 23,404,224 $ 41,760,556 $ 42,854,720 $ 33,549,832 219 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 2010 2011 2012 GENERAL FUND Reserved $ 273,726 $ - $ - Unreserved 7,067,526 - - Nonspendable - 305,164 471,975 Unassigned - 7,247,383 7,378,411 Total General Fund $ 7,341,252 $ 7,552,547 $ 7,850,386 ALL OTHER GOVERNMENTAL FUNDS Reserved $ - $ - $ - Unreserved, reported in: Special revenue funds 8,094,802 - - Debt service funds 1,927,247 - - Capital projects funds 4,945,265 - - Nonspendable - - - Restricted - 16,855,664 15,568,787 Committed - 2,263,088 3,217,309 Assigned - 417,479 428,823 Unassigned - (382,937) (498,110) Total all other governmental funds $ 14,967,314 $ 19,153,294 $ 18,716,809 *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. 220 Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year 2013 2014 2015 2016 2017 2018 2019 $ - $ - $ - $ - $ - $ - $ - 472,941 508,374 542,543 664,254 706,412 705,495 225,974 9,687,736 11,474,700 12,115,436 12,970,670 14,884,712 19,356,804 23,121,341 $ 10,160,677 $ 11,983,074 $ 12,657,979 $ 13,634,924 $ 15,591,124 $ 20,062,299 $ 23,347,315 $ - $ - $ - $ - $ - $ - $ - 14,986 16,055 11,225 - 16,485 17,040 17,560 14,859,784 12,504,001 11,791,605 18,250,934 31,914,910 45,521,700 51,414,137 4,020,435 4,457,233 2,801,857 3,260,236 4,341,838 3,307,731 3,325,235 670,223 905,166 1,156,788 1,597,773 1,725,086 1,738,216 2,388,659 (601,324) (752,925) (352,684) (617,329) (725,296) (724,477) - $ 18,964,104 $ 17,129,530 $ 15,408,791 $ 22,491,614 $ 37,273,023 $ 49,860,210 $ 57,145,591 221 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 2010 2011 2012 REVENUES Taxes $ 16,078,788 $ 16,753,457 $ 17,767,128 City gas tax* - - - Franchise fees 4,548,520 4,375,420 4,880,635 Special assessments 284,202 40,164 38,776 Licenses and permits 1,229,880 2,590,516 2,444,551 Intergovernmental revenues 6,358,393 9,834,646 6,586,757 Charges for service 2,335,863 2,292,276 2,087,993 System development charges 747,224 835,031 971,660 Fines and forfeitures 915,524 907,216 1,092,296 Interest earnings 300,126 287,284 262,080 Miscellaneous 249,180 47,489 633,575 Total revenues 33,047,700 37,963,499 36,765,451 EXPENDITURES Current operating: Community services 19,418,498 19,182,018 19,638,469 Public works 5,129,767 6,059,692 6,354,390 Community development 4,674,008 3,975,257 3,902,223 Policy and administration 787,209 711,743 819,034 Debt service: Principal 875,513 2,590,456 1,894,125 Interest 557,061 67,294 1,652,691 Refunded bonds - 8,836,046 - Refunding bond issuance cost - 81,236 - Capital outlay 7,373,043 19,247,942 4,037,766 Total expenditures 38,815,099 60,751,684 38,298,698 Excess(deficiency)of revenues over(under)expenditures (5,767,399) (22,788,185) (1,533,247) OTHER FINANCING SOURCES(USES) Proceeds from bond/long-term note 7,250,000 26,214,495 - Operating transfers in 4,965,010 16,977,142 6,969,663 Interfund loan - - - Operating transfers out (3,688,210) (16,006,177) (5,575,062) Debt proceeds - - - Total other financing sources(uses) 8,526,800 27,185,460 1,394,601 Net change in fund balances $ 2,759,401 $ 4,397,275 $ (138,646) Debt services as a percentage of non-capital expenditures 4.77% 6.84% 12.75% * City gas tax was broken out of intergovernmental revenues beginning in fiscal year 2013. Source: Comprehensive Annual Financial Report of the City. 222 Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year 2013 2014 2015 2016 2017 2018 2019 $ 18,208,253 $ 18,822,449 $ 19,575,665 $ 20,191,927 $ 20,704,055 $ 21,822,129 $ 25,248,472 830,031 638,852 558,740 712,408 844,866 887,038 888,913 5,724,192 5,542,647 5,691,960 5,732,448 5,886,791 6,102,443 6,218,353 43,170 258,831 35,359 65,243 52,146 50,036 59,999 3,175,118 3,098,875 4,030,120 5,751,472 6,662,790 7,648,235 5,178,056 6,040,986 6,386,961 6,370,732 6,684,667 8,228,693 8,737,359 9,498,510 4,624,844 4,982,211 4,342,534 4,869,821 5,930,289 6,636,913 4,648,396 2,007,935 955,678 961,450 6,104,579 11,733,901 9,860,311 4,240,910 1,038,948 929,293 924,266 972,560 713,059 698,508 843,100 254,237 424,221 434,401 653,879 799,748 1,659,107 2,343,694 206,443 312,815 413,736 220,894 349,098 1,204,701 1,284,229 42,154,157 42,352,833 43,338,963 51,959,898 61,905,436 65,306,780 60,452,632 18,636,382 19,420,335 20,325,635 20,784,186 21,925,169 22,631,248 22,051,531 6,551,980 6,914,185 7,512,446 7,606,128 8,291,205 8,899,175 6,105,157 3,937,089 4,219,481 4,640,737 6,981,903 5,807,836 5,345,399 5,272,175 711,385 701,172 778,840 831,876 787,681 795,586 993,346 1,992,500 2,445,993 2,117,045 2,361,892 2,378,100 2,454,000 2,530,800 1,264,795 1,178,637 1,118,238 1,059,733 977,539 892,206 799,646 6,357,256 7,657,993 8,924,317 6,200,291 4,705,720 6,742,438 11,087,518 39,451,387 42,537,796 45,417,258 45,826,009 44,873,250 47,760,052 48,840,173 2,702,770 (184,963) (2,078,295) 6,133,889 17,032,186 17,546,728 11,612,459 - - 1,300,000 1,650,000 - - - 4,735,619 6,420,053 6,178,215 6,378,318 4,755,215 4,174,624 8,808,520 - - - - - - (183,273) (4,880,803) (6,247,267) (6,445,754) (6,102,439) (5,049,792) (4,662,990) (9,952,900) - - - - - - 183,273 (145,184) 172,786 1,032,461 1,925,879 (294,577) (488,366) (1,144,380) $ 2,557,586 $ (12,177) $ (1,045,834) $ 8,059,768 $ 16,737,609 $ 17,058,362 $ 10,468,079 10.92% 11.60% 8.98% 9.00% 8.56% 8.28% 8.34% 223 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 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 2018 13,124,594 8,321,435 16,307,318 18,387,321 6,095,852 2019 13,203,823 9,594,291 12,268,270 19,101,543 6,211,736 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 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 - - 2018 29,907,227 - 6,795,717 - - 2019 30,952,487 - 3,285,377 - - Source: Comprehensive Annual Financial Report of the City-Statement of Activities. 224 General Revenues Gain(Loss)on Intergovernmental Interest Disposition of Revenues Earnings Capital Assets Miscellaneous Total $ 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 3,022,051 1,683,282 - 416,785 67,358,638 2,522,428 2,416,827 - 453,435 65,772,353 General Revenues Gain(Loss)on Intergovernmental Interest Disposition of Revenues Earnings Capital Assets Miscellaneous Total $ - $ 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 - 139,926 - 177,276 37,020,146 - 1,606,834 - 652,421 36,497,119 225 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 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(Restated) 23,268,637 8,263,304 5,807,204 3,528,933 2018 24,099,976 8,900,831 5,330,390 2,945,936 2019 23,370,174 12,129,476 5,146,891 3,688,137 CITY OF TIGARD,OREGON BUSINESS-TYPE EXPENSES BY FUNCTION For the last ten fiscal years Fiscal Year Ended June 30 Sewer Stormwater Water Total 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(Restated) 2,586,769 2,737,825 8,244,491 13,569,085 2018 2,789,140 2,470,085 14,123,903 19,383,128 2019 3,128,483 3,261,312 17,223,333 23,613,128 Source: Comprehensive Annual Financial Report of the City. 226 Interest on Long-Term Debt Total $ 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 41,817,214 863,803 42,140,936 771,834 45,106,512 227 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 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 2018 22,709,167 6,102,443 7,648,235 8,737,359 2019 26,137,385 6,218,353 5,178,056 9,498,510 * Includes special assessments collections,interest earnings,and other revenues. Information derived from Comprehensive Annual Financial Reports for all Governmental Fund Types 228 Charges System For Development Fines and Miscellaneous Services Charges Forfeitures Revenues* Total $ 2,335,863 $ 747,224 $ 915,524 $ 833,508 $ 33,047,700 2,292,276 835,031 907,216 374,937 37,963,499 2,087,993 971,660 1,092,296 934,431 36,765,451 4,624,844 2,007,935 1,038,948 503,850 42,154,157 4,982,211 955,678 929,293 737,036 42,352,833 4,342,534 961,450 924,266 883,496 43,338,963 4,869,821 6,104,579 972,560 940,016 51,959,898 5,930,289 11,733,901 713,059 1,200,992 61,905,436 6,636,913 9,860,311 698,508 2,913,844 65,306,780 4,648,396 4,240,910 843,100 3,687,922 60,452,632 229 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 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 3,546,817 38,298,698 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 2018 22,631,248 14,244,574 795,586 6,742,438 3,346,206 47,760,052 2019 22,051,531 11,377,332 993,346 11,087,518 3,330,446 48,840,173 Information derived from Comprehensive Annual Financial Reports for all Governmental Fund Types 230 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 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 3.02 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 5.52 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% 2018 5,981,800,420 284,167,678 185,901,766 6,451,869,864 2.95 9,883,766,510 65.28% 2019 6,314,865,980 285,495,149 165,706,700 6,766,067,829 2.95 10,754,179,526 62.92% * per$1,000 of assessed value/including phase in rates Source: Washington County Assessment and Taxation 231 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 Tigard/ Direct Rates Tualatin Fiscal Total School Year Ended Perm Debt Urban City of Washington District June 30 Rate Svc Renewal Phase In Tigard County No.23-J 2010 $ 2.51 $ 0.21 $ 0.06 $ - $ 2.78 $ 2.98 $ 7.65 2011 2.51 0.21 0.07 - 2.79 2.98 7.37 2012 2.51 0.45 0.06 0.83 3.02 2.97 7.44 2013 2.51 0.44 0.06 1.27 4.28 2.96 7.38 2014 2.51 0.44 0.06 0.43 3.44 2.96 7.41 2015 2.51 0.42 0.07 1.24 4.24 2.83 7.43 2016 2.51 0.42 0.07 2.51 5.52 2.83 7.43 2017 2.51 0.39 0.08 1.68 4.66 2.95 7.41 2018 2.51 0.36 0.08 - 2.95 2.94 7.73 2019 2.51 0.35 0.08 - 2.95 2.94 7.71 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. 232 Overlapping Rates Washington Beaverton Tualatin County Hillsboro Total Direct School Valley Rural Fire Portland School Other & District Fire&Rescue District Community District Taxing Overlapping No.48-J District No.2 College No.1-J Agencies Rates $ 6.88 $ 1.89 $ 1.69 $ 0.63 $ - $ 0.75 $ 25.25 6.78 1.88 1.69 0.64 - 0.81 24.94 6.86 1.92 1.69 0.60 7.47 1.88 33.85 6.77 1.91 1.69 0.66 7.50 0.72 33.87 8.05 1.91 1.69 0.73 7.41 0.78 34.38 8.04 1.88 - 0.72 - 0.77 25.91 7.96 2.10 - 0.58 - 0.70 27.11 7.92 2.09 - 0.68 - 0.71 26.42 8.05 2.07 - 0.60 - 0.80 25.15 8.02 2.07 - 0.69 - 0.85 25.24 233 CITY OF TIGARD,OREGON PRINCIPAL PROPERTY TAXPAYERS For current and nine years ago 2019 2010 Percentage Percentage Taxable of Total City Taxable of Total City Taxpayer Assessed Value Rank Assessed Value Assessed Value Rank Assessed Value Pacific Realty Associates $ 231,583,241 1 3.42% $ 178,231,550 1 3.63% PPR Washington Square LLC 149,777,028 2 2.21% 112,841,214 2 2.30% Lincoln Center LLC 100,269,186 3 1.48% 81,321,250 3 1.65% ICON Owner Pool 1 West LLC 56,377,550 4 0.83% Comcast Corporation 35,874,600 5 0.53% Portland General Electric 34,372,000 6 0.51% 30,530,230 7 0.62% ROIC Oregon LLC 34,231,830 7 0.51% Polygon WLH LLC 33,595,225 8 0.50% FO Portland Property LLC 27,207,760 9 0.40% Northwest Natural Gas 27,194,000 10 0.40% 27,936,896 8 0.57% Verizon Northwest Inc 60,329,044 4 1.23% Sprint Nextel Corp 55,309,352 5 1.13% Park 2017&Nelson Business Park 37,090,568 6 0.75% Macy's Department Stores 21,896,667 9 0.45% Holland Holdings 1 Arbor Heights 20,298,056 10 0.41% Total $ 730,482,420 10.80% $ 625,784,827 12.74% Source: Washington County Assessment&Taxation records. 234 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 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 17,261,106 16,496,169 95.57% 236,347 16,732,516 96.94% 775,731 4.49% 2017 18,145,192 17,322,014 95.46% 230,652 17,552,666 96.73% 857,408 4.73% 2018 18,484,904 17,649,531 95.48% 195,660 17,845,191 96.54% 851,931 4.61% 2019 19,292,388 18,519,287 95.99% 614,510 19,133,797 99.18% 308,522 1.60% 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. Source:Washington County Property Tax Schedule. 235 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 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 83,100 100.00% - 213,219 2018 89,000 89,000 100.00% - 124,219 2019 95,800 95,800 100.00% - 28,419 (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. 236 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 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% 2018 2,454,000 892,206 3,346,206 47,760,052 7.01% 2019 2,530,800 799,646 3,330,446 48,840,173 6.82% Source: Comprehensive Annual Financial Report of the City. 237 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 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 2017 53,697 6,451,869,864 18,419,297 1,263,130 17,156,167 0.27% 319.50 2018 54,758 6,766,067,829 16,094,594 1,510,969 14,583,625 0.22% 266.33 Source: City budget documents,Comprehensive Annual Financial Reports of the city and Washington Department of Assessment and Taxation. 238 CITY OF TIGARD,OREGON COMPUTATION OF DIRECT AND OVERLAPPING DEBT June 30,2019 Percent Amount Applicable Applicable Net Debt Inside City of Inside City of Jurisdiction Outstanding Tigard* Tigard Tigard/Tualatin School District#23-J $ 251,426,415 46.94% $ 118,024,336 Metro 819,020,000 3.23% 26,419,128 Beaverton School District#48 996,806,084 3.55% 35,411,536 Portland Community College 602,297,900 4.05% 24,367,166 Washington County 228,769,717 10.22% 23,387,586 Northwest Regional ESD - 8.28% - Tualatin Valley Fire&Rescue District 26,055,000 11.32% 2,949,947 Sub-Total of Overlapping Debt 2,924,375,116 230,559,699 City of Tigard 16,903,013 100.00% 16,903,013 Total for Overlapping Debt $ 2,941,278,129 $ 247,462,712 *The City of Tigard does not calculate this percentage; it is provided by the State of Oregon. Source: Oregon State Treasury Debt Management Division. 239 CITY OF TIGARD,OREGON COMPUTATION OF LEGAL DEBT MARGIN For the last ten fiscal years 2010 2011 2012 2013 Debt limit $ 232,145,773 $ 217,807,538 $ 207,504,714 $ 201,826,506 Total net debt applicable to limit 16,708,100 32,300,000 30,735,000 28,800,576 Legal debt margin $ 215,437,673 $ 185,507,538 $ 176,769,714 $ 173,025,930 Total net debt applicable to the limit as a percentage of debt limit 7.20% 14.83% 14.81% 14.27% 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. 240 2014 2015 2016 2017 2018 2019 $ 210,982,614 $ 230,989,826 $ 242,482,552 $ 269,677,150 $ 296,512,995 $ 322,625,386 26,820,000 24,775,000 22,670,000 20,505,000 18,269,800 15,965,000 $ 184,162,614 $ 206,214,826 $ 137,195,419 $ 249,172,150 $ 278,243,195 $ 306,660,386 12.71% 10.73% 9.35% 7.60% 6.16% 4.95% Legal Debt Margin Calculation at June 30,2018 True cash value(2018-2019) $ 10,754,179,526 Limit as a percent 3% Debt Limit(as a percent of real market value) 322,625,386 Debt applicable to limit: Gross bonded debt $ 16,903,013 Excludable debt-Bancroft improvement bonds,bond premium, capital lease and commercial bank loan (938,013) Debt subject to limitation 15,965,000 Legal debt margin-amount available for future indebtedness 306,660,386 Total net debt applicable to the limit as a percent of debt limit 4.95% 241 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 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 2018 53,697 18,419,297 124,019 910,000 - 2019 54,758 16,094,594 28,419 780,000 - *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. 242 Business-type Activities Long-Term Percentage Note Payable Notes Payable Revenue Total Primary of Personal Per Debt Debt Bonds* Government Income** Capita $ 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 1,803,034 133,775,926 155,032,276 9.46% 2,887 - 1,695,942 131,055,591 149,654,546 8.95% 2,733 243 CITY OF TIGARD,OREGON COMPUTATION OF WATER REVENUE BONDS DEBT COVERAGE For the last eight fiscal years(1) 2012 2013 2014 Gross revenues $ 11,895,043 $ 14,907,664 $ 16,079,753 System Development Charges(SDC) related: SDC Fund interest earnings 3,590 4,746 - Reimbursement fee receipts(2) 787,666 881,294 442,651 Improvement fee receipts(3) 376,412 660,425 389,460 Total SDC-related 1,167,668 1,546,465 832,111 Operating expense: Salaries and wages 1,134,988 1,131,531 1,225,170 Contracted services 163,385 249,857 400,972 Water purchases 2,904,433 3,177,982 3,199,292 General, admin and other 1,168,191 2,316,605 2,548,678 Total operating expenses 5,370,997 6,875,975 7,374,112 Net revenues(including SDCs) 7,691,714 9,578,154 9,537,752 Net revenues(excluding SDCs) $ 6,524,046 $ 8,031,689 $ 8,705,641 Debt service-first lien bonds: 2012 bonds $ - $ 3,539,888 $ 4,719,850 2015 bonds - - - Total debt service $ - $ 3,539,888 $ 4,719,850 Debt service coverage-first lien bonds (excluding system development charges) N/A 2.27 1.84 (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. 244 2015 2016 2017 2018 2019 $ 18,944,301 $ 20,918,497 $ 20,926,322 $ 23,078,014 $ 23,751,073 9,294 35,173 6,660 4,694 343,069 308,896 1,242,297 3,010,263 1,924,587 921,379 503,853 1,569,645 3,521,776 2,319,737 949,056 822,043 2,847,115 6,538,699 4,249,018 2,213,504 1,462,677 1,117,286 1,148,575 874,348 1,005,720 336,178 353,396 445,840 407,450 453,971 2,644,491 4,212,357 1,339,637 1,869,824 1,685,669 2,781,892 3,111,194 3,572,450 3,931,142 4,498,769 7,225,238 8,794,233 6,506,502 7,082,764 7,644,129 12,541,106 14,971,379 20,958,519 20,244,268 18,320,448 $ 11,719,063 $ 12,124,264 $ 14,419,820 $ 15,995,250 $ 16,106,944 $ 4,719,850 $ 4,719,850 $ 6,561,800 $ 6,561,050 $ 6,563,750 1,378,238 1,670,300 1,667,900 1,666,000 $ 4,719,850 $ 6,098,088 $ 8,232,100 $ 8,228,950 $ 8,229,750 2.48 1.99 1.75 1.94 1.96 245 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) 2010 47,595 $ 105,655 12,913 N/A N/A 9.7% 2011 48,035 107,402 12,688 N/A N/A 9.5% 2012 48,415 109,094 12,691 30,522 1,477,723 8.0% 2013 48,695 112,274 12,688 32,527 1,583,902 7.6% 2014 50,444 113,195 12,718 33,709 1,700,417 6.1% 2015 50,787 116,321 12,676 34,878 1,771,349 5.4% 2016 51,253 119,476 12,718 35,837 1,836,754 4.9% 2017 51,902 124,309 12,808 34,312 1,780,861 3.7% 2018 53,697 126,005 12,890 34,755 1,866,239 3.6% 2019 54,758 123,563 12,701 36,281 1,986,675 4.0% 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 246 CITY OF TIGARD,OREGON PRINCIPAL EMPLOYERS For current year and nine years ago 2019 2010 Percentage Percentage of Total City of Total City Employer Employees Rank Employment Employees Rank Employment Tigard-Tualatin School District#23-J 779 1 2.87% 779 2 2.76% Nordstrom 535 2 1.97% 579 4 2.05% Conduent Commercial Solutions LLC 491 3 1.81% Consumer Cellular 485 4 1.78% Costco Wholesale Corporation 404 5 1.49% 300 7 1.06% Macy's Department Stores 392 6 1.44% 704 3 2.49% Oregon Public Employees Retirement 364 7 1.34% 396 5 1.40% Comcast 314 8 1.16% City of Tigard 295 9 1.09% 266 8 0.94% Fred Meyer Inc. 268 10 0.99% The Cheesecake Factory 250 9 0.89% HSBC Card Services 948 1 3.36% Providence Health System 377 6 1.34% Home Depot 241 10 0.85% Total 4,327 15.92% 4,840 17.14% Source: City of Tigard Adopted Budget 247 CITY OF TIGARD,OREGON PROPERTY VALUE AND CONSTRUCTION For the last ten fiscal years Fiscal Commercial Construction 111 Residential Construction(1) Year Ended Number of Number of June 30 Permits Value Permits Value 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 2018 12 43,256,706 339 147,036,484 2019 12 68,338,543 205 83,341,594 (1)From City of Tigard Building Department. Multi-family permits are included in the number of permits issued for residential construction. 248 CITY OF TIGARD,OREGON FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION For the last ten fiscal years Function/Program 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 GOVERNMENTAL ACTIVITIES Community services Police 90.10 90.10 91.10 84.50 84.50 82.50 83.50 87.50 88.50 84.50 Library 38.80 38.80 38.80 34.80 34.80 34.80 38.30 39.70 40.90 38.80 Public works Administration 9.35 9.75 8.75 9.00 9.20 9.20 9.00 9.50 9.75 9.00 Parks maintenance 9.75 9.75 9.75 9.75 9.75 10.75 11.67 12.17 10.40 10.50 Recreation - - - - - - - 0.33 2.35 1.00 Street maintenance 7.00 7.00 7.00 7.00 7.25 7.25 6.33 7.00 7.45 7.50 Healthy Streams - - - 1.00 - - - - - - Engineering 11.80 11.80 11.80 12.00 13.00 14.00 14.00 17.00 19.00 19.00 Community development Administration 2.00 2.00 3.00 2.00 2.00 2.00 3.00 3.00 3.00 3.00 Building inspection 6.24 7.20 8.10 7.80 8.80 9.00 9.00 13.00 13.00 13.60 Development Services(a) 7.56 7.80 5.90 4.80 3.80 3.80 3.80 - - - Community Planning 7.00 7.00 9.00 9.00 9.00 9.00 9.00 13.50 13.50 12.65 Development Engineering(b) 1.60 - - - - - - - - - Economic Development 1.00 1.00 1.50 1.00 2.00 2.00 2.00 2.00 3.00 2.00 Policy and Administration City management 4.50 4.50 4.20 4.00 4.00 5.00 5.50 4.90 5.90 3.90 City attorney)c) - - - - - - - - - 1.10 Human resources 5.00 5.00 5.00 4.80 4.80 4.50 4.80 4.50 4.34 4.14 Information technology 7.00 7.00 7.00 6.30 5.80 7.00 7.00 8.00 9.00 9.00 Risk management 2.30 2.30 2.30 2.10 2.10 2.10 2.30 1.50 1.76 1.76 Finance administration 5.30 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.50 3.00 Financial operations 4.50 4.50 4.50 4.60 4.60 4.60 4.60 4.80 5.30 4.80 Utility Billing 5.50 5.50 6.30 6.50 6.80 6.80 6.80 6.80 7.20 7.20 Design&Communication 3.05 3.05 3.25 3.05 3.05 3.05 3.05 4.25 4.75 4.75 Contracts&Purchasing(d) - 2.30 2.30 1.80 2.00 2.00 2.00 2.00 2.00 2.00 City Recorder/Records 3.25 3.25 3.35 4.15 4.15 4.15 3.35 3.85 3.85 3.85 Municipal court 3.50 3.75 3.75 3.65 3.65 3.65 3.65 3.50 3.50 3.50 Fleet maintenance(e) 2.00 2.60 2.60 1.50 0.95 1.95 1.80 2.35 2.85 2.60 Property management(e) 4.25 4.25 4.25 3.75 3.85 4.85 5.20 4.90 6.55 6.65 BUSINESS-TYPE ACTIVITIES Public works Sanitary sewer 5.25 5.25 6.25 6.25 6.50 5.50 6.00 6.50 6.25 6.25 Stormwater 7.00 7.00 6.25 5.25 5.50 6.50 7.00 7.50 9.00 8.25 Water 13.00 12.00 12.75 12.50 12.00 13.00 13.00 13.00 11.25 12.50 Total 267.60 267.45 271.75 255.85 256.85 261.95 268.65 286.05 297.85 286.80 Source: City of Tigard Finance Department (a) Development services was budgeted with Building in FY 2016-17. (b) Development Engineering was budgeted with Capital Construction&Transportation as Engineering until FY 2006-07. )c) City attorney was changed from a contract to an employee in FY 2017-18. (d) Contracts&Purchasing was budgeted with Finance administration until FY 2010-2011. (e) Fleet/Property Management budgeted with Public Works until FY 2015-16. 249 CITY OF TIGARD,OREGON OPERATING INDICATORS BY FUNCTION/PROGRAM For the last ten fiscal years Functions/Programs 2010 2011 2012 GOVERNMENTAL ACTIVITIES Community services Police-number of traffic citations issued 9,101 7,021 8,308 Police-number of calls for service 51,158 49,358 52,226 Library-number of items in collection 216,110 237,110 244,154 Library-materials checked out each year 1,462,304 1,507,248 1,522,422 Public works Acres of park land maintained 189 233 243 Crack sealing completed annually(linear feet) 160,000 160,000 160,000 Vehicles maintained to industry standard 160 149 149 Community development Number of inspections(Tigard) 8,700 9,990 10,000 Number of permits(all types)in Tigard 3,025 3,220 3,047 Number of development applications 370 370 381 Policy and administration Number of job applications 1,900 1,000 1,100 Laptops and computers to maintain 488 491 491 Insured value of city's real property(in millions) $ 82 $ 82 $ 82 Number of utility bills sent** 116,800 176,274 236,389 Average fine amount collected $ 90 $ 126 $ 126 BUSINESS-TYPE ACTIVITIES Sewer Miles of sewer lines cleaned 41 41 41 Miles of sewer lines video inspected 23 23 23 Stormwater Miles of stormwater lines cleaned 31 31 31 Number of water quality facilities*** 72 90 90 Total number of catch basins cleaned*** 4,437 4,368 4,368 Water Number of accounts 17,900 18,129 18,265 **City of Tigard started monthly utility billing in January 2011. ***GIS data improvement Source: City of Tigard Finance Department 250 2013 2014 2015 2016 2017 2018 2019 8,939 7,177 6,462 5,745 5,057 5,260 5,972 52,420 48,840 47,247 43,299 41,874 42,075 42,482 250,454 245,000 248,225 253,725 229,344 238,919 220,877 1,459,334 1,385,376 1,280,376 1,243,774 1,159,446 1,227,561 1,216,642 248 253 255 301 301 305 306 160,000 160,000 160,000 160,000 107,727 262,659 92,400 148 157 160 146 162 152 156 12,500 12,382 9,009 10,814 27,551 25,793 17,540 3,049 3,404 2,958 3,860 4,281 4,189 3,776 357 341 251 388 818 843 876 2,500 2,000 2,100 2,200 3,726 2,605 3,393 503 523 525 530 585 593 601 $ 82 $ 82 $ 82 $ 82 $ 120 $ 122 $ 129 238,400 241,500 244,000 256,500 248,560 254,150 258,252 $ 140 $ 140 $ 160 $ 160 $ 149 $ 133 $ 119 42 42 42 42 51 57 59 24 21 21 24 23 29 30 32 21 21 21 23 20 26 125 126 126 126 133 138 143 2,768 2,840 2,840 2,917 3,939 2,620 2,737 18,350 19,207 19,737 20,500 21,509 21,764 21,920 251 CITY OF TIGARD,OREGON CAPITAL ASSETS STATISTICS BY FUNCTION For the last ten fiscal years Functions/Programs 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 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 14 14 18 20 20 20 20 21 24 24 Acres of park and greenspaces 396.0 435.4 447.0 493.0 499.0 514.0 514.0 548.0 552.0 553.0 Miles of streets 150.0 150.0 150.0 150.0 150.0 150.0 150.0 157.0 175.7 175.7 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 162.8 164.5 166.1 166.9 166.9 166.9 168.0 168.3 168.5 168.7 Stormwater Total miles of stormwater lines* 131.0 131.0 131.0 126.0 130.0 130.0 130.0 131.2 131.8 136.7 Number of water quality facilities* 79 92 92 125 126 126 126 164 210 240 Water Water mains in miles 235.0 245.0 248.0 248.0 248.0 248.0 248.0 251.3 251.3 263.1 Number of reservoirs 13 13 13 13 13 13 14 14 14 14 Source:City of Tigard Finance Department *GIS data improvement 252 CITY OF TIGARD,OREGON MISCELLANEOUS STATISTICAL DATA June 30,2019 Date of Incorporation 1961 Mayor/Council with a City Manager as the administrative head of the Form of government government of the City Area(Square Miles-incorporated area) 12.2 Miles of streets 176 Police protection: -Number of stations 1 -Number of sworn police officers 67 Education: - Attendance centers 16 -Number of teachers\FTE 725 -Number of students 12,701 Building Permits issued (2018-2019) 693 Recreation and culture: -Number of parks 24 developed and 7 underdeveloped,totaling 31 at 306 acres -Greenways 247 acres -Number of libraries 1 -Number of volumes(estimated) 220,877 Employees: -Classified service(union) 180 -Unclassified(non-union) 115 Information obtained from the various departments of the City of Tigard and Tigard/Tualatin School District#23-.I City student totals not available. 253 No content appears on this page by design. 254 Audit Comments and Disclosure Requirements 255 256 No content appears on this page by design. 257 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, 2019, and have issued our report thereon dated December 5, 2019. 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 Oregon 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 258 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 Oregon 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 City'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. 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 City'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 Oregon Secretary of State, in considering the City's internal control and compliance. Accordingly, this communication is not suitable for'any other purpose. aaiL. (.4 - For Moss Adams LLP Portland, Oregon December 5, 2019 259 ® MOSSADAMS Report of Independent Auditors on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards The City Council City of Tigard, Oregon Tigard, Oregon We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, 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, 2019, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated December 5, 2019. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, 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 opinions 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 City's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 260 Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. 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 tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Nata /4-htma zzif Portland, Oregon December 5, 2019 261 ® MOSSADAMS Report of Independent Auditors on Compliance for the Major Federal Program and Report on Internal Control Over Compliance Required by the Uniform Guidance The City Council City of Tigard, Oregon Tigard, Oregon Report on Compliance for The Major Federal Program We have audited the City of Tigard, Oregon's (the City) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on the City's major federal program for the year ended June 30, 2019. The City's major federal program is identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for the City's major federal program based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for the major federal program. However, our audit does not provide a legal determination of the City's compliance. Opinion on the Major Federal Program In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on the major federal program for the year ended June 30, 2019. 262 Report on Internal Control Over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City's internal control over compliance with the types of requirements that could have a direct and material effect on the major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for the major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. o,�r1 l411/gee LI/ Portland, Oregon December 5, 2019 263 CITY OF TIGARD,OREGON SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the fiscal year ended June 30,2019 Federal Grantor/ Federal CFDA Agency or Pass- Pass-Through Grantor Expenditures Program Title or Cluster Title Number Through Number U.S.Department of Commerce Direct: Investments for Public Works and Economic Development Facilities 11.300 $ 902,409 Total Economic Development Cluster 902,409 U.S.Department of Justice Direct: Equitable Sharing Program 16.922 123,082 Direct: Bulletproof Vest Partnership Program 16.607 1,600 Pass-through: City of Portland,OR,Bureau of Police: Economic,High-Tech,and Cyber Crime Prevention 16.752 2015-BE-BX-0005 3,551 Total U.S.Department of Justice 128,233 U.S.Environmental Protection Agency Direct: Brownfields Assessment and Cleanup Cooperative Agreements 66.818 4,350 Total U.S.Environmental Protection Agency 4,350 U.S.Department of Homeland Security Direct: Homeland Security Grant Program 97.067 8,313 Total U.S.Department of Homeland Security 8,313 U.S.Department of Transportation Pass-through: Metro Federal Transit Formula Grants 20.507 933346 129,377 Federal Transit Formula Grants 20.507 1,794 Total Federal Transit Cluster 131,171 Pass-through: Oregon Department of Transportation National Priority Safety Programs 20.616 M1HVE-17-46-03 TPD 8,284 National Priority Safety Programs 20.616 OP-18-45-03-ZZZ 2,063 Total Highway Safety Cluster 10,347 Oregon Department of Transportation Highway Planning and Construction 20.205 7,724 Workzone Safety 20.205 5,000 Total Highway Planning and Construction Cluster 12,724 Pass-through: Oregon Impact Minimum Penalties for Repeat Offenders for Driving While Intoxicated 20.608 M5HVE-17-12-20 7,803 Total U.S.Department of Transportation 162,045 Total Federal Financial Assistance $ 1,205,350 See the accompanying notes to the Schedule of Expenditures of Federal Awards. 264 CITY OF TIGARD, OREGON NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the fiscal year ended June 30, 2019 Note 1. Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported using the modified accrual basis of accounting. Such expenditures are recognized following the cost principles in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where applicable. Note 2. Indirect Cost Rate The City of Tigard has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance during the fiscal year ended June 30, 2019. Note 3. Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards (the "Schedule") includes the federal grant activity of the City of Tigard (the "city") under programs of the federal government for the year ended June 30, 2019.The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the city, it is not intended to and does not present the financial position, changes in net position or cash flow of the city. 265 City of Tigard Schedule of Findings and Questioned Costs For the Year Ended June 30, 2019 Section I -Summary of Auditor's Results Financial Statements Type of report the auditor issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified Internal control over financial reporting: • Material weakness(es) identified? ❑ Yes ® No • Significant deficiency(ies) identified? ❑ Yes ® None reported Noncompliance material to financial statements noted? ❑ Yes ® No Federal Awards Internal control over major federal programs: • Material weakness(es) identified? ❑ Yes ® No • Significant deficiency(ies) identified? ❑ Yes ® None reported Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? ❑ Yes ® No Identification of major federal programs and type of auditor's report issued on compliance for major federal programs: Type of Auditor's Report Issued on Compliance for CFDA Number(s) Name of Federal Program or Cluster Major Federal Programs 11.300 Economic Development Cluster Unmodified Dollar threshold used to distinguish between type A and type B programs: $ 750,000 Auditee qualified as low-risk auditee? ❑ Yes ® No Section II — Financial Statement Findings None reported Section III — Federal Award Findings and Questioned Costs None reported 266