TCDA Report FY Ending June 30, 2019 TCDA
Town Center Development Agency
(A Component Unit of the City of Tigard,Oregon)
Annual Financial Report
FOR THE FISCAL YEAR ENDED JUNE 30, 2019
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Prepared by: City of Tigard - Financial & Information Services Dept.
Town Center Development Agency
Table of Contents
Introductory Section:
List of Officials 1
Financial Section:
Report of Independent Auditors 4
Management's Discussion and Analysis 8
Basic Financial Statements:
Government-Wide Financial Statements
Statement of Net Position 16
Statement of Activities 17
Fund Financial Statements—Governmental Funds
Balance Sheet and Reconciliation 18
Statement of Revenues and Expenditures and Reconciliation 19
Notes to the Basic Financial Statements 22
Required Supplementary Information:
Schedule of Revenues, Expenditures and Changes in Fund Balance— Budget and
Actual:
City Center Capital Projects Fund 32
Tigard Triangle Capital Projects Fund 33
Other Supplementary Information:
Schedule of Revenues, Expenditures and Changes in Fund Balance— Budget and
Actual:
City Center Debt Service Fund 36
Tigard Triangle Debt Service Fund 37
Audit Comments and Disclosure Requirements:
Report of Independent Auditors Required by Oregon State Regulations 40
Town Center Development Agency
List of Officials
Fiscal Year 2018-2019
TOWN CENTER DEVELOPMENT AGENCY BUDGET COMMITTEE
Timothy Cadman Mayor Jason Snider
Chris Bence Councilor John Goodhouse
Chelsea Nance Councilor Tom Anderson
Stephanie Veal Councilor Heidi Leub
Clifford Rone Councilor Liz Newton
Leah Voit, Alternate
TOWN CENTER DEVELOPMENT AGENCY BOARD
Jason Snider, Chair
John Goodhouse Liz Newton
Heidi Leub Tom Anderson
EXECUTIVE DIRECTOR
Marty Wine
COMMUNITY DEVELOPMENT DIRECTOR
Kenny Asher
REDEVELOPMENT PROJECT MANAGER for DOWNTOWN
Sean Farrelly
FINANCE and INFORMATION SERVICES DIRECTOR
Toby LaFrance
TOWN CENTER DEVELOPMENT AGENCY
City of Tigard 113125 Hall Blvd. I Tigard,OR 97223 1503-639-4171
1
INDEPENDENT AUDITOR'S REPORT
2
3
0
MOSSADAMS
Report of Independent Auditors
Board Members
Town Center Development Agency (A component unit of the City of Tigard, Oregon)
Tigard, Oregon
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities and each
major fund of the Town Center Development Agency (the Agency), as of and for the year ended
June 30, 2019, and the related notes to the financial statements, which collectively comprise the
Agency's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are free from material misstatement, whether due to
fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the
Agency'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 Agency'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.
4
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities and each major fund of the Agency as of
June 30, 2019, and the respective changes in financial position for the year then ended in accordance
with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis on pages 8 through 12 and the budgetary schedules for the
City Center Capital Projects Fund and Tigard Triangle Capital Projects Fund on pages 32 through 33
be presented to supplement the basic financial statements. Such information, although not a part of
the basic financial statements, is required by the Governmental Accounting Standards Board who
considers it to be an essential part of financial reporting for placing the basic financial statements in
an appropriate operational, economic, or historical context.
We have applied certain limited procedures to the management's discussion and analysis in
accordance with auditing standards generally accepted in the United States of America, which
consisted of inquiries of management about the methods of preparing the information and comparing
the information for consistency with management's responses to our inquiries, the basic financial
statements, and other knowledge we obtained during our audit of the basic financial statements. We
do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Agency's basic financial statements. The budgetary schedules for the City
Center Capital Projects Fund and Tigard Triangle Capital Projects Fund described above are the
responsibility of management and were derived from and relate directly to the underlying accounting
and other records used to prepare the basic financial statements. The budgetary schedules for the
City Center Capital Projects Fund and Tigard Triangle Capital Projects Fund have been subjected to
the auditing procedures applied in the audit of the basic financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the basic financial statements or to the basic financial
statements themselves, and other additional procedures in accordance with auditing standards
generally accepted in the United States of America. In our opinion, the budgetary schedules for the
City Center Capital Projects Fund and Tigard Triangle Capital Projects Fund are fairly stated, in all
material respects, in relation to the basic financial statements as a whole.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Agency's basic financial statements. The budgetary schedules on pages 36
and 37 are presented for purposes of additional analysis and are not a required part of the basic
financial statements.
5
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 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 Agency's basic financial statements. The introductory section is presented
for purposes of additional analysis and is not a required part of the basic financial statements.
The introductory section has not been subjected to the auditing procedures applied in the audit of the
basic financial statements, and accordingly, we do not express an opinion or provide any assurance
on it.
Report on Other Legal and Regulatory Requirements
In accordance with Minimum Standards of Audits of Oregon Municipal Corporations, we have issued
our report dated December 5, 2019 on our consideration of the Agency'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.
<414A-
For Moss Adams LLP
Portland, Oregon
December 5, 2019
6
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Town Center Development Agency
Management's Discussion and Analysis
As part of this Annual Financial Report,the Town Center Development Agency(agency),a component unit
of the City of Tigard, Oregon, offers readers this narrative overview and analysis of the financial activities
of the agency for the fiscal year ended June 30, 2019. It focuses on significant financial issues, major
financial activities, and resulting changes in financial position, as well as economic factors affecting the
agency. This Management's Discussion and Analysis(MD&A)is based on currently known facts,decisions,
and conditions that existed as of the date of the report.
Financial Highlights
• The assets of the agency exceeded its liabilities at the close of the most recent fiscal year by
$2,803,433. Of this amount, $636,034 is restricted for the repayment of debt, $2,020,235 is for
net investment in capital assets and the remaining $147,164 is unrestricted and may be used to
meet the agency's ongoing obligations to citizens and creditors.
• The agency's net position (assets less liabilities) increased $225,926 over the course of the year,
primarily due to property tax revenue exceeding expenses.
• In the fund financial statements for fiscal year 2018-19 expenditures in the Capital Projects Fund
($380,980) were for capital outlay in the amount of $187,707, most of which was for
future downtown development consulting, local business facade improvements and downtown
trail construction. The payments in the Debt Service Fund ($158,986) were for principal and
interest payments on a commercial bank loan and to the City of Tigard.
• Also in the fund financial statements, the agency recognized $661,392 in revenue from property
taxes, rental revenues, intergovernmental revenues and interest earnings.
Overview of the Financial Statements
The following discussion and analysis is intended to serve as an introduction to the agency's basic financial
statements. The agency's basic financial statements include three components:
1. Government-wide financial statements,
2. Fund financial statements, and
3. Notes to the financial statements.
Government-wide financial statements
Government-wide financial statements are designed to provide readers with a broad overview of the
agency's finances, in a manner that is similar to a private-sector business.
The Statement of Net Position presents information on all of the agency's assets and liabilities, with the
difference between the two reported as net position. Over time, increases or decreases in net position
may serve as a useful indicator of whether the financial position of the agency is improving or
deteriorating.
The Statement of Activities presents information on how the agency's net position changed during the
most recent fiscal year. All changes in net position are reported as soon as the underlying event occurs,
regardless of the timing of related cash flows. Thus, revenues and expenses are reported in the statement
for some items that will result in cash flows in a future period such as earned, but uncollected property
taxes.
8
Town Center Development Agency
Management's Discussion and Analysis
The government-wide financial statements indicate that the functions of the agency are principally
supported by property taxes and are considered governmental activities. The agency does not have
business-type activities in which costs are covered through user fees or charges.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or functions. The agency uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. All of the funds of the agency are
considered governmental funds.
Governmental funds are used to account for agency functions that are supported primarily by taxes and
intergovernmental revenues.These are essentially the same functions that are reported as governmental
activities in the government-wide financial statements. Unlike government-wide financial statements,
governmental fund financial statements focus on the acquisition and use of spendable resources, as well
as balances of available spendable resources at the end of the fiscal year. Such information may be useful
in evaluating the agency's near-term requirements.
The agency maintains four separate governmental funds consisting of the City Center Debt Service Fund,
City Center Capital Projects Fund, Tigard Triangle Debt Service Fund and Tigard Triangle Capital Projects
Fund.The Capital Projects Funds function as the agency's general operations funds for the separate urban
renewal areas. Fund information is presented as combined amounts for Capital Projects Funds and Debt
Service Funds in the governmental funds balance sheet and in the governmental funds statement of
revenues and expenditures.
Notes to the basic Financial Statements
The notes provide additional information that is essential for a full understanding of the data provided in
the government-wide and fund financial statements. They are an integral part of the financial statements
and should be read in conjunction with them.
Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of the agency's financial position.
In the case of the agency, assets exceeded liabilities by$2,803,433 in fiscal year 2019 compared to a net
position of$2,577,507 in fiscal year 2018.
A significant portion of the agency's net position (72 percent) reflects its investment in capital assets,
consisting mostly of infrastructure and land. The agency uses these capital assets in the redevelopment
of the designated City Center Urban Renewal area and the Tigard Triangle Urban Renewal area and, as
such,are not available for future spending. In fiscal year 2019 the capital assets remained relatively similar
to the previous year as the agency worked with consultants to plan future development projects.
$636,034 or 22.7 percent is restricted for the payment of debt incurred by the agency and the remaining
net position of$147,164 or 5.3 percent is unrestricted.
9
Town Center Development Agency
Management's Discussion and Analysis
Town Center Development Agency
Statement of Net Position
June 30,
2019 2018
ASSETS:
Cash and restricted cash $ 806,890 $ 448,592
Receivables 9,428 50,815
Capital assets, net of accumulated depreciation 3,740,940 3,755,070
Total assets 4,557,258 4,254,477
LIABILITIES:
Accounts payable and other short-term liabilities 813,120 139,538
Long-term liabilities 940,705 1,537,432
Total liabilities 1,753,825 1,676,970
NET POSITION:
Net investment in capital assets 2,020,235 2,087,638
Restricted for debt service 636,034 456,914
Unrestricted 147,164 32,955
Total net position $2,803,433 $2,577,507
Town Center Development Agency
Change in Net Position
For the Year Ended June 30,
REVENUES: 2019 2018
Program revenues $ 107,371 $ 116,739
General revenues 542,651 787,357
Total revenues 650,022 904,096
EXPENSES:
Community development 395,110 115,508
Interest on long-term debt 28,986 32,943
Total expenses 424,096 148,451
Change in net position 225,926 755,645
Net position-beginning 2,577,507 1,821,862
Net position-ending $ 2,803,433 $ 2,577,507
10
Town Center Development Agency
Management's Discussion and Analysis
Capital Assets and Debt Administration
Capital Assets
As of June 30, 2019 the agency had invested $3,740,940 in capital assets as reflected in the following
table:
Governmental Activities
2019 2018
Land $ 985,504 $ 985,504
Construction in progress 1,257,863 1,230,265
Infrastructure 1,669,087 1,669,087
Accumulated depreciation (171,514) (129,786)
Total $3,740,940 $3,755,070
On November 24, 2015 the agency acquired two property lots (Main Street Saxony properties) in the
downtown area from the city. Per the Purchase and Sale Agreement between the city and the agency,the
purchase price for these properties was $515,000 (representing the original purchase price for the
property paid by the city) or the amount established by an independent MAI appraisal, whichever is
greater, with $1.00 due at closing and the balance due on June 30, 2017. The agency received two
Brownfield grants to demolish buildings and perform pollution remediation in order to facilitate future
development of the properties. The project was completed by June 30, 2019, with final approval issued
by Department of Environmental Quality. Additional information on the agency's capital assets can be
found on page 26-27 of this report.
Debt
Under the Intergovernmental Agreement(IGA) between the agency and the City of Tigard, loans from the
city to the agency are repaid in ten equal payments on the principal starting ten years after the loan;
however, interest payments start in the second year after the loan. In fiscal year 2018-19,the agency did
receive a loan from the city in the amount of$183,273.
In fiscal year 2015 the agency borrowed $1,300,000 from a financial institution to purchase property
located in the downtown area. Payments of principal and interest are due in March and September
annually until the final payment in September of 2019. Total debt decreased by $130,000 during the
current fiscal year. Additional information on the agency's debt can be found on pages 27-29 of this
report.
Budgetary Highlights
The Town Center Development Agency budget consists of four funds: The City Center Capital Projects
Fund, which functions as the agency's general operations fund for the Downtown Urban Renewal Area,
and the Tigard Triangle Capital Projects Fund, which functions as the agency's general operations for the
Triangle Urban Renewal Area. The agency also has a City Center Debt Service Fund and Tigard Triangle
Debt Service Fund. The Capital Projects Fund activity is supported by loans from the City of Tigard and a
bank loan. The city loans will be repaid with interest once the agency begins generating enough tax
11
Town Center Development Agency
Management's Discussion and Analysis
increment revenue. The focus of the fiscal year 2018-19 budget included construction of a public
restroom, development of the Main Street and Fanno Creek public spaces and planning for future
affordable housing in the downtown area. These projects are on-going and have been carried over into
the fiscal year 2019-20 budget.
The budget for fiscal year 2019-20 will include construction of public restrooms in the Tigard Rotary Plaza
and a portion of the Tigard Street Heritage Trail as well as developing plans for a larger Downtown plaza.
The agency will also provide development assistance to support affordable housing in the area. The
agency will further engage the District's merchants and business owners together with the Tigard
Downtown Alliance to promote new businesses in the district.
Economic Factors
The Town Center Development Agency is an urban renewal agency approved by voters in 2006. The
primary funding source for the agency is property tax increment financing, which generally means that
the property taxes resulting from growth in property value within the Urban Renewal area can be used to
finance improvement projects and programs. In order to facilitate the redevelopment of the Urban
Renewal area, the agency adopted a City Center Urban Renewal Plan that allows the agency to incur a
maximum amount of indebtedness (amount of tax increment financing for projects and programs) of
$22,000,000 for a duration of 20 years.As of fiscal year 2018-19,the total debt issued is$3.24 million with
additional debt financing in fiscal year 2019-20 for capital improvement projects in the downtown area.
Current and proposed projects include additional facade improvement grants for local businesses,
redevelopment of Main Street where it connects to Fanno Creek, completion of Tigard Street Heritage
trail for improved pedestrian traffic and a proposed Universal Plaza offering more public space for events
and local activities.
In May 2017 the voters approved the creation of a second urban renewal area,the Tigard Triangle Urban
Renewal Area, for 35 years with maximum principal indebtedness of$188 million. As of fiscal year 2018-
19,the total debt issued is$183,000. No new debt will be incurred after the fiscal year 2052-53 as part of
this plan. The agency's ability to borrow additional funds will remain constrained for several more years
as tax increment revenue is based on property tax increases over time and growth was fairly slow at the
time the agency was created. Despite the slow growth,the agency has been able to leverage state,county
and local funds to make major improvements to streets, bicycle and pedestrian paths in the district.The
agency will continue to seek additional funding from outside sources for redevelopment opportunities as
planning continues for affordable housing and infrastructure improvements.
Requests for Information
This financial report is designed to provide a general overview of the agency's finances for all those with
an interest in the government's finances. Questions concerning any of the information provided in this
report or requests for additional financial information should be addressed to the Finance and Information
Services Director, City of Tigard, 13125 SW Hall Blvd.,Tigard, Oregon 97223.
12
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Basic Financial Statements
Town Center Development Agency
Statement of Net Position
June 30, 2019
Governmental
Activities
ASSETS:
Cash and cash equivalents $ 180,284
Property taxes receivable 8,154
Interest receivable 1,274
Restricted cash and cash equivalents 626,606
Land and construction in progress 2,243,368
Other capital assets, net of accumulated depreciation 1,497,572
Total assets 4,557,258
LIABILITIES:
Accounts payable and other accrued liabilities 33,120
Due within one year:
Bank loan payable 780,000
Due within more than one year:
Advances from city 940,705
Total liabilities 1,753,825
NET POSITION:
Net investment in capital assets 2,020,235
Restricted for debt service 636,034
Unrestricted 147,164
Total net position $ 2,803,433
The accompanying notes are an integral part of the basic financial statements.
16
Town Center Development Agency
Statement of Activities
Year Ended June 30, 2019
Net
(Expense)/Revenue
Program and Change in Net
Revenues Position
Rental Income and Total
Charges for Governmental
Functions/Programs Expenses Services Activities
Governmental activities:
Community development $ 395,110 $ 107,371 $ (287,739)
Interest on long-term debt 28,986 - (28,986)
Total governmental activities $ 424,096 $ 107,371 (316,725)
General revenues:
Property taxes 509,680
Interest earnings 16,182
Miscellaneous 16,789
Total revenues 542,651
Change in net position 225,926
Net position - beginning 2,577,507
Net position -ending $ 2,803,433
The accompanying notes are an integral part of the basic financial statements.
17
Town Center Development Agency
Balance Sheet-Governmental Funds and
Reconciliation to the Statement of Net Position
June 30,2019
Total
Capital Debt Governmental
Projects Service Funds
ASSETS:
Cash and cash equivalents $ 180,284 $ - $ 180,284
Property taxes receivable - 8,154.00 8,154.00
Interest receivable - 1,274 1,274
Restricted cash and cash equivalents - 626,606 626,606
Total assets $ 180,284 $ 636,034 $ 816,318
LIABILITIES:
Accounts payable and accrued liabilities $ 33,120 $ - $ 33,120
Total liabilities 33,120 - 33,120
DEFERRED INFLOWS OF RESOURCES:
Unavailable revenues-property taxes - 6,722 6,722
Total deferred inflows of resources - 6,722 6,722
FUND BALANCES:
Restricted for debt service - 629,312 629,312
Unassigned 147,164 - 147,164
Total fund balances 147,164 629,312 776,476
Total liabilities,deferred inflows
of resources and fund balances $ 180,284 $ 636,034
Capital assets used in governmental activities are not financial resources and are
not reported in the funds. 3,740,940
Long-term assets are not available to pay for current period expenditures and,
6,722
Long-term liabilities-not reported in the funds:
Loan from City of Tigard, not due and payable in the current period (940,705)
Loan from financial institution, not due and payable in the current period (780,000)
Net Position of Governmental Activities $ 2,803,433
The accompanying notes are an integral part of the basic financial statements.
18
Town Center Development Agency
Statement of Revenues, Expenditures and Changes in Fund Balance-Governmental Funds and
Reconciliation to the Statement of Activities
Year Ended June 30,2019
Total
Capital Debt Governmental
Projects Service Funds
REVENUES:
Taxes $ - $ 521,050 $ 521,050
Rental revenues 107,371 - 107,371
Interest earnings 50 16,132 16,182
Intergovernmental revenues 14,349 - 14,349
Miscellaneous revenues 2,440 - 2,440
Total revenues 124,210 537,182 661,392
EXPENDITURES:
Community Development 353,381 - 353,381
Capital projects 27,599 - 27,599
Debt service
Principal - 130,000 130,000
Interest - 28,986 28,986
Total expenditures 380,980 158,986 539,966
Change in fund balance before
other financing sources(uses) (256,770) 378,196 121,426
Other financing sources(uses):
Transfers in 187,706 - 187,706
Transfers out - (187,706) (187,706)
Debt Proceeds 183,273 - 183,273
Total other financing sources(uses) 370,979 (187,706) 183,273
Change in fund balance 114,209 190,490 304,699
Fund balance-beginning 32,955 438,822 471,777
Fund balance-ending $ 147,164 $ 629,312 $ 776,476
Net change in fund balances-total governmental funds $ 304,699
Governmental funds report capital outlays as expenditures while govermental activities
report depreciation expense to allocate thoses expenditures over the life of the assets.
Expenditures for capitalized assets 27,599
Depreciation reported in the government-wide statements (41,729)
Property taxes that do not provide current financial resources (11,370)
Long-term liabilities not reported in the funds (183,273)
Principal payments expensed on the fund financial statements 130,000
Change in Net Position of Governmental Activities $ 225,926
The accompanying notes are an integral part of the basic financial statements.
19
Notes to Basic Financial Statements
Town Center Development Agency
Notes to the Basic Financial Statements
1. Summary of Significant Accounting Policies:
The financial statements of the Town Center Development Agency(agency), previously Tigard City Center
Development Agency, have been prepared in accordance with accounting principles generally accepted
in the United States of America (GAAP) as applied to government units. GAAP statements include all
relevant Governmental Accounting Standards Board (GASB) pronouncements.
The Agency
The Town Center Development Agency, formerly the City Center Development Agency, was approved on
May 16, 2006 with plans to commence operations during fiscal year 2009 under the provisions of Oregon
Revised Statutes, Chapter 457 (ORS 457), to provide improvements in the downtown area so that it will
be economically healthy while maintaining its"uniquely Tigard" character.The 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 Tigard Triangle Urban
Renewal Area,for 35 years with maximum indebtedness of$188 million.
The agency is a legally separate entity, which is governed by a board comprised of the City Council, as
stipulated in the bylaws. The Council has the ability to impose its will on the agency as determined on the
basis of budget adoption,taxing authority, and funding. The purpose of the agency is to undertake urban
renewal projects and activities pursuant to the city's downtown redevelopment plan. The financial results
of the agency are reported herein as debt service funds and a capital projects funds.
The agency boundaries include primarily the city's central business district, general commercial district,
professional commercial district and the Tigard Triangle (an area bordered by 1-5, Highway 217, and
Highway 99 East). The agency is a blended component unit of the City of Tigard and its financial activities
are included in the basic financial statements of the city, which can be viewed on the city's website at
http://www.tigard-or.gov.
Basic Financial Statements
The agency's financial operations are presented at both the government-wide and fund financial levels.
All activities of the agency are categorized as governmental activities.
Government-wide financial statements
The Statement of Net Position and the Statement of Activities display information about the agency as a
whole. These statements include all the financial activities of the agency.
The Statement of Activities presents a comparison between direct expenses and program revenues for
each function of the agency's governmental activities. Direct expenses are clearly identifiable with a
specific function. All costs are supported by general revenues which include property taxes and interest
earnings.
22
Town Center Development Agency
Notes to the Basic Financial Statements
Fund financial statements
These statements display information at the individual fund level. Each fund is considered to be a separate
accounting entity. Funds are classified and summarized as governmental, proprietary and fiduciary.
Currently the agency has only governmental fund types.
Basis of Presentation
The financial transactions of the agency are recorded in individual funds. Each fund is accounted for by
providing a separate set of self-balancing accounts that comprises its assets, deferred outflows of
resources, liabilities, deferred inflows of resources,fund balance, revenues and expenditures.
GASB Statement No. 34 sets forth criteria (percentage of the assets, deferred outflows of resources,
liabilities, deferred inflows of resources, revenues or expenditures/expenses or either fund category or
the governmental and enterprise combined) for the determination of major funds. For purposes of
presentation, each of the agency's funds is presented as a major fund.
The City Center Debt Service Fund accounts for the accumulation of resources and payments for long-
term borrowings related to the City Center Urban Renewal Area.
The Tigard Triangle Debt Service Fund accounts for the accumulation of resources and payments for long-
term borrowings related to the Tigard Triangle Urban Renewal Area.
The City Center Capital Projects Fund accounts for the acquisition and development of capital assets
related to the City Center Urban Renewal Area.
The Tigard Triangle Capital Projects accounts for the acquisition and development of capital assets related
to the Tigard Triangle Urban Renewal Area.
Measurement Focus and Basis of Accounting
Measurement focus is a term used to describe which transactions are recorded within the various financial
statements. Basis of accounting refers to when transactions are recorded, regardless of the measurement
focus.
The government-wide financial statements are reported using the economic resources measurement
focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar
items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been
met.
The governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as
they are both measurable and available. Revenues are considered to be available when they are
collectible within the current period or soon enough thereafter to pay liabilities of the current period. For
this purpose, the agency considers revenues to be available if they are collectible within 60 days of the
end of the current fiscal period. The agency considers property taxes subject to accrual. Expenditures
23
Town Center Development Agency
Notes to the Basic Financial Statements
generally are recorded when a liability is incurred, as under accrual accounting. However, payment on
long-term borrowing is recorded only when payment is due.
Since the governmental fund statements are presented on a different measurement focus and basis of
accounting than the government-wide statements, reconciliation is necessary to explain the adjustments
needed to transform the fund-based financial statements into the government-wide presentation. These
reconciliations are presented with the governmental fund statements.
Cash and Investments
The city maintains a common cash and cash equivalents pool for all city funds, including funds of the
agency. Interest is earned and allocated monthly on pooled cash and cash equivalents based on each
fund's cash balances as a proportion of the city's total pooled cash and equivalents. The agency considers
cash and equivalents to include the pooled cash, since the pool has the general characteristics of a
demand deposit account, in that any participating fund may deposit additional cash at any time and also
may withdraw cash at any time without prior notice or penalty.
The agency reports certain cash and equivalents as restricted because their use is limited by parties
external to the agency. Restrictions may be imposed by creditors, other governments, laws and/or
enabling legislation.
Receivables and Payables
Property taxes are levied and become a lien on July 1. Collection dates are November 15, February 15,
and May 15 following the lien date. Discounts are allowed if the amount due is received by November 15
or February 15. Taxes unpaid and outstanding on May 16 are considered delinquent.
The majority of the agency's receivables are property taxes, which are deemed to be substantially
collectible.
Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets (e.g. roads, pathways,
street lights, etc.) are reported in the government-wide financial statements.
Capital assets are charged to expenditures as purchased or constructed in the governmental fund
statements, and capitalized in the government-wide financial statements. Capital assets are recorded at
historical cost or estimated historical cost. Upon disposal of an asset, cost and accumulated depreciation
(if applicable) is removed from the accounts and, if appropriate, a gain or loss on the disposal is
recognized.
Capital assets are defined for the agency as assets with an initial, individual cost of$5,000 or more, and
an estimated useful life of greater than one year. Additions or improvements and other capital outlays
that significantly extend the useful life of an asset, or that significantly increase the capacity of an asset
are capitalized. Donated capital assets are recorded at their estimated acquisition value at the time of
donation. Other costs for repairs and maintenance are expensed as incurred.
24
Town Center Development Agency
Notes to the Basic Financial Statements
Depreciation on exhaustible assets is calculated on the straight-line basis over the following estimated
useful lives:
Asset Years
Buildings and improvements 25-40
Improvements other than buildings 10-20
Infrastructure 20-40
Deferred Inflows of Resources
In addition to liabilities, the governmental fund balance sheet reports a separate section for deferred
inflows of resources. Deferred inflows of resources represent unavailable revenue that will be recognized
in a future period. The agency reports delinquent property tax revenue in this section under the modified
accrual basis of accounting. These revenues are deferred and recognized as an inflow of resources in the
period that the revenues become available.
Net Position and Fund Balance
Net position is reported on the Statement of Net Position. Within net position, the net investment in
capital assets represents total capital assets less accumulated depreciation, less any debt related to the
acquisition of the assets. Of the total net position,the majority is net investment in capital assets and the
remaining amount is restricted for debt service.
In the fund financial statements, the fund balance for governmental funds is reported in classifications
that comprise a hierarchy based primarily on the extent to which the government is bound to honor
constraints on the specific purposes for which amounts in those funds can be spent.
Fund balance is reported as restricted when the constraints placed on the use of resources are either: (a)
externally imposed by creditors (such as through debt covenants), grantors, contributors or laws or
regulations of other governments; or (b) imposed by law through constitutional provisions or enabling
legislation.
Use of Estimates
In preparing the agency's financial statements, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities,the disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported amounts of revenues and
expenses/expenditures during the reporting period. Actual results could differ from those estimates.
2. Stewardship, Compliance, and Accountability:
Budgets
The agency's budget is prepared in accordance with Oregon local budget law. All annual appropriations
lapse at fiscal year-end. During the month of February each year, the agency submits requests for
appropriations to the executive director so that a budget may be prepared. In June,the proposed budget
25
Town Center Development Agency
Notes to the Basic Financial Statements
is presented to the agency's board of directors for approval. The board holds public hearings and a final
budget must be prepared and adopted no later than June 30.
The adopted budget is prepared by fund and function. The legal level of budgetary control, (i.e.,the level
at which expenditures may not legally exceed appropriations) is the fund and function level.
3. Cash and Investments:
The agency's cash and investments reported on the Statement of Net Position and Balance Sheet
represent the agency's share of the city's cash and investment pool. The agency's participation in the
cash and investment pool is involuntary. Interest earnings from this pool are allocated to the agency on
a monthly basis based on the cash and investment balance of the agency to the total investments in the
pool. At June 30,2019 the agency's share of the city's cash and investment pool, including restricted and
unrestricted,totaled $806,890 all of which is restricted by the requirements of the agency's property tax
levy. It is not practical to determine the investment risk, collateral risk or insurance coverage for the
agency's share of its pooled investments. Investments for the city as well as its component unit are
reported at fair value.
Information about the pooled investments is included in the city's annual financial report and may be
obtained by contacting the city's Finance Department at 13125 SW Hall Blvd.,Tigard, OR 97223 or found
online at: http://www.tigard-or.gov/citv hall/finance and information services.DhD
4. Receivables and Payables:
Property taxes are levied and become a lien on July 1. Collection dates are November 15, February 15,
and May 15 following the lien date. Discounts are allowed if the amount due is received by November 15
or February 15. Taxes unpaid and outstanding on May 16 are considered delinquent. The agency's
receivables, including property taxes and assessments are deemed to be substantially collectible. Tax and
assessments receivable can be recovered through foreclosure on the subject property.
Accounts payable to vendors and contractors include general accounts payable not included in short-term
or long-term liabilities.
5. Capital Assets:
Capital assets include a property purchase for redevelopment projects on Main Street, the completion
of two projects for the Strolling Street landscaping program, Main Street gateway improvements and
public artwork.
26
Town Center Development Agency
Notes to the Basic Financial Statements
Balance Balance
June 30, 2018 Additions Deletions Transfers June 30, 2019
Land $ 985,504 $ - $ - $ - $ 985,504
Construction in Progress 1,230,265 27,599 - - 1,257,864
Infrastructure 1,669,087 - - - 1,669,087
Total cost 3,884,856 27,599 - - 3,912,455
Depreciation
Infrastructure (129,786) (41,729) - - (171,515)
Capital assets, net $ 3,755,070 $ (14,130) $ - $ - $ 3,740,940
6. Leased Property
In connection with acquiring property and a building in the downtown area,the agency assumed a lease
agreement as the lessor that extends through July 31, 2021. The lease has the option of one additional
extension of three years. The property and building are recorded at $1,360,929 less the related
accumulated depreciation of$63,192 for a net book value of$1,297,737. Minimum future rental income
under the lease agreement is as follows:
Year ending June 30
2020 $ 95,040
2021 95,040
$ 190,080
7. Long-term Borrowing:
The agency has two urban renewal district areas approved to finance improvement projects with
property tax increment financing. The first area is the City Center Urban Renewal District (CCUR) with a
maximum indebtedness of $22 million for a duration of 20 years. As of fiscal year 2018-19, the CCUR
issued $3.24 million in total debt against the maximum indebtedness. The second area is the Tigard
Triangle Urban Renewal District (TTUR) with a maximum indebtedness of$188 million for a duration of
35 years. As of fiscal year 2018-19, the TTUR issued $183,000 in total debt against the maximum
indebtedness.
In order to finance improvement projects, the agency and the city entered into an intergovernmental
agreement (IGA) that states the city will loan the agency resources as needed to cover project costs
related to the Town Center Urban Renewal Plan. All of the outstanding debt of the agency is considered
from direct borrowings and placements.
The terms of the IGA state that the agency agrees to repay the principal and accrued interest on all loan
amounts solely from tax increment revenues. The interest rate calculated for the loans is based on the
same average rate as that earned on other funds invested by the city at the time of the loan, which
27
Town Center Development Agency
Notes to the Basic Financial Statements
currently ranges from 0.50%to 2.75%. Interest-only payments are scheduled to be paid to the city prior
to July 1, each fiscal year.
During the fiscal year ending June 30, 2025 the agency will begin making principal payments to the city
on outstanding loans. Payments are to be made as tax increment revenue or other funding sources are
available. In no case shall the repayment timeline exceed the life of the agency. Under the terms of the
IGA, the city may forgive or reduce the interest and/or principal due from the agency. The agency may
also repay the debt early. In fiscal year 2019 the agency received a loan from the city in the amount of
$183,273 for the Tigard Triangle Capital Projects fund. In fiscal year 2019 the agency elected to repay
none of the outstanding principal on the loans.
In fiscal year 2015 the city received a $1,300,000 loan, borrowed at 3.00% and backed by the city's full
faith and credit and taxing power, from a financial institution to finance a property purchase within the
TCDA. 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. This agreement states the
agency will make the payments on the bank loan to the financial institution from the tax increment
revenues pursuant to ORS 287A.310. The IGA constitutes indebtedness of the agency in the amount of
the financing or $1,300,000. 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, at a
default rate of 3% of the outstanding balance until the default is remedied. As of June 30, 2019,
the bank loan principal outstanding was$780,000.
Future principal and interest payments on the bank loan and the city loans are as follows:
Borrowing Transactions Interest
Outstanding Outstanding Due in one
Outstanding Loans June 30,2018 Additions Paid June 30,2019 Paid year
Loans from City of Tigard
for urban renewal projects:
Loan#5 June 30,2013 $ 102,320 $ - $ - $ 102,320 $ 512 $ -
Loan#5 June 30,2013 40,112 - - 40,112 201 -
Loan#6 June 30,2014 361,000 - - 361,000 1,949 -
Loan#7 June 30,2015 254,000 - - 254,000 1,270 -
Loan#8 June 30,2019 - 183,273 - 183,273 - -
Bank loan payable 910,000 - (130,000) 780,000 25,055 780,000
Total $ 1,667,432 $ 183,273 $ (130,000) $ 1,720,705 $ 28,986 $ 780,000
28
Town Center Development Agency
Notes to the Basic Financial Statements
Future requirements related to long-term borrowing are as follows:
Fiscal Year
Ending Loans from the City Bank Loan Totals
June 30 Principal Interest Principal Interest Principal Interest
2020 $ - $ 4,443 $ 780,000 $ 11,681 $ 780,000 $ 16,124
2021 - 8,972 - - - 8,972
2022 - 8,972 - - - 8,972
2023 - 8,972 - - - 8,972
2024 - 8,972 - - - 8,972
2025-2029 287,274 42,639 - - 287,274 42,639
2030-2034 448,764 30,736 - - 448,764 30,736
2035-2040 204,667 11,993 - - 204,667 11,993
$ 940,705 $ 125,699 $ 780,000 $ 11,681 $ 1,720,705 $ 137,378
8. Risk Management:
As a component unit of the city, the agency is exposed to various risks of loss related to torts; theft of,
damage to and destruction of assets;errors and omissions;and natural disasters for which the city carries
commercial insurance. The city has established risk management programs for liability insurance
coverage. The agency is covered under policies and programs insuring the city. There were no insurance
claims attributable to the agency as of June 30, 2019.
9. 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. This agreement states the agency will make the
payments on the bank loan to the financial institution from the tax increment revenues.
Future projects funded under the new financing agreement include Universal Plaza, Fanno Creek
Overlook,trail lighting and a public restroom.
29
Required Supplementary Information
Town Center Development Agency
City Center Capital Projects Fund
Schedule of Revenues and Expenditures- Budget and Actual
For the fiscal year ended June 30, 2019
Variance with
Budgeted Amounts Actual Final Budget
Original Final Amounts Over(Under)
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:
Community development - 144,950 160,108 (15,158)
Capital projects* 400,950 316,500 27,599 288,901
Total expenditures 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:
Transfers 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 purposes expenditures are appropriated as capital projects, however on the
GAAP statements non-capital transactions are recorded as program expenditures.
32
Town Center Development Agency
Tigard Triangle Capital Projects Fund
Schedule of Revenues and Expenditures- Budget and Actual
For the fiscal year ended June 30, 2019
Variance with
Budgeted Amounts Actual Final Budget
Original Final Amounts Over(Under)
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:
Transfers 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 purposes expenditures are appropriated as capital projects, however on the
GAAP statements non-capital transactions are recorded as program expenditures.
33
Other Supplementary Information
Town Center Development Agency
City Center Debt Service Fund
Schedule of Revenues and Expenditures- Budget and Actual
For the fiscal year ended June 30, 2019
Variance with
Budgeted Amounts Actual Final Budget
Original Final Amounts Over(Under)
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 USES
Transfers 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
* Budget appropriation for the Urban Renewal Agency is made at the debt service program level.
36
Town Center Development Agency
Tigard Triangle Debt Service Fund
Schedule of Revenues and Expenditures- Budget and Actual
For the fiscal year ended June 30, 2019
Variance with
Budgeted Amounts Actual Final Budget
Original Final Amounts Over(Under)
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 $ - $ - $ - $ -
* Budget appropriation for the Urban Renewal Agency is made at the debt service program level.
37
INDEPENDENT AUDITOR'S REPORT REQUIRED BY OREGON STATE REGULATIONS
MOSSADAMS
Report of Independent Auditors on Compliance and on Internal Control Over
Financial Reporting Based on an Audit of Financial Statements Performed in
Accordance with Oregon Minimum Audit Standards
Board Members
Town Center Development Agency (A component unit of the City of Tigard, Oregon)
Tigard, Oregon
We have audited the basic financial statements of the Town Center Development Agency, a component
unit of the City of Tigard, Oregon (the Agency), 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 Agency's basic financial statements are
free from material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, grants, including provisions of Oregon Revised Statutes as specified in Oregon
Administrative Rules OAR 162-010-0000 to 162-010-0330, as set forth below, noncompliance with which
could have a direct and material effect on the determination of financial statement amounts:
Instances of Non-
compliance
OAR Section Identified?
162-010-0000 Preface None Noted
162-010-0010 Definitions None Noted
162-010-0020 Introduction None Noted
162-010-0030 General Requirements None Noted
162-010-0050 Financial Statements None Noted
162-010-0115 Required Supplementary Information(RSI) None Noted
162-010-0120 Other Supplementary Information None Noted
162-010 0130 Schedule of Revenues, Expenditures/Expenses,and Changes in Fund Balances,/Net 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
162-010-0300 Investments None Noted
162-010-0310 Public Contracts and Purchasing None Noted
162-010-0320 Other Comments and Disclosures None Noted
40
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 Agency's internal control over financial reporting
(internal control)to determine the audit procedures that are appropriate in the circumstances for the
purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of the Agency's internal control over financial reporting. Accordingly, we do
not express an opinion on the effectiveness of the Agency's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination
of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement
of the Agency'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 Agency'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 Agency's internal control and compliance. Accordingly, this communication is not
suitable for any other purpose.
For Moss Adams LLP
Portland, Oregon
December 5, 2019
41