CCDA Report FY Ending June 30, 2015 CityCenter Development A...., CCDA Tigard, Oregon's Urban RenewalAgency
,1 Annual Financial Report 1 For the fiscal year ended June 30, 2015
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TIGARD CITY CENTER DEVELOPMENT AGENCY
(A Component Unit of the City of Tigard, Oregon)
ANNUAL FINANCIAL REPORT
For the fiscal year ended June 30, 2015
Prepared by:
City of Tigard — Financial and Information Services Department
City Center Development Agency
Table of Contents
List of Officials 1
Independent Auditor's Report 2
Management's Discussion and Analysis 5
Basic Financial Statements
Government-Wide Financial Statements
Statement of Net Position 9
Statement of Activities 10
Fund Financial Statements—Governmental Funds
Balance Sheet 11
,.� Statement of Revenues and Expenditures 12
Notes to Basic Financial Statements 13
Required Supplementary Information
Schedule of Revenues and Expenditures—Budget and Actual:
Urban Renewal Agency Capital Projects Fund 19
Other Supplementary Information
Schedule of Revenues and Expenditures—Budget and Actual:
,•� Urban Renewal Agency Debt Service Fund 20
Schedule of Property Tax Transactions and Outstanding Balances:
Urban Renewal Agency Debt Service Fund 21
Independent Auditor's Report Required by Oregon State Regulations 22
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Tigard City Center Development Agency
Fiscal Year 2014-2015
CITY CENTER DEVELOPMENT AGENCY BUDGET COMMITTEE
Don Fisher Mayor John L. Cook
Melody Graeber Councilor Gretchen Buehner
Julie Plotz Councilor Marland Henderson `.
Bill Bigcraft Councilor Jason Snider
Clifford Rone Councilor Marc Woodard
Timothy Esau,Alternate
CITY CENTER DEVELOPMENT AGENCY BOARD
John L. Cook, Chair
Gretchen Buchner Jason Snider
Marc Woodard Marland Henderson
EXECUTIVE DIRECTOR
Marty Wine
COMMUNITY DEVELOPMENT DIRECTOR
Kenny Asher
s.,
REDEVELOPMENT PROJECT MANAGER for DOWNTOWN
Sean Farrelly
FINANCE and INFORMATION SERVICES DIRECTOR �..
Toby LaFrance
CITY CENTER DEVELOPMENT AGENCY
City of Tigard 1 13125 Hall Blvd. I Tigard,OR 97223 1503-639-4171
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INDEPENDENT AUDITOR'S REPORT
, Board Members
Tigard City Center Development Agency
k (A component unit of the City of Tigard, Oregon)
Tigard, Oregon
REPORT ON THE FINANCIAL STATEMENTS
TKIll
We have audited the accompanying financial statements of the governmental
Talbot,Korvola activities and each major fund of the Tigard City Center Development Agency (the
&Warwick, la Agency) a component unit of the City of Tigard, Oregon, as of and for the year ended
June 30, 2015, and the related notes to the financial statements, which collectively
ertifiedPubluAttountanls comprise the Agency's basic financial statements as listed in the Table of Contents.
c tonsullants
MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
ACHIEVE MORE
Management is responsible for the preparation and fair presentation of these
•••• 4800 Meadows Road.Sulte200 financial statements in accordance with accounting principles generally accepted in
Lake Oswego.0tegon97035-4293 the United States of America; this includes the design, implementation, and
P50321428G9 maintenance of internal control relevant to the preparation and fair presentation of
F>03.v4.2853 financial statements that are free from material misstatement, whether due to fraud
or error.
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AUDITOR'S RESPONSIBILITY
^
Our responsibility is to express opinions on these financial statements based on our
audit. We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts
and disclosures in the financial statements. The procedures selected depend on the
auditor's judgment. including the assessment of the risks of material misstatement
of the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity's internal control.
Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinions.
MCGLADREY ALLIANCE - McGladrey
The McGladrey Alliance is a premier affiliation .102pen.Uvra.3....Ju tOly anc?cons.,t.ig t.,ns. Tne McGladrey Alliance member firms maintain their name.
autonomy and independence and are responsible for their own client fee arrangements.delivery of services and maintenance of client relationships.
INDEPENDENT AUDITOR'S REPORT (Continued)
Board Members
Tigard City Center Development Agency
(A component unit of the City of Tigard, Oregon)
Page 2
OPINIONS
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities and each major fund of the Agency, l-
as of June 30, 2015. and the respective changes in financial position for the year then ended in
accordance with accounting principles generally accepted in the United States of America.
OTHER MATTERS
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that
Management's Discussion and Analysis, as listed in the Table of Contents. be presented to
supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board who considers
it to be an essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic, or historical context. We have applied certain limited
procedures to the required supplementary information in accordance with auditing standards
generally accepted in the United States of America, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency
with management's responses to our inquiries, the basic financial statements, and other `-
knowledge we obtained during our audit of the basic financial statements. We do not express an
opinion or provide any assurance on the information because the limited procedures do not
provide us with sufficient evidence to express an opinion or provide any assurance.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Agency's basic financial statements. The accompanying budgetary —
comparison information for the Urban Renewal Agency Capital Projects Fund. as listed in the —
Table of Contents as Required Supplementary Information, is not a required part of the basic
financial statements and is presented for purposes of additional analysis, and is required by the
Governmental Accounting Standards Board who considers it to be an essential part of financial
reporting for placing the basic financial statements in an appropriate operational, economic. or
historical context. Such information is the responsibility of management and was derived from
and relates directly to the underlying accounting and other records used to prepare the basic
financial statements. This information has been subjected to the auditing procedures applied in `.
the audit of the basic financial statements and certain additional procedures, including comparing
and reconciling such information directly to the underlying accounting and other records used to
prepare the procedures in accordance with auditing standards generally accepted in the United
States of America. In our opinion, the Required Supplementary Information is fairly stated, in all _
material respects, in relation to the basic financial statements as a whole.
Other 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 other schedules, listed in the —
Table of Contents as Other Supplementary Information, are presented for purposes of additional
analysis and are not a required part of the basic financial statements. The Other Supplementary
3 `/
( ^ INDEPENDENT AUDITOR'S REPORT (Continued)
I �
Board Members
Tigard City Center Development Agency
(A component unit of the City of Tigard, Oregon)
Page 3
OTHER MATTERS (Continued)
Other Supplementary Information (Continued)
Information is the responsibility of management and was derived from and relates directly to the
underlying accounting and other records used to prepare the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit of the basic
financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic
financial statements or to the basic financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of
America. In our opinion, the Other Supplementary Information is fairly stated, in all material
respects, in relation to the basic financial statements as a whole.
OTHER REPORTING REQUIRED BY OREGON MINIMUM STANDARDS
In accordance with Minimum Standards for Audits of Oregon Municipal Corporations, we have
also issued our report dated February 23, 2016, on our consideration of the Agency's compliance
with certain provisions of laws and regulations, including the provisions of Oregon Revised
Statutes as specified in Oregon Administrative Rules. The purpose of that report is to describe
the scope of our testing of compliance and the results of that testing and not to provide an opinion
on compliance.
TALBOT, KORVOLA & WARWICK, LLP
BY
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Timothy R. illette, P ner
Lake Oswego, Oregon
February 23, 2016
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Management's Discussion and Analysis
As part of this Annual Financial Report,the Tigard City Center Development Agency (agency), a component
unit of the City of Tigard,Oregon,offers readers this narrative overview and analysis of the financial activities
,.� of the agency for the fiscal year ended June 30,2015. It focuses on significant financial issues,major financial
activities, and resulting changes in financial position, as well as economic factors affecting the agency. This
Management's Discussion and Analysis (MD&A) is based on currently known facts,decisions,and conditions
•� that existed as of the date of the report.
Financial Highlights
• The assets of the agency exceeded its liabilities at the close of the most recent fiscal year by
$1,409,994. Of this amount,$410,877 is restricted for the repayment of debt.
• The agency's net position increased $364,656 over the course of the year, primarily due to
contributed capital assets from the City to CCDA.
• In the fund financial statements, there were total expenditures of$2,044,075 for FY 2014-15. The
payments in the Capital Projects Fund ($1,770,924) were for development and design of the
downtown area as well as consulting for potential real estate purchases. The payments in the Debt
Service Fund ($273,151) were for principal and interest payments to the City of Tigard.
• Also in the fund financial statements, the agency recognized $455,578 in revenue from property
taxes,miscellaneous revenue and interest earnings.
Overview of the Financial Statements
—, The following discussion and analysis is intended to serve as an introduction to the agency's basic financial
statements. The agency's basic financial statements include three components:
1. Government-wide financial statements,
2. Fund financial statements,and
3. Notes to the financial statements.
^ Government-wide financial statements
Government-wide financial statements are designed to provide readers with a broad overview of the agency's
finances,in a manner that is similar to a private-sector business.
The Statement of Net Position presents information on all of the agency's assets and liabilities, with the
difference between the two reported as net position. Over time, increases or decreases in net position may
serve as a useful indicator of whether the financial position of the agency is improving or deteriorating.
"NiANN
The Statement of Activities presents information on how the agency's net position changed during the most
,.� recent fiscal year. All changes in net position are reported as soon as the underlying event occurs, regardless
of the timing of related cash flows. Thus, revenues and expenses are reported in the statement for some
items that will result in cash flows in a future period,such as earned but uncollected property taxes.
The government-wide financial statements indicate that the functions of the agency are principally supported
by property taxes and are considered governmental activities. The agency does not have business-type
activities in which costs are covered through user fees or charges.
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Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or functions. The agency uses fund accounting to ensure and demonstrate
compliance with finance-related legal requirements. All of the funds of the agency are considered
governmental funds.
Governmental funds are used to account for agency functions that are supported primarily by taxes and
intergovernmental revenues. These are essentially the same functions that are reported as governmental �.•
activities in the government-wide financial statements. Unlike government-wide financial statements,
governmental fund financial statements focus on the acquisition and use of spendable resources, as well as
balances of available spendable resources at the end of the fiscal year. Such information may be useful in `/
evaluating the agency's near-term requirements.
The agency maintains two separate governmental funds consisting of the Urban Renewal Debt Service Fund ti/
and the Urban Renewal Capital Projects Fund. The Capital Projects Fund functions as the agency's general
operations fund. Information for each fund is presented separately in the governmental funds balance sheet
and in the governmental funds statement of revenues and expenditures.
Notes to the basic Financial Statements
The notes provide additional information that is essential for a full understanding of the data provided in the
government-wide and fund financial statements. They are an integral part of the financial statements and
should be read in conjunction with them.
Government-wide Financial Analysis
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As noted earlier, net position may serve over time as a useful indicator of the agency's financial position. In
the case of the agency, assets increased as revenues,primarily property taxes, exceeded expenses and resulted
in an increase in cash and receivables. `,,
Tigard City Center Development Agency
Statement of Net Position
June 30,
2015 2014 irof
ASSETS: Lie
Cash and investments $ 949,001 $ 835,967
Receivables 14,838 90,193
Capital assets 2,651,801 949,750
Total assets 3,615,640 1,875,910
LIABILITIES:
Accounts payable and other accrued liabilities 98,468 25,777
Due within one year:
Bank loan payable 130,000 -
Due within more than one year:
Advances from City 807,178 804,795
Bank loan payable 1,170,000 -_
Total liabilities 2,205,646 830,572
NET POSITION: —
Net investment in capital assets 999,117 144,955
Restricted for debt service 410,877 848,513
Restricted for capital projects - 51,870
Total net position S 1,409,994 S 1,045,338
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Tigard City Center Development Agency
Change in Net Position
For the Year Ended June 30,
REVENUES: 2015 2014
oaeN General revenues:
Property taxes $ 350,138 $ 331,148
Intergovernmental revenue 149,872 100,000
A'1 Miscellaneous 78,262 869
Interest earnings 1,663 28,116
Total revenues 579,935 460,133
ANN
EXPENSES:
ANN
Community development 193,745 354,353
', Interest on long-term debt 21,534 3,010
Total expenses 215,279 357,363
Change in net position 364,656 102,770
,0444, Net position-beginning 1,045,338 942,568
Net position-ending $ 1,409,994 $ 1,u45,338
Capital Assets and Debt Administration
Capital Assets
10"1 As of June 30,2015 the agency had invested$2,651,801 in capital assets as reflected in the following table:
Governmental Activities
ows
2015 2014
Land $ 380,918 $ 256,046
Infrastructure 1,810,021 444,712
Angs Construction in progress 482,044 264,011
Accumulated depredation (21,182) (15,019)
Total
$ 2,651,801 $ 949,750
The agency invested in land right-of-way purchases in order to construct improvements, such as expanded
''1 sidewalks, signage and road design in the Downtown Tigard area per the Urban Renewal Plan. Additional
information on the agency's capital assets can be found on page 16 of this report.
Debt
Under the Intergovernmental Agreement (IGA) between the agency and the City of Tigard, loans from
Tigard to the Agency are repaid in ten equal payments on the principal starting ten years after the loan;
oiNN however, interest payments start in the second year after the loan. In FY 2014-15, the Agency took its
seventh loan from Tigard General Fund in the amount of$254,000. The Debt Service Fund elected to make
an early repayment of$251,617 during the year.
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On September 2, 2014, the Agency borrowed $1,300,000 from a financial bank to purchase property located
in the downtown area. The first payment on the bank loan was for interest only and paid in March 2015.
Payments of principal and interest are due in March and September annually until the final payment in
September of 2019. Additional information on the agency's debt can be found on pages 17-18 of this report.
Budgetary Highlights
The Tigard City Center Development Agency budget consists of two funds: The Capital Projects Fund,
which functions as the agency's general operations fund, and the Debt Service Fund. The Capital Projects
Fund activity is supported by loans from the City of Tigard and a bank loan. The city loans will be repaid
with interest once the agency begins generating enough tax increment revenue. The focus of the fiscal year
2014-15 budget was downtown facade improvements, property improvement for development, landscape
architecture and real estate consulting. These projects are on-going and have been carried over into the 2015-
16 budget. Two budget adjustments were necessary during the fiscal year, one to request $32,000 of Aso
appropriations carry forward to complete two projects in the facade improvement program and a second to
request$1,330,000 for external financing for downtown redevelopment acquisition projects.
The budget for fiscal year 2015-16 includes continuation of the items listed above, along with funding for
improvements to vacant properties that could house restaurants and targeted retail businesses on Main Street.
In addition,various marketing and development opportunities will be pursued.
Economic Factors
The Tigard City Center Development Agency is an urban renewal agency approved by voters in 2006. The
agency started at the beginning of the recession which has contributed to a slow growth in property values.
Urban renewal agencies generally start slow since revenue is generated by incremental increases in property
values, and with the timing of the recession, the agency has grown at an even slower pace than originally `/
anticipated. Despite the slow growth, the agency has been able to leverage state, county and local funds to
make major improvements to streets,bicycle and pedestrian paths in the district.
In addition to funding from outside sources, the agency is approaching a funding base that will allow it to
secure private financing. In fiscal year 2015-16 staff will pursue outside funding for any large projects that are
planned in the area.
Requests for Information
This financial report is designed to provide a general overview of the agency's finances for all those with an
interest in the government's finances. Questions concerning any of the information provided in this report
or requests for additional financial information should be addressed to the Finance and Information Services
Director,City of Tigard, 13125 SW Hall Blvd.,Tigard,Oregon 97223.
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Basic Financial Statements
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Tigard City Center Development Agency
Statement of Net Position
June 30,2015
Governmental
Activities
ASSETS:
ArsCash and investments $ 949,001
Receivables 14,838
Capital assets 2,651,801
Total assets 3,615,640
LIABILITIES:
Accounts payable and other accrued liabilities 98,468
Due within one year:
Bank loan payable 130,000
Due within more than one year:
Advances from City 807,178
Bank loan payable 1,170,000
Total liabilities 2,205,646
NET POSITION:
Net investment in capital assets 999,117
Restricted for debt service 410,877
Total net position $ 1,409,994
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The accompanying notes are an integral part of the basic financial statements.
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Tigard City Center Development Agency
Statement of Activities
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Year Ended June 30,2015
Net
(Expense)/Revenue �..
Program and Change in Net
Revenues Position
Total
Operating Grants Governmental
Functions/Programs Expenses and Contributions Activities `r
Governmental activities:
Community development $ 193,745 $ 149,872 $ (43,873)
Interest on long-term debt 21,534 - (21,534)
Total governmental activities $ 215,279 $ 149,872 (65,407)
General revenues:
Property taxes 350,138
Miscellaneous 78,262
Interest earnings 1,663
Total general revenues 430,063
Change in net position 364,656
Net position-beginning 1,045,338
Net position-ending $ 1,409,994
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The accompanying notes are an integral part of the basic financial statements.
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Tigard City Center Development Agency
Balance Sheet- Governmental Funds
.-� June 30,2015
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Total
Capital Debt Governmental
Projects Service Funds
ASSETS:
,.� Cash and investments $ 552,962 $ 396,039 $ 949,001
Property taxes receivable - 14,838 14,838
INN
Total assets $ 552,962 $ 410,877 $ 963,839
LIABILITIES:
Accounts payable and accrued liabilities $ 98,468 $ - $ 98,468
DEFERRED INFLOWS OF RESOURCES:
Unavailable revenues -property taxes - 13,440 13,440
"to, FUND BALANCES:
Restricted for debt service - 397,437 397,437
Restricted for capital projects 454,494 - 454,494
Total fund balances 454,494 397,437 851,931
Total liabilities,deferred inflows
of resources and fund balances $ 552,962 $ 410,877
Capital assets used in governmental activities are not financial resources and are
not reported in the funds. 2,651,801
Long-term assets are not available to pay for current period expenditures and,
.•r herefore,are unearned in the funds-property taxes earned but not available 13,440
Long-term liabilities-not reported in the funds:
Loan from City of Tigard,not due and payable in the current peroid (807,178)
Loan from financial institution,not due and payable in the current peroid (1,300,000)
Net Position of Governmental Activities $ 1,409,994
Avet
ors
The accompanying notes are an integral part of the basic financial statements.
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Tigard City Center Development Agency N...
Statement of Revenues and Expenditures-Governmental Funds
Year Ended June 30,2015
Total
Capital Debt Governmental _
Projects Service Funds
REVENUES:
Taxes $ - $ 350,653 $ 350,653
Intergovernmental revenues 25,000 - 25,000
Miscellaneous 78,157 105 78,262 \w
Interest earnings - 1,663 1,663
Total revenues 103,157 352,421 455,578
EXPENDITURES:
Capital projects 1,770,924 - 1,770,924
Debt service
Principal - 251,617 251,617 1w,
Interest - 21,534 21,534 L,
Total expenditures 1,770,924 273,151 2,044,075
Change in fund balance before `,
other financing sources (uses) (1,667,767) 79,270 (1,588,497)
Other financing sources (uses): 1.,
Transfers in 516,391 - 516,391
Transfers out - (516,391) (516,391)
Proceeds from borrowing 1,300,000 - 1,300,000 1'`
Resources provided by City 254,000 - 254,000 \..
Total other financing sources (uses) 2,070,391 (516,391) 1,554,000 1.0
Change in fund balance 402,624 (437,121) (34,497) `..
FUND BALANCE-BEGINNING 51,870 834,558 886,428
FUND BALANCE-ENDING $ 454,494 $ 397,437 $ 851,931
sw
Net change in fund balances-total governmental funds $ (34,497)
Governmental funds report capital outlays as expenditures while govermental activities 1..,
report depreciation expense to allocate thoses expenditures over the life of the assets. 1✓
Expenditures for capitalized assets 1,583,342
Contributed capital 124,872
Depreciation reported in the government-wide statements (6,163)
Property taxes that do not provide current financial resources (515)
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Long-term liabilities not reported in the funds (1,554,000)
Principal payments expensed on the fund financial statements 251,617
1 ,
Change in Net Position of Governmental Activities $ 364,656
The accompanying notes are an integral part of the basic financial statements. �'
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Notes to Basic Financial Statements
1. Summary of Significant Accounting Policies:
The financial statements of the Tigard City Center Development Agency (agency) have been prepared in
accordance with accounting principles generally accepted in the United States of America (GAAP) as applied
to government units. GAAP statements include all relevant Governmental Accounting Standards Board
(GASB)pronouncements.
The Agency
The Tigard City Center Development Agency was approved on May 16, 2006 with plans to commence
operations during fiscal year 2009 under the provisions of Oregon Revised Statutes, Chapter 457 (ORS 457),
,.� to provide improvements in the downtown area so that it will be economically healthy while maintaining its
"uniquely Tigard"character.
,.� The Tigard City Center Development Agency is a legally separate entity, which is governed by a board
comprised of the City Council, as stipulated in the bylaws. The Council has the ability to impose its will on
the agency as determined on the basis of budget adoption, taxing authority,and funding. The purpose of the
-1 agency is to undertake urban renewal projects and activities pursuant to the city's downtown redevelopment
plan. The financial results of the agency are reported herein as a debt service fund and a capital projects fund.
— The agency is a blended component unit of the City of Tigard and its financial activities are included in the
basic financial statements of the City. The agency boundaries include primarily the city's central business
district,general commercial district and professional commercial district.
Basic Financial Statements
The agency's financial operations are presented at both the government-wide and fund financial levels. All
,-� activities of the agency are categorized as governmental activities.
Government-wide financial statements
The Statement of Net Position and the Statement of Activities display information about the agency as a
whole. These statements include all the financial activities of the agency.
The Statement of Activities presents a comparison between direct expenses and program revenues for each
function of the agency's governmental activities. Direct expenses are clearly identifiable with a specific
function. All costs are supported by general revenues which include property taxes and interest earnings.
Fund financial statements
Ams These statements display information at the individual fund level. Each fund is considered to be a separate
accounting entity. Funds are classified and summarized as governmental,proprietary and fiduciary. Currently
the agency has only governmental fund types.
Basis of Presentation
The financial transactions of the agency are recorded in individual funds. Each fund is accounted for by
providing a separate set of self-balancing accounts that comprises its assets, deferred outflows of resources,
liabilities,deferred inflows of resources, fund balance,revenues and expenditures.
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1. Summary of Significant Accounting Policies Cont'd: Nie
GASB Statement No. 34 sets forth criteria (percentage of the assets,deferred outflows of resources,liabilities, \'`
deferred inflows of resources, revenues or expenditures/expenses or either fund category or the
governmental and enterprise combined) for the determination of major funds. For purposes of presentation,
each of the agency's funds is presented as a major fund.
The Urban Renewal Debt Service Fund accounts for the accumulation of resources and payments for long-
term borrowings related to the Tigard City Center Development Agency.
The Urban Renewal Capital Projects Fund accounts for the acquisition and development of capital assets
related to the Tigard City Center Development Agency and serves as the agency's general operations fund.
Measurement Focus and Basis of Accounting
Measurement focus is a term used to describe which transactions are recorded within the various financial
statements. Basis of accounting refers to when transactions are recorded, regardless of the measurement
focus.
The government-wide financial statements are reported using the economic resources measurement focus
and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded
when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items are
recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
�r
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 \ e
current period or soon enough thereafter to pay liabilities of the current period. For this purpose,the agency
considers revenues to be available if they are collectible within 60 days of the end of the current fiscal period.
The agency considers property taxes subject to accrual. Expenditures generally are recorded when a liability is kre
incurred, as under accrual accounting. However, payment on long-term borrowing is recorded only when
payment is due.
'4r
Since the governmental fund statements are presented on a different measurement focus and basis of
accounting than the government-wide statements, reconciliation is necessary to explain the adjustments
needed to transform the fund-based financial statements into the government-wide presentation. These
reconciliations are presented with the governmental fund statements.
Cash and Investments
The agency considers cash equivalents as all highly liquid debt instruments purchased with maturity of three
months or less. Investments included in cash and cash equivalents are reported at fair value.
Capital Assets
Capital assets,which include property,plant,equipment and infrastructure assets (e.g. roads,pathways, street
lights,etc.) are reported in the government-wide financial statements.
Capital assets are charged to expenditures as purchased or constructed in the governmental fund statements,
and capitalized in the government-wide financial statements. Capital assets are recorded at historical cost or
estimated historical cost.
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1. Summary of Significant Accounting Policies Cont'd:
Capital assets are defined for the agency as assets with an initial, individual cost of$5,000 or more, and an
estimated useful life of greater than one year. Additions or improvements and other capital outlays that
significantly extend the useful life of an asset, or that significantly increase the capacity of an asset are
,.� capitalized. Other costs for repairs and maintenance are expensed as incurred.
Depreciation on exhaustible assets is calculated on the straight-line basis over the following estimated useful
,.� lives:
Asset Years
Buildings and improvements 25-40
Improvements other than buildings 10-20
Infrastructure 20-40
Fund Balance
In the fund financial statements, the fund balance for governmental funds is reported in classifications that
.-� comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints
on the specific purposes for which amounts in those funds can be spent.
Fund balance is reported as restricted when the constraints placed on the use of resources are either: (a)
externally imposed by creditors (such as through debt covenants), grantors, contributors or laws or
regulations of other governments; or (b) imposed by law through constitutional provisions or enabling
legislation. All of the agency's fund balance is restricted under state law.
Use of Estimates
In preparing the agency's financial statements, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of revenues and expenses/expenditures during
the reporting period. Actual results could differ from those estimates.
2. Stewardship, Compliance, and Accountability:
Budgets
The agency's budget is prepared in accordance with Oregon local budget law. All annual appropriations
lapse at fiscal year-end. During the month of February each year, the agency submits requests for
appropriations to the executive director so that a budget may be prepared. In June, the proposed budget is
presented to the agency's board of directors for approval. The board holds public hearings and a final
budget must be prepared and adopted no later than June 30.
,.� The adopted budget is prepared by fund and function. The legal level of budgetary control, (i.e., the level at
which expenditures may not legally exceed appropriations)is the fund and function level.
3. Cash and Investments:
The agency's cash and investments reported on the Statement of Net Position and Balance Sheet represent
the agency's share of the city's cash and investment pool. The agency's participation in the cash and
investment pool is involuntary. Interest earnings from this pool are allocated to the agency on a monthly
basis. At June 30, 2015 the agency's share of the city's cash and investment pool totaled $949,001.
Information about the pooled investments is included in the city's annual financial report and may be
,.y obtained by contacting the city's Finance Department at 13125 SW Hall Blvd.,Tigard,OR 97223.
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4. Risk Management:
As a component unit of the city, the agency is exposed to various risks of loss related to torts; theft of,
damage to and destruction of assets; errors and omissions; and natural disasters for which the city carries �..
commercial insurance. The city has established risk management programs for liability insurance coverage.
The agency is covered under policies and programs insuring the city. There were no insurance claims
attributable to the agency as of June 30,2015.
5. Receivables and Payables:
Property taxes are levied and become a lien on July 1. Collection dates are November 15, February 15, and
May 15 following the lien date. Discounts are allowed if the amount due is received by November 15 or
February 15. Taxes unpaid and outstanding on May 16 are considered delinquent.
6. Capital Assets:
Capital assets include land purchases for the Burnham Street reconstruction,which includes wider sidewalks, ~'
landscaped medians,pedestrian crossings, Main Street gateway improvements and a parking lot on Burnham
Street.
Balance Balance
June 30,2014 Additions Deletions Transfers June 30,2015
Land $ 256,046 $ 124,872 $ - $ - $ 380,918
Construction in Progress 264,011 1,583,342 - (1,365,309) 482,044
Infrastructure 444,712 - - 1,365,309 1,810,021
Total cost 964,769 1,708,214 - 2,672,983
Depreciation
Infrastructure (15,019) (6,163) - - (21,182)
Capital assets,net $ 949,750 $ 1,702,051 $ - $ - $ 2,651,801
7. Leased Property `.
In connection with acquiring property and a building in the downtown area during fiscal year 2015, the
agency assumed a lease agreement as the lessor that extends through July 31, 2018. The lease has the option
of two additional extensions of three years each. The property and building are recorded at $1,360,929.
Minimum future rental income under the lease agreement is as follows:
Year ending June 30
2016 $ 86,400
2017 86,400
2018 86,400
2019 7,200
Total minimum payments $ 266,400
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8. Long-term Borrowing:
The agency received an additional amount of$254,000 in the current year under an existing loan agreement
from the City of Tigard for urban renewal projects approved in the Urban Renewal Plan. The interest rate
calculated for the loan is based on the same average rate as that earned on other funds invested by the city,
which is currently 0.50%. Interest-only payments are scheduled to be paid to the city prior to July 1, 2016.
During the fiscal year ending June 30, 2025 the agency will begin making principal payments to the city.
Payments are to be made as tax increment revenue or other funding sources are available. In no case shall
the repayment timeline exceed the life of the agency. Under the intergovernmental agreement, the city may
forgive or reduce the interest and/or principal due from the agency. The agency may also repay the debt
early. In fiscal year 2014-2015 the agency elected to repay$251,617 of outstanding principal.
On September 2, 2014, the City borrowed $1,300,000 at 3.00% from a financial institution to finance a
property purchase within the City Center Urban Renewal Area. On the same date the city and the agency
entered into an Intergovernmental Agreement to Make Financing Payments (IGA). This agreement states
the agency will make the payments on the bank loan to the financial institution. The IGA constitutes
indebtedness of the agency in the amount of the financing or $1,300,000. Per the IGA, the agency is
obligated to make the debt service payments from the tax increment revenues. Pursuant to ORS 287A.310,
the agency pledges the tax increment revenues to pay the financing payments or debt service. On
September 5, 2014, the agency used the proceeds from the bank loan to purchase property located at 9110
SW Burnham Street near downtown Tigard. The Agency has assumed a lease agreement for the property as
,.� the lessor that extends through July 31, 2018 with the option of two additional extensions of three years
each. See Note 7 for further information on the lease. As of June 30,2015, the full amount of the bank loan
was outstanding.
Future principal and interest payments on the bank loan and the city loans are as follows:
Borrowing Transactions Interest
Outstanding Outstanding
Outstanding Loans June 30,2014 Additions Paid June 30,2015 Paid
Loans from City of Tigard
for urban renewal projects:
Loan#4 June 30,2012 163,795 - (163,795) - 983
Loan#5 June 30,2013 200,000 - (62,353) 137,647 1,000
Loan#5 June 30,2013 80,000 - (25,469) 54,531 400
Loan#6 June 30,2014 361,000 - - 361,000 -
Ams Loan#7 June 30,2015 - 254,000 - 254,000 -
Bank loan payable - 1,300,000 - 1,300,000 19,151
Total $ 804,795 $ 1,554,000 $ (251,617) $ 2,107,178 $ 21,534
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8. Long Term Borrowing Cont'd:
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 ..
2016 $ - $ 2,910 $ 130,000 $ 36,799 $ 130,000 $ 39,709
2017 - 4,180 130,000 32,842 130,000 37,022
2018 - 4,180 130,000 28,980 130,000 33,160
2019 - 4,180 130,000 25,118 130,000 29,298
2020 - 4,180 780,000 11,681 780,000 15,861 `,
2021-2025 18,789 20,901 - - 18,789 20,901
2026-2030 373,518 16,823 - - 373,518 16,823
2031-2035 388,897 6,527 - - 388,897 6,527 \''
2036 25,974 130 - - 25,974 130 `..
$ 807,178 $ 64,011 $ 1,300,000 $ 135,420 $ 2,107,178 $ 199,431
9. Subsequent Events: ...
.r
On November 12,2015 the Agency sold three contiguous properties to a private developer in the amount of
$1,650,000 for residential development. The Agency entered into a Development and Disposition `r
Agreement with the private developer for an urban renewal project. `,
On November 24, 2015 the City transferred three property lots in the downtown area to the Agency. These \,...
properties were acquired by the City of Tigard on July 7,2015 for approximately$525,000. Per the Purchase `,
and Sale Agreement between the City and the Agency, the purchase price for these properties is $515,000 \r
(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 was due at closing,and the balance due on June
30,2017. In addition,the city has the right to repurchase the properties any time prior to the Agency paying
the full amount of the purchase price.
`..
Related to these three properties, the city has entered into a consent judgment with the State of Oregon \...
Department of Environmental Quality (DEQ) to perform certain pollution remediation activities only if the
city chooses to begin on-site construction. As of year-end the city did not have an obligation to perform any
pollution remediation with respect to these properties. L,
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Required Supplementary Information
Tigard City Center Development Agency
Urban Renewal Agency Capital Projects Fund
Schedule of Revenues and Expenditures - Budget and Actual
,.\ For the fiscal year ended June 30,2015
Variance with
Budgeted Amounts Actual Final Budget
Original Final Amounts Over (Under)
REVENUES:
Intergovernmental revenue $ 254,000 $ 254,000 $ 25,000 $ (229,000)
Rental income - - 78,157 78,157
Total revenues 254,000 254,000 103,157 (150,843)
EXPENDITURES:
Capital projects 929,000 2,291,000 1,770,924 520,076
'fts Change in fund balance
before other financing sources (675,000) (2,037,000) (1,667,767) 369,233
Other financing sources:
Transfers in 675,000 675,000 516,391 (158,609)
Debt proceeds - 1,330,000 1,554,000 224,000
Total other financing sources 675,000 2,005,000 2,070,391 65,391
Change in fund balance - (32,000) 402,624 434,624
FUND BALANCE BEGINNING
OF YEAR - 32,000 51,870 19,870
FUND BALANCE END
OF YEAR $ - $ - $ 454,494 $ 454,494
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Other Supplementary Information
Tigard City Center Development Agency
Urban Renewal Agency Debt Service Fund
Schedule of Revenues and Expenditures - Budget and Actual
„A For the fiscal year ended June 30,2015
�-A
Variance with
Budgeted Amounts Actual Final Budget
Original Final Amounts Over(Under)
REVENUES:
Property taxes $ 351,139 $ 351,139 $ 350,653 $ (486)
Rental income 84,000 84,000 - (84,000)
Interest earnings 1,000 1,000 1,663 663
Miscellaneous revenues - - 105 105
Total revenues 436,139 436,139 352,421 (83,718)
EXPENDITURES:
*Debt service:
Principal 455,000 455,000 251,617 (203,383)
,.� Interest - - 21,534 21,534
Reserve for future expenditure 95,639 95,639 - (95,639)
Total expenditures 550,639 550,639 273,151 (277,488)
-• Change in fund balance (114,500) (114,500) 79,270 193,770
Other financing sources (uses):
Transfers out (675,000) (675,000) (516,391) 158,609
AN Change in fund balance (789,500) (789,500) (437,121) 352,379
FUND BALANCE BEGINNING
OF YEAR 789,500 789,500 834,558 45,058
ANN
ANN FUND BALANCE END
ANNOF YEAR $ - $ - $ 397,437 $ 397,437
* Budget appropriation for the Urban Renewal Agency is made at the debt service program level.
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Tigard City Center Development Agency
Urban Renewal Agency Debt Service Fund `,
Schedule of Property Tax Transactions and Outstanding Balances
For the fiscal year ended June 30,2015
Property Levy as Interest, Property
Taxes Extended Discounts Taxes
Year of Receivable by and Receivable
Levy June 30,2014 Assessor Adjustments Turnovers June 30,2015
2014-15 $ - $ 360,196 $ (9,790) $ (344,332) $ 6,074
2013-14 6,747 - 96 (3,751) 3,092
2012-13 3,040 - (39) (961) 2,040
2011-12 2,506 - (102) (1,009) 1,395
2010-11 1,827 - (254) (355) 1,218
2009-10 1,041 - 8 (90) 959
2008-09 93 - 14 (47) 60 `.
$ 15,254 $ 360,196 $ (10,067) $ (350,545) $ 14,838
Levy as extended $ 360,196
Discounts (10,067)
Revenue 350,129
Included as interest 524
Recorded as property tax revenue $ 350,653
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1'1
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01\ INDEPENDENT AUDITOR'S REPORT REQUIRED BY OREGON STATE REGULATIONS
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INDEPENDENT AUDITOR'S REPORT
REQUIRED BY OREGON STATE REGULATIONS0 ‘ei
Board Members
11 Tigard City Center Development Agency
(A component unit of the City of Tigard, Oregon)
TK111 Tigard, Oregon
We have audited, in accordance with auditing standards generally accepted in the
United States of America, the financial statements of the governmental activities and
Talbot.Korvola each major fund of the Tigard City Center Development Agency (the Agency), a
&Warwick,L component unit of the City of Tigard, Oregon for the year ended June 30, 2015, and
ienitiedAccountants have issued our report thereon dated February 23, 2016.
Ornsunanis
COMPLIANCE
ACHIEVE MORE
As part of obtaining reasonable assurance about whether the Agency's financial
statements are free of material misstatement, we performed tests of its compliance
480 e
lake Oswego.Oregon 9/035-4293 with certain provisions of laws, regulations, contracts, and grants, including the
provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules
P503.274.7849 162-10-000
through 162-10-320 of the Minimum Standards for Audits of Oregon
r 503.274.1853 g
Municipal Corporations, noncompliance with which could have a direct and material
www.ikw.[om 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.
We performed procedures to the extent we considered necessary to address the
required comments and disclosures which included, but were not limited to the
following:
4 Deposit of public funds with financial institutions (ORS Chapter 295).
• Indebtedness limitations, restrictions and repayment.
• Budgets legally required (ORS Chapter 294).
• Insurance and fidelity bonds in force or required by law.
• Authorized investment of surplus funds (ORS Chapter 294).
• Public contracts and purchasing (ORS Chapters 279A, 279B, 279C).
In connection with our testing, nothing came to our attention that caused us to
believe the Agency was not in substantial compliance with certain provisions of
laws, regulations, contracts, and grants, including the provisions of Oregon
Revised Statutes as specified in Oregon Administrative Rules 162-10-000 through
162-10-320 of the Minimum Standards for Audits of Oregon Municipal
Corporations.
MCGLADREY ALLIANCE ! McGladrey `/
22
The McGladrey Alliance is a premier affiliation of independent account,ng and consulting firms The McGladrey Alliance member firms maintain their name,
autonomy and independence and are responsible for their own client fee arrangements,delivery of services and maintenance of client relationships
INDEPENDENT AUDITOR'S REPORT
REQUIRED BY OREGON STATE REGULATIONS
Page 2
OAR 162-10-0230 INTERNAL CONTROL
In planning and performing our audit of the financial statements, we considered the Agency's
internal control over financial reporting to determine the audit procedures that are appropriate in
the circumstances for the purpose of expressing our opinions on the financial statements, but not
for the purpose of expressing an opinion on the effectiveness of the Agency's internal control.
Accordingly, we do not express an opinion on the effectiveness of the Agency's internal control.
RESTRICTIONS ON USE
This report is intended solely for the information and use of the Board Members, Oregon Secretary
of State Audits Division, and management and is not intended to be and should not be used by
anyone other than these specified parties.
7--ia4rrfr:-014rre4(' 141:4444
Lake Oswego, Oregon
February 23, 2016
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