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HomeMy WebLinkAboutCity of Tualatin - Public Financial ReportPopular Annual Financial Report For the Fiscal Year Ended June 30, 2021 City of Tualatin, Oregon www.tualatinoregon.gov Table of Contents Letter from the Finance Director page 3 City Council page 4 City Council 2030 Vision page 4 Tualatin Demographics page 5 Principal Employers and Taxpayers page 6 Overview of Audited Results page 7 Balance Sheet page 8 Income Statement page 9 Where the Money Comes From page 10 Where the Money Goes page 11 Adopted Budget page 12 General Financial Information page 13 Financial Policies page 14 Staff and Contact Information page 15 Government Finance Officers Association Award for Outstanding Achievement in Popular Annual Financial Reporting Presented to City of Tualatin Oregon For its Annual Financial Report for the Fiscal Year Ended June 30, 2020 Executive Director/CEO Government Finance Officers Association of the United States and Canada (GFOA) has given an Award for Outstanding Achievement in Popular Anual Financial Reporting to City of Tualatin for its Popular Annual Financial Report for the fiscal year ended June 30, 2020. The Award for Oustanding Achievement in Popular Annual Financial Reporting is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government popular reports. In order to receive an Award for Outstanding Achievement in Popular Annual Financial Reporting, a government unit must pub- lish a Popular Annual Financial Report, whose contents conform to program standards of creativity, presentation, understandabili- ty, and reader appeal. An Award for Outstanding Achievement in Popular Annual Financial Reporting is valid for a period of one year only. City of Tualatin has received a Popular Award for the last three consecutive years. Finance Departmentwww.tualatin.gov/finance 503-691-3054 2 Dear Residents and Businesses of Tualatin, I am pleased to present the City’s Popular Annual Fi n a n c i a l R e p o r t f o r t h e f i s c a l y e a r e n d e d J u n e 3 0 , 2 0 2 1 . T h e goal of the Popular Annual Financial Report is to p r o v i d e a n e a s y -to-read version of our Annual Comprehensive Financial Report which is our complete set of financial statements produced in accor d a n c e w i t h g e n e r a l l y accepted accounting principles (GAAP) and audited b y a f i r m o f l i c e n s e d c e r t i f i e d p u b l i c a c c o u n t a n t s e v e r y year. The City of Tualatin has established comprehensiv e i n t e r n a l c o n t r o l s t hat are designed to protect the City’s assets from loss, theft, or misuse, and to compile s u f f i c i e n t r e l i a b l e i n f o r m a t i o n f o r t h e p r e p a r a t i o n o f t h e C i t y of Tualatin’s financial statements. Merina+Co, a firm o f l i c e n s e d c e r t i f i e d p u b l i c a c c o u n t a n t s , h a s a u dited the City of Tualatin’s financial statements and conclude d , b a s e d u p o n t h e a u d i t , t h a t t h e C i t y ’ s f i n a n c i a l s t a t e m e n t s for the fiscal year ended June 30, 2021, are fairly p r e s e n t e d i n c o n f o r m i t y w i t h G A A P . Although the COVID-19 pandemic has continued to create unprecedented challenges, the City’s fin a n c i a l condition continues to remain strong. The Tualatin M o v i n g F o r w a r d p r o g r a m , f u n d e d t h r o u g h a t r a n s p o r t a t i o n bond issue, continues completing several transpor t a t i o n s a f e t y p r o j e c t s a n d b e g i n n i n g w o r k on others. City staff has continued to provide quality services, us i n g a h y b r i d w o r k i n g m o d e l . N o t o n l y d i d t h e C i t y o p e n t h e new Tualatin City Services building combining all d e v e l o p m e n t a n d u t i l i t y o p e r a t i o n s i n o n e l o c a t i o n , t h e r e b y creating a one-stop shop for the development community, we were also a b l e t o m a k e m o d i f i c a t i o n s t o t h e C i t y Offices Building. This allowed us to consolidate func t i o n s t h a t w e r e s p r e a d o u t o v e r t h r e e b u i l d i n g s i n t o o n e , again providing efficiencies in our operations. Even m o r e exciting, we took advantage of the Library closu r e , and then limited capacity, to construct a makersp a c e c l a s s r o o m , p r o v i d i n g h a n d s -on learning in the areas of science, technology, engineering, arts and math e m a t i c s ( S T E A M ) . T h e p r o j e c t w a s c o m p l e t e d i n t he early part of fiscal year 2021-2022 and has already become a popular feature to th e T u a l a t i n P u b l i c L i b r a r y . The City has received the Certificate of Achievem e n t f o r E x c e l l e n c e i n F i n a n c i a l R e p o r t i n g f r o m t h e Government Finance Officers Association (GFOA) for the last 29 years. The Certificate of Achie v e m e n t f o r Excellence in Financial Reporting Program was estab l i s h e d i n 1 9 4 5 t o e n c o u r a g e a n d a s s i s t s t a t e a n d l o c a l governments to go beyond the minimum requirem e n t s o f g e n e r a l l y a c c e p t e d a c c o u n t i n g p r i n ciples in preparing annual comprehensive financial reports t h a t e v i d e n c e t h e s p i r i t o f t r a n s p a r e n c y a n d f u l l d i s c l o s u r e . We have received the Award for Outstanding Achievem e n t i n P o p u l a r A n n u a l F i n a n c i a l R e p o r t i n g f o r t h e l a s t two years. This year our goal is to submit the Popular Annual Financial Repor t , t h e A n n u a l C o m p r e h e n s i v e F i n a n c i a l Report, as well as the City’s Adopted Budget, to G F O A t o p a r t i c i p a t e i n t h e i r a w a r d p r o g r a m s . For a complete copy of our Annual Comprehensive F i n a n c i a l R e p o r t , a s w e l l as the City’s FY 2021/2022 Budget, please visit our website at www.tualatinoregon.gov/finance. If you have any questions about any of these documents, please contact our Finance Department a t 5 0 3 -691-3054. Sincerely, Don Hudson Assistant City Manager/Finance Director Letter from the Finance Director 3 Don Hudson is the Assistant City Manager/Finance Director of the City of Tualatin. He has served as the Finance Director since 2008 and was promoted to Assistant City Manager in 2019. Previously, he served as the Finance Director for the City of Stayton, OR. He is a member of GFOA, is Past President of the Oregon Government Finance Officers Association and Chair of the Finance and Taxation Commit- tee for the League of Oregon Cities. City of Tualatin | City Council Members FEBRUARY 2021 4 Position #1 Maria Reyes Mayor Frank Bubenik Position #2 Christen Sacco Position #3 Bridget Brooks Position #4 Cyndy Hillier Council President Nancy Grimes Position #6 Valerie Pratt About TualatinTualatin’s Profile & Demographics Information Information2 Incorporated 1913 Population 27,338 City Property Tax Rate 2.2665 Bond Rating (Moody's)Aa1 Registered voters ‐ total 18,044   ‐ Clackamas County 2,200   ‐ Washington County 15,844 # of business licenses 1,664 Total employees in Tualatin 158 # of Library items checked out 321,693 Elevation 125 feet Parks 10 Greenway trails/natural areas 322 acres Miles of streets 81 miles # of volunteers hours in 2020 8,400 by attracting businesses from Portland and throughout the Willamette Valley. The com- munity’s accommodations were simple: a blacksmith shop, boarding house, general store, and saloon. In 1886, the Portland & Willamette Railway Company purchased a right-of-way through John Sweek’s land on the Tualatin River’s west bank opposite Bridgeport. Profiting from the sale, Sweek took advantage of the railroad’s location and plotted a town around the depot - he called the new town Tualatin. Organization Chart CITIZEN ADVISORY COMMITTEES: •Architectural Review Board (ARB)•ArtsAdvisory Committee (TAAC) •Budget Committee•Core Area ParkingDistrictBoard(CAPDB)•LibraryAdvisory Committee (TLAC) •Park Advisory Committee(TPARK)•PlanningCommission(TPC) •TualatinTomorrowAdvisoryCommittee(TTAC) Mayor and Council Municipal Court Judge City Manager Citizen Advisory Committees* Community Finance Legal Information & MaintenanceServices Human Resources Library Public Works Parks & Recreation Community Development Police Tualatin was incorporated in 1913. It is locat- ed in two counties. SW 65th Avenue, adjacent to Meridian Park Hospital, is the dividing line - with Clackamas County to the east and Wash- ington County to the west. Tualatin began as a small village called Gal- breath at a ferry crossing on the Tualatin River. Samuel Galbreath began the ferry service in 1853. In 1856, Galbreath built the first bridge across the Tualatin River, and the town’s name was changed to “Bridgeport.” Located along one of the first “improved” roads, Boones Ferry Road, Bridgeport thrived 5 CITY OF TUALATIN PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO June 30, 2021 % of % ofTotal City Total City 1 Assessed Taxable Assessed Taxable Taxpayer Value Rank Assessed Value Value Rank Assessed ValueLam Research Corporation2 243,263,385$ 1 5.14%86,924,360 2 2.63%Portland General Electric 161,146,000 2 3.41%- 0.00% BV Centercal LLC 139,944,375 3 2.96%96,519,514 1 2.92%Campbell Soup Supply Company, LLC3 65,955,950 4 1.39%34,776,630 4 1.05%Pacific Realty Associates 55,320,670 5 1.17%- 0.00% JAE Oregon, Inc 52,758,180 6 1.12%26,128,580 5 0.79%Tuala Northeast LLC 53,227,820 7 1.13%38,481,817 3 1.17%Mohawk St Property LLC 43,543,758 8 0.92%- 0.00% CR Rivercrest Meadows Communities LLC 34,150,210 9 0.72%24,670,930 6 0.75%KW Hedges Creek LLC 34,113,880 10 0.72%24,644,680 7 0.75%Zian Limited Partnership - - - 24,419,570 8 0.74% Legacy Health Systems - - - 23,700,313 9 0.72%Fujimi Corporation - - - 23,282,220 10 0.71% 883,424,228$ 18.68% 403,548,614$12.23% 1 Source: Washington and Clackamas County Assessor's records 2 Lam Research Corporation previously operated as Novellus Systems Inc.3 Campbell Soup Supply Company, LLC previously reported as Pacific Foods of Oregon, Inc.4 Measure 50 rolled back the assessed value of each unit of property for the tax year 1977-98 to its 1995-96 "real marketvalue", less 10%. Measure 50 limits any increase in assessed value, excluding major improvements, to 3% per year for the tax years after 1997-98. 2021 2012 CITY OF TUALATIN PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO June 30, 2021 Percentage Percentageof Total City of Total CityEmployerEmployeesRankEmploymentEmployeesRankEmployment Lam Research Corporation 2,486 1 8.40%650 2 3.22%Legacy Meridian Park Hospital 990 2 3.34%905 1 4.49%Bay Club Oregon 580 3 1.96%---Nortek Air Solutions 522 4 1.76%---Pacific Foods of Oregon 510 5 1.72%280 7 1.39%Amazon.com Services LLC 494 6 1.67%---Portland General Electric 478 7 1.61%---Metro West Ambulance 430 8 1.45%---Pacific Furniture Industries 375 9 1.27%---Creganna Medical 350 10 1.18%---United Parcel Services ---512 3 2.54%Huntair ---460 4 2.28%Columbia Corrugated ---300 5 1.49%DPI Northwest ---300 5 1.49%Milgard Windows ---275 8 1.36%Fred Meyer ---228 9 1.13%Prologix Distribution Services ---212 10 1.05% 7,215 4,122 Total City employment 29,610 Information derived from Business License data provided to the City of Tualatin. 2021 2012 6 The following summary highlights are taken directly from the Management Discussion and Analysis section of the fiscal year 2021 Annual Comprehensive Financial Report. • The City’s assets and deferred outflows of resources totaled approximately $237.4 million at June 30, 2021, and consisted of approximately $77.0 million in cash and investments, $147.6 million in capital assets and approximately $12.8 million in other assets and de-ferred outflows of resources. Total assets and deferred outflows of resources increased by $5.2 million from the previous fiscal year. • The City’s liabilities and deferred inflows of resources totaled $63.4 million at June 30, 2021, consisting of approximately $55.6 million in long-term obligations, $4.9 million in accounts payable and other liabilities, and $2.9 million in deferred inflows related to pen- sions and other post-employment benefit obligations. • The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources by $174.0 million at the close of fiscal year 2021. Unrestricted net position totaled $18.8 million, with the remainder of the City’s net position reported as net investment in capital assets ($134.1 million) and restricted for building and engineering, street and road- side maintenance, debt service, capital projects, trans- portation, urban renewal, and capital improvements ($21.0 million). • For its governmental activities, the City generated $4.8 million in charges for services and received $1.8 mil- lion in operating and capital grants and contributions. Direct expenses, including interest on long-term debt for governmental activities were $34.6 million for the year, resulting in a net expense of $28.0 million. $23.6 million of general revenues received and $3.2 million of transfers in resulted in an decrease in net position of $1.2 million. • For its business-type activities, the City generated $20.2 million in charges for services and capital grants and contributions to fund direct expenses of $16.3 million. Overview of Audited Results 7 Statement of Net Position - Balance Sheet For greater detail, see the City’s complete Annual Comprehensive Financial Report on our website at www.tualatinoregon.gov/finance. As of June 30, 2021 As of June 30, 2020 As of June 30, 2019 Assets Current and other assets 80,117,785$ 81,215,513$ 78,944,164$ Capital assets 147,553,057 141,647,510 142,712,187 Total assets 227,670,842 222,863,023 221,656,351 Deferred Outflows of Resources 9,726,045 9,370,822 7,864,386 Liabilities Current Liabilities 4,918,489 4,158,082 7,148,030 Long-term liabilities 55,589,407 52,006,908 48,225,443 Total liabilities 60,507,896 56,164,990 55,373,473 Deferred Inflows of Resources 2,923,047 1,786,445 2,243,416 Net Position 173,965,944$ 174,282,410$ 171,903,848$ This Statement of Net Position reflects a healthy financial condition as of June 30, 2021. This balance sheet is presented as a high-level summary of net position. 8 For greater detail, see the City’s complete Annual Comprehensive Financial Report on our website at www.tualatinoregon.gov/finance. This statement presents high-level summary information about how the City’s net position changed during fiscal year 2021 as a result of all financial activity (i.e. revenues and expenses). FY 2021 FY 2020 FY 2019 Revenues 50,581,315$ 53,256,412$ 50,321,328$ Expenses (50,897,781) (50,877,850) (48,173,623) Increase (Decrease) in net position (316,466) 2,378,562 2,147,705 Net position, beginning of year 174,282,410 171,903,848 169,756,143 Net position, end of year 173,965,944$ 174,282,410$ 171,903,848$ Statement of Activities/Income Statement 9 Property Taxes, 46% Franchise Taxes, 9% Public service taxes & revenue sharing, 22% Other Revenue, 2% Charges for Services, 16% Operating Grants, 4%Capital Grants & Contributions, <1% Revenues by Source -Governmental Activities The City utilizes 20 funds to account for its financial activities. These funds are grouped into two sep- arate categories: governmental activities and business-type activities. Governmental activities are the basic services provided by the City and include services such as public safety, public works, parks and recreation, library, and general administration. Property taxes and franchise fees fund the majority of these services. Business-type activities are its water, sewer and stormwater services, which the City charges fees to customers to cover the costs of providing these services. Major revenue types include property taxes, franchise fees which are charged to utilities for the use of public right-of-way, fees and charges for services, licenses and fees, and intergovernmental revenue in the form of grants and shared revenues. Annual property taxes are based upon the assessed value, as opposed to the market value, of your property. The average Tualatin resident pays $17.56 per $1,000 of assessed value. Therefore, a homeowner with an assessed value of $200,000 pays property tax of $3,512 annually. Of this amount, the City of Tualatin receives approximately 13%, or $456. Where the Money Comes From Capital Grants & Contributions, <1% Charges for Services, 97% Interest and Other Revenue, 1% Revenues by Source -Business-type Activities TAX COMPARISONS City Tax Rate Lake Oswego $4.9703 Beaverton $4.1466 Sherwood $3.2975 Wilsonville $2.5206 Tigard $2.5131Tualatin $2.2665 West Linn $2.1200 10 City of Tualatin13% County17% School District34% Other Education3%Fire 11% Other Special Districts3% Bonds 19% Where the Money Goes $- $2 $4 $6 $8 $10 $12 General Government Public Safety Highways and Streets Culture and Recreation Interest on long-term debt Expenses and Program Revenues -Governmental Activities (in millions) Revenues Expenses $- $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 Water Sewer Stormwater Expenses and Program Revenues -Business-type Activities (in millions) Revenues Expenses Expenses and Program Revenues incurred by the Library, Parks and Recreation and maintenance of the City’s parks and open space. Interest on long-term debt - This category includes interest payments on general obligation debt financed by property taxes, and other Full Faith and Credit obligations. The City’s favorable Aa1 bond rating helps obtain low-er interest rates on long-term debt obligations, therefore lowering debt costs and the general obligation bond levy amount paid by the City’s taxpayers. Business-type Activities – This category includes expenditures incurred for water, sewer and stormwater operations and development. General Government - This category includes expenses incurred by the City Council, City Manager, Community Development, Finance, Human Resources, Legal, Information Services, and Maintenance Services. Public Safety - This category includes expenses incurred by the Building Department, Municipal Court and the Police De- partment. Highways and Streets - This category includes expenses incurred by Engineering, Road Operating and Utility Fee Funds, as well as the Transportation Development Tax.Culture and Recreation - This category includes expenses Major Expenditure Areas 11 FY 2019 FY 2020 FY 2021 FY 2022 City Budget Personal Services 18,834,591$ 22,343,157$ 21,205,420$ 22,042,160$ Materials & Services 18,309,930 19,445,059$ 22,838,225$ 25,000,865$ Transfers 7,635,116 10,703,050$ 7,587,815$ 7,646,520$ Capital Outlay 6,061,690 5,597,135$ 21,171,484$ 13,356,730$ Other Financing Uses 165,063 Debt Service 7,506,400 3,776,049$ 3,908,220$ 3,975,175$ Contingencies & Reserves 70,627,357 72,159,442$ 59,480,710$ 63,184,200$ Total City Budget 129,140,147$ 134,023,892$ 136,191,874$ 135,205,650$ The Tualatin Budget Advisory Committee unanimously approved the budget which was then adopted by the City Council on June 28, 2021. Oregon Budget Law sets specific steps that must be followed during this process. The City’s budget is the financial plan that contains estimates of revenues and expenses for the budgeted period. An adopted budget gives the City its authority to spend public money. Budget Preparation (Dec -Jan) -Budget Calendar developed -Budget Instructions delivered -Forecasts Updated -Assumptions Developed Budget Requests (Jan-March) -Departments Prepare and Submit Budgets Proposed Budget (Mar-Apr) -Department Budget Meetings with Executive Management Approved Budget (May) -Submitted to Budget Committee -Budget Committee Deliberations -Budget Committee Approves Budget Adopted Budget (May-June) -Final Budget Changes -Budget hearing -Approved Budget Adopted by City Council The Budget Process To the right is a graph of the Budget Process in Tualatin. The complete budget process is presented in our full budget document. To view the entire budget, please visit our website at www.tualatinoregon.gov/finance. A copy of the budget is also available at the Tualatin Public Library. 12 Adopted budget GENERAL FINANCIAL INFORMATION Most City services and projects are accounted for in a set of accounts known as governmental funds. The following are the funds (and descriptions) currently in use by the City: • General Fund - Accounts for revenues and ex- penditures associated with the general operations of the City that are not required to be accounted for in separate funds. • Building Fund - The Building Fund accounts for revenues from various fees collected from devel- opment for construction of buildings and expended for servings rendered primarily in the City’s Build-ing Division. • Transportation Project Fund - Accounts for the proceeds of the city’s Transportation Bond to finance transportation projects throughout the City. • Enterprise Funds - These funds are used to account for operations that are financed and operated in a manner similarly to private business enterprises. The intent of the government body is that the costs of providing the services to the general public on a continuing basis be financed primarily through user charges. The funds represent three segments of operations - Water, Sewer, and Stormwater. • Special Revenue Funds - Accounts for pro- ceeds of specific revenue sources that are re-stricted or committed to expenditure of specific purposes other than payment of debt or funding of capital projects. Special Revenue funds don’t include resources held in trust for individuals, private organizations, or other governments. • Debt Service Funds - Accounts for the accu- mulation of funds that are restricted, commit- ted, or assigned to expenditure for principal and interest on debt. 8 13 Financial Policies Below is a summary of goals of the City’s Financial Policies. For the entire copy of our Financial Policies, please visit our website at www.tualatinoregon.gov/finance Purpose Financial policies are vital to a strategic, long-term approach to financial management, and to achieve and maintain a stable and positive financial position while ensuring financial in-tegrity of City operations. They are used as a guideline for operational decision making and maintaining a fiscally prudent budget while carrying out the needs and wants of the City of Tualatin and its citizens. These policies es- tablish parameters in which we operate while providing a standard against which our fiscal performance can be judged. Operating Budget The City shall prepare, present, adopt and amend its operating budget in accordance with Oregon Local Budget Law before send-ing the approved budget to the City Council for adoption. Revenue Policies The goal of the Revenue Policy is to create and maintain a diversified and stable revenue system to mitigate the impact of short-term fluctuations in any revenue source and pro-vide a stable revenue stream to support City services. Expenditure Policies The City shall prioritize services, establish appropriate service levels, and manage the expenditure of available resources while en-suring fiscal stability and providing necessary services. Capital Improvement Plan Policies The goal of this policy is to provide guidelines for annually reviewing and monitoring the City’s Capital Improvement Plan, and monitor-ing the state of the City’s capital equipment and infrastructure, and setting priorities for its replacement and renovation based on needs, funding alternatives, and availability of re- sources. Investment Policies Invest the City’s operating cash to ensure its legality and safety, provide for necessary liquidity, avoid imprudent risk, and optimize yield, while meeting the requirements of ORS 294.035. Contingency and Reserve Policies To ensure that the City maintain a prudent lev- el of financial resources to protect against the need to reduce service levels due to tempo-rary revenue shortfalls or unpredicted one- time expenditures. Capital Asset Management Policies This policy addresses capital asset planning, acquisition, funding and management in order to ensure fiscally responsible stewardship. Accounting, Auditing & Financial Report-ing Policies The City shall comply with federal, state, and lo- cal statues and regulations and conform to gen-erally accepted accounting practices (GAAP)as promulgated by the Governmental Accounting Standards Board (GASB), The American Institute of Certified Public Accountants (AICPA), and the Government Finance Officers Association (GFOA). Debt Policy This policy establishes guidelines for debt financing that will provide needed capital equip-ment and infrastructure improvements while minimizing the impact of debt payments on current revenues. 14 The financial statements of the City, are intend- ed to provide its citizens, investors, creditors, and customers with a general overview of the finances of the City. The financial statements also demonstrate the City’s accountability for the resources it receives and expends. The information in this report is taken from the audited Annual Comprehensive Financial Report for the year ended June 30, 2021. Financial data in this report are consistent with Generally Accepted Accounting Principles (GAAP). For further detail of the information provided in this report, the Annual Comprehensive Financial Report and the 2021-2022 Budget document can be viewed online at www.tualatinoregon.gov/finance Assistant City Manager/ Finance Director Don Hudson dhudson@tualatin.gov503-691-3050 Audit Conducted by Merina+Co www.merinacpas.com503-723-0300 Annual Financial Report Prepared by: Matt Warner Assistant Finance Directormwarner@tualatin.gov 503-691-3052 PAFR Prepared by: Lisa ThorpeManagement Analyst II lthorpe@tualatin.gov 503-691-3054 City of Tualatin 18880 SW Martinazzi Avenue Tualatin, OR 97062 503-692-2000 15 CITY STAFF Sherilyn Lombos, City Manager Bill Steele, Police Chief Rachel Sykes, Public Works Director Kim McMillan, Community Development Director Ross Hoover, Parks & Recreation Director Jerianne Thompson, Library Director Sean Brady, City Attorney Don Hudson, Assistant City Manager/Finance Director Stacy Ruthrauff, Human Resources Director Bates Russell, Information & Maintenance Services Director Megan George, Deputy City Manager