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2013City Of Bangor, Maine Comprehensive Annual Financial Report For Fiscal Year June 30, 2013 CITY OF BANGOR, MAINE Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2013 Prepared by: Debbie Cyr, Finance Director David Little, Tax Collector/Deputy Treasurer CITY OF BANGOR, MAINE Comprehensive Annual Financial Report Table of Contents For the Fiscal Year Ended June 30, 2013 INTRODUCTORY SECTION Page Letter of Transmittal I - 1 GFOA Certificate of Achievement I - 7 Organizational Chart I - 8 Elected Officials and Principal Administrative Officers I - 9 FINANCIAL SECTION Report of Independent Auditors II - 1 Management’s Discussion and Analysis II - 4 Basic Financial Statements: Exhibit Government-wide Financial Statements: Statement of Net Position 1 II - 18 Statement of Activities 2 II - 19 Fund Financial Statements: Balance Sheet - Governmental Funds 3 II - 20 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 4 II - 21 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 5 II - 22 Statement of Revenues, Expenditures and Changes in Unassigned Fund Balance - Budget and Actual - General Fund 6 II - 23 Statement of Net Position – Proprietary Funds 7 II - 24 Statement of Revenues, Expenses and Changes in Net Position – Proprietary Funds 8 II - 26 Statement of Cash Flows – Proprietary Funds 9 II - 27 Statement of Fiduciary Net Position – Fiduciary Funds 10 II - 29 Notes to the Financial Statements II - 30 Required Supplemental Information II - 56 CITY OF BANGOR, MAINE Table of Contents, Continued Schedule Page Combining and Individual Fund Statements and Schedules: Balance Sheet – General Fund A – 1 II - 57 Schedule of Revenues, Expenditures and Changes in Unassigned Fund Balance – Budget and Actual – Budgetary Basis – General Fund A – 2 II - 58 Combining Balance Sheet – Nonmajor Governmental Funds B – 1 II - 62 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Governmental Funds B – 2 II - 63 Combining Balance Sheet – Nonmajor Special Revenue Funds B – 3 II - 64 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Special Revenue Funds B – 4 II - 65 Combining Balance Sheet – Nonmajor Permanent Funds B – 5 II - 66 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Permanent Funds B – 6 II - 67 Combining Statement of Net Position – Nonmajor Proprietary Funds C – 1 II - 68 Combining Statement of Revenues, Expenses and Changes in Net Position – Nonmajor Proprietary Funds C – 2 II - 70 Combining Statement of Cash Flows - Nonmajor Proprietary Funds C – 3 II - 71 Schedules of Revenues, Expenditures and Encumbrances – Budget and Actual Budgetary Basis: Sewer Utility Enterprise Fund C – 4 II - 73 Airport Enterprise Fund C – 5 II - 74 Park Woods Enterprise Fund C – 6 II - 75 Parking Enterprise Fund C – 7 II - 76 Bass Park Enterprise Fund C – 8 II - 77 Municipal Golf Course Enterprise Fund C – 9 II - 78 Economic Development Enterprise Fund C – 10 II - 79 Fiduciary Funds: Statement of Change in Assets and Liabilities – Agency Fund D – 1 II - 80 Capital Assets Used in the Operation of Governmental Funds: Schedule of Changes by Function and Activity E – 1 II - 81 Other Information: Assessed Valuation, Commitment and Collections F – 1 II - 82 Unassigned Fund Balance Sufficiency Calculation F – 2 II - 83 CITY OF BANGOR, MAINE Table of Contents, Continued STATISTICAL SECTION Table Page Financial Trends: Net Position by Component 1 III – 1 Changes in Net Position 2 III – 2 Governmental Activities Tax Revenues by Source 3 III – 5 Fund Balances of Governmental Funds 4 III – 6 Changes in Funds Balances of Governmental Funds 5 III – 7 Revenue Capacity: Assessed Value and Estimated Actual Value of Taxable Property 6 III – 8 Property Tax Rate – Direct and Overlapping Governments 7 III – 9 Principal Property Taxpayers 8 III – 10 Property Tax Levies and Collections 9 III – 11 Debt Capacity: Ratios of Outstanding Debt by Type 10 III – 12 Ratio of Net General Obligation Debt to Assessed Value and Net Obligation Debt Per Capita 11 III – 13 Computation of Direct and Overlapping Debt 12 III – 14 Legal Debt Margin Information 13 III – 15 Demographic and Economic Information: Demographic and Economic Statistics 14 III – 16 Principal Employers 15 III – 17 Operating Information: Full-time Equivalent City Government Employees by Function 16 III – 18 Operating Indicators by Function 17 III – 19 Capital Asset Statistics by Function 18 III – 20 INTRODUCTORY SECTION FINANCE DEPARTMENT Deborah A. Cyr, Finance Director (207)992-4260 fax (207)945-4446 debbie.cyr@bangormaine.gov 73 Harlow Street • Bangor, Maine 04401 December 20, 2013 To the Honorable Chair, Members of the Bangor City Council, and Citizens of Bangor In accordance with the requirements of both our City Charter and state statutes, the City of Bangor’s comprehensive annual financial report for the fiscal year ended June 30, 2013 is hereby submitted. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the City of Bangor. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner that presents fairly the financial position and results of operations of the City of Bangor on a government wide and fund basis. The City is responsible for establishing and maintaining an internal control framework designed to ensure that the assets of the City are protected from loss, theft, and misuse and that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles (GAAP). The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that the costs of control should not exceed the benefits likely to be derived and that the valuation of costs and benefits requires estimates and judgments by management. The City’s financial statements have been audited by Runyon Kersteen Ouellette. The goal of the independent audit is to provide reasonable assurance that the financial statements are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor’s unmodified opinion is presented as the first component of the financial section of this report. I - 1 The City is required to undergo an annual single audit in conformity with the provisions of the Single Audit Act of 1984 and the U.S. Office of Management and Budget’s Circular A-133, Audits of States, Local Government and Non-Profit Organizations. Information related to this single audit, including a schedule of expenditures of federal awards, findings, questioned costs, recommendations, and the independent auditor’s reports on the internal control structure and compliance with applicable laws and regulations, are included in a separately issued single audit report. Governmental Accounting Standards Board (GASB) requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The City’s MD&A can be found immediately following the independent auditor’s report. Profile of the Government The City of Bangor is situated in eastern Maine, is the Penobscot County seat, and is the third most populous city in Maine. The City occupies approximately 35 square miles on the western shore of the Penobscot River. Bangor was first settled in 1656, incorporated as a town on February 25, 1791 and as a city on February 12, 1834. Bangor is the major trade, distribution, service, and commercial center for the central, eastern, and northern portions of the State. The City operates under a Charter adopted in 1931 that provides for a Council- Manager form of government. The City Council is composed of nine members who are elected at large for three-year staggered terms. The Charter grants to the Council all powers to enact, amend, or repeal rules, ordinances, and resolutions relating to the City’s property, affairs, and government; to preserve the public peace, health, and safety; to establish personnel policies; to give effect to any vote of the City; and to authorize the issuance of debt. The Council adopts an annual budget and provides for an annual audit. The City Manager is the chief administrative officer of the City and is appointed by the Council, as are the Assessor, Solicitor, and Clerk. The City’s schools are governed by a seven-member School Committee. Its members are elected at large to staggered three-year terms. By Charter, the School Committee has all the powers and performs all the duties related to the care and management of the public schools of the City. The Committee annually furnishes to the City Council an estimate of sums required for school purposes for the ensuing municipal year. The City Council makes a single gross appropriation for this purpose, which must be ratified by the voters of Bangor at a referendum held in June prior to the start of the City’s fiscal year. Once approved, the expenditure of I - 2 this appropriation is under the direction and control of the School Committee. The School Committee employs the Superintendent of Schools as its chief operating officer. The City provides a full range of municipal services including police and fire, highways and sanitation, health and welfare, parks and recreation, education, public transportation, planning, business and economic development, code enforcement, and general administrative services. Bangor International Airport, sanitary sewer services, the Bass Park Complex (Cross Insurance Center), parking, golf course, economic development, and a transitional housing complex are accounted for in the City’s enterprise funds. The City’s budgeting process is structured around its fiscal year, which begins on July 1st and ends on the following June 30th. The City annually adopts budgets for its general fund and seven enterprise funds. The City Charter requires that the City Manager submit a recommended budget to the Council by the second Monday in April. The budget, which must be in balance, contains estimates of all non-tax revenues and receipts expected to be received during the next fiscal year, the expenditures necessary to support City operations, debt service requirements, and the tax levy required to achieve balance between revenues and expenditures. The Council may modify recommended expenditures and the recommended tax levy. If the Council fails to adopt a budget by July 1st, the City Manager’s proposed budget automatically becomes that fiscal year’s budget. In either case, an appropriate property tax levy is established and filed with the City Assessor, who then sets the necessary property tax rate. The annual budget serves as the foundation for the City’s financial planning and control and is prepared by fund, function, and department. The City Manager may transfer resources within a department; however, transfers between departments require Council action. Special revenue funds do not have adopted budgets but have program budgets. Budgetary controls are maintained on other governmental funds through formal authorizations by the City Council and through grant agreements. All budgets are legally adopted by the City Council through the passage of appropriation resolves. I - 3 Factors Affecting Financial Condition Local economy. The City is the economic, educational, recreational, distribution, and health care center for the central, eastern, and northern Maine regions. Bangor also serves as northern New England's economic link to the Canadian Maritimes and Eastern Quebec. The City is a major center for the communications, banking, commercial, industrial, healthcare, and governmental sectors of the State. Bangor has a stable and varied economic base. Major employers include a diversified mix of health care, educational, professional, retail, manufacturing, and governmental entities. Bangor’s 2013 unemployment rate of 6.7% continues to be on par with or below both county and state rates of 7.6% and 6.8%, respectively. Bangor is the second largest retail market in Maine after Portland. The Bangor Mall, Airport Mall, Broadway commercial center, Union Street commercial corridor, and the Bangor Center Development District (downtown) have long established Bangor as the hub of the six-county eastern Maine retail market. Bangor's retail sector serves an extensive geographic area ranging from eastern Maine to the Canadian Maritimes, with a population exceeding 3.1 million. With less than three percent of the State’s population, Bangor’s share of the State’s retail sales is proportionally higher. In 2012, Bangor’s retail taxable sales were $1.2 billion, or 6.89% of total State retail sales and 57.2% of total County sales. Further evidence of continuing sustained growth is the change in the City’s assessed value of real and personal property. The annual increase in assessed value is a combination of three factors: 1) market adjustments to existing property, 2) new construction/additions, and 3) personal property depreciation. Over the four years, assessed value has remained relatively flat, however over the last ten years, the average annual increase in assessed value is 4.56%. Tax base growth, the City’s focus on controlling budgetary growth, and ramped up state funding for education resulted in a 15.85% reduction in the City’s tax rate from 2004 to 2013. The City is committed to preserving its viable economic base while creating new opportunities for future economic growth. To achieve these objectives, the City is proactive in supporting economic activity through planned capital improvements, innovative financing, and aggressive marketing. I - 4 Long-term financial planning and major initiatives. The City’s capital improvement plan is an integral part of the annual budget process. A complete list of near term improvements is submitted as part of the City Manager’s budget submission for all City functions. The plan includes projects anticipated within the coming one to two year period with an indication of how the City anticipates funding the improvements. Certain improvements are longer term in nature and are updated and reviewed via the City Council’s Committee structure on an as needed basis. Under a development agreement with Bangor Historic Track, a wholly owned subsidiary of Penn National Gaming, the City receives a percentage of gross slot and table game revenues as well as land lease payments and property taxes on the Bangor gaming facility. In October 2005, the City established a special revenue fund to account for its share of gross slot and table game revenues to be used primarily to finance the cost to replace our auditorium and civic center. In August 2011, the City broke ground to replace the aging facility with a right sized state of the art Arena and meeting complex. In July 2013, the facility was officially named the Cross Insurance Center. Construction of the $68.7 million facility was completed in the summer of 2013 and its grand opening was held in September 2013. The City has identified the need to enhance quality of life and housing opportunities within a targeted west side neighborhood. Beginning in FY 2013, the City held a variety of stakeholder and neighborhood meetings, all of which were well attended and received, to develop a plan that can be implemented in the coming years. In addition, a consultant was engaged to develop a wide range plan of action to follow. This plan was recently reviewed with the City Council and the City, on its own, and in conjunction with private developers, is beginning to implement the recommendations. Progress continues in the redevelopment of almost a mile of prime Penobscot River frontage extending from the City's downtown area to the Bass Park Complex. A majority of the required infrastructure has been installed, for which the City has been successful in obtaining partial funding from both State and Federal agencies. This investment has resulted in the development of a significant regional entertainment and recreational area. Over the years, the City has invested significant resources and effort to improve our local environment and protect our natural resources. Over the past year, the major emphasis has been on storm water management issues. Storm water quality requirements and related regulations affect various water bodies within our corporate limits and a number of watershed management plans are in various stages of development and implementation throughout the City. The City has taken a proactive approach to addressing storm water issues and has begun the process I - 5 to implement a storm water utility in order to fund the costs associated with storm water management. Relevant Financial Policies. City policy prescribes uses for unassigned fund balances. In general, unassigned fund balance is not to be used to fund any portion of the on-going and routine year to year operating expenditures of the City. It is to be used primarily to ensure adequate fund balances, to respond to unforeseen emergencies, and to provide overall financial stability. By Charter, the City is to maintain an unassigned fund balance of no more than 16.66% and no less than 8.33% of prior year expenditures, and the Council has determined that a reasonable target is 8.33%. Unassigned fund balance in the general fund as of June 30, 2013 was 8.90% of expenditures, net of debt service. Awards and Acknowledgements. The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Bangor for its comprehensive annual financial report for the fiscal year ended June 30, 2012 for the seventeenth consecutive year. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program’s requirements, and we are submitting it to the GFOA for consideration for another certificate. The preparation of this document would not have been possible without the hard work of all of the City’s employees. Each one contributes on a daily basis, simply by carrying out the responsibilities of their positions. Our sincerest thanks are once again extended to our citizens and the Bangor City Council for their continued support for our efforts to further develop the City’s financial management and reporting capabilities. We are confident that we have once again met their expectations. Respectfully submitted, Debbie Cyr Finance Director I - 6 CITY MANAGER CITIZENSOFBANGOR CITIZENCOMMISSIONS CITIZENBOARDS CITYCLERK CITYCOUNCIL ASSESSINGCITYSOLICITOR VOTER REGISTRATION ANIMALCONTROL ELECTIONS CITY OF BANGOR ORGANIZATIONAL CHART Revised (06/13) FINANCE AUDITING TREASURY RISK &ENVIRONMENTALMANAGEMENT INFORMATIONSERVICES PURCHASING PUBLIC WORKS SEWERMAINTENANCE WASTEWATERTREATMENT HARBOR ENGINEERING PLANNING CODEENFORCEMENT INFRASTRUCTURE AND DEVEL- OPMENT SUPPORT POLICE DETECTIVE PATROL ADMINISTRATION SERVICES COMMUNITY &ECONOMIC DEV. COMMUNITYDEVELOPMENT ECONOMICDEVELOPMENT DOWNTOWNPROGRAMS PARKINGMANAGEMENT BANGORINTERNATIONALAIRPORT ARENA STATE FAIR BASS PARK ADMINISTRATION FIREPREVENTIONBUREAU FIREFIGHTING FIRE LABORRELATIONS ADMINISTRATIVESERVICES HUMANRESOURCES FLEETMAINTENANCE BATCOMMUNITYCONNECTOR CENTRALSERVICES HEALTH ANDWELFARE GENERALRELIEF DENTALCLINIC NURSINGSERVICES GRANTPROGRAMS GOVERNMENT OPERATIONS PARKS MAINTENANCE RECREATION PARKS ANDRECREATION GOLFCOURSE PARKWOODS RECORDS City of Bangor, Maine Elected Officials and Principal Administrative Officers June 30, 2013 City Council Nelson Durgin, Chair Joseph Baldacci Patricia Blanchette Pauline Civiello James Gallant Susan Hawes Charles Longo David Nealley Benjamin Sprague City Staff Catherine M. Conlow, City Manager Benjamin F. Birch, City Assessor Lisa Goodwin, City Clerk Norman Heitmann, City Solicitor School Committee Phyllis Guerette, Chair Warren Caruso, Vice Chair Marc Eastman Sarah Smiley Christine Szal Jay Ye Vacant School Staff Betsy Webb, Superintendent of Schools I - 9 FINANCIAL SECTION II-1 Certified Public Accountants and Business Consultants Independent Auditor’s Report City Council City of Bangor, Maine: Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business- type activities, the discreetly-presented component unit, each major fund, and the aggregate remaining fund information of the City of Bangor, Maine, as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the 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. II-2 City Council City of Bangor, Maine Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discreetly presented component unit, each major fund, and the aggregate remaining fund information of the City of Bangor, Maine, as of June 30, 2013, and the respective changes in financial position and, where applicable, cash flows thereof and the budgetary comparison for the General Fund 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 and the Schedules of Funding Progress, 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. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Bangor, Maine’s basic financial statements. The introductory section, combining and individual fund financial statements, schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules 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. 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. II-3 City Council City of Bangor, Maine In our opinion, the combining and individual fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 20, 2013, on our consideration of the City of Bangor, Maine’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Bangor, Maine’s internal control over financial reporting and compliance. December 20, 2013 South Portland, Maine MANAGEMENT’S DISCUSSION AND ANALYSIS Management of the City of Bangor offers this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2013. In addition to comparative information from the government-wide statements, comparative data is also presented on key information from the fund financial statements. We encourage readers to consider the information presented here in conjunction with additional information that is furnished in our letter of transmittal, which can be found on pages I-1 to I-6 of this report. Financial Highlights The assets of the City of Bangor exceeded its liabilities and deferred inflows at the close of the most recent fiscal year by $204.7 million (net position). At the close of fiscal year 2013, the City of Bangor’s governmental funds reported combined ending fund balances of $25.5 million, a decrease of $28.2 million over the restated prior year balance, the restatement was an increase of $36.4 million (See Note H) which was partially offset by an increase of $8.2 million in current year activity. Current year increase was primarily due to the accumulation of committed and assigned fund balances for future payment of the Arena debt service and specific near term capital projects. Approximately 75% of the total amount, or $19.2 million, is either committed, assigned or unassigned and is available for spending at the City Council’s discretion, if needed. The City of Bangor has a fund balance policy. By Charter, the City is to maintain an unassigned fund balance of no more than 16.66% and no less than 8.33% of prior year expenditures, net of debt service and the Council has determined that a reasonable target is 8.33%. At the end of the current fiscal year, unassigned fund balance for the General Fund was $7.7 million, or 8.90% of the general fund expenditure base. The annual calculation is included within the financial statements as Schedule F-2. The total liabilities and deferred inflows of resources of the City’s governmental funds decreased by $4.8 million (25.1%), primarily due to the payment of a significant account payable and interim financing related to the Cross Insurance Center construction. Enterprise fund liabilities increased by $60.7 million (161.0%), primarily due to the issuance of the permanent financing of the construction of the Cross Insurance Center and the timing of accounts payable which can vary drastically from year to year depending upon the timing of invoices received and/or the projects being undertaken. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of Bangor’s basic financial statements. These statements consist of three components: government-wide financial statements, fund financial statements, and notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements present the financial picture of the City from the point of view of economic resources measurement and using the accrual basis of accounting, which is similar to that used by private-sector companies. These statements present governmental activities and business-type activities separately. II - 4 The statement of net position includes all of the City’s assets, liabilities and deferred inflows, with the difference between them reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that are accrued but not yet paid or collected but will result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused employee vacation leave). These statements are divided into two categories: governmental activities and business-type activities. Governmental activities – Most of the City’s basic services are included here, such as the general government, public safety, public works, health and welfare, education, and parks and recreation. These activities are principally supported by taxes and intergovernmental revenues. Business-type activities – Currently, the City operates the following business-type activities: Bangor International Airport, Sewer Utility, the Bass Park Complex, Parking, Golf Course, Economic Development, and the Park Woods Complex. The government-wide financial statements can be found on pages II-18 to II-19 of this report. 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 objectives. The City of Bangor, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds are used to account for mostly the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements are reported using an accounting method called modified accrual accounting that measures cash and all other financial assets that can readily be converted to cash. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate a comparison between governmental funds and governmental activities. The City of Bangor maintains ten individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, Community Development Block Grant, Arena fund, and Capital Projects Fund, all of which are considered to be major funds. Data from the other six governmental funds are combined into a single aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements (Schedule B) elsewhere in this report. II - 5 2013 2012*2013 2012*2013 2012 Current & other assets 39,522,674 35,141,366 26,067,159 23,744,869 65,589,833 58,886,235 Capital assets, net of accumulated depreciation 76,641,969 75,265,288 236,621,877 212,611,248 313,263,846 287,876,536 Total assets 116,164,643 110,406,654 262,689,036 236,356,117 378,853,679 346,762,771 Long-term debt outstanding 70,199,367 87,046,162 87,282,407 30,927,074 157,481,774 117,973,236 Other liabilities 6,637,178 10,792,741 4,978,188 3,433,904 11,615,366 14,226,645 Total liabilities 76,836,545 97,838,903 92,260,595 34,360,978 169,097,140 132,199,881 Deferred inflows of resources 5,082,840 5,009,200 - - 5,082,840 5,009,200 Total deferred inflows 5,082,840 5,009,200 - - 5,082,840 5,009,200 Net position: Net investment in capital assets 54,540,288 51,140,022 165,548,784 189,171,941 220,089,072 240,311,963 Restricted 1,041,443 1,039,248 - - 1,041,443 1,039,248 Unrestricted (21,336,473) (8,198,487) 4,879,657 12,823,198 (16,456,816) 4,624,711 Total net position 34,245,258 43,980,783 170,428,441 201,995,139 204,673,699 245,975,922 * Restated See Other Information Note H Governmental Activities Business-type Activities Total The City of Bangor adopts an annual budget for its General Fund. A budgetary comparison statement has been provided for the general fund to demonstrate compliance with this budget (Schedule A-2). Proprietary funds are used to account for essentially the same functions reported as business-type activities in the government-wide financial statements. Enterprise funds are the only type of proprietary funds maintained by the City. The proprietary fund statements provide the same type of information as the government-wide statements, only in more detail. The City maintains seven individual proprietary funds, of which the Sewer Utility, Airport, Bass Park and Economic Development Funds are considered to be major. Data from three other proprietary funds is combined into a single aggregated presentation. Individual fund data for each of these non-major proprietary funds is provided in the form of combining statements (Schedule C) elsewhere in this report. The City of Bangor adopts annual budgets for all of its proprietary funds. Budgetary comparison statements have been provided for each proprietary fund to demonstrate compliance with budgets (Schedule C4 – C10). Fiduciary funds are used to account for resources held for the benefit of parties outside the City. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The Fiduciary Statement of Net Position is included in this report as Exhibit 10. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages II-30 through II-55 of this report. Government-wide Financial Analysis The following is a condensed version of the Statement of Net Position. II - 6 By far the largest portion of the City’s net position reflects its net investment in capital assets (i.e., land, buildings, machinery and equipment) less any related outstanding debt used to acquire those assets. The City uses these capital assets to provide services to citizens. Consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot be used to satisfy these liabilities. Restricted net position are those resources that are subject to external restrictions on how they may be used; such as donor, legal or granting agency restrictions. While the remaining balance of unrestricted net position has a deficit of $16.5 million, the governmental activity deficit of $21.3 million is partially offset by the business type activities balance of $4.9 million. The governmental activity deficit is primarily due to $24.0 million in outstanding pension obligation bonds. Governmental-type net position decreased $9.7 million. The major component associated with the decrease in governmental-type net position is the spend down in Arena funds associated with the construction of the Cross Insurance Center, net of the receipt of $2.1 million of revenues that result from the casino operation. Business-type net position increased by $4.9 million. The increase in net position was largely driven by a transfer of resources from the Arena Fund to the Bass Park Fund related to the construction of the Cross Insurance Center. This was dampened by the fact that user fees cannot absorb annual depreciation expense, due to the significant cost of infrastructure, specifically within the Airport Fund. Airport infrastructure investments are typically funded via the federal/state Airport Improvement Plan, which provides 97.5% of the funding for projects or the Passenger Facility Charges, which is a federally regulated program whereby per passenger fees are collected from the airlines. II - 7 2013 2012 2013 2012 2013 2012 Revenues Program Revenues Charges for services 17,728,344 18,191,551 23,460,843 23,613,090 41,189,187 41,804,641 Operating grants & contributions 31,901,386 33,137,275 - - 31,901,386 33,137,275 Capital grants & contributions 2,345,794 3,725,432 6,121,523 2,351,779 8,467,317 6,077,211 General Revenues Property and other taxes 54,983,518 53,646,508 - - 54,983,518 53,646,508 Grants and contributions not restricted to specific programs 4,857,030 4,963,161 - - 4,857,030 4,963,161 Other 169,680 547,329 85,075 543,493 254,755 1,090,822 Total Revenues 111,985,752 114,211,256 29,667,441 26,508,362 141,653,193 140,719,618 Expenses General government 4,733,021 4,490,599 - - 4,733,021 4,490,599 Public safety 17,864,294 18,016,430 - - 17,864,294 18,016,430 Health, community and recreation 9,298,196 8,455,977 - - 9,298,196 8,455,977 Public services 14,408,500 15,399,933 - - 14,408,500 15,399,933 Other agencies 4,630,915 4,209,428 - - 4,630,915 4,209,428 Education 50,145,937 51,223,806 - - 50,145,937 51,223,806 Arena development 2,201,200 536,251 - - 2,201,200 536,251 Community development 1,356,184 1,152,289 - - 1,356,184 1,152,289 Waterfront 381,437 606,249 - - 381,437 606,249 Public transportation 3,250,752 3,276,780 - - 3,250,752 3,276,780 Interest on debt 3,343,590 2,710,135 - - 3,343,590 2,710,135 Economic development (tif)1,334,470 1,502,503 - - 1,334,470 1,502,503 Sewer Utility - - 6,827,790 6,758,495 6,827,790 6,758,495 Airport - - 20,722,960 20,752,350 20,722,960 20,752,350 Economic Development - - 586,140 615,816 586,140 615,816 Park Woods - - 473,289 533,671 473,289 533,671 Parking - - 972,327 995,631 972,327 995,631 Bass Park - - 3,314,865 1,919,301 3,314,865 1,919,301 Municipal Golf Course - - 687,317 671,113 687,317 671,113 Total Expenses 112,948,496 111,580,380 33,584,688 32,246,377 146,533,184 143,826,757 Excess (deficiency) before transfers (962,744) 6,282,337 (3,917,247) (5,738,015) (4,879,991) (3,107,139) Transfers (8,772,781) (417,042) 8,772,781 417,042 - - Change in net position (9,735,525) 5,644,439 4,855,534 (2,256,880) (4,879,991) (3,107,139) TotalActivities Business-type Activities Governmental Changes in Net Position The following is a condensed version of the Statement of Activities. II - 8 Governmental Activities The cost of all governmental activities was $112.9 million. As shown on the Statement of Activities, the total amount financed by the property tax was $49.9 million, or 44.3% of expenses. Those who directly benefit from an activity provided $17.7 million in payments. Other governments and organizations subsidized certain activities with operating grants and contributions in the amount of $31.9 million. Capital grants and contributions accounted for $2.3 million. The City also received $10.1 million in other general revenues such as state revenue sharing, motor vehicle and boat excise taxes, homestead exemptions, and interest earnings. Total governmental activities expenses remained relatively flat over the prior year with an increase of $1.3 million. During FY 2013, City employees did receive a cost of living adjustment of 1.5% and health insurance increases were lower than anticipated at 8.3% due to the City’s lower utilization rates and the effects of employee/insurer driven wellness initiatives in prior years. 0 10 20 30 40 50 60 (in millions)General GovernmentPublic SafetyPublic ServicesHealth, Community & RecreationOther AgenciesEducationArena DevComm DevelopWaterfrontPublic TransportationEcon DevelopInterest on DebtExpenses and Program Revenues - Governmental Activities Expenses Revenues II - 9 Total governmental activities’ revenues decreased $2.2 million, or 1.9%. The largest single source of revenue continues to be the property tax, which increased $1.4 million. Capital grants and contributions decreased $1.4 million due to a reduction of $400 thousand in Federal Highway funding related to general street reconstruction and Safe Routes to School grants, a $400 thousand reduction in Neighborhood Stabilization Federal funds, and the remainder represents reductions in capital grant funding in support of Public Safety, Waterfront and public transportation improvements. Operating grants and contributions decreased $1.2 million due to a reduction of $1.9 million in State and Federal funding of education in FY 2013. In total, charges for services remained relatively flat with a decrease of $463 thousand. Business-type Activities Total business-type activities expenses increased $1.3 million compared to prior year levels. For FY 2013, the City employees working in business-type activities did receive a 1.5% cost of living adjustment and health insurance increases were lower than anticipated at 8.3% due to the City’s lower utilization rates and the effects of employee/insurer driven wellness initiatives in prior years. Lastly, there was a significant increase in interest expense related to the permanent financing of the Cross Insurance Center, which is recorded as a capital asset in the Bass Park Fund. Revenues by Source - Governmental Activities 28%2% 45% 5%4%0%16% Charges for Services Operating Grants & Contributions Capital Grants & Contributions Property Taxes Other General Unrestricted Grants & Contributions Other Unrestricted II - 10 In total, business-type activities revenue increased significantly $3.2 million or 12.1%, $3.7 million of which was attributable to an increase in capital contributions. Airport related federal grants vary year to year due to the biannual funding cycle. Business activities realized $198 thousand less in investment earnings and received $8.4 million more in transfers related to the costs associated with the Cross Insurance Center construction and start up costs. Revenues by Source - Business-type Activities Unrestricted Investment Earnings 1% Capital Grants and Contributions 16% Transfers 23% Charges for Services 60% Charges for Services Capital Grants andContributions Unrestricted InvestmentEarnings Transfers 0 5 10 15 20 25 (in millions)Sewer UtilityAirportPark WoodsParkingBass ParkGolf CourseEcon DevelopExpenses and Program Revenues - Business-type Activities Expenses Revenues II - 11 Financial Analysis of the Government’s Funds Governmental funds. The focus of the City’s governmental funds reporting is to provide information on near-term inflows, outflows, and balances of spendable resources. Fund balance is the measure of a governmental fund’s spendable resources. Governmental funds report fund balances in one of five possible classifications. The nonspendable portion of fund balance cannot be spent. Restricted fund balances are subject to externally enforceable legal restrictions. Committed fund balances are subject to limitations the City Council has imposed, that are binding unless removed in the same manner. Assigned fund balances reflect the intended use of resources. Unassigned fund balances are resources which have not been classified in any other category. Only the General Fund can report a positive unassigned fund balance amount. At fiscal year end, the City of Bangor’s governmental funds reported combined ending fund balances of $25.5 million, a decrease of $28.2 million over the restated prior year balance. The restatement was an increase of $36.4 million (See Note H). The current year increase of $8.2 million was primarily due to the accumulation of committed and assigned fund balances for future payment of the Arena debt service and specific near term capital projects. Of the ending balance of $25.5 million, approximately 75% of this total ($19.2 million) is either committed, assigned or unassigned and is available for spending by formal action of the City Council and $2.9 million, or 11.4%, is restricted. The remainder is nonspendable, indicating that it is in the form of nonspendable assets such as inventory, prepaid expenditures and allowance for advances made to other funds. The General Fund is the chief operating fund of the City and is comprised of two major functions, education and municipal services. At the end of the fiscal year, the General Fund’s total fund balance was $15.2 million, a $1.6 million decrease from the prior year’s balance of $16.8 million. Generally, the overall decrease in fund balance is related to the anticipated spend down of education related restricted fund balances and Arena Pre-opening committed and subsequent year expenditures assigned fund balances. The municipal unassigned fund balance increased by $163 thousand. The Community Development Block Grant Fund accounts for the annual entitlement grant funds received under the Housing and Community Development Act of 1974. Total expenditures for FY 2013 were relatively unchanged compared to the prior year, which was as expected based on the annual grant award of approximately $746 thousand annually. As anticipated, the annual federal award amount decreased by 21% over FY 2012 levels. This reduction is in addition to the nearly 16% reduction the City experienced in FY 2012 over prior year levels. The Arena Fund accounts for the allocation of slot and table game revenues received by the City from the operation of the casino. The fund was established to finance the cost to replace the aging Bangor Auditorium and Civic Center. During the year, the Arena provided an additional $8.1 million towards the final project cost of $68.7 million, the balance was financed with general obligation bonds which are accounted for in the Bass Park Fund. The Capital projects fund varies significantly from year to year depending upon City Council priorities and available funding opportunities. Total expenditures decreased $6.8 million over the prior year. Prior year expenditures included a significant one-time expenditure of $4.3 II - 12 million to refund capital project related debt and $479 thousand for the Penobscot River coal tar remediation project. Proprietary funds. Information on the City of Bangor’s proprietary funds is similar to that found in the government-wide financial statements, but in more detail. The net position of the seven enterprise funds increased $4.9 million to a total of $170.4 million. With the exceptions of increased capital grants received by the Airport Fund and the significant transfer of resources from the Arena and General Funds in support of the capital costs and pre-opening costs related to the Cross Insurance Center, all other operating revenues and expenses remained relatively flat. The increase in net position is mitigated by the fact that depreciation expense exceeds capital acquisitions in the Airport and Sewer Funds. General Fund Budgetary Highlights For budgetary financial statement purposes, all balances carried from the prior year are added to the subsequent year’s total appropriation. This resulted in an overall budgetary increase of $4.3 million. There were minimal additional amendments to the originally adopted budget. The City’s commitment to budgetary integrity continues, while actual operating revenues ended the year under budget estimates 1.28%, or $1.2 million, municipal expenditures were under budget by 6.03%, or $5.9 million, which more than offset the negative revenue variance. Education expenditures were under budget by $5 million or 9.7%, executive expenditures were over budget by $346 thousand due to fleet maintenance costs and parks and recreation expenditures were over budget due to the addition of expanded before and after school programming during the year. There were adequate under expenditures in other municipal areas to offset the revenue shortfall and any over expenditures. By statute, education balances must be segregated from municipal balances. Capital Asset and Debt Administration Capital assets. As of June 30, 2013, the City of Bangor’s investment in capital assets for its governmental and business-type activities amounted to $313.3 million (net of accumulated depreciation), an increase of $25.7 million over the prior year. This investment includes land, buildings, machinery and equipment, roads, runways, and sewer lines. The increase in the City’s investment in capital assets for the current fiscal year is due to a $27.6 million outlay related to the construction of the Cross Insurance Center. Governmental activities invested $5.5 million, and business-type activities invested $35 million and depreciation expense was $4 million and $10.6 million, respectively. Major capital asset events during the current fiscal year included the following; The school department utilized its allocation of Qualified School Construction Bonds to capitalize $1.8 million in rehabilitating and upgrading the City’s various school facilities. These bonds were issued at a taxable rate with a federal interest rate subsidy under the provisions of the American Recovery and Reinvestment Act. Construction of the Cross Insurance Center began in August of 2012 and was completed in September 2013. During the year, the City invested $27.6 million in this project and the total estimated project cost is approximately $68.7 million. The City continues to enhance its recreational infrastructure on our waterfront with an additional $1.27 million investment this year. II - 13 Additionally, the City continues to invest in its core functions of infrastructure and vehicle replacements. This year the City expanded its surface infrastructure with traffic enhancements, additional sidewalks and acceptance of new streets, which amounted to $770 thousand in additions and spent $1.2 million to replace vehicles. The Airport Fund invested $6 million in operational assets at Bangor International Airport including apron improvements, general building improvements, master planning, as well as the replacement of the primary underground power system. Nearly $5.1 million of this investment was funded through the Federal Department of Transportation’s Airport Improvement Plan, which provides 92.5% federal and 2.5% state funding for approved projects. Capital Assets (net of depreciation) Governmental Business-type Activities Activities Land and improvements 12,612,926 5,371,802 Buildings and improvements 42,756,232 74,377,647 Machinery and equipment 2,254,528 3,037,542 Vehicles 7,017,629 - Infrastructure 11,533,523 46,223,671 Parking structures - 2,959,054 Aircraft operational assets - 98,322,215 Construction in process 467,131 6,329,946 Total 76,641,969 236,621,877 Additional information on the City’s capital assets can be found in Note C, Detailed Notes on all funds, of this report. Debt Administration At fiscal year end, the City had a total outstanding bonded debt of $145.2 million, an increase of $35.8 million during the year. The City’s general obligation debt obtained a “AA” rating from Standard & Poor’s and a “Aa2” rating from Moody’s. Bonded Debt Outstanding (in millions) $82.5 $62.7 Governmental Activities Business-type Activities II - 14 State statutes limit the amount of general obligation debt a governmental entity may issue to 15% of its total State assessed valuation. The current debt limit for the City is $369.6 million, an amount which is significantly in excess of existing general obligation debt. In November 2012, residents approved a citizen-initiated Charter amendment to require voter ratification of certain debt issuances. Voter ratification will be required for individual projects in excess of five one-hundredths of one percent of the City’s last certified State Valuation, that do not meet certain exemptions such as streets, sewer, self-supporting enterprise funds, refunding, etc. Additional information on the City’s long-term debt can be found in Note I on pages II-44 to II- 47 of this report. Cross Insurance Center For nearly thirty years, City Councils have been actively working to replace the City’s aging, inadequately sized and equipped auditorium and civic center. Their long term goal and vision has come to its long awaited and realization in September 2013, with the opening of a state-of- the-art 5,800 fixed seat arena and conference center, known as the Cross Insurance Center. Since the introduction of gaming operations in the City, the City Council has directed all rents and State taxes received by the City from the operation of casino be deposited into a separate special revenue fund to be used for costs associated with replacing its aging facility. To ensure the long term success of this facility, the City has engaged the services of a private management company, Global Spectrum. While the FY 2014 budget is anticipated to breakeven, that is due to the three months of pre-opening costs that were anticipated prior to the grand opening. Going forward it is anticipated that the facility will generate net income. In addition to the traditional revenue streams of ticket sales and rentals, the expectation is that the facility will generate significantly higher annual ancillary revenues in the areas of naming rights, concessions/food and beverage, seat licensing, advertising and suite sales. The City expects to receive sufficient revenues from naming rights, Arena Fund revenues and Downtown Tax Increment Financing District funds to pay the debt service costs. Since it’s opening in September, the City has also entered into a tentative developer agreement with a hotelier to construct a 100+ room hotel adjacent to the new facility. State of Maine Biennial Budget The recently enacted State Biennial budget proved once again challenging to Maine municipalities. The initial budget proposed by the Governor included substantial changes to programs that had a potentially significant negative impact on individual property owners and municipalities alike. While the final adopted Biennial budget did temper some of the original proposals, it still resulted in considerable reductions at the municipal level. Revenue sharing was established to share a portion of sales and income taxes generated by municipally based economic activity. These funds cover some of the increased operating and capital costs necessary to support the activity, which generates Maine State sales and income tax revenue. Understanding that not all economic activity results in increased property taxes, such as hospitals, educational institutions, etc.. Beginning in FY 2010, the State began to reduce the Revenue Sharing pool by a fixed “one-time” amount to balance the State biennial II - 15 Prior Year Base Municipal Commitment $ 21,014,976 Growth Factor:4.87% Average Real Personal 1.43% Property Growth Factor 3.44% Net New State Funds - Municipal Commitment $ 26,554,981 budget. What began as a one-time reduction of $25 million, has become a $44.5 million fixed transfer to the State General Fund for FY 2014. In 2012, Bangor generated $1.21 billion in taxable sales or $60.4 million in sales tax receipts alone. If the State complied with existing Statute, the City would be entitled to in excess of $5 million in revenue sharing versus $2.3 million currently anticipated. This resulted in a reduction of $1.4 million over FY 2013 levels. The FY 2014 allocation is also subject to further refinement should the State be unable to identify an additional $40 million in savings a corresponding reduction to the Revenue Sharing pool will be made. If that were to happen, the City would realize an additional $1.4 million reduction during FY2014. As part of the biennial budget, the State of Maine transferred a portion of teacher retirement costs to the local school districts. Until FY2014, the State of Maine provided 100% of the employer’s retirement contribution for teachers. While the shift is only for the normal cost portion of the employer’s contribution and funding was added to the State Aid to Education funding to offset the costs, this change in practice bears watching to ensure that other portions of the costs are not shifted to the local school districts without additional state funding or a reduction in existing state funding levels of education Changes to the General Assistance reimbursement formula and business personal property tax programs initially proposed, were not enacted, it is likely that these issues will come forward again in the coming session as well as the funding level of State Aid to Education. Economic Factors and Next Year’s Budget and Rates The unemployment rate for the City of Bangor for FY 2013 was 6.7%, which continues to be on par with or below both the county and State rates of 7.6% and 6.8%, respectively. While Bangor represents less than 3% of the state’s population, the City’s share of retail sales is nearly 7% of total statewide sales. Bangor has experienced a slowing in the rate of appreciation of existing homes. We project that existing home values will remain flat or increase slightly in the coming year. Value of commercial properties has begun to increase slightly after realizing significant downward adjustments made in FY 2010 and remaining flat since. Bangor businesses continue to reinvest in personal property. While not subject to local taxation, the State reimburses each municipality on an annually declining percentage of the calculated tax on the investment. BETE value (net of depreciation) for FY 2014 increased $6.6 million, or 10%, for a total of $72.6 million. The City is subject to a state statutory tax levy calculation system (known as LD 1). Generally, the growth of the tax levy is limited to an increase equal to the ten year average percentage change in real statewide personal income plus taxes from property value resulting from new construction, major renovations to existing properties, or the subdivision of property less any “net new state funding”. For Fiscal Year 2013, the City’s LD 1 tax levy limit was as follows: II - 16 The Fiscal Year 2013 budget was within the statutory tax levy limit. The State’s “Essential Programs and Services” model is a mechanism designed to allocate state funding to local school units and to control local school expenditures. While the State’s model recognizes what it considers to be essential programs and their appropriate funding level, the Bangor School Department has identified a number of programs that are either under-funded or not funded by this model. As a result, both the School Committee and the City Council voted to increase the educational spending limits for both Fiscal Year 2013 and 2014 in order to fund such services and programs and their actions were approved, as required, via a local election. In response to the continued uncertainty surrounding the national economy, management has been closely tracking not only revenues and expenditures, but also foreclosure, liens, unemployment rates, construction starts and related building permit levels, and the State of Maine’s budgetary projections. The City continues to see only slight increases in foreclosure and lien rates and will continue to monitor these levels and take steps to assist our tax/rate payers in obtaining assistance wherever possible. Both residential and commercial construction and permitting has begun to increase slightly. The Maine State Legislature will return to session in January 2014. But at this time it is not clear what form any supplemental budget appropriation will take (refer to State of Maine Biennial Budget section for additional information). City and school management will closely monitor legislative actions, as it is highly likely that their actions will impact municipal/education funding in one form or another. We continue to monitor key revenue areas such as: flat investment yield curves, automobile excise taxes, property tax collection and State sales and income tax collections that impact the City’s share of State Revenue Sharing. The fiscal year 2014 budget reflects the City’s historical results for these revenue sources, and actual results to date appear to be on track with budgetary estimates. User fees for governmental and business-type activities are reviewed on an annual basis to ensure that fee structures are sufficient to cover service costs. Many fees are adjusted annually for inflation. For the Fiscal Year 2014 budget, the City Council’s goal was to minimize any tax rate increase, continue to recover from austere budget trends and increase operating efficiencies. As always this goal was challenging due to continued reductions in State and Federal funding, relatively flat non-property tax revenue projections and assessed value. These challenges were partially offset by strategic reductions in staffing and a continued increase in BETE valuation. The afore referenced actions coupled with a small increase in property taxes of 5.8% allowed the City Council to provide a 1.5% cost of living increase to employees, maintain increased levels of investment in infrastructure, as well as the practice of funding assigned fund balances for future capital purchases on a current basis. Requests for Information This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the City of Bangor’s finances. Questions concerning any of this information should be addressed to the Finance Director, City of Bangor, 73 Harlow Street, Bangor, ME 04401 or via email to finance@bangormaine.gov. II - 17 BASIC FINANCIAL STATEMENTS II - 18 Exhibit 1 Component Unit Governmental Business-type Bangor Activities Activities Total Public Library ASSETS Cash and cash equivalents 16,707,713$ 7,218,872$ 23,926,585$ 738,738$ Investments 174,570 15,044,928 15,219,498 12,020,665 Receivables: Accounts (net of allowance of $475,341 and $573,353, respectively)1,467,795 6,120,094 7,587,889 2,944,852 Intergovernmental 3,466,180 698,093 4,164,273 - Taxes and liens receivable - prior years 1,508,020 - 1,508,020 - Taxes receivable - current year 1,302,812 - 1,302,812 - Unearned special assessments 30,130 87,664 117,794 - Due from water district - 26,863 26,863 - Loans (net of $170,317 allowance)7,804,046 2,449,643 10,253,689 - Internal balances 6,187,694 (6,187,694) - - Inventories 797,655 322,435 1,120,090 - Prepaid items 76,059 40,661 116,720 15,766 Other assets - 245,600 245,600 - Non-depreciable capital assets 5,559,499 10,295,942 15,855,441 - Depreciable capital assets, net 71,082,470 226,325,935 297,408,405 6,359,534 Total assets 116,164,643 262,689,036 378,853,679 22,079,555 LIABILITIES Accounts payable and other current liabilities 2,514,476 4,725,241 7,239,717 170,177 Accrued wages and benefits payable 4,026,131 252,947 4,279,078 - Unearned revenues 96,571 - 96,571 - Noncurrent liabilities: Due within one year 6,697,047 2,517,366 9,214,413 99,765 Due in more than one year 63,502,320 84,765,041 148,267,361 498,640 Total liabilities 76,836,545 92,260,595 169,097,140 768,582 DEFERRED INFLOWS OF RESOURCES Unavailable revenues - loans 5,082,840 - 5,082,840 - Total deferred inflows of resources 5,082,840 - 5,082,840 - NET POSITION Net investment in capital assets 54,540,288 165,548,784 220,089,072 5,834,356 Restricted for: Nonexpendable trust principal 574,492 - 574,492 4,305,058 Expendable income 466,951 - 466,951 10,501,440 Unrestricted (21,336,473) 4,879,657 (16,456,816) 670,119 Total net position 34,245,258$ 170,428,441$ 204,673,699$ 21,310,973$ See accompanying notes to financial statements. CITY OF BANGOR, MAINE Statement of Net Position June 30, 2013 Primary Government II - 19 Exhibit 2 Operating Capital Component Unit Charges for grants and grants and Governmental Business-type BangorFunctions/programs Expenses services contributions contributions activities activities Total Public Library Primary governmentGovernmental activities: General government $4,733,021 2,214,675$ -$ -$ (2,518,346)$ -$ (2,518,346)$ -$ Public safety 17,864,294 3,418,686 446,620 341,231 (13,657,757) - (13,657,757) - Health, community services and recreation 9,298,196 1,139,382 5,756,384 - (2,402,430) - (2,402,430) - Public services 14,408,500 3,520,517 - 1,837,109 (9,050,874) - (9,050,874) - Other agencies 4,630,915 - - - (4,630,915) - (4,630,915) - Education 50,145,937 3,835,409 23,496,306 - (22,814,222) - (22,814,222) - Arena development 2,201,200 2,079,869 - - (121,331) - (121,331) - Community development 1,356,184 474,013 522,833 - (359,338) - (359,338) - Waterfront 381,437 - - 167,454 (213,983) - (213,983) - Public transportation 3,250,752 1,045,793 1,679,243 - (525,716) - (525,716) - Economic development (tif)1,334,470 - - - (1,334,470) - (1,334,470) - Interest on debt 3,343,590 - - - (3,343,590) - (3,343,590) - Total governmental activities 112,948,496 17,728,344 31,901,386 2,345,794 (60,972,972) - (60,972,972) - Business-type activities: Sewer Utility 6,827,790 7,708,101 - - - 880,311 880,311 - Airport 20,722,960 12,069,935 - 6,093,242 - (2,559,783) (2,559,783) - Park Woods 473,289 417,407 - - - (55,882) (55,882) - Parking 972,327 960,947 - 28,281 - 16,901 16,901 - Bass Park 3,314,865 1,249,595 - - - (2,065,270) (2,065,270) - Municipal Golf Course 687,317 592,825 - - - (94,492) (94,492) - Economic Development 586,140 462,033 - - - (124,107) (124,107) - Total business-type activities 33,584,688 23,460,843 - 6,121,523 - (4,002,322) (4,002,322) - Total primary government $146,533,184 41,189,187$ 31,901,386$ 8,467,317$ (60,972,972) (4,002,322) (64,975,294) - Component unit Bangor Public Library $2,877,657 1,099,919 2,194,902 3,588,549 - - - 4,005,713$ General revenues: Property taxes, levied for general purposes 49,930,989 - 49,930,989 - Payment in lieu of taxes 95,620 - 95,620 - Excise taxes 4,594,821 - 4,594,821 - Franchise taxes 362,088 - 362,088 - Grants and contributions not restricted to specific programs: Homestead/BETE exemption 1,318,115 - 1,318,115 - Other State aid 25,204 - 25,204 - State Revenue Sharing 3,513,711 - 3,513,711 - Unrestricted investment earnings 57,620 345,932 403,552 70,506 Gain/loss on sale of asset - (260,857) (260,857) - Miscellaneous revenues 112,060 - 112,060 - Transfers (8,772,781) 8,772,781 - - Total general revenues and transfers 51,237,447 8,857,856 60,095,303 70,506 Change in net position (9,735,525) 4,855,534 (4,879,991) 4,076,219 Net position, beginning of year (Restated see Other Information Note H)43,980,783 165,572,907 209,553,690 17,234,754 Net position, end of year 34,245,258$ 170,428,441$ 204,673,699$ 21,310,973$ See accompanying notes to financial statements. Program Revenues in net position Primary Government Net (expense) revenue and changes CITY OF BANGOR, MAINE Statement of ActivitiesFor the Fiscal Year Ended June 30, 2013 II - 20 Exhibit 3 CITY OF BANGOR, MAINEBalance Sheet Governmental Funds June 30, 2013 Community Capital Other Total Development Arena Projects Governmental GovernmentalGeneralBlock Grant Fund Fund Funds Funds ASSETS Cash and cash equivalents 8,058,272$ 193,916$ 2,608,910$ 5,111,198$ 735,417$ 16,707,713$ Investments 50,000 - - - 124,570 174,570 Receivables: Taxes 2,810,832 - - - - 2,810,832 Accounts (net of allowance of $475,341)1,246,085 - 152,631 - 69,079 1,467,795 Interfund 6,415,524 - - - - 6,415,524 Intergovernmental 2,625,755 293,802 - 357,674 188,949 3,466,180 Loans/Notes (net of $170,317 allowance)820,615 4,892,710 - - 2,090,721 7,804,046 Unearned special assessments - - - 30,130 - 30,130 Inventory, at cost 797,655 - - - - 797,655 Prepaid items 76,059 - - - - 76,059 Total assets 22,900,797$ 5,380,428$ 2,761,541$ 5,499,002$ 3,208,736$ 39,750,504$ LIABILITIES Accounts payable 996,982$ 56,182$ -$ 866,337$ 54,968$ 1,974,469$ Accrued wages and benefits payable 4,013,128 13,003 - - - 4,026,131 Interfund loans payable - - - - 227,830 227,830 Unearned revenues 45,161 3,242 - 48,168 - 96,571 Due to rehabilitation recipients - 162,812 - - - 162,812 Total liabilities 5,055,271 235,239 - 914,505 282,798 6,487,813 DEFERRED INFLOWS OF RESOURCES Unavailable revenues - property taxes 2,664,910 - - - - 2,664,910 Unavailable revenues - loans - 4,892,710 - - 160,000 5,052,710 Unavailable revenues - special assessments - - - 30,130 - 30,130 Total deferred inflows of resources 2,664,910 4,892,710 - 30,130 160,000 7,747,750 FUND BALANCES (DEFICITS) (Note J) Nonspendable 2,774,214 - - - 574,492 3,348,706 Restricted 475,390 252,479 - - 2,197,182 2,925,051 Committed 10,583 - 2,761,541 - - 2,772,124 Assigned 4,193,415 - - 4,554,367 - 8,747,782 Unassigned 7,727,014 - - - (5,736) 7,721,278 Total fund balances (deficits)15,180,616 252,479 2,761,541 4,554,367 2,765,938 25,514,941 Total liabilities, deferred inflows of resources and fund balances 22,900,797$ 5,380,428$ 2,761,541$ 5,499,002$ 3,208,736$ Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds.76,641,969 Unavailable revenues - property taxes are not available to pay for current-period expenditure and, therefore, are deferred in the funds.2,664,910 Long-term liabilities, including bonds payable $62,727,567, accrued interest $377,195, compensated absences $2,261,060, self insurance liability $1,982,918, net OPEB obligation $2,226,963, bond premium $639,850, and capital leases $361,009 are not due and payable in the current period and, therefore, are not reported in the funds.(70,576,562) Net position of governmental funds 34,245,258$ See accompanying notes to financial statements. II - 21 Exhibit 4 CITY OF BANGOR, MAINEStatement of Revenues, Expenditures and Changes in Fund BalancesGovernmental FundsFor the Fiscal Year Ended June 30, 2013 Community Capital Other Total Development Arena Projects Governmental Governmental General Block Grant Fund Fund Funds Funds Revenues Taxes $51,862,260 -$ -$ 1,948,677$ 788,503$ 54,599,440$ Intergovernmental 30,157,317 522,833 - 2,271,408 6,078,266 39,029,824 Licenses and permits 576,559 - - - - 576,559 Charges for services 13,019,247 - - - 1,060,267 14,079,514 Program income - 449,546 - - 12,834 462,380 Revenue from use of money and property 833,643 593 2,101,131 8,915 123,667 3,067,949 Other 32,696 11,040 - 67,454 54,496 165,686 Total revenues 96,481,722 984,012 2,101,131 4,296,454 8,118,033 111,981,352 ExpendituresCurrent:General government 5,612,408 - - - - 5,612,408 Public safety 16,209,402 - - - - 16,209,402 Health, community services and recreation 4,945,994 - - - - 4,945,994 Public services 9,835,549 - - - - 9,835,549 Other agencies 4,382,776 - - - - 4,382,776 Education 49,880,770 - - - - 49,880,770 Tax increment financing 550,308 - - - - 550,308 Unclassified 122,772 - 2,201,200 - - 2,323,972 Restricted grants - 1,147,489 - - 8,055,326 9,202,815 Capital outlay 1,027,506 - - 9,186,046 - 10,213,552 Debt service 4,871,912 - 20,879,743 79,000 - 25,830,655 Total expenditures 97,439,397 1,147,489 23,080,943 9,265,046 8,055,326 138,988,201 Excess (deficiency) of revenues over (under) expenditures (957,675) (163,477) (20,979,812) (4,968,592) 62,707 (27,006,849) Other financing sources (uses) Issuance of debt - - - 10,378,985 - 10,378,985 Capital leases 456,581 - - - - 456,581 Payment to escrow agent - - - (4,233,486) - (4,233,486) Premium on debt issuance - - - 748,121 - 748,121 Sale of assets 115,105 - - 71,604 - 186,709 Transfers to other funds (1,334,009) - (8,103,026) (113,825) (232,147) (9,783,007) Transfers from other funds 127,890 - 26,097 817,758 38,481 1,010,226 Total other financing sources (uses)(634,433) - (8,076,929) 7,669,157 (193,666) (1,235,871) Changes in fund balances (1,592,108) (163,477) (29,056,741) 2,700,565 (130,959) (28,242,720) Fund balances, beginning of year (Restated see Other Information Note H)16,772,724 415,956 31,818,282 1,853,802 2,896,897 53,757,661 Fund balances, end of year $15,180,616 252,479$ 2,761,541$ 4,554,367$ 2,765,938$ 25,514,941$ See accompanying notes to financial statements. II - 22 Exhibit 5 CITY OF BANGOR, MAINE Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Fiscal Year Ended June 30, 2013 Net change in fund balances - total governmental funds (from Exhibit 4)(28,242,720)$ Amounts reported for governmental activities in the statement of activities (Exhibit 2) are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlays of $5,447,993, exceeded depreciation expense of $3,996,663 and loss on disposal of assets of $74,649.1,376,681 Financing proceeds provide current financial resources to governmental fund, but issuing debt increases long-term liabilities in the statement of net position. Repayment of bond and capital lease principal are expenditures in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. This is the amount by which principal payments of $28,325,576 and $95,572 exceeded financing proceeds of $10,378,985 and $456,581 in general obligation bonds and capital leases, respectively.17,585,582 Some items reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported in governmental fund statements. The differences are as follows: increase net OPEB obligation ($244,976), bond premium ($639,850), unavailable revenues ($226,841), self insurance liability ($472) and decrease in compensated absences ($146,511), accrued interest ($56,878).(455,068) Change in net position of governmental activities (see Exhibit 2)(9,735,525)$ See accompanying notes to financial statements. II - 23 Exhibit 6 CITY OF BANGOR, MAINE Statement of Revenues, Expenditures and Changes in Unassigned Fund Balance Budget and Actual General FundFor the Fiscal Year Ended June 30, 2013 Variance with Final Budget Positive Original Final Actual (Negative) Revenues Taxes 51,805,693$ 51,805,693$ 51,862,261$ 56,568$ Intergovernmental 28,014,001 28,014,001 26,441,124 (1,572,877) Licenses and permits 677,436 677,436 576,559 (100,877) Charges for services: municipal 8,549,117 8,619,618 9,076,686 457,068 school 3,865,546 3,865,546 3,835,409 (30,137) Fines, forfeits and penalties 33,000 33,000 32,696 (304) Revenue from use of money and property municipal 688,600 688,600 681,659 (6,941) Total revenues 93,633,393 93,703,894 92,506,394 (1,197,500) Expenditures Current: General government 5,119,307 5,131,732 5,355,861 (224,129) Public safety 16,435,828 16,475,462 16,213,132 262,330 Health, community services and recreation 5,670,363 5,673,686 4,981,609 692,077 Public buildings and services 10,296,434 10,311,553 9,831,466 480,087 Other agencies 4,381,652 4,383,235 4,382,775 460 Education 47,040,164 50,959,916 45,993,603 4,966,313 Unclassified 417,686 417,686 673,078 (255,392) Debt service 4,871,731 4,871,731 4,871,912 (181) Total expenditures 94,233,165 98,225,001 92,303,436 5,921,565 Excess (deficiency) of revenues over (under) expenditures (599,772) (4,521,107) 202,958 4,724,065 Other financing sources (uses) Appropriation from restricted, committed and assigned fund balances 1,526,587 1,526,587 159,105 (1,367,482) Sale of assets 16,000 16,000 53,162 37,162 Contributions - - 106 106 Insurance settlements 22,900 22,900 57,493 34,593 Transfers to other funds (740,626) (1,112,796) (1,223,882) (111,086) Transfers from other funds 27,000 27,000 23,532 (3,468) Operating transfers (252,089) (252,089) (252,089) - Total other financing sources (uses)599,772 227,602 (1,182,573) (1,410,175) Net change in fund balance -$ (4,293,505)$ (979,615) 3,313,890$ Unassigned fund balance, beginning of year 7,563,658 Changes in fund balance classification in accordance with GAAP Changes in balances carried 1,156,498 Inventory and prepaids (GASB 54)(13,527) Unassigned fund balance, end of year 7,727,014$ See accompanying notes to financial statements. Budgeted amounts Continued on next page II - 24 Exhibit 7 CITY OF BANGOR, MAINE Statement of Net Position Proprietary Funds June 30, 2013 Business-type Activities - Enterprise Funds Sewer Economic Nonmajor Total Utility Airport Bass Park Development Proprietary Proprietary Fund Fund Fund Fund Funds Funds ASSETS Current assets Cash and cash equivalents 902,474$ 3,930,631$ 1,603,902$ 35$ 781,830$ 7,218,872$ Investments - 10,244,343 - - - 10,244,343 Accounts receivable 2,557,700 3,953,530 156,565 23,335 2,317 6,693,447 Less allowance for uncollectible accounts (45,000) (518,353) (10,000) - - (573,353) Net accounts receivable 2,512,700 3,435,177 146,565 23,335 2,317 6,120,094 Due from other governments - 698,093 - - - 698,093 Due from water district 26,863 - - - - 26,863 Inventories, at cost - 322,435 - - - 322,435 Prepaid items 10,547 12,134 17,980 - - 40,661 Total current assets 3,452,584 18,642,813 1,768,447 23,370 784,147 24,671,361 Noncurrent assets Capital Assets: Land and improvements 683,865 - 929,157 3,634,485 1,889,757 7,137,264 Buildings and improvements 28,665,849 - 66,446,368 4,318,516 2,845,668 102,276,401 Machinery and equipment 5,765,413 - 1,769,520 - 328,811 7,863,744 Infrastructure 57,863,749 - - 683,189 - 58,546,938 Aircraft operational assets - 258,713,164 - - - 258,713,164 Parking structures - - - - 11,317,169 11,317,169 Construction in process - 5,720,844 609,102 - - 6,329,946 92,978,876 264,434,008 69,754,147 8,636,190 16,381,405 452,184,626 Less accumulated depreciation (40,301,873) (160,390,949) (1,437,628) (1,682,066) (11,750,233) (215,562,749) Net capital assets 52,677,003 104,043,059 68,316,519 6,954,124 4,631,172 236,621,877 Investments - 4,800,585 - - - 4,800,585 Loans receivable - 933,160 - 1,516,483 - 2,449,643 Unearned special assessments 87,664 - - - - 87,664 Due from bond trustee 225,600 - - - - 225,600 Deposits - - - - 20,000 20,000 Total noncurrent assets 52,990,267 109,776,804 68,316,519 8,470,607 4,651,172 244,205,369 Total assets 56,442,851 128,419,617 70,084,966 8,493,977 5,435,319 268,876,730 See accompanying notes to financial statements. Continued from previous page II - 25 Exhibit 7 (con't) CITY OF BANGOR, MAINE Statement of Net Position Proprietary Funds June 30, 2013 Business-type Activities - Enterprise Funds Sewer Economic Nonmajor Total Utility Airport Bass Park Development Proprietary Proprietary Fund Fund Fund Fund Funds Funds LIABILITIES Current liabilities Accounts payable 439,095 1,307,489 1,697,310 8,994 45,148 3,498,036 Accrued wages and benefits payable 48,200 180,502 6,509 - 17,736 252,947 Accrued interest 70,770 35,870 1,020,261 59,970 16,800 1,203,671 Workers' compensation 20,000 136,615 - - 4,050 160,665 Interfund loans payable 221,995 2,501,325 2,412,574 680,800 371,000 6,187,694 General obligation debt payable 1,532,904 305,826 54,828 228,708 234,435 2,356,701 Other liabilities - 23,534 - - - 23,534 Total current liabilities 2,332,964 4,491,161 5,191,482 978,472 689,169 13,683,248 Long-term liabilities Workers' compensation - 188,385 - - 5,950 194,335 General obligation debt payable 11,932,172 8,738,732 54,360,466 2,963,150 2,141,002 80,135,522 Accrued compensated absences 121,503 374,136 - - 39,623 535,262 Net OPEB obligation 134,277 494,821 - - 37,868 666,966 Other long-term liabilities 298,315 - 2,721,352 - 213,289 3,232,956 Total long-term liabilities 12,486,267 9,796,074 57,081,818 2,963,150 2,437,732 84,765,041 Total liabilities 14,819,231 14,287,235 62,273,300 3,941,622 3,126,901 98,448,289 NET POSITION Net investment in capital assets 40,325,364 101,263,893 17,708,652 3,762,266 2,488,609 165,548,784 Unrestricted 1,298,256 12,868,489 (9,896,986) 790,089 (180,191) 4,879,657 Total net position 41,623,620$ 114,132,382$ 7,811,666$ 4,552,355$ 2,308,418$ 170,428,441$ See accompanying notes to financial statements. II - 26 Exhibit 8 CITY OF BANGOR, MAINE Statement of Revenues, Expenses and Changes in Net PositionProprietary Funds For the Fiscal Year Ended June 30, 2013 Business-type Activities - Enterprise Funds Sewer Economic Nonmajor Total Utility Airport Bass Park Development Proprietary Proprietary Fund Fund Fund Fund Funds Funds Operating revenues Charges for services 7,658,101$ 12,044,192$ 1,249,595$ 462,033$ 1,971,179$ 23,385,100$ Operating expenses Operating expenses other than depreciation and amortization 4,772,244 12,428,620 1,980,026 249,477 1,616,866 21,047,233 Depreciation and amortization 1,725,442 7,932,320 286,366 184,498 437,911 10,566,537 Total operating expenses 6,497,686 20,360,940 2,266,392 433,975 2,054,777 31,613,770 Operating income (loss)1,160,415 (8,316,748) (1,016,797) 28,058 (83,598) (8,228,670) Nonoperating revenue (expenses) Interest income 28,818 269,050 - 47,474 590 345,932 Interest expense (330,104) (362,020) (1,048,473) (152,165) (78,156) (1,970,918) Gain(loss) on sale of assets - - (319,815) 58,958 - (260,857) Miscellaneous income (expense)50,000 25,743 - - - 75,743 Total nonoperating revenue (expenses)(251,286) (67,227) (1,368,288) (45,733) (77,566) (1,810,100) Net income (loss) before grants/contributions and transfers 909,129 (8,383,975) (2,385,085) (17,675) (161,164) (10,038,770) Grants/contributions received for capital assets - 6,093,242 - - 28,281 6,121,523 Transfers to other funds - (40,708) (26,097) - - (66,805) Transfers from other funds - - 8,839,586 - - 8,839,586 Change in net position 909,129 (2,331,441) 6,428,404 (17,675) (132,883) 4,855,534 Net position, beginning of year 40,714,491 116,463,823 1,383,262 4,570,030 2,441,301 165,572,907 Net position, end of year 41,623,620$ 114,132,382$ 7,811,666$ 4,552,355$ 2,308,418$ 170,428,441$ See accompanying notes to financial statements. Continued on next page II - 27 Exhibit 9 CITY OF BANGOR, MAINE Statement of Cash Flows - Proprietary FundsFor the Fiscal Year Ended June 30, 2013 Business-type Activities - Enterprise Funds Sewer Economic Nonmajor Total Utility Airport Bass Park Development Proprietary Proprietary Fund Fund Fund Fund Funds Funds Cash flows from operating activities Cash received from customers 7,228,621$ 12,178,036$ 1,246,630$ 438,698$ 1,973,253$ 23,065,238$ Cash paid to suppliers for goods and services (3,422,316) (7,160,373) (1,105,956) (269,673) (1,117,895) (13,076,213) Cash paid to employees for services (1,495,319) (6,432,925) (915,986) - (524,927) (9,369,157) Net cash provided by (used in) operating activities 2,310,986 (1,415,262) (775,312) 169,025 330,431 619,868 Cash flows from noncapital financing activities Interfund loans (repayments)221,995 2,501,325 99,319 49,400 (7,300) 2,864,739 Transfers in - - 833,925 - - 833,925 Transfers out - (40,708) (26,097) - - (66,805) Net cash provided by (used in) noncapital financing activities 221,995 2,460,617 907,147 49,400 (7,300) 3,631,859 Cash flows from capital and related financing activities Proceeds from general obligation bonds 700,000 4,300,000 53,800,000 485,000 266,015 59,551,015 Acquisition and construction of capital assets (584,322) (6,042,075) (62,927,311) - (48,903) (69,602,611) Premium received 50,000 - 2,721,352 - - 2,771,352 Payment to escrow agent - (1,150,000) - (500,000) (266,015) (1,916,015) Principal paid on general obligation bonds (2,612,730) (688,190) (102,847) (220,472) (226,528) (3,850,767) Interest paid on general obligation bonds (346,735) (365,514) (32,718) (159,892) (82,114) (986,973) Proceeds from sale of property - 25,743 - 70,000 - 95,743 Grant/contribution monies received for capital assets - 6,093,242 8,005,661 - - 14,098,903 Net cash provided by (used in) capital and related financing activities (2,793,787) 2,173,206 1,464,137 (325,364) (357,545) 160,647 Cash flows from investing activities Net sales (purchases) of investments - (218,745) - - - (218,745) Investment of unexpended bond proceeds 69,167 - - - - 69,167 Interest on investments 28,864 269,049 - 47,474 731 346,118 Loan repayments - 178,269 - 59,405 - 237,674 Net cash provided by (used in) investing activities 98,031 228,573 - 106,879 731 434,214 Net increase (decrease) in cash (162,775) 3,447,134 1,595,972 (60) (33,683) 4,846,588 Cash, beginning of year 1,065,249 483,497 7,930 95 815,513 2,372,284 Cash, end of year 902,474$ 3,930,631$ 1,603,902$ 35$ 781,830$ 7,218,872$ Schedule of noncash investing, capital and financing activities: During the year, the Airport Fund had an unrealized gain on investments in the amount of $514,278. During the year, the Parking Fund had a non cash contribution to capital assets in the amount of $28,281. See accompanying notes to financial statements. Continued from previous page II - 28 Exhibit 9 (con't) CITY OF BANGOR, MAINE Statement of Cash Flows - Proprietary Funds For the Fiscal Year Ended June 30, 2013 Business-type Activities - Enterprise Funds Sewer Economic Nonmajor Total Utility Airport Bas Park Development Proprietary Proprietary Fund Fund Fund Fund Funds Funds Reconciliation of operating income (loss) to net cash provided by (used in) operating activities Operating income (loss)1,160,415$ (8,316,748)$ (1,016,797)$ 28,058$ (83,598)$ (8,228,670)$ Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities Depreciation and amortization 1,725,442 7,932,320 286,366 184,498 437,911 10,566,537 Changes in assets and liabilities: (Increase) decrease in accounts receivable (483,966) 10,004 10,543 (23,335) 3,061 (483,693) (Increase) decrease in due from water district 76,885 - - - - 76,885 (Increase) decrease in inventories - (34,952) 18,039 - - (16,913) (Increase) decrease in prepaid items (584) (536) (3,694) - - (4,814) Increase (decrease) in accounts payable (195,066) (962,658) 60,047 (20,196) (29,060) (1,146,933) Increase (decrease) in unearned revenue - - (13,508) - (986) (14,494) Increase (decrease) in other liabilities 27,860 (42,692) (116,308) - 3,103 (128,037) Total adjustments 1,150,571 6,901,486 241,485 140,967 414,029 8,848,538 Net cash provided by (used in) operating activities 2,310,986$ (1,415,262)$ (775,312)$ 169,025$ 330,431$ 619,868$ See accompanying notes to financial statements. II - 29 Exhibit 10 CITY OF BANGOR, MAINE Statement of Fiduciary Net Position Fiduciary FundsJune 30, 2013 Agency Fund ASSETS Cash and cash equivalents $136,521 Total assets $136,521 LIABILITIES Amounts held for others $136,521 Total liabilities $136,521 See accompanying notes to financial statements. INDEX OF NOTES TO THE FINANCIAL STATEMENTS Note Page Summary of Significant Accounting Policies A Reporting Entity II – 30 B Government-wide and Fund Financial Statements II – 30 C Measurement Focus, Basis of Accounting and Basis of Presentation II – 31 D Assets, Liabilities, Deferred Inflows/Outflows and Equity II – 33 Stewardship, Compliance and Accountability A Budgetary Information II – 36 B Reconciliation of Budgetary Basis Statements II – 36 C Excess of Expenditures Over Appropriations II – 37 D Deficit Fund Equity II – 37 E Restricted Assets II – 37 Detailed Notes on All Funds A Deposits and Investments II – 38 B Property Tax II – 39 C Capital Assets II – 39 D Interfund Transactions II – 41 E Due From Other Governments II – 42 F Leases II – 42 G Other Assets II – 43 H Unearned Revenue II – 43 I Long-Term Debt II – 44 J Fund Balances II – 48 K Net Position II – 49 Other Information A Risk Management II – 49 B Tax Increment Financing Districts II – 50 C Contingent Liabilities II – 51 D Retirement II – 51 E Other Postemployment Benefits II – 53 F Landfill Closure and Postclosure Care Costs II – 55 G Subsequent Events II – 55 H Restatement II – 55 CITY OF BANGOR, MAINE Notes to the Financial Statements June 30, 2013 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The City of Bangor was incorporated under the laws of the State of Maine in 1834 and operates under a council/manager form of government. In evaluating how to define the reporting entity, for financial reporting purposes, management has considered all potential component units. The criteria used to determine which entities, agencies, commissions, boards and authorities are part of the City’s operations include how the budget is adopted, whether debt is secured by general obligation of the City, the City’s duty to cover any deficits that may occur, and supervision over the accounting functions. The Bangor Public Library is a nonprofit organization which operates under the control of a nine member Board of Trustees. The Bangor City Council appoints four members and the City of Bangor Charter appoints a fifth member. The Board has the power to hire officers, approve the budget and direct the operations of the Library. However, the Library is financially dependent upon the City in that the City provides approximately 61% of the operating financial support received by the Library during the year ended June 30, 2013. The City believes that the financial statements would be incomplete without the inclusion of the Library as a discretely presented component unit. Complete financial statements may be obtained from the Bangor Public Library, 145 Harlow Street, Bangor, ME 04401. The City of Bangor is a member of the Joint Venture of the Equity Charter Municipalities of Municipal Review Committee, Inc (Joint Venture). The Joint Venture is an organization that resulted from a contractual arrangement between certain member municipalities, Penobscot Energy Recovery Company (PERC) and Bangor Hydro Electric Company. It was formed to pool resources of the Equity Charter Municipalities for the long-term goal of handling the disposal of their present and projected volumes of non-hazardous municipal solid waste. As of December 31, 2012 (most recent data available) the City of Bangor’s share of the Joint Venture’s net assets was $5,900,476. Complete financial statements may be obtained from Municipal Review Committee, 395 State Street, Ellsworth, ME 04605. B. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the City. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support, as well as from legally separate component units for which the City is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function or segments are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. The City has elected not to allocate indirect costs among the programs, functions and segments. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported as general revenues. II - 30 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C. Measurement Focus, Basis of Accounting and Basis of Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 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 government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as certain compensated absences and claims and judgments, are recorded only when the payment is due. Those revenues susceptible to accrual are property taxes, interest, and charges for services. Other receipts and taxes become measurable and available when cash is received by the City and are recognized as revenue at that time. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. The City reports the following major governmental funds: The General Fund is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Community Development Block Grant Fund accounts for federal grants obtained and expended under the Housing and Community Development Act of 1974, as amended, for the development of viable urban communities. The Arena Fund accounts for the percentage of slot revenues received by the City from the operation of the casino. Said funds will be used to replace the Bangor Auditorium. The Capital Projects Fund accounts for the acquisition of capital assets or construction of major capital projects not being financed by proprietary or fiduciary funds. II - 31 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED The City reports the following major proprietary funds: The Sewer Utility fund accounts for the costs of construction and operation of the sewage treatment plant, the City sewer system, and sewer operation activities, and is self-supported through sewer user fees. The Airport Fund accounts for the operation of Bangor International Airport. The principal sources of revenues are landing fees and the sale of aviation fuel. Other revenue sources include lease payments for the use of terminal space and non-aviation industrial buildings. The Bass Park Fund accounts for the operation of the Cross Insurance Center, a harness racing track and the Bangor State Fair. Principal sources of revenue are admissions, concession sales and rentals. The fund is named after the Bass family, which bequeathed the property to the City for recreational purposes. The Economic Development Fund accounts for the operation and development of properties acquired by the City. Its purpose is to promote economic growth within the City. The principal source of revenue is rental income. Additionally, the City reports the following fund type: Fiduciary funds account for assets held by the City in a trustee capacity or as an agent on behalf of others. The City’s fiduciary funds include the following fund type: Agency funds account for assets the City holds for others in an agency capacity. They are custodial in nature and do not present results of operations of the City or have a measurement focus. Agency funds are accounted for using the accrual basis of accounting. The City serves as an agent for the Bangor Area Stormwater Group and various School Activity funds. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the City’s public services function and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s proprietary fund are charges to customers for sales and services. Operating expenses include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. II - 32 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED D. Assets, Liabilities, Deferred Inflows/Outflows and Equity 1. Deposits and Investments Cash includes amounts in demand deposits as well as short-term investments with a maturity date within three months of the date acquired by the City. State statutes authorize the City to invest in obligations of the U. S. Treasury, commercial paper, corporate bonds and repurchase agreements. City policy prohibits the investment in so-called “derivative instruments”. Investments are reported at fair value. Income earned from the investment of pooled cash is allocated to various funds based upon the average cash balance allocated to the fund. 2. Interfund Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “interfund loans” (i.e., current portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of interfund loans). Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances”. Advances between funds are offset by nonspendable fund balance accounts in applicable governmental funds to indicate that they are not available for appropriation and are not expendable, available financial resources. 3. Inventories and Prepaid Items Inventories consist of expendable supplies held for consumption and are valued at cost using the weighted average method. The cost of inventories are recognized as expenditures/expenses when consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. 4. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, sewer mains and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $10,000 for machinery/equipment/vehicles, $25,000 for land/buildings and improvements and $100,000 for infrastructure and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal repairs and maintenance that do not add to the value of the asset or materially extend assets lives are not capitalized. II - 33 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. Property, plant, and equipment of the primary government is depreciated using the straight-line method over the assets' estimated useful lives. The range of useful lives used to compute depreciation are as follows: Buildings 25 – 50 years Equipment 5 – 20 years Infrastructure 10 – 50 years Aircraft Operational 5 – 40 years Parking Structures 10 – 20 years 5. Deferred Inflows/Outflows of Resources In addition to assets and liabilities, the statement of financial position will sometimes report a separate section for deferred outflows or inflows, respectively, of resources. Deferred outflows of resources represent consumption of net position that applies to a future period(s) and therefore will not be recognized as an expense/expenditure until then. The City has no items that qualify as deferred outflows of resources. Deferred inflows of resources represent an acquisition of net position that applies to future period(s) and therefore will not be recognized as revenue until that time. Due to differences in the modified accrual basis of accounting, the City has one type of deferred inflow of resources, unavailable revenue. There are three sources of unavailable revenue; property taxes, community development loans and special assessments. These amounts are considered unavailable and recognized as an inflow of resources (revenue) in the period that the amounts become available. 6. Compensated Absences Accumulated vacation or compensatory time or vested sick leave of governmental funds that is expected to be liquidated with expendable available resources is reported as an expenditure in respective fund financial statements only if the liability has matured, for example, as a result of employee resignations and retirements. All accumulated leave, including that which is not expected to be liquidated with expendable available financial resources, is reported in the government-wide financial statements. Accumulated leave of Enterprise Funds is recorded as an expense and liability of the respective fund as the benefits accrue to employees. No liability is recorded for non-accumulating rights to receive sick pay benefits. 7. Long-term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight- line method. Bonds payable are reported net of the applicable bond premium or discount. II - 34 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED In the fund financial statements, governmental fund types recognize bond premiums and discounts during the current period. The face amount of debt is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 8. Fund Equity In the fund financial statements, governmental funds report fund balances in one of five possible classifications. Classification is based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which the funds can be spent. The categories are as follows; Nonspendable fund balance cannot be spent. Restricted fund balances are subject to externally enforceable legal restrictions. Committed fund balances are subject to limitations the City Council has imposed, that are binding unless removed or modified by the passage of a Council Order. Assigned fund balances reflect the intended use of the resources. The City Council adopted a comprehensive fund balance policy which authorized itself and the Finance Director and City Manager, within defined limits, with the authority to assign fund balances. Unassigned fund balances are resources which have not been classified in any other category. Only the General Fund can report a positive unassigned fund balance amount. Should there be multiple sources of funding available for a particular purpose, it is the City’s policy to expend currently budgeted resources first, then use other sources in the order of restricted, then committed, then assigned, then unassigned amounts. 9. Allowance for Uncollectible Accounts and Loans Allowances for uncollectible accounts are maintained for all types of receivables, which historically experience uncollectible accounts. Allowances for uncollectible loans are established when the City determines its ability to collect the outstanding loan balance has been impaired. 10. Use of Estimates Preparation of the City’s financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent items 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. II - 35 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued Deficiency of revenues over expenditures and other financing sources and uses (Budget)(979,615)$ Activity in assigned fund balance 157,987 2013 encumbrances 770,028 2012 encumbrances paid (1,538,627) 2012 encumbrances lapsed (1,881) Deficiency of revenues and other financing sources over expenditures and other uses (GAAP)(1,592,108)$ STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary Information Budgets are prepared on a modified accrual basis of accounting, with the exception of depreciation within the enterprise funds. Budgets for the General Fund and enterprise funds are formally adopted each year through the passage of an appropriation resolve. Budgets for special revenue and capital projects funds have adopted project-length budgets. Unencumbered appropriations lapse at fiscal year end. Encumbrances represent commitments related to unperformed contracts for goods or services. Encumbrance accounting is employed in governmental funds. Encumbrances (i.e., purchase orders, contracts, and other commitments) outstanding at year end are reported in assigned fund balance and do not constitute expenditures or liabilities because the commitments have not been honored in the current year. For budgetary purposes, encumbrances are treated as expenditures within both governmental and proprietary fund types. On or before the second Monday in April, the City Manager submits to the City Council a proposed operating budget for the ensuing fiscal year. The Council holds public meetings and a final budget must be prepared and adopted no later than June 30th. Should the Council fail to adopt an operating budget on or before June 30th, by Charter, the budget proposed by the City Manager becomes effective. The budget is adopted at the department level through the passage of appropriation resolves. The City Manager may make transfers of appropriations within a department. Transfers between departments or additional appropriations require the approval of the City Council. The City Council made several supplementary budgetary appropriations throughout the year, none of which were material. B. Reconciliation of Budgetary Basis Statements The following schedule reconciles the General Fund amounts on the Statement of Revenues, Expenditures, and Changes in Fund Balance—Budget and Actual—Budgetary Basis to the amounts on the Statement of Revenues, Expenditures, and Changes in Fund Balances, Governmental Funds: II - 36 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued Excess (deficiency) of revenues over expenditures and encumbrances:Sewer (1,566,059)$ Airport (8,678,455) Park Woods (57,040) Parking (257,459) Bass Park (429,926) Municipal Golf Course (124,913) Economic Development (193,029) (11,306,881) Nonoperating revenues classification (1,720,351) Investments at market value 216,372 Capital outlay 48,903 Adjustments for accrual basis (1,272,147) Principal payments 3,850,767 * 2012 encumbrances (139,359) Nonoperating expenses classification 2,094,026 Operating loss (8,228,670)$ * the budgetary basis excludes $957,000 of principal payments to refund debt. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY, CONTINUED The following schedule reconciles the amounts on the enterprise funds’ Schedules of Revenues, Expenditures and Encumbrances—Budget and Actual—Budgetary Basis to the amount on the Combined Statement of Revenues, Expenses, and Changes in Net Position: C. Excess of Expenditures Over Appropriations The following General Fund departments were over-expended by the indicated dollar amounts; Executive $346,054, Assessing $10,605, Legal $8,256, Insurance $52,896, Parks and Recreation $196,147, Other Agencies $124, and Other Appropriations $255,573. These over-expenditures were funded by receipt of revenues in excess of appropriations and under-expenditures within other General Fund departments. The Park Woods and Bass Park Funds were over-expended by $15,367 and $145,780, respectively, due to increased supplies and contractual services expenses. D. Deficit Fund Equity The Grant Fund has a deficit equity of $5,736 which was funded in the subsequent year. E. Restricted Assets Donations received by the City whose use is limited are placed in the appropriate Special Revenue fund, depending upon whether or not the principal can be expended. All changes in market value are added to the earnings, which is allowable by State Statute. As these amounts are invested in a note receivable, there was no change in market value for fiscal year 2013. II - 37 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued Investment types Fair Value Not Applicable <1 1-5 6-10 Mutual Funds 8,136,297$ 8,136,297$ -$ -$ -$ US Treasuries 6,413,885 - 1,527,210 4,379,720 506,955 Common Stock 619,316 619,316 - - - Certificate of Deposit 50,000 - 50,000 - - Totals 15,219,498$ 8,755,613$ 1,577,210$ 4,379,720$ 506,955$ Maturity (years) DETAILED NOTES ON ALL FUNDS A. Deposits and Investments The City maintains a cash pool that is available for use by all funds. In addition, cash and investments are separately held by several of the funds. Custodial Credit Risk - Deposits Custodial credit risk is the risk that in the event of a bank failure, the City’s deposits may not be returned. The City does not have a policy with respect to custodial credit risk for deposit accounts. The City maintained certain accounts whose balances were fully covered, for other accounts in which the balance exceeded the $250,000 provided by the Federal Deposit Insurance Corporation (FDIC), pledged collateral securities were held in the City’s name. As of June 30, 2013, $0 of the City’s bank balance of $27,596,354 was exposed to custodial credit risk because it was uninsured and uncollateralized. At June 30, 2013, the City had the following investments and maturities: Interest Rate Risk The City’s investment policy requires that, to the extent possible, the City will attempt to match investments with anticipated cash requirements. Unless matched to a specific cash flow, the City is not allowed to directly invest in securities maturing more than three years from the date of purchase. Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Maine statutes authorize the City to invest in obligations of the U.S. Treasury and U.S agencies, repurchase agreements and certain corporate stocks and bonds. In accordance with City policy, investments in certificates of deposits must be F.D.I.C. insured and any excess of the amounts covered by insurance must be collateralized in accordance with Title 30-A, Section 5706 of the Maine Revised Statutes; investments in mutual funds must be “no load” (which means no commission or fee shall be charged on the purchase or sale), have a constant daily net asset value of $1.00 per share and limit assets of the fund to U.S. Treasury Obligations or Federal Instrumentality or Agency Securities; the total investments in stock can not exceed 10% of the portfolio value and no more than 5% can be invested in any one company. Custodial Credit Risk - Investments For investments, custodial credit risk is the risk that, in the event of failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of the outside party. As of June 30, 2013, the City had no investments that were subject to custodial risk. The City’s investment policy states that all security transactions, including collateral for repurchase agreements, entered into by the City shall be conducted on a “delivery vs. payment” basis. II - 38 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued Balance Balance 6/30/2012*Increases Decreases June 30, 2013Governmental activities: Capital assets, not being depreciated: Land 5,040,548$ 51,820$ -$ 5,092,368$ Construction in process 103,198 1,134,194 770,261 467,131 Total capital assets not being depreciated 5,143,746 1,186,014 770,261 5,559,499 Capital assets, being depreciated: Land improvements 9,693,421 1,616,510 - 11,309,931 Buildings and improvements 67,204,043 1,142,821 - 68,346,864 Machinery and equipment 11,127,279 213,854 30,488 11,310,645 Vehicles 16,915,962 1,346,794 889,752 17,373,004 Infrastructure 21,963,233 770,261 - 22,733,494 Total capital assets being depreciated 126,903,938 5,090,240 920,240 131,073,938 Less accumulated depreciation for: Land improvements (3,328,660) (460,713) - (3,789,373) Buildings and improvements (24,212,088) (1,378,544) - (25,590,632) Machinery and equipment (8,451,011) (632,123) (27,017) (9,056,117) Vehicles (9,998,815) (1,117,134) (760,574) (10,355,375) Infrastructure (10,791,822) (408,149) - (11,199,971) Total accumulated depreciation (56,782,396) (3,996,663) (787,591) (59,991,468) Total capital assets being depreciated, net 70,121,542 1,093,577 132,649 71,082,470 Governmental activities capital assets, net 75,265,288$ 2,279,591$ 902,910$ 76,641,969$ * - restated to reflect moving construction in process expenses from governmental activities to the Bass Park Fund. DETAILED NOTES ON ALL FUNDS, CONTINUED Securities will be held by a third party custodian, or trust department, designated by the Treasurer and evidenced by safekeeping receipts. Concentration of Credit Risk The City’s investment policy states that the City will diversify its investments by security type and institution. No more than 40% of the City’s total investment portfolio will be invested in any combination of commercial paper and time certificates of deposit. B. Property Tax Property taxes for the current year were levied July 11, 2012, on the assessed value listed as of the prior April 1 for all real and personal property located in the City. Assessed values are periodically established by the City's Assessor at 100% of assumed market value. Taxes were due in two installments: September 17, 2012 and March 15, 2013. Interest was charged at 7.00% on all taxes unpaid as of the due date. Property taxes levied during the year were recorded as receivables at the time the levy was made. The receivables collected during the year and in the first sixty days following the end of the fiscal year have been recorded as revenues. The remaining receivables have been recorded as deferred inflows. Tax liens are placed on real property within twelve months following the tax commitment date if taxes are delinquent. The City has the authority to foreclose on property eighteen months after the filing of the lien if the tax liens and associated costs remain unpaid. C. Capital Assets Capital asset activity for the year ended June 30, 2013 was as follows: II - 39 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued Balance Balance 6/30/2012*Increases Decreases June 30, 2013 Business-type activities:Capital assets, not being depreciated: Land 3,977,038$ -$ 11,042$ 3,965,996$ Construction in process 38,877,408 34,266,582 66,814,044 6,329,946 Total capital assets not being depreciated 42,854,446 34,266,582 66,825,086 10,295,942 Capital assets, being depreciated: Land improvements 3,071,032 100,236 - 3,171,268 Buildings and improvements 44,530,694 62,207,316 4,461,609 102,276,401 Machinery and equipment 6,134,075 1,874,097 144,428 7,863,744 Infrastructure 57,939,790 607,148 - 58,546,938 Airport operational assets 256,005,417 2,707,747 - 258,713,164 Parking structures 11,312,409 77,184 72,424 11,317,169 Total capital assets being depreciated 378,993,417 67,573,728 4,678,461 441,888,684 Less accumulated depreciation for:Land improvements (1,694,324) (71,138) - (1,765,462) Buildings and improvements (30,444,919) (1,477,386) (4,023,551) (27,898,754) Machinery and equipment (4,742,280) (228,350) (144,428) (4,826,202) Infrastructure (11,734,001) (589,266) - (12,323,267) Airport operational assets (152,458,629) (7,932,320) - (160,390,949) Parking structures (8,162,462) (268,077) (72,424) (8,358,115) Total accumulated depreciation (209,236,615) (10,566,537) (4,240,403) (215,562,749) Total capital assets being depreciated, net 169,756,802 57,007,191 438,058 226,325,935 Business-type activities capital assets, net 212,611,248$ 91,273,773$ 67,263,144$ 236,621,877$ * - restated to reflect moving construction in process expenses from governmental activities to the Bass Park Fund. Governmental Activities: General government 1,432,620$ Public safety 870,805 Health, community services and recreation 102,797 Public building and services 542,071 Education 1,048,370 Total depreciation expense - governmental activities 3,996,663$ Business-type activities: Sewer Utility Fund 1,725,442$ Airport Fund 7,932,320 Park Woods 89,123 Parking Fund 268,077 Bass Park Fund 286,366 Municipal Golf Course 80,711 Economic Development Fund 184,498 Total depreciation expense - business-type activities 10,566,537$ DETAILED NOTES ON ALL FUNDS, CONTINUED Depreciation expense was charged to functions/programs of the primary government as follows: II - 40 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued Receivable Payable General Fund 6,415,524$ -$ Grant Fund - 227,830 Airport Fund - 2,501,325 Sewer Fund - 221,995 Park Woods Fund - 371,000 Bass Park Fund - 2,412,574 Economic Development - 680,800 6,415,524$ 6,415,524$ Transfers to Transfers from General Fund 1,334,009$ 127,890$ Arena Fund 8,103,026 26,097 Grant Fund - 29,014 Dedicated Revenue Funds 128,532 - Other Nonmajor Special Revenue Funds 57,400 6,300 Capital Projects Fund 113,825 817,758 Other Nonmajor Permanent Funds 46,215 3,167 Bass Park Fund 26,097 8,839,586 Airport Fund 40,708 - 9,849,812$ 9,849,812$ DETAILED NOTES ON ALL FUNDS, CONTINUED Construction commitments The government has active construction projects as of June 30, 2013. The projects include parking area renovations, reconstruction of runways, terminal redesign and renovations, and continuation of the combined sewer overflow program. D. Interfund Transactions Individual fund interfund receivable and payable transactions are described in the Summary of Significant Accounting Policies Note D. 2. As of June 30, 2013 the balances were as follows: Individual fund transfers to and from other funds for the fiscal year ended June 30, 2013 are comprised primarily of transfers from fund balances to fund capital projects and to provide operating subsidies to certain proprietary funds. II - 41 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued Federal State of Government Maine Other Total General Fund 1,099,668$ 1,022,118$ 503,969$ 2,625,755$ Community Development 293,802 - - 293,802 Nonmajor Special Revenue Funds 163,078 25,871 - 188,949 Capital Projects Fund 375 357,299 - 357,674 Proprietary Funds 437,391 260,702 - 698,093 Fiscal year ending Economic June 30,Airport Development 2014 1,367,320$ 381,334$ 2015 769,306 384,845 2016 449,913 336,266 2017 377,094 324,840 2018 340,326 296,404 Subsequent to 2018 3,430,458 2,160,905 6,734,417$ 3,884,594$ Economic Airport Development Land 565,532$ 2,736,769$ Buildings 22,886,327 4,318,516 Less accumulated depreciation (14,607,524) (1,321,248) Total 8,844,335$ 5,734,037$ DETAILED NOTES ON ALL FUNDS, CONTINUED E. Due From Other Governments Due from other governments is comprised of the following amounts at June 30, 2013: Amounts due from Federal Government are comprised of operating and capital grants for all fund types. Of the General Fund’s $1,022,118 due from State of Maine, $645,354 represents school grant and State agency billings, and $188,502 represents general assistance claims. Amounts owed to the Capital Projects and Propriety funds by the State of Maine are for capital grant purposes. Amounts due from other communities for tuition reimbursement to Bangor account for $475,154 of the Due from Other in the General Fund. F. Leases Operating Leases The Airport and Economic Development Proprietary Funds are the lessors of various buildings and land parcels under operating leases expiring in various years through 2040 and 2035, respectively. Minimum future rentals to be received on noncancelable leases as of June 30, 2013 are: Minimum future rentals do not include contingent rentals, which may be received as stipulated in the lease contracts. The Airport received $1,768,223 in contingent rentals in fiscal year 2013. The carrying amounts of the leased assets are as follows: II - 42 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued Proprietary Fund Due from bond trustee 225,600$ Deposits 20,000 Total 245,600$ Fiscal Year ending June 30, 2014 95,572$ 2015 95,572 2016 95,572 2017 95,575 Total minimum lease payments 382,291 Less: amount representing interest (21,222) Present value of future minimum lease payments 361,069$ Machinery and equipment 514,581$ Less accumulated depreciation (51,458) Carrying value 463,123$ DETAILED NOTES ON ALL FUNDS, CONTINUED Capital Leases The City entered into several leases for financing the acquisition of heavy equipment with a total down payment of $58,000. These lease agreements qualify as capital leases for accounting purposes whereas they contain a bargain purchase option and, therefore, have been recorded at the present value of the future minimum lease payments. The following is an analysis of equipment leased under capital leases as of June 30, 2013: The following is a schedule of the future minimum lease payments under these capital leases, and the present value of the net minimum lease payments at June 30, 2013: G. Other Assets Other assets are comprised of the following: H. Unearned Revenue General Fund, Community Development Block Grant and Capital Projects Fund unearned revenues consist of $45,161, $3,242 and $48,168 in advance deposits, respectively. II - 43 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued Bonds and notes payable at June 30, 2012 109,382,148$ Add: principal additions 69,930,000 Less: principal repayments 34,092,358 Bonds and notes payable at June 30, 2013 145,219,790$ DETAILED NOTES ON ALL FUNDS, CONTINUED I. Long-term Debt General Obligation Bonds The City issues general obligation bonds to provide funds for the acquisition and construction of major capital additions. General obligation bonds have been issued for both governmental and business-type activities. These bonds are reported in the proprietary funds if they are expected to be repaid from proprietary fund revenues. In addition, general obligation bonds have been issued to refund general obligation bonds and extinguish an existing retirement liability. General obligation bonds are direct obligations and pledge the full faith and credit of the government. These bonds generally are issued as 20-year serial bonds. The original amount of general obligation bonds issued is $220,780,948. The following is a summary of general obligation bond and note transactions of the City for the fiscal year ended June 30, 2013: II - 44 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued Fiscal year Interest Business-type Total Long-term debt of maturity rate City School Activities June 30, 2013 Combined sewer overflow 2014 2.46%- - 93,200 93,200 Combined sewer overflow 2014 2.45%- - 99,300 99,300 Combined sewer overflow 2017 3.52%- - 728,552 728,552 Tax increment financing note*2016 4.50%293,580 - - 293,580 Combined sewer overflow 2018 3.03%- - 724,081 724,081 Tax increment financing note*2018 4.50%101,704 - - 101,704 Maine Business Enterprise Park 2018 5.00%- - 90,273 90,273 Public improvements note*2020 4.50%413,255 - - 413,255 Pension obligation bonds 2026 3.06% - 6.45%22,567,322 1,439,974 4,827,704 28,835,000 Refunding bonds 2024 3.06% - 3.47%24,902 - 98 25,000 Combined sewer overflow 2023 1.94%- - 1,605,779 1,605,779 Tax increment financing note*2015 2.50% - 4.00%34,530 - - 34,530 Briggs Building note 2023 4.50%- - 820,615 820,615 Refunding/public improvements - 2004 2024 2.50% - 4.80%420,000 - - 420,000 Combined sewer overflow 2025 1.41%- - 1,710,284 1,710,284 Public improvements - 2005 2025 3.50% - 4.30%310,000 - 100,000 410,000 Airport building sprinklers 2025 3.25% - 5.00%- - 230,000 230,000 Chancellor's property note 2026 5.00%- - 1,695,969 1,695,969 Public improvements/refunding 2026 4.00% - 4.20%1,188,625 - 121,375 1,310,000 Combined sewer overflow 2027 1.64%- - 1,466,717 1,466,717 Public improvements - 2007 2027 4.00%2,355,000 - - 2,355,000 Combined sewer overflow 2028 1.81%- - 1,565,129 1,565,129 Public improvements - 2009 2029 2.00% - 4.375%2,480,000 - - 2,480,000 ARRA - CWSRF 2029 0.00%- - 775,126 775,126 ARRA - CWSRF 2030 0.00%- - 436,696 436,696 Public improvements/refunding 2020 2.00% - 3.25%3,272,582 5,790,846 986,572 10,050,000 Public improvements/refunding 2021 2.00% - 3.25%1,623,278 - 3,541,722 5,165,000 Qualified school construction bond 2028 4.65%- 5,610,000 - 5,610,000 Refunding/public improvements 2022 2.00% - 2.25%2,375,839 2,047,145 1,322,016 5,745,000 Arena 2043 3.25% - 5.00%- - 53,800,000 53,800,000 Qualified school construction bond 2035 4.05%- 2,800,000 - 2,800,000 Refunding/public improvements 2032 2.00% - 4.00%7,578,985 - 1,451,015 9,030,000 Refunding/airport improvements 2033 .50% - 4.25%- - 4,300,000 4,300,000 Total bonds and notes payable 45,039,602$ 17,687,965$ 82,492,223$ 145,219,790$ * Notes aggregating $843,069 are held by the City's Airport Fund at fixed, taxable market rates of interest. Governmental Activities Fiscal year ending June 30,Principal Interest Principal Interest 2014 4,577,591$ 2,389,776$ 2,356,701$ 2,917,522$ 2015 4,646,781 2,267,005 3,357,480 2,853,468 2016 4,762,687 2,099,706 3,468,464 2,743,863 2017 4,729,002 1,937,958 3,580,825 2,627,154 2018 4,668,808 1,746,155 3,517,872 2,510,355 2019-2023 18,932,137 6,047,681 16,473,360 10,625,755 2024-2028 11,960,561 1,434,843 13,542,700 7,452,563 2029-2033 5,730,000 6,166 10,984,821 5,403,722 2034-2038 2,720,000 - 11,615,000 3,573,175 2039-2043 - - 13,595,000 1,375,225 Total 62,727,567$ 17,929,290$ 82,492,223$ 42,082,802$ Governmental Activities Business-type Activities DETAILED NOTES ON ALL FUNDS, CONTINUED Bonds and notes payable at June 30, 2013 are comprised of the following: Annual debt service requirements to maturity for general obligation bonds and notes payable are as follows: II - 45 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued DETAILED NOTES ON ALL FUNDS, CONTINUED Legal Debt Margin The City is subject to the laws of the State of Maine, which limits the amount of long-term debt to 15% of the state’s assessed valuation of the City. At June 30, 2013, the statutory limit for the City was $369,300,000. The City’s outstanding long-term debt of $145,219,790 at June 30, 2013 was within the statutory limit. Refunding The City issued $4,585,000 and $1,255,000 in public improvement and airport improvement (federally taxable) general obligation bonds, respectively, with interest rates ranging from .50% - 4.25%. The proceeds were used to advance refund $5,815,000 portions of outstanding 2003 Series A, 2004, 2005 Series A and B, and 2006 general obligation bonds which had interest rates ranging from 3.90% - 5.00%. The net proceeds were deposited in an irrevocable trust with an escrow agent to provide funds for the future debt service payments on the refunded bonds. As a result, the portions of the 2003 Series A, 2004, 2005 Series A and B, and 2006 general obligations bonds are considered defeased and the liability for those bonds has been removed from the statement of net position. The City advance refunded the general obligation bonds to reduce its total debt service payments over 13 years by $679,840 and to obtain an economic gain (difference between the present value of the debt service payments on the old and new debt) of $625,903. Authorized and Unissued On November 26, 2007, the City Council authorized the issuance of up to $600,000 in general obligation bonds for the purpose of renovating and rehabilitating property located at 103 Texas Avenue. As of June 30, 2013, $155,000 remains authorized and unissued. The City expects to issue the debt within the next twenty four months. On August 8, 2011, the City Council authorized the issuance of up to $2,000,000 in general obligation bonds to provide funding for remediation of the Penobscot River. As of June 30, 2013, no debt for this purpose had been issued. The City will continue to monitor when and if the debt will be issued. Overlapping Debt In addition to the bonds and notes payable, the City may be contingently responsible for a proportionate share of overlapping debt. Overlapping debt is debt issued by a separate entity that shares the same tax base as the City of Bangor. As of June 30, 2013, Penobscot County had $2,750,000 debt outstanding. The City of Bangor represents 23.68% of the overall county value, therefore, the City had $651,200 in overlapping debt obligations as of June 30, 2013. II - 46 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued Balance Balance Due within June 30, 2012 Additions Reductions June 30, 2013 one year Governmental activities: General obligation debt 80,674,158$ 10,378,985$ 28,325,576$ 62,727,567$ 4,577,591$ Accrued compensated absences*2,407,571 1,547,263 1,693,774 2,261,060 1,423,922 Capital leases - 456,581 95,572 361,009 83,457 Bond premium - 639,850 - 639,850 4,187 Net OPEB obligation*1,981,987 423,779 178,803 2,226,963 - Long-term obligation for self insurance 1,982,446 766,617 766,145 1,982,918 607,890 Governmental activities long-term liabilities 87,046,162$ 14,213,075$ 31,059,870$ 70,199,367$ 6,697,047$ Business-type activities: General obligation debt 28,707,990$ 59,551,015$ 5,766,782$ 82,492,223$ 2,356,701$ Accrued compensated absences*632,058 368,878 465,674 535,262 - Net OPEB obligation*628,209 134,072 95,315 666,966 - Long-term obligation for self insurance 447,400 - 92,400 355,000 160,665 Other 511,417 2,721,539 - 3,232,956 - Business-type activities long-term liabilities 30,927,074$ 62,775,504$ 6,420,171$ 87,282,407$ 2,517,366$ DETAILED NOTES ON ALL FUNDS, CONTINUED Changes in Long-term Liabilities Long-term liability activity for the year ended June 30, 2013, was as follows: * - The liquidation of compensated absences and net OPEB obligation is fully covered within the General Fund and individual propriety funds. II - 47 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued As of June 30, 2013, fund balances components consisted of the following: Nonspendable Restricted Committed Assigned General Fund: Advances to other funds 1,900,500$ -$ -$ -$ Inventory and prepaid items 873,714 - - - PEG capital support - 23,741 - - Arbitrage - 264,778 - - School Department Regular - (309,293) - - Adult education - 64,291 - - General evening - 33,309 - - Reading assessment - 247 - - Special revenue - 23,122 - - School lunch - 179,746 - - Trust and agency - 195,449 - - Cultural Commission/Econ Develop - - 10,583 - Subsequent year expenditures - - - 777,788 Pooled equipment reserve - - - 34,367 Bus equipment reserve - - - 46,780 Fire equipment reserve - - - 107,695 Self insurance reserve - - - 1,896,452 Improvement reserve - - - 599,322 Cameron Stadium reserve - - - 355,217 Demolition reserve - - - 52,422 Benefit reserve - - - 308,179 Parks & Recreation reserve - - - 15,193 Subtotal 2,774,214 475,390 10,583 4,193,415 Community Development Block Grant - 252,479 - - Arena Fund - - 2,761,541 - Capital Projects Fund: Capital project funds - - - 4,426,655 Encumbrances - - - 127,712 Subtotal - - - 4,554,367 Other Governmental Funds: Nonexpendable trust principal 574,492 - - - Nonmajor Special Revenue Funds - 1,730,231 - - Nonmajor Permanent Funds - 466,951 - - Subtotal 574,492 2,197,182 - - Total 3,348,706$ 2,925,051$ 2,772,124$ 8,747,782$ DETAILED NOTES ON ALL FUNDS, CONTINUED J. Fund Balances II - 48 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued Governmental Business-type Capital assets 136,633,437$ 452,184,626$ Accumulated depreciation (59,991,468) (215,562,749) Bonds payable (62,727,567) (82,492,223) Capital leases (361,009) - Non capital related bonds payable 36,469,520 11,193,530 Unspent bond proceeds 4,517,375 225,600 Net invested in capital assets 54,540,288$ 165,548,784$ DETAILED NOTES ON ALL FUNDS, CONTINUED Encumbrances at year end were $38,582 for municipal General Fund, $731,446 for school General Fund, $354,540 for Arena Fund, $127,712 for Capital Projects Fund, $1,149,514 for Airport Fund, and $353,167 for Sewer Utility Fund. K. Net Position Net position represents the difference between assets and liabilities. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balance of bonds and capital leases payable and adding back any unspent proceeds. Net position is reported as restricted when there are limitations imposed on their use either through the enabling legislations adopted by the City of through external restrictions imposed by creditors, grantors or laws or regulations of other governments. The City’s net investment in capital assets was calculated as follows at June 30, 2013: OTHER INFORMATION A. Risk Management The City is exposed to various risks of loss related to torts, theft of, damage to and destruction of assets, errors and omissions, injuries to employees, and natural disasters for which the City either carries commercial insurance or is self–insured. The City currently reports all of its risk management activities in the General and Proprietary Funds. Claims expenditure, liabilities and reserves are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. These losses include an estimate of claims that have been incurred but not reported. The City purchases coverage under a number of commercially available insurance policies such as; commercial general liability, auto, property damage and crime and dishonesty, each with limits and deductibles deemed prudent given the risks, cost of coverage and the City’s ability to fund certain types of losses. For those claims covered by commercial insurance, the amount of settlements has not exceeded the coverage for the years ended June 30, 2013, 2012 and 2011. The City is self-insured for its workers’ compensation liability. Reserves are actuarially determined each year to assure funding adequacy. In addition, the City purchases excess workers’ compensation insurance to limit its financial risk. At June 30, 2013, the amount of self-insurance liabilities was $2,327,918. This liability is the City’s best estimate based on available information. II - 49 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued Workers'All other self- Compensation insured risks Total Unpaid claims as of July 1, 2011 1,958,405$ 215,575$ 2,173,980$ Incurred claims 475,912 - 475,912 Payments (581,099) (17,798) (598,897) Changes in estimates and other adjustments 264,108 114,743 378,851 Unpaid claims as of July 1, 2012 2,117,326 312,520 2,429,846 Incurred claims 94,250 - 94,250 Payments (842,868) - (842,868) Changes in estimates and other adjustments 656,218 472 656,690 Unpaid claims as of July 1, 2013 2,024,926$ 312,992$ 2,337,918$ OTHER INFORMATION, CONTINUED Changes in the reported liabilities since July 1, 2011 resulted from the following: B. Tax Increment Financing Districts The City has established tax increment financing districts, all of which dedicate a portion of the incremental increase in real estate and/or personal property tax revenues over staggered twenty year periods for the following purposes: B.I.A. Municipal Development District No. 1 – Partially financed $27.5 million dollars of capital expenditures at manufacturing facilities leased by General Electric Company. Main Street Municipal Development District – Assisted Penobscot Development Limited Liability Company in financing the extraordinary costs of acquisition and environmental remediation of the former Gasworks site on Main Street, ultimately to provide land area necessary for the construction of a 54,000 square foot supermarket in a Community Development project area. Pickering Square Municipal Development District – Assisted Realty Resources Chartered in a major redevelopment project that converted the former Freese’s department store building into affordable housing units. Hammond Street Courtyard Municipal Development District - Assisted Hammond Street Courtyard LP with the rehabilitation and reuse of the former Bangor Furniture store and office buildings. Downtown Municipal Development District – To partially finance in excess of $70 million dollars of infrastructure improvements within the boundaries of the district. Penjajawoc Marsh/Mall Area Traffic Infrastructure District – To partially finance traffic infrastructure improvements in the Bangor Mall area and environmental improvement projects in the Penjajawoc Marsh/Bangor Mall area. II - 50 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued OTHER INFORMATION, CONTINUED C. Contingent Liabilities In 2002, the City filed suit against Citizens Communication Company (Citizens), a potentially responsible party to force cleanup of contamination of the Penobscot River bottom due to the inability to reach settlement. In July 2007, the City reached a settlement agreement with Citizens, whereby the City received $7.625 million to be held in escrow and applied to the cost of remediation. A Consent Decree has been negotiated with the Department of Environmental Protection (DEP) for the remediation the first phase of which has been completed. The City continues to work with State and Federal agencies to negotiate an agreement for the remainder of the remediation. In 1991, the City entered into a consent decree with the Federal Environmental Protection Agency (EPA) in regards to wastewater discharge. The City complied with and completed the projects and plans as originally identified in the 1991 decree. The EPA has indicated that the City will now need to undertake additional projects related to long term control and asset management plans, and a capacity management operations and maintenance program. The City has not yet entered into any agreement with the EPA, but has begun work on the areas identified to date by the EPA. The City is a party to various other lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the City’s counsel that resolution of these matters will not have a material adverse effect on the financial condition of the City. D. Retirement The City of Bangor provides retirement pensions for its employees through a number of vehicles, including a defined contribution plan, defined benefit pension plan and social security. Defined Contribution Plan Description of the Plan - The City provides pension benefits for certain employees through a 401(a) defined contribution plan administered by ICMA/RC. In addition, certain full-time employees are covered through both a 401 (a) and 457 Deferred Compensation Plans (DCP) also administered by ICMA/RC. In a DCP, benefits depend solely on amounts contributed to the plan plus investment earnings. Covered employees are eligible to participate and are fully vested from the date of employment. The authority to establish and amend plan provisions or requirements rests with the City. Funding Policy – Plan members not covered by employment contracts are required to contribute 6.5% of their annual covered salary and the City is required to contribute either 8% or 10% depending upon the employee’s classification. For fiscal year 2013 covered payroll was $16,022,388 and City contributions were $1,370,840. For those plan members that have employment contracts, the City contributes at various rates from 10% - 15% of annual earnings. The covered payroll and City contributions for those employees with employment contracts were $471,245 and $56,153 respectively, in fiscal year 2013. II - 51 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued OTHER INFORMATION, CONTINUED Defined Benefit Pension Plan Description of the Plan – The City contributes to the Maine Public Employees Retirement consolidated plan, a cost sharing multiple-employer retirement system established by the Maine State legislature. The Maine Public Employees Retirement System provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. The authority to establish and amend benefit provisions rests with the state legislature. The Maine Public Employees Retirement System issues a publicly available financial report that includes financial statements and required supplementary information for the Consolidated Plan. That report may be obtained by writing to Maine Public Employees Retirement, 46 State House Station, Augusta, Maine 04333-0046 or by calling 1-800-451-9800. Funding Policy – Plan members are required to contribute 6.5% of their annual covered salary and the City is required to contribute an actuarially determined rate. The current rate ranges from 5.30% to 12.20% of annual covered payroll. The contribution rates of plan members and the City are established and may be amended by the Maine Public Employees Retirement System Board of Trustees. The City’s contributions to the Maine Public Employees Retirement System Consolidated Plan for the years ended June 30, 2013, 2012, and 2011 were $936,700, $942,629, and $794,677 respectively, equal to the required contributions for each year. Teachers’ Group Description of the Plan - All school teachers, plus other qualified educators, participate in the Maine Public Employees Retirement System's teacher group. The teacher’s group is a cost-sharing plan with a special funding situation, established by the Maine State legislature. The Maine Public Employees Retirement System provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. The authority to establish and amend benefit provisions rests with the state legislature. The Maine Public Employees Retirement System issues a publicly available financial report that includes financial statements and required supplementary information for the Teacher’s Group. That report may be obtained by writing to Maine Public Employees Retirement System, 46 State House Station, Augusta, Maine 04333-0046 or by calling 1-800-451-9800. Funding Policy – Plan members are required to contribute 7.65% of their compensation to the retirement system. The same statute requires the State of Maine Department of Education, to contribute the employer contribution, which amounts to $3,716,192 (15.86%) for fiscal year 2013. This amount has been reported as an intergovernmental revenue and education expenditure in the GAAP basis financial statements. There is no contribution required by the school department except for federally funded teachers, for which they contributed 16.33% of their compensation. This cost is charged to the applicable grant. Beginning on July 1, 2013, as a result of the State Biennial budget, the Department will be responsible for approximately half the normal cost of the teacher’s plan. This approximates 2.65% of compensation. II - 52 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued Annual required contribution (ARC)604,390$ Amortization adjustment to ARC (150,948) Interest on net OPEB obligation 104,408 Annual OPEB cost 557,850$ OTHER INFORMATION, CONTINUED Deferred Compensation Plan The City offers its employees a deferred compensation plan created in accordance with Internal Revenue (IRC) Section 457. The plan permits participating employees to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency. Social Security The City does not have a section 218 agreement to provide full social security coverage to its employees. The City does provide full social security coverage to part-time, seasonal and temporary employees under the Omnibus Budget Reconciliation Act of 1990, and Internal Revenue Service regulations, which became effective July 1, 1991. E. Other Postemployment Benefits Governmental Accounting Standards Board (GASB) Statement 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, was implemented, as required, by the City for the year ended June 30, 2009. Under this pronouncement, it requires that the long-term cost of retirement health care and obligations for other postemployment benefits (OPEB) be determined on an actuarial basis and reported similar to pension plans. Description of the Plan - The City sponsors a single-employer post-retirement benefit plan providing health insurance to retiring employees through CIGNA. CIGNA issues a publicly available financial report that may be obtained through their website www.cigna.com. Full- time City employees age 50 or older and covered under the active medical plan are eligible to participate. Retirees that are designated in a plan pay 100% of the coverage premium. A Medicare Supplement plan is available for eligible retirees. For retirees without Medicare, coverage is available without a Medicare offset. Funding Policy and Annual OPEB Cost - GASB Statement 45 does not mandate the prefunding of postemployment benefits liability. The City currently plans to fund these benefits on a pay-as-you-go basis. No assets have been segregated and restricted to provide postemployment benefits. The annual required contribution (ARC), an actuarial determined rate, represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize unfunded actuarial liabilities over a period not to exceed thirty years. The following table represents the OPEB costs for the year and the annual required contribution: II - 53 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued June 30, 2011 June 30, 2012 June 30, 2013 Annual OPEB cost 357,467$ 344,143$ 557,850$ City contributions (38,436) (57,070) (274,117) Increase in net OPEB obligation 319,031 287,073 283,733 Net OPEB obligation, beginning of year 2,004,092 2,323,123 2,610,196 Net OPEB obligation, end of year 2,323,123$ 2,610,196$ 2,893,929$ Percentage contributed 10.75% 16.58%49.14% Governmental Business-type Total Activities Activities June 30, 2013 Actuarial accrued liability (AAL)5,284,045$ 1,671,709$ 6,955,754$ Actuarial value of plan assets - - - Unfunded actuarial accrued liability (UAAL)5,284,045$ 1,671,709$ 6,955,754$ Covered payroll 16,901,784$ 5,347,204$ 22,248,988$ UAAL as a percentage of covered payroll 31.26% OTHER INFORMATION, CONTINUED Funding Status and Funding Progress – The City’s annual OPEB cost, the net OPEB obligation and the percentage of annual OPEB cost contributed to the plan for the years ending June 30, 2011, 2012 and 2013 are as follows: The unfunded actuarial accrued liability as a percentage of covered payroll for June 30, 2013 is as follows: Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events in the future. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. The required schedule of funding progress presented as required supplementary information provides multiyear trend information (only five years available) that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Actuarial methods and assumptions – Projections of benefits are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits in force at the valuation date and the pattern of sharing benefit costs between the City and plan members at that point. Actuarial calculations reflect a long-term perspective and employ methods and assumptions that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of plan assets. Significant methods and assumptions were as follows: Actuarial valuation date 06/30/13 Actuarial cost method Projected unit credit cost method Amortization method Level dollar Amortization period 30 years - open Actuarial assumptions: Inflation rate 3.0% Investment rate of return 4.0% Payroll growth 3.0% Healthcare cost trend rate 9.0% - 5.0% Post retirement benefit increases 0.0% - retirees pay 100% of premium II - 54 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued OTHER INFORMATION, CONTINUED F. Landfill Closure and Postclosure Care Costs Closure of the City’s Kittredge Road landfill was completed during the fiscal year ended June 30, 2000. Potential postclosure costs have been deemed immaterial, and therefore no liability for these amounts has been accrued. All necessary postclosure costs will be funded from the annual operating budget. G. Subsequent Events On August 12, 2013 the City Council authorized the issuance of up to $7,240,000 in general obligations bonds for the purpose of funding street and bridge work, Wastewater Infrastructure, building demolition and the City’s annual fleet/equipment replacement, and a fire engine. On September 16, 2013, the City Council authorized the issuance of up to $300,000 in general obligation bonds for the purpose of funding City Hall improvements. H. Restatement During the fiscal year, beginning Arena Fund fund balance, governmental activities construction in progress capital assets and Bass Park construction in progress capital assets were restated. The restatement was due to the construction of the Cross Insurance Center which was partially funded by the Arena Fund, but which is a capital asset of the Bass Park Fund. Fund balance for the Arena Fund as of June 30, 2013 has been restated as follows: Fund balances, beginning of year $(4,603,950) Transfer to other funds 36,422,232 Fund balances, beginning of year, as restated $31,818,282 Non-depreciable capital assets on the Governmental Activities Statement of Net Position as of June 30, 2013 have been restated as follows: Non-depreciable capital assets $41,257,312 Transfer to other funds (36,113,566) Non-depreciable capital assets, as restated $ 5,143,746 Net position, beginning of the year on the Governmental Activities Statement of Activities as of June 30, 2013 has been restated as follows: Net position, beginning of year $43,672,117 Transfer to other funds (Arena Fund) 36,422,232 Non-depreciable capital assets (36,113,566) Net position, beginning of year, as restated $43,980,783 Capital assets for the Bass Park Fund as of June 30, 2013 have been restated as follows: Capital assets $ 9,714,898 Transfer from other funds 36,422,232 Capital assets, as restated $46,137,130 II - 55 II - 56 2009 2010 2011 2012 2013 Actuarial Valuation Date 7/1/2008 7/1/2008 1/1/2011 1/1/2011 6/30/2013Governmental activities: Actuarial value of assets -$ -$ -$ -$ -$ Actuarial accrued liability (AAL)8,488,427 8,488,427 3,407,638 3,430,307 5,284,045 Unfunded actuarial accrued liability (UAAL)8,488,427$ 8,488,427$ 3,407,638$ 3,430,307$ 5,284,045$ Funded ratio 0.00%0.00%0.00%0.00%0.00% Covered payroll 16,257,319$ 17,224,485$ 17,369,969$ 17,175,024$ 16,901,784$ Business-type activities: Actuarial value of assets -$ -$ -$ -$ -$ Actuarial accrued liability (AAL)2,710,336 2,710,336 1,095,160 1,072,491 1,671,709 Unfunded actuarial accrued liability (UAAL)2,710,336$ 2,710,336$ 1,095,160$ 1,072,491$ 1,671,709$ Funded ratio 0.00%0.00%0.00%0.00%0.00%Covered payroll 5,190,927$ 5,439,647$ 5,582,428$ 5,369,798$ 5,347,204$ Primary government:Actuarial value of assets -$ -$ -$ -$ -$ Actuarial accrued liability (AAL)11,198,763 11,198,763 4,502,798 4,502,798 6,955,754 Unfunded actuarial accrued liability (UAAL)11,198,763$ 11,198,763$ 4,502,798$ 4,502,798$ 6,955,754$ Funded ratio 0.00%0.00%0.00%0.00%0.00%Covered payroll 21,448,246$ 22,664,132$ 22,952,397$ 22,544,822$ 22,248,988$ UAAL as a percentage of covered payroll 52.21%49.41%19.62%19.97%31.26% Only five years have been presented because 2009 was the year GASB Statement 45 was implemented. Fiscal Year CITY OF BANGOR, MAINE Required Supplemental Information Schedule of Funding Progress - Retiree Healthcare Plan For the Fiscal Year Ended June 30, 2013 GENERAL FUND The General Fund is used to account for resources traditionally associated with the government, which are not required legally or by sound financial management, to be accounted for in another fund. II - 57 Schedule A-1 CITY OF BANGOR, MAINE Balance Sheet General FundJune 30, 2013 ASSETS Cash and cash equivalents 8,058,272$ Investments 50,000 Receivables: Taxes 2,810,832 Accounts (net of allowance of $475,341)1,246,085 Interfund 6,415,524 Intergovernmental 2,625,755 Loans 820,615 Inventory, at cost 797,655 Prepaid items 76,059 Total assets 22,900,797$ LIABILITIES Accounts payable 996,982$ Accrued wages and benefits payable 4,013,128 Unearned revenue 45,161 Total liabilities 5,055,271 DEFERRED INFLOWS OF RESOURCES Unavailable revenues - property taxes 2,664,910 Total deferred inflows of resources 2,664,910 FUND BALANCES Nonspendable 2,774,214 Restricted 475,390 Committed 10,583 Assigned 4,193,415 Unassigned 7,727,014 Total fund balance 15,180,616 Total liabilities, deferred inflows of resources and fund balances 22,900,797$ II - 58 Schedule A-2 CITY OF BANGOR, MAINE Schedule of Revenues, Expenditures and Changes in Unassigned Fund Balance - Budget and Actual - Budgetary Basis General Fund For the Fiscal Year Ended June 30, 2013 Balances Variance Carried 7/1/2012 Budget Actual Surplus Carried Revenues Taxes Real and personal property -$ 49,394,950$ 49,626,466$ 231,516$ -$ Change in unavailable property tax - - (226,841) (226,841) - Tax increment financing district - (2,432,657) (2,432,657) - - Payment in lieu of taxes - 117,000 95,620 (21,380) - Excise - 4,526,000 4,594,821 68,821 - Interest on delinquent taxes - 200,400 204,852 4,452 - Total taxes - 51,805,693 51,862,261 56,568 - Intergovernmental State revenue sharing - 3,700,000 3,513,711 (186,289) - School subsidy - 16,479,974 16,208,643 - (271,331) Other - municipal - 4,091,617 3,147,299 (944,318) - school - 3,742,410 3,571,471 - (170,939) Total intergovernmental - 28,014,001 26,441,124 (1,130,607) (442,270) Other revenue Licenses and permits - 677,436 576,559 (100,877) - Charges for service - municipal - 8,619,618 9,076,686 457,068 - school - 3,865,546 3,835,409 - (30,137) Fines, forfeits and penalties - 33,000 32,696 (304) - Revenue from use of money and property - municipal - 688,600 681,659 (6,941) - Total other - 13,884,200 14,203,009 348,946 (30,137) Total revenues - 93,703,894 92,506,394 (725,093) (472,407) II - 59 Schedule A-2 (con't) CITY OF BANGOR, MAINE Schedule of Revenues, Expenditures and Changes in Unassigned Fund Balance - Budget and Actual - Budgetary Basis General FundFor the Fiscal Year Ended June 30, 2013 Balances Variance Carried 7/1/2012 Budget Actual Surplus Carried Expenditures General government Council - 30,243 29,442 801 - Executive - 928,829 1,274,883 (346,054) - Human resources - 131,738 116,195 15,543 - City clerk - 406,291 379,009 27,282 - Assessing - 436,896 447,501 (10,605) - Legal - 297,699 305,955 (8,256) - Finance - 1,578,766 1,493,687 85,079 - Insurance - 155,282 208,178 (52,896) - Planning, econ dev, code enforcement - 1,165,988 1,101,011 54,977 10,000 Total general government - 5,131,732 5,355,861 (234,129) 10,000 Public safety Police - 8,344,102 8,194,356 149,746 - Fire - 8,131,360 8,018,776 112,584 - Total public safety - 16,475,462 16,213,132 262,330 - Health, community services and recreation Health and community services - 3,975,531 3,087,307 888,224 - Parks and recreation - 1,698,155 1,894,302 (196,147) - Total health, commun. serv and rec.- 5,673,686 4,981,609 692,077 - Public buildings and services - 10,311,553 9,831,466 480,087 - II - 60 Schedule A-2 (con't) CITY OF BANGOR, MAINE Schedule of Revenues, Expenditures and Changes in Unassigned Fund Balance - Budget and Actual - Budgetary Basis General Fund For the Fiscal Year Ended June 30, 2013 Balances Variance Carried 7/1/2012 Budget Actual Surplus Carried Expenditures, continued Other agencies County tax - 2,843,431 2,843,431 - - Downtown Development District - 54,739 54,739 - - Public library - 1,403,107 1,403,106 1 - Other agencies 1,583 80,375 81,499 (124) 583 Total other agencies 1,583 4,381,652 4,382,775 (123) 583 Education Regular 3,276,779 41,418,726 40,416,630 - 4,278,875 Adult education 119,985 512,274 443,552 - 188,707 School lunch 230,802 1,353,465 1,462,337 - 121,930 Special revenue 38,608 2,593,509 2,522,372 - 109,745 Trust and agency 253,578 1,162,190 1,148,712 - 267,056 Total education 3,919,752 47,040,164 45,993,603 - 4,966,313 Other appropriations Pensions and other fringe benefits - 1,872,157 2,122,901 (250,744) - Debt service - 2,581,010 2,582,322 (1,312) - Tax increment financing payments - 836,250 839,767 (3,517) - Total other appropriations - 5,289,417 5,544,990 (255,573) - Total expenditures 3,921,335 94,303,666 92,303,436 944,669 4,976,896 Excess (deficiency) of revenues over/under expenditures (3,921,335) (599,772) 202,958 219,576 4,504,489 II - 61 Schedule A-2 (con't) CITY OF BANGOR, MAINE Schedule of Revenues, Expenditures and Changes in Unassigned Fund Balance - Budget and Actual - Budgetary Basis General Fund For the Fiscal Year Ended June 30, 2013 Balances Variance Carried 7/1/2012 Budget Actual Surplus Carried Other financing sources (uses) Appropriation from restricted, committed and assigned fund balances - 1,526,587 159,105 - (1,367,482) Sale of assets - 16,000 53,162 37,162 - Contributions - - 106 106 - Insurance Settlements - 22,900 57,493 34,593 - Transfers to other funds (372,170) (740,626) (1,223,882) (111,086) - Transfers from other funds - 27,000 23,532 (3,468) - Operating transfers - (252,089) (252,089) - - Total other financing sources (uses)(372,170) 599,772 (1,182,573) (42,693) (1,367,482) Net change in unassigned fund balance (4,293,505)$ -$ (979,615)$ 176,883 3,137,007$ Unassigned fund balance, beginning of year 7,563,658 Changes in amounts required to be shown as nonspendable fund balance Inventory and prepaids (13,527) Unassigned fund balance, end of year 7,727,014$ NONMAJOR GOVERNMENTAL FUNDS Special Revenue Funds Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditures for particular purposes. Other HUD Funds – This is used to account for 1) federal grants obtained and expended under the Housing and Community Development Act of 1974, as amended, for the redevelopment of the downtown commercial core of the City and 2) low interest loans to businesses within the City of Bangor for establishment, expansion or redevelopment purposes. Grant Fund – Accounts for federal and state grants that are legally restricted to expenditures allowable by the grantor agency. Dedicated Revenue Funds - Accounts for amounts raised or donated to benefit various governmental programs such as; the Dental Clinic, local parks, City forest and Park Woods complex. Other Funds – Accounts for funds held to be used in future periods such as tax financing district repayments and other community funds for capital expenditures relating to the operation of the area transportation system Permanent Fund Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the reporting government’s programs. II - 62 Schedule B-1 CITY OF BANGOR, MAINE Combining Balance Sheet Nonmajor Governmental FundsJune 30, 2013 Nonmajor Special Nonmajor Total Other Revenue Permanent Governmental Funds Funds Funds ASSETS Cash and cash equivalents $735,417 -$ 735,417$ Investments - 124,570 124,570 Receivables: Accounts 69,079 - 69,079 Loans /Notes (net of $170,317 allowance) 1,173,848 916,873 2,090,721 Intergovernmental 188,949 - 188,949 Total assets $2,167,293 1,041,443$ 3,208,736$ LIABILITIES Accounts payable $54,968 -$ 54,968$ Interfund loans payable 227,830 - 227,830 Total liabilities 282,798 - 282,798 DEFERRED INFLOWS OF RESOURCES Unavailable resources - loans 160,000 - 160,000 Total deferred inflows of resources 160,000 - 160,000 FUND BALANCES Nonspendable - 574,492 574,492 Restricted 1,730,231 466,951 2,197,182 Unassigned (5,736) - (5,736) Total fund balances 1,724,495 1,041,443 2,765,938 Total liabilities, deferred inflows of resources and fund balances $2,167,293 1,041,443$ 3,208,736$ II - 63 Schedule B-2 CITY OF BANGOR, MAINE Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental FundsFor the Fiscal Year Ended June 30, 2013 Nonmajor Special Nonmajor Total Other Revenue Permanent Governmental Funds Funds Funds Revenues Taxes $788,503 -$ 788,503$ Intergovernmental 6,078,266 - 6,078,266 Charges for services 1,060,267 - 1,060,267 Program income 12,834 - 12,834 Revenue from use of money and property 77,800 - 77,800 Other revenue 49,381 5,115 54,496 Interest revenue - 45,867 45,867 Total revenues 8,067,051 50,982 8,118,033 Expenditures Current: Personnel 1,057,112 - 1,057,112 Payments to beneficiaries 881,647 - 881,647 Other 3,392,451 - 3,392,451 Bus operations 2,719,136 - 2,719,136 Program expenditures - 4,980 4,980 Total expenditures 8,050,346 4,980 8,055,326 Excess of revenues over expenditures 16,705 46,002 62,707 Other financing sources (uses) Transfers to other funds (185,932) (46,215) (232,147) Transfers from other funds 35,314 3,167 38,481 Total other financing sources (uses)(150,618) (43,048) (193,666) Net change in fund balances (133,913) 2,954 (130,959) Fund balances, beginning of year 1,858,408 1,038,489 2,896,897 Fund balances, end of year $1,724,495 1,041,443$ 2,765,938$ II - 64 Schedule B-3 CITY OF BANGOR, MAINE Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2013 Dedicated Other Grant Revenue HUD Funds Fund Funds Other Totals ASSETS Cash and cash equivalents 348,281$ 32$ -$ 387,104$ 735,417$ Receivables: Accounts - 69,079 - - 69,079 Loans/Notes (net of $170,317 allowance)160,000 - 700,958 312,890 1,173,848 Intergovernmental - 188,949 - - 188,949 Total assets 508,281$ 258,060$ 700,958$ 699,994$ 2,167,293$ LIABILITIES Accounts payable -$ 35,966$ -$ 19,002$ 54,968$ Interfund loans payable - 227,830 - - 227,830 Total liabilities - 263,796 - 19,002 282,798 DEFERRED INFLOWS OF RESOURCES Unavailable resources - loans 160,000 - - - 160,000 Total deferred inflows of resources 160,000 - - - 160,000 FUND BALANCES (DEFICITS) Restricted 348,281 - 700,958 680,992 1,730,231 Unassigned - (5,736) - - (5,736) Total fund balances (deficits)348,281 (5,736) 700,958 680,992 1,724,495 Total liabilities, deferred inflows of resources and fund balances (deficits)508,281$ 258,060$ 700,958$ 699,994$ 2,167,293$ II - 65 Schedule B-4 CITY OF BANGOR, MAINE Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue FundsFor the Fiscal Year Ended June 30, 2013 Dedicated Other Grant Revenue HUD Funds Fund Funds Other Totals Revenues Taxes -$ -$ -$ 788,503$ 788,503$ Intergovernmental - 6,078,266 - - 6,078,266 Charges for services - 1,060,267 - - 1,060,267 Program income 12,834 - - - 12,834 Revenue from use of money and property - - 41,806 35,994 77,800 Contributions - - 15,353 34,028 49,381 Total revenues 12,834 7,138,533 57,159 858,525 8,067,051 Expenditures Current: Personnel - 1,057,112 - - 1,057,112 Payments to beneficiaries - - 69,826 811,821 881,647 Other - 3,392,451 - - 3,392,451 Bus operations - 2,719,136 - - 2,719,136 Total expenditures - 7,168,699 69,826 811,821 8,050,346 Excess (deficiency) of revenues over (under) expenditures 12,834 (30,166) (12,667) 46,704 16,705 Other financing sources (uses) Transfers to other funds - - (128,532) (57,400) (185,932) Transfers from other funds - 29,014 - 6,300 35,314 Total other financing sources (uses)- 29,014 (128,532) (51,100) (150,618) Net change in fund balances 12,834 (1,152) (141,199) (4,396) (133,913) Fund balances (deficits), beginning of year 335,447 (4,584) 842,157 685,388 1,858,408 Fund balances (deficits), end of year 348,281$ (5,736)$ 700,958$ 680,992$ 1,724,495$ II - 66 Schedule B-5 CITY OF BANGOR, MAINE Combining Balance Sheet Nonmajor Permanent FundsJune 30, 2013 Revolving Other Loan Funds Funds Totals ASSETS Investments $- 124,570$ 124,570$ Loans receivable 892,116 24,757 916,873 Total assets $892,116 149,327$ 1,041,443$ LIABILITIES AND FUND BALANCES Liabilities $- -$ -$ Total liabilities $- -$ -$ Fund balances Nonspendable 425,165 149,327 574,492 Restricted 466,951 - 466,951 Total fund balances 892,116 149,327 1,041,443 Total liabilities and and fund balances $892,116 149,327$ 1,041,443$ II - 67 Schedule B-6 CITY OF BANGOR, MAINE Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Permanent FundsFor the Fiscal Year Ended June 30, 2013 Revolving Other Loan Funds Funds Totals Revenues Investment income $38,271 7,596$ 45,867$ Lot sales 5,115 - 5,115 Total revenues 43,386 7,596 50,982 Expenditures Current: Payments to beneficiaries 80 4,900 4,980 Total expenditures 80 4,900 4,980 Excess of revenues over expenditures 43,306 2,696 46,002 Other financing sources (uses) Transfer to other funds (46,215) - (46,215) Transfer from other funds 3,167 - 3,167 Total other financing source (uses)(43,048) - (43,048) Net change in fund balances 258 2,696 2,954 Fund balances, beginning of year 891,858 146,631 1,038,489 Fund balances, end of year $892,116 149,327$ 1,041,443$ ENTERPRISE FUNDS Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises. The intent of the government is to have the costs of providing goods or services to the general public financed or recovered primarily through user charges. The government has decided that periodic determination of net income is appropriate for accountability purposes. In addition to the major funds reported in Summary of Significant Accounting Policies, Note C the City has the following nonmajor enterprise funds: Park Woods – This fund accounts for the rental of 60 units of surplus housing received from the federal government pursuant to the McKinney Homeless Assistance Act. The principal source of revenue is rental income. Parking Fund – This fund accounts for the operation of the City-owned parking lots and the Pickering Square garage. Revenue sources include monthly lease payments for parking spaces, hourly/daily parking fees, and fines and waiver fees for parking violations. Certain of these facilities are operated under a private management contract. Municipal Golf Course – This fund accounts for the operation of a 27 hole municipal golf course. Principal revenue sources are season memberships and daily green fees. Continued on next page II - 68 Schedule C-1 CITY OF BANGOR, MAINE Combining Statement of Net Position Nonmajor Proprietary Funds June 30, 2013 Business-type Activities - Enterprise Funds Municipal Total Park Parking Golf Nonmajor Woods Fund Course Proprietary Funds ASSETS Current assets Cash and cash equivalents 440$ 244,285$ 537,105$ 781,830$ Accounts receivable 1,261 1,056 - 2,317 Total current assets 1,701 245,341 537,105 784,147 Noncurrent assets Capital Assets: Land and improvements 295,025 - 1,594,732 1,889,757 Buildings and improvements 1,933,061 - 912,607 2,845,668 Machinery and equipment 22,952 - 305,859 328,811 Parking structures - 11,317,169 - 11,317,169 2,251,038 11,317,169 2,813,198 16,381,405 Less accumulated depreciation (1,632,689) (8,358,114) (1,759,430) (11,750,233) Net capital assets 618,349 2,959,055 1,053,768 4,631,172 Deposits 20,000 - - 20,000 Total noncurrent assets 638,349 2,959,055 1,053,768 4,651,172 Total assets 640,050 3,204,396 1,590,873 5,435,319 Continued from previous page II - 69 Schedule C-1 (con't) CITY OF BANGOR, MAINE Combining Statement of Net Position Nonmajor Proprietary Funds June 30, 2013 Business-type Activities - Enterprise Funds Municipal Total Park Parking Golf Nonmajor Woods Fund Course Proprietary Funds LIABILITIES Current liabilities Accounts payable 29,395 309 15,444 45,148 Accrued wages and benefits payable 1,787 3,898 12,051 17,736 Accrued interest - 12,620 4,180 16,800 Workers' compensation - 4,050 - 4,050 Interfund loans payable 371,000 - - 371,000 General obligation debt payable - 199,818 34,617 234,435 Total current liabilities 402,182 220,695 66,292 689,169 Long-term liabilities Workers' compensation - 5,950 - 5,950 General obligation debt payable - 1,707,457 433,545 2,141,002 Accrued compensated absences 11,631 8,676 19,316 39,623 Net OPEB obligation 7,673 10,950 19,245 37,868 Other long-term liabilities 193,061 20,228 - 213,289 Total long-term liabilities 212,365 1,753,261 472,106 2,437,732 Total liabilities 614,547 1,973,956 538,398 3,126,901 NET POSITION Net investment in capital assets 618,349 1,203,883 666,377 2,488,609 Unrestricted (592,846) 26,557 386,098 (180,191) Total net position 25,503$ 1,230,440$ 1,052,475$ 2,308,418$ II - 70 Schedule C-2 Municipal Total Park Parking Golf Nonmajor Woods Fund Course Proprietary Funds Operating revenues Charges for services 417,407$ 960,947$ 592,825$ 1,971,179$ Operating expenses Operating expenses other than depreciation and amortization 384,166 645,885 586,815 1,616,866 Depreciation and amortization 89,123 268,077 80,711 437,911 Total operating expenses 473,289 913,962 667,526 2,054,777 Operating income (loss)(55,882) 46,985 (74,701) (83,598) Nonoperating revenue (expenses) Interest income - - 590 590 Interest expense - (58,365) (19,791) (78,156) Total nonoperating revenue (expenses)- (58,365) (19,201) (77,566) Net income (loss) before grants/contributions and transfers (55,882) (11,380) (93,902) (161,164) Grants/contributions received for capital assets - 28,281 - 28,281 Change in net position (55,882) 16,901 (93,902) (132,883) Net position, beginning of year 81,385 1,213,539 1,146,377 2,441,301 Net position, end of year 25,503$ 1,230,440$ 1,052,475$ 2,308,418$ Business-type Activities - Enterprise Funds Nonmajor Proprietary Funds For the Fiscal Year Ended June 30, 2013 CITY OF BANGOR, MAINE Combining Statement of Revenues, Expenses and Changes in Net Position Continued on next page II - 71 Schedule C-3 Municipal Total Park Parking Golf Nonmajor Woods Fund Course Proprietary Funds Cash flows from operating activities Cash received from customers 421,523$ 958,905$ 592,825$ 1,973,253$ Cash paid to suppliers for goods and services (382,557) (483,057) (252,281) (1,117,895) Cash paid to employees for services (31,472) (163,705) (329,750) (524,927) Net cash provided by operating activities 7,494 312,143 10,794 330,431 Cash flows from noncapital financing activities Interfund loans (repayments)(7,300) - - (7,300) Net cash (used in) noncapital financing activities (7,300) - - (7,300) Cash flows from capital and related financing activities Proceeds from general obligation bonds - - 266,015 266,015 Acquisition and construction of capital assets - (48,903) - (48,903) Payment to escrow agent - - (266,015) (266,015) Principal paid on general obligation bonds - (193,763) (32,765) (226,528) Interest paid on general obligation bonds - (60,346) (21,768) (82,114) Net cash (used in) capital and related financing activities - (303,012) (54,533) (357,545) Cash flows from investing activities Interest on investments - 141 590 731 Net cash provided by investing activities - 141 590 731 Net increase (decrease) in cash 194 9,272 (43,149) (33,683) Cash, beginning of year 246 235,013 580,254 815,513 Cash, end of year 440$ 244,285$ 537,105$ 781,830$ Schedule of noncash investing, capital and financing activities: During the year, the Parking Fund had a non cash contribution to capital assets in the amount of $28,281. For the Fiscal Year Ended June 30, 2013 Business-type Activities - Enterprise Funds CITY OF BANGOR, MAINE Combining Statement of Cash Flows - Nonmajor Proprietary Funds Continued from previous page II - 72 Schedule C-3 (con't) Municipal Total Park Parking Golf Nonmajor Woods Fund Course Proprietary Funds Reconciliation of operating income (loss) to net cash provided by operating activities Operating income (loss)(55,882)$ 46,985$ (74,701)$ (83,598)$ Adjustments to reconcile operating income (loss) to net cash provided by operating activities Depreciation and amortization 89,123 268,077 80,711 437,911 Changes in assets and liabilities: (Increase) decrease in accounts receivable 4,117 (1,056) - 3,061 Increase (decrease) in accounts payable (29,580) (381) 901 (29,060) Increase (decrease) in unearned revenue - (986) - (986) Increase (decrease) in other liabilities (284) (496) 3,883 3,103 Total adjustments 63,376 265,158 85,495 414,029 Net cash provided by operating activities 7,494$ 312,143$ 10,794$ 330,431$ Business-type Activities - Enterprise Funds CITY OF BANGOR, MAINE Combining Statement of Cash Flows - Nonmajor Proprietary Funds For the Fiscal Year Ended June 30, 2013 II - 73 Schedule C-4 CITY OF BANGOR, MAINE Schedule of Revenues, Expenditures and Encumbrances Budget and Actual - Budgetary Basis Sewer Utility Fund - Enterprise FundFor the Fiscal Year Ended June 30, 2013 Variance Positive Budget Actual (Negative) Revenues Charges for services 7,984,590$ 7,794,718$ (189,872)$ Interest and other revenue 45,000 28,818 (16,182) Total revenues 8,029,590 7,823,536 (206,054) Expenditures and encumbrances Salaries 1,277,054 1,190,734 86,320 Fringe benefits 365,005 315,721 49,284 Supplies and materials 1,342,667 1,086,546 256,121 Contractual services 1,322,744 1,386,613 (63,869) Interfund charges 513,358 445,762 67,596 Miscellaneous 27,795 39,646 (11,851) Debt service 3,004,467 3,000,861 3,606 Depreciation 1,681,950 1,725,442 (43,492) Outlay 176,500 198,270 (21,770) Total expenditures and encumbrances 9,711,540 9,389,595 321,945 Deficiency of revenues under expenditures and encumbrances (1,681,950)$ (1,566,059)$ 115,891$ II - 74 Schedule C-5 CITY OF BANGOR, MAINE Schedule of Revenues, Expenditures and Encumbrances Budget and Actual - Budgetary Basis Airport Fund - Enterprise FundFor the Fiscal Year Ended June 30, 2013 Variance Positive Budget Actual (Negative) Revenues Charges for services 13,549,944$ 12,044,192$ (1,505,752)$ Interest and other revenue 817,595 700,344 (117,251) Total revenues 14,367,539 12,744,536 (1,623,003) Expenditures and encumbrances Salaries 5,689,726 5,137,754 551,972 Fringe benefits 1,334,743 1,308,591 26,152 Supplies and materials 2,196,405 2,231,585 (35,180) Contractual services 2,583,810 2,737,796 (153,986) Interfund charges 886,132 781,067 105,065 Miscellaneous 156,953 54,778 102,175 Debt service 721,151 1,053,704 (332,553) Depreciation 7,550,000 7,932,320 (382,320) Outlay 695,000 185,396 509,604 Total expenditures and encumbrances 21,813,920 21,422,991 390,929 Deficiency of revenues under expenditures and encumbrances (7,446,381)$ (8,678,455)$ (1,232,074)$ II - 75 Schedule C-6 CITY OF BANGOR, MAINE Schedule of Revenues, Expenditures and Encumbrances Budget and Actual - Budgetary Basis Park Woods - Enterprise FundFor the Fiscal Year Ended June 30, 2013 Variance Positive Budget Actual (Negative) Revenues Charges for services 477,200$ 417,406$ (59,794)$ Total revenues 477,200 417,406 (59,794) Expenditures and encumbrances Salaries 29,552 26,072 3,480 Fringe benefits 6,461 6,274 187 Supplies and materials 145,700 156,236 (10,536) Contractual services 178,898 187,976 (9,078) Interfund charges 245 111 134 Miscellaneous 9,100 8,654 446 Depreciation 89,123 89,123 - Total expenditures and encumbrances 459,079 474,446 (15,367) Excess (deficiency) of revenues over (under) expenditures and encumbrances 18,121$ (57,040)$ (75,161)$ II - 76 Schedule C-7 CITY OF BANGOR, MAINE Schedule of Revenues, Expenditures and Encumbrances Budget and Actual - Budgetary Basis Parking Fund - Enterprise FundFor the Fiscal Year Ended June 30, 2013 Variance Positive Budget Actual (Negative) Revenues Charges for services 1,052,348$ 959,961$ (92,387)$ Total revenues 1,052,348 959,961 (92,387) Expenditures and encumbrances Salaries 194,665 132,322 62,343 Fringe benefits 33,612 31,334 2,278 Supplies and materials 8,950 2,901 6,049 Contractual services 392,902 366,993 25,909 Interfund charges 115,325 112,781 2,544 Debt service 254,108 254,108 - Depreciation 270,670 268,077 2,593 Outlay 50,000 48,904 1,096 Total expenditures and encumbrances 1,320,232 1,217,420 102,812 Deficiency of revenues under expenditures and encumbrances (267,884)$ (257,459)$ 10,425$ II - 77 Schedule C-8 CITY OF BANGOR, MAINE Schedule of Revenues, Expenditures and Encumbrances Budget and Actual - Budgetary Basis Bass Park Fund - Enterprise Fund For the Fiscal Year Ended June 30, 2013 Variance Positive Budget Actual (Negative) Revenues Charges for services 1,289,975$ 1,249,595$ (40,380)$ Operating transfer 833,729 833,925 196 Total revenues 2,123,704 2,083,520 (40,184) Expenditures and encumbrances Salaries 832,771 813,129 19,642 Fringe benefits 107,563 98,070 9,493 Supplies and materials 350,150 379,648 (29,498) Contractual services 521,305 619,122 (97,817) Interfund charges 136,350 143,752 (7,402) Miscellaneous 50,000 47,824 2,176 Debt service 135,565 135,565 - Depreciation 243,962 286,336 (42,374) Credits (10,000) (10,000) - Total expenditures and encumbrances 2,367,666 2,513,446 (145,780) Deficiency of revenues under expenditures and encumbrances (243,962)$ (429,926)$ (185,964)$ II - 78 Schedule C-9 CITY OF BANGOR, MAINE Schedule of Revenues, Expenditures and Encumbrances Budget and Actual - Budgetary Basis Municipal Golf Course - Enterprise Fund For the Fiscal Year Ended June 30, 2013 Variance Positive Budget Actual (Negative) Revenues Charges for services 666,000$ 592,825$ (73,175)$ Interest and other revenue 700 590 (110) Total revenues 666,700 593,415 (73,285) Expenditures and encumbrances Salaries 301,673 290,832 10,841 Fringe benefits 40,725 40,165 560 Supplies and materials 88,625 108,295 (19,670) Contractual services 78,018 80,886 (2,868) Interfund charges 60,125 62,905 (2,780) Debt service 54,534 54,534 - Depreciation 83,150 80,711 2,439 Outlay 43,000 - 43,000 Total expenditures and encumbrances 749,850 718,328 31,522 Deficiency of revenues under expenditures and encumbrances (83,150)$ (124,913)$ (41,763)$ II - 79 Schedule C-10 CITY OF BANGOR, MAINE Schedule of Revenues, Expenditures and Encumbrances Budget and Actual - Budgetary Basis Economic Development Fund - Enterprise Fund For the Fiscal Year Ended June 30, 2013 Variance Positive Budget Actual (Negative) Revenues Charges for services 1,147,663$ 532,033$ (615,630)$ Interest and other revenue 90,507 89,276 (1,231) Total revenues 1,238,170 621,309 (616,861) Expenditures and encumbrances Supplies and materials 81,876 84,901 (3,025) Contractual services 196,139 161,096 35,043 Miscellaneous 2,337 3,480 (1,143) Debt service 380,363 380,363 - Depreciation 184,498 184,498 - Outlay 180,000 - 180,000 Total expenditures and encumbrances 1,025,213 814,338 210,875 Excess (deficiency) of revenues over (under) expenditures and encumbrances 212,957$ (193,029)$ (405,986)$ FIDUCIARY FUNDS Fiduciary Funds are used to report assets held in a trustee or agency capacity for others. Agency Funds – Agency Funds are used to account for situations where the City’s role is purely custodial, such as the receipt, temporary investment, and remittance of fiduciary resources to individuals, private organizations, or other governments. II - 80 Schedule D-1 CITY OF BANGOR, MAINE Statement of Changes in Assets and Liabilities Agency Fund For the Fiscal Year Ended June 30, 2013 Balance Balance July 1, 2012 Additions Deletions June 30, 2013 ASSETS Cash: Bangor Area Stormwater Group 18,595$ 44,647$ 44,982$ 18,260$ School Activity Funds 101,154 187,967 170,860 118,261 Total assets 119,749$ 232,614$ 215,842$ 136,521$ LIABILITIES Funds held for others: Bangor Area Stormwater Group 18,595$ 44,647$ 44,982$ 18,260$ School Activity Funds 101,154 187,967 170,860 118,261 Total liabilities 119,749$ 232,614$ 215,842$ 136,521$ CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS II - 81 Schedule E-1 CITY OF BANGOR, MAINE Capital Assets Used in the Operation of Governmental Funds (net of accumulated depreciation) Schedule of Changes by Function and Activity For the Fiscal Year Ended June 30, 2013 Balance Balance Function and Activity 2012 Additions Deletions 2013 General government BAT community connector 2,597,261$ -$ 281,494$ 2,315,767$ Central service 9,615 8,206 4,256 13,565 City clerk 3,472 - 3,472 - City hall 619,811 - 24,181 595,630 Community and economic development 9,439,735 1,315,491 409,896 10,345,330 Engineering 31,962 - 6,921 25,041 Information services 111,605 156,391 42,572 225,424 Motor pool 3,218,538 1,249,633 722,317 3,745,854 Other - unclassified 252,219 - 70,161 182,058 Total general government 16,284,218 2,729,721 1,565,270 17,448,669 Public safety Fire 5,496,555 69,450 494,332 5,071,673 Police 10,340,219 133,209 376,473 10,096,955 Total public safety 15,836,774 202,659 870,805 15,168,628 Health, community services and recreation Parks and recreation 2,070,067 94,552 102,797 2,061,822 Total health, community services and recreation 2,070,067 94,552 102,797 2,061,822 Public building and services Public works 12,831,745 1,449,928 1,312,332 12,969,341 Total public buildings and services 12,831,745 1,449,928 1,312,332 12,969,341 Education 28,242,484 1,799,396 1,048,371 28,993,509 Arena Fund - restated*- - - - Total governmental fund capital assets 75,265,288$ 6,276,256$ 4,899,575$ 76,641,969$ * - The Capital Assets for the Arena Fund were moved to the Bass Park Fund OTHER INFORMATION II - 82 Schedule F-1 CITY OF BANGOR, MAINE Assessed Valuation, Commitment and Collections For the Fiscal Year Ended June 30, 2013 VALUATION Land and buildings 2,282,480,900$ Land and buildings - Homestead exemption 53,981,600 Personal property 245,768,300 Personal property - BETE exemption 66,043,600 Total valuation 2,648,274,400$ COMMITMENT Real estate, personal property (excludes Homestead and BETE exemptions)2,528,249,200$ Tax rate 0.01965 Total commitment 49,680,097 ADD Supplemental taxes committed 33,758 49,713,855 LESS Collections 2013 48,276,445 Abatements 134,598 2013 taxes receivable at June 30, 2013 1,302,812$ II - 83 Schedule F-2 CITY OF BANGOR, MAINE General Fund Unassigned Fund Balance Sufficiency Calculation For the Fiscal Year Ended June 30, 2013 It is the policy of the City to maintain a General Fund unassigned fund balance approximately 8.33% of operating expenditures. The following table sets forth the calculation as to the sufficiency of the June 30, 2013 General Fund unassigned fund balance. General Fund expenditures/uses ( Schedule A-2) General government 5,355,861$ Public safety 16,213,132 Health, community services and recreation 4,981,609 Public buildings and services 9,831,466 Other agencies 4,382,775 Education 45,993,603 Other appropriations 5,544,990 Other uses, gross*1,364,885 Gross expenditures and uses 93,668,321 General Fund debt service 6,805,776 Net expenditures and uses 86,862,545$ Indicated unassigned fund balance @ 8.33%7,235,650$ Actual unassigned fund balance (Schedule A-2)7,727,014$ Actual unassigned fund balance as a percentage of net expenditures and uses 8.90% Over (under) funded status 491,364$ * excludes amounts appropriated from unassigned fund balance STATISTICAL SECTION This part of the City of Bangor’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures and required supplementary information says about the government’s overall financial health. Page Financial Trends III - 1 The schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time. Revenue Capacity III - 8 These schedules contain information to help the reader assess the City’s most significant local revenue source, the property tax. Debt Capacity III - 12 These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the ability to issue additional debt in the future. Demographic and Economic Information III - 16 These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place. Operating Information III - 18 These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs. III - 1 Table 1 Fiscal Year 2011 2012 2013 Governmental activities: Net investment in capital assets 40,176,260$ 67,253,588$ 54,540,288$ Restricted 1,019,806 1,039,248 1,041,443 Unrestricted 262,217 (24,620,719) (21,336,473) Total governmental activities net position 41,458,283 43,672,117 34,245,258 Business-type activities: Net investment in capital assets 155,344,528 152,749,709 165,548,784 Restricted - - - Unrestricted 15,549,352 12,823,198 4,879,657 Total business-type activities net position 170,893,880 165,572,907 170,428,441 Primary government: Net investment in capital assets 195,520,788 220,003,297 220,089,072 Restricted 1,019,806 1,039,248 1,041,443 Unrestricted 15,811,569 (11,797,521) (16,456,816) Total primary government net position 212,352,163$ 209,245,024$ 204,673,699$ Only three years have been presented because 2011 was the year GASB Statement No. 54 was implemented. (accrual basis of accounting) Last Ten Fiscal Years Net Position by Component CITY OF BANGOR, MAINE Continued on next page III - 2 Table 2 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Expenses Governmental activities: General government 6,487,572$ 6,435,386$ 6,947,106$ 7,052,860$ 8,744,549$ 7,868,247$ 8,279,943$ 9,223,718$ 4,490,599$ 4,733,021$ Public safety 12,066,567 12,478,326 12,890,750 13,756,962 14,945,855 15,671,645 16,898,374 17,018,427 18,016,430 17,864,294 Health, community services and recreation 3,606,827 4,000,249 7,301,546 7,348,875 8,413,205 9,168,870 9,331,784 9,523,225 8,455,977 9,298,196 Public services**7,360,360 7,609,989 11,167,397 11,544,128 10,501,253 11,812,548 16,380,337 12,413,601 15,399,933 14,408,500 Other agencies 3,273,003 3,514,658 3,610,935 3,787,970 4,829,547 4,580,661 4,658,904 4,479,888 4,209,428 4,630,915 Education 40,279,055 42,659,395 45,522,795 46,106,647 47,537,197 54,294,824 52,763,860 50,986,350 51,223,806 50,145,937 Unclassified 389,598 65,639 947,025 1,136 - - - - - - Restricted grants*6,857,039 7,326,307 - - - - - - - - Arena development - - - 417,030 41,091 51,332 39,075 61,334 536,251 2,201,200 Community development - - 2,419,594 1,865,026 2,156,241 912,992 1,506,038 1,542,975 1,152,289 1,356,184 Waterfront - - 990,961 399,015 1,754,281 9,252,263 79,911 1,439,065 606,249 381,437 Public transportation - - 1,798,968 1,841,516 2,118,374 3,042,434 2,792,904 1,701,112 3,276,780 3,250,752 Economic development (tif)- - 1,092,770 1,101,078 1,066,192 1,114,112 1,630,081 1,383,662 1,502,503 1,334,470 Interest on debt 3,083,447 3,166,250 3,098,248 1,952,612 3,206,764 2,651,599 2,555,839 2,151,172 2,710,135 3,343,590 Capital maintenance expenses*2,666,118 1,674,034 - - - - - - - - Total governmental activities expenses 86,069,586 88,930,233 97,788,095 97,174,855 105,314,549 120,421,527 116,917,050 111,924,529 111,580,380 112,948,496 Business-type activities: Sewer Utility 5,751,710 5,859,588 5,818,127 6,052,420 6,052,419 6,197,277 6,253,436 6,202,202 6,758,495 6,827,790 Airport 15,060,963 16,368,681 16,947,056 18,645,140 19,641,953 19,934,243 20,532,553 20,458,552 20,752,350 20,722,960 Park Woods 531,986 598,854 540,207 678,867 678,867 590,250 529,610 496,478 533,671 473,289 Parking 1,431,983 1,425,508 1,322,138 1,438,125 1,438,125 1,374,909 1,402,922 1,206,989 995,631 972,327 Bass Park 1,935,653 1,889,215 1,918,111 1,993,205 1,993,205 1,851,914 1,923,073 2,075,644 1,919,301 3,314,865 Municipal Golf Course 626,739 592,323 647,499 695,969 695,969 745,339 733,380 664,311 671,113 687,317 Economic Development 338,795 397,881 484,264 695,851 695,851 712,195 634,764 618,980 615,816 586,140 Total business-type activities expenses 25,677,829 27,132,050 27,677,402 30,199,577 31,196,389 31,406,127 32,009,738 31,723,156 32,246,377 33,584,688 Total primary government expenses 111,747,415$ 116,062,283$ 125,465,497$ 127,374,432$ 136,510,938$ 151,827,654$ 148,926,788$ 143,647,685$ 143,826,757$ 146,533,184$ * - Amounts previously reported as restricted grants and capital maintenance expenses have been classified into new functions beginning in 2006. ** - Amounts previously reported as infrastructure have been reclassified as public services to conform with current year presentation. (accrual basis of accounting) Last Ten Fiscal Years Changes in Net Position CITY OF BANGOR, MAINE Continued on next page III - 3 Table 2 (con't) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Program Revenues Governmental activities: Charges for services General government 1,103,382$ 1,447,058$ 1,672,854$ 2,334,040$ 2,282,374$ 1,869,711$ 2,386,637$ 2,070,189$ 2,501,326$ 2,214,675$ Public safety 1,923,804 1,908,000 2,471,220 2,182,680 2,439,831 3,010,167 2,401,930 3,289,153 2,681,152 3,418,686 Health, community services and recreation 624,778 674,364 756,207 681,583 771,254 768,450 836,689 928,307 1,048,707 1,139,382 Public services 3,537,702 3,766,334 4,076,981 3,871,412 4,127,341 3,807,886 3,954,116 3,922,847 4,002,973 3,520,517 Other agencies - - - - 22,243 22,068 - 20,248 103,560 - Education 3,857,798 4,549,286 4,561,352 4,408,431 4,539,787 4,386,457 4,533,041 5,165,261 3,806,614 3,835,409 Unclassified 19,719 20,036 859,682 61,128 - - - - - - Restricted grants*1,368,366 1,079,690 - - - - - - - - Arena Development - - - 1,630,360 1,689,657 2,205,771 2,380,158 2,331,584 2,434,915 2,079,869 Community development - - 672,459 658,141 297,394 301,019 332,295 323,494 588,587 474,013 Public transportation - - 536,491 659,960 809,531 944,804 923,433 1,025,080 1,023,717 1,045,793 Tax increment financing - - - - - 1,711 - - - - Operating grants and contributions 24,743,028 25,986,614 29,577,430 30,534,706 41,370,518 34,155,649 35,683,710 35,604,940 33,137,275 31,901,386 Capital grants and contributions 2,098,577 4,117,072 3,788,485 2,604,652 2,119,150 2,068,478 6,578,917 4,935,614 3,725,432 2,345,794 Total governmental activities program revenues 39,277,154 43,548,454 48,973,161 49,627,093 60,469,080 53,542,171 60,010,926 59,616,717 55,054,258 51,975,524 Business-type activities: Charges for services Sewer Utility 6,281,870 5,970,615 6,206,605 6,663,408 6,745,112 7,537,879 7,288,499 7,340,935 7,320,469 7,708,101 Airport 11,398,518 11,527,061 12,074,504 13,555,003 14,475,879 13,953,287 13,767,394 13,080,217 12,540,347 12,069,935 Park Woods 279,588 310,389 287,452 340,494 340,494 369,478 371,832 372,715 397,426 417,407 Parking 892,820 943,990 963,697 1,001,697 1,001,697 997,111 1,050,579 1,057,710 1,012,109 960,947 Bass Park 1,253,421 1,238,707 1,460,931 1,426,599 1,426,599 1,253,236 1,382,947 1,276,869 1,304,384 1,249,595 Municipal Golf Course 595,852 586,956 604,365 655,834 655,834 608,930 658,053 643,501 628,869 592,825 Economic Development 316,062 433,694 391,658 422,716 422,716 569,549 507,867 585,785 409,486 462,033 Capital grants and contributions 3,376,637 7,749,367 2,581,874 4,377,242 3,426,732 4,113,557 8,684,860 3,717,755 2,351,779 6,121,523 Total business-type activities program revenues 24,394,768 28,760,779 24,571,086 28,442,993 28,495,063 29,403,027 33,712,031 28,075,487 25,964,869 29,582,366 Total primary government program revenues 63,671,922$ 72,309,233$ 73,544,247$ 78,070,086$ 88,964,143$ 82,945,198$ 93,722,957$ 87,692,204$ 81,019,127$ 81,557,890$ * - Amounts previously reported as restricted grants have been classified into new functions beginning in 2006. (accrual basis of accounting) Last Ten Fiscal Years Changes in Net Position CITY OF BANGOR, MAINE Continued from previous page III - 4 Table 2 (con't) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Net (expense)/revenue Governmental activities (46,792,432)$ (45,381,779)$ (48,814,934)$ (47,547,762)$ (44,845,469)$ (66,879,356)$ (56,906,124)$ (52,307,812)$ (56,526,122)$ (60,972,972)$ Business-type activities (1,283,061) 1,628,729 (3,106,316) (1,756,584) (2,701,326) (2,003,100) 1,702,293 (3,647,669) (6,281,508) (4,002,322) Total primary government expense (48,075,493) (43,753,050) (51,921,250) (49,304,346) (47,546,795) (68,882,456) (55,203,831) (55,955,481) (62,807,630) (64,975,294) General revenues and other changes in net position Governmental activities: Property taxes 39,936,976 40,302,810 40,666,758 41,702,775 43,775,938 46,977,792 48,182,455 48,027,330 48,520,390 49,930,989 Payment in lieu of taxes 135,000 186,500 160,457 145,000 122,510 141,595 117,770 161,879 156,629 95,620 Excise taxes 4,306,055 4,358,409 4,752,852 4,668,614 4,641,320 4,752,005 4,694,936 4,515,752 4,596,947 4,594,821 Franchise taxes 225,224 265,598 274,986 296,566 300,768 322,526 348,163 367,672 372,542 362,088 Unrestricted grants and contributions 4,512,720 4,487,931 4,773,082 4,968,217 5,520,774 5,260,439 4,999,567 4,859,811 4,963,161 4,857,030 Unrestricted investment earnings 296,857 519,225 699,417 1,183,796 1,274,939 874,824 673,295 565,326 530,631 57,620 Indirect cost charges 483,439 472,056 - - - - - - - - Miscellaneous 131,733 8,353 32,550 260,733 161,439 93,967 135,849 92,379 16,698 112,060 Transfers (948,416) (837,806) (861,290) (871,864) (539,088) (739,179) 761,103 (637,898) (417,042) (8,772,781) Total governmental activities 49,079,588 49,763,076 50,498,812 52,353,837 55,258,600 57,683,969 59,913,138 57,952,251 58,739,956 51,237,447 Business-type activities: Unrestricted investment earnings 206,665 895,064 635,454 1,346,799 1,326,787 1,025,098 1,035,753 752,891 543,493 345,932 Gain/loss on sale of asset - - - - - - - - - (260,857) Transfers 948,416 837,806 861,290 539,088 539,088 739,179 (761,103) 637,898 417,042 8,772,781 Total business-type activities 1,155,081 1,732,870 1,496,744 1,885,887 1,865,875 1,764,277 274,650 1,390,789 960,535 8,857,856 Total primary government 50,234,669 51,495,946 51,995,556 54,239,724 57,124,475 59,448,246 60,187,788 59,343,040 59,700,491 60,095,303 Change in net position Governmental activities 2,287,156 4,381,297 1,683,878 4,806,075 10,413,131 (9,195,387) 3,007,014 5,644,439 2,213,834 (9,735,525) Business-type activities (127,980) 3,361,599 (1,609,572) 129,303 (835,451) (238,823) 1,976,943 (2,256,880) (5,320,973) 4,855,534 Total primary government 2,159,176$ 7,742,896$ 74,306$ 4,935,378$ 9,577,680$ (9,434,210)$ 4,983,957$ 3,387,559$ (3,107,139)$ (4,879,991)$ Changes in Net Position CITY OF BANGOR, MAINE (accrual basis of accounting)Last Ten Fiscal Years III - 5 Table 3 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Tax Revenues Property taxes 39,936,976$ 40,302,810$ 40,666,758$ 41,702,775$ 43,775,938$ 46,977,792$ 48,182,455$ 48,027,330$ 48,520,390$ 49,930,989$ Excise taxes 4,306,055 4,358,409 4,752,852 4,668,614 4,641,320 4,752,005 4,694,936 4,515,752 4,596,947 4,594,821 Franchise taxes 225,224 265,598 274,986 296,566 300,768 322,526 348,163 367,672 372,542 362,088 Total tax revenues 44,468,255$ 44,926,817$ 45,694,596$ 46,667,955$ 48,718,026$ 52,052,323$ 53,225,554$ 52,910,754$ 53,489,879$ 54,887,898$ CITY OF BANGOR, MAINE Governmental Activities Tax Revenues By Source Last Ten Fiscal Years(accrual basis of accounting) III - 6 Table 4 Fiscal Year 2011 2012 2013 General Fund: Nonspendable Advances to other funds 1,900,500$ 1,900,500$ 1,900,500$ Inventory and prepaid items 963,770 860,187 873,714 Restricted Education purposes 1,213,508 936,158 186,871 Municipal purposes 405,119 349,362 288,519 Committed - municipal purposes 19,033 373,753 10,583 Assigned Encumbrances - education and municipal 1,389,501 1,548,268 777,788 Municipal purposes 3,115,199 3,240,838 3,415,627 Unassigned 8,017,940 7,563,658 7,727,014 Total general fund 17,024,570$ 16,772,724$ 15,180,616$ All other governmental funds: Nonspendable Permanent Fund Principal 608,710$ 588,515$ 574,492$ Restricted Community Development Block Grant 346,605 415,956 252,479 Penobscot River 759 759 - Nonmajor Special Revenue Funds 1,637,362 1,862,992 1,730,231 Nonmajor Permanent Funds 410,337 449,974 466,951 Committed Arena Fund 6,690,287 - 2,761,541 Assigned Capital Project Fund 826,179 - 4,426,655 Capital Project Fund Encumbrances - 1,853,043 127,712 Unassigned Arena Fund - (4,603,950) - Capital Project Fund (537) - - Nonmajor Special Revenue Funds (12,257) (4,584) (5,736) Total all other governmental funds 10,507,445$ 562,705$ 10,334,325$ Only three years have been reported because 2011 was the year GASB 54 was implemented. (modified accrual basis of accounting) Last Ten Fiscal Years Fund Balances of Governmental Funds CITY OF BANGOR, MAINE III - 7 Table 5 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Revenues: Taxes: Property taxes 39,774,952$ 40,586,129$ 41,101,785$ 42,145,912$ 43,767,914$ 47,113,576$ 48,284,733$ 48,371,202$ 48,688,270$ 50,004,619$ Excise taxes 4,306,055 4,358,409 4,752,852 4,668,614 4,641,320 4,752,005 4,694,936 4,515,752 4,596,947 4,594,821 Total tax revenues 44,081,007 44,944,538 45,854,637 46,814,526 48,409,234 51,865,581 52,979,669 52,886,954 53,285,217 54,599,440 Intergovernmental 31,617,135 34,484,238 37,714,682 37,774,922 41,345,956 41,123,520 46,211,718 45,304,160 40,536,525 39,029,824 Licenses and permits 374,499 655,745 538,534 982,879 956,965 644,621 633,339 601,202 948,267 576,559 Charges for services 11,035,587 12,160,573 12,927,989 12,598,776 13,283,275 13,449,587 13,655,764 15,226,575 13,594,482 14,079,514 Program income 463,066 409,153 663,269 657,987 296,325 288,677 329,800 314,203 575,460 462,380 Revenue from money and property 1,162,796 1,255,959 2,349,812 3,621,988 3,812,356 3,836,654 3,864,984 3,473,975 4,042,881 3,067,949 Other 142,311 168,452 526,360 279,261 7,691,463 428,220 1,108,213 279,426 561,118 165,686 Total revenues 88,876,401 94,078,658 100,575,283 102,730,339 115,795,574 111,636,860 118,783,487 118,086,495 113,543,950 111,981,352 Expenditures: General government 4,619,401 4,732,331 4,642,935 4,736,885 5,122,152 5,103,378 5,422,805 4,858,721 5,390,049 5,612,408 Public safety 12,001,813 12,352,418 12,852,119 13,476,656 14,162,638 14,400,420 15,287,575 15,800,938 16,028,180 16,209,402 Health, community services and recreation 3,480,885 3,865,578 4,084,948 4,086,513 4,305,709 4,414,673 4,720,477 5,584,184 5,383,295 4,945,994 Public buildings and services 8,180,067 8,301,848 8,991,673 9,363,365 9,906,759 10,048,539 10,055,161 10,196,576 9,842,829 9,835,549 Other agencies 3,273,003 3,514,658 3,610,935 3,783,720 4,227,552 4,294,283 4,291,329 4,747,617 4,409,545 4,382,776 Education 40,341,426 42,228,691 44,817,879 45,224,974 48,293,846 50,380,309 51,590,324 51,391,657 50,159,407 49,880,770 Tax increment financing - - - - - 215,483 432,033.00 165,133.00 524,013.00 550,308 Unclassified 389,598 65,639 263,702 597,262 166,994 63,115 54,451 118,216 260,685 2,323,972 Restricted grants 6,822,298 7,282,380 8,248,872 7,787,297 9,098,706 8,360,660 8,479,740 8,232,148 7,414,001 9,202,815 Capital outlay*10,675,201 8,681,772 11,762,832 9,100,357 8,038,242 16,118,777 20,818,168 12,799,978 45,478,235 10,213,552 Debt service Principal 2,232,944 4,110,250 2,748,866 4,237,096 2,044,428 2,136,415 12,423,331 3,862,188 6,996,892 22,907,595 Interest 3,080,468 3,120,028 3,098,248 3,095,434 2,436,120 2,373,922 2,472,643 2,375,397 2,180,013 2,923,060 Other charges 5,570 37,467 5,070 4,850 299 6,000 61,952 45,988 - - Total expenditures 95,102,674 98,293,060 105,128,079 105,494,409 107,803,445 117,915,974 136,109,989 120,178,741 154,067,144 138,988,201 Excess (deficiency) of revenues over (under) expenditures (6,226,273) (4,214,402) (4,552,796) (2,764,070) 7,992,129 (6,279,114) (17,326,502) (2,092,246) (40,523,194) (27,006,849) Other financing sources/(uses) Issuance of debt 5,443,400 2,650,000 4,333,000 3,555,000 - 3,100,000 3,100,000 2,086,100 30,659,143 10,378,985 Capital leases - - - - - - - - - 456,581 Payment to escrow agent - - - - - - - - - (4,233,486) Premium on debt issuance - - - - - - - - - 748,121 Financing proceeds - - - - - 7,091,928 9,596,640 - - - Sale of assets 131,773 106,895 120,479 320,034 161,439 104,620 135,849 117,558 84,507 186,709 Transfers to other funds (5,369,448) (3,131,050) (3,099,137) (3,300,247) (2,690,305) (2,865,418) (1,789,024) (2,015,003) (1,861,301) (9,783,007) Transfers from other funds 4,421,032 2,293,244 2,237,847 2,428,383 2,151,217 2,126,239 2,550,127 1,377,105 1,444,259 1,010,226 Total other financing sources 4,626,757 1,919,089 3,592,189 3,003,170 (377,649) 9,557,369 13,593,592 1,565,760 30,326,608 (1,235,871) Net change in fund balances (1,599,516)$ (2,295,313)$ (960,607)$ 239,100$ 7,614,480$ 3,278,255$ (3,732,910)$ (526,486)$ (10,196,586)$ (28,242,720)$ Debt service as a percentage of noncapital expenditures 6.29%8.22%6.08%7.74%4.26%4.00%11.14%5.52%7.97%19.35% *Capital outlays under the modified accrual basis differ from capital outlays on the statement of activities due to capitalization thresholds andbudgetary requirements. CITY OF BANGOR, MAINE Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years(modified accrual basis of accounting) III - 8 Table 6 CITY OF BANGOR, MAINE Assessed Value and Estimated Actual Value of Taxable Property* Last Ten Fiscal Years Total Taxable Total Fiscal Estimated Estimated Personal Assessed Direct Year Residential Commercial Property¹Value Tax Rate 2004 922,374,500 549,399,100 268,555,600 1,740,329,200 22.27 2005 990,170,000 618,388,000 259,687,300 1,868,245,300 20.97 2006 1,091,628,800 713,822,300 254,225,800 2,059,676,900 19.31 2007 1,178,745,758 785,599,342 259,703,500 2,224,048,600 18.33 2008 1,275,227,064 875,870,136 254,991,600 2,406,088,800 17.74 2009 1,219,093,120 1,081,082,580 244,740,100 2,544,915,800 17.99 2010 1,255,964,001 1,113,779,399 257,018,100 2,626,761,500 17.98 2011 1,227,148,219 1,088,225,781 256,321,000 2,571,695,000 18.09 2012 1,234,270,253 1,094,541,547 248,183,200 2,576,995,000 18.00 2013 1,238,325,124 1,098,137,376 245,768,300 2,582,230,800 18.47 *It is City policy to assess at 100% of estimated actual value. ¹Personal Property consists of machinery and equipment. Real Property III - 9 Table 7 CITY OF BANGOR, MAINE Property Tax Rate - Direct and Overlapping Governments Last Ten Fiscal Years General General Total Fiscal City Fund Debt Direct Penobscot Total Tax/ Year Government Service Education Tax Rate County (Mill) Rate 2004 9.26 0.79 12.22 22.27 1.08 23.35 2005 8.20 1.18 11.59 20.97 1.08 22.05 2006 7.97 1.14 10.20 19.31 1.09 20.40 2007 7.79 1.18 9.36 18.33 1.07 19.40 2008 7.69 1.18 8.87 17.74 1.06 18.80 2009 8.12 1.16 8.71 17.99 1.06 19.05 2010 8.01 1.27 8.70 17.98 1.07 19.05 2011 7.94 1.40 8.75 18.09 1.11 19.20 2012 7.75 1.42 8.83 18.00 1.20 19.20 2013 8.08 1.41 8.98 18.47 1.18 19.65 III - 10 Table 8 CITY OF BANGOR, MAINE Principal Property Taxpayers *Current Year and Nine Years Ago 2013 2004 Assessed % of Total Assessed % of Total Taxpayer Business Value Rank Tax Base Value Rank Tax Base Bangor Historic Track Racino 112,372,000$ 1 4.36%- - General Electric Manufacturer 64,318,500 2 2.50%45,663,800$ 2 2.62% Bangor Mall LLC Shopping mall 57,809,500 3 2.24%- - Bangor Hydro Electric Utility 38,377,400 4 1.49%28,447,200 3 1.63% Inland Western Parkade Shopping mall 28,358,500 5 1.10%- - Wal Mart Stores Retailer 21,249,800 6 0.82%- - QV Realty Trust Real estate interests 15,859,900 7 0.62%11,930,300 6 0.69% Grant Trailer Sales Inc Real estate interests 15,354,400 8 0.60%- - Harvest Sunbury Village Retirement Living 14,106,400 9 0.55%- - Airport Mall Associates Shopping mall 13,667,200 10 0.53%10,244,600 9 0.60% BANMAK Associates Shopping mall - - 49,103,600 1 2.82% Bangor Savings Bank Commercial bank - - 16,593,500 4 0.95% Eastern Maine Healthcare Medical institution - - 16,027,900 5 0.92% May Department Stores Retailer - - 10,783,200 7 0.62% Cabrel Company Real estate interests - - 10,702,700 8 0.61% Sams Real Estate Trust Retailer - - 9,622,100 10 0.55% Totals 381,473,600$ 14.80%209,118,900$ 12.01% *Source - City of Bangor Tax Commitment. III - 11 Table 9 % of Subsequent Total Total Tax Fiscal Gross Tax Abate-Net Tax % of Year Tax Collection Year Levy ments Levy Amount Net Levy Collections Collections to Net Levy 2004 39,866,850 172,868 39,693,982 38,589,047 97.22%1,047,923 39,636,970 99.86% 2005 40,474,184 160,117 40,314,067 39,206,172 97.25%1,061,976 40,268,148 99.89% 2006 41,099,990 632,397 40,467,593 39,716,755 98.14%674,450 40,391,205 99.81% 2007 41,990,985 269,636 41,721,349 40,819,923 97.84%871,555 41,691,478 99.93% 2008 44,082,476 341,521 43,740,955 42,847,656 97.96%808,193 43,655,849 99.81% 2009 47,235,370 275,489 46,959,881 45,688,356 97.29%1,154,312 46,842,668 99.75% 2010 48,719,847 588,817 48,131,030 46,205,428 96.00%1,727,673 47,933,101 99.59% 2011 48,362,646 168,932 48,193,714 46,857,606 97.23%1,111,237 47,968,843 99.53% 2012 48,529,834 175,844 48,353,990 47,025,587 97.25%710,783 47,736,370 98.72% 2013 49,713,855 134,598 49,579,257 48,276,445 97.37%- 48,276,445 97.37% Collected within the Fiscal Year of the Levy CITY OF BANGOR, MAINE Property Tax Levies and Collections Last Ten Fiscal Years III - 12 Table 10 CITY OF BANGOR, MAINE Ratios of Outstanding Debt by Type Last Ten Fiscal Years Business-type ActivitiesGeneral General Total Fiscal Obligation Capital Obligation Primary Per Assessed Per Personal Year Bonds/Notes Leases Bonds Government Capita*Value Income* 2004 $60,879,479 3,491 47,994,390 108,877,360 3,430.18 6.26%11.53% 2005 $59,419,229 - 46,774,080 106,193,309 3,412.49 5.68%11.47% 2006 $61,003,363 - 45,781,229 106,784,592 3,438.67 5.18%11.56% 2007 $60,321,264 - 43,809,953 104,131,217 3,279.83 4.68%11.03% 2008 $56,998,022 - 41,722,545 98,720,567 3,157.85 4.10%10.62% 2009 $56,687,684 7,091,928 37,623,522 101,403,134 3,236.72 3.98%10.88% 2010 $61,689,447 - 34,956,548 96,645,995 3,073.00 3.68%10.33% 2011 $58,455,666 - 31,985,337 90,441,003 2,737.40 3.52%7.06% 2012 $80,674,158 - 28,707,990 109,382,148 3,314.61 4.24%9.47% 2013 $62,727,567 361,009 82,492,223 145,580,799 4,416.49 5.64%11.71% *Source: U.S. Census Bureau. Governmental Activities Ratio of Net Bonded Debt III - 13 Table 11 CITY OF BANGOR, MAINE Ratio of Net General Obligation Debt to Assessed Value and Net General Obligation Debt Per Capita Last Ten Fiscal Years Fiscal Assessed Net Bonded Assessed Per Year Population*Value GO Debt**Value Capita 2004 31,741 1,740,329,200 69,638,974 4.00%2,193.98 2005 31,119 1,868,245,300 65,988,998 3.53%2,120.54 2006 31,054 2,059,676,900 66,990,510 3.25%2,157.23 2007 31,749 2,224,048,600 65,725,523 2.96%2,070.16 2008 31,262 2,406,088,800 61,824,071 2.57%1,977.61 2009 31,329 2,544,915,800 60,937,500 2.39%1,945.08 2010 31,450 2,626,761,500 65,369,337 2.49%2,078.52 2011 33,039 2,571,695,000 59,310,719 2.31%1,795.17 2012 33,000 2,576,995,000 81,392,299 3.16%2,466.43 2013 32,963 2,582,230,800 62,727,567 2.43%1,902.97 *Source: U.S. Census Bureau. **Net Bonded General Obligation Debt Consists of all non-self supporting general obligation debt. Ratio of Net Bonded Debt III - 14 Table 12 CITY OF BANGOR, MAINE Computation of Direct and Overlapping Debt June 30, 2013 Percentage Amount Total Debt Applicable Applicable Outstanding to Bangor to Bangor Direct Debt City of Bangor General Obligation Bonds 145,219,790$ 100.00%145,219,790$ Overlapping Debt Penobscot County 2,750,000$ 23.68%651,200$ Total Debt 147,969,790$ 145,870,990$ III - 15 Table 13 Total Net Debt Legal Percentage of Fiscal Debt Applicable to Debt Net Debt to Year Limit Limit Margin Debt Limit 2004 $261,240,000 108,873,869 152,366,131 41.68% 2005 $279,202,500 106,193,307 173,009,193 38.03% 2006 $309,495,000 106,784,592 202,710,408 34.50% 2007 $332,092,500 104,131,217 227,961,283 31.36% 2008 $353,737,500 98,720,567 255,016,933 27.91% 2009 $356,670,000 94,311,206 262,358,794 26.44% 2010 $365,400,000 96,645,995 268,754,005 26.45% 2011 $369,997,500 90,441,003 279,556,497 24.44% 2012 $368,467,500 109,382,148 259,085,352 29.69% 2013 $369,300,000 145,219,790 224,080,210 39.32% Total State Valuation 2,462,000,000$ Debt Limitation: 15 % of State Valuation 369,300,000 Debt Applicable to Debt Limitation: General Obligation Bonds: Municipal 114,066,749 School 17,687,965 Sewer 13,465,076 Total debt applicable to limit 145,219,790 Legal Debt margin 224,080,210$ CITY OF BANGOR, MAINE Legal Debt Margin Information Last Ten Fiscal Years Legal Debt Margin Calculation for Fiscal Year 2013 III - 16 Table 14 CITY OF BANGOR, MAINE Demographic and Economic Statistics Last Ten Fiscal Years Median Per Public Unemploy- Fiscal Household Capita Median School ment Year Population *Income*Income*Age*Enrollment**Rate *** 2004 31,741 29,740 19,295 36.1 4,006 4.30% 2005 31,119 29,740 19,295 36.1 3,989 4.50% 2006 31,054 29,740 19,295 36.1 3,962 4.40% 2007 31,749 29,740 19,295 36.1 3,913 4.40% 2008 31,262 29,740 19,295 36.1 3,886 5.10% 2009 31,329 29,740 19,295 36.1 3,878 7.80% 2010 31,450 29,740 19,295 36.1 3,821 8.10% 2011 33,039 38,775 25,344 36.7 3,830 7.50% 2012 33,000 34,993 25,344 37.5 3,819 7.10% 2013 32,963 37,707 24,945 36.8 3,875 6.70% *Source: U.S. Census. **Source: Bangor School Department. ***Source: Maine Bureau of Labor Statistics. III - 17 Table 15 CITY OF BANGOR, MAINE Principal Employers *Calendar Year and Nine Years Ago Employees Employer Location Employees Employer Location 1000-4000 Eastern Maine Medical Center Bangor 1000-4000 Eastern Maine Medical Center Bangor Bangor Mall Bangor Bangor Mall Bangor University of Maine Orono University of Maine Orono City of Bangor Bangor City of Bangor Bangor Hannaford Supermarkets Throughout Cianbro Corporation Throughout WalMart Throughout 500-999 Bangor Savings Bank Bangor 500-999 St. Joseph Hospital Bangor LL Bean Bangor Webber Energy Co Bangor Microdyne Orono Microdyne Orono Acadia Hospital Bangor General Electric Corp Bangor Verso Corp Paper Mill Bucksport Shop & Save Supermarkets Throughout St. Joseph Hospital Bangor Community Health & Counseling Bangor * Source - Bangor, Maine Community & Economic Profile Report. Published by City of Bangor Community and Economic Development Department. 2012 2003 III - 18 Table 16 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Function General government 90 87 88 94 85 80 78 78 80 86 Public safety Police 86 87 89 90 87 92 94 92 88 88 Fire 97 96 97 94 97 94 93 95 95 91 Health, community services and recreation 31 31 32 39 41 37 41 30 29 43 Public building and services 67 64 68 71 67 69 68 64 66 73 Education 561 571 573 562 618 618 621 621 610 580 Sewer Utility 23 23 23 23 23 23 23 24 23 27 Airport 73 75 76 81 87 88 81 82 83 90 Park Woods 3 3 3 3 3 3 2 2 2 1 Parking 2 2 2 2 2 2 2 2 2 2 Bass Park 8 9 9 9 7 8 8 7 6 5 Municipal Golf Course 3 3 3 9 3 3 3 3 3 3 Economic Development 3 3 3 3 3 2 3 4 4 4 Totals 1,047 1,054 1,066 1,080 1,123 1,119 1,117 1,104 1,091 1,093 * Source - City of Bangor Human Resource Department. CITY OF BANGOR, MAINE Full-time Equivalent City Government Employees by Function* Last Ten Fiscal Years III - 19 Table 17 CITY OF BANGOR, MAINE Operating Indicators by Function* Last Ten Calendar Years 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Function Code enforcement Building permits 522 514 537 550 485 501 427 518 405 453 Certificates of occupancy 342 341 432 446 430 440 341 448 350 361 Sign permits 98 107 115 116 118 103 90 96 70 69 Police Calls for service 24,407 23,945 27,052 28,157 32,392 34,329 32,351 30,167 31,640 33,740 Fire Calls for service 7,470 7,805 7,492 7,992 7,477 7,990 7,357 8,000 9,020 9,044 Sewer Treated flow (billions of gallons)3.42 2.75 4.23 3.62 3.21 3.89 3.55 2.81 3.10 2.68 Biosolids (cubic yards)9,379 9,280 9,348 9,775 10,043 10,561 10,509 9,046 9,422 8,095 * Source - City of Bangor Departmental records. III - 20 Table 18 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Function Public safety Police: Stations 1 1 1 1 1 1 1 1 1 1 Vehicles 56 57 51 52 47 50 54 54 50 50 Fire: Stations 3 3 3 3 3 3 3 3 3 3 Vehicles 20 20 24 27 28 31 32 35 36 36 Public works Streets (miles)422 422 422 422 427 429 429 429 431 431 Sidewalks (miles)99.6 99.6 99.6 99.6 99.6 99.6 99.6 101.4 101.7 101.7 Parks and recreation Parks 29 29 29 29 29 29 29 29 29 29 Parks acreage 950 950 950 950 950 950 950 950 950 950 Public swimming pools 2 2 2 2 2 2 2 2 2 2 Public golf courses 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 Indoor ice arena 1 1 1 1 1 1 1 1 1 1 Semi-pro baseball stadium 1 1 1 1 1 1 1 1 1 1 Sewer Treatment plants 1 1 1 1 1 1 1 1 1 1 Pump stations 5 5 5 5 5 5 5 5 5 5 Miles of sanitary sewers 103 103 103 103 103 103 103 103 103 103 Miles of combined sewers 44 44 44 44 44 44 44 44 44 47 * Source - City of Bangor Departmental records. CITY OF BANGOR, MAINE Capital Asset Statistics by Function* Last Ten Fiscal Years Fiscal Year