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2010City of Bangor, Maine Comprehensive Annual Financial Report for Fiscal Year June 30,2010 CITY OF BANGOR, MAINE Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2010 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, 2010 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 - 3 Basic Financial Statements:Exhibit Government-wide Financial Statements: Statement of Net Assets 1 II - 17 Statement of Activities 2 II - 18 Fund Financial Statements: Balance Sheet - Governmental Funds 3 II - 19 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 4 II - 20 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 5 II - 21 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund 6 II - 22 Statement of Net Assets – Proprietary Funds 7 II - 23 Statement of Revenues, Expenses and Changes in Net Assets – Proprietary Funds 8 II - 25 Statement of Cash Flows – Proprietary Funds 9 II - 26 Statement of Fiduciary Net Assets – Fiduciary Funds 10 II - 28 Notes to the Financial Statements II - 29 Required Supplemental Information II - 55 CITY OF BANGOR, MAINE Table of Contents, Continued Schedule Page Combining and Individual Fund Statements and Schedules: Balance Sheet – General Fund A – 1 II - 56 Schedule of Revenues, Expenditures and Changes in Undesignated Fund Balance – Budget and Actual – Budgetary Basis – General Fund A – 2 II - 57 Combining Balance Sheet – Nonmajor Governmental Funds B – 1 II - 61 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Governmental Funds B – 2 II - 62 Combining Balance Sheet – Nonmajor Special Revenue Funds B – 3 II - 63 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Special Revenue Funds B – 4 II - 64 Combining Balance Sheet – Nonmajor Permanent Funds B – 5 II - 65 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Permanent Funds B – 6 II - 66 Combining Statement of Net Assets – Nonmajor Proprietary Funds C – 1 II – 67 Combining Statement of Revenues, Expenses and Changes in Net Assets – Nonmajor Proprietary Funds C – 2 II - 68 Combining Statement of Cash Flows - Nonmajor Proprietary Funds C – 3 II - 70 Schedules of Revenues, Expenditures and Encumbrances – Budget and Actual Budgetary Basis: Sewer Utility Enterprise Fund C – 4 II - 72 Airport Enterprise Fund C – 5 II - 73 Park Woods Enterprise Fund C – 6 II - 74 Parking Enterprise Fund C – 7 II - 75 Bass Park Enterprise Fund C – 8 II - 76 Municipal Golf Course Enterprise Fund C – 9 II - 77 Economic Development Enterprise Fund C – 10 II - 78 Fiduciary Funds: Statement of Change in Assets and Liabilities – Agency Fund D – 1 II - 79 Capital Assets Used in the Operation of Governmental Funds: Schedule of Changes by Function and Activity E – 1 II - 80 Other Information: Assessed Valuation, Commitment and Collections F – 1 II - 81 Undesignated Fund Balance Sufficiency Calculation F – 2 II - 82 CITY OF BANGOR, MAINE Table of Contents, Continued STATISTICAL SECTION Table Page Financial Trends: Net Assets by Component 1 III – 1 Changes in Net Assets 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 I-2 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. 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 of Maine’s 22 cities. 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 has become a 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. In October 2010 the City Council announced that Catherine Conlow would begin her tenure as City Manager in November 2010. 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. Under a recent change in state law, the Council approved school appropriation must be ratified by the voters of Bangor at a referendum held in June I-3 prior to the start of the City’s fiscal year. Once approved, the expenditure of 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, 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 an appropriation resolve. I-4 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 2009 unemployment rate of 7.6% continues to be on par with or below both country and state rates of 9.3%, 8.0%, 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 2009, Bangor’s share of the State’s retail sales was 9%, and its share of County sales was 71%. 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 last ten years, the average annual increase in assessed value is 6.1%. Tax base growth, the City’s focus on controlling budgetary growth, and ramped up state funding for education resulted in a 19% reduction in the City’s tax rate from 2001 to 2010. 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. 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’s Committee structure on an as needed basis. I-5 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. In addition, after many years of investigation and negotiations with several federal agencies, the City has completed the major portion of the coal tar remediation. The City continues to work with State and Federal agencies to ensure and monitor the long term impacts/success of the project. Under a development agreement with Bangor Historic Track, a wholly owned subsidiary of Penn National Gaming, the City receives a percentage of gross slot revenue as well as land lease payments and property taxes on the new development associated with Maine’s only gaming facility. In October 2005, the City established a special revenue fund to account for its share of gross slot revenue. In addition, the Council Order establishing this fund specifies that its primary use will be to construct a new arena in Bangor to replace the Bangor Auditorium which opened in Bass Park in 1954. Based on a Market Sizing and Feasibility Study related to the construction of a new arena and meeting space, the City Council contracted for schematic design services as well as the hiring of a preconstruction manager. The initial plan has been submitted to the City, anticipating a construction start date of 2011. At this time, the City Council is reviewing the overall scope of the project and is expected to make a final decision in early 2011. Over the years, the City has invested significant resources and effort in improving our local environment and protecting 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. We believe it was this approach that led to the City’s success in obtaining the maximum award of $3,000,000 from the Clean Water State Revolving Loan Fund capitalized via the American Recovery and Reinvestment Act of 2009. In order to achieve significant long term energy savings as well as to provide environmental, occupant comfort, and indoor air quality improvements, the City invested $1.2 million in a variety of projects as a result of an energy audit of all its facilities. The audit indicated that the City would be able to achieve adequate savings on an annual basis to amortize the debt for the projects in 9.34 years. After the end of the first year of operations, the City received an energy audit report. The report detailed the reduced energy demand as well as the financial impact. Due to the improvements made the City was able to avoid $196,371 of annual utility costs and lowered its payback period on this investment to 6.08 years. I-6 Relevant Financial Policies. City policy prescribes uses for undesignated fund balances. In general, undesignated 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 designated fund balances, to respond to unforeseen emergencies, and to provide overall financial stability. During the year, $140,000 was appropriated to fund costs associated with the City Manager’s retirement and the cost to conduct an executive search and recruitment for a replacment, in compliance with the aforementioned policy. By Charter, the City is required to maintain a balance between 5% and 10%, and the Council has determined that a reasonable target is 7.5%. Unreserved, undesignated fund balance in the general fund as of June 30, 2010 was 9.99% of expenditures, net of debt service. Awards and Acknowledgements. The Government Finance Officers Association of the United States and Canada (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, 2009 for the fourteenth 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,py Debbie Cyr Finance Director CITYMANAGERCITIZENSOFBANGORCITIZENCOMMISSIONSCITIZENBOARDSCITYCLERKCITYCOUNCILASSESSINGCITYSOLICITORVOTERREGISTRATIONANIMALCONTROLELECTIONSCITY OF BANGOR ORGANIZATIONAL CHART Revised (06-08)FINANCEAUDITINGTREASURYRISK &ENVIRONMENTALMANAGEMENTINFORMATIONSERVICESPURCHASINGPUBLIC WORKSSEWERMAINTENANCEWASTEWATERTREATMENTHARBORENGINEERINGPLANNINGCODEENFORCEMENTINFRASTRUCTURE ANDDEVELOPMENT SUPPORTPOLICEDETECTIVEPATROLADMINISTRATIONSERVICESCOMMUNITY &ECONOMIC DEV.COMMUNITYDEVELOPMENTECONOMICDEVELOPMENTDOWNTOWNPROGRAMSPARKINGMANAGEMENTBANGORINTERNATIONALAIRPORTCIVICCENTERAUDITORIUMSTATEFAIRBASS PARKADMINISTRATIONFIREPREVENTIONBUREAUFIREFIGHTINGFIRELABORRELATIONSADMINISTRATIVESERVICESHUMANRESOURCESFLEETMAINTENANCEBATCOMMUNITYCONNECTORCENTRALSERVICESHEALTH ANDCOMMUNITYSERVICESGOVERNMENTOPERATIONSPARKSMAINTENANCERECREATIONPARKS ANDRECREATIONGOLFCOURSERECORDSBANGOR REGION PUBLIC HEALTH & WELLNESS DIVISIONHOUSING & COMMUNITY SERVICES DIVISION I-9 City of Bangor, Maine Elected Officials and Principal Administrative Officers June 30, 2010 City Council Richard I. Stone, Mayor Patricia A. Blanchette Richard B. Bronson Geoffrey M. Gratwick Susan M. Hawes David Nealley Gerry G.M. Palmer Cary M. Weston Harold A. Wheeler City Staff Robert W. Farrar, Interim City Manager Benjamin F. Birch, City Assessor Patti Dubois, City Clerk Norman Heitmann, City Solicitor School Committee Phyllis S. Guerette, Chair Mary Budd Warren J. Caruso Nichi S. Farnham Beth Grant Phyllis M. Shubert Christine H. Szal, Vice Chair School Staff Betsy Webb, Superintendent of Schools FINANCIAL SECTION II-1 Certified Public Accountants and Business Consultants Report of Independent Auditors City Council City of Bangor, Maine: We have audited the accompanying financial statements of the governmental activities, the business- type activities, each major fund, and the aggregate remaining fund information of the City of Bangor, Maine, as of and for the year ended June 30, 2010, which collectively comprise the City’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City of Bangor, Maine's management. 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Bangor, Maine, as of June 30, 2010, and the respective changes in financial position, and cash flows, where applicable, thereof and the respective budgetary comparison for the General Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued a report dated December 20, 2010, 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 and should be considered in assessing the results of our audit. Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis and Schedule of Funding Progress – Retiree Healthcare Plan, 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. II-2 City Council Page 2 We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Bangor, Maine’s financial statements as a whole. The introductory section, combining and individual nonmajor 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 nonmajor 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 financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the 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. December 20, 2010 South Portland, Maine II-3 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, 2010. In addition to comparative information from the government-wide statements, comparative data is 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 at the close of the most recent fiscal year by $208.7 million (net assets). At the close of fiscal year 2010, the City of Bangor’s governmental funds reported combined ending fund balances of $27.7 million, a decreased of $3.8 million over the prior year. Approximately 79% of the total amount, or $21.8 million, is available for spending at the City’s discretion (unreserved fund balance). The City of Bangor has a fund balance policy. The City strives to maintain a general fund unreserved/undesignated fund balance of 5% to 10% of current expenditures less debt service. At the end of the current fiscal year, unreserved undesignated fund balance for the General Fund was $8.5 million, or 9.99% of the general fund expenditure base. The annual calculation is included within the financial statements as Schedule F-2. The total liabilities of the City’s governmental funds increased by $100 thousand (0.7%), which is considered unchanged, and enterprise fund liabilities decreased by $2.5 million (5.6%) and is primarily due to principal payments exceeding net debt issued. Accounts payable 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. The statement of net assets includes all of the City’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. II-4 The statement of activities presents information showing how the City’s net assets changed during the most recent fiscal year. All changes in net assets 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 leaves). 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-17 to II-18 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. 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 II-5 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 and Economic Development Funds are considered to be major. Data from four 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 Assets 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-29 through II-54 of this report. Government-wide Financial Analysis The following is a condensed version of the Statement of Net Assets. Governmental Activities Business-type Activities Total 2010 2009 2010 2009 2010 2009 Current & other assets 41,792,130 44,579,763 23,846,562 25,301,307 65,638,692 69,881,070 Capital assets, net 73,365,179 74,639,311 188,358,413 187,398,066 261,723,592 262,037,377 Total assets 115,157,309 119,219,074 212,204,975 212,699,373 327,362,284 331,918,447 Long-term debt outstanding 67,109,938 74,974,212 37,063,454 39,606,183 104,173,392 114,580,395 Other liabilities 12,415,061 11,619,566 2,116,512 2,045,124 14,531,573 13,664,690 Total liabilities 79,524,999 86,593,778 39,179,966 41,651,307 118,704,965 128,245,085 Net assets: Invested in: Capital assets, net of related debt 50,840,578 53,356,885 159,415,493 156,120,884 210,256,071 209,477,769 Restricted 1,120,413 6,198,372 - - 1,120,413 6,198,372 Unrestricted (16,328,681)(26,929,961)13,609,516 14,927,182 (2,719,165)(12,002,779) Total net assets 35,632,310 32,625,296 173,025,009 171,048,066 208,657,319 203,673,362 II-6 By far the largest portion of the City’s net assets reflects its 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 assets 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 assets has a total deficit of approximately $2.7 million, the governmental activity portion is significantly higher with a deficit of $16.3 million. This is primarily due to $24.4 million in outstanding pension obligation bonds as well as the impacts of Governmental Accounting Standards Board (GASB) pronouncements. GASB 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions (OPEB) had a significant impact on both the governmental and business-type activities. In the end, the City is able to report positive balances in the remaining two categories of net assets for the government as a whole, and business-type activities net assets continue to remain positive in all categories. Governmental-type net assets increased $3.0 million. The major components associated with the increase in governmental-type net assets is the receipt of $2.4 million of arena fund revenues that result from the racino operation, and a $1.3 million increase in outstanding general obligation bonds and leases. The increase in bonded debt was used to fund the annual on-going reinvestment of governmental assets and does not include single significant acquisition. The aforementioned increases in net assets are offset by an $800 thousand increase to the City’s OPEB liability recorded in accordance with GASB 45. Business-type net assets increased $2.0 million. Although business-type operating revenues remained relatively unchanged from the prior year, there was a significant increase in net assets due largely to the increase in capital grants and contributions within the Parking Fund, related to the construction of a parking deck, and the Bass Park Fund for improvements made to the harness racing facility by the leaseholder. Total business-type expenses increased $600 thousand, which is wholly attributable to an increase in equipment purchases by the Airport that did not meet the threshold for capitalization. This increased expense partially offsets the increase in net assets due to increase capital grants and contributions. All other operating expenses remained relatively flat in total. II-7 Changes in Net Assets The following is a condensed version of the Statement of Activities. Governmental Activities Business-type Activities Total 2010 2009 2010 2009 2010 2009 Revenues Program Revenues Charges for services 17,748,299 17,318,044 25,027,171 25,289,470 42,775,470 42,607,514 Operating grants & contributions 35,683,710 34,155,649 - - 35,683,710 34,155,649 Capital grants & contributions 6,578,917 2,068,478 8,684,860 4,113,557 15,263,777 6,182,035 General Revenues Property and other taxes 53,343,324 52,193,918 - - 53,343,324 52,193,918 Grants and contributions not Restricted to specific programs 4,999,567 5,260,439 - - 4,999,567 5,260,439 Other 809,144 968,791 1,035,753 1,025,098 1,844,897 968,791 Total Revenues 119,162,961 111,965,319 34,747,784 30,428,125 153,910,745 142,393,444 Expenses General government 8,279,943 7,868,247 - - 8,279,943 7,868,247 Public safety 16,898,374 15,671,645 - - 16,898,374 15,671,645 Health, community and recreation 9,331,784 9,168,870 - - 9,331,784 9,168,870 Public buildings and services 11,300,352 9,671,469 - - 11,300,352 9,671,469 Other agencies 4,658,904 4,580,661 - - 4,658,904 4,580,661 Education 52,763,860 54,294,824 - - 52,763,860 54,294,824 Arena Development 39,075 51,332 - - 39,075 51,332 Community development 1,506,038 912,992 - - 1,506,038 912,992 Infrastructure 5,079,985 2,141,079 - - 5,079,985 2,141,079 Waterfront 79,911 9,252,263 - - 79,911 9,252,263 Public transportation 2,792,904 3,042,434 - - 2,792,904 3,042,434 Interest on debt 2,555,839 2,651,599 - - 2,555,839 2,651,599 Tax increment financing 1,630,081 1,114,112 - - 1,630,081 1,114,112 Sewer Utility - - 6,253,436 6,197,277 6,253,436 6,197,277 Airport - - 20,532,553 19,934,243 20,532,553 19,934,243 Economic Development - - 634,764 712,195 634,764 712,195 Park Woods - - 529,610 590,250 529,610 590,250 Parking - - 1,402,922 1,374,909 1,402,922 1,374,909 Bass Park - - 1,923,073 1,851,914 1,923,073 1,851,914 Municipal Golf Course - - 733,380 745,339 733,380 745,339 Total Expenses 116,917,050 120,421,527 32,009,738 31,406,127 148,926,788 151,827,654 Excess (deficiency) before transfers 2,245,911 (8,456,208) 2,738,046 (978,002) 4,983,957 (9,434,210) Transfers 761,103 (739,179) (761,103) 739,179 - - Change in net assets 3,007,014 (9,195,387) 1,976,943 (238,823) 4,983,957 (9,434,210) II-8 Governmental Activities The cost of all governmental activities was $116.9 million. As shown on the Statement of Activities, the total amount financed by the property tax was $48.2 million, or 41.2% 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 $35.7 million. Capital grants and contributions accounted for $6.6 million. The City also received $11.0 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 decreased $3.5 million over the prior year. No additional programs were funded by the City in the current year, nor were any eliminated. FY2009 activities include two significant one-time governmental activities expenses; costs related to school department energy conversation measures ($7.1 million), and the recognition of a pollution remediation obligation liability ($7.6 million) related to a coal tar deposit in the Penobscot River. The results for FY2010 include nearly $5.2 million of expenses related to activities funded by the American Recovery Reinvestment Act and other new federal grants funds such as; supplementing education based equipment, tuition, services and supplies, a neighborhood stabilization program, nonpoint source pollution improvements, public safety training and equipment, sidewalk improvements and four new police officers. Public building and services includes a significant increase in costs ($2 million) due to the maintenance and reconstruction of downtown parking structures. For FY2010, the City employees received a 3% of cost of living adjustment and health insurance costs continued to increase at a much slower rate than they had historical (6.64% increase effective January 1, 2010). 0 10 20 30 40 50 60 (in millions)General GovernmentPublic SafetyPublic Buildings & ServicesHealth, Community & RecreationOther AgenciesEducationArena DevComm DevelopInfrastructureWaterfront Public TransportationTIFInterest on DebtExpenses and Program Revenues - Governmental Activities Expenses Revenues II-9 Total governmental activities revenues increased $7.2 million, or 6.4%. The largest single source of revenue continues to be the property tax, which increased $1.2 million due to a modest increase in assessed value of 1.6%, which was attributable to new development/improvements within the City during the prior fiscal year. The remaining increase in governmental activities is directly related to nearly $5.2 million of activities funded by the American Recovery Reinvestment Act and other new federal grants funds such as; supplementing education based equipment, tuition, services and supplies, a neighborhood stabilization program, nonpoint source pollution improvements, public safety training and equipment, sidewalk improvements and four new police officers. Business-type Activities Total business-type activities expenses were relatively unchanged compared to prior year levels, with an increase 1.9%, or $600 thousand. For FY2010, the City employees of business-type activities also received a 3% of cost of living adjustment and were subject to the much slower rate of increase in health insurance costs than they had historical (6.64% increase effective January 1, 2010). Revenues by Source - Governmental Activities 15% 30% 6% 40% 4%4%1%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 or 14.7% ($4.3 million), which is wholly attributable to an increase in capital grants and contributions. The increase in capital grants and contributions is due to downtown tax increment financing funds received for the construction of a parking deck within the Parking Fund and the capital contributions made by the leaseholder for harness racing improvements at the Bass Park facility. Revenues by Source - Business-type Activities Unrestricted Investment Earnings 3% Capital Grants and Contributions 25% Charges for Services 72% Charges for Services Capital Grants and Contributions Unrestricted Investment Earnings 0 5 10 15 20 25 (in millions)Sewer UtilityAirportPark Woods ParkingBass 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 expendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of the net resources available for spending at the end of the fiscal year. At fiscal year end, the City of Bangor’s governmental funds reported combined ending fund balances of $27.7 million, a decrease of $3.8 million from the prior year balance of $31.5 million. Of that decrease $3.7 million, is a decrease in restricted Penobscot River funds, as the coal tar remediation work was undertaken in this fiscal year. Of the ending balance of $27.7 million, approximately 79% of this total ($21.8 million) constitutes unreserved fund balance that is available for spending at the City’s discretion. The remainder is reserved, indicating that it is not available for new spending because it has already been committed for various purposes including liquidating prior period contracts and purchase orders ($3.5 million), reserving for potential non-repayment of interfund balances ($1.7 million), or set aside for a variety of other restricted purposes ($660 thousand). 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 total unreserved fund balance of the general fund was $13.2 million ($4.7 million of which has been designated by management for subsequent years’ expenditures). The general fund’s total fund balance was $15.9 million, a slight increase from the prior year’s balance of $15.5 million. Designated fund balances increased $500 thousand, the majority of which is due to an increase in School Department balances carried. The City’s undesignated fund balance decreased $240 thousand. During the year, the Council appropriated $140 thousand from undesignated fund balance to fund costs associated with the City Manager’s retirement and the cost to undertake an executive search and recruitment process for a replacement. The remaining decrease in undesignated fund balance represents the FY2010 revenue shortfalls that could not be fully recovered through reducing expenditures. The most significant revenue shortfall ($570 thousand) being the mid-year reduction in the revenue sharing pool made at the State level. The Arena Fund continues to outperform the City’s initial projections by approximately 10% per year. As stated previously, these funds have been set aside by the City Council to finance the replacement of the current Bangor Auditorium. In early 2010, the City Council reviewed the recently completed Market Feasibility and Facility Sizing report as well as a report of recommendations of the Special Committee on Arena Implementation, a citizen committee appointed by the Council. Based upon this review, in May 2010, the Council authorized the execution of an architectural contract to schematic design level as well as contract with a pre- construction manager to develop a guaranteed maximum price for the design. The Capital projects fund varies significantly from year to year depending upon City Council priorities and available funding opportunities. Total expenditures increased $15.0 million over the prior year. Of that increase, $10.4 million is related to the refunding of capital project related debt. This refunding did not extend the term of the debt and results in cumulative interest cost savings of $1.8 million over the remaining life of the bonds. In addition, the City neared completion of the coal tar remediation project in the Penobscot River ($7.6 million). II-12 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 unrestricted net assets of the seven enterprise funds increased $2 million to a total of $173 million. Both operating revenues and expenses remained relatively flat. The increase in net assets is related to the increase in capital grants and contributions within the Parking Fund, related to the construction of a parking deck, and the Bass Park Fund for improvements made to the harness racing facility by the leaseholder. 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 $3.4 million. There were minimal additional amendments to the originally adopted budget. The City’s commitment to budgetary integrity continues, with actual revenues trailing budgeted amounts by less than .5%, or $400 thousand, while municipal expenditures were under budget by 5.7%, or $5.5 million. The majority of under expenditure is related to education, which were $4.6 million or 8.8% under budget. By statute, education balances must be segregated from municipal balances. The remaining expenditure variance is directly related to lower actual fuel costs than originally anticipated. Capital Asset and Debt Administration Capital assets. As of June 30, 2010, the City of Bangor’s investment in capital assets for its governmental and business-type activities amounted to $261.7 million (net of accumulated depreciation), a decrease of $300 thousand over the prior year. This investment includes land, buildings, machinery and equipment, roads, runways, and sewer lines. The total decrease in the City’s investment in capital assets for the current fiscal year was minimal when netted against current year depreciation expense. Governmental activities investment increased $2.3 million, and business-type activities invested $10.6 million. Major capital asset events during the current fiscal year included the following; With funding from the City’s Downtown Development District TIF, the City replaced its aging Columbia Street Parking Deck. This facility is centrally located to the core downtown and has the highest demand for use at a cost of $1.8 million. Based on the availability of developer funds and traffic impact fees, the City was able to complete a reconfiguration of traffic in the mall area, to provide enhanced and safer access in a high traffic area at a cost of $700 thousand. The City continues to garner Federal, State and local funding (provided via the Downtown Development District TIF) for investment in its waterfront. This year the City invested an additional $1.2 million on our waterfront. The project includes additional utilities, park and open space, as well as surface parking. Leaseholder improvements to the harness racing facilities at Bass Park, which included the removal of aging structures and the construction a new paddock and barn, were received in the amount of $3.6 million. The Airport Fund invested $7.1 million in operational assets at Bangor International Airport including apron improvements, energy conservation projects, replacement of aircraft servicing equipment, and the acquisition of aircraft fueling equipment from a third party provider, whose operations were taken over by Airport personnel. II-13 Capital Assets (net of depreciation) Governmental Business-type Activities Activities Land and improvements 10,443,204 4,948,656 Buildings and improvements 41,701,660 16,915,655 Machinery and equipment 3,250,570 1,808,597 Vehicles 6,073,914 - Infrastructure 11,324,973 47,162,011 Parking structures -3,697,552 Aircraft operational assets - 106,775,193 Construction in process 570,858 7,050,749 Total 73,365,179 188,358,413 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 $96.6 million, an increase of $2.3 million during the year. The City’s general obligation debt obtained a “AA” rating from Standard & Poor’s and a “A1” rating from Moody’s. 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 $365.4 million, an amount which is significantly in excess of existing general obligation debt. Additional information on the City’s long-term debt can be found in Note I on pages II-42 to II- 45 of this report. Bonded Debt Outstanding (in millions) $34.9 $61.7 Governmental Activities Business-type Activities II-14 American Recovery and Reinvestment Act (ARRA) of 2009 Through existing entitlement programs and competitive award processes, the City was awarded $8.3 million in ARRA funding. Major areas of funding are as follows; Through a competitive grant application process, the City successful obtained the maximum award of $3 million from the Environmental Protection Agency Clean Water State Revolving Loan Fund (the award is in the form of a 0% loan with 50.6% of the principal forgiven). The funds are being used for a variety of non point source stormwater improvements on both publicly and privately owned property. As of December 2010, 97% of the funds have been expended and the City is within the expenditure guidelines established by the EPA. In 2010, the School Department was awarded $2.2 million in support of three programmatic areas: stabilization funds ($800 thousand), Title I ($800 thousand), and IDEA ($500 thousand). Nearly $1.7 million of these funds were expended during FY2010. Budget stabilization funding was used to increase the number of laptops in the classroom and for necessary capital improvements. Title I funds were used in schools determined to be “free and reduced” to enhance student knowledge in math and reading. IDEA funds were used to supplement the general budget for such items as tuition, contracted services and supplies. In FY2011, the School Department was awarded an additional $1.9 million to support similar programs as noted in FY2010. The City was awarded $900 thousand in Department of Justice funding, the largest portion ($700 thousand) of which is funding the cost of four additional police officers for a three year period. As a Community Development Block Grant (CDBG) entitlement community, the City of Bangor was awarded an additional $300 thousand in funding. The funds will be used to supplement $200 thousand in Energy Efficiency Block Grant and local funds to convert downtown streetlights to LED fixtures and to fund sidewalk improvement in low to moderate income neighborhoods. As of December 2010, the LED streetlight conversion is complete and 88% of the sidewalk funding has been expended. Economic Factors and Next Year’s Budget and Rates The unemployment rate for the City of Bangor for calendar year 2009 was 7.6%, which is on par with the State’s rate of 8.0%. While Bangor represents less than 3% of the state’s population, the City’s share of retail sales remains in excess of 9% of total statewide sales and 71% of Penobscot County sales. The increase in residential construction that began in 2002 has continued, albeit at a slower pace, and without a need for the City to significantly improve infrastructure to accommodate this growth. Bangor has experienced a slowing in the rate of appreciation of existing homes. We project that existing home values will remain flat or decrease slightly in the coming year compared to the 5% to 7% range experienced in recent years. In November 2005, Penn National Gaming opened a “racino” (slot machine operation) at an interim location in the City. A permanent gaming facility was completed in the summer of 2008, which includes a 1,500 car parking garage, a 152 room seven story hotel, and approximately 110,000 square feet for gaming, at a cost of approximately $131 million. II-15 The Council has adopted a policy directing all rents and state taxes received from the operation of the slot facility to a separate special revenue fund, the Arena Fund. The primary purpose of this fund is to provide the necessary resources to construct a new arena to replace the Bangor Auditorium which opened in Bass Park in 1954. As noted above (financial analysis – Arena Fund) the City Council has received a schematic design and pricing for the replacement of the current auditorium and civic center. At this time, the City Council is reviewing the overall scope of the project and is expected to make a final decision in early 2011. The Council’s budgetary goal is approximately $65 million. Between the revenue received by the City from the gaming operation coupled with a portion of the existing Downtown Development TIF current conservative projections estimate that the City could support this level of investment. The City is subject to a state statutory 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 2010, the City’s LD 1 tax levy limit was as follows: Prior Year Base Municipal Commitment $ 20,967,582 Growth Factor: 7.57% Average Real Personal Income 2.28% Property Growth Factor 5.29% Net New State Funds - Municipal Commitment Limit $ 22,554,913 The Fiscal Year 2011 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. This model establishes a schedule designed to increase the State’s share of total Essential Programs and Services costs to 55% over a four year period. 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 2010 and 2011 in order to fund such services and programs and their actions were approved, as required by State Statute 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. To date, the City has seen 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 slowed. In November, the Governor’s office announced that the Maine Revenue Forecasting Committee’s has projected an increase in State revenues in both current and future State II-16 budgets and that the State unemployment rate continues to decline through October. The Maine State Legislative session begins in January 2011, it remains unseen as to whether or not there will be a need to address some form of current year budget shortfall, but the larger challenge will likely be the adoption of the 2012-13 biennium budget. Maine, like the nation experienced wide scale changes in the makeup of its leadership. As the Governor elect and the newly elected State legislators prepare to take office in January 2011, management will closely observe the activities of the Maine State Legislative session to identify and monitor proposed actions that may have financial and operational impact on the City. The one known negative impact for the upcoming biennium will be a potential reduction in State Aid to Education. For the last two years, the State has supplemented its appropriation for State Aid to Education with American Recovery and Reinvestment Act funds, which will no longer be available. The FY 2012 budget is likely to be a challenge to both the School Committee and the City Council. 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 2011 budget reflects the City’s historical results for these revenue sources, and actual results appear to be on track with budgetary estimates. As for expenditures, we continue to enjoy historically lower benefit utilization rates in our health insurance program, enabling us to hold insurance rates flat for an additional six months. Health insurance rates will increase in July 2011, by 7.34%, which is well within our historical average annual cost increases of 10%. The recently completed energy conservations projects allowed the City to avoid $196 thousand of annual utility costs. As the useful life of these improvements is between ten to twenty years, this form of cost avoidance will continue to benefit the City for many years to come. Actual results year to date expenditures are in line with budgetary estimates. For the Fiscal Year 2011 budget, the City Council’s goal was to minimize any tax rate increase. This goal was made more challenging due to an approximately 25% reduction in commercial real estate value. In order, to mitigate the impact on the City’s residential taxpayers, the City Council reduced the captured assessed value percentage of the City’s Downtown Development District TIF from 100% to 75% for one year. In addition, the City eliminated seven and one half vacant and approved some small increases in user fees. User fees for governmental and business-type activities are reviewed on an annual basis to ensure that fee structures are sufficient to cover service costs. Many fees are adjusted annually for inflation. Requests for Information This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the City of Bangor’s finances. Questions concerning any of this information should be addressed to the Finance Director, City of Bangor, 73 Harlow Street, Bangor, ME 04401. BASIC FINANCIAL STATEMENTS II - 17 Exhibit 1 CITY OF BANGOR, MAINE Statement of Net Assets June 30, 2010 Governmental Business-type Activities Activities Total ASSETS Cash and cash equivalents 16,484,039$ 2,799,428$ 19,283,467$ Investments 5,301,515 15,692,753 20,994,268 Receivables: Accounts (net of allowance of $258,981 and $433,298, respectively) 825,562 4,851,053 5,676,615 Intergovernmental 3,227,561 542,078 3,769,639 Taxes and liens receivable - prior years 1,519,286 - 1,519,286 Taxes receivable - current year 893,299 - 893,299 Deferred special assessments 30,130 87,664 117,794 Due from water district - 85,520 85,520 Loans 8,541,427 1,576,663 10,118,090 Internal balances 2,994,355 (2,994,355) - Inventories 855,035 271,223 1,126,258 Prepaid items 84,252 83,996 168,248 Other assets 1,035,669 850,539 1,886,208 Non-depreciable capital assets 5,611,406 10,675,022 16,286,428 Depreciable capital assets, net 67,753,773 177,683,391 245,437,164 Total assets 115,157,309 212,204,975 327,362,284 LIABILITIES Accounts payable and other current liabilities 2,497,632 1,795,055 4,292,687 Accrued wages and benefits payable 4,023,647 293,825 4,317,472 Unearned revenues 5,893,782 27,632 5,921,414 Noncurrent liabilities: Due within one year 6,036,074 4,706,628 10,742,702 Due in more than one year 61,073,864 32,356,826 93,430,690 Total liabilities 79,524,999 39,179,966 118,704,965 NET ASSETS Invested in capital assets, net of related debt 50,840,578 159,415,493 210,256,071 Restricted for: Nonexpendable trust principal 659,782 - 659,782 Expendable income 459,872 - 459,872 Penobscot River 759 - 759 Unrestricted (16,328,681) 13,609,516 (2,719,165) Total net assets 35,632,310$ 173,025,009$ 208,657,319$ See accompanying notes to financial statements. II - 18Exhibit 2Operating CapitalCharges for grants and grants and Governmental Business-typeFunctions/programs Expenses services contributions contributions activities activities TotalPrimary governmentGovernmental activities:General government $ 8,279,943 2,386,637$ 3,786$ 16,575$ (5,872,945)$ -$ (5,872,945)$ Public safety 16,898,374 2,401,930 241,285 515,260 (13,739,899) - (13,739,899) Health, community services and recreation 9,331,784 836,689 6,080,356 - (2,414,739) - (2,414,739) Public services 11,300,352 3,859,849 - - (7,440,503) - (7,440,503) Other agencies 4,658,904 - - 367,575 (4,291,329) - (4,291,329) Education 52,763,860 4,533,041 27,342,441 - (20,888,378) - (20,888,378) Arena development 39,075 2,380,158 - - 2,341,083 - 2,341,083 Community development 1,506,038 332,295 788,873 570,952 186,082 - 186,082 Infrastructure 5,079,985 94,267 - 3,541,013 (1,444,705) - (1,444,705) Waterfront 79,911 - - 1,563,057 1,483,146 - 1,483,146 Public transportation 2,792,904 923,433 1,226,969 4,485 (638,017) - (638,017) Tax increment financing 1,630,081 - - - (1,630,081) - (1,630,081) Interest on debt 2,555,839 - - - (2,555,839) - (2,555,839) Total governmental activities116,917,050 17,748,299 35,683,710 6,578,917 (56,906,124) - (56,906,124) Business-type activities:Sewer Utility 6,253,436 7,288,499 - - - 1,035,063 1,035,063 Airport 20,532,553 13,767,394 - 3,408,943 - (3,356,216) (3,356,216) Park Woods 529,610 371,832 - - - (157,778) (157,778) Parking 1,402,922 1,050,579 - 1,634,186 - 1,281,843 1,281,843 Bass Park 1,923,073 1,382,947 - 3,641,731 - 3,101,605 3,101,605 Municipal Golf Course 733,380 658,053 - - - (75,327) (75,327) Economic Development 634,764 507,867 - - - (126,897) (126,897) Total business-type activities 32,009,738 25,027,171 - 8,684,860 - 1,702,293 1,702,293 Total primary government $ 148,926,788 42,775,470$ 35,683,710$ 15,263,777$ (56,906,124) 1,702,293 (55,203,831) General revenues: Property taxes, levied for general purposes 48,182,455 - 48,182,455 Payment in lieu of taxes 117,770 - 117,770 Excise taxes 4,694,936 - 4,694,936 Franchise taxes 348,163 - 348,163 Grants and contributions not restricted to specific programs: Homestead/BETE exemption 1,142,839 - 1,142,839 Other State aid 23,795 - 23,795 State Revenue Sharing 3,832,933 - 3,832,933 Unrestricted investment earnings 673,295 1,035,753 1,709,048 Miscellaneous revenues 135,849 - 135,849 Transfers761,103 (761,103) - Total general revenues and transfers 59,913,138 274,650 60,187,788 Change in net assets 3,007,014 1,976,943 4,983,957 Net assets, beginning of year 32,625,296 171,048,066 203,673,362 Net assets, end of year 35,632,310$ 173,025,009$ 208,657,319$ See accompanying notes to financial statements.Program Revenuesin net assetsPrimary Government CITY OF BANGOR, MAINE Statement of Activities For the Fiscal Year Ended June 30, 2010Net (expense) revenue and changes II - 19 Exhibit 3 CITY OF BANGOR, MAINE Balance Sheet Governmental Funds June 30, 2010 Community Capital Other Total Development Arena Projects Governmental Governmental General Block Grant Fund Fund Funds Funds ASSETS Assets Cash and cash equivalents 12,953,810$6$ 2,712,416$ 802,283$ 15,524$ 16,484,039$ Investments 50,000 - 5,146,071 759 104,685 5,301,515 Receivables: Taxes 2,412,585 - - - - 2,412,585 Accounts (net of allowance of $258,981) 657,371 - 147,788 20,403 - 825,562 Interfund 3,293,510 - - - 164,452 3,457,962 Intergovernmental 1,917,845 655,257 20,704 437,536 196,219 3,227,561 Loans 996,806 4,971,072 - - 2,573,549 8,541,427 Deferred special assessments - - - 30,130 - 30,130 Inventory, at cost 855,035 - - - - 855,035 Due from bond trustee - - - 1,035,669 - 1,035,669 Prepaid items 84,252 - - - - 84,252 Total assets 23,221,214$ 5,626,335$ 8,026,979$ 2,326,780$ 3,054,429$ 42,255,737$ LIABILITIES AND FUND BALANCES Liabilities Accounts payable 987,276$ 25,234$ 109$ 637,641$ 45,374$ 1,695,634$ Accrued wages and benefits payable 3,991,851 - - - 31,796 4,023,647 Interfund loans payable - 272,902 - - 190,705 463,607 Deferred revenues 2,319,816 4,971,072 - 543,194 289,584 8,123,666 Due to rehabilitation recipients - 208,746 - - - 208,746 Total liabilities 7,298,943 5,477,954 109 1,180,835 557,459 14,515,300 Fund balances Reserved for: Encumbrances 967,379 - - 2,566,313 - 3,533,692 Prepaid items 84,252 - - - - 84,252 Advances to other funds 1,650,500 - - - - 1,650,500 Penobscot River - - - 759 - 759 Nonexpendable trust principal - - - - 659,782 659,782 Unreserved: Designated (Note J) 4,720,448 - - - - 4,720,448 Undesignated, reported in: General fund 8,499,692 - - - - 8,499,692 Special revenue funds - 148,381 8,026,870 - 1,377,316 9,552,567 Capital projects funds - - - (1,421,127) - (1,421,127) Permanent funds - - - - 459,872 459,872 Total fund balances (deficits) 15,922,271 148,381 8,026,870 1,145,945 2,496,970 27,740,437 Total liabilities and fund balances 23,221,214$ 5,626,335$ 8,026,979$ 2,326,780$ 3,054,429$ Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds.73,365,179 Deferred taxes are not available to pay for current-period expenditure and, therefore, are deferred in the funds.2,229,884 Long-term liabilities, including bonds payable $61,689,447, accrued interest $593,252, compensated absences $2,415,725, self insurance liability $1,485,708, and net OPEB obligation $1,519,058 are not due and payable in the current period and, therefore, are not reported in the funds. (67,703,190) Net assets of governmental funds 35,632,310$ See accompanying notes to financial statements. II - 20 Exhibit 4 CITY OF BANGOR, MAINE Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Fiscal Year Ended June 30, 2010 Community Capital Other Total Development Arena Projects Governmental Governmental General Block Grant Fund Fund Funds Funds Revenues Taxes $ 49,976,511 -$-$ 2,140,843$ 862,315$ 52,979,669$ Intergovernmental 34,253,927 788,873 - 5,528,441 5,640,477 46,211,718 Licenses and permits 633,339 - - - - 633,339 Charges for services 12,735,266 - - - 920,498 13,655,764 Program income - 304,185 - - 25,615 329,800 Revenue from use of money and property 1,021,850 2,958 2,459,481 142,061 238,634 3,864,984 Other 30,657 1,646 - 1,050,476 25,434 1,108,213 Total revenues 98,651,550 1,097,662 2,459,481 8,861,821 7,712,973 118,783,487 Expenditures Current: General government 5,422,805 ----5,422,805 Public safety 15,287,575 ----15,287,575 Health, community services and recreation 4,720,477 -- - - 4,720,477 Public buildings and services 10,055,161 ----10,055,161 Other agencies 4,291,329 ----4,291,329 Education 51,590,324 ----51,590,324 Tax increment financing 432,033 ----432,033 Unclassified 48,010 - 6,441 - - 54,451 Restricted grants - 919,883 - - 7,559,857 8,479,740 Capital outlay 427,746 - - 20,390,422 - 20,818,168 Debt service 4,490,927 - - 10,466,999 - 14,957,926 Total expenditures 96,766,387 919,883 6,441 30,857,421 7,559,857 136,109,989 Excess (deficiency) of revenues over (under) expenditures 1,885,163 177,779 2,453,040 (21,995,600) 153,116 (17,326,502) Other financing sources (uses) Financing proceeds - - - 12,696,640 - 12,696,640 Sale of assets 65,849 - -70,000 - 135,849 Transfers to other funds (1,561,926) - (31,000) (38,798) (157,300) (1,789,024) Transfers from other funds 73,926 - 3,943 2,470,868 1,390 2,550,127 Total other financing sources (uses) (1,422,151) - (27,057) 15,198,710 (155,910) 13,593,592 Changes in fund balances 463,012 177,779 2,425,983 (6,796,890) (2,794) (3,732,910) Fund balances (deficit), beginning of year 15,459,259 (29,398) 5,600,887 7,942,835 2,499,764 31,473,347 Fund balances, end of year $ 15,922,271 148,381$ 8,026,870$ 1,145,945$ 2,496,970$ 27,740,437$ See accompanying notes to financial statements. II - 21 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, 2010 Net change in fund balances - total governmental funds (from Exhibit 4) (3,732,910)$ 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 depreciation expense of $3,729,052 and disposals of $19,199 exceeded capital outlays of $2,474,119. (1,274,132) Financing proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net assets. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. This is the amount by which financing proceeds of $12,696,640 in general obligation bonds were less than principal payments of $13,981,065. 1,284,425 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 in accrued interest ($93,843), net OPEB obligation ($759,529), compensated absences ($158,469), self insurance liability ($62,153), deferred taxes $243,625 and decrease in Penobscot River remediation $7,560,000. 6,729,631 Change in net assets of governmental activities (see Exhibit 2) 3,007,014$ See accompanying notes to financial statements. II - 22 Exhibit 6 CITY OF BANGOR, MAINE Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual General Fund For the Fiscal Year Ended June 30, 2010 Variance with Final Budget Positive Original Final Actual (Negative) Revenues Taxes 49,808,118$ 49,808,118$ 49,976,511$ 168,393$ Intergovernmental 30,526,682 30,610,322 30,004,964 (605,358) Licenses and permits 605,700 605,700 633,339 27,639 Charges for services: municipal 7,889,103 7,889,103 7,559,901 (329,202) school 3,962,847 3,962,847 4,533,040 570,193 Fines, forfeits and penalties 36,700 36,700 30,657 (6,043) Revenue from use of money and property municipal 818,606 818,606 615,962 (202,644) Total revenues 93,647,756 93,731,396 93,354,374 (377,022) Expenditures Current: General government 5,028,693 5,127,393 4,846,354 281,039 Public safety 15,506,030 15,712,470 15,352,798 359,672 Health, community services and recreation 4,508,445 4,508,445 4,722,378 (213,933) Public buildings and services 10,589,315 10,553,115 10,058,906 494,209 Other agencies 4,342,689 4,374,639 4,291,329 83,310 Education 48,951,133 52,266,557 47,676,383 4,590,174 Debt service 4,424,194 4,424,194 4,490,927 (66,733) Unclassified 440,411 480,411 480,043 368 Total expenditures 93,790,910 97,447,224 91,919,118 5,528,106 Excess (deficiency) of revenues over/under expenditures (143,154) (3,715,828) 1,435,256 5,151,084 Other financing sources (uses) Appropriation from designated fund balance 1,305,330 1,305,330 103,480 (1,201,850) Appropriation from undesignated fund balance - 140,000 - (140,000) Sale of assets 2,000 2,000 8,168 6,168 Contributions - - 325 325 Insurance Settlements 1,500 1,500 13,906 12,406 Transfers to other funds (465,000) (502,500) (502,500) - Transfers from other funds 7,000 7,000 10,793 3,793 Operating transfers (707,676) (707,676) (707,676) - Total other financing sources (uses) 143,154 245,654 (1,073,504) (1,319,158) Net change in fund balance -$ (3,470,174)$ 361,752 3,831,926$ Undesignated fund balance, beginning of year 8,743,388 Change in balances carried (605,448) Undesignated fund balance, end of year 8,499,692$ See accompanying notes to financial statements. Budgeted amounts Continued on next page II - 23 Exhibit 7 CITY OF BANGOR, MAINE Statement of Net Assets Proprietary Funds June 30, 2010 Business-type Activities - Enterprise Funds Sewer Economic Nonmajor Total Utility Airport Development Proprietary Proprietary Fund Fund Fund Funds Funds ASSETS Current assets Cash and cash equivalents 497,716$ 1,501,766$ 54$ 799,892$ 2,799,428$ Investments - 8,106,145 - - 8,106,145 Accounts receivable 1,698,768 3,479,657 - 105,926 5,284,351 Less allowance for uncollectible accounts (22,601) (383,587) - (27,110) (433,298) Net accounts receivable 1,676,167 3,096,070 - 78,816 4,851,053 Due from other governments - 542,078 - - 542,078 Due from water district 85,520 - - - 85,520 Inventories, at cost - 253,118 - 18,105 271,223 Prepaid items 35,851 34,828 - 13,317 83,996 Total current assets 2,295,254 13,534,005 54 910,130 16,739,443 Noncurrent assets Capital Assets: Land and improvements 683,865 - 2,395,046 2,718,678 5,797,589 Buildings and improvements 27,539,270 - 6,490,170 11,587,218 45,616,658 Machinery and equipment 5,656,331 -- 478,504 6,134,835 Infrastructure 57,043,280 - 683,189 - 57,726,469 Aircraft operational assets - 243,893,373 - - 243,893,373 Parking structures - - - 11,350,354 11,350,354 Construction in process 7,112 7,043,637 - - 7,050,749 90,929,858 250,937,010 9,568,405 26,134,754 377,570,027 Less accumulated depreciation (35,229,897) (137,118,179) (1,487,984) (15,375,554) (189,211,614) Net capital assets 55,699,961 113,818,831 8,080,421 10,759,200 188,358,413 Investments - 7,586,608 - - 7,586,608 Loans receivable - 1,479,896 96,767 - 1,576,663 Deferred special assessments 87,664 - - - 87,664 Due from bond trustee 809,784 - - - 809,784 Deposits - - - 20,000 20,000 Bond issuance costs (net of accumulated amortization of $394,307) 20,755 - - - 20,755 Total noncurrent assets 56,618,164 122,885,335 8,177,188 10,779,200 198,459,887 Total assets 58,913,418 136,419,340 8,177,242 11,689,330 215,199,330 See accompanying notes to financial statements. Continued from previous page II - 24 Exhibit 7 (con't) CITY OF BANGOR, MAINE Statement of Net Assets Proprietary Funds June 30, 2010 Business-type Activities - Enterprise Funds Sewer Economic Nonmajor Total Utility Airport Development Proprietary Proprietary Fund Fund Fund Funds Funds LIABILITIES Current liabilities Accounts payable 224,740 1,164,880 5,294 101,639 1,496,553 Accrued wages and benefits payable 44,605 208,261 - 40,959 293,825 Accrued interest 153,454 49,269 42,338 46,477 291,538 Workers' compensation 20,000 134,315 - 10,729 165,044 Unearned revenue - - - 27,632 27,632 Accrued compensated absences 118,660 373,086 - 108,303 600,049 Interfund loans payable - - 738,400 2,255,955 2,994,355 General obligation debt payable 2,537,542 636,329 198,340 574,101 3,946,312 Deferred amount on refunding (1,409) - - (3,368) (4,777) Other liabilities - 6,964 - - 6,964 Total current liabilities 3,097,592 2,573,104 984,372 3,162,427 9,817,495 Long-term liabilities Workers' compensation - 341,085 - 9,271 350,356 General obligation debt payable 16,457,103 7,241,940 3,639,944 3,671,250 31,010,237 Net OPEB obligation 90,526 334,058 - 60,450 485,034 Other long-term liabilities 298,269 - - 212,930 511,199 Total long-term liabilities 16,845,898 7,917,083 3,639,944 3,953,901 32,356,826 Total liabilities 19,943,490 10,490,187 4,624,316 7,116,328 42,174,321 NET ASSETS Invested in capital assets, net of related debt 38,471,838 109,499,608 4,242,137 7,201,910 159,415,493 Unrestricted 498,090 16,429,545 (689,211) (2,628,908) 13,609,516 Total net assets 38,969,928$ 125,929,153$ 3,552,926$ 4,573,002$ 173,025,009$ See accompanying notes to financial statements. II - 25 Exhibit 8 CITY OF BANGOR, MAINE Statement of Revenues, Expenses and Changes in Net Assets Proprietary Funds For the Fiscal Year Ended June 30, 2010 Business-type Activities - Enterprise Funds Sewer Economic Nonmajor Total Utility Airport Development Proprietary Proprietary Fund Fund Fund Funds Funds Operating revenues Charges for services 7,274,929$ 13,762,967$ 507,867$ 3,463,411$ 25,009,174$ Operating expenses Operating expenses other than depreciation and amortization 3,980,403 12,763,641 185,434 3,495,670 20,425,148 Depreciation and amortization 1,690,101 7,385,127 244,278 879,255 10,198,761 Total operating expenses 5,670,504 20,148,768 429,712 4,374,925 30,623,909 Operating income (loss) 1,604,425 (6,385,801) 78,155 (911,514) (5,614,735) Nonoperating revenue (expenses) Interest income 63,135 937,299 32,599 2,720 1,035,753 Interest expense (582,932) (383,785) (205,052) (214,060) (1,385,829) Miscellaneous income (expense) 13,570 4,427 - - 17,997 Total nonoperating revenue (expenses) (506,227) 557,941 (172,453) (211,340) (332,079) Net income (loss) before grants/contributions and transfers 1,098,198 (5,827,860) (94,298) (1,122,854) (5,946,814) Grants/contributions received for capital assets - 3,408,943 - 5,275,917 8,684,860 Transfers to other funds (101,450) (1,494,068) - (32,985) (1,628,503) Transfers from other funds - --867,400 867,400 Change in net assets 996,748 (3,912,985) (94,298) 4,987,478 1,976,943 Net assets, beginning of year 37,973,180 129,842,138 3,647,224 (414,476) 171,048,066 Net assets, end of year 38,969,928$ 125,929,153$ 3,552,926$ 4,573,002$ 173,025,009$ See accompanying notes to financial statements. Continued on next page II - 26 Exhibit 9 CITY OF BANGOR, MAINE Statement of Cash Flows - Proprietary Funds For the Fiscal Year Ended June 30, 2010 Business-type Activities - Enterprise Funds Sewer Economic Nonmajor Total Utility Airport Development Proprietary Proprietary Fund Fund Fund Funds Funds Cash flows from operating activities Cash received from customers 7,704,459$ 12,747,253$ 564,373$ 3,413,421$ 24,429,506$ Cash paid to suppliers for goods and services (2,326,503) (5,903,043) (196,918) (1,986,580) (10,413,044) Cash paid to employees for services (1,730,702) (6,573,662) - (1,451,183) (9,755,547) Net cash provided by (used in) operating activities 3,647,254 270,548 367,455 (24,342) 4,260,915 Cash flows from noncapital financing activities Interfund loans (repayments) - - (9,000) 17,700 8,700 Transfers in - - - 867,400 867,400 Transfers out (101,450) (1,494,068) - (32,985) (1,628,503) Net cash provided by (used in) noncapital financing activities (101,450) (1,494,068) (9,000) 852,115 (752,403) Cash flows from capital and related financing activities Proceeds from general obligation bonds 1,063,400 1,482,668 - 484,960 3,031,028 Acquisition and construction of capital assets (387,617) (5,624,032) - (1,693,122) (7,704,771) Principal paid on general obligation bonds (3,836,794) (583,914) (190,584) (1,086,709) (5,698,001) Interest paid on general obligation bonds (588,582) (388,184) (207,371) (212,632) (1,396,769) Proceeds from sale of property -4,427 - - 4,427 Grant monies received for capital assets - 3,408,943 - 1,634,186 5,043,129 Net cash provided by (used in) capital and related financing activities (3,749,593) (1,700,092) (397,955) (873,317) (6,720,957) Cash flows from investing activities Net sales (purchases) of investments 320,000 3,137,988 - 564,266 4,022,254 Investment of unexpended bond proceeds 242,643 - - - 242,643 Interest on investments 76,705 937,298 32,599 2,847 1,049,449 Loan repayments - 218,600 6,878 - 225,478 Net cash provided by (used in) investing activities 639,348 4,293,886 39,477 567,113 5,539,824 Net increase (decrease) in cash 435,559 1,370,274 (23) 521,569 2,327,379 Cash, beginning of year 62,157 131,492 77 278,323 472,049 Cash, end of year 497,716$ 1,501,766$54$ 799,892$ 2,799,428$ Schedule of noncash investing, capital and financing activities: During the year, the Airport Fund had an unrealized gain on investments in the amount of $716,771. During the year, Bass Park received leasehold improvements to its harness racing facilities in the amount of $3,641,731. See accompanying notes to financial statements. Continued from previous page II - 27 Exhibit 9 (con't) CITY OF BANGOR, MAINE Statement of Cash Flows - Proprietary Funds For the Fiscal Year Ended June 30, 2010 Business-type Activities - Enterprise Funds Sewer Economic Nonmajor Total Utility Airport Development Proprietary Proprietary Fund Fund Fund Funds Funds Reconciliation of operating income (loss) to net cash provided by (used in) operating activities Operating income (loss) 1,604,425$ (6,385,801)$ 78,155$ (911,514)$ (5,614,735)$ Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities Depreciation and amortization 1,690,101 7,385,127 244,278 879,255 10,198,761 Provision for uncollectible accounts - (5,469) - - (5,469) Changes in assets and liabilities: (Increase) decrease in accounts receivable 411,837 (1,015,715) 56,506 (46,684) (594,056) (Increase) decrease in due from water district 17,693 - - - 17,693 (Increase) decrease in inventories - (159,446) - 657 (158,789) (Increase) decrease in prepaid items 1,570 (18,526) - 19,872 2,916 Increase (decrease) in accounts payable (42,040) 309,959 (11,484) 21,502 277,937 Increase (decrease) in unearned revenue - - - (3,306) (3,306) Increase (decrease) in other liabilities (36,332) 160,419 - 15,876 139,963 Total adjustments 2,042,829 6,656,349 289,300 887,172 9,875,650 Net cash provided by (used in) operating activities 3,647,254$ 270,548$ 367,455$ (24,342)$ 4,260,915$ See accompanying notes to financial statements. II - 28 Exhibit 10 CITY OF BANGOR, MAINE Statement of Fiduciary Net Assets Fiduciary Funds June 30, 2010 Agency Fund ASSETS Cash and cash equivalents $ 96,444 Total assets $ 96,444 LIABILITIES Liabilities: Amounts held for others $ 96,444 Total liabilities $ 96,444 See accompanying notes to financial statements. This page left intentionally blank INDEX OF NOTES TO THE FINANCIAL STATEMENTS Summary of Significant Accounting Policies Note Page A Reporting Entity II – 29 B Government-wide and Fund Financial Statements II – 29 C Measurement Focus, Basis of Accounting and Basis of Presentation II – 30 D Assets, Liabilities and Equity II – 32 Stewardship, Compliance and Accountability A Budgetary Information II – 34 B Reconciliation of Budgetary Basis Statements II – 35 C Excess of Expenditures Over Appropriations II – 36 D Deficit Fund Equity II – 36 E Restricted Assets II – 36 Detailed Notes on All Funds A Deposits and Investments II – 37 B Property Tax II – 38 C Capital Assets II – 38 D Interfund Transactions II – 40 E Due From Other Governments II – 41 F Leases II – 41 G Other Assets II – 42 H Deferred/Unearned Revenue II – 42 I Long-Term Debt II – 42 J Fund Balances II – 46 K Net Assets II – 48 Other Information A Risk Management II – 48 B Tax Increment Financing Districts II – 49 C Contingent Liabilities II – 50 D Retirement II – 50 E Other Postemployment Benefits II – 52 F Landfill Closure and Postclosure Care Costs II – 54 G Subsequent Events II – 54 II - 29 CITY OF BANGOR, MAINE Notes to the Financial Statements June 30, 2010 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. Based upon all pertinent facts derived from the analysis of the above criteria, it was determined that no additional entities should be included as part of these financial statements. 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, 2009 (most recent data available) the City of Bangor’s share of the Joint Venture’s net assets was $6,158,980. Complete financial statements may be obtained from Municipal Review Committee, 40 Harlow Street, Bangor, ME 04401. B. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net assets 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. 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. 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. CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 30 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED 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 Racino. 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. 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. CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 31 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED 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 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 American Folk Festival, Bangor Area Stormwater Group and various School Activity funds. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to the same limitation. The City has elected not to follow subsequent private-sector guidance. 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. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed. CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 32 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED D. Assets, Liabilities 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 a fund balance reserve account 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. Under the consumption method, the costs of inventory items are recognized as expenditures/expenses when used. The consumption method does not require a reserve for inventory and the City has chosen not to have such a reserve. 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. CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 33 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED 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. 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. 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. CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 34 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED 6. 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 assets. Bond premiums and discounts, as well as issuance costs if material to basic financial statements, 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. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt 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. 7. Fund Equity In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designated fund balances represent tentative plans for future use of financial resources. 8. 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. 9. 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. 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. CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 35 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY, CONTINUED 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 as reservations of fund balances 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 30 th, 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, only one of which was material. The Council appropriated $140,000 from the General Fund’s undesignated fund balance to fund costs associated with the City Manger’s retirement and the cost to conduct an executive search and recruitment for a replacement. 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: Excess of revenues over expenditures and other financing sources and uses (Budget) $ 361,752 Activity in designated fund balance (7,162) 2010 encumbrances 959,619 2009 encumbrances lapsed (10,501) 2009 encumbrances paid (840,696) Excess of revenues and other financing sources over expenditures and other uses (GAAP) $ 463,012 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 Assets: CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 36 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY, CONTINUED Excess (deficiency) of revenues over expenditures and encumbrances: Sewer $ (1,435,049) Airport (6,386,855) Park Woods (87,282) Parking (513,360) Bass Park (160,778) Municipal Golf Course (152,848) Economic Development (280,323) (9,016,495) Nonoperating revenues classification (1,292,973) Investments at market value (298,513) Capital outlay 30,000 Capital projects (16,571) Adjustments for accrual basis (536,406) Principal payments 4,149,641 2009 encumbrances (62,557) Nonoperating expenses classification 1,429,139 Operating loss $(5,614,735) C. Excess of Expenditures Over Appropriations The following General Fund departments were over-expended by the indicated dollar amounts; Assessing $959, Health and Community Services $172,081, Parks and Recreation $41,852, and Debt Service $66,733. These over-expenditures were funded by receipt of revenues in excess of appropriation and under-expenditures within other General Fund departments. The Municipal Golf Course was over-expended by $57,139, due to part time employee wages and transfers to the General Fund. The Parking Fund and the Bass Park Fund were over-expended by $8,728 and $30,955 respectively, which is attributable to depreciation expense. D. Deficit Fund Equity The Grant Fund has a deficit fund equity of $69,988 which is expected to be funded in subsequent years with program income. 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 2010. CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 37 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 in addition to the $250,000 provided by the Federal Deposit Insurance Corporation (FDIC). As of June 30, 2010, $0 of the City’s bank balance of $20,053,236 was exposed to custodial credit risk because it was uninsured and uncollateralized. At June 30, 2010, the City had the following investments and maturies: Maturity (years) Investment types Fair Value Not Applicable <1 1-5 6-10 Mutual Funds $ 4,813,388 $ 4,813,388 $ - $ - $ - US Treasuries 9,803,374 - 1,457,424 6,611,102 1,734,848 Common stock 1,181,435 1,181,435 - - - Certificate of Deposit 5,196,071 -1,092,463 4,103,608 - __ Totals $ 20,994,268 $ 5,994,823 $ 2,549,887 $ 10,714,710 $ 1,734,848 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, 2010, 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. CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 38 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 8, 2009, 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 15, 2009 and March 15, 2010. Interest was charged at 9.00% 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 revenues. 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, 2010 was as follows: Balance Balance June 30, June 30, 2009 Increases Decreases 2010 Governmental activities: Capital assets, not being depreciated: Land $ 5,040,548 - - 5,040,548 Construction in progress 1,327,870 490,117 1,247,129 570,858 Total capital assets, not being depreciated 6,368,418 490,117 1,247,129 5,611,406 Capital assets, being depreciated: Land improvements 6,765,169 1,210,066 - 7,975,235 Buildings and improvements 63,078,628 351,326 - 63,429,954 Machinery and equipment 10,141,524 261,177 - 10,402,701 Vehicles 13,794,779 696,500 153,687 14,337,592 Infrastructure 20,491,942 712,062 - 21,204,004 Total capital assets being depreciated 114,272,042 3,231,131 153,687 117,349,486 Less accumulated depreciation for: Land improvements (2,243,420) (329,159) - (2,572,579) Buildings and improvements (20,484,531) (1,243,763) - (21,728,294) Machinery and equipment (6,444,929) (707,202) - (7,152,131) Vehicles (7,401,866) (996,300) (134,488) (8,263,678) Infrastructure (9,426,403) (452,628) - (9,879,031) Total accumulated depreciation (46,001,149)(3,729,052) (134,488) (49,595,713) Total capital assets being depreciated, net 68,270,893 (497,921) 19,199 67,753,773 Governmental activities capital assets, net $ 74,639,311 (7,804) 1,266,328 73,365,179 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 39 DETAILED NOTES ON ALL FUNDS, CONTINUED Balance Balance June 30, June 30, 2009 Increases Decreases 2010 Business-type activities: Capital assets, not being depreciated: Land $ 3,624,273 - - 3,624,273 Construction in progress 8,785,421 5,239,250 6,973,922 7,050,749 Total capital assets, not being depreciated 12,409,694 5,239,250 6,973,922 10,675,022 Capital assets, being depreciated: Land improvements 2,173,316 - - 2,173,316 Buildings and improvements 42,462,835 3,659,767 505,944 45,616,658 Machinery and equipment 5,853,298 303,337 21,800 6,134,835 Infrastructure 57,701,331 25,138 - 57,726,469 Airport operational assets 236,793,154 7,100,219 - 243,893,373 Parking structures 9,565,788 1,784,566 - 11,350,354 Total capital assets being depreciated 354,549,722 12,873,027 527,744 366,895,005 Less accumulated depreciation for: Land improvements (1,275,499) (79,378) (505,944) (848,933) Buildings and improvements (27,318,310) (1,382,693) - (28,701,003) Machinery and equipment (4,125,011) (223,027) (21,800) (4,326,238) Infrastructure (9,980,487) (583,971) - (10,564,458) Airport operational assets (129,733,053) (7,385,127) - (137,118,180) Parking structures (7,128,990) (523,812) - (7,652,802) Total accumulated depreciation (179,561,350)(10,178,008) (527,744) (189,211,614) Total capital assets being depreciated, net 174,988,372 2,695,019 - 177,683,391 Business-type activities capital assets, net $187,398,066 7,934,269 6,973,922 188,358,413 Depreciation expense was charged to functions/programs of the primary government as follows: Governmental activities: General government $ 1,200,325 Public safety 897,569 Health, community services and recreation 170,933 Public building and services 581,306 Education 878,919 Total depreciation expense – governmental activities $3,729,052 Business-type activities: Sewer Utility Fund $1,669,348 Airport Fund 7,385,127 Park Woods 89,123 Parking Fund 523,812 Bass Park Fund 151,630 Municipal Golf Course 114,690 Economic Development Fund 244,278 Total depreciation expense – business-type activities $10,178,008 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 40 DETAILED NOTES ON ALL FUNDS, CONTINUED Construction commitments The government has active construction projects as of June 30, 2010. The projects include reconstruction of runways, construction of additional infrastructure on the waterfront, 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, 2010 the balances were as follows: Receivable Payable General Fund $ 3,293,510 $ - Community Development Block Grant - 272,902 Other Governmental Funds 164,452 190,705 Park Woods Fund - 355,700 Bass Park Fund - 1,900,255 Economic Development - 738,400 $ 3,457,962 $ 3,457,962 Individual fund transfers to and from other funds for the fiscal year ended June 30, 2010 are comprised primarily of transfers from fund balances to fund capital projects and to provide operating subsidies to certain proprietary funds. Transfers to Transfer from General Fund $ 1,561,926 $ 73,926 Arena Fund 31,000 3,943 Special Revenue Funds 126,800 1,390 Capital Projects Fund 38,798 2,470,868 Permanent Funds 30,500 - Sewer Utility Fund 101,450 - Airport Fund 1,494,068 - Nonmajor Proprietary Funds 32,985 867,400 $ 3,417,527 $ 3,417,527 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 41 DETAILED NOTES ON ALL FUNDS, CONTINUED E. Due From Other Governments Due from other governments is comprised of the following amounts at June 30, 2010: Federal State of Government Maine Other Total General Fund $ 51,956 $ 1,762,189 $ 103,700 $ 1,917,845 Special Revenue Funds 770,970 80,506 - 851,476 Arena Fund - 20,704 - 20,704 Capital Projects Fund 308,860 128,676 - 437,536 Proprietary Funds 522,192 19,886 - 542,078 Of the General Fund’s $1,762,189 due from State of Maine, $609,745 represents school grant and State agency billings, $725,452 is due from the Department of Transportation and $378,379 represents general assistance claims. Amounts due from other communities for tuition reimbursement to Bangor account for $86,367 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 2039 and 2033, respectively. Minimum future rentals to be received on noncancelable leases as of June 30, 2010 are: Fiscal year ending Economic June 30, Airport Development 2011 $ 2,086,313 $ 381,951 2012 1,990,792 382,972 2013 1,894,320 362,360 2014 965,646 257,792 2015 445,950 261,586 Subsequent to 2015 3,940,187 1,327,033 $ 11,323,208 $ 2,973,694 Minimum future rentals do not include contingent rentals, which may be received as stipulated in the lease contracts. The Airport received $1,430,771 in contingent rentals in fiscal year 2010. The carrying amounts of the leased assets are as follows: Economic Airport Development Land $ 565,532 $ 2,395,046 Buildings 22,377,976 6,490,170 Less accumulated depreciation (11,395,227) (1,454,084) Total $ 11,548,281 $ 7,431,132 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 42 DETAILED NOTES ON ALL FUNDS, CONTINUED G. Other Assets Other assets are comprised of the following: Capital Proprietary Projects Fund Fund Due from bond trustee $ 1,035,669 $ 809,784 Deposits - 20,000 Bond issuance costs (net of amortization) _______- _ 20,755 Total $ 1,035,669 $ 850,539 H. Deferred/Unearned Revenue General Fund deferred revenue consists of $2,229,884 in deferred taxes and $89,932 of advance deposits. Capital Fund deferred revenue of $543,194 consists of advance deposits. Community Development Block Grant and Other Governmental Funds deferred revenue of $4,971,072 and $289,584, respectively, represents future revenue equal to loans made pursuant to the Community Development, Urban Development Action Grants and Economic Incentive Revolving Loan Fund. Under the terms of these grants, loans made are recognized as an expenditure in the Special Revenue Fund when they occur. Further, in accordance with regulations governing such funds, the repayments of such loans are considered program income as received and are available to the recipient for additional use within the program. Proprietary Funds unearned revenue of $27,632 represents advance deposits. 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 $165,033,548. The following is a summary of general obligation bond and note transactions of the City for the fiscal year ended June 30, 2010: Bonds and notes payable at June 30, 2009 $ 94,311,206 Add: principal additions 15,727,668 Less: principal repayments 13,392,879 Bonds and notes payable at June 30, 2010 $ 96,645,995 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 43 DETAILED NOTES ON ALL FUNDS, CONTINUED Bonds and notes payable at June 30, 2010 are comprised of the following: Fiscal year Interest Governmental activities Business-type Total of maturity rate City School activities June 30, 2010 Long-term debt: Treatment Plant 2013 7.00% - 7.10% $ - $ - $ 2,850,000 $ 2,850,000 Combined sewer overflow 2014 2.46% - - 372,800 372,800 Combined sewer overflow 2014 2.45% - - 397,200 397,200 Combined sewer overflow 2017 3.52% - - 1,218,019 1,218,019 Tax increment financing note*2016 6.00% - 6.90% 510,000 - - 510,000 Combined sewer overflow 2018 3.03% - - 1,115,876 1,115,876 Tax increment financing note*2018 6.19% 166,000 - - 166,000 Maine Business Enter Park 2018 5.00% - - 134,763 134,763 Public improvements – 2000 2020 5.25% - 5.90% 776,604 - 928,396 1,705,000 Public improvements – 2001 2021 4.25% - 5.00% 670,000 36,000 2,664,000 3,370,000 State Revolving Renovation – School 2011 0.00% - 56,860 - 56,860 Public improvements note*2012 6.25% 514,948 - - 514,948 Public improvements – 2002 2022 3.50% - 4.75% 2,589,000 2,700,000 1,141,000 6,430,000 Pension obligation bonds 2026 3.06% - 6.45% 24,385,809 1,551,724 5,202,467 31,140,000 Refunding bonds 2024 3.06% - 3.47% 405,952 1,015,955 1,958,093 3,380,000 Combined sewer overflow 2023 1.94% - - 2,042,316 2,042,316 Public improvements note*2012 2.50% - 4.00% - - 71,108 71,108 Tax increment financing note*2015 2.50% - 4.00% 83,077 - - 83,077 Briggs Building note 2023 6.50% - - 996,806 996,806 Refunding/public improvements - 2004 2023 2.50% - 4.80% 2,534,300 - 320,700 2,855,000 Combined sewer overflow 2024 1.41% - - 2,079,705 2,079,705 Public improvements - 2005 2024 3.50% - 4.30% 1,875,000 - 750,000 2,625,000 Airport building sprinklers 2024 3.25% - 5.00% - - 1,725,000 1,725,000 Chancellor’s property note 2025 5.00% - - 1,956,713 1,956,713 Public improvements/refunding 2025 4.00% - 4.20% 3,221,578 - 478,422 3,700,000 Combined sewer overflow 2027 1.64% - - 1,739,864 1,739,864 Public improvements – 2007 2027 4.00% 2,955,000 - - 2,955,000 Combined sewer overflow 2028 1.81% - - 1,830,717 1,830,717 Public improvements – 2009 2029 2.00% - 4.375% 2,945,000 - - 2,945,000 ARRA – CWSRF** 2029 0.00% - - 920,463 920,463 ARRA – CWSRF** 2030 0.00% - - 513,760 513,760 Public improvements/refunding 2020 2.00% - 3.25%4,876,640 7,820,000 1,548,360 14,245,000 Total bonds and notes payable $48,508,908 $13,180,539 $34,956,548 $96,645,995 * Notes aggregating $1,345,133 are held by the City’s Airport Fund at fixed, taxable market rates of interest. ** The original amount of this debt was $3,000,000, of the total $1,517,332 has been forgiven through the Environmental Protection Agency’s ARRA CWSRF program. CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 44 DETAILED NOTES ON ALL FUNDS, CONTINUED Annual debt service requirements to maturity for general obligation bonds and notes payable are as follows: Fiscal year ending Governmental Activities Business-type Activities June 30,Principal Interest Principal Interest 2011 $ 4,029,067 $ 3,020,532 $ 3,946,312 $ 1,257,945 2012 4,539,005 2,773,927 3,689,946 1,113,681 2013 4,168,618 2,594,609 3,685,422 989,496 2014 4,079,597 2,443,516 2,162,648 896,039 2015 4,141,860 2,283,274 2,040,438 826,611 2016-2020 20,446,290 8,691,990 10,033,436 3,016,462 2021-2025 15,689,866 4,065,694 7,561,209 1,195,314 2026-2030 4,594,144 290,144 1,837,137 73,424 Total $61,689,447 $ 26,163,686 $ 34,956,548 $ 9,368,972 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, 2010, the statutory limit for the City was $365,400,000. The City’s outstanding long-term debt of $96,645,995 at June 30, 2010 was within the statutory limit. Advance and Current Refunding In prior years, the City defeased certain general obligation bonds which reduced total future debt service payments in governmental and business-type funds by $408,000 and $302,000, respectively. This transaction placed the proceeds of the new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. The trust account assets and the liability for the defeased bonds are not included in the City’s financial statements. At June 30, 2010, $27,500 and $392,500 of the governmental and business-type activities, respectively, are considered defeased. Within the Proprietary Funds the advance refunding transaction gave rise to a deferred amount on refunding. The deferred amount on refunding is being amortized over the remaining life of the original bonds. Authorized and Unissued On August 27, 2007, the City Council authorized the issuance of up to $100,000 in general obligation bonds for the purpose of funding the City’s share of State of Maine road projects. As of June 30, 2010, $50,000 remains authorized and unissued. The City expects to issue the debt within the next fiscal year. 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, 2010, $155,000 remains authorized and unissued. The City expects to issue the debt within the next twenty four months. CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 45 DETAILED NOTES ON ALL FUNDS, CONTINUED 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, 2010 the City did not have any overlapping debt obligations. Lease/Purchase Agreement The City has entered into a lease purchase agreement as lessee for financing school department energy conservation measures in the amount of $7,091,928. The conservation measures included building envelope improvements, boiler retrofits, HVAC improvements, etc. None of the improvements met the criteria for capitalization and have been expensed in the current year. During fiscal year 2010, this agreement was paid in full through the issuance of general obligation bonds. Changes in Long-term Liabilities Long-term liability activity for the year ended June 30, 2010, was as follows: Balance Balance Due within June 30, 2009 Additions Reductions June 30, 2010 one year Governmental activities: General obligation debt $ 56,687,684 12,696,640 7,694,877 61,689,447 4,029,067 Accrued compensated absences * 2,257,256 1,811,522 1,653,053 2,415,725 1,399,117 Net OPEB obligation 759,529 863,114 103,585 1,519,058 - Lease purchase obligation 6,286,188 - 6,286,188 - - Penobscot River remediation 7,560,000 - 7,560,000 - - Long-term obligation for self insurance 1,423,555 459,173 397,020 1,485,708 607,890 Governmental activities long-term liabilities $ 74,974,212 15,830,449 23,694,723 67,109,938 6,036,074 Business type activities: General obligation debt 37,623,522 3,031,028 5,698,001 34,956,549 3,946,312 Accrued compensated absences 631,749 432,021 463,721 600,049 600,049 Net OPEB obligation 242,517 275,591 33,074 485,034 - Long-term obligation for self insurance 615,000 231,558 331,158 515,400 165,044 Deferred amount on refunding (17,677) - (12,900) (4,777) (4,777) Other 511,072 127 - 511,199 - Business type activities long-term liabilities $ 39,606,183 3,970,325 6,513,054 37,063,454 4,706,628 * - The liquidation of compensated absences is fully covered within the General Fund CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 46 DETAILED NOTES ON ALL FUNDS, CONTINUED J. Fund Balances Permanent Funds As of June 30, 2010, the fund balances by purpose were as follows: Restricted Unrestricted Nonexpendable Permanent Trust Principal Funds Cemetery $ 378,745 $ 72,055 Parks 14,538 17,887 City Missionary 16,511 66,614 Education 44,138 77,969 Aid for Aged Women 43,067 87,792 Other Purposes 30,841 137,555 Total nonmajor permanent funds $ 527,840 $ 459,872 Dedicated Revenue Funds - Special Revenue Funds As of June 30, 2010, the fund balances by purpose were as follows: Dental Clinic $ 5,682 Preservation of Records 155 Adopt a Park 107,073 Park Woods Children 169 City Forest 245,725 BFD Imaging 8,338 Park Woods Complex 100,313 USS Maine Monument 15,922 Flower 1,133 Impact Fees 204,317 Parks 2,186 Tricentennial 1,871 Total dedicated revenue funds $ 692,884 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 47 DETAILED NOTES ON ALL FUNDS, CONTINUED Designated Fund Balance Designated fund balance of the General Fund at June 30, 2010 consists of amounts, which the City intends to use for the following purposes: Departmental balances carried forward $ 64,194 School department – regular 3,045,101 adult education 154,187 reading assessment 18,864 special revenue 337,726 school lunch 244,959 trust and agency 210,591 Total balances carried 4,075,622 Accrued summer teacher payroll (3,003,110) Pooled equipment 127,401 Bus equipment 105,141 Fire equipment 258,061 Improvement 376,576 Self insurance 1,485,708 Cameron stadium 352,877 Landfill closure 10,824 Cascade park maintenance 59,094 Demolition 41 PEG capital support 112,365 Credit reserve 79,764 Pickering Square development district 90,513 Parks & Rec Improvement (65,323) Benefit reserve 391,830 Arbitrage rebate 263,064 $ 4,720,448 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 48 DETAILED NOTES ON ALL FUNDS, CONTINUED K. Net Assets Net assets represent the difference between assets and liabilities. Net assets invested in capital assets, net of related debt 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 assets are reported as restricted when there are limitation 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 assets invested in capital assets, net of related debt was calculated as follows at June 30, 2010: Governmental Business-type Capital assets $122,960,892 $377,570,027 Accumulated depreciation (49,595,713) (189,211,614) Bonds payable (23,567,243) (29,752,704) Due from bond trustee 1,042,642 809,784 Total invested in capital assets net of related debt $ 50,840,578 $159,415,493 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, 2010, 2009 and 2008. CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 49 OTHER INFORMATION, CONTINUED 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, 2010, the amount of self-insurance liabilities was $1,979,642. This liability is the City’s best estimate based on available information. Changes in the reported liabilities since July 1, 2008 resulted from the following: Workers’ All other self- Compensation insured risks Total Unpaid claims as of July 1, 2008 $ 1,930,207 $ 231,633 $ 2,161,840 Incurred claims 339,943 - 339,943 Payments (699,045) - (699,045) Changes in estimates and other adjustments B. Tax Increment Financing Districts 230,199 5,618 235,817 Unpaid claims as of July 1, 2009 1,801,304 237,251 2,038,555 Incurred claims 264,678 - 264,679 Payments (728,179) (22,450) (750,629) Changes in estimates and other adjustments 447,519 985 448,504 Unpaid claims as of June 30, 2010 $ 1,785,322 $ 215,786 $ 2,001,108 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. Downtown Municipal Development District – To partially finance in excess of $70 million dollars of infrastructure improvements within the boundaries of the district. 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. CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 50 OTHER INFORMATION, CONTINUED C. Contingent Liabilities In February 1998, the City was served Notification of Potential Liability by the Federal Environmental Protection Agency (EPA) in connection with that agency’s efforts to clean up a disposal site. In 2007, LD 1929 was passed to establish a program to fund the cleanup costs at this site for certain parties, including municipalities. As such there should be no further costs to the City. A Consent Decree has been negotiated with the EPA and provides the terms for the final remedy of the site, part of which provides that the program, established under LD 1929, will sell bonds with the proceeds being used to pay future costs. Additional funds from the sale of bonds in excess of the final settlement costs will be available to the PRPs for payment of past costs. 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 September of 2005, the U.S. District Court issued an Order finding that the City is responsible for 40% of the remediation costs. 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 which is expected to be completed by December 2009. At this time, the remediation project cost has been completed. The City continues to work with State and Federal agencies to ensure the long term success of the work undertaken. 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 2010 covered payroll was $13,444,409 and City contributions were $1,128,127. 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 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 51 OTHER INFORMATION, CONTINUED contributions for those employees with employment contracts were $540,771 and $64,829 respectively, in fiscal year 2010. 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 2.80% to 6.50% 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, 2010, 2009, and 2008 were $447,626, $677,652, and $703,675 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 $4,248,963 (17.78%) for fiscal year 2010. 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 17.78% of their compensation. This cost is charged to the applicable grant. CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 52 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 In June of 2004, the Governmental Accounting Standards Board (GASB) issued Statement 45 which addressed the reporting and disclosure requirements for other postemployment benefits (OPEB). 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 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: Normal cost $ 493,875 Amortization of unfunded liability 622,717 Interest 22,113 Annual required contribution $1,138,705 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 53 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 year ending June 30, 2010 were as follows: Net OPEB obligation, June 30, 2009 $ 1,002,046 Annual OPEB cost 1,138,705 Less annual City contributions 136,659 Net OPEB obligation, June 30, 2010 $ 2,004,092 City contributions as a percentage of annual required contribution (ARC): 12.00% The unfunded actuarial accrued liability as a percentage of covered payroll for June 30, 2010 is as follows: Governmental Business-type Total Activities Activities June 30, 2010 Actuarial accrued liability (AAL) $ 8,488,427 $ 2,710,336 $ 11,198,763 Actuarial value of plan assets - - -___ Unfunded actuarial accrued liability (UAAL) $ 8,488,427 $ 2,710,336 $ 11,198,763 Covered payroll $ 17,224,485 $ 5,439,647 $ 22,664,132 UAAL as a percentage of covered payroll 49.41% 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 two 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 7/1/08 Actuarial cost method Entry age actuarial cost method Amortization method Level dollar Remaining amortization period 29 years - closed Actuarial assumptions: Investment rate of return 4.0% Participation 62.5% of eligible employees Healthcare cost trend rate 7.5% - 5.2% CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued II - 54 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 23, 2010 the City Council authorized the issuance of up to $1,636,000 in general obligations bonds for the purpose of funding the City’s annual fleet replacement, local share of State of Maine road projects, salt dome roof replacement and replacement of the HVAC at the Wastewater Treatment Plant operations building. On November 22, 2010, the City Council authorized the issuance of up to $4,710,000 in general obligation bonds to refund outstanding general obligation bonds on a current basis. The final maturity dates of the refunded general obligation bonds will remain unchanged. This refunding is expected to result approximately $700,000 in cumulative interest cost savings over the next ten years. The City Charter requires maintaining the City’s undesignated/unreserved fund balance at between 5% and 10% of the previous year’s expenditures, net of debt service. As policy, the City has targeted 7.5% as a reasonable balance. At June 30, 2010, this balance exceeded the City policy of 7.5% by $2,118,018. II - 55 2009 2010 Actuarial Valuation Date 7/1/2008 7/1/2008 Governmental activities: Actuarial value of assets -$-$ Actuarial accrued liability (AAL) 8,488,427 8,488,427 Unfunded actuarial accrued liability (UAAL) 8,488,427$ 8,488,427$ Funded ratio 0.00% 0.00% Covered payroll 16,257,319$ 17,224,485$ Business-type activities: Actuarial value of assets -$-$ Actuarial accrued liability (AAL) 2,710,336 2,710,336 Unfunded actuarial accrued liability (UAAL) 2,710,336$ 2,710,336$ Funded ratio 0.00% 0.00% Covered payroll 5,190,927$ 5,439,647$ Primary government: Actuarial value of assets -$-$ Actuarial accrued liability (AAL) 11,198,763 11,198,763 Unfunded actuarial accrued liability (UAAL) 11,198,763$ 11,198,763$ Funded ratio 0.00% 0.00% Covered payroll 21,448,246$ 22,664,132$ UAAL as a percentage of covered payroll 52.21% 49.41% Only two 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, 2010 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 - 56 Schedule A-1 CITY OF BANGOR, MAINE Balance Sheet General Fund June 30, 2010 ASSETS Cash and cash equivalents 12,953,810$ Investments 50,000 Receivables: Taxes 2,412,585 Accounts (net of allowance of $258,981) 657,371 Interfund 3,293,510 Intergovernmental 1,917,845 Loans 996,806 Inventory, at cost 855,035 Prepaid items 84,252 Total assets 23,221,214$ LIABILITIES AND FUND BALANCE Liabilities Accounts payable 987,276$ Accrued wages and benefits payable 3,991,851 Deferred revenue 2,319,816 Total liabilities 7,298,943 Fund balance Reserved for: Encumbrances 967,379 Prepaid items 84,252 Advances to other funds 1,650,500 Unreserved: Designated (Note J) 4,720,448 Undesignated 8,499,692 Total fund balance 15,922,271 Total liabilities and fund balance 23,221,214$ II - 57 Schedule A-2 CITY OF BANGOR, MAINE Schedule of Revenues, Expenditures and Changes in Undesignated Fund Balance - Budget and Actual - Budgetary Basis General Fund For the Fiscal Year Ended June 30, 2010 Balances Variance Carried 7/1/2009 Budget Actual Surplus Carried Revenues Taxes Real and personal property -$ 48,389,737$ 48,182,455$ (207,282)$-$ Change in deferred property tax - - (243,625) (243,625) - Tax increment financing district - (3,310,259) (3,003,158) 307,101 - Payment in lieu of taxes - 90,640 117,770 27,130 - Excise - 4,428,000 4,694,936 266,936 - Interest on delinquent taxes - 210,000 228,133 18,133 - Total taxes - 49,808,118 49,976,511 168,393 - Intergovernmental State revenue sharing - 4,400,000 3,832,933 (567,067) - School subsidy - 18,835,940 17,759,621 - (1,076,319) Other - municipal - 3,014,755 3,078,553 63,798 - school - 4,359,627 5,333,857 - 974,230 Total intergovernmental - 30,610,322 30,004,964 (503,269) (102,089) Other revenue Licenses and permits - 605,700 633,339 27,639 - Charges for service - municipal - 7,889,103 7,559,901 (329,202) - school - 3,962,847 4,533,040 - 570,193 Fines, forfeits and penalties - 36,700 30,657 (6,043) - Revenue from use of money and property - municipal - 818,606 615,962 (202,644) - Total other - 13,312,956 13,372,899 (510,250) 570,193 Total revenues - 93,731,396 93,354,374 (845,126) 468,104 II - 58 Schedule A-2 (con't) CITY OF BANGOR, MAINE Schedule of Revenues, Expenditures and Changes in Undesignated Fund Balance - Budget and Actual - Budgetary Basis General Fund For the Fiscal Year Ended June 30, 2010 Balances Variance Carried 7/1/2009 Budget Actual Surplus Carried Expenditures General government Council - 35,905 30,178 5,727 - Executive - 958,362 802,809 155,553 - Human resources - 105,617 103,277 2,340 - City clerk - 373,288 371,221 2,067 - Assessing - 433,293 434,252 (959) - Legal - 276,151 274,892 1,259 - Finance - 1,616,715 1,551,607 65,108 - Insurance - 177,100 175,539 1,561 - Planning, econ dev, code enforcement - 1,150,962 1,102,579 48,383 - Total general government - 5,127,393 4,846,354 281,039 - Public safety Police - 7,980,451 7,693,585 286,866 - Fire 122,800 7,609,219 7,659,213 72,806 - Total public safety 122,800 15,589,670 15,352,798 359,672 - Health, community services and recreation Health and community services -3,005,377 3,177,458 (172,081) - Parks and recreation - 1,503,068 1,544,920 (41,852) - Total health, commun. serv and rec. - 4,508,445 4,722,378 (213,933) - Public buildings and services - 10,553,115 10,058,906 494,209 - II - 59 Schedule A-2 (con't) CITY OF BANGOR, MAINE Schedule of Revenues, Expenditures and Changes in Undesignated Fund Balance - Budget and Actual - Budgetary Basis General Fund For the Fiscal Year Ended June 30, 2010 Balances Variance Carried 7/1/2009 Budget Actual Surplus Carried Expenditures, continued Other agencies County tax - 2,546,636 2,546,636 - - Downtown Development District - 54,456 54,456 - - Public library - 1,536,907 1,527,837 9,070 - Other agencies 31,950 204,690 162,400 10,046 64,194 Total other agencies 31,950 4,342,689 4,291,329 19,116 64,194 Education Regular 2,675,072 42,914,809 41,029,656 - 4,560,225 Adult education 157,400 527,540 506,597 - 178,343 School lunch 144,893 1,238,083 1,246,862 - 136,114 Reading assessment 21,183 - 2,320 - 18,863 Special revenue 101,324 3,278,893 3,801,588 - (421,371) Trust and agency 215,552 991,808 1,089,360 - 118,000 Total education 3,315,424 48,951,133 47,676,383 - 4,590,174 Other appropriations Pensions and other fringe benefits - 1,879,661 1,879,293 368 - Debt service - 2,295,636 2,362,369 (66,733) - Tax increment financing payments - 729,308 729,308 - - Total other appropriations - 4,904,605 4,970,970 (66,365) - Total expenditures 3,470,174 93,977,050 91,919,118 873,738 4,654,368 Excess (deficiency) of revenues over/under expenditures (3,470,174) (245,654) 1,435,256 28,612 5,122,472 II - 60 Schedule A-2 (con't) CITY OF BANGOR, MAINE Schedule of Revenues, Expenditures and Changes in Undesignated Fund Balance - Budget and Actual - Budgetary Basis General Fund For the Fiscal Year Ended June 30, 2010 Balances Variance Carried 7/1/2009 Budget Actual Surplus Carried Other financing sources (uses) Appropriation from designated fund balance - 1,305,330 103,480 (155,000) (1,046,850) Appropriation from undesignated fund balance - 140,000 - (140,000) - Sale of assets - 2,000 8,168 6,168 - Contributions - - 325 325 - Insurance Settlements - 1,500 13,906 12,406 - Transfers to other funds - (502,500) (502,500) - - Transfers from other funds - 7,000 10,793 3,793 - Operating transfers - (707,676) (707,676) - - Total other financing sources (uses) - 245,654 (1,073,504) (272,308) (1,046,850) Net change in fund balance (3,470,174)$-$ 361,752$ (243,696) 4,075,622$ Undesignated fund balance, beginning of year 8,743,388 Undesignated fund balance, end of year 8,499,692$ 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 - 61 Schedule B-1 CITY OF BANGOR, MAINE Combining Balance Sheet Nonmajor Governmental Funds June 30, 2010 Nonmajor Special Nonmajor Total Other Revenue Permanent Governmental Funds Funds Funds ASSETS Cash and cash equivalents $ 15,524 -$ 15,524$ Investments - 104,685 104,685 Receivables: Interfund 164,452 - 164,452 Loans /Notes 1,558,580 1,014,969 2,573,549 Intergovernmental 196,219 - 196,219 Total assets $ 1,934,775 1,119,654$ 3,054,429$ LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 45,374 -$ 45,374$ Accrued wages and benefits payable 31,796 - 31,796 Deferred revenue 289,584 - 289,584 Interfund loans payable 190,705 - 190,705 Total liabilities 557,459 - 557,459 Fund balances Reserved, principal - 659,782 659,782 Unreserved, undesignated 1,377,316 459,872 1,837,188 Total fund balances 1,377,316 1,119,654 2,496,970 Total liabilities and fund balances $ 1,934,775 1,119,654$ 3,054,429$ II - 62 Schedule B-2 CITY OF BANGOR, MAINE Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Fiscal Year Ended June 30, 2010 Nonmajor Special Nonmajor Total Other Revenue Permanent Governmental Funds Funds Funds Revenues Taxes $ 862,315 -$ 862,315$ Intergovernmental 5,640,477 - 5,640,477 Charges for services 920,498 - 920,498 Program income 25,615 - 25,615 Revenue from use of money and property 177,348 - 177,348 Other revenue 21,834 3,600 25,434 Interest revenue - 61,286 61,286 Total revenues 7,648,087 64,886 7,712,973 Expenditures Current: Personnel 1,073,901 - 1,073,901 Payments to beneficiaries 874,401 - 874,401 Other 3,478,871 - 3,478,871 Bus operations 2,128,626 - 2,128,626 Program expenditures - 4,058 4,058 Total expenditures 7,555,799 4,058 7,559,857 Excess (deficiency) of revenues over (under) expenditures 92,288 60,828 153,116 Other financing sources (uses) Transfer to other funds (126,800) (30,500) (157,300) Transfer from other funds 1,390 - 1,390 Total other financing sources (uses) (125,410) (30,500) (155,910) Net change in fund balances (33,122) 30,328 (2,794) Fund balances, beginning of year 1,410,438 1,089,326 2,499,764 Fund balances, end of year $ 1,377,316 1,119,654$ 2,496,970$ II - 63 Schedule B-3 CITY OF BANGOR, MAINE Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2010 Dedicated Other Grant Revenue HUD Funds Fund Funds Other Totals ASSETS Cash and cash equivalents -$ -$ -$ 15,524$ 15,524$ Receivables: Interfund 164,452 - - - 164,452 Loans/Notes 289,584 - 692,884 576,112 1,558,580 Intergovernmental - 196,219 - - 196,219 Total assets 454,036$ 196,219$ 692,884$ 591,636$ 1,934,775$ LIABILITIES AND FUND BALANCES Liabilities Accounts payable -$ 43,706$ -$ 1,668$ 45,374$ Accrued wages and benefits payable - 31,796 - - 31,796 Deferred revenue 289,584 - - - 289,584 Interfund loans payable - 190,705 - - 190,705 Total liabilities 289,584 266,207 - 1,668 557,459 Fund balances (deficits) Unreserved, undesignated 164,452 (69,988) 692,884 589,968 1,377,316 Total fund balances 164,452 (69,988) 692,884 589,968 1,377,316 Total liabilities and fund balances 454,036$ 196,219$ 692,884$ 591,636$ 1,934,775$ II - 64 Schedule B-4 CITY OF BANGOR, MAINE Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds For the Fiscal Year Ended June 30, 2010 Dedicated Other Grant Revenue HUD Funds Fund Funds Other Totals Revenues Taxes -$-$-$ 862,315$ 862,315$ Intergovernmental - 5,640,477 - - 5,640,477 Charges for services - 920,498 - - 920,498 Program income 25,615 - - - 25,615 Revenue from use of money and property 55 - 57,470 119,823 177,348 Contributions - - 4,576 17,258 21,834 Total revenues 25,670 6,560,975 62,046 999,396 7,648,087 Expenditures Personnel - 1,073,901 - - 1,073,901 Payments to beneficiaries - - 7 874,394 874,401 Other 116 3,476,862 - 1,893 3,478,871 Bus operations - 2,128,626 - - 2,128,626 Total expenditures 116 6,679,389 7 876,287 7,555,799 Excess (deficiency) of revenues over (under) expenditures 25,554 (118,414) 62,039 123,109 92,288 Other financing sources (uses) Transfers to other funds - (2,195) (83,505) (41,100) (126,800) Transfers from other funds - - - 1,390 1,390 Total other financing sources (uses) - (2,195) (83,505) (39,710) (125,410) Net change in fund balances 25,554 (120,609) (21,466) 83,399 (33,122) Fund balances, beginning of year 138,898 50,621 714,350 506,569 1,410,438 Fund balances (deficit), end of year 164,452$ (69,988)$ 692,884$ 589,968$ 1,377,316$ II - 65 Schedule B-5 CITY OF BANGOR, MAINE Combining Balance Sheet Nonmajor Permanent Funds June 30, 2010 Revolving Other Loan Funds Funds Totals ASSETS Investments $ - 104,685$ 104,685$ Loans receivable 987,712 27,257 1,014,969 Total assets $ 987,712 131,942$ 1,119,654$ LIABILITIES AND FUND BALANCES Liabilities $--$ -$ Total liabilities $ - -$ -$ Fund balances Principal 527,840 131,942 659,782 Unexpended income 459,872 - 459,872 Total fund balances 987,712 131,942 1,119,654 Total liabilities and and fund balances $ 987,712 131,942$ 1,119,654$ II - 66 Schedule B-6 CITY OF BANGOR, MAINE Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Permanent Funds For the Fiscal Year Ended June 30, 2010 Revolving Other Loan Funds Funds Totals Revenues Investment income $ 49,828 11,458$ 61,286$ Lot sales 3,600 - 3,600 Total revenues 53,428 11,458 64,886 Expenditures Current: Payments to beneficiaries 100 3,000 3,100 Other miscellaneous - 958 958 Total expenditures 100 3,958 4,058 Excess (deficiency) of revenues over (under) expenditures 53,328 7,500 60,828 Other financing uses Transfer to other funds (30,500) - (30,500) Transfer from other funds - - - Total other financing uses (30,500) - (30,500) Net change in fund balances 22,828 7,500 30,328 Fund balances, beginning of year 964,884 124,442 1,089,326 Fund balances, end of year $ 987,712 131,942$ 1,119,654$ This page left intentionally blank 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. Bass Park Fund – This fund accounts for the operation of the Bangor auditorium, Bangor Civic Center, and 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. 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 - 67 Schedule C-1 CITY OF BANGOR, MAINE Combining Statement of Net Assets Nonmajor Proprietary Funds June 30, 2010 Business-type Activities - Enterprise Funds Bass Municipal Total Park Parking Park Golf Nonmajor Woods Fund Fund Course Proprietary Funds ASSETS Current assets Cash and cash equivalents 109$ 225,461$ 10,571$ 563,751$ 799,892$ Accounts receivable 22,245 279 83,402 - 105,926 Less allowance for uncollectible accounts - - (27,110) - (27,110) Net accounts receivable 22,245 279 56,292 - 78,816 Inventories, at cost - - 18,105 - 18,105 Prepaid items - - 13,317 - 13,317 Total current assets 22,354 225,740 98,285 563,751 910,130 Noncurrent assets Capital Assets: Land and improvements 295,025 - 828,921 1,594,732 2,718,678 Buildings and improvements 1,933,061 - 8,741,550 912,607 11,587,218 Machinery and equipment 22,952 - 144,428 311,124 478,504 Parking structures - 11,350,354 - - 11,350,354 2,251,038 11,350,354 9,714,899 2,818,463 26,134,754 Less accumulated depreciation (1,365,318) (7,652,802)(4,833,216)(1,524,218) (15,375,554) Net capital assets 885,720 3,697,552 4,881,683 1,294,245 10,759,200 Deposits 20,000 - - - 20,000 Total noncurrent assets 905,720 3,697,552 4,881,683 1,294,245 10,779,200 Total assets 928,074 3,923,292 4,979,968 1,857,996 11,689,330 Continued from previous page II - 68 Schedule C-1 (con't) CITY OF BANGOR, MAINE Combining Statement of Net Assets Nonmajor Proprietary Funds June 30, 2010 Business-type Activities - Enterprise Funds Bass Municipal Total Park Parking Park Golf Nonmajor Woods Fund Fund Course Proprietary Funds LIABILITIES Current liabilities Accounts payable 46,116 1,752 38,664 15,107 101,639 Accrued wages and benefits payable 903 7,858 17,794 14,404 40,959 Accrued interest - 29,624 9,869 6,984 46,477 Workers' compensation - 4,474 6,255 - 10,729 Unearned revenue - 12,819 14,813 - 27,632 Accrued compensated absences 15,623 15,750 57,985 18,945 108,303 Interfund loans payable 355,700 - 1,900,255 - 2,255,955 General obligation debt payable - 407,760 134,231 32,110 574,101 Deferred amount on refunding - (3,368) - - (3,368) Total current liabilities 418,342 476,669 2,179,866 87,550 3,162,427 Long-term liabilities Workers' compensation - 5,526 3,745 - 9,271 General obligation debt payable - 2,282,846 855,053 533,351 3,671,250 Net OPEB obligation 6,856 8,892 30,120 14,582 60,450 Other long-term liabilities 193,061 19,869 - - 212,930 Total long-term liabilities 199,917 2,317,133 888,918 547,933 3,953,901 Total liabilities 618,259 2,793,802 3,068,784 635,483 7,116,328 NET ASSETS Invested in capital assets, net of related debt 885,720 1,170,853 4,329,514 815,823 7,201,910 Unrestricted (575,905) (41,363) (2,418,330) 406,690 (2,628,908) Total net assets 309,815$ 1,129,490$ 1,911,184$ 1,222,513$ 4,573,002$ II - 69 Schedule C-2 Bass Municipal Total Park Parking Park Golf Nonmajor Woods Fund Fund Course Proprietary Funds Operating revenues Charges for services 371,832$ 1,050,579$ 1,382,947$ 658,053$ 3,463,411$ Operating expenses Operating expenses other than depreciation and amortization 440,487 738,972 1,722,814 593,397 3,495,670 Depreciation and amortization 89,123 523,812 151,630 114,690 879,255 Total operating expenses 529,610 1,262,784 1,874,444 708,087 4,374,925 Operating income (loss) (157,778) (212,205) (491,497) (50,034) (911,514) Nonoperating revenue (expenses) Interest income - 160 22 2,538 2,720 Interest expense - (140,138) (48,629) (25,293) (214,060) Total nonoperating revenue (expenses) - (139,978) (48,607) (22,755) (211,340) Net income (loss) before grants/contributions and transfers (157,778) (352,183) (540,104) (72,789) (1,122,854) Grants/contributions received for capital assets - 1,634,186 3,641,731 - 5,275,917 Transfers to other funds - (8,389) - (24,596) (32,985) Transfers from other funds 78,224 260,426 528,750 - 867,400 Change in net assets (79,554) 1,534,040 3,630,377 (97,385) 4,987,478 Net assets, beginning of year 389,369 (404,550) (1,719,193) 1,319,898 (414,476) Net assets, end of year 309,815$ 1,129,490$ 1,911,184$ 1,222,513$ 4,573,002$ Business-type Activities - Enterprise Funds Nonmajor Proprietary Funds For the Fiscal Year Ended June 30, 2010 CITY OF BANGOR, MAINE Combining Statement of Revenues, Expenses and Changes in Net Assets Continued on next page II - 70 Schedule C-3 Bass Municipal Total Park Parking Park Golf Nonmajor Woods Fund Fund Course Proprietary Funds Cash flows from operating activities Cash received from customers 349,717$ 1,039,048$ 1,366,603$ 658,053$ 3,413,421$ Cash paid to suppliers for goods and services (356,405) (470,862) (916,212) (243,101) (1,986,580) Cash paid to employees for services (88,953) (254,834) (766,758) (340,638) (1,451,183) Net cash provided by (used in) operating activities (95,641) 313,352 (316,367) 74,314 (24,342) Cash flows from noncapital financing activities Interfund loans (repayments) 17,300 - 400 - 17,700 Transfers in 78,224 260,426 528,750 - 867,400 Transfers out - (8,389) - (24,596) (32,985) Net cash provided by (used in) noncapital financing activities 95,524 252,037 529,150 (24,596) 852,115 Cash flows from capital and related financing activities Proceeds from general obligation bonds - 156,000 328,960 - 484,960 Acquisition and construction of capital assets - (1,645,087) (18,035) (30,000) (1,693,122) Principal paid on general obligation bonds - (587,885) (467,001) (31,823) (1,086,709) Interest paid on general obligation bonds - (134,881) (52,047) (25,704) (212,632) Grants/contributions received for capital assets - 1,634,186 -- 1,634,186 Net cash provided by (used in) capital and related financing activities - (577,667) (208,123) (87,527) (873,317) Cash flows from investing activities Net sales (purchases) of investments - 66,795 - 497,471 564,266 Interest on investments - 287 22 2,538 2,847 Net cash provided by (used in) investing activities - 67,082 22 500,009 567,113 Net increase (decrease) in cash (117) 54,804 4,682 462,200 521,569 Cash, beginning of year 226 170,657 5,889 101,551 278,323 Cash, end of year 109$ 225,461$ 10,571$ 563,751$ 799,892$ Schedule of noncash investing, capital and financing activities: During the year, Bass Park received leasehold improvements to its harness racing facilities in the amount of $3,641,731. For the Fiscal Year Ended June 30, 2010 Business-type Activities - Enterprise Funds CITY OF BANGOR, MAINE Combining Statement of Cash Flows - Nonmajor Proprietary Funds Continued from previous page II - 71 Schedule C-3 (con't) Bass Municipal Total Park Parking Park Golf Nonmajor Woods Fund Fund Course Proprietary Funds Reconciliation of operating income (loss) to net cash provided by (used in) operating activities Operating income (loss) (157,778)$ (212,205)$ (491,497)$ (50,034)$ (911,514)$ Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities Depreciation and amortization 89,123 523,812 151,630 114,690 879,255 Changes in assets and liabilities: (Increase) decrease in accounts receivable (22,115) 1,567 (26,136) - (46,684) (Increase) decrease in inventories - - 657 - 657 (Increase) decrease in prepaid items - - 19,872 - 19,872 Increase (decrease) in accounts payable 14,693 1,028 3,891 1,890 21,502 Increase (decrease) in unearned revenue - (13,098) 9,792 - (3,306) Increase (decrease) in other liabilities (19,564) 12,248 15,424 7,768 15,876 Total adjustments 62,137 525,557 175,130 124,348 887,172 Net cash provided by (used in) operating activities (95,641)$ 313,352$ (316,367)$ 74,314$ (24,342)$ Business-type Activities - Enterprise Funds CITY OF BANGOR, MAINE Combining Statement of Cash Flows - Nonmajor Proprietary Funds For the Fiscal Year Ended June 30, 2010 II - 72 Schedule C-4 CITY OF BANGOR, MAINE Schedule of Revenues, Expenditures and Encumbrances Budget and Actual - Budgetary Basis Sewer Utility Fund - Enterprise Fund For the Fiscal Year Ended June 30, 2010 Variance Positive Budget Actual (Negative) Revenues Charges for services 7,435,150$ 7,539,736$ 104,586$ Interest and other revenue 279,418 63,135 (216,283) Total revenues 7,714,568 7,602,871 (111,697) Expenditures and encumbrances Salaries 1,181,020 1,141,833 39,187 Fringe benefits 327,985 515,962 (187,977) Supplies and materials 1,217,118 1,029,322 187,796 Contractual services 773,963 653,374 120,589 Interfund charges 467,980 421,860 46,120 Miscellaneous 21,870 21,515 355 Debt service 3,506,072 3,433,098 72,974 Depreciation 1,663,702 1,690,101 (26,399) Outlay 218,560 130,855 87,705 Total expenditures and encumbrances 9,378,270 9,037,920 340,350 Excess (deficiency) of revenues over/under expenditures and encumbrances (1,663,702)$ (1,435,049)$ 228,653$ II - 73 Schedule C-5 CITY OF BANGOR, MAINE Schedule of Revenues, Expenditures and Encumbrances Budget and Actual - Budgetary Basis Airport Fund - Enterprise Fund For the Fiscal Year Ended June 30, 2010 Variance Positive Budget Actual (Negative) Revenues Charges for services 13,841,638$ 13,762,967$(78,671)$ Interest and other revenue 846,500 812,600 (33,900) Total revenues 14,688,138 14,575,567 (112,571) Expenditures and encumbrances Salaries 5,413,036 5,350,385 62,651 Fringe benefits 1,149,650 1,217,675 (68,025) Supplies and materials 2,921,652 1,941,985 979,667 Contractual services 2,642,783 2,391,708 251,075 Interfund charges 716,962 725,032 (8,070) Miscellaneous 224,300 320,333 (96,033) Debt service 941,831 972,098 (30,267) Depreciation 7,400,000 7,385,127 14,873 Outlay 884,956 658,079 226,877 Credits -- - Total expenditures and encumbrances 22,295,170 20,962,422 1,332,748 Excess (deficiency) of revenues over/under expenditures and encumbrances (7,607,032)$ (6,386,855)$1,220,177$ II - 74 Schedule C-6 CITY OF BANGOR, MAINE Schedule of Revenues, Expenditures and Encumbrances Budget and Actual - Budgetary Basis Park Woods - Enterprise Fund For the Fiscal Year Ended June 30, 2010 Variance Positive Budget Actual (Negative) Revenues Charges for services 430,397$ 352,278$ (78,119)$ Interest and other revenue 14,658 78,224 63,566 Total revenues 445,055 430,502 (14,553) Expenditures and encumbrances Salaries 77,006 73,878 3,128 Fringe benefits 15,200 13,314 1,886 Supplies and materials 208,250 139,834 68,416 Contractual services 155,701 193,636 (37,935) Interfund charges 4,740 545 4,195 Miscellaneous 100 7,454 (7,354) Depreciation 89,123 89,123 - Outlay - - - Total expenditures and encumbrances 550,120 517,784 32,336 Excess (deficiency) of revenues over/under expenditures and encumbrances (105,065)$ (87,282)$ 17,783$ II - 75 Schedule C-7 CITY OF BANGOR, MAINE Schedule of Revenues, Expenditures and Encumbrances Budget and Actual - Budgetary Basis Parking Fund - Enterprise Fund For the Fiscal Year Ended June 30, 2010 Variance Positive Budget Actual (Negative) Revenues Charges for services 1,096,992$ 1,050,580$ (46,412)$ Operating transfer 240,426 260,426 - Interest and other revenue - 160 160 Total revenues 1,337,418 1,311,166 (46,252) Expenditures and encumbrances Salaries 218,428 213,112 5,316 Fringe benefits 47,192 42,683 4,509 Supplies and materials 7,000 4,243 2,757 Contractual services 381,435 346,666 34,769 Interfund charges 113,437 125,277 (11,840) Debt service 569,925 566,765 3,160 Depreciation 478,381 523,812 (45,431) Outlay - 1,968 (1,968) Total expenditures and encumbrances 1,815,798 1,824,526 (8,728) Excess (deficiency) of revenues over/under expenditures and encumbrances (478,380)$ (513,360)$ (34,980)$ II - 76 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, 2010 Variance Positive Budget Actual (Negative) Revenues Charges for services 1,451,230$ 1,382,947$ (68,283)$ Operating transfer 497,750 497,750 - Interest and other revenue - 22 22 Total revenues 1,948,980 1,880,719 (68,261) Expenditures and encumbrances Salaries 637,033 625,035 11,998 Fringe benefits 136,016 141,407 (5,391) Supplies and materials 391,675 364,989 26,686 Contractual services 398,370 378,796 19,574 Interfund charges 155,175 146,008 9,167 Miscellaneous 47,000 53,544 (6,544) Debt service 193,711 190,088 3,623 Depreciation 61,562 151,630 (90,068) Credits (10,000) (10,000) - Total expenditures and encumbrances 2,010,542 2,041,497 (30,955) Excess (deficiency) of revenues over/under expenditures and encumbrances (61,562)$ (160,778)$ (99,216)$ II - 77 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, 2010 Variance Positive Budget Actual (Negative) Revenues Charges for services 631,000$ 658,053$ 27,053$ Interest and other revenue 10,000 2,538 (7,462) Total revenues 641,000 660,591 19,591 Expenditures and encumbrances Salaries 275,333 302,552 (27,219) Fringe benefits 37,248 39,084 (1,836) Supplies and materials 89,900 99,418 (9,518) Contractual services 76,100 82,809 (6,709) Interfund charges 60,892 81,409 (20,517) Debt service 57,527 57,527 - Depreciation 115,300 114,690 610 Outlay 44,000 35,950 8,050 Total expenditures and encumbrances 756,300 813,439 (57,139) Excess (deficiency) of revenues over/under expenditures and encumbrances (115,300)$ (152,848)$ (37,548)$ II - 78 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, 2010 Variance Positive Budget Actual (Negative) Revenues Charges for services 484,721$ 507,867$ 23,146$ Interest and other revenue 274,777 39,477 (235,300) Total revenues 759,498 547,344 (212,154) Expenditures and encumbrances Supplies and materials 27,114 19,130 7,984 Contractual services 190,108 163,399 26,709 Interfund charges - - - Miscellaneous 2,320 2,303 17 Debt service 397,956 397,956 - Depreciation 205,898 244,278 (38,380) Outlay 142,000 601 141,399 Total expenditures and encumbrances 965,396 827,667 137,729 Excess (deficiency) of revenues over/under expenditures and encumbrances (205,898)$ (280,323)$ (74,425)$ This page left intentionally blank 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 - 79 Schedule D-1 CITY OF BANGOR, MAINE Statement of Change in Assets and Liabilities Agency Fund For the Fiscal Year Ended June 30, 2010 Balance Balance July 1, 2009 Additions Deletions June 30, 2010 ASSETS Cash: American Folk Festival funds 40,361$ 857,340$ 897,701$-$ Bangor Area Stormwater Group 3,264 49,020 46,889 5,395 School Activity Funds 97,991 230,903 237,845 91,049 Total assets 141,616$ 1,137,263$ 1,182,435$ 96,444$ LIABILITIES Funds held for others: American Folk Festival 40,361$ 857,340$ 897,701$-$ Bangor Area Stormwater Group 3,264 49,020 46,889 5,395 School Activity Funds 97,991 230,903 237,845 91,049 Total liabilities 141,616$ 1,137,263$ 1,182,435$ 96,444$ CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS II - 80 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, 2010 Balance Balance Function and Activity 2009 Additions Deletions 2010 General government BAT community connector 811,706$-$ 151,121$ 660,585$ Central service 21,153 - 3,846 17,307 City clerk 20,635 - 6,587 14,048 City hall 591,074 - 16,078 574,996 Community and economic development 4,807,538 1,665,096 810,697 5,661,937 Engineering 52,726 - 6,921 45,805 Information services 194,082 - 66,919 127,163 Motor pool 4,024,437 484,573 607,284 3,901,726 Other - unclassified 475,795 - 74,526 401,269 Total general government 10,999,146 2,149,669 1,743,979 11,404,836 Public safety Fire 6,190,938 313,795 514,963 5,989,770 Police 11,179,228 90,639 383,344 10,886,523 Total public safety 17,370,166 404,434 898,307 16,876,293 Health, community services and recreation Parks and recreation 2,440,397 - 170,933 2,269,464 Total health, community services and recreation 2,440,397 - 170,933 2,269,464 Public building and services Public works 17,326,398 739,398 1,303,242 16,762,554 Total public buildings and services 17,326,398 739,398 1,303,242 16,762,554 Education 26,503,204 427,747 878,919 26,052,032 Total governmental fund capital assets 74,639,311$ 3,721,248$ 4,995,380$ 73,365,179$ OTHER INFORMATION II - 81 Schedule F-1 CITY OF BANGOR, MAINE Assessed Valuation, Commitment and Collections For the Fiscal Year Ended June 30, 2010 VALUATION Land and buildings 2,299,385,800$ Land and buildings - Homestead exemption 70,357,600 Personal property 257,018,100 Personal property - BETE exemption 24,801,200 Total valuation 2,651,562,700$ COMMITMENT Real estate, personal property (excludes Homestead and BETE exemptions) 2,556,403,900$ Tax rate 0.01905 Total commitment 48,699,494 ADD Supplemental taxes committed 20,353 48,719,847 LESS Collections 2010 46,205,428 Abatements 588,817 2010 taxes receivable at June 30, 2010 1,925,602$ II - 82 Schedule F-2 CITY OF BANGOR, MAINE Undesignated Fund Balance Sufficiency Calculation For the Fiscal Year Ended June 30, 2010 It is the policy of the City to maintain an undesignated fund balance approximately 7.5% of operating expenditures. The following table sets forth the calculation as to the sufficiency of the June 30, 2010 undesignated fund balance. General Fund expenditures/uses ( Schedule A-2) General government 4,846,354$ Public safety 15,352,798 Health, community services and recreation 4,722,378 Public buildings and services 10,058,906 Other agencies 4,291,329 Education 47,676,383 Other appropriations 4,970,970 Other uses, gross* 1,210,176 Gross expenditures and uses 93,129,294 General Fund debt service 8,040,303 Net expenditures and uses 85,088,991$ Indicated undesignated fund balance @ 7.5% 6,381,674$ Actual undesignated fund balance (Schedule A-2) 8,499,692$ Actual undesignated fund balance as a percentage of net expenditures and uses 9.99% Over (under) funded status 2,118,018$ * excludes amounts appropriated from undesignated fund balance This page left intentionally blank 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. 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 2003* 2004* 2005* 2006* 2007 2008 2009 2010 Governmental activities: Invested in capital assets, net of related debt 35,304,708$ 41,565,642$ 46,993,577$ 48,707,054$ 48,257,039$ 49,447,154$ 53,356,885$ 50,840,578$ Restricted 507,743 510,433 513,851 1,002,525 1,055,881 656,658 6,198,372 1,120,413 Unrestricted (16,178,265) (20,154,733) (21,010,448) (21,528,721) (9,784,221) (15,155,253) (26,929,961) (16,328,681) Total governmental activities net assets 19,634,186 21,921,342 26,496,980 28,180,858 39,528,699 34,948,559 32,625,296 35,632,310 Business-type activities: Invested in capital assets, net of related debt 149,863,511 148,218,655 150,970,961 154,068,754 157,302,400 154,066,934 156,120,884 159,415,493 Restricted - - - - - - - - Unrestricted 19,579,291 21,096,167 21,705,461 16,998,096 14,715,610 17,219,955 14,927,182 13,609,516 Total business-type activities net assets 169,442,802 169,314,822 172,676,422 171,066,850 172,018,010 171,286,889 171,048,066 173,025,009 Primary government: Invested in capital assets, net of related debt 185,168,219 189,784,297 197,964,538 202,775,808 205,559,439 203,514,088 209,477,769 210,256,071 Restricted 507,743 510,433 513,851 1,002,525 1,055,881 656,658 6,198,372 1,120,413 Unrestricted 3,401,026 941,434 695,013 (4,530,625) 4,931,389 2,064,702 (12,002,779) (2,719,165) Total primary government net assets 189,076,988$ 191,236,164$ 199,173,402$ 199,247,708$ 211,546,709$ 206,235,448$ 203,673,362$ 208,657,319$ Only eight years have been presented because 2003 was the year GASB Statement No. 34 was implemented. * - Certain amounts have been reclassified to conform with 2007 presentation. (accrual basis of accounting) Last Ten Fiscal Years Net Assets by Component CITY OF BANGOR, MAINE Continued on next page III - 2 Table 2 Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 Expenses Governmental activities: General government 6,060,687$ 6,487,572$ 6,435,386$ 6,947,106$ 7,052,860$ 8,744,549$ 7,868,247$ 8,279,943$ Public safety 11,114,804 12,066,567 12,478,326 12,890,750 13,756,962 14,945,855 15,671,645 16,898,374 Health, community services and recreation 3,340,989 3,606,827 4,000,249 7,301,546 7,348,875 8,413,205 9,168,870 9,331,784 Public building and services 7,050,085 7,360,360 7,609,989 8,256,266 8,659,473 9,142,251 9,671,469 11,300,352 Other agencies 3,322,395 3,273,003 3,514,658 3,610,935 3,787,970 4,829,547 4,580,661 4,658,904 Education 40,828,756 40,279,055 42,659,395 45,522,795 46,106,647 47,537,197 54,294,824 52,763,860 Unclassified 2,044,069 389,598 65,639 947,025 1,136 - - - Restricted grants* 6,551,455 6,857,039 7,326,307 - - - - - Arena Development - - - - 417,030 41,091 51,332 39,075 Community development* - - - 2,419,594 1,865,026 2,156,241 912,992 1,506,038 Streets/Sidewalks* - - - 2,911,131 2,884,655 1,359,002 2,141,079 5,079,985 Waterfront* - - - 990,961 399,015 1,754,281 9,252,263 79,911 Public transportation* - - - 1,798,968 1,841,516 2,118,374 3,042,434 2,792,904 Tax increment financing* - - - 1,092,770 1,101,078 1,066,192 1,114,112 1,630,081 Interest on debt 740,077 3,083,447 3,166,250 3,098,248 1,952,612 3,206,764 2,651,599 2,555,839 Capital maintenance expenses* 1,824,489 2,666,118 1,674,034 - - - - - Total governmental activities expenses 82,877,806 86,069,586 88,930,233 97,788,095 97,174,855 105,314,549 120,421,527 116,917,050 Business-type activities: Sewer Utility 5,744,275 5,751,710 5,859,588 5,818,127 6,052,420 6,052,419 6,197,277 6,253,436 Airport 14,489,128 15,060,963 16,368,681 16,947,056 18,645,140 19,641,953 19,934,243 20,532,553 Park Woods 449,873 531,986 598,854 540,207 678,867 678,867 590,250 529,610 Parking 1,370,737 1,431,983 1,425,508 1,322,138 1,438,125 1,438,125 1,374,909 1,402,922 Bass Park 1,944,718 1,935,653 1,889,215 1,918,111 1,993,205 1,993,205 1,851,914 1,923,073 Municipal Golf Course 575,408 626,739 592,323 647,499 695,969 695,969 745,339 733,380 Economic Development 271,047 338,795 397,881 484,264 695,851 695,851 712,195 634,764 Total business-type activities expenses 24,845,186 25,677,829 27,132,050 27,677,402 30,199,577 31,196,389 31,406,127 32,009,738 Total primary government expenses 107,722,992$ 111,747,415$ 116,062,283$ 125,465,497$ 127,374,432$ 136,510,938$ 151,827,654$ 148,926,788$ Only eight years have been presented because 2003 was the year GASB Statement No. 34 was implemented. * - Amounts previously reported as restricted grants and capital maintenance expenses have been classified into new functions beginning in 2006. (accrual basis of accounting) Last Ten Fiscal Years Changes in Net Assets CITY OF BANGOR, MAINE Continued on next page III - 3 Table 2 (con't) Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 Program Revenues Governmental activities: Charges for services General government 934,540$ 1,103,382$ 1,447,058$ 1,672,854$ 2,334,040$ 2,282,374$ 1,869,711$ 2,386,637$ Public safety 1,446,942 1,923,804 1,908,000 2,471,220 2,182,680 2,439,831 3,010,167 2,401,930 Health, community services and recreation 647,709 624,778 674,364 756,207 681,583 771,254 768,450 836,689 Public buildings and services 3,043,886 3,537,702 3,766,334 4,076,981 3,871,412 3,967,990 3,786,050 3,859,849 Other agencies - - - - - 22,243 22,068 - Education 3,742,385 3,857,798 4,549,286 4,561,352 4,408,431 4,539,787 4,386,457 4,533,041 Unclassified 26,830 19,719 20,036 859,682 61,128 - - - Restricted grants 5,392,472 1,368,366 1,079,690 ----- Arena Development - - - - 1,630,360 1,689,657 2,205,771 2,380,158 Community development --- 672,459 658,141 297,394 301,019 332,295 Streets/Sidewalks -----159,351 21,836 94,267 Public transportation - - - 536,491 659,960 809,531 944,804 923,433 Tax increment financing ------1,711- Operating grants and contributions 21,566,478 24,743,028 25,986,614 29,577,430 30,534,706 41,370,518 34,155,649 35,683,710 Capital grants and contributions 3,814,705 2,098,577 4,117,072 3,788,485 2,604,652 2,119,150 2,068,478 6,578,917 Total governmental activities program revenues 40,615,947 39,277,154 43,548,454 48,973,161 49,627,093 60,469,080 53,542,171 60,010,926 Business-type activities: Charges for services Sewer Utility 6,569,790 6,281,870 5,970,615 6,206,605 6,663,408 6,745,112 7,537,879 7,288,499 Airport 9,291,513 11,398,518 11,527,061 12,074,504 13,555,003 14,475,879 13,953,287 13,767,394 Park Woods 283,052 279,588 310,389 287,452 340,494 340,494 369,478 371,832 Parking 807,645 892,820 943,990 963,697 1,001,697 1,001,697 997,111 1,050,579 Bass Park 1,362,054 1,253,421 1,238,707 1,460,931 1,426,599 1,426,599 1,253,236 1,382,947 Municipal Golf Course 623,233 595,852 586,956 604,365 655,834 655,834 608,930 658,053 Economic Development 388,165 316,062 433,694 391,658 422,716 422,716 569,549 507,867 Capital grants and contributions 11,274,222 3,376,637 7,749,367 2,581,874 4,377,242 3,426,732 4,113,557 8,684,860 Total business-type activities program revenues 30,599,674 24,394,768 28,760,779 24,571,086 28,442,993 28,495,063 29,403,027 33,712,031 Total primary government program revenues 71,215,621$ 63,671,922$ 72,309,233$ 73,544,247$ 78,070,086$ 88,964,143$ 82,945,198$ 93,722,957$ Only eight years have been presented because 2003 was the year GASB Statement No. 34 was implemented. (accrual basis of accounting) Last Ten Fiscal Years Changes in Net Assets CITY OF BANGOR, MAINE Continued from previous page III - 4 Table 2 (con't) Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 Net (expense)/revenue Governmental activities (42,261,859)$ (46,792,432)$ (45,381,779)$ (48,814,934)$ (47,547,762)$ (44,845,469)$ (66,879,356)$ (56,906,124)$ Business-type activities 5,754,488 (1,283,061) 1,628,729 (3,106,316) (1,756,584) (2,701,326) (2,003,100) 1,702,293 Total primary government expense (36,507,371) (48,075,493) (43,753,050) (51,921,250) (49,304,346) (47,546,795) (68,882,456) (55,203,831) General revenues and other changes in net assets Governmental activities: Property taxes 37,624,392 39,936,976 40,302,810 40,666,758 41,702,775 43,775,938 46,977,792 48,182,455 Payment in lieu of taxes 113,575 135,000 186,500 160,457 145,000 122,510 141,595 117,770 Excise taxes 4,091,505 4,306,055 4,358,409 4,752,852 4,668,614 4,641,320 4,752,005 4,694,936 Franchise taxes 233,874 225,224 265,598 274,986 296,566 300,768 322,526 348,163 Unrestricted grants and contributions 4,059,770 4,512,720 4,487,931 4,773,082 4,968,217 5,520,774 5,260,439 4,999,567 Unrestricted investment earnings 377,113 296,857 519,225 699,417 1,183,796 1,274,939 874,824 673,295 Indirect cost charges 557,165 483,439 472,056 - - - - - Miscellaneous 598,515 131,733 8,353 32,550 260,733 161,439 93,967 135,849 Transfers (798,618) (948,416) (837,806) (861,290) (871,864) (539,088) (739,179) 761,103 Total governmental activities 46,857,291 49,079,588 49,763,076 50,498,812 52,353,837 55,258,600 57,683,969 59,913,138 Business-type activities: Unrestricted investment earnings 1,097,155 206,665 895,064 635,454 1,346,799 1,326,787 1,025,098 1,035,753 Transfers 798,618 948,416 837,806 861,290 539,088 539,088 739,179 (761,103) Total business-type activities 1,895,773 1,155,081 1,732,870 1,496,744 1,885,887 1,865,875 1,764,277 274,650 Total primary government 48,753,064 50,234,669 51,495,946 51,995,556 54,239,724 57,124,475 59,448,246 60,187,788 Change in net assets Governmental activities 4,595,432 2,287,156 4,381,297 1,683,878 4,806,075 10,413,131 (9,195,387) 3,007,014 Business-type activities 7,650,261 (127,980) 3,361,599 (1,609,572) 129,303 (835,451) (238,823) 1,976,943 Total primary government 12,245,693$ 2,159,176$ 7,742,896$ 74,306$ 4,935,378$ 9,577,680$ (9,434,210)$ 4,983,957$ Only eight years have been presented because 2003 was the year GASB Statement No. 34 was implemented. Changes in Net Assets CITY OF BANGOR, MAINE (accrual basis of accounting) Last Ten Fiscal Years III - 5 Table 3 Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 Tax Revenues Property taxes 37,624,392$ 39,936,976$ 40,302,810$ 40,666,758$ 41,702,775$ 43,775,938$ 46,977,792$ 48,182,455$ Excise taxes 4,091,505 4,306,055 4,358,409 4,752,852 4,668,614 4,641,320 4,752,005 4,694,936 Franchise taxes 233,874 225,224 265,598 274,986 296,566 300,768 322,526 348,163 Total tax revenues 41,949,771$ 44,468,255$ 44,926,817$ 45,694,596$ 46,667,955$ 48,718,026$ 52,052,323$ 53,225,554$ Only eight years have been presented because 2003 was the year GASB Statement No. 34 was implemented. CITY OF BANGOR, MAINE Governmental Activities Tax Revenues By Source Last Ten Fiscal Years (accrual basis of accounting) III - 6Table 42001 2002 2003 2004 2005 2006 2007 2008 2009 2010General Fund:Reserved 2,314,524$ 2,204,855$ 2,692,524$ 2,571,692$ 2,427,099$ 2,188,819$ 2,366,032$ 2,637,120$ 2,537,173$ 2,702,131$Unreserved 13,022,113 15,412,411 14,575,433 11,184,543 10,676,570 10,828,439 11,438,114 11,602,190 12,922,086 13,220,140Total general fund 15,336,637$ 17,617,266$ 17,267,957$ 13,756,235$ 13,103,669$ 13,017,258$ 13,804,146$ 14,239,310$ 15,459,259$ 15,922,271$All other governmental funds:Reserved 1,143,738$ 1,836,653$ 5,229,243$ 2,599,271$ 2,358,441$ 3,832,469$ 2,015,620$ 8,081,884$ 7,062,990$ 3,226,854$Unreserved, reported in Special revenue funds (346,598) 1,029,775 2,080,184 1,997,434 1,810,747 2,215,929 2,663,736 5,005,121 6,981,927 9,552,567 Capital projects funds 538,858 4,622,212 (488,844) 4,211,800 3,658,954 925,634 1,735,231 469,554 1,528,537 (1,421,127) Permanent funds 812,694 539,666 500,558 424,802 370,308 350,222 361,879 399,223440,634 459,872Total all other governmental funds 2,148,692$ 8,028,306$ 7,321,141$ 9,233,307$ 8,198,450$ 7,324,254$ 6,776,466$ 13,955,782$ 16,014,088$ 11,818,166$(modified accrual basis of accounting)Last Ten Fiscal YearsFund Balances of Governmental FundsCITY OF BANGOR, MAINE III - 7 Table 5 Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 Revenues: Taxes: Property taxes 39,261,141$ 39,774,952$ 40,586,129$ 41,101,785$ 42,145,912$ 43,767,914$ 47,113,576$ 48,284,733$ Excise taxes 4,091,505 4,306,055 4,358,409 4,752,852 4,668,614 4,641,320 4,752,005 4,694,936 Total tax revenues 43,352,646 44,081,007 44,944,538 45,854,637 46,814,526 48,409,234 51,865,581 52,979,669 Intergovernmental 30,627,927 31,617,135 34,484,238 37,714,682 37,774,922 41,345,956 41,123,520 46,211,718 Licenses and permits 409,842 374,499 655,745 538,534 982,879 956,965 644,621 633,339 Charges for services 10,151,637 11,035,587 12,160,573 12,927,989 12,598,776 13,283,275 13,449,587 13,655,764 Program income 583,569 463,066 409,153 663,269 657,987 296,325 288,677 329,800 Revenue from money and property 1,420,582 1,162,796 1,255,959 2,349,812 3,621,988 3,812,356 3,836,654 3,864,984 Other 1,612,518 142,311 168,452 526,360 279,261 7,691,463 428,220 1,108,213 Total revenues 88,158,721 88,876,401 94,078,658 100,575,283 102,730,339 115,795,574 111,636,860 118,783,487 Expenditures: General government 4,223,670 4,619,401 4,732,331 4,642,935 4,736,885 5,122,152 5,103,378 5,422,805 Public safety 11,018,419 12,001,813 12,352,418 12,852,119 13,476,656 14,162,638 14,400,420 15,287,575 Health, community services and recreation 3,230,938 3,480,885 3,865,578 4,084,948 4,086,513 4,305,709 4,414,673 4,720,477 Public buildings and services 7,876,895 8,180,067 8,301,848 8,991,673 9,363,365 9,906,759 10,048,539 10,055,161 Other agencies 3,157,861 3,273,003 3,514,658 3,610,935 3,783,720 4,227,552 4,294,283 4,291,329 Education 39,428,576 40,341,426 42,228,691 44,817,879 45,224,974 48,293,846 50,380,309 51,590,324 Tax increment financing - - - - - - 215,483 432,033 Unclassified 327,812 389,598 65,639 263,702 597,262 166,994 63,115 54,451 Restricted grants 6,510,909 6,822,298 7,282,380 8,248,872 7,787,297 9,098,706 8,360,660 8,479,740 Capital outlay* 8,794,651 10,675,201 8,681,772 11,762,832 9,100,357 8,038,242 16,118,777 20,818,168 Debt service Principal 5,730,088 2,232,944 4,110,250 2,748,866 4,237,096 2,044,428 2,136,415 12,423,331 Interest 3,299,332 3,080,468 3,120,028 3,098,248 3,095,434 2,436,120 2,373,922 2,472,643 Other charges 10,028 5,570 37,467 5,070 4,850 299 6,000 61,952 Total expenditures 93,609,179 95,102,674 98,293,060 105,128,079 105,494,409 107,803,445 117,915,974 136,109,989 Deficiency of revenues under expenditures (5,450,458) (6,226,273) (4,214,402) (4,552,796) (2,764,070) 7,992,129 (6,279,114) (17,326,502) Other financing sources/(uses) General obligation debt 4,397,511 5,443,400 2,650,000 4,333,000 3,555,000 - 3,100,000 3,100,000 Financing proceeds - - - - - - 7,091,928 9,596,640 Sale of assets 232,259 131,773 106,895 120,479 320,034 161,439 104,620 135,849 Transfers to other funds (3,663,860) (5,369,448) (3,131,050) (3,099,137) (3,300,247) (2,690,305) (2,865,418) (1,789,024) Transfers from other funds 2,865,242 4,421,032 2,293,244 2,237,847 2,428,383 2,151,217 2,126,239 2,550,127 Total other financing sources 3,831,152 4,626,757 1,919,089 3,592,189 3,003,170 (377,649) 9,557,369 13,593,592 Net change in fund balances (1,619,306)$ (1,599,516)$ (2,295,313)$ (960,607)$ 239,100$ 7,614,480$ 3,278,255$ (3,732,910)$ Debt service as a percentage of noncapital expenditures 11.17% 6.30% 8.27% 6.08% 7.74% 4.45% 4.09% 12.53% Only eight years have been presented because 2003 was the year GASB Statement No. 34 was implemented. * Capital outlays under the modified accrual basis differ from capital outlays on the statement of activities due to capitalization thresholds and budgetary 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 Property¹ Value Tax Rate 2001 815,027,500 499,936,900 222,823,400 1,537,787,800 22.54 2002 841,857,900 504,871,000 241,682,200 1,588,411,100 22.78 2003 896,351,100 516,447,000 278,430,400 1,691,228,500 22.52 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 * 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 2001 9.64 1.01 11.89 22.54 0.91 23.45 2002 9.81 0.73 12.24 22.78 0.97 23.75 2003 9.51 0.74 12.27 22.52 1.08 23.60 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 III - 10 Table 8 CITY OF BANGOR, MAINE Principal Property Taxpayers * June 30, 2010 2010 2001 Assessed % of Total Assessed % of Total Taxpayer Business Value Rank Tax Base Value Rank Tax Base Bangor Historic Track Racino 110,462,700$ 1 4.21% - - General Electric Manufacturer 67,671,400 2 2.58% 32,364,450$ 2 2.10% Bangor Mall LLC Shopping mall 56,553,100 3 2.15% - - Bangor Hydro Electric Utility 38,406,800 4 1.46% 26,765,600 3 1.74% Wal Mart Stores Retailer 21,976,100 5 0.84% 9,451,200 9 0.61% QV Realty Trust Real estate interests 15,554,300 6 0.59% 10,222,700 6 0.66% Home Depot U.S.A. Inc Retailer 15,317,800 7 0.58% - - Inland Western Parkade Shopping mall 14,912,200 8 0.57% - - Harvest Sunbury Village Retirement Living 14,491,800 9 0.55% - - Grant Trailer Sales Inc Real estate interests 13,816,900 10 0.53% - - BANMAK Associates Shopping mall - - 58,259,900 1 3.79% Bangor Savings Bank Commercial bank - - 23,793,300 4 1.55% Webber Oil Company Fuel distributor - - 10,461,600 5 0.68% Airport Mall Associates Shopping mall --10,120,900 7 0.66% Cabrel Company Real estate interests - - 9,697,300 8 0.63% Sams Real Estate Trust Retailer - - 8,636,400 10 0.56% Totals 369,163,100$ 14.05% 199,773,350$ 12.99% *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 2001 35,283,733 258,412 35,025,321 33,930,930 96.88% 1,046,414 34,977,344 99.86% 2002 36,893,245 208,211 36,685,034 35,633,029 97.13% 947,788 36,580,817 99.72% 2003 39,081,183 311,677 38,769,506 37,785,056 97.46% 882,452 38,667,508 99.74% 2004 39,866,850 172,868 39,693,982 38,589,047 97.22% 1,008,780 39,597,827 99.76% 2005 40,474,184 160,117 40,314,067 39,206,172 97.25% 1,016,883 40,223,055 99.77% 2006 41,099,990 632,397 40,467,593 39,716,755 98.14% 631,052 40,347,807 99.70% 2007 41,990,985 269,636 41,721,349 40,819,923 97.84% 775,759 41,595,682 99.70% 2008 44,082,476 341,521 43,740,955 42,847,656 97.96% 721,678 43,569,334 99.61% 2009 47,235,370 275,489 46,959,881 45,688,356 97.29%868,850 46,557,206 99.14% 2010 48,719,847 588,817 48,131,030 46,205,428 96.00% - 46,205,428 96.00% 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 General General Total Fiscal Obligation Capital Obligation Revenue Primary Per Per Personal Year Bonds Leases Bonds Bonds Government Capita* Income* 2001 $ 22,806,350 223,910 37,931,078 4,465,000 65,426,338 2,078.68 Data not available 2002 $ 59,135,992 150,353 42,386,491 4,205,000 105,877,836 3,345.80 11.25% 2003 $ 57,669,023 326,159 47,854,061 - 105,849,243 3,345.32 11.25% 2004 $ 60,879,479 3,491 47,994,390 - 108,877,360 3,430.18 11.53% 2005 $ 59,419,229 - 46,774,080 - 106,193,309 3,412.49 11.47% 2006 $ 61,003,363 - 45,781,229 - 106,784,592 3,438.67 11.56% 2007 $ 60,321,264 - 43,809,953 - 104,131,217 3,279.83 11.03% 2008 $ 56,998,022 - 41,722,545 - 98,720,567 3,157.85 10.62% 2009 $ 56,687,684 7,091,928 37,623,522 - 101,403,134 3,236.72 10.88% 2010 $ 61,689,447 - 34,956,548 - 96,645,995 3,073.00 10.33% * Source: U.S. Census Bureau. Governmental Activities Business-type 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 2001 31,475 1,537,787,800 30,434,229 1.98% 966.93 2002 31,645 1,588,411,100 66,818,681 4.21% 2,111.51 2003 31,641 1,691,228,500 65,323,120 3.86% 2,064.51 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 * Source: U.S. Census Bureau. **Net Bonded General Obligation Debt Consists of all non-self supporting general obligation debt, and excludes all Sewer Utility debt of $18,994,645, Airport debt of $7,878,269, Golf Course debt of $565,461 and Economic Development debt of $3,838,283. Ratio of Net Bonded Debt III - 14 Table 12 CITY OF BANGOR, MAINE Computation of Direct and Overlapping Debt June 30, 2010 Percentage Amount Total Debt Applicable Applicable Outstanding to Bangor to Bangor Direct Debt City of Bangor General Obligation Bonds 96,645,995$ 100.00% 96,645,995$ Overlapping Debt -$ -$ Total Debt 96,645,995$ 96,645,995$ III - 15 Table 13 Total Net Debt Legal Percentage of Fiscal Debt Applicable to Debt Net Debt to Year Limit Limit Margin Debt Limit 2001 $ 225,630,000 64,737,428 160,892,572 28.69% 2002 $ 240,937,500 101,522,483 139,415,017 42.14% 2003 $ 241,387,500 105,523,084 135,864,416 43.72% 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% Total State Valuation 2,436,000,000$ Debt Limitation: 15 % of State Valuation 365,400,000 Debt Applicable to Debt Limitation: General Obligation Bonds: Municipal 64,470,811 School 13,180,539 Sewer 18,994,645 Total debt applicable to limit 96,645,995 Legal Debt margin 268,754,005$ CITY OF BANGOR, MAINE Legal Debt Margin Information Last Ten Fiscal Years Legal Debt Margin Calculation for Fiscal Year 2010 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 *** 2001 31,475 Data not Data not Data not 4,316 3.01% available available available 2002 31,645 29,740 19,295 36.1 4,205 3.12% 2003 31,641 29,740 19,295 36.1 4,019 3.40% 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 7.60% * Source: U.S. Census. ** Source: Bangor School Department. *** Source: Bureau of Labor Statistics. III - 17Table 15CITY OF BANGOR, MAINEPrincipal Employers *Calendar YearEmployees Employer Location Employees Employer Location1000-2999 Eastern Maine Medical Center Bangor 1000-2999 Eastern Maine Medical Center BangorBangor Mall Bangor Bangor Mall BangorUniversity of Maine Orono University of Maine OronoCity of Bangor Bangor City of Bangor BangorHannaford Supermarkets Throughout 500-999 Community Health/Counseling BangorCianbro Corporation Throughout St. Joseph Hospital BangorWal-Mart Throughout Webber Energy Co Bangor500-999 Bangor Savings Bank Bangor Georgia Pacific Corp Old TownL.L. Bean Bangor General Electric Corp BangorMicrodyne Orono Shop & Save Supermarkets ThroughoutAcadia Hospital BangorVerso Corp Paper Mill BucksportSt. Joseph Hospital BangorCommunity Health & Counseling Bangor* Source - Bangor, Maine Community & Economic Profile Report.Published by City of Bangor Community and Economic Development Department.20092000 III - 18Table 162001 2002 2003 2004 2005 2006 2007 2008 2009 2010FunctionGeneral government 92 93 91 90 87 88 94 85 80 78Public safetyPolice 85868986878990879294Fire 97 95 95 97 96 97 94 97 94 93Health, community services and recreation 33 34 33 31 31 32 39 41 37 41Public building and services 63 66 68 67 64 68 71 67 69 68Education 583 574 574 561 571 573 562 618 618 621Sewer Utility 23 23 23 23 23 23 23 23 2323Airport 76827273757681878881Park Woods 3 3 33333332Parking 1222222222Bass Park 10998999788Municipal Golf Course 3333339333Economic Development 2 3 2 3 3 3 3 3 2 3Totals 1,071 1,073 1,064 1,047 1,054 1,066 1,080 1,123 1,119 1,117* Source - City of Bangor Human Resource Department.CITY OF BANGOR, MAINEFull-time Equivalent City Government Employees by Function*Last Ten Fiscal Years III - 19Table 17CITY OF BANGOR, MAINEOperating Indicators by Function*Last Ten Calendar Years2000 2001 2002 2003 2004 2005 2006 2007 2008 2009FunctionCode enforcementBuilding permits 494 471 474 522 514 537 550 485 501 427Certificates of occupancy 354 295 358 342 341 432 446 430 440 341Sign permits 129 85 96 98 107 115 116 118 103 90PoliceCalls for service Unavailable Unavailable 22,213 24,407 23,945 27,052 28,157 32,392 34,329 32,351FireCalls for service Unavailable Unavailable 7,528 7,470 7,805 7,492 7,992 7,477 7,990 7,357SewerTreated flow (billions of gallons) 3.04 2.63 3.14 3.42 2.75 4.23 3.62 3.21 3.89 3.55Biosolids (cubic yards) 8,272 8,683 8,308 9,379 9,280 9,348 9,775 10,043 10,56110,509* Source - City of Bangor Departmental records. III - 20 Table 18 2003 2004 2005 2006 2007 2008 2009 2010 Function Public safety Police: Stations 11111111 Vehicles 4256575152475054 Fire: Stations 33333333 Vehicles 2520202427283132 Public works Streets (miles)422 422 422 422 422 427 429 429 Sidewalks (miles) 99.6 99.6 99.6 99.6 99.6 99.6 99.6 99.6 Parks and recreation Parks 2929292929292929 Parks acreage 950 950 950 950 950 950 950 950 Public swimming pools 1 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 Indoor ice arena 1 1 1 1 1 1 1 1 Semi-pro baseball stadium 11111111 Sewer Treatment plants 11111111 Pump stations 55555555 Miles of sanitary sewers 103 103 103 103 103 103 103 103 Miles of combined sewers 44 44 44 44 44 44 44 44 Only eight years have been presented because 2003 was the year GASB Statement No. 34 was implemented. * Source - City of Bangor Departmental records. CITY OF BANGOR, MAINE Capital Asset Statistics by Function* Last Ten Fiscal Years Fiscal Year