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2009City ofBangor, MaineComprehensive AnnualFinancial ReportforFiscal YearJune 30,2009 CITY OF BANGOR, MAINE Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2009 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, 2009 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 - 2 Basic Financial Statements: Exhibit Government-wide Financial Statements: Statement of Net Assets 1 II - 16 Statement of Activities 2 II - 17 Fund Financial Statements: Balance Sheet - Governmental Funds 3 II - 18 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 4 II - 19 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 5 II - 20 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund 6 II - 21 Statement of Net Assets – Proprietary Funds 7 II - 22 Statement of Revenues, Expenses and Changes in Net Assets – Proprietary Funds 8 II - 24 Statement of Cash Flows – Proprietary Funds 9 II - 25 Statement of Fiduciary Net Assets – Fiduciary Funds 10 II - 27 Notes to the Financial Statements II - 28 Required Supplemental Information II - 54 CITY OF BANGOR, MAINE Table of Contents, Continued Schedule Page Combining and Individual Fund Statements and Schedules: Balance Sheet – General Fund A – 1 II - 55 Schedule of Revenues, Expenditures and Changes in Undesignated Fund Balance – Budget and Actual – Budgetary Basis – General Fund A – 2 II - 56 Combining Balance Sheet – Nonmajor Governmental Funds B – 1 II - 60 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Governmental Funds B – 2 II - 61 Combining Balance Sheet – Nonmajor Special Revenue Funds B – 3 II - 62 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Special Revenue Funds B – 4 II - 63 Combining Balance Sheet – Nonmajor Permanent Funds B – 5 II - 64 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Permanent Funds B – 6 II - 65 Combining Statement of Net Assets – Nonmajor Proprietary Funds C – 1 II – 66 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 - 69 Schedules of Revenues, Expenditures and Encumbrances – Budget and Actual Budgetary Basis: Sewer Utility Enterprise Fund C – 4 II - 71 Airport Enterprise Fund C – 5 II - 72 Park Woods Enterprise Fund C – 6 II - 73 Parking Enterprise Fund C – 7 II - 74 Bass Park Enterprise Fund C – 8 II - 75 Municipal Golf Course Enterprise Fund C – 9 II - 76 Economic Development Enterprise Fund C – 10 II - 77 Fiduciary Funds: Statement of Change in Assets and Liabilities – Agency Fund D – 1 II - 78 Capital Assets Used in the Operation of Governmental Funds: Schedule of Changes by Function and Activity E – 1 II - 79 Other Information: Assessed Valuation, Commitment and Collections F – 1 II - 80 Undesignated Fund Balance Sufficiency Calculation F – 2 II - 81 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 INDEX OF NOTES TO THE FINANCIAL STATEMENTS Summary of Significant Accounting Policies Note Page A Reporting Entity II – 28 B Government-wide and Fund Financial Statements II – 28 C Measurement Focus, Basis of Accounting and Basis of Presentation II – 29 D Assets, Liabilities and Equity II – 31 Stewardship, Compliance and Accountability A Budgetary Information II – 33 B Reconciliation of Budgetary Basis Statements II – 34 C Excess of Expenditures Over Appropriations II – 35 D Deficit Fund Equity II – 35 E Restricted Assets II – 35 Detailed Notes on All Funds A Deposits and Investments II – 36 B Property Tax II – 37 C Capital Assets II – 37 D Interfund Transactions II – 39 E Due From Other Governments II – 40 F Leases II – 40 G Other Assets II – 41 H Deferred/Unearned Revenue II – 41 I Long-Term Debt II – 41 J Fund Balances II – 45 K Net Assets II – 47 Other Information A Risk Management II – 47 B Tax Increment Financing Districts II – 48 C Contingent Liabilities II – 49 D Retirement II – 49 E Other Postemployment Benefits II – 51 F Landfill Closure and Postclosure Care Costs II – 53 G Subsequent Events II – 53 INTRODUCTORY SECTION 73 Harlow Street  Bangor, Maine 04401 207/992-4260 fax 207/945-4446 debbie.cyr@bangormaine.gov finance departMent deborah a. cyr, finance directorwww.bangormaine.gov 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. After twenty one years, the current City Manager will be leaving his position this month. The City Council has begun the process of actively recruiting a replacement and has made arrangements for an interim City Manager until such time as a replacement comes on board. 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 1-2 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 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 M~nager 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. 1-3 Factors Affecting Financial Condition Local economy. The City is the economic, educational, recreational, distribution, and health care center for the central, eastern, and northern Maine regions. Bangor also serves as northern New England's economic link to the Canadian Maritimes and Eastern Quebec. The City is a major center for the communications, banking, commercial, industrial, healthcare, and governmental sectors of the State. Bangor has a stable and varied economic base. Major employers include a diversified mix of health care, educational, professional, retail, manufacturing, and governmental entities. Bangor's 2008 unemployment rate of 5.2% continues to be on par with both country and state rates of 5.6%, 5.4%, 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 2008, Bangor's share of the State's retail sales was 70/0, and its share of County sales was 57%. 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 6.3%. Tax base growth, the City's focus on controlling budgetary growth, and ramped up state funding for education resulted in a 20% reduction in the City's tax rate from 2000 to 2009. 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. 1-4 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 is nearing completion of the remediation of a coal tar deposit within the river as well. 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. In the coming year, the City Council will be reviewing a recently completed Market Sizing and Feasibility Study related to the construction of a new arena and meeting space. 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 has implemented a number of projects as a result of an energy audit of all its facilities. The majority of projects undertaken are guaranteed by our energy services contractor to generate adequate annual savings to fund the annual payments required to finance these improvements. Results of the first year's energy audit should be available in January 2010. In addition to improving its current facilities, the City has adopted a policy that will require all new construction and major renovations to City owned or funded buildings to meet Leadership in Energy and Environmental Design (LEED) certification. The cover page depicts the newly constructed Fire Station 6, which achieved a gold certification and represents the City's first LEED certified project. 1-5 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 expen-ditures 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, $200,000 was appropriated to fund further environmental assessments of the Penobscot River as well as associated legal costs, 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, 2009 was 10.36% 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, 2008 for the thirteenth consecutive year. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to, meet the Certificate of Achievement Program's requirements, and we are submitting it to the GFOA for consideration for another certificate. The preparation of this document would not have been possible without the hard work of all of the City's employees. Each one contributes on a daily basis, simply by carrying out the responsibilities of their positions. Our sincerest thanks are once again extended to our Citizens and the Bangor City Council for their continued support for our efforts to further develop the City's financial management and reporting capabilities. We are confident that we have once again met their expectations. Respectfully submitted, Debbie Cyr Finance Director 1-6 FINANCIAL SECTION II-1 Certified Public Accountants and Business Consultants Independent Auditor's Report 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 30,2009,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 the 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 businesstype activities,each major fund,and the aggregate remaining fund information of the City of Bangor,Maine,as of June 30,2009, and the respective changes in financial position,and cash flows,where applicable,thereof and the 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 our report dated December 18, 2009,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 the 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 important for assessing the results of our audit. The Management’s Discussion and Analysis and the schedule of funding progress for Other Postemployment Benefits,as listed in the table of contents,are not required parts of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America.We have applied certain limited procedures,which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information.However,we did not audit the information and express no opinion on it. City Council Page 2 Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Bangor,Maine’s basic financial statements.The introductory section, combining and individual nonmajor fund financial statements and 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 have been subjected to the auditing procedures applied in the audit of the basic financial statements and,in our opinion,are fairly stated in all material respects in relation to the basic financial statements taken 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 express no opinion on them. December 18,2009 South Portland,Maine MANAGEMENT'S DISCUSSION AND ANALYSIS Management of the City of Bangor offers this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2009. 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 1-1 to 1-6 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 $203.7 million (net assets). • As of the close of the current fiscal year, the City of Bangor's governmental funds reported combined ending fund balances that increased $3.3 million from the prior year to $31.5 million. Approximately 69% of the total amount, or $21.9 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 $8.7 million, or 10.36% 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 and enterprise funds decreased by $300 thousand (1.8%) and $4.5 million (9.2%), respectively. The governmental fund liabilities are virtually unchanged, and the decrease in enterprise fund liabilities is primarily due to principal payments of $ 4.1 million and a decrease of $280 thousand in accounts payable. 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. 11-2 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 will only 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 11-16 to 11-17 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 essentially 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 11-3 By far the largest portion of the City's net assets (in excess of 100% or $209.5 million) 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. While the remaining balance of unrestricted net assets has a total deficit of approximately $12 million, the governmental activity portion is significantly higher with a deficit of $26.9 million. This is primarily due to $26.4 million in outstanding pension obligation bonds as well as the implementation of new Governmental Accounting Standards Board (GASB) pronouncements. This year, the City implemented GASB 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions (OPEB) and GASB 49, Accounting and Finance Reporting for Pollution Remediation Obligations. Both GASB statements 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, while bUSiness-type activities net assets continue to remain positive in all categories. Governmental-type net assets decreased by $9.2 million. Within the governmental-type funds and as required by GASB 49, the accrual of $7.6 million reflects the estimated remediation cost to remove a significant coal tar deposit from the Penobscot River, $800 thousand is related to the City's OPEB liability recorded in accordance with GASB 45, and $6.3 million is related to the lease/purchase financing of School department energy conservation measures. These reductions are partially offset by the increase in investment of capital assets in the amount of $4.0 million. The remaining increase is related to actual revenues outpacing estimates, specifically in the areas of, emergency medical services and arena fund revenues. BUSiness-type net assets decreased by $200 thousand during the year. BUSiness-type operational results remained relatively unchanged from the prior year. The primary change in net assets is related to a reduction in capital grants and contributions from Airport operations. 11-5 Changes in Net Assets The following is a condensed version of the Statement of Activities. Governmental Business-type Activities Activities Total ...1Jm 2008 2009 ~ ~ 1IlH Revenues Program Revenues Charges for services 17,318,044 16,979,412 25,289,470 25,068,331 42,607,514 42,047,743 Operating grants & contributions 34,155,649 41,370,518 34,155,649 41,370,518 capital grants & contributions 2,068,478 2,119,150 4,113,557 3,426,732 6,182,035 5,545,882 General Revenues Property and other taxes 52,193,918 48,840,536 52,193,918 48,840,536 Grants and contributions not Restricted to specific programs 5,260,439 5,520,774 5,260,439 5,520,774 Other 968(791 1(436(378 1(025(098 1(326(787 968(791 2(763(165 Total Revenues 111,965,319 116,266,768 30,428,125 29,821,850 142,393,444 146,088,618 Expenses General government 7,868,247 8,744,549 7,868,247 8,744,549 Public safety 15,671,645 14,945,855 15,671,645 14,945,855 Health, community and recreation 9,168,870 8,413,205 9,168,870 8,413,205 Public buildings and services 9,671,469 9,142,251 9,671,469 9,142,251 Other agencies 4,580,661 4,829,547 4,580,661 4,829,547 Education 54,294,824 47,537,197 54,294,824 47,537,197 Arena Development 51,332 41,091 51,332 41,091 Community development 912,992 2,156,241 912,992 2,156,241 Streets/sidewalks 2,141,079 1,359,002 2,141,079 1,359,002 Waterfront 9,252,263 1,754,281 9,252,263 1,754,281 Public transportation 3,042,434 2,118,374 3,042,434 2,118,374 Interest on debt 2,651,599 3,206,764 2,651,599 3,206,764 Tax increment financing 1,114,112 1,066,192 1,114,112 1,066,192 Sewer Utility 6,197,277 6,052,419 6,197,277 6,052,419 Airport 19,934,243 19,641,953 19,934,243 19,641,953 Park Woods 590,250 678,867 590,250 678,867 Parking 1,374,909 1,438,125 1,374,909 1,438,125 Bass Park 1,851,914 1,993,205 1,851,914 1,993,205 Municipal Golf Course 745,339 695,969 745,339 695,969 Economic Development 712(195 695(851 712(195 695(851 Total Expenses 120(421(527 105(314(549 31(406(127 31(196(389 151(827(654 136(510(938 Excess (deficiency) before transfers (8,456,208) 10,952,219 (978,002) (1,374,539) (9,434,210) 9,577,680 Transfers (739(179) (539(088) 739(179 539(088 Change in net assets (9(195(387) 10(413(164 (238(823) (835A51) (9A34(210) 9(577(680 11-6 II - 7 Governmental Activities The cost of all governmental activities was $120.4 million. As shown on the Statement of Activities, the total amount financed by the City’s property taxpayers was $47.0 million, or 41.0%. Those who directly benefit from an activity provided $17.3 million in payments. Other governments and organizations subsidized certain activities with operating grants and contributions in the amount of $34.2 million. Capital grants and contributions accounted for $2.1 million. The City also received $11.4 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 increased $15.1 million over the prior year. No additional programs were sponsored by the City in the current year, nor were any eliminated. The majority of increased costs are related to school department energy conversation measures ($7.1 million), the recognition of a pollution remediation obligation liability ($7.6 million) related to a coal tar deposit in the Penobscot River, and increased street and sidewalk construction ($782 thousand). It should be noted that the increase in Public Transportation is related to a change in how vehicle operation and maintenance costs are reported. In addition to the increases noted above, the City realized reduction of expenses in certain areas. During FY 2008, fuel costs escalated dramatically and unpredictably; in FY2009, costs returned to a more measured and stable level resulting in a 24% ($292 thousand) reduction in cost. Also, the change in the City’s contribution rate for employee health insurance has resulted in an overall reduction in health insurance costs during the year of 4.2% ($117 thousand). It appears that employees are either changing to a lower cost plan or obtaining coverage through a spouse. Lastly, the reduction in Community development expenditures was driven by the credit environment. Community development has a portfolio of mortgage loans for low to moderate income households. During 2008 and as homeowners took advantage of historically low 0 10 20 30 40 50 60 (in millions)General GovernmentPublic SafetyPublic Buildings & ServicesHealth, Community & RecreationOther AgenciesEducationArena DevComm DevelopStreetsWaterfrontPublic TransportationTIFInterest on DebtExpenses and Program Revenues - Governmental Activities Expenses Revenues II - 8 interest rates, loans were repaid creating a significant increase in program income. Repayments must be reprogrammed to fund other community development functions. The majority of refinancing took place prior to the current year, so expenses will decline as program income does. While total governmental activities revenues decreased $4.3 million, or 3.7%, if the effects of the $7.6 million one-time settlement related to coal tar remediation in the Penobscot River is removed from the prior year, recurring revenues actually increased by $3.3 million. The largest single source of revenue continues to be the property tax, which increased slightly to 41% of total revenues for 2009 compared to 37% for 2008. The City continues to benefit from the State’s Essential Services and Programs funding model for education, realizing a $900 thousand increase in State Aid to Education. The City experienced a $400 thousand increase in emergency medical services revenue, while revenue from other provided services remained stable. Earnings on investments declined by $400 thousand due to the abnormally low yields in the financial markets; revenue sharing decreased by $400 thousand as a result of lower State sales and income tax collections; and property tax revenue increased $3.2 million. Of the 2009 increase in tax revenues, nearly $2.5 million is attributable to new value as defined by LD 1, which translates into $131 million of new development/improvements within the City during the prior fiscal year. Business-type Activities Total business-type activities expenses were relatively unchanged compared to prior year levels, with an increase .7%, or $200 thousand. The Airport continues to see increased numbers of international flights requiring services. Most of these flights are directly related to military troop movements. The additional costs associated with servicing this market are recovered through additional revenue from charges for services. Business-type activities experienced the same decreases as noted above in the governmental activities such as: reduced costs associated with health insurance and fuel costs. Revenues by Source - Governmental Activities 15% 31% 2% 41% 5%5%1%Charges for Services Operating Grants &Contributions Capital Grants & Contributions Property Taxes Other General Unrestricted Grants &ContributionsOther Unrestricted II - 9 In total, business-type activities revenue increased slightly, or 2% ($600 thousand), which is wholly attributable to an increase in capital grants and contributions. The increase in capital grants and contributions is tied to the Airport operations and is indicative of the cyclical nature of Airport Improvement Plan grant funding. Revenues by Source - Business-type Activities Transfers 2%Capital Grants and Contributions 13% Unrestricted Investment Earnings 3% Charges for Services 82% Charges for Services Capital Grants and Contributions Transfers Unrestricted InvestmentEarnings 0 2 4 6 8 10 12 14 16 18 20 (in millions)Sewer UtilityAirportPark WoodsParkingBass ParkGolf CourseEcon DevelopExpenses and Program Revenues - Business-type Activities Expenses Revenues 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 $31.5 million, an increase of $3.3 million from the prior year balance of $28.2 million, the majority of which, or $2.0 million, is an increase in reserved fund balances related to gaming revenues receipted into the Arena Fund. Approximately 70% of this total ($21.9 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 ($2.2 million), reserving for potential non-repayment of interfund balances ($1.7 million), restricted unexpended escrow funds received to fund coal tar remediation in the Penobscot River ($5.1 million), or set aside for a variety of other restricted purposes ($680 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 $12.9 million ($4.2 million of which has been designated by management for subsequent years' expenditures). The general fund's total fund balance was $15.5 million, an increase from the prior year's balance of $14.2 million. Designated fund balances increased $600 thousand, the majority of which is due to an increase in School Department balances carried. The City's undesignated fund balance increased $700 thousand due to increased revenue collections in the areas of State Revenue sharing and excise tax. In addition, actual fuel costs were significantly lower than anticipated. 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 will be reviewing the recently completed Market Feasibility and Facility Sizing report to consider at what point the City will be in the position to move forward with the replacement. The Capital projects fund varies significantly from year to year depending upon City Council priorities and available funding opportunities. Total expenditures increased $8.5 million over the prior year. Of that increase, $6.0 million is related to one-time expenditures for energy conservations measures undertaken within the school and municipal buildings. In addition, as the per ton cost of asphalt subsided later in the year, the City moved forward with a number of street and sidewalk projects it had placed on hold. The cost of asphalt is directly impacted by crude oil prices. As oil prices escalated to never before seen heights, the City deferred certain street and sidewalks projects until spring 2009 when prices subsided. II -10 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 decreased $200 thousand to a total of $171.3 million, including net asset deficits of $1.7 million in the Bass Park Fund and $400 thousand in the Parking Fund. Without exception, the net assets of all other enterprise funds were relatively stable. 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 $2.8 million. There were minimal additional amendments to the originally adopted budget. The City's commitment to budgetary integrity continues, with actual revenues exceeding budgeted amounts by 1.5%, or $1.3 million, while municipal expenditures were under budget by 4.4%, or $4.1 million. The majority of under expenditure is related to education, and, 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, 2009, the City of Bangor's investment in capital assets for its governmental and business-type activities amounted to $262 million (net of accumulated depreciation), an increase of $600 thousand over the prior year. This investment includes land, buildings, machinery and equipment, roads, runways, and sewer lines. The total increase 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 $5.3 million, and business-type activities invested $8.6 million. Major capital asset events during the current fiscal year included the following; • The City replaced its outdated and ill equipped Fire Station #6 at a cost of $2.4 million. This project represents the City's first design/build project as well as the first project undertaken to comply with LEED requirements. In the end, this project attained a Gold level LEED certification. • Based on the availability of Federal, State, and local funding (provided via the Downtown Development District TIF), 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. • Grant opportunities allowed the City to upgrade its Fire suppression vehicle inventory in the amount of $800 thousand. • The Airport Fund invested $8.6 million in operational assets at Bangor International Airport including terminal renovations, building improvements, on-site parking facilities, and upgrading and improving runways and aprons. II -11 II - 12 Capital Assets (net of depreciation) Governmental Business-type Activities Activities Land and improvements 9,562,297 4,522,090 Buildings and improvements 42,594,097 15,144,525 Machinery and equipment 3,696,595 1,728,287 Vehicles 6,392,913 - Infrastructure 11,065,539 47,720,844 Parking structures - 2,436,798 Aircraft operational assets - 107,060,101 Construction in process 1,327,870 8,785,421 Total 74,639,311 187,398,066 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 $94.3 million, a decrease of $4.4 million during the year. The City’s general obligation debt maintained a “AA-” rating from Standard & Poor’s and a “Aa3” 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 $356.7 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-41 to II- 44 of this report. Bonded Debt Outstanding (in millions) $56.7 $37.6 Governmental Activities Business-type Activities 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 was successful in obtaining the maximum award of $3 million from the Environmental Protection Agency Clean Water State Revolving Loan Fund. The funds will be used for a variety of non point source stormwater improvements on both publicly and privately owned property. The award is in the form of a 0% loan with 50.6% of the principal forgiven. • The School Department was awarded $3.6 million in support of five programmatic areas: stabilization funds ($1.4 million), Title I ($1.3 million), IDEA ($850 thousand), Title liD ($27 thousand), and Homeless ($13 thousand). Budget stabilization funding can be used for a wide variety of activities in support of education. To date, the funds have been used to increase the number of laptops in the classroom and for necessary capital improvements. Title I funds are available for use in schools determined to be "free and reduced" to enhance student knowledge in math and reading. IDEA funds are in support of special education students, and funds have been used to fund laptops and accessibility improvements. • The City was awarded $900 thousand in Department of Justice funding, the largest portion ($700 thousand) of which is to fund 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. Due to the timing and term of the awards, the majority of the ARRA funding will be expended in future fiscal years. Economic Factors and Next Year's Budget and Rates • The unemployment rate for the City of Bangor for calendar year 2008 was 5.2%, which is on par with the State's rate of 5.4%. • While Bangor represents less than 3% of the state's population, the City's share of retail sales remains in excess of 7% of total statewide sales and 57% 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 flatten out in the coming year compared to the 5% to 7% range experienced in recent years. Bangor remains the only municipality in Maine that has met the requirements of state law that allow for the operation of slot machines at commercial harness racing tracks. In November 2005, Penn National Gaming opened a "racino" at an interim location in the City. Construction of the permanent gaming facility was completed in the summer of 2008. This facility includes a II -13 1,500 car parking garage, a 152 room seven story hotel, and approximately 110,000 square feet for gaming. The project cost approximately $131 million. 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. The City is subject to a state statutory system (known as LD 1) that is designed to limit the increase in that portion of the tax levy that supports municipal functions. 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. In addition, any "net new state funding" must be deducted from the allowable tax levy increase. For Fiscal Year 2009, the City's LD 1 tax levy limit was as follows: Prior Year Based Municipal Commitment Growth Factor: Average Real Personal Income Property Growth Factor Net New State Funds Increase in Levy Limit Municipal Commitment Limit $ 19,427,427 6.29% 2.24% 4.05% 484,791 $ 21,133,690 For Fiscal Year 2009, the City Council voted to increase the City's property tax levy limit by $484,791 in recognition of the unprecedented (80%) increase in fuel prices which occurred just prior to adopting the budget in June 2008. The Fiscal Year 2010 budget was within the statutory tax levy limit. LD 1 increased the State's share of local education costs through the "Essential Programs and Services" model, a mechanism designed to allocate state funding to local school units and to control local school expenditures. This model sets forth a comprehensive methodology for computing the cost of providing essential educational programs to Maine's children. It also 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 imposed by LD 1 for both Fiscal Year 2009 and 2010 in order to appropriately fund such services and programs. 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 II -14 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. At this time, we estimate new additions to the City's tax base for fiscal year 2011 will be sufficient to offset any value reductions in our commercial tax base related to vacancies and depreciation. The State of Maine's most recent estimated budgetary shortfall for its two-year budget is $400 million. The projected State response to this shortfall is estimated to primarily impact the City through a reduction in State Aid to Education of $1.0 million in both Fiscal Year 2010 and 2011, additional reductions to the Revenue Sharing pool for both Fiscal Year 2010 and 2011, and a reduction in the General Assistance reimbursement formula in 2011. These items reflect the Governor's proposal. Management will closely observe the activities of the Maine State Legislature's session beginning in January 2010 to identify and monitor proposed actions that may have financial and operational impacts on the City. The initially identified reduction in State Aid to Education can be absorbed through the use of school reserves, deferring minor capital improvements, and ARRA funds; however, the proposals for future fiscal years will represent a challenge to both the School Committee and the City Council. We continue to monitor additional revenue areas such as: flat investment yield curves, declining automobile excise taxes, and lagging State sales and income tax collections that impact the City's share of State Revenue Sharing. The fiscal year 2010 budget reflects the City's historical results for these revenue sources, and it appears they will fall short of actual results. The City has identified expenditures that can be reduced to minimize the overall impact of these potential revenues shortfalls. As for expenditures, we have not experienced the unprecedented benefit utilization or rate increases seen last year in our health insurance costs, resulting in a return to our historical average annual cost increases of 10%. The recently completed energy conservations projects, coupled with the retreat in unprecedented fuel prices, will enable the City to be well positioned to minimize its fleet and building operating costs. For the Fiscal Year 2010 budget, the City Council's goal was to achieve a zero tax increase for our taxpayers. This goal was accomplished through the elimination of two vacant positions and further refinement of revenues. Year to date expenditures continue to lag behind antiCipated costs. While this will provide some degree of financial flexibility to offset revenue shortfalls, additional programmatic reductions maybe necessary depending on the final actions of the State Legislature. 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. A 5% increase in sewer fees was implemented effective January 1, 2009, only the third sewer fee increase since March 1996. 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. 11-15 BASIC FINANCIAL STATEMENTS CITY OF BANGOR, MAINE Statement of Net Assets June 30, 2009 Governmental Activities ASSETS Cash and cash equivalents $ 734,944 Investments 21,981,279 Receivables: Accounts (net of allowance of $258,981 and $286,849, respectively) 1,104,931 Intergovernmental 3,657,136 Taxes and liens receivable -prior years 1,333,895 Taxes receivable -current year 893,299 Deferred special assessments 30,130 Due from water district Loans 7,895,729 Internal balances 2,985,655 Inventories 806,288 Prepaid items 27,717 Other assets 3,128,760 Non-depreciable capital assets 6,368,418 De~reciable caEital assets, net 68,270,893 Total assets 119,219,074 LIABILITIES Accounts payable and other current liabilities 3,031,848 Accrued wages and benefits payable 3,771,990 Unearned revenues 4,815,728 Noncurrent liabilities: Due within one year 13,518,336 Due in more than one ~ear 61,455,876 Total liabilities 86,593,778 NET ASSETS Invested in capital assets, net of related debt 53,356,885 Restricted for: Nonexpendable trust principal 648,692 Expendable income 440,634 Penobscot River 5,109,046 Unrestricted (26,929,961 ) Total net assets $ 32,625,296 Exhibit 1 Business-type Activities Total $ 472,049 $ 1,206,993 19,715,007 41,696,286 4,077,989 5,182,920 715,618 4,372,754 1,333,895 893,299 87,664 117,794 103,213 103,213 1,802,141 9,697,870 (2,985,655) 112,434 918,722 86,912 114,629 1,113,935 4,242,695 12,409,694 18,778,112 174,988,372 243,259,265 212,699,373 331,918,447 1,741,333 4,773,181 272,853 4,044,843 30,938 4,846,666 4,903,881 18,422,217 34,702,302 96,158,178 41,651,307 128,245,085 156,120,884 209,477,769 648,692 440,634 5,109,046 14,927,182 (12,002,779) $ 171,048,066 $ 203,673,362 See accompanying notes to financial statements. ll-16 CITY OF BANGOR, MAINE Statement of Acthities For tbe Fiscal Year Ended June 30, 2009 Functionslprograms Expenses Primary government Governmental activities: Charges for services Program Revenues Operating grants and contributions Capital grants and contributions Net (expense) revenue and changes in net assets Primary Government Governmental Business-type Exhibit 2 aetivities aetivities Total General government $ 7,868,247 $ 1,869,711 $ 4,007 $ $ (5,994,529) $ $ (5,994,529) Public safety 15,671,645 3,010,167 187,022 649,234 (11,825,222) (11,825,222) Health, community services and recreation 9,168,870 768,450 5,637,188 9,574 (2,753,658) (2,753,658) Public services 9,671,469 3,786,050 13,751 (5,871,668) (5,871,668) Other agencies 4,580,661 22,068 10,000 (4,548,593) (4,548,593) Education 54,294,824 4,386,457 26,405,573 (23,502,794) (23,502,794) Arena development 51,332 2,205,771 2,154,439 2,154,439 Community development 912,992 301,019 683,636 71,663 71,663 StreetslSidewalks 2,141,079 21,836 999,218 (1,120,025) (1,120,D25) Waterfront 9,252,263 248,290 (9,003,973) (9,003,973) Public transportation 3,042,434 944,804 1,228,223 148,411 (720,996) (720,996) Tax iucrementfmancing 1,114,112 1,711 (1,112,401) (1,112,401) Interest on debt 2,651,599 (2,651,599) (2,651,599) Total governmental activities 120,421,527 17,318,044 34,155,649 2,068,478 (66,879,356) (66,879,356) Business-type activities: Sewer Utility 6,197,277 7,537,879 1,340,602 1,340,602 Airport 19,934,243 13,953,287 3,974,078 (2,006,878) (2,006,878) Park Woods 590,250 369,478 (220,772) (220,772) Parkiug 1,374,909 997,111 (377,798) (377,798) Bass Park 1,851,914 1,253,236 (598,678) (598,678) Municipal Golf Course 745,339 608,930 (136,409) (136,409) Economic Development 712,195 569,549 139,479 (3,167) (3,167) Total business-type activities 31,406,127 25,289,470 4,113,557 (2,003,100) (2,003,100) Total primary government $ 151,827,654 $ 42,607,514 $ 34,155,649 $ General revenues: Property taxes, levied for general purposes Payment in lieu of taxes Excise taxes Franchise taxes Grants and contributions not restricted to specific programs: HomesteadlBETE exemption Other Stale aid Stale Revenue Sharing Unrestricted investment earnings Miscellaneous revenues Transfers Total general revenues and transfers Change in net assets Net assets, beginning of year Net assets, end of year II -17 6,182,035 $ (66,879,356) (2,003,100) (68,882,456) 46,977,792 46,977,792 141,595 141,595 4,752,005 4,752,005 322,526 322,526 825,559 825,559 23,603 23,603 4,411,277 4,411,277 874,824 1,025,098 1,899,922 93,967 93,967 (739,179) 739,179 57,683,969 1,764,277 59,448,246 (9,195,387) (238,823) (9,434,210) 41,820,683 171,286,889 213,107,572 32,625,296 $ 171,048,066 $ 203,673,362 See accompanying notes to financial statements. Exhibit 3 CITY OF BANGOR, MAINE Balance Sheet Governmental Funds June 30, 2009 Community Capital Other Total Development Arena Projects Governmental Governmental General Block Grant Fund Fund Funds Funds ASSETS Assets Cash and cash equivalents $ 433,563 $ 50 $ 4,514 $ 296,816 $ $ 734,944 Investments 12,203,155 4,349,109 5,109,046 319,969 21,981,279 Receivables: Taxes 2,227,194 2,227,194 Accounts (net of allowance of $264,892) 954,359 150,572 1,104,931 Interfund 3,055,385 1,085,695 138,898 4,279,978 Intergovernmental 1,792,720 1,081,122 10,997 539,503 232,794 3,657,136 Loans 1,045,178 4,220,364 2,630,187 7,895,729 Deferred special assessments 30,130 30,130 Inventory, at cost 806,288 806,288 Investment of unexpended bond proceeds 3,128,760 3,128,760 Pre(!aid items 27,717 27,717 Total assets $ 22,545,559 $ 5,301,536 $ 5,600,887 $ 9,104,255 $ 3,321,849 $ 45,874,086 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 1,235,546 $ 120,504 $ $ 926,013 $ 123,368 $ 2,405,431 Accrued wages and benefits payable 3,771,990 3,771,990 Interfund loans payable 863,058 431,265 1,294,323 Deferred revenues 2,078,764 4,220,364 235,407 267,452 6,801,987 Due to rehabilitation reci(!ients 127,008 127,008 Total liabilities 7,086,300 5,330,934 1,161,420 822,085 14,400,739 Fund balances Reserved for: Encumbrances 858,956 1,305,252 2,164,208 Prepaid items 27,717 27,717 Advances to other funds 1,650,500 1,650,500 Penobscot River 5,109,046 5,109,046 Nonexpendable trust principal 648,692 648,692 Unreserved: Designated (Note J) 4,178,698 4,178,698 Undesignated, reported in: General fund 8,743,388 8,743,388 Special revenue funds (29,398) 5,600,887 1,410,438 6,981,927 Capital projects funds 1,528,537 1,528,537 Permanent funds 440,634 440,634 . Total fund balances (deficits) 15,459,259 (29,398) 5,600,887 7,942,835 2,499,764 31,473,347 Total liabilities and Cund balances $ 22,545,559 $ 5,301,536 $ 5,600,887 $ 9,104,255 $ 3,321,849 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. 74,639,311 Deferred taxes are not available to pay for current-period expenditure and, therefore, are deferred in the funds. 1,986,259 Long-term liabilities, including bonds payable $56,687,684, lease purchase $6,286,188, accrued interest $499,409, compensated absences $2,257,256, self insurance liability $1,423,555, net OPEB obligation $759,529 and Penobscot River remediation $7,560,000 are not due and payable in the current period and, therefore, are not reported in the funds (75,473,621) Net assets of governmental funds $ 32,625,296 See accompanying notes to financial statements. 11-18 Exhibit 4 CITY OF BANGOR, MAINE Statement of Revenues, Expenditures and Cbanges in Fund Balances Governmental Funds For tbe Fiscal Year Ended June 30, 2009 Community Capital Otber Total Development Arena Projects Governmental Governmental General Block Grant Fund Fund Funds Funds Revenues Taxes $ 49,432,293 $ $ $ 1,553,472 $ 879,816 $ 51,865,581 Intergovernmental 33,257,147 683,636 1,707,432 5,475,305 41,123,520 licenses and permits 644,621 644,621 Charges for services 12,467,845 981,742 13,449,587 Program income 263,759 24,918 288,677 Revenue from use of money and property 1,269,847 2,880 2,309,757 116,866 137,304 3,836,654 Other 43,706 11,493 361,046 11,975 428,220 Total revenues 97,115,459 961,768 2,309,757 3,738,816 7,511,060 111,636,860 Expenditures Current: General government 5,103,378 5,103,378 Public safety 14,400,420 14,400,420 Health, community services and recreation 4,414,673 4,414,673 Public buildings and services 10,048,539 10,048,539 Other agencies 4,294,283 4,294,283 Education 50,380,309 50,380,309 Tax increment financing 215,483 215,483 Unclassified 47,989 15,126 63,115 Restricted grants 886,792 7,473,868 8,360,660 Capital outlay 371,509 15,747,268 16,118,777 Debt service 4,429,337 87,000 4,516,337 Total eXl!!:!!ditures 93,705,920 886,792 15,126 15,834,268 7,473,868 117,915,974 Excess (deficienc;!:) of revenues over (under) eXl2!:nditures 3,409,539 74,976 2,294,631 (12,095,452) 37,192 (6,279,114) Other financiog sources (uses) Fioanciog proceeds 10,191,928 10,191,928 Sale of assets 40,120 64,500 104,620 Transfers to other funds (2,289,105) (102,500) (19,176) (454,637) (2,865,418) Transfers from other funds 59,395 1,999 2,017,989 46,856 2,126,239 Total other financioS sources (uses) (2,189,590) (100,501) 12,255,241 (407,781) 9,557,369 Changes in fund balances 1,219,949 74,976 2,194,130 159,789 (370,589) 3,278,255 Fund balances (deficit), begionioll of ;!:ear 14,239,310 (104,374) 3,406,757 7,783,046 2,870,353 28,195,092 Fund balances (deficit), end of year $ 15,459,259 $ (29,398) $ 5,600,887 $ 7,942,835 $ 2,499,764 $ 31,473,347 See accompanying notes to financial statements. II -19 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, 2009 Net change in fund balances -total governmental funds (from Exhibit 4) Amounts reported for governmental activities in the statement of activities (Exhibit 2) are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlays of $5,288,372 exceeded depreciation expense of $3,652,484 and disposals of $10,653. 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 $3,100,000 in general obligation bonds and $7,091,928 in lease purchasing financing exceeded principal payments of $4,216,078. 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 compensated absences ($220,722), net OPEB obligation ($759,529), Penobscot River remediation ($7,560,000), decrease in accrued interest $14,447, deferred taxes $234,492 and self insurance liability $168,285. Change in net assets of governmental activities (see Exhibit 2) ExhibitS $ 3,278,255 1,625,235 (5,975,850) (8,123,027) $ (9,195,387) See accompanying notes to financial statements. II -20 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, 2009 Variance with Final Budget Budgeted amounts Positive Original Final Actual (Negative) Revenues Taxes $ 49,405,817 $ 49,405,817 $ 49,432,293 $ 26,476 Intergovernmental 28,149,410 28,163,215 28,928,030 764,815 Licenses and permits 592,600 592,600 644,621 52,021 Charges for services: municipal 7,829,598 7,829,598 7,882,210 52,612 school 3,883,826 3,883,826 4,386,457 502,631 Fines, forfeits and penalties 15,200 15,200 43,706 28,506 Revenue from use of money and property munici2al 856,713 856,713 785,190 (71,523) Total revenues 90,733,164 90,746,969 92,102,507 1,355,538 Expenditures Current: General government 4,966,781 4,966,781 4,711,975 254,806 Public safety 15,067,695 15,071,000 14,602,282 468,718 Health, community services and recreation 4,448,536 4,449,036 4,461,491 (12,455) Public buildings and services 10,361,863 10,300,973 10,047,048 253,925 Other agencies 4,280,341 4,325,791 4,294,283 31,508 Education 46,690,855 49,464,071 46,376,305 3,087,766 Debt service 4,434,932 4,434,932 4,429,337 5,595 Unclassified 191,022 251,912 263,473 (11,561) Total eX2enditures 90,442,025 93,264,496 89,186,194 4,078,302 Excess (deficiency) of revenues over/under eX2enditures 291,139 (2,517,527) 2,916,313 5,433,840 Other financing sources (uses) Appropriation from designated fund balance 1,029,982 1,029,982 24,577 (1,005,405) Sale of assets 2,000 2,000 (2,000) Contributions 15,000 15,000 30 (14,970) Insurance Settlements 1,500 1,500 4,700 3,200 Transfers to other funds (613,200) (613,200) (823,200) (210,000) Transfers from other funds 39,503 39,503 40,286 783 02eratin~ transfers (765,924) (765,924) (765,924) Total other financing sources (uses) (291,139) (291,139) (1,519,531) (1,228,392) Net change in fund balance $ $ (2,808,666) 1,396,782 $ 4,205,448 Undesignated fund balance, beginning of year 8,008,114 Chan~e in balances carried (661,508) Undesignated fund balance, end of year $ 8,743,388 See accompanying notes to financial statements. 11-21 Exhibit 7 CITY OF BANGOR, MAINE Statement of Net Assets Proprietary Funds June 30, 2009 Business-type Activities -Enterprise Funds Sewer Nonmajor Total Utility Airport Proprietary Proprietary Fund Fund Funds Funds ASSETS Current assets Cash and cash equivalents $ 62,157 $ 131,492 $ 278,400 $ 472,049 Investments 320,000 9,328,711 564,266 10,212,977 Accounts receivable 2,110,605 2,290,403 115,748 4,516,756 Less allowance for uncollectible accounts (22,601) (389,056) (27,110) (438,767) Net accounts receivable 2,088,004 1,901,347 88,638 4,077,989 Due from other governments 715,618 715,618 Due from water district 103,213 103,213 Inventories, at cost 93,672 18,762 112,434 Prepaid items 37,421 16,302 33,189 86,912 Total current assets 2,610,795 12,187,142 983,255 15,781,192 Noncurrent assets Capital Assets: Land and improvements 683,865 5,113,724 5,797,589 Buildings and improvements 27,539,270 14,923,565 42,462,835 Machinery and equipment 5,382,993 470,304 5,853,297 Infrastructure 57,018,143 683,189 57,701,332 Aircraft operational assets 236,793,154 236,793,154 Parking structures 9,565,788 9,565,788 Construction in process 42,681 8,603,261 139,479 8,785,421 90,666,952 245,396,415 30,896,049 366,959,416 Less accumulated depreciation (33,560,549) (129,733,053) (16,267,748) (179,561,350) Net capital assets 57,106,403 115,663,362 14,628,301 187,398,066 Investments 9,502,030 9,502,030 Loans receivable 1,698,496 103,645 1,802,141 Deferred special assessments 87,664 87,664 Due from bond trustee 1,052,427 1,052,427 Deposits 20,000 20,000 Bond issuance costs (net of accumulated amortization of $373,554) 41,508 41,508 Total noncurrent assets 58,288,002 126,863,888 14,751,946 199,903,836 Total assets 60,898,797 139,051,030 15,735,201 215,685,028 See accompanying notes to financial statements. Continued on next page 11-22 CITY OF BANGOR, MAINE Statement of Net Assets Proprietary Funds June 30, 2009 Exhibit 7 (con't) Business-type Activities -Enterprise Funds LIABILITIES Current liabilities Accounts payable Accrued wages and benefits payable Accrued interest Workers' compensation Unearned revenue Accrued compensated absences Interfund loans payable General obligation debt payable Deferred amount on refunding Other liabilities Total current liabilities Long-term liabilities Workers' compensation General obligation debt payable Deferred amount on refunding Net OPEB obligation Other long-term liabilities Total long-term liabilities Total liabilities NET ASSETS Invested in capital assets, net of related debt Unrestricted Total net assets Sewer Utility Fund 391,491 42,512 165,042 40,480 127,348 2,773,394 (5,938) 3,534,329 54,520 18,994,645 (1,409) 45,263 298,269 19,391,288 22,925,617 Airport Fund 938,475 189,263 53,668 136,150 381,868 535,469 (926) 2,233,967 363,850 6,444,046 167,029 6,974,925 9,208,892 37,363,784 112,303,362 609,396 17,538,776 $ 37,973,180 $ 129,842,138 $ Nonmajor Proprietary Funds 96,915 41,078 96,668 10,573 30,938 122,533 2,985,655 792,334 (10,330) 4,166,364 9,427 8,083,634 30,225 212,803 8,336,089 12,502,453 Total Proprietary Funds 1,426,881 272,853 315,378 187,203 30,938 631,749 2,985,655 4,101,197 (16,268) (926) 9,934,660 427,797 33,522,325 (1,409) 242,517 511,072 34,702,302 44,636,962 6,453,738 156,120,884 (3,220,990) 14,927,182 3,232,748 $ 171,048,066 See accompanying notes to financial statements. Continued from previous page 11-23 Exhibit 8 CITY OF BANGOR, MAINE Statement of Revenues, Expenses and Changes in Net Assets Proprietary Funds For the Fiscal Year Ended June 30, 2009 Business-type Activities -Enterprise Funds Sewer Nonmajor Total Utility Airport Proprietary Proprietary Fund Fund Funds Funds Operating revenues Charges for services $ 7,537,879 $ 13,923,351 $ 3,798,304 $ 25,259,534 Operating expenses Operating expenses other than depreciation and amortization 3,832,624 12,327,354 3,803,374 19,963,352 Depreciation and amortization 1,678,662 7,235,309 992,909 9,906,880 Total operating expenses 5,511,286 19,562,663 4,796,283 29,870,232 Operating income (loss) 2,026,593 (5,639,312) (997,979) (4,610,698) Nonoperating revenue (expenses) Interest income 62,817 912,149 50,132 1,025,098 Interest expense (685,991) (371,580) (478,324) (1,535,895) Miscellaneous income (expense) 29,936 29,936 Total nonoperating revenue (expenses) (623,174) 570,505 (428,192) (480,861) Net income (loss) before grants/contributions and transfers 1,403,419 (5,068,807) (1,426,171) (5,091,559) Grants/contributions received for capital assets 3,974,078 139,479 4,113,557 Transfers to other funds (100,000) (5,000) (1,999) (106,999) Transfers from other funds 846,178 846,178 Change in net assets 1,303,419 (1,099,729) (442,513) (238,823) Net assets, beginning of year 36,669,761 130,941,867 3,675,261 171,286,889 Net assets, end of year $ 37,973,180 $ 129,842,138 $ 3,232,748 $ 171,048,066 See accompanying notes to financial statements. 11-24 Exhibit 9 CITY OF BANGOR, MAINE Statement of Cash Flows -Proprietary Funds For the Fiscal Year Ended June 30, 2009 Business-type Activities -Enterprise Funds Sewer Nonmajor Total Utility Airport Proprietary Proprietary Fund Fund Funds Funds Cash flows from operating activities Cash received from customers $ 7,217,485 $ 19,022,190 $ 3,800,261 $ 30,039,936 Cash paid to suppliers for goods and services (2,343,875) (5,995,474) (2,361,732) (10,701,081) Cash paid to employees for services (1,315,656) (6,111,882) (1,418,578) (8,846,116) Net cash provided by (used in) operating activities 3,557,954 . 6,914,834 19,951 10,492,739 Cash flows from noncapital financing activities Interfund loans (repayments) (725,000) 216,900 (508,100) Transfers in 846,178 846,178 Transfers out (100,000) (5,000) (1,999) (106,999) Net cash provided by (used in) noncapital financing activities (825,000) (5,000) 1,061,079 231,079 Cash flows from capital and related financing activities Proceeds from general obligation bonds Acquisition and construction of capital assets 110,384 (8,973,902) (173,559) (9,037,077) Principal paid on general obligation bonds (2,774,947) (532,607) (791,469) (4,099,023) Interest paid on general obligation bonds (697,353) (375,540) (458,023) (1,530,916) Proceeds from sale of property 29,936 29,936 Grant monies received for capital assets 765,497 139,479 904,976 Investment of unexpended bond proceeds 947,573 947,573 Net cash provided by (used in) capital and related financing activities (2,414,343) (9,086,616) (1,283,572) (12,784,531) Cash flows from investing activities Net sales (purchases) of investments (320,000) 986,284 123,431 789,715 Interest on investments 62,817 912,149 50,690 1,025,656 Loan repayments 159,896 3,922 163,818 Net cash provided by (used in) investing activities (257,183) 2,058,329 178,043 1,979,189 Net increase (decrease) in cash 61,428 (118,453) (24,499) (81,524) Cash, beginning of year 729 249,945 302,899 553,573 Cash, end of year $ 62,157 $ 131,492 $ 278,400 $ 472,049 Schedule of noncash investing, capital and financing activities: During the year, the Airport Fund had an unrealized gain on investments in the amount of $418,258. See accompanying notes to financial statements. Continued on next page 11-25 Exhibit 9 (con't) CITY OF BANGOR, MAINE Statement of Cash Flows -Proprietary Funds For the Fiscal Year Ended June 30, 2009 Business-type Activities -Enterprise Funds Reconciliation of operating income (loss) to net cash provided by (used in) operating activities Sewer Utility Fund Airport Fund Nonmajor Proprietary Funds Total Proprietary Funds Operating income (loss) $ 2,026,593 $ (5,639,312) $ (997,979) $ (4,610,698) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities Depreciation and amortization Provision for uncollectible accounts Changes in assets and liabilities: (Increase) decrease in accounts receivable (Increase) decrease in due from water district (Increase) decrease in inventories (Increase) decrease in prepaid items Increase ( decrease) in accounts payable Increase ( decrease) in unearned revenue Increase (decrease) in other liabilities Total adjustments Net cash provided by (used in) operating activities 1,678,662 (383,039) 62,645 (3,431) 67,339 7,235,309 151,918 5,098,839 7,238 11,549 (172,031) 109,185 221,324 1,531,361 12,554,146 $ 3,557,954 $ 6,914,834 $ 992,909 26,233 (1,487) (4,090) (23,297) (22,277) 49,939 1,017,930 19,951 9,906,880 151,918 4,742,033 62,645 5,751 4,028 (127,989) (22,277) 380,448 15,103,437 $ 10,492,739 See accompanying notes to financial statements. Continued from previous page D-26 ASSETS CITY OF BANGOR, MAINE Statement of Fiduciary Net Assets Fiduciary Funds June 30, 2009 Cash and cash equivalents LIABILITIES Liabilities: Total assets Amounts held for others Total liabilities $ $ $ $ Exhibit 10 Agency Fund 141,616 141,616 141,616 141,616 See accompanying notes to financial statements. 11-27 This page left intentionally blank INDEX OF NOTES TO THE FINANCIAL STATEMENTS Summary of Significant Accounting Policies Note Page A Reporting Entity II – 28 B Government-wide and Fund Financial Statements II – 28 C Measurement Focus, Basis of Accounting and Basis of Presentation II – 29 D Assets, Liabilities and Equity II – 31 Stewardship, Compliance and Accountability A Budgetary Information II – 33 B Reconciliation of Budgetary Basis Statements II – 34 C Excess of Expenditures Over Appropriations II – 35 D Deficit Fund Equity II – 35 E Restricted Assets II – 35 Detailed Notes on All Funds A Deposits and Investments II – 36 B Property Tax II – 37 C Capital Assets II – 37 D Interfund Transactions II – 39 E Due From Other Governments II – 40 F Leases II – 40 G Other Assets II – 41 H Deferred/Unearned Revenue II – 41 I Long-Term Debt II – 41 J Fund Balances II – 45 K Net Assets II – 47 Other Information A Risk Management II – 47 B Tax Increment Financing Districts II – 48 C Contingent Liabilities II – 49 D Retirement II – 49 E Other Postemployment Benefits II – 51 F Landfill Closure and Postclosure Care Costs II – 53 G Subsequent Events II – 53 CITY OF BANGOR, MAINE Notes to the Financial Statements June 30, 2009 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, 2008 (most recent data available) the City of Bangor's share of the Joint Venture's net assets was $6,270,081. Compete 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. II -28 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued 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. 11-29 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued 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. 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. 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. II -30 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued 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. II -31 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued 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 Equipment Infrastructure Aircraft Operational Parking Structures 5. Compensated Absences 25 -50 years 5 -20 years 10 -50 years 5 -40 years 10 -20 years 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. 11-32 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued 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. II -33 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued 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 be honored in the current year. For budgetary purposes, encumbrances are treated as expenditures within both governmental and proprietary fund types. On or before the second Monday in April, the City Manager submits to the City Council a proposed operating budget for the ensuing fiscal year. The Council holds public meetings and a final budget must be prepared and adopted no later than June 30th. Should the Council fail to adopt an operating budget on or before June 30th, by Charter, the budget proposed by the City Manager becomes effective. The budget is adopted at the department level through the passage of appropriation resolves. The City Manager may make transfers of appropriations within a department. Transfers between departments or additional appropriations require the approval of the City Council. The City Council made several supplementary budgetary appropriations throughout the year, none were material. B. Reconciliation of Budgetary Basis Statements The following schedule reconciles the General Fund amounts on the Statement of Revenues, Expenditures, and Changes in Fund Balance-Budget and Actual-Budgetary Basis to the amounts on the Statement of Revenues, Expenditures, and Changes in Fund Balances, Governmental Funds: Excess of revenues over expenditures and other financing sources and uses (Budget) Activity in deSignated fund balance 2009 encumbrances 2008 encumbrances lapsed 2008 encumbrances paid Excess of revenues and other financing sources over expenditures and other uses (GAAP) $1,386,782 (95,836) 851,197 (8,191) (914,003) $ 1.219,949 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: II -34 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY, CONTINUED Excess (deficiency) of revenues over expenditures and encumbrances: Sewer Airport Park Woods Parking Bass Park Municipal Golf Course Economic Development Nonoperating revenues classification Investments at market value . capital outlay capital projects Adjustments for accrual basis Principal payments 2009 encumbrances 2008 encumbrances Nonoperating expenses classification Operating loss C. Excess of Expenditures Over Appropriations . $ (1,493,670) (5,441,771) (183,364) (541,536) (185,722) (160,989) (266,701) (8,273,753) (1,327,983) (369,640) 21,098 (198,310) (112,143) 4,099,023 2,124 (40,177) 1.589,063 $(4 610,698) The following General Fund departments were over-expended by the indicated dollar amounts; Human Resources $9,701, City Clerk $27,981, Legal $471, Insurance $16,828, Parks and Recreation $19,256, Pensions and Other Fringe Benefits $7,580, and Tax Increment Financing Payments $3,981. 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 $12,590, due to underestimated depreciation expense. The Parking Fund was over-expended by $71,364, which was funded in part by receipt of revenues in excess of appropriations; the remaining deficit is attributable to unanticipated increases in salary costs and transfers to the General Fund. The Park Woods Fund was over-expended by $33,322 but is considered reasonable based upon the expected deficiencies within the fund. D. Deficit Fund Equity The Bass Park Enterprise Fund has a deficit fund equity of $1,719,193. The City Council has determined that the facility will either be closed or replaced in the near future. With continued review of parking usage and fees it is anticipated that the Parking Fund deficit of $404,550 will at the least stabilize over the coming years. It is antiCipated that program income in subsequent years will fund the $29,398 deficit in the Community Development Block Grant Fund. 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 2009 II -35 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued 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 along with insurance coverage to protect up to $5,917,000 of deposits in addition to the $250,000 provided by the Federal Deposit Insurance Corporation (FDIC). As of June 30, 2009, $0 of the City's bank balance of $1,327,530 was exposed to custodial credit risk because it was uninsured and uncollateralized. At June 30, 2009, the City had the following investments and maturies: Maturity (years) Investment ~t!e~ Fair Value Not At!l2licable <1 1-5 6-10 Mutual Funds $ 22,808,878 $ 22,808,878 $ $ $ US Treasuries 13,860,866 4,281,553 5,298,680 4,280,633 Common stock 990,885 990,885 Certificate of Deposit 7,164,417 5,083,844 2,080,573 Totals ~ 11,825,016 ~ 23 199 163 ~ 9365391 ~ 1,319 253 ~ 1,280 633 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 anyone 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, 2009, the City had no investments that were subject to custodial risk. The City's investment policy states that all security transactions, including collateral for repurchase agreements, entered into by the City shall be conducted on a "delivery vs. payment" basis. II -36 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued 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, 2008, 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, 2008 and March 16, 2009. Interest was charged at 11.00% 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, 2009 was as follows: Governmental activities: capital assets, not being depreciated: Land Construction in j;2rogress Total caj;2ital assets, not being dej;2reciated capital assets, being depreciated: Land improvements Buildings and improvements Machinery and equipment Vehicles Infrastructure Total capital assets being depreciated Less accumulated depreciation for: Land improvements Buildings and improvements Machinery and equipment Vehicles Infrastructure Total accumulated dej;2reciation Total caj;2ital assets being dej;2reciated, net GOVf![nmental acthlities CilQital assM!;! nf!t Balance June 30, 2008 Increases Decreases $ 5,040,548 547,800 3,894,769 3,114,699 5,588,348 3,894,769 3,114,699 6,765,169 60,119,002 2,959,626 9,973,095 168,429 12,674,862 1,380,247 260,330 20,491,942 110,024,070 4,508,302 260,330 (1,941,634) (301,786) (19,285,179) (1,199,352) (5,696,980) (747,949) (6,693,653) (957,890) (249,677) (8,980,896) (445,507) ( 42,598,342) (3,652,484) (249,677) 67.425,728 855,818 10,653 S Z3!Ol~!OZ6 ~!Z50!58Z 3!125!352 II -37 Balance June 30, 2009 5,040,548 1,327,870 6,368,418 6,765,169 63,078,628 10,141,524 13,794,779 20,491,942 114,272,042 (2,243,420) (20,484,531) (6,444,929) (7,401,866) (9,426,403) (46,OOl,149) 68,270,893 Z~!639!311 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued DETAILED NOTES ON ALL FUNDS, CONTINUED Balance June 30, 2008 Increases Decreases Business-type activities: Capital assets, not being depreciated: Land $ 3,624,273 Construction in grogress 3,511,682 8,749,247 3,476,208 Total cagital assets, not being degreciated 7,135,955 8,749,947 3,476,208 Capital assets, being depreCiated: Land improvements 2,173,316 Buildings and improvements 42,462,835 Machinery and equipment 5,715,581 148,128 10,411 Infrastructure 54,957,686 2,743,645 Airport operational assets 236,072,840 720,314 Parking structures 9,96~,268 402,480 Total capital assets being depreciated 351,350,526 3,612,087 412,891 Less accumulated depreciation for: Land improvements (1,120,300) (155,199) Buildings and improvements (26,083,615) (1,234,695) Machinery and equipment (3,922,940) (212,482) (10,411) Infrastructure (9,410,425) (570,062) Airport operational assets (122,497,744) (7,235,309) Parking structures (7,053,089) (478,381) (402,480) Total accumulated degreciation (170,088,113) (9,886,128) (412,891) Total cagital assets being degreciated, net 181.262,413 (6,274,041) Business-type activities capital assets. net $188.398.368 2.415.906 3.416.208 Depreciation expense was charged to functions/programs of the primary government as follows: Governmental activities: General government Public safety Health, community services and recreation Public building and services Education Total depreciation expense -governmental activities Business-type activities: Sewer Utility Fund Airport Fund Park Woods Parking Fund Bass Park Fund Municipal Golf Course Economic Develogment Fund Total depreciation expense -business-type activities II -38 $ 1,198,559 821,785 173,758 584,579 873,803 $3.652.484 $1,657,910 7,235,309 89,123 478,381 61,562 119,695 244,148 $9.886.128 Balance June 30, 2009 3,624,273 8,785,421 12,409,694 2,173,316 42,462,835 5,853,298 57,701,331 236,793,154 9,565,788 354,549,722 (1,275,499) (27,318,310) (4,125,011) (9,980,487) (129,733,053) (7,128,990) (172,561,350) 174,988.372 181.398.066 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued DETAILED NOTES ON ALL FUNDS, CONTINUED Construction commitments The government has active construction projects as of June 30, 2009. 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, 2009 the balances were as follows: General Fund Racino Fund Community Development Block Grant Other Governmental Funds Park Woods Fund Bass Park Fund Economic Development Receivable $ 3,055,385 1,085,695 138,898 $ 4,279 978 $ Payable 863,058 431,265 338,400 1,899,855 747.400 $ 4279978 Individual fund transfers to and from other funds for the fiscal year ended June 30, 2009 are comprised primarily of transfers from fund balances to fund capital projects and to provide operating subsidies to certain proprietary funds. General Fund Racino Fund Special Revenue Funds Capital Projects Fund Permanent Funds Proprietary Funds II -39 Transfers to $ 2,289,105 102,500 449,637 19,176 5,000 106,999 $ 2 972 417 Transfer from $ 59,395 1,999 46,856 2,017,989 846,178 $ 2 972.417 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued DETAILED NOTES ON ALL FUNDS, CONTINUED E. Due From Other Governments Due from other governments is comprised of the following amounts at June 30, 2009: Federal State of Government Maine Other Total General Fund $ 325 $ 1,592,107 $ 200,288 $ 1,792,720 Special Revenue Funds 1,229,157 84,109 650 1,313,916 Racino Fund 10,997 10,997 Capital Projects Fund 247,009 292,494 539,503 Proprietary Funds 715,618 715,618 Of the General Fund's $1,592,107 due from State of Maine, $389,016 represents school grant and State agency billings, $879,204 is due from the Department of Transportation and $295,550 represents general assistance claims. Amounts due from other communities for tuition reimbursement to Bangor accounts for $187,911 ofthe 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, 2009 are: Fiscal year ending June 30, 2010 2011 2012 2013 2014 Subsequent to 2014 Airport $ 2,300,166 2,053,699 1,990,627 1,883,320 916,708 3,798,631 $ 12.943.151 Economic Development $ 380,959 381,951 382,972 362,360 257,792 1.588,619 $ 3,354,653 Minimum future rentals do not include contingent rentals, which may be received as stipulated in the lease contracts. The Airport received $1,438,892 in contingent rentals in fiscal year 2009. The carrying amounts of the leased assets are as follows: Land Buildings Less accumulated depreciation Total Airport . $ 565,707 22,568,028 (10.469,998) $ 12,663,737 II -40 Economic Development $ 2,395,046 6,490,170 (1,223.470) $ 7,661.746 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued DETAILED NOTES ON ALL FUNDS, CONTINUED G. Other Assets Other assets are comprised of the following: Investment of unexpended bond proceeds Due from bond trustee Deposits Bond issuance costs (net of amortization) Total H. Deferred/Unearned Revenue Capital Projects Fund $ 3,128,760 $ Proprietary Fund 1,052,427 20,000 41,508 $ 3,128,760 $ 1,113,935 General Fund deferred revenue consists of $1,986,259 in deferred taxes and $92,505 of advance depOSits. Capital Fund deferred revenue of $235,407 consists of advance deposits. Community Development Block Grant and Other Governmental Funds deferred revenue of $4,220,364 and $267,452, 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 $30,938 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 $147,788,548. The following is a summary of general obligation bond and note transactions of the City for the fiscal year ended June 30, 2009: Bonds and notes payable at June 30, 2008 Add: principal additions Less: principal repayments Bonds and notes payable at June 30, 2009 II -41 $ 98,720,567 3,100,000 7,509,361 $ 94,311,206 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued DETAILED NOTES ON ALL FUNDS, CONTINUED Bonds and notes payable at June 30, 2009 are comprised of the following: Fiscal year Interest Governmental activities Business-type Total ofmaturi~ rate Ci~ School activities June 30, 2009 Long-term debt: Treatment Plant 2011 7.00% -7.10% $ $ $ 3,800,000 $ 3,800,000 Combined sewer overflow 2014 2.46% 466,000 466,000 Combined sewer overflow 2014 2.45% 496,500 496,500 Combined sewer overflow 2017 3.52% 1,371,830 1,371,830 Tax increment financing note* 2016 6.00% -6.90% 560,000 560,000 Combined sewer overflow 2018 3.03% 1,240,380 1,240,380 Public improvements -1997 2018 4.875% -5.3% 1,870,150 1,985,000 954,850 4,810,000 Tax increment financing note* 2018 6.19% 181,000 181,000 Public improvement -1999 2019 3.8% -4.6% 772,800 757,200 1,530,000 Maine Business Enter Park 2018 5.00% 148,204 148,204 Public improvements -2000 2020 5.25% -5.90% 865,907 1,009,093 1,875,000 Public improvements -2001 2021 4.25% -5.00% 758,000 71,000 2,846,000 3,675,000 State Revolving Renovation -School 2011 0.00% 113,720 113,720 Public improvements note* 2012 6.25% 543,260 543,260 Public improvements -2002 2022 3.50% -4.75% 2,872,000 2,925,000 1,228,000 7,025,000 Pension obligation bonds 2026 3.06% -6.45% 24,814,648 1,578,092 5,292,260 31,685,000 Refunding bonds 2024 3.06% -3.47% 452,968 1,361,590 2,600,442 4,415,000 Combined sewer overflow 2023 1.94% 2,184,052 2,184,052 Public improvements note* 2012 2.50% -4.00% 104,935 104,935 Tax increment financing note* 2015 2.50% -4.00% 98,365 98,365 Briggs Building note 2023 6.50% 1,045,178 1,045,178 Refunding/public improvements -2004 2023 2.50% -4.80% 2,779,350 263,600 952,050 3,995,000 Combined sewer overflow 2024 1.41% 2,198,189 2,198,189 Public improvements -2005 2024 3.50% -4.30% 2,030,000 800,000 2,830,000 Airport building sprinklers 2024 3.25% -5.00% 1,840,000 1,840,000 Chancellor'S property note 2025 5.00% 2,035,485 2,035,485 Public improvements/refunding 2025 4.00% -4.20% 3,536,234 508,766 4,045,000 Combined sewer overflow 2027 1.64% 1,827,990 1,827,990 Public improvements -2007 2027 4.00% 3,155,000 3,155,000 Combined sewer overflow 2028 1.81% 1,916,118 1,916,118 Public improvements -2009 2029 2.00% -4.375% 3,100,000 3,100,000 Total bonds and notes payable S18,389,682 S8 298 002 S3Z 623 522 S91,311,206 * Five series of general obligation notes aggregating $1,487,560 are held by the City's Airport Fund at fixed, taxable market rates of interest. These notes are structured with a put feature, which, upon certain precedent conditions, allows the Airport to present them for redemption to the City's General Fund. It is management's intention, should a put occur, to fund it by passing the note along to its Sewer Fund, where it will be converted to a three to five year fixed note with level debt service, albeit without a put option. Annual debt service requirements to maturity for general obligation bonds and notes payable are as follows: Fiscal year ending Governmental Activities Business-T):(2g Activities June 30. Principal Interest Principal Interest 2010 $ 3,493,237 $ 2,936,991 $ 4,101,196 $ 1,386,725 2011 3,326,863 2,814,348 3,854,382 1,282,166 2012 3,783,863 2,673,891 3,600,955 1,145,903 2013 3,379,642 2,496,290 3,600,264 1,017,290 2014 3,152,562 2,347,749 2,080,550 919,063 2015-2019 16,280,522 9,254,162 9,894,014 3,435,493 2020-2024 15,690,832 4,992,311 7,751,193 1,537,322 2025-2029 7.580.163 713.166 2.740.968 185.320 Total $56.687.684 $ 28.228.908 $ 37.623.522 $ 10.909.282 11-42 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued DETAILED NOTES ON ALL FUNDS, CONTINUED 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, 2009, the statutory limit for the City was $356,670,000. The City's outstanding long-term debt of $94,311,206 at June 30, 2009 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, 2009, $341,900 and $1,043,100 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 $770,122 in general obligation bonds for the purpose of funding the City's annual fleet replacement. As of June 30, 2009, $770,122 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, 2009, $155,000 remains authorized and unissued. The City expects to issue the debt within the rext twenty four months. On October 15, 2008, the City Council authorized the issuance of up to $1,569,000 in general obligation bonds for the purpose of funding the City's annual fleet replacement, replacement of Fire Station #6 and the local share of State of Maine road projects. As of June 30, 2009 $669,000 remains authorized and unissued. The City expects to issue the debt within the next fiscal year. On April 27, 2009, the City Council authorized the issuance of up to $2,837,000 in general obligation bonds through the Maine Municipal Bond Bank's Clean Water State Revolving Loan Fund Program. This funding was part of the American Recovery and Reinvestment Act (ARRA) of 2009. The terms of the borrowing are as follows; the entire loan with be at 0% interest and 50.6% of the loan proceeds will be principal forgiveness debt. The bonds will fund non point source stormwater improvements, as well as the acquisition of a street sweeper and in-stream monitoring eqUipment. The City is required to issue the debt within the next fiscal year. II -43 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued 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, 2009 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. The lease/purchase agreement requires annual payments through August 2021 with an interest rate of 5.19%. The principal amount due within the next year is $501,968. During fiscal year 2010, this agreement was paid in full through the issuance of general obligation bonds (see subsequent event footnote). Changes in Long-term Liabilities Long-term liability activity for the year ended June 30, 2009, was as follows: Balance Balance Due within June 30, 2008 Additions Reductions June 30, 2009 one )lear Governmental activities: General obligation debt $ 56,998,022 3,100,000 3,410,338 56,687,684 3,493,237 Accrued compensated absences * 2,036,534 1,723,681 1,502,959 2,257,256 1,355,241 Net OPEB obligation 759,529 759,529 Lease purchase obligation 7,091,928 805,740 6,286,188 501,968 Penobscot River remediation 7,560,000 7,560,000 7,560,000 Long-term obligation for self insurance 1.591.840 449,961 618,246 1.423,555 607,890 Governmental activities long-term liabilities $ 60.626.396 20.685.099 6.337.283 74,974,212 13,518,336 Business type activities: General obligation debt 41,722,545 4,099,023 37,623,522 4,101,197 Accrued compensated absences 563,166 467,922 399,339 631,749 631,749 Net OPEB obligation 242,517 242,517 Long-term obligation for self insurance 570,000 125,799 80,799 615,000 187,203 Deferred amount on refunding (38,910) (21,233) (17,677) (16,268) other 510,514 558 511.072 Business type activities long-term liabilities $ 43,327,315 836,796 4,557,928 39,606,183 4,903,881 * -The liquidation of compensated absences is fully covered within the General Fund II -44 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued DETAILED NOTES ON ALL FUNDS, CONTINUED l. Fund Balances Permanent Funds As of June 30, 2009, the fund balances by purpose were as follows: Restricted Nonexpendable Trust Principal Unrestricted Permanent Funds Cemetery Parks $ 375,145 14,538 16,511 44,138 43,067 30,851 $ 50,100 City Missionary Education Aid for Aged Women Other Purposes Total non major permanent funds Dedicated Revenue Funds -Special Revenue Funds $ 524,250 As of June 30, 2009, the fund balances by purpose were as follows: Dental Clinic Preservation of Records Adopt a Park Park Woods Children City Forest BFD Imaging Park Woods Complex USS Maine Monument Flower Impact. Fees Parks Tricentennial Total dedicated revenue funds II -45 $ 4,628 147 106,154 160 233,691 7,259 168,605 15,143 1,084 176,889 (945) 1,535 $ 714,350 45,234 62,543 71,983 81,383 129,391 $ 440,634 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued DETAILED NOTES ON ALL FUNDS, CONTINUED Designated Fund Balance Designated fund balance of the General Fund at June 30, 2009 consists of amounts, which the City intends to use for the following purposes: Departmental balances carried forward School department -regular adult education reading assessment special revenue school lunch trust and agency Total balances carried Accrued summer teacher payroll Pooled equipment Bus equipment Fire equipment Improvement Self insurance Cameron stadium Landfill closure Cascade park maintenance . PEG capital support Credit reserve Pickering Square development district Parks & Rec Improvement Benefit reserve . Arbitrage rebate II -46 $ 154,751 2,675,071 157,400 21,183 101,324 144,893 215,552 3.470,174 (2,811,525) 96,938 125,629 177,445 424,096 1,423,555 351,372 10,778 58,842 117,246 79,764 90,513 (89,919) 391,830 261.960 $ 4,178,698 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued 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, 2009: Capital assets Accumulated depreciation Bonds payable Unspent bond proceeds Total invested in capital assets net of related debt OTHER INFORMATION A. Risk Management Governmental $120,640,460 (46,001,149) (24,411,186) 3,128,760 $ 53,356,885 Business-Type $366,959,416 (179,561,350) (32,329,609) 1.052.427 $156,120,884 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, 2009, 2008 and 2007. II -47 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued 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, 2009, the amount of self-insurance liabilities was $2,038,555. This liability is the City's best estimate based on available information. Changes in the reported liabilities since July 1, 2007 resulted from the following: Workers' All other self- Compensation insured risks Total Unpaid claims as of July 1, 2007 $ 1,900,320 $ 221,150 $ 2,121,470 Incurred claims 266,179 266,179 Payments (749,706) (749,706) Changes in estimates and other adjustments 513,414 10,483 523 1897 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 2301199 51618 2351817 Unpaid claims as of June 30, 2009 $ 1.801.304 $ 237.251 $ 2,038,555 B. Tax Increment Financing Districts The City has established tax increment financing districts, all of which dedicate a portion of the incremental increase in real estate and/or personal property tax revenues over staggered twenty year periods for the following purposes: B.I.A. Municipal Development District No.1 -Partially financed $27.5 million dollars of capital expenditures at manufacturing facilities leased by General Electric Company. Main Street Municipal Development District -Assisted Penobscot Development Limited Liability Company in financing the extraordinary costs of acquisition and environmental remediation of the former Gasworks site on Main Street, ultimately to provide land area necessary for the construction of a 54,000 square foot supermarket in a Community Development project area. Pickering Square Municipal Development District -Assisted Realty Resources Chartered in· a major redevelopment project that converted the former Freese's department store building into affordable housing units. 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. ll-48 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued OTHERINFORMAllON,CONllNUED 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 total project cost is estimated at $7.56 million, which includes the remediation work, environmental insurance, and oversight and legal costs. A liability in the amount of $7,560,000 has been recorded in the Governmental Activities entity-wide statements. 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 ICMNRC. In addition certain full-time employees are covered through both a 401 (a) and 457 Deferred Compensation Plans (DCP) also administered by ICMNRC. 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 2009 covered payroll was $12,449,582 and City contributions were $1,060,163. 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 11-49 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued OTHER INFORMATION, CONTINUED contributions for those employees with employment contracts were $454,395 and $52,239 respectively, in fiscal year 2009. 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 Policv -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, 2009, 2008, and 2007 were $677,652, $703,675, and $701,159 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 $4,329,117 (18.76%) for the fiscal year 2009. 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 18.76% of their compensation. This cost is charged to the applicable grant. II-50 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued 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 post-retirement benefit plan providing health insurance to retiring employees. 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 Amortization of unfunded liability Interest Annual required contribution $ 493,875 622,717 22,113 $1.138.705 II -51 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued 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, 2009 were as follows: Annual OPEB cost City contributions Net OPEB obligation Percentage of annual OPEB contributed $ 1,138,705 136,659 $ 1.002,046 12.00% The unfunded actuarial accrued liability as a percentage of covered payroll for June 30, 2009 is as follows: Actuarial accrued liability (AAL) Actuarial value of plan assets Unfunded actuarial accrued liability (UAAL) Covered payroll UAAL as a percentage of covered payroll Governmental Activities $ 8,488,427 $ 8,488.427 $ 16,257,319 Business-type Total Activities June 30, 2009 $ 2,710,336 $ 11,198,763 $ 2,710,336 $ 11,198,763 $ 5,190,927 $ 21.448,246 52.21% 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 one year 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 30 years Actuarial assumptions: Investment rate of return 4.0% Participation 62.5% of eligible employees Increase in future medical costs 7.5% -5.2% II-52 CITY OF BANGOR, MAINE Notes to the Financial Statements, Continued OTHER INFORMATION, CONTINUED F. Landfill Closure and Postclosure Care Costs Closure of the City's Kittredge Road landfill was completed during the fiscal year ended June 30, 2000. Potential postclosure costs have been deemed immaterial, and therefore no liability for these amounts has been accrued. All necessary postclosure costs will be funded from the annual operating budget. G. Subsequent Events On August 10, 2009, the City Council authorized the issuance of up to $163,000 in general obligation bonds through the Maine Municipal Bond Bank's Clean Water State Revolving Loan Fund Program. This funding was part of the American Recovery and Reinvestment Act CARRA) of 2009. The terms of the borrowing are as follows; the entire loan with be at 0% interest and 50.6% of the loan proceeds will be principal forgiveness debt. The bonds will fund non point source stormwater improvements. The City is required to issue the debt within the next fiscal year. On September 30, 2009 the City Council authorized the issuance of up to $1,365,878 in general obligations bonds for the purpose of funding the City's annual fleet replacement and energy conservation measures. On October 27, 2009, the City issued general obligation bonds to refund $5,750,000 of outstanding general obligation bonds on a current basis as well as the outstanding School Department lease/purchase liability in the amount $5,985,000. This refunding resulted in cumulative interest cost savings of $1,830,000 or a present value savings of 12.41%. The final maturity dates of the refunded general obligation bonds remain unchanged, and there was a five year reduction in the final maturity of the lease/purchase liability. 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, 2009, this balance exceeded the City policy of 7.5% by $2,411,281. ll-53 CITY OF BANGOR, MAINE Required Supplemental Information Schedule of Funding Progress -Retiree Healthcare Plan For the Fiscal Year Ended June 30, 2009 Governmental activities: Actuarial value of assets Actuarial accrued liability (AAL) Unfunded actuarial accrued liability (UAAL) Funded ratio Covered payroll Business-type activities: Actuarial value of assets Actuarial accrued liability (AAL) Unfunded actuarial accrued liability (UAAL) Funded ratio Covered payroll Primary government: Actuarial value of assets Actuarial accrued liability (AAL) Unfunded actuarial accrued liability (UAAL) Funded ratio Covered payroll UAAL as a percentage of covered payroll $ $ $ $ $ $ $ $ $ Actuarial Valuation Date 711/2008 8,488,427 8,488,427 0.00% 16,257,319 2,710,336 2,710,336 0.00% 5,190,927 11,198,763 11,198,763 0.00% 21,448,246 52.21% Only one year has been presented because 2009 was the year GASB Statement 45 was implemented. II-54 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. CITY OF BANGOR, MAINE Balance Sheet General Fund June 30, 2009 ASSETS Cash and cash equivalents Investments Receivables: Taxes Accounts (net of allowance of $258,981) Interfund Intergovernmental Loans Inventory, at cost Prepaid items Total assets LIABILITIES AND FUND BALANCE Liabilities Accounts payable Accrued wages and benefits payable Deferred revenue Total liabilities Fund balance Reserved for: Encumbrances Prepaid items Advances to other funds Unreserved: Designated (Note J) Undesignated Total fund balance Total liabilities and fund balance IT-55 Schedule A-I $ 433,563 12,203,155 2,227,194 954,359 3,055,385 1,792,720 1,045,178 806,288 27,717 $ 22,545,559 $ 1,235,546 3,771,990 2,078,764 7,086,300 858,956 27,717 1,650,500 4,178,698 8,743,388 15,459,259 $ 22,545,559 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, 2009 Balances Carried Schedule A-2 Variance 711/2008 Budget Actual Surplus Carried Revenues Taxes Real and personal property $ $ 46,911,966 $ 46,977,792 $ 65,826 $ Change in deferred property tax (234,492) (234,492) Tax increment financing district (2,433,289) (2,433,289) Payment in lieu of taxes 150,640 141,595 (9,045) Excise 4,576,500 4,752,006 175,506 Interest on delinquent taxes 200,000 228,681 28,681 Total taxes 49,405,817 49,432,293 26,476 Intergovernmental State revenue sharing 4,170,000 4,411,277 241,277 School subsidy 18,028,568 17,611,968 (416,600) Other - municipal 2,388,636 2,440,297 51,661 school 3,576,011 4,464,488 888,477 Total intergovernmental 28,163,215 28,928,030 292,938 471,877 Other revenue Licenses and permits 592,600 644,621 52,021 Charges for service - municipal 7,829,598 7,882,210 52,612 school 3,883,826 4,386,457 502,631 Fines, forfeits and penalties 15,200 43,706 28,506 Revenue frorp. use of money and property - municipal 856,713 785,190 (71,523) Total other 13,177,937 13,742,184 61,616 502,631 Total revenues 90,746,969 92,102,507 381,030 974,508 II -56 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, 2009 Variance Balances Carried 711/2008 Budget Acturu Surplus Carried Expenditures General government Council Executive Human resources City clerk Assessing Legal Finance Insurance Planning, econ dev, code enforcement Total general government Public safety Police Fire Total public safety Health, community services and recreation Health and community services Parks and recreation Total health, commun. serv and rec. Public buildings and services II -57. 45,352 842,871 81,198 422,781 421,771 263,992 1,597,303 154,000 1,137,513 4,966,781 7,484,401 7,586,599 15,071,000 2,925,462 1,523,574 4,449,036 10,300,973 36,043 673,152 90,899 450,762 411,503 264,463 1,545,174 170,828 1,069,151 4,711,975 7,262,234 7,340,048 14,602,282 2,918,661 1,542,830 4,461,491 10,047,048 9,309 169,719 (9,701) (27,981) 10,268 (471) 52,129 (16,828) 68,362 254,806 222,167 123,751 345,918 6,801 (19,256) (12,455) 253,925 122,800 122,800 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, 2009 Balances Variance Carried 7/1/2008 Budget Actual Surplus Carried Expenditures, continued Other agencies County tax 2,495,028 2,495,028 Downtown Development District 54,187 54,187 Public library 1,501,491 1,501,491 Other agencies 35,450 239,635 243,577 (442) 31,950 Total other agencies 35,450 4,290,341 4,294,283 (442) 31,950 Education Regular 2,145,842 41,453,168 40,889,405 2,709,605 Adult education 182,480 560,540 539,273 203,747 School lunch 96,571 1,248,083 1,264,602 80,052 Reading assessment 21,183 21,183 Special revenue 180,800 2,412,666 2,547,745 45,721 Trust and agency 146,340 1,016,398 1,135,280 27,458 Total education 2,773,216 46,690,855 46,376,305 3,087,766 Other appropriations Pensions and other fringe benefits 1,940,576 1,948,156 (7,580) Debt service 2,239,987 2,234,392 5,595 Tax increment financing payments 506,281 510,262 (3,981) Total other appropriations 4,686,844 4,692,810 (5,966) Total expenditures 2,808,666 90,455,830 89,186,194 835,786 3,242,516 Excess (deficiency) of revenues over/under expenditures (2,808,666) 291,139 2,916,313 1,216,816 4,217,024 II -58 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, 2009 Balances Carried Schedule A-2 (con't) Variance 71112008 Budget Actual Surplus Carried Other financing sources (uses) Appropriaton from designated fund balance 1,109,746 104,341 (258,555) (746,850) Appropriation to designated fund balance (79,764) (79,764) Sale of assets 2,000 (2,000) Contributions 15,000 30 (14,970) Insurance Settlements 1,500 4,700 3,200 Transfers to other funds (613,200) (823,200) (210,000) Transfers from other funds 39,503 40,286 783 Operating transfers (765,924) (765,924) Total other financing sources (uses) (291,139) (1,519,531) (481,542) (746,850) Net change in fund balance $ (2,808,666) $ -$ 1,396,782 735,274 $ 3,470,174 Undesignated fund balance, beginning of year 8,008,114 Undesignated fund balance, end of year $ 8,743,388 11-59 Schedule B-1 CITY OF BANGOR, MAINE Combining Balance Sheet Nonmajor Governmental Funds June 30, 2009 Nonmajor Special Nonmajor Total Other Revenue Permanent Governmental Funds Funds Funds ASSETS Cash and cash equivalents $ 1 $ $ 1 Investments 222,784 97,185 319,969 Receivables: Accounts Interfund 138,898 138,898 Loans 1,638,046 992,141 2,630,187 Intergovernmental 232,794 232,794 Total assets $ 2,232,523 $ 1,089,326 $ 3,321,849 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 123,368 $ $ 123,368 Deferred revenue 267,452 267,452 Interfund loans Ea~able 431,265 431,265 Total liabilities 822,085 822,085 Fund balances Reserved, principal 648,692 648,692 Unreserved, undesignated 1,410,438 440,634 1,851,072 Total fund balances 1,410,438 1,089,326 2,499,764 Total liabilities and fund balances $ 2,232,523 $ 1,089,326 $ 3,321,849 11-60 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, 2009 Nonmajor Special Nonmajor Total Other Revenue Permanent Governmental Funds Funds Funds Revenues Taxes $ 879,816 $ $ 879,816 Intergovernmental 5,475,305 5,475,305 Charges for services 981,742 981,742 Program income 24,918 24,918 Revenue from use of money and property 96,232 96,232 Other revenue 10,325 1,650 11,975 Interest revenue 41,072 41,072 Total revenues 7,468,338 42,722 7,511,060 Expenditures Current: Personnel 1,013,232 1,013,232 Equipment 7,994 7,994 Payments to beneficiaries 909,773 909,773 Other 3,377,369 3,377,369 Bus operations 2,161,223 2,161,223 Program expenditures 4,277 4,277 Total expenditures 7,469,591 4,277 7,473,868 Excess (deficiency) of revenues over (under) expenditures (1,253) 38,445 37,192 Other fmancing sources (uses) Transfer to other funds (449,637) (5,000) (454,637) Transfer from other funds 46,856 46,856 Total other financing sources (uses) (402,781) (5,000) (407,781) Net change in fund balances (404,034) 33,445 (370,589) Fund balances, beginning of year 1,814,472 1,055,881 2,870,353 Fund balances, end of year $ 1,410,438 $ 1,089,326 $ 2,499,764 II -61 Schedule B-3 CITY OF BANGOR, MAINE Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2009 Dedicated Other Grant Revenue Totals HUDFunds Fund Funds Other 2009 ASSETS Cash and cash equivalents $ $ $ $ $ Investments 222,784 222,784 Receivables: Accounts Interfund 138,898 138,898 Loans 267,452 714,350 656,244 1,638,046 Intergovernmental 232,144 650 232,794 Total assets $ 406,350 $ 232,145 $ 714,350 $ 879,678 $ 2,232,523 LIABILmES AND FUND BALANCES Liabilities Accounts payable $ $ 111,794 $ $ 11,574 $ 123,368 Deferred revenue 267,452 267,452 Interfund loans payable 69,730 361,535 431,265 Total liabilities 267,452 181,524 373,109 822,085 Fund balances Unreserved, undesignated 138,898 50,621 714,350 506,569 1,410,438 Total fund balances 138,898 50,621 714,350 506,569 1,410,438 Total liabilities and fund balances $ 406,350 $ 232,145 $ 714,350 $ 879,678 $ 2,232,523 II -62 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, 2009 Dedicated Other Grant Revenue Totals HUDFunds Fund Funds Other 2009 Revenues Taxes $ $ $ $ 879,816 $ 879,816 Intergovernmental 5,475,305 5,475,305 Charges for services 952,562 29,180 981,742 Program income 24,918 24,918 Revenue from use of money and property 265 37,758 58,209 96,232 Contributions 4,425 5,900 10,325 Total revenues 25,183 6,427,867 71,363 943,925 7,468,338 Expenditures Personnel 1,013,232 1,013,232 Equipment 7,994 7,994 Payments to beneficiaries 4,598 905,175 909,773 Other 541 3,372,346 4,482 3,377,369 Bus operations 2,161,223 2,161,223 Total expenditures 541 6,554,795 4,598 909,657 7,469,591 Excess (deficiency) of revenues over (under) expenditures 24,642 (126,928) 66,765 34,268 (1,253) Other financing sources (uses) Transfers to other funds (103,037) (346,600) (449,637) Transfers from other funds 46,792 64 46,856 Total other financing sources (uses) 46,792 (102,973) (346,600) (402,781) Net change in fund balances 24,642 (80,136) (36,208) (312,332) (404,034) Fund balances, beginning of year 114,256 130,757 750,558 818,901 1,814,472 Fund balances, end of year $ 138,898 $ 50,621 $ 714,350 $ 506,569 $ 1,410,438 II -63 Schedule B-S CITY OF BANGOR, MAINE Combining Balance Sheet Nonmajor Permanent Funds June 30, 2009 Revolving Other Loan Funds Funds Totals ASSETS Investments $ $ 97,185 $ 97,185 Loans receivable 964,884 27,257 992,141 Total assets $ 964,884 $ 124,442 $ 1,089,326 LIABILITIES AND FUND BALANCES Liabilities $ $ $ Total liabilities $ $ $ Fund balances Principal 524,250 124,442 648,692 Unexpended income 440,634 440,634 Total fund balances 964,884 124,442 1,089,326 Total liabilities and and fund balances $ 964,884 $ 124,442 $ 1,089,326 11-64 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, 2009 Revolving Other Loan Funds Funds Totals Revenues Investment income $ 46,750 $ (5,678) $ 41,072 Lot sales 1,650 1,650 Total revenues 48,400 (5,678) 42,722 Expenditures Current: Payments to beneficiaries 348 3,000 3,348 Other miscellaneous 929 929 Total expenditures 348 3,929 4,277 Excess (deficiency) of revenues over (under) expenditures 48,052 (9,607) 38,445 Other financing uses Transfer to other funds (5,000) (5,000) Transfer from other funds Total other financing uses (5,000) (5,000) Net change in fund balances 43,052 (9,607) 33,445 Fund balances, beginning of year 921,832 134,049 1,055,881 Fund balances, end of year $ 964,884 $ 124,442· $ 1,089,326 II -65 This page left intentionally blank Schedule C-I CITY OF BANGOR, MAINE Combining Statement of Net Assets Nonmajor Proprietary Funds June 30, 2009 Business-type Activities -Enterprise Funds Bass Municipal Economic Total Park Parking. Park Golf Development Nonmajor Woods Fund Fund Course Fund Proprietary Funds ASSETS Current assets Cash and cash equivalents $ 226 $ 170,657 $ 5,889 $ 101,551 $ 77 $ 278,400 Investments 66,795 497,471 564,266 Accounts receivable 130 1,846 57,266 56,506 115,748 Less allowance for uncollectible accounts (27,110) (27,110) Net accounts receivable 130 1,846 30,156 56,506 88,638 Inventories, at cost 18,762 18,762 Prepaid items 33,189 33,189 Total current assets 356 239,298 87,996 599,022 56,583 983,255 Noncurrent assets Capital Assets: Land and improvements 295,025 828,921 1,594,732 2,395,046 5,113,724 Buildings and improvements 1,933,061 5,587,727 <}12,607 6,490,170 14,923,565 Machinery and equipment 22,952 144,428 302,924 470,304 Infrastructure 683,189 683,189 Parking structures 9,565,788 9,565,788 Construction in process 139,479 139,479 2,251,038 9,705,267 6,561,076 2,810,263 9,568,405 30,896,049 Less accumulated depreciation (1,276,195) (7,128,990) (5,187,529) (1,431,328) (1,243,706) (16,267,748) Net capital assets 974,843 2,576,277 1,373,547 1,378,935 8,324,699 14,628,301 Loans receivable 103,645 103,645 Deposits 20,000 20,000 Total noncurrent assets 994,843 2,576,277 1,373,547 1,378,935 8,428,344 14,751,946 Total assets 995,199 2,815,575 1,461,543 1,977,957 8,484,927 15,735,201 Continued on next page ll-66 Schedule C-I (con't) CITY OF BANGOR, MAINE Combining Statement of Net Assets Nonmajor Proprietary Funds June 30, 2009 Business-type Activities -Enterprise Funds Bass Municipal Economic Total Park Parking Park Golf Development Nonmajor Woods Fund Fund Course Fund Proprietary Funds LIABILITIES Current liabilities Accounts payable 31,423 724 34,773 13,217 16,778 96,915 Accrued wages and benefits payable 2,664 6,897 18,110 13,407 41,078 Accrued interest 31,329 13,287 7,395 44,657 96,668 Workers' compensation 4,715 5,858 \0,573 Unearned revenue 25,917 5,021 30,938 Accrued compensated absences 36,854 8,909 57,305 19,465 122,533 Interfund loans payable 338,400 1,899,855 747,400 2,985,655 General obligation debt payable 431,885 138,041 31,823 190,585 792,334 Deferred amount on refunding (10,330) (10,330) Other liabilities Total current liabilities 409,341 500,046 2,172,250 85,307 999,420 4,166,364 Long-term liabilities Workers' compensation 5,285 4,142 9,427 General obligation debt payable 2,690,606 989,284 565,461 3,838,283 8,083,634 Net OPEB obligation 3,428 4,446 15,060 7,291 30,225 Other long-term liabilities 193,061 19,742 212,803 Total long-term liabilities 196,489 2,720,079 1,008,486 572,752 3,838,283 8,336,089 Total liabilities 605,830 3,220,125 3,180,736 658,059 4,837,703 12,502,453 NET ASSETS Invested in capital assets, net of related debt 974,843 (379,522) 690,764 871,822 4,295,831 6,453,738 Unrestricted (585,474) (25,028) (2,409,957) 448,076 (648,607) (3,220,990) Total net assets $ 389,369 $ (404,550) $ (1,719,193) $ 1,319,898 $ 3,647,224 $ 3,232,748 Continued from previous page 11-67 Schedule C-2 CITY OF BANGOR, MAINE Combining Statement of Revenues, Expenses and Changes in Net Assets Nonmajor Proprietary Funds For the Fiscal Year Ended June 30, 2009 Business-type Activities -Enterprise Funds Bass Municipal Economic Total Park Parking Park Golf Development Nonmajor Woods Fund Fund Course Fund Proprietary Funds Operating revenues Charges for services $ 369,478 $ 997,111 $ 1,253,236 $ 608,930 569,549 $ 3,798,304 Operating expenses Operating expenses other than depreciation and amortization 501,127 735,002 1,731,986 599,051 236,208 3,803,374 Depreciation and amortization 89,123 478,381 61,562 119,695 244,148 992,909 Total operating expenses 590,250 1,213,383 1,793,548 718,746 480,356 4,796,283 Operating income (loss) (220,772) (216,272) (540,312) (109,816) 89,193 (997,979) Nonoperating revenue (expenses) Interest income 1,826 48 12,610 35,648 50,132 Interest expense (161,526) (58,366) (26,593) (231,839) (478,324) Total nonoperating revenue (expenses) (159,700) (58,318) (13,983) (196,191) (428,192) Net income (loss) before groats/contributions and transfers (220,772) (375,972) (598,630) (123,799) (106,998) (1,426,171) Grants/contributions received for capital assets 139,479 139,479 Transfers to other funds (1,999) (1,999) Transfers from other funds 49,754 262,651 533,773 846,178 Change in net assets (171,018) 26,158 (66,856) (123,799) (106,998) (442,513) Net assets, beginning of year 560,387 (430,708) (1,652,337) 1,443,697 3,754,222 3,675,261 Net .... ts, end of year $ 389,369 $ (404,550) $ (1,719,193) $ 1,319,898 $ 3,647,224 $ 3,232,748 n-68 Schedule C-3 CITY OF BANGOR, MAINE Combining Statement of Cash Flows -Nomnajor Proprietary Funds For the Fiscal Year Ended June 30, 2009 Business-type Activities -Enterprise Funds Bass Municipal Ewnomic Total Park Parking Park Golf Development Nonmajor Woods Fund Fund Course Fund Proprietary Funds Cash flows from operating activities Cash received from customers $ 367,349 $ 982,821 $ 1,324,731 $ 610,930 $ 514,430 $ 3,800,261 Cash paid to suppliers for goods and services (398,081) (525,614) (960,722) (248,074) (229,241) (2,361,732) Cash paid to employees for services (92,378) (234,317) (757,430) (334,453) (1,418,578) Net cash provided by (used in) operating activities (123,110) 222,890 (393,421) 28,403 285,189 19,951 Casb flows from noncapital financing activities Interfund loans (repayments) 72,400 56,600 87,900 216,900 Transfers in 49,754 262,651 533,773 846,178 Transfers out (1,999) (1,999) Net cash provided by (used in) noncapital financing activities 122,154 262,651 588,374 87,900 1,061,079 Cash flows from capital and related fmancing activities Acquisition and construction of capital assets (139,479) (21,098) (12,982) (173,559) Principal paid on general obligation boods (438,214) (138,018) (31,997) (183,240) (791,469) Interest paid on general obligation hoods (153,933) (60,621) (27,005) (216,464) (458,023) Grants/contributions received for capital assets 139,479 139,479 Investment of unexpended bond proceeds Net casb provided by (used in) capital and related financing activities (592,147) (198,639) (80,100) (412,686) (1,283,572) Cash flows from investing activities Net sales (pUIChases) of investments 80,833 42,598 123,431 Interest on investments 2,384 48 12,610 35,648 50,690 Loan repayments 3,922 3,922 Net cash provided by (used in) investing activities 83,217 48 55,208 39,570 178,Q43 Net increase (decrease) in cash (956) (23,389) (3,638) 3,511 (27) (24,499) Cash, beginning of year 1,182 194,046 9,527 98,040 104 302,899 Cash, end of year $ 226 $ 170,657 $ 5,889 $ 101,551 $ 77 $ 278,400 Continued on next page 11-69 Schedule C-3 (con't) CITY OF BANGOR, MAINE Combining Statement of Cash Flows -Nonmajor Proprietary Funds For the Fiscal Year Ended June 30, 2009 Reconciliation of operating income (loss) to net cash provided by (used in) operating activities Business-type Activities -Enterprise Funds Park Woods Parking Fund Bass Park Fund Municipal Golf Course Economic Development Fund Operating income (loss) $ (220,772) $ (216,272) $ (540,312) $ (109,816) $ 89,193 $ Adjusbnents to reconcile operating income (loss) to net cash provided by (used in) operating activities Depreciation and amortization Changes in assets and liabilities: (Increase) decrease in accounts receivable (Increase) decrease in inventories (Increase) decrease in prepaid items Increase (decrease) in accounts payable Increase (decrease) in uneamed revenue Increase (decrease) in other liabilities Total adjustments Net cash provided by (used in) operating activities $ 89,123 478,381 61,562 (130) 6,009 73,473 (1,487) (4,090) 3,582 (29,202) (4,084) (20,299) (1,978) 5,087 4,273 23,495 97,662 439,162 146,891 (123,110) $ 222,890 $ (393,421) $ Continued from previous page 11-70 119,695 244,148 2,000 (55,119) (560) 6,967 17,084 138,219 195,996 28,403 $ 285,189 $ Total Nonmajor Proprietary Funds (997,979) 992,909 26,233 (1,487) (4,090) (23,297) (22,277) 49,939 1,017,930 19,951 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, 2009 Revenues Charges for services Interest and other revenue Total revenues Expenditures and encumbrances Salaries Fringe benefits Supplies and materials Contractual services Interfund charges Miscellaneous Debt service Depreciation Outlay Total expenditures and encumbrances Excess (deficiency) of revenues over/under expenditures and encumbrances Budget Actual $ 7,472,150 $ 7,296,383 $ 331,534 48,455 7,803,684 7,344,838 1,129,025 291,322 1,268,770 851,816 474,255 22,685 3,545,161 1,663,702 210,650 9,457,386 1,089,285 277,481 1,085,024 650,567 439,655 17,452 3,544,328 1,678,662 56,054 8,838,508 $ (1,653,702) $ (1,493,670) $ II -71 Schedule C-4 Variance Positive (Negative) (175,767) (283,079) (458,846) 39,740 13,841 183,746 201,249 34,600 5,233 833 (14,960) 154,596 618,878 160,032 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, 2009 Revenues Charges for services Interest and other revenue Total revenues Expenditures and encumbrances Salaries Fringe benefits Supplies and materials Contractual services Interfund charges Miscellaneous Debt service Depreciation Outlay Credits Total expenditures and encumbrances $ Budget 14,143,050 $ 836,500 14,979,550 5,027,524 1,114,268 3,231,550 2,315,495 712,711 171,200 880,177 7,202,000 91,122 (10,000) 20,736,047 Actual 13,923,351 884,980 14,808,331 5,151,309 976,228 2,472,147 2,402,787 732,065 323,784 908,147 7,235,309 48,326 20,250,102 $ Excess (deficiency) of revenues over/under expenditures and encumbrances $ (5,756,497) $ (5,441,771) $ ll-72 Schedule C-5 Variance Positive (Negative) (219,699) 48,480 (171,219) (123,785) 138,040 759,403 (87,292) (19,354) (152,584) (27,970) (33,309) 42,796 (10,000) 485,945 314,726 Revenues 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, 2009 Budget Actual Schedule C-6 Variance Positive (Negative) Charges for services Interest and other revenue $ 430,397 $ 369,478 $ (60,919) Total revenues Expenditures and encumbrances Salaries Fringe benefits Supplies and materials Contractual services Interfund charges Miscellaneous Depreciation Outlay Total expenditures and encumbrances Excess (deficiency) of revenues over/under expenditures and encumbrances II -73 30,600 30,600 460,997 400,078 (60,919) 77,006 15,200 208,250 155,701 4,740 100 89,123 550,120 77,351 15,305 214,509 179,668 487 6,999 89,123 583,442 (345) (105) (6,259) (23,967) 4,253 (6,899) (33,322) $ (89,123) $ (183,364) $ (94,241) 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, 2009 Revenues Charges for services Operating transfer Interest and other revenue Total revenues Expenditures and encumbrances Salaries Fringe benefits Supplies and materials Contractual services Interfund charges Debt service Depreciation Outlay Total expenditures and encumbrances $ Budget 984,728 262,651 6,000 1,253,379 172,954 41,055 6,750 339,282 101,190 592,148 478,381 1,731,760 $ Actual 997,111 262,651 1,826 1,261,588 191,923 42,138 4,273 343,682 150,580 592,147 478,381 1,803,124 $ Excess (deficiency) of revenues over/under expenditures and encumbrances $ (478,381) $ (541,536) $ II -74 Schedule C-7 Variance Positive (Negative) 12,383 (4,174) 8,209 (18,969) (1,083) 2,477 (4,400) (49,390) 1 (71,364) (63,155) 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, 2009 Revenues Charges for services Operating transfer Interest and other revenue Total revenues Expenditures and encumbrances Salaries Fringe benefits Supplies and materials Contractual services Interfund charges Miscellaneous Debt service Depreciation Budget $ 1,501,600 $ 506,273 2,007,873 633,991 119,902 432,050 427,568 155,725 50,000 198,638 67,964 Actual 1,253,235 506,273 48 1,759,556 634,397 128,874 375,188 365,384 152,179 39,055 198,639 61,562 Schedule C-8 Variance Positive (Negative) $ (248,365) 48 (248,317) (406) (8,972) 56,862 62,184 3,546 10,945 (1) 6,402 Credits (10,000) (10,000) Total expenditures and encumbrances Excess (deficiency) of revenues over/under expenditures and encumbrances 11-75 2,075,838 1,945,278 130,560 $ (67,965) $ (185,722) $ (117,757) Revenues 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, 2009 Budget Actual Schedule C-9 Variance Positive (Negative) Charges for services Interest and other revenue $ 647,000 $ 608,930 $ (38,070) (13,390) Total revenues Expenditures and encumbrances Salaries Fringe benefits Supplies and materials Contractual services Interfund charges Debt service Depreciation Outlay Total expenditures and encumbrances Excess (deficiency) of revenues over/under expenditures and encumbrances 11-76 $ 26,000 12,610 673,000 621,540 (51,460) 276,057 297,672 (21,615) 37,625 37,551 74 99,050 102,058 (3,008) 72,983 64,247 8,736 61,283 64,159 (2,876) 59,002 59,002 96,939 119,695 (22,756) 67,000 38,145 28,855 769,939 782,529 (12,590) (96,939) $ (160,989) $ (64,050) 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, 2009 Revenues Charges for services Interest and other revenue Total revenues Expenditures and encumbrances Supplies and materials Contractual services Interfund charges Miscellaneous Debt service Depreciation Outlay Total expenditures and encumbrances Budget $ 439,161 287,479 726,640 45,970 189,813 2,150 399,707 205,898 89,000 932,538 Actual $ 552,048 57,071 609,119 29,256 156,198 9,164 399,704 244,148 37,350 875,820 Schedule C-10 Variance Positive (Negative) $ 112,887 (230,408) (117,521) 16,714 33,615 (7,014) 3 (38,250) 51,650 56,718 Excess (deficiency) of revenues over/under expenditures and encumbrances $ (205,898) $ (266,701) $ (60,803) 11-77 This page left intentionally blank Schedule 0-1 CITY OF BANGOR, MAINE Statement of Change in Assets and Liabilities Agency Fund For the Fiscal Year Ended June 30, 2009 Balance Balance July 1,2008 Additions Deletions June 30, 2009 ASSETS Cash: American Folk Festival funds $ 11,875 $ 810,051 $ 781,565 $ 40,361 Bangor Area Stormwater Group 43,989 43,434 84,159 3,264 School Activity Funds 103,361 222,778 228,148 97,991 Total assets $ 159,225 $ 1,076,263 $ 1,093,872 $ 141,616 LIABILITIES Funds held for others: American Folk Festival $ 11,875 $ 810,051 $ 781,565 $ 40,361 Bangor Area Stormwater Group 43,989 43,434 84,159 3,264 School Activity Funds 103,361 222,778 228,148 97,991 Total liabilities $ 159,225 $ 1,076,263 $ 1,093,872 $ 141,616 ll-78 CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS Schedule E-l 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, 2009 Balance Balance Function and Activity 2008 Additions Deletions 2009 General government Animal control $ 731 $ $ 731 $ BAT community connector 962,827 151,121 811,706 Central service 24,999 3,846 21,153 City clerk 27,222 6,587 20,635 City hall 481,471 126,334 16,731 591,074 Community and economic development 4,424,586 628,331 245,379 4,807,538 Engineering 46,391 12,625 6,290 52,726 Information services 239,078 51,128 96,124 194,082 Legal 1,210 1,210 Motor pool 4,084,170 546,933 606,666 4,024,437 Other -unclassified 550,321 74,526 475,795 Total general government 10,843,006 1,365,351 1,209,211 10,999,146 Public safety Fire 3,693,041 6,047,679 3,549,782 6,190,938 Police 11,520,391 45,540 386,703 11,179,228 Total public safety 15,213,432 6,093,219 3,936,485 17,370,166 Health, community services and recreation Health and community services Parks and recreation 2,593,105 21,050 173,758 2,440,397 Total health, community services and recreation 2,593,105 21,050 173,758 2,440,397 Public building and services Public works 17,388,635 522,342 584,579 17,326,398 Total Eublic buildin~s and services 17,388,635 522,342 584,579 17,326,398 Education 26,975,898 401,109 873,803 26,503,204 Total governmental fund capital assets $ 73,014,076 $ 8,403,071 $ 6,777,836 $ 74,639,311 ll-79 CITY OF BANGOR, MAINE Assessed Valuation, Commitment and Collections For the Fiscal Year Ended June 30, 2009 VALUATION Land and buildings Land and buildings -Homestead exemption Personal property Personal property -BETE exemption Total valuation COMMITMENT $ 2,230,645,100 69,530,600 244,740,100 8,523,800 $ 2,553,439,600 Real estate and personal property (excludes Homestead exemption) Tax rate Total commitment ADD Supplemental taxes committed LESS Collections 2009 Abatements 2009 taxes receivable at June 30, 2009 II -80 Schedule F-1 $ 2,475,385,200 0.01905 $ 47,156,088 79,282 47,235,370 45,688,536 275,489 1,192,063 CITY OF BANGOR, MAINE Undesignated Fund Balance Sufficiency Calculation For the Fiscal Year Ended June 30, 2009 Schedule F-2 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, 2009 undesignated fund balance. General Fund expenditures/uses (Schedule A-2) General government Public safety Health, community services and recreation Public buildings and services Other agencies Education Other appropriations Other uses, gross * Gross expenditures and uses General Fund debt service Net expenditures and uses Indicated undesignated fund balance @ 7.5% Actual undesignated fund balance (Schedule A-2) Actual undesignated fund balance as a percentage of net expenditures and uses Over (under) funded status * excludes amounts appropriated from undesignated fund balance ll-81 $ 4,711,975 14,602,282 4,461,491 10,047,048 4,294,283 46,376,305 4,692,810 1,589,124 90,775,318 6,347,220 $ 84,428,098 $ 6,332,107 $ 8,743,388 10.36% $ 2,411,281 This page left intentionally blank 2003* Governmental activities: Invested in capital assets, net of related debt $ 35,304,708 Restricted 507,743 Unrestricted (16,178,265) Total governmental activities net assets 19,634,186 Business-type activities: Invested in capital assets, net of related debt 149,863,511 Restricted Unrestricted 19,579,291 Total business-type activities net assets 169,442,802 Primary government: Invested in capital assets, net of related debt 185,168,219 Restricted 507,743 Unrestricted 3,401,026 Total primary government net assets $ 189,076,988 CITY OF BANGOR, MAINE Net Assets by Component Last Ten Fiscal Years (accrual basis ofaccounting) 2004* 2005* $ 41,565,642 $ 46,993,577 510,433 513,851 (20,154,733) (21,010,448) 21,921,342 26,496,980 148,218,655 150,970,961 21,096,167 21,705,461 169,314,822 172,676,422 189,784,297 197,964,538 510,433 513,851 941,434 695,013 $ 191,236,164 $ 199,173,402 Only seven years have been presented because 2003 was the year GASB Statement No. 34 was implemented. • -Certain amounts have been reclassified to confono with 2007 presentation. III-I Table 1 Fiscal Year 2006* 2007 2008 2009 $ 48,707,054 $ 48,257,039 $ 49,447,154 $ 53,356,885 1,002,525 1,055,881 656,658 6,198,372 (21,528,721) (9,784,221) (15,155,253) (26,929,961) 28,180,858 39,528,699 34,948,559 32,625,296 154,068,754 157,302,400 154,066,934 156,120,884 16,998,096 14,715,610 17,219,955 14,927,182 171,066,850 172,018,010 171,286,889 171,048,066 202,775,808 205,559,439 203,514,088 209,477 ,769 1,002,525 1,055,881 656,658 6,198,372 (4,530,625) 4,931,389 2,064,702 (12,002,779) $ 199,247,708 $ 211,546,709 $ 206,235,448 $ 203,673,362 CITY OF BANGOR, MAINE Changes in Net Assets Last Ten Fiscal Years (accrual basis of accountin~ Fiscal Year 2003 2004 2005 2006 Expenses Governmental activities: General government $ 6,060,687 $ 6,487,572 $ 6,435,386 $ 6,947,106 Public safety 11,114,804 12,066,567 12,478,326 12,890,750 Health, community services and recreation 3,340,989 3,606,827 4,000,249 7,301,546 Public building and services 7,050,085 7,360,360 7,609,989 8,256,266 Other agencies 3,322,395 3,273,003 3,514,658 3,610,935 Education 40,828,756 40,279,055 42,659,395 45,522,795 Unclassified 2,044,069 389,598 65,639 947,025 Restricted grants* 6,551,455 6,857,039 7,326,307 Arena Development Cornmunity development* 2,419,594 Streets/Sidewalks • 2,911,131 Waterfront· 990,961 Public transportation * 1,798,968 Tax increment financing· 1,092,770 Interest on debt 740,077 3,083,447 3,166,250 3;098,248 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 Business-type activities: Sewer Utility 5,744,275 5,751,710 5,859,588 5,818,127 Airport 14,489,128 15,060,963 16,368,681 16,947,056 Park Woods 449,873 531,986 598,854 540,207 Parking 1,370,737 1,431,983 1,425,508 1,322,138 Bass Park 1,944,718 1,935,653 1,889,215 1,918,111 Municipal Golf Course 575,408 626,739 592,323 647,499 Economic Development 271,047 338,795 397,881 484,264 Total business-type activities expenses 24,845,186 25,677,829 27,132,050 27,677,402 Total primary government expenses $ 107,722,992 $ 1ll,747,415 $ 116,062,283 $ 125,465,497 Only seven years have been presen1ed because 2003 was the year GASB Statement No. 34 was implemen1ed. • -Amounts previously reported as restricted grants and capital maintenance expenses have been classified into new functions beginning in 2006. Continued on next page ID-2 Table 2 2007 2008 2009 $ 7,052,860 $ 8,744,549 $ 7,868,247 13,756,962 14,945,855 15,671,645 7,348,875 8,413,205 9,168,870 8,659,473 9,142,251 9,671,469 3,787,970 4,829,547 4,580,661 46,106,647 47,537,197 54,294,824 1,136 417,030 41,091 51,332 1,865,026 2,156,241 912,992 2,884,655 1,359,002 2,141,079 399,015 1,754,281 9,252,263 1,841,516 2,118,374 3,042,434 1,101,078 1,066,192 1,114,112 1,952,612 3,206,764 2,651,599 97,174,855 105,314,549 120,421,527 6,052,420 6,052,419 6,197,277 18,645,140 19,641,953 19,934,243 678,867 678,867 590,250 1,438,125 1,438,125 1,374,909 1,993,205 1,993,205 1,851,914 695,969 695,969 745,339 695,851 695,851 712,195 30,199,577 31,196,389 31,406,127 $ 127,374,432 $ 136,510,938 $151,827,654 CITY OF BANGOR, MAINE Changes in Net A&<iets Last Ten Fiscal Years (accrual basis of accounting) 2003 2004 2005 Program Revenues Governmental activities: Charges for services General government $ 934,540 $ 1,103,382 $ 1,447,058 Public safety 1,446,942 1,923,804 1,908,000 Health, community services and recreation 647,709 624,778 674,364 Public buildings and services 3,043,886 3,537,702 3,766,334 Other agencies Education 3,742,385 3,857,798 4,549,286 Unclassified 26,830 19,719 20,036 Restricted grants 5,392,472 1,368,366 1,079,690 Arena Development Community development Streets/Sidewalks Public transportation Tax increment financing Operating grants and contributions 21,566,478 24,743,028 25,986,614 Capital grants and contributions 3,814,705 2,098,577 4,117,072 Total governmental activities program revenues 40,615,947 39,277,154 43,548,454 Business-type activities: Charges for services Sewer Utility 6,569,790 6,281,870 5,970,615 Airport 9,291,513 11,398,518 11,527,061 Park Woods 283,052 279,588 310,389 Parking 807,645 892,820 943,990 Bass Park 1,362,054 1,253,421 1,238,707 Municipal Golf Course 623,233 595,852 586,956 Economic Development 388,165 316,062 433,694 Capital grants and contributions 11,274,222 3,376,637 7,749,367 Total business-type activities program revenues 30,599,674 24,394,768 28,760,779 Total primary government program revenues $ 71,215,621 $ 63,671,922 $ 72,309,233 Only seven years have been presented because 2003 was the year GASB Statement No. 34 was implemented. Continued on next page ill-3 Table 2 (con't) Fiscal Year 2006 2007 2008 2009 $ 1,672,854 $ 2,334,040 $ 2,282,374 $ 1,869,711 2,471,220 2,182,680 2,439,831 3,010,167 756,207 681,583 771,254 768,450 4,076,981 3,871,412 3,967,990 3,786,050 22,243 22,068 4,561,352 4,408,431 4,539,787 4,386,457 859,682 61,128 1,630,360 1,689,657 2,205,771 672,459 658,141 297,394 301,019 159,351 21,836 536,491 659,960 809,531 944,804 1,711 29,577,430 30,534,706 41,370,518 34,155,649 3,788,485 2,604,652 2,119,150 2,068,478 48,973,161 49,627,093 60,469,080 53,542,171 6,206,605 6,663,408 6,745,112 7,537,879 12,074,504 13,555,003 14,475,879 13,953,287 287,452 340,494 340,494 369,478 963,697 1,001,697 1,001,697 997,111 1,460,931 1,426,599 1,426,599 1,253,236 604,365 655,834 655,834 608,930 391,658 422,716 422,716 569,549 2,581,874 4,377,242 3,426,732 4,113,557 24,571,086 28,442,993 28,495,063 29,403,027 $ 73,544,247 $ 78,070,086 $ 88,964,143 $ 82,945,198 CITY OF BANGOR, MAINE Changes in Net Assets Last Ten Fiscal Years (accrual bnsis of accounting) Fiscal Year 2003 2004 200S 2006 Net (expense)/revenue Governmental activities $ (42,261,859) $ (46,792,432) $ (45,381,779) $ (48,814,934) Business-type activities 5,754,488 (1,283,061) 1,628,729 (3,106,316) Total primary government expense (36,507,371 ) (48,075,493) (43,753,050) (51,921,250) General revenues and other changes in net assets Governmental activities: Property taxes 37,624,392 39,936,976 40,302,810 40,666,758 Payment in lieu of taxes 113,575 135,000 186,500 160,457 Excise taxes 4,091,505 4,306,055 4,358,409 4,752,852 Franchise taxes 233,874 225,224 265,598 274,986 Unrestricted grants and contributions 4,059,770 4,512,720 4,487,931 4,773,082 Unrestricted investment earnings 377,113 296,857 519,225 699,417 Indirect cost charges 557,165 483,439 472,056 Miscellaneous 598,515 131,733 8,353 32,550 Transfers (798,618) (948,416) (837,806) (861,290) Total governmental activities 46,857,291 49,079,588 49,763,076 50,498,812 Business-type activities: Unrestricted investment earnings 1,097,155 206,665 895,064 635,454 Transfers 798,618 948,416 837,806 861,290 Total business-type activities 1,895,773 1,155,081 1,732,870 1,496,744 Total primary government 48,753,064 50,234,669 51,495,946 51,995,556 Change in net assets Governmental activities 4,595,432 2,287,156 4,381,297 1,683,878 Business-type activities 7,650,261 (127,980) 3,361,599 (1,609,572) Total primary government $ 12,245,693 $ 2,159,176 $ 7,742,896 $ 74,306 Only seven years have heen presented because 2003 was the year GASH Statement No. 34 was implemented. Continued from previous page III - 4 Table 2 (con't) 2007 2008 2009 $ (47,547,762) $ (44,845,469) $ (66,879,356) (1,756,584) (2,701,326) (2,003,100) (49,304,346) (47,546,795) (68,882,456) 41,702,775 43,775,938 46,977,792 145,000 122,510 141,595 4,668,614 4,641,320 4,752,005 296,566 300,768 322,526 4,968,217 5,520,774 5,260,439 1,183,796 1,274,939 874,824 260,733 161,439 93,967 (871,864) (539,088) (739,179) 52,353,837 55,258,600 57,683,969 1,346,799 1,326,787 1,025,098 539,088 539,088 739,179 1,885,887 1,865,875 1,764,277 54,239,724 57,124,475 59,448,246 4,806,075 10,413,131 (9,195,387) 129;303 (835,451) (238,823) $ 4,935,378 $ 9,577,680 $ (9,434,210) Table 3 CITY OF BANGOR, MAINE Governmental Activities Tax Revenues By Source Last Ten Fiscal Yean (accrual basis of accounting) Fiscal Year 2003 2004 200S 2006 2007 2008 2009 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 Excise taxes 4,091,505 4,306,055 4,358,409 4,752,852 4,668,614 4,641,320 4,752,005 Franchise taxes 233,874 225,224 265,598 274,986 296,566 300,768 322,526 Total tax revenues $ 41,949,771 $ 44,468,255 $ 44,926,817 $ 45,694,596 $ 46,667,955 $ 48,718,026 $ 52,052,323 Only seven years have been presented because 2003 was the year GASB Statement No. 34 was implemented. 1II - 5 General Fund: Reserved Unreserved Total general fund AU other governmental funds: Reserved Unreserved, reported in Special revenue funds Capital projects funds Permanent funds Total all other governmental funds 2000 2001 $ 2,907,605 $ 2,314,524 $ 10,868,363 13,022,1l3 CITY OF BANGOR, MAINE Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) 2002 2003 2004 2,204,855 $ 2,692,524 $ 2,571,692 $ 15,412,411 14,575,433 ll,184,543 2005 2,427,099 10,676,570 $ 13,775,968 $ 15,336,637 $ 17,617,266 $ 17,267,957 $ 13,756,235 $ 13,103,669 $ 969,162 $ 1,143,738 $ 1,836,653 $ 5,229,243 $ 2,599,271 $ 2,358,441 (315,560) (346,598) 1,029,775 2,080,184 1,997,434 1,810,747 1,173,695 538,858 4,622,212 (488,844) 4,211,800 3,658,954 864,739 812,694 539,666 500,558 424,802 370,308 $ 2,692,036 $ 2,148,692 $ 8,028,306 $ 7,321,141 $ 9,233,307 $ 8,198,450 ill-6 Table 4 2006 2007 2008 2009 $ 2,188,819 $ 2,366,032 $ 2,637,120 $ 2,537,173 10,828,439 ll,438,1l4 ll,602,190 12,922,086 $ 13,017,258 $ 13,804,146 $ 14,239,310 $ 15,459,259 $ 3,832,469 $ 2,015,620 $ 8,081,884 $ 7,062,990 2,215,929 2,663,736 5,005,121 6,981,927 925,634 1,735,231 469,554 1,528,537 350,222 361,879 399,223 440,634 $ 7,324,254 $ 6,776,466 $ 13,955,782 $ 16,014,088 TableS CITY OF BANGOR, MAINE Cbanges in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) Fiscal Year 2003 2004 200S 2006 2007 2008 2009 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 Excise taxes 4,091,505· 4,306,055 4,358,409 4,752,852 4,668,614 4,641,320 4,752,005 Total tax revenues 43,352,646 44,081,007 44,944,538 45,854,637 46,814,526 48,409,234 51,865,581 Intergovernmental 30,627,927 31,617,135 34,484,238 37,714,682 37,774,922 41,345,956 41,123,520 Ucenses and permits 409,842 374,499 655,745 538,534 982,879 956,965 644,621 Charges for services 10,151,637 11,035,587 12,160,573 12,927,989 12,598,776 13,283,275 13,449,587 Program income 583,569 463,066 409,153 663,269 657,987 296,325 288,677 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 Other 1,612,518 142,311 168,452 526,360 279,261 7,691,463 428,220 Total revenues 88,158,721 88,876,401 94,078,658 100,575,283 102,730,339 115,795,574 111 ,636,860 Expenditures: General government 4,223,670 4,619,401 4,732,331 4,642,935 4,736,885 5,122,152 5,103,378 Public safety 11,018,419 12,001,813 12,352,418 12,852,119 13,476,656 14,162,638 14,400,420 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 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 Other agencies 3,157,861 3,273,003 3,514,658 3,610,935 3,783,720 4,227,552 4,294,283 Education 39,428,576 40,341,426 42,228,691 44,817,879 45,224,974 48,293,846 50,380,309 Tax increment financing 215,483 Unclassified 327,812 389,598 65,639 263,702 597,262 166,994 63,115 Restricted grants 6,510,909 6,822,298 7,282,380 8,248,872 7,787,297 9,098,706 8,360,660 Capital outlay' 8,794,651 10,675,201 8,681,772 11,762,832 9,100,357 8,038,242 16,118,777 Debt service Principal 5,730,088 2,232,944 4,110,250 2,748,866 4,237,096 2,044,428 2,136,415 Interest 3,299,332 3,080,468 3,120,028 3,098,248 3,095,434 2,436,120 2,373,922. • Other charges 10,028 5,570 37,467 5,070 4,850 299 6,000 Total expenditures 93,609,179 95,102,674 98,293,060 105,128,079 105,494,409 107,803,445 117,915,974 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) Other financing sourcesJ(uses) General obligation debt 4,397,511 5,443,400 2,650,000 4,333,000 3,555,000 3,100,000 Financing proceeds 7,091,928 Sale of assets 232,259 131,773 106,895 120,479 320,034 161,439 104,620 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) 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 Total other financing sources 3,831,152 4,626,757 1,919,089 3,592,189 3,003,170 (377,649) 9,557,369 Net change in fund balances $ (1,619,306) $ (1,599,516) $ (2,295,313) $ (960,607) $ 239,100 $ 7,614,480 $ 3,278,255 Debt service as a percentage of noncapital expenditures 11.17% 6.30% 8.27% 6.08% 7.74% 4.45% 4.09% Only seven years have heen presented because 2003 was the year GASB Statement No. 34 was implemented. • Capital outlays under the modified accrual basis differ from capital outlays on tbe statement of activities due to capita1ization thresbolds and budgetary requirements. III -7 Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 * CITY OF BANGOR, MAINE Assessed Value and Estimated Actual Value of Taxable Property* Last Ten Fiscal Years Real Property Estimated Estimated Residential Commercial 782,055,600 485,097,500 815,027,500 499,936,900 841,857,900 504,871,000 896,351,100 516,447,000 922,374,500 549,399,100 990,170,000 618,388,000 1,091,628,800 713,822,300 1,178,745,758 785,599,342 1,275,227,064 875,870,136 1,219,093,120 1,081,082,580 It is City policy to assess at 100% of estimated actual value. Personal Property consists of machinery and equipment Personal Property! 208,423,500 222,823,400 241,682,200 278,430,400 268,555,600 259,687,300 254,225,800 259,703;500 254,991,600 244,740,100 ill-8 Total Taxable Assessed Value 1,475,576,600 1,537,787,800 1,588,411,100 1,691,228,500 1,740,329,200 1,868,245,300 2,059,676,900 2,224,048,600 2,406,088,800 2,544,915,800 Table 6 Total Direct Tax Rate 22.79 22.54 22.78 22.52 22.27 20.97 19.31 18.33 17.74 17.99 Table 7 CITY OF BANGOR, MAINE Property Tax Rate -Direct and Overlapping Governments Last Ten Fiscal Years General General Fiscal City Fund Debt Penobscot Total Taxi Year Government Service Education County (Mill) Rate 2000 9.73 0.97 12.09 0.91 23.70 2001 9.64 1.01 11.89 0.91 23.45 2002 9.81 0.73 12.24 0.97 23.75 2003 9.51 0.74 12.27 1.08 23.60 2004 9.26 0.79 12.22 1.08 23.35 2005 8.20 1.18 11.59 1.08 22.05 2006 7.97 1.14 10.20 1.09 20.40 2007 7.79 1.18 9.36 1.07 19.40 2008 7.69 1.18 8.87 1.06 18.80 2009 8.12 1.16 8.71 1.06 19.05 ill-9 TableS CITY OF BANGOR, MAINE Principal Property Taxpayers * June 30, 2009 2009 2000 Assessed % of Total Assessed % of Total Taxl!al:er Business Value Rank Tax Base Value Rank Tax Base Bangor Historic Track Racino $ 132,438,500 5.20% General Electric Manufacturer 73,480,400 2 2.89% $ 59,989,700 4.07% Bangor Mall LLC Shopping mall 57,040,200 3 2.24% Bangor Hydro Electric Utility 35,631,500 4 1.40% 24,466,200 3 1.66% Bangor Savings Bank Financial institution 17,739,400 5 0.70% Wal Mart Stores Retailer 16,806,500 6 0.66% 9,089,848 6 0.62% QV Realty Trust Real estate interests 16,646,200 7 0.65% Home Depot U.S.A. Inc Retailer 15,747,200 8 0.62% Inland Western Parkade Shopping mall 15,192,200 9 0.60% Harvest Sunbury Village Retirement Living 14,374,600 10 0.56% BANMAK Associates Shopping mall 56,167,400 2 3.81% Webber Oil Company Fuel distributor 12,216,455 4 0.83% Cabrel Company Real estate interests 10,273,200 5 0.70% Credit Suisse Leasing Leasing/finance 7,869,278 7 0.53% Fleet Bank of Maine Commercial bank 7,072,800 8 0.48% Airport Mall Associates Shopping mall 7,069,600 9 0.48% Stillwater Realty Trust Real estate interests 6,668,400 10 0.45% Totals $ 395,096,700 15.52% $ 200,882,881 13.63% * Source -City of Bangor Tax Commitment III-IO Table 9 CITY OF BANGOR, MAINE Property Tax Levies and Collections Last Ten Fiscal Years Collected within the %of Fiscal Year of the Levy 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 2000 34,069,975 246,152 33,823,823 32,809,377 97.00% 977,618 33,786,995 99.89% 2001 35,283,733 258,412 35,025,321 33,930,930 96.88% 1,046,288 34,977,218 99.86% 2002 36,893,245 208,211 36,685,034 35,633,029 97.13% 946,770 36,579,799 99.71% 2003 39,081,183 311,677 38,769,506 37,785,056 97.46% 881,563 38,666,619 99.73% 2004 39,866,850 172,868 39,693,982 38,589,047 97.22% 1,003,473 39,592,520 99.74% 2005 40,474,184 160,117 40,314,067 39,206,172 97.25% 1,010,378 40,216,550 99.76% 2006 41,099,990 632,397 40,467,593 39,716,755 98.14% 625,751 40,342,506 99.69% 2007 41,990,985 269,636 41,721,349 40,819,923 97.84% 763,339 41,583,262 99.67% 2008 44,082,476 341,521 43,740,955 42,847,656 97.96% 487,364 43,335,020 99.07% 2009 47,235,370 275,489 46,959,881 45,688,536 97.29% 45,688,536 97.29% ill-ll Table 10 CITY OF BANGOR, MAINE Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities Business-tyee Activities General General Total Ratio of Net Bonded Debt Fiscal Obligation Capital Obligation Revenue Primary Per -Per Personal Year Bonds Leases Bonds Bonds Government Caeita* Income* 2000 $ 21,909,832 293,503 38,018,202 4,710,000 64,931,537 2,073.76 Data not available 2001 $ 22,806,350 223,910 37,931,078 4,465,000 65,426,338 2,078.81 Data not available 2002 $ 59,135,992 150,353 42,386,491 4,205,000 105,877,836 3,351.09 11.27% 2003 $ 57,669,023 326,159 47,854,061 105,849,243 3,355.93 11.28% 2004 $ 60,879,479 3,491 47,994,390 108,877,360 3,450.95 11.60% 2005 $ 59,419,229 46,774,080 106,193,309 3,361.08 11.30% 2006 $ 61,003,363 45,781,229 106,784,592 3,436.46 11.56% 2007 $ 60,321,264 43,809,953 104,131,217 3,358.20 11.29% 2008 $ 56,998,022 41,722,545 98,720,567 3,099.25 lQ.42% 2009 $ 56,687,684 7,091,928 37,623,522 101,403,134 3,193.20 10.74% Source: Maine Department of Human Services, Maine State Planning Office and City of Bangor (2000) and U.S. Census Bureau (2001 through 2009). III -12 Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 * ** CITY OF BANGOR, MAINE Ratio of Net General Obligation Debt to Assessed Value and Net General Obligation Debt Per Capita Last Ten Fiscal Years Table 11 Ratio of Net Bonded Debt Assessed Net Bonded Assessed Per Population* Value GO Debt** Value Capita 31,311 1,475,576,600 27,713,328 1.88% 885.10 31,473 1,537,787,800 30,434,229 1.98% 966.99 31,595 1,588,411,100 66,818,681 4.21% 2,114.85 31,541 1,691,228,500 65,323,120 3.86% 2,071.05 31,550 1,740,329,200 69,638,974 4.00% 2,207.26 31,595 1,868,245,300 65,988,998 3.53% 2,088.59 31,074 2,059,676,900 66,990,510 3.25% 2,155.84 31,008 2,224,048,600 65,725,523 2.96% 2,119.63 31,853 2,406,088,800 61,824,071 2.57% 1,940.92 31,756 2,544,915,800 60,937,500 2.39% 1,918.93 Source: Maine Department of Human Services, Maine State Planning Office and City of Bangor (2000) and U.S. Census Bureau (2001 through 2009). Net Bonded General Obligation Debt Consists of all non-self supporting general obligation debt, and excludes all Sewer Utility debt of $21,768,039, Airport debt of $6,979,515, Golf Course debt of $597,284 and Economic Development debt of $4,028,868. ill-13 Direct Debt City of Bangor CITY OF BANGOR, MAINE Computation of Direct and Overlapping Debt June 30, 2009 Total Debt Outstanding Percentage Applicable to Bangor General Obligation Bonds $ 94,311,206 100.00% Overlapping Debt $ Total Debt $ 94,311,206 ill-14 Table 12 Amount Applicable to Bangor $ 94,311,206 $ $ 94,311,206 CITY OF BANGOR, MAINE Legal Debt Margin Information Last Ten Fiscal Years Total Net Debt Legal Fiscal Debt Applicable to Debt Year Limit Limit Margin 2000 $ 215,017,500 59,928,034 155,089,466 2001 $ 225,630,000 64,737,428 160,892,572 2002 $ 240,937,500 101,522,483 139,415,017 2003 $ 241,387,500 105,523,084 135,864,416 2004 $ 261,240,000 108,873,869 152,366,131 2005 $ 279,202,500 106,193,307 173,009,193 2006 $ 309,495,000 106,784,592 202,710,408 2007 $ 332,092,500 104,131,217 227,961,283 2008 $ 353,737,500 98,720,567 255,016,933 2009 $ 356,670,000 94,311,206 262,358,794 Legal Debt Margin Calculation for Fiscal Year 2009 Total State Valuation Debt Limitation: 15 % of State Valuation Debt Applicable to Debt Limitation: General Obligation Bonds: Municipal School Sewer Total debt applicable to limit Legal Debt margin ill-15 Table 13 Percentage of Net Debt to Debt Limit 27.87% 28.69% 42.14% 43.72% 41.68% 38.03% 34.50% 31.36% 27.91% 26.44% $ 2,377,800,000 356,670,000 64,245,165 8,298,002 21,768,039 94,311,206 $ 262,358,794 Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 * ** *** CITY OF BANGOR, MAINE Demographic and Economic Statistics Last Ten Fiscal Years Median Household Population * Income* 31,311 Data not available 31,473 Data not available 31,595 29,740 31,541 29,740 31,550 29,740 31,595 29,740 31,074 29,740 31,008 29,740 31,853 29,740 31,756 29,740 Source: u.S. Census Source: Bangor School Department Source: Bureau of Labor Statistics Per Capita Income* Data not available Data not available 19,295 19,295 19,295 19,295 19,295 19,295 19,295 19,295 ill-16 Median Age* Data not available Data not available 36.1 36.1 36.1 36.1 36.1 36.1 36.1 36.1 Table 14 Public Unemploy- School ment Enrollment** Rate *** 4,281 2.85% 4,316 3.01% 4,205 3.12% 4,019 3.40% 4,006 4.30% 3,989 4.50% 3,962 4.40% 3,913 4.40% 3,886 5.10% 3,878 7.80% Employees 1000-2999 500-999 * 2009 Employer Eastern Maine Medical Center Bangor Mall University of Maine City of Bangor Hannaford Supermarkets Cianbro Corporation Wal-Mart Bangor Savings Bank L.L. Bean Microdyne Acadia Hospital Verso Corp Paper Mill S1. Joseph Hospital CITY OF BANGOR, MAINE Principal Employers * June 30, 2009 Location Employees Bangor 1000-2999 Bangor Orono Bangor Throughout 500-999 Throughout Throughout Bangor Bangor Orono Bangor Bucksport Bangor Source -Bangor, Maine Community & Economic Profile Report 2000 Employer Eastern Maine Medical Center Bangor Mall University of Maine City of Bangor Community Health/Counseling S1. Joseph Hospital Webber Energy Co Georgia Pacific Corp General Electric Corp Shop & Save Supermarkets Published by City of Bangor Community and Economic Development Department ill-I7 Table 15 Location Bangor Bangor Orono Bangor Bangor Bangor Bangor Old Town Bangor Throughout Table 16 CITY OF BANGOR, MAINE Full-time Equivalent City Government Employees by Function* Last Ten Fiscal Years Full-time Equivalent Employees as of June 30th 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Function General government 90 92 93 91 90 87 88 94 85 80 Public safety Police 79 85 86 89 86 87 89 90 87 92 Fire 98 97 95 95 97 96 97 94 97 94 Health, community services and recreation 78 33 34 33 31 31 32 39 41 37 Public building and services 62 63 66 68 67 64 68 71 67 69 Education 580 583 574 574 561 571 573 562 618 618 Sewer Utility 24 23 23 23 23 23 23 23 23 23 Airport 75 76 82 72 73 75 76 81 87 88 Park Woods 3 3 3 3 3 3 3 3 3 3 Parking 1 1 2 2 2 2 2 2 2 2 Bass Park 10 10 9 9 8 9 9 9 7 8 Municipal Golf Course 3 3 3 3 3 3 3 9 3 3 Economic Development 2 2 3 2 3 3 3 3 3 2 Totals 1,105 1,071 1,073 1,064 1,047 1,054 1,066 1,080 1,123 1,119 * Source -City of Bangor Human Resource Department III -18 Function Code enforcement Building permits Certificates of occupancy Sign permits Police Calls for service Fire Calls for service Sewer * Treated flow (billions of gallons) Biosolids (cubic yards) Source -City of Bangor Departmental records 1999 2000 509 494 388 354 120 129 Unavailable Unavailable Unavailable Unavailable 3.02 3.04 8,519 8,272 CITY OF BANGOR, MAINE Operating Indicators by Function* Last Ten Calendar Years Calendar Year 2001 2002 2003 2004 471 474 522 514 295 358 342 341 85 96 98 107 Unavailable 22,213 24,407 23,945 Unavailable 7,528 7,470 7,805 2.63 3.14 3.42 2.75 8,683 8,308 9,379 9,280 ill-19 Table 17 2005 2006 2007 2008 537 550 485 501 432 446 430 440 115 116 118 103 27,052 28,157 32,392 34,329 7,492 7,992 7,477 7,990 4.23 3.62 3.21 3.89 9,348 9,775 10,043 10,561 2003 Function Public safety Police: Stations Vehicles 42 Fire: Stations 3 Vehicles 25 Public works Streets (miles) 422 Sidewalks (miles) 99.6 Parks and recreation Parks 29 Parks acreage 950 Public swimming pools Public golf courses 1.5 Indoor ice arena Semi-pro baseball stadium Sewer Treatment plants 1 Pump stations 5 Miles of sanitary sewers 103 Miles of combined sewers 44 CITY OF BANGOR, MAINE Capital Asset Statistics by Function· Last Ten Fiscal Years Fiscal Year 2004 2005 2006 1 56 57 51 3 3 3 20 20 24 422 422 422 99.6 99.6 99.6 29 29 29 950 950 950 2 2 2 1.5 1.5 1.5 1 1 1 5 5 5 103 103 103 44 44 44 Only seven years have been presented because 2003 was the year GASB Statement No. 34 was implemented. * Source -City of Bangor Departmental records ill-20 Table 18 2007 2008 2009 1 1 1 52 47 50 3 3 3 27 28 31 422 427 429 99.6 99.6 99.6 29 29 29 950 950 950 2 2 2 1.5 1.5 1.5 1 1 5 5 5 103 103 103 44 44 44