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City of Seward Comprehensive Annual Financial Report FY Ended Dec 31, 2000
CITY OF SEWARD COMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Year | Ended December 31,2000 COMPREHENSIVE ANNUAL FINANCIAL REPORT of the CITY OF SEWARD,ALASKA For the Fiscal Year Ended December 31,2000 Edgar Blatchford MAYOR W.Scott Janke CITY MANAGER Prepared by the Finance Department Kristin M.Erchinger,CGFM,MPA FINANCE DIRECTOR THIS PAGE LEFT BLANK INTENTIONALLY PARTI INTRODUCTORY SECTION Table of Contents Letter of Transmittal Certificate of Achievement for Excellence in Financial Reporting List of Principal Officials Organizational Chart CITY OF SEWARD Organizational Chart Citizens | Mayor & Council | Boards & Commissions Fj Planning & Zoning _) Port & Commerce ns| Historic Preservation | City Manager City Clerk City Attorney Finance Engineering & Utilities Library Harbor XXII Community Development Parks & Recreation CITY OF SEWARD LIST OF PRINCIPAL OFFICIALS Council Members Edgar Blatchford Charles D.Brossow Stu Clark Jerry King Vanta Shafer Nathan Orr Michael Calhoon Administration W.Scott Janke Kristin M.Erchinger David Calvert James Beckham Michael Chapman David Squires Karin J.Sturdy Patty Linville City Clerk Department Patrick Reilly Attorney Brad Meyen of Wohlforth,Vassar,Johnson &Brecht Mayor Vice Mayor Council Member Council Member Council Member Council Member Council Member City Manager Finance Director Mgr.Engineering and Utilities Harbormaster Chief of Police Fire Chief Parks &Recreation Director Library Director City Clerk City Attorney Certificate of Achievement for Excellence in Financial Reporting Presented to City of Seward, Alaska For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 31,1999 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs)achieve the highest standards in government accounting and financial reporting. aeaDirector Financial Reporting Award 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 Seward for its Comprehensive Annual Financial Report (CAFR)for the fiscal period ended December 31,1999.This is the seventh consecutive reporting period for which the City has received this prestigious award. The Certificate of Achievement is a national award recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement,a government unit must publish an easily readable and efficiently organized comprehensive annual financial report,with contents conforming to program standards.The CAFR 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 our current Comprehensive Annual Financial Report continues to conform to the Certificate of Achievement program requirements,and we are submitting it to the GFOA to determine its eligibility for another certificate. Acknowledgments Preparation of the Comprehensive Annual Financial Report could not have been accomplished without the efficient and dedicated services of the entire staff of the finance department.We would like to express our appreciation to all members of the Finance Department who assisted and contributed to the preparation of this report.Due credit also should be given to the mayor and the members of council for their interest and support in planning and conducting the operations of the City of Seward in a responsible and progressive manner. Respectfully submitted, W/L:Sisctinyin trehing0 W.Scott Jank Kristin M.Erchinger City Manager Finance Director while the Electric Enterprise Fund witnessed a 1%reduction in operating revenues of $71,104.It should be noted that FY2000 was the first full year in which the City of Seward collected parking fees without assistance from a private contractor.This year is expected to serve as a baseline for estimating the level of future parking lot revenues.Since the FY1999 financial statements present the Harbor Enterprise Fund and the SMIC Enterprise Fund as one fund,it is not possible to compare the performance of these individual funds across the two years. Operating expenses in the proprietary funds increased $615,112 (9.1%)compared with FY1999 (and $3,859,043 or 111.70%from Six-Month 1999).The Electric Enterprise Fund saw expenses increase by $514,633 (12.3%)over FY1999.The majority of the increase in Electric operating expenses is the increased power costs resulting from higher costs of fuel.The cost of power rose nearly $368,000 from FY1999,representing an increase of 15.8%.The Water and Sewer Enterprise Fund operating expenses increased by $219,931 (27.0%)compared with FY1999 ($557,157 or 117.4%compared with Six-Month 1999).The Parking Enterprise Fund saw a slight reduction in operating expenses of$1,221 (1.4%)compared with the full previous fiscal year of FY1999,but an increase of $52,482 (156.6%)when compared with Six-Month 1999.Once again,it is not possible to compare the performance of the Harbor and SMIC Enterprise Funds across full fiscal years,since FY2000 represents the first full year in which the two funds appeared individually in the financial statements. Risk Management The City is a member of the Alaska Municipal League Joint Insurance Association (JIA),a government insurance pool established by the Alaska Municipal League.The JIA provides the City coverage for property,including building and contents,automobiles,mobile equipment and data processing equipment;casualty,including general liability,public officials and employees liability, law enforcement professional liability,auto liability and employee benefit liability;workers' compensation,including employers liability;commercial blanket bond;and time element.The City also maintains special marine insurance coverages and boiler and machinery insurance coverages with insurance companies placed through JIA.The JIA provides loss control services and conducts periodic inspections to ensure safe operations.The City maintains a safety committee charged with reviewing and recommending safety policies and procedures for all departments.The City Council designates a portion of the General Fund balance to meet potential losses related to the JIA basic core coverages and the law enforcement liability pool (LELP).At December 31,2000,the amount of fund balance designated for insurance reserves is $431,138,an increase of $95,360 from the prior year. The LELP was established by the JIA as a separate insurance pool for law enforcement (police and jail)professional liability coverage. Independent Audit The City Charter and Section 29.35.120 of the Alaska State Statutes both require an annual independent audit of the accounts and financial transactions of the City,by a certified public accountant.The accounting firm of Mikunda,Cottrell &Co.was selected by the City Council,to perform the annual audit for FY2000.The auditor's report on the general purpose financial statements is included in the financial section of this report,and the reports related to the single audit is found in the single audit section.The combining,individual fund and account group financial statements and schedules are presented for the purpose of additional analysis. XVI The City maintains several lease purchase agreements for the financing of a sand truck,motor grader,pumper truck,rescue truck,and a 250-ton boat travelift.The lease agreements qualify as capital leases for accounting purposes (titles transfer at the end of the lease terms)and have therefore been recorded as capital leases. Cash Management The investment and collateralization of City funds is governed by Section 5.15 of the Seward City Code.The ordinance clearly identifies safety as the primary concern in the selection and management of the City's investments.The City combines all its cash into a Central Treasury,facilitating the investment of combined funds to maximize investment earnings.Earnings on these investments are allocated monthly to the funds supplying the resources for investment. Total City cash and investments at December 31,2000 were as follows: Cash on hand $2,000 Deposits (333,087) Investments 17,698,810 Total City cash and investments $17,367,723 Deposits (cash carried on the City's books)are minimized each day,as management sweeps available cash into an overnight bank instrument investing in repurchase agreements (represented in the investment figure above).Cash temporarily idle during the year was invested in short-term time deposits,repurchase agreements and government agency securities.The amount of interest earned by governmental and proprietary funds in the fiscal year ended December 31,2000,was $1,044,086, an increase of $429,924 from the prior year,resulting from higher cash balances available for investment. Enterprise Operations Enterprise Funds account for operations that are financed and operated in a manner similar to private business enterprises,where the costs of providing services to the general public on a continuing basis are financed or recovered primarily through user charges.The City's Enterprise Funds provide electric,water,sewer,harbor,and public parking services.In Six-Month 1999,a new Enterprise Fund was created by separating the Seward Marine Industrial Center out of the Harbor Enterprise Fund,creating two separate Enterprise Funds. Utility revenues are based on monthly cycle billings.As a result of this cycle billing method,the utilities do not accrue revenue at the end of any fiscal period for services sold but not yet billed. Instead,revenues are recognized in the period billed. Interfund charges by the General Fund include administrative expenses and payments in lieu of tax. Administrative expenses are the direct result of an indirect cost allocation plan,and payments in lieu of tax are calculated based on 8%of Enterprise Fund operating revenue. Operating revenues in the proprietary funds -including enterprise funds and internal service funds -- increased $178,804 (1.7%)from FY1999.Compared with Six-Month 1999,operating revenues increased $5,031,997 or 96.8%.Operating revenues increased $106,134 (7.8%)in the Water and Sewer Enterprise Fund compared with FY1999,and $30,930 (34.1%)in the Parking Enterprise Fund, XVII under budget by $116,004,with $84,193 of the savings attributed to personnel shortages in the police and jail departments alone.Overall,General Fund expenditures for the year totaled $5,719,356. General Fund Balance The General Fund year-end fund balance totaled $4,697,463,representing an increase of $1,084,201 from the prior year's fund balance of $3,613,262.This 30%increase in fund balance improves the City's ability to meet unforeseen needs and emergencies,as well as to continue to provide quality services to the community.This increase in fund balance resulted from revenues exceeding budget by $1,410,743,and expenditures coming in under budget by $355,844.These surpluses were offset by net transfers to other funds of approximately $1.1 million. In addition to improving the City's fund balance position,the amount set aside for insurance reserves --to protect against future insurance claims and to reduce insurance deductibles --increased by $95,360,from $335,778 to $431,138.The amount that is generally considered to be available for future appropriations is known as "undesignated fund balance”.During FY2000,undesignated fund balance increased by $1,545,021 or 151.7%,from $1,018,331 to $2,563,352. Debt Administration At December 31,2000,the City's outstanding principal on all bonded debt totals $17,935,000 (see pages 25 and 26).The City maintains two forms of bonded debt.The first type is the general obligation bond which is backed by the full faith and credit of the City.The second type is the revenue bond which is backed by the revenues of a particular business-like or Enterprise Fund. Of the outstanding bonded debt carried on the books,$11,935,000 is in the form of general obligation bonds.Of this total,$3,421,722 is recorded in the Enterprise Funds which benefit from the proceeds of said bonds,and include:1980 electric bonds;1993 refunding of 1986 electric bonds;and the 1987 Seward Marine Industrial Center bonds.The revenues from Enterprise Funds are the intended source of repayment for these bonds.The 1980 electric bonds will be retired in January,2001.The remaining $8,513,278 in general obligation bonds include bonds for construction of the Community Center in 1987,the 1990 street and sidewalk issue,and construction of a hospital facility in 1996. These bonds are intended to be repaid through general tax revenues. The remaining $6,000,000 in City bonds are revenue bonds,including $3,000,000 in harbor revenue bonds issued in December,2000,for the replacement of floats and fish cleaning stations in the small boat harbor;and $3,000,000 remaining on the 1995 bonds issued to construct the electric transmission line from Mile 3 to Mile 24 of the Seward Highway.The source of repayment for the electric bonds is the Electric Enterprise Fund,and these bonds are slated to be paid off in June,2015.The source of repayment for the harbor bonds is the newly implemented passenger transit fee,a $1.50 fee per passenger carried on a harbor charter,fishing trip,or bay tour.The harbor bonds are slated to be paid off in October,2021. The State of Alaska Department of Environmental Conservation (DEC)loaned the City $924,000 for restoration of the Lowell Point Sewage Lagoon and $26,231 for engineering studies to connect portions of the Dairy Hill area to the sewer system.The notes payable to the State of Alaska are presented in the Water and Sewer Enterprise Fund and the balances due at December 31,2000 are $695,483 and $18,361,respectively.Annual installments are made until November,2013 for the Lowell Point Sewage Lagoon loan and July,2014 for the Dairy Hill loan.In December,2000,the DEC revised the terms of these two loans,reducing the interest rates from 4.75%and 4.31%,to 2.5%. XVI The distribution of general government expenditures by function is represented in the following graph: Chart 3:General Government Expenditures by Major Function General,Special Revenue,Capital Project,and Debt Service Funds $8,037,555 Gen'l Gov't 19.9% Public Works 12.2%Debt Service 10.5% Parks &Rec.8.9%Capital Outlay 14.6% Library 3.1%Public Service 0.1% Compared with FY1999,overall general government expenditures in FY2000 --which includes the General,Special Revenue,Debt Service and Capital Projects Funds --rose 13.9%,or $985,278.The largest dollar changes came in the areas of public safety,rising $487,967 (24.7%),and capital outlay, rising $206,649 (21.3%).The increase in expenditures for public safety can be attributed primarily to the flood mitigation capital project and other public safety capital projects,which saw a $432,267 increase.Within the General Fund,public safety expenditures for police and fire rose $55,700 or 2.9%.The increase in expenditures for capital outlay is entirely related to an increase in the level of spending for capital projects.In both of these categories then,the increase is largely attributed to additional grant funds available to improve capital infrastructure,and to mitigate flooding. Compared with Six-Month 1999,overall general government expenditures in FY2000 rose 89.8%or $3,803,474.If Six-Month 1999 expenditures had been exactly half of a typical fiscal year,we would have expected FY2000 expenditures to be 100%more,or double,that of Six-Month 1999.For the most part,the reduction (where expenditures are 89.8%rather than 100%higher than the six-month period)in expenditures is due to the timing of expenditures for capital outlay,falling outside of the six-month period. General Fund Expenditures Total expenditures in the General Fund rose $357,735 or 6.6%from FY1999,not including transfers to other funds.Compared with Six-Month 1999,expenditures were up $2,664,983 or 87.2%. Expenditures for the General Fund were higher in FY2000 than FY1999,in all categories,as follows: general government up $50,105 or 3.2%;public safety up $55,700 or 2.9%;public works up $117,491 or 13.6%;parks and recreation up $114,205 or 19.1%;library up $17,828 or 7.8%;and debt service up $2,406 or 1.1%. Despite the rise in expenditures from the previous year,General Fund departments underspent budget appropriations by $355,844.Expenditures for general government came in $160,955 under budget,with $87,102 (54%)of the savings attributed to personnel turnover.Public safety came in XV increased in volume from 47 permits in FY1999 to 59 permits in FY2000,the value of the permits declined significantly,from $7,209,850 in FY1999 to $3,451,065 in FY2000,resulting in a $13,751 decrease in building permit revenue.Commissions from DMV revenues increased 25%or $13,469 from FY1999 to FY2000. Intergovernmental revenues,representing more than 18%of all general government revenues, showed an increase of $646,157 (63.3%)from FY1999,and compared with the Six-Month 1999 period, increased $738,580 or 79.5%.This increase is due primarily to an increase in state and federal capital grants,including $303,606 in FEMA grant funds to address flood mitigation.Intergovernmental revenues in the General Fund declined $36,978 (3.6%)from FY1999,primarily due to a $175,761 (51.7%)decline in state revenue sharing and safe communities funding.This decline was offset by an increase in raw fish tax revenue of $65,951 (33.3%)from FY1999. Revenues from charges for services,which represent approximately 24%of all general government revenues,experienced a net increase of $704,251 or 47.7%from FY1999.This represents a $1,254,111 (135.4%)increase from Six-Month 1999.The majority of this increase is due to an increase in administrative fees of $666,511 (71.8%)versus FY1999,which can be primarily attributed to project management fees associated with administering capital grants.Parks and recreation revenues continue to rise,showing an increase of $30,806 (8.4%)from FY1999,and an increase of $135,051 (51.7%)from Six-Month 1999.This increase is attributed to camping fees associated with an increase in visitors to the City's campgrounds., Fines and bails experienced a 14.7%decrease compared with FY1999 (coming in 37.5%higher than the Six-Month 1999),bringing in $14,786.Investment income rose by $223,865 or 104.5%from FY1999 (and was $333,286 higher than Six-Month 1999),bringing in $438,005.This increase is due primarily to higher Governmental Fund cash balances available for investment.The cash balance in Governmental Funds rose from $4,067,207 at December 31,1999 to $5,704,702 at December 31, 2000. General Government Expenditures Expenditures for general government purposes totaled $8,037,555 in FY2000,representing an increase of $985,278 or 13.9%from FY1999 (and an increase of $3,803,474 or 89.8%from Six-Month 1999).Increases and decreases in expenditure levels for major functions of the City are compared with both FY1999 and Six-Month 1999 in the following table: Table 2:Expenditure by Major Function for all Governmental Fund Types Dollar Increase Percent Increase Dollar Increase Percent Increase (Decrease)(Decrease)(Decrease)(Decrease) Percent from from from from Major Function Amount ofTotal Six-Month 1999 Six-Month 1999 FY1999 FY1999 General Government $1,601,677 19.9%$735,360 84.9%$32,405 2.0% Public Safety $2,463,209 30.6%$1,367,031 124.7%$487,967 24.7% Public Works $981,027 12.2%$490,568 100.0%$117,491 13.6% Parks and Recreation $715,409 8.9%$317,258 79.7%$112,168 18.5% Library $251,865 3.1%$134,309 114.3%$16,983 7.2% Public Service $6,614 0.1%($204,750)-96.9%($37,115)84.8% Debt Service $840,997 10.5%$270,939 47.5%$48,730 6.1% Capital Outlay $1,176,757 _146%__$602,759 __43.1%__$206,649 ___-24.3%Totals:8.037,555___100.0%3.803.474 89.8%985.278 13.9% XIV Tax Revenues In FY2000,overall tax revenues,which represent approximately 44%of all general government revenues,increased $368,750 or 10.2%from FY1999,with most tax categories experiencing increases. The Kenai Peninsula Borough bills and collects all property and sales taxes on behalf of the City.In FY2000,general property tax revenues,which includes real and personal property tax,produced $694,332,compared to $523,993 in FY1999,and $515,544 in Six-Month 1999.This represents a 32.5%increase from the prior full year,and is attributed to the fact that the Kenai Peninsula Borough conducted a full assessment of area-wide properties,bringing them more in line with market values, and resulting in increased property tax revenues.Property taxes attach as an enforceable lien on property as of January 1,with taxes being levied on July 1,and are payable in two installments,on August 15 and November 15.Property tax revenues for FY2000 are based on 1999 property assessments. Sales tax revenues produced $2,197,561 in FY2000,compared to $2,029,485 in FY1999,and $1,197,288 in Six-Month 1999.This represents an increase of $168,076,or 8.3%from the previous full fiscal year.A full one-third of the City's sales tax revenues are transferred to the Hospital Debt Service Fund to satisfy debt service obligations on $7.5 million in hospital bonds.Payments in lieu of tax (PILT)increased to $844,583 in FY2000,up $19,523 from FY1999 (2.3%),and $425,475 (101.5%)from Six-Month 1999.PILT is primarily collected from the City's business-like Enterprise Funds,which contribute 8%of operating revenues to the General Fund to offset the loss of taxes that would be generated by similar privately-owned enterprises.In addition,the Alaska SeaLife Center contributes PILT based on 3%of sales,amounting to $55,974 in FY2000.The final source of tax revenue is a 4%hotel/motel room tax which brought in $212,619 in FY2000,representing an increase of $49,289 (30.2%)from FY1999,or $90,371 (73.9%)from Six-Month 1999.This increase is attributed to an increase in the number of hotel beds resulting from new hotel construction and renovations. The following chart shows the distribution of the various categories of tax revenues: Chart 2:General Fund Tax Revenue by Category General Fund -$3,953,139 Sales Tax 55.6%Property Tax 17.6% ",|64FPenalties/interest 0.1%eg Bed Tax 5.4% PILT 21.4% Other Non-Tax Revenues Other governmental-type revenues include license and permit fees which declined $4,133 (2.9%)from FY1999 (but increased $66,156 or 89.7%from Six-Month 1999),bringing in $139,871.Included in license and permit fees are business licenses,building permits,and division of motor vehicles revenues.Business license revenues declined 16%due primarily to a reduction in the number of bed and breakfasts,as well as fewer reported rentals of personal property.While building permits XI Compared with Six-Month 1999,revenues increased $4,556,166 or 101.7%.The majority of this increase is attributed to the General Fund,with General Fund revenues rising $1,282,059 or 19.2% from FY1999.The following table reflects the major sources of revenue and compares the increase or decrease to both Six-Month 1999 and FY1999: Tablel:Revenue Sources for all Governmental Fund Types Dollar Increase Percent Increase Dollar Increase Percent Increase (Decrease)(Decrease)(Decrease)(Decrease) Percent from from from from Revenue Source Amount of Total Six-Month 1999 Six-Month 1999 FY1999 FY1999 Taxes $3,953,139 43.7%$1,697,813 75.2%$368,750 10.2% Licenses &Permits $139,871 1.5%$66,156 89.7%($4,132)-2.8% Intergovernmental $1,667,366 18.5%$738,580 79.5%$322,856 24.0% Charges for Services $2,179,832 24.1%$1,254,111 135.9%$704,251 47.7% Fines and Bails $14,786 0.2%$4,038 37.5%($2,561)-14.7% Land Sales $0 0.0%$0 -100.0%($254,085)-100.0% Investment Income $484,089 5.4%$350,002 261.0%$212,233 78.0% Miscellaneous $596,664 6.6%=$445,466 294.6%$366,408 159.1% Totals:$9.035,747__100.0%$4,556,166 101.7%$1,713,720 23.4% The following graph identifies the major sources of general government revenue: Chart 1:Revenues Sources for all Governmental Fund Types General,Special Revenue,Capital Project,and Debt Service Funds $9,035,747 Taxes 43.7% o,ieintergovernmental18.5%All Other 8.3% investment Income 5.4% Charges for Services 24.1% General Fund Revenues In FY2000,General Fund total revenues exceeded budgeted projections by $1,410,743,helping to restore a declining General Fund balance.The primary reason for the degree to which revenues exceeded budget is that the City of Seward does not budget for project management fees received in the administration of capital grants.These revenues are considered to be one-time revenues and are therefore not programmed into the City's annual appropriations.Project management fees in FY2000 were $617,059,representing 43.7%of the surplus revenues.Tax revenues came in $267,892 over budget,representing 18.9%of the surplus.Investment income came in over budget by $274,505,due to conservative budget estimates and higher-than expected cash balances,representing 19.4%of the surplus. XI the Qutekcak Shellfish Hatchery,the Alaska Vocational Technical Center,and the construction of a multi-agency facility to accommodate the needs of the National Park Service and U.S.Forest Service. Financial Information The City's financial statements for governmental funds (General,Special Revenue,Capital Project, and Debt Service Funds)have been prepared on the modified accrual basis of accounting in conformity with generally accepted accounting principles.Revenues are recognized when measurable and available to finance current expenditures;expenditures are recognized when goods and services are received and liabilities are incurred.The City's proprietary or business-like funds (Enterprise Funds,Internal Service Funds)are accounted for on the accrual basis.Revenues on the accrual basis are recognized when earned;expenses are recognized when incurred. As a recipient of federal and state financial assistance,the City is responsible for ensuring that adequate controls exist to maintain and document compliance with applicable laws and regulations related to these programs.These internal controls are subject to periodic evaluation by management. As part of the single audit performed by the City's independent auditors,tests are made to determine the adequacy of the internal controls over financial reporting,including that portion related to federal and state financial assistance programs.The results of the City's single audit for the fiscal year ended December 31,2000,provided no instances of material weaknesses in internal controls,or significant violations of applicable laws and regulations. Each year,the City Council adopts an annual operating budget for the General Fund,Enterprise Funds,Internal Service Fund,and Debt Service Fund.The General Fund is the only Fund which is legally required to have an approved budget and budget appropriations.Capital Project Funds are generally budgeted on a project-length basis,rather than on an annual basis.In order to maintain compliance with the adopted budget,the City utilizes an electronic encumbrance accounting system and budgetary system.These systems provide managers with the tools to stay within their allocated budget.Throughout the year the budget can be revised one of two ways.The city manager is authorized to transfer amounts between line items within a department,and between departments within a fund.The City Council has further authority to,by resolution,transfer unencumbered balances between funds.Thus,the level of budgetary control (i.e.the level at which expenditures cannot legally exceed appropriations),is the fund level. General Government Revenues The reader is reminded that beginning July 1,1999,the City of Seward switched froma fiscal year beginning July 1,to a calendar year beginning January 1.For comparative purposes,we will compare the current fiscal year (January 1,2000 -December 31,2000)to both the interim fiscal period (the six-month period from July 1,1999 -December 31,1999),and the first full prior fiscal year (July 1, 1998 -June 30,1999).A comparison of the current fiscal year with the prior six-month period accurately reflects the two columns of data provided in this comprehensive annual financial report. However,we believe that this comparison is less useful to the reader than a comparison of two full years'worth of data.The six-month period is referred to as "Six-Month 1999",and the first full prior year from July 1,1998 -June 30,1999 is referred to as FY1999. Revenues from general governmental functions (General,Special Revenue,Debt Service and Capital Project Funds)totaled $9,035,747 in FY2000,an increase of $1,713,720 or 23.4%from FY1999. XI The new well adds capacity to the water system,enabling storage tanks to remain full.A backup generator and new building were constructed at lift station #3,and the extension of water and sewer lines from Gateway Subdivision to Forest Acres Subdivision,is underway. The City's electric system benefitted from installation of a $2.3 million backup generator capable of generating 3.2 megawatts of power.The project included construction of a new storage building and shop,a new battery building,new switchgear,and a step-up transformer.The addition of the backup generator is expected to reduce the duration of major power outages,and protect the City's power supply and generating capacity. The City was involved in a number of additional major programs and improvements,such as: reconditioning roads in two subdivisions and along Ballaine Boulevard;the design and construction of a portion of Japanese Creek levee in Forest Acres;replacing aged lighting ballasts and carpeting in portions of City Hall;installing an automated cataloging and circulation system at the library and providing improved access to the Internet for patrons;completion of a new playground in Gateway Subdivision and the addition of a new ADA-accessible multi-station playground structure at the Ballaine playground;completion of the new Citizen's baseball field;numerous handicapped accessibility improvements to the Waterfront Park campground,including access to restrooms,the bike path,and pavilions,as well as ADA parking pads,camping sites,and accessible water spigots; the purchase of land for Fourth and Adams Park will provide for downtown beautification,as well as much-needed public restroom facilities in the downtown area;major repairs to the fire hall roof;and the purchase of equipment for the hospital that is expected to improve the delivery of medical services,including a new cardiac monitoring system,sterilization system,sigmoidoscope and gastroscope,new exam tables and video equipment,load bank for the emergency generator,security fence surrounding the helipad,etc. Major Initiatives For the Future The City Council adopted a community-wide Strategic Plan during fiscal year 1999 for the purpose of developing long-term and short-term goals to guide future decision-making toward the year 2020. Town meetings provided the forum for soliciting public input and prioritizing the needs of the community.The Council and administration then met to develop long-term goals,five-year objectives, and annual management action plans,designed to move the community forward in a proactive manner. The Harbor Enterprise continues to work with the Army Corps of Engineers to design and engineer the proposed eastward expansion of the harbor basin.The existing harbor is overcrowded and has approximately 350 vessels on a waiting list for slip space.An eastward expansion is expected to accommodate approximately 380 additional vessels and alleviate overcrowded conditions. The City of Seward has received a proposal from Homer Electric Association to purchase the Seward electric utility.In the coming months,council members will meet to discuss the merits of the proposal,and determine whether it is in the public's interest to consider a sale of the electric utility. Council will also be asked to consider the fiscal impact of selling publicly owned land in the harbor to the private sector,to encourage private development of properties which have heretofore been leased by the City. Community leaders continue to work with representatives from the State of Alaska and private enterprise to support the coal terminal facility,expansion of the State's only long-term prison facility, X Another major contributor to Seward's thriving local economy is Spring Creek Correctional Center, the State's first and only maximum security prison which opened in 1988.The prison provides year- round employment to enhance the seasonal economy of the area.The City continues lobbying efforts to expand the prison facility to relieve overcrowding in the State's prison system.Another example of the City's efforts to increase jobs,private investment and economic activity,is seen in the Seward Marine Industrial Center (SMIC).This area contains over eighty acres of prime marine industrial land developed for long-term lease to marine-related businesses.The City has invested over forty million dollars of State grant and local monies to create this prime industrial development area.The SMIC is the only dedicated marine industrial center in Southcentral Alaska.In addition to the private sector businesses operating at SMIC,the City maintains boat and ship lift facilities to facilitate emergency and routine maintenance and repairs to large vessels operating in Alaskan waters. In FY2000,the City's General Fund experienced a positive fiscal year as it reported excess revenues over expenditures of $2,237,969,resulting in a net increase in fund balance of $1,089,011 after transfers to other funds.Overall,General Fund expenditures came in $355,844 below budget,while revenues exceeded budget by $1,410,743.The amount generally considered available for appropriation and for unforeseen emergencies,referred to as General Fund Balance,increased 30.0% over the preceding year,from $3,613,262 in December,1999,to $4,697,463 in December,2000.This represents a significant improvement in the City's financial condition,compared with recent years. The City expects to see continued modest increases in tax revenue resulting from recent assessments of real property,and from growth in the hotel/motel room tax reflecting the construction of additional hotel capacity.Sales tax revenues continue to increase each year,although they are expected to begin leveling off somewhat,due to higher fuel costs affecting the tourism industry,as well as lower visitor counts to the region.The City remains optimistic that its diverse economy serves to hedge against potential economic downturns affecting the visitor industry. Major Initiatives For the Year The City's staff,following directives of the City Council,have been involved in a variety of capital improvement projects during the year.These projects reflect the government's commitment to viable economic development,stable employment,and a healthy quality of life for its citizens. The Seward small boat harbor is a cornerstone in the City's economy,representing the base of operations for day cruise operations and fishing charters on Resurrection Bay.The City acquired ownership of the small boat harbor from the State of Alaska in February,1999,and is undergoing major repairs and renovations within the harbor basin.In addition to $3.12 million received from the State of Alaska in exchange for the City assuming ownership of the harbor,the City issued an additional $3 million of revenue bonds in December 2000 to build additional floats and fish cleaning stations in the harbor basin.This represents the most extensive renovation of the harbor since it was rebuilt following the 1964 earthquake,and includes replacing many of the wooden floats with concrete floats,replacing the electrical system,and installing new water and sewer services.The harbor plaza beautification project has improved the aesthetics of the harbor uplands,adding new decorative lighting,planter boxes with trees,shrubs and flowers,picnic tables,park benches,trash containers, bicycle racks,and interpretive signs. New water and sewer projects continue to replace and improve aging infrastructure.A new water well was built to address the increase in demand for water by fish processing plants and cruise ships. IX funds to account for the operations of all harbor-and port-related activities and public parking services provided by the City. Governmental Structure,Local Economic Conditions,and Outlook The City was incorporated on June 1,1912,and became a first-class City under the Alaska Statute'shomeruleprovisionsupontheadoptionoftheCityCharterbyareferendumvoteofthepeopleon January 5,1960.The form of government established by the Charter is the Council-Manager plan. The Council exercises legislative power and determines all matters of policy for the City.The Council is composed of a Mayor and six council members who are elected at-large on a non-partisan basis. Council members and the Mayor each serve a term of two years. The City Manager is the administrative head of the City government,is appointed by the Council,and is responsible to the Council for the proper handling of all City affairs.The City Clerk is also appointed by the Council.The Clerk's primary responsibilities involve the safekeeping of public records and the administration of City elections.The City Attorney is appointed by the Council.All other officers and employees of the City are appointed by the City Manager.Appointments to the following positions are made by the City Manager with approval of the Council:Director of Engineering and Utilities;Chief of Police;Finance Director;and Fire Chief. The community is located on the eastern side of the Kenai Peninsula in Southcentral Alaska,125 highway miles south of Anchorage.Year-round access is available by road,rail,water and commuter air service.The City has an area of 22 square miles and a population of 2,830.Seward was established in 1903 as the terminus of the (then)Alaska Central Railway.Its location was chosen for its attributes as a year-round,ice-free port.The world class harbor characteristics of Resurrection Bay established the City economically and still drive the economic base of the community.Seward is the only city in Alaska with an ice-free,deep-draft harbor with road and rail service to interior Alaska.Seward's unique port and transportation system have positioned it to be a key connection between the growing demand for Alaska's resources in the Pacific Rim countries,and the source of those resources in interior Alaska. Seward's citizens,and its physical assets,have created a much more diversified economy than exists in other coastal communities in Alaska.Seward has directed its efforts toward economic diversification and stability.The City has created and encouraged private investment and year-round jobs in Seward.Economic expansion is focused on six primary activities:tourism,fishing,bulk transportation,ship repair services,education and government. Seasonal activity in the summer has generated increased economic activity in tourism,sport,and commercial fishing.Tourism is a significant,expanding industry in Seward.The Alaska SeaLife Center (ASLC)began it's third year of operations in 2000.The ASLC is a world-class marine research facility dedicated to understanding and maintaining the integrity of the marine ecosystem of Alaska through research,rehabilitation and public education.The ASLC drew 193,000 visitors in its first year of operation.Industry studies estimate that nearly 400,000 non-resident visitors travel to Seward each summer.In addition,over 300,000 Alaskans reside within 3 hours'highway travel time, and an estimated 158,000 visit each year.Seward is known as the best one-day trip from Anchorage due,in part,to attractions such as Exit Glacier,Kenai Fjords National Park,world-class sport fishing,the Alaska SeaLife Center,and the scenic splendor of the surrounding area.The Seward Highway between Anchorage and Seward is designated as a National Scenic Byway and is listed as one of the ten most scenic highways in the world.Numerous tourism-related businesses serve the thousands wishing to enjoy these natural attractions. Vill Main Office (907)224-4050 Police (907)224-3338 Harbor (907)224-3138 Fire (907)224-3445 Fax (907)224-4038 CITY OF SEWARD PO.BOX 167 SEWARD,ALASKA 99664-0167 March 23,2001, To the Citizens of the City of Seward: It is with great pleasure that we present to you the City of Seward Comprehensive Annual Financial Report for the fiscal year ended December 31,2000.This report satisfies state statutes and local ordinances which require that the City of Seward issue annually a report on its financial position and activity,and that this report be audited by an independent firm of certified public accountants.Responsibility for the accuracy of the data,and the completeness and fairness of the presentation,including all disclosures,rests with management.We believe the data as presented is accurate in all material respects.It is presented in a manner designed to fairly set forth the financial position and results of operations of the City as measured by the financial activity of the various funds and account groups.All disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. The Comprehensive Annual Financial Report is presented in four sections:introductory,financial statistical,and single audit.The introductory section,which is unaudited,includes this letter of transmittal,a list of the City's principal officials,and an organizational chart.The financial section includes:the general purpose financial statements,which present aggregate data by fund type and account group,and includes the notes to the financial statements;the combining and individual fund and account group financial statements and schedules;and the independent auditor's report on these financial statements and schedules.The statistical section,which is also unaudited,includes statistical tables which present financial,social,and demographic information,generally on a multi- year basis.The single audit section contains federal and state single audit reports,including the auditor's report on compliance and internal controls over financial reporting,as well as information regarding any potential findings,questioned costs,prior audit findings,and corrective action plan. The City is required to undergo an annual single audit in conformity with the provisions of the State of Alaska Single Audit Regulation 2 AAC 45.010,the Single Audit Act of 1984,and the U.S.Office of Management and Budget Circular A-133,"Audits of States,Local Governments,and Non-Profit Organizations."For year ended December 31,2000,the qualifying major state and federal programs were audited,resulting in no adverse findings.Schedules of expenditures for the federal and state awards can be found on page 117-118,with corresponding single audit results on pages 135-143. The Reporting Entity and Its Services For financial reporting purposes,the reporting entity included in our comprehensive annual financial report includes all funds and account groups of the City.The General Fund is supported by taxes and general government revenues which are not restricted to a particular use.The City provides a comprehensive range of municipal services,including police,fire,culture and leisure services through the library and parks and recreation departments,planning and zoning,economic development, public improvements,and general and administrative services.The City also provides utility services,including electric,water and sewer.Utility services are accounted for in enterprise funds and are supported through user charges established by tariff.The City also maintains enterprise vil CITY OF SEWARD Comprehensive Annual Financial Report Table of Contents,continued PART III -STATISTICAL SECTION Table 1 General Fund Revenues by Source Table 1A General Government Tax Revenues by Sources Table 2 General Fund Expenditures by Function Table 3 Property Tax Levies and Collections Table 4 Assessed and Estimated Actual Value of Taxable Property Table 5 Property Tax Rates -Direct and Overlapping Governments Table 6 Special Property Assessment Collections Table 7 Ratio of Net General Obligation Bonded Debt to Assessed Value and Net General Obligation Bonded Debt Per Capita Table 8 Legal Debt Margin Table 8A Computation of Direct and Overlapping Bonded Debt Table 9 Ratio of Six-month Debt Service Expenditures for General Obligation Debt to Total General Fund Expenditures Table 10 Revenue Bond Coverage Table 11 Property Value,Construction and Bank Deposits Table 12 =Principal Taxpayers Table 13.Miscellaneous Statistics PART IV --SINGLE AUDIT SECTION Federal Single Audit Reports Independent Auditor's Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditor's Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A-133 Schedule of Findings and Questioned Costs Summary Schedule of Prior Audit Findings Corrective Action Plan State of Alaska Single Audit Reports Independent Auditor's Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditor's Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control Over Compliance in Accordance with the State ofAlaska Audit Guide and Compliance Supplement for State Single Audits VI Page 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133-134 135 136-137 138 139 140 141 142-143 CITY OF SEWARD Comprehensive Annual Financial Report Table of Contents,continued FINANCIAL SECTION,continued - Additional Information,continued Combining,Individual Fund,and Account Group Statements and Schedules,continued: Motor Pool Internal Service Fund: Balance Sheet Statement of Revenues,Expenses and Changes in Retained Earnings Statement of Cash Flows Agency Funds: Combining Balance Sheet Teen Council -Statement of Changes in Assets and Liabilities AVTEC Contract -Statement of Changes in Assets and Liabilities General Fixed Assets Account Group: Schedule of General Fixed Assets by Sources Schedule of Changes in General Fixed Assets Schedule of General Fixed Assets by Function and Activity Schedule of Changes in General Fixed Assets by Function and Activity General Long-Term Debt Account Group - Schedule of General Long-Term Debt Schedule of Expenditures of Federal Awards Schedule of State Financial Assistance Exhibit K-2 K-3 Page 103 104 105 107 108 109 111 112 113 114 115 117 118 CITY OF SEWARD Comprehensive Annual Financial Report Table of Contents,continued FINANCIAL SECTION,continued Exhibit Page Additional Information,continued Combining,Individual Fund,and Account Group Statements and Schedules,continued: Enterprise Funds,continued: Electric: Balance Sheet J-4 =82-83 Statement of Revenues,Expenses and Changes in Retained Earnings J-5 84 Statement of Cash Flows J-6 85 Schedule of Operating Expenses J-7 86 Combining Schedule of Electric Capital Projects J-8 87 Water and Sewer: Balance Sheet J-9 88 Statement of Revenues,Expenses and Changes in Retained Earnings J-10 89 Statement of Cash Flows J-11 90 Schedule of Operating Expenses J-12 91 Combining Schedule of Water and Sewer Capital Projects J-13 92 Harbor: Balance Sheet J-14 93 Statement of Revenues,Expenses and Changes in Retained Earnings J-15 94 Statement of Cash Flows J-16 95 Combining Schedule of Harbor Capital Projects J-17 96 Seward Marine Industrial Center: Balance Sheet J-18 97 Statement of Revenues,Expenses and Changes in Retained Earmings J-19 98 Statement of Cash Flows J-20 99 Parking Revenue: Balance Sheet J-21 100 Statement of Revenues,Expenses and Changes in Retained Earnings J-22 101 Statement of Cash Flows J-23 102 CITY OF SEWARD Comprehensive Annual Financial Report Table of Contents,continued FINANCIAL SECTION,continued Additional Information,continued Combining,Individual Fund,and Account Group Statements and Schedules,continued: Capital Project Funds: Combining Balance Sheet Combining Statement of Revenues,Expenditures and Changes in Fund Balances Parks and Recreation: Combining Balance Sheet Combining Statement of Revenues,Expenditures and Changes in Fund Balances (Deficit) Public Safety: Combining Balance Sheet Combining Statement of Revenues,Expenditures and Changes in Fund Balances Other General Government: Combining Balance Sheet Combining Statement of Revenues,Expenditures and Changes in Fund Balances Enterprise Funds: Combining Balance Sheet Combining Statement of Revenues,Expenses and Changes in Retained Earnings Combining Statement of Cash Flows Ill Exhibit J-3 Page 66 67 68 69 70 71 72 73 76-77 79 80-81 CITY OF SEWARD Comprehensive Annual Financial Report Table of Contents,continued FINANCIAL SECTION,continued Additional Information,continued Combining,Individual Fund,and Account Group Statements and Schedules,continued: Special Revenue Funds: Combining Balance Sheet Combining Statement of Revenues,Expenditures and Changes in Fund Balances Parks and Recreation: Combining Balance Sheet Combining Statement of Revenues,Expenditures and and Changes in Fund Balances Public Safety: Combining Balance Sheet Combining Statement of Revenues,Expenditures and Changes in Fund Balances (Deficit) Other General Government: Combining Balance Sheet Combining Statement of Revenues,Expenditures and Changes in Fund Balances Debt Service Fund: Balance Sheet Statement of Revenues,Expenditures and Changes in Fund Balance II Exhibit Page 52 53 54 55 56 37 58 59 61 62 CITY OF SEWARD Comprehensive Annual Financial Report Table of Contents PART I -INTRODUCTORY SECTION Table of Contents Letter of Transmittal Certificate of Achievement for Excellence in Financial Reporting List of Principal Officials Seward Citizens -Organizational Chart PART II -FINANCIAL SECTION Independent Auditor's Report General Purpose Financial Statements Combined Balance Sheet -All Fund Types and Account Groups Combined Statement of Revenues,Expenditures and Changes in Fund Balances -All Governmental Fund Types Statement of Revenues,Expenditures and Changes in Fund Balance -Budget and Actual -General Fund Combined Statement of Revenues,Expenses and Changes in Retained Earnings -All Proprietary Fund Types Combined Statement of Cash Flows -All Proprietary Fund Types Notes to General Purpose Financial Statements Additional Information Combining,Individual Fund,and Account Group Statements and Schedules: General Fund: Balance Sheet Statement of Revenues,Expenditures and Changes in Fund Balance Statement of Revenues,Expenditures and Changes in Fund Balance -Budget and Actual I Exhibit E-1 F-1 F-2 Page 1-2 39 40 41-47 PART II FINANCIAL SECTION Independent Auditor's Report General Purpose Financial Statements Combining,Individual Fund and Account Group Financial Statements and Schedules MIKUNDA,COTTRELL &Co. A Professional Corporation CERTIFIED PUBLIC ACCOUNTANTS &CONSULTANTS 3601 "C”Street,Suite 600 ©Anchorage,Alaska 99503 (907)278-8878,Fax (907)278-5779 www.mcc-cpa.com Independent Auditor's Report Honorable Mayor and City Council City of Seward,Alaska We have audited the accompanying general purpose financial statements of City of Seward,Alaska, as of and for the year ended December 31,2000.These general purpose financial statements are the responsibility of the City's management.Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States.Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.An audit includes examining,on a test basis,evidence supporting the amounts and disclosures in the financial statements.An audit also includes assessing the accounting principles used and significant estimates made by management,as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for our opinion. In our opinion,the general purpose financial statements referred to above present fairly,in all material respects,the financial position of City of Seward,Alaska,as of December 31,2000 and the results of its operations and the cash flows of its proprietary fund types for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards,we have also issued our report dated March 23,2001 on our consideration of City of Seward's intemal control over financial reporting and on our tests of its compliance with certain provisions of laws,regulations,contracts,and grants.That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. = MCGLADREY NETWORKBEieetOSomational 1 Offices:Anchorage,Bethel &Kenai Honorable Mayor and City Council City of Seward,Alaska Our audit was performed for the purpose of forming an opinion on the general purpose financial statements of City of Seward,Alaska taken as a whole.The accompanying Schedule of Expenditures of Federal Awards,Schedule of State Financial Assistance,and the combining, individual fund,and account group statements and schedules listed in the table of contents are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of City of Seward,Alaska.The Schedule of Expenditures of Federal Awards is required by U.S.Office of Management and Budget Circular A-133,Audits of States, Local Governments,and Non-Profit Organizations and the Schedule of State Financial Assistance is required by the State of Alaska Office of Management and Budget,State ofAlaska Audit Guide and Compliance Supplement for State Single Audits.Such information has been subjected to the auditing procedures applied in our audit of the general purpose financial statements and,in our opinion,is fairly presented,in all material respects,in relation to the general purpose financial statements taken as a whole. The other data included in the "statistical section”in the table of contents,has not been audited by us and accordingly,we express no opinion on such data. Wikunda,CoXCell ¢Co. March 23,2001 GENERAL PURPOSE FINANCIAL STATEMENTS The General Purpose Financial Statements include the basic financial statements and notes to the financial statements which are essential to the fair presentation of financial position and results of operations and the cash flows of the proprietary fund types. GENERAL PURPOSE FINANCIAL STATEMENTS -OVERVIEW These financial statements provide a summary overview of the financial position of all funds and account groups and the operating results of all funds.The following statements are included in this section: Combined Balance Sheet -All Fund Types and Account Groups --reports assets, other debits,liabilities,fund equity and other credits for all funds and account groups. Combined Statement of Revenues,Expenditures and Changes in Fund Balances - All Governmental Fund Types --reports results of operations of the General Fund, Special Revenue Funds,Debt Service Fund and Capital Project Funds. Statement of Revenues,Expenditures and Changes in Fund Balance -Budget and Actual -General Fund--compares the actual results of operations with the budget for the General Fund. Combined Statement of Revenues,Expenses and Changes in Retained Earnings - All Proprietary Fund Types --reports results of operations of the Enterprise Funds and Internal Service Fund. Combined Statement of Cash Flows -All Proprietary Fund Types -reports the sources and changes in cash balances of the Enterprise Funds and Internal Service Fund. Notes to General Purpose Financial Statements. Exhibit A-1 CITY OF SEWARD Combined Balance Sheet -All Fund Types and Account Groups December 31,2000 with Comparative Totals for December 31,1999 Fiduciary Totals Governmental Fund Types Proprietary Fund Types Fund Type Account Groups (Memorandum Only) Special Debt Capital Internal General Long-Term Assets and Other Debits General Revenue __Service Project Enterprise Service Agency Fixed Assets Debt 2000 1999 Cash and investments $4,401,644 83,880 564,909 654,269 10,634,604 456,980 15,714 -:16,812,000 14,916,729 Receivables (net,where applicable,of allowance for doubtful receivables):. Taxes 366,868 --------366,868 353,888 Accounts 82,078 :--913,345 ----995,423 1,066,324 Assessments 12,376 ---294,968 ----307,344 296,949 Grants and shared revenues 13,654 =11,849 -235,548 4,484 ---:265,535 290,921 Accrued interest 172,226 .--.----172,226 221,866 Other -26,875 -44,565 28,991 -:--100,431 33,892 Prepaids 28,606 -----:--28,606 190,303 Cash held by fiscal agent ----155,000 -:--155,000 155,500 Inventories 7,263 ---517,299 ----524,562 559,575 Due from other funds 212,333 --------212,333 156,194 Restricted assets -cash and investments ----555,723 ----§55,723 307,205 Property,plant and equipment,net ----77,312,689 §23,769 -70,738,594 -$48,575,052 155,432,807 Deferred charges ----43,118 ----43,118 51,188 Amount available for retirement of general long-term debt ------:-564,909 564,909 429,829 Amount to be provided for retirement of general long-term debt -----os --9,270,007 9,270,007 9,811,309 $5,297,048 122,604 564,909 934,382 90,460,221 980,749 15,714 70,738,594 9,834,916 178,949,137 184,274,479 Liabilities,Fund Equity and Other Credits Liabilities: Accounts payable Salaries and wages payable Accrued annual leave Accrued interest Accrued liabilities Customer deposits Funds held in trust Deferred revenue Deferred revenue -Alaska Railroad Corporation foan receivable Due to other funds Due to others Bonds payable Notes payable Capital lease obligations Retirement incentive program payable Seward General Hospital PERS liability Total liabilities Fund equity and other credits: Investment in general fixed assets Contributed capital,net Retained earnings -unreserved Fund balances: Reserved: Inventory and prepaids Debt service Unreserved: Designated: Working capital Unrealized gains on investments Seward Medical Center sales tax Insurance Subsequent year's expenditures Capital improvements Undesignated Total fund equity and other credits E cle CITY OF SEWARD Combined Balance Sheet -All Fund Types and Account Groups,continued Fiduciary Totals Governmental Fund Types Proprietary Fund Types_Fund Type Account Groups (Memorandum Only) Special Debt Capital Internal General Long-Term General Revenue Service Project Enterprise Service Agency Fixed Assets Debt 2000 1999 $387,211 5,349 -118,642 984,474 -1,228 --1,496,904 648,218 64,225 --------64,225 93,785 40,748 ---103,421 ---190,016 334,185 323,252 ----72,833 ->--72,833 78,749 45,802 ---64,783 ----110,585 62,227 ----143,319 ----143,319 150,096 3,422 --------3,422 11,266 58,177 31,185 --465,559 ----$54,921 3,821,145 ----73,622 ----73,622 107,312 -38,724 -173,609 -----212,333 156,194 ------14,486 --14,486 3,421 ----9,186,848 ---8,513,277 17,700,125 --15,847,963 ----713,844 ----713,844 754,478 ----410,000 178,869 ---588,869 747,192 ----40,637 ---49,053 89,690 161,453 -::-:---1,082,570 1,082,570 1,082,570 599,585 75,258 :292,251 12,259,340 178,869 15,714 :9,834,916 23,255,933 24,049,321 -------70,738,594 -70,738,594 79,327,805 ----63,729,629 471,001 ---64,200,630 63,407,637 ----14,471,252 330,879 ---14,802,131 12,502,802 35,869 --------35,869 195,260 --564,909 ------564,909 429,829 1,500,000 --------1,500,000 1,500,000 116,252 --------116,252 7,226 50,852 --------50,852 50,852 431,138 --------431,138 335,778 ----:-----505,815 ---642,131 -----642,131 918,118 2,563,352 47,346 :----:-2,610,698 1,044,036 4,697,463 47,346 564,909 642,131 78,200,881 801,880 :70,738,594 -155,693,204 160,225,158 $5,297,048 122,604 564,909 934,382 90,460,221 980,749 15,714 70,738,594 9,834,916 178,949,137 184,274,479 See accompanying notes to general purpose financial statements.Io. Exhibit B-1 CITY OF SEWARD Combined Statement of Revenues,Expenditures and Changes in Fund Balances -All Governmental Fund Types Year Ended December 31,2000 with Comparative Totals for Six-Month Period Ended December 31,1999 Totals (Memorandum Only) Special Debt Capital (Six Months) General Revenue Service Project 2000 1999 Revenues: Taxes $3,953,139 ---3,953,139 2,255,326 Licenses and permits 139,871 ---139,871 73,715 Intergovernmental 984,231 201,032 -482,103 1,667,366 928,786 Charges for services 2,179,832 ---2,179,832 925,721 Fines and bails 14,786 ---14,786 10,748 Investment income 438,005 -25,352 20,732 484,089 134,087 Miscellaneous 247,461 315,006 -34,197 596,664 151,198 Total revenues 7,957,325 516,038 25,352 $37,032 9,035,747 4,479,581 Expenditures: Current: General government 1,592,475 9,202 --1,601,677 866,317 Public safety 1,970,643 492,566 --2,463,209 1,096,178 Public works 981,027 ---981,027 490,459 Parks and recreation 711,721 3,688 --715,409 398,151 Library 245,710 6,155 --251,865 117,556 Public service -6,614 --6,614 211,364 Debt service 217,780 -623,217 -840,997 $70,058 Capital outlay ---1,176,757 =1,176,757 483,998 Total expenditures 5,719,356 518,225 623,217 1,176,757 8,037,555 4,234,081 Excess of revenues over (under)expenditures 2,237,969 (2,187)(597,865)(639,725)998,192 245,500 Other financing sources (uses): Operating transfers from other funds 179,846 23,828 732,945 553,640 1,490,259 1,189,109 Operating transfers to other funds (1,328,804)--(189,902)(1,518,706)(984,140) Net other financing sources (uses)(1,148,958)23,828 732,945 363,738 (28,447)204,969 Excess of revenues and other financing sources over (under) expenditures and other uses 1,089,011 21,641 135,080 (275,987)969,745 450,469 Beginning fund balances 3,613,262 25,705 429,829 918,118 4,986,914 4,867,973 Residual equity transfers to other funds (4,810)---(4,810)(331,528) Ending fund balances $4,697,463 47,346 564,909 642,131 5,951,849 ,4,986,914 See accompanying notes to general purpose financial statements. 6 Exhibit C-1 CITY OF SEWARD Statement of Revenues,Expenditures and Changes in Fund Balance -Budget and Actual -General Fund Year Ended December 31,2000 with Comparative Totals for Six-Month Period Ended December 31,1999 2000 Variance (Six Months) Favorable 1999 Budget Actual (Unfavorable)Actual Revenues: Taxes $3,685,247 3,953,139 267,892 2,255,326 Licenses and permits 126,000 139,871 13,871 73,715 Intergovernmental 862,972 984,231 121,259 438,185 Charges for services 1,583,220 2,179,832 596,612 925,721 Fines and bails 15,000 14,786 (214)10,748 Investment income 163,500 438,005 274,505 104,719 Miscellaneous 110,643 247,461 136,818 41,956 Total revenues 6,546,582 7,957,325 1,410,743 3,850,370 Expenditures: Current: General government 1,753,430 1,592,475 160,955 864,468 Public safety 2,086,647 1,970,643 116,004 1,029,356 Public works 1,012,155 981,027 31,128 490,459 Parks and recreation 756,784 711,721 45,063 386,599 Library 248,404 245,710 2,694 117,411 Debt service 217,780 217,780 -166,080 Total expenditures 6,075,200 5,719,356 355,844 3,054,373 Excess of revenues over expenditures 471,382 2,237,969 1,766,587 795,997 Other financing sources (uses): Operating transfers from other funds 179,846 179,846 -455,460 Operating transfers to other funds (1,328,804)(1,328,804)-(884,140) Net other financing sources (uses)(1,148,958)(1,148,958)-(428,680) Excess of revenues and other financing sources over (under)expenditures and other uses $(677,576)1,089,011 1,766,587 367,317 Beginning fund balance 3,613,262 3,577,473 +Residual equity transfers to other funds (4,810)(331,528) Ending fund balance $4,697,463 3,613,262 See accompanying notes to general purpose financial statements. 7 THIS PAGE LEFT BLANK INTENTIONALLY Exhibit D-1 CITY OF SEWARD Combined Statement of Revenues,Expenses and Changes in Retained Earnings - All Proprietary Fund Types Year Ended December 31,2000 with Comparative Totals for Six-Month Period Ended December 31,1999 Operating revenues Operating expenses Earnings from operations before depreciation Depreciation Earnings (loss)from operations Nonoperating revenues (expenses): Gain (loss)on disposal of property and equipment Investment income Interest expense Other revenues Net nonoperating revenues (expenses) Earnings (loss)before operating transfers Operating transfers from other funds Operating transfers to other funds Net operating transfers Net earnings (loss) Increase in retained earnings for corrections to contributed capital and accumulated depreciation Amortization of contributed capital Increase in retained earnings Beginning retained earnings Residual equity transfers to other funds Ending retained earnings See accompanying notes to general purpose financial statements. Totals (Memorandum Only) Internal (Six Months) Enterprise Service 2000 1999 $10,011,875 213,983 10,225,858 5,193,861 7,311,040 -7,311,040 3,451,997 2,700,835 213,983 2,914,818 1,741,864 3,286,142 (131,739 3,417,881 1,643,367 (585,307)82,244 (503,063)98,497 301 -301 (10,617) 537,519 22,478 559,997 303,837 (502,821)(12,547)(515,368)=(276,308) 28,898 :28,898 101 63,897 9,931 73,828 17,013 (521,410)92,175 (429,235)115,510 285,133 -285,133 279,986 (256,686)-(256,686)__(484,955) 28,447 -28,447 (204,969) (492,963)92,175 (400,788)(89,459) 111,593 -111,593 9,733 2,578,795 9,729 2,588,524 -_1,240,302 2,197,425 101,904 2,299,329 1,160,576 12,273,827 228,975 12,502,802 11,769,197 ---(426,971) $14,471,252 330,879 14,802,131 12,502,802 CITY OF SEWARD Combined Statement of Cash Flows - All Proprietary Fund Types Year Ended December 31,2000 with Comparative Totals for Six-Month Period Ended December 31,1999 Cash flows from operating activities: Earnings from operations Adjustments to reconcile earnings from operations to net cash flows from operating activities: Depreciation Other nonoperating revenues (expenses) Increase (decrease)in allowance for doubtful receivables (Increase)decrease in assets: Receivables Inventory Increase (decrease)in liabilities: Accounts payable Customer deposits Accrued annual leave Other accrued liabilities Due to other funds Deferred revenue Retirement incentive program payable Net cash flows from operating activities Cash flows from noncapital financing activities: Operating transfers from other funds Operating transfers to other funds Operating grants received Residual equity transfers to other funds Net cash flows from noncapital financing activities 10 Exhibit E-1 Totals (Memorandum Only) Internal (Six Months) Enterprise Service 2000 1999 $(585,307)82,244 (503,063)98,497 3,286,142 131,739 =.3,417,881 1,643,367 3,509 -3,509 3 (8,721)-(8,721)13,533 21,310 -21,310 186,615 37,319 -37,319 8,549 743,517 -743,517 (26,200) (6,777)-(6,777)(41,366) (6,940)-(6,940)(1,158) (15,811)-(15,811)5,743 (20,688)-(20,688)(26,025) (33,536)-(33,536)14,610 (3,662)-(3,662)19,665 3,410,355 213,983 3,624,338 1,895,833 285,133 -285,133 (484,955) (256,686)-(256,686)279,986 24,800 :24,800 - ---(50,797) $3,247 -53,247 (255,766) Exhibit E-1,continued CITY OF SEWARD Combined Statement of Cash Flows - All Proprietary Fund Types,continued Totals _(Memorandum Only) Internal (Six Months) Enterprise Service 2000 1999 Cash flows from capital and related financing activities: Decrease in due from other funds $---46,713 Proceeds from issuance of long-term debt 3,068,366 -3,008,366 . Principal payments on long-term debt (941,512)(93,323)(1,034,835)(705,207) Interest payments on long-term debt (427,682)(13,380)(441,062)(274,455) Cash held by fiscal agent 500 -500 (155,500) Acquisition of property,plant and equipment (5,910,505)(4,810)(5,915,315)(476,374) Collections on special assessments 44,209 -44,209 2,632 Proceeds from sale of property and equipment 301 -301 - Contributed capital 4,192,165 4,810 4,196,975 531,519 Decrease in deferred revenue (3,237,164)-(3,237,164)(6,681) Penalties and interest on special assessments 589 -589 98 Net cash flows from capital and related financing activities (3,270,733)(106,703)(3,377,436)(1,037,255) Cash flows from investing activities - investment income received §37,519 22,478 559,997 303,837 Net increase in cash and investments 730,388 129,758 860,146 906,649 Beginning cash and investments 10,459,939 327,222 10,787,161 9,880,512 Ending cash and investments $11,190,327 456,980 11,647,307 10,787,161 Reconciliation of cash and investments to balance sheet: Cash and investments: Current assets $10,634,604 456,980 Restricted assets §55,723 - $11,190,327 456,980 Noncash capital and related financing activities: Increase in contributed capital and deferred assessments receivable $62,113 -62,113 277,271 Corrections and reclassifications -increase (decrease)to: Accumulated depreciation $765,978 -765,978 - Contributed capital $(175,402)-(175,402)48,220 Accumulated amortization $702,169 -702,169 - Retained earnings $(111,593)-(111,593)- See accompanying notes to general purpose financial statements. i THIS PAGE LEFT BLANK INTENTIONALLY 12 NOTES TO GENERAL PURPOSE FINANCIAL STATEMENTS The notes to the General Purpose Financial Statements represent a summary of significant account policies and other notes to the financial statements necessary for adequate disclosure. (1) CITY OF SEWARD Notes to General Purpose Financial Statements December 31,2000 Summary of Significant Accounting Policies Organization and Services Provided The City of Seward,Alaska (the City)was incorporated June 1,1912 as a home-rule city and operates under a Council-Manager form of government. The City provides the full range of municipal services as provided for by Alaska Statute. This includes police and fire protection,electric,water and wastewater services,library, parks and recreation,public improvements,planning and zoning,port and harbor,and general administrative services. Reporting Entity In prior years,the City's general purpose financial statements included the Seward General Hospital as a blended component unit.However,effective July 1,1996,all Hospital operations were transferred to Providence Alaska Medical Center,a private health care provider. For the year ended December 31,2000,there are no component units for which the City of Seward is financially accountable,nor do any special financial relationships exist between the City and any other entity. The accounting policies of the City conform to generally accepted accounting principles as applicable to governments.The following is a summary of the more significant policies: Fund Accounting The accounts of the City are organized on the basis of funds and account groups,each of which is considered a separate accounting entity.The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities,fund equity,revenues and expenditures or expenses,as appropriate.Government resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled.The various funds are grouped,in the financial statements in this report as follows: Governmental Fund Types The General Fund is used to account for all financial resources except those required to be accounted for in another fund.The General Fund is the City's operating fund. Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than major capital projects)that are restricted to expenditures for specified purposes. 13 CITY OF SEWARD Notes to General Purpose Financial Statements,continued Summary of Significant Accounting Policies,continued Governmental Fund Types,continued The Debt Service Fund is used to account for the accumulation of resources for,and the payment of,principal and interest relating to the bonds issued to construct the new hospital and the PERS liability resulting from the transfer of the operations to Providence Alaska Medical Center. Capital Project Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities and public improvements (other than thosefinancedbyproprietaryfunds). Proprietary Fund Types Enterprise Funds are used to account for operations (a)that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the cost (expenses,including depreciation)of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges;or (b)where the governing body has decided that periodic determination of revenues eared,expenses incurred,and/or net income is appropriate for capital maintenance,public policy,management control,accountability,or other purposes. The Internal Service Fund is used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the City on a cost- reimbursement basis.The City has one internal service fund which accounts for the acquisition of vehicles and mobile equipment which are then leased to the various ° departments of the City. Fiduciary Fund Types Agency Funds are used to account for assets held by the City in a trustee capacity or as an agent for individuals,private organizations,other governments,and/or other funds.Agency Funds are custodial in nature (assets equal liabilities)and do not involve measurement of results of operations. Fixed Assets and Long-Term Liabilities The accounting and reporting treatment applied to the fixed assets and long-term liabilities associated with a fund are determined by its measurement focus.All governmental funds are accounted for on a spending or "financial flow"measurement focus.This means that only current assets and current liabilities are generally included in their balance sheets. Their reported fund balance (net current assets)is considered a measure of "available spendable resources."Governmental fund operating statements present increases '(revenues and other financing sources)and decreases (expenditures and other uses)in net current assets.Accordingly,they are said to present a summary of sources and uses of "available spendable resources"during a period.Fixed assets used in governmental fund type operations (general fixed assets)are accounted for in the General Fixed Assets 14 CITY OF SEWARD Notes to General Purpose Financial Statements,continued Summary of Significant Accounting Policies,continued Fixed Assets and Long-Term Liabilities,continued Account Group,rather than in governmental funds.Public domain ("infrastructure") general fixed assets consisting of certain improvements other than buildings,including roads,bridges,curbs and gutters,streets and sidewalks,drainage systems and lighting systems,are not capitalized along with other general fixed assets.No depreciation has been provided on general fixed assets. All fixed assets are valued at historical cost or estimated historical cost if actual historical cost is not available.Donated fixed assets are valued at their estimated fair market value on the date donated. Long-term liabilities expected to be financed from the governmental funds are accounted for in the General Long-Term Debt Account Group,not in the governmental funds. Because of their spending measurement focus,expenditure recognition for governmental fund types is limited to exclude amounts represented by noncurrent liabilities.Since they do not affect current assets,such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities.They are instead reported as liabilities in the General Long-Term Debt Account Group. The two account groups are not funds.They are concerned only with the measurement of financial position.They are not involved with measurement of results of operations. All proprietary funds are accounted for on a cost of services or "capital maintenance" measurement focus.This means that all assets and all liabilities (whether current or noncurrent)associated with their activity are included on their balance sheets.Their reported fund equity (net total assets)is segregated into contributed capital and retained earings components.Proprietary fund type operating statements present increases (revenues)and decreases (expenses)in net total assets. Portions of the property,plant and equipment of the Enterprise Funds have been constructed through the use of contributed capital from State and federal agencies.Depreciation on all assets has been charged against operations.However,depreciation applicable to the assets acquired with contributed capital does not reduce earnings or increase losses transferred to retained earnings.Instead it is included in accumulated amortization which offsets contributed capital in the fund equity section of the Enterprise Fund balance sheets. Depreciation for all plant and equipment in the proprietary funds is computed by use of the straight-line method over the estimated economic lives of the assets. 15 CITY OF SEWARD Notes to General Purpose Financial Statements,continued Summary of Significant Accounting Policies,continued Fixed Assets and Long-Term Liabilities,continued Estimated lives of major asset categories are as follows: Life in years Buildings 10-50 Improvements other than buildings 10-50 Equipment .2-30 Measurement Focus and Basis of Accounting Measurement focus refers to which resources are being measured when reporting financial position and performance.Basis of accounting refers to when revenues,expenditures, expenses and transfers,and the related assets and liabilities are recognized in the accounts and reported in the financial statements.Specifically,it relates to the timing of the measurements made regardless of the measurement focus applied. Governmental fund types are accounted for on the modified accrual basis of accounting. Under the modified accrual basis of accounting,revenues are recorded when susceptible to accrual,i.e.,both measurable and available.Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period.The available period for the City is generally 60 days after year end.All primary revenue sources have been treated as susceptible to accrual.Expenditures are recognized on the accrual basis with the exception of principal and interest on general long-term debt,which are reported only when due. Proprietary fund types are accounted for on the accrual basis of accounting.Their revenues are recognized in the period earned and expenses are recognized in the period incurred. Agency Fund assets and liabilities are accounted for using the modified accrual basis of accounting similar to that utilized by the governmental fund types. Proprietary Fund Types and GASB Statement No.20 Governmental Accounting Standards Board (GASB)Statement No.20 allows proprietary activities to elect to follow either GASB pronouncements or Financial Accounting Standards Board (FASB)pronouncements which are not in conflict with GASB and have been issued after November 30,1989.The City has elected to follow only GASB pronouncements subsequent to November 30,1989. Central Treasury A central treasury is used to account for the City's cash and investments to maximize interest income.Investments are stated at fair value.Investment earnings are allocated among the funds based on their respective cash balances. 16 CITY OF SEWARD Notes to General Purpose Financial Statements,continued Summary of Significant Accounting Policies,continued Cash and Cash Equivalents For purposes of the statement of cash flows,the proprietary funds consider all cash and- investments to be cash and cash equivalents.The central treasury,which holds cash and investments,is used essentially as a cash management pool by each fund. Inventory Inventories are valued at cost in governmental funds and at the lower of cost or market in the proprietary funds.Costis determined by the first-in,first-out method.The cost is recordedasanexpenditureatthetimeindividualinventoryitemsareconsumed. Grants and Other Intergovernmental Revenues . _In applying the measurable and available concepts to grants and intergovernmental revenues,the legal and contractual requirements of the numerous individual programs are used as guidance.There are,however,essentially two types of these revenues.In one,monies must be expended on the specific purpose or project before any amounts are considered "earned”;therefore,revenues are recognized based upon expenditures recorded.In the other,monies are virtually unrestricted as to purpose of expenditure and are usually revocable only for failure to comply with prescribed compliance requirements.These resources are reflected as revenues at the time of receipt or earlier if the measurable and available criteria are met. Property Taxes Property taxes are liens on the assessed value of taxable property as of January 1.Pursuant to Alaska Statutes,the City establishes the mill rate and tax levy on or before June 15.The City is located within the Kenai Peninsula Borough which acts as the City's agent in the billing and collection of property taxes.Tax bills for one-half of the taxes are mailed prior to July 1 and are payable on August 15;tax bills for the second-half of the taxes are mailed by October 1 and are payable on November 15.City property tax revenues are recognized in the fiscal year in which they are collectible and available (collected within sixty days after year-end)to finance expenditures of the fiscal year. At December 31,the delinquent real and personal taxes not currently available are reflected as deferred revenues of the General Fund. Interfund TransactionsDuringthecourseofnormal operations,the City has numerous transactions between funds, including expenditures and transfers of resources to provide services,construct assets,and service debt.The accompanying financial statements generally reflect such transactions as operating transfers.Operating subsidies are also recorded as operating transfers.The classification of amounts recorded as subsidies,advances,or residual equity transfers is determined by City management. 17 CITY OF SEWARD Notes to General Purpose Financial Statements,continued Summary of Significant Accounting Policies,continued Accrued Leave Accrued leave (vacation and sick leave)is recorded as an expense in the proprietary fund types in the period it is earned by the employees,with the total liability for accrued leave presented in the related fund balance sheet.The amount of accrued leave recorded as expenditures in the governmental fund types is the amount accrued during the year that would normally be liquidated with available spendable resources.Only the current portion of the liability is recorded in the governmental fund types,with the remainder reported in the General Long-Term Debt Account Group. Encumbrances Encumbrance accounting,under which purchase orders,contracts and other commitments forexpendituresarerecordedinordertoreservethatportionoftheapplicableappropriation,is employed as an extension of formal budgetary integration in the General Fund during the year.However,it is the City's policy to stop issuing purchase orders in early December. Outstanding purchase orders,if any,at December 31,are cancelled and new ones are issued in the subsequent year.As a result,there are no outstanding encumbrances at December 31,2000. Deferred Grant Revenue Amounts received from grantor agencies which are restricted as to use and have not been expended for the intended use are shown as deferred revenue. Pension Plans Substantially all employees of the City participate in the Public Employees'Retirement System (PERS)administered by the State of Alaska,with the exception of certain Electric - Fund employees and the City Manager. Reclassifications Certain reclassifications have been made to the six months ended December 31,1999 financial statements to make them comparable with the year ended December 31,2000 presentation. Comparative Data , Comparative total data for the prior six-month period have been presented in the accompanying financial statements in order to provide an understanding of changes in the City's financial position and operations. Total Columns on Combined Statements Total columns on the Combined Statements are presented only to facilitate financial analysis. Data in these columns do not present financial position,results of operations,or cash flows in conformity with generally accepted accounting principles..Neither is such data comparable to a consolidation.Interfund eliminations have not been made in the aggregation of this data. 18 (2) CITY OF SEWARD Notes to General Purpose Financial Statements,continued Summary of Significant Accounting Policies,continued Changein Fiscal YearOnOctober6,1998,the voters of Seward approved changing tthe City's year-end from a fiscal period ending on June 30 to December 31.In accordance with this change,the statements of revenues,expenditures (expenses)and changes in fund balance (retained earnings)and the statements of cash flows for the period ended December 31,1999 are for six months whereas the current year statements cover a full fiscal year (twelve months). Stewardship,Compliance and Accountability Budgetary Accounting An operating budget is adopted each fiscal year for the General Fund on the same modified accrual basis used to reflect actual revenues and expenditures.Appropriations for this fund lapse at year end to the extent that they have not been expended or encumbered.Budgetary control is exercised at the department level.The City Manager is authorized to transfer budget amounts between departments within a fund or between cost centers within a department's budget classification.The budgeted financial statements represented in this report reflect the final budget authorization,including amendments made during the year. A comparison of the original expenditure and operating transfers out appropriation with the final amended expenditure and operating transfers out appropriation as presented in the financial statements follows: Final Original Amended Fund Appropriations Appropriations General Fund expenditures $5,964,549 $6,075,200 General Fund transfers out 1,156,195 1,333,614 The following funds had a deficit in fund balance/retained earnings at December 31,2000: Gateway Subdivision Capital Project Fund $(10,859) Seward Marine Industrial Center Enterprise Fund (519,881) 19 (3) CITY OF SEWARD Notes to General Purpose Financial Statements,continued Cash and Investments The City of Seward utilizes a central treasury that is available for use by all funds.Eachfund's portion of the central treasury is displayed on the balance sheet as "cash and investments"or included in "due to other funds." DepositsAtDecember 31,2000,the carrying amount of the City's deposits was ($333,087)and the bank balances totaled $157,410.All of the bank balances were covered by federal depository insurance or by collateral held by the City's agent in the City's name. Investments Statutes authorize the City to invest in obligations of the U.S.Treasury and U.S.agencies, banker's acceptances,repurchase agreements,commercial paper rated A-1 by Standard & Poor's Corporation or P-1 by Moody's Commercial Paper Record and maturing within nine months,certificates of deposit insured by federal depository insurance or secured by eligible collateral held by a third party in the City's name,and investments through the Alaska Municipal League Investment Pool. Investments are carried at fair value and are categorized below to give an indication of the level of credit risk assumed by the City at year-end. Category 1 Insured or registered,or securities held by the City or its agent in the City's name. Category 2 Uninsured and unregistered,with securities held by the counterparty's trust department or agent in the City's name. Category 3 Uninsured and unregistered,with securities held by the counterparty,or by its trust department or agent,but not in the City's name. Category 1 2 -_3 Total Overnight repurchase: agreement $-3,289,340 -3,289,340 U.S.government securities 748,518 13,660,952 -14.409.470 $748,518 16,950,292 -17,698,810 Restricted Cash The City also maintains electric and harbor bond redemption and reserve accounts as required by bond covenants.The balance in these accounts at December 31,2000,which totaled $555,723,is included in investments. 20 (4) CITY OF SEWARD Notes to General Purpose Financial Statements,continued Cash and Investments,continued Investments,continued A reconciliationof cash and investments as shown on the combined balance sheet follows: Cash on hand Carrying amount of deposits Carrying amount of investments Cash and investments as shown on the combined balance sheet: Cash and investments $2,000 (333,087) 17,698,810 $17,367,723 $16,812,000 Restricted assets -cash and investments 555,723 $17,367,723 Fixed Assets A summary of changes in general fixed assets follows: Balance at Balance January 1,2000 Additions Deletions December 31,2000 Land and land rights $3,898,515 155,090 -4,053,605 Buildings 61,406,904 2,501 (10,091,276)51,318,129 Improvements other than buildings '10,604,013 279,178 -10,883,191 Equipment 2,927,671 271,500 (47,680)3,151,491 Fixed assets in service 78,837,103 708,269 (10,138,956)69,406,416 Construction in progress 490,702 1,121,346 (279,870)1,332,178 $79,327,805 1,829,615 (10,418,826)70,738,594 As aresult of a favorable settlement from a lawsuit involving the original construction of the Alaska Sealife Center,the Center was awarded $10,091,276.The award was based on an assertion of substandard construction;accordingly,the proceeds reduced the carrying value of the building. 21 (5) CITY OF SEWARD Notes to General Purpose Financial Statements,continued Fixed Assets,continued A summary of proprietary fund type property,plant and equipment at December 31,2000 follows: Internal Enterprise Service Funds Fund Land and land rights $15,754,269 - Buildings 4,650,397 - Improvements other than buildings 37,780,136 - Equipment 42,052,517 1,277,855 Docks and floats 16,342,503 - 116,579,822 1,277,855 Less accumulated depreciation (45,143,425)(754,086) 71,436,397 523,769 Construction in progress 5,858,192 - Property,plant and equipment,net $77,294,589 523,769 Interfund Receivables and Payables Interfund receivable and payable balances at December 31,2000,are as follows: Interfund Interfund Receivables Payables General Fund $212,333 - Avalanche 2000 Special Revenue Fund -38,724 Capital Project Funds: Flood Mitigation -164,697 Gateway Subdivision -8,912 Totals $212,333 212,333 22 CITY OF SEWARD Notes to General Purpose Financial Statements,continued (6)Operating Transfers A summary of operating transfers between funds for the year ended December 31,2000 follows: From To Other Other Funds Funds General Fund: Special Revenue Funds: Computer Network/Web Page $-22,000 DARE Program -1,828 Debt Service Fund -732,945 Capital Project Funds: Capital Acquisition .-151,062 Street Improvements -81,306 Firehall Roof Repair -40,000 City Hall Facilities and Equipment -14,530 Enterprise Funds: Harbor 132,460 - Electric 35,000 - SMIC 12,386 285,133 Total General Fund 179,846 1,328,804 Special Revenue Funds from General Fund: Computer Network/Web Page 22,000 - DARE Program 1,828 - Total Special Revenue Funds 23,828 - Debt Service Fund from General Fund 732,945 - Capital Project Funds from General Fund: Capital Acquisition 151,062 - Street Improvemets 81,306 - Firehall Roof Repair 40,000 - City Hall Facilities and Equipment 14,530 - 286,898 - Capital Acquisition Fund to/from other funds: Capital Acquisition -189,902 Street Improvements 189,902 - Water and Sewer Enterprise Fund 76,840 - Total Capital Project Funds 553,640 189,902 23 CITY OF SEWARD Notes to General Purpose Financial Statements,continued Operating Transfers,continued From To Other Other Funds Funds Enterprise Funds to/from General Fund: SMIC $285,133 12,386 Harbor -132,460 Electric 35,000 285,133 179,846 Water and Sewer Enterprise Fund to Capital Acquisition Capital Project Fund -76,840 Total operating transfers $1,775,392 1,775,392 (7)Residual Equity Transfers A summary of residual equity transfers between funds for the year ended December 31,2000 follows: From To Other Other Funds Funds General Fund to Motor Pool Internal Service Fund $4,810 - Motor Pool Internal Service Fund from General Fund -4,810 Total residual equity transfers $4,810 4,810 The residual equity transfer from the General Fund was recorded in contributed capital of the Motor Pool Internal Service Fund. (8)Accrued Leave Accrued leave estimated to be paid with current available resources is recorded in the General Fund.The portion to be paid from future resources of the General Fund ($190,016 at December 31,2000)is recorded in the General Long-Term Debt Account Group.The City's policy is to make no distinction between vacation and sick leave as accrued leave includes both types. A summary of the change in the long-term portion of accrued leave follows: Balance at January 1,2000 $174,014 Increase 16,002 Balance at December 31,2000 $190,016 24 (9) CITY OF SEWARD Notes to General Purpose Financial Statements,continued Long-Term Debt General Obligation Bonds The City has issued general obligation bonds to provide funds for the acquisition and construction of major capital facilities.General obligation bonds have been issued for both general government and proprietary activities.These bonds are reported in the Enterprise Funds if they are expected to be repaid from proprietary revenues. General obligation bonds are direct obligations and pledge the full faith and credit of the government.General obligation bonds at December 31,2000 are as follows: Interest Rates Balance $1,700,000 1980 electric serial bonds,due in one remaining installment on January 1,2001 7%$155,000 $3,990,000 1993 refunding electric serial bonds,due in six-month installments of $475,000 to $560,000 through October 1,2004 4.75%to 5.35%2,085,000 $2,030,000 1993 refunding harbor/ general government serial bonds for the 1987 bonds,Series A,due in six-month installments of $170,000 to $240,000 through December 1,2007 4.75%to 5.65%1,435,000 $1,465,000 1993 refunding general government serial bonds for the 1990 bonds,Series A,due in six-month installments of $95,000 to $165,000 through December 1,2011 4.75%to 5.8%1,375,000 $7,500,000 1996 hospital serial bonds, due in six-month installments of $265,000 to $825,000 through October 1,2013 4.75%to 6.75%6,885,000 Total general obligation bonds $11,935,000 25 CITY OF SEWARD Notes to General Purpose Financial Statements,continued Long-Term Debt,continued Revenue bond principal and interest are payable from resources generated by a particular government operation such as a public utility.In December 2000,the City issued $3,000,000 of harbor revenue bonds to assist with harbor improvements.Revenue bonds outstanding at December 31,2000 are as follows: Interest Rates Balance $3,225,000 1995 Electric revenue bonds, due in annual installments of $130,000 to $290,000,plus interest through June 1,2015 4.85%to 7.35%$3,000,000 $3,000,000 2000 Harbor revenue bonds, due in annual installments of $90,000 to $235,000,plus interest through October 1,2021 4.85%to 5.5%3,000,000 Total revenue bonds $6,000,000 A reconciliation of bonds payable to the amount reported on the Combined Balance Sheet -All Fund Types and Account Groups follows: Total general obligation bonds $11,935,000 Less unamortized loss on 1993 refunding bonds (234,875) 11,700,125 Revenue bonds 6,000,000 $17,700,125 General obligation bond and revenue bond debt service requirements to maturity are as follows: General Long-Term Year Ending Enterprise Funds Debt Account Group Total December 31,Principal Interest Principal Interest Principal Interest 2001 $900,000 474,204 390,000 467,974 1,290,000 942,178 2002 892,348 453,744 432,652 448,676 1,325,000 902,420 2003 935,583 406,022 479,417 426,844 1,415,000 832,866 2004 978,817 356,939 526,183 402,525 1,505,000 759,464 2005 447,052 304,213 577,948 375,265 1,025,000 679,478 2006-2021 5,267,923 1,887,893 6,107,077 1,762,403 11,375,000 3,650,296 $9,421,723 3,883,015 8,513,277 3,883,687 17,935,000 7,766,702 26 CITY OF SEWARD Notes to General Purpose Financial Statements,continued Long-Term Debt,continued Notes payable by the Water and Sewer Enterprise Fund at December 31,2000 are as follows: Interest Rates Balance$26,231 note payable to State of Alaska Department of Environmental Conservation, due in annual installments of $1,333,plus interest,through July 15,2014 a 2.5%$18,361 $901,851 note payable to State of Alaska Department of Environmental Conservation, due in annual installments of $70,995,including interest,through November 5,2013 2.5%695,483 §713,844 In December 2000,the Alaska Department of Environmental Conservation revised the terms of its two loans by reducing the interest rates from 4.75%and 4.31%to 2.5% each. Debt service requirements to maturity on the notes payable are as follows: Year Ending 2.5%Note Payable 2.5%Note Payable Total December 31,Principal Interest Principal Interest Principal Interest 2001 $1,036 647 45,082 19,202 46,118 19,849 2002 1,333 433 47,146 16,260 48,479 16,693 2003 1,333 400 48,324 15,081 49,657 15,481 2004 1,333 366 49,532 13,873 50,865 14,239 2005 1,333 333 50,771 12,635 52,104 12,968 2006-2014 11,993 1,500 454,628 52,617 466,621 54,117 $18,361 3,679 695,483 129,668 713,844 133,347 Obligation Payable to the State of Alaska Public Employees Retirement System The dissolution of the Seward General Hospital Enterprise Fund,a blended component unit,on December 31,1996 resulted in the termination of all Hospital employees.The City assumed the obligation for the additional pension contributions for Hospital employees vested in the State of Alaska Public Employees Retirement System at December 31,1996.At December 31,2000,management estimated this liability at $1,082,570.The ultimate amount of this obligation and the terms of payment have not been determined by the State of Alaska Department of Administration,Division of Retirement and Benefits. 27 CITY OF SEWARD Notes to General Purpose Financial Statements,continued Long-Term Debt,continued Defeasance of DebtIn1993,the City of Seward defeased certain general obligation bonds by placing the proceeds of new bonds and other available fundsin irrevocable trusts to provide for all future debt service payments on the old bonds.Accordingly,trust account assets and liabilities for defeased bonds are not included in the City's financial statements. General obligation bonds with a balance of $1,280,000 at December 31,1999 were fully retired in December 2000. Changes in Long-Term Liabilities During the year ended December 31,2000,the following changes occurred in long-term liabilities: Balance at Balance at January 1,December 31, 2000 Additions Reductions 2000 General Government Compensated absences $174,014 16,002 -190,016 General obligation bonds 8,867,400 -354,123 8,513,277 Retirement incentive program 117,154 -68,101 49,053 State of Alaska 1,082,570 --1,082,570 $10,241,138 16,002 422,224 9,834,916 Enterprise Funds General obligation bonds $4,157,600 -735,877 3,421,723 Unamortized loss on refunding (277,038)-(42,163)(234,875) Revenue bonds 3,100,000 3,000,000 100,000 6,000,000 Capital leases 475,000.-65,000 410,000 Retirement incentive program 44,299 28,972 32,634 40,637 Notes payable 754,478 40,637 713,841 $8,254,339 .3,028,972 931,985 10,351,326 Internal Service Fund , Capital leases $272,192 -93,323 .178,869 28 CITY OF SEWARD Notes to General Purpose Financial Statements,continued Long-Term Debt,continued Revenue Bond Requirements Certain covenants of the revenue bonds require establishment of bond redemption and reserve accounts.These balances are reflected as restricted cash and investments at December 31,2000 as follows: Electric Enterprise Fund $307,205 Harbor Enterprise Fund 248,518 Total restricted cash and investments $555,723 The Electric and Harbor revenue bonds also require that rates be maintained at a level that will produce net revenues after certain adjustments,equal to 1.3 and 1.2 respectively, times the amount required each year to pay the principal and interest.The first payment on the Harbor bonds will be made in 2001. Electric Operating income before depreciation $1,784,794 Add: Payment in lieu of taxes 511,101 Investment income 233,757 Available for debt service 2,529,652 Requirement 381,056 Excess of revenue over requirement $2,148,596 (10)Capitalized Leases The City has entered into several lease agreements as lessee for financing the acquisition of a sand truck,motor grader,pumper truck,rescue vehicle,and a 250-ton boatlift.These lease agreements qualify as capital leases for accounting purposes (titles transfer at the end of the .lease terms)and,therefore,have been recorded at the present value of the future minimum lease payments.The following is a summary of the assets acquired with the capital leases as of December 31,2000: Internal Enterprise Service Funds Fund Machinery and equipment $-856,546 701,447 Less accumulated depreciation (299,795)(342,182) Carrying value $556,751 359,265 29 CITY OF SEWARD Notes to General Purpose Financial Statements,continued Capitalized Leases,continued The following is a schedule of future minimum lease payments under these capital leases and the present value of the net minimum lease payments at December 31,2000: Internal Year Ending Enterprise Service December 31 Funds Fund 2001 $99,650 83,599 2002 99,715 59,680 2003 99,353 52,952 2004 103,553 - 2005 101,983 - Total minimum lease payments 504,254 196,231 Less interest 94,254 17,362 Present value of future minimum lease payments 410,000 178,869 Less current portion 70,000 75,852 Long-term portion $340,000 103,017 (11)Retirement Incentive Program . In August 1997,the City elected to participate in the Public Employees'Retirement System retirement incentive program.The program required the City to pay $80,761 to the State of Alaska in three installments of $26,920 on August 1,1998,1999,and 2000. In the six-month period ending December 31,1999,additional employees elected to retire,requiring an additional total payment of $134,533.The combined original liability totaled $215,294 with a balance outstanding at December 31,2000 of $89,690. The remaining annual installments are $44,845 in August 2001 and 2002. 30 (12) CITY OF SEWARD Notes to General Purpose Financial Statements,continued Defined Benefit Pension Plan Description of Plan The City participates in the Public Employees'Retirement System (PERS),an agent multiple employer plan which covers eligible State and local government employees.The plan was established and is administered by the State of Alaska to provide pension, postemployment healthcare,death,and disability benefits.Benefit and contribution provisions are established by State law and may be amended only by the State Legislature. The plan is included in a comprehensive annual financial report that includes financial statements and other required supplemental information.The report is available at the following address: Department of Administration Division of Retirement and Benefits P.O.Box 110203 Juneau,AK 99811-0203 Funding Policy For PERS,employees are required to contribute 6.75%(7.5%for peace officers and firefighters)of their annual covered salary.Under the plan,the funding policy provides for periodic employer contributions at actuarially determined rates that,expressed as a percentage of annual covered payroll,are sufficient to accumulate sufficient assets to pay both pension and postemployment healthcare benefits when due.The City's contribution rate for PERS for 2000 follows: January 1 July 1 to to June 30 December 31 Pension 5.17%4.82% Postemploymenthealthcare .1.92%1.96% Total contribution rate 7.09%6.78% Under the plan,employer contribution rates are level percentages of payroll and are determined using the projected unit credit actuarial funding method.The plan uses the level dollar method to amortize the unfunded liability over an open,rolling twenty-five year period.Funding surpluses are amortized over five years. Annual Pension Cost For the year period ended December 31,2000,the City's pension cost of $217,749 for PERS was equal to its required and actual contributions. 31 CITY OF SEWARD Notes to General Purpose Financial Statements,continued Defined Benefit Pension Plan,continued Annual Pension Cost,continued The required contribution was determined as part of the June 30,1997 actuarial valuation. The significant actuarial assumptions used in the valuation of the plan follow: 1. 2. 3. Investment return of 8.25%per annum,compounded annually,net of expenses; Projected salary increases of 5.5%for the first five years of employment and 4.5%per year thereafter; Health cost inflation of 6.5%in 1998,and 5.5%in 1999 and thereafter; Total inflation,as measured by the Consumer Price Index for urban and clerical workers for Anchorage,is assumed to increase 4%annually;and Asset valuation -assets are valued at fair value;the asset valuation method recognizes 20%of the investment gain or loss in each of the current and preceding four years. Three-year trend information for PERS follows: Annual Percentage Net Period Pension of APC Pension Ending Cost (APC)Contributed Obligation June 30,1999 $222,230 100%_$- December 31,1999 _107,653 100%- December 31,2000 217,749 100%- 32 (13) (14) CITY OF SEWARD Notes to General Purpose Financial Statements,continued Defined Benefit Pension Plan,continued A schedule of funding progress for PERS follows: Actuarial Actuarial Valuation Value of Date Assets June 30,1997: Pension $9,624,000 Postemployment healthcare 3,587,000 June 30,1998: Pension 10,707,000 Postemployment healthcare 4,271,000 June 30,1999: Pension 10,897,000 Postemployment healthcare 4,418,000 Unfunded (Assets in Excess of) Unfunded Liability asActuarial(Assets in PercentageAccruedExcessof)Funded Covered of Covered Liability Liability Ratio Payroll Payroll $8,922,000 $(702,000)108%$2,977,000 (24%) 3,325,000 (262,000)108%2,977,000 (9%) 10,172,000 (535,000)105%2,929,000 (18%) 4,058,000 (213,000)105%2,929,000 (7%) 10,052,000 (845,000)108%2,871,000 (29%) 4,076,000 (342,000)108%2,871,000 (12%) International Brotherhood of Electrical Workers Certain Electric Fund employees are members of the International Brotherhood of Electrical Workers,which maintains its own defined contribution pension plan.The City's contribution rate for the period from January 1 through October 8,2000,was $3 per compensable hour,increasing to $4 per compensable hour effective October 9, 2000,per terms of a new negotiated agreement expiring June 30,2003.The total contribution for the year ended December 31,2000 was $33,661. Deferred Compensation Plan The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457.The plan,available to all employees,permits them 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. 33 (1s) CITY OF SEWARD Notes to General Purpose Financial Statements,continued Deferred Compensation Plan,continued The City has amended its deferred compensation plan in accordance with changes in the Internal Revenue Code.These new provisions require that all assets and income of the plan be held in trust for the exclusive benefit of participants and their beneficiaries. Risk Management The City faces a considerable number of risks of loss,including (a)damage to and loss of property and contents,(b)employee torts,(c)professional liability;i.e.,errors and omissions,(d)environmental damage,(e)workers'compensation;i.e.,employee injuries, and (f)medical insurance costs of employees.Commercial policies,transferring the risk of loss,except for relatively small deductible amounts,are purchased for employee medical costs. The City is a member of the Alaska Municipal League Joint Insurance Association (JIA),a governmental insurance pool established by the Alaska Municipal League.The JIA provides the City coverage for property,including building and contents,automobiles, mobile equipment and data processing equipment;casualty,including general liability, public officials and employees liability,law enforcement professional liability,auto liability and employee benefit liability;workers'compensation,including employers liability;and commercial blanket bond.The City maintains supplemental marine insurance, boiler and machinery insurance and firefighters group accident coverage with insurance companies placed through JIA.The City has no coverage for potential losses from environmental damages. The JIA is a public entity risk pool organized to share risks among its members.The Association's bylaws provide for the assessment of supplemental contributions from members in the event that losses and expenses for any coverage year exceed the annual contributions and income earned on such contributions for the year.Such supplemental contributions shall be based upon each member's deposit contribution in comparison to the aggregate deposit contributions of all members.The Association made no supplemental assessments during the period ended December 31,2000. The JIA provides loss control services and conducts periodic inspections to ensure safe operations.The City has utilized an established safety committee to review and recommend safety policies and procedures for all departments.The City Council designates a portion of the General Fund balance to meet potential losses related to the JIA basic core coverages and the law enforcement liability pool (LELP).LELP was established by the JIA as a separate insurance pool for law enforcement professional hiability,including jail liability. 34 CITY OF SEWARD Notes to General Purpose Financial Statements,continued Risk Management,continued There was no significant reduction in the City's major categories of risk insurance coverage from the prior year,and the amount of settlements for the past three fiscal years did not materially exceed the City's insurance coverage. (16)Changes in Contributed Capital A summary of changes in contributed capital for the year ended December 31,2000 follows: Corrections Balance at Increase Balance at January 11,2000 Additions Deletions (Decrease)December 31,2000 Enterprise Funds: Electric $22,923,355 1,180,311 --24,103,666 Water and Sewer 11,800,940 26,359 --11,827,299 Harbor 8,268,658 3,047,608 -(1,762,649)9,613,617 SMIC 48,283,435 --1,527,247 49,810,682 Parking Revenue 376,174 ---376,174 Total Enterprise Funds $91,652,562 4,254,278 =i £175,402)25,731,438 Internal Service Fund $__505.108 4,810 :--909,918 A summary of changes in accumulated amortization of contributed capital follows: Corrections Balance at Increase Balance at January 1,2000 Additions Deletions (Decrease)December 31,2000 Enterprise Funds:- Electric $7,317,442 788,531 --8,105,973 Water and Sewer 5,540,809 298,769 --5,839,578 Harbor 1,440,016 335,091 -(255,398)1,519,709 SMIC 14,181,822 1,113,815 -957,567 16,253,204 Parking Revenue 240,756 42,589 --283,345 Total Enterprise Funds $28,720,845 2,578,795 =202,169 32,001,809 Internal Service Fund an)29,188 9,729 a -_38,917 (17)Segment Information for Proprietary Fund Types Enterprise Funds The City maintains five enterprise funds,which provide electric,water and sewer,harbor, Seward Marine Industrial Center and public parking services.Segment information for the year ended December 31,2000 follows: 35 (18) (19) CITY OF SEWARD Notes to General Purpose Financial Statements,continued Segment Information for Proprietary Fund Types,continued Total Water Parking Enterprise Electric and Sewer Harbor SMIC Revenue Funds Total operating revenues $6,467,005 1,461,305 1,508,524 453,449 121,592 10,011,875 Depreciation expense 1,234,373 377,101 397,992 1,998,841 61,913 4,070,220 Operating income (loss)550,421 52,719 (120,053)(1,826,162)(26,310)(1,369,385) Operating transfers to other funds (35,000)(76,840)(132,460)(12,386)-(256,686) Net earnings (loss)407,024 70,835 (65,724)(1,667,105)(22,070)(1,277,040) Capital contributions 1,180,311 26,359 1,344,959 1,527,247 -4,078,876 Property,plant and equipment additions 2,458,138 350,106 3,038,300 2,053 61,908 5,910,505 Property,plant and equipment deletions 16,023 -9,167 --25,190 Working capital surplus (deficiency)4,130,478 1,871,458 3,411,014 (95,869)65,821 9,382,902 Total assets 30,650,758 10,648,173 14,403,467 34,542,164 197,559 90,442,121 Bonds and other long-term liabilities 5,240,000 733,159 =3,021,322 1,591,723 -10,586,204 Fund equity 24,681,110 9,840,299 10,426,348 33,037,597 197,427 78,182,781 Harbor Enterprise Fund During the fiscal year ended June 30,1999,the City received a grant of $3,134,200 from the State of Alaska to perform repairs and renovations to the harbor facilities.At December 31,2000,$49,839 of the amount remained unexpended and is included in deferred revenue in the Harbor Enterprise Fund. Conduit Debt -Revenue Bonds On May 1,1996,the City participated in the issuance of $17,500,000 of revenue bonds to make a loan to the Seward Association for the Advancement of Marine Science (SAAMS),an Alaska nonprofit corporation,to finance a portion of the costs incurred to construct,install and equip the Alaska Sealife Center Project (the Center).The bonds are special obligations of the City,payable solely from payments made by SAAMS under the loan agreement.The bonds do not constitute a general obligation debt or pledge of the full faith and credit of the City and,accordingly the bonds are not reflected in the accompanying financial statements. 36 (20) CITY OF SEWARD Notes to General Purpose Financial Statements,continued Conduit Debt,continued The Center is a marine research facility,rehabilitation center,and public education and visitor facility located in Seward.The total cost of the Project was approximately $55,000,000. Approximately $37,500,000 of total Project costs were paid from equity contributions from grants from the State of Alaska and from Exxon Valdez oil spill settlement monies.The remaining $17,500,000 of Project costs were paid from bond proceeds.The Center and the property on which it is located are owned by the City.SAAMS has leased the Center and the property from the City and will operate the Center in accordance with an operating lease between the City and SAAMS. A schedule of the debt outstanding at December 31,2000 follows: SAAMS $16,260,000 Subsequent to year end,these bonds were paid off in their entirety. Spring Creek Correctional Center In 1985,the City undertook the financing and construction of a 320-bed,maximum security correctional facility on behalf of the State of Alaska.The facility was financed with nonrecourse certificates of lease participation and leased to the State under the terms of a long-term lease signed in 1985.The facility is currently being operated by the State. Technically,the City is the owner of the facility,however,under the terms of both the financing and lease agreements,there is no possibility of the City ever becoming liable for the debt or being obliged to take actual possession of the facility.Consequently,the City has not included the value of the facility in its general fixed assets. (21)Commitments and Contingencies Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies,principally the state and federal government.Any disallowed claims, including any amount already collected,could become a liability of the applicable funds. Various other claims and lawsuits against the city are pending,but are either covered by insurance or are the type which are normal and reasonable in view of the City's operations. City management believes the total amount of the liability,if any,which may arise from such claims and lawsuits beyond that which is covered by insurance would not have a material effect on the City's financial condition or its ability to carry on its activities as now conducted. 37 COMBINING, INDIVIDUAL FUND AND , ACCOUNT GROUP STATEMENTS AND SCHEDULES 38 GENERAL FUND The General Fund is established to account for the financial operations of the City of Seward which are not accounted for in any other fund. Revenues for this fund are recorded by source.Principal sources of revenue include property taxes,sales taxes,intergovernmental revenue, and charges for services. Expenditures are recorded first by function,then by activity and object of expenditure.General Fund expenditures are incurred for the purpose of providing basic municipal services such as police and fire protection, recreation,library,planning and zoning,legal and administrative services. CITY OF SEWARD General Fund Balance Sheet December 31,2000 with Comparative Amounts for December 31,1999 Assets Cash and investments Receivables: Taxes: Personal property Less allowance for doubtful receivables Net personal property Motor vehicle Hotel/motel room Real property Sales Net taxes Accounts Less allowance for doubtful receivables Net accounts Property assessments Less allowance for doubtful receivables Net property assessments Grants -State Accrued interest Total receivables Prepaids Inventory Due from other funds Liabilities and Fund Balance Liabilities: Accounts payable Salaries and wages payable Accrued annual leave Accrued liabilities Funds held in trust Deferred revenue Total liabilities Fund balance: Reserved for inventory and prepaids Unreserved: Designated: Working capital Unrealized gains on investments Seward Medical Center sales tax Insurance Subsequent year's expenditures Undesignated Total fund balance 39 Exhibit F-1 2000 1999 $4,401,644 3,034,481 43,288 48,959 (25,437)(40,637) 17,851 8,322 5,780 6,108 11,355 8,335 20,953 21,531 310,929 309,592 366,868 __353,888 84,569 125,055 (2,491)(2,613) 82,078 122,442 12,376 258,706 -(241,660) 12,376 17,046 13,654 54,951 172,226 221,866 647,202 770,193 28,606 190,303 7,263 4,957 212,333 156,194 $5,297,048 4,156,128 387,211 305,237 64,225 93,785 40,748 38,877 45,802 19,988 3,422 11,266 $8,177 73,713 599,585 542,866 35,869 195,260 1,500,000 1,500,000 116,252 7,226 50,852 50,852 431,138 335,778 -505,815 2,563,352 1,018,331 4,697,463 3,613,262 $5,297,048 4,156,128 CITY OF SEWARD Genera!Fund Statement of Revenues,Expenditures and Changes in Fund Balance Year Ended December 31,2000 Exhibit F-2 with Comparative Amounts for Six-Month Period Ended December 31,1999 Revenues: Taxes Licenses and permits Intergovernmental Charges for services Fines and bails Investment income Miscellaneous Total revenues Expenditures: Current: General government Public safety Public works Parks and recreation Library Debt service Total expenditures Excess of revenues over expenditures Other financing sources (uses): Operating transfers from other funds Operating transfers to other funds Net other financing sources (uses) Excess of revenues and other financing sources over expenditures and other uses Beginning fund balance Residual equity transfers to other funds Ending fund balance 40 (Six Months) 2000 1999 3,953,139 =2,255,326 139,871 73,715 984,231 438,185 2,179,832 925,721 14,786 10,748 438,005 104,719 247,461 41,956 7,957,325 3,850,370 1,592,475 864,468 1,970,643 =:1,029,356 981,027 490,459 711,721 386,599 245,710 117,411 217,780 166,080 5,719,356 3,054,373 2,237,969 795,997 179,846 455,460 (1,328,804)(884,140) (1,148,958)(428,680) 1,089,011 367,317 3,613,262 3,577,473 (4,810)(331,528) 4,697,463 3,613,262 CITY OF SEWARD General Fund Statement of Revenues,Expenditures and Changes in Fund Balance -Budget and Actual Year Ended December 31,2000 with Comparative Amounts for Six-Month Period Ended December 31,1999 Revenues: Taxes: Property Sales Payments in lieu of taxes Penalty and interest Hotel/motel room Total taxes Licenses and permits: Building permits Taxi permits Department of Motor Vehicles commissions Animal control licenses Business licenses Miscellaneous Total licenses and permits Intergovernmental: General revenue sharing Safe communities Jail contract Dispatch contract NPS dispatch contract Raw fish tax Fisheries landing tax Liquor tax Parks and recreation grant Other grants Total intergovernmental Charges for services: Administrative Rents and leases Copying charges Work orders Recreation Library Other Total charges for services Fines and bails Investment income Miscellaneous: Sale of land,equipment and gravel Refuse contract Other Total miscellaneous Total revenues Exhibit F-3 (Six Months) 2000 1999 Vanance Favorable Budget Actual (Unfavorable)Actual $560,000 694,332 134,332 $15,544 2,100,000 2,197,561 97,561 1,197,288 854,247 844,583 (9,664)419,108 3,000 4,044 1,044 1,138 168,000 212,619 44,619 122,248 3,685,247 3,953,139 267,892 2,255,326 50,000 53,638 3,638 33,398 1,500 730 (770)820 53,000 66,783 13,783 29,897 500 970 470 90 20,000 16,260 (3,740)8,190 1,000 1,490 490 1,320 126,000 139,871 13,871 73,715 67,672 90,570 22,898 102,439 41,600 73,598 31,998 83,096 363,000 363,465 465 181,733 96,500 120,500 24,000 24,250 500 2,000 1,500 1,000 213,000 263,743 50,743 814 3,000 15,134 12,134 10,846 15,000 15,000 -12,000 56,400 39,310 (17,090)22,007 6,300 911 (5,389)- 862,972 984,231 121,259 438,185 988,258 1,593,670 605,412 563,465 78,562 88,864 10,302 $0,033 32,000 31,701 (299)14,021 48,000 41,444 (6,556)21,192 405,900 395,931 (9,969)260,880 6,500 6,069 (431)2,675 24,000 22,153 (1,847)13,455 1,583,220 2,179,832 $96,612 925,721 15,000 14,786 (214)10,748 163,500 438,005 274,505 104,719 -72,384 72,384 15 44,000 49,490 5,490 29,963 66,643 125,587 58,944 11,978 110,643 247,461 136,818 41,956 6,546,582 7,957,325 1,410,743 3,850,370 41 Exhibit F-3,continued CITY OF SEWARD General Fund Statement of Revenues,Expenditures and Changes in Fund Balance - Budget and Actual,continued (Six Months) 2000 1999 Variance Favorable Budget Actual (Unfavorable)Actual Expenditures: General government: Mayor and council: Salaries $24,300 22,565 1,735 5,850 Employee benefits 1,611 2,537 (926)544 Audit 37,600 37,600 -37,600 Legal 125,000 95,759 29,241 49,984 Supplies and maintenance 16,700 11,748 4,952 6,731 Legislative representation 123,000 121,699 1,301 61,096 General and administrative 64,800 69,000 4,800 22,961 Total mayor and council 393,011 351,908 41,103 184,766 City manager: Salaries 164,599 150,053 14,546 79,628 Employee benefits 55,814 $1,705 4,109 28,697 Purchased services 15,645 5,796 9,849 2,445 Supplies and maintenance 7,300 7,327 (27)2,522 General and administrative 31,300 37,045 (5,745)13,508 Total city manager 274,658 251,926 22,732 126,800 City clerk: Salaries 99,569 88,838 10,731 46,162 Employee benefits 33,569 29,670 3,899 15,449 Purchased services 1,600 2,181 (581)684 Supplies and maintenance -120 (120)494 General and administrative 7,900 5,691 2,209 2,443 Total city clerk 142,638 126,500 16,138 65,232 Finance: Salaries 302,733 292,702 10,031 144,624 Employee benefits 127,023 117,845 9,178 62,717 Purchased services 16,300 20,774 (4,474)12,544 Supplies and maintenance 47,900 33,341 14,559 19,726 General and administrative 29,910 30,378 (468)16,057 Capital outlay 18,000 6,001 11,999 - Total finance 541,866 501,041 40,825 255,668 42 Exhibit F-3,continued CITY OF SEWARD General Fund Statement of Revenues,Expenditures and Changes in Fund Balance - Budget and Actual,continued (Six Months) 2000 1999 Variance Favorable Budget Actual (Unfavorable)Actual Expenditures,continued: General government,continued: Community development: Salaries $62,495 57,095 5,400 40,230 Employee benefits 41,648 37,927 3,721 15,103 Purchased services 31,675 29,550 2,125 4,905 Supplies and maintenance 6,800 2,613 4,187 2,013 General and administrative 6,000 5,152 848 1,177 Total community development 148,618 ©132,337 16,281 63,428 General services: Employee benefits 88,000 70,502 17,498 - Purchased services 21,500 14,320 7,180 29,766 Supplies and maintenance 40,850 43,713 (2,863)5,077 General and administrative 6,674 1,748 4,926 19,363 Capital outlay -2,865 (2,865)- Total general services 157,024 -133,148 23,876 54,206 Contributions to civic organizations: Providence Seward Medical Center 9,258 9,258 -10,412 Wesley Rehabilitation and Care Center 21,071 21,071 -23,697 Seward Life Action Council ---8,259 Senior Citizens 1,000 1,000 -1,000 Museum 1,000 1,000 -1,000 Seaview Community Services 7,343 7,343 -- Chamber of Commerce 35,000 35,000 -70,000 Miscellaneous 20,943 20,943 -- Total contributions to civic organizations 95,615 95,615 -114,368 Total general government 1,753,430 1,592,475 160,955 864,468 Public safety: Police: Salaries 671,435 ©627,241 44,194 323,253 Employee benefits 280,194 260,072 20,122 141,324 Purchased services 69,349 62,528 6,821 32,765 Supplies and maintenance 36,700 45,063 (8,363)16,470 General and administrative 24,000 31,562 (7,562)11,335 Total police 1,081,678 1,026,466 55,212 525,147 43 Exhibit F-3,continued CITY OF SEWARD General Fund Statement of Revenues,Expenditures and Changes in Fund Balance - Budget and Actual,continued (Six Months) 2000 1999 Variance Favorable Budget Actual (Unfavorable)Actual Expenditures,continued: Public safety,continued: Jail: Salaries $217,919 203,145 14,774 109,819 Employee benefits 95,512 90,409 5,103 48,798 Purchased services 19,900 17,950 1,950 9,244 Supplies and maintenance 9,100 8,604 496 2,577 General and administrative 73,042 69,978 3,064 36,546 Total jail 415,473 390,086 25,387 206,984 Animal control: Salaries -6,181 (6,181)- Employee benefits -509 (509)- Purchased services $4,625 44,745 9,880 25,508 Supplies and maintenance 2,500 2,249 251 - General and administrative 100 178 (78)- Total animal control 57,225 53,862 3,363 25,508 Fire: Salaries 109,524 105,096 4,428 $2,085 Employee benefits 42,864 41,508 1,356 21,539 Purchased services 130,000 130,060 (60)67,564 Supplies and maintenance 27,800 22,454 5,346 21,632 General and administrative 12,200 12,908 (708)6,290 Total fire 322,388 312,026 10,362 169,110 Volunteer training: Employee benefits 5,300 -5,300 - Purchased services 4,700 3,654 1,046 1,933 Supplies and maintenance 12,525 9,227 3,298 7,905 General and administrative 18,000 17,020 980 8,139 Total volunteer training -40,525 29,901 10,624 17,977 Emergency preparedness: Purchased services -18 (18)11 Supplies and maintenance 3,000 1,715 1,285 728 General and administrative 2,850 2,944 (94)913 Total emergency preparedness 5,850 4,677 1,173 1,652 44 Exhibit F-3,continued CITY OF SEWARD General Fund Statement of Revenues,Expenditures and Changes in Fund Balance - Budget and Actual,continued (Six Months) 2000 1999 Variance Favorable Budget Actual (Unfavorable)Actual Expenditures,continued: Public safety,continued: Engineer and utility manager: Salaries $65,831 68,248 (2,417)40,487 Employee benefits 23,063 27,842 (4,779)15,864 Purchased services 11,750 10,224 1,526 4,846 Supplies and maintenance 3,500 2,767 733 355 General and administrative 5,800 4,782 1,018 1,597 Capital outlay 3,000 -3,000 - Total engineer and utility manager 112,944 113,863 (919)63,149 Building inspector: Salaries 26,432 22,679 3,753 13,597 Employee benefits 4,832 4,810 22 1,983 Purchased services 5,950 5,783 167 2,743 Supplies and maintenance 2,100 1,028 1,072 666 General and administrative 11,250 5,462 5,788 840 Total building inspector 50,564 39,762 10,802 19,829 Total public safety 2,086,647 1,970,643 116,004 1,029,356 Public works: Roads and streets: Salaries 174,151 219,667 (45,516)104,034 Employee benefits 79,396 84,276 (4,880)37,727 Purchased services 210,611 131,637 78,974 73,393 Supplies and maintenance 112,989 167,357 (54,368)68,220 General and administrative 6,525 14,537 (8,012)2,634 Capital outlay ---20,970 Total roads and streets 583,672 617,474 (33,802)306,978 City shop: Salaries 118,470 85,381 33,089 35,546 Employee benefits 73,569 $8,152 15,417 27,583 Purchased services 38,909 37,826 1,083 17,073 Supplies and maintenance 21,310 27,170 (5,860)17,099 General and administrative 850 1,311 (461)701 Capital outlay ---969 Total city shop 253,108 209,840 43,268 98,971 45 Exhibit F-3,continued CITY OF SEWARD General Fund Statement of Revenues,Expenditures and Changes in Fund Balance - Budget and Actual,continued (Six Months) 2000 1999 Variance Favorable Budget Actual (Unfavorable)Actual Expenditures,continued: Public works,continued: Municipal building: Salaries $47,013 46,550 463 20,973 Employee benefits 21,662 18,089 3,573 8,864 Purchased services 83,450 63,142 20,308 46,391 Supplies and maintenance 22,850 25,506 (2,656)7,940 General and administrative 400 426 (26)342 Total municipal building 175,375 153,713 21,662 84,510 Total public works 1,012,155 981,027 31,128 490,459 Parks and recreation: Salaries 371,478 351,464 20,014 176,146 Employee benefits 124,758 116,597 8,161 51,952 Purchased services 153,298 131,001 22,297 95,064 Supplies and maintenance 61,950 65,356 (3,406)25,947 General and administrative 45,300 47,303 (2,003)29,642 Capital outlay ---7,848 Total parks and recreation 756,784 711,721 45,063 386,599 Library: Salaries 116,213 118,220 (2,007)$7,668 Employee benefits 54,691 51,869 2,822 26,457 Purchased services 25,750 29,892 (4,142)12,763 Supplies and maintenance 36,500 32,297 4,203 16,862 General and administrative 13,250 10,932 2,318 3,661 Capital outlay 2,000 2,500 (500)- Total library 248,404 245,710 2,694 117,411 Debt service: Principal 119,123 119,123 -113,240 Interest 98,657 98,657 -52,840 Total debt service 217,780 217,780 -166,080 Total expenditures 6,075,200 5,719,356 355,844 3,054,373 Excess of revenues over expenditures 471,382 2,237,969 1,766,587 795,997 46 Exhibit F-3,continued CITY OF SEWARD General Fund Statement of Revenues,Expenditures and Changes in Fund Balance - Budget and Actual,continued (Six Months) 2000 1999 Variance Favorable Budget Actual (Unfavorable)Actual Other financing sources (uses): Operating transfers from other funds $179,846 179,846 -455,460 Operating transfers to other funds (1,328,804)(1,328,804)-(884,140) Net other financing sources (uses)(1,148,958)(1,148,958)-(428,680) Excess of revenues and other financing sources over (under)expenditures and other uses (677,576)1,089,011 1,766,587 367,317 Beginning fund balance 3,613,262 3,613,262 -3,577,473 Residual equity transfers to other funds (4,810)(4,810)-(331,528) Ending fund balance $2,930,876 4,697,463 1,766,587 3,613,262 47 THIS PAGE LEFT BLANK INTENTIONALLY 48 SPECIAL REVENUE FUNDS The Special Revenue Funds are used to account for revenues from specific sources, which are restricted to finance particular functions and activities.Funding sources include external grants and operating transfers from the General Fund. SPECIAL REVENUE FUNDS Special Revenue Funds are used to account for expenditures associated with dedicated or restricted revenue sources. Bicycle Safety -To account for the costs of a bicycle rodeo and bike safety days for pre-school,elementary and junior high school students.The program promotes bicycle/pedestrian safety,and teaches children to prevent bicycle theft.Costs include the purchase of bicycle helmets,paint,signs,poles,striper,posters etc. Litter Control (ALPAR)-To account for the cost of a City-administered litter control program.The program employs local youth and is financed by grants from the non-profit Alaskans for Litter Prevention and Recycling and the Kenai Peninsula Borough. Two Lakes Park -To account for acquisition of land,survey and development of the park area,including site preparation,picnic tables,and other improvements. Public Library -To account for the costs of administering the state public library grant,including the purchase of library materials,supplies and equipment. Police Fund -To account for costs incurred for certain police-related activities with monies provided by the federal government,State of Alaska and City of Seward. DARE Program -To account for monies received and expended related to Drug Awareness Resistance Education. Avalanche 2000 -To account for the costs of repairing and mitigating damage to electric infrastructure,roads,and other City facilities,resulting from a major avalanche event in February 2000. High Risk Traffic Enforcement -To account for the costs of improving traffic safety enforcement in the community,including the purchase of radar speed detection equipment and video surveillance systems,as well as providing a radar certification course. 49 SPECIAL REVENUE FUNDS,continued Seward Comprehensive Plan -To account for the costs of updating the Seward Comprehensive Plan and preparing and producing the Comprehensive Plan document. Historic Records Preservation Phase II --Supplements the prior preservation grant. Seward Community Cemetery -To account for the refurbishment of the Seward community cemetery,provide for improved access to cemetery sites,upgrade and straighten the existing road,plat land to establish formal grave sites,and clear and level 75 new grave sites. Computer Network/Web Page -To account for the costs of implementing Phase 1 of the City-funded computer network,including development of a City web page to improve citizen access to public information. Seward Life Action Council Pass-Through -To account for a pass-through grant to the Seward Life Action Council,for the purpose of improving handicapped access to their health care facilities. 50 THIS PAGE LEFT BLANK INTENTIONALLY '51 Exhibit G-1 CITY OF SEWARD Special Revenue Funds Combining Balance Sheet December 31,2000 with Comparative Totals for December 31,1999 Other Totals Parks and _Public General Assets Recreation Safety Government 2000 1999 Cash and investments $28,994 2,890 51,996 83,880 56,388 Receivables: Federal grants -8,887 -8,887 115,965 State grants -2,962 -2,962 1,272 Other.-26,875 -26,875 - $28,994 41,614 51,996 122,604 173,625 Liabilities and Fund Balances Liabilities: Accounts payable -640 4,709 5,349 47,643 Deferred revenue 8,434 -22,751 31,185 35,067 Due to other funds -38,724 -38,724 65,210 Total liabilities 8,434 39,364 27,460 75,258 147,920 Fund balances -unreserved and undesignated 20,560 2,250 24,536 47,346 25,705 $28,994 41,614 51,996 122,604 173,625 52 CITY OF SEWARD Special Revenue Funds Combining Statement of Revenues,Expenditures and Changes in Fund Balances Year Ended December 31,2000 with Comparative Totals for Six-Month Period Ended December 31,1999 Exhibit G-2 Other Totals Parks and Public Public General Pass -(Six Months) Recreation Library Safety Government Through 2000 1999 Revenues: Federal grants $750 -137,372 --138,122 70,849 State grants -6,155 45,790 4,351 6,614 62,910 106,492 Miscellaneous 2,769 -307,528 4,709 -315,006 109,242 Total revenues 3,519 6,155 490,690 9,060 6,614 516,038 286,583 Expenditures: Salaries and employee benefits 2,348 -103,677 1,053 -107,078 4,983 Contracted services -1,619 220,614 6,569 -228,802 71,190 Supplies 1,280 4,536 21,200 1,107 -28,123 2,388 Pass-through payments ------203,952 Other services and charges 60 -147,075 473 6,614 154,222 9,219 Total expenditures 3,688 6,155 492,566 9,202 6,614 518,225 291,732 Excess of revenues over (under) expenditures (169)-(1,876)(142)-(2,187)(5,149) Other financing sources -operating transfers from other funds --1,828 22,000 -23,828 1,534 Excess of revenues and other financing sources over (under)expenditures (169)-(48)21,858 -21,641 (3,615) Beginning fund balances 20,729 -2,298 2,678 -25,705 29,320 2,250 24,536 -47,346 25,705Endingfundbalances$20,560 - 53 CITY OF SEWARD Parks and Recreation Special Revenue Funds Combining Balance Sheet Exhibit G-3 December 31,2000 Two Litter Lakes Assets Control Park Totals Cash and investments $8,434 20,560 28,994 Liabilities and Fund Balances Liabilities -deferred revenue 8,434 -8,434 Fund balances -unreserved and undesignated -20,560 20,560 $8,434 20,560 28,994 54 Exhibit G-4 CITY OF SEWARD Parks and Recreation Special Revenue Funds Combining Statement of Revenues,Expenditures and Changes in Fund Balances Year Ended December 31,2000 Two Bicycle Litter Lakes Safety Control Park Totals Revenues: Federal grants $750 --750 Miscellaneous -2,769 -2,769 Total revenues 750 2,769 -3,519 Expenditures: Salaries and employee benefits >2,348 -2,348 Supplies 919 361 -1,280 Other services and charges -60 -60 Total expenditures 919 2,769 -3,688 Excess of revenues over (under)expenditures (169)--(169) Beginning fund balances 169 -20,560 20,729 Ending fund balances .$--20,560 20,560 55 CITY OF SEWARD Public Safety Special Revenue Funds Assets Cash and investments Receivables: Federal grantsStategrants Other Liabilities and Fund Balances Combining Balance Sheet Exhibit G-5 Liabilities: Accounts payable Due to other funds Total liabilities Fund balances -unreserved and undesignated December 31,2000 High Risk Avalanche Traffic DARE 2000 Enforcement Totals 640 -2,250 2,890 -8,887 -8,887 -2,962 -2,962 -26,875 -26,875 640 38,724 2,250 41,614 640 --640 -38,724 -38,724 640 38,724 -39,364 --2,250 2,250 640 38,724 2,250 41,614 56 Exhibit G-6 CITY OF SEWARD Public Safety Special Revenue Funds Combining Statement of Revenues,Expenditures and Changes in Fund Balances Year Ended December 31,2000 High Risk Police Avalanche Traffic Fund DARE 2000 Enforcement Totals Revenues: Federal grants --137,372 -137,372 State grants --45,790 -45,790 Miscellaneous -25 307,503 -307,528 Total revenues $-25 490,665 -490,690 Expenditures: Salaries and employee benefits --103,677 -/-103,677 Contracted services --220,614 -220,614 Supplies -1,853 19,347 -21,200 Other services and charges 48 -147,027 -147,075 Total expenditures 48 1,853 490,665 -492,566 Excess of revenues over (under) expenditures (48)(1,828)--(1,876) Other financing sources - operating transfers from other funds -1,828 --1,828 Excess of revenues and other financing sources over (under) expenditures (48)---(48) Beginning fund balances 48 --2,250 2,298 Ending fund balances $---2,250 2,250 57 CITY OF SEWARD Other General Government Special Revenue Funds Combining Balance Sheet Exhibit G-7 December 31,2000 Seward Historic Compre-_-Records Seward Computer hensive Preservation Community Network/ Assets Plan Phase II Cemetery Web Page Totals Cash and investments $26,934 1,000 2,062 22,000 51,996 Liabilities and Fund Balances Liabilities: Accounts payable 4,709 ---4,709 Deferred revenue 22,225 526 --22,751 Total liabilities 26,934 526 --27,460 Fund balances -unreserved and undesignated -474 2,062 22,000 24,536 $26,934 1,000 2,062 22,000 51,996 38 Exhibit G-8 CITY OF SEWARD Other General Government Special Revenue Funds Combining Statement of Revenues,Expenditures and Changes in Fund Balances Year Ended December 31,2000 Seward Historic Compre-Records Seward Computer hensive Preservation Community Network/ Plan Phase II Cemetery WebPage Totals Revenues: State grants $-743 3,608 -4,351 Miscellaneous 4,709 ---4,709 Total revenues 4,709 743 3,608 -9,060 Expenditures: Salaries and employee benefits -805 248 -1,053 Contracted services 4,709 -1,860 -6,569 Supplies --1,107 -1,107 Other services and charges -80 393 -473 Total expenditures 4,709 885 3,608 -9,202 Excess of revenues over (under). expenditures -(142)--(142) Other financing sources -operating transfers from other funds ---22,000 22,000 Excess of revenues and other financing sources over (under)expenditures -(142)-22,000 21,858 Beginning fund balances -616 2,062 -2,678 Ending fund balances $-474 2,062 22,000 24,536 59 THIS PAGE LEFT BLANK INTENTIONALLY 60 DEBT SERVICE FUND The Debt Service Fund is used to account for the accumulation of resources for payment of the $7,500,000 in general obligation bonds issued for construction of a new medical center,and the retirement of the liability to the State of Alaska Public Employees Retirement System resulting from the dissolution of the Seward General Hospital Enterprise Fund. Exhibit H-1 CITY OF SEWARD Debt Service Fund Balance Sheet December 31,2000 with Comparative Amounts for December 31,1999 Assets 2000 1999 Cash and investments $564,909 429,829 Fund Balance Fund balance -reserved for debt service $564,909 429.829 61 Exhibit H-2 CITY OF SEWARD Debt Service Fund Statement of Revenues,Expenditures and Changes in Fund Balance Year Ended December 31,2000 'with Comparative Amounts for Six-Month Period Ended December 31,1999 (Six Months) 2000 1999 Revenues -investment income $25,352 10,168 Expenditures: Interest payments 388,217 198,978 Principal payments 235,000 205,000 Total expenditures 623,217 403,978 Excess of revenues over (under)expenditures (597,865)(393,810) Other financing sources -operating transfers from other funds 732,945 487,544 Excess of revenues and other financing sources over expenditures 135,080 93,734 Beginning fund balance 429,829 336,095 Ending fund balance $564,909 429,829 62 CAPITAL PROJECT FUNDS The Capital Project Funds are established to account for the resources expended to acquire assets of a relatively permanent nature.These funds are established for the purpose of segregating the accounting for bond proceeds,grants and contributions for the acquisition of capital assets. Capital Project Funds provide a formal mechanism which enables administrators to ensure that revenues dedicated to a certain purpose are used only for that purpose,and further enables them to report to creditors and other grantors of Capital Project Fund revenue,that their requirements regarding the use of the revenue were fully satisfied. CAPITAL PROJECT FUNDS Capital Project Funds are established to account for the resources expended to acquire assets of a relatively permanent nature. Gateway Subdivision -To account for the cost of acquiring lots and developing apark.Monies are provided by a State grant and the City. Bike Path Continuation -To account for the construction of a high school bike path extension.Monies were provided through a State matching grant. Ballfield -To account for the cost of a new community softball field called "Citizens Field.”Funding is provided by the City. Campground ADA and Waterfront Improvements To account for the costs of providing wheelchair accessible camping and parking sites at Waterfront Park,as well as to construct a recreational vehicle sewer dump station. City Playgrounds -To account for the costs of upgrading,repairing and constructing tot lots and playgrounds in the City. Hoben Park -To account for improvements to Hoben Park,located adjacent to the Alaska SeaLife Center,including removal and replacement of fencing,monuments and trees,and installation of a sidewalk. Firehose Replacement -To account for the cost of fire hose replacement. Flood Mitigation -To account for the costs of engineering and construction of a levee at Japanese Creek,to mitigate flooding at Resurrection River. 911 Equipment Replacement -To account for the costs of upgrading the City's 911 emergency telephone equipment,including the purchase of recording equipment. Seward Association for Advancement of Marine Science -To account for the development of the Alaska Sealife Center as a recreation and marine mammal rehabilitation center and as a center for education and research related to the natural resources injured by the Exxon Valdez oil spill and to the prevention and amelioration of marine spills.Monies are provided primarily by grants from the federal government,State of Alaska and the Exxon Valdez Oil Spill Trustee Council. Capital Acquisition -To account for purchase of equipment not financed by the Motor Pool Fund and capital improvements and projects of at least $20,000. Funding is provided as available from the General Fund. Streets and Sidewalks -To account for the cost of repairing and installing new sections of sidewalks,curbs and gutters,and to improve handicapped accessibility of sidewalks. 63 CAPITAL PROJECT FUNDS,continued Hospital Construction -To account for the cost of constructing the new hospital. Funding is provided primarily by the 1996 hospital bond issue for $7.5 million. Fuel Tank -To account for the costs of removing an underground storage tank used by city hall and the fire hall,and replacing that fuel tank above ground.The project also includes building a housing structure to secure the tank. Firehall Roof Repair -To account for the cost of repairing and/or replacing the roof at the firehall. Street Improvements -to account for the costs of reconditioning portions of Ballaine Boulevard,Bear Drive,and Marathon Drive. City Hall Facilities and Equipment -To account for the costs of replacing aging lighting ballasts and fixtures throughout the City Hall building,as well as replacing some areas of worn carpet. Library Information and Technology -To account for the costs of improving the information technology resources at the Seward Community Library,such as installing an automated cataloging and circulation system,and providing improved access to the Internet for patron use. 64 THIS PAGE LEFT BLANK INTENTIONALLY 65 CITY OF SEWARD Capital Project Funds Combining Balance Sheet December 31,2000 with Comparative Totals for December 31,1999 Other Parks and Public General Totals Assets Recreation Safety Government 2000 1999 Cash and investments $63,173 3 591,093 654,269 912,454 Receivables: Federal grants -235,548 -235,548 - State grants ----109,701 Other -1,000 43,565 44,565 30,236 $63,173 236,551 634,658 934,382 1,052,391 Liabilities and Fund Balances Liabilities: Accounts payable 2,896 71,851 43,895 118,642 54,181 Deferred revenue ----9,796 Due to other funds 8,912 164,697 -173,609 70,296 Total liabilities 11,808 236,548 43,895 292,251 134,273 Fund balances -unreserved -designated for capital improvements $1,365 3 $90,763 642,131 918,118 $63,173 236,551 634,658 934,382 1,052,391 66 CITY OF SEWARD Capital Project Funds Combining Statement of Revenues,Expenditures and Changes in Fund Balances Year Ended December 31,2000 with Comparative Totals for Six-Month Period Ended December 31,1999 Exhibit J-2 Library Other Information Totals Parks and _-Public General and (Six Months) Recreation Safety Goverment Technology 2000 1999 Revenues: Federal grants $-303,606 --303,606 - State grants 68,492 6,310 99,274 4,421 178,497 313,260 Investment income - :-20,732 -20,732 19,200 Other oe -34,197 -34,197 - Total revenues 68,492 309,916 154,203 4,421 537,032 332,460 Expenditures: Salaries and employee benefits 16,647 11,485 -608 28,740 17,831 Contracted services 69,044 286,791 306,576 -662,411 126,114 Equipment -2,183 116,012 6,107 124,302 88,650 Land --155,089 -155,089 51,096 Supplies 40,154 1,146 4,428 7,519 53,247 23,572 Pass-through payments --99,274 -99,274 149,826 Other services and charges 11,627 9,489 31,406 1,172 53,694 26,909 Total expenditures 137,472 311,094 712,785 15,406 =--1,176,757 483,998 Excess of revenues over (under)expenditures (68,980)(1,178)(558,582)(10,985)(639,725)(151,538) Other financing sources (uses): Operating transfers from other funds --553,640 -553,640 244,57] Operating transfers to other funds --(189,902)-(189,902)(100,000) Net other financing sources (uses)--363,738 -363,738 144,571 Excess of revenues and other financing sources over (under) expenditures and other uses .(68,980)(1,178)=(194,844)=(10,985)=(275,987)(6,967). Beginning fund balances 120,345 1,181 785,607 10,985 918,118 925,085 Ending fund balances $$1,365 3 590,763 -642,131 918,118 67 Assets Cash and investments Liabilities and Fund Balances (Deficit) CITY OF SEWARD Parks and Recreation Capital Project Funds Combining Balance Sheet Exhibit I-3 Liabilities: Accounts payable Due to other funds Total liabilities Fund balances (deficit)-unreserved - designated for capital improvements December 31,2000 Campground ADA and City Gateway Bike Path Waterfront Play-Hoben Subdivision Continuation Ballfield Improvements grounds Park Totals -2,438 1,874 951 7,916 49,994 63,173 1,947 ---949 -2,896 8,912 -----8,912 10,859 ---949 -11,808 (10,859)2,438 1,874 951 6,967 49,994 51,365 7,916 49,994 63,173-2,438 1,874 951 68 Exhibit I-4 CITY OF SEWARD Parks and Recreation Capital Project Funds Combining Statement of Revenues,Expenditures and Changes in Fund Balances (Deficit) Year Ended December 31,2000 Campground ADA and City Gateway Bike Path Waterfront Play-Hoben Subdivision Continuation Ballfield Improvements grounds Park Totals evenues -State grants -$15,707 46,290 -1,268 -5,227 68,492 ixpenditures: Salaries and employee benefits 4,750 1,501 -7,244 3,113 39 16,647 Contracted services 778 46,056 9,713 11,701 796 :69,044 Supplies 11,371 2,244 -12,224 8,705 5,610 40,154 Other services and charges 1,690 4,980 -3,131 1,261 565 11,627 Total expenditures 18,589 $4,781 9,713 34,300 13,875 6,214 137,472 Excess of revenues over (under)expenditures (2,882)(8,491)(9,713)(33,032)(13,875)(987)(68,980) 3eginning fund balances (deficit)(7,977)10,929 11,587 33,983 20,842 50,981 120,345 inding fund balances (deficit)$(10,859)2,438 1,874 951 6,967 49,994 51,365 69 CITY OF SEWARD Public Safety Capital Project Funds Combining Balance Sheet December 31,2000 Assets Cash and investments Receivables: Federal grants Other Liabilities and Fund Balances. Liabilities: Accounts payable Due to other funds Total liabilities Fund balances -unreserved -designated for capital improvements 70 Exhibit I-5 Flood Equipment .Mitigation Replacement Totals -3 235,548 235,548 1,000 1,000 236,548 236,551 71,851 71,851 164,697 164,697 236,548 236,548 -3 236,548 236,551 CITY OF SEWARD Public Safety Capital Project Funds Combining Statement of Revenues,Expenditures and Changes in Fund Balances Year Ended December 31,2000 Firehose 911 Replace-Flood Equipment ment Mitigation Replacement Totals Revenues: Federal grants $-303,606 -303,606 State grants 1,935 -4,375 6,310 Total revenues 1,935 303,606 4,375 309,916 Expenditures: Salaries and employee benefits -11,485 -11,485 Contracted services -282,862 3,929 286,791 Equipment 2,183 --2,183 Supplies -126 1,020 1,146 Other services and charges 109 9,133 /247 9,489 Total expenditures 2,292 303,606 5,196 311,094 Excess of revenues over (under)expenditures (357)©-(821)(1,178) Beginning fund balances 357 -824 1,181 Ending fund balances $--3 3 71 Exhibit I-6 Assets Cash and investments Other receivables Liabilities and Fund Balances Liabilities -accounts payable Fund balances -unreserved -designated for capital improvements CITY OF SEWARD Other General Government Capital Project Funds Combining Balance Sheet December 31,2000 Exhibit 1-7 Seward Association for City Hall Advancement Firehall Street Facilities of Marine Capital Streetsand Hospital Roof -Improve-and Science Acquisition Sidewalks Construction Fuel Tank Repair ments Equipment Totals -206,278 §,542 320,133 8,995 34,737 878 14,530 591,093 43,565 ---:---43,565 43,565 206,278 5,542 320,133 8,995 34,737 878 14,530 634,658 43,565 ---:330 --43,895 :206,278 §,542 320,133 8,995 34,407 878 14,530 590,763 43,565 206,278 5,542 320,133 8,995 34,737 878 14,530 634,658 72 Revenues: State grants Investment income Other Total revenues Expenditures: Contracted services Equipment Land Supplies Pass-through payments Other services and charges Total expenditures Excess of revenues over (under)expenditures Other financing sources (uses): Operating transfers from other funds Operating transfers to other funds Net other financing sources (uses) Excess of revenues and other financing sources over (under) expenditures and other uses Beginning fund balances Ending fund balances Other General Government Capital Project Funds Combining Statement of Revenues,Expenditures CITY OF SEWARD and Changes in Fund Balances Year Ended December 31,2000 Exhibit 1-8 Seward Association for City Hall Advancement Firehall Street Facilities of Marine Capital Streets and _Hospital Roof Improve-and Science Acquisition Sidewalks Construction Fuel Tank Repair ments Equipment Totals $99,274 -:-:---99,274 -13,354 -20,843 :.:-34,197 732 20,000 ----:-20,732 100,006 33,354 -20,843 ..:-154,203 ---4,275 1,345 55,202 245,754 -306,576 ----116,012 --:-116,012 :155,089 --.---155,089 -----4,428 --4,428 99,274 -------99,274 732 ::-135 5,963 24,576 .31,406 100,006 155,089 -120,287 1,480 65,593 270,330 -712,785 -(121,735)-(99,444)(1,480)(65,593)(270,330)-(558,582) -227,902 ---40,000 271,208 14,530 553,640 -(189,902)--:-:.(189,902) -38,000 ---40,000 271,208 14,530 363,738 -(83,735)-(99,444)(1,480)=(25,593)878 14,530 =(194,844) -290,013 5,542 419,577 10,475 60,000 .-785,607 $-206,278 5,542 320,133 8,995 34,407 878 14,530 590,763 73 THIS PAGE LEFT BLANK INTENTIONALLY 74 ENTERPRISE FUNDS Enterprise Funds are established to account for the financing of self-supporting activities of governmental units,which render services to the general public on a user-charge basis.Enterprise Funds are maintained on the accrual basis of accounting. Electric -To account for the provision of electrical service to the residents of the City and other areas within the electric service area. Water and Sewer -To account for the provision of water and sewer services to the residents of the City. Harbor -To account for the provision of harbor and marine services within the Small Boat Harbor basin to the public. Seward Marine Industrial Center (SMIC)-To account for the provision of marine- related services to the public on the east side of Resurrection Bay. Parking Revenue -To account for the provision of public parking services. 75 Exhibit J-1 CITY OF SEWARD Enterprise Funds Combining Balance Sheet December 31,2000 with Comparative Totals for December 31,1999 Water _Totals Assets Electric and Sewer Harbor SMIC Parking 2000 1999 Current assets: Cash and investments $4,480,594 1,875,403 4,106,828 105,826 65,953 10,634,604 -10,152,734 Receivables: Accounts 620,059 101,342 213,103 34,002 -968,506 1,007,764 Grants --4,484 --4,484 9,032 Other 24,912 3,007 1,072 --28,991 3,656 Less allowance for doubtful receivables (28,964)(4,560)(21,637)--(55,161)(63,882) Net accounts receivable 616,007 99,789 197,022 34,002 -946,820 956,570 Cash held by fiscal agent 155,000 -- . --155,000 155,500 Inventory 490,542 26,757 .---$17,299 554,618 Total current assets 5,742,143 2,001,949 4,303,850 139,828 65,953 12,253,723 -_--11,819,422 Restricted assets -cash and investments restricted for bond retirement 307,205 -248,518 --555,723 307,205 Assessments receivable 91,975 141,914 61,079 --294,968 279,903 Property,plant and equipment: Property,plant and equipment in service 39,843,944 15,050,698 9,087,531 52,159,567 438,082 116,579,822 116,039,139 Less accumulated depreciation (17,553,947)(6,887,259)(2,621,500)(17,774,243)(288,376)(45,125,325)(41,039,560) Net property,plant and equipment in service 22,289,997 8,163,439 6,466,031 34,385,324 149,706 71,454,497 =74,999,579 Construction in progress 2,193,332 340,871 3,323,989 --5,858,192 454,725 Total property,plant and equipment 24,483,329 8,504,310 9,790,020 34,385,324 149,706 77,312,689 75,454,304 Deferred charges -unamortized debt issuance costs 26,106 --17,012 -43,118 51,188 $30,650,758 10,648,173 14,403,467 34,542,164 215,659 90,460,221 87,912,022 76 ' Liabilities and Fund Equity "abilities: Current liabilities: Accounts payable $ Current portion: Bonds payable Notes payable Capital lease obligations Retirement incentive program payable Customer deposits Accrued annual leave Accrued interest Other accrued liabilities Deferred revenue Due to other funds Total current liabilities Deferred revenue -Alaska Railroad Corporation loan receivable Long-term debt,excluding current portion: Bonds payable Less unamortized deferred amount on refunding Notes payable Capital lease obligations Retirement incentive program payable Total long-term debt Total liabilities Fund equity: Contributed capital Less accumulated amortization Net contributed capital Retained earnings (deficit)-unreserved Total fund equity $ Combining Balance Sheet,continued CITY OF SEWARD Enterprise Funds Exhibit J-1,continued Water Totals Electric and Sewer Harbor SMIC Parking 20)1999 594,510 47,220 338,579 4,075 90 984,474 240,957 760,000 --339,995 -899,995 835,878 -46,118 ---46,118 40,636 ---70,000 -70,000 65,000 -9,658 10,661 --20,319 22,978 143,319 ----143,319 150,096 48,352 14,361 40,708 --103,421 110,361 46,676 5,002 8,366 12,789 -72,833 77,916 18,808 8,132 35,963 1,838 42 64,783 42,239 --458,559 7,000 -465,559 3,702,569 :---:-20,688 1,611,665 130,491 892,836 235,697 132 2,870,821 5,309,318 -:73,622 --73,622 107,312 4,480,000 -3,000,000 1,041,728 -8,521,728 6,421,723 (122,017)-:(112,858)-(234,875)(277,038) -667,726 -:-667,726 713,842 ---340,000 -340,000 410,000 -9,657 10,661 --20,318 21,321 4,357,983 677,383 3,010,661 1,268,870 -9,314,897 7,289,848 5,969,648 807,874 3,977,119 1,504,567 132 12,259,340 12,706,478 24,103,666 11,827,299 9,613,617 49,810,682 376,174 95,731,438 91,652,562 (8,105,973)(5,839,578)(1,519,709)(16,253,204)(283,345)(32,001,809)(28,720,845) 15,997,693 5,987,721 8,093,908 33,557,478 92,829 63,729,629 62,931,717 8,683,417 3,852,578 2,332,440 (519,881)122,698 14,471,252 12,273,827 24,681,110 9,840,299 10,426,348 33,037,597 215,527 -78,200,881 75,205,544 30,650,758 10,648,173 14,403,467 34,542,164 215,659 90,460,221 87,912,022 77 THIS PAGE LEFT BLANK INTENTIONALLY 78 ENTERPRISE FUNDS The Enterprise Funds are established to account for the financing of self- supporting activities of governmental units which render services to the general public on a user-charge basis.Enterprise Funds are maintained on the accrual basis of accounting. ExhibitJ-2 CITY OF SEWARD Enterprise Funds Combining Statement of Revenues, Expenses and Changes in Retained Earnings (Deficit) Year Ended December 31,2000 with Comparative Totals for Six-Month Period Ended December 31,1999 Totals Water (Six Months) Electric and Sewer Harbor SMIC Parking 2000 1999 yerating revenues $6,467,005 1,461,305 1,508,524 453,449 121,592 10,011,875 5,096,302 Operating expenses 4,682,211 1,031,485 1,230,585 280,770 85,989 7,311,040 3,451,997 Earnings from operations before depreciation 1,784,794 429,820 277,939 172,679 35,603 2,700,835 1,644,305 epreciation 1,234,373 377,101 397,992 1,232,863 43,813 3,286,142 1,574,424 Earnings (loss)from operations 550,421 $2,719 (120,053)(1,060,184)(8,210)(585,307)69,881 onoperating revenues (expenses): Gain (loss)on disposal of property and equipment --301 --301 (10,617) Investment income 233,757 102,470 186,488 10,564 4,240 $37,519 295,699 Interest expense (346,252)(32,315)-(124,254)-(502,821)(268,178) Other revenues 4,098 24,800 ---28,898 101 Net nonoperating revenues (expenses)(108,397)94,955 186,789 (113,690)4,240 63,897 17,005lEamings(loss)before operating 7 transfers 442,024 147,674 66,736 (1,173,874)(3,970)(521,410)86,886 \perating transfers from other funds ---285,133 -285,133 279,986 Operating transfers to other funds .(35,000)(76,840)(132,460)(12,386)-(256,686)(484,955) Net operating transfers (35,000)(76,840)(132,460)272,747 -28,447 (204,969) Net earnings (loss)407,024 70,834 (65,724)(901,127)(3,970)(492,963)(118,083) ncrease (decrease)in retained earnings for corrections to contributed capital and accumulated depreciation --1,447,251 (1,335,658)-111,593 9,733 Amortization of contributed capital 788,531 298,769 335,091 1,113,815 42,589 2,578,795 -_'1,235,438 Increase (decrease)in retained earnings 1,195,555 369,603 =1,716,618 (1,122,970)38,619 2,197,425 1,127,088 3epinning retained earnings 7,487,862 3,482,975 615,822 603,089 84,079 12,273,827 11,573,710 Yesidual equity transfers to other funds ------(426,971) Ending retained earnings (deficit)$8,683,417 3,852,578 2,332,440 (519,881)122,698 14,471,252 12,273,827 79 : CITY OF SEWARD Enterprise Funds Combining Statement of Cash Flows Year Ended December 31,2000 with Comparative Totals for Six-Month Period Ended December 31,1999 Exhibit J-3 Totals Water (Six Months) Electric and Sewer Harbor SMIC Parking 2000 1999 Cash flows from operating activities: Earnings (loss)from operations $550,421 52,719 (120,053)(1,060,184)(8,210)(585,307)69,881 Adjustments to reconcile earnings (loss)from operations to net cash flows from operating activities: Depreciation 1,234,373 377,101 397,992 1,232,863 43,813 3,286,142 1,574,424 Other nonoperating revenues 3,509 ----3,509 3 Increase (decrease)in allowance for . doubtful receivables (2,855)(598)(5,268)--(8,721)13,533 (Increase)decrease in assets: Receivables 65,773 (62,454)19,704 (1,713)-21,310 186,615 Inventory 37,755 (436)---37,319 8,549 Increase (decrease)in liabilities: Accounts payable 405,795 34,623 306,457 484 (3,842)743,517 (26,200) Customer deposits (6,777)----(6,777)(41,366) Accrued annual leave (10,739)764 3,035 --(6,940)(1,158) Other accrued liabilities (39,243)2,374 20,281 735 42 (15,811)5,743 Due to other funds ---(20,688)-(20,688)(26,025) Deferred revenue --(16,208)(17,328)-(33,536)14,610 Retirement incentive program payable , -19,315 (22,977)--(3,662)19,665 Net cash flows from operating activities 2,238,012 423,408 $82,963 134,169 31,803 3,410,355 1,798,274 Cash flows from noncapital financing activities: Operating transfers from other funds ---285,133 -285,133 279,986 Operating transfers to other funds .(35,000)(76,840)(132,460)(12,386)-(256,686)(484,955) Operating grants received -24,800 ---24,800 - Residual equity transfers to other funds "-----(50,797) Net cash flows from noncapital financing activities (35,000)(52,040)(132,460)272,747 -$3,247 (255,766) 80 Exhibit J-3,continued CITY OF SEWARD Enterprise Funds Combining Statement of Cash Flows,continued Totals Water (Six Months) Electric and Sewer Harbor SMIC Parking 2000 1999 Zash flows from capital and related financing activities: Decrease in due from other funds $------46,713 Proceeds from issuance of long-term debt -:3,008,366 --3,008,366 : Principal payments on long-term debt (700,000)(40,634)-(200,878)-(941,512)(665,771) Interest payments on long-term debt (286,355)(32,604)-(108,723)-(427,682)(267,158) Cash held by fiscal agent 500 ----500 (155,500) Acquisition of property,plant and equipment (2,458,138)(350,106)(3,038,300)(2,053)(61,908)(5,910,505)(458,374) Collections on special assessments 22,992 19,075 2,142 --44,209 2,632 Proceeds from sale of property and equipment --301 --301 - Contributed capital 1,144,221 11,050 3,036,894 --4,192,165 513,519 Decrease in deferred revenue (207,766)-(3,029,398)--(3,237,164)(6,681) Penalties and interest on special assessments 589 ----589 98 Net cash flows from capital and related financing activities (2,483,957)(393,219)(19,995)(311,654)(61,908)-(3,270,733)(990,522) Cash flows from investing activities - investment income received 233,757 102,470 186,488 10,564 4,240 $37,519 295,699 Net increase (decrease)in cash and investments (47,188)80,619 616,996 105,826 (25,865)730,388 847,685 Beginning cash and investments 4,834,987 1,794,784 3,738,350 :91,818 10,459,939 9,612,254 Ending cash and investments $4,787,799 1,875,403 4,355,346 105,826 65,953 11,190,327 10,459,939 Reconciliation of cash and investments to balance sheet: Cash and investments: Current assets 4,480,594 1,875,403 4,106,828 105,826 65,953 10,634,604 10,152,734 Restricted assets 307,205 -248,518 --555,723 307,205 $4,787,799 1,875,403 4,355,346 105,826 65,953 11,190,327 10,459,939 Noncash capital and related financing activities: Increase in contributed capital and deferred assessments receivable $36,090 15,308 10,715 --62,113 277,271 Corrections and reclassifications -increase (decrease)to: Accumulated depreciation $---765,978 -765,978 - Contributed capital $--(1,702,649)1,527,247 -(175,402)48,220 Accumulated amortization $--(255,398)957,567 -702,169 - Retained earings $--1,447,251 (1,335,658)-111,593 - 81 ' Exhibit J-4 CITY OF SEWARD Electric Enterprise Fund Balance Sheet December 31,2000 with Comparative Amounts for December 31,1999 Assets ) 2000 1999 Current assets: Cash and investments $4,480,594 4,527,782 Receivables: Accounts 620,059 707,088 Other 24,912 3,656 Less allowance for doubtful receivables (28,964)(31,819) Net receivables 616,007 678,925 Cash held by fiscal agent 155,000 155,500 Inventory 490,542 528,297 Total current assets 5,742,143 5,890,504 Restricted assets -cash and investments restricted for bond retirement 307,205 307,205 Assessments receivable 91,975 78,877 Property,plant and equipment: Property,plant and equipment in service 39,843,944 39,387,732 Less accumulated depreciation (17,553,947)(16,276,762) Net property,plant and equipment in service 22,289,997 23,110,970 Construction in progress 2,193,332 148,594 Total property,plant and equipment 24,483,329 23,259,564 Deferred charges -unamortized debt issuance costs 26,106 31,908 $30,650,758 29,568,058 82 Exhibit J-4,continued CITY OF SEWARD Electric Enterprise Fund Balance Sheet,continued Liabilities and Fund Equity 2000 1999 Liabilities: Current liabilities: Accounts payable $594,510 188,715 Current portion of bonds payable 760,000 700,000 Customer deposits 143,319 150,096 Accrued annual leave 48,352 §9,091 Accrued interest 46,676 19,696 Other accrued liabilities 18,808 58,051 Deferred revenue -207,766 Total current liabilities 1,611,665 1,383,415 Long-term debt -bonds payable,excluding current portion 4,480,000 5,240,000 Less unamortized deferred amount on refunding (122,017)(149,132) Net long-term debt 4,357,983 5,090,868 Total liabilities 5,969,648 6,474,283 Fund equity: Contributed capital 24,103,666 22,923,355 Less accumulated amortization (8,105,973)(7,317,442) Net contributed capital 15,997,693 15,605,913 Retained earnings -unreserved 8,683,417 7,487,862 Total fund equity 24,681,110 23,093,775 $30,650,758 29,568,058 83 Exhibit J-5 CITY OF SEWARD Electric Enterprise Fund Statement of Revenues,Expenses and Changes in Retained Earnings Year Ended December 31,2000 with Comparative Amounts for Six-Month Period Ended December 31,1999 (Six Months) 2000 1999 Operating revenues: Residential $ =:1,910,509 904,881 Small general service 1,237,376 639,862 Large general service 2,612,133 1,404,185 Industrial 347,791 160,074 Harbor power 113,958 48,966 Street and yard lights 66,546 31,485 Miscellaneous 178,692 72,821 Total operating revenues 6,467,005 3,262,274 Operating expenses: Power 2,682,188 1,092,957 Distribution 274,425 207,410 Administration and general 1,725,598 907,823 Total operating expenses 4,682,211 2,208,190 Earnings from operations before depreciation 1,784,794 1,054,084 Depreciation 1,234,373 608,238 Earnings from operations 550,421 445,846 Nonoperating revenues (expenses): Loss on disposal of property and equipment -(10,617) Investment income 233,757 139,852 Interest expense (346,252)(185,641) Penalties and interest on assessments 589 98 Other revenues 3,509 3 Net nonoperating revenues (expenses)(108,397)(56,305) Earnings before operating transfers 442,024 389,541 Operating transfers to other funds (35,000),(317,500) Net earnings 407,024 72,041 Increase in retained earnings for reclasses from contributed capital -2,100 Amortization of contributed capital 788,531 392,451 Increase in retained earnings 1,195,555 466,592 Beginning retained earnings 7,487,862 7,021,270 Ending retained earnings $8,683,417 7,487,862 84 CITY OF SEWARD Electric Enterprise Fund Statement of Cash Flows Year Ended December 31,2000 with Comparative Amounts for Six-Month Period Ended December 31,1999 Cash flows from operating activities: Earnings from operations Adjustments to reconcile earnings from operations to net cash flows from operating activities: Depreciation Other nonoperating revenues Decrease in allowance for doubtful receivables (Increase)decrease in assets: Receivables Inventory Increase (decrease)in liabilities: Accounts payable Customer deposits Accrued annual leave Other accrued liabilities Net cash flows from operating activities Cash flows from noncapital financing activities -operating transfers to other funds Cash flows from capital and related financing activities: Principal payments on long-term debt Interest payments on long-term debt Cash held by fiscal agent Acquisition of property,plant and equipment Collections on special assessments Contributed capital Decrease in deferred revenue Penalties and interest on special assessments Net cash flows from capital and related financing activities Cash flows from investing activities -investment income received Net decrease in cash and investments Beginning cash and investments Ending cash and investments Reconciliation of cash and investments to balance sheet: Cash and investments: Current assets Restricted assets Noncash capital and related financing activities: Increase in contributed capital and assessments receivable 85 $ Exhibit J-6 (Six Months) 2000 1999 550,421 445,846 1,234,373 608,238 3,509 3 (2,855)(401) 65,773 6,042 37,755 (1,372) 405,795 (16,499) (6,777)(41,366) (10,739)6,421 (39,243)7,501 2,238,012 1,014,413 (35,000)(317,500) (700,000)(435,000) (286,355)=(174,348) 500 (155,500) (2,458,138)=(234,733) 22,992 2,632 1,144,221 83,350 (207,766)(6,681) 589 98 (2,483,957)__(920,182) 233,757 139,852 (47,188)(83,417) 4,834,987 4,918,404 4,787,799 4,834,987 4,480,594 =4,527,782 307,205 307,205 4,787,799 4,834,987 36,090 76,245 Exhibit J-7 CITY OF SEWARD Electric Enterprise Fund Schedule of Operating Expenses Year Ended December 31,2000 with Comparative Amounts for Six-Month Period Ended December 31,1999 (Six Months) 2000 1999 Power: Salaries and employee benefits $53,121 17,412 Purchased services 218,785 25,937 Power for resale 2,287,606 1,034,447 Supplies,maintenance and other 122,676 15,161 Total power 2,682,188 1,092,957 Distribution: Salaries and employee benefits 285,979 138,254 Salary credits -work orders (176,791)(67,673) Purchased services 56,534 45,531 Supplies and maintenance 297,273 166,927 Supply credits -work orders (190,858)(77,581) Administration and general 2,288 1,952 Total distribution 274,425 207,410 Administration and general: Salaries and employee benefits 306,168 170,917 Purchased services 205,194 90,084 Supplies and maintenance 130,318 59,344 _Payment in lieu of taxes 511,101 260,972 'Administrative fee 486,768 247,326 Other 86,049 79,180 Total administration and general 1,725,598 907,823 Total operating expenses $4,682,211 2,208,190 86 Exhibit J-8 CITY OF SEWARD Electric Enterprise Fund Schedule of Electric Capital Projects Year Ended December 31,2000 Standby Electric Generator Funding sources: State grant $1,078,566 Electric funds 966,172 Total funding sources $2,044,738 Expenditures: Salaries and employee benefits 31,612 Contractual services 863,817 Supplies and materials 963,158 Other services and charges 186,151 Total expenditures $2,044,738 87 CITY OF SEWARD Water and Sewer Enterprise Fund Balance Sheet December 31,2000 with Comparative Amounts for December 31,1999 Assets Current assets: Cash and investments Receivables: Accounts Assessments Other Less allowance for doubtful receivables Net receivables Inventory Total current assets Assessments receivable Property,plant and equipment: Property,plant and equipment in service Less accumulated depreciation Net property,plant and equipment in service Construction in progress Total property,plant and equipment Liabilities and Fund Equity Liabilities: Current liabilities: Accounts payable Current portion: Notes payable Retirement incentive program payable Accrued annual leave Accrued interest Other accrued liabilities Total current liabilities Long-term debt,excluding current portion: Notes payable Retirement incentive program payable Total long-term debt Total liabilities Fund equity: Contributed capital Less accumulated amortization Net contributed capital Retained earnings -unreserved Total fund equity 88 $ 2000 1999 1,875,403 1,794,784 101,342 40,128 1,767 - 1,240 - (4,560)(5,158) 99,789 34,970 26,757 26,321 2,061,949 1,856,075 141,914 147,448 15,050,698 15,021,021 (6,887,259)(6,510,159) 8,163,439 8,510,862 340,871 20,442 8,504,310 8,531,304 10,648,173 10,534,827 47,220 12,597 46,118 40,636 9,658 : 14,361 13,597 5,002 5,291 8,132 5,758 130,491 77,879 667,726 713,842 9,657 : 677,383 713,842 807,874 791,721 11,827,299 11,800,940 (5,839,578)(5,540,899) 5,987,721 6,260,131 3,852,578 3,482,975 9,840,299 9,743,106 10,648,173 10,534,827 Exhibit J-9 CITY OF SEWARD Water and Sewer Enterprise Fund Statement of Revenues,Expenses and Changes in Retained Earnings Year Ended December 31,2000 with Comparative Amounts for Six-Month Period Ended December 31,1999 Operating revenues: Residential Small general service Large general service Industrial Seward Marine Industrial Center Ship water sales Miscellaneous Total operating revenues Operating expenses: Distribution Administration and general Total operating expenses Eamings from operations before depreciation Depreciation Earnings from operations Nonoperating revenues (expenses): Investment income Interest expense Grants Net nonoperating revenues (expenses) Earnings before operating transfers Operating transfers from other funds Operating transfers to other funds Net operating transfers Net earnings Increase in retained earnings for reclasses from contributed capital Amortization of contributed capital Increase in retained earnings Beginning retained earnings Residual equity transfers to other funds Ending retained earnings 89 $ (Six Months) 2000 1999 581,698 288,620 142,443 73,018 284,088 151,437 133,158 71,570 124,521 59,578 126,467 89,369 68,930 41,615 1,461,305 775,207 86,832 42,260 944,653 432,068 1,031,485 474,328 429,820 300,879 377,101 183,835 52,719 117,044 102,470 49,431 (32,315)(17,007) 24,800 - 94,955 32,424 147,674 149,468 -29,495 (76,840)(106,335) (76,840)(76,840) 70,834 72,628 -48,220 298,769 146,729 369,603 267,577 3,482,975 3,216,904 -(1,506) 3,852,578 3,482,975 Exhibit J-10 CITY OF SEWARD Water and Sewer Enterprise Fund Statement of Cash Flows Year Ended December 31,2000 with Comparative Amounts for Six-Month Period Ended December 31,1999 (Six Months) 2000 1999 Cash flows from operating activities: Eamings from operations $$2,719 117,044 Adjustments to reconcile earnings from operations to net cash flows from operating activities: Depreciation 377,101 183,835 Decrease in allowance for doubtful receivables (598)(2,129) (Increase)decrease in assets: Receivables .(62,454)58,799 Inventory (436)9,921 Increase (decrease)in liabilities: Accounts payable 34,623 (6,310) Accrued annual leave 764 1,100 Retirement incentive program payable 19,315 - Other accrued liabilities 2,374 568 Net cash flows from operating activities 423,408 362,828 Cash flows from noncapital financing activities: Operating transfers from other funds -29,495 Operating transfers to other funds (76,840)(106,335) Operating grants received 24,800 - Residual equity transfers to other funds -(1,506) Net cash flows from noncapital financing activities (52,040)(78,346) Cash flows from capital and related financing activities: Decrease in due from other funds -46,713 Principal payments on long-term debt (40,634)(39,012) Interest payments on long-term debt (32,604)(34,291) Acquisition of property,plant and equipment (350,106)(160,958) Collections on special assessments 19,075 - Contributed capital 11,050 124,645 Net cash flows from capital and related financing activities (393,219)(62,903) Cash flows from investing activities -investment income received 102,470 49,431 Net increase in cash and investments 80,619 271,010 Beginning cash and investments 1,794,784 1,523,774 Ending cash and investments $1,875,403 1,794,784 Noncash capital and related financing activities: Increase in deferred assessments receivable recorded for water and sewer improvements $15,308 147,448 90 Exhibit J-12 CITY OF SEWARD Water and Sewer Enterprise Fund Schedule of Operating Expenses Year Ended December 31,2000 with Comparative Amounts for Six-Month Period Ended December 31,1999 (Six Months) 2000 1999 Distribution: Salaries and employee benefits $34,334 14,722 Purchased services 49,347 23,671 Supplies and maintenance 3,151 3,867 Total distribution 86,832 42,260 Administration and general: Salaries and employee benefits 220,078 92,525 Purchased services 298,259 111,712 Supplies and maintenance 72,702 36,203 Payment in lieu of taxes 116,741 62,017 Administrative fee 215,455 116,773 Other 21,418 12,838 Total administration and general 944,653 432,068 Total operating expenses $1,031,485 474,328 91 Funding sources: State grants Water and sewer funds Total funding sources Expenditures: Salaries and benefits Contracted services Supplies Other services and charges Total expenditures CITY OF SEWARD Water and Sewer Enterprise Fund Combining Schedule of Water and Sewer Capital Projects Year Ended December 31,2000 Exhibit J-13 Forest Backup Acres Water Wellhouse #2 Generator Water Well #6 Totals $--24,800 -24,800 6,501 7,232 87,874 313,197 414,804 $6,501 7,232 112,674 313,197 439,604 -3,117 --3,117 -604 102,431 282,205 385,240 5,910 2,854 -2,520 11,284 $91 657 10,243 28,472 39,963 $6,501 7,232 112,674 313,197 439,604 92 CITY OF SEWARD Harbor Enterprise Fund Balance Sheet December 31,2000 with Comparative Amounts for December 31,1999 Exhibit J-14 Assets 2000 1999 Current assets: Cash and investments $4,106,828 3,738,350 Receivables: Accounts 213,103 228,259 Grants 4,484 9,032 Assessments 1,072 - Less allowance for doubtful receivables (21,637)(26,905) Net receivables 197,022 210,386 Total current assets 4,303,850 3,948,736 Restricted assets -cash and investments restricted for bond retirement 248,518 - Assessments receivable 61,079 $3,578 Property,plant and equipment: Property,plant and equipment in service 9,087,531 9,096,698 Less accumulated depreciation (2,621,500)_(2,232,674) Net property,plant and equipment in service 6,466,031 6,864,024 Construction in progress 3,323,989 285,689 Total property,plant and equipment 9,790,020 7,149,713 $14,403,467 11,152,027 Liabilities and Fund Equity Liabilities: Current liabilities: Accounts payable -338,579 32,122 Current portion of retirement incentive program payable 10,661 22,978 Accrued annual leave 40,708 37,673 Accrued interest 8,366 - Other accrued liabilities 35,963 15,682 Deferred revenue 458,559 3,470,475 Total current liabilities 892,836 3,578,930 Deferred revenue -Alaska Railroad Corporation loan receivable 73,622 107,312 Long-term debt,excluding current portion: Bonds payable 3,000,000 - Retirement incentive program payable 10,661 21,321 Total long-term debt 3,010,661 21,321 Total liabilities 3,977,119 3,707,563 Fund equity: Contributed capital 9,613,617 8,268,658 Less accumulated amortization (1,519,709)(1,440,016) Net contributed capital 8,093,908 6,828,642 Retained earnings -unreserved 2,332,440 615,822 Total fund equity 10,426,348 7,444,464 $14,403,467 11,152,027 93 CITY OF SEWARD Harbor Enterprise Fund Statement of Revenues,Expenses and Changes in Retained Earnings Year Ended December 31,2000 with Comparative Amounts for Six-Month Period Ended December 31,1999 Operating revenues: Moorage Wharfage Boat lift fees Power sales Rentals and leases Miscellaneous Total operating revenues Operating expenses: Salaries Employee benefits Purchased services Power for resale Supplies and maintenance Administration and general Total operating expenses Earnings from operations before depreciation Depreciation Loss from operations Nonoperating revenues (expenses): Gain on disposal of property and equipment Investment income Net nonoperating revenues (expenses) Earnings before operating transfers Operating transfers to other funds Net earnings (loss) Increase (decrease)in retained earnings for reclass from contributed capital Amortization of contributed capital Increase in retained earnings Beginning retained earnings Residual equity transfer to establish separate SMIC Fund Residual equity transfers to other funds Ending retained earnings 94 Exhibit J-15 (Six Months) 000 1999 $864,788 507,301 70,839 6,392 120,924 37,465 137,661 69,503 244,919 104,155 69,393 70,846 1,508,524 795,662 341,676 178,272 148,512 112,078 236,397 112,151 100,863 49,255 59,076 24,014 344,061 139,486 1,230,585 615,256 277,939 180,406 397,992 191,829 (120,053)(11,423) 301 - 186,488 100,864 186,789 100,864 66,736 89,441 (132,460)(54,037) (65,724)35,404 1,447,251 (40,587) 335,091 181,893 1,716,618 176,710 615,822 1,294,838 -(430,261) -(425,465) $2,332,440 615,822 Exhibit J-16 CITY OF SEWARD Harbor Enterprise Fund Statement of Cash Flows Year Ended December 31,2000 with Comparative Amounts for Six-Month Period Ended December 31,1999 (Six Months) 2000 1999 Cash flows from operating activities: Loss from operations $(120,053)(11,423) Adjustments to reconcile loss from operations to net cash flows from operating activities: Depreciation 397,992 191,829 Increase (decrease)in allowance for doubtful receivables (5,268)16,063 (Increase)decrease in assets -receivables 19,704 144,982 Increase (decrease)in liabilities: Accounts payable 306,457 (1,735) Accrued annual leave 3,035 (8,679) Other accrued liabilities 20,281 1,975 Deferred revenue (16,208)19,108 Retirement incentive program payable (22,977)19,665 Net cash flows from operating activities 582,963 371,785 Cash flows from noncapital financing activities: Operating transfers to other funds (132,460)(54,037) Residual equity transfers to other funds -(49,291) Net cash flows from noncapital financing activities (132,460)(103,328) Cash flows from capital and related financing activities: Proceeds from issuance of long-term debt 3,008,366 - Acquisition of property,plant and equipment (3,038,300)(62,683) Proceeds from sale of property and equipment 301 : Collections on special assessments 2,142 . Contributed capital 3,036,894 305,524 Decrease in deferred revenue (3,029,398)- Net cash flows from capital and related financing activities (19,995)242,841 Cash flows from investing activities -investment income received 186,488 100,864 Net increase in cash and investments 616,996 612,162 Beginning cash and investments 3,738,350 3,126,188 Ending cash and investments $4,355,346 3,738,350 Reconciliation of cash and investments to balance sheet: Cash and investments: Current assets $4,106,828 3,738,350 Restricted assets 248,518 - $4,355,346 3,738,350 Noncash capital and related financing activities: Increase in contributed capital and deferred assessments receivable $10,715 53,578 Corrections and reclassifications -increase (decrease)to: Contributed capital $(1,702,649)48,220 Accumulated amortization $(255,398)- Retained earnings $1,447,251 - Decrease resulting from transfer from Harbor to SMIC: Current assets and deferred debt issuance costs -(11,188) Net property,plant and equipment -(36,947,531) Current liabilities -(84,845) $ $ $ Long-term debt .$:(1,848,930) $ $ $ Contributed capital -(34,594,683) :(430,261) (376,174) Retained earings Decrease in net property,plant and equipment transferred to Parking Enterprise Fund 95 ' Exhibit J-17 CITY OF SEWARD Harbor Enterprise Fund Combining Schedule of Harbor Capital Projects Year Ended December 31,2000 Funding sources: State grants $ Harbor funds Total funding sources $ Expenditures: Salaries and employee benefits Contracted services Supplies and materials Other services and charges Total expenditures $ Harbor Harbor Plaza Repair and Renovation Renovations Totals 7,495 3,029,398 3,036,893 1,407 -1,407 8,902 3,029,398 3,038,300 3,252 308 3,560 2,069 423,149 -425,218 2,771 2,326,791 2,329,562 810 279,150 279,960 8,902 3,029,398 3,038,300 96 Exhibit J-18 CITY OF SEWARD Seward Marine Industrial Center Enterprise Fund Balance Sheet December 31,2000 with Comparative Amounts for December 31,1999 Assets 2000 1999 Current assets: Cash and investments $105,826 - Accounts receivable 34,002 32,289 Total current assets 139,828 32,289 Property,plant and equipment in service $2,159,567 52,157,514 Less accumulated depreciation (17,774,243)(15,775,402) Net property,plant and equipment in service 34,385,324 36,382,112 Deferred charges -unamortized debt issuance costs 17,012 19,280 $34,542,164 36,433,681 Liabilities and Fund Equity Liabilities: Current liabilities: Accounts payable 4,075 3,591 Current portion: Bonds payable 139,995 135,878 Capital lease obligations 70,000 65,000 Accrued interest ; 12,789 14,574 Other accrued liabilities 1,838 1,103 Deferred revenue 7,000 24,328 . Due to other funds -20,688 Total current liabilities 235,697 265,162 Long-term debt,excluding current portion: Bonds payable 1,041,728 1,181,723 Less unamortized deferred amount on refunding (112,858)(127,906) Capital lease obligations 340,000 410,000 Total long-term debt 1,268,870 1,463,817 Total liabilities 1,504,567 1,728,979 Fund equity: Contributed capital 49,810,682 48,283,435 Less accumulated amortization (16,253,204)(14,181,822) Net contributed capital 33,557,478 34,101,613 Retained earnings (deficit)-unreserved |(319,881)603,089 Total fund equity 33,037,597 34,704,702 $34,542,164 36,433,681 97 ' Exhibit J-19 CITY OF SEWARD Seward Marine Industrial Center Enterprise Fund Statement of Revenues,Expenses and Changes in Retained Earnings (Deficit) Year Ended December 31,2000 with Comparative Amounts for Six-Month Period Ended December 31,1999 (Six Months) 2000 1999 Operating revenues: Moorage $62,409 9,733 Wharfage 54,584 5,026 Boat lift fees 121,170 77,900 Storage 133,139 46,862 Rentals and leases 63,207 39,087 Power sales 15,225 - Miscellaneous 3,715 6,281 Total operating revenues 453,449 184,889 Operating expenses: Salaries 53,743 21,940 Employee benefits 7,071 4,468 Purchased services 67,197 17,344 Supplies and maintenance 77,202 37,322 Administration and general 75,557 39,642 Total operating expenses 280,770 120,716 Earnings from operations before depreciation ;172,679 64,173 Depreciation 1,232,863 565,420 Loss from operations (1,060,184)(501,247) Nonoperating revenues (expenses): Investment income 10,564 3,127 Interest expense (124,254)(65,530) Net nonoperating revenues (expenses)(113,690)(62,403) Loss before operating transfers (1,173,874)(563,650) Operating transfers from other funds 285,133 250,491 Operating transfers to other funds (12,386)(7,083) Net operating transfers 272,747 243,408 Net loss (901,127)(320,242) Decrease in retained earnings for corrections to contributed capital and accumulated depreciation (1,335,658)- Amortization of contributed capital 1,113,815 493,070 Increase (decrease)in retained earnings (1,122,970)172,828 Beginning retained earings 603,089 - Residual equity transfer to establish separate SMIC Fund -430,261 Ending retained earnings (deficit)$(519,881)603,089 98 Exhibit J-20 CITY OF SEWARD Seward Marine Industrial Center Enterprise Fund Statement of Cash Flows Year Ended December 31,2000 with Comparative Amounts for Six-Month Period Ended December 31,1999 (Six Months) 2000 1999 Cash flows from operating activities: Loss from operations $(1,060,184)(501,247) Adjustments to reconcile loss from operations to net cash flows from operating activities: Depreciation ;;1,232,863 §65,420 Increase in assets -receivables (1,713)(24,906) Increase (decrease)in liabilities: Accounts payable 484 (5,323) Other accrued liabilities 735 -322 Due to other funds (20,688)(26,025) Deferred revenue (17,328)(4,498) Net cash flows from operating activities 134,169 3,743 Cash flows from noncapital financing activities: Operating transfers from other funds 285,133 250,491 Operating transfers to other funds (12,386)(7,083) Net cash flows from noncapital financing activities 272,747 243,408 Cash flows from capital and related financing activities: Principal payments on long-term debt (200,878)(191,759) Interest payments on long-term debt (108,723)(58,519) Acquisition of property,plant,and equipment (2,053)- Net cash flows from capital and related financing activities (311,654)(250,278) Cash flows from investing activities -investment income received 10,564 3,127 Net increase in cash and investments 105,826 - Beginning cash and investments -- Ending cash and investments $105,826 - Noncash capital and related financing activities: Corrections and reclassifications -increase (decrease)to : Accumulated depreciation $765,978 - Contributed capital $1,527,247 - Accumulated amortization $957,567 - $(1,335,658)-Retained earnings Increase resulting from transfer from Harbor to SMIC: Current assets and debt issuance costs $-11,188 Net property,plant and equipment $-36,947,531 Current liabilities $-84,845 Long-term debt $-1,848,930 Contributed capital $-34,594,683 $-430,261Retainedearnings 99 Assets Current assets -cash and investments CITY OF SEWARD Parking Revenue Enterprise Fund Balance Sheet December 31,2000 with Comparative Amounts for December 31,1999 Property,plant and equipment -parking lot improvements Less accumulated depreciation Net property,plant and equipment Liabilities and Fund Equity Current liabilities: Accounts payable Other accrued liabilities Total current liabilities Fund equity: Contributed capital Less accumulated amortization Net contributed capital Retained earnings -unreserved Total fund equity 100 $ $ Exhibit J-21 2000 199 65,953 91,818 438,082 376,174 (288,376)(244,563) 149,706 131,611 215,659 223,429 90 3,932 42 - 132 3,932 376,174 376,174 (283,345)(240,756) 92,829 135,418 122,698 84,079 215,527 219,497 215,659 223,429 Exhibit J-22 CITY OF SEWARD Parking Revenue Enterprise Fund Statement of Revenues,Expenses, and Changes in Retained Earnings Year Ended December 31,2000 with Comparative Amounts for Six-Month Period Ended December 31,1999 (Six Months) 2000 1999 Operating revenues -parking fees $121,592 78,270 Operating expenses: Salaries and employee benefits 42,005 23,060 Contracted services 12,440 - Supplies and maintenance 15,977 929 Rents and leases 2,331 - Administration and general 13,236 9,518 Total operating expenses 85,989 33,507 Earnings from operations before depreciation 35,603 44,763 Depreciation 43,813 25,102 Earnings (loss)from operations (8,210)19,661 Nonoperating revenues -investment income 4,240 2,425 Net earnings (loss)(3,970)22,086 Amortization of contributed capital 42,589 21,295 Increase in retained earnings 38,619 43,381 Beginning retained earnings 84,079 40,698 Ending retained earnings $122,698 84,079 101 Exhibit J-23 CITY OF SEWARD . Parking Revenue Enterprise Fund Statement of Cash Flows Year Ended December 31,2000 with Comparative Amounts for Six-Month Period Ended December 31,1999 (Six Months) 2000 1999 Cash flows from operating activities: Earnings (loss)from operations $(8,210)19,661 Adjustments to reconcile earnings (loss)from operations to net cash flows from operating activities: Depreciation *43,813 25,102 Decrease in assets -accounts receivable -1,698 Increase (decrease)in liabilities: Accounts payable (3,842)3,667 Other accrued liabilities 42 (4,623) Net cash flows from operating activities 31,803 .45,505 Cash flows from capital and related financing activities - acquisition of property,plant and equipment (61,908)- Cash flows from investing activities -investment income received 4,240 2,425 Net increase (decrease)in cash and investments (25,865)47,930 Beginning cash and investments 91,818 43,888 Ending cash and investments $65,953 91,818 Noncash capital and related financing activites: Increase in property,plant and equipment and contributed capital transferred from the Harbor Enterprise Fund $-376,174 .102 INTERNAL SERVICE FUND The Internal Service Fund is used to account for goods and services provided on a cost-reimbursement basis,by one City department to other City departments,and consists of the Motor Pool which accounts for the acquisition of vehicles and mobile equipment which are then leased to the various departments of the City. Exhibit K-1 CITY OF SEWARD Motor Pool Internal Service Fund Balance Sheet December 31,2000 with Comparative Amounts for December 31,1999 Assets 2000 1999 Current assets -cash and investments $456,980 327,222 Equipment and vehicles 1,277,855 1,273,045 Less accumulated depreciation (754,086)(622,347) Net equipment and vehicles 523,769 650,698 $980,749 977,920 Liabilities and Fund Equity Liabilities: Current liabilities: Accrued interest -833 Current portion of capital lease obligations 75,852 89,551 Total current liabilities 75,852 90,384 Long-term debt -capital lease obligations,excluding current portion 103,017 182,641 Total liabilities | 178,869 273,025 Fund equity: Contributed capital 509,918 505,108 Less accumulated amortization (38,917)(29,188) Net contributed capital ;;471,001 475,920 Retained earnings -unreserved 330,879 228,975 Total fund equity 801,880 704,895 $980,749 977,920 103 CITY OF SEWARD Motor Pool Internal Service Fund Statement of Revenues,Expenses, and Changes in Retained Earnings Year Ended December 31,2000 Exhibit K-2 with Comparative Amounts for Six-Month Period Ended December 31,1999 Operating revenues -vehicle rental Operating expenses -depreciation Earnings from operations Nonoperating revenues (expenses): Investment income Interest expense Net nonoperating revenues (expenses) Net earnings Amortization of contributed capital Increase in retained earnings | Beginning retained earnings Ending retained earnings 104 (Six Months) 2000 1999 213,983 97,559 131,739 68,943 82,244 28,616 22,478 8,138 (12,547)(8,130) 9,931 8 92,175 28,624 9,729 4,864 101,904 33,488 228,975 195,487 330,879 228,975 Exhibit K-3 CITY OF SEWARD Motor Pool Internal Service Fund Statement of Cash Flows Year Ended December 31,2000 with Comparative Amounts for Six-Month Period Ended December 31,1999 (Six Months) 2000 1999 Cash flows from operating activities: Earnings from operations $82,244 28,616 Adjustments to reconcile earnings from operations to net cash flows from operating activities- depreciation 131,739 68,943 Net cash flows from operating activities 213,983 97,559 Cash flows from capital and related financing activities: Principal payments on long-term debt (93,323)(39,436) Interest payments on long-term debt (13,380)(7,297) Acquisition of equipment and vehicles (4,810)(18,000) Contributed capital 4,810 18,000 Net cash flows from capital and . related financing activities (106,703)(46,733) Cash flows from investing activities - investment income received 22,478 8,138 Net increase in cash and investments 129,758 58,964 Beginning cash and investments 327,222 268,258 Ending cash and investments $456,980 327,222 105 THIS PAGE LEFT BLANK INTENTIONALLY 106 FIDUCIARY FUND The City utilizes agency funds,which are a category of Fiduciary Funds.Agency funds are used to account for assets held by the City in an agent capacity for other funds, governments,or individuals. Exhibit L-1 CITY OF SEWARD Agency Funds Combining Balance Sheet December 31,2000 with Comparative Totals for December 31,1999 AVTEC Teen Council Contract Agency Agency Totals Fund Fund 000 1999 Assets Cash and investments $15,079 635 15,714 3,621 Liabilities Accounts payable 1,012 216 1,228 200 Due to others 14,067 419 14,486 3,421 $15,079 635 15,714 3,621 107 Exhibit L-2 CITY OF SEWARD Teen Council Agency Fund Statement of Changes in Assets and Liabilities Year Ended December 31,2000 Balance at Balance at January 1,December 31, 2000 Additions Deletions 2000 Assets Cash and investments $3,392 22,873 11,186 15,079 Liabilities Accounts payable 200 812 -1,012 Due to Teen Council 3,192 23,073 12,198 14,067 $3,392 23,885 12,198 15,079 108 Exhibit L-3 CITY OF SEWARD AVTEC Contract Agency Fund Statement of Changes in Assets and Liabilities Year Ended December 31,2000 Balance at Balance at January 1,December 31, 2000 Additions Deletions 2000 Assets Cash and investments $229 4,465 4,059 635 Liabilities Accounts payable -216 -216 Due to AVTEC 229 4,465 4,275 419 $229 4,681 4,275 635 109 THIS PAGE LEFT BLANK INTENTIONALLY 110 GENERAL FIXED ASSET ACCOUNT GROUP The General Fixed Asset Account Group is established to account for the City's sizeable investment in fixed assets,which are tangible assets of significant value,having a useful life of more than one year.No depreciation is computed on general fixed assets.This account group also enables the City to maintain custodial responsibility for the assets. The investment by Enterprise Funds and the Internal Service Fund in fixed assets is accounted for in the Proprietary Fund Type. General fixed assets: CITY OF SEWARD General Fixed Assets Account Group Schedule of General Fixed Assets by Sources December 31,2000 with Comparative Amounts for December 31,1999 Land and land rights Buildings Improvements other than buildings Equipment Construction in progress Investment in general fixed assets: Capital Project Funds General Fund 111 $ Exhibit M-1 2000 1999 4,053,605 3,898,515 51,318,129 61,406,904 10,883,191 10,604,013 3,151,491 2,927,671 1,332,178 490,702 70,738,594 79,327,805 65,059,438 74,161,212 5,679,156 5,166,593 70,738,594 79,327,805 Exhibit M-2 CITY OF SEWARD General Fixed Assets Account Group» Schedule of Changes in General Fixed Assets Year Ended December 31,2000 Balance at Balance at January 1,December 31, 2000 Additions Deletions 2000 Land and land rights $3,898,515 155,090 -4,053,605 Buildings 61,406,904 2,501 10,091,276 51,318,129 Improvements other than buildings 10,604,013 279,178 -10,883,191 Equipment 2,927,671 271,500 47,680 3,151,491 Construction in progress 490,702 1,121,346 279,870 1,332,178 $79,327,805 1,829,615 10,418,826 70,738,594 112 Schedule of General Fixed Assets by Function and Activity Function and Activity General government: City Council/Mayor City manager City clerk Finance Community development Municipal building Alaska Sealife Center General services Community and Senior Center Nondepartmental Total general government Public safety: Police Jail Animal control Fire Seward Volunteer Ambulance Corp Total public safety Public works: Streets Building inspector City shop Total public works Hospital Parks and recreation Library Total general fixed assets allocated to functions Construction in progress Total general fixed assets CITY OF SEWARD General Fixed Assets Account Group Exhibit M-3 December 31,2000 Land Improve- and ments Land Other than Rights Buildings Buildings Equipment Total $---$4,323 54,323 ---9,140 9,140 ---10,613 10,613 ---187,516 187,516 ---5,860 5,860 -2,200,080 -33,869 2,233,949 -37,599,774 1,952,584 1,145,720 40,698,078 --8,005,937 31,714 8,037,651 -920,709 --920,709 4,053,605 ---4,053,605 4,053,605 40,720,563 _9,958,521 1,478,755 _56,211,444 ---177,219 177,219 ---12,562 12,562 -156,720 --156,720 -881,031 -422,137 1,303,168 ---61,614 61,614 -1,037,751 -673,532 1,711,283 -116,945 129,804 619,508 866,257 ---2,600 2,600 -771,823 -25,000 796,823 -888,768 129,804 647,108 1,665,680 -7,745,896 -116,012 7,861,908 -284,909 782,066 139,890 1,206,865 -640,242 12,800 96,194 749,236 $4,053,605 51,318,129 10,883,191 3,151,491 69,406,416 1,332,178 $70,738,594 113 CITY OF SEWARD General Fixed Assets Account Group Schedule of Changes in General Fixed Assets by Function and Activity Year Ended December 31,2000 Function and Activity General government: City Council/Mayor $ City manager . City clerk Finance Community development Municipal building Alaska Sealife Center General services Community and Senior Center Nondepartmental Total general government Public safety: Police Jail Animal control Fire Seward Volunteer Ambulance Corp Total public safety Public works: Streets Building inspector City shop Total public works Hospital Parks and recreation Library Construction in progress General Fixed Assets at Exhibit M-4 General Fixed Assets at January 1,2000 Additions Deletions December 31,2000 54,323 --54,323 5,684 3,456 -9,140 10,613 --10,613 184,970 2,546 -187,516 5,860 --5,860 2,227,266 6,683 -2,233,949 50,613,146 176,208 10,091,276 40,698,078 8,056,944 2,865 22,158 8,037,651 920,709 --920,709 3,898,515 155,090 -4,053,605 65,978,030 346,848 10,113,434 56,211,444 177,219 --177,219 12,562 --12,562 156,720 --156,720 1,286,053 17,115 -1,303,168 61,614 --61,614 1,694,168 17,115 -1,711,283 893,937 20,000 47,680 866,257 2,600 --2,600 816,824 -20,001 796,823 1,713,361 20,000 67,681 1,665,680 7,745,896 116,012 -7,861,908 1,001,207 205,658 -1,206,865 704,441 44,795 -749,236 490,702 1,121,346 279,870 1,332,178 79,327,805 1,871,774 10,460,985 70,738,594 114 GENERAL LONG-TERM DEBT ACCOUNT GROUP The General Long-Term Debt Account Group records the unmatured principal of long-term general obligation bonds and the long-term portion of the accrued annual leave and accrued retirement payable from general revenues and backed by the full faith and credit of the City. CITY OF SEWARD General Long-Term Debt Account Group Schedule of General Long-Term Debt December 31,2000 with Comparative Amounts for December 31,1999 Amount Available and to be Provided for the Payment of General Long-Term Debt Amount available in Debt Service Fund Amount to be provided: Accrued annual leave Bonds payable Retirement incentive program payable Seward General Hospital PERS liability Total amount to be provided General Long-Term Debt Payable Exhibit N-1 Accrued annual leave 1990 bonds payable 1993 refunding bonds payable for the 1987 Series A 1993 refunding bonds payable for the 1990 Series A 1996 Hospital bonds Retirement incentive program payable Seward General Hospital PERS liability 115 2000 1999 564,909 429,829 190,016 174,014 8,070,652 8,559,855 49,053 117,154 960,286 960,286 9,270,007 9,811,309 9,834,916 10,241,138 190,016 174,014 -75,000 253,277 282,400 1,375,000 1,390,000 6,885,000 7,120,000 49,053 117,154 1,082,570 1,082,570 $9,834,916 10,241,138 THIS PAGE LEFT BLANK INTENTIONALLY 116 FEDERAL AND STATE FINANCIAL ASSISTANCE SCHEDULES The Schedules of Expenditures of Federal Awards and State Financial Assistance itemize the sources of grant funds received by the City during the year,as required by the Government Auditing Standards and State of Alaska Audit Guide and Compliance Supplement for Single Audits. CITY OF SEWARD Schedule of Expenditures of Federal Awards Year Ended December 31,2000 Exhibit O-1 Catalog of Federal Domestic Total Jan.1,2000 Federal Dec.31,2000 Assistance Grant Grant Receivable Share of Federal ReceivableNumberNumberAward(Deterred)Expenditures Receipts (Deterred) deral Emergency Management Agency passed through State of Alaska Department of Military and Veterans Affairs 83.544 FEMA-AK-DR-1316 $372,829 :137,371 128,484 8,887 zpartment of Transportation passed through State of Alaska Department of Public Safety Bicycle/Pedestrian Safety Grant 20.600 -750 :750 750 : epartment of Agriculture: *NRCS Flood Mitigation/Engineering 10.904 68-0150-9-024 500,000 65,210 295,088 133,268 227,030 NRCS Flood Mitigation/Construction 10.904 68-0150-0-023 1,000,000 :8,518 :8,518 Total Department of Agriculture 65,210 303,606 _133,268 235,548 Department of Interior passed through State of Alaska Department of Natural Resources: Pittsburgh Travel Grant 15.xxx 99344 5,722 -4,855 4,855 : Seward Registor of Historic Places 15.xxx 98320 6,798 -2,952 2,952 - Seward Two Lakes Park 15.xxx 02-00361 27,552 4,654 :4,654 - Total Department of Interior 4,654 7,807 _12,461 : Department of Housing and Urban Development passed through State of Alaska Department of Community and Economic Development ADA Compliance Project 14.228 2198787 150,000 46,101 1,759 47,860 : Total Federal Financial Assistance $115,965 451,293 322,823 244,435 *Major program 17 CITY OF SEWARD Schedule of State Financial Assistance Year Ended December 31,2000 Exhibit P-1 Total Jan.1,2000 State Dec.31,2000 Grant Grant Receivable Share of State Receivable State Grant Title Number Award (Deferred)Expenditures Receipts (Deferred) Department of Community &Economic Development Gateway Subdivision 95/668-8-001 $59,200 31,653 15,707 47,360 - High School Bike Path Extension 94/668-8-003 50,700 (9,449)46,290 36,841 - Emergency Shelter Supplies 94/668-5-004 22,393 ---- Seward Community Cemetery 96/668-9-003 12,000 1,272 3,608 4,880 - Historic Records Preservation,Phase II 97/668-9-007 28,662 -743 1,269 (526) Harbor Plaza Renovation 98/668-9-001 50,000 9,032 7,495 12,043 4,484 Library Information and Technology Automation Project 98/668-9-002 23,487 2,417 4,421 6,838 - Hoben Park 98/668-9-003 33,283 (347)5,226 4,879 - ADA Campsites and Sewer Dump Station 99/668-9-002 32,274 15,441 1,268 16,709 - 911 Equipment Replacement 99/668-5-003 29,980 2,474 4,375 6,849 - *Replacement Electric Generator 9/99-001 1,088,500 (207,766)1,078,566 870,800 - Curb Cuts for ADA Compliance-Sidewalk,Curb,Gutters 00/668-9-002 34,564 27,651 -27,651 - City Hall Facilities &Equipment 01-MG-141 75,532 ---- Fire Dept Fire Hose Replacement 00/668-5-001 40,000 30,065 1,935 32,000 - *Revenue Sharing -90,570 -90,570 90,570 - *Safe Communities -.73,598 -73,598 73,598 - Shared Fisheries Business Tax -4,755 -4,755 4,755 - Shared Fisheries Business Tax FY00 --5,796 -5,796 -5,796 Fisheries Resource Landing Tax FY99 --8,795 -8,795 8,795 - Fisheries Resource Landing Tax FY00 -258 |:258 :258 Total Dept of Community &Economic Development _(97,557)1,353,406 _1,245,837 10,012 Department of Environmental Conservation Water Distribution System Analysis 76909 _24,800 -24,800 23,560 1,240 Department of Revenue *Fish Business Tax -259,273 -259,273 259,273 - Liquor Tax FY99 --12,000 12,000 -12,000 - Liquor Tax FY00 -7,400 -7,400 7,400 - Total Department of Revenue 12,000 266,673 278,673 - Department of Transportation and Public Facilities *Seward Harbor Transfer --3,134,200 (3,079,237)3,029,398 -(49,839) Department of Education AVTEC Student Service Center Grant --50,800 9,473 46,243 36,243 19,473 Library Public Assistance Grant PLA-00-770-70 6,300 (1,430)6,155 4,725 - Library Public Assistance Grant PLA-01-770-68 6,300 --6,300 (6,300) Total Department of Education 8,043 52,398 47,268 13,173 Department of Fish and Game *EVOS Alaska SeaLife Center 94199 26,092,648 199 100,006 56,640 43,565 Department of Military and Veterans Affairs Federal Emergency Management Agency passed through Department of Military and Verterans Affairs -FEMA FEMA-AK-DR-1316 124,276 -45,790 42,828 2,962 TOTAL STATE FINANCIAL ASSISTANCE $(3,156,552)4,872,471 1,694,806 21,113 *Major program 118 PART III STATISTICAL SECTION Table 1: Table 1A: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Table 8: Table 8A: Table 9: Table 10: Table 11: Table 12: Table 13: General Fund Revenue by Source General Government Tax Revenues by Source General Fund Expenditures by Function Property Tax Levies and Collection Assessed and Estimated Actual Value of Taxable Property Property Tax Rates -Direct and Overlapping Debt Special Property Assessment Collections Ratio of Net General Obligation Bonded Debt to Assessed Value And Net General Obligation Bonded Debt Per Capita Legal Debt Margin Computation of Direct and Overlapping Bonded Debt Ratio of Annual Debt Service Expenditures for General Obligation Debt to Total General Fund Expenditures Revenue Bond Coverage Property Value,Construction and Bank Deposits Principal Taxpayers Miscellaneous Statistics Table 1 CITY OF SEWARD General Fund Revenues By Source Last Ten Fiscal Periods * Property Licenses Inter-Charges Fines Fiscal Assess-and govern-for and Year Taxes ments Permits mental Services Bails Interest Misc.Total 1991 $2,293,728 $230,546 $69,195 $1,046,659 $2,025,766 $13,058 $410,593 $95,077 $6,184,622 1992 $2,627,050 $6,505 $74,005 $913,137 $1,879,663 $18,158 $245,872 $124,466 $5,888,856 1993 $2,509,708 $32,573 $23,736 $983,759 $2,425,012 $41,892 $236,986 $47,862 $6,301,528 1994 $2,882,005 $19,795 $33,132 $903,835 $2,104,588 $35,230 $102,824 $36,807 $6,118,216 1995 $3,081,177 $2,241 $61,073 $789,157 $1,760,860 $49,289 $221,832 $39,340 $6,004,969 1996 =$2,923,340 $524 $119,982 $909,521 $1,595,223 $26,945 $219,514 $106,126 $5,901,175 1997 $3,072,913 $1,871 $200,964 $1,099,869 $1,662,854 $12,383 $280,363 $50,079 $6,381,294 1998 $3,293,763 $0 $115,106 $1,105,212 $1,540,141 $14,495 $261,974 $147,861 $6,478,552 1999 $3,584,389 $0 $144,003 $1,021,209 $1,475,581 $17,347 $214,140 $218,597 $6,675,266 41999 =$2,255,326 $0 =$73,715 $438,185 $925,721 $10,748 $104,719 $41,956 $3,850,370 2000 $3,953,139 $0 $139,871 $984,231 $2,179,832 $14,786 $438,005 $247,461 $7,957,325 *Effective July 1,1999,the City of Seward changed from a fiscal year ending June 30,to a calendar year ending December 31. This schedule includes ten full fiscal years plus the six-month transition period. *Represents the six-month period from July 1,1999 through December 31,1999. 119 CITY OF SEWARD General Government Tax Revenues By Source Last Ten Fiscal Periods * Table 1A Fiscal Year, 1991 1992 1993 1994 1995 1996 1997 1998 1999 "1999 2000 Property Tax $409,663 $619,566 $515,286 $468,880 $498,016 $514,588 $479,062 $518,788 $523,993 $515,544 $694,332 Payment Sales In Lieu Tax of Tax $1,190,645 $679,292 $1,268,572 $692,653 $1,286,358 $681,615 $1,484,355 $864,922 $1,587,199 $904,889 $1,619,606 $693,626 $1,734,019 $729,498 $1,820,230 $799,978 $2,029,485 $864,106 $1,197,288 $419,108 $2,197,561 $844,583 Hotel/Motel Room Tax (1) $6,295 $7,350 $53,461 $128,188 $148,211 $163,330 $122,248 $212,619 Other (2) $14,128 $46,259 $26,449 $57,553 $83,723 $42,059 $2,146 $6,556 $3,475 $1,138 $4,044 _Total_ $2,293,728 $2,627,050 $2,509,708 $2,882,005 $3,081,177 $2,923,340 $3,072,913 $3,293,763 $3,584,389 $2,255,326 $3,953,139 *Effective July 1,1999,the City of Seward changed from a fiscal year ending June 30,to a calendar year ending December 31. This schedule includes ten full fiscal years plus the six-month transition period. 4 Represents the six-month period from July 1,1999 through December 31,1999. ()In Fiscal Year 1994 and 1995,lodging assessment fee was based on $30 per room,per year. -Beginning Fiscal Year 1996,lodging assessment fee was replaced by 4%hotel/motel room tax.(2)Represents tax-related penalties and interest,and harbor parking assessment fee (discontinued after FY96). 120 CITY OF SEWARD General Governmental Expenditures By Function (1) Last Ten Fiscal Periods * Fiscal General Public Public Parks and Debt Year Government Safety Works Recreation Library Service Total 1991 $1,488,855 $1,584,821 $608,287 $449,119 $154,870 $362,260 $4,648,212 1992 $1,851,718 $1,640,081 $692,653 $493,106 $193,510 $345,265 $5,216,333 1993 $1,779,085 $1,682,176 $689,209 $471,045 $184,274 $367,509 $5,173,298 1994 $1,542,179 $1,782,396 $722,202 $443,661 $200,553 $343,702 $5,034,693 1995 $1,567,287 $1,835,194 $801,753 $430,112 $190,517 $282,748 $5,107,611 1996 $1,485,903 $1,860,349 $791,868 $508,467 $218,175 $270,201 $5,134,963 1997 $1,972,584 $1,919,233 $790,386 $632,389 $228,894 $220,816 $5,764,302 1998 $1,960,687 $1,876,870 $831,248 $609,001 $234,033 $278,506 $5,790,345 1999 $1,542,370 $1,914,943 $863,536 $597,516 $227,882 $792,267 $5,938,514 A 1999 $864,468 $1,029,356 $490,459 $386,599 $117,411 $570,058 $3,458,351 2000 $1,592,475 $1,970,643 $981,027 $711,721 $245,710 $840,997 $6,342,573 *Effective July 1,1999,the City of Seward changed from a fiscal year ending June 30,to a calendar year ending December 31.This schedule includes ten full fiscal years plus the six-month transition period. *Represents the six-month period from July 1,1999 through December 31,1999. ;(1)Includes General Fund and Debt Service Fund 121 Table 3 CITY OF SEWARD Property Tax Levies And Collections Last Ten Fiscal Periods * Ratio of Total Tax Delinquent Total Current Percent Delinquent Total Collections Outstanding Taxes ASA Fiscal Tax Tax of Levy Tax Tax AsA %Delinquent %Of Year Levy Collections Collected Collections Collections Of Levy Taxes Total Levy 1991 $463,743 $413,850 89.2%$5,731 $419,581 90.5%$61,460 13.3% 1992 $489,226 $447,123 91.4%$22,471 $469,594 96.0%$76,962 15.7% 1993 $498,366 $470,322 94.4%$31,983 $502,305 100.8%$67,164 13.5% 1994 $496,933 $434,736 87.5%$29,171 $463,907 93.4%$98,709 19.9% 1995 $546,115 $469,274 85.9%$99,191 $568,465 104.1%$76,237 14.0% 1996 $505,034 $447,110 88.5%$66,044 $513,153 101.6%$68,253 13.5% 1997 $489,187 $438,512 89.6%$2,294 $440,807 90.1%$83,389 17.1% 1998 $495,052 $466,528 94.2%$13,791 $480,319 97.0%$60,601 12.2% 1999 $505,323 $488,883 96.7%$32,515 $521,398 103.2%$40,930 8.1% *1999 $523,453 $484,305 92.5%$4,627 $488,931 93.4%$70,490 13.5% 2000 $606,781 $571,261 94.2%$41,770 $613,031 101.0%$64,241 10.6% *Effective July 1,1999,the City of Seward changed froma fiscal year ending June 30,to a calendar year ending December 31. This schedule includes ten full fiscal years plus the six-month transition period. *Represents the six-month period from July 1,1999 through December 31,1999. Source:Kenai Peninsula Borough 122 CITY OF SEWARD Assessed And Estimated Actual Value of Taxable Property Last Ten Fiscal Periods * Table 4 Real Property Personal Property Total Property Estimated Estimated Estimated Fiscal Assessed Actual Assessed Actual Assessed Actual Year Value Value Value Value Value Value 1991 $97,193,437 $100,612,800 $53,601,900 $64,419,000 $150,795,337 $165,031,800 1992 $88,464,566 $100,667,900 $52,574,761 $68,929,200 $141,039,327 $169,597,100 1993 =$92,122,180 $98,261,300 $50,038,979 $66,112,200 $142,161,159 |$164,383,500 1994 $102,022,980 $111,378,100 $53,373,128 $69,439,400 $155,396,108 $180,817,500 1995 $103,330,330 $111,294,400 $75,604,139 $94,472,100 $178,934,469 $205,766,500 1996 $105,272,150 $113,853,300 $58,875,732 $77,447,000 $164,147,882 $191,300,300 1997 $108,318,979 $117,443,100 $50,476,044 $70,537,400 $158,795,023 $187,980,500 1998 $106,196,750 $117,506,400 $49,253,008 $67,755,600 $155,449,758 $185,262,000 1999 $106,918,000 $114,049,300 $52,852,159 $70,534,400 $159,770,159 $184,583,700 41999 $113,464,200 $124,730,000 $58,163,405 $72,987,600 $171,627,605 $197,717,600 2000 $154,991,200 $167,589,200 $55,354,065 $71,952,600 $210,345,265 $239,541,800 Ratio of Total Assessed Value To Total Est. Actual Value 91.37% 83.16% 86.48% 85.94% 86.96% 85.81% 84.47% 83.91% 86.56% 86.80% 87.81% *Effective July 1,1999,the City of Seward changed from a fiscal year ending June 30,to a calendar year ending December 31.This schedule includes ten full fiscal years plus the six-month transition period. "Represents the six-month period from July 1,1999 through December 31,1999. Source:"Alaska Taxable",State of Alaska Kenai Peninsula Borough Certified Assessment Roll 123 Direct and Overlapping Governments Last Ten Fiscal Years (Per $1,000 of Assessed Value) CITY OF SEWARD Property Tax Rates Table 5 (1)Includes Kenai Peninsula Borough and Kenai Peninsula Community College. Source:City of Seward Kenai Peninsula Borough Fiscal Year 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 City 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.12 3.12 3.12 Borough (1) 124 5.75 7.55 8.55 8.55 8.62 8.62 8.30 8.38 8.10 7.60 Total 8.75 10.55 11.55 11.55 11.62 11.62 11.30 11.50 11.22 10.72 Table 6 CITY OF SEWARD Special Assessment Billings and Collections Last Ten Fiscal Periods * Special Special Total Fiscal Assessment Assessment Outstanding _Year_Billings Collections (1)Assessments 1991 $28,548 $111,719 $250,200 1992 $26,190 $6,505 $263,978 1993 $27,618 $32,573 $249,385 1994 $27,618 $19,795 $265,103 1995 $21,759 $2,241 $285,889 1996 $18,368 .$524 $272,190 1997 $1,111 $2,175 $94,395 1998 $1,273 $3,182 $91,127 1999 $1,106 $3,138 $87,989 4 1999 $0 $0 $85,357 2000 $32,102 $47,246 $395,539 *Effective July 1,1999,the City of Seward changed froma fiscal year ending June 30,to a calendar year ending December 31. This schedule includes ten full fiscal years plus the six-month transition period. *Represents the six-month period from July 1,1999 through December 31,1999. (1)Includes pre-payments,current payments,and past due payments. 125 Table 7 CITY OF SEWARD Ratio of Net General Obligation Bonded Debt To Assessed Value And Net General Obligation Bonded Debt Per Capita Last Ten Fiscal Periods * Gross Debt Ratio of Net Net Bonded Payable from Net Bonded Debt Bonded Fiscal Assessed Debt Enterprise Bonded to Assessed Debt Per Year Population(1)Value (2)#(3)#Revenues#Debt#Value Capita 1991 2,856 $150,795 $11,021 $8,796 $2,225 1.48%$779 1992 2,878 $141,039 $10,563 $8,351 $2,212 1.57%$769 1993 2,886 $142,161 $10,039 $7,886 $2,153 1.51%$746 1994 2,965 $155,396 $10,249 $7,930 $2,319 1.49%$782 1995 2,917 $178,934 $9,549 $7,310 $2,239 1.25%$768 1996 2,891 $164,148 $8,788 $6,636 $2,152 1.31%$744 1997 2,996 $158,795 $15,600 $6,037 $9,563 6.02%$3,192 1998 3,028 $155,450 $14,865 $5,398 $9,467 6.09%$3,126 1999 3,010 $159,770 $13,910 $4,724 $9,186 5.75%$3,052 A 1999 3,010 $171,627 $13,025 $4,157 $8,867 5.17%$2,946 2000 2,830 $210,345 $11,935 $3,421 $8,513 4.05%$3,008 *Effective July 1,1999,the City of Seward changed froma fiscal year ending June 30,to a calendar year ending December 31. This schedule includes ten full fiscal years plus the six-month transition period. ®Represents the six-month period from July 1,1999 through December 31,1999. #Amounts expressed in thousands. (1)Alaska Department of Labor and Workforce Development (2)From table 4 (3)Amount does not include revenue bonds Source:State of Alaska Kenai Peninsula Borough 126 Table 8 CITY OF SEWARD Legal Debt Margin December 31,2000 No debt limit mandated by law. 127 Computation of Direct And Overlapping Bonded Debt CITY OF SEWARD General Obligation Bonds Table 8A December 31,2000 Net General Obligation Percentage Amount Bonded Debt Applicable To Applicable To Jurisdiction Qutstanding City of Seward City of Seward Direct: City of Seward $8,513,278 (1)100.00%$8,513,278 Overlapping: Kenai Peninsula Borough 14,664,000 (3)7.37%(2)1,080,737 Total $23,177,278 $9,594,015 qd)Excluding general obligation bonds reported in the Enterprise Funds. (2)Based upon the ratio of City of Seward assessed value (real and personal property =$2 10,345,265)to total assessed value of the Kenai Peninsula Borough ($2,852,252,140).Source:"2000 Alaska Taxable”,State of Alaska,p.40, and Kenai Peninsula Borough certified main and supplemental tax roles. GB)Source:Kenai Peninsula Borough finance department. 128 Table 9 CITY OF SEWARD Ratio of Annual Debt Service Expenditures For General Obligation Debt (1) to Total General Fund Expenditures Last Ten Fiscal Periods * Ratio of Total Total Debt Service to Fiscal Debt General General Year Principal Interest Service (1)Expenditures (2)Expenditures 1991 =$129,890 =$232,370 $362,260 $4,648,212 7.19% 1992.$143,563 $201,701 $345,265 $5,216,333 6.62% 1993 $180,448 $187,061 $367,509 $5,173,298 7.10% 1994 $199,898 $143,804 $343,702 $5,034,693 6.83% 1995 =$143,511 $139,237 $282,748 $5,107,611 5.54% 1996 =:$139,216 +=$130,985 $270,201 $5,134,963 5.26% 1997 $99,187 $121,629 $220,816 $5,764,302 3.83% 1998 $115,275 $163,231 $278,506 $5,790,345 4.81% 1999 $281,475 $510,792 $792,267 $5,938,514 13.34% 41999 $318,240 $251,818 $570,058 $3,458,351 16.48% 2000 $507,340 $333,657 $840,997 $6,342,573 13.26% *Effective July 1,1999,the City of Seward changed from a fiscal year ending June 30,to a calendar year ending December 31.This schedule includes ten full fiscal years plus the six-month transition period. 4 Represents the six-month period from July 1,1999 through December 31,1999. ()General obligation debt reported in the Enterprise Funds,with government commitment,have been excluded. (2)Total General Expenditures includes General Fund and Debt Service Fund. 129 Table 10 CITY OF SEWARD Revenue Bond Coverage Electric Enterprise Fund Last Ten Fiscal Periods (5) Net Revenue Debt Service Requirements (3) Fiscal Gross Operating Available for Year Revenues(1)Expenses(2)Debt Service Principal Interest Total Coverage (4) 1995 $5,927,945 $3,538,065 $2,389,880 __--- 1996 $5,830,903 $3,624,001 $2,206,902 _$184,435 $184,435 11.97 1997 $5,955,699 $3,604,036 $2,351,663 _$184,435 $184,435 12.75 1998 $6,428,124 $4,064,418 $2,363,706 $50,000 $184,435 $234,435 10.08 1999 $6,720,313 $3,644,529 $3,075,784 $75,000 $180,760 $255,760 12.03 2000 $6,704,860 $4,171,110 $2,533,750 $100,000 $171,573 $271,573 9.33 (1)Total revenues,including interest. (2)Total operating expenses exclusive of depreciation and payment in lieu of taxes. (3)Includes principal and interest of revenue bonds only.Excludes general obligation bonds reported in the Electric Enterprise Fund. (4)Revenue bond agreement requires Net Revenue Available for Debt Service be at least 1.30 times the amount of the total annual debt service requirement. (5)No Electric Enterprise Fund revenue bonds prior to 1995. 130 CITY OF SEWARD Property Value,Construction and Bank Deposits Last Ten Fiscal Periods * Table 11 Commercial Residential Construction Construction Total Real Number Number Fiscal Property of of Bank Year Value (1)Permits Value Permits Value Deposits 1991 $100,612,800 29 $2,163,276 21 $1,053,150 $27,477,800 1992 $100,667,900 21 $842,685 20 $620,425 $32,518,000 1993 $98,261,300 16 $328,462 34 $1,504,173 $27,808,000 1994 $111,378,100 20 $3,120,673 24 $384,400 $28,409,000 1995 $111,294,400 27 $31,539,700 28 $746,600 $35,186,501 1996 $113,853,300 16 $8,076,000 31 $1,093,800 $36,572,000 1997 $117,443,100 29 $7,770,836 41 $1,513,902 $38,598,136 1998 $117,506,400 24 $2,095,035 34 $1,493,675 $43,350,000 1999 =$114,049,300 22 $5,937,950 25 $1,271,900 $47,116,749 41999 $124,730,000 24 $1,407,699 12 $719,300 $42,661,000 2000 $167,589,200 23 $1,982,065 36 $1,469,000 $45,217,355 "*Effective July 1,1999,the City of Seward changed froma fiscal year ending June 30,to a calendar year ending December 31. 'This schedule includes ten full fiscal years plus the six-month transition period. 1A Represents the six-month period from July 1,1999 through December 31,1999. 6)Estimated actual value from Table 4 Source:City of Seward -Building Inspection Department Local Banks -First National Bank of Anchorage,National Bank of Alaska 131 CITY OF SEWARD Principal Taxpayers December 31,2000 Table 12 Percent of FY00 Total Assessed Assessed Taxpayer Type of Business Valuation(1)Valuation (2) Leirer Enterprises/ Steve,Carol,James,Winifred Leirer Real Estate/Leasing $8,107,900 3.9% Icicle Seafoods Seafood Processing 4,708,000 2.2% Shoreside Petroleum,Inc./ Kurt and Diana Lindsey Petroleum Products 4,341,100 2.1% Hotel Edgewater Hotel/Gift Shop 3,211,800 1.5% Suneel Alaska Corporation Coal Export 3,023,400 1.4% Breeze Inn Motel -Juris Mindenbergs Motel/Restaurant 2,909,900 1.4% Seward Ships Chandlery/Ship Repair/Convenience Harbor Gateway Enterprises-James Pruitt Store/Gas Station/Misc.2,496,600 1.2% New Seward Hotel/New Seward Saloon Brad Snowden and Virginia Bradley Hotel/Saloon 2,493,900 1.2% Afognak Logging/Albert Schafer Construction/Logging 2,375,600 1.1% Chugach Alaska Corporation Real Estate/Retail 1,982,800 0.9% (2)Includes real and personal property based on 2000 tax rolls.Source:Kenai Peninsula Borough -Assessing Department (2)Total assessed valuation (real and personal property)is $210,345,265.Source:Kenai Peninsula Borough. 132 CITY OF SEWARD MISCELLANEOUS STATISTICS December 31,2000 Table 13 Date of Incorporation Class Form of Government Number of employees Non-Exempt Exempt Area,Square Miles _Population Qualified Voters City of Seward facilities and services: Miles of streets Number of street lights Building Permits Issued Recreation and Culture: Number of Parks &Playgrounds Number of Libraries Number of Volumes Fire Protection Number of Stations Number of Paid Firefighters and Officers Number of Volunteers Number of Calls Answered Fire Rating (ISO) Police Protection Number of Stations Number of Officers Number of law violations: Physical arrests Traffic violations Parking violations Sewerage System: Number of treatment plants Number of service connections Daily average treatment in gallons Maximum daily capacity of treatment plant in gallons Water System: Number of service connections Number of fire hydrants Daily average consumption in gallons Maximum daily capacity of plant in gallons Electric Distribution System: Number of service connections Miles of distribution lines 133 June 1,1912 Home Rule Council/Manager 66 16 22 2,830 1,972 CITY OF SEWARD MISCELLANEOUS STATISTICS December 31,2000 Table 13,continued Miles of transmission lines Number of sub-stations Total number of kilowatt sales Harbor and Port Operations: Registered vessels Number on waiting list for boat slips Number of boat lifts General cargo tonnage Fish product tonnage Petroleum (gallons) Facilities and services not included in the reporting entity: Education Elementary School Number of Students Enrolled Number of Teachers Jr/Sr High School Number of Students Enrolled Number of Teachers Alaska Vocational Technical Center Number of Students Served Annually Number of Teachers Hospital Providence Seward Medical Center: Number of patient beds (4 primary care;2 swing beds) Number of employees: Non-Exempt Exempt 134 42 3 35,496,119 3,857 323 565 5,803 21,758 2,921,054 PART IV SINGLE AUDIT SECTION The Single Audit Section of the CAFR provides the results of the auditor's report on compliance and on internal control over financial reporting,for the major state and federal grant programs.This section includes any applicable schedules of findings and questioned costs,schedules of prior audit findings,and corrective action plans. MIKUNDA,COTTRELL &Co. A Professional Corporation CERTIFIED PUBLIC ACCOUNTANTS &CONSULTANTS 3601 "C”Street,Suite 600 ©Anchorage,Alaska 99503 (907)278-8878,Fax (907)278-5779 www.imcc-cpa.com Independent Auditor's Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Honorable Mayor and City Council City of Seward,Alaska We have audited the general purpose financial statements of City of Seward as of and for the year ended December 31,2000,and have issued our report thereon dated March 23,2001.We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether City of Seward's financial statements are free of material misstatement,we performed tests of its compliance with certain provisions of laws,regulations, contracts and grants,noncompliance with which could have a direct and material effect on the determination of financial statement amounts.However,providing an opinion on compliance with those provisions was not an objective of our audit and,accordingly,we do not express such an opinion.The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit,we considered City of Seward's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting.Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses.A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. This report is intended solely for the information of City of Seward's management,Honorable Mayor andCityCouncil,and appropriate federal and state agencies,and is not intended to be and should not be used by anyone other than these specified parties. Wikenda,Col ¢Co. March 23,2001 |==MCGLADREY NETWORK=An independently Owned Membe .=eworldwide Services Through ASM International 135 Offices:Anchorage,Bethel &Kenai MIKUNDA,COTTRELL &Co. A Professional Corporation CERTIFIED PUBLIC ACCOUNTANTS &CONSULTANTS 3601 "C”Street,Suite 600 ©Anchorage,Alaska 99503 (907)278-8878,Fax (907)278-5779 www.mcc-cpa.com Independent _Auditor's Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A-133 - Honorable Mayor and City Council City of Seward,Alaska Compliance We have audited the compliance of City of Seward with the types of compliance requirements _. described in the U.S.Office of Management and Budget (OMB)Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended December 31,2000.City of Seward's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questions costs.Compliance with the requirements of laws,regulations,contracts and grants applicable to each of its major federal programs is the responsibility of City of Seward's management.Our responsibility is to express an opinion on City of Seward's compliance based on our audit. We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States;and OMB Circular A-133,Audits of States,Local Governments,and Non-Profit Organizations.Those standards and OMB Circular A-133,require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance . with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred.An audit includes examining,on a test basis,evidence about City of Seward's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.We believe that our audit provides a reasonable basis for our opinion.Our audit does not provide a legal determination on City of Seward's compliance with those requirements. In our opinion,City of Seward complied,in all material respects,with the requirements referred to above that are applicable to each of its major federal programs for the year ended December 31, 2000. MCGLADREY NETWORK 136 An independentty Owned Member®Worldwide Services Through RSM InternationaltA Offices:Anchorage,Bethel &Kenai Honorable Mayor and City Council City of Seward,Alaska Internal Control Over Compliance The management of City of Seward is responsible for establishing and maintaining effective internal control over compliance with requirements of laws,regulations,contracts and grants applicable to federal programs.In planning and performing our audit,we considered City of Seward's internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses.A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws,regulations, contracts and grants that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. This report is intended solely for the information of City of Seward's management,Honorable Mayor and City Council,and appropriate federal and state agencies,and is not intended to be and should not be used by anyone other than these specified parties. Wikenda,CoXCE ¢Co, March 23,2001 137 CITY OF SEWARD Schedule of Findings and Questioned Costs Year Ended December 31,2000 AUDIT RESULT I.Summary of Auditor's Results: Financial Statements: Type of auditor's report issued:Unqualified Internal control over financial reporting: -Material weaknesses identified?yes _x no -Reportable conditions identified that are not considered to be material weaknesses? Noncompliance material to financial yes _x_none reported statements noted?__yes_x_no Federal Awards: Internal control over major programs: -Material weaknesses identified?__yes _X_no -Reportable conditions identified that are not considered to be material weaknesses? Type of auditor's report issued on compliance for yes _X_none reported major programs:Unqualified Any audit findings disclosed that are required to be reported in accordance with section 510(a)of Circular A-133?yes _X no Major program:Agency CFDA Number Program NRCS Flood Department of Agriculture 10.904 Mitigation Dollar threshold used to distinguish between Type A and B programs $300,000 Low-risk auditee No Hi.Financial Statement Findings None noted III.Federal Awards Findings and Questioned Costs None noted 138 CITY OF SEWARD Summary Schedule of Prior Audit Findings Year Ended December 31,2000 There were no prior year audit findings. 139 CITY OF SEWARD Corrective Action Plan Year Ended December 31,2000 There are no current year findings;therefore no corrective action plan is required. 140 MIKUNDA,COTTRELL &Co. A Professional Corporation CERTIFIED PUBLIC ACCOUNTANTS &CONSULTANTS 3601 "C”Street,Suite 600 ¢Anchorage,Alaska 99503 (907)278-8878,Fax (907)278-5779 www.mcc-cpa.com Independent Auditor's Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Honorable Mayor and City Council City of Seward,Alaska We have audited the general purpose financial statements of City of Seward as of and for the year ended December 31,2000,and have issued our report thereon dated March 23,2001.We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards,issued by the Comptrolter General of the United States. ComplianceAspartofobtaining reasonable assurance about whether City of Seward's financial statements are free of material misstatement,we performed tests of its compliance with certain provisions of laws,regulations, contracts,and grants,noncompliance with which could have a direct and material effect on the determination of financial statement amounts.However,providing an opinion on compliance with those provisions was not an objective of our audit,and accordingly,we do not express such an opinion.The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit,we considered City of Seward's internal contro]over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting.Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses.A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. This report is intended solely for the information of the City of Seward's management,Honorable Mayor and City Council,and the State of Alaska,and is not intended to be and should not be used by anyone other than these specified parties. WMikuntka,CoAHCALE ¢Co. March 23,2001 141 An independently Owned Membe:.@Worldwnte Sermces Through FISM International Offices:Anchorage,Bethel &KenaikMCGLADREYNETWORK MIKUNDA,COTTRELL &Co. A Professional Corporation CERTIFIED PUBLIC ACCOUNTANTS &CONSULTANTS 3601 "C”Street,Suite 600 ¢Anchorage,Alaska 99503 (907)278-8878,Fax (907)278-5779 www.mcc-cpa.com Independent Auditor's Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control Over Compliance in Accordance with the State of Alaska Audit Guide and Compliance Supplementfor State Single Audits _: Honorable Mayor and City Council City of Seward,Alaska Compliance We have audited the compliance of City of Seward with the types of compliance requirements described in the State of Alaska Audit Guide and Compliance Supplement for State Single Audits that are applicable to each of its major state programs for the year ended December 31,2000.City _ of Seward's major state programs are identified in the accompanying schedule of state financial assistance.Compliance with the requirements of laws,regulations,contracts,and grants,generalrequirements,and the specific requirements applicable to each of its major state programs is the.responsibility of City of Seward's management.Our responsibilityis to express an opinion on City of Seward's compliance based on our audit. We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States and the State of Alaska Audit Guide and Compliance Supplement for State Single Audits.Those standards and the State of Alaska Audit Guide and Compliance Supplement for State Single Audits require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major state program occurred.An audit includes examining,on a test basis,evidence about City of Seward's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.We believe that our audit provides a reasonable basis for our opinion.Our audit does not provide a legal determination of City of Seward's compliance with those requirements. In our opinion,City of Seward complied,in all material respects,with the requirements referred to above that are applicable to each of its major state programs for the year ended December 31,2000. MCGLADREY NETWORK 142 An independentiy Owned Member®Worldwide Services Through RSM internationalil'Offices:Anchorage,Bethel &Kenai Honorable Mayor and City Council City of Seward,Alaska Internal Control Over Compliance The management of City of Seward is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws,regulations,contracts,and grants applicable to state programs.In planning and performing our audit,we considered City of Seward's internal control over compliance with requirements that could have a direct and material effect on a major state program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on the internal control over compliance in accordance with the State ofAlaska Audit Guide and Compliance Supplement for State Single Audits. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses.A material weakness is a condition in which the design oroperation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws,regulations, contracts,and grants that would be material in relation to a major state program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. This report is intended solely for the information of the City of Seward's management,Honorable Mayor and City Council,and the State of Alaska,and is not intended to be and should not be used by anyone other than these specified parties. Wikunda,CoHCe€¥Co, March 23,2001 143