HomeMy WebLinkAbout2005CAFRCOMPREHENSIVE
ANNUAL FINANCIAL REPORT
of the
CITY OF SEWARD, ALASKA
For the Fiscal Year Ended
December 31, 2005
Vanta Shafer
MAYOR
Clark Corbridge
CITY MANAGER
Prepared by the Finance Department
Kristin M. Erchinger, CGFM, MPA
FINANCE DIRECTOR
CITY OF SEWARD
Comprehensive Annual Financial Report
Table of Contents
PART I - INTRODUCTORY SECTION Page
Table of Contents I -V
Letter of Transmittal VII -IX
Certificate of Achievement for Excellence in Financial Reporting X
List of Principal Officials XI
Seward Citizens — Organizational Chart X11
PART II - FINANCIAL SECTION Exhibit Page
Independent Auditor's Report 1 -2
Management's Discussion and Analysis 3 -13
Basic Financial Statements
Government -wide Financial Statements:
Statement of Net Assets A -1 16
Statement of Activities A -2 17
Fund Financial Statements:
Governmental Funds:
Balance Sheet B -1 18
Reconciliation of the Governmental Funds Balance
Sheet to Statement of Net Assets B -2 19
Statement of Revenues, Expenditures and Change in
Fund Balances B -3 20
Reconciliation of the Changes in Fund Balances of
Governmental Funds to Statement of Activities B -4 21
Statement of Revenues, Expenditures and Change in Fund
Balance - Budget and Actual - General Fund B -5 22
Proprietary Funds:
Statement of Net Assets C -1 23
Statement of Revenues, Expenses and Change in
Net Assets C -2 24
Statement of Cash Flows C -3 25 -26
Statement of Fiduciary Net Assets D -1 27
Notes to Basic Financial Statements 29 -51
Supplementary Information
Nonmajor Governmental Funds:
Combining Balance Sheet E -1 53
Combining Statement of Revenues, Expenditures and
Change in Fund Balances E -2 54
I
CITY OF SEWARD
Comprehensive Annual Financial Report
Table of Contents, continued
PART II - FINANCIAL SECTION, continued Exhibit
Supplementary Information, continued
Nonmajor Enterprise Funds:
I -2
Combining Statement of Net Assets F -1
Combining Statement of Revenues, Expenses and
J -1
Change in Net Assets F -2
Combining Statement of Cash Flows F -3
Internal Service Funds:
Combining Statement of Net Assets G -1
Combining Statement of Revenues, Expenses and
Change in Net Assets G -2
Combining Statement of Cash Flows G -3
General Fund:
Balance Sheet H -1
Schedule of Revenues, Expenditures and
Change in Fund Balance — Budget and Actual H -2
Special Revenue Funds:
Combining Balance Sheet I -1
Combining Statement of Revenues, Expenditures and
Change in Fund Balances I -2
Debt Service Fund:
Balance Sheet J -1
Statement of Revenues, Expenditures and
and Change in Fund Balance J -2
Capital Project Funds:
Combining Balance Sheet K -1
Combining Statement of Revenues, Expenditures and
Change in Fund Balances K -2
Enterprise Funds:
Electric:
Statement of Net Assets L -1
Statement of Revenues, Expenses and
Change in Net Assets L -2
Statement of Cash Flows L -3
Schedule of Operating Expenses L-4
Schedule of Composition of Net Assets L -5
Page
55
56
57 -58
60
61
62
64
65 -70
72
73
75
76
78
79
82 -83
84
85
86
87
II
CITY OF SEWARD
Comprehensive Annual Financial Report
Table of Contents, continued
PART II - FINANCIAL SECTION, continued Exhibit Page
Supplementary Information, continued
Enterprise Funds, continued
L -12 94
Water:
L -13 95
Statement of Net Assets L -6 88
Statement of Revenues, Expenses
L -15 97
and Change in Net Assets L -7 89
Statement of Cash Flows L -8 90
Schedule of Composition of Net Assets L -9 91
Combining Schedule of Water Capital Projects L -10 92
Wastewater:
Statement of Net Assets L -11 93
Statement of Revenues, Expenses
and Change in Net Assets L -12 94
Statement of Cash Flows L -13 95
Schedule of Composition of Net Assets L -14 96
Schedule of Wastewater Capital Projects L -15 97
Harbor:
Statement of Net Assets L -16 98
Statement of Revenues, Expenses
and Change in Net Assets L -17 99
Statement of Cash Flows L -18 100
Schedule of Composition of Net Assets L -19 101
Combining Schedule of Harbor Capital Projects L -20 102
Seward Marine Industrial Center:
Statement of Net Assets L -21 103
Statement of Revenues, Expenses and
Change in Net Assets L -22 104
Statement of Cash Flows L -23 105
Schedule of Composition of Net Assets L -24 106
Parking Revenue:
Statement of Net Assets L -25 107
Statement of Revenues, Expenses and
Change in Net Assets L -26 108
Statement of Cash Flows L -27 109
Schedule of Composition of Net Assets L -28 110
III
CITY OF SEWARD
Comprehensive Annual Financial Report
Table of Contents, continued
PART II - FINANCIAL SECTION, continued Exhibit Page
Supplementary Information, continued
0-2 122
Internal Service Funds:
M -6 117
Motor Pool:
M -7 118
Statement of Net Assets M -1 112
Statement of Revenues, Expenses and
N -1 119
Change in Net Assets M -2 113
Statement of Cash Flows M -3 114
Schedule of Composition of Net Assets M -4 115
Compensated Annual Leave:
Statement of Net Assets M -5 116
Statement of Revenues, Expenses and
0-2 122
Change in Net Assets M -6 117
Statement of Cash Flows M -7 118
Teen Council Agency Fund -
Assessed and Estimated Actual Value of Taxable Property 133
Schedule of Changes in Assets and Liabilities N -1 119
Capital Assets:
Schedule of Capital Assets 0-1 121
Schedule of Changes in Capital Assets 0-2 122
Schedule of Capital Assets
General Fund Expenditures by Function 131
by Function and Activity 0-3 123
Schedule of Changes in Capital Assets
Assessed and Estimated Actual Value of Taxable Property 133
by Function and Activity 0-4 124
Schedule of Expenditures of Federal Awards P -1 125
Schedule of State Financial Assistance Q -1 126
Note to the Schedules of Expenditures of Federal Awards and
State Financial Assistance 127
PART III — STATISTICAL SECTION
Table 1 General Fund Revenues by Source 129
Table IA General Government Tax Revenues by Sources 130
Table 2 General Fund Expenditures by Function 131
Table 3 Property Tax Levies and Collections 132
Table 4 Assessed and Estimated Actual Value of Taxable Property 133
Table 5 Property Tax Rates — Direct and Overlapping Governments 134
Table 6 Special Assessment Billings and Collections 135
IV
CITY OF SEWARD
Comprehensive Annual Financial Report
Table of Contents, continued
PART III — STATISTICAL SECTION, continued pace
Table 7 Ratio of Net General Obligation Bonded Debt to Assessed Value
PART IV - SINGLE AUDIT SECTION
Federal Single Audit Reports
Independent Auditor's Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standards 147
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 -133 148 -149
Schedule of Findings and Questioned Costs 150
Summary Schedule of Prior Audit Findings 151
Corrective Action Plan 152
State of Alaska Single Audit Reports
Independent Auditor's Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standards 153
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 Supplement State Single Audits 154 -155
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and Net General Obligation Bonded Debt Per Capita 136
Table 8 Legal Debt Margin 137
Table 8A Computation of Direct and Overlapping Bonded Debt 138
Table 9 Ratio of Annual Debt Service Expenditures for General
Obligation Debt to Total General Fund Expenditures 139
Table 10 Revenue Bond Coverage — Electric 140
Table 10A Revenue Bond Coverage — Harbor 141
Table 11 Property Value, Construction and Bank Deposits 142
Table 12 Principal Taxpayers 143
Table 13
1
Miscellaneous Statistics 144 -145
PART IV - SINGLE AUDIT SECTION
Federal Single Audit Reports
Independent Auditor's Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standards 147
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 -133 148 -149
Schedule of Findings and Questioned Costs 150
Summary Schedule of Prior Audit Findings 151
Corrective Action Plan 152
State of Alaska Single Audit Reports
Independent Auditor's Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standards 153
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 Supplement State Single Audits 154 -155
1/
To the Citizens of the City of Seward:
It is with great pleasure that we present the City of Seward Comprehensive Annual Financial Report for the fiscal year
ended December 31, 2005. This report satisfies state statutes and local ordinances which require that the City of Seward issue
an annual report on its financial position and activity, and that the 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 are 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. The financial statements were prepared in conformance with generally accepted accounting
principles (GAAP). All disclosures necessary to enable the reader to gain an understanding of the City's financial activities
have been included.
The City's financial statements have been audited by Mikunda, Cottrell & Company, an independent auditing firm of certified
public accountants. The goal of an independent audit is to provide reasonable assurance that the financial statements of the
City are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements; assessing the accounting principles used and the significant estimates
made by management; and evaluating the overall presentation of the financial statements. The independent auditor
concluded, based on the audit, that there was a reasonable basis for rendering an unqualified opinion that the City's financial
statements for the fiscal year ended December 31, 2005, are fairly presented in conformity with GAAP. The independent
auditor's report is presented in the financial section of this report.
The independent audit of the financial statements of the City was part of a broader, federally mandated "Single Audit"
designed to meet the special needs of federal and state granting agencies. The standards governing Single Audit engagements
require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited
government's internal controls and compliance with certain legal requirements, with special emphasis on internal controls and
legal requirements involving the administration of federal and state awards. These findings are presented in the Single Audit
Section of this report.
GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial
statements. Such narrative is presented in the form of a Management's Discussion and Analysis (MD &A), which should be
read in conjunction with this letter of transmittal. The City's MD &A can be found immediately after the report of the
independent auditors.
Profile of the City of Seward
The City was incorporated on June 1, 1912, and became a first -class City under the Alaska Statute's home rule provisions
ASS 29.04.010) upon the adoption of the City Charter by a referendum vote of the people on January 5, 1960. 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 two small - aircraft runways. The City has an area of 22
square miles and a population of 2,540. 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: Manager of Electric Utility; Chief of
Police; Finance Director; and Fire Chief.
Budgetary Control
The City's annual budget serves as the foundation for financial planning and control. All departments submit budget requests
to the City Manager on or about September 15. The City Manager utilizes these requests to formulate a proposed budget and
submits the proposed budget to the City Council at the first regular meeting in October. The Council holds public hearings on
VII
the proposed budget and generally adopts the budget at the last meeting in November. The City Manager is authorized to
make transfers between departments and line items within a fund for amounts up to $10,000. Council action is required for
transfers between funds, for all single -item purchases exceeding $10,000, and for all new appropriations. Budget -to- actual
comparisons are provided in this report for the General Fund.
Factors Affecting Financial Condition
Economy
The City's economy has experienced slow, steady growth in the past ten years as evidenced by an average annual growth in
tax revenues of 3.7 %. After adjusting for inflation, sales tax revenues continue to grow slightly, based on an increase in
taxable sales, despite zero population growth. Property tax revenues have leveled off on an inflation - adjusted basis, with the
most recent property valuation assessments taking place in 2000. Bed taxes have fluctuated over recent years with no clear
upward or downward trend, although growth is expected due to the opening of a new Holiday Inn Express hotel in July, 2005,
and remodeling and additions to existing hotels.
The City's top ten taxpayers have become more diverse in the past few years, helping to offset Seward's dependence on
tourism- related businesses and the visitor industry. This group represents various industries including real estate, coal export,
seafood processing, petroleum products, ship repair, hotel motel, construction, communications, and tourism. Seward's
largest employers continue to reflect significant government presence, including the state -owned prison and vocational
technical center, federal forest and park service agencies, the City, and the Borough school district. The hospital, long -term-
care facility, and the Alaska Sealife Center, are City -owned facilities run on the City's behalf by non - profit organizations, and
they round out the list of top employers. The largest private sector employer continues to be CIRI Alaska tourism. Seward
continues to focus efforts on expanding tourism and sees many repeat visitors from surrounding Alaskan communities.
Financial Condition
As with all municipal governments in Alaska, the City of Seward's financial strength has been adversely impacted by the near
elimination of State funding to local governments. Since 1991, State funding to the City of Seward has declined an average of
525,000 per year. When adjusted for inflation, these cuts are equivalent to 3.5 mills of property tax or an additional one cent
sales tax. The State Legislature has eliminated vital programs such as state revenue sharing and safe communities, and
reduced funding for road maintenance and medical programs, thereby shifting the costs of providing services down to the
local government level. Since the early 1990s, the City of Seward has increased its property mill rate only 0.12 mills (equal
to $12 on a home valued at $100,000). Approximately 65 % of property located within Seward is considered to be owned by
non - taxable government or non - profit entities, giving Seward a very low tax base on which to generate property tax. In order
to offset reductions in State funding, and to absorb significant cost increases associated with unfunded mandates and higher
costs of services, the sales tax rate was increased from 3% to 4% in July, 2003.
Major Projects
In the near future, the City faces the challenge of completing a number of large capital projects. In conjunction with the State
DOT's reconstruction of Third Avenue, the City is replacing its primary water main from Railway Avenue to Port Avenue.
This project includes re- construction of sidewalks, curbs, and gutters, and will cost approximately $3 million. The project is
funded through an increase in water rates to support a loan from the State of Alaska Department of Environmental
Conservation. The City is expanding the Small Boat Harbor to meet the more than 500 customers currently on the waiting
list for slips. The first phase of the expansion project will be completed by May 2006, at a cost of $1.5 million, and adds 34
new slips, 382 linear feet of moorage, and relocates X float and the fuel float. The second phase of the project will cost $4.5
million and will add 106 new slips, 377 feet of linear moorage, and 1,024 feet of skiff space. Funding for these two phases of
the project is provided by revenue bonds backed by an increase in moorage fees and passenger fees. Plans are underway to
replace the long- term -care facility at an approximate cost of $27 million. This project will require revenue bond financing
and will be supported by facility capital cost reimbursement rates. The City's roads and streets are in need of significant
repairs and the City Council has yet to determine how best to finance these necessary capital repairs.
Cash Management Policies and Practices
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 Seward City
Code authorizes investment in obligations of the U.S. Treasury, its agencies and instrumentalities, repurchase agreements,
fully collateralized certificates of deposit, high rated commercial paper, bankers' acceptances, and the Alaska Municipal
League Investment Pool. The City combines all cash into a Central Treasury, facilitating the investment of combined funds to
maximize investment earnings. Earnings on these investments are allocated monthly to participating funds based on ending
equity balances.
VIII
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's insurance coverage for property, general liability,
public officials and employees' liability, law enforcement professional liability, and workers' compensation. The City also
maintains special marine insurance coverage and boiler and machinery insurance coverage with other insurance companies.
This specialized insurance is 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 fund balance (currently $519,418)
to meet potential insurance - related losses, and to support higher deductibles to minimize insurance premiums.
Pension and Other Post - employment Benefits
The City provides pension benefits for all eligible employees through the State of Alaska Public Employees Retirement
System ( "PERS "). The City has no obligations in connection with employee benefits offered through this plan beyond its
annual required payments to the plan. The City has always paid its annual required contribution rates on time. The City's
contribution rate to PERS for 2005 was 8.74% through June 30, and rose to 13.74% effective July 1, 2005. The actuarially
required rate the latter half of 2005 rose to 24.26%. While the policy of the PERS Board has historically been to restrict
annual rate increases to 5% per year, there is reason to believe that the Board may be inclined to raise rates to equal the
actuarially determined rate, in order to avert the significant increase in unfunded liability accruing as a result of participants
paying contributions below the required rate. Therefore, the City's actual rates may rise to meet the actuarially required
contribution rate of 24.26%, in the near future.
Seward, like other local governments in Alaska, is facing significant and growing unfunded liabilities associated with the
PERS. In 2002, the City of Seward was reported to have an over - funded balance with the PERS system. By 2003, the City's
actuarially determined unfunded liability was assessed at $4,397,000. By 2004, the liability grew to $6,288,000, and based on
a recent review of actuarial assumptions by the new PERS actuary, Seward's estimated unfunded liability is now
approximately $8,048,088. At the assumed rate of 8.25%, the liability grows each year by more than $600,000 in interest
costs alone. The City must develop a long -term plan for funding this liability. Unfortunately, due to State constitutional
limitations, general obligation bonds cannot be used to finance this unfunded liability at a lower interest rate. This significant
unfunded liability has resulted in an increase to the City's annual contribution to PERS by more than $1 million over a five -
year period. In addition to the costs of local government PERS, the City is also repaying $2.1 million in PERS close -out costs
associated with the closure of Seward General Hospital in 1996. The debt on this outstanding obligation results in annual
payments to PERS of $210,000 for each of the next 14 years, over and above the $600,000 per year in interest mentioned
above.
Financial Reporting Award
The Government Finance Officer's 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 for the
fiscal year ended December 31, 2004. This is the eleventh consecutive year that the City of Seward has received this
prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and
efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting
principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe
that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's
requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.
Acknowledgments
Preparation of the Comprehensive Annual Financial Report could not have been accomplished without the 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. 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,
Clark Corbridge, City Manage Kristin Erchinger, MPA, CGFM, Finance Director
IX
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, 2004
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.
President
Q
Executive Director
X
CITY OF SEWAR.D
LIST OF PRINCIPAL OFFICIALS
COUNCIL MEMBERS
ATTORNEY
Cheryl Brooking City Attorney
Wohlforth, Johnson, Brecht, Cartledge, Brooking
The City of Seward is a home -rule city with a council- manager form of government.
Legislative powers of the City of Seward are vested in a council consisting of a
mayor and six council members. The mayor and each council member are elected
from the city at large. The term of office is two years. The appointed officers of the
city include the city manager, city clerk, and the city attorney. The city council
generally meets on the second and fourth Mondays of each month in the City Council
Chambers located in the City Hall Building located at 410 Adams Street in Seward,
Alaska.
X1
Term Expires
Vanta Shafer Mayor 2007
Willard Dunham Council Member 2006
Jean Bardarson Council Member 2006
Steve Schafer Council Member 2007
Bob Valdatta Council Member 2007
Robert Thomas Council Member 2007
Dorene Lorenz Council Member 2006
ADMINISTRATION
Clark Corbridge City Manager
Kirsten Vesel Assistant City Manager
Kristin Erchinger Finance Director
Tim Barnum Manager of Electric Utility
Scott Ransom Harbormaster
Tom Clemons Chief of Police
David Squires Fire Chief
Karin Sturdy Parks & Recreation Director
Patty Linville Library Director
CITY CLERK
Jean Lewis City Clerk
ATTORNEY
Cheryl Brooking City Attorney
Wohlforth, Johnson, Brecht, Cartledge, Brooking
The City of Seward is a home -rule city with a council- manager form of government.
Legislative powers of the City of Seward are vested in a council consisting of a
mayor and six council members. The mayor and each council member are elected
from the city at large. The term of office is two years. The appointed officers of the
city include the city manager, city clerk, and the city attorney. The city council
generally meets on the second and fourth Mondays of each month in the City Council
Chambers located in the City Hall Building located at 410 Adams Street in Seward,
Alaska.
X1
City of Seward
Organizational Chart
Citizens
r
Mai G Cc d- t21t)
Boards &
Commissions City Manager City Clerk City Attorney
7 7 ate,
Planning & Zoning
Port & Commerce
Historic Preservation
Police Finance Fire Engineering &
Building Inspection
Parks & Recreation Harbor Community LibraryDevelopment
XII
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 financial statements of the governmental activities, the
business -type activities, each major fund, and the aggregate remaining fund information of the City
of Seward, Alaska, as of and for the year ended December 31, 2005 which collectively comprise the
City's basic financial statements as listed in the table of contents. These financial statements are the
responsibility of the City's management. Our responsibility is to express opinions on these financial
statements based on our audit. We did not audit the financial statements of Providence Seward
Medical Center, a component unit of the City of Seward. Those financial statements were audited
by other auditors whose report thereon has been furnished to us, and our opinion, insofar as it relates
to the amounts included for Providence Seward Medical Center, is based on the report of the other
auditors.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and the significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinions.
In our opinion, based on our audit and the report of the other auditors, the financial statements
referred to above present fairly, in all material respects, the respective financial position of the
governmental activities, the business -type activities, the aggregate discretely presented component
unit, each major fund, and the aggregate remaining fund information of the City of Seward, Alaska
as of December 31, 2005, and the respective changes in financial position and cash flows, where
applicable, thereof and the respective budgetary comparison for the General Fund for the year then
ended in conformity with accounting principles generally accepted in the United States of
America.
RSM McGladrey Network
An independently Owned Member Offices: Anchorage, Kenai & Seward
Honorable Mayor and City Council
City of Seward, Alaska
In accordance with Government Auditing Standards, we have also issued our report dated March
24, 2006 on our consideration of City of Seward's internal control over financial reporting and on
our tests of its compliance with certain provisions of laws, regulations, contracts, and grant
agreements and other matters. The purpose of that report is to describe the scope of our testing of
internal control over financial reporting and compliance and the results of that testing, and not to
provide an opinion on the internal control over financial reporting or on compliance. That report is
an integral part of an audit performed in accordance with Government Auditing Standards and
should be considered in assessing the results of our audit.
The Management's Discussion and Analysis is not a required part of the basic financial statements
but is supplementary information required by the Governmental Accounting Standards Board. We
have applied certain limited procedures, which consisted principally of inquiries of management
regarding the methods of measurement and presentation of the required supplementary information.
However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Seward's basic financial statements. The accompanying
Schedule of Expenditures of Federal Awards, Schedule of State Financial Assistance, and the
combining and individual fund financial statements and schedules are presented for purposes of
additional analysis and are not a required part of the basic financial statements. The Schedule of
Expenditures of Federal Awards is required by the U.S. Office of Management and Budget
Circular A -133, Audits of States, Local Governments, and Nonprofit Organizations and the
Schedule of State Financial Assistance is required by the State of Alaska Office of Management
and Budget, State of Alaska Audit Guide and Compliance Supplement for State Single Audits.
Such information has been subjected to the auditing procedures applied in the audit of the basic
financial statements and in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
The introductory section and statistical tables have not been audited by us and accordingly, we
express no opinion on them.
March 24, 2006
2
CITY OF SEWARD
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2005
As management for the City of Seward, we hereby offers readers of the City's Comprehensive Annual
Financial Report this narrative overview and analysis of the financial activities of the City of Seward
for the fiscal year ended December 31, 2005. In addition to this discussion and analysis, readers are
encouraged to read our letter of transmittal found on pages VII -IX of this report, which provides
additional summary information.
FINANCIAL HIGHLIGHTS
I. The assets of the City of Seward exceed liabilities by $140,685,934 at December 31, 2005. Of
this amount, $122,650,408 represents investment in capital assets net of debt, and the
remainder of $18,035,526 represents unrestricted net assets. Unrestricted net assets does not
necessarily reflect a surplus of resources, as a portion of net assets is designated for capital
grants, for capital replacement, or for other purposes as determined by the City Council.
2. Excluding business -type activities, the assets of the primary government exceeded liabilities at
December 31, 2005 by $62,441,649. Of this amount, $5,946,268 in unrestricted net assets is
legally unreserved and available to meet the government's ongoing financial obligations,
although the Council has earmarked a portion of these funds for specific purposes.
3. The City's total net assets increased by $1,907,525. Governmental activities increased by
80,054 and business -type activities increased by $1,827,471.
4. The City's governmental funds reported combined ending fund balances of $7,074,714,
representing an increase of $66,009 compared to the prior year. While $5,895,173 of the fund
balance is legally available for spending (unreserved fund balance), only $2,841,928 has not
already been earmarked for specific purposes.
5. The total debt of the governmental activities decreased by $607,412 or 6.6 %, and the total debt
of business -type activities increased by $1,107,853 or 17.1 %.
OVERVIEW OF THE FINANCIAL STATEMENTS
This Management Discussion and Analysis serves to introduce readers to the City of Seward's basic
financial statements, which includes the government -wide financial statements, the individual fund
statements, and notes to the financial statements. In addition to the basic financial statements, this
report also contains other required supplementary information. The basic financial statements include
two types of statements reflecting different views of the City's financial activities:
Government -wide financial statements summarize the City's overall financial condition and
contain both short-term and long -term information. This information is intended to present a
broader view of the City as a whole in a manner similar to private- sector business.
K3
2. Fund financial statements focus on specific areas of City operations and provide more detail
than the government -wide statements. These statements are only slightly changed from the
historical financial reporting model used by the City.
Government -wide Financial Statements
The government -wide financial statements are intended to provide a comprehensive look at all
financial activities of the City. Prior to implementation of the new government financial reporting
model, government financial statements separately summarized business -like activities and non -
businesslike activities, but did not aggregate those into a total government -wide perspective. The new
government -wide financial statements are presented on the accrual basis of accounting, in a manner
similar to a business enterprise.
The Statement of Net Assets presents information on all City assets less liabilities, resulting in net
assets. The purpose of this statement is to present the overall financial position of the City. Over time,
increases or decreases in net assets may demonstrate whether the City's financial position is improving
or deteriorating. There are other non - financial factors, such as the condition of public facilities, roads
and infrastructure, which should be considered in evaluating the City's overall financial condition.
The Statement of Activities demonstrates how the City's net assets changed as a result of the current
year's activities. This statement is prepared on the accrual basis of accounting which is comparable to
private- sector businesses. Revenues and expenses are reported when the underlying event giving rise
to the change occurs, regardless of the timing of the related cash flows. Therefore, revenues and
expenses are reported in this statement for some items that will result in cash flows in future fiscal
periods.
Both of the government -wide financial statements distinguish functions of the City of Seward that are
principally supported by taxes and intergovernmental revenues (governmental activities) from other
functions that are intended to recover all or a significant portion of their costs through user fees and
charges (business -type activities). The governmental activities of the City of Seward include general
government, public safety, public works, parks and recreation, library, hospital, and Alaska Sealife
Center. The business -type activities of the City include harbor, marine industrial center, electric,
water, wastewater, and parking. The basic government -wide financial statements can be found on
pages 16 -17 of this report.
Fund Financial Statements
A fund is a group of related accounts used to maintain control over resources that have been segregated
for specific activities or purposes. The City of Seward, like other state and local governments, uses
fund accounting to ensure and demonstrate compliance with legal requirements. The funds of the City
of Seward are divided into three categories: governmental funds, proprietary funds, and fiduciary
funds, each of which is further described below.
Governmental Funds
Governmental Funds are used to account for essentially the same functions reported as governmental
activities in the government -wide financial statements. However, unlike the government -wide
financial statements which provide a broad overview and include short-term and long -term
information, the governmental funds' financial statements focus on near -term inflows and outflows of
spendable resources, as well as on balances of spendable resources available at the end of the fiscal
year. Such information is useful in evaluating a government's near -term financing requirements.
4
However, because the focus of governmental funds is more narrow than that of the government -wide
financial statements, it is useful to compare the, information presented for governmental funds, with
similar information presented for governmental activities in the government -wide financial statements.
Such a comparison enables the reader to better understand the long -term impact of a government's
near -term financing decisions. Both the Governmental Funds Balance Sheet and the Governmental
Funds Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to
facilitate the comparison between governmental funds and governmental activities.
The City of Seward maintains twenty individual governmental funds. Information for the General
Fund is presented in a distinct column in the Governmental Funds Balance Sheet and in the
Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances, with the
other nineteen governmental funds aggregated and shown in the Nonmajor Funds column on these
same two statements. Individual fund information for the nonmajor governmental funds is provided in
the form of combining statements elsewhere in this report.
The City of Seward adopts an annual appropriated budget for the General Fund. A budgetary
comparison statement can be found on page 22 to demonstrate compliance with the annual budget, and
a list of budgetary highlights can be found later in this document. The basic governmental fund
financial statements can be found on pages 18 -22 of this report.
Proprietary Funds
The City of Seward maintains two types of proprietary funds; enterprise funds and internal service
funds. Enterprise funds are used to report the functions identified as business -type activities in the
government -wide financial statements. The City uses enterprise funds to account for the harbor,
Seward Marine Industrial Center, electric utility, water utility, wastewater utility, and parking
operations. Information for each of these funds is presented in the individual fund statements found on
pages 82 -110 of this report.
Internal service funds are used to accumulate and allocate costs internally among the various functions
of the City. The City of Seward utilizes two internal service funds to account for its motor pool
equipment replacement program and its compensated annual leave resources. The equipment .
replacement program benefits both governmental and business -like functions. As a result, its activities
have been allocated among both the governmental and business -like activities in the government -wide
financial statements. Accrued leave that is earned in the governmental funds is accounted for in the
Compensated Annual Leave Internal Service Fund. Individual fund data for the internal service funds
can be found on pages 112 -118 of this report.
Fiduciary Funds
Fiduciary funds account for resources held by the City in a trustee capacity, for the benefit of parties
outside of the government. Fiduciary funds are not reflected in the government -wide financial
statements because the resources of those funds are not available to support programs of the City. The
accounting used for fiduciary funds is similar to that of governmental funds. The Teen Council
Agency Fund and data for that fund can be found on page 119 of this report.
Notes to the Basic Financial Statements
The notes provide additional information that is essential to a complete understanding of the data
provided in the government -wide and fund financial statements. The notes to the financial statements
can be found on pages 29 -51 of this report.
5
Other Information
In addition to the basic financial statements and accompanying notes, this report presents required
supplementary information on the public employees retirement system on pages 45 -48 of this report.
GOVERNMENT -WIDE FINANCIAL STATEMENTS
Statement of Net Assets
Over time, net assets may serve as a useful indicator of a government's financial position. At
December 31, 2005, the City's assets exceeded liabilities by $140,685,934. A significant portion of
the City's net assets (87%) reflects its investment in capital assets, less any outstanding debt used to
acquire those assets. Capital assets are not liquid and are not available for future spending. Since the
investment in capital assets is reported net of related debt, it should be noted that the resources needed
to repay this debt must be provided from other sources, since the capital assets themselves cannot be
used to liquidate these liabilities.
The following table provides a summary of the City's net assets:
Table 1
Statement of Net Assets
As of December 31, 2005
Net Assets:
Invested in capital assets, net of
related debt 56,495,381 66,155,027 122,650,408
Unrestricted 5.946.268 12,089,258 18.035.526
Total Net Assets $ 62.441.649 $ 78 244 28 $ 140.685.934
0
Governmental Business -Type
Activities Activities Total
Current and other assets 9,472,569 14,050,544 23,523,113
Capital assets 62,705,930 73,493,554 136,199,484
Total Assets 72,178,499 87,544,098 159,722,597
Long -term liabilities outstanding 8,564,473 7,593,832 16,158,305
Other liabilities 1,172,377 1,705,981 2,878,358
Total Liabilities 9,736,850 9,299,813 19,036,663
Net Assets:
Invested in capital assets, net of
related debt 56,495,381 66,155,027 122,650,408
Unrestricted 5.946.268 12,089,258 18.035.526
Total Net Assets $ 62.441.649 $ 78 244 28 $ 140.685.934
0
Statement of Activities
The City's total revenues and expenses for governmental and business -type activities are reflected in
the following table.
Revenues:
Program revenues:
Charges for services
Operating grants and
contributions
Capital grants and contributions
General revenues:
Sales taxes
Property taxes
Payments in lieu of tax
Other
Total Revenues
Expenses:
General government
Public safety
Public works
Parks and recreation and
Library
Hospital and Unallocated
Interest
Sea Life Center
Electric
Water
Wastewater
Harbor
Marine Industrial Center
Parking
Total Expenses
Increase (Decrease) in Net Assets
before transfers
Transfers
Increase (Decrease) in Net Assets
Beginning Net Assets
Prior Period Adjustment
Ending Net Assets
Table 2
Change in Net Assets
For the Years Ended December 31, 2005 and 2004
Governmental Activities Business -Type Activities
2005 2004 2005 2004
1,543,173 1,686,754
157,809 112,945
880,372 1,053,026
11,638,348 $10,720,244
3,149,335 722,130
Total Activities
2005 2004
13,181,521 12,406,998
157,809 112,945
4,029,707 1,775,156
3,411,283 3,123,314 3,411,283 3,123,314
802,539 973,948 802,539 973,948
96,614 89,473 - -96,614 89,473
841,832 1,377,132 686,039 138,720 1,527,871 1,515,852
7,733,622 8,416,592 15,473,722 11,581,094 23,207,344 19,997,686
1,770,306 1,731,427 - -1,770,306 1,731,427
2,383,911 2,299,873 2,383,911 2,299,873
1,383,178 1,265,153 1,383,178 1,265,153
1,466,633 1,405,045
901,141 812,979
1,028,302 1,804,367
8,933,471 9,318,844
1,199,849)902,252)
1,279,903 857,313
80,054 44,939)
62,361,595 62,406,534
61441,649 $ 62,361,595
6,863,724 6,419,925
760,363 687,542
705,508 706,332
2,402,810 2,282,991
1,521,930 1,591,311
112,013 95,209
12,366,348 11,783,310
3,107,374 (202,216)
1,279,903) 8( 57,313
1,827,471 (1,059,529)
76,416,814 77,402,750
73,593
78,244,285 $ 76,416,814
1,466,633 1,405,045
901,141 812,979
1,028,302 1,804,367
6,863,724 6,419,925
760,363 687,542
705,508 706,332
2,402,810 2,282,991
1,521,930 1,591,311
112,013 95,209
21,299,819 21,102,154
1,907,525 (1,104,468)
1,907,525 (1,104,468)
138,778,409 139, 809,284
73,593
140,685,934 $ 138,778,409
7
Governmental Activities
Governmental activities increased the City of Seward's net assets by $80,054. The following items are
of particular note:
Revenues and other financing sources exceeded expenditures and other financing uses by
66,009. This is due primarily to an increase in the fund balance of the General Fund of
139,537, which was offset by a $73,528 decrease in fund balance of the other governmental
funds.
Overall, General Fund revenues came in $576,138 higher than budgeted, representing an
increase of $577,986 from 2004. In particular, sales tax revenues were $351,283 higher than
anticipated, property tax was $79,540 higher than budget, and bed tax was higher by $49,656.
General Fund departments did a good job of containing costs, coming in under budget overall
by $478,750.
The City does not generate sufficient tax revenues to cover depreciation on general government
assets. To replace capital assets in the future, the City will need to rely on external financing
sources such as grants or incurring debt.
The following graph reflects the revenues and expenses associated with each of the general
government's primary programs:
Graph 1: Governmental Activities — Program Revenues and Expenses
3,000
2,500
2,000
1,500
1,000
500
0
Gen'l Public Public Parks & Library Hospital Sealife Interest
Govt Safety Works Rec Center on debt
Revenue Expenses
8
Business -Type Activities
Business -type activities increased the net assets of the City of Seward by $1,827,471. As with the
governmental activities, a substantial portion (85%) of the net assets is invested in capital assets. The
increase in net assets is comprised of the following:
Net assets decreased in the electric utility ($258,393) and the Seward Marine Industrial Center
1,002,239), and increased in the harbor enterprise ($2,157,936), and water utility ($692,642).
The non -major enterprise funds (including parking, and wastewater) had a combined increase
in net assets of $106,495.
Allocations of the motor pool internal service fund to the business -type activities added
131,030 to net assets.
The net decrease in electric utility assets of $258,393 is primarily due to transfers out to other
funds of the City, including $1,103,629 to the General Fund ($250,326 of which was used to
subsidize operations at the marine industrial center). Earnings from operations totaled
584,700, indicating that the electric fund would be able to fully fund depreciation, were it not
for net transfers out totaling $1,103,629. Cash balances in the electric utility increased
189,401 in 2005.
The net increase in water utility assets of $692,642 is primarily due to insurance proceeds of
359,120 for repair of the SMIC water tank, investment earnings of $73,338, and earnings from
operations of $257,015 due to an increase in water rates in 2005. Cash balances in the water
utility increased $167,311 due to insurance proceeds.
The net increase in harbor enterprise assets of $2,157,936 is due entirely to capital
contributions from grants for the inner - harbor construction project, including the breakwater.
The loss from operations of $343,620 means that the harbor would be able to fund $633,213 of
its depreciation if it did not have any long -term debt or contributions to other funds. In 2005,
long -term debt payments totaled $255,542, and transfers to other funds totaled $271,977. The
increase in cash in the harbor of $225,331 reflects the issuance of revenue bonds in the amount
of $1,500,000.
The net decrease in Seward Marine Industrial Center assets of $1,002,239 is due entirely to the
inability of this operation to fund depreciation of $1,130,826. This fund is unable to cover its
operating costs excluding depreciation. When considering non - operating debt payments of
263,676, this fund requires subsidies from other funds to cover all of its annual debt costs.
The non -major funds resulted in the following: net increase in parking enterprise assets of
42,307 and an increase in cash of $47,797, and a net increase in wastewater enterprise assets
of $64,188, and an increase in cash of $56,282.
01
ANALYSIS OF THE CITY'S FUNDS
Governmental Funds
The City of Seward's governmental funds focus on near -term inflows, outflows, and balances of
spendable resources. As such, you will not find long -term capital assets or long -term debt displayed
on the governmental funds' individual fund financial statements. This focus on near -term inflows and
outflows assesses whether the City is generating sufficient revenues in the current year to pay for
current -year obligations. However, it does not indicate whether there are sufficient funds available to
cover long -term obligations. The level of unreserved fund balance is an important indicator of the
amount of net resources available for spending at the end of the year.
At the end of the year, the City of Seward's governmental funds reported combined ending fund
balances of $7,074,714. Of this amount, $1,179,541 has been legally reserved (reserved fund balance)
for inventory and prepaid expenses ($357,290) and to meet debt service requirements ($822,251). In
addition, $483,827 is intended to be spent on capital and special revenue projects, leaving a balance of
3,369,780 in the General Fund available to meet unforeseen needs and emergencies, as well as to
meet future spending needs. However, additional funds have been set aside for hospital cash flow
purposes ($500,000) and grants ($50,000), leaving only $2,819,780 which has not been earmarked by
Council for specific purposes in the General Fund, such as working capital and insurance reserves,
although these are not legal dedications.
Compared with the prior year, fund balances in the governmental funds increased by $66,009,
representing.a net increase of $139,537 in the General Fund, and a net decrease of $73,528 in the non -
major governmental funds. This net increase in fund balance is due to the following:
General Fund revenues were $132,145 lower than expenditures, but the deficit was offset by
net transfers -in of $271,682. Overall, General Fund revenues were $576,138 higher than
budgeted, while expenditures were $478,750 less than budget.
Special revenue fund projects experienced a net decrease in fund balance of $94,584 due to
grant - related expenditures exceeding revenues for the year. However, there were sufficient
reserves available to cover the single -year deficit.
The debt service fund experienced a net increase in fund balance of $133,816. This fund
receives income from a one -cent sales tax dedicated to hospital - related capital expenditures,
and investment income. In 2005, sales tax and investment income exceeded debt payments by
133,816, despite the fact that this fund contributed $211,128 toward repayment of hospital
pension liabilities.
Capital projects experienced a decrease in fund balance of $112,760 primarily due to transfers
out of the capital acquisition fund for repair of the SMIC water tank.
10
Proprietary Funds
The City of Seward maintains two types of proprietary funds; enterprise funds and internal service
funds. The City's six enterprise funds (harbor, electric, water, wastewater, parking, and marine
industrial center) report the same functions presented as business -type activities in the government -
wide financial statements, but the individual fund statements are presented in more detail. Enterprise
funds reported total net assets of $77.2 million but of that amount, $65.7 million (85%) is invested in
capital assets net of related debt, leaving unrestricted net assets of approximately $11.4 million. More
specific factors influencing the net assets of the enterprise funds are addressed above in the discussion
of the City's business -type activities.
The City maintains two internal service funds; the motor pool and the compensated annual leave fund.
The motor pool internal service fund accumulates cash for the replacement of the City's motor vehicle
fleet. Departments contribute to the motor pool to purchase vehicles and annually pay into the motor
pool to forward -fund replacement of vehicles. This funding mechanism spreads the costs of the
vehicles over the life of the vehicle in each program's annual budget, rather than to show the cost as a
one -time expense in the year of purchase. The balance of unrestricted net assets in the motor pool at
year -end is $1,660,907, with these funds earmarked to replace existing heavy equipment and vehicles.
The compensated annual leave fund was created in 2005 for the purpose of accumulating cash reserves
to pay annual leave cash -outs for governmental funds. The balance of cash in this fund at the end of
2005 is $297,064.
General Fund Budgetary Highlights
There were a number of modifications to the budget during the year, as described below:
Intergovernmental revenues were upward adjusted by $138,439 to reflect the acceptance of
128,680 from the State of Alaska based on the State Legislature's single -year contribution to
municipalities for PERS, plus a library grant and historic preservation grant.
Expenditures were increased by $564,679 to reflect the following: $172,957 increase in
retirement benefit costs; $290,000 to purchase land for a future library /museum; $30,000 to
fund a Certificate of Need application for the new long -term care facility; $81,400 to construct
a storage building at City Hall.
Transfers to other funds were increased as follows: $96,306 to reflect additional sales tax to the
Hospital Debt Service Fund; $211,128 for Hospital PERS payments; $61,000 for hospital
capital equipment; and $50,000 for community center elevator repairs.
Transfers from other funds were increased to reflect transfers from the capital acquisition fund
for the purchase of property for the future library /museum.
General Fund revenues were $132,145 less than expenditures, and after transfers between funds were
accounted for, there was a net increase in fund balance in the General Fund of $139,537. Revenues
came in $576,138 higher than budgeted due to a number of factors, namely tax revenues exceeded
projections by $510,197 and investment income exceeded budget by $67,542.
11
Due to the diligent effort of departments focused on controlling costs, General Fund expenditures came
in under budget by $478,750. The largest savings were in public safety ($269,269 under budget) and
public works ($218,951 under budget). Departments coming in over budget were mayor and council
and legal ($78,412), city manager ($12,183), fire ($6,126), engineering and building inspection
3,404), parks and recreation ($23,705), and library ($819). The delays in filling vacant positions
provided a cost savings in personnel of $569,185.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
As of December 31, 2005, the City had $122,650,408 invested in capital assets (net of accumulated
depreciation), representing an overall increase of $234,798 from the previous year.
Table 3
City of Seward Capital Assets
in thousands, net of depreciation)
Governmental Business -type
Activities Activities
2004
15,744
919
48,046
2,991
4,209
Total
2005 2004
20,312 $20,023
50,778 51,815
47,584
2005 2004 2005
Land and improvements 4,568 4,279 15,744
Buildings 49,943 50,896 835
Improvements other than 2,576 3,144 45,008
buildings
Machinery and equipment 2,923 3,124 5,598
Construction in progress 2,696 2,434 6,309
Total net capital assets 62.706 63.877 73.494
2004
15,744
919
48,046
2,991
4,209
Total
2005 2004
20,312 $20,023
50,778 51,815
47,584 51,190
8,521 6,115
9,005 6,643
71902 $ ?! $ a5j_M
Additional information regarding the City of Seward's capital assets can be found in Footnote 4 on
page 37.
Long -term Debt
As of December 31, 2005, the City had total debt outstanding of $16,558,443. Of this amount,
6,870,000 represents outstanding general obligation bonds backed by the full faith and credit of the
City. General obligation bonds outstanding include the hospital, streets and sidewalks, the community
center building, and the North SMIC dock. An additional $6,410,000 represents revenue bonds backed
by operating revenues from City harbor ($4.12 million) and electric ($2.29 million) enterprise funds.
The remaining debt represents outstanding capital equipment leases on a loader /grader and fire
department air packs, as well as wastewater loans, compensated absences and net pension obligation.
12
Table 4
City of Seward Outstanding Debt
in thousands)
Governmental Business -type
Activities Activities Total
2005 2004 2005 2004 2005 2004
General Obligation Bonds $6,349 $7,069 521 $ 666 $ 6,870 $ 7,735
Revenue Bonds - -6,410 5,155 6,410 5,155
Capital Leases 258 327 95 258 422
Loans 1,716 -466 518 2,182 518
Comp. Absences & Net PO - 638 441 201 167 839 608
Total Outstanding Debt $&2_61 $7,V7 7,H $ 6.601 $ 16.559 $ 14.438
Further detail regarding the City's long -term outstanding debt can be found on pages 39 -44.
Requests for Information
The City of Seward's financial statements and the accompanying information are designed to present
users (citizens, taxpayers, elected officials, customers, investors, and creditors) with a general
overview of the City's finances, and to demonstrate accountability to taxpayers and ratepayers.
Questions concerning information in this report, or requests for additional information, can be
addressed to the City of Seward, Attention: Finance Director, P.O. Box 167, Seward, Alaska 99664.
13
BASIC FINANCIAL STATEMENTS — OVERVIEW
These financial statements provide a summary overview of the financial position and results of
operations of all funds of the City, aggregated at the government -wide and the major fund level.
The following statements are included in this section:
Statement of Net Assets
Statement of Activities
Governmental Funds - Balance Sheet
Reconciliation of Governmental Funds Balance Sheet to Statement of Net Assets
Governmental Funds - Statement of Revenues, Expenditures, and Changes in Fund
Balances
Reconciliation of the Changes in Fund Balances of Governmental Funds to
Statement of Activities
General Fund - Statement of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual
Proprietary Funds - Statement of Net Assets
Proprietary Funds - Statement of Revenues, Expenses, and Changes in Net Assets
Proprietary Funds - Statement of Cash Flows
Statement of Fiduciary Net Assets
Notes to Basic Financial Statements
15
CITY OF SEWARD
Statement of Net Assets
December 31, 2005
Exhibit A -1
Net Assets
Invested in capital assets,
net of related debt
Unrestricted
Total net assets
Total liabilities and net assets
56,495,381 66,155,027 122,650,408 -
5,946,268 12,089,258 18,035,526 574,000
62,441,649 78,244,285 140,685,934 574,000
72,178,499 87,544,098 159,722,597 3,601,000
See accompanying notes to basic financial statements.
16
Component
Unit
Providence
Primary Government Seward
Governmental Business -type Medical
Activities Activities Total Center
Assets
Cash and investments 8,241,773 7,781,873 16,023,646 1,772,000
Receivables, net of allowance
for doubtful accounts:
Taxes 599,558 599,558
Accounts 120,911 1,075,382 1,196,293 1,535,000
Assessments, due within one year 1,156 15,952 17,108
Grants and shared revenues 118,569 902,794 1,021,363
Accrued interest 12,080 12,080
Other 72,710 72,710 80,000
Prepaid items 346,165 346,165 45,000
Inventories 11,125 616,371 627,496
Restricted cash and investments 3,437,783 3,437,783 169,000
Deferred charges 53,862 53,862
Assessments, due after one year 115,049 115,049
Internal balances 21,232 21,232)
Capital assets not being depreciated 7,264,156 22,053,187 29,317,343
Capital assets being depreciated 55,441,774 51,440,367 106,882,141
Total assets 72,178,499 87,544,098 159,722,597 3,601,000
Liabilities
Accounts payable 739,450 714,654 1,454,104 156,000
Accrued payroll 136,225 67,128 203,353 634,000
Accrued interest 144,628 59,753 204,381
Accrued liabilities 117,913 36,214 154,127 2,182,000
Funds held in trust 10,579 10,579
Customer deposits 281,251 281,251
Deferred revenue 23,582 546,981 570,563
Noncurrent liabilities:
Due within one year:
Accrued leave 72,153 27,202 99,355
Notes payable 55,117 55,117
Bonds payable 772,425 467,575 1,240,000
Capital lease obligations 72,390 72,390
Due in more than one year:
Accrued leave -224,911 79,551 304,462
Notes payable 410,426 410,426
Bonds payable 5,576,146 6,463,854 12,040,000
Deferred loss on refunding 395,555)76,850)472,405)
Unamortized bond premium 72,267 72,267
Capital lease obligations 185,143 185,143
PERS liability - Hospital 1,715,596 1,715,596
Net pension obligation 341,264 94,690 435,954
Other liabilities 55,000
Total liabilities 9,736,850 9,299,813 19,036,663 3,027,000
Net Assets
Invested in capital assets,
net of related debt
Unrestricted
Total net assets
Total liabilities and net assets
56,495,381 66,155,027 122,650,408 -
5,946,268 12,089,258 18,035,526 574,000
62,441,649 78,244,285 140,685,934 574,000
72,178,499 87,544,098 159,722,597 3,601,000
See accompanying notes to basic financial statements.
16
CITY OF SEWARD
Statement of Activities
Year Ended December 31, 2005
Exhibit A -2
Component Unit -
Seward General Hospital 11,185,000 10,779,000
General revenues:
Taxes:
Sales taxes
Property taxes
Other taxes
Payment in lieu of taxes
Grants and entitlements not
restricted to a specific purpose
Investment income
Other
Special item - insurance proceeds
Transfers
Total general revenues, special items and transfers
Changes in net assets
Net assets at beginning of year
Net assets at end of year
406 .x )
3,411,283 3,411,283
802,539
Net (Expense) Revenue and
284,656
Program Revenues
96,614
Changes in Net Assets
96,614
339,074 339,074
218,102 323,821 541,923
Component
3,098 3,098 4,000
Primary Government Unit
1,279,903
6,432,171 593,864 5,838,307 4,000
80,054
Providence
1,907,525 402,000)
Fees, Fines &Operating Capital
976,000
Business-
78,244,285
Seward
574,000
Charges for Grants &Grants &Governmental type Medical
Activities:Expenses Servic Contributions Contributions Activities Activities Total Center
Governmental:
General government $1,770,306 61,798 155,704 409,730 1,143,074)1,143,074)
Public safety 2,383,911 687,763 465,782 1,230,366)1,230,366)
Public works 1,383,178 219,843 1,163,335)1,163,335)
Parks and recreation 1,099,556 565,168 534,388)534,388)
Library 367,077 8,601 2,105 356,371)356,371)
Hospital 468,703 4,860 463,843)463,843)
Sea Life Center 1,028,302 1,028,302)1,028,302)
Unallocated interest 432,438 432,438 432,438
Total governmental activities 8,933,471 1,543,173 157,809 880,372 6,352,117 6,352,117
Business -type:
Electric 6,863,724 7,381,178 237,238 754,692 754,692
Water 760,363 1,019,832 24,000 283,469 283,469
Wastewater 705,508 791,988 19,040 105,520 105,520
Harbor 2,402,810 1,943,424 2,869,057 2,409,671 2,409,671
SMIC 1,521,930 324,828 1,197,102)1,197,102)
Parking 112,013 177,098 65,085 65,085
Total business -type activities 12,366,348 11,638,348 3,149,335 2,421,335 2,421,335
Total primary government $21,299,819 13,181,521 157,809 4,029,707 6,352,117 2,421,335 3,930,782
Component Unit -
Seward General Hospital 11,185,000 10,779,000
General revenues:
Taxes:
Sales taxes
Property taxes
Other taxes
Payment in lieu of taxes
Grants and entitlements not
restricted to a specific purpose
Investment income
Other
Special item - insurance proceeds
Transfers
Total general revenues, special items and transfers
Changes in net assets
Net assets at beginning of year
Net assets at end of year
406 .x )
3,411,283 3,411,283
802,539 802,539
284,656 284,656
96,614 96,614
339,074 339,074
218,102 323,821 541,923
3,098 3,098 4,000
359,120 359,120
1,279,903 1,279,903
6,432,171 593,864 5,838,307 4,000
80,054 1,827,471 1,907,525 402,000)
62,361,595 76,416,814 138,778,409 976,000
62,441,649 78,244,285 140,685,934 574,000
See accompanying notes to basic financial statements.
17
CITY OF SEWARD
Governmental Funds
Balance Sheet
December 31, 2005
Assets
Cash and investments
Receivables, net of allowance for doubtful accounts:
Taxes
Accounts
Assessments
Grants and shared revenues
Accrued interest
Prepaid items
Inventory
Due from other funds
Total assets
Exhibit B -1
6,9 19141 1,263,672 8 182,813
Liabilities and Fund Balances
Liabilities:
Accounts payable
Accrued payroll and related liabilities
Accrued liabilities
Funds held in trust
Deferred revenue
Due to other funds
Total liabilities
Fund balances:
Reserved:
Inventory and prepaids
Debt service
Hospital PERS liability
Unreserved:
Designated:
Working capital
Insurance
Hospital line of credit
Matching grant funds
Capital Project Funds - capital improvements
Undesignated, reported in:
General Fund
Special Revenue Funds
Total fund balances
739,224 226
Total
Major Fund Nonmajor Governmental
General Funds Funds
5,728,324 1,160,594 6,888,918
599,558 599,558
120,911 120,911
1,156 1,156
15,491 103,078 118,569
12,080 12,080
346,165 346,165
11,125 11,125
84,331 84,331
6,9 19141 1,263,672 8 182,813
Liabilities and Fund Balances
Liabilities:
Accounts payable
Accrued payroll and related liabilities
Accrued liabilities
Funds held in trust
Deferred revenue
Due to other funds
Total liabilities
Fund balances:
Reserved:
Inventory and prepaids
Debt service
Hospital PERS liability
Unreserved:
Designated:
Working capital
Insurance
Hospital line of credit
Matching grant funds
Capital Project Funds - capital improvements
Undesignated, reported in:
General Fund
Special Revenue Funds
Total fund balances
739,224 226 739,450
136,225 136,225
117,913 117,913
10,579 10,579
34,467 6,366 40,833
63,099 63,099
1,038,408 69,691 1,108,099
357,290 357,290
134,245 476,878 611,123
211,128 211,128
1,500,000 1,500,000
519,418 519,418
500,000 500,000
50,000 50,000
483,827 483,827
2,819,780 2,819,780
22,148 22,148
5,880,733 1,193,981 7,074,714
Total liabilities and fund balances
See accompanying notes to basic financial statements.
18
6,919,141 1,263,672 8,182,813
CITY OF SEWARD
Reconciliation of Governmental Funds Balance Sheet
to Statement of Net Assets
December 31, 2005
Total fund balances for governmental funds
Total net assets reported for governmental activities in the
Statement of Net Assets is different because:
Capital assets used in governmental activities are not financial
resources and therefore are not reported in the funds. These
assets, net of accumulated depreciation consist of:
Land 4,568,299
Buildings 62, 949,091
Improvements other than buildings 14,838,372
Machinery and equipment 8,584,168
Construction in progress 2,695,857
Accumulated depreciation 30,929,857
Total capital assets
Other long -term assets are not available to pay for current period
expenditures and therefore are deferred in the funds.
An internal service fund is used by the City to charge the cost of vehicles
and heavy equipment to individual funds. The assets and liabilities
of the internal service fund attributable to governmental activities are
included in the governmental column on the Statement of Net Assets.
An internal service fund is used by the City to hold cash for the future
payment of accrued leave.
Long -term liabilities, including bonds payable, the related accrued interest,
and accrued leave are not due and payable in the current period and are
therefore not reported as fund liabilities. These liabilities consist of:
General obligation bonds payable
Accrued interest on bonds
Capital leases payable
Net pension obligation
Accrued leave
PERS liability - Hospital
Unamortized deferred loss on refunding
Total long term Iiabilities
Total net assets of governmental activities
6,348,571)
144,628)
257,533)
341,264)
297,064)
1,715,596)
395,555
Exhibit B -2
7,074,714
62,705,930
17,251
1,055,791
297,064
8,709,101
62,441,649
See accompanying notes to basic financial statements.
19
Exhibit B -3
CITY OF SEWARD
Governmental Funds
Statement of Revenues, Expenditures and Change in Fund Balances
Year Ended December 31, 2005
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
Hospital and long -term care
Debt service:
Principal payments
Retirement benefits
Interest and other costs
Total expenditures
Excess of revenues over (under) expenditures
Other financing sources (uses):
Transfers in
Transfers out
Net other financing sources (uses)
Net change in fund balances
Beginning fund balances
Ending fund balances
Total
Major Fund Nonmajor Governmental
General Funds Funds
4,581,860 4,581,860
164,628 164,628
984,920 906,580 1,891,500
1,883,636 1,883,636
23,206 23,206
194,247 23,855 218,102
143,649 3,936 147,585
7,976,146 934,371 8,910,517
2,511,257 225,178 2,736,435
2,372,994 505,870 2,878,864
1,425,348 1,425,348
1,056,489 12,391 1,068, 880
313,348 313,348
66,058 66,058
236,640 564,288 800,928
164,143 164,143
28,072 369,538 397,610
8,108,291 1,743,323 9,851,614
132,145) (808,952) (941,097)
1,960,739 1,165,934 3,126,673
1,689,057 430,510 2,119,567
271,682 735,424 1,007,106
139,537 (73,528) 66,009
5,741,196 1,267,509 7,008,705
5,880,733 1,193,981 7,074,714
See accompanying notes to basic financial statements.
20
CITY OF SEWARD
Reconciliation of the Changes in Fund Balances of Governmental Funds
to Statement of Activities
Year Ended December 31, 2005
Net change in fund balances - total governmental funds
The change in net assets reported for governmental activities in the
Statement of Activities is different because:
Governmental funds report capital outlays as expenditures. However on
the Statement of Activities, depreciation expense is recognized to allocate
the cost of these items over their estimated useful lives. This is the amount
by which depreciation of $2,817,860 exceeded capital outlays of $1,683,258.
Revenues in the Statement of Activities that do not provide current financial
resources are not reported as revenues in the funds. This is the increase
in other long -term assets.
Issuance of long -term debt provides current financial resources to governmental
funds, while the repayment of the principal of the long -term debt consumes financial
resources in governmental funds. In addition, interest on long -term debt is not
recognized under the modified accrual basis of accounting until due, rather than as it
accrues. This adjustment combines the net change in these balances:
General obligation bonds principal payments $
Deferred loss on refunding
Net pension obligation
Capital lease payments
PERS payment
Accrued interest on bonds
Total long term liabilities
An internal service fund is used by management to charge the cost of vehicles and
heavy equipment to individual funds. A portion of the net revenue of these activities
attributable to governmental activities are included in the governmental column on
the Statement of Activities.
An internal service fund is used by management to track accrued leave for the
governmental funds. The net revenue of these activities is incuuded in the
governmental column on the Statement of Activities.
Change in net assets of governmental activities
721,362
49,445)
153,015)
15,278
64,288
14,617
Exhibit B -4
66,009
1,134,602)
13,011
613,085
270,254
252,297
80,054
See accompanying notes to basic financial statements.
21
CITY OF SEWARD
General Fund
Statement of Revenues, Expenditures
and Change in Fund Balance - Budget and Actual
Year Ended December 31, 2005
Exhibit B -5
Expenditures:
Current:
General government
Public safety
Public works
Parks and recreation
Library
Debt service
Principal payments
Retirement benefits
Interest and other costs
Total expenditures
2,047,302 2,517,498 2,511,257 6,241
Variance
2,642,263
Original Final
1,569,730
Positive
1,425,348
Budget Budge Actual Negative
Revenues:
313,196 312,529 313,348 819)
Taxes 4,071,663 4,071,663 4,581,860 510,197
Licenses and permits 186,800 186,800 164,628 22,172)
Intergovernmental 816,965 955,404 984,920 29,516
Charges for services 1,982,141 1,937,986 1,883,636 54,350)
Fines and bails 20,000 20,000 23,206 3,206
Investment income 103,500 126,705 194,247 67,542
Miscellaneous 80,500 101,450 143,649 42,199
Total revenues 7,261,569 7,400,008 7,976,146 576,138
Expenditures:
Current:
General government
Public safety
Public works
Parks and recreation
Library
Debt service
Principal payments
Retirement benefits
Interest and other costs
Total expenditures
2,047,302 2,517,498 2,511,257 6,241
2,588,422 2,642,263 2,372,994 269,269
1,569,730 1,644,299 1,425,348 218,951
1,027,873 1,032,784 1,056,489 23,705)
313,196 312,529 313,348 819)
300,927 236,639 236,640 1)
172,957 164,143 8,814
174,912 28,072 28,072
8,022,362 8,587,041 8,108,291 478,750
Excess of revenues over (under) expenditures
Other financing sources (uses):
Transfers in
Transfers out
Net other financing sources (uses)
Net change in fund balance
Beginning fund balance
Ending fund balance
760,793) (1,187,033) (132,145) 1,054,888
1,722,902 1,960,739 1,960,739 -
1,018,326 (1,533,065 (1,689,057 (155,992
704,576 427,674 271,682 (155,992
56,217 (759,359) 139,537 8_ 98,896
5,741,196
5,880,733
See accompanying notes to basic financial statements.
22
CITY OF SEWARD
Proprietary Funds
Statement of Net Assets
December 31, 2005
Exhibit C -1
Noncurrent liabilities, net of current portion:
Accrued annual leave 16,964 9,344
Enterprise Funds
15,036 79,551 224,911
Bonds payable 2,080,000 4,010,000 373,854
Total Internal
L.ess unamortized deferred amount on refunding
Major Funds Nonmajor Enterprise Service
Assets Electric Water Harbor SMIC Funds Funds Funds
Current assets:
Notes payable 410,426 410,426
Cash and investments 3,647,838 2,826,951 388,396 310,486 7,173,671 1,961,057
Receivables:
Net pension obligation 3,886 10,526 66,681 13,597 94,690
Accounts 812,614 89,721 112,260 21,866 90,180 1,126,641
Assessments 3,781 7,069 4,286 816 15,952
9,321,045
Grants 24,630 878,164 902,794
Other 27,833 44,877
11,031,566 29,162,843
72,710
65,762,601
Less allowance for doubtful accounts 43,164)4,037)
3,147,270 1,480,856
4,058)51,259)
11,481,056
Inventory 594,033 22,338
5,370,197 12,512,422 29,141,983
616,371
77,243,657
Total current assets 5,042,935 3,011,549 1,383,106 21,866 397,424 9,856,880 1,961,057
Noncurrent assets:
Adjustment to reflect the consolidation of internal
Restricted cash and investments 1,934,476 136,195 1,128,287 238,825 3,437,783
Assessments receivable 15,500 60,087 36,433 3,029 115,049
78,244,285
Deferred charges - unamortized debt issuance costs 49,042 4,820 53,862
Capital assets, net of accumulated depreciation 20,027,954 2,222,927 15,151,566 29,602,602 6,096,079 73,101,128 1,000,046
Total noncurrent assets 22,026,972 2,419,209 16,316,286 29,607,422 6,337,933 76,707,822 1,000,046
Total assets 27,069,907 5,430,758 17,699,392 29,629,288 6,735,357 86,564,702 2,961,103
Liabilities and Net Assets
Current liabilities:
Accounts payable 361,828 28,099 318,818 1,676 4,233 714,654
Accrued payroll and related liabilities 28,139 9,590 22,566 3,021 3,812 67,128
Accrued interest 17,972 39,635 1,057 1,089 59,753 3,086
Current portion:
Accrued annual leave 8,527 3,002 13,608 2,065 27,202 72,153
Bonds payable 210,000 1 10,000 147,575 467,575
Notes payable 55,117 55,117
Capital lease obligations 56,519
Customer deposits 281,251 281,251
Deferred revenue 531,241 15,740 546,981
Other accrued liabilities 36,214 36,214
Due to other funds 21,232 21,232
Total current liabilities 907,717 40,691 1,072,082 190,301 66,316 2,277,107 131,758
Noncurrent liabilities, net of current portion:
Accrued annual leave 16,964 9,344 38,207 15,036 79,551 224,911
Bonds payable 2,080,000 4,010,000 373,854 6,463,854
L.ess unamortized deferred amount on refunding 76,850)76,850)
Unamortized bond premium 72,267 72,267
Notes payable 410,426 410,426
Capital lease obligations 105,754
Net pension obligation 3,886 10,526 66,681 13,597 94,690
Total noncurrent liabilities 2,173,117 19,870 4,114,888 297,004 439,059 7,043,938 330,665
Total liabilities 3,080,834 60,561 5,186,970 487,305 505,375 9,321,045 462,423
Net assets:
Invested in capital assets, net of related debt 17,714,729 2,222,927 11,031,566 29,162,843 5,630,536 65,762,601 837,773
Unrestricted (deficit)6,274,344 3,147,270 1,480,856 20,860 599,446 11,481,056 1,660,907
Total net assets 23,989,073 5,370,197 12,512,422 29,141,983 6,229,982 77,243,657 2,498,680
Total liabilities and net assets $27,069,907 5,430,758 17,699,392 29,629,288 6,735,357 2,961,103
Adjustment to reflect the consolidation of internal
service fund activities related to enterprise funds 1,000,628
Net assets of business -type activities 78,244,285
See accompanying notes to basic financial statements.
23
CITY OF SEWARD
Proprietary Funds
Statement of Revenues, Expenses and Change in Net Assets
Year Ended December 31, 2005
Operating revenues:
Charges for services
Vehicle rental and interfund charges
Total operating revenues
Operating expenses:
Salaries and benefits
Services and supplies
Administration
Depreciation
Total operating expenses
Earnings (loss) from operations
Nonoperating revenues (expenses):
Investment income (loss)
Interest expense
Other revenues
Net nonoperating revenues (expenses)
Earnings (loss) before contributions and transfers
Capital contributions
Transfers in
Transfers out
Change in net assets
Beginning net assets
Adjustment resulting from creating
internal service fund
Ending net assets
Adjustment to reflect the consolidation of internal
service fund activities related to enterprise funds
Change in net assets of business -type activities
See accompanying notes to basic financial statements.
Exhibit C -2
252,297
23,989,073 5,370,197 12,512,422 29,141,983 6,229,982 2,498,680
24
131,030
1,827,471
Enterprise Funds
Total Internal
Major Funds Nonmajor Enterprise Service
Electric Water Harbor SMIC Funds Funds Funds
7,381,178 1,019,832 1,943,424 324,828 969,086 11,638,348
781,323
7,381,178 1,019,832 1,943,424 324,828 969,086 11,638,348 781,323
265,639 193,721 623,985 69,886 245,955 1,399,186 265,275
3,491,776 335,911 526,700 108,513 191,071 4,653,971
1,781,775 156,877 159,526 152,478 105,922 2,356,578
1,257,288 76,308 976,833 1,130,826 284,312 3,725,567 173,690
6,796,478 762,817 2,287,044 1,461,703 827,260 12,135,302 438,965
584,700 257,015 343,620)1,136,875)141,826 496,954)342,358
158,265 73,338 58,805 2,773)36,186 323,821 45,577
138,065)154,329)60,227)9,455)362,076)9,458)
3,098 359,120 362,218 2,307
23,298 432,458 95,524 63,000 26,731 323,963 38,426
607,998 689,473 439,144)1,199,875)168,557 172,991)380,784
237,238 24,000 2,869,057 19,040 3,149,335
65,756 250,326 316,082 272,797
1,103,629 86,587 271,977 52,690 81,102 1,595,985
258,393)692,642 2,157,936 1,002,239)106,495 1,696,441 653,581
24,247,466 4,677,555 10,354,486 30,144,222 6,123,487 2,097,396
252,297
23,989,073 5,370,197 12,512,422 29,141,983 6,229,982 2,498,680
24
131,030
1,827,471
CITY OF SEWARD
Proprietary Funds
Statement of Cash Flows
Year Ended December 31, 2005
Exhibit C -3
Cash flows from capital and related financing activities
Issuance of long term debt 2,313,225
Enterprise Funds
3,813,225
Principal payments on long -tetra debt 2,430,000)105,000)238,639)
Total Internal
53,711)
Interest payments on long -term debt
Major Funds Nonmajor Enterprise Service
317,174)
Electric Water Harbor SMIC Funds Funds Funds
Cash flows from operating activities:
357,127)
Capital contributions received 245,139 48,199 2,183,226 19,776
Receipts from customers and users 7,188,178 944,499 2,030,392 326,383 928,351 11,417,803 2,307
Payments to suppliers 4,210,682)363,779)279,938)92,374)217,030)5,163,803)
Payments toemployees 790,414)184,171)584,489)69,966)240,385)1,869,425)220,508)
Payments for interfund services used 565,589)155,355)126,465)148,072)234,598)1,230,079)
Receipts from interfund charges
58,805 2,773
781,323
Net cash flows from operating activities 1,621,493 241,194 1,039,500 15,971 236,338 3,154,496 563,122
633,280 460,196
Beginning cash and investments 5,392,913 2,795,835
Cash flows from noncapital financing activities:
52,842 445,232 9,978,174 1,500,861
Ending cash and investments 5,582,314 2,963,146
Transfers in 65,756 250,326 316,082 252,297
Transfers out 1,103,629 86,587 271,977 52,690 81,102)1,595,985)
Net cash flows from noncapital financing activities 1,103,629 20,831 271,977 197,636 81,102 1,279,903 252,297
Cash flows from capital and related financing activities
Issuance of long term debt 2,313,225 1,500,000 3,813,225
Principal payments on long -tetra debt 2,430,000)105,000)238,639)53,179)2,826,818)53,711)
Interest payments on long -term debt 131,205)150,542)25,037)10,390)317,174)10,462)
Acquisition of property, plant and equipment 483,887)533,709)4,028,681)43,550)5,089,827)357,127)
Capital contributions received 245,139 48,199 2,183,226 19,776 2,496,340
Insurance proceeds 359,120 359,120
Transfers in 20,500
Net cash flows from capital and related financing activities 486,728 126,390 600,997 263,676 87,343 1,565,134)400,800)
Cash flows from investing activities -
investment income received (loss)158,265 73,338 58,805 2,773 36,186 323,821 45,577
Net increase(decrease)in cash and investments 189,401 167,311 225,331 52,842)104,079 633,280 460,196
Beginning cash and investments 5,392,913 2,795,835 1,291,352 52,842 445,232 9,978,174 1,500,861
Ending cash and investments 5,582,314 2,963,146 1,516,683 549,311 10,611,454 1,961,057
Reconciliation of cash and investments to statement of net assets:
Current assets 3,647,838 2,826,951 388,396 310,486 7,173,671 1,961,057
Restricted assets 1,934,476 136,195 1,128,287 238,825 3,437,783
5,582,314 2,963,146 1,516,683 549 10,611,454 1,961,057
See accompanying notes to basic financial statements.
25
CITY OF SEWARD
Proprietary Funds
Statement of Cash Flows, continued
Exhibit C -3 continued
See accompanying notes to basic financial statements.
26
Enterprise Funds
Total Internal
Major Funds Note ajor Enterprise Service
Electric Water Harbor SMIC Funds Funds Funds
Reconciliation of earnings (loss) from operations to net cash
provided (used) by operating activities:
Earnings (loss) from operations 584,700 257,015 343,620)1,136,875)141,826 496,954)342,358
Adjustments to reconcile earnings (loss) from operations
to net cash flows from operating activities:
Depreciation 1,257,288 76,308 976,833 1,130,826 284,312 3,725,567 173,690
Amortization of debt issuance costs 2,410 2,410
Other nonoperating revenues 3,098 3,098 2,307
Increase (decrease) in allowance for doubtful accounts 14,506 1,522 11,140)1,189 6,077
Increase) decrease in assets:
Receivables 185,181)76,855)10,121 2,683 22,884)272,116)
Prepaid expenses
Inventory 12,559)2,647)15,206)
Increase (decrease) in liabilities:
Accounts payable 9,351 23,699)274,396 3,097)24,770)232,181
Accrued payroll and related liabilities 6,907)3,676 909 80)1,328)3,730)
Accrued annual leave 10,083)1,982 2,635 527 4,939)44,767
Customer deposits 25,423)25,423)
Deferred revenue 87,987 1,128)19,040)67,819
Other accrued liabilities 5,427 129,865)124,438)
Due to other funds 21,232 21,232
Net pension obligation 7,297 3,892 35,952 6,371 38,918
Net cash flows from operating activities 1,621,493 241,194 1,039,500 15,971 236,338 3,154,496 563,122
See accompanying notes to basic financial statements.
26
Exhibit D -1
CITY OF SEWARD
Fiduciary Funds
Statement of Fiduciary Net Assets
December 31, 2005
Assets
Cash and investments
Liabilities
Accounts payable
Due to others
Total liabilities
R?
Teen
Council
Agency
Fund
28,459
1,192
27,267
28,459
See accompanying notes to basic financial statements.
27
CITY OF SEWARD
Notes to Basic Financial Statements
December 31, 2005
1) Summary of Significant Accounting Policies
Reporting Entity
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.
The accompanying financial statements present the City of Seward (the primary government)
and its component unit, Providence Seward Medical Center, an entity for which the City is
considered to be financially accountable. The discretely presented component unit is
presented in a separate column in the government -wide financial statements to emphasize that
it is legally separate from the City.
Providence Seward Medical Center (the Medical Center) is owned by the City of Seward and
is managed by Providence Health System — Washington (a Washington nonprofit corporation)
the Corporation). The Corporation operates a number of healthcare institutions in
Washington and Alaska.
Effective May 1, 2003, the Corporation and the City signed a management and operations
agreement (the Agreement) whereby all financial risks and rewards from the operations of the
Medical Center accrue to the City and the Corporation is the manager of the Medical Center.
Effective with the signing of the Agreement, the City entered into a contract to lease the
Wesley Care Center located adjacent to the Medical Center, which is now operated by the
Medical Center.
The accounting policies of the City conform to accounting principles generally accepted in the
United States of America as applicable to governments. The following is a summary of the
more significant policies:
Government -Wide and Fund Financial Statements
The government -wide financial statements (i.e., the statement of net assets and the statement
of activities) report information on all of the activities of the City. In general, the effect of
interfund activity has been removed from these statements to minimize the double - counting of
internal activities. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are reported separately from business -type activities, which rely
primarily on fees and charges to external parties.
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment are offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. Program revenues include 1) fees, fines and
charges to customers or applicants who purchase, use, or directly benefit from goods, services,
or privileges provided by a given function or segment and 2) grants and contributions that are
restricted to meeting the operational or capital requirements of a particular function or
segment. Taxes, investment income and other items not properly included among program
revenues are reported instead as general revenues.
29
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Summary of Significant Accounting Policies, continued
Government -Wide and Fund Financial Statements, continued
Separate financial statements are provided for governmental funds, proprietary funds, and
fiduciary funds, even though the latter are excluded from the government -wide financial
statements. Major individual governmental funds and major individual enterprise funds are
reported as separate columns in the fund financial statements.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government -wide and proprietary fund financial statements are reported using the
economic resources measurement focus and the accrual basis of accounting. Revenues are
recorded when earned and expenses are recorded when a liability is incurred, regardless of the
timing of the related cash flows. Property taxes are recognized as revenues in the year for
which they are levied. Grants and similar items are recognized as revenue as soon as all
eligibility requirements imposed by the provider have been met. The Agency Fund also uses
the accrual basis of accounting.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as
soon as they are both measurable and available. Revenues are considered to be available
when they are collectible within the current period or soon enough thereafter to pay liabilities
of the current period. For this purpose, the City considers revenues to be available if they are
collected within 60 days after year end. Expenditures generally are recorded when a liability
is incurred, as under accrual accounting. However, debt service expenditures, as well as
expenditures related to compensated absences are recorded only to the extent they have
matured.
Property taxes, sales taxes, licenses, and interest associated with the current fiscal period are
all considered to be susceptible to accrual and so have been recognized as revenues of the
current fiscal period. Only the portion of special assessments receivable due within the
current fiscal period is considered to be susceptible to accrual as revenue in the current period.
Most other revenue items are considered to be measurable and available only when cash is
received by the government.
The City reports the following major funds —
Major Governmental Fund:
The General Fund is the government's primary operating fund. It accounts for all
financial resources of the general government, except those required to be reported in
another fund.
30
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Summary of Significant Accounting Policies, continued
Measurement Focus, Basis of Accounting, and Financial Statement Presentation, continued
Major Proprietary Funds:
The Electric Enterprise Fund accounts for all activities related to the operation of the
City's electric utility.
The Water Enterprise Fund accounts for all activities related to the City's water system.
The Harbor Enterprise Fund accounts for the marine- related activities of the City's
harbor.
The Seward Marine Industrial Center (SMIC) Enterprise Fund accounts for marine-
related services on the east side of Resurrection Bay.
The City also reports two Internal Service Funds which account for the activities relating to
the City's motor pool activities and accrued leave of the governmental funds. The Motor Pool
Internal Service Fund reports revenues charged to the other funds based on rental fees and
capital lease payments designed to cover the cost of the lease payments and to fund
depreciation. The Compensated Annual Leave Internal Service Fund accounts for the accrual
and payment of compensated absences of the governmental activities.
In addition, the City maintains and reports on a single fiduciary fund. This fund records cash
held in a fiduciary capacity on behalf of the local teen council.
Private - sector standards of accounting and financial reporting issued prior to December 1,
1989, generally are followed in both the government -wide and proprietary fund financial
statements to the extent that those standards do not conflict with or contradict guidance of the
Governmental Accounting Standards Board. Governments also have the option of following
subsequent private- sector guidance for their business -type activities and enterprise funds,
subject to the same limitation. The City has elected not to follow subsequent private- sector
guidance.
As a general rule the effect of interfund activity has been eliminated from the government -
wide financial statements. Exceptions to this general rule are allocated administration fees
and charges between the enterprise funds and the various other funds and departments.
Elimination of these charges would distort the direct costs and program revenues reported for
the various functions concerned.
Amounts reported as program revenues include 1) charges to customers or applicants for
goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital
grants and contributions, including special assessments. Internally dedicated resources are
reported as general revenues rather than as program revenues. In addition, general revenues
include all taxes (including the City's dedicated sales taxes), investment income, and State of
Alaska entitlement revenues.
31
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Summary of Significant Accounting Policies, continued
Measurement Focus, Basis of Accounting, and Financial Statement Presentation, continued
Proprietary funds distinguish operating revenues and expenses from nonoperating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with a proprietary fund's principal ongoing operations.
Operating expenses for the proprietary funds include the costs of sales and services,
administrative expenses and depreciation on capital assets. All revenues and expenses not
meeting this definition are reported as nonoperating revenues and expenses.
Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets (e.g. roads
and similar items), are reported in the applicable governmental or business -type activities
columns in the government -wide financial statements. Capital assets are defined by the City
as assets with an initial, individual cost of more than $2,500 and an estimated useful life in
excess of one year. Such assets are recorded at historical cost or estimated historical cost if
purchased or constructed. Donated capital assets are recorded at estimated fair market value
at the date of donation. In the case of the initial capitalization of infrastructure assets, the City
chose to include all such items, regardless of their acquisition date.
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend the useful life of the asset are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed.
Interest incurred during the construction phase of capital assets of business -type activities is
included as part of the capitalized value of the assets constructed.
Property, plant, and equipment of the City is depreciated using the straight -line method over
the following estimated useful lives:
Buildings and improvements 20 -40 years
Infrastructure 50 years
System infrastructure 20 -50 years
Machinery and equipment 3 -8 years
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.
32
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Summary of Significant Accounting Policies, continued
Central Treasury
A central treasury is used to account for the City's cash and investments to maximize
investment income. Investments are stated at fair value. Investment income is allocated
among the funds based on their respective cash balances.
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.
Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are
recorded as prepaid items in both government -wide and fund financial statements.
Inventory
Inventories are valued at cost in governmental funds and at the lower of cost or market in the
proprietary funds._ Cost is determined by the first -in, first -out method. The cost is recorded as
an expenditure or expense at the time individual inventory items are consumed.
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.
33
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Summary of Significant Accounting Policies, continued
Receivables and Payables
Activity between funds that are representative of lending1borrowing arrangements outstanding
at the end of the year are referred to as either "due to / from other funds" (i.e., the current
portion of interfund loans) or "advances to / from other funds" (i.e., the noncurrent portion of
interfund loans). All other outstanding balances between funds are reported as "due to / from
other funds." Any residual balances outstanding between the governmental activities and
business -type activities are reported in the government -wide financial statements as "internal
balances."
Accrued Annual Leave
The City allows employees to accumulate earned but unused vacation and sick leave benefits.
There is no liability for unpaid accumulated sick leave since the City does not have a policy to
pay any amounts when employees terminate employment. All vacation pay is accrued when
incurred in the government -wide and proprietary fund financial statements. Accrued leave
that is earned in the governmental funds is accounted for in the Compensated Annual Leave
Internal Service Fund.
Long -Term Debt
In the government -wide and the proprietary fund financial statements, long -term debt and
other long -term obligations are reported as liabilities in the applicable governmental activities,
business -type activities, or proprietary fund type statement of net assets. Bond premiums and
discounts, as well as issuance costs, are deferred and amortized over the life of the bonds
using the straight -line method. Bonds payable are reported net of the applicable bond
premium or discount. Bond issuance costs are reported as deferred charges and amortized
over the term of the related debt.
Encumbrances
Encumbrance accounting, under which purchase orders, contracts and other commitments for
expenditures are recorded in order to reserve that portion of the applicable appropriation, 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,
2005.
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
With the exception of certain Electric Fund employees, substantially all other employees of
the City participate in the Public Employees' Retirement System (PERS) administered by the
State of Alaska.
34
CITY OF SEWARD
Notes to Basic Financial Statements, continued
2) Stewardship, Compliance and Accountability
Budgetaa 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.
Restrictions of Sales Tax Revenues
When the City transferred the operations of the Hospital to Providence Alaska Medical Center
on July 1, 1996, the City agreed to restrict 1% of the sales tax for the benefit of the Hospital.
During construction, the restricted sales tax was used to offset losses and transition costs.
Subsequent to completion of the construction, the restricted sales tax has been used to fund the
debt service on the Hospital general obligation bonds. All sales tax revenue is recorded in the
General Fund. The restricted portion is then transferred to the Debt Service Fund.
3) Cash and Investments
The City of Seward utilizes a central treasury that is available for use by all funds. Each
fund's portion of the central treasury is displayed on the balance sheet as "cash and
investments" or included in "due to other funds."
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.
Reconciliation of Deposit and Investment Balances
The following is a reconciliation of the City's deposit and investment balances to the financial
statements as of December 31, 2005.
Pooled Cash
35
and Investments Other Totals
Bank deposits 262,404)114,860 147,544)
Investments 19,388,914 248,518 19,637,432
19.126.510 36 1 489 8 8
Government -wide Fiduciary Fund
Statement Statement of
of Net Assets Assets and Liabilities Totals
Cash and investments 16,023,646 28,459 16,052,105
Restricted cash and investments 3,437,783 3,437,783
19 4 429 28.459 19,489,888
35
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Cash and Investments, continued
Restricted Cash and Investments
The City maintains harbor bond redemption and reserve accounts as required by bond
covenants. The balance in these accounts at December 31, 2005, which totaled $363,378, is
included in deposits and investments.
The City also includes in Enterprise Fund restricted cash and investments amounts that have
been designated for capital projects. The total amount of restricted cash and investments that
has been designated for capital projects was $3,074,405 at December 31, 2005.
Interest Rate Risk
Investment maturities in general investments at December 31, 2005 are as follows:
Investment Maturities
in Years)
Fair Less More
Investment Type Value Than 1 1 -5 Than 5
U.S. government agencies $ 11,589,071 8,289,049 3,051,504 248,518
Repurchase agreement 1,773,296 1,773,296 - -
Total subject to
interest rate risk 13,362,367 10 062.345 3 051.504 248,518
Certificates of deposit 110,800
Pooled investments 6,164,265
Total investments $ 19.637,432
Credit Risk
Pooled investments are invested with the Alaska Municipal League Investment Pool, Inc.
AMLIP). The AMLIP is an external investment pool which is not SEC registered and is not
rated for credit risk purposes. Alaska Statute 37.23 establishes regulatory oversight of the
pool. The law sets forth numerous requirements regarding authorized investments and
reporting. The share value of investments in the AMLIP is approximately equal to fair value.
36
CITY OF SEWARD
Notes to Basic Financial Statements, continued
4) Capital Assets
Capital asset activity for the year ended December 31, 2005 was as follows:
Business -type activities
Capital assets not being depreciated:
Land and land improvements
Balance
15,744,269
Balance
4,209,284
January 1,
2,515,611 6,308,918
Total assets not being depreciated
December 31,
4,615,245
2005 Additions Deletions 2005
Governmental activities
Buildings 4,655,795 4,655,795
Capital assets not being depreciated:
97,443,618 353,091 97,796,709
Machinery and equipment
Land and land improvements 4,278,299 290,000 4,568,299 '
Construction in progress 2,433,931 5683 04 306,378 2,695,857 v
Total assets not being depreciated 6,712,230 8583 04 306,378 7,264,156
Capital assets being depreciated:
49,398,068 3,390,821 52,788,889
Machinery and equipment
Buildings 62,368,433 580,658 62,949,091
Improvements other than buildings 14,827,055 15,496 4,179 14,838,372
Machinery and equipment 7,944,383 639,785
15 73.493.554
8,584,168
Total assets being depreciated 85,139,871 1,235,939 4,179 86,371,631
Less accumulated depreciation for:
Buildings 11,471,951 1,534,272 13,006,223
Improvements other than buildings 11,683,044 583,056 4,179 12,261,921
Machinery and equipment 4,820,166 841,547 5,661,713
Total accumulated depreciation 27,975,161 2,958,875 4,179 30,929,857
Total capital assets being depreciated, net 57,164,710 1,722,936)55,441,774
Governmental activity capital assets, net 63,876,940 306.378 62,705,930
The ending balances include $1,823,942 and 1,216,323 of equipment cost and accumulated depreciation,
respectively, related to the Motor Pool Internal Service Fund.
Business -type activities
Capital assets not being depreciated:
Land and land improvements 15,744,269 15,744,269
Construction in progress 4,209,284 4,615245 2,515,611 6,308,918
Total assets not being depreciated 19,953,553 4,615,245 2,515,611 22,053,187
Capital assets being depreciated:
Buildings 4,655,795 4,655,795
Improvements other than buildings 97,443,618 353,091 97,796,709
Machinery and equipment 9.450,233 2.890,121 12,340,354
Total assets being depreciated 111,549,646 3,243,212 114,792,858
Less accumulated depreciation for:
Buildings 3,737,001 84,047 3,821,048
Improvements other than buildings 49,398,068 3,390,821 52,788,889
Machinery and equipment 6,459,181 283,373 6,742,554
Total accumulated depreciation 59,594,250 3,758,241 63,352,491
Total capital assets being depreciated, net 51,955,396 51f 5,0291 51.440,367
Business -type capital assets, net 71.908.949 4AIQZ6 15 73.493.554
The ending balances include $602,072 and $255,198 of equipment cost and accumulated depreciation,
respectively and $45,552 of construction in progress related to the Motor Pool Internal Service Fund.
37
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Capital Assets, continued
Depreciation expense was charged to the functions as follows:
Business -type activities
Electric
Depreciation
10,681 1,267,969
Water
Excluding Internal
78,883
Wastewater
Internal Service
281,926
Harbor
Service Fund Total
SMIC
Fund Allocation Depreciation
Governmental activities
6,025 6,025
General government 448,054 2,520 450,574
Public safety 39,466 64,372 103,838
Public works 98,356 62,186 160,542
Parks and recreation 64,605 11,937 76,542
Library 42,792 42,792
Hospital and long -term care 427,703 427,703
Sea Life Center 1,696,884 1,696,884
Total governmental activities 2,817,860 141,015 2,958,875
Business -type activities
Electric 1,257,288 10,681 1,267,969
Water 76,308 2,575 78,883
Wastewater 278,287 3,639 281,926
Harbor 976,833 15,779 992,612
SMIC 1,130,826 1,130,826
Parking 6,025 6,025
Total business -type activities 3,725,567 32,674 3,758,241
Total depreciation expense 6.543.427 173.689 6.717,116
5) Interfund Receivables, Payables, and Transfers
A schedule of interfund balances and transfers for the year ended December 31, 2005, follows:
Due from other funds:
Due to the General Fund from nonmajor
governmental funds to cover capital costs
Due to the General Fund from SMIC
Enterprise Fund for short-term operating subsidy
Total due to the General Fund
Transfers:
From General Fund to:
SMIC Enterprise Fund for operating costs D
tip
Debt Service Fund for debt service costs Pis ?;2.,'
Internal Service Funds for annual leave and capital costs .0
Nonmajor governmental funds for operating costs
Total transfers from General Fund
38
63,099
21,232
84,331
250,326
l,054,934'*'* (V-" x"
272,797
111,000
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Interfund Transfers, continued
From Electric Enterprise Fund to
General Fund for payment in lieu of taxes $ 1,103,629
From Water Enterprise Fund to
General Fund for payment in lieu of taxes 86,587
From Wastewater Enterprise Fund to
General Fund for payment in lieu of taxes 66,934
From Harbor Enterprise Fund to General
Fund for payment in lieu of taxes 271,977
From SMIC Enterprise Fund to
General Fund for payment in lieu of taxes 52,690
From Parking Revenue Enterprise Fund to
General Fund for payment in lieu of taxes 14,168
From Capital Acquisition Capital Project Fund to:
General Fund to cover capital costs 290,000
Water Enterprise Fund to cover capital costs 65,756
355,756
From nonmajor governmental fund to
General Fund to close out grant 74,754
Total transfers to other funds $ 3 71 552
6) Long -Term Debt
Current Refunding
In October 2005, the City issued electric revenue refunding bonds of $2,290,000 with an
interest rate of 3% to 5% to refund $2,265,000 of electric revenue bonds with an interest
rate of 4.95% to 5.7 %. The new bonds were issued at a premium of $72,267 and, after
paying issuance costs of $43,059, the net proceeds were $2,319,208.
As a result of the refunding, the City reduced its total debt service requirements by
206,018, which resulted in an economic gain (difference between the present value of the
debt service payments on the old and new debt) of $172,251.
New Bond Issuance
Also in October 2005, the City issued $1,500,000 of harbor revenue bonds to assist with
the cost of the harbor improvements. The bonds bear interest at 3.0% to 5.0 %.
39
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Long -Term Debt, continued
New Bond Issuance, continued
The following is a summary of long -term debt transactions of the City for the year ended December 31,
2005:
Balance Balance Due
January 1, December 31, Within
2005 Additions Retired 2005 One Year
Governmental activities
General obligation bonds:
5,150,000 refunding hospital bonds,
due in annual installments of $75,000
to $840,000 plus interest at 2.0% to
3.5% through April 1, 2013 5,150,000 - 75,000 5,075,000 75,000
7,500,000 1996 hospital bonds,
due in final installment of $470,000,
plus interest at 6.75% on
October 1, 2006 (advance refunded
in 2004)895,000 - 425,000 470,000 470,000
1,086,018 2003 refunding streets and
sidewalks bonds, due in semiannual
installments of $70,487 to $201,018
plus interest at 2.0% to 3.5% through
December 1, 2011 '882,390 - 190,576 691,814 195,796
175,438 2003 refunding senior center
bonds, due in semiannual installments of
11,387 to $32,473 plus interest at 2.0%
to 3.5% through December 1, 2011 142,543 - 30,786 111,757 31,629
Fire equipment capital lease obligation
due in semiannual installments
of $9,690, including interest at
3.81% through May 1, 2011 110,538 - 15,278 95,260 15,871
Loader /grader capital lease obligation
due in semi- annual installments
of $32,086 including interest at
5.16% through July 25, 2008 215,984 - 53,711 162,273 56,519
Hospital PERS liability due in annual
installments of $211,128, including
interest at 8.25% through May 1, 2019 1,779,884 - 64,288 1,715,596 69,591
O
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Long -Term Debt, continued
Governmental activities, continued
BalanceBalance
December 31,January 1,
Retired 20052005Additions
Accrued annual leave 252,297 265,275
Net pension obligation 188,249 635,146
Total governmental activities
Balance Due
December 31,Within
Retired 2005 One Year
220,508 297,064 72,153
482,131 341,264
long -term liabilities $ 9.616,885 4 1 8,960,028
Less unamortized deferred amount on refunding 39( 5,555
44
The debt service payments for the loader /grader capital lease are made by the Motor Pool Internal
Service Fund. Liquidation of the accrued annual leave is made by the Compensated Annual Leave
Internal Service Fund. All other debt service payments above are made by the General Fund directly or
by transfers from the General Fund to the Debt Service Fund.
Balance Balance Due
January 1, December 31, Within
Business -type activities 2005 Additions Retired 2005 One Year
General obligation bonds:
818,544 2003 refunding SMIC bonds,
due in semiannual installments
of $53,126 to $151,509, plus
interest at 2.0% to 3.5%
through December 1, 2011
Revenue bonds:
3,225,000 1995 electric revenue
bonds, due in annual installments of
165,000 to $290,000, plus interest at
4.95% to 5.7% through June 1, 2015
advance refunded in 2005)
3,000,000 2000 harbor revenue bonds,
due in annual installments of $110,000
to $235,000 plus interest at 4.85% to
5.5% through October 1, 2021
2,290,000 2005 refunding electric
revenue bonds, due in annual installments
of $195,000 to $275,000, plus interest
at 3.0% to 5.0% through June 1, 2015
665,068 -
2,430,000 -
2,725,000 -
2,290,000
41
143,639 521,429 147,575
2,430,000 -
105,000 2,620,000 110,000
2000 111 1 11'1
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Lone -Term Debt, continued
Business -type activities, continued
Balance Balance Due
January 1, December 31, Within
2005 Additions Retired 2005 One Year
Revenue bonds, continued:
1,500,000 2005 harbor revenue bonds,
due in annual installments of $55,000 to
110,000 plus interest at 3.0% to 5.0 %
through June 1, 2025 $ -
Notes payable:
26,231 sewer note payable to State of
Alaska Department of Environmental
Conservation, due in annual installments
of $1,333, plus interest at 1.5%
through July 15, 2014 13,330
901,851 sewer note payable to State of
Alaska Department of Environmental
Conservation, due in annual installments
of $63,406, including interest at 1.5%
through November 5, 2013 505,392
Capital lease obligation due in
final installment of $95,000,
including interest at 7.35%
on October 1, 2005. 95,000
Accrued annual leave 111,692
Net pension obligation 55.772
Total business -type activities
1,500,000 - 1,500,000 -
1,339 11,991 1,333
51,840 453,552 53,784
95,000 - -
99,653 104,592 106,753 27,202
166,240 127,322 94,690
long -term liabilities 44 05 3.058.732 7,598,415
Less unamortized deferred amount on refunding 76,850)
Plus unamortized bond premium 72,267
Annual debt service requirements to maturity on the bonds, notes and capital leases follow:
General Obligation Bonds
Year Ending Governmental Activities Business -type Activities
December 31, Principal Interest Total Principal Interest Total
2006 $ 772,425 195,105 967,530 147,575 12,682 160,257
2007 838,491 152,033 990,524 151,509 9,730 161,239
2008 721,874 134,112 855,986 53,126 6,700 59,826
2009 769,906 115,447 885,353 55,094 5,372 60,466
2010 819,906 92,456 912,362 55,094 3,719 58,813
2011 -2013 2,425,969 118,034 2,544,003 59,031 2,066 61,097
7 187 40-20 561 698
42
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Long -Term Debt, continued
Revenue Bonds and Notes
Business -type Activities
Year Ending Revenue Bonds Notes Payable
December 31, Principal Interest Total Principal Interest Total
2006 320,000 287,891 607,891 55,117 6,983 62,100
2007 365,000 274,316 639,316 55,924 6,157 62,081
2008 380,000 259,065 639,065 56,743 5,318 62,061
2009 400,000 243,104 643,104 57,574 4,467 62,041
2010 415,000 226,166 641,166 58,417 3,603 62,020
2011 -2015 2,365,000 838,191 3,203,191 181,768 5,520 187,288
2016 -2020 1,415,000 385,725 1,800,725
2021 -2025 750,000 71,110 821,110
6410 0 2535M 22156-8 4 959
Capital Leases
Year Ending Governmental Activities
December 31,Principal Interest Total
2006 72,390 11,161 83,551
2007 75,959 7,592 83,551.
2008 63,407 3,844 67,251
2009 17,790 1,589 19,379
2010 18,480 899 19,379
2011 9,507 183 9,690
2016 -2019
X26 2
Obligation Pavable to the State of Alaska Public Emplovees Retirement Svstem
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
of $2,129,884. Interest accrues at 8.25% annually. The balance at December 31, 2005 was
1,715,596.
Year Ending Governmental Activities
December 31,Principal Interest Total
2006 69,591 141,537 211,128
2007 75,333 135,795 211,128
2008 81,548 129,580 211,128
2009 88,275 122,853 211,128
2010 95,558 115,570 211,128
2011 -2015 609,882 445,758 1,055,640
2016 -2019 695,409 149,103 844,512
43
CITY OF SEWARD
Notes to Basic 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, 2005 as follows:
Harbor Enterprise Fund $ 363.378
The Harbor revenue bonds also require that rates be maintained at a level that will produce
net revenues after certain adjustments, equal to 1.2 times the amount required each year to
pay the principal and interest.
Operating income (loss) $ (343,620)
Add:
Depreciation 976,833
Investment income 58,805
Available for debt service 692,018
Requirement 306,650
Excess of revenue over requirement $ 385,368
7) Capitalized Leases
The City has entered into lease agreements as lessee for financing the acquisition of a motor
grader, loader and trailer, and fire equipment. 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 that have an outstanding balance as of
December 31, 2005:
Internal
General Service
Fund Fund
Machinery and equipment $ 117,800 373,044
Less accumulated depreciation 1( 6,829 151 789
Carrying value $ 100 7 221.255
CITY OF SEWARD
Notes to Basic 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, 2005:
8) Defined Benefit Pension Plan
The following information conforms to the requirements of Governmental Accounting
Standards Board (GASB) Statement 27, Accounting for Pensions by State and Local
Governmental Employers. In addition, this note includes the information required by GASB
Statement 45, Accounting and Financial Reporting by Employers for Postemployment
Benefits Other Than Pensions. The City has elected to implement GASB Statement 45
effective with this financial statement.
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, post employment
healthcare, death, and disability benefits. Benefit and contribution provisions are established
by State law and may be amended only by the State Legislature.
45
Internal
Year Ending General Service
December 31,Fund Fund
2006 19,379 64,172
2007 19,379 64,172
2008 19,379 47,872
2009 19,379
2010 19,379
2011 9,690
Total minimum lease payments 106,585 176,216
Less interest portion 11,325 13,943)
Present value of future minimum
lease payments 95,260 162,273
Less current portion 15 871 56,519)
Long -term portion 79.389 105.754
8) Defined Benefit Pension Plan
The following information conforms to the requirements of Governmental Accounting
Standards Board (GASB) Statement 27, Accounting for Pensions by State and Local
Governmental Employers. In addition, this note includes the information required by GASB
Statement 45, Accounting and Financial Reporting by Employers for Postemployment
Benefits Other Than Pensions. The City has elected to implement GASB Statement 45
effective with this financial statement.
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, post employment
healthcare, death, and disability benefits. Benefit and contribution provisions are established
by State law and may be amended only by the State Legislature.
45
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Defined Benefit Pension Plan, continued
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 and Contribution Rates
Employees are required to contribute 6.75% of their annual covered salary of which 4.2% is
for pension and 2.55% is for healthcare. Police officers and firemen must contribute 7.5 %.
The funding policy provides for periodic employer contributions, based on actuarially
determined rates that, expressed as a percentage of annual covered payroll, are sufficient to
accumulate sufficient assets to pay both pension and postemployement healthcare benefits
when due, subject to an increase limitation. Employer rates cannot be increased by more than
five percentage points annually. During 2005, a significant difference exists between the
actuarial rate and the actual rate due to the five point increase limit.
The City's contribution rates for PERS for 2005 follow:
January 1 - June 30
Adjusted Actuarially
Actual Required
Rate Rate
Pension 5.44% 15.96%
Postemployment
healthcare 3.30 6.51
Total contribution rate 8.74 22.47
Julv 1— December 31
Adjusted Actuarially
Actual Required
Rate Rate
8.24%12.64%
5.50 8.44
13.74 21.08
The 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 also amortized over twenty -five years.
During 2005, the State of Alaska Legislature approved Senate Bill 46 which granted fiscal
relief related to increased costs of the FY06 employer contribution rates. This relief was in
the form of a cash payment made directly to the PERS on behalf of the participating
employers and allowed the employers to pay the prior year rate. The amount of the fiscal
relief payment for the City was $192,943. For financial statement purposes, this amount
has been reported as grant revenue and PERS expense and is effectively included in the
Adjusted Actual Rates shown above.
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Defined Benefit Pension Plan, continued
Funding Policy and Contribution Rates, continued
The actuarially required contribution rates were determined as part of the June 30, 2002
January to June) and the June 30, 2003 (July to December) actuarial valuations. The
significant actuarial assumptions used in the June 30, 2003 valuation report follow:
1. Investment return of 8.25% per annum, compounded annually, net of expenses;
2. Projected salary increases of 5.5% for the first ten years of employment (6.0%
for the first five years for peace officers and fire fighters) and 4.0% per year
thereafter (4.5% per year for peace officers and fire fighters);
3. Health cost inflation of 12.0% for 2004 and 2005; trending downward 0.5% per
year to 7% in FY15, 6.0% in FY16, and 5.0% thereafter;
4. Total inflation, as measured by the Consumer Price Index for urban and clerical
workers for Anchorage, is assumed to increase 3.5% annually; and
5. Asset valuation — recognizes 20% of the investment gain or loss in each of the
current and preceding four years. Assets are valued at market value. Valuation
assets cannot be outside the range of 80% to 120% of market value of assets.
Annual Pension and Postemployment Healthcare Cost
For the year ended December 31, 2005, the City's annual pension and other post -
employment benefit (OPEB) costs were as follows:
Three -year trend information for PERS follows:
Year
Pension OPEB Total
Annual required contribution 477,773 303,480 781,253
Interest on net pension obligation 12,524 7,608 20,132
Adjustment to annual required contribution k!2 8,151)21,570)
Annual pension cost 476,878 302,937 779,815
Contributions made 356,068)231 814)587 882)
Increase in net pension obligation 120,810 71,123 191,933
Net pension obligation, beginning of year 151,805 92,216 244,021
Net pension obligation, end of year 27 618 163.339 435 954
Three -year trend information for PERS follows:
Year Annual Percentage
Ending Pension Actual of APC
June 30,Cost (APQ Contributions Contributed
Pension 2003 116,541 116,541 100%
2004 293,183 141,377 48%
2005 476,878 356,068 75%
47
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Defined Benefit Pension Plan, continued
Annual Pension and Postemnlovment Healthcare Cost. continued
June 30, 2002:
Pension $ 10,669,000 $ 13,828,000 $ 3,159,000
Postemployment
healthcare 6,483,000 8,402,000 .1,919,000
June 30, 2003:
Pension
Postemployment
healthcare
11,771,000 14,407,000 2,636,000
7,868,000 9,629,000 1,761,000
June 30, 2004:
Pension
Postemployment
healthcare
77% $ 3,413,000 93%
77% 3,413,000 56%
82% 3,551,000 74%
82% 3,551,000 50%
12,081,000 15,769,000 3,688,000 77% 3,678,000 100%
8,519,000 11,119,000 2,600,000 77% 3,678,000 71%
9) 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 is $4 per compensable hour per the terms of a negotiated agreement
expiring June 30, 2007. The total City contribution for the year ended December 31, 2005
was $70,704. Employees are not required to contribute.
Year Annual Percentage
Ending OPEB Actual of OPEB
June 30,Cost Contributions Contributed
Postemployment
healthcare 2003 49,330 49,330 100%
2004 178,096 85,881 48%
2005 302,937 231,814 77%
A schedule of funding progress for PERS for the three most recently published actuarial
valuations follows:
Unfunded
Liability as
Actuarial Actuarial Actuarial Percentage
Valuation Value of Accrued Unfunded Funded Covered of Covered
Date Assets Liability Liabilit Ratio Payroll Payroll
June 30, 2002:
Pension $ 10,669,000 $ 13,828,000 $ 3,159,000
Postemployment
healthcare 6,483,000 8,402,000 .1,919,000
June 30, 2003:
Pension
Postemployment
healthcare
11,771,000 14,407,000 2,636,000
7,868,000 9,629,000 1,761,000
June 30, 2004:
Pension
Postemployment
healthcare
77% $ 3,413,000 93%
77% 3,413,000 56%
82% 3,551,000 74%
82% 3,551,000 50%
12,081,000 15,769,000 3,688,000 77% 3,678,000 100%
8,519,000 11,119,000 2,600,000 77% 3,678,000 71%
9) 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 is $4 per compensable hour per the terms of a negotiated agreement
expiring June 30, 2007. The total City contribution for the year ended December 31, 2005
was $70,704. Employees are not required to contribute.
CITY OF SEW ARD
Notes to Basic Financial Statements, continued
p created in accordance withensationPlanoees, pensationptets them to
10) Deferred Com to ees a deferred comp
The City offers its emp y The plan, available to aii e ensation is not available toBass. The deferred comp The pInternalRevenueCodeSection4, future y
o r unforeseeable emergency. provisions
ry
and income of the plan be held in trust for the exdeferaportionoftheirsala
employees until ,
retirement, death,
clusive
of the plan require
termination'
that all assets eneficiaries•
benefit of participants and their b
a damage to and loss of
1 Risk n ent errors and omissions,
1)s a c onsiderable number of ( pr
of loss' sional "ability(i•e .es and (flmedical
The City faces torts, P em ployee inluric
property and contents (b) workers' compensation; i.e.,
d) environmental damage (e)
insurance costs of employees
a
ue insurancensurance Association (1 1A),
OVidesunicialLeagLTheJIAp
the a Municipal Tats automobiles, mobile
The City is a member of AloolAlask
it sh by building and contents, g eneralgovernmentalinsurancePincludingcasu
the equipment and boiler
including
coverage for prop auto
City rocessing eq iler and machinery; Professional liability,
equipment, data p liability, law enforcement p em ployers liability;
ublic officials and employees workers' compensation, includingmarine insurance andliability, p supplemental marl The Cityliabilityandemployeebenefitliability, maintains supP laced through '•
ercial blanket bond. The Cit anies p
and comet
compcidentcoveragewithinsurance
has no coverage for potential losses from environment
ers. The
al damages'
firefighters group ac
its memb
Pool organized to share risks amon
ublic entity risk p supplemental contributions from
The JIA is a p
laws p coverage year exceed the annual
provide for the assessment of supp
Such supplemenAssociationsbyex .for any
ear.
errs deposit contribution . comparison to the
earned on such contributions for they
supmembersintheeventthatlossesand
contributions and income e on each member,
contributions shall be based up
5aggregatedepositcont
of all members. The Association made no sup
a
year ended December 31,assessments during the
2
and conducts periodic inspections to ensure safe
provides loss control services comm ittee to review and
The JIA P City Councilestablishedsafetycom
artments. The
City has utilized for all dep
recommend safety p and p otential losses not covered byOperations. The
designates a portion of the General Fund balance to meet p
g providesededuct' which p
es•
insurance and a Public Utilities Insurancepublic entity risk pool in
The City also participates in the Alask participants'
coverage for employee healthben
Stop i limits
insurance the me
which risks are shared among ate claims.
liability for individual and agg g
CITY OF SEWARD
Notes to Basic 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.
12) 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 capital assets.
13) Health Care Operating Agreements
The City has entered into an operating agreement with Providence Health System. Under
the terms of the agreement the City will pay Providence Health System an annual
management fee and annual incentive fee in exchange for Providence's overall
management of the Providence Seward Medical Center and the Wesley Rehabilitation and
Care Center.
14) 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.
15) Compensated Annual Leave Internal Service Fund
Effective January 1, 2005, the City created the Compensated Annual Leave Internal Service
Fund to account for the governmental fund employees' accrued annual leave. When the fund
was created, it resulted in an adjustment to beginning net assets of a negative $252,297.
50
CITY OF SEWARD
Notes to Basic Financial Statements, continued
16) Subsequent Events
On January 9, 2006, the Seward City Council approved Resolution 2006 -05 authorizing the
City to pursue revenue bond funding in the amount of $4.5 million to pursue construction
of floats in the new South Harbor. This project will add approximately 106 new slips, 377
linear feet of moorage, and 1024 feet of skiff space. The bonds will be issued through the
Alaska Municipal Bond Bank. Funding for this project comes from a 10% increase in
moorage rates, and in increase in passenger fees from $1.50 to $3.50 per passenger,
effective January 1, 2006.
On March 13, 2006, the Seward City Council approved Resolution 2006 -28 authorizing the
issuance of $27 million in revenue bonds for the purpose of financing, designing,
acquiring, constructing, and equipping a long -term care facility in Seward. This facility
will replace the existing privately -owned Wesley facility which is currently leased by the
City for the purposes of providing co- located hospital and long -term care services. The
bonds will be issued through the Alaska Municipal Bond Bank. The revenues from the co-
located hospital and long -term care facility will be pledged to repay the revenue bonds.
51
Exhibit E -1
CITY OF SEWARD
Nonmajor Governmental Funds
Combining Balance Sheet
December 31, 2005
Assets
Cash and investments
Receivables - grants and shared revenues
Total assets
Special Debt Capital
Revenue Service Projects Total
28,514 688,006 444,074 1,160,594
103,078 103,078
28,514 688,006 547,152 1,263,672
Liabilities and Fund Balances
Liabilities:
Accounts payable
Deferred revenue
Due to other funds
Total liabilities
Fund balances:
Reserved:
Debt service
Hospital PERS liability
Unreserved:
Designated for capital improvements
Undesignated
Total fund balances
Total liabilities and fund balances
226 226
6,366 - - 6,366
63,099 63,099
6,366 - 63,325 69,691
476,878 - 476,878
211,128 - 211,128
483,827 483,827
22,148 - - 22,148
22,148 688,006 483,827 1,193,981
28,514 688,006 547,152 1,263,672
53
Exhibit E -2
CITY OF SEWARD
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances
Year Ended December 31, 2005
Expenditures:
General government
Special Debt Capital
225,178
Public safety
Revenue Service Protects Total
Revenues:
2,639 9,752 12,391
Intergovernmental 25,987 880,593 906,580
Investment income 12,708 11,147 23,855
Miscellaneous 3,936 3,936
Total revenues 29,923 12,708 891,740 934,371
Expenditures:
General government 7,026 218,152 225,178
Public safety 40,088 465,782 505,870
Parks and recreation 2,639 9,752 12,391
Hospital and long -term care 61,000 5,058 66,058
Principal payments 564,288 564,288
Interest and other costs 369,538 369,538
Total expenditures 110,753 933,826 698,744 1,743,323
Excess of revenues over (under)
expenditures 80,830)921,118)192,996 808,952)
Other financing sources (uses):
Transfers in 61,000 1,054,934
Transfers out (74,754 -
Net other financing sources (uses) (13,754 1,054,934
50,000
355,756)
305,756
112,760)
596,587
1,165,934
430,510)
Net change in fund balances
Beginning fund balances
Ending fund balances
94,584) 133,816
116,732 554,190
22,148 688,006
735,424
73,528)
1,267,509
483,827 1,193,981
54
CITY OF SEWARD
Nonmajor Enterprise Funds
Combining Statement of Net Assets
December 31, 2005
Assets
Current assets:
Cash and investments
Receivables:
Accounts
Assessments
Less allowance for doubtful receivables
Total current assets
Noncurrent assets:
Restricted cash and investments
Assessments receivable
Capital assets, net of accumulated depreciation
Total noncurrent assets
Total assets
Liabilities and Net Assets
Current liabilities:
Accounts payable
Accrued payroll and related liabilities
Accrued interest
Current portion:
Accrued annual leave
Notes payable
Total current liabilities
Noncurrent liabilities, net of current portion:
Accrued annual leave
Notes payable
Net pension obligation
Total noncurrent liabilities
Total liabilities
Net assets:
Invested in capital assets, net of related debt
Unrestricted
Total net assets
Total liabilities and net assets
Exhibit F -1
Parking
Wastewater Revenue Total
76,203 234,283 310,486
90,180 -90,180
816 -816
4,058 -4,058
163,141 234,283 397,424
238,825 -238,825
3,029 -3,029
6,033,304 62,775 6,096,079
6,275,158 62,775 6,337,933
6,438,299 297,058 6,735,357
2,637 1,596 4,233
3,812 -3,812
1,089 -1,089
2,065 -2,065
55,117 -55,117
64,720 1,596 66,316
15,036 -15,036
410,426 -410,426
13,597 -13,597
439,059 -439,059
503,779 1,596 505,375
5,567,761 62,775 5,630,536
366,759 232,687 599,446
5,934,520 295,462 6,229,982
6,438,299 297,058 6,735,357
55
Exhibit F -2
CITY OF SEWARD
Nonmajor Enterprise Funds
Combining Statement of Revenues, Expenses and Change in Net Assets
Year Ended December 31, 2005
Parking
Wastewater Revenue
Operating revenues - charges for services
Operating expenses:
Salaries and benefits
Services and supplies
Administration
Depreciation
Total operating expenses
Earnings from operations
Nonoperating revenues (expenses):
Investment income
Interest expense
Net nonoperating revenues (expenses)
Earnings before contributions and transfers
Capital contributions
Transfers out
Change in net assets
Beginning net assets
Ending net assets
Total
791,988 177,098 969,086
9,455
20,583
158,821 87,134 245,955
167,203 23,868 191,071
96,178 9,744 105,922
278,287 6,025 284,312
700,489 126,771 827,260
91,499 50,327 141,826
30,038 6,148 36,186
9,455 9,455
20,583 6,148 26,731
112,082 56,475 168,557
19,040 - 19,040
66,934 (14,168 (81,102
64,188 42,307 106,495
5,870,332 253,155 6,123,487
5,934,520 295,462 6,229,982
56
CITY OF SEWARD
Nonmajor Enterprise Funds
Combining Statement of Cash Flows
Year Ended December 31, 2005
Cash flows from operating activities:
Receipts from customers and users
Payments to suppliers
Payments to employees
Payments for interfund services used
Net cash flows from operating activities
Cash flows from noncapital financing activities - transfers out
Cash flows from capital and related financing activities:
Principal payments on long -term debt
Interest payments on long -term debt
Acquisition of property, plant and equipment
Capital contributions received
Net cash flows from capital and related financing activities
Cash flows from investing activities -
investment income received
Net increase in cash and investments
Beginning cash and investments
Ending cash and investments
Reconciliation of cash and investments to statement of net assets:
Current assets
Restricted assets
Exhibit F -3
Parking
Wastewater Revenue Total
751,253 177,098 928,351
192,627)24,403)217,030)
153,251)87,134)240,385)
224,854 9,744 234,598
180,521 55,817 236,338
66,934 (14,168 (81,102
53,179)53,179)
10,390)10,390)
43,550)43,550)
19,776 19,776
87,343 87,343
30,038 6,148 36,186
56,282 47,797 104,079
258,746 186,486 445,232
315,028 234,283 549,311
76,203 234,283 310,486
238,825 - 238,825
315,028 234,283 549,311
57
CITY OF SEWARD
Nonmajor Enterprise Funds
Statement of Cash Flows, continued
Reconciliation of earnings from operations to net cash
provided (used) by operating activities:
Earnings from operations
Adjustments to reconcile earnings from operations
to net cash flows from operating activities:
Depreciation
Increase in allowance for doubtful accounts
Increase) decrease in assets - receivables
Increase (decrease) in liabilities:
Accounts payable
Accrued payroll and related liabilities
Accrued annual leave
Deferred revenue
Due to other funds
Net pension obligation
Net cash flows from operating activities
Exhibit F -3, continued
Parking
Wastewater Revenue Total
91,499 50,327 141,826
278,287 6,025 284,312
1,189 1,189
22,884)22,884)
24,235)535)24,770)
1,328)1,328)
527 527
19,040)19,040)
129,865)129,865)
6,371 6,371
180,521 55,817 236,338
W .
Exhibit G -1
CITY OF SEWARD
Internal Service Funds
Combining Statement of Net Assets
December 31, 2005
Assets
Motor
Pool
Compensated
Annual
Leave Total
Current assets -
cash and investments
Noncurrent assets -
capital assets, net of accumulated depreciation
Total assets
1,663,993 297,064 1,961,057
1,000,046 - 1,000,046
2,664,039 297,064 2,961,103
Liabilities and Net Assets
Current liabilities:
Accrued interest
Current portion:
Accrued annual leave
Capital lease obligation
Total current liabilities
Noncurrent liabilities, net of current portion:
Accrued annual leave
Capital lease obligation
Total noncurrent liabilities
Total liabilities
Net assets:
Invested in capital assets, net of related debt
Unrestricted
Total net assets
Total liabilities and net assets
3,086 - 3,086
72,153 72,153
56,519 56,519
59,605 72,153 131,758
224,911 224,911
105,754 105,754
105,754 224,911 330,665
165,359 297,064 462,423
837,773 837,773
1,660,907 1,660,907
2,498,680 2,498,680
2,664,039 297,064 2,961,103
S
CITY OF SEWARD
Internal Service Funds
Combining Statement of Revenues, Expenses and Change in Net Assets
Year Ended December 31, 2005
Exhibit G -2
Compensated
Motor Annual
Pool Leave Total
Operating revenues -
vehicle rental and interfund charges
Operating expenses:
Salaries and benefits
Depreciation
Total operating expenses
Earnings from operations
Nonoperating revenues (expenses):
Investment income
Interest expense
Other revenues
Net nonoperating revenues (expenses)
Earnings before transfers
Transfers in
Change in net assets
Beginning net assets
Adjustment resulting from creating
internal service fund
516,048 265,275 781,323
265,275 265,275
173,690 - 173,690
173,690 265,275 438,965
342,358 - 342,358
45,577 45,577
9,458)9,458)
2,307 2,307
38,426 38,426
380,784 380,784
20,500 252,297 272,797
401,284 252,297 653,581
2,097,396 2,097,396
252,297 (252,297
Ending net assets 2,498,680 - 2,498,680
1
CITY OF SEWARD
Internal Service Funds
Combining Statement of Cash Flows
Year Ended December 31, 2005
Cash flows from operating activities:
Receipts from interfund charges
Receipts from customers and users
Payments to employees
Net cash flows from operating activities
Cash flows from noncapital financing activities -
transfers in
Cash flows from capital and related financing activities:
Principal payments on long -term debt
Interest payments on long -term debt
Acquisition of property, plant and equipment
Transfers in
Net cash flows from capital and related financing activities
Cash flows from investing activities -
investment income received
Net increase in cash and investments
Beginning cash and investments
Ending cash and investments
Reconciliation of earnings from operations to net cash
provided (used) by operating activities:
Earnings from operations
Adjustments to reconcile earnings from operations
to net cash flows from operating activities:
Depreciation
Other nonoperating revenues
Increase in liabilities - accrued annual leave
Net cash flows from operating activities
Exhibit G -3
Compensated
Motor Annual
Pool Leave Total
516,048 265,275 781,323
2,307 2,307
220,508 220,508
518,355 44,767 563,122
252,297 252,297
53,711)53,711)
10,462)10,462)
357,127)357,127)
20,500 20,500
400,800 400,800
45,577 45,577
163,132 297,064 460,196
1,500,861 - 1,500,861
1,663,993 297,064 1,961,057
342,358 - 342,358
173,690 - 173,690
2,307 - 2,307
44,767 44,767
518,355 44,767 563,122
61
GENERAL FUND
The General Fund is established to account for the revenues and expenditures necessary to
carry out basic governmental activities of the City such as fire and police protection, public
works, recreation, planning, administrative services, etc. Appropriations are made from the
General Fund annually.
Revenue is recorded by source, i.e., taxes, charges for services, intergovernmental, etc.
Expenditures are recorded first by function then by activity and object of expenditures.
63
Exhibit H -1
CITY OF SEWARD
General Fund
Balance Sheet
December 31, 2005
With Comparative Amounts for 2004)
Cash and investments
Assets
Receivables:
Taxes:
Personal property
Less allowance for doubtful accounts
Net personal property
Motor vehicle
Hotel/motel room
Real property
Sales
Net taxes
Accounts
Less allowance for doubtful accounts
Net accounts
Property assessments
Grants and shared revenues
Accrued interest
Total receivables
Prepaid items
Inventory
Due from other funds
Total assets
Liabilities and Fund Balance
Liabilities:
Accounts payable
Accrued payroll and related liabilities
Accrued liabilities
Funds held in trust
Deferred revenue
Total liabilities
Fund balance:
Reserved:
Inventory and prepaids
Hospital debt service
Unreserved:
Designated:
Working capital
Insurance
Hospital line of credit
Matching grant funds
Undesignated
Total fund balance
Total liabilities and fund balance
2005 2004
5,728,324 5,093,684
38,101 35,380
4,576 29,268
33,525 6,112
4,343 7,732
15,335 14,798
9,373 12,097
536,982 453,999
599,558 494,738
123,192 136,398
2,281 (3,127
120,911 133,271
1,156 1,377
15,491 5,519
12,080 27,387
749,196 662,292
346,165 429,678
11,125 9,138
84,331 174,636
6,919,141 6,369,428
739,224 353,049
136,225 135,367
117 114,059
10,579 7,732
34,467 18,025
1,038,408 628,232
357,290 438,816
134,245 113,500
1,500,000 1,500,000
519,418 519,418
500,000 500,000
50,000 50,000
2,819,780 2,619,462
5,880,733 5,741,196
6,919,141 6,369,428
64
CITY OF SEWARD
General Fund
Schedule of Revenues, Expenditures and
Change in Fund Balance - Budget and Actual
Year Ended December 31, 2005
With Comparative Amounts for 2004)
Exhibit H -2
Charges for services:
Administrative 1,224,526
2005
34,620)
2004
Rents and leases 70,000 67,418
Variance
80,756
Copying charges 27,000 25,901
Positive
24,324
Work orders
Budget Actual Negativ e c a
Revenues:
568,660 562,529 6,131)548,283
Taxes:
7,800 8,197 397 8,218
Sales 3,060,000 3,411,283 351,283 3,123,314
Property 707,963 787,503 79,540 745,901
Hotel /motel room 235,000 284,656 49,656 239,660
Payments in lieu of taxes 65,450 96,614 31,164 89,926
Penalty and interest 3,250 1,804 1,446)2,863
Total taxes 4,071,663 4,581,860 510,197 4,201,664
Licenses and permits:
23,450 20,660 2,790)23,499
Building permits 85,000 47,281 37,719)140,562
Taxi permits 1,200 1,270 70 1,040
Department of Motor Vehicles commissions 69,000 88,654 19,654 89,577
Animal control licenses 750 545 205)625
Business licenses 20,000 19,500 500)19,630
Miscellaneous 10,850 7,378 3,472)3,179
Total licenses and permits 186,800 164,628 22,172)254,613
Intergovernmental:
Jail contract 371,465 390,038 18,573 371,465
Dispatch contract 98,500 98,000 500)98,500
Raw fish tax 310,000 314,304 4,304 310,577
Shared fisheries and landing tax 15,000 9,619 5,381)5,875
Liquor tax 22,000 15,150 6,850)8,000
Library grant 2,105 2,105 1,500
Other grants 138,439 155,704 17,265 33,618
Total intergovernmental 955,404 984,920 29,516 829,535
Charges for services:
Administrative 1,224,526 1,189,906 34,620)1,140,288
Rents and leases 70,000 67,418 2,582)80,756
Copying charges 27,000 25,901 1,099)24,324
Work orders 40,000 29,685 10,315)22,401
Recreation 568,660 562,529 6,131)548,283
Library 7,800 8,197 397 8,218
Total charges for services 1,937,986 1,883,636 54,350)1,824,270
Fines and bails 20,000 23,206 3,206 22,857
Investment income 126,705 194,247 67,542 160,536
Miscellaneous:
Sale of land, equipment and gravel 16,000 58,642 42,642 20,089
Refuse contract 62,000 64,347 2,347 61,097
Other 23,450 20,660 2,790)23,499
Total miscellaneous 101,450 143,649 42,199 104,685
Total revenues 7,400,008 7,976,146 576,138 7,398,160
65
CITY OF SEWARD
General Fund
Schedule of Revenues, Expenditures and Change in Fund Balance -
Budget and Actual, continued
Exhibit H -2. continued
City manager:
Salaries 188,060
2005
6,695)
2004
Employee benefits 81,199 70,381
Variance
66,279
Purchased services 33,505 34,826
Positive
20,391
Supplies and maintenance
Budize Actual Ne ative Actual
Expenditures:
29.100 33.668 4,568)10,776
General government:
338,164 350,347 12,183)273,208
Mayor and council:
552,915 532,501 20,414 505,931
Salaries 37,219 31,313 5,906 28,943
Employee benefits 12,616 9,201 3,415 7,965
Audit 45,250 42,250 3,000 45,250
Legal 125,000 185,829 60,829)130,423
Purchased services 4,000 2,918 1,082 3,152
Supplies and maintenance 15,500 16,026 526)14,696
Legislative representation 128,000 129,168 1,168)135,079
General and administrative 64,950 94,242 29,292)47,409
Total mayor and council 432,535 510,947 78,412)412,917
City manager:
Salaries 188,060 194,755 6,695)172,410
Employee benefits 81,199 70,381 10,818 66,279
Purchased services 33,505 34,826 1,321)20,391
Supplies and maintenance 6,300 16,717 10,417)3,352
General and administrative 29.100 33.668 4,568)10,776
Total city manager 338,164 350,347 12,183)273,208
City clerk:
Salaries 107,622 102,603 5,019 87,587
Employee benefits 57,448 55,440 2,008 36,385
Purchased services 13,500 6,434 7,066 4,271
General and administrative 10,700 9,653 1,047 6,947
Capital outlay 35,000 35,255 255)
Total city clerk 224,270 209,385 14,885 135,190
Management information systems:
Salaries 86,296 79,428 6,868 78,878
Employee benefits 41,818 39,444 2,374 34,766
Purchased services 5,600 2,702 2,898 2,778
Supplies and maintenance 24,000 28,287 4,287)17,325
General and administrative 14,550 2,998 11,552 9,710
Total management information systems 172,264 152,859 19,405 143,457
Finance:
Salaries 298,480 296,897 1,583 281,643
Employee benefits 155,406 149,677 5,729 135,471
Purchased services 18,400 12,341 6,059 19,825
Supplies and maintenance 47,420 46,364 1,056 44,409
General and administrative 19,209 18,644 565 17,083
Capital outlay 14,000 8,578 5,422 7,500
Total finance 552,915 532,501 20,414 505,931
66
Exhibit H -2. continued
CITY OF SEWARD
General Fund
Schedule of Revenues, Expenditures and Change in Fund Balance -
Budget and Actual, continued
Expenditures, continued:
General government, continued:
Community development:
Salaries
Employee benefits
Purchased services
Supplies and maintenance
General and administrative
Total community development
General services:
Employee benefits
Purchased services
Supplies and maintenance
General and administrative
Capital outlay
Total general services
Contributions to civic organizations:
Senior Citizens
Museum
Wesley Rehabilitation and Care Center
Chamber of Commerce
General and administrative
Total contributions to civic organizations
Total general government
Public safety:
Police:
Salaries
Employee benefits
Purchased services
Supplies and maintenance
General and administrative
Total police
Jail:
Salaries
Employee benefits
Purchased services
Supplies and maintenance
General and administrative
Capital outlay
Total jail
2005
Variance
Positive
Budget Actual tive
79,836 62,952 16,884
34,240 32,352 1,888
40,067 36,606 3,461
7,000 6,588 412
11,059 6,345 4,714
172,202 144,843 27,359
115 57,198
1,354,073
750 750
25,350 11,053 14,297
12,450 7,541 4,909
71,050 46,233 24,817
290,000 290,000
20,650
399,600 354,827 44,773
10,000 10,000
1,000 1,000
62,048 92,048
107,500 107,500
45,000 45,000
225,548 255,548
2004
Actual
61,651
32,512
18,240
2,707
1.748
116,858
728
68,075
7,258
79,072
155,133
10,000
1,000
30,000) -
108,700
30,000) 119,700
2,517,498 2,511,257_ 6,241 1,862,394
773,133 657,497 115,636 652,506
384,040 313,884 70,156 307,855
96,600 98,450 1,850)95,558
49,400 37,470 11,930 44,198
50,900 50,785 115 57,198
1,354,073 1,158,086 195,987 1,157,315
237,889 200,744 37,145 219,104
136,264 100,789 35,475 119,850
20,650 17,597 3,053 19,676
12,000 11,093 907 9,289
104,343 94,569 9,774 79,599
3,433 3,433)
511,146 428,225 82,921 447,518
67
CITY OF SEWARD
General Fund
Schedule of Revenues, Expenditures and Change in Fund Balance -
Budget and Actual, continued
Expenditures, continued:
Public safety, continued:
Animal control:
Purchased services
Supplies and maintenance
Total animal control
Fire:
Salaries
Employee benefits
Purchased services
Supplies and maintenance
General and administrative
Capital outlay
Total fire
Volunteer training:
Employee benefits
Purchased services
Supplies and maintenance
General and administrative
Total volunteer training
Emergency preparedness:
Salaries
Employee benefits
Purchased services
Supplies and maintenance
General and administrative
Total emergency preparedness
Engineer and utility manager:
Salaries
Employee benefits
Purchased services
Supplies and maintenance
General and administrative
Total engineer and utility manager
Building inspector:
Salaries
Employee benefits
Purchased services
Supplies and maintenance
General and administrative
Total building inspector
Total public safety
Exhibit H -2. continued
2005
Variance
Positive
ud et Actual (Negative
2004
Actual
67,280 68,184 904)67,412
1,000 205 795 878
68,280 68,389 109)68,290
8,350 4,647
134,345 136,706 2,361)126,694
76,388 72,811 3,577 65,733
146,623 162,692 16,069)138,054
40,800 37,065 3,735 34,292
15,100 15,767 667)13,402
3,838 3,838)
413,256 428,879 15,623)378,175
3,044
4,600
14,400
28,000
4,591
16,771
22,888
50,044 44,250
30,200 33,947
200 212
3,750 2,557
4,400 1,878
8,350 4,647
3,044 946
9 4,054
2,371) 16,993
5,112 24,025
5,794 46,018
4,147
1,079.
12) 692
1,193 2,766
2,522 2,016
3,703 10,700
60,550 72,321 11,771)32,579
30,200 33,947 3,747)13,292
26,055 21,216 4,839 17,578
5,500 10,409 4,909)3,204
9,700 16,252 6,552)3,133
132,005 154,145 22,140)69,786
57,390 43,422 13,968 17,123
28,619 18,961 9,658 6,745
12,700 13,006 306)12,623
1,500 6,331 4,831)1,169
4,900 4,653 247 3,280
105,109 86,373 18,736 40,940
2,642,263 2,372,994 269,269 2,218,742
68
CITY OF SEWARD
General Fund
Schedule of Revenues, Expenditures and Change in Fund Balance -
Budget and Actual, continued
Exhibit H -2, continued
Library:
Salaries 135,100
2005
4,477
2004
Employee benefits 80,679 76,7I4
Variance
70,336
Purchased services 35,700 40,033
Positive
56,935
Supplies and maintenance
Budget Actual Negative Actual
Expenditures, continued:
20,300 21,523 1,223)18,050
Public works:
3,500 3,500
Roads and streets:
312,529 313,348 819)305,758
Salaries 275,797 185,479 90,318 233,294
Employee benefits 133,694 108,857 24,837 111,140
Purchased services 292,994 286,339 6,655 283,004
Supplies and maintenance 204,750 177,995 26,755 209,930
General and administrative 16,700 8,559 8,141 12,817
Capital outlay 10,605 10,605)
Total roads and streets 923,935 777,834 146,101 850,185
City shop:
Salaries 181,170 139,883 41,287 159,231
Employee benefits 105,445 85,256 20,189 88,516
Purchased services 49,000 54,427 5,427)57,555
Supplies and maintenance 47,000 39,741 7,259 36,114
General and administrative 7,100 7,933 833)3,461
Capital outlay 10,000 8,949 1,051
Total city shop 399,715 336,189 63,526 344,877
Municipal building:
Salaries 67,648 65,221 2,427 63,965
Employee benefits 46,851 44,991 1,860 37,265
Purchased services 88,450 82,208 6,242 70,810
Supplies and maintenance 34,500 37,690 3,190)32,779
General and administrative 1,800 815 985 1,566
Capital outlay 81,400 80,400 1,000
Total municipal building 320,649 311,325 9,324 206,385
Total public works 1,644,299 1,425,348 218,951 1,401,447
Parks and recreation:
Salaries 485,322 454,294 31,028 458,417
Employee benefits 199,539 178,069 21,470 178,397
Purchased services 227,483 279,509 52,026)223,758
Supplies and maintenance 70,860 85,313 14,453)83,779
General and administrative 39,580 48,608 9,028)49,864
Capital outlay 10,000 10,696 696)
Total parks and recreation 1,032,784 1,056,489 23,705)994,215
Library:
Salaries 135,100 130,623 4,477 128,812
Employee benefits 80,679 76,7I4 3,965 70,336
Purchased services 35,700 40,033 4,333)56,935
Supplies and maintenance 37,250 44,455 7,205)31,625
General and administrative 20,300 21,523 1,223)18,050
Capital outlay 3,500 3,500
Total library 312,529 313,348 819)305,758
69
Exhibit H -2. continued
CITY OF SEWARD
General Fund
Schedule of Revenues, Expenditures and Change in Fund Balance -
Budget and Actual, continued
Expenditures, continued:
Debt service:
Principal payments
Retirement benefits
Interest and other costs
Total debt service
Total expenditures
Excess of revenues over (under) expenditures
Other financing sources (uses):
Transfers in
Transfers out
Net other financing sources (uses)
Net change in fund balance
Beginning fund balance
Ending fund balance
2005 2004
Variance
Positive
Bud2 A ctual (Neizativ Actual
236,639 236,640 (1) 225,591
172,957 164,143 8,814 -
28,072 28,072 - 29,171
437,668 428,855 8,813 254,762
8,587,041 8,108,291 478,750 7,037,318
1,187,033) (132,145) 1,054,888 360,842
1,960,739
1,533,065
427,674
759,359)
70
1,960,739 - 1,306,491
168, 9,057) (155,992) (1,367,768)
271,682 (155,992) (61,277)
139,537 898,896 299,565
5,741,196 5,441,631
5,880,733 5,741,196
SPECIAL REVENUE FUNDS
Special Revenue Funds are used to account for expenditures associated with dedicated or restricted
revenue sources.
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.
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.
Highway Safety — To provide overtime saturation patrols to reduce impaired driving
fatalities and injuries, with the goal of saving lives by arresting and punishing
alcohol and drug impaired drivers.
Seward Comprehensive Plan — To account for the costs of updating the Seward
Comprehensive Plan and preparing and producing the Comprehensive Plan
document.
Historical Records Preservation — To account for the costs of preserving the City's
historical records. Funding is provided by a State grant and the City.
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.
Hospital - To account for funding from the City to the externally managed
Providence Seward Medical and Care Center, for the purpose of purchasing
materials, supplies, and contracted services.
71
Exhibit I -1
CITY OF SEWARD
Special Revenue Funds
Combining Balance Sheet
December 31, 2005
Assets
Cash and investments
Liabilities and Fund Balances
Liabilities - deferred revenue
Fund balances - unreserved and undesignated
Total liabilities and fund balances
Parks and
Recreation General Government
Seward
Two Compre-Historical
Litter Lakes hensive Records
Control Park Plan Preservation Total
5,327 2,538 1,039 19,610 28,514
5,327 - 1,039 - 6,366
2,538 - 19,610 22,148
5,327 2,538 1,039 19,610 28,514
72
CITY OF SEWARD
Special Revenue Funds
Combining Statement of Revenues, Expenditures
and Change in Fund Balances
Year Ended December 31, 2005
Exhi bit I-
Expenditures:
Salaries and employee benefits 2,534 37,926 377
Hospital
40,837
Contracted services 65
and Long -
65
Parks and Recreation Public Safety General Government Term Care
8,212
Other services and charges
Computer
639 61,000
Two High
2,639
Historical Network/
7,026 61,000
Litter Lakes Risk Highway Records Web
Co ntro 1 Pik Traffic Safety Preservation Em Hospital IQW
Revenues:
Other financing sources (uses):
Federal grants $ -25,122 865 25,987
Miscellaneous 2,639
Transfers out
1,297
7( 4,754)
3,936
Total revenues 2,639 25,122 2,162
7 4,754)
29,923
Expenditures:
Salaries and employee benefits 2,534 37,926 377 40,837
Contracted services 65 65
Supplies 40 1,785 6,387 8,212
Other services and charges 639 61,000 61,639
Total expenditures 2,639 37,926 2,162 7,026 61,000 110,753
Excess of revenues over
under) expenditures 12,804) -7,026)61,000)80,830)
Other financing sources (uses):
Transfers in 61,000 61,000
Transfers out 7( 4,754)7( 4,754)
Net other financing sources (uses)7 4,754)61,000 13,754
Net change in fund balances 87,558) -7,026)94,584)
Beginning fund balances 2,538 87,558 19,610 7,026 116,732
Ending fund balances $2,538 -19,610 -22,148
73
Exhibit J -1
CITY OF SEWARD
Debt Service Fund
Balance Sheet
December 31, 2005
With Comparative Amounts for 2004)
Assets
Cash and investments
Fund Balance
Fund balance:
Reserved for debt service
Reserved for Hospital PERS liability
Total fund balance
2005 2004
688,006 _L54,190
476,878 554,190
211,128 -
688,006 554,190
75
CITY OF SEWARD
Debt Service Fund
Statement of Revenues, Expenditures
and Change in Fund Balance
Year Ended December 31, 2005
With Comparative Amounts for 2004)
Exhibit J -2
76
2005 2004
Revenues - investment income 12,708 5,116
Expenditures:
Principal payments 564,288 730,000
Interest and other costs 369,538 357,011
Total expenditures 933,826 1,087,011
Excess of revenues over (under) expenditures 921,118)1,081,895)
Other financing sources (uses):
Proceeds from bond issuance:
Par value 5,150,000
Premium 48,423
Payment to refunded debt escrow 5,117,357)
Transfers in 1,054,934 777,124
Transfers out 33,351
Net other financing sources (uses)1,054,934 824,839
Net change in fund balance 133,816 257,056)
Beginning fund balance 554,190 811,246
Ending fund balance 688,006 554,190
76
CAPITAL PROJECT FUNDS
Capital Project Funds are established to account for the resources expended to acquire or construct assets of a
relatively permanent nature.
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.
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.
Fire Boat - To account for the costs of purchasing a fire fighting vessel to provide marine
fire fighting and rescue services to the community, and to secure the port from external
threats.
Fourth and Adams — To account for the costs of building a town square park to include a
public restroom facility, bus pullout, covered waiting area, and green space, servicing to
revitalize the downtown area.
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.
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.
Streets and Sidewalks - To account for the costs of repairs to existing streets and
sidewalks.
Senior Long -Term Care Project — To account for the finance, design, acquisition,
construction and equipment for the new long term care facility.
Pass - Through - To account for miscellaneous governmental grants to external agencies,
where the granting agency requires City accountability to ensure that grant funds
are spent appropriately. In 2005, the balances was comprised of a grant to Qutekcak
Shellfish Hatchery.
77
CITY OF SEWARD
Capital Project Funds
Combining Balance Sheet
December 31, 2005
Exhibit K -1
Liabilities and Fund Balances
00
Liabilities:
Accounts payable - - - - - - - 226 226
Due to other funds - 15,519 42,748 - - - - 4,832 63,099
Total liabilities - 15,519 42,748 - - - - 5,058 63,325
Fund balances - unreserved - designated
for capital improvements 40,242 - - 29,307 287,341 52,635 74,500 198 483,827
Total liabilities and fund balances $ 40,242 15,519 42,748 29,307 287,341 52,635 74,500 4,860 547,152
Hospital
Parks and Public and Long -
Recreation Public Safety General Government Works Term Care
City Hall
911 Facilities Streets Senior
Hoben Flood Equipment 4th and Capital and and Long Term
Assets Park Miti ag tion Replacement Adams Acquisition EE uivment Sidewalks Care Proiect Total
Cash and investments $ 40,242 29,307 287,341 12,684 74,500 444,074
Receivables - grants and shared revenues -15,519 42,748 39,951 4,860 103,078
Total assets $ 40,242 15,519 42,748 29,307 287,341 52,635 74,500 4,860 547,152
Liabilities and Fund Balances
00
Liabilities:
Accounts payable - - - - - - - 226 226
Due to other funds - 15,519 42,748 - - - - 4,832 63,099
Total liabilities - 15,519 42,748 - - - - 5,058 63,325
Fund balances - unreserved - designated
for capital improvements 40,242 - - 29,307 287,341 52,635 74,500 198 483,827
Total liabilities and fund balances $ 40,242 15,519 42,748 29,307 287,341 52,635 74,500 4,860 547,152
Revenues:
Federal grants
State grants
Investment income
Total revenues
Expenditures:
Salaries and benefits
Contracted services
Supplies
Land, buildings and equipment
Other services and charges
Shellfish hatchery pass - through
Total expenditures
Excess of revenues over
under) expenditures
Other financing sources (uses):
Transfers in
Transfers out
Net other financing sources (uses)
Net change in fund balances
Beginning fund balances
Ending fund balances (deficit)
CITY OF SEWARD
Capital Project Funds
Combining Statement of Revenues, Expenditures
and Change in Fund Balances
Year Ended December 31, 2005
Exhibit K -2
50,000
3( 55,756)
355,756 )50,000
9,752) (302)
Hospital
42,101
49,994 29,609
Parks and
10,534
40,242 29,307 287,341 52,635
Public and Long -
Recreation Public Safety General Government Works Term Care
City Hall
911 Facilities Streets Senior
Hoben Flood Equipment Fire 4th and Capital and and Long Term Pass
Park Miti agtion Replacein Bat dam Acquisitio Eguipmen t id wal Care Project Throueh Total
37,765 352,772 67,310 200,000 -4,860 170,000 832,707
7,935 39,951 47,886
11,147 11,147
37,765 360,707 67,310 211,147 39,951 4,860 170,000 891,740
51 51
37,714 202,862 43,500 1,507 285,583
1,315 11,222 12,537
6,708 145,902 64,102 216,712
1,729 721 3,208 302 4,350 3,551 13,861
170,000 170,000
9,752 37,765 360,707 67,310 302 47,850 5,058 170,000 698,744
9,752)302)211,147 (7,899)198)192,996
50,000
3( 55,756)
355,756 )50,000
9,752) (302)144,609)42,101
49,994 29,609 431,950 10,534
40,242 29,307 287,341 52,635
50,000
355,756
305
198) (112,760)
74,500 596,587
74,500 (198) 483,827
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 — To account for the provision of water services to the residents of the City.
Wastewater — To account for the provision of sewer services to the residents of the
City.
Harbor — To account for the provision of harbor and marine services to the public
within the Small Boat Harbor basin.
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.
M
Exhibit L -I
CITY OF SEWARD
Electric Enterprise Fund
Statement of Net Assets
December 31, 2005
With Comparative Amounts for 2004)
Assets 2005 2004
Current assets:
Cash and investments $ 3,647,838 3,260,064
Receivables:
Accounts 812,614 636,859
Assessments 3,781 3,859
Other 27,833 18,407
Less allowance for doubtful accounts (43,164) (28,658)
Net receivables 801,064 630,467
Inventory 594,033 581,474
Total current assets 5,042,935 4,472,005
Restricted cash and investments:
Bond retirement - 307,205
Capital projects 1,934,476 1,825,644
Total restricted cash and investments 1,934,476 2,132,849
Assessments receivable 15,500 23,323
Property, plant and equipment:
Land and land rights 230,951 230,951
Buildings 281,474 281,474
Improvements other than buildings 35,781,415 35,428,322
Equipment 7,325,900 5,174,371
Total property, plant and equipment in service 43,619,740 41,115,118
Less accumulated depreciation 23,875,254)22,617,966)
Net property, plant and equipment in service 19,744,486 18,497,152
Construction in progress 283,468 2,304,203
Total property, plant and equipment 20,027,954 20,801,355
Deferred charges - unamortized debt issuance costs 49,042
Total assets 27,069,907 27,429,532
E-E
Exhibit L -1. continued
CITY OF SEWARD
Electric Enterprise Fund
Statement of Net Assets, continued
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accounts payable
Accrued payroll and related liabilities
Accrued interest
Current portion:
Bonds payable
Accrued annual leave
Customer deposits
Total current liabilities
Noncurrent liabilities, net of current portion:
Accrued annual leave
Bonds payable
Unamortized bond premium
Net pension obligation
Total noncurrent liabilities
Total liabilities
Net assets:
Invested in capital assets, net of related debt
Unrestricted
Total net assets
Total liabilities and net assets
2005 2004
361,828 352,477
28,139 35,046
17,972 11,112
210,000 165,000
8,527 11,965
281,251 306,674
907,717 882,274
16,964 23,609
2,080,000 2,265,000
72,267
3,886 11,183
2,173,117 2 ,299,792
3,080,834 3,182,066
17,714,729 18,371,355
6,274,344 5,876,111
23,989,073 24,247,466
27,069,907 27,429,532
RE
Exhibit L -2
CITY OF SEWARD
Electric Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2005
With Comparative Amounts for 2004)
Operating revenues:
Residential
Small general service
Large general service
Industrial
Harbor power
Street and yard lights
Miscellaneous
Total operating revenues
Operating expenses:
Power
Distribution
Administration and general
Depreciation
Total operating expenses
Earnings from operations
Nonoperating revenues (expenses):
Investment income
Interest expense
Other revenues
Net nonoperating revenues (expenses)
Earnings before contributions and transfers
Capital contributions
Transfers out
Change in net assets
Beginning net assets
Ending net assets
2005 2004
2,275,848 2,159,853
1,316,083 1,236,927
2,943,021 2,734,865
584,189 534,404
61,017 105,092
72,612 71,861
128,408 100,718
7,381,178 6,943,720
3,456,670 2,985,133
300,745 469,983
1,781,775 1,610,842
1,257,288 1,274,862
6,796,478 6,340,820
584,700 602,900
158,265 55,167
138,065)16
3,098 4,513
23,298 106,938
607,998 495,962
237,238 77,211
1,103,629)1,153,176
258,393) (580,003)
24,247,466 24,827,469
23,989,073 24,247,466
Of the total depreciation expense of $1,257,288 above, $772,064 was attributable to capital assets that were
funded with capital contributions.)
84
CITY OF SEWARD
Electric Enterprise Fund
Statement of Cash Flows
Year Ended December 31, 2005
With Comparative Amounts for 2004)
Exhibit L -3
Cash flows from capital and related financing activities:
Issuance of long -term debt
2005 2004
Cash flows from operating activities:
2,430,000)735,000)
Receipts from customers and users 7,188,178 7,021,237
Payments to suppliers 4,210,682)3,703,095)
Payments to employees 790,414)737,390)
Payments for interfund services used 565,589 543,095
Net cash flows from operating activities 1,621,493 2,037,657
Cash flows from noncapital financing activities -
189,401 73,262)
transfers out 1,103,629 1,153,176
Cash flows from capital and related financing activities:
Issuance of long -term debt 2,313,225
Principal payments on long -term debt 2,430,000)735,000)
Interest payments on long -term debt 131,205)148,224)
Acquisition of property, plant and equipment 483,887)217,985)
Capital contributions received 245,139 88,299
Net cash flows from capital and related financing activities 486,728 1,012,910
Cash flows from investing activities - investment income received 158,265 55,167
Net increase (decrease) in cash and investments 189,401 73,262)
Beginning cash and investments 5,392,913 5,466,175
Ending cash and investments 5,582,314 5,392,913
Reconciliation of cash and investments to statement of net assets:
Current assets 3,647,838 3,260,064
Restricted assets 1,934,476 2,132,849
5,582,314 5,392,913
Reconciliation of earnings from operations to net cash provided (used)
by operating activities:
Earnings from operations 584,700 602,900
Adjustments to reconcile earnings from operations to net
cash flows from operating activities:
Depreciation 1,257,288 1,274,862
Other nonoperating revenues 3,098 4,513
Increase in allowance for doubtful receivables 14,506 521
Increase) decrease in assets:
Receivables 185,181)15,536)
Inventory 12,559)6,595)
Increase (decrease) in liabilities:
Accounts payable 9,351 68,963
Accrued payroll and related liabilities 6,907)8,607
Accrued annual leave 10,083)220
Customer deposits 25,423)88,019
Net pension obligation 7,297)11,183
Net cash flows from operating activities 1,621,493 2,037,657
85
Exhibit L -4
CITY OF SEWARD
Electric Enterprise Fund
Schedule of Operating Expenses
Year Ended December 31, 2005
With Comparative Amounts for 2004)
Power:
Salaries and employee benefits
Purchased services
Power for resale
Supplies, maintenance and other
Total power
Distribution:
Salaries and employee benefits
Salary credits - work orders
Purchased services
Supplies and maintenance
Supply credits - work orders
Administration and general
Total distribution
Administration and general:
Salaries and employee benefits
Purchased services
Supplies and maintenance
Administrative fee
Other
Total administration and general
Depreciation
Total operating expenses
2005 2004
11,234 14,098
80,711 96,726
3,309,570 2,855,564
55,155 18,745
3,456,670 2,985,133
412,842 410,753
158,437)122,262)
41,244 61,099
128,953 179,606
129,330)63,985)
5,473 4,772
300,745 469,983
500,488 454,811
295,997 300,653
147,381 101,079
565,589 543,095
272,320 211,204
1,781,775 1,610,842
1,257,288 1,274,862
6,796 6,3
Exhibit L -5
CITY OF SEWARD
Electric Enterprise Fund
Schedule of Composition of Net Assets
December 31, 2005
With Comparative Amounts for 2004)
2005 2004
Grants and other external contributions $ 24,731,396 24,494,158
Related accumulated amortization (12,022,010) (11,249,946)
City - generated equity 11,279,687 11,003,254
Total net assets $ 23,989,073 24,247,466
jffi
CITY OF SEWARD
Water Enterprise Fund
Statement of Net Assets
December 31, 2005
With Comparative Amounts for 2004)
Exhibit L-6
Assets
2,507
2004
Buildings
2005 restated
Current assets:
1,033,919 1,033,919
Cash and investments 2,826,951 2,606,894
Receivables:
4,691,243 4,186,647
Accounts 89,721 55,898
Assessments 7,069 41,505
Grants 24,630 7,324
Other 44,877 1,845
Less allowance for doubtful accounts 4,037)2,515
Net receivables 162,260 104,057
Inventory 22,338 19,691
Total current assets 3,011,549 2,730,642
Restricted cash and investments - capital projects 136,195 188,941
Assessments receivable 60,087 67,156
Property, plant and equipment
Land and land rights 2,507 2,507
Buildings 1,287,853 1,287,853
Improvements other than buildings 1,033,919 1,033,919
Equipment 2,366,964 1,862,368
Total property, plant and equipment in service 4,691,243 4,186,647
Less accumulated depreciation 3,213,266 3,136,958
Net property, plant and equipment in service 1,477,977 1,049,689
Construction in progress 744,950 715,837
Total property, plant and equipment 2,222,927 1,765,526
Total assets 5,430,758 4,752,265
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accounts payable 28,099 51,798
Accrued payroll and related liabilities 9,590 5,914
Accrued annual leave 3,002 3,062
Total current liabilities 40,691 60,774
Noncurrent liabilities, net of current portion
Accrued annual leave 9,344 7,302
Net pension obligation 10,526 6,634
Total noncurrent liabilities 19,870 13,936
Total liabilities 60,561 74,710
Net assets:
Invested in capital assets, net of related debt 2,222,927 1,765,526
Unrestricted 3,147,270 2,912,029
Total net assets 5,370,197 4,677,555
Total liabilities and net assets 5,430,758 4,752,265
88
Exhibit L -7
CITY OF SEWARD
Water Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2005
With Comparative Amounts for 2004)
Operating expenses:
Salaries and benefits 193,721
2004
Purchased services
2005 restated
Operating revenues:
87,907 46,018
Residential 351,784 260,301
Small general service 102,823 79,924
Large general service 187,155 145,441
Industrial 195,070 117,980
Seward Marine Industrial Center 48,097 51,964
Ship water sales 70,533 65,741
Miscellaneous 64,370 48,619
Total operating revenues 1,019,832 769,970
Operating expenses:
Salaries and benefits 193,721 197,502
Purchased services 230,319 210,401
Supplies and maintenance 87,907 46,018
Administration and general 156,877 151,591
Other 17,685 13,883
Depreciation 76,308 76,308
Total operating expenses 762,817 695,703
Earnings from operations 257,015 74,267
Nonoperating revenues:
Investment income 73,338 14,493
Other revenues - insurance proceeds 359,120
Total nonoperating revenues 432,458 14,493
Earnings before contributions and transfers 689,473 88,760
Capital contributions 24,000 307,076
Transfers in 65,756 168,500
Transfers out 86,587 79,473
Change in net assets 692,642 484,863
Beginning net assets 4,677,555 4,192,692
Ending net assets 5,370,197 4,677,555
Of the total depreciation expense of $76,308 above, $17,286 was attributable to capital assets that were funded with
capital contributions.)
E
CITY OF SEWARD
Water Enterprise Fund
Statement of Cash Flows
Year Ended December 31, 2005
With Comparative Amounts for 2004)
Exhibit L -8
90
2005 2004
Cash flows from operating activities:
Receipts from customers and users 944,499 763,097
Payments to suppliers 363,779)243,177)
Payments to employees 184,171)192,271)
Payments for interfund services used 1( 55,355)151,591
Net cash flows from operating activities 241,194 176,058
Cash flows from noncapital financing activities:
Transfers in 65,756 168,500
Transfers out 86,587)79,473)
Net cash flows from noncapital financing activities 20,831 89,027
Cash flows from capital and related financing activities:
Acquisition of property, plant and equipment 533,709)519,901)
Capital contributions received 48,199 279,200
Insurance proceeds 359,120
Net cash flows from capital and related financing activities 126,390 2( 40,701)
Cash flows from investing activities - investment income received 73,338 14,493
Net increase in cash and investments 167,311 38,877
Beginning cash and investments 2,795,835 2,756,958
Ending cash and investments 2,963,146 2,795,835
Reconciliation of cash and investments to statement of net assets:
Current assets 2,826,951 2,606,894
Restricted assets 136,195 188,941
2,963,146 2,795,835
Reconciliation of earnings from operations to net cash provided (used)
by operating activities:
Earnings from operations 257,015 74,267
Adjustments to reconcile earnings from operations
to net cash flows from operating activities:
Depreciation 76,308 76,308
Increase in allowance for doubtful receivables 1,522 345
Increase) decrease in assets:
Receivables 76,855)7,218)
Prepaid expenses 940
Inventory 2,647)212
Increase (decrease) in liabilities:
Accounts payable 23,699)25,973
Accrued payroll and related liabilities 3,676 418)
Accrued annual leave 1,982 985)
Net pension obligation 3,892 6,634
Net cash flows from operating activities 241,194 176,058
90
Exhibit L -9
CITY OF SEWARD
Water Enterprise Fund
Schedule of Composition of Net Assets
December 31, 2005
With Comparative Amounts for 2004)
2005
Grants and other external contributions
Related accumulated amortization
Contributions from other funds
City - generated equity
Total net assets
2,362,731
2004
restated
2,339,798
1,699,512) (1,682,226)
498,756 23,880
4,208,222 3,996,103
5,370,197 4,677,555
91
Exhibit L -10
CITY OF SEWARD
Water Enterprise Fund
Combining Schedule of Water Capital Projects
Year Ended December 31, 2005
Water
Tank Fire
Forest & Line Hydrant
Acres Extension Phase II Totals
Funding sources:
Federal grants
State grants
Water Fund
Capital Acquisition Fund
Insurance proceeds
Total funding sources
Capital outlay:
Contracted services
Supplies
Other services and charges
Total capital outlay
800 - - 800
267 - 22,933 23,200
70,000 5,113 75,113
65,756 - 65,756
359,120 - 359,120
1,067 494,876 28,046 523,989
1,067 - 4,060 5,127
8,375 8,375
494,876 15,611 510,487
1,067 494,876 28,046 523,989
92
CITY OF SEWARD
Wastewater Enterprise Fund
Statement of Net Assets
December 31, 2005
With Comparative Amounts for 2004)
Exhibit L -I I
93
2004
Assets 2005 restated
Current assets:
Cash and investments 76,203
Receivables:
Accounts 90,180 63,750
Assessments 816 736
Other 3,546
Less allowance for doubtful accounts 4 2,869)
Net receivables 86,938 65,163
Total current assets 163,141 65,163
Restricted cash and investments - capital projects 238,825 258,746
Assessments receivable 3,029 3,845
Property, plant and equipment:
Land and land rights 111,011 111,011
Buildings 2,413,234 2,413,234
Improvements other than buildings 8,680,679 8,680,679
Equipment 282,676 259,047
Total property, plant and equipment in service 11,487,600 11,463,971
Less accumulated depreciation 5,519,909)5,241 622
Net property, plant and equipment in service 5,967,691 6,222,349
Construction in progress 65,613 45,692
Total property, plant and equipment 6,033,304 6,268,041
Total assets 6,438,299 6,595,795
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accounts payable 2,637 26,872
Accrued payroll and related liabilities 3,812 5,140
Accrued interest 1,089 2,024
Current portion:
Accrued annual leave 2,065 2,594
Notes payable 55,117 52,104
Deferred revenue 19,040
Due to other funds 129,865
Total current liabilities 64,720 237,639
Noncurrent liabilities, net of current portion:
Accrued annual leave 15,036 13,980
Notes payable 410,426 466,618
Net pension obligation 13,597 7,226
Total noncurrent liabilities 439,059 487,824
Total liabilities 503,779 725,463
Net assets:
Invested in capital assets, net of related debt 5,567,761 5,749,319
Unrestricted 366,759 121,013
Total net assets 5,934,520 5,870,332
Total liabilities and net assets 6,438,299 6,595,795
93
Exhibit L -12
CITY OF SEWARD
Wastewater Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2005
With Comparative Amounts for 2004)
2004
2005 restated
Operating revenues:
Residential 418,944 360,378
Small general service 115,703 92,125
Large general service 189,683 166,581
Seward Marine Industrial Center 42,869 58,307
Miscellaneous 24,789 25,379
Total operating revenues 791,988 702,770
Operating expenses:
Salaries and benefits 158,821 148,468
Purchased services 110,181 121,495
Supplies and maintenance 47,179 46,742
Administration and general 96,178 92,556
Other 9,843 10,295
Depreciation 278,287 276,978
Total operating expenses 700,489 696,534
Earnings from operations 91,499 6,236
Nonoperating revenues (expenses):
Investment income 30,038 15,656
Interest expense 9,455 14,004
Net nonoperating revenues (expenses)20,583 1,652
Earnings before contributions and transfers 112,082 7,888
Capital contributions 19,040
Transfers out 66,934 74,097
Change in net assets 64,188 66,209)
Beginning net assets 5,870,332 5,936,541
Ending net assets 5,934,520 5,870,332
Of the total depreciation expense of $278,287 above, $214,878 was attributable to capital assets that were funded
with capital contributions.)
94
Exhibit L -13
CITY OF SEWARD
Wastewater Enterprise Fund
Statement of Cash Flows
Year Ended December 31, 2005
With Comparative Amounts for 2004)
Cash flows from noncapital financing activities - transfers out 66,934 74,097
Cash flows from capital and related financing activities:
Principal payments on long -term debt
2004
50,865)
200 restated
Cash flows from operating activities:
14,241)
Acquisition of property, plant and equipment
Receipts from customers and users 751,253 689,804
Payments to suppliers 192,627)167,497)
Payments to employees 153,251)137,118)
Payments for interfund services used 224,854 258,386
Net cash flows from operating activities 180,521 126,803
Cash flows from noncapital financing activities - transfers out 66,934 74,097
Cash flows from capital and related financing activities:
Principal payments on long -term debt 53,179)50,865)
Interest payments on long -term debt 10,390)14,241)
Acquisition of property, plant and equipment 43,550)9,162)
Capital contributions received 19,776 5,906
Net cash flows from capital and related financing activities 87,343 68,362
Cash flows from investing activities - investment income received 30,038 15,656
Net increase in cash and investments 56,282
Beginning cash and investments 258,746 258,746
Ending cash and investments 315,028 258,746
Reconciliation of cash and investments to statement of net assets:
Current assets 76,203
Restricted assets 238,825 258,746
315,028 258,746
Reconciliation of earnings from operations to net cash provided
used) by operating activities:
Earnings from operations 91,499 6,236
Adjustments to reconcile earnings from operations
to net cash flows from operating activities:
Depreciation 278,287 276,978
Increase in allowance for doubtful receivables 1,189 444
Increase) decrease in assets - receivables 22,884)13,410)
Increase (decrease) in liabilities:
Accounts payable 24,235)11,035
Accrued payroll and related liabilities 1,328)776
Accrued annual leave 527 3,348
Deferred revenue 19,040)
Due to other funds 129,865)165,830)
Net pension obligation 6,371 7,226
Net cash flows from operating activities 180,521 126,803
95
Exhibit L -14
CITY OF SEWARD
Wastewater Enterprise Fund
Schedule of Composition of Net Assets
December 31, 2005
With Comparative Amounts for 2004)
2004
2005 restated
Grants and other external contributions
Related accumulated amortization
Contributions from other funds
City - generated equity
Total net assets
9,888,311 9,869,271
5,503,333) (5,288,455)
161,550 161,550
1,387,992 1,127,966
5,934,520 5 ,8 70,332
M
Exhibit L -15
CITY OF SEWARD
Wastewater Enterprise Fund
Schedule of Wastewater Capital Projects
Year Ended December 31, 2005
Backup
Generator
and
Building
Funding sources:
Borough grant $ 19,040
Wastewater Fund 880
Total funding sources $ 19,920
Capital outlay:
Contracted services 8,570
Supplies 111
Other services and charges 11,239
Total capital outlay $ 19,920
97
CITY OF SEWARD
Harbor Enterprise Fund
Statement of Net Assets
December 31, 2005
With Comparative Amounts for 2004)
Exhibit L -16
Assets 2005 2004
Current assets:
Cash and investments 388,396 420,306
Receivables:
Accounts 112,260 122,381
Grants 878,164 187,868
Assessments 4,286 4,465
Less allowance for doubtful accounts 11,140)
Net receivables 994,710 303,574
Total current assets 1,383,106 723,880
Restricted cash and investments:
Bond retirement 363,378 248,518
Capital projects 764,909 622,528
Total restricted cash and investments 1,128,287 871,046
Assessments receivable 36,433 40,719
Property, plant and equipment:
Land and land rights 3,377,979 3,377,979
Buildings 396,187 396,187
Improvements other than buildings 11,848,476 11,848,476
Equipment 835,228 832,328
Total property, plant and equipment in service 16,457,870 16,454,970
Less accumulated depreciation 6,475,639)5,498,806)
Net property, plant and equipment in service 9,982,231 10,956,164
Construction in progress 5,169,335 1,143,554
Total property, plant and equipment 15,151,566 12,099,718
Total assets 17,699,392 13,735,363
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accounts payable 318,818 44,422
Accrued payroll and related liabilities 22,566 21,657
Accrued interest 39,635 35,848
Current portion:
Bonds payable 110,000 105,000
Accrued annual leave 13,608 13,786
Deferred revenue 531,241 443,254
Other accrued liabilities 36,214 30,787
Total current liabilities 1,072,082 694,754
Noncurrent liabilities, net of current portion
Accrued annual leave 38,207 35,394
Bonds payable 4,010,000 2,620,000
Net pension obligation 66,681 30,729
Total noncurrent liabilities 4,114,888 2,686,123
Total liabilities 5.186.970 3.380.877
Net assets:
Invested in capital assets, net of related debt 11,031,566 9,374,718
Unrestricted 1,480,856 979,768
Total net assets 12,512,422 10,354,486
Total liabilities and net assets $ 17,699,392 13,735,363
98
CITY OF SEWARD
Harbor Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2005
With Comparative Amounts for 2004)
Exhibit L -17
Nonoperating revenues (expenses):
Investment income
2005
27,602
Operating revenues:
154,329)147,311)
Moorage 1,027,885 929,829
Wharfage 58,767 48,065
Boat lift fees 57,720 76,249
Power sales 179,470 188,683
Rentals and leases 231,663 228,558
Passenger transit fees 271,044 257,889
Miscellaneous 116,875 89,401
Total operating revenues 1,943,424 1,818,674
Ending net assets
Operating expenses:
10,354,486
Salaries and benefits 623,985 589,509
Purchased services 355,521 304,218
Power for resale 85,915 61,531
Supplies and maintenance 85,264 92,844
Administration and general 159,526 101,599
Depreciation 976,833 999,502
Total operating expenses 2,287,044 2,149,203
Loss from operations 343,620)330,529)
Nonoperating revenues (expenses):
Investment income 58,805 27,602
Interest expense 154,329)147,311)
Other revenues 18,042
Net nonoperating revenues (expenses)95,524)101,667)
Loss before contributions and transfers 439,144)432,196)
Capital contributions 2,869,057 337,843
Transfers out 271,977)249,672)
Change in net assets 2,157,936 344,025)
Beginning net assets 10,354,486 10,698,511
Ending net assets 12,512,422 10,354,486
Of the total depreciation expense of $976,833 above, $510,931 was attributable to capital assets that were funded with capital
contributions.)
99
CITY OF SEWARD
Harbor Enterprise Fund
Statement of Cash Flows
Year Ended December 31, 2005
With Comparative Amounts for 2004)
Exhibit L -18
Reconciliation of cash and investments to statement of net assets:
Current assets 388,396 420,306
Restricted assets 1,128,287 871,046
1,516,683 1,291,352
Reconciliation of loss from operations to net cash provided (used)
2005 2004
Cash flows from operating activities:
Receipts from customers and users 2,030,392 1,889,720
Payments to suppliers 279,938)469,366)
Payments to employees 584,489)553,504)
Payments for interfund services used 126,465 101,599
Net cash flows from operating activities 1,039,500 765,251
Cash flows from noncapital financing activities - transfers out 271,977 2( 49,672)
Cash flows from capital and related financing activities:
10,121 84,491
Issuance of long -term debt 1,500,000
Principal payments on long -term debt 105,000)95,000)
Interest payments on long -term debt 150,542)148,617)
Acquisition of property, plant and equipment 4,028,681)337,843)
Capital contributions received =2,183,226 153,726
Net cash flows from capital and related financing activities 6( 00,997)427,734
Cash flows from investing activities - investment income received 58,805 27,602
Net increase in cash and investments 225,331 115,447
Beginning cash and investments 1,291,352 1,175,905
Ending cash and investments 1,516,683 1,291,352
Reconciliation of cash and investments to statement of net assets:
Current assets 388,396 420,306
Restricted assets 1,128,287 871,046
1,516,683 1,291,352
Reconciliation of loss from operations to net cash provided (used)
by operating activities:
Loss from operations 343,620)330,529)
Adjustments to reconcile loss from operations to net cash
flows from operating activities:
Depreciation 976,833 999,502
Other nonoperating revenues 18,042
Decrease in allowance for doubtful receivables 11,140)23,518)
Decrease in assets - receivables 10,121 84,491
Increase (decrease) in liabilities:
Accounts payable 274,396 10,913)
Accrued payroll and related liabilities 909 508
Accrued annual leave 2,635 4,768
Other accrued liabilities 5,427 140
Deferred revenue 87,987 7,969)
Net pension obligation 35,952 30,729
Net cash flows from operating activities 1,039,500 765,251
100
Exhibit L -19
CITY OF SEWARD
Harbor Enterprise Fund
Schedule of Composition of Net Assets
December 31, 2005
With Comparative Amounts for 2004)
2005 2004
Grants and other external contributions
Related accumulated amortization
Contributions from other funds
City- generated deficit
Total net assets
14,287,337 11,418,280
3,889,763) (3,378,832)
4,060,270 4,060,270
1,945,422 1,745,232
12,512,422 10,354,4966
101
Exhibit L -20
CITY OF SEWARD
Harbor Enterprise Fund
Combining Schedule of Harbor Capital Projects
Year Ended December 31, 2005
SBH
Harbor Repairs and
Expansion Renovations Totals
Funding sources:
State grants $ 1,562,462 6,595 1,569,057
Federal grants 1,300,000 - 1,300,000
Harbor Fund 1,156,724 - 1,156,724
Total funding sources $ 4,019,186 6,595 4,025,781
Capital outlay:
Contracted services 2,836,539 5,996 2,842,535
Other services and charges 1,182,647 599 1,183,246
Total capital outlay $ 4,019,186 6,595 4,025,781
102
Exhibit L -21
CITY OF SEWARD
Seward Marine Industrial Center Enterprise Fund
Statement of Net Assets
December 31, 2005
With Comparative Amounts for 2004)
Assets 2005 2004
Current assets:
Cash and investments $ - 52,842
Accounts receivable 21,866 24,549
Total current assets 21,866 77,391
Property, plant and equipment:
Land and land rights 12,021,821 12,021,821
Buildings 277,047 277,047
Improvements other than buildings 26,792,993 26,792,993
Equipment 908,788 908,788
Docks and floats 13,145,688 13,145,688
Total property, plant and equipment in service 53,146,337 53,146,337
Less accumulated depreciation 23,543,735)22,412,909)
Net property, plant and equipment in service 29,602,602 30,733,428
Deferred revenue
Deferred charges - unamortized debt issuance costs 4,820 7,230
21,232
Total assets 29,629,288 30,818,049
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accounts payable 1,676 4,773
Accrued payroll and related liabilities _3,021 3,101
Accrued interest 1,057 4,292
Current portion:
Bonds payable 147,575 143,639
Capital lease obligation 95,000
Deferred revenue 15,740 16,868
Due to other funds 21,232
Total current liabilities 190,301 267,673
Noncurrent liabilities, net of current portion:
Bonds payable 373,854 521,429
Less unamortized deferred amount on refunding 76,850)115,275)
Total noncurrent liabilities 297,004 406,154
Total liabilities 487,305 673,827
Net assets:
Invested in capital assets, net of related debt 29,162,843 30,088,635
Unrestricted (deficit) (20,860) 55,587
Total net assets 29,141,983 30,144,222
Total liabilities and net assets $ 29,629,288 30,818,049
103
Exhibit L -22
CITY OF SEWARD
Seward Marine Industrial Center Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2005
With Comparative Amounts for 2004)
Operating expenses:
Salaries and benefits
2005 2004
Operating revenues:
74,669 57,789
Moorage 6,966 1,978
Wharfage 17,394 3,816
Boat lift fees 104,021 110,610
Storage 110,120 125,017
Rentals and leases 66,409 66,828
Power sales 8,903 9,010
Miscellaneous 11,015 750
Total operating revenues 324,828 318,009
Operating expenses:
Salaries and benefits 69,886 65,524
Purchased services 74,669 57,789
Supplies and maintenance 33,844 54,895
Administration and general 152,478 212,079
Depreciation 1,130,826 1,130,826
Total operating expenses 1,461,703 1,521,113
Loss from operations 1,136,875)1,203,104)
Nonoperating revenues (expenses):
Investment income (loss) (2,773) 1,370
Interest expense (60,227) 70,198
Net nonoperating revenues (expenses) (63,000) (68,828)
Loss before transfers 1,199,875)1,271,932)
Transfers in 250,326 280,678
Transfers out 52,690)44,455
Change in net assets 1,002,239)1,035,709
Beginning net assets 30,144,222 31,106,338
Prior period adjustment 73,593
Beginning net assets, restated 30,144,222 31,179,931
Ending net assets $ 29,141,983 30,144,222
Of the total depreciation expense of $1,130,826 above, $1,011,139 was attributable to capital assets that were
funded with capital contributions.)
104
CITY OF SEWARD
Seward Marine Industrial Center Enterprise Fund
Statement of Cash Flows
Year Ended December 31, 2005
With Comparative Amounts for 2004)
Exhibit L -23
Cash flows from capital and related financing activities:
Principal payments on long -term debt
2005 2004
Cash flows from operating activities:
25,037)31,241)
Receipts from customers and users 326,383 330,969
Payments to suppliers 92,374)115,726)
Payments to employees 69,966)64,497)
Payments for interfund services used 148,072 212,079
Net cash flows from operating activities 15,971 61,333
Cash flows from noncapital financing activities:
116,493
3,042)
Transfers in 250,326 280,678
Transfers out 52,690 44.455)
Net cash flows from noncapital financing activities 197,636 236,223
Cash flows from capital and related financing activities:
Principal payments on long -term debt 238,639)231,670)
Interest payments on long -term debt 25,037)31,241)
Proceeds from sale of capital assets 23,000
Net cash flows from capital and related financing activities 263,676 239,911
Amortization of debt issuance costs
Cash flows from investing activities - investment income received (loss)2,773 1,370
2,683
Net decrease in cash and investments 52,842)63,651)
Beginning cash and investments 52,842 116,493
3,042)
Ending cash and investments 52,842
Reconciliation of loss from operations to net cash provided (used)
by operating activities:
Loss from operations 1,136,875)1,203,104)
Adjustments to reconcile loss from operations to net cash
flows from operating activities:
Depreciation 1,130,826 1,130,826
Amortization of debt issuance costs 2,410
Decrease in assets - accounts receivable 2,683 6,420
Increase (decrease) in liabilities:
Accounts payable 3,097)3,042)
Accrued payroll and related liabilities 80)1,027
Deferred revenue 1,128)6,540
Due to other funds 21,232
Net cash flows from operating activities 15,971 61,333
105
Exhibit L -24
CITY OF SEWARD
Seward Marine Industrial Center Enterprise Fund
Schedule of Composition of Net Assets
December 31, 2005
With Comparative Amounts for 2004)
2005
Grants and other external contributions
Related accumulated amortization
Contributions from other funds
City - generated deficit
Total net assets
2004
35,725,414 35,725,414
21,425,412) (20,414,273)
15,593,272 15,342,946
751,291) (509,865)
29,141,983 30,144,222
106
Exhibit L -25
CITY OF SEWARD
Parking Revenue Enterprise Fund
Statement of Net Assets
December 31, 2005
With Comparative Amounts for 2004)
Assets 2005 2004
Current assets - cash and investments $ 234,283 186,486
Property, plant and equipment:
Improvements other than buildings 513,540 513,540
Equipment 18,725 18,725
Total property, plant and equipment in service 532,265 532,265
Less accumulated depreciation 469,490 463,465
Net property, plant and equipment in service 62,775 68,800
Total assets 297,058 255,286
Liabilities and Net Assets
Current liabilities - accounts payable 1,596 2,131
Net assets:
Invested in capital assets, net of related debt 62,775 68,800
Unrestricted 232,687 184,355
Total net assets 295,462 253,155
Total liabilities and net assets $ 297,058 255,286
107
Exhibit L -26
CITY OF SEWARD
Parking Revenue Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2005
With Comparative Amounts for 2004)
2005 2004
Operating revenues - parking fees $ 177,098 167,101
Operating expenses:
Salaries and employee benefits 87,134 71,970
Supplies and maintenance 10,868 11,636
Rents and leases 13,000 13,000
Administration and general 9,744 6,495
Depreciation 6,025 5,534
Total operating expenses 126,771 108,635
Earnings from operations 50,327 58,466
Nonoperating revenues - investment income 6,148 1,877
Earnings before transfers 56,475 60,343
Transfers out 14,168 13,368
Change in net assets 42,307 46,975
Beginning net assets 253,155 206,180
Ending net assets 295,462 253,155
108
Exhibit L -27
CITY OF SEWARD
Parking Revenue Enterprise Fund
Statement of Cash Flows
Year Ended December 31, 2005
With Comparative Amounts for 2004)
Cash flows from capital and related financing activities -
acquisition of property, plant and equipment - 13,499
Cash flows from investing activities - investment income received 6,148 1,877
Net increase in cash and investments 47,797 38,984
Beginning cash and investments 186,486 147,502
Ending cash and investments $ 234,283 186,486
Reconciliation of earnings from operations to net cash
provided (used) by operating activities:
Earnings from operations 50,327 58,466
Adjustments to reconcile earnings from operations
to net cash flows from operating activities:
Depreciation 6,025 5,534
Decrease in liabilities -
accounts payable 535 (26)
Net cash flows from operating activities $ 55,817 63,974
109
2005 2004
Cash flows from operating activities:
Receipts from customers and users 177,098 167,101
Payments to suppliers 24,403)24,662)
Payments to employees 87,134)71,970)
Payments for interfund services used 9,744 6,495
Net cash flows from operating activities 55,817 63,974
Cash flows from noncapital financing activities -
transfers out 14,168 13,368
Cash flows from capital and related financing activities -
acquisition of property, plant and equipment - 13,499
Cash flows from investing activities - investment income received 6,148 1,877
Net increase in cash and investments 47,797 38,984
Beginning cash and investments 186,486 147,502
Ending cash and investments $ 234,283 186,486
Reconciliation of earnings from operations to net cash
provided (used) by operating activities:
Earnings from operations 50,327 58,466
Adjustments to reconcile earnings from operations
to net cash flows from operating activities:
Depreciation 6,025 5,534
Decrease in liabilities -
accounts payable 535 (26)
Net cash flows from operating activities $ 55,817 63,974
109
Exhibit L -28
CITY OF SEWARD
Parking Enterprise Fund
Schedule of Composition of Net Assets
December 31, 2005
With Comparative Amounts for 2004)
Grants and other external contributions
Related accumulated amortization
Contributions from other funds
City- generated equity
Total net assets
2005
425,891
425,891)
7,650
287,812
2004
425,891
425,891)
7,650
245,505
295,462 2253155
110
INTERNAL SERVICE FUNDS
Motor Pool — The motor pool internal service fund accounts for payments from
departments for the use of vehicles, in order to accumulate cash to forward -fund
replacement of vehicles. This funding mechanism spreads the cost of the vehicles
over the expected life of the vehicle in each program's annual budget, rather than to
show the cost of vehicles as a one -time expense to each fund in the year of
purchase.
Compensated Annual Leave — The compensated annual leave fund was created in
2005 for the purpose of accumulating cash reserves to pay annual leave cash -outs for
governmental funds.
111
Exhibit M -1
CITY OF SEWARD
Motor Pool Internal Service Fund
Statement of Net Assets
December 31, 2005
With Comparative Amounts for 2004)
Assets 2005 2004
Current assets - cash and investments $ 1,663,993 1,500,861
Property, plant and equipment:
Equipment and vehicles 2,426,015 2,114,440
Less accumulated depreciation (1,471,521 (1,297,832
Net equipment and vehicles in service 954,494 816,608
Construction in progress 45,552 -
Total property, plant and equipment 1,000,046 816,608
Total assets $ 2,664,039 2,317,469
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accrued interest 3,086 4,089
Current portion of capital lease obligation 56,519 53,711
Total current liabilities 59,605 57,800
Capital lease obligation, net of current portion 105,754 162,273
Total liabilities 165,359 220,073
Net assets:
Invested in capital assets, net of related debt 837,773 600,624
Unrestricted 1,660,907 1,496,772
Total net assets 2,498,680 2,097,396
Total liabilities and net assets 2,664,039 2,317,469
112
Exhibit M -2
CITY OF SEWARD
Motor Pool Internal Service Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2005
With Comparative Amounts for 2004)
2005 2004
Operating revenues - vehicle rental $ 516,048 500,047
Operating expenses - depreciation 173,690 193,131
Earnings from operations 342,358 306,916
Nonoperating revenues (expenses):
Gain on disposal of capital assets 12,914
Investment income 45,577 13,178
Interest expense 9,458)12,176)
Other revenues 2,307
Net nonoperating revenues (expenses)38,426 13,916
Earnings before transfers 380,784 320,832
Transfers in 20,500 307,750
Change in net assets 401,284 628,582
Beginning net assets 2,097,396 1,468,814
Ending net assets 2,498,680 2,097,396
Of the total depreciation expense of $173,690 above, $9,729 was attributable to capital assets that were
funded with capital contributions.)
113
Exhibit M -3
CITY OF SEWARD
Motor Pool Internal Service Fund
Statement of Cash Flows
Year Ended December 31, 2005
With Comparative Amounts for 2004)
2005 2004
Cash flows from operating activities:
Receipts from interfimd charges
Receipts from customers and users
Net cash flows from operating activities
Cash flows from capital and related financing activities:
Principal payments on long -term debt
Interest payments on long -term debt
Acquisition of equipment and vehicles
Proceeds from sale of capital assets
Transfers in
Net cash flows from capital and
related financing activities
Cash flows from investing activities -
investment income received
Net increase in cash and investments
Beginning cash and investments
Ending cash and investments
Reconciliation of earnings from operations to net cash
provided (used) by operating activities:
Earnings from operations
Adjustments to reconcile earnings from operations
to net cash flows from operating activities:
Depreciation
Other nonoperating revenues
Net cash flows from operating activities
516,048 500,047
2,307 -
518,355 500,047
53,711)51,043)
10,462)13,128)
357,127)179,507)
12,914
20,500 307,750
400,800) 76,986
45,577 13,178
163,132 590,211
1,500,861 910,650
1,663,993 1,500,861
342,358 306,916
173,690 193,131
2,307 -
518,355 500,047
114
Exhibit M -4
CITY OF SEWARD
Motor Pool Internal Service Fund
Schedule of Composition of Net Assets
December 31, 2005
With Comparative Amounts for 2004)
2005 2004
Grants and other external contributions
Related accumulated amortization
Contributions from other funds
City - generated equity
Total net assets
97,289 97,289
87,562) (77,833)
827,378 806,878
1,661,575 1,271,062
2,498,680 2,097,396
115
Exhibit M -5
CITY OF SEWARD
Compensated Annual Leave Internal Service Fund
Statement of Net Assets
December 31, 2005
Assets
Current assets - cash and investments
Liabilities
Current liabilities - accrued annual leave
Long -term accrued annual leave
Total liabilities
297,064
72,153
224,911
297,064
116
Exhibit M -6
CITY OF SEWARD
Compensated Annual Leave Internal Service Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2005
Operating revenues - interfund changes
Operating expenses - salaries and benefits
Earnings from operations
Transfers in
Change in net assets
Beginning net assets
Adjustment resulting from creating internal service fund
Ending net assets
265,275
265,275
252,297
252,297
252,297
117
Exhibit M -7
CITY OF SEWARD
Compensated Annual Leave Internal Service Fund
Statement of Cash Flows
Year Ended December 31, 2005
Cash flows from operating activities:
Receipts from interfund charges $ 265,275
Payments to employees (220,508
Net cash flows from operating activities 44,767
Cash flows from noncapital financing activities -
transfers in 252,297
Net increase in cash and investments 297,064
Beginning cash and investments -
Ending cash and investments $ 297,064
Reconciliation of earnings from operations to net cash
provided by operating activities:
Earnings from operations
Adjustments to reconcile earnings from operations
to net cash flows from operating activities - increase
in accrued annual leave
Net cash flows from operating activities
44,767
44,767
118
Exhibit N -1
CITY OF SEWARD
Teen Council Agency Fund
Schedule of Changes in Assets and Liabilities
Year Ended December 31, 2005
Balance at
January 1,
2005 Additions Deletions
Assets
Cash and investments
Liabilities
Accounts payable
Due to Teen Council
Total liabilities
Balance at
December 31,
2005
27,375 21,298 20,214 28,459
1,611 - 419 1,192
25,764 21,717 20,214 27,267
27,375 21,717 20,633 28,459
119
Exhibit 0-1
CITY OF SEWARD
Schedule of Capital Assets
December 31, 2005
With Comparative Amounts for 2004)
Capital assets:
Land and land rights
2005 2004
Buildings
Improvements other than buildings
Equipment
Construction in progress
Total capital assets
4,568,299 4,278,299
62, 949, 091 62,368,433
14,83 8,372 14,827,055
6,760,226 6,224,548
2,695,857 2,433,931
91,811,845 90,132,266
121
Exhibit 0-2
CITY OF SEWARD
Schedule of Changes in Capital Assets
Year Ended December 31, 2005
90,132,266 1,990,136 310,557 91,811,845
122
Balance at Balance at
January 1,December 31,
2005 Additions Deletions 2005
Land and land improvements 4,278,299 290,000 4,568,299
Buildings 62,368,433 580,658 62,949,091
Improvements other than buildings 14,827,055 15,496 4,179 14,838,372
Equipment 6,224,548 535,678 6,760,226
Construction in progress 2,433,931 568,304 306,378 2,695,857
90,132,266 1,990,136 310,557 91,811,845
122
Exhibit 0-3
CITY OF SEWARD
Schedule of Capital Assets by Function and Activity
December 31, 2005
Improve -
Land and ments
Land Other than
Function and Activity Improvements Buildings Buildings Equipment Total
General government:
City Council/Mayor 54,323 54,323
City manager 48,025 48,025
City clerk 45,399 45,399
Finance 219,121 219,121
Community development 5,860 5,860
Municipal building 2,279,481 54,169 2,333,650
Alaska SeaLife Center 47,427,569 2,422,368 3,261,947 53,111,884
General services 1,479,080 8,005,937 35,169 9,520,186
Community and Senior Center 920,709 920,709
Non - departmental 4,568,299 68,868 4,637,167
Total general government 4,568,299 52,175,707 10,428,305 3,724,013 70,896,324
Public safety:
Police 194,293 194,293
Jail 19,281 19,281
Animal control 156,720 - -156,720
Fire 947,137 - 887,990 1,835,127
Building inspection 2,600 2,600
Seward Volunteer Ambulance Corp 6,300 6,300
Total public safety 1,103,857 - 1,110,464 2,214,321
Public works:
Streets 116,945 3,324,312 659,618 4,100,875
Building inspector 3,621 3,621
City shop 771,823 39,980 811,803
Total public works 888,768 3,324,312 701219 4,916.299
Hospital 7,757,029 54,375 1,034,959 8,846,363
Parks and recreation 297,064 1,018,580 106,827 1,422,471
Library 726,666 12,800 80,744 820,210
Total capital assets allocated
to functions 4,568,299 62,949,091 14,838,372 6,760,226 89,115,988
Construction in progress 2,695,857
Total capital assets 91,811,845
123
Exhibit 0-4
CITY OF SEWARD
Schedule of Changes in Capital Assets by Function and Activity
Year Ended December 31, 2005
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
Non - departmental
Total general government
Public safety:
Police
Jail
Animal control
Fire
Building inspection
Seward Volunteer Ambulance Corp
Total public safety
Public works:
Streets
Engineering
City shop
Total public works
Hospital
Parks and recreation
Library
Construction in progress
Capital
Assets at
January 1,
2005 Additions Deletions
Capital
Assets at
December 31,
2005
54,323 54,323
11,793 36,232 48,025
10,144 35,255 45,399
210,543 8,578 219,121
5,860 5,860
2,254,250 79,400 2,333,650
52,467,039 644,845 53,111,884
9,520,186 9,520,186
920,709 920,709
4,347,668 289,499 4,637,167
69,802,515 1,093,809 70,896,324
194,293 194,293
15,848 3,433 19,281
156,720 156,720
1,561,288 273,839 1,835,127
2,600 2,600
6,300 6,300
1,937,049 277,272 2,214,321
4,090,269 10,606 4,100,875
3,621 3,621
802,854 8,949 811,803
4,896,744 19,555 4,916,299
8,826,363 20,000 8,846,363
1,415,954 10,696 4,179 1,422,471
820,210 820,210
2,433,931 568,304 306,378 2,695,857
90,132,766 1,989,636 310,557 91,811,845
124
Exhibit P -I
Department of Agriculture
Fire Boat
NRCS Flood Mitigation/Engineering
Total Department of Agriculture
Department of Commerce
Harbor Impovement
Passed through the State of Alaska Department
of Administration -
Fisheries Revitalization Aid
Total Department of Commerce
Department of Interior
Passed through State of Alaska Department
of Natural Resources -
Seward Historic Trolley Tour
Department of Justice
COPS in Schools
Passed through State of Alaska Department
of Military and Veteran Affairs -
Homeland Security Equipment
Total Department of Justice
Department of Transportation
Passed through State of Alaska Department
of Transportation and Public Facilities:
Impaired Driving Enforcement
Click -it or Ticket
Total Department of Transportation
Environmental Protection Agency
Passed through State of Alaska Department
of Environmental Conservation -
Engineering of Water Tank and Line Extension
Denali Commission
Passed through State of Alaska Department
of Health and Social Services -
Seward Long -Tenn Care Facility
Department of Homeland Security
Passed through State of Alaska Department
of Military and Veterans Affairs:
Seward Transit FY02
Hazard Mitigation Plan
Total Department of Homeland Security
Total Federal Financial Assistance
CITY OF SEWARD
76911 297,400 23,104 800 23,781 123
90.100
Schedule of Expenditures of Federal Awards
1,600,000 4,860 4,860
Year Ended December 31, 2005
Catalog of
Federal January 1,December 3l,
Domestic Total 2005 Federal 2005
Assistance Grant Grant Receivable Share of Federal Receivable
Nu N umb er Award Deferr Expenditures Recei D( efertedl
10.664 PL 108 -108 $257,000 67,310)67,310
10.904 68- 0150 -9 -024 500,000 3,710 37,765 25,955 15,520
63.6001 105.075 25.955 15.520
11.300 07 -01 -05009 1,300,000 1,300,000 1,098,584 201,416
11.452 NA03NMF4520430 170,000 6( 0,000)170,000 110,000
60,000)1,470,000 1,208,584 201,416
15.904 3406 9,900 1,752 1,752
16.710 2002SHWX0646 125,000 6,168 36,519 31,290 11,397
16.008 SHSGP 1103 -21 700,154 352,772 316,039 36,733
6,168 389,291 347,329 48,130
20.600 50105 3,360 432 432
20.600 0503030P 1,730 1,730 1,730
2,162 2,162
66.606 76911 297,400 23,104 800 23,781 123
90.100 0143 -DC- 2004 -128 1,600,000 4,860 4,860
97.004 AK -37- X004 -00 200,000 - 200,000 200,000
97.039 HMPG - 1445.0003 11,250 4,139 4,139
4,139 200,000 204,139
88,437) 2,172,188 1,818,562 265,189
125
CITY OF SEWARD
Schedule of State Financial Assistance
Year Ended December 31, 2005
Grant Title
Department of Community and Economic Development
T -Dock & Bulkhead
Police Console
City Hall Facilities
Fire Hydrant Upgrade
Fisheries Resource Landing Tax
Total Department of Community and Economic
Development
Department of Education and Early Development
Library Grant
Library Grant
Equipment Upgrade - Interlibrary
Total Department of Education and Early
Development
Department of Military and Veteran Affairs
Hazard Mitigation Plan
Department of Transportation and Public Facilities
Harbor Expansion
Department of Environmental Conservation
Exhibit O -1
HMPG - 1445.0003
MOA
3,750 1,380 - 1,380
2,925,000 187,869 1,562,462 1,080,178 670,153
Engineering of Water Tank and Line Extension 76911
January 1,State
267
December 31,
41
Total 2005 Share of
1,240
2005
Grant Grant Receivable Expendi-State Receivable
Number Award Deferred tures Receipts D ferred
18,401 267
06 -DC -160 2,000,000 6,595 6,595
03 -DC -086 75,000 41,061 7,935 42,980 6,016
01 -MG -141 75,532 39,951 39,951
02 -MG -128 73,546 22,933 9,166 13,767
2005 9,620 9,620 9,620
Total Department of Revenue
41,061 87,034 61,766 66,329
Department of Administration
PLA -02- 770 -69 6,200 5,830 6,200 370)
PLA -05- 770 -68 6,250 81)81
ILC -05- 770 -152 2,412 2,412 2,412)
81)5,911 8,612 2,782)
HMPG - 1445.0003
MOA
3,750 1,380 - 1,380
2,925,000 187,869 1,562,462 1,080,178 670,153
Engineering of Water Tank and Line Extension 76911 99,200 7,701 267 7,927 41
Water Distribution System 96909 24,800 1,240 1,240
Water Tank Engineering 76910 94,600 9,460 9,460
Total Department of Environmental Conservation 18,401 267 7,927 10,741
Department of Revenue
Fish Tax 2005 314,304 314,304 314,304
Liquor Licenses 2004 10,850 10,850 10,850
Liquor Licenses 2005 4,300 4,300 4,300
Total Department of Revenue 329,454 329,454
Department of Administration
Senate Bill 46 -PERS Relief N/A 192,143 192,143 192,143
Total State Financial Assistance
Major program
248,630 2,177,271 1,681,460 744,441
126
CITY OF SEWARD
Notes to the Schedules of Expenditures of Federal Awards
and State Financial Assistance
Year Ended December 31, 2005
Basis of Presentation
The accompanying Schedules of Expenditures of Federal Awards and State Financial Assistance
include the grant activity of City of Seward and are presented on the modified accrual basis of
accounting. The information in the schedules is presented in accordance with the requirements of
OMB Circular A -133, Audits of States, Local Governments, and Non -Profit Organizations and the
State of Alaska Audit Guide and Compliance Supplement for State Single Audits.
127
CITY OF SEWARD
General Fund Revenues By Source
Last Ten Fiscal Periods *
Table 1
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.
a) Beginning 2003, GASB Statement No. 34 requires inter -fund payments -in- lieu -of -tax to be classified as transfers rather than revenues.
129
Property Licenses Inter-Charges Fines
Fiscal Assess-and govern-for and
Year Taxes (a)ments Permits mental Services Bails Interest Misc.Total
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 3,293,763 115,106 1,105,212 1,540,141 14,495 261,974 147,861 6,478,552
1999 3,584,389 144,003 1,021,209 1,475,581 17,347 214,140 218,597 6,675,266
1999 2,255,326 73,715 438,185 925,721 10,748 104,719 41,956 3,850,370
2000 3,953,139 139,871 984,231 2,179,832 14,786 438,005 247,461 7,957,325
2001 3,913,556 134,396 1,120,299 2,161,177 16,378 447,888 290,694 8,084,388
2002 4,045,976 169,979 976,268 1,739,071 12,279 160,000 771,073 7,918,846
2003 3,637,867 286,837 973,170 1,828,901 20,152 135,686 243,304 7,125,917
2004 4,201,664 254,613 829,535 1,824,270 22,857 160,536 104,685 7,398,160
2005 4,581,860 164,628 984,920 1,883,636 23,206 194,247 143,649 7,976,146
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.
a) Beginning 2003, GASB Statement No. 34 requires inter -fund payments -in- lieu -of -tax to be classified as transfers rather than revenues.
129
Table 1 A
CITY OF SEWARD
General Government Tax Revenues By Source
Last Ten Fiscal Periods *
Represents the six -month period from July 1, 1999 through December 31, 1999.
1) Effective July 1, 2003, sales tax rate increased from 3% to 4 %. 1% of the 4% sales tax is transferred
out of the General Fund to the Debt Service Fund to pay for hospital debt and capital infrastructure.
2) Beginning 2003, GASB 34 requires internal payments -in- lieu -of -tax to be classified as transfers rather
than revenues.
3) The hotel/motel room tax is 4 %.
4) Represents tax - related penalties and interest, and harbor parking assessment fee (discontinued after
FY96).
130
Payment Hotel/Motel
Fiscal Property Sales In Lieu Room
Year Tax Tax 1 of Tax (2)Tax 3 Other (4)Total
1996 514,588 1,619,606 693,626 53,461 42,059 2,923,340
1997 479,062 1,734,019 729,498 128,188 2,146 3,072,913
1998 518,788 1,820,230 799,978 148,211 6,556 3,293,763
1999 523,993 2,029,485 864,106 163,330 3,475 3,584,389
1999 515,544 1,197,288 419,108 122,248 1,138 2,255,326
2000 694,332 2,197,561 844,583 212,619 4,044 3,953,139
2001 663,747 2,165,586 872,749 209,458 2,016 3,913,556
2002 712,175 2,250,081 862,954 217,482 3,284 4,045,976
2003 670,297 2,671,613 77,586 215,145 3,226 3,637,867
2004 745,901 3,123,314 89,926 239,660 2,863 4,201,664
2005 787,503 3,411,283 96,614 284,656 1,804 4,581,860
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) Effective July 1, 2003, sales tax rate increased from 3% to 4 %. 1% of the 4% sales tax is transferred
out of the General Fund to the Debt Service Fund to pay for hospital debt and capital infrastructure.
2) Beginning 2003, GASB 34 requires internal payments -in- lieu -of -tax to be classified as transfers rather
than revenues.
3) The hotel/motel room tax is 4 %.
4) Represents tax - related penalties and interest, and harbor parking assessment fee (discontinued after
FY96).
130
CITY OF SEWARD
General Fund Expenditures By Function (1)
Last Ten Fiscal Periods *
Table 2
Fiscal General Public Public Parks and Debt
Year Government Safety Works Recreation Library Service Total
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
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
2001 1,735,231 1,984,845 1,152,948 789,615 258,832 857,979 6,779,450
2002 1,946,997 2,105,357 1,324,885 864,735 268,384 881,329 7,391,687
2003 1,793,779 2,249,385 1,377,601 1,003,993 275,839 1,026,027 7,726,624
2004 1,862,394 2,218,742 1,401,447 994,215 305,758 1,341,773 8,124,329
2005 2,511,257 2,372,994 1,425,348 1,056,489 313,348 1,362,681 9,042,117
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.
131
Table 3
CITY OF SEWARD
Property Tax Levies And Collections
Last Ten Fiscal Periods *
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: Kenai Peninsula Borough
132
Ratio of
Total Tax Delinquent
Total Current Percent Delinquent Total Collections Outstanding Taxes as
Fiscal Tax Tax of Levy Tax Tax As A %Delinquent A % Of
Year Levy Collections Collected Collections Collections Of Levy Taxes Total Levy
1996 505,034 447,110 88.50%66,044 513,153 101.60%68,253 13.50%
1997 489,187 438,512 89.60 2,294 440,807 90.10 83,389 17.10
1998 495,052 466,528 94.20 13,791 480,319 97.00 60,601 12.20
1999 505,323 488,883 96.70 32,515 521,398 103.20 40,930 8.10
1999 523,453 484,305 92.50 4,627 488,931 93.40 70,490 13.50
2000 606,781 571,261 94.20 41,770 613,031 101.00 64,241 10.60
2001 625,110 592,042 94.70 32,951 624,993 99.90 64,358 10.60
2002 646,424 618,447 95.70 32,036 650,483 100.60 60,299 9.30
2003 634,287 618,356 97.50 26,536 644,892 101.70 49,694 7.80
2004 666,848 650,763 97.60 18,302 669,065 100.30 47,477 7.10
2005 733,298 717,697 97.90 15,604 733,301 100.00 47,474 6.50
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: Kenai Peninsula Borough
132
CITY OF SEWARD
Assessed And Estimated Actual Value of Taxable Property
Last Ten Fiscal Periods *
Table 4
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.
A 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
133
Real Property Personal Property Total Property
Ratio of Total
Assessed Value
Estimated Estimated Estimated To Total Est.
Fiscal Assessed Actual Assessed Actual Assessed Actual Actual Value
Year Value Value Value Value Value Value
1996 105,272,150 113,853,300 58,875,732 77,447,000 164,147,882 191,300,300 85.81%
1997 108,318,979 117,443,100 50,476,044 70,537,400 158,795,023 187,980,500 84.47%
1998 106,196,750 117,506,400 49,253,008 67,755,600 155,449,758 185,262,000 83.91%
1999 106,918,000 114,049,300 52,852,159 70,534,400 159,770,159 184,583,700 86.56%
A 1999 113,464,200 124,730,000 58,163,405 72,987,600 171,627,605 197,717,600 86.80%
2000 154,991,200 167,589,200 55,354,065 71,952,600 210,345,265 239,541,800 87.81%
2001 152,839,700 172,127,800 57,901,379 77,274,400 210,741,079 249,402,200 84.50%
2002 157,214,800 175,990,700 57,383,564 77,702,100 214,598,364 253,692,800 84.60%
2003 159,864,700 175,842,600 56,833,535 69,146,300 216,698,235 244,988,900 88.50%
2004 163,163,200 191,098,900 60,038,915 79,244,100 223,202,115 270,343,000 82.60%
2005 178,133,000 198,141,000 69,039,838 87,242,600 247,172,838 285,383,600 86.61%
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.
A 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
133
Table 5
CITY OF SEWARD
Property Tax Rates
Direct and Overlapping Governments
Last Ten Fiscal Years
Per $1,000 of Assessed Value)
Fiscal Flood
Year City Borough (1)KPCC (2)Service 3 Total
1996 3.00 8.30 0.04 0.00 11.34
1997 3.12 8.30 0.08 0.00 11.5
1998 3.12 8.00 0.08 0.00 11.2
1999 3.12 8.00 0.10 0.00 11.22
2000 3.12 7.50 0.10 0.00 10.72
2001 3.12 7.00 0.10 0.00 10.22
2002 3.12 6.50 0.10 0.00 9.72
2003 3.12 6.50 0.10 0.00 9.72
2004 3.12 6.50 0.10 0.50 10.22
2005 3.12 6.70 0.10 0.50 10.42
1) Includes Kenai Peninsula Borough only
2) Kenai Peninsula Community College
3) Seward -Bear Creek Flood Service Area created effective 2004
Source: "2004 Situations and Prospects of the Kenai Peninsula Borough" and Kenai Peninsula
Borough Fiscal Year 2006 Budget
134
Table 6
CITY OF SEWARD
Special Assessment Billings and Collections
Last Ten Fiscal Periods *
Fiscal
Year
1996
1997
1998
1999
1999
2000
2001
2002
2003
2004
2005
Special
Assessment
Billints
18,368
1,111
1,273
1,106
32,102
24,372
20,745
20,202
17,705
16,147
Special
Assessment
Collections (1)
524
2,175
3,182
3,138
47,246
49,652
27,371
51,131
30,779
24,685
Total
Outstanding
Assessments
272,190
94,395
91,127
87,989
85,357
395,539
260,530
231,172
181,794
151,015
132,159
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 pre - payments, current payments, and past due payments.
135
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 *
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.
Amounts expressed in thousands.
1) Alaska Department of Labor and Workforce Development population estimates
2) From table 4 (expressed in thousands)
3) Amount does not include revenue bonds
Source: State of Alaska
Kenai Peninsula Borough
Table 7
136
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
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
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
2001 2,759 210,741 10,775 2,651 8,123 3.85 2,944
2002 2,754 214,598 9,680 1,989 7,690 3.58 2,793
2003 2,745 216,698 8,610 1,387 7,223 3.33 2,631
2004 2,540 223,202 9,055 665 7,070 3.16 2,783
2005 2,540 247,173 6,870 521 6,349 2.56 2,499
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.
Amounts expressed in thousands.
1) Alaska Department of Labor and Workforce Development population estimates
2) From table 4 (expressed in thousands)
3) Amount does not include revenue bonds
Source: State of Alaska
Kenai Peninsula Borough
Table 7
136
Table 8
CITY OF SEWARD
Legal Debt Margin
December 31, 2005
No debt limit mandated by law.
137
Table 8A
CITY OF SEWARD
Computation of Direct And Overlapping Bonded Debt
General Obligation Bonds
December 31, 2005
Jurisdiction
Direct:
City of Seward
Overlapping:
Kenai Peninsula Borough
Total
Net General
Obligation Percentage Amount
Bonded Debt Applicable To Applicable To
Outstanding City of Seward City of Seward
6,348,571 (1)
23,839,000 (3)
30.187.571
100.00% 6,348,571
6.27% (2) 1,494,705
7.843.276
1) Excluding general obligation bonds reported in the Enterprise Funds.
2) Based on the ratio of City of Seward assessed value (real and personal property = $247,172,838) to total
assessed value of the Kenai Peninsula Borough ($3,938,183,540). Source: "2005 Alaska Taxable ", State of Alaska,
p.41, and Kenai Peninsula Borough main and supplemental tax rolls.
3) Source: Kenai Peninsula Borough finance department.
138
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 *
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) 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.
IF919
Ratio of
Total Total Debt Service to
Fiscal Debt General General
Year Principal Interest Service (1)Expenditures (2)Expenditures
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
1999 318,240 251,818 570,058 3,458,351 16.48
2000 507,340 333,657 840,997 6,342,573 13.26
2001 390,005 467,974 857,979 6,779,450 12.66
2002 496,723 384,606 881,329 7,391,687 11.92
2003 527,612 498,415 1,026,027 7,726,624 13.28
2004 955,591 386,182 1,341,773 8,124,329 16.52
2005 800,927 380,662 1,181,589 9,042,117 13.06
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) 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.
IF919
Table 10
CITY OF SEWARD
Revenue Bond Coverage
Electric Enterprise Fund
Last Ten Fiscal Periods
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.
140
Net Debt Service Requirements (3)
Revenue
Fiscal Gross Operating Available for
Year Revenues(1)Expenses(2)Debt Service Principal Interest Total Coverage (4)
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
2001 6,937,500 4,479,770 2,457,730 130,000 163,120 293,120 8.38
2002 6,903,078 4,636,527 2,266,551 140,000 153,198 293,198 7.73
2003 6,715,607 4,417,052 2,298,555 145,000 144,536 289,536 7.94
2004 7,003,400 5,065,958 1,937,442 155,000 137,184 292,184 6.63
2005 7,542,541 5,539,190 2,003,351 165,000 129,181 294,181 6.81
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.
140
Table 10A
CITY OF SEWARD
Revenue Bond Coverage
Harbor Enterprise Fund
Last Ten Fiscal Periods (5)
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.
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 Harbor Enterprise Fund revenue bonds prior to 2001.
141
Net Debt Service Requirements (3)
Revenue
Fiscal Gross Operating Available for
Year Revenues(1)Expenses(2)Debt Service Principal Interest Total Coverage (4)
2001 1,811,896 1,132,855 679,041 132,098 132,098 5.14
2002 1,752,202 1,214,763 537,439 90,000 158,518 248,518 2.16
2003 1,837,517 1,192,187 645,330 90,000 153,568 243,568 2.65
2004 1,864,318 1,149,701 714,617 95,000 148,618 243,618 2.93
2005 2,002,229 1,310,211 692,018 105,000 150,542 255,542 2.71
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.
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 Harbor Enterprise Fund revenue bonds prior to 2001.
141
Table 11
CITY OF SEWARD
Property Value, Construction and Bank Deposits
Last Ten Fiscal Periods *
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) Estimated actual value from Table 4
Source: Construction Information - City of Seward Engineering Department
Local Banks - First National Bank of Anchorage and Wells Fargo
142
Commercial Residential
Construction Construction
Total Real Number Number
Fiscal Property of of Bank
Year Value (1)Permits Value Permits Value Deposits
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
1999 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
2001 172,127,800 27 1,922,767 21 794,214 46,527,000
2002 175,990,700 31 4,888,627 31 883,708 42,577,128
2003 175,842,600 34 6,611,765 25 1,453,898 47,679,000
2004 191,098,900 29 15,080,750 28 2,645,400 54,006,361
2005 198,141,000 21 888,820 33 1,974,323 56,467,873
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) Estimated actual value from Table 4
Source: Construction Information - City of Seward Engineering Department
Local Banks - First National Bank of Anchorage and Wells Fargo
142
Table 12
CITY OF SEWARD
Principal Taxpayers
December 31, 2005
FY05 Percent of
Assessed Total Assessed
Taxpayer Type of Business Valuation(1) Valuation (2)
Leirer Enterprises -
Steve and Carol Leirer Real Estate/Leasing $8,542,000 3.5%
Carr - Gottstein Grocery 6,893,078 2.8
Icicle Seafoods Seafood Processing 5,667,015 2.3
Seward Terminal, Inc.Coal Export 4,861,038 2.0
General Communication, Inc.Communications 4,704,829 1.9
Shoreside Petroleum, Inc.Petroleum Products 4,081,199 1.7
Hotel Edgewater Hotel/Gift Shop 3,010,596 1.3
Pacific Park Real Estate / Housing 2,930,700 1.2
Afognak Logging - Albert Schafer Construction/ Logging 2,694,930 1.1
Telalaska Communications 2,543,277 1.0
1) Includes real and personal property based on 2005 tax rolls. Source: Kenai Peninsula Borough
EDD.
2) Total assessed valuation (real and personal property) is $247,172,838. Source: Kenai Peninsula
Borough Assessing Dept.
143
Table 13
CITY OF SEWARD
Miscellaneous Statistic
December 31, 2005
Date of Incorporation June 1, 1912
Class Home Rule
Form of Government Council/Manager
Number of regular employees:
Non - Exempt 66
Exempt 17
Area, Square Miles 22
Population 2,540
Qualified Voters 1,853
City of Seward facilities and services:
Lane miles of streets 44.14
Number of street lights 235
Building Permits Issued 54
Recreation and Culture:
Number of Parks & Playgrounds 19
Number of Libraries 1
Number of Volumes 32,053
Fire Protection:
Number of Stations 2
Number of Paid Firefighters and Officers 2
Number of Volunteers 36
Number of Calls Answered 181
Fire Rating (ISO)4/9
Police. Protection:
Number of Stations 1
Number of Officers 10
Number of law violations:
Physical arrests 458
Traffic violations 1,406
Parking violations 56
Sewerage System:
Number of treatment plants 2
Number of service connections 887
Daily average treatment in gallons 870,000
Maximum daily capacity of treatment plant in gallons 1,200,000
144
Table 13, continued
CITY OF SEWARD
Miscellaneous Statistic, continued
Water System:
Number of service connections 917
Number of fire hydrants 197
Daily average consumption in gallons 1,300,000
Maximum daily capacity of plant in gallons 5,500,000
Electric Distribution System:
Number of service connections 2,831
Miles of distribution lines 63
Miles of transmission lines 42
Number of sub - stations 3
Total number of kilowatt sales 54,786,754
Harbor and Port Operations:
Registered vessels 4,344
Number on waiting list for boat. slips 471
Number of boat lifts 382
General cargo tonnage 35,318
Fish product tonnage 21,300
Petroleum (gallons)2,569,060
Facilities and services not included in the reporting entity:
Education
Elementary School:
Number of Students Enrolled 289
Number of Teachers 30.62
Middle School:
Number of Students Enrolled 108
Number of Teachers 11.08
High School:
Number of Students Enrolled 235
Number of Teachers 25.51
Alaska Vocational Technical Center:
Number of Students Served Annually 1249
Number of Teachers 30
Hospital
Providence Seward Medical and Care Center:
Number of patient beds (4 primary care; 2 swing beds; 43 long -term)6
Number of employees:
Non - Exempt 103
Exempt 7
145
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 Internal Control Over Financial Reporting and on Compliance and
Other Matters 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 financial statements of the governmental activities, the business -type activities,
each major fund, and the aggregate remaining fund information of City of Seward, as of and for the year
ended December 31, 2005, which collectively comprise the City's basic financial statements as listed in
the table of contents and have issued our report thereon dated March 24, 2006. We conducted our audit
in accordance with auditing standards generally accepted in the United States of America and the
standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States.
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 an opinion 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
reportable 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 caused by error or fraud 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.
Compliance and Other Matters
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 grant agreements, 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 or other matters that are required to be reported
under Government Auditing Standards.
This report is intended solely for the information of the City of Seward's management, Honorable Mayor
and City Council, and appropriate federal agencies, and is not intended to be and should not be used by
anyone other than these specified parties.
March 24, 2006
RSM McGladrey Network 147
An Independently Owned Member Offices: Anchorage, Kenai 8c Seward
MIKUNDA, COTTRELL & CO.
A Professional Corporation
CERTIFIED PUBLIC ACCOUNTANTS Sc 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
Progxam 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, 2005. City of Seward's major federal programs are identified in the summary of
auditor's results section of the accompanying schedule of findings and questioned 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 auditing standards generally accepted
in the United States of America; 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 the City of Seward's compliance
with those requirements.
In our opinion, the City of Seward complied, in
referred to above that are applicable to each of it s
December 31, 2005.
all material respects, with the requirements
major federal programs for the year ended
RSM McGladrey Network 148
An Independently Owned Member Offices: Anchorage, Kenai & Seward
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
reportable 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 caused by error or fraud 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 the City of Seward's management, Honorable
Mayor and City Council, and appropriate federal agencies, and is not intended to be and should not
be used by anyone other than these specified parties.
March 24, 2006
e
CITY OF SEWARD
Schedule of Findings and Questioned Costs
Year Ended December 31, 2005
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? _ yes x none reported
Noncompliance material to financial
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? _ yes x none reported
Type of auditor's report issued on compliance for
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 programs:
Agency CFDA Number Prog am
Department of Justice 16.008 Homeland Security Equipment
Department of Commerce 11.300 Harbor Improvement
Dollar threshold used to distinguish between Type A and B programs
Low -risk auditee
II. Financial Statement Findings
III. Federal Awards Findings and Questioned Costs
300,000
Yes
None noted
None noted
150
CITY OF SEWARD
Summary Schedule of Prior Audit Findings
Year Ended December 31, 2005
There were no prior year audit findings.
151
CITY OF SEWARD
Corrective Action Plan
Year Ended December 31, 2005
There are no current year findings; therefore no corrective action plan is required.
152
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 Internal Control Over Financial Reporting and on Compliance and
Other Matters 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 financial statements of the governmental activities, the business -type activities,
each major fund, and the aggregate remaining fund information of City of Seward, as of and for the
year ended December 31, 2005, which collectively comprise the City's basic financial statements as
listed in the table of contents and have issued our report thereon dated March 24, 2006. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States.
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 opinions on
the financial statements and not to provide an opinion 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 reportable 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 caused by
error or fraud 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.
Compliance and Other Matters
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 grant agreements, 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 or other
matters that are required to be reported under Government Auditing Standards.
This report is intended solely for the information and use 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.
March 24, 2006
RSM McGladrey Network 153
An Independently Owned Member Offices: Anchorage, Kenai & Seward
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 Supplement for 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, 2005. City
of Seward's major state programs are identified in the accompanying schedule of state financial
assistance. Compliance with laws, regulations, contracts and grants, general requirements, and
specific requirements applicable to each of its major state 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 auditing standards generally accepted in
the United States of America; 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, 2005.
RSM McGladrey Network 154
An Independently Owned Member Offices: Anchorage, Kenai & Seward
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 of Alaska 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 reportable
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 caused by error or fraud 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 and use 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.
March 24, 2006
155