HomeMy WebLinkAbout2007CAFRCITY OF SEWARD
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
Fiscal Year
Ended December 31, 2007
Clerk (2)
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
of the
CITY OF SEW.ARD, ALASKA
For the F iscai Year Ended
December 31, 2007
Clark Corbridge
MAYOR
Phillip Oates
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 -VI
Letter of Transmittal VII -IX
Certificate of Achievement for Excellence in Financial Reporting X
List of Principal Officials XI
Seward Citizens — Organizational Chart XH
PART II - FINANCIAL SECTION Exhibit Page
Independent Auditor's Report 1 -2
Management's Discussion and Analysis 3 -14
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 Governmental Funds Balance
Sheet to Statement of Net Assets B -2 19
Statement of Revenues, Expenditures and Change in
Fund Balances (Deficit)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 -53
Supplementary Information
Nonmajor Governmental Funds:
Combining Balance Sheet E -1 56
Combining Statement of Revenues, Expenditures and
Change in Fund Balances (Deficit) E -2 57
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CITY OF SEWARD
Comprehensive Annual Financial Report
Table of Contents, continued
PART II - FINANCIAL SECTION, continued Exhibit Page
Supplementary Information, continued
Combining Statement of Revenues, Expenses and
Nonmajor Enterprise Funds:
Combining Statement of Net Assets F -1 58
Combining Statement of Revenues, Expenses and
Combining Statement of Cash Flows
Change in Net Assets F -2 59
Combining Statement of Cash Flows F -3 60 -61
Internal Service Funds:
Combining Statement of Net Assets G -1 62
Combining Statement of Revenues, Expenses and
Change in Net Assets G -2 63
Combining Statement of Cash Flows G -3 64
General Fund:
K -1 79
Balance Sheet H -1 66
Schedule of Revenues, Expenditures and
K -2 80
Change in Fund Balance — Budget and Actual H -2 67 -72
Special Revenue Funds:
Combining Balance Sheet I -1 74
Combining Statement of Revenues, Expenditures and
Change in Fund Balances (Deficit) I -2 75
Debt Service Fund:
Balance Sheet J -1 77
Statement of Revenues, Expenditures and
and Change in Fund Balance J -2 78
Capital Project Funds:
Combining Balance Sheet K -1 79
Combining Statement of Revenues, Expenditures and
Change in Fund Balances K -2 80
Enterprise Funds:
Electric:
Statement of Net Assets L -1 84 -85
Statement of Revenues, Expenses and
Change in Net Assets L -2 86
Statement of Cash Flows L -3 87
Schedule of Operating Expenses L -4 88
Schedule of Composition of Net Assets L -5 89
Schedule of Electric Capital Projects L -6 90
II
CITY OF SEWARD
Comprehensive Annual Financial Report
Table of Contents, continued
PART II - FINANCIAL SECTION, continued Exhibit Paee
Supplementary Information, continued
Enterprise Funds, continued:
L -13 97
Water:
L -14 98
Statement of Net Assets L -7 91
Statement of Revenues, Expenses
L -16 100
and Change in Net Assets L -8 92
Statement of Cash Flows L -9 93
Schedule of Composition of Net Assets L -10 94
Combining Schedule of Water Capital Projects L -11 95
Wastewater:
Statement of Net Assets L -12 96
Statement of Revenues, Expenses
and Change in Net Assets L -13 97
Statement of Cash Flows L -14 98
Schedule of Composition of Net Assets L -15 99
Schedule of Wastewater Capital Projects L -16 100
Harbor:
Statement of Net Assets L -17 101
Statement of Revenues, Expenses
and Change in Net Assets L -18 102
Statement of Cash Flows L -19 103
Schedule of Composition of Net Assets L -20 104
Combining Schedule of Harbor Capital Projects L -21 105
Seward Marine Industrial Center:
Statement of Net Assets L -22 106
Statement of Revenues, Expenses and
Change in Net Assets L -23 107
Statement of Cash Flows L -24 108
Schedule of Composition of Net Assets L -25 109
Parking Revenue:
Statement of Net Assets L -26 110
Statement of Revenues, Expenses and
Change in Net Assets L -27 111
Statement of Cash Flows L -28 112
Schedule of Composition of Net Assets L -29 113
III
CITY OF SEWARD
Comprehensive Annual Financial Report
Table of Contents, continued
PART II - FINANCIAL SECTION, continued Exhibit Page
Supplementary Information, continued
Changes in Net Assets 135 -136
Internal Service Funds:
Fund Balances of Governmental Funds 137
Motor Pool:
Changes in Fund Balances of Governmental Funds 138
Statement of Net Assets M -1 116
Statement of Revenues, Expenses and
General Fund Tax Revenues by Source 140
Change in Net Assets M -2 117
Statement of Cash Flows M -3 118
Schedule of Composition of Net Assets M -4 119
Compensated Annual Leave:
Statement of Net Assets M -5 120
Statement of Revenues, Expenses and
Change in Net Assets M -6 121
Statement of Cash Flows M -7 122
Teen Council Agency Fund -
Schedule of Changes in Assets and Liabilities N -1 123
Capital Assets:
Schedule of Capital Assets 0-1 125
Schedule of Changes in Capital Assets 0-2 126
Schedule of Capital Assets
by Function and Activity 0-3 127
Schedule of Changes in Capital Assets
by Function and Activity 0-4 128
Schedule of Expenditures of Federal Awards P -1 129
Schedule of State Financial Assistance Q -1 130
Note to the Schedules of Expenditures of Federal Awards and
State Financial Assistance 131
PART III — STATISTICAL SECTION
Table 1 Net Assets by Component 134
Table 2 Changes in Net Assets 135 -136
Table 3 Fund Balances of Governmental Funds 137
Table 4 Changes in Fund Balances of Governmental Funds 138
Table 5 General Fund Revenues by Source 139
Table 6 General Fund Tax Revenues by Source 140
Table 7 Property Tax Rates 141
IV
CITY OF SEWARD
Comprehensive Annual Financial Report
Table of Contents, continued
PART III —STATISTICAL SECTION, continued Page
Table 8 Property Tax Levies and Collections 142
Table 9 Assessed and Estimated Actual Value of Taxable Property 143
Table 10 Principal Property Taxpayers 144
Table 11 Principal Taxable Sales by Line of Business 145
Table 12 Ratios of Outstanding Debt by Type 146
Table 13 Ratio of Net General Obligation Bonded Debt to Assessed Value
and Net General Obligation Bonded Debt per Capita 147
Table 14 Computation of Direct and Overlapping Bonded Debts 148
Table 15 Legal Debt Margin 149
Table 16 Ratio of Annual Debt Service Expenditures for General
Obligation Debt to Total General Fund Expenditures 150
Table 17 Revenue Bond Coverage — Electric Enterprise Fund 151
Table 18 Revenue Bond Coverage — Harbor Enterprise Fund 152
Table 19 Demographic and Economic Statistics 153
Table 20 Seward Area Principal Employers 154
Table 21 Full -Time Equivalent Employees by Fund 155
Table 22 Operating Indicators by Function 156
Table 23 Capital Asset Statistics By Function 157
Table 24 Property Value, Construction, and Bank Deposits 158
Table 25 Miscellaneous Statistics 159
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 161 -162
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 -133 163 -164
Schedule of Findings and Questioned Costs 165
Summary Schedule of Prior Audit Findings 166
Corrective Action Plan 167
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CITY OF SEWARD
Comprehensive Annual Financial Report
Table of Contents, continued
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 168 -169
Independent Auditor's Report on Compliance with Requirements
Applicable to Each Major Program and on Internal Control Over
Compliance in Accordance with State of Alaska Audit
Guide and Compliance Supplement for State Single Audits 170 -171
VI
July 25, 2008
To the Citizens of the City of Seward:
It is with great pleasure that we present the City of Seward Comprehensive Annual Financial —
i
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Report for the fiscal year ended December 31, 2007. 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
y
accountants. Responsibility for the accuracy of the data and the completeness and fairness of [f
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, 2007, 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 auditor to report not only on the fair presentation of the financial statements, but also on 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 theindependentauditors.
Profile of the City of Seward
The City was incorporated on June 1, 1912, and became a first -class City under Alaska Statute's home rule provisions (ASS
29.04.010) upon adoption of the City Charter by a referendum vote 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
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
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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 approximately 5.0 %. After adjusting for inflation, sales tax revenues continue to grow slightly, based on an
increase in taxable sales. The current economic climate is hampered by rising fuel costs and economic uncertainty. Property
tax revenues have leveled off on an inflation- adjusted basis, with the most recent property valuation assessments completed in
2000. The Kenai Peninsula Borough is expected to update property assessments in 2008. Bed tax revenues have fluctuated
over recent years with declines from 2001 to 2003, and increases since 2004. Growth is expected to continue due to
continued strength in visitor numbers, as well as the expansion and construction of new visitor accommodations.
The City's top ten property 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 retail sales, real
estate, seafood processing, petroleum products, hotel/motel, communications, and tourism. Seward's top ten sales tax lines of
business show that 40.3% of sales taxes are generated from retail trade, followed by 33.8% from accommodations and food
service, followed by services at 5.9 %. 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
employers include Icicle Seafoods, Safeway, and CIRI Alaska tourism. Seward continues to invest in infrastructure to
encourage economic development (harbor, parking, and prison expansion; harbor improvements; long -term care facility
construction), and in addition to local government investment, is seeing plans for facility upgrades and expansion by AVTEC,
the forest and park service, the Alaska Railroad, and the prison.
Financial Condition
Over the past five years, municipal governments in Alaska have been adversely impacted by a significant reduction in State
funding. Since 1991, annual State funding cuts to Seward have averaged approximately $525,000 per year. Seward's
increased retail sales have enabled the City to absorb a portion of these funding reductions without increasing property tax
rates. The City of Seward has only increased its property mill rate by 0.12 mills over the past two decades (equal to $12 on a
home valued at $100,000). Approximately 65% of property located within Seward is owned by non - taxable government or
non- profit entities, giving Seward a very low tax base on which to generate property tax.
The recent rise in oil prices is having a positive impact on State revenues and, at least in the short run, is reversing the trend of
diminished State funding, resulting in higher State funding for revenue sharing, retirement system relief, and capital projects.
The increased State funding and the passage of recent legislation has eliminated the City's $6.5 million in retirement system
unfunded liabilities. Additional funding for capital projects will pay for levee repairs and capital projects which would have
otherwise strained City reserves. The City is now challenged to rebuild its inadequate General Fund reserves, and to address
the growing list of deferred maintenance needs and near -term anticipated hospital financial losses. General Fund
undesignated fund balance is currently equal to approximately 1.8 months' expenditures and transfers -out, with Council
guidance requiring between three and six months' reserves. The time has come to focus on developing a long -range financial
plan to ensure that the future impact of today's decisions are taken into consideration before committing to additional projects
or new services that will increase costs to future taxpayers.
Major Projects
The City is completing upgrades to the harbor floats, upland infrastructure, and docks, adding capacity, improving upland
restrooms, oil collection facilities and utilities, and improving boat lift services. A $27 million long -term care facility is being
constructed, with plans to expand the prison by 144 beds ($22.7 million) in the coming year, and to replace two aging electric
generators with a new building to house the generators and their controls. Plans for construction of Phase II of the North
Forest Acres levee /road project are underway, and this will protect Seward's residential and industrial areas from flooding
from Resurrection River and Japanese Creek.
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,
VIII
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 endingequitybalances.
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 to meet potential
insurance- related losses, and to support higher deductibles to minimiz 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). This system consists of three defined benefit Tiers, and one defined contribution Tier. The City has no
obligations in connection with employee benefits offered through these plans beyond its annual required payments to the
plans. The City has always paid its annual required contribution rates on time. The City anticipates future annual
contribution rates to be capped at. 22 %, based on recent action by the Alaska State legislature to transition from a single- agent,
multiple - employer plan, to a pooled retirement plan. This action is expected to bring stability to Seward's recent trend of
escalating retirement contribution rates. In addition, the transition to a pooled plan means that Seward's previous unfunded
pension liability of $6.5 million will be removed from the books, as the pooled plan addresses the liability within the rate
structure.
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, 2006. This is the thirteenth 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,
w \
Phillip OManager Kristin Erchinger, Finance D ector
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, 2006
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.
0 T,a - fTH
sc President
Executive Director
M
CITY OF SEWARD
LIST OF PRINCIPAL OFFICIALS
COUNCIL MEMBERS
Term Expires
Clark Corbridge Mayor 2009WillardDunhamCouncilMember2008JeanBardarsonCouncilMember2008LindaAmbergCouncilMember2008TomSmithCouncilMember2009BobValdattaCouncilMember2009BetsyKellarCouncilMember2009
ADMINISTRATION
Phillip Oates City ManagerKirstenVeselAssistantCity Manager
Kristin Erchinger Finance Director
Tim Barnum Manager of EIectric UtilityKariAndersonHarbormaster
Tom Clemons Chief of Police
David Squires Fire Chief
Karin Sturdy Parks & Recreation Director
Patty Linville Library Director
Bob Hicks Community Development 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. LegislativepowersoftheCityofSewardarevestedinacouncilconsistingofamayorandsixcouncilmembers. The mayor and each council member are elected from the city at large. The term ofofficeistwoyears. The appointed officers of the city include the city manager, city clerk, andthecityattorney. The city council generally meets on the second and fourth Mondays of eachmonthintheCityCouncilChamberslocatedintheCityHallBuildinglocatedat410AdamsStreetinSeward, Alaska.
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XII
CITY OF SEWARD
Organizational Chart
Citizens
Mayor &
Council
rBoards &City Manager City Clerk City
Commissions Attorney
Planning &
Port &
Commerce Electric Public
Utility Works
Historic
Preservation
Police Finance Engineering &Library
Building 1ri pection
Harbor Fire Community Parks &
Development Recreation
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Mikunda,
Cottrell & Co.,,ric.
Certified Public Accountants & Consultants
Independent Auditor's Report
Honorable Mayor and City Council
City of Seward, Alaska
RS M McGl dreg Network
An fnd"nde LIY Owed b'e'nber
Offices 'n Anchorage & Kenai
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, 2007 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. The financial statements of Providence Seward Medical Center were not audited
in accordance with Government Auditing Standards. 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,
2007, 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.
1
3601 "C" Street, Suite 600 • Anchorage, Alaska 99503 • (907) 278 -8878 • Fax (907) 278 -5779 • www.mcc- cpa.com
Honorable Mayor and City Council
City of Seward, Alaska
In accordance with Government Auditing Standards, we have also issued our report dated July 25, 2008
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.
Anchorage, Alaska
July 25, 2008
2
CITY OF SEWARD
Management's Discussion and Analysis
December 31, 2007
As management for the City of Seward, we hereby offer readers of the City's Comprehensive Annual
Financial Report this narrative overview and analysis of the financial activities of the City of Seward forthefiscalyearendedDecember31, 2007. 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 providesadditionalsummaryinformation.
FINANCIAL HIGHLIGHTS
The assets of the City of Seward exceed liabilities by $143,093,431 at December 31, 2007. Of
this amount, $123,456,830 represents investment in capital assets net of debt, $16,223 is
restricted for capital purposes, and the remainder of $19,620,378 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, capital replacement, or for other purposes asdeterminedbytheCityCouncil.
Excluding business -type activities, the assets of the primary government exceeded liabilities at
the December 31, 2007 by $63,041,900. Of this amount, $5,025,497 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.
The City's total net assets increased by $2,933,050. Governmental activities increased by477,831 and business -type activities increased by $2,455,219.
The City's governmental funds reported combined ending fund balances of $4,613,961,representing a decrease of $1,207,545 compared to the prior year. While $3,209,623 of the fund
balance is legally available for spending (unreserved fund balance), only $808,886 has notalreadybeenearmarkedforspecificpurposes. This reflects a significant decrease in availableundesignatedfundbalanceinthepastfewyears.
The total debt of the governmental activities decreased by $837,661 or 12.8 %. The total debt ofbusiness -type activities increased by $2,054,917 or 17.7 %, reflecting a water system notepayableof $2.65 million for replacement of the Third Avenue Water main.
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 fundstatements, and notes to the financial statements. In addition to the basic financial statements, thisreportalsocontainsotherrequiredsupplementaryinformation. The basic financial statements include
two types of statements reflecting different views of the City's financial activities:
1. 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 abroaderviewoftheCityasawholeinamannersimilartoprivate- sector business.2. Fund financial statements focus on specific areas of City operations and provide more detailthanthegovernment -wide statements. These statements are only slightly changed from thehistoricalfinancialreportingmodelusedbytheCity.
3
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 - businesslikeactivities, 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 of the City's 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, the timely investment in roads and infrastructure, and the level of maintenance funding that
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 toprivate- 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 otherfunctionsthatareintendedtorecoverallorasignificantportionoftheircoststhroughuserfeesand
charges (business -type activities). The governmental activities of the City of Seward include generalgovernment, public safety, public works, parks and recreation, library, hospital, and the Alaska SealifeCenter. The business -type activities of the City include harbor, marine industrial center, electric, water,
wastewater, and parking. The government -wide financial statements can be found on pages 16 -17 of
this report.
Fund Financial Statements
A fund is a grouping 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. ThefundsoftheCityofSewardaredividedintothreecategories: 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 spendableresources, 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.
However, because the focus of governmental funds is narrower 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.
4
The City of Seward maintains seventeen individual governmental funds. Information for the General
Fund is presented as 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 sixteen 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 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 same 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 84 -113
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 the governmental and business -type functions. As a result, its
activities have been allocated among both the governmental and business -type 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 116 -122 of this report.
Fiduciary Funds
Fiduciary funds account for resources held by the City in a trustee capacity, for the benefit of partiesoutsideofthegovernment. 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 City utilizes a single
fiduciary fund, the Teen Council Agency Fund, and data for that fund can be found on page 123 of this
report.
Notes to the Basic Financial Statements
The notes provide additional information essential to a complete understanding of the data provided in
the government -wide and fund financial statements. The notes can be found on pages 29 -53 of this
report.
Other Information
In addition to the basic financial statements and accompanying notes, this report presents certain
required supplementary information on the public employee's retirement system on pages 46 -49 of this
report.
5
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, 2007, the City's assets exceeded liabilities by $143,093,431. A significant portion of the City's net
assets (86 %) 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, 2007
Net assets:
Invested in capital assets,
net of related debt 56,663,397 58,016,403 64,759,803 65,440,427 121,423,200 123,456,830
Restricted - - - 16,223 - 16,223
Unrestricted 5,900,672 5,025,497 12,836,509 14,594,881 18,737,181 19,620,378
Total net assets $ 62.564.069 63.041.900 77.596.312 80.051,531 140.160.381 143.093.431
At the end of 2007, the City of Seward is able to report positive balances in all three categories of net
assets, both for the government as a whole, as well as for its separate governmental and business -type
activities.
I
Governmental Business -Type
Activities Activities Total
2006 2007 2006 2007 2006 2007
Current and other assets $8,022,921 6,888,741 16,709,133 17,849,126 24,732,054 24,737,867
Capital assets 62,078,576 62,566,577 76,116,813 78,808,308 138,195,389 141,374,885
Total assets 70,101,497 69,455,318 92,825,946 96,657,434 162,927,443 166,112,752
Long -term liabilities
outstanding 6,171,583 5,383,367 11,725,320 13,776,605 17,896,903 19,159,972
Other liabilities 1,365,845 1,030,051 3,504,314 2,829,298 4,870,159 3,859,349
Total liabilities 7,537,428 6,413,418 15,229,634 16,605,903 22,767,062 23,019,321
Net assets:
Invested in capital assets,
net of related debt 56,663,397 58,016,403 64,759,803 65,440,427 121,423,200 123,456,830
Restricted - - - 16,223 - 16,223
Unrestricted 5,900,672 5,025,497 12,836,509 14,594,881 18,737,181 19,620,378
Total net assets $ 62.564.069 63.041.900 77.596.312 80.051,531 140.160.381 143.093.431
At the end of 2007, the City of Seward is able to report positive balances in all three categories of net
assets, both for the government as a whole, as well as for its separate governmental and business -type
activities.
I
Statement of Activities
The City's total revenues and expenses for governmental and business -type activities are reflected in the
following table.
Table 2
Change in Net Assets
For the Years Ended December 31, 2007 and 2006
Total revenues 10,162,194 9,228,499 16,744,926 15,600,352 26,907,120 24,828,851
Expenses:
General government
Governmental Business -Type
1,161,765
Activities Activities Total
2,440,488
2007 2006 2007 2006 2007 2006
Revenues:
2,650,977 1,704,296
Parks, recreation, and
525,553)
Beginning net assets
Program revenues:
62,441,649 77,596,312 78,244,285 140,160,381
library 1,366,057 1,454,432
Charges for services 1,818,204 1,645,855 13,449,177 12,761,244 15,267,381 14,407,099
Operating grants /
interest 842,215 1,272,162
contributions 680,176 148,785 65,247 1,260,476 745,423 1,409,261
Capital grants /
515,835 1,578,315
Electric
contributions 1,459,744 2,124,245 2,578,739 928,554 4,038,483 3,052,799
General revenues:
813,245 859,799 813,245
Wastewater
Sales taxes 4,068,600 3,518,435 4,068,600 3,518,435
Property taxes 862,258 864,906 862,258 864,906
Payments in lieu of tax 76,609 77,714 76,609 77,714
Other 1,196,603 537,989 651,763 650,078 1,848,366 1,188,067
Total revenues 10,162,194 9,228,499 16,744,926 15,600,352 26,907,120 24,828,851
Expenses:
General government 1,161,765 2,158,969 1,161,765 2,158,969
Public safety 2,980,785 2,440,488 2,980,785 2,440,488
Public works 2,650,977 1,704,296 2,650,977 1,704,296
Parks, recreation, and
525,553)
Beginning net assets 62,564,069 62,441,649 77,596,312 78,244,285 140,160,381
library 1,366,057 1,454,432 1,366,057 1,454,432
Hospital and unallocated
80.051.531 77 5 6 312 143.093.431 140.160.381
interest 842,215 1,272,162 842,215 1,272,162
Alaska Sealife Center 1,672,365 1,578,315 515,835 1,578,315
Electric 8,029,054 9,195,187 8,029,054 9,195,187
Water 859,799 813,245 859,799 813,245
Wastewater 747,484 693,096 747,484 693,096
Harbor 2,457,216 2,648,290 2,457,216 2,648,290
Seward Marine Industrial
Center 1,076,730 1,278,774 1,076,730 1,278,774
Parking 129,6 117,150 129,623 117.150
Total expenses 10,674,164 10,608,662 13,299,906 14,745,742 23,974,070 25,354,404
Increase (decrease) in net
assets before transfers 511,970) (1,380,163)3,445,020 854,610 2,933,050 525,533)
Transfers 989,801 1,502,583 989, 801)j1,502,583
Increase (decrease) in net
assets 477,831 122,420 2,455,219 647,973) 2,933,050 525,553)
Beginning net assets 62,564,069 62,441,649 77,596,312 78,244,285 140,160,381 140,685,934
Ending net assets $63.041.900 62 4 69 80.051.531 77 5 6 312 143.093.431 140.160.381
7
Governmental Activities
Governmental activities increased the City of Seward's net assets by $477,831, accounting for 16.3% of
the total growth in net assets. The following items are of particular note:
Net assets would have experienced a decrease of $511,970 were it not for transfers in from other
funds.
Charges for services increased by 10.5 %, primarily due to higher allocated costs to the City's
enterprise funds.
Sales tax revenues increased by $550,165 or 15.6% from the prior year, due to higher retail and
construction taxable sales, as well as the policy change to taxing tours and lodging on a per -seat,
per -day basis.
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:
3,500,000 — - - -- - -- - - — - -- - - - - -
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
a
500,000 -
a e
Co
M Revenues Expenses
Business -Type Activities
Business -type activities increased the net assets of the City by $2,455,219, including adjustments for
Motor Pool Internal Service Fund activities. As is the case with governmental activities, a substantial
portion (82 %) of the net assets is invested in capital assets. The increase in net assets is comprised of
the following:
Net assets increased in the electric utility ($34,121), water utility ($89,458), and harbor
enterprise ($2,740,941), and decreased in the Seward Marine Industrial Center (- $466,115). The
non -major enterprise funds (including parking and wastewater) had a combined decrease in net
assets of $35,849.
Allocations of the Motor Pool Internal Service Fund to the business -type activities added
92,663 to net assets.
The electric utility experienced a reduction in expenses of nearly $1.2 million from the prior
year, because the prior year included disaster costs associated with an avalanche that took the
electric transmission line out of service for two weeks, requiring the utility to run on backup
diesel generators.
The increase in electric utility net assets of $34,121 comes despite transferring $1,015,717 to
other funds. The positive earnings from operations totaled $433,790, indicating that the electric
fund rates were sufficient to cover depreciation, prior to transfers to other funds. After payments
for debt service and other capital purchases, the electric utility ended the year with positive cash
flow of $23,073. However, no cash was invested in the depreciation reserve fund for the future
replacement of capital assets.
The net increase in water utility net assets of $89,458 is primarily due to positive earnings from
operations of $138,476, plus investment earnings of $159,048. Cash balances in the water
utility increased $894,080 primarily due to the issuance of long -term debt for the replacement of
the Third Avenue Water Main.
The net increase in harbor enterprise net assets of $2,740,941 is due primarily to capital
contributions from grants for the T -Dock and Bulkhead construction project, totaling $2.1
million. The earnings before contributions and transfers of $430,125 means the harbor would be
able to fund its depreciation if it did not have any long -term debt or contributions to other funds.
In 2007, long -term debt principal and interest payments totaled $697,677 and net transfers
between funds totaled $163,479. The harbor ended the year with a net decrease in cash of
1,234,377 due to draw -down of bond proceeds for construction activities, as well as a bond
refunding. Total cash stands at $3,931,563, but only $1,387,484 is unrestricted.
The net decrease in Seward Marine Industrial Center net assets of $466,115 is due entirely to
depreciation costs ($642,691). With a loss from operations of $738,606, this Fund is unable to
fund any of its depreciation. When considering debt payments of $161,240, this fund requires
subsidies from other funds to cover all of its annual debt costs, as well as a portion of its
operating costs. In 2007, the General Fund transferred $364,734 to this Fund to cover the
deficit.
The non -major funds experienced the following: net increase in parking enterprise net assets of
35,623 and an increase in cash of $46,942, and a net decrease in wastewater enterprise net
assets of $71,472 and an increase in cash of $101,962.
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 operations. 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.
E
At the end of the year, the City of Seward's governmental funds reported combined ending fund
balances of $4,613,961. Of this amount, $1,404,338 has been legally reserved (reserved fund
balance) for inventory and prepaid expenses ($458,860) and to meet debt service requirements
945,478). In addition, the General Fund must legally be able to cover the net deficits in the capital
project and special revenue funds, totaling $350,347. This leaves a balance of $2,859,276 in the
General Fund. However, the General Fund's fund balance must be able to meet unforeseen needs
and emergencies, as well as future spending needs. Of the remaining balance, amounts have been
set aside for hospital cash flow purposes ($500,000), working capital to pay routine payables and
payroll ($1,500,000), and insurance reserves ($126,418), leaving only $732,858 of undesignated
fund balance available. Industry standards suggest maintaining undesignated fund balance reserves
equal to between three and six months' worth of expenditures and transfers -out to other funds, and
in the City of Seward's case, there is slightly less than one month's reserves available. In the City's
case, an adequate level of fund balance is between $2.73 million and $5.46 million, requiring
approximately $2 million to achieve the three month level of undesignated fund balance.
Fund balances in the governmental funds decreased by $1,207,545, representing a net decrease in
the General Fund of $15,824, a net decrease of $1,104,693 in the Long -Term Care Project, and a net
decrease of $87,028 in the remaining non -major governmental funds. This overall net decrease in
fund balance is due to the following:
General Fund revenues were $701,023 higher than expenditures, but after net transfers of
716,847), fund balance declined by $15,824. Although General Fund revenues came in
372,574 (4.0 %) higher than budget, and expenditures came in $434,046 (4.9 %) lower than
budget, the net transfers -out results in diminished fund balance, following the 2006 decrease
in fund balance of $1,846,079. This level of fund balance has a significant adverse impact
on the ability of the General Fund to meet unforeseen needs, emergencies, deficits in other
funds, capital infrastructure repairs, and anticipated short -term hospital losses.
Special revenue fund projects experienced a net increase in fund balance of $475,911 due to
grant- related cost recoveries for the year, especially for flooding.
The debt service fund experienced a net increase in fund balance of $283,691. This fund
receives income from a one percent sales tax dedicated to healthcare - related capital
expenditures, and investment income. In 2007, sales tax and investment income exceeded
debt principal and interest payments by $283,691, resulting in an ending fund balance of
945,478. This is the first year since the bonds were issued in 1995, that reserves reached
the City's goal of meeting or exceeding the single highest year debt service payments
878,500) on the outstanding bonds.
Capital projects experienced a net decrease in fund balance of $1,951,323 primarily due to
costs of planning and design of the long -term care replacement facility.
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 $78.9 million, with $65.4 million invested in capital assets net of related debt,
leaving unrestricted net assets of approximately $13.4 million, and restricted assets of $16,223. Of the
unrestricted net assets, $5.2 million is in restricted cash (bond reserve funds, bond proceeds, etc.) and
not available for appropriation, and current liabilities total $3.6 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.
10
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 pool
and heavy equipment 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 incur
costs as one -time expenses in the year of the vehicle /equipment purchase. The balance of cash in the
motor pool at year -end is $691,100, versus the balance in 2005 of $1,663,993. This primarily reflects
the loan of $1,250,000 of cash from the Motor Pool Internal Service Fund to the General Fund to pay
the Seward General Hospital PERS liability. This leaves little resources available to replace the $3
million worth of heavy equipment and vehicles. The Compensated Annual Leave Fund accumulates
cash reserves to pay annual leave cash -outs for governmental funds. The balance of cash in this fund at
the end of 2007 is $328,276.
General Fund Budgetary Highlights
There were a number of modifications to the budget during the year, as described below:
Overall, projected revenues were upward adjusted $25,608 during the year. This reflects
a budget reclass of miscellaneous revenues ($131,100 reduction) to charges for services
130,700 increase), and an increase in intergovernmental revenues of $26,008 (public
safety and library grants).
Expenditures were increased by $32,850 to account for miscellaneous library and public
safety grants.
Transfers to other funds were increased by a total of $790,472 during the year, reflecting
the following: for fire air compressor; and $50,093 in additional sales tax revenues to the
hospital debt service fund.
General Fund revenues were $701,023 more than expenditures, and after transfers between funds were
accounted for, there was a net decrease in fund balance of $15,824. Best practices in governmental
finance recommend conservative revenue projections, especially in communities overly dependent on
single revenue sources. Since more than 45% of Seward's revenues are dependent on tourism, it is
prudent to be cautious when projecting revenues, to avoid unforeseen economic downturns and
eliminate the temptation to grow expenditures to meet higher projected revenues.
In 2007, General Fund revenues came in $372,574 (4.1%) higher than budgeted with the primary
variances due to the following: $343,470 higher sales tax; $198,412 unanticipated State energy
assistance; and $125,066 higher investment earnings. Revenues were $789,289 (9.1 %) higher than in
2006, due primarily to sales tax ($550,165), State assistance ($198,412), and administrative fees
294,488).
Due to continuing efforts to control costs and achieve efficiencies, and in an effort to rebuild reserves,
General Fund expenditures came in under budget by $434,046. The largest savings came from delayed
debt payments ($112,839), lower- than - estimated retirement costs ($141,862), and personnel cost savings
295,236) due to delayed hirings and replacement of retirees with entry-level personnel. When
compared to 2006, expenditures decreased $1,284,628, due to the prior year payoff of hospital
retirement liabilities.
11
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
As of December 31, 2007, the City had $141,374,885 invested in capital assets net of accumulated
depreciation, representing an overall increase of $3,179,496 from the previous year.
Table 3
City of Seward Capital Assets
in thousands, net of depreciation)
Land and improvements
Buildings
Improvements other
than buildings
Machinery and equipment
Construction in progress
Governmental Business -Type
Business -Type
Activities Activities Total
Activities
2006 2007 2006 2007 2006 2007
2006
5,399 4,568 17,484 15,744 22,883 20,312
47,336 48,133 886 750 48,222 48,883
2,272 2,029 52,740 42,320 55,012 44,349
4,153 4,295 4,884 5,457 9,037 9,752
3,407 3,053 2,814 11,846 6,221 14,899
Total net capital assets $ 62,078 7L. 114 141 75 138.195
Additional information regarding the City of Seward's capital assets can be found in Footnote 4 on
pages 38 -39.
Long -term Debt
As of December 31, 2006, the City had total debt outstanding of $18,134,033. Of this amount,
5,950,000 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, community
center building, and the North SMIC dock. An additional $10,590,000 represents revenue bonds backed
by operating revenues from the City harbor ($8.51 million) and electric ($2.08 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.
Table 4
City of Seward Outstanding Debt
in thousands)
Further detail regarding the City's long -term outstanding debt can be found on pages 40 -44.
12
Governmental Business -Type
Activities Activities Total
2006 2007 2006 2007 2006 2007
General obligation bonds 4,738 5,576 222 374 4,960 5,950
Revenue bonds 10,175 10,590 10,175 10,590
Capital leases 109 185 109 185
Loans 3,008 411 3,008 411
Compensated absences
and net PO 833 756 266 241 1,099 997
Total outstanding debt 5 A.5 17 l 11,616 19.351 1 133
Further detail regarding the City's long -term outstanding debt can be found on pages 40 -44.
12
Economic Factors and Next Year's Budget and Rate
The City's 2008 budget was prepared with a 5% increase in harbor rates, an increase in parking permit
fees, a proposed increase in the sales tax cap from $500 to $1,000, and a proposed increase in the bed
tax rate from 4% to 6 %. However, since approving the budget, the City Council declined to impose the
increase in the sales tax cap and the bed tax, due to the recent economic slowdown and the significant
adverse impact of high oil prices on citizens and local businesses. What impact the higher gas prices are
likely to have on tourism is unknown, but at the very least, the economic slowdown is expected to have
an impact on Seward and its residents. To address these difficult economic times, the City
administration has begun a full -scale efficiency study aimed at every aspect of the organization, seeking
efficiencies to provide current services in the most cost - effective manner.
Despite the higher fuel prices, Seward's economy continues to benefit from strong retail sales and the
budget anticipates an increase in sales tax revenues. Sales tax revenues account for 41% of all General
Fund revenues, making the City susceptible to the volatility of taxable sales. The addition of more than
100 new boat slips in the Small Boat Harbor in 2007 is expected to encourage continued economic
growth, and some major public construction projects (long -term care facility construction, I and T Dock
project, prison expansion, AVTEC culinary arts facility) are expected to have a positive impact on the
local construction industry, helping to offset the decline of residential and commercial construction
resulting from a combination of high oil prices, spin -off commodity price increases, and the mortgage
loan crisis.
The City faces a number of challenges in the coming years. The rising costs of healthcare, fuel, and
personnel, coupled with a growing list of deferred maintenance projects and priority capital project
needs, will continue to challenge the City's available resources. The City's roads and sidewalks are in
need of significant repair, and grant funding is anticipated to cover some of those costs. On a positive
note, some of Seward's more recent challenges are reaching resolution. For example, the City's
unfunded PERS liability (which exceeds $6.5 million) will be eliminated when the State completes the
transition of the public employee retirement program from a single -agent multiple- employer plan, to a
pooled plan. In this case, Seward will no longer maintain an unfunded pension liability, and the current
liability will be written off the City's financial statements. In addition, higher oil prices have a positive
impact on the State's revenue stream, which is expected to result in restoration of some level of State
revenue sharing to communities, and the elimination of pension liabilities will have a direct positive
impact on taxpayers in the form of foregone property tax increases.
The biggest challenge facing the City's General Fund is the inadequate level of undesignated fund
balance of approximately $1.7 million, equal to only 1.9 months' worth of annual operating
expenditures and transfers to other funds. Given Seward's history of unforeseen events (such as floods
and avalanches), as well as the anticipated short -term hospital losses of up to $1 million per year for the
next two years, it is important to maintain and rebuild our reserves. In addition, for nearly a decade, the
City has failed to include capital spending in the annual budget, relying instead on unbudgeted
supplemental appropriations to fund capital needs. To maintain our financial health and resiliency, the
City must develop and implement a plan to rebuild General Fund reserves to meet unforeseen needs and
emergencies. In addition, a consistent revenue stream should be identified to fund ongoing capital
repairs and maintenance. Too many capital repairs are being deferred without adequate plans to address
the growing list of deferred maintenance items. And finally, there is a need to curb unanticipated draws
from the General Fund's fund balance.
These factors were considered in preparing the City's budget for 2008, and a long -term financial plan is
needed to develop viable solutions to these problems.
13
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, Attn: Finance Director, P.O. Box 167, Seward, Alaska 99664.
14
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 Change in Fund
Balances
Reconciliation of the Changes in Fund Balances of Governmental Funds to
Statement of Activities
General Fund - Statement of Revenues, Expenditures and Change in Fund Balance -
Budget and Actual
Proprietary Funds - Statement of Net Assets
Proprietary Funds - Statement of Revenues, Expenses and Change 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, 2007
Exhibit A -1
Component
Unit
Providence
Primary Government Seward
Governmental Business -type Medical
Assets Activities Activities Total Center
Cash and investments 6,983,258 7,857,083 14,840,341 287,000
Receivables, net of allowance
for doubtful accounts:
Taxes 506,466 506,466
Accounts 78,874 1,073,028 1,151,902 1,449,000
Assessments, due within one year 16,220 16,220
Grants and shared revenues 66,169 810,424 876,593
Accrued interest 220,945 220,945
Other 222,892 222,892 128,000
Prepaid items 443,260 9,950 453,210 53,000
Inventories 15,600 938,782 954,382
Restricted cash and investments 5,246,342 5,246,342 38,000
Deferred charges 142,163 142,163
Assessments, due after one year 106,411 106,411
Internal balances 1,425,831)1,425,831
Capital assets not being depreciated 8,805,911 20,297,404 29,103,315
Capital assets being depreciated 53,760,666 58,510,904 112,271,570 96,000
Total assets 69,455,318 96,657,434 166,112,752 2,051,000
Liabilities
Accounts payable 696,307 1,580,003 2,276,310 213,000
Accrued payroll and related liabilities 81,532 115,270 196,802 656,000
Accrued interest 119,330 55,431 174,761
Other accrued liabilities 96,782 935 97,717 1,095,000
Funds held in trust 9,140 9,140
Customer deposits 209,907 209,907
Unearned revenue 26,960 867,752 894,712
Noncurrent liabilities:
Due within one year:
Accrued leave 86,235 34,676 120,911
Notes payable 170,811 170,811
Bonds payable 721,874 583,127 1,305,001
Capital lease obligations 63,407 63,407 19,000
Due in more than one year:
Accrued leave 242,041 91,933 333,974
Notes payable 2,836,540 2,836,540
Bonds payable 4,015,781 9,814,218 13,829,999
Unamortized deferred loss on refunding 296,665)90,312)386,977)
Unamortized bond premium 195,660 195,660
Capital lease obligations 45,777 45,777 80,000
Net pension /OPEB obligation 504,917 139,952 644,869
Other liabilities 38,000
Total liabilities 6,413,418 16,605,903 23,019,321 2,101,000
Net Assets
Restricted for capital projects 16,223 16,223
Invested in capital assets, net of related debt 58,016,403 65,440,427 123,456,830
Unrestricted (deficit)5,025,497 14,594,881 19,620,378 50,000
Total net assets 63,041,900 80,051,531 143,093,431 50,000
Total liabilities and net assets 69,455,318 96,657,434 166,112,752 2,051,000
See accompanying notes to basic financial statements.
16
CITY OF SEWARD
Statement of Activities
Year Ended December 31, 2007
Activities:
Governmental:
General government
Public safety
Public works
Parks and recreation
Library
Hospital
Sea Life Center
Unallocated interest
Total governmental activities
4,068,600
862,258
343,162
76,609
Business -type:
Net (Expense) Revenue and
Electric 8,029,054 8,428,106 24,228 391,835 815,115 815,115
Water 859,799 996,633 28,965 11,879 177,678 177,678
Wastewater 747,484 800,168 2,181 27,688 82,553 82,553
Harbor 2,457,216 2,751,916 9,410 2,147,337 2,451,447 2,451,447
SMIC 1,076,730 290,221 463 786,046)786,046)
Parking 129,623 182,133
Charges for
52,510 52,510
Total business -type activities 13,299,906 13,449,177 65,247 2,578,739 2,793,257 2,793,257
Total primary government $23,974,070 15,267,381 745,423 4,038,483 6,716,040 2,793,257 3,922,783
Component Unit - Providence
Seward Medical Center $ 12,158,000 11,188,000
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
Transfers
Total general revenues and transfers
Changes in net assets
Net assets at beginning of year
Net assets (deficit) at end of year
See accompanying notes to basic financial statements.
17
4,068,600
862,258
343,162
76,609
538,799 - 538,799
314,642 651,763 966,405
989,801 (989,801 -
7,193,871 (338,038 6,855,833
Exhibit A
970,000
3,000
3,000
477,831 2,455,219 2,933,050 (967,000)
62,564,069 77,596,312 140,160,381 917,000
63,041,900 80,051,531 143,093,431 (50,000
Net (Expense) Revenue and
Program Revenues Changes in Net Assets
Component
Primary Government Unit
Fees,Providence
Fines &Operating Capital Business-Seward
Charges for Grants &Grants &Governmental type Medical
Expenses Services Contributions Contributions Activities Activities Total Center
1,161,765 400,074 86,685 80,325 594,681)594,681)
2,980,785 706,575 360 221,091 2,052,759)2,052,759)
2,650,977 111,756 579,429 1,959,792)1,959,792)
981,222 592,063 1,798 387,361)387,361)
384,835 7,736 13,702 363,397)363,397)
535,226 535,226)535,226)
1,672,365 1,156,530 515,835)515,835)
306,989 306,989 306,989
10,674,164 1,818,204 680,176 1,459,744 6,716,040 6,716,040
Net assets at beginning of year
Net assets (deficit) at end of year
See accompanying notes to basic financial statements.
17
4,068,600
862,258
343,162
76,609
538,799 - 538,799
314,642 651,763 966,405
989,801 (989,801 -
7,193,871 (338,038 6,855,833
Exhibit A
970,000
3,000
3,000
477,831 2,455,219 2,933,050 (967,000)
62,564,069 77,596,312 140,160,381 917,000
63,041,900 80,051,531 143,093,431 (50,000
CITY OF SEWARD
Governmental Funds
Balance Sheet
December 31, 2007
Exhibit B -1
Liabilities and Fund Balances
Liabilities:
Accounts payable 405,525 290,782
Total
Accrued payroll and related liabilities
Major Fund Nonmajor Governmental
Assets General Funds Funds
Cash and investments 4,722,889 1,240,993 5,963,882
Receivables, net of allowance for doubtful accounts:
9,140 9,140
Taxes 506,466 506,466
Accounts 78,874 78,874
Grants and shared revenues 71 66,098 66,169
Accrued interest 148,482 148,482
Prepaid items 443,260 443,260
Inventory 15,600 15,600
Due from other funds 420,701 420,701
Total assets 6,336,343 1,307,091 7,643,434
Liabilities and Fund Balances
Liabilities:
Accounts payable 405,525 290,782 696,307
Accrued payroll and related liabilities 81,532 81,532
Accrued liabilities 96,782 96,782
Accrued interest 83,753 83,753
Funds held in trust 9,140 9,140
Due to other funds 420,701 420,701
Deferred revenue 45,494 477 45,971
Interfund loans payable 1,595,287 1,595,287
Total liabilities 2,317,513 711,960 3,029,473
Fund balances:
Reserved:
Inventory and prepaids 458,860 458,860
Debt service 945,478 945,478
Unreserved:
Designated:
Working capital 1,500,000 1,500,000
Insurance 126,418 126,418
Hospital line of credit 500,000 500,000
Capital Project Funds - capital improvements 274,319 274,319
Undesignated, reported in:
General Fund 1,433,552 1,433,552
Special Revenue Funds (deficit)34,649)34,649)
Capital Project Funds (deficit)590,017 590,017
Total fund balances 4,018,830 595,131 4,613,961
Total liabilities and fund balances 6,336,343 1,307,091 7,643,434
See accompanying notes to basic financial statements.
18
CITY OF SEWARD
Reconciliation of Governmental Funds Balance Sheet
to Statement of Net Assets
December 31, 2007
Exhibit B -2
Total fund balances for governmental funds $ 4,613,961
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 $ 5,398,928
Buildings 63,422,243
Improvements other than buildings 15,357,686
Machinery and equipment 8,451,450
Construction in progress 3,406,983
Accumulated depreciation (34,626,993
Total capital assets 61,410,297
Other long -term assets are not available to pay for current period
expenditures and therefore are deferred in the funds. 19,011
An internal service fund is used by the City to charge the cost
of vehicles and heavy equipment to individual funds. The
net assets of the internal service fund attributable to
governmental activities is included in the governmental
column on the Statement of Net Assets. 2,041,632
An internal service fund is used by the City to hold cash for
the future payment of accrued leave. 328,276
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 (4,737,655)
Accrued interest on bonds (34,191)
Capital leases payable (62,903)
Net pension/OPEB obligation (504,917)
Accrued leave (328,276)
Unamortized deferred loss on refunding 296,665
Total long term liabilities (5,371,277
Total net assets of governmental activities $ 63,041,900
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, 2007
Net change in fund balances
Beginning fund balances
Ending fund balances
15,824) (1,191,721) (1,207,545)
4,034,654 1,786,852 5,821,506
4,018,830 595,131 4,613,961
See accompanying notes to basic financial statements.
20
Total
Major Fund Nonmajor Governmental
General Funds Funds
Revenues:
Taxes 5,363,265 5,363,265
Licenses and permits 144,654 144,654
Intergovernmental 1,189,258 883,553 2,072,811
Charges for services 2,375,767 2,375,767
Fines and bails 17,611 17,611
Investment income 285,066 29,576 314,642
Miscellaneous 97,445 10,130 107,575
Total revenues 9,473,066 923,259 10,396,325
Expenditures:
Current:
General government 2,369,066 587,640 2,956,706
Public safety 2,787,079 224,841 3,011,920
Public works 1,541,085 1,137,408 2,678,493
Parks and recreation 1,068,993 15,009 1,084,002
Library 339,222 339,222
Hospital and long -term care 1,114,693 1,114,693
Debt service:
Principal payments 249,977 605,000 854,977
Retirement benefits 293,114 293,114
Interest and other costs 123,507 137,037 260,544
Total expenditures 8,772,043 3,821,628 12,593,671
Excess of revenues over
under) expenditures 701,023 2,898,369)2,197,346)
Other financing sources (uses):
Transfers in 1,441,438 2,189,878 3,631,316
Transfers out 2,158,285 483,230 2,641,515
Net other financing sources (uses)716,847 1,706,648 989,801
Net change in fund balances
Beginning fund balances
Ending fund balances
15,824) (1,191,721) (1,207,545)
4,034,654 1,786,852 5,821,506
4,018,830 595,131 4,613,961
See accompanying notes to basic financial statements.
20
Exhibit B -4
CITY OF SEWARD
Reconciliation of the Changes in Fund Balances of Governmental Funds
to Statement of Activities
Year Ended December 31, 2007
Net change in fund balances - total governmental funds $ (1,207,545)
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 capital outlays
of $3,134,956 exceeded depreciation of $2,420,984. 713,972
Revenues in the Statement of Activities that do not provide current
financial resources are not reported as revenues in the funds. This
is the decrease in other long -term assets. (13,546)
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 $ 838,491
Amortization of deferred loss on refunding (49,445)
Net pension /OPEB obligation increase (97,481)
Capital lease payments 16,486
Accrued interest on bonds decrease 3,000
Total long term liabilities 711,051
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
is included in the governmental column on the Statement of Activities. 273,899
Change in net assets of governmental activities $ 477,831
See accompanying notes to basic financial statements.
21
Exhibit B -5
CITY OF SEWARD
General Fund
Statement of Revenues, Expenditures
and Change in Fund Balance - Budget and Actual
Year Ended December 31, 2007
Other financing sources (uses):
Transfers in 1,427,329 1,427,329 1,441,438
Variance
Transfers out
Original Final
2,158,285
Positive
Net other financing sources (uses)
Budizet Budge Actual Negative
Revenues:
32,957 764,757 15,824)748,933
Taxes 4,962,730 4,962,730 5,363,265 400,535
Licenses and permits 199,322 199,322 144,654 54,668)
Intergovernmental 1,248,611 1,274,619 1,189,258 85,361)
Charges for services 2,233,171 2,363,871 2,375,767 11,896
Fines and bails 21,000 21,000 17,611 3,389)
Investment income 160,000 160,000 285,066 125,066
Miscellaneous 250,050 118,950 97,445 21,505
Total revenues 9,074,884 9,100,492 9,473,066 372,574
Expenditures:
Current:
General government 2,423,966 2,425,566 2,369,066 56,500
Public safety 2,946,522 2,968,675 2,787,079 181,596
Public works 1,488,422 1,494,539 1,541,085 46,546)
Parks and recreation 1,117,348 1,117,348 1,068,993 48,355
Library 359,436 362,416 339,222 23,194
Debt service:
Principal payments 362,815 362,816 249,977 112,839
Retirement benefits 434,976 434,976 293,114 141,862
Interest and other costs 39,754 39,753 123,507 83,754
Total expenditures 9,173,239 9,206,089 8,772,043 434,046
Excess of revenues over
under) expenditures 98,355)105,597)701,023 806,620
Other financing sources (uses):
Transfers in 1,427,329 1,427,329 1,441,438 14,109
Transfers out 1,296,017 2,086,489 2,158,285 71,796
Net other financing sources (uses)131,312 659,160 716,847 57,687
Net change in fund balance 32,957 764,757 15,824)748,933
Beginning fund balance 4,034,654
Ending fund balance 4,018,830
See accompanying notes to basic financial statements.
22
CITY OF SEWARD
Proprietary Funds
Statement of Net Assets
December 31, 2007
Exhibit C -I
Liabilities and Net Assets
Current liabilities:
Accounts payable
Accrued payroll and related liabilities
Accrued interest
Current portion:
Accrued annual leave
Bonds payable
Notes payable
Capital lease obligation
Interfund loans payable
Customer deposits
Deferred revenue
Other accrued liabilities
Total current liabilities
Noncurrent liabilities, net of current portion:
Accrued annual leave
Bonds payable
Unamortized bond premium
Notes payable
Unamortized deferred loss on refunding
Interfund loans payable
Net pension /OPEB obligation
Total noncurrent liabilities
Total liabilities
Net assets:
Restricted for capital projects
Invested in capital assets, net of related debt
Unrestricted (deficit)
Total net assets
Total liabilities and net assets
Adjustment to reflect the consolidation of internal
service fund activities related to enterprise funds
Net assets of business -type activities
429,663 335,678 789,353
Enterprise Funds
13,247 1,580,003
16,614 3,249 90,492 1,279 3,636 115,270
Total Internal
47,452
Major Funds
55,431
Nonmajor Enterprise Service
Assets Electric Water Harbor SMIC Funds Funds Funds
Current assets:
583,127
114,071
Cash and investments 2,424,833 3,152,291 1,387,484 49,705 842,770 7,857,083 1,019,376
Receivables:
46,281
18,048 18,048
Accounts 787,447 74,627 170,793 31,065 74,102 1,138,034
Accrued interest
19,526
72,463
Assessments 5,534 6,578 4,108
935
16,220
Interfundloans 13,666
133,902
13,666 55,335
Grants 127,729 682,695
46,119 7,930
810,424
Other 222,892
7,965,000
222,892
Less allowance for doubtful accounts 35,435)3,358)22,879)
137,846
3,335)65,007)
195,660
Prepaid expenses 9,950
297,762
9,950
Inventory 892,476 46,306
90,312)
938,782
Total current assets 4,321,363 3,404,173 2,222,201 80,770 913,537 10,942,044 1,147,174
Noncurrent assets:
19,537 139,952
1,796,231 2,563,235 8,311,235
Restricted cash and investments 2,312,180 182,523 2,544,079 207,560 5,246,342
Assessments receivable 32,601 45,949 27,861 106,411
Deferred charges - unamortized debt issuance costs 39,234 102,929
16,223
142,163
Interfund loans, net of current portion 414,196 414,196 1,315,242
Property, plant and equipment:
3,265,387 2,722,072 47,345 1,061,737 13,393,760
23,298,274
Total capital assets not being depreciated 250,951 45,838 7,770,903 12,021,821 207,891 20,297,404
Total capital assets being depreciated 45,048,079 8,258,313 21,330,597 41,124,517 11,948,539 127,710,045 2,988,840
Less accumulated depreciation 26,394,395 3,231,913 7,958,051 25,072,855 6,541,927 69,199,141 1,832,560
Total noncurrent assets 21,702,846 5,300,710 23,818,318 28,073,483 5,822,063 84,717,420 2,471,522
Total assets 26,024,209 8,704,883 26,040,519 28,154,253 6,735,600 95,659,464 3,618.696
Liabilities and Net Assets
Current liabilities:
Accounts payable
Accrued payroll and related liabilities
Accrued interest
Current portion:
Accrued annual leave
Bonds payable
Notes payable
Capital lease obligation
Interfund loans payable
Customer deposits
Deferred revenue
Other accrued liabilities
Total current liabilities
Noncurrent liabilities, net of current portion:
Accrued annual leave
Bonds payable
Unamortized bond premium
Notes payable
Unamortized deferred loss on refunding
Interfund loans payable
Net pension /OPEB obligation
Total noncurrent liabilities
Total liabilities
Net assets:
Restricted for capital projects
Invested in capital assets, net of related debt
Unrestricted (deficit)
Total net assets
Total liabilities and net assets
Adjustment to reflect the consolidation of internal
service fund activities related to enterprise funds
Net assets of business -type activities
429,663 335,678 789,353 12,062 13,247 1,580,003
16,614 3,249 90,492 1,279 3,636 115,270
6,460 47,452 558 961 55,431 1,386
15,275 3,874 12,449 3,078 34,676 86,235
205,000 325,000 53,127 583,127
114,071 56,740 170,811
46,281
18,048 18,048
206,882 3,025 209,907
49,810 798,416 19,526 867,752
935 935
929,704 456,872 2,082,145 86,552 80,687 3,635,960 133,902
46,119 7,930 22,008 15,876 91,933 242,041
1,680,000 7,965,000 169,218 9,814,218
57,814 137,846 195,660
2,538,778 297,762 2,836,540
90,312)90,312)
185,103 185,103
12,298 16,527 91,590 19,537 139,952
1,796,231 2,563,235 8,311,235 169,218 333,175 13,173,094 242,041
2,725,935 3,020,107 10,393,380 255,770 413,862 16,809,054 375,943
16,223 16,223
17,001,055 2,419,389 12,908,844 27,851,138 5,260,001 65,440,427 1,109,999
6,297,219 3,265,387 2,722,072 47,345 1,061,737 13,393,760 2,132,754
23,298,274 5,684,776 15,647,139 27,898,483 6,321,738 78,850,410 3,242,753
26,024,209 8,704,883 26,040,519 28,154,253 6,735,600 3,618,696
1,201,121
80,051,531
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, 2007
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):
Intergovernmental
Investment income
Interest expense
Gain on disposition of capital assets
Other expenses
Net nonoperating revenues (expenses)
Earnings (loss) before contributions
and transfers
Capital contributions
Transfers in
Transfers out
Change in net assets
Beginning net assets
Exhibit C -2
391,835 11,879 2,147,337 - 27,688 2,578,739
464,387 364,734 - 829,121
1,015,717) (248,910) (3 00 , 908 ) (52,829 (200,558 (1,818,922
34,121 89,458 2,740,941 (466,115) (35,849) 2,362,556
23,264,153 5,595,318 12,906,198 28,364,598 6,357,587
Ending net assets $ 23,298,274 5,684,776 15,647,139 27,898,483 6,321,738
Adjustment to reflect the consolidation of internal
service fund activities related to enterprise funds 92,663
2,455,219Changeinnetassetsofbusiness -type activities
See accompanying notes to basic financial statements.
24
366,562
2,876,191
3,242,753
Enterprise Funds
Total Internal
Major Funds Nonmajor Enterprise Service
Electric Water Harbor SMIC Funds Funds Funds
8,428,106 996,633 2,751,916 290,221 982,301 13,449,177
802,399
8,428,106 996,633 2,751,916 290,221 982,301 13,449,177 802,399
116,166 256,240 759,556 77,761 271,437 1,481,160 309,579
4,471,935 318,944 543,843 111,228 203,957 5,649,907
2,063,354 184,426 169,443 197,147 130,978 2,745,348
1,342,861 98,547 620,741 642,691 285,524 2,990,364 225,971
7,994,316 858,157 2,093,583 1 891,896 12,866,779 535,550
433,790 138,476 658,333 738,606)90,405 582,398 266,849
24,228 28,965 9,410 463 2,181 65,247
281,001 159,048 153,097 8,026 50,591 651,763 101,468
80,369)390,715)47,903)6,156)525,143)4,055)
2,300
647 647
224,213 188,013 228,208 39,414 46,616 191,220 99,713
658,003 326,489 430,125 778,020)137,021 773,618 366,562
391,835 11,879 2,147,337 - 27,688 2,578,739
464,387 364,734 - 829,121
1,015,717) (248,910) (300 , 908 ) (52,829 (200,558 (1,818,922
34,121 89,458 2,740,941 (466,115) (35,849) 2,362,556
23,264,153 5,595,318 12,906,198 28,364,598 6,357,587
Ending net assets $ 23,298,274 5,684,776 15,647,139 27,898,483 6,321,738
Adjustment to reflect the consolidation of internal
service fund activities related to enterprise funds 92,663
2,455,219Changeinnetassetsofbusiness -type activities
See accompanying notes to basic financial statements.
24
366,562
2,876,191
3,242,753
CITY OF SEWARD
Proprietary Funds
Statement of Cash Flows
Year Ended December 31, 2007
Exhibit C -3
Cash flows from noncapital financing activities:
Transfers in 364,734 - 364,734
Transfers out (1,015,717) (248,910) (300,908) (52,829) (200,558) (1,818,922)
Noncapital intergovernmental revenues 21,220 25,805 - 47,025
Net cash flows from noncapital
financing activities (994,497 (223,105 (300,908 311,905 (200,558 (1,407,163
Cash flows from capital and related financing activities:
Advance refunding escrow deposit
281,001
Enterprise Funds
8,026
1,996,095)
651,763
Issuance of long term debt
Interfund loan receipts
2,555,094 2,000,423 4,555,517
Total Internal
195,000)
Major Funds
55,927)712,436)
Nonmajor Enterprise Service
Electric Water Harbor SMIC Funds Funds Funds
Cash flows from operating activities:
60,577)6,495,024)
567,058
Capital contributions received 507,535 73 1,545,199
Receipts from customers and users 8,281,479 1,010,443 2,901,266 292,507 987,011 13,472,706
Payments to suppliers 5,573,915)311,233)533,634)122,456)196,300)6,737,538)
464,387
Payments to employees 824,396)258,261)732,802)81,890)268,919)2,166,268)330,271)
Payments for interfund services used 671,422)184,426)169,443)197,147)130,978)1,353,416)
Receipts from interfund charges
2,608,963
802,399
Net cash flows from operating activities 1,211,746 256,523 1,465,387 108,986 390,814 3,215,484 472,128
Cash flows from noncapital financing activities:
Transfers in 364,734 - 364,734
Transfers out (1,015,717) (248,910) (300,908) (52,829) (200,558) (1,818,922)
Noncapital intergovernmental revenues 21,220 25,805 - 47,025
Net cash flows from noncapital
financing activities (994,497 (223,105 (300,908 311,905 (200,558 (1,407,163
Cash flows from capital and related financing activities:
Advance refunding escrow deposit
281,001
1,996,095)
8,026
1,996,095)
651,763
Issuance of long term debt
Interfund loan receipts
2,555,094 2,000,423 4,555,517
Principal payments on long -term debt 195,000)310,000) (151,509)55,927)712,436)59,473)
Interest payments on long -term debt 88,165)387,677) (9,731)6,156)491,729)4,699)
Acquisition of property, plant and equipment 729,811)1,853,553)3,851,083)60,577)6,495,024)
567,058
Capital contributions received 507,535 73 1,545,199 30,717 2,083,524
Proceeds from sale of capital assets 2,300
Capital transfers in from other funds
4,737,013 3,334,814
464,387 -
49,705
464,387
Interfund loan payments 17,107
Reconciliation of cash and investments
17,107
Net cash flows from capital and
to statement of net assets:
related financing activities 505,441 701,614 2,551,953 (161,240 91,943 2,608,963 61,872
Cash flows from investing activities:
Investment income received 281,001 159,048 153,097 8,026 50,591 651,763 57,121
Interfund loan receipts 30,264 30,264 99,681
Net cash flows from investing activities 311,265 159,048 153,097 8,026 50,591 682,027 156,802
Net increase(decrease)in cash and investments 23,073 894,080 1,234,377)49,705 148,904 118,615)567,058
Beginning cash and investments 4,713,940 2,440,734 5,165,940 901,426 13,222,040 452,318
Ending cash and investments 4,737,013 3,334,814 3,931,563 49,705 1,050.330 13,103,425 1,019,376
Reconciliation of cash and investments
to statement of net assets:
Current assets 2,424,833 3,152,291 1,387,484 49,705 842,770 7,857,083 1,019,376
Restricted assets 2,312,180 182,523 2,544,079 207,560 5,246,342
4,737,013 3,334,814 3,931,563 49,705 1,050,330 13,103,425 1,019,376
See accompanying notes to basic financial statements.
25
CITY OF SEWARD
Proprietary Funds
Statement of Cash Flows, continued
Reconciliation of earnings (loss) from
operations to net cash provided (used)
by operating activities:
Earnings (loss) from operations
Adjustments to reconcile earnings (loss)
from operations to net cash flows from
operating activities:
Depreciation
Amortization of debt issuance costs
Other nonoperating revenues
Noncash expense - PERS relief
Increase (decrease) in allowance for
doubtful accounts
Increase) decrease in assets:
Receivables
Prepaids
Inventory
Increase (decrease) in liabilities:
Accounts payable
Accrued payroll and related liabilities
Accrued annual leave
Customer deposits
Deferred revenue
Other accrued liabilities
Due to other funds
Net pension/OPEB obligation
Net cash flows from
operating activities
Exhibit C -3. continued
Enterprise Funds
Total Internal
Major Funds Nonmajor Enterprise Service
Electric Water Harbor SMIC Funds Funds Funds
433,790 138,476 658,333 (738,606) 90,405 582,398 266,849
1,342,861 98,547 620,741 642,691 285,524 2,990,364 225,971
4,904 5,929 2,410 13,243 -
647)647) -
3,008 3,160 9,410 463 2,181 18,222 -
18)689)1,395 1,265)577) -
143,120)14,499 28,001)686 2,950 152,986) -
9,950)9,950) -
382,935)2,454)385,389) -
49,147)10,165 4,300 7,682 7,657 19,343) -
13,829)5,347)26,787 4,592)3,126)107) -
25,105 3,662)24,344)316)3,217) (20,692)
9,483 3,025 12,508 -
12,972)175,956 1,600 164,584 -
20)20)
21,320)21,320)
5,213 3,828 14,901 3,779 27,721
1,211,746 256,523 1,465,387 (108,986 390,814 3,215,484 472,128
See accompanying notes to basic financial statements.
26
Exhibit D -1
CITY OF SEWARD
Fiduciary Funds
Statement of Fiduciary Net Assets
December 31, 2007
Teen
Council
Agency
Fund
Assets
Cash and investments
Liabilities
Accounts payable
Due to others
Total liabilities
See accompanying notes to basic financial statements.
27,412
1,627
25,785
27,412
27
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w
CITY OF SEWARD
Notes to Basic Financial Statements
December 31, 2007
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.
The City has evaluated the criteria used to determine the proper classification of a separate legal
entity as a component unit. While the City does not appoint the Board of the medical center, the
City can impose its will by terminating the management agreement with 90 days' written notice.
The City demonstrates financial benefit by ownership of the facility and its assets, and the entity has
operated for decades under City ownership. The City demonstrates financial burden by paying all
debt payments associated with the component unit, reflecting general obligation bonds which
obligate the full faith and credit of the City. The City pays for all capital costs of the facility and is
legally obligated to finance potential deficits of the component unit. Due to the strong fiscal
dependence and corresponding financial benefit and/or burden, it would be potentially misleading to
exclude the component unit from the City's books.
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.
Complete financial statements of Providence Seward Medical Center can be obtained from the
address below:
Providence Seward Medical Center
P.O. Box 365
Seward, AK 99664
29
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Summary of Significant Accounting Policies, continued
Government -Wide and Fund Financial Statements
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:
The government -wide financial statements (i.e., the statement of net assets and the statement of
activities) report information on all of the nonfiduciary activities of the primary government and its
component unit. 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.
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 all revenues, except reimbursement grants, to be available if
they are collected within 60 days after year end. Reimbursement grants are considered available if
they are collected within one year of the end of the current fiscal period. Expenditures generally are
recorded when a liability is incurred, as under accrual accounting. However, debt service
expenditures, as well as expenditures related to compensated absences are recorded only to the
extent they have matured.
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
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 received by the government.
The City reports the following major funds —
Major Governmental Funds -
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.
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.
31
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Summary of Sitznificant Accounting Policies, continued
Measurement Focus Basis of Accounting and Financial Statement Presentation, continued
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,
investment income, and State of Alaska entitlement revenues.
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
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.
32
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Summary of Simnificant Accounting Policies, continued
Cash and Cash Equivalents
For purposes of the statement of cash flows, the proprietary funds consider all cash and investments
to be cash and cash equivalents. The central treasury, which holds cash and investments, is used
essentially as a cash management pool by each fund.
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.
Receivables and Payables
Activity between funds that are representative of lending/borrowing 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."
33
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Summary of Sijznificant Accounting Policies, continued
Accrued Annual Leave
The City allows employees to accumulate earned but unused vacation and sick leave benefits. All
accrued leave is accrued when incurred in the government -wide, proprietary fund, and governmental
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.
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. As a result, there
are no outstanding encumbrances at December 31, 2007. Outstanding purchase orders, if any, at
December 31, are cancelled and new ones are issued in the subsequent year.
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.
2) Stewardship, Compliance and Accountability
Budgetary Accounting
An operating budget is adopted each fiscal year for the General Fund on the same modified accrual
basis used to reflect actual revenues and expenditures. Appropriations for this fund lapse at year -end
to the extent that they have not been expended. 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.
34
CITY OF SEWARD
Notes to Basic Financial Statements, continued
3) Cash and Investments
The City of Seward maintains 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 /from other funds."
At year -end, all of the City's bank deposits were either insured or collateralized with securities
held by the City's agent in the City's name.
Investments
City statutes authorize the City to investment in obligations of the U.S. Treasury and U.S.
agencies, bankers' acceptances, repurchase agreements, commercial paper issued by corporations
or businesses and having the highest rating of a nationally- recognized rating service 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. The City's investment policy does not specify a maximum
investment maturity, but the City generally invests funds for less than three years from the date of
purchase. The City has complied with its investment policy throughout the year. The City's
investments are recorded at fair market value.
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. On a monthly
basis the investments in the pool are reviewed for fair value by an independent pricing service.
The values of investments in the AML pool are approximately equal to 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, 2007:
Pooled Cash
Fiduciary Fund
and Investments Other Totals
Bank deposits $ (212,298)114,860 97,438)
Investments 19,963,015 248,518 20,211,533
19,750,717 363,378 20,114,095
Reconciliation of Deposit and Investment Balances
Government-Fiduciary Fund
Wide Statement of
Statement Assets and
of Net Assets Liabilities Totals
Cash and investments $ 15,122,216 27,412 15,149,628
Restricted cash and investments 4,964,467 4,964,467
20.086,683 27.412 20,114,095
35
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Cash and Investments, continued
Restricted Cash and Investments
The City maintains harbor and electric bond redemption and reserve accounts as required by
bond covenants. The balance at December 31, 2007 in the harbor bond reserves totaled
363,678, and in the electric bond reserves totaled $281,875, and are 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 $4,555,790 at December 31, 2007.
Custodial Risk
The fair value of the City's investments at year -end is shown below. GASB Statement 3
establishes categories as an indication of the level of custodial risk involved in the investments.
The AMLIP is uncategorized. All of the City's remaining investments are in the category of least
risk and include investments that are insured or registered in the City's name, or securities that
are held by the City or its agent in the City's name. All of the United States treasury bills,
treasury notes, and United States agency securities are held in custodial accounts in the U.S.
Bank and Bank of New York Trust Departments and are recorded in the City's name, in
accordance with safekeeping agreements. U.S. Bank and Bank of New York are not counter
parties to security transactions.
Interest Rate Risk
The fair value of the City's fixed - income investments fluctuate in response to changes in market
interest rates. Increases in prevailing interest rates generally translate into decreases in fair value
of those investments. Fair values of interest rate - sensitive instruments may be affected by the
creditworthiness of the issuer, prepayment options, relative values of alternative investments, the
liquidity of the instrument, and other general market conditions. The City manages interest rate
risk by allocating specific percentages of the portfolio over specified time periods, and generally
holds investments for less than five years, which minimizes the sensitivity of fair value to
changes in market interest rates. The City has no formal policy relating to a specific deposit or
interest rate risk.
Investment types and their maturities at December 31, 2007 are as follows:
061
Investment Maturities (in Years)
Fair Less than 1 to 5 Over
Investment Value 1 year years 5 years
U.S. government agencies 7,322,693 2,016,573 5,057,602 248,518
Repurchase agreements 3,173,765 3,173,765
Total subject to
interest rate risk 10,496,458 5.190,338 5.057,602 42 8.518
061
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Cash and Investments, continued
Investment Maturities (in Years)
Fair Less than 1 to 5 Over
Investment Value 1 year Years 5 years
Certificates of deposit $ 3,973,545
Pooled investments 5,671,976
Money market account 69,554
Total investments $ 20.211.533
Option Risk
Option risk is the risk that an investment's counterparty may exercise a right embedded in the
investment — an embedded option. The City invests in securities issued by US Government
Agencies that contain call provisions. The exercise of the call option by the counterparty occurs
during times of declining interest rates; therefore the City is exposed to the risk of having to
reinvest at a lower interest rate. In the table above, securities are categorized according to the
final maturity, regardless of call option dates. If call options were exercised at the next possible
call date, many of the callable securities would mature in less than one year.
Concentration Risk
The City's investment policy places no limit on the amount that can be invested in any one
issuer. More than 5% of the total portfolio is invested in securities issued by federal agencies, as
follows: the Federal Home Loan Bank (23 %), Federal National Mortgage Association (12 %),
and Federal Home Loan Mortgage Corporation (6 %). All of the U.S. Agency securities in the
portfolio at year -end are rated as Aaa by Moody's Investors Service and AAA by Standard and
Poor's.
Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the
holder of the investment. This is measured by the assignment of a rating by a nationally
recognized statistical rating organization. The investments in U.S. government agencies include
Federal National Mortgage Association, Federal Home Loan Bank, Federal Home Loan
Mortgage Corporation, Federal Farm Credit Bank, and U.S. Treasuries. All of the U.S.
government agencies investments are rated AAA by Standard and Poors.
The City's investment policy specifies the types of investments that can be purchased, in order to
limit credit risk. The City may invest in obligations of the United States government, its agencies
and instrumentalities; insured or collateralized certificates of deposit; savings accounts;
collateralized repurchase agreements; commercial paper maturing within nine months issued by
corporations having the highest rating of a national rating agency; bankers' acceptances; and the
State investment pool. Credit risk is mitigated by limiting the eligible investment options.
37
CITY OF SEWARD
Notes to Basic Financial Statements, continued
4) Capital Assets
Capital asset activity for the year ended December 31, 2007 was as follows:
Capital assets being depreciated:
Buildings
Balance Additions Deletions Balance
Improvements other than buildings
January 1,and and December 31,
Machinery and equipment
2007 Reclassifications Reclassifications 2007
Governmental activities
88,325,974 1,950,660 56,415 90,220,219
Capital assets not being depreciated:
Less accumulated depreciation for:
Land and land improvements 4,568,299 830,629 5,398,928
Construction in progress 3,053,316 1,898,385 1,544,718 3,406,983
Total assets not being depreciated 7,621,615 2,729,014 1,544,718 8,805,911
Capital assets being depreciated:
Buildings 62,680,654 741,589 63,422,243
Improvements other than buildings 14,854,565 503,121 15,357,686
Machinery and equipment 10,790,755 705,950 56,415 11,440,290
Total assets being depreciated 88,325,974 1,950,660 56,415 90,220,219
Less accumulated depreciation for:
Less accumulated depreciation for:
Buildings 14,547,544 1,538,992 16,086,536
Improvements other than buildings 12,825,925 260,009 13,085,934
Machinery and equipment 6,495,544 847,955 56,416 7,287,083
Total accumulated depreciation 33,869,013 2,646,956 56,416 36,459,553
Total capital assets being depreciated, net 54,456,961 6( 96,296 1)53,760,666
Governmental activity capital assets, net 62.078.576 2 03, 2.718 1.544,717 62,566.577
45,549
The ending balances include $2,988,840 and 1,832,560 of equipment cost and accumulated depreciation, respectively,
related to the Motor Pool Internal Service Fund.
Business -type capital assets, net 76.116.813
Business -type activities
14.215.106 78.808.308
Capital assets not being depreciated:
Land and land improvements 15,744,269 1,739,500 17,483,769
Construction in progress 11,845,749 5.137,443 14,169,557 2,813,635
Total assets not being depreciated 27,590,018 6,876,943 14,169,557 20,297,404
Capital assets being depreciated:
Buildings 4,655,795 219,100 4,874,895
Improvements other than buildings 99,559,785 12,317,029 171,423 111,705,391
Machinery and equipment 10,774,508 483,893 128,642 11,129,759
Total assets being depreciated 114,990,088 13,020,022 300,065 127,710,045
Less accumulated depreciation for:
Buildings 3,905,095 84,048 3,989,143
Improvements other than buildings 56,547,199 2,588,745 171,423 58,964,521
Machinery and equipment 6,010,999 317,571 83,093 6,245,477
Total accumulated depreciation 66,463,293 2,990,364 254,516 69,199,141
Total capital assets being depreciated, net 48,526,795 10,029,658 45,549 58,510,904
Business -type capital assets, net 76.116.813 16.906,601 14.215.106 78.808.308
go
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Capital Assets, continued
Depreciation expense was char to the functions as follows:
Business -tune activities
Electric
Depreciation Internal
Water 98,547
Excluding Service
279,214 279,214
Internal Fund Total
SMIC
Service Fund Allocation Depreciation
Governmental activities
6,310
Total business -type activities 2,990,364
General government 161,944 72,266 234,210
Public safety 120,478 38,007 158,485
Public works 114,644 99,571 214,215
Parks and recreation 68,828 16,127 84,955
Library 40,614 40,614
Hospital and long -term care 242,112 242,112
Sea Life Center 1,672,365 1,672,365
Total governmental activities 2,420,985 225,971 2,646,956
Business -tune activities
Electric 1,342,861 1,342,861
Water 98,547 98,547
Wastewater 279,214 279,214
Harbor 620,741 620,741
SMIC 642,691 642,691
Parking 6,310 6,310
Total business -type activities 2,990,364 2,990,364
Total depreciation expense 5,411.349 225971 5,637,320
5 ) Interfund Receivables, Payables, and Transfers
A schedule of interfund balances and transfers for the year ended December 31, 2007, follows:
Due from other funds -
Due to the General Fund from nonmajor
governmental funds to cover operating costs $ 420.701
Transfers:
From General Fund to:
SMIC Enterprise Fund for operating costs 364,734
Harbor Enterprise Fund for capital costs 233,141
Debt Service Fund for debt service costs 1,003,079
Nonmajor governmental funds for capital costs 557,331
Total transfers from General Fund 2,158,285
From nonmajor governmental funds to
nonmajor governmental funds for capital costs 483,230
39
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Interfund Receivables, Payables, and Transfers, continued
From Electric Enterprise Fund to:
General Fund for payment in lieu of taxes and other costs $ 919,412
Harbor Fund for capital costs 96,305
Total transfers from Electric Enterprise Fund 1,015,717
From Water Enterprise Fund to:
General Fund for payment in lieu of taxes and other costs 84,731
Harbor fund for capital costs 134,941
Nonmajor governmental funds for capital costs 29,238
Total transfers from Water Enterprise Fund 248,910
From Wastewater Enterprise Fund to:
General Fund for payment in lieu of taxes and other costs 68,987
Nonmajor governmental fund for capital costs 117,000
Total transfers from Wastewater Enterprise Fund 185,987
From Harbor Enterprise Fund to General Fund
for payment in lieu of taxes and other costs 300,908
From SNHC Enterprise Fund to General Fund
for payment in lieu of taxes and costs 52,829
From Parking Revenue Enterprise Fund to
General Fund for payment in lieu of taxes 14,571
Total transfers to other funds $ 4.460,437
6) Long -Term Debt
Bond Refunding
In 2007 the City issued $1,965,000 in Series 2007 -1 Harbor Refunding Bonds with interest rates of
4.0% to 5.0% to partially advance refund existing Harbor bonds in the amount of $1,875,000. The
new bonds were issued at a premium of $63,858 and after paying issuance and other costs of
29,152 the net proceeds were $1,999,706. The net proceeds from the issuance were deposited into
an irrevocable trust with an escrow agent to provide debt service on the old bonds. The advance
refunding met the requirements of an in- substance defeasance of a portion of the old bonds and
1,875,000 of bonds was removed from the City's Harbor Fund. The remaining liability on the old
bonds, in the amount of $635,000 will remain on the City's books until they are retired in 2011. At
December 31, 2007, $1,875,000 of the defeased bonds remain outstanding and payable by the
escrow agent.
As a result of the advance refunding, the City reduced its total outstanding debt service requirement
by $51,765 which resulted in an economic gain (difference between the net present value payments
on the old and new debt) of $61,453.
S111
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Long -Term Debt, continued
Loans Payable
The City entered into a loan agreement with the State of Alaska Department of Environmental
Conservation to assist with the costs of the 3rd Avenue water main. In 2007, the City drew $2,652,849
on the note. Repayment begins December 1, 2008 with interest at 2.5 %.
The following is a summary of long -term debt transactions of the City for the year ended December
31, 2007:
Balance Balance Due
January 1, December 31, Within
2007 Additions Retired 2007 One Year
Governmental activities
General obligation bonds:
5,150,000 2004 refunding hospital
bonds, due in annual installments of
640,000 to $840,000 plus interest
at 2.25% to 3.5% through April 1, 2013 $ 5,000,000 - 605,000 4,395,000 640,000
1,086,018 2003 refunding streets and
sidewalks bonds, due in semiannual
installments of $70,487 to $78,319
plus interest at 2.0% to 3.5% through
December 1, 2011 496,018 - 201,018 295,000 70,487
175,438 2003 refunding senior center
bonds, due in semiannual installments of
11,387 to $12,652 plus interest at 2.0%
to 3.5% through December 1, 2011 80,128 - 32,473 47,655 11,387
Fire equipment capital lease obligation
due in semiannual installments
of $9,690, including interest at
3.81% through May 1, 2011 79,389 - 16,486 62,903 17,126
Loader /grader capital lease obligation
due in semi - annual installments
of $32,086 including interest at
5.16% through July 25, 2008 105,754 - 59,473 46,281 46,281
Accrued annual leave 348,968 309,579 330,271 328,276 86,235
Net pension/OPEB obligation 407,436 779,995 682,514 504,917 -
Total governmental activities
long -term liabilities $ 6.517.693 1,089.57 1,927,235 5,680,032 871,516
Less unamortized deferred loss on refunding 29( 6,665
5.383.367
41
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Lonji-Term Debt, continued
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.
y1
Balance Balance Due
January 1, December 31, Within
Business -type activities 2007 Additions Retired 2007 One Year
General obligation bonds: $818,544
2003 refunding SMIC bonds, due
in semiannual installments of $53,127
to $59,030, plus interest at 2.0% to
3.5% through December 1, 2011 373,854 - 151,509 222,345 53,127
Revenue bonds:
4,500,000 2006 harbor revenue bonds,
due in annual installments of $145,000 to
330,000, plus interest at 4.0% to 6.0%
through June 1, 2026 4,500,000 - 135,000 4,365,000 145,000
3,000,000 2000 harbor revenue bonds,
due in annual installments of $120,000
to $140,000 plus interest at 5.25% to
5.5% through October 1, 2011 2,510,000 - 1,990,000 520,000 120,000
1,965,000 2007 refunding harbor
revenue bonds, due in annual installments
of $5,000 to $235,000, plus interest
at 4.0% to 5.0% through June 1, 2021 1,965,000 5,000 1,960,000 5,000
2,290,000 2005 refunding electric
revenue bonds, due in annual installments
of $205,000 to $275,000, plus interest
at 3.5% to 5.0% through June 1, 2015 2,080,000 - 195,000 1,885,000 205,000
1,500,000 2005 harbor revenue bonds,
due in annual installments of $55,000 to
110,000 plus interest at 3.5% to 5.0%
through June 1, 2025 1,500,000 - 55,000 1,445,000 55,000
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 10,658 - 1,333 9,325 1,333
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 399,771 - 54,594 345,177 55,407
y1
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Lona -Term Debt, continued
long -term liabilities $ 11.616.340 4.962.762 2,907,845 13,671,257 788.614
Less unamortized deferred loss on refunding (90,312)
Plus unamortized bond premium 195,660
13.776.605
Annual debt service requirements to maturity on the bonds, notes and capital leases follow:
General Oblieation Bonds
Year Ending
Balance
Business -tvpe Activities
Balance Due
Interest
January 1,
Principal
December 31,Within
Business -tvpe activities, continued 2007 Additions Retired 2007 One Year
2,652,849 water note payable to State of
59,827
2009 769,906 115,447
Alaska Department of Environmental
55,094 5,372 60,466
2010
Conservation, due in annual installments
92,456 912,362 55,094 3,719
of $169,490, including interest at 1.5%
2011 875,969 67,109 943,078
through December 1, 2027 2,652,849 2,652,849 114,071
Accrued annual leave 129,826 123,103 126,320 126,609 34,676
Net pension/OPEB obligation 112,231 221,810 194,089 139,952
Total business -type activities
231,467
4j33-655 460.049
long -term liabilities $ 11.616.340 4.962.762 2,907,845 13,671,257 788.614
Less unamortized deferred loss on refunding (90,312)
Plus unamortized bond premium 195,660
13.776.605
Annual debt service requirements to maturity on the bonds, notes and capital leases follow:
General Oblieation Bonds
Year Ending Governmental Activities Business -tvpe Activities
December 31,Principal Interest Total Principal Interest Total
2008 721,874 134,112 855,986 53,127 6,700 59,827
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 875,969 67,109 943,078 59,030 2,066 61,096
2012 840,000 38,500 878,500
2013 710,000 12,425 722,425
231,467
4j33-655 460.049 5,197,7 04 222,345 17.857 240.202
Revenue Bonds and Notes
Business -type Activities
Year Ending Revenue Bonds Notes Payable
December 31,Principal Interest Total Principal Interest Total
2008 530,000 448,140 978,140 170,811 60,736 231,547
2009 555,000 423,129 978,129 163,592 67,935 231,527
2010 580,000 396,692 976,692 167,086 64,422 231,508
2011 615,000 368,720 983,720 170,659 60,829 231,488
2012 635,000 338,940 973,940 174,313 57,154 231,467
2013 -2017 3,090,000 1,248,276 4,338,276 677,498 233,273 910,771
2018 -2022 2,610,000 634,978 3,244,978 695,968 151,485 847,453
2023 -2027 1,560,000 135,982 1,695,982 787,424 60,029 847,453
10,175,000 3.994,857 14,169,857 3,007,351 755,863 3.763,214
43
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Long -Term Debt, continued
Capital Leases
Year Ending Governmental Activities
December 31,Principal Interest Total
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
109.184 6.515 115.699
7) Revenue Bond Requirements
Certain covenants of the revenue bonds require establishment of bond redemption and reserve
accounts. The balances are reflected as restricted cash and investments at December 31, 2007 as
follows:
Harbor Enterprise Fund:
Harbor bond reserves 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. The bond coverage calculation is as follows:
Operating income $ 658,333
Add:
Depreciation 620,741
Investment Income 153,097
Available for debt service 1,432,171
Debt Service Requirement 851,527
Excess of revenue over requirement $ 580.644
Debt coverage 1.68
Electric Enterprise Fund:
Electric bond reserves 281,875
The Electric revenue bonds require that rates be maintained at a level that will produce net
revenues after certain adjustments, equal to 1.30 times the amount required each year to pay the
principal and interest. The bond coverage calculation is as follows:
44
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Revenue Bond Requirements, continued
Operating income $ 433,790
Add:
Depreciation 1,342,861
Investment Income 281,001
Available for debt service 2,057,652
Debt Service Requirement 281,875
Excess of revenue over requirement $ 1,775,777
Debt coverage 7.30
8) 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,
2007:
General Internal
Fund Service Fund
Machinery and equipment $ 117,800 373,044
Less accumulated depreciation 5( 0,486 (227,683)
Carrying value $ 67,314 145,361
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, 2007:
Year Ending General Internal
December 31,Fund Service Fund
2008 19,379 47,872
2009 19,379
2010 19,379
2011 9,690
Total minimum lease payments 67,827 47,872
Less interest portion 4,924)1,591
Present value of future minimum
lease payments 62,903 46,281
Less current portion (17,126) (46,281)
Long -term portion $ 45,777 -
45
CITY OF SEWARD
Notes to Basic Financial Statements, continued
9) Defined Benefit Pension Plan
The City participates in the Public Employees' Retirement System (PERS), an agent multiple
employer plan which covers eligible State and local government employees. The plan was
established and is administered by the State of Alaska to provide pension, postemployment
healthcare, death, and disability benefits. Benefit and contribution provisions are established by
State law and may be amended only by the State Legislature.
The plan is included in a comprehensive annual financial report that includes financial statements
and other required supplemental information. The report is available at the following address:
Department of Administration
Division of Retirement and Benefits
P.O. Box 110203
Juneau, Alaska 99811 -0203
Funding Policy
Employees are required to contribute 6.75% of their annual covered salary (3.95% for pension and
2.80% for healthcare). Peace officers and firefighters must contribute 7.50% (4.39% for pension
and 3.11% for healthcare). 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 postemployment healthcare
benefits when due, subject to an increase limitation. Through June 30, 2007, under State regulation,
employer rates cannot be increased by more than five percentage points annually, resulting in a
difference between the actuarially calculated rate and the State required pay -in rate. These
regulations were repealed effective July 1, 2008.
The City's contribution rates for PERS for the year ended December 31, 2007 follow:
January 1 - June 30
Adjusted Actuarial
Actual Required
Rate Rate
July 1 - December 31
Actuarial
Required
Rate
Pension 10.99% 14.23% 7.26%
Postemployment
healthcare 7.75 10.03 19.15
Total contribution rate 18.74 24.26 26.41
Employer contribution rates are a level percentage of payroll and are determined using the projected
unit credit actuarial funding method. Unfunded accrued liabilities and future gains/losses are
amortized over a fixed 25 -year period as a level percentage of pay based on a 4.15% payroll growth
assumption.
M
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Defined Benefit Pension Plan, continued
The required contributions for the plan were determined as part of the June 30, 2004 and 2005
actuarial valuations. The projection of future benefits for an ongoing plan involves estimates of the
value of reported amounts and assumptions about the probability of occurrence of events far into the
future. Examples include assumptions about future employment, mortality, and healthcare cost
trends. Amounts determined regarding the funded status of the plan and the annual required
contributions of the employer are subject to continual revision as actual results are compared with
past expectations and new estimates are made about the future.
Projections of benefits are based on the substantive plan (the plan as understood by the employer and
plan members) and include the types of benefits in force at the valuation date and the pattern of
sharing benefit costs between the City and the plan members at that point. Actuarial calculations
reflect a long -term perspective and employ methods and assumptions that are designed to reduce
short-term volatility in actuarial accrued liabilities and the actuarial values of assets.
The significant actuarial assumptions used in the valuation of the plan 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 and 4.0% thereafter for PERS (Police
and fire 6.0% for the first five years and 4.5% thereafter);
3. Medical cost inflation of 9.5% for 2006, trending downward 0.5% per year to 5.0% in FY15
and remaining at 5.0% thereafter; and prescription cost inflation of 14% for 2006, trending
downward 1.0% per year to 5.0% in FY15 and remaining at 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;
5. Mortality based on 1994 Group Annuity Mortality Basic Table, 1994 Base Year with 85%
occupational for Peace Officer/Firefighter and 35% occupational for others;
6. Retirement rate based on 1997 -1999 actual experience. Deferred vested members are
assumed to retire at their earliest retirement date;
7. 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 and are accounted for on an accrual
basis. Valuation assets cannot be outside the range of 80% to 120% of market value of
assets; and,
8. Valuation of Medical Benefit based on analysis of actual claims paid for June 2002 — May
2005, averaged and annualized and adjusted for other factors plus administrative costs.
Annual Pension and Postemployment Healthcare Cost
Effective July 1, 2007, the State of Alaska set contribution rates for each employer at an amount
no less than 14.48% and no more than 22 %. The Legislature then approved State funding (SB
53) in the form of an on- behalf payment for those amounts between the established employer rate
and the actuarially determined rate. This on- behalf payment was transferred to the Alaska
Division of Retirement and Benefits at July 1, but was allocated to the individual employer
accounts on a prorata basis with each payroll reporting period. The City has recorded $79,185 in
these financial statements as grant revenue and related PERS expenditures /expenses. This
amount is also included in "contributions made" for the purpose of calculating the ending net
pension /OPEB obligation as noted below.
47
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Defined Benefit Pension Plan, continued
Annual Pension and Postemployment Healthcare Cost, continued
In addition, in 2007, the State of Alaska passed legislation (SB 123) which requires that the actual
contributions be calculated on all PERS eligible wages, including wages attributable to the defined
contribution plan described later in these footnotes. When calculating the remittance amount, all
PERS wages are included; however, the amounts payable into the defined contribution plan are
remitted first, and only the residual amounts on those wages are remitted to the defined benefit plan.
Like the on- behalf payment, these residual amounts are also included in the "contributions made"
line below; however annual pension cost is calculated on only those wages attributable to the
defined benefit plan.
For the year ended December 31, 2007, the City's annual pension and other post - employment
benefit (OPEB) costs were as follows:
Annual required contribution
Interest on net pension/OPEB obligation
Adjustment to annual required contribution
Annual pension cost
Contributions made
Increase in net pension/OPEB obligation
Net pension /OPEB obligation, beginning of year
Net pension /OPEB obligation, end of year
Three -year trend information for PERS follows:
Pension OPEB Total
429,127 563,149 992,276
26,726 16,147 42,873
20 786 1( 2,558 3( 3,344
435,067 566,738 1,001,805
36( 1,765 51( 4,838 8( 76,603
73,302 51,900 125,202
323,952 195,715 519,667
397.254 247.615 644.869
Year Annual Percentage
Ending Pension Actual of APC Net Pension
December 31,Cost (APC)Contributions Contributed Obligation
Pension
2005 476,878 356,068 75%272,615
2006 544,397 493,060 91%323,952
2007 435,067 361,765 83%397,254
Year Annual Percentage
Ending OPEB Actual of OPEB Net OPEB
December 31,Cost Contributions Contributed Obligation
Postemployment
healthcare
2005 302,937 231,814 77%163,339
2006 374,253 341,877 91%195,715
2007 566,738 514,838 91%247,615
M.
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Defined Benefit Pension Plan, continued
Funding Progress
The following schedule of funding progress presents multiyear trend information about whether
the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial
accrued liabilities for benefits for the three most recent valuation reports available.
Unfunded
Liability as
Actuarial Actuarial Actuarial Percentage
Valuation Value of Accrued Unfunded Funded Covered of Covered
Date Assets Liability Liability Ratio Pa oll_ Payroll
June 30, 2004:
Pension $12,081,000 $15,769,000 3,688,000 77%3,678,000 100%
Postemployment
5.00%5.00%5.00%5.00%
healthcare 8,519,000 11,119,000 2,600,000 77%3,678,000 71%
June 30, 2005:
0.40%0.30%1.33%0.58%
Pension 12,915,252 16,362,388 3,447,136 79%3,577,617 96%
Postemployment
10.15%10.05 10.32%9.57%
healthcare 11,446,554 14,501,689 3,055,135 79%3,577,617 85%
June 30, 2006:
Pension 18,251,983 19,377,313 1,125,330 94% 3,983,759 29%
Postemployment
healthcare 7,812,273 16,136,735 8,324,462 48% 3,983,759 209%
10) Tier IV Defined Contribution Pension Plan
The State of Alaska Legislature approved Senate Bill 141 to create the Public Employees' Tier IV
Defined Contribution Retirement Plan for employees hired after July 1, 2006 or for employees
converting from the Tier I, II or III defined benefit plans. The plan is administered by the State of
Alaska, Department of Administration. Benefit and contribution provisions are established by State
law and may be amended only by the State Legislature. The Alaska Retirement Management Board
may also amend contribution requirements. Included in the plan are individual pension accounts,
retiree medical insurance plan and a separate Health Reimbursement Arrangement account that will
help retired members pay medical premiums and other eligible medical expenses not covered by the
medical plan. Employees are required to contribute 8.0% of their annual covered salary and the City
is required to make the following contributions:
January — June 2007 July — December 2007
Police/Fire Others Police/Fire Others
Individual account 5.00%5.00%5.00%5.00%
Retiree medical plan 1.75%1.75%0.99%0.99%
Occupational death and disability 0.40%0.30%1.33%0.58%
Health Reimbursement Arrangement **3.00%3.00%3.00%3.00%
Total contribution rate 10.15%10.05 10.32%9.57%
49
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Tier IV Defined Contribution Pension Plan, continued
Per AS 39.30.370, this rate is applied to the employer's average annual compensation. The contribution amount is
then converted to a flat rate, per pay period, per employee amount. Actual percentage amount can fluctuate
significantly from the amount shown here.
The City and employee contributions to the plan for the year ended December 31, 2007 were
31,311 and $13,907, respectively.
11) 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. There are two separate
negotiated contracts for temporary and permanent employees. The City's contribution rate for
temporary employees is $10.40 per compensable hour per the terms of a negotiated agreement
expiring December 31, 2007. The City's contribution rate for permanent employees is $800 per
employee per month per the terms of a negotiated agreement expiring June 30, 2010. The total
City contribution for the year ended December 31, 2007 was $75,821. Employees are not
required to contribute.
12) Deferred Compensation Plan
The City offers its employees a deferred compensation plan created in accordance with Internal
Revenue Code Section 457. The plan, available to all employees, permits them to defer a portion
of their salary until future years. The deferred compensation is not available to employees until
termination, retirement, death, or unforeseeable emergency. The provisions of the plan require
that all assets and income of the plan be held in trust for the exclusive benefit of participants and
their beneficiaries.
13) Risk Management
The City faces a considerable number of risks of loss, including (a) damage to and loss of
property and contents, (b) employee torts, (c) professional liability; i.e., errors and omissions, (d)
environmental damage, (e) workers' compensation; i.e., employee injuries, and (f) medical
insurance costs of employees.
The City is a member of the Alaska Municipal League Joint Insurance Association (JIA), a
governmental insurance pool established by the Alaska Municipal League. The JIA provides the
City coverage for property, including building and contents, automobiles, mobile equipment, data
processing equipment and boiler and machinery; casualty, including general liability, public
officials and employees liability, law enforcement professional liability, auto liability and
employee benefit liability; workers' compensation, including employers liability; and
commercial blanket bond. The City maintains supplemental marine insurance and firefighters
group accident coverage with insurance companies placed through JIA. The City has no
coverage for potential losses from environmental damages.
011
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Risk Management, continued
The JIA is a public entity risk pool organized to share risks among its members. The
Association's bylaws provide for the assessment of supplemental contributions from members in
the event that losses and expenses for any coverage year exceed the annual contributions and
income earned on such contributions for the year. Such supplemental contributions shall be
based upon each member's deposit contribution in comparison to the aggregate deposit
contributions of all members. The Association made no supplemental assessments during the
year ended December 31, 2007.
The JIA provides loss control services and conducts periodic inspections to ensure safe
operations. The City has utilized an established safety committee to review and recommend
safety policies and procedures for all departments. The City Council designates a portion of the
General Fund balance to meet potential losses not covered by insurance and insurance
deductibles.
The City also participates in the Alaska Public Utilities Insurance Trust, which provides
insurance coverage for employee health benefits. The Plan is a public entity risk pool in which
risks are shared among the members. Stop loss insurance limits participants' liability for
individual and aggregate claims.
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.
14) Health Care Operating Agreements
The City has entered into an operating agreement with Providence Health and Services. Under
the terms of the agreement the City will pay Providence Health and Services 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.
15) 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.
In 2006 the City was named as a defendant in a lawsuit alleging discharge of pollutants into
Resurrection Bay in violation of the federal Clean Water Act. In February 2008, the court issued
an Order of Summary Judgement finding that the City must obtain a permit for storm water
discharges. The City is not obligated to pay civil penalties, and both parties to the suit should
bear its own legal fees and costs. Following this order, the plaintiff filed a motion to amend the
court's findings. The City intends to continue defending against this claim until it is resolved.
51
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Commitments and Contingencies, continued
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.
16) Fund Deficits
The Natural Disasters Special Revenue Fund had a deficit in fund balance of $37,169 at
December 31, 2007. This fund incurred costs related to the 2006 flood disaster. The deficit will
be eliminated in the future with transfers from other funds.
The Long -Term Care Facility Capital Project Fund had a deficit in fund balance of $590,017 at
December 31, 2007. Costs in this fund are related to the financing, designing, acquiring,
constructing and equipping a long -term care facility in Seward. Management plans to eliminate
the deficit in this fund in 2008 with proceeds from a $27 million bond issuance.
17) Subsequent Events
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. The bonds were sold on March
20, 2008, through the Alaska Municipal Bond Bank. This facility will replace the existing
privately -owned Wesley facility which is currently leased by the City for the purpose of
providing co- located hospital and long -term care services. The revenues from the co- located
hospital and long -term care facility are pledged to repay the revenue bonds.
On October 22, 2007, the Seward City Council approved Resolution 2007 -98, issuing a notice of
intent to issue lease revenue bonds for the purpose of expanding the Spring Creek Correctional
Facility by up to 144 beds. Lease revenue bonds are expected to be issued in 2008 in an
approximate amount of $22.7 million, and will be repaid through State lease payments from the
Department of Corrections.
On November 22, 2007, the Seward City Council approved Resolution 2007 -99, issuing a notice
of intent to issue electric revenue bonds for the purpose of replacing two electric generators and
constructing the controls, building, and related accessories. The estimated cost of the project is
9 million, with the estimated bond issue to be $6 million. Bonds are expected to be issued
through the Alaska Municipal Bond Bank.
52
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Subsequent Events, continued
In April 2008, the Alaska State Legislature passed Senate Bill 125 which converts the existing
Public Employees Retirement System (PERS) from a single- agent, multiple - employer plan (as
discussed in a previous note) to a cost - sharing plan. Under the cost - sharing arrangement, the
State of Alaska Division of Retirement and Benefits will no longer track individual employer
assets and liabilities. Rather, all plan costs and past service liabilities will be shared among all
participating employers. The cost - sharing plan will require a uniform employer contribution rate
of 22% of active member wages, subject to a wage floor. In addition, the legislation provides for
State contributions in the event that the annually calculated and board adopted rate, which
includes a provision to pay down the past- service liability, exceeds 22%. Any such additional
contributions would be recognized by each employer as an on- behalf payment.
As a result of this change, the City will not be obligated to pay or to continue amortizing the
currently recorded Net Pension /OPEB Obligation. As such, these liabilities will be written off
and the City will recognize an extraordinary gain on the legislation's effective date, July 1, 2008.
53
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54
SUPPLEMENTARY INFORMATION
W
Exhibit E -1
CITY OF SEWARD
Nonmajor Governmental Funds
Combining Balance Sheet
December 31, 2007
Assets
Cash and investments
Receivables - grants and shared revenues
Total assets
Special Debt Capital
Revenue Service Projects Total
2,997 945,478 292,518 1,240,993
48,606 -17,492 66,098
51,603 945,478 310,010 1,307,091
Liabilities and Fund Balances
Liabilities:
Accounts payable
Due to other funds
Deferred revenue
Total liabilities
221 - 290,561 290,782
85,554 - 335,147 420,701
477 - - 477
86,252 - 625,708 711,960
Fund balances:
Reserved for debt service
Unreserved:
Designated for capital improvements
Undesignated (deficit)
Total fund balances (deficit)
945,478 - 945,478
274,319 274,319
34,649 - (590,017 (624,666
34,649 945,478 (315,698 595,131
Total liabilities and fund balances $ 51,603 945,478 310,010 1,307,091
Wei
Exhibit E -2
CITY OF SEWARD
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures
and Change in Fund Balances (Deficit)
Year Ended December 31, 2007
Special
Revenue
Revenues:
Intergovernmental
Investment income
Miscellaneous
Total revenues
Expenditures:
General government
Public safety
Public works
Parks and recreation
Hospital and long -term care
Principal payments
Interest and other costs
Total expenditures
Excess of revenues over (under)
expenditures 378,521 (719,388) (2,557,502) (2,898,369)
Other financing sources (uses):
1,137,408
10,130 - 4,879 15,009
1,114,693
Transfers in 117,000 1,003,079 1,069,799 2,189,878
Transfers out 19,610 463,620 483,230
Net other financing sources (uses)97,390 1,003,079 606,179 1,706,648
Net change in fund balances 475,911 283,691 1,951,323)1,191,721)
Beginning fund balances (deficit)510,560 661,787 1,635,625 1,786,852
Ending fund balances (deficit)34,649 945,478 315,698 595,131
579,429
10,130
589,559
587,640 587,640
224,841 224,841
200,908 - 936,500 1,137,408
10,130 - 4,879 15,009
1,114,693 1,114,693
605,000 -605,000
137,037 -137,037
211,038 742,037 2,868,553 3,821,628
Debt
Service
Capital
Pro'ects Total
30.4,124 883,553
22,649 6,927 29,576
10,130
22,649 311,051 923,259
57
Exhibit F -1
CITY OF SEWARD
Nonmajor Enterprise Funds
Combining Statement of Net Assets
December 31, 2007
Assets
Current assets:
Cash and investments
Receivables:
Accounts
Less allowance for doubtful accounts
Total current assets
Noncurrent assets:
Restricted cash and investments
Capital assets, net of accumulated depreciation
Total noncurrent assets
Total assets
Parking
Wastewater Revenue Total
517,133 325,637 842,770
74,102 74,102
3,335 3,335
587,900 325,637 913,537
56,740
207,560 207,560
5,556,258 58,245 5,614,503
5,763,818 58,245 5,822,063
19,537 -
6,351,718 383,882 6,735,600
Liabilities and Net Assets
Current liabilities:
Accounts payable
Accrued payroll and related liabilities
Accrued interest
Current portion:
Accrued annual leave
Notes payable
Customer deposits
Total current liabilities
Noncurrent liabilities, net of current portion:
Accrued annual leave
Notes payable
Net pension/OPEB obligation
Total noncurrent liabilities
8,214 5,033 13,247
3,636 -3,636
961 -961
3,078 -3,078
56,740 -56,740
3,025 -3,025
75,654 5,033 80,687
15,876 -15,876
297,762 -297,762
19,537 -19,537
333,175 -333,175
Total liabilities
Net assets:
Invested in capital assets, net of related debt
Unrestricted
Total net assets
Total liabilities and net assets
408,829 5,033 413,862
5,201,756 58,245 5,260,001
741,133 320,604 1,061,737
5,942,889 378,849 6,321,738
6,351,718 383,882 6,735,600
58
Exhibit F -2
CITY OF SEWARD
Nonmajor Enterprise Funds
Combining Statement of Revenues, Expenses and Change in Net Assets
Year Ended December 31, 2007
Operating revenues - charges for services
Operating expenses:
Salaries and benefits
Services and supplies
Administration
Depreciation
Total operating expenses
Earnings from operations
Nonoperating revenues (expenses):
Intergovernmental
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
56,455 33,950 90,405
2,181
Parking
34,347
Wastewater Revenue Total
800,168 182,133 982,301
172,599 98,838 271,437
180,403 23,554 203,957
111,497 19,481 130,978
279,214 6,310 285,524
743,713 148,183 891,896
56,455 33,950 90,405
2,181 2,181
34,347 16,244 50,591
6,156 6,156
30,372 16,244 46,616
86,827 50,194 137,021
27,688 27,688
185,987 14,571 (200,558
71,472)35,623 (35,849)
6,014,361 343,226 6,357,587
5,942,889 378,849 6,321,738
59
Exhibit F -3
CITY OF SEWARD
Nonmajor Enterprise Funds
Combining Statement of Cash Flows
Year Ended December 31, 2007
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
185,987 (14,571 (200,558
55,927) -
Parking
6,156) -
Wastewater Revenue Total
804,878 182,133 987,011
177,755)18,545)196,300)
170,081)98,838)268,919)
111,497 19,481 130,978
345,545 45,269 390,814
185,987 (14,571 (200,558
55,927) -55,927)
6,156) -6,156)
60,577) -60,577)
30,717 -30,717
91,943 - (91,943
34,347 16,244
101,962 46,942
cn cni
148,904
622,731 278,695 901,426
724,693 325,637 1,050,330
517,133 325,637 842,770
207,560 - 207,560
724,693 325,637 1,050,330
Z1
Exhibit F -3, continued
CITY OF SEWARD
Nonmajor Enterprise Funds
Statement of Cash Flows, continued
rein
Parking
Wastewater Revenue Total
Reconciliation of earnings from operations to net cash
provided (used) by operating activities:
Earnings from operations 56,455 33,950 90,405
Adjustments to reconcile earnings from operations
to net cash flows from operating activities:
Depreciation 279,214 6,310 285,524
Noncash expense - PERS relief 2,181 2,181
Decrease in allowance for doubtful accounts 1,265)1,265)
Increase in assets - receivables 2,950 2,950
Increase (decrease) in liabilities:
Accounts payable 2,648 5,009 7,657
Accrued payroll and related liabilities 3,126)3,126)
Accrued annual leave 316)316)
Customer deposits 3,025 3,025
Net pension /OPEB obligation 3,779 3,779
Net cash flows from operating activities 345,545 45,269 390,814
rein
Exhibit G -1
CITY OF SEWARD
Internal Service Funds
Combining Statement of Net Assets
December 31, 2007
Compensated
Motor Annual
Pool Leave Total
Current assets:
Cash and investments
Accrued interest receivable
Current portion of interfund loan receivable
Total current assets
Noncurrent assets:
Interfund loans, net of current portion
Capital assets, net of accumulated depreciation
Total noncurrent assets
Total assets
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
Total liabilities
Net assets:
Invested in capital assets, net of related debt
Unrestricted
Total net assets
Total liabilities and net assets
691,100 328,276 1,019,376
72,463 72,463
55,335 55,335
818,898 328,276 1,147,174
1,315,242 - 1,315,242
1,156,280 - 1,156,280
2,471,522 - 2,471,522
3,290,420 328,276 3,618,696
1,386 - 1,386
86,235 86,235
46,281 - 46,281
47,667 86,235 133,902
242,041 242,041
47,667 328,276 375,943
1,109,999 1,109,999
2,132,754 2,132,754
3,242,753 3,242,753
3,290,420 328,276 3,618,696
62
Exhibit G -2
CITY OF SEWARD
Internal Service Funds
Combining Statement of Revenues, Expenses and Change in Net Assets
Year Ended December 31, 2007
Compensated
Operating revenues -
vehicle rental and interfund charges
Operating expenses:
Salaries and benefits
Depreciation
Total operating expenses
Earnings from operations
Nonoperating revenues (expenses):
Gain on disposition of capital assets
Investment income
Interest expense
Net nonoperating revenues (expenses)
Change in net assets
Beginning net assets
Ending net assets
Motor Annual
Pool Leave Total
492,820 309,579 802,399
309,579 309,579
225,971 225,971
225,971 309,579 535,550
266,849 266,849
2,300 2,300
101,468 101,468
4,055 4,055
99,713 99,713
366,562 366,562
2,876,191 2,876,191
3,242,753 - 3,242,753
63
Exhibit G -3
CITY OF SEWARD
Internal Service Funds
Combining Statement of Cash Flows
Year Ended December 31, 2007
Motor
Pool
Cash flows from operating activities:
Receipts from interfund charges
Payments to employees
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
Proceeds from sale of capital assets
Net cash flows from capital and
related financing activities
Cash flows from investing activities:
Interfund loan receipts
Investment income received
Net cash flows from investing activities
Net increase (decrease) 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
Decrease in liabilities - accrued annual leave
Net cash flows from operating activities
Compensated
Annual
Leave Total
492,820 309,579 802,399
330,271 330,271
492,820 20,692 472,128
59,473)59,473)
4,699)4,699)
2,300 2,300
61,872 61,872
99,681 99,681
57,121 57,121
156,802 156,802
587,750 20,692)567,058
103,350 348,968 452,318
691,100 328,276 1,019,376
F-66,849 266,849
225,971 - 225,971
20,692 (20,692
492,820 (20,692 472,128
rZ
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.
Exhibit H -1
CITY OF SEWARD
General Fund
Balance Sheet
December 31, 2007
With Comparative Amounts for 2006)
Assets 2007 2006
Cash and investments $ 4,722,889 4,883,200
Receivables:
Taxes:
405,525 393,719
Personal property 17,956 47,480
Less allowance for doubtful accounts 790 3,381
Net personal property 17,166 44,099
Motor vehicle 5,656 5,472
Hotel/motel room 16,599 15,693
Real property 19,890 12,042
Sales 447,155 485,439
Net taxes 506,466 562,745
Accounts 80,914 181,447
Less allowance for doubtful accounts 2,040 2,141
Net accounts 78,874 179,306
Property assessments 910
Grants and shared revenues 71 2,857
Accrued interest 148,482 129,287
Total receivables 733,893 875,105
Prepaid items 443,260 376,934
Inventory 15,600 11,475
Due from other funds 420,701 353,900
Total assets 6,336,343 6,500,614
Liabilities and Fund Balance
Liabilities:
Accounts payable 405,525 393,719
Accrued payroll and related liabilities 81,532 161,106
Accrued liabilities 96,782 136,609
Funds held in trust 9,140 11,206
Deferred revenue 45,494 55,194
Accrued interest 83,753
Interfund loans payable 1,595,287 1,708,126
Total liabilities 2,317,513 2,465,960
Fund balance:
Reserved - inventory and prepaids 458,860 388,409
Unreserved:
Designated:
Working capital 1,500,000 1,500,000
Insurance 126,418 519,418
Hospital line of credit 500,000 500,000
Matching grant funds 50,000
Undesignated 1,433,552 1,076,827
Total fund balance 4,018,830 4,034,654
Total liabilities and fund balance 6,336,343 6,500,614
66
CITY OF SEWARD
General Fund
Schedule of Revenues, Expenditures and
Change in Fund Balance - Budget and Actual
Year Ended December 31, 2007
With Comparative Amounts for 2006)
Exhibit H -2
Licenses and permits
Building permits 80,000
2007
48,794)
2006
Taxi permits 1,200 1,060
Variance
920
Department of Motor Vehicles commissions 90,000 90,727
Positive
94,615
Animal control licenses
Budget Actual Ne ative Actual
Revenues:
20,000 15,945 4,055)20,554
Taxes:
7,372 5,096 2,276 4,617
Sales 3,725,130 4,068,600 343,470 3,518,435
Property 834,200 873,513 39,313 847,875
Hotel /motel room 321,000 343,162 22,162 310,570
Payments in lieu of taxes 80,000 76,609 3,391)77,714
Penalty and interest 2,400 1,381 1,019 1,479
Total taxes 4,962,730 5,363,265 400,535 4,756,073
Licenses and permits
Building permits 80,000 31,206 48,794)78,239
Taxi permits 1,200 1,060 140)920
Department of Motor Vehicles commissions 90,000 90,727 727 94,615
Animal control licenses 750 620 130)1,070
Business licenses 20,000 15,945 4,055)20,554
Miscellaneous 7,372 5,096 2,276 4,617
Total licenses and permits 199,322 144,654 54,668 200,015
Intergovernmental:
21,000 17,611 3,389 16,073
Jail contract 408,611 449,472 40,861 429,042
Dispatch contract 98,500 100,240 1,740 99,500
Raw fish tax 320,000 316,704 3,296)367,526
Shared fisheries and landing tax 7,500 4,533 2,967)3,740
Liquor tax 16,000 19,150 3,150 17,500
Library grants 13,702 13,702 7,307
Fire department grants 360 360 11,026
Energy assistance 198,412 198,412
Other grants 424,008 86,685 337,323 130,452
Total intergovernmental 1,274,619 1,189,258 85,361 1,066,093
Charges for services:
Administrative 1,643,485 1,656,773 13,288 1,362,285
Rents and leases 102,036 71,420 30,616)119,870
Copying charges 26,000 18,385 7,615)25,955
Work orders 25,000 39,520 14,520 41,636
Recreation 559,350 581,933 22,583 519,962
Library 8,000 7,736 264 8,357
Total charges for services 2,363,871 2,375,767 11,896 2,078,065
Fines and bails 21,000 17,611 3,389 16,073
Investment income 160,000 285,066 125,066 392,379
Miscellaneous:
Sale of land, equipment and gravel 32,650 6,528 26,122)65,053
Refuse contract 65,000 65,708 708 60,139
Other 21,300 25,209 3,909 49,887
Total miscellaneous 118,950 97,445 21,505 175,079
Total revenues 9,100,492 9,473,066 372,574 8,683,777
67
Exhibit H -2, continued
CITY OF SEWARD
General Fund
Schedule of Revenues, Expenditures and Change in Fund Balance -
Budget and Actual, continued
City clerk:
Salaries 121,100
2007
4,620
2006
Employee benefits 69,371 67,905
Variance
63,432
Purchased services 13,500 8,221
Positive
8,362
General and administrative
Budget Actual a ative Actual
Expenditures:
221,371 200,369 21,002 191,713
General government:
Management information systems:
Mayor and council:
Salaries 104,051 103,711
Salaries 65,699 43,505 22,194 44,774
Employee benefits 30,533 18,750 11,783 17,442
Audit 48,000 45,350 2,650 43,300
Legal 160,000 183,100 23,100)209,149
Purchased services 3,950 3,259 691 2,845
Supplies and maintenance 21,550 14,236 7,314 16,857
Legislative representation 140,000 129,174 10,826 128,916
General and administrative 81,032 72,611 8,421 86,219
Capital outlay 2,733 2,733)
Total mayor and council 550,764 512,718 38,046 549,502
City manager:
24,279 3,329)21,851
Supplies and maintenance
Salaries 215,258 210,825 4,433 217,846
Employee benefits 91,557 80,741 10,816 80,496
Purchased services 26,800 42,985 16,185)36,548
Supplies and maintenance 11,520 8,838 2,682 18,247
General and administrative 47,900 38,906 8,994 74,169
Total city manager 393,035 382,295 10,740 427,306
City clerk:
Salaries 121,100 116,480 4,620 109,851
Employee benefits 69,371 67,905 1,466 63,432
Purchased services 13,500 8,221 5,279 8,362
General and administrative 17,400 7,763 9,637 10,068
Total city clerk 221,371 200,369 21,002 191,713
Management information systems:
Salaries 104,051 103,711 340 92,919
Employee benefits 54,869 51,340 3,529 47,781
Purchased services 13,400 10,709 2,691 4,638
Supplies and maintenance 24,000 43,499 19,499)26,545
General and administrative 12,100 7,271 4,829 5,325
Capital outlay 5,849 5,849 2,709
Total management information systems 208,420 222,379 13,959)179,917
Finance:
Salaries 343,957 332,387 11,570 321,539
Employee benefits 191,211 184,179 7,032 167,971
Purchased services 20,950 24,279 3,329)21,851
Supplies and maintenance 48,100 41,506 6,594 48,919
General and administrative 19,500 20,719 1,219)20,741
Capital outlay 8,000 5,995 2,005 12,919
Total finance 631,718 609,065 22,653 593,940
68
Exhibit H -2, continued
CITY OF SEWARD
General Fund
Schedule of Revenues, Expenditures and Changeun Fund Balance -
Budget and Actual, continued
2007 2006
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
Chamber of Commerce
General and administrative pass through payments
Other
Total contributions to civic organizations
Total general government
Public safety:
Police:
Salaries
Employee benefits
Purchased services
Supplies and maintenance
General and administrative
Capital outlay
Total police
Jail:
Salaries
Employee benefits
Purchased services
Supplies and maintenance
General and administrative
Capital outlay
Total jail
Variance
Positive
Budget Actual (Negative Actual
60,573 80,883 20,310)76,653
44,515 44,632 117)43,525
42,500 25,484 17,016 37,463
7,520 3,198 4,322 1,810
6,900 4,089 2,811 5,987
162,008 158,286 3,722 165,438
750 750
22,200 16,569 5,631 9,423
13,200 13,663 463)14,063
61,100 78,224 17,124)53,597
5,000 9,498 4,498 4,357
102,250 117,954 15,704 81,440
10,000 10,000 10,000
4,000 4,000 4,000
142,000 142,000 121,600
165,150
10,000 10,000 250
156,000 166,000 10,000 301,000
2,425,566 2,369,066 56,500 2,490,256
848,555 779,651 68,904 736,908
449,523 427,419 22,104 386,913
93,600 113,029 19,429)91,582
49,500 50,334 834)45,411
60,180 53,214 6,966 51,199
6,533 6,533)23,737
1,501,358 1,430,180 71,178 1,335,750
233,183 209,270 23,913 224,668
146,512 127,322 19,190 126,536
24,400 27,849 3,449)23,146
13,000 8,923 4,077 8,913
99,934 96,931 3,003 84,122
5,000 2,725 2,275
522,029 473,020 49,009 467,385
69
Exhibit H -2, continued
CITY OF SEWARD
General Fund
Schedule of Revenues, Expenditures and Change in Fund Balance -
Budget and Actual, continued
WE
2007 2006
Variance
Positive
Budget Actual Negative Actual
Expenditures, continued:
Public safety, continued:
Animal control:
Purchased services 77,155 76,586 569 76,821
Supplies and maintenance 9,400 1,164 8,236 675
Total animal control 86,555 77,750 8,805 77,496
Fire:
Salaries 155,365 145,676 9,689 130,530
Employee benefits 89,274 84,186 5,088 80,419
Purchased services 169,023 170,865 1,842)162,970
Supplies and maintenance 35,300 51,140 15,840)38,858
General and administrative 16,450 13,139 3,311 13,249
Capital outlay 5,000 1,376 3,624
Total fire 470,412 466,382 4,030 426,026
Volunteer training:
Employee benefits 1,000 1,000
Purchased services 5,000 7,514 2,514)4,063
Supplies and maintenance 21,874 5,861 16,013 13,176
General and administrative 25,605 23,190 2,415 19,299
Capital outlay 8,805 8,805
Total volunteer training 53,479 45,370 8,109 36,538
Emergency preparedness:
Purchased services 250 426 176)100
Supplies and maintenance 3,900 1,600 2,300 1,491
General and administrative 4,000 5,168 1,168)4,254
Capital outlay 1,000 1,000
Total emergency preparedness 8,150 8,194 44 5,845
Engineer and utility manager:
Salaries 89,047 77,438 11,609 104,776
Employee benefits 42,988 41,230 1,758 51,076
Purchased services 32,000 52,053 20,053)10,936
Supplies and maintenance 11,500 3,096 8,404 2,878
General and administrative 14,200 8,127 6,073 7,583
Capital outlay 2,500 2,500
Total engineer and utility manager 192,235 181,944 10,291 177,249
Building inspector:
Salaries 66,027 55,970 10,057 40,586
Employee benefits 36,480 29,645 6,835 22,605
Purchased services 14,000 13,821 179 13,218
Supplies and maintenance 9,250 1,213 8,037 2,196
General and administrative 8,700 3,590 5,110 2,975
Total building inspector 134,457 104,239 30,218 81,580
Total public safety 2,968,675 2,787,079 181,596 2,607,869
WE
Exhibit H -2, continued
CITY OF SEWARD
General Fund
Schedule of Revenues, Expenditures and Change in Fund Balance -
Budget and Actual, continued
2007
Expenditures, continued:
Public works:
Roads and streets:
Salaries
Employee benefits
Purchased services
Supplies and maintenance
General and administrative
Total roads and streets
Budget Actual
2006
Variance
Positive
Negative Actual
230,272 234,778 4,506)211,821
127,558 118,179 9,379 112,899
304,344 327,705 23,361)281,349
187,617 197,975 10,358)167,632
15,700 4,208 11,492 11,847
865,491 882,845 17,354 785,548
City shop:
157,158 144,149 13,009 139,050
Salaries 135,436 154,052 18,616)156,851
Employee benefits 84,596 92,804 8,208)93,957
Purchased services 63,000 73,983 10,983)61,262
Supplies and maintenance 45,500 49,713 4,213)45,656
General and administrative 11,750 14,186 2,436)12,808
Capital outlay 8,575 8,575
Total city shop 340.282 393,313 53,031)370,534
Municipal building:
Salaries 76,548 70,421 6,127 68,307
Employee benefits 54,568 51,202 3,366 48,806
Purchased services 96,350 94,019 2,331 86,627
Supplies and maintenance 36,200 32,156 4,044 40,390
General and adnnunistrative 2,100 838 1,262 660
Capital outlay 23,000 16,291 6,709 18,582
Total municipal building 288,766 264,927 23,839 263,372
Total public works 1,494,539 1,541,085 46,546 1,419,454
Parks and recreation:
Salaries 530,868 490,635 40,233 489,838
Employee benefits 232,565 223,496 9,069 197,739
Purchased services 224,600 213,774 10,826 216,934
Supplies and maintenance 77,315 88,211 10,896)79,093
General and administrative 48,500 52,877 4,377)44,717
Capital outlay 3,500 3,500 9,300
Total parks and recreation 1,117,348 1,068,993 48,355 1,037,621
Library:
Salaries 157,158 144,149 13,009 139,050
Employee benefits 95,878 88,748 7,130 87,161
Purchased services 39,200 38,925 275 37,535
Supplies and maintenance 44,180 44,541 361)47,890
General and administrative 22,500 22,859 359)20,941
Capital outlay 3,500 3,500
Total library 362,416 339,222 23,194 332,577
71
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
72
2007 2006
Variance
Positive
Budget Actual Negative Actual
362,816 249,977 112,839 243,296
434,976 293,114 141,862 1,805,475
39,753 123,507 83,754)120,123
837,545 666,598 170,947 2,168,894
9,206,089 8,772,043 434,046 10,056,671
105,597)701,023 806,620 1,372,894)
1,427,329 1,441,438 14,109 1,759,534
2,086,489 2,158,285)71,796 2,232,719)
659,160 716,847 57,687 473,185
764,757 15,824)748,933 1,846,079)
4,034,654 5,880,733
4,018,830 4,034,654
72
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.
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.
Natural Disasters — To account for the costs associated with the October 2006 flood
disaster.
73
Exhibit I -1
CITY OF SEWARD
Special Revenue Funds
Combining Balance Sheet
December 31, 2007
74
General Public
Parks and Recreation Government Works
Two Historical
Litter Lakes Records Natural
Assets Patrol Park Preservation Disasters Total
Cash and investments 477 2,520 2,997
Grants receivable 48,606 48,606
Total assets 477 2,520 48,606 51,603
Liabilities and Fund Balances
Liabilities:
Accounts payable 221 221
Due to other funds 85,554 85,554
Deferred revenue 477 477
Total liabilities 477 85,775 86,252
Fund balances - unreserved
and undesignated (deficit)2,520 37,169 34,649
Total liabilities and fund balances 477 2,520 48,606 51,603
74
Exhibit I -2
CITY OF SEWARD
Special Revenue Funds
Combining Statement of Revenues, Expenditures
and Change in Fund Balances (Deficit)
Year Ended December 31, 2007
Revenues:
Federal grants
State grants
Miscellaneous
Total revenues
Expenditures:
Salaries and employee benefits
Contracted services
Supplies
Other services and charges
Total expenditures
Excess of revenues over
expenditures - - - 378,521 378,521
Other financing sources (uses):
Transfers in -
General Public
117,000
P and R Government Works
19,610
Net other financing sources (uses) -
Two Historical
97,390
Change in fund balances -
Litter Lakes Records Natural
Beginning fund balances (deficit) -
Control Park Preservation Disasters Total
434,572 434,572
144,857 144,857
10,130 -10,130
10,130 -579,429 589,559
9,792 -3,726 13,518
94 -112,934 113,028
244 -244
84,248 84,248
10,130 -200,908 211,038
Excess of revenues over
expenditures - - - 378,521 378,521
Other financing sources (uses):
Transfers in -117,000 117,000
Transfers out -19,610 19,610
Net other financing sources (uses) -19,610 117,000 97,390
Change in fund balances -19,610)495,521 475,911
Beginning fund balances (deficit) -2,520 19,610 532,690 510,560
Ending fund balances (deficit) $ -2,520 -37,169 34,649
75
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76
Exhibit J -1
CITY OF SEWARD
Debt Service Fund
Balance Sheet
December 31, 2007
With Comparative Amounts for 2006)
Assets
Cash and investments
Fund Balance
Fund balance - reserved for debt service
2007 2006
945,478 661,787
945,478 661,787
77
Exhibit J -2
CITY OF SEWARD
Debt Service Fund
Statement of Revenues, Expenditures
and Change in Fund Balance
Year Ended December 31, 2007
With Comparative Amounts for 2006)
Revenues - investment income
Expenditures:
Principal payments
Interest and other costs
Total expenditures
Excess of revenues over (under) expenditures
Transfers in
Net change in fund balance
Beginning fund balance
Ending fund balance
2007 2006
22,649 25,864
605,000 649,540
137,037 282,151
742,037 931,691
719,388)905,827)
1,003,079 879,608
283,691 (26,219)
661,787 688,006
945,478 661,787
ip
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.
Ocean Front Pavilion — To account for the design and construction costs of a new ocean
front pavilion.
Flood Mitigation — To account for the costs of engineering and construction of a levee at
Japanese Creek, to mitigate flooding at Resurrection River.
Fire Department Grants - To account for the activities of grants related to purchasing
exhaust system upgrades for the fireball.
Fire Department Equipment - To account for the costs of purchasing a fire department
breathing air compressor to refill fire air packs.
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.
Long -Term Care Facility — Accounts for the cost of planning, design, financing,
constructing, and equipping a new long -term care facility.
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.
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.
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 2007, the balance was comprised of a grant to Alutiiq Pride
Shellfish Hatchery.
79
Exhibit K -1
CITY OF SEWARD
Nonmajor Capital Project Funds
Combining Balance Sheet
December 31, 2007
Fund balances - unreserved:
Designated for capital improvements 36,857 9,929 - 8,524 - 20,994 181,132 16,883 274,319
Deficit - - - - (590,017 - - - (590,017
Total fund balances (deficit) 36,857 9,929 - 8,524 (590,017 20,994 181,132 16,883 (315,698
Total liabilities and fund balances $ 36,857 9,929 17,492 8,524 - 20,994 199,331 16,883 310,010
Parks and Public
Recreation Public Safety General Government Works
City Hall
Ocean Facilities Streets
Hoben Front Flood 4th and Long -Term Capital and and
Assets Park Pavilion Mitigation Adams Care Facility Acquisition Equipment Sidewalks Total
Cash and investments 36,857 9,929 8,524 20,994 199,331 16,883 292,518
Receivables - grants 17,492 17,492
Total assets 36,857 9,929 17,492 8,524 20,994 199,331 16,883 310,010
c Liabilities and Fund Balances
Liabilities:
Accounts payable 272,362 18,199 290,561
Due to other funds 17,492 317,655 335,147
Total liabilities 17,492 590,017 18,199 625,708
Fund balances - unreserved:
Designated for capital improvements 36,857 9,929 - 8,524 - 20,994 181,132 16,883 274,319
Deficit - - - - (590,017 - - - (590,017
Total fund balances (deficit) 36,857 9,929 - 8,524 (590,017 20,994 181,132 16,883 (315,698
Total liabilities and fund balances $ 36,857 9,929 17,492 8,524 - 20,994 199,331 16,883 310,010
CITY OF SEWARD
Nonmajor Capital Project Funds
Combining Statement of Revenues, Expenditures
and Change in Fund Balances
Year Ended December 31, 2007
Exhibit K -2
Parks and Public
Recreation Public Safety General Government Works
City Hall
Ocean Fire Fire Facilities Streets
Hoben Front Flood Department Department 4th and Long -Term Capital and and Pass
Park Pavilion Mitigation Grants EE uipment Adams Care Facility Acquisition Equipment Sidewalks Through Total
Revenues:
Intergovernmental $1,798 133,844 71,250 15,997 57,810 23,425 304,124
Investment income 6,927 6,927
Total revenues 1,798 133,844 71,250 15,997 6,927 57,810 23,425 311,051
Expenditures:
Contracted services 3,363 123,904 75,000 15,997 273,740 497,441 936,500 1,925,945o
Supplies 898 1,776 2,674
Land, buildings and equipment 830,629 830,629
Other services and charges 618 9,940 5,899 10,324 59,099 85,880
Shellfish hatchery pass- through 23,425 23,425
Total expenditures 4,879 133,844 75,000 15,997 7,675 1,114,693 556,540 936,500 23,425 2,868,553
Excess of revenues over
under) expenditures 3,081)3,750)7,675)1,114,693)6,927 498,730)936,500)2,557,502)
Other financing sources (uses):
Transfers in 3,750 10,000 48,848 628,318 378,883 1,069,799
Transfers out 463,620 463,620
Net other financing sources (uses)3,750 10,000 414,772 628,318 378,883 606,179
Net change in fund balances 3,081)7,675)1,104,693)407,845)129,588 557,617 )1,951,323)
Beginning fund balances 39,938 9,929 16,199 514,676 428,839 51,544 574,500 1,635,625
Ending fund balances (deficit) $36,857 9,929 8,524 590,017 20,994 181,132 16,883 315,698
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MN
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.
Exhibit L -1
CITY OF SEWARD
Electric Enterprise Fund
Statement of Net Assets
December 31, 2007
With Comparative Amounts for 2006)
Assets 2007 2006
Current assets:
Cash and investments
Receivables:
Accounts
Assessments
Interfund loan
Other
Less allowance for doubtful accounts
Net receivables
Prepaid expenses
Inventory
Total current assets
Restricted cash and investments:
Bond retirement
Capital projects
Total restricted cash and investments
Assessments receivable, net of current portion
Interfund loan, net of current portion
Property, plant and equipment:
Land and land rights
Buildings
Improvements other than buildings
Equipment
Total property, plant and equipment in service
Less accumulated depreciation
Net property, plant and equipment in service
Construction in progress
Total property, plant and equipment
Deferred charges - unamortized debt issuance costs
Total assets
2,424,833 2,112,150
787,447
5,534
13,666
222,892
35,435)
787,852
24,712
30,264
79,367
35,453)
994,104 886,742
9,950 -
892,476 509,541
4,321,363 3,508,433
281,875 281,875
2,030,305 2,319,915
2,312,180 2,601,790
32,601 129,123
414,196 427,862
230,951 230,951
281,474 281,474
37,368,527 36,241,416
7,398,078 7,421,003
45,279,030 44,174,844
26,394,395 25,096,541
18, 884,635 19,078,303
20,000 439,382
18,904,635 19,517,685
39,234 44,138
26,024,209 26,229,031
Exhibit L -1, continued
CITY OF SEWARD
Electric Enterprise Fund
Statement of Net Assets, continued
Liabilities and Net Assets
2007 2006
Liabilities:
Current liabilities:
Accounts payable
Accrued payroll and related liabilities
Accrued interest
Current portion:
Bonds payable
Accrued annual leave
Customer deposits
Deferred revenue
Total current liabilities
Noncurrent liabilities, net of current portion:
Accrued annual leave
Bonds payable
Unatnortized bond premium
Net pension/OPEB 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
429,663 478,810
16,614 30,443
6,460 7,029
205,000 195,000
15,275 11,347
206,882 197,399
49,810 62,782
Q ')Q Wna QR) Q i n
46,119 24,942
1,680,000 1,885,000
57,814 65,041
12,298 7,085
1,796,231 1,982,068
2,725,935 2,964,878
17,001,055 17,416,782
6,297,219 5,847,371
23,298,274 23,264,153
26,024,209 26,229,031
Exhibit L -2
CITY OF SEWARD
Electric Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2007
With Comparative Amounts for 2006)
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 (loss) from operations
Nonoperating revenues (expenses):
Intergovernmental
Investment income
Interest expense
Other expenses
Net nonoperating revenues (expenses)
Earnings before contributions and transfers
Capital contributions
Transfers out
Change in net assets
Beginning net assets
Ending net assets
2007 2006
2,562,743 2,514,908
1,364,789 1,346,459
3,388,377 3,059,243
642,252 689,902
159,679 180,814
63,124 72,777
247,142 115,333
8,428,106 7,979,436
4,584,472 5,064,983
3,629 578,354
2,063,354 2,212,653
1,342,861 1,303,680
7,994,316 9,159,670
433,790 (1,180,234)
24,228
281,001
80,369)
647
224,213
658,003
1,220,125
267,041
76,557)
13,512
1,397,097
216,863
391,835 313,536
1,015,717 (1,255,319
34,121 (724,920)
23,264,153 23,989,073
23,298,274 23,264,153
Of the total depreciation expense of $1,342,861 above, $814,776 was attributable to capital assets that
were funded with capital contributions.)
CITY OF SEWARD
Electric Enterprise Fund
Statement of Cash Flows
Year Ended December 31, 2007
With Comparative Amounts for 2006)
Exhibit L -3
Cash flows from investing activities
Investment income received
2007 2006
Cash flows from operating activities:
30,264 458,126
Receipts from customers and users 8,281,479 7,923,883
Payments to suppliers 5,573,915)5,989,720)
Payments to employees 824,396)983,607)
Payments for interfund services used 671,422 644,359
Net cash flows from operating activities 1,211,746 306,197
Cash flows from noncapital financing activities:
2,424,833 2,112,150
Transfers out 1,015,717)1,255,319)
Noncapital intergovernmental revenues 21,220 1,190,988
Net cash flows from noncapital financing activities 994,497 64,331
Cash flows from capital and related financing activities:
Principal payments on long -term debt 195,000)210,000)
Interest payments on long -term debt 88,165)94,726)
Acquisition of property, plant and equipment 729,811)793,411)
Capital contributions received 507,535 178,982
Net cash flows from capital and related financing activities 505,441 919,155
Cash flows from investing activities
Investment income received 281,001 267,041
Interfund loan receipts (payments)30,264 458,126
Net cash flows from investing activities 311,265 191,085
Net increase (decrease) in cash and investments 23,073 868,374)
Begiruting cash and investments 4,713,940 5,582,314
Ending cash and investments 4,737,013 4,713,940
Reconciliation of cash and investments to statement of net assets:
Current assets 2,424,833 2,112,150
Restricted assets 2,312,180 2,601,790
4,737,013 4,713,940
Reconciliation of earnings (loss) from operations to net cash
provided (used) by operating activities:
Earnings (loss) from operations 433,790 1,180,234)
Adjustments to reconcile earnings (loss) from operations to net
cash flows from operating activities:
Depreciation 1,342,861 1,303,680
Amortization of debt issuance costs 4,904 4,904
Other nonoperating revenues (expenses)647)13,512)
Noncash expense - PERS relief 3,008 29,137
Increase (decrease) in allowance for doubtful accounts 18)7,711)
Increase (decrease) in assets:
Receivables 143,120)26,772)
Prepaid expenses 9,950)
Inventory 382,935)84,492
Increase (decrease) in liabilities:
Accounts payable 49,147)116,982
Accrued payroll and related liabilities 13,829)2,304
Accrued annual leave 25,105 10,798
Customer deposits 9,483 83,852)
Deferred revenue 12,972)62,782
Net pension/OPEB obligation 5,213 3,199
Net cash flows from operating activities 1,211,746 306,197
87
Exhibit L -4
CITY OF SEWARD
Electric Enterprise Fund
Schedule of Operating Expenses
Year Ended December 31, 2007
With Comparative Amounts for 2006)
Administration and general:
Salaries and employee benefits 727,727 770,119
Purchased services 363,903 376,580
Supplies and maintenance 120,310 196,316
Administrative fee 671,422 644,359
Other 179,992 225,279
Total administration and general 2,063,354 2,212,653
Depreciation
Total operating expenses
1,342,861 1,303,680
7,994,316 9,159,670
2007 2006
Power:
Salaries and employee benefits 50,628 120,515
Purchased services 88,368 800,216
Power for resale 4,400,947 3,990,724
Supplies, maintenance and other 44,529 153,528
Total power 4,584,472 5,064,983
Distribution:
Salaries and employee benefits 316,465 315,340
Salary credits - work orders 250,927)176,929)
Purchased services 56,085 45,070
Supplies and maintenance 90,928 596,975
Supply credits - work orders 210,300)217,821)
Administration and general 1,378 15,719
Total distribution 3,629 578,354
Administration and general:
Salaries and employee benefits 727,727 770,119
Purchased services 363,903 376,580
Supplies and maintenance 120,310 196,316
Administrative fee 671,422 644,359
Other 179,992 225,279
Total administration and general 2,063,354 2,212,653
Depreciation
Total operating expenses
1,342,861 1,303,680
7,994,316 9,159,670
Exhibit L -5
CITY OF SEWARD
Electric Enterprise Fund
Schedule of Composition of Net Assets
December 31, 2007
With Comparative Amounts for 2006)
2007 2006
Grants and other external contributions
Related accumulated amortization
City - generated equity
25,436,767 25,044,932
13,635,603) (12,820,827)
11,497,110 11,040,048
Total net assets 23,298,274 23,264,153
E:M7
Exhibit L -6
CITY OF SEWARD
Electric Enterprise Fund
Schedule of Electric Capital Projects
Year Ended December 31, 2007
Funding sources - Electric Fund
Capital outlay:
Contracted services
Other services and charges
Total capital outlay
Transmission
Line
211,698
192,452
19,246
211,698
911
Exhibit G7
CITY OF SEWARD
Water Enterprise Fund
Statement of Net Assets
December 31, 2007
With Comparative Amounts for 2006)
Assets 2007 2006
Current assets:
1,287,853 1,287,853
Cash and investments 3,152,291 2,256,690
Equipment
Receivables:
1,098,163
Total property, plant and equipment in service
Accounts 74,627 89,126
Assessments 6,578 6,814
Grants and loans 127,729 10,863
Less allowance for doubtful accounts 3,358 4,047
Net receivables 205,576 102,756
Inventory 46,306 43,852
Total current assets 3,404,173 2,403,298
Restricted cash and investments - capital projects 182,523 184,044
Assessments receivable 45,949 53,018
Property, plant and equipment:
Land and land rights 2,507 2,507
Buildings 1,287,853 1,287,853
Improvements other than buildings 5,739,987 2,336,994
Equipment 1,230,473 1,098,163
Total property, plant and equipment in service 8,260,820 4,725,517
Less accumulated depreciation 3,231,913 3,299,858
Net property, plant and equipment in service 5,028,907 1,425,659
Construction in progress 43,331 3,452,799
Total property, plant and equipment 5,072,238 4,878,458
Total assets 8,704,883 7,518,818
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accounts payable 335,678 1,886,739
Accrued payroll and related liabilities 3,249 8,596
Current portion:
Accrued annual leave 3,874 3,622
Notes payable 114,071
Total current liabilities 456,872 1,898,957
Noncurrent liabilities, net of current portion:
Accrued annual leave 7,930 11,844
Notes payable 2,538,778 -
Net pension/OPEB obligation 16,527 12,699
Total noncurrent liabilities 2,563,235 24,543
Total liabilities 3,020,107 1,923,500
Net assets:
Invested in capital assets, net of related debt 2,419,389 4,878,458
Unrestricted 3,265,387 716,860
Total net assets 5,684,776 5,595,318
Total liabilities and net assets $ 8,704,883 7,518,818
91
Exhibit L -8
CITY OF SEWARD
Water Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2007
With Comparative Amounts for 2006)
Operating expenses:
Salaries and benefits
2007 2006
Operating revenues:
215,055 188,929
Residential 363,780 365,240
Small general service 97,527 99,345
Large general service 189,101 186,929
Industrial 126,297 152,393
Seward Marine Industrial Center 78,383 56,810
Ship water sales 80,548 62,608
Miscellaneous 60,997 61,082
Total operating revenues 996,633 984,407
Operating expenses:
Salaries and benefits 256,240 287,783
Purchased services 215,055 188,929
Supplies and maintenance 78,864 49,193
Administration and general 184,426 177,472
Other 25,025 18,434
Depreciation 98,547 94,192
Total operating expenses 858,157 816,003
Earnings from operations 138,476 168,404
Nonoperating revenues:
Intergovernmental
Investment income
Other revenues - insurance proceeds
Total nonoperating revenues
Earnings before contributions and transfers
Capital contributions
Transfers out
Change in net assets
Beginning net assets
Ending net assets
28,965 6,209
159,048 110,399
24,358
188,013 140,966
326,489 309,370
11,879 -
248,910 (84,249
89,458 225,121
5,595,318 5,370,197
5,684,776 5,595,318
Of the total depreciation expense of $98,547 above, $17,286 was attributable to capital assets that were
funded with capital contributions.)
N
Exhibit L -9
CITY OF SEWARD
Water Enterprise Fund
Statement of Cash Flows
Year Ended December 31, 2007
With Comparative Amounts for 2006)
Cash flows from capital and related financing activities:
Acquisition of property, plant and equipment
2007 2006
Cash flows from operating activities:
Issuance of long term debt
Receipts from customers and users 1,010,443 1,029,889
Payments to suppliers 311,233)276,049)
Payments to employees 258,261)277,275)
Payments for interfund services used 184,426 177,472
Net cash flows from operating activities 256,523 299,093
Cash flows from noncapital financing activities:
159,048 110,399
Transfers out 248,910)84,249)
Noncapital intergovernmental revenues 25,805
Net cash flows from noncapital financing activities 223,105 84,249
Cash flows from capital and related financing activities:
Acquisition of property, plant and equipment 1,853,553)893,104)
Issuance of long term debt 2,555,094
Capital contributions received 73 21,091
Insurance proceeds 24,358
Net cash flows from capital and related financing activities 701,614 847,655
Cash flows from investing activities - investment income received 159,048 110,399
Net increase (decrease) in cash and investments 894,080 522,412)
Beginning cash and investments 2,440,734 2,963,146
Ending cash and investments 3,334,814 2,440,734
Reconciliation of cash and investments to statement of net assets:
Current assets 3,152,291 2,256,690
Restricted assets 182,523 184,044
3,334,814 2,440,734
Reconciliation of earnings from operations to net cash
provided (used) by operating activities:
Earnings from operations 138,476 168,404
Adjustments to reconcile earnings from operations
to net cash flows from operating activities:
Depreciation 98,547 94,192
Noncash expense - PERS relief 3,160 6,209
Increase (decrease) in allowance for doubtful accounts 689)10
Increase) decrease in assets:
Receivables 14,499 45,472
Inventory 2,454)21,514)
Increase (decrease) in liabilities:
Accounts payable 10,165 2,021
Accrued payroll and related liabilities 5,347)994)
Accrued annual leave 3,662)3,120
Net pension /OPEB obligation 3,828 2,173
Net cash flows from operating activities 256,523 299,093
93
Exhibit L -10
CITY OF SEWARD
Water Enterprise Fund
Schedule of Composition of Net Assets
December 31, 2007
With Comparative Amounts for 2006)
Grants and other external contributions
Related accumulated amortization
Contributions from other funds
City - generated equity
Total net assets
2007
2,374,610
2006
2,362,731
1,734,084)1,716,798)
498,756 498,756
4,545,494 4,450,629
5,684,776 5,595,318
MI
Exhibit L -11
Funding sources:
State funds
Water Fund
Total funding sources
Capital outlay:
Contracted services
Supplies
Other services and charges
Total capital outlay
CITY OF SEWARD
Water Enterprise Fund
Combining Schedule of Water Capital Projects
Year Ended December 31, 2007
Water
Tank Fire
Water & & Line Hydrant
Sewer Extension Phase II
Water 3rd
Source Avenue
Study Water Line Totals
10,812 26,872 - 37,684
15,731 9,460 1,559 11,516 211,063 249,329
15,731 9,460 12,371 38,388 211,063 287,013
38,388 - 38,388
15,731 - 1,529 - - 17,260
9,460 10,842 - 211,063 231,365
15,731 9,460 12,371 38,388 211,063 287,013
M
Exhibit L-12
CITY OF SEWARD
Wastewater Enterprise Fund
Statement of Net Assets
December 31, 2007
With Comparative Amounts for 2006)
Assets 2007 2006
Current assets:
Cash and investments $ 517,133 387,284
Receivables:
Accounts 74,102 77,052
Assessments - 906
Less allowance for doubtful accounts (3,335) (4,600
Net receivables 70,767 73,358
Total current assets 587,900 460,642
Restricted cash and investments - capital projects 207,560 235,447
6,351,718
Assessments receivable 2,123
Property, plant and equipment:
Land and land rights 111,011 111,011
Buildings 2,413,234 2,413,234
Improvements other than buildings 8,713,368 8,680,679
Equipment 292,907 292,907
Total property, plant and equipment in service 11,530,520 11,497,831
Less accumulated depreciation 6,071,142 5,791,927
Net property, plant and equipment in service 5,459,378 5,705,904
Construction in progress 96,880 68,991
Total property, plant and equipment 5,556,258 5,774,895
Total assets 6,351,718 6,473,107
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accounts payable 8,214 5,566
Accrued payroll and related liabilities 3,636 6,762
Accrued interest 961 961
Current portion:
Accrued annual leave 3,078 2,795
Notes payable 56,740 55,927
Customer deposits 3,025
Total current liabilities 75,654 72,011
Noncurrent liabilities, net of current portion:
Accrued annual leave 15,876 16,475
Notes payable 297,762 354,502
Net pension/OPEB obligation 19,537 15,758
Total noncurrent liabilities 333,175 386,735
Total liabilities 408,829 458,746
Net assets:
Invested in capital assets, net of related debt
Unrestricted
Total net assets
Total liabilities and net assets
5,201,756 5,364,466
741,133 649,895
5,942,889 6,014,361
6,351,718 6,473,107
96
Exhibit L -13
CITY OF SEWARD
Wastewater Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2007
With Comparative Amounts for 2006)
Of the total depreciation expense of $279,214 above, $214,878 was attributable to capital assets that
were funded with capital contributions.)
97
2007 2006
Operating revenues:
Residential 428,134 429,636
Small general service 103,266 112,041
Large general service 189,321 189,114
Seward Marine Industrial Center 55,351 58,800
Miscellaneous 24,096 21,955
Total operating revenues 800,168 811,546
Operating expenses:
Salaries and benefits 172,599 117,075
Purchased services 112,865 108,493
Supplies and maintenance 57,205 59,526
Administration and general 111,497 109,433
Other 10,333 12,651
Depreciation 279,214 279,995
Total operating expenses 743,713 687,173
Earnings from operations 56,455 124,373
Nonoperating revenues (expenses):
Intergovernmental 2,181 6,106
hivestment income 34,347 28,550
Interest expense 6,156)6,816)
Other expenses 1,994
Net nonoperating revenues (expenses)30,372 25,846
Earnings before contributions and transfers 86,827 150,219
Capital contributions 27,688
Transfers out 185,987 70,378 )
Change in net assets 71,472)79,841
Beginning net assets 6,014,361 5,934,520
Ending net assets 5,942,889 6,014,361
Of the total depreciation expense of $279,214 above, $214,878 was attributable to capital assets that
were funded with capital contributions.)
97
Exhibit L -14
CITY OF SEWARD
Wastewater Enterprise Fund
Statement of Cash Flows
Year Ended December 31, 2007
With Comparative Amounts for 2006)
98
2007 2006
Cash flows from operating activities:
Receipts from customers and users 804,878 825,216
Payments to suppliers 177,755)179,735)
Payments to employees 170,081)103,689)
Payments for interfund services used 111,497)109,433
Net cash flows from operating activities 345,545 432,359
Cash flows from noncapital financing activities - transfers out 185,987 70,378
Cash flows from capital and related financing activities:
Principal payments on long -term debt 55,927)55,114)
Interest payments on long -term debt 6,156)6,944)
Acquisition of property, plant and equipment 60,577)21,586)
Capital contributions received 30,717 816
Net cash flows from capital and related financing activities 91,943 82,828
Cash flows from investing activities - investment income received 34,347 28,550
Net increase in cash and investments 101,962 307,703
Beginning cash and investments 622,731 315,028
Ending cash and investments 724,693 622,731
Reconciliation of cash and investments to statement of net assets:
Current assets 517,133 387,284
Restricted assets 207,560 235,447
724,693 622,731
Reconciliation of eiunings from operations to net cash provided
used) by operating activities:
Earnings from operations 56,455 124,373
Adjustments to reconcile earnings from operations
to net cash flows from operating activities:
Depreciation 279,214 279,995
Other nonoperating expenses 1,994)
Noncash expense - PERS relief 2,181 6,106
Increase (decrease) in allowance for doubtful accounts 1,265)542
Increase) decrease in assets - receivables 2,950 13,128
Increase (decrease) in liabilities:
Accounts payable 2,648 2,929
Accrued payroll and related liabilities 3,126)2,950
Accrued annual leave 316)2,169
Customer deposits 3,025
Net pension/OPEB obligation 3,779 2,161
Net cash flows from operating activities 345,545 432,359
98
Exhibit L -15
CITY OF SEWARD
Wastewater Enterprise Fund
Schedule of Composition of Net Assets
December 31, 2007
With Comparative Amounts for 2006)
2007 2006
Grants and other external contributions
Related accumulated amortization
Contributions from other funds
City - generated equity
Total net assets
9,915,999 9,888,311
5,933,089) (5,718,211)
161,550 161,550
1,798,429 1,682,711
5,942,889 6,0_ 14,361
a
Exhibit L -16
CITY OF SEWARD
Wastewater Enterprise Fund
Schedule of Wastewater Capital Projects
Year Ended December 31, 2007
Backup
Generator
and
Building
Funding sources - Wastewater Fund $ 27,887
Capital outlay:
Salaries and benefits 4,693
Supplies 8,441
Other services and charges 14,753
Total capital outlay $ 27,887
100
Exhibit L- 17
CITY OF SEWARD
Harbor Enterprise Fund
Statement of Net Assets
December 31, 2007
With Comparative Amounts for 2006)
Assets 2007 2006
Current assets:
Cash and investments $ 1,387,484 698,253
Receivables:
Accounts 170,793 142,792
Grants 682,695 76,271
Assessments 4,108 4,108
Less allowance for doubtful accounts 22,879 21,484
Net receivables 834,717 201,687
Total current assets 2,222,201 899,940
Restricted cash and investments:
Bond retirement 363,378 363,378
Capital projects 2,180,701 4,104,309
Total restricted cash and investments 2,544,079 4,467,687
Assessments receivable 27,861 32,147
Property, plant and equipment
Land and land rights 5,117,479 3,377,979
Buildings 615,287 396,187
Improvements other than buildings 19,431,290 11,848,476
Equipment 1,284,020 1,038,155
Total property, plant and equipment in service 26,448,076 16,660,797
Less accumulated depreciation 7,958,051 7,380,328
Net property, plant and equipment in service 18,490,025 9,280,469
Construction in progress 2,653,424 7,884,577
Total property, plant and equipment 21,143,449 17,165,046
Deferred charges - unamortized debt issuance costs 102,929 79,705
Total assets 26,040,519 22,644,525
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accounts payable 789,353 35,333
Accrued payroll and related liabilities 90,492 63,705
Accrued interest 47,452 67,762
Current portion:
Bonds payable 325,000 305,000
Interfund loan
18,048 17,107
Accrued annual leave
12,449 14,666
Deferred revenue
798,416 622,460
Other accrued liabilities 935 955
Total current liabilities 2,082,145 1,126,988
Noncurrent liabilities, net of current portion:
Accrued annual leave 22,008 44,135
Bonds payable 7,965,000 8,205,000
Interfund loan
185,103 203,151
Unamortized bond premium 137,846 82,364
Unamortized deferred loss on refunding 90,312)
Net pension/OPEB obligation 91,590 76,689
Total noncurrent liabilities 8,311,235 8,611,339
Total liabilities
10,393,380 9,738,327
Net assets:
Restricted for capital projects 16,223
Invested in capital assets, net of related debt 12,908,844 8,652,387
Unrestricted 2,722,072 4,253,811
Total net assets 15,647,139 12,906,198
Total liabilities and net assets 26,040,519 22,644,525
101
Exhibit L -18
CITY OF SEWARD
Harbor Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2007
With Comparative Amounts for 2006)
2007 2006
Operating revenues:
Moorage
Wharfage
Boat lift fees
Power sales
Rentals and leases
Passenger transit fees
Miscellaneous
Total operating revenues
Operating expenses:
Salaries and benefits
Purchased services
Power for resale
Supplies and maintenance
Administration and general
Depreciation
Total operating expenses
Earnings from operations
Nonoperating revenues (expenses):
Intergovernmental
Investment income
Interest expense
Net nonoperating revenues (expenses)
Earnings before contributions and transfers
Capital contributions
Transfers in
Transfers out
Change in net assets
Beginning net assets
1,301,142 1,192,813
67,714 37,716
89,650 75,541
201,048 201,170
289,824 287,760
707,824 625,536
94,714 78,529
2,751,916 2,499,065
759,556 678,523
271,047 269,077
153,327 149,493
119,469 100,401
169,443 191,477
620,741 973,971
2,093,583 2,362,942
658,333 136,123
9,410 28,036
153,097 225,701
390,715 322,186
228,208 68,449
430,125 67,674
2,147,337 615,018
464,387
300,908 288,916
2,740,941 393,776
12,906,198 12,512,422
Ending net assets $ 15,647,139 12,906,198
Of the total depreciation expense of $620,741 above, $355,004 was attributable to capital assets that
were funded with capital contributions.)
102
CITY OF SEWARD
Harbor Enterprise Fund
Statement of Cash Flows
Year Ended December 31, 2007
With Comparative Amounts for 2006)
Exhibit L -19
103
2007 2006
Cash flows from operating activities:
Receipts from customers and users 2,901,266 2,581,236
Payments to suppliers 533,634)837,715)
Payments to employees 732,802)592,354)
Payments for interfund services used 169,443 191,477
Net cash flows from operating activities 1,465,387 959,690
Cash flows from noncapital financing activities - transfers out 300,908 288,916
Cash flows from capital and related financing activities:
Advance refunding escrow deposit 1,996,095)
Issuance of long -term debt, net of expenses 2,000,423 4,502,659
Principal payments on long -term debt 310,000)110,000)
Interest payments on long -term debt 387,677)294,059)
Acquisition of property, plant and equipment 3,851,083)2,987,451)
Capital contributions received 1,545,199 1,421,375
Capital transfers from other funds 464,387
Interfund loan proceeds (payment)17,107 220,258
Net cash flows from capital and related financing activities 2,551,953 2,752,782
Cash flows from investing activities - investment income received 153,097 225,701
Net increase (decrease) in cash and investments 1,234,377)3,649,257
Beginning cash and investments 5,165,940 1,516,683
Ending cash and investments 3,931,563 5,165,940
Reconciliation of cash and investments to statement of net assets:
Current assets 1,387,484 698,253
Restricted assets 2,544,079 4,467,687
3,931,563 5,165,940
Reconciliation of earnings from operations to net cash
provided (used) by operating activities:
Earnings from operations 658,333 136,123
Adjustments to reconcile earnings from operations to net cash
flows from operating activities:
Depreciation 620,741 973,971
Amortization of debt issuance costs 5,929
Noncash expense - PERS relief 9,410 28,036
Increase in allowance for doubtful accounts 1,395 21,484
Increase) decrease in assets - receivables 28,001)30,532)
Increase (decrease) in liabilities:
Accounts payable 4,300 283,485)
Accrued payroll and related liabilities 26,787 41,139
Accrued annual leave 24,344)6,986
Other accrued liabilities 20)35,259)
Deferred revenue 175,956 91,219
Net pension/OPEB obligation 14,901 10,008
Net cash flows from operating activities 1,465,387 959,690
103
Exhibit L -20
CITY OF SEWARD
Harbor Enterprise Fund
Schedule of Composition of Net Assets
December 31, 2007
With Comparative Amounts for 2006)
Grants and other external contributions
Related accumulated amortization
Contributions from other funds
City - generated deficit
Total net assets
2007 2006
17,049,692 14,902,355
4,755,698) (4,400,694)
4,060,270 4,060,270
707,125 (1,655,733
15,647,139 12,906,198
104
Exhibit L -21
CITY OF SEWARD
Harbor Enterprise Fund
Combining Schedule of Harbor Capital Projects
Year Ended December 31, 2007
SBH
Harbor Repairs and
Expansion Renovations Totals
Funding sources:
State grants
Harbor Fund
Total funding sources
Capital outlay:
Contracted services
Other services and charges
Total capital outlay
2,147,337 2,147,337
2,419,097 - 2,419,097
2,419,097 2,147,337 4,566,434
380,626 188,627 569,253
2,038,471 1,958,710 3,997,181
2,419,097 2,147,337 4,566,434
105
Exhibit L -22
CITY OF SEWARD
Seward Marine Industrial Center Enterprise Fund
Statement of Net Assets
December 31, 2007
With Comparative Amounts for 2006)
Assets
Current assets:
Cash and cash equivalents
Accounts receivable
Total current assets
Property, plant and equipment:
Land and land rights
Buildings
Improvements other than buildings
Equipment
Docks and floats
Total property, plant and equipment in service
Less accumulated depreciation
Net property, plant and equipment in service
Deferred charges - unamortized debt issuance costs
Total assets
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accounts payable
Accrued payroll and related liabilities
Accrued interest
Current portion of bonds payable
Deferred revenue
Due to other funds
Total current liabilities
Noncurrent liabilities, net of current portion:
Bonds payable
Less unamortized deferred loss on refunding
Total noncurrent liabilities
Total liabilities
Net assets:
Invested in capital assets, net of related debt
Unrestricted (deficit)
Total net assets
Total liabilities and net assets
2007 2006
49,705 -
21 nA5 11 751
80,770 31,751
12,021,821 12,021,821
277,047 277,047
26,792,993 26,792,993
908,789 908,789
13,145,688 13,145,688
53,146,338 53,146,338
25,072,855 (24,430,164
28,073,483 28,716,174
2,410
28,154,253 28_ 750,335
12,062 4,380
1,279 5,871
558 811
53,127 151,509
19,526 17,926
21,320
86,552 201,817
169,218 222,345
38,425
140119 1 RIA 97(1
255,770 385,737
27,851,138 28,383,155
47,345 (18,557
27,898,483 28,364,598
28_ 154,253 28_
106
CITY OF SEWARD
Seward Marine Industrial Center Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2007
With Comparative Amounts for 2006)
Operating revenues:
Moorage
Wharfage
Boat lift fees
Storage
Rentals and leases
Power sales
Total operating revenues
Operating expenses:
Salaries and benefits
Purchased services
Supplies and maintenance
Administration and general
Depreciation
Total operating expenses
Loss from operations
Nonoperating revenues (expenses):
Intergovernmental
Investment income
Interest expense
Net nonoperating revenues (expenses)
Loss before transfers
Transfers in
Transfers out
Change in net assets
Beginning net assets
Ending net assets
2007
2,367
565
116,682
84,720
70,866
15,021
9n ?? I
77,761
61,089
50,139
197,147
642,691
1,028,827
738,606)
463
8,026
47,903
39,414)
778,020)
Exhibit L -23
2006
3,494
2,862
106,115
94,294
68,784
n0 i
1
74,740
53,600
37,498
175,542
886,429
1,227,809
941,169)
5,820
50,965
45,145
986,314)
364,734 260,484
52,829 (51,555
466,115) (777,385)
28,364,598 29,141,983
27,898,483 28,364,598
Of the total depreciation expense of $642,691 above, $523,549 was attributable to capital assets that
were funded with capital contributions.)
107
Exhibit L -24
CITY OF SEWARD
Seward Marine Industrial Center Enterprise Fund
Statement of Cash Flows
Year Ended December 31, 2007
With Comparative Amounts for 2006)
Ending cash and investments
Reconciliation of loss from operations to net cash provided (used)
by operating activities:
Loss from operations
Adjustments to reconcile loss from operations to net cash
flows from operating activities:
Depreciation
Noncash expense - PERS relief
Amortization of debt issuance costs
Increase) decrease in assets - accounts receivable
Increase (decrease) in liabilities:
Accounts payable
Accrued payroll and related liabilities
Deferred revenue
Due to other funds
Net cash flows from operating activities
49,705 -
738,606) (941,169)
642,691 886,429
463 -
2,410 2,410
686 (9,885)
7,682
2007 2006
Cash flows from operating activities:
1,600 2,186
Receipts from customers and users 292,507 278,941
Payments to suppliers 122,456)85,896)
Payments to employees 81,890)71,891)
Payments for interfund services used 197,147 175,542
Net cash flows from operating activities 108,986 54,388
Cash flows from noncapital financing activities:
Transfers in 364,734 260,484
Transfers out 52,829 51,555)
Net cash flows from noncapital financing activities 311,905 208,929
Cash flows from capital and related financing activities:
Principal payments on long -term debt 151,509)147,575)
Interest payments on long -term debt 9,731 12,786
Net cash flows from capital and related financing activities 161,240 160,361
Cash flows from investing activities - investment income received 8,026 5,820
Net increase in cash and investments 49,705
Beginning cash and investments
Ending cash and investments
Reconciliation of loss from operations to net cash provided (used)
by operating activities:
Loss from operations
Adjustments to reconcile loss from operations to net cash
flows from operating activities:
Depreciation
Noncash expense - PERS relief
Amortization of debt issuance costs
Increase) decrease in assets - accounts receivable
Increase (decrease) in liabilities:
Accounts payable
Accrued payroll and related liabilities
Deferred revenue
Due to other funds
Net cash flows from operating activities
49,705 -
738,606) (941,169)
642,691 886,429
463 -
2,410 2,410
686 (9,885)
7,682 2,704
4,592)2,849
1,600 2,186
21,320 88
108,986 54,388)
108
Exhibit L -25
CITY OF SEWARD
Seward Marine Industrial Center Enterprise Fund
Schedule of Composition of Net Assets
December 31, 2007
With Comparative Amounts for 2006)
2007
Grants and other external contributions
Related accumulated amortization
Contributions from other funds
City - generated deficit
Total net assets
35,725,414
2006
35,725,414
22,716,299) (22,192,750)
16,218,490 15,853,756
1,329,122 (1,021,822
27,898,483 28,364,598
109
Exhibit L -26
CITY OF SEWARD
Parking Revenue Enterprise Fund
Statement of Net Assets
December 31, 2007
With Comparative Amounts for 2006)
Assets
Current assets - cash and investments
Property, plant and equipment:
Improvements other than buildings
Equipment
Total property, plant and equipment in service
Less accumulated depreciation
Net property, plant and equipment in service
Total assets
Liabilities and Net Assets
Current liabilities - accounts payable
Net assets:
Invested in capital assets, net of related debt
Unrestricted
Total net assets
Total liabilities and net assets
2007 2006
325,637 278,695
513,540 513,540
15,490 15,490
529,030 529,030
470,785 (464,475
58,245 64,555
383,882 343,250
5,033 24
58,245 64,555
320,604 278,671
378,849 343,226
383,882 343,250
110
CITY OF SEWARD
Parking Revenue Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2007
With Comparative Amounts for 2006)
Operating revenues - parking fees
Operating expenses:
Salaries and employee benefits
Supplies and maintenance
Rents and leases
Administration and general
Depreciation
Total operating expenses
Earnings from operations
Nonoperating revenues - investment income
Earnings before transfers
Transfers out
Change in net assets
Beginning net assets
Ending net assets
Exhibit L -27
2007 2006
182,133 175,792
98,838 88,066
10,554 8,124
13,000 13,000
19,481 12,132
6,310 5,210
148,183 126,532
33,950 49,260
16,244 12,567
50,194 61,827
14,571 (14,063
35,623 47,764
343,226 295,462
378,849 343,226
111
Exhibit L -28
CITY OF SEWARD
Parking Revenue Enterprise Fund
Statement of Cash Flows
Year Ended December 31, 2007
With Comparative Amounts for 2006)
Cash flows from noncapital financing activities -
transfers out
Cash flows from capital and related financing activities -
acquisition of property, plant and equipment
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
Increase (decrease) in liabilities -
accounts payable
Net cash flows from operating activities
14,571 (14,063
6,990
16,244 12,567
46,942 44,412
278,695 234,283
325,637 278,695
33,950 49,260
6,310 5,210
5,009 (1,572
45,269 52,898
112
2007 2006
Cash flows from operating activities:
Receipts from customers and users 182,133 175,792
Payments to suppliers 18,545)22,696)
Payments to employees 98,838)88,066)
Payments for interfund services used 19,481 12,132
Net cash flows from operating activities 45,269 52,898
Cash flows from noncapital financing activities -
transfers out
Cash flows from capital and related financing activities -
acquisition of property, plant and equipment
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
Increase (decrease) in liabilities -
accounts payable
Net cash flows from operating activities
14,571 (14,063
6,990
16,244 12,567
46,942 44,412
278,695 234,283
325,637 278,695
33,950 49,260
6,310 5,210
5,009 (1,572
45,269 52,898
112
Exhibit L -29
CITY OF SEWARD
Parking Enterprise Fund
Schedule of Composition of Net Assets
December 31, 2007
With Comparative Amounts for 2006)
2007 2006
Grants and other external contributions
Related accumulated amortization
Contributions from other funds
City - generated equity
Total net assets
425,891 425,891
425,891)425,891)
7,650 7,650
371,199 335,576
378,849 343,226
113
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114
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.
115
Exhibit M -1
CITY OF SEWARD
Motor Pool Internal Service Fund
Statement of Net Assets
December 31, 2007
With Comparative Amounts for 2006)
Assets 2007 2006
Current assets:
Cash and investments $ 691,100 103,350
Interest receivable 72,463 28,116
Current portion of interfund loan receivable 55,335 99,682
Total current assets 818,898 231,148
Interfund loan, net of current portion 1,315,242 1,370,576
Property, plant and equipment:
Equipment and vehicles 2,988,840 3,014,453
Less accumulated depreciation (1,832,560 (1,632,202
Total property, plant and equipment 1,156,280 1,382,251
Total assets $ 3,290,420 2,983,975
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accrued interest 1,386 2,030
Current portion of capital lease obligation 46,281 59,472
Total current liabilities 47,667 61,502
Capital lease obligation, net of current portion - 46,282
Total liabilities 47,667 107,784
Net assets:
Invested in capital assets, net of related debt 1,109,999 1,276,497
Unrestricted 2,132,754 1,599,694
Total net assets 3,242,753 2,876,191
Total liabilities and net assets $ 3,290,420 2,983,975
116
Exhibit M -2
CITY OF SEWARD
Motor Pool Internal Service Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2007
With Comparative Amounts for 2006)
2007
Operating revenues - vehicle rental
Operating expenses:
Depreciation
Freight
Total operating expenses
Earnings from operations
Nonoperating revenues (expenses):
Gain on disposition of capital assets
Investment income
Interest expense
Net nonoperating revenues (expenses)
Earnings before transfers
Transfers in
Change in net assets
Beginning net assets
Ending net assets
2006
492,820 516,227
225,971 205,714
6,256
225,971 211,970
266,849 304,257
2,300 5,920
101,468 68,986
4,055 6,598
99,713 68,308
366,562 372,565
4,946
366,562 377,511
2,876,191 2,498,680
3,242,753 2,876,191
Of the total depreciation expense of $225,971 above, $0 was attributable to capital assets that were
funded with capital contributions.)
117
Exhibit M -3
CITY OF SEWARD
Motor Pool Internal Service Fund
Statement of Cash Flows
Year Ended December 31, 2007
With Comparative Amounts for 2006)
2007 2006
Cash flows from operating activities:
Receipts from interfund charges $ 492,820 516,227
Payments to suppliers - (6,256
Net cash flows from operating activities 492,820 509,971
Cash flows from capital and related financing activities:
Principal payments on long -term debt 59,473)56,519)
Interest payments on long -term debt 4,699)7,654)
Acquisition of equipment and vehicles 587,919)
Proceeds from sale of capital assets 2,300 5,920
Transfers in 4,946
Net cash flows from capital and
related financing activities 61,872 641,226
Cash flows from investing activities:
Interfund loan receipts (payments) 99,681 (1,470,258)
Investment income received 57,121 40,870
Net cash flows from investing activities 156,802 (1,429,388
Net increase (decrease) in cash and investments 587,750 (1,560,643)
Beginning cash and investments 103,350 1,663,993
Ending cash and investments $ 691,100 103,350
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 -
Depreciation
Net cash flows from operating activities
266,849
225,971
304,257
205,714
492,820 509,971
118
Exhibit M -4
CITY OF SEWARD
Motor Pool Internal Service Fund
Schedule of Composition of Net Assets
December 31, 2007
With Comparative Amounts for 2006)
Grants and other external contributions
Related accumulated amortization
Contributions from other funds
City - generated equity
Total net assets
2007
97,289
97,289)
832,324
2,410,429
2006
97,289
97,289)
832,324
2,043,867
3,242,753 2,876_191
119
Exhibit M -5
CITY OF SEWARD
Compensated Annual Leave hiternal Service Fund
Statement of Net Assets
December 31, 2007
With Comparative Amounts for 2006)
Assets
Current assets - cash and investments
Liabilities and Net Assets
Liabilities:
Current liabilities - accrued annual leave
Long -term accrued annual leave
Total liabilities
Net assets
Total liabilities and net assets
2007 2006
328,276 348,968
86,235 81,137
242,041 267,831
328,276 348,968
328,276 348,968
120
CITY OF SEWARD
Compensated Annual Leave Internal Service Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2007
With Comparative Amounts for 2006)
Operating revenues - interfund charges
Operating expenses - salaries and benefits
Change in net assets
Beginning net assets
Ending net assets
Exhibit M -6
2007 2006
309,579 305,256
309,579 305,256
121
Exhibit M -7
CITY OF 5EWARD
Compensated Annual Leave Internal Service Fund
Statements of Cash Flows
Year Ended December 31, 2007
With Comparative Amounts for 2006)
2007
Cash flows from operating activities:
Receipts from interfund charges
Payments to employees
Net cash flows from operating activities
Beginning cash and investments
Ending cash and investments
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
decrease) in accrued annual leave
Net cash flows from operating activities
309,579
330,271
20,692)
2006
305,256
253,352
51,904
348,968 297,064
3_ 3_
20,692 51,904
20,692) 51,904
122
Exhibit N -1
CITY OF SEWARD
Teen Council Agency Fund
Schedule of Changes in Assets and Liabilities
Year Ended December 31, 2007
Assets
Cash and investments
Liabilities
Accounts payable
Due to Teen Council
Balance at Balance at
January 1, December 31,
2007 Additions Deletions 2007
25,074 26,902 24,564 27,412
1,868 - 241 1,627
23,206 26,902 24,323 25,785
Total liabilities $ 25,074 26,902 24,564 27,412
123
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124
Exhibit O -1
CITY OF SEWARD
Schedule of Capital Assets
December 31, 2007
With Comparative Amounts for 2006)
Capital assets:
Land and land improvements
Buildings
Improvements other than buildings
Equipment
Construction in progress
Total capital assets
2007
5,398,928
63,422,243
15,357,686
8,451,450
3,406,983
2006
4,568,299
62,680,654
14,854,565
7,776,302
3,053,316
96,037,290 92,933,136
125
Exhibit 0-2
CITY OF SEWARD
Schedule of Changes in Capital Assets
Year Ended December 31, 2007
Balance at
January 1,
2007 Additions Deletions
Balance at
December 31,
2007
Land and land improvements 4,568,299 830,629 -5,398,928
Buildings 62,680,654 741,589 -63,422,243
Improvements other than buildings 14,854,565 503,121 -15,357,686
Equipment 7,776,302 705,950 30,802 8,451,450
Construction in progress 3,053,316 1,898,385 1,544,718 3,406,983
92,933,136 4,679,674 1,575,520 96,037,290
126
Exhibit 0-3
CITY OF SEWARD
Schedule of Capital Assets by Function and Activity
December 31, 2007
Function and Acti
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
Building inspector
City shop
Total public works
Hospital
Parks and recreation
Library
1,214,113 1,214,113
Improve -
22,006
156,720
Land and ments
1,023,573
Land
1,940,944
Other than
2,600
Improvements Buildings Buildings FAuipment Total
1,180,293
54,323 54,323
56,583 56,583
48,132 48,132
67,231 67,231
5,860 5,860
2,382,489 16,291 54,169 2,452,949
47,168,050 2,925,391 4,137,182 54,230,623
1,479,080 8,005,937 53,025 9,538,042
1,473,936 1,473,936
5,398,928 68,868 5,467,796
5,398,928 52,572,423 10,947,619 4,476,505 73,395,475
1,214,113 1,214,113
22,006 22,006
156,720 156,720
1,023,573 917,371 1,940,944
2,600 2,600
6,300 6,300
1,180,293 2,162,390 3,342,683
116,945 3,324,312 538,696 3 ,979,953
3,621 3,621
771,823 53,645 825,468
888,768 3,324,312 595,962 4,809,042
7,757,029 54,375 1,034,959 8,846,363
297,064 1,018,580 100,890 1,416,534
726,666 12,800 80,744 820,210
Total capital assets allocated
to functions $ 5,398,928 63,422,243 15,357,686 8,451,450 92,630,307
Construction in progress 3,406,983
Total capital assets $ 96,037,290
127
Exhibit 0-4
CITY OF SEWARD
Schedule of Changes in Capital Assets by Function and Activity
Year Ended December 31, 2007
Capital Capital
Assets at Assets at
January 1, December 31,
Function and Activity 2007 Additions Deletions 2007
General government:
City Council/Mayor 54,323 54,323
City manager 50,734 5,849 56,583
City clerk 45,399 2,733 48,132
Finance 92,039 5,994 30,802 67,231
Community development 5,860 5,860
Municipal building 2,346,192 106,757 2,452,949
Alaska Sealife Center 53,074,093 1,156,530 54,230,623
General services 9,524,543 13,499 9,538,042
Community and Senior Center 926,748 547,188 1,473,936
Non - departmental 4,637,167 830,629 5,467,796
Total general government 70,757,098 2,669,179 30,802 73,395,475
Public safety:
Police 1,206,580 7,533 1,214,113
Jail 19,281 2,725 22,006
Animal control 156,720 156,720
Fire 1,855,704 85,240 1,940,944
Building inspection 2,600 2,600
Seward Volunteer Ambulance Corp 6,300 6,300
Total public safety 3,247,185 95,498 3,342,683
Public works:
Streets 3,979,953 - - 3,979,953
Engineering 3,621 - - 3,621
City shop 811,803 13,665 - 825,468
Total public works 4,795,377 13,665 - 4,809,042
Hospital 8,846,363 - - 8,846,363
Parks and recreation 1,413,587 2,947 - 1,416,534
Library 820,210 - - 820,210
Construction in progress 3,053,316 1,898,385 1,544,718 3,406,983
92,933,136 4,679,674 1,575,520 96,037,290
128
Exhibit P -1
Grant Title
Department of Agriculture
NRCS Flood Mitigation/Engineering
Volunteer Firefigher Assistance Grant
Total Department of Agriculture
Department of Interior
Passed through State of Alaska Department
of Natural Resources:
National Fire Plan/Rural Fire Assistance Program
Hoben Park Restoration
Total Department of Interior
National Endowment for the Hunuutities
The Virtual History of Seward Database
Department of Transportation
Passed through State of Alaska Department
of Transportation and Public Facilities:
Impaired Driving Enforcement
Impaired Driving Enforcement
Seatbelt & DUI Enforcement
Total Department of Transportation
Environmental Protection Agency
Passed through State of Alaska Department
of Environmental Conservation:
Engineering of Water Tank and Line Extension
3rd Avenue Water Main Loan (83% federal)
Total Environmental Protection Agency
Denali Conmtission
Seward Long -Terns Care Facility
Department of Homeland Security
Passed through State of Alaska Department
of Military and Veterans Affairs:
Emergency Operations Pkin
2002 Flood Disaster
Hazard Mitigation Plan
Oct 06 Southern Alaska Storm Disaster/Flood
Fireball Exhaust System Upgrade
Total Department of Homeland Security
Total Federal Financial Assistance
CITY OF SEWARD
76911 297,400 123
Schedule of Expenditures of Federal Awards
123
66.468 769031 2,888,400
Year Ended December 31, 2007
175,181 2,120,728 81,137 (2)
Catalog of
2,026,807 175,181 2,120,728
Federal January 1,
90.100 0143 -DC- 2004 -I28
December 31,
Domestic Total 2007 Federal 2007
Assistance Grant Grant Receivable Share of Federal Receivable
Number Number Award Deferred Expenditures Receipts Deferred
74,100
10.904 68- 0150 -9 -024 $ 500,000
55,575
24,505 7,013 17,492
10.675 39809 5,873 5,873 5,873
97.036 DR- 1669 -AK
30,378 12,886 17,492
15.228 701816G417
15.904 06472
878
23,557
878 878
1,798 1,798
2,676 2,676
45.129 31 -03
20.600 154AL 07 -14 -01
20.600 154AL 07 -14 -01
20.600 PT07- 06 -01 -1
1,102 1,102 1,102
6,329 833 - 833
517 - 517 517
1,045 - 1,045 1,045
833 1,562 2,395
66.606 76911 297,400 123 123
66.468 769031 2,888,400 2,026,684 175,181 2,120,728 81,137 (2)
2,026,807 175,181 2,120,728 81.260
90.100 0143 -DC- 2004 -I28 1,600,000 623,095 623,095
97.073 SHSGP H 03 -21 15,997 15,997 15,997
97.039 1445.0011 74,100 55,575 55,575
97.039 HMPG - 1445.0003 11,250 53 53
97.036 DR- 1669 -AK 424,078 378,997 342,543 36,454
97.044 EMW- 2006 -FG -12543 71,250 71,250 71,250
521,872 485,365 36,507
2,650,735 732,771 3,248,247 135,259
129
CITY OF SEWARD
Schedule of State Financial Assistance
Year Ended December 31, 2007
January 1,
Grant
Grant Title Number
Department of Commerce, Community and Economic Development
T -Dock & Bulkhead 06 -DC -160
T -Dock & Bulkhead Phase II 07 -DC -504
City Hall Facilities 01 -MG -141
Fire Hydrant Upgrade 02 -MG -128
Alutiiq Pride Shellfish Hatchery 07 -DC -260
Seward Senior & Community Center Repairs 07 -DC -261
Levee Construction 08 -DC -411
Shared Fisheries and Landing Tax N/A
Total Department of Commerce, Community and
4,533
Econcomic Development
23,558
Department of Education and Early Development
43,574
Library Grant PLA -07- 770 -68
Library Grant PLA -08- 770 -68
Total Department of Education and Early
18
Development
43,574
Department of Military and Veteran Affairs
221,058 12,169
2006 South Central Storm Disaster FEMA -AK -DR 1669
2002 Flood Disaster 1445.0011
2006 South Central Storm Disaster Admin AK -06 -217
2006 South Central Storm Disaster AK -06 -217 PW# 182
Hazard Mitigation Plan HMPG - 1445.0003
January 1,State
Total 2007 Share of
Grant Receivable Expendi-
Award Deferred tures
Exhibit 0 -1
December 31,
2007
State Receivable
Receipts Deferred
2,000,000 56,764 947,337 340,913 663,188
1,200,000 1,200,000 1,200,000 -
75,532 5,517 7,811 13,328 -
73,546 10,812 9,113 1,699
150,000 31,345 23,425 54,770 -
50,000 50,000 50,000
1,000,000 109,339 109,339
4,533 4,533 4,533
93,626 2,353,257 1,781,996 664,887
6,250 6,250)6,250
6,250 6,350 6,350 -
55918
6,250 12,600 6,350
870,457
Department of Environmental Conservation
126,332 114,181 12,151
18,525 18,525 18,525 -
23,558
76912
23,558 23,558
427,374 43,574 21,220 64,794 -
3,750 18 18
43,574 189,653 221,058 12,169
Department of Transportation and Public Facilities
Harbor Expansion 55918 2,925,000 19,507 19,507
Department of Environmental Conservation
Drinking Water Compliance Study & Preliminary Des:76912 99,800 26,872 26,872
Engineering of Water Tank and Line Extension 76911 99,200 41 41
Water Distribution System 76909 24,800 1,240 1,240
Total Department of Environmental Conservation 1,281 26,872 28,153
Department of Revenue
Fish Tax N/A 316,704 316,704 316,704
Municipal Energy Assistance N/A 198,412 198,412 198,412
Liquor Licenses N/A 19,150 19,150 19,150
Total Department of Revenue 534,266 534,266
Department of Administration
PERS Relief N/A 79,185 79,185 79,185
Total State Financial Assistance 151,738 3,195,833 2,622,855 724,716
Major program
130
CITY OF SEWARD
Notes to the Schedules of Expenditures of Federal Awards
and State Financial Assistance
Year Ended December 31, 2007
1) 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.
2) Environmental Protection Agency Loan Receivable
At December 31, 2006, the City had incurred $2,697,696 of costs on the 3rd Avenue Water Main
project which is being funded with an Alaska Department of Environmental Conservation loan.
83% of the loan is funded by the Environmental Protection Agency and accordingly, $2,239,088
was reflected in the Schedule of Expenditures of Federal Awards. During 2007, the City elected to
not be reimbursed for a portion of the 2006 expenses. Therefore, the City has adjusted beginning
accounts receivable to $2,026,684 to remove the federal portion of 2006 expenses not requested for
reimbursement.
131
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132
CITY OF SEWARD
Statistical Section
This part of the City of Seward's comprehensive annual financial report presents detailed information as a
context for understanding what the information in the financial statements, note disclosures, and required
supplementary information says about the City's overall financial health.
Contents Page
Financial Trends
These schedules contain trend information to help the reader understand how the City's financial
performance and well -being have changed over time.
Table 1 Net Assets by Component 134
Table 2 Changes in Net Assets 135 -136
Table 3 Fund Balances of Governmental Funds 137
Table 4 Changes in Fund Balances of Governmental Funds 138
Table 5 General Fund Revenues by Source 139
Table 6 General Fund Tax Revenues by Source 140
Revenue Capacity
These schedules contain information to help the reader assess the City's most significant local
revenue sources, sales and property tax.
Table 7 Property Tax Rates 141
Table 8 Property Tax Levies and Collections 142
Table 9 Assessed and Estimated Actual Value of Taxable Property 143
Table 10 Principal Property Taxpayers 144
Table 11 Principal Taxable Sales by Line of Business 145
Debt Capacity
These schedules present information to help the reader assess the affordability of the City's current
level of outstanding debt and the City's ability to issue additional debt.
Table 12 Ratios of Outstanding Debt by Type 146
Table 13 Ratio of Net General Obligation Bonded Debt to Assessed Value and Net General
Table 19 Demographic and Economic Statistics
Obligation Bonded Debt per Capita 147
Table 14 Computation of Direct and Overlapping Bonded Debts 148
Table 15 Legal Debt Margin 149
Table 16 Ratio of Annual Debt Service Expenditures for General Obligation Debt to Total
158
Table 25 Miscellaneous Statistics
General Fund Expenditures 150
Table 17 Revenue Bond Coverage - Electric Enterprise Fund 151
Table 18 Revenue Bond Coverage - Harbor Enterprise Fund 152
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the
environment in which the City's financial activities take place.
Table 19 Demographic and Economic Statistics 153
Table 20 Seward Area Principal Employers 154
Table 21 Full -Time Equivalent Employees by Fund 155
Table 22 Operating Indicators by Function 156
Table 23 Capital Asset Statistics by Function 157
Table 24 Property Value, Construction, and Bank Deposits 158
Table 25 Miscellaneous Statistics 159
133
Table 1
CITY OF SEWARD
Net Assets by Component
Last Five Fiscal Years
accrual basis of accounting)
amounts expressed in thousands)
Business -type Activities:
Invested in capital assets, net of related debt $ 67,048 66,690 66,155 64,760 65,440
Restricted - - - - 16
Unrestricted 10,354 9,727 12,089 12,837 14,595
Total business -type activities net assets $ 77,402 76,417 78,244 77,597 80,051
Primary government
Invested in capital assets, net of related debt $ 124,446 122,416 122,650 121,423 123,456
Restricted - - - - 16
Unrestricted 15,363 16,363 18,035 18,738 19,621
Total primary government net assets $ 139,809 138,779 140,685 140,161 143,093
134
2003 2004 2005 2006 2007
Governmental Activities:
Invested in capital assets, net of related debt $57,398 55,726 56,495 56,663 58,016
Restricted
Unrestricted 5,009 6,636 5,946 5,901 5,026
Total governmental activities net amounts $62,407 62,362 62,441 62,564 63,042
Business -type Activities:
Invested in capital assets, net of related debt $ 67,048 66,690 66,155 64,760 65,440
Restricted - - - - 16
Unrestricted 10,354 9,727 12,089 12,837 14,595
Total business -type activities net assets $ 77,402 76,417 78,244 77,597 80,051
Primary government
Invested in capital assets, net of related debt $ 124,446 122,416 122,650 121,423 123,456
Restricted - - - - 16
Unrestricted 15,363 16,363 18,035 18,738 19,621
Total primary government net assets $ 139,809 138,779 140,685 140,161 143,093
134
Table 2
CITY OF SEWARD
Changes in Net Assets
Last Five Fiscal Years
accrual basis of accounting)
Business -type activities:
Electric
2003 2004 2005 2006 2007
Expenses:
1,346,099 687,542 760,363 813,245 859,799
Governmental activities:
706,332 705,508 693,096 747,484
General government 1,355,573 1,731,427 1,770,306 2,158,969 1,161,765
Public safety 2,286,556 2,299,873 2,383,911 2,440,488 2,980,785
Public works 1,145,730 1,265,153 1,383,178 1,704,296 2,650,977
Parks and recreation 996,112 1,046,681 1,099,556 1,075,945 981,222
Library 316,679 358,364 367,077 378,487 384,835
Hospital 247,052 440,997 468,703 924,795 535,226
Sealife Center 1,839,836 1,804,367 1,028,302 1,578,315 1,672,365
Unallocated interest 466,382 371,982 432,438 347,367 306,989
Total governmental activities expenses 8,653 9,318,844 8,933,471 10,608,662 10,674,164
Business -type activities:
Electric 5,926,703 6,419,925 6,863,724 9,195,187 8,029,054
Water 1,346,099 687,542 760,363 813,245 859,799
Wastewater 706,332 705,508 693,096 747,484
Harbor 2,441,498 2,282,991 2,402,810 2,648,290 2,457,216
Seward Marine Industrial Center 1,541,608 1,591,311 1,521,930 1,278,774 1,076,730
Parking 75,983 95,209 112,013 117,150 129,623
Total business -type activities 11,331,891 11,783,310 12,366,348 14,745,742 13,299,906
Total primary government expenses 19,985,811 21,102,154 21,299,819 25,354,404 23,974,070
Program Revenues:
10,654,169 11,442,374 14,787,683 14,950,274 16,093,163
Governmental activities:
12,763,770 14,295,099 17,369,037 18,869,159 20,051,287
Charges for services:
General government 468,421 276,173 61,798 106,589 400,074
Public safety 683,916 737,338 687,763 761,316 706,575
Public works 149,464 116,742 219,843 239,984 111,756
Parks and recreation 471,396 548,283 565,168 529,289 592,063
Library 8,144 8,218 8,601 8,677 7,736
Operating grants and contribution 182,090 112,945 157,809 148,785 680,176
Capital grants and contributions 146,170 1,053,026 880,372 2,124,245 1,459,744
Total governmental activities program revenues 2,109,601 2,852,725 2,581,354 3,918,885 3,958,124
Business -type activities
Electric 6,539,213 6,943,720 7,381,178 7,979,436 8,428,106
Water 1,445,553 769,970 1,019,832 1,008,765 996,633
Wastewater 702,770 791,988 811,546 800,168
Harbor 1,795,350 1,818,674 1,943,424 2,499,065 2,751,916
Seward Marine Industrial Center 330,249 318,009 324,828 286,640 290,221
Parking 114,008 167,101 177,098 175,792 182,133
Operating grants and contributions 1,260,476 65,247
Capital grants and contributions 429,796 722,130 3,149,335 928,554 2,578,739
Total business -type activities program revenues:10,654,169 11,442,374 14,787,683 14,950,274 16,093,163
Total primary government program revenues 12,763,770 14,295,099 17,369,037 18,869,159 20,051,287
Net (expenses) /revenue:
Governmental activities 6,544,319)6,466,119)6,352,117)6,689,777)6,716,040)
Business -type activities 677,722 340,936 2,421,335 204,532 2,793,257
Total primary government net expense 7,222,041 6,807,055 3,930,782 6,485,245 3,922,783
135
CITY OF SEWARD
Changes in Net Assets
Last Five Fiscal Years
accrual basis of accounting)
continued
Table 2, continued
2003 2004 2005 2006 2007
General Revenues and Other
Changes in Net Assets:
Governmental activities:
Taxes:
Sales taxes
Property taxes
Other taxes
Grants and entitlements
Investment income
Other
Transfers
Total governmental activities
Business -type activities:
Investment income
Other
Transfers
Total business -type activities
Total primary government
Changes in Net Assets:
Governmental activities
Business -type activities
Total primary government
Beginning net assets
Ending net assets
Change in net assets
2,894,455 3,123,314 3,411,283 3,518,435 4,068,600
670,297 973,948 802,539 864,906 862,258
77,135 89,473 381,270 388,284 419,771
462,249 324,452 339,074 388,766 538,799
151,035 170,179 218,102 436,241 314,642
4,754,704 882,501 287,018)
816,854 857,313 1,279,903 1,502,583 989,801
9,826,729 6,421,180 6,432,171 6,812,197 7,193,871
139,432 116,165 323,821 650,078 651,763
71,125 22,555 362,218
816,854 857,313 1,279,903 1,502,583 989,801
606,297 718,593 593,864 852,505 338,038
9,220,432 5,702,587 5,838,307 5,959,692 6,855,833
3,282,410 44,939)80,054 122,420 477,831
1,284,019 1,059,529 1,827,471 647,973 2,455,219
1,998,391 1,104,468 1,907,525 525,553 2,933,050
137,884,486 139,882,877 138,778,409 140,685,934 140,160,381
139,882,877 138,778,409 140,685,934 140,160,381 143,093,431
1,998,391 1,104,468 1,907,525 525,553 2,933,050
136
General Fund:
Reserved
Unreserved:
Designated
Undesignated
Total General Fund
All Other Governmental Funds:
Reserved - debt service
Unreserved, reported in:
Special revenue funds
Capital projects funds
Total all Other Governmental Funds
v Total all Governmental Funds
Percentage Change - General Fund
Undesignated only)
Percentage Change - General Fund
Percentage Change - Other Governmental
Percentage Change - All Governmental Funds
CITY OF SEWARD
Fund Balances of Governmental Funds
Last Ten Fiscal Years
modified accrual basis of accounting)
Table 3
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
4,718 6,280 35,869 85,786 83,480 369,415 552,316 491,535 388,409 458,860
1,679,301 1,835,778 2,098,242 2,126,984 2,161,585 2,104,417 2,019,418 2,569,418 2,569,418 2,126,418
1,248,023 1,735,415 2,563,352 2,772,989 3,007,335 2,967,799 3,169,462 2,819,780 1,076,827 1,433,552
2,932,042 3,577,473 4,697,463 4,985,759 5,252,400 5,441,631 5,741,196 5,880,733 4,034,654 4,018,830
242,332 336,095 564,909 685,422 789,298 811,246 554,190 688,006 661,787 945,478
32,152 29,320 47,346 41,404 171,775 139,682 116,732 22,148 510,560)34,649)
1,318,692 925,085 642,131 434,275 494,392 543,967 596,587 483,827 1,635,625 3( 15,698
1,593,176 1,290,500 1,254,386 1,161,101 1,455,465 1,494,895 1,267,509 1,193,981 1,786,852 595,131
4,525,218 4,867,973 5,951,849 6,146,860 6,707,865 6,936,526 7,008,705 7,074,714 5,821,506 4,613,961
32.9 %n 39.1%47.7%8.2%8.5%1.3%6.8 %11.0%61.8%33.1%
21.1%22.0%31.3%6.1%5.3%3.6%5.5%2.4%31.4%0.4%
74.4 %19.0%2.8%7.4%25.4%2.7%15.2%5.8%49.7%66.7%
54.5%7.6%22.3%3.3 %n 9.1%3.4%1.0%0.9%17.7%20.7%
w
00
Revenues:
Taxes
Licenses and permits
Intergovernmental
Charges for services
Investment income
Other revenues
Total Revenues
Expenditures:
General government
Public safety
Public works
Parks and recreation
Library
Hospital and long -term care
Non - allocated capital outlay
Debt service:
Principal
Retirement benefits
Interest and other costs
Total expenditures
Excess of revenues over
under) expenditures
Other financing sources (uses):
Transfers in
Transfers out
Net bond proceeds
Total other financing sources (uses)
Net change in fund balance
Beginning fund balances
Ending fund balances
Net change in fund balances
Debt service as a percentage of
noncapital expenditures
Total non - capital expenditures
CITY OF SEWARD
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
modified accrual basis of accounting)
Table 4
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
3,293,763 3,584,389 3,953,139 3,913,556 4,045,976 3,637,867 4,201,664 4,581,860 4,756,073 5,363,265
115,106 144,003 139,871 134.396 169,979 286,837 254,613 164,628 278,515 144,654
7,838,245 1,344,510 1,667,366 2,040,493 1,276,577 1,239,445 1,935,598 1,891,500 3,057,175 2,072,811
1,540,141 1,475,581 2,179,832 2,161,177 1,783,271 1,828,901 1,824,270 1,883,636 2,078,065 2,375,767
464,279 271,856 484,089 486,317 184,140 151,035 170,179 218,102 436,241 314,642
403,666 501,688 611,450 355,726 840,732 284,505 152,332 170,791 256,427 125,186
13,655,200 7,322,027 9,035,747 9,091,665 8,300,675 7,428,590 8,538,656 8,910,517 10,862,496 10,396,325
2,006,486 1,569,272 1,601,677 1,743,428 1,972,672 1,914,692 2,050,449 2,736,435 2,737,586 2,956,706
1,891,838 1,975,242 2,463,209 2,178,338 2,171,513 2,408,441 2,987,078 2,878,864 2,792,296 3,011,920
831,248 863,536 981,027 1,152,948 1,324,885 1,377,601 1,401,447 1,425,348 1,962,053 2,678,493
630,079 603,241 715,409 801,596 903,707 1,006,621 998,232 1,068,880 1,074,141 1,084,002
234,033 234,882 251,865 258,832 268,384 283,721 305,758 313,348 332,577 339,222
12,053,602 43,729 6,614 96,935 320,119 66,058 1,615,516 1,114,693
970,108 1,176,757 1,163,511 462,532
115,275 281,475 354,123 390,005 432,653 527,612 955,591 800,928 892,836 854,977
164,143 1,805,475 293,114
163,231 510,792 486,874 467,974 448,676 498,415 386,182 397,610 402,274 260,544
17,925,792 7,052,277 8,037,555 8,156,632 7,985,022 8,114,038 9,404,856 9,851,614 13,614,754 12,593,671
4,270,592)269,750 998,192 935,033 315,653 685,448)866,200)941,097)2,752,258)2,197,346)
598,366 1,233,844 1,490,259 1,500,749 1,629,793 1,836,606 2,258,432 3,126,673 3,731,769 3,631,316
1,743,590)1,160,839)1,523,516)2,240,771)1,384,441)1,039,752)1,401,119)2,119,567)2,232,719)2,641,515)
95,937 81,066
1,145,224 73,005 33,257 (740,022 245,352 892,791 938,379 1,007,106 1,499,050 989,801
5,415,816 342,755 964,935 195,011 561,005 207,343 72,179 66,009 1,253,208 (1,207,545
9,941,034 4,525,218 4,986,914 5,951,849 6,146,860 6,729,183 6,936,526 7,008,705 7,074,714 5,821,506
4,525,218 4,867,973 5,951,849 6,146,860 6,707,865 6,936,526 7,008,705 7,074,714 5,821,506 4,613,961
5,415,816 342,755 964,935 195,011 561,005 207,343 72,179 66,009 1,253,208 1,207,545
4.98%15.10%13.99%13.98%13.27 %14.68%17.33%16.18%34.84%13.99%
5,593,684 5,246,173 6,013,187 6,135,142 6,641,161 6,991,076 7,742,964 8,422,875 8,898,653 10,070,343
Table 5
CITY OF SEWARD
General Fund Revenues by Source
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.
a) Beginning 2003, GASB Statement No. 34 requires inter -fund payments -in- lieu -of -tax to be classifed as transfers rather than revenues.
Licenses
Fiscal and Inter-Charges for Fines Investment
Year Taxes (a)Permits governmental Services and Bails Income Other Total
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 7,874,646
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
2006 4,756,073 200,015 1,066,093 2,078,065 16,073 392,379 175,079 8,683,777
2007 5,363,265 144,654 1,189,258 2,375,767 17,611 285,066 97,445 9,473,066
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 classifed as transfers rather than revenues.
Table 6
CITY OF SEWARD
General Fund Tax Revenues by Source
Last Ten Fiscal Periods *
Payments- Hotel/
Fiscal Property Sales Tax in- Lieu -of- Motel Tax Other
Year Tax (1) Tax (2) (3) (4) Total
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
2006 847,875 3,518,435 77,714 310,570 1,479 4,756,073
2007 873,513 4,068,600 76,609 343,162 1,381 5,363,265
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 %. 1/4 of all sales tax revenue
is transferred out of the General Fund to the Debt Service Fund to pay healthcare debt and
2) Beginning 2003, GASB Statement No. 34 requires inter -fund payments -in- lieu -of -tax to be
classifed as transfers rather than revenues. From 2003 forward, PILT reflects external payments
3) The hotel /motel tax rate is 4 %.
4) Represents tax - related penalties and interest.
140
CITY OF SEWARD
Property Tax Rates
Direct and Overlapping Governments
Last Ten Fiscal Years
Per $1,000 of Assessed Value)
Fiscal Borough KPCC Flood
Year City 1)2)Service (3)Total
1998 3.12 8.00 0.08 0.00 11.20
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 6.50 0.10 0.50 10.22
2006 3.12 6.50 0.10 0.50 10.22
2007 3.12 5.50 0.00 0.50 9.12
1) Includes Kenai Peninsula Borough only.
2) Kenai Peninsula Community College.
3) Seward/Bear Creek Flood Service Area created effective 2004.
Source: "Alaska Taxable, 2007"
Table 7
141
Table 8
CITY OI+ SEWARD
Property Tax Levies and Collections
Last Ten Fiscal Periods *
N
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
Ratio of
Total Tax Delinquent.
Total Current Percent Delinquent Collections Outstanding Taxes as %
Fiscal Tax Tax of Levy Tax Total Tax as % of Delinquent of Total
Year Levy Collections Collected Collections Collections Levv Taxes Lev
1998 $495,052 466,528 94.2 % $13,791 480,319 97.0%60,601 12.2%
1999 505,323 488,883 96.7%32,515 521,398 103.2%40,930 8.1%
1999 523,453 484,305 92.5%4,627 488,931 93.4%70,490 13.5%
2000 606,781 571,261 94.1%41,770 613,031 101.0%64,241 10.6%
2001 625,110 592,042 94.7%32,951 624,993 100.0%64,358 10.3%
2002 646,424 618,447 95.7%32,036 650,483 100.6%60,299 9.3%
2003 634,287 618,356 97.5%26,536 644,892 101.7%49,694 7.8%
2004 666,848 650,763 97.6%18,302 669,065 100.3%47,477 7.1%
2005 733,298 717,697 97.9%15,604 733,301 100.0%47,474 6.5%
2006 835,829 801,964 95.9%21,818 823,782 98.6%59,522 7.1%
2007 851,190 820,934 96.4%17,948 838,883 98.6%37,846 4.4%
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.
Represents the six -month period from July 1, 1999 through December 31, 1999.
Source: Kenai Peninsula Borough
CITY OF SEWARD
Table 9
Assessed and Estimated Actual Value of Taxable Property
Last Ten Fiscal Periods *
w
Fiscal
Year
Real Property
Assessed Estimated
Value Actual Value
Personal Property
Assessed Estimated
Value Actual Value
Total Property
Assessed Estimated
Value Actual Value
1998
1999
1999
2000
2001
2002
2003
2004
2005
2006
2007
106,196,750 $ 117,506,400 $ 49,253,008 $ 67,755,600 $ 155,449,758
106,918,000 114,049,300 52,852,159 70,534,400 159,770,159
113,464,200 124,730,000 58,163,405 72,987,600 171,627,605
154,991,200 167,589,200 55,354,065 71,952,600 210,345,265
152,839,700 172,127,800 57,901,379 77,274,400 210,741,079
157,214,800 175,990,700 57,383,564 77,702,100 214,598,364
159,864,700 175,842,600 56,833,535 69,146,300 216,698,235
163,163,200 191,098,900 60,038,915 79,244,100 223,202,115
178,133,000 198,141,000 69,039,838 87,242,600 247,172,838
189,325,100 220,649,800 74,203,884 93,273,700 263,528,984
203,132,200 226,885,700 68,274,306 102,404,800 271,406,506
185,262,000
184,583,700
197,717,600
239,541,800
249,402,200
253,692,800
244,988,900
270,343,000
285,383,600
313,923,500
329,290,500
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.
Ratio of
Assessed
Value to
Total Est.
Actual
Value
83.91%
86.56%
86.80%
87.81%
84.50%
84.59%
88.45%
82.56%
86.61%
83.95%
82.42%
Source: "Alaska Taxable 2007 ", State of Alaska, and Kenai Peninsula Borough Certified Tax Roll.
Table 10
CITY OF SEWARD
Principal Property Taxpayers
Compared with 10 Years Ago
December 31, 2007
Percentage of
Total Taxable
Type of
Taxpayer (2) Business
Carr - Gottstein Properties Grocery
Leirer Enterprises Property
Kishan Group, LLC Hotel/Retail
General Communications, Inc.Communications
Seward Fisheries Seafood processing
Telalaska Communications
CIRI Alaska Tourism Tourism
Shoreside Petroleum, Inc.Petroleum Products
Pacific Park Real Estate/Housing
Gateway- Seward Associates Real Estate/Housing
Suneel Alaska Corporation Coal Export
Kenai Fjord Tours, Inc.Boat Tours
New Seward Hotel /Saloon Hotel/Retail
Anderson Tug & Barge Tug & Barge Service
Harbor Gateway Enterprises Gas Station/Retail
Breeze Inn Motel Hotel/Retail
Harbor Enterprises, Inc.Petroleum Products
Major Marine Tours/Emerald Sea, I Boat Tours
Total
2007 Assessed Assessed
Value (1)Rank Value
7,733,347 1 2.8%
7,497,100 2 2.8%
4,762,900 3 1.8%
4,511,199 4 1.7%
3,994,496 5 1.5%
2,488,016 6 0.9%
2,348,535 7 0.9%
1,923,675 8 0.7%
1,881,100 9 0.7%
1,626,900 10 0.6%
Percentage of
Total Taxable
1997 Assessed Assessed
Value (1) Rank Value
7,559,780
1,798,740
1
9
4.2%
1.0%
6,543,913
3,971,017
2,878,569
2,505,512
2,361,594
2,099,490
1,903,983
1,785,440
14.3% 33.408.038
2
3
4
5
6
7
8
10
3.7%
2.2%
1.6%
1.4%
1.3%
1.2%
1.1
1.0%
M
1) Includes real and personal property
2) Source: Kenai Peninsula Borough assessing records. Above assessed values are a best effort to identify ten largest property taxpayers,
although values reflect aggregation of multiple tax accounts. It is possible that some tax accounts may have different names, making it
difficult to identify as being owned by the same entity. Therefore, some valuations may have been inadvertently omitted above.
3) Based on total assessed value of $164,147,882 in 1996 and $263,528,984 in 2006.
CITY OF SEWARD
Principal Taxable Sales by Line of Business
De cember 31, 2007
Table 11
Type of Business
Retail Trade
Accommodations, Food Service
Services
Wholesale Trade
Transportation and Warehousing
Public Administration
Rental Residential Property
Manufacturing
Professional
Construction Contracting
Other
Percent of
FY07 Total
Taxable Taxable
Sales (1) Sales (2)
40,521,537 40.3%
33,949,525 33.8%
5,890,900 5.9%
5,462,524 5.4%
5,443,485 5.4%
4,606,454 4.6%
2,316,949 2.3%
998,446 1.0%
644,612 0.6%
578,291 0.6%
76,373 0.1%
1) Taxable sales for 2007 are $100,489,096. Source: Kenai Peninsula Borough EDD.
2) Total sales tax collected in 2007 is $4,010,155. Source: Kenai Peninsula Borough
Finance Department confirmation letter.
145
Table 12
CITY OF SEWARD
Ratios of Outstanding Debt by Type (1)
Last Ten Fiscal Years
rn
1) Excludes other than debt instruments (i.e. compensated absences, net pension obligation, inter -fund loans)
2) G.O. Bonds represent general obligation bonds pledging the full faith and credit of the City.
3) Personal income is estimated by using Kenai Peninsula Borough income to calculate per capita income. (See http: / /www.bea.gov/bea /regional /reis)
4) Population data can be found on Table 13.
5) Estimated Actual Taxable Value data can be found on Table 9.
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
Debt as a
of
Debt as a % of Estimated
Personal Income Debt per Capita Actual
Governmental Activities Business -Type Activities 3)4)Taxable
Total Total Value of
Fiscal G.O. Bonds Capital G.O. Bonds Revenue Capital Total Primary Govern-Primary Govern- Primary Property
Year 2)Leases 2)Bonds Leases Loans Government mental Gov't mental Gov't 5)
1998 9,467,115 $5,397,885 $3,175,000 $989,118 $830,944 19,860,062 12.7%26.6%$3,127 6,559 10.72%
1999 9,185,640 4,724,360 3,100,000 846,628 793,490 18,650,118 12.3%25.0%3,052 6,196 10.10 %
2000 8,513,277 3,421,723 6,000,000 588,869 713,841 19,237,710 10.8%24.4%3,008 6,798 8.03%
2001 8,123,272 2,651,728 5,870,000 804,650 667,723 18,117,373 10.3%23.0%2,944 6,567 7.26%
2002 7,690,620 1,989,380 5,640,000 627,827 619,244 16,567,071 9.7%20.8%2,793 6,016 6.53 %
2003 7,223,262 267,027 1,386,738 5,405,000 185,000 569,587 15,036,614 9.3%18.6%2,681 5,382 6.14%
2004 7,069,933 326,522 665,068 5,155,000 95,000 518,722 13,830,245 9.5%17.8%2,695 5,038 5.12%
2005 6,348,571 257,533 521,429 6,410,000 465,543 14,003,076 8.7%18.5%2,601 5,513 4.91%
2006 5,576,146 185,143 373,854 10,590,000 410,429 17,135,572 6.9%20.5%2,211 6,575 5.46%
2007 4,737,655 109,184 222,345 10,175,000 3,007,351 18,251,535 5.4%20.5%1,845 6,948 5.54%
1) Excludes other than debt instruments (i.e. compensated absences, net pension obligation, inter -fund loans)
2) G.O. Bonds represent general obligation bonds pledging the full faith and credit of the City.
3) Personal income is estimated by using Kenai Peninsula Borough income to calculate per capita income. (See http: / /www.bea.gov/bea /regional /reis)
4) Population data can be found on Table 13.
5) Estimated Actual Taxable Value data can be found on Table 9.
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
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 *
Table 13
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 Commerce, Community & Economic Development
2) From Table 9 (expressed in thousands)
3) Amount does not include revenue bonds
Source: Kenai Peninsula Borough and State of Alaska, "Alaska Taxable 2006"
147
Ratio of
Debt Net
Gross Payable Bonded Net
Bonded from Net Debt to Bonded
Fiscal Population Assessed Debt Enterprise Bonded Assessed Debt per
Year 1)Value (2)#3)#Revenues #Debt #Value Capita
1998 3028 155,450 14,865 5,398 $9,467 6.09%3,126
1999 3010 159,770 13,910 4,724 9,186 5.75%3,052
1999 3010 171,628 13,025 4,157 8,867 5.17%2,946
2000 2830 210,345 11,935 3,421 8,513 4.05%3,008
2001 2759 210,741 10,775 2,651 8,123 3.85%2,944
2002 2754 214,598 9,680 1,989 7,690 3.58%2,792
2003 2794 216,698 8,610 1,387 7,223 3.33%2,585
2004 2745 223,202 7,735 665 7,070 3.17%2,576
2005 2540 247,173 6,870 521 6,349 2.57%2,500
2006 2606 263,529 5,950 374 5,576 2.12%2,140
2007 2627 271,407 4,960 222 4,738 1.75%1,804
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 Commerce, Community & Economic Development
2) From Table 9 (expressed in thousands)
3) Amount does not include revenue bonds
Source: Kenai Peninsula Borough and State of Alaska, "Alaska Taxable 2006"
147
Table 14
CITY OF SEWARD
Computation of Direct and Overlapping Bonded Debt
December 31. 2007
Jurisdiction
Direct:
City of Seward
Overlapping:
Kenai Peninsula Borough
Net General Amount
Obligation Percentage Applicable
Bonded Debt Applicable to to City of
Outstanding City of Seward Seward
4,737,655 (1)
24,619,000 (2)
Total: $ 29,356,655
100% 4,737,655
5.7% (3) 1,403,283
6,140,938
1) Excluding general obligation bonds reported in the Enterprise Funds.
2) Source: Kenai Peninsula Borough finance department.
3) Based on ratio of City of Seward assessed value (real and personal property = $271,406,506)
to total assessed value of the Kenai Peninsula Borough ($4,755,851,816). Source: "2007 Alaska
Taxable ", State of Alaska, and KPB main and supplemental tax rolls.
CITY OF SEWARD
Legal Debt Margin
December 31. 2007
Table 15
No debt limit mandated by law.
149
Table 16
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. Beginning in 2005, retirement system payments attributed to past service costs are reflected
as debt service payments in the General Fund. In 2006, includes a one -time payoff of Seward General
Hospital PERS costs in the amount of $1,708,126.
2) Total general expenditures includes General Fund and Debt Service Fund.
150
Retirement Ratio of Debt
Past - Service Total General Service to
Fiscal Cost Total Debt Expenditures General
Year Principal Interest Payments Service (1)2)Expenditures
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 800,927 380,662 164,143 1,345,732 9,042,117 14.88%
2006 892,837 305,202 1,805,475 3,003,514 10,988,362 27.33%
2007 854,977 260,544 293,114 1,408,635 9,514,080 14.81%
Effective July 1, 1999, the City of Seward changed from a fiscal year ending June 30, to a calendar
year ending December 31.
This schedule includes ten full fiscal years plus the six -month transition period.
Represents the six -month period from July 1, 1999 through December 31, 1999.
1) General obligation debt reported in the Enterprise Funds, with government commitment, have been
excluded. Beginning in 2005, retirement system payments attributed to past service costs are reflected
as debt service payments in the General Fund. In 2006, includes a one -time payoff of Seward General
Hospital PERS costs in the amount of $1,708,126.
2) Total general expenditures includes General Fund and Debt Service Fund.
150
Tohln 1'7
CITY OF SEWARD
Revenue Bond Coverage
Electric Enterprise Fund
Last Ten Fiscal Years
1) Total revenues, including interest, exclusive of grants.
2) Total operating expenses exclusive of depreciation and payments in lieu of taxes.
3) Includes principal and interest of revenue bonds only. Excludes general obligation bonds reported in
Electric Enterprise Fund.
4) Revenue bond agreements require Net Revenue Available for Debt Service be at least 1.30 times the
amount of the total annual debt service requirement.
151
Net
Revenue
Gross Operating Available
Fiscal Revenues Expenses for Debt Debt Service Requirements (3)Coverage
Year 1)2)Service Principal Interest Total 4)
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
2006 8,246,477 7,855,990 390,487 210,000 87,500 297,500 1.31
2007 8,709,107 6,651,455 2,057,652 195,000 80,938 275,938 7.46
1) Total revenues, including interest, exclusive of grants.
2) Total operating expenses exclusive of depreciation and payments in lieu of taxes.
3) Includes principal and interest of revenue bonds only. Excludes general obligation bonds reported in
Electric Enterprise Fund.
4) Revenue bond agreements require Net Revenue Available for Debt Service be at least 1.30 times the
amount of the total annual debt service requirement.
151
Table 18
CITY OF SEWARD
Revenue Bond Coverage
Harbor Enterprise Fund
Last Seven Fiscal Years (5)
Net
Revenue
Gross Operating Available
Fiscal Revenues Expenses for Debt
Year (1) (2) Service
Debt Service Requirements (3) Coverage
Principal Interest Total (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
2006 2,752,802 1,388,971 1,363,831 110,000 293,848 403,848 3.38
2007 2,905,013 1,472,842 1,432,171 310,000 376,504 686,504 2.09
1) Total revenues, including interest, exclusive of grants.
2) Total operating expenses exclusive of depreciation and payments in lieu of taxes.
3) Includes principal and interest of revenue bonds only.
4) Revenue bond agreements require Net Revenue Available for Debt Service be at least 1.20 times the
amount of the total annual debt service requirement.
5) 2000 Harbor Enterprise Fund revenue bonds refunded in 2007. Bonds were issued in 2005 in the
amount of $1.5 million for float construction and in 2006 in the amount of $4.5 million for expansion of
the south harbor.
152
CITY OF SEWARD
Demographic and Economic Statistics
Last Ten Fiscal Years
Table 19
City of Seward For the Kenai Peninsula Borough (A)
Per Capita
Fiscal School Personal Personal Median Population School Unemployment
Year Population Enrollment Income Income (2) Age (1) Enrollment Rate (3)
1998 3,028 835 $74,652,312 $24,654 35.1 48,098 10,384
1999 3,010 818 74,584,790 24,779 35.4 48,952 10,179
2000 2,830 836 78,863,610 27,867 36.1 49,691 9,896 8.00%
2001 2,759 796 79,754,413 28,907 36.3 50,005 9,963 7.90%
2002 2,754 761 82,823,796 30,074 36.3 50,621 9,799 9.40%
2003 2,794 695 80,917,034 28,961 36.7 51,398 9,661 10.00%
2004 2,745 685 77,916,825 28,385 38.1 51,398 9,467 9.50%
w 2005 2,540 632 75,709,780 29,807 36.3 50,980 9,534 8.70%
2006 2,606 580 83,399,818 32,003 36.3 51,224 9,382 8.10%
2007 2,627 577 89,131,483 33,929 39.7 51,350 9,388 7.70%
A) Data for the City of Seward is not available, but should be comparable to this data which is for the Kenai Peninsula Borough
1) "Alaska Taxable" as of July 1 of each fiscal year
2) Data for 1997 -2002 not available for Seward so utilizes Kenai Peninsula Borough data for 1997 -2002, which should be comparable.
3) Data is provided by the State of Alaska Department of Labor: http: / /www.Iabor. state .ak.us /research /emp_ue/kblf.htm
Data unavailable at this time, prior year information is used
The Bureau of Labor Statistics, changed their method of calculating unemployment rates; comparable data not available prior to 2001.
Table 20
CITY OF SEWARD
Seward Area Principal Employers
Source: Kenai Peninsula Borough EDD; http : / /www.borough.kenai.ak.us/Econ
154
Annual Average
Rank Employer Employment
2005 2006 2006 2005
1 1 State of Alaska - Excludes University 339 339
2 2 Alaska Sealife Center 143 149
3 3 City of Seward 112 106
4 4 Providence 112 105
8 5 Icicle Seafoods 103 86
7 6 Safeway 85 93
6 7 Kenai Peninsula Borough School District 96 95
5 8 CIRI Alaska Tourism 94 97
9 9 Ocean Beauty 89 84
10 10 Federal government 58 63
Source: Kenai Peninsula Borough EDD; http : / /www.borough.kenai.ak.us/Econ
154
CITY OF SEWARD
Full -Time Equivalent Employees by Fund
Last Ten Fiscal Years
Year
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
General Fund:
City Clerk 2.00 2.54 2.74 2.85 2.76 2.76 3.00 3.00 3.00 3.00
City Manager and Legislative 3.00 3.00 3.21 3.21 3.21 3.57 3.57 3.57 3.57 4.70
M.I.S.0.00 0.00 0.00 0.00 1.19 1.63 2.00 2.00 2.00 2.00
Finance and General Services 8.00 8.00 8.00 9.19 7.15 7.15 7.19 7.19 7.19 7.00
Police and Jail 22.10 23.10 22.23 22.09 22.14 22.14 22.14 23.14 23.14 22.58
Fire 2.70 2.70 2.70 2.70 3.00 3.00 3.00 3.00 3.00 3.00
Engineering and Building 1.75 1.76 1.76 1.76 1.50 1.55 3.00 3.00 3.00 3.00
Public Works 6.74 6.74 6.74 7.95 8.35 8.35 9.82 9.82 9.82 8.50
Community Development 2.00 2.30 2.00 1.91 1.91 2.43 2.20 2.10 2.10 3.30
Maintenance 1.56 1.56 1.73 1.73 1.73 2.00 2.00 2.00 2.00 2.00
Parks & Recreation 11.56 12.50 14.51 15.28 15.25 14.81 14.78 14.78 14.78 14.78
Library 3.82 3.82 3.82 4.13 4.20 4.20 4.20 4.20 4.20 4.20
General Fund Total 65.23 68.02 69.44 72.80 72.39 73.59 76.90 77.80 77.80 78.06
Parking 0.00 0.00 1.46 1.46 1.46 2.29 3.22 3.22 3.22 3.22
Harbor and SMIC 11.62 11.62 10.62 11.22 10.50 10.45 10.45 10.45 10.62 11.39
Electric 6.62 6.87 6.87 7.26 7.48 7.47 8.76 8.76 10.90 10.90
Water 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00
Wastewater 0.40 0.73 0.73 1.07 1.84 2.45 2.00 2.00 2.00 2.00
Total All Funds 86.87 90.24 92.12 96.81 99.25 105.23 107.5496.67 104.33 108.57
Table 22
CITY OF SEWARD
Operating Indicators by Function
Last Ten Fiscal Years
Year
Function
Public Safety
Police Services:
Physical arrests 462 399 364 483 403 467 379 458 305 257
Traffic violations 254 376 1,542 1,186 431 1,059 808 1,406 1,010 244
Parking violations 87 125 161 146 139 227 196 56 59 40
Fire and Emergency Services:
Number of calls answered 142 120 183 216 188 169 153 181 179 198
Harbor
Registered vessels 4,739 3,244 3,857 4,000 3,874 4,064 4,344 4,344 3,100 1,630
Number on waiting list for slips 381 367 323 327 352 385 447 471 477 362
Number of boat lifts 629 563 565 613 418 383 414 382 423 417
General cargo tonnage 42,422 17,780 5,803 1,831 3,117 149 317 35,318 573 582
Fish product tonnage 5,452 1,542 21,758 13,502 18,995 23,405 16,787 21,300 12,972 21,873
Petroleum (gallons)2,591,840 3,258,244 2,921,054 2,610,537 2,782,117 2,614,014 2,362,865 2,569,060 2,691,297 2,957,732
Water and Wastewater Systems:
Water service connections 858 864 857 876 856 884 858 917 921 933
Daily average consumption (gallons)1,300,000 1,565,000
Sewer service connections 831 837 832 856 838 854 826 887 890 901
Daily average treatment (gallons)870,000 715,000
Electric System:
Number of service connections 2,185 2,218 2,333 2,458 2,471 2,459 2,543 2,831 2,901 3,089
Total kilowatt hour sales 50803212 55,252,317 55,496,119 54,940,719 53,800,825 54,664,399 55,682,929 54,786,754 55,412,943 56,228,590
Table 23
CITY OF SEWARD
Capital Asset Statistics By Function
Last Ten Fiscal Years
Year
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Lane miles of street 43.14 43.14 43.14 43.64 43.64 44.14 44.14 44.14 52.00 52.00
Number of street lights 198 198 198 233 235 235 235 235 258 258
Public Safety:
Number of fire stations 2 2 2 2 2 2 2 2 2 2
Fire rating (ISO)4/9 4/9 4/9 4/9 4/9 4/9 4/9 4/9 4/9 4/9
Number of fire hydrants 185 185 185 185 197 197 197 197 217 221
Number of police stations 1 1 1 1 1 1 1 1 1 1
Number of Facilities:
Parks and playgrounds 9 11 11 17 18 18 19 19 19 19
Libraries 1 1 1 1 1 1 1 1 1 1
Sewer treatment plants 2 2 2 2 2 2 2 2 2 2
Electric distribution line (miles)55 55 55 55 55 55 63 63 65 65
Electric substations 3 3 3 3 3 3 3 3 3 3
Table 24
CITY OF SEWARD
Property Value, Construction, and Bank Deposits
Last Ten Fiscal Periods *
Commercial Constructio Residential Construction
Total Real Number
Fiscal Property of
Year Value (1)Permits
Bank
Deposits
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
2006 220,649,800 36 24,332,857 22 1,204,392 59,374,764
2007 226,885,700 20 22,555,446 17 589,254 59,042,303
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 9.
Source: Construction Data - City of Seward Engineering Department
Bank Deposit Data - Local Banks (First National Bank of Anchorage and Wells Fargo)
Value of Number Value of
Permits of Permits Permits
158
CITY OF SEWARD
Miscellaneous Statistics
December 31, 2007
Table 25
Date of Incorporation June 1, 1912
Class Home Rule City
Form of Government Council / Manager
Area, Square Miles 22
Miscellaneous Operational Statistics:
37.42
Library - number of volumes 31,246
Fire Department - Number of volunteers 30
Sewer System - Maximum daily capacity (gallons)1,200,000
Water System - Maximum daily capacity (gallons)5,500,000
Electric System:
233
Miles of distribution lines 65
Miles of transmission lines 42
Harbor - Number of permanent slips 669
City Employees:
38
Regular Employees - Full -time equivalent 97.72
Temporary Employees - Full -time equivalent 10.85
Demographics:
6
School Enrollment, City of Seward (3)594
Unemployment Rate - Borough -Wide (1)7.7%
Population (2)2,627
Average annual earnings (4)33,929
Qualified Voters 1,930
Facilities and Services not included in the reporting entity:
Education:
Elementary School
Number of students enrolled 268
Number of teachers 37.42
Middle School
Number of students enrolled 93
Number of teachers 10.82
High School
Number of students enrolled 233
Number of teachers 26.25
Alaska Vocational Technical Center
Number of students served annually 1,599
Number of teachers 38
Hospital:
Providence Seward Medical & Care Center
Number of patient beds (4 primary care; 2 swing beds)6
Number of loner term care beds 36
Number of employees:
Exempt 5
Non- Exempt 98
1) Kenai Peninsula Borough
2) State of Alaska, Department of Commerce, Community & Economic Development
3) Kenai Peninsula Borough School District
4) Kenai Peninsula Borough information extrapolated by Seward's population
159
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160
Mikunda,
Cottrell & Co., l.c.
Certified Public Accountants & Consultants
RSM McGledreyNetwork
An Independently Need Niemde
Offices ir, nrchorage & Kenai
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 the City of Seward, Alaska as of
and for the year ended December 31, 2007, which collectively comprise City of Seward's basic
financial statements and have issued our report thereon dated July 25, 2008. Our report was modified
to include a reference to 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.
Other auditors audited the financial statements of Providence Seward Medical Center, as described in
our report on City of Seward's financial statements. The financial statements of Providence Seward
Medical Center were not audited in accordance with Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City's internal control over financial reporting
as a basis for designing our auditing procedures for the purpose of expressing our opinion on the
financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's
internal control over financial reporting. Accordingly, we do not express an opinion on the
effectiveness of the City's internal control over financial reporting.
A control deficiency exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent or detect
misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of
control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process, or
report financial data reliably in accordance with generally accepted accounting principles such that
there is more than a remote likelihood that a misstatement of the entity's financial statements that is
more than inconsequential will not be prevented or detected by the entity's internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results
in more than a remote likelihood that a material misstatement of the financial statements will not be
prevented or detected by the entity's internal control.
161
3601 "C" Street, Suite 600 • Anchorage, Alaska 99503 • (907) 278 -8878 • Fax (907) 278 -5779 • www.mcc- epa.com
Honorable Mayor and City Council
City of Seward, Alaska
Our consideration of the internal control over financial reporting was for the limited purpose described
in the first paragraph of this section and would not necessarily identify all deficiencies in the internal
control that might be significant deficiencies or material weaknesses. We did not identify any
deficiencies in internal control over financial reporting that we consider to be material weaknesses, as
defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City'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 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.
Anchorage, Alaska
July 25, 2008
162
Mikunda,
Cottrell & Co., Inc.
Certified Public Accountants & Consultants
SM Niclula rey Network
An Independently Owned Member
Offices in Anchorage & Kenai
Independent Auditor's Report on Compliance with Requirements Applicable to Each Major Program and
on Internal Control Over Compliance in Accordance with OMB Circular A -133
Honorable Mayor and City Council
City of Seward, Alaska
Compliance
We have audited the compliance of City of Seward with the types of compliance requirements
described in the OMB Circular A -133 Compliance Supplement that are applicable to each of its major
federal programs for the year ended December 31, 2007. 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 all material respects, with the requirements referred to
above that are applicable to each of its major federal programs for the year ended December 31, 2007.
163
3601 "C" Street, Suite 600 . Anchorage, Alaska 99503 • (907) 278 -8878 • Fax (907) 278 -5779 • www.mce- cpa.com
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 the 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, but not for the purpose of expressing an opinion on the effectiveness of
internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of
City of Seward's internal control over compliance.
A control deficiency in an entity's internal control over compliance exists when the design or operation
of a control does not allow management or employees, in the normal course of performing their
assigned functions, to prevent or detect noncompliance with a type of compliance requirement of a
federal program on a timely basis. A significant deficiency is a control deficiency, or combination of
control deficiencies, that adversely affects the entity's ability to administer a federal program such that
there is more than a remote likelihood that noncompliance with a type of compliance requirement of a
federal program that is more than inconsequential will not be prevented or detected by the entity's
internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results
in more than a remote likelihood that material noncompliance with a type of compliance requirement
of a federal program will not be prevented or detected by the entity's internal control.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and would not necessarily identify all deficiencies in internal control that
might be significant deficiencies or material weaknesses. We did not identify any deficiencies in
internal control over compliance that we consider to be material weaknesses, as defined above.
This report is intended solely for the information and use of 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.
Anchorage, Alaska
July 25, 2008
164
CITY OF SEWARD
Schedule of Findings and Questioned Costs
Year Ended December 31, 2007
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
Significant deficiencies 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
Significant deficiencies 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:
Agenc CFDA Number Programs
Department of Homeland Security 97.036 Oct. 06 Southern Alaska Storm
Disaster /flood.
Dollar threshold used to distinguish between Type A and B programs $300,000
Low -risk auditee Yes
II. Financial Statement Findings None noted
III. Federal Awards Findings and Questioned Costs None noted
165
CITY OF SEWARD
Summary Schedule of Prior Audit Findings
Year Ended December 31, 2007
There were no prior year audit findings.
MOM
CITY OF SEWARD
Corrective Action Plan
Year Ended December 31, 2007
There are no current year findings; therefore no corrective action plan is required.
167
Mikunda,
Cottrell & Co., Inc.
Certified Public Accountants & Consultants
RSM McGladrey Network,
An Independently Owned Member
Offices in Anchorage & Kenai
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 the City of Seward, Alaska as of
and for the year ended December 31, 2007, which collectively comprise City of Seward's basic
financial statements and have issued our report thereon dated July 25, 2008. Our report was modified
to include a reference to 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.
Other auditors audited the financial statements of Providence Seward Medical Center, as described in
our report on City of Seward's financial statements. The financial statements of Providence Seward
Medical Center were not audited in accordance with Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City's internal control over financial reporting
as a basis for designing our auditing procedures for the purpose of expressing our opinion on the
financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's
internal control over financial reporting. Accordingly, we do not express an opinion on the
effectiveness of the City's internal control over financial reporting.
A control deficiency exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent or detect
misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of
control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process, or
report financial data reliably in accordance with generally accepted accounting principles such that
there is more than a remote likelihood that a misstatement of the entity's financial statements that is
more than inconsequential will not be prevented or detected by the entity's internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results
in more than a remote likelihood that a material misstatement of the financial statements will not be
prevented or detected by the entity's internal control.
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3601 "C" Street, Suite 600 • Anchorage, Alaska 99503 • (907) 278 -8878 • Fax (907) 278 -5779 • www.mcc- cpa.com
Honorable Mayor and City Council
City of Seward, Alaska
Our consideration of the internal control over financial reporting was for the limited purpose described
in the first paragraph of this section and would not necessarily identify all deficiencies in the internal
control that might be significant deficiencies or material weaknesses. We did not identify any
deficiencies in internal control over financial reporting that we consider to be material weaknesses, asdefinedabove.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City'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 the City of Seward's management,
Honorable Mayor and City Council and appropriate state agencies, and is not intended to be and
should not be used by anyone other than these specified parties.
Anchorage Alaska
July 25, 2008
169
4dRMikunda,Cottrell & Co., Inc.
Certified Public Accountants & Consultants
Me ladrey Network
An Independently Nmed Wffnbes
Offices in Anchorage & Kena
Ind ependent Auditor's Report on Compliance with Requirements Applicable to Each Major Program and
on Internal Control Over Compliance in Accordance with 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, 2007. City of Seward's major state
programs are identified in the accompanying Schedule of State Financial Assistance. Compliance with
the requirements of laws, regulations, contracts, and grants 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 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, 2007.
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3601 "C" Street, Suite 600 • Anchorage, Alaska 99503 • (907) 278 -8878 • Fax (907) 278 -5779 • www.mcc- cpa.com
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 the 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, but not for the purpose of expressing an opinion on the effectiveness of internal control over
compliance. Accordingly, we do not express an opinion on the effectiveness of City of Seward's internal
control over compliance.
A control deficiency in an entity's internal control over compliance exists when the design or operation
of a control does not allow management or employees, in the normal course of performing their
assigned functions, to prevent or detect noncompliance with a type of compliance requirement of a
state program on a timely basis. A significant deficiency is a control deficiency, or combination of
control deficiencies, that adversely affects the entity's ability to administer a state program such that
there is more than a remote likelihood that noncompliance with a type of compliance requirement of a
state program that is more than inconsequential will not be prevented or detected by the entity's
internal control.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results
in more than a remote likelihood that material noncompliance with a type of compliance requirement
of a state program will not be prevented or detected by the entity's internal control.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and would not necessarily identify all deficiencies in internal control that
might be significant deficiencies or material weaknesses. We did not identify any deficiencies in
internal control over compliance that we consider to be material weaknesses, as defined above.
This report is intended solely for the information and use of City of Seward's management, Honorable
Mayor and City Council, and appropriate state agencies and is not intended to be and should not be
used by anyone other than these specified parties.
Anchorage, Alaska
July 25, 2008
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