HomeMy WebLinkAbout2011CAFRCOMPREHENSIVE ANNUAL
FINANCIAL REPORT
Fiscal Year
Ended December 31, 2011
CITY OF SEWARD
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
of the
CITY OF SEWARD, ALASKA
For the Fiscal Year Ended
December 31, 2011
Willard Dunham
MAYOR
Jim Hunt
CITY MANAGER
Prepared by the Finance Department
Kristin M. Erchinger, CGFM, MPA
FINANCE DIRECTOR
INTRODUCTORY
SECTION
CITY OF SEWAR D
Comprehensive Annual Financial Report
Table of Contents
PART I - INTRODUCTORY SECTION
Table of Contests
Letter of TWsmittal
Certificate of Achievement for Excellence in Financial Reporting
List of Principal Officials
Seward Citizens — Organizational Chart
PART II - FINANCIAL SECTION
Independent Auditor's Report
ManaLement's Discussion and Analysis
Basic Financial Statements
Government -wide Financial Statements:
Stat ment of Net Assets
Statement of Activities
Fund Financial Statements:
Governmental Funds:
Balance Sheet
Reconciliation of Governmental Funds Balance
Sheet to Statement of Net Assets
Statement of Revenues, Expenditures and Change in
Fund Balances
Reconciliation of the Changes in Fund Balances of
Governmental Funds to Statement of Activities
Statement of Revenues, EIPpenditures and Change in Fund
Balance - Budget and Actual - General Fund
Proprietary Funds:
Statement of Net Assets
Statement of Revenues, Expenses and Change in
Net Assets
Statement of Cash Flows
Statement of Fiduciary Net Assets
Notes to Basic Financial Statements
Page
I&I
VII -XIII
XIV
XV
XVI
1 -3
4 -15
A -1 18
A -2 19
9
B -1 20
B -2 21
B -3 22
B -4 23
B -5 24
C -1 25
C -2 26
C -3 27 -28
D -1 29
31 -59
I
CITY OF SEWARD
Comprehensive Annual Financial Report
Table of Contents, continued
Exhibit Page
PART II - FINANCIAL SECTION, continued
Supplem itary Information
Nonmajor Governmental Funds:
Combining Balance Sheet
Combining Statement of Revenues, Expenditures and
Change in Fund Balances
Nonmajor Enterprise Funds:
Combining Statement of Net Assets
Combing Statement of Revenues, Expenses and
Change in Net Assets
Combining Statement of Cash Flows
Internal Service Funds:
Combining Statement of Net Assets
Combining Statement of RevenExpeu5es and
Change in Net Assets
Combining Statement of Cash Flows
General Fund:
Balance Sheet
Schedule of Revenues, Expenditures and
Change in Fund Balance — Bu4et and Actual
Nonmajor Special Revenue Funds:
Combining balance Sheet
Combining Statement of Revenues, EVenditures and
Change in Fund Balances (Deficit)
Nonmajor CalMal Project Funds:
Combining Balance Sheet
Combining Statement of Revenues, Expenditures and
Change in Fund Balances (Deficits)
M
E -1 61
E -2 62
F -1 63
F -2 64
F -3 65 -66
G -1 67
G -2 68
G -3 69
H -1 71 -72
H -2 73 -80
I -1 82
I -2 83
J -1 86
J -2 87
V .
CITY OF SEWAND
Comprehensive Annual Financial Report
Table of Contents, continued
Water:
Statement of Net Assets K -7 97
Statement of RevenueF and Change in Net Assets K -8 9k
Statement of Cash Flows K -9 99
SoLedule of Composition of Net Assets K -10 Wo
Wastewater:
Statemeit of Net Assets K -11 101
Statement of Revenues, Expenses and Change in Net Assets K -12 102
Statement of Cash Flows K -13 103
Schedule of Composition of Net Assets K -14 104
Harbor:
Statement of Net Assets
Exhibit Pao
PART II - FINANCIAL SEC'Y'ION, continued
K -16 106
Supplementary Information, continued
K -17 107
Enterprise Funds:
K -18 108
Electric:
K -19 109
Statement of Net Assets K -1 90 -91
Statement of Revenues, Expenses and Change in Net Assets K -2 92
Statement of Cash Flows K -3 93
Schedule of Operating Expenses K -4 94
Schedule of Composition of Net Assets K -5 95
Schedule of Electric Capital Projects K -6 96
Water:
Statement of Net Assets K -7 97
Statement of RevenueF and Change in Net Assets K -8 9k
Statement of Cash Flows K -9 99
SoLedule of Composition of Net Assets K -10 Wo
Wastewater:
Statemeit of Net Assets K -11 101
Statement of Revenues, Expenses and Change in Net Assets K -12 102
Statement of Cash Flows K -13 103
Schedule of Composition of Net Assets K -14 104
Harbor:
Statement of Net Assets K -15 105
Statement of Revenues, Expenses and Change in Net Assets K -16 106
Statement of Cash Flows K -17 107
Schedule of Composition of Net Assets K -18 108
Schedule of Harbor Capital Projects K -19 109
Seward Marine Industrial Center:
Statement of Net Assets K -20 110
Statement of Revenues, Expenses and Change in Net Assets K -21 111
Statement of Cash Flows K -22 112
Schedule of Composition of Net Assets K -23 113
i
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1
III
CITY OFINEWARD .,
Comprehensive Annual Financial Report
Table of Contents, continued
Exhibit Page
PART II - FINANCIAL SECi'IOIK, continued
SuppleWntary Information, continued
Enterprise Funds, continued:
Parking:
Statement of Net Assets K -24 114
Statement of Revenues, Expenses and Change in Net Assets K -25 115
Statement of Cash Flows K -26 116
Schedule of Composition of Net Assets K -27 117
Providence Seward Medical & Care Center:
Statement of Net Assets K -28 118
Statement of Revenues, Expenses and Change in Net Assets K -29 119
Stdament of Cash Flows K -30 120
Internal Service Fins:
Motor Pool:
Statement of Net Assets L -1 122
Statement of Revenues, Expenses awl Change' Net *ssets L -2 123
Statement of Cash Flows L -3 124
Schedule of Composition of Net Assets L -4 125
Compensated Annual Leave:
Statement of 1`jt Assets L -5 126
Statement of Revenues, Expenses and Change in Net Assets L -6 127
Statement of Cash Flows L -7 128
Teen Council Agency Fund -
Statement of Changes in Assets and Liabilities M -1 129
Capital Assets:
Schedule of Governmental Capital Assets N -1 130
Schedule of Changes in Governmental Capital Assets N -2 131
Schedule of Governmental Capital Assets by Function and Activity N -3 132
Schedule of Changes in Governmental Capital Assets by Function
and Activity N -4 133
Schedule of Expendtures of Federal Awards 0-1 134 -135
Schedule of State Financial Assistance P -1 136
Note to the Schedules of Expenditures of Federal Awards and
State Financial Assistance 137
IV
6.
CITY OF SEWARD
Comprehensive Annual Financial Report
Table of Contents, continued
PART III — STATISTICAL SENTION
Table 1 Net Assets by Component
Table 2 Changes in Net Assets
Table 3 Fund Balances of Governmental Funds
Table 4 Changes in Fund Balances of Governmental Funds
Table 5 General Fwd Revenues by Source
Table 6 General Fund Tax Revenues by Source
Table 7 Property Tax Rates
Table 8 Property Tax Levies and Collections
Table 9 Assessed and Estimated Actual Value of Taxable Property
Table 10 Principal Property Taxpayers
Table 11 Principal Taxable Sales by Line of Business
Table 12 Ratios of Outstanding Debt by Type
Table 13 Ratio of Net General Obligation Bonded Debt to Assessed Value
and Net General Obligation Bonded Debt per Capita
Table 14 Computation of Direct and Overlapping Bondil Debt
Table 15 Legal Debt Margin
Table 16 Ratio of Annual Debt Service Fjpenditures for General
Obligation Debt to Total General Fund Expenditures
Table 17 Revenue Bond Coverage — Electric Enterprise Fund
Table 18 Revenue Bond Coverage — Harbor Enterprise Fund
Table 19 Demographic and Economic Statistics
Table 20 Principal Employers
Table 21 Full -Time Equivalent Employees by Fund
Table 22 Operating Indicators by Function
Table 23 Capital Asset Statistics By Function
Table 24 Property Value, Construction, and Bank Deposits
Table 25 Miscellaneous Statistics
9
Page
140
141 -142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
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CITY OF SEWARD
Comprehensive Annual Financial Report
Table of Contents, continued
PART IV - SINGLE AUDIT SEC`T'ION
Page
Independent Auditor's Report on Internal Control Over Financial
Reporting and on Compliance and Other Matters Based on an
Audit of Financial &atements Performed in Accordance with
GovernxrentAuditing SMndards 167 -168
Independent Auditor's Report on Compliance with Requirements
That Could Have a Direct and Material Effect on Each Major
Program and on Viternal Control Over Compliance in Accordance
with OMB Circular A -133 169 -170
Independent Auditor's Report on Compliance with Requirements
That Could Have a Direct and Material Effect on Each Major
Program and on Internal Control Over Compliance in Accordance
with the State ofAlaska Audit Guide aX1 Compliance SupplemAt for
State Single Audits 171 -172
Schedule of Findings and Questioned Costs
Summary Schedule of Prior Audit Findings
Corrective Action Plan
173 -174
175
176
VI
June 7, 2012
Honorable Members of the Seyrard City Council
Citizens of the city of Seward:
The City of Seward (City) Comprehensive Annual Financial Report (CAFR) for the year ended
December 31, 2011 is hereby submitted in accordance with Alaska Statutes 29.35.120 and the Seward
City Code. 'iis report satisfies the requirement that the City issues an annil report on its financial
position and activities, and that the report is audited by an independent firm of certified public
accountants.
The CAFR is presented in three sections; Introduction, Financial, and Statistical, as follows:
The Introduction Section is unaudited and includes this letter of transmittaL a Certificate of
Achievement for Excellence in Financial Reporting for the City of Seward's 2010 CAYR, an organization
chart, and a list of principal officials.
The Financial Section includes the auditor's report, Management's Discussion and Analysis (MD &A),
the financial statements; which include :government -wide financial statements and fund financial
statements with coMparative budgetary information, notes to the financial statements, required
supplementary information, and combining and individual statements and schedules, as applicable,
arranged according to Fund type.
i
The Statistical Section is unauAiMH and includes a WWd range of information including historicalfends
over a ten -year period, demographic information, and other non - financial information.
Management is responsible to ensure the accuracy, completeness, and fairness of the presentation of this
information, including all disclosures. To provide a reasonable basis for making these representations,
management has established a comprehensive framework of internal controls which is designed to protect
the government's assets from loss, theft, or misuse, and to provide sufficiently reliable information upon
which to prepare the City's financial statgients in accordance with GAAP. Because the cost of internal
controls should not outweigh their benefits, the City's comprehensive framework of internal controls has
been designed to provide reasonable rather than absolute assurance that the financial statements will be
free from material misstatement. As managemen, we assert that, to the best of our knowledge, this
financial report is complete and reliable in all material respects.
The City's financial statements have been audited by Mikunda, Cottrell & Company, an independent
auditing firm of certified public accountants. The goal of the 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, evideMe 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 fitancial 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, 2011, are fairly
presented in conformity with GAAP. The independent auditor's report is presented in the financial
section of this report.
Cilll
As a recipient of federal : grant funds, the City is required to undergo an audit in accordance with the
provisions of the U.S. Office of Management and Budget's (OMB) Circulil A -133, Audits of States,
Local Governments, and Non - Profit OrganizWions and associated Compliance Supplement. A scRadule
of expeditures of federal awards, the independent auditor's report on internal controls and compliance
with applicable laws and regulations, and a schedule of findings and questions costs (if any) are prepared
as part of the audit in accordance with OMB Circular A -133.
As a recipient of state grant funds, the City is also required to undergo an audit in accordance with the
provisions of Alaska State Regulation 2 AAC 45.010 and Audit Guide and Compliance Supplement for
State Single Audits. A state financial assistance schedule, the independent auditor's reports on i0ernal
controls and compliance with applicable laws and regulations, and a schedule of findings and questioned
costs (if any) are prepared as part of the audit in accordance with the State of Alaska Audit Guide and
Compliance Supplement for State Single Audits.
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 coWols 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.
Generally accepted accounting principles require management to provide a narrative introduction,
overview, and analysis to accompany the basic financial statements, in the form of a Management's
Discussion and Analysis. This letter of transmittal is designed to complement the MD &A and should be
read in conjunction with it. The CitJIs MD &A can be found immediately following the report of the
independent auditors.
Profile of the City of Seward
The City was incorporated on June 1, 1912, and became a first class City under 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 2,733. 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 Iftnager is the adn>Distrative 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.
The City is empowered to levy a property tax on both real and personal property located within its
boundaries. The property tax is an ad valorem tax. Funding for the General Fund, by order of
significance, is provided by sales tax, payments in lieu of tax blessed to enterprise funds of the City,
intergovernmental revenues, property tax, recreation and camping fees, hotel /motel tax, land rents and
VIII
leases, and other revenues. The City provides the following services to its citizens: police, motor vehicle
testing and licensing, jail, animal control, building inspection, fire, public works, community
dev#opment, Arary, parks and recreation, electric, water, wastewater, port and harbor, library,
healthcare services, Epad maintenance, and general administrative services. The City is financially
responsible for a hospital and long -term care facility which are being reported as a new enterprise fund
within the City's financial statements, and which were previously reported as a discreetly presented
component unit and two distinct debt service funds.
Budgetary Control
The Cip7's budget serves as the foundation for financial planning and control. The City transitioned from
a single -year budget to a biennial budget beginning in 2010, and each subsequent budget reflects a two -
year period of time. Adjustments to the budget are made periodically throughout the year, as authorized
by the City Council, and in the off -ftdget year, a review is conducted and modifications are
recommended to the City Council. All departments submit budget requests to the City Manager on or
before September 1 every odd - numbered year. The City Manager utilizes these requests to formulate a
proposed budget and submits the proposed budget to the City Council at the Mrst 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 Cil Manager is authorized to make transfers between departments
and line items 4 thin a Fund for amounts up to $50,000. Council action is required for transfers between
funds, for all single -item purchases exceeding $50,000 (and all purchases of new motor vehicles
regardless of cost), and for all new appropriations. Budget -to- actual comparisons are provided in this
report for the General Fund.
Factors Affecting Financial Condition
Economy
Prior to 2009, Seward's economy eiVerienced slow, steady economia ; groah of applBximately 6% per
year over the previous ten years, as evidenced by growth in tax revenues fueled largely by tourism. In
2009, in conjunction Nith a worldwide recession, visitor numbers to Seward declined, resulting in a
sig>Wicant drop in room occupancy, charter and tour boat passengers, campers, and lcable sales. The
reduction in visitors had an adverse impact on local businesses; especially those involved r the visitor -
related industry, and between 2008 and 2009, led to declines in sales tax revenues ($552,454 or - 13.3 %),
hotel /motel tax (- $76,691 or - 21.2 %), and passenger fees (- $153,964 or - 23.4 %). Since 2009, the local
economy has recovered slowly, with sales tax revenues finally reaching pre -2009 levels in 2011, but with
hotel /motel tax still 7.5% lower than 2008 levels, and passenger fees lower by 15 %. Sales tax revenues
increased by $404,259 or 10.8% in 2011, which represented the largest percentage increase in taxable
sales in the Kenai Peninsula Borough. This is a strong sign of economic improvement. However, the
high costs of gasoline are expected to continue to make it costly to travel, and may continue to put
pressure on visitor numbers to Alaska. Overall, real estate values in Alaska have been stable, with
Seward seeing an overall inciWse in property values, resulting in a rise in property tax revenues of 4.9%
from 2010 to 2011.
The City's top ten property taxpayers have become more diverse over the past few years, but still lean
toward an over - dependence on tourism - related businesses and the visitor industfl. The top -ten taxpayers
group represents various industries including retail sales, seafood processing, petroleum products,
hotel /motel, communications, and tolurism, and accounts for approximately 26% of all taxable property in
the community. With the bulk of these entities being visitor - related, the City is vulnerable to changes
that affect the tourism industry, since sales tax and property tax are two of the community's top revenue
sources, and combined, account for nearly 50% of all General Fund revenue. Seward's top ten sales tax
lines of business show that the bulk of sales taxes are generated from retail trade, followed by
accommodations and food service, and public administration.
IX
Seward's largest employers continue reflect significant government presence, with 60% of the top ten
employers being government or non - profit entities, including Me state -owned prison and voclional
technical center, the City, the Borough school district, and three non - profits. Providence Seward Medical
and Care Center (the hospital and l(g- term -care facility) and 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 Safeway, CIRI Alaska tourism, the Breeze Inn,
and Ray's Waterfront.
Long Term financial planning
In the off - budget year, the City focuses attention on longer -term financial planning. In 2011, the focus
was on conducting rate reviews of the City's enterprise funds, and examining in depth, the condition of
ir>jastructure in those funds. The result of this process was the development of a ten -year plan for each
enterprise fund, which listed e critical risk (likely to Nil in the next five years), high risk ()rely to fail
within the next 5 -10 years), and moderate risk (cq0tinuously increasing cost to operate and maintain)
infrastructufneeds, and identified potenthl funding strategies to meet these needs. The outcome of this
effort was an increase in rates i most enterprise funds, recognizing the lack of identified revenue to
repair /replace critical City infrastructure, as well as the deteriorating financial condition of some
enterprise funds. Combined with automatic tariff increases based on rises in the consumer price index,
the City is making important progress in the area of enterprise fund financial improvement.
The next phase of long -term financial planning proposes to focus on strengthening the City's financial
condition to address a number of key areas of structural weakness in the City's financial healthinfluencedbythelaggingeconomy, rising healthcare costs, significant rise in costs of fuel and utilities,
ailing enterprise operations and infrastructure, and changes in healthcare reimbursement models. This
phase will improve on the financial forecast completed in 2010, which highlighted the importance of
planning to meet pend0g h-u-nges r tba City's facial &m ditian in order to provide siifficient tiwe
for course correction.
Financial Condition
The City has struggled for a number of years to bring its General Fund,401esignated fund balance to a
level that meets its own policy of having between three and six months' reserves available in the
undesignated fund balance account. As a result of implementing GASB Statement No. 54, Fund Balance
Reporting col Governmental Fund Type Definitions, this policy will now look at unassigned fund
balance to meet this goal, as the term undesignated fund balance will no longA be utilized.
In 2011, at $3.5 million, the level of unassigned fig l balance meets the low end of the policy band due to
one -time EXXON Valdez oil spill settlement payments in 2009 and 2010 of nearly $2.0 million. This
brings the City's reserve levels in the General Fund to within the lower range of three to six months'
expenditures and trwnsfers -out (the policy band is betweg $3.4 million and $6.9 million), and provides
some flexibility to the City in terms of me unexpected needs and emergencies. However, there is
significant ppessure to spend reserves to meet capital repair, replacement, and expansion needs. In
addition, the City'seserve levels are at risk due to: significant recent health system financial shortfalls,
Alaska Sealife Center funding uncertain* "enterprise fund critical needs, unforeseen emergencies and
natural disasters, potential sustained reduction in visitors (impactiNg passerier fees, for example), Md
other similar risks. Any of these risks can have a significant adverse impact on the City's financial
condition, enhancing the need for a healthy level of unassigned reserves.
In receR years, municipal governments in Alaska experienced a significant decline in State financial
assistance. In the past five years howeigr, the State legislature has provided reveae sharing funds and
assistance in the form of funding a portion of retirement system liabilities. This has mitigated the need to
reduce services or increase property taxes to cover the shortfall. The general strength of Seward's retail
sales has enabled the Cil to absorb State funding reductions, but revenue sharing remains the City's only
source of finding governmental inAstructure and capital needs. The City's continued dependence on
state and federal funding for major repairs and replacement of infrastructure assets is not sustainable in
the long -term. In addition, any change in the State's current policy of funding retirement system rates
hove 22% could have a materially adverse financial impact on the City. For example, if the City had
been required to pay the full actuarially required contribution rate of 30.76% to the pension plan, inyle4d
of only 22 %, the additional cost to the City in 2011 would have been $540,734. This is the additional
amount that the State of Alaska paid to the defined benefits pension plan on the City's behalf in 2011.
The City's enterprise funds recently underwent a thorough assessment of capital infrastructure condition
and needs, resulting in the classification of the most critical, high -risk, and moderate -risk repair and
replacement needs. The end result of this process saw rate increases in most enterprise funds. However,
taxpayer rate fatigue, combined with years of failing to pass along cost increases to ratepayers, now
places the enterpirtse funds in a position of having costly critical repair needs, with insufficient resources
18 meet those needs. With reductions in state and federal grant opportunities, it will be more and more
difficult for enterprise funds to mitigate risks to their financial condition. Recent rate increases will help
enterprise funds from falling further behind, but are still expected to fall short of the level necessary to
finance replacement of existing deteriorated assets and infrastructure. In the future, it is hoped that
smaller inEemental rate increases will cause less "rate shock" to ratepayers, as enterprise fund tariffs
have been modified to raise rates annually based on the Anchorage consumer Bice index.
Major Projects
The City is constructing a $10 million replacement library/museum building slated for completion at the
end of 2012. This building is being paid for with a combination of State grant funds, foundation and
private furidraisirt*vni$3.48 million in local genera] oldigatiW bonds
A $7.5 million electric generator replacement project was completed in 2010, replacing two aging
electric genfato and constructing a new building, to provide more consistent electric generation
capability when the community is cut off from purchased power. New grant funds will alICK the old
generators to be moved into the new building, and Will complete automation of controls.
The Coast Guard building foundation and utilities have been relocated to the east harbor, and the old
building was originally slated to be relocated to the new site in order to free up space in the current
harbor for aesthetic improvements by the Alaska Railroad. A new plan intends for the Coast Guard to
construct a new building at the east harbor site rather than transport the old building to the new site. That
work is slated for completion in 2012.
The new levee /road was completed in 2011 in the area north of Forest Acres. This project has been in
Me works for ten years, and reflects the final phase of a major project aimed at mitigating future flooding
in this area, which has sustained millions of dollars of damage from past flood events. The new
levee /road also shifts indusoial purpose traffic and landfill traffic out of the Forest Acres Subdivision,
improving safety and quality of life in the neighborhood. The City will seek funding to pave the road in
the future.
Additional automated paid parking stations have been added to the harbor parking lots, creating staffing
efficiencies in the parking enterprise fund. The success of paid parking stations has resulted in the parks
and recreation department working with the vendor to consider testing a modified system for use in the
City's campgrounds.
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Cash Management Policies and Practices
The investment and collateralization of City funds is governed by Section 5.15 of the SewiWity Code.
The ordinance clearly identifies safety as the primary concern in the selection and management of the
City's investments. The Seward City Code authorizes investment in obligations of the U.S. Treasury, its
agencies and instrumentalities, repurchase agreements, fully collateralized certificates of deposit, high
rated commercial paper, bankers' acceptances, and the Alaska Municipal League Investment Pool. The
City combines all cash into a Central Treasury, facilitating the investment of combined funds to
maximize investment earnings. Earnings on these investments are allocated monthly to participatinS
funds based on ending cash balances. The City Code places limitations on maturity of investments and
investment guidqjnes are contained in an investment policy established by the finance director and
approved by the city manager.
Sisk 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 employ =s' liability, laFm enforcement
professional liability, and workers' compensation. The City also maintains special marine insurance
coverage and boiler jUd machinery insurance coverage with other insurance companies. This specialized
insurance is placed throw 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 minimize insurance premiums.
Pension and Other Post - employment Benefits
The City provides pension benefits for all eliale employees throes the State of aka Public
Employees Retirement System (PERS). This system consists of four defined benefit (DB) Tiers, and one
defined contribution (DC) 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 near -term annual contribution rates to
be capped at 22% of covered payroll for both the DB and DC Plans, based on legislative action agreeing
to StMe of Alaska coverage (d costs exceeding 22 %. The transition from a single- agent, multiple -
employer plan, to a cost - sharing plan as of July 1, 2008, provides a single rate for all participating PERS
employers, eliminating the previous methodology of assessing each employer its own rate. The Pity of
Seward now shares in the pooled liability of the PERS plan. The legislature's cap on local government
contribution rates brings stability to Seward's retirement rates, mitigatirig the recent trend of significant
annual rate increases, although it is important to note that a future State legislature can eliminate the
State subsidy abov 22 %. In 1998, the General Fund contributed $194,666 toward funding retirement
contributions. In11, that contribution was $1,723,753, of which $540,734 was paid by the State of
Alaska, and $1,183,019 was paid by the City. This reflects an 885% overall increase, or an average
annual increase of 68 %. The State's contribution on behalf of the City in 2011 represented 31.4% of the
City's 2011 PERS actuarially required contribution.
Financial Reporting Award
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement for Excellence in Financial Reporting to the City of Seward for its
comprehensive annual financial report (CAFR) for the year ended December 31, 2010. This is the 17th
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
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principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one
year only. We Vieve that our current comprehensive annual financial report continues to meet the
Certificate of Achievement Program's requirements and we are sinning it to the GFOA to determine
its eligibility for another certificate.
Acknowledgments
Preparation of the CAFR could not have been accomplished without the dedicated service 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 is also due to the Mayor
and the members of the Seward City Council for their interest and support in planning and conducting the
operations of the City of Seward in a resporlible and progressive mVner.
Respectfully sub ' ed,
S unt, City anage kristiq Erchinger, FinarPe Director
XIII
Certificate of
Achievement
3:
for Excellence
in Financial
Reporting
Presented to
City of Seward K
Alaska
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
December 31, 2010
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 govarament accounting
and financial reporting.
3
4 ' e - -44
9
President
J .o
Executive Director
XIV
ZI
CITY OF SEWARD
LIST OF PRINCIPAL OFFICIALS
COUNCIL MEMBERS
David Seaward
Jean Bardarson
Robert Valdatta
Mariana Keil
Vanta Shafer
Ristiiie Casagranda
Christy Terry
James Hunt
Kristin Erchinger
John Foutz
W.C. Casey
Mack Funk
Tom Clemons
laid Squires
Karin Sturdy
Patty Linville
Mayor
Vice Mayor
Council Member
Ccmncil Member
Council Member
Council ljejjber
Council Member
ADMINISTRATION
City Manager
Finance Director
Manager of Electric Utility
Public Works Director
Harbormaster
Chief of Police
Fire Chief
Parks & Recreation Director
Library Director
CITY CLERK
Johanna Kinney City Clerk
ATTORNEY
Term Expires
2013
2012
2013
2012
2013
2012
2013
Cheryl Brooking City Attorney, Wohlforth, Johnson, Brecht,
Cartledge & Brooking
The City of Seward is a home -rule city with a council- manager form of
government. Legislative powers of the City of Seward are vested in a council
consisting of a mayor and six council members. The mayor and each council
member are elected from the city at large. The term of office is two years.
The appointed officers of the city include the city manager, city clerk, and the
city attorney. The city council generally meets on the second and fourth
Mondays of each month in the City Council Chambers located in the City Hall
Buil*g at 410 Adams Street in Seward, Alaska.
1
1
XV
CATY OF6EWARD
4ganfaRionzl CI%rl
XVI
FINANCIAL
SECTION
Flott da,
Independent Auditor's Report
Honorable Mayor and City Council
City of Seward, Alaska
Em
McGu uwEE I ItMcGIMrey
We have audited the accompanying financial statemoLs 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, 2011 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 operating account of the Providence Seward Medical and Care Center (PSMCC)
which represents 10 %, Op /o, and 100% respectively, of the assets, net assets, and revenues of the PSMCC
Enterprise Fund, and 3 %, 0 %, and 45% respectively, of the assets, net assets, and revenues of the
business -type activities. Those financial statement components were audited by other auditors whose
report thereon has been famished to us, and our opinion, insofar as it relates to the amounts included for
the operatiq laccount of the rovidence Seward Medical and Care Center is based on the report of the
other auditor.
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 a1surance about whether the financial statements are
free of material misstatement. The financial statements of the operating account of Providence Seward
Medical and Care 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 financid statement presentation. We
believe that our audit and the report of the other auditors provide a reasonable basis for our opinions.
In our opinion, based on our audit and thf-report of 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, each major f &wd, and the aggregaft remmilOg fund infowation
of the City of Seward, Alaska as of December 31, 2011, 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.
7 - -a
r
Honorable Mayor and City a3uncil
City cd Seward, Alaska
In accordance with Governniint Auditing Standards, we have also issued our report dated June 7, 2012
on our consideration of City of Seward's internal control over financial reporting and on our tests of its
compliance with certain provisions CA laws, regulations, contracts, and grant agreements and other
matters. The purpogq of that report is to describe the scope of our testing of internal control over
financial reporting and compliance and the results of thei 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.
Accounting principles generally accepted in the United States of America require thdrImanagement's
discussion and analysis on pages 4 through 15 be presented to supplement the basic financial statements.
Such information, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for placing
the basic financtl statements in an appropriate operational, economic, or historical context. We have
applied certain limit procedures to the required Applementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on tIN information because the limited procedures do not provide us with
sufficient evidence to express am opinion or provide any aesuranee.
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, the Schedule of Stated Financial Assistance, and the combining and
individual fund financial statements and schedules listed in the table of contents 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 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 ofAlaska Audit Guide and Compliance Supplement
for State Single Audits. Such information is the responsibility of management and was derived from and
relates directly to'.Ae underlying accounting and other records usedTo prepare the financial statements.
The i1formation has been subjected to the auditing procedures applied im the audit of the financial
statements and certain additional procellzes, including comparing and reconciling Such information
directly to the underlying accounting and other records used to prepare the financial statements or to the
financial statements themselves, and other additional procedures in accordance with auditing standards
generaWy accepted in the United States of America. In our opinion, the inflarnation is fairly stated in all
material respects in relation to the financial statements as a whole.
Honorable Mayor and City Council
City of Seward, Alaska
We also have previously audit, in accordance with auditing standards generally accepted in the United
States, the City of Seward's basic financial statements for the year ended December 31, 2010 which are
not presented with the accompanying financial statements. In our report dated June 14, 0011, we
expressed unqualified opinions on the respective financial statements of the governmental activities,
business -type activities, each major fund, and the aggregate remaining fund information. That audit was
conducted for the+purpose of forming opinions on the financial statements that collective], comIRise the
City -0f Seward's financial statements as a whole. The individual fund financial statements and
schedules related to the December 31, 2010 financial statements are presented for purposes of additional
analysis and are not a required part of the financial statements. Such information is the responsibility of
management and was derived from and relates directly to the underlying accounting and other records
used to prepare the December 31, 2010 financial statements. The information has been subjected to the
auditing procedures applied in the audit of those financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the financial statements or to the financial statements themselves, and other
additional procedures in accordance with auditing standards generally accepted in the United States of
America. In our opinion, the 2010 individual fund financials statements and schedules are fairly stated
huall material respects in relation to the basic financial statements from which they have been derived.
The other data included in this report, designated as the "introductory" and "statistical" section" in the
table of contents, has not been subjected to the auditing procedures applied in the audit of the basic
financial statemend bKok accordingly, vfe express no opinion on it.
Cry ;e 22 4
Anchorage, Alaska
June 7, O12
RI
CITY OF SEWARD
Management's Discussion and Analysis
December 31, 2011
As management for the Citjj,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 for
the fiscal year ended December 31, 2011. In addition to this discussion a0i an *sis, readers are
encolffaged to read our letter of transmittal found on pages VII -XIII of this report, which provides
additional summary information.
FINANCIAL HIGHLIGHTS
The assets of th8 City of Seward eJed liabilities by $151,330,689 at December 31, 2011. Of
this amount, $124,778,991 represnits investment in capital assets net of debt, $5,117,958 is
restricted for capital purposes, and the remainder of $21,433,740 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 as
determined by the City Council.
Mcluding business -type activities, the assets of the primary government elteeded liabilies by
65,637,450. Of this amount, $5,784,965 in unrestricted net assets is legally unreserved ad
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 $2,944,252. Governmental acwvities increased by
2,U2,534 and l -Winess -re activities greased bar $181,718.
The City's governmental funds reported combined ending fund balances of $10,031,563,
representing an increase of $497,348 compared to the prior year. While $5,904,040 of the fund
balance is lega* availa* fgr spending, only $3,497,721 has not already been earmarked for
specific purposes (uffiassigned fuid balance). This reflects a decrease in available unassigned
fund balance of ($558,180) or (13.7 %), the bulk of which resulted from a subsidy of $750,000
from the Gensil Fund to cover operational shortfalls at t* hospital.
The total debt of governmental activities increased by $3,163,472 or 272% due to the issuance
of $3,480,000 in genegl obliga *n bonds for the new library/museum, c (Mbined with the
maturity of Me community center building bonds, the street and sidewalk bonds, and the fire Mir
pack capital lease. The total debt of business -type activities decreased by ($2,394,534) or
5.1%).
OVERVIEW OF TIV FINANCIAL STATEMENTS
This Management Discussion and Analysis serves to introduce readers to the City of Seward's basic
financial statements, which includes the government -wide financial statements, the individual fund
statements, and notes to the financial statemeng. In addition to the basic financial statements, this
report also contains other required supplementary information. The basic financial statements include
two types of statements reflectig different views of the City's financial activities:
1. Government -udde financial statements summarize the City's overall financial condition and
contain both short-term and long -term information. This information is intended to present a
broader view of the City as a whole in a manner similar to private- sector business.
2. Fund financial statements focus on specific areas of City operations and provide more detail
than the government -wide statements
4
government -wide Financial Statements
The government -Wide financial statements are irMAM a provide a comprehensive lool at all financial
Wtivities of the City and are presented on the accrual basis of accounting, in a manner similar to a
busin%s enterprise.
The %ategent 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
tim mcreases or decreases in net assets may demonstrate whether the City's financial position is
imp ing or deteriorating. There are other non - financial facers, 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
Itar's actAties. This statement is prepared on the accrual basis of accounting which is comparable to
private - sector businesses. Revenues and expenses are repdRed 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 reWnues (govemmental activities) from other
functions that are intended to recover all or a significant portion of their costs through user fees and
charges (business -type activities). The .governmental activities of V City of Seward include general
government, public safety, public works, parks and recreation, library, and the Alaska Sealife Center.
The business -type activities of the City include hospital and long -term care facility, harbor, marine
industrial center, electric, watff, wastewater, and parking. The government -wide financial statements
can be found•on pages 1 8wl 9 of this report.
Fund Financial Statements
A fund is a groupirtg of related accounts used to maintain control over resWces 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 Mquirements. The
funds of the City of Seward are divided into three categories: governmental funds, proprietary funds,
and fiduciary funds, each of which is further described below.
Governmental Funds
Governmental Funds are used to account for essentially the same functions reported as governmental
activities in the government -wide financial statements. However, unlike the government -wide financial
statflpents which provide a broad overview and include short-terms and lorWterm information, the
governmental funds' financial statements focus on near -term inflows and outflows of spendable
resouroes, -e well as on balanees of spendable resoumes available at the end-of the fiseal year. Sueh
information is useful in evaluating a government's near -term financWhg 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. The Governmental Funds Balance Sheet and the Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances prdWide a reconciliation to
facilitate the comparison between governmental funds and governmental activities.
The City of Wward Miairoins nineteqg (IJ) individual governmqmtal ds. As Major Funds,
information for the GWeral Fund and the Library/Museum Capital Project F d are presented as distinct
columns in the Governmental Funds Balance Sheet and in the Governmental Fund Statement of
Revenues, Expenditures, and Changes in Fund Balances, with the other seventeen governmental funds
aggregated and shown in the Non -major Funds column on these same two statements. Individual fund
information for the non -major 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 24 to demonstrate compliance with the annual bAget, and a list of budgetary
higNights can be found later in this doc nent. The basic governmental fund financial statements ca be
found on pages 20 -24 of this report.
Proprietary Funds
The City of Seward ml,*rtains 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 -wNe financial statements. The City u$es enterprise funds to account for the hospital and
long -term care facility (Proviftnft Sward Medical & Care Center), harbor, Seward Marge Industrial
Center, electric utiity, water utility, wastewater utility, and parking operations. Information for each of
these funds is presented in the indiPdWI fund statements found on pages 90 -120 of this report.
Internal service funds are used to accgnulate and allocate costs internally among the pious fOctions
of the City. The City of Sew,i utilizes two internal service funds to account for its motor pool
equipment replacement program and 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 ac *ities 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 122 -128 of this report.
Fiduciary Funds
Fiduciary funds account for resources held by the City in a trustee capacity, for the benefit of parties
outside of the government. Fiduciary funds are not reflected in the governmew -wide financiak
statements because the resources of those funds are not available to support programs of the City. The
aAounting used Wor fiduciary funds is similar to that of governmental funds. The City utilizes a single
fiduciary fund, the Ton Council Agency Fund, and data for that fund can be found on page 129 of this
report.
Notes to the Basic Financial Statements
The 1ptes provi(b additional information esseUtial to a coniple.W understanding of tic data provided in
the government -wide and fund financial statements. The notes can be found on pages 31 -59 of this
report.
ether Information
In addition to the basic financial statements and accompanying notes, this report presents certain
rdiluired supplementary information on the public employee's retirement system on pages 53 -56 of this
report.
11
GOVERNMWT -WIDE FINANCI&L 19NALYSIS
Statement of Net Asseirs
Over time, net assets may serve as a useful indicator of a:government's financial position. At December
31, 2011, the Cilg's assets exceeded liabilities by $151,330,689. A significant portion of the City's net
assets (82 %) reflects its investment in capital assets, less any outstanding debt used to acquire those
assets. Capital assets are not ligwd and are not available for future spending. Since the investment in
capital assets is repoi&d 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, 2011 and 2010
Net assets:
Invested in capi#1 assets,
net of related debt 56,122,348
Restricted 3,730,137
Arestricted 5,784,965
Total net assets $ §,(Q7,45Q
As restated
55,093,397 68,656,643 70,333,064 124,778,991 125,426,461
1,387,821 3,464,536 5,117,958 3,464,536
7,781,519 15,648,775 11,713,921 21,433,740 19,495,440
J-623wU9 ' J AhjgQ 148.386.417
At the dod of 2QI 1, the City of Surd is aloe to wport Wsitive ]lalarXes in all three QgtegKies of net
assets, for the government as a whole, as well as for its separate governmental and business -type
activities.
H
Gover netiLl Rosiness -Type
Activities Activities Total
2011 2010*2011 2010*2011 2010*
CurrerMand other assets 12,510,182 9,807,362 24,641,268 21,226,915 37,151,450 31,034,277
Capital assets 59,182,285 56,010,315 113,394,866 117,091,053 172,577,151 173,101,368
Total assets 71,692,467 65,817,607 138,036,134 138,317,968 209,728,601 204,135,645
iong -term liabilities
outstanding 4,487,329 1,374,106 44,959,459 46,935,752 49,446,788 48,309,858
Other liabilities 1,567,688 1,568,655 7,383,436 5,870,695 8,951,124 7,439,350
Total liabilities 6,055,017 2,942,761 52,342,895 52,806,447 58,397,912 55,749,208
Net assets:
Invested in capi#1 assets,
net of related debt 56,122,348
Restricted 3,730,137
Arestricted 5,784,965
Total net assets $ §,(Q7,45Q
As restated
55,093,397 68,656,643 70,333,064 124,778,991 125,426,461
1,387,821 3,464,536 5,117,958 3,464,536
7,781,519 15,648,775 11,713,921 21,433,740 19,495,440
J-623wU9 ' JAhjgQ 148.386.417
At the dod of 2QI 1, the City of Surd is aloe to wport Wsitive ]lalarXes in all three QgtegKies of net
assets, for the government as a whole, as well as for its separate governmental and business -type
activities.
H
Statement of Activities
The City's total revenues and expenses for Svernmegal and business -type activities are reflected in the
following table.
Table 2
Change in Net Assets
For the Years Ended December 31, 2011 and 2010
Revenues:
Program gvenues:
Charges for servir&s
Operating grants /
contributions
Capital gratis /
contributions
General revenues:
Sales taxes
Property taxes
Payments in lieu tax
Other
Total revenues
Expenses:
General gaveguwnt
Public s@'ety
Public works
Parks & Rec/ Library
Unallocated interest
Alaska Sealife Center
Electric
Water
Wastewater
Harbor
SMIC
PSMCC
Parking
Total expenses
Governmental FoWness -Type
Activities Activities Total
2011 2010* 2011 2010* 2011 2010*
1,602,805 1,674,592 32,731,576 33,301,353 34,334,381 '4,975,945
1,128,278 614,010 401,734 2,674,610 1,530,012 3,288,620
3,573,497 1,716,277 2,291,919 1,988,431 5,865,416 3,704,707
4,147,010 3,742,751 - -4,147,010 3,742,751
999,737 960,397 - -999,737 960,397
78,574 75,317 - -78,574 75,317
1,772,827 1,568,270 1,614,564 878,328 3,387,391 2,442,598
13,302,728 10,351,614 37,039,793 38,842,721 50,342,521 49,190,335
2,03159.0,00,705 31 0
3,140,921 3,168,421 3,140,921
1,988,748 1,991,925 1,988,748
1,862,005 1,899,447 1,862,005
173,993 1,505,248 173,993
51,939 731,528 51,939
10,493,512 8,569,240 10,493,512
1,230,833 1,093,419 1,230,833
1,044,654 1,078,318 1,044,654
3,676,190 5,947,066 3,676,190
1,081,862 926,290 1,081,862
20,416,615 17,354,000 20,416,615
205,407 157,229 205,407
9,249,196 10,097,285 38,149,073 35,125,562 47,398,269
00,716
3,168,421
1,991,925
1,899,447
1,505,248
731,528
8,569,240
1,093,
1,078,318
5,947,066
926,290
17,354,000
157,229
45,222,847
Increase (decrease) in net
assets before transfers 4,053,532 254,329 (1,109,280) 3,717,159 2,944,252 1,806,448
Transfers
Increase in net assets
Beginning net assets
Ending net assets
As restated
1,290,998) 1,258,053 1,290,998 (1,258,053 - -
2,762,534 1,512,382 181,718 2,459,106 2,944,252 3,971,488
62,874,916 61,362,534 85,511,521 83,052,415 148,386,437 144,414,949
11 _ 1 S,1_0_ 1483.86.437
1
1
0
8
GovernmentE Activities
Governmental and business -type activities both increased the City of Seward's net assets.
Governmental activities increased net assets by $2,762,534. The following items are of particular note:
The activities of Providence Seward Medical & Care Center (PSMCC; hcl ital aA long -term
care facility) were restated frog their prior presentation (as ,governmental activities in 2010 --
debt service funds — and as a discreetly- presented component unit), to their current presentation
as a business -type activity in 2011.
Capital and operating grants increased from the prior year by more than 12.3 million, due to the
librarpconstruction, shellfish halrhery, historic preservation projects, levee completion, etc.
Sales tax revenues increased by $404,259 or 10.8% from the prior year, lis a result of the
rebound in economic Aivity following the nationwide recession, returning to pre- recession
taxable sales levels.
The City does not generate sufficient tax revenues to cover depreciation on general gwernment
assets. To rglace capital assets in the future, the City will need to rely on external financing
sources such as grants, or incurring debt to finance construction.
The following graph reflects the revenues and expenses associated with each of the general
government's primary programs:
Business -Tjpe Activities
Business -type activities increased the net assets of the City by $181,718, including adjustments for
Motor Pool Internal Service Fund activities. As is the case with governmental activities, a substantial
portion (80 %) of the $85.7 million in net assets is invested in capital assets. The increase in net assets is
cpmprised of the fojjowing:
Net assets decreased in the Water Enterprise Fund by ($72,078), in the Seward Marine Industrial
Center Fund by ($450,296), in the Electric Enterprise Fund by ($710,057), and in the Providence
Seward Medical & Care Center Enterprise Fund by ($1,941,034). Net assets increased in the
Wastewater Enterprise Fund by $19,915, in the Harbor Enterprise Fund by $3,300,877, and in
the Parking Enterprise Ff&d by $45,990.
Allocations of the Motor Pool Internal Service Fund to the business -type activities reduced net
assets by ($11,599).
0
The Electric Enterprise Fund experienced earnings from operations of $202,603, a reduction of
346,618) from the prior year. 01mrating revenues were higher by $1.4 million, but operating
costs were up by $1.8 million. ffiie biA of this is due to higher power costs (up:$1.27 million),
personnel costs related to major utility infrastructure repairs which were not reimbursed by
cusuners (replacement of power line under Lowell Point Road, repairs to downed power lines,
generator replacement project, etc.), accounting for $240,000 in lower reimbursed costs. Repair
and maintenance costs were up by nearly $200,000 from the pAbr year.
The Electric Enterprise Fund (excluding associated capital projects) experienced an increase in
cash during the year of $873,518, from a negAve cash balance of ($233,894) to a positive
balance of $639,624. Including related capital projects, the ending electric utility- related cash
balance is $2,350,230, with $1,710,606 of those funds restricted by bond covenant and grant
agreement. The depletion of cash from the enterprise fund remains a significant concern,
especially ,given the level of critical -risk and high -risk j frastructure needs of the Fund. It also
results in no contribution to the depreciation reserve fund for the future replacement of capital
assets, which is not consistent with the City's budget1 f olicy of setting aside 100% of annual
depreciation costs for replacement of capital assets. The following rate increases were approved
to address these concerns; 5% in 2010, 5% in 2011, 10% in 2012 and 5% in 2013.
The net decrease in Seward Marine Industrial Anter (SAUC) net assets of ($450,296) results
from an operating loss of ($486,125), which includes depreciation expense of $601,831. The
cash balances in the SNUC fund remains at $0.
The net decrease in Water Enterprise Fund net assets of (272,078) is due entirely to an increase
in purchased services of more than $100,000, representing engineering sAces needed to
qualify for low- interest loans and grants to construct a new North Forest Acres water tank,
refurbish existing water storage tanks, etc. The wa ier i#ility ends the year with $1.85 million in
cash (excluding water - related capital projects), much of which has accumulated from a four -year
delay in beginning repayments on a loan with the State of Alaska DEC. The City will remit in
excess of $725,0)0 as a first loan payment in 2012.
The net increase ja Harbor Eiterprise Find net assets of $3.3 neon is due p0narily to capital
grant contributions of $1.79 million, and $1.4 million in State of Alaska Commercial Passenger
Vessel Tax proceeds. The enterprise"fund experienced a loss from operations of ($79,979), and
would be able to fund much of its depreciation if it did not have to use its cash to make
payments on debt ($732,680). In 2010, the Harbor took an important step in identifying a
specific rebbnue source (raw fish tax proceeds being contributed fro% the General Fund, and a
newly creatA capital renewal and replacement fee) to contribute to the Major Maintenance and
Repair Fund. The purpose of this fund is to repair and replace existing infrastructure, and the
balance in this account at year -end is $772,645. The Harbor Enterprise Fund (excluding capital
projects) ended the year with a cash balance of $2.8 million, with $709,910 restricted by bond
covenants. Including Capital Project Funds, the harbor ended the year with a net increase in
cash of $1,095,755 due primarily to capital contributions of $2.77 million, and commercial
palsenger vessel tax receipts of $374,294.
The net decrease in net assets of the Providence Seward Medical & Care Center Enterprise Fund
of ($1,941,034) is due to a loss from operations of $2.2 million. Most of that loss comes from a
reduction in cost reimbursements from the State of Alaska. Some of the loss is due to the
necessity of increasing staffing levels to safely transition to a new model of care which
encourages elders to become more active. The City's operator of the h4ital and long -term
care facility, Provid &ce Health & Services, is appealing $1.8 million of the facility's 2011
reimbursement rate. The dispute has to do with an error in charges data whiclidias been
corrected (the magnitude is nearly one -half of the amount in dispute), and a "lower of cost or
charges" regulation in which a facility is reimbursed based on the lower of its costs in a rebase
year, or its charges in a rebase year. Seward's rebase yea was 2009 yea*;eward Mountain
Haven opened its doors). Elders in the old Wesley building from January through September,
2009, were billed based on the (lower) costs of operations in the old building. Charges were
appgpriatdj increased to the elders in October, when they moved into the new facility.
10
However, because the overall charges in 2009 were lower than the facility's costs in 2009
during tigt time, a new facility was being outfitted and equipped, operations were ramping up
for the new facility, while concurrently operating in the old facility), the State is limiting
reimbursement to the amount of charges. This outcVmq,could have been avoided if the facility
had raised all rates in January 2009, nine months prior to moving into the new facility. The
increase in rates was not considered at the time, as would have been inappropriate to impose a
significant increase in rates to take advantage of a reimbursement regulation. The outco a of
this dispute is very important because it will impact the reimbursement rate of the facility a
period of four gears.
The non -major funds experienced the following: 1) increase in Parking Enterprise Fund net
assets of $45,990 and an increase in cash of $21,505 d1p to parkingdees Ding higher than the
prior year by V6,059. The acquisition of automated pay stations resulted in a small reduction in
personnel costs; and 2) a net increase in Wastewater Enterprise Fund net assets of $19,915 and
iWrease in cash of $184,241 to $580,247 (for the wastewater utility only, excluding related
capital projects).
FINANCWLL ANALYSIS OF TIM GOVERNMENT'S FUNDS
Governmental Funds
The City of Seward's governmental funds focus on near -term inflows, outflows, and balances of
5'pendable 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 -ye obligatiIns. However, it does not indicate whether there are sufficient funds
available to corer long -term operations. The level of unassigned ,Vnd balance is an important
indicator of the amount of net resources available for spending at the end of the year.
At the end of the year, the City of Seward's govermmntal gads reported combined erding fund
balances of $10,031,583. Of this amount: $397,406 is nonspendable (4ventory, prepaid items);
3,730,137 is restricted by bond covenants requiring its use for construltion of the library/museum;
x,126,418 has been committed by the City Council for working capital, hospital line of credit, and
insurance reserves; $279,901 has been assigned by the administration foT payment of grant- related
projects; and $3,497,721 is unassigned, and legally available for spending. These new
classifications of fund balance promulgated in GASB Statement No. 54, reflect efforts to create a
hierarchy of fund balance to enable the reader of the financial statements to understand the extent to
whic&6 fund balance reserves are available for spending. The hierarchy repogs, in order, the least
spendable to the most spendable fund balance; first are resources which are not available for
spending (non4pendable), then resources which are restricted by legislation or external agencies
restricted), next resources which the City Council has committed to spend for a specific purpose by
way of enabling legislation, and then resources which have been assigned for a specific use but
don't meet the definition of restricted or committed, and finally, the unassigned fund balance which
remains avdlable for spending.
Fund balances in theAovw=ental funds increased by $2,981,822, representing a net decrease in the
General Fund of ($716,205), a net increase in the Library/Museum Capital Project of $3,738,090,
and a combined net decrease in other governmental funds of ($40,063).
The overall net increase in fund balance is due to the following:
General Fund
General Fund revenues were $615,635 higher than expenditures, and after subtracting net transfers
of ($1,331,840), fund balance decreased by ($716,205). General Fund revenues came in 72,876
2.7 %) higher than in 2010, and expenditures came in $256,334 (2.7 %) higher as well.
11
21
The General Fund's fund balance must be able to meet unforeseen needs and emergencies, as wqJ II
as future spending needs. The City's fund balance policy is to maintain unassigned fund balance
equal to between three and six months' expenditures and routine transfers -out to other Winds. 'fie
General Fund unassigned fund balance at the end of 2011 is $3,510,601, equal to a1wroximately 3
months' reserves, d*vn from 4.2 months' at the end of 2010 due, primarily, to the $750,000
healthcare operational loss. In the City's case, an adequate level of Ad balance is between $3.3
m2ion and $6.5 rriffilion (based on 2011 actuals), which results in the General Fund currently being
in the low -range of the desired level of unassigned fund balance.
Special Revenue Funds
Special revenue fund projects experienced a net decrease in fund balance of (- $52,763) to $22,606,
with all but the Fish Ditch Restoration project maintaining a positive fund balance.
Major Capital Project Funds
The Library/Museum Fund experienced a net increase in fund balance of $3,738,090 due to the
issuance of $3.48 million in geWral obligation bonds.
Non -Major Capital Project Funds
All other capital projects combined experienced a net increase in fund balance of $12,700 to
244,415. Most funds maintain a positive fuEl balance with the exception of the Flood Mitigation
Fund (deficit of - $10,019) and Fire Department Equipment Fund (deficit of -$478) which are
pend5t reimbursement of capital grants from state and federal agencies.
Proprietary Funds
The City of Seward maintains two types of proprietary funds; enterprise funds and internal service
funds. The City's seven enterprise funds (hospital, harbor, electric, walEr, wastewater, parking, and
warine industrial center) report the same functions presented as business -type activities in the
government -wide financial statements, but the individual fund statements are present% in more detail.
interprise fuMls repaged total net assets of $W-1 mflia, with $6W 1Wn invested in capital assets
net of related debt, leaving iffrestricted net assets of approxim4Fly $14 million, and restricted net assets
of $1.4 million. Of the unrestricted net assets, $4.0 million is in restricted cash (bond reserve funds,
bond proceeds, etc.) and not available for appropriation, and current liabilities total $10.4 million. More
specific factors influencing the net assets of the enterprise funds are addressed above in the discussion of
the City's business -type activities.
The City maintains two internal service funds; the motor pool and the compensated annual leave fund.
The Motor Pool Internal Service Fund accumllates 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 veidcles Wer 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 unrestricted
cash in the motor pool at ye end is $886,780, reflecting an increase of $211,455. The Motor Pool
maintains an outstanding loan -due from the General Fund in the amount of approximately $1.06 million
related to the payoff of prior hospital PERS liabilities. The Compensated Annual Le #e Fund
accumulateWash reserves to pay annual leave cash -outs for governmental funds. The balance of cash in
this fund at the end of 2011 is $425,643.
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 $1.5 million related primarily to State
payments on behalf of the City for PERS ($414,535) and revenue sharing ($412,846),
increased tax projections ($108,810), shellfish hatchery grant ($250,000), raw fish tax
250,000), and various general government grants ($63,809).
12
3
Fapenditures were increased by $658,647, as follows: $214,673 related to the State
payments on behalf of the City for public employee's retirement system costs; $110,784
in debt service tolPepay a partial loan to the electric fund; $10,000 for Council travel for
the Coastal Villages initiative; $65,000 for Communrry Health Center startup co s;
8,000 for repairs to the boardwalk; 1J30,000 for dispatch software; $6,783 for the city
manager hiring process; $11,000 for police radio upgrades; $4,500 for a m Val donation
to SAAMS; and the remaining $197,907 for miscellaneous grants in the police, fire, and
library departments.
Transfers to other funds increased by a total of $1.8 million due to the sharing of excess
raw fish Rax with the Harbor ($234,451), matching funds for fire hose grant project
20,165), excess sales tax to pay for hospital debt service ($24,953), CDQ economic
study ($85,000), excess loan pagWnt to the electric fund ($226,846), the SMC dolpjjn
project ($395,759), hospital operating losses ($750,000), and misc*aneous grants
62,826).
On a budgetary basis, General Fund revenues came in $332,208 lower than budget primarily due to Re
timing of library grant revenues and revenue sharing receipts, wJA 111tergovernmental Revenues alone
coming in under budget by $341,813. JpvestmWt earnings cable in significan* lower than budget Lg
170,256, due to the sustained low intern rate environment. General Fund expenditures were under
budget by $807,131 due to: lower than expected retirement system contributions and debt service
pa3 ients ($321,759 savings); elimination of the community developnent director position ($173,168
savings); public safety ($234,812 savings); and public works ($103,064 savings).
General Fund Actual Highlights
General Fund revenues exceeded expenditures by $615,635, and after transfers between funds were
accounted for, there was a net decrease in fund balance of ($716,205), which wg due entirely to the
750,000 conribution to the Provid*ce Seward Medical & Care Center Enterprise Fund to cover
operational shortfalls.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
As of December 31, 2011, the City had $172,577,151 invested in capital assets net of accumulated
depreciation, representing an overall increase of $1,006,769 from the previous year.
Table 3
City of Seward Capital Assets
in thousands, net of depreciation)
Land and improvenrgnts
Buildings
Improverronts other
than buildings
Machinery and equipment
Construction in progress
Governmental Business -Type
Activities Activities
2011 2010* 2011 2010*
5,432 5,432 17,484 17,484
38,019 37,832 29,941 22,143
1,910 2,076 53,276 56,580 55,186 58,656
X,107 4,910 6,874 7,449 11,981 12,359
8,714 5,760 5,820 13,435 14,534 19,195
Total
2011 2010*
22,916 22,916
67,960 59,975
Total net capital assets $ 11 17A. 1 101
As restated
Additional information regarding the City of Seward's capital assets can be found in Footnote 4 on
pages 41 -43.
13
Long -term Debt
As of December 31, 2011, the City had total debt outstanding of $48,758,935. Of this amount,
5,030,000 represents outstanding general obEgation bonds backed by the ill faith and credit of the
City. Gael obligation bonds outstanding include the hospital and library/museum bonds. An
additional $39.9 million represents: revenue bonds backed by opUating revenues from the harbor
enterprise fund ($6.88 million), electric enterprise fund ($6.73 million), and long -term care facility
26.3 million). The Mmaining debt represents an outstanding capital equipment lease on fire /rescue
vehicles, loaders, water and waste4ffter loans, and compensated absences.
Table 4
City of Seward Outstanding Debt
in thousands)
As restated
Further detail regarding the City's long -term outstanding debt can be found on pages 44 -51.
Economic Factor Y '
The City recently passed its second Biennial Budget for the period January 1, 2012 through December
31, 2013. The budget will be periodically reviewed ad adjusted as necessary to meet changigg
economic conditions. Sales tax and property tax projections Kere budgeted slightly loger than 2011
actual levels, due to continued economic uncertainty. Some small business owners have expressed
concern that Nigher fuel and iltility pOces may have an impact on their ability to survive in the near
future. The budget restores a portion of contributions to the Motor Pool Fund, although levels have
been reduced for the third straight year to offset recessionary pressures on resources. The budget
assumes new debt service costs associated with the new library/museum. Raw fish taxes are anticipated
to increase, positively impacting the harbor's funding for critical and high -risk caotal needs. The
General Fund budget is a balanced budget.
There are no proposed changes to tax rates in the 1112/2013 Budget, vith the mill rate remaining at 3.12
mills, the City sales tax rate remaining at 4 %, and the hotel /motel bed tax rate remaining at 4 %. The
harbor tariff anticipate a 10% rate increase in transient moorage, plus a 2.8% increase in 2012 and a
2.6% increase in 2013, for all other harbor rates, equal to the consumer price index for Anchorage,
averaged Wer the fiW previous full years. 'Ili Harbor capital renewal and replacement fee will be used
to fund aging harbor infrastructure, as will much of the raw fish tax proceeds. The electric tariff will
increase 1i 10% in 2012 and 5% in 2013, and then according to the five year average CPI thereafter, to
address significant critical and high -risk capital infrastructure items. The special contract with the
Alaska V ailroad Will not be renewed in 2012. The next two years will involve continued upgrades to the
electric generator project, and the completion of right- ofevay clearing. The water tariff will increase
4% in 2012 and 6% in 2013. This is not considered sufficient to cover the costs of a new water storage
tank, which will require grants and/or loans to fund. The wastewater tariff will increase 6% in 2012 and
6% in 2013, and those rate increases are necessary solely to keep the Fund from falling behind
14
Governmental Business -Type
Activities Activities Total
2011 2010*2011 2010*2011 2010*
General obligation bonds 3,480 91 1,550 2,394 5,030 2,485
Revenue bonds 39,930 41,325 39,930 41,325
Capital leases 420 615 420 615
Loans 2,775 2,930 2,775 2,930
Compensated absences 426 457 177 178 603 635
Total outstanding debt 4?fi 1 4 4 8.75 7.99Q
As restated
Further detail regarding the City's long -term outstanding debt can be found on pages 44 -51.
Economic Factor Y '
The City recently passed its second Biennial Budget for the period January 1, 2012 through December
31, 2013. The budget will be periodically reviewed ad adjusted as necessary to meet changigg
economic conditions. Sales tax and property tax projections Kere budgeted slightly loger than 2011
actual levels, due to continued economic uncertainty. Some small business owners have expressed
concern that Nigher fuel and iltility pOces may have an impact on their ability to survive in the near
future. The budget restores a portion of contributions to the Motor Pool Fund, although levels have
been reduced for the third straight year to offset recessionary pressures on resources. The budget
assumes new debt service costs associated with the new library/museum. Raw fish taxes are anticipated
to increase, positively impacting the harbor's funding for critical and high -risk caotal needs. The
General Fund budget is a balanced budget.
There are no proposed changes to tax rates in the 1112/2013 Budget, vith the mill rate remaining at 3.12
mills, the City sales tax rate remaining at 4 %, and the hotel /motel bed tax rate remaining at 4 %. The
harbor tariff anticipate a 10% rate increase in transient moorage, plus a 2.8% increase in 2012 and a
2.6% increase in 2013, for all other harbor rates, equal to the consumer price index for Anchorage,
averaged Wer the fiW previous full years. 'Ili Harbor capital renewal and replacement fee will be used
to fund aging harbor infrastructure, as will much of the raw fish tax proceeds. The electric tariff will
increase 1i 10% in 2012 and 5% in 2013, and then according to the five year average CPI thereafter, to
address significant critical and high -risk capital infrastructure items. The special contract with the
Alaska V ailroad Will not be renewed in 2012. The next two years will involve continued upgrades to the
electric generator project, and the completion of right- ofevay clearing. The water tariff will increase
4% in 2012 and 6% in 2013. This is not considered sufficient to cover the costs of a new water storage
tank, which will require grants and/or loans to fund. The wastewater tariff will increase 6% in 2012 and
6% in 2013, and those rate increases are necessary solely to keep the Fund from falling behind
14
financially. These rate levels do not address critical or high -risk capital infrastructure needs. Both
water and sewer tariffs will be adjusted after 2013 according to the five yar average CPI. By amending
tariffs to allow for anUpal incremental rate increases, enterprise funds are expected to keep pace with the
of increased costs for VmM and services.
Requests for Information
The City of Seward's financial statements anh the accompanying information are designed to present
users (citizens, taxpayers, elected officials, customers, investors, and Eeditors) with a general overview
of the City's finances, gnd to demonstrate accountability to taxpayers and ratepayers. Questions
concerning ilLarmation in this report, or requests for additional information, can be addressed to the
City of Seward, Attn: Finance Director, P.O. Boxy 67, Sewall, Alaska 99664.
M
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16
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
17
Assets
Cash and investments
Receivables, net of allowance
for doubtful accounts:
Taxes
Accounts
Assessments, due within one year
Grants, shared revenues, and loans
Accrued interest
Other
Prepaid items
Inventories
Restricted cash and investments
Other
Unamortized bond issuance costs
Assessments, due after one year
Internal balances
Capital assets not being depreciated
Capital assets being depreciated
Total assets
Liabilities
Accounts payable
Payable to Providence Health and Services - Washington
Due to contractual agencies
Accrued payroll and related liabilities
Accrued interest
Other accrued liabilities
Funds held in trust
Customer deposits
Unearned revenue
Noncurrent liabilities:
Due within one year:
Accrued leave
Notes payable
Bonds payable
Capital lease obligations
Due in more than one year:
Accrued leave
Notes payable
Bonds payable, net of bond premium and deferred loss
Capital lease obligations
Other liabilities
Total liabilities
Net Assets
Invested in capital assets, net of related debt
Restricted for capital projects and bond retirement
Unrestricted
Total net assets
Total liabilities and net assets
See accompanying notes to basic financial statements.
CITY OF SEWARD
Statement of Net Assets
December 31, 2011
18
Exhibit A -1
Primary Government
Governmental Business -type
Activities Activities Total
10,913,204 8,490,403 19,403,607
604,289 604,289
68,614 3,858,069 3,926,683
13,075 13,075
2,035,370 1,903,230 3,938,600
75,255 75,255
197,117 1,003,565 1,200,682
394,421 394,421
10,880 923,098 933,978
1,973,360 3,992,384 5,965,744
32,320 32,320
624,958 624,958
37,838 37,838
3,762,328)3,762,328
14,146,427 23,303,995 37,450,422
45,035,858 90,090,871 135,126,729
71,692,467 138,036,134 209,728,601
887,174 1,371,512 2,258,686
2,819,000 2,819,000
361,000 361,000
111,798 963,743 1,075,541
126,158 542,082 668,240
169,865 169,865
54,659 54,659
218,801 218,801
218,034 1,107,298 1,325,332
112,489 41,206 153,695
643,981 643,981
2,295,000 2,295,000
191,219 15,000 206,219
313,154 136,030 449,184
2,131,358 2,131,358
3,640,969 39,652,884 43,293,853
229,498 229,498
44,000 44,000
6,055,017 52,342,895 58,397,912
56,122,348 68,656,643 124,778,991
3,730,137 1,387,821 5,117,958
5,784,965 15,648,775 21,433,740
65,637,450 85,693,239 151,330,689
71,692,467 138,036,134 209,728,601
CITY OF SEWARD
Statement of Activities
Year Ended December 31, 2011
Functions:
Exhibit A -2
Net (Expense) Revenue and
Program Revenues Changes in Net Assets
Fees,
Fines &
Charges for
Expenses Services
Jwciuiuciva1 acuvuics:
98,961Generalgovernment $2,031,590
Public safety 3,140,921
Public works 1,988,748
Parks and recreation 1,395,705
Library 466,300
Sea Life Center 51,939
Unallocated interest 173,993
Total governmental
18,040
Primary Government
Operating Capital Business -
Grants & Grants & Governmental type
Contributions Contributions Activities Activities Total
190,795 98,961 23,126 (1,718,708)1,718,708)
740,204 1,589,561 (811,156)811,156)
40,910 438,742 1,509,096)1,509,096)
620,943 572,535 202,227)202,227)
9,953 18,040 1,960,810 1,522,503 1,522,503
51,939)51,939)
173,993)173,993
activities 9,249,196 1,602,805 1,128,278 3,573,497 (2,944,616 - (2,944,616)
Business -type activities:
116,551 39,587)Electric 10,493,512 10,309,524
Water 1,230,833 1,069,732
Wastewater 1,044,654 864,740
Harbor 3,676,190 2,968,021
SMIC 1,081,862 413,454
PSMCC 20,416,615 16,838,000
Parking 205,407 268,105
Total business -type
63,312
27,850 116,551 39,587)39,587)
17,612 137,085 6,404)6,404)
17,285 250,200 87,571 87,571
154,677 1,788,083 1,234,591 1,234,591
183,696 484,712)484,712)
3,578,615)3,578,615)
614 63,312 63,312
activities 38,149,073 32,731,576 401,734 2,291,919
Total primary
2,723,844 (2,723,844)
government $ 47,398,269 34,334,381 1,530,012 5,865,416 (2,944,616 2,723,844 5,668,460)
General revenues:
Taxes:
Sales taxes 4,147,010 4,147,010
Property taxes 999,737 999,737
Other taxes 334,824 334,824
Payment in lieu of taxes 78,574 78,574
Grants and entitlements not
restricted to a specific purpose 1,346,755 1,411,435 2,758,190
Investment income 91,248 203,129 294,377
Transfers 1,290,998)1,290,998
Total general revenues and transfers 5,707,150 2,905,562 8,612,712
Changes in net assets
Beginning net assets, as restated
Ending net assets
See accompanying notes to basic financial statements.
19
2,762,534 181,718 2,944,252
62,874,916 85,511,521 148,386,437
65,637,450 85,693,239 151,330,689
Assets
Cash and investments
Receivables, net of allowance for doubtful accounts:
Taxes
Accounts
Grants and shared revenues
Other receivables
Accrued interest
Prepaid items
Inventory
Due from other funds
Restricted cash and investments
Total assets
Liabilities and Fund Balances
Liabilities:
Accounts payable
Accrued payroll and related liabilities
Accrued liabilities
Accrued interest
Funds held in trust
Due to other funds
Deferred revenue
Interfund loans payable
Total liabilities
Fund balances:
Nonspendable:
Inventory
Prepaid items
Restricted for library and museum
Committed:
Working capital
Insurance
Hospital line of credit
Assigned:
Parks and recreation
Public works
Library
Capital projects
Unassigned:
General Fund
Deficit
Total fund balances
Total liabilities and fund balances
See accompanying notes to basic financial statements.
CITY OF SEWARD
Governmental Funds
Balance Sheet
December 31, 2011
Major Funds
Library/
Museum
Capital
General Project
6,729,580 2,601,981
604,289 -
68,614 -
26,160 1,364,671
49,986
15,571 -
386,526 -
10,880 -
709,598 -
1,973,360 -
10,524,578 4,016,638
503,203 286,501
111,798 -
169,865 -
72,180 -
54,659 -
230,229 -
3,348,219 -
4,490,153 286,501
10,880 -
386,526 -
3,730,137
1,500,000 -
126,418 -
500,000 -
Nonmaj or
Funds
269,220
644,539
147,131
1,060,890
97,470
688,649
7,750
iy,aoy
Exhibit B -1
Total
Governmental
Funds
9,600,781
604,289
68,614
2,035,370
197,117
15,571
386,526
10,880
709,598
1,973,360
15,602,106
887,174
111,798
169,865
72,180
54,659
688,649
237,979
3,348,219
5,570,523
10,880
386,526
3,730,137
1,500,000
126,418
500,000
2,520 2,520
11,031 11,031
11,438 11,438
254,912 254,912
3,510,601 - -3,510,601
12,880 12,880
6,034,425 3,730,137 267,021 10,031,583
10,524,578 4,016,638 1,060,890 15,602,106
0 01
CITY OF SEWARD
Reconciliation of Governmental Funds Balance Sheet
to Statement of Net Assets
December 31, 2011
Exhibit B -2
Total fund balances for governmental funds $ 10,031,583
Total net assets reported for governmental activities in the
Statement of Net Assets is different because:
Capital assets used in governmental activities are not
944,944
financial resources and therefore are not reported
in the funds. These assets, net of accumulated Internal
depreciation consist o£Governmental Service
Land $5
Construction in progress 8,714,138
Buildings 57,991,642
Improvements other than buildings 16,119,523
Machinery and equipment 8,308,728 5,359,335
Accumulated depreciation 39,953,574 2,789,796)
Total capital assets $56,612,746 2,569,539 59,182,285
Other long -term assets are not available to pay for current
3,689,970 851,337 (4,541,307
period expenditures and therefore are deferred in the funds.19,945
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.
Net assets related to governmental activities $ 2,663,146
Less amount reported with capital assets (2,569,539)
Plus amount reported with long -term liabilities 851,337
See accompanying notes to basic financial statements.
21
944,944
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 Internal
reported as fund liabilities. These liabilities consist of:Governmental Service
General obligation bonds payable 3,480,000)
Accrued interest on bonds 49,001)4,977)
Capital leases payable 420,717)
Accrued leave 425,643)
Unamortized bond premium 259,854)
Unamortized deferred loss on refunding 98,885
Total long term liabilities 3,689,970 851,337 (4,541,307
Total net assets of governmental activities 65,637,450
See accompanying notes to basic financial statements.
21
CITY OF SEWARD
Governmental Funds
Statement of Revenues, Expenditures and Change in Fund Balances
Year Ended December 31, 2011
Revenues:
Taxes
Licenses and permits
Intergovernmental
Charges for services
Fines and bails
Investment income
Other
Total revenues
Expenditures:
Current:
General government
Public safety
Public works
Parks and recreation
Library
Debt service:
Principal payments
Retirement benefits
Interest and other costs
Total expenditures
Excess of revenues over
under) expenditures
Other financing sources (uses):
Proceeds from debt issuance:
Par value
Premium
Transfers in
Transfers out
Net other financing
sources (uses)
Net change in fund balances
Beginning fund balances (deficit), as restated
Ending fund balances
L`-1 -1.;+ n I
Major Funds
429,663 3,186,257
3,187,849
Library/
4,767,575
Total
439,525
Museum
1,241,495
Govern-
1,563,361
Capital Nonmajor mental
General Project Funds Funds
5,563,249 5,563,249
160,096 160,096
1,987,846 1,910,824 2,644,193 6,542,863
2,645,948 2,645,948
12,177 12,177
25,744 25,744
59,1 49,986 45,682 154,857
10,454,249 1,960,810 2,689,875 15,104,934
2,756,594 429,663 3,186,257
3,187,849 1,579,726 4,767,575
1,443,772 439,525 1,883,297
1,241,495 321,866 1,563,361
401,602 1,962,574 -2,364,176
100,477 100,477
631,278 631,278
75,547 75,547
9,838,614 1,962,574 2,770,780 14,571,968
615,635 1,764) (80,905)532,966
3,480,000 - 3,480,000
259,854 - 259,854
1,938,448 - 40,842 1,979,290
3,270,288 - - (3,270,288)
1,331,840 3,739,854 40,842 2,448,856
716,205) 3,738,090 (40,063) 2,981,822
6,750,630 (7,953 307,084 7,049,761
6,034,425 3,730,137 267,021 10,031,583
See accompanying notes to basic financial statements.
22
CITY OF SEWARD
Reconciliation of the Changes in Fund Balances of Governmental Funds
to Statement of Activities
Year Ended December 31, 2011
Net change in fund balances - total governmental funds
The change in net assets reported for governmental activities in the
Statement of Activities is different because:
Governmental funds report capital outlays as expenditures. However
on the Statement of Activities, depreciation expense is recognized to
allocate the cost of these items over their estimated useful lives.
This is the amount by which capital outlays of $5,497,825 exceeded
depreciation and loss on asset disposals of $2,032,289.
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.
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:
Issuance of long -term bonds - par value
Issuance of long -term bonds - premium
Payment of bond principal
Amortization of deferred loss on refunding
Capital lease payments
Increase in accrued interest on bonds
3,480,000)
259,854)
90,970
49,445)
9,507
49,001
Exhibit B -4
M 2,981,822
3,465,536
3,104)
3,737,823)
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.
Change in net assets of governmental activities
See accompanying notes to basic financial statements.
56,103
2,762,534
23
CITY OF SEWARD
General Fund
Statement of Revenues, Expenditures
and Change in Fund Balance - Budget and Actual
Year Ended December 31, 2011
Exhibit B -5
Net change in fund balance
Beginning fund balance
Ending fund balance
991 (1,193,340 (716,205) 477,135
6,750,630
6,034,425
See accompanying notes to basic financial statements.
24
Variance
Original Final Positive
Budget Budget Actual Negative
Revenues:
Taxes 5,326,591 5,435,401 5,563,249 127,848
Licenses and permits 170,810 173,910 160,096 13,814)
Intergovernmental 931,500 2,329,659 1,987,846 341,813)
Charges for services 2,541,823 2,591,667 2,645,948 54,281
Fines and bails 17,000 17,000 12,177 4,823)
Investment income 196,000 196,000 25,744 170,256)
Other 73,650 42,820 59,189 16,369
Total revenues 9,257,374 10,786,457 10,454,249 332,208
Expenditures:
Current:
General government 2,799,820 2,908,773 2,756,594 152,179
Public safety 3,235,789 3,422,661 3,187,849 234,812
Public works 1,530,704 1,546,836 1,443,772 103,064
Parks and recreation 1,207,062 1,222,791 1,241,495 18,704)
Library 410,119 415,623 401,602 14,021
Debt service:
Principal payments 159,883 270,667 100,477 170,190
Retirement benefits 560,671 775,344 631,278 144,066
Interest and other costs 83,050 83,050 75,547 7,503
Total expenditures 9,987,098 10,645,745 9,838,614 807,131
Excess of revenues over
under) expenditures 729,724)140,712 615,635 474,923
Other financing sources (uses):
Transfers in 2,200,005 1,986,237 1,938,448 47,789)
Transfers out 1,471,272 3,320,289 3,270,288 50,001
Net other financing sources (uses)728,733 1,334,052 1,331,840 2,212
Net change in fund balance
Beginning fund balance
Ending fund balance
991 (1,193,340 (716,205) 477,135
6,750,630
6,034,425
See accompanying notes to basic financial statements.
24
Exhibit C -1
CITY OF SEWARD
Proprietary Funds
Statement of Net Assets
December 31, 2011
See accompanying notes to basic financial statements.
25
Enterprise Funds
Total Internal
Major Funds Nomnajor Enterprise Service
Assets Electric Water Harbor SMIC PSMCC Funds Funds Funds
Current assets:
Cash and investments 639,624 1,845,042 3,582,014 1,434,633 989,090 8,490,403 1,312,423
Receivables:
Accounts 925,064 79,547 140,058 226,767 3,739,000 77,425 5,187,861
Accrued interest 59,684
Assessments 1,720 7,069 4,286 13,075
Interfund loans 16,769 16,769 68,113
Grants and loans 2,241 1,900,989 1,903,230
Other receivables 70,930 5,635 907,000 20,000 1,003,565
Less allowance for doubtful accounts 41,628)3,580)19,100)1,262,000)3,484)1,329,792)
Prepaid expenses 7,895
Inventory 864,014 59,084 923,098
Total current assets 2,476,493 1,995,038 5,608,247 226,767 4,818,633 1,083,031 16,208,209 1,448,115
Noncurrent assets:
Restricted cash and investments 1,710,606 84,064 2,076,615 8,984 112,115 3,992,384
Assessments receivable, net of current portion 9,450 17,672 10,716 37,838
Other 32,320 32,320
Deferred charges - unamortized debt issuance costs 111,156 79,214 434,588 624,958
Interfund loans, net of current portion 351,973 1,973,360 2,325,333 1,062,786
Property, plant and equipment:
Total capital assets not being depreciated 899,957 463,745 9,807,461 12,021,821 111,011 23,303,995
Total capital assets being depreciated 55,768,255 8,729,645 24,578,100 41,132,868 37,910,319 12,741,227 180,860,414 5,359,335
Less accumulated depreciation 31,937,234 4,084,262 11,264,921)27,582,176)8,207,769)7,6( 93,181)90,769,543 2,789,796
Total noncurrent assets 26,914,163 7,184,224 25,287,185 25,572,513 30,178,442 5,271,172 120,407,699 3,632,325
Total assets 29,390,656 9,179,262 30,895,432 25,799,280 34,997,075 6,354,203 136,615,908 5,080,440
Liabilities and Net Assets
Current liabilities:
Accounts payable 475,904 9,323 517,091 110,304 226,000 32,890 1,371,512
Payable to Providence Health and Services - Washington 2,819,000 2,819,000
Due to other funds 20,949 20,949
Due to contractual agencies 361,000 361,000
Accred payroll and related liabilities 32,569 4,619 21,857 900,000 4,698 963,743
Accrued interest 27,666 154,193 32,229 327,703 291 542,082 4,977
Current portion:
Accrued annual leave 17,576 4,584 14,491 4,555 41,206 112,489
Bonds payable 345,000 400,000 1,550,000 2,295,000
Notes payable 583,838 60,143 643,981
Capitalleaseobligations 15,000 15,000 191,219
Interfund loans 22,358 22,358
Customer deposits 163,771 55,030 218,801
Deferred revenue 48,726 993,508 43,064 22,000 1,107,298
Total current liabilities 1,111,212 756,557 2,056,564 174,317 6,220,703 102,577 10,421,930 308,685
Noncurrent liabilities, net of current portion:
Accrued annual leave 64,568 14,341 40,920 16,201 136,030 313,154
Bonds payable 6,385,000 6,480,000 26,320,000 39,185,000
Unamortized bond premium 58,516 104,345 369,531 532,392
Notes payable 2,069,011 62,347 2,131,358
Unamortized deferred loss on refunding 64,508)64,508)
Other 44,000 44,000
Capital lease obligations 229,498
Interfund loans 102,424 102,424
Total noncurrent liabilities 6,508,084 2,083,352 6,663,181 26,733,531 78,548 42,066,696 542,652
Total liabilities 7,619,296 2,839,909 8,719,745 174,317 32,954,234 181,125 52,488,626 851,337
Net assets:
Invested in capital assets, net ofrelated debt 17,942,462 2,456,279 16,200,803 25,572,513 1,448,019 5,036,567 68,656,643 2,148,822
Restricted for bond retirement 677,911 709,910 1,387,821
Unrestricted 3,150,987 3,883,074 5,264,974 52,450 594,822 1,136,511 14,082,818 2,080,281
Total net assets 21,771,360 6,339,353 22 175,687 25,624,963 2,042,841 6,173,078 84,127,282 4,229,103
Total liabilities and net assets 29,390,656 9,179,262 30,895,432 25,799,280 34,997,075 6,354,203 5,080,440
Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds 1,565,957
Net assets of business -type activities 85,693,239
See accompanying notes to basic financial statements.
25
Operating revenues:
Charges for services
Vehicle rental and interfund
charges
Total operating revenues
Operating expenses
CITY OF SEWARD
Proprietary Funds
Statement of Revenues, Expenses and Change in Net Assets
Year Ended December 31, 2011
Enterprise Funds
Major Funds
Electric Water Harbor SMIC PSMCC
10,309,524 1,069,732 2,968,021 413,454 16,838,000
Exhibit C -2
840,528
10,309,524 1,069,732 2,968,021 413,454 16,838,000 1,132,845 32,731,576 840,528
Salaries and benefits
Total Internal
Nonmajor Enterprise Service
Funds Funds Funds
1,132,845 32,731,576
840,528
10,309,524 1,069,732 2,968,021 413,454 16,838,000 1,132,845 32,731,576 840,528
Salaries and benefits 205,469 289,490 920,929 73,568 11,820,000 385,333 13,694,789 380,846
Services and supplies 5,789,960 454,849 708,601 135,550 3,811,114 355,961 11,256,035 7,584
Administration 2,625,100 233,744 332,159 88,630 1,018,103 183,732 4,481,468
Depreciation 1,486,392 208,527 1,086,311 601,831 2,398,169 313,449 6,094,679 460,842
Total operating expenses 10,106,921 1,186,610 3,048,000 899,579 19,047,386 1,238,475 35,526,971 849,272
Earnings (loss) from operations 202,603 116,878)79,979)486,125)2,209,386)105,630)2,795,395)8,744)
Nonoperating revenues (expenses):
Intergovernmental - PERS on- behalf 27,850 17,612 59,532 3,307 17,899 126,200
Dredging and breakwater grant 95,145 95,145
Fleet relocation grant 180,389 180,389
Fleet relocation study 180,389)180,389)
Investment income 101,384 25,888 48,982 101 15,701 11,073 203,129 65,504
Interest expense 338,139)44,040)320,623)1,894)1,346,962)10,809)2,062,467)18,088)
Commercial passenger vessel tax 1,411,435 1,411,435
Gain (loss) on disposal of capital assets 22,267)22,267)5,832
Other expenses 40,321)40,321)
Dredging 305,059)305,059)
Net nonoperating revenues (expenses)249,226)540 989,412 1,514 1,353,528)18,163 594,205)53,248
Earnings (loss) before contributions
and transfers 46,623)117,418)909,433 484,611)3,562,914)87,467)3,389,600)44,504
Capital contributions 116,551 137,085 1,788,083 250,200 2,291,919
Transfers in 392,846 995,210 124,640 1,756,584 3,269,280
Transfers out 1,172,831)91,745 391,849)90,325)134,704 96,828)1,978,282
Change in net assets 710,057)72,078)3,300,877 450,296)1,941,034)65,905 193,317 44,504
Beginning net assets, as restated 22,481,417 6,411,431 18,874,810 26,075,259 3,983,875 6,107,173 4,184,599
Ending net assets $21,771,360 6,339,353 22,175,687 25,624,963 2,042,841 6,173,078 4,229,103
Adjustment to reflect the consolidation of internal
service fund activities related to enterprise funds 11,599)
Change in net assets of business -type activities 181,718
See accompanying notes to basic financial statements.
26
Cash flows from capital and related
financing activities:
Principal payments on long -tern debt
Capital lease payments
Interest payments on long -term debt
Acquisition of property, plant and
equipment
Capital contributions received
Proceeds from sale of capital assets
lnterfimd loan payments
Commercial passenger vessel tax receipts
Decrease in due to other funds
Transfers in
Net cash flows from capital and
related financing activities
Cash flows from investing activities:
Investment income received
lnterfund loan receipts
Net cash flows from investing
activities
Net increase (decrease) 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
330,000)38,622)385,000)59,030)1,465,000)116,355)2,394,007)
Exhibit C -3
CITY OF SEWARD
23,000)23,000)
347,724)4,247)
Proprietary Funds
2,066)1,377,588)14,450)2,072,561)20,411;
280,202)9,092)
Statement of Cash Flows
72,412)2,192,709)167,280;
117,360
Year Ended December 31, 2011
250,200 3,664,754
Enterprise Funds
5,832
21,194)
Total Internal
21,194)
Major Funds
374,294
Nonmajor Enterprise Service
374,294
Electric Water Harbor SMIC PSMCC Funds Funds Funds
Cash flows from operating activities:
392,846 395,759
Receipts from customers and users 10,393,414 1,070,679 3,026,492 234,372 15,380,253 1,129,603 31,234,813
46,983
Payments to suppliers 5,992,792)440,018) (2,068,287)40,777)2,188,011)332,072)11,061,957)15,479)
Payments to employees 1,178,557)272,676) (857,287)72,093)11,754,000)369,281)14,503,894)412,391)
Payments for interfund services used 847,691)233,744) (332,159)88,630)1,018,103)183,732)2,704,059)
Receipts from interfund charges
64,666
117,317 25,888 48,982 101 15,701
840,528
Net cash flows from operating
133,618
activities 2,374,374 124,241 231,241 32,872 420,139 244,518 2,964,903 412,658
Cash flows from noncapital financing activities:
179,910
1,712,984 1,394,386 4,562,874 2,310,485 895,459
Transfers in 599,451 124,640 1,756,584 2,480,675
Transfers out 1,172,831)91,745) (391,849)90,325)134,704)96,828)1,978,282)
Nonoperating intergovernmental revenues received 95,145 95,145
Net cash flows from noncapital
financing activities 1,172,831)91,745 302,747 34,315 1,621,880 96,828 597,538
Cash flows from capital and related
financing activities:
Principal payments on long -tern debt
Capital lease payments
Interest payments on long -term debt
Acquisition of property, plant and
equipment
Capital contributions received
Proceeds from sale of capital assets
lnterfimd loan payments
Commercial passenger vessel tax receipts
Decrease in due to other funds
Transfers in
Net cash flows from capital and
related financing activities
Cash flows from investing activities:
Investment income received
lnterfund loan receipts
Net cash flows from investing
activities
Net increase (decrease) 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
330,000)38,622)385,000)59,030)1,465,000)116,355)2,394,007)184,507;
23,000)23,000)
347,724)4,247)326,486)2,066)1,377,588)14,450)2,072,561)20,411;
280,202)9,092)1,831,003)72,412)2,192,709)167,280;
117,360 528,297 2,768,897 250,200 3,664,754
5,832
21,194)21,194)
374,294 374,294
233,894)6,192)59,000)299,086)
392,846 395,759 788,605
681,614)476,336 975,267 6( 7,288)2,924,588)46,983 2,174,904)366,366)
101,384 25,888 48,982 101 15,701 11,073 203,129 68,952
15,933 15,933 64,666
117,317 25,888 48,982 101 15,701 11,073 219,062 133,618
637,246 534,720 1,095,755 866,868)205,746 1,606,599 179,910
1,712,984 1,394,386 4,562,874 2,310,485 895,459 10,876,188 1,132,513
2,350,230 1,929,106 5,658,629 1,443,617 1,101,205 12,482,787 1,312,423
639,624 1,845,042 3,582,014
1,710,606 84,064 2,076,615
2,350,230 1,929,106 5,658,629
1,434,633 989,090 8,490,403 1,312,423
8,984 112,115 3,992,384 -
1,443,617 1,101,205 12,482,787 1,312,423
See accompanying notes to basic financial statements.
27
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 expenses
Noncash expense - PERS on- behalf
Increase (decrease) in allowance for
doubtful accounts
Increase) decrease in assets:
Receivables
Prepaid expenses
Inventory
Increase (decrease) in liabilities:
Accounts payable
Other payables
Accrued payroll and related liabilities
Accrued annual leave
Customer deposits
Deferred revenue
Net cash flows from
operating activities
Exhibit C -3, continued
Enterprise Funds
Total Internal
Major Funds Nonmajor Enterprise Service
Electric Water Harbor SMIC PSMCC Funds Funds Funds
202,603 (116,878) (79,979) (486,125) (2,209,386) (105,630) (2,795,395) (8,744)
1,486,392 208,527 1,086,311
8,425 - 5,929
40,321) - (305,059)
27,850 17,612 59,532
2,448 (46) -
40,876 993 7,449
175,331 10,738
442,505 4,093 (1,060,556)
2,186) (3,317) (1,668)
10,115) 2,519 5,778
3,303) - 4,230
43,869 46,792
2,374,374 124,241 (231,241)
601,831 2,398,169 313,449 6,094,679 460,842
19,103 - 33,457 -
345,380)
3,307 - 17,899 126,200
64,000 153 66,555
182,146) (1,513,747) (3,395) (1,649,970)
7,895)
186,069
94,773 3,000 23,889 (492,296)
1,601,000 - 1,601,000
1,832) 66,000 (3,138) 53,859
1,291 (527) (31,545)
927
3,064 (8,000) 85,725
32,872 420,139 244,518 2,964,903 412,658
See accompanying notes to basic financial statements.
28
Exhibit D -1
CITY OF SEWARD
Fiduciary Fund
Statement of Fiduciary Net Assets
December 31, 2011
Teen
Council
Agency
Fund
Assets
Cash and investments
Other assets
Total assets
Liabilities
Accounts payable
Due to Teen Council
Total liabilities
47,351
150
47,501
2,561
44,940
47,501
See accompanying notes to basic financial statements.
29
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30
CITY OF SEWARD
Notes to Basic Financial Statements
December 31, 2011
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, hospital and long -term care, and general administrative
services.
The accompanying financial statements present the City of Seward. In 2011 the City adopted the
provisions of GASB Statement number 61, The Financial Reporting Entity: Ombnibus. In
connection therewith, the City reviewed its legal and contractual arrangements with the Providence
Seward Medical Center which was previously reported as a discreet component unit, and has
determined that, for financial reporting purposes in accordance with generally accepted accounting
principles, this activity is appropriately recorded as an enterprise fund of the City. The 2011
financial statements have been restated to reflect the inclusion of the Providence Seward Medical
Care Center (PSMCC) as an enterprise fund.
The PSMCC facilities (hospital and long -term care facilities) are owned by the City of Seward.
The facilities are managed by Providence Health & Services — Washington, a nonprofit
corporation (the Corporation), under a management and operating agreement. Under the operating
agreement, the Corporation is responsible for day to day management of the PSMCC in exchange
for a management fee. All financial risks and rewards from the operations of the PSMCC accrue
to the City. The City is responsible for debt obligations, including payment of revenue bonds
through revenues generated at the PSMCC. The City pays for all capital costs of the healthcare
facilities and is legally obligated to finance potential deficits.
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. 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.
31
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Summary of Significant Accounting Policies, continued
Government -Wide and Fund Financial Statements, continued
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.
Property taxes, sales taxes, charges for services, 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.
32
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
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.
The Library /Museum Capital Project Fund accounts for all activities related to the design and
construction of the new library and museum.
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. This fund
is deemed major for special interest by the public and for consistency with prior year.
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 Providence Seward Medical & Care Center Enterprise Fund accounts for the local hospital
and long -term care facilities.
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.
33
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
As a general rule the effect of interfund activity has been eliminated from the government -wide
financial statements. Exceptions to this general rule are allocated administration fees and charges
between the enterprise funds and the various other funds and departments. Elimination of these
charges would distort the direct costs and program revenues reported for the various functions
concerned.
Amounts reported as program revenues include 1) charges to customers or applicants for goods,
services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and
contributions, including special assessments. Internally dedicated resources are reported as
general revenues rather than as program revenues. In addition, general revenues include all taxes,
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
34
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Summary of Significant Accounting Policies, continued
Central Treasury
A central treasury is used to account for the City's cash and investments to maximize
investment income. Investments are stated at fair value. Investment income is allocated among
the funds based on their respective cash balances.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the proprietary funds consider all cash and
investments to be cash and cash equivalents. The central treasury, which holds cash and
investments, is used essentially as a cash management pool by each fund.
Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded
as prepaid items in both government -wide and fund financial statements.
Inventory
Inventories are valued at cost in governmental funds and at the lower of cost or market in the
proprietary funds. Cost is determined by the first -in, first -out method. The cost is recorded as an
expenditure or expense at the time individual inventory items are consumed.
Grants and Other Intergovernmental Revenues
In applying the measurable and available concepts to grants and intergovernmental revenues, the
legal and contractual requirements of the numerous individual programs are used as guidance.
There are, however, essentially two types of these revenues. In one, monies must be expended on
the specific purpose or project before any amounts are considered "earned"; therefore, revenues are
recognized based upon expenditures recorded. In the other, monies are virtually unrestricted as to
purpose of expenditure and are usually revocable only for failure to comply with prescribed
compliance requirements. These resources are reflected as revenues at the time of receipt or earlier
if the measurable and available criteria are met.
Property Taxes
Property taxes are liens on the assessed value of taxable property as of January 1. Pursuant to
Alaska Statutes, the City establishes the mill rate and tax levy on or before June 15. The City is
located within the Kenai Peninsula Borough, which acts as the City's agent in the billing and
collection of property taxes. Tax bills for one -half of the taxes are mailed prior to July 1 and are
payable on August 15; tax bills for the second -half of the taxes are mailed by October 1 and are
payable on November 15. City property tax revenues are recognized in the fiscal year in which
they are collectible and available (collected within sixty days after year -end) to finance
expenditures of the fiscal year.
At December 31, the delinquent real and personal property taxes not currently available are
reflected as deferred revenues of the General Fund.
35
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Summary of Significant Accounting Policies, continued
Receivables and Payables
Activity between funds that are representative of 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."
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.
Fund Balances
In the fund financial statements, governmental funds report aggregate amounts for five
classifications of fund balances based on the constraints imposed on the use of these resources.
The nonspendable fund balance classification includes amounts that cannot be spent because
they are either (a) not in spendable form — prepaid items or inventories; or (b) legally or
contractually required to be maintained intact.
The spendable portion of the fund balances comprises the remaining four classifications:
restricted, committed, assigned, and unassigned.
Restricted fund balance – This classification reflects the constraints imposed on resources either
a) externally by creditors, grantors, contributors, or laws or regulations of other governments;
or (b) imposed by law through constitutional provisions or enabling legislation.
Committed fund balance – These amounts can only be used for specific purposes pursuant to
constraints imposed by formal resolutions or ordinances of the City Council —the government's
highest level of decision making authority. Those committed amounts cannot be used for any
other purpose unless the City Council removes the specified use by taking the same type of
action imposing the commitment. This classification also includes contractual obligations to the
extent that existing resources in the fund have been specifically committed for use in satisfying
those contractual requirements.
36
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Summary of Significant Accounting Policies, continued
Fund Balances, continued
Assigned fund balance – This classification reflects the amounts constrained by the City's
intent" to be used for specific purposes, but are neither restricted nor committed. The City
Council and City manager have the authority to assign amounts to be used for specific purposes.
Assigned fund balances include all remaining amounts (except negative balances) that are
reported in governmental funds, other than the General Fund, that are not classified as
nonspendable and are neither restricted nor committed.
Unassignedfund balance – This fund balance is the residual classification for the General Fund.
It is also used to report negative fund balances in other governmental funds.
When both restricted and unrestricted resources are available for use, it is the City's policy to
use externally restricted resources first, then unrestricted resources — committed, assigned, and
unassigned —in order as needed.
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, 2011. 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.
Peneinn Plnm
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 line items within departments, but City Council approval is
required to transfer budget amounts between funds.
37
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Stewardship, Compliance and Accountability, continued
Allocation of Sales Tax Revenues
When the City transferred the operations of the Hospital to Providence Seward Medical and Care
Center on July 1, 1996, the City agreed to allocate 1% of the sales tax for the benefit of the
Hospital. During construction, the allocated sales tax was used to offset losses and transition costs.
Subsequent to completion of the construction, the allocated 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 allocated portion is then transferred to the PSMCC Enterprise debt service.
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 in the case of "negative cash," is included in "due to 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 invest 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 ( AMLIP). 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 value.
The AMLIP is an external investment pool which is rated AAAm 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, 2011:
Government -
Wide
Statement
of Net Assets
Fiduciary Fund
Statement of
Fiduciary
Net Assets Totals
Cash and investments $ 19,403,607
Restricted cash and investments 5,965,744
25,369,351
47,351 19,509,958
5,965,744
47.351 25,416.702
38
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Cash and Investments, continued
Restricted Cash and Investments
The City maintains bond redemption and reserve accounts as required by bond covenants. The
balances at December 31, 2011 are as follows:
General Fund (long -term care facility) $ 1,973,360
Electric Fund 677,911
Harbor Fund 709,910
3,361,181
The City also includes in 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 follows:
Electric Fund 1,032,695
Water Fund 84,064
Wastewater Fund 112,115
Harbor Fund 1,366,705
PSMCC Fund 8.984
26
Custodial Risk
The fair value of the City's investments at year -end is shown below. GASB Statement 3, as
amended by GASB Statement 40, establishes categories as an indication of the level of
custodial risk involved in the investments. 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.
39
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Cash and Investments, continued
Investment types and their maturities at December 31, 2011 are as follows:
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 U.S. 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
and currently 20% is held with the Federal Home Loan Bank.
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 Home
Loan Bank and U.S. Treasuries. All of the U.S. government agencies investments are rated AAA
by Standard and Poors.
M
Investment Maturities (in Years)
Fair Less than 1 to 5 Over
Investment Value 1 year years 5 years
Certificates of deposit 6,815,933 3,056,820 3,759,113 -
U.S. government agencies 5,022,047 4,517,830 504,217 -
Repurchase agreements 2,099,368 2,099,368
Total subject to interest rate risk 13,937,348 9,674,018 44 26 -
Pooled investments 10,837,269
Money market account 757,581
Total investments 25,532,198
Bank deposits 362,796)
Cash at bond bank 247,300
Total cash and investments 25.416,702
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 U.S. 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
and currently 20% is held with the Federal Home Loan Bank.
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 Home
Loan Bank and U.S. Treasuries. All of the U.S. government agencies investments are rated AAA
by Standard and Poors.
M
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Cash and Investments, continued
Credit Risk, continued
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.
4) Capital Assets
See Note 9 regarding restated capital assets. Capital asset activity for the year ended December
31, 2011 was as follows:
Balance
as restated)
Governmental activities
Capital assets not being depreciated.•
Land and land improvements $ 5,432,289
Construction in progress 5,759,828
Total assets not being depreciated 11,192,117
January 1, Additions Deletions Balance
2011 and Reclass- and Reclass- December 31,
Capital assets being depreciated:
Buildings 56,446,234
Improvements other than buildings 16,012,841
Machinery and equipment 12,832,134
Total assets being depreciated 85,291,209
Less accumulated depreciation for:
Buildings 18,614,852
Improvements other than buildings 13,936,474
Machinery and equipment 7,921,685
Total accumulated depreciation 40,473,011
Total capital assets being
depreciated, net
Governmental activity
capital assets, net
44,818,198
ifications ifications 2011
5,432,289
3,986,531 1,032,221 8,714,138
3,986,531 1,032,221 14,146,427
1,545,408 57,991,642
106,682 16,119,523
1,058,705 222,776 13,668,063
2,710,795 222,776 87,779,228
1,357,941 19,972,793
273,452 14,209,926
861,742 222,776 8,560,651
2,493,135 222,776 42,743,370
217,660 45,035,858
56.010.315 4,204,191 11 0 59.182.285
The ending balances include $5,359,335 and $2,789,796 of equipment cost, and accumulated
depreciation, respectively, related to the Motor Pool Internal Service Fund.
41
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Capital Assets, continued
Balance
January 1, Additions Deletions Balance
2011 and Reclass- and Reclass- December 31,
as restated) ifications ifications 2011
Business -type activities
Capital assets not being depreciated:
Land and land improvements $ 17,483,769 - - 17,483,769
Construction in progress 13,435,400 1,867,574 9,482,748 5,820,226
Total assets not being depreciated 30,919,169 1,867,574 9,482,748 23,303,995
Capital assets being depreciated:
Buildings 29,860,869 9,144,312 39,005,181
Improvements other than buildings 124,724,398 523,176 125,247,574
Machinery and equipment 16,519,594 368,446 280,381 16,607,659
Total assets being depreciated 171,104,861 10,035,934 280,381 180,860,414
Less accumulated depreciation for:
Buildings 7,717,425 1,347,050 9,064,475
Improvements other than buildings 68,145,249 3,825,854 71,971,103
Machinery and equipment 9,070,303 921,775 258,114 9,733,964
Total accumulated depreciation 84,932,977 6,094,679 258,114 90,769,542
General government 135,134 104,265
Total capital assets being
Public safety 142,754 101,839 244,593
depreciated, net 86,171,884 3,713,202 22,267 90,090,873
78,058 24,532 102,590
Business -type capital assets, net 117.091.053 5.580,776 99 5 113.394.866
Depreciation expense was charged to the functions as follows:
42
Depreciation Internal
Excluding Service
Internal Fund Total
Service Fund Allocation Depreciation
Governmental activities
General government 135,134 104,265 239,399
Public safety 142,754 101,839 244,593
Public works 101,084 230,206 331,290
Parks and recreation 78,058 24,532 102,590
Library 28,902 28,902
Sea Life Center 1,546,361 1,546,361
Total governmental activities 2.032.293 460.842 22 49
42
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Capital Assets, continued
From General Fund to:
Depreciation
SMIC Enterprise Fund
Excluding
Harbor Enterprise Fund
Internal
Electric Enterprise Fund
Service Fund
Business -type activities
1,756,584
Electric 1,486,392
Water 208,527
Wastewater 296,693
Harbor 1,086,311
SMIC 601,831
Parking 16,756
PSMCC 2,398,169
Total business -type activities 6.094.679
5) Interfund Receivables, Payables, and Transfers
A schedule of interfund balances and transfers as of and for the year ended December 31, 2011,
follows. Interfund balances typically result from short-term operating or capital advances.
Transfers typically result from capital matching, operating subsidies, and payment in lieu of
taxes.
Due from other funds:
Due to the General Fund from:
Nonmajor governmental funds $ 688,649
SMIC Enterprise Fund 20,949
Total due from other funds $ 709.598
Transfers:
From General Fund to:
SMIC Enterprise Fund 124,640
Harbor Enterprise Fund 995,210
Electric Enterprise Fund 392,846
PSMCC Enterprise Fund 1,756,584
Nonmajor governmental funds 1,008
Total transfers from General Fund 3,270,288
From Harbor Enterprise Fund to
nonmajor governmental funds 39,834
43
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Interfund Receivables, Payables, and Transfers, continued
Transfers, continued:
From Electric Enterprise Fund to General Fund 1,172,831
From Water Enterprise Fund to General Fund 91,745
From Wastewater Enterprise Fund to General Fund 75,380
From Harbor Enterprise Fund to General Fund 352,015
From SMIC Enterprise Fund to General Fund 90,325
From Parking Revenue Enterprise Fund to General Fund 21,448
From PSMCC Enterprise Fund to General Fund 134,704
Total transfers to other funds $ 55 24
The City has three outstanding interfund loans. In 2006 the Motor Pool Fund and the Electric
Fund issued interfund loans in the total amount of $1,708,125 to the General Fund for the
purpose of paying of the Seward General Hospital PERS unfunded liability. Repayment is
scheduled over twenty years bearing interest at 5.25 %. Also in 2006, the Motor Pool Fund
loaned $220,258 to the Harbor Enterprise fund for the purpose of purchasing a 50 -ton Boat Lift.
The loan is for ten years and bears interest at 5.5% per year. In 2009 the Water Fund loaned
1,973,260 to the General Fund to be used as a debt service collateral account. Because the cash is
restricted for debt service and is held in a bank account for that purpose, all interest earnings on the
account accrues to the Water Fund and interest is not charged to the General Fund. In addition,
there is no scheduled payback for the funds until they are released from debt service requirments.
Amounts outstanding at December 31, 2011 was as follows:
Payable from the General Fund to:
Motor Pool Internal Service Fund $ 1,006,117
Electric Enterprise Fund 368,742
Water Enterprise Fund 1,973,360
Total payable from the General Fund 3,348,219
Payable from the Harbor Enterprise Fund to
Motor Pool Internal Service Fund 124,782
Total interfund loans payable $ 3,473,001
6)Long -Term Debt
In 2009 the voters approved the issuance of general obligation bonds for the purpose of
constructing a library. The bonds were issued in 2011 in the amount of $3,480,000, with a
premium of $259,854.
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Long -Term Debt, continued
See Note 9 regarding restated long -term debt. The following is a summary of long -term debt transactions of
the City for the year ended December 31, 2011:
Governmental activities
General obligation bonds:
3,480,000 2011 General Obligation
bonds, due in annual installments of
85,000 to $240,000, plus interest
at 4.0% to 5.0% through September 1,
2036 $
1,086,018 2003 refunding streets and
sidewalks bonds, due in final install-
ment of $78,317, plus interest at 3.5%
on December 1, 2011
175,438 2003 refunding senior center
bonds, due in final installment of
12,653, plus interest at 3.5%
on December 1, 2011
Capital leases:
Fire equipment capital lease obligation,
due in final installment of $9,690,
including interest at 3.81% on
May 1, 2011
Fire truck capital lease obligation, due
in annual installments of $110,177,
including interest at 3.295% through
May 13, 2013
Loaders capital lease obligation, due
in monthly installments of $7,895,
including interest at 3.97% through
April 21, 2014
Accrued annual leave
Total governmental activities
long -term liabilities
Less unamortized deferred loss on refunding
Plus unamortized bond premium
Balance
January 1, Balance Due
2011 December 31, Within
as restated) Additions Retired 2011 One Year
3,480,000 - 3,480,000 -
78,317 - 78,317 - -
12,653 - 12,653 - -
9,507 - 9,507 - -
309,888 - 99,996 209,892 103,260
295,335 -
457,188 406,057
84,510 210,825
437,602 425,643
87,959
112,489
1,162,888 33 88
45
722.585 4,326,360
98,885)
259,854
4,487,329
303.708
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Long -Term Debt, continued
Liquidation of the accrued annual leave is made by the Compensated Annual Leave Internal
Service Fund. All other debt service payments above are made by the General Fund directly or by
transfers from the General Fund to the Debt Service Fund.
Balance
January 1, Balance Due
2011 December 31, Within
as restated) Additions Retired 2011 One Year
Business -type activities
General obligation bonds:
818,544 2003 refunding SMIC bonds,
due in final installment of $59,030,
plus interest at 3.5% on
December 1, 2011 $ 59,030 -
5,150,000 2004 refunding hospital
bonds, due in annual installments of
710,000 to $840,000, plus interest
at 3.0% to 3.5% through April 1,
2013 2,335,000 -
59,030 - -
785,000 1,550,000 840,000
Revenue bonds:
6,000,000 2008 Electric revenue
bonds, due in annual installments of
110,000 to $375,000, plus interest at
4.0% to 6.0% through June 1, 2038 5,815,000 - 100,000 5,715,000 110,000
27,000,000 2008 Series One long
term care facility bonds, due in
annual installments of $710,000 to
1,875,000, plus interest at 4.0% to
5.1 %through April 1, 2033 27,000,000 680,000 26,320,000 710,000
4,500,000 2006 harbor revenue
bonds, due in annual installments of
180,000 to $330,000, plus interest at
4.0% to 6.0% through June 1, 2026 3,910,000 170,000 3,740,000 180,000
3,000,000 2000 harbor revenue bonds,
due in final installment of $140,000,
plus interest at 5.5% on October 1, 2011 140,000 140,000 - -
1,965,000 2007 refunding harbor revenue
bonds, due in annual installments of
155,000 to $235,000, plus interest at
4.0% to 5.0% through June 1, 2021 1,945,000 10 1,935,000 155,000
M
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Long -Term Debt, continued
Balance
January 1, Balance Due
2011 December 31, Within
Business -type activities, continued (as restated) Additions Retired 2011 One Year
Revenue bonds, continued:
2,290,000 2005 refunding electric revenue
bonds, due in annual installments of
235,000 to $275,000, plus interest at
3.75% to 5.0% through June 1, 2015 $ 1,245,000 - 230,000 1,015,000 235,000
1,500,000 2005 harbor revenue bonds,
due in annual installments of $65,000
to $110,000, plus interest at 3.75% to
5.0% through June 1, 2025 1,270,000 - 65,000 1,205,000 65,000
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
901,851 sewer note payable to State of
Alaska Department of Environmental
Conservation, due in annual installments
of $60,584, including interest at 1.5%
through November 5, 2013
2,652,849 water note payable to State of
Alaska Department of Environmental
Conservation, due in annual installments
of $155,061, including interest at 1.5%
through October 1, 2029 ($583,838 plus
interest due in 2012)
61,000 (maximum amount) water note
payable to State of Alaska Department
of Environmental Conservation, plus
interest at 1.5%
Accrued annual leave
Total business -type activities
5,330 -
233,515 -
2,652,849 -
1,332 3,998 1,333
115,023 118,492 58,810
2,652,849 583,838
38,622 - 38,622 - -
177,763 158,135 158,662 177,236 41,206
long -term liabilities $ 46.827.109 158.135 22 55 44,432,575 22 98
Less unamortized deferred loss on refunding (64,508)
Plus unamortized bond premium 532,392
44.900.459
47
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Long -Term Debt, continued
Annual debt service requirements to maturity on the bonds, notes and capital leases, exclusive of
the Alaska Department of Environmental Conservation note not yet in repayment status follow:
General Obligation Bonds
Year Ending Governmental Activities
December 31,Principal Interest Total
2012 153,201 153,201
2013 159,400 159,400
2014 85,000 159,400 244,400
2015 90,000 155,150 245,150
2016 95,000 151,500 246,500
2017 -2021 550,000 683,700 1,233,700
2022 -2026 695,000 539,750 1,234,750
2027 -2031 865,000 367,750 1,232,750
2032 -2036 1,100,000 144,500 1,244,500
Business -type Activities
Principal Interest Total
840,000 38,500 878,500
710,000 12,425 722,425
33 4 2.514.351 5.994.351 1.550.000 50.925 1.600.925
Revenue Bonds
Year Ending Business -type Activities
December 31,Principal Interest Total
2012 1,455,000 1,862,588 3,317,588
2013 1,530,000 1,791,364 3,321,364
2014 1,610,000 1,715,438 3,325,438
2015 1,685,000 1,638,207 3,323,207
2016 1,475,000 1,562,482 3,037,482
2017 -2021 8,405,000 6,788,576 15,193,576
2022 -2026 8,955,000 4,855,726 13,810,726
2027 -2031 8,900,000 2,699,545 11,599,545
2032 -2036 5,185,000 588,613 5,773,613
2037 -2038 730,000 38,850 768,850
39.930.000 23.541.389 63.471.389
c
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Long -Term Debt, continued
Notes Pavable
Year Ending BBusiness -type Activities
December 31, PPrincipal IInterest TTotal
2012 $643,981 334,706 6678,687
2013 1185,050 337,456 2222,506
2014 1127,218 229,195 1156,413
2015 1127,774 227,286 1155,060
2016 1129,691 225,370 1155,061
2017 -2021 6678,224 997,080 7775,304
2022 -2026 7730,641 444,663 7775,304
2027 1152,760 22,292 1155,052
3,073,387
Capital Leases
Year Ending Governmental Activities
December 31, Principal Interest Total
2012 $ 191,219 13,696 204,915
2013 198,177 6,738 204,915
2014 31,321 252 31,573
420,717 20,686 441.403
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, 2011
as follows:
Electric bond reserves
Harbor bond reserves
677,911
709,910
The Electric and Harbor revenue bonds also require that rates be maintained at a level that will
produce net revenues after certain adjustments, equal to 1.3 and 1.2, respectively, times the
amount required each year to pay the principal and interest. The City met these revenue
requirements for both bonds in 2011. The bond coverage calculations are as follows:
Electric Revenue Bonds
Total revenues, excluding grants $ 10,410,908
Total operating expenses, excluding depreciation
and payment in lieu of taxes 8,620,529
Available for debt service $ 1,790.379
49
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, 2011
as follows:
Electric bond reserves
Harbor bond reserves
677,911
709,910
The Electric and Harbor revenue bonds also require that rates be maintained at a level that will
produce net revenues after certain adjustments, equal to 1.3 and 1.2, respectively, times the
amount required each year to pay the principal and interest. The City met these revenue
requirements for both bonds in 2011. The bond coverage calculations are as follows:
Electric Revenue Bonds
Total revenues, excluding grants $ 10,410,908
Total operating expenses, excluding depreciation
and payment in lieu of taxes 8,620,529
Available for debt service $ 1,790.379
49
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Revenue Bond Requirements, continued
Electric Revenue Bonds, continued
Debt service payments:
Principal $ 330,000
Interest 339,298
Total debt service payments $ 669,298
Debt coverage 2.68
Harbor Revenue Bonds
Total revenues, excluding grants $ 3,017,003
Total operating expenses excluding depreciation
and payment in lieu of taxes 1,961,689
Available for debt service $ 1,055,314
Debt service payments:
Principal $ 385,000
Interest 318,459
Total debt service payments $ 703,459
Debt coverage 1.50
8) Capitalized Leases
The City has entered into lease agreements as lessee for financing the acquisition of fire
equipment and public works loaders. These lease agreements qualify as capital leases for
accounting purposes (title transfers at the end of the lease term) 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, 2011:
Internal
Service
Fund
Machinery and equipment
Less accumulated depreciation
Carrying value
947,262
153,642 )
793,620
50
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Capitalized Leases, continued
The following is a schedule of future minimum lease payments under the capital leases and the
present value of the net minimum lease payments at December 31, 2011:
Internal
Year Ending Service
December 31, Fund
2012 204,915
2013 204,915
2014 31,573
Total minimum lease payments 441,403
Less interest portion 2( 0,686
Present value of future minimum
lease payments 420,717
Less current portion ( 191,219 )
Long -term portion $ 229.498
9) Providence Seward Medical and Care Center - Restatement
As discussed in Note 1, the City has implemented the provisions of GASB Statement number
61, The Financial Reporting Entity: Omnibus for the year ended December 31, 2011. In
connection therewith, the City has reevaluated its presentation of the Providence Seward
Medical & Care Center ( PSMCC) and has determined that the PSMCC should be reported as a
fund of the City solely for external financial reporting purposes. Although this classification is
necessary to comply with generally accepted accounting principles, it does not diminish nor
modify any provisions of the contractual relationship between City of Seward and Providence
Health & Services. The City continues to have no involvement in day -to -day operations of
healthcare facilities, and Providence continues to have sole responsibility for the manner in
which it operates the hospital and long -term care facility. Also in connection with this review,
certain errors were noted with respect to account balances in the PSMCC capital assets,
accumulated depreciation, and unamortized bond issuance costs and premium. In addition,
PSMCC reports certain transactions between PSMCC and the City on a modified cash basis.
Each of these items, in addition to the reclassification entries, have been included in the
restatement as noted below:
51
Debt Service Nonmajor General
Governmental Fund Balance Funds Funds Fund Total
Beginning fund balances 1,925,681 857,924 6,750,630 9,534,235
Adjustment from conversion 1,925,681 )558,793 )2,484,474 )
Beginning fund balances, restated 299.131 6,750.630 7,049.761
51
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Providence Seward Medical and Care Center — Restatement, continued
Fund Financial Statements
All Other
Enterprise
Enterprise Funds Net Assets PSMCC (new) Funds Total
Beginning net assets 79,950,090 79,950,090
Adjustment from conversion 3,983,875 3,983,875
Beginning net assets, restated 3,983,875 79,950.090 83,933.965
Nonspendable:
Government -wide Financial Statements
Inventory 10,880 10,880
Prepaid itmes
Discreet
386,526
Total nonspendable
Component
Governmental Business -type Total Unit
Beginning net assets $ 66,105,736 81,527,646 147,633,382 566,000)
Adjustment from conversion (3,230,820 3,983,875 753,055 566,000
Beginning net assets, restated $ 62.874,916 85,511.521 148,386.437
10) Fund Balances
The City has implemented the provisions of GASB Statement number 54, Fund Balance
Reporting and Governmental Fund Type Definitions for the year ended December 31, 2011.
Fund balances, reported for the major funds and the nonmajor funds in the aggregate on the
governmental funds balance sheet is subject to the following constraints:
Committed:
Working capital 1,500,000 - - 1,500,000
Insurance 126,418 - - 126,418
Hospital line of credit 500,000 - - 500,000
Total committed 2,126,418 - - 2,126,418
52
Library /Museum
General Capital Project Nonmajor
Fund Fund Funds Totals
Nonspendable:
Inventory 10,880 10,880
Prepaid itmes 386,526 386,526
Total nonspendable 397,406 397,406
Restricted for library
and museum 3,730,137 -3,730,137
Committed:
Working capital 1,500,000 - - 1,500,000
Insurance 126,418 - - 126,418
Hospital line of credit 500,000 - - 500,000
Total committed 2,126,418 - - 2,126,418
52
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Fund Balances, continued
Assigned:
Park and recreation
Public works
Library
Capital projects
Total assigned
Unassigned:
General Fund
Deficit
Total unassigned
Total fund balances
11) Defined Benefit Pension Plan
The City participates in the Public Employees' Retirement System (PERS). PERS is a cost -
sharing multiple employer plan which covers eligible State and local government employees, other
than teachers. The plan was established and is administered by the State of Alaska Department of
Administration 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
53
Library /Museum
General Capital Project Nonmajor
Fund Fund Funds Totals
2,520 2,520
11,031 11,031
11,438 11,438
254,912 254,912
279,901 279,901
3,510,601 3,510,601
12,880)12,880
3,510,601 12,880)3,497,721
6,034,425 3,730,137 267.021 10,031.583
11) Defined Benefit Pension Plan
The City participates in the Public Employees' Retirement System (PERS). PERS is a cost -
sharing multiple employer plan which covers eligible State and local government employees, other
than teachers. The plan was established and is administered by the State of Alaska Department of
Administration 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
53
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Defined Benefit Pension Plan, continued
Conversion to Cost Sharing
In April 2008, the Alaska Legislature passed Senate Bill (SB) 125 which converted the existing
Public Employees Retirement System (PERS) from an agent - multiple employer plan to a cost -
sharing plan with an effective date of July 1, 2008. Under the cost - sharing arrangement, the
State of Alaska Division of Retirement and Benefits no longer tracks individual employer assets
and liabilities. Rather, all plan costs and past service liabilities are shared among all
participating employers. The cost - sharing plan requires a uniform employer contribution rate of
22% of active member wages, subject to a wage floor. 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 are recognized in these financial statements as an on- behalf revenue and
expenditure /expense.
In addition, in fiscal year 2008, the State of Alaska passed legislation (SB 123) which requires that
the employer contribution be calculated on all PERS eligible wages, including wages attributable
to the defined contribution plan described later in these footnotes.
Fundinggolicy
Regular employees are required to contribute 6.75% of their annual covered salary (3.21% for
pension and 3.54% for healthcare). Police and firefighters are required to contribute 7.5% of
their annual covered salary (3.57% for pension and 3.93% 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 assets to pay both pension and postemployment healthcare benefits when due.
Under current legislation, the employer contribution rate is statutorily capped at 22 %, however,
the State of Alaska contributes any amount over 22% such that the total contribution equals the
Alaska Retirement Management Board adopted rate, generally consistent with the actuarially
determined rate.
The City's contribution rates for 2011 were as follows:
54
Employer Actuarial GASB 43/45
Rate Rate Rate
January to June
Pension 7.85%9.98%13.49%
Postemployment healthcare 14.15 17.98 55.87
Total contribution rate 22.00 27.96 69.36
54
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Defined Benefit Pension Plan, continued
Funding Policy, continued
Year Annual
Employer Actuarial GASB 43/45
of
Rate Rate Rate*
July to December
Contri-TBC
December 31
Pension 10.48%14.65%13.72%
Postemployment healthcare 11.52 16.11 49.98
Total contribution rate 22.00%30.76 63.70
This rate uses a 4.5% OPEB discount rate and disregards all future Medicare Part D
payments.
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 the healthcare cost
trend. 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.
Projected benefits for financial reporting purposes do not incorporate any potential effects of
legal or contractual funding limitations.
Annual Pension and Postemployment Healthcare Cost
The City is required to contribute 22% of covered payroll, subject to a wage floor. In addition,
the State of Alaska contributed approximately 8.76% of covered payroll to the Plan. In
accordance with the provisions of GASB Statement Number 24, the City has recorded the State
on behalf contribution in the amount of $540,734 as revenue and expenditure /expense in these
financial statements. However, because the City is not statutorily obligated for these payments,
this amount is excluded from pension and OPEB cost as described here.
55
Total
Year Annual Annual Benefit City of
Ended Pension OPEB Cost Contri-TBC
December 31 Cost Cost TBC butions Contributed
2011 338,913 610,905 949,818 949,818 100%
2010 336,569 588,328 924,897 924,897 100%
2009 318,262 616,704 934,966 934,966 100%
55
CITY OF SEWARD
Notes to Basic Financial Statements, continued
12) Defined Contribution Pension Plan
The State of Alaska Legislature approved Senate Bill 141 to create the Public Employees'
Retirement System (PERS) Tier IV for employees hired after July 1, 2006 or for employees
converting from the PERS Tier I, II or III defined benefit plans. The plan is administered by the
State of Alaska, Department of Administration, and 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:
Others Police /Fire
Tier TV Tier TV
Individual account 5.00%5.00%
Health reimbursement arrangement (HRA) *3.00 3.00
Retiree medical plan 0.51 0.51
Occupational death and disability benefits 0.11 0.97
8.62 9.48
Health Reimbursement Arrangement — AS 39.30.370 requires that the employer contribute "an
amount equal to three percent of the average employer's average annual employee compensation."
For actual remittance, this amount is calculated as a flat rate for each full time or part-time
employee per pay period.
Employees are immediately vested in their own contributions and vest 25% per year in employer
contributions. The City and employee contributions to PERS including the HRA contribution for
the year ended December 31, 2011 were $128,785 and $104,416, respectively.
13) 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 $10.77 per compensable hour per the terms of a negotiated agreement
expiring December 31, 2011. The City's contribution rate for permanent employees is $800 per
employee per month per the terms of a negotiated agreement expiring June 30, 2013. The total
City contribution for the year ended December 31, 2011 was $65,956. Employees are not
required to contribute.
56
CITY OF SEWARD
Notes to Basic Financial Statements, continued
14) 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.
15) 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.
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, 2011.
The JIA provides loss control services and conducts periodic inspections to ensure safe
operations. The City has utilized an established safety committee to revie.1 and .ecv..— . .0
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.
57
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Risk Management, continued
There was no significant reduction in the City's major categories of risk insurance coverage
from the prior year, and the amount of settlements for the past three fiscal years did not
materially exceed the City's insurance coverage.
16) 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.
The City of Seward is the owner of the Alaska Sealife Center ( "Center "), which is operated on
the City's behalf by the Seward Association for the Advancement of Marine Science
SAAMS "). The City is obligated to abide by provisions of the Cooperative Agreement
Agreement ") between the City and the State of Alaska Department of Fish and Game, which
served as a significant funding source for the construction of the Center. The City has passed
most of its obligations for operating the Center on to SAAMS through a management and
operating agreement ( "Operating Agreement "), but the City ultimately remains responsible to
ensure that provisions of the Agreement with the State are met. The Operating Agreement
requires, in part, that SAAMS maintain sufficient termination fund reserves to enable the City
to operate the facility for up to one full year in the event SAAMS is unable to meet its
obligations under the Operating Agreement. The estimated costs of operating the Center for a
full year are not easily measured based on imprecise definitions of the requirements, but could
approach $3 million per year. The Operating Agreement does not require SAAMS to maintain
that level of reserves, and to the extent their termination fund reserve levels are inadequate, the
City would be expected to cover any shortfall. The City does not currently have adequate
reserves in its General Fund to cover this potential shortfall.
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.
17) Fund Deficits
The following funds had a deficit in fund balance at December 31, 2011. The deficits will be
eliminated in the future with transfers from other funds.
Flood Mitigation Capital Project Fund $ 10,019
Fire Department Equipment Capital Project Fund 478
Fish Ditch Restoration Special Revenue Fund 2,383
58
CITY OF SEWARD
Notes to Basic Financial Statements, continued
18) New Accounting Pronouncements
The Governmental Accounting Standards Board has issued several new accounting standards
with upcoming implementation dates covering several topics as follows:
GASB 60 — Service Concession Arrangements — Effective for year -end December 31,
2012 — This statement provides guidance on proper accounting for service concession
arrangements, a type of public private partnership associated with the operation of a
public facility.
GASB 63 — Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of
Resources, and Net Position — Effective for year -end December 31, 2012 — This statement
will result in a change to the City's presentation of proprietary fund statements and
government -wide statements from a traditional "balance sheet format" to a new
statement of net position format" which will segregate deferred inflows and deferred
outflows from assets and liabilities respectively.
GASB 64 — Derivative Instruments: Application of Hedge Accounting Termination
Provisions — Effective for year -end December 31, 2012 — This statement provides
guidance on proper accounting for Hedge Terminations and clarifies when a termination
has occurred.
GASB 65 — Items Previously Reported as Assets and Liabilities — Effective for year -end
December 31, 2013 — This statement is a companion to GASB statement 63 and
establishes accounts to be reclassified as deferred inflows and outflows. In addition,
certain items previously reported as assets or liabilities will be moved to the income
statement. For example, debt issuance costs will no longer be capitalized and amortized
but will be expensed as incurred, and certain regulatory assets and liabilities will be
reclassified to deferred inflows and outflows.
GASB 66 — Technical Corrections — 2012 — Effective for year -end December 31, 2013 —
This statement contains certain technical corrections to prior GASB statements on the
topics of Risk Financing, Operating Leases, Loan Purchases, and Servicing Fees.
59
SUPPLEMENTARY INFORMATION
1
Exhibit E -1
CITY OF SEWARD
Nonmajor Governmental Funds
Combining Balance Sheet
December 31, 2011
Special Capital
Assets Revenue Projects Total
Cash and investments $ 14,308 254,912 269,220
Grants receivable 585,495 59,044 644,539
Other receivables 147,131 - 147,131
Total assets $ 746,934 313,956 1,060,890
Liabilities and Fund Balances
Liabilities:
Accounts payable
Deferred revenue
Due to other funds
Total liabilities
Fund balances:
Assigned:
Parks and recreation
Public works
Library
Capital projects
Unassigned (deficits)
Total fund balances
Total liabilities and fund balances
85,465 12,005 97,470
7,750 7,750
631,113 57,536 688,649
724,328 69,541 793,869
2,520 2,520
11,031 11,031
11,438 11,438
254,912 254,912
2,383 10,497 12,880
22,606 244,415 267,021
746,934 313,956 1,060,890
61
Exhibit E -2
CITY OF SEWARD
Nonmaj or Governmental Funds
Combining Statement of Revenues, Expenditures
and Change in Fund Balances
Year Ended December 31, 2011
Revenues:
Intergovernmental
Local grants
Insurance recovery
Total revenues
Expenditures:
General government
Public safety
Public works
Parks and recreation
Total expenditures
Excess of revenues over (under)
expenditures
Other financing sources - transfers in
Net change in fund balances
Beginning fund balances
Ending fund balances
Special Capital
40,842
Revenue Projects Total
1,054,506 1,589,687 2,644,193
22,682 15,000 37,682
8,000 8,000
1,077,188 1,612,687 2,689,875
408,394 21,269 429,663
1,579,726 1,579,726
439,525 439,525
321,866 321,866
1,169,785 1,600,995 2,770,780
92,597) 11,692 (80,905)
39,834 1,008 40,842
52,763)12,700 40,063)
75,369 231,715 307,084
22,606 244,415 267,021
Exhibit F -1
CITY OF SEWARD
Nonmajor Enterprise Funds
Combining Statement of Net Assets
December 31, 2011
Current assets:
Cash and investments
Receivables:
Accounts
Other
Less allowance for doubtful accounts
Total current assets
Noncurrent assets:
Restricted cash and investments
Property, plant and equipment, net of
accumulated depreciation
Total noncurrent assets
Total assets
Liabilities and Net Assets
Current liabilities:
Accounts payable
Accrued payroll and related liabilities
Accrued interest
Current portion:
Accrued annual leave
Notes payable
Total current liabilities
Noncurrent liabilities, net of current portion:
Accrued annual leave
Notes payable
Total noncurrent liabilities
Total liabilities
Net assets:
Invested in capital assets, net of related debt
Unrestricted
Total net assets
Total liabilities and net assets
Wastewater Parking Total
580,247 408,843 989,090
77,425 77,425
20,000 20,000
3,484 3,484
674,188 408,843 1,083,031
112,115 - 112,115
5,009,592 149,465 5,159,057
5,121,707 149,465 5,271,172
5,795,895 558,308 6,354,203
23,559 9,331 32,890
4,698 4,698
291 291
4,555 4,555
60,143 60,143
93,246 9,331 102,577
16,201 16,201
62,347 62,347
78,548 78,548
171,794 9,331 181,125
4,887,102 149,465 5,036,567
736,999 399,512 1,136,511
5,624,101 548,977 6,173,078
5,795,895 558,308 6,354,203
63
Exhibit F -2
CITY OF SEWARD
Nonmajor Enterprise Funds
Combining Statement of Revenues, Expenses and Change in Net Assets
Year Ended December 31, 2011
Wastewater Parking Total
Operating revenues - charges for services $ 864,740 268,105 1,132,845
Operating expenses:
Salaries and benefits
Services and supplies
Administration
Depreciation
Total operating expenses
Earnings (loss) from operations
Nonoperating revenues (expenses):
Intergovernmental - PERS on- behalf
Investment income
Interest expense
Net nonoperating revenues (expenses)
Earnings (loss) before contributions and transfers
Capital contributions
Transfers out
278,509 106,824 385,333
314,340 41,621 355,961
144,120 39,612 183,732
296,693 16,756 313,449
1,033,662 204,813 1,238,475
168,922)63,292 105,630)
17,285 614 17,899
7,541 3,532 11,073
10,809 10,809
14,017 4,146 18,163
154,905)67,438 87,467)
250,200 250,200
75,380 21,448 96,828
Change in net assets
Beginning net assets
Ending net assets
19,915 45,990 65,905
5,604,186 502,987 6,107,173
5,624,101 548,977 6,173,078
1
Exhibit F -3
CITY OF SEWARD
Nonmajor Enterprise Funds
Combining Statement of Cash Flows
Year Ended December 31, 2011
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
Capital contributions received
Acquisition of property, plant and equipment
Net cash flows from capital and
related financing activities
Cash flows from investing activities -
investment income received
Wastewater Parking Total
861,498 268,105 1,129,603
299,687)32,385)332,072)
263,071)106,210)369,281)
144,120 39,612 183,732
154,620 89,898 244,518
75,380 (21,448 (96,828
116,355)116,355)
14,450)14,450)
250,200 250,200
21,935 50,477 (72,412
97,460 (50,477 46,983
7,541 3,532 11,073
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
184,241 21,505 205,746
508,121 387,338 895,459
692,362 408,843 1,101,205
580,247 408,843 989,090
112,115 - 112,115
692,362 408,843 1,101,205
65
Exhibit F -3, continued
CITY OF SEWARD
Nonmajor Enterprise 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
Noncash expense - PERS on- behalf
Increase in allowance for doubtful accounts
Increase) in assets - accounts receivable
Increase (decrease) in liabilities:
Accounts payable
Accrued payroll and related liabilities
Accrued annual leave
Net cash flows from operating activities
Wastewater Parkin Total
168,922) 63,292 (105,630)
296,693 16,756 313,449
17,285 614 17,899
153 153
3,395)3,395)
14,653 9,236 23,889
3,138)3,138)
1,291 1,291
154,620 89,898 244,518
Exhibit G -1
CITY OF SEWARD
Internal Service Funds
Combining Statement of Net Assets
December 31, 2011
Compensated
Motor Annual
Assets Pool Leave Total
Current assets:
Cash and investments
Receivables:
Accrued interest
Interfund loans
Prepaid expenses
Total current assets
Noncurrent assets:
Interfund loans, net of current portion
Property, plant and equipment, net of
accumulated depreciation
Total noncurrent assets
Total assets
886,780 425,643 1,312,423
59,684 59,684
68,113 68,113
7,895 7,895
1,022,472 425,643 1,448,115
1,062,786 - 1,062,786
2,569,539 - 2,569,539
3,632,325 - 3,632,325
4,654,797 425,643 5,080,440
Liabilities and Net Assets
Current liabilities:
Accrued interest
Current portion:
Accrued annual leave
Capital lease obligations
Total current liabilities
Noncurrent liabilities, net of current portion:
Accrued annual leave
Capital lease obligations
Total liabilities
Net assets:
Invested in capital assets, net of related debt
Unrestricted
Total net assets
Total liabilities and net assets
4,977 - 4,977
112,489 112,489
191,219 - 191,219
196,196 112,489 308,685
313,154 313,154
229,498 - 229,498
425,694 425,643 851,337
2,148,822 2,148,822
2,080,281 2,080,281
4,229,103 4,229,103
4,654,797 425,643 5,080,440
67
Exhibit G -2
CITY OF SEWARD
Internal Service Funds
Combining Statement of Revenues, Expenses and Change in Net Assets
Year Ended December 31, 2011
Compensated
Motor Annual
Pool Leave Total
Operating revenues -
vehicle rental and interfund charges
Operating expenses:
Salaries and benefits
Supplies and maintenance
Depreciation
Total operating expenses
Earnings (loss) from operations
Nonoperating revenues (expenses):
Gain on disposal of capital assets
Investment income
Interest expense
Net nonoperating revenues (expenses)
Change in net assets
Beginning net assets
Ending net assets
459,682 380,846 840,528
380,846 380,846
7,584 -7,584
460,842 -460,842
468,426 380,846 849,272
8,744) -8,744)
5,832 5,832
65,504 65,504
18,088 18,088
53,248 53,248
44,504 44,504
4,184,599 4,184,599
4,229,103 4,229,103
CITY OF SEWARD
Internal Service Funds
Combining Statement of Cash Flows
Year Ended December 31, 2011
Exhibit G -3
Compensated
Motor Annual
Pool Leave Total
Cash flows from operating activities:
Receipts from vehicle rentals and interfund charges
Payments to suppliers
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
Acquisition of equipment and vehicles
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
459,682 380,846 840,528
15,479)15,479)
412,391 412,391
444,203 31,545 412,658
184,507)184,507)
20,411)20,411)
167,280)167,280)
5,832 5,832
366,366 366,366
64,666 64,666
68,952 68,952
133,618 133,618
211,455 31,545)179,910
675,325 457,188 1,132,513
Ending cash and investments
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
Increase in assets - prepaid expenses
Decrease in liabilities - accrued annual leave
Net cash flows from operating activities
886,780 425,643 1,312,423
8,744) - (8,744)
460,842 - 460,842
7,895) - (7,895)
31,545 (31,545
444,203 (31,545 412,658
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.
70
Exhibit H -1
CITY OF SEWARD
General Fund
Balance Sheet
December 31, 2011
With Comparative Amounts for 2010)
2011 2010
Cash and investments 6,729,580 6,799,913
Receivables:
Taxes:
Personal property 12,450 12,333
Less allowance for doubtful accounts 425 371
Net personal property 12,025 11,962
Motor vehicle 5,863 4,037
Hotel /motel room 12,377 12,441
Real property 20,532 15,760
Sales 553,492 441,256
Net taxes 604,289 485,456
Accounts 68,614 86,753
Less allowance for doubtful accounts 2,335
Net accounts 68,614 84,418
Grants and shared revenues 26,160 2,190
Accrued interest 15,571 41,616
Note receivable - PSMC 180,822
Total receivables 714,634 794,502
Prepaid items 386,526 395,196
Inventory 10,880 8,930
Due from other funds 709,598 1,158,083
Restricted cash and investments - bond reserve 1,973,360 1,973,360
Total assets 10,524,578 11,129,984
71
Exhibit H -1, continued
CITY OF SEWARD
General Fund
Balance Sheet, continued
2011
Liabilities and Fund Balance
Liabilities:
2010
Accounts payable 503,203 417,546
Accrued payroll and related liabilities 111,798 157,827
Accrued liabilities 169,865 85,736
Funds held in trust 54,659 24,064
Deferred revenue 230,229 211,257
Accrued interest 72,180 75,299
Interfund loans payable 3,348,219 3,407,625
Total liabilities 4,490,153 4,379,354
Fund balance:
Nonspendable:
Inventory 10,880 8,930
Prepaid items 386,526 395,196
Note receivable - PSMC 180,822
Committed:
Working capital 1,500,000 1,500,000
Insurance 126,418 126,418
Hospital line of credit 500,000 500,000
Unassigned 3,510,601 4,039,264
Total fund balance 6,034,425 6,750,630
Total liabilities and fund balance 10,524,578 11,129,984
72
Exhibit H -2
CITY OF SEWARD
General Fund
Schedule of Revenues, Expenditures and
Change in Fund Balance - Budget and Actual
Year Ended December 31, 2011
With Comparative Amounts for 20 10)
Licenses and permits:
Building permits 50,000
2011
1,429)
2010
Taxi permits 1,400 1,285
Variance
835
Department of Motor Vehicles commissions 95,760 89,143
Positive
86,727
Animal control licenses
Budget Actual Negative Actual
Revenues:
21,700 16,500 5,200)17,310
Taxes:
4,300 4,285 15)5,759
Sales 4,026,336 4,147,010 120,674 3,742,751
Property 1,014,913 1,001,020 13,893)954,687
Hotel /motel room 308,652 334,824 26,172 328,396
Payments in lieu of taxes 84,000 78,574 5,426)75,317
Penalty and interest 1,500 1,821 321 1,003
Total taxes 5,435,401 5,563,249 127,848 5,102,154
Licenses and permits:
Building permits 50,000 48,571 1,429)37,542
Taxi permits 1,400 1,285 115)835
Department of Motor Vehicles commissions 95,760 89,143 6,617)86,727
Animal control licenses 750 312 438)775
Business licenses 21,700 16,500 5,200)17,310
Miscellaneous 4,300 4,285 15)5,759
Total licenses and permits 173,910 160,096 13,814 148,948
Intergovernmental:
Jail contract 450,000 491,341 41,341 449,472
Dispatch contracts 96,500 98,660 2,160 98,180
Raw fish tax 644,451 599,451 45,000)298,316
Shared fisheries and landing tax 5,000 5,310 310 3,946
Liquor tax 20,000 20,950 950 15,400
Library grants 281,827 18,040 263,787)6,300
Revenue sharing 412,846 306,509 106,337)226,846
PERS relief 414,535 414,535 209,145
Other grants 4,500 33,050 28,550 104,046
Total intergovernmental 2,329,659 1,987,846 341,813 1,411,651
73
Exhibit H -2. continued
CITY OF SEWARD
General Fund
Schedule of Revenues, Expenditures and Change in Fund Balance -
Budget and Actual, continued
2011 2010
Budget Actual
Revenues, continued:
Charges for services:
Administrative
Rents and leases
Copying charges
Work orders
Recreation
Library
Total charges for services
Fines and bails
Investment income
Exxon Valdez settlement
Other:
Sale of land, equipment and gravel
Refuse contract
Other
Total other
Total revenues
Expenditures:
General government:
Mayor and council:
Salaries
Employee benefits
Audit
Legal
Purchased services
Supplies and maintenance
Legislative representation
General and administrative
Total mayor and council
1,823,889 1,864,606
124,478 139,681
15,300 8,927
3,000 1,838
610,500 620,943
14,500 9,953
2,591,667 2,645,948
Variance
Positive
Negative ) Actual
40,717 2,070,637
15,203 144,552
6,373)13,688
1,162)2,278
10,443 608,361
4,547 13,794
54,281 2,853,310
17,000 12,177 (4,823) 10,210
196,000 25,744 (170,256 122,710
347,281
8,250 16,034 7,784 119,517
15,120 23,038 7,918 46,401
19,450 20,117 667 19,191
42,820 59,189 16,369 185,109
10,786,457 10,454,249 (332,208 10,181,373
36,588 49,517 12,929)43,115
14,195 19,119 4,924)6,758
63,930 66,705 2,775)65,873
97,175 97,175)142,082
5,150 5,147 3 2,386
18,000 8,156 9,844 14,056
157,850 164,593 6,743)143,677
229,584 151,756 77,828 74,611
525,297 562,168 36,871 492,558
74
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 143,031
2011
25,395
2010
Employee benefits 89,893 88,748
Variance
84,835
Purchased services 12,500 7,395
Positive
10,347
General and administrative
Budget Actual Negative Actual
Expenditures, continued:
264,474 229,344 35,130 244,628
General government, continued:
Management information systems:
City manager:
Salaries 139,307 122,774 16,533
Salaries 189,721 227,729 38,008)181,698
Employee benefits 98,027 129,306 31,279)100,595
Purchased services 16,950 27,486 10,536)7,961
Supplies and maintenance 15,200 18,725 3,525)10,908
General and administrative 44,008 50,941 6,933 54,438
Total city manager 363,906 454,187 90,281 355,600
City clerk:
Salaries 143,031 117,636 25,395 133,293
Employee benefits 89,893 88,748 1,145 84,835
Purchased services 12,500 7,395 5,105 10,347
General and administrative 19,050 15,565 3,485 16,153
Total city clerk 264,474 229,344 35,130 244,628
Management information systems:
Salaries 139,307 122,774 16,533 127,766
Employee benefits 72,032 76,137 4,105)68,309
Purchased services 11,400 2,284 9,116 3,125
Supplies and maintenance 32,000 35,974 3,974)41,882
General and administrative 13,000 12,378 622 8,184
Total management information
systems 267,739 249,547 18,192 249,266
Finance:
Salaries 383,297 357,602 25,695 338,330
Employee benefits 220,085 218,819 1,266 200,312
Purchased services 25,500 11,775 13,725 33,587
Supplies and maintenance 53,500 60,945 7,445)54,152
General and administrative 15,350 18,482 3,132)19,106
Capital outlay 8,000 8,000
Total finance 705,732 667,623 38,109 645,487
75
Exhibit H -2, continued
CITY OF SEWARD
General Fund
Schedule of Revenues, Expenditures and Change in Fund Balance -
Budget and Actual, continued
2011 2010
Budget Actual
Expenditures, continued:
General government, continued:
Community development:
Salaries
Employee benefits
Purchased services
Supplies and maintenance
General and administrative
Capital outlay
Total community development
General services:
Salaries
Purchased services
Supplies and maintenance
General and administrative
Total general services
Contributions to organizations:
Senior Citizens
Museum
Chamber of Commerce
Other
Total contributions to organizations
Total general government
Public safety:
Police:
Salaries
Employee benefits
Purchased services
Supplies and maintenance
211,096 92,791
115,529 54,461
66,000 69,697
11,700 8,072
6,850 8,493
4,493
411,175 238,007
Variance
Positive
Negative ) Actual
118,305 135,363
61,068 87,702
3,697)62,310
3,628 6,972
1,643) 8,194
4,493 -
173,168 300,541
2,000 2,000
12,500 7,838 4,662 6,834
23,850 26,980 3,130)20,751
123,100 111,900 11,200 63,629
161,450 146,718 14,732 91,214
50,000 50,000 50,000
5,000 5,000 5,000
151,000 151,000 181,002
3,000 3,000 3,000
209,000 209,000 239,002
2,908,773 2,756,594 152,179 2,618,296
1,003,112 946,913 56,199 938,949
611,402 626,061 14,659)572,266
90,676 60,327 30,349 61,343
54,730 71,422 16,692)57,594
76
Exhibit H -2, continued
CITY OF SEWARD
General Fund
Schedule of Revenues, Expenditures and Change in Fund Balance -
Budget and Actual, continued
Jail:
Salaries 272,113
2011
10,093
2010
Employee benefits 184,945 191,091
Variance
173,957
Purchased services 53,300 42,316
Positive
48,617
Supplies and maintenance
Budget Actual Negative Actual
Expenditures, continued:
105,107 104,199 908 97,983
Public safety, continued:
626,965 608,485 18,480 587,094
Police, continued:
Animal control:
General and administrative 68,570 49,622 18,948 55,843
Capital outlay 30,000 26,160 3,840
Total police 1,858,490 1,780,505 77,985 1,685,995
Jail:
Salaries 272,113 262,020 10,093 257,026
Employee benefits 184,945 191,091 6,146)173,957
Purchased services 53,300 42,316 10,984 48,617
Supplies and maintenance 11,500 8,859 2,641 9,511
General and administrative 105,107 104,199 908 97,983
Total jail 626,965 608,485 18,480 587,094
Animal control:
Purchased services 134,842 73,248 61,594 78,160
Supplies and maintenance 3,000 283 2,717 80
Total animal control 137,842 73,531 64,311 78,240
Fire:
Salaries 174,957 163,110 11,847 162,186
Employee benefits 107,553 114,825 7,272)108,949
Purchased services 235,277 214,848 20,429 208,393
Supplies and maintenance 63,500 44,010 19,490 30,153
General and administrative 21,280 13,123 8,157 10,319
Total fire 602,567 549,916 52,651 520,000
Volunteer training:
Employee benefits 6,700 5,000 1,700 5,000
Purchased services 6,200 3,891 2,309 4,788
Supplies and maintenance 17,915 28,264 10,349)16,417
General and administrative 27,750 21,306 6,444 25,556
Total volunteer training 58,565 58,461 104 51,761
77
Exhibit H -2, continued
CITY OF SEWARD
General Fund
Schedule of Revenues, Expenditures and Change in Fund Balance -
Budget and Actual, continued
Expenditures, continued:
Public safety, continued:
Emergency preparedness:
Purchased services
Supplies and maintenance
General and administrative
Total emergency preparedness
Building inspector:
Salaries
Employee benefits
Purchased services
Supplies and maintenance
General and administrative
Total building inspector
Total public safety
Public works:
Roads and streets:
Salaries
Employee benefits
Purchased services
Supplies and maintenance
General and administrative
Capital outlay
Total roads and streets
2011 2010
Variance
Positive
Budget Actual (Negative Actual
1,150 1,540 390)852
2,250 862 1,388 502
8,009 848 7,161 407
11,409 3,250 8,159 1,761
801,542 58,477
68,364 61,041 7,323 59,978
39,717 39,624 93 32,807
5,500 3,415 2,085 5,162
5,000 2,561 2,439 4,551
8,242 7,060 1,182 3,316
126,823 113,701 13,122 105,814
3,422,661 3,187,849 234,812 3,030,665
234,077 217,104 16,973
133,387 137,377 3,990)
244,605 258,247 13,642)
238,100 186,608 51,492
9,850 2,206 7,644
860,019 801,542 58,477
78
232,950
124,517
358,609
172,512
3,697
5,000
897,285
Exhibit H -2, continued
CITY OF SEWARD
General Fund
Schedule of Revenues, Expenditures and Change in Fund Balance -
Budget and Actual, continued
Parks and recreation:
Salaries 584,067
2011
4,231
2010
Employee benefits 276,739 286,239
Variance
275,568
Purchased services 212,100 217,275
Positive
211,613
Supplies and maintenance
Budget Actual Negative Actual
Expenditures, continued:
37,780 39,320 1,540)23,610
Public works, continued:
5,000 12,381 7,381 28,160
City shop:
1,222,791 1,241,495 18,704 )1,219,182
Salaries 146,707 147,151 444)175,218
Employee benefits 90,941 113,309 22,368)130,463
Purchased services 75,700 64,280 11,420 64,142
Supplies and maintenance 61,750 39,163 22,587 53,488
General and administrative 15,250 11,667 3,583 14,866
Capital outlay 20,485
Total city shop 390,348 375,570 14,778 458,662
Municipal building:
Salaries 81,535 76,630 4,905 73,363
Employee benefits 64,184 64,330 146)60,058
Purchased services 106,900 102,782 4,118 103,518
Supplies and maintenance 42,750 21,174 21,576 16,231
General and administrative 1,100 1,744 644)620
Total municipal building 296,469 266,660 29,809 253,790
Total public works 1,546,836 1,443,772 103,064 1,609,737
Parks and recreation:
Salaries 584,067 579,836 4,231 586,368
Employee benefits 276,739 286,239 9,500)275,568
Purchased services 212,100 217,275 5,175)211,613
Supplies and maintenance 107,105 106,444 661 93,863
General and administrative 37,780 39,320 1,540)23,610
Capital outlay 5,000 12,381 7,381 28,160
Total parks and recreation 1,222,791 1,241,495 18,704 )1,219,182
Library:
Salaries 184,605 170,130 14,475 171,546
Employee benefits 118,718 126,498 7,780)111,524
Purchased services 43,700 40,224 3,476 37,817
Supplies and maintenance 44,000 37,111 6,889 45,681
General and administrative 24,600 27,639 3,039 22,739
Total library 415,623 401,602 14,021 389,307
79
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 expenditures
Other financing sources (uses):
Transfers in
Transfers out
Net other financing sources (uses)
Net change in fund balance
Beginning fund balance 6,750,630 5,766,871
Ending fund balance $ 6,034,425 6,750,630
2011 2010
Variance
Positive
Budget Actual Negative Actual
270,667 100,477 170,190 103,386
775,344 631,278 144,066 529,778
83,050 75,547 7,503 81,929
1,129,061 807,302 321,759 715,093
10,645,745 9,838,614 807,131 9,582,280
140,712 615,635 474,923 599,093
1,986,237 1,938,448 47,789)1,765,586
3,320,289 3,270,288 50,001 1,380,920
1,334,052 1,331,840)2,212 384,666
1,193,340)716,205)477,135 983,759
Beginning fund balance 6,750,630 5,766,871
Ending fund balance $ 6,034,425 6,750,630
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.
Seward Cemetery Community Access — To provide online public access to Seward
Cemetery information, including identifying where individuals are interred.
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.
Miscellaneous Pass - Through Grants — To account for grants that are passed through to
other agencies.
Computer Network — The City of Seward is converting its telephone and internet service
for all departments — to include the hospital and long -term care facilities which are
owned by the City — to Voice - over - Internet - Protocol in order to achieve communication
cost efficiencies. The project cost includes purchasing all VOID equipment, including
telephones, cables, software, servers and other peripherals, as well as installation and
service costs.
Cruise Ship Transportation Grant — To account for a transportation grant to assist cruise
ship passengers.
Natural Disasters — To account for the costs associated with flooding and other natural
events.
Fish Ditch Restoration — The purpose of this fund is to account for grant proceeds
used to restore a failed fish passage /drainage system. The project will involve the
removal and disposal of failed culverts, and the design and construction of an open
drainage fish ditch passage. The new passage will consist of excavation and placing
of rip -rap for bank stabilization, landscaping of upland vehicle turnarounds, and
signage.
Library — This Fund includes the Alaska Statehood grant project, which celebrates
Seward as the Home of Alaska's Flag. A Statehood symposium hosts historic
presentations on the Alaskan Statehood experience, a one -act play centers on Alaska's
flag, and the Seward Mural Society designs and completes a mural interpreting Alaska's
flag and its unique history. In addition, this Fund contains a grant to provide public
access to Seward's historical photographic records for properties on the Seward Register
of Historic Places, and other historic sites. A website is designed to provide easy public
access to this information.
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84
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.
Water Front Pavilion — To account for the design and construction costs of a new water
front pavilion.
Fire Department Equipment - To account for the costs of purchasing a fire department
breathing air compressor to refill fire air packs.
Police Equipment — To account for the grant activity related to purchasing police radios.
Flood Mitigation — To account for all activities related to the construction of the Japanese
Creek levee project.
Fourth and Adams — To account for the costs of building a town square park to include a
public restroom facility, bus pullout, covered waiting area, and green space, servicing to
revitalize the downtown area.
Capital Acquisition — To account for purchase of equipment not financed by the Motor
Pool Fund and capital improvements and projects of at least $20,000.
85
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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 — To account for the provision of public parking services.
Providence Seward Medical and Care Center (PSMCC) — To account for the provision of
services provided by the hospital and long -term care facilities.
Exhibit K -1
CITY OF SEWARD
Electric Enterprise Fund
Statement of Net Assets
December 31, 2011
With Comparative Amounts for 20 10)
Assets 2011 2010
Current assets:
Cash and investments $ 639,624 -
Receivables:
Accounts 925,064 870,658
Assessments 1,720 1,531
Interfund loan 16,769 15,933
Other 70,930 166,212
Less allowance for doubtful accounts 41,628 39,180
Net receivables 972,855 1,015,154
Net property, plant and equipment in service
Inventory 864,014 1,039,345
Total current assets 2,476,493 2,054,499
24,730,978
Restricted cash and investments:
Deferred charges - unamortized debt issuance costs 111,156
Bond retirement 677,911 677,911
Capital projects 1,032,695 1,035,073
Total restricted cash and investments 1,710,606 1,712,984
Assessments receivable, net of current portion 9,450 10,448
Interfund loan, net of current portion 351,973 368,742
Property, plant and equipment:
Land and land rights 230,951 230,951
Buildings 9,425,786 281,474
Improvements other than buildings 38,938,470 38,753,731
Equipment 7,403,999 7,537,344
Total property, plant and equipment in service 55,999,206 46,803,500
Less accumulated depreciation 31,937,234 30,641,869
Net property, plant and equipment in service 24,061,972 16,161,631
Construction in progress 669,006 9,775,536
Total property, plant and equipment 24,730,978 25,937,167
Deferred charges - unamortized debt issuance costs 111,156 119,581
Total assets 29,390,656 30,203,421
HE
Exhibit K -1, continued
CITY OF SEWARD
Electric Enterprise Fund
Statement of Net Assets, continued
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accounts payable
Due to other funds
Accrued payroll and related liabilities
Accrued interest
Current portion:
Accrued annual leave
Bonds payable
Customer deposits
Deferred revenue
Total current liabilities
Noncurrent liabilities, net of current portion:
Accrued annual leave
Bonds payable
Unamortized bond premium
Total noncurrent liabilities
Total liabilities
Net assets:
Invested in capital assets, net of related debt
Restricted for bond retirement
Unrestricted
Total net assets
Total liabilities and net assets
2011 2010
475,904 33,399
233,894
32,569 34,755
27,666 28,884
17,576 19,767
345,000 330,000
163,771 167,074
48,726 4,857
1,111,212 852,630
64,568 72,492
6,385,000 6,730,000
58,516 66,882
6,508,084 6,869,374
7,619,296 7,722,004
17, 942,462 18, 810,285
677,911 677,911
3,150,987 2,993,221
21,771,360 22,481,417
29,390,656 30,203,421
91
Exhibit K -2
CITY OF SEWARD
Electric Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2011
With Comparative Amounts for 20 10)
2011 2010
Operating revenues:
Residential
Small general service
Large general service
Industrial
Harbor power
Street and yard lights
Miscellaneous
Total operating revenues
Operating expenses:
Power
Distribution
Administration and general
Depreciation
Total operating expenses
Earnings from operations
Nonoperating revenues (expenses):
Intergovernmental - PERS on- behalf
Investment income
Interest expense
Gain on disposal 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
Ending net assets
3,122,897 2,727,990
1,723,846 1,460,843
3,797,012 3,330,873
1,280,676 952,255
240,015 186,304
68,437 66,413
76,641 117,472
10,309,524 8,842,150
5,651,255 4,537,179
344,174 17,152)
2,625,100 2,334,870
1,486,392 1,438,032
10,106,921 8,292,929
202,603 549,221
27,850 13,482
101,384 56,187
338,139)323,864)
5,000
40,321 40,624
249,226 289,819
46,623) 259,402
116,551 252,413
392,846 -
1,172,831 (1,041,742
710,057) (529,927)
22,481,417 23,011,344
21,771,360 22,481,417
Of the total depreciation expense of $1,486,392 above, $879,795 was attributable to capital assets that
were funded with capital contributions.)
92
Exhibit K -3
CITY OF SEWARD
Electric Enterprise Fund
Statement of Cash Flows
Year Ended December 31, 2011
With Comparative Amounts for 20 10)
2011 2010
Cash flows from operating activities:
Receipts from customers and users 10,393,414 8,511,609
Payments to suppliers 5,992,792)5,854,517)
Payments to employees 1,178,557)1,023,148)
Payments for interfund services used 847,691 815,283
Net cash flows from operating activities 2,374,374 818,661
Cash flows from noncapital financing activities - transfers out 1,172,831)1,041,742
Cash flows from capital and related financing activities:
Proceeds from disposal of capital assets 5,000
Principal payments on long -term debt 330,000)315,000)
Interest payments on long -term debt 347,724)333,392)
Acquisition of property, plant and equipment 280,202)4,522,683)
Received on note receivable 10,000
Capital contributions received 117,360 260,457
Increase (decrease) in due to other funds 233,894)233,894
Transfers in 392,846
Net cash flows from capital and related financing activities 681,614 4,661,724
Cash flows from investing activities:
Investment income received 101,384 56,187
Interfund loan receipts 15,933 15,139
Net cash flows from investing activities 117,317 71,326
Net increase (decrease) in cash and investments 637,246 4,813,479)
Beginning cash and investments 1,712,984 6,526,463
Ending cash and investments 2,350,230 1,712,984
Reconciliation of cash and investments to statement of net assets:
Current assets 639,624
Restricted assets 1,710,606 1,712,984
2,350,230 1,712,984
Reconciliation of earnings from operations to net cash
provided (used) by operating activities:
Earnings from operations 202,603 549,221
Adjustments to reconcile earnings from operations to net
cash flows from operating activities:
Depreciation 1,486,392 1,438,032
Amortization of debt issuance costs 8,425 8,425
Other nonoperating expenses 40,321)40,624)
Noncash expense - PERS on- behalf 27,850 13,482
Increase (decrease) in allowance for doubtful accounts 2,448 34,678)
Increase) decrease in assets:
Receivables 40,876 273,776)
Inventory 175,331 141,018)
Increase (decrease) in liabilities:
Accounts payable 442,505 703,393)
Accrued payroll and related liabilities 2,186)2,317
Accrued annual leave 10,115)22,760
Customer deposits 3,303)6,857)
Deferred revenue 43,869 15,230
Net cash flows from operating activities 2,374,374 818,661
93
Exhibit K -4
CITY OF SEWARD
Electric Enterprise Fund
Schedule of Operating Expenses
Year Ended December 31, 2011
With Comparative Amounts for 2010)
2011 2010
Power:
Salaries and employee benefits
Purchased services
Power for resale
Supplies, maintenance and other
Total power
Distribution:
Salaries and employee benefits
Salary credits - work orders
Purchased services
Supplies and maintenance
Supply credits - work orders
Administration and general
Total distribution
Administration and general:
Salaries and employee benefits
Purchased services
Supplies and maintenance
Administrative fee
Other
Total administration and general
Depreciation
Total operating expenses
37,153 132,016
115,557 215,205
5,418,616 4,147,908
79,929 42,050
5,651,255 4,537,179
300,881 327,828
132,565)317,426)
104,563 89,107
138,165 12,127)
67,270)123,013)
400 18,479
344,174 17,152
988,637 919,289
339,175 339,818
287,451 95,816
847,291 815,283
162,546 164,664
2 2,334,870
1,486,392 1,438,032
10,106,921 8,292,929
94
Exhibit K -5
CITY OF SEWARD
Electric Enterprise Fund
Schedule of Composition of Net Assets
December 31, 2011
With Comparative Amounts for 2010)
2011
Grants and other external contributions $ 28,158,385
Related accumulated amortization
City - generated equity
Total net assets
2010
28,041,834
17,072,535) (16,192,740)
10,685,510 10,632,323
21,771,360 22,481,417
95
Exhibit K -6
CITY OF SEWARD
Electric Enterprise Fund
Schedule of Electric Capital Projects
Year Ended December 31, 2011
Funding sources:
Electric fund customers
Electric Fund
Total funding sources
Capital outlay - contracted services
e
Standby
Electric Transmission
Customer Generation Line
Projects Project Upgrade
116,551
29,694 8,087
116,551 29,694 8,087
116,551 29,694 8,087
e
CITY OF SEWARD
Water Enterprise Fund
Statement of Net Assets
December 31, 2011
With Comparative Amounts for 20 10)
Exhibit K -7
Assets 2011 2010
Current assets:
Cash and investments 1,845,042 1,252,792
Receivables:
Accounts 79,547 86,175
Assessments 7,069 7,069
Grants and loans 2,241 386,383
Other 5,635
Less allowance for doubtful accounts 3,580)3,626
Net receivables 90,912 476,001
Inventory 59,084 69,822
Total current assets 1,995,038 1,798,615
Restricted cash and investments - capital projects 84,064 141,594
Assessments receivable, net of current portion 17,672 24,742
lnterfund loan 1,973,360 1,973,360
Property, plant and equipment:
Land and land rights 2,507 2,507
Buildings 1,287,853 1,287,853
Improvements other than buildings 6,164,576 5,826,138
Equipment 1,277,216 1,270,366
Total property, plant and equipment in service 8,732,152 8,386,864
Less accumulated depreciation 4,084,262 3,875,735
Net property, plant and equipment in service 4,647,890 4,511,129
Construction in progress 461,238 797,434
Total property, plant and equipment 5,109,128 5,308,563
Total assets 9,179,262 9,246,874
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accounts payable 9,323 5,230
Accrued payroll and related liabilities 4,619 7,936
Accrued interest 154,193 114,400
Current portion:
Accrued annual leave 4,584 4,525
Notes payable 583,838 212,957
Total current liabilities 756,557 345,048
Noncurrent liabilities, net of current portion:
Accrued annual leave 14,341 11,881
Notes payable 2,069,011 2,478,514
Total noncurrent liabilities 2,083,352 2,490,395
Total liabilities 2,839,909 2,835,443
Net assets:
Invested in capital assets, net of related debt 2,456,279 2,617,092
Unrestricted 3,883,074 3,794,339
Total net assets 6,339,353 6,411,431
Total liabilities and net assets 9,179,262 9,246,874
97
Exhibit K -8
CITY OF SEWARD
Water Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2011
With Comparative Amounts for 2010)
Operating expenses:
Salaries and benefits
2011 2010
Operating revenues:
350,494 244,080
Residential 393,713 375,221
Small general service 110,659 104,175
Large general service 187,964 171,312
Industrial 190,721 168,915
Seward Marine Industrial Center 57,209 58,343
Ship water sales 62,427 61,263
Miscellaneous 67,039 95,659
Total operating revenues 1,069,732 1,034,888
Operating expenses:
Salaries and benefits 289,490 273,392
Purchased services 350,494 244,080
Supplies and maintenance 84,050 82,381
Administration and general 233,744 224,914
Other 20,305 21,579
Depreciation 208,527 204,604
Total operating expenses 1,186,610 1,050,950
Loss from operations 116,878)16,062)
Nonoperating revenues (expenses):
Intergovernmental - PERS on- behalf 17,612 8,776
Investment income 25,888 36,215
Interest expense 44,040 39,793
Net nonoperating revenues (expenses)540 5,198
Loss before contributions and transfers 117,418)10,864)
Capital contributions 137,085 941,943
Transfers out 91,745 88,291
Change in net assets 72,078)842,788
Beginning net assets 6,411,431 5,568,643
Ending net assets 6,339,353 6,411,431
Of the total depreciation expense of $208,527 above, $27,652 was attributable to capital assets that were
funded with capital contributions.)
ZEV
Exhibit K -9
CITY OF SEWARD
Water Enterprise Fund
Statement of Cash Flows
Year Ended December 31, 2011
With Comparative Amounts for 2010)
2011 2010
Cash flows from operating activities:
Receipts from customers and users 1,070,679 1,020,692
Payments to suppliers 440,018)358,531)
Payments to employees 272,676)260,041)
Payments for interfund services used 233,744 224,914
Net cash flows from operating activities 124,241 177,206
Cash flows from noncapital financing activities - transfers out 91,745 88,291
Cash flows from capital and related financing activities:
Principal payments on long -term debt 38,622)
Interest payments on long -term debt 4,247)
Acquisition of property, plant and equipment 9,092)445,247)
Capital contributions received 528,297 7,068
Net cash flows from capital and related financing activities 476,336 438,179
Cash flows from investing activities - investment income received 25,888 36,215
Net increase (decrease) in cash and investments 534,720 313,049)
Beginning cash and investments 1,394,386 1,707,435
Ending cash and investments 1,929,106 1,394,386
Reconciliation of cash and investments to statement of net assets:
Current assets 1,845,042 1,252,792
Restricted assets 84,064 141,594
1,929,106 1,394,386
Reconciliation of loss from operations to net cash
provided (used) by operating activities:
Loss from operations 116,878)16,062)
Adjustments to reconcile loss from operations
to net cash flows from operating activities:
Depreciation 208,527 204,604
Noncash expense - PERS on- behalf 17,612 8,776
Increase (decrease) in allowance for doubtful accounts 46)1,566)
Increase) decrease in assets:
Accounts receivable 993 12,630)
Inventory 10,738 217)
Increase (decrease) in liabilities:
Accounts payable 4,093 10,274)
Accrued payroll and related liabilities 3,317)2,068
Accrued annual leave 2,519 2,507
Net cash flows from operating activities 124,241 177,206
Noncash capital and related financing activities - a balance of
594,346 in accounts payable at December 31, 2009 was forgiven in
2010 and reflected as capital contributions 594,346
F,xhihit K -1 0
CITY OF SEWARD
Water Enterprise Fund
Schedule of Composition of Net Assets
December 31, 2011
With Comparative Amounts for 2010)
Grants and other external contributions
Related accumulated amortization
Contributions from other funds
City - generated equity
Total net assets
2011
3,536,638
2010
3,399,553
1,858,007) (1,830,355)
498,756 498,756
4,161,966 4,343,477
6,339,353 6,411,431
100
Exhibit K -11
CITY OF SEWARD
Wastewater Enterprise Fund
Statement of Net Assets
December 31, 2011
With Comparative Amounts for 20 10)
Assets 2011 2010
Current assets:
Cash and investments $ 580,247 396,006
Receivables:
Accounts 77,425 74,030
Other 20,000 20,000
Less allowance for doubtful accounts (3,484 (3,331
Net receivables 93,941 90,699
Total current assets 674,188 486,705
Restricted cash and investments - capital projects 112,115 112,115
Property, plant and equipment:
Land and land rights 111,011 111,011
Buildings 2,418,398 2,418,398
Improvements other than buildings 8,952,968 8,952,968
Equipment 716,515 705,897
Total property, plant and equipment in service 12,198,892 12,188,274
Less accumulated depreciation 7,189,300 6,903,924
Net property, plant and equipment in service 5,009,592 5,284,350
Total assets 5,795,895 5,883,170
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accounts payable 23,559 8,906
Accrued payroll and related liabilities 4,698 7,836
Accrued interest 291 3,932
Current portion:
Accrued annual leave 4,555 3,841
Notes payable 60,143 116,353
Total current liabilities 93,246 140,868
Noncurrent liabilities, net of current portion:
Accrued annual leave 16,201 15,624
Notes payable 62,347 122,492
Total noncurrent liabilities 78,548 138,116
Total liabilities 171,794 278,984
Net assets:
Invested in capital assets, net of related debt 4,887,102 5,045,505
Unrestricted 736,999 558,681
Total net assets 5,624,101 5,604,186
Total liabilities and net assets $ 5,795,895 5,883,170
101
CITY OF SEWARD
Wastewater Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2011
With Comparative Amounts for 20 10)
Operating expenses:
Salaries and benefits
2011 2010
Operating revenues:
258,402 295,790
Residential 488,208 465,108
Small general service 128,725 136,741
Large general service 209,729 193,914
Seward Marine Industrial Center 32,513 50,211
Miscellaneous 5,565 5,442
Total operating revenues 864,740 851,416
Operating expenses:
Salaries and benefits 278,509 270,366
Purchased services 258,402 295,790
Supplies and maintenance 40,125 81,689
Administration and general 144,120 138,716
Other 15,813 13,984
Depreciation 296,693 276,608
Total operating expenses 1,033,662 1,077,153
73,613
Loss from operations 168,922)225,737)
Nonoperating revenues (expenses):
Intergovernmental - PERS on- behalf 17,285 8,712
Investment income 7,541 6,021
Interest expense 10,809 3,468
Net nonoperating revenues (expenses)14,017 11,265
Loss before contributions and transfers 154,905)214,472)
Capital contributions 250,200
Transfers out 75,380 73,613
Change in net assets 19,915 288,085)
Beginning net assets 5,604,186 5,892,271
Ending net assets 5,624,101 5,604,186
Of the total depreciation expense of $296,693 above, $231,042 was attributable to capital assets that
were funded with capital contributions.)
102
Exhibit K -13
CITY OF SEWARD
Wastewater Enterprise Fund
Statement of Cash Flows
Year Ended December 31, 2011
With Comparative Amounts for 2010)
Cash flows from capital and related financing activities:
Principal payments on long -term debt (116,355) (1,333)
Interest payments on long -term debt (14,450) (101)
Capital contributions received 250,200 -
Acquisition of property, plant and equipment (21,935 58,881
Net cash flows from capital and related financing activities 97,460 (60,315
Cash flows from investing activities - investment income received 7,541 6,021
Net increase (decrease) in cash and investments 184,241 (74,732)
Beginning cash and investments 508,121 582,853
Ending cash and investments $ 692,362 508,121
Reconciliation of cash and investments to statement of net assets:
Current assets
2011 2010
Cash flows from operating activities:
112,115 112,115
Receipts from customers and users 861,498 835,821
Payments to suppliers 299,687)390,665)
Payments to employees 263,071)253,265)
Payments for interfund services used 144,120 138,716)
Net cash flows from operating activities 154,620 53,175
Cash flows from noncapital financing activities - transfers out 75,380)73,613)
Cash flows from capital and related financing activities:
Principal payments on long -term debt (116,355) (1,333)
Interest payments on long -term debt (14,450) (101)
Capital contributions received 250,200 -
Acquisition of property, plant and equipment (21,935 58,881
Net cash flows from capital and related financing activities 97,460 (60,315
Cash flows from investing activities - investment income received 7,541 6,021
Net increase (decrease) in cash and investments 184,241 (74,732)
Beginning cash and investments 508,121 582,853
Ending cash and investments $ 692,362 508,121
Reconciliation of cash and investments to statement of net assets:
Current assets 580,247 396,006
Restricted assets 112,115 112,115
692,362 508,121
Reconciliation of loss from operations to net cash provided
used) by operating activities:
Loss from operations 168,922)225,737)
Adjustments to reconcile loss from operations
to net cash flows from operating activities:
Depreciation 296,693 276,608
Noncash expense - PERS on- behalf 17,285 8,712
Increase (decrease) in allowance for doubtful accounts 153 2,574)
Increase) decrease in assets - accounts receivable 3,395)13,021)
Increase (decrease) in liabilities:
Accounts payable 14,653 798
Accrued payroll and related liabilities 3,138)1,464
Accrued annual leave 1,291 6,925
Net cash flows from operating activities 154,620 53,175
103
Exhibit K -14
CITY OF SEWARD
Wastewater Enterprise Fund
Schedule of Composition of Net Assets
December 31, 2011
With Comparative Amounts for 20 10)
Grants and other external contributions
Related accumulated amortization
Contributions from other funds
City - generated equity
Total net assets
2011
10,405,799
6,815,311)
2010
10,155,599
6,584,269)
161,550 161,550
1,872,063 1,871,306
5,624,101 5,604,186
104
Noncurrent liabilities, net of current portion
Accrued annual leave 40,920 35,405
Exhibit K -15
6,480,000
CITY OF SEWARD
Interfund loan 102,424 124,783
Harbor Enterprise Fund
104,345 112,720
Unamortized deferred loss on refunding
Statement of Net Assets
70,959)
Total noncurrent liabilities 6,663,181
December 31, 2011
Total liabilities 8,719,745 10,137,226
With Comparative Amounts for 20 10)
Invested in capital assets, net of related debt
Assets 2011 2010
Current assets:
859,348
Unrestricted 5,264,974
Cash and investments
Total net assets
3,582,014 1,776,249
Receivables:
30,895,432 29,012,036
Accounts 140,058 147,507
Grants 489,554 1,466,082
Commercial passenger vessel tax 1,41 1,435 374,294
Assessments 4,286 4,286
Less allowance for doubtful accounts 19,100)19,100)
Net receivables 2,026,233 1,973,069
Total current assets 5,608,247 3,749,318
Restricted cash and investments:
Bond retirement 709,910 859,348
Capital projects 1,366,705 1,927,277
Total restricted cash and investments 2,076,615 2,786,625
Assessments receivable, net of current portion 10,716 15,002
Property, plant and equipment:
Land and land rights 5,117,479 5,117,479
Buildings 610,169 610,169
Improvements other than buildings 22,416,800 22,416,800
Equipment 1,551,131 1,366,594
Total property, plant and equipment in service 29,695,579 29,511,042
Less accumulated depreciation 11,264,921)9,997,524)
Net property, plant and equipment in service 18,430,658 19,513,518
Construction in progress 4,689,982 2,862,430
Total property, plant and equipment 23,120,640 22,375,948
Deferred charges - unamortized debt issuance costs 79,214 85,143
Total assets 30,895,432 29,012,036
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accounts payable 517,091 1,577,647
Accrued payroll and related liabilities 21,857 23,525
Accrued interest 32,229 36,168
Current portion:
Accrued annual leave 14,491 14,228
Bonds payable 400,000 385,000
Interfund loan 22,358 21,193
Deferred revenue 993,508 946,716
Customer deposits 55,030 50,800
Total current liabilities 2,056,564 3,055,277
Noncurrent liabilities, net of current portion
Accrued annual leave 40,920 35,405
Bonds payable 6,480,000 6,880,000
Interfund loan 102,424 124,783
Unamortized bond premium 104,345 112,720
Unamortized deferred loss on refunding 64,508)70,959)
Total noncurrent liabilities 6,663,181 7,081,949
Total liabilities 8,719,745 10,137,226
Net assets:
Invested in capital assets, net of related debt 16,200,803 15,069,187
Restricted for bond retirement 709,910 859,348
Unrestricted 5,264,974 2,946,275
Total net assets 22,175,687 18,874,810
Total liabilities and net assets 30,895,432 29,012,036
105
CITY OF SEWARD
Harbor Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2011
With Comparative Amounts for 2010)
Operating expenses:
Salaries and benefits
2011 2010
Operating revenues:
439,259 341,415
Moorage 1,455,315 1,450,738
Wharfage 36,508 60,476
Boat lift fees 98,418 99,877
Power sales 356,062 225,303
Rentals and leases 353,848 308,866
Passenger transit fees 557,421 544,947
Miscellaneous 110,449 113,621
Total operating revenues 2,968,021 2,803,828
Operating expenses:
Salaries and benefits 920,929 842,203
Purchased services 439,259 341,415
Power for resale 192,946 149,796
Supplies and maintenance 76,396 105,946
Administration and general 332,159 345,527
Depreciation 1,086,311 1,086,891
Total operating expenses 3,048,000 2,871,778
Loss from operations 79,979)67,950)
Nonoperating revenues (expenses):
Intergovernmental - PERS on- behalf 59,532 28,958
Dredging and breakwater grant 95,145 2,613,022
Investment income 48,982 47,114
Commercial passenger vessel tax 1,411,435 720,040
Interest expense 320,623)341,168)
Dredging 305,059)2,313,022)
Coast Guard building 480,554
Net nonoperating revenues (expenses)989,412 274,390
Earnings before contributions and transfers 909,433 206,440
Capital contributions 1,788,083 794,074
Transfers in 995,210 302,262
Transfers out 391,849 336,046
Change in net assets 3,300,877 966,730
Beginning net assets 18,874,810 17,908,080
Ending net assets $ 22,175,687 18,874,810
Of the total depreciation expense of $1,086,311 above, $627,174 was attributable to capital assets that were funded
with capital contributions.)
106
Cash flows from capital and related financing activities:
Principal payments on long -term debt 385,000)
Exhibit K -17
CITY OF SEWARD
326,486)347,124)
Harbor Enterprise Fund
1,831,003)957,581)
Statement of Cash Flows
2,768,897 1,041,692
Year Ended December 31, 2011
21,194)20,087)
With Comparative Amounts for 20 10)
374,294 733,160
Transfers in
2011 2010
Cash flows from operating activities:
975,267 90,060
Receipts from customers and users 3,026,492 2,880,597
Payments to suppliers 2,068,287)1,971,838)
Payments to employees 857,287)816,920)
Payments for interfund services used 332,159 345,527
Net cash flows from operating activities 231,241)253,688)
Cash flows from noncapital financing activities:
3,582,014 1,776,249
Transfers in 599,451 302,262
Transfers out 391,849)336,046)
Nonoperating intergovernmental revenues received 95,145 1,449,186
Net cash flows from noncapital financing activities 302,747 1,415,402
Cash flows from capital and related financing activities:
Principal payments on long -term debt 385,000)360,000)
Interest payments on long -term debt 326,486)347,124)
Acquisition of property, plant and equipment 1,831,003)957,581)
Capital contributions received 2,768,897 1,041,692
Interfund loan payment 21,194)20,087)
Commercial passenger vessel tax receipts 374,294 733,160
Transfers in 395,759
Net cash flows from capital and related financing activities 975,267 90,060
Cash flows from investing activities - investment income received 48,982 47,114
Net increase in cash and investments 1,095,755 1,298,888
Beginning cash and investments 4,562,874 3,263,986
Ending cash and investments 5,658,629 4,562,874
Reconciliation of cash and investments to statement of net assets:
Current assets 3,582,014 1,776,249
Restricted assets 2,076,615 2,786,625
5,658,629 4,562,874
Reconciliation of loss from operations to net cash
provided (used) by operating activities:
Loss from operations 79,979)67,950)
Adjustments to reconcile loss from operations to net cash
flows from operating activities:
Depreciation 1,086,311 1,086,891
Amortization of debt issuance costs 5,929 5,928
Noncash expense - PERS on- behalf 59,532 28,958
Nonoperating expenses 305,059)2,793,576)
Increase) decrease in assets - receivables 7,449 8,927)
Increase (decrease) in liabilities:
Accounts payable 1,060,556)1,412,967
Accrued payroll and related liabilities 1,668)2,563
Accrued annual leave 5,778 6,238)
Customer deposits 4,230 8,645
Deferred revenue 46,792 77,051
Net cash flows from operating activities 231,241 253,688
107
Exhibit K -18
CITY OF SEWARD
Harbor Enterprise Fund
Schedule of Composition of Net Assets
December 31, 2011
With Comparative Amounts for 2010)
2011 2010
Grants and other external contributions
Related accumulated amortization
Contributions from other funds
City - generated equity
Total net assets
22,021,481 20,233,398
7,211,258) (6,584,083)
5,357,742 4,362,532
2,007,722 862,963
22,175,687 18,874,810
108
Exhibit K -19
CITY OF SEWARD
Harbor Enterprise Fund
Schedule of Harbor Capital Projects
Year Ended December 31, 2011
Funding sources:
State grants
Harbor Fund
Total funding sources
Capital outlay:
Contracted services
Other services and charges
Total capital outlay
Seward
Harbor Marine
Expansion Center Dock
1,449,918 338,165
39,469 -
1,489,387 338,165
1,357,576 338,165
131,811 -
1,489,387 338,165
109
R -1,; h;+ 'V -10
CITY OF SEWARD
Seward Marine Industrial Center Enterprise Fund
Statement of Net Assets
December 31, 2011
With Comparative Amounts for 2010)
Assets
Current assets - accounts receivable
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
Total assets
2011 2010
226,767 44,621
12,021,821
280,287
26,798,104
908,789
13,145,688
53,154,689
27,582,176
5 57? 51'1
12,021,821
280,287
26,798,104
908,789
13,145,688
53,154,689
26,980,345
26,174,344
25,799,280 26,218,965
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accounts payable 110,304 15,531
Due to other funds 20,949 27,141
Accrued payroll and related liabilities 1,832
Accrued interest 172
Current portion of bonds payable 59,030
Deferred revenue 43,064 40,000
Total current liabilities 174,317 143,706
Net assets:
Invested in capital assets, net of related debt 25,572,513 26,115,314
Unrestricted (deficit)52,450 40,055
Total net assets 25,624,963 26,075,259
Total liabilities and net assets 25,799,280 26,218,965
110
Exhibit K -21
CITY OF SEWARD
Seward Marine Industrial Center Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2011
With Comparative Amounts for 2010)
Operating expenses:
Salaries and benefits
2011 2010
Operating revenues:
87,788 77,400
Moorage 3,916 1,764
Wharfage 6,176 4,705
Boat lift fees 127,254 69,380
Storage 112,797 67,936
Rentals and leases 133,782 139,634
Power sales 26,115 12,498
Miscellaneous 3,414 222
Total operating revenues 413,454 296,139
Operating expenses:
Salaries and benefits 73,568 73,178
Purchased services 87,788 77,400
Supplies and maintenance 45,892 43,953
Administration and general 88,630 87,213
Depreciation 601,831 622,334
Miscellaneous 1,870 18,631
Total operating expenses 899,579 922,709
628,227)
Loss from operations 486,125)626,570)
Nonoperating revenues (expenses):
Intergovernmental - PERS on- behalf 3,307 1,660
Fleet relocation grant 180,389
Fleet relocation study 180,389)
Investment income 101 264
Interest expense 1,894)3,581
Net nonoperating revenues (expenses)1,514 1,657
Loss before transfers 484,611)628,227)
Transfers in 124,640 70,567
Transfers out 90,325 75,826
Change in net assets 450,296)633,486)
Beginning net assets 26,075,259 26,708,745
Ending net assets $ 25,624,963 26,075,259
Of the total depreciation expense of $601,831 above, $482,529 was attributable to capital assets that were
funded with capital contributions.)
111
Exhibit K -22
CITY OF SEWARD
Seward Marine Industrial Center Enterprise Fund
Statement of Cash Flows
Year Ended December 31, 2011
With Comparative Amounts for 2010)
Cash flows from capital and related financing activities:
Principal payments on long -term debt
2011 2010
Cash flows from operating activities:
2,066)3,719)
Receipts from customers and users 234,372 303,312
Payments to suppliers 40,777)126,776)
Payments to employees 72,093)71,574)
Payments for interfund services used 88,630 87,213
Net cash flows from operating activities 32,872 17,749
Cash flows from noncapital financing activities:
Ending cash and investments
Transfers in 124,640 70,567
Transfers out 90,325 75,826
Net cash flows from noncapital financing activities 34,315 5,259
Cash flows from capital and related financing activities:
Principal payments on long -term debt 59,030)55,094)
Interest payments on long -term debt 2,066)3,719)
Increase (decrease) in due to other funds 6,192 27,141
Net cash flows from capital and related financing activities 67,288 31,672
Cash flows from investing activities - investment income received 101 264
Net decrease in cash and investments 18,918)
Beginning cash and investments 18,918
Ending cash and investments
Reconciliation of loss from operations to net cash provided (used)
by operating activities:
Loss from operations 486,125)626,570)
Adjustments to reconcile loss from operations to net cash
flows from operating activities:
Depreciation 601,831 622,334
Noncash expense - PERS on- behalf 3,307 1,660
Increase) decrease in assets - accounts receivable 182,146)8,099)
Increase (decrease) in liabilities:
Accounts payable 94,773 13,208
Accrued payroll and related liabilities 1,832)56)
Deferred revenue 3,064 15,272
Net cash flows from operating activities 32,872 17,749
112
Exhibit K -23
CITY OF SEWARD
Seward Marine Industrial Center Enterprise Fund
Schedule of Composition of Net Assets
December 31, 2011
With Comparative Amounts for 2010)
2011
Grants and other external contributions $ 35,725,414
Related accumulated amortization
Contributions from other funds
City - generated deficit
Total net assets
2010
35,725,414
24,748,946) (24,266,417)
16,902,5 82 16,777,942
2,254,087 (2,161,680
25,624,963 26,075,259
113
Exhibit K -24
CITY OF SEWARD
Parking Enterprise Fund
Statement of Net Assets
December 31, 2011
With Comparative Amounts for 2010)
2011 2010
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
Unrestricted
Total net assets
Total liabilities and net assets
408,843 387,338
513,540 513,540
139,806 89,329
653,346 602,869
503,88D (487,125
149,465 115,744
558,308 503,082
9,331 95
149,465 115,744
399,512 387,243
548,977 502,987
558,308 503,082
114
T7__1__L]a T7 11C
CITY OF SEWARD
Parking Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2011
With Comparative Amounts for 20 10)
2011 2010
Operating revenues - parking fees $ 268,105 192,046
Operating expenses:
Salaries and employee benefits 106,824 110,520
Supplies and maintenance 17,952 18,943
Purchased services 10,669
Rents and leases 13,000 13,000
Administration and general 39,612 22,951
Depreciation 16,756 13,638
Total operating expenses 204,813 179,052
Earnings from operations 63,292 12,994
Nonoperating revenues:
Intergovernmental - PERS on- behalf 614
Investment income 3,532 3,487
Net nonoperating revenues 4,146 3,487
Earnings before transfers 67,438 16,481
Transfers out 21,448 15,364
Change in net assets 45,990 1,117
Beginning net assets 502,987 501,870
Ending net assets 548,977 502,987
115
Exhibit K -26
CITY OF SEWARD
Parking Enterprise Fund
Statement of Cash Flows
Year Ended December 31, 2011
With Comparative Amounts for 20 10)
116
2011 2010
Cash flows from operating activities:
Receipts from customers and users 268,105 192,046
Payments to suppliers 32,385)49,601)
Payments to employees 106,210)110,520)
Payments for interfund services used 39,612 22,951
Net cash flows from operating activities 89,898 8,974
Cash flows from noncapital financing activities -
transfers out 21,448 15,364
Cash flows from capital and related financing activities -
acquisition of property, plant and equipment 50,477 21,833
Cash flows from investing activities - investment income received 3,532 3,487
Net increase (decrease) in cash and investments 21,505 24,736)
Beginning cash and investments 387,338 412,074
Ending cash and investments 408,843 387,338
Reconciliation of earnings from operations to net cash
provided (used) by operating activities:
Earnings from operations 63,292 12,994
Adjustments to reconcile earnings from operations
to net cash flows from operating activities:
Depreciation 16,756 13,638
Noncash expense - PERS on- behalf 614
Increase (decrease) in liabilities - accounts payable 9,236 17,658
Net cash flows from operating activities 89,898 8,974
116
Fxhihit K -77
CITY OF SEWARD
Parking Enterprise Fund
Schedule of Composition of Net Assets
December 31, 2011
With Comparative Amounts for 2010)
2011 2010
Grants and other external contributions
Related accumulated amortization
Contributions from other funds
City - generated equity
Total net assets
425,893 425,893
425,893)425,893)
7,650 7,650
541,327 495,337
548,977 502,987
117
CITY OF SEWARD
Providence Seward Medical & Care Center Enterprise Fund
Statement of Net Assets
December 31, 2011
Exhibit K -28
Assets 2011
Current assets:
Cash and investments $ 1,434,633
Receivables:
Accounts 3,739,000
Other 907,000
Less allowance for doubtful accounts (1,262,000)
Net receivables 3,384,000
Restricted cash and investments - capital projects 8,984
Other 32,320
Property, plant and equipment:
Buildings 24,982,687
Improvements other than buildings 8,317,429
Equipment 4,610,203
Total property, plant and equipment in service 37,910,319
Less accumulated depreciation 8,207,769
Net property, plant and equipment in service 29,702,550
Deferred charges - unamortized debt issuance costs 434,588
Total assets 34,997,075
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accounts payable 226,000
Accrued payroll and related liabilities 900,000
Accrued interest payable 327,703
Current portion:
Capital leases 15,000
Bonds payable 1,550,000
Deferred revenue 22,000
Payable to Providence Health and Services - Washington 2,819,000
Due to contractual agencies 361,000
Total current liabilities 6,220,703
Noncurrent liabilities, net of current portion:
Bonds payable 26,320,000
Other 44,000
Unamortized bond premium 369,531
Total noncurrent liabilities 26,733,531
Total liabilities 32,954,234
Net assets:
Invested in capital assets, net of related debt 1,448,019
Unrestricted 594,822
Total net assets 2,042,841
Total liabilities and net assets $ 34,997,075
118
Exhibit K -29
CITY OF SEWARD
Providence Seward Medical & Care Center Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2011
2011
Operating revenues:
Net patient service revenues
Miscellaneous
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):
Investment income
Interest expense
Loss on disposal of capital assets
Net nonoperating revenues (expenses)
Loss before transfers
Transfers in
Transfers out
Change in net assets
Beginning net assets, as restated
Ending net assets
16,192,000
rlati nnn
16,838,000
11,820,000
2,762,000
1,049,114
1,018,103
2,3 98,169
19,047,386
2,209,386)
15,701
1,346,962)
22,267
1,353,528
3,562,914)
1,756,584
134,704)
1,941,034)
3,983,875
2,042,841
119
Exhibit K -30
CITY OF SEWARD
Providence Seward Medical & Care Center Enterprise Fund
Statement of Cash Flows
Year Ended December 31, 2011
2011
Cash flows from operating activities:
Receipts from customers and users $ 15,380,253
Payments to suppliers (3,206,114)
Payments to employees (11,754,000)
Net cash flows from operating activities 420,139
Cash flows from noncapital financing activities:
Transfers in 1,756,584
Transfers out (134,704
Net cash flows from noncapital financing activities 1,621,880
Cash flows from capital and related financing activities:
Principal payments on long -term debt 1,465,000)
Capital lease payments 23,000)
Interest payments on long -term debt 1,377,588)
Decrease) in due to other funds 59,000)
Net cash flows from capital and related financing activities 2,924,588
Cash flows from investing activities - investment income received 15,701
Net decrease in cash and investments (866,868)
Beginning cash and investments, as restated 2,310,485
Ending cash and investments 1,443,617
Reconciliation of cash and investments to statement of net assets:
Current assets 1,434,633
Restricted assets 8,984
1,443,617
Reconciliation of loss from operations to net cash
provided (used) by operating activities:
Loss from operations 2,209,386)
Adjustments to reconcile loss from operations to net cash
flows from operating activities:
Depreciation 2,398,169
Amortization of debt issuance costs 19,103
Increase (decrease) in allowance for doubtful accounts 64,000
Increase) decrease in assets - receivables 1,513,747)
Increase (decrease) in liabilities:
Accounts payable 3,000
Other payables 1,601,000
Accrued payroll and related liabilities 66,000
Deferred revenue 8,000
Net cash flows from operating activities 420,139
120
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 expenditure 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.
121
Exhibit L -1
Current assets:
Cash and investments
Receivables:
Accrued interest
Interfund loans
Prepaid expenses
Total current assets
CITY OF SEWARD
Motor Pool Internal Service Fund
Statement of Net Assets
December 31, 2011
With Comparative Amounts for 20 10)
2011 2010
886,780 675,325
Interfund loans, net of current portion
Property, plant and equipment:
Equipment and vehicles
Less accumulated depreciation
Net property, plant and equipment in service
Total assets
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accrued interest
Current portion of capital lease obligations
Total current liabilities
Noncurrent liabilities, net of current portion -
capital lease obligations
Total liabilities
Net assets:
Invested in capital assets, net of related debt
Unrestricted
Total net assets
Total liabilities and net assets
59,684 63,132
68,113 64,666
7,895 -
1,022,472 803,123
1,062,786 1,130,899
5,359,335 5,311,136
2,789,796 (2,448,035
2,569,539 2,863,101
4,654,797 4,797,123
4,977 7,300
191,219 184,507
196,196 191,807
229,498 420,717
425,694 612,524
2,148,822 2,257,877
2,080,281 1,926,722
4,229,103 4,184,599
4,654,797 4,797,123
122
Exhibit L -2
CITY OF SEWARD
Motor Pool Internal Service Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2011
With Comparative Amounts for 2010)
2011
Operating revenues - vehicle rental
Operating expenses:
Depreciation
Supplies and maintenance
Total operating expenses
Earnings (loss) from operations
Nonoperating revenues (expenses):
Gain on disposal of capital assets
Investment income
Interest expense
Net nonoperating revenues (expenses)
Change in net assets
Beginning net assets
Ending net assets
2010
459,682 443,382
460,842 339,354
7,584 2,140
468,426 341,494
8,744) 101,888
5,832 47,129
65,504 66,670
18,088)24,635
53,248 89,164
44,504 191,052
4,184,599 3,993,547
4,229,103 4,184,599
Of the total depreciation expense of $460,842 above, $0 was attributable to capital assets that were
funded with capital contributions.)
123
T _2
CITY OF SEWARD
Motor Pool Internal Service Fund
Statement of Cash Flows
Year Ended December 31, 2011
With Comparative Amounts for 20 10)
2011 2010
Cash flows from operating activities:
Receipts from vehicle rentals $ 459,682 443,382
Payments to suppliers (15,479 (2,140
Net cash flows from operating activities 444,203 441,242
Cash flows from capital and related financing activities:
Principal payments on long -term debt (184,507) (178,033)
Interest payments on long -term debt (20,411) (26,882)
Acquisition of equipment and vehicles (167,280) (1,083,321)
Proceeds from sale of capital assets 5,832 47,129
Net cash flows from capital and
related financing activities (366,366 (1,241,107
Cash flows from investing activities:
Interfund loan receipts 64,666 61
Investment income received 68,952 69,943
Net cash flows from investing activities 133,618 131,335
Net increase (decrease) in cash and investments 211,455 (668,530)
Beginning cash and investments 675,325 1,343,855
Ending cash and investments $ 886,780 675,325
Reconciliation of earnings (loss) from operations to net cash
provided (used) by operating activities:
Earnings (loss) from operations $ (8,744) 101,888
Adjustments to reconcile earnings (loss) from operations
to net cash flows from operating activities:
Depreciation 460,842 339,354
Increase) in assets - prepaid expenses (7,895 -
Net cash flows from operating activities $ 444,203 441,242
124
Exhihit T,-4
CITY OF SEWARD
Motor Pool Internal Service Fund
Schedule of Composition of Net Assets
December 31, 2011
With Comparative Amounts for 20 10)
2011 2010
Grants and other external contributions
Related accumulated amortization
Contributions from other funds
City - generated equity
Total net assets
97,289 97,289
97,289)97,289)
832,324 832,324
3,396,779 3,352,275
4,229,103 4,184,599
125
Rvhihit T _G
CITY OF SEWARD
Compensated Annual Leave Internal Service Fund
Statement of Net Assets
December 31, 2011
With Comparative Amounts for 20 10)
Assets 2011 2010
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
425,643 457,188
112,489 109,056
313,154 348,132
425,643 457,188
425,643 457,188
126
Exhibit L -6
CITY OF SEWARD
Compensated Annual Leave Internal Service Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2011
With Comparative Amounts for 2010)
Operating revenues - interfund charges
Operating expenses - salaries and benefits
Change in net assets
Beginning net assets
Ending net assets
2011 2010
380,846 360,287
380,846 360,287
127
Exhibit L -7
CITY OF SEWARD
Compensated Annual Leave Internal Service Fund
Statement of Cash Flows
Year Ended December 31, 2011
With Comparative Amounts for 2010)
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
2011 2010
380,846 360,287
412,391 335,164
31,545)25,123
457,188 432,065
425,643 457,188
31,545 25,123
31,545 25,123
128
CITY OF SEWARD
Teen Council Agency Fund
Statement of Changes in Assets and Liabilities
Year Ended December 31, 2011
Balance at Balance at
January 1, December 31,
2011 Additions Deletions 2011
Assets
Cash and investments
Other assets
Total assets
Accounts payable
Due to Teen Council
Total liabilities
46,895 36,842 36,386 47,351
150 - - 150
47,045 36,842 36,386 47,501
2,082 479 - 2,561
44,963 36,363 36,386 44,940
47,045 36,842 36,386 47,501
129
Exhibit N -1
CITY OF SEWARD
Schedule of Governmental Capital Assets
December 31, 2011
With Comparative Amounts for 20 10)
2010
2011 as restated
Capital assets:
Land and land improvements
Buildings
Improvements other than buildings
Equipment
Construction in progress
5,432,289 5,432,289
57,991,642 56,446,234
16,119,523 16,012,841
8,308,728 7,520,998
8,714,138 5,759,828
Total capital assets 96,566,320 91,172,190
130
Exhibit N -2
CITY OF SEWARD
Schedule of Changes in Governmental Capital Assets
Year Ended December 31, 2011
Balance at
January 1,
2011 as Restated Additions Deletions
Balance at
December 31,
2011
Land and land improvements $5,432,289 5,432,289
Buildings 56,446,234 1,545,408 -57,991,642
Improvements other than buildings 16,012,841 106,682 -16,119,523
Equipment 7,520,998 891,424 103,694 8,308,728
Construction in progress 5,759,828 3,986,531 1,032,221 8,714,138
91,172,190 6,530,045 1,135,915 96,566,320
131
Exhibit N -3
CITY OF SEWARD
Schedule of Governmental Capital Assets by
December 31, 2011
Land and
Land
Improve -
Function and Activity ments Buildings
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 Corr
Total public safety
Public works:
Streets
Engineering
City shop
Total public works
Function and Activity
Improve-
ments
Otherthan
Buildings Equipment Total
44,554 44,554
491,198 491,198
37,988 37,988
65,386 65,386
5,232 7,142 12,374
2,407,729 16,291 54,169 2,478,189
48,928,273 3,162,456 4,455,363 56,546,092
1,479,080 8,005,937 53,025 9,538,042
1,473,935 1,473,935
5,432,289 68,868 5,501,157
5,432,289 54,363,117 11,184,684 5,208,825 76,188,915
1,682,105 1,682,105
9,408 9,408
156,720 156,720
1,028,235 46,746 885,405 1,960,386
2,600 2,600
6,300 6,300
1,184,955 46,746 2,585,818 3,817,519
254,567 3,324,312 256,374 3,835,253
3,621 3,621
785,766 65,466 851,232
1,040,333 3,324,312 325,461 4,690,106
Parks and recreation - 676,571 1,550,981 125,955 2,353,507
Library - 726,666 12,800 62,669 802,135
Total capital assets
allocated to functions $ 5,432,289 57,991,642 16,119,523 8,308,728 87,852,182
Construction in progress
Total capital assets
8,714,138
96,566,320
132
CITY OF SEWARD
Schedule of Changes in Governmental Capital Assets by Function and Activity
Year Ended December 31, 2011
Function and Activi
General government:
City Council /Mayor
City manager
City clerk
Finance
Community development
Municipal building
Alaska Sealife Center
General services
Community and Senior Center
Non - departmental
Total general government
Public safety:
Police
Jail
Animal control
Fire
Building inspection
Seward Volunteer Ambulance Corp
Total public safety
Public works:
Streets
Engineering
City shop
Total public works
Parks and recreation
Library
Construction in progress
Capital
Assets at
January 1,
2011 as Restated
Capital
Assets at
December 31,
Additions Deletions 2011
44,554 44,554
65,310 425,888 491,198
37,988 37,988
65,386 65,386
7,881 4,493 12,374
2,478,189 2,478,189
54,838,282 1,707,810 56,546,092
9,538,042 9,538,042
1,473,935 1,473,935
5,501,157 5,501,157
74,050,724 2,138,191 76,188,915
1,305,945 376,160 1,682,105
9,408 9,408
156,720 156,720
1,960,386 1,960,386
2,600 2,600
6,300 6,300
3,441,359 376,160 3,817,519
3,938,947 103,694 3,835,253
3,621 3,621
851,232 851,232
4,793,800 103,694 4,690,106
2,324,344 29,163 2,353,507
802,135 802,135
5,759,828 3,986,531 1,032,221 8,714,138
91,172,190 6,530,045 1,135,915 96,566,320
133
CITY OF SEWARD
Schedule of Expenditures of Federal Awards
Year Ended December 31, 2011
Exhibit 0-1
134
Catalog of
Federal January 1,Federal December 31,
Domestic Total 2011 Share of 2011
Assistance Grant Grant Receivable Expen-Federal Receivable
Grant Title Number Number Award Deferred ditures Receipts Deferred
Department of Agriculture
NRCS Flood Mitigation/Construction 10.904 68- 0150 -9 -023 $2,184,900 30,750 1,178,485 1,209,235
Department of Interior
Passed through State of Alaska Department
of Natural Resources:
lditarod Trail Centennial Monument 15.904 10537 21,828 16,380 16,380
Public Access to Seward Cemetery Info 15.904 10532 5,329 4,787 4,787
Total Department of Interior 21,167 21,167
Department of Justice
Bullet Proof Vest Program 16.607 2010BUBX10050844 748 748 748
Passed through State of Alaska Department
of Health and Social Services - Title V:
Delinquency Prevention Grants 16.548 609 -11 -066 45,000 36,000 36,000
Delinquency Prevention Grants 16.548 609 -12 -066 45,000 9,000 9,000
Total CFDA 16.548 45,000 45,000
Total Department of Justice 45,748 45,748
Department of Transportation
Passed through State of Alaska Department
of Transportation and Public Facilities -
Seatbelt & DUI Enforcement 20.600 402PT10- 06 -09 -x 2,754 2,190 563 2,753
National Endowment for the Humanities
Passed through State of Alaska Humanities Forum
Phase II: The 3- Country Jujiro Wade
Global Archiving Project 45.129 G11 -0029 5,000 4,050 4,500 450)
Institute of Museum and Library Services
Passed through State of Alaska Department
of Education and Early Development -
Continuing Education Program 45.310 CED -11- 770 -135 1,000 1,000 1,000
Environmental Protection Agency
Passed through State of Alaska Department
of Environmental Conservation:
Drinking Water Loan (ARRA)66.468 769061 436,557 386,220 40,337 426,557
Clean Water Loan (ARRA)66.458 769051 250,200 250,200 250,200
Engineering of Water Tank & Line Extension 66.606 76911 297,400 70,953 70,953
Total Environmental Protection Agency 386,220 361,490 747,710
Department of Energy
Passed through Alaska Energy Authority -
Energy Efficiency and Conservation (ARRA)81.128 7510052 115,800 6,358 46,724 6,358 46,724
134
CITY OF SEWARD
Schedule of Expenditures of Federal Awards, continued
Catalog of
Federal
Domestic
Assistance Grant
Grant Title Number Number
Department of Homeland Security
Fire Training / Hose Testing 97.044 EMW- 2010 -FO -08207 $ 19,157
Assistance to Firefighters - Radios 97.044 EMW- 2009 -FO -11029 69,909
Total CFDA 97.044
Passed through State of Alaska Department
of Military and Veterans Affairs:
Oct. 06 Southern Alaska Storm Disaster/Flood 97.036 FEMA- AK- DR1669
Communications Equipment (10 Radios) 97.067 08SHSP- GR34057
State Homeland Security Program 97.067 2009 -SS -T9 -0007
Total CFDA 97.067
Total Department of Homeland Security
Total Federal Financial Assistance
January 1,Federal
Total 2011 Share of
Grant Receivable Expen-
Award Deferred ditures
Exhibit 0-1, continued
December 31,
2011
Federal Receivable
Receipts Deferred
11,519 - 11,519
61,781 61,781 -
73,300 61,781 11,519
750,000 130,702 49,014 179,716
350,000 159,105 190,280 349,385 -
22,500 - 19,620 - 19,620
159,105 209,900 349,385 19,620
289,807 332,214 411,166 210,855
715,325 1,991,441 2,449,637 257,129
135
Grant Title
Department of Commerce, Community
and Economic Development
Levee Construction
Road/Levee Construction
Fish Ditch Restoration
Bus Transportation Assistance for
Cruise Ship Passengers
Coast Guard Building Relocation
Dredging Cruise Ship Berthing Basins
and Approaches
Security and Fire Protection for
Commercial Passenger Vessels
Mooring Dolphins and Dock Improvements
at Seward Marine Center
Community Library
Alutiiq Pride Shellfish Hatchery
Construction of New Water Storage Tank
CDQ Fishing Fleet Relocation Study
State Revenue Sharing
Shared Fishery Taxes
Total Department of Commerce, Community
and Economic Development
Department of Military and Veteran Affairs
Oct. 06 Southern Alaska Storm Disaster/Flood
State Homeland Security Program
Dec 09 Storm Surge
Total Department of Military and Veteran Affairs
Department of Environmental Conservation
Engineering of Water Tank and
Line Extension
Department of Revenue
Fish Taxes
Liquor Licenses
Commercial Passenger Vessel Tax 2008
Commercial Passenger Vessel Tax 2009
Commercial Passenger Vessel Tax 2010
Total Department of Revenue
Department of Natural Resources
Jesse Lee Home Stabilization and Repair
Department of Administration
PERS Relief
Department of Corrections
Community Jails Program 2009
Community Jails Program 2011
Total Department of Corrections
Department of Education and Early Development
Public Library Assistance
Alaska Energy Authority
Sea Life Center Heat Pump Project
Total State Financial Assistance
Major program
CITY OF SEWARD
Schedule of State Financial Assistance
Year Ended December 31, 2011
Exhibit P -1
831,388 863,912 994,694 9( 62,170)
PT- 2007 -1 1,000,000
January 1,State
104,845
December 31,
Total 2011 Share of
N/A
2011
Grant Grant Receivable Expendi-State Receivable
Number Award Deferred tures Receipts Deferred
N/A
08 -DC -411 $1,000,000 259,972 23,254 283,226
09 -DC -527 1,750,000 24,204 109,242 85,922 47,524
09 -DC -261 61,250 43,924 43,924
10 -DC -023 167,000 65,911 65,911
11 -DC -633 300,000 36,160 36,160
242,013
10 -DC -024 2,580,000 1,227,507 95,146 1,322,653
11 -DC -640 2,000,000 70,315 1,449,919 1,277,761 242,473
11 -DC -350 1,500,000 132,099 338,165 223,182 247,082
11 -DC -374 4,700,000 295,562 1,910,826 841,716 1,364,672
12 -DC -593 250,000 109,284 109,284
12 -RR -030 1,992,000 2,241 2,241
12 -DC -427 400,000 180,389 180,389
N/A 306,509 306,509 306,509
N/A 5,310 5,310 5,310
2,045,819 4,640,120 4,492,274 2,193,665
FEMA- AK- DR1669 250,000 43,567 16,338 59,905
09SHSP- GR34058 7,500 6,540 6,540
AK -10 -230 369,777 60,901 282,742 290,916 52,727
104,468 305,620 290,916 119,172
76911 99,200 164 23,554 23,718
N/A 599,451 599,451 599,451
N/A 20,950 20,950 20,950
N/A 713,178 60,323)60,323
N/A 771,065 771,065)183,188 587,877)
N/A 374,293 374,293 3( 74,293)
831,388 863,912 994,694 9( 62,170)
PT- 2007 -1 1,000,000 216,953 104,845 112,108
N/A 540,734 540,734 540,734
N/A 30,581 5,341)5,341
N/A 9,785 7,928 9,785 1,857)
5,341 13,269 9,785 1,857
PLA -11- 770 -67 6,500 6,500 6,500
7030017 - 406011 286,580 113,645 153,399 242,013 25,031
1,427,367 6,764,061 6,705,479 1,485,949
136
CITY OF SEWARD
Notes to the Schedules of Expenditures of Federal Awards
and State Financial Assistance
Year Ended December 31, 2011
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 ofAlaska Audit Guide and Compliance Supplement for State Single Audits.
2) Commercial Passenger Vessel Tax
The City has received a total of $771,065 in 2009 Commercial Passenger Vessel taxes, of which
587,877 is unspent as of December 31, 2011. The City also received $374,293 in 2010
Commercial Passenger Vessel taxes directly from the State, none of which has been expended. In
addition, $1,411,435 in Commercial Passenger Vessel Tax has been accrued as a receivable at
December 31, 2011, none of which has been expended.
137
This page left blank intentionally)
138
STATISTICAL
SECTION
CITY OF SEWARD
Statistical Section
This part of the City of Seward's comprehensive annualfinancial reportpresents 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 140
Table 2 Changes in Net Assets 141
Table 3 Fund Balances of Governmental Funds 143
Table 4 Changes in Fund Balances of Governmental Funds 144
Table 5 General Fund Revenues by Source 145
Table 6 General Fund Tax Revenues by Source 146
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 147
Table 8 Property Tax Levies and Collections 148
Table 9 Assessed and Estimated Actual Value of Taxable Property 149
Table 10 Principal Property Taxpayers 150
Table 11 Principal Taxable Sales by Line of Business 151
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 142
Table 13 Ratio of Net General Obligation Bonded Debt to Assessed Value and Net
Table 19 Demographic and Economic Statistics
General Obligation Bonded Debt per Capita 153
Table 14 Computation of Direct and Overlapping Bonded Debt 154
Table 15 Legal Debt Margin 155
Table 16 Ratio of Annual Debt Service Expenditures for General Obligation Debt to
164
Table 25 Miscellaneous Statistics
Total General Fund Expenditures 156
Table 17 Revenue Bond Coverage - Electric Enterprise Fund 157
Table 18 Revenue Bond Coverage - Harbor Enterprise Fund 158
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand
the environment within which the City's financial activities take place.
Table 19 Demographic and Economic Statistics 159
Table 20 Top 10 Public and Private Employers for 2009 160
Table 21 Full -Time Equivalent Employees by Fund 161
Table 22 Operating Indicators by Function 162
Table 23 Capital Asset Statistics by Function 163
Table 24 Property Value, Construction, and Bank Deposits 164
Table 25 Miscellaneous Statistics 165
139
Table 1
CITY OF SEWARD
Net Assets by Component
Last Nine Fiscal Years
accrual basis of accounting)
amounts expressed in thousands)
Note: GASB 34 conversion took place in 2003. Prior year net asset information is not available.
140
2003 2004 2005 2006 2007 2008 2009 2010 2011
Governmental Activities:
Invested in capital assets,
net of related debt 57,398 55,726 56,495 56,663 58,016 58,016 56,208 56,122 56,122
Restricted 3,730
Unrestricted 5,009 6,636 5,946 5,901 5,025 5,993 8,619 9,983 5,785
Total governmental activities
net amounts 62,407 62,362 62,441 62,564 63,041 64,009 64,827 66,105 65,637
Business -type Activities:
Invested in capital assets,
net of related debt 67,048 66,690 66,155 64,760 65,440 66,754 64,112 67,773 68,657
Restricted 16 700 2,111 3,465 1,388
Unrestricted 10,354 9,727 12,089 12,837 14,595 14,796 14,777 10,290 15,649
Total business -type activities
net assets 77,402 76,417 78,244 77,597 80,051 82,250 81,000 81,528 85,694
Primary government:
Invested in capital assets,
net of related debt 124,446 122,416 122,650 121,423 123,456 124,770 120,320 123,895 124,779
Restricted 16 700 2,111 3,465 5,118
Unrestricted 15,363 16,363 18,035 18,738 19,620 20,789 23,396 20,273 21,434
Total primary government
net assets 139,809 138,779 140,685 140,161 143,092 146,259 145,827 147,633 151,331
Note: GASB 34 conversion took place in 2003. Prior year net asset information is not available.
140
Expenses
Governmental activities:
General government
Public safety
Public works
Parks and recreation
Library
Healthcare facilities
Sealife Center
Unallocated interest
Total governmental activities expenses
Business -type activities:
Electric
Water
Wastewater
Harbor
Seward Marine Industrial Center
PSMCC
Parking
Total business -type activities expenses
Table 2
CITY OF SEWARD
Changes in Net Assets
Last Nine Fiscal Years
accrual basis of accounting)
2003 2004 2005 2006 2007 2008 2009 2010 2011
1,355, 573 1,731,427 1,770, 306
2,286,556 2,299,873 2,383,911
1,145,730 1,265,153 1,383,178
996,112 1,046,681 1,099, 556
316,679 358,364 367,077
247,052 440,997 468,703
1,839,836 1,804,367 1,028,302
466,382 371,982 432,438
8,653,920 9,318,844 8,933,471
5,926,703 6,419,925 6,863,724
1,346,099 687,542 760,363
706,332 705,508
2,441,498 2,282,991 2,402,810
1,541,608 1,591,311 1,521,930
75,983 95,209 112,013
11,331, 891 11,783,310 12,366,348
2,158,969
2,440,488
1,704,296
1,075,945
378,487
924,795
1,578,315
347,367
10,608,662
9,195,187
813,245
693,096
2,648,290
1,278,774
117,150
14,745,742
1,161,765
2,980,785
2,650,977
981,222
384,835
535,226
1,672,365
306,989
10,674,164
8,029,054
859,799
747,484
2,457,216
1,076,730
129,623
13,299,906
2,501,443 1,451,682
2,934,607 3,029,935
1,310,474 1,456,468
1,236,411 1,247,366
398,108 478,385
412,797 3,910,190
1,736,147 1,294,636
116,906 236,982
10,646,893 13,105,644
8,626,745 10,363,820
1,194,311 1,066, 860
901,759 916,909
3,006,069 3,934,866
1,149,453 990,466
119,723 118,309
14,998,060 17, 391,230
800,716
3,168,421
1,991,925
1,462,365
437,082
2,804,000
731,528
1,505,248
12,901,285
8,569,240
1,093,419
1,078,318
5,947,066
926,290
157,229
17,771, 562
2,031,590
3,140,921
1,988,748
1,395,705
466,300
51,939
173,993
9,249,196
10,493,512
1,230,833
1,044,654
3,676,190
1,081,862
20,416,615
205,407
38,149,073
Total primary government expenses $ 19,985,811 21,102,154 21,299,819 25,354,404 23,974,070 25,644,953 30,496,874 30,672,847 47,398,269
Program Revenues
Governmental activities:
Charges for services:
General government
Public safety
Public works
Parks and recreation
Library
Healthcare facilities
Operating grants and contributions
Capital grants and contributions
Total governmental activities
program revenues
Business -type activities:
Electric
Water
Wastewater
Harbor
Seward Marine Industrial Center
PSMCC
Parking
Operating grants and contributions
Capital grants and contributions
Total business -type activities
program revenues
Total primary government
program revenues
468,421 276,173 61,798 106,589 400,074 196,240 223,545 201,335 190,795
683,916 737,338 687,763 761,316 706,575 669,988 744,939 682,906 740,204
149,464 116,742 219,843 239,984 111,756 116,833 84,849 168,196 40,910
471,396 548,283 565,168 529,289 592,063 627,038 622,067 608,361 620,943
8,144 8,218 8,601 8,677 7,736 12,800 14,799 13,794 9,953
2,569,886 -
182,090 112,945 157,809 148,785 680,176 84,144 542,354 620,310 1,128,278
146,170 1,053,026 880,372 2,124,245 1,459,744 999,171 2,860,172 1,709,977 3,573,497
2,109,601 2,852,725 2,581,354 3,918,885 3,958,124 2,706,214 5,092,725 6,574,765 6,304,580
6,539,213 6,943,720 7,381,178 7,979,436 8,428,106 8,565,180 9,060,636 8,842,150 10,309,524
1,445,553 769,970 1,019,832 1,008,765 996,633 998,541 972,713 1,034,888 1,069,732
702,770 791,988 811,546 800,168 801,095 796,454 851,416 864,740
1,795,350 1,818,674 1,943,424 2,499,065 2,751,916 2,776,676 2,596,924 2,803,828 2,968,021
330,249 318,009 324,828 286,640 290,221 304,517 263,775 296,139 413,454
16,838,000
114,008 167,101 177,098 175,792 182,133 240,339 162,120 192,046 268,105
1,260,476 65,247 159,595 445,228 2,674,610 401,734
429,796 722,130 3,149,335 928,554 2,578,739 2,769,005 2,354,601 1,988,430 2,291,919
10,654,169 11,442,374 14,787,683 14,950,274 16,093,163 16,614,948 16,652,451 18,683,507 35,425,229
12,763,770 14,295,099 17,369,037 18,869,159 20,051,287 19,321,162 21,745,176 25,258,272 41,729,809
Net (expenses) /revenue:
Governmental activities $ (6,544,319) (6,466,119) (6,352,117) (6,689,777) (6,716,040) (7,940,679) (8,012,919) (6,326,520) (2,944,616)
Business -type activities (677,722) (340,936) 2,421,335 204,532 2,793,257 1,616,888 (738,779) 911,945 (2,723,844)
Total primary government net expense $ (7,222,041) (6,807,055) (3,930,782) (6,485,245) (3,922,783) (6,323,791) (8,751,698) (5,414,575) (5,668,460)
Note: GASB 34 conversion took place in 2003. Prior year net asset information is not available.
PSMCC is a new fund in 2011 previously reported as governmental fund and discreet component unit.
141
Table 2, continued
CITY OF SEWARD
Changes in Net Assets
Last Nine Fiscal Years
accrual basis of accounting)
continued
Business -type activities:
2003 2004 2005 2006 2007 2008 2009 2010 2011
General Revenues and Other Changes
116,165 323,821 650,078 651,763 640,277 184,566 149,288 203,129
Grants and entitlements
in Net Assets
713,178 771,065 720,040 1,41 1,435
Other 71,125
Governmental activities:
362,218 139,952 5,000
Transfers 816,854)857,313)
Taxes:
1,502,583)989,801) (912,319)1,466,933)1,258,053)1,290,998
Total business-type activities 606,297)718,593)593,864)
Sales tax $2,894,455 3,123,314 3,411,283 3,518,435 4,068,600 4,137,758 3,585,304 3,742,751 4,147,010
Property tax 670,297 973,948 802,539 864,906 862,258 943,832 986,473 960,397 999,737
Othertax 77,135 89,473 381,270 388,284 419,771 442,130 370,235 403,713 413,398
Grants and entitlements 462,249 324,452 339,074 388,766 538,799 1,354,871 670,761 753,653 1,346,755
Investment earnings 151,035 170,179 218,102 436,241 314,642 612,611 128,971 138,940 91,248
Other 4,754,704 882,501 287,018)1,622,052 347,281
Transfers 816,854 857,313 1,279,903 1,502,583 989,801 912,319 1,466,933 1,258,053 1,290,998)
NPO /OPEB 504,917
Total governmental activities 9826,729 6,421,180 6,432,171 6,812,197 7,193,871 8,908,438 8,830,729 7,604,788 5,707,150
Business -type activities:
Investment earnings 139,432 116,165 323,821 650,078 651,763 640,277 184,566 149,288 203,129
Grants and entitlements 713,178 771,065 720,040 1,41 1,435
Other 71,125 22,555 362,218 139,952 5,000
Transfers 816,854)857,313)1,279,903)1,502,583)989,801) (912,319)1,466,933)1,258,053)1,290,998
Total business-type activities 606,297)718,593)593,864)852,505)338,038) 581,088 511,302)383,725)2,905,562
Total primary government 9,220,432 5,702,587 5,838,307 5,959,692 6,855,833 9,489,526 8,319,427 7,221,063 8,612,712
Changes in Net Assets
Governmental activities $ 3,282,410 (44,939) 80,054 122,420 477,831 967,759 817,810 1,278,268 2,762,534
Business -type activities (1,284,019) (1,059,529) 1,827,471 (647,973) 2,455,219 2,197,976 (1,250,081) 528,220 181,718
Total primary government $ 1,998,391 (1,104,468) 1,907,525 (525,553) 2,933,050 3,165,735 (432,271) 1,806,488 2,944,252
Beginning Net Assets $ 137,884,486 139,882,877 138,778,409 140,685,934 140,160,381 143,093,431 146,259,165 145,826,894 148,386,437 **
Ending Net Assets 139882,877 138,778,409 140,685,934 140,160,381 143,093,431 146,259,166 145,826,894 147,633,382 151,330,689
Change in Net Assets $ 1,998,391 (1,104,468) 1,907,525 (525,553) 2,933,050 3,165,735 (432,271) 1,806,488 2,944,252
Note: GASB 34 conversion took place in 2003. Prior year net asset information is not available
Beginning net assets restated for PSMCC becoming a new fund in 2011.
142
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Fiscal Property
Year Tax
CITY OF SEWARD
General Fund Tax Revenues by Source
Last Ten Fiscal Years
Payments -
in- Lieu -of- Hotel/Motel
Sales Tax (1) Tax (2) Tax (3) Other (4)Tatal
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
2008 953,957 4,137,758 80,126 362,004 1,236 5,535,081
2009 975,687 3,585,304 84,922 285,313 1,329 4,932,555
2010 954,687 3,742,751 75,317 328,396 1,003 5,102,154
2011 1,001,020 4,147,010 78,574 334,824 1,821 5,563,249
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 capital costs.
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 only
3) The hotel /motel tax rate is 4 %.
4) Represents tax - related penalties and interest.
146
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
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
2008 3.12 4.50 0.00 0.50 8.12
2009 3.12 4.50 0.00 0.50 8.12
2010 3.12 4.50 0.00 0.50 8.12
2011 3.12 4.50 0.00 0.50 8.12
1) Includes Kenai Peninsula Borough only.
2) Kenai Peninsula Community College.
3) Seward /Bear Creek Flood Service Area created effective 2004.
Source: "Alaska Taxable, 2011"
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Table 11
CITY OF SEWARD
Principal Taxable Sales by Line of Business
December 31, 2011
1) Taxable sales for 2011 are $103,715,603. Source: Kenai Peninsula Borough EDD.
2) Total sales tax collected in 2011 is $4,026,605. Source: Kenai Peninsula Borough Finance
Department confirmation letter.
151
Percent of
FYI Taxable Total Taxable
Type of Business Sales (1)Sales (2)
Retail Trade 42,179,661 40.7%
Guiding Water 17,608,879 17.0%
Restaurant /Bar 10,879,860 10.5%
Hotel/Motel /Bed & Breakfast 10,816,703 10.4%
Public Administration 7,051,631 6.8%
Wholesale Trade 5,756,128 5.5%
Information 2,901,604 2.8%
Services 1,448,866 1.4%
Rental Residential Property 1,242,177 1.2%
Rental Commercial Property 745,304 0.7%
Other 3 3.0%
103,715,603 100%
1) Taxable sales for 2011 are $103,715,603. Source: Kenai Peninsula Borough EDD.
2) Total sales tax collected in 2011 is $4,026,605. Source: Kenai Peninsula Borough Finance
Department confirmation letter.
151
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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 2011"
153
CITY OF SEWARD
Ratio of Net General Obligation Bonded Debt to Assessed Value and
Net General Obligation Bonded Debt per Capita
Last Ten Fiscal Years
Table 13
Ratio of
Debt Net
Payable Bonded Net
Gross from Net Debt to Bonded
Fiscal Population Assessed Bonded Enterprise Bonded Assessed Debt per
Year 1)Value (2)#Debt (3)#Revenues #Debt #Value Capita
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 278,153 4,960 222 4,738 1.70%1,804
2008 2661 292,802 4,185 169 4,016 1.37%1,509
2009 2609 301,784 3,360 114 3,246 1.08%1,244
2010 2693 311,277 2,485 59 2,426 0.78%901
2011 2733 304,945 5,030 1,550 3,480 1.14%1,273
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 2011"
153
CITY OF SEWARD
Computation of Direct and Overlapping Bonded Debt
December 31, 2011
Jurisdiction
Direct:
City of Seward
Overlapping:
Kenai Peninsula Borough (KPB)
Net General
Obligation
Bonded Debt
Outstanding
3,480,000 (1)
33,909,545 (2)
37,389,545
Percentage
Applicable
to Seward
100%
5.1% (3)
Table 14
Amount
Applicable
to City of
Seward
3,480,000
1,723,326
5,203,326
1) Excluding general obligation bonds reported in the Enterprise Funds.
2) Source: KPB finance dept. Total $35,984,545 less Central Emergency Services unrelated to Seward.
3) Based on ratio of City of Seward assessed value (real and personal property = $304,945,471)
to total assessed value of the Kenai Peninsula Borough ($6,000,350,827)
Source: "2011 Alaska Taxable" p. 41, State of Alaska, and KPB main and supplemental tax rolls.
Note: Excludes State assessed values which are exempt from taxation at City and Borough level.
154
Table 15
CITY OF SEWARD
Legal Debt Margin
December 31, 2011
No debt limit mandated by law.
155
Table 16
CITY OF SEWARD
Ratio of Annual Debt Service Expenditures
for General Obligation Debt (1)
to Total General Fund Expenditures
Last Ten Fiscal Years
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. Includes General Fund only.
2) Total General Expenditures includes General Fund only beginning in 2011. Prior years included
Hospital Debt Service Fund which became a business -type activity in 2011.
156
Retirement
Past-Ratio of Debt
Service Total General Service to
Fiscal Cost Total Debt Expenditures General
Year Principal Interest Payments Service (1)2)Expenditures
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%
2008 738,999 217,444 470,573 1,427,016 10,784,695 13.23%
2009 787,695 195,299 596,907 1,579,901 11,162,373 14.15%
2010 838,386 168,653 529,778 1,536,817 10,404,004 14.77%
2011 100,477 75,547 631,278 807,302 9,838,614 8.21%
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. Includes General Fund only.
2) Total General Expenditures includes General Fund only beginning in 2011. Prior years included
Hospital Debt Service Fund which became a business -type activity in 2011.
156
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 1.30 times the
amount of the total annual debt service requirement.
157
CITY OF SEWARD
Revenue Bond Coverage
Electric Enterprise Fund
Last Ten Fiscal Years
Table 17
Debt Service Requirements (3)
Gross Net Revenue
Fiscal Revenues Operating Available for Coverage
Year 1)Expenses (2)Debt Service Principal Interest Total 4)
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
2008 8,920,730 6,396,886 2,523,844 205,000 175,825 380,825 6.63
2009 9,173,257 8,589,154 584,103 305,000 367,023 672,023 0.87
2010 8,903,337 6,854,897 2,048,440 315,000 353,586 668,586 3.06
2011 10,410,908 8,620,529 1,790,379 330,000 339,298 669,298 2.68
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 1.30 times the
amount of the total annual debt service requirement.
157
Table 18
CITY OF SEWARD
Revenue Bond Coverage
Harbor Enterprise Fund
Last Nine 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.
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.
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.
158
Debt Service Requirements (3)
Net
Revenue
Gross Operating Available
Fiscal Revenues Expenses for Debt Coverage
Year 1)2)Service Principal Interest Total 4)
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
2008 2,896,828 1,506,685 1,390,143 325,000 374,203 699,203 1.99
2009 2,632,937 1,903,985 728,952 340,000 356,540 696,540 1.05
2010 2,850,942 1,784,887 1,066,055 360,000 337,990 697,990 1.53
2011 3,017,003 1,961,689 1,055,314 385,000 318,459 703,459 1.50
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.
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.
158
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Principal Employers - Current and Nine Years Ago
Table 20
2011 2001
Name Rank Rank
State of Alaska (excludes University of Alaska)1 1
City of Seward 2 4
Providence Seward Medical & Care Center 3
Kenai Peninsula Borough School District 4 10
Safeway, Inc.5 8
Alaska Sealife Center 6 6
Ciri Alaska Tourism Corp 7 2
Seaview Community Services 8
Breeze Inn 9
Rays Waterfront Bar & Grill 10
Icicle Seafoods 5
United States Government 3
Resurrection Bay Tours 7
Cook Inlet Processing 9
Source: Alaska Department of Labor and Workforce Development, Research and Analysis
Data for 2002 not available; 2001 data is nearest available data.
160
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Table 24
CITY OF SEWARD
Property Value, Construction, and Bank Deposits
Last Ten Fiscal Years
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)
164
Commercial Construction Residential Construction
Total Real Number Number
Fiscal Property of Value of of Value of Bank
Year Value (1)Permits Permits Permits Permits Deposits
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
2008 229,373,700 14 903,500 16 1,928,879 60,821,068
2009 244,392,800 31 18,694,201 24 966,926 54,337,541
2010 242,037,200 36 4,376,321 15 941,261 57,426,000
2011 242,523,700 36 10,468,128 27 873,920 76,678,691
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)
164
Table 25
CITY OF SEWARD
Miscellaneous Statistics
December 3 i, 20 i i
Date of Incorporation June 1, 1912
Class Home Rule City
Form of Government Council / Manager
Area, Square Miles 22
Miscellaneous Operational Statistics:
25.00
Library - number of volumes 32,645
Fire Department - Number of volunteers 33
Sewer System - Maximum daily capacity (gallons)1,300,000
Water System - Maximum daily capacity (gallons)8,856,000
Electric System:
174
Miles of distribution lines 65
Miles of transmission lines 42
Harbor - Number of permanent slips 670
City Employees:
38
Regular Employees - Full -time equivalent 93.15
Temporary Employees - Full -time equivalent 12.45
Demographics:
6
School Enrollment, City of Seward (3)552
Unemployment Rate - Borough -Wide (1)9.4%
Population (2)2,733
Average annual earnings (4)40,275
Qualified Voters 1,829
Facilities and Services not included in the reporting entity:
Education:
Elementary School
Number of students enrolled 296
Number of teachers 25.00
Middle School
Number of students enrolled 82
Number of teachers 6.00
High School
Number of students enrolled 174
Number of teachers 11.50
Alaska Vocational Technical Center
Number of students served annually 1485
Number of teachers 38
Healthcare Facilities - a component unit of the reporting entity:
Providence Seward Medical & Care Center
Number of patient beds (6) combination of primary care & swing beds 6
Number of long -term care beds 40
Number of employees:
Exempt 16
Non - Exempt 122
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
165
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166
SINGLE AUDIT
SECTION
w
Ad
ao d
it 1
Auditing &Udards
Honorable Mayor and City Council
City of Seward, Alaska
McGuDRErALLIANCE I McilAr*
We have audited the financial statements of the governmental activities, the business -type activities,
each major fund, and the aggregate rgpaining fund information of tIN City of Seward, Alaska, as of and
for the year ended December 31, 2011 which collectively F)mprise the City of Seward's basic financial
statement and have issued our report thereon dated June 7, 2012. 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 operating account of the Providence Seward Medical and Care Center, as described in our
report on Oky of Seward's financial statements. The operating account of Providence Seward Medical
and Care Center was not audited in accordance with Government Auditing Standards.
Internal Control Over Financial Reporting
Management of City of Seward is responsible for establishing and maintaining effective internal
control over financial reporting. In planning and performing our audit, we considered' of
Seward'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 of Seward's internal control over financial
reporting. Accordingly, we do not express an opinion on the effectiveness of the City of Seward's
internal control over financial reporting.
A defreaeney -in imtTmO cmtrol emits when the &-Mgn or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or
combination of deficiencies, in interEd control, such that there is a reasonable possibility that a
material misstatement of the entity's financial statements will not be prevented, or detected and
corrected, on a timely basis.
167
V+' Street SUIT70= ` C 1
Honorable Mayor and City Council
City 4 Seward, Xaska.
Our consideration of internal control over financial reporting was for the limited purpose described in
the first paragraph of t1s section and was not designed to identify all deficiencies in internal control
over finar&al reporting that might be deficiencies, significant deficiencies, or material weaknessdR
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 of Seward's financial statements
are free of material misstatement, we performed tests of its compliance with certain provisions of
laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and
material effect on the determination of financial statement amounts. However, providing an opinion
on compliance wiJk 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 Payor and City Council, others within the entity, federal and state awarding agencies and,
if applicable, pass - through entities, and is not intended to be and should not be used by anyone other
than these specified parties.
Anchorage, Alaska
June 7, 2012
168
it
A91 b
NIcG eer e I ffMcGladreo
Independent Auditor's Report on Compliance with Requirements That Could Have a Direct and
Material Effect on 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, 2011. 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 zith 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 performi&g such
olker procedures as we oemsidwed necessary in the cireumvAaAft. We beltve thY ow 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, City of Seward complied, in all material respects, with the compliance requirements
referred to above that could have a direct and material effect on each of its major federal programs
for the year ended December 31, 2011.
169
a F , S 1 f • . °
TM mod. '
Honorable Mayor and City 4buncil
City of Seward, Alaska
Internal Control Over Compliance
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 fe&leral programs. In planning and performing our audit,e considered City of Seward's internal
control over compliance with the requirements that could hWle a direct and material effect on a maj%
federal program in order to determine our auditing procedures for the purpose of expressing our
opinion on compliance, and to test and r4port on i0ernal control over compliance in accordance with
OMB Circular A -133, 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 defic in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their
assigned functions, to pr (Rent, or detect and correct, noncompliance with a type of compliance
requirement of a federal program on a timely basis. A material weakness in internal control over
compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such
that there is a reasonable possibility that material noncompliance with a type of compliance
requirement of a federal program will not be prevented, or detected and corrected, on ,timely basis.
Our consideration of internal control over compliance was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be deficiencies, 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, others within the entity, federal awarding agencies, and pass -
through entities, and is not intended to be and should not be used by anyone other than these specified
parties.
Anchorage, Ala&a
June 7, 2012
170
MCGd DREY ALLOACE I McGladrey
1., c.
onsultam
Independeml Auditor's Report on Compliance with Requirements That Could Have a Direct and
Material Effect on Eash Major Program and on Intanal ContrW Over Compliance in Accordance with
the State ofAlaska 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, 2011. 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 aWlit of crnpliance in accordance with aahting standards gengally accepted in the
United States of America; the standards applicable to financial audits contained in Government Auditing
ndards issued by the Comptroller General of the United States; and the State ofAlaska Audit Guide
and Compliance Supplement for State Single Audits. Those standards and the State of Alaska Audit
Guide tWd 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
Ammination 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, 2011.
171
Honorable Mayor and olty Council
City of Seward, Alaska
Internal Control Over Compliance
Management of City of Seward is responsible for estabUshing and maintaining effective internal control
over compliance with the requirements of laws, regu aations, 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,
and to test and report on internal control over compliance in accordance with the State of Alaska Audit
Guide and Compliance Supplement for State Single Audits, 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.
k deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their
assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance
requirement of a state program on a timely basis. A material weakness in internal control over
compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such
that there is a reasonable possibility that material noncompliance with a type of compliance
requirement of a state program will not be prevented, or detected and corrected, on a timely basis.
Our consideration of internal control over compliance was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be deficiencies, 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, others within the entity, and the State of Alaska and is not
intended to be and should not be used by anyone other than these specified parties.
Anchorage, Alaska
June 7, iV ld
172
CITY OF SWARD
Schedule of Findings and Questiooipd Costs
Year Ended December 31, 2011
I. Summary of Auditor's Results
FinancAll Statements
Type of oditor's reprt issued
Internal control over financial reporting:
Material weakness(es) identified?
Significant deficiency(ies) identified?
Nqncompliance material to financial
statements noted?
Federal Financial Assistance
Interng control over major programs:
Material weakness(es) identified?
Significant deficiency(ies) identified?
Type of auditor's report issued on compliance
for rrig or programs?
Any audit findings disclosed that are required to
be reported in accordance with section 510(a) of
Circular A -133?
Identification Ef major programs:
CFDA
Agency Number
Environmenal Protection Agency 66.458
Department of Agriculture 10.904
Dollar threshold used to distinguish between
Type A and Type B programs:
Auditee qualified as low -risk auditee?
State Financial Assistance
InterniT control over major programs:
Material weakness(es) identified?
Significant deficiency(ies) identified?
yes X no
yes X none reported
0
0
0
Unqualified
yes X no
yes X none reported
yes X no
yes X no
yes X none reported
Unqualified
yes X no
Name of Federal Program or Cluster
Clean Water Loan (ARRA)
NRCS Flood Mitigation/Construction
300,000
X yes no
173
CITY OF SEWARD
Schedule of Findings and Questioned Costs, continued
Summary of Auditor's Results, continued
State FiogfcialAssistance, continued
Type of auditor's report issued on compliance
for major programs? Unqualified
Dollar threshold used to distinguish a state
major program? $100,000
I. FinanciM Statement Findings
None noted.
III. Federal Award Findings and Questioned Costs
None noted.
IV. State Aw d Fin ues ' nM Costs
None noted.
174
N *3 OMAIM RC
Summary Schedule of Pior Audit Findings
Year Ended December 31, 2011
Federal
There were no 10rior year audit findings.
State a&Alaska
There were no prior year audit findings.
175
CITY OF SEWAIND
Corrective Action Plan
Year Ended Decerlber 31, 2011
There are no current year fmdifts; therefore no corrective action plan is required.
176