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COMPREHENSIVE ANNUAL
FINANCIAL REPORT
Fiscal Year
Ended December 31, 2009
COMPREHENSIVE
ANNUAL FINANCIAL REPORT
of the
CITY OF SEWARD, ALASKA
For the Fiscal Year Ended
December 31, 2009
Willard Dunham
MAYOR
Phillip Oates
CITY MANAGER
Prepared by the Finance Department
Kristin M. Erchinger, CGFM, MPA
FINANCE DIRECTOR
CITY OF SEWARD
Comprehensive Annual Financial Report
Table of Contents
Exhibit Page
PART I-INTRODUCTORY SECTION
Table of Contents I-VI
Letter of Transmittal VII-XI
Certificate of Achievement for Excellence in Financial Reporting XII
List of Principal Officials XIII
Seward Citizens—Organizational Chart XIV
PART II- FINANCIAL SECTION
Independent Auditor's Report 1-2
Management's Discussion and Analysis 3-14
Basic Financial Statements
Government-wide Financial Statements:
Statement of Net Assets A-1 16
Statement of Activities A-2 17
Fund Financial Statements:
Governmental Funds:
Balance Sheet B-1 18
Reconciliation of Governmental Funds Balance
Sheet to Statement of Net Assets B-2 19
Statement of Revenues,Expenditures and Change in
Fund Balances (Deficit) B-3 20
Reconciliation of the Changes in Fund Balances of
Governmental Funds to Statement of Activities B-4 21
Statement of Revenues, Expenditures and Change in Fund
Balance-Budget and Actual - General Fund B-5 22
Proprietary Funds:
Statement of Net Assets C-1 23
Statement of Revenues, Expenses and Change in
Net Assets C-2 24
Statement of Cash Flows C-3 25-26
Statement of Fiduciary Net Assets D-1 27
Notes to Basic Financial Statements 29-54
I
CITY OF SEWARD
Comprehensive Annual Financial Report
Table of Contents, continued
Exhibit Page
PART II-FINANCIAL SECTION, continued
Supplementary Information
Nonmajor Governmental Funds:
Combining Balance Sheet E-1 56
Combining Statement of Revenues,Expenditures and
Change in Fund Balances (Deficit) E-2 57
Nonmajor Enterprise Funds:
Combining Statement of Net Assets F-1 58
Combining Statement of Revenues,Expenses and
Change in Net Assets F-2 59
Combining Statement of Cash Flows F-3 60-61
Internal Service Funds:
Combining Statement of Net Assets G-1 62
Combining Statement of Revenues,Expenses and
Change in Net Assets G-2 63
Combining Statement of Cash Flows G-3 64
General Fund:
Balance Sheet H-1 66-67
Schedule of Revenues, Expenditures and
Change in Fund Balance—Budget and Actual H-2 68-75
Special Revenue Funds:
Combining Balance Sheet I-1 78
Combining Statement of Revenues, Expenditures and
Change in Fund Balances I-2 79
Debt Service Funds:
Combining Balance Sheet J-1 82
Combining Statement of Revenues,Expenditures and
and Change in Fund Balances J-2 83
Capital Project Funds:
Combining Balance Sheet K-1 86
Combining Statement of Revenues,Expenditures and
Change in Fund Balances K-2 87
II
CITY OF SEWARD
Comprehensive Annual Financial Report
Table of Contents, continued
Exhibit Page
PART II- FINANCIAL SECTION, continued
Supplementary Information, continued
Enterprise Funds:
Electric:
Statement of Net Assets L-1 90-91
Statement of Revenues, Expenses and Change in Net Assets L-2 92
Statement of Cash Flows L-3 93
Schedule of Operating Expenses L-4 94
Schedule of Composition of Net Assets L-5 95
Schedule of Electric Capital Projects L-6 96
Water:
Statement of Net Assets u L-7 97
Statement of Revenues, Expenses and Change in Net Assets L-8 98
Statement of Cash Flows L-9 99
Schedule of Composition of Net Assets L-10 100
Wastewater:
Statement of Net Assets L-11 101
Statement of Revenues, Expenses and Change in Net Assets L-12 102
Statement of Cash Flows L-13 103
Schedule of Composition of Net Assets L-14 104
Harbor:
Statement of Net Assets L-15 105
Statement of Revenues, Expenses and Change in Net Assets L-16 106
Statement of Cash Flows L-17 107
Schedule of Composition of Net Assets L-18 108
Combining Schedule of Harbor Capital Projects L-19 109
Seward Marine Industrial Center:
Statement of Net Assets L-20 110
Statement of Revenues,Expenses and Change in Net Assets L-21 111
Statement of Cash Flows L-22 112
Schedule of Composition of Net Assets L-23 113
III
if
CITY OF SEWARD
Comprehensive Annual Financial Report
Table of Contents, continued
Exhibit Pageg
PART II-FINANCIAL SECTION, continued
Supplementary Information, continued
Enterprise Funds, continued:
Parking:
Statement of Net Assets L-24 114
Statement of Revenues,Expenses and Change in Net Assets L-25 115
Statement of Cash Flows L-26 116
Schedule of Composition of Net Assets L-27 117
Internal Service Funds:
Motor Pool:
Statement of Net Assets M-1 120
Statement of Revenues,Expenses and Change in Net Assets M-2 121
Statement of Cash Flows M-3 122
Schedule of Composition of Net Assets M-4 123
Compensated Annual Leave:
Statement of Net Assets M-5 124
Statement of Revenues, Expenses and Change in Net Assets M-6 125
Statement of Cash Flows M-7 126
Teen Council Agency Fund-
Schedule of Changes in Assets and Liabilities N-1 127
Capital Assets:
Schedule of Capital Assets 0-1 128
Schedule of Changes in Capital Assets 0-2 129
Schedule of Capital Assets by Function and Activity 0-3 130
Schedule of Changes in Capital Assets by Function and Activity 0-4 131
Schedule of Expenditures of Federal Awards P-1 132-133
Schedule of State Financial Assistance Q-1 134
Note to the Schedules of Expenditures of Federal Awards and
State Financial Assistance 135
IV
F CITY OF SEWARD
Comprehensive Annual Financial Report
Table of Contents, continued
Page
PART III—STATISTICAL SECTION
Table 1 Net Assets by Component 138
Table 2 Changes in Net Assets 139-140
Table 3 Fund Balances of Governmental Funds 141
Table 4 Changes in Fund Balances of Governmental Funds 142
7 Table 5 General Fund Revenues by Source 143
Table 6 General Fund Tax Revenues by Source 144
Table 7 Property Tax Rates 145
Table 8 Property Tax Levies and Collections 146
Table 9 Assessed and Estimated Actual Value of Taxable Property 147
Table 10 Principal Property Taxpayers 148
Table 11 Principal Taxable Sales by Line of Business 149
Table 12 Ratios of Outstanding Debt by Type 150
Table 13 Ratio of Net General Obligation Bonded Debt to Assessed Value
and Net General Obligation Bonded Debt per Capita 151
Table 14 Computation of Direct and Overlapping Bonded Debt 152
Table 15 Legal Debt Margin 153
Table 16 Ratio of Annual Debt Service Expenditures for General
Obligation Debt to Total General Fund Expenditures 154
Table 17 Revenue Bond Coverage—Electric Enterprise Fund 155
Table 18 Revenue Bond Coverage—Harbor Enterprise Fund 156
Table 19 Demographic and Economic Statistics 157
Table 20 Top 10 Public and Private Employers for 2009 158
Table 21 Full-Time Equivalent Employees by Fund 159
Table 22 Operating Indicators by Function 160
Table 23 Capital Asset Statistics By Function 161
Table 24 Property Value, Construction, and Bank Deposits 162
Table 25 Miscellaneous Statistics 163
PART IV- SINGLE AUDIT SECTION
Independent Auditor's Report on Internal Control Over Financial
Reporting and on Compliance and Other Matters Based on an
Audit of Financial Statements Performed in Accordance with
Government Auditing Standards 165-166
Independent Auditor's Report on Compliance with Requirements
Applicable to Each Major Program and on Internal Control Over
Compliance in Accordance with OMB Circular A-133 167-168
V
CITY OF SEWARD
Comprehensive Annual Financial Report
Table of Contents, continued
Page
PART IV- SINGLE AUDIT SECTION, continued
Independent Auditor's Report on Compliance with Requirements
Applicable to Each Major Program and on Internal Control Over
Compliance in Accordance with State of Alaska Audit
Guide and Compliance Supplement for State Single Audits 169-170
Schedule of Findings and Questioned Costs 171-172
Summary Schedule of Prior Audit Findings 173 7
Corrective Action Plan 174
VI
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May 21, 2010 gCAS
To the Citizens of the City of Seward:
It is with great pleasure that we present the City of Seward Comprehensive Annual Financial Report
for the fiscal year ended December 31, 2009. This report satisfies state statutes and local ordinances
which require that the City of Seward issue an annual report on its financial position and activity, and
that the report be audited by an independent firm of certified public accountants. Responsibility for the
accuracy of the data and the completeness and fairness of the presentation, including all disclosures,
rests with management. We believe the data as presented are accurate in all material respects. It is
presented in a manner designed to fairly set forth the financial position and results of operations of the
City as measured by the financial activity of the various funds. The financial statements were prepared
in conformance with generally accepted accounting principles. All disclosures necessary to enable the
reader to gain an understanding of the City's financial activities have been included.
The City's financial statements have been audited by Mikunda, Cottrell & Company, an independent
auditing firm of certified public accountants. The goal of an independent audit is to provide reasonable
assurance that the financial statements of the City are free of material misstatement. The independent
audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements; assessing the accounting principles used and the significant estimates made by
management; and evaluating the overall presentation of the financial statements. The independent
auditor concluded, based on the audit, that there was a reasonable basis for rendering an unqualified
opinion that the City's financial statements for the fiscal year ended December 31, 2009, are fairly
presented in conformity with GAAP. The independent auditor's report is presented in the financial
section of this report.
The independent audit of the financial statements of the City was part of a broader, federally mandated
Single Audit" designed to meet the special needs of federal and state granting agencies. The standards
governing Single Audit engagements require the auditor to report not only on the fair presentation of the
financial statements, but also on internal controls and compliance with certain legal requirements, with
special emphasis on internal controls and legal requirements involving the administration of federal and
state awards. These findings are presented in the Single Audit Section of this report.
GAAP requires that management provide a narrative introduction, overview, and analysis to accompany
the basic financial statements. Such narrative is presented in the form of a Management's Discussion
and Analysis (MD&A), which should be read in conjunction with this letter of transmittal. The City's
MD&A can be found immediately after the report of 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 2,609. 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.
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The City Manager is the administrative head of the City government, is appointed by the Council, and is
responsible to the Council for the proper handling of all City affairs. The City Clerk is also appointed
by the Council. The Clerk's primary responsibilities involve the safekeeping of public records and the
administration of City elections. The City Attorney is appointed by the Council. All other officers and
employees of the City are appointed by the City Manager. Appointments to the following positions are
made by the City Manager with approval of the Council: Manager of Electric Utility; Chief of Police;
Finance Director; and Fire Chief.
Budgetary Control
The City's budget serves as the foundation for financial planning and control. The City recently passed
its first Biennial Budget for the two year period commencing January 1, 2010 through December 31,
2011. The budget is passed for a two-year period, and adjustments to the budget can be authorized by
the City Council at any time. All departments will 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 first regular meeting in
October. The Council holds public hearings on the proposed budget and generally adopts the budget at
the last meeting in November. The City Manager is authorized to make transfers between departments
and line items within a Fund for amounts up to $50,000. Council action is required for transfers
between funds, for all single-item purchases exceeding $50,000, 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, the City's economy experienced slow, steady growth of approximately 6% per year over
the past ten years, as evidenced by growth in tax revenues fueled largely by tourism. In 2009 however,
tax revenues declined for the first time in years, with sales tax revenues alone declining by$552,454 (-
13.3%) from the prior year, and hotel/motel tax declining by $76,691 (-21.2%). The current economic
climate remains uncertain, but economic growth is expected to remain flat over the next two years.
While Alaska has fared far better than most states due to fewer mortgage foreclosures and more stable
property values, strong reliance on tourism is taking its toll on local businesses such as tour boat
operators, charter boat operators, restaurants, local businesses, and hotels/motels which rely on visitors
traveling to Seward from outside of Alaska. An increase in fuel prices such as was seen in 2008, and/or
an increase in unemployment, could have a substantial adverse impact on local citizens. Property tax
revenues continue to rise gradually after a decade of leveling off--on an inflation-adjusted basis -- due
to a Kenai Peninsula Borough full-scale property re-assessment in 2008. While the City of Seward has
only increased its property mill rate by 0.12 mills over the past two decades (equal to $24 on a home
valued at $200,000), an estimated 65% of property located within Seward is owned by non-taxable
government or non-profit entities, giving Seward a very low tax base on which to generate property tax.
The City's top ten property taxpayers have become more diverse over the past few years, but still lean
toward an over-dependence tourism-relatedontourism related businesses and the visitor industry. This group
represents various industries including retail sales, real estate, seafood processing, petroleum products,
hotel/motel, communications, and tourism. Seward's top ten sales tax lines of business show that the
bulk of sales taxes are generated from retail trade, followed by accommodations and food service, and
public administration. Seward's largest employers continue to reflect significant government presence,
including the state-owned prison and vocational technical center, federal forest and park service
agencies, the City, and the Borough school district. The hospital, long-term-care facility, and Alaska
Sealife Center are City-owned facilities run on the City's behalf by non-profit organizations, and they
round out the list of top employers. The largest private sector employers include Icicle Seafoods,
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Safeway, and CIRI Alaska tourism. Seward continues.to invest in infrastructure to encourage economic
development (harbor and parking improvements; new long-term care facility, waterfront park
improvements, street and sidewalk upgrades, pavilion construction, reliable electrical generation), and
in addition to local government investment, sees plans for major facility upgrades and expansion by
AVTEC, the park service, University of Alaska, and the Alaska Railroad.
Financial Condition
After five straight years of declining General Fund undesignated fund balance, 2009 saw a doubling of
the balance due to a one-time EXXON Valdez oil spill settlement of $1.6 million. This brings the
City's reserve levels in the General Fund to within the lower range of three to six months' expenditures
and transfers-out, and provides much more flexibility to the City in terms of meeting unexpected needs
and emergencies. Additional reserves are needed to improve the City's financial condition, since any
large unforeseen emergency, natural disaster, shortfall in hospital operations, shortfall in enterprise fund
resources, or sustained reduction in sales tax revenue and/or passenger fees, can have a significant
adverse impact on the City's ability to meet these needs and still cover annual debt service obligations.
Over the past ten years, municipal governments in Alaska have been adversely impacted by a significant
reduction in State funding. In the past three years however, the State legislature has provided revenue
sharing funds and assistance in funding retirement system liabilities. This has mitigated the need to
reduce services or increase property taxes to cover the shortfall. Seward's increased retail sales have
enabled the City to absorb a portion of the State funding reductions, but revenue sharing remains the
City's only current source of funding for General Fund capital needs, and a change in State policy on
funding retirement system rates above 22% could have a materially adverse financial impact on the
City.
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 was that enterprise funds experienced rate increases
across-the-board. Years of failing to pass along cost increases in the form of higher rates,has placed the
financial condition of the enterprise funds at risk. The recent rate increases are expected to help the
enterprise funds keep from falling further behind, but fall short of the level necessary to finance
replacement of existing deteriorated assets and infrastructure. 'While these rate increases are critical to
maintaining the health of each enterprise fund, they come at a cost to the users of City services, who are
concurrently struggling with the pressures of the current economic environment. In the future, it is
hoped that rate increases will cause less "rate shock" based on the City Council's decision to
incrementally raise rates annually based on the Anchorage consumer price index. This gradual
approach to rate increases is expected to keep pace with the increasing cost of goods and services, while
avoiding rate shock, and enable the harbor, parking, and utilities to plan for future capital infrastructure
needs.
Major Projects
The City completed construction of a new $27 million 40-bed long-term care facility in October, 2009.
This facility is expected to provide stable employment for many Seward residents, as well as to help
strengthen the continuity of care in Seward's healthcare system. A $7.5 million electric generator
replacement project is nearing completion, replacing two aging electric generators with a new building
to house the generators and their controls, and providing more consistent electric generation capability
when the community is cut off from purchased power. A recently replaced electric power line under
Lowell Point Road is expected to improve the reliability of power to the Lowell Point community. The
power line was threatened by a major storm event that caused shoreline erosion and damaged the road,
threatening the underground power line. A new security dock is planned for the northeast harbor area,
and the purchase of many dock components for that project is complete. The U.S. Army Corps of
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Engineers will repair design deficiencies to the harbor breakwater, extending the breakwater by more
than 200'. The Coast Guard building is slated for relocation to the northest harbor area, pending
approval of the governor's 2011 budget. The first phase of construction of the North Forest Acres
levee/road project is complete, as is purchase of all properties necessary to begin construction activities
on this project which has been in the works for more than ten years. When complete, this project will
provide increased flood protection to Seward's residential and industrial property owners to the south of
Resurrection River. A major road and sidewalk improvement project is slated for the next two years,
providing much-needed repairs to a number of locations throughout the community.
Cash Management Policies and Practices
The investment and collateralization of City funds is governed by Section 5.15 of the Seward City Code.
The ordinance clearly identifies safety as the primary concern in the selection and management of the
City's investments. The Seward City Code authorizes investment in obligations of the U.S. Treasury,
its agencies and instrumentalities, repurchase agreements, fully collateralized certificates of deposit,
high rated commercial paper, bankers' acceptances, and the Alaska Municipal League Investment Pool.
The City combines all cash into a Central Treasury, facilitating the investment of combined funds to
maximize investment earnings. Earnings on these investments are allocated monthly to participating
funds based on ending cash balances.
Risk Management
The City is a member of the Alaska Municipal League Joint Insurance Association (JIA), a government
insurance pool established by the Alaska Municipal League. The JIA provides the City's insurance
coverage for property, general liability, public officials and employees' liability, law enforcement
professional liability, and workers' compensation. The City also maintains special marine insurance
coverage and boiler and machinery insurance coverage with other insurance companies. This
specialized insurance is placed through JIA. The JIA provides loss control services and conducts
periodic inspections to ensure safe operations. The City maintains a safety committee charged with
reviewing and recommending safety policies and procedures for all departments. The City Council
designates a portion of the General Fund fund balance to meet potential insurance-related losses, and to
support higher deductibles to minimize insurance premiums.
Pension and Other Post-employment Benefits
The City provides pension benefits for all eligible employees through the State of Alaska Public
Employees Retirement System (PERS). 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 State coverage of costs exceeding 22%. The transition from a single-agent, multiple-
employer plan, to a pooled retirement plan, provides a single rate for all participating PERS employers,
eliminating the previous methodology of assessing each employer its own rate. Under the previous
scenario, the City of Seward's unfunded pension liability was in excess of$6.5 million. Under the new
plan structure, the City will not have its own unfunded pension liability per se, but will share in the
pooled liability of the PERS plan. The legislature's cap on local government contribution rates brings
stability to Seward's retirement rates, mitigating the recent trend of significant annual rate increases,
although it is important to note that a future State legislature can eliminate the State subsidy above 22%.
Eleven years ago, the General Fund contributed $194,666 toward funding retirement contributions. In
2009, that contribution was $1,120,800, of which $332,833 was paid by the State of Alaska, and
787,967 was paid by the City. This reflects a 475% increase, or an average annual increase of 43%.
X
Financial Reporting Award
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement for Excellence in Financial Reporting to the City of Seward for its
comprehensive annual financial report(CAFR) for the fiscal year ended December 31, 2008. This is the
fifteenth consecutive year that the City of Seward has received this prestigious award. In order to be
awarded a Certificate of Achievement, a government must publish an easily readable and efficiently
organized comprehensive annual financial report. This report must satisfy both generally accepted
accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a
period of one year only. We believe that our current comprehensive annual financial report continues to
meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to
determine its eligibility for another certificate.
Acknowledgments
Preparation of the 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 depaitalent who assisted and contributed to the preparation of this report. Credit also should be
given to the Mayor and the members of Council for their interest and support in planning and
conducting the operations of the City of Seward in a responsible and progressive manner.
Respectfully submitted,
Phillip Oa cs, City Manager Kristin Erchinger,Finance irector
r -,
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Seward
Alaska
For its Comprehensiveensive Annual
Financial Report
for the Fiscal Year Ended
December 31,2008
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports(CAFRs)achieve the highest
standards in government accounting
and financial reporting.
4.000....
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SEAL
tkrtSa .A President
fififir,Ar?..
Executive Director
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CITY OF SEWARD
LIST OF PRINCIPAL OFFICIALS
COUNCIL MEMBERS
Term Expires
Willard Dunham Mayor 2011
Jean Bardarson Vice Mayor 2010
Robert Valdatta Council Member 2011
Tom Smith Council Member 2011
Vanta Shafer Council Member 2011
Marianna Keil Council Member 2010
Linda Amberg Council Member 2010
ADMINISTRATION
Phillip Oates City Manager
Kirsten Vesel Assistant City Manager
Kristin Erchinger Finance Director
John Foutz Manager of Electric Utility
W.C. Casey Public Works Director
Kari Anderson Harbormaster
Tom Clemons Chief of Police
David Squires Fire Chief
Karin Sturdy Parks &Recreation Director
Patty Linville Library Director
Christy Terry Community Development Director
CITY CLERK
Jean Lewis City Clerk
ATTORNEY
Cheryl Brooking City Attorney, Wohlforth, Johnson, Brecht,
Cartledge &Brooking
The City of Seward is a home-rule city with a council-manager form of
government. Legislative powers of the City of Seward are vested in a council
consisting of a mayor and six council members. The mayor and each council
member are elected from the city at large. The term of office is two years.
The appointed officers of the city include the city manager, city clerk, and the
city attorney. The city council generally meets on the second and fourth
Mondays of each month in the City Council Chambers located in the City Hall
Building at 410 Adams Street in Seward, Alaska.
XIII
CITY OF SEWARD
Organizational Chart
Citizens
1
Mayor &
Council
Boards & I City Manager City Clerk City
Commissions ' Attorney
Planning &
Zoning ,
Port & 1Commerce Electric I 1 Public
Historic Utility Works
LP reservation
Police Finance Enginecringz &E Library
Building inspection
Harbor Fire Community Parks &
Development Recreation I
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i\fikunda RSM McGladrey Network
Cottrell Q' An Independently Owned Member
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CX Co., Inc.
Certified Public Accountants&Consultants Offices in Anchorage&Kenai
Independent Auditor's Report
Honorable Mayor and City Council
City of Seward, Alaska
We have audited the accompanying financial statements of the governmental activities,the business-type
activities, each major fund, and the aggregate remaining fund information of the City of Seward,Alaska,
as of and for the year ended December 31, 2009 which collectively comprise the City's basic financial
statements as listed in the table of contents. These financial statements are the responsibility of the City's
management. Our responsibility is to express opinions on these financial statements based on our audit.
We did not audit the financial statements of Providence Seward Medical Center, a component unit of the
City of Seward. Those financial statements were audited by other auditors whose report thereon has
been furnished to us, and our opinion, insofar as it relates to the amounts included for Providence
Seward Medical Center, is based on the report of the other auditors.
We conducted our audit in accordance with auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. The financial statements of Providence Seward Medical Center were not
audited in accordance with Government Auditing Standards. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and the significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinions.
In our opinion, based on our audit and the report of the other auditors, the financial statements referred
to above present fairly, in all material respects, the respective financial position of the governmental
activities, the business-type activities, the aggregate discretely presented component unit, each major
fund, and the aggregate remaining fund information of the City of Seward, Alaska as of December 31,
2009, and the respective changes in financial position and cash flows, where applicable, thereof and the
respective budgetary comparison for the General Fund for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
1
3601 "C" Street, Suite 600 * Anchorage, Alaska 99503 * (907) 278-8878 * Fax (907) 278-5779 * www.mcc-cpa.com
Honorable Mayor and City Council
City of Seward, Alaska
In accordance with Government Auditing Standards, we have also issued our report dated May 21,
2010 on our consideration of City of Seward's internal control over financial reporting and on our tests•
of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an opinion on the
internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be considered in assessing
the results of our audit.
The Management's Discussion and Analysis is not a required part of the basic financial statements but is
supplementary information required by the Governmental Accounting Standards Board. We have
applied certain limited procedures,which consisted principally of inquiries of management regarding the
methods of measurement and presentation of the required supplementary information. However, we did
not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Seward's basic financial statements. The accompanying Schedule of
Expenditures of Federal Awards, Schedule of State Financial Assistance, and the combining and
individual fund financial statements and schedules are presented for purposes of additional analysis and
are not a required part of the basic financial statements. The Schedule of Expenditures of Federal
Awards is required by the U.S. Office of Management and Budget Circular A-133, Audits of States,
Local Governments, and Nonprofit Organizations and the Schedule of State Financial Assistance is
required by the State of Alaska Audit Guide and Compliance Supplement for State Single Audits. Such
information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and in our opinion, is fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
The introductory section and statistical tables have not been audited by us and accordingly, we express
no opinion on them.
Anchorage, Alaska
May 21, 2010
L
2
CITY OF SEWARD
Management's Discussion and Analysis
December 31, 2009
As management for the City of Seward, we hereby offer readers of the City's Comprehensive Annual
Financial Report this narrative overview and analysis of the financial activities of the City of Seward for
the fiscal year ended December 31, 2009. In addition to this discussion and analysis, readers are
encouraged to read our letter of transmittal found on pages VII-XI of this report, which provides
additional summary information.
FINANCIAL HIGHLIGHTS
The assets of the City of Seward exceed liabilities by $145,826,894 at December 31, 2009. Of
this amount, $120,320,042 represents investment in capital assets net of debt, $2,110,512 is
restricted for capital purposes, and the remainder of $23,396,340 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.
Excluding business-type activities, the assets of the primary government exceeded liabilities at
the December 31, 2009 by $64,827,468. Of this amount, $8,618,995 in unrestricted net assets is
legally unreserved and available to meet the government's ongoing financial obligations,
although the Council has earmarked a portion of these funds for specific purposes.
The City's total net assets decreased by ($432,271). Governmental activities increased by
817,180 and business-type activities decreased by $1 250 081 .
The City's governmental funds reported combined ending fund balances of $7,353,383,
representing a decrease of($10,550,207) compared to the prior year. While $5,518,657 of the
fund balance is legally available for spending (unreserved fund balance), only $3,058,735 has
not already been earmarked for specific purposes (undesignated fund balance). This reflects an
increase in available undesignated fund balance of $1,384,809 or 82.7%, the bulk of which
resulted from the EXXON Valdez oil spill settlement proceeds of$1,622,052.
The total debt of the governmental activities increased by $51,021 or 0.17%, due to new capital
leases for fire vehicles ($516,842) and loaders ($430,420). The total debt of business-type
activities decreased by ($750,608) or(3.9%).
OVERVIEW OF THE FINANCIAL STATEMENTS
This Management Discussion and Analysis serves to introduce readers to the City of Seward's basic
financial statements, which includes the government-wide financial statements, the individual fund
statements, and notes to the financial statements. In addition to the basic financial statements, this
report also contains other required supplementary information. The basic financial statements include
two types of statements reflecting different views of the City's financial activities:
1.Government-wide financial statements summarize the City's overall financial condition and
contain both short-term and long-term information. This information is intended to present 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.
3
Government-wide Financial Statements
The government-wide financial statements are intended to provide a comprehensive look at all financial
activities of the City and are presented on the accrual basis of accounting, in a manner similar to a
business enterprise.
The Statement of Net Assets presents information on all of the City's assets less liabilities, resulting in
net assets. The purpose of this statement is to present the overall financial position of the City. Over
time, increases or decreases in net assets may demonstrate whether the City's financial position is
improving or deteriorating. There are other non-financial factors, such as the condition of public
facilities, the timely investment in roads and infrastructure, and the level of maintenance funding that
should be considered in evaluating the City's overall financial condition.
The Statement of Activities demonstrates how the City's net assets changed as a result of the current
year's activities. This statement is prepared on the accrual basis of accounting which is comparable to
private-sector businesses. Revenues and expenses are reported when the underlying event giving rise to
the change occurs, regardless of the timing of the related cash flows. Therefore, revenues and expenses
are reported in this statement for some items that will result in cash flows in future fiscal periods.
Both of the government-wide financial statements distinguish functions of the City of Seward that are j
principally supported by taxes and intergovernmental revenues (governmental activities) from other
functions that are intended to recover all or a significant portion of their costs through user fees and
charges (business-type activities). The governmental activities of the City of Seward include general
government, public safety, public works, parks and recreation, library, hospital and long-term care, and
the Alaska Sealife Center. The business-type activities of the City include harbor, marine industrial
center, electric, water, wastewater, and parking. The government-wide financial statements can be
found on pages 16-17 of this report.
Fund Financial Statements
A fund is a grouping of related accounts used to maintain control over resources that have been
segregated for specific activities or purposes. The City of Seward, like other state and local
governments, uses fund accounting to ensure and demonstrate compliance with legal requirements. The
funds of the City of Seward are divided into three categories: governmental funds, proprietary funds,
and fiduciary funds, each of which is further described below.
Governmental Funds
Governmental Funds are used to account for essentially the same functions reported as governmental
activities in the government-wide financial statements. However, unlike the government-wide financial
statements which provide a broad overview and include short-term and long-term information, the
governmental funds' finanicial statements focus on near-term inflows and outflows of spendable
resources, as well as on balances of spendable resources available at the end of the fiscal year. Such
information is useful in evaluating a government's near-term financing requirements.
However, because the focus of governmental funds is narrower than that of the government-wide
financial statements, it is useful to compare the information presented for governmental funds, with
similar information presented for governmental activities in the government-wide financial statements.
Such a comparison enables the reader to better understand the long-term impact of a government's near-
term financing decisions. Both the Governmental Funds Balance Sheet and the Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to
facilitate the comparison between governmental funds and governmental activities.
4
The City of Seward maintains twenty-one individual governmental funds. Information for the General
Fund, Long-Term Care Facility Capital Project and Flood Mitigation Capital Project 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 eighteen 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 22 to demonstrate compliance with the annual budget, and a list of budgetary
highlights can be found later in this document. The basic governmental fund financial statements can be
found on pages 18-22 of this report.
Proprietary Funds
The City of Seward maintains two types of proprietary funds; enterprise funds and internal service
funds. Enterprise funds are used to report the same functions identified as business-type activities in the
government-wide financial statements. The City uses enterprise funds to account for the harbor, Seward
Marine Industrial Center, electric utility, water utility, wastewater utility, and parking operations.
Information for each of these funds is presented in the individual fund statements found on pages 90-117
of this report.
Internal service funds are used to accumulate and allocate costs internally among the various functions
of the City. The City of Seward utilizes two internal service funds to account for its motor pool
equipment replacement program and its compensated annual leave resources. The equipment
replacement program benefits both the governmental and business-type functions. As a result, its
activities have been allocated among both the governmental and business-type activities in the
government-wide financial statements. Accrued leave that is earned in the governmental funds is
accounted for in the Compensated Annual Leave Internal Service Fund. Individual fund data for the
internal service funds can be found on pages 120-126 of this report.
Fiduciary Funds
Fiduciary funds account for resources held by the City in a trustee capacity, for the benefit of parties -
outside of the government. Fiduciary funds are not reflected in the government-wide financial
statements because the resources of those funds are not available to support programs of the City. The
accounting used for fiduciary funds is similar to that of governmental funds. The City utilizes a single
fiduciary fund, the Teen Council Agency Fund, and data for that fund can be found on page 127 of this
report.
Notes to the Basic Financial Statements
The notes provide additional information essential to a complete understanding of the data provided in
the government-wide and fund financial statements. The notes can be found on pages 29-54 of this
report.
Other Information
In addition to the basic financial statements and accompanying notes, this report presents certain
required supplementary information on the public employee's retirement system on pages 48-52 of this
report.
5
GOVERNMENT-WIDE FINANCIAL STATEMENTS
Statement of Net Assets
Over time, net assets may serve as a useful indicator of a government's financial position. At December
31, 2009, the City's assets exceeded liabilities by $145,826,894. A significant portion of the City's net
assets (82.5%) reflects its investment in capital assets, less any outstanding debt used to acquire those
assets. Capital assets are not liquid and are not available for future spending. Since the investment in
capital assets is reported net of related debt, it should be noted that the resources needed to repay this
debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate
these liabilities.
I
The following table provides a summary of the City's net assets:
Table 1
Statement of Net Assets
As of December 31,2009 and 2008
Governmental Business-Type
Activities - Activities Total
2009 2008 2009 2008 2009 2008
Current and other assets $ 10,449,004 24,831,581 19,922,994 24,459,263 30,371,998 49,290,844
Capital assets 87,444,285 76.033.031 82,831,999 80,242,353 170.276.284 156,275,384 ._
Total assets 97.893.289 100.864.612 102,754,993 104,701.616 200.648,282 205,566,228
Long-term liabilities
outstanding 31,667,877 31,584,331 18,872,239 19,633,137 50,540,116 51,217,468
Other liabilities 1.397,944 5.270.622 2.883.328 2,818.972 4,281.272 8.089.594
Total liabilities 33,065,821 36,854,953 21,755,567 22,452,109 54,821,388 59,307,062
Net assets:
Invested in capital assets,
net of related debt 56,208,473 58,016,403 64,111,569 66,753,957 120,320,042 124,770,360
Restricted 2,110,512 699,601 2,110,512 699,601
Unrestricted 8,618.995 5.993.256 14,777,345 14,795,949 23,396,340 20,789,205
Total net assets 64.827.468 64.009.659 80.999.426 82,249.507 145.826.894 146,259,166
At the end of 2009, the City of Seward is able to report positive balances in all three categories of net
assets, both for the government as a whole, as well as for its separate governmental and business-type
activities.
6
r
Statement of Activities
The City's total revenues and expenses for governmental and business-type activities are reflected in the
following table.
Table 2
Change in Net Assets
For the Years Ended December 31,2009 and 2008
Governmental Business-Type
Activities Activities Total
2009 2008 2009 2008 2009 2008
Revenues:
Program revenues:
Charges for services $ 1,690,199 1,622,899 13,852,622 13,686,348 15,542,821 15,309,247
Operating grants/
contributions 542,354 84,144 445,228 159,595 987,582 243,739
Capital grants/
contributions 2,860,172 999,171 2,354,601 2,769,005 5,214,773 3,768,176
General revenues:
Sales taxes 3,585,304 4,137,758 3,585,304 4,137,758
Property taxes 986,473 943,832 986,473 943,832
Payments in lieu of tax 84,922 80,126 84,922 80,126
Other 2,707,097 2,834,403 955,631 1,493,407 3,662,728 4,327,810
Total revenues 12,456,521 10,702,333 17,608,082 18,108,355 30,064,603 28,810,688
Expenses:
General government 1,451,682 2,501,443 1,451,682 2,501,443
Public safety 3,029,935 2,934,607 3,029,935 2,934,607
Public works 1,456,468 1,310,474 1,456,468 1,310,474
Parks, recreation, and
library 1,725,751 1,634,519 1,725,751 1,634,519
Healthcare facilities and
unallocated interest 4,147,172 529,703 4,147,172 529,703
Alaska Sealife Center 1,294,636 1,736,147 1,294,636 1,736,147
Electric 10,363,820 8,626,745 10,363,820 8,626,745
Water 1,066,860 1,194,311 1,066,860 1,194,311
Wastewater 916,909 901,759 916,909 901,759
Harbor 3,934,866 3,006,069 3,934,866 3,006,069
Seward Marine Industrial
Center 990,466 1,149,453 990,466 1,149,453
Parking 118,309 119,723 118,309 119,723
Total expenses 13,105,644 10,646,893 17,391,230 14,998,060 30,496,874 25,644,953
Increase (decrease) in net
assets before transfers (649,123) 55,440 216,852 3,110,295 (432,271) 3,165,735
Transfers 1,466,933 912,319 (1,466,933) (912,319)
Increase (decrease) in net
assets 817,810 967,759 (1,250,081) 2,197,976 (432,271) 3,165,735
Beginning net assets 64,009,658 63,041,900 82,249,507 80,051,531 146,259,165 143,093,431
Ending net assets 64,827,468 64,009,659 80,999,426 82,249,507 145,826,894 146,259,166
7
Governmental Activities
Governmental activities increased the City of Seward's net assets by $817,810, reflecting the only
growth in city-wide net assets. The following items are of particular note:
O Net assets would have experienced a decrease of$649,123 were it not for transfers in from other
funds of$1,466,933.
0 Capital and operating grants increased from the prior year by more than $2.3 million, due to the
Seward Mountain Haven long-term care facility construction, and the North Forest Acres
levee/road project.
o Sales tax revenues decreased by (-$552,454) or -13.3% from the prior year, as a result of the
decline in economic activity resulting from higher fuel prices and the nationwide recession.
e The City received one-time proceeds from settlement of the EXXON Valdez oil spill, in the
amount of$1,622,052. k
O The City does not generate sufficient tax revenues to cover depreciation on general government
assets. To replace capital assets in the future, the City will need to rely on external financing
sources such as grants, or incurring debt to finance construction.
The following graph reflects the revenues and expenses associated with each of the general
government's primary programs:
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Gen'1 Public Public Parks& Library Hospital Sealife Debt
Govt Safety Works Rec LTC Center interest
D Revenues El Expenses
Business-Type Activities
Business-type activities decreased the net assets of the City by (-$1,250,081), including adjustments for
Motor Pool Internal Service Fund activities. As is the case with governmental activities, a substantial
portion (79%) of the net assets is invested in capital assets. The increase in net assets is comprised of
the following:
S Net assets increased in only one enterprise fund; the Parking Enterprise Fund had an increase of
15,439. The other enterprise funds showed the following decreases in net assets: Water
Enterprise Fund (-$128,725); Harbor Enterprise Fund (-$123,208); Electric Enterprise Fund
277,095); Seward Marine Industrial Center (-$650,022); and Wastewater Enterprise Fund
175,381).
0 Allocations of the Motor Pool Internal Service Fund to the business-type activities added
88,911 to net assets.
8
The electric utility experienced a loss from operations of (-$942,897) due primarily to an
increase in power costs of $1,164,190 resulting from a rate increase from Chugach Electric
Association combined with significantly higher fuel costs which affected the entire State.
e The decrease in electric utility net assets of (-$277,095) comes also, from the transfer of
1,055,131 to other funds, primarily reflecting payments-in-lieu-of-tax and a general permit fee
of$300,000 to the General Fund. The negative earnings from operations totaled (-$942,897),
indicating that the electric fund rates were not sufficient to cover depreciation, even prior to
transfers to other funds. After payments for debt service and capital purchases associated with
the new backup generators and generator building, the electric utility ended the year with
negative cash flow of(-$4,228,765). The Electric Enterprise Fund (excluding associated capital
projects) experienced a reduction in unrestricted cash during the year of $1,768,242, drawing
down the original cash balance of $3,103,126 to $1,334,884. This reflects a level of cash
sufficient to cover only 1.4 months' of operating expenses and transfers-out. No cash was
invested in the depreciation reserve fund for the future replacement of capital assets. A rate
increase of 5% will be effective 1/1/2010 with an additional 5% rate increase effective 1/1/2011,
for a combined anticipated increase in operating revenues of$770,000.
The net decrease in water utility net assets of(-$128,725) results from a combination of a loss
from operations of (-$91,279), investment earnings of $29,529, other non-operating items
totaling $15,792, and net transfers-out of$82,767. Cash balances in the water utility increased
279,958 primarily due to receipts on a loan receivable of$180,755, resulting in a total ending
cash balance of$1,707,435.
O The net decrease in harbor enterprise net assets of (-$123,208) is due primarily to a loss from
operations of(-$429,803) as well as a $500,000 contribution to the US Army Corps of Engineers
to fund the City's matching portion of the breakwater construction project. The loss before
contributions and transfers of (-$188,762) includes cruise ship passenger tax proceeds in the
amount of $771,065. Excluding these funds --which are earmarked for use on cruise ship-
related projects -- the harbor would be able to fund much of its depreciation if it did not have
any long-term debt or contributions to other funds. In 2009 however, long-term debt principal
and interest payments totaled $702,872 and transfers between funds totaled $320,095, leaving no
cash to contribute to the depreciation reserve fund for the future replacement of capital assets.
The harbor ended the year with a net decrease in cash of(-$185,535) due to draw-down of funds
for construction activities and debt payments. Total cash stands at $3,263,986, with only
1,154,293 unrestricted, and the remainder restricted for bond reserves and capital projects.
The net decrease in Seward Marine Industrial Center net assets of(-$650,022) is due entirely to
depreciation costs ($642,521). With a loss from operations of$721,457, this Fund is unable to
fund any of its depreciation. When considering debt payments of$60,466, this fund requires
subsidies from the General Fund to cover all of its debt costs, as well as a portion of its
operating costs. In 2009, the General Fund transferred $140,230 to this Fund to cover the
deficit.
e The non-major funds experienced the following: increase in parking enterprise net assets of
15,439 and a decrease in cash of (-$18,712) due to the acquisition of two automated pay
stations and a temporary reduction in the daily parking rate to provide relief to visitors already
impacted from the national recession; and a net decrease in wastewater enterprise net assets of
175,381) and an increase in cash of$19,189.
9
ANALYSIS OF THE CITY'S FUNDS
Governmental Funds
The City of Seward's governmental funds focus on near-term inflows, outflows, and balances of
spendable resources. As such, you will not find long-term capital assets or long-term debt displayed
on the governmental funds' individual fund financial statements. This focus on near-term inflows
and outflows assesses whether the City is generating sufficient revenues in the current year to pay
for current-year obligations. However, it does not indicate whether there are sufficient funds
available to cover long-term operations. The level of unreserved fund balance is an important
indicator of the amount of net resources available for spending at the end of the year.
At the end of the year, the City of Seward's governmental funds reported combined ending fund
balances of $7,353,383. Of this amount, $1,834,726 has been legally reserved (reserved fund
balance) for inventory, prepaid expenses and notes receivable ($657,029) and to meet debt service
requirements ($1,177,697). An additional $2,459,922 has been designated as follows: $333,504 for
capital projects; $500,000 for hospital cash flow to cover anticipated short-term operating losses;
1,500,000 working capital to pay routine payables and payroll; and $126,418 for insurance
reserves. This leaves an undesignated fiend balance of$2,983,424 in the.General Fund and $75,311
in the non-major funds. The General Fund's fund balance must be able to meet unforeseen needs
and emergencies, as well as future spending needs. Industry standards suggest maintaining
undesignated fund balance reserves equal to between three and six months' expenditures and routine
transfers-out to other funds, and in the City of Seward's case, there is 3.2 month's reserves available,
up from 1.3 months' at the end of 2008 due, primarily, to the receipt of$1.6 million in EXXON
Valdez oil spill settlement proceeds. In the City's case, an adequate level of fund balance is
between $2.9 million and $5.8 million, which results in General Fund currently being in the low end
of its desired range of undesignated fund balance.
Fund balances in the governmental funds decreased by $10,550,207, representing a net increase in
the General Fund of $1,657,244, a net decrease of(-$12,095,124) in the Long-Term Care Project
due to near completion of the project, and a net decrease of(-$112,327) in the remaining non-major
governmental funds. This overall net increase in fund balance is due to the following:
General Fund revenues were $1,210,793 higher than expenditures, and after net transfers of
446,451, fund balance increased by $1,657,244. General Fund revenues came in
771,405 lower than budget; expenditures came in $607,402 (5.8%) lower than budget; and
when combined with net transfers-in of $446,451, fund balance increased by 40.3%. This
level of fund balance is within the lower limits of the City's fund balance policy and
improves the ability of the General Fund to meet unforeseen needs, emergencies, required
grant matches, deficits in other funds, and other potential shortfalls (e.g. Sealife Center
reserve shortfalls, healthcare facility losses).
Special revenue fund projects experienced a net decrease in fund balance of(-$308,996) due
primarily to the City-funded computer networking project.
The debt service funds experienced a net increase in fund balance of $114,437. The
Hospital Debt Service Fund receives income from a one percent sales tax dedicated to
healthcare-related expenditures, and investment income. In 2009, sales tax and investment
income exceeded debt principal and interest by $113,459. However, after accounting for a
500,000 contribution toward Hospital operating shortfalls, plus a $134,704 Hospital PERS
debt payment, this Fund's fund balance declined by -$521,245 to $542,015. This level of
reserves no longer meet the City's goal of meeting or exceeding the single highest year debt
10
service payments ($878,500) on the outstanding hospital bonds. This is the first year of the
Seward Mountain Haven Debt Service Fund which ends the year with a fund balance of
635,682, all of which is earmarked for repayment of $27 million long-term care facility
revenue bonds.
Capital projects experienced a net decrease in fund balance of more than $12.0 million, with
most of that due to expenditure of Long-Term Care Facility bond proceeds.
Proprietary Funds
The City of Seward maintains two types of proprietary funds; enterprise funds and internal service
funds. The City's six enterprise funds (harbor, electric, water, wastewater, parking, and marine
industrial center) report the same functions presented as business-type activities in the government-wide
financial statements, but the individual fund statements are presented in more detail. Enterprise funds
reported total net assets of$79.6 million, with $64.1 million invested in capital assets net of related debt,
leaving unrestricted net assets of approximately $13.4 million, and restricted assets of$2.1 million. Of
the unrestricted net assets, $7.6 million is in restricted cash (bond reserve funds, bond proceeds, etc.)
and not available for appropriation, and current liabilities total $3.8 million. More specific factors
influencing the net assets of the enterprise funds are addressed above in the discussion of the City's
business-type activities.
The City maintains two internal service funds; the motor pool and the compensated annual leave fund.
The Motor Pool Internal Service Fund accumulates cash for the replacement of the City's motor pool
and heavy equipment fleet. Departments contribute to the motor pool to purchase vehicles and annually
pay into the motor pool to forward-fund replacement of vehicles. This funding mechanism spreads the
costs of the vehicles over the life of the vehicle in each program's annual budget,-rather than to incur
costs as one-time expenses in the year of the vehicle/equipment purchase. The balance of unrestricted
cash in the motor pool at year-end is $826,601, reflecting a decline of -$269,087. The Motor Pool
maintains an outstanding loan due from the General Fund in the amount of approximately $1.26 million
related to the payoff of prior hospital PERS liabilities. The Compensated Annual Leave Fund
accumulates cash reserves to pay annual leave cash-outs for governmental funds. The balance of cash in
this fund at the end of 2009 is $432,065.
General Fund Budgetary Highlights
There were a number of modifications to the budget during the year, as described below:
a Overall, projected revenues were upward adjusted $2,142,158 during the year. This
primarily reflects the following: EXXON Valdez oil spill settlement proceeds of
1.622,052; insurance payment to rebuild sand shed•of $90,000; the State of Alaska
payment on-behalf of the City PERS costs exceeding 22% of covered payroll (totaling
332,833), and various grant revenues of$97,273.
a Expenditures were increased by $485,106, as follows: $332,833 to record on-behalf
retirement system payments; $25,000 to apply for a Tiger Grant for SMIC development;
7,367 for fire equipment; $30,000 for City Hall basement floor repairs; $15,000 for the
library earthquake film grant project; $4,300 for library catalog software; and the
remaining $70,606 in expenditures related to police overtime and DUI grants, historic
preservation grants, and other miscellaneous grants.
Transfers to other funds increased by a total of$132,842 during the year, reflecting the
following: $124,692 for sand shed reconstruction; and $8,150 for the library earthquake
movie. Transfers from other funds increased $25,000 to account for a transfer from the
Capital Acquisition Fund to pay for the Tiger Grant application for SMIC development.
11
General Fund revenues exceeded expenditures by $1,210,793, and after transfers between funds were
accounted for, there was a net increase in fund balance of$1,657,244. General Fund revenues came in
771,405 (6.5%) lower than budgeted with nearly all revenue categories failing to meet projections.
The following items came in under budget and are of particular note: sales tax revenues (-$544,696);
hotel/motel tax (-$89,687); investment income (-$180,689) due to historic low interest rates; and PERS
relief (-$68,533). Despite lower visitor numbers, recreation revenues missed budget projections by
9,688. Property tax revenues came in higher than budget by $50,687, as did payments-in-lieu-of-tax,
by $54,922. Raw fish tax and facility rents came in higher than budget by $57,356 and $35,821,
respectively.
General Fund Actual Highlights
Despite falling so far below budget, General Fund actual revenues ended the year higher than in 2008,
by $483,606, due to EXXON settlement proceeds. Sales tax revenues were $552,454 lower than the
prior year, and hotel/motel tax was down by $76,691. Despite the economic recession, building permit
revenues increased by $63,223, primarily due to government construction activity, and business license
activity was up $4,440. Investment income was down from 2008 actuals by $176,543, and
administrative charges to enterprise funds was down $86,014.
Due to the national recession and the adverse impacts being felt by state and local governments
throughout the nation, the administration made the decision early on in the year, to curb spending to the
degree possible. With that in mind, General Fund expenditures finished the year under budget by
607,402 with all departments coming in under budget except the city manager and contributions. The
largest savings came from delays in hiring, saving a total of $195,857 in salary and benefits. Lower
than expected fuel prices saved $73,137, and curbing education, training, and travel saved $67,420. By
delaying project spending, $83,734 in contracting and equipment rental costs were postponed, as was an
additional $76,301 in equipment and supplies. Delays in bidding banking services and credit card
processing saved $31,582 over what was budgeted. In addition to expenditures coming in under budget,
expenditures in 2009 were $108,454 (1.09%) lower than in 2008, primarily in the areas of general
government and public works.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
As of December 31, 2009, the City had $170,276,284 invested in capital assets net of accumulated
depreciation, representing an overall increase of$14,000,900 from the previous year.
Table 3
City of Seward Capital Assets
in thousands, net of depreciation)
Governmental Business-Type
Activities Activities Total
2009 2008 2009 2008 2009 2008
Land and improvements 5,432 5,399 17,484 17,484 22,916 . 22,883
Buildings 60,377 45,824 720 800 61,097 46,624
Improvements other
than buildings 10,399 2,505 51,594 54,594 61,893 57,099
Machinery and equipment 7,346 3,531 4,457 4,578 11,803 8,109
Construction in progress 3,890 18,774 8,677 2386 12,567 21,560
Total net capital assets $ 87.444 76.033 82,832 80.242 170.276 156,275
12
Additional information regarding the City of Seward's capital assets can be found in Footnote 4 on
pages 3 8-40.
Long-term Debt
As of December 31, 2009, the City had total debt outstanding of $50,242,490. Of this amount,
3,359,999 represents outstanding general. obligation bonds backed by the full faith and credit of the
City. General obligation bonds outstanding include the hospital, streets and sidewalks and community
center building and Seward Marine Industrial Center North Dock. An additional $42.0 million
represents revenue bonds backed by operating revenues from the harbor enterprise fund ($7.63 million),P Y P g P
electric enterprise fund ($7.38 million), and long-term care facility ($27 million). The remaining debt
represents an outstanding capital equipment lease on fire department air packs, fire/rescue vehicles,
loaders, water and wastewater loans, and compensated absences.
Table 4
City of Seward Outstanding Debt
in thousands)
Governmental Business-Type
Activities Activities Total
2009 2008 2009 2008 2009 2008
General obligation bonds 3,246 4,015 114 169 3,360 4,184 .
Revenue bonds 27,000 27,000 15,000 15,645 42,000 42,645
Capital leases 811 46 811 46
Loans 3,487 3,545 3,487 3,545
Compensated.absences 432 377 152 145 584 522
Total outstanding debt 31.489 31.438 18353 19.504 50.242 50.942
Further detail regarding the City's long-term outstanding debt can be found on pages 41-47.
Economic Factors and Next Year's Budget and Rates
The City has prepared its first Biennial Budget for the two-year period commencing January 1, 2010 and
ending December 31, 2011. The budget was prepared in a period of economic uncertainty, coming off
one of the worst recessions in decades. The local economy was spared much of the stress on households
impacted by the sub-prime mortgage market, but the local construction industry experienced slowdowns
and uncertainty. Local businesses impacted by tourism were especially hard hit by reduced visitor
numbers in 2009. This slowdown in visitor traffic had a significant impact on local tour boat and
charter boat operators, hotels and beds-and-breakfasts, downtown businesses, restaurants, and ancillary
businesses which depend on visitors to generate summer income. In terms of City revenues, the
reduction in tourism adversely impacted sales tax, hotel/motel tax, and passenger fee revenues.
The 2010/2011 Biennial Budget was developed with the expectation that the downturn in the economy
will endure over the next two years, requiring temporary measures aimed at `weathering the storm'. If
economic conditions point to a persistent and extended retraction, service levels will be evaluated in the
next biennial budget cycle.
The budget aims to maintain current service levels in the face of economic uncertainty and reduced
revenues. To that end, there are no proposed changes to local tax rates over the next two years.
Expenditures are reduced by 3.3% in 2010 and increased by 1.8% in 2011, with the decrease in costs
spread among all General Fund service areas with the exception of debt service. Revenues are expected
to decline 5.7% in 2010, and an additional 0.8% in 2011.
13
The 2010/2011 Biennial Budget focused attention on the City's enterprise fund operations. To address
growing deferred maintenance and capital infrastructure needs, the enterprise operations developed five-
year plans which identified their most critical, high-risk, and moderate-risk needs. Based on the
outcome of numerous enterprise fund rate review work sessions, tariff changes were enacted to increase
enterprise fund rates so as to prevent further erosion of enterprise fund health. Those tariff changes are
as follow:
Harbor moorage and dockage rates increased 2.8% in 2010 and 3.1% in 2011.
Thereafter, rates will increase annually based on the average of the five previous full
years' Anchorage consumer price index ("CPI").
o Electric rates increased 5% in 2010 and an additional 5% in 2011. Thereafter, rates will
increase annually based on the average of the five previous full years' Anchorage CPI.
Future rate increases from Chugach Electric Association will automatically pass through
to customers. The industrial rate class was eliminated as it was providing unsustainable
subsidies to industrial customers. In place of industrial rates, short-term special
contracts are aimed at encouraging new business development.
o Water rates increased 4.8% in 2010 and 5.1% in 2011, with annual rate increases
thereafter based on the average of the five previous full years' Anchorage CPI.
0 Wastewater rates increased 4.8% in 20.10 and 5.1% in 2011, with annual rate increases
thereafter based on the average of the five previous full years' Anchorage CPI.
The City faces a number of challenges in the coming years. The rising costs of.healthcare, a growing
list of deferred maintenance needs, minimal levels of General Fund and enterprise fund reserves,
uncertain impacts of healthcare reform, potential hospital losses, demand for increased public
infrastructure (library/museum, levee/road, new City shop) and economic uncertainty, will continue to
impact already-scarce City resources. The City's roads and sidewalks are in need of significant repair,
and grant funding is anticipated to cover some of those near-term costs.
On a bright note, the biggest challenge facing the City's General Fund over the past few years has been
the inadequate level of undesignated fund balance equal to only 1.3 months' worth of annual operating
expenditures and transfers to other funds. However, in 2009, proceeds from the EXXON Valdez oil
spill settlement helped to increase the reserves to meet the City's minimum band of between three and
six month's reserves. Given Seward's history of unforeseen events (such as floods and avalanches), as
well as the uncertain financial future of the Alaska Sealife Center and the uncertainty of hospital
financial performance, it is important to continue to build adequate reserves. In addition, for more than
a decade the City has failed to identify a reliable funding source for capital repair, replacement, and
improvement, relying instead on unbudgeted supplemental appropriations or one-time revenues to fund
capital needs. To maintain financial health and resiliency, the City must maintain sufficient reserves,
identify a consistent revenue stream to fund ongoing capital repairs and maintenance, and curb
unanticipated draws from the General Fund's fund balance. These factors were considered in preparing
the City's budget for 2010/2011 Biennial Budget, and a long-term financial plan is needed to develop
viable solutions to these problems.
Requests for Information
The City of Seward's financial statements and the accompanying information are designed to present
users (citizens, taxpayers, elected officials, customers, investors, and creditors) with a general overview
of the City's finances, and to demonstrate accountability to taxpayers and ratepayers. Questions
concerning information in this report, or requests for additional information, can be addressed to the
City of Seward, Attn: Finance Director, P.O. Box 167, Seward, Alaska 99664.
14
BASIC FINANCIAL STATEMENTS—OVERVIEW
These financial statements provide a summary overview of the financial position and results of
operations of all funds of the City, aggregated at the government-wide and the major fund level. The
following statements are included in this section:
Statement of Net Assets
Statement of Activities
Governmental Funds -Balance Sheet
Reconciliation of Governmental Funds Balance Sheet to Statement of Net Assets
Governmental Funds - Statement of Revenues, Expenditures and Change in Fund
Balances
Reconciliation of the Changes in Fund Balances of Governmental Funds to Statement of
Activities
General Fund - Statement of Revenues, Expenditures and Change in Fund Balance -
Budget and Actual
Proprietary Funds - Statement of Net Assets
Proprietary Funds - Statement of Revenues,Expenses and Change in Net Assets
Proprietary Funds - Statement of Cash Flows
Statement of Fiduciary Net Assets
Notes to Basic Financial Statements
15
Exhibit A-1
CITY OF SEWARD
Statement of Net Assets
December 31,2009
Component
Unit 1 '
Providence
Primary Government Seward
Governmental Business-type Medical i
Assets Activities Activities Total Center
Cash and investments 8,593,436 4,881,043 13,474,479 122,000
Receivables,net of allowance
for doubtful accounts:
Taxes 507,751 507,751
Accounts 203,044 952,747 1,155,791 1,788,000
Assessments,due within one year 13,451 13,451
Grants,shared revenues,and loans 253,001 1,527,500 1,780,501
Accrued interest 136,160 136,160
Note receivable-PSMC 192,000 10,000 202,000
Other 655,458 35,948 691,406 99,000.
Prepaid items 456,974 456,974 19,000
Inventories 8,055 967,932 975,987
Restricted cash and investments 2,619,962 7,630,686 10,250,648 764,000
Unamortized bond issuance costs 438,747 219,077 657,824
Assessments,due after one year 69,026 69,026
Internal balances 3,615,584)3,615,584
Capital assets not being depreciated 9,322,609 26,160,949 35,483,558
Capital assets being depreciated 78,121,676 56,671,050 134,792,726 53,000 _
Total assets 97,893,289 102,754,993 200,648,282 2,845,000
Liabilities
Accounts payable 657,555 1,539,506 2,197,061 287,000
Accrued payroll and related liabilities 140,246 67,528 207,774 807,000
Accrued interest 435,412 145,728 581,140
Other accrued liabilities 65,427 65,427 1,264,000
Funds held in trust 30,330 30,330
Customer deposits 216,086 216,086
Unearned revenue 68,974 914,480 983,454 31,000
Noncurrent liabilities:
Due within one year:
Accrued leave 108,616 37,953 146,569 i
Notes payable 154,051 154,051
Bonds payable 819,905 730,094 1,549,999
Capital lease obligations 196,513 196,513 22,000
Due in more than one year:
Accrued leave 323,449 113,856 437,305
Notes payable 3,333,322 3,333,322
Bonds payable,net of bond premium and deferred loss 29,604,663 14,502,963 44,107,626
Capital lease obligations 614,731 614,731 38,000
Other liabilities 128,000
Total liabilities 33,065,821 21,755,567 54,821,388 2,577,000
Net Assets
Invested in capital assets,net of related debt 56,208,473 64,1 11,569 120,320,042
Restricted for capital projects and bond retirement 2,110,512 2,110,512
Unrestricted 8,618,995 14,777,345 23,396,340 268,000
Total net assets 64,827,468 80,999,426 145,826,894 268,000
i
Total liabilities and net assets 97,893,289 102,754,993 200,648,282 2,845,000
See accompanying notes to basic financial statements.
16
Exhibit A-2
CITY OF SEWARD
Statement of Activities
Year Ended December 31,2009
Net(Expense)Revenue and
Program Revenues Changes in Net Assets
Component
Primary Government Unit -
Fees, Providence
Fines& Operating Capital Business- Seward
Charges for Grants& Grants& Governmental type Medical
Functions: Expenses Services Contributions Contributions Activities Activities Total Center
Governmental activities:
General government $ 1,451,682 223,545 110,061 137,298 980,778) 980,778)
Public safety 3,029,935 744,939 63,024 1,737,192 (484,780) 484,780)
Public works 1,456,468 84,849 60,787 1,310,832) 1,310,832)
Parks and recreation 1,247,366 622,067 57,540 350,000 (217,759) 217,759)
Library 478,385 14,799 73,147 390,439) 390,439)
Healthcare facilities • 3,910,190 177,795 635,682 (3,096,713) 3,096,713)
Sea Life Center 1,294,636 1,294,636) 1,294,636)
Unallocated interest 236,982 236,982) 236,982)
Total governmental
activities 13,105,644 1,690,199 542,354 2,860,172 (8,012,919) 8,012,919)
Business-type activities:
Electric 10,363,820 9,060,636 19,627 1,968,952 685,395 685,395
Water 1,066,860 972,713 15,984 78,163) (78,163)
Wastewater 916,909 796,454 11,842 108,613) (108,613)
Harbor 3,934,866 2,596,924 394,883 385,649 557,410) (557,410)
SMIC 990,466 263,775 2,892 723,799) (723,799)
Parking 118,309 162,120 43,811 43,811
Total business-type
activities 17,391,230 13,852,622 445,228 2,354,601 738,779) (738,779)
Total primary
government $ 30,496,874 15,542,821 987,582 5,214,773 (8,012,919) (738,779) (8,751,698)
Component unit-Providence
Seward Medical Center $ 14,411,000 14,619,000 24,000 232,000
General revenues:
Taxes:
Sales taxes 3,585,304 3,585,304
Property taxes 986,473 986,473
Other taxes 285,313 285,313
Payment in lieu of taxes 84,922 84,922
Grants and entitlements not
restricted to a specific purpose 670,761 771,065 1,441,826
Investment income 128,971 184,566 313,537
Exxon Valdez settlement 1,622,052 1,622,052
Other 1,000
Contributions from primary government 500,000
Transfers 1,466,933 (1,466,933)
Total general revenues and transfers 8,830,729 (511,302) 8,319,427 501,000
Changes in net assets 817,810 (1,250,081) (432,271) 733,000
Net assets(deficit)at beginning of year 64,009,658 82,249,507 146,259,165 (465,000)
Net assets at end of year 64,827,468 80,999,426 145,826,894 268,000
See accompanying notes to basic financial statements.
17
Exhibit B-1
CITY OF SEWARD
Governmental Funds
Balance Sheet
December 31,2009
Major Funds
Flood
Mitigation LTC Facility Total
Capital Capital Nonmajor Governmental
Assets General Project Project Funds Funds
Cash and investments 6,388,474 946,296 7,334,770
Receivables,net of allowance for doubtful accounts:
Taxes 507,751 507,751
Accounts 203,044 203,044
Grants and shared revenues 1,100 111,302 140,599 253,001
Other receivables 655,458 655,458
Accrued interest 69,755 69,755
Note receivable-PSMC 192,000 192,000
Prepaid items 456,974 456,974
Inventory 8,055 8,055
Due from other funds 209,519 209,519
Restricted cash and investments 1,973,360 129,348 • 2,102,708
Total assets 10,010,032 111,302 . 129,348 1,742,353 11,993,035
Liabilities and Fund Balances
Liabilities:
Accounts payable 391,449 36,844 87,209 48,982 564,484
Accrued payroll and related liabilities 140,246 140,246
Accrued liabilities 65,427 65,427
Accrued interest 78,262 - - 78,262
Funds held in trust 30,330 30,330
Due to other funds 99,477 110,042 209,519
Deferred revenue 73,379 13,937 87,316
hiterfund loans payable 3,464,068 3,464,068
Total liabilities 4,243,161 136,321 87,209 172,961 4,639,652
Fund balances:
Reserved:
Inventory and prepaids 465,029 465,029
Note receivable-PSMC 192,000 192,000
Debt service 1,177,697 1,177,697
Unreserved:
Designated:
Working capital 1,500,000 1,500,000
Insurance 126,418 126,418
Hospital line of credit 500,000 500,000
Capital Project Funds-capital improvements 42,139 291,365 333,504
Undesignated,reported in:
General Fund 2,983,424 2,983,424
Special Revenue Funds 100,330 100,330
Capital Project Funds(deficit) 25,019) 25,019)
Total fund balances 5,766,871 25,019) 42,139 1,569,392 7,353,383
Total liabilities and fund balances 10,010,032 111,302 129,348 1,742,353 11,993,035
See accompanying notes to basic financial statements.
18
Exhibit B-2
CITY OF SEWARD
Reconciliation of Governmental Funds Balance Sheet
to Statement of Net Assets
December 31, 2009
Total fund balances for governmental funds 7,353,383
Total net assets reported for governmental activities in the
Statement of Net Assets is different because:
Capital assets used in governmental activities are not
financial resources and therefore are not reported
in the funds. These assets,net of accumulated Internal
depreciation consist of: Governmental Service
Land 5,432,289
Construction in progress 3,672,313 218,007
Buildings 79,817,699
Improvements other than buildings 24,196,171
Machinery and equipment 11,556,985 4,229,564
Accumulated depreciation 39,443,377) (2,235,366)
Total capital assets 85,232,080 2,212,205 87,444,285
Other long-term assets are not available to pay for current
period expenditures and therefore are deferred in the funds. 18,342
Governmental funds report the effect of bond issuance costs
when debt is first issued, whereas these amounts are
deferred and amortized in the Statement of Net Assets.438,747
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 2,585,074
Less amount reported with capital assets 2,212,205)
Plus amount reported with long term liabilities 1,224,869
1,597,738
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 30,245,875)
Accrued interest on bonds 347,603) 9,547)
Capital leases payable 27,987) (783,257)
Accrued leave 432,065)
Unamortized bond premium 376,468)
Unamortized deferred loss on refunding 197,775
Total long term liabilities 30,800,158) (1,224,869) (32,025,027)
Total net assets of governmental activities 64,827,468
See accompanying notes to basic financial statements.
19
Exhibit B-3
CITY OF SEWARD
Governmental Funds
Statement of Revenues,Expenditures and Change in Fund Balances (Deficit)
Year Ended December 31,2009 7 '
Major Funds
Flood LTC Total
Mitigation Facility Govern- f
Capital Capital Nonmajor mental
General Project Project Funds Funds
Revenues:
Taxes 4,932,555 4,932,555
Licenses and permits 214,966 214,966
Intergovernmental 1,576,765 1,662,713 667,673 3,907,151.
Charges for services 2,553,480 2,553,480
Exxon Valdez settlement 1,622,052 1,622,052 i
Fines and bails 11,836 11,836
Investment income 50,311 77,241 1,419 128,971
Other 119,032 696,078 815,110
Total revenues 11,080,997 1,662,713 77,241 1,365,170 14,186,121
Expenditures:
Current:
General government 2,832,531 653,401 3,485,932
Public safety 3,035,499 1,662,713 76,392 4,774,604
Public works 1,576,983 41,092 1,618,075
Parks and recreation 1,215,442 393,515 1,608,957
Library 422,017 41,410 463,427
Healthcare facilities 12,172,365 12,172,365
Debt service:
Principal payments 102,695 685,000 787,695
Retirement benefits 596,907 596,907
Interest and other costs 88,130 107,169 195,299
Other services and charges 500,000 500,000
Total expenditures 9,870,204 1,662,713 12,172,365 2,497,979 26,203,261
Excess of revenues over
under) expenditures 1,210,793 12,095,124) (1,132,809) (12,017,140)
Other financing sources (uses):
Transfers in 1,766,867 1,180,186 2,947,053
Transfers out 1,320,416) 159,704) (1,480,120)
Net other financing
sources (uses) 446,451 1,020,482 1,466,933
Net change in fund balances 1,657,244 12,095,124) (112,327) (10,550,207)
Beginning fund balances (deficit) 4,109,627 (25,019) 12,137,263 1,681,719 17,903,590
Ending fund balances (deficit) $ 5,766,871 25,019) 42,139 1,569,392 7,353,383
See accompanying notes to basic financial statements.
20
Exhibit B-4
CITY OF SEWARD
Reconciliation of the Changes in Fund Balances of Governmental Funds
to Statement of Activities
Year Ended December 31, 2009
Net change in fund balances -total governmental funds 10,550,207)
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$13,137,874 exceeded
depreciation and loss on asset disposals of$2,777,385. 10,360,489
Revenues in the Statement of Activities that do not provide current
financial resources are not reported as revenues in the funds. This
is the increase in other long-term assets. 9,456
Governmental funds report the effect of bond issuance costs
when debt is first issued,whereas these amounts are
deferred and amortized in the Statement of Activities. 19,719)
Issuance of long-term debt provides current financial resources to
governmental funds, while the repayment of the principal of the
long-term debt consumes financial resources in governmental funds.
In addition, interest on long-term debt is not recognized under the
modified accrual basis of accounting until due,rather than as it accrues.
This adjustment combines the net change in these balances:
General obligation bond payments 769,906
Amortization of deferred loss on refunding 49,445)
Bond premium 16,920
Capital lease payments 17,790
Decrease in accrued interest on bonds 7,762
762,933
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. 254,858
Change in net assets of governmental activities 817,810
See accompanying notes to basic financial statements.
21
Exhibit B-5
CITY OF SEWARD
General Fund
Statement of Revenues, Expenditures
and Change in Fund Balance - Budget and Actual
Year Ended December 31, 2009
Variance
Original Final Positive
Budget Budget Actual Negative)
Revenues:
Taxes 5,462,000 5,462,000 4,932,555 529,445)
Licenses and permits 215,623 215,623 214,966 657)
Intergovernmental 1,164,635 1,594,741 1,576,765 17,976)
Charges for services 2,540,786 2,521,486 2,553,480 31,994
Fines and bails 17,000 17,000 11,836 5,164)
Exxon Valdez settlement 1,712,052 1,622,052 90,000)
Investment income 231,000 231,000 50,311 180,689)
Other 79,200 98,500 119,032 20,532
Total revenues 9,710,244 11,852,402 11,080,997 (771,405)
Expenditures:
Current:
General government 2,928,746 3,007,487 2,832,531 174,956
Public safety 3,159,492 3,293,858 3,035,499 258,359
Public works 1,586,230 1,644,397 1,576,983 67,414
Parks and recreation 1,236,146 1,244,637 1,215,442 29,195
Library 394,812 422,373 422,017 356
Debt service:
Principal payments 156,322 156,322 102,695 53,627
Retirement benefits 439,807 617,587 596,907 20,680
Interest and other costs 90,945 90,945 88,130 2,815
Total expenditures 9,992,500 10,477,606 9,870,204 607,402
Excess of revenues over
under) expenditures 282,256) 1,374,796 1,210,793 164,003)
Other financing sources (uses):
Transfers in 1,734,226 1,759,226 1,766,867 7,641
Transfers out 1,405,865) (1,538,707) (1,320,416) 218,291
Net other financing sources (uses) 328,361 220,519 446,451 225,932
Net change in fund balance 46,105 1,595,315 1,657,244 61,929
Beginning fund balance 4,109,627
Ending fund balance 5,766,871
See accompanying notes to basic financial statements.
22
Exhibit C-1
CITY OF SEWARD
Proprietary Funds
Statement of Net Assets
December 31,2009
Enterprise Funds
Total Internal
Major Funds Nonmajor Enterprise Service
Assets Electric Water Harbor SMIC Funds Funds Funds
Current assets:
Cash and investments 1,334,884 1,565,841 1,154,293 18,918 807,107 4,881,043 1,258,666
r Receivables:
Accounts 727,146 73,545 138,580 36,522 81.009 1,056,802
Accrued interest 66,405
Assessments 2,096 7,069 4,286 13,451
Interfund loans 15,138 15,138 61,392
Grants and loans 594,510 932,990 1,527,500
Other 35,948 35,948
Less allowance for doubtful accounts 73,858) (5,192) (19,100) 5,905) (104,055)
Inventory 898,327 69,605 967,932
v_Total current assets 2,939,681 2,305,378 2,211,049 55,440 882,211 8,393,759 1,386,463
Noncurrent assets:
Restricted cash and investments 5,191,579 141,594 2.109,693 187,820 7,630,686 517,254
Assessments receivable,net of current portion 17,927 31,810 19,289 69,026
Deferred charges-unamortized debt issuance costs 128,006 91,071 219,077
Notes receivable-PSMC 10,000 10,000
Interfund loans,net of current portion 384,676 1,973,360 _ - 2,358,036 1,195,565
Property,plant and equipment:
Total capital assets not being depreciated 6,267,405 384,275 7,022,329 12,021,821 465,119 26,160,949 218,007
Total capital assets being depreciated 45,788,948 8,354,776 24,402,561 41,132,868 12,253,810 131,932,963 4,229,564
Less accumulated depreciation 29,203.837) (3.671,131) (8.919,631) (26,358.011) (7,109,303) (75,261,913) (2,235,366)
Total noncurrent assets 28,584,704 7,214,684 24.725.312 26,796,678 5,797,446 93,118,824 3,925,024
Total assets 31,524,385 9,520,062 26,936,361 26,852,118 6,679,657 101,512,583 5,311.487
Liabilities and Net Assets
Current liabilities:
Accounts payable 736,792 609,850 164,680 2,323 25,861 1,539,506 93,071
Accrued payroll and.related liabilities 32,438 5,868 20,962 1,888 6,372 67,528
Accrued interest 30,047 74,607 40,199 310 565 145,728 9,547
Current portion:
Accrued annual leave 17,375 3,475 13,968'3,135 37,953 108,616
Bonds payable 315,000 360,000 55,094 730,094
Notes payable 95,636 58,415 154,051
Capital lease obligation 178,033
lnterfund loans 20,088 20,088
Customer deposits 173,931 42,155 216,086
Deferred revenue 20,087 869,665 24,728 914,480
Total current liabilities 1,325,670 789,436 1,531,717 84,343 94,348 3,825,514 389,267
Noncurrent liabilities,net of current portion:
Accrued annual leave 52,124 10,424 41,903 9,405 113,856 323,449
Bonds payable 7,060,000 7,265,000 59,030 14,384,030
Unamortized bond premium 75,247 121,096 196,343
Notes payable 3,151,559 181,763 3,333,322
Unamortized deferred loss on refunding 77,410) 77,410)
Capital lease obligation 605,224
lnterfund loans 145,975 145,975
Total noncurrent liabilities 7.187.371 3,161,983 7,496,564 59,030 191.168 18,096,116 928,673
7
Total liabilities 8,513,041 3,951,419 9,028,281 143,373 285,516 21,921,630 1,317,940
Net assets:
Invested in capital assets,net of related debt 15,402,269 1,820,725 14,836,573 26,682,554 5,369,448 64,111,569 1,428,948
Restricted for capital projects and bond retirement 677,911 1,432,601 2,110,512
Unrestricted 6.931.164 3,747,918 1,638,906 26,191 1,024,693 13,368,872 2,564,599
Total net assets 23,011,344 5,568,643 17.908.080 26,708,745 6,394,141 79,590,953 3,993,547
Total liabilities and net assets 31,524,385 9,520,062 26,936,361 26.852,118 6,679,657 5,311,487
Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds 1,408,473
Net assets of business-type activities 80,999,426
See accompanying notes to basic financial statements.
23
Exhibit C-2
CITY OF SEWARD
Proprietary Funds
Statement of Revenues,Expenses and Change in Net Assets
Year Ended December 31,2009
Enterprise Funds
Total Internal
Major Funds Nonmajor Enterprise Service
Electric Water Harbor SM1C Funds Funds Funds
Operating revenues:
Charges for services 9,060,636 972,713 2,596,924 263,775 958,574 13,852,622
Vehicle rental and interfund
charges 901,276
Total operating revenues 9,060,636 972,713 2,596,924 263,775 958,574 13,852,622 901,276
Operating expenses:
Salaries and benefits 198,064 265,439 883,859 89,093 329,584 1,766,039 389,083
Services and supplies 6,030,592 359,364 633,932 176,519 275,856 7,476,263
Administration 2,360,498 224,280 386,194 77,099 158,849 3,206,920
Depreciation 1,414,379 214,909 1,122,742 642,521 285,423 3,679,974 223,124
Total operating expenses 10,003,533 1,063,992 3,026,727 985,232 1,049,712 16,129,196 612,207
Earnings(loss)from operations (942,897) (91,279) (429,803) (721,457) (91,138) (2,276,574) 289,069
Nonoperating revenues(expenses):
Intergovernmental 19,627 15,984 394,883 2,892 11,842 445,228
Investment income 112,621 29,529 36,013 1,080 5,323 184,566 72,180
Interest expense 336,590)192) (361,088) (5,234)4,332) (707,436) (18,878)
Commercial passenger vessel tax 771,065 771,065
J.
Gain on disposition of capital assets 1,693
Other expenses 43,677) 43,677) 295)
Breakwater design 500,000) 500,000)
Dredging 99,832) 99,832)
Net nonoperating revenues
expenses) 248,019) 45,321 241,041 1,262)12,833 49,914 54,700
Earnings(loss)before contributions,
transfers and special item 1,190,916) (45,958) (188,762) (722,719) (78,305) (2,226,660) 343,769
Capital contributions • 1,968,952 385,649 2,354,601
Transfers in 140,230 140,230
Transfers out 1,055,131) (82,767) (320,095) (67,533) (81,637) (1,607,163)
Change in net-assets 277,095) (128,725) (123,208) (650,022) (159,942) (1,338,992) 343,769
Beginning net assets 23,288,439 5,697,368 18,031,288 27,358,767 6,554,083 3,649,778
Ending net assets 23,01 1,344 5,568,643 17,908,080 26,708,745 6,394,141 3,993,547
Adjustment to reflect the consolidation of internal
service fund activities related to enterprise funds 88,911
Change in net assets of business-type activities 1,250,081)
See accompanying notes to basic financial statements.
24
Exhibit C-3
CITY OF SEWARD
Proprietary Funds
Statement of Cash Flows
Year Ended December 31,2009
Enterprise Funds
Total Internal
Major Funds Nonmajor Enterprise Service
Electric Water Harbor SMIC Funds Funds Funds
Cash flows from operating activities:
Receipts from customers and users $ 9,123,470 968,025 2,666,943 264,343 954,379 13,977,160
Payments-to suppliers 6,673,315) (361,076) (1,157,137) (219,458) (272,242) (8,683,228) 295)
Payments to employees 1,046,939) (254,375) (821,742) (85,396) (324,008) (2,532,460) (333,623)
Payments for interfund services used 812,986) (224,280) (386,194) (77,099) (158,849) (1,659,408)
Receipts from interfund charges 901,276
Net cash flows from operating
activities 590,230 128,294 301,870 (117,610) 199,280 1,102,064 567,358
Cash flows from noncapital financing activities:
Transfers in 140,230 140,230
Transfers out 1,055,131) (82,767) (320,095) (67,533) (81,637) (1,607,163)
Nonoperating intergovernmental revenues 2,106 245,737 247,843
Net cash flows from noncapital
financing activities 1,055,131) (80,661) (74,358) 72,697 (81,637) (1,219,090)
Cash flows from capital and related financing activities:
Principal payments on long-term debt 305,000) 340,000) (55,094) (57,584) (757,678) (164,005)
Interest payments on long-term debt 329,301) 362,872) (5,372) (4,466) (702,011) (9,331)
Acquisition of property,plant and
equipment 5,456,369) (13,464) (495,285) (3,240) (300,039) (6,268,397) (235,117)
Capital contributions received 2,027,005 35,505 38,737 2,101,247
Proceeds from sale of capital assets 11,150
Received on notes and loan receivable 105,000 180,755 239,600 525,355
Interfund loan payments 19,040)19,040)
Commercial passenger vessel tax receipts 729,400 729,400
Net cash flows from capital and
related financing activities 3,958,665) 202,796 (449,060) (63,706) (122,489) (4,391,124) (397,303)
Cash flows from investing activities:
Investment income received 180,419 29,529 36,013 1,080 5,323 252,364 75,288
Interfund loan receipts 14,382 14,382 58,284
Net cash flows from investing
activities 194,801 29,529 36,013 1,080 5,323 266,746 133,572
Net increase(decrease)in cash
and investments 4,228,765) 279,958 (185,535) (107,539) 477 (4,241,404) 303,627
Beginning cash and investments 10,755,228 1,427,477 3,449,521 126,457 994,450 16,753,133 1,472,293
Ending cash and investments 6,526,463 1,707,435 3,263,986 18,918 994,927 12,511,729 1,775,920
Reconciliation of cash and investments
to statement of net assets:
Current assets 1,334,884 1,565,841 1,154,293 18,918 807,107 4,881,043 1,258,666
Restricted assets 5,191,579 141,594 2,109,693 187,820 7,630,686 517,254
6,526,463 1,707,435 3,263,986 18,918 994,927 12,511,729 1,775,920
See accompanying notes to basic financial statements.
25
Exhibit C-3,continued
CITY OF SEWARD
Proprietary Funds
Statement of Cash Flows,continued
Enterprise Funds
Total Internal
Major Funds Nonmajor Enterprise Service
Electric Water Harbor SMIC Funds Funds Funds
Reconciliation of earnings(loss)from
operations to net cash provided(used)
by operating activities:
Earnings(loss)from operations 942,897) (91,279) (429,803) (721,457) (91,138) (2,276,574) 289,069
Adjustments to reconcile earnings(loss)
from operations to net cash flows from
operating activities:
Depreciation 1,414,379 214,909 1,122,742 642,521 285,423 3,679,974 223,124
Amortization of debt issuance costs 8,425 5,929 14,354
Other nonoperating expenses 43,677) -599,832)643,509) (295)
Noncash expense-PERS relief 19,627 13,878 49,314 2,892 11,842 97,553
Increase(decrease)in allowance for
doubtful accounts 34,072 2,192 (5,488)2,564 33,340
Increase)decrease in assets:
Receivables 139,963 (6,880) 12,637 (4,534) (6,759) 134,427
Prepaid expenses 9,950 4,187 14,137
Inventory 5,348) (4,886) 10,234)
Increase(decrease)in liabilities:
Accounts payable 46,470 3,174 70,698 (42,939)573) 76,830
Accrued payroll and related liabilities 13,343 967 1,669 805 1,141 17,925
Accruedannualleave 7,124 (3,781) 11,134 7,407)7,070 55,460
Customer deposits 42,056) - 41,220 836)
Deferred revenue 69,145) - 21,650 5,102 42,393)
Net cash flows from
operating activities 590,230 128,294 301,870 (1 17,610) 199,280 1,102,064 567,358
See accompanying notes to basic financial statements.
26
Exhibit D-1
CITY OF SEWARD
Fiduciary Funds
Statement of Fiduciary Net Assets
December 31, 2009
Teen
Council
Agency
Fund
Assets
Cash and investments 41,715
Prepaid expenses and other 150
Total assets 41,865
Liabilities
Accounts payable 2,004
Due to Teen Council 39,861
Total liabilities 41,865
See accompanying notes to basic financial statements.
27
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28
CITY OF SEWARD
Notes to Basic Financial Statements
December 31,2009
1) Summary of Significant Accounting Policies
Reporting Entity
The City of Seward, Alaska (the City) was incorporated June 1, 1912 as a home-rule city and operates
under a Council-Manager form of government. The City provides the full range of municipal services
as provided for by Alaska Statute. This includes police and fire protection, electric, water and
wastewater services, library,parks and recreation,public improvements, planning and zoning, port and
harbor, and general administrative services.
The accompanying financial statements present the City of Seward (the primary government) and its
component unit, Providence Seward Medical Center (the Medical Center), an entity for which the City
is considered to be financially accountable. The discretely presented component unit is presented in a
separate column in the government-wide financial statements to emphasize that it is legally separate
from the City.
The City has evaluated the criteria used to determine the proper classification of a separate legal entity
as a component unit. While the City does not appoint the Board of the Medical Center, the City can
impose its will by terminating the management agreement with 90 days' written notice. The City
demonstrates financial benefit by ownership of the healthcare facilities and assets, and the entity has
operated for decades under City ownership. The City demonstrates financial burden by paying all debt
payments associated with the component unit, reflecting a combination of general obligation bonds
obligating the full faith and credit of the City, and revenue bonds obligating revenues from the Medical
Center. The City pays for all capital costs of the healthcare facilities and is legally obligated to finance
potential deficits of the component unit. Due to the strong fiscal dependence and corresponding
financial benefit and/or burden, it would be potentially misleading to exclude the component unit from
the City's books.
Providence Seward Medical Center is owned by the City of Seward and is managed by Providence
Health & Services — Washington (a Washington nonprofit corporation) (the Corporation). The
Corporation operates a number of healthcare institutions in Washington,Alaska,Montana, Oregon, and
California.
Effective May 1, 2003, the City and the Corporation signed a management and operating agreement
the Agreement) whereby all financial risks and rewards from the operations of the Medical Center
accrue to the City, and the Corporation is the manager of the Medical Center. Until October 1, 2009,
the City leased the Wesley Care Center located adjacent to the hospital, for the purpose of providing
long-term care services, and it was operated as part of the Medical Center. Effective October 1, 2009,
the lease with Wesley Care Center was terminated and the Medical Center moved into the newly
constructed Seward Mountain Haven replacement facility. All property, including the facilities, are
owned by the City and are recorded on the City's books, and the cost of such property is not charged to
the Medical Center. The Medical Center rents certain equipment from the Corporation.
In 2008, the Agreement was amended such that the Medical Center pays only for directly identifiable
administrative costs and overhead costs, up to a specified limit, attributable to the Medical Center. In
2009, the City transferred $500,000 to the Medical Center to offset operating losses resulting from the
delay in opening the new long-term care facility.
29
CITY OF SEWARD
Notes to Basic Financial.Statements, continued
Summary of Significant Accounting Policies, continued
Reporting Entity, continued
In connection with the construction and operation of Seward Mountain Haven, the City will.receive
additional reimbursement from Medicaid through a capital add-on rate. The City and the Medical
Center have agreed on a formula to set aside funds related to the estimate of incremental annual capital
reimbursement expected to be received for the operation of the Seward Mountain Haven facility.
Based on this formula, amounts will be calculated and transferred from the Medical Center to the City,
for the purpose of repaying revenue bond debt service payments. In 2009, $635,682 has been recorded
for this purpose.
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 surrimary of the more significant
policies:
The government-wide financial statements (i.e., the statement of net assets and the statement of
activities) report information on all of the nonfiduciary activities of the primary government and its
component unit. In general, the effect of interfund activity has been removed from these statements to
minimize the double-counting of internal activities. Governmental activities, which normally are
supported by taxes and intergovernmental revenues, are reported separately from business-type
activities, which rely primarily on fees and charges to external parties.
The statement of activities demonstrates the degree to which the direct expenses of a given function or
segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a
specific function or segment. Program revenues include 1) fees, fines and charges to customers or
applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a
given function or segment and 2) grants and contributions that are restricted to meeting the operational
or capital requirements of a particular function or segment. Taxes, investment income and other items
not properly included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary
funds, even though the latter are excluded from the government-wide financial statements. Major
individual governmental funds and major individual enterprise funds are reported as separate columns
in the fund financial statements.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide and proprietary fund financial statements are reported using the economic
resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned
and expenses are recorded when a liability is incurred, regardless of the timing of the related cash
flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and
similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider
have been met. The Agency Fund also uses the accrual basis of accounting.
Governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both
measurable and available. Revenues are considered to be available when they are collectible within the
current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the
30
CITY OF SEWARD
Notes to Basic Financial Statements,continued
Summary of Significant Accounting Policies,continued
Measurement Focus,Basis of Accounting, and Financial Statement Presentation, continued
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.
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 Flood Mitigation Capital Project Fund accounts for all activities related to the construction of
the Japanese Creek Levee Project.
The Long-term Care (LTC) Facility Capital Project Fund accounts for all activities related to the
construction of Seward Mountain Haven,the City's long-term care facility.
Major Proprietary Funds:
The Electric Enterprise Fund accounts for all activities related to the operation of the City's electric
utility.
The Water Enterprise Fund accounts for all activities related to the City's water system.
The Harbor Enterprise Fund accounts for the marine-related activities of the City's harbor.
The Seward Marine Industrial Center (SMIC) Enterprise Fund accounts for marine-related
services on the east side of Resurrection Bay.
The City also reports two Internal Service Funds which account for the activities relating to the City's
motor pool activities and accrued leave of the governmental funds. The Motor Pool Internal Service
Fund reports revenues charged to the other funds based on rental fees and capital lease payments
designed to cover the cost of the lease payments and to fund depreciation. The Compensated Annual
Leave Internal Service Fund accounts for the accrual and payment of compensated absences of the
governmental activities.
In addition, the City maintains and reports on a single fiduciary fund. This fund records cash held in a
fiduciary capacity on behalf of the local teen council.
31
r
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
Private-sector standards of accounting and financial reporting issued prior to December 1, 1989,
generally are followed in both the government-wide and proprietary fund financial statements to
the extent that those standards do not conflict with or contradict guidance of the Governmental
Accounting Standards Board. Governments also have the option of following subsequent private=
sector guidance for their business-type activities and enterprise funds, subject to the same
limitation. The City has elected not to follow subsequent private-sector guidance.
As a general rule the effect of interfund activity has been eliminated from the government-wide
financial statements. Exceptions to this general rule are allocated administration fees and charges
between the enterprise funds and the various other funds and departments. Elimination of these
charges would distort the direct costs and program revenues reported for the various functions
concerned.
Amounts reported as program revenues include 1) charges to customers or applicants for goods,
services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and
contributions, including special assessments. Internally dedicated resources are reported as
general revenues rather than as program revenues. In addition, general revenues include all taxes,
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 incun-ed during the construction phase of capital assets of business-type activities is
included as part of the capitalized value of the assets constructed.
32
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Summary of Significant Account g Policies, continued
Capital Assets, continued
Property, plant, and equipment of the City is depreciated using the straight-line method over the
following estimated useful lives:
Buildings and improvements 20-40 years
Infrastructure 50 years
System infrastructure 20-50 years
Machinery and equipment 3-8 years
Central Treasury
A central treasury is used to account for the City's cash and investments to maximize
investment income. Investments are stated at fair value. Investment income is allocated among
the funds based on their respective cash balances.
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.
33
CITY OF SEWARD
Notes to Basic Financial Statements, continued
L.
Summary of Significant Accounting Policies, continued
Property Taxes, continued
At December 31, the delinquent real and personal property taxes not currently available are
reflected as deferred revenues of the General Fund.
Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at
the end of the year are referred to as either "due to / from other funds" (i.e., the current portion of
interfund loans) or "advances to / from other funds" (i.e., the noncurrent portion of interfund
loans). All other outstanding balances between funds are reported as "due to / from other funds."
Any residual balances outstanding between the governmental activities and business-type activities
are reported in the government-wide financial statements as "internal balances."
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
loner tenn obligations are reported as liabilities in the applicable governmental activities, business-
type activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as
well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line
method.
Encumbrances
Encumbrance accounting, under which purchase orders, contracts and other commitments for
expenditures are recorded in order to reserve that portion of the applicable appropriation, is
employed as an extension of formal budgetary integration in the General Fund during the year.
However, it is the City's policy to stop issuing purchase orders in early December. As a result,
there are no outstanding encumbrances at December 31, 2009. Outstanding purchase orders, if
any, at December 31, are cancelled and new ones are issued in the subsequent year.
Deferred Grant Revenue
Amounts received fi-om grantor agencies, which are restricted as to use and have not been
expended for the intended use, are shown as deferred revenue.
Pension Plans
With the exception of certain Electric Fund employees, substantially all other employees of the
City participate in the Public Employees' Retirement System (PERS) administered by the State of
Alaska.
34
r-,
CITY OF SEWARD
Notes to Basic Financial Statements, continued
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
r- - 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.
Allocation of Sales Tax Revenues
When the City transferred the operations of the Hospital to Providence Alaska Medical Center on
July 1, 1996, the City agreed to 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 Debt Service Fund.
3) Cash and Investments
The City of Seward maintains a central treasury that is available for use by all funds. Each
fund's portion of the central treasury is. displayed on the balance sheet as "cash and
investments" or included in"due to/from other funds."
At year-end, all of the City's bank deposits were either insured or collateralized with securities
held by the City's agent in the City's name.
Investments
City statutes authorize the City to 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.
35
CITY OF SEWARD
J
Notes to Basic Financial Statements, continued i
Cash and Investments, continued
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, 2009:
Government-Fiduciary Fund
Wide Statement of
Statement Assets and
of Net Assets Liabilities Totals
Cash and investments 13,474,479 41,715 13,516,194
Restricted cash and investments 10,250,648 10,250,648
23,725,127 41,715 23,766,842
Restricted Cash and Investments
The City maintains bond redemption and reserve accounts as required by bond covenants. The
balances at December 31, 2009 are as follows:
General Fund (long-term care facility) 1,973,360
Electric Fund 677,911
Harbor Fund 859,348
3,510,619
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:
LTC Facility Capital Project Fund - 129,348
Electric Fund 4,513,668
Water Fund 141,594
Wastewater Fund 187,820 .
Harbor Fund 1,250,345
Motor Pool 517,254
6,740,029
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. The AMLIP is uncategorized. All of the City's
remaining investments are in the category of least risk and include investments that are insured
or registered in the City's name, or securities that are held by the City or its agent in the City's
name. All of the United States treasury bills, treasury notes, and United States agency securities
are held in custodial accounts in the U.S. Bank and Bank of New York Trust Departments and
are recorded in the City's name, in accordance with safekeeping agreements. U.S. Bank and
Bank of New York are not counter parties to security transactions.
36
CTTY OF SEWARD
Notes to Basic Financial Statements, continued
Cash and Investments, continued
Interest Rate Risk
The fair value of the City's fixed-income investments fluctuate in response to changes in market
interest rates. Increases in prevailing interest rates generally translate into decreases in fair
value of those investments. Fair values of interest rate-sensitive instruments may be affected by
the creditworthiness of the issuer, prepayment options, relative values of alternative
investments, the liquidity of the instrument, and other general market conditions. The City
manages interest rate risk by allocating specific percentages of the portfolio over specified time
periods, and generally holds investments for less than five years, which minimizes the
sensitivity of fair value to changes in market interest rates. The City has no formal policy
relating to a specific deposit or interest rate risk.
Investment types and their maturities at December 31, 2009 are as follows:
Investment Maturities (in Years)
Fair Less than 1 to 5 Over
Investment Value 1 year years 5 years
Certificates of deposit 5,640,915 3,348,585 2,292,330
U.S. government agencies 8,906,186 3,267,846 5,638,340
Repurchase agreements 4,999,366 4,999,366
Total subject to-interest rate risk 19,546,467 11,615,797 7,930,670
Pooled investments 2,670,677
Money market account 1,594,258
Total investments 23,811,402
Option Risk
Option risk is the risk that an investment's counterparty may exercise a right embedded in the
investment — an embedded option. The City invests in securities issued by US Government
Agencies that contain call provisions. The exercise of the call option by the counterparty occurs
during times of declining interest rates; therefore the City is exposed to the risk of having to
reinvest at a lower interest rate. In the table above, securities are categorized according to the
final maturity, regardless of call option dates. If call options were exercised at the next possible
call date, many of the callable securities would mature in less than one year.
Concentration Risk
The City's investment policy places no limit on the amount that can be invested in any one
issuer. More than 5% of the total portfolio is invested in securities issued by federal agencies,
as follows: the Federal Home Loan Bank (12%), Federal Home Loan Mortgage Corporation
15%), and Federal National Mortgage Association (10%). All of the U.S. Agency securities in
the portfolio at year-end are rated as Aaa by Moody's Investors Service and AAA by Standard
and Poor's.
37
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Cash and Investments, continued
Restricted Cash and Investments, continued
Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to
the holder of the investment. This is measured by the assignment of a rating by a nationally
recognized statistical rating organization. The investments in U.S. government agencies include
Federal National Mortgage Association, Federal Home Loan Bank, Federal Home Loan
Mortgage Corporation, Federal Farm Credit Bank, and U.S. Treasuries. All of the U.S.
government agencies investments are rated AAA by Standard and Poors.
The City's investment policy specifies the types of investments that can be purchased, in order Y
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
Capital asset activity for the year ended December 31, 2009 was as follows:
Balance Additions Deletions Balance
January 1, and Reclass- and Reclass- December 31,
2009 ifications ifications 2009
Governmental activities
Capital assets not being depreciated:
Land and land improvements 5,398,928 33,361 5,432,289
Construction in progress 18,774,281 14,431,532 29,315,493 _ 3,890,320 *
f
Total assets not being depreciated 24,173,209 14,464,893 29,315,493 9,322,609
Capital assets being depreciated:
Buildings 63,463,657 16,354,042 79,817,699
Improvements other than buildings 15,915,243 8,307,658 - 26,730 24,196,171
Machinery and equipment 11,462,028 4,646,842 322,321 15,786,549 *
Total assets being depreciated 90,840,928 29,308,542 349,051 119,800,419
Less accumulated depreciation for:
Buildings 17,639,901 1,801,188 19,441,089
Improvements other than buildings 13,410,095 407,131 20,383 13,796,843
Machinery and equipment 7,931,110 820,872 311,171 8,440,811 *
Total accumulated depreciation 38,981.106 3,029,191 331,554 41,678,743
Total capital assets being
depreciated,net 51,859,822 26,279,351 17,497 - 78,121,676
Governmental activity
capital assets,net 76,033.031 40,744,244 29,332,990 87,444,285
38 iI
r
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Capital Assets, continued
The ending balances include $218,007, $4,229,564, and $2,235,366 of construction in
progress, equipment cost, and accumulated depreciation, respectively, related to the Motor Pool
Internal Service Fund.
Balance Additions Deletions Balance
January 1, and Reclass- and Reclass- December 31,
2009 ifications ifications 2009
Business-type activities
Capital assets not being depreciated:
Land and land improvements 17,483,769 17,483,769
Construction in progress 2,785,986 5.891,194 8,677,180
Total assets not being depreciated 20,269.755 5,891,194 26,160,949
Capital assets being depreciated:
Buildings 4,880,060 3,240 5,117 4,878,183
Improvements other than buildings 116,705,863 188,034 1,224,385 .115,669,512
Machinery and equipment 11.212.456 199,153 _ 26,341 11,385,268
Total assets being depreciated 132,798,379 390,427 1,255,843 131,932,963
Less accumulated depreciation for:
Buildings 4,079,774 83,175 5,117 4,157,832
Improvements other than buildings 62,111,189 3,288,385 1,224,385 64,175,189
Machinery and equipment 6.634.818 308.414 14,340 6,928,892
Total accumulated depreciation 72,825,781 3,679,974 1,243,842 75,261,913
Total capital assets being
depreciated,net 59,972.598 (3,289,547) 12,001 56,671,050
Business-type capital assets,net $ 80,242,353 2,601,647 12,001 82,831,999
Depreciation expense was charged to the functions as follows:
Depreciation Internal
Excluding Service
Internal Fund Total
Service Fund Allocation Depreciation
Governmental activities
r General government 153,883 111,884 265,767
Public safety 114,841 26,411 141,252
Public works 97,056 103,964 201,020
Parks and recreation 77,026 15,894 92,920
Library 32,821 32,821
Healthcare facilities 734,804 734,804
Sea Life Center 1,560,607 1,560,607
Total governmental activities 2,771,038 258,153 3,029,191
39
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Capital Assets, continued
Depreciation Internal
Excluding Service
Internal Fund Total
Service Fund Allocation Depreciation
Business-type activities
Electric 1,414,379 1,414,379
Water 214,909 214,909
Wastewater 280,429 280,429
Harbor 1,122,742 1,122,742
SMIC 642,521 642,521
Parking 4,994 4,994
Total business-type activities 3,679,974 3,679,974
Total depreciation expense 6,451,012 258,153 6,709,165
5) Interfund Receivables, Pavables, and Transfers
A schedule of interfund balances and transfers for the year ended December 31, 2009, follows:
Due from other funds:
Due to the General Fund from:
Flood Mitigation Capital Project Fund to cover
short-term.capital_advances 99,477
Nonmajor governmental funds to cover short-term
operating advances 110,042
Total due from other funds 209,519
Transfers:
From General Fund to:
SMIC Enterprise Fund for operating costs 140,230 -
Nonmajor governmental funds for debt service costs 904,209
Nonmajor governmental funds for operating costs 8,150
Nonmajor governmental funds for capital costs 267,827
Total transfers from General Fund 1,320,416
From nonmajor governmental funds to:
General Fund for operating costs 134,704
Nonmajor governmental funds for capital costs 25,000
Total transfers from nonmajor governmental funds 159,704
40
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Interfund Receivables, Payables, and Transfers, continued
Transfers, continued:
From Electric Enterprise Fund to General Fund
for payment in lieu of taxes and other costs 1,055,131
From Water Enterprise Fund to General Fund
for payment in lieu of taxes and other costs 82,767
From Wastewater Enterprise Fund to General Fund
for payment in lieu of taxes and other costs 68,667
From Harbor Enterprise Fund to General Fund
for payment in lieu of taxes and other costs 320,095
From SMIC Enterprise Fund to General Fund
for payment in lieu of taxes and other costs 67,533
From Parking Revenue Enterprise Fund to
General Fund for payment in lieu of taxes 12,970
Total transfers to other funds 3,087,283
6) Lone-Term Debt
The following is a summary of long-term debt transactions of the City for the year ended
December 31, 2009:
Balance Balance Due
January 1, December 31, Within
2009 Additions Retired 2009 One Year
Governmental activities
Revenue bonds—
27,000,000 2008 Series One long
term care facility bonds, due in
annual installments of$680,000 to
1,875,000 plus interest at 4.0%to
5.1%through April 1,2033 (first
principal payment due in 2011) $27,000,000 27,000,000
General obligation bonds:
5,150,000 2004 refunding hospital
bonds,due in annual installments of
710,000 to $840,000 plus interest
at 3.00%to 3.5%through April 1,2013 3,755,000 685,000 3,070,000 735,000
41
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Long-Term Debt, continued
Balance Balance Due
January 1, December 31, Within
2009 Additions Retired 2009 One Year
Governmental activities,continued
General obligation bonds, continued:
1,086,018 2003 refunding streets and
sidewalks bonds, due in annual
installments of$73,098 to$78,317
plus interest at 2.0%to 3.5%through
December 1,2011 224,513 73,098 151,415 73,098
175,438 2003 refunding senior center
bonds, due in annual installments of
11,808 to$12,652 plus interest at 2.0%
to 3.5%through December 1,2011 36,268 11,808 24,460 11,807
Capital leases:
Fire equipment capital lease obligation,
due in semiannual installments
of$9,690, including interest at
3.81%through May 1,2011 45,777 17,790 27,987 18,480
Fire truck capital lease obligation, due
in annual installments of$110,177,
including interest at 3.295%through
May 13,2,013 516,842 110,177 406,665 96,777
Loaders capital lease obligation,due
in monthly installments of$7,895,
including interest at 3.97%through
April 21,2014 430,420 53,828 376,592 81,256
Accrued annual leave 376,605 389,083 333,623 432,065 108,616
Total governmental activities
long-term liabilities 31,438,163 1,336,345 1,285,324 31,489,184 1,125,034
Less unamortized deferred loss on refunding 197,775)
Plus unamortized bond premium 376,468
31,667,877
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.
f
42
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Lone-Term Debt, continued
Balance Balance Due
January 1, December 31, Within
2009 Additions Retired 2009 One Year
Business-type activities
General obligation bonds-
818,544 2003 refunding SMIC bonds,
due in annual installments of$55,094
to$59,030,plus interest at 2.0%to
3.5%through December 1,2011 169,218 55,094 114,124 55,094
Revenue bonds:
6,000,000 2008 Electric revenue
bonds, due in annual installments of
95,000 to$375,000,plus interest at
4.0%to 6.0%through June 1, 2038 6,000,000 90,000 5,910,000 95,000
4,500,000 2006 harbor revenue
bonds, due in annual installments of
160,000 to $330,000,plus interest at
4.0%to 6.0%through June 1,2026 4,220,000 150,000 4,070,000 160,000
3,000,000 2000 harbor revenue bonds,
due in annual installments of$135,000
to$140,000 plus interest at 5.25%to
5.5%through October 1,2011 400,000 125,000 275,000 135,000
1,965,000 2007 refunding harbor revenue
bonds, due in annual installments of
5,000 to$235,000,plus interest at
4.0%to 5.0%through June 1, 2021 1,955,000 5,000 1,950,000 5,000
2,290,000 2005 refunding electric revenue
bonds, due in annual installments of
220,000 to$275,000,plus interest at
3.75%to 5.0%through June 1,2015 1,680,000 215,000 1,465,000 220,000
1,500,000 2005 harbor revenue bonds,
due in annual installments of$60,000
to$110,000 plus interest at 3.75%to
5.0%through June 1,2025 1,390,000 60,000 1,330,000 60,000
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 7,992 1,329 6,663 1,333
43
r7
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Long-Term Debt, continued
Balance Balance Due
January 1, December 31, Within
2009 Additions Retired 2009 One Year
Business-type activities,continued
Notes payable,continued:
901,851 sewer note payable to State of
Alaska Depai tnient of Environmental
Conservation,due in annual installments
of$60,584,including interest at 1.5%
through November 5,2013 289,770 56,255 233,515 57,082
3,247,195 water note payable to State of
Alaska Department of Environmental
Conservation,due in annual installments
of$95,636,plus interest at 1.5%through
January 31,2030 3,247,195 3,247,195 95,636
Accrued annual leave 144,739 110,382 103,312 151,809 37,953
Total business-type activities
long-term liabilities 19,503,914 110,382 860,990 18,753,306 922,098
Less unamortized deferred loss on refunding 77,410)
Plus unamortized bond premium 196,343
18,872,239
Annual debt service requirements to maturity on the bonds,notes and capital leases follow:
General Obligation Bonds
Year Ending Governmental Activities Business-type Activities
December 31., Principal Interest Total Principal Interest Total
2010 819,905 92,456 912,361 55,094 3,719 58,813
2011 875,970 67,109 943,079 59,030 2,066 61,096
2012 840,000 38,500 878,500
2013 710,000 12,425 722,425
3,245,875 210,490 3,456,365 114,124 5,785 119,909
Authorized but Unissued General Obligation Bonds
During 2009, voters approved the issuance of $5 million in general obligation bonds for the
construction of a library/museum. However, none of the bonds have been issued.
44
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Long-Term Debt, continued
Revenue Bonds
Year Ending Governmental Activities Business-type Activities
December 31, Principal Interest Total Principal Interest Total
2010 1,292,663 1,292,663 675,000 691,578 1,366,578
2011 680,000 1,275,662 1,955,662 715,000 657,766 1,372,766
2012 710,000 1,240,913 1,950,913 745,000 621,676 1,366,676
2013.750,000 1,204,413 1,954,413 780,000 586,952 1,366,952
2014.785,000 1,166,037 1,951,037 825,000 549,401 1,374,401
2015-2019 4,530,000 5,227,663 9,757,663 3,470,000 2,258,766 5,728,766
2020-2024 5,570,000 4,158,971 9,728,971 3,195,000 1,510,490 4,705,490
2025-2029 7,000,000 2,684,110 9,684,110 1,830,000 896,332 2,726,332
2030-2034 6,975,000 733,508 7,708,508 1,380,000 551,881 1,931,881
2035-2038 1,385,000 150,280 1,535.280
27,000,000 18,981940 45 983,940 15,000,000 8,475,122 23,475,122
Notes Payable
Year Ending Business-type Activities
December 31, Principal Interest Total
2010 154,051 63,646 217,697
2011 176,592 41,085 217,677
2012 179,221 38,435 217,656
2013 181,887 35,747 217,634
2014 124,012 33,019 157,031
2015-2019 641,561 136,834 778,395
2020-2024 691,144 87,252 778,396
2025-2029 744,558 33,838 778,396
2030-2033 594,347 22,119 616,466
1487,373 491,975 3.979,348
Capital Leases
Year Ending Governmental Activities
December 31, Principal Interest Total
2010 196,513 27,420 223,933
2011 193,835 20,770 214,605
2012 191,036 13,879 204,915
2013 198,178 6,737 204,915
2014 31,682 260 31,942
811,244 69,066 880,310
45
CITY OF SEWARD
Notes to Basic Financial Statements, continued
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, 2009
as follows:
Harbor bond reserves 859,348
Electric bond reserves 677,911
The Harbor revenue bonds and Electric revenue bonds also require that rates be maintained at a
level that will produce net revenues after certain adjustments, equal to 1.2 and 1.3, respectively,
times the amount required each year to pay the principal and interest. The City failed to meet
these revenue requirements for both bonds in 2009. The bond coverage calculations are as
follows:
Harbor Revenue Bonds
Total revenues, excluding grants 2,632,937
Total operating expenses excluding depreciation
and payment in lieu of taxes .1,903,985
Available for debt service 728,952
Debt service payments:
Principal 340,000
Interest 356,540
Total debt service payments 696,540
Debt coverage 1.05
Electric Revenue Bonds
Total revenues, excluding grants 9,173,257
Total operating expenses, excluding depreciation
8,589,154andpaymentinlieuoftaxes
Available for debt service 584,103
Debt service payments:
Principal 305,000
Interest 367,023
Total debt service payments 672,023
Debt coverage 0.87
46
I
CITY OF SEWARD
Notes to Basic Financial Statements, continued
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, 2009:
Internal
General Service
Fund Fund
Machinery and equipment 117,800 947,262
Less accumulated depreciation 84,144)
Carrying value 33,656 947,262
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, 2009:
Internal
Year Ending General Service
December 31, Fund Fund
2010 19,379 204,916
2011 9,690 204,916
2012 204,916
2013 204,916
2014 31,577
Total minimum lease payments 29,069 851,241
Less interest portion 1,082) 67,984)
Present value of future minimum
lease payments 27,987 783,257
Less current portion 18,480) 178,033)
Long-term portion 9,507 605,224
4
I
CITY OF SEWARD
Notes to Basic Financial Statements, continued
9) Defined Benefit Pension Plan
The City participates in the Public Employees' Retirement System (PERS). PERS was originally
established as an agent multiple employer plan, but was converted by legislation to a cost-
sharing plan, effective July 1, 2008. 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
Conversion to Cost Sharing
In April 2008, the Alaska Legislature passed legislation which converted the Plan 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
will no longer track individual employer assets and liabilities. Rather, all plan costs and past
service liabilities will be shared among all participating employers. The cost-sharing plan
requires a uniform employer contribution rate of 22% of active member wages, subject to a
wage floor. In addition, the legislation provides for State contributions in the event that the
annually calculated and board adopted rate, which includes a provision to pay down the past-
service liability, exceeds 22%. Any such additional contributions will be recognized by each
employer as an on-behalf payment.
In addition, in fiscal year 2008, the State of Alaska passed separate legislation which requires that
the employer contribution rate be calculated using all PERS eligible wages, including those wages
for employees participating in PERS Tier IV, a defined contribution plan described later in these
footnotes.
Funding Policy
Regular employees are required to contribute 6.75% of their annual covered salary (2.50% for
pension and 4.25% for healthcare). Police and firefighters are required to contribute 7.5% of
their annual covered salary (2.78% for pension and 4.72 for healthcare).
The funding policy provides for periodic contributions based on actuarially determined rates
that, expressed as a percentage of annual covered payroll, are sufficient to accumulate sufficient
assets to pay both pension and postemployment healthcare benefits when due.
48
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Defined Benefit Pension Plan, continued
Funding Policy, continued
Under current legislation the employer contribution rate is statutorily capped at 22%, however,
the State of Alaska will contribute 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 2009 were as follows:
Employer Actuarial GASB 43/45
Rate Rate Rate*
January to June
Pension 6.82% 10.91% 8.47%
v
Postemployment healthcare 15.18% 24.31% 37.27%
Total contribution rate 22.00% 35.22% 45.74%
Employer Actuarial GASB 43/45
Rate Rate Rate*
July to December
Pension 8.16% 10.25% 10.72%
Postemployment healthcare 13.84% 17.40% 53.96%
Total contribution rate 22.00% 27.65% 64.68%
The GASB 43/45 rate uses a 4.5% OPEB discount rate and disregards all future Medicare Part
D payments.
The significant actuarial information and assumptions used in the most recent valuation of the
plan follow:
Valuation Date June 30, 2008
Actuarial Cost Method Entry age normal
Level percentage of pay for pension
Level dollar for healthcare
Amortization Method Level dollar, closed
Equivalent Single Amortization Period 20 years
Asset Valuation Method 5-year smoothed market
Investment Rate of Return 8.25%pension,4.5%healthcare
Salary Scale Peace Officers/Firefighters
Merit: 2.5%per year for first 6 years, 0.5%
thereafter
Productivity: 0.5%per year
49
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Defined Benefit Pension Plan, continued
Funding Policy, continued
Salary Scale, continued Others
Merit: 5.5%per year grading down to 1.5%
after 5 years, for more than 6 years of
service, 1.0% grading down to 0%
Productivity: 0.5%per year
Payroll Growth 4.0%
Inflation 3.5%
Health Cost Trend Medical: 8.0% in FY09 trending downward
by variable amounts to 5.9%in FY15, 5.8%
through FY25, 5.7%through FY50, and
5.1%through FY100
Prescription Drugs: 10.8% in FY09 trending
downward by variable amounts to 5.9%
in FY15, 5.8%through FY25, 5.7%
through FY50 and 5.1%through FY100
The State of Alaska Public Employees' Retirement System retiree healthcare benefits are
partially funded. The PERS plan uses the percentage of ARC methodology in the development
of the investment rate of return.
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-teen 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.
50 Li
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Defined Benefit Pension Plan, continued
Annual Pension and Postemployment Healthcare Cost
The City is required to contribute 22% of covered payroll, subject to a wage floor. In addition,
State of Alaska contributions totaled approximately 13.22% and 5.65% of covered wages for
the January to June and July to December timeframes, respectively. In accordance with the
provisions of GASB Statement Number 24, the City has recorded the State contribution in the
amount of $430,409 as a PERS on-behalf payment. However, because the City is not
statutorily responsible for these payments, this amount is excluded from pension and OPEB
cost as described here. Only one year of infoiination is available at this time.
Annual Total Benefit City of
Year Pension Annual Cost Contri- TBC
December 31 Cost OPEB Cost TBC) butions Contributed
2009 318,262 $ 616,704 $ 934,966 $ 934,966 100%
In accordance with the Plan rules, the total City contribution into the defined benefit plan
includes $83,506 attributable to the PERS Tier IV defined contribution plan wages.
10) 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 Commissioner, 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 IV Tier IV
Individual account 5.00% 5.00%
Health reimbursement arrangement(HRA) * 3.00 3.00
Retiree medical plan 1.75 0.99
Occupational death and disability benefits 30 1.33
10.05% 10.32%
Health Reimbursement Arrangement—AS 39.30.370 requires that the employer contribute "an
amount equal to three percent of the 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.
51
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Defined Contribution Pension Plan, continued
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, 2009 were$77,091 and$58,337,respectively.
11) International Brotherhood of Electrical Workers
Certain Electric Fund employees are members of the International Brotherhood of Electrical
Workers, which maintains its own defined contribution pension plan. There are two separate
negotiated contracts for temporary and permanent employees. The City's contribution rate for
temporary employees is $10.77 per compensable hour per the terms of a negotiated agreement
expiring December 31, 2009. The City's contribution rate for permanent employees is $800 per
employee per month per the terms of a negotiated agreement expiring June 30, 2010. The total -
City contribution for the year ended December 31, 2009 was $62,313. Employees are not
required to contribute.
12) Deferred Compensation Plan
The City offers its employees a deferred compensation plan created in accordance with Internal
Revenue Code Section 457. The plan, available to all employees, permits them to defer a
portion of their salary until future years. The deferred compensation is not available to
employees until termination, retirement, death, or unforeseeable emergency.. The provisions of
the plan require that all assets and income of the plan be held in trust for the exclusive benefit of -
participants and their beneficiaries.
13) Risk Management
The City faces a considerable number of risks of loss, including (a) damage to and loss of
property and contents, (b) employee torts, (c) professional liability; i.e., errors and omissions,
d) environmental damage, (e) workers' compensation; i.e., employee injuries, and (f) medical
insurance costs of employees.
The City is a member of the Alaska Municipal League Joint Insurance Association (JIA), a
governmental insurance pool established by the Alaska Municipal League. The JIA provides
the City coverage for property, including building and contents, automobiles, mobile
equipment, data processing equipment and boiler and machinery; casualty, including general
liability, public officials and employees liability, law enforcement professional liability, auto
liability and employee benefit liability; workers' compensation, including employers liability;
and commercial blanket bond. The City maintains supplemental marine insurance and
firefighters group accident coverage with insurance companies placed through JIA. The City
has no coverage for potential losses from environmental damages.
52
1 ?
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Risk Management, continued
The JIA is a public entity risk pool organized to share risks among its members. The
Association's bylaws provide for the assessment of supplemental contributions from members
in the event that losses and expenses for any coverage year exceed the annual contributions and
income earned on such contributions for the year. Such supplemental contributions shall be
based upon each member's deposit contribution in comparison to the aggregate deposit
contributions of all members. The Association made no supplemental assessments during the
year ended December 31, 2009.
The JIA provides loss control services and conducts periodic inspections to ensure safe
operations. The City has utilized an established safety committee to review and recommend
safety policies and procedures for all departments. The City Council designates a portion of the
General Fund balance to meet potential losses. not covered by insurance and insurance
deductibles.
The City also participates in the' Alaska Public Utilities Insurance Trust, which provides
insurance coverage for employee health benefits. The Plan is a public entity risk pool in which
risks are shared among the members. Stop loss insurance limits participants' liability for
individual and aggregate claims.
There was no significant reduction in the City's major categories of risk insurance coverage
from the prior year, and the amount of settlements for the past three fiscal years did not
materially exceed the City's insurance coverage.
14) Health Care Operating Agreements
The City has entered into an operating agreement with Providence Health and Services. Under
the terms of the agreement, the City will pay Providence Health and Services an annual
management fee in exchange for Providence's overall management of the Providence Seward
Medical Center (hospital) and the Seward Mountain Haven (long-term care facility).
Additionally, the patient charges assessed at Seward Mountain Haven have a capital-cost
component and an operating-cost component. The patient charges associated with the capital-
cost component are remitted b , rovidence to the City in order to pay the debt service on
revenue bonds issued to finance construction of Seward Mountain Haven. These transactions
are accounted for in the Seward Mountain Haven Debt Service Fund.
15) Commitments and Contingencies
Amounts received or receivable from grantor agencies are subject to audit and adjustment by
grantor agencies, principally the state and federal government. Any disallowed claims,
including any amount already collected, could become a liability of the applicable funds.
53
CITY OF SEWARD
Notes to Basic Financial Statements, continued
Commitments and Contingencies, continued
In 2006 the City was named as a defendant in a lawsuit alleging discharge of pollutants into
Resurrection Bay in violation of the federal Clean Water Act. In March 2008, the court issued
an Order of Summary Judgment finding that the City must obtain a permit for storm water
discharges. The City is not obligated to pay civil penalties, and both parties to the suit are to
bear their own legal fees and costs. Following this order, the plaintiff filed an appeal with the
Ninth Circuit Court of Appeals requesting attorney fees and costs of approximately $100,000.
Briefing on the appeal is completed and the parties await further notice from the Ninth Circuit
Court of Appeals.
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 aobligationsppg
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.
16) Fund Deficits
The Flood Mitigation Capital Projects Fund had a deficit in fund .balance of $25,019 at
December 31, 2009. This fund incurred costs related to the 2006 flood disaster. The deficit
will be eliminated in the future with transfers from other funds.
I ..
54
I
I
I
SUPPLEMENTARY INFORMATION
55
Exhibit E-1
CITY OF SEWARD
Nonmajor Governmental Funds
Combining Balance Sheet
December 31, 2009
Special Debt Capital
Assets Revenue Service Projects Total
Cash and investments 81,754 542,015 322,527 946,296
Grants receivable 140,599 140,599
Other receivables 19,776 635,682 655,458
Total assets 242,129 1,177,697 322,527 1,742,353
Liabilities and Fund Balances
Liabilities:
Accounts payable 23,161 25,821 48,982
Deferred revenue 8,596 5,341 13,937
Due to other funds 110,042 110,042
Total liabilities 141,799 31,162 172,961
Fund balances:
Reserved for debt service 1,177,697 1,177,697
Unreserved:
Designated for capital improvements 291,365 291,365
Undesignated 100,330 100,330
Total fund balances 100,330 1,177,697 291,365 1,569,392
Total liabilities and fund balances 242,129 1,177,697 322,527 1,742,353
56
Ti
Exhibit E-2
CITY OF SEWARD
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures
and Change in Fund Balances
Year Ended December 31, 2009
Special Debt Capital
Revenue Service Projects Total
Revenues:
Intergovernmental 105,896 561,777 667,673
Investment income 1,419 1,419
Other 60,396 635,682 696,078
Total revenues 166,292 637,101 561,777 1,365,170
Expenditures:
General government 358,469 294,932 653,401
Public safety 1,913 74,479 76,392
Public works 41,092 41,092
Parks and recreation 40,554 352,961 393,515
Library 41,410 41,410
Principal payments 685,000 685,000
Interest and other costs 107,169 107,169
Other services and charges 500,000 500,000
Total expenditures 483,438 1,292,169 722,372 2,497,979
Excess of revenues over (under)
expenditures 317,146) (655,068) (160,595) (1,132,809)
Other financing sources (uses):
Transfers in 8,150 904,209 267,827 1,180,186
Transfers out 134,704)25,000) (159,704)
Net other financing sources (uses) 8,150 769,505 242,827 1,020,482
Net change in fund balances 308,996)114,437 82,232 112,327)
Beginning fund balances 409,326 1,063,260 209,133 1,681,719
Ending fund balances 100,330 1,177,697 291,365 1,569,392
57
Exhibit F-1
CITY OF SEWARD
Nonmajor Enterprise Funds
Combining Statement of Net Assets
December 31, 2009
Assets Wastewater Parking Total
Current assets:
Cash and investments 395,033 412,074 807,107
Receivables:
Accounts 81,009 81,009
Less allowance for doubtful accounts 5,905) 5,905)
Total current assets 470,137 412,074 882,211
Noncurrent assets:
Restricted cash and investments 187,820 187,820
Capital assets, net of accumulated depreciation 5,502,077 107,549 5,609,626
Total noncurrent assets 5,689,897 107,549 5,797,446
Total assets 6,160,034 519,623 6,679,657
Liabilities and Net Assets
Current liabilities:
Accounts payable 8,108 17,753 25,861
Accrued payroll and related liabilities 6,372 6,372
Accrued interest 565 565
Current portion:
Accrued annual leave 3,135 3,135
Notes payable 58,415 58,415
Total current liabilities 76,595 17,753 94,348
Noncurrent liabilities, net of current portion:
Accrued annual leave 9,405 9,405
Notes payable 181,763 181,763
Total noncurrent liabilities 191,168 191,168
Total liabilities 267,763 17,753 285,516
Net assets:
Invested in capital assets, net of related debt 5,261,899 107,549 5,369,448
Unrestricted 630,372 394,321 1,024,693
Total net assets 5,892,271 501,870 6,394,141
Total liabilities and net assets 6,160,034 519,623 6,679,657
58
Exhibit F-2
CITY OF SEWARD
Nonmajor Enterprise Funds
Combining Statement of Revenues, Expenses and Change in Net Assets
Year Ended December 31, 2009
Wastewater Parking Total
Operating revenues - charges for services 796,454 162,120 958,574
Operating expenses:
Salaries and benefits 236,385 93,199 329,584
Services and supplies 255,310 20,546 275,856
Administration 142,232 16,617 158,849
Depreciation 280,429 4,994 285,423
Total operating expenses 914,356 135,356 1,049,712
Earnings (loss) from operations 117,902) 26,764 91,138)
Nonoperating revenues (expenses):
Intergovernmental 11,842 11,842
Investment income 3,678 1,645 5,323
Interest expense 4,332) 4,332)
Net nonoperating revenues (expenses) 11,188 1,645 12,833
Earnings (loss)before transfers 106,714) 28,409 78,305)
Transfers out 68,667) • (12,970)81,637)
Change in net assets 175,381) 15,439 (159,942)
Beginning net assets 6,067,652 486,431 6,554,083
Ending net assets 5,892,271 501,870 6,394,141
59
Exhibit F-3
CITY OF SEWARD
Nonmajor Enterprise Funds
Combining Statement of Cash Flows
Year Ended December 31, 2009
Wastewater Parking Total
Cash flows from operating activities:
Receipts from customers and users 792,259 162,120 954,379
Payments to suppliers 255,362) (16,880) (272,242)
Payments to employees 230,809) (93,199) (324,008)
Payments for interfund services used 142,232) (16,617) (158,849)
Net cash flows from operating activities 163,856 35,424 199,280
Cash flows from noncapital financing activities -
transfers out 68,667) (12,970) (81,637)
Cash flows from capital and related financing activities:
Principal payments on long-term debt 57,584) 57,584)
Interest payments on long-term debt 4,466) 4,466)
Acquisition of property, plant and equipment 257,228) (42,811) (300,039)
Received on note receivable 239,600 239,600
Net cash flows from capital and
related'financing activities 79,678) (42,811) (122,489)
Cash flows from investing activities -
investment income received 3,678 1,645 5,323
Net increase (decrease) in cash and investments 19,189 18,712) 477
Beginning cash and investments 563,664 430,786 994,450
Ending cash and investments 582,853 412,074 994,927
Reconciliation of cash and investments
to statement of net assets:
Current assets 395,033 412,074 807,107
Restricted assets 187,820 187,820
582,853 412,074 994,927
60
Exhibit F-3, continued
CITY OF SEWARD
Nonmajor Enterprise Funds
Statement of Cash Flows, continued
Wastewater Parking Total
Reconciliation of earnings (loss) from operations to net cash
provided (used) by operating activities:
Earnings (loss) from operations 117,902) 26,764 (91,138)
Adjustments to reconcile earnings (loss) from operations
to net cash flows from operating activities:
Depreciation 280,429 4,994 285,423
Noncash expense -PERS relief 11,842 11,842
Increase in allowance for doubtful accounts 2,564 2,564
Increase) decrease in assets:
Accounts receivable 6,759) 6,759)
Prepaid expenses 4,187 4,187
Increase (decrease) in liabilities:
Accounts payable 52) 521) 573)
Accrued payroll and related liabilities 1,141 1,141
Accrued annual leave 7,407) 7,407)
Net cash flows from operating.activities 163,856 35,424 199,280
61
Exhibit G-1
CITY OF SEWARD
Internal Service Funds
Combining Statement of Net Assets
December 31, 2009
Compensated
Motor Annual
Assets Pool Leave Total
Current assets:
Cash and investments 826,601 432,065 1,258,666
Receivables:
Accrued interest 66,405 66,405
loans 61,392 61,392
Total current assets 954,398 432,065 1,386,463
Restricted cash and investments - capital projects 517,254 517;254
Noncurrent assets:
Interfund loans, net of current portion 1,195,565 1,195,565
Capital assets, net of accumulated depreciation 2,212,205 2,212,205
Total noncurrent assets 3,407,770 3,407,770
Total assets 4,879,422 432,065 5,311,487
Liabilities and Net Assets
Current liabilities:
Accounts payable 93,071 93,071
Accrued interest 9,547 9,547
Current portion:
Accrued annual leave 108,616 108,616
Capital lease obligation 178,033 178,033
Total current liabilities 280,651 108,616 389,267
Noncurrent liabilities, net of current portion:
Capital lease obligation 605,224 605,224
Accrued annual leave 323,449 323,449
Total liabilities 885,875 432,065 1,317,940
Net assets:
Invested in capital assets, net of related debt 1,428,948 1,428,948
Unrestricted 2,564,599 2,564,599
Total net assets 3,993,547 3,993,547
Total liabilities and net assets 4,879,422 432,065 5,311,487
62
t-'
Exhibit G-2
CITY OF SEWARD
Internal Service Funds
Combining Statement of Revenues, Expenses and Change in Net Assets
Year Ended December 31, 2009
Compensated
Motor Annual
Pool Leave Total
Operating revenues -
vehicle rental and interfund charges 512,193 389,083 901,276
Operating expenses:
Salaries and benefits 389,083 389,083
Depreciation 223,124 223,124
Total operating expenses 223,124 389,083 612,207
Earnings from operations 289,069 289,069
Nonoperating revenues (expenses):
Gain on disposition of capital assets 1,693 1,693
Investment income 72,180 72,180
Interest expense 18,878) 18,878)
Miscellaneous 295) 295)
Net nonoperating revenues (expenses)54,700 54,700
Change in net assets 343,769 343,769
Beginning net assets 3,649,778 3,649,778
Ending net assets 3,993,547 3,993,547
63
Exhibit G-3
CITY OF SEWARD
Internal Service Funds
Combining Statement of Cash Flows
Year Ended December 31, 2009
Compensated
Motor Annual
Pool Leave Total
Cash flows from operating activities:
Receipts from interfund charges 512,193 389,083 901,276
Payments to suppliers 295) 295)
Payments to employees 333,623) (333,623)
Net cash flows from operating activities 511,898 55,460 567,358
Cash flows from capital and related financing activities:
Principal payments on long-term debt 164,005) 164,005)
Interest payments on long-term debt 9,331) 9,331)
Acquisition of equipment and vehicles 235,117) 235,117) i
Proceeds from sale of capital assets 11,150 11,150
Net cash flows from capital and
related financing activities 397,303) 397,303)
Cash flows from investing activities:
Interfund loan receipts 58,284 58,284
Investment income received 75,288 . 75,288
Net cash flows from investing activities 133,572 133,572
Net increase in cash and investments 248,167 55,460 303,627
Beginning cash and investments 1,095,688 376,605 1,472,293
Ending cash and investments 1,343,855 432,065 1,775,920
i
Reconciliation of cash and investments to statement of net assets:
Current assets 826,601 432,065 1,258,666
Restricted assets 517,254 517,254
1,343,855 432,065 1,775,920
Reconciliation of earnings from operations to net cash
provided (used)by operating activities:
Earnings from operations 289,069 289,069
Adjustments to reconcile earnings from operations
to net cash flows from operating activities:
Depreciation 223,124 223,124
Other nonoperating expenses 295) 295)
Increase in liabilities-accrued annual leave 55,460 55,460
Net cash flows from operating activities 511,898 55,460 567,358
Noncash capital and related financing activities -
equipment and vehicles acquired by capital lease 947,262 947,262
64
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.
65
Exhibit H-1
CITY OF SEWARD
General Fund
Balance Sheet
December 31, 2009
With Comparative Amounts for 2008)
2009 2008
Assets
Cash and investments 6,388,474 4,852,912
Receivables:
Taxes:
Personal property 13,857 4,171
Less allowance for doubtful accounts 492) 133)
Net personal property 13,365 4,038
Motor vehicle 3,340 4,198
Hotel/motel room 11,507 10,878
Real property 19,688 21,652
Sales 459,851 491,382
Net taxes 507,751 532,148
Accounts 206,080 80,818
Less allowance for doubtful accounts 3,036) 2,001)
Net accounts 203,044 78,817
Grants and shared revenues 1,100 690
Accrued interest 69,755 206,499
Note receivable - PSMC 192,000 192,000
Total receivables 973,650 1,010,154
Prepaid items 456,974 491,715
Inventory 8,055 9,875
Due from other funds 209,519 126,716
Restricted cash and investments - bond reserve 1,973,360 1,973,360
Total assets 10,010,032 8,464,732
66
Exhibit H-1, continued
CITY OF SEWARD
General Fund
Balance Sheet, continued
2009 2008
Liabilities and Fund Balance
Liabilities:
Accounts payable 391,449 427,252
Accrued payroll and related liabilities 140,246 118,998
Accrued liabilities 65,427 128,633
Funds held in trust 30,330 23,305
Deferred revenue 73,379 58,145
Accrued interest 78,262 81,078
Interfund loans payable 3,464,068 3,517,694
Total liabilities 4,243,161 4,355,105
Fund balance:.
Reserved:
Inventory and prepaids 465,029 501,590
Note receivable -PSMC 192,000 192,000
Unreserved:
Designated:
Working capital 1,500,000 1,500,000
Insurance 126,418 126,418
Hospital line of credit 500,000 500,000
Undesignated 2,983,424 1,289,619
Total fund balance 5,766,871 4,109,627
Total liabilities and fund balance 10,010,032 8,464,732
67
Exhibit H-2
CITY OF SEWARD T
General Fund
Schedule of Revenues, Expenditures and
Change in Fund Balance - Budget and Actual
Year Ended December 31, 2009
With Comparative Amounts for 2008)
2009 2008
Variance
Positive
Budget Actual (Negative) Actual t
Revenues:
Taxes:
Sales 4,130,000 3,585,304 (544,696) 4,137,758 j
Property 925,000 975,687 50,687 953,957
Hotel/motel room 375,000 285,313 (89,687) 362,004
Payments in lieu of taxes 30,000 84,922 54,922 80,126
Penalty and interest 2,000 1,329 671) 1,236
Total taxes 5,462,000 4,932,555 (529,445) 5,535,081 -
Licenses and p ermits: .
Building permits - 75,000 99,000 24,000 35,777
Taxi permits 1,200 1,415 215 1,400
Department of Motor Vehicles commissions 112,673 86,436 (26,237) 68,765
Animal control licenses 750 735 15) 785
Business licenses 21,000 23,400 2,400 18,960
Miscellaneous 5,000 3,980 . (1,020) 4,269
Total licenses and permits 215,623 214,966 657) 129,956
Intergovernmental:
Jail contract 450,000 449,472 528) 449,472
Dispatch contracts 96,500 97,460 960 96,980
Raw fish tax 360,000 417,356 57,356 403,746
Shared fisheries and landing tax 5,000 4,049 951)
Liquor tax 20,000 19,750 250)16,600
Library grants 6,350 6,350 6,350
Fire department grant 7,191 1
Energy assistance 36,181
Revenue sharing• 233,135 229,606 • (3,529) 233,135
PERS relief S 401,389 332,856 (68,533) 286,240
PERS rebate 378,969
Other grants 22,367 19,866 2,501) 3,052
Total intergovernmental 1,594,741 1,576,765 (17,976) 1,917,916
68 H
r;
Exhibit H-2. continued
CTI'Y OF SEWARD
General Fund
Schedule of Revenues, Expenditures and Change in Fund Balance-
Budget and Actual, continued
2009 2008
Variance
Positive
Budget Actual (Negative) Actual
Revenues, continued:
Charges for services:
Administrative 1,724,231 1,739,057 14,826 1,825,071
Rents and leases 122,000 157,821 35,821 130,430
Copying charges 15,000 16,840 1,840 15,176
Work orders 20,000 2,896 17,104)
Recreation 631,755 622,067 9,688) 627,038
Library 8,500 14,799 6,299 12,800
Total charges for services 2,521,486 2,553,480 31,994 2.610,515
Fines and bails 17,000 11,836 5,164) 18,209
Investment income 231,000 50,311 (180,689) 226,854
Exxon Valdez settlement 1,712,052 1,622,052 90,000)
Other:
Sale of land, equipment and gravel 11,800 21,395 9,595 54,259
Refuse contract 65,000 60,558 4,442) 62,574
Library revenues 16,990 16,990 17,258
Other 21,700 20,089 1,611) 24,769
Total other 98,500 119,032 20,532 158,860
Total revenues 11,852,402 11,080,997 (771,405) 10,597,391
Expenditures:
General government:
Mayor and council:
Salaries 35,616 23,395 12,221 40,589
Employee benefits 12,163 12,846 683) 19,056
Audit 59,400 60,586 1,186) 57,000
Legal 135,000 116,971 18,029 132,918
Purchased services 4,500 3,076 1,424 3,410
Supplies and maintenance 21;000 9,492 11,508 11,571
Legislative representation 147,000 152,673 5,673) 128,647
General and administrative 79,934 68,722 11,212 105,942
Total mayor and council 494,613 447,761 46,852 499,133
69
Exhibit H-2, continued
CITY OF SEWARD
General Fund
Schedule of Revenues, Expenditures and Change in Fund Balance-
Budget and Actual, continued
2009 2008
Variance H
Positive
Budget Actual (Negative) Actual
Expenditures, continued:
General government, continued:
City manager:
Salaries 228,602 262,182 33,580) 208,557
Employee benefits 110,553 135,661 25,108) 107,898
Purchased services 29,800 10,303 19,497 26,751
Supplies and maintenance 11,325 8,217 3,108 12,494
General and administrative 55,600 28,132 27,468 51,011
Total city manager 435,880.444,495 8,615) 406,711
City clerk:
Salaries 142,073 128,897 13,176 119,912
Employee benefits 86,606 83,588 3,018 81,469
Purchased services 12,000 10,242 1,758 11,146
Supplies and maintenance 386
General and administrative 20,550 15,483 5,067 14,413
Total city clerk 261,229 238,210 23,019 • 227,326
Management information systems:
Salaries 129,276 130,832 1,556) 109,555
Employee benefits 67,036 67,991 955) 60,355
Purchased services 15,200 12,472 2,728 9,194
Supplies and maintenance 33,500 28,576 4,924 32,399
General and administrative 15,000 8,257 6,743 10,214
Capital outlay 11,380 11,380)
Total management information
systems 260,012 259,508 504 221,717
I
Finance:
Salaries 380,433 340,609 39,824 322,415
Employee benefits 218,856 206,060 12,796 197,208
Purchased services 26,000 18,690 7,310 26,805 I ,
Supplies and maintenance 55,000 51,568 3,432 61,469
General and administrative 23,200 18,213 4,987 17,536
Capital outlay 9,000 11,798 2,798) 8,853
Total finance 712,489 646,938 65,551 634,286
70
t
Exhibit H-2, continued
CITY OF SEWARD
General Fund
Schedule of Revenues, Expenditures and Change in Fund Balance-
Budget and Actual, continued
2009 2008
1 Variance
Positive
Budget Actual (Negative) Actual
Expenditures, continued:
General government, continued:
Community development:
Salaries 205,310 189,884 15,426 143,219
Employee benefits 106,593 109,883 3,290) 74,172
Purchased services 75,522 69,054 6,468 88,932
Supplies and maintenance 6,400 6,002 398 8,495
General and administrative 8,200 6,845 1,355 7,361
Capital outlay 5,232 5,232) 2,649
Total community development 402,025 386,900 15,125 324,828
General services:
Salaries 2,603
Employee benefits 1,000 1,000 223
Purchased services 42,900 37,062 5,838 69,605
Supplies and maintenance 19,650 18,308 1,342 46,676
General and administrative 76,308 40,628 35,680 54,315
Total general services 139,858 95,998 43,860 173,422
Contributions to organizations:
Senior Citizens 50,000 50,000 12,000
Museum 4,800 4,800 4,800
Chamber of Commerce 171,581 171,581 155,285
Providence Seward Medical Center 500,000
Other 75,000 86,340 11,340) 1,250
Total contributions to organizations 301,381 312,721 11,340) 673,335
Total general government 3,007,487 2,832,531 174,956 3,160,758
Public safety:
Police:
Salaries 979,549 892,678 86,871 818,420
Employee benefits 549,975 538,733 11,242 483,883
Purchased services 116,000 116,582 582) 113,681
Supplies and maintenance 55,230 57,097 1,867) 57,605
71
LI
Exhibit H-2, continued
CITY OF SEWARD
General Fund
Schedule of Revenues, Expenditures and Change in Fund Balance-
Budget and Actual, continued
2009 2008
Variance j
Positive J'
Budget Actual (Negative) Actual
Expenditures, continued:
Public safety, continued:
Police, continued:
General and administrative 59,142 51,216 7,926 62,228
Capital outlay 10,000 11.379 1,379) 19,106
Total police 1,769,896 1,667,685 102,211 1,554,923 1 1,
Jail:
Salaries 261,260 253,731 7,529 223,439
Employee benefits 168,528 171,608 3,080) 155,933
Purchased services 54,500 53,103 1,397 54,176
Supplies and maintenance 11,500 12,803 1,303) 9,841
General and administrative 98,530 90,520 8,010 90,196
Total jail 594,318 581,765 12,553 533,585
I
Animal control:
Purchased services 76,980 78,189 1,209) 77,339
Supplies and maintenance 8.000 755 7,245 342
Total animal control 84,980 78,944 6,036 77,681
Fire:
Salaries 162,965 172,486 9,521) 152,360
Employee benefits 95,379 110,271 14,892) 103,798
Purchased services 181,100 169,669 11,431 171,273
Supplies and maintenance 47,300 38,940 8,360 42,455
General and administrative 16,600 17,656 1,056) 17,332
Capital outlay 53.607 4,792 48,815 64,179
Total fire 556,951 513,814 43,137 551,397
Volunteer training:
Employee benefits 6,700 4,882 1,818 6,709
Purchased services 4,900 4,211 689 4,513
Supplies and maintenance 25,367 18,620 6,747 19,033
General and administrative 29,000 26,518 2,482 22,575
Total volunteer training 65,967 54,231 11,736 52,830
72
Exhibit H-2, continued
CITY OF SEWARD
General Fund
Schedule of Revenues, Expenditures and Change in Fund Balance-
Budget and Actual, continued
2009 2008
Variance
Positive
Budget Actual (Negative) Actual
Expenditures, continued:
V
Public safety, continued:
Emergency preparedness:
Purchased services 300 922 622) 814
Supplies and maintenance 1,750 1,071 679 857
General and administrative 3,825 1,658 2,167 3,120
Total emergency preparedness 5,875 3,651 2,224 4,791
Engineer and utility manager:
Salaries 29,309 26,045 3,264 33,149
Employee benefits 14,932 7,148 7,784 18,865
Purchased services 29,200 3,017 26,183 29,303
Supplies and maintenance 800 10 790 1,743
General and administrative 2.800 2.106 694 2,870
Total engineer and utility manager 77,041 38,326 38,715 85,930
Building inspector:
Salaries 70,415 48,961 21,454 63,267
Employee benefits 43,015 29,907 13,108 38,219
Purchased services 13,100 12,114 986 18,288
Supplies and maintenance 3,900 4,018 118) 4,761
General and administrative 8.400 2,083 6,317 2,856
Total building inspector 138,830 97,083 41,747 127,391
Total public safety 3,293,858 3,035,499 258,359 2,988,528
Public works:
Roads and streets:
Salaries 282,221 215,138 67,083 265,212
Employee benefits 157,661 113,281 44,380 149,715
Purchased services 337,000 339,686 2,686) 393,479
Supplies and maintenance 229,500 224,986 4,514 273,566
General and administrative 13,400 6,439 6,961 7,544
Capital outlay 17,802 17,802)
Total roads and streets 1,019,782 917,332 102,450 1,089,516
73
Exhibitb H-2, continued
CITY OF SEWARD
General Fund
Schedule of Revenues, Expenditures and Change in Fund Balance-
Budget and Actual, continued
2009 2008
Variance
Positive
Budget Actual (Negative) Actual
Expenditures, continued:
Public works, continued:
City shop:
Salaries 77,472 131,784 54,312) 83,553
Employee benefits 50,970 104,193 53,223) 60,008
Purchased services 85,750 62,744 23,006 80,367
Supplies and maintenance 60,000 38,869 21,131 56,738
General and administrative 14,000 8,841 5,159 10,052
Capital outlay 5,000 5,000 5,279
Total city shop 293,192 346,431 53,239) 295,997
Municipal building:
Salaries 79,182 75,392 3,790 70,701
Employee benefits 59,291 62,304 3,013) 60,539
Purchased services 113,800 100,061 13,739 91,421
Supplies and maintenance 72,000 73,817 1,817) 36,609
General and administrative 2,150 1,646 504 700
Capital outlay 5,000 5,000
Total municipal building 331,423 313,220 18,203 259,970
Total public works 1,644,397 1,576,983 67,414 1,645,483
Parks and recreation:
Salaries 586,789 571,971 14,818 528,665
Employee benefits 266,798 276,122 9,324) 259,981
Purchased services 245,650 233,164 12,486 231,178
Supplies and maintenance 106,800 97,594 9,206 106,858
General and administrative 33,100 26,367 6,733 26,566
Capital outlay 5,500 10,224 4,724)
Total parks and recreation 1,244,637 1,215,442 29,195 1,153,248
Library:
Salaries 175,706 170,409 5,297 155,707
Employee benefits 112,017 110,203 1,814 105,344
Purchased services 45,500 42,347 3,153 41,302
Supplies and maintenance 65,800 67,304 1,504) 38,178
General and administrative 23,350 31,754 8,404)23,899
Capital outlay 2,983
Total library 422,373 422,017 356 367,413
74
Exhibit H-2, continued
CITY OF SEWARD
General Fund
Schedule of Revenues, Expenditures and Change in Fund Balance-
Budget and Actual, continued
2009 2008
Variance
Positive
Budget Actual (Negative) Actual
Expenditures, continued:
Debt service:
paymentsalayments 156,322 102,695 53,627 98,999P
Retirement benefits 617,587 596,907 20,680 470,573
Interest and other costs 90,945 88,130 2,815 93,656
Total debt service 864,854 787,732 77,122 663,228
Total expenditures 10,477,606 9,870,204 607,402 9,978,658
Excess of revenues over
expenditures 1,374,796 1,210,793 (164,003) 618,733
Other financing sources (uses):
Transfers in 1,759,226 1,766,867 7,641 1,395,678
Transfers out 1,538,707) (1,320,416) 218,291 (1,923,614)
Net other financing sources (uses) 220,519 446,451 225,932 (527,936)
Net change in fund balance 1,595,315 1,657,244 61,929 90,797
Beginning fund balance 4,109,627 4,018,830
Ending fund balance 5,766,871 4,109,627
75
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76
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.
Parks and Recreation — To account for grants related to the support of recreation
programs designed to engage the community in healthy, active lifestyles, and to provide
education and recreation programs directed towards Seward's youth.
Two Lakes Park — To account for acquisition of land, survey and development of the
park area, including site preparation,picnic tables, and other improvements.
Computer Network—The City of Seward is converting its telephone and interne 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 VOIP equipment, including
telephones, cables, software, servers and other peripherals, as well as installation and
service costs. •
Historical Records Preservation — To account for the costs of preserving the City's
historical records. Funding is provided by a State grant and the City.
Natural Disasters — To account for the costs associated with the October 2006 flood
disaster.
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.
Fire Response — The purpose of this fund is to account for expenditures of the Fire
Department that were incurred while responding to a fire located in the Forest Services
jurisdiction and the related receivables resulting from the billings to Forest Services.
77
Exhibit I-1
CITY OF SEWARD
Special Revenue Funds
Combining Balance Sheet
December 31, 2009
Parks and Public Public
Recreation General Government Works Library Safety
Two Historical
Litter Lakes Computer Records Natural Fire
Assets Control Park Network Preservation Disasters Library Response Total
Cash and investments $ 446 2,520 75,341 3,447 81,754
Grants receivable 77,286 59,634 3,679 140,599
Other receivables 17,863 1,913 19,776
Total assets 446 2,520 75,341 77,286 59,634 24,989 1,913 242,129
Liabilities and
Fund Balances.
Liabilities:
Accounts payable 17,760 5,401 23,161
Deferred revenue 446 8,150 8,596
Due to other funds 77,286 30,843 1,913 110,042
Total liabilities 446 77,286 48,603 13,551 1,913 141,799
Fund balances -unreserved
and undesignated 2,520 75,341 11,031 11,438 100,330
Total liabilities and
fund balances $ 446 2,520 75,341 77,286 59,634 24,989 1,913 242,129
78
i J
Exhibit 1-2
CTTY OF SEWARD
Special Revenue Funds
Combining Statement of Revenues, Expenditures
and Change in Fund Balances
Year Ended December 31,2009
Parks and Public
Recreation General Government Public Works Library Safety _
Two Historical Fish
Litter Parks and Lakes Computer Records Natural Ditch Fire
Control Recreation Park Network Preservation Disasters Restoration Library Response Total
Revenues:
Intergovernmental 36,000 41,186 10,898 16,183 1,629 105,896
Local grants 4,554 14,011 39,918 58,483
Other 1,913 1,913
Total revenues 4,554 36,000 41,186 24,909 16,183 41,547 1,913 166,292
Expenditures:
Salaries and employee benefits 4,455 1,383 592 1,913 8,343
Contracted services 2,040 41,186 24,909 15,141 40,919 124,195
Supplies 99 i 7,587 450 291 8,427
General and administrative • 36,000 200 36,200
Capital outlay 306,273 306,273
Total expenditures 4,554 36,000 317,283 41,186 24,909 ' 16,183 41,410 1,913 483,438
Excess of revenues over
under) expenditures 317,283) 137 317,146)
Other financing sources -
transfers in 8,150 8,150
Net change in fund
balances 317,283) 8,287 308,996)
Beginning fund balances 2,520 392,624 11,031 3,151 409,326
Ending fund balances 2,520 75,341 11,031 11,438 100,330
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80
DEBT SERVICE FUNDS
Hospital—The Hospital Debt Service Fund was established to account for the accumulation of resources
for payment of the $7.5 million in general obligation bonds issued for construction of a hospital facility.
The revenue source for repayment of the bonds is a 1% sales tax, equal to one-fourth of the General
Fund's 4% sales tax revenues.
Seward Mountain Haven—The Seward Mountain Haven Debt Service Fund was established to account
for the accumulation of resources for repayment of the $27 million in revenue bonds issued on March
18, 2008, to construct, equip, and furnish a new long-term care facility. The revenues to repay the bonds
come from the capital cost component of patient charges at Seward Mountain Haven.
81
Exhibit J-1
CITY OF SEWARD
Debt Service Funds
Combining Balance Sheet
December 31, 2009
Seward
Mountain
Assets Hospital Haven Total
Cash and investments 542,015 542,015
Other receivables 635,682 635,682
Total assets 542,015 635,682 1,177,697
Fund Balances
Fund balances - reserved for debt service 542,015 635,682 1.l 77,697
82
Exhibit J-2
CITY OF SEWARD
Debt Service Funds
Combining Statement of Revenues, Expenditures
and Change in Fund Balances
Year Ended December 31, 2009
Seward
Mountain
Hospital Haven Total
Revenues:
Investment income 1,419 1,419
Transfers from Providence Seward Medical Center 635,682 635,682
Total revenues 1,419 635,682 637,101
Expenditures:
Principal payments 685,000 685,000
Interest and other costs 107,169 107,169
Other services and charges 500,000 500,000
Total expenditures .1,292;169 1,292,169
Excess of revenues over (under) expenditures (1,290,750) 635,682 655;068)
Other financing sources (uses):
Transfers in 904,209 904,209
Transfers out 1 34,704)134,704) .
Net other financing sources (uses) 769,505 769,505
Net change in fund balances 521,245) 635,682 114,437
Beginning fund balances 1,063,260 1,063,260
Ending fund balances 542,015 635,682 1.177,697
83
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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.
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.
Streets and Sidewalks - To account for the costs of repairs to existing streets and
sidewalks.
85
Exhibit K-1
CITY OF SEWARD
Nonmajor Capital Project Funds
Combining Balance Sheet
December 31, 2009
Parks and Public
Recreation Public Safety General Government Works
Water Fire Streets
Hoben Front Department 4th and Capital and
Assets Park Pavilion Equipment Adams Acquisition Sidewalks Total
Cash and investments 18,125 7,293 • 581 8,524 276,768 11,236 322,527
Liabilities and Fund Balances
GO Liabilities:
Accounts payable 581 25,240 25,821
Deferred revenue 5,341 5,341
Total liabilities 581 30,581 31,162
Fund balances - unreserved-
designated for capital improvements 18,125 7,293 8,524 246,187 11,236 291,365
Total liabilities and fund balances $18,125 7,293 581 8,524 276,768 • 11,236 322,527
Exhibit K-2
CITY OF SEWARD
Nonmajor Capital Project Funds
Combining Statement of Revenues, Expenditures
and Change in Fund Balances
Year Ended December 31, 2009
Parks and Public
Recreation Public Safety General Government Works
Water Fire Streets
Hoben Front Department Police 4th and Capital and
Park Pavilion Equipment Equipment Adams Acquisition Sidewalks Total
Revenues - intergovernmental 350,000 19,074 55,405 137,298 561,777
Expenditures:
Contracted services 30,119 241 80,000 110,360
Supplies 325 10,256 1,273 11,854
Land, buildings and equipment 312,000 16,509 55,405 214,932 598,846
Other services and charges 261 1,051 1,312
Total expenditures 325 352,636 19,074 55,405 294,932 722,372
Excess of revenues over
under) expenditures 325) (2,636) 157,634) 160,595)
Other financing sources (uses):
Transfers in 267,827 267,827
Transfers out 25,000) 25,000)
Net other financing sources (uses)242,827 242,827
Net change in fund balances 325) (2,636) 85,193 82,232
Beginning fund balances 18,450 9,929 8,524 160,994 11,236 209,133
Ending fund balances 18,125 7,293 8,524 246,187 11,236 291,365
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88
ENTERPRISE FUNDS
Enterprise Funds are established to account for the financing of self-supporting activities ofPfinancingPPg
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.
89
Exhibit L-1
CITY OF SEWARD
Electric Enterprise Fund
Statement of Net Assets
December 31, 2009
With Comparative Amounts for 2008)
Assets 2009 2008
Current assets:
Cash and investments 1,334,884 3,103,126
Receivables:
Accounts 727,146 884,132
Assessments 2,096 4,435
Grants 50,610
Accrued interest 67,798
Interfund loan 15,138 14,383
Other 35,948 18,925
Less allowance for doubtful accounts 73,858) . .(39,786)
Net receivables 706,470 1,000,497
Prepaid expenses 9,950
Inventory 898,327 892,979
Total current assets 2,939,681 5,006,552
Restricted cash and investments:
Bond retirement 677,911 677,911
Capital projects 4,513,668 6,974,191
Total restricted cash and investments 5,191,579 7,652,102
Assessments receivable, net of current portion 17,927 23,031
Note receivable - PSMC 10,000 115,000
Interfund loan, net of current portion 384,676 399,813
Property, plant and equipment:
Land and land rights 230,951 230,951
Buildings 281,474 281,474
Improvements other than buildings 38,016,274 37,831,391
Equipment 7,491,200 7,367,414
Total property, plant and equipment in service 46,019,899 45,71 1,230
Less accumulated depreciation 29,203,837) (27,777,45
Net property, plant and equipment in service 16,816,062 17,933,772
Construction in progress 6,036,454 893,486
Total property, plant and equipment 22,852,516 18,827,258
Deferred charges - unamortized debt issuance costs 128,006 136,431
Total assets 31,524,385 32,160,187
90
1
Exhibit L-1, continued
it
CITY OF SEWARD
Electric Enterprise Fund
Statement of Net Assets, continued
2009 2008
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accounts payable 736,792 690,322
Accrued payroll and related liabilities 32,438 19,095
Accrued interest 30,047 31,124
Current portion:
Bonds payable 315,000 305,000
Accrued annual leave 5 17,375 15,843
Customer deposits 173,931 215,987
Deferred revenue 20,087 89,232
Total current liabilities 1,325,670 1,366,603
Noncurrent liabilities, net of current portion:
Accrued annual leave 52,124 46,532
Bonds payable 7,060,000 7,375,000
Unamortized bond premium. 75,247 83,613
Total noncurrent liabilities 7,187,371 7,505,145
Total liabilities 8,513,041 8,871,748
Net assets:
Invested in capital assets, net of related debt 15,402,269 17,063,645
Restricted for bond retirement 677,911 677,911
Unrestricted 6,931,164 5,546,883
Total net assets 23,011,344 23,288,439
Total liabilities and net assets 31,524,385 32,160,187
91
Exhibit L-2
CITY OF SEWARD
Electric Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2009
With Comparative Amounts for 2008)
2009 2008
Operating revenues:
Residential 2,831,034 2,670,579
Small general service 1,445,536 1,365,748
Large general service 3,237,743 3,305,699
Industrial 1,062,875 800,877
Harbor power 293,913 196,318
Street and yard lights 66,422 66,060
Miscellaneous 123,113 159,899
Total operating revenues 9,060,636 8,565,180
Operating expenses:
Power 5,731,939 4,567,749
Distribution 496,717 318,498
Administration and general 2,360,498 2,189,721
Depreciation 1,414,379 1,391,915
Total operating expenses 10,003,533 8,467,883
Earnings (loss) from operations 942,897) 97,297
Nonoperating revenues (expenses):
Intergovernmental 19,627 16,731
Investment income 112,621 355,550
Interest expense 336,590) (200,488)
Other expenses 43,677)19,564)
Net nonoperating revenues (expenses) 248,019)152,229
Earnings (loss) before contributions, transfers and special item 1,190,916)249,526
Capital contributions 1,968,952 442,423
Transfers out 1,055,131) (714,082)
Special item -write-off NPO/OPEB 12,298
Change in net assets 277,095) 9,835)
Beginning net assets 23,288,439 23,298,274
Ending net assets 23,011,344 23,288,439
Of the total depreciation expense of$1,414,379 above, $855,565 was attributable to capital assets that
were funded with capital contributions.)
92
Exhibit L-3
CITY OF SEWARD
Electric Enterprise Fund
Statement of Cash Flows
Year Ended December 31,2009
With Comparative Amounts for 2008)
2009 2008
Cash flows from operating activities:
Receipts from customers and users 9,123,470 8,702,877
Payments to suppliers 6,673,315) (5,067,435)
Payments to employees 1,046,939) (994,171)
1 Payments for interfund services used 812,986) (745,152)
Net cash flows from operating activities 590,230 1,896,119
Cash flows from noncapital financing activities-transfers out 1,055,131) (714,082)
Cash flows from capital and related financing activities:
Issuance of long-term debt 6,034,165
Bond issuance costs 105,622)
Principal payments on long-term debt 305,000) (205,000)
Interest payments on long-term debt 329,301) (159,320)
Acquisition of property,plant and equipment 5,456,369) (1,339,408)
Received on note receivable 105,000
Capital contributions received 2,027,005 287,482
Net cash flows from capital and related financing activities 3,958,665) 4,512,297
Cash flows from investing activities:
Investment income received 180,419 310,215
Interfund loan receipts 14,382 13,666
Net cash flows from investing activities 194,801 323,881
Net increase(decrease)in cash and investments 4,228,765) 6,018,215 .
Beginning cash and investments 10,755,228 4,737,013
Ending cash and investments 6,526,463 10,755,228
Reconciliation of cash and investments to statement of net assets:
Current assets 1,334,884 3,103,126
Restricted assets 5,1 91,579 7,652,102
6,526,463 10,755,228
Reconciliation of earnings(loss)from operations to net cash
provided(used)by operating activities:
Earnings(loss)from operations 942,897) 97,297
Adjustments to reconcile earnings(loss)from operations to net
cash flows from operating activities:
Depreciation 1,414,379 1,391,915
Amortization of debt issuance costs 8,425 8,425
Other nonoperating expenses 43,677) (19,564)
Noncash expense-PERS relief 19,627 16,731
Increase in allowance for doubtful accounts 34,072 4,351
Increase(decrease)in assets:
Receivables 139,963 84,819
Prepaid expenses 9,950
Inventory 5,348) 503)
Increase(decrease)in liabilities:
Accounts payable 46,470 260,659
Accrued payroll and related liabilities 13,343 2,481
Accrued annual leave 7,124 981
Customer deposits 42,056)9,105
Deferred revenue 69,145) 39,422
Net cash flows from operating activities 590,230 1,896,1 19
93
Exhibit L-4
CITY OF SEWARD
Electric Enterprise Fund
Schedule of Operating Expenses
Year Ended December 31, 2009
With Comparative Amounts for 2008)
2009 2008
Power:
Salaries and employee benefits 5,425 11,075
Purchased services 77,296 88,309
Power for resale 5,514,338 4,414,335
Supplies, maintenance and other 134,880 54,030
Total power 5,731,939 4,567,749
Distribution:
Salaries and employee benefits 307,555 311,776
Salary credits -work orders 114,916) (168,164)
Purchased services 69,516 43,544
Supplies and maintenance 346,319 272,382
Supply credits - work orders 112,960) (143,010)
Administration and general 1,203 1,970
Total distribution 496,717 318,498
Administration and general:
Salaries and employee benefits 888,969 859,677
Purchased services 279,492 283,885
Supplies and maintenance 137,408 91,359
Administrative fee 812,986 745,152
Other 241,643 209,648
Total administration and general 2,360,498 2,189,721
Depreciation 1,414,379 1,391,915
Total operating expenses 10,003,533 8,467,883
94
L
Exhibit L-5
CITY OF SEWARD
Electric Enterprise Fund
Schedule of Composition of Net Assets
1 December 31, 2009
With Comparative Amounts for 2008)
2009 2008
Grants and other external contributions 27,789,421 25,820,469
Related accumulated amortization 15,328,360) (14,472,795)
City-generated equity 10,550,283 11,940,765
Total net assets 23,011,344 23,288,439
95
Exhibit L-6
CITY OF SEWARD
Electric Enterprise Fund
Schedule of Electric Capital Projects.
Year Ended December 31, 2009
Standby
Electric
Generation
Project
Funding sources:
State grant 1,836,703
Electric Fund 3,306,265
Total funding sources 5,142,968
Capital outlay:
Salaries and employee benefits 63,056
Contracted services 4,761,870
Other services.and charges .. 318,042
Total capital outlay 5,142,968
96
S
Exhibit L-7
CITY OF SEWARD
Water Enterprise Fund
Statement of Net Assets
December 31,2009
With Comparative Amounts for 2008)
Assets 2009 2008
Current assets:
Cash and investments S 1.565,841 1,287,123
Receivables:
Accounts 73,545 66,665
Assessments 7,069 6,814
Grants and loans 594,510 720,955
Less allowance for doubtful accounts 5,192)3,000)
Net receivables 669,932 791,434
Inventory 69,605 64,719
Total current assets 2,305,378 2,143,276
Restricted cash and investments-capital projects 141,594 140.354
Assessments receivable,net of current portion 31,810 38,880
Note receivable-PSMC 83,000
Interfund loan 1,973,360 1,973,360
Property,plant and equipment:
Land and land rights 2,507 2.507
Buildings 1,287,854 1,287,853
Improvements other than buildings 5,826,138 5,822,987
Equipment 1.240,784 1.2 30.472
Total property,plant and equipment in service 8,357.283 8,343,819
Less accumulated depreciation 3,671,131) (3,456,222)
Net property,plant and equipment in service 4,686,152 4,887,597
Construction in progress 381,768 381,768
Total property,plant and equipment 5.067,920 5,269,365
Total assets S 9.520,062 9.648,235
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accounts payable 609,850 606,676
Accrued payroll and related liabilities 5,868 4,901
Accrued interest 74,607 74,415
Current portion:
Accrued annual leave 3,475 5,834
Notes payable 95,636 127,118
Total current liabilities 789,436 818,944
Noncurrent liabilities,net of current portion:
Accrued annual leave 10,424 11,846
Notes payable 3,151,559 3,120,077
Total noncurrent liabilities 3,161,983 3,131,923
Total liabilities 3,951,419 3,950,867
Net assets:
Invested in capital assets,net of related debt 1.820,725 2,022,172
Unrestricted 3,747,918 3,675,196
Total net assets 5,568,643 5,697,368
Total liabilities and net assets S 9,520,062 9,648,235
97
Exhibit L-8
CITY OF SEWARD
Water Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2009
With Comparative Amounts for 2008)
2009 2008
Operating revenues:
Residential 359,181 358,347
Small general service 124,947 104,193
Large general service 156,038 159,245
Industrial 119,711 145,287
Seward Marine Industrial Center 51,795 64,015
Ship water sales 81,390 106,616
Miscellaneous 79,651 60,838
Total operating revenues 972,713 998,541
Operating expenses:
Salaries and benefits 265,439 257,891
Purchased services 247,577 203,931
Supplies and maintenance 92,900 102,182
Administration and general 224,280 205,567
Other 18,887 17,902
Depreciation 214,909 224,309
Total operating expenses 1,063,992 1,011,782
Loss from operations 91,279) (13,241)
Nonoperating revenues (expenses):
Intergovernmental 15,984 83,184
Compliance study and design 111,293)
Investment income 29,529 113,713
Interest expense 192) (74,415)
Net nonoperating revenues (expenses) 45,321 11,189
Loss before contributions, transfers and special item 45,958)2,052)
Capital contributions 83,000
Transfers out 82,767) (84,883)
Special item - write-off NPO/OPEB 16,527
Change in net assets 128,725)12,592
Beginning net assets 5,697,368 5,684,776
Ending net assets 5,568,643 5,697,368
Of the total depreciation expense of$214,909 above, $34,800 was attributable to capital assets that were
funded with capital contributions.)
98
Exhibit L-9
CITY OF SEWARD
Water Enterprise Fund
Statement of Cash Flows
Year Ended December 31,2009
With Comparative Amounts for 2008)
2009 2008
Cash flows from operating activities:
Receipts from customers and users 968,025 1,006,145
Payments to suppliers 361,076) (484,965)
Payments to employees 254,375) (238,002)
Payments for interfund services used 224,280) (205,567)
Net cash flows from operating activities 128,294 77,611
Cash flows from noncapital financing activities:
Transfers out 82,767) (84,883)
Noncapital intergovernmental revenues received 2,106 70,243
Interfund loan to General Fund 1,973,360)
Net cash flows from noncapital financing activities 80,661) (1,988,000)
Cash flows from capital and related financing activities:
Acquisition of property,plant and equipment 13,464) (117,494)
Received on note and loan receivable 180,755
Capital contributions received 35,505 6,833
Net cash flows from capital and related financing activities 202,796 (110,661)
Cash flows from investing activities-investment income received 29,529 . 113,713
Net increase(decrease)in cash and investments 279,958 (1,907,337)
Beginning cash and investments 1,427,477 3,334,814
Ending cash and investments 1,707,435 1,427,477
Reconciliation of cash and investments to statement of net assets:
Current assets 1,565,841 1,287,123
Restricted assets 141,594 140,354
1,707,435 1,427,477
Reconciliation of loss from operations to net cash
provided(used)by operating activities:
Loss from operations 91,279) (13,241)
Adjustments to reconcile loss from operations
to net cash flows from operating activities:
Depreciation 214,909 224,309
Noncash expense-PERS relief 13,878 12,361
Nonoperating expenses-compliance study 111,293)
Increase(decrease)in allowance for doubtful accounts 2,192 358)
Increase)decrease in assets:
Accounts receivable 6,880) 7,962
Inventory 4,886) (18,413)
Increase(decrease)in liabilities:
Accounts payable 3,174 31,244)
Accrued payroll and related liabilities 967 1,652
Accrued annual leave 3,781) 5,876
Net cash flows from operating activities 128,294 77,611
99
Exhibit L-10
CITY OF SEWARD
Water Enterprise Fund
Schedule of Composition of Net Assets
December 31, 2009
With Comparative Amounts for 2008)
2009 2008
Grants and other external contributions 2,457,610 2,457,610
Related accumulated amortization 1,800,916) (1,766,117)
Contributions from other funds 498,756 498,756
City-generated equity 4,413,193 4,507,119
Total net assets 5,568,643 5,697,368
100
Exhibit L-11
CITY OF SEWARD
Wastewater Enterprise Fund
Statement of Net Assets
December 31,2009
With Comparative Amounts for 2008)
Assets 2009 2008
Current assets:
Cash and investments 395,033 356,104
Receivables:
Accounts 81,009 74,250
Less allowance for doubtful accounts 5,905) 3,341)
Net receivables 75,104 70,909
Total current assets 470,137 427,013
Restricted cash and investments-capital projects 187,820 207,560
Note receivable-PSMC 239,600
Property,plant and equipment:
Land and land rights 111,011 111,011
Buildings 2,418,399 2,418,399
Improvements other than buildings 8,952,968 8,952,968
Equipment 292,907 292,907
Total property,plant and equipment in service 11,775,285 11,775,285
Less accumulated depreciationP 6.627,316) (6,346,887)
1 Net property,plant and equipment in service 5,147,969 5,428,398
Construction in progress 354,108 96,880
Total property,plant and equipment 5,502,077 5,525,278
Total assets 6,160,034 6,399,451
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accounts payable 8,108 8,160
Accrued payroll and related liabilities 6,372 5,231
Accrued interest 565 699
Current portion:
Accrued annual leave 3,135 3,526
Notes payable 58,415 57,571
Total current liabilities 76,595 75,187
Noncurrent liabilities,net of current portion:
Accrued annual leave 9,405 16,421
Notes payable 181,763 240,191
I
Total noncun-ent liabilities 191,168 256,612
Total liabilities 267,763 331,799
Net assets:
Invested in capital assets,net of related debt 5,261,899 5,227,516
Unrestricted 630,372 840,136
Total net assets 5,892,271 6,067,652
Total liabilities and net assets 6,160,034 6,399,451
101
Exhibit L-12
CITY OF SEWARD
Wastewater Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2009
With Comparative Amounts for 2008)
2009 2008
Operating revenues:
Residential 445,190 442,273
Small general service 107,520 110,287
Large general service 179,191 179,035
Seward Marine Industrial Center 40,898 49,878
Miscellaneous 23,655 19,622
Total operating revenues 796,454 801,095
Operating expenses:
Salaries and benefits 236,385 236,490
Purchased services 179,994 137,171
Supplies and maintenance 62,679 102,461
Administration and general 142,232 126,851
Other 12,637 21,166
Depreciation 280,429 275,745
Total operating expenses 914,356 899,884
Loss from operations 117,902) (98,789)
Nonoperating revenues (expenses):
Intergovernmental 11,842 11,980
Investment income 3,678 26,576
Interest expense 4,332)5,054)
Net nonoperating revenues (expenses) 11,188 33,502
Loss before contributions, transfers and special item 106,714) (65,287)
Capital contributions 239,600
Transfers out 68,667) (69,087)
Special item -write-off NPO/OPEB 19,537
Change in net assets 175,381) 124,763
Beginning net assets 6,067,652 5,942,889
Ending net assets 5,892,271 6,067,652
Of the total depreciation expense of$280,429 above, $219,722 was attributable to capital assets that
were funded with capital contributions.)
102
Exhibit L-13
CITY OF SEWARD
Wastewater Enterprise Fund
Statement of Cash Flows
Year Ended December 31, 2009
With Comparative Amounts for 2008)
2009 2008
Cash flows from operating activities:
Receipts from customers and users 792,259 797,928
Payments to suppliers 255,362) (260,852)
Payments to employees 230,809) (221,922)
Payments for interfund services used 142,232) (126,851)
Net cash flows from operating activities 163,856 188,303
Cash flows from noncapital financing activities -transfers out 68,667)69,087)
Cash flows from capital and related financing activities:
Principal payments on long-term debt 57,584)56,740)
Interest payments on long-term debt 4,466) 5,316)
Acquisition of property,plant and equipment 257,228) (244,765)
Received on note receivable 239,600
Net cash flows from capital and related financing activities 79,678) (306,821)
Cash flows from investing activities -investment income received 3,678 26,576
Net increase (decrease) in cash and investments 19,189 161,029)
Beginning cash and investments 563,664 724,693
Ending cash and investments 582,853 563,664
Reconciliation of cash and investments to statement of net assets:
Current assets 395,033 356,104
Restricted assets 187,820 207,560
582,853 563,664
Reconciliation of loss from operations to net cash provided
used)by operating activities:
Loss from operations 117,902)98,789)
Adjustments to reconcile loss from operations
to net cash flows from operating activities:
Depreciation 280,429 275,745
Noncash expense -PERS relief 11,842 11,980
Increase in allowance for doubtful accounts 2,564 6
Increase) decrease in assets -accounts receivable 6,759) 148)
Increase (decrease) in liabilities:
Accounts payable 52) 54)
Accrued payroll and related liabilities 1,141 1,595
Accrued annual leave 7,407) 993
Customer deposits 3,025)
Net cash flows from operating activities 163,856 188,303
103
Exhibit L-14
CTI'Y OF SEWARD
Wastewater Enterprise Fund
Schedule of Composition of Net Assets
December 31, 2009
With Comparative Amounts for 2008)
2009 2008
Grants and other external contributions 10,155,599 10,155,599
Related accumulated amortization 6,368,612) (6,148,889)
Contributions from other funds 161,550 161,550
City-generated equity 1,943,734 1,899,392
Total net assets 5,892,271 6,067,652
I4-
104
Exhibit L-15
CITY OF SEWARD
Harbor Enterprise Fund
Statement of Net Assets
December 31,2009
r With Comparative Amounts for 2008)
Assets 2009 2008
Current assets:
Cash and investments 1.154,293 1.523.686
Receivables:
Accounts 138,580 151,217
Grants 545,577 98,833
Commercial passenger vessel tax 387,413 345,748
Assessments 4,286 4,108
Less allowance for doubtful accounts 19,100)24,588)
Net receivables 1,056,756 575,318
Total current assets 2,211,049 2.099,004
Restricted cash and investments:
Bond retirement 859,348 859,348
Capital projects 1,250,345 1.066,487
Total restricted cash and investments 2.109,693 1,925,835
Assessments receivable,net of current portion 19,289 23,575
r-
Property,plant and equipment:
Land and land rights 5,117,479 5,117,479
Buildings 610,169 615,287
Improvements other than buildings 22.416,800 23,641,185
Equipment 1,375,592 1,397,384
Total property,plant and equipment in service 29,520,040 30,771.335
Less accumulated depreciation 8.919,631) (9,052.731)
Net property,plant and equipment in service 20,600,409 21,718,604
Construction in progress 1,904,850 1,413.852
Total property,plant and equipment 22,505,259 23,132,456
Deferred charges-unamortized debt issuance costs 91,071 97,000
Total assets 26.936,361 27,277.870
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accounts payable 164,680 93,982
Accrued payroll and related liabilities 20,962 19,293
Accrued interest 40,199 43,907
Current portion:
Bonds payable 360,000 340,000
Interfund loan 20,088 19,040
Accrued annual leave 13,968 14,606
Deferred revenue 869,665 848,015
Utility deposits 42,155 935
Total current liabilities 1.531,717 1,379,778
Noncurrent liabilities,net of current portion:
Accrued annual leave 41,903 30,131
Bonds payable 7,265,000 7,625,000
Interfund loan 145,975 166,063
Unamortized bond premium 121,096 129,471
Unamortized deferred loss on refunding 77,410)83,861)
Total noncurrent liabilities 7,496,564 7,866,804
Total liabilities 9,028,281 9,246,582
Net assets:
Invested in capital assets,net of related debt 14,836,573 15,121,846
Restricted for capital projects and bond retirement 1,432,601 699,601
Unrestricted 1,638,906 72,09,841
Total net assets 17,908,080 18,031,288
Total liabilities and net assets 26,936,361 27,277,870
105
Exhibit L-16
CITY OF SEWARD
Harbor Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2009
With Comparative Amounts for 2008)
2009 2008
Operating revenues:
Moorage 1,372,024 1,353,666
Wharfage 33,766 51,729
Boat lift fees 89,247 83,909
Power sales 186,246 232,243
Rentals and leases 301,383 290,796
Passenger transit fees 503,283 657,248
Miscellaneous 110,975 107,085
Total operating revenues 2,596,924 2,776,676
Operating expenses:
Salaries and benefits 883,859 839,212
Purchased services 344,283 319,136
Power for resale 187,645 147,197
Supplies and maintenance 102,004 163,059
Administration and general 386,194 185,940
Depreciation 1,122,742 1,012,180 I
Total operating expenses 3,026,727 2,666,724
Earnings (loss) from operations 429,803) 109,952
Nonoperating revenues (expenses):
Intergovernmental 394,883 44,797
Investment income 36,013 120,152
Commercial passenger vessel tax 771,065 713,178
Interest expense 361,088) 379,907)
Breakwater design 500,000)
Dredging 99,832)
Net nonoperating revenues (expenses) 241,041 498,220
Earnings (loss)before contributions, transfers and special item 188,762) 608,172
Capital contributions 385,649 2,003,982
Transfers out 320,095) 319,595)
Special item-write-off NPO/OPEB 91,590
Change in net assets 123,208) 2,384,149
Beginning net assets 18,031,288 15,647,139
Ending net assets 17,908,080 18,031,288
Of the total depreciation expense of$1,122,742 above, $653,625 was attributable to capital assets that were
funded with capital contributions.)
106
Exhibit L-17
CiTY OF SEWARD
Harbor Enterprise Fund
Statement of Cash Flows
Year Ended December 31,2009
I With Comparative Amounts for 2008)
2009 2008
Cash flows from operating activities:
Receipts from customers and users 2,666,943 2,847,560
Payments to suppliers 1,157,137) (620,377)
Payments to employees 821,742) (804,071)
Payments for interfund services used 386,194) (185,940)
Net cash flows from operating activities 301,870 1,237,172
Cash flows from noncapital financing activities:
Transfers out 320,095) (319,595)
Nonoperating intergovernmental revenues received 245,737
Net cash flows from noncapital financing activities 74,358) (319,595)
Cash flows from capital and related financing activities:
Principal payments on long-term debt 340,000) (325,000)
Interest payments on long-term debt 362,872) (385,376)
Acquisition of property,plant and equipment 495,285) (3,750,907)
Capital contributions received 38,737 2,592,130
Interfund loan payment 19,040)18,048)
Commercial passenger vessel tax receipts 729,400 367,430
Net cash flows from capital and related financing activities 449,060) (1,519,771)
Cash flows from investing activities-investment income received 36,013 120,152
Net decrease in cash and investments 185,535) (482,042)
Beginning cash and investments 3,449,521 3,931,563
Ending cash and investments 3,263,986 3,449,521
Reconciliation of cash and investments to statement of net assets:
Current assets 1,154,293 1,523,686
Restricted assets 2,109,693 1,925,835
3,263,986 3,449,521
Reconciliation of earnings(loss)from operations to net cash
provided(used)by operating activities:
Earnings(loss)from operations 429,803)109,952
Adjustments to reconcile earnings(loss)from operations to net cash
flows from operating activities:
Depreciation 1,122,742 1,012,180
Amortization of debt issuance costs 5,929 5,929
Noncash expense-PERS relief 49,314 44,797
Nonoperating expenses 599,832)
Increase(decrease)in allowance for doubtful accounts 5,488) 1,709
Increase)decrease in assets-receivables 12,637 19,576
Increase(decrease)in liabilities:
Accounts payable 70,698 3,086
Accrued payroll and related liabilities 1,669 19,936)
Accrued annual leave 11,134 10,280
Utility deposits 41,220
Deferred revenue 21,650 49,599
Net cash flows from operating activities 301,870 1,237,172
107
Exhibit L-18
CITY OF SEWARD
Harbor Enterprise Fund
Schedule of Composition of Net Assets
December 31, 2009
iI
With Comparative Amounts for 2008)
2009 2008
Grants and other external contributions 19,439,324 19,053,675
Related accumulated amortization 5,955,838) (5,302,213)
Contributions from other funds 4,060,270 4,060,270
City-generated equity 364,324 219,556
Total net assets 17,908,080 18,031,288
108
Exhibit L-19
CI'I'Y OF SEWARD
Harbor Enterprise Fund
Combining Schedule of Harbor Capital Projects
Year Ended December 31, 2009
SBH
Harbor Repairs and
Expansion Renovations Totals
Funding sources:
State grants 245,437 245,437
Federal grants 385,650 385,650
z Harbor Fund (reimbursement) 240,457) 100,069 (140,388)
Total fundin g sources 390,630 100,069 490,699
Capital outlay:
Contracted services 390,930 90,384 481,314
Other services and charges 9,685 9,685
Total capital outlay 390,930 100,069 490,999
II
109
Exhibit L-20
CITY OF SEWARD
Seward Marine Industrial Center Enterprise Fund
Statement of Net Assets
December 31, 2009
With Comparative Amounts for 2008)
Assets 2009 2008
Current assets:
Cash and cash equivalents 18,918 126,457
Accounts receivable 36,522 31,988
Total current assets 55,440 158,445
Property, plant and equipment:
Land and land rights 12,021,821 12,021,821
Buildings 280,287 277,047
Improvements other than buildings 26,798,104 26,798,104
Equipment 908,789 908,789
Docks and floats 13,145,688 13,145,688
Total P P YP equipmentroertplantandeuiment in service 53,154,689 53,151,449
Less accumulated depreciation 26,358,011) (25,715,490)
Net property, plant and equipment in service 26,796,678 27,435,959
Total assets 26;852,118 27,594,404
i
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accounts payable 2,323 45,262
Accrued payroll and related liabilities 1,888 1,083
Accrued interest 310 448
Current portion of bonds payable 55,094 55,094
Deferred revenue 24,728 19,626
Total current liabilities 84,343 121,513
Noncurrent liabilities, net of current portion -
bonds payable 59,030 114,124
Total liabilities 143,373 235,637
Net assets:
Invested in capital assets, net of related debt 26,682,554 27,266,741
Unrestricted 26,191 92,026
Total net assets 26,708,745 27,358,767
Total liabilities and net assets 26,852,118 27,594,404
110
Exhibit L-21
CITY OF SEWARD
Seward Marine Industrial Center Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2009
With Comparative Amounts for 2008)
2009 2008
Operating revenues:
Moorage 2,678 704
Wharfage 9,718 2,590
Boat lift fees 96,306 118,350
Storage 55,729 81,059
Rentals and leases 71,429 72,573
Power sales 27,501 24,779
Miscellaneous 414 4,462
Total operating revenues 263,775 304,517
Operating expenses:
Salaries and benefits 89,093 97,237
Purchased services 110,186 116,516
Supplies and maintenance 60,748 39,352
Administration and general 77,099 199,908
Depreciation 642,521 642,635
Miscellaneous 5,585 47,216
Total operating expenses 985,232 1,142,864
Loss from operations 721,457) (838,347)
Nonoperating revenues (expenses):
Intergovernmental 2,892 2,892
Investment income 1,080 7,773
Interest expense 5,234) 6,589)
Net nonoperating revenues (expenses) 1,262) 4,076
Loss before transfers 722,719) (834,271)
Transfers in 140,230 348,655
Transfers out 67,533)54,100)
Change in net assets 650,022) (539,716)
Beginning net assets 27,358,767 27,898,483
Ending net assets 26,708,745 27,358,767
Of the total depreciation expense of$642,521 above, $523,543 was attributable to capital assets that were
funded with capital contributions.)
111
Exhibit L-22
CITY OF SEWARD
Seward Marine Industrial Center Enterprise Fund
Statement of.Cash Flows
Year Ended December 31, 2009
With Comparative Amounts for 2008)
2009 2008
Cash flows from operating activities:
Receipts from customers and users 264,343 303,694
Payments to suppliers 219,458) (169,884)
Payments to employees 85,396) (94,541)
Payments for interfund services used 77,099) (199,908)
Net cash flows from operating activities 117,610) (160,639)
Cash flows from noncapital financing activities:
Transfers in 140,230 348,655
Transfers out 67,533) (54,100)
Net cash flows from noncapital financing activities 72,697 294,555
Cash flows from capital and related financing activities:
Principal payments on long-term debt 55,094) (53,127)
Interest payments on long-term debt 5,372) (6,699)
Acquisition of property, plant and equipment 3,240) (5,111)
Net cash flows from capital and related financing activities . . 63,706) (64,937)
Cash flows from investing activities - investment income received 1,080 7,773
Net increase (decrease) in cash and investments 107,539) 76,752
Beginning cash and investments 126,457 49,705
Ending cash and investments 18,918 126,457
Reconciliation of loss from operations to net cash provided (used)
by operating activities:
Loss from operations 721,457) (838,347)
Adjustments to reconcile loss from operations to net cash
flows from operating activities:
Depreciation 642,521 642,635
Noncash expense -PERS relief 2,892 2,892
Increase) decrease in assets - accounts receivable 4,534) 923)
Increase (decrease) in liabilities:
Accounts payable 42,939) 33,200 1.
Accrued payroll and related liabilities 805 196)
Deferred revenue 5,102 100
Net cash flows from operating activities 117,610) (160,639)
112
Exhibit L-23
CITY OF SEWARD
Seward Marine Industrial Center Enterprise Fund
Schedule of Composition of Net Assets
December 31; 2009
With Comparative Amounts for 2008)
2009 2008
Grants and other external contributions 35,725,414 35,725,414
Related accumulated amortization 23,763,385) (23,239,842)
Contributions from other funds 16,707,375 16,567,145
City-generated deficit 1,960,659) (1,693,950)
Total net assets 26,708,745 27,358,767
113
r
Exhibit L-24
CITY OF SEWARD
Parking Enterprise Fund
Statement of Net Assets
December 31, 2009
With Comparative Amounts for 2008)
2009 2008
Assets
Current assets:
Cash and investments 412,074 430,786
Prepaid expenses 4,187
Total current assets 412,074 434,973
Property,plant and equipment:
Improvements other than buildings 513,540 513,540
Equipment 75,996 15,490
Total property, p lant and equipment in service 589,536 529,030
Less accumulated depreciation 481,987) (476,993)
Net property,plant and equipment in service 107,549 52,037
Total assets 519,623 487,010
Liabilities and Net Assets
Current liabilities - accounts payable 17,753 579
Net assets:
Invested in capital assets, net of related debt 107,549 52,037
Unrestricted 394,321 434,394
Total net assets 501,870 486,431
Total liabilities and net assets 519,623 487,010
114
t
Exhibit L-25
CITY OF SEWARD
Parking Enterprise Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2009
With Comparative Amounts for 2008)
2009 2008
Operating revenues - parking fees 162,120 240,339
Operating expenses:
1 Salaries and employee benefits 93,199 88,670
Supplies and maintenance 5,619 8,383
Purchased services 1,927
Rents and leases 13,000 13,000
Administration and general 16,617 13,793
Depreciation 4,994 6,208
Total operating expenses 135,356 130,054
Earnings from operations 26,764 110,285
Nonoperating revenues:
Investment income 1,645 16,513
Intergovernmental 11
Total nonoperating revenues 1,645 16,524
Earnings before transfers 28,409 126,809
Transfers out 12,970) (19,227)
Change in net assets 15,439 107,582
Beginning net assets 486,431 378,849
Ending net assets 501,870 486,431
115
Exhibit L-26
CITY OF SEWARD
Parking Enterprise Fund
Statement of Cash Flows
Year Ended December 31, 2009
With Comparative Amounts for 2008)
2009 2008
Cash flows from operating activities:
Receipts from customers and users 162,120 240,339
Payments to suppliers 16,880) (30,024)
Payments to employees 93,199) (88,659)
Payments for interfund services used 16,617) (13,793)
Net cash flows from operating activities 35,424 107,863
Cash flows from noncapital financing activities -
transfers out 12,970) (19,227)
Cash flows from capital and related financing activities -
acquisition of property,plant and equipment 42,811)
Cash flows from investing activities - investment income received 1,645 16,513
Net increase (decrease) in cash and investments 18,712) 105,149
Beginning cash and investments 430,786 325,637
and investmentsEndingcashn 412,074 430,786
Reconciliation of earnings from operations to net cash
provided (used) by operating activities:
Earnings from operations 26,764 110,285
Adjustments to reconcile earnings from operations
to net cash flows from operating activities:
Depreciation 4,994 6,208
Noncash expense -PERS relief 11
Increase) decrease in assets -prepaid expenses 4,187 4,187)
Increase (decrease) in liabilities - accounts payable 521)4,454)
Net cash flows from operating activities 35,424 107,863
116
Exhibit L-27
CITY OF SEWARD
Parking Enterprise Fund
Schedule of Composition of Net Assets
December 31, 2009
With Comparative Amounts for 2008)
2009 2008
Grants and other external contributions 425,893 425,891
Related accumulated amortization 425,893) (425,891)
Contributions from other funds 7,650 7,650
City-generated equity 494,220 478,781
Total net assets 501,870 486,431
117
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118
INTERNAL, SERVICE FUNDS
Motor Pool — The Motor Pool Internal Service Fund accounts for payments from
departments for the use of vehicles, in order to accumulate cash to forward-fund
replacement of vehicles. This funding mechanism spreads the cost of the vehicles over
the expected life of the vehicle in each program's annual budget, rather than to show the
cost of vehicles as a one-time expense to each fund in the year of purchase.
Compensated Annual Leave — The Compensated Annual Leave Fund was created in
2005 for the purpose of accumulating cash reserves to pay annual leave cash-outs for
governmental funds.
119
Exhibit M-1
CITY OF SEWARD
S
Motor Pool Internal Service Fund 1_1
Statement of Net Assets
December 31, 2009
With Comparative Amounts for 2008)
Assets 2009 2008
Current assets:
Cash and investments 826,601 1,095,688
Receivables:
Accrued interest 66,405 69,513
Interfund loans 61,392 58,284
Prepaid expenses 7,896
Total current assets 954,398 1,231,381
Restricted cash and investments - capital projects 517,254
Interfund loans, net of current portion 1,195,565 1,256,957
Property, plant and equipment:
Equipment and vehicles 4,229,564 3,175,274
Less accumulated depreciation 2,235,366) (2,013,834)
Net property, plant and equipment in service 1,994,198 1,161,440
Construction in progress 218,007
Total property, plant and equipment 2,212,205 1,161,440
Total assets 4,879,422 3,649,778
Liabilities and Net Assets
Liabilities:
Current liabilities:
Accounts payable 93,071
Accrued interest 9,547
Current portion of capital lease obligation 178,033
Total current liabilities 280,651
Noncurrent liabilities, net of current portion -
capital lease obligation 605,224
Total liabilities 885,875
Net assets:
Invested in capital assets, net of related debt 1,428,948 1,161,440
Unrestricted 2,564,599 2,488,338
Total net assets 3,993,547 3,649,778
Total liabilities and net assets 4,879,422 3,649,778
120 I
Exhibit M-2
CITY OF SEWARD
Motor Pool Internal Service Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2009
With Comparative Amounts for 2008)
2009 2008
Operating revenues - vehicle rental 512,193 512,193
Operating expenses:
Depreciation 223,124 212,694
Supplies and maintenance 4,110
Total operating expenses 223,124 216,804
Earnings from operations 289,069 295,389
Nonoperating revenues (expenses):
Gain on disposition of capital assets 1,693 20
investment income 72,180 111,821
Interest expense 18,878) 205)
Miscellaneous 295)
Net nonoperating revenues (expenses) 54,700 111,636
Change in net assets 343,769 407,025
Beginning net assets 3,649,778 3,242,753
Ending net assets 3,993,547 3,649,778
Of the total depreciation expense of$223,124 above, $0 was attributable to capital assets that were
funded with capital contributions.)
121
r -
Exhibit M-3
CITY OF SEWARD
Motor Pool Internal Service Fund
Statement of Cash Flows
Year Ended December 31, 2009
With Comparative Amounts for 2008)
2009 2008
Cash flows from operating activities:
Receipts from interfund charges 512,193 512,193
Payments to suppliers 295)12,006)
Net cash flows from operating activities 511,898 500,187
Cash flows from capital and related financing activities:
Principal payments on long-term debt 164,005)46,281)
Interest payments on long-term debt 9,331) 1,591)
Acquisition of equipment and vehicles • 235,117) (217,854)
Proceeds from sale of capital assets 11,150 20
Net cash flows from capital and
related financing activities 397,303) (265,706)
Cash flows from investing.activities:
Interfund loan receipts 58,284 55,336
hmvestment income received 75,288 114,771
Net cash flows from investing activities 133,572 170,107
Net increase in cash and investments 248,167 404,588
Beginning cash and investments 1,095,688 691,100
Ending cash and investments 1,343,855 1,095,688
Reconciliation of cash and investments to statement of net assets:
Current assets 826,601 1,095,688 L.__
Restricted assets 517,254
1,343,855 1,095,688
Reconciliation of earnings from operations to net cash
provided (used)by operating activities:
Earnings from operations 289,069 295,389 j I
Adjustments to reconcile earnings from operations
to net cash flows from operating activities: i -
Depreciation 223,124 212,694 L.
Other nonoperating expenses 295)
Increase in assets -prepaid expenses 7,896)
Net cash flows from operating activities 511,898 500,187
Noncash capital and related financing activities -
equipment and vehicles acquired by capital lease 947,262
122
Exhibit M-4
CITY OF SEWARD
Motor Pool Internal Service Fund
Schedule of Composition of Net Assets
December 31, 2009
With Comparative Amounts for 2008)
2009 2008
Grants and other external contributions 97,289 97,289
Related accumulated amortization 97,289) (97,289)
Contributions from other funds 832,324 832,324
City-generated equity 3,161,223 2,817,454
Total net assets 3,993,547 3,649,778
123
Exhibit M-5
CITY OF SEWARD
Compensated Annual Leave Internal Service Fund
Statement of Net Assets
December 31, 2009
With Comparative Amounts for 2008)
Assets 2009 2008
Current assets - cash and investments 432,065 376,605
Liabilities and Net Assets
Liabilities:
Current liabilities - accrued annual leave 108,616 99,274
Long-term accrued annual leave 323,449 277,331
Total liabilities 432,065 376,605
Net assets
Total liabilities and net assets 432,065 376,605
124
Exhibit M-6
CITY OF SEWARD
Compensated Annual Leave Internal Service Fund
Statement of Revenues, Expenses
and Change in Net Assets
Year Ended December 31, 2009
With Comparative Amounts for 2008)
2009 2008
Operating revenues - interfund charges 389,083 329,810
Operating expenses - salaries and benefits 389,083 329,810
Change in net assets
Beginning net assets
Ending net assets
125
Exhibit M-7
CITY OF SEWARD
Compensated Annual Leave Internal Service Fund
Statements of Cash Flows
Year Ended December 31, 2009
With Comparative Amounts for 2008)
2009 2008
Cash flows from operating activities:
Receipts from interfund charges 389,083 329,810
Payments to employees 333,623) (281,481)
Net cash flows from operating activities 55,460 48,329
Beginning cash and investments 376,605 328,276
Ending cash and investments 432,065 376,605
Reconciliation of earnings from operations to net cash
provided by operating activities:
Earnings from operations
Adjustments to reconcile earnings from operations
to net cash flows from operating activities - increase
in accrued annual leave 55,460 48,329
Net cash flows from operating activities 55,460 48,329
r-,
126
Exhibit N-1
CITY OF SEWAID
Teen Council Agency Fund
Schedule of Changes in Assets and Liabilities
Year Ended December 31, 2009
Balance at Balance at
January 1, December 31,
2009 Additions Deletions 2009
Assets
Cash and investments 34,945 40,983 34,213 41,715
Prepaid expenses and other 150 150
Total assets 35,095 40,983 34,213 41,865
Liabilities
Accounts payable 1,285 719 2,004
Due to Teen Council 33,810 40,264 34,213 39,861
Total liabilities 35,095 40,983 34,213 41,865
127
Exhibit 0-1
CITY OF SEWARD
Schedule of Capital Assets
December 31, 2009
With Comparative Amounts for 2008)
2009 2008
Capital assets:
Land and land improvements 5,432,289 5,398,928
Buildings 79,817,699 63,463,657
Improvements other than buildings 24,196,171 15,915,243
Equipment 11,556,985 8,286,754
Construction in progress 3,672,313 18,774,281
Total capital assets 124,675,457 111,838,863
I i
1
128
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Exhibit 0-2
CITY OF SEWARD
Schedule of Changes in Capital Assets
Year Ended December 31, 2009
Balance at Balance at
January 1, December 31,
2009 Additions Deletions 2009
Land and land improvements 5,398,928 33,361 5,432,289
Buildings 63,463,657 16,354,042 79,817,699
Improvements other than buildings 15,915,243 8,307,658 26,730 24,196,171
Equipment 8,286,754 3,544,782 274,551 11,556,985
Construction in progress 18,774,281 14,213,525 29,315,493 3,672.313
111,838,863 42,453,368 29,616,774 124,675,457
iI
129
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Exhibit 0-3
CITY OF SEWARD
Schedule of Capital Assets by Function and Activity
December 31, 2009
Land and Improve-
Land ments
Improve-Other than
Function and Activity ments Buildings Buildings Equipment Total
General government:
City Council/Mayor 54,323 54,323
City manager 67,963 67,963
City clerk 48,132 48,132
Finance 84,370 84,370
Community development 5,232 8,509 13,741
Municipal building 2,407,729 16,291 54,169 2,478,189
Alaska SeaLife Center 47,322,466 3,006,163 4,145,773 54,474,402
General services 1,479,080 8,005,937 53,025 9,538,042
Community and Senior Center 1,473,936 1,473,936 •
Non-departmental 5,432,289 68,868 5,501,157
Total general government 5,432.289 52.757.311 11,028,391 ' 4,516,264 73,734,255
Public safety:
r_
Police 1,464,631 1,464,631 t 1
Jail 22,006 22,006
Animal control 156,720 156,720
Fire 1,028,236 46,746 924,257 1,999,239
Building inspection 2,600 2,600
Seward Volunteer Ambulance Corp 6,300 6,300
Total public safety 1.184,956 46,746 2,419,794 3.651,496
Public works:
Streets 254,567 3,324,312 457,068 4,035,947
Engineering . 3,621 3,621
City shop 771,823 58,924 830,747
Total public works 1,026,390 3,324,312 519,613 4,870,315
Healthcare facilities 23,445,805 8,249,724 3,916,697 35,612,226
1'
Parks and recreation 676,571 1,534,198 100,890 2,311,659
Library 726,666 12,800 83,727 823,193
Total capital assets
allocated to functions $ 5,432,289 79,817,699 24,196,171 11,556,985 121,003,144
Construction in progress 3,672,313
Total capital assets 124,675,457
130
Exhibit 0-4
CITY OF SEWARD
Schedule of Changes in Capital Assets by Function and Activity
Year Ended December 31, 2009
Capital Capital
Assets at Assets at
January 1, December 31,
Function and Activity 2009 Additions Deletions . 2009
General government:
City Council/Mayor 54,323 54,323
City manager 56,583 11,380 67,963
City clerk 48,132 48,132
Finance 76,084 8,286 84,370
Community development 8,509 5,232 13,741
Municipal building 2,452,949 25,240 2,478,189
Alaska Sealife Center 54,210,705 263,697 54,474,402
General services 9,538,042 9,538,042
Community and Senior Center 1,473,936 1,473,936
Non-departmental 5,467,796 33,361 5,501,157
Total general government 73,387,059 347,19.6 73,734,255
Public safety:
Police 1,233,219 231,412 1,464,631
Jail 22,006 22,006
Animal control 156,720 156,720
Fire 1,987,373 23,866 12,000 1,999,239
Building inspection 2,600 2,600
Seward Volunteer Ambulance Corp 6,300 6,300
Total public safety 3,408,218 255,278 12,000 3,651,496
Public works:
Streets 3,892,453 143,494 4,035,947
Engineering 3,621 3,621
City shop 830,747 830,747
Total public works 4,726,821 143,494 4,870,315
Healthcare facilities 8,846,363 27,055,144 289,281 35,612,226
Parks and recreation 1,872,928 438,731 2,311,659
Library 823,193 823,193
Construction in progress 18,774,281 14,213,525 29,315,493 3,672,313
111,838,863 42,453,368 29,616,774 124,675,457
131
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Exhibit P-1
CITY OF SEWARD
Schedule of Expenditures of Federal Awards
Year Ended December 31,2009
Catalog of
Federal January 1, Federal December 31,
Domestic Total 2009 Share of 2009
i
Assistance Grant Grant Receivable Expen- Federal Receivable
Grant Title Number Number Award (Deferred) ditures Receipts (Deferred)
Department of Agriculture
NRCS Flood Mitigation/Engineering 10.904 68-0150-9-024 $ 500,000 10,361 56,757 67,118
1
NRCS Flood Mitigation/Construction 10.904 68-0150-9-023 2,184,900 270,519 248,608 21,911
10,361 327,276 315,726 21,911
Passed through State of Alaska Department 1
of Natural Resources-Volunteer Firefighter
Assistance Grant-Cooperative Forestry
Assistance 10.664 39927 7,367 7,367 7,367
Total Department of Agriculture 10,361 334,643 323,093 21,911
Department of Interior
Passed through State of Alaska Department
of Natural Resources:
Public Access to Seward Historical
Site Inventory 15.904 08492 4,173 151 1,629 151 1,629
Historic Preservation Community Training 15.904 09521 2,221 2,221 2,221
II
Historic Preservation Community Training 15.904 08518 3,297 3,297 3,297
TotalDepartmentofIttterior 151 7,147 5,669 1,629
Department of Transportation
Passed through State of Alaska Department
of Transportation and Public Facilities:
Radar Trailer Equipment 20.600 402-PT-06-01(E) 17,960 17,960 17,960
Impaired Driving Enforcement 20.600 154AL 08-00-01-x 1,289 191 191
Impaired Driving Enforcement 20.600 154AL 09-01-01-x 2,502 2,502 2,502
Impaired Driving Enforcement 20.600 154AL 10-10-01-x 4,776 1,100 -1,100
Seatbelt&DUI Enforcement 20.600 402PT08-04-03-x 2,227 499 - 499
Seatbelt&DUI Enforcement 20.600 402PT09-06-03-x 1,607 1,607 1,607
Every 15 Minutes 20.600 410K8-09-00-01 611 611 611
Total Department of Transportation 690 23,780 23,370 1,100
Environmental Protection Agency
Passed through State of Alaska Department
of Environmental Conservation:
3rd Avenue Water Main Loan(83%federal) 66.468 769031 2,888,400 574,444 - 574,444
Engineering of Water Tank and Line Extension 66.606 76911 297,400 123 - 123
Total Environmental Protection Agency 574,567 - 123 574,444
Denali Commission
Seward East Harbor Reconstruction 90.100 01006 1,000,000 60,096 385,649 - 445,745
Department of Homeland Security
Passed through State of Alaska Department
of Military and Veterans Affairs:
Oct.06 Southern Alaska Storm Disaster/Flood 97.036 DR-1669-AK 361,628 26,044 5,361 31,405
Communications Equipment(10 Radios) 97.074 07LETPP-GR34238 93,747 39,832 37,445 77,277
Passed through State of Alaska Department of
Commerce,Community,and Economic Development-
Cleaning System 97.044 EMW2008-FO-08496 48,607 19,074 19,074
Total Department of Homeland Security 65,876 61,880 96,351 31,405
132
i
Exhibit P-1,continued
CITY OF SEWARD
Schedule of Expenditures of Federal Awards
Year Ended December 31,2009,continued
Catalog of
Federal January 1, Federal December 31,
Domestic Total 2009 Share of 2009
Assistance Grant Grant Receivable Expen- Federal Receivable
Grant Title Number Number Award (Deferred) ditures Receipts (Deferred)
Department of Justice
Passed through State of Alaska Department
of Health and Social Services-Title V
Delinquency Prevention Grants 16.548 609-10-066 $ 45,000 36,000 36,000
Bullet Proof Vest Program 16.607 N/A 323 323 323
Total Department of Justice 36,323 36,323
Total Federal Financial Assistance 711,741 849,422 484,929 1,076,234
133
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Exhibit Q-1
CITY OF SEWARD
Schedule of State Financial Assistance
Year Ended December 31,2009
C
January 1, State December31,
Total 2009 Share of 2009
Grant Grant Receivable Expendi- State Receivable
Grant Title Number Award (Deferred) tures Receipts (Deferred) 1
Department of Commerce,Community 1 1
and Economic Development
Levee Construction 08-DC-411 5 1,000,000 60,599 156,897 184,804 32,692
Road/Levee Construction 09-DC-527 1,750,000 13,064 1,178,540 1,134,906 56,698
Waterfront Pavilion 09-DC-104 195,000 195,000 195,000
Fish Ditch Restoration 09-DC-261 61,250 16,183 16,183
Dredging Cruise Ship Berthing Basins
and Approaches 10-DC-024 4,500,000 99,832 99,832
State Revenue Sharing N/A 229,606 229,606 229,606
Shared Fishery Taxes N/A 4,049 4,049 4,049
Total Department of Commerce,Community
and Economic Development 73,663 1,880,107 1,864,380 89,390
Department of Military and Veteran Affairs
2006 South Central Storm Disaster FEMA-AK-DR1669 143,037 8,681 1,787 10,468
Dec 09 Storm Surge AK-I0-230 3,750 3,750 3,750
Total Department of Military and Veteran Affairs 8,681 5,537 14,218
Department of Education& Early Development
Library Grant PLA-09-770-66 6,350 6,350 6,350
Department of Environmental Conservation
Drinking Water Compliance Study&
Preliminary Design 76912 99,800 27,452 2,106 29,558
Engineering of Water Tank and
Line Extension 76911 99,200 164 164
Water Tank 76910 94,600 9,460 9,460
Water Distribution System 76909 24,800 1,240 1,240
Total Department of Environmental Conservation 38,316 2,106 40,258 164
Department of Revenue
Fish Taxes N/A 417,356 417,356 417,356
1
Liquor Licenses N/A 19,750 19,750 19,750
Commercial Passenger Vessel Tax 2008 N/A 713,178 (337,630) 510,000 345,748 ,(173,378) (2)
Commercial Passenger Vessel Tax 2009 N/A 771,065 383,652 (383,652) (2)
Total Department of Revenue 337,630) 947,106 1,166,506 (557,030)
Department of Natural Resources
Jesse Lee Home Stabilization and Repair N/A 1,000,000 36,100 41,186 77,286
Department of Administration
PERS Relief N/A 430,409 430,409 430,409
Department of Corrections
Community Jails Program N/A 30,581 25,240 30,581 5,341)
Alaska Energy Authority
Purchase of Backup Generators 2195315 2,000,000 50,610 1,836,703 1,887,313
Total State Financial Assistance S (130,260) 5,174,744 5,425,797 (381,313)
Major program
1
134
CITY OF SEWARD
Notes to the Schedules of Expenditures of Federal Awards
and State Financial Assistance
Year Ended December 31, 2009
1) Basis of Presentation
The accompanying Schedules of Expenditures of Federal Awards and State Financial Assistance
include the rant 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$713,178 in 2008 Commercial Passenger Vessel taxes, of which
173,378 is unspent as of December 31, 2009. In 2009, the City received $383,652 in 2009
Commercial Passenger Vessel taxes, none of which has been expended. An additional $387,413
has been accrued as receivable at December 31, 2009 in the Harbor Enterprise Fund. For financial
statement purposes, the City has recognized $713,178 and $771,065, respectively, as revenue for
the years ended December 31, 2008 and 2009.
135
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136
CITY OF SEWARD
Statistical Section
This part of the City of Seward's comprehensive annual financial report presents detailed information as
a context for understanding what the information in the financial statements, note disclosures, and
required supplementary information says about the City's overall financial health.
Contents Page
Financial Trends
These schedules contain trend information to help the reader understand how the City's
financial performance and well-being have changed over time.
Table 1 Net Assets by Component 138
Table 2 Changes in Net Assets 139
Table 3 Fund Balances of Governmental Funds 141
Table 4 Changes in Fund Balances of Governmental Funds 142
Table 5 General Fund Revenues by Source 143
Table 6 General Fund Tax Revenues by Source 144
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 145
Table 8 Property Tax Levies and Collections 146
Table 9 Assessed and Estimated Actual Value of Taxable Property 147
Table 10 Principal Property Taxpayers 148
Table 11 Principal Taxable Sales by Line of Business 149
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 150
Table 13 Ratio of Net General Obligation Bonded Debt to Assessed Value and Net
General Obligation Bonded Debt per Capita 151
Table 14 Computation of Direct and Overlapping Bonded Debt 152
Table 15 Legal Debt Margin 153
Table 16 Ratio of Annual Debt Service Expenditures for General Obligation Debt to
Total General Fund Expenditures 154
Table 17 Revenue Bond Coverage-Electric Enterprise Fund 155
Table 18 Revenue Bond Coverage-Harbor Enterprise Fund 156
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 157
Table 20 Top 10 Public and Private Employers for 2009 158
Table 21 Full-Time Equivalent Employees by Fund 159
Table 22 Operating Indicators by Function 160
Table 23 Capital Asset Statistics by Function 161
Table 24 Property Value, Construction,and Bank Deposits 162
Table 25 Miscellaneous Statistics 163
137
Table 1
CITY OF SEWARD
Net Assets by Component
Last Seven Fiscal Years
accrual basis of accounting)
amounts expressed in thousands)l
2003 2004 2005 2006 2007 2008 2009
Governmental Activities:
Invested in capital assets,
net of related debt 57,398 55,726 56,495 56,663 58,016 58,016 56,208
Restricted
Unrestricted 5,009 6,636 5,946 5,901 5,025 5,993 8,619
Total governmental activities
net amounts 62,407 62,362 62,441 62,564 63,041 64,009 64,827
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
Restricted 16 700 2,111
Unrestricted 10,354 9,727 12,089 12,837 14,595 14,796 14,777
Total business-type activities
net assets 77,402 76,417 78,244 77,597 80,051 82,250 81,000
i
Primary government:
Invested in capital assets,
net of related debt 124,446 122,416 122,650 121,423 123,456 124,770 120,320
Restricted 16 700 2,111
Unrestricted 15,363 16,363 18,035 18,738 19,620 20,789 23,396
Total primary government
net assets 139,809 138,779 140,685 140,161 143,092 146,259 145,827
Note: GASB 34 conversion took place in 2003. Prior year net asset information is not available.
138
Table 2
CITY OF SEWARD
Changes in Net Assets
Last Seven Fiscal Years
accrual basis of accounting)
2003 2004 2005 2006 2007 2008 2009
Expenses
Governmental activities:
General government 1,355,573 1,731,427 1,770,306 2,158,969 1,161,765 2,501,443 1,451,682
Public safety 2,286,556 2,299,873 2,383,911 2,440,488 2,980,785 2,934,607 3,029,935
Public works 1,145,730 1,265,153 1,383,178 1,704,296 2,650,977 1,310,474 1,456,468
Parks and recreation 996,112 1,046,681 1,099,556 1,075,945 981,222 1,236,411 1,247,366
Library 316,679 358,364 367,077 378,487 384,835 398,108 478,385
Healthcare facilities 247,052 440,997 468,703 924,795 535,226 412,797 3,910,190
Sealife Center 1,839,836 1,804,367 1,028,302 1,578,315 1,672,365 1,736,147 1,294,636
Unallocated interest 466,382 371,982 432,438 347,367 306,989 116,906 236,982
Total governmental activities expenses 8,653,920 9,318,844 8,933,471 10,608,662 10,674,164 10,646,893 13,105,644
Business-type activities:
Electric 5,926,703 6,419,925 6,863,724 9,195,187 8,029,054 8,626,745 10,363,820
Water 1,346,099 687,542 760,363 813,245 859,799 1,194,311 1,066,860
Wastewater 706,332 705,508 693,096 747,484 901,759 916,909
Harbor 2,441,498 2,282,991 2,402,810 2,648,290 2,457,216 3,006,069 3,934,866
Seward Marine Industrial Center 1,541,608 1,591,311 1,521,930 1,278,774 1,076,730 1,149,453 990,466
Parking 75,983 95,209 112,013 117,150 129,623 119,723 118,309
Total business-type activities expenses 11,331,891 11,783,310 12,366,348 14,745,742 13,299,906 14,998,060 17,391,230
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
Program Revenues
Governmental activities:
Charges for services:
General government 468,421 276,173 61,798 106,589 400,074 196,240 - 223,545
Public safety 683,916 737,338 687,763 761,316 706,575 669,988 744,939
Public works 149,464 116,742 219,843 239,984 111,756 116,833 84,849
Parks and recreation 471,396 548,283 565,168 529,289 592,063 627,038 622,067
Library 8,144 8,218 8,601 8,677 7,736 12,800 14,799
Operating grants and contributions 182,090 112,945 157,809 148,785 680,176 84,144 542,354
Capital grants and contributions 146,170 1,053,026 880,372 2,124,245 . 1,459,744 999,171 2,860,172
Total governmental activities program revenues: 2,109,601 2,852,725 2,581,354 3,918,885 3,958,124 2,706,214 5,092,725
Business-type activities:
Electric 6,539,213 6,943,720 7,381,178 7,979,436 8,428,106 8,565,180 9,060,636
Water 1,445,553 769,970 1,019,832 1,008,765 996,633 998,541 972,713
I
Wastewater 702,770 791,988 811,546 800,168 801,095 796,454
Harbor 1,795,350 1,818,674 1,943,424 2,499,065 2,751,916 2,776,676 2,596,924
Seward Marine Industrial Center 330,249 318,009 324,828 286,640 290,221 304,517 263,775
Parking 114,008 167,101 177,098 175,792 182,133 240,339 162,120
Operating grants and contributions 1,260,476 65,247 159,595 445,228
Capital grants and contributions 429,796 722,130 3,149,335 928,554 2,578,739 2,769,005 2,354,601
Total business-type activities program revenues 10,654,169 11,442,374 14,787,683 14,950,274 16,093,163 16,614,948 16,652,451
Total primary government program revenues $ 12,763,770 14,295,099 17,369,037 18,869,159 20,051,287 19,321,162 21,745,176
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)
Business-type activities 677,722) (340,936) 2,421,335 204,532 2,793,257 1,616,888 (738,779)
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)
Note: GASB 34 conversion took place in 2003. Prior year net asset information is not available.
139
Table 2,continued
CITY OF SEWARD
Changes in Net Assets
Last Seven Fiscal Years
accrual basis of accounting)
continued
2003 2004 2005 2006 2007 2008 2009
General Revenues and Other Changes
in Net Assets
Governmental activities:
Taxes:
Sales tax 2,894,455 3,123,314 3,411,283 3,518,435 4,068,600 4,137,758 3,585,304
Property tax 670,297 973,948 802,539 864,906 862,258 943,832 986,473
Other tax 77,135 89,473 381,270 388,284 419,771 442,130 370,235
Grants and entitlements 462,249 324,452 339,074 388,766 538,799 1,354,871 670,761
Investment earnings 151,035 170,179 218,102 436,241 314,642 612,611 128,971
Other 4,754,704 882,501 287,018) 1,622,052
Transfers 816,854 857,313 1,279,903 1,502,583 989,801 912,319 1,466,933
Special item-write-off
NPO/OPEB 504,917
Total governmental activities 9,826,729 6,421,180 6,432,171 6,812,197 7,193,871 8,908,438 8,830,729
Business-type activities:
Investment earnings 139,432 116,165 323,821 650,078 651,763 640,277 184,566
Grants and entitlements 713,178 771,065
Other 71,125 22,555 362,218 139,952
Transfers 816,854) (857,313) (1,279,903) (1,502,583) (989,801) (912,319) (1,466,933)
Total business-type activities 606,297) (718,593) (593,864) (852,505) (338,038) 581,088 (511,302)
I
Total primary government 9,220,432 5,702,587 5,838,307 5,959,692 6,855,833 9,489,526 8,319,427
i
Changes in Net Assets
Governmental activities $ 3,282,410 44,939)80,054 122,420 477,831 967,759 817,810
Business-type activities 1,284,019) (1,059,529) 1,827,471 (647,973) 2,455,219 2,197,976 (1,250,081)
Total primary government $ 1,998,391 (1,104,468) 1,907,525 (525,553) 2,933,050 3,165,735 (432,271)
Beginning Net Assets 137,884,486 139,882,877 138,778,409 140,685,934 140,160,381 143,093,431 146,259,165
Ending Net Assets 139,882,877 138,778,409 140,685,934 140,160,381 143,093,431 146,259,166 14.5,826,894
Change in Net Assets 1,998,391 (1,104,468) 1,907,525 (525,553) 2,933,050 3,165,735 (432,271)
Note: GASB 34 conversion took place in 2003. Prior year net asset information is not available.
140
Table 3
CITY OF SEWARD
Fund Balances of Governmental Funds
Last Ten Fiscal Years
modified accrual basis of accounting)
2000 2001 2002 2003 2004 2005 2006, 2007 2008 2009
General Fund
Reserved 35,869 85,786 83,480 369,415 552,316 491,535 388,409 458,860 693,590 657,029
Unreserved:
Designated 2,098,242 2,126,984 2,161,585 2,104,417 2,019,418 2,569,418 2,569,418 2,126,418 2,126,418 2,126,418
Undesignated 2,563,352 2,772,989 3,007,335 2,967,799 3,169,462 2,819,780 1,076,827 1,433,552 1,289,619 2,983,424
Total General Fund 4,697,463 4,985,759 5,252,400 5,441,631 5,741,196 5,880,733 4,034,654 4,018,830 4,109,627 5,766,871
All Other Governmental Funds
Reserved-debt service 564,909 685,422 789,298 811,246 554,190 688,006 661,787 945,478 1,063,260 1,177,697
Unreserved,reported in:
Special revenue funds 47,346 41,404 171,775 139,682 116,732 22,148 (510,560) (34,649) 409,326 100,330
Capital projects funds 642,131 434,275 494,392 543,967 596,587 483,827 1,635,625 (315,698) 12,321,378 308,485
Total all other Governmental Funds $ 1,254,386 1,161,101 1,455,465 1,494,895 1,267,509 1,193,981 1,786,852 595,131 13,793,964 1,586,512
Total all Governmental Funds $ 5,951,849 6,146,860 6,707,865 6,936,526 7,008,705 7,074,714 5,821,506 4,613,961 17,903,591 7,353,383
Percentage Change-General
Fund(Undesignated only) 47.7% 8.2% 8.5%1.3% 6.8% -11.0% -61.8%33.1%10.0% 131.3%
Percentage Change-
General Fund 31.3% 6.1% 5.3% 3.6% 5.5% 2.4% -31.4%0.4% 2.3%40.3%
Percentage Change-
Other Governmental 2.8%7.4%25.4% 2.7% -15.2%5.8%49.7% -66.7% 2217.8% -88.5%
Percentage Change-All
Governmental Funds 22.3% 3.3% 9.1% 3.4% 1.0% 0.9% -17.7% -20.7%288.0% -58.9%
Table 4
CITY OF SEWARD
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
Modified Accrual Basis of Accounting)
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Revenues
Taxes 3,953,139 3,913,556 4,045,976 3,637,867 4,201,664 4,581,860 4,756,073 5,363,265 5,535,081 4,932,555
Licenses and permits 139,871 134,396 169,979 286,837 254,613 164,628 278,515 144,654 129,956 214,966
Intergovernmental 1,667,366 2,040,493 1,276,577 1,239,445 1,935,598 1,891,500 3,057,175 2,072,811 2,355,038 3,907,151
Charges for Services 2,179,832 2,161,177 1,783,271 1,828,901 1,824,270 1,883,636 2,078,065 2,375,767 2,610,515 2,553,480
Investment earnings 484,089 486,317 184,140 151,035 170,179 218,102 436,241 314,642 612,611 128,971
Other revenues 611,450 355,726 840,732 284,505 152,332 170,791 256,427 125,186 789,411 2,448,998
Total Revenues 9,035,747 9,091,665 8,300,675 7,428,590 8,538,656 8,910,517 10,862,496 10,396,325 12,032,612 14,186,121
Expenditures:
General government 1,601,677 1,743,428 1,972,672 1,914,692 2,050,449 2,736,435 2,737,586 2,956,706 3,369,478 3,485,932
Public safety 2,463,209 2,178,338 2,171,513 2,408,441 2,987,078 2,878,864 2,792,296 3,011,920 3,333,433 4,774,604
Public works 981,027 1,152,948 1,324,885 1,377,601 1,401,447 1,425,348 1,962,053 2,678,493 1,662,695 1,618,075
Parks and Recreation 715,409 801,596 903,707 1,006,621 998,232 1,068,880 1,074,141 1,084,002 1,198,798 1,608,957
Library 251,865 258,832 268,384 283,721 305,758 313,348 332,577 339,222 368,696 463,427
Healthcare facilities 6,614 96,935 320,119 66,058 1,615,516 1,114,693 14,590,201 12,172,365
Non-allocated capital outlay 1,176,757 1,163,511 462,532
N Debt service:
Principal 354,123 390,005 432,653 527,612 955,591 800,928 892,836 854,977 738,999 787,695
Retirement benefits 164,143 1,805,475 293,114 470,573 596,907
Interest and other costs 486,874 467,974 448,676 498,415 386,182 397,610 402,274 260,544 1,328,506 695,299
Total expenditures 8,037,555 8,156,632 7,985,022 8,114,038 9,404,856 9,851,614 13,614,754 12,593,671 27,061,379 26,203,261
Excess of revenues over
under)expenditures 998,192 935,033 315,653 (685,448) (866,200) (941,097) (2,752,258) (2,197,346) (15,028,767) (12,017,140)
Other financing sources(uses)
Transfers in 1,490,259 1,500,749 1,629,793 1,836,606 2,258,432 3,126,673 3,731,769 3,631,316 3,176,788 2,947,053
Transfers out 1,523,516) (2,240,771) (1,384,441) (1,039,752) (1,401,119) (2,119,567) (2,232,719) (2,641,515) (2,264,469) (1,480,120)
Net bond proceeds 95,937 81,066 27,406,078
Total other financing sources(uses)33,257) (740,022) 245,352 892,791 938,379 1,007,106 1,499,050 989,801 28,318,397 1,466,933
Net change in fund balance 964,935 195,011 561,005 207,343 72,179 66,009 (1,253,208) (1,207,545) 13,289,630 (10,550,207)
Beginning fund balances 4,986,914 5,951,849 6,146,860 6,729,183 6,936,526 7,008,705 7,074,714 5,821,506 4,613,961 17,903,590
Ending fund balances 5,951,849 6,146,860 6,707,865 6,936,526 7,008,705 7,074,714 5,821,506 4,613,961 17,903,590 7,353,383
Net change in fund balances $ 964,935 195,011 561,005 207,343 72,179 66;009 (1,253,208) (1,207,545) 13,289,629 (10,550,207)
Debt service as a percentage of
noncapital expenditures 13.99%13.98%13.27%14.68%17.33%16.18%34.84%14.89% 15.90% 15.92%
Total non-capital expenditures $ 6,013,187 $ 6,135,142 $ 6,641,161 $ 6,991,076 $ 7,742,964 $ 8,422,875 $ 8,898,653 $ 9,458,715 $ 11,259,806 $ 13,065,387
Table 5
CITY OF SEWARD
General Fund Revenues by Source
Last Ten Fiscal Years
Licenses
and Inter- Charges for Fines and
Fiscal Year Taxes (a) Permits governmental Services Bails Interest Other Total
2000 $ 3,953,139 $ 139,871 $ 984,231 $ 2,179,832 $ 14,786 $ 438,005 $ 247,461 $ 7,957,325
2001 3,913,556 134,396 1,120,299 2,161,177 16,378 447,888 290,694 8,084,388
2002 4,045,976 169,979 976,268 1,739,071 12,279 160,000 771,073 7,874,646
2003 3,637,867 286,837 973,170 1,828,901 20,152 135,686 243,304 7,125,917
2004 4,201,664 254,613 829,535 1,824,270 22,857 160,536 104,685 7,398,160
2005 4,581,860 164,628 984,920 1,883;636 23,206 194,247 143,649 7,976,146
V. 2006 4,756,073 200,015 1,066,093 2,078,065 16,073 392,379 175,079 8,683,777w
2007 5,363,265 144,654 1,189,258 2,375,767 17,611 285,066 97,445 9,473,066
2008 5,535,081 129,956 1,935,174 2,610,515 18,209 226,854 141,602 10,597,391
2009 4,932,555 214,966 1,576,765 2,553,480 11,836 50,311 1,741,084 11,080,997
a) Beginning 2003, GASB Statement No. 34 requires inter-fund payments-in-lieu-of-tax to be classifed as transfers rather than revenues.
Table 6
CITY OF SEWARD
General Fund Tax Revenues by Source
Last Ten Fiscal Years
Payments-
Fiscal Property in-Lieu-of- Hotel/Motel
Year Tax Sales Tax (1) Tax (2) Tax (3) Other(4) Total
2000 $ 694,332 $ 2,197,561 $ 844,583 $ 212,619 $ 4,044 $ 3,953,139
2001 663,747 2,165,586 872,749 209,458 2,016 3,913,556
2002 712,175 2,250,081 862,954 217,482 3,284 4,045,976
2003 670,297 2,671,613 77,586 215,145 3,226 3,637,867
2004 745,901 3,123,314 89,926 239,660 2,863 4,201,664
2005 787,503 3,411,283 96,614 284,656 1,804 4,581,860
2006 847,875 3,518,435 77,714 310,570 1,479 4,756,073
2007 873,513 4,068,600 76,609 343,162 1,381 5,363,265
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
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.
144
Table 7
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
2000 3.12 7.50 0.10 0.00 10.72
2001 3.12 7.00 0.10 0.00 10.22
2002 3.12 6.50 0.10 0.00 9.72
2003 3.12 6.50 0.10 0.00 9.72
2004 3.12 6.50 0.10 0.50 10.22
2005 3.12 6.50 0.10 0.50 10.22
2006 •3.12 6.50 0.10 0.50 10.22
2007 3.12 5.50 0.00 0.50 9.12
2008 3.12 4.50 0.00 0.50 8.12
2009 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, 2009"
1
145
Table 8
CITY OF SEWARD
Property Tax Levies and Collections
Last Ten Fiscal Years
Ratio of
Total Tax Delinquent
Current Percent Delinquent Collections Outstanding Taxes as
Fiscal Total Tax Tax of Levy Tax Total Tax as % of Delinquent % of Total
Year Levy Collections Collected Collections Collections Levy Taxes Levy
2000 $ 606,781 $ 571,261 94.1% $ 41,770 $ 613,031 101.0% $ 64,241 10.6%
2001 625,110 592,042 94.7% 32,951 624,993 100.0% 64,358 10.3%
2002 646,424 618,447 95.7% 32,036 650,483 100.6% 60,299 .9.3%
2003 634,287 618,356 97.5% 26,536 644,892 101.7% 49,694 7.8%
2004 666,848 650,763 97.6% 18,302 669,065 100.3% 47,477 7.1%
P
2005 733,298 717,697 97.9% 15,6.04 733,301 100.0% 47,474 6.5%
2006 835,829 801,964 95.9% 21,818 . 823,782 98.6% 59,522 7.1%
2007 851,190 820,934 96.4% 17,948 838,883 98.6% 37,846 4.4%
2008 784,672 874,259 111.4% 54,571 928,830 118.4% 25,826 3.3%
2009 944,373 919,823 97.4% 28,201 948,024 100.4% 33,545 3.6%
Source: Kenai Peninsula Borough
Table 9
CITY OF SEWARD
Assessed and Estimated Actual Value of Taxable Property
Last Ten Fiscal.Years
Real Property Personal Property Total Property . Tax Rates
Ratio of
Assessed
Direct Overlapping Value to
Fiscal Assessed Estimated Assessed Estimated Assessed Estimated (City of (Kenai Combined Total Est.
Year Value Actual Value Value Actual Value Value Actual Value Seward) Borough) Tax Rate Actual Value
2000 $ 154,991,200 $ 167,589,200 $ 55,354,065 $ 71,952,600 $ 210,345,265 $ 239,541,800 3.12 7.50 10.62 87.81%
2001 152,839,700 172,127,800 57,901,379 77,274,400 210,741,079 249,402,200 3.12 7.00 10.12 84.50%
2002 157,214,800 175,990,700 57,383,564 77,702,100 214,598,364 253,692,800 3.12 6.50 9.62 84.59%
2003 159,864,700 175,842,600 56,833,535 69,146,300 216,698,235 244,988,900 3.12 6.50 9.62 88.45%
2004 163,163,200 191,098,900 60,038,915 79,244,100 223,202,115 270,343,000 3.12 6.50 9.62 82.56%
2005 178,133,000 198,141,000 69,039,838 87,242,600 247,172,838 285,383,600 3.12 6.50 9.62 86.61%
2006 189,325,100 220,649,800 74,203,884 93,273,700 263,528,984 313,923,500 3.12 6.50 9.62 83.95%
2007 203,132,200 226,885,700 75,020,329 102,404,800 278,152,529 329,290,500 3.12 6.50 9.62 84.47%
2008 210,858,500 229,373,700 81,943,985 108,717,600 292,802,485 338,091,300 3.12 5.50 8.62 86.60%
v 2009 227,291,070 244,392,800 74,492,996 102,716,300 301,784,066 347,109,100 3.12 5.50 8.62 86.94%
Source: "Alaska Taxable 2009",State of Alaska,and Kenai Peninsula Borough Certified Tax Roll.
Table 10
CITY OF SEWARD
Principal Property Taxpayers
Compared with 10 Years Ago
December 31,2009
Percentage of Percentage of
Total Taxable 1999 Total Taxable
Type of 2009 Assessed Assessed Assessed Assessed
Taxpayer(2) Business Value (1) Rank Value Value(1) Rank Value
Ciri Alaska Tourism Corporation Tourism 17,027,044 1 6.3%
Seward Fisheries/Icicle Seafoods Seafood processing 10,019,489 2 3.7% 6,640,993 1 4.3%
Can Gottstein Grocery 7,377,808 3 2.7%
Crowley Marine Services,Inc. Transportation 6,985,520 4 2.6%
Seward Hospitality LLC Hotel/Retail 6,712,900 5 2.5%
Breeze Inn Motel Hotel/Retail/Restaurant/Saloon 5,937,900 6 2.2% 2,204,032 7 1.4%
Shoreside Petroleum Petroleum Products 4,156,000 7 2.2% 2,424,272 6 1.6%
GCI Communications 4,043,766 8 1.5%
Kishan Group Hotel/Retail 3,695,600 9 1.5%
00 Pacific Park Real Estate/Housing 2,930,700 10 1.4%
Pacific Park Real Estate/Housing
Polar Equipment,Inc Seafood processing
Suneel Alaska Corporation Coal Export 5,720,351 2 3.7%
Alaska Heritage Tours,Inc. Boat Tours 5,305,623 3 3.4%
New Seward Hotel/Saloon Hotel/Saloon 2,646,596 4 1.7%
Seward Ships/Harbor Gateway Ent. Ship Repair/Gas/Retail 2,612,748 5 1.7%
Anderson Tug&Barge Tug&Barge Service 2,162,321 8 1.4%
Leirer Enterprises,Inc. Real Estate/Leasing 2,023,209 9 1.3%
Harbor Enterprises,Inc. Petroleum Products 1,803,329 10 1.2%
Total 68,886,727 22.8% 33,543,474 21.0%
1) Includes real and personal property
2) Source: Kenai Peninsula Borough assessing records. Above assessed values are a best effort to identify ten largest property taxpayers, although
values reflect aggregation of multiple tax accounts. It is possible that some tax accounts may have different names,making it difficult to identify as being
owned by the same entity. Therefore,some valuations may have been inadvertently omitted above.
3) Based on total assessed value of$159,770,159 in 1999 and$301,784,066 in 2009.
Table 11
CITY OF SEWARD
Principal Taxable Sales by Line of Business
December 31, 2009
Percent of
FY09 Taxable Total Taxable
Type of Business Sales (1) Sales (2)
Retail Trade 46,482,426 51.6%
Accommodations, Food Service 22,256,414 24.7%
Public Administration 6,915,034 7.7%
Wholesale Trade 4,371,140 4.9%
Services 4,743,442 5.3%
Rental Residential Property 2,771,984 3.1%
Manufacturing 985,292 1.1%
Professional 639,116 0.7%
Construction Contracting 614,130 0.7%
Transportation and Warehousing 233,594 0.3%
Other 6,737 0.0%
90,019,309 100%
1) Taxable sales for 2009 are$90,019,309. Source: Kenai Peninsula Borough EDD.
2) Total sales tax collected in 2009 is $3,605,955. Source: Kenai Peninsula Borough Finance
Department confirmation letter.
149
Table 12
CITY OF SEWARD
Ratios of Outstanding Debt by Type(1)
Last Ten Fiscal Years
Debt as a%of
Personal Income
Governmental Activities Business-Type Activities 3) Debt per Capita(4)
Debt as a%
of Estimated
Actual
Total Total TaxableFiscalG.O.Bonds Revenue Capital G.O.Bonds Revenue Capital Total Primary Govern- Primary Govern- Primary Value ofYear2) Bonds(6) Leases 2) Bonds Leases Loans Government mental Gov't mental Gov't Property(5)
2000 $ 8,513,277 3,421,723 6,000,000 588,869 713,841 $ 19,237,710 10.8% 24.4% 3,008 6,798 8.03%2001 8,123,272 2,651,728 5,870,000 804,650 667,723 18,117,373 10.3% 23.0% 2,944 6,567 7.26%2002 7,690,620 1,989,380 5,640;000 627,827 619,244 16,567,071 9.7% 20.8% 2,793 6,016 6.53%2003 7,223,262 267,027 1,386,738 5,405,000 185,000 569,587 15,036,614 9.3% 18.6% 2,681 5,382 6.14%2004 7,069,933• 326,522 665,068 5,155,000 95,000 518,722 13,830,245 9.5% 17.8% 2,695 5,038 5.12%2005 6,348,571 257,533 521,429 6,410,000 465,543 14,003,076 8.7% 18.5% 2,601 5,513 4.91%2006 5,576,146 185,143 373,854 10,590,000 410,429 17,135,572 6.9% 20.5% 2,211 6,575 5.46%VI 2007 4,737,655 109,184 222,345 10,175,000 3,007,351 18,251,535 5.4% 20.5% 1,845 6,948 5.54%2008 4,015,782 27,000,000 45,777 169,218 15,645,000 3,544,957 50,420,734 4.3% 53.5% 1,526 18,948 14.91%2009 3,245,875 27,000,000 811,244 114,124 15,000,000 3,487,373 49,658,616 4.0% 49.0% 1,555 19,034 14.31%
1) Excludes other than debt instruments(i.e.compensated absences,net pension obligation,inter-fund loans)
2) G.O.Bonds represent general obligation bonds pledging the full faith and credit of the City.
3) Personal income is estimated by using Kenai Peninsula Borough income to calculate per capita income.(See http://www.bea.gov/bea/regional/refs)
4) Population data can be found on Table 13.
5) Estimated Actual Taxable Value data can be found on Table 9.
6) Health facilities bonds to be repaid from fees and charges.
Note:Details regarding the City's outstanding debt can be found in the notes to the financial statements.
Source: City of Seward
7
i
Table 13
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
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
1 2000 2830 $ 210,345 $ 11,935 $ 3,421 $ 8,513 4.05%3,008
2001 2759 210,741 10,775 2,651 8,123 3.85% 2,944
2002 2754 214,598 9,680 1,989 7,690 3.58% 2,792
2003 2794 216,698 8,610 1,387 7,223 3.33% 2,585
2004 2745 223,202 7,735 665 7,070 3.17% 2,576
2005 2540 247,173 6,870 521 6,349 2.57% 2,500
2006 2606 263,529 5,950 374 5,576 2.12% 2,140
2007 2627 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
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 2009"
151
Table 14
CITY OF SEWARD
Computation of Direct and Overlapping Bonded Debt
December 31, 2009
Net General Amount
Obligation Percentage Applicable
Bonded Debt Applicable to City of
Jurisdiction Outstanding to Seward Seward
Direct:
City of Seward 3,245,875 (1) 100% 3,245,875
Overlapping:
Kenai Peninsula Borough 24,719,000 (2) 5.3% (3) 1,310,665
27,964,875 4,556,540
1) Excluding general obligation bonds reported in the Enterprise Funds.
2) Source: Kenai Peninsula Borough finance department.
3) Based on ratio of City of Seward assessed value (real and personal property=$301,784,066)
to total assessed value of the Kenai Peninsula Borough($5,691,614,855)
Source: "2009 Alaska Taxable" p. 41, State of Alaska, and KPB main and supplemental tax rolls.
152
Table 15
CITY OF SEWARD
Legal Debt Margin
December 31, 2009
No debt limit mandated by law.
153
r ,
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
Retirement.
Past- Ratio of Debt
Service Total General Service to
Fiscal Cost Total Debt Expenditures General
Year Principal Interest Payments Service (1) 2) Expenditures
2000 $ 507,340 $ 333,657 $840,997 $ 6,342,573 13.26%
2001 390,005 467,974 857,979 6,779,450 12.66%
2002 496,723 384,606 881,329 7,391,687 11.92%
2003 527,612 498,415 1,026,027 7,726,624 13.28%
2004 955,591 386,182 1,341,773 8,124,329 16.52%
2005 800,927 380,662 164,143 1,345,732 9,042,117 • 14.88%
2006 892,837 305,202 1,805,475 3,003,514 10,988,362 27.33%
2007 . . 854,977 260,544 293,114 1,408,635 9,514,080 14.81%
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%
1) General obligation debt reported in the Enterprise Funds, with government commitment, have been
excluded. Beginning in 2005, retirement system payments attributed to past service costs are reflected
as debt service payments in the General Fund. In 2006, includes a one-time payoff of Seward General
Hospital PERS costs in the amount of$1,708,126.
2) Total General Expenditures includes General Fund and Debt Service Funds.
154
f
Table 17
CITY OF SEWARD
Revenue Bond Coverage
Electric Enterprise Fund
Last Ten Fiscal Years
Debt Service Requirements (3)
Gross Net Revenue
Fiscal Revenues Operating Available for Coverage
Year 1) Expenses (2) Debt Service Principal Interest Total 4)
2000 $ 6,704,860 $ 4,171,110 $ 2,533,750 $ 100,000 $ 171,573 $ 271,573 9.33
2001 6,937,500 4,479,770 2,457,730 130,000 163,120 293,120 8.38
2002 6,903,078 4,636,527 2,266,551 140,000 153,198 293,198 7.73
2003 6,715,607 4,417,052 2,298,555 145,000 144,536 289,536 7.94
2004. 7,003,400 5,065,958 1,937,442 155,000 137,184 292,184 6.63
2005 7,542,541 5,539,190 2,003,351 165,000 129,181 294,181 6.81
2006 8,246,477 7,855,990 390,487 210,000 87,500 297,500 1.31
2007 8,709,107 6,651,455 2,057,652 195,000 80,938 275,938 7.46
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
1) Total revenues, including interest, exclusive of grants.
2) Total operating expenses exclusive of depreciation and payments in lieu of taxes.
3) Includes principal and interest of revenue bonds only. Excludes general obligation bonds reported in
Electric Enterprise Fund.
4) Revenue bond agreements require Net Revenue Available for Debt Service be at least 1.30 times the
amount of the total annual debt service requirement.
155
Table 18
CITY OF SEWARD
Revenue Bond Coverage
Harbor Enterprise Fund
Last Nine Fiscal Years (*)
Debt Service Requirements (3)
Net
Revenue
Gross Operating Available
Fiscal Revenues Expenses for Debt Coverage
Year 1)2) Service Principal Interest Total 4)
2001 $ 1,811,896 $ 1,132,855 $ 679,041 $ 132,098 $ 132,098 5.14
2002 1,752,202 1 214 763 537,439 90,000 158,5188 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
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.
156
Table 19
CITY OF SEWARD
Demographic and Economic Statistics
Last Ten Fiscal Years
City of Seward For the Kenai Peninsula Borough (A)
Per Capita
Fiscal School Personal Personal Median Population School Unemployment
Year Population Enrollment Income Income(2) Age 1) Enrollment Rate (3)
2000 2,830 836 78,863,610 27,867 36.1 49,691 9,896 8.00%
2001 2,759 796 79,754,413 28,907 36.3 50,005 9,963 7.90%
2002 2,754 761 82,823,796 30,074 36.3 50,621 9,799 9.40%
2003 2,794 695 80,917,034 28,961 36.7 51,398 9,661 10.00%
2004 2,745 685 77,916,825 28,385 38.1 51,398 9,467 9.50%
2005 2,540 632 75,709,780 29,807 36.3 50,980 9,534 8.70%
2006 2,606 580 83,399,818 32,003 36.3 51,224 9,382 8.10%
v 2007 2,627 577 89,131,483 33,929 39.7 51,350 9,135 7.70%
2008 2,661 577 * 94,239,315 35,415 39.2 53,017 9,135 * 8.20%
2009 2,609 569 101,380,522 38,858 39.1 52,990 9,250 10.10%
A)Data for the City of Seward is not available, but should be comparable to this data which is for the Kenai Peninsula Borough
1) "Alaska Taxable" as of July 1 of each fiscal year
2)Data for 1997-2002 not available for Seward so utilizes Kenai Peninsula Borough data for 1997-2002,which should be comparable.
3)Data is provided by the State of Alaska Department of Labor: http://www.labor.state.ak.us/research/emp_ue/kblfhtm
Data unavailable at this time,prior year information is used
The Bureau of Labor Statistics, changed their method of calculating unemployment rates; comparable data not available prior to 2001.
Table 20
CITY OF SEWARD
Top 10 Public and Private Employers for 2009
Rank* Name
1 Alaska Department of Corrections
2 Providence Seward Medical Center
3 Alaska Sealife Center
4 City of Seward
5 Kenai Peninsula Borough School District
6 Icicle Seafoods
7 Alaska Department of Labor and Workplace Development
8 Safeway
9 Shoreside Petroleum, Inc.
10 Ciri Alaska Tourism Corp
Source-Alaska Department of Labor and Workforce Development, Research and Analysis
158 I
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Table 22
CITY OF SEWARD
Operating Indicators by Function
Last Ten Fiscal Years
Year
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Function
Public Safety
Police Services:
Physical arrests 364 483 403 467 379 458 305 257 257 290
Traffic violations/warnings 1,542 1,186 431 1,059 808 1,406 1,010 1,187 1,187 1,084
Parking violations 161 146 139 227 196 56 59 40 40 97
Fire and Emergency Services:
Number of calls answered 183 216 188 169 153 181 179 198. 299 293 (a)
Harbor
Registered vessels 3,857 4,000 3,874 4,064 4,344 4,344 3,100 1,630 3,347 3,593
Number on waiting list for slips 323 327 352 385 447 471 477 362 287 257
Number of boat lifts 565 613 418 383 414 382 423 417 425 436
General cargo tonnage 5,803 1,831 3,117 149 317 35,318 573 582 606 0
o Fish product tonnage 21,758 13,502 18,995 23,405 16,787 21,300 12,972 21,873 16,299 12,018
Petroleum(gallons) 2,921,054 2,610,537 2,782,117 2,614,014 2,362,865 2,569,060 2,691,297 2,957,732 2,780,723 2,349,695
Water and Wastewater Systems:
Water service connections 857 876 856 884 858 917 921 933 928 945
Daily average consumption(gallons) 1,300,000 1,565,000 1,300,000 1,300,000
Sewer service connections 832 856 838 854 826 887 890 901 898 917
Daily average treatment(gallons) 870,000 715,000 504,745 504,745
Electric System:
Number of service connections 2,333 2,458 2,471 2,459 2,543 2,831 2,901 3,089 3,112 3,167
Total kilowatt hour sales 55,496,119 54,940,719 53,800,825 54,664,399 55,682,929 54,786,754 55,412,943 56,228,590 56,360,698 55,716,466
a) Beginning June 2008,began providing aid response for medical calls.
Source: City of Seward departments
f 1
Table 23
CITY OF SEWARD
Capital Asset Statistics By Function
Last Ten Fiscal Years
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Lane miles of street 43.14 43.64 43.64 44.14 44.14 44.14 52.00 52.00 52.00 53.00
Number of street lights 198 233 235 235 235 235 258 258 265 265
Public Safety:
Number of fire stations 2 2 2 2 2 2 2 2 2 2
Fire rating(ISO) 4/9 4/9 4/9 4/9 4/9 4/9 4/9 4/9 4/9 4/9
Number of fire hydrants 185 185 197 197 197 197 217 221 220 220
Number of police stations 1 1 1 1 1 1 1 1 1 1
Number of Facilities:
Parks and playgrounds 11 17 18 18 19 19 19 19 20 20
Libraries 1 1 1 1 1 1 1 1 1 1
Sewer treatment plants 2 2 2 2 2 2 2 2 2 2
Electric distribution line(miles 55 55 55 55 63 63 65 65 65 65
Electric substations 3 3 3 3 3 3 3 3 3 3
Source: City of Seward departments
Table 24
CITY OF SEWARD
Property Value, Construction, and Bank Deposits
Last Ten Fiscal Years
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
2000 $ 167,589,200 23 $ 1,982,065 36 $ 1,469,000 $ 45,217,355
2001 172,127,800 27 1,922,767 21 794,214 46,527,000
2002 175,990,700 31 4,888,627 31 883,708 42,577,128
2003 175,842,600 34 6,611,765 25 1,453,898 47,679,000
2004 191,098,900 29 15,080,750 28 2,645,400 54,006,361
2005 198,141,000 21 888,820 33 1,974,323 56,467,873
2006 220,649,800 36 24,332,857 22 1,204,392 59,374,764
2007 226,885,700 20 22,555,446 17 589,254 59,042,303
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
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)
162
Table 25
CITY OF SEWARD
Miscellaneous Statistics
December 31,2009
Date of Incorporation June 1, 1912
Class Home Rule City
Form of Government Council/Manager
Area,Square Miles 22
Miscellaneous Operational Statistics:
Library-number of volumes 30,997
Fire Department-Number of volunteers 35
Sewer System-Maximum daily capacity(gallons) 1,300,000
Water System-Maximum daily capacity(gallons) 8,856,000
Electric System:
Miles of distribution lines 65
Miles of transmission lines 42
Harbor-Number of permanent slips 669
City Employees:
Regular Employees-Full-time equivalent 94.05
Temporary Employees-Full-time equivalent 11.78
Demographics:
School Enrollment,City of Seward(3)569
Unemployment Rate-Borough-Wide(1) 10.1%
Population(2) 2,609
Average annual earnings(4) 38,858
Qualified Voters 1,860
Facilities and Services not included in the reporting entity:
Education:
Elementary School
Number of students enrolled 294
Number of teachers 25.00
Middle School
Number of students enrolled 92
Number of teachers 8.25
High School
Number of students enrolled 183
Number of teachers 11.00
Alaska Vocational Technical Center
Number of students served annually 1,503
Number of teachers 38
Healthcare Facilities-a component unit of the reporting entity:
Providence Seward Medical&Care Center
Number of patient beds(4 primary care;2 swing beds) 6
Number of long-term care beds 40
Number of employees:
Exempt 7
Non-Exempt 138
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
163
this page left blank intentionally)
i
164
llikunda, RSM Mc GladreyMNetwork
An Independently
Q Cottrell & G o., Inc.
Certified Public Accountants&Consultants Offices in Anchorage&Kenai
Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and
Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government
Auditing Standards
Honorable Mayor and City Council
City of Seward,Alaska
We have audited the financial statements of the governmental activities, the business-type activities,
each major fund, and the aggregate remaining fund information of the City of Seward, Alaska as of
and for the year ended December 31, 2009, which collectively comprise City of Seward's basic
financial statements and have issued our report thereon dated May 21,2010. Our report was modified
to include a reference to other auditors. We conducted our audit in accordance with auditing
standards generally accepted in the United States of America and the standards applicable to financial
audits contained in Government Auditing Standards, issued by the Comptroller General of the United
States. Other auditors audited the financial statements of Providence Seward Medical Center, as
described in our report on City of Seward's financial statements. The financial statements of
Providence Seward Medical Center were not audited in accordance with Government Auditing
Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City's internal control over financial
reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion
on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of
the City's internal control over financial reporting. Accordingly, we do not express an opinion on the
effectiveness of the City's internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent or
detect and correct misstatements on a timely basis.
A material weakness is a deficiency, or combination of deficiencies, in internal 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.
165
3601 "C" Street, Suite 600 * Anchorage,Alaska 99503 * (907)278-8878 * Fax (907)278-5779 *www.mcc-cpa.com
Honorable Mayor and City Council
City of Seward, Alaska
Our consideration of internal control over financial reporting 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 financial reporting that might be deficiencies, significant deficiencies or material weaknesses.
We did not identify any deficiencies in internal control over financial reporting that we consider to be
material weaknesses, as defined above.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and
material effect on the determination of financial statement amounts. However, providing an opinion
on compliance with those provisions was not an objective of our audit, and accordingly, we do not
express such an opinion. The results of our tests disclosed no instances of noncompliance or other
matters that are required to be reported under Government Auditing Standards.
This report is intended solely for the information and use of the City of Seward's management,
Honorable Mayor and City Council, 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
May 21, 2010
166
9Mlkunda RSM McGladrey Network
1 Cottrell & Co., Inc.
An Independently Owned Member
Certified Public Accountants&Consultants Offices in Anchorage&Kenai
Independent Auditor's Report on Compliance with Requirements Applicable to Each Major Program
and on Internal Control Over Compliance in Accordance with OMB Circular A-133
Honorable Mayor and City Council
City of Seward,Alaska
Compliance
We have audited the compliance of City of Seward with the types of compliance requirements
described in the OMB Circular A-133 Compliance Supplement that are applicable to each of its major
federal programs for the year ended December 31, 2009. City of Seward's major federal programs
are identified in the summary of auditor's results section of the accompanying schedule of-findings
and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants
applicable to each of its major federal programs is the responsibility of City of Seward's
management. Our responsibility is to express an opinion on City of Seward's compliance based on
our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in
the United States of America; the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-
133,Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB
Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about
whether noncompliance with the types of compliance requirements referred to above that could have
a direct and material effect on a major federal program occurred. An audit includes examining, on a
test basis, evidence about City of Seward's compliance with those requirements and performing such
other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the
City of Seward's compliance with those requirements.
In our opinion, the City of Seward complied, in all material respects, with the requirements referred
to above that are applicable to each of its major federal programs for the year ended December 31,
2009.
167
3601 "C" Street, Suite 600 *Anchorage, Alaska 99503* (907)278-8878 * Fax(907)278-5779 *www.mcc-cpa.com
Honorable Mayor and City Council
City of Seward, Alaska
Internal Control Over Compliance
The management of City of Seward is responsible for establishing and maintaining effective internal
control over compliance with the requirements of laws, regulations, contracts, and grants applicable
to federal programs. In planning and performing our audit, we considered City of Seward's internal
control over compliance with the requirements that could have a direct and material effect on a major
federal program in order to determine our auditing procedures for the purpose of expressing our
opinion on compliance, and to test and report on internal 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 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 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 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, 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.
fin
Anchorage,Alaska
May 21,2010
168
Mikunda RSM McGladrey Network
An Independently Owned Member
Cottrell & Co., i1 .
Certified Public Accountants&Consultants Offices in Anchorage&Kenai
Independent Auditor's Report on Compliance with Requirements Applicable to Each Major Program
and on Internal Control Over Compliance in Accordance with the State of Alaska Audit Guide andpf
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, 2009. 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 rants applicable to each of its
major state programs is the responsibility of City of Seward's management. Our responsibility is to
express an opinion on City of Seward's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America; the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States; and the State of Alaska Audit Guide
and Compliance Supplement for State Single Audits. Those standards and the State of Alaska Audit
Guide and Compliance Supplement for State Single Audits require that we plan and perform the audit to
obtain reasonable assurance about whether noncompliance with the types of compliance requirements
referred to above that could have a direct and material effect on a major state program occurred. An audit
includes examining, on a test basis, evidence about City of Seward's compliance with those
requirements and performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal
determination of City of Seward's compliance with those requirements.
In our opinion, City of Seward complied,in all material respects,with the requirements referred to above
that are applicable to each of its major state programs for the year ended December 31,2009.
169
3601 "C" Street, Suite 600 * Anchorage,Alaska 99503 * (907)278-8878 *Fax (907) 278-5779 * www.mcc-cpa.com
Honorable Mayor and City Council
City of Seward,Alaska
Internal Control Over Compliance
The management of City of Seward is responsible for establishing and maintaining effective internal
control over compliance with the requirements of laws, regulations, contracts, and grants applicable to
state programs. In planning and performing our audit, we considered City of Seward's internal control
over compliance with the requirements that could have a direct and material effect on a major state
program in order to determine our auditing procedures for the purpose of expressing our opinion on
compliance, 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.
A 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.
t
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, 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
May 21, 2010
170
CITY OF SEWARD
Schedule of Findings and Questioned Costs
Year Ended December 31, 2009
I. Summary of Auditor's Results
Financial Statements
Type of auditor's report issued Unqualified
Internal control over financial reporting:
Material weakness(es)identified? yes X no
Significant deficiency(ies) identified that are
not considered to be material weakness(es)? yes X none reported
Noncompliance material to financial
statements noted? yes X no
Federal Financial Assistance
Internal control over major programs:
Material weakness(es) identified? yes X no
Significant deficiency(ies) identified that are
not considered to be material-weakness(es)? yes X none reported
Type of auditor's report issued on compliance
for major programs? Unqualified
Any audit findings disclosed that are required to
be reported in accordance with section 510(a) of
Circular A-133? yes X no
Identification of major programs:
CFDA
Agency Number Name of Federal Program or Cluster
Department of Agriculture 10.904 NRCS Flood Mitigation
Denali Commission 90.100 Seward East Harbor Reconstruction
Dollar threshold used to distinguish between
Type A and Type B programs: 300,000
Auditee qualified as low-risk auditee? X yes no
State Financial Assistance
Internal control over major programs:
Material weakness(es) identified? yes X no
Significant deficiency(ies) identified that are
not considered to be material weakness(es)?yes X none reported
171
CITY OF SEWARD
Schedule of Findings and Questioned Costs, continued
Summary of Auditor's Results, continued
State Financial Assistance, continued
Type of auditor's report issued on compliance
for major programs? Unqualified
Dollar threshold used to distinguish a state
major program? 75,000 •
II. Financial Statement Findings
None noted. L
III.Federal Award Findings and Questioned Costs
None noted.
IV.State Award Findings and Questioned Costs
None noted.
j
172
CITY OF SEWARD
Summary Schedule of Prior Audit FindingsrYg
Year Ended December 31, 2009
Federal
There were no prior year audit findings.
ti
State of Alaska
There were no prior year audit findings.
173
CITY OF SEWARD
Corrective Action Plan
Year Ended December 31, 2009
4
There are no current year findings; therefore no corrective action plan is required.
174