Loading...
HomeMy WebLinkAbout2006 Comprehensive Annual Financial ReportCOMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF SOUTH BEND, INDIANA For The Year Ended December 31, 2006 Prepared By: Department of Administration and Finance M. Catherine Fanello, City Controller City of South Bend, Indiana Comprehensive Annual Financia( Report For The Year Ending December 31, 2006 Table of Contents INTRODUCTORY SECTION Table of Contents ........................................................................................................................1-3 City Officials .................................................................................................................4 Controller's Letter of Transmittal ...........................................................................................5-16 Certificate of Achievement for Excellence in Financial Reporting ..................................................17 Organization Chart ..........................................................................................................................18 FINANCIAL SECTION Independent Auditor's Report on Financial Statements and Supplementary Schedule of Expenditures of Federal Awards ............................................19-20 Management's Discussion and Analysis ...................................................................................21-31 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Assets ............................................................................................... 32-33 Statement of Activities .................................................................................................. .....34 Fund Financial Statements: Balance Sheet-Govemmental Funds ......................................................................... 35-36 Statement of Revenues, Expenditures and Other Changes in Fund Balances =Govemmental Funds ........................................................................... .....37 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Govemmental Funds to the Statement of Activities .................. .....38 Statement of Net Assets -Proprietary Funds .............................................................. 39-40 Statement of Revenues, Expenses and Other Changes in Fund Net Assets -Proprietary Funds .................................................................... .....41 Statement of Cash Flows -Proprietary Funds ............................................................. 42-43 Statement of Fiduciary Net Assets -Fiduciary Funds .................................................. .....44 Statement of Changes in Fiduciary Net Assets -Fiduciary Funds .............................. .....45 Notes to Financial Statements ............................................................................................46-77 Required Suoolementarv Information: Schedules of Funding Progress ...............................................................................................78 Schedules of Contributions From the Employer and Other Contributing Entities ....................79 Budgetary Comparison Schedules ......................................................................................80-85 Budget/GAAP Reconciliafion ...................................................................................................86 Combining and tndividual Fund Statements and Schedules: Govemmental Funds: Description -Nonmajor Govemmental Funds ....................................................................87-92 Combining Balance Sheet -Nonmajor Govemmental Funds ..........................................93-101 Combining Statement of Revenues, Expenditures and Other Changes in Fund Balances -Nonmajor Govemmental Funds ............................................................102-110 Schedules of Revenues, Expenditures, and Changes in Fund Balances -Budget and Actual .................................................................................111-126 Nonmajor Enterprise Funds: Description .............................................................................................................................127 Combining Statement of Net Assets ...............................................................................128-129 Combining Statement of Revenues, Expenses and Other Changes in Fund Net Assets ..............................................................................................................130 City of South Bend, Indiana Comprehensive Annual Financial Report For The Year Ending December 31, 2006 Table of Contents FINANCIAL SECTION (Continued) Combining Statement of Cash Flows ....................................................................................131-132 Internal Service Funds: Description .............................................................................................................................133 Combining Statement of Net Assets ......................................................................................134 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets ..............................................................................................................135 Combining Statement of Cash Flows ..............................................................................136-137 Fiduciary Funds: Description .................:...........................................................................................................138 Combining Statement of Fiduciary Net Assets -Pension Trust Funds .................................139 Combining Statement of Changes in Fiduciary Net Assets -Pension Trust Funds ..............140 Statement of Changes in Assets and Liabilities -Agency Funds ..........................................141 STATISTICAL SECTION Net Assets by Component -Last Ten Years .............................................................................. 142 Changes in Nets Assets -Last Ten Years ............................................................................143- 145 Fund Balances, Governmental Funds -Last Ten Years ............................................................. 146 Changes in Fund Balances, Governmental Funds -Last Ten Years ...................................147- 148 Full-Time Equivalent City Government Employees -Last Ten Years .......................................... 149 Principa( Property Taxpayers -Current and Nine Years Ago ...................................................... 150 Principal Employers -Current and Nine Years Ago ..................................................................... 151 Ten Largest Taxpayers -Personal Property ................................................................................ 152 Operating Indicators by FunctioNProgram -Last Ten Yeas ........................................................ 153 Capital Asset and Infrastructure Statistics by Function/Program -Last Ten Years .................. 154 Direct and Overlapping Property Tax Rates -Last Ten Years .................................................... 155 Assessed Value and Actual Value of Taxable Property -Last Ten Years ................................... 156 Detail of Net Assessed Valuation ................................................................................................. 157 Assessed and Estimated Actual Value of Taxable Property -Last Ten Years ............................ 158 Property Tax Levies and Collections -Last Ten Years ................................................................ 159 Computation of Legal Debt Margin ............................................................................................... 160 Legal Debt Margin Information -Last Ten Years ......................................................................... 161 Ratios of Outstanding Debt by Type -Last Ten Years ................................................................ 162 Computation of Direct and Overlapping Debt ............................................................................... 163 Ratio of Net General Bonded Debt to Assessed Value -Last Ten Years .................................. 164 Ratio of Annual Debt Service Expenditures for General Bonded Debt to General Governmental Expenditures -Last Ten Years .............................................................. 165 Schedule of Revenue Bond Coverage, Water Utility Bonds -Last Ten Years ........................ 166 Schedule of Revenue Bond Coverage, Wastewater Utility Bonds -Last Ten Years ................... 167 County Income Tax Revenue -Last Ten Years ........................................................................... 168 City's Ten Largest Water Customers ............................................................................ 169 City's Ten Largest Sewage Works Customers ............................................................................. 170 Property Tax Collections -Cash Basis - 2003 to 2006 ............................................................... 171 Total County Option Income Tax Distribution by Taxing Unit - 2001 to 2006 ............................... 172 Demographic Statistics -Last Ten Years .................................................................................... 173 Comparison of Growth Rates in Personal Income for St. Joseph County, The State of Indiana and U.S. Disposable Personal Income ............................................... 174 New Construction, Number of Permits and Property Values -Last Ten Years ........................... 175 Financial Institution Data -Last Ten Years .................................................................................. 176 2 City of South Bend, Indiana Comprehensive Annual Financial Report For The Year Ending December 31, 2006 Table of Contents STATISTICAL SECTION (Continued) Insurance Coverage ...................................................................................................177 Miscellaneous Statistics ........................................................................................................178-179 COMPLIANCE SECTION Supplemental Audit of Federal Awards .........................................................................180 Independent Auditor's Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards ................................... 181-182 Independent Auditor's Report on Compliance With Requirements Applicable to Each Major Program and Internal Control Over Compliance in Accordance With OMB Circular A-133 .................................................... 183-184 Schedule of Expenditures of Federal Awards ....................................................................... 185-186 Notes to Schedule of Expenditures of Federal Awards ......................................................... .......187 Schedule of Findings and Questioned Costs ........................................................................ .......188 Auditee Prepared Schedules: Summary Schedule of Prior Audit Findings ............................................................... ......189 CITY OFFICIALS Office Official Term Mayor Stephen J. Luecke 01-01-04 to 12-31-07 Controller M. Catherine Fanello 04-18-05 to 12-31-07 City Clerk John Voorde 01-01-04 to 12-31-07 President of the Board of Public Works Gary Gilot 01-01-06 to 12-31-07 Common Council Members 1~' District Derek D. Dieter 01-01-04 to 12-31-07 2"d District Charlotte Pfeifer 01-01-04 to 12-31-07 3rd District Roland Kelly 01-01-04 to 12-31-07 4th District Ann Puzzello 01-01-04 to 12-31-07 5t" District David Varner 01-01-04 to 12-31-07 6th District Ervin Kuspa 01-01-04 to 12-31-07 At Large Karen L. White 01-01-04 to 12-31-07 At Large Timothy A. Rouse 01-03-05 to 12-31-07 At Large AI (Buddy) Kirsits 01-01-04 to 12-31-07 4 C.OUNTY-CSTY BUll.DING 227 W. JEFFERSON BLVD. SOVrH BEND,INDUWA 46601-1830 Cn-Y OF SOUTH BEND STEPHEN J. LLTECKE, MAYOR PHONE 574/235-9216 FAx 574/235-9928 TDD 5741235-5567 DEPARTMENT OF t~DMINISTRATION AND FINANCE M. CATHERINE FANELLO CONTROLLER June 18, 2007 To the Honorable Mayor Stephen 3. Luecke, Members of the City Council and Residents of the City of South Bend: The comprehensive annual financial report of the City of South Bend, Indiana (the "City") for the year ended December 31, 2006 is hereby submitted. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the various funds and account groups of the City. All disclosures necessary to enable the reader to gain an understanding of the government's financial activities have been included. GAAP requires that management provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of the Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City of South Bend's MD&A can be found immediately following the independent auditors report. The comprehensive annual financial report is presented in four sections: introductory information, financial information, statistical information and federal awards supplemental information. The introductory section includes this transmittal letter, the City's organizational chart, a list of principal City officials and the Certificate of Achievement for Excellence in Financial Reporting awarded to the City of South Bend for the year ended December 31, 2005. The financial section begins with the independent auditors' report on the City's financial statements and schedules, the City's management and analysis report, followed by the City's basic financial statements and accompanying footnotes. The remaining portion of this section includes the combining and individual fund and account group financial statements and schedules. The statistical section includes selected financial and demographic information generally presented on a multi-year basis, which has been provided to give the reader a broader understanding of the City. This document ends with the federal awards compliance section, which includes the results of the supplemental audit of the City's federal awards and the internal controls necessary for compliance. JANICE I.. HAIL IJZ ROWS THOMAS SKARBEK SUSAN WALLACE ROBERT ALLEN DIRECTOR DIRECTOR DIRECTOR MANAGER DIRECTOR HUMAN RESOURCES CITY FINANCE BUDGETING HC FINANCIAL REPORTING BENEFITS INFORMATION TECHNOLOGY The City is required to undergo an annual single audit in conformity with the provisions of the U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments and Non-Profit Organizations, the provisions of Indiana Code section 5-11-1-9 and the requirements of the Indiana State Board of Accounts. Information related to the single audit, including the schedule of federal financial assistance, findings and recommendations, and the auditors' reports.on the internal control structure and compliance with applicable laws and regulations, is included in this document. The following pages of this transmittal letter begin with a general overview of South Bend and the surrounding area. Also summarized are the key financial, budgetary and property tax controls with which the City is required to comply. The remainder includes a discussion of the prior year's financial challenges and accomplishments, the City's goals and objectives for this year and beyond and other key issues the City is facing along with the impact they may have on current and future budgets. GENERAL INFORMATION The City of South Bend is the county seat of St. Joseph County, Indiana, and is the fourth largest city in the state. Its 2000 U.S. Bureau of the Census population of 107,789 classifies it as a "City of the Second Class" under Indiana statues (cities with a population of 35,000 to 250,000). It operates with a mayor as chief executive and anine-member City Common Council composed of six members elected from districts and three members at-large. The City provides a full range of traditional general governmental services to its citizens. These services include police and fire protection; sanitation services; the construction and maintenance of highways, streets and infrastructure; recreational activities and cultural events. In addition to general governmental activities, the Common Council or City Board of Public Works exercises oversight over the South Bend Water Works, the South Bend Wastewater Treatment Facility, the Century Center, the College Football Hall of Fame, the Studebaker Collection, the South Bend Redevelopment Authority and several downtown parking facilities. Location St. Joseph County lies within the heartland of the manufacturing belt and metropolitan regions of the Upper Midwest and Canada. The City of South Bend is located in the north central part of Indiana, ten miles south of the Michigan state line, and is commonly known to be within the "Michiana" area. The Michiana area is a vibrant and diverse area with a strong economy based on a mix of agricultural, service, manufacturing, other commercial and tourism industries. This diverse economic mix creates varied employment opportunities for the area's residents while providing insulation via diversification from future economic downturns. The City is approximately 90 miles east of Chicago and 140 miles north of Indianapolis. Accessibility to transportation, including Interstate 80/90, a regional airport (which is the second busiest in the State of Indiana), the South Shore rail line and a port on Lake Michigan, has supported economic growth within the community. Proximity to Chicago, the largest rail and intermodal (rail/truck/ocean/inland waterway) transfer point in the country, is a significant 6 advantage to the City of South Bend. St. Joseph County /South Bend -Economic Conditions and Outlook St. Joseph County, with its 2000 U.S. Bureau of the Census population of 265,559, boasts a strong history of manufacturing which continues today. As a complement to that, the service industry and retail trade has also flourished, creating a balance that serves the community well. . The County has experienced a net growth in population of 26,945 (11.3% increase) between 1960 and 2000. After experiencing a reduction of 2.6% during 1969 to 1983, at which time the entire Midwest was at the depth of its economic restructuring and recess, the County's population increased 4.0% between 1983 and 1990 and another 7.5% between 1990 and 2000. The total resident labor force in December 2006 of 136,217 in St. Joseph County is typical of the Midwest: well trained with a strong work ethic. Approximately 77.7% of the area's adult population are high school graduates or higher (as compared to the national average of 75%) with an estimated 20.3% with a Bachelor's Degree or higher. There are nine colleges, universities and technical schools within South Bend and the surrounding area including the University of Notre Dame, Indiana University of South Bend, Saint Mary's College, Bethel College and Ivy Tech State College. At the high school level, there are school-to-work transition programs that help prepare students for the world of work. St. Joseph County is currently experiencing an average unemployment rate of around 5.1 %, which compares to the December 2006 State of Indiana unemployment rate of 5.0%. The employment profile for St. Joseph County provides a good overview of the economic make- up of this community. Employment statistics for the County's major economic sectors are as follows: Economic Sector Construction Manufacturing Health Care/Social Services Wholesale Trade Retail Trade ProfessionaUTechnical Services Accommodations/Food Service Goverrunental Number Employed % of Total 8,097 5.1 18,845 11.8% 19,021 11.9% 7,427 4.7% 18,439 11.6% 7,828 4.9% 10,493 6.6% 15,498 9.7% St. Joseph County presently has an estimated 100,743 households with an average per capita personal income of $32,354, which compares favorably to the State of Indiana average per capita income of $31,173. Health and education lead the employment statistics for St. Joseph County. The largest employers in St. Joseph County as of December 2006 were as follows: University of Notre Dame (4,200); Memorial Health Systems (3,600); South Bend Community School Corporation (3,338); Saint Joseph Regional Medical (3,260); AM General (2,292); St. Joseph County (2,025); The Diocese of Fort Wayne/South Bend (1,750); Indiana University of South Bend (1,400); The City of South Bend (1,288); and Madison Center (1,239). The following provides a profile of the residents of St. Joseph County: Gender: 47.7% male; 52.3% female Age: 37.9% 0-24 years of age; 25.5% 25-44 years of age; 23.6%% 45-64 years of age; and 13.0% 65 years of age and older. Race: 80.1% White; 12.0% Black/African American; 5.8% Hispanic/Latino; 1.6% Asian; and .5% Other Marital Status: 50% Married; 18% Widowed/Divorced/Separated; and 32% Single Home Ownership: 67.5% own; 32.5% rent/other Type of Dwelling: 78.6% single unit; 21.4% other The cost of living continues to be one of the greatest advantages of living in this community. The housing costs in South Bend are well below the national and regional averages. Per a report compiled by the National Realtor's Association in the first quarter of 2007, the median sales price for a single family home in the South Bend-Mishawaka Statistical Area was $85,600 as compared to a median sales price of $267,300 in Chicago and $112,500 in Indianapolis. The national median sales price is $218,000.00. South Bend's ACCRA cost of living index was 97.8. A further breakdown of South Bend's cost of living index is as follows: grocery items - 87.8; housing costs - 102.8; utilities - 103.8; transportation - 97.1; health care - 97.9; and. miscellaneous goods and services - 97.9. The City of South Bend continues to place high emphasis on a growing and diversified local economy. It has been active in developing ten industrial parks, offering itself as a low-cost alternative to the Chicago metropolitan area to companies engaged in light manufacturing, distribution and services. More than 240 businesses operate in South Bend's industrial parks, including companies engaged in metalworking, plastics, warehousing and distribution, and professional services. The South Bend Community School Corporation serves the entire City and some of the surrounding area and has a current enrollment of approximately 21,926 students in grades kindergarten through high school. An estimated 4,441 students attend private or parochial schools within the City. The nine institutions of higher education and technical training located within the South Bend area have a total enrollment of approximately 31,388. Over the years, the University of Notre Dame has provided a stabilizing influence on the economy with a very significant economic impact upon the community. South Bend has continued to progress in its growth since 1842, when Father Edward Sorin named his rustic log chapel "Notre Dame du Lac" and began to teach the local Indians. Today, 8 the chapel has grown into the University of Notre Dame. In 1852, H.C. Studebaker started the industry of making wagons and horse drawn buggies that evolved into the manufacturing of the Studebaker automobile. It made the name Studebaker synonymous with the area of South Bend. Another industrial firm that would later become the area's largest began in 1923 when Vincent Bendix began manufacturing automotive brakes. In 1929, the company became the Bendix Aviation Corporation, and now, as Honeywell (formerly AlliedSignal Inc.), is a leading manufacturer of automotive and aerospace products. Other special attractions within the South Bend area include the Olympic-class East Race Waterway and the East Bank area; the newly renovated Moms Performing Arts Center, which provides for the Broadway Theater League, the South Bend Symphony Orchestra with the Chamber and Pops Orchestras and the Southold Dance Theater and Patchwork Dance Company; the South Bend Civic Theater; the Studebaker National Museum; the South Bend Regional Museum of Art; the Snite Museum of Art at Notre Dame; the Northern Indiana Center for History; Copshaholm/The Oliver Mansion; the College Football Hall of Fame; Century Center; Potawatomi Zoo; the Morns Conservatory/Muessel-Ellison Tropical Gardens; Healthworks! Kids Museum; the Farmers' Market; and the Belleville Softball Complex. The Coveleski Regional Baseball Stadium (named after South Bend native and Hall of Fame pitcher Stanley Coveleski) is a 5,000-seat facility which opened in 1987 and is rated among the best in minor league baseball. It had record crowds during its seasons of play with the South Bend Silver Hawks, a minor league team of the Chicago White Sox through the 1997 season. During 1997, the team signed on with the Arizona Diamondbacks and had continued success. During 2006, a group of local businessmen led by former South Bend Mayor and Indiana Governor Joe Kernan acquired ownership of the team. Additional miscellaneous information about the City of South Bend can be found in the statistical section of this report. Financial. Budgetary and Property Tax Controls The City's Management Team is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the government are protected from loss, theft or misuse and to ensure that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. Single Audit. As a recipient of federal and state financial assistance, the City also is responsible for ensuring that an adequate internal control structure is in place to ensure compliance with applicable laws and regulations related to those programs. This internal control structure is subject to periodic evaluation by management of the City. As part of the City's single audit described earlier, tests are performed to determine the adequacy of the internal control structure, including that portion related to federal financial assistance programs, as well as to determine 9 that the City has complied with applicable laws and regulations. The results of the City's single audit for the year ended December 31, 2006 disclosed no instances of significant material weaknesses in the internal control structure and no significant violations of applicable laws and regulations. Budgetary Controls. In accordance with Indiana statutes, the City maintains budgetary controls integrated within the accounting system. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget (prepared on a cash basis) which is adopted by the City Council and then reviewed and approved by the Indiana's Department of Local Government and Finance. Activities of the general fund, certain special revenue and capital projects funds and debt service funds are included in the annual budget. The level of budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount) is established by major budget classification within funds. The City Council may transfer appropriations from one major budget classification to another within a department by ordinance as long as the total appropriations for that department are not exceeded. Transfers from one department to another, or additional appropriations in excess of the original budget, must be submitted to and approved by the Department of Local Government and Finance after these appropriations have been approved by the City Council. The City also maintains an encumbrance accounting system as one technique of accomplishing budgetary control. Encumbered amounts do not lapse at year end and-are carried over to the subsequent year as a part of the subsequent year's budget. Property Tax Controls. In addition to budgetary and other controls established by Indiana statute, the City must operate within specific and rigid controls governing the amount of property tax it may levy. The property tax control program, which began in 1973, limits the amount of property tax that may be levied by each unit of government in its legally budgeted funds. The total amount of property tax levied by the unit may increase by the six year average annual growth in Indiana personal non-farm income, as calculated by the U.S. Bureau of Economic Analysis, with a 6% maximum. In addition, if a unit determines that it cannot maintain basic governmental services for its residents within the property tax "freeze," it may appeal to the State Local Government Tax Control Board for an "excess levy" in certain specific instances. As a part of the property tax control program, the state transfers an amount generally equal to 20% of the total property tax levy (except for debt service levies as described below) to the County Auditor to be distributed to each taxing unit as a replacement for 20% of the property taxes levied. This "property tax replacement" is funded through the state sales tax. The levy for Debt Service funds is controlled via a review and approval process by the Government Tax Control Board (with a subsequent review and approval by the Department of Local Government and Finance) for each issuance of general obligation indebtedness (or lease- purchase) entered into by a taxing unit. In addition, all indebtedness incurred after 1983 no longer receives the 20% state property tax replacement funds mentioned above. A historical view of the City's tax rate and its net assessed valuation has been included in the statistical section of this document. 10 Citywide Goals and Objectives for 2006 and Beyond The City has developed eight broad goals that focus on the following areas: economy, safety, quality of life, trust, responsiveness, infrastructure, finance and workforce. The City has identified various objectives that are tied directly to these goals which, if achieved, will result in the attainment of these goals. The eight goals are listed below. GOAL: The Community's Economy Improve South Bend's economy to ensure a vigorous local business climate; ample employment, business and investment opportunities for all our customers; and a tax base that is sufficient to meet the needs of the City, its residents and other customers. GOAL: The Community's Public Safety and Civilit Improve South Bend's public safety and civility to ensure that every resident and other customers can live, work, play, run a business and raise a family in a humane, pleasant and safe environment; have adequate, affordable and timely access to all forms of emergency services; and can contribute and participate in a community where people of different backgrounds live in mutual respect and harmony. GOAL: The Community's Ouality of Life Improve South Bend's quality of life to ensure that every resident and every family can earn an adequate income; secure adequate housing; live in a safe, pleasant and humane neighborhood; enjoy a wide range of social, cultural and recreational opportunities; and have access to quality educational and medical services within an excellent natural and manmade environment. GOAL: Trust in City Government Improve residents' trust in City government to ensure that South Bend has a broad base of consensus and support on which to build the future, a strong foundation for collaborative action and community partnerships; and an increase in resident and customer participation in the daily public life of the community. GOAL: The City's Responsiveness, Efficiency, and Effectiveness Improve the responsiveness, efficiency, and effectiveness of City government to ensure that the City's customers get the value they expect and deserve. GOAL: The City's Infrastructure Improve the City's infrastructure to ensure that South Bend can support physical growth and 11 economic development; and offer an excellent quality of life to all of its residents and other customers. GOAL: The City's Financial Condition Improve the financial condition of City government to ensure that South Bend has the financial resources necessary to achieve all its goals for the next five years. GOAL: The City's Workforce Improve the City government's existing workforce, work environment and human development systems to ensure that South Bend has the human resources necessary to achieve all its goals for the next five years. City Mission Statement and Department Purpose Statements The City provides services to its customers through thirteen administrative departments. These departments have unique purposes that are intended to support the citywide mission statement which is "to be recognized as a model city:' Each department has developed a purpose statement which identifies their specific role. Mayor's Office: Leading the community to become a model city through formulating policy, directing operations and responding to customer concerns. Common Council: Making certain that our City government is always responsive to the needs of our residents and that the betterment of South Bend is always our highest priority. City Clerk's Office: Preserving all City Ordinances and Council meeting minutes for generations yet to be, and providing fair and consistent treatment of our Ordinance Violations Bureau customers. Administration and Finance: Providing financial and organizational stability for the City through sound financial management while ensuring the existence of a safe work environment, quality employee benefits and equal treatment for all City employees. Legal Department: Providing superior, professional and ethical legal services for our client, the City of South Bend. Police Department: Protecting the life, property and personal liberties of all individuals; improving the overall quality of life by deterring criminal activity and respecting cultural diversity; delivering fair and impartial law enforcement services to all residents. 12 Fire Department: Providing the highest level of Fire and Emergency Medical Services possible to all of our customers, saving lives and property, and striving to become a model Fire Department for other cities in an efficient and cost- effective manner. Code Enforcement: Maintaining and improving the physical quality of life in our neighborhoods. Parks and Recreation: Offering all residents and guests of South Bend the highest quality of recreational and leisure activities, while providing well-managed parks and recreational facilities with updated programming and friendly productive service. Community and Economic Development: Creating and expanding opportunities through partnerships in neighborhood revitalization, commercial and industrial development and community enhancement. Public Works: Providing leadership in the development and delivery of engineering, fleet, transportation, sanitation, wastewater, water and other services as called upon by our customers. Building Department: Serving our customers by inspecting, informing and ensuring a safe place to work, play and live. Century Center: Providing astate-of-the-art facility with excellent services to customers while generating maximum economic benefit to our community. Building South Bend in 2006 and beyond Mayor Stephen Luecke's theme for the past several years has been "We're Building South Bend." That theme has had a major influence on the development of the 2007 budget. There were five areas of concentration that became or remained budget priorities for 2007. • We're Building Neighborhoods -Mayor Luecke and the City's elected officials continued their strong commitment to neighborhoods. The City will invest $4.7 million to fund or leverage state and federal funding for housing assistance, development and home ownership programs, neighborhood public works and parks, neighborhood development for social services and organizations, and public safety initiatives. Committing these resources will help us maintain, improve and support strong neighborhood development. • We're Building a Safe City -Public safety is the foundation of all the City's efforts to build South Bend. Through the targeted and creative use of available resources, the City is working to provide quality police, fire and ambulance services for the community. The crime 13 rate has increased in several significant categories over past year. South Bend has 2.4 police officers and 2.3 firefighters per thousand population. These ratios are among the highest in the state and well above the national average. We believe that these extra officers are important for officer safety and community safety. The City's Fire Departments is rated one of the best in the State. We have recently refurbished three main fire trucks to like-new status. The Mayor's top initiatives will focus on regional policing, providing in-car cameras for all patrol cars and placing more emphasis on training and recruitment for the Police and Fire Departments. • We're Building an Attractive City - We are working to enhance the natural and man-made beauty of our city through effective City programs. For the sixth year in a row we were named a Tree City USA. The Building Block Grant Program helps residents spruce up their neighborhoods, and aggressive Code Enforcement will continue to address deteriorated and nuisance properties. The Commercial Corridors Improvement Fund provides much needed funding to address a variety of needs along five of the City's major corridors. The City is funding major programs for curb & sidewalks, neighborhood centers, weed & seed program, and transforming a former dump into a model outdoor environmental lab. • We're Building Opportunity - A key issue for any city is education and opportunity for young people. The City is committed to keeping schools open in our neighborhoods and to maximizing their use by the community. We are building partnerships that will create new strategies for enhancing our formal education system. Working together with families, student groups, school officials, neighborhoods, the faith community and civic organizations, we can support our local schools and improve the level of individual student performance. • We're Building a Strong Economy -Local government plays a key role in economic development. By providing adequate infrastructure and offering targeted assistance, the City can stimulate private investment, creating business opportunities and jobs. The City's policies encourage new start-up businesses, strengthen existing business, attract new jobs, increase assessed value and emphasize direct investment in hard-to-develop areas. Efforts have been and will continue to focus on implementing the comprehensive plans for downtown and the East Bank. The City's administration will vigorously pursue the revitalization of older industrial sites, as well as the expansion of the Blackthorn area. Proprietary Operations. The City's proprietary operations comprise several separate and distinct activities accounted for in both Enterprise and Internal Service funds. The Enterprise Fund operations include the following: the City's downtown parking garages, water utility services, wastewater utility services, solid waste services, the Century Center, the consolidated St. Joseph County/South Bend Building Department and, Blackthorn Golf Course. The Internal Service Fund operations include the City's self-funded liability insurance program, the City's self-funded employee benefits program, and Central Services (a department that accounts for the expenses related to fuel, vehicle repairs and various other services and supplies provided to City departments on acost-reimbursement basis). Fiduciary Funds. The City's fiduciary duties are accounted for in both Trust and Agency Funds. 14 The primary trust funds are the Police and Fire Pension Funds (explained below). The Agency Fund is for payroll and related employee deductions. Pension Trust Fund .Operations. Most City employees are covered by the Public Employees Retirement Fund and the 1977 Police Officers' and Firefighters' Pension Fund, both administered by the State of Indiana. However, certain police officers and firefighters hired before May 1, 1977, who did not opt into the 1977 fund, continue to be members of the 1925 Police Pension Fund and the 1937 Firefighters' Pension Fund. These two funds are administered by the City. This group of police officers and firefighters will continue to decline in the future both as a total number and as a percentage of total payroll of both the police and fire departments and of the City as a whole. The 1925 and 1937 Plans are funded through a combination of property taxes levied by the City and distributions from the State Pension Relief Fund. As a result of the requirements of the state statute that created these funds, the City is legally prevented from funding them in any other way than a "pay-as-you-go" basis. The City has received an actuarial survey on these funds to provide the proper disclosures required by generally accepted accounting principles. This information is included in the financial section of this report. Cash Management. In accordance with state statute, cash temporarily idle during the year is invested in demand deposits, certificates of deposit, obligations of the U.S. Treasury and repurchase agreements that are fully collateralized by U.S. Government or U.S. Government Agency obligations. In addition to the insurance available to all depositors through the Federal govemment, all deposits of the City are covered by the Public Deposits Insurance Fund maintained by the State Board for Depositories. That fund, established in 1937, covers both principal and interest of all deposits and investments made by an Indiana governmental unit with approved public depositories in accordance with the Public Deposits and Investments Law. Risk Management. The City has established two self-insurance funds: the Self-Funded Employee Benefits Fund and the Liability Insurance Premium Reserve Fund. As previously mentioned, these self-insurance funds are accounted for as Internal Service Funds. The purpose of the Self-Funded Employee Benefits Fund is to pay medical claims of City employees and their covered dependents and minimize the total cost of annual medical insurance to the City. Medical claims exceeding $125,000 per insured on an annual basis are covered through a private carrier. In addition to medical claims, the fund pays premiums for life insurance and long term disability benefits for employees. The Liability Insurance Premium Reserve Fund covers automobile and comprehensive liability as well as workers' compensation costs. The City's liability for self- insurance is limited to $300,000 per person and $5,000,000 in the aggregate per occurrence in accordance with Indiana Tort Law. The accrued liability for estimated insurance claims represents an estimate of the probable loss on unpaid claims arising prior to year end. Other Information Independent Audit. In accordance with the state statute, the City is required to be audited 15 annually by the Indiana State Board of Accounts, an agency of the State of Indiana. In addition to meeting the requirements set forth in state statutes, the audit also was designed to meet the requirements of the federal Single Audit Act of 1984 and related OMB Circular A-133 as mentioned earlier. The auditors' report on the general purpose financial statements and combining and individual fund statements and schedules is included in the financial section of this report. For the past sixteen years (years ended December 31, 1990 through 2005) the City has received an unqualified audit opinion. The auditors' reports related specifically to the single audit are included in a separately filed report. Awards. 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 South Bend for its comprehensive annual financial report for the fiscal year ended December 31, 2005. This was the sixteenth consecutive year that the City has achieved this prestigious award. In order to be awarded a Certificate of Achievement for Excellence in Financial Reporting, a government unit 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. The preparation of the comprehensive annual financial report was made possible by the dedicated service of the City's fiscal officers and the entire staff of the Department of Administration and Finance. Each member of the Department has our sincere appreciation for the contributions made in the preparation of this report. In addition, we would like to thank the Field Examiners of the State Board of Accounts (led by Doug Wiese and Bruce Snyder) for their hard work and dedication in this effort. In closing, without the leadership and support of Mayor Stephen J. Luecke, the City's Department Heads, and the members of the City Council, preparation of this report would not have been possible. Sincerely, ~ ~c~. YYl'~, M. Catherine Fanello, CPA Jo H. Murphy City Controller Assistant City Controller 16 Certificate of Achievement for Excellence in Financial Reporting Presented to City of South Bend Indiana For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 31, 2005 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. @rN orTMf f~~F9'~ /UIIII[D STA7E5 ~ A40 rn ~~ """°A ~ President CDRPD!W110N ° dILAG~ ]!f Executive Director 17 CITY OF SOUTH BEND ORGANIZATIONAL CHART of South City Council ~ ~ Mayor Board of Board of Parks Board of Public Public Safety 3 Pecreation :Norks Police Fire Parks & Public Department Department Recreation Works (Police Chie (Fire Chief) Su erintendent (Director -Technical Services -Fire Prevention -Park Administration -Engineering Division • Administrative Division Division -Investigative Services Division -Park Maintenance -Streets Division -Firefighting Division Division -Uniform Patrol Operations Division -Recreation - Water Works Division -EMS Division Division Division -Community Relations • Potawalomi Zoo -Sewage Works Division Division Division -Golf Division -Central Services Division -Solid Waste Division Legal Code Department Enforcement Hearing Officer Neighborhood Code Enforcement Abandoned Vehicles Unsafe Building Animal Control Bureau of Weights and Measures City Clerk Board of ~ ~ Entertainment Century Center Performing Arts Center Building Department Authorilyl Commission Economic Development (Director) _ • Economic _ Development -Community Development -General Administration Administration & Finance -City Finance 8 Budgeting -Human Resources -Benefits Management - Information Technology • Safety 8 Risk Management -Human Rights -Purchasing 18 STATE OF INDIANA AN EQUAL OPPORTUNITY EMPLOYER STATE BOARD OF ACCOUNTS 302 WEST WASHINGTON STREET ROOM E418 INDIANAPOLIS, INDIANA 46204-2769 Telephone: (317) 232-2513 Fax: (317) 232-4711 Web Site: www.in.gov/sboa INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS TO: THE OFFICIALS OF THE CITY OF SOUTH BEND, ST. JOSEPH COUNTY, INDIANA We have audited the accompanying financial statements of the governmental activities, the business- typeactivities, each major fund and the aggregate remaining fund information of the City of South Bend (City), as of and for the year ended December 31, 2006, which collectively comprise the City's primary government basic financial statements. These financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States 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 pertorm the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities, the business-type activities, each major fund and the aggre- gate remaining fund information of the City as of December 31, 2006, and the respective changes in financial position and cash flows, where applicable, thereof and for the year then ended, inconformity with accounting principles generally accepted in the United States. The Management's Discussion and Analysis, Schedules of Funding Progress, Schedules of Contribu- tions From the Employer and Other Contributing Entities and Budgetary Comparison Schedules, as listed in the Table of Contents, are not required parts of the basic financial statements but are supplementary informa- tion required by the Govemmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presenta- tion of the required supplementary information. However, we did not audit the information and express no opinion on it. In accordance with Government Auditing Standards, we have also issued our report dated May 25, 2007, on our consideration of the City's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. Our report on compliance and on internal control over financial reporting should be read along with this report. Our audit was performed for the purpose of forming an opinion on the basic financial statements of the City taken as a whole. The accompanying Schedule of Expenditures of Federal Awards is presented for pur- poses ofadditional analysis as required by the U.S. Office of Management and Budget CircularA-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the basic financial statements. 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. 19 INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued) Our audit was conducted for the purpose of forming opinions on the financial statements that collec- tivelycomprise the City's basic financial statements. The introductory section, combining fund financial state- ments, other budgetary comparison schedules, and statistical tables are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining fund financial state- mentsand other budgetary comparison schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in rela- tion to the basic financial statements taken as a whole. The introductory section and statistical tables have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accord- ingly, we express no opinion on them. STATE BOARD OF ACCOUNTS May 25, 2007 20 Management's Discussion and Analysis As management of the City of South Bend, we offer readers of the City of South Bend's financial statements this narrative overview and analysis of the financial activities of the City of South Bend for the fiscal year ended December 31, 2006. We encourage readers to consider the information presented here in conjunction with additional. information that we have furnished in our letter of transmittal. As with other sections of this financial report, the information contained within this Management's Discussion and Analysis (MD&A) should be considered only a part of a greater whole. The readers of this statement should take the time to read and evaluate all sections of this report, including the notes to the financial statements and the other Required Supplemental Information. Financial HiEhli~hts The assets of the City of South Bend exceeded its liabilities at December 31, 2006 by $366,010,498. The ma ority of these net assets ($306,180,110) are invested in capital assets and are, therefore, not availab~e for current spending. Of the remaining net assets, $32,068,888 is in unrestricted net assets and maybe used to meet the City's ongoing obligations to citizens and creditors. Total net assets increased by $7,691,643. Of this amount, net assets of governmental activities increased by $1,844,644 and net assets of business-type activities increased by $5,846,999. The total cost of all City programs was $176 million dollars. This is a decrease of $1 million dollars from 2005. At the end 2006 the unreserved fund balance in the General Fund was $21.7 million dollars, which is 31 % of total General Fund expenditures. This is a healthy General Fund balance. The unreserved fund balance for all governmental funds was $101.5 million dollars at December 31 2006. The majority of this unreserved fund balance was accounted for in Capital Projects funds ($0,447,079): Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the City of South Bend's basic financial statements. The City of South Bend's basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. The report also includes other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the City of South Bend's finances using "accrual accounting", which is a method of accounting used by many private-sector businesses. Statement of net assets. This statement reports all assets and liabilities of the City as of December 31, 2006. The difference between total assets and total liabilities is reported as "net assets," and can generally be thought of as the net worth of the City. Increases in net assets generally indicate an improvement in financial position while decreases may indicate a deterioration of financial position. Statement of activities. This statement serves the purpose of the traditional income statement. It pprovides consolidated reporting of the results of all activities of the City for the year ended December 31, 2006. Changes in net assets are recorded in the period in which the underlying event takes place, which may differ from the period in which cash is received or disbursed. The Statement of Activities displays the expense of the City's various programs net of the related revenues, as well as a separate presentation o prevenues available for general purposes such as property and county option income taxes. Both of the government-wide financial statements distinguish between functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) and other functions that are intended to recover all or a significant portion of their costs through user fees and 21 charges (business-type activities). The major governmental activities of the City of South Bend include police and fire, highways and streets, community and economic development and general government. The major business-type activities of the City include the wastewater utility, water utility and solid waste. Fund financial statements. A fund is a group of related accounts that is used to maintain control over resources that have been segregated for specific activities or ob'ectives. The City,. like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City of South Bend can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. 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 government-wide financial statements, governmental fund financial statements focus on short-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 may be useful in evaluating a government's short-term financing requirements. Governmental funds use the modified accrual accounting,, an accounting method that is different from many private-sector coinpanies. The City maintains four major ggovernmental funds (General Parks and Recreation, TIF Airport, County Option Income Tax) and 66 non-major governmental funds. General Governmental Revenue -The followingg schedule presents a summary of general governmental revenue for the year ended December 31, 2006: Revenue 2006 Amount % of Total Taxes: General Property $ 72,289,253 51.2% County Option Income 6,410,405 4.5% County Economic Development 4,013,475 2.8% Professional Sports Development 336,281 0.2% Community Revitalization District 1,000,000 0.7% Licenses and Permits 186,470 0.1% Intergovernmental 31,275,541 22.2% Charges for Services 16,931,744 12.0% Fines and Forfeits 444,861 0.3% Interest 4,762,484 3.4% Donations 137,535 0.1 Other 3,277,196 2.5% Total Revenue $ 141,065,245 100.0% As shown above, taxes continue to represent a significant source of revenue needed to support the services provided by the City. The City s single largest source of revenue is generated by property taxation. This revenue calculation is based on a relationship between two variables. The first variable is the assessed property valuation of industrial, commercial and residential parcels for both real and personal property. ,The second variable is the application of a tax rate to arrive at the total tax levy. Taxable property is assessed at 100% of the true tax value. The above general property tax revenue includes taxes collected on behalf of the following funds: General Fund, Park and Recreation Fund, Cumulative Capital Development Fund, various capital funds for the City's Redevelopment Tax Incremental Financing (TIF) Funds and a special levy to cover debt service on general obligation bonds. One of the maj or focuses for the City continues to be the need to diversify its revenue stream. This is necessary to reduce the dependency on general roperty taxes and to ensure that a broad base of users, including nonresidents who work m the ~ity, share m the funding of basic City services. 22 Currently the City's property taxpayers carry a disproportionate share of the cost of public safety (police and fire services) and eneral government functions (elected officials, legal, code enforcement and administration/fmance). Approximately 73% of the General Fund's 2006 total revenue was derived from property taxes. Public safety accounts for approximately 72% of total 2006 General Fund expenditures. Clearly, the Mayor and Conunon Council of South Bend have public safety at the top of their priority lists. In order to shift part of the financial burden for these services away from the City's homeowners, new sources of revenue need to be identified. In an attempt to accomplish this, two types of income taxes have been enacted to shift this financial tax burden. • Economic Development Income Tax (EDIT) -This tax was first enacted as of July 1=1995 at the rate of one tenth of one percent (0.1 %l on the adjusted gross income of City residents (and some nonresident). EDIT generated $f,382,670 and $1,466 029 for the City of South Bend in 1996 and 1997, respecrively. The Common Council and fit. Joseph County Council passed respective ordinances that increased the rate to two tenths of one percent (0.2%) which effectively doubled the City's distribution beginning in 1998. The City received $5,462,867, $3,689,202, $3,448 6 8 and $3,464,152 of EDIT distributions in 2002, 2003, 2004 and 2005, respectively, anc~received $4,013,475 from this tax in 2006. EDIT taxes are collected and administered by the Indiana Department of Revenue. The EDIT distribution is then remitted to St. Joseph County, which allocates these tax receipts between the county and the cities and towns in the co~ntybased on the proportionate amounts of pro~erty tax levy for each unit. The City's portion of the total county's EDIT ranged from 35.6 /o to 39.3% over the past 10 years as the proportionate property tax levies have changed. The EDIT rate will remain at the current level (0.2%) unless further action is taken by the respective councils. The EDIT rate can legally be raised to four tenths of one percent (0.4%). • County Option Income Tax (COIT) -The Common Council and St. Joseph County Council enacted this tax effective July 1, 1997 at a rate of two tenths of one percent (0.2%), with an increase of one tenth of one percent (0.1 %) per year duringg~the next four yeazs. n 2002 the rate was set at its legal limit of six tenths of one percent (0.6%). The City would not have supported the riew County Option Income Tax if it had not bbeen accompamed by an accompanying ordinance which established an additional 6% homestead credit for prope~ taxpayers. This additional homestead credit increased to 7% in 1999 and to 8% in 200 (where it will remain at this level). Thus, as a result of the passage of this new tax, City property taxpayers, were provided relief through a reduction in their property tax bills while the City was provided with an additional source of revenue that will eventually slow the rowth of future property tax rate increases. The City received $9,458,584 (2002), 8,015,301 (2003), $7,001,199 (2004), $5,490,218 (2005) and $6,410,405 (2006) from the County Option Income Tax. The City is anticipating the receipt of $5.7 million from this tax in 2007. In 2002 a one-time adjustment of $2,318,375 for conservative distribution estimates in the eaz~y years of the tax was transferred. These countywide taxes are allocated (net of homestead credits) between all taxing units within the county based on the proportionate amounts of property tax levy for each taxing unit. COIT taxes aze collected and administered by the Indiana Department of Revenue. As mentioned earlier, the City is looking for other sources of revenue that will reduce its reliance on pproperty taxes. A viable source of revenue is from user fees and/or charges for services currently bein performed. It is the City's desire to establish all user chazges and fees at a level closely related to the full cost of providing the services while taking into consideration similar charges/fees being levied by.other public and private providers. The City recalculates, on an annual basis, the full costs of activities supported by user fees (including Pazks and Recreation Department programs and EMS ambulance services) to identify the impact of inflation and other cost increases. It then revises user fees accordingly. ,As a result, overall charges for services and user fee revenues are anticipated to increase in line with annual operating and capital costs. General Government Expenditures -The City breaks.its general government expenditures into eight categories: general government, public safety, highways and streets, health and welfare, economic development, culture and recreation, debt service and capital outlay. 23 The following schedule presents a summary of general governmental expenditures for the year ended December 31, 2006: Expenditures General Government Public Safety Highways and Streets Economic Development Health and Welfare Culture and Recreation Debt Service Capital Outlay Total Expenditures 2006 Amount % of Total $ 11,244,734 8.7% 51,050,640 39.4% 13,583,761 10.5% 9,752,254 7.5% 75,000 0.1 13,849,622 10.7% 13,580,333 10.5% 16,391,192 12.6% $ , , 100.0% As one can see, the City spends more on public safety than any other activity, with 39.4% of all general governmental ex enditures spent for this purpose. This is followed by spending on culture and recreation (i.e. parks at 10.7% and highways and streets (10.5%). Proprietary funds. The City of South Bend maintains two different types of proprietary funds- enterprise and internal service funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City maintains seven enterprise funds. Information is presented separately in the proprietary statement of net assets and the proprietary statement of revenues, expense and changes in fund net assets for the Water Utility, Wastewater Utility and Century Center, which aze considered major enterprise funds. Data from the other four non-ma or enterprise funds are combined into a single, aggregated presentation. Individual fund data ~or each of these non-major proprietary funds is provided in the. form of combining statements elsewhere in this report. Internal service funds are used to accumulate and allocate costs internally among the City's various functions and funds. The City maintains three internal service funds. The City of South Bend uses internal service funds to account for its self-funded liability insurance program, employee health benefits program and central services (a department that accounts for the expenses related to fuel, vehicle repairs, printing and other services provided to City departments on acost-reimbursement basis). Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements but are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in the report. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the City government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the City s own~rograms. . The City maintains four fiduci fiznds. The City has two pension trust funds (1925 Police Pension and 1937 Firefighter's Pension, one agency fund (Payroll) and one .private-purpose trust fund (Cemetery). Pension Trust Fund Operations - Most City employees are covered by the Public Employees Retirement Fund (PE1ZF) and the 1977 Police Officers' and Firefigtiters' Pension Fund, both of which are administered by the State of Indiana. However, certain police officers and firefighters hired before May 1,1977, (who did not opt into the 1977 fund) continue to be members of the 1925 Police Officer's Pension Fund or the 1937 Firefighters' Pension Fund. These two funds are administered by the City. The number ofpolice officers and firefighters in the City-managed pension trust funds will continue to decline in the future as current participants retire. 24 The 1925 and 193 7 Pension plans are funded through a combination of property taxes levied by the City and distributions from the State of Indiana Pension Relief Fund. As a result of State statutes that created these funds, the City is legally prevented from funding them in any other way than a "pay, as-you-go" basis. As of January of 2005, the City received an actuarial survey on these funds to pprovide the proper disclosures required by generally accepted accounting principles. At December 31, 2006, the net assets in the 1925 Police Officer's Pension and 1937 Firefighter's Pension funds were $1,188,997 and $1,624,421, respectively. Notes to the financial statements. The notes to the financial statements provide additional information that is essential to have a full understanding of the data provided in the government-wide and fund financial statements. Other information. In addition to the basic financial statements and accompanying notes, this report presents certain supplementary information. The combining statements referred to earlier in connection with non-ma or governmental, enterprise, internal service and fiduciary funds are presented immediately a~er the basic financial statements. Government-wide Financial Analvsis The financial analysis will focus on the net assets (Table 1) and changes in net assets (Table 2) of the City's governmental and business-type activities. As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. At December 31, 2006, the City's assets exceeded liabilities by $366,010,498, an increase of $7,691,643 from 2005. The maj ority of this increase can be attributed to an increase in Water and Sewer rates during 2006 which helped increase the net assets from business-type activities. by $5,846,999. The largest portion of the City's net assets, $306,180,110 or 84%, reflect its investment in capital assets (e.g. land, roads, storm sewers, water and sewer systems, buildings and equipment), less any related debt used to acquire those assets that is still outstanding. Capital assets are used to provide services to citizens, and they are not available for future spending. Although 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. City of South Bend Net Assets Table 1 Governmental Business-Type Activities Activities Total 2005 2006 2005 2006 2005 2006 Current and other assets $146,134,848 $163,711,075 $31,884,533 $38,455,791 $178,019,381 $202,166,866 Capital assets (net) 292,361,379 281,074,888 152,993,751 160,195,768 445,355,130 441,270,656 Total assets .438,496,227 444,785,963 184,878,284 198,651,559 623,374,511 643,437,522 Long-term liabilities outstanding 180,566,351 181,691,782 55,792,377 62,446,829 236,358,728 244,138,611 Other liabilities 21,139,265 24,458,926 7,557,663 8,829,487 28,696,928 33,288,413 Total liabilities 201,705,616 206,150,708 63,350,040 71,276,316 265,055,656 277,427,024 25 City of South Bend Net Assets Table 1 (Continued) Governmental Business-Type Activities Activities Total 2005 2006 2005 2006 2005 2006 Net assets: Invested in capital assets, net of related debt 203,694,695 208,509,577 94,833,960 97,670,533 298,528,655 306,180,110 Restricted 6,138,257 5,225,642 17,942,700 22,535,858 24,080,957 27,761,500 Unrestricted 26,957,659 24,900,036 8,751,584 7,168,852 35,709,243 32,068,888 Total net assets $236,790,611 $238,635,255 $121,528,244 $127,375,243 $358,318,855 $366,010,498 At the end of the current fiscal year the City 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. The net assets for government activities increased by $1,844,644 from $236,790,611 in 2005 to $238,635,255 in 2006. This increase is due, m part, to revenue exceeding expenses for the TIF Airport pro ram during 2006. The net assets for the business-type net assets activities increased by 5,846,999 from $121,528,244 in 2005 to $127,375,_243 in 2006. This increase is due to an increase in water and sewer rates during 2006. City of South Bend Change in Net Assets Table 2 Governmental Business-type Activities Activities Total 2005 2006 2005 2006 2005 2006 Revenue: Program Revenue: Charges for services $6,823,577 $17,563,075 $35,764,874 $44,179,287 $42,588,451 $61,742,362 Operating grants and Contributions 12,916,362 12,452,463 1,282,780 0 14,199,142 12,452,463 Capital grants and Contributions 9,447,723 13,793,363. 1,479,581 1,413,861 10,927,304 15,207,224 General Revenue: Property taxes 72,743,697 68,256,602 0 0 72,743,697 68,256,602 26 Other taxes 10,510,375 11,760,161 0 0 10,510,375 11,760,161 Grants and contributions not 0 0 restricted to specific programs 5,160,298 5,063,541 5,160,298 5,063,541 Investment Earnings 3,543,469 4,762,484 745,966 906,056 4,289,435 5,668,540 Other Revenue 10,790.170 3.520.138 1.990.515 0 12.780.685 3 52• 0.138 Total Revenue 131,935,671 137,171,827 41,263,716 46,499,204 173,199,387 183,671,031 Exaenses• General government 15,033,018 17,194,920 0 0 15,033,018 17,194,920 Public safety 72,450,941 56,600,175 0 0 72,450,941 56,600,175 Highways and streets 9,010,971 21,813,189 0 0 9,010,971 21,813,189 Health and welfare 75,352 114,131 0 0 75,352 114,131 Culture and recreation 8,840,970 14,994,300 0 0 8,840,970 14,994,300 Economic Development 22,436,802 18,813,636 0 0 22,436,802 18,813,636 Interest on long-term debt 5,943,021 5,841,032 0 0 5,943,021 5,841,032 Water 0 0 12,447,141 11,916,504 12,447,141 21,916,504 Wastewater 0 0 18,452,785 16,972,401 18,452,785 16,972,401 Civic center 0 0 3,478,359 3,355,531 3,478,3S9 3,355,531 Building department 0 0 1,047,007 1,102,164. 1,047,007 1,102,164 Parking 0 0 1,165,502 1,261,942 1,165,502 1,261,942 Solid waste 0 0 4,920,464 4,187,706 4,920,464 4,187,706 Golf course 0 0 1.736.939 1,811,757 1 73. 6.939 1.811.757 Total expenses 133,791,075 135,371,383 43,248,197 40,608,005 177,039,272 175,979,388 Changes in net assets before Transfers (1,855,404) 1,800,444 (1,984,481) 5,891,199 (3,839,885) 7,691,643 Transfers 33,589 44,200 (33,589) (44,200) 0 0 Change in net assets (1,821,815) 1,844,644 (2,018,070) 5,846,999 (3,839,885) 7,691,643 Beginning net assets (restated) 238,612.426 236.790.611 123.546.314 121.528.244 362,158.740 358.318.855 Ending net assets $236,790,611 $238,635,255 $121,528,244 $127,375,243 $358,318,855 $366,010,498 Governmental Activities Governmental activities net assets increased by $1.84 million dollars during 2006. Total revenue increased by $5.2 million dollars, an increase of 4.0%. Expenses Increased by $1.58 million dollars, an increase of only 1.2%., The majoritX of the revenue increase Is due higher charges for services and reclassifications of certain other revenue line items to the charges for services category. The increases in expenses are due primarily to higher health insurance costs which are charged to each activlty using an Internal Servlce-Fund. 27 Business-true Activities Business-type activities had an increase in net assets of $5.8 million dollars during 2006. The majority of the increase is due to higher charges for services in the Wastewater and the Water Works departments through hi er utility charges to customers. This increased revenue will finance along-term capital development plan at the Wastewater and Water Works utilities. Total expenses at the Wastewater and Water Works utilities were lower during 2006 than in 2005. Financial Analysis of the gGove~r~nments' Funds ~ ~ fan d vi~~e~~nto 1~~ ~ateg~nela g~ le~ngien~ufun~f s,np op oe}taryundsn~anc~~fiduc ~ary Tund~ete Governmental funds. The purpose of the City's governmental funds is to provide information on short-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. At the end of 2006, the City's governmental funds reported a combined ending fund balance of $139,890,912. Of this amount, $101;476,539, or 72.5%, was in unreserved fund balance, which is available for spending.at the City s discretion. The majority of this unreserved fund balance is for major capital pro ects that have been designated by the Common Council. The remainder of the fund balance (~$38,414,373).is reserved and is not available for new spending because it has already been dedicated for various commitments. The General Fund is the City's chief operating fund. At the end of 2006, the total General Fund balance was $25,851,295, a decrease ofg$2,892,899, or 10.1%, from 2005. This use of General Fund balance was planned for in the 2006 budget. The unreserved fund balance of the General Fund was $21,688 442 at December 31, 2006. Unreserved General Fund balance is approximately 31% of total General Fund expenditures at December 31, 2006. The Parks and Recreation Fund had an increase in fund balance of $493,495 during 2006. The reason for this increase is that revenue (~nmarily due to roperty taxes and user charges) . . exceeded expenditures during the year. ~'I'he ending fundpbalance in the Parks and Recreation Fund was $2,136,982 at December 31, 2006.Of this amount,. $2,075,034 is unreserved fund balance. The TIF Airport and County Option Income Tax (COIT)) funds are used to account for major capital construction protects. The fund balance in the T'IF Airport Fund increased by $5,843,279 during 2006, while the fund balance in the COIT fund decreased by $573,737 durin 2006. At December 31, 2006, the fund balances in the TIF Airport and COIT funds were 24,185,065 and $8,625,221, respectively. These fund balances represent resources that City has to meet some of its future capital construction needs. Individual fund data for each of the non-ma or governmental funds is provided in the form of the combining statements in the Supplemental ~nfonnation portion. Proprietary funds. Enterprise funds are used to report the same functions presented as business- type activities in the government-wide financial statements. Internal service funds are used to account for services provided to other City departments and funds on acost-reimbursement basis. The City maintains seven enterprise funds and three internal service funds. The basic proprietary fund financial statements can be found later in this report. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. The City has four fiduciary funds. The basic fiduciary funds financial statements can be found later in this report. 28 General Fund Bud~?etarv Hiehli~hts The City adopts an annual appropriated budget for its General Fund. The City prepares its budggets using the cash basis of accounting. For 2006, the original expenditure budget was,$71,549,331. Duringg the year, budget adjustments of $6,566,641 were made, resulting in an ending General Fund expenditure.budget of $78,115,972. 'The General Fund budget is reviewed on a monthly basis by staff and adjustments are approved as needed by the Common Council. Throughout the yeaz, actual expenditures are monitored and projected and the budget is amended to prevent any budget overruns. The City tries to work within its original budget by increasing categories that will exceed the budget while decreasin other categories that aze under budget. Actual General Fund expenditures on a cash basis were 75,165,815 during 2006, which was $2,950,157 (3.8%) under the amended budget. General Fund revenue was originally budgeted at $65,550,889 for 2006. During the year, the revenue budget projection was reduced to $65,485,484. Actual General Fund revenues were $67,381,869 for 2006 and exceeded the amended revenue budget by $1,896,385, or 2.9%. The ma or reason for the higher revenue was that interest earnings were budgeted conservatively at $30,000 for 2006 while actual interest earnings were $1,525,832. Tatung this difference into account, the revenue projections for the General Fund were very accurate, only $670,553 (1%) less than budgeted. All cities have limited resources and, thus, limited numbers of programs and services that can be provided.. The City of South Bend is proud to say that it has done well m terms of maintaining a solid, financtally sound organization by spending within its means. Canital Asset and Debt Administration Capital assets. The City's investment in capital assets for its governmental and business type acttvrttes was $441,270,656 (net accumulated depreciation) at December 31, 2006. This. investment in capital assets includes land, buildings, roads, improvements, service lines, automobiles and equipment, and street lights. A detailed explanation of these capital assets can be found in the Notes to the Basic Financial Statement. Major capital asset additions during the current fiscal year include the following: - Major road renovation at $1.63 million. - 37 new or replacement vehicles at a cost of $1.1 million. -Paving Program at $1.84 million - Riverside bikeway/walkway project - $510 thousand - Began construction of Fire Station No. 2 - $656 thousand expended in 2006. Total project cost - $2.6 million. - Raw sewage pump replacement and drive on scales - $183 thousand. City of South Bend's Capital Assets Capital assets not being depreciated: Land Construction in Progress Total capital assets not being depreciated Governmental Activities 2005 2006 $11,564,931 $11,539,931 6,214,193 1,584,399 17,779,124 13,124,330 Business-type Activities Total 2005 2006 2005 2006 $3,020,575 $3,020,575 $14,585,506 $14,560,506 3,938,589 12,366,687 10,152,782 13,951,086 6,959,164 15,387,262 24,738,288 28,511,592 29 Capital assets being depreciated: Building Improvements other than buildings Machinery & equipment Roads Totals Less accumulated depreciation for: Buildings Improvements other than buildings Machinery & equipment Roads Totals Total capital assets, being depreciated, net Total activity capital assets, net City of South Bend's Capital Assets (Continued) Governmental Business-type Activities Activities Total 2005 2006 2005 2006 2005 2006 102,625,262 102,679,770 92,513,376 92,509,056 195,138,638 195,188,826 8,713,737 9,450,060 37,623,047 38,555,497 360,945,625 366,085,762 509,907,671 516,771,089 22,006,922 23,268,734 4,489,950 18,890,331 190,339,299 235,726,502 88,019,697 91,700,161 96,733,434 101,150,221 43,446,609 44,026,474 81,069,656 82,581,971 0 0 360,945,625 366,085,762 223,979,682 228,235,691 733,887,353 745,006,780 30,768,132 32,983,954 52,775,054 56,252,688 4,852,946 19,158,662 20,749,345 23,648,612 25,602,291 21,283,375 28,018,301 29,693,886 46,908,632 50,977,261 199,415,476 0 0 190,339,299 199,415,476 248,820,531 77,945,095 83,427,185 313,671,597 332,247,716 274,181,169 267,950,558 146,034,587 144,808,506 420,215,756 412,759,064 $291,960,293 $281,074,888 $152,993,751 $160,195,768 $444,954,044 $441,270,656 Duringg 2006, the City Implemented GASB Statement No. 34 for retroactive reporting of infrastructure capitaI.assets. The above cost and accumulated depreciation for Roads in 2005 and 2006 have been adjusted accordingly. Debt Administration. At December 31, 2006, the City had a number of debt issues outstanding. The following is a summary of outstanding debt transactions during 2006: Beginning Ending Type Balance Additions Reductions Balance General Obligation $320,000 -0 $320,000 -0- Revenue Bonds 120,215,000 22,220,000 15,645,000 126,790,000 Mortgage Bonds 30,010,037 -0-- 1,700,598 28,309,439 Notes/Loans 30,291,729 3,262,691 2,537,435 31,016,985 Capital Leases 5,164,660 1,127,036 1,234,915 5,056,781 Total 186 $26,609.727 21,4 $191,173.205 During 2006, the City issued revenue bonds for improvements at the Wastewater Utility ($7,630,000) and Water Utility ($4,710,000). The new capital lease of $1,127,036 dunng,2006 was used for the purchase of police patrol and other vehicles. During 2006, the City also Issued Economic Development Income Tax refunding bonds for $7,440,000 at the Leighton Parking 30 Garage and $3,222,000 in Section 108 Housing and Urban Development notes for economic development projects. The General Obligation bond that was retired during 2006 was used for improvements in the Studebaker Corridor near downtown. The City's debt increased by a net of $5,2 million dollazs during 2006. Under the Indiana Constitution and State statute, the Cry's eneral obligation bonded debt issuances aze subject to a legal limitation based upon 2°l0 ot~total assessed value of real and personal property.. Since Indiana's assessment statutes call for an assessed valuation of one-third of cost less depreciation, its general obligation debt limitation is one of the most conservative in the United States. The City had no general obligation bonded debt outstanding at December 31, 2006. A detailed listing of this debt can be found in the Notes to the Basic Financial Statements. A calculation of the City's legal debt limitation can be found in the statistical section of this document. Economic Factors and Next Year's Budgets As noted eazlier, roperty taxes are the City's lazgest source of revenue. Under current legislation all Indpiana cities assessed values are based on market values. Under this method some properties are still being re-assessed to reflect the changes in values. This process as we as the overwhelming amount of appeals is still affecting the amount of property taxes,received by the City. Due to these current changes, the percentage increase the City is anticipating m 2007 will be less than in previous years. In addition, the State of Indiana General Assembly has enacted property tax legislation to limit property taxes paid to 2% of gross assessed value for residential properties and 3% of dross assessed value for business pproperties. The impact,of this legislation (known as circuit breaker" legislation) will be significant for the City of South Bend beginning in fiscal year 2010. The City enacted new water and sewer rates during 2006 These rates will continue to be revised to assure that the municipal water and sewer system has sufficient revenue to cover operating, capital and debt service funding requirements. Many major capital pro ects aze slated for construction in 2007, including southside retail development, water an~ sewer infrastructure upgrades and the continuation of maj or road enhancements. The City is also lookingg forward to the private development of the Hall of Fame Gameday Center, a 189-unit hotel/condominium/pazking garage project to be located in the heart of the City's downtown. In addition, the City is providing certain infrastructure support for the exciting Innovation Pazk a mixed-use residential and research development located neaz the campus of the University of Notre Dame. During 2006, the City received $12.8 million dollars from the State of Indiana for the City's shaze of the proceeds from the State's lease of the Indiana Toll Road to a private corporation. Although controversial, all municipalities in Indiana have benefited financially from this transaction. The City has deposited the proceeds into a sepazate capital project fund (Major Moves Cappital Pro ect) and has elected to use only the interest earned for current capital projects. During 206, the Major Moves fund earned $179,049 in interest. Requests for Information This financial report is designed to provide a general overview of the City of South Bend's finances for all those who are interested. Questions concerning any of the information provided in this report or a request for additional financial information should be addressed to: M. Catherine Fanello, City Controller City of South Bend Department of Administration abnd Finance 227 W. Jefferson Boulevard, l4` Floor South Bend, Indiana 46601 31 CITY OF SOUTH BEND STATEMENT OF NET ASSETS December 31, 2006 W IJ Assets Cash and cash equivalents Cash with fiscal agent Investments Receivables (net of allowances for uncoltectibles): Interest Taxes Accounts Intergovernmental Loans Internal balances Inventories Prepaid expense Deferred debits Restricted assets: Cash and cash equivalents Cash with fiscal agent Investments Interest receivable Taxes receivable Accounts receivable Intergovernmental receivable Property held for resale Capital assets: Land and construction in progress Other capital assets, net of depreciation Total assets Pdmary Government Governmental Business-Type Activi}ies Activities Total $ 105,658,207 $ 7,514,074 $ 113,172,281 398,036 - 398,036 12,387,500 - 12,367,500 396,037 - 396,037 6,294,087 - 8,294,087 2,985,814 2,443,884 5,429,898 1,476,966 - 1,478,968 9,526,473 - 8,526,473 2,638,570 (2,638,570) - 1,212,813 388,420 1,601,241 24,433 - 24,433 1,337,273 6,099,921 7,437,194 5,461,831 23,450,534 28,912,365 - 16,139 16,139 1,787,219 1,009,945 2,797,164 4,544 5,951 10,495 87,434 - 87,434 - 165,485 165,485 2,989 - 2,989 12,030,845 - 12,030,845 13,124,330 15,307,262 28,511,592 267,950,558 144.808,506 412,759,064 444,785,963 198,651,559 643.437,522 The notes to the financial statements are an integral part of this statement. Continued on next page CITY OF SOUTH BEND STATEMENT OF NET ASSETS December 31, 2006 (Continued) W W Liabilities Accounts payable Accrued payroll payable Unearned revenue Contracts payable Taxes payable Customer deposits Accrued interest payable Estimate of unfiled claims Other current payables Payable from restricted assets: Accounts payable Contrects payable Customer deposits Accrued interest payable Noncurcent liabilities: Due within one year: Mortgage bonds payable Compensated absences Revenue bonds payable Capital lease obligations Notes and loans payable Due in more than ane year: Mortgage bonds payable (net of discounts or premiums) Compensated absences Revenue bonds payable (net of discounts or premiums) Capital lease obligations Notes and loans payable Unamortized gain on salelleaseback Net pension obligation Total liabilities Primary Government Governmental Business-Type Activities Activities Total 4,382,902 817,768 5,194,670 1,031,759 206,121 1,237,880 1,200,000 221,875 1,421,875 2,887,509 - 2,867,509 12,351 47,628 59,978 1,081,705 151,543 1,233,248 837,184 6,473 843,657 649,147 - 649,147 8,437 - 8,437 - 412,797 412,797 - 1,400,731 1,400,731 - 1,353,918 1,353,918 1,353,375 205,470 1,558,845 1,379,285 45,510 1,424,795 3,412,851 538,080 3,950,931 3,875,000 1,680,000 5,555,000 845,153 446,073 1,291,226 1,502,268 1,301,500 2,803,766 26,405,098 914,883 27,319,981 1,322,325 - 1,322,325 77,611,927 42,471,066 120,082,993 2,688,034 1,077,521 3,765,555 10,256,284 17,956,933 28,213,217 - 26,426 26,426 63.408.114 - 63.408,114 206,150,708 71,276,316 277,427,024 Net Assets Invested in capital assets, net of related debt Restricted for: Debt service Capital outlay Unrestricted 206,509,577 97,670,533 306,180,110 5,225,642 6,177,849 11,403,491 - 16,358,009 16,358,009 24,900,036 7,168,852 32,068,888 Total net assets $ 236,635,255 $ 127,375,243 $ 366,010,498 The notes to the financial statements are an integrel part of this statement. CITY OF SOUTH BEND STATEMENT OF ACTMTIES For The Year Ended December 31, 2006 W Program Revenues Net (Expense) Revenue and Changes in Net Assets Operating Capital Primary Govemment Charges for Grants and Grants and Governmental Business-Type Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Primary government: - Governmental activities: Generalgovernment $ 17,194,920 $ 6,883,104 $ 147,864 $ 461,944 $ (9,702,006) $ - $ (9,702,008) Public safety 56,600,175 5,132,285 223,402 - (51,244,486) - (51,244,488) Highways and streets 21,813,189 44,250 7,104,545 12,976,476 (1,687,918) - (1,687,918) Economic development 18,813,636 562,807 4,315,608 - (73,935,221) - (13,935,221) HeaRhandwelfare 114,131 - - - (1 t4, 131) - (114,t31) Culture and recreation 14,994,300 4,940,629 661,044 354,943 (9,037,684) - (9,037,684) Interest on long-term debt 5,841,032 - - (5,841,032) (5,841 032) Total governmental activities 135,371,383 17,563,075 12,452,463 13,793,363 (91,562,462) (91,562,482) Business-type activities: Water 11,916,504 14,757,819 - 1,091,135 - 3,932,450 3,932,450 Wastewater 16,972,401 18,725,903 - - - 1,753,502 1,753,502 Civic Center 3,355,531 3,113,264 - 322,726 - 80,459 80,459 Building department 1,102,164 1,039,405 - - - (62,759) (62,759) Parking 1,261,942 799,350 - - - (462,592) (462,592) Solid waste 4,187,706 4,177,897 - - - (9,809) (9,809) Golf course 1,811,757 1,565,649 (246,108) (246,108) Total business-type activities 40,608,005 44,179,287 - 1,413,861 - 4,985,143 4,985,143 Total primary government $ 175,979,388 $ 61,742,362 $ 12,452,463 $ 15,207,224 (91,562,482) 4,985,143 (86,577,339) General revenues: Property taxes 68,256,602 - 68,256,602 County option income tax 6,410,405 - 6,410,405 Economic development income tax 4,013,475 - 4,013,475 Professional sports development tax 336,281 - 336,281 Community revitalization enhancement district tax 1,000,000 - 1,000,000 Grants and contributions not rsstdcted to specific programs 5,063,541 - 5,063,541 Unrestricted investment earnings 4,762,484 906,056 5,668,540 Other 3,520,136 - 3,520,136 Transfers 44,200 (44,200) Total general revenues and transfers 83,407,126 861,856 94,268,982 Change in net assets 1,844,644 5,846,999 7,691,643 Net assets -beginning 236,790,611 121,528,244 358,318,855 Net assets-ending $ 238,635,255 $ 127,375,243 $ 366,010,498 The notes to the financial statements are an integral part of this statement. CITY OF SOUTH BEND BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2006 W 1.T7 Other Park and Governmental Assets General Recreation TIF Airpod COIT Funds Totals Cash end cash equivalents $ 26,178,975 $ 2,345,079 $ 16,694,529 $ 7,535,967 $ 51,142,597 $ 106,097,147 Cash wdh fiscal agent 250,000 - - - 146,038 398,038 Irnestments - - - - 14,174,719 14,174,719 Receivables (net of allowances for uncollectibles): Interest 127,109 - - - 272,643 399,752 Taxes 4,750,367 614,500 206,106 - 610,526 6,361,521 Accounts 419,294 17,846 - - 647,384 1,284,524 Intergovernmental 430,011 27,641 - - 1,012,868 1,470,720 Loans - - - 266,667 9,259,606 9,526,473 InteAund receivable: Interfund loans 1,524,099 - 2,083,000 - 241,872 3,848,971 Interfund services provided and used 42,987 - - 61,680 7,221 112,088 Inventories - 61,948 - - - 61,948 Advances to other furWs 1.750,000 - - - 506,448 2,256,448 Property held for resale 240,432 3.294,367 1,081,247 7,414,799 12,030,845 Total assets $ 35,713,294 $ 3,267.214 $ 24,476,004 $ 6,945,761 $ 65,638,921 $ 158,043,194 Liabilities end Fund Balances Liabilities: Accounts payable $ 1,838,672 $ 152,040 $ 27,640 $ 73,475 $ 921,761 $ 3,011,596 Accrued payroll payable 801,366 105,922 - - 82,875 990,163 Conhacts payable 494,325 - 3,709 245,957 2,143,516 2,887,509 Intarfund payable: Interfund bans - - - - 249,700 249,700 Interfund services provided and used 350,447 28,467 1,872 1,108 143,885 525,779 Taxes payable 11,989 362 - - - 12,351 Customer deposits 858,521 - - - - 858,521 Deferred revenue 5,462,854 842,341 206,106 - 617,291 7,120,594 Pertonnance deposits payable 45,825 - 53,602 - 123,757 223,184 Other cumeM payablas - 1,100 - - 7,337 6,437 Advances from other funds - 2,256,446 2,256,448 Total liabilities 9,861,999 1,130,232 292.939 320,540 6,546,572 18,152,262 Fund balances: Reserved for. Encumbrances 2,172,421 - 193,868 3,006,241 3,088,010 8,460,540 Noncurrent bans receivable - - - 233,333 8,180,461 8,413,794 Irnantory - 61,948 - - - 61,948 Propary held for resale 240,432 - 3,294,367 1,081,247 7,414,799 12,030,845 Debt service - - - - 7,190,798 7,190,798 Advancesto other lands 1,750,000 - - - 506,448 2,256,448 Unreserved, reported in: General fund 21,686,442 - - - - 21,688,442 Special revenue funds - 2,075,034 - - 17,273,812 19,348,846 Debt service funds - - - - (7,828) (7,828) CepBalprojects funds 20,696,830 4,304,400 35,445,849 60.447,079 Total fund balances 25,851,295 2.136,982 24,185,065 8,625,221 79,092,349 139,890,912 Total liabilities end land balances $ 35,713,294 $ 3,267,214 $ 24,478,004 $ 8.945,761 $ 85,638,921 The notes to the fnancial statements are an integral part of this statement. Continued on next page CITY OF SOUTH BEND BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2006 (Continued) W Amounts reported Tor govammental activities in the statement of net assets ere d'RFerent because: Capital assets used in govammental activities are not financial resources and, therefore, are not reported in Me funds. Prepaid expenses ($8,166) and Deferted debRs ($1,337,273) are not available to pay for wrrent period expenditures and, therefore ere deferred in the funds. Intemel service funds are used by management to charge the vests of certain services to individual funds. The assets and liabilities of the intemal service funtls are included in govammental activties in the statement of net assets. Long-term liabil%iea, including bonds payable, ere not due and payable in the cement period and, therefore, era not reported in Ne funds: Deferted revenues Bonds payable Less: Deferred charge an refunding (to be amortized es interest expense) Lass: Issuance discount or (premium) (to be amortized as interest expense) Capital leases payable Notes payable Net pension obligation Short-term liabilities that are rmt recognized in govammental funds until due: Acwed interest payable Compensated absences payable Net assets of govammental activities Totals 279,615,833 1,345,441 5,929,644 6,628,594 (109,782,124) 730,306 (219,492) (3,533,187) (11,758,552) (63,408,N4) (2,190,559) (4,613,447) $ 238,635,255 Tire notes to the fnancial statements are an integral part of this statement. CITY OF SOUTH BEND STATEMENT OF REVENUES, EXPENDITURES AND OTHER CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For The Year Ended December 31, 2006 W Other Total Park end Governmental Govemmantal General Recreation TIF Airport COR Funds Funds Revenues: Taxes: Property $ 49,514,044 $ 8,363,955 $ 7,515,744 $ - $ 6,895,510 $ 72,289,253 County option income - - - 6,410,405 - 6,410,405 County economic development income - - - -. 4,013,475 4,013,475 Professional sports development tax - - - - 336,281 336,281 Community revitalization enhancement disUict - - - - 1,000,000 1,000,000 Licenses and permits 186,470 - - - - 186,470 Intergovernmental 5,183,049 601,078 - - 25,491,414 31,275,541 Charges for services 10,233,118 2,537,687 - - 4,160,939 16,931,744 Fines end fodeits 232,877 - - - 211,984 444,861 Interest ~ 1,543,778 - 606,063 226,073 2,386,570 4,762,484 Donations 4,273 - - - 133,262 137,535 Sale of property 19,025 - 214,758 - - 233,783 Other 494,367 111,315 614,725 1.823,008 3,043,413 Total revenues 67,411,001 11,614,035 8.336.565 7,251,203 46.452,441 141,065,245 ExpendiTurea: Current: General government 10,944,891 - - - 299,843 11,244,734 Public safety 50,314,860 - - - 735,780 51,050,640 Highways and streets 6,927,124 - - - 6,656,637 13,583,761 Economic development - - - - 9,752,254 9,752,254 Health and weHare 75,000 - - - - 75,000 Cutturo end recreation 1,523,093 10,844,744 - - 1,481,785 13,649,622 Debt service: Principal - 163,719 505,000 617,365 6,149,636 7,435,722 Interest and fiscal charges - 13,228 586,866 209,573 5,125,844 5,935,511 Debt issuance costs - - - - 209,100 209,100 Capital outlay: General government - - - 4,325,447 1,268,909 5,594.356 Public safety - - - - 1,562,936 1,562,936 Economic development - - 1,096,812 - 7,886,671 8,963,483 Culture and recreation 250,417 250,417 Total expenditures 69.784.968 11.021,691 2,186,678 5,152,385 41,379,814 129.527,536 Excess (deficiency) of revenues - over(urxfer)expenditures (2.373,967) 592,344 6,147,887 2,098,818 5,072.627 11,537,709 Other financing sources (uses): Transfers in 351,101 - 79,313 37,151 6,460,975 6,928,540 Transfers out (870,033] (96,849) (383,921) (2,709,706) (4,821,831) (8,884,340) Premium on debt issuance - - - - 46,521 46,521 Debt issuance - - - - 6,564,036 6,564,036 Issuance of refunding bonds - - - - 7,440,000 7,440,000 Payment to refunded bond escrow agent (8,371,711) (8,371,711) Total other financing sources and uses (518,932) (98,849) (304,608) (2,672.555) 9.317,990 5,723,046 Net change in fund balances (2,892,899) 493,495 5,643,279 (573,737) 14,390,617 17,260,755 Fund balanoss-beginning 28,744,194 1,643,487 18,341.786 9,198,9513 64.701,732 122,630,157 Fund balances -ending $ 25,851,295 $ 2.136,882 $ 24.185,065 $ 8,625,221 $ 79.092,349 $ 139,890,912 The notes to the fnencial statements are an Integral part of this statement. CITY OF SOUTH BEND RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For The Year Ended December 31.2006 W Amounts reported for govemmental activities in the statement of activities are different because: Net change in fund balances -total govemmental funds (Statement of Revenues, Expenditures and Other Changes in Fund Balances). $ 17,260,755 Govemmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period: Capital outlay 3,910,345 Depreciation expense {14,741,912) Gain on disposal of assets 105,407 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. (3,998,825) The issuance aflong-term debt (e.g., bonds, leases) provide current financial resources to govem- mentalfunds, while the repayment of the principal of long-term debt consumes the current financial resources Of govemmental funds. Neither transaction, however, has any effect on net assets. Also, govemmental funds report the effect of issuance costs, premiums, discounts and similar Items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. Lang-term debt Incurred during the current period: Bonds (9,880,000) Premium on bonds (46,521) Loans (3,222,000) Capital leases (902,036) Principal debt payments: Bonds 5,516,933 Loans 1,095,313 Capital leases 823,478 Payment to refunded bond escrow agent 8,371,771 Amortization expenses 75,627 Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Prepaid expense (21,641) Interest expense 227,952 Compensated absences (73,246) Change in net pension asset and net pension obligatbn (3,320,723) Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue (expense) of the internal service funds is reported with govemmental activties, 684,029 Change In net assets of governmental activities (statement of activities) $ 1,844,844 The notes to the financial statements are an integral part of this statement. CITY OF SOUTH BEND STATEMENT OF NET ASSETS PROPRIETARY FUNDS December 31, 2006 w Assets Current assets: Cash and cash equivalents Interest receivable Accounts receivable (net of allowance) Accounts receivable -other Interfund receivables: Interfund services provided and used Intergovernmental receivable Inventories Prepaid items Restricted assets: Cash, cash equivalents and investments: Repair fund Customer deposits Revenue bond covenant accounts Capital ou0ay accounts Capital outlay accounts -investments Cash with fiscal agent Accounts receivable Interest receivable Total current assets Noncurtent assets: Deferred charges: Unamortized debt issue costs Unamortized loss on saleAeaseback Total deferred charges Capital assets: Land and construction in progress Other capital assets (net of accumulated depreciation) Total cepdal assets Total noncurrent assets Total assets Governmental Business-Typ e Activities -Enterprise Funds Activities Other Water Wastewater Century Enterprise Internal Utility Utility Center Funds Tofal Service Funds $ 2,268,303 $ 4,428,154 $ 85,372 $ 732,245 $ 7,514,074 $ 5,022,891 - - - - - 829 754,375 1,131,840 36,130 346,863 2,269,206 1,001,290 19,161 27,893 123,299 4,323 174,676 - 77,205 142,572 - 350 220,127 349,226 - - - - 9,237 108,069 268,033 - 12,306 366,428 1,150,665 _ _ - 16,265 25,496 135,132 - - 180,628 - 1,304,879 - - - 1,304,879 - 1,654,237 3,441,355 - 1,291,411 6,387,003 - 4,470,729 10,632,723 265,592 28,980 15,596,024 - - - 1,009,945 - 1,009,945 - - 16,139 - - 16,139 - 66,103 99,362 - - 165,485 - 4,685 1,266 5,951 10,746,577 20,523,223 1,525,023 2,417,744 35,214,587 7,550,603 683,247 326,109 - 28,735 1,036,091 5,063,830 5,063,830 683,247 326,109 -5,090,565 6,099,921 1,063,821 12,040,018 702,934 1,580,489 15,387,262 - 55,669, 941 70,150, 915 13,135, 607 5,852,043 144,808,506 1.459,055 58.733 ,762 82,190, 933 13,838, 541 7,432,532 160,195,768 1,459,055 57,417 ,009 82,517, 042 13,838, 541 12,523,097 166,295,689 1,459,055 68,165 ,586 103,040 ,265 15,363 ,564 14,940,841 201,510,256 9,009,858 The notes to the financial statements are an integral part of this statement. Continued on ne# page CITY OF SOUTH BEND STATEMENT OF NET ASSETS PROPRIETARY FUNDS December 31, 2008 (Continued) O Liabilities Current liabilities: Accounts payable Interfund payables: Interfund loans Interfund services provided and used Accrued payroll payable Compensated absences Unearned revenue Taxes payable Accrued Interest payable Customer deposits Estimate of unfiled claims Current Iiabili0es payable from restricted assets: Accounts payable Interfund payables: Interfund services provided and used Contrects and retalnage payable Customer deposits Mortgage bonds payable Revenue bonds payable Capital leases payable Notes and loans payable Accrued Interest payable Total current liabilities Noncurrent liabilities: Mortgage bonds payable (net of unamortized discount) Revenue bonds payable (net of unamortized discounts, premium, and deferred amount on refunding) Capital leases payable Notes and loans payable Unamortized gain on sale/leaseback Total noncurrent liabilities Total liabilities Net Assets Invested in capital assets, net of related debt Restricted for debt service Restricted for capital outlay Unrestdcted Total net assets Governmental Business-Typ e Activities -Enterprise Funds Activities Other Water Wastewater Century Enterprise Internal Utility Utility Center Funds Total Service Funds 158,669 270,178 58,958 323,963 811,768 1,371,306 - - - 2,707,296 2,707,296 891,975 24,059 38,074 2,644 40,363 103,140 4,261 63,(159 76,846 24,077 41,339 206,121 41,596 193,359 221,691 8,956 114,074 538,080 121,729 - - 221,875 - 221,875 - 47,01t - 617 - 47,628 - - 6,473 - 6,473 - - - 151,543 - 151,543 - - - - - - 849,147 273,059 139,738 - - 412,797 - - 48,261 - - 48,261 41,585 1,343,148 18,000 - 1,400,731 1,353,918 - - - 1,353,918 _ 45,510 - - 45,510 - 1,215,000 - 465,000 1,680,000 - 86,120 - 359,953 446,073 - 1,230,000 71,500 - 1,301,500 - 131.558 - 73.912 205,470 2,155,519 4,844,122 562,643 4,125,900 11,688,184 3,080,014 914,883 - 20,582,828 2,006,310 914,883 - 18,726,509 - 3,161,629 42,471,066 - 207,070 - 870,451 1,077,521 - 15,579,488 371,125 - 17,958,933 - 26,426 26,426 22,589,238 35,427,960 371,125 4,056,506 62,446,829 24,744,757 40,272,082 933,768 8,184,406 74,135,013 3,080,014 38,089,659 42,899,550 13,385,916 3,285,408 97,670,533 1,459,055 1,654,237 3,309,797 - 1,213,815 6,177,849 - 4,429,144 10,832,723 1,067,162 28,980 16,358,009 - (752,2t1) 5,726,113 (33,282) 2.226,232 7.161) 852 4,470,589 $ 43,420,829 $ 62,768,183 $ 14,429,796 $ 8,756,435 $ 127,375,243 $ 5,929,644 The notes to the financial statements are an integrel part of this statement. CITY OF SOUTH BEND STATEMENT OF REVENUES, EXPENSES AND OTHER CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS For The Year Ended December 31, 2006 1--' Operating revenues: Metered revenue: Residential Commercial Industrial Fire protection reverwe Penalties Convention Teas Licenses and permits Parking fees Solid waste Tees Gog course fees Employeelemployercon1ributions Charges for sales and services Other Total operating revenues Operating expenses: Source of sappy and expenselcollection system expense - operetrons and maintenance Transmission and distributioNpumping expense - operetions end maintenance Treatment and disposal expense -operations and maintenance Operations end maintenance Customer accounts Administration and general Insurance claims and premiums Depreciation Total operating expenses Operating inwme (loss) Nonoperating revenues (expenses): Interest and Investment revenue HoteVmotel tax Repair fund revenues Management fees Miscellaneous revenue Interest expense Amorf¢ation expense Repair land expanses Gain (loss) on disposition of assets Total norwpereting revenue (expenses) Inwme (toss) before contributons and transfers Capital contributions Transfers out Change in net assets Total net assets -beginning Total net assets -ending Govammen[al Business-Typ e Activities-ENerodse Funds Activities Other Water Wastewater Century Enterprise Intemel Utility Utility Center Funds Total Service Funds $ 6,930,256 $ 10,318,147 $ - $ - $ 17,246,403 $ - 3,119,505 4,014,999 - - 7,134,504 - 511,312 3,150,113 - - 3,661,425 - 1,809,223 - - - 1,809,223 - 74,989 183,046 - - 258,035 - - - 1,337,%6 - 1,337,966 - - - 87,500 1,033,483 1,120,983 - - - 242,347 790,140 1,032,487 - - - - 4,124,346 4,124,348 - - - - 1,565,649 1,565,649 - - - - - - 16,335,049 - - - - - 2,524,054 720,881 394,310 32,523 65,946 1,213,660 13,166,166 18,050,615 1,700,336 7.579,566 40.504,683 18,859.103 860,883 3,762,256 - - 4,623,139 - 2,645,209 - - - 2,645,209 - 771,768 4,248,840 - - 5,020,608 - - - - 6,121,550 6,121,550 2,43Q754 1,445,440 58,374 7,300 - 1,511,114 - 2,839,749 3,221,082 2,752,117 966,517 9,779,465 625,281 - - - - - 15,244,029 1,595,290 3,595,089 559.942 458.537 6,208,858 73,822 10,158,339 14,885,641 3,319,359 7.546,604 35,909,943 18,373,8% 3,007,827 3,172.974 (1,619,023) 32,%2 4,594,740 465.207 193,805 612,455 40,222 59,574 9%,056 178,822 - - 1,247,928 - 1,247,928 - 908,257 667,288 - - 1,575,545 - 666,913 - - - 668,913 - 14,483 - 165,000 - 179,483 - (953,855) (1,340,050) (29,352) (252,289) (2,575,546) - (51,013) (28,616) - (564,676) (644,305) - (734,472) (805,020) - - (1,339,492) - (18.6251 (113,074) (6,820) 2,735 (135,984) - 27,293 (807,017) 1.416,978 !754,656) (117,402) 178.822 3,035,120 2,365,957 (202,045) (721,694) 4,477,338 664,029 1,091,135 - 322,726 - 1,413,661 - (44,200) (44,200) 4,126,255 2,365,%7 120,681 (765,894) 5,846,999 664,029 39,294,574 60,402,226 14.309,115 7.522,329 121,528,244 5,265,615 $ 43,420,829 $ 62,768,183 $ 14,429,7% $ 6,756,435 $ 127,375,243 $ 5,929,644 The notes to the fnancial statements ere an integral part of this statement. CITY OF SOUTH BEND 3TATEMENTOF CASH FLOWS PROPRIETARY FUNDS For The Year Ended December 3t, 2006 IJ Governmental Business-Type Activities-Enterprise Funds AdivNies Other Water Wastewater Century Enterprise Internal Utility Utility Center Funds Total Service Fund Cash Bows from operating activities: Receipts kom wstomere and users $ 13,948,509 $ 18,421,455 $ 2,034,042 $ 7,483,236 $ 41,1387,242 $ 2,315,087 Receipts from interfund services provided 771,566 92,423 - 52,000 915,989 16,718,710 Payments to suppliers (4,779,974) (8,354,015) (980,871) (3,497,425) (17,612,285) (15,133,036) Payments to employees (4,093,276) (324,759} (1,350,457) (2,085,426) {7,853,918) {2,132,153) Payments far interfund services used (388,579) (3,844,430) (471,002) (1,470.770) (6,174,781) (712,883) Net cash provided (used) M operating activdies 5,458,246 5,990,674 (768.288) 461,615 11.162.247 1,055,725 Cash Bowe from noncepAal financing activities: Advances from other funds - - - 1,239,923 1,239,923 - Repayments of advances from other funds - - - (799,442) (799,442) - Interfund ban - - - - - 6,522,464 interfund ben repaid - - - - - (6,321,681) Pdncipal paid on short term loan - (50,000) - (50,000} - HoteVmotel taz - - 1,247,928 - 1,247,928 - Transfer to other funds (44,200) (44,200) Net wsh provided by noncepitaf financing activities - 1,197.928 396281 1.594.209 200,783 Cash flows from capital and related financing activities: Acquisition and consWction of capital assets (1,039,483) (9,506,745) - (102,407) (10,648,635) (49,995) Bond issue costs paid (269,524) (36,793) - - (308,317) - Proceeds horn cepRal debt issued 4,638,728 7,730,836 - - 12,369,564 - Principal paid on cepital debt (2,485,622) (2,4(17,626) (71,500) (793,478) (5,832,226) - Inlerest paid on capital debt (1,042,309) (1,273,423) (29,241) (237,523) (2,582,4%) - Proceeds from sales of wpkal assets 837 3,999 4.278 9.114 - Net cash used by capital end related financing activities (197.3731 (5,565,752) !100.741) (1,129,130) !6,992,996) (49,995) Cash flows from irnesting activities: Proceeds from sales and maturities of investments - - 865,743 - 865,743 - Purchase of investments - - (1,033,714) - (1,033,714) - IMerastreceived 2913.355 612,455 40.222 59,167 1.010.199 179,046 Net cash provided (used) by irnesting adivtties 298,355 812,455 (127,749) 59.167 842,228 179,046 Net increase (decease) in cash end cash equivalents 5,559,228 1,037,377 201,150 (192,067) 6,605,688 1,385,559 Cash and cash equivalents, January 1 (Including $140,277, $1,244,351, $5,693,329 and $15,499,227 for the repair fund, wstomer deposits, revenue bond covenants and capital outlays, respedivey, reported in restricted accounts) 4,164,416 17,816,126 149.814 2,244,703 24,375,059 3,637,332 Cash and cesh equivalents, December 31 (Including $760,628, $1,304,879, $6,387,003, and 515,591),024 for the repair fund, wstomer deposits, revenue bond covenants end capital outlays, respectively, reported in restricted accounts) $ 9,723,644 $ 18,853,503 $ 350,964 S 2,052,636 $ 30,980,747 $ 5,022,891 The notes to the financial statements are an integral part d this statement. Continued on next page CITY OF SOUTH BEND STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For The Year Ended December 31, 2006 (Continued) A W Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) Adjustments to reconcile operating Income (loss) to net wsh provided (used) by operating activities: Depreciation expense Bad debt expense Bond proceeds used for operating expanses Nonoperating revenues (expenses) (Increase) decrease in assets: Accounts receivable Accounts recoNable -other Intargovemmemal receivables Interlund receivables Inventories Prepaid "Hems Increase (decrease) in liabilities: Customer deposits Accounts payable Contracts payable Accrued payroll payable Interfund ban Interlund services provided and used Compensated absence payable Taxes payable Defamed revenue Estimated unfiled claims Total adjustrnents Net cash provided (used) by operating activities Business-Tyo e Activties-Enterpdsa Funds Governmental Activities Other Water Wastewater Century Enterprise Internal Utility Utility Center Funds Total Service Fund $ 3,007,627 $ 3,172,974 $ (1,619,023) $ 32,%2 $ 4,594,740 $ 485,207 1,595,290 3,595,069 559,942 456,537 6,208,656 73,622 47,626 58,374 7,300 25,040 136,340 - - 48,100 - - 46,100 - 857,161 62,268 165,000 - 1,084,449 - (149,924) (338,735) (8,676) (66,723) (566,056) 58,354 (13,469) 27,395 20,646 (297) 34,275 - - - - - - 14,742 (69,446) 40,941 1,354 (350) (27,507) 101,596 106,2% (63,457) - (2,710) 40,129 (246,614) - - - - - (1,717) 76,023 - 42,636 - 720,667 - 10,198 (266,972) 13,166 107,963 (137,623) 765,617 - (336,310) 16,000 - (322,310) - (1,352) 6,124 (2,992) {783) 997 1,519 - - - (72,937) (72,937) 3,038 (7,879) (31,094) (292) - (33,265) - (1,516) 19,977 (76,097) 2,893 (54,743) 5,627 (6,609) - 244 - (6,365) - - - 172,500 - 112,500 - (204,068) 2,450,419 2.617,700 650,735 446,653 6,567,507 570,518 $ 5.456,246 $ 5,990,674 $ (768,2661 $ 461,615 $ 11,762,247 $ 1,055,725 Noncash investing, capital and financing agiv9iea: Capital assets contributed $ 1,091,135 $ - $ 322,726 $ - $ 1,413,861 $ - Capital assets acquired by lease - - - 19,261 19,261 - Capital assets acquired by bans - 40,691 - - 40,691 - Purohase of cap'4al assets on account 171,857 1,444,520 - - 1,616,377 - Capital asset disposals 62,340 698,537 127,139 868,016 7,800 Bond issue costs paid from bond proceeds 28,500 60,451 - - 88,951 - Trede in value of fu<ed assets - 88,021 - 2,569 90,590 - The notes to the financial statemeMS are an integral pad of this statement. CITY OF SOUTH BEND STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS December 31, 2006 Assets Cash and cash equivalents Receivables: Taxes Intergovernmental Total receivables Total assets Liabilities Current liabilities: ~ Accounts payable ~ Accrued payroll and withholdings payable Total current liabilties Noncurrent liabilities: DROP payable -due within one year DROP payable -long-term Total noncurrent liabilities Total liabilities Net Assets Pension Private-Purpose Trust Trust Agency Funds Funds Funds $ 4,315,946 $ 36,622 $ 1,152,287 287,439 - - 9,825 - - 297,264 - - 4,613,210 38,622 $ 1,152,287 168 - $ - 1,152,287 168 - 1,152,287 1,763,414 - - 36,210 1,799,624 1,799,792 - $ 1,152,287 Held intrust for: Employees' pension benefits 2,813,418 - Individuals, organizations, and other governments 38,622 Total net assets $ 2,813,418 $ 38,622 The notes to the financial statements are an integral part of this statement. CITY OF SOUTH BEND STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS For The Year Ended December 31, 2006 CT Additions Contributions: Employer State of Indiana Plan members Other Totat contributions Investment income: Interest Total additions Deductions Benefits Administrative expense Interest expense Pension Private-Purpose Trust Trust Funds Funds $ 5,442,996 $ 6,575,172 51,514 26,039 12,095,721 298,593 828 12,394,314 828 10,178,704 - 21,081 - 14,125 Total deductions 10,213,910 Changes in net assets 2,180,404 828 Net assets -beginning 633,014 37,794 Net assets -ending $ 2,813,418 $ 38,622 The notes to the financial statements are an integral part of this statement. CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS Summary of Significant Accounting Policies A. Reporting Entity The City of South Bend (primary govemment) was established under the laws of the State of Indiana. The primary government operates under aCouncil-Mayor form of government and provides the following services: public safety (police and fire), highways and streets, health, welfare and social services, culture and recreation, public improvements, planning and zoning, general administrative services, water, sewer, and urban redevelopment and housing. The accompanying financial statements present the activities of the primary government and its sig- nificantcomponent units. The component units discussed below are included in the primary govern- ment's reporting entity because of the significance of fheir operational or financial relationships with the primary government. Blended component units, although legally separate entities, are in sub- stance part of the government's operations and exist solely to provide services for the government; data from these units is combined with data of the primary government. Blended Component Units The South Bend Redevelopment Authority, a legally separate entity, is a significant blended com- ponentunit of the primary government. The Redevelopment Authority's sole purpose is to finance and construct land, buildings and other improvements for use by the primary govemment. Financial statements for the RedevelopmentAuthority are available at the City Controller's Office, City of South Bend, 227 West Jefferson, 1400 County-City Building, South Bend, Indiana, 46601. The Morris Entertainment, Inc., is also a legally separate nonprofit corporation, and is a significant blended component unit of the primary government. The Morris Entertainment, Inc., main purpose is to solicit donations for the restoration and renovation of the City's Morris Civic Auditorium and the City's Palais Royale Ballroom. Financial statements for the Morris Entertainment, Inc., are available at 211 North Michigan, South Bend, Indiana, 46601. The South Bend Building Corporation, Inc., is also a legally separate nonprofit corporation, and is a significant blended component unit of the primary government. The Building Corporation's main pur- pose is to finance construction and remodeling of City buildings for the City of South Bend. Debt of the Building Corporation is repaid through lease payments from the City. Financial statements for the Building Corporation are available at the City Controller's Office. Related Organizations The primary government's officials are also responsible for appointing the members of the boards of other organizations, but the primary government's accountability for these organizations does not extend beyond making the appointments. The Mayor and the Common Council appoint the board members of the South Bend Housing Authority, South Bend Public Transportation Corporation (TRANSPO), Urban Enterprise Association, and the Special Funds Board of Managers. During 2006, the Special Funds Board of Managers provided $1,247,928 to the City's Century Center and $354,943 to the City's Professional Sports Development Fund, to finance capital costs of the College Football Hall of Fame. 46 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) B. Government-Wide and Fund Financial Statements Government-wide financial statements (i.e., the Statement of Net Assets and the Statement of Changes in Net Assets} report information on all of the nonfiduciary activities of the primary govern- ment. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The Statement of Activities demonstrates the degree to which direct expenses of a given function or segments are offset by program revenues. Direct expenses are clearly identifiable with a specific function or segment. Program revenues include (1) charges to customers or applicants who pur- chase, use or directly benefit from goods, services or privileges provided by a given function or seg- mentand (2) grants and contributions that are restricted to meeting the operational or capital require- ments of a particular function or segment. Taxes and other items not properly included among pro- gram 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. C. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting as are the proprietary fund and pension trust and private purpose trust fund financial statements. Agency funds, however, report only assets and liabilities. Since they do not report equity (or changes in equity), they have no measurement focus. 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 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. Governmental fund financial statements are reported using the current financial resources measure- mentfocus 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 collec- tiblewithin the current period or soon enough thereafter to pay liabilities of the current period, For this purpose, the primary government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, asunder accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when the primary government receives cash. The primary government reports the following major governmental funds: The general fund is the primary operating fund. It accounts for all financial resources of the gen- eral government, except those required to be accounted for in another fund. 47 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) The park and recreation fund is used to account for the operation of the City park system. Financing is provided by a specific annual property tax levy to the extent that user fees and miscellaneous revenues are insufficient to provide such financing. The tax incremental financing (TIF) airport fund is used to account for public improvement projects in the airport economic development area. Financing is provided by property tax pro- ceeds inexcess of those attributable to the assessed value of the property in the district before redevelopment. The county option income tax (COIT) fund is used to account for the City's share of the county option income tax. Expenditures include land improvements and purchases of motor equipment. The primary government reports the following major proprietary funds: The water utility fund accounts for the operation of the primary government's water distribution system. The wastewater utility fund accounts for the operation of the primary government's wastewater treatment plant, pumping stations and collection systems. The Century Center fund accounts for the operation and maintenance of the City's convention center. Financing is received from various rental agreements and a subsidy from the St. Joseph County's Special Funds Board of Managers. Additionally, the primary government reports the following fund types: The internal service funds accounts for liability coverage, employee medical coverage, and central services such as fuel, vehicle repairs and various supplies provided to other departments on acost-reimbursement basis. The pension trust funds account for the activities of the 1925 police and 1937 fire pension funds which accumulate resources for pension benefit payments. The private-purpose trust fund reports a trust arrangement under which principal and income benefits cemetery maintenance. Agency funds account for assets held by the primary government as an agent for employee pay- roll, pension, and payroll deductions. 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 Account- ing Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The primary government 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 finan- cial statements. Exceptions to this general rule are payments-in-lieu of taxes and payments of administrative costs. Elimination of these charges would distort the direct costs and program reve- nues reported for the various functions concerned. 48 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Amounts reported as program revenues include (1) charges to customers or applicants for goods, services or privileges provided, (2) operating grants and contributions, and (3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as pro- gram revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues 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. The principal operating revenues of the enter- prisefunds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost 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. When both restricted and unrestricted resources are available for use, it is the primary government's policy to use restricted resources first, then unrestricted resources as they are needed. D. Assets, Liabilities and Net Assets or Equity 1. Deposits and Investments The primary government's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. State statute (IC 5-13-g) authorizes the primary government to invest in securities, including but not limited to, federal government securities, repurchase agreements, and certain money market mutual funds. Certain other statutory restrictions apply to all investments made by local govern- mental units. Nonparticipating certificates of deposit, demand deposits and similar nonparticipating negotiable instruments that are not reported as cash and cash equivalents are reported as investments at cost. Debt securities are reported at fair value. Debt securities are defined as securities backed by the full faith and credit of the United States Treasury or fully insured or guaranteed by the United States or any United States government agency. Open-end mutual funds are reported at fair value. Money market investments that mature within one year or less at the date of their acquisition are reported at amortized cost. Other money market investments are reported at fair value. Investment income, including changes in the fair value of investments, is reported as revenue in the operating statement. 2. Interfund Transactions and Balances Activity between funds that are representative oflending/borrowing arrangements outstanding at the end of the fiscal year are referred to as "interfund receivables/payables (i.e., the current and noncurrent portion of interfund loans). All other outstanding balances between funds are reported as "interfund services provided/used." Any residual balances outstanding between the govern- mentalactivities and business-type activities are reported inthe government-wide financial state- ments as "internal balances." 49 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) 3. Property Taxes Property taxes levied are collected by the County Treasurer and are usually distributed to the primary govemment in June and in December. State statutes (IC 6-1.1-17-16) require the Indiana Department of Local Government Finance to establish property tax rates and levies by February 15. These rates were based upon the preceding year's March 1 (lien date) assessed valuations adjusted for various tax credits. Taxable property is assessed at 100% of the true tax value (determined in accordance with rules and regulations adopted by the Indiana Department of Local Govemment Finance). Taxes may be paid in two equal installments that become delinquent if not paid by May 10 and November 10, respectively. All property taxes collected by the County Treas- urerand available for distribution were distributed to the primary govemment prior to December 31. Delinquent property taxes outstanding at year end forgovemmental and/or proprietary funds, net of allowances for uncollectible accounts, are recorded as a receivable with an offset to unearned revenue since the amounts are not considered available. 4. Inventories and Prepaid Items All inventories are valued at cost using the first in/first out (FIFO) method. Inventories of govern- mental funds are recorded as expenditures when consumed rather than when purchased. 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. 5. Restricted Assets Certain proceeds of the enterprise fund revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the statement of net assets balance sheet because their use is limited by applicable bond covenants. 6. Capital Assets Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks and similar items), are reported in the applicable governmental or business- type activities column in the govemment-wide financial statements. Capital assets are reported at actual or estimated historical cost based on appraisals or deflated current replacement cost. Contributed or donated assets are reported at estimated fair value at the time received. Capitalization thresholds (the dollar values above which asset acquisitions are added to the capi- talasset accounts), depreciation methods and estimated useful lives of capital assets reported in the government-wide statements and proprietary funds are as follows: Buildings and improvements Equipment Roads -collectors and residential Utilities' Infrastructure (small) Utilities' Infrastructure (large) Capitalization Depreciation Estimated Threshold Method Useful Life $ 50,000 Straight-line 20 to 30 5,000 Straight-line 5 to 20 3,000,000 Straight-line 40 to 50 75,000 Straight-line 30 to 99 100,000 Straight-line 30 to 99 The City has implemented retroactive reporting of its infrastructure as of December 31, 2006. 50 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) For depreciated assets, the cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. 7. Compensated Absences a. Sick Leave -primary government employees eam sick leave at the rate oftwo-thirds day for each completed month of service. Sick leave may accumulate to a maximum of 90 days for policemen, 100 days for firemen, 60 days for teamsters, and 65 days for all other employees. Accumulated sick leave is paid to firemen, to policemen, and to teamsters, upon termination of employment, at one-half their current pay rate, at a rate of one-half the corporal's rate of pay up to a maximum of 60 days, and $25 for each accumulated sick leave day, respectively, at the time of retirement. b. Vacation Leave -primary govemment employees earn vacation leave at rates from 9 days to 28 days per year based upon the number of years of service, employee classification, and hire date. Vacation leave does not accumulate from year to year, except in instances where special cases are approved. Employees earn vacation leave during the year to be used the following year. Unused vacation leave is paid to employees upon termination ofemployment. c. Personal Leave -primary govemment policemen earn personal leave at the rate of 7 days per year. Personal leave does not accumulate from year to year. Unused personal leave may be rolled into sick leave. City employees under the teamster contact can use their sick leave for personal leave. d. Compensatory Leave -Policemen and firemen have accumulated overtime-compensatory leave for a variety of reasons. Unused vacation leave for all City employees, and unused sick leave and compensatory leave of firemen, policemen and teamsters is accrued when incurred and reported as a liability in the Statement of Net Assets. Amounts due and payable at year end are included in the proprietary fund statements. No liability is recognized in the governmental fund statements. 8. Long-Term Obligations In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applic- able governmental activities, business-type activities or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. Debt issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and dis- counts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuance are reported as other financing sources while discounts on debt issuances are reported as other financing uses. lssuance costs, whether or not withheld from actual debt proceeds received, are reported as debt service expenditures. 51 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) 9. Fund Equity In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. II. Stewardship, Compliance and Accountability A. Budgetary Information Annual budgets are adopted on the cash basis which is not consistentwith accounting principles gen- erallyaccepted in the United States. All annual appropriations lapse at fiscal year end. Annual bud- getsare adopted for the following governmental funds: General Major governmental funds: Special revenue fund -park and recreation Capital projects fund -county option income tax (COIT) Nonmajor governmental funds: Special revenue funds -motor vehicle highway, recreation nonreverting, community development, local road and street, human rights federal, special events professional sports development Debt service funds -redevelopment bond-studebaker, college football hall of fame debt service Capital projects funds -emergency medical services, professional sports development, park nonreverting capital, cumulative capital development, cumulative capital improvement, economic development income tax, major moves On or before August 31, the City Controller submits to the Common Council a proposed operating budget for the year commencing the following January 1. Prior to adoption, the budget is advertised and public hearings are conducted by the Common Council to obtain taxpayer comments. In September of each year, the Common Council through the passage of an ordinance approves the budget for the next year. Copies of the budget ordinance and the advertisement for funds for which property taxes are levied or highway use taxes are received are sent to the Indiana Department of Local Government Finance. The budget becomes legally enacted after the City Controller receives approval of the Indiana Department of Local Government Finance. The primary government's management cannot transfer budgeted appropriations between object classifications of abudget without approval of the Common Council. The Department of Local Gov- ernment Finance must approve any revisions to the appropriations for any fund or any department of the General Fund. The legal level of budgetary control is by object and department within the fund for the General Fund and by object within the fund for all other budgeted funds. Expenditures did notexceed appropriations forany funds orany departmentswithin the General Fund or within the Park and Recreation Fund, or within any other nonmajor governmental fund which required legally, approved budgets. 52 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) B. Deficit Fund Equity At December 31, 2006, the following funds reported deficits in fund equity, which are violations of state statute: Deficit Governmental funds: Redevelopment Bond -Studebaker $ (7,828) Football Hall of Fame Capital (1,250,000) Enterprise funds (net assets): Blackthorn Golf Course (1,225,424) Fund equity deficits arose primarily from expenditures or expenses exceeding revenues due to the underestimate of current requirements. It is anticipated that these deficits will be repaid from future revenues. III. Detailed Notes on All Funds A. Deposits and Investments 1. Deposits Custodial credit risk is the risk that in the event of a bank failure, the government's deposits may not be returned to it. Indiana Code 5-13-8-1 allows a political subdivision of the State of Indiana to deposit public funds in a financial institution only if the financial institution is a depository eligible to receive state funds; and has a principal office or branch that qualifies to receive public funds of the political subdivision. At December 31, 2006, the bank balances held at Wells Fargo Bank NA, The Bank of New York Trust Company, NA, LaSalle Bank, and at Deutsche Bank Trust Company Americas in the amounts of $2,126,247, $782,182, $381,946, and $160,316, respec- tively, were collateralized with securities held by the pledging financial institution's trust depart- ment oragent but not in the depositor-City's name. The remaining bank balances were insured by the Federal Deposit Insurance Corporation or the Public Deposit Insurance Fund, which covers all public funds held in approved depositories. 2. Investments Authorization for investment activity is stated in Indiana Code 5-13. As of December 31, 2006, the City had the following investments: Primary Government Investment Maturities (in Years) Investment Fair Less More Type Value Than 1 1-2 Than 2 U.S. Treasuries and Securities $ 1,787,219 $ 1,787,219 $ - $ - 53 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Investment Policies Indiana Code 5-13-9 authorizes the City to invest in securities backed by the full faith and credit of the United States Treasury or fully guaranteed by the United States ofAmerica and issued by the United States Treasury, a federal agency, a federal instrumentality, orafederal govemment spon- sored enterprise. Indiana Code also authorizes the unit to invest in securities fully guaranteed and issued by a federal agency, a federal instrumentality or a federal government sponsored enterprise. These investments are required by statute to have a stated final maturity of not more than two years. Indiana Code also provides for investment in money market mutual funds that are in the form of securities of, or interest in, an open-end, no-load, management-type investment company or investment trust registered under the provision of the federal Investment Company Act of 1940, as amended. Investments in money market mutual funds may not exceed 50% of the funds held by the City and available for investment. The portfolio of an investment company or investment trust used must be limited to direct obligations of the United States of America, obligations issued by a federal agency, a federal instrumentality, or a federal government sponsored enterprise; or repurchase agreements fully collateralized by direct obligations ofthe United States ofAmerica or obligations issued by a federal agency, a federal instrumentality, or a federal government spon- soredenterprise. The form of securities of, or interest in, an investment company or investment trust must be rated as AAA, or its equivalent by Standard and Poors Corporation or its successor or Aaa, or its equivalent, by Moody's Investors Service, Inc., or its successor. The form of securi- ties in an investment company or investment trust should have a stated final maturity of one day. Additionally, the City may enter into repurchase agreements with depositories designated by the State Board of Finance as depositories for state deposits involving the unit's purchase and guaranteed resale of any interest-bearing obligations issued or fully insured or guaranteed by the United States of America, a United States of America government agency, an instrumentality of the United States of America, or a federal govemment sponsored enterprise. The repurchase agreement is considered to have a stated final maturity of one day. This agreement must be fully collateralized by interest-bearing obligations as determined by their current market value. Investment Custodial Credit Risk The custodial credit risk for investments is the risk that, in the event of the failure of the counter- party to a transaction, a government will not be able to recover the value of investment or col- lateralsecurities that are in the possession of an outside party. The City does not have a formal investment policy for custodial credit risk for investments. At December 31, 2006, the City held investments in U.S. Treasuries and Securities in the amount of $1,787,219. These investments were held by the counterparty's trust department or agent but not in the City's name. Interest Rate Risk Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The City must follow state statute and limit the stated final maturities of the invest- ments to no more than two years. Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obli- gations. U.S. Treasury Securities are guaranteed by the full faith and credit of the U.S. gov- ernmentand are recognized as the safest investment available. The City does not have a formal investment policy for credit risk. 54 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of a government's invest- ment in asingle issuer. The City does not have a policy in regards to concentration of credit risk. United States ofAmerica govemmentand United States ofAmerica govemmental agency securi- tiesare exempt from this policy requirement. Foreign Currency Risk The City does not have a formal policy in regards to foreign currency risk. The City does not have any foreign currency. B. Receivables The following receivable accounts have timing and credit characteristics different from typical accounts receivable. As of December 31, 2006, City funds recognized the following loan receivable balances. The schedule shows the total receivable and the portion that is not due within one year. These loans were for economic development projects. Fund Receivable Noncurrent Major governmental funds: County Option Income Tax Nonmajor governmental funds: Economic Development State Grants Community Development Industrial Revolving $ 266,667 $ 233,333 3,855,748 3,395,950 1,417,914 1,241,432 3,986,144 3,543,079 Totals C. Capital Assets $ 9,526,473 $ 8,413,794 Capital asset activity for the year ended December 31, 2006, was as follows: Beginning Ending Primary Government Balance Increases Decreases Balance Governmental activities: Capital assets, not being depreciated: Land $ 11,564,931 $ - $ 25,000 $ 11,539,931 Construction in progress 6,214,193 1,796,967 6,426,761 1,584,399 Total capital assets, not being depreciated 17,779,124 1,796,967 6,451,761 13,124,330 55 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Beginning Ending Primary Government Balance Increases Decreases Balance Governmental activities (continued): Capital assets, being depreciated: Buildings 102,625,262 1,325,306 1,270,798 102,679,770 Improvements other than buildings 8,713,737 736,323 - 9,450,060 Machinery and equipment 37,623,047 1,732,951 800,501 38,555,497 Roads being depreciated 360,945,625 5,140,137 - 366,085,762 Totals 509,907,671 8,934,717 2,071,299 516,771,089 Less accumulated depreciation for; Buildings' 22,006,922 2,257,581 995,769 23,268,734 Improvements other than buildings 4,489,950 362,996 - 4,852,946 Machinery and equipment 16,890,331 3,118,981 725,937 21,283,375 Roads being depreciated 190,339,299 9,076,177 - 199,415,476 Totals Total capital assets, being depreciated, net Total governmental activity capital assets, net 235,726,502 14,815,735 1,721,706 248,820,531 274,181,169 (5,881,018) 349,593 267,950,558 $ 291,960,293 $ (4,084,051) $ 6,801,354 $ 281,074,888 `The beginning balance has been restated to include $1,140,383 previously excluded. Business-type activities: Capital assets, not being depreciated: Land Construction in progress Total capital assets, not being depreciated Capital assets, being depreciated: Buildings Improvements other than buildings Machinery and equipment Totals Less accumulated depreciation for: Buildings Improvements other than buildings Machinery and equipment Totals Total capital assets, being depreciated, net Total business-type activity capital assets, net $ 3,020,575 $ - $ - $ 3,020,575 3,938,589 10,194,332 1,766,234 12,366,687 6, 959,164 10,194, 332 1, 766, 234 15, 387, 262 92,513,376 79,398 83,718 92,509,056 88,019,697 3,972,210 291,746 91,700,161 43,446,609 1,166,856 586,991 44,026,474 223,979,682 5,218,464 962,455 228,235,691 30,768,132 2,242,471 26,649 32,983,954 19,158,662 1,807,236 216,553 20,749,345 28,018,301 2,159,151 483,566 29,693,886 77,945,095 6,208,858 726,768 83,427,185 146,034,587 (990,394) 235,687 144,808,506 $ 152,993,751 $ 9,203,938 $ 2,001,921 $ 160,195,768 56 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Depreciation expense was charged to functions/programs of the primary government as follows: Governmental activities: General government $ 240,872 Public safety 2,309,672 Highways and streets, including depreciation of general infrastructure assets 9,870,951 Health and welfare 39,131 Culture and recreation 2,178,477 Economic development 102,810 Internal service funds* 73,822 Total depreciation expense -governmental activities $ 14,815,735 Business-type activities: Water $ 1,595,290 Wastewater 3,595,089 Civic center 559,942 Building permits 44,941 Parking garage 82,116 Solid waste 178,666 Golf course 152,814 Total depreciation expense -business-type activities $ 6,208,858 *Capital assets held by the primary government's internal service funds are charged to the various functions based on their usage of the assets. D. Construction Commitments Construction work in progress is composed of the following: Total Expended to Required Project December 3l, Future Project Authorized 2006 Committed Funding Governmental activities: Riverwalk Sidewalk Repair $ 293,431 $ 293,431 $ - $ - Riverside Bikeway/Walkway 509,744 509,744 - - New Fire Station No. 2 2,263,243 781,224 1,482,019 - Total-governmental activities $ 3,066,418 $ 1,584,399 $ 1,482,019 $ - 57 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Project Business-type activities: Water Utility: Cleveland Well Field South Well Field Improvement Other Water Projects Wastewater Utility: Edison Park Separation Harter Heights Separation Kensington/Crest Manor Drainage Managed Wetland CSO Water Memorial Hospital/Lafayette Drainage Angela River Crossing No. 5 Douglas Road Sewer Extension Backwater Gate Replacement -Design Notre Dame Sanitary Sewer Twyckenham Drive Storm Sewer Studebaker Trunk Storm Sewer Raw Sewage Pump Engine SRF Funded Wastewater Treatment Plant Rehabilitation Other Wastewater Projects Totals -business-type activities Total Expended to Required Project December 31, Future Authorized 2006 Committed Funding $ 300,430 $ 300,430 $ - $ - 289,800 187,521 102,279 - 223,332 202,926 20,406 - 1,582,972 1,575,741 7,231 - 1,638,404 1,114,867 523,537 - 967,451 154,234 813,217 - 666,003 63,847 602,156 - 2,225,401 2,156,099 69,302 - 260,933 227,211 33,722 - 307,371 307,371 - - 188,250 41,851 146,399 - 3,410,814 3,045,147 365,667 - 340,000 13,600 326,400 - 418,110 404,490 13,620 - 825,818 97,228 728,590 - 2,076,632 2,076,632 - - 437,510 397,492 40,018 - $ 16,159,231 $ 12,366,687 $ 3,792,544 $ - E. Interfund Balances and Activity 1. Interfund Receivables and Payables The composition of interfund balances as of December 31, 2006, is as follows: Govemmental Funtls Enterprise Funds Park and TF- Century Nanrtajor hternal Receivable General Recreation AFport COR tVonmajor Water Wastewater Center Enterprise Service Tatal Governmental funds: General E - E 2,473 E 1,872 E 1,108 E 41,647 E 2,543 E 30 E 211 E 624,569 E 692,633 E1,567,066 TF-Akport - - - - - - - - 2,063,000 - 2.063,000 CGrr - _ - - 13,767 - 46,093 - - - 61,860 Nonmajar govemmentel 1,256 - - - 247,635 - - - - - 249,093 Enterprise Tunds: Water 4,630 2,305 - - 67,000 - 1,059 1,330 286 593 77,205 Westew aler 128,728 - - - 13,844 - - - - - 142,572 Nanmajor enterprise - - - - 350 - - - - - 350 Mernal service 215,831 23,689 9,122 21,516 35,153 1,103 39,802 3,010 349,228 Totals E 350,447 E 28,487 E 1,872 S 1,108 E 393,585 S 24,059 E 84,335 E 2.844 E 2,747,658 E 896,238 E4,530,412 58 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Interfund balances resulted from the time lag between the dates that (1) Interfund loans are repaid, (2) Interfund goods and services are provided or reimbursable expenditures occur, (3) transactions are recorded in the accounting system and {4) payments between funds are made. 2. Advances Between Funds The advances included a loan balance due from the Hall of Fame Operating Fund, a nonmajor governmental fund, to the General Fund, $1,750,000. The loan was made during the years from 1996 to 1999. This loan is to be repaid from excess operating revenues of the College Football Hall of Fame. No payment schedule has been established. The advances also include a loan balance, $506,448, due from the Economic Development State Grants Fund to the Industrial Revolving Fund, both nonmajorgovernmentalfnnds. This loan was made during 2002 for an economic development project. 3. Interfund Transfers Interfund transfers at December 31, 2006, were as follows: Transfer To General TIF - Nonmajor Transfer From Fund Airport COIT Governmental Total General $ - $ - $ - $ 870,033 $ 870,033 Park and recreation - - - 98,849 98,849 TIF -Airport - - - 383,921 383,921 COIT - - - 2,709,706 2,709,706 Nonmajor governmental 351,101 35,113 37,151 4,398,466 4,821,831 Nonmajor enterprise - 44,200 - - 44,200 Totals $ 351,101 $ 79,313 $ 37,151 $ 8,460,975 $ 8,928,540 The primary government typically uses transfers to fund ongoing operating subsidies and to transfer the portion of state-shared revenues from the general fund to the debt service fund for current-year debt service requirements. F. Leases 1. Operating Leases The primary govemment has entered into various operating leases having initial or remaining noncancelable terms exceeding one year for golf cart global positioning systems, vehicles, copiers, and office space. Rental expenditures for these leases were $377,249. The following is a schedule by years of future minimum rental payments as of December 31, 2006: 59 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) 2007 $ 361, 222 2008 266,439 2009 255,459 2010 172,558 2011 73,492 2012 52,421 Total $ 1,181,591 2. Capital Leases The primary government has entered into various capital leases for various types of equipment, a softball complex, and a parking garage. The parking garage capital lease is being repaid from governmental funds. Future minimum lease payments and present values of the net minimum lease payments under these capital leases as of December 31, 2006, are as follows: Governmental Business-Type Activities Activities 2007 $ 995,401 $ 493,420 2008 831,199 493,421 2009 658,014 393,349 2010 529,112 221,645 2011 300,106 24,970 2012-2016 800,000 - Total minimum lease payments 4,113,832 1,626,805 Less amount representing interest 580,645 103,211 Present value of net minimum lease payments $ 3,533,187 $ 1,523,594 Assets acquired through capital leases still in effect are as follows: Governmental Business-Type Activities Activities Buildings Machinery and equipment Totais Accumulated depreciation Totals $ - $ 1,960,044 3,118,672 1,108,914 3,118,672 3,068,958 443,478 1,104, 943 $ 2,675,194 $ 1,964,015 60 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) G. Long-Term Liabilities 1. General Obligation Bonds The primary government issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds are direct obligations and pledge the full faith and credit of the primary government. At December 31, 2006, there are no general obligation bonds outstanding. 2. Mortgage Bonds Mortgage Bonds outstanding at year end are as follows: Purpose Rates Issue 12-31-06 Governmental activities: 2001 Public Warks Service Center 4.63% to 5.3% $ 8,112,250 $ 6,932,685 2003 New Fire Station/Police renovations 2% to 5% 21,335,000 19,645,000 2005 Park Fitness Center renovations 3.61% 920,000 759,439 Total -governmental activities $ 30,367,250 $ 27,337,124 Business-type activities: 2001 Public Works Service Center 4.63% to 5.3% $ 1,137,750 $ 972,315 Mortgage bonds at year end include the following amounts of unamortized bond discount (pre- mium): Unamortized Balance at Discount Adjusted Purpose December 31 (Premium) Balance Governmental activities: 2001 Public Works Service Center $ 6,932,685 $ 58,813 $ 6,873,872 2003 New Fire Station/Police renovations 19,645,000 (506,072) 20,151,072 2005 Park Fitness Center renovations 759,439 - 759,439 Total governmental activities $ 27,337,124 $ (447,259) $ 27,784,383 Business-type activities: 2001 Public Works Service Center $ 972,315 $ 11,922 $ 960,393 61 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Mortgage debt service requirements to maturity are as follows: Year Ended Governmental Activities December 31 Principal Interest 2007 2008 2009 2010 2011 2012-2016 2017-2021 2022-2026 $ 1,379,285 1,423,375 1,473,317 1,522,892 1,375,265 7,830,120 9,882,870 2,450,000 $ 1,212,285 1,165,421 1,116,990 1,064,546 1,007,431 4,065,521 2,008,981 123,625 Totals 3. Revenue Bonds $ 27,337,124 $ 11,764,800 Business-Type Activities Principal Interest $ 45,510 $ 48,050 47,970 45,859 49,815 43,537 52,275 41,112 54,735 38,570 314,880 148,948 407,130 56,149 $ 972,315 $ 422,225 The primary government issues bonds to be paid by income derived from the acquired or con- structed assets. Revenue bonds outstanding at year end are as follows: Interest Original Outstanding Purpose Rates Issue 12-31-06 Governmental activities: Tax Incremental Financing Revenue Bonds: 2002 TJX Special Taxing District 3.0% to 4.75% $ 6,620,000 $ 5,580,000 2003 Airport TIF 1.6% to 5.20% 14,420,000 13,175,000 2003 SB Downtown Central Development TIF 1.6% to 5.20% 19,795,000 19,500,000 2005 Southside TIF 6.1 % to 6.75% 5,485,000 5,485,000 2006 Erskine Commons 4.50% to 5.40% 2,440,000 2,440,000 Redevelopment Authority Revenue Bonds: 1996 Central Development Refinancing 4% to 5.85% 3,790,000 2,545,000 1998 Morris Performing Arts Center 4.5%to 5.1% 13,300,000 9,255,000 2000 Hall of Fame Refinancing 4.45% to 6.0% 15,370,000 11,825,000 2001 Century Center Refinancing 2.9% to 5.0% 6,825,000 5,200,000 CEDIT Revenue Bonds: 2006 CEDIT Refinancing Bonds 3.75% to 4% 7,440,000 7,440,000 Total governmental activities $ 95,485,000 $ 82,445,000 Business-type activities: 1993 Water Works Improvement 3.4% to 5.1% $ 5,100,000 $ 1,030,000 1997 Water Works Improvement 4.35% to 4.75% 22,500,000 9,735,000 2002 Water Works Improvement 3.5% to 5.0% 5,975,000 5,160,000 2006 Water Works Improvement 4.25% to 4.50% 4,710,000 4,710,000 2001 Sewage Works Refinancing 3.0%to 4.25% 5,240,000 1,655,000 2004 Sewage Works Improvements 2.5% to 4.75% 11,425,000 10,640,000 2006 Sewage Works Improvements 3.6% to 4.625% 7,630,000 7,630,000 1998 Blackthorn Golf Course Refinancing 3.25% to 4.8% 6,135,000 3,785,000 Total business-type activities $ 68,715,000 $ 44,345,000 62 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Governmental activities: Tax Incremental Financing Revenue Bonds: 2002 TJX Special Taxing District 2003 Airport TIF 2003 SB Downtown Central Development TIF 2005 Southside TIF 2006 Erskine Commons Redevelopment Authority Revenue Bonds: 1996 Central Development Area Refinancing 1998 Moms Performing Arts Center 2000 Ball of Fame Refinancing 2001 Century Center Refinancing CEDIT Revenue Bonds: 2006 CEDIT Refinancing Bonds Total governmental activities Business-type activities: 1993 Water Works Improvement 1997 Water Works Improvement 2002 Water Works Improvement 2006 Water Works Improvement 2001 Sewage Works Refinancing 2004 Sewage Works Improvement 2006 Sewage Works Improvement 1998 Blackthorn Golf Course Refinancing Total business-type activites Unamortized Unamortized Balance at Discount Loss (Gain) on Adjusted December 31 (Premium) Refunding Balance $ 5,580,000 $ 52,621 $ - $ 5,527,379 13,175,000 - - 13,175,000 19,500,000 - 48,934 19,451,066 5,485,000 65,217 - 5,419,783 2,440,000 - - 2,440,000 2,545,000 3,940 - 2,541,060 9,255,000 73,500 - 9,181,500 11,825,000 39,691 (11,553) 11,796,862 5,200,000 39,319 293,982 4,866,699 7,440,000 (46,521) 398,943 7,087,578 $82,445,000 $ 227,767 $ 730,306 $81,486,927 $ 1,030,000 $ 937 $ - 1,029,063 9,735,000 8,413 - 9,726,587 5,160,000 (104) - 5,160,104 4,710,000 42,826 4,667,174 1,655,000 (15,235) 47,459 1,622,776 10,640,000 (62,073) - 10,702,073 7,630,000 13,340 - 7,616,660 3,785,000 27,822 130,549 3,626,629 $44,345,000 $ 15,926 $ 178,008 $44,151,066 Revenue bonds debt service requirements to maturity are as follows: Year Ended Governmental Activities Business-Ty pe Activities December 31 Principal Interest Principal Interest 2007 $ 3,875,000 $ 3,823,698 $ 1,680,000 $ 1,466,945 2008 3,985,000 3,783,917 4,395,000 1,820,179 2009 4,335,000 3,606,762 4,005,000 1,625,719 2010 4,835,000 3,404,278 3,630,000 1,459,572 2011 5,055,000 3,181,135 3,800,000 1,297,504 2012-2016 29,235,000 12,027,467 10,185,000 4,750,183 2017-2021 19,670,000 5,528,444 8,630,000 3,031,632 2022-2026 10,990,000 1,346,318 7,670,000 792,896 2027-2030 465,000 15,694 .350,000 - Totals $ 82,445,000 $ 36,717,713 $ 44,345,000 $ 16,244,630 63 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) 4. Notes and Loans Payable The primary govemment has entered into various notes/loans. Annual debt service requirements to maturity for the notes/loans are as follows: Year Ended Governmental Activities Business-Ty pe Activities December 31 Principal Interest Principal Interest 2007 $ 1,502,268 $ 517,953 $ 1,301,500 $ 525,924 2008 2,440,114 453,413 1,470,765 515,862 2009 1,786,270 341,805 1,509,514 473,619 2010 1,656,742 260,081 1,553,371 430,252 2011 1,133,550 183,519 1,592,340 385,613 2012-2016 1,463,750 554,052 8,388,014 1,225,720 2017-2021 1,058,844 304,229 3,442,929 152,851 2022-2026 717,014 82,986 - - Totals $ 11,758,552 $ 2,698,038 $ 19,258,433 $ 3,709,841 5. Bond Refunding On December 16, 2006, the City of South Bend issued $7,440,000 in refunding revenue bonds with an average interest rate of 3.9715% to advance refund $8,120,000 of outstanding Economic Development Income Tax Revenue Bonds of 1997 with an average interest rate of 4.44%. The net proceeds of $7,373,571 (after payment of $112,950 in bond issue costs and $46,521 in bond premium) and local contributions of $998,140 were used to purchase U.S. Government Securi- ties. Those securities were deposited into an irrevocable trustwith an escrow agent to provide for all future debt service payments on the 1997 bonds. As a result, these bonds are considered to be defeased and the liability for those bonds has been removed from the Statement of Net Assets. The refunding resulted in the accounting loss of$398,943, which has been recognized as deferral of loss on refunding. This amount will be amortized using the straight-line method and charged to interest expense overthe next 11 years. The City in effect reduced its aggregate debt service payment by $915,262 over the next 11 years and realized an economic gain (difference between the present values of the old and new debt service payments) of $504,073. 6. Changes in Long-Term Liabilities Long-term liability activity for the year ended December 31, 2006, was as follows: 64 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Due Beginning Ending Within Primary Government Balance Additions Reductions Balance One Year Governmental activities: Bonds payable: General obligation $ 320,000 $ - $ 320,000 $ - $ - Revenue 84,225,000 9,880,000 11,660,000 82,445,000 3,875,000 Mortgage 28,994,057 - 1,656,933 27,337,124 1,379,285 Total bonds payable 113,539,057 9,880,000 13,636,933 109,782,124 5,254,285 Notes and loans payable 9,631,865 3,222,000 1,095,313 11,758,552 1,502,268 Capital leases 3,454,627 902,036 823,476 3,533,187 845,153 Compensated absences 4,656,303 3,412,851 3,333,978 4,735,176 3,412,851 Net pension obligation 60,224,993 3,183,121 63,408,114 - Total governmental activities long-term liabilities $ 191,506,845 $ 20,600,008 $ 18,889,700 $ 193,217,153 $ 11,014,557 'The beginning balance of notes and loans payable has been increased $600,000 for a loan previously omitted and has been decreased $507,906 for a loan previously included that was satisfied during 2005 as part of a settlement. Business-type activities: Revenue bonds payable: Water Utility $ 18,285,000 $ 4,710,000 $ 2,360,000 $ 20,635,000 $ - Wastewater Utility 13,475,000 7,630,000 1,180,000 19,925,000 1,215,000 Blackthom Golf Course 4,230,000 - 445,000 3,785,000 465,000 Total revenue bonds payable 35,990,000 12,340,000 3,985,000 44,345,000 1,680,000 Mortgage bonds payable 1,015,980 - 43,665 972,315 45,510 Capital leases payable 1,710,033 225,000 411,439 1,523,594 446,073 Notes and loans payable 20,659,864 40,691 1,442,122 19,258,433 1,301,500 Total business-type activities long-term liabilities $ 59,375,877 $ 12,605,691 $ 5,882,226 $ 66,099,342 $ 3,473,083 Compensated absences for governmental activities typically have been liquidated from the general fund and special revenue funds. All of the December 31, 2006, business-type activities' compensated absences are due within one year. H. Segment Information The primary government issued revenue bonds to finance Blackthom Golf Course improvements. Investors in the revenue bonds rely solely on the revenue generated by the individual activities for repayment. Summary financial information for the Blackthorn Golf Course is presented below. 65 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Condensed Statement of Net Assets Assets: Current assets $ 251,512 Deferred charges 26,735 Restricted assets 1,292,677 Capital assets 2,987,323 Total assets $ 4,558,247 Liabilities: Current liabilities $ 2,098,208 Current liabilities payable from restricted assets 523,834 Noncurrent liabilities 3,161,629 Total liabilities $ 5,783,671 Net assets: Invested in capital assets, net of related debt $ (639,306) Restricted 1,213,815 Unrestricted (1,799,933) Total net assets $ (1,225,424) Condensed Statement of Revenues Expenses and Changes in Net Assets Operating revenues $ 1,565,649 Depreciation expense 152,814 Other operating expenses 1,446,929 Operating income (34,094) Nonoperating revenues (expenses): Investment earnings 53,550 Interest expense (207,678) Amortization (4,336) Transfers (44,200) Change in net assets (236,758) Beginning net assets (988,666) Ending net assets $ (1,225,424) 66 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Condensed Statement of Cash Flows Net cash provided (used) by: Operating activities $ 120,367 Noncapital financing activities 599,300 Capital and related financing activities (698,088) Investing activities 53,143 Net increase (decrease) 74,722 Beginning cash and cash equivalents 1,451,572 Ending cash and cash equivalents $ 1,526,294 I. Restricted Assets The balances of restricted asset accounts in the enterprise funds are as follows: Cash, cash equivalents, and investments Repair funds $ 160,628 Customer deposits 1,304,879 Revenue bond convenant accounts 6,387,003 Capital outlay accounts 15,598,024 Capital outlay accounts -investments 1,009,945 Cash with fiscal agent 16,139 Repair fund receivable 165,485 Interest receivable 5,951 Total restricted assets $ 24,648,054 J. Restatements and Reclassifications For the year ended December 31, 2006, certain changes have been made to the financial statements to more appropriately reflect financial activity of the primary government. The following schedule pre- sents asummary of restated beginning balances. Prior period adjustments include: retroactively reporting infrastructure and corrections to capital asset values, ($167,380,945), to loans receivable, $300,000, to property held for resale, $328,597, and to loans payable, ($92,094). Balance Balance as Reported Prior as Restated December 31, Period January 1, Fund Type 2005 Adjustments 2006 Governmental activities: Net Assets $ 68,873,163 $ 167,917,448 $ 236,790,611 67 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) K. Loss on Sale/Leaseback of Leighton Parking Garage During 2000, the City completed construction of the Leighton Parking Garage and capitalized the cost of the garage, $11,439,712, in the Parking Garage Fund, an enterprise fund. On December 1, 2000, the City sold the garage to the South Bend Transportation Company (TRANSPO) for $3,000,000 as part of asale/leaseback agreement. The proceeds were receipted into the County Option Income Tax Fund. This fund is also making the future lease payments to TRANSPO. The present value of the lease, $1,960,044, was the new basis for the parking garage. As part of this sale/leaseback, the Parking Garage Fund recognized a deferred loss of $8,439,712, which is being amortized over the 15 year life of the lease. L. Property Held For Resale The City's Redevelopment Commission has purchased properties in blighted areas for redevelopment and subsequent resale. At December 31, 2006, the market value of these properties was not known. These properties are recognized as assets in the funds that purchased the property. IV. Other Information A. Risk Management The primary government is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; job related illnesses or injuries to employees; medical benefits to employees, retirees, and dependents; and natural disasters. The risks of torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters are covered by commercial insurance from independent third parties. Settled claims from these risks have not exceeded commercial insurance coverage for the past three years. There were no significant reductions in insurance by major category of risk. Liability Insurance The primary government has chosen to establish a risk financing fund for risks associated with job related illnesses or injuries to employees, automobile liability, and comprehensive liability. The risk financing fund is accounted for in the Liability Insurance Premium Reserve Fund, an internal service fund, where assets are set aside for claim settlements. An excess policy through commercial insur- ance covers individual claims in excess of $250,000 per year forjob related illnesses or injuries to employees and $50,000 per year for damage to and destruction of assets. Settled claims resulting from this risk did not exceed commercial insurance coverage in the past three years. A premium is charged to each fund based on a study of paid claims and based on the number of employees and percent of the total budget. Provisions are also made for unexpected and unusual claims. Claim expenditures and liabilities of the fund are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. These losses include an estimate of claims that have been incurred but not reported (IBNRs). Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of pay outs and other economic and social factors. 68 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Changes in the balance of claim liabilities during the past two years are as follows: 2005 Unpaid claims, beginning of fiscal year Incurred claims and changes in estimates Claim payments Unpaid claims, end of fiscal year Group Health Insurance 2006 756,221 $ 388,202 1,955,208 1,849,900 2,323,227 1,830,506 $ 388,202 $ 407,596 The primary government has chosen to establish a risk financing fund for risks associated with medi- cal benefits of employees and their covered dependents. The risk financing fund is accounted for in the Self-Funded Employee Benefits Fund, an internal service fund, where assets are set aside for benefit costs. An excess policy through commercial insurance covers individual claims in excess of $125,000 per year. Settled claims resulting from this risk did not exceed commercial insurance cover- age in the past three years. A premium is charged to each fund bases on the number of employees and estimated costs exceeding the employees' contributions. Provisions are also made for unex- pected and unusual claims. Claim expenditures and liabilities of the fund are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. These losses include an estimate of claims that have been incurred but not reported (IBNRs). Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amounts of pay outs and other economic and social factors. Changes in the balance of claim liabilities during the past two years are as follows: 2005 2006 Unpaid claims, beginning of fiscal year $ 892,815 $ 814,321 Incurred claims and changes in estimates 10,107,876 13,394,129 Claim payments 10,186,370 12,741,654 Unpaid claims, end of fiscal year $ 814,321 $ 1,466,796 During 2005, the City's former employee medical benefits' administrator, Healthcare Resources Group (HRG), failed to pay $1,111,899 in health care claims for City employees. The City had paid HRG for the claims. HRG was purchased by another business that has filed bankruptcy. The City has been notified by the bankruptcy court that the court has received approximately 70% of the total claims and the City has recognized a receivable for this percent of the total claims. The remaining claims, $333,570 have been recognized as a loss by the City in prior years. In the future, the City may receive more payments from the bankruptcy court. The City may also receive restitution from a pending criminal case. 69 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) B. Subsequent Events During 2005, the City approved a loan from the U.S. Department of Housing and Urban Development for $9,180,000 to finance economic development activities. During 2006, the City received $3,222,000. During 2006, the City approved a series of revenue bonds, total not to exceed $56,380,000, to finance improvements to the wastewater utility. The City sold $7,630,000 during 2006 and is in the planning stage of selling a portion of the bonds during 2007, estimated at $16.6 million. Also during 2006, the City approved the sale of real estate commonly called the Studebaker Stamping Plant to the South Bend Transportation Company (TRANSPO). TRANSPO paid the City $1,000,000 during 2005 and will pay the $3,000,000 balance to the City after demolition and infrastructure improvements are completed (estimated late in 2007 or early in 2008). During 2007, the Common Council approved Resolution 3705-07 authorizing the Board of Public Works to enter into a guaranteed energy savings contractwith a contractor to upgrade traffic signals. This construction cost will be financed by an estimated one million dollar loan which the City will repay from anticipated energy savings resulting from the upgrade. Effective January 1, 2007, the City's Century Center, an enterprise fund, will be operated and man- aged by a private business. The management agreement is for a three year period. All City employ- ees working at Century Center become employees of this private business. The City's Common Council will continue to approve the annual budget for Century Center. C. Contingent Liabilities College Football Hall of Fame Operations The City's General Fund has advanced a total of $1,750,000 to the College Football Hall of Fame Fund in various amounts during the years from 1996 to 1999. The City has always recognized that these advances would be repaid from excess operating revenues of the Hall of Fame. No payment schedule has been established. Beginning with 1996, the first full year of operations, through 2000, the Hall of Fame financial statements show net losses ranging from $521,345 to $1,481,657. During 2001, the City turned over the operations of the HaII of Fame to the National Football Founda- tion and College Football Hall of Fame, Inc. (NFF). The second interim agreement authorizing the NFF to operate the Hall of Fame shows that NFF has contributed $1,900,000 to cover operating deficits of the Hall of Fame during the period prior to December 31, 2000. Under the second interim agreement, the City is obligated to provide the NFF $600,000 in 2006 and in 2007, $550,000 in 2008 and in 2009, and $500,000 in 2010 in operating subsidies. The City is also obligated to pay capital expenditures and to maintain a $1,000,000 capital reserve fund. The second interim agreement is in effect until December 31, 2010. At that time, the NFF can termi- nate their participation in the operations and the City shall reimburse the NFF the full amount of the NFF contributions towards operations during the period prior to December 31, 2000. The reimburse- ment will be made in five annual installments beginning December 31, 2005. If the NFF elects to continue their participation, then the City will resume operating the Hall of Fame as it had done from 1996 to 2001. The $1,900,000 contingent liability to the NFF is not recognized on the financial state- ments. 70 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Lawsuits There are several lawsuits pending in which the City is involved. The City is in various court pro- ceedings' phases or settlement phase on lawsuits that the City Attorney estimates that the potential damages against the City may exceed $1,200,000. D. Conduit Debt Obligation From time to time, the primary government has issued industrial revenue bonds to provide financial assistance to private-sector entities for the acquisition and construction of industrial and commercial facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private-sector entity served by the bond issuance. Neither the primary govemment, the State, nor any political subdivision thereof is obligated in any manner for the repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of December 31, 2006, there were several series of industrial revenue bonds outstanding. The aggregate principal amount payable is not available to the City. During 2006, the City approved one series of industrial revenue bonds in the amount of $8,500,000. E. Postemployment Benefits In addition to the pension benefits described below, the primary govemment provides postemploy- ment healthcare benefits, as authorized by Indiana Code 5-10-8, to retired police officers and fire- fighterswho reach normal retirement while working for the City. Currently, 94 retirees meet these eli- gibility requirements and are covered by the postemployment program. The retirees must pay the em- ployee and employer assessments. During the year ended December 31, 2006, expenditures of $554,567, net of employee assessments, were recognized for postemployment benefits. F. Pension Plans 1. Agent Multiple-Emalover and Sinole-Emalover Defined Benefit Pension Plans a. Public Employees' Retirement Fund Plan Descriotion The primary government contributes to the Indiana Public Employees' Retirement Fund (PERF), a defined benefit pension plan. PERF is an agent multiple-employer public em- ployee retirement system, which provides retirement benefits to plan members and bene- ficiaries. All full-time employees are eligible to participate in the defined benefit plan. State statutes (IC 5-10.2 and 5-10.3) govern, through the PERF Board, most requirements of the system and give the primary government authority to contribute to the plan. The PERF retire- ment benefit consists of the pension provided by employer contributions plus an annuity provided by the member's annuity savings account. The annuity savings account consists of member's contributions, set by state statute at 3% of compensation, plus the interest credited to the member's account. The employer may elect to make the contributions on behalf of the member. 71 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) PERF administers the plan and issues a publicly available financial report that includes financial statements and required supplementary information for the plan as a whole and for its participants. The report may be obtained by contacting: Public Employees' Retirement Fund Harrison Building, Room 800 143 West Market Street Indianapolis, IN 46204 Ph. (317) 233-4162 Funding Policv and Annual Pension Cost The contribution requirements of plan members for PERF are established by the Board of Trustees of PERF. The primary government's annual pension cost and related information, as provided by the actuary, is presented in this note. Information to segregate the assets/liabilities and the actuarial study figures between the primary government and the Utilities is not available. Therefore, the Net Pension Asset is considered an obligation of the primary government and is presented in the governmental activities of the financial statements and is not presented as an asset of the proprietary funds. b. 1925 Police Officers' Pension Plan Plan Description The primary government contributes to the 1925 Police Officers' Pension Plan which is a single-employer defined benefit pension plan. The plan is administered by the local pension board as authorized by state statutes (IC 36-8-6 and IC 36-8-8.5). The plan provides retire- ment, disability, and death benefits to plan members and beneficiaries. The plan was established by the plan administrator, as provided by state statute. The plan administrator does not issue a publicly available financial report that includes financial statements and required supplementary information of the plan. Fundino Policv and Annual Pension Cost The contribution requirements of plan members for the 1925 Police Officers' Pension Plan are established by state statute. The primary govemment's annual pension cost and related information as provided by the actuary is presented in this note. The Net Pension Obligation (NPO) is considered an obligation of the City and is reflected in the Statement of Net Assets. As provided by state statute, all administrative costs are paid from the fund. Contributions and benefits of this pension plan are recognized when due and payable in accordance with the terms of the plan. On-behalf revenues from the State of Indiana as shown in the financial statements approximate an equal amount paid out for benefits. c. 1937 Firefighters' Pension Plan Plan Description The primary government contributes to the 1937 Firefighters' Pension Plan which is a single- employerdefined benefit pension plan. The plan is administered by the local pension board as authorized by state statutes (IC 36-8-7 and IC 36-8-8.5). The plan provides retirement, disability, and death benefits to plan members and beneficiaries. The plan was established 72 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) by the plan administrator, as provided by state statute. The plan administrator does not issue a publicly available financial report that includes financial statements and required supple- mentary information of the plan. Funding Policv and Annual Pension Cost The contribution requirements of plan members for the 1937 Firefighters' Pension Plan are established by state statute. The primary government's annual pension cost and related information, as provided by the actuary, is presented in this note. The Net Pension Obligation (NPO) is considered an obligation of the City and is reflected in the Statement of Net Assets. As provided by state statute, all administrative costs are paid from the fund. Contributions and benefits of this pension plan are recognized when due and payable in accordance with the terms of the plan. On-behalf revenues from the State of Indiana as shown in the financial statements approximate an equal amount paid out for benefits. Actuarial Information for the Above Plans 1925 Police 1937 Officers' Firefighters' PERF Pension Pension Annual required contribution $ 1,577,300 $ 6,135,100 $ 5,384,500 Interest on net pension obligation (9,976) 1,943,600 1,707,200 Adjustment to annual required contribution 11,369 (2,354,200) (2,067,900) Annual pension cost Contributions made Increase in net pension obligation Net pension obligation, beginning of year Net pension obligation, end of year Contribution rates: City Plan Members Actuarial valuation date Actuarial cost method Amortization method Amortization period Amortization period (from date) Asset valuation method 1,578,693 5,724,500 5,023,800 1, 210,421 4,280,491 4,138, 501 368,272 1,444,009 885,299 (137,602) 32,393,974 28,454,162 $ 230,670 $ 33,837,983 $ 29,339,461 PERF 4.5 3% 07-01-05 Entry age Level percentage of projected payroll, closed 40 years 07-01-97 75% of expected actuarial value plus 25% of market value 1925 Police Officers' Pension 1,154% 6% 01-01-05 Entry age Level percentage of projected payroll, closed 30 years 01-01-05 4 year phase in of unrealized and realized capital 1937 Firefighters' Pension 1,647% 6% 01-01-05 Entry age Level percentage of projected payroll, closed 30 years 01-01-05 4 year phase in of unrealized and realized capital 73 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) 1925 Police 1937 Officers' Firefighters' Actuarial Assumptions PERF Pension Pension Investment rate of return Projected future salary increases: Total Attributed to inflation Attributed to merit/seniority Cost-of-living adjustments 7.25% 6% 6% 5% 4% 4% 4% 4% 4% 1% 0% 0% 2% 2.75%/4%* 4% *2.75% for converted members; 4% for nonconverted members Three Year Trend Information PERF Annual Percentage Net Pension Cost of APC Pension Year Ending (APC) Contributed Obligation 06-30-04 $ 940,596 98% $ (245,325} 06-30-05 9,198,152 116% (137,602) 06-30-06 1,578,693 101% 230,670 1925 Police Officers' Pension Plan Annual Percentage Net Pension Cost of APC Pension Year Ending (APC) Contributed Obligation 12-31-03 $ 7,884,400 53% $ 28,372,366 12-31-04 8,192,700 51% 32,393,974 12-31-05 5,724,500 75% 33,837,983 1937 Firefighters' Pension Plan Annual Percentage Net Pension Cost of APC Pension Year Ending (APC) Contributed Obligation 12-31-03 $ 6,898,100 58% $ 25,605,319 12-31-04 6,881,200 59% 28,454,162 12-31-05 5,023,800 82% 29,339,461 Membership in the 1925 Police Officers' Pension Plan and the 1937 Firefighters' Pension Plan at January i, 2006, was comprised of the following: 1925 Police 1937 Officers' Firefighters' Pension Pension Retires and beneficiaries currently receiving benefits Terminated employees entitled to but not yet receiving benefits Current active employees 221 207 10 74 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) d. Financial Statements for Defined Benefit Plans Statements of Fiduciary Net Assets Assets Cash and cash equivalents Receivables: Taxes Intergovernmental Total assets Liabilities Accounts payable Noncurrent liabilities: DROP payable -due within one year DROP payable -long-term Total liabilities Net Assets Held in trust for pension benefit obligations Statements of Changes in Fiduciary Net Assets: Additions Contributions: Employer State of Indiana Plan members Other Total contributions Investment income: Interest Total additions 1925 Police 1937 Officers' Firefighters' Pension Pension $ 1,851,954 $ 2,463,992 136,069 151,370 4,651 5,174 1,992,674 2,620,536 91 77 803,586 959,828 - 36,210 803,677 996,115 $ 1,188,997 $ 1,624,421 $ 2,740,595 $ 2,702,401 3,462,401 3,112,771 31,904 19,610 26,039 - 6,260,939 5,834,782 147,113 151,480 6,408,052 5,986,262 75 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Statements of Changes in Fiduciary Net Assets: Deductions Benefits and refunds paid to plan members and beneficiaries Administrative expenses Interest expense Total deductions Changes in net assets Net assets -beginning Net assets -ending 1925 Police 1937 Officers' Firefighters' Pension Pension 5,283,185 4,895,519 10,601 10,480 8,828 5,297 5,302,614 4,911,296 1,105,438 1,074,966 83,559 549,455 $ 1,188,997 $ 1,624,421 Administrative expenses are paid from property taxes and state distributions. Both are a portion of employer contributions. 2. Cost-Sharing Multiple-Employer Defined Benefit Pension Plan 1977 Police Officers' and Firefighters' Pension and Disability Fund Plan Description The primary government contributes to the 1977 Police Officers' and Firefighters' Pension and Disability Fund, acost-sharing multiple-employer defined benefit pension plan administered by the Indiana Public Employees' Retirement Plan (PERF) for all police officers and firefighters hired after April 30, 1977. State statutes (IC 36-8-8 and IC 36-8-8.5) regulate the operations of the system, including benefits, vesting and requirements for contributions by employers and by employees. Covered employees may retire at age 55 with 20 years of service. An employee with 20 years of service may leave service, but will not receive benefits until reaching age 55. The plan also provides for death and disability benefits. PERF issues a publicly available financial report that includes financial statements and required supplementary information for the plan as a whole and for its participants. That report may be obtained by contacting: Public Employees' Retirement Fund Harrison Building, Room 800 143 West Market Street Indianapolis, IN 46204 Ph. (317) 233-4162 76 CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Funding Policv and Annual Pension Costs Plan members are required to contribute 6% of the first-class police officers' and firefighters' salary and the primary government is to contribute at an actuarially determined rate. The current rate, which has not changed since the inception of the plan, is 21% of the first-class police officers' and firefighters' salary. The contribution requirements of plan members and the primary government are established by the Board of Trustees of PERF. The primary government's contri- butions tothe plan for the years ending December 31, 2006, 2005, and 2004, were $3,716,072, $3,540,711, and $3,068,934, respectively, equal to the required contributions for each year. 77 CITY OF SOUTH BEND REQUIRED SUPPLEMENTARY INFORMATION SCHEDULES OF FUNDING PROGRESS Public Emolovees' Retirement Fund ao Unfunded Actuarial AAL as a Actuarial Accrued Percentage Actuarial Value of Liability Unfunded Funded Covered of Covered Valuation Assets (AAL) AAL Ratio Payroll Payroll Date (a) (b) (a-b) (a/b) (c) ((a-b)/c) 07-01-04 07-01-05 07-01-06 $ 27,133,131 27,989,986 31,378,895 $ 27,746,346 $ (613,215) 98% 32,020,638 (4,030,652) 87% 33,798,361 (2,419,466) 93% 1925 Police Officers' Pension Plan $ 25,428,663 26,377,310 26,865,798 (2%) (15%) (9%) Unfunded Actuarial AAL as a Actuarial Accrued Percentage Actuarial Value of Liability Unfunded Funded Covered of Covered Valuation Assets (AAL) AAL Ratio Payroll Payroll Date (a) (b) (a-b) (a/b) (c) ((a-b)/c) 01-01-01 $ 375,258 $ 77,407,200 $ (77,031,942) 0.48% $ 1,385,633 (5,559%) 01-01-02 3,060,517 77,938,200 (74,877,683) 3.93% 1,304,662 (5,739%) 01-01-03 2,497,147 77,865,600 (75,368,453) 3.21% 1,125,183 (6,698%) 01-01-04 1,969,813 80,550,800 (78,580,987) 2.45% 1,050,150 (7,455%) O1-01-05 914,732 81,009,600 (80,094,868) 1.13% 1,048,933 (7,636%) 01-01-06 83,559 61,958,600 (81,875,041) 0.10% 531,733 (15,398%) 1937 Firefighters' Pension Plan Unfunded Actuarial AAL as a Actuarial Accrued Percentage Actuarial Value of Liability Unfunded Funded Covered of Covered Valuation Assets (AAL) AAL Ratio Payroll Payroll Date (a) (b) (a-b) (aPo) (c) ((a-b)/c) 01-01-01 $ 923,076 $ 70,466,700 $ (69,543,624) 1.31% $ 1,536,650 (4,526%) 01-01-02 2,821,371 70,084,800 (67,263,429) 4.03% 1,197,492 (5,617%) 01-01-03 2,443,239 68,555,100 (66,111,861) 3.56% 930,833 (7,102%) 01-01-04 2,057,175 67,862,200 (65,805,025) 3.03% 761,000 (8,593°h) 01-01-05 840,644 69,468,900 (68,628,256) 1.21% 648,183 (10,588%) O1-01-06 549,455 69,066,200 (68,516,745) 0.80% 326,833 (20,964%) CITY OF SOUTH BEND REQUIRED SUPPLEMENTARY INFORMATION SCHEDULES OF CONTRIBUTIONS FROM THE EMPLOYER AND OTHER CONTRIBUTING ENTITIES 1925 Police Officers' Pension Plan v Annual Required Percentage Year Contribution of ARC Ending (ARC) Contributed 12-31-00 $ 7,911,100 46% 12-31-O1 8,210,600 64% 12-31-02 8,548,000 36% 12-31-03 8,996,100 46% 12-31-04 9,623,400 43% 12-31-OS 6,135,100 70% 1937 Firefighters' Pension Plan Annual Required Percentage Year Contribution of ARC Ending (ARC) Contributed 12-31-00 $ 6,846,400 45% 12-31-01 7,576,500 63% 12-31-02 7,749,000 38% 12-31-03 7,921,600 50% 12-31-04 8,172,300 49% 12-31-OS 5,384,500 77% CITY OF SOUTH BEND REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULES GENERAL FUND AND MAJOR SPECIAL REVENUE FUNDS For The Year Ended December 31, 2006 General Fund Variance Actual With Finaf Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Taxes: Property $ 49,058,785 $ 48,775,466 $ 48,768,150 $ (7,316) Licenses and permits 190,690 190,690 187,523 (3,767) Intergovernmental 7,561,700 7,779,614 7,855,247 75,627 Charges for services 2,913,740 2,913,740 3,298,880 385,140 Fines and forfeits 195,000 195,000 232,837 37,837 Other 5,630,974 5,630,974 7,039,238 1,408,264 Total revenues 65,550,889 65,485,484 67,381,869 1,896,385 ~ Expenditures: 0 Current: General Government: Mayor: Personal services 666,921 664,981 642,901 22,080 Supplies 22,343 25,983 23,955 2,028 Other services and charges 100,965 108,938 97,604 11,334 Other uses 288 288 288 - City Clerk: Personal services 255,473 255,473 252,733 2,740 Supplies 8,600 8,600 6,781 1,819 Other services and charges 52,091 52,091 34,001 18,090 Other uses 136 136 136 - Common Council: Personal services 226,797 221,897 209,592 12,305 Supplies 4,553 7,053 6,247 806 Other services and charges 119,801 122,201 79,528 42,673 Other uses 265 265 265 - Controller. Personal services 1,291,508 1,291,508 1,144,398 147,110 Supplies 37,300 38,094 31,379 6,715 Other services and charges 303,606 553,608 538,740 14,868 Capital outlay 2,274,500 7,959,965 7,443,346 516,619 Other uses 3,784 3,784 784 3,000 Continued on next page CITY OF SOUTH BEND REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULES GENERAL FUND AND MAJOR SPECIAL REVENUE FUNDS For Tfie Year Ended December 31, 2006 (Continued) General Fund r-~ Expenditures (continued): Current (continued): General Government (continued): City Attorney: Personal services Supplies Other services and charges Other uses Building Maintenance: Personal services Supplies Other services and charges Other uses Human Rights: Personal services Supplies Other services and charges Other uses Neighborhood Code Enforcement: Personal services Supplies Other services and charges Other uses Code Hearing Officer: Other services and charges Total General Government Public Safety: Board of Safety: Personal services Other services and charges Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) 824,429 837,429 829,927 7,502 15,543 19,265 18,688 577 47,793 48,633 42,730 5,903 141 141 141 - 336,381 336,641 293,644 42,997 41,131 41,131 27,206 13,925 301,464 318,764 144,648 174,116 847 847 847 - 257,968 258,385 252,229 6,156 5,131 5,131 2,686 2,445 24,452 31,472 25,698 5,774 85 85 85 - 915,786 915,766 895,792 19,994 133,974 139,581 113,586 25,995 237,416 236,516 216,767 19,749 52,933 53,833 52,933 900 56,976 56,976 44,847 12,129 8,621,383 14,615,481 13,475,132 1,140,349 - 1,300 1,214 86 17,000 17,000 15, 862 1,138 Continued on next page CITY OF SOUTH BEND REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULES GENERAL FUND AND MAJOR SPECIAL REVENUE FUNDS For The Year Ended December 31, 2006 (Continued) General Fund Expenditures (continued): Current (continued): Public Safety (continued): Police Department: Personal services Supplies Other services and charges Capital outlay Other uses Communication Center: Personal services ce Supplies rv Other services and charges Capital outlay Other uses Fire Department: Personal services Supplies Other services and charges Capital outlay Other uses Weights and Measures: Other services and charges Junk Vehicle: Personal services Supplies Other services and charges Animal Control Personal services Supplies Other services and charges Capital outlay Other uses Total Public Safety Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) 22,174,932 21,796,632 21,540,377 256,255 766,724 921,457 850,890 70,567 2,235,520 2,405,838 2,149,026 256,812 350,000 426,296 371,105 55,191 1,307,074 1,307,074 1,307,074 - 1,486, 895 1,490, 895 1,470,861 20,034 4,029 4,029 2,040 1,989 30,718 30,718 27,885 2,833 8,000 8,000 7,000 1,000 74 74 74 - 19,147,083 18,881,203 18,520,195 361,008 265,600 322,416 311,274 11,142 1,225,496 1,283,022 1,199,434 83,588 1,800,000 1,800,000 1,800,000 - 1,102,963 1,102,963 1,102,963 - 43,000 86,500 43,500 43,000 50,253 50,253 47,841 2,412 3,768 3,768 2,916 852 17,657 17,657 11,866 5,791 348,461 349,461 346,549 912 44,286 66,266 64,282 2,004 72,765 75,765 66,188 9,577 3,500 3,500 2,872 628 261 261 261 52,506,059 52,452,368 51,265,549 1,186,819 Continued on next page CITY OF SOUTH BEND REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULES GENERAL FUND AND MAJOR SPECIAL REVENUE FUNDS For The Year Ended December 37, 2006 (Continued) w General Fund Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Expenditures (continued): Current (continued): Highways and Streets: Engineering and Street: Personal services 1,711,497 1,714,757 1,613,396 101,361 Supplies 539,805 557,822 519,274 32,548 Other services and charges 2,402,751 2,901,916 2,878,005 23,911 Capital outlay 1,551,000 1,561,146 1,516,831 44,315 Other uses 1,310,657 1,310,657 1,064,855 245,802 Total Highways and Streets 7,515,710 8,040,298 7,592,361 447,937 Health and Welfare: Youth Service Bureau: Other services and charges 75,000 75,000 75,000 - Culture and Recreation: Art Association: Other services and charges 65,000 65,000 65,000 - Studebaker Museum: Other services and charges 206,179 206,179 196,248 9,931 Palais Royale: Personal services 261,460 262,973 205,297 57,676 Supplies 11,500 14,967 13,497 1,470 Other services and charges 243,978 256,754 245,799 (0,955 Capital outlay 13,000 14,332 13,674 658 Other uses 534 534 534 - Morris Civic: Personal services 523,153 523,773 489,059 34,714 Supplies 25,853 27,433 24,987 2,446 Other services and charges 306,659 327,342 321,944 5,398 Other uses 742 742 742 - Total Culture and Recreation 1,658,058 1,700,029 1,576,781 123,248 Continued on next page CITY OF SOUTH BEND REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULES GENERAL FUND AND MAJOR SPECIAL REVENUE FUNDS For The Year Ended December 31, 2006 (Continued) General Fund Expenditures (continued): Current (continued): ~ Urban Development and Housing: ~ Economic Development: Other services and charges Unsafe Building: Other services and charges Total Urban Development and Housing Total expenditures Net change in fund balances Fund balances -beginning Fund balances -ending Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) 978,121 978,121 978,121 - 195,000 254,675 202,871 51,804 1,173,121 1,232,796 1,180,992 51,804 71,549,331 78,115,972 75,165,815 2,950,157 (5,998,442) (12,630,488) (7,783,946) 4,846,542 28,647,092 28,647,092 28,647,092 - $ 22,648,650 $ 16,016,604 $ 20,863,146 $ 4,846,542 Continued on next page CITY OF SOUTH BEND REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULES GENERAL FUND AND MAJOR SPECIAL REVENUE FUNDS For The Year Ended December 31, 2006 (Continued) Park and Recreation Fund ce cn Revenues: Taxes: Property Intergovernmental Charges for services Fines and forfeits Other Total revenues Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) $ 8,365,716 $ 8,363,031 $ 8,363,955 $ 924 602,061 601,809 601,078 (731) 2,691,845 2,691,845 2,495,156 (196,689) 250 250 100 (150) 68,500 68,500 144,029 75,529 11,728,372 11,725,435 11,604,318 (121,117) Expendftures: Current: Culture and Recreation: Personal services Supplies Other services and charges Other uses Capital outlay Totalexpenddures Net change in fund balances Fund balances -beginning Fund balances -ending 7,207,616 7,164,972 7,118,975 45,997 1,338,947 1,354,163 1,277,645 76,318 2,093,177 2,167,726 2,078,836 88,890 267,458 267,458 267,458 - 300,000 613,857 568,316 45,541 11,207,198 11,568,176 11,311,430 256,746 521,174 157,259 292,888 135,629 1,944,553 1,944,553 1,944,553 $ 2,465,727 $ 2,101,812 $ 2,237,441 $ 135,629 CITY OF SOUTH BEND REQUIRED SUPPLEMENTARY INFORMATION BUDGET/GAAP RECONCILIATION GENERAL FUND AND MAJOR SPECIAL REVENUE FUNDS Far the Year Ended December 31, 2006 ao The major differences between budgetary (Non-GAAP) basis and GAAP basis are: a. Revenues are recorded when received in cash (budgetary) as opposed to susceptible to accrual (GAAP). b. Expenditures are recorded when paid in cash (budgetary) as opposed to when the liability is incurred (GAAP). c. Encumbrances are recorded as expenditures for budgetary purposes when purchase orders are issued. Adjustments necessary to convert the resuRs of operations at the end of the year on a budgetary basis to a GAAP basis are as follows: Net change in fund balances (budgetary basis) Adjustments: To adjust revenues for accruals To adjust expenditures for accruals To adjust expenditures for encumbrances Net change in fund balances (GAAP basis) Park and General Recreation $ (7,783,946) $ 292,888 380,233 9,717 (528,990) 93,328 5,039,804 97,562 $ (2,892,899) $ 493,495 NONMAJOR GOVERNMENTAL FUNDS Special revenue funds Motor Vehicle Highway - To account for street construction and the operations of the street main- tenancedepartment. Financing is provided by state motor vehicle highway distributions. Recreation Nonreverting - To account for fees and related expenses from park department activities. Housing Maintenance - To account for a loan program financed by monies from the Housing Author- ity which are paid in lieu of property taxes. The loans may be for external maintenance needs of single-family rental units owned by the Housing Authority. Studebaker/Oliver Revitalization Grants - To account for expenditures related to the Studebaker and Oliver revitaliza- tion projects. Financing is provided by federal and state grants and loans and loans from other organizations. Economic Development State Grants - To account for expenditures related to projects promoting economic development. Financing is provided by state grants and loan payments. Expenditures include grants and related expenses. Community Development - To account for revenues received from the U.S. Department of Housing and Urban Development related to community improvement. Police Federal Grant - To account for expenditures relating to federal and state grants. Police State Seizure - To account for law enforcement expenditures financed by the authorized state or local agencies' sale of confiscated property. Juvenile Positive Assistance - To account for monies received from penalties paid for curfew violations. Expenditures include Drug Abuse Resistance Education and Juvenile Aid Bureau. Law Enforcement Continuing Education - To account for police fees collected to finance police officers' continuing education, training, and supplies and equipment. Build Indiana - To account for state grants used to finance various projects. General Grant - To account for grants and donations used solely for the purposes specified in the grant application or by the donor. Local Road and Street - To account for operation and maintenance of local and arterial road and street systems. Financing is provided by state gasoline tax distributions. Human Rights - Federal - To account for expenditures to prevent discrimination and to promote human rights. Financing is provided by federal grants. 87 NONMAJOR GOVERNMENTAL FUNDS (Continued) Special revenue funds (continued) East Race Waterway - To account for donations for the promotion and development of the East Race Waterway. Special Events - To account for revenues and expenditures relating to the operation of special events sponsored or organized by the City. Police Block Grants - To account for a federal grant used to finance police activities. Economic Development Commission - To account for administrative expenditures of the Economic Development Commission. Financing is provided by fees from businesses applying for Economic Development Revenue Bonds. Hazmat - To account for monies generated by the South Bend Fire Department's response to hazardous materials incidents. Funds are used to purchase, repair, or replace hazmat equipment, or for training and supplies. Indiana River Rescue - To account for expenditures related to river rescue training. Financing is provided by registration fees. COPS Block Grant II - To account for federal grants which provide financing for police activities. Regional Police Academy - To account for revenues (tuition) and expenditures (seminars, travel, lectures, and career days) related to the advancement of present and future police officers. COPS MORE Grant - To account for a COPS MORE grant which provides financing for police activities. Federal Drug Enforcement - To account for expenditures for drug enforcement. Financing is provided by distributions from the authorized federal agencies' confiscated property sale. Urban Development Action Grant - To account for economic development expenditures which are financed by federal grants and loan repayments. Leaf Collection and Removal - To account for the expenditures of a program to remove leaves from the City each fall. Financing is provided by a monthly service fee charged to all City residents. Police K-9 Unit - To account for donations for development and maintenance of the K-9 unit. Rainy Day - To account for unused and unencumbered funds that are transferred from a fund that has a tax levy. Revenues in this fund also include special distributions of county option income tax (COIT) and county economic development income tax (CEDIT). 88 NONMAJOR GOVERNMENTAL FUNDS (Continued) Slpecial revenue funds (continued) Industrial Revolving - To account for the revenue and expenditures of providing special loans to qualifying local firms. Financing was originally provided by a $5,000,000 Economic Adjustment Assistance Grant from the U.S. Department of Com- merce. Debt service funds Redevelopment Bond - Studebaker - To accumulate monies for payment of Redevelopment District general obli- gation bonds, which are serial bonds due in annual installments through 2006. Financing is to be provided by an annual property tax levy. College Football Hall of Fame Debt Service - To accumulate monies for the payment of Redevelopment Authority bonds issued to refinance bonds issued for construction of the College Football Hall of Fame. Financing is to be provided by an annual property tax levy. Redevelopment District Bond - To accumulate monies as a reserve for the payment of Redevelopment Authority bonds. EDIT Bond -Plaza Garage -Tax Exempt To accumulate monies to meet the required debt service reserve for the Series A, Economic Development Income Tax Revenue (EDIT) Bonds of 1997. EDIT Bond -Plaza Garage -Taxable To accumulate monies to meet the required debt service reserve for the Series B, Taxable Economic Development Income Tax (EDIT) Revenue Bonds of 1997. Redevelopment Authority Debt Service - To accumulate monies for the payment of Redevelopment Authority bonds issued to refinance bonds issued for construction of a parking garage facil- ity, bonds issued for central development area land acquisition and con- struction of public improvements, bonds issued to purchase the Palais Royale, bonds issued to refinance bonds issued for construction of Century Center improvements, and bonds issued for renovations to the Morris Per- forming Art Center. Erskine Commons TIF Debt Service - To account for Erskine Commons project debt retirement of the south side tax incremental financing (TIF) district. Financing is provided by transfers from the TIF south side development fund. 89 NONMAJOR GOVERNMENTAL FUNDS (Continued) South Bend Building Corporation Debt Service - To account for debt retirement of the Building Corporation§s Mortgage Bonds. Funding is provided by transfers from other City funds. TIF Erskine Village Debt Service - To account for Erskine Village project debt retirement of the south side tax incremental financing (TIF) district. Financing is provided by transfers from the TIF south side development fund. Capital proiects funds Emergency Medical Services - To account for purchases of necessary equipment for the Fire Department and Emergency Medical Services Department. Financing is provided by ambulance fees. Central Development Area Bond Proceeds - To account for expenses financed by a 2003 revenue bond issue. Professional Sports Development - To account for Hotel/Motel Tax and Professional Sports Development Tax revenues dedicated towards the College Football Hall of Fame. Based on an agreementwith the National Football Foundation (NFF), the City pays the NFF to assist with the operation and capital costs. Coveleski Stadium Capital- To account for expenditures related to the maintenance and improvement of the baseball stadium. Financing is provided by a rental paid by the semi-pro baseball team. Zoo Endowment - To account for construction projects at the City's zoo. Financing is provided by gifts and donations. Park Nonreverting Capital - To account for specific revenues used to finance capital improvements at the City parks. Cumulative Capital Development - To account for expenditures relating to the purchase or lease of capital improvements in the City. Financing is provided by a specific property tax levy. Cumulative Capital Improvement - To account for state cigarette tax distributions used for improvement projects. Economic Development Income Tax - To account for the City's share of the County Economic Development Tax. Expenditures include construction, acquisition and related costs for eco- nomicdevelopment projects. 90 NONMAJOR GOVERNMENTAL FUNDS (Continued) Capital projects funds (continued) Cumulative Sewer - Tax Incremental Financing (TIF) - Sample/Ewing - Morris Performing Art Center Capital - Tax Incremental Financing To account for financial resources for the construction or repairing of storm sewers or sewage disposal plants and sanitary sewers. To account for expenditures for public improvements in the Sample/Ewing tax incremental district. Financing is provided by property tax proceeds in excess of those attributable to the assessed value of the property in the district before redevelopment (tax increment). To accumulate monies for major repairs and capital improvements to the Morris Civic Auditorium. Financing is provided by a surcharge on ticket sales for events held at the auditorium. (TIF) -Downtown - To account for expenditures for public improvements in the central business tax incremental district. Also, operating transfers are made to debt service funds to meet debt obligations as they mature. Financing is provided by property tax proceeds in excess of those attributable to the assessed valuation of the property in the district before redevelopment. Tax Incremental Financing (TIF) -West Washington -To account for expenditures for public improvement projects in the West Washington Economic Development Area. Financing is provided by property tax proceeds in excess of those attributable to the assessed value of the property in the district before redevelopment. Redevelopment General - To account for eligible redevelopment activities in the Studebaker Corridor financed by proceeds from land sales or leases. Community Revitalization Enhancement District - To account for public improvements in the Studebaker/Oliver Community Revitalization Enhancement District. Financing is provided by income tax and gross retail tax increments in the district. Tax Incremental Financing (TIF) No. 1 -Southside Development - To account for expenditures for improvements in the southside development tax incremental district no. 1. Financing is provided by property tax pro- ceeds inexcess ofthose attributable to the assessed valuation of the prop- erty in the district before redevelopment. Tax Incremental Financing (TIF) No. 2 -Southside Development - To account for expenditures for improvements in the southside development tax incremental district no. 2. Financing is provided by property tax pro- ceeds inexcess ofthose attributable to the assessed valuation of the prop- erty in the district before redevelopment. 91 NONMAJOR GOVERNMENTAL FUNDS (Continued) Capital proiects funds (continued) Tax Incremental Financing (TIF) No. 3 - Southside Development - To account for expenditures for improvements in the southside development tax incremental district no. 3. Financing is provided by property tax pro- ceeds inexcess ofthose attributable to the assessed valuation of the prop- erty in the district before redevelopment. Redevelopment District Allocation Area Capital - To account for local public improvements in the Airport Economic Develop- - ment District. Financing is provided by a 2003 bond issue. Tax incremental Financing (TIF) -Central Medical Service Area - To account for expenditures for public improvements in the central business tax incremental district, medical service area. Financing is provided by property tax proceeds in excess ofthose attributable to the assessed valu- ation of the property in the district before redevelopment. Football Hall of Fame Capital - To account for capital expenditures for the College Football Hall of Fame. Financing was provided by a transfer from the City's Professional Sports Development Fund. This fund also accounts for the advance from the Gen- eral Fund which may be repaid from future operating surpluses. Major Moves - To account for state distributions used for road construction and other uses authorized by Indiana statute. Equipment Leasing - To account for proceeds from capital lease-purchase agreements used to finance major equipment needs of the City. Century Center 2001 Construction - To account for construction and related costs of improvements to the City's Century Center. Financing was provided by a 2001 bond issue. Morris Entertainment - To account for donations received by Morris Entertainment, Inc., a nonprofit corporation formed to solicit donations to finance improvements to the City's Morris Performing Art Center. Erskine Commons TIF Project- To account for construction and related costs of the Erskine Commons project public improvements. Financing was provided by a 2006 bond issue. South Bend Building Corporation Construction - To account for construction and renovation financed by mortgage bond issues. 92 CITY OF SOUTH BEND COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2006 Assets Cash and cash equivalents Cash with fiscal agent Irnestments Receivebtes (net of allowances for unwllectibles): Interest Taxes Accounts Intergovernmental Loans Interfund receivable: Intedund ban Interfund services provided end used Advances to other funds Property held for sale Total assets Liabilities end Fund Balances ~ Lieb6ities: W Accounts payable Aarued payroll payable ConNacts payable Interfund payable: Intedund bans Interfund serv'rcss provided and used Deferted revenue Pedortnence deposits payable Other wrtent payables Advances from otharfunds Total liabilities Fund balances: Reserved for. Encumbrances Noncurtent bans receivable Property held for resale Debt service Advances to other funds Unreserved, repoded in: Special revenue funds Debt service Tunds Capital projects funds Totalfund balances Total liab6ilies and fund balances Special Revenue Studebaker Motor Oliver Ecenomic Vehicle Recreation Housing Revitalization Development Community Police Police Highway Nonreverting Maintenance Grants State Grants Development Federal Grant State Seizure $ 1,358,556 $ 604,855 $ - $ 1,026,069 $ 327,311 $ 2,599,295 $ 1 $ 27,426 9 - - 2,203 126,418 9,256 - - - 4,221 - - - 31,702 - - 406,909 - - 241,872 - 104,231 - - - - - - 3,855,748 1,417,914 - - - - - 5,963 - - - - - 3,550 2,125,422 - - $ 1,765,474 $ 609,076 $ - $ 1,275,694 $ 4,309,477 $ 6,292,785 $ 1 $ 27,426 $ 35,220 $ 16,860 $ - $ 36,379 $ - $ 509,904 $ - $ 2,769 49,953 - - - - 32,115 - - - - - 194,233 - 18,600 - - - - - 241,672 - - - - 14,544 710 - - - 44,792 - - - - - - - 23,168 - - - _ - - - 7,337 - - 506,448 99,717 17,590 474,484 506,446 635,916 2.769 - 34,178 - - 1,517 39,038 - - - _ - 3,395,950 1,241,432 - - _ _ _ - 3,550 2,125,422 - - 1,665,757 557,308 - 601,210 402,012 2,250,977 1 24,657 1,665,757 591,466 801,210 3,603,029 5,656,869 1 24,657 $ 1,765,474 $ 609,076 $ - $ 1,275,694 $ 4,309,477 $ 6,292,785 $ i $ 27,426 Continued on next page CITY OF SOUTH BEND COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2006 (Continued) Assets Cash end cash equivalents Cash with fscel agent Investments Receivables (net of allowances for uncellectibles): Interest Tetras Axounts Intergovernmental Loans Interfund receivable: Intertund loan Interlund services provided and used Advances to other funds Property held for sale Total assets Liabilities and Fund Balances A Liabilities: Accounts payable Accrued payroll payable Contrails payable Interlund payable: Interfund bans Interfund services provided and used Defamed revenue Pertannance deposits payable Other current payablas Advances from other lands Total liablities Fund balances: Reserved tor. Encumbrances Noncurrent bans receivable Proparry held for resale Debt service Advances to other funds Unreserved, reported in: Special revenue funds Debt service funds Capital projects funtls Total fund balances Total liabilities end fund balances Special Revenue Law Juvenile Enforcement Positive Continuing Locel Road Human Rights East Race Special Assistance Education Suild Indiana General Grant and Street Federal Watervray Events $ 8,849 $ 457,741 $ 1 $ 61,905 $ 1,151,015 $ 440,372 $ 32,637 $ 9,578 - 5,048 - - - 210 - - - - - - 199,595 - - - $ 8,849 S 462,789 $ 1 $ 61,905 $ 1,350,610 S 440,582 $ 32,637 $ 9,578 $ - $ 444 $ - S - $ 28,903 S 108 $ - $ - - - - - - 807 - - - - - - 17,578 - - - 444 46,479 915 - 16,176 - - 122,378 - 662 - 8,849 444,169 1 61,905 1,161,753 439,667 31,975 9,576 8,849 462,345 1 61,905 1,304,131 439,667 32,637 9.576 $ 8,849 $ 462,789 $ 1 $ 61,805 S 1.350 610 $ 440,582 $ 32,637 $ 9,578 Continued on nerd page CITY OF SOUTH BEND COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2006 (Continued) Special Revenue Economic Regional Police Developmem Indiana COPS Block Police COPS MORE Federal Drug Assets Block Grants Commission Hazmat River Rescue Grant II Academy Grant Enforcement Cash and wsh equivalents $ - $ 25,888 $ 14,869 $ 46,512 $ 51,408 $ 67,988 $ 51,339 $ 78,923 Cash wdh fiscal agent - - _ _ _ _ - Investments _ _ _ _ _ _ _ Receivables (net of allowances for unwllectiblesj: Interest - _ _ _ _ _ _ 2(X1 Taxes _ _ _ _ _ _ _ _ Accounts _ _ _ _ _ _ _ _ Intergovernmental - - - _ _ _ 15,000 5,000 Loans - _ _ _ _ _ _ _ Interfund receivable: Interfund loan - _ _ _ _ _ _ _ Interfund Services provided and used - - - - - - - _ Advances to other fuMS - - - - - _ _ _ Property held for sale Total assets $ - $ 25,888 $ 14,889 $ 46,512 S 51,408 S 67,988 S 66,339 $ 84,123 Liabilities and Fund Balances („7'7 Liabilities: Axaums payable $ - S - $ 527 $ - $ 3,734 $ 117 $ 422 S 7,778 Accrued payroll payable - - - - - _ _ _ Contrails payable - - - - - - - _ Interfund payable: Inlerfund bens - - - - - - - - Interfundservices provided end used - - - - - - - - Defemedrevenue - - - - - _ _ _ Perrormance deposits payable - - - - - - - - Other cunent payebles - - - - - - - - Advancesfrom other funds Total liablities 527 3,734 117 422 7,778 Fwd balances: Reserved for. Enwmbrancea - - 263 - - - - 3,812 Noncumenl bans receivable - - - - - - - - Property held for resale - - - - - - - - Debt service - - - - - _ _ _ Advances to other funds - - - - - - - - Unreserved, reported in: Special revenue funds - 25,888 14,099 46,512 47,674 67,871 65,917 72,533 Debt service funds - - - - - - - - Cap'sal projects funds Total fund balances 25.888 14,362 46,512 47,674 67,871 65,917 76,345 Total liabilities and fund balancea $ - $ 25.888 $ 14,889 $ 46,512 $ 51,408 $ 67.988 $ 66,339 S 84,123 Continued on next page CITY OF SOUTH BEND COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2006 (Continued) Special Revenue Debt Service Funds Urban Leaf Redevelopment Collage Football Development Collection Police Industrial Bond- Hall of Fame Assets AMion Grant and Removal K-9 Unit Rainy Day Revolvin0 Total Studebaker Debt Service Cash and rash equivalents $ 3,740,921 $ 415,862 $ 2,364 $ 2,229,289 $ 1,991,292 $ 16,623,306 $ - S 346,618 Cash with fiscal agent - - - - 131,900 131,900 - - Investments - - - - - - - - Receivables (net of allowances for uncellectibles): Interest - - - - 14,463 152,551 - 555 Taxes - - - - - - - 87,434 Accounts fi3,300 36,727 - - - 141,206 - - Intergovemmental - - - - - 972,607 - 2,969 Loans - - - - 3,966,144 9,259,806 - - Interfund receivable: Interfund ban - - - - - - - - Interfund services provided and used - - - - - 5,963 - - Advances to other funds - - - - 506,4473 506,446 - - Property held for sale 339,300 2.466,272 Total assets $ 3,604,221 $ 452,589 $ 2,384 $ 2,229,269 $ 6,969,547 $ 30,462,061 $ - $ 439,796 Liabilities and Fund Balances p1 Liabilities: Accounts payable $ - $ - S - S - $ 1,606 $ 646,991 $ - $ - Accrued payroll payable - - - - - 62,675 - - Contreds payable - - - - - 230,409 - - Interfund payable: Interfund bans - - - - - 241,672 7,626 - Interfund services provided and used - 7,935 - - 5,963 73,944 - - Defened reverwe - - - - - - - 90,423 Performance deposits payable - - - - - 23,166 - - Otharwrtentpayables - - - - - 7,337 - - Advancesfrom other funds 506,446 - Total liablities 7,935 7,769 1,613,044 7,628 90,423 Fund balances: Reserved tor. Encumbrances - - - - - 220.024 - - NoneurreM bans receivable - - - - 3,543,079 6,160,461 - - Property held for resale - - - - 339,300 2,468,272 - - Debtservice - - - - - - - 349,373 Advances to otherlands - - - - 506,448 506,446 - - Unreserved, rapoded in: Special revenue funds 3,604,221 444,fi54 2,384 2,229,269 2,572,951 17,273,812 - - Debt serv'nx3 funds - - - - - - (7626) - Capitalprojects funds - - Total fund balances 3,804,221 444,654 2,364 2,229,289 6,961,778 28,649,017 (7,828) 349,373 Total liabilities and fund balances $ 3,804,221 $ 452,589 $ 2,384 $ 2,229,289 $ 6,969,547 $ 30,462,061 $ - $ 439,796 Continued on next page CITY OF SOUTH BEND COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2006 (Continued) Debt Service Funds Erskine South Bend EDR Bond- EDR Bond- Redevelopment Commons Building TIF Erskine Redevelopment Plaza Garage Plaza Garage Autlwnty TIF Debt Corporation Village Assets District Bond Tax Exempt Taxable Debt Service Service Debt Service Debt Service Total Cash and cash equivalents $ 2,688,063 $ 34,806 $ 37,369 $ 201,968 $ 310,026 S 1,000,738 $ 840,043 $ 5,461,831 Cash wkh fiscal agent - - - - - - - - Investrnents - - - 1,787,219 - - - 1,787,219 Receivables (net of allowances for uncollectibles): Interest - - - 773 - - 3,216 4,544 Taxes - - - - - - - 87,434 Accounts _ _ _ _ _ _ _ _ Intergovernmental - - - - - - - 2,989 Loans - - - - - - - - Intertund receivable: Interfund ban - - - - - - - - Intertund services provided and used - - - - - - - - Advances to other funds - - - - - - - - Property held for sale - Total assets $ 2,688,063 $ 34,606 $ 37,369 $ 1,969,960 $ 310,026 $ 1,0110,738 $ 643,259 $ 7,344,017 Liabilities and Fund Balances ~1 Liabildies: Accounts payable $ - $ 31,398 $ 31,398 $ - $ - $ - $ - fi2,796 Accrued payroll payable - - - - - - - - Contracls payable - - - - - - - - MterfurMpayable: - Interlund loans - - - - - - - 7,828 Intertund services provided and used - - - - - - - - Defamed reverwe - - - - - - - 90,423 Pertortnance deposits payable - - - - - - - - Other wment payables - - - - - - - - Advancesfrom other funds Total liabilties 31,398 31.398 161,047 Fund balances: Reserved for. Enwmbrences - - - - - - - - Nonwmant loans receivable - - - - - - - - Praparty held for resale - - - - - - - - Oebtservice 2,680,063 3,408 5,971 1,969,960 310,026 1,OD0,738 843,259 7,190,798 Advances to other funds - - - - - - - Unreserved reported in: - Special revenue funds - - - - - - - - Debt service funds - - - - - - - (7,828) Capital projaMS funds Total fund balances 2,688,063 3,408 5,971 1,989,960 310,026 1,000,738 843,259 7,182,970 Total liabilities end fund balances $ 2,688,063 $ 34,806 $ 37,369 $ 1,989 960 $ 310,026 $ 1,000,738 S 843,259 $ 7,344,017 Continued on next page CITY OF SOUTH BEND COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2006 (Continued) Assets Cash and cash equivalents Cash with fiscal agent Investments Receivables (net of allowances for uncolleilibles): Interest Tazes AcccuMs Intergovernmental Loans Interfund receivable: Interfund ben Intertund services provided and used Advances to other funds Property held for sale Total assets Liabilities end Fund Balances ~ Liabilities: Accounts payable Accrued payroll payable Contrails payable Interfund payable: Interfund bans IMerfund services provided and used Deferted revenue Performance deposits payable Other curteM payables Advances from other funds Total liabilities Fund balances: Reserved for. Encumbrances Nonwrtent bans receivable Property held for resale Debt service Advances to other funds Unreserved, reported in: Special revenue funds Debt service funds Capital projects funds Total fund balances Total liabilities and fund balances Capital Proieils Central Emergency Development Professional Coveleski Park Cumulative Cumulative Medical Area Bond Sports Stadium Zoo Nonrevening Capital Capital Services Proceeds Development Capital Endowment Capital Development Improvement $ 1,105,976 $ 5,815,445 $ 347,065 $ 236,410 $ 20,256 $ 520,911 $ 2,171,463 $ 239,540 - - 33,4% - - - 102,735 - 706,176 - - - - - - - - - - - - - 3,512 33,760 463,500 $ 1,612,154 $ 6,296,945 $ 380,561 $ 238,410 $ 20,256 $ 520,911 $ 2,277,710 $ 273,300 $ 61,529 $ 3,693 $ - $ - $ - $ 15,847 $ 33,572 $ - - -100,694 - - - - - - - _ _ - 106,247 33,760 61,529 104,567 15,647 139,819 33,760 96,046 180,367 27,819 156 - 7,432 169,819 - - 463,500 - - - - - - 1,652,577 5,530,471 352,742 236,254 20.256 497,632 1,%6,072 239,540 1,750,625 6.194,356 360,561 238,410 20,256 505,064 2,137,891 239,540 $ 1,612,154 $ 6,296,945 $ 360,561 $ 236,410 $ 20,256 $ 520,911 $ 2,277,710 $ 273,300 Continued on next page CITY OF SOUTH BEND COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2006 (Continued) Ecenomic Morris Community Development performing RevBalization Income Cumulative TIF- Arts Center TIF TIF-West Redevelopment Enhancement Assets Tax Sewer Sample/Ewing Capital Downtown Washington General District Cash end cash equivalents $ 2,546,645 $ 80,224 $ 553,061 $ 315,926 $ 5,304,814 $ 513,709 $ 115,540 $ 2,247,471 Cash with fiscal agent - - - - 16,138 - - - Investmants - - _ _ _ _ _ _ Receivables (net of allowances for uncollectibles): Interest - _ _ _ _ _ _ 17 Taxes - - - - 171,084 79,663 - - Accoums - - _ _ _ _ _ _ Intergovernmental - - _ _ _ _ _ _ Loans - - - - - _ _ _ Interfund receivable: Intarfund ban - - _ _ _ _ - 241,872 InteAund services provided and used - - - - - - - - Advances to other funds - _ _ _ _ _ _ _ Property heltl for sale 76,256 1,025,628 2,296,336 264,690 105,000 Total assets $ 2,623,101 $ 8D.224 $ 1,576,669 $ 315,928 S 7,790,372 $ 876,262 $ 115,540 $ 2,594,360 Llabilitias end Fund Balances ~ Liabil8ies: Accounts payable $ - $ - $ 24,082 $ 950 $ 64,529 $ 3,493 $ - $ - Accruedpayroll payable - - - - - - - - Contrects payable 23,379 - - - 42,224 - - 207,457 Inlerlund payable: Interfund bans - - - - _ _ _ _ Interfund services provided end used - - - - 3,231 - - - Deferred revenue - - - - 171,084 79,863 - - Pertonnance deposits payable - - 12,735 - 87,854 - - - Othercunentpayables - - - - - - - - Advances Nom other funds Total liabililias 23,379 36,617 950 368,922 83,35fi 287,457 Fund balances: Reserved tor. Encumbrances 634,759 - 54,433 14,098 71,914 94,218 - 113,810 NCncument bans receivable - - - - - - - - Proparty held for resale 76,256 - 1,025,628 - 2,298,336 284,690 - 105,000 Debt service - - - - - - - - Advances to other funds - - - - - - - - Unreserved, reported in: Spatial revenue tunds - - - - - - - - Debtservice funds - - - - - - - - Capital projects funds 1,888,707 80,224 461,811 300,880 5,051,200 415,998 115,540 2,068,093 Total fund balances 2,599,722 80.224 1,541,872 314,978 7,421450 794,906 115,540 2,306,903 Total liabililias and fund balances $ 2,623,101 $ 80,224 $ 1,578,669 $ 315,928 $ 7,790,372 $ 878,262 $ 115,540 $ 2,594,360 Continued on next page CITY OF SOUTH BEND COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2006 (Continued) ssets Cash end cash equivalents Cash with fiscal agent IrnastrneMs Receivables (net of allowances for uncellectibles): Interest Taxes AxouMs Intargovemmental Loans Interfund receivable: Interlund loan Interfund services provided end used Advances to other funds Property held for sale Total assets Liabilities and Fund Balances I--r O Liabilities: O Accounts payable Accrued payroll payable Contrects payable Intedund payable: Intedund bans Intedund services provided end used DefeRBd reVerxle Pedonnance deposits payable Other wrtent payables Advances ham other funds Total liabilities Fund balances: Reserved for. Enwmbrances Nonwrtent bans receivable Property held for resale Debt service Advances to other funds Unreserved, reported in: Special revenue funds Debt service funds Capital projects funds Total fund balances Total liabilities end fund balances Redevebpment TIF-Central TIF No. 1 - TIF No. 2- TIF No. 3 - District Medical Football Southsitle Southside Soulhside Albcetion Service ~ Hall of Fame Major Development Development Development Area Capital Area Capital Moves $ 70,407 $ 3,132 $ 305,399 $ 3,380,960 $ 845,024 $ 500,000 $ 499,169 - - - - - - 12,387,500 - - - - - - 115,531 912 - - - 135,002 - - - - - 673,117 - $ 71,319 $ 3,132 $ 3D5,399 $ 4,054,077 $ 980,026 $ 500,000 $ 13,002,200 $ 853 $ - $ - $ 1,604 $ 1,331 $ - $ - 11,775 - - 1,208,287 - - - 912 - - - 135,002 - - - - - - - 1,750,000 13,640 1,209,891 136,333 1,750,000 - - - 1,401,093 - - - - - 673,117 - - 57,679 3,132 305,399 769,978 843,693 (1,250,000) 13,002,200 57,879 3,132 3D5,399 2,044,186 843,693 (1,250,000) 13.002,200 S 71,319 $ 3,132 $ 305,399 $ 4,054,077 $ 980,026 $ 500,000 $ 13,002,200 Continued on nezl page CRY OF SOUTH BEND COMBINING BALANCE SHEET NONMgJOR GOVERNMENTAL FUNDS December 31, 2006 (Continued) Capital Projects South Bend Total Century Erskine Building Nonmajor Equipment Center 2001 Morcis Commons Corporation Governmental Assets leasing Construction Entertainment TIF Project Construction Total Funds Cash and cash equivalents $ 526,123 $ - $ 97,605 $ 472,156 $ 20,825 $ 26,857,460 $ 51,142,597 Cash with fiscelagent - - - - - 16,13$ 146,036 Investments - - - - - 12,367,500 14,174,719 Receivables (net of allowances for uncollectibles): Interest - - - - - 115,546 272,643 Taxes - - - - - 523,092 610,526 Accounts - - - - - 706,176 847,384 Intergovernmental - - - - - 37,272 1,012,866 Loans - - - - - - 9,259,606 Intertund receivable: Intertund ban - - - - - 241,872 241,872 Interfund services provided and used - - 1,256 - - 1,258 7,221 Advances to other funds - - - - - - 506,448 Property held for sale - 4,946,527 7.414,799 Total assets $ 526,123 $ - $ 98,863 $ 472,156 $ 20.825 $ 47,832,843 $ 85,638,921 Liabilities and Fund Balances N O Liabilhies: 1--r Accounts payable S - $ - $ 191 $ - $ - $ 211,974 $ 921,761 Accrued payroll payable - - - - - - 82,675 Contrails payable - - - 239,293 - 1,913,109 2,143,516 Intedund payable: Interfund bans - - - - - - 249,700 Intedund services provided and used - - - 66,710 - 69,941 143,665 Deferred revenue - - - - - 526,866 617.291 Pedorcnance deposits payable - - - - - 100,589 123,757 Other wrrent payables - - - - - - 7,337 Advances from other funds 1,750,000 2,256,446 Total liabilities 191 306,003 4,572,461 6,546,572 Fund balances: Reserved for. Enwmbrances - - - - - 2,867,966 3,066,010 NoncumaM bans receivable - - - - - - 8,160,461 Propery held farresale - - - - - 4,946,527 7,414,799 Debt service - - - - - - 7,190,798 Advances to otherfunds - - - - - - 506,448 Unreserved, reported in: Special revenue funds - - - - - - 17,273,612 Debt service funds - - - - - - (7,626) Capital projects funds 526,123 - 96,672 166,153 20,625 35,445,849 35,445,649 Totalfund balances 526,123 96,672 166,153 20,625 43,260,362 79,092,349 Total liabilities and fund balances $ 526,123 $ - $ 96,863 $ 472,156 $ 20,625 $ 47,832,643 $ 65,636,921 CITY OF SOUTH BEND COMBINING STATEMENT OF REVENUES, EXPENDITURES AND OTHER CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2006 t--r O tJ Revenues: Taxes: Property County economic development income Professional spode development Community revitalization enhancement district Intergovernmental Charges for services Fines and forfeits Interest Donations Other Total revenues Expenditures: Current General government Public safety Highways and streets Economic developmem Culture end recreation Debt service: Principal Imeresl end fiscal charges Debt issuance costs Capital outlay: General government Public safety Economic development Culture and recreation Total expenditures Excess (deficiency) of revenues over (uMer) expendtures Other financing sources (uses): Transfers in Transfers out Premium on debt issuance Debt issuance Issuance of refunding bonds Payment to refunded bond escrow agent Total other financing sources end uses Net change in fund balances Fund balances -beginning Funtl balances -ending Studebaker Motor Oliver Economic Vehicle Recreation Housing RevNalization Development Community Police Police Highway Nonreverting Maintenance Grants State Gents Development Federal Grant State Seizure S - $ - S - $ - $ - S - $ - $ - 4,091,279 - - 866,101 - 3,440,492 50,935 - 8,940 953,367 - - - 361,691 - - - - - - - - - 50,632 4,585 11,183 - 25,581 760,363 71,216 - - 6,895 38,052 326,045 4,111,699 1,002,602 693,682 160,363 4,201,644 50,935 50,832 - - - - - - 50,935 68,579 3,188,222 - - - - - - - - - - 1,622,879 221,701 7,026,003 - - - 779,924 - - - - - - - - - - 122,747 - - - - - - - 52,148 - - - 3,188,222 779,924 1,622,879 396,596 7.026,003 50,935 68,579 923,477 222,678 (729.197) (236,233) (2,824,359) (17,947) 260,000 - - - - 1,290,756 - - - - (100,000) - - - - - - _ _ _ 3,272,000 - - 260,000 (100,000) 4,512,756 1,183,477 222,670 (100,000) (729,197) (236,233) 1,688,397 - (17,947) 482,280 368,808 100,000 1,530,407 4,039,262 3.968,472 1 42,604 $ 1,665,757 $ 591,486 $ - $ 801,210 $ 3,803,029 $ 5,656,869 $ 1 $ 24,657 Continued on next page CITY OF SOUTH BEND COMBINING STATEMENT OF REVENUER, EXPENDRURES AND OTHER CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2006 (Continued) t--r O W Revenues: Taxes: Property County ecenomic development income Professional sports development Community revilal'izetion enhancement district Intergovernmental Charges for services Fines and fodeits Interest Donations Other Total revenues Expenditures: Cunent: General government Public safety Highways and streets Economic development Culture end recreation Dabl service: Pdncipal Interest and fiscal charges Debt issuance vests Capdal outlay: General government Public safety Ecenomie development Culture and recreation Total expend8ures Excess (deficienuy) of revenues over (under) expenditures Other financing sources (uses): Trensfers in Trensfers out Premium on debt Issuance Debt issuance Issuance of refunding bonds Payment to refunded bond escrow agent Total other fnancing sources and uses Net change in fund balances Fund balances -beginning Fund balances -ending Law Juvenile Enforcement Positive Continuing Local Road Human Rights East Rece Special Assistance Education Build Indiana General Grant and Street Federal Waterway Events - - 7,015 - 3,013,266 147,864 - - - 227,385 - - - - 1,348 - 635 160,717 - - - - - - - 3,698 - - 52,077 10,991 836 210 - 894 - - - 12,292 - - 480 1,367 3,759 3,914 1,115 394,061 7,015 3,065,343 174,906 2,184 4,124 - - - 185,353 - - 4,162 217,367 7,015 - - - - - - - - - 3,468,415 - - - - - - - - 16,1% 5,182 4,162 217,367 7,015 3,468,415 185,353 16,196 5,162 (3,047) 176,694 (403,072) (10,447) (14,012) (1,058) (3,047) 176,694 - - (403,072) (10,447) (14,012) (1,058) 11 896 285,651 1 61,905 1,707,203 450,114 46,649 10,636 , $ 8,849 $ 462,345 $ 1 $ 61,905 $ 1,304,131 $ 439,667 $ 32,637 $ 9,578 Continued on next page CITY OF SOUTH BEND COMBINING STATEMENT OF REVENUES, EXPENDITURES AND OTHER CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Endetl December 31, 2006 {Continued) I~ O Revenues: Taxes: Property County ewnomic development income Professional sports development Community rev@alization enhancement district IMergovemmental Charges for services Fines and forfeits Interest Donations Other Total revenues Expendihaes: Curcent: General government Public safety Highways and streets Economic development culture and recreation Debt service: Principal Interest and fiscal charges Debt issuance vests Capital outWy: Geneal govemment Public safety Economic development Culture and recreation Total expenditures Excess (deficiency) of revenues over (under) expend6ures Other financing sources (uses): Transfers in Transfers out Premium on debt issuance Debt issuance Issuance of refunding bonds Payment to refunded boM escrow agent Total other financing sources end uses Net change in fund balances Fund balances -beginning Fund balances -ending Special Revenue Economic Regional Police Development Indiana COPS Block Police COPS MORE Federal Drug Block Grants Commission Hazmat River Reswe Grant II Awdemv Grant Enforcement $ - 5 - $ - S - $ - $ - S - $ - - - - - 121,297 - - 51,170 - 2,400 9,240 fi1,600 - 4D, 199 - - 1,256 - - - - 7,561 - 2,596 - - - - - - 5,665 - 190 43,120 7,093 1,256 2,400 9,240 61,600 121,487 41,760 46,605 60,859 72,105 - 5,534 52,503 113,626 40,160 5,999 96,286 72,105 5,534 52,503 113,628 40160 5,999 96,286 (70,849) 2,400 3,706 9,097 7,859 1,600 42,806 (35,427) (70,849) 2,400 3,706 9,097 7,659 1,600 42,806 (35,427) 70,849 23,488 10,656 37,415 39,615 66,271 23,111 111,772 $ - $ 25,666 $ 14,362 $ 46,512 $ 47,674 $ 67,871 $ 65,917 $ 76,345 Continued on next page CIT/ OF SOUTH BEND COMBINING STATEMENT OF REVENUES, EXPENDRURES AND OTHER CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2006 (Continued) I~ O (J1 Revenues: Taxes: Property County economic development income Professional sports development Community revitalization enhancement district Intergovernmental Charges for services Fines and fodeits Interest Donations Other Total revenues Expend6ures: Cunent General govemment Public safety Highways and streets Economic development Culture and recreation Debt service: Principal Interest and fiscal charges Debt issuance costs Capital outlay: General govemment Public safety Ewnomic development Culture and recreation Total expenditures Excess (defciency) of revenues over (under) expenditures Other financing sources (uses): Trensfers In Transfers out Premium on debt issuance Debt issuance Issuance of refunding bolls PaymaM to refunded bond escrow agent Total other financing sources and uses Net change in fund balances Fund balances -beginning Fund balances -ending Special Revenue Debt Service Funds Urban Leaf Redevelopment Collage Football Development Collection Police Industrial Bond - Hall of Fame Action Grent and Removal K-9 Unit Rainy Day Revolving Total Studebaker Debt Service $ - $ - S - S - $ - S - $ - $ 699,472 - - - - - 11,791,419 - 61,009 - 433,095 - - - 2,099,455 - - - - - - - 217,984 - - 155,290 - - 105,664 263,587 690,694 - 6,407 - - 1,476 - - 20,347 - - 238,600 267,599 939,314 394,090 433,065 1,476 105,664 551,166 15,953,213 966,666 - 114,490 - - - 299,843 - - - - 1,507 - - 735,780 - - - - - - - 6,656,637 - - - - - - 599,050 9,469,633 - - - - - - - 801,302 - - - - - - - 122,747 320,000 740,000 - - - - - 52,148 8,160 660,275 114,490 1,507 599,050 18,138,090 328,160 1,400,275 394,090 318,595 (31) 105,664 (47,864) (2,184,877) (328,160) (433,387) _ _ - _ - 1,550,756 - - - (160,000) - - - (260,000) - - _ - - - 3,222,000 - - (160,000) 4,512,756 - 394,090 158,595 (31) 105,664 (47,864) 2,327,879 (326,160) (433,387) 3,410,131 266,059 2,415 2,123,625 7,009,642 26,321,138 320,332 782,760 $ 3604,221 $ 444,654 $ 2,384 $ 2,229,269 $ 6,961,778 $ 28,649,017 $ (7,828) $ 349,373 Continued on next page CITY OF SOUTH BEND COMBINING STATEMENT OF REVENUES, EXPENDITURES AND OTHER CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Entled December 31, 2006 (Continued) Debt Service Funds Erskine South Band EDR Bond- EDfi Bond- Redevelopment Commons Building TIF Erskine Redevelopment Plaza Garage Plaza Garega Authority TIF Debt Corporation Village District Bond Tax Exempt Taxable Debf Service Service Debt Service Debt Service Total Revenues: Taxes: Property $ - S - $ - $ - $ - $ - $ - $ 899,472 County economic development inwme - - - - - - - - Professional spode development - - - - - - - - Community revitalization enhancement district - - - - - - - - Intergovernmental - - - _ - - - 61,009 Charges for services - - - - - - - - Finesand forfeits - - - - - - - - Interest 92,941 20,739 20,102 87,704 12,732 39,746 41,986 322,357 Donations - - - - - - - - Other Total revenues 92.941 20,739 20.102 87,704 12,732 39,746 41,986 1.282,838 Expantlitures: Current: General government - - - - - - - - Publicsafety - - - - - - - - Highwaysand streets - - - - - - - - EconomicdevelopmeM - - - - - - - - F--r Culture and recreation - - - - - - - - ~ Debt service: Principal - - - 1,395,000 - 1,656,833 - 4,111,933 Interest and fiscal charges - - - 886,586 70,206 1,282,111 350,120 3,257,458 Debt issuance costs - - - - - - - - Capital outlay: General government - 34,598 34,598 - - - - 69,198 Public safety - - - - - - - - EconomicdevelopmeM - - - - - - - - Cunure ant recreation Total expenditures 34,598 34,598 2,281,586 70,208 2.939,044 350,120 7,438,587 Excess (deficiency) of revenues over (under)expeMitures 92,941 (13,859) (14,496) (2,193,882) (57,474) (2,899,298) (308,134) (6,155,749) Other financing sources (uses): Trensfers in 602,931 - - 2,279,449 367,500 2,952,422 109,248 6,311,550 Trensfers out (92,941) (20,739) (20,102) - - - - (133,782) Premium on debt issuance - - - - - - - - Debt issuance - - - - - - - - Issuence of refunding bonds - - - - - - - - Payment to refunded bond escrow agent (508,759) (489,381) - - (998,140) Total other financing sources and uses 509,990 (529,498) (509,483) 2,279,449 367,500 2 952,422 109,248 5,179,628 Nel change in fund balances 602,931 (543,357) (523,978) 85,567 310,026 53,124 (198,886) (876,121) Fund balances -beginning 2,085,132 546,765 529,950 1,904,393 - 947.614 7,042,145 8,159,091 Fund balances-ending S 2,688,063 $ 3,408 $ 5,971 $ 1,969,960 S 370,028 $ 1,000,738 $ 843,259 $ 7,182,970 Continued on next page CITY OF SOUTH BEND COMBINING STATEMENT OF REVENUES, EXPENDITURES AND OTHER CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2006 (Continued) N O Revenues: Taxes: Property County economic development Income Professional sports development Community revitalization enhancement district Intergovernmental Charges for services Fines end forfeits Interest Donations Other Total revenues Expenditures: Curcent: General govemment Public safety Highways and streets Economic development Culture and recreation Debt service: Principal Interest and fiscal charges Debt issuance costs Capital outlay: General govemment Public safety Economic development Culture and recreation Total expenditures Excess (deficienq) d revenues over (under)expendftures Other fnencing sources (uses): Transfers in Transfers out Premium on debt issuance Debt issuance Issuance of refunding borMs Payment to refunded bond escrow agent Total other financing sources end uses Net change in fund balances Fund balances -beginning Fund balances -ending Central Emergency Development Professional Coveleski Park Cumulative Cumuative Medical Area Bond Sports Stadium Zoo Nonreverting Capital Capital Services Proceeds Development Capital Endowment Capital Development Improvement $ - $ - $ - $ - $ - $ - $ 1,054,963 $ - - - 336,261 - - - - - - - 354,943 - - - 75,815 365,077 1,535,244 - - - - 222,986 - - 37,833 276,554 21,241 4,704 335 5,000 70,351 - 25 - - - 4,526 - - - 379,896 5,206 200,000 1,952,998 278,554 712,465 4,704 4.661 233,192 1,201,129 565,077 - - 660,483 - - - - - 155,561 - - - - - 391,779 - 8,621 - - - - - 59,070 - _ _ _ _ _ - 606,619 - 916,803 - - - - - - - - i,t%,763 - - - - - - 18,973 155,573 1,081,005 1,1%,763 660,463 16.973 155,573 1,059,466 671,993 (916,209) 31,962 (14,269) 4,861 77,619 141,661 585,077 (250,000) - (500,000) - - - - (594,000) (250,000) (500,000) - - - (594,000) 621,993 (918,209) (468,018) (14,269) 4,861 77,619 14t,66t (8,923) 1,128,632 7,112,567 848,579 252,679 15,395 427,445 1,9%,230 248,463 $ 1,750,625 $ 6,194,358 $ 380,561 $ 238,410 $ 20,256 $ 505,064 $ 2,137,891 $ 239,540 Continued on next page CITY OF SOUTH BEND COMBINING STATEMENT OF REVENUES, EXPENDRURES AND OTHER CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2006 (Continued) r O DO Revenues; Taxes: Property County economic development inwme Professional sports development Community revdalization enhancement district Intergovernmental Charges for services Fines and forfeits Interest Donations Other Total revenues Ezpentlitures: Current: General government Public safety Highways and streets Economic development Culture and recreation Debt service: Principal Interest end fiscal charges Debt issuance costs Capital outlay: General government Public safety Economic development Culture and recreation Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers in Tansters out Premium on debt Issuance Debt issuance Issuance of refunding bonds Payment to refunded bond escrow agent Total other financing sources and uses Net change in fund balances Fund balances -beginning Fund balances -ending Capital Projects Economic Mortis Community Development Performing Reviteliration Income Cumulative TIF- Arts Center 71F TIF-West Redevelopment Enhancement Tax Sewer SamplelEwing Capital Downtown Washington General Distdct $ - $ - $ 732,356 $ - $ 3,283,075 $ 255,510 $ - $ - 4,013,475 - - - - - - - - - - - - - - 1,000,000 - - - 104,738 196,516 - - - 33,450 - 8,191 7,318 135,382 12,072 5,367 70,171 138,578 2,535 147,851 - - 4,165,503 743,082 112,056 3,764,824 267,562 5,367 1,070,171 - - - 282,621 - - - 740,000 - 375,000 - 252,598 - - - 605,235 - 231,393 - 901,527 - - 10,392 112,950 - - - - - - - 288,402 - - - - - - - - - 112,096 - 681,046 229,687 - 395,622 47,008 746 587 1 718,489 47,008 2,117.792 229,667 406,014 , , 2.438,916 24,593 65,048 1,647,032 37,695 5,367 664,157 40,841 - - - 57,628 - - - (1,789,929) - - - (771,010) - - - 46,521 - - - - - - - 7,440,OD0 - - - - - - - (7,373,571) - - - (1,636,1381 - (713,162) - - 802,778 - 24,593 65,048 933,850 37,895 5,367 664,157 1,796,844 80,224 1,517,279 249,930 6,487,600 757.011 110,173 1,642,746 $ 2,599,722 $ 80,224 $ 1,541,872 $ 314,978 $ 7,421,450 $ 794,906 S 115,540 $ 2,306,903 Continued on next page CRY OF SOUTH BEND COMBINING STATEMENT OF REVENUES, EXPENDITURES AND OTHER CHANGES IN FUND BAIANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 20% (Continued) 1--r O Revenues: Taxes: Property County economic development inceme Professional sports development Community revRatiution enhancement district Intergovemmemal Charges for services Fines and forfeits Interest Donations Other Total revenues Ezpend'4ures: Current: General government Public safety Highways end streets Ecenomlc development Culture and recreation Debt service: Principal Interest end fiscal charges Debt issuance costs Capital outlay: General government Public safety Economic development Cuture and recreation Total expenditures Excess (deficiency) M revenues over (under) expeMitures Other financing sources (uses): Transfers In Transfers out Premium on debt issuance Debt issuance Issuance of refunding bolls Payment to refunded bond escrow agent Total other financing sources and uses Net change in fund batancas Fund balances -beginning Fund balances -ending Capital Projects Redevelopment TIF-Central TIF No. 1 - TIF No. 2 - TIF No. 3 - - District Medical Foctball Southside Soulhside Southside Allocation Service Hall of Fame Major Development Development Development Area Capital Area Capital Moves $ 28,565 $ 2,585 $ 305,399 $ - $ 333,585 $ - - - 177,528 37,495 9,626 - - - - 36,191 2,565 305,399 177,528 371,060 _ 5,863 - 5,863 _ $ _ - 12,823,151 - 179,049 _ 13,002,200 2,749,800 651,331 - 2,749,800 651,331 32,328 2,585 305,399 (2,572,272) (280,251) - 13,002,200 - _ _ _ _ 500,000 - - - (109,240) - - (1,101) - (109,248) 490,099 32,32$ 2,505 1%,151 (2,572,272) (280,251) 49$,099 13,002,2D0 25,351 547 109,248 5,416,450 1,123,944 (1,740,899) $ 57,679 $ 3,132 $ 305,399 $ 2,844,186 $ 843,693 $ (1,250,000) $ 13,002,200 Continued on next page CITY OF SOUTH BEND COMBINING STATEMENT OF REVENUES, EXPENDn"URES AND OTHER CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For the Year Ended December 31, 2006 (Continued) I--r t--r O Revenues: Taxes: Property County ewnomic development income Professional sports development Community revi[al'vation enhancement dishict Intergovernmental Charges for services Fines and fodeits Interest Donations Other Total revenues Expenditures: Current General government Public safety Highways end sUeets Economic development Cukure and recreation Debt service: Principal Interest end fiscal charges Debt issuance costs Capital outlay: General government Public safety Ewnomic development Culture end recreation Total expenditures Excess (deficiency) of revenues over (under) expend8ures Other financing sources (uses): Transfers in Transfers out Premium on debt issuance Debt issuance Issuance of refunding bonds Payment to refunded bond escrow agent Total other financing sources end uses Net change in fund balances Fund balances -beginning Fund balances -ending Capital Projects _ South Bend Total Century Erskine Building Nonmajor Equipment Center 2001 Monis Commons Corporation Governmental Leasing Construction Entertainment TIF Project Construction Total Funds $ - $ - $ - $ - $ - $ 5,996,038 $ 6,895,510 - - - - - 4,013,475 4,013,475 - - - - - 336,281 336,281 - - - - - 1,000,000 1,000,000 - - - - - 13,636,966 25,491,414 - - - - - 2,061,484 4,160,939 - - - - - - 211,984 28,671 105 471 54,266 5,965 1,173,519 2,386,570 - - 106,364 - - 112,915 133,262 _ _ - 883,692 1.823.006 28,671 1D5 106,635 54,266 5,965 29216,390 46,452,441 - - - - - - 299,843 - - - - 735,780 - _ - - _ _ 6,656,637 - - - - - 282,621 9,752,254 - - - - - 68D,483 1,481,765 - - - - - 1,914,956 6,149,638 - - - - - 1,818,236 5,125,844 - - - 96,150 - 209,100 209,100 302,692 - - - - 1,199,713 1,266,909 554,036 - - - 92,097 1,562,936 1,562,936 - - - 1,864,463 - 7,886,671 7,686,671 4,706 24,157 250,417 250,417 856,728 4,706 1,960,613 116,254 15,803,137 41,379,814 (628,057) 105 104,129 (1,906,347) (110,289) 13,413253 5,072,627 - - - - - 598,669 8,460,975 - (6,110) (37,151) (367,500) - (4,426,049) (4,821,631) - - - - - 46,521 46,521 902,036 - - 2,440,000 - 3,342,036 6,564,036 - - - - 7,440,000 7,440,000 (7,373,571) (8,371,711) 902,036 (8,110) (37,151) 2,072,500 - (374,394) 9,317,990 73,979 (8,005) 66,976 166,153 (110,269) 13,038,659 14,390,617 452,144 8,005 31,694 131,114 30,221,503 64,701,732 $ 526,123 $ - $ 96,672 $ 166,153 $ 20,625 $ 43,260,362 $ 79,092,349 CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETAND ACTUAL -MAJOR GOVERNMENTAL FUNDS CAPITAL PROJECTS FUNDS -COUNTY OPTION INCOME TAX For The Year Ended December 37, 2006 Revenues: Taxes: County option income Other Total revenues Expenditures: Capital outlay: r General Government: r Other services and charges Capital outlay Total expenditures Other financing sources: Operating transfers in Net change in fund balances Fund balances -beginning Fund balances -ending BudceUGAAP Reconciliation Net change in fund balance, budget basis To adjust revenues for accruals To adjust expenditures for accruals To adjust expenditures for encumbrances Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) $ 5,545,120 $ 5,545,120 $ 6,410,405 $ 865,285 120,000 120,000 897,518 777,518 5,665,120 5,665,120 7,307,923 1,642,803 2,815,081 2,819,581 2,813,206 6,375 3,549,774 8,290,455 7,469,367 821,088 6,364,855 11,110,036 10,282,573 827,463 260,000 zao,ooo 100,000 (160,000) (419,735) (5,164,916) (2,874,650) 2,290,266 7,295,240 7,295,240 7,295,240 - $ 6,875,505 $ 2,130,324 $ 4,420,590 $ 2,290,266 $ (2,874,650) (119,569) (894,895) 3,315,377 Net change in fund balance, GAAP basis $ (573,737) CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETAND ACTUAL - NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS -MOTOR VEHICLE HIGHWAY For The Year Ended December 31, 2006 Revenues: Intergovernmental Charges for services Other Total revenues Expenditures: F, Current: r-~ Highways and Streets: N Personal services Supplies Other services and charges Other uses Total expenditures Net change in fund balances Fund balances -beginning Fund balances -ending Budaet/GAAP Reconciliation Net change in fund balance, budget basis To adjust revenues for accruals To adjust expenditures for accruals To adjust expenditures for encumbrances Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) $ 3,334,631 $ 3,334,631 $ 4,066,835 $ 732,204 8,940 8,940 8,940 - 440,000 440,000 271,470 (168,530) 3,783,571 3,783,571 4,347,245 563,674 3,403,162 3,405,177 2,781,193 623,984 78,480 256,854 178,821 78,033 128,982 162,982 159,165 3,817 108,545 108,545 108,545 - 3,719,169 3,933,558 3,227,724 705,834 64,402 (149,987) 1,119,521 1,269,508 194,335 194,335 194,335 - $ 258,737 $ 44,348 $ 1,313,856 $ 1,269,508 $ 1,119,521 24,454 (12,072) 51,574 Net change in fund balance, GAAP basis $ 1,183,477 CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETAND ACTUAL - NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS -RECREATION NONREVERTING For The Year Ended December 31, 2006 Revenues: Charges for services Other Total revenues Expenditures: Current: r~ Culture and Recreation: W Personal services Supplies Other services and charges Capital outlay Total expenditures Net change in fund balances Fund balances -beginning Fund balances -ending Budcet/GAAP Reconciliation Net change in fund balance, budget basis To adjust revenues for accruals To adjust expenditures for accruals To adjust expenditures for encumbrances Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) $ 989,751 $ 989,751 $ 989,217 $ (534) 10,000 10,000 13,350 3,350 999,751 999,751 1,002,567 2,816 461,791 483,791 437,499 46,292 201,016 235,011 193,223 41,788 164,192 176,564 155,423 21,141 112,000 114,639 105,292 9,347 938,999 1,010,005 891,437 118,568 60,752 (10,254) 111,130 121,384 440,437 440,437 440,437 - $ 501,189 $ 430,183 $ 551,567 $ 121,384 $ 111,130 35 59,945 51,568 Net change in fund balance, GAAP basis $ 222,678 CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETAND ACTUAL - NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS -COMMUNITY DEVELOPMENT For The Year Ended December 31, 2006 r Revenues: Intergovernmental Other Total revenues Expenditures: Current: Urban Redevelopment and Housing: Personal services Supplies Other services and charges Other uses Capital outlay Total expenditures Other financing sources: Operating transfers in Debt issuance Total other financing sources Net change in fund balances Fund balances -beginning Fund balances -ending BudaeUGAAP Reconciliation Net change in fund balance, budget basis To adjust revenues for accruals To adjust expendtures for accruals To adjust expenditures for encumbrances Net change in fund balance, GAAP basis Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) $ 716,155 $ 4,401,123 $ 4,172,732 $ (228,391) 588,469 104,115 492,672 388,557 1,304,624 4,505,238 4,665,404 160,166 2,432,186 2,395,630 39,450 39,817 285,492 326,875 608,114 15,693,599 2,039,189 356,441 26,980 12,837 258,471 68,404 4,950,177 10,743,422 3, 365, 242 18,455, 921 7, 274, 817 11,181,104 1,475,618 1,475,618 1,290,756 (184,862) 3,222,000 3,222,000 1,475,618 4,697,618 4,512,756 (184,862) (585,000) (9,253,065) 1,903,343 11,156,408 693,162 693,162 693,162 $ 108,162 $ (8,559,903) $ 2,596,505 $ 11,156,408 $ 1,903,343 (463,760) (395,021) 643,835 $ 1,688,397 CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETAND ACTUAL - NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS -LOCAL ROAD AND STREET For The Year Ended December 31, 2006 Revenues: Intergovernmental Other Total revenues r r Expenditures: ~' Current: Highways and Streets: Capital Net change in fund balances Fund balances -beginning Fund balances -ending BudoeUGAAP Reconciliation Net change in fund balance, budget basis To adjust revenues for accruals To adjust expenditures for accruals To adjust expenditures for encumbrances Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) $ 3,113,005 $ 3,113,005 $ 3,051,462 $ (61,543) 10,000 10,000 52,077 42,077 3,123,005 3,123,005 3,103,539 (19,466) 3,023,000 4,855,852 4,084,572 771,280 100,005 (1,732,847) (981,033) 751,814 1,945,615 1, 945,615 1, 945,615 $ 2,045,620 $ 212,768 $ 964,582 $ 751,814 $ (981,033) (38,196) 429,724 186,433 Net change in fund balance, GAAP basis $ (403,072) CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETAND ACTUAL - NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS -HUMAN RIGHTS FEDERAL For The Year Ended December 31, 2006 Revenues: Intergovernmental Other Total revenues Expenditures: Current: ~ General Government: ~ Personal services Supplies Other services and charges Capital outlay Other uses Total expenditures Net change in fund balances Fund balances -beginning Fund balances -ending BudgeUGAAP Reconciliation Net change in fund balance, budget basis To adjust revenues for accruals To adjust expenditures for accruals Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) $ 173,000 $ 173,000 $ 150,030 $ (22,970) 34,300 34,300 26,450 (7,850) 207,300 207,300 176,480 (30,820) 82,281 90,381 89,374 1,007 2,800 2,874 2,232 642 99,968 110,569 89,027 21,542 - 13,768 11,836 1,932 4,390 4,390 4,390 189,439 221,982 196,859 25,123 17,861 (14,682) (20,379) (5,697) 460,367 460,367 460,367 - $ 478,228 $ 445,685 $ 439,988 $ (5,697) $ (20,379) (1,574) 11,506 Net change in fund balance, GAAP basis $ (10,447) CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETAND ACTUAL - NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS -SPECIAL EVENTS For The Year Ended December 31, 2006 Revenues: Other r., Expenditures: ~ Current: Culture and Recreation: Supplies Other services and charges Other uses Total expenditures Net change in fund balances Fund balances -beginning Fund balances -ending Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) $ 13,020 $ 13,020 $ 4,124 $ (8,896) 6,150 6,270 120 6,150 14,050 15,350 2,430 12,920 2,632 2,632 2,632 22,832 24,252 5,182 19,070 (9,872) (11,232) (1,058) 10,174 10,636 10,636 10,636 - $ 824 $ (596) $ 9,578 $ 10,174 BudgeUGAAP Reconciliation No reconcilement necessary since budgetary basis equals GAAP basis CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NONMAJOR GOVERNMENTAL FUNDS DEBTSERVICEFUNDS-REDEVELOPMENTBOND-STUDEBAKER For The Year Ended December 31, 2006 r ce Revenues: Taxes: Property Intergovernmental Total revenues Expenditures: Debt service: Principal Interest and fiscal agent fees $ 585,427 $ - $ - $ - 35,305 - - 620,732 Total expenditures Net change in fund balances Fund balances -beginning Fund balances -ending Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) 320,000 320,000 320,000 - 10,660 10,660 8,160 2,500 330,660 330,660 328,160 2,500 290,072 (330,660) (328,160) 2,500 320,332 320,332 320,332 - $ 610,404 $ (10,328) $ (7,828) $ 2,500 BudgeUGAAP Reconciliation No reconcilement necessary since budgetary basis equals GAAP basis CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL - NONMAJOR GOVERNMENTAL FUNDS DEBT SERVICE FUNDS -COLLEGE FOOTBALL HALL OF FAME DEBT SERVICE For The Year Ended December 31, 2006 Revenues: Taxes: Property Intergovernmental Total revenues ~ Expenditures: ~ Debt service: Principal Interest and fiscal agent fees Total expenditures Net change in fund balances Fund balances -beginning Fund balances -ending BudoeHGAAP Reconciliation Net change in fund balance, budget basis To adjust revenues for accruals To adjust expenditures for accruals Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) $ 1,340,475 $ 897,742 $ 899,472 $ 1,730 78,006 89,229 61,009 (28,220) 1,418,483 986,971 960,481 (26,490) 1,404,500 1,404,500 1,404,500 - 2,400 8,400 5,297 3,103 1,406,900 1,412,900 1,409,797 3,103 11,583 (425,929) (449,316) (23,387) 653,529 653,529 653,529 - $ 665,112 $ 227,600 $ 204,213 $ (23,387) $ (449,316) 6,407 9,522 Net change in fund balance, GAAP basis $ (433,387) CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETAND ACTUAL - NONMAJOR GOVERNMENTAL FUNDS CAPITAL PROJECTS FUNDS -EMERGENCY MEDICAL SERVICES For The Year Ended December 31.2006 Revenues: Charges for services Other Total revenues Expenditures: Capital outlay: Public Safety: n~i Other services and charges ~ Capital outlay Total expenditures Other financing uses: Operating transfers out Net change in fund balances Fund balances -beginning Fund balances -ending BudaeUGAAP Reconciliation Net change in fund balance, budget basis To adjust revenues for accruals To adjust expenditures for accruals To adjust expenditures for encumbrances Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) $ 1,401,800 $ 1,401,800 $ 1,179,929 $ (221,871) 28,000 25,000 417,755 392,755 1,429,800 1,426,800 1, 597,684 170,884 184,202 184,202 178,769 5,433 911,597 1,133,211 1,099,269 33,942 1,095,799 1,317,413 1,278,038 39,375 (250,000) (250,000) (250,000) - 84,001 (140,613) 69,646 210,259 927,471 927,471 927,471 $ 1,011,472 $ 786,858 $ 997,117 $ 210,259 $ 69,646 355,314 78,708 118,325 Net change in fund balance, GAAP basis $ 621,993 CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETANDACTUAL - NONMAJOR GOVERNMENTAL FUNDS CAPITAL PROJECTS FUNDS -PROFESSIONAL SPORTS DEVELOPMENT For The Year Ended December 31, 2006 Revenues: Taxes: Professional sports development Intergovernmental Other Total revenues N Expenditures: ~' Capital outlay: Culture and Recreation: Other uses Other financing uses: Transfers out Net change in fund balances Fund balances -beginning Fund balances -ending Budaet/GAAP Reconciliation Net change in fund balance, budget basis To adjust revenues for accruals To adjust expenditures for encumbrances Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) $ 370,000 $ 370,000 $ 370,556 $ 556 465,177 465,177 473,258 8,061 6,000 6,000 21,241 15,241 841,177 841,177 865,055 23,878 632,000 732,000 708,302 23,698 (500,000) (500,000) - 209,177 (390,823) (343,247) 47,576 662,492 662,492 662,492 $ 871,669 $ 271,669 $ 319,245 $ 47,576 $ (343,247) (152,590) 27,819 Net change in fund balance, GAAP basis $ (468,016) CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETAND ACTUAL - NONMAJOR GOVERNMENTAL FUNDS CAPITAL PROJECTS FUNDS - PARK NONREVERTING CAPITAL For The Year Ended December 31, 2006 r N N Revenues: Charges for services Other Total revenues Expenditures: Capital outlay: Culture and Recreation: Capital outlay Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) $ 153,000 $ 153,000 $ 120,876 $ (32,124) 119,000 119,000 112,316 (6,684) 272,000 272,000 233,192 (38,808) 274,500 285,737 168,219 117,518 Net change in fund balances Fund balances -beginning Fund balances -ending BudaeUGAAP Reconciliation Net change in fund balance, budget basis To adjust expenditures for accruals Net change in fund balance, GAAP basis (2,500) (13,737) 64,973 78,710 432,657 432,657 432,657 - $ 430,157 $ 418,920 $ 497,630 $ 78,710 $ 64,973 12,646 $ 77,619 CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETAND ACTUAL - NONMAJOR GOVERNMENTAL FUNDS CAPITAL PROJECTS FUNDS - CUMULATNE CAPITAL DEVELOPMENT For The Year Ended December 31, 2006 Revenues: Taxes: Property Intergovernmental Other Total revenues r i Expenditures: W Capital outlay: General Government: Other services and charges Capital outlay Total expenditures Net change in fund balances Fund balances -beginning Fund balances -ending BudaeUGAAP Reconciliation Net change in fund balance, budget basis To adjust expenditures for accruals To adjust expenditures for encumbrances Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) $ 1,074,522 $ 1,054,847 $ 1,054,963 $ 116 80,678 75,908 75,815 (93) 20,000 20,000 70,351 50,351 1,175,200 1,150,755 1,201,129 50,374 449,950 459,950 451,709 8,241 936,675 1,450,646 821,263 629,383 1,386,625 1,910,596 1,272,972 637,624 (211,425) (759,841) (71,843) 687,998 2,039,914 2,039,914 2,039,914 $ 1,828,489 $ 1,280,073 $ 1,968,071 $ 687,998 $ (71,843) 10,113 203,391 Net change in fund balance, GAAP basis $ 141,661 CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETAND ACTUAL - NONMAJOR GOVERNMENTAL FUNDS CAPITAL PROJECTS FUNDS -CUMULATIVE CAPITAL IMPROVEMENT For The Year Ended December 31, 2006 N .p Revenues: Intergovernmental Other Total revenues Expenditures: Capital outlay: General Government: Other services and charges Net change in fund balances Fund balances -beginning Fund balances -ending Variance Actual With Final Budgetary Budget Budoeted Amounts Basis Positive Original Final Amounts (Negative) $ 375,106 $ 375,106 $ 385,077 $ 9,971 2oo,aoo 200,000 200,000 - 575,106 575,106 585,077 9,971 591,883 594,383 594,000 383 (16,777) (19,277) (8,923) 10,354 248,463 248,463 248,463 - $ 231,686 $ 229,186 $ 239,540 $ 10,354 BudceNGAAP Reconciliation No reconcilement necessary since budgetary basis equals GAAP basis CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETAND ACTUAL - NONMAJOR GOVERNMENTAL FUNDS CAPITAL PROJECTS FUNDS -ECONOMIC DEVELOPMENT INCOME TAX For The Year Ended December 31, 2006 Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Taxes: County economic development income tax $ 3,498,794 $ 3,498,794 $ 4,013,475 $ 514,681 Other 163,000 163,000 336,259 173,259 Total revenues F, Expenditures: N Capital outlay: ~ General Government: Other services and charges Capital outlay Total expenditures Net change in fund balances Fund balances -beginning Fund balances -ending Budoet/GAAP Reconciliation Net change in fund balance, budget basis To adjust revenues for accruals To adjust expenditures for accruals To adjust expenditures for encumbrances 3,661,794 3,661,794 4,349,734 687,940 3,322,893 3,328,893 3,310,368 18,525 226,000 1,180,095 1,091,675 88,420 3,548,893 4,508,988 4,402,043 106,945 112,901 (847,194) (52,309) 794,885 1,941,016 1,941,016 1,941,016 $ 2,053,917 $ 1,093,822 $ 1,888,707 $ 794,885 $ (52,309) 7,363,131 (7,166,182) 658,138 Net change in fund balance, GAAP basis $ 802,778 CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGETAND ACTUAL - NONMAJOR GOVERNMENTAL FUNDS CAPITAL PROJECTS FUNDS -MAJOR MOVES For The Year Ended December 31, 2006 r N Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Intergovernmental $ - $ - $ 12,823,151 $ 12,823,151 Other - 63,519 63,519 Total revenues - 12,886,670 12,886,670 Fund balances -beginning - - - Fund balances -ending $ - $ - $ 12,886,670 $ 12,886,670 Budcet/GAAP Reconciliation Net change in fund balance, budget basis $ 12,886,670 To adjust revenues for accruals 115,530 Net change in fund balance, GAAP basis $ 13,002,200 NONMAJOR ENTERPRISE FUNDS Consolidated Building - To account for the operation of the consolidated St. Joseph County/South Bend Building Department. Parking Garage - To account for the operation and maintenance of the City's parking garages. Solid Waste - To account for the provision of solid waste services. Blackthorn Golf Course - To account for the operation and maintenance of the City's Blackthorn Golf Course. 127 CITY OF SOUTH BEND COMBINING STATEMENT OF NET ASSETS - NONMAJOR ENTERPRISE FUNDS December 31, 2006 r N CO Assets Current assets: Cash and cash equivalents Accounts receivable (net of allowance) Accounts receivable -other Intertund receivables: Intertund services provided and used Inventories Restricted assets: Cash, cash equivalents and investments: Revenue bond covenant accounts Capital outlay accounts Interest receivable Total current assets Noncurrent assets: Deferred charges: Unamortized debt issue costs Unamortized loss on saleAeaseback Total deferred charges Capital assets: Land and construction in progress Other capital assets (net of accumulated depreciation) Totalcapkalassets Total noncurrent assets Total assets Consolidated Parking Solid Blackthorn Building Garage Waste Golf Course Total $ 131,037 $ - $ 366,325 $ 234,883 $ 732,245 - 35 346,828 - 346,863 - - - 4,323 4,323 350 - - - 350 - - - 12,306 12,306 - - - 1,291,411 1,291,411 - - 28,980 - 28,980 - - - 1,266 1,266 131,387 35 742,133 1,544,189 2,417,744 - - - 26,735 26,735 5,063,830 - 5,063,830 - 5,063,830 - 26,735 5,090,565 - 1,132,020 - 448,469 1,580,489 70,540 2,045,484 1,197,165 2,538,854 5,852,043 70,540 3,177,504 1,197,165 2,987,323 7,432,532 70,540 8,241,334 1,197,165 3,014,058 12,523,097 201,927 8,241,369 1,939,298 4,558,247 14,940,841 Continued on next page CITY OF SOUTH BEND COMBINING STATEMENT OF NET ASSETS - NONMAJOR ENTERPRISE FUNDS December 31, 2005 (Continued) N Liabilities Current liabilities: Accounts payable Intertund payables: Intertund loans Intertund services provided and used Accrued payroll payable Compensated absences payable Current liabilities payable from restricted assets: Revenue bonds payable Capital leases payable Accrued interest payable Total current liabilities Noncurrent liabilities: Revenue bonds payable (net of unamortized discounts and deferred amount on refunding) Capital leases payable Unamortized gain on sale/leaseback Total noncurrent liabilities Total liabilities Net Assets Invested in capital assets, net of related debt Restricted for debt service Reserved for capital asset outlays Unrestricted Total net assets Consolidated Parking Solid Blackthorn Building Garage Waste Golf Course Total 718 104,449 203,883 14,913 323,963 - 624,296 - 2,083,000 2,707,296 2,343 - 37,725 295 40,363 14,608 - 26,731 - 41,339 48,029 - 66,045 - 114,074 - - - 465,000 465,000 - - 359,953 - 359,953 - - 15,078 58,834 73,912 65,698 728,745 709,415 2,622,042 4,125,900 - - - 3,161,629 3,161,629 - - 870,451 - 870,451 26,426 26,426 - 26,426 870,451 3,161,829 4,058,506 65,698 755,171 1,579,866 5,783,671 8,184,406 70,540 3,177,504 676,670 (639,306) 3,285,408 - - - 1,213,815 1,213,815 - - 28,980 - 28,980 65,689 4,308,694 (346,218) (1,799,933) 2,228,232 $ 136,229 $ 7,486,198 $ 359,432 $ (1,225,424) $ 6,756,435 CITY OF SOUTH BEND COMBINING STATEMENT OF REVENUES, EXPENSES AND OTHER CHANGES IN FUND NET ASSETS NONMAJOR ENTERPRISE FUNDS For the Year Ended December 31, 2006 Operating revenues: Licenses and permits Parking fees Solid waste fees Golf course fees Other Total operating revenues Operating expenses: Operating and maintenance Administrative and general expense: Depreciation Consolidated Parking Solid Blackthorn Building Garage Waste GoH Course Total $ 1,033,483 $ - $ - $ - $ 1,033,483 - 790,140 - - 790,140 - - 4,124,348 - 4,124,348 - - - 1,565,649 1,565,649 3,187 9,210 53,549 - 65,946 1,036,670 799,350 4,177,897 1,565,649 7,579,566 1,037,872 - 3,737,505 1,346,173 6,121,550 19,351 619,486 226,924 100,756 966,517 44,941 82,116 178,666 152,814 458,537 w Total operating expenses 1,102,164 701,602 4,143,095 1,599,743 7,546,604 0 Operating income (loss) Nonoperating revenues (expenses): Interest and investment revenue Interest expense Amortization expense Gain (loss) on disposition of assets Total nonoperating revenue (expenses) Income (loss) before contributions and transfers Transfers out Change in net assets Total net assets -beginning Total net assets -ending (65,494) 97,748 34,802 (34,094) 32,962 - - 6,024 53,550 59,574 - - (44,611) (207,678) (252,289) - (560,340) - (4,336) (564,676) 2,735 - - - 2,735 2,735 (560,340) (38,587) (158,464) (754,656) (62,759) (462,592) (3,785) (192,558) (721,694) - (44,200) (44,200) (62,759} (462,592) (3,785) (236,758) (765,894) 198,988 7,948,790 363,217 (988,666) 7,522,329 $ 136,229 $ 7,486,198 $ 359,432 $ (1,225,424) $ 6,756,435 CITY OF SOUTH BEND COMBINING STATEMENT OF CASH FLOWS - NONMAJOR ENTERPRISE FUNDS For the Year Ended December 31, 2006 Cash flows from operating activdies: Receipts from customers and users Receipts from interfund services provided Payments to suppliers Payments to employees Payments for interfund services used Consolidated Parking Building Garage Solid Blackthorn Waste Golf Course Total Net cash provided (used) by operating activities Cash flows from noncapital financing activities: Advances from other funds Repayment of advances from other funds Transfers to other funds Net cash provided (used) by noncapital financing activities w Cash flows from capital and related financing activities: ''-' Acquisition and construction of capital assets Principal paid on capital debt Interest paid on capital debt Proceeds from sales of capital assets Net cash used by capital and related financing activities Cash flows from investing activities: Interest received Net increase (decrease) in cash and cash equivalents $ 1,036,595 $ 799,440 $ 4,082,425 $ 1,564,776 $ 7,483,236 - - 52,000 - 52,000 (36,396) (563,876) (1,486,031) (1,411,122) (3,497,425) (779,497) - (1,305,929) - (2,085,426) (243,503) (32,545) (1,161,435) (33,287) (1,470,770) (22,801) 203,019 181,030 120,367 481,615 - 596,423 - 643,500 1,239,923 - (799,442) - - (799,442) - - - (44,200) (44,200) (203,019) - 599,300 396,281 (38,000) - - (64,407) (102,407) - - (348,478) (445,000) (793,478) - - (48,842) (188,681) (237,523) 4,278 - - _ - 4,278 (33,722) - (397,320) (698,088) (1,129,130) (56,523) Cash and cash equivalents, January 1 (Including $1,272,649 and $42,909 for the revenue bond covenants and capital outlays, respectively, reported in restricted accounts) 187,560 - 6,024 53,143 59,167 - (210,266) 74,722 (192,067) _ 605,571 1,451,572 2,244,703 Cash and cash equivalents, December 31 (Including $1,291,411 and $28,980 for the revenue bond covenants and capital outlays, respectively, reported in restricted accounts) $ 131,037 $ - $ 395,305 $ 1,526,294 $ 2,052,636 Continued on next page CITY OF SOUTH BEND COMBINING STATEMENT OF CASH FLOWS - NONMAJOR ENTERPRISE FUNDS For the Year Ended December 31, 2006 (Continued) N W N Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income {loss) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation expense Bad debt expense (Increase) decrease in assets: Accounts receivable Other accounts receivable Interfund receivable Inventories Increase (decrease) in liabilities: Accounts payable Interfund payable Accrued payroll payable Compensated absence payable Total adjustments Net cash provided (used) by operating activities Noncash investing, capital and financing activities: Fixed asset disposals Trade value of foced assets Consolidated Parking Solid Blackthorn Building Garage Waste Golf Course Total $ (65,494) $ 97,748 $ 34,802 $ (34,094) $ 32,962 44,941 82,116 178,666 152,814 458,537 - - 25,040 - 25,040 275 90 (69,088} - (68,723) - - 576 (873) (297) (350) - - - (350) - - - (2,710) (2,710) (4,594) 23,065 84,398 5,114 107,983 174 - (73,227) 116 (72,937) 82 - (865) - (783) 2,165 728 - 2,893 42,693 105,271 146,228 154,461 448,653 $ (22,801) $ 203,019 $ 181,030 $ 120,367 $ 481,615 $ - $ - $ - $ 19,261 $ 19,261 - - - 2,569 2,569 INTERNAL SERVICE FUNDS Liability Insurance Premium Reserve - To account for expenses related to maintaining the City's self-funded liability insurance including administrative costs, claims and premiums. Funding is provided by assessments to certain other City funds. Self-Funded Employee Benefits - To account for employer and employees' contributions for a medical insur- ance plan. Central Services - To account for expenses related to fuel, vehicle repairs and various supplies provided to City departments on acost-reimbursement basis. 133 CITY OF SOUTH BENG COMBINING STATEMENT OF NET ASSETS -INTERNAL SERVICE FUNDS December 31, 2006 r W Assets Current assets: Cash and cash equivalents Interest receivable Accounts receivable Interfund receivables: Interfund services provided and used Intergovernmental receivables Inventories Prepaid items Total current assets Capital assets: Other capital assets (net of accumulated depreciation) Total assets Liabilities Current liabilities: Accounts payable Interfund payables: Interfund loans Interfund services provided and used Accrued payroll payable Compensated absences Estimate of unfiled claims Total liabilities Net Assets Liability Self- Insurance Funded Premium Employee Central Reserve Benefits Services Total $ 2,692,581 $ 2,330,310 $ - $ 5,022,891 - 829 - 829 3,837 995,909 1,544 1,001,290 349,226 349,226 - - 9,237 9,237 - - 1,150,865 1,150,865 16,265 16,265 2,712,683 3,327,048 1,510,872 7,550,603 - 1,459,055 1,459,055 2,712,663 3,327,048 2,969,927 9,009,658 13,447 1,216,878 140,981 1,371,306 1,029 41 2,269 1,656 5,360 4,429 399,147 250,000 891,975 891,975 3,191 4,261 37,671 41,596 111,940 121,729 649,147 421,252 1,473,004 1,185,758 3,080,014 Invested in capital assets, net of related debt - - 1,459,055 1,459,055 Unrestricted 2,291,431 1,854,044 325,114 4,470,589 Total net assets $ 2,291,431 $ 1,854,044 $ 1,784,169 $ 5,929,644 CITY OF SOUTH BEND COMBINING STATEMENT OF REVENUES, EXPENSES AND OTHER CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS For the Year Ended December 31, 2006 Operating revenues: Employee/employer contributions Charges for sales and services Total operating revenues Operating expenses: ~ Operation and maintenance ~'~ Administration Insurance claims and premiums Depreciation Total operating expenses Operating income (loss) Nonoperating revenues: Interest and investment revenue Change in net assets Total net assets -beginning Liability Self- Insurance Funded Premium Employee Central Reserve Benefits Services Total $ 2,331,050 $ 14,003,999 $ - $ 16,335,049 - - 2,524,054 2,524,054 2,331,050 14,003,999 2,524,054 18,859,103 182,257 - 2,248,497 2,430,754 - 417,225 208,066 625,291 1,849,900 13,394,129 - 15,244,029 - 73,822 73,822 2,032,157 13,811,354 2,530,385 18,373,896 298,893 192,645 (6,331) 485,207 87,864 90,958 - 178,822 386,757 283,603 (6,331) 664,029 1,904,674 1,570,441 1,790,500 5,265,615 Total net assets-ending $ 2,291,431 $ 1,854,044 $ 1,784,169 $ 5,929,644 CITY OF SOUTH BEND COMBINING STATEMENT OF CASH FLOWS -INTERNAL SERVICE FUNDS For the Year Ended December 31, 2006 w rn Cash flows from operating activities: Receipts from customers and users Receipts from interfund services provided Payments to suppliers Payments to employees Payments for interfund services used Net cash provided (used) by operating activities Cash flows from rtoncapital financing activities: Interfund loan Interfund loan repaid Net cash provided by noncapital financing activities Cash flows from capital and related financing activities: Acquisition and construction of capital assets Cash flows from investing activities: Interest received Net increase in cash and cash equivalents Cash and cash equivalents, January 1 Cash and cash equivalents, December 31 Liability Seif- Insurance Funded Premium Employee Central Reserve Benefits Services Total $ 2,029 $ 2,269,068 $ 43,990 $ 2,315,087 2,325,184 11,796,067 2,597,459 16,718,710 (1,837,502) (13,006,015) (289,519) (15,133,036) (117,097) (96,997) (1,918,059) (2,132,153) (52,306) (75,916) (584,659) (712,883) 320,306 886,207 (150,788) 1,055,725 - 6,522,464 6,522,464 - (6,321,681) (6,321,681) - 200,783 200,783 - (49,995) (49,995) 87,864 91,182 - 179,046 408,170 977,389 - 1,385,559 2,284,411 1,352,921 - 3,637,332 $ 2,692,581 $ 2,330,310 $ - $ 5,022,891 Continued on next page CITY OF SOUTH BEND COMBINING STATEMENT OF CASH FLOWS -INTERNAL SERVICE FUNDS For the Year Ended December 31, 2006 (Continued) Liability Self- Insurance Funded Premium Employee Central Reserve Benefits Services Total Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) $ 298,893 $ 192,645 $ (6,331) $ 485,207 Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation expense - - 73,822 73,822 F, (Increase) decrease in assets: w Accounts receivable (3,837) 61,136 1,055 58,354 ~ Intergovernmental receivables - - 14,742 14,742 Interfund receivables - - 101,598 101,598 Inventories - - (248,814) (248,814) Prepaid items (1,117) - - (1,117) Increase (decrease) in liabilities: Accounts payable (15,157) 874,422 (93,448) 765,817 Interfund payables 1,025 (73) 2,086 3,038 Accrued payroll payable 212 33 1,274 1,519 Compensated absences payable 2,247 152 3,228 5,627 Estimated unfiled claims 38,040 (242,108) - (204,068) Total adjustments 21,413 693,562 (144,457) 570,518 Net cash provided (used) by operating activities $ 320,306 $ 886,207 $ (150,788) $ 1,055,725 Noncash investing, capital and financing activities: Capital asset disposals $ - $ - $ 7,800 $ 7,800 FIDUCIARY FUNDS Pension trust funds 1925 Police Pension - To account for the provision of retirement and disability benefits to police officers hired prior to May 1, 1977. Financing is provided by mandatory contributions by active members, state pension relief distributions, and a specific annual property tax levy. 1937 Firefighters' Pension - To account for the provision of retirement and disability benefits to firefighters hired prior to May 1, 1977. Financing is provided by mandatory contributions by active members, state pension relief distributions, and a specific annual property tax levy. Agency fund Payroll - To account for the payroll of City employees and pension benefits of the Police and Firefighters' Pension Funds. Gross payroll and pension benefits are treated as expenditures in other City funds and transferred into this fund, which serves as a clearing account. 138 CITY OF SOUTH BEND COMBINING STATEMENT OF FIDUCIARY NET ASSETS -PENSION TRUST FUNDS December 31.2006 r W 1937 Total 1925 Police Firefighters' Pension Pension Pension Trust Funds Assets Cash and cash equivalents Receivables: Taxes Intergovernmental Total receivables Total assets Liabilities Current liabilities: Accounts payable Noncurrent liabilities: DROP payable -due within one year DROP payable -long-term Total noncurrent liabilties $1,851,954 $ 2,463,992 $ 4,315,946 136,069 151,370 287,439 4,651 5,174 9,825 140,720 156,544 297,264 1,992,674 2,620,536 4,613,210 91 77 168 803,586 959,828 1,763,414 - 36,210 36,210 803,586 996,038 1,799,624 Total liabilities 803,677 996,115 1,799,792 Net Assets Held intrust for: Employees' pension benefits $1,188,997 $ 1,624,421 $ 2,813,418 CITY OF SOUTH BEND COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS PENSION TRUST FUNDS For the Year Ended December 31, 2006 r 0 Additions Contributidns: Employer State of Indiana Plan members Other Total contributions Net Investment income: Interest Total additions Deductions Benefds Administrative expense Interest expense Total deductions Changes in net assets Net assets -beginning Net assets -ending 1937 Total 1925 Police Firefighters' Pension Pension Pension Trust Funds $ 2,740,595 $ 2,702,401 $ 5,442,996 3,462,401 3,112,771 6,575,172 31,904 19,610 51,514 26,039 26,039 6,260,939 5,834,762 12,095,721 147,113 151,480 298,593 6,408,052 5,986,262 12,394,314 5,283,185 4,895,519 70,178,704 10,601 10,480 21,081 8,828 5,297 14,125 5,302,614 4,911,296 10,213,910 1,105,438 1,074,966 2,180,404 83,559 549,455 633,014 $ 1,188,997 $ 1,624,421 $ 2,813,418 CITY OF SOUTH BEND STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS AGENCY FUND For the Year Ended December 31, 2006 Payroll Assets: Cash and cash equivalents, January 1 $ 1,135,414 Additions 87,225,072 ~ Deductions (87,208,199) r Total assets, December 31 $ 1,152,287 Liabilities Accrued payroll and withholdings payable, January 1 $ 1,135,414 Additions 87,225,072 Deductions (87,208,199) Total liabilities, December 3l $ 1,152,287 City of South Bend, Indiana Net Assets by Component Last Ten Fiscal Years Governmental activities Invested in capital assets, net of related debt Restricted Unrestricted Total governmental activities net assets Business-type activities Invested in capital assets, net of related debt Restricted ~, Unrestricted i? Total business-type activities net assets Fiscal Year 2002 2003 2004 2005 2006 $31,654,852 $31,254,629 $7,383,902 $35,777,247 $208,509,577 7,167,628 6,381,082 1,966,388 6,138,257 5,225,642 16,463,922 31,095,490 59,250,281 26,957,659 24,900,036 $55,286,402 $68,731,201 $68,600,571 $68,873,163 $238,635,255 $49,514,614 $102,466,792 $93,370,899 $94,833,960 $97,670,533 $44,235,716 $14,456,725 $13,254,447 $17,942,700 $22,535,858 37,874,655 12,837,127 19,015,375 8,751,584 7,168,852 $131,624,985 $129,760,644 $125,640,721 $121,528,244 $127,375,243 Primary government Invested in capital assets, net of related debt $81,169,466 $133,721,421 Restricted 51,403,344 20,837,807 Unrestricted 54,338,577 43,932,617 Total primary government net assets $186,911,387 $198,491,845 Source -City of South Bend Comprehensvie Annual Financial Reports $100,754,801 $130,611,207 $306,180,110 15,220,835 24,080,957 27,761,500 78265.656 35.709.243 32.068.888 $194,241,292 $1 The City implemented GASB 34 during 2002. Information on Net Assets by Component is not available prior to 2002. City of South Bend, Indiana Changes in Net Assets, Last Ten Fiscal Years Fiscal Year 2002 2003 2004 2005 2006 w Expenses Governmental activities: General Government Public Safety Holidays and Streets Health and Welfare Culture and Recreation Community and Economic Development Interest on long-term debt Total governmental activities expenses Business-type activities: Water Wastewater Civic Center Building Department Parking Solid Waste ($18,940,766) ($12,857,643) ($17,523,559) ($15,033,018) ($17,194,920) (38,925,286) (48,254,995} (45,799,395) (72,450,941) (56,600,175) (10,359,307) (6,370,307) (9,855,890) (9,010,971) (21,813,189) (75,000) (99,586) (102,314) (75,352) (114,131) (7,488,084) (10,899,340) (13,689,893) (8,840,970) (14,994,300) (16,670,062) (17,708,054) (18,102,343) (22,436,802) (18,813,636) (3,988,586) (3,979,222) (6,209,012) (5,943,021) (5,841,0322 (96,447,091) (100,169,147) (111,282,406) (133,791,075) (135,371,383) (11,003,062) (11,676,058) (12,275,029) (12,447,141) (11,916,504) (13,681,575) (14,402,563) (16,125,258) (18,452,785) (16,972,401) (3,395,569) (3,460,137) (3,592,627) (3,478,359) (3,355,531} (1,038,341) (1,052,861) (1,134,986) (1,047,007) (1,102,164) (1,378,563) (1,451,385) (1,739,235) (1,165,502) (1,261,942) (3,715,963) (3,775,137) (4,015,831) {4,920,464) (4,187,706) Golf Course Total business-type activities net expenses Total primary government net assets City of South Bend, Indiana Changes in Net Assets, Last Ten Fiscal Years (Continued) .A Program Revenues Governmental activities: Charges for services Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Business-type activities: Charges for services: Water Wastewater Civic Center Building Department Parking Solid Waste Golf Course Operating grants and contributions Capital grants and contributions Total business-type activites program revenues Total primary government program revenues Net (Expense)lRevenue Governmental activities Business-type activities Total primary government net expense Fiscal Year 2002 2003 2004 2005 2006 $13,627,988 $14,569,764 $9,343,194 $6,823,577 $17,563,075 14,826,421 14,813,675 10,718,149 12,916,362 12,452,463 3,842,673 1,790,912 10,326,795 9,447,723 13,793,363 32,297,082 31,174,351 30,388,138 29,187,662 43,808,901 12, 953, 580 13,021,168 12,513,333 12,130,549 14,757,819 12, 665, 696 13, 076, 885 14, 773, 651 14, 83 0, 607 18, 725, 903 1,848,097 1,704,787 1,837,763 1,604,352 3,113,264 979,781 1,020,325 983,102 1,125,312 1,039,405 731,007 1,211,222 768,503 763,581 799,350 4,029,171 3,987,183 3,964,487 3,764,229 4,177,897 1,541,311 1,630,975 1,689,984 1,546,244 1,565,649 1,020,628 1,130,575 1,165,243 1,282,780 0 850,967 72,390 118,953 1,479,581 1,413,861 36,620,238 36,855,510 37,815,019 38,527,235 45,593,148 68.917,320 68,029,861 68,203,157 67,714,897 89,402,049 (64,150,009) (68,994,796) (80,894,268) (104,603,413) 751.730 (669,168) (2,846,054) (4,720,962) (91,562,482) 4,985.143 City of South Bend, Indiana Changes in Net Assets, Last Ten Fiscal Years (Continued) Cn General Revenues and Other Changes in Net Assets Governmental activities: Taxes Property taxes County Option Income Tax Economic Development Income Tax Professional Sports Development Tax Community Revitalization District Tax Unrestricted grants and contributions Unrestricted Investment earnings Miscellaneous Loss onf Sale of Redevelopment Properties Net Pension Obligation Transfers Total governmental activities Business-type activities: Unrestricted Investment earnings Other Transfers Total business-type activities Total primary government Change in Net Assets Governmental activities Business-type activities Total primary government Excludes prior period adjustments Fiscal Year 2002 2003 2004 2005 2006 $58,552,988 $67,965,063 $62,279,784 $72,743,697 $68,256,602 7,750,067 7,374,318 7,001,198 5,695,618 6,410,405 3,077,665 3,512,369 3,448,688 3,464,152 4,013,475 316,173 341,093 378,099 385,553 336,281 0 0 655,269 965,052 1,000,000 4,989,809 5,286,477 5,133,838 5,160,298 5,063,541 1,559,320 1,124,825 1,660,720 3,543,469 4,762,484 785,900 903,574 598,600 10,790,170 3,520,138 (1,083,637) 0 0 0 0 (5, 324,182) 0 0 0 0 (60 033) 12,533 14,873 33,589 44,200 70,564,070 86,520,252 81,171,069 102,781,598 93,407,126 462,674 266,610 362,676 745,966 906,056 0 0 0 1,990,515 0 60 033 (12533) (14,873) {33,589) (44,200) 522,707 254,077 347,803 2,702,892 861,856 71.086.777 86.774,329 81,518,872 105,484,490 94,268,982 6,414,061 1 274 437 17,525,456 (415 091) 276,801- (2 498,251) (1,821,815) (2,018,070) 1,844,644 5,846,999 X7.688.498 X17.110.365 ($2.221,450) ($3,839,885) $7,691,643 Source :City of South Bend Comprehensive Annual Financial Reports The City implemented GASB 34 during 2002. Information on Changes in Net Assets is not available prior to 2002. City of South Bend, Indiana Fund Balances, Governmental Funds Last Ten Fiscal Years Fiscal Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 General fund Reserved $1,448,458 $1,806,494 $2,509,039 $2,736,411 $2,415,282 $2,695,612 $2,002,641 $2,365,669 $10,581,739 $4,162,853 Unreserved 8 851 545 11 438 936 14 089 407 14 342 776 15 672 609 14 359 310 18 503 386 19 656 024 18162 455 21 688 442 Totalgeneratfund $10,300,003 $13,245,430 $16,598,446 $17,079,187 $18,087,891 $17,054,922 $20,506,027 $22,021,693 $28,744,194 $25,851,295 All Other Governmental Funds Reserved 26,320,635 23,854,599 25,696,913 26,302,929 33,676,079 37,163,342 33,911,725 39,224,425 38,498,351 34,251,520 Unreserved, reported in: Special revenue funds 7,983,761 9,313,950 13,871,625 11,820,311 7,389,639 9,981,610 9,881,359 10,159,432 14,134,371 19,348,846 Capital projects funds 19,462,266 24,968,734 17,523,976 16,088,256 16,111,900 22,299,698 70,656,781 43,815,737 40,624,644 60,447,079 Debt services funds 0 0 0 0 0 0 0 0 0 (7,828) Total ali other governmental funds $53,766,662 $58,137,283 $57,092,514 $54,211,496 $57,177,618 $69,444,650 $114,449,865 $93,199,594 E93,257,366 $114,039,617 Source: City of South Bentl Comprehensive Annual Financial Reports r rn City of South Bend, Indiana Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years H A Revenues Taxes Licenses, fees and permits Fines and penalties Charges for services Intergovernmental Investmenteamings Other revenues Total revenues Expenditures General government Public Safeiy Highways antl Streets Health and Welfare Culture and Recreation Community and Economic Development Captial Outlay Debt Service Interest and Fiscal Charges Principal Totalexpend'RUres Fiscal Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 $48,960,036 $55,898,999 $57,444,633 $61,112,886 $68,572,472 $73,697,617 $80,533,464 $75,289,946 $78,650,044 $84,049,414 168,372 183,921 188,405 307,343 245,894 236,267 212,261 223,006 246,780 t86,470 171,242 215,956 311,897 245,093 126,515 203,837 264,704 302,376 245,680 444,861 8,192,372 9,766,032 10,448,053 11,421,491 12,716,474 13,187,884 14,030,134 15,187,711 15,293,779 16,931,744 13,278,474 12,959,011 15,271,114 13,050,812 11,987,614 20,859,845 19,873,378 17,968,454 18,fi65,828 31,275,541 2,344,766 3,080,847 3,030,611 3,870,574 2,569,725 1,559,320 1,124,825 1,668,050 3,543,469 4,762,484 3 231 567 3 322 055 3 365 109 6 102 643 3 711 786 3 267 910 2 977,325 2,732.127 10,791 555 3 414 731 76,346,829 85,426,82] 90,059,822 96,110,842 99,930,480 113,032,680 119,016,091 113,371,670 127,437,135 141,065,245 5,555,467 5,492,450 5,085,134 7,005,016 6,938,489 7,530,213 5,798,497 6,814,675 7,828,275 11,244,734 29,219,564 31,117,048 33,981,313 36,129,147 38,687,286 38,896,338 45,498,413 44,371,673 49,010,645 51,050,640 12,402,630 9,941,076 11,339,275 13,933,251 14,064,377 12,366,777 7,499,367 12,638,026 9,874,281 13,583,761 57,750 60,000 60,000 65,000 65,000 75,000 75,000 75,000 75,000 75,000 9,768,438 9,259,081 10,049,811 11,173,165 12,864,397 12,352,525 12,855,102 14,347,497 14,226,463 13,849,622 5,837,374 7,309,229 6,330,843 6,809,340 8,269,097 9,755,980 14,518,827 13,208,131 7,531,650 9,752,254 11,013,723 21,154,637 24,575,255 18,423,497 14,937,077 24,217,175 23,264,716 30,722,396 29,299,053 16,391,192 2,443,866 1,935,000 2,455,878 3,420,574 4,075,031 3,938,296 4,417,477 5,287,658 5,793,386 6,144,611 2 570 000 2 185 682 2 185 194 3 430 872 3 841 439 4 883106 10 197,689 5,597,717 7,074,887 _ 7,435,722 78,868,812 88,454,203 96,062,703 100,389,862 103,742,193 114,015,410 124,125,088 133,062,773 130,713,640 129,527,536 City of South Bend, Indiana Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years r Excess of revenues over (under expenditures Other Financing Sources (Uses) Proceeds from borrowing Proceeds from refunding Payments to escrow agent Financing By Land Contrail Financing By Capital Lease Transfers in Transfers out Other Total other financing sources (uses) Net change in fund balances Debt service as a percentage of noncapital expend'Rures Fiscal Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 (2,521,983) (3,027,382) (6,002,881) (4,279,020) (3,811,713) (982,730) (5,108,997) (19,691,103) (3,276,505) 11,537,709 11,680,576 13,172,285 4,837,271 0 8,579,363 12,016,706 55,953,290 613,767 10,023,189 14,050,557 7,283,128 0 0 0 6,123,340 0 598,086 0 0 0 (7,174,175) 0 0 0 (6,123,340) 0 (1,793,917) 0 0 (8,371,711) 1,575,000 0 0 0 0 0 0 0 0 0 1,895,000 701,668 1,305,150 3,008,488 1,040,000 755,000 795,325 0 0 0 5,090,283 7,853,812 6,421,098 6,422,020 8,263,022 6,864,298 8,201,665 6,571,247 8,332,742 8,928,540 (5,270,783) (7,904,182) (6,538,338) (7,549,235) (9,209,695) (7,724,331) (10,189,132) (6,556,374) (8,299,153) (6,884,340) 0 0 0 0 0 455.120 0 0 0 0 15 079 029 13 823 583 6 025181 1 881 273 8 672 690 12 366 793 53 565 317 628 640 10 056 778 5 723 046 $12 557 046 $10 796 201 $22 300 ($2,397,747) $4,860 977 $11,384,063 $48,456,320 ($19,062,463) $6,780,273 $17,260,755 7.4% 6.1% 6.5% 8.4% 8.9% 9.8% 14.5% 10.6% 12.7% 12.0% Excludes prior period adjustments Source: City of South Bend Comprehensive Annual Financial Reports City of South Bend, Indiana Full-Time Equivalent City Govermm~ent Employees by Department Last Ten Fiscal Years Fiscal Year Deaartment 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 General Government Mayor's Office 8.05 8.75 8.75 9.00 9.00 10.00 10.00 10.00 10.00 10.00 City Clerk's Office 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 Common Council 9.00 9.00 9.00 9.00 9.00 9.00 9.00 9.00 9.00 9.00 Administration and Finance 28.80 27.00 28.00 27.00 27.00 28.00 28.00 29.00 31.00 32.00 Legal Department 12.80 13.00 13.00 14.00 13.00 13.00 14.00 15.00 15.00 15.00 Public Safety Police Department 311.33 314.33 314.33 314.33 315.33 317.00 316.00 315.00 317.00 317.00 Communication Center 28.00 28.00 28.00 28.00 28.00 28.00 29.00 31.00 31.00. 31.00 Fire Department 231.00 27.00 257.00 257.00 257.00 257.00 257.00 257.00 255.00 255.00 Building Maintenance for Fire & Police Dept 5.00 5.00 5.00 5.00 5.00 .6.00 6.00 6.00 7.00 7.00 r t° Other Services Code Enforcement 25.00 25.00 23.00 26.00 26.00 27.00 27.00 28.00 28.00 28.00 Parks and Recreation 121.00 128.00 128.00 127.00 132.00 132.00 126.00 124.00 123.00 122.00 Community and Economic Development 43.50 43.50 44.50 44.50 44.50 45.00 44.00 42.00 42.00 42.00 Engineering 28.00 29.00 30.00 32.25 32.00 21.00 21.00 20.00 19.00 19.00 Street Department 83.00 83.00 80.00 83.00 82.00 81.00 77.00 71.00 71.00 66.00 Traffic & Lighting 0.00 0.00 0.00 0.00 0.00 12.00 11.00 11.00 11.00 11.00 Water Works 105.00 105.00 100.00 96.00 97.00 95.00 87.00 87.00 86.00 86.00 Wastewater 92.00 95.00 90.00 91.00 90.00 89.00 85.00 85.00 81.00 82.00 Central Services 61.00 60.00 59.00 56.00 53.00 53.00 53.00 50.00 50.00 49.00 Solid Waste 43.00 45.00 44.00 45.00 45.00- 42.00 35.00 31.00 31.00 31.00 Building Department 20.00 20.00 20.00 20.00 20.00 20.00 20.00 22.00 22.00 22.00 Convention and Events Management 62.00 58.00 53.87 52.00 44.00 48.33 49.00 50.00 50.00 49.00 Total 1,322.48 1,358.58 1,340.45 1,341.08 1,333.83 1,338.33 1,309.00 1,298.00 7,294.00 1,288.00 Source: City of South Bends Performance Based Budgets City of South Bend, Indiana Principal Property Taxpayers -Current and Nine Years Ago December 31, 2006 r cn 0 2006 1997 Net Assessed Percent Net Assessed Percent Taxpayer Type of Business Real Value Rank of Total Value Rank of Total Edward Rose of Indiana Marriott Hotel Maple Lane Apartments Memorial Health Systems, Inc. 1st Source Bank Dillingham Hill RE, LLC (Holiday Inn) Ameritech Honeywell Meijer Wal Mart New Energy Company American Electric Power . A.E. Goetze South Bend Tribune Northern Indiana Public Service Corporation Apartments & Real Estate Hotel Apartments & Real Estate Health Care Financial Institution Hotel Communications Airplane & Auto Parts Retail Retail Ethanol Plant Electric Utility Manufacturing Newspaper Publishing Gas Utility $40,395,200 1 4.40% $ 7,172,300 5 1.17% 16,737,300 2 1.82% - - 15,850,600 3 1.73% - - 12,841,670 4 1.40% - - 11,399,300 5 1.24% - - 10,659,900 6 1.16% 6,627,870 6 1.08% 10,563,700 7 1.15% 9,286,540 3 1.52% 9,984,880 8 1.09% 28,027,260 1 4.58% 9,329,400 9 1.02% 4,338,090 9 0.71% 9,189,400 10 1.00% - - _ - 12,172,265 2 1.99% _ - 9,258,900 4 1.51% _ - 5,910,743 7 0.97% _ - 4,468,475 8 0.73% _ - 4,295,640 10 0.70% $146,951,350 16.02% $91,558,083 14.96% Total Net Assessed Value -Teo Largest Taxpayers Total Net Assessed Value $917,178,241 100.00% $611,845,695 100.00% Note: In 2006 separate schedules are prepared for the ten largest taxpayers based on real and personal property assessed values because this is how the tax information is maintained by the St. Joseph County Auditor's Office. In 1997, a consolidated schedule for real and personal property was prepared. Source: St. Joseph County Auditor's Office and 1997 City of South Bend Comprehensive Annual Financial Report City of South Bend, Indiana Principal Employers -Current and Nine Years Ago December 31, 2006 r 2006 1997 Number of Number of Employer Type of Business Employees Rank Employees Rank FTE's FTE's University of Notre Dame College/University 4,200 1 3,905 1 Memorial Health System Health Care 3,600 2 2,750 3 South Bend Community School Corporation Public Schools 3,338 3 3,200 2 St. Joseph Regional Medical Center, Inc. Health Care 3,260 4 2,524 4 AM General Manufacturing/Assembly 2,292 5 1,244 10 St. Joseph County Government 2,025 6 1,308 9 The Diocese of Fort Wayne/South Bend Parochial Schools 1,750 7 1,750 5 Indiana University at South Bend College/University 1,400 8 1,439 7 City of South Bend Government 1,288 9 1,322 8 Madison Center Counseling/MentaI Health 1,239 10 604 -- HoneywelUAllied Signal/Bendix Airplane & Auto Parts -- -- 1,449 6 Source -Chamber of Commerce of St. Joseph County, City of South Bend Department of Administration and Finance, and telephone calls to individuals employers for 1997 information. (Information not available for The Diocese of Fort Wayne/South Bend for 1997.) City of South Bend, Indiana Ten Largest Taxpayers -Personal Properly December 31, 2006 Net Assessed Personal Percent Taxpayer Type of Business Value of Total Honeywell Airplane & Auto Parts American Electric Power Electric Utility Indiana Bell Telephone/SBC Communications Telephone Company United Parcel Service Parcel Delivery Northern Indiana Public Service Company Natural Gas Utility Comcast Cable Televison ~~,, Federal Mogul Powertrain Systems Automotive Supplier N South Bend Tribune Company Newspaper Publishing New Energy Corporation Ethanol Production Robert Bosch Corporation Automotive Supplier $40,235,660 34,379,280 31,543,480 22,412,790 20,974,860 17,243,660 15,272,250 9,783,750 9,698,670 9,029,050 6.78% 5.80% 5.32% 3.78% 3.54% 2.91 2.57% 1.65% 1.64% 1.52% Total Net Assessed Value -Ten Largest Taxpayers Total Net Assessed Value $210,573,450 $593,156,588 Information on the ten largest personal property taxpayers is not available for 1997. 35.50% 100.00% Source: St. Joseph County Auditor's office City of South Bend, Indiana Operating Indicators by Function/Program Last Ten Fiscal Years Fiscal Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Function/program Police Physical arrests Parking violations Traffic violations Fire Emergency responses Fires extinguished Inspections Refuse collection Refuse collected (tons per day) ~ Other public works ~'' Street resurfacing (miles) Potholes repaired (tonnage) Parks and recreation Athletic field permits issued Fitness Center Admissions Water New billable housing starts Water mains breaks Average daily consumption (thousands of gallons) Wastewater Average daily sewage treatment (thousands of gallons) Sources: Various city departments N/A -information not available 4,782 4,796 4,821 4,889 4,873 4,990 5,003 5,041 5,056 5,932 795 777 763 751 760 623 655 688 722 515 15,026 15,184 14,920 14,212 13,317 13,936 13,873 14,052 13,411 16,583 17,620 16,537 17,500 18,935 20,224 20,112 19,429 19,031 20,438 21,815 484 449 686 742 422 485 541 407 564 601 9,336 9;215 9,152 8,954 8,906 10,332 5,375 4,820 5,584 4,875 242 256 252 169 243 266 284 266 238 269 N/A N/A 23.80 26.30 22.10 28.00 27.50 30.20 29.30 15.00 N/A N/A 650.89 577.20 653.83 389.10 341.87 560.41 372.06 239.88 N/A N/A N/A N/A N/A N/A 700 700 750 700 0 0 0 0 871 16,773, 33,361 35,426 37,247 61,452 378 444 412 388 401 407 439 427 445 471 62 60 96 90 76 72 90 78 80 54 20,368 21,795 22,263 20,848 20,939 22,678 20,269 19,461 20,071 17,704 44,000 44,000 42,800 44,100 44,100 44,100 38,200 31,800 31,800 32,800 City of South Bend, Indiana Capital Asset and Infrastructure Statistics by Function/Program Last Ten Fiscal Years Fiscal Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Function/program Police Stations 1 1 1 1 1 1 1 1 1 1 Zone offices 2 2 2 2 2 2 2 2 2 2 Patrol units 22 22 22 24 24 24 24 25 25 25 Fire Stations 11 11 11 11 11 11 11 11 11 11 Rescue units 31 31 31 31 31 31 31 31 31 31 Refuse collection Collection trucks 25 25 25 25 25 24 24 21 23 22 Other public works Streets (miles) N/A N/A 492 494 494 496 496 498 498 500 ~, Streetlights 105 105 108 108 108 109 109 109 109 109 ~ Traffice signals 156 156 158 160 161 161 162 163 164 167 Parks and recreation Acreage 1,278 1,278 1,278 1,278 1,278 1,278 1,292 1,292 1,292 1,292 Playgrounds 47 47 47 47 47 47 47 47 47 47 Baseball/softball diamonds 26 26 26 26 26 26 26 26 26 26 Soccer/football fields 17 17 17 17 17 17 17 17 17 17 Swimming pools 2 2 2 2 2 2 2 2 2 2 Community center 4 4 4 5 5 5 5 5 5 5 Water Water mains (miles) 485 494 498 510 520 527 529 .538 547 553 Fire hydrants 4,256 4,302 4,421. 4,547 *4,354 4,481 4,669 4,819 4,914 5,013 Storage capacity (thousands of gallons) 15,800 15,800 15,800 15,800 15,800 15,800 17,300 17,300 17,300 17,300 Wastewater Sanitary sewers (miles) 540 540 540 540 540 540 540 540 540 540 Storm sewers (miles) 200 200 200 200 200 200 200 200 200 200 Treatment capacity (thousands of gallons) 48,000 48,000 48,000 48,000 48,000 48,000 48,000 48,000 48,000 48,000 * No longer includes Clay hydrants Sources: Various city departments N/A -information not available City of South Bend, Indiana Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (rate per x700 of assessed value) City Direct Rates Overlapping Rates Fiscal General Parks/ Firefighters' Police Year Fund Recreation Pension Pension 1996!1997 5.3247 0.9082 0.1673 0.1500 1997/1998 5.4927 0.9410 0.1733 0.1555 199811999 5.7504 0.9851 0.1815 0.1627 199912000 5.8440 0.9906 0.1825 0.1636 2000/2001 6.1877 1.0442 0.1948 0.1746 200112002 (1) 2.1304 0.3591 0.0669 0.0600 200212003 1.5668 0.2647 0.0493 0.0442 2003/2004 1.6871 0.2859 0.0532 0.0477 200412005 1.6845 0.2902 0.0540 0.0465 200512006 1.7386 0.2981 0.0554 0.0498 Source: St Joseph County Auditor Cumulative Caphal Total St Joseph Schools State/ Development Direct County Districts Township Library Other Total 0.1200 6.6702 3.2256 5.8594 0.0920 0.7106 0.4469 17.0047 0.1500 6.9125 3.0079 6.0293 0.0967 0.6886 0.5077 17.2427 0.1500 7.2297 3.5002 5.8978 0.1020 0.6933 0.5166 17.9396 0.1500 7.3307 3.1142 5.9365 0.2256 0.7059 0.5267 17.8396 0.1500 7.7513 3.1402 6.3673 0.1123 0.7366 0.7561 18.8638 0.0287 2.6451 0.9473 2.1725 0.0382 0.2496 0.2501 6.3028 0.0356 1.9606 0.7366 1.4792 0.1122 0.1686 0.2240 4.6812 0.0376 2.1115 0.7652 1.6201 0.0923 0.1830 0.2209 4.9930 0.0376 2.1148 0.7831 1.5969 0.0276 0.1654 0.1828 4.6906 0.0376 2.1795 0.9899 1.6033 0.0269 0.2027 0.1501 5.1524 i,._, (t) The 2001 pay 2002 tax rtes were converted by current tax legislation from 33°k to 100°~ of assessed valuation. U't This conversion has no affect on tax dollars collected. Assessed values increased and tax rates decreased. U'1 City of South Bend, Indiana Assessed Value and Actual Value of Taxable Property Last Ten Fiscal Years r cn Year 1996/1997 1997/1998 1998/1999 1999/2000 2000/2001 2001/2002 (2) 2002/2003 2003/2004 2004/2005 2005/2006 Real Property $612,390,430 616,031,000 625, 759, 390 638,496,180 647,889,690 1,970,940,960 3,849,091,300 3,731,377,160 3,764,507,180 3,789,447,190 $247,767,230 253,013,925 247,603,.471 269,152,472 270,484,158 809,870,700 816,672,723 659,263,940 689,419,365 655,066,401 $23,734,600 22,850,850 23,807,830 25,550,230 26,148,300 85, 998,130 74,065,200 103,129,310 105,604,270 98,165,420 Less: Non-Taxed Property (1) $272,046,565 272,744,026 271,363,045 286,566,286 295,246,339 907, 974, 963 1,771,726,609 1,685,920,064 1,740,625,997 1,707,413,121 Total Taxable Assessed Value $611,845,695 619,151,749 625,807,646 646,632,596 649,275,809 1, 958,834,827 2,968,102,614 2,807,850,346 2,818,904,818 2,835,265,890 (1) mortgage exemptions, tax-exempt property, tax increment financing, tax abatements, enterprise zones (2) The 2001 pay 2002 and subsequent tax rates were converted by current state legislation from 33% to 100% of assessed valuation. This conversion had no affect on total dollars collected. Assessed vanes increased and tax rates decreased. Personal Utilities Property Property Total City Tax Rate $6.6702 6.9125 7.2297 7.3307 7.7513 2.6451 1.9606 2.1115 2.1148 2.1795 Source: St. Joseqh County Auditor's Office CITY OF SOUTH BEND, INDIANA DETAIL OF NET ASSESSED VALUATION (For the Year 2005 Payable 2006) South Bepd South Bepd South Bend South Bepd South Bend South Bend Centre Twp Clav Two ~ German Twp Penp Twp Warren Two Portaee Two Totals Value of land $ 78,732,020.00 $ 10,]77,600.00 $ 44,277,400.00 $ 11,819,720.00 1,692,900.00 $ 333,738,540.00 $ 480,438,180.00 Valueofimprovements 393,631,300.00 91,759,600.00 392,052,400.00 68,197,800.00 17,855,000.00 2,345,512,910.00 3,309,009,010.00 Total value of real estate 472,363,320.00 101,937,200.00 - 436,329,800.00 80,017,520.00 19,547,900.00 2,679,251,450.00 3,789,447,190.00 Less: Mortgage, veterans, blind, age 65 & other exemptions (122,940,610.00) (19,591,590.00) (36,868,720.00) (5,438,070.00) 0.00 (652,221,281.00) (837,060,271.00) Taxcxemptproperty (32,681,550.00) (8,048,270.00) (15,935,860.00) (9,790,220.00) 0.00 (289,807,059.00) (356,262,959.00) Tax increment financing (8,054,570.00) 0.00 (171,836,376.00) 0.00 (6,353,546.00) (92,089,804.00) (278,334,296.00) Tax Abatements (15,624,770.00) 0.00 (44,476,780.00) (2,319,500.00) (13,062,340.00) (42,187,585.00) (117,670,975.00) Net value of real estate 293,061,82D.00 74,297,340.00 167,212,064.00 62,469,730.00 132,014.00 1,602,945,721.00 2,200,118,689.00 Gross personal property assessments 39,115,430.00 9,280,490.00 200,969,770.00 1,607,480.00 00 0 11,1]9,249.00 0 00 392,973,982.00 337 390 00) (7 655,066,401.00 124 850.00) (18 Less: Tax Abatements t rt j T (445,450.00) 00) (1 734 790 0.00 030.00) (119 (1Q,342,010:00) (4,586,370.00) . (524,720.00) . 0.00 , . , (50,360,030.00) , , (57,324,940.00) prope y I ax-exemp ~I Enterprise Zone , , . 0.00 , 0.00 (29,040.00) 0.00 0.00 (30,489,020.00) (30,518,060.00) Tax increment financing 0.00 0.00 0.00 0.00 0.00 (12,116,770.00) (12,]]6,770.00) Net value of personal property 36,935,190.00 9,161,460.00 186,012,350.00 1,082,760.00 11,119,249.00 292,670,772.00 536,981,781.00 Net value of utilities 6,302,820.00 2,768,760.00 12,030,690.00 775,480.00 0.00 76,287,670.00 98,165,420.00 Total net assessed valuatiop $ 336,299,830.00 $ 86,227,560.00 S 365,255,104.00 $ 64,327,970.00 11,251,263.00 $ 1,971,904,163.00 $ 2,835,265,890.00 PerceptageofTotal 11.86% 3.04% 12.88% 2.27% 0.40% 69.55% 100.00% Percept 77.60% 18.94% 3.46% 100.00% Source: St. Joseph Couuty Auditor's Office. CITY OF SOUTH BEND, INDIANA ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN YEARS Real Property Personal Property Utilities TOTAL Tax Year/ Assessed Estimated Assessed Estimated Assessed Estimated Assessed Estimated Collection Year Value Value Value Value Value Value Value Value 1996/1997 $412,196,114 $1,236,588,342 $175,914,981 $527,744,943 $23,734,600 $71,203,800 $611,845,695 $1,835,537,085 1997/1998 414,421,223 1,243,263,669 181,879,676 545,639,028 22,850,850 68,552,550 619,151,749 1,857,455,247 1998/1999 418,589,739 1,255,769,217 183,410,077 550,230,231 23,807,830 71,423,490 625,807,646 1,877,422,938 1999/2000 417,107,034 1,251,321,102 203,975,332 611,925,996 25,550,230 76,650,690 646,632,596 1,939,897,788 2000/2001 421,717,995 1,265,153,985 201,409,514 604,228,542 26,148,300 78,444,900 649,275,809 1,947,827,427 2001/2002* 1,272,814,731 3,818,444,193 600,021,966 1,800,065,898 85,998,130 257,994,390 1,958,834,827 5,876,504,481 2002/2003* 2,320,892,057 6,962,676,171 573,145,357 1,719,436,071 74,065,200 222,195,600 2,968,102,614 8,904,307,842 2003/2004" 2,215,693,906 6,647,081,718 489,027,130 1,467,081,390 103,129,310 309,387,930 2,807,850,346 8,423,551,038 ~ 2004/2005* 2,179,070,901 6,537,212,703 534,229,647 1,602,688,941 105,604,270 316,812,810 2,818,904,818 8,456,714,454 ~ 2005/2006* 2,200,118,689 6,600,356,067 536,981,781 1,610,945,343 98,165,420 294,496,260 2,835,265,890 8,505,797,670 Source: St. Joseph County Auditor's office. Real property was reassessed effective in 1989 payable in 1990, 1995 payable in 1996 and again in 2002 payable 2003. * The 2001 pay 2002 tax rates were converted by current state legislation from 33% to 100% of assessed valuation. This conversion will have no affect on total dollars. Assessed values will increase and tax rates will decrease. CITY OF SOUTH BEND, INDIANA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN YEARS Current Tax Total Tax Outstanding Collections Delinquent Collections as Outstanding Delinquent Taxes Tax Year/ Current Current Tax as a Percent Tax & Penalty Total Tax a Percent of Delinquent as a Percent of Collection Year Tax Levy Collections of Tax Levy Collections Collections Current Tax Levy Taxes Current Tax Levy ]996/1997 $41,101,053 $39,142,126 95.23% $670,157 $39,812,283 96.86% $3,104,937 7.55% 1997/1998 43,117,846 .41,251,054 95.67% ],493,344 42,744,398 99.13% 2,875,266 6.67% 1998/1999 45,509,370 43,263,712 95.07% 1,425,712 44,689,424 98.20% 3,422,224 7.52% 1999/2000 47,658,495 44,930,534 94.28% 1,638,076 46,568,610 97.71% 4,10],099 8.61% 2000/2001 53,823,245 50,904,463 94.58% 1,332,888 52,237,351 97.05% 4,582,962 8.51% _ 2001/2002 52,762,157 49,330,749 93.50% 1,789,947 51,120,696 96.89% 5,083,451 9.63% 2002/2003 58,326,066 53,726,528 92.11% 2,928,994 56,655,522 97.14% 6,203,521 10.64% 2003/2004 59,875,358 56,031,449 93.58% 2,914,419 58,945,868 98.45% 6,189,942 10.34% 2004/2005 60,833,109 56,114,865 92.24% 2,335>278 58,450,143 96.08% 8,093,237 13.30% N 2005/2006 62,058,519 58,849,337 94.83% 3,847,872 62,697,209 101.03% 5,495,442 8.86% Cn Source - St. Joseph County Auditor's Settlement Worksheets. Calculations by City of South Bend Department of Administration and Finance. CITY OF SOUTH BEND, INDIANA COMPUTATION OF LEGAL DEBT MARGIN December 31, 2006 CIVIL CITY Net Assessed Valuation (2006 pay 2007) of Taxable Property in South Bend* $ 949,317,041 Debt limit: 2% of net assessed value 18,986,341 Amount of debt applicable to limit: Total bonded debt subject to debt limit: EDIT Bonds Less: Cash on hand designated for debt service Total debt applicable to debt limit Legal debt mazgin -Civil City Amouut of debt subject to limit/debt limit $ 7,440,000 72,175 7,367,825 $ 11,618,516 38.51% ~, REDEVELOPMENT AUTHORITY rn 0 Net Assessed Valuation (2006 pay 2007) of Taxable Property in South Bend* $ 949,317,041 Debt limit: 2% of net assessed value 18,986,341 Amount of debt applicable to limit: Total bonded debt subject to debt limit: Studebaker Bond $ 0 Less: Cash on hand designated for debt service 0 Total debt applicable to debt limit 0 Legal debt mazgin -Redevelopment Authority $ 18,986,341 Amouut of debt subject to limit/debt limit 0.00% *The 2006 pay 2007 assessed valuation is not available at time of printing. The amount calculated is an estimation. A 2% debt limit is established by the Constitution of the State of Indiana. This limit is established for general obligation bonds, Economic Development Income Tax revenue bonds, tax revenue notes and other types of indebtedness. This limitation does not include revenue bonds payable from governmental funds (excluding EDIT bonds) shown in the general long teen debt account goup. Indiana law allows the creation of sepazate municipal corporations to provide vital governmental functions. Each of these municipal corporations (including the Redevelopment Authority and Redevelopment Commission) has its own 2% debt limit, even if they have the same or similaz boundaries. City of South Bend, Indiana Legal Debt Margin Information Last Ten Fiscal Years Fiscal Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Civil Ci Debt Limit (1), $12,236,914 $12,383,035 $12,932,652 $12,985,516 $12,992,413 $13,711,844 $18,505,824 $18,496,899 $18,792,699 $18,986,341 Total Net Debt Applicable To Limit 11,715,000 11,530,000 11,150,000 10,750,000 10,330,000 9,882,500 9,412,500 8,937,500 8,395,000 7,367,825 Legal Debt Margin 521,914 853,035 1,782,652 2,235,516 2,662,413 3,829,344 9,093,324 9,559,399 10,397,699 11,618,516 Percentage of Debt Limit 95.73% 93.17% 86.22% 82.78% 79.51% 72.07% 50.86% 48.32% 44.67% 38.81% N rn Redevelopment Authority Debt Limit (1) $12,236,914 $12,383,035 $12,932,652 $12,985,516 $12,992,413 $13,711,844 $18,505,824 $18,496,899 $18,792,699 $18,986,341 Total Net Debt Applicable To Limft 4,310,000 3,855,000 3,380,000 2,880,000 2,355,000 1,810,000 1,235,000 628,000 0 0 Legal Debt Margin 7,926,914 8,528,035 9,552,652 10,105,516 10,637,413 11,901,844 17,270,824 17,868,899 18,792,699 18,986,341 Percentage of Debt Limit 35.22% 31.73% 26.14% 22.18% 18.13% 13.20% 6.67% 3.40% 0.00% 0.00% (1) A 2% of net assessed value debt limit has been established by the Constitution of the State of Indiana. City of South Bend, Indiana Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activties Business-Type Activities South Bend General _ Total DeM Metropolitan Debt Fiscal Obligation Revenue Mortgage NoteslLOans Capital Revenue Mortgage Notes/LOans Capital Primary Estimated Per Area Net Pement of Year Bonds Bonds Bonds ~ Payable Leases Bonds Bonds Payable Leases GovemmeM Population Capita Eamings Net Eamings 1997 $4,530,000 $58,420,000 $0 $800,000 $8,742,508 $40,215,000 $0 $0 $2,946,532 $115,654,040 102,100 $1,133 1:4,051,000,000 2.85% 1998 4,085,000 52,125,000 0 1,455,000 6,884,599 55,970,000 0 211,000 1,839,761 122,570,360 102,100 1,200 4,321,000,000 2.66% 1999 3,620,000 50,100,000 2,383,664 3,605,000 5,415,856 58,868,239 0 193,000 1,269,772 125,455,531 99,417 1,262 x,573,000,000 2.74% 2000 3,135,000 47,425,000 2,112,792 2,815,705 5,315,127 33,970,000 ~ 0 16,987,125 1,386,997 113,147,746 107,769 1,050 x,742,000,000 2.39% 2001 2,620,000 60,565,000 9,903,603 3,040,000 3,471,901 31,380,000 1,137,000 22,411,957 814,025 135,343,486 107,789 1,256 5,022,000,000 ~ 2.70% 2002 2,085,000 63,175,000 9,565,497 8,172,424 3,455,652 34,675,000 1,137,000 21,999,758 578,455 144,843,788 108,558 1,359 5,191,000,000 2.79% 2003 1,525,000 85,070,000 30,112,808 6,131,984 3,659,322 31,625,000 1,099,005 21,338,647 794,885 183,356,651 105,494 1,738 5,530,000,000 3.32% 2004 935,000 82,135,000 29,525,289 7,946,868 2,971,007 39,815,000 1,058,415 21,730,271 520,389 186,639,239 105,494 1,769 5.760,000,000 3.23% 2005 320,000 84,225,000 28,994,057 9,539,771 3,454,627 35,990,000. 1,015,980 20,659,684 1,710,033 185,909,332 105,494 1,762 8.000.000,000 3,10% 2006 0 82,445,000 27,337,124 11,758,552 3,533,187 44,345,000 972,315 19,258,433 1,523,594 191,173,205 105,494 1,812 8,250,000,000 3.06% Sources: City of South Bend Comprehensive Annual Financial Reports Population statistics obtained from the U.S. Census Bumau. Most recent estimate was for 2003. Net Eamings Informa8on obtained from STATS, Indiana, a website sponsored by the Indiana Business Research Center at Indiana F-~ Univeristy's Kelly School of Business. Webshe: www.stats.indiana.edu. intorma8on updated through 2004. Projected for 2005 and 2006. N CITY OF SOUTH BEND, INDIANA COMPUTATION OF DIRECT AND OVERLAPPING DEBT December 31, 2006 Percentage Amount Ratio of Debt/ Ratio of Debt/ Gross Applicable to Applicable to Debt Per Assessted Net Debt South Bend South Bend Capita Value Earnings Direct Debt• City of South Bend General Obligation Bonds Revenue Bonds - Govemmental Activities Revenue Bonds -Business-Type Activities Mortgage Bonds - Govemmental Activities Mortgage Bonds -Business-Type Activities Notes Payable -Governmental Activities Notes Payable -Business-Type Activities Capital Leases -Governmental Activities Capital Leases -Business-Type Activities ,~ Total Direct Debt of Primary Government w Overlappine Debt (3)(4) St. Joseph County St. Joseph County Public Library South Bend Community Schools Penn-Hams-Madison School Corp. Mishawaka Penn Township Public Library Total Overlapping Debt Total Direct and Overlapping Debt $ 0 100.00% $ 0 82,445,000 100.00% 82,445,000 44,345,000 100.00% 44,345,000 27,337,124 100.00% 27,337,124 972,315 100.00% 972,315 11,758,552 100.00% 11,758,552 19,258,433 100.00% 19,258,433 3,533,187 100.00% 3,533,187 1,523,594 100.00% 1,523,594 191,173,205 $ 1,812.17 6.7% 3.1% $ 76,040,000 30.78% 23,405,112 2,700,000 51.63% 1,394,010 212,648,369 54.42% 115,723,242 114,439,995 2.47% 2,826,668 9,160,000 2.94% 269,304 143,618,336 1,361.39 5.1% 2.3% $ 334,791,541 $ 3,173.56 11.8% 5.4% Ratio Factors Population - 2004 US Census Bureau 105,494 (1) Net Assessed Valuation (2004 payable 2005) $ 2,835,265,890 South Bend Metropolitan Statistical Area Net Earnings $ 6,250,000,000 (2) (1) Population statistics obtained from the U.S. Census Bureau (http:/quickfacts.census.gov). Most recent estimate was for 2003. (2) Net earnings information obtained from STATS Indiana Website (www.stats.indiana.edu). Updated through 2004. Projected through 2006. (3) Overlapping debt information obtained from Crowe Chizek and Company, LLP (4) Overlapping debt percentages are based the net assessed value of South Bend properties in proportion to the total net assessed value. CITY OF SOUTH BEND, INDIANA RATIO OF NET GENERAL BONDED DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA LAST TEN YEARS N Tax Year/ CollectionYear Assessed Population (1) Value Gross Bonded Debt Debt Service Monies Available Net Bonded Debt Percent of Net Bonded Debt Net To Assessed Bonded Debt Value Per Capita 1996/1997 102,100 611,845,695 4,530,000 220,000 4,310,000 0.70% 42.21 1997/1998 102,100 619,151,749 4,085,000 230,000 3,855,000 0.62% 37.76 1998/1999 99,417 625,807,646 3,620,000 240,000 3,380,000 0.54% 34.00 1999/2000 107,789 646,632,596 3,135,000 255,000 2,880,000 0.45% 26.72 2000/2001 107,789 649,275,809 2,620,000 265,000 2,355,000 0.36% 21.85 2001/2002 106,558 1,948,862,000 (2) 2,085,000 275,000 1,810,000 0.09% 16.99 2002/2003 106,558 2,968,102,614 (2) 1,525,000 290,000 1,235,000 0.04% 11.59 2003/2004 105,494 2,807,850,346 (2) 935,000 305,000 630,000 0.02% 5.97 2004/2005 105,494 2,818,940,818 (2) 320,000 320,000 0 0.00% 0.00 2006/2007 105,494 2,835,265,890 (2) 0 0 0 0.00% 0.00 (1) Population statistics obtained from the U.S. Census Bureau (http:/quickfacts.census.gov). Most recent estimate was for 2003. (2) The 2001 pay 2002 tax rates were converted by current state legislation from 33% to 100% of assessed valuation. This conversion will have no affect on total dollars. Assessed values will increase and tax rates will decrease. CITY OF SOUTH BEND, INDIANA RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL BONDED DEBT TO TOTAL GENERAL GOVERNMENTAL EXPENDITURES LAST tEN YEARS rn cn Total Fiscal Year Principal Total Debt Interest ~ Service Ratio of Debt Service General Government To Total General Govt. Expenditures Expenditures 1997 $320,000 $282,010 $602,010 $78,868,812 0.76% 1998 445,000 207,418 652,418 88,454,203 0.74% 1999 465,000 188,173 653,173 96,063,811 0.68% 2000 485,000 168,120 653,120 100,389,862 0.65% 2001 515,000 145,830 660,830 103,772,221 0.64% 2002 535,000 121,778 656,778 114,015,410 0.58% 2003 560,000 96,260 656,260 124,125,088 0.53% 2004 590,000 66,260 656,260 133,062,773 0.49% 2005 615,000 39,445 654,445 130,713,640 0.50% 2006 320,000 8,160 328,160 129,527,536 0.25% CITY OF SOUTH BEND, INDIANA SCHEDULE OF REVENUE BOND COVERAGE WATER UTILITY BONDS LAST TEN YEARS Gross Net Revenue Debt Service Requirements Operating Operating Available for Debt Year Revenue Expenses (1) Debt Service Principal Interest Total Coverage 1997 $6,564,766 $5,625,430 $939,336 $250,000 $215,165 $465,165 202% 1998 10,410,313 5,545,310 4,865,003 1,385,000 1,313,900 2,698,900 180% 1999 10,873,836 6,431,774 4,442,062 1,535,000 1,168,185 2,703,185 164% 2000 10,162,297 6,174,716 3,987,581 1,605,000 1,100,993 2,705,993 147% ~ 2001 9,987,425 6,421,198 3,566,227 1,675,000 1,031,523 2,706,523 132% °i 2002 11,756,071 6,317,766 5,438,305 1,755,000 956,443 2,711,443 201% 2003 11,745,196 6,637,856 5,107,340 1,845,000 878,570 2,723,570 188% 2004 11,323,882 7,256,695 4,067,187 1,935,000 795,540 2,730,540 149% 2005 11,926,479 7,770,464 4,156,015 2,040,000 708,030 2,748,030 151% 2006 13,166,166 7,369,035 5,797,131 2,485,622 1,042,309 3,527,931 164% (1) Operating expenses exclude depreciation and payment in lieu of taxes. Operating revenue used to make debt service payments is obtained primarily through monthly user charges to water customers. CITY OF SOUTH BEND, INDIANA SCHEDULE OF REVENUE BOND COVERAGE WASTEWATER UTILITY BONDS LAST 7EN YEARS Year Gross Operating Revenue Operating Expenses (1) Net Revenue Available for Debt Service Debt Service Requirements Debt Coverage Principal Interest Total 1997 $12,536,805 $6,432,719 $6,104,086 $500,000 $410,838 $910,838 670% 1998 12,584,026 6,577,011 6,007,015 515,000 389,838 904,838 664% 1999 12,502,608 7,163,295 5,339,313 560,000 366,663 926,663 576% 2000 12,625,139 7,626,129 4,999,010 575,000 341,463 916,463 545% 2001 12,388,161 7,801,488 4,586,673 0 (2) 682,782 682,782 672% 2002 12,096,411 7,618,883 4,477,528 655,000 238,963 893,963 501% 2003 12,415,376 8,175,595 4,239,781 680,000 185,175 865,175 490% 2004 14,124,695 9,337,324 4,787,371 705,000 266,586 971,586 493% 2005 14,639,963 11,200,692 3,439,271 1,180,000 577,943 1,757,943 196% 2006 18,058,615 9,650,301 8,408,314 2,481,626 1,273,423 3,755,049 224% rn (1) Operating expenses exclude depreciation and payment in lieu of taxes. (2) The Sewage Works Revenue Bonds were refunded during 2001. Operating revenue used to make debt service payments is obtained primarily through monthly user charges to sewer customers. CITY OF SOUTH BEND, INDIANA COUNTY INCOME TAX REVENUE LAST TEN YEARS ECONOMIC DEVELOPMENT INCOME TAX (EDIT) REVENUE Total Est South Bend South Beod Distribution EDIT County EDIT Rate of EDIT Rate of as a Percent Year Tax Rate (Il Collections Growth Distribution* Growth of Total 1997 0.10% $3,800,000 7.28% $1,466,029 6.03% 38.6% 1998 0.20% 7,849,187 106.56% 2,871,297 95.86% 36.6% 1999 0.20% 8,253,561 5.15% 3,156,441 9.93% 38.2% 2000 0.20% 8,717,424 5.62% 3,105,473 -1.61% 35.6% 2001 0.20% 9,240,470 6.00% 3,417,763 10.06% 37.0% 2002 0.20% 14,687>146 (2) 58.94% 5,462,867 (2) 59.84% 37.2% 2003 0.20% 9,378,695 -36.14% 3,689,202 -32.47% 39.3% 2004 0.20% 9,106,517 -2.90% 3,448,688 -6.52% 37.9% 2005- 0.20% 8,984,150 -1.34% 3,464,152 0.45% 38.6% 2006 0.20% 10,610,460 18.10% 4,013,475 15.86% 37.8% {1) This tax was fast enacted as of July 1, 1995 at the rate of 0.1%of City residents' adjusted Boss income. The rate was increased to 0.2%etl'ective July 1, 1997. r-~ ~ (2) This years estimate includes a "catch-up" amount as a result of prior years conservative estimates. This increase is one time amount. Future years distributions will be closer to 2001 amounts. COUNTY OPTION INCOME TAX (COITI REVENUE Total South Bend South Beod Distribution COIT County COIT Rate of COIT Rate of as a Percent Year Tax Rate (31 Distributions Growth Distribution Growth of Total 1998 0.20% $2,361,605 n/a $732,080 n/a 31.0% 1999 0.30% 5,538,599 134.53% 1,698,624 132.03% 30.7% 2000 0.40% 7,326,809 32.29% 2,378,487 40.02% 32.5% 2001 0.50% 14,106,045 92.53% 4,491,922 88.86% 31.8% 2002 0.60% 29,185,724 106.90% 9,458,584 110.57% 32.4% 2003 0.60% 23,625,717 -19.05% 8,015,301 -15.26% 33.9% 2004 0.60% 21,703,185 -8.14% 7,001,199 -12.65% 32.3% 2005 0.60% 17,250,225 -20.52% 5,490,218 -21.58% 31.8% 2006 0.60% 19,623,593 13.76% 6,410,405 16.76% 32.7% (3) This tax was fast enacted as of July 1, 1997 at the rate of 0.2%of City residents' adjusted gross income. The COff rate increased 0.1%each year until it reached 0.6%as of July 1, 2001. The above collections/distribution amounts aze net of the additional 6%(1998), 7%(1999) and 8% (2000 and 2001) homestead credits that accompanied the passage of this income tax. CITY OF SOUTH BEND, INDIANA CITY'S TEN LARGEST WATER CUSTOMERS December 31, 2006 Name South Bend Community Schools Allied Signal Aerospace Company Memorial Health Systems Steel Warehouse St. Joseph Medical System Aramark Uniform Services Inc. Federal Mogul South Bend Inc Countryside Association Bosch Braking System Valley American Limited Partnership Total of Ten Largest Water Customers Total for Operating Revenue for Water Works Percentage of Total Water 2006 Operating Usage Revenue Revenue CCF* $ 165,852 1.26% 90,223 161,527 1.23% 192,521 103,332 0.78% 113,258 61,855 0.47% 78,136 55,480 0.42% 54,865 36,351 0.28% 47,171 22,286 0.17% 26,870 22,110 0.17% 26,761 22,089 0.17% 26,462 15,238 0.12% 17,410 $ 666,120 5.06% $ 13,166,166 100.00% *Hundreds of Cubic Feet CITY OF SOUTH BEND, INDIANA CITY'S TEN LARGEST SEWAGE WORKS CUSTOMERS December 31, 2006 0 Percentage of Total Water 2006 Operating Name Revenue Revenue UN TEK Plant University of Notre Dame New Energy Company of Indiana Allied Signal Aerospace South Bend Community Schools Memorial Health System St. Joseph Medical System Sisters of the Holy Cross Aramark Uniform Services Town of New Carlisle Total of Ten Largest Sewer Customers Total for Operating Revenue for Wastewat~ *Hundreds of Cubic Feet Usage CCF* $ 951,815 5.27% 766,911 879,655 4.87% 802,088 469,393 2.60% 358,864 310,385 1.72% 189,652 305,342 1.69% 89,106 199,089 1.10% 113,245 118,685 0.66% 54,865 91,916 0.51% 66,495 71,364 0.40% 47,171 41,528 0.23% 45,129 $ 3,439,172 19.04% $ 18,058,615 100.00% City of South Bend, Indiana Property Tax Collections -Cash Basis r Fund 2003 2004 2005 2006 Fuud Name Number Actual Chg Actual Chg Actual Chg Actual Chg General Fund . Parks & Recreation Redevelopment Bonds Studebaker Corridor College Football Hall of Fame Debt Service Airport TIF District Cumulative Capital Development Sample-Ewing TIF District South Bend Central Development Area TIF District West Washington Street TIF District Central Medical Service Area TIF District Southside Development Area TIF District Erskine Commons TIF District Erskine Village TIF District Fire Department Employees Pension Police Department Employees Pension Total 101 $44,986,015.00 12%$44,149,333.00 201 7,602,784.00 12% 7,479,711.00 310 673,281.00 12% 609,732.00 313 1,301,840.00 3% 1,300,588.00 324 6,546,483.69 37% 5,588,045.00 406 1,022,511.00 8% 984,945.00 414 685,924.77 20% 533,304.00 420 3,018,424.16 27% 2,606,365.00 422 254,555.06 516% 216,948.00 426 318,652.814467% 337,721.00 430 0.00 0% 0.00 431 0.00 o°i° 0.00 432 0.00 o°r° 0.00 701 1,416,008.00 12% 1,293,471.00 702 1,269,527.00 12% 1,128,733.00 $69,096,006.49 15% $66,228,896.00 -2% $44,999,550.00 -2% 7,754,973.00 -9% 565,420.00 o% 1,246,067.00 -is% 6,246,028.00 -4% 1,004,779.00 -22% 525,671.37 -14% 2,359,430.01 -15% 193,910.57 6% 329,268.89 o% 25,350.91 0% 547.62 0% 109,247.79 -9% 1,443,033.00 -11% 1,296,055.00 -4% $68,099,332.16 2%$48,768,150.00 8% 4% 8,363,955.00 8% -7% 0.00 -100% -4% 899,472.00 -28% 12% 7,515,744.08 20% 2% 1,054,963.00 5% -1% 732,355.53 39% -9% 3,283,074.86 39% -11% 255,510.04 32% -3% 333,585.02 1% 100% 28,565.37 t3% 100% 2,584.68 372% 100% 305,398.91 180% 12% 1,554,387.00 8% IS% 1,397,265.00 8% 3% $74,495,010.49 9% Source -City Accounting System CITY OF SOUTH BEND, INDIANA TOTAL COUNTY OPTION INCOME TAX DISTRIBTUIONS BY TAXING UNIT Unit of Government 2006 2005 2004 2003 2002 2001 Total County Certified Distribution $31,044,322.00 $26,484,316.00 $26,536,784.00 $28,136,084.00 $37,769,988.00 $22,452,248.00 Less: Homestead Credit (1) (9,767,699.00) (9,856,185.00) (4,559,287.00) (8,749,937.00) (8,839,985.00) (8,183,890.00) Total Distributive Shares $21,276,623.00 $16,628,131.00 $21,977,497.00 $19,386,147.00 $28,930,003.00 $14,268,358.00 Distributive Shares/Total County Distribution 68.54% 62.78% 82.82% 68.90% 76.60% 63.55% Amount St. Joseph County $8,440,988.00 $6,427,640.00 $8,578,046.00 $7,245,150.00 $11,721,648.00 $5,910,247.00 Townships 834,727.00 759,050.00 1,002,449.00 783,227.00 1,039,887.00 550,072.00 City of South Bend 6,733,129.00 5,306,680.00 6,849,450.00 6,342,861.00 9,100,110.00 4,498,381.00 Other Cities & Towns 2,616,698.00 2,028,358.00 2,658,984.00 2,536,818.00 3,644,267.00 1,753,467.00 r Libraries 1,706,495.00 1,319,023.00 1,699,459.00 1,555,407.00 2,051,510.00 999,502.00 N Special Districts 944,586.00 787,380.00 1,189,109.00 922,684.00 1,372,581.00 556,689.00 Total $21,276,623.00 $16,628,131.00 $21,977,497.00 $19,386,147.00 $28,930,003.00 $14,268,358.00 Percentage of Distribution St. Joseph County 39.67% 38.66% 39.03% 37.37% 40.52% 41.42% Townships 3.92% 4.56% 4.56% 4.04% 3.59% 3.86% City of South Bend .31.65% 31.91% 31.17% 32.72% 31.46% 31.53% Other Cities & Towns 12.30% 12.20% 12.10% 13.09% 12.60% 12.29% Libraries 8.02% 7.93% 7.73% 8.02% 7.09% 7.01% Special Districts 4.44% 4.74% 5.41% 4.76% 4.74% 3.90% Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% (1) A portion of the county option income tax is used for property tax relief through homestead credits for residential property owners. Source -State of Indiana Department of Local Government Finance COIT Distribution Reports CITY OF SOUTH BEND, INDIANA DEMOGRAPHIC STATISTICS LAST TEN YEARS South Bend Metropolitan City of South Beod South Bead South Bend City of Percent Area Percent City of South Bend Percent Metropolitan Percent Metropolitan Percent Metropolitan South Bend Increase/ Median Family Increase/ South Bend Public School Increase/ Ares Lsbor tocreeae/ Aree Increase/ Unemployment Year Population (1) (Decrease) Income (2) (Decrease) Median Age (5) Enrollment (3) (Decrease) Force (4) (Decrease) Uoemplaymeot (4) (Decrease) Rate 1997 102,100 -3.2% 33,124 -10.2% 32.7 20,915 n/a 136,673 1.5% 4,520 -16.0% 3.3% 1998 102,100 0.0% 35,249 6.4% 32.7 20,950 0.2% 135,971 -0.5% 3,799 -16.0% 2.8% 1999 99,417 -2.6% 34,203 -3.0°/a 32.7 21,195 1.2% 134,368 -1.2% 4,177 9.9% 3.1% 2000 107,789 8.4% 34,702 I.5% 32.7 21,327 0.6% 134,598 0.2% 4,550 8.9% 3.4% 2001 107,789 0.0% 40,816 17.6% 32.7 21,362 0.2% 135,360 0.6% 6,250 37.4% 4.6% 2002 106,558 -1.1% 40,816 0.0% 32.7 21,059 -1.4% 135,020 -0.3% 6,170 -1.3% 4.6% 2003 105,494 -1.0% 37,140 -9.0% 32.7 21,981 4.4% 137,040 1.5% 6,470 4.9% 4.7% 2004 105,494 0.0% 39,940 7.5% 32.7 22,140 0.7% 136,990 0.0% 5,890 -9.0% 4.3% 2005 105,494 0.0% 37,971 -4.9% 34.5 22,100 -0.2% 134,798 -1.6% 7,116 20.8% 5.3% 2006 105,494 0.0% 39,046 2.8% 34.5 21,926 -0.8% 136,217 1.1% 6,988 -1.8% 5.1% Sources: (1) U.S. Census Bureau (http:/quickfacts.census/gov). Most recent estimate was for 2003. . r ~ (2) South Bend, Indiana Wikipedia Encyclopedia. http//en.wikepedia.org (A (3) South Bend Community School Corporation Administration office (4) South Bend-Mishawaka, IN_MI Metropolitan Area Profile (hrip://www.stats.indiana.edu). - (5) U.S. Census Bureau (http://factfinder.census.gov). Information available for 2000 and 2005. CITY OF SOUTH BEND, INDIANA COMPARISON OF GROWTH RATES IN PERSONAL INCOME FOR ST. JOSEPH COUNTY, THE STATE OF INDIANA AND U.S. DISPOSABLE PERSONAL INCOME Amount in Amount in Millions Billions Annual Percentage of Increase St. Joseph U.S. Disposable St. Joseph U.S. Disposable Calendar County Indiana Personal County Indiana Personal Year Net Earnings Net Earnings Income Net Earnings Net Earnings Income 1995 3,779 86,445 6,144 1.45% 3:10% 18.95% 1996 3,913 90,847 6,512 3.55% 5.09% 5.99% 1997 4,051 95,624 6,907 3.53% 5.26% 6.07% 1998 4,321 102,779 7,415 6.67% 7.48% 7.35% 1999 4,573 108,246 7,796 5.83% 5.32% 5.14% 2000 4,742 114,757 8,422 3.70% 6.02% 8.03% 2001 5,022 115,668 8,716 5.90% 0.79% 3.49% 2002 5,191 119,546 8,872 3.37% 3.35% 1.79% 2003 5,530 125,862 9,157 6.53% 5.28% 3.21°l0 2004 5,780 132,362 9,705 4.52% 5.16% 5.98% Average Annual Growth -Most Recent 5 Years 4.80% 4.12% 4.50% Average Annual Growth -Most Recent 10 Years 4.50% 4.69% 6.60% Obtained from STATS Indiana, a website sponsored by the Indiana Business Research Center at Indiana University's Kelley School of Business.Website address: www.stats.indiana.edu. Accessed May 10, 2007. Information is updated through 2004. CITY OF SOUTH BEND, INDIANA NEW CONSTRUCTION -NUMBER OF PERMITS AND PROPERTY VALUES Last Ten Fiscal Years (Dollar Amounts in 000's) Residential Public Residential Residential Value Commercial Commercial Public Utility Number of Value Increase/ Number of Value Utility Number Value Year Permits (in 000's) (Decrease) Permits (in 000's) of Permits (in 000's) 1997 120 $10,687 -7.1% 27 $40,985 868 $]8,706 1998 143 13,586 27.1% 27 28,275 1,195 26,871 1999 186 19,119 40.7% 40 52,735 1,407 23,085 2000 160 15,833 -17.2% 18 6,792 2,355 74,127 2001 101 11,316 -28.5% 28 ]2,307 2,253 60,035 2002 107 11,707 3.5% 24 35,810 2,222 47,710 2003 140 19,573 67.2% 28 13,280 1,822 42,435 2004 147 20,203 3.2% 20 24,340 2,823 50,910 2005 166 25,123 24.4% 17 28,578 2,611 39,435 2006 102 17,241 -31.4% 21 36,749 2,282 34,836 Obtained from the Consolidated City/County Building Department and City Engineering Department Commercial, Public Utility and Manufacturing Manufact Manufacturing Tatal Value Number of Value Total Value Increase/ Permits (in 000's) (in 000'x) (Decrease) 2 $6,500 $66,191 89.2% 2 4,870 60,016 -9.3% 2 4,760 80,580 34.3% 2 3,490 84,409 4.8% 5 ]7,362 89,704 6.3% 2 2,475 85,995 -4.1% 2 375 56,090 -34.8% 3 847 76,097 35.7% 1 6,000 74,013 -2.7% 2 7,927 79,512 7.4% v cn City of South Bend, Indiana Financial Institution Data Last Ten Years (Amounts in 000's) r v rn Banks Savings and Loaus Credit Unions Total Deposits in Percent Number of Deposits Number of Deposits Number of Deposits Financial Institutions Increase/ Year Branches at June 30 Branches at June 30 Branches at June 30 Amount (Decrease) 1997 33 $1,386,678 9 $278,628 9 $827,635 $2,492,941 4.6% 1998 31 ],556,550 7 269,054 10 1,001,584 2,827,188 13.4% 1999 31 1,571,337 9 336,305 I] 1,064,852 2,972,494 5.1% 2000 33 1,634,983 9 287,561 I1 1,174,357 3,096,901 4.2% 2001 34 1,688,493 11 239,588 10 1,223,040 3,]51,121 1.8% 2002 34 1,671,954 ]1 230,681 10 1,365,450 3,268,085 3.7% 2003 27 1,669,112 10 199,232 16 1,553,939 3,422,283 4.7% 2004 30 1,400,529 10 200,558 16 1,684,765 3,285,852 -4.0% 2005 30 1,851,156 t0 195,445 16 1,798,313 3,844,914 17.0% 2006 35 2,054,972 5 89,039 16 1,857,323 4,001,334 4.1% City of South Beud Finaucial Institutious 2006 Total Deposits (Amounts iu 000's) Banks Savings and Loans Credit Unions 1st Source Bank $1,186,556 57.74% MFB Financial $89,039 100% Teacher's Credit Union $1,239,805 66.75% Key Bank National Association 373,162 18.]6% Notre Dame Federal Credit Union 329,270 17.73% Wells Fazgo Bank NA 130,646 6.36% Community Wide Credit Union 163,567 8.81% National City Bank of Indiana 124,816 6.07% AAA Federal Credit Union 43,196 2.33% LaSalle bank MidwestNA 115,466 5.62% Policemen's Federal Credit Union 36,120 1.94% Others (4) 124,326 6.05% Others (5) 45,365 2.44% Total $2,054,972 100.00% Total $89,039 100% Total $1,857 23 100.00% Sources• Federal Deposit Insurance Corporation Website (vvww.fdic.gov) National Credit Union Association Website (www.ncua.gov) First Source Bank CITY OF SOUTH BEND, INDIANA INSURANCE COVERAGE 2006 Type of Coverage LIABILITY Comprehensive General Liability Police Professional Liability Ambulance Malpractice Liability Premises Liability (Clay Utilities, Century Center, Parking Garages) CGL -Stadium Liquor Liability CRIME Public Empioyee Dishonesty Public Official -Position Schedule Bond PROPERTY All risk blanket building & contents Business Income Boiler and Machinery Electronic Equipment Fine Arts Museums Valuable Papers Inland Marine Properly Coverage: Electronic Equipment Contractors Equipment OTHER Workers Compensation Third Party Fee Excess Over Self-insured $250,000 Retention Each Accident Limits of Liability N/A N/A N/A N/A N/A 4/26/06 - 07 $1,000,000 $1,000,000 N/A 1/15/06 - 07 $300,000,000 $10,000,000 100,000,000 $10,000,000 $5,000,000 $10,000,000 1/15/06 - 07 $10,000,000 $5,000,000 1/1/06 - 07 Statutory Statutory Statutory Estimated Anuual Premium Self-Insured Self-Insured Self-Insured Self-Insured Self-Insured $3,500 Premium N/A $9,589 Premium $344,577 Premium Included in above Included in above Included in above Included in above Included in above $19,620 Premium Self-Insured $75,000 Fee $126,655 Premium/Fee City of South Bend, Indiana Miscellaneous Statistics December 31, 2006 N W Police Department Department otPublic Works Fire Department Paid Departrnent established 1887 Authorized Officers 264 Traffic Signals ]60 Vehicles 345 Street Lights (City maintained) 2,000 Swom Firefighters Special Officer Groin Miles of Streets 500 (5] of which are Paramedics) 248 K-9 Patrols 10 Miles of Sidewalks 685 Fire Apparatus 20 SWAT Team ]7 Miles of Alleys 398 Hazardous Materials Truck 1 Metro Dmg Task Force (of 20 total) 19 Miles of Sanitary Sewers and Storm Drain: 540 Reserve Pumper Trucks 2 NEST -Special Neighborhood Unit 10 City Owned Vehicles 867 Reserve Ladder Tmcks 2 Bicycle Patrol Officers 4 Trash Picked Up Per Week (in tons) 657 /wk River Rescue Boats 3 Motorcycle Patrol Officers 2 (Organic Resource & Landfill) (67,431 Cu.Yd) Ambulancgs 10 Community Relations Officers 5 Neonatal (Newborn) Units ~ 3 Bomb Squad 7 Fire Runs 32,484 Crime Prevention Officers 4 Ambulance Runs 9,971 2006 Crime Data: Sien Shoo Murders 14 Rapes 67 Work orders for sign maintenance, Water Utility Robbery 431 installation or removal 2,000 Aggravated Assault 292 Gallons of traffic paint for street markings 4,025 Cus[omers/Meters 43,431 Residential Burglary 1,351 Pre-formed plastic arrows used for Wells/Pumps in service 32 Non-residential Burglary 579 street markings 30 Pumping Capacity 65 m.g.d. Larceny 4,895 Built Portables 0 Daily Consumption 20.1 m.g.d. Auto Theft 563 RaiUoad Crossings 3 Peak Demand 40 m.g.d. Arson 86 Built Barricades 0 Miles of Distribution Systems 553 Catls for Service 138,500 Special Signs Built 350 Fve Hydrants 5,013 Dispatches 124,500 Miles Driven 3,802,024 Barricades set up for 2006 events (# of events): Colleges and Universities Arrests 5,932 Block Parties - 57 Sewer Utility Parades 4 Universities and Colleges Enrollment RurilWalkathons & Special Events 45 Customers 39,124 Notre Dame Football Games 7 The University of Notre Dame 11,417 Dry Tons of Sludge produced per year Z 1,495 Fireworks - Coveleski Stadium 6 Indiana University at South Bend 7,420 Miles of Sanitary Sewer Lines 550 Bethel College 1,647 Miles of Storm Sewer Lines 240 ~ S[. Mary's College 1,550 Holy Cross College 503 Davenport University -South Bend 475 South Bend Regional Airport Convention Facilities Tri-State University -South Bend 100 Passenger Century Center 64,000 square feet of Technical Colleges Year Volume exhibit space 2,992 available seating IVY Tech Community College 7,600 1997 991,247 700 seat theater Brown Mackie College -South Bend 676 1998 986,350 1999 955,232 Moms Performing 2000 857,740 Arts Center 2,500 available seating City of South Beud, Indiana Miscellaneous Statistics December 31, 2006 t--~ V 2001 739,407 2002 812,080 Notre Dame ]oyce Athletic 2003 802,]91 and Convocation Center 115,000 squaze feet of 2004 780,033 exhibit space 2005 693,675 11,345 available seating 2006 729,619 Motels 27 motels/hotels The South Bend Regional Airport had 56,862 take-offs 4 Bed and Breakfasts and landings during 2006. Approximately 40 commercial Over 2,700 available rooms airline flights per day fly [o nine hub airports. Commercial airlines with operations at South Bend Regional Airport (market share): 2006 2005 Allegiant Air 10.51% 2.55% Continential Connection 4.90% 4.19% Delta Connection 33.60% 34.62% NorthwesdKLM Airlines 25.89% 29.19% United Express 25.10% 27.73% A.T.A. 0.00% 1.72% Total 100.00% 100.00% Bus Passengers 66,430.00 69,712.00 Train Passengers (South Shore) 281,225.00 234,722.00 Trans o South Bend Public Transportation Corporation Route Miles 232 2003 Ridership 3.1 million 2003 Miles of Service 1.8 million Major motels and meeting rooms: Marriott facilities to seat 800 Holiday Inn facilities to seat 300 Other Transportation 43 Trucking Lines, 33 Terminals 2 Interstate Bus Lines 4 Major Rail Systems (freight and passenger) Health Care The City of South Bend has excellent health caze access at costs below the national average and the lowest in the midwest region. The City has two major hospitals: Memorial Health Systems 526 beds St. Joseph Regional Medical Center 310 beds Communications Access to• 3 Major Television Networks (WNDU, WSJV, WSBT) 1 Public Broadcasting Station (WNI'I) 1 Local Television Station (Wl-IME) 1 Major Newspaper (The South Bend Tribune) 24 Radio Stations Famous Residents South Bend has been the home to the many distinguished individuals including the following persons: Other Ryan Newman, racecaz driver -Incorporated in 1865 John Fogerty, singer -County Seat of St. Joseph County Michael Warren, actor -South Bend officially began under the name South Hold but the name Chad Everett, actor was changed by the Post Office in 1830 to avoid confusion with Knu[e Rockne, football coach other communities [hat used that name, The name South Bend John Wooden, basketball coach was used because the City is located at the sou[hemmost point of Joe Keman, former South Bend Mayor and Indiana Governor the St. Joseph River, -Average High Temperature: January 30 degrees Farenheit July 83 degrees Farenheit Note: This Miscellaneous Statistics summary is no longer required by GASB Statement No. 44. It is presented as an optional report. SUPPLEMENTAL AUDIT OF FEDERALAWARDS 180 STATE OF INDIANA AN EQUAL OPPORTUNITY EMPLOYER STATE BOARD OF ACCOUNTS 302 WEST WASHINGTON STREET ROOM E418 INDIANAPOLIS, INDIANA 46204-2769 Telephone: (317) 232-2513 Fax: (317) 232-4711 Web Site: www.in.gov/sboa INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS TO: THE OFFICIALS OF THE CITY OF SOUTH BEND, ST. JOSEPH COUNTY, INDIANA 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 South Bend (City), as of and for the year ended December 31, 2006, and have issued our report thereon dated May 25, 2007. 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 Comp- troilerGeneral of the United States. Internal Control Over Financial Reoortin In planning and pertorming our audit, we considered the City's intemal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions 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 such an opinion. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity's financial statements that is more than inconsequential will not be prevented or detected by the entity's intemal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the entity's internal control. Our consideration of internal of intemal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be significant deficiencies or material weaknesses, as defined above. 181 INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (Continued) Compliance As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we pertormed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditino Standards. This report is intended solely for the information and use of the City's management and 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. In accordance with Indiana Code 5-11-5-1, this report is a part of the public records of the State Board of Accounts and of the office examined. STATE BOARD OF ACCOUNTS May 25, 2007 182 STATE OF INDIANA AN EQUAL OPPORTUNITY EMPLOYER STATE BOARD OF ACCOUNTS 302 WEST WASHINGTON STREET ROOM E418 INDIANAPOLIS, INDIANA 46204-2769 Telephone: (317) 232-2513 Fax: (317) 232-4711 Web Site: www.in.gov/sboa INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 TO: THE OFFICIALS OF THE CITY OF SOUTH BEND, ST. JOSEPH COUNTY, INDIANA Compliance We have audited the compliance of the City of South Bend (City) with the types of compliance require- mentsdescribed inthe U SOffice of Managementand Budget (OMB) CircularA-133 Compliance Supplement that are applicable to its major federal programs for the year ended December 31, 2006. The City'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 its major federal programs is the responsibility of the City's management. Our responsibility is to express an opinion on the City'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 CircularA-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and pertorm 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 the City'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 the City's compliance with those requirements. In our opinion, the City complied in all material respects with the requirements referred to above that are applicable to its major federal programs for the year ended December 31, 2006. Internal Control Over Compliance The management of the City is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered the City's internal control over compliance with require- ments that could have a direct and material effect on a major federal program in order to determine our audit- ingprocedures for the purpose of expressing our opinion on compliance, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control over compliance. Accordingly, we do not express such an opinion. 183 INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 (Continued) A control deficiency in a City's internal control over compliance exists when the design or operation of a control does not allow management or employees, in the normal course of pertorming their assigned functions, to prevent or detect noncompliance with a type of compliance requirement of a federal program on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to administer a federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented or detected by the entity's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected by the entity's internal control. Our consideration of the internal control over compliance was forthe limited purpose described in the first paragraph of this section and would not necessarily identify disclose all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal con- trolover compliance that we consider to be significant deficiencies or material weaknesses, as defined above. This report is intended solely for the information and use of the City's management, 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. In accordance with Indiana Code 5-11-5-1, this report is a part of the public records of the State Board of Accounts and of the office examined. STATE BOARD OF ACCOUNTS May 25, 2007 184 CITY OF SOUTH BEND SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For The Year Ended December 31, 2006 Pass-Through Federal Entity (or Other) Tatal Federal Grentor Agency/Pass-Through Entity CFDA Identifying Federal Awards Cluster Tdle/Procram Title/Project T'iUe Number Number Expended U.S. DEPARTMENT OF COMMERCE Direct grant Public Works and Economic Development Cluster Economic Adjustment Assistance 11.307 06-79-01251 $ 282,042 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Direct grant CDBG - EnUUement and (HUD-Administered) Small Cities Cluster Community Development Block Grants/Entitlement Grants 14.218 Section 108 # 7 10,610 Section 108 # 8 1,125,636 B-05-MC-18-0011 2,770,754 B-O6-MC-18-0011 107,843 Total for cluster Emergency Sheller Grents Program Total for program Shelter Plus Care 4,015,043 14.231 S-O5-MC-18-0011 14,847 5-06-MC-18-0011 110,546 125,393 14.238 IN36-C960-101-98 14,020 IN36-C400-001MAD 22,419 IN38-0400-005MAD 44,948 IN36-C400-008AIDS 22,514 IN36-C500-OOBMAD 22,542 IN36-C5300-009AIDS 8,864 Total for program Community Development Block Grants/Brownfields Economic Development Initiative Total for program Fair Housing Assistance Program -State and Local Neighborhood Initiative Projects Total for federal grantor agency U.S. DEPARTMENT OF JUSTICE Direct grant Gang Resistance Education and Training Local Law Enforcement Block Grant Program Community Capacity Development Office Total for program Public Safety Partnership and Community Policing Grants Edward Byrne Memorial JusBce Assistance Grant Program 135,307 14.248 B-04-SP-IN-0248 329,597 B-OS-SP-IN-0475 241,872 571,469 14.401 109,974 14.Unknown B-Ot-N1-IN-SB-001 _ 9,896 4,967,082 16.541 2005-JVFX-0151 34,388 16.592 04 Ibbx 1293 72,105 16.595 2005-WS-f105-0056 143,831 2005-WS-QOS-0237 68,758 2006-WS-QO6-0020 78,660 289,247 16.710 045jwx0063 136,158 16.738 OSdjbx0375 61,816 The accompanying notes are an integral part of the Schedule of Expenditures of Federal Awards. 185 CITY OF SOUTH BEND SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For The Year Ended December 31, 2008 (Continued) Pass-Through Federal Entity (or Other) Total Federal GrantorAgerrcy/Pass-Through Entity CFDA Identifying Federal Awards Cluster Title/Program Title/ProjedTitle Number Number Expended U.S. DEPARTMENT OF JUSTICE (continued) Pass-Through Indiana Criminal Justice Institute CrimeVCtimAssistance 16.575 05-VA-116 37,432 Violence Against Women Formula Grents 16.566 OS st 050 13,503 Motor Vehicle Theft Protection Act Program 16.597 03 gp 002 13,254 03 gp 012 7,534 04 gp 001 28,675 04 gp 002 51,381 Total for program Total for federal grantor agency U.S. DEPARTMENT OF TRANSPORTATION Pass-Through Indiana Govemofs Council on Impaired and Dangerous Driving Highway Safety Cluster State and Community Highway Safety U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSfON Direct grant Employment Discrimination -State and Local Fair Employment Practices Agency Contracts U.S. ENVIRONMENTAL PROTECTION AGENCY .Direct grant Brownfield Pilots Cooperative Agreements Brownfields Assessment and Cleanup Cooperative Agreements Total for program Pass-Through Indiana Department of Environmental Management Capitalization Grants for Clean Water State Revolving Funds Total far federal grantor agency U.S. DEPARTMENT OF HOMELAND SECURITY Direct grant Assistance to Firefighters Grant Total federal awards expended 100,844 745,493 20.600 PT-O6-04-07-48 86,249 30.002 85,327 66.611 BF-965-293-Ot-1 155,076 66.616 BF-985-546-01 4,156 BF-965-597-01 15,727 BF-965-645-01 111,559 131,442 66.458 17,658 304,174 97.044 EMW-2005-FG-12328 327,360 $ 6 797,727 The accompanying notes are an integral part of the Schedule of Expenditures of Federal Awards. 186 CITY OF SOUTH BEND NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Note I. Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the City of South Bend (primary government) and is presented in accordance with the requirements of OMB Circular A-133, Audits of States Local Governments, and Non-Profit Organizations. Accord- ingly, the amount of federal awards expended is based on when the activity related to the award occurs. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. Note II. Subrecipients Of the federal expenditures presented in the schedule, the primary government provided federal awards to subrecipients as follows for the year ended December 31, 2006: Federal Amount CFDA Provided to Program Title Number Subrecipients CDBG -Entitlement and (HUD Administered) Small Cities Cluster 14.218 $ 2,064,358 Shelter Plus Care 14.238 121,287 Crime Victim Assistance 16.575 37,432 Violence Against Women Formula Grants 16.588 13,503 187 CITY OF SOUTH BEND SCHEDULE OF FINDINGS AND QUESTIONED COSTS Section I -Summary of Auditor's Results Financial Statements: Type of auditor's report issued: Unqualified Internal control over financial reporting: Significant deficiencies identified? no Reportable conditions identified that are not considered to be material weaknesses? none reported Noncompliance material to financial statements noted? no Federal Awards: Internal control over major programs: Significant deficiencies identified? no Reportable conditions identified that are not considered to be material weaknesses? 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? no Identification of Major Programs: CFDA Number Name of Federal Program or Cluster CBDG -Entitlement and (HUD-Administered) Small Cities Cluster 14.246 Community Development Block Grants/ Brownfields Economic Development Initiative 97.044 Assistance to Firefighters Grant Dollar threshold used to distinguish between Type A and Type B programs: $300,000 Auditee qualified as low-risk auditee? Section II -Financial Statement Findings No matters are reportable. Section III -Federal Award Findings and Questioned Costs No matters are reportable. yes 188 CITY OF SOUTH BEND SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS No matters are reportable. 189