HomeMy WebLinkAbout2007 Comprehensive Annual Financial ReportComprehensive Annual Financial Report City of South Bend, Indiana For the Year Ended December 3 1, 2007 Prepared By: Department of Administration and Finance M. Catherine Fanello, City
Controller ?
City of South Bend, Indiana Comprehensive Annual Financial Report For The Year Ending December 31,2007 Table of Contents INTRODUCTORY SECTION Table of Contents .......................................
...............................................................................1. -3 City Officials.. .................................................................................................
........4.. ... Controller's Letter of Transmittal. ........................................................................................5..-.1. 7 Certificate of Achievement for Excellence
in Financial Reporting .............................................. 18 Organization Chart. ..........................................................................................................
.............. 19 FINANCIAL SECTION Independent Auditor's Report on Financial Statements and Supplementary Schedule of Expenditures of Federal Awards ...........................................2
0-21 Management's Discussion and Analysis .................................................................................. 22-33 Basic Financial Statements: Government-Wide Financial
Statements: Statement of Net Assets ..........................................................................................3..4..-35 Statement of Activities .......................................
...........................................................3..6.. Fund Financial Statements: Balance Sheet -Governmental Funds .......................................................................3
7-38 Statement of Revenues, Expenditures and Other Changes in Fund Balances -Governmental Funds.. .......................................................................3..9.. ... Reconciliation
of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ....................... 40 Statement of Net Assets -Proprietary
Funds ..........................................................4..1. -42 Statement of Revenues, Expenses and Other Changes in Fund Net Assets -Proprietary Funds .....................................
.................................4..3 Statement of Cash Flows -Proprietary Funds ..........................................................4..4 -45 Statement of Fiduciary Net Assets
-Fiduciary Funds ......................................................4. 6 Statement of Changes in Fiduciary Net Assets -Fiduciary Funds. .................................4..7 Notes
to Financial Statements ........................................................................................4..8. -82 Required Supplementary Information: Schedules of Funding Progress
.........................................................................................8..3.. .. Schedules of Contributions From the Employer and Other Contributing Entities ....................
84 Budgetary Comparison. .S chedules. ..................................................................................8. 5-89 BudgetIGAAP Reconc~lratio.n.. .........................................
.................................................9..0.. .. Combining and Individual Fund Statements and Schedules: Governmental Funds: Description -Nonmajor Governmental Funds .......................
......................................... 91-97 Combining Balance Sheet -Nonmajor Governmental Funds ........................................9. 8-1 07 Combining Statement of Revenues,
Expenditures and Other Changes in Fund Balances -Nonmajor Governmental Funds. .........................................................1..0 8-11 7 Schedules of Revenues, Expenditures,
and Changes in Fund Balances -Budget and Actual. .............................................................................1..1.8 -13 2 Nonmajor Enterprise Funds: Description .....................
....................................................................................................,.1. 33 Combining Statement of Net Assets .........................................................
.................... 134-135
City of South Bend, Indiana Comprehensive Annual Financial Report For The Year Ending December 31,2007 Table of Contents FINANCIAL SECTION (Continued) Combining Statement of Revenues,
Expenses and Other Changes in Fund Net Assets .........................................................................................................1..3..6. Combining Statement of
Cash Flows ............................................................................1. 37-138 Internal Service Funds: Description ..................................................................
.....................................................I.3..9.. Combining Statement of Net Assets ...................................................................................1..4.
0 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets .........................................................................................................1..4..1.
Combining Statement of Cash Flows ..........................................................................1..4. 2-143 Fiduciary Funds: Description ..................................................
.....................................................................1..4..4. Combining Statement of Fiduciary Net Assets -Pension Trust Funds ................................. 145 Combining
Statement of Changes in Fiduciary Net Assets -Pension Trust Funds ............. ,146 Statement of Changes in Assets and Liabilities -Agency Funds ........................................1..4
7 STATISTICAL SECTION Financial Trends ...................................................................................................................1..4..9. Net Assets by Component
-Last Ten Years ......................................................................1..5. 0 Changes in Net Assets -Last Ten Years ..................................................................1
.5..1 -15 3 Fund Balances, Governmental Funds -Last Ten Years ......................................................1. 54 Changes in Fund Balances, Governmental Funds -Last Ten Years
............................ 155-156 Revenue Capacity ...................................................................................................................1..5..7 Property
Tax Levies and Collections -Last Ten Years .....................................................1..5..8 Direct and Overlapping Property Tax Rates -Last Ten Years .....................................
.......1. 59 Detail of Net Assessed Valuation -For Year 2006 Payable 2007 .........................................1 60 Assessed Value and Actual Value of Taxable Property -Last Ten
Years ...........................1. 61 Assessed Value and Actual Value of Taxable Prpertyy #2 -Last Ten Years ................... ..I62 Property Tax Collections -Cash Basis ..........................
...................................................1..6..3 Principal Real Property Taxpayers -Current and Nine Years Ago .....................................1..6. 4 Ten Largest Taxpayers
-Personal Property --December 31, 2007 ......................................1 65 Local Option Income Tax Revenue -Last Ten Years .........................................................1..6
6 Total County Option Income Tax Distributions by Taxing Unit -2001 -2007 ......................1. 67 Ten Largest Water Customers -December 31, 2007 ..................................................
.......1. 68 Ten Largest Sewage Works Customers -December 31, 2007 ............................................ 169 Gasoline Tax Collections -Cash Basis -Last Ten Years ..............................
....................1..7 0 Wheel and Excise Surtax Collections -Cash Basis -Last Ten Years ..................................1 71 Debt Capacity .......................................................
..............................................................1..7..2. . Computation of Legal Debt Margin -December 31, 2007 .............................................1 73 Legal Debt
Margin Information -Last Ten Years.. ............................................................1. 74 Ratios of Outstanding Debt by Type -Last Ten Years .............................................
..........1..7 5 Computation of Direct and Overlapping Debt -December 31, 2007 ...................................1..7 6 Ratio of Annual Debt Service Expenditures for General Obligation
Bonded Debt to Total General Governmental Expenditures -Last Ten Years ........................................1. 77 Ratio of Net General Bonded Debt to Assessed Value and Net Bonded
Debt Per Capita -Last Ten Years ..........................................................................................1. 78 Schedule of Revenue Bond Coverage -Water Utility Bonds
-Last Ten Years ...................1. 79 Schedule of Revenue Bond Coverage -Wastewater Utility Bonds -Last Ten Years .......... 180 2
City of South Bend, Indiana Comprehensive Annual Financial Report For The Year Ending December 31,2007 Table of Contents STATISTICAL SECTION (Continued) Demographic and Economic Information
............................................................................1..8..1 Demographic Statistics -Last Ten Years ...........................................................................1
.8. 2 Comparison of Growth Rates in Personal Income for St. Joseph County, The State of Indiana and U.S. Personal Income .........................................................1..8.3.
Principal Employers -Current and Nine Years Ago -December 31, 2007 .........................1..8 4 Operating and Other Information ....................................................................
.....................1.8..5. Operating Indicators by Function/Program-Last Ten Fiscal Years ....................................1..8 6 Capital Asset and Infrastructure Statistics by
FunctionIProgram-Last Ten Years ...............1 87 New Construction -Number of Permits and Property Values -Last Ten Years ................... 188 Full-Time Equivalent City Government
Employees by Department -Last Ten Years ... 189-190 Salary Rate Comparison -1990 -2008 .............................................................................1..9 1 Health Insurance
Plan Participation -December 31, 2007 .........................................1..9 2-19 3 Financial Institution Data -Last Ten Years .................................................................
.......1..9. 4 Insurance Coverage -2007. ...............................................................................................1..9. 5 Miscellaneous Statistics -December 31,
2007 ............................................................1. 96-1 97 COMPLIANCE SECTION Supplemental Audit of Federal Awards ...................................................................
....1.9 8 lndependent Auditor's Report on Compliance and on Internal Control Over Financial Reporting 8ased on an Audit of Financial Statements Performed in Accordance With Government
Auditing Standards .................................. 199-200 lndependent Auditor's Report on Compliance With Requirements Applicable to Each Major Program and Internal Control Over
Compliance in Accordance With OMB Circular A-133 ...............................................2..0..1 -202 Schedule of Expenditures of Federal Awards ...............................................
....................2..0. 3-204 Notes to Schedule of Expenditures of Federal Awards .............................................................2..0.5 Schedule of Findings and Questioned
Costs ............................................................................2..0..6 Auditee Prepared Schedules: Summary Schedule of Prior Audit Findings. .......................................
.........................,.2.0 7
CITY OFFICIALS Office Mayor Controller Acting City Controller Controller City Clerk President of the Board of Public Works Common Council Mern bers 1 District 2"d District 3* District
4'h District 5Ih District 6th District At Large At Large At Large Official Stephen J. Luecke M. Catherine Fanello John H. Murphy M. Catherine Fanello John Voorde Gary Gilot Derek D.
Dieter Charlotte Pfeifer Henry Davis, Jr. Roland A. Kelly, Jr. (Deceased) Roland A. Kelly, Ill Tom LaFountain Ann Puzzello David Varner Ervin Kuspa Oliver Davis Karen L. White Timothy
A. Rouse Al (Buddy) Kirsits
PHONE 5741 235-9216 FAX 5741 235-9928 TDD 5741 235-5567 July 22, 2008 To the Honorable Mayor Stephen J. 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, Lndiana (the "City") for the year ended December 31,2007 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 fmancial 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. Generally Accepted Accounting Principles (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
idonnation. 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 3 1,2006. The fmancial 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.
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-1 33, Audits of States, Local Governments
and Non-Profit Organizations, the provisions of Indiana Code section 5-1 1-1 -9 and the requirements of the Indiana State Board of Accounts. Information related to the single audit,
inchding 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 a nine-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 govemmental 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 govemmental 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 80190, 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/inIand waterway) transfer point in the country, is a significant
advantage to the City of South Bend. St. Joseph Countv /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 (1 1.3% 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 estimated population in St. Joseph County is currently 265,505. The total resident labor force in December 2007 of 132,698 in St. Joseph County is typical of the Midwest: well
trained with a strong work ethic. Approximately 82.4% of the area's adult population are high school graduates or higher (as compared to the national average of 75%) with an estimated
23.6% 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 4.7%, which compares to the State of Indiana unemployment rate of 5.0%. The
unemployment rate in St. Joseph County compares favorably with many of its surrounding counties-Elkhart (4.6%), LaPorte (5. I%), and Marsha11 (4.8%) in Indiana and Cass (5.6%) and Berien
(6.8%) in Michigan. The employment profile for St. Joseph County provides a good overview of the economic rnakeup of this community. Employment statistics for the County's major economic
sectors are are as follows: Economic Sector Construction Manufacturing Health Carelsocial Services Wholesale Trade Retail Trade Professional/Technical Services Accommodations/Food Service
Educational Services Other Total Number Employed 5,759 17,855 16,584 6,550 15,073 4.545 9,702 14,960 32,786 123,814 % of Total 4.7% 14.4% 13.4% 5.3% 12.2% 3.6% 7.8% 12.1% 26.5% 100.00%
St. Joseph County presently has an estimated 100,743 households with an average per capita personal income of $33,739, which compares to the State of Indiana average per capita income
of $32,288 and the United States per capita income of $36,714. The per capita income in St. Joseph County compares favorably with many of its surrounding counties-Elkhart ($32,723),
LaPorte
($28,158), and Marshall ($27,466) in Indiana and Cass ($29,637) and Berrien ($39,938) in Michigan. r Health and education lead the employment statistics for St. Joseph County. The largest
employers in St. Joseph County as of December 2007 were as follows: University of Notre Dame (4,459); South Bend Community School Corporation (3,295); Memorial Health Systems (3,008);
AM General (2,400); Saint Joseph Regional Medical Center (2,291); St. Joseph County (2,025); The Diocese of Fort WayneISouth Bend (1,750); Indiana University of South Bend (1,400); The
City of South Bend (1,230); and Wal-Mart (1 , l l I). The following provides a profile of the residents of St. Joseph Countv: Gender: 47.7% male; 52.3% female 1 Age: Race: 37.2% 0-24
years of age; 25.2% 25-44 years of age; 24.7%% 45-64 years of age; and 12.9% 65 years of age and older. 80.5% White; 12.1 % BlackIAfrican American; 5.2% HispanicILatino; 1.7% Asian;
and .5% Other I Marital Status: 50% Married; 22% WidowedlDivorcedSeparated; and 28% Single I Home Ownership: 67.5% own; 32.5% rentlother 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 $1 12,500 in Indianapolis. The national median sales price is $21 8,000.00. 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 2 1,715 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 28,593. 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, 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 Morris
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; CopshahoIdThe OIiver Mansion; the College Football Hall of Fame; Century Center; Potawatomi Zoo; the Morris 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 that the City has complied with applicable laws and regulations. The results
of the City's single audit for the year ended December 3 1,2007 disclosed no instances of significant material weaknesses in the internal control structure and no significant violations
of applicable laws and regulations. Budgetaw 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 State of Indiana Department of Local Government and Finance. Activities of the general fund, certain special revenue and capital projects h d s
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.
Beginning for budget year 2009, the City must submit its budget to the St. Joseph County Common Council for a non-binding review and recommendation. 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 following 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. These property tax provisions have been repealed beginning in 2009. The levy
for Debt Service hnds 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. During March
2008, the State of Indiana General Assembly enacted property tax reform legislation which made significant changes in the property tax system including a phased-in limit on property
taxes paid of I% of grossed assessed value for residential homesteads, 2% for agricultural/rental properties and 3% for all other real and persona1 property. The City is currently evaluating
the fiscal impact of this legislation and the loss of revenue will be significant. A historical view of the City's tax rate and its net assessed valuation has been included in the statistical
section of this document. Citywide Goals and Obiectives for 2007 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 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 ONE: The CommuniW'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 TWO: The Community's
Public Safetv and Civilitv Improve Sollth 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 THREE: The Community's Quality 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 manrnade environment. GOAL FOUR: Trust in. City Government Improve residents' trust in City
government to ensure that South Bend has a broad base of
and Finance: Providing financial and organizational stability for the City through sound financial and human resources 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. 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 mode1 Fire Department for other cities in an efficient and costeffective 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 a state-of-the-art facility with excellent services to customers while generating
maximum economic benefit to our community. Building South Bend in 2007 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 2008 budget. There
were five areas of concentration that became or remained budget priorities for 2008. We're Building Neighborhoods -Mayor Luecke and the City's elected officials continued their strong
commitment to neighborhoods. The City will make a significant investment to h d 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 rate has decreased in several significant
categories over past year. South Bend has 2.4 police officers and 2.3 firefighters per thousand residents. 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. 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 seventh 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 nhisance properties.
The City has initiated a new procedure to register and monitor vacant and abandoned buildings. The Commercial Corridors Improvement Fund provides much needed hnding 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 far 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 Strang 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 the areas around Coveleski
Stadium and the East Bank. The City has many new economic development projects in progress including Eddy Street Commons, a $200 million dollar
mixed-use development south of Notre Dame, with two hotels, more than 20 stores and restaurants, office space and hundreds of town homes, apartments and condominiums. Proprietaw 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 a cost-reimbursement basis). Fiduciarv Funds. The City's fiduciary duties are accounted for in both Trust and Agency Funds. The primary trust h d s 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 hnd, 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, Beginning in 2009, the State of Indiana will be responsible for hlly hnding the 1925 and 1937 Pension plans. 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. During 2007, the City realized over $7.5 million dollars in investment earnings. In addition to the insurance available to all depositors through
the Federal government, 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 Mana~ement. 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 hnds 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 $300,000 per person 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. During 2007, the City changed medical insurance carriers
to Anthem Blue Cross and this has resulted in a significant cost savings in the fund. 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 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 seventeen years (years ended December 3 1, 1990 through 2006) the City has received an unqualified audit opinion. The auditors' reports related specifically to the single audit
are included in 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 3 1,2006. This was the seventeenth 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, City Controller Assistant City Controller
Certificate of Achievement for Excellence Reporting Presented to City of South Bend Indiana For its Comprehensive Annual Financial Report for the Fiscal Year Ended December 3 1,2006
A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and
public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. President Executive
Director
CITY OF SOUTH BEND ORGANIZATIONAL CHART Citizens of South Bend I City Council Mayor . City Clerk I I I I Century Center Morris Redevelopment -Board of Board of Parks Board of Public
Board of Enlertainrnenl Aulhorilyl Public Safety & Rzc:eztior. ?~lorks Managers Board Cc?mrnission I 1 I Morris Communily 8. Police Fire Parks 8 Public Cenlury Performing Economic ,
Depnrnefll , I Rec,realion , Works Arts Center Development , I Departm,enl I Center , (Polrce Chief) (Fire Ch~ef) Superintendent (Director) (Director) (Director) (Direclor) -Technical
Services -Fire Prevenlion -Park Administralion -Engineering -Economic Division -Adminlslrative Division D~vision Oevelopmenl -1nvesligalive Services Division -Park Maintenance -Slreels
-Commun~ly Divis~on -FireRghling Division Division Development -Uniform Palrol Operations Division -Recrealion -Waler Works -.General Division -EMS Divislon Divisian Division Aaminirtration
-Community Relalions -Polawatomi Zw -Sewage Works Division Division Division -Golf Division -Cenlral Sem~ces D~vision -Solid Wasle Division -Hearing Officer .N e~ghborhwdC ode Enforcement
-Abandoned Vehicles .Unsafe Building -Animal Control -Bureau of Weighls and Measures Building Administration Department & Finance -Cily Finance 8 Budgeting -Human Resources Benefils
Management -hfwmalion Technology -Safely & Risk Management -Human Righls -Purchasing
STATE OF INDIANA AN EQUAL OPPORTUNITY EMPLOYER STATE BOARD OF ACCOUNTS 302 WEST WASHINGTON STREET ROOM E4 1 8 INDIANAPOLIS, INDIANA 46204-2769 Telephone: (3 17) 232-25 13 Pax: (3 17)
232-471 1 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-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, 2007, 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 h the United States of America and the standards applicable to financial audits contained in Government
Auditinq Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and 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 opinion. In our opinion, the respective 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 aggregate remaining fund information of the City as of December 31, 2007, and the respective
changes in financial position and cash flows, where applicable, thereof and for the year then ended, in conformity with accounting principles generally accepted in the United States
of America. The Management's Discussion and Analysis, Schedules of Funding Progress, Schedules of Contributions From the Employer and Other Contributing Entities and Budgetary Comparison
Schedules (General and Major Special Revenue funds) as listed in the Table of Contents, are not required parts of the basic financial statements but are supplementary information required
by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement
and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was 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 purposes of additional analysis
as required by the U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Orsanizations, 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.
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 collectively comprise the City's basic financial statements. The introductory section, combining fund financial statements, other budgetary comparison
schedules, and statistical tables are presented for purposes of additional analysis and are not required parts of the basic financial statements. The combining fund financial statements
and 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 relation 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, accordingly, we expres's no opinion on them. In accordance with Government Auditins Standards, we have also issued our report
June 12, 2008, 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. STATE BOARD OF ACCOUNTS June 12,2008
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 31,2007. We encourage readers to consider the information presented here in conjunction with additional
information that we have h i s h e d in our letter of transmittal. As with other sections of this financial re ort, the information contained within this Management's Discussion and
Analysis (MD&A) shoul i 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 Highlights The assetspf the City of South Bend exceeded its liabilities at December 3 1,2007
by $384,128,236. The maI onty of these net assets ($307,540,341) are invested in ca ital assets assets and are, therefore, not availab e for current spending. Of the remalnin 5 net assets,
$62,9 '4 4,011 is in.unrestricted net assets and may be used to meet the City's ongoing ob igations to crtizens and creditors. Total net assets increased b $21 691 998 during 2007. Of
this .mount, net assets of governmental activities increased by $?4,716,522 and net assets of busmess-type activities Increased by $6,981,476. The total cost of all Ci rograrns was $1
68,198,873 during 2007, a decrease of $7,780,5 15 (4.42%) from a total cost of 979,388 during 2006. At December 3 1 2007, the unreserved fund balance in the General Fund was $21 546,783
which is 30.5.% of total General Fund ex enditures. This IS a healthy General Fund balance and exceeds minimum recommended fund I! alances as promulgated by the Government Finance Officers
Association and other interested or anizations. The unreserved fund balance for all overnmental funds was $1 13,843,869 at ~ e c emf e3r 1 2007. The mqority of this unreserved fun% balance
was accounted for in Capital Projects funds ($66,593,906). Overview of the Financial Statements This discussion and analysis is 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 com onents: 1) government-wide financial statements, 2) fund financial statements,
and 3) notes to the ?ina ncial statements. The report also includes other supplementary information in addition to the basic financial statements themselves. Government-wide financial
statements. The ao vemment-wide financial statements are designed to provide readers with a broad overview of t e 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 of South Bend as of December 3 1,2007.
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 im rovement in financial position while decreases in net assets may indicate a deterioration o ?fin ancial position. Statement of activities. This statement serves the purpose
of the traditional income statement. It provides consolidated the results of all activities of the City of South Bend for the year ended December 3 in net assets are recorded in the
period in which the underlying event takes place, 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 of revenues avaiIabIe 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 rincipally supported by taxes and inter ovemmental revenues (governmental activities)
and other functions that are intended to recover a1 ko r significant portion qf !heir costs thrpugh user fees and charges (business-7
p e activities). The major govempental act-lv~tleos f the Clty of South Bend include police and ire, highways and streets, economic development and general government. The major business-type
activities of the City include the wastewater utility, water utility, Century Center, Blackthorn golf course 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 segre ated for specific activities or ob'ectives. The City, like other state and local overnments, uses k d accounting
to ensure and ernonstrate compliance with f d finance-related egal requirements. All of the h d s o f the CiP of South Bend can be divided into three categories: governmental funds,
proprietary funds and iduciary funds. Governmental funds. Governmental hnds 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
we11 as on balances of spendable resources available at the end of the fiscaI year. Such information may be useful in evaluating a g o v e ~ e n t ' sh ort-term financing requirements.
Governmental fr,mds use the modified accrual accountpg, an accounting method that is different from many private-sector corn anies. The Ci maintains four major overnmental h d s (General
Parks and Recreation, TIF irport, County ption Income Tax) and 92 non-major governmental funds. X B General Governmental Revenue -The followin schedule presents a summary of general
governmental revenue for the year ended December f f 1,2007: Revenue Taxes: General Property County Option Income . -County Economic Development Professional Sports Development Community
Revitalization District Licenses and Permits Intergovernmental Charges for Services Fines and Forfeits Interest Donations Other . Total Revenue 2007 Amount % of Total As shown above,
taxes continue services provided b the City. roperty taxation. f h ~rsev enue !&st variable is the assessed both real and personal total tax levy. Taxab pro erty tax an 2 Recreation
Redevelopment
One of the major focuses for the City continues to be the need to diversi its revenue stream. This is necessary to reduce the City's dependency on general proR e rty taxes an2 t o ensure
that a broad base of users, includi-ngn onresidents who work in the City, s are in the fundin ao f basic Ci services. +% Currently the City's property taxpayers carry a disproportionate
share oft e cost of pu lic safety (police and fire services) and eneral government functions elected officials, legal, code enforcement and administration/! inan ce). A roximately 70%
oI . the total 2007 General Fund revenue was derived from prope taxes. F'uKyic safe accounts for approximately 74% of total 2007 General Fund expenditures.? !le arly, the Mayor an' 3C
ommon Council have established't' ublic safety as a high priority for the City of South Bend. In order to shift part of the financial bur en 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. As mentioned earlier,
the City is looking for other sources of revenue that will reduce its reliance on roperty taxes. A viable so-urce of revenue IS from user fees and/or charges for services currently &eing
performed. It is the Ci 's desire to establish all user charges and fees at a level closely related to the full cost of 1r oviding tX e services while taking into consideration similar
chargeslfees being levied by other pu lic and private providers. The City recalculates, on an annual basis, the full costs of activities supported by user fees (including Parks and Recreation
Department programs and EMS ambulance services) to identi@the impact of inflation and other cost increases. The City then revises user fees accordingly. As a result, overall chaBr es
for services and user fee revenues are anticipated to increase in lrne with annual operat~nga n capital costs.
General Government Expenditures -The City breaks its general ovemment ex enditwes into S d economic development, cu ture and recreation, debt service and capital outlay. eight categories:
general overnment, public safety, highways an streets, healt R and welfare, The followin schedule resents a summary of general governmental expenditures for the year ended Decern % er
3 1,200f Expenditures 2007 Amount % of Total General Government Public Safety Highways and Streets Economic Development Health and Welfare Culture and Recreation Debt Service Capital
Outlay Totai Expenditures As one can see, the City spends more on than any other activity, with 41.5% of all general governmental expenditures spent is followed by spending on capital
proi e cts (13.5%), debt service payments (10.6%), culture and recreation (i.e. par s) at 10.5% and highways and streets (10.3%). Proprietary funds. The City of South Bend maintains
two different types of proprietary fundsenterprise 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 chan es in fund net assets for the Water Utility, Wastewater Utility and Century Center, which are consi %. ered major enterprise funds. Data from the other four non-ma or
enterprise funds are combined into a single, aggregated presentation. Individual fimd data d 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 sewices (a
department that accounts for the expenses related to fuel, vehicle repairs, printing and other services provided to City departments on a cost-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 hnd 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 hnds are not reflected
in the government-wide financial statement because the resources of those funds are not available to support the City's own programs. . The City maintains four fiduciary funds. The City
has two pension trust funds (1 925 Police Pension and 1937 Firefighter's Pension), one agency fund ((Payroll) and one private-purpose trust fund (Cemetery).
Pension Trust Fund Operations -Most City emP l oyees are covered by the Public Em loyees Retirement Fund (PERF) and the 1977 Police Of icers' and Firefighters' Pension Fund, [oth 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 of police officers and firefighters in the
City-managed pension trust funds will continue to decline in the future as current participants retire. The 1925 and 1937 Pension plans are funded through a combination of property taxes
levied by the City, distributions from the State of Indiana Pension Relief Fund, operating transfers and other sources of revenue. 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. At December 3 1,2007, the net assets in the 1925 Police Officer's Pension and 1937 Firefighter's
Pension funds were $3,522,332 and $2,968,691, respectively. During 2007, the City made General Fund operating transfers of $1,800,000 to the 1925 Police Officer's Pension Fund and $800,000
to the 1937 Firefighter's Pension Fund in order to improve the financial position of these funds. Due to the assage of recent by the State of Indiana an # will not receive property tax
revenue. State legislation, beginnin in 2009, the Police and Firefighter's Pension Funds wi P1 b e hlly funded 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 governrnent-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-major
govemental, enterprise, 'internal service and fiduciary funds are presented immediately after the basic financial statements. Governrnent-wide Financial Anahis 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 ma serve over time as
a usehl indicator of a government's financial position. At December 3 1,200S ,t he City's assets exceeded liabilities by $384,128,236, an increase of$21,691,998 from 2006. The majority
of this increase I$ 14,710,522) can be athibuted to increases in the net assets of Governmental Activities, which inclu ed increases in Airport TIF Capital Project and Rainy Day funds.
In addition, the net assets of Business-type Activities increased by $6,981,476 during 2007. This increase was due, in part, to hlgher sewer rates im osed to support ca ital improvements.
The largest Po rtion of the Ci 's net assets, $307,540,381 (80%2 consists oP t he Ci7 ' s investment investment in capita assets (e.g. l a n t roads, storm sewers, water an sewer systems,
bui dings, vehicles and equipment), less any related debt used to acquire those assets that is still outstanding. Capital assets are used to provlde services to citizens, and they are
not available for future spending. Although the investment in caa i tal assets is reported net of related debt, it should be noted that the resources needed to repay this ebt must be
rovided from other sources, since the capital assets themselves cannot be used to liquidate these fia bilities.
Governmental Activities City of South Bend Net Assets Table 1 Business-Type Activities Capital assets (net) 275,595,857 269,192,480 162,290,164 173,527,686 437,886,02 1 442,720,166 Total
assets Long-term liabilities • outstanding 181,691,782 176,241,282 62,446,829 88,725,371 244,138,611 264,966,653 a Other liabilities 24,458,926 24,391,084 9,019,112 1 1,682,546 33,478,038
36,073,630 TotaI liabilities 206,150,708 200,632,366 71,465,941 100,407,917 277,616,649 301,040,283 • Net assets: Invested in capital assets, net of related debt 203,030,546 195,345,890
99,575,304 112,194.451 302,605,850 307,540,34 1 1 Restricted 5,225,642 5,370,627 22,535,858 8,273,257 27,761,500 13,643,884. a Unrestricted 24,900,036 47,150,229 7,168,852 15,793,782
32,068,888 62,944,O 1 1 Q Total net assets $233,156,224 $247,866,746 $129,280,014 $136,261,490 $362,436,238 $384,128,236. -At December 3 1,2007 the City was able to report ositive balances
in all three categories of net type activities. assets, both for the government as a whole, as we1f a s for its separate governmental and business-The net assets for overnment activities
increased by $14,710,522 from $233,156,224 in 2006 to $247,866,$46 in 2007. This increase was due, in part, to revenue exceeding expenses in the TIF Airport and Self-Funded Em loyee
Benefits funds and additional COIT and EDIT taxes received in the Rainy Day Fund. %he net assets for business-ty e net assets activities increased by $6,981,476 from $129,280,014 in
2006 to $136,261,498 in 2007. This increase was due primarily to the increased net assets in the Water and Wastewater Utilities during 2007.
City of South Bend Change in Net Assets Table 2 Governmental Business-type Activities Activities Revenue: Program Revenue: Charges for services $17,563,075 Operating grants and Contributions
12,452,463 Capital grants and Contributions 13,793,363 General Revenue: Property taxes Other taxes Grants and contributions not restricted to specific programs 5,063,54 1 Investment
Earnings 4,762,484 Other Revenue 3,520.138 Total Revenue 137,171,827 Expenses: General govenunent 17,194,920 Public safety 56,600,175 Highways and streets 21,813,189 Health and welfare
114,131 Culture and recreation 14,994,300 Economic Development 18,813,636 Interest on long-term debt 5,841,032 Water 0 Wastewater 0 Civic center Building department Parking Solid waste
0
Golf course TotaI expenses Changes in net assets before Transfers Transfers Change in net assets Beginning net assets (restated) Ending net assets Governmental Business-Type Activities
Activities -2006 -2007 -2006 -2007 -0 -0 1.81 1,757 1.81 1,801 135,371,383 124,932,023 40,608,005 43,266,850 Governmental Activities Governmental activities net assets increased by $14,710,522
during 2007. Total revenue increased by $2,466,983, an increase of only 1.8%. Total expenses decreased by $10,43 9,360, a decrease of 7.7 I%., The majority of the revenue increase was
due to higher property tax collections, increased investment earnin Is and a special COIT and EDIT tax distribution by the State of Indiana to the Rainy Day und. During 2006, the City
received a $12.8 million dollar contribution from the State of Indiana for its Major Moves program that was recorded in operatina grants and contributions. The decrease in expenses was
due to reductions in spend~ngin t e areas of general government, public safety and highways highways and streets as the City continued to cut costs and operate more efficiently. Business-type
Activities Business-type activities had an increase in net assets of $6,98 1,476 during 2007. Some of the increase was due to higher char es for services revenue in the Wastewater and
the Water Works departments through a igher utility billings to customers. This increased revenue will finance a long-term ca ~t adl evelopment plan at the Wastewater and Water Works
utilities. Total expenses for usiness-tyB e Activities increased by $2,658,845 (6.5%) during 2007 due to higher operating an capital costs. Financial Analysis of the Governments' Funds
As not-ed earlie , t e City o So t B nd us.es cpm 11 ce wltL knance-tefateaPega~e u re ents. dwd?ecf?nto three categones: governme# b y s , Governmental funds. The purpose of the City's
overnmental funds is to provide information on short-term inflows, outflows, and %.a lances o f spendable resources. Such information is useful in assessin the City's financing requirements.
In particular, unreserved fund balance may serve as a use& measure of a government's net resources available for spending at the end of the fiscal year. At December 3 1,2007, the CiX
's governmental funds reported a combined endin h n d balance of $152,432,356. Oft is total ending fund balance, a total of $1 13,843,8g9 (74.7%) was in unreserved fund balance, which
is available for spending at the City's discretion. The majority of this unreserved h n d balance was for capital proJ e cts that have been designated by the Common Council and the South
Bend Redevelopment ornrnrssion. The remainder of the fund balance $38,588,487) is reserved for various reasons such as for encumbrances, debt service and a d vances to other hnds and
is not available for new spending.
The General Fund is the Ci 's rimary operating'fund. At December 3 1,2007, the total General Fund balance was ? 23, 7 60 753, a decrease of $2,090,542 (8.1%), from 2006, This use of
General Fund balance was as a total of $2,600,000 was transferred from the General Fund to the Police and Fire Pension funds durina 2 007 to imP r ove the financial osition of those
funds. The unreserved fund balance oft e General und was $21,546,783 at becember 31, 2007, which is 30.5% of total General Fund expenditures. The Parks and Recreation Fund had an increase
in fund balance of $7 16,3 77 during 2007. The due to property taxes and user charges) fund balance in the Parks and Recreat~on Recreation Fund had an w u a l fund expenditures. The
TIF Airport and County Option Income Tax (COIT) funds are used to account for ma or capital construction pro ects and certain debt service payments. The fund balance in the IF i3 i.
Airport Fund increased y $4,588 176 dur~ng20 07, wh~leth e fund balance in the COlT fund decreased by $419,130 during 2067. At December 3 1,2007, the fimd balances in the TIF Airport
and COIT funds were $28,773,241 and $8,206,091, respectively. These fund balances represent resources that City has to meet some of its future capital construction needs and ongoing
debt service obligations. Individual fund data for each of the non-ma or governmental h d s is provided in the form of the combining statements in the Supplemental i nformation portion.
Proprietary funds. Enterprise funds are used to report the same functions presented as businesstype activities in the government-wide financial statements. Internal sewlce funds are
used to account for services provided to other City deB a rtments and funds on a cost-re~mbursemenbt asis. The City maintains seven enterprise hnds q three internal service finds. The
basic proprietary fund financial statements can be found later m 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. The City adoR t s an annual appropriated bud 7e t
for its General Fund. The City prepares its budgets usin the cas basis of accounting. For 200 , the original General Fund expenditure budget was $69,814,696. During the year, additional
ap ro riations of $8,079,935 were made, resultmg in an ending General Fund expenditure budget of!$77,094,63 1. The General Fund budget is reviewed on a monthly basis by staff and budget
amendments are apB r oved as needed by the Common Council. Throughout the year, actual ex enditures are monitore and projected and the budget is amended to prevent any budget overruns.
fhe City tries to work within its original budget by increasing categories that will exceed the budget while decreasing other categories that are under budget. Actual General Fund expenditures
on a budgetary basis (cash ex ended and outstanding the amended budget. encumbrances at year end) were $72,428,738 during 2007, whicR was $4,665,893 (6.1 %) less than General Fund revenue
was originally budgeted at $69,559,181 for 2007. During the 7e ar, the General Fund revenue budget was reduced by $24,396 to $69,534,785. During 200 , actual General Fund revenue was
$68,193,968, whlch was $1,340,817 (2.0%) less than bud eted. The principal reason for this shortfall was that property tax collections dunng 2007 were ke ss than anticipated. A11 cities
have limited resources and, thus, a limited number of programs and services that can be provided. The Ci ?' of South Bend is proud to say that it has done well in terms of maintaining
a solid, financial y-sound organization by consistently spending within its means.
Ca~itaAi sset and Debt Administration Capital assets. The City's investment in capital assets for its governmental and business type activities was $442,720,166 (net accumulated depreciation)
at December 3 1,2007. The largest corn onent of this investment in capital assets is In streets and roads which were valued at $1 511262,881 (net of depreciation) at December 3 1,2007.
This investment in capital assets also includes land, buildin s, land improvements, building Improvements, vehicles, computers and equipment. A detaile explanation of these capital assets
can be found in the Notes to the Basic Financial Statements. d Major capital asset proiects include the following;: -LED Traffic Signals -$1.4 million (innovative technology -85% savings
in energy costs). -Leaselpurchase of 27 police patrol and other vehicles -$1.1 million -On-going paving program -$1.8 million -Riverside Trail BikewayIWalkway -$2.3 million -New Fire
Station No. 2 -$2.5 million -CSOnet -Sewer Overflow Prevention System -$1.3 million -Wastewater Treatment Plant -Removal of Hydraulic Obstructions -$ 2.6 milIion -Leeper Park Tennis
Center Renovation and Resurfacing -$309 thousand -Restoration of the City Natatorium to become the Civil Rights Heritage Center -$365 thousand City of South Bend's Capital Assets Governmental
Business-type Activities Activities -2006 -2007 -2006 -2007 2006 -2007 Capital assets not being depreciated: Land $1 1,539,931 $1 1,539,931 $3,020,575 $3,020,575 $14,560,506 $14,560,506
Construction in Progress 78 1,224 5,583,032 12,366,687 7,773,770 13,147,911 13,356,802 Total capital assets not being depreciated 12,321,155 17,122,963 15,387,262 10,794,345 27,708,417
27,917,308 Capital assets being depreciated: Building 102,887,45 1 102,887,45 1 95,881,138 98,155,502 198,768,589 201,042,953 Improvements other than buildings Machinery & equipment
38,497,829 39,65 1,772 44,2 16,099 44,986,487 82,713,928 84,638,259 Roads Total Cost 517,574,264 521,011,720 231,797,398 253,007,544 749,371,462 774,019,264
1 Less accumulated a depreciation for: , Buildings Improvements other than a buildings Total Acc. Depreciation Total capital assets, being 1 depreciated, net Total activity capital assets,
net Governmental Activities Business-Type Activities The amount of $366 086 462 under the category of roads is derived primarily from the Ci 's 2006 a implementation of AS$ Statement
No. 34 which required the retroactive reporting of in rastructure capital a assets. IY 8 Debt Administration. At December 3 1, 2007, the City had a number of debt issues outstanding.
* The following is a summary of debt transactions during 2007: Be inning Ba 5 ance Additions Reductions Ending Balance Revenue Bonds $126,790,000 $33,115,000 $8,190,000 $151,715,000
Mortgage Bonds 28,309,439 -0--1,424,795 26,884,644 NotesILoans 3 1,016,985 551,333 2,852,308 28,716,010 Capital Leases 5 056 781 s1933m3iE 3 017 687 $36,684.020 1 686 448 $14.153.551
6 388 020 Total $213.703.674 Durin 2007, the City issued two series of revenue bonds (2007A and 2007B) 2007B) for a total amount owf ~$l3blB e , 1p1a5id,0 f0r0o mfo urs iemr B er eosv.e
Dmuernintsg a 2t 0th0e7 ,W thaes tCelwtya teenrt Uerteidli t~y,n Ttoha e f idveeb-t esearrv ciacpei otanl tlheaessee Ibno tnhdes amount of $1,388,714 for the routme replacement of police
5a trol anI o thex vchicJes.. In addition, the City entered into a lease/L u rchase agreement during 200 with a financial institution for the purchase of energy-effic~ent ED traffic
signals. The electricity savings generated from the new signals is ex ected to be more than sufficient to cover the future debt service ayments. Overall, the Ci 's de% increased b $22,530,469
during 2007, from $191,173,205 at ecember 3 1,2006 to $2 1! T ,703,674 at ~e c emge3r 1,2007. b Under the Indiana Cqnstitution and State statute, the City's eneral obligation bonded
debt is a subject to-a legal limitation based upon 2% of total assesse f value of real q d personal property. Slnce 1ndlana;s assessment statutes call for an assessed valuation of one-th~rdo
f cost less depreciation !ts R eneral obligation Pebt limitation is one of the most conservative in the United States. The city ad no general obligation bonded debt outstand~nga t December
3 1,2007. a I 1 a 32 I a ----
A detailed listing of this debt can be fo-und 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 earlier, property taxes are the City's largest source of revenue. Under current legislation, all Indiana cities assessed
values are based on market values. Under this method some properties are still being re-assessed to. reflect the chan es in values. This prpcess, as well as the sr n!ficant number of
aR p eals, is affecting the amount o9 property taxes received by the Clty. In adi x tion, during Marc 2008, the State of Indiana General Assembly enacted prope tax reform legislation
( H ~ A10 01) limitinf property taxes paid to 1% of gross assesse7 v alue for residential homesteads, 2% for agricultura /rental properties and 3% for all other real and personal propeg.
The. irn act of Jhi~1e islation (Mown as ':circuit breaker" le islation) .will be phased in beginning in 200 5f' and will like k y have a significant ippact on future CfQ operating and
ca ital budgets. The City is current1B assessinF the i.mP a ct of this legislation and 1s.m the process of eveloping appropriate an prudent inancia spending plans to deal wlth its fiscal
effects. B -Outlook for the Future The City of South Bend is expecting a groundbreaking year during 2008, with a number of exciting economic development projects becoming reality. These
projects include: Eddy Street Commons -a $200 million dollar mixed-use develoR m ent including two hotels, more than 20 stores and restaurants, pffice space and hundreds of to? omes,
apartments and condominiums. This is the region's largest single development m decades. Innovation Park -South Bend's first state-certified technology park, which is a collaborative
effort between the City, the University of Notre Dame and Project Future. Courtyard by Marriott -a new $38 mijlion dollar 300 room hotel to be built in the downtown • business district.
This development will include a 21 0-car parking garage and w~lble located across the street from the City's convention center (Century Center). a All-American Plaza -restoration of
fhe historic 83-year old sfructure at.Michigan and Washin on condominiums, parklng and a rooftop green space. Streets downtown as-parto f a $9 million dollar project, including an addit~onw
ith new retail, oP fi ces, a Civil Ri hts Heritage Center -sponsored by the Indiana University at South Bend, the renoyation of the Cikra tatorium wrll change a symbol of segregation
into a place of celebration of our racial and cultura diversity. a WNIT-TV -a well established, public television station is moving into the downtown area with a high-a tech faqade that
will forever change the face of a key downtown intersection. Kroc Center -a $22.5 million dollar world-class youth and family center to be built on the comer of j Western and Chapin
Streets in South Bend. The Center will be funded primarily by a $42.5 million dollar grant from the Ra and Joan Kroc Foundation and $10 mill~ond o!lars.in pr~vated onations. Ap operatinf
endowment oi $ 30 million dollars will also be established. Thls will be the only center of lts kind in t e State of Indiana. Requests for Information • This financial report is designed
to provide a general overview of the finances of the City of South Bend, a Indiana. Questions concerning any of the information provided in this report, or requests for additional information,
should be addressed to: M. Catherine Panello, City Controller City of South Bend • Department of Administration %nd Finance • 227 W. Jefferson Boulevard, 12 Floor South Bend, Indiana
46601 a Telephone -(574) 235-5887 a Fax -(574) 235-9928 • Emaii -cfanello@southbendin.gov 33 a a a
CITY OF SOUTH BEND STATEMENTOFNETASSETS December 31.2007 Cash and cash equivalents Cash with fiscal agent Receivables (net of allowances for uncollectibles): lnterest Taxes Accounts
Intergovernmental Loans internal balances Inventories Prepaid expense Deferred debits Restricted assets: Cash and cash equivalents Investments lnterest receivable Taxes receivable Accounts
receivable Properly held for resale Capital assets: Land and construction in progress Other capital assets, net of depreciation Total assets Primary Government Governmental Business-Type
Activities Activities Totals $ 127,873,813 $ 14,530,103 $ 142,403,916 255,256 255.256 551,395 34,178 585,573 11,604,420 -1
1,604.420 1,782,536 2,557.224 4,339,760 1,562,564 -1,562,564 8,943,643 -8,943,643 3,277,082 (3,277.082) 1,342,274 397.971 2,740,245 131,235 30,271 161.506 1,237,509 5,862,823 7,100,332
5.643.411 42,738.617 48,382,028 1,788,804 -1,788,804 15,962 103,543 1 19,505 141.917 141,917 164.073 164,073 13,154,811 -13,154,811 17,122,963 10,794,345 27,917.308 252,069,517 162,733,341
414,802,858 448.499.112 236,669,407 685,168.519 The notes to the financial statements are an integral part of this statement. Continued on nel page
CITY OF SOUTH BEND STATEMENT OF NET ASSETS December 31,2007 (Continued) 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 Contracts payable Customer deposits Accrued interest
payable Noncurrent liabilities: Due within one year: Mortgage bonds payable Compensated absences Revenue bonds payable Capital Lease obligations Notes and loans payable Due in more than
one 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 other postemployment benefits obligation Net pension obligation Total liabilities Net Assets Invested in capital assets, net of related debt Restricted
for: Debt service Capihl outlay Unrestricted Total net assets Primary Government Governmental Business-Type Activities Activities Totals The notes to the financial statements are an
integral part of this statement.
CITY OF SOUTH BEND STATEMENT OF ACTIVITIES For The Year Ended December 31,2007 Primary government: Governmental activities: General government Public safety Highways and streets Economic
development Health and welfare Culture and recreation Interest on long-term debt Total governmental activities Business-type activities: Water Wastewater Civic Center Building department
Parking Solid waste Golf course Total business-type activities Total primary government Program Revenues Net (Expense) Revenue and Changes Operating Capital Primary Government Charges
for Grants and Grants and Governmental Business-Type Expenses Services Contributions Contributions Activities Activities General revenues: Propefly taxes County option income tax Economic
development income tax Professional sports development tax Community revitalization enhancement district tax Grants and contributions not restricted to specific programs Unrestricted
investment earnings Other Transfers Total general revenues and transfers Change in net assets assets Net assets -beginning Net assets -ending $ 247,866,746 $ 136,261,490 The notes to
the financial statements are an integral part of this statement.
2--8 8 N. m. V1 NV)(D mrnm 5 ZN> N t9 -8 $ X 2 2x2 L o r n 3 ~ ;p s 2 m a ' m I-. t 2 8 2 b9 tf) g" p i 2 m f g -m. ab "3S ' 0. 28 0-g 3 t9 ohborn g$$33. -( O N -m agqqgr r r m 7 WN-IeD
60 2. n. N. s m. O.-.?NO_ E'"OE^ d m ""'8 m L4 ". m m m N , . I $ 3 ci 6 10% + a m 1 ' WDD q n ! gm 7 N m O r ' 858.8 O N I -r n a%%= 10 9m h. w0 N. -2 tft 2 'mm9 a m (If 00 'm9 5? m
m 0 B ? % m a 2 h N. * 69 5 Nr. [4 Vm) te (If I i 9g8 % h. -. ". m wmm ;s.gz. 3 r r n w N N N W V) (If b9 (ft N t9
CrrY OF SOUTH BEND BALANCE SHEET GOVERNMENTAL FUNDS December 31.2007 (Continued) Totals Amounts reported for gobemmental activities in the Statement of Net Assets are different because:
Capital assets used in gowrnmentai activities are no1 financial resources and, therefore, are not reported in the funds. Prepaid expenses ($1 18.862) and deferred debits ($1,237,509)
are not available to pay for current period expenditures and, therefore, are deferred in the funds. Internal service funds are used by management to charge the costs of certain services
to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the Statement of Net Assets. Long-term liabilities, including
bonds payable, are not due and payable in the current period and, therefore, are not reported in the funds: Deferred revenues Bonds payable Less: deferred charge on refunding (to be
amortized as interest expense) Less: issuance discount or (premium) (to be amortized as interest expense) Cap~lalle ases payable Notes payable Net other postemployment benefits obligation
Net pension obligation Short-term liabilities that are not recognized in governmental funds until due: Accrued interest payable Compensated absences payable Net assets of governmental
activities The notes to the financial statements are an integral part of this statement.
ClPl OF SOUTH BEND STATEMENT OF REVENUES. EXPENDITURES, AND OTHER CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For The Year Ended December 31,2007 Other Total Park and Governmental Governmental
General Reueat~on TIF Airport COIT Funds Funds Revenues: Taxes Property County option income County economic development incnme Professional sports development tax Community rev~blizatione
nhancement district Licenses and permits Intergovernmental Charges for sewices Fines and forfeits Interest Donations Sale of property Orher Total revenues Expenditures Current: General
government Public safety Highways and streets Economic development Health and welfare Culture and recreation Debt servlce: Principal Interest and fiscal charges Capital outlay: General
government PuDlic safety Economic development Culture and recreation Total expenditures Excess (deficiency) of revenues wer (under) expendilures OVler financing sourcas (uses): Transfers
in Transfers out Debt Issuance The notes to the financial statements are an integral part of thls statement Total other financing sources and uses Net change in fund balancss Fund balances
-beginning Fund balances -ending
5 5 :: -C 5 m G d I2 3 w 0 g C 2 v0 4 5 "l 2 . 5 2 a 2 B aJ -. 5 5 .c E a s9 g c ma, 2 5' .r 3 "Y u S P Cw e0. 3 C w m m Q P o rn St. zm. m m * ~ m ~ m w u ) a-0-a. (4'41".0, * m n r
u i N 10NO)IO ?ze!sz Q? CJ. -. '-'-, 7 NO-N N L D -r 5 OL
CITY OF SOUTH BEND STATEMENT OF NET ASSETS PROPRIETARY FUNDS December 31,2007 -Assets Current assets: Cash and cash equivalents interest receivable Accounts receivable (net of allowance)
Accounts receivable -other lnterfund receivables: lnterfund 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 outlay accounts Accounts receivable Interest receivable Total current assets Noncurrent assets:
Deferred charges: Unamortized debt issue costs Unamortized loss on salelleaseback Total deferred charges Capital assets: Land and construction in progress Other capital assets (net of
accumulated depreciation) Total capital assets Total noncurrent assets Total assets Business-Type Activities -Enterprise Funds Other Water Wastewater Century Enterprise Utility Utility
Center Funds Totals The notes lo the financial statements are an integral part of this statement. Continued on next
CITY OF SOUTH BEND STATEMENT OF NET ASSETS PROPRIETARY FUNDS December 31,2007 (Continued) Liabilities Current liabilities: Accounts payable Interfund payables: lnterfund loans lnterfund
services provided and used Accrued payroll payable Compensated absences Unearned revenue Taxes payable Accrued interest payable Customer deposits Estimate of unCled claims Current liabilities
payable from restricted assets: Accounts payable lnterfund payables: lnterfund services provided and used Contracts and retainage payable Customer deposits Mortgage bonds payable Revenue
bonds payable Capital leases payable Notes and loans payable Accrued interest payable Business-Type Activities -Enterprise Funds Other Water Wastewater Century Enterprise Utility Utility
Center Funds Totals Total current liabilities 2,653,815 6,732,857 1,040,508 1,973,668 12,400,848 Noncurrent liabilities: Advances from other funds -2,728,000 2,728,000 Mortgage bonds
payable (net of unamortized discount) 867,388 867,388 Revenue bonds payable (net of unamortized discounts, premiums, and deferred amount on refunding) 17,965,244 49,511,004 -2,702,080
70,178,328 Capital leases payable 117,899 -498,646 616,545 Notes and loans payable 1,877,045 14,862,321 299,625 -17,038,991 Unamortized gain on salelleaseback 24,119 24,119 Total noncurrent
liabilities 19,842,289 65,358,612 299,625 5,952,845 91,453,371 Total liabilities 22,496,104 72,091,469 1,340,133 7,926,513 103,654,219 Net Assets lnvested in capital assets, net of related
debt 40,091.447 53,149,839 13,107,580 5,845,585 112,194,451 Restricted for debt service 1,650,377 3,116,193 -1,273,217 6,039,787 Restricted for capital outlay 828,751 132,437 1,267,044
5,238 2,233,470 Unrestricted 4,144,428 10,329,592 154,585 1,165,177 15,793,762 Total net assets The notes to the financial statements are an integral part of lhis statement.
CITY OF SOUTH BEND STATEMENTOFREVENUES.EXPENSESANDOTHERCHANGESINFUNDNETASSETS PROPRIETARY FUNDS For The Year Ended December 31,2W7 Governmental Business-Type Activities -Enterprise Funds
Activities Other Water Wastewater Century Enterprise Internal Utlllty Utility Center Funds Totals Service Funds Operating revenues: Metered revenue: Residential Commercial Industrial
Fire protection revenue Penalties Convention fees Licenses and permits Parking fees Solid waste fees Golf course fees Employw/ernployer wntributionS Charges for sales and services Other
Total operating revenues Operating expenses: Source of supply and expenselwllection System expense -operations and maintenance Transmission and distributionlpumping expense -operations
and maintenance Treatment and disposal expense -operations and maintenance Operations and maintenance Customer amuots Administration and general losuranoe claims and premiums Depreciation
Total operat~nge xpenses Operating income (loss) Nonopemting revenues (expenses): Interest and investment revenue HoteUmotel tax Repair fund revenues Management fees Miscellaneous revenue
Interest expense Amortization expense Repair fund expenses Gain (loss) an disposition of assets Total nonoperating revenue (expenses) (184,413) (1,463,038) 1,556.873 (720,219) (830.797)
232,824 lnwme (loss) betore contributions and ttansfers 2.536.190 3,959.878 (45.523) (718.666) 5,731,873 2.329617 Capita! contfibutions Transfers in Transfers out Change in net assets
3,294,174 3,959,878 99.413 (371,989) 6,981,476 2.329.617 Total net assets -beginmng 43,420,829 62,768,183 14,429,796 8.661.206 123,280,014 5,929,644 Total net assets -ending The notes
to the financial statements are an integral part of this statement.
CITY OF SOUTH BEND STATEMENTOF CASH FLOWS PROPRIETARY FUNDS For The Year Ended December 31.2007 Cash flows from operating activities: Receipts from customers and users Receipts from
interfund services provided Payments to suppliers Payments to employees Payments for ~nterfunds enices used Governmental Business-Type Activities -Enterprise Funds Activities Glher Water
Wastewater Century Enterprise Internal Utility Ut~lily Center Funds Totals Service Fund Net cash provided (used) by operating acthities 4,971,751 8,225,112 (443.163) 639.809 13,333,509
2,222,848 Cash flows from noncapital financing activilies: Advdnces from other funds -1.357.454 1,357,454 Repayments of advances from other funds -(887.967) (887,967) lnterfund loan
-3,220.500 lnterfund loan repaid -(2,887,042) Hotellmotel lax -1,361,263 -1,361,263 Transfer from other funds 39,832 39.832 Ttansfer to other funds (43.567) (43.567) Net cash provided
by noncapital financing actirn'ties -Cash flows from capital and related financing activit~es: Acquisition and construction of cap~taal ssets (3.600.562) (10.799.276) (33.987) (429.123)
(14,862,948) (61,852) Capital contributions -249.718 249.716 Bond issue costs paid -(130.477) -(130.477) Proceeds from capital debt issued -32.780.814 -32,780,614 Princ~papl aid on capital
debt (2,764,265) (2,575,740) (71,500) (672,480) (6,283,385) Interest paid on capital debt (1.015.522) (1,715,602) (30,060) (208.812) (2,973,936) Proceeds from sales of capital assets
1.518 6,764 7.682 Net cash provided (used) by capital and related financing activities (7,378,831) 17,560,319 (139.547) (1,254,533) 8,787,406 (61,852) Cash flows from inbesting activities:
Proceeds from sales and maturities of investments -1,009,945 -1,009,945 interest receiwd 331.317 816.967 65,297 56.515 1,270.096 207.766 Net cash provided by investing activities 331.317
816,967 1,075,242 56,515 2,280,041 207,766 Net increase (decrease) In cash and cash equimlents (2.075.763) 26,602,338 1,853,795 (92,457) 26,287,373 2,702.220 Cash and cash equivalents.
January 1 (Including $160.628, $1,304,879, $6.387.003, and $15.598.024 for the repair fund. customer deposits. revenue bond covenants and cap~taol utlays, respect~wlyr,e ported in restricted
accounts) 9.723.644 18.853.503 350.964 2.052.636 30,380,747 5.022.891 Cash and cash equi~lentsD~e cember31 (Including $369,414. $1,324,464, $6,324,353. and $34.720.580 for the repair
fund. customer deposits. revenue bond covenants and capital outlays, respectively, reported in restricted account?s) $ 7.647.881 $ 45,455,301 $ 2,204.759 $ 1.960.179 $ 57.268.720 $ 7.725.111
The notes to the financial statements are an integral pan of this statement. Continued on n e i page
g*G gg igg 1 m.?$ 0--. u?p m m a mm, em ED N. 2. T m
CITY OF SOUTH BEND STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS December 31,2007 Cash and cash equivalents Receivables: Interest Taxes Total receivables Total assets Current liabilities:
Acmunts payable Accrued payroll and withholdings payable DROP payable -due within one year Total liabilities Pension Private-Purpose Trust Trust Agency Funds Funds Funds Net Assets Held
in trust for. Employees' pension benefits 6,491.023 Individuals, organizations, and other governments 40.489 Total net assets -$ 40,489 The notes to the financial statements are an integral
part of this statement.
CilY OF SOUTH BEND STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS For The Year Ended December 31,2007 Additions Contributions: Employer State of Indiana Plan members Other
Pension Private-Purpose Trust Trust Funds Funds Total contributions 14,905,816 Investment income: Interest Total additions 15,325.753 1,867 Deductions Benefits Administrative expense
Total deductions 11,648,148 Changes in net assets 3,677,605 1.867 Net assets -beginning 2,813,418 38.622 Net assets -ending $ 6,491.023 $ 40,489 The notes to the financial statements
are an integral part of this statement.
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS I. Summary of Significant Accounting Policies A. Reporting Entity The City of South Bend (primary government) was established under the
laws of the State of Indiana. The primary government operates under a Council-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 significant component units. The component units discussed below are included
in the primary government's reporting entity because of the significance of their operational or financial relationships with the primary government. Blended component units, although
legally separate entities, are in substance 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 component unit 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 government. Financial statements for the Redevelopment
Authority 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 21 1 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 purpose 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, City of South Bend, 227 West Jefferson,
1400 County-City Building, South Bend, Indiana, 46601. Related Orqanizations 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 Urban Enterprise Association, and the Special Funds Board of Managers. During
2007, the Special Funds Board of Managers provided $1,361,263 to the City's Century Center and $507,585 to the City's Professional Sports Development Fund, to finance capital costs of
the College Football Hall of Fame.
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 Activities) report information on all of the nonfiduciary activities of the primary government. 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 purchase, use or directly benefit from goods, services
or privileges provided by a given function or segment and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function
or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds,
proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise
funds are reported as separate columns in the fund financial statements. 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 measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available.
Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the
primary government considers revenues to be available if they are collected within 60 days of the end of of the current fiscal period. Expenditures generally are recorded when a liability
is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, 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.
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) 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 general government, except those required to be accounted for in another fund. 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 proceeds
in excess 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 a cost-reimbursement basis. The pension trust funds account for the activities of the 1925 pojice 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 payroll, pension, and payroll deductions. Private-sector standards of accounting and financial reporting issued prior to December I, 1989, generally are followed
in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards
Board. Governments also have the option of following subsequent privatesector 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.
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions
to this general rule are payments-in-lieu of taxes and payments of administrative costs. Elimination of these charges would distort the direct costs and program revenues reported for
the various functions concerned. Amounts reported as program revenues include (1) charges to customers or applicants for goods, services or privileges provided, (2) operating grants
and contributions, and (3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program 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 enterprise funds 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 5-1 3-9) 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 governmental 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.
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) 2. Interfund Transactions and Balances Activity between funds that are representative of lending/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 providedlused." Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide
financial statements as "internal balances." 3. Property Taxes Property taxes levied are collected by the County Treasurer and are usually distributed to the primary government in June
and in December. State statutes (IC 6-1 -1-17-16} require the lndiana 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 Government 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 Treasurer and available for distribution were distributed to the primary government prior to December
31. Delinquent property taxes outstanding at year end for governmental 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. lnventories and Prepaid Items All inventories are valued at cost using the first inlfirst out (FIFO) method. Inventories
of governmental 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 government-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 capital asset accounts), depreciation methods and estimated useful lives of capital assets reported in the government-wide statements and proprietary funds are as follows:
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Capitalization Depreciation Estimated Threshold Method Useful Life Buildings and improvements $ 50,000 Straight-line 20 to
30 years Equipment 5,000 Straight-line 5 to 20 years Roads -collectors and residential 3,000,000 Straight-line 40 to 50 years Utilities' infrastructure (small) 75,000 Straight-line 30
to 99 years Utilities' infrastructure (large) 100,000 Straight-line 30 to 99 years The City has implemented retroactive reporting of its infrastructure as of December 31, 2006. 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. Compensated Absences a. Sick Leave -primary government employees earn sick leave at the rate of two-thirds of a 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 onehalf 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 government 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 of employment. c. Personal Leave
-primary government 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 overtimecompensatory 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.
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) 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 applicable governmental activities, business-type activities or proprietary fund type Statement of Net
Assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of
the applicable bond premium or discount. 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 discounts, 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. Issuance costs, whether or not withheld from
actual debt proceeds received, are reported as debt service expenditures. 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 consistent with accounting
principles generally accepted in the United States of America. All annual appropriations lapse at fiscal year end. Annual budgets are 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 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
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) 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 lndiana Department of Local Government Finance. The budget becomes legally enacted after the City Controller receives approval
of the lndiana Department of Local Government Finance. The primary government's management cannot transfer budgeted appropriations between object classifications of a budget without
approval of the Common Council. The Department of Local Government 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 not exceed appropriations
for any funds or any departments within the General Fund or within the Park and Recreation Fund, or within any other major or nonmajor governmental fund which required legally, approved
budgets. B. Deficit Fund Equity At December 31, 2007, the following funds reported deficits in fund equity, which are violations of State statute: Deficit Governmental funds: Football
Hall of Fame Capital $ 1,075,277 Enterprise funds (net assets): Blackthorn Golf Course 1,249,285 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. Ill. 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. lndiana Code 5-13-8-1 allows a political subdivision
of the State of lndiana 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, 2007, the bank balances held at Wells Fargo Bank NA, The Bank of New York Trust Company,
NA, LaSalle Bank National Association, and at JPMorgan Chase Bank, N.A. in the amounts of $2,467,775, $409,374, $360,263, and $430,918, respectively, were collateralized with securities
held by the pledging financial institution's trust department or agent but not in the depositor-City's name. The remaining bank balances were insured by the Federal Deposit Insurance
Corporation or the Public Deposit lnsurance Fund, which covers all public funds held in approved depositories. The City has not formally adopted a deposit policy for custodial credit
risk.
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) 2. Investments Authorization for investment activity is stated in lndiana Code 5-13. As of December 31, 2007, the City had
the following investments: Primary Go~rnment In~stmenMt aturities (in Years) Investment Fair Less More TY Pe Value Than 1 1 -2 Than 2 U.S. Treasuries and Securities $ 1,788,804 $ 1,788,804
$ -$ Investment Policies lndiana 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 of America and issued by the United States Treasury, a federal agency, a federal instrumentality, or a federal government sponsored enterprise. lndiana 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. lndiana 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 lnvestment 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 of the United States of America or obligations issued by a federal agency, a federal instrumentality, or a federal government sponsored
enterprise. 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 Poor's Corporation or its successor
or Aaa, or its equivalent, by Moody's Investors Service, Inc., or its successor. The form of securities 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 government 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.
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Investment Custodial Credit Risk The custodial credit risk for investments is the risk that, in the event of the failure
of the counterparty to a transaction, a government will not be able.to recover the value of investment or collateral securities 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, 2007, the City held investments in U.S. treasuries and securities in the amount of
$1,788,804. These investments were held by the counterparty's trust department or agent but not in the City's name. lnterest Rate Risk lnterest rate risk is the risk that changes in
interest rates will adversely affect the fair value of an investment. The City must follow state statue and limit the stated final maturities of the investments to no more than two years.
The City does not have a formal investment policy for interest rate risk. Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its
obligations. U.S. Treasury securities are guaranteed by the full faith and credit of the U.S. government and are recognized as the safest investment available. The City does not have
a formal investment policy for credit risk. Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in
a single issuer. The City does not have a policy in regards to concentration of credit risk. United States of America government and United States of America governmental agency securities
are exempt from this policy requirement. Foreisn 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, 2007, 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.
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Fund Receimble Noncurrent Major gow?rnmental funds: County Option Income Tax $ 233,333 $ 200,000 Nonmajor gownmental funds:
Economic Dewlopment State Grants 3,023,172 2,909,258 Community Dewlopment 1,350,827 I,2 06,973 Industrial Remlving 4,336,311 4,088,732 Totals C. Capital Assets Capital asset activity
for the year ended December 31, 2007, was as follows: Primary Gowrnment Beginning Ending Balance Increases Decreases Balance Gowrnmental acti\n'ties: Capital assets, not being depreciated:
Land $ 11,539,931 $ -$ -$ 11,539,931 Construction in progress 78 1.224 4,801,808 5,583,032 Total capital assets, not being depreciated 12,321,155 4,801,808 -17,122,963 Capital assets,
being depreciated: Buildings 102,887,451 -102,887,451 Improwments other than buildings 10,103,222 2,282.81 3 -12,386,035 Machinery and equipment 38,497,829 2,331,232 1,177,289 39,651,772
Roads being depreciated 366,085,762 700 -366.086.462 Totals Less accumulated depreciation for: for: Buildings 23,268,734 3,034.981 -26,303,715 lrnprowments other than buildings 4,619,351
234,669 4,854,020 Machinery and equipment 26,762,406 3,120.164 921,683 28,960,887 Roads being depreciated 199,649,071 9,174.510 -208,823,581 Totals Total capital assets, being depreciated,
net 263,274,702 (10,949,579) 255,606 252,069,517 Total gobemmental activities capital assets, net 'The beginning balance has been restated to include $5,479,031 previously excluded.
Primary Gowmment CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Beginning Ending Balance Increases Decreases Balance Business-type actiwties: Capital assets, not being
depreciated: Land $ 3,020,575 $ -$ -$ 3,020,575 Construction in progress 12,366,687 15,525,781 20,118,698 7,773,770 Total capital assets, not being depreciated 15,387,262 15,525,781
20,118,698 10,794,345 Capital assets, being depreciated: Buildings * 95,881,138 2,277,784 3,420 98,155,502 Improwments other than buildings 97,700,161 18,405,760 240,366 109,865,555
Machinery and equipment 44,216,099 7,245,132 474,744 44,986,487 Totals Less accumulated depreciation foc Buildings 34,451,265 2,289,831 2,341 36,738,755 ImproLements other than buildings
20,749,345 1,776,708 106,937 22,419,116 Machinery and equipment 29,693,886 1,855,137 432,691 31,116,332 Totals Total capital assets, being depreciated, net 146,902,902 16,007,000 176,561
162,733,341 Total business-type activities capital assets, net $ 162,290,164 $ 31,532,781 $ 20,295,259 20,295,259 $ 173,527,686 'The beginning balance has been restated to include $1,904,771
preiously excluded. Depreciation expense was charged to functians/programs of the primary government as follows: Goemmental actiqties: General gowrnrnent $ 258,103 Public safety 2,051,413
Highways and streets, including depreciation of general infrastructure assets 10,104,652 Culture and recreation 2,969,718 Economic dewlopment 101,011 Internal senice funds* 79,427 Total
depreciation expense -gowrnmental actiuties *Capital assets held by the primary government's internal service funds are charged to the various functions based on their usage of the assets.
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Business-type activities: Water Wastewater Civic center Building permits Parking garage Solid waste GoH course Total depreciation
expense -business-type activities $ 5,921,676 D. Construction Commitments Construction work in progress is composed of the following: Total Expended to Required Project December 31,
Future Pmject Authorized 2007 Committed Funding Goxmmental activities: New Fire Station No. 2 LED Signals Eddy Street HES Portage Avenue Improvements Miami Road Widening Leeper Park
Court ResurfacinglRepair Other projects Total -gowrnrnentat actidties Business-type actidties: Water Utility: Clewland Well Field Wastewater Utility: SRF Funded Wastewater Treatment
Plant Rehabilitation CSO Remote Monitoring Biosolids Improement or Lagoon #4 Studebaker Trunk Storm Sewer 2007 Sewer Lining Program Studebaker "A" Stormwater Twyckenham Drie Storm Sewer
Embedded Sensor Network Other Projects Century Center Security and Fire Alarm Systems Boiler Replacement Totals -business-type actidties
CITY OF SOUTH BEND NOTES TO FlNANClAL STATEMENTS (Continued) E. Interfund Balances and Activity 1. lnterfund Receivables and Payables The composition of interfund balances as of December
31, 2007, is as follows: Payable Governmental Funds Enterprise Funds a Park and Receivable General Recreation d:pFdrt COlT Nonmajor Water Wastewater Century Nonma~or lnternal Center
Enterprise Service Totals a Governmental a Funds General 5 ' 3,240 $ -S 1,675 S 12,708 S 20.132 $ 4,142 $ 87 S -5 449,874 S 1,231,565 $ 1,723.423 CfllT 31,546 31,546 Nonmajor governmental
-Enterprise funds Water 3,758 3,651 1.016 1,388 620 10,433 Wastewater 135,101 -23,061 158,162 Nonmajor enterprlse 625 625 a Internal service 192.884 -131.647 75.273 58933 1.958 554,052.
Totals -5334,983 $ 31,439 -8 1,675 $-188,708 $ 180,420 -$ 34.332 S 78,028 -5 97,135 -$508,807 S 1,234,143 $ 2,689,670 lnterfund balances resulted from the t~mela g between the dates
that (1) lnterfund loans are repaid, (2) lnterfund goods and services are provided or reimbursable expenditures occur, (3) transactions are a recorded in the accounting system and (4)
payments between funds are made. @-. 2. Advances Between Funds The advances between funds record noncurrent portions of long-term loans from one fund to another. Advances at December
31,2007, were as follows: . Advances to Advance from Nonmajor . Nonmajor Governmental Enterprise Totals General $ 1,750,000 $ -$ 1,750,000 TIF -Airport -2,728,000 2,728,000 Ncr?r;?zjor
governmental 500,247 500,247 Totals 3. lnterfund Transfers lnterfund transfers at December 31, 2007, were as follows:
C I N OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Transfer To General Nonmajor Nonrnajor Transfer From Fund TIF -Airport Gowmmental Enterprise Totals General $ -$ -$ 889,531
$ -$ 889,531 Park and recreation -227,323 -227,323 TIF -Airport -383,921 12,000 395,921 COlT -2,510,813 -2,510,813 Nonmajor gowrnrnental 250,000 60,099 3,507,321 27,832 3,845,252 Nonmajor
enterprise -43,567 43,567 Totals 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 government 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 $308,810.
The following is a schedule by years of future minimum rental payments as of December 31,2007: 31,2007: Total $ 975.044 2. Capital Leases The primary government has entered into various
capital leases for various types of equipment, and two parking garages. The parking garage capital leases are 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 31,2007, are as follows:
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Go\rernrnental Business-Type Actiities Actidties Total minimum lease payments 9,873,672 1,185,193 Less amount representing
interest 2,178,185 57,799 Present mlue of net minimum lease payments $ 7,695,487 $ 1,127,394 Assets acquired through capital leases still in effect are as follows: Gomrnmental Business-Type
Activities Activities Buildings Machinery and equipment Totals Accumulated depreciation Totals G. Long-Term Liabilities 1. Mortgage Bonds Mortgage bonds outstanding at year end are as
follows:
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Interest Original Outstanding Purpose Rates Issue 12-31 -07 Governmental Actiuties 2001 Public Works Seltice Center 4.63%
to 5.3% $ 8,112,250 $ 6,608,195 2003 New Fire StationlPolice Renowtions 2% to 5% 21,335,000 18,770,000 2005 Park Fitness Center Reno~tions 3.61% 920,000 579,644 Total -gowmmental actidties
$ 30,367,250 $ 25,957,839 Business-Type ActiLities 2001 Public Works Setice Center 4.63% to 5.3% $ 1,137,750 $ 926,805 Mortgage bonds at year end include the following amounts of unamortized
bond discount (premium): Unamortized Balance at Discount Adjusted Purpose December 31 (Premium) Balance Gowmrnental Activities 2001 Public Works Senice Center $ 6,608,195 $ 54,757 $
6,553,438 2003 New Fire Station/Police Renobations 18,770,000 (475,402) 19,245,402 2005 Park Fitness Center Renomtions 579,644 579,644 Total goemmental activities Business-Type Actiities
2001 Public Works Service Center $ 926,805 $ 11,447 $ 915,358 Mortgage debt service requirements to maturity are as follows:
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Year Ended Go*rnrnental ActiGties Business-Type Actidties December 31 Principal Interest Principal Interest Totals $ 25,957,839
$ 10,551,515 $ 926,805 $ 374,175 2. Revenue Bonds The primary government issues bonds to be paid by income derived from the acquired or constructed assets. Revenue bonds outstanding
at year end are as follows: Interest Original Outstanding Purpose Rates Issue 12-31-07 Gowmmental actiities: Tax Incremental Financing Rewnue Bonds: 2002 TJX Special Taxing District
2003 Airport I F 2003 SB Downtown Central Devslopment I F 2005 Southside TIF 2006 Erskine Commons Redewloprnent Authority Re ~ n u eBo nds: 1996 Central Dewloprnent Area Refinancing
1998 Morris Performing Arts Center 2000 Hall of Fame Refinancing 2001 Century Center Refinancing CEDlT Rewnue Bonds: 2006 CEDlT Refinancing Bonds Total go~mmentaal ctiuties
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Interest Original Outstanding Purpose Rates Issue 12-31-07 Business-type activities: 1993 Water Works Improvement 1997 Water
Works Irnproement 2002 Water Works Improement 2006 Water Works Irnprotement 2001 Sewage Works Refinancing 2004 Sewage Works Improement 2006 Sewage Works Irnproement 2007A Sewage Works
Irnprowment 20078 Sewage Works Improement 1998 Blackthorn Golf Course Refinancing Total business-type actidties Unamortized Unamortized Balance at Discount Loss (Gain) on Adjusted Purpose
December 31 (Premium) Refunding Balance Governmental activities: Tax lncrernental Financing Reenue Bonds: 2002 TJX Special Taxing District 2003 Airport TIF 2003 SB Downtown Central Dewlopment
TIF 2005 Southsjde TIF 2006 Erskine Commons Redevelopment Authority Revenue Bonds: 1996 Central Development Area Refinancing 1998 Moms Performing Arts Center 2000 Hall of Fame Refinancing
2001 Century Center Refinancing CEDlT Revsnue Bonds: 2006 CEDIT Refinancing Bonds Total gomrnmental actidties $ 78,570.000 $ 211.035 $ 665.034 $ 17,693,931 Business-type actidties: 1993
Water Works Improvement 1997 Water Works Improvement 2002 Water Works Improwment 2006 Water Works Improvement 2001 Sewage Works Refinancing 2004 Sewage Works Improwment 2006 Sewage Works
Impromment 2007A Sewage Works Impro~ment 20076 Sewage Works impro\~ment 1998 Blackthorn Golf Course Refinancing Total business-type actiMties
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Revenue bonds debt service req.uirements to maturity are as follows: Year Ended Goemmental Activities Business-Type Activities
December 31 Principal Interest Principal Interest Totals $ 78,570,000 $ 32,894,015 $ 73,145,000 $ 31,509,184 3. Notes and Loans Payable The primary government has entered into various
noteslloans. Annual debt service requirements to maturity for the noteslloans are as follows: Year Ended Gowrnrnental Activities Business-Type Activities December 31 Princi~al Interest
Princiaal Interest Totals $ 7,900,658 $ 935,711 $ 18,380,491 $ 3,331,170 4. Changes in Long-Term Liabilities Long-term liability activity for the year ended December 31, 2007, was as
follows:
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Due Beginning Ending Within Primary Gowrnment Balance Additions Reductions Balance One Year Gowrnmental actidties: Bonds
payable: Rewnue $ 82,445,000 $ -$ 3,875.000 $ 78.570.000 $ 3,985,000 Moltgage 27,337,124 -1,379,285 25,957,839 1,423,375 Total bonds payable 109,782,124 -5,254,285 104,527,839 5,408,375
Notes and loans pay able 9,323.691 -1,423,033 7,900.658 2.356.868 Capital leases 5,968,048 2,920.287 1,192,848 7,695.487 1,044,696 Compensated absences 4,735.176 3.283,264 3,562,511
4,455,929 3,283,264 Net pension obligation 63,408.1 14 223,857 63,184.257 Total goernmental activities long-term liabilities $ ?93,217,153 $ 6,203,551 $ 11.656.534 $ 187,764,170 $ 12,093.205
Business-type actiwties: Relenue bonds payable: Water Utility $ 20,635,000 $ -$ 2,635,000 $ 18,000,000 $ Wastewater Utility 19,925,000 33,115,000 1,215,000 51,825,000 2,350,000 Blackthorn
Golf Course 3,785.000 465,000 3,320,000 485.000 Total rewnue bonds payable 44,345,000 33,115,000 4,315,000 73,145,000 2,835,000 Mortgage bonds pay able 972,315 45,511 0 926,805 47,970
Capital leases payable 1,523,594
97,400 493,600 1,127,394 51 0,849 Notes and loans payable 19,258,433 551,333 1,429,275 18,380,491 1,341,500 Total business-type activities long-term liabilities $ 66,099.342 $ 33,763.733
$ 6,283,385 $ 93,579,690 $ 4,735,319 Compensated absences for governmental activities typically have been liquidated from the general fund and special revenue funds. All of the December
31, 2007, business-type activities' compensated absences are due within one year. H. Segment Information The primary government issued revenue bonds to finance Blackthorn 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.
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Condensed Statement of Net Assets Assets: Current assets Deferred charges Restricted assets Capital assets Total assets Liabilities:
Current liabilities $ 25,110 Current liabilities payable from restricted assets 587,288 Noncurrent liab~lities 5,430,080 Total liabilities $ 6,042,478 Net assets: Inwsted in capital
assets, net of related debt Restricted Unrestricted Total net assets Condensed Statement of Rewnues, Expenses, and Changes in Net Assets Operating revenues Depreciation expense Other
operating expenses Operating income Nonoperating reenues (expenses): In~stmeneta rnings Interest expense Amortization Contributions Transfers Change in net assets (23,861) Beginning
net assets (1,225,424) Ending net assets
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Condensed Statement of Cash Flows Net cash proGded (used) by: Operating activities $ 125,855 Noncapital financing activities
613,433 Capital and related financing activities (863,736) Inwsting activities 53,312 Net decrease (7 1 ,I 36) Beginning cash and cash equivalents 1,526,294 Ending cash and cash equimlents
$ 1,455,158 1. Restricted Assets The balances of restricted asset accounts in the enterprise funds are as follows: Cash, cash equiwlents, and inwstrnents Repair funds $ 369,414 Customer
deposits 1,324,264 Reenue bond conenant accounts 6,324,359 Capital outlay accounts 34,720,580 Repair fund receimble 164,073 Interest receimble 103,543 Total restricted assets $ 43,006,233
J. Restatements and Reclassifications For the year ended December 31, 2007, certain changes have been made to the financial statements to more appropriately reflect financial activity
of the primary government. The following schedule presents a summary of restated beginning balances. Prior period adjustments include recognizing previously omitted depreciation on governmental
activities' capital assets and recognizing previously omitted business-type activities' capital assets. Balance Balance as Reported Prior as Restated December 3 1, Period January 1,
Fund Type 2006 Adjustments 2007 Go~rnmentaal ctivities: Net assets $ 238,635,255 $ (5,479,031$) 233,156.224 Business-type activities: Net assets $ 127,375,243 $ 1,904,771 $ 129,280,014
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) K. toss on SaleILeaseback of Leighton Parking Garage During 2000, the City completed construction of the Leighton Parking
Garage and capitalized the cost of the garage, $1 1,439,712, 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 a salelleaseback 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 salelleaseback, 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, 2007, 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. Liabilitv lnsurance 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 insurance
covers individual claims in excess of $250,000 per year for job 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.
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Changes in the balance of claim liabilities during the past two years are as follows: Unpaid claims, beginning of fiscal
year $ 388,202 $ 407,596 lncurred claims and changes in estimates 1,849,900 1,875,859 Claim payments 1,830,506 1,703,660 Unpaid claims, end of fiscal year Gr o u ~H ealth Insurance The
primary government has chosen to establish a risk financing fund for risks associated with medical 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 coverage in the past three years. A premium is charged to each fund
based on the number of employees and estimated costs exceeding the employees' contributions. 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 daims 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: Unpaid claims, beginning of fiscal year $ 814,321 $ 1,466,796
Incurred claims and changes in estimates 13,394,129 10,722,906 Claim payments 12,741,654 11,466,534 Unpaid claims, end of fiscal year $ 1,466,796 $ 723,168 During 2005, the City's former
employee medical benefits' administrator, Healthcare Resources Group (HRG), failed to pay $1 ,I 11,899 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 and the City's legal department has estimated that the City may receive
approximately 25% of the total claims and the City has recognized a receivable for this percent of the total claims.
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) B. Related Party Transactions During the period in which financial statements are presented, the City had material transactions
with Jeffrey V. Gibney, Executive Director of the City's Community and Economic Development Department, who is also a paid consultant for South Bend Heritage Foundation, Inc., a non-profit
corporation. The City paid South Bend Heritage Foundation, Inc., $684,904 during 2007. As of the December 31, 2007, the amount of $31,570 was due to the South Bend Heritage Foundation,
Inc. C. 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. No loan proceeds were received by the City during 2007. The City anticipates receiving $4,000,000 during 2008. During 2005, 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 $33,115,000 during 2007. 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 to be completed during 2008). During 2007, the City approved
Ordinance 9796-07, appropriating $1,000,000 for zoo repairs and $1,000,000 as local share to finance a Kroc Center, a community center. Financing will be provided from existing funds.
Funds will be expended during 2008. During 2008, the City approved the sale of a $36,000,000 tax incremental revenue bond issue to finance public improvements related to an economic
development project, Eddy Street Commons. During 2008, the City is in the process of issuing Redevelopment Authority bonds to refinance the existing 1998 Morris Performing Arts Center
Redevelopment Authority bonds. The amount outstanding as of December 31,2007, was $8,565,000. During 2008, the City is also in the process of issuing $4,800,000 Redevelopment Authority
bonds to refinance the existing 2001 Century Center Refinancing Redevelopment Authority bonds and to finance additional improvements. The amount outstanding as of December 31, 2007,
was $4,845,000. Pursuant to new state legislation, beginning in 2009, the State Pension Relief Fund shall pay to each unit of local government with Pre-1977 Local Police and Fire Fighter
Pension obligations, the total amount of pension, disability, and survivor benefit payments. The Pre-1977 funds include the 1925 Police Pension Fund, the 1937 Firefighters' Fund, and
the 1953 Police Pension Fund. For property taxes first due and payable after December 31, 2008, the Department of Local Government Finance shall reduce the maximum permissible property
tax levy of any civil taxing unit and special service district by the amount of the payment to be made in 2009 by the State for the obligations.
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) D. Contingent Liabilities Colleae Football Hall of Fame Operations The City's General Fund has advanced a total of $1,750,000
to the Football Hall of Fame Capital 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 Hall of Fame to the National Football Foundation 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 terminate 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 reimbursement will be made in five annual installments beginning on the second day of the second interim term (December
31, 2010). The interim agreement has been extended to December 31, 2010. 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 statements. Lawsuits There are several lawsuits pending in which the City
is involved. The City is in various court proceedings' phases or settlement phase on lawsuits that the City Attorney estimates the potential damages against the City may exceed $1,200,000.
E. 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
government, 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, 2007, there were several series of industrial revenue bonds outstanding. The aggregate principal amount payable is not available
to the City. During 2007 the City approved one series of industrial revenue bonds in an amount not to exceed $80,000,000.
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) F. Other Postemployment Benefits (OPEB) Plan Description The City of South Bend Retiree Healthcare Plan is a single-employer
defined benefit healthcare plan administered by the City of South Bend, Department of Administration and Finance, through the City's self-insurance fund. The plan provides for medical
insurance benefits to eligible retirees and their spouses. Indiana Code 5-10-8 gves the unit the authority to establish the plan. Fundin~P olicy The contribution requirements of plan
members for the City of South Bend Retiree Healthcare Plan are established by the City's Common Council. The required contribution is based on projected pay-as-you-go financing requirements.
For the year ended December 31, 2007, the City contributed $756,174 to the plan for current premiums. Police and Fire members receiving benefits contributed approximately 28.1% of the
total premiums, through their required contribution of $133 per month for retiree-only coverage and $395 for retiree and spouse coverage. General employee members receiving benefits
contributed approximately 100% of the total premiums, through their required contribution of $474 per month for retiree-only coverage and $1,253 for retiree and spouse coverage. Annual
OPEB Cost and Net OPEB Obliqation The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC),
an amount actuarially determined in accordance with the parameters of GAS6 Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover
normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The following table shows the components of the City's
annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City's net OPEB obligation to the plan: Annual required contribution $ 1,858,648 Interest
on net OPEB obligation 76,733 Contributions made (756,174) Increase in net OPEB obligation 1,025,741 Net OPEB obligation -beginning of year -Net OPEB obligation -end of year $ 1,025,741
The City's annual OPEB cost, the percentage of the annual OPE6 cost contributed to the plan, and the net OPEB obligation for 2007 and the two preceding years were as follows: Fiscal
Annual Percentage of Net Year OPEB Annual OPEB OPEB Ended Cost Cost Contributed Obligation **Information not available
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Funded Status and Fundina Prowess As of December 31, 2007, the most recent actuarial valuation date, the plan was 0% funded.
The actuarial accrued liability for benefits was $16,874,856, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $16,874,856. Actuarial
valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions
about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are
subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The Schedule of Funding Progress, presented as required
supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing
over time relative to the actuarial accrued liabilities for benefits. This schedule is not presented since it is the first valuation study. Actuarial Methods and Assumwtion Projections
of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided
at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include
techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective
of the calculations. In the December 31, 2007, actuarial valuation, the entry age actuarial cost method was used. The UAAL is being amortized as a level percentage of projected payroll
on an open basis. The remaining amortization period at December 3?, 2007, was 30 years. G. Pension Plans 1. Agent Multiple-Emplover and Sinale-Em~loverD efined Benefit Pension Plans
a. Public Ern~loveesR' etirement Fund Plan Descri~tion The primary government contributes to the Indiana Public Employees' Retirement Fund (PERF), a defined benefit pension plan. PERF
is an agent multiple-employer public employee retirement system, which provides retirement benefits to plan members and beneficiaries. 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 retirement 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.
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 Fundina 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 inforrnation, 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 Descri~tion
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 statute (IC 36-8-6 and IC 36-8-8.5). The plan provides retirement, 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. Fundina 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 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 AsseB. 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.
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) c. 1937 Firefi~htersP' ension Plan Plan Description The primary government contributes to the 1937 Firefighters' Pension
Plan which is a single-employer defined benefit pension plan. The plan is administered by the local pension board as authorized by state statute (IC 36-8-7 and IC 36-8-8.5).T he plan
provides retirement, 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. Fundina Policy 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 Interest on net pension obligation Adjustment to annual required contribution Annual pension
cost Contributions made Increase (decrease) in net pension obligation Net pension obligation, beginning of year Net pension obligation, end of year
CITY OF SOUTH BEND NOTES TO FlNANClAL STATEMENTS (Continued) Contribution rates: City Plan members Actuarial valuation date Actuarial cost method Amortization method Amortization period
Amortization period (from date) Asset valuation method PERF 5.0 % 3% 07-01 -07 Entry age Level percentage of projected payroll, closed 30 years 07-01 -97 75% of expected actuarial value
plus 25% of market value 1925 Police Officers' Pension 2240% 6% 01 -01 -07 Entry age Level percentage of projected payroll, closed 30 years 01 -01-07 4 year smoothed market Firefighters'
Pension 1,701 % 6% 01 -01 -07 Entry age Level percentage of projected payroll, closed 30 years Actuarial Assumlstions investment rate af return 7.25% 6% Projected future salary increases:
Total 5% 4% Attributed to inflation 4% 4% Attributed to merittseniority 1% 0% Cost-of-living adjustments 2% 2.75%/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 1925 Police Officers' Pension Plan Annual Percentage Net Pension
Cost of APC Pension Year Ending (APC) Contributed Obligation 01-01-07 4 year smoothed market
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) 1937 Firefighters' Pension Plan Annual Percentage Net Pension Cost of APC-Pension Year Ending (APC) Contributed Obligation
Membership in the 1925 Police Officers' Pension Plan and the 1937 Firefighters' Pension Plan at January I, 2007, was comprised of the following: 1925 Police 1937 Officers' Firefighters'
Pension Pension Retires and beneficiaries currently receiving benefits 217 221 Terminated employees entitled to But not yet receiving benefits -Current active employees 6 1 d. Financial
Statements for Defined Benefit Plans Statements of Fiduciary Net Assets: 1925 Police 1937 Officers' Firefighters' Pension Pension Assets Cash and cash equimlents Receimbles: Taxes Total
assets Liabilities Accounts payable Noncurrent liabilities: DROP payable-due within one year Total liabilities Net Assets Held in trust for pension benefit obligations
CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Statements of Changes in Fiduciary Net Assets: 1925 Police 1937 Officers' Firefighters' Pension Pens ion Additions Contributions:
Employer State of Indiana Plan members Other Total contributions Inwstment income: Interest Total additions Deductions Benefits and refUnds paid to plan members and beneficiaries Administratiw
expenses Total deductions 6,009,015 5,639,133 Changes in net assets 2,333,335 1,344,270 Net assets -beginning Net assets -ending Administrative expenses are paid from property taxes
and state distributions. Both are a portion of employer contributions. 2. Cost-Sharina Multiole-Em~loveDr efined Benefit Pension Plan 1977 Police Officers' and Firefiahters' Pension
and Disability Fund Plan Description The primary government contributes to the 1977 Police Officers' and Firefighters' Pension and Disability Fund, a cost-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.
CITY OF SOUTH BEND NOTES TO FlNANClAL STATEMENTS (Continued) State statute (IC 36-8-8 and IC 36-8-8.5) regulates 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 Funding Policv and Annual Pension Costs Plan members are required to contribute 6% of the first-clas$ 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 contributions to the plan
for the years ending December 31, 2007, 2006, and 2005, were $3,928,912, $3,716,072, and $3,540,711, respectively, equal to the required contributions for each year.
CITY OF SOUTH BEND REQUIRED SUPPLEMENTARY INFORMATION SCHEDULES OF FUNDING PROGRESS Public Employees' Retirement Fund Unfunded Actuarial AAL as a Actuarial Accrued Percentage Actuarial
Value of Liability Unfunded Funded Covered of Covered Valuation Assets (MU AAL Ratio Payroll Payroll Date (a) (b) (a-b) (alb) (c) ((a-b)lc) 1925 Police Officers' Pension Plan Unfunded
Actuarial AAL as a Actuarial Accrued Percentage Actuarial Value of Liability Unfunded Funded Covered of Covered Valuation Assets W L ) M C Ratio Payroll Payroll Date (a) (b) (a-b) (alb)
(c) ((a-b)lc) 1937 Firefiqhters' Pension Plan Unfunded Actuarial AAL as a Actuarial Acc~ed Percentage Actuarial Value of Liability Unfunded Funded Covered of Covered Valuation Assets
(AAL) AAL Ratio Payroll Payroll Date (a) (b) (a-b) (alb) (c) ((a-b)lc)
CITY OF SOUTH BEND REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULES GENERAL FUND AND MAJOR SPECIAL REVENUE FUNDS For The Year Ended December 31,2007 General Fund Variance
Actual W~thF inal Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Taxes: Property Licenses and permits Intergovernmental Charges for services
Fines and forfeits Other Total revenues Expenditures: Current: General Government: Mayor: Personal services Supplies Other services and charges Other uses City Clerk: Personal services
Supplies Other services and charges Capital outlay Other uses Common Council: Personal services Supplies Other services and charges Other uses AdministrationlFinance: Personal selvices
Supplies Other services and charges Capital outlay Other uses City Attorney: Personal sewices Supplies Other services and charges Other uses Continued on ned page
CITY OF SOUTH BEND REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULES GENERAL FUND AND MAJOR SPEC1AL REVENUE FUNDS For The Year Ended December 31.2007 (Continued) Expenditures
(continued): Current (continued): General Government (continued): Building Maintenance: Personal services Supplies Other services and charges Capital outlay 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 Police Department: Personal services Supplies Other services and charges Capital
outlay Other uses Communication Center: Personal services Supplies Other services and charges Other uses Fire Department: Personal services Supplies Other services and charges Capital
outlay Other uses General Fund Variance Actual With Final Budgetaly Budget Budgeted Amounts Basis Basis Positive Original Final Amounts (Negative) 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 31.2007 (Continued) General
Fund Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Posilive Original Final Amounts (Negative) Expenditures (continued): Current (continued): Public Safety (continued):
Weights and Measures: Other services and charges Junk Vehicle: Personal services Supplies Other services and charges Animal Control: Persanal services Supplies Other services and charges
Capital outlay Other uses Total Public Safety Highways and Streets: Engineering: Personal services Supplies Other sewices and charges Capital outlay Other uses Street Department: Personal
services Supplies Other services and charges Capital outlay Other uses Total Highways and Streets Health and Welfare: Youth Service Bureau: Other services and charges Total Health and
Wetfare Continued on next page
CITY OF SOUTH BEND REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARlSON SCHEDULES GENERAL FUND AND MAJOR SPECIAL REVENUE FUNDS For The Year Ended December 31,2007 (Continued) General
Fund Variance Actual W~thF inal Bud-getar.y Budget Budgeted Amounts Basis positive Original Final Amounts (Negative) Expenditures (continued): Current (continued): Culture and Recreation:
Art Association: Other services and charges Studebaker Museum: Other services and charges Parks and Recreation: Capital outlay Palais Royale Ballroom: Personal services Supplies Other
services and charges Capital outlay Other uses Morris Performing Arts Center: Personal services Supplies Other servlces and charges Other uses Total Culture and Recreation Community
and Economic Development: Economic Development. Other services and charges Main Street Parking Garage: Capital outlay Leighton Plaza Parking Garage: Capital outlay Wayne Street Parking
Garage: Capital outlay Unsafe Building: Other services and charges Total Community and Economic Development Total expend~tures Net change in fund balances Fund balances -beginning Fund
balances -ending Continued on next page
CITY OF SOUTH BEND REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULES Revenues: Taxes: Property Intergovernmental Charges for services Fines and forfeits Other GENERAL
FUND AND MAJOR SPECIAL REVENUE FUNDS For The Year Ended December 31.2007 (Continued) Total revenues Expenditures: Current: Culture and recreation: Personal services Supplies Other services
and charges Other uses Capital outlay Total expenditures Park and Recreation Fund Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative)
Other financing sources: Operating transfers out Net change in fund balances Fund balances -beginning Fund balances -ending
CITY OF SOUTH BEND REQUIRED SUPPLEMENTARY INFORMATION BUDGETIGAAP RECONCILIATION GENERAL FUND AND MAJOR SPECIAL REVENUE FUNDS For The Year Ended December 31,2007 The major differences
between budgetary (Non-GAAP) basis and GAAP basis are: a. Revenues are recorded when recelved 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 h e results of operations at the end of the year on a budgetary basis to a GAAP basis are as follows: Park and General Recreation 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)
NONMAJOR GOVERNMENTAL FUNDS Special revenue funds Motor Vehicle Highway -To account for street construction and the operations of the street maintenance department. Financing is provided
by state motor vehicle highway distributions. Recreation Nonreverting -To account for fees and related expenses from park department activities. StudebakerIOliver Revitalization Grants
-To account for expenditures related to the Studebaker and Oliver revitalization projects. Financing is provided by federal and state grants 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. East Race
Waterway -To account for donations for the promotion and development of the East Race Waterway.
Special Events -NONMAJOR GOVERNMENTAL FUNDS (Continued) To account for revenues and expenditures relating to the operation of special events sponsored or organized by the City. Morris
and Palais Marketing -To account for marketing and promotion expenditures financed by sponsorship solicitations and donations. 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. I Indiana
River Rescue -To account for expenditures related to river rescue training. Financing is provided by registration fees. I COPS Block Grant II -To account for federal grants which provide
financing for police activities. Regional Police Academy -COPS MORE Grant -Federal Drug Enforcement -To account for revenues (tuition) and expenditures (seminars, travel, lectures, and
career days) related to the advancement of present and future police officers. To account for a COPS MORE grant which provides financing for police activities. 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 -Rainy Day -To account for donations for development and maintenance of
the K-9 unit. 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).
Industrial Revolving -Debt service funds Redevelopment Bond Studebaker -College Football Hall of Fame Debt Service -Redevelopment Bond Central Development -Redevelopment Bond Airport
Taxable -Redevelopment Bond Century Center -Redevelopment Bond Palais Royale -EDIT Bond -Plaza Garage -Tax Exempt -EDIT Bond -Plaza Garage -Taxable -NONMAJOR GOVERNMENTAL FUNDS (Continued)
. 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 Commerce. To accumulate monies for payment of Redevelopment District general obligation bonds, which are serial bonds due in annual installments through 2006.
Financing is to be provided by an annual property tax levy. 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. To accumulate monies as a reserve for the payment of Redevelopment Authority bonds for
the central development project. To accumulate monies as a reserve for the payment of Redevelopment Authority bonds for the airport taxable project. To accumulate monies as a reserve
for the payment of Redevelopment Authority bonds for the century center project. To accumulate monies as a reserve for the payment of Redevelopment Authority bonds for the Palais Royale
project. To accumulate monies to meet the required debt service reserve for the Series A, Economic Development Income Tax Revenue (EDIT) Bonds of 1997. To accumulate monies to meet the
required debt service reserve for the Series 8, Taxable Economic Development lncome Tax (EDIT) Revenue Bonds of 1997.
NONMAJOR GOVERNMENTAL FUNDS (Continued) 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 facility, bonds issued for central development area land acquisition and construction 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 Performing 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. 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 projects 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 agreement
with the National Football Foundation (NFF), the City pays the NFF to assist with the operation and capital costs. Coveleski Stadium Capital -Zoo Endowment -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. 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. 94
Cumulative Capital Development -Cumulative Capital Improvement -Economic Development Income Tax -Cumulative Sewer -Tax Incremental Financing (TIF) -SamplelEwing -Morris Performing Art
Center Capital -NONMAJOR GOVERNMENTAL FUNDS (Continued) 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. To account for state cigarette tax distributions used for improvement projects. To account for the City's share of the County Economic Development Tax. Expenditures
include construction, acquisition and related costs for economic development projects. 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 Sample1 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. Tax Incremental Financing (TIF) -Downtown -To account for expenditures
for public improvements in the central business tax incremental district. Also, 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) -Downtown Building
Operations -To account for expenditures for public improvements in the central business tax incremental district building operations. 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) -Leighton Plaza -To account for expenditures
for public improvement projects in the Leighton Plaza 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.
NONMAJOR GOVERNMENTAL FUNDS (Continued) Tax lncremental 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 StudebakerIOliver Community Revitalization Enhancement District. Financing is provided by income tax and gross retail tax increments in the district.
Tax lncremental Financing (TIF) No. 1 -Southside Development -To account for expenditures for improvements in the Southside Development Tax lncremental District No. 1. 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 lncremental Financing (TIF) No. 2 -Southside
Development -To account for expenditures for improvements in the Southside Development Tax lncremental District No. 2. 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 lncremental Financing (TIF) No. 3 -Southside Development -To account for expenditures
for improvements in the Southside Development Tax lncremental District No. 3. Financing is provided by property tax proceeds in excess of those attributable to the assessed valuation
of the property in the district before redevelopment. Redevelopment District Allocation Area Capital -To account for local public improvements in the Airport Economic Development District.
Financing is provided by a 2003 bond issue. Tax lncremental 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 of those attributable to the assessed valuation 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 General Fund which may be repaid from future operating surpluses. 96
Major Moves -NONMAJOR GOVERNMENTAL FUNDS (Continued) To account for state distributions used for road construction and other uses authorized by Indiana statute. Tax Incremental Financing
(TIF) -Northeast Development -To account for expenditures for improvements in the northeast development tax incremental district. 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) -Douglas Road -To account for expenditures for improvements
in the Douglas Road development tax incremental district. Financing is provided by property tax proceeds in excess of those attributable to the assessed valuation of the property in
the district before redevelopment. Palais Royale Historic Preservation -To account for expenditures financed by a 2% fee charged for all Palais Royale services. Equipment Leasing -To
account for proceeds from capital lease-purchase agreements used to finance major equipment needs of the City. 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.
Cash and cash equivalents Cash with fiscal agent Investments Receivables (net of allowances for uncollectibles): lnterest Taxes Accounts Intergovernmental Loans Interfund receivable:
lnterfund loan lnterfund services provided and used Advances to other funds Property held for sale Total assets Liabilities and Fund Balaoces Liabilities: Accounts payable Accrued payroll
payable Contracts payable lnterfund payable: lnterfund services provided and used Deferred revenue Performance deposits payable Other current payables Advances from other funds Total
liabilities Fund balances: Reserved for: Encumbrances Noncurrent loans receivable Property held for resale Debt service Advances to other funds Unraserved, reprted in: Special revenue
funds Capital projects funds Total fund balances Total liabilities and fund balances CITY OF SOUTH BEND COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31.2007 (Continued)
Special Revenue Law Enforcement Continuing Local Road Human Righls ~ a sRta ce Special Education Build Indiana Genefa1 Grant and Street Federal Waterway Events Continued on Re
spun) snefo~s:up!u pn4a e~naudene'pe~~spunj Jeqp w o ~sja setqeAed luefin:, e~qeAeds l!sodep mueunoped enuenel pasn pue p~p!Ao~Sd% 3!NeS punjeiul :elqehed elqeKed elqehed 11or6edp elqeAed
swueleg pun3 elm JOJ spun) Jelllo pasn pue pap!no~ds m!Nes ueol :aiqen!~i?luewu~.(selq!pallrnun 104 sa3umolle JO leu) (panu!luo3) LOOZ '16 Jaqwmea SONn4 lVLN3I"INtl3AOD MOWWNON 133HS
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CITY OF SOUTH BEND COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31,2007 (Continued) && Cash and cash equivalents Cash with fiscal agent Investments Receivables (net of
allowances for uncnllectibles): lnteresi Taxes Accounts intergovernmental Loans lnterfund receivable: Interfund loan lnterfund services provided and used Advances to other funds Property
held for sa[e Total assels Liabilities: Accounls payable Accrued payroll payable Contracts payable Interfund payable: lnterfund sewlws provided and used Deferred revenue Performance
deposits payable Other current payables Advances from other funds Total liabilities Fund balances: Reserved for: Encumbrances Noncurrent loans receivable Property held for resale Debt
sewiw Advances to other funds Unreserved, reported in: Special revenue funds Capital prajects funds Total fund balances Total liabilities and fund balances Special Revenue Debt Service
Funds Leaf Redevelopment College Football Collection Police Industrial Bond -Hall of Fame and Removal K-9 Unit Rainy Day Revolving Totals Studebaker Debt Service Continued on the next
ClrY OF SOUTH BEND COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31.2007 (Continued) Cash and cash equivalents Cash with fiscal agent Investments Receivables (net of allowances
for uncollectibles): Interest Taxes Accounts Intergovernmental Loans lnterfund receivable: Interfund loan lnterfund services prov~deda nd used Advances to other funds Property held for
sale Total assets Liabilities and Fund Balances Liabilities: Accounts payable Accrued payroll payable Contracts payable tnterfund payable: lnterfund services provided and used Defened
revenue Performance deposils payable Other current payables Advances from other funds Total liabilities Fund balances: Reserved for: Encumbranws Noncurrent loans receivable Property
held for resale Debt service Advances to other funds UnraseNed, reported in: Special revenue funds Capital projects funds Total fund balances Total liabilities and fund balances Debt
Service Funds Redevelopment Redevelopment Redevelopment Erskine Bond -Bond -Bond -EDIT Bond -EDIT Bond -Redevelopment Commons Airport Century Pala~s Plaza Garage Plaza Garage Authority
TIF Debt Taxable Center Royale Tax Exempt Taxable Debt Service Service 1,542,855 52,770 880.130 3.408 5.971 1,938,459 231.092 $ 1,542,855 $ 52,770 $ 880,130 $ 5.971 $ 1.938.459 $ 231.092
Continued on the
Cash and cash equivalents Cash with fiscal agent Investments Receivables (net of allowances for unwileclibles): Interest Taxes Amunts Intergovernmental Loans lnterfund receivable: lnterfund
loan Interfund services prw~deda nd used Advances to other funds Property held for sale Total assets Liabilities and Fund Balances Liabilities: Accounts payable Accrued payroll payable
Contracls payable lnterfund payable: interfund services provided and used Deferred revenue Performance deposils payable Other current payables Advances from other funds Tdal liabilities
Fund balances: Reserved for: Encumbrances Noncurrent loans receivable Properly held for resale Debt service Advances to other funds Unreserved, reported in: Special revenue funds Capital
projects funds Total fund balances Total liabilities and fund balances CITY OF SOUTH BEND COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31.2007 (Continued) Debt Service
Funds Capital Projects Central TIF Erskine Emergency Development Professional Covelaski Village Medical Area Bond Sports Stadium Zoo Debt Service Totals Sewi-s Pmcseds Development Capital
Endowment Continued on the
3 2. " " ' 5 U) a N m n ti) tft R 0 , " " , , , " * m tt) tt) h " h 6". ' 000 ' " "G& 8 9 N 9 '" E 9rz N 69 ti) -N m f"" " '3 z z 2 2 5 N. (9 m Y1 2 F -N. N 2 . 2 2 -2 ti) (A E' 0" ,
a ' " 0 = ' I 0 8 m m 0, 9 t -m 0 g . r --. 0 r r --.-'0 ..--ti) (ft 8 " ' 0 . " elm" ' f 2 '4 -. B g rn S! 8 a -9 ti) I , , , I , . ) I , , , , . ' * q $ ? j z s g (A tt) 2" " ' " 2
m u m -' N m ' 6 2 3 " 3 o? m. 0-m-% I-(0 N N tt) 0 7 0 , I I I ( 4 + , a n , , ' w (0D 8 0 m m m e3 tt) ,-r 0 m O " ' a"" m h s In '2 E z 0. --r-. o? s m-r 0. z 5 h0 (D 6 7 r m -z-:
z -7 s tft b94 r m -QI x g g n i 2 ? m -s m g c 12 f :<I -a g Y;s -a ", ,sBa Y) L : 3 2 5 : s ~ s ~ , 8, s e~ 5 ~~ $~ 3 ~ 2 ~ r n g m % E c u a ~ 3 . ..s.mz ec rp -pz~,f e $ z' a m a
a n g c g : .2-: ; ; h e k 3 " E h $ ~ ~ ~ ~= ox ~ gE ~~ Z g%i z=g z z8 ~z = z~s g dg $ os$ ~r3 s zsm$~$wgz r&~i dW$ g EBB~ I3-2= -E4ao-C 5 a 3 -m m 5 U. 2 3 5 t
CITY OF SOUTH BEND COMBINING BALANCE SHEET NONMMOR GOVERNMENTAL FUNDS Deoember 31,2007 (Continued) Capital Projects TIF Community Downtown TIF Revilalkation TIF No. 1 -TIF No. Building
Leighton TIF -West Redevelopment Enhancement Southside Southside Operalions Plaza Washington General District Development Development Cash and cash equivalents Cash with fiscal agent
Investments Receivables (net of allowances for uncollectibles) Interest Tarces Accounts intergovernmental Loans lnlerfund recajvable: lnterfund loan lnterfund services provided and used
Advances to other funds Properly held for sale Total assets 8 -$ 122,871 $ 987,113 $ 92.958
$ 2,576,239 $ 529.569 $ 6,031 Liabilities and Fund Balances Liabilities: Accounts payable Accrued payroll payable Contracts payable lnterfund payable: lnterfund services provided and
used Defeferred revenue Performance deposits payable Other current payables Advances from other funds Total liabilities Fund balances: Reselved for. Encumbrances Noncurrent loans receivable
Property held for resale Debt service Advances to other funds Unreserved, reported in: Special revenue funds Capital projects funds Total fund balanws Total l~abilitiesa nd fund balances
Continued on the next page
I , , , W F-. -3 t 8B , a , , 5 ,-* " I . V) r m r;. *" ah -%r (ft ' ' 0 m m a. w fi lr)
CITY OF SOUTH BEND COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31.2007 (Conl~nued) Capital Proiects South Bend Total Palais Royale Erskine Building Nonmajor Historic
Equipment Morris Commons corporation Governmental Preservation Leasing Entertainment TLF Project Construction Totals Funds Cash and cash equivalents Cash with fiscal agent Investments
Receivables (net of allowances for uncollect~bles): Interest Tares Accounts Intergovernmental Loans lnterfund receivable: lnterfund loan lnterlund services provided and used Advances
to other funds Property held for sa[e Total assets Liabilities: Accounts payable Accrued payroll payable Contracts payable lnterfund payable: lnterfund services provided and used Deferred
revenue Performance deposits payable Other current payables Advances from other funds Total llab~lities Fund balances: Reserved for; Encumbrances Noncurrent loans receivable Property
held for resale Debt se~ice Advances to other funds Unreserved, reported in: Special revenue funds Capital projects funds Total fund balances Total liabilities and fund balances
CIN OF SOUTH BEND COMBINING STATEMENT OF REVENUES. EXPENDITURES, AND OTHER CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For The Year Ended December 31.2007 Spec~aRl evenue Studebaker
Motor Oliver Economic Vehicle Recreation Revlalizat~on Development Community Police Police Highway Nonreverling Grants Slate Grants Development Federal Grant State Seizure Revenues:
Taxes: Property County option income County economic development income Professional sports development Communily revitalization enhancement dbstriict Intergovernmental Charges for services
Fines and forfeits Interest Donations Sale of property Other Total revenues Expenditures: Current: General government Public safety Highways and streets Economic development Culture
and recreat~on Debt sawice: Principal lnlerest and Rscal charges Capital outlay: General government ~ubl rcsa fety Economic development Cullwe and recreation Total expenditures Excess
(deficiency) of revenues over (under) expenditures Orhar fiiancing sources {uses): Transfers in Transfers out Debt issuance Tolal otherfinanclng sources (uses) 160,000 9,603 -1.342.634
Net change in fund balances 1.101.821 197 1,136,471 (456.457) (717.995) 13,415 Fund balances -beginning 1,565,757 591,485 801.210 3,803,029 5,656,869 1 24,657 Fund balances -end~ng $
2,767.578 5 591.683 $ 1,937.681 $ 3.346.572 $ 4.938.874 $ 1 $ 38,072 Continued on
CITY OF SOUTH BEND COMBlNlNG STATEMENT OF REVENUES. EXPENDITURES. AND OTHER CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For The Year Ended December 31. 2W7 (Continued) Special
Revenue Law Enforcement Conrinu~ng Local Road Human Riahts East Race Special Educat~on Build Indiana General Grant and Street Federal Waterway Events Revenues: Taxes: Property County
option income County economic development income Professional sports development Community revitalization enhancement district Intergovernmental Charges for sewices Fines and forfeils
Interest Donations Sale of property Other Total rev8nues Expenditures: Current: General government Public safely Highways and streets Economic development Culture and recreation Debt
sewice: Prinapal Interest and fiscal charges Capltal outlay: General government PU~IIC safety Economic development Culture and recreation Total expenditures Excess (aefic~ency)o f revenues
over (under) expenditures Other financing sources (uses): Transfers in Transfers out Debt issuancs issuancs Tolal other frnancjng sources (uses) Net change m fund billances Fund balances
-beginning Fund balances -ending Continued on
CITY OF SOUTH BEND COMBINING STATEMENT OF REVENUES. EXPENDITURES. AND OTHER CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For The Year Ended December 31.2007 (Continued) Revenues:
Taxes: Property Counly option income County economic development income Professional sports development Community revitalaation enhancement distr~d lntergovemmenlal Charges for sewices
Fines and forfeits Interest Donations Sale of property Other Total revenues Expenditures' Current: General government Public safety Highways and streets Economic development Culture
and recreation Debt servlce: Principal Interest and fiscal charges Capital outlay. General government Public safety Economic developmenl Culture and recreation Total expenditures Excess
(deficiency) of revenues over (under) expenditures Other financing sources (uses): Transfers in Transfers out Debt issuance Tolal other financing sources (uses) Net change in fund balances
Fund balances -beginning Fund balances -ending Econom~c Regional Development tnd~ana COPS Block Police COPS MORE Federal Drug Commission Hazmat River Rescue Grant II Academy Grant Enforcement
Cont~nuedo n a e ~ e a a m e a a a a o e * a a e e o a * e e ~ ~ ~ e e ~
CITY OF SOUTH BEND COMBINING STATEMENT Of REVENUES. EXPENDITURES, AND OTHER CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For The Year Ended December 31.2007 (Continued) Revenues:
Taxes: Properly County option income County economic development Income Professional sports development Community revitalization enhancement district Intergovernmental Charges for services
Flfles and forfeils Interest Donations Sale of property Other Total revenues Expenditures: Current: General government Public safety Highways and streets Economic development Culture
and recreation Debt service: Principal Interest and fiscal charges Capllal 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 Transfers out Debt issuance Total other financing sources [uses) Net change in fund balances
Fund balances -beginning Fund balances -ending Special Revenue Debt Service Funds Leaf Redevelopment College Football Collen~on Pollce lndustrlal Bond -Hall of Fame and Removal K-9 Unit
Rainy Day -Re volving Totals Studebaker Debt Service Conlinued on
CITY OF SO-U-T H B-E-N DCOMBlNlhG STATEMENT OF REVEhJES. EXPENOITJRES. AhD OTHER CHANGES IN FJND BALANCES NONMAJOR GOVERNMENTAL FLNDS Revenues: Taxes: Properly County option Income County
economic development income Professional sports development Community revitalization enhancement district lntergovemmental Charges for services Fines and forfeils Interest Donations
Sale of property Other Total revenues Expenditures: Current: General government ~ u b l l sca fety H~ghwaysa nd streets Economic development Culture and recreation Debt servlce: Principal
Interest and fiscal charges 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 Transfers out Debt issuance Total other finannng sources (uses) Net change in fund balances Fund balances -beginning Fund balances
-ending For The Year Ended December 31.2037 (Continued) Debt Service Funds Redevelopment Redevelopment Redevelopment Ersk~ne Bond -Bond -Bond -EDIT Bond -EDIT Bond -Redevelopment Commons
Airport Centuw Pala~s Plaza Garage Plaza Garage Authority TIF Debt Taxable Center Royale Tax Exempt Taxable Debt Se~ice Service Continued on
a*....... e e ~ e e e * * ~ * e e a e * ~ ~ * * * o e o e e ~ Revenues Taxes: Propeny County opt~onin come CITY OF SOUTH BEND COMBINING STATEMENT OF REVENUES, EXPENDITURES. AND OTHER
CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNOS For The Year Ended December 31.2007 (Cont~nued) County ewnomlc development income Professional sports development Cornmunily revitalization
enhancement district Intergovernmental Charges for services F~nesa nd forfebts Interest Donations Sale of property Other Total revenues Expenditures: Current: General government Public
safety Highways and streets Economic development Culture and recreation Debt seruice. Pr~nclpal Interest and fiscal charges Cap~taol utlay: General government Public safety Economic
development Culture and recreation Total expendrtures Excess (deficiency) af revenues over (under) expenditures Other financing sources (uses). Transfers in Transfers out Debt issuance
Total other financing sources (uses) Net change in fund balances Fund balances -beg~nning Fund Fund balances -ending Debt Service Funds Cap~taPl rojeds Central TtF Erskine Emergency
Developmen! Professional Coveleski V~llage Medical Area Bond Sports Stadium Zoo Debt Se~ice Totals Services Proceeds Development Capital Endowmenl Cont~nuedo
CITY OF SOUTH BEND COMBINING STATEMENT OF REVENUES, EXPENDITURES. AND OTHER CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For The Year Ended December 31.2007 (Continued) Revenues:
Taxes Property County option mcome County economic development income Professional sports development Community revitalization enhancement district lntergovemmental Charges for services
Fines and forfeits Interest Donations Sale of properly Other Total revenues Expenditures Current: General government Public safety Highways and streets Ecnnomic development Culture and
recreation Debt service: Pr~ncipal lnterest and fiscal charges 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 Transfers out Debt issuance Total Mher financing sources (uses) Net change in fund balances
Fund balances -beginning Fund balances -ending Economic Morris Cumulatnre Cumulative Development Performing Capital Capltaf lnwme Cumulative TIF -Arts Center Development Improvement
Tax Sewer SamplelEwing Capital Downtown Continued on the next
CITY OF SOUTH BEND COMBINING STATEMENT OF REVENUES. EXPENDITURES. AND OTHER CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For The Year Ended Oecember 31.2007 (Continued) Capital
Projects TIF Community Downtown TI F Revitalization TIF No. 1 -TIF BuiMing LeigMon TIF -West Redevelopment Enhancement Souths~de Southside Operations Plaza Washington General District
Development Development Revenues Taxes: Property County oplion income County economic developmen! income Professional spolts development Community revitalization enhancement district
Intergovernmental Charges for sewices Fines and forfeits Interest Donations Sale of property Other Total revenues 141,836 302,315 3,907 1,091,300 458,M3 Expenditures: Current: General
government Public safety Highways and streets Economic development Culture and recreation Debt service: Principal lntwest and Bscal charges Capital outlay: General government Public
safety Ewnom~dce velopmenl Culture and recreation Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses), Transfers in Transfers
out Debt issuance Total other financing sources (uses) Net change in fund balances Fund balances -beg~nning Fund balances -ending Continued on the next
(I) g S .V-I z u m a l -E 6 a a 0 ", 0 .-9 -5 -I e~ S Ec E :ss a -O T 6 g ? z g S ', .N p . Y S B -3 .-E a--(0 a c o -p e t e .a0-sc:-, ?E!f g • f s ; , ~ . E S g eg m , , 5 5 & ? E
g 2 k " " 8 L a : ~ ~ 8 ; ~ ~ $ ~ $ ; z " ~ 3 E Z ~ C L ~ ~a O a 2 LLI a r v 0. 12 6e 5 64 -E. 5 " 69 % -Q g m T1 C3 .--0 0 I 3 ' 2 1 sl' ' 3 ' 9 ; 2-$ 8 : $ 2 I 1 d I I I I l l l r
r O I I l I I ~ I I 0 1 ( I I I t4 , , , , , 1 , 1 1 . 1 4 " " " ' " " "7 -0 rr) m P m-V) .O : 2 p I 0, I I I , , , , l , l l r l l l 4 , I I I I 8 I I I I V) , , , # ~ S r n , ~ # r
n # N ". N x I ! , 8 , i 3 . z $ -m 5 3; $$ k+ Z( I ) , , E ", (U -. X 2 ' r ' mhm ' s mm ' " 7 9 $ mg 0 tff V) h I-2 ; !. !. 3. 01 N 2 .s 3. 7 0 , , , I , I , I I I I I I I I S I I
' 3 ' " .*5 m N , ' " m " ' l , ~ 8 6e 4 w , 1 1 1 1 1 ' ' I m l I I b 1 I 1 8 m 1 1 , 1 1 1 1
CITY OF SOUTH BEND COMBINING STATEMENT OF REVENUES. EXPENDITURES. AND OTHER CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS For The Year Ended December 31,2007 (Continued) Revenues:
Taxes Property County option inwme County economic development inwme Professional sports development Community revitalization enhancement distria Intergovernmental Charges for services
Fines and forfeits Interest Donations Sale of properly Other Total revenues Expenditures: Current General government Public safety H~ghwaysa nd streets Economic development Culture and
recreation Debt service: Princ~pal Interest and fiscal charges Capital outlay: General government Public safety Economic development CuRure and recreation Total expenditures Excess (defiuency)
of revenues over (under) expenditures Other financing sources (uses): Transfers in Transfers out Debt issuance Total other financing sources (uses) Net change in fund balances Fund balances
-beginning Fund balances -ending Capital Projects South Bend Palais Royale Erskine Erskine Building Nonmajor Historlc Equipment Morris Commons Corporabon Governmental Preservation Leasing
Enterta~nment TIF Project Construction Totals
CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL-MAJOR GOVERNMENTAL FUNDS CAPITAL PROJECTS FUNDS -COUNTY OPTION INCOME TAX For The
Year Ended December 31,2007 Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Taxes: County option income Other
Total revenues Expenditures: Capital outlay: General government: Other services and charges Capital outlay Total expenditures Net change in fund balances Fund balances -beginning Fund
balances -ending BudaeVGAAP Reconciliation Net change in fund balance, budget basis To adjust revenues for accruals To adjust expenditures for accruals To adjust expenditures for encumbrances
Net change in fund balance, GAAP basis
cln OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES. AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL -NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS -MOTOR VEHICLE HIGHWAY For The
Year Ended December 31,2007 Revenues: Intergovernmental Charges for services Other Total revenues Expenditures: Current: Highways and streets: Personal services Supplies Other services
and charges Capital outlay Other uses Total expenditures Net change in fund balances Fund balances -beginning Fund balances -ending Net change in fund balance, budget basis To adjust
revenues for accruals To adjust expenditures for accruals To adjust expend~turesfo r encumbrances Net change in fund balance, GAAP basis Variance Actual With Final Budgetary Budget Budgeted
Amounts Basis Positive Original Final Amounts (Negative)
CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL -NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS -RECREATION NONREVERTING For
The Year Ended December 31,2007 Revenues: Charges for services Other Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Total
revenues Expenditures: Current: Culture and recreation: Personal services Supplies Other services and charges Other uses Capital outlay Total expenditures Net change in fund balances
Fund balances -beginning Fund balances -ending BudaeVGAAP Reconciliation Net change in fund balance, budget basis To adjust revenues for accruals To adjust expenditures for accruals
To adjust expenditures for encumbrances Net change in fund balance, GAAP basis
CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL -NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS -COMMUNITY DEVELOPMENT For The
Year Ended December 31.2007 Variance Actual With Final Budaetarv Budaet Revenues: Intergovernmental Other Total revenues Expenditures: Current: Urban redevelopment and housing: Personal
services Svpplies Other services and charges Other uses Capital outlay Total expenditures Other financing sources: OperaEng transfers in Net change in fund balances Fund balances -beginning
Fund balances -ending Budgeted Amounts Basis -~osiive Original Final Amounts (Negative) BudaeffGAAP Reconciliation Net change in fund balance, budget basis To adjust revenues for accruals
To adjust expenditures for accruals To adjust expenditures for encumbrances Net change in fund balance, GAAP basis
CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL -NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS -LOCAL ROAD AND STREET For The
Year Ended December 31,2007 Variance Actual With Final Budgetary Budget Revenues: Intergovernmentat Other Budgeted Amounts isi is positive Original Final Amounts (Negative) -Total revenues
Expenditures: Current: Highways and streets: Capital 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 Net change in fund balance, GMP basis
Revenues: CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL -NONMAJOR GOVERNMENTAL FUNDS DEBT SERVICE FUNDS -REDEVELOPMENT BOND -STUDEBAKER
For The Year Ended December 31,2007 Taxes: Property Intergovernmental Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Total
revenues 12,169 12,379 210 Net change in fund balances 12,169 12,379 21 0 Fund balances -beginning (7,828) (7.828) (7,828) Fund balances -ending $ (7,828) $ 4,341 $ 4,551 $ 21 0 BudaeVGAAP
Reconciliation No reconcilement necessary since budgetary basis equals GAAP basis
C I N 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 31,2007 Variance Actual With Final Budgetary Budget 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 BudqetlGAAP Reconciliation Net change in fund balance, budget
basis To adjust revenues for accruals To adjust expenditures for acc~als Net change in fund balance, GAAP basis Budgeted Amounts asi is positive Original Final Amounts (Negative)
CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL -NONMAJOR GOVERNMENTAL FUNDS CAPlTAL PROJECTS FUNDS -EMERGENCY MEDICAL SERVICES
For The Year Ended December 31,2007 Variance Actual With Final Budgetary Budget Revenues: Charges for services Other Total revenues Expenditures: Capital outlay: Public safety: Other
services and charges Capital outlay Debt service: Principal Interest and fiscal agent fees Total expenditures Other financing uses: Operating transfers out Net change in fund balances
Fund balances -beginning Fund balances -ending BudaeffGAAP Reconciliation Net change in fund balance, budget basis To adjust revenues for accruals To adjust expenditures for accruals
To adjust expenditures for encumbrances Net change in fund balance, GAAP basis Budgeted Amounts asi is Positive Original Final Amounts (Negative)
CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES. AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL -NONMAJOR GOVERNMENTAL FUNDS CAPITAL PROJECTS FUNDS -PROFESSIONAL SPORTS DEVELOPMENT
For The Year Ended December 31,2007 Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Revenues: Taxes: Professional sports
development Intergovernmental Other Total revenues Expenditures: Capital outlay: Culture and recreation: Other uses Other financing uses: Transfers out Net change in fund balances Fund
balances -beginning Fund balances -ending BudaeUGAAP Reconciliafion Net change in fund balance, budget basis To adjust revenues for accruals To adjust expenditures for encumbrances Net
change in fund balance, GAAP basis
em... ~....me....e.e..em...e.....e.~.eeeeee.ee.e...emee CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES. AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL -NONMAJOR GOVERNMENTAL
FUNDS CAPITAL PROJECTS FUNDS -CUMULATIVE CAPITAL DEVELOPMENT For The Year Ended December 31,2007 Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original
Finaf Amounts (Negative) Revenues: Taxes: Property Intergovernmental Other Total revenues Expenditures: Capital outlay: General government: Other services and charges Capital outlay
Debt service: Principal Interest and fiscal agent fees Total expenditures Net change in fund balances Fund balances -beginning Fund balances -ending BudoeVGAAP Reconciliation Net change
in fund balance, budget basis To adjust expenditures for accruals To adjust expenditures for encumbrances To adjust expenditures for accruals Net change in fund balance, GAAP basis
CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL -NONMAJOR GOVERNMENTAL FUNDS CAPITAL PROJECTS FUNDS -CUMULATIVE CAPITAL IMPROVEMENT
For The Year Ended December 31,2007 Revenues: Intergovernmental Other Variance Actual With Final Budgetary Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative) Total
revenues 578.339 578,339 578,596 257 Expenditures: Transfen out Total expenditures 588,720 588.720 51 1,790 76,930 Net change in fund balances (10.381) (10,381) 66,806 77,187 Fund balances
-beginning 239,540 239,540 239,540 Fund balances -ending $ 229,159 $ 229,159 $ 306,346 $ 77,187 BudaeUGAAP 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 CAPITAL PROJECTS FUNDS -ECONOMIC DEVELOPMENT INCOME
TAX For The Year Ended December 31,2007 Variance Actual With Final Bud-getary. Budget Budgeted Amounts Basis ~osicve Original Final Amounts (Negative) Revenues: Taxes: County economic
development income tax $ 3,464,152 $ 3,464,152 $ 3,702,467 $ 238,315 Other 175,000 175,000 53,971 (1 21,029) Total revenues 3,639,152 3,639,152 3,756,438 117.286 Expenditures: Capital
outlay: General government: Other services and charges Capital outlay Debt service: Principal Interest and fiscal agent fees Total expenditures 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 Net change in fund balance, GAAP basis
CITY OF SOUTH BEND SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL -NONMAJOR GOVERNMENTAL FUNDS CAPITAL PROJECTS FUNDS -MAJOR MOVES For The Year Ended
December 31,2007 Revenues: lntergovemrnental Other Total revenues Fund balances -beginning Fund balances -ending BudaeVGAAP Reconciliation Net change in fund balance, budget basis To
adjust revenues br accruals Net change in fund balance, GAAP basis Variance Actual With Final Budgetaly Budget Budgeted Amounts Basis Positive Original Final Amounts (Negative)
Consolidated Building -Parking Garage -Solid Waste -Blackthorn Golf Course -NONMAJOR ENTERPRISE FUNDS To account for the operation of the consolidated St. Joseph County1 South Bend Building
Department. To account for the operation and maintenance of the City's parking garages. To account for the provision of solid waste services. To account for the operation and maintenance
of the City's Blackthorn Golf Course.
CITY OF SOUTH BEND COMBINING STATEMENT OF NET ASSETS -NONMAJOR ENTERPRISE FUNDS December 31,2007 Consolidated Parking Solid Blackthorn Building Garage Waste Golf Course Totals Current
assets: Cash and cash equivalents Accounts receivable (net of allowance) Accounts receivable -other lnterfund receivables: lnterfund services provided and used Inventories Restricted
assets: Cash, cash equivalenls and investments: Revenue bond covenant accounts Capital outlay accounts Interest receivable Total current assels Noncurrent assets: Deferred charges: Unamortized
debt issue costs Unamortized loss on salelleaseback Total deferred charges Capital assets: Land and construction in progress Other capital assets (net of accumulated depreciation) Total
capital assets Total noncument assets Total assets -1,132,020 -448,469 1,580,489 46,880 3,881,902 1,018,499 2,841,984 7,789,265 46,880 .5,013,922 1,018,499 3,290,453 9,369,754 46,880
9,5$5,105 1,018,499 3,312,853 13,893,337 ?86,408 9,516,411 1.719.718 4,793,193 16,215,730 Continued on next page
CITY OF SOUTH BEND COMBINING STATEMENT OF NET ASSETS -NONMAJOR ENTERPRISE FUNDS December 31.2007 (Continued) Liabilities Current liabilities: Accounts payable Interfund payables: lnterfund
loans lnterfund services provided and used Accnred payroll payable Compensated absences payable Current liabilities payable from restricted assets: Revenue bonds payable Capital leases
payable Accrued interest payable Consolidated Parking Solid Blackthorn Building Garage Waste Golf Course Totals Total current liabilities 61,317 555,537 744,416 612.398 1,973,668 Noncurrent
liabilities: Advances from other funds -2,728,000 2,728,000 Revenue bonds payable (net of unamortized discounts and deferred amount on refunding) -2,702,080 2,702,080 Capital leases
payable -498,646 -498,646 Unamortized gain on salelleaseback 24,119 24,119 Total noncurrent liabilities 24,119 498,646 5,430,080 5,952,845 Total liabilities 61,317 579,656 1,243,062
6,042,478 7,926,513 Net Assetg Invested in capital assets, net of related debt 46,880 5,013,922 681,410 103.373 5,845,585 Restricted for debt service -1,273,217 1,273,217 Reserved for
capital asset outlays 5,236 5,238 Unrestricted 78,211 3,922,833 (209,992) (2,625,875) 1,165,177 Total net assets $ 125,091 $ 8,936,755 $ 476.656 $ (1,249,285) $ 8,289,217
CITY OF SOUTH BEND COMBINING STATEMENT OF REVENUES. EXPENSES, AND OTHER CH~NGEINS F UND NET ASSETS NONMAJOR ENTERPRISE FUNDS For the Year Ended December 31,2007 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
Total operating expenses Operating income (loss) Nonoperating revenues (expenses): lnterest and investment revenue Interest expense Amortization expense Gain on disposition of assets
Total nonoperating revenue (expenses) Income (loss) before contributions and transfers Contributions Transfers in Transfers out Change in net assets Total net assets -beginning Total
net assets -ending Consolidated Parking Solid Blackthorn Building Garage Waste Golf Course Totals
CITY OF SOUTH BEND COMBINING STATEMENT OF CASH FLOWS -NONMAJOR ENTERPRISE FUNDS For The Year Ended December 31.2007 Consolidated Parking Solid Blackthorn Building Garage Waste Golf Course
Totals Cash flows from operat~ng activities: Receipts from customers and users $ 1,077.983 $ 860,036 $ 4,141,524 $ 1,513,473 $ 7,593,016 Receipts from interfund services provided 52,000
52,000 Payments to suppliers (51.970) (666.637) (1,350,387) (1,345,149) (3,414,143) Payments to employees (941.825) -(1,391.990) -(2,333,815) Payments for interfund services used (77.253)
(45,817) (1,091.710) (42.469) (1,257,249) Net cash provided by operating activit~es 6,935 147.582 359,437 125,855 639,809 Cash flows from noncapital financing activities: Advances from
other funds 712,454 645,000 1,357,454 Repayment of advances from other funds -(887,967) -(887,967) Transfers from other funds 27,832 12,000 39,832 Transfers to other funds (43,567) (43,567)
Net cash provided (used) by noncapital financing a@ivities (147,681) 613,433 465,752 Cash flows from capital and related financing activ~ties: Acquisition and construction of capital
assets -(429,123) (429,123) Capital contributions 249,718 249,718 Principal paid on capital
debt -(359,952) (512,528) (872,480) Interest paid on capital debt (37,009) (171,803) (208.812) Proceeds from sales of capital assets 6,164 6.164 Net cash used by capital and related
financing activities (390.797) (863.736) (1,254,533) Cash flows from investing activities: Interest received Net increase (decrease) in cash and cash equivalents 7,726 (29,047) (71,136)
(92,457) Cash and cash equivalents, January 1 (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 Cash and cash equivalents, December 31 (Including $1,325,633 and $5,238 for the revenue band covenants and capital outlays, respectively, reported in restricted
accounts) $ 138,763 $ -$ 366,258 $ 1,455,158 $ 1,960,179 Continued on next page
CITY OF SOUTH BEND COMBINING STATEMENT OF CASH FLOWS -NONMAJOR ENTERPRISE FUNDS For The Year Ended December 31,2007 (Continued) Consolidated Parking Solid Blackthorn Building Garage
Waste Golf Course Totals Reconciliation of operating income (loss) to net cash provided by operating activities: Operating income (loss) Adjustments to reconcile operating income (loss)
to net cash provided by operating activities: Depreciation expense Bad debt expense (Increase) decrease in assets: Accounts rece~vable Other accounts receivable lnterfund receivable
Inventories Increase (decrease) in liabilities: Accounts payable lnterfund payable Accrued payroll payable Compensated absence payable Total adjustments Net cash provided by operating
activities Noncash ~nvestingc, apital and fjnancing activities: Fixed asset disposals Fixed assets acquired by capital lease
Liability Insurance Premium Reserve -Self-Funded Employee Benefits -Central Services -INTERNAL SERVICE FUNDS 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. To account for employer and employees' contributions for
a medical insurance plan. To account for expenses related to fuel, vehicle repairs and various supplies provided to City departments on a cost-reimbursement basis.
CITY OF SOUTH BEND COMBINING STATEMENT OF NET ASSETS -INTERNAL SERVICE FUNDS December 31. 2007 Liability Self-Insurance Funded Premium Employee Central Rese~e Benefits Services Totals
Current assets: Cash and cash equivalents Interest receivable Accounts receivable lnterfund receivables: lnterfund 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 liab~lities: Accounts payable lnterfund payables:
lnterfund loans lnterfund sewices provided and used Accrued payroll payable Compensated absences Estimate of unfiled claims Total liabilities Net Assets Invested in capital assets, net
of retated debt -1,441,480 1,441.480 Unrestricted 2,858.496 3,724,271 235,014 6,817,781 Total net assets $ 2,858,496 $ 3,724,271 $ 1,676,494 $ 8.259.261
CIN OF SOUTH BEND COMBINING STATEMENT OF REVENUES, EXPENSES, AND OTHER CHANGES IN FUND NET ASSETS INTERNAL SERVlCE FUNDS For The Year Ended December 31,2007 Operating revenues. Employeelemployer
contributions Charges for sales and sewices Total operating revenues Operating expenses: Operat~ona nd 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 Total net assets -ending Liability Selflnsurance
Funded Premium Employee Central Rese~e Benefits Services Totals
CITY OF SOUTH BEND COMBINING STATEMENT OF CASH FLOWS -INTERNAL SERVICE FUNDS For The Year Ended December 31.2007 Cash fiows from operating activities: Receipts from customers and users
Receipts from interfund services provided Payments to suppliers Payments to employees Payments for interfund services used Liability Self-Insurance Funded Premium Employee Central Reserve
Benefits Sewices Totals Net cash provided (used) by operating activities 562,211 1.932.243 (271,606) 2,222.848 Cash flows from noncapital financing activities: lnterfund loan -3,220,500
3,220,500 lnterfund loan repaid -(2,887,042) (2.887.04g Net cash provided by noncapital financing activities 333.458 333,458 Cash flows from capital and related financing activities:
Acquisition and construction of capltat assets (61,852) (61,852) Cash flows from investing activities: Interest received Net increase in.cash and cash equivalents 659,740 2,042,480 -2,702,220
Cash and cash equivalents, January 1 2,692,581 2,330,310 -5,022,891 Cash and cash equivalents. December 31 $ 3,352.321 $ 4,372,790 $ -$ 7,725,111 Continued on next page
CITY OF SOUTH BEND COMBINING STATEMENT OF CASH FLOWS -INTERNAL SERVlCE FUNDS For The Year Ended December 31,2007 (Contmued) Liability Self-Insurance Funded Premium Employee Central Reserve
Benefits Services Totals Reconciliation of operating incame (loss) to net cash provided (used) by operating activities: Operating income (loss) $ 457,858 $ 1,746,610 $ (107,675) $ 2,096,793
Adjustments to reconcile operating income (loss) to net cash prov~ded(u sed) by operating activities: Depreciation expense (Increase) decrease in assets: Accounts receivable Intergovernmental
receivables lnterfund receivables Inventories Prepaid Items Increase (decrease) in liabilities: Accounts payable lnterfund payables Accrued payroll payable Compensated absences payable
Estimated untiled claims Total adjustments Net cash provided (used) by operating activities Noncash investing, capital and financing activities: Capital asset disposals
* a @m 0* 8* * * * a Pension trust funds 1925 Police Pension -1937 Firefighters' Pension -Agency fund Payroll -FIDUCIARY FUNDS 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. 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. 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.
9 2 g z t l x Y ' 4 t -o m w 0 u7 m m 0. V) OI *"2 % m *w a +"r z Z CJY L $ c CJY r-f: .P V) mm p g 4 C -P $ UI i z V)N-0 I n m a -t--t--(D. t -m o m CbN nm? Pt-69 w rrmm.-'-. (9 t -m
a 1 b OI o 9 '-. 0-m w . Im YN N t 69 6 $07 u: a: 8 4 No %? & w m. (D .
CITY OF SOUTH BEND STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS AGENCY FUND For the Year Ended December 31,2007 Payroll Assets: Cash and cash equivalents, January 1 Additions Deductions
Total assets, December 31 Liabilities Accrued payroll and withholdings payable, January I Additions Deductions Total liabilities, December 31
STATISTICAL INFORMATION
FINANCIAL TRENDS These schedules contain trend information to help the reader understand how the City of South Bend's financial position and performance have changed over time.
City of South Bend, Indiana Net Assets by Component Last Ten Fiscal Years Fiscal Year -2002 2003 2004 -2005 -2006 Governmental activities lnvested in capital assets, net of related debt
$31,654,852 $31,254,629 $7,383,902 $35,777,247 $208,509,577 Restricted 7,167,628 6,381,082 1,966.388 6,138,257 5,225,642 Unrestricted Total governmental activities net assets Business-type
activities lnvested in capital assets, net of related debt $49,514,614 $102,466,792 $93,370,899 $94,833,960 $97,670,533 Restricted 44,235,716 14,456,725 13,254,447 17,942,700 22,535,858
Unrestricted Total business-type activities net assets in o Primary government Invested in capital assets, net of related debt $81,169,466 $1 33,721,421 $100,754,801 $1 30,611,207 $306,180,110
Restricted 51,403,344 20,837,807 15,220,835 24,080,957 27,761,500 Unrestricted Total primary government net assets I Source -City of South Bend Comprehensvie Annual Financial Reports
The City implemented GASB 34 during 2002. Information on net assets by component is not available prior to 2002. The City implemented the retroactive reporting of infrastructure assets
required by GASB 34 during 2006. Net assets is defined as the difference between totat assets and total liabilities and can generally be thought of as the networth of the City.
co_ Z? 1'-a!. e, " '-* --bt 9 '-m hen -? o m OLOt-*? (D -?ma z--SF b m m moco 9 r C Q 0 -0b co F-*O L n 'ZCS m a t -7 CDCOQ) mwc? nr ,-mrcq m 2--="-c'?? r-'? 0-b--7 V hhh b m a O b t
-9 C O r C . 3 b a f -0 --25 C S 6 O b N a" w w n O N m ro -bb -m --.--.-mCOa m "-o m mcom m a 7 t 0? V *-m VY " ;-m -1-
City of South Bend, Indiana Changes in Net Assets, Last Ten Fiscal Years (Continued) Fiscal Year g3J -2003 -2004 2005 I Program Revenues Governmental activities: Charges for services:
General government Public safety Highways and streets Economic development Culture and recreation Operating grants and contributions Capital grants and contributions Total governmental
activities program revenues Business-type activities: Charges for services: Water C-r cn Wastewater h, 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 (Ex~ensellRevenue Governmental activities
(64,150,009) (68,994,796) (80,894,268) (1 04,603,413) (91,562,482) Business-type activities 751,730 (669,168) (2,846,054) (4,720,962) Total primary government net expense (63,398,279)
(69,663,964) (83,740,322) (109,324,375) (86,577,339)
City of South Bend, Indiana Changes in Net Assets, Last Ten Fiscal Years (Continued) Fiscal Year -2002 -2003 -2004 -2005 General Revenues and Other Chanaes 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 Other Loss onf Sale of Redevelopment Properties Net Pension Obligation Transfers Total governmental activities ffl W 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 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 General fund Reserved Unresewed Total -General Fund Fiscal Year -1998 -1999 -2000 -2001 -2002 -2003
-2004 -2005 Other Governmental Funds Reserved 23,854,599 25,696,913 26,302,929 33.676.079 37,163,342 33,911,725 39,224,425 38,498,351 Unreserved, reported in: Special revenue funds 9,313,950
13,871,625 11.820,311 7,389,639 9,981,610 9,881,359 10,159,432 14,134,371 Capital projects funds 24,968,734 17,523,976 16,088,256 16,111,900 22,299,698 70,656,781 43,815,737 40,624,644
Debt services funds 0 0 0 0 0 0 0 Total -Other Governmental Funds $58,137,283 $57,092,514 $54,211,496 $57,177,618 $69,444,650 $114,449,865 $93,199,594 $93,257,366 Grand Total -Governmental
Funds $71,382,713 $73,690,960 $71,290,683 $75,265,509 $86,499,572 $134,955,892 $115,221,287 $122,001,560 F' Source: City of South Bend Comprehensive Annual Financial Repom 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 for use for a specific
purpose.
City of South Bend, Indiana Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years I Revenues Taxes Licenses, fees and permits Fines and penalties Charges for services Intergovernmental
lnvesfment earnings Other revenues Total revenues Expenditures General government Public Safety Highways and Streets Health and Welfare Culture and Recreation Economic Development Captial
Outlay Debt Service Interest and Fiscal Charges Principal Total expenditures
N g 2 81 2 0m cr, b-1 6 r .r 8 a-1 g -i2= * ill 3 5 s 4 "-, o^ s9 q "h N = i7 F br $ -N0 f! 2 -r ca m. q r q ij-m ., 2 md gc a o o o om~ o 2 3 0 o m m ~ r-9 n? m -zz rg-mX-rX--'zg m2
q3 F as 2 = Y, m o 8 o o w 6 0 o b % 3 X 8%-%. % aiC6'6 ? : m a ni % bNN m" 7-7 8-8-S" 2 3 m a g m *d oooowmoNGC3i o 5 3 0-N. a,, $ 2 SN-;S -m-% m w 5 Y, F o o o o c o ~ o -t. OI. 2'.
q z-8 + m m-4) C9 % 2 2-N 0-(Y1 t -w ( b w lnooocoOIso OJ a t -m 8 6 N (4 04 2 f ZQg R-2 r-cqo? 2 bp, 2 Yt
REVENUE CAPACITY These schedules contain information to help the reader assess the factors affecting the City of South Bend's ability to generate and maintain revenue.
Tax Year1 Collection Year 199711998 199811999 1999/2000 200012001 2001 /zoo2 200212003 200312004 200412005 200512006 200612007 Current Tax Levy $43,117,846 45,509,370 47,658,495 53,823,245
52,762,157 58,326,066 59,875,358 60,833,109 62,058,519 62,723,113 Current Tax Collections $41,251,054 43,263,712 44,930,534 50,904,463 49,330,749 53,726,528 56,03 1,449 56,114,865 58,849,337
57,979,187 CITY OF SOUTH BEND, INDIANA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN YEARS Current Tax Collections as a Percent of Tax Levy 95.67% 95.07% 94.28% 94.58% 93.50% 92.11% 93.58%
92.24% 94.83% 92.44Yo Delinquent Tax & Penalty Collections $1,493,344 1,425,712 1,638,076 1,332,888 1,789,947 2,928,994 2,914,419 2,335,278 3,847,872 2,289,138 Total Tax Collections
$42,744,398 44,689,424 46,568,610 52,237,351 51,120,696 56,655,522 58,945,868 58,450,143 62,697,209 60,268,325 Total Tax Collections as a Percent of Current Tax Levy 99.13% 98.20% 97.71%
97.05% 96.89% 97.14% 98.45% 96.08% 101.03% 96.09% Source -St. Joseph County Auditor's Auditor's Settlement Worksheets Calculations by City of South Bend Department of Administration
and Finance.
+'Dl-.-.-o a m -I . s5'wszi%Eizz2 L o r o l o ~ * N + ---o o o o o o o o a d m h w w O N r -l n m f C um, ~~ Wm l ~. (oD bU Vh -mr Pr Vn r -7 7 -7 9 9 9 9 9 9 D O O O O O O O O O
CITY OF SOUTH BEND, INDIANA DETAIL OF NET ASSESSED VALUATION (For the Year 2006 Payable 2007) South Bend South Bend South Bend South Bend South Bend South Bend Centre Twe Clay Twp German
TWD Peon TWQ Warren TWD Portage TWD Value of land $97,317,470.00 $17,640,950.00 $50,306,200.00 $14,796,720.00 $1,692,900.00 $368,915,970.00 Value of improvements 494,531,400.00 128,070,100.00
425,139,800.00 79,745,700.00 17,855,000.00 2,678,419,205.00 Total value of real estate 591,848,870.00 145,711,050.00 475,446,000.00 94,542,420.00 19,547,900.00 3,047,335,175.00 Less:
Mortgage, veterans, blind, age 65 & other exemptions (138,986,280.00) (24,918,145.00) (48,150,600.00) (7,758,350.00) 0.00 (794,654,276.00) Tax-exempt property (46,871,810.00) (8,817,950.00)
(16,028,300.00) (9,790,220.00) 0.00 (320,116,289.00) Tax increment financing (30,791,076.00) (1,053,888.00) (203,373,782.00) 0.00 (9,163,810.00) (121,958,744.00) Tax abatements (16,365,330.00)
0.00 (38,444,070.00) (2,744,480.00) (10,384,090.00) (3,961,560.00) Net value of real estate 358,834,374.00 110,921,067.00 169,449,248.00 74,249,370.00 0.00 1,806,644,306.00 Gross personal
property assessments 25,049,275.00 5,762,020.00 151,326,i27.00 1,376,260.00 6,535,130.00 354,411,340.00 Less: Tax abatements (748,160 00) 0.00 (9,406,670.00) 0.00 0.00 (12,959,710.00)
Tax-exempt property (1,503,220.00) (144,730.00) (2,186,610.00) (601,370.00) 0.00 (88,484,650.00) Investment deduction (46,260.00) 0.00 (236,590.00) 0.00 0.00 Tax increment financing
0.00 0.00 0.00 0.00 0 00 (16,327,180.00) Net value of personal property 22,751,635.00 5,617,290.00 139,496,257.00 774,890.00 6,535,130.00 236,639,800.00 Net value of utilities 5,778,860.00
2,738,080.00 12,135,620.00 730,560.00 0.00 69,060,660.00 Total net assessed valuation Percentage of Total 12.82% 3.95% 10.62% 2.5 1 % 0.22% 69.89% Summarv Real Personal Property/Property
Utilties Total Percent Total value $4,374,431,415.00 $634,903,932.00 $5,009,335,347.00 100.00% Deductions &exemptions (1 ,O 14,467,65 1 .OO) (282,850 00) (1,014,750,50 1.00) -20.26%
Tax exempt property (401,624,569.00) (92,920,580.00) (494,545,149.00) -9.87% Tax increment financing (366,341,300.00) (16,327,180.00) (382,668,480.00) -7.64% Tax abatements (71,899,530.00)
(23,I 14,540.00) (95,014,070.00) -1.90% Total net assessed valuation $2,520,098,365.00 $502,258,782.00 $3,022,357,147.00 Percent 83.38% 16.62% 100.00% Source: St. Joseph County Auditor's
Ofice.
Year 199711 998 199811 999 1999/2000 2000/2001 200112002 (2) 200212003 200312004 200412005 200512006 200612007 Real Property $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 4,374,431,415 City of South Bend, Indiana Assessed Value and Actual Value of Taxable Property Last Ten Fiscal Years Personal Property
$253,013,925 247,603,471 269,152,472 270,484,158 809,870,700 81 6,672,723 659,263,940 689,419,365 655,066,401 544,460,152 Utilities Property $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 90,443,780 Total Value $891,895,775 897,170,691 933,198,882 944,522,148 2,866,809,790 4,739,829,223 4,493,770,410 4,559,530,815
4,542,679,011 5,009,335,347 Less: Non-Taxed Propert' (1) $272,744,026 271,363,045 286,566,286 295,246,339 907,974,963 ,771,726,609 7,685,920,064 1,740,625,997 1,707,413,121 1,986,978,200
Total Net Taxable Value (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 vaues increased and tax rates decreased. Source:
St Joseph County Auditofs Office
CITY OF SOUTH BEND, INDIANA ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN YEARS Real Property Personal Property Utilities Tax Year/Assessed Estimated Assessed Estimated
Assessed Estimated Assessed Collection Year Value Value Value Value Value Value 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. (I) The 2001 pay 2002 tax rates were converted by current state legislation from 33% to 100% of assessed valuation. This conversion
had no impact on total dollars. Assessed values increased and tax rates decreased.
City of South Bend, Indiana Principal Real Property Taxpayers -Current and Nine Years Ago December 31,2007 2007 1998 Net Assessed Percent Net Assessed Taxpayer Type of Business Real
Value Rank of Total Value Edward Rose of Indiana Apartments & Real Estate Memorial Health Systems, Inc. Health Care Park Jefferson Realty, LLC Apartments & Real Estate Maple Lane Apartments
Apartments & Real Estate Marriott Hotel Hotel Crest Net Lease, Inc. Apartments & Real Estate 1 st Source Bank Financial Institution Dwellco Ltd. Partnership Home Construction Aimco Turtle
Creek Apartments & Real Estate Honeywell Airplane & Auto Parts New Energy Company Ethanol Plant F 0, P American Electric Power Electric Utility A.E. Goetze Manufacturing South Bend Tribune
Newspaper Publishing Northern Indiana Public Service Corporation Gas Utility I Total Net Assessed Value -Ten Largest Taxpayers Total Net Assessed Value Note -Separate schedules are prepared
for the ten largest taxpayers for 2007 based on real and personal property assessed assessed values because information is maintained by the St. Joseph County Auditor's Office. In 1998,
a consolidated schedule for real and personal property The net asset value for 1998 was restated to reflect the state legislation for tax year 2001 pay 2002 that changed the tax rates
from valuation. This conversion had no impact on total tax dollars. Assessed values increased and tax rates decreased. Source: St. Joseph County Auditor's Office and 1998 City of South
Bend Comprehensive Annual Financial Report
City of South Bend, Indiana Ten Largest Taxpayers -Personal Property December 31,2007 Net Assessed Personal Percent Taxpayer Type of Business Value of Total Honeywell Airplane & Auto
Parts $48,232,040 American Electric Power Indiana Bell Telephone/SBC Communications Federal Mogul Powertrain Systems Northern Indiana Public Service Company Comcast United Parcel service
Robert Bosch Corporation New Energy Corporation South Bend Tribune Company Electric Utility Telephone Company Automotive Supplier Natural Gas Utility Cable Televison Parcel Delivery
Automotive Supplier Ethanol Production Newspaper Publishing Total Net Assessed Value -Ten Largest Taxpayers $199,310,920 39.68% Total Net Assessed Value (Personal and Utilities) $502,258,782
100.00% Information on the ten largest personal property taxpayers is not available for 1998. Source: St. Joseph County Auditor's office
CITY OF SOUTH BEND, INDIANA . LOCAL OPTION INCOME TAX REVENUE . LAST TEN YEARS Total Est South Bend South Bend Distribution EDlT County EDIT Rate of EDIT Rate of as a Percent Year Tar
Rate (I) Collections Growth Distribution* Growth of Total (1) This tax was first enacted as of July 1, 1995 at the rate of 0 1% of City residents' adjusted gross income. The rate was
increased to 0.2% effective July 1, 1997. (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. Source -State of Department of Local Government Finance CEDIT Distribution Reports COUNTY OPTION INCOME TAX (COITI REVENUE Total South
Bend South Bend Distribution COIT County COW Rate of COIT Rate of as a Percent Year Tax Rate (3) Distributions Growth Distribution Growth of Total (3) This tax was first enacted as of
July 1, 1997 at the rate of 0.2% of City residents' adjusted gross Income. The COIT rate increased 0.1% each year until it reached 0.6% as of July 1,2001. The above collections/distribution
amounts are net of the additional 6% (1998), 7% (1999) and 8% (2000 and 2001) homestead credits that accompanied the passage of this income tax. Source -State of Indiana Department of
Local Government Finance COIT Distribution Reports
CITY OF SOUTH BEND, INDIANA TOTAL COUNTY OPTION INCOME TAX DISTRIBTUIONS BY TAXING UNIT 2001-2007 Unit of Government 2007 -2006 -2005 -2004 2003 Total County Certified Distribution $30,859,812.00
$31,044,322.00 $26,484,316.00 $26,536,784.00 $28,136,084.00 Less: Homestead Credit (1) Total Distributive Shares Distributive SharesRotal County Distribution 55.07% 6854% 62.78% 82.82%
68.90% Amount St. Joseph County Townships City of South Bend -Civil City Other Cities & Towns Libraries ,Spe cial Districts OI -4 Total Percentaee of Distribution St. Joseph County Townships
City of South Bend -Civil City Other Cities & Towns Libraries Special Districts 3.67% 4.44% 4.74% 5.41% 4.76% Total 100.00% 100.00% 100.00% 100.00% 100.00% (1) A portion of the county
option income tau 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 TEN LARGEST WATER CUSTOMERS DECEMBER 31,2007 Name 2007 Revenue Percentage of Total Water Operating Revenue South Bend Community Schools Allied Signal Aerospace
Company Memorial Health Systems + m co St. Joseph Medical System Ararnark Uniform Services Inc. Steel Warehouse Federal Mogul South Bend Inc Countryside Association Valley American Limited
Partnership Bosch Braking System Total of Ten Largest Water Customers Total for Operating Revenue for Water Works *Hundreds of Cubic Feet Usage CCF*
CITY OF SOUTH BEND, INDIANA TEN LARGEST SEWAGE WORKS CUSTOMERS DECEMBER 31,2007 Percentage of Total Water 2007 Operating Name Revenue Revenue I/N TEK Plant University of Notre Dame New
Energy Company of Indiana Allied Signal Aerospace Memorial Health System South Bend Community Schools St. Joseph Medical System Ararnark Uniform Services Inc Nimet Industries Inc Town
of New Carlisle Total of Ten Largest Sewer Customers $ 3,553,597 25.85% Total Operating Revenue for Wastewater Wundreds of Cubic Feet Usage CCF* 739,35 567,910 298,787 186,705 13 43,441
42,141
City of South Bend, lndiana Gasoline Tax Collections -Cash Basis Last Ten Fiscal Years LR&S MVH Total Gas Year Fund Fund Tax Change Distributions of gas tax revenue are made monthly
by the Indiana Department of Revenue to the Local Road and Street (LR&S) and Motor Vehicle Highway (MVH) funds for use construction and maintenance of streets and highways. Distributions
are based on complex formula developed by the state which takes into account population, road street mileage and other factors. Source: City Accounting Records
DEBT CAPACITY These schedules present information to help the reader to assess the affordability of the City of South Bend's current level of outstanding debt and the ability of the
City of South Bend to issue additional debt in the future.
City of South Bend, Indiana Legal Debt Margin Information Last Ten Fiscal Years -1998 -1999 -2000 -2001 -2002 -2003 -2004 -2005 Civil City Debt Limit (1) $37,149,105 $37,548,459 $38,797,956
$38,956,549 $39,176,697 $59,362,052 $56,157,007 $56,378,096 Total Net Debt Applicable To Limit 11,530,000 11,150,000 10,750,000 10,330,000 9,882,500 9,412,500 8,937,500 8,395,000 Legal
Debt Margin 25,629,105 26,398,459 28,047,956 28,626,549 29,294,197 49,949,552 47,219,507 47,983,096 Percentage of Debt Limit 31.04% 29.69% 27.71% 26.52% 25.23% 15.86% 15.92% 14.89% Redevelo~menAt
uthority Debt Limit (I) $37,149,105 $37,548,459 $38,797,956 $38,956,549 $39,176,697 $59,362,052 $56,157,007 $56,378,096 Total Net Debt Applicable To Limit 3,855,000 3,380,000 2,880,000
2,355,000 1,810,000 1,235,000 628,000 Legal Debt Margin 33,294,105 34,168,459 35,917,956 36,602,549 37,366,697 58,127,052 55,529,007 56,378,096 Percentage of Debt Limit 10.38% 9.00%
7.42% 6.05% 4.62% 2.08% t12% 0.00% (1) A 2% of net assessed value debt limit has been established by the Constitution of the State of Indiana.for certain type of debt including general
obligation bonds, Economic Development Income Tax bonds and tax revenue notes. This limitation does not apply to revenue bonds payable from governmental or proprietary
City of South Bend, Indiana Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activltles Buslness-Type Actlvlties General Total Fiscal Obllgation Revenue Mortgage
NoteslLoans Capltal Revenue Mortgage Noteslloans Capltd Prlmaly Estimated Year Bonds Bonds Bonds Payable Leases Bonds Bonds Payable Leases Government Population Percent of Total Debt
0.00% 36.77% 12.15% 3.70% 3.60% 34.23% 0.43% 8.60% 0.53% 100.00% ~ources:C ity of South Bend Comprehensive Annual Financial Reports Population statistics obtained from the U.S. Census
Bureau. Most recent estimate was for 2003. City of South Bend estimated personal income Is computed as estimated City population x South Bend Metro Area Per Capita Income (see Demographic
Statisti=)
Direct Debt: City of South Bend General Obligation Bonds Revenue Bonds -Governmental Activities Revenue Bonds -Business-Type Activities Mortgage Bonds -Governmental Activities Mortgage
Bonds -Business-Type Activities Notes Payable -Governmental Activities Notes Payable -Business-Type Activities Capital Leases -Governmental Activities Capital Leases -Business-Type Activities
CITY OF SOUTH BEND, INDIANA COMPUTATION OF DIRECT AND OVERLAPPING DEBT DECEMBER 31,2007 Percentage Amount Ratio Gross Applicable to Applicable to Debt Per Net Debt South Bend South Bend
Capita r Total Direct Debt of Primary Government 213,703,674 $ 2,024.86 4 a O v e r l a ~ ~Di neb~t (3M41 St. Joseph County $ 1 13,246,547 30.21% 34,2 1 1,782 St. Joseph County Public
Library 15,330,000 50.58% 7,753,914 South Bend Community School Corporation 203,997,806 54.39% I 10,954,407 Penn-Harris-Madison School Corporation 93,872,555 2.62% 2,459,46 1 Mishawaka
Penn Township Public Library 8,365,000 3.37% 281,901 Total Overlapping Debt Total Direct
and Overlapping Debt Ratio Factors Total Net Assessed Valuation (2006 payable 2007) $ 3,022,357,147 Population -2003 US Census Bureau 105,540 (1) South Bend Metropolitan Area Per Capita
Income, 33,739 (2) Estimated South Bend Total Personal Income (1 x 2) $ 3,560,814,060 (1) Population statistics obtained from the U.S. Census Bureau (http:/quickfacts.census.gov). Most
recent estimate was for 2003. (2) South Bend-Mishawaka, IN-Metropolitan area Profile (www.stats.indiana.edu). (3) Overlapping debt information obtained from Umbaugh Associates, Indianapolis,
Indiana. (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 ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL OBLIGATION BONDED DEBT TO TOTAL GENERAL GOVERNMENTAL EXPENDITURES LAST TEN YEARS ~ Total Fiscal Total
Debt General Government To Year Principal Interest Service Expenditures The City of South Bend has no General Obligation Bonds outstanding. The 1977 Studebaker Corridor bonds were paid
off during Source -City of South Bend Comprehensive AnnuaI Financial Reports
CITY OF SOUTH BEND, INDIANA RATIO OF NET GEmRAL BONDED DEBT TO ASSESSED VALZTE AND NET BONDED DEBT PER LAST TEN YEARS Percent Debt Service Bonded Tax Year/Assessed Gross Monies Net To
CoIlectionYear Population (I) Value Bonded Debt Available Bonded Debt (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 SCHEDULE OF REVENUE BOND COVER4GE WATER UTILITY BONDS LAST TEN YEARS ! Gross Net Revenue Debt Service Requirements Operating Operating Available for I Year
Revenue Expenses (1) Debt Service Principal Interest (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. Source -City of South Bend Comprehensive Annual Financial Report and Annual Report (CTAR-2)
CITY OF SOUTH BEND, INDIANA SCHEDULE OF REVENUE BOND COVERAGE WASTEWATER UTILITY BONDS LAST TEN YEARS Gross Net Revenue Debt Service Reauirements Operating Operating Available for Year
Revenue Expenses (1) Debt Service Principal Interest Total (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. Source -City of South Bend Comprehensive Annual
Financial Report and Annual Report (CTAR-2)
DEMOGRAPHIC AND ECONOMIC INFORMATION These schedules present various demographic and economic indicators to help the reader understand the environment within the City of South Bend that
affects the City's financial activities.
CITY OF SOUf H BEND, INDlANA DEMOGRAPHIC STATISTICS LAST TEN YEARS Year Ciiy of South Bend Population (1) sourn s end Metropolitan Percent Area Increase/MediaaFdy (Decrease) Income (2)
35.249 -2.6% 34,203 8.4% 34,702 0.0% 40.8 16 -1.1% 40,s 16 -1.0% 37,140 0.0% 39,940 0.0% 37.971 0 0% 39.046 0.0% Unavailable South Bend Metro AM Percmt TOM Pernod herd Income (2) @ecrew)
(Millions) 6.4% 6,525 -3.0% 6,744 1 .S% 7,049 17.6% 7,426 0 0% 7.67 1 -9.0% 7,887 7.5% 8,295 -4.9% 8,565 2.8% 8,958 NIA 8,978 Sources: (I) U.S. Census Bureau (http:/quickfacis.censudgov).
Most recent estimate was for 2003 (2) South Bend, Indiana W~k~pedEian cyclopedia, hnpllen wikepedia.org (3) South Bend Community School Corporation Administration otlice (4) South Bend-Mishawakq
IN-MI Metropolim Area Profile (hnp 1lw.stats.indiana edu) F (5) U.S. Census Bureau (http://factfinder census gov). Information available for 2006. OJ N South Bend Mttm Arm Per Capita
hcomc (4) 24,730 25,455 26,516 27,959 28.909 29,788 31,340 32,328 33,034 33,739 ciiy ciiy of Percent Ciiy of South Bend I n c d South B a d Public School (Lkcruse) Median Age (5) EnroUmmt
(3) south Bend Ptrcmt Metropolilmn I n c d AM b b o r (Decrrue) Forct(4)
$ $ ' n w ? 09
City of South Bend, Indiana Principal Employers -Current and Nine Years Ago December 31,2007 2007 Number of Employer Type of Business Employees Rank FTE' s University of Notre Dame CollegeXJniversity
South Bend Community School Corporation Public Schools Memorial Health System Health Care AM General Manufacturing/Assembly St. Joseph Regional Medical Center, Inc. Health Care I--'
St. Joseph County Government 03 P The Diocese of Fort WayneISouth Bend Parochial Schools Indiana University at South Bend College/Universi ty City of South Bend Government Wal-Mart Retail
Dept. Store Source -Chamber of Commerce of St. Joseph County, City of South Bend Department of Administration and Finance, and telephone calls to individuals employers. (Information
not available for The Diocese of Fort WayneISouth Bend for 1998.)
OPERATING AND OTHER INFORMATION a These schedules contain information about the City of South Bend's a operations and resources to help the reader understand how the City's a financial
information relates to the services the City provides and the a activities it performs. Included in this section is other non-required a information that the City has determined is relevant
and useful to the reader a of the financial statements. a a a a a a a a a a a a a a a a a a a a a a a a 185 a a a
Functionl~ronram Police Physical arrests Parking violations Traffic violations Fire Emergency responses Fires extinguished l nspections 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 NIA -information
not available City of South Bend, Indiana Operating Indicators by FunctionIProgram Last Ten Fiscal Years NIA 23.80 26.30 22.10 28.00 27.50 30.20 29.30 N/A 650.89 577.20 653.83 389.10
341.87 560.41 372.06 N/A NIA NIA NIA NIA 700 700 750 0 0 0 871 16,773 33,361 35,426 37,247
City of South Bend, Indiana Capital Asset and Infrastructure Statistics by Function/Prograrn Last Ten Fiscal Years -1998 -1999 -2000 -2001 -2002 -2003 2-004 -2005 -2006 Functionlproqram
Police Stations 1 1 1 1 1 1 1 I Zone ofices 2 2 2 2 2 2 2 2 Patrol units 22 22 24 24 24 24 25 25 Fire Stations 11 11 1 I 11 11 11 11 11 Rescue units 3 1 31 3 1 31 3 1 3 1 31 3 1 Refuse
collection Collection trucks 25 25 25 25 24 24 2 1 23 Other public works Streets (miles) NIA 492 494 494 496 496 498 498 Streetlights 105 108 108 108 109 109 109 109 Traffice signals
156 158 160 161 161 162 163 164 Parks and recreation Acreage 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 Baseball/softball diamonds 26 26
26 26 26 26 26 26 Soccer/football fields 17 17 17 17 17 17 17 17 Swimming pools 2 2 2 2 2 2 2 2 Community center 4 4 5 5 5 5 5 5 Water Water mains (miles) 494 498 510 520 527 529 538
547 Fire hydrants 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 17,300 17,300 17,300 17,300 Wastewater
Sanitary sewers ( miles) 540 540 540 540 540 540 540 540 Storm sewers (miles) 200 200 200 200 200 200 200 200 Treatmentcapacity(thousandsofgallons) 48,000 48,000 48,000 48,000 48,000
48,000 48,000 48,000 48,000 I * No longer includes Clay hydrants Sources: Various city departments NIA -information not available
CITY OF SOUTH BEND, INDIANA NEW CONSTRUCTION -NUMBER OF PERMITS AND PROPERTY VALUES Last Ten Fiscal Years (Dollar Amounts in 000's) Year 1998 1999 2000 2001 2002 2003 2004 2005 2006
2007 Residential Public Residential Residential Value Commercial Commercial Public Utility Manufacturing Manufact Number of Value Increase/Number of Value Utility Number Value Number
of Value Permits (i 000's) (Decrease) Permits (in 000's) of Permits (in 000's) Permits (in 000'Soupe -Consolidated CitylCounty Building Department and Cily Engineering Department. a,
03
yO?OZQRO? O% OR O N r N m m o o 0 0 9 9 0 d ' m t . 1 0 7 ru U-J m N
City of South Bend, Indiana Full-Time Equivalent City Governrnnent Employees by Department Last Ten Fiscal Years Department 1998 -1999 2001 -2002 2003 2004 2005 Summarv bv Activity General
Government Public Safety Culture and Recreation ( Economic Development Highways and Streets Enterprise Funds Internal Service Fund-I Total Positions 1,358.58 1,340.45 1,341.08 1,333.83
1,338.33 1,309.00 1,298.00 1,294.00 I Total Reduction in Positions (1998-2008) 145.58 (10.7% of workforce) CL a Excludes seasonal, pan-time and temporary positions 1 (I)In cludes reduction
of 34 positions in the City's convention facility (Century Center) during 2007. Century Center is being managed by a private I with the City of South Bend. I Source: City of South Bends
Performance Based Budgets
O O O O O O O O O O O O O O O O O O O O O O Q O O O O O O O O O O O O O O O ~ ~ ~ o o o o o o o ~ u 5 n i ~ m o o ~ ~ b ~ 0 0 0 m m m 0 0 0 b m 0 b 0 0 N m 0 m N 0 m a m m o 0 m N c
D m ~ 0 0 0 * O-O-; ;, --w e m-*-a-L -rn 4 w-+ a-O-;N m-N N N r J N N N N N N N m m m O w * * v
CITY OF SOUTH BEND, INDIANA HEALTH INSURANCE PLAN PARTICIPATION DECEMBER 3 1,2007 Active Inactive Source: GASB 45 Financial Report for post-employment benefit plans other than pension
plans prepared Benefit Group, Indianapolis, Indiana.
n E! Fz: 0 4% u 5 8 q r -Eg b g 5 mm 8 2 2 g 5 4 0m da $W %En E 8 3 z =rl I+ a U 8 X 0 -3 +y cd .3 art eh 3 z s & g d 3 d ..-I cd "3 .3 $ 3 .c* Ej e 2 2 a G 2; 0 m
City of South Bend, Indiana Financial Institution Data Last Ten Years (Amounts in 000's) Year Banks Number of Deposits Branches at June 30 Savings and Loans Credit Unions Total Deposits
in Number of Deposits Number of Deposits Financial Institutions Branches at June 30 Branches at June 30 Amount City of South Bend Financial Institutions 2007 Total Deposits (Amounts
in 000's) I Banks Savings and Loans 1st Source Bank $1,202,459 55.08% MFB Financial $86,561 100% Key Bank National Association 467,268 21.40% Wells Fargo Bank NA 142,223 6.5 1% National
City Bank of Indiana 135,421 6.20% LaSalle Bank Midwest NA 106,078 4.86% Others (4) 129,656 -5.94% Total $2,183,105 -100.00% Total -100% Credit I The City of South Bend has its primary
operating accounts at 1st Source Bank. Sources: Federal Deposit Insurance Corporation Website (www.fdic.gov). Deposits Market Share Report, South Bend, Deposits Inside of Market National
Credit Union Association Website (www.ncua.gov) First Source Bank Teacher's Credit Union Notre dame Federal Credit Union Community Wide Credit Union AAA Federal Credit Union Policemen's
Federal Credit Union Others (5) Total
CITY OF SOUTH BEND, INDIANA INSURANCE COVERAGE 2007 Limits of Type of Coverage Liability LIABILITY Comprehensive General Liability N/A Police Professional Liability N/A Ambulance Malpractice
Liability N/A Premises Liability N/A (Clay Utilities, Century Center, Parking Garages) CGL -Stadium N/A Liquor Liability 4/26/07 -08 $1,000,000 CRIME Public Employee Dishonesty 12/3
1/06 -07 $1,000,000 Public Official -Position Schedule Bond N/A PROPERTY 1/15/07 -08 All risk blanket building & contents $300,000,000 Business Income $1 0,000,000 Boiler and Machinery
100,000,000 Electronic Equipment $10,000,000 Fine Arts Museums $5,000,000 Valuable Papers $10,000,000 Inland Marine Property Coverage: 1/15/07 -08 Electronic Equipment $10,000,000 Contractors
Equipment $5,000,000 OTHER Workers Compensation Third Party Fee Excess Over Self-insured $250,000 Retention Each Accident Statutory Statutory Statutory Estimated Annual Premium Self-Insured
Self-Insured Self-Insured Self-Insured Self-Insured $3,500 Premium $9,589 Premium N/A $308,491 Premium Included in above Included in above Included in above Included in above Included
in above $16,677 Premium Self-Insured $75,000 Fee $13 1,569 PremiumIFee
City of South Bend, Indiana Miscellaneous Statistics December 31,2007 Police Deaartment Authorized Officers Vehicles Soecial Officer Grou~s: K-9 Patrols SWAT Team Metro Drug Task Force
(of 20 total) NEST -Special Neighborhood Unit Bicycle Patrol Officers Motorcycle Patrol Off~cers Community Relations Officers Bomb Squad Crime Prevention Officers 2007 Crime Data: Murders
Rapes Robbery o\ Aggravated Assault Residential Burglary Non-residential Burglary Larceny Auto Thef't Arson Calls for Service Dispatches Miles Driven Arrests Sewer Utilitv Customers
37,018 Dry Tons of Sludge produced per year 20,5 1 1 Miles of Sanitary Sewer Lines 540 Miles of Storm Sewer Lines 200 South Bend Reeional Airaort Passenger Volume Deaartment of Public
Works Traffic Signals 160 Street Lights (City maintained) 2,250 Miles of Streets 500 Miles of Sidewalks 685 Miles of Alleys 398 Miles ofsanitary Sewers and Storm Drains 540 City Owned
Vehicles 867 Trash Picked Up Per Week (in tons) 556 /wk (Organic Resource & Landfill) (17,725 Cu.Yd) Sien Shoa Work orders for sign maintenance, installation or removal 3,100 Gallons
of traffic paint for street markings 4,430 Pre-formed plastic arrows used for street markings 55 Built Portables 0 Railroad Crossings 3 Built Barricades 0 Special Signs Built 530 Barricades
set up for 2006 events (# of events): Block Parties 6 1 Parades 4 Run~Walkathon&s Special Events 35 Notre Dame Football Games 7 Fireworks -Coveleski Stadium 10 Convention Facilities
Century Center 64,000 square feet of exhibit space 2,992 available seating 700 seat theater Fire Paid Department Sworn Firefighters (5 1 of which are Paramedics) Fire Apparatus Hazardous
Materials Truck Reserve Pumper Trucks Reserve Ladder Trucks River Rescue Boats Ambulances Neonatal (Newborn) Units Fire Runs Ambulance Runs Water Customers/Meters Wells/Pumps in service
Pumping Capacity Daily Consumption Peak Demand Miles of Distribution Systems Fire Hydrants Colleees Universities and Colleges The University of Notre Dame Indiana University at South
Bethel College St. Mary's College Holy Cross College Davenport University -South Tri-State University -South Technical Colleges IVY Tech Community College Brown Mackie College -South
Morris Performing Arts Center 2,500 available seating
The South Bend Regional Airport had 48,323 take-offs and landings during 2007. Approximately 30 commercial airline flights per day fly to 10 hub airports. Commercial airlines with operations
at South Bend Regional Airport (market share): 2006 2,007 Allegiant Air 10.51% 12.62% Cape Air 0.00% 0.13% Continential Connection 4.90% 5.58% Delta Connection 33.60% 33.37% NorthwestfKLM
Airlines 25.89% 21.70% United Express Total Bus Passengers 66,430 63,038 Train Passengers (South Shore) 28 1,225 292,391 Transoo South Bend Publlc Transportation Corporation Route Miles
2003 Ridership 2003 Miles of Service 232 3.1 million I 8 milllon Notre Dame Joyce Athletic and Convocation Center 1 15,000 square feet of exhibit space 1 1,345 available seating 3 1
motels/hotels 6 Bed and Breakfasts Over 2,700 available rooms Motels City of South Bend, Indiana . Miscellaneous Statistics December 31,2007 Major motels and meeting rooms: Marriott
facilities to seat 800 Holiday Inn facilities to seat 450 Other Transportation 43 Trucking Lines, 33 Terminals 2 Interstate Bus Lines 4 Major Rail Systems (freight and passenger) -Incorporated
in 1865 -County Seat of St. Joseph County -South Bend officially began under the name South Hold but the name was changed by the Post Office in 1830 to avoid confusion with other communities
that used that name. The name South Bend was used because the City is located at the southernmost point of the St. Joseph River. -Average High Temperature: January 30 degrees Farenheit
July 83 degrees Farenheit Health The City of South Bend has at costs below the national midwest region. The City Memorial Health Systems St. Joseph Regional Medical Communications Access
to: 4 Major Television Networks 1 Public Broadcasting Television 1 Local Television Station 1 Major Newspaper (The 24 Radio Stations Famous South Bend has been the individuals including
the Ryan Newman, racecar driver John Fogerty, singer Michael Warren, actor Chad Everett, actor Sidney Pollack, actorldirector Knute Rockne, football coach John Wooden, basketball Joe
Kernan, former South
SUPPLEMENTAL AUDIT OF FEDERAL AWARDS
STATE OF INDIANA AN EQUAL OPPORTUNITY EMPLOYER STATE BOARD OF ACCOUNTS 302 WEST WASHNGTON STREET ROOM E418 INDIANAPOLIS, N I A N A 46204-2769 Telephone: (3 17) 232-25 13 Fax: (3 17)
232-471 1 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 CIJY 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, 2007, which collectively
comprise the City's basic financial statements and have issued our report thereon dated June j2, 2008. 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 contained in Government Auditina Standards, issued by the Comptroller General of the United
States. Internal Control Over Financial Rewortinq In planning and performing our audit, we considered the City's internal control over financial reporting as a basis for designing our
auditing procedures for the purpose of expressing our 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 an opinion on the effectiveness of the City's internal control over financial reporting. A control deficiency exists
when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a
timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process,
or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity's financial
statements that is more than inconsequential will not be prevented or detected by the entity's internal control. A material weakness is a significant deficiency, or combination of significant
deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the entity's internal control.
Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies
in 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.
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 Com~liancea nd Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of
its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of
financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditina Standards. This report is intended solely
for the information and use of the City's management and federal awarding agencies and pass-through entities entities and is not intended to be and should not be used by anyone other
than these specified parties. In accordance with Indiana Code 5-1 1-5-1, this report is a part of the public records of the State Board of Accounts and of fhe office examined. June 12,2008
STATE BOARD OF ACCOUNTS
a STATE OF INDIANA AN EQUAL OPPORTUNITY EMPLOYER STATE BOARD OF ACCOUNTS 302 WEST WASHINGTON STREET ROOM E418 PJDIANAPOLIS, INDIANA 46204-2769 Telephone: (3 17) 232-2513 Fax: (3 17)
232-47 11 Web Site: www.in.gov1sboa INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WlTH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WlTH
OMB CIRCULAR A-1 33 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 requirements described in the U.S. Office of Manaaement and Bud~e(tO MB) Circular A-I33 Compliance Supplement that are applicable to each of its major federal programs
for the year ended December 31, 2007. 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 each of its major federal programs are 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 Auditina Standards, issued by the Comptroller General of the United States; and OM3
Circular A-133, Audits of States. Local Governments, and Non-Profit Orqanizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable
assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An
audit includes examining, on a test basis, evidence about 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 each of its major federal programs for the year ended December 31, 2007. 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 requirements that could have
a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, but not for the purpose
of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over
compliance.
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WlTH OM5 C1RCUtAR 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 performing
their assigned functions, to prevent or detect noncompliance with a type of compliance requirement of a federal program on a timely basis. A significant deficiency is a control deficiency,
or combination of control deficiencies, that adversely affects the entity's ability to administer a federal program such that there is more than a remote likelihood that noncompliance
with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented or detected by the entity's internal control. A material weakness is
a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement
of a federal program will not be prevented or detected by the entity's internal control. Our consideration of the internal control over compliance was for the limited purpose described
in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not
identify any deficiencies in internal control over compliance that we consider to be significant deficiencies or material weaknesses, as defined above. 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 5-1 1-5-1, this report is a part of the public records of the State Board of Accounts and of the office examined. June 12,2008 STATE
BOARD OF ACCOU
NTS CITY OF SOUT H BEND SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For The Year Ended December 31,2007 Pass-Through Federal Entity (or Other) Total Federal Grantor AgencylPass-Through
Entity CFDA Identifying Federal Awards Cluster TitlelProgram TittelProject Title Number Number Expended U.S. DEPARTMENT OF COMMERCE Direct Grant Public Works and Economic Development
Cluster Economic Adjustment Assistance 06-19-01251 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Direct Grant CDBG -Entitlement and (HUD-Administered) Small Cities Cluster Community
Development Block GrantslEntitlement Grants B-06-MC-18-0011 2,673,474 B-07-MC-18-0011 497,447 Section 108 #7 12,055 Section 108 #8 468,536 Total for cluster Emergency Shelter Grants
Program Total for program Shelter Plus Care IN36-C960101-96 13,518 IN36-C400-001 MAD 61,661 IN36-C500-008 MAD 42.207 IN36-C020-044 MAD 19.851 IN36-C5300-009 AIDS 16,007 IN36-C020-043
AIDS 6,350 Total for program Community Development Block GrantslBrownfields Economic Development Initiative Fair Housing Assistance Program -State and Local Total for federal grantor
agency U.S. DEPARTMENT OF JUSTICE Direct Grant Community Capacity Development Ofrice Total for program Public Safety Partnership and Community Policing Grants Gang Resistance Education
and Training Total for program Edward Byrne Memorial Justice Assistance Grant Program Total for program The accompanying notes are an integral part of the Schedule of Expenditures of
Federal Awards.
CITY OF SOUTH BEND SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For The Year Ended December 31,2007 (Continued) Pass-Through Federal Entity (or Other) Federal Grantor AgencyIPass-Through
Entity CFDA Identifying Cluster TitleIProgram TitleIProiect Title Number Number Total Federal Awards Expended U.S. DEPARTMENT OF JUSTICE (continued) Direct Grant (continued) Pass-Through
lndiana Criminal Justice Institute Crime Victim Assistance Motor Vehicle Theft Protection Act Program Total for program Community Prosecution and Project Safe Neighborhoods Total for
program Anti-Gang Initiative Total for federal grantor agency U.S. DEPARTMENT OF TRANSPORTATION Pass-Through lndiana Governor's Council on Impaired and Dangerous Driving Highway Safety
Cluster Alcohol Trafbc Safety and Drunk Driving Prevention Incentive Grants 20.601 pf-07-04-01-26 U.S. EQUAL EMPLOYMENT OPPORTUNlTY COMMISSION Direct Grant Employment Discrimination
-State
and Local Fair Employment Practices, Agency Contracts 30.002 U.S.'ENVlRONMENTAL PROTECTION AGENCY Direct Grant Brownfield Pilots Cooperative Agreements Brownfields Assessment and Cleanup
Cooperative Agreements 66.818 bf-965-645-01-0 bf-965-546-01-0 bf-965-597-01-0 Total for program Pass-Through lndiana Finance Authority Capitalization Grants for Clean Water State Revolving
Funds Total for federal grantor agency Total federal awards emended The accompanying notes are an integral part of the Schedule of Expenditures of Federal Awards.
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
Oraanizations. Accordingly, 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, 2007: Federal Amount CFDA Provided to Program Title Number Subrecipients CDBG -Entitlement and (HUD
Administered) Small Cities Cluster 14.218 $ 1,786,267 Shelter Plus Care 14.238 378,930 Crime Victim Assistance 16.575 49,735
CITY OF SOUTH BEND SCHEDULE OF FINDINGS AND QUESTIONED COSTS Section I -Sumrnarv of Auditor's Results Financial Statements: Type of auditor's report issued: Unqualified Internal control
over financial reporting: Material weaknesses 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: Material weaknesses 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 51 0(a) of Circular A-133? no Identification of Major Programs: CFDA Number Name of Federal Program or Cluster Public Works and Economic Development Cluster 66.818 Brownfields
Assessment and Cleanup Cooperative Agreements Dollar threshold used to distinguish between between Type A and Type B programs: $300,000 Auditee qualified as low-risk auditee? Yes Section
II -Financial Statement Findinns No matters are reportable. Section Ill -Federal Award Findings and Questioned Costs No matters are reportable.
CITY OF SOUTH BEND SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS No matters are reportabte.