RES 2015-0060 - Omaha Douglas Public Building Commission financial statements and independent auditor's report Omaha Douglas Public Building Commission
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITOR'S REPORT
For the year ended June 30,2014
TABLE OF CONTENTS
Page
INDEPENDENT AUDITOR'S REPORT 2 -4
MANAGEMENT'S DISCUSSION AND ANALYSIS 5 - 11
FINANCIAL STATEMENTS
Statement of net position and governmental funds balance sheet 12
Statement of activities and governmental fund revenues, expenditures,
and change in fund balances 13
Notes to financial statements 14 - 28
REQUIRED SUPPLEMENTAL INFORMATION
Required budgetary comparison schedule (budgetary basis) 30
Notes to budgetary comparison schedule 31
SUPPLEMENTAL INFORMATION
Schedule 1 - Bonds payable 33
OTHER INFORMATION
Schedule 2 - Insurance 35
INDEPENDENT AUDITOR'S REPORT ON INTERNAL
CONTROLOVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS 36—37
SCHEDULE OF FINDINGS AND RESPONSES 38
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS 39
11
AYES
&ASSOCIATES,L.L.C.
Certified Public Accountants Consultants
INDEPENDENT AUDITOR'S REPORT
The Board of Commissioners
Omaha Douglas Public Building Commission
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, each major
fund of the Omaha Douglas Public Building Commission (the Commission) as of and for the year
ended June 30, 2014, and the related notes to the financial statements which collectively comprise
the Commission's basic financial statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this
includes the design,implementation,and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are free from material misstatement,whether due to
fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements.The procedures selected depend on the auditor's judgment,including the
assessment of the risks of material misstatement of the financial statements,whether due to fraud or
error.In making those risk assessments,the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control. Accordingly,we express no such opinion.An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management,as well as evaluating the overall presentation of the financial
statements.
'" t Ste'* �' E 1 T402* t F 402.390 ; www.hayes-cpa.Com
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities and each major fund of the Omaha Douglas
Public Building Commission, as of June 30, 2014, and the respective changes in financial position
thereof for the year then ended in accordance with accounting principles generally accepted in the United
States of America.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis and budgetary comparison information on pages 5—1 1 and 30-31 be presented
to supplement the basic financial statements. Such information,although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board who considers it to be an
essential part of financial reporting for placing the basic financial statements in an appropriate
operational,economic,or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United States
of America,which consisted of inquiries of management about the methods of preparing the information
and comparing the information for consistency with management's responses to our inquiries,the basic
financial statements, and other knowledge we obtained during our audit of the basic financial
statements. We do not express an opinion or provide any assurance on the information because the
limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Commission's basic financial statements. Schedule 1 and Schedule 2 are
presented for purposes of additional analysis and are not a required part of the basic financial
statements.
Schedule I is the responsibility of management and was derived from and relate directly to the
underlying accounting and other records used to prepare the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures,including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic financial statements
or to the basic financial statements themselves,and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion,Schedule I is
fairly stated in all material respects in relation to the basic financial statements as a whole.
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Schedule 2 has not been subjected to the auditing procedures applied in the audit of the basic
financial statements and, accordingly, we do not express an opinion or provide any assurance on
them.
Other"Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards,we have also issued our report dated November
14, 2014, on our consideration of Omaha Douglas Public Building Commission's internal control
over financial reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements and other matters. The purpose of that report is to
describe the scope of our testing of internal control over financial reporting and compliance and the
results of that testing,and not to provide an opinion on internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering Omaha Douglas Public Building Commission internal control
over financial reporting and compliance.
Hayes & Associates, L.L.C.
Omaha,Nebraska
November 14, 2014
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Omaha Douglas Public Building Commission
MANAGEMENT DISCUSSION AND ANALYSIS- CONTINUED
For the year ended June 30, 2014
This narrative overview and analysis of the financial performance of the Omaha Douglas Public
Building Commission (the Commission) provides an overview of the Commission's activities for
the fiscal year ended June 30, 2014. The intent of this discussion and analysis is to look at the
Commission's financial performance as a whole. Readers are encouraged to consider the
information presented here in conjunction with the Commission's financial statements.
FINANCIAL HIGHLIGHTS
• The assets of the Omaha Douglas Public Building Commission exceeded its liabilities at
the close of the most recent fiscal year by $19,841,160 (net position). Of this amount,
$1,540,813 (unrestricted net position) may be used to meet the government's ongoing
obligations to citizens and creditors.
• The Commission's total net position decreased $797,350. This change is a result of an
increase in net position as a result of operations of the Commission in the amount of
$232,286 and the restatement of net position due to the implementation of GASB 65 (See
Note K) which resulted in a decrease of $1,029,636. The combined impact is a net
decrease in net position of$797,350.
• The Commission converted the remaining cash proceeds of the 2010 bond issue into
capital additions and has continued to depreciate those additions.
• As of June 30, 2014, the Commission's governmental funds reported combined ending
balances of$7,038,605, a decrease of$1,859,762 showing the conversion of the remaining
2010 bond proceeds into capital additions.
• At the end of the current fiscal year the General Fund balance was $1,351,210
approximately 22.8% of general fund expenditures.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the Commission's basic
financial statements. The basic financial statements consist of l) Fund Financial and
Government-wide financial statements, 2) Notes to the Financial Statements and 3) Required
Supplementary Information
The Commission's annual report includes both its government-wide and fund perspectives on
each of the financial statements. The government-wide columns on the statements provide both
long-term and short-term information about the Commission's overall status. Each provides a
different perspective of the Commission's finances. The fund financial columns on each of the
statements focus on the individual funds of the Commission, reporting operations in more detail
than in the government-wide statements.
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Omaha Douglas Public Building Commission
MANAGEMENT DISCUSSION AND ANALYSIS- CONTINUED
For the year ended June 30, 2014
Government-Wide Financial Statements
The Statement of Net Position presents information on all of the Commission's assets and
liabilities, with the difference reported as net position. The government-wide statements are
represented by the "Adjustments" and the "Statement of Net Position" columns on page 12. Over
time, increases or decreases in net position may serve as a useful indicator of whether the
financial position of the Commission is improving or deteriorating. The Statement of Activities
reports how the government's net position changed during the most recent fiscal year. All
changes in net position are included regardless of the timing of related cash flows. As such,
revenues and expenses are reported in this statement for some items which will result in cash
flows in future fiscal periods.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources segregated
for specific activities or objectives. Each of the Commission's funds are detailed on the first five
columns of the statements and totaled in the eighth column. The Commission uses fund
accounting to ensure compliance with finance-related legal requirements, such as bond debt
covenants. Within the basic financial statements, fund financial statements focus on the
Commission's significant funds rather than the Commission as a whole.
The Commission maintains multiple Government funds. Government funds are funds principally
supported by taxes and intergovernmental revenues. The Commission has no funds that are
intended to entirely recover their costs through user fees and charges, also known as Proprietary
funds. The governmental fund financial statement focuses on near-term inflows and outflows of
spendable resources as well as on balances of spendable resources available at the end of the
fiscal year. This is useful in evaluating the Commission's near-term financial requirements.
Since the government-wide focus includes the long-term view, comparisons between these two
perspectives may provide a better understanding of the long-term impact of the Commission's
near-term financial decisions.
Notes to the Financial Statements
The accompanying notes to the financial statements provide information essential to a full
understanding of the government-wide and fund financial statements.
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Omaha Douglas Public Building Commission
MANAGEMENT DISCUSSION AND ANALYSIS- CONTINUED
For the year ended June 30, 2014
Supplementary Information
In addition to the basic financial statements and accompanying notes, this report also presents
certain required supplementary information concerning the Commission's 2013-2014 budget
information.
Government-Wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government's
financial position. The Commission's assets exceeded liabilities by $19,841,160 at the close of
the fiscal year ended June 30, 2014. The Commission is reporting positive balances in all three
categories of net position. The same situation held true for the prior fiscal year.
OMAHA DOUGLAS PUBLIC BUILDING COMMISSION
Summary of Net Position
June 30, 2014
Governmental Governmental
Activities Activities
2013-2014 2012-2013
Current and other assets $ 8,225,909 $ 10,589,393
Capital assets 41,687,127 43,022,775
Total assets 49,913,036 53,612,168
Long-term liabilities 25,537,193 29,002,857
Other Liabilities 4,534,683 3,970,801
Total liabilities 30,071,876 32,973,658
Net Position:
Net investment in capital assets 12,822,646 11,754,660
Restricted 5,477,701 4,058,811
Unrestricted 1,540,813 4,828,039
Total net position $ 19,841,160 $ 20,641,510
The Commission's net position was hindered by a delay in implementing the approved tax levy
rate increase from $0.013 to $0.015 for tax year 2013-2014. The Commission's net investment in
capital assets now reflects 64.6% of Commission's net position. The Commission uses these
capital assets to provide services to citizens and other governments; consequently, these assets are
not available for future spending.
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Omaha Douglas Public Building Commission
MANAGEMENT DISCUSSION AND ANALYSIS- CONTINUED
For the year ended June 30, 2014
Government-Wide Financial Analysis - Continued
An additional portion of the Commission's net position (approximately 21.4%) represents
resources that are subject to bond covenants restricting their use toward repayment of debt, and
6.2% of the remaining restricted funds are for capital improvement obligated projects. The
remaining balance of unrestricted net position ($1,540,813) may be used to meet the ongoing
obligations to citizens and creditors; of this amount $193,122 has been assigned within the
general fund toward outstanding encumbrances. The Commission's Bond Covenants direct the
use of funds in its Construction, Capital Improvement and Bond funds so as to protect the
bondholders while allowing for efficient operation of the Commission.
Governmental Activities
The following table shows the summary of the Commission's changes in net position:
OMAHA DOUGLAS PUBLIC BUILDING COMMISSION
Summary of Net Position
June 30, 2014
Governmental % Governmental
Activities of Activities of
2013-2014 Total 2012-2013 Total
General revenues:
Rental/reimbursement income $ 5,112,158 48% $ 5,109,610 49%
Property taxes 4,726,301 45% 4,717,489 45%
Parking lot and concessions 652,316 6% 644,869 6%
Interest income/other 123,035 1% 29,721 0%
Total revenues 10,613,810 10,501,689
Expenses:
Operations and maintenance 9,384,025 90% 8,723,874 87%
Interest on long-term debt 997,499 10% 1,348,907 13%
Total expenses 10,381,524 10,072,781
Change in net position 232,286
Net position at June 30, 2013 19,608,874
Net position at June 30, 2014 $ 19,841,160
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Omaha Douglas Public Building Commission
MANAGEMENT DISCUSSION AND ANALYSIS- CONTINUED
For the year ended June 30, 2014
Governmental Activities - Continued
Total governmental activities revenue for the fiscal year was $10,613,810 compared to
$10,501,689 for the fiscal year ended June 30, 2013. The two largest revenue sources for the
Commission were property taxes and rental/chargeback income. Property taxes are levied to
cover the requirements of the bond debt service. The rental/chargeback income is charged to
cover the costs of operation of the facilities, any amount remaining is returned to the City of
Omaha and Douglas County.
The graph below shows the percentage of the total governmental revenues allocated by each
revenue type.
Revenues by Source
Parking lot,concessions
Other
7%
Rental/
Reimbursement
Income
48%
While parking lot receipts are designed to cover the operation cost of providing this service to
the citizens and to contribute toward projects within the complex, there is no intention to include
the cost of construction in the fee schedules. As such, parking revenues do not meet the criteria
required for Business-type activities.
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Omaha Douglas Public Building Commission
MANAGEMENT DISCUSSION AND ANALYSIS-CONTINUED
For the year ended June 30, 2014
FINANCIAL ANALYSIS OF THE COMMISSION'S FUNDS
Governmental Funds
The General Fund is the Commission's primary operating fund. It is used to account for all
financial resources for the operations of the facilities. The focus of the Commission's
governmental funds is to provide information on near-term inflows, outflows and balance of
spendable resources. This information is useful in evaluating the Commission's financing
requirements.
In particular, unreserved fund balance serves as a measure of net resources available for spending
at the end of the fiscal year. For fiscal year ended June 30, 2014, the governmental funds reported
combined ending balances of$7,038,605, a decrease of$1,859,762.
BUDGETARY HIGHLIGHTS
Per state Statute, the Commission annually adopts a budget on the cash basis following the
required public notice and hearing for all funds. The Building Commission adopts a budget early
to enable the major tenants of the facility to include information from its budget when preparing
their budgets. When final valuations are received, the Commission's Board amends the budgeted
property tax collections to adjust for any changes.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
The Omaha Douglas Public Building Commission's investment in capital assets as of June 30,
2014, is $41.69 million (net of accumulated depreciation). This investment in capital assets
includes land, buildings, improvements, machinery and equipment. This is a decrease of 3.1% in
capital assets compared to the fiscal year ended June 30, 2013. The current year's capital assets
are detailed in Note E of the notes to the financial statements.
Long-term Debt
As of June 30, 2014, the Commission had total long-term debt outstanding of$28,305,000. This
debt is financed by the Commission's property tax levy, projected to be 1.5 cents per $100 of
assessed valuation in 2014. State statute limits the Commission levy to 1.7 cents per hundred.
The current year's long term debt activity and construction commitments are detailed in Notes G
and H of the financial statements.
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Omaha Douglas Public Building Commission
MANAGEMENT DISCUSSION AND ANALYSIS- CONTINUED
For the year ended June 30, 2014
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS
Factors considered in preparing the Commission's budget for fiscal year 2014-2015 include:
• Property tax receipts of$5,637,800 are expected. This represents a 1.18% increase due to
predicted valuation increases and levy adjustments. Tax Levy receipts will be used only
for debt service payments and capital budget projects in 2014-2015.
• Parking revenues are expected to generate approximately $644,300, a very slight decrease
over the prior year.
• Operating costs for the Technology Center are expected to be $387,590.
• The total budget anticipates expenditures of$12,489,591 including bond debt service and
construction fund spending for capital enhancements a decrease indicative of the easing of
construction activities
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the Omaha Douglas Public
Building Commission's finances for all those with an interest in the government's finances.
Questions concerning any of the information provided in this report or requests for additional
financial information should be addressed to the Omaha Douglas Public Building Commission,
1819 Farnam Street, Suite 1205, Omaha,NE 68183.
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•
Omaha Douglas Public Building Commission
NOTES TO FINANCIAL STATEMENTS
For the year ended June 30, 2014
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of the Omaha-Douglas Public Building
Commission (the Commission) is presented to assist in understanding the Commission's
financial statements. The financial statements and notes are representations of the
Commission's management who is responsible for the integrity and objectivity of the
financial statements. These accounting policies have been consistently applied in the
preparation of the financial statements.
1. Nature of Activities and Reporting Entity
The Omaha-Douglas Public Building Commission is a body politic, incorporated,
and an instrument of the State of Nebraska created by state law on May 19, 1971. It
is governed by a five-member Board of Commissioners appointed for staggered
terms of four years each. Two members of the Commission are appointed by the
Board of County Commissioners of Douglas County and two members are appointed
by the Mayor of the City of Omaha, Nebraska from the membership of the Omaha
City Council and ratified by the Omaha City Council. The fifth member is appointed
or selected by the four previously appointed members. The Commission's purpose is
to maintain,construct,remodel or renovate buildings, structures,and facilities for the
joint use of the City of Omaha,Nebraska(the City)and Douglas County,Nebraska
(the County). In addition, the Commission facilitates financing of these assets and
their maintenance.
Management reports its activities to the Board of Commissioners. The Commission
has the authority to make decisions that significantly influence operations.
2. Basis of Presentation
The Commission prepares its financial statements in conformity with accounting
principles generally accepted in the United States of America. All governmental
activities are accounted for using the accrual basis of accounting. Basis of
accounting refers to the timing of the recognition of revenues and expenditures, or
expenses, in the accounts and the financial statements. Revenues are recognized
when earned and costs and expenses are recognized when incurred.
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Omaha Douglas Public Building Commission
NOTES TO FINANCIAL STATEMENTS—CONTINUED
For the year ended June 30, 20l 4
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
2. Basis of Presentation - Continued
The statement of net position and statement of activities report information about the
primary government. These statements include the financial activities of the overall
government.
The fund financial statements provide reports on the financial condition and results
of operations for the Commission's funds. The emphasis of fund financial statements
is on major governmental funds, each reported as a separate column.
As a special purpose government, the Commission has opted to display the
government-wide statement of net position with the government fund statements and
the government-wide statement of activities with the government fund revenue,
expenditures and changes.
3. Basis of Accounting
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Revenues are recorded
when earned and expenses are recorded when a liability is incurred,regardless of the
timing of the related cash flows. Non-exchange transactions, in which the
Commission receives value without directly giving equal value in exchange,include
property taxes. Property taxes are recognized as revenue in the year for which they
are levied.
Governmental fund financial statements use the current financial resources
measurement focus and the modified accrual basis of accounting. Under this
method, revenues are recognized when measurable and available. Property taxes,
interest, and charges for services are accrued when their receipt occurs within 60
days after the end of the accounting period so as to be both measurable and available.
Expenditures are generally recorded when a liability is incurred, except for debt
service expenditures and expenditures related to compensated absences which are
recorded only when due. General capital asset acquisitions are reported as capital
outlay expenditures in governmental funds. Proceeds of long-term debt are reported
as other financing sources and payments of long-term debt are reported as debt
service expenditures.
- 15 -
Omaha Douglas Public Building Commission
NOTES TO FINANCIAL STATEMENTS—CONTINUED
For the year ended June 30, 2014
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
4. Fund Accounting
The Commission reports the following major governmental funds:
The Operation and Maintenance Fund is used to account for all revenues and
expenditures necessary to carry out basic governmental activities of the Commission
that are not accounted for through other funds.
The Capital Improvements Fund is used to account for costs associated with the
repair and maintenance of the buildings and facilities used by the City and County.
The 2010 Project Construction Fund is used to account for costs associated with
building improvement projects funded by the most recent bond issue.
The Bond Fund accounts for the resources for,and the payments of, long-term debt
principal, interest, and related costs.
5. Cash and Cash Equivalents
The Commission classifies only checking account balances as cash and cash
equivalents. These funds are held in non-interest bearing accounts and the entire
balance is fully guaranteed by Federal Deposit Insurance Corporation (FDIC)
coverage as of June 30, 2014.
6. Investments
Investments are carried at amortized cost,which approximates fair value. This is in
accordance with Governmental Accounting Standards Board Statement No. 31,
Accounting and Financial Reporting for Certain Investments and for External
Investment Pools (GASB 31), which requires investments to be recorded at fair
value.
7. Custodial Credit Risk—Deposits
Custodial credit risk is the risk that in the event of a bank failure,the Commission's
deposits may not be returned to it. The Commission does not have a deposit policy
for custodial credit risk.
- 16 -
Omaha Douglas Public Building Commission
NOTES TO FINANCIAL STATEMENTS—CONTINUED
For the year ended June 30, 2014
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED
7. Custodial Credit Risk—Deposits—Continued
The Commission's maintains adequate coverage of deposit balances by either Federal
Deposit Insurance Corporation or by collateral held by the Commission's agent in the
Commission's name.
8. Restricted Assets
Certain debt proceeds of the Commission's project construction fund, as well as
certain resources set aside for their repayment, are classified as restricted assets on
the statement of net position because their use is limited by applicable bond
covenants and they are maintained in separate bank accounts. Resources which have
been used toward prepaid insurance are classified as non-spendable assets.
9. Capital Assets
Property and equipment are recorded at cost with a capitalization threshold of
$5,000.Depreciation is computed on the straight-line method based on the estimated
useful lives:Buildings 40 years,Building Improvements 12 years and Furniture and
Equipment I to 5 years. Maintenance,repairs and renewals,which neither materially
add to the value of the asset nor appreciably prolong its life, are charged to expense
as incurred.
10. Property Taxes
Property taxes are levied by the County Board of Commissioners on or before
October 1 5th of each year for all political subdivisions in the County. Taxes are due
on December 31 St and attached as an enforceable lien on January 1 following the levy
due and become delinquent in two equal installments on April 1st and August 1st
11. Property Taxes Receivable
All property taxes receivable are considered current and therefore due within one
year. Taxes receivable are reported net of an allowance for uncollectible accounts
and revenues net of uncollectibles. Allowances are based on management's
estimates, which are based on historical collection rates.
- 17 -
Omaha Douglas Public Building Commission
NOTES TO FINANCIAL STATEMENTS—CONTINUED
For the year ended June 30, 2014
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED
12. Bond Premiums and Discounts
Bond premiums and bond discounts of the 2005, 2008, 2010, and 2010 refunding
revenue bonds are amortized using the straight-line method over the respective terms
of the bonds.
13. Compensated Absences
It is the Commission's policy to permit employees to accumulate earned vacation,but
any accumulation in excess of two hundred eighty (280) hours shall not be carried
forward from one payroll year to the next payroll year. All vacation pay is accrued
when earned in the government-wide financial statements. A liability for these
amounts is reported in governmental funds only if they have matured,(for example,
as a result of employee resignations or retirements).
14. Use of Estimates
The preparation of the financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities
and the disclosure of contingent assets and the reported amounts of revenues,
expenditures, or expenses, during the reporting period. Actual results could differ
from those estimates.
NOTE B. NET POSITION/FUND BALANCES
The government-wide financial statements utilize a net position presentation. Net
position is categorized as invested capital assets (net of related debt), restricted and
unrestricted.
Net Investment in Capital Asset — This category groups all capital assets, including
infrastructure, into one component of net position. Accumulated depreciation and
outstanding balances of debt that are attributable to the acquisition, construction, or
improvement of these assets reduce the balance in this category.
Restricted Net Position—This category represents net position of the Commission with
external restrictions imposed by creditors,grantors,contributors,or laws or regulations
of other governments and restrictions imposed by law through constitutional provisions
or
- 18 -
Omaha Douglas Public Building Commission
NOTES TO FINANCIAL STATEMENTS—CONTINUED
For the year ended June 30, 2014
NOTE B. NET POSITION/FUND BALANCES—CONTINUED
Restricted Net Position—Continued-enabling legislation. This category represents net
position of the Commission with external restrictions imposed by creditors, grantors,
contributors,or laws or regulations of other governments and restrictions imposed by law
through constitutional provisions or enabling legislation.Amounts listed as restricted net
position for capital projects are the result of restricted uses as a result of the funding for
these capital projects being funded by bond issuances. Debt service is due to bond
covenants and in some instances authorizing votes of the electorate.
Unrestricted Net Position—This category represents net position of the Commission
not restricted for any project or other purpose.
The fund balances of governmental funds are defined as follows:
Non-spendable — amounts that cannot be spent either because they are in non-
spendable form, such as inventory or prepaid items or because they are legally or
contractually required to be maintained intact.
Restricted — amounts that can be spent only for specific purposes because of
constitutional provisions or enabling legislation or because of constraints that are
externally imposed by creditors, grantors, contributors, or laws or regulations of
other governments.
Committed—amounts that can be used only for specific purposes determined by a
formal action of the Commission's Board of Commissioners. The Board of
Commissioners is the highest level of decision making authority for the Commission.
Commitments may be established, modified, or rescinded only through a formal
resolution of the Board of Commissioners.
Assigned— amounts that do not meet the criteria to be classified as restricted or
committed but are intended to be used for specific purposes. In the general fund
amounts that are encumbered by departments are classified as assigned.
Unassigned—all other spendable amounts in the general fund.
When an expenditure is incurred for which both restricted and unrestricted fund
balance is available the Commission considers restricted funds to have been spent
first. Similarly committed funds are considered to have been spent first when there is
a choice for the use of less restricted funds,then assigned and then unassigned funds.
Encumbrances — Governmental Funds: The formal spending processes allow
departments to encumber funds to make specific purchases that will actually be paid
for in the next fiscal year.
- 19 -
Omaha Douglas Public Building Commission
NOTES TO FINANCIAL STATEMENTS—CONTINUED
For the year ended June 30, 2014
NOTE B. NET POSITION/FUND BALANCES—CONTINUED
Encumbrances—Governmental Funds: Continued
The encumbrances must be in the form of a requisition before a deadline,usually two
weeks before the end of the budget fiscal year. They can be made in any fund
including the general fund. The encumbrances do not lapse at year end. They are
included in restricted, committed, or assigned fund balance as appropriate.
Encumbrances at June 30, 2014 are $193,122 and are encumbered in the General
Fund assigned fund balance.
NOTE C. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL
STATEMENTS
Amounts reported for governmental activities in the Statement of Net Position differ from
the amounts reported in the Governmental Funds, Balance Sheet as follows:
Fund balance-total governmental funds: $ 7,038,605
Adjustments:
Expenditures for insurance extending over more than one accounting
period are not allocated among account periods; therefore, prepaid
insurance is not reported in the governmental funds. 123,055
Capital assets used in governmental activities are not current financial
resources and are not reported in the governmental funds. 41,687,127
Interest costs are not due and payable in the current period and are not
reported in the governmental funds. (174,725)
Revenues unavailable for the current period are not available as resources
and are not recognized as revenue in the governmental funds. 91,138
Accrued compensated absences are not due and payable in the current
period and are not reported in the governmental funds. (73,263)
Long-term liabilities, including bonds and interest payable, are not due
and payable in the current period and are not reported in the
governmental funds. (28,864,481)
Net position of governmental activities $ 19,841,160
- 20 -
Omaha Douglas Public Building Commission
NOTES TO FINANCIAL STATEMENTS—CONTINUED
For the year ended June 30, 2014
NOTE C. RECONCILIATION OF GOVERNMENT - WIDE AND FUND FINANCIAL
STATEMENTS —CONTINUED
Amounts reported for governmental activities in the Statement of Activities differ because:
Net change in fund balance-total governmental funds: $ (1.859,762)
Adjustments:
Revenue reported in the statement of activities that does not provide
current financial resources are not reported as revenues in the
governmental funds. 13,704
Expenditures for insurance, extending over more than one accounting
period,are not allocated among account periods. Total expenditures
during the year are reported in the governmental funds. (17,524)
Certain expenses reported within the statement of activities do not
require the use of current financial resources and are not reported as
expenditures in the governmental funds. (291,864)
Governmental funds report capital outlays, the acquisition of capital
assets, as expenditures. However, in the statement of activities, the
cost of these assets is reported as capital assets, net of depreciation. (1,042,574)
The issuance of long-term debt provides current financial resources to
governmental funds, while the repayment of the principal of long-
term debt consumes the current financial resources of governmental
funds. Also, governmental funds report the effect of premiums and
discounts when debt is first issued, whereas these amounts are
deferred and amortized in the statement of activities. This amount is
the net effect of these differences in the treatment of long-term debt
and related items. 3,430,306
Net change in position of governmental activities $ 232,286
- 21 -
Omaha Douglas Public Building Commission
NOTES TO FINANCIAL STATEMENTS—CONTINUED
For the year ended June 30, 2014
NOTE D. DEPOSITS AND INVESTMENTS
1. Deposits
At June 30, 2014, the Commission maintained cash balances of$6,278,780 in a
financial institution with a bank balance of$6,285,457. Carrying amounts of the
funds are $2,256,436 for the operations and maintenance funds, $1,286,936 for
capital improvements fund, $0 for the 2010 project construction fund, and
$2,735,408 for the bond fund. The Commission's cash accounts were entirely
covered by the Federal Deposit Insurance Corporation or by collateral held by the
Commission's agent in the Commission's name.
- 22 -
Omaha Douglas Public Building Commission
NOTES TO FINANCIAL STATEMENTS—CONTINUED
For the year ended June 30, 2014
NOTE E. CAPITAL ASSETS
The Commission's capital asset activity for the year ended June 30, 2014, is as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental Activities:
Capital Assets not being depreciated:
Land $ 7,001,672 $ - $ - $ 7,001,672
Construction in progress 1,090,004 1,211,656 (1,577,940) 723,720
Total non-depreciable assets 8,091,676 1,211,656 (1,577,940) 7,725,392
Capital assets being depreciated:
Civic Center 30,400,780 296,187 - 30,696,967
Tech Center 8,200,085 - - 8,200,085
Hall of Justice 13,909,168 1,916,352 - 15,825,520
Hall ofJustice improvements 1,943,019 - - 1,943,019
Parking garage 14.335,340 - - 14,335,340
Furniture and fixtures 1,396,381 - - 1,396,381
Equipment/systems 19,827,148 - - 19,827,148
Total depreciable assets 90,011,921 2,212,539 - 92,224,460
Less accumulated depreciation for:
Civic Center 24,251,202 751,404 - 25,002,606
Tech Center 307,503 205,002 - 512,505
Hall ofJustice 11,026,826 347,729 - 11,374,555
Hall ofJustice improvements 1,943,019 - - 1,943,019
Parking garage 3,763,025 358,383 - 4,121,408
Furniture and fixtures 1,031,580 125,427 - 1,157,007
Equipment/systems 12,757,665 1,393,959 - 14,151,624
Total accumulated depreciation 55,080,820 3,181,904 - 58,262,724
Total capital assets being depreciated,
net of accumulated depreciation 34,931,101 (969,365) - 33,961,736
Net book value of government-wide
capital assets $ 43,022,777 $ 242,291 $ (1,577,940) $ 41,687,128
-23 -
Omaha Douglas Public Building Commission
NOTES TO FINANCIAL STATEMENTS—CONTINUED
For the year ended June 30, 2014
NOTE F. OPERATING LEASE/MAJOR CUSTOMERS
The Commission's cost of operations and excess debt service are funded through
rental/reimbursement payments made by the City and the County, both related
parties, based upon their proportionate occupancy of such buildings to the extent not
covered by a maximum property tax levy of 1.7 cents for each $100 of actual
valuation of taxable property in Douglas County.This reimbursement from the City
and County provides 100% of the rental income reported. For the year ended June
30,2014,the Commission has operating leases continuing until May 2023 which are
renegotiated each time the Commission enters into a new bond agreement. All
capital assets of the Commission are included under the lease agreements. Should
there be no further bonds issued and the City and County agree to terminate the
Commission then the properties ownership would transfer to the City and County.
The following schedule presents expected future payments receivable from these
operating leases:
Health
City County Department
Fiscal Year Ending June 30:
2015* 1,771,943 3,496,766 51,267
2016* 1,825,101 3,601,669 52,805
2017* 1,879,854 3,709,719 54,389
2018* 1,936,250 3,821,010 56,021
2019* 1,994,337 3,935,641 57,701 •
2020* 2,054,167 4,053,710 59,432
2021* 2,115,792 4,175,321 61,215
2022* 2,179,266 4,300,581 63,052
2023* 2,244,644 4,429,598 64,943
2024* 2,311,983 4,562,486 66,892
* Assumes a 3% increase per year
-24 -
Omaha Douglas Public Building Commission
NOTES TO FINANCIAL STATEMENTS—CONTINUED
For the year ended June 30, 2014
NOTE G. LONG-TERM LIABILITIES
Revenue bonds outstanding at June 30, 2014, are as follows:
Purpose Interest Rate Amount
Governmental Activity - 2005 Bonds 3.90 - 5.00% $ 10,395,000
Governmental Activity- 2008 Bonds 3.75 - 4.50% 5,505,000
Governmental Activity - 2010 Bonds 1.25 - 4.00% 7,185,000
Governmental Activity- 2010 Refunding 1.00 - 3.00% 5,220,000
$ 28,305,000
Principal and interest requirements to maturity on bonds outstanding prior to the effects of
the valuation adjustment and unamortized premium at June 30, 2014, are as follows:
Principal Interest
Year Ending June 30.
2015 $ 3,385,000 $ 1,034,405
2016 3,660,000 913,230
2017 3,795,000 788,243
2018 3,910,000 659,188
2019 4,085,000 510,675
2020-2023 9,470,000 786,525
$ 28,305,000 $ 4,692,266
Long-term liability activity for the year ended June 30, 2014, was as follows:
Beginning Due Within
Balance Additions Reductions Ending Balance One Year
Revenue bonds payable $ 31,585,000 $ - $ (3,280,000) $ 28.305,000 $ 3,385,000
Deferred amounts for
discounts/premiums,net 638,278 - (78,797) 559,481
Total revenue bonds payable 32,223,278 - (3,358.797) 28,864,481 3,385,000
Compensated absences 74,473 59,150 (60,360) 73,263 15,551
Total $ 32,297,751 $ 59,150 $ (3.419.157) $ 28,937,744 $ 3,400,551
The total interest paid for the year ended June 30, 2014, was $1,147,805.
- 25 -
Omaha Douglas Public Building Commission
NOTES TO FINANCIAL STATEMENTS—CONTINUED
For the year ended June 30, 2014
NOTE H. RETIREMENT PLAN
The Commission participates in the Douglas County Employees' Retirement Plan
(the Plan). The Plan is a single employer, defined benefit pension plan which
provides retirement disability, death, and termination benefits to substantially all
employees beginning on their first day of continuous employment. While the
Commission is required to make contributions to the Plan, it is not incurring any
liability associated with the Plan. The County would be responsible to make up any
shortfall, and has the option to increase future contributions from the Commission.
The general membership and administration of the Plan, and carrying out the
provisions of the Plan are the responsibility of the Retirement Committee of the
County (the Committee), which consists of at least one County Commissioner and
other employees of the County as appointed by the Board of County Commissioners.
The Committee is responsible for determining the entitlement of members to
benefits and establishing policies regarding obligations of members and the
Commission to contribute to the Plan. Cost-of-living adjustments are determined by
the Committee on an ad-hoc basis. General administrative expenses incurred by the
Committee are paid by the County, and no additional salary is paid to Committee
members. The Plan has no legally required reserves.
The Plan is not subject to either the minimum funding standards of the Employee
Retirement Income Security Act of 1974 or the maximum funding limitations.
Funding standards are actuarially determined using the projected unit credit cost
method. Actuarial reviews are only required on a biennial basis, the most recent is
dated June 30, 2014.
1. Basis of Accounting
The Plan's financial statements are prepared using the accrual basis of accounting
and are presented as a Pension Trust Fund in the financial statements of the County.
Plan member and employer contributions are recognized in the period in which the
contributions are due. Benefits are provided based on a percentage of the member's
final average compensation.
2. Method Used to Value Investments
Plan assets are invested in readily marketable securities and are carried at fair value.
-26 -
Omaha Douglas Public Building Commission
NOTES TO FINANCIAL STATEMENTS—CONTINUED
For the year ended June 30, 2014
NOTE H. RETIREMENT PLAN—CONTINUED
3. Contributions
Annual contributions to the Plan for members are comprised of employee
contributions equal to 8.5%of reported earnings as of the valuation date and an equal
amount contributed by the Commission. The Commission's matching share of
contributions totaled $73,532 for June 30, 2014.
Information concerning the Plan, including that disclosed above, is included in the
County's financial statements and can be obtained from the Douglas County Clerk's
Office, located at 1 819 Farnam Street, Omaha, Nebraska 68102.
NOTE I. POST-EMPLOYMENT BENEFITS
1. Plan Description
The Commission participates in the Douglas County post-employment benefits plan
as described below. The County provides certain other post-employment health care
benefits(OPEB Plan)to eligible retirees and their dependents up to age 65 when they
would be Medicare eligible. They include medical,dental,vision and life insurance.
The Commission contributes 100% of the retiree insurance premium and it is
considered OPEB under Governmental Accounting Standards Board Statement No.
45,Accounting and Financial Reporting by Employers for Postemployment Benefits
Other Than Pension (GASB 45). The OPEB Plan is a single-employer defined
benefit healthcare plan administered by the County. The OPEB Plan does not issue
separate financial statements.
2. Funding Policy
The contribution requirements of the plan are established by,and can be amended by,
the Douglas County Board of Commissioners. The contribution requirements of
Commission plan members are established by, and can be amended by, the
Commission. Contributions are made to the plan based on a pay-as-you-go basis.
For the year ended June 30, 2014 , the Commission contributed $37,889.
Information concerning the OPEB plan,including that disclosed above,is included in
the County's financial statements and can be obtained from the Douglas County
Clerk's Office, located at l 819 Farnam Street, Omaha, Nebraska 68102.
-27 -
Omaha Douglas Public Building Commission
NOTES TO FINANCIAL STATEMENTS—CONTINUED
For the year ended June 30, 2014
NOTE J. RISK MANAGEMENT
The Commission is exposed to the various risks of loss related to torts; theft of,
damage to, or destruction of assets; errors or omissions; injuries to employees; and
natural disasters. The Commission has purchased commercially available indemnity
insurance to cover these risks. The deductible amounts for this insurance would be
insignificant to the Commission.
NOTE K. RESTATEMENT OF EQUITY
In March 2012, GASB issued Statement 65, which addressed Items Previously
Reported as Assets and Liabilities, and clarifies the appropriate reporting of deferred
outflows of resources and deferred inflows of resources to ensure consistency in
financial reporting. GASB Statement 65 was issued effective for financial statements
for periods beginning after December 15, 2012; however, early application was
encouraged.On July 1,2013,the Commission elected to early adopt GASB Statement
65. The restatement of net position shown on the face of the Statement of activities
and governmental fund revenues, expenditures, and change in fund balances,is related
to prior years' unamortized bond issuance costs which were capitalized in accordance
with GAAP prior to the Commission adopting GASB Statement 65,but which are not
being expensed in accordance with this standard.
-28 -
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NOTES TO BUDGETARY COMPARISON SCHEDULE
For the year ended June 30, 2014
NOTE A. BASIS OF PRESENTATION
The State of Nebraska prescribes that the Commission adopt a cash basis budget
annually following the required public notice and hearing for all funds. The
Commission's practice is to adopt its budget early to accommodate major tenants in
their budgeting process. When final valuations are received,the Commission's board
amends the budgeted property tax collections to adjust for any change.
NOTE B. BASIS OF ACCOUNTING
The Commission's budgetary process accounts for certain transactions on a basis
other than accounting principles generally accepted in the United States of America
(GAAP). The major differences between the budgetary basis and GAAP basis lie in
the manner in which revenues and expenditures are recorded. Under the budgetary
basis,revenues and expenditures are recognized on a cash basis. Utilizing the cash
basis,revenues are recorded when received and expenditures are recorded when paid.
Under the GAAP basis, revenues and expenditures are recorded on the modified
accrual basis of accounting in the governmental fund statements and on the accrual
basis in the government-wide statements.
- 31 -
Omaha Douglas Public Building Commission
Schedule I -Bonds Payable
June 30,2014
Annual
Bond Number Maturity Date Amount Interest Rate
2005 Issue May 1,2015 1.540,000 5.00%
May 1,2016 1,620,000 4.00%
May 1,2017 1,695,000 3.90%
May 1,2018 1,770,000 4.00%
May 1,2019 1,845,000 4.00%
May 1,2020 1,925,000 4.00%
$ 10,395,000
2008 Issue May 1,2015 515,000 4.00%
May 1.2016 535,000 4.25%
May 1,2017 560,000 4.25%
May 1,2018 585,000 4.25%
May 1.2019 610.000 3.75%
May 1,2020 630.000 4.25%
May 1.2021 660,000 4.38%
May 1,2022 690,000 4.50%
May 1,2023 720,000 4.50%
$ 5,505,000
2010Issue May.2015 725,000 2.00%
May.2016 735,000 3.00%
May.2017 600,000 3.00%
May.2018 620,000 4.00%
May.2019 640,000 3.00%
May,2020 675,000 3.00%
May.2021 1,030,000 4.00%
May.2022 1,060,000 4.00%
May.2023 1,100,000 3.25%
$ 7,185,000
2010 Refunding Issue May,2015 605.000 1.50%
May.2016 770,000 2.00%
May.2017 940,000 2.25%
May.2018 935.000 3.00%
May.2019 990,000 3.00%
May.2020 980,000 3.00%
$ 5,220.000
See accompanying independent auditor's report.
-33-
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HAYES
&ASSOCIATES,L.L.C.
Certified Public Accountants I Consultants
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT
OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
To the Board of Commissioners
Omaha Douglas Public Building Commission
Omaha,Nebraska
We have audited,in accordance with the auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States, the financial statements the
governmental activities,major funds,and aggregate remaining fund information of Douglas Omaha
Technology Commission (the Commission) as of and for the year ended June 30, 2014, and the
related notes to the financial statements, which collectively comprise the Commission's basic
financial statements, and have issued our report thereon dated November 14, 2014.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Commission
internal control over financial reporting(internal control)to determine the audit procedures that are
appropriate in the circumstances 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
Commission's internal control. Accordingly, we do not express an opinion on the effectiveness of
the Commission's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees,in the normal course of performing their assigned functions,to prevent,
or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control, such that there is a reasonable possibility that a
material misstatement of the entity's financial statements will not be prevented, or detected and
corrected on a timely basis.A significant deficiency is a deficiency,or a combination of deficiencies,
in internal control that is less severe than a material weakness, yet important enough to merit
attention by those charged with governance.
www.hayes-cpa.corn
4 .0 4 Itt 1a S � ? t ���t _ � � 'vN' T'
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be
material weaknesses or, significant deficiencies.Given these limitations,during our audit we did not
identify any deficiencies in internal control that we consider to be material weaknesses. However,
material weaknesses may exist that have not been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Commission financial statements are
free from material misstatement, we performed tests of its compliance with certain provisions of
laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct
and material effect on the determination of financial statement amounts. However, providing an
opinion on compliance with those provisions was not an objective of our audit,and accordingly,we
do not express such an opinion. The results of our tests disclosed no instances of noncompliance or
other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity's internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity's internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Hayes & Associates, L.L.C.
Omaha,Nebraska
November 14, 2014
- 37 -
Omaha Douglas Public Building Commission
SCHEDULE OF FINDINGS AND RESPONSES
For the year ended June 30, 2014
None reported.
- 38 -
Omaha Douglas Public Building Commission
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the year ended June 30, 2014
None reported
- 39 -
No. /4
Omaha Douglas Public Building Commission
Financial Statements and Independent Auditor's
Report for the year ended June 30, 2014
RECEIVED
Presented to Council:.
January 13, 2015 - om tb receive
nnW l ce on file
�Q,.,2 7
Buster Brown
City Clerk