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RES 2010-1429 - Omaha Douglas public building commission financial statements and independent auditor's report COMMISSION Paul G.Cohen OMAHA Omaha,Nebraska Administrator .,? DOUGLAS _PUBLIC BUILDING ens • Omaha,Nebraska 68183 Ronald W.Roskens Chairman Clare Duda Ben Gray Omaha-Douglas Civic Center Kyle Hutchings Street Jean Stothert • 181(4902F)a1:4am4-5345 November 22, 2010 City Clerk L0-1 This Commission.audit report ' Building Douglas Public9 2010 . Enclosed Omaha year 2 please find a copy for the fiscal 0:f_the latest for c) ..._ report is (=) regarding the report, please call ,..,.,. ...!,.. questions 5 . rn C'S " -i 1 If there are )any 444--- •_14- (4 0 2 -1-..,,• --' C—.) me ai-- " ...< ro Sincerely, rT1 =rri —C--- -----I ro L. .7-7. "r4J..e. pa 1 G. Cohen Administrator PGC: sr Enc . • • •:: . .•..: •"""":i:::IiIiI:5':'n•a ....... .......... ..... . ................ ................... ... ... . . .. ... • ... .::. - -••• ••••••• •::-• „„„;':::'•:.„„„:1.:,.;,,,m.0'.' 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I '" r 1 1 I Omaha Douglas Public Building Commission FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR'S REPORT IFor the year ended June 30,2010 I I I I 1 I I ' TABLE OF CONTENTS Page g ' INDEPENDENT AUDITOR'S REPORT 2 - 3 MANAGEMENT'S DISCUSSION AND ANALYSIS 4 - 11 FINANCIAL STATEMENTS Statement of net assets 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 - 30 ' REQUIRED SUPPLEMENTAL INFORMATION ' Required budgetary comparison schedule(budgetary basis) 32 • Notes to budgetary comparison schedule 33 ' SUPPLEMENTAL INFORMATION ' Schedule 1 - Bonds payable 35 Schedule 2 - Insurance 36 ' 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 37-38 SCHEDULE OF FINDINGS AND RESPONSES 39 SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS 40 -41 1 1 (4 0 2 -1-..,,• --' C—.) me ai-- " ...< ro Sincerely, rT1 =rri —C--- -----I ro L. .7-7. "r4J..e. pa 1 G. Cohen Administrator PGC: sr Enc . • • •:: . .•..: •"""":i:::IiIiI:5':'n•a ....... .......... ..... . ................ ................... ... ... . . .. ... • ... .::. - -••• ••••••• •::-• „„„;':::'•:.„„„:1.:,.;,,,m.0'.' En.:EORII •••••"::!;0::-.'.:.: b ffili*:::'•:',;•:•:;;E:M].:, ....:..:il.:%,,i::::::•: :::.: :::,.....:::i,,,,,,. . .....:::::::•:•,•:: i:::::::i::*:: ii:iii ].:i.*:: i•,:!:!.::•!::::ii;::::::!i:;::::::: •::::: : :i.:•••:-:-,*::.:...... .,.:, ;:;:::;:::' : •• :,:,i, : ,!, i'.:::',i'n::TI:.:) ::::.;.,i::,7,-..;: w6, .....'...„,,, Api,.• - ;•4]!':::IiIr•a::::::,•::::::::]:::::::]:::: .:".....•.::,, ::*::,,,, -•..„:.:.: ::.- -:.:„... ::::•:: :::::::,:•-•: . ,,„ • :::,. ',....:;::.!:..I''',.,::,,:::::, .-iq:.:::::,,:i:i....:::::i:::::.:::,...........:.:.„.:."•::::::::: :,:•••••••• ............• ....:,,,................................................ - '''''''''•-•:.:Ii•i•••::,•:•::::a,*Qiimmig:ai:"::: :n:m.:•:,•:, :::::•,".. ,„::. .• :.. • ••• ••••••......„...„.„.....:„..:.:.::.:.::.:...:..:•:„..••••••• •••: ......:. •,- .• ••• •• • , ............ !.:,::--.•:'::::::.:;:::::;:•-•: Ni':I:A,]::::-. .::-.]:--:::::::.....:::::::•.":„:„:„.„„,•—•,•:•:-.-. ...., • - • ''...i::::::::]. :ii.i...'..:... ....:.:.:,-.:••••••-........ . • . ••:: -.-.:.::::................,,.. .. . . . ' S &ASSOCIATES,L.L.C. Certified Public Accountants I Consultants INDEPENDENT AUDITOR'S REPORT ' The Board of Commissioners Omaha Douglas Public Building Commission ' We have audited the accompanying financial statements of the governmental activities and each major fund of the Omaha Douglas Public Building Commission(the Commission)as of and for the year ended June 30, 2010, which collectively comprise the Commission's financial statements as listed in the table of contents. These financial statements are the responsibility of the Commission's management. Our responsibility is to express opinions 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 Governmental Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining,on a test basis,evidence 1 supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management,as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion,the financial statements referred to above present fairly,in all material respects,the ' respective financial position of the governmental activities and each major fund of the Omaha Douglas Public Building Commission as of June 30, 2010, and the respective changes in financial position thereof for the year then ended,in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards,we have also issued our report dated October 26,2010,on our consideration of the Commission's internal control over financial reporting and 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 testing of internal control over financial reporting and compliance and the results of that testing,and not to provide an opinion on the internal control over financial reporting or on compliance.That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. 111 Westroads Pointe 11015 N.98th St. I Suite 200 I Omaha,NE 68114 I T 402.390.2480 I F 402.390.0885 w w w.h a y e s-c p a.c o m ::::::.:;:::::;:•-•: Ni':I:A,]::::-. .::-.]:--:::::::.....:::::::•.":„:„:„.„„,•—•,•:•:-.-. ...., • - • ''...i::::::::]. :ii.i...'..:... ....:.:.:,-.:••••••-........ . • . ••:: -.-.:.::::................,,.. .. . . . 1 1 " Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and budgetary comparison information on pages 4 through 11 and page 36 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. Schedule 2 on page 37 is presented for the purpose of additional analysis and is not a required part of the financial statements. We have applied certain limited procedures to this 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 1 us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Commission's financial statements as a whole. Schedule 1,as listed in the table of contents,is presented for the purpose of additional analysis and is not a required part of the financial statements. Schedule 1 is the responsibility of management and were derived from and ' relate directly to the underlying accounting and other records used to prepare the financial statements. Schedule 1 has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such ' information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves,and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the ' information is fairly stated in all material respects in relation to the financial statements as a whole. 2/64441 & , I , L. C. , Hayes&Associates, L.L.C. Omaha,Nebraska ' October 26, 2010 1 - 3 - 1 i ould be considered in assessing the results of our audit. 111 Westroads Pointe 11015 N.98th St. I Suite 200 I Omaha,NE 68114 I T 402.390.2480 I F 402.390.0885 w w w.h a y e s-c p a.c o m ::::::.:;:::::;:•-•: Ni':I:A,]::::-. .::-.]:--:::::::.....:::::::•.":„:„:„.„„,•—•,•:•:-.-. ...., • - • ''...i::::::::]. :ii.i...'..:... ....:.:.:,-.:••••••-........ . • . ••:: -.-.:.::::................,,.. .. . . . ' Omaha Douglas Public Building Commission MANAGEMENT'S DISCUSSION AND ANALYSIS For the year ended June 30, 2010 (Unaudited) ' 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, 2010. 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 $20,111,166 (net assets). Of this amount, $3,882,011 (unrestricted net assets) may be used to meet the government's ongoing obligations to citizens and creditors. • The Commission's total net assets increased $652,194, partly because the proceeds of the Commission's $10 million bond issue, in June 2010, have yet to be converted into capital 1 additions. • As of June 30, 2010, the Commission's governmental funds reported combined ending balances of $20,997,544, an increase of $8,175,441, including the June, 2010 bond proceeds, in comparison to the prior year. • At the end of the current fiscal year the General Fund balance was $1,000,868 approximately 18.9% of general fund expenditures. 'I . During the previous fiscal year, it was determined that the prior year Capital Lease receivable would be more accurately reflected as an Operating lease with no effect on the Capital assets of the Building Commission. This decision continues to make sound ' business sense as is shown on the current statements. • During the fiscal year, the taxes were levied at a rate of 1.3 cents per $100 of assessed valuation and a $10 million bond issue was approved to fund needed improvements in the complex. 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 1) Fund Financial and Government-wide financial statements, 2) Notes to the Financial Statements and 3) Supplementary Information. t -4- 1 1 . C. , Hayes&Associates, L.L.C. Omaha,Nebraska ' October 26, 2010 1 - 3 - 1 i ould be considered in assessing the results of our audit. 111 Westroads Pointe 11015 N.98th St. I Suite 200 I Omaha,NE 68114 I T 402.390.2480 I F 402.390.0885 w w w.h a y e s-c p a.c o m ::::::.:;:::::;:•-•: Ni':I:A,]::::-. .::-.]:--:::::::.....:::::::•.":„:„:„.„„,•—•,•:•:-.-. ...., • - • ''...i::::::::]. :ii.i...'..:... ....:.:.:,-.:••••••-........ . • . ••:: -.-.:.::::................,,.. .. . . . Omaha Douglas Public Building Commission MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED For the year ended June 30, 2010 1 (Unaudited) 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 parts of the Commission, reporting operations in more detail than in the government-wide statements. Government-wide Financial Statements The Statement of Net Assets presents information on all of the Commission's assets and ' liabilities, with the difference reported as net assets. The Government-wide statements are represented by the "Adjustments" and the "Statement of Net Assets" columns on the page. Over time, increases or decreases in net assets 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 assets changed during the most ' recent fiscal year. All changes in net assets 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 sixth 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. Fund Financial Statements- Continued ' 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 statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. 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. 1 - 5 - I :... ....:.:.:,-.:••••••-........ . • . ••:: -.-.:.::::................,,.. .. . . . I Omaha Douglas Public Building Commission MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED For the year ended June 30, 2010 I (Unaudited) 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. Supplementary Information In addition to the basic financial statements and accompanying notes, this report also presents I certain required supplementary information concerning the Commission's 2009-2010 budget information. IGovernment-Wide Financial Analysis I As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. The Commission's assets exceeded liabilities by $20,111,166 at the close of the fiscal year ended June 30, 2010. The Commission is reporting positive balances in all three categories Iof net assets. The same situation held true for the prior fiscal year. Omaha Douglas Public Building Commission I Summary of Net Assets June 30, 2010 I Governmental Governmental Activities Activities 2010 2009 I Current and other assets $ 22,834,457 $ 15,674,550 Capital assets 40,583,724 38,890,902 ITotal assets 63,418,181 54,565,452 Long-term liabilities 38,558,274 31,334,789 I Other liabilities 4,748,741 3,771,691 Total liabilities 43,307,015 35,106,480 INet assets: Invested in capital assets, I net of related debt 12,802,359 5,960,902 Restricted net assets 3,426,796 3,228,559 Unrestricted net assets 3,882,011 10,269,511 I Total net assets $ 20,111,166 $ 19,458,972 I - 6 - covenants. Within the basic financial statements, fund financial statements focus on the Commission's significant funds rather than the Commission as a whole. Fund Financial Statements- Continued ' 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 statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. 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. 1 - 5 - I :... ....:.:.:,-.:••••••-........ . • . ••:: -.-.:.::::................,,.. .. . . . Omaha Douglas Public Building Commission MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED For the year ended June 30, 2010 (Unaudited) Government-Wide Financial Analysis - Continued The Commission's total net assets increased $652,194 in large part due to converting the bond proceeds from the 2008 bond to capital assets. While the Commission is primarily a maintenance organization, capital improvements are continually being made to improve the efficiency of the buildings. The Commission's investment in capital assets net of related debt now reflects 64% of Commission net assets. The Commission closed on a $10 million bond issue the last week of June, 2010, the proceeds of which are included in this capital assets number and will be converted to capital assets over the course of the next two to three years. The Commission uses these capital assets to provide services to citizens and other governments; consequently, these assets are not available for future spending. An additional portion of the Commission's net assets (approximately 17%) represents resources that are subject to restrictions on how they may be used. The remaining balance of unrestricted net assets ($3,882,011) may be used to meet the ongoing obligations to citizens and creditors. I I 1 1 1 I I 38,890,902 ITotal assets 63,418,181 54,565,452 Long-term liabilities 38,558,274 31,334,789 I Other liabilities 4,748,741 3,771,691 Total liabilities 43,307,015 35,106,480 INet assets: Invested in capital assets, I net of related debt 12,802,359 5,960,902 Restricted net assets 3,426,796 3,228,559 Unrestricted net assets 3,882,011 10,269,511 I Total net assets $ 20,111,166 $ 19,458,972 I - 6 - covenants. Within the basic financial statements, fund financial statements focus on the Commission's significant funds rather than the Commission as a whole. Fund Financial Statements- Continued ' 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 statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. 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. 1 - 5 - I :... ....:.:.:,-.:••••••-........ . • . ••:: -.-.:.::::................,,.. .. . . . I I Omaha Douglas Public Building Commission MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED For the year ended June 30, 2010 1 (Unaudited) 1 Governmental Activities The following table shows the summary of the Commission's changes in net assets: 1 Omaha Douglas Public Building Commission Summary of Net Assets 1 June 30, 2010 Governmental % Governmental % I Activities 2010 Of Activities Of Total 2009 Total I Program revenues: Rental/reimbursement $ 4,801,750 48% $ 4,916,107 33% Parking lot and concessions 580,788 5.8% 574,983 8% I General revenues: Property taxes 4,514,956 45% 4,532,614 54% Interest income/other 44,158 0.4% 186,149 4% ITotal revenues 9,942,012 10,209,854 Expenses: I Operations and maintenance 7,915,192 85% 8,439,345 85% Interest on long-term debt 1,374,626 15% 1,465,405 15% Total expenses 9,289,818 9,904,749 IChange in net assets 652,194 305,104 I Net assets -beginning of year 19,458,972 19,153,868 Net assets -end of year $ 20,111,166 $ 19,458,972 ITotal governmental activities revenue for the fiscal year was $9,942,012 compared to $10,209,853 for the fiscal year ended June 30, 2008. The two largest revenue sources for the I 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 IOmaha and Douglas County. I I - 8 - I al net assets $ 20,111,166 $ 19,458,972 I - 6 - covenants. Within the basic financial statements, fund financial statements focus on the Commission's significant funds rather than the Commission as a whole. Fund Financial Statements- Continued ' 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 statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. 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. 1 - 5 - I :... ....:.:.:,-.:••••••-........ . • . ••:: -.-.:.::::................,,.. .. . . . I ! I Omaha Douglas Public Building Commission MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED For the year ended June 30, 2010 I (Unaudited) IGovernmental Activities- Continued The graph below shows the percentage of the total governmental revenues allocated by each revenue type. IRevenues by Source Parking lot and concessions Interest 6% income/other 0% a � . �'' . „ RentaV I reimbursement Income F 48% Property taxes I 45% j I 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. I I 1 on long-term debt 1,374,626 15% 1,465,405 15% Total expenses 9,289,818 9,904,749 IChange in net assets 652,194 305,104 I Net assets -beginning of year 19,458,972 19,153,868 Net assets -end of year $ 20,111,166 $ 19,458,972 ITotal governmental activities revenue for the fiscal year was $9,942,012 compared to $10,209,853 for the fiscal year ended June 30, 2008. The two largest revenue sources for the I 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 IOmaha and Douglas County. I I - 8 - I al net assets $ 20,111,166 $ 19,458,972 I - 6 - covenants. Within the basic financial statements, fund financial statements focus on the Commission's significant funds rather than the Commission as a whole. Fund Financial Statements- Continued ' 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 statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. 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. 1 - 5 - I :... ....:.:.:,-.:••••••-........ . • . ••:: -.-.:.::::................,,.. .. . . . I Omaha Douglas Public Building Commission MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED For the year ended June 30, 2010 (Unaudited) 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 1 available for spending at the end of the fiscal year. For fiscal year ended June 30, 2010, the governmental funds reported combined ending balances of $20,997,544, an increase of $8,175,441, which recognizes the 2010 bond issue and its requirement to be expended for capital improvements. BUDGETARY HIGHLIGHTS 1 Per state statute, the Commission annually adopts a budget on the cash basis following the required public notice and hearing for all funds. The 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, 2010, is $39.3 million (net of accumulated depreciation). This investment in capital assets includes land, buildings, improvements, machinery and equipment. This is an increase of 1% in capital assets compared to the fiscal year ended June 30, 2009. The current year's capital assets are detailed in Note D of the notes to the financial statements. Long-term Debt As of June 30, 2010, the Commission had total Long-term debt outstanding of $40,715,000. This debt is financed by the Commission's property tax levy, currently 1.3 cents per $100 of assessed valuation. State statute limits the Commission levy to 1.7 cents per hundred. In August, 2010 the Commission refunded a portion of its outstanding debt to take advantage of current market interest rates, realizing a 1 million dollar interest savings over the remaining ten- year term of that bond issue. Additionally the Commission reduced principal balances outstanding during the year by $2,215,000 through the normal payments of the bonds outstanding. The current year's long term debt activity and construction commitments are detailed in Notes F and G of the financial statements. - 10 - I rstanding of the long-term impact of the Commission's near-term financial decisions. 1 - 5 - I :... ....:.:.:,-.:••••••-........ . • . ••:: -.-.:.::::................,,.. .. . . . I I Omaha Douglas Public Building Commission MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED For the year ended June 30, 2010 (Unaudited) ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS I Factors considered in preparing the Commission's budget for fiscal year 2010-2011 include: I • Property tax receipts of$4,673,542 are expected. This represents a 0.01% decrease due to predicted valuation decreases. Tax Levy receipts will be divided between the bond fund and the capital improvements fund. I • Parking revenues are expected to generate approximately $572,250. I • The total budget anticipates expenditures of$28,266,700 including bond debt service and construction fund spending for capital enhancements. I • The Commission refunded its outstanding 2001 bond debt in August to take advantage of market interest rates. The new issue carries the same final payoff term and saves 1 million dollars over the 10-year life of the issue. IREQUESTS FOR INFORMATION I 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 I financial information should be addressed to the Omaha Douglas Public Building Commission, 1819 Farnam Street, Suite 1205, Omaha,NE 68183. I I I I I I - Il - 1 Capital Assets The Omaha Douglas Public Building Commission's investment in capital assets as of June 30, 2010, is $39.3 million (net of accumulated depreciation). This investment in capital assets includes land, buildings, improvements, machinery and equipment. This is an increase of 1% in capital assets compared to the fiscal year ended June 30, 2009. The current year's capital assets are detailed in Note D of the notes to the financial statements. Long-term Debt As of June 30, 2010, the Commission had total Long-term debt outstanding of $40,715,000. This debt is financed by the Commission's property tax levy, currently 1.3 cents per $100 of assessed valuation. State statute limits the Commission levy to 1.7 cents per hundred. In August, 2010 the Commission refunded a portion of its outstanding debt to take advantage of current market interest rates, realizing a 1 million dollar interest savings over the remaining ten- year term of that bond issue. Additionally the Commission reduced principal balances outstanding during the year by $2,215,000 through the normal payments of the bonds outstanding. The current year's long term debt activity and construction commitments are detailed in Notes F and G of the financial statements. - 10 - I rstanding of the long-term impact of the Commission's near-term financial decisions. 1 - 5 - I :... ....:.:.:,-.:••••••-........ . • . ••:: -.-.:.::::................,,.. .. . . . I - M ,C 0` C .0 - N - M N 0, 00 .0 M 7 Vt T 10 - ,0 - 4 c, M 0r - 7 N en N 00 en h 6 N.. N - M P - VJ U C vUi - 7 O: 'V O M 1D - 01 .-• N `O 00 7 N , N o ' ' ' rn N C IC U N 7 M ^i ^ 07 - N 7 - d N R. 7 N• di C' N 1D N -ey co _ 0 9 V ¢ O` r - C - 7 0. r M R N - N N M COON d R 7 R V c00 - ^iNMOM > - N 10 M 7 N 10 O ' V O GO GO 69 6O m so — .— N O D\ dJ en 7 00 b R O` '0 - �D O 7 N M N N C 1D N 7 1D N 7 V) O• - 1D N M 1D .- D\ O 0 N v; N 7 N, N on M N O ^ C 0] 00 .- N 7 N N O N 00 00 P N N N 1. N - N • V N P N ^ N O` C on O`. 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V 0 V N 064 69 v3 b9 R ' N N . . . - R O V) nl 00 V7 00 M O 0' 7 ken G 7 h y 01 N 00 N C ' C N N N G O 'O M 01 N 15 1D C 10 N C 1D N Z R 0 Li N f'1 N ni M' a p 2 U E u I C 60 69 V 0 V V 8 00 00 1D T N N 00 M 00 C 00 - V7 rR, V N N 00 on v1 vl 01 N 00 b O 1D v1 G V 00 01 C1 ' ' ' ' ' 00 00 VJ ' - N ' ' 01 N - 06 00 N 0 R 'b VI N on^ O N - N 0000 0i 1N0 NM1 O O G '� .CU. 7 7 7 Q: 7 M 00 vt 7 Cr.._ V G lL U kid 60 65 d 6A 1 I c Vii Fup >a • .1 R o C 0 �' V C • V nl `� rA Q R .'' a0 c 7 v G R M o G 4• 0 V l.' O 7 C = R E. .D V O V V �' w 69 w P.A V U U• if:: G T.a' Lt] C i D .. J . U > C RO C ti K '5 o " ° `A >.M .O Uk R G O ki ° ti % i '- ,Y 12 U C V _ 0. O co.0 ,O U .d oC Rvi.o 0. tF .5a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I I I i C d , r 4 N FO .— 7 N ,O V U r r O� vt O;co . . ' oo �. U U •> C G7 D" M 7 h r M , , - . 2 'D E co vt ut a, O+ ^1 N so 7 ; _ ) v v rn a: — o' t7 " `o es, <n y y 1 ' vl 1 vt r D\ O r11" M 00 m ,O O 7 Q\ N O VOi vOi en r r E m N t^I Q.'vt vi Q`rt M C O` er, D sD ✓ r N \O — v VD r o so vo N M m `D 17 N sO p v N v • I in O OU — N ,D r v., C en M O en Q\ Q` oo vl r r Q N O �O O r 01 — O '/� vt V O` 7 — O N o0 vl T vt v) vt 7 ,; en7 co O` O` vi N r F a, d 7 M ,O oo ..O — ,-, .O VD O` O .0 ,O r N O` O co vi 7 0o N oo N V — Os O O N N — o.0 O1 �— 7 V vi N N — v O O on N' coEn , •V b i M i C n r r i i i r ' enO O co ' O 7 R T of 7 N M r, ^ 7 cr so oo r 1(o LL n 1` N 7 1 sci r r el 7 Z C M M N — N1 enM O 6 _ o m I = G M en ,D CaO Q\ D\ en c m o r is'O U O ' r ' 7 N N O h Vt N N C O V ri o0 0o p Oi co� oR L 2 = o 0— — N v O N N OOi a, E.' 1 o S n" u.. of rn" y o c 0 o U o m c In 44 -6 O a (� O r N oD O G O — C N N M en en oo M 00 ^ N C y A M ,U O ' ' N N ut ' vl M ' M co,, r o en en so a to M so M M M o r- O� U • .b y Do G {L nl N N... v '0 M G U 4¢.. G O O -p rat 3 0 CO o U ti ' X to 69 a w A 6 Io N :.� ai _ o 0 0 �o v v o — c • Y U Q J y .D O — en ooen N N r O to oG.I.et ce .6. j C n en en en en en V 0000 o L E C 0 2 (a. N N E O i E cO n n m 5 E o G c� r ' , a`o rn -1 ' ' so 7 ' V ' C o0 O on O vi N r — Q\ O .� tGj 7 oo 000 en7 N 00 Nen I O C 4i. C N vi ut — O � n 69 is fal O 4 zz Y• FG _ • o Ili w °z z up m w a U Cl) N C ` zn . w w Vc Z O 2 a oo o VJ¢ h Fv ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I 1 1 Omaha Douglas Public Building Commission NOTES TO FINANCIAL STATEMENTS For the year ended June 30, 2010 NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES LThis 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. There are no component units included within the reporting entity. 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. I 1 - 14 - II N N r O to oG.I.et ce .6. j C n en en en en en V 0000 o L E C 0 2 (a. N N E O i E cO n n m 5 E o G c� r ' , a`o rn -1 ' ' so 7 ' V ' C o0 O on O vi N r — Q\ O .� tGj 7 oo 000 en7 N 00 Nen I O C 4i. C N vi ut — O � n 69 is fal O 4 zz Y• FG _ • o Ili w °z z up m w a U Cl) N C ` zn . w w Vc Z O 2 a oo o VJ¢ h Fv ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I 1 1 ' Omaha Douglas Public Building Commission NOTES TO FINANCIAL STATEMENTS—CONTINUED For the year ended June 30, 2010 NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -CONTINUED 2. Basis of Presentation- Continued The statement of net assets 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 assets 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.Amounts reported as program revenues include charges to customers for goods, services,or privileges provided. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. Government 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 - 1 1 m 5 E o G c� r ' , a`o rn -1 ' ' so 7 ' V ' C o0 O on O vi N r — Q\ O .� tGj 7 oo 000 en7 N 00 Nen I O C 4i. C N vi ut — O � n 69 is fal O 4 zz Y• FG _ • o Ili w °z z up m w a U Cl) N C ` zn . w w Vc Z O 2 a oo o VJ¢ h Fv ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I I Omaha Douglas Public Building Commission NOTES TO FINANCIAL STATEMENTS—CONTINUED For the year ended June 30, 2010 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 2008 Project Construction Fund is used to account for costs associated with building improvement projects funded by the 2008 bond issue. 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, 2010. 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. I 1 - 16 - esources 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 - 1 1 m 5 E o G c� r ' , a`o rn -1 ' ' so 7 ' V ' C o0 O on O vi N r — Q\ O .� tGj 7 oo 000 en7 N 00 Nen I O C 4i. C N vi ut — O � n 69 is fal O 4 zz Y• FG _ • o Ili w °z z up m w a U Cl) N C ` zn . w w Vc Z O 2 a oo o VJ¢ h Fv ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I Omaha Douglas Public Building Commission ' NOTES TO FINANCIAL STATEMENTS—CONTINUED For the year ended June 30, 2010 NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 7. 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 assets because their use is limited by applicable bond covenants and they are maintained in separate bank accounts. 8. 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 of the related assets ranging from 5 to 40 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. 9. Property Taxes Property taxes are levied by the County Board of Commissioners on or before October 15`1'of each year for all political subdivisions in the County. Taxes are due on December 31 S`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 1". 10. 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. 11. Bond Premium, Discount, and Issue Costs Bond premium, bond discount, and bond issue costs of the 2001, 2005, 2008, and 2010 revenue bonds are amortized using the straight-line method over the respective terms of the bonds. 1 I - 17 - I able. 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 - 1 1 m 5 E o G c� r ' , a`o rn -1 ' ' so 7 ' V ' C o0 O on O vi N r — Q\ O .� tGj 7 oo 000 en7 N 00 Nen I O C 4i. C N vi ut — O � n 69 is fal O 4 zz Y• FG _ • o Ili w °z z up m w a U Cl) N C ` zn . w w Vc Z O 2 a oo o VJ¢ h Fv ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I 1 1 ' I Omaha Douglas Public Building Commission NOTES TO FINANCIAL STATEMENTS—CONTINUED For the year ended June 30, 2010 NOTE A. SUMMARY OF SIGNI FICANT ACCOUNTING POLICIES -CONTINUED 1 12. Compensated Absences It is the Commission's policy to permit employees to accumulate earned but unused Ivacation. 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 Ithey have matured,(for example,as a result of employee resignations or retirements). 13. Net Assets/Fund Balances IThe government-wide financial statements utilize a net assets presentation. Net assets are categorized as invested capital assets, net of related debt, restricted, and unrestricted. I • Invested in Capital Assets,Net of Related Debt - This category groups all capital assets into one component of net assets. Accumulated depreciation Iand the outstanding balance of the debt attributable to the acquisition, construction, or improvement of those assets reduce and balance in this Icategory. • Restricted Net Assets-This category presents external restrictions imposed by creditors, grantors, contributors, or laws or regulations of other Igovernments, and restrictions imposed by law through constitutional provisions or enabling legislation. I • Unrestricted Net Assets-This category represents net assets that do not meet the definition of the preceding two categories. Unrestricted net assets often I have constraints on resources that are imposed by management, but those constraints can be removed or modified. I 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 a specific purpose including those reserved for encumbrances to reflect the outstanding contractual obligations for which goods and services have not been received. I I - 18 - 1 iod 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 - 1 1 m 5 E o G c� r ' , a`o rn -1 ' ' so 7 ' V ' C o0 O on O vi N r — Q\ O .� tGj 7 oo 000 en7 N 00 Nen I O C 4i. C N vi ut — O � n 69 is fal O 4 zz Y• FG _ • o Ili w °z z up m w a U Cl) N C ` zn . w w Vc Z O 2 a oo o VJ¢ h Fv ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I I , I Omaha Douglas Public Building Commission NOTES TO FINANCIAL STATEMENTS—CONTINUED For the year ended June 30, 2010 NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 1 14. Use of Restricted Funds When both restricted and unrestricted resources are available for use, it is the ICommission's policy to use restricted resources first,then unrestricted resources as they are needed. 1 15. Use of Estimates The preparation of the financial statements in conformity with accounting principles I 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, I expenditures, or expenses, during the reporting period. Actual results could differ from those estimates. 1 1 I I 1 I I I I - 19- 1 outstanding balance of the debt attributable to the acquisition, construction, or improvement of those assets reduce and balance in this Icategory. • Restricted Net Assets-This category presents external restrictions imposed by creditors, grantors, contributors, or laws or regulations of other Igovernments, and restrictions imposed by law through constitutional provisions or enabling legislation. I • Unrestricted Net Assets-This category represents net assets that do not meet the definition of the preceding two categories. Unrestricted net assets often I have constraints on resources that are imposed by management, but those constraints can be removed or modified. I 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 a specific purpose including those reserved for encumbrances to reflect the outstanding contractual obligations for which goods and services have not been received. I I - 18 - 1 iod 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 - 1 1 m 5 E o G c� r ' , a`o rn -1 ' ' so 7 ' V ' C o0 O on O vi N r — Q\ O .� tGj 7 oo 000 en7 N 00 Nen I O C 4i. C N vi ut — O � n 69 is fal O 4 zz Y• FG _ • o Ili w °z z up m w a U Cl) N C ` zn . w w Vc Z O 2 a oo o VJ¢ h Fv ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I 1 ; Omaha Douglas Public Building Commission ' NOTES TO FINANCIAL STATEMENTS —CONTINUED For the year ended June 30, 2010 NOTE B. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS ' Amounts reported for governmental activities in the Statement of Net Assets differ from the amounts reported in the Governmental Funds, Balance Sheet as follows: tFund balance-total governmental funds: $ 20,997,544 ' 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. 128,346 ' Capital assets used in governmental activities are not current financial resources and are not reported in the governmental funds. 39,258,752 ' Bond issue costs are reported as expenditures when first incurred because they require the use of current financial resources and are not reported in the governmental funds. 1,324,972 ' Interest costs are not due and payable in the current period and are not reported in the governmental funds. (227,819) ' Revenues earned during the current period are not available as resources and are not recognized as receivable in the governmental ' funds. 190,208 Accrued compensated absences are not due and payable in the current period and are not reported in the governmental funds. (87,817) 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. (41,473,020) ' Net assets of governmental activities $ 20,111,166 I - 20- und 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 a specific purpose including those reserved for encumbrances to reflect the outstanding contractual obligations for which goods and services have not been received. I I - 18 - 1 iod 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 - 1 1 m 5 E o G c� r ' , a`o rn -1 ' ' so 7 ' V ' C o0 O on O vi N r — Q\ O .� tGj 7 oo 000 en7 N 00 Nen I O C 4i. C N vi ut — O � n 69 is fal O 4 zz Y• FG _ • o Ili w °z z up m w a U Cl) N C ` zn . w w Vc Z O 2 a oo o VJ¢ h Fv ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I ' Omaha Douglas Public Building Commission NOTES TO FINANCIAL STATEMENTS—CONTINUED For the year ended June 30, 2010 NOTE B. 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: $ 8,175,446 Adjustments: ' Revenue reported in the statement of activities that does not provide current financial resources are not reported as revenues in the ' governmental funds. 72,685 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. (25,844) 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. 8,916 ' 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. 367,850 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 issuance costs, ' 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. (7,946,859) Net change in assets of governmental activities $ 652,194 - 21 - ation or are legally restricted by outside parties for a specific purpose including those reserved for encumbrances to reflect the outstanding contractual obligations for which goods and services have not been received. I I - 18 - 1 iod 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 - 1 1 m 5 E o G c� r ' , a`o rn -1 ' ' so 7 ' V ' C o0 O on O vi N r — Q\ O .� tGj 7 oo 000 en7 N 00 Nen I O C 4i. C N vi ut — O � n 69 is fal O 4 zz Y• FG _ • o Ili w °z z up m w a U Cl) N C ` zn . w w Vc Z O 2 a oo o VJ¢ h Fv ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I • ' Omaha Douglas Public Building Commission NOTES TO FINANCIAL STATEMENTS—CONTINUED For the year ended June 30, 2010 111 NOTE C. DEPOSITS AND INVESTMENTS ' 1. Deposits ' At June 30, 2010, the Commission maintained cash balances of $992,190 in a financial institution with a bank balance of$992,542. Carrying amounts of the funds are $459,878 for the operations and maintenance funds, $203,950 for capital improvements fund,$55,559 for the 2010 project construction fund,$124,865 for the ' 2008 project construction fund,and$147,939 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. 2. Investments State statute allows a county treasurer to invest in United States Government bonds, bonds and debentures, United States Treasury notes, bills, or certificates of indebtedness maturing within two years from the date of purchase,or in certificates ' of deposit, the Commission has no policy to further limit this. However, Building Commission Bond covenants further direct the Commission to invest in obligations of the U.S. Treasury or any state, agencies, and negotiable or non-negotiable certificates of deposit. While there is no formal policy the Commission coordinates its investment maturities to match cash flow needs and restricts the maximum investment term to less than one year from purchase date. ' Credit risk is the risk that the Commission will not recover its investments due to the ability of the counterparty to fulfill their obligation and custodial credit risk is the risk that, in the event of a failure of the counterparty, the Commission will not be able to recover the value of its investments or collateral securities that are in the possession of the outside party. Investments are carried at an amortized cost of ' $19,794,455,which approximates the fair value at June 30,2010. At June 30,2010 all Commission investments were in U.S. Treasuries with an approved institution with FDIC Insurance in an account held for the benefit of the Commission. I - 22 - r 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 - 1 1 m 5 E o G c� r ' , a`o rn -1 ' ' so 7 ' V ' C o0 O on O vi N r — Q\ O .� tGj 7 oo 000 en7 N 00 Nen I O C 4i. C N vi ut — O � n 69 is fal O 4 zz Y• FG _ • o Ili w °z z up m w a U Cl) N C ` zn . w w Vc Z O 2 a oo o VJ¢ h Fv ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I I ' Omaha Douglas Public Building Commission NOTES TO FINANCIAL STATEMENTS—CONTINUED For the year ended June 30, 2010 INOTE D. CAPITAL ASSETS IThe Commission's capital asset activity for the year ended June 30, 2010 is as follows: Beginning Ending I Balance Increases Decreases Balance Governmental Activities: Capital Assets not being depreciated: ILand $ 7,001,672 $ $ $ 7,001,672 Construction in progress 1,378,393 2,256,883 (145,327) 3,489,949 Total non-depreciable assets 8,380,065 2,256,883 (145,327) 10,491,621 ICapital assets being depreciated: Civic Center 30,056,178 - - 30,056,178 IHall of Justice 12,448,473 - - 12,448,473 Hall of Justice improvements 1,943,019 - - 1,943,019 Parking garage 14,335,340 - - 14,335,340 I Furniture and fixtures 3,129,244 11,930 (2,358,023) 783,151 Equipment/systems 15,278,621 859,665 (978,039) 15,160,246 Total depreciable assets 77,190,875 871,595 (3,336,063) 74,726,407 ILess accumulated depreciation for: Civic Center 21,221,052 761,605 - 21,982,657 Hall of Justice 9,765,566 236,332 - 10,001,898 Hall of Justice improvements 1,943,019 1,943,019 Parking garage 2,329,492 358,383 - 2,687,875 Furniture and fixtures 3,087,464 19,043 - 3,106,507 I Equipment/systems 8,333,445 1,199,074 (3,295,200) 6,237,320 Total accumulated depreciation 46,680,038 2,574,438 (3,295,200) 45,959,276 ITotal capital assets being depreciated, net of accumulated depreciation 30,510,837 (1,702,843) (40,863) 28,767,131 INet book value of government-wide capital assets $ 38,890,902 $ 554,040 $ (186,190) $ 39,258,752 I I - 23 - carried at an amortized cost of ' $19,794,455,which approximates the fair value at June 30,2010. At June 30,2010 all Commission investments were in U.S. Treasuries with an approved institution with FDIC Insurance in an account held for the benefit of the Commission. I - 22 - r 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 - 1 1 m 5 E o G c� r ' , a`o rn -1 ' ' so 7 ' V ' C o0 O on O vi N r — Q\ O .� tGj 7 oo 000 en7 N 00 Nen I O C 4i. C N vi ut — O � n 69 is fal O 4 zz Y• FG _ • o Ili w °z z up m w a U Cl) N C ` zn . w w Vc Z O 2 a oo o VJ¢ h Fv ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I I ' Omaha Douglas Public Building Commission I NOTES TO FINANCIAL STATEMENTS —CONTINUED For the year ended June 30, 2010 NOTE E. OPERATING LEASE/MAJOR CUSTOMERS IThe 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 I 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, 2010, the Commission has operating I 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 I 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: ICity County Health Fiscal Year Ending June 30: I 2011* $ 1,421,342 $ 3,212,765 $ 168,994 2012* 1,463,982 3,309,148 174,064 1 2013* 1,507,902 1,553,139 3,408,422 179,286 2014* 3,510,675 184,664 2015* 1,599,733 3,615,995 190,204 I 2016* 1,647,725 3,724,475 195,910 2017* 1,697,157 3,836,209 201,788 2018* 1,748,071 3,951,296 207,841 I 2019* 1,800,514 4,069,835 214,077 2020* 1,854,529 4,191,930 220,499 2021* 1,910,165 4,317,688 227,114 I2022* 1,967,470 4,447,218 233,927 2023* 2,026,494 4,580,635 240,945 I * Assumes a 3%increase per year I At June 30, 2010,the Commission had payables due to the City and County of$71,198 for excess rents paid to the Commission. I - 24 - with FDIC Insurance in an account held for the benefit of the Commission. I - 22 - r 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 - 1 1 m 5 E o G c� r ' , a`o rn -1 ' ' so 7 ' V ' C o0 O on O vi N r — Q\ O .� tGj 7 oo 000 en7 N 00 Nen I O C 4i. C N vi ut — O � n 69 is fal O 4 zz Y• FG _ • o Ili w °z z up m w a U Cl) N C ` zn . w w Vc Z O 2 a oo o VJ¢ h Fv ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I Omaha Douglas Public Building Commission INOTES TO FINANCIAL STATEMENTS—CONTINUED For the year ended June 30, 2010 INOTE F. CONSTRUCTION COMMITMENTS IThe commission has active constructions project as of June 30, 2010. The Commission's commitments with contractors at June 30, 2010 are as follows: IExpenditures to Remaining Date Commitments ' Project: Hall of Justice Mezzanine Server Room $ 4,762 $ 1,738 Civic Center Fire Alarm - 131,726 I Electrical Rooms HVAC Upgrade 132,624 353,376 Hall of Justice Stained Glass Design 9,771 1,000 Hall of Justice Stained Glass Restoration Project - 140,360 I Hall of Justice Sprinkler and Fire Alarms Design 49,877 11,523 Hall of Justice Sprinkler and Fire Alarms Upgrade 1,178,110 Civic Center Entry Vestibules - 108,000 I Parking Facility Lighting Upgrade - 266,500 NOTE G. LONG-TERM LIABILITIES Revenue bonds outstanding at June 30, 2010 are as follows: IPurpose Interest Rate Amount Governmental Activity 4.65 - 5.25% $ 7,445,000 I Governmental Activity 3.75 - 5.00% 15,880,000 Governmental Activity 2.65 - 4.50% 7,390,000 Governmental Activity 0.40 - 4.00% 10,000,000 I $ 40,715,000 I I I - 25 - I ,553,139 3,408,422 179,286 2014* 3,510,675 184,664 2015* 1,599,733 3,615,995 190,204 I 2016* 1,647,725 3,724,475 195,910 2017* 1,697,157 3,836,209 201,788 2018* 1,748,071 3,951,296 207,841 I 2019* 1,800,514 4,069,835 214,077 2020* 1,854,529 4,191,930 220,499 2021* 1,910,165 4,317,688 227,114 I2022* 1,967,470 4,447,218 233,927 2023* 2,026,494 4,580,635 240,945 I * Assumes a 3%increase per year I At June 30, 2010,the Commission had payables due to the City and County of$71,198 for excess rents paid to the Commission. I - 24 - with FDIC Insurance in an account held for the benefit of the Commission. I - 22 - r 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 - 1 1 m 5 E o G c� r ' , a`o rn -1 ' ' so 7 ' V ' C o0 O on O vi N r — Q\ O .� tGj 7 oo 000 en7 N 00 Nen I O C 4i. C N vi ut — O � n 69 is fal O 4 zz Y• FG _ • o Ili w °z z up m w a U Cl) N C ` zn . w w Vc Z O 2 a oo o VJ¢ h Fv ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I I I , I Omaha Douglas Public Building Commission NOTES TO FINANCIAL STATEMENTS—CONTINUED For the year ended June 30, 2010 INOTE G. LONG-TERM LIABILITIES - CONTINUED IPrincipal and interest requirements to maturity on bonds outstanding prior to the effects of the valuation adjustment and unamortized premium at June 30, 2010 are as follows: IPrincipal Interest Year Ending June 30, I 2011 2012 $ 2,985,000 $ 1,584,112 3,000,000 1,535,498 2013 3,105,000 1,433,598 I 2014 3,220,000 3,345,000 1,308,260 2015 1,172,298 2016-2019 19,800,000 3,563,853 I 2020-2023 5,260,000 421,425 $ 40,715,000 $ 11,019,044 ILong-term liability activity for the year ended June 30, 2010 was as follows: Beginning Ending Due Within IBalance Additions Reductions Balance One Year Revenue bonds payable $32,930,000 $10,000,000 $(2,215,000) $40,715,000 $ 2,985,000 Deferred amounts for I discounts/premiums,net 534,390 269,559 (45,929) 758,020 - Total revenue bonds payable 33,464,390 10,269,559 (2,260,929) 41,473,020 2,985,000 I Compensated absences Total96,733 (8,916) 87,817 17,563 $33,561,123 $10,269,559 $(2,269,845) $41,560,837 $ 3,002,563 1 The total interest incurred for the year ended June 30, 2010 was$1,434,073 On June 24, 2010, the Commission issued $10,000,000 in new bonds with an average I interest rate of approximately 3.071%to finance renovations in the Civic Center and Hall of Justice. The net proceeds of$10,106,067, after payment of$163,493 in underwriting fees and other issuance costs,were deposited in the 2010 Project Construction fund. The bonds, I which are covered under several bond covenants, are payable through 2023. The Commission has pledged,as security for the bonds,the annual tax levy,and if needed lease revenues of the Commission. 1 - 26 - I . I - 24 - with FDIC Insurance in an account held for the benefit of the Commission. I - 22 - r 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 - 1 1 m 5 E o G c� r ' , a`o rn -1 ' ' so 7 ' V ' C o0 O on O vi N r — Q\ O .� tGj 7 oo 000 en7 N 00 Nen I O C 4i. C N vi ut — O � n 69 is fal O 4 zz Y• FG _ • o Ili w °z z up m w a U Cl) N C ` zn . w w Vc Z O 2 a oo o VJ¢ h Fv ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I L 1 , 1 Omaha Douglas Public Building Commission NOTES TO FINANCIAL STATEMENTS—CONTINUED For the year ended June 30, 2010 NOTE G. LONG-TERM LIABILITIES - CONTINUED Prior Year Defeased Debt In 2005, the Commission defeased $19,755,000 of the 1998 and 2000 Series bonds by ' placing new bond proceeds in an irrevocable trust to provide for further debt service payments on the defeased bonds. These bonds were paid on May 1, 2010. ' 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 January 1, 2009. ' 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. ' - 27 - I - 15 - 1 1 m 5 E o G c� r ' , a`o rn -1 ' ' so 7 ' V ' C o0 O on O vi N r — Q\ O .� tGj 7 oo 000 en7 N 00 Nen I O C 4i. C N vi ut — O � n 69 is fal O 4 zz Y• FG _ • o Ili w °z z up m w a U Cl) N C ` zn . w w Vc Z O 2 a oo o VJ¢ h Fv ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I 1 i Omaha Douglas Public Building Commission NOTES TO FINANCIAL STATEMENTS—CONTINUED For the year ended June 30, 2010 NOTE H. RETIREMENT PLAN —CONTINUED 2. Method Used to Value Investments Plan assets are invested in readily marketable securities and are carried at fair value. ' 3. Contributions t 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 $80,506 for June 30, 2010. 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 1819 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 Building Commission contributes 100%of the retiree insurance premium and it ' is considered OPEB under 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 plan are established by,and can be amended by,the Douglas County Board of Commissioners. The contribution requirements of Building 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 30,2010,the Commission contributed$17,226 for a total of 2 retirees, in addition to their covered dependents. 1 - 28 - 111 views are only required on a biennial basis,the most recent is dated January 1, 2009. ' 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. ' - 27 - I - 15 - 1 1 m 5 E o G c� r ' , a`o rn -1 ' ' so 7 ' V ' C o0 O on O vi N r — Q\ O .� tGj 7 oo 000 en7 N 00 Nen I O C 4i. C N vi ut — O � n 69 is fal O 4 zz Y• FG _ • o Ili w °z z up m w a U Cl) N C ` zn . w w Vc Z O 2 a oo o VJ¢ h Fv ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I Omaha Douglas Public Building Commission ' NOTES TO FINANCIAL STATEMENTS—CONTINUED For the year ended June 30, 2010 NOTE I. POST-EMPLOYMENT BENEFITS - CONTINUED ' 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 1819 Farnam Street, Omaha,Nebraska 68102. ' 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 I risks.The deductible amounts for this insurance would be insignificant to the Commission. NOTE K. CONTINGENCIES ' The Commission is involved in lawsuits arising in the ordinary course of business. In the opinion of the Commission's management, based on the advice of the Commission's legal counsel with respect to litigation,these matters are not expected to have a materially adverse effect on the Commission's financial position at June 30, 2010. NOTE L. SUBSEQUENT ITEMS II Prior Year Defeased Debt ' Subsequent to year-end, the Commission issued $7,544,000 in bonds to defease the outstanding balance of the 2001 Series bonds,$7,455,000,by placing new bond proceeds in an in-evocable trust to pay off the refunded bonds on May 1, 2011. The new bond issue, payable through 2020,was issued with an average interest cost of 2.46%and an average life of 5.85 years. ' Had this been done prior to June 30,2010,the net change to the government-wide financial statement of net assets would be an increase of$241,275. As a result of this transaction the t Commission is reducing its total future debt service payments over the succeeding 10 years by approximately$1,307,600. This resulted in a present value savings of$987,000 after the $165,000 investment to pay issuance costs. II - 29 - 1 dependents. 1 - 28 - 111 views are only required on a biennial basis,the most recent is dated January 1, 2009. ' 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. ' - 27 - I - 15 - 1 1 m 5 E o G c� r ' , a`o rn -1 ' ' so 7 ' V ' C o0 O on O vi N r — Q\ O .� tGj 7 oo 000 en7 N 00 Nen I O C 4i. C N vi ut — O � n 69 is fal O 4 zz Y• FG _ • o Ili w °z z up m w a U Cl) N C ` zn . w w Vc Z O 2 a oo o VJ¢ h Fv ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I i . I ; Omaha Douglas Public Building Commission NOTES TO FINANCIAL STATEMENTS—CONTINUED For the year ended June 30, 2010 NOTE L. SUBSEQUENT ITEMS - CONTINUED ' GASB 54 Implementation To enhance the usefulness of fund balance information and provide clearer fund balance ' classifications,GASB Statement 54 changes the presentation and classification requirements of fund balance. Implementation is required for financial statements beginning after June 15, 2010. For the fiscal year 2011 the Commission will restate its fund balance categories to ' show: Restricted, amounts that can be spent only for the specific purposes stipulated by external resource providers,or through enabling legislation;Committed,amounts that can be used only for the specific purposes determined by a formal action of the Board; Assigned, amounts intended to be used by the government for specific purposes which do not meet the criteria to be classified as restricted or committed;and unassigned,the residual classification for the general fund which includes all spendable amounts not contained in the other ' classifications. 1 I - 30 - L. SUBSEQUENT ITEMS II Prior Year Defeased Debt ' Subsequent to year-end, the Commission issued $7,544,000 in bonds to defease the outstanding balance of the 2001 Series bonds,$7,455,000,by placing new bond proceeds in an in-evocable trust to pay off the refunded bonds on May 1, 2011. The new bond issue, payable through 2020,was issued with an average interest cost of 2.46%and an average life of 5.85 years. ' Had this been done prior to June 30,2010,the net change to the government-wide financial statement of net assets would be an increase of$241,275. As a result of this transaction the t Commission is reducing its total future debt service payments over the succeeding 10 years by approximately$1,307,600. This resulted in a present value savings of$987,000 after the $165,000 investment to pay issuance costs. II - 29 - 1 dependents. 1 - 28 - 111 views are only required on a biennial basis,the most recent is dated January 1, 2009. ' 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. ' - 27 - I - 15 - 1 1 m 5 E o G c� r ' , a`o rn -1 ' ' so 7 ' V ' C o0 O on O vi N r — Q\ O .� tGj 7 oo 000 en7 N 00 Nen I O C 4i. C N vi ut — O � n 69 is fal O 4 zz Y• FG _ • o Ili w °z z up m w a U Cl) N C ` zn . w w Vc Z O 2 a oo o VJ¢ h Fv ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I 1 I ' REQUIRED SUPPLEMENTAL INFORMATION 1 1 1 glas Public Building Commission FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR'S REPORT IFor the year ended June 30,2010 I I I I 1 I I • :x; o 0" oc 4 o o v_ N r 9 8. or 1O�_ w m N- M M V N r. 0 I O L N _ pO r Q, O N v.O ' O 0.0 ' ' C 9 — . hi ' 0 0 >>m d o e o _ 9,94 N 01 i 4 7 r .O N 0 ti O O II f 1 F U N C O 04, m d� m y r di N O Eo 88 o a ill c O 9' v O P P ? a9 m 42 o v 0e27.9 = n U= U o r �n c�M gy o- . . oo 9 U{i c It's 6 _ v� .O b w M + I �' o• c ' .o — eo ? m c m o m o c C y 9'1 O C g.2 Eo O _ 0 P r 0 O'Z O L C ti W NV p m N ❑ ` 'O 1 m c o 9 7>C 6 E p] € N N O o T 0 P O71 c — O N Op O � 62 o (AC^ u¢Q • b N g. r b yv h O _ r.inN O_ O IR. o' c_v ton = ro yr e — `G yP, wr m p E vI J N F 2 w 0 7 F F= Z O 7 w O— O 7 N m e NF U Q d p u 0. < co,Xuj CL U wo O -z W Nw iCii tlUV wY ws p . 2< OO O < ▪ °-15 - u w i_ w <• v w y u O a<< `° O d Z p I G off! y < us— o � C www Y1 E'O m w Z. �, u E > y d V r c _ ui ui LL < O Y{ �. 'O U 0 N< 'O U N U U O �8 z �'� a Ev ._ G " cm• o m`'ti > 8 wm < < w LL L 9 c. c 6 T S N- U 2 V. U 0 ,t'L 8 N 9 U E O'p'O c O O Z.." K c LT,N ~/I z~ 3 N 9 C I _ — w L w 7 w O O �SO�n _m= w nmiC.mm " u' o =f'a` 9 Um =a7 m R UU 7_ o o N o x o 0 o x v o N K r O W r iii o g w < g g w G w v_ 1 G c� r ' , a`o rn -1 ' ' so 7 ' V ' C o0 O on O vi N r — Q\ O .� tGj 7 oo 000 en7 N 00 Nen I O C 4i. C N vi ut — O � n 69 is fal O 4 zz Y• FG _ • o Ili w °z z up m w a U Cl) N C ` zn . w w Vc Z O 2 a oo o VJ¢ h Fv ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I i . ' Omaha Douglas Public Building Commission NOTES TO BUDGETARY COMPARISON SCHEDULE For the year ended June 30, 2010 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. 1 - 33 - g. r b yv h O _ r.inN O_ O IR. o' c_v ton = ro yr e — `G yP, wr m p E vI J N F 2 w 0 7 F F= Z O 7 w O— O 7 N m e NF U Q d p u 0. < co,Xuj CL U wo O -z W Nw iCii tlUV wY ws p . 2< OO O < ▪ °-15 - u w i_ w <• v w y u O a<< `° O d Z p I G off! y < us— o � C www Y1 E'O m w Z. �, u E > y d V r c _ ui ui LL < O Y{ �. 'O U 0 N< 'O U N U U O �8 z �'� a Ev ._ G " cm• o m`'ti > 8 wm < < w LL L 9 c. c 6 T S N- U 2 V. U 0 ,t'L 8 N 9 U E O'p'O c O O Z.." K c LT,N ~/I z~ 3 N 9 C I _ — w L w 7 w O O �SO�n _m= w nmiC.mm " u' o =f'a` 9 Um =a7 m R UU 7_ o o N o x o 0 o x v o N K r O W r iii o g w < g g w G w v_ 1 G c� r ' , a`o rn -1 ' ' so 7 ' V ' C o0 O on O vi N r — Q\ O .� tGj 7 oo 000 en7 N 00 Nen I O C 4i. C N vi ut — O � n 69 is fal O 4 zz Y• FG _ • o Ili w °z z up m w a U Cl) N C ` zn . w w Vc Z O 2 a oo o VJ¢ h Fv ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I I 1 t I ' SUPPLEMENTAL INFORMATION I 1 1 glas Public Building Commission FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR'S REPORT IFor the year ended June 30,2010 I I I I 1 I I I Omaha Douglas Public Building Commission I Schedule 1-Bonds Payable June 30,2010 I Annual Bond Number Maturity Date Amount Interest Rate 2001 Issue May 1,2011 $ 550,000 4.63% I May 1,2012 500,000 5.25% May 1,2013 530,000 5.25% May 1,2014 545,000 5.25% May 1,2015 565,000 5.25% May 1,2016 750,000 4.90% I May 1,2017 945,000 5.10% May 1,2018 965,000 5.10% May I,2019 1,040,000 5.10% May 1,2020 1,055,000 5.10% Is 7,445,000 2005 Issue May 1,2011 S 1,290,000 3.75% May I,2012 1,340,000 3.75% I May 1,2013 1,390,000 5.00% May 1,2014 1,465,000 5.00% May 1,2015 1,540,000 5.00% May 1,2016 1,620,000 4.00% I 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% Is 15,880,000 2008 Issue May 1,2011 $ 450,000 2.56% May 1,2012 460,000 4.00% May 1,2013 480,000 4.00% I May 1,2014 495,000 4.00% May 1,2015 515,000 4.00% May 1,2016 535,000 4.25% May 1,2017 560,000 4.25% I 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% I May I,2022 690,000 4.50% May 1,2023 720,000 4.50% $ 7,390,000 I 2010 Issue May 1,2011 $ 695,000 2.56% May 1,2012 700,000 4.00% May 1,2013 705,000 4.00% May 1,2014 715,000 4.00% I May 1,2015 725,000 4.00% May 1,2016 735,000 4.25% May 1,2017 600,000 4.25% May 1,2018 620,000 4.25% May 1,2019 640,000 3.75% I May 1,2020 675,000 4.25% May 1,2021 1,030,000 4.38% May 1,2022 1,060,000 4.50% May 1,2023 1,100,000 4.50% I $ 10,000,000 See accompanying independent auditor's report. -35- I v_ 1 G c� r ' , a`o rn -1 ' ' so 7 ' V ' C o0 O on O vi N r — Q\ O .� tGj 7 oo 000 en7 N 00 Nen I O C 4i. C N vi ut — O � n 69 is fal O 4 zz Y• FG _ • o Ili w °z z up m w a U Cl) N C ` zn . w w Vc Z O 2 a oo o VJ¢ h Fv ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I I I I o o c Co o c o 0 0 c o U N N N N N N N N N 1 C ^ ^ r _ i 4 L L L p �' O F C C C E 07A ti > > > > > > > > x 0 z0 z z0 z0 z0 z0 z0 LiJ I Icou,15 _ s y F .15 U 7 L U Z• U 00 U 0 b y U 0 7 1 - 35 7 U 'E L ' C = C J� 'c7 7 a�i U D .� U U U U o y E _ U 'UO C .D 17 7 b 'C .0 L on �. 7 F. L o 'C O U U U N O U d v, p 'UO U C yU 0 7 0 .0 7 T' U J CD > C ,p .•� G . L .D r po U 7 69 E. N E CD O O0 T' O 'O O C O E 'C T} 0.'C7 •, '7 y .N O 69 O 69 T' •,l? V3 y y 'N 71 > U U H ,E o @ ayi E 6`N9 E h E 69 N f h•� t .V C C C t C CD 0 U U O to p U O r 1` ..1- a C= �' C. U UO > U 7 ti 69 C) o U U O O O ,E F C O X .9 an oorO co 0o O 00 o O C 0. 0 0 r C L o '0 0 0 0 .- 0 0 0 0 0 U E 0 p 0 0 0 E �° o 000?00000 000 0O o 0O E o Eo 00 0 o f c I CC 0 o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o U .0 C a� 0 0 o O 0 0 0 v; O o O O o 0 0 0 0 o c o o o o L N O O O O O O O O O 0 0 0 O O y p� ;C O O 0 0 an N r O O 0 0 N h co h N N M N — �n N a -. h — vi an 6n M N @ 0.b U N 69 69 69 69 69 69 69 V3 69 Cl)69 69 69 Cl) 69 Cl') 69 69 69 69 69 69 69 69 69 U ,0 M A U U L C C 0 " a CO 1 7n p z. C 0. L p N U . w U '.7 9 U 0 .Y Z' C U cv'i U F R U C .CN E ' p w O W Z 0 i 0 > 0 Q' E Ca. �. U v, E. ^ U o 12 c° A 7 3 .7 u p a E ° q! ai •E C 7 'M .t.L •E ca i„ 0 ro Cpi ai U] cn R U E a3 u °- ''a E R m E c ti C f2 m 0 . 0 ° 0 • p 7 '0 CC 0 p E o rj v E E 2 7 p R O E I fn i0] mSU c,.. CJC. u, m D C7 m 3 a CZ T ti III C C sm. 0. 7 Z U �a. ^ 7 0 U p U U C 7 U U VJ 03 C r L U �e y tom. 2� 0 U iC C 7 7 = V ` c3 O , U 0. U C a) h > U aN v, •2 H U 9 v, C uo N V p I y E p m ` C a F =° n F F M I 1 I ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I i i I HAYUl IL & . ENV &ASSOCIATES,L.L.C. ICertified Public Accountants I Consultants REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON ICOMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS I To the Board of Commissioners I Omaha Douglas Public Building Commission Omaha,Nebraska I We have audited the financial statements of the governmental activities and each major fund of the Omaha Douglas Public Building Commission(the Commission),as of and for the year ended June 30,2010,which collectively comprise the Commission's basic financial statements and have issued I our report thereon dated October 26, 2010. 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 Ithe United States. Internal Control Over Financial Reporting I In planning and performing our audit, we considered the Commission'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 . I effectiveness of the Commission's internal control over financial reporting.Accordingly,we do not express an opinion on the effectiveness of the Commission's internal control over financial reporting. IA 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, I 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 Icorrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described I in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses.We did not identify any deficiencies in internal control over financial reporting that we Iconsider to be material weaknesses, as defined above. _I Westroads Pointe 11015 N.98th St. I Suite 200 I Omaha,NE 68114 I T 402.390.2480 I F 402.390.0885 www.hayes-cpa.com 0 • p 7 '0 CC 0 p E o rj v E E 2 7 p R O E I fn i0] mSU c,.. CJC. u, m D C7 m 3 a CZ T ti III C C sm. 0. 7 Z U �a. ^ 7 0 U p U U C 7 U U VJ 03 C r L U �e y tom. 2� 0 U iC C 7 7 = V ` c3 O , U 0. U C a) h > U aN v, •2 H U 9 v, C uo N V p I y E p m ` C a F =° n F F M I 1 I ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I I . i However,we identified certain deficiencies in internal control over financial reporting,described in the accompanying schedule of findings and responses that we consider to be a significant deficiency I in internal control over financial reporting. 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 merit attention by those charged with governance. Ito Compliance and Other Matters I As part of obtaining reasonable assurance about whether Commission'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 1 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. IThis report is intended solely for the information and use of management, the Board of Commissioners, others within the entity, and federal awarding agencies and pass-through entities Iand is not intended to be and should not be used by anyone other than these specified parties. i'`/14 o•60c" 1, L.L. L. IHayes&Associates, L.L.C. Omaha,Nebraska IOctober 26, 2010 I ' I 1 I I - 38 - ting.Accordingly,we do not express an opinion on the effectiveness of the Commission's internal control over financial reporting. IA 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, I 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 Icorrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described I in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses.We did not identify any deficiencies in internal control over financial reporting that we Iconsider to be material weaknesses, as defined above. _I Westroads Pointe 11015 N.98th St. I Suite 200 I Omaha,NE 68114 I T 402.390.2480 I F 402.390.0885 www.hayes-cpa.com 0 • p 7 '0 CC 0 p E o rj v E E 2 7 p R O E I fn i0] mSU c,.. CJC. u, m D C7 m 3 a CZ T ti III C C sm. 0. 7 Z U �a. ^ 7 0 U p U U C 7 U U VJ 03 C r L U �e y tom. 2� 0 U iC C 7 7 = V ` c3 O , U 0. U C a) h > U aN v, •2 H U 9 v, C uo N V p I y E p m ` C a F =° n F F M I 1 I ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I 1 I I Omaha Douglas Public Building Commission SCHEDULE OF FINDINGS AND RESPONSES For the year ended June 30, 2010 ' 2010-1 Adjusting Journal Entries I Condition: The Commission's financial statements originally contained misstatements related to the recording of accounts payable, grant receivables and revenues, and capital assets. I Criteria: An entity should establish internal controls over financial reporting to ensure the basic financial statements are free of material misstatements. These controls should include ensuring that information necessary to record year-end adjustments is captured and recorded accurately and Icompletely. Cause: During the current year,the Commission was awarded pass-through grant funds from the I City of Omaha. The Commission does not typically receive grant funding. A receivable and revenue were recorded upon the grant award and not based upon actual activity or earnings of the grant revenue. The Commission's controls improperly identified certain invoices as payable as of I yearend and did not properly identify other invoices as payable. The Commission recorded the write off of capital assets to income statement accounts instead of accumulated depreciation. I Effect: Audit adjusting entries were required to correct misstatements in the Commissions' financial statements. I Recommendation: We recommend that the Commission review its treatment and recording of grant awards and,if considered necessary,obtain the advice of a consultant when recording non-routine or unusual transactions. We also recommend that the Commission revisit its controls related to , ' reviewing yearend invoices for inclusion as accounts payable. The Commission should consider analytically comparing year end balances to the prior period to verify that all appropriate year end journal entries appear to be posted. Official's Response: We have reviewed the Audit Finding for fiscal year 2009-10 related to adjusting journal entries and will take the following action to correct and improve our process: IIn addition to manual review of every individual invoice and requisition received after the close of the fiscal year, additionally a select sample of payments made during the first quarter will be Ireviewed to verify substantive dollar amount payables will not be overlooked. With the award of our first grant, the Fiscal Administrator was unaware that revenue was to be I reported only upon the release of funds and so reported a receivable based upon the award of the grant. In the future this will be added to our procedures. New non-routine procedures,including the write off of capital assets,will be included in the scope of work done by the resource personnel hired Ito review the financial close process. - 39 - I ti III C C sm. 0. 7 Z U �a. ^ 7 0 U p U U C 7 U U VJ 03 C r L U �e y tom. 2� 0 U iC C 7 7 = V ` c3 O , U 0. U C a) h > U aN v, •2 H U 9 v, C uo N V p I y E p m ` C a F =° n F F M I 1 I ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I 1 1 , Omaha Douglas Public Building Commission SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS For the year ended June 30, 2010 • Item 1: Financial Close and Reporting Process Condition: The Commission's Fiscal Administrator is currently responsible for the preparation of the financial statements and footnotes at year end. As part of this responsibility,this employee also prepares and posts all year and adjusting journal entries. During the current year, it was noted that several errors were made by the Fiscal Administrator in determining the year-end adjustments and several required disclosures, including disclosures for cash,investments,prior period adjustments,lessor disclosures and ' disclosures pertaining to defeased debt, were omitted. Additionally, we noted that several journal entries prepared and posted by the Fiscal Administrator to record accounts payable at year end lacked sufficient detailed support to allow identification of the items included in the ' entry. Official's Response: We have reviewed the Audit Finding for fiscal year 2008-09 related to 1 the financial close and statement preparation and will take the following action to correct and improve our process: ' Financial statement preparation is an ever-evolving art, and, prior to this audit, involved some prior discussion with the auditor concerning current requirements and other technical matters that may have been modified or added since the last audit. The Fiscal Administrator 1 was unaware of some of the requirements for the Notes disclosure to appear on the statements. Subsequently,through discussions with Hayes and Associates during the audit, the firm offered to provide the Commission access to their tools and checklists for changes to ' disclosure requirements,especially those that have been recently updated.Those items will be made available prior to June 30 of each year for which the firm performs the audit. The need to acquire and/or maintain the referenced material regardless of the audit firm employed will be noted on the Commission's preparation procedures. The Commission will consider the most effective and practical method to review the 1 financial close and reporting process prior to the beginning of the audit. While firms previously employed by the Commission have pointed out any such discrepancies as noted in the finding that may have occurred,without comment,any necessary corrections were made at that time. We are aware that the process is complex and detailed and may now require a quality review prior to the audit. There are several options to consider, including the ones cited by the firm.We will select one that we believe is appropriate prior to the finalization of future financial statements. The back-up detail of accounts payable accrual entry referenced in the findings will be expanded in the future. - 40 - 1 03 C r L U �e y tom. 2� 0 U iC C 7 7 = V ` c3 O , U 0. U C a) h > U aN v, •2 H U 9 v, C uo N V p I y E p m ` C a F =° n F F M I 1 I ¢ o aw. c ] o. On ° c Cl)w II] Ell X ° o 2 z C7 = . 5 ¢ E o R c T 8v ' c Z U UR c w ce Z ' z z z U , 5 '> � . zoO zJ6i ° ,t2, FEoa. . 0E- o z k`G .. 0 o u c F Zr = o.7, aA ,2 o w w w E Fo- z o 0 I Lu a c 0 w m m U F X X O a U u= 00 w a E co 2o :.' .= v .k. y , - a • o E 3 n = ` F^F " - y c c2E ; zwu '€ F a ` O - 2 N F i .2 ‘` §U 0 ¢ c ' Sa = Om ° �¢ ¢ � 00 cC ti Z F I 1 1 Omaha Douglas Public Building Commission SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS -CONTINUED For the year ended June 30, 2010 Follow Up: The Commission prepared its financial statements and related footnotes for the year ended June 30, 2010. The Commission also employed a consultant to answer 1 financial statement and footnote related questions. It appears that the Commission has adequately resolved this deficiency. 1 1 1 1 1 1 1 1 1 1 i 1 -41 - I 1 I z. • 1 . . O 0 o ,y aCr (-A r r' ra- � (c N �� . H. xo w` ft oye c 0 0. u i (_ 1 1 1 1 1 1 1 1 1 i 1 -41 - I 1