RES 2009-1113 - Independent auditor's report of examination Interoffice Communication
0VEr 17 ri, C'
September 17,2009
TO Buster Brown, City Clerk
FROM (2 <Z
/244-A
Al Hennk, City Comptroller
SUBJECT Independent Auditor's Report of Examination
Attached, for your files are three(3)copies of the general audit report prepared by KPMG for
the year ended 2008
CAE/sb
Attachments
KPMG
CITY OF OMAH et, NEBRASKA
M
Basic Financial Statements and k-133 Reports ►�L,.r
December 31, 2008 2tv
(With Independer+ Auditors' Report Thereon)
CITY OF OMAHA,NEBRASKA
icaes
t
Table of Contents
Page
Independent Auditors Report 1 —2
Management s Discussion and Analysis 3 — 14
Basic Financial Statements
Governmentwide Financial Statements
Statement of Net Assets 1
Statement of Activities 16
Fund Financial Statements
Governmental Funds
Balance Sheet 17
Statement of Revenues Expenditures and Changes in Fund Balances 18
Reconciliation of the Statement of Revenues Expenditures and Changes in Fund
Balances to the Governmentwide Statement of Activities—Governmental Activities 19
Proprietary Funds
Statement of Fund Net Assets 20
Statement of Revenues Expenses and Changes in Fund Net Assets 21
Statement of Cash Flows—Proprietary Funds 22
Fiduciary Funds
Statement of Fiduciary Net Assets—Fiduciary Funds 23
Statement of Changes in Fiduciary Net Assets—Pension Trust Funds 24
Notes to Basic Financial Statements 25—81
Required Supplementary Information(Other than MD&A)
Schedule of Revenues Expenditures and Changes in Fund Balances—Budget and Actual—
General Fund 82
Notes to Schedules of Revenues Expenditures and Changes in Fund Balances—Budget and
Actual—General Fund 83—84
Schedule of Funding Progress and Employer Contributions
Civilian Plan 85
Uniformed Plan 86
Postretirement Obligation 87
CITY OF OMAHA,NEBRASKA
Table of Contents
Page
Single Audit Section
Schedule of Expenditures of Federal Awards 88
Notes to Schedule of Expenditures of Federal Awards 89
Independent Auditors 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 90—91
Independent Auditors Report on Compliance with Requirements Applicable to Each Major
Program and on Internal Control over Compliance in Accordance with
OMB Circular A 133 92—93
Schedule of Findings and Questioned Costs 94—97
KPMG
KPMG LLP
Suite 1501 Suite 1600
Two Central Park Plaza 233 South 13th Street
Omaha NE 68102 Lincoln NE 68508 2041
Independent Auditors'Report
The Honorable Mayor and Members
of the City Council
City of Omaha Nebraska
We have audited the accompanying financial statements of the governmental activities the business type
activities, the discretely presented component unit, each major fund and the aggregate remaining fund
information of the City of Omaha Nebraska (the City) as of and for the year ended December 31 2008
which collectively comprise the City's basic financial statements as listed in the table of contents These
financial statements are the responsibility of the management of the City Our responsibility is to express
opinions on these financial statements based on our audit We did not audit the financial statements of
Metropolitan Entertainment and Convention Authority (MECA) which represent 100% of the total assets
and revenues of the discretely presented component unit Those financial statements were audited by other
auditors whose report thereon has been furnished to us and our opinion insofar as it relates to the amounts
included for MECA is based on the report of the other auditors
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States Those standards require that we plan and perform
the audit to obt iin reasonable assurance about whether the financial statements are free of material
misstatement The financial statements of MECA were not audited in accordance with Government
Auditing Standards An audit includes consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the City s internal control over fmancial reporting
Accordingly, we express no such opinion An audit also includes examining on a test basis evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management 3s well as evaluating the overall financial statement
presentation We believe that our audit and the report of other auditors provide a reasonable basis for our
opinions
In our opinion based on our audit and the report of other auditors the financial statements refened to
above present fairly in all material respects, the respective fmancial position of the governmental
activities, the business type activities the discretely presented component unit, each major fund and the
aggregate remaining fund information of the City of Omaha Nebraska as of December 31 2008 and the
respective changes in financial position and cash flows where applicable thereof for the year then ended
in conformity with U S generally accepted accounting principles
As described in note 1 to the basic financial statements the City adopted the provisions of Governmental
Accounting Standards Board (GASB) Statement No 50 Pension Disclosures an amendment of
GASB Statements No 25 and No 27
KPMGLL US Imt di bltyp t hp ReUS
m mb t m i KPMG I t I I Sw p t
In accordance with Government Auditing Standards we have also issued a report dated August 26 2009
on our consideration of the City s internal control over financial reporting and on our tests of its
compliance with certain provisions of laws regulations contracts and grant agreements and other matters
The purpose of that report is to describe the scope of our testing of internal control over financial reporting
and compliance and the results of that testing and not to provide an opinion on the internal control over
financial reporting or on compliance That report is an mtegral part of an audit performed in accordance
with Government Auditing Standards and should be considered in assessing the results of our audit
Management's discussion and analysis on pages 3 through 14 and the Required Supplementary
Information on pages 82 through 87 are not a required part of the basic financial statements but are
supplementary information required by U S generally accepted accountmg principles We have applied
certain limited procedures which consisted principally of inquiries of management regaiding the methods
of measurement and presentation of the required supplementary information However, we did not audit
the information and express no opmion on it
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City s basic financial statements The accompanymg schedule of expenditures of federal
awards on page 88 is presented for purposes of additional analysis as required by U S Office of
Management and Budget Circular A 133 Audits of States Local Governments and Non Profit
Organizations and is not a required part of the basic financial statements The schedule of expenditures of
federal awards has been subjected to the auditing procedures applied in the audit of the basic financial
statements and in our opinion is fairly stated in all material respects, in relation to the basic financial
statements taken as a whole
KePtil(ez• LCP
Omaha Nebraska
August 26 2009
2
CITY OF OMAHA,NEBRASKAj
Management s Discussion and Analysis �
;:7".
Year ended December 31 2008
(Unaudited)
The discussion and analysis of the City of Omaha s (the City)financial performance provides an overall review
of the City s financial activities for the fiscal year ended December 31 2008 The intent of this discussion and
analysis is to look at the City s financial performance as a whole Readers should also review the basic financial
statements to enhance their understanding of the City s financial performance
Financial Highlights for Fiscal Year 2008
• The assets of the City on a government-wide basis excluding component units,exceeded its liabilities at the
close of fiscal year 2008 by$574 4 million(net assets) Of this amount $23 4 million is unrestricted while
$531 6 million is invested in capital assets net of related debt and $19 4 million is restricted for specific
purposes
• The City s total net assets decreased by $22 7 million from the prior year Of this amount $16 9 million
was a decrease m governmental activities and $5 8 million was a decrease in business type activities The
decrease in net assets related to governmental activities is primarily attnbutable to current year increases
for net pension and postretirement benefits obligations in the amount of$39 9 million The decrease in
business type activities is pnmanly attributable to the loss by the Convention Center Hotel in the amount
of$1 4 million and the loss by the Sewer Fund in the amount of$2 6 million
• As of December 31 2008 the City's governmental funds reported combined ending fund balances of
$77 6 million a decrease of$31 8 million in comparison with the prior year Construction of capital assets
account for $25 8 million of this reduction and non major special revenue funds accounted for a $9 6
million reduction These decreases were offset by increases in the General Fund balance of$2 7 million
and the major Debt Service Fund balance of$2 5 million Of the combined governmental funds ending
fund balances approximately 42%,or$32 6 million is unreserved
• The general fund on a current fiscal resources basis reported a shortfall of revenues over expenditures
lapsed encumbrances and transfers of$ 8 million Revenues above budget in the amount of$3 8 million
and expenditures over budget lapsed encumbrances a shortfall in the initial credit and year end transfers
in the amount of$1 9 million account for a 2008 year end carryover reserve of$1 9 million
• At the end of the current fiscal year the unreserved fund balance for the general fund was $28 9 million or
9 3%of general fund expenditures
• The City s bond rating from Standard & Poor s was AAA and Moody s Investors Service rated the City s
bonds AA1
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City s basic financial statements I he
City s basic financial statements comprise three components (1) govemmentwide financial statements (2) fund
financial statements and (3) notes to the financial statements This report also contains other supplementary
information in addition to the basic financial statements themselves
1 he basic financial statements include two kinds of statements that present different views of the City
• The first two statements are governmentwide statements that provide both long term and short term
information about the City s overall financial status
3 (Continued)
CITY OF OMAHA,NEBRASKA
Management s Discussion and Analysis vz" ,•
Year ended December 31 2008
(Unaudited)
• The remaining statements are fund financial statements that focus on individual parts of the City s
government reporting the City s operations in more detail than the governmentwide statements
— Governmental fund statements tell how general government services like public safety were financed
in the short term as well as what amounts remain for future spending
— Propnetary fund statements offer short term and long-term financial information about the activities
the government operates like a business such as the City's sewage treatment plants or convention
center hotel
— Fiduciary fund statements provide information about financial relationships in which the City acts
solely as a trustee or agent for the benefit of others to whom the pertaining resources belong
The financial statements also include notes that explain some of the information in the financial statements and
provide more detailed data The statements are followed by a section of required supplementary information that
further explains and supports the information in the financial statements
Governmentwide Financial Statements
The governmentwide financial statements are designed to provide readers with a broad oserview of the City s
finances using accounting methods similar to those used by private sector companies The statement of net assets
and the statement of activities which are the gover nnentwide statements include the City s assets and liabilities
using the accrual basis of accounting which is similar to the accounting used by most private sector companies
All changes in net assets are reported as soon as the underlying event giving nse to the change occurs regardless
of the timing of related cash flows Thus revenues and expenses are reported in this statement for some items
that will only result in cash flows in future fiscal periods (e g uncollected taxes and earned but unused vacation
leave)
These two governmentwide statements report the City s net assets and how they have changed Net assets—the
difference between the City s assets and liabilities—is one way to measure the City s financial health or financial
position Over time increases or decreases in the City s net assets are an indicator of whether its financial health
is improving or deteriorating Other nonfinancial factors, such as changes in the City s property tax base and the
condition of the City s roads and other infrastructure, may need to be considered to assess the overall health of
the City
In the statement of net assets and the statement of aLtivities the City is divided into three categories
Governmental Actnihes — Most of the City's basic services are included here such as the police fire
public works parks and recreation and general administration departments Taxes and intergovernmental
revenues principally support these functions
Business-Type Activities — The City charges fees to customers in order to cover the costs of certain
services it provides The City s sewer system air quality control enforcement compost operation marina
golf courses tennis operation parking facilities printing services river plaza facility citywide sports and
hotel are included here
4 (Continued)
CITY OF OMAHA,NEBRASKA �L�+A
Management's Discussion and Analysis sitz,
r<<r f
Year ended December 31 2008
(Unaudited)
Component Unit — The City includes one separate legal entity in its report the Metropolitan
Entertainment and Convention Authority Although legally separate this component unit is important
because the City is financially accountable for it and provides debt service funding for the arena and
convention center(see note 1)
The governmentwide financial statements can be found on pages 15 and 16 of this report
Fund Financial Statements
The fund financial statements provide more detailed information about the City s most significant funds—not the
City as a whole Funds are accounting mechanisms that the City uses to keep track of specific sources of funding
and spending for particular purposes The City Charter state law and bond covenants require some funds The
City Council or Administration establishes other funds to control and manage money for particular purposes or to
show that the City is properly using certain taxes and grants
The City has three kinds of funds
Governmental funds—Most of the City s basic services are included m governmental funds which focus
on (1)the floes in and out of cash and other financial assets that can readily be converted to cash and
(2)the balances remaining at year end that are available for spending These funds are reported using the
modified accrual accounting basis and a current financial resources measurement focus Consequently the
governmental fund statements provide a detailed short term view that helps the reader determine whether
there are more or fewer financial resources that can be spent in the near future to finance the City s
programs The relationship between governmental activities(reported in the statement of net assets and the
statement of activities) and governmental funds is described in a reconciliation that follows the
governmental fund financial statements
The City maintains 86 governmental funds Information is presented separately in the governmental fund
balance sheet and in the governmental fund statement of revenues expenditures and changes in fund
balances for the general fund and debt service fund, which are considered to be major funds Data from the
other governmental funds are combined into a single aggregated presentation
The City adopts an annual budget for the general fund as required by the City Charter A budgetary
comparison statement is presented foi the general fund using the City s budgetary basis of accounting This
statement reflects the following (a)the original budget (b)the final budget as amended (c)actual results
and(d)the variance between the final budget and actual results Because the budgetary basis of accounting
differs from the modified accrual basis used in the funds statements a reconciliation is provided at the end
of the statement
The basic governmental fund fmancial statements can be found on pages 17 through 19 of this report
Propnetary funds — Services for which the City charges customers a fee are generally reported in
proprietary funds Proprietary funds like the governmentwide statements provide both short and
long term financial information The City maintains 11 enterprise funds which are a type of proprietary
fund Enterprise funds are used to report the same functions presented as business type activities in the
governmentwide financial statements The City uses enterprise funds to account for its sewer system air
5 (Continued)
CITY OF OMAHA,NEBRASKA
Management's Discussion and Analysis v..
Year ended December 31 2008
(Unaudited)
quality control enforcement compost operation marma golf courses tennis operation river plaza facility
parking facilities pnntmg services,citywide sports and hotel
The basic proprietary fund financial statements can be found on pages 20 through 22 of this report
Fiduciary funds—The City is the trustee or fiduciary for certain donated funds It is also responsible for
other assets that because of a trust arrangement can be used only for the trust beneficiaries The City is
responsible for ensuring that the assets reported in these funds are used for their intended purpose These
activities are reported in a separate statement of fiduciary net assets The City excludes this activity from
its governmentwide financial statements because the City cannot use these assets to finance its operations
The accounting used for fiduciary funds is much like that used for proprietary funds
The fiduciary fund financial statements can be found on pages 23 and 24 of this report
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the
governmentwide and fund financial statements The notes to the financial statements can be found on pages 25
through 81 of this report
Other Information
In addition to the basic financial statements and accompanying notes this report also presents certain required
supplementary information concerning the City's 2008 budget information and the City s progress in funding its
obligation in both pension and other postemployment benefits Required supplementary information can be found
on pages 82 through 87 of this report
City Governmentwide Financial Analysis
As noted earlier net assets (assets over liabilities) may serve over time as a useful indicator of a government s
financial position In the case of the City assets exceeded liabilities by $575 million at the close of fiscal year
2008 By far the largest portion of the City s net assets (93%)reflects its investment in capital assets (e g land
building equipment and infrastructure) less accumulated depreciation, and less any related outstanding debt
used to acquire those assets The City uses these assets to provide services to its citizens and consequently these
assets are not available for future spending The resources needed to repay the debt related to these capital assets
must be provided from other sources
6 (Continued)
CITY OF OMAHA,NEBRASKA its
tali
Management s Discussion and Analysis vet it.
.
Year ended December 31 2008 1
(Unaudited)
The following table reflects the condensed summary of net assets(in millions)
City of Omaha
Summary of Net Assets
Governmental Business type Total pnmary
activities activities government
2008 2007 2008 2007 2008 2007
Current and other assets $ 267 276 61 76 328 352
Capital assets 1 005 932 484 477 1 489 1 409
Total assets $ 1 272 1208 545 553 1 817 1 761
Current and other liabilities $ 41 41 10 9 51 50
Lone term liabilities 920 839 271 275 1 191 1 114
Total liabilities 961 880 281 284 1 242 1 164
Net assets
Invested in capital assets net of
related debt 297 261 236 222 333 483
Restricted net Issets 15 17 4 7 19 24
Unrestricted net assets (I) 50 24 40 23 90
Total net assets 311 328 264 269 575 597
Total liabilities and
net assets $ 1 272 1 208 545 553 1 817 1 761
Approximately 3% or $19 million of the City s net assets represent resources that are subject to external
restrictions on their use The remaining balance of unrestricted net assets 4% or $23 million may be used to
meet the government's ongomg obligations to citizens and creditors
Governmental Activities
Net assets of the City s governmental activities decreased $17 million(5%)to$311 million This deficit does not
mean that the City does not have the resources available to pay its current liabilities Rather it is the result of
having long term commitments that are greater than current available resources Specifically the City did not
included in past annual budgets the full amounts needed to finance future liabilities arising from compensated
absences($65 million) Civilian employees Policemen s and Firemen s net pension obligation($76 million)and
post employment benefits ($36 million) The City will include these amounts in future years as they become
due
Business-Type Activities
The net assets of the City s business type activities decreased from approximately$269 million to $264 million
The City generally can only use these net assets to finance the continuing operation of its enterprise operations A
key element of this decrease is the$2 6 million loss incurred by the Sewer Revenue Fund
7 (Continued)
CITY OF OMAHA,NEBRASKA �� 44
�
Management s Discussion and Analysis c;:,
Year ended December 31 2008
'*3' 1
(Unaudited)
The following table shows the revenue and expense of the governmental and business type activities
at]of Omaha a Changes in Net Assets
(in millions)
Governmental Business type Total pnmary
actnrties activities government
2008 2007 2008 2007 200: 2007
Revenues
Program revenues
Charges for services $ 56 5 619 60 3 56 9 116 8 118 8
Operating grants and contributions 82 6 76 4 — — 82 6 76 4
Capital grants and contnbutions 30 1 29 6 4 5 4 5 34 6 34 1
General revenues
Sales and use tax 124 5 116 1 124 5 116 1
Property tax 1190 1149 — — 1190 1149
Other taxes 49 3 45 3 — — 49 3 45 3
Unrestnctcd investment eammgs 4 7 6 7 1 6 2 8 6 3 9 5
Other — (0 1) — — — (0 I)
Total revenues 466 7 450 8 66 4 64 2 533 1 515 0
Expenses
General government 95 9 93 3 — — 95 9 93 3
Public safety 205 8 182 9 — — 205 8 182 9
Transportation sernces 60 7 33 2 — — 60 7 53 2
Other public services 17 4 15 7 — — 17 4 10 7
Community development 25 7 19 5 — — 25 7 19 5
Culture and parks 41 0 44 9 — — 41 0 44 9
Interest on long term debt 36 5 34 7 — — 36 5 34 7
Convention Center Hotel — — 11 1 11 3 11 1 11 3
Sewage treatment — — 49 5 45 5 49 5 45 5
Other — — 122 114 122 114
Total expenses 483 0 444 2 72 8 68 2 555 8 512 4
Increase(decrease)in net assets
before transfers (16 3) 6 6 (6 4) (4 0) (22 7) 2 6
Transfers (0 6) 8 4 0 6 7 1 — 15 5
Increase(decrease)in
net assets (16 9) 15 0 (5 8) 3 1 (22 7) 18 1
Net assets at beginning of year 327 4 312 4 269 7 266 6 597 1 579 0
Net assets at end of year $ 3105 327 4 263 9 269 7 374 4 597 1
GO%ernmental Activities
The City s total revenues from governmental activities were $466 7 million for the fiscal year ended
December 31 2008 The largest source of revenue($124 5 million for fiscal year 2008) for the City is sales and
use tax Net sales and use tax increased by$8 4 million(7 2%)during 2008
In 2008 property tax revenue increased by $4 1 million when compared to 2007 The City has maintained the
same real estate tax rate (43 387 cents per $100 of assessed value) since 2002 Property tax valuations for 2008
increased 4 7%when compared to 2007 valuations
8 (Continued)
CITY OF OMAHA,NEBRASKAi
Management's Discussion and Analysis
rLS i r,n
Year ended December 31 2008
(Unaudited)
The City s expenses for governmental activities cover a wide range of services with 43% or$205 8 million for
fiscal year 2008 related to public safety and 13% or $60 7 million, for fiscal year 2008 for transportation
services Overall the expenses for governmental activities increased by 10%or$38 8 million in 2008,which can
be largely, attributed to a$22 9 million increase m public safety expenses $7 5 million increase in transportation
services expenses and$6 2 million increase in community development expenses
Business-Type Activities
Net assets of the City's business type activities decreased by $5 8 million Presented below is the change of net
assets by the major enterprise funds and the other nonmajor enterprise funds
Fund Amount
Convention Center Hotel $ (1 398 702)
Parkmg Facilities (684 343)
Sewer Revenue (2 581 570)
Other nonmajor enterprise funds (1 144 991)
The convention center hotel fund began operations in April 2004 The Cit) believes that future operations of the
Hotel will eliminate this deficit Annual appropnations from the City will subsidize any debt service shortfall
The parking facilities fund was established as a tool to manage the City s eight parking structures and various
surface lots throughout the City Lease purchase debt has been issued to finance the construction of the parking
structures Annual appropriations from the City's general fund to subsidize the payment of this debt will
eliminate this deficit
In May 2009 the City Council enacted an ordinance increasing sewer use fees 9% annually beginning in 2010
through 2014 The action will eliminate future deficits and provide funding for the sewer system s capital
improvements
The City s enterprise operations are reviewed on an ongoing basis Revenues and expenses are adjusted as
necessary to maintain an adequate amount of working capital Annual appropriations may also be used to
subsidize these funds The City has decided to account for these activities by the use of enterprise accounting to
better identify the cost of the services and for better management control
Financial Analysis of the Goi ernment's Funds
As noted earlier the Cit) uses fund accounting to ensure and demonstrate compliance with finance related legal
requirements
Governmental Funds
The focus of the City s governmental funds is to provide information on near term inflows outflows and
balances of spendable resources Such information is useful in assessing the City s financing requirements In
particular unreserved fund balances may serve as a useful measure of a government s net resources available for
spending st the end of the fiscal year except where prohibited by the City Charter For the fiscal year ended
9 (Continued)
CITY OF OMAHA,NEBRASKA /
Management s Discussion and Analysis w_
Year ended December 31,2008 `f3
(Unaudited)
December 31 2008 the governmental funds reported combined ending fund balances of $77 5 million a
decrease of$31 8 million in comparison with the prior year The construction of capital assets caused a reduction
of fund balance in capital funds of 26 1 million and an increase in deferred revenues in the special revenue funds
of$14 6 million accounted for the remainder of this reduction Increases in the General Fund and major Debt
Service Fund in the aggregate amount of$5 2 million offset this reduction
Approximately 42% or $32 6 million of the combined fund balance constitutes unreserved fund balance which
generally is available for spending at the City s discretion The remainder of the fund balance is reserved to
indicate that it is not available for new spending because it has already been committed to
• Liquidate contracts and purchase orders of the prior period($15 6 million)
• Pay debt service($26 0 million)
• Provide income for the purpose of maintaining the City s coin collection and a variety of other restricted
purposes($2 8 million)
The general fund s unreserved fund balance at December 31 2008, not designated for a specific purpose is
$28 9 million The General Fund is the City s chief operating fund As a measure of the general fund s hgwdity
it may be useful to compare both the unreserved fund balance and the total fund balance to total fund
expenditures The unreserved fund balance represents 11% of the total fund balance to total fund expenditures
while the total fund balance represents 12% of that same amount The total fund balance of the general fund
increased by$2 7 million for fiscal year 2008 Tor budgeting purposes only,the 2007 and 2008 budget surpluses
of$3 9 million and$1 9 million respectively are available for appropriation for governmental use
The other major governmental fund is the Debt Service Fund The Debt Service Fund has a total fund balance of
$19 0 million all of which will be used to for either payment of debt service on the City s general obligation debt
or payment of debt issuance costs
Proprietary Funds
The City s proprietary funds provide the same type of information found m the governmentwide financial
statements but in more detail
10 (Continued)
CITY OF OMAHA,NEBRASKA
Management s Discussion and Analysis v}
Year ended December 31,2008 •" ;
(Unaudited)
Net assets of the Convention Center Hotel Fund Parking Facilities Fund, Sewer Revenue Fund and other
enterprise funds amounted to ($25 2)million ($5 8)million $291 0 million and $3 9 million respectively at
December 31 2008 Additional discussion concerning the finances of these funds has already been addressed in
the discussion of the City's business type activities
General Fund Budgetary Highlights
December 31 2008
(In millions)
Ongrnal Final
budget budget Actual
Res enues
Taxes $ 223 6 223 6 225 6
Intergovernmental 8 9 8 9 9 4
Other 33 3 33 3 34 6
Total 265 8 265 8 269 6
Expenditures lapsed encumbrances
and transfers 269 0 269 0 270 9
Total 269 0 269 0 270 9
Changes in fund balance $ (3 2) (3 2) (1 3)
There are three types of budget transfers each requiring a successive level of authority First the Mayor may at
any time transfer an unencumbered appropriation balance or portion thereof between appropriations of the same
division Second transfers between divisions in the same department may be authorized by resolution of the City
Council Third, transfers between departments/agencies may be authorized by ordinance of the City Council In
2008 one transfer occurred It appropriated funds from the wage adjustment to the Fire Department to fund
compensated leave payoffs
Significant variances between the general fund s actual revenues and expenditures and the final amended budget
are summarized as follows
• Sales tax revenue was $ 5 million below budget
• Interest earnings was$6 million below budget
• Business taxes were$1 2 million above budget
• Charges for services were$1 5 million above budget
• The Mayor s Office City Clerk Law Human Rights and Relations Public Works Library departments
Retiree Benefits Outside Agencies and Contingency&Other collectively were$5 6 million below budget
11 (Continued)
CITY OF OMAHA,NEBRASKA
Management s Discussion and Analysis14„4ti
Year ended December 31 2008
(Unaudited)
• City Council Human Resources Finance Planning Parks Recreation and Public Property Fire and Police
Departments were$6 7 million above budget
Capital Asset and Debt Administration
Capital Assets
The City s investment in capital assets for its governmental and business type activities as of December 31 2008
is $1 5 billion (net of accumulated depreciation) This investment in capital assets includes land buildings
improvements, machinery and equipment streets bridges, storm sewers sanitary sewers event facilities and
wastewater treatment plants The total change in the City s investment in capital assets for the current year was a
net increase of 7% (an increase of 7 8% for governmental activities and an increase of 1 6% for business type
activities)
Cib of Omaha s Capital Assets
(Net of accumulated depreciation)
(In millions)
Governmental Business type
activities activities Total
2008 2007 2008 2007 2008 2007
{mod S 1330 1250 52 50 1382 1300
Cultural assets 5 8 5 8 0 5 0 5 6 3 6 3
Construction m progress 19 5 68 5 4s 9 32 2 65 4 100 7
Buildmgs 385 2 379 9 428 0 432 9 813 2 812 8
Machinery and equipment 23 0 18 3 4 9 6 2 27 9 24 s
Infrastructure 438 4 334 4 — 438 4 334 4
Total S 1 004 9 931 9 484 5 476 8 1 489 4 1 408 7
Major capital asset events during 2008 included the following
• Construction began the L Street Interstate 80 to 126th Project current year expenditures were$4 1 million
• Construction continued on the Harrison Street 471 to 71" streets current year expenditures were
$4 3 million
• Construction continued on the City s sewer system including the Combined Sewer Overflow Program with
capital outlays of$22 4 million
• Construction continued on the Saddlebrook Community Center/Library Project current year expenditures
were$4 1 million
• Construction continued on the Americans with Disabilities Street Ramp Project current year expenditures
were$1 5 million
• Construction began on the Downtown Ballpark Project current year expenditures were$10 6 million
• Construction continues on the City s Public Safety Training Center current year expenditures were
$3 8 million
12 (Continued)
CITY OF OMAHA,NEBRASKA
Management s Discussion and Analysis p c"+�
YLt
Year ended December 31 2008
(Unaudited)
• The City provided $1 8 million of fundmg for the seating expansion project on the Qwest Convention
Center and Arena
• Construction in progress city wide totaled$65 4 million
• Annual city wide depreciation expense for governmental activities in 2008 amounted to$31 9 million
Additional information on the City s capital assets can be found in note 10 to the financial statements on
pages 65 through 69 of this ieport
Long-Term Debt
At December 31, 2008 the City had total bonded debt outstanding of$977 2 million (including notes payable)
Of this amount $558 1 million is general obligation debt backed by the full faith and credit of the City
$165 2 million of revenue bonds secured solely by specified revenue sources $83 8 million of special obligation
bonds backed by a variety of revenue sources including sales tax and property tax $44 0 million of special tax
revenue bonds backed by a redevelopment property tax levy, $87 6 million of lease purchase bonds backed by
annual General Fund appropriations and$38 5 million of notes payable backed by a variety of revenue sources
G7ty of Omahas Outstanding Debt
(In millions)
Governmental Business type
activities activities Total
2008 2007 2008 2007 - - 2008 2007
General obligation bonds $ 558 1 536 8 — — 558 1 536 8
Revenue bonds 2 2 2 4 163 0 164 2 163 2 166 6
Special obligation bonds 64 5 58 7 19 3 19 9 83 8 78 6
Special tax revenue bonds 440 404 — — 440 404
Lease purchase bonds 41 3 37 4 46 3 47 9 87 6 85 3
Notes payable 3 6 3 3 34 9 37 1 s8 5 40 4
Total $ 713 7 679 0 263 5 269 1 977 2 948 1
During 2008 the City s total debt increased by $29 1 million (3%) In 2008 the City annexed 12 Sanitary
Improvement Districts (SID) At the time of annexation the City assumed all assets and debts of the annexed
areas Upon annexation the City assumed $37 7 million of SID debt The annexation of these areas accounts for
the increase
The City maintains a AAA rating from Standard&Poor s Corporation and a Aaa rating from Moody s Investors
Service on general obligation bonds In 2009 Standard & Poor s upgraded its rating of the Sewer Revenue
Bonds from Aa to Aa
Under the City s Home Rule Charter the total amount of general obligation indebtedness outstanding at any time
shall not exceed 3 5% of the actual value of taxable real and personal property in the City The debt margin as of
December 31 2008 is$388 8 million
13 (Continued)
CITY OF OMAHA,NEBRASKA �4W'
Management s Discussion and Analysis
in r��Cr-'�:
Year ended December 31 2008
(Unaudited)
Additional information on the City s long term debt can be found in notes 6 and 7 to the financial statements on
pages 40 through 55 of this report
Economic Factors and Next Year's Budgets and Rates
• The City s projected property tax base for 2010 is$26 9 billion This is a slight increase ON er 2009 of$364
million or 1 3% This includes revaluations of existing properties and new growth within the City No
annexations are planned in 2009
• Budget basis net Sales tax collections have increased by 4 4% and 2 4% over each of the past two years
respectively with current net collections through August 2009 showmg an increase over the same period m
2008 of 1 3%
• Overall general fund revenue collections for 2009 are projected to be $8 9 million below budget or 3 2%
due primarily Sales tax receipts
All of these factors were considered in preparmg the City s budget for the 2010 fiscal year
During 2008 the unreserved fund balance in the general fund was $28 9 million The City appropnated
$3 9 million of this amount for spending in the 2009 fiscal year budget and $1 9 million will be appropriated for
spending in the 2010 fiscal year budget This amount represents the 2007 and 2008 budget balance carried
forward The City Charter requires that the general fund budget balance as of the close of any particular fiscal
year shall be applied as general fund revenue in the budget for the fiscal year two years subsequent to that fiscal
y ear
Requests for Information
This fmancial report is designed to provide citizens taxpayers customers investors and creditors with a general
overview of the City s finances and to demonstrate the City s accountability for the funds it receives Questions
concerning any of the information provided in this report or requests for additional financial information should
be addressed to the City of Omaha Finance Department, Suite 1004 1819 Farnam Street Omaha NE 68183
14
CITY OF OMAHA NEBRASKA "f�
Statement of Net Assets . _�si-i
December 31 2008 ~ ;
Component
Primary gmernment unit
Governmental Business type
Assets ■ctnrties activities Total MECA
Cash and cash equivalents S 30 863 874 23 041 214 53 905 088 10 346 088
Pooled investments 25 413 441 6 690 323 32 103 764 14 476 883
Receivables(net of allowance for uncollectibles) 139 685 901 4 397 217 144 083 118 553 177
Due from other governments 56 972 034 53 224 57 025 258 —
Accrued interest 516 810 197 212 714 022 —
Inventories 647 796 791 553 1 439 349 —
Deferred charges and other assets 6 596 299 3 274 925 9 871 224 1 696 524
Restricted assets
Deposits with trustee 5 93 1 028 18 903 511 24 854 539 —
Pooled investments — 3 309 677 3 309 677 —
Capital tssets
Nondepremable 158 360 082 51 523 269 209 883 351 —
Depreciable 846 583 194 432 980 193 1 279 563 387 17 229 426
Total assets S 1 271 590 459 _ 545 162 318 1 816 752 777 44 302 098
Liabilities and Net Assets
Liabilities
Accounts payable and other S 31 316 143 6 157 079 37 473 222 1 734 675
Accrued interest payable 7 687 640 3 598 437 11 286 077 —
Due to other governments 1 698 364 — 1 698 364 —
Uneamed revenue 240 116 — 240 116 —
Long term liabilities
Net pension obligation 76 060 855 3 029 818 79 090 673 —
Post retirement benefit obligation 35 844 583 2 168 369 38 012 952 —
Other liabilities — — — 11 328 727
Compensated absences
Due within one year 3 398 254 90 038 3 488 292 —
Due m more than one year 64 366 820 1 876 961 66 443 781 —
Grants payable
Due within one year 2 600 000 — 2 600 000 —
Due m more than one rear 2 175 00C — 2 175 000 —
Claims and Judgments
Due wtthm one year 1 917 000 — 1917 000 —
Workers compensation and healthcare claims
Due within one year 8 407 778 579 396 8 987 374 —
Due in more than one year 12 498 908 683 124 13 184 032 —
Bonds notes and leases payable
Due within one year 37 411 854 6 133 039 43 544 893 1 002 226
Due m more than one year 675 180 528 236 990 661 932 171 189 6 814 757
Total liabilities 961 003 843 281 309 122 1 242 312 965 20 880 385
Net assets
Invested in capital assets net of related debt 295 937 697 235 667 494 531 605 191 9 412 444
Restricted for
Debt service — 4 248 375 4 248 375 —
Highway and streets 7 220 295 — 7 220 295 —
Perpetual care
Expendable 4 525 — 4 525 —
Nonexpendable 2 773 389 — 2 775 389 —
Community improvement and Judgments 3 189 598 — 5 189 598 —
Umvstncted (540 888) 23 937 327 23 396 439 14 009 269
Total net assets 310 386 616 263 853 196 574 439 812 23 421 713
Total liabilities and net assets S 1 271 590 459 545 162 318 1 816 752 777 44 302 098
See accompanying notes to basic financial statements
15
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2 N
CITY OF OMAHA NEBRASKA
Balance Sheet *ZS%
h ,7;4;li_cs'
Governmental Funds +ti
December31 2008
Debt Other Total
service governmental governmental
Assets General fund funds funds
Cash and cash equivalents S — 16 071 138 14 792 736 30 863 874
Investments 17 922 031 2 713 817 4 777 593 25 413 441
Receivables net of allowance for uncollectibles 78 555 523 50 034 634 11 095 744 139 685 901
Due from other governments 22 956 818 350 693 33 664 523 56 972 034
Accrued interest 473 762 — 43 048 516 810
Inventories 647 796 — — 647 796
Other assets 7612 — — 7612
Restricted assets
Deposits with trustee — — 5 951 028 5 951 028
Total assets $ 120 563 542 69 170 282 70 324 672 260 058 496
Liabilities and Fund Balances
Liabilities
Accounts payable and other $ 21 700 226 177 980 8 496 271 30 374 477
Due to other funds 887 673 — 53 994 941 667
Due to other governments 1698 364 — — 1 698 364
Untamed revenue — — 240 116 240 116
Deferred revenue 64 610 865 50 016 058 34 630 316 149 257 239
Total liabilities 88 897 128 50 194 038 43 420 697 182 511 863
Fund balances
Reserved for
Encumbrances 2 162 667 7 980 13 432 100 15 602 747
Inventories 647 796 — — 647 796
Debt service — 18 968 264 6 994 290 25 962 554
Perpetual care — — 2 775 389 2 775 389
Unreserved reported in
General fund 28 853 951 — — 28 855 951
Special revenue funds — — 19 190 703 19 190 703
Capital projects funds — — (15 493 032) (15 493 032)
Permanent funds — — 4 325 4 525
fatal fund balances 31 666 414 18 976 244 26 903 975 77 546 633
Total liabilities and fund balances $ 120 563 342 69 170 282 70 324 672
Amounts reported for governmental activities in the statement
of net assets are different because
Capital assets used in governmental activities are
not financial resources and therefore are not
reported in the funds 1 004 943 276
Revenues earned during the current period are not
available as resources and therefore are recognized
as deferred revenue in the funds 149 257 239
Bond costs of issuance are capitalized at the
govemmentwtde level and amortized over the life of
the related bonds 6 588 688
Long term liabilities including bonds and interest payable
are not due and payable in the current period and
therefore are not reported in the funds (927 749 220)
Net assets of governmental activities $ 310 586 616
See accompanying notes to basic financial statements
17
CITY OF OMAHA NEBRASKA
Statement of Revenues Expenditures and Changes in Fund Balances— Ataa
Governmental Funds 2jn:r
v,�*i
Year ended December 31 2008
Debt Other Total
service governmental governmental
General fund funds funds
Revenues
Taxes
Property $ 61 795 651 44 536 698 6 052 261 112 384 610
Motor vehicle 9 374 405 — — 9 374 405
City sales and use 124 470 354 — — 124 470 354
Business 33 963 566 — 286 005 34 249 571
In lieu 5 817 788 74 595 6 339 5 898 722
Licenses and permits 8 022 731 — — 8 022 731
Intergovernmental 3 619 494 2 404 736 35 251 588 41 275 818
Investment income 3 479 394 252 094 988 591 4 720 079
Revenue from Keno — — 7 455 212 7 453 212
Charges for services 19 842 674 2 570 633 22 933 996 45 347 323
Special assessments — — 430 022 430 022
Rents and royalties 1 790 604 — 935 814 2 726 418
Contributions and grants — 9 871 383 46 943 803 56 815 186
Total revenues 272 176 661 59 710159 121 283 631 453 170 431
Expenditures
Current
General government 34 654 790 1 253 829 16 888 582 52 797 201
Public safety 181 542 753 — 15 565 896 197 108 649
Transportation services 932 525 — 47 691 207 48 623 732
Other public services 13 836 939 — 3 093 024 16 929 963
Community development 6 607 381 — 18 427 767 25 035 148
Culture and parks 24 556 217 — 5 765 441 30 321658
Debt service
Principal 2 640 599 33 751 890 36 395 026 72 787 515
Interest 3 915 747 25 519 033 5 519 894 34 954 674
Bond issuance costs — 1 264 300 82 160 1 346 460
Capital outlay 914 112 — 75 778 808 76 692 920
Total expenditures 269 601 063 61 789 052 225 207 805 556 597 920
Excess(deficiency)of revenues
over expenditures 2 575 598 (2 078 893) (103 924 174) (103 427 469)
Other financing sources(uses)
7 ransfers in 322 162 — 357 076 679 238
Transfers out (200 000) — (1 037 839) (1 237 839)
Sale of capital assets — — 421 700 421 700
Proceeds from sale of bonds — 79 220 000 67 263 605 146 483 605
Proceeds/payments from bond premium/discount — 4 408 251 (57 445) 4 350 806
Payment to refunded bond escrow agent — (79 064 654) — (79 064 654)
Total other financing sources 122 162 4 563 597 66 947 097 71 632 856
Net change in fund balances 2 697 760 2 484 704 (36 977 077) (31 794 613)
Fund balances—beginning of year 28 968 654 16 491 540 63 881 052 109 341 246
I and balances—end of year $ 31 666 414 18 976 244 26 903 975 77 546 633
See accompanying notes to basic financial statements
18
CITY OF OMAHA,NEBRASKA
Reconciliation of the Statement of Revenues,Expenditures
and Changes m Fund Balances to the Govemmentwide riV` `;
Statement of Activities—Governmental Activities itet
Year ended December 31 2008
Amounts reported for governmental activities in the statement of activities
are different because
Net change in fund balances—total governmental funds $ (31 794 613)
Governmental funds report capital outlays as expenditures However, in the
statement of activities the cost of those assets is allocated over their estimated
useful lives and reported as depreciation expense This is the amount by which
capital outlays exceeded depreciation expense in the current period 44,792 521
Revenues in the statement of activities that do not provide current fmancial
resources are not reported as revenues in the funds 41 342 911
The issuance of long term debt(e g,bonds leases)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 Neither transaction however has any effect on net assets Also
governmental funds report the effect of issuance costs premiums discounts
and similar items when debt is first issued whereas these amounts are deferred
and amortized in the statement of activities This amount is the net effect of
these differences in the treatment of long term debt and related items (33 032 604)
Some expenses reported in the statement of activities do not require the use of
current financial resources and therefore,are not reported as expenditures in
the governmental funds (38 187 957)
Change in net assets of governmental activities $ (16 879 742)
See accompanying notes to basic financial statements
19
C117 OF OMA11A NEBRASKA
!,
Statement of Fund Net Assets f
— t1ti.r„v:.,:_n
Propnetary Funds P+
December 31 2008
Other Total
Convention Parking Sewer enterpnse propnetary
center hotel facilities revenue funds funds
Assets fund fund fund funds funds
Current assets
Cash and cash equivalents S — 98 345 22 754 120 188 749 23 041 214
Investments — — 6 690 323 — 6 690 323
Accounts receivable(net of allowance
for uncollectrbles) — — 4 289 930 107 287 4 397 217
Accrued interest receivable — 185 288 9 264 2 660 197 212
Prepaid assets 974 528 267 436 — 3 319 1 245 283
Due from other funds — — 206 001 — 206 001
Due from other governments — — — 53 224 53 224
Inventones — — 787 507 4 046 791 553
Total current assets 974 528 551 069 34 737 145 359 285 36 622 027
Noncurrent assets
Restricted assets
Deposits with trustee 18 628 322 275 189 — — 18 903 511
Investments — — 3 309 677 — 3 309 677
Deferred charges 1 057 233 208 276 764 134 — 2 029 643
Total noncurrent assets 19 685 555 483 465 4 073 811 — 24 242 831
Capital assets
Land — 2 473 344 2 682 270 — 5 155 614
Buildings and systems 71 258 240 61 006 300 578 380 528 9 558 419 720 203 487
Furniture and fixtures 6 833 038 — — 12 704 6 843 742
Machinery and equipment 3 633 542 — 16 907 916 3 680 441 24 221 899
Cultural assets 498 366 — — — 498 366
Construction in progress — — 45 783 909 85 380 45 869 289
82 223 186 63 479 644 643 754 623 13 336 944 802 794 397
Less accumulated depreciation 17 221 865 23 526 795 270 654 681 6 887 596 318 290 937
Capital assets net 65 001 321 39 932 849 373 099 942 6 449 348 484 503 460
Total noncurrent assets 84 686 876 40 436 314 377 173 753 6 449 348 508 746/91
Total assets S 85 661 404 40 987 383 411 910 898 6 808 633 545 368 318
Liabilities and Net Assets
Current liabilities
Accounts payable and other S 3 960 533 578 5 400 482 183 974 6 123 994
Current installments of long turn debt — 2 140 000 3 968 039 25 000 6 133 039
Workers compensation and healthcare claims — — 437 679 141 917 579 596
Accrued interest payable 2 177 817 650 081 770 539 — 3 598 437
Due to other funds 206 001 — 26 759 6 325 239 085
Compensated absences — — 73 513 16 525 90 038
Total current liabilities 2 387 778 3 323 659 10 677 011 375 741 16 764 189
Noncurrent liabilities
Long tern debt excluding current installments 108 518 531 43 466 736 104 583 049 422 325 256 990 661
Pension obligation — — 2 184 420 845 398 3 029 818
I osnetirement benefit obligation — — 1 563 339 605 030 2 168 369
Workers compensation and healthcare claims — — 474 152 210 972 685 124
Compensated absences — — 1 396 756 480 203 1876 961
Total noncurrent liabilities 108 518 531 43 466 756 110 201 716 2 563 930 264 750 933
Total liabilities 110 906 309 46790415 120 878 727 2 939 671 281 515 1/2
Net assets
Invested in capital assets net of related debt (29 267 210) (5 653 907) 264 586 588 6 002 023 235 667 494
Restricted for debt service 3 973 186 275 189 — — 4 248 375
Umestncted 49 119 (424 314) 26 445 583 (2 133 061) 23 937 327
Total net assets ('t5 244 905) (5 803 032) 291 032 171 3 868 962 263 833 196
Total liabilities and net assets S 85 661 404 40 987 383 411 910 898 6 808 633 545 368 318
See accompanying notes to basic financial statements
20
CITY OF OMAIIA NEBRASKA
Statement of Revenues Expenses and Changes in Fund Net Assets— Y �' hi
Proprietary Funds ::.'=':;
Year ended December 31 2008 tl '
Convention Parking Sewer Other Total
center hotel facilities revenue enterprise propnetary
fund fund fund funds funds
Operating revenues
Charges for services $ 8 918 038 4 115 811 41 194 630 6 059 832 60 288 311
Operating expenses
Personal services — 82 225 10 921 710 4 017 873 15 021 808
Outside services 236 739 — 5 479 893 349 224 6 065 856
Operation and maintenance 1 556 957 2 295 312 9 772 969 1 250 426 14 875 664
Cost of sales and services 159 840 — 3 206 721 635 902 4 002 463
Administration 2 900 — — 398 867 601 767
Depreciation and amortization 3 946 367 2 398 792 14 997 267 490 372 21 832 798
Total operating expenses 5 902 803 4 776 329 44 378 560 7 342 664 62 400 356
Operating income(loss) 3 015 235 (660 518) (3 183 930) (1 282 832) (2 112 045)
Nonoperating revenues(expenses)
Investment earnings 797 854 9 039 774 496 — 1 581 389
Miscellaneous rents and royalties — — 13 355 — 13 355
Interest expense (5 211 791) (32 864) (5 154 634) (3 544) (10 402 833)
Total nonoperating expenses
net (4 413 937) (23 825) (4 366 783) (3 544) (8 808 089)
Loss before contributions
and transfers (1 398 702) (684 343) (7 550 713) (1 286 376) (10 920 134)
Capital contributions — — 4 551 927 — 4 551 927
Transfers in — — )04 148 150 000 654 148
Tnnsfers out — (86 932) (8 615) (95 547)
Change in net assets (1 398 702) (684 343) (2 581 570) (1 144 991) (5 809 606)
Net assets at beginning of year (23 846 203) (5 118 689) 293 613 741 5 013 953 269 662 802
Net assets at end of year $ (25 244 905) (5 803 032) 291 032 171 3 868 962 263 853 196
See accompanying notes to basic financial statements
21
CITY OF OMAHA NEBRASKA
Statement of Cash Flows— A f�a
Propnetary Funds v
Year ended December 31 2008
Convention Parking Sewer Other Total
center hotel facilities revenue enterpnse proprietary
fund fund fund funds funds
Cash flows from operating activities
Receipts front customers S 8 918 038 4 332 697 40828004 5 980 529 60 059 268
Payments to suppliers (1 956 214) (2163 305) (16 753 147) (2 845 575) (23 718 241)
Payments to employees — (116 160) (9408925) (3473111) (12 998 196)
Net cash provided by operating activities 6 961824 2 053 232 14 665 932 (338 157) 23 342 831
Cash flows from noncapital financing activities
Transfers m/out — — 417 216 141 385 558 601
Advances from(to)other funds 171 169 (116 062) (28 348) 6 325 33 084
Net cash provided by(used in)noncapital
financingactivities 171169 (116 062) 388 868 147 710 59168)
Cash flows from capital and related financing activities
Capital expenditures (152066) — (24216711) (563318) (24932095)
Capital contnbutions — — — — —
Deferred charges 48 528 37 355 (6 501) (991) 78 391
Miscellaneous rents and royalties — — 13 355 — 13 355
Proceeds from sale of fixed assets — — — — —
Payments on long tern debt — (2 060 000) (1655 818) (155 000) (3 870 818)
Issuance of long term debt — — — 445 000 445 000
Premium received on issuance of long term debt — — (2 176 864) — (2 176 864)
Issuance of notes payable — — — — —
Interest paid (6 206 994) (54 511) (5 080 556) (5288) (11 347 349)
Net cash used in capital and related
financing activities (6 310 532) (2 077 156) 133 123 095) (279 597) (41 790 380)
Cash flows from investing activities
Sale(purchase)of investment securities (I 620 315) 229 292 I I 494 540 — 10 103 517
Interest received 797 854 9 039 765 232 (2 660) 1 569 465
Net cash provided by(used in)investing
activities (812 461) 238 331 12 259 772 (2 660) 11 672 982
Net increase(decrease)in cash and
cash equivalents — 98 345 (5 808 523) (472 704) (6 182 882)
Cash and cash equivalents becinning of year — — 28 562 643 661 453 29 224 096
Cash and cash equivalents end of tear S 98 345 22 754 120 188 749 23 041 114
Reconciliation of operating loss to net cash provided by
(used in)operating activities
Operant%income(loss) S 3 015 235 (660 518) (3 183 930) (1 282 832) (2 112 045)
Adjustments to reconcile operating income(loss)to net
cash provided by operating activities
Depreciation and amortization 3 946 367 2 398 792 14 997 267 490 372 21 832 798
Cash flows impacted by changes in
Accounts receivable 222 216 886 (366 626) (51 656) (201 174)
Prepaid assets — — — — —
Inventories — — (84 538) 965 (83 573)
Due from other governments — — — (27 647) (27 647)
Accounts payable and other — 132 007 1790 904 (12 121) 1910 790
Claims payable — — 131 383 49 393 180 776
Pension oblrbation — — 440 137 167 093 607230
Postretirement benefit obligation — — 942 652 363 662 1306 314
Accrued expenses — (33 935) (I 317) (35 186) (70 638)
Net cssh provided by operating activities S 6 961 824 2 053 232 14 665 932 238 157Z 23 342 831
See accompanying notes to basic financial statements
22
CITY OF OMAHA,NEBRASKA
►114 Statement of Fiduciary Net Assets— -;�
Fiduciary Funds tr4
December 31 2008
Pension Trust
Funds Agency Total
Assets
Cash and cash equivalents $ 1,860,866 9 753 709 11,614 575
Receivables
Accrued interest 2 034 577 2 554 2 037 131
Other 1,719,315 16 852 1 736 167
Pooled investments — 1 383 333 1 383 333
Investments 565,809 966 — 565 809 966
Total assets 571 424 724 11 156 448 582 581 172
Liabilities
Warrants payable 40 357 — 40 357
Accounts payable 1 007 983 670 866 1 678 849
Deposits payable — 10 485 582 10,485 582
Total liabilities 1,048,340 11 156 448 12 204 788
Net assets held in trust for
pension benefits $ 570,376 384 — 570 376 384
See accompanying notes to basic financial statements
23
CITY OF OMAHA,NEBRASKA
Statement of Changes in Fiduciary Net Assets— or
•
Pension Trust Funds VI 4":='
Year ended December 31,2008
Additions
Contributions
Employer $ 27 074 888
Employee 19 554 115
Total contnbutions 46 629 003
Investment earnings and losses
Dividends and interest 18 174 180
Net change in the fair value of mvestments (239 986 157)
Total investment earnings and losses (221 811 977)
Less Investment expenses (4 286 704)
Net investment earnings and losses (226 098 681)
Total additions,net of investment losses (179 469 678)
Deductions
Benefits 74 171 506
Change in net assets (253 641 184)
Net assets beginning of year 824 017 568
Net assets end of year $ 570 376 384
See accompanying notes to basic financial statements
24
CITY OF OMAHA,NEBRASKA t
Notes to Basic Financial Statements s
December 31 2008
(1) Summary of Significant Accounting Policies
(a) Reporting Entity
The City of Omaha Nebraska (the City) was incorporated on February 2 1857 The City operates
under a Home Rule Charter and has a mayor council form of government with an elected full time
chief executive the Mayor, and an elected legislative body the council composed of seven
members The seven council members each represent one of the City s seven districts The Mayor
and members of the council are elected through popular vote to four year terms The City is a
political subdivision of the State of Nebraska and is exempt from state and federal income taxes
The governmental reporting entity consists of the City(the primary government) and its component
units Component units are legally separate organizations for which the City is financially
accountable or other organizations whose nature and significant relationship with the City are such
that exclusion would cause the City's financial statements to be misleading or incomplete Financial
accountability rs defined as the appointment of a voting majority of the component unit s board and
(i) either the City's ability to impose its will on the organization or (ii) there is potential for the
organization to provide financial benefit to or impose a financial burden on the City
The basic financial statements include both blended component units and the City s discretely
presented component unit The blended component units although legally separate entities are in
substance part of the City s operations and data from these units are basic with data of the primary
government The City s basic financial statements blend the activity of the City of Omaha Parking
Facilities Corporation the City of Omaha Impound Facilities Corporation the City of Omaha
Stadium Facilities Corporation City of Omaha Northwest Library Facilities Corporation the City of
Omaha Facilities Corporation and City of Omaha Convention Hotel Corporation The City is
financially accountable for these organizations The City reports its respective ownership percentage
of the assets liabilities net assets and operating activity of the Omaha Douglas Public Building
Commission (the Commission) Separate financial statements are available at 1819 Farnam Street
Omaha NE 68183
The discretely presented component unit on the other hand, is reported in a separate column in the
governmentwide financial statements to emphasize that it is legally separate from the primary
government The City s basic financial statements discretely present the financial position and
activities of the Metropolitan Entertainment and Convention Authority(MECA)
MECA
MECA is a separate nonprofit corporation that is responsible for the operation of the Omaha
Convention Center/Arena MECA began operations on August 25 2000 Title to the facility and all
related infrastructure assets are vested with the City Construction activities were principally funded
by private donations and general obligation bonds of the City Board members of MECA are
appointed by the City The financial statements for MECA included herein are for the year ended
June 30 2008 MECA's separate financial statements are available at 1819 Farnam Street Omaha
Nebraska 68183
25 (Continued)
CITY OF OMAHA,NEBRASKA ASCIAlka
Notes to Basic Financial Statements r•
December 31 2008
Related Organizations
The City s officials are responsible for appointing members of the boards of other organizations but
the City s accountability for these organizations does not extend beyond making the appointments
The Mayor or City Council appoints board members of the Omaha Housing Authority the Omaha
Airport Authority and the Metro Area Transit Authority The City is not financially accountable for
these organizations
The Douglas Omaha Technology Commission (DOT Comm) is a governmental entity formed by an
rnterlocal agreement between the City and Douglas County (the County) The purpose of this entity
is to increase the cooperative efforts of the County and the City in connection with electronic
information voice and data communication services for governmental operations and public
services The City appoints two members to the DOT Comm board which has a total of seven
members The Mayor (or designee) and the City Council President (or designee) are the City
representatives appointed to the Board DOT Comm has control over its operations and fiscal matters
and holds title to its assets DOT Comm s revenues are primarily derived from maintenance fees
from the City and County Separate financial statements can be obtained from its office at 408 South
18th Street Omaha Nebraska 68102
(b) Basis of Presentation
Governmentwide Financial Statements
The statement of net assets and statement of actn sties display information about the primary
government and its component unit These statements include the financial activities of the overall
government except for fiduciary activities Eliminations have been made to minimize interfiind
activities These statements distinguish between the governmental and business type activities of the
City and between the City and its discretely presented component unit Governmental activities
which normally are supported by taxes and intergovernmental revenues are reported separately from
business type activities which rely to a significant extent on fees charged to external parties
The statement of activities presents a comparison between direct expenses and program revenues for
the business type activities of the City and for each function of the City s governmental activities
Direct expenses are those that are specifically associated with a program or function and therefore
are clearly identifiable to a particular function Program revenues include (1) charges paid by the
recipients of goods or services offered by the programs and (2) grants and contributions that are
restricted to meeting the operation or capital requirements of a particular program Revenues that are
not classified as program revenues including all taxes are presented as general revenues
Fund Financial Statements
The fund financial statements provide information about the City s funds including fiduciary funds
Separate statements for each fund category — governmental proprietary and fiduciary — are
presented The emphasis of fund financial statements is on major governmental and enterpnse funds
each displayed in a separate column All remaining governmental funds are separately aggregated
and reported as nonmajor funds
26 (Continued)
CITY OF OMAHA,NEBRASKA
� j
Notes to Basic Financial Statements yei'••5
rs. .�."
December 31 2008 vi,tj
Proprietary fund operating revenues such as charges for services result from exchange transactions
associated with the prmcipal activity of the fund Exchange transactions are those in which each
party receives and gives up essentially equal values Nonoperatmg revenues such as investment
earnings result from nonexchange transactions,or ancillary activities
The City reports the followmg major governmental funds
• The general fund is used to account for all revenues and expenditures necessary to carry out
basic governmental activities of the City that are not accounted for through other funds
• The debt service fund is used to account for the resources for and the payment of, general
long term debt principal,interest and related costs
The City reports the followmg major proprietary funds
• The convention center hotel fund is used to account for costs associated with the construction
and operation of the Convention Center Hotel
• The parking facilities fund accounts for activity from parking revenue and related expenditures
for operation maintenance and construction of parking garages
• The sewer revenue fund accounts for activity from sewer service charges construction grants
and related expenditures for operation maintenance and capital improvements of the sanitary
sewerage system and wastewater treatment plants
The City reports the following additional fund types
• The pension trust funds accumulate contributions from the City and its employees and
earnings from the funds investments Disbursements are made from the funds for retirement
• The agency funds account for assets held by the City as an agent for various local
governments
• The permanent funds are used to report resources that are legally restricted to the extent that
earnings and not principal may be used for purposes that support the City's programs for the
benefit of the City or its citizenry
• The special revenue funds account for the proceeds from specific revenue sources that are
restricted to expenditures for specified purposes
• The capital projects funds account for all resources received and used for the acquisition or
development of major capital improvements (other than those financed by proprietary funds
and trust funds)
• The enterprise funds account for operations that are financed and operated in a manner similar
to private business enterprises (a)where the intent of the governing body is that the costs of
providing goods or services to the general public on a continuing basis is financed or
recovered primarily through user charges or (b)where the governing body has decided that
periodic determination of revenues earned expenses incurred and/or net income is appropriate
for capital maintenance public policy management control accountability or other purposes
27 (Continued)
CITY OF OMAHA,NEBRASKA ;A &
Notes to Basic Financial Statements
December 31 2008
(c) Basis of Accounting
The governmentwide proprietary, and fiduciary fund financial statements are reported using the
economic resources measurement focus and the accrual basis of accounting Revenues are recorded
when earned and expenses are recorded at the time liabilities are incurred regardless of when the
related cash flows take place Nonexchange transactions, in which the City gives(or receives)value
without directly receiving (or giving) equal value in exchange, include property and sales taxes
grants, entitlements and donations On an accrual basis, revenue from property taxes is recognized
in the fiscal year for which the taxes are levied Revenues from grants, entitlements and donations
are recognized in the fiscal year m which all eligible requirements have been met
Governmental funds are reported using the current financial resources measurement focus and the
modified accrual basis of accounting Under this method revenues are recognized when measurable
and available Property and sales taxes interest certain state and federal grants, 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 other long term liabilities, which are recorded
only when due General capital assets acquisitions are reported as expenditures in governmental
funds Proceeds and payments of long term debt are reported as other financing sources and uses
Private sector standards of accounting and financial reporting issued prior to December 1 1989
generally are followed in both the governmentwide and proprietary fund financial statements to the
extent that those standards do not conflict with or contradict guidance of the Governmental
Accounting Standards Board (GASB) Governments also have the option of following subsequent
private sector guidance for their business type activities and their enterprise funds, subject to this
same limitation The City has elected not to follow subsequent private sector guidance
Proprietary funds distinguish operating revenues and expenses from nonoperating items Operating
revenues and expenses generally result from providing services and producing and delivering goods
in connection with a proprietary fund s principal ongoing operations The principal operating
revenues of the enterprise funds are charges to customers for goods and services Operating expenses
include the cost of sales and service administrative expenses and depreciation on capital assets All
revenues and expenses not meeting this definition are reported as nonoperating revenues and
expenses
(d) Encumbrances
Encumbrance accounting is employed in the governmental funds Under encumbrance accounting
purchase orders contracts and other commitments for the expenditures of funds are recorded in
order to reserve that portion of the applicable appropriation Encumbrances are reported as
reservations of net assets since they do not constitute liability Encumbrances are reported as
expenditures on the budget basis schedule
(e) Pooled Cash and Investments
The City maintains a pooled cash and investment account for all funds These funds are placed in the
custody of the City Treasurer Each fund reports its undistnbuted interest in the principal balance of
28 (Continued)
CITY OF OMAHA,NEBRASKA car? ,Notes to Basic Financial Statements
December 31 2008
the pool Interest earned on the City s pooled cash and investments is credited to the general fund of
the City except for the don hayes memorial fund ralph anderson memorial fund, cash reserve fund
dodge park manna fund western hentage/byron reed fund asarco remediation fund sewer revenue
fund sewer construction fund, and aksarben bond fund,which are credited directly to the respective
funds Interest is imputed and transferred to the keno funds police seized assets funds law
enforcement block grant funds and western heritage fund
(9 Cash and Cash Equivalents
For purposes of the accompanying statement of cash flows the City enterprise funds consider all
highly liquid debt instruments with an original maturity of three months or less when purchased to be
cash equivalents
(g) Investments
Investments are stated at fair value Securities traded on a national or international exchange are
valued at the last reported sales prices at current exchange rates where marketable securities are not
listed on an exchange quotations are obtained from brokerage firms or national pricing services
Income from investments not included in pooled cash and investments that are held by the individual
funds is recorded m the respective funds as it is earned
(h) Inventories
Inventories of materials and supplies are stated at the lower of cost or market using the first in
first-out method The costs of governmental fund inventories are recorded as assets when purchased
and expended as used
(i) Property Taxes
Nebraska LB 1114 imposes a tax ceiling for general revenue purposes The tax levy certified in any
year shall not exceed $0 45 per $100 of actual valuation The 2008 general tax levy ($0 24312 per
$100 of assessed valuation)was below the legal limit by$0 20688 or$52,345 274
The Home Rule Charter of the City imposes a tax ceiling for general revenue purposes The tax levy
certified in any year shall not exceed $0 6125 per$100 of actual valuation plus whatever tax levy is
necessary to provide for principal and interest payments on the indebtedness of the City for
administrative expenses incurred in issuing and maintaining bonds and for satisfaction of judgments
and litigation expenses in connection therewith The 2008 general tax levy ($0 24312 per $100 of
assessed valuation) was below the legal limit by $0 3698 or $93 567 683 The assessed value upon
which the 2008 levy was based was$25 302 239 770
The tax levies for all political subdivisions in Douglas County are certified by the county board on or
before October 15 Real estate taxes are due and become an enforceable lien on property on
December 31 The first half of real estate taxes becomes delinquent on April 1 and the second half
becomes delinquent on August 1 following the levy date Personal property taxes are due on
December 31 and become delinquent on April 1 and August 1 following the levy date Delinquent
taxes bear 14%interest
29 (Continued)
CITY OF OMAHA,NEBRASKAt•
Notes to Basic Financial Statements 1i .�w,
December 31 2008
Motor vehicle taxes are due when an application is made for registration of a motor vehicle
0) Deferred Charges
For governmentwide financial statements and proprietary fund financial statements charges resulting
from the issuance of revenue and general obligation bonds are deferred and amortized over the
remammg life of the bonds on a straight line basis
(k) Capital Assets
Within the governmentwide and proprietary fund financial statements, capital assets including
infrastructure, are recorded at historical cost or at estimated historical cost if actual historical cost is
not available Contributed fixed assets are valued at their estimated fair market value on the date of
donation Capital assets include public domam mfrastructure mcludmg roads and bridges The City
defines capital assets as assets with individual costs of more than $5 000 and estimated useful lives
in excess of one year Capital assets used in operations are depreciated or amortized using the
straight line method over the lesser of the capital lease period or their estimated useful lives in the
governmentwide and proprietary fund financial statements Assets are depreciated using the
half year convention in the first and last years of the asset s useful life
The estimated useful lives are as follows
Infrastructure 15—50 years
Buildings and systems 15—40 years
Improvements 5—30 years
Machinery and equipment 5—20 years
Vehicles 5— 15 years
(1) Compensated Absences
Employees earn annual vacation and sick leave at various specific rates during their period of
employment In the event of termination an employee is reimbursed for accumulated vacation time
This balance is the total of a yearly carryover up to a maximum of 280 hours for civilian bargaining
and civilian management employees plus the current year s leave balance Civilian management and
bargaining employees are reimbursed for a percentage of accumulated sick leave up to a maximum
of 2 000 hours (612 5 hours) Civilian and management employees have the option of accruing
compensatory leave time at a rate of one and one half times the actual hours worked in lieu of the
payment of overtime Employees may accrue a maximum of 120 hours of compensatory time The
compensatory time must be taken within three months after the end of the calendar year in which it is
earned and any remaining amounts are paid out in cash However the employee retains the right to
cash out the compensatory leave balance at any time
In the event of termination police employees are reimbursed for accumulated vacation time up to a
maximum of 320 hours plus the current year leave balance Upon retirement death or resignation
after 20 years police employees receive 1 for 1 for the first 1 200 hours of accumulated sick leave
and 1 for 4 hours thereafter up to a maximum of 3 200 hours (1 700 hours) Police employees may
accrue a maximum of 360 hours of compensatory time In the event of termination Fire Department
30 (Continued)
CITY OF OMAHA,NEBRASKA
Notes to Basic Financial Statements VAs
,_p....
December 31 2008
24 hour shift employees are reimbursed for accumulated vacation time up to a maximum of 360
hours plus current year accumulation Upon retirement or resignation, Fire Bargaining 24 hour shift
employees are reimbursed for accumulated sick leave 1 for 1 for the first 1,200 hours and 3 for 4 for
all hours greater than 1,201 to 2 400 for a maximum 2,100 hours In the event of termination Fire
Management employees are reimbursed for accumulated vacation time up to a maximum of 280
hours plus current year accumulation Upon retirement Fire Management employees are reimbursed
for accumulated sick leave 1 for 1 for the first 1 200 hours and 1 for 4 for all hours greater than 1 201
to 3 200 for a maximum 1 700 In the event of termination,Fire Department 40-hour shift employees
are reimbursed for accumulated vacation time up to a maximum of 240 hours plus current year
accumulation Upon retirement or resignation 40 hour shift employees are converted to 24 hour
shift employees reimbursed for accumulated sick leave as above
For the governmentwide proprietary, and fiduciary fund financial statements vacation leave and
other compensated absences with similar characteristics are accrued as the benefits are earned if the
leave is attributable to past service and It is probable that the City will compensate the employees for
such benefits Such accruals are based on current salary rates and include salary related payments
such as the employe' s matching Social Security and Medicare costs associated with payments made
for compensated absences on termination In the governmental funds, a liability for these amounts is
reported only if they have matured
(nr) Self-Insurance
The City self insures all claims related to personal liability and property damage for City owned
vehicles medical dental and workers' compensation and the first $100 000 of buildings and
contents coverage The City has purchased separate commercial insurance to cover losses m excess
of $100 000 on buildings and contents The City has purchased separate commercial liability
insurance to cover helicopters used by the Police Department
(n) Long-Term Obligations
In the governmentwide financial statements and proprietary fund types in the fund financial
statements long-term debt and other long term obligations are reported as liabilities in the applicable
governmental activities business type activities or proprietary fund type statement of net assets
Bond premiums and discounts as well as issuance costs are deferred and amortized over the life of
the bonds Bonds payable are reported net of the applicable bond premium or discount Bond
issuance costs are reported as deferred charges and amortized over the term of the related debt
In the fund financial statements governmental fund types recognize bond premiums and discounts
as well as bond issuance costs during the current period The face amount of debt issued is reported
as other financing sources Premiums received on debt issuances are reported as other financing
sources while discounts on debt issuances are reported as financing uses Issuance costs whether or
not withheld from the actual debt proceeds received are reported as current expenditures
31 (Continued)
CITY OF OMAHA,NEBRASKA 411 j
Notes to Basic Financial Statements stirir 7'11'
4.7
December 31,2008
(o) 'Wetland Transaction
Interfund transactions are reflected as either loans services provided reimbursements or transfers
Loans which are reported as receivables and payables are subject to elimmation upon consolidation
and are referred to as either`due to/from other funds or `advances to/from other funds
Services provided deemed to be at market or near market rates are treated as revenues and
expenditures/expenses Reimbursements are when one fund incurs a cost charges the appropriate
benefiting fund and reduces its related cost as a reimbursement All other mterfund transactions are
treated as transfers Transfers between governmental or proprietary funds are netted as part of the
reconciliation to the goveinmentwide presentation
(p) Restricted Assets
Restricted assets include deposits with trustees of various enterpnse funds and capital projects
(a) Accounting Pronouncements Adopted
In November 2006 GASB issued Statement No 49, Accounting and Financial Reporting Jo;
Pollution Remediation Obligations This statement was adopted by the City during 2008 The
statement requires the City to recognize a pollution remediation obligation liability when it knows or
reasonably believes a site is polluted and one of five obligating events has occurred 1 he adoption of
the statement did not have a financial statement impact during fiscal year 2008
In May 2007 GASB issued Statement No 50 Pension Disclosures an amendment of
GASB Statements No 25 and No 27 This statement more closely aligns the financial reporting
requirements for pensions with those for other postemployment benefits (OPEB) and in doing so
enhances information disclosed in notes to financial statements or presented as required
supplementary information (RSI) by pension plans and by employers that provide pension benefits
The City adopted this statement m 2008
(r) Recent Accounting Pronouncements Issued
In June 2007 GASB issued Statement No 51 Accounting and Financial Reporting for Intangible
Assets This statement requires that all intangible assets not specifically excluded by its scope
provisions be classified as capital assets Accordingly existing authoritative guidance related to the
accounting and financial reporting for capital assets should be applied to these intangible assets as
applicable This statement also provides authoritative guidance that specifically addresses the nature
of these intangible assets This statement is effective for fiscal years beginning after June 15 2009
The City has not completed its assessment of the impact of the adoption of this statement
In November 2007 GASB Statement No 52 Land and Other Real Estate Held as Investments by
Endowments requires that real estate held by endowments should be reported at fair value This
statement is applicable to the City in 2009 however management believes that it will have no effect
on the financial statements of the City
32 (Continued)
CITY OF OMAHA,NEBRASKA o(11..,4at
Notes to Basic Financial Statementsvicciact,47
+�
December 31 2008
In June 2008 GASB issued Statement No 53, Accounting and Financial Reporting for Densatrve
Instruments This statement establishes accounting and financial reporting standards for all state and
local governments that enter into derivatives The City has not completed its assessment of the
impact of the adoption of this statement,which is required in 2010
In February 2009 GASB issued Statement No 54,Fund Balance Reporting and Governmental Fund
Type Definitions This statement provides clearer fund balance classifications and is effective for
periods beginning after June 15 2010 The City has not completed its assessment of the impact of
the adoption of this statement However, the City currently does not have investments in derivative
instruments
(s) Use of Estimates
The preparation of the financial statements in conformity with U S generally accepted accounting
principles (GAAP) requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenditures/expenses during the
reporting period Actual results could differ from those estimates
(2) Interfund Receivables,Payables,and Transfers
Individual interfund receivables and payables at December 31 2008 are as follows
Receivable fund Amount Payable fund
Uniformed Pension Fund $ 770 172 General fund
Civilian Pension Fund 117 501 General Fund
Civilian Pension fund 26 759 Sewer Revenue Fund
Civilian Pension Fund 6 325 Nonmajor enterprise funds
Civilian Pension Fund 53 994 Nonmajor governmental funds
Sewer Revenue Fund 206,001 Convention Center Hotel Fund
All remaining balances result from the time lag between the dates that(1) Interfund goods and services are
provided or reimbursable expenditures occur (2) transactions are recorded in the accounting system and
(3)payments between funds are made All amounts are expected to be paid within one year
33 (Continued)
CITY OF OMAHA,NEBRASKA �//�'
Notes to Basic Financial Statements
December 31 2008
Transfers are related to funding for capital projects lease payments debt service or reallocations of
special revenues The following schedule briefly summarizes the City s transfer activity
Transfer in
General Nonmajor Nonmajor
Fund Governmental Enterprise Sewer Total
oMajor Governmental Funds
General Fund $ — 200 000 — — 200 000
a Major Enterprise Funds
o Sewer — 86 932 — — 86 932
00 Nonmajor Governmental 322 162 61 529 150 000 504 148 1 037 839
Nonmajor Enterprise — 8 615 — — 8 615
Total $ 322 162 357 076 150 000 504 148 1333 386
(3) Deposits and Investments
The City has generally pooled the cash resources of the various funds except the pension trust fund for
investment purposes Interest earned on pooled funds is credited to the City s general fund in accordance
with Nebraska State Statute Section 77 2315 R R S 1943
(a) Deposits
Custodial credit risk is the risk that in the event of a bank failure the City will not be able to recover
its deposits As of December 31 2008 all of the City s deposits were collateralized with securities
held by the City s agent m the City s name
(b) City Investments
Investments are stated at fair value City funds are invested in conformity with the public funds
Security Act Chapter 77 Article 23 specifically 77 2387 of the Nebraska Res ised Statutes
Allowable investments include U S government bonds, U S treasury bills and notes U S agency
bonds and notes certain state and political subdivision bonds repurchase agreements warrants of
the State of Nebraska and Nebraska political subdivisions, and certain instruments of the FHLM
federal farm credit system FHLB FNMA and the Small Business Administration The government
money market mutual fund consists of only those securities that are allowed by N R S 77 2387
Custodial Credit Risk — Custodial credit risk is the risk that in the event of the failure of the
counterparty the City would not be able to recover the value of its investments or collateral
securities that are in the possession of an outside party
Interest Rate Risk— Interest rate risk is the risk that the fair value of the City s investments will
decrease as a result of an increase in interest rates The City s investment policy related to maturity is
as follows U S treasury securities cannot exceed five years Zero coupon or stripped coupon
U S treasury notes or bonds cannot exceed two years Certificates of deposit issued by commercial
banks cannot exceed 12 months all other investments not mentioned above cannot exceed a
five year maturity from the date of purchase
34 (Continued)
CITY OF OMAHA,NEBRASKA alrefr
Notes to Basic Financial Statements i'Ciz o
YG�r
December 31 2008 vie
The City had the following maturities for pooled investments
Investment term
Less than
Investment type Fair value 1 year 1—5 years
U S agencies $ 34 082 957 16 138 320 17 944 637
U S treasury bills 2 713 817 2 713 817 —
$ 36 796 774
The City had the following maturities for investments held by trustees
Investment term
Less than
Investment type Fair value 1 year 1—5 years
Guaranteed investment contract $ 2 867 500 — 2 867,500
Government securities 716 875 — 716 875
$ 3 584 375
Credit Risk—Credit risk is the risk that the City will not recover its in estments due to the inability
of the counterparty to fulfill their obligation State statute limits investment options to certain
specific investment vehicles There is no statutory requirement for investments to meet a certain
quality rating
The pooled investment s quality rating is as follows
Quality
Investment type Fair value rating AAA
U S agencies $ 34 082,957 34 082 957
US treasury bills 2 713 817 2 713 817
$ 36 796 774
The deposits with trustees quality rating is as follows
Quality
Investment type Fair N alue rating AAA _
Guaranteed investment contract $ 2 867 500 NA
Government securities 716 875 716 875
$ 3 584 375
Concentration of Credit Risk — Concentration of credit risk is the risk of loss attributed to the
magnitude of the City s investment in a single issuer State statute does not restrict the concentration
35 (Continued)
CITY OF OMAHA,NEBRASKA "Ui
Notes to Basic Financial Statements R i't,'"!h
December 31 2008
of investment in any issuer The City s policy states that no more than 25%of the total portfolio will
be invested in the issuance of any single institution other than securities of the U S government and
its agencies
Concentrations of investment by issuer for pooled Investments are displayed m the following table
Investment type Fair value Percent
U S agencies $ 34 082 957 92 6%
U S treasury bills 2 713 817 7 4
Concentrations of investment by issuer for deposits held by trustees are displayed in the following
table
Investment type Fair value Percent
Guaranteed investment contract $ 2 867 500 80 0%
Government securities 716 875 20 0
Foi eign Currency Risk — Foreign Currency Risk is the risk that changes in exchange rates will
adversely impact the fair value of an Investment The City does not have a policy related to foreign
currency risk
Summary—The following is a complete listing of deposits and investments of the City
Investment type Fair value
Deposits $ 63 590 144
Pooled investments 36 796 774
Trustee accounts 24 854 539
Imprest funds 68 653
$ 125 310 110
The deposits and investments of the City excluding the pension trust fund at December 31 2008
are reflected in the financial statements as follows
Fiduciary
Go'iernmentwrde funds
statement of statement of
Investment type net assets net assets Total
Cash and cash equivalents $ 53 905 088 9 753 709 63 658 797
Pooled investments 32 103 764 1 383 333 33 487 097
Deposits with trustee 24 854 539 — 24 854 539
Restricted pooled investments 3 309 677 — 3 309 677
$ 114 173 068 11 137 042 12) 310 110
36 (Continued)
CITY OF OMAHA,NEBRASKA e
Notes to Basic Financial Statements
( i'•Lr
December 31 2008
(c) Pension Trust Funds
The pension trust funds consist of two funds the Civilian Plan and the Uniformed Plan These
pension programs operate in compliance with Omaha Municipal Code Chapter 22 and Nebraska
State Statute 30 3209 City pension fluids are invested according to a plan developed and reviewed
quarterly by each plan s Investment Committee The plans define the purposes of the assets identify
the parties responsible for managing the investment process establish both broad and specific
guidelines for the investment of the fund s assets and establish criteria to monitor and evaluate the
performance of the investment managers The plan authorizes investments in common and preferred
stocks, corporate bonds cash equivalent secunties certificates of deposits of insured institutions
money market funds bank short term investment funds GICs BICs and government bonds They
can be in mutual funds or privately managed accounts
Interest Rate Risk—The Pension Board of each plan with the recommendation from the respective
Investment Committee approves fund manager agreements These management agreements outline
specific investment policies each manager must adhere to The Retirement Committees do restrict
the general asset allocation to fixed income The uniformed plan fund s target range for fixed income
assets is between 16% and 28% of the portfolio value and the civilian plan fund s range is between
12% and 28% Fixed income investments are held in six accounts managed by five managers
$137 7 million in managed accounts and $41 million in two bond mutual funds Maturities of the
securities in these commingled funds are as follows
Managed accounts
Matunty range(years)
Less than
Ins estmeut type 1 year 1—5 6—10 10+
U S treasuries —% 5 3% 14 5% 4 7%
U S agencies 1 2 6 8 8 6 16 1
Corporate bonds 1 8 22 5 14 9 3 6
Bond mutual funds
Percent
Matunty of total
0— 1 years 8 1%
1 —5 years 64 8
6— l0 years 20 7
10+years 6 4
37 (Continued)
CITY OF OMAHA,NEBRASKA �1�j
Notes to Basic Financial Statements V41 Teo,.
December 31,2008
Credit Risk—Credit risk involves the potential of loss of fair value due to the quality of the fixed
income investments The Investment Committees of each plan monitor and select fixed fund
managers based on an investment policy that diversifies the plan s risks Each manager employs a
arying type of investment style Fixed mcome investments are held in six accounts and are managed
by five managers $137 7 million m managed accounts and $42 7 million in two bond mutual funds
The quality ratings of the secunties in these commingled funds are as follows
Managed accounts
Percent of
Investment type Ratings total
U S treasuries AAA 25 2%
U S agencies AAA/AA+ 33 9
Corporate bonds AAA/A3 33 1
Corporate bonds BAAIBBB 7 4
Corporate bonds N/R 0 4
Bond mutual funds
Percent
Rating of total
TSY/AGY 55 2%
AAA/Aaa 20 2
AA+/A3 18 2
BBBBa2 2 5
N/R 3 9
Concentration of Credit Risk—Fixed income securities guidelines are governed by each manager s
individual management contract This allows a wide variety of management styles thus diversifying
each portfolio Combined target allocation for fixed income securities shall be 12% to 28% of the
portfolio Equity investments shall be 30%to 55%of the portfolio with large cap domestics(20%to
35%) small cap domestics (10% to 20%) and international equities (5% to 15%) Domestic real
estate secunties shall be 2% to 20% of the portfolio They may be held individually or commingled
in mutual funds and investment pools There are no mdividual investments greater than 5% with a
single issuer
Percent
Investment type Fair value allocated
Government securities $ 111 424 922 19 7%
Corporate bonds 67 237 441 11 9
Domestic equities 185 393 186 32 8
International equities 75 067 359 13 2
Domestic real estate securities 105 806 838 18 7
Cash and cash equivalents 20 880 220 _ 3 7
Total $ 565 809 966 100 0%
38 (Continued)
CITY OF OMAHA,NEBRASKA Cie
Notes to Basic Financial Statements Sac
December 31 2008
Foreign Currency Risk
The City is exposed to foreign currency risk related to international equities Foreign currency risk is the
risk that changes in exchange rates will adversely impact the fair value of an investment The City does not
have policy related to foreign currency risk All international equities are denominated in U S dollars
(4) Net Assets/Fund Balances
The governmentwide and business type activities fund financial statements utilize a net assets presentation
Net assets are categorized as invested in capital assets(net of related debt) restricted and unrestricted
• Invested in Capital Assets,Net of Related Debt—This category groups all capital assets including
infrastructure, into one component of net assets Accumulated depreciation and outstanding balances
of debt that are attnbutable to the acquisition construction, or improvement of these assets reduce
the balance in this category
• Restncted Net Assets—This category presents external restrictions imposed by creditors grantors
contributors or laws or regulations of other governments and restrictions imposed by law through
constitutional provisions or enabling legislation
• Unrestncted Net Assets — This category represents net assets of the City not restricted for any
project or other purpose
In the fund financial statements reservations segregate portions of fund balance that are either not
available or have been earmarked for specific purposes The vanous reserves are established by actions of
the Council and management and can be increased reduced or eliminated by similar actions As of
December 31 2008,reservations of fund balance are described below
• Encumbrances—to reflect the outstanding contractual obligations for which goods and services have
not been received
• Inventories—to reflect the portion of assets that do not represent available spendable resources
• Debt service—to reflect the portion of assets that are held for payment of debt service
• Perpetual care—to reflect the portion of assets that are held for perpetual care costs
(5) Special Assessment Note Payable
The City obtained a note dated December 18 2008 to fund the current requirements in the special
assessment fund for the purpose of meeting obligations to contractors for work in place that will ultimately
be assessed to the benefited property owners The term of the note is one year m the amount of$706 000
at an interest rate of 5 21% The note will be repaid from collections of special assessments
39 (Continued)
CITY OF OMAHA,NEBRASKA i
Notes to Basic Financial Statements E`"r�o! ••
December 31 2008
Yi,;: iF#
(6) Bonds Payable and Other Long-Term Obligations
The following is a summary of long term liability transactions for the year ended December 31 2008
Balances at Issuances Retirements Balances at Amount due
January 1 or other or other December 31 within one
2008 additions reductions 2008 year
Governmental activities
Bonds payable
General obligation bonds S 472 720 000 93 420 000 57 105 000 509 035 000 26 710 000
Annexed general obligation
bonds 64 106 472 37 687 881 52 766 890 49 027 463 3 733 269
Special tax revenue bonds 40 385 000 6 865 000 3 250 000 44 000 000 1 730 000
Special obligation bonds 58 654 877 38 535 000 32 699 182 64 490 695 1 442 837
Revenue bonds 2 350 000 — 140 000 2 210 000 145 000
Deferred amounts
Unamortized premium 30 826 972 4 412 423 1 908 303 33 331092 —
Unamortized discount (48 563) (61 615) (4 984) (105 194) —
Loss on refunding (33 504 417) (2 944 654) (2 153 348) (34 295 723) —
Total bonds payable 635 490 341 177 914 035 145 711 043 667 693 333 33 761 106
Special assessment notes
payable 215 000 706 000 215 000 706 000 706 000
Lease purchase contracts
payable 37 418 224 6 957 605 3 063 583 41 312 246 2 722 178
Notes payable 3 096 263 — 215 460 2 880 803 222 570
Grants payable 8 215 000 800 000 4 240 000 4 775 000 2 600 000
Compensated absences 62 698 592 5 266 482 — 67 965 074 3 398 2)4
Workers compensation and
healthcare claims 18 898 927 2 007 759 — 20 906 686 8 407 778
Claims and Judgments payable 1 464 500 452 500 — 1 917 000 1 917 000
Net pension obligation 56 981 670 19 079 185 — 76 060 855 —
Postreurement benefit obligation 15 030 222 20 814 361 — 35 844 583 —
Total governmental
long term
liabilities
carryforward 839 508 739 233 997 927 153 445 086 920 061 580 a3 734 886
40 (Continued)
CITY OF OMAHA,NEBRASKA �,�j
Notes to Basic Financial Statements .'c,''ri
December 31 2008
Balances at Issuances Retirements Balances at Amount due
January 1, or other or other December 31 within one
2008 additions reductions 2008 year
Brought forward S 839 508 739 233 997 927 153 445 086 920 061 580 53 769 286
Business type activities
Convention Center Hotel
Revenue bonds 109 750 000 — — 109 750 000 —
Deferred amounts
Unamottrzed premium 3 123 240 — 118 417 3 004 823 —
Loss on refunding (4 403 239) — (166 947) (4 236 292) —
108 470 001 — (48 530) 108 518 531 —
Parking Facilities Fund
Lease purchase contracts
payable 47 815 000 — 2 060 000 45 755 000 2 140 000
Deferred amounts
Unamortized premium 67 059 — 7 027 60 032 —
Loss on refunding (234 098) — (25 822) (208 276) —
Compensated absences 33 935 — 33 935 — —
47 681 896 — 2 075 140 45 606 756 2 140 000
Sewer Revenue Fund
Revenue bonds 54 430 000 — 1 135 000 53 295 000 1 lb 000
Plus unamortized premium 878 361 — — 878 361 —
Notes payable 37 056 147 — 2 176 864 34 879 283 2 250 876
Special obligation bonds 19 855 123 — 520 818 19 334 305 542 163
Plus unamortized premium 164 139 — — 164 139 —
Compensated absences 1 471 656 — 1 387 1470 269 73 513
Workers compensation and
healthcare claims 780 448 131 383 — 911 831 437 679
Pension obligation 1 744 283 440 137 — 2 184 420 —
Postretiretnent benefit
obligation 620 687 942 652 — 1 563 339 —
117 000 844 1 514 172 3 834 069 114 680 947 4 479 231
Nonmajor business type activities
Revenue bonds 155 000 — 155 000 — —
Lease purchase contracts payable — 445 000 445 000 25 000
Deferred amounts
Unamortrzed premium — 2 338 13 2 323 —
Compensated absences 532 116 8 461 43 847 496 730 16 525
Workers compensation and
healthcare claims 303 496 49 393 — 352 889 141 917
Pension obligation 678 305 167 093 — 843 398 —
Postrettrement benefit obligation 241 368 363 662 — 605 030 —
1 910 285 1 035 947 198 860 2 747 372 183 442
Total business type
activities 275 063 026 2 550 119 6 059 539 271 553 606 6 802 673
Total all funds S 1 114 571 763 236 548 046 159 504 625 1 191 615 186 60 571 959
41 (Continued)
CITY OF OMAHA,NEBRASKA SW*
Notes to Basic Financial Statements k'Di, .ram
In,December 31 2008 "''fit
Governmental Activities
Long term debt at December 31 2008 comprises the following individual issues
General Obligation Bonds
Effective
interest rate First
Original payable Series date December 31
Amount issued Issue semiannually due callable 2008
$ 26 475 000 12 15 97 Venous purpose—refund
series 4 50%—5 00% 1998—2017 2007 $ 1 425 000
27 120 000 12 01 98 G O —defeasance bonds 410—5 00 2000—2015 2008 8 005 000
25 445 000 12 15 98 Various purpose—refund
series 4 20—4 50 1999—2018 2008 3 765 000
36 570 000 11 15 99 V anus purpose—refund
series 5 00—5 125 2000—2019 2009 6 160 000
21 000 000 12 01 00 Various purpose 410—5 20 2001—2020 2010 6 000 000
24 165 000 12 01 00 G 0 —defeasance bonds 4 10—5 75 2001—2017 2010 11 090 000
21 000 000 11 15 01 Various purpose 3 00—4 75 2002—2021 2011 13 650 000
16 000 000 03 01 03 Various purpose 2 75—5 00 2003—2022 2013 11 775 000
30 175 000 03 01 03 G 0 —defeasance bonds 1 50—4 30 2003—2021 2013 19 940 000
203 873 000 04 01 04 G O —defeasance bonds 5 25—5 25 2012—2027 2014 205 875 000
31 660 000 04 01 04 Various purpose—refund
series 2 00—4 12) 2005—2024 2014 22 265 000
42 800 000 11 15 05 Various purpose—refund
series 4 00—4 75 2006—2025 2013 36 380 000
26 625 000 10 15 06 Various purpose—refund
series 4 00—4 25 2007—2026 2016 24 280 000
46 785 000 10 15 07 Various purpose—refund
series 4 00—4 75 2008—2027 2017 45 005 000
17 880 000 10 30 08 Various purpose—refund
series 5 00—5 74 2009—2028 2018 17 880 000
73 540 000 07 24 08 G O —defeasance bonds 3 75—5 00 2009—2025 2018 75 540 000
Total general obligation bonds 509 035 000
42 (Continued)
CITY OF OMAHA,NEBRASKA kt.
s.
Notes to Basic Financial Statements I cz
\ �t
December 31 2008 \ ;W
General Obligation Bonds
Effective
interest rate First
Original payable Series date December 31
Amount issued Issue semiannually due callable 2008
Annexed Area Bonds
$ 130 000 12 01 01 S I D #151 3 5%—4 80% 2002—2011 2008 $ 45 000
2 210 000 01 15 04 S I D #203 140—4 70 2005—2024 2009 180 000
652 852 03 15 91 S I D #235 1 00 1995—2010 None 441 954
285 509 03 15 91 S I D #235 — 2010 None 285 509
750 000 08 01 03 S I D #245 2 25—4 85 2005—2020 2008 590 000
2 500 000 05 02 06 S ID #272 3 65—4 45 2007—2016 2011 2 090 000
2 400 000 07 01 01 S 1 D #321 4 10—5 15 2002—2013 2005 1 255 000
1 890 000 10 01 02 S I D #353 3 75—4 75 2003—2014 2006 1 220 000
1 245 000 05 01 08 S I D #353 3 10—4 20 2009—2018 2013 1 245 000
3 270 000 11 1 1 02 S I D #364 3 10—4 60 2003—2016 2006 2 080 000
4 350 000 12 15 04 S ID #367 2 50—4 45 2006—2019 2009 3 590 000
1 835 000 09 02 03 S I D #369 2 00—4 75 2004—2018 2008 1 225 000
3 800 000 12 15 03 S I D #375 1 60—5 30 2004—2023 2008 150 000
2 300 000 03 15 04 SID #379 160-450 2004-2018 2018 295000
1 150 000 06 15 05 S 1 D #383 3 10—4 20 2006—2023 2009 1 035 000
4 250 000 10 15 04 S I D #384 1 90—5 00 2005—2024 2008 295 000
3 250 000 03 01 05 S I D #391 2 50—4 40 2006—2019 2010 2 680 000
1 750 000 01 15 05 S I D #423 2 50—5 20 2005—2025 2010 195 000
1 500 000 06 15 06 S I D #423 4 00—5 25 2006—2026 2011 240 000
3 500 000 12 01 03 S I D #448 1 50—5 20 2004—2023 2007 125 000
7 600 000 05 01 04 S I D #448 1 35—4 90 2005—2024 2008 320 000
2 950 000 02 15 07 S I D #449 3 75—5 05 2007—2027 2011 325 000
5 100 000 08 15 05 S I D #454 3 20—5 05 2006—2025 2010 4 595 000
3 000 000 03 15 04 S 1 D #459 2 00—5 20 2005—2024 2009 2 560 000
3 000 000 03 15 05 S I D #459 2 80—5 20 2006—2025 2010 2 700 000
2 750 000 06 13 06 S I D #459 4 15—5 15 2007—2026 2011 2 695 000
3 750 000 10 01 07 S I D #459 4 40—5 35 2008—2027 2013 3 615 000
2 000 000 11 13 05 S ID #461 3 50—5 00 2006—2025 2010 1 830 000
1 000 000 11 01 06 S ID #461 4 10—5 00 2007—2026 2011 975 000
4 150 000 10 01 06 S I D #470 4 10—5 15 2007—2031 2011 4 130 000
2 500 000 11 15 06 S I D #498 4 00—5 00 2007—2026 2011 2 335 000
2 823 000 12 15 08 S I D #534 5 05 2011—2033 2011 2 825 000
930 000 09 15 05 Various Purpose—Elkhorn 3 15—4 55 2007—2024 2010 860 000
Total annexed area bonds 49 027 463
Total general obligation and annexed area bonds $ 558 062 463
43 (Continued)
CITY OF OMAHA,NEBRASKA
Notes to Basic Financial Statements �"•i'c,
December 31 2008
Special Tax Revenue Bonds
Effective
interest rate First
Original payable Series date December 31
Amount issued Issue semiannually due callable 2008
6 195 000 II02 99 Downtown Northeast
Redevelopment Project 4 0%—6 25% 2000—2019 2009 $ 4 160 000
8 670 000 02 01 02 Riverfront Redevelopment
Project Series 2002A ) 125—5 50 2002—2031 Various 8 670 000
20 325 000 09 01 04 Perfomung Arts Complex
Redevelopment Bonds 2 50—5 00 2005—2024 2014 18 675 000
1 095 000 12 20 07 Homeland Redevelopment
Project Series 2007A 4 00—4 25 2007—2016 None 1 095 000
665 000 12 20 07 Homeland Redevelopment
Project Series 2007B 4 50—4 70 2007—2011 None 47)000
4 075 000 12 20 07 Various Projects
Redevelopment Series 2007 3 60—5 13 2007—2027 2017 4 060 000
2 000 000 03 25 08 Special Tax Revenue
Refunding Series 2008 3 03—4 32 2009—2013 None 2 000 000
4 865 000 11 13 08 Special Tax Revenue
Redevelopment Series 2008 4 00—5 25 2009—2028 2018 4 865 000
$ 44 000 000
Governmental Activities Revenue Bonds
Effective
interest rate First
Original payable Series date December 31
Amount issued Issue semiannually due callable 2008
660 000 08 01 99 Highway Allocation 4 40%—5 20% 2000—2010 2004 $ 220 000
760 000 03 01 04 Highway Allocation 1 20—3 65 2004—2014 2009 570 000
1 420 000 09 30 06 Highway Allocation 3 85—4 45 2007—2026 2011 1 420 000
$ 2 210 000
44 (Continued)
CITY OF OMAHA,NEBRASKA ripNotes to Basic Financial Statements o
December 31 2008
As of December 31 2008 the debt service requirements of the City for principal and interest in future
years are as follows
Governmental activities
Principal Interest Total
Years ending December 31
2009 $ 33,761 106 31 970 832 65 731,938
2010 31 860 686 30 648,091 62 508 777
2011 33 437 540 29 356 991 62 794 531
2012 37 305 380 27 675 113 64 980 493
2013 38 446 264 25 958 330 64 404,594
2014—2018 183 263 827 103 513,836 286 777 663
2019—2023 169 288 764 59 289 253 228 578 017
2024—2028 121 836 701 18 740 406 140 577,107
2029—2032 19 562 890 2 094 118 21 657 008
$ 668 763 158 329 246 970 998 010 128
Business-type activities
Principal Interest Total
Years ending December 31
2009 $ 1 717 163 8 536 460 10 253 623
2010 2 098 508 8,460 848 10 559 356
2011 2 319 122 8 372 024 10 691 146
2012 2 569 736 8 267 854 10 837 590
2013 3 167 485 8 143 451 11 310 936
2014—2018 18 231 343 38 339 888 56 571 231
2019—2023 23 175 000 33 644 428 56 819 428
2024—2028 38 951 163 26 847 325 65 798 488
2029—2033 55 319 785 15,209 999 70 529,784
2034—2036 34 830 000 2 274 842 37 104 842
$ 182 379 305 158 097 119 340 476 424
General obligation bonds have been approved by the voters and issued by the City for various municipal
improvements These bonds represent indebtedness supported by the full faith and credit of the City
46 (Continued)
CITY OF OMAHA,NEBRASKA 1:10.�
Notes to Basic Financial Statements
+:r``t
December 31 2008
fj
Notes Payable
Notes payable consist of a loan contract between the City and the U S Army Corps of Engineers and four
loan contracts between the City and the Nebraska Department of Environmental Quality (NDEQ) with
interest rates ranging from 3%to 5% Maturities of the notes payable are as follows
Governmental activities
Principal Interest Total
Years ending December 31
2009 $ 222 570 98 223 320 793
2010 229 916 90 877 320 793
2011 237 505 83 288 320 793
2012 245 346 75,447 320 793
2013 148 019 68 130 216 149
2014-2018 821 577 259,169 1 080 746
2019—2023 975 870 104 877 1 080 747
2024—2026 — — —
$ 2 880 803 780 011 3 660 814
Business-type activities
Pnncipal Interest Total
Years ending December 31
2009 $ 2 250 876 1 231,508 3 482 384
2010 2 327 437 1 154 947 3 482 384
2011 2 406 636 1 075 748 3 482 384
2012 2 488 565 993 820 3,482 385
2013 2 563 919 909 065 3 472 984
2014-2018 8 008 515 3 578 835 11 587 350
2019—2023 9,611 204 1 976,146 11 587,350
2024—2026 5 222 131 297 405 5 519 536
$ 34 879 283 11 217 474 46 096 757
Grants Payable
The City has entered into various agreements with not for profit organizations to provide grant funds as
follows
2009 $ 2 600 000
2010 1800 000
2011 250 000
2012 125 000
$ 4 775 000
47 (Continued)
CITY OF OMAHA,NEBRASKA
Notes to Basic Financial Statements i c
r�tr�C f
December 31 2008
Tax Increment Financing Notes and Bonds
At December 31, 2008 $265 746 930 of tax increment financing notes and bonds was outstanding The
related tax increment districts are not component units of the City therefore the City is not liable for the
outstandmg debt The creation of the related tax increment district requires that any increase in taxes due to
valuation increases following creation of the district be remitted to the lender The City s responsibility for
this liability is limited only to remittance of paid taxes
Tax increment notes and bonds outstanding at December 31 2008 comprise the following individual issues
listed below and on the following pages
Tax Increment Notes and Bonds
Effective
Original interest rate December 31,
amount Issue at issuance 2008
$ 1 210 000 Riverfront Hotel—Series 1997 2A 4 00% $ 231 000
3 510 000 Riverfront Hotel—Series 1997 1A 6 00 728 000
3 440 000 FNB Data Center—Series 1998 6 25 1 655 000
600 000 FNB Data Center—Series 2004 5 90 199 300
14 515 000 FNB Tower Project—Series 1999A 6 965—7 675 9 085 000
3 500 000 FNB Tower Project—Series 1999B 6 965—7 675 2 185 000
620 000 Child Care Facility Project—Series 2003 5 00 361 700
4 649,620 Riverfront Redevelopment—Series 2A 6 50 873 240
1,420,380 Riverfront Redevelopment—Series 2B 6 50 266 760
11 585 000 Convention Center Hotel Redevelopment 2 5—4 85 9 460 000
167 600 Kellom Heights II 7 50 27 830
180 015 National Building 5 50 70 970
1 224 000 Westin Aquila 7 50 435 496
95 000 1213 Jackson St Partnership 7 00 53 377
581 820 Famam Park 8 00 228 318
30 000 Kohl's Drug 8 00 38 210
235 000 Midlands Recycling 6 50 300 612
1 725 000 Millard Refrigerated Svc/NE Beef 7 25 1 246 351
181 500 1115 Ramey LLP 8 00 174 970
1 135 000 Food Services of America 6 97—7 68 1 443 322
290,000 Orchard Manor — 143 943
479,000 Loner 111 7 25 378 541
550 000 1101 Harney LLC 6 50 44 160
377 000 Drake Williams Steel 7 25 562 054
540 000 Rivergate Apartments 7 25 275 855
2 650 000 First Data Resources 7 00 2 419 273
94 140 Caldwell Limited Partnership 8 50 50 958
200 000 Upstream Brewing Co 10 13 172 667
374 000 Securities Building Ltd Partnership 8 00 252 748
88 830 Kellom Plaza(26th St Limited Ptr) 10 00 30 587
48 (Continued)
CITY OF OMAHA,NEBRASKA Arks
Notes to Basic Financial Statements =lit
December 31 2008
Tax Increment Notes and Bonds
Effective
Ongmal interest rate December 31,
amount Issue at issuance 2008
$ 500 000 Premier Place Development 9 25% $ 565 590
42 885 Ames/Fontenelle LLC 9 00 52,731
1 519 000 Downtown Northeast 8 00 1 127,120
424 000 Bull Durham 9 00 324 675
110 000 Grace Plaza/Twentieth Plaza 8 50 101 530
139 000 Riverview Meadows 9 00 264 191
195 000 Campus for Hope 2 71 85,206
400 000 American Laboratones 9 00 508 463
7 200,000 Aksarben Future Trust 7 42 4 617 758
655 000 Ford Warehouse Apartments NuStyle 9 00 195 030
419 000 Spagetti Building Development 9 00 275 425
260 000 Quality Refrigerated Services Inc 8 50 75 111
202 000 Riley Building LLC 8 00 277 728
273 000 Cannonball Express#3 9 00 77 284
243 600 Village Development—Lake Street LLC 8 00 217 499
175 000 Immaculate Conception School 8 00 193 482
180 225 Robbins School LLP 9 00 152 359
76 000 L&R Holdings LLC 8 50 38 430
790 000 Bemis Company Inc 8 50 1 462 977
378 000 Joslyn Lofts Limited Partnership 8 00 421 369
918 400 St Joseph Terrace Apts LLC 8 00 796 097
118 000 South Omaha Affordable Housing Corp 8 50 133 922
894 600 707 South 11th Street Limited Prtnr 7 50 1 073,796
2 087 400 1023 Jones Street LLP 7 25 2,033 533
186 000 E A Pedersen Redevelopment 8 00 284 324
180 000 1234 South 13th Street LLC 7 78 320 017
5 972 725 Ames Center/Benson Plaza 8 00 8 751 781
2,098 000 Airhte Plastics Company 7 75 1 115 654
1 553 000 Hilton Garden Inn 9 00 1 203 671
77 950 Roman Marble Products Inc 8 00 85 916
495 000 Abbot Drive Plaza Redevelopment 8 00 892 013
100 000 Meredith Manor 10 00 91 198
285 000 1613 Farnam Street LLC 8 50 225 462
100,000 Cox/Suburban Electric Redevelopment 8 50 101 505
50 000 T&B Properties LLC 9 50 55 833
71 000 Big Jim s Plus Gas&Convenience Store 7 38 107 955
4 100 000 Omaha World Herald 9 00 3 350 029
202 000 Chanell Construction 8 00 241 632
238 000 Cohen Squared LLC 8 75 223 523
49 (Continued)
CITY OF OMAHA,NEBRASKA QUA
Notes to Basic Financial Statements yrv"ri
ram j.
December 31,2008 '
Tax Increment Notes and Bonds
Effective
Original interest rate December 31,
amount Issue at issuance 2008
$ 150 000 Fullwood Square Apartments Ltd Ptnrshp 8 75% $ 192,912
O'Keefe Elevator Company Inc
285,000 Redevelopment 8 50 209 889
307 200 Ames Avenue LLC 8 00 270 194
355 000 Village Development 8 00 359 461
438 000 Turner Park LLC Redevelopment 8 00 511 324
106 800 Bradford Investment Group(Benson) 9 00 196 961
Cmtas Group(North Omaha
553 000 Business Park) 8 50 811,657
1 600 000 Drake Court Apts (710 S 20th LLC) 7 00 1 674 266
602 498 Signa Development Svcs(Omaha Club) 7 50 980 483
125 000 Kellom Villa Limited 7 25 110 203
120 000 Kellom Gardens Limited 7 25 119 796
86 600 Armored Knights 5 00 81 794
1 108 538 Phillips Realty LLC 5 00 980 430
243 000 King s Heritage Estates I 8 00 253 059
790 000 1000 Dodge Street LLC 6 50 823 421
1 800 000 Livestock Exchange Building LLC 8 00 1 711 559
580 000 Miami Heights Area Development 8 00 5A 340
1 335 000 Greater Omaha Packing II 6 00 1 567 525
721,000 Airlrte Plastics Company II — 545 678
526 000 California Housmg LLC 7 62 667,586
QRS(Quality Refrigerated Svcs)
150 000 Redevelopment II 5 00 210,554
856 000 Hy Vee Inc Redevelopment 9 00 997 053
600 000 Twenty Fourth&Hamilton LLC 8 00 799 138
125 000 701 South 15th LLC 9 00 113 042
2 750 000 Courtland Place No I LLC 9 00 3 166 592
4 200 000 Riverfront Partners LLC 4 00 4 677 806
1111 Jones Street LLC(Museum
777 000 Kaneko) 8 75 1 014 302
450 000 DTG LLC &Jobbers Canyon LLC 7 50 551 537
1 495 000 National Parks Service Redevelopment — 1 299 243
1 840 000 Model T Ford Building LLC 6 50 1 897 276
1 000 000 T S McShane LLC(P E Iler Bldg) 6 00 1 316 671
8 490 000 Sorenson Park Plaza Commercial 6 00 9 883 756
510 750 Sutherlands Plaza LLC 6 50 644 557
525 000 U S Food Service 8 00 523 594
232 000 The Village at Omaha LP 7 00 259 297
5217 South 28th Street LLC
150 000 Redevelopment 7 00 158 656
108,000 Underwood Properties Inc 7 00 116 653
50 (Continued)
CITY OF OMAHA,NEBRASKA
Notes to Basic Financial Statements ira'
December 31 2008 SiF3
Tax Increment Notes and Bonds
Effective
Original interest rate December 31,
amount Issue at issuance 2008
$ 4 000,000 Shamrock Parking LLC 7 50% $ 6 181 492
366,000 BM&J Holdings LLC 7 00 634 254
Rycan Inc d/b/a West&Willy
389 000 Redevelopment 6 70 456 595
275,000 St Clair Condos LLC 6 00 288 511
983 000 Grover Street Acquisition LLC 7 00 1 214,363
3 440 000 BOCA Development 7 00 3 438 587
9 750 000 Brandeis Lofts LLC Condominiums 7 00 7 448 551
1 950 000 Jackson Lofts LLC Redevelopment 6 50 2 331 960
2 709 950 Benson Park Plaza Redev Phase II 8 00 3 383 267
1 349 000 Bushido University LLC 7 25 1 627 866
239 817 La Cuadra LLC 7 80 267 172
104 000 Nathan LP/Nathan Development LLC 7 50 118 551
1 800 000 River City Lodging LLC 6 00 2 047 846
440 000 The Hill Condo Conversions 7 50 506 655
1949 000 North Central Group Redev Phase I 7 25 2 314 495
2 315 500 North Central Group Redev Phase II 7 25 2 749 725
160 000 DEEL Investments LLC 8 00 191 783
1 100 000 Kimball Lofts LLC 8 50 1 321 929
2 528 000 DMK Investments LLC 6 50 2 955 115
Townsend Investments(Wallstreet
15 639 284 Towers) 8 50 19 216 839
86 000 CF Studio 6 25 96 254
3 500 000 jLofts Condominiums 7 50 3 962 721
300 000 James Tinsley Villas LLC 7 50 339 662
1 000 000 Downtown Dodge Developers LLC 8 25 1 097 393
415 535 P&A McGill LLC 6 00 4A 712
576 000 Columbo LLC(Aksarben Place) 7 50 651 235
1 546 998 Zone 5 LLC(Aksarben Village) 7 50 1 734 773
602 625 Noddle AV2 LLC(Aksarben Project IA) 7 62 676 974
844 805 Noddle AV3 LLC(Aksarben Project 1B) 7 62 949 033
1 )02 460 Noddle AV4 LLC(Aksarben Project 1C) 7 62 1 687 826
Zone Three Commons LLC(Aksarben
406 410 Project 1D) 7 62 456 551
S&S Properties LLC(Heartland Scenic
250 000 Studios) 7 50 260 993
RHW Management Inc (Aksarben
1 370 000 Project 5) 7 50 1 536 291
416 000 Graham Ice Cream Building 8 00 467 927
51 (Continued)
CITY OF OMAHA,NEBRASKA 4j
► ..
Notes to Basic Financial Statements ♦w
December 31,2008
Tax Increment Notes and Bonds
Effective
Original interest rate December 31,
Broadmoor Development(Aksarben
$ 5 000 000 Project 4) 7 50% $ 5 606 902
2 196 000 Georgetown Properties(Aksarben
Project 3) 7 25 2 473 090
1 750 000 Ontrack Development LLC 8 50 2 134 003
215 000 Salem Village 8 75 259 317
Giovanna Rows @ 6th&Pierce
539 000 Redevelopment 8 00 546 289
Dial Kmseth Development(Marriott
2 845 646 Residence Inn) 7 50 3 222 788
100 000 Anzaldo Second Addition Redev 8 00 113 523
1 370 000 Caniglia Little Italy LLC Redev 8 00 1 485 906
S&R Development LLC(Metro
487 500 OB GYN) 5 25 526 346
320 000 Clannda Condos 8 00 337 745
East Campus Realty(Midtown
37 439 000 Crossing(a3 Turner Park) 5 13 39 173 759
DEEL Investments LLC(18th Street
180,000 Row House) 8 00 180 868
Sheppard Heights(Incontro Enterprises
539 000 LLC) 8 00 633 456
Skyline Retirement Community
3 603 000 Development 8 00 3 902 296
Creighton University(Modern
1 642 118 Equipment Company) 6 00 1 751 982
ALDI Inc (Sutherlands Plaza
691 000 Redevelopment — 691 000
142 000 Sutherlands Plaza LLC 7 50 143 371
4 123 223 South 72nd Street Associates LLC 7 00 4 234,719
420 000 Storage Canada LLC(Dino s Storage) 8 00 461 885
210 000 Greenview Estates LLC Redevelopment 7 25 213 838
1 000 000 DLR AK5 LLC(DLR Group Building) 6 75 1 044 199
483 000 Blues Lofts Inc Redevelopment 8 00 499 409
1 357 191 Riverfront Compus Developers II LLC 6 50 1 396 345
844 000 Building 500 LLC(500 South 18th St) 7 50 846 601
293 500 No Man s Land LLC(24th& Paul St) 6 75 294 694
715 000 ALDI Inc — 715 000
643 000 901 Land LLC 8 00 662 871
1 240 000 Courtland Place No 2 LLC 8 00 1 303 053
12 000 200 Quad Tech LLC(Blue Cross Centre) 7 50 12 054 448
$ 265 746 930
52 (Continued)
CITY OF OMAHA,NEBRASKA 4rks
Notes to Basic Financial Statements
f �
December 31,2008
Debt Margrn/Covenants
According to the City Charter,the total amount of general obligation indebtedness(mcludmg annexed area
bonds) outstanding at any time which shall include bonds issued but shall not include bonds authorized
until they are issued shall not exceed 3 5% of the actual value of taxable real and personal property in the
City Debt margin as of December 31 2008 is calculated as follows
Debt limit $ 927 847 755
General obligation debt 558 062,463
General debt service fund balance 18 976,244
539 086 219
Debt margin $ 388 761 536
Revenue bonds and certain other long term obligations are the obligation of specific Enterprise funds and
are payable solely from the revenues of the respective funds Provisions in the revenue bond ordinances
contain limitations and restrictions on annual debt service requirements maintenance of and flow of
moneys through various restricted accounts and minimum amounts to be maintained in various accounts
It is management s opinion the City is in compliance with all such significant provisions
In Substance Defeasance
On July 24 2008 the City issued $75,540 000 of general obligation refunding bonds to provide resources
to purchase investment securities that were placed in an irrevocable trust for the purpose of generating
resources for all future debt service payments of$76 120 000 of general obligation bonds As a result the
refunded bonds are considered to be defeased and the liability has been removed from the governmental
activities column of the statement of net assets The reacquisition price exceeded the net carrying amount
of the old debt by $2,944 654 This amount is being netted against the new debt and amortized over the
shorter of the life of the refunded debt or original debt This refunding was undertaken to reduce total debt
service payments over the next 20 years by$3 912 275 and resulted in an economic gain of$2 650 746
53 (Continued)
CITY OF OMAHA,NEBRASKA ► �,n
Notes to Basic Financial Statementsrarrt
c'•, cr
December 31 2008
In prior years the City defeased certain general obligation and other bonds by placing the proceeds of new
bonds in an irrevocable trust to provide for all future debt service payments on the old bonds Accordingly
the trust account assets and the liability for the defeased bonds are not mcluded in the City s financial
statements The amount of m substance defeased debt outstandmg at December 31 2008 is shown below
General Obligation Bonds
2004 Convention Center Series A $ 109,235 000
2000 Defeasance&Refunding 2 430 000
2000 Various Purpose 11 500 000
1999 Various Purpose&Refunding 10,030 000
133 195 000
Annexed Area Bonds
SID #203 1 695 000
SID #379 1 450 000
SID #384 3 515 000
SID #423 1200 000
STD #433 2 670 000
SID #449 2 520 000
SID #461 1 705 000
SID #470 2 380 000
SID #423 1 390 000
18 525 000
Total General Obligation Bonds 151 720 000
Business-Type Revenue Bonds
2001 Convention Center Hotel Bond 102 275 000
Total $ 253 995 000
(7) Leases
The City is leasing libraries and other facilities under noncancelable lease purchase agreements expiring at
various times through 2033 at which time title will be conveyed to the City The net book value of leased
assets is approximately $43 million The rental payments are designed to equal the debt service
requirements of certain nonprofit organizations that financed the construction of the facilities The City has
an option to purchase the facilities at any time by paying an amount equal to the total of all remaining
unpaid lease obligations to the lessor at that time
54 (Continued)
CITY OF OMAHA,NEBRASKA
Notes to Basic Financial Statements tp'c; :
December 31 2008
The following schedule reflects future minimum lease payments under the lease purchase agreements
together with the present value of the net minimum lease payments as of December 31 2008
Governmental Business-type
activities activities
Fiscal year endmg
2009 $ 4 568,529 4 700 426
2010 4 589 334 4 702 827
2011 4 604,555 4 705 118
2012 4 579 392 4,691 538
2013 4 413 493 4 695 156
2014—2018 19,968 779 20,612,910
2019—2023 9 277 211 11 999 996
2024—2028 4 546 087 9 694 691
2029—2033 — 9 124 965
Total minimum lease payments 56 547 380 74 927 627
Less amount representing interest 15 235 134 28 727 627
Total principal obligation under capital leases
with rates of interest from 2 00%to 7 98% $ 41 312 246 46 200 000
The City leases space in the Omaha Douglas Civic Center and the adjoining Hall of Justice under a lease
that expires only upon payment of all outstanding bonds of the Commission The annual rental payments
are determined based upon actual space occupied by the City for operation and maintenance Actual rental
payments for 2008 were approximately$1 412 486
55 (Continued)
CITY OF OMAHA,NEBRASKA *Irk
v.;r6:trh
Notes to Basic Financial Statements y2;
December 31 2008
(8) Receivables
Receivables at December 31 2008 of the City s major funds and nonmajor funds in the aggregate
including the applicable allowances for uncollectible accounts are as follows
Total
Total business
Debt governmental type
General service Nonmajor activities Sewer fund Nonmalor activities Total
Receivables
Property taxes S 63 428 978 45 868 177 3 897 824 113 194 979 — — — 113 194 979
Telephone
occupation tax 3 028 514 — — 3 028 514 — — — 3 028 514
Hotel motel
occupation tax 354 151 — 32 802 386 953 — — — 386 953
Vehicle rental
occupation tax 606351 — — 606351 — — — 606351
Cable TV and Gas
franchise fee 1 243 758 — — 1 243 758 — — — 1 243 758
MUD m lieu of tax 952 929 — — 952 929 — — — 952 929
OPPD m lieu of tax 25 688 18 576 1 579 45 843 — — — 45 843
Motor vehicle tax 788 127 — — 788 127 — — — 788 127
Special assessment — 4 147 881 2 484 821 6 632 702 — — — 6 632 702
State aid distribution 1023 034 — — 1 023 034 — — — 1 023 034
Charges for services
and other 7 103 993 4678718 II782711 4289930 107287 4397217 16179928
Total
receivables S 78 555 523 50 034 634 1 1095 744 139 685 901 4 289 930 107 287 4 397 217 144 083 118
Governmental funds report deferred revenues in connection with receivables for revenues not considered
available to liquidate liabilities of the current period At December 31 2008 the various components of
deferred revenue and unearned revenue are as follows
Unavailable Unearned
Property tax receivable(general fund) $ 63 428 978 —
Property tax receivable(debt service fund) 45 868 177 —
Special assessments(debt service fund) 4 147,881 —
Property tax receivable(other governmental funds) 3,897 824 —
Special assessments (other governmental funds) 2 484 821 —
Grants(general fund) 1 181 887 —
Grants(other governmental funds) 28,247 671 240 116
$ 149 257 239 240 116
(9) Employees'Retirement Plans
Substantially all City employees are covered by one of two single employer contributory defined benefit
retirement plans The City of Omaha Employees Retirement System (the Civilian Plan) and the City of
Omaha Police and Firefighters Retirement System (the Uniformed Plan) as described below are
accounted for by the city as pension trust funds
56 (Continued)
CITY OF OMAHA,NEBRASKA alike
Notes to Basic Financial Statements i it n
Y Ia Writ 4" r
,.'a s.
December 31 2008 `� (�
(a) Civilian Plan
Plan Description—The Civilian Plan is a smgle employer contributory defined benefit pension plan
The Civilian Plan provides retirement benefits to plan members and beneficiaries All eligible City
employees except the following are covered by the plan police firefighters persons paid on a
contractual or fee basis seasonal temporary and part time employees and elected officials who do
not make written application Cost of living adjustments are provided to members and beneficiaries
at the discretion of the City m accordance with plan provisions A cost of living adjustment currently
is provided for members who retired pnor to January 28 1998 after a five year waiting period The
Pension Board of the City administers the Civilian Plan The Pension Board is responsible for
establishing or amending plan provisions The Civilian Plan does not issue separate financial
statements
Funding Policy—Effective December 16 2007 Civilian Plan members are required to contribute,by
payroll deduction 8 325% of their annual covered salary and the City is required to contribute at a
rate of 9 525% of annual covered salary Administrative costs for management of the investment
funds are financed through investment earnings Other administrative costs of the Civilian Plan are
paid by the city s general fund Contributions to the Civilian Plan totaled $4 695 162 for the
employees and$5 374 082 for the employer for the year ended December 31 2008
Participant Data
Membership of the Civilian Plan consists of the following at January 1 2009
Number of
Active members 1 121
Service retirements 892
Surviving spouses and children 253
Disabled 92
Deferred vested 81
Total participants 2 439
The Civilian Plan is not subject to either the minimum funding standards of the Employee
Retirement Income Security Act of 1974 or the maximum funding standards of the Employee
Retirement Income Security Act of 1974 or the maximum funding limitations Funding standards are
actuarially determined using the entry age normal cost method
57 (Continued)
CITY OF OMAHA,NEBRASKA Irks
Notes to Basic Financial Statements
rLti #
December 31 2008
The information presented m the notes to financial statements and required supplementary
information was determined as part of the actuarial valuation at the date mdicated Additional
information as of the latest actuarial valuation follows
Valuation date January 1 2008
Actuarial cost method Entry age normal method
Amortization method Level percent closed
Remaining amortization period 24 years
Asset valuation method Adjusted value of plan assets
75%of expected value plus 25%of
market value
Actuarial assumptions
Investment rate of return 8%per year
Projected salary increases 4 5%per year
Cost of living adjustments Lesser of 3%or$50 per month
Annual Pension Cost and Net Pension Obligation—The City s annual pension cost and net pension
obligation to the Civilian Plan for the fiscal year ended December 31 2008 are as follows
Annual required contribution $ 9 212 669
Interest on net pension obligation 1 112 817
Adjustment to annual required contribution (1 235 608)
Annual pension cost 9 089 878
Contributions made (5 374 082)
Increase in net pension obligation 3 715 796
Net pension obligation begmnmg of year (13 910 207)
Net pension obligation,end of year $ (17 626 003)
The annual pension costs the percentage of annual pension cost contributed and the net pension
obligation for 2008 2007 and 2006 are as follows
Schedule of employer contributions
Annual Percentage Net
pension of APC pension
cost(APC) contnbuted obligation
Fiscal year ended
2008 $ 9 089 878 59% (17 626 003)
2007 8 794 542 57 (13 910 207)
2006 6 135 462 67 (10 090 703)
58 (Continued)
CITY OF OMAHA,NEBRASKA ai j
Notes to Basic Financial Statements
December 31 2008
Basis of Accounting—The Civilian Plan s fmancial statements are prepared using the accrual basis of
accounting and are presented as a pension trust fund m the accompanying basic financial statements
of the City 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 fmal average
compensation and are recognized when due and payable
Method Used to Value Investments — Civilian Plan assets are invested in readily marketable
securities and are carried at fair value Investments in securities traded on a national securities
exchange are valued at the latest quoted market prices Unlisted investments are valued at latest
quoted market prices
Funding Status and Funding Progress—The funding status and fundmg progress is as follows
Actuanal UAAL as a
Actuarial accrued Unfunded percentage
value of liability(AAL) AAL Funded Covered of covered
Actuarial assets entry age (UAAL) ratio payroll payroll
valuation date (a) (b) lb a) (a/b) (c) ((b a)/c)
2008 204 5 387 7 183 2 52 7% 56 4 324 8%
Summary financial information for the Civilian Plan is as follows
Assets
Due from other funds $ 204 579
Receivables
Accrued interest 755 373
Other 183 002
Investments 205 222 029
Total assets $ 206 364 983
Liabilities
Warrants payable $ 22 344
Accounts payable 410 178
Due to other funds 1 479 955
Total liabilities 1 912 477
Net Assets
Net assets
Held in trust for pension benefits 204 452 506
Total liabilities and net assets $ 206 364 983
59 (Continued)
CITY OF OMAHA,NEBRASKA at,
Notes to Basic Financial Statements I;t2`t�
December 31 2008
Additions
Contributions
Employer $ 5 374 082
Employee 4 695 162
Total contributions 10 069,244
Investment income(loss)
Dividends and interest 5 013 141
Net depreciation in fair value of investments (79 030 808)
Investment expenses (1 739 834)
Net investment loss (75 757 501)
Total additions (65 688 257)
Deductions
Benefit payments 23 953 415
Change in net assets (89 641 672)
Net assets held in trust for pension benefits beginning of year 294 094 178
Net assets held in trust for pension benefits end of year $ 204 452 506
(b) Uniformed Plan
Plan Description — The Uniformed Plan is a single employer contributory defined benefit pension
plan The Uniformed Plan covers all eligible probationary and regular sworn personnel of the Police
and Fire departments of the City The Uniformed Plan provides retirement disability and death
benefits to plan members and beneficiaries Cost of living adjustments are provided to members and
beneficiaries at the discretion of the City in accordance with plan provisions The City Council has
the authority to negotiate, set, and amend contribution rates for the employer and employees The
Pension Board of the City administers the Uniformed Plan The Pension Board is responsible for
establishing or amending plan provisions The Uniformed Plan does not issue separate financial
statements
Funding Policy — Uniformed Plan members are required to contribute by payroll deduction a
percentage of their annual covered salary and the City is also required to contribute as folio%s
Bargaining Group Employee rate City rate
Fire Sworn 15 40% 21 02%
Fire Management 15 45 21 07
Police Sworn 14 90 20 )2
Police Management 14 57 20 19
60 (Continued)
CITY OF OMAHA,NEBRASKA
Notes to Basic Financial Statements .;c "Not fL-47.
+�
December 31 2008
In addition the City will make contributions of$1 327 600 annually through 2028 Administrative
costs for management of the investment funds are financed through mvestment earnings Other
administrative costs of the Uniformed Plan are paid by the city s general fund Contributions to the
Uniformed Plan totaled $14 858 953 for the employees and $21 700 806 for the employer for the
year ended December 31,2008
Participant Data
Membership of the Uniformed Plan consists of the following at January 1 2009
Number of
Active members 1 409
Service retirements 889
Surviving spouses and children 269
Disabled 253
Deferred vested 11
Total participants 2 831
The Uniformed Plan is not subject to either the minimum funding standards of the Employee
Retirement Income Security Act of 1974 or the maximum funding standards of the Employee
Retirement Income Security Act of 1974 or the maximum funding limitations Funding standards are
actuarially determined using the entry age normal cost method
The information presented m the notes to fmancial statements and required supplementary
information was determmed as part of the actuarial valuation at the date indicated Additional
information as of the latest actuarial valuation follows
Valuation date January 1 2008
Actuarial cost method Entry age normal method
Amortization method Level percent of pay
Remaining amortization period 25 years
Asset valuation method Actuarial value of assets
One third of market value plus
two thirds of expected asset value
Actuarial assumptions
Investment rate of return 8%per year
Projected annual salary increases varying 4%through 6 5%
Final year wage adjustment 10 0%
Cost of living adjustments Lesser of 3%or$50 per month
($65 for fire retirements after
June 30 2007)
61 (Continued)
CITY OF OMAHA,NEBRASKA A�, ad
Notes to Basic Financial Statements ��•i h4;
December 31 2008
Annual Pension Cost and Net Pension Obligation—The City s annual pension cost and net pension
obligation to the Uniformed Plan for the year ended December 31 2008 are as follows
Annual required contribution $ 38 073 021
Interest on net pension obligation 3 639 524
Adjustment to annual required
contribution (4 041 120)
Annual pension cost 37 671 425
Contributions made (21 700 806)
Increase in net pension
obligation 15 970 619
Net pension obligation,beginning
of year (45 494 051)
Net pension obligation end of year $ (61 464,670)
Funding Status and Progress—The funding status and funding progress is as follows
Actuarial UAAL as■
Actuanai accrued Unfunded percentage
value of liability(AAL) AAL Funded Covered of covered
Actuarial assets entry age (UAAL) ratio payroll payroll
valuation date (a) (b) (b a) (a/b) (c) ((b a)/c)
2008 3659 9476 5817 386/u 995 5846/
The annual pension costs, the percentage of annual pension cost contributed and the net pension
obligation for 2008 2007 and 2006 are as follows
Schedule of employ er contnbutions
Annual Percentage Net
pension of APC pension
cost(APC) contributed obligation
Fiscal year ended
2008 $ 37 671 425 58% $ (61 464 670)
2007 34 563 067 60 (45 494 051)
2006 30,917 700 65 (31 630 196)
Basis of Accounting — The Uniformed Plan s financial statements are prepared using the accrual
basis of accounting and are presented as a pension trust fund in the accompanying financial
statements of the City 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 and are recognized when due and payable
62 (Continued)
CITY OF OMAHA,NEBRASKA
Notes to Basic Financial Statementsraot
December 31 2008 !
Method Used to Value Investments — Uniformed Plan assets are invested in readily marketable
securities and are carried at fair value Investments in securities traded on a national securities
exchange are valued at the latest quoted market prices Unlisted investments are valued at latest
quoted market prices
Summary financial information for the Uniformed Plan is as follows
Assets
Receivables
Cash and cash equivalents $ 1 860 866
Due from other funds 2 250 128
Receivables
Accrued interest 1,279,204
Other 561 562
Investments 360 587,936
Total assets $ 366 539 696
Liabilities
Warrants payable $ 18 014
Accounts payable 597 804
Total liabilities 615 818
Net Assets
Net assets
IIeld in trust for pension benefits 365 923 878
Total liabilities and net assets $ 366 539 696
63 (Continued)
CITY OF OMAHA,NEBRASKA e
Notes to Basic Financial Statements i''ci
YL r+rrefrt7
December 31 2008
Additions
Contributions
Employer $ 21 700 806
Employee 14,858 953
Total contributions 36 559 759
Investment income(loss)
Dividends and interest 9 278 599
Net appreciation in fair value of investments (157 072 909)
Investment expenses (2 546,870)
Net investment income (150 341 180)
Total additions (113 781 421)
Deductions
Benefit payments 50 218 091
Change in net assets (163 999 512)
Net assets held in trust for pension benefits beginning of year 529 923 390
Net assets held in trust for pension benefits end of year $ 365 923,878
64 (Continued)
CITY OF OMAHA,NEBRASKA
Notes to Basic Financial Statements r,' ; 6
December 31 2008
(10) Capital Assets
Capital asset activity for the year ended December 31 2008 is as follows
Beginning Ending
balances Increases Decreases balances
Governmental activities
Capital assets not bemg
depreciated
Land $ 124 934 430 8 453 952 344 200 133 044 182
Cultural assets 5 833 600 — — 5 833 600
Construction in progress 68 503 903 (49 021 603) — 19 482 300
Total capital assets
not bemg depreciated 199 271 933 (40 567 651) 344 200 158 360 082
Capital assets being depreciated
Buildmgs 544 059 230 22 987 547 547 600 566 499 177
Machinery and equipment 64 133 542 8 908 983 1 443 587 71 598 938
Infrastructure 441 017 718 127 829 628 — 568 847 346
Total capital assets
bemg depreciated 1 049 210 490 159 726 158 1 991 187 1 206 945 461
Less accumulated depreciation for
Buildings 164 210 375 17 081 632 — 181 292 007
Machinery and equipment 45 808 549 4 193 314 1 367 321 48 634 542
Infrastructure 106 546 207 23 889 511 — 130 435 718
Total accumulated
depreciation 316 565 131 45 164 457 1 367 321 360 362 267
Total capital assets
bemg depreciated net 732 645 359 114 561 701 623 866 846 583 194
Governmental activities
capital assets net $ 931 917 292 73 994 050 968 066 1 004 943 276
65 (Continued)
CITY OF OMAHA,NEBRASKA
► s`
Notes to Basic Financial Statements �' �1 1' T•ir'
December 31 2008 —me
Depreciation expense was charged to functions/programs as follows
Governmental activities
General government $ 640,540
Public safety 3 403 609
Community development 711,841
Ecological services 770 026
Culture and parks 14,279,300
Transportation services 12 095 083
Total depreciation expense—governmental $ 31 900 399
Capital asset activity of each major enterprise fund is as follows
Beginning Ending
balances Increases Decreases balances
Convention Center Hotel Fund
Capital assets not being
depreciated
Cultural assets $ 498 366 — — 498 366
Capital assets bemg depreciated
Buildmgs 71 222 245 35 995 — 71 258 240
Machmery and equipment 3 557 743 75 799 — 3 633 542
Furniture and fixtures 6,792,766 40,272 — 6,833,038
Total capital assets
bemg depreciated 81 572,754 152,066 — 81 724,820
Less accumulated depreciation for
Buildings 6 208 992 1 784 589 — 7 993 581
Machinery and equipment 2 401 180 707 638 — 3 108 818
Furniture and fixtures 4,745 396 1,374 070 — 6 119 466
Total accumulated
depreciation 13 35).568 3.866 297 — 17,221 865
Total capital assets
bemg depreciated net 68,217 186 (3 714 231) — 64 502 955
Convention Center Hotel
Fund capital
assets net $ 68 715 552 (3 714 231) — 65 001 321
66 (Continued)
CITY OF OMAHA,NEBRASKA rallotes to Bastc Financtal Statements
December 31,2008 Stki
Beginning Ending
balances Increases Decreases balances
Parkmg Facilities Fund
Capital assets not being
depreciated
Land $ 2 473 344 — — 2 473 344
Total capital assets
not being depreciated 2 473 344 — — 2 473 344
Capital assets bemg depreciated
Leased buildings 56 439 071 — — 56 439 071
Buildmgs 4 567 229 — — 4 567 229
Total capital assets
being depreciated 61 006 300 — — 61 006 300
Less accumulated depreciation for
Leased buildings 17 331 493 2 398 793 — 19 730 286
Buildings 3 796 509 — — 3 796 509
Total accumulated
depreciation 21 128 002 2 398 793 — 23 526 795
Total capital assets
bemg depreciated net 39 878 298 (2 398 793) — 37 479 505
Parking Facilities Fund
capital assets net $ 42 351 642 (2 398 793) — 39 952 849
67 (Continued)
CITY OF OMAHA,NEBRASKA ealrni
Notes to Basic Fmancial Statements r�s
,ram a3
December 31 2008
Beginnmg Ending
balances Increases Decreases balances
Sewer Revenue Fund
Capital assets not being
depreciated
Land $ 2 525 422 156 848 — 2 682 270
Construction in progress 32 216 512 22 691 294 9 123 897 45 783 909
Total capital assets
not being depreciated 34 741 934 22 848 142 9 123 897 48 466 179
Capital assets being depreciated
Utility plant 562 405 901 15 974 627 — 578 380 528
Machinery and equipment 15 955 554 952 362 — 16 907 916
Total capital assets
being depreciated 578 361 455 16 926 989 — 595 288 444
Less accumulated depreciation for
Utility plant 240 568 769 16 373 889 — 256 942 658
Machinery and equipment 13 206 047 505 976 — 13 712 023
Total accumulated
depreciation 253 774 816 16 879 865 — 270 654 681
Total capital assets
being depreciated net 324 586 639 47 124 — 324 633 763
Sewer Revenue Fund
capital assets net $ 359 328 573 22 895 266 9 123 897 373 099 942
68 (Continued)
CITY OF OMAIIA,NEBRASKA aka
Notes to Basic Financial Statements �,
December 31 2008
Begmning Ending
balances Increases Decreases balances
Nonmajor Enterprise Funds
Capital assets not being
depreciated
Construction in progress $ — 85 380 — 85 380
Capital assets bemg depreciated
Buildings and systems 9 571 123 — — 9 571 123
Machinery and equipment 3 202 503 477 938 — 3 680 441
Total capital assets
being depreciated 12 773 626 477 938 — 13 251 564
Less accumulated depreciation for
Building and systems 3 393 017 344 865 — 3 737 882
Machmery and equipment 3 004 204 145 510 - 3 149 714
Total accumulated
depreciation 6 397 221 490 375 — 6 887 596
Nonmajor Enterprise
capital assets net $ 6 376 405 72 943 — 6 449 348
69 (Continued)
CITY OF OMAHA,NEBRASKA
Notes to Basic Financial Statements --,;tier),
December 31 2008
(11) Fund Deficits
Fund deficits exist in the following funds
Major Enterprise Funds
Parking Facilities $ 5 803 032
Convention Center Hotel 25 244 905
Nonmajor Enterprise Fund
Printing and Graphics 72 972
Air Quality 158 700
Golf Operations 713 653
Compost 29 671
Nonmajor Capital Projects Funds
Missouri River Pedestrian Bridge 5 415 630
Back to the River Project 1 405 000
City Capital Improvement 623 752
2000 Street&Highway 2001 #1 5 825
2006 Transportation 406,496
Downtown Stadium&Companion Projects 10 633 158
Pedestrian Trail Bridge—Joint use Omaha/Council Bluffs 414
Downtown Development 3 523 045
Capital Special Assessment 106 808
Nonmajor Special Revenue Funds
Park Development 2 988 133
Nebraska Affordable Housing Trust 972 781
Local Law Enforcement Block Grant 80 812
Lead Based Paint Hazard Grant 142 261
School Related Grant 122 504
COPS More 1998 237 894
Metro Drug Task Force Grants 99 341
Comprehensive Communities Program 8 755
COPS More Equipment Grant 3 268 036
COPS Phase One Grant 8 493
Juvenile Detention Grant 7 933
Weed Seed Phase Four 273 321
Fire Department Grants 606 2)2
Home Program Grant 886 510
Community Development Block Grant 2 003 524
EPA Administration Grants 43 567
Economic Development Incentive Grant 288 325
HUD Shelter Plus Care 7 489
Keno/Lottery Proceeds 56 732
Federal Emergency Management Agency 4 106 607
Emergency Shelter Grant 43 477
Lead NDEQ State Grant 80 527
70 (Continued)
CITY OF OMAHA,NEBRASKA 41%,
Notes to Basic Fmancial Statements
December 31,2008 r
Domestic Violence Grants $ 82
Police Department Grants 66 199
Neighborhood Initiative Grant 9,224
Federal Fire Grant 230 489
(a) Major Enterprise Funds
The Parking Facilities Fund was established as a tool to manage the City s eight parking structures
and various surface lots throughout the City Lease purchase debt has been issued to finance the
construction of the parking structures Annual appropriations from the City s General Fund to
subsidize the payment of this debt will eliminate this deficit
The Convention Center Hotel began operations m April 2004 The City projects that future
operations of the hotel will eliminate this deficit Annual appropnations from the City will subsidize
any debt service shortfall
(b) Nonmajor Enterprise Funds
The deficit in the Printing and Graphics Golf Operations Compost and Air Quality Funds will be
eliminated by fee increases and reduction of expenses
(c) Nonmajor Capital Funds
The elimination of fund deficits in the Nonmajor Capital Projects Funds will be accomplished by the
receipt of deferred revenues, issuance of bonds and the collection of special assessments
(d) Nonmajor Special Revenue Funds
The Park Development Fund s deficit is a result of the acquisition of two large land purchases These
sites are outside of the City and have been selected as future regional parks A park development fee
has been established which will be collected from neighboring Sanitary Improvement Districts to
fund these acquisitions The other Nonmajor Special Revenue Fund deficits will be eliminated upon
collection of deferred revenues from the sponsoring grantor agency
(12) Poctretirement Healthcare Benefits
Plan Description
The City sponsors a single employer defined benefit healthcare plan that provides certain postemployment
healthcare benefits to eligible retirees and their dependents up to age 65 when they would be Medicare
eligible in accordance with provisions established m Chapter 23 of the Omaha Municipal Code The
benefits include medical and prescription coverage The rates paid by retirees are substantially lower than
they would be under mdividual health insurance policies This difference is an implicit rate subsidy and
considered an Other Postemployment Benefit(OPEB) The plan is administered by the City The plan does
not issue separate financial statements
71 (Continued)
CITY OF OMAHA,NEBRASKA
Notes to Basic Financial Statements tri.t r,,
-
December 31 2008
Funding Policy
The contribution requirements of plan members and the City are established through labor negotiations
with the Omaha Police Union Local No 101, the Professional Firefighters Association of Omaha Local
No 385 the Omaha City Employees Local No 251 and other classified civilian and sworn employees All
agreements are approved and can be amended by the Omaha City Council Contributions are made to the
plan based on a pay-as you go basis and the City self insures this benefit For the year ended December 31,
2008 the City paid $15 479 325 for 1,201 retirees Retiree contribution rates vary from 0% to 5% of an
annual estimated premium depending on the bargaining group Retiree contributions for 2008 were
$400 564
Annual OPEB Cost and Net OPEB Obligation
The City s annual other OPEB cost(expense)is calculated based on the annual required contribution of the
employer(ARC) an amount actuarially determined in accordance with the parameters of GASB Statement
No 45 The ARC represents a level of funding that if paid on an ongoing basis is projected to cover
normal cost each year and amortize any unfunded actuarial liabilities (or fundmg excess) over a period not
to exceed 30 years The remaining amortization period is 29 years The following table shows the
components of the City s annual OPEB costs for the year the amount actually contributed to the plan, and
the changes in the City s net OPEB obligation
Normal cost $ 23 600 000
Amortization of unfunded actuarial
accrued liability 13 900 000
Interest on net OPEB obligation 600,000
Adjustments to annual required obligation (500 000)
Annual OPEB 37 600 000
Contributions made by employer (15 479 325)
Change in net OPEB obligations 22 120 675
Net OPEB obligation beginning of year 15 892 277
Net OPEB obligation end of year $ 38 b12 952
The net OPEB cost is allocated to governmental activities sewer enterprise fund and other nonmajor
enterprise funds
72 (Continued)
CITY OF OMAHA,NEBRASKA
►mow►
Notes to Basic Financial Statements t i v"Q
�Lss
December 31 2008
The annual OPEB costs, the percentage of annual OPEB cost contributed and the net OPEB obligation for
2008 are as follows
Percentage of
Annual OPEB annual OPEB
cost contributed Net OPEB
Fiscal year ended
2008 $ 37 600,000 41% $ 38,012 952
2007 28 600 000 44 15 892 277
The following table shows the components of the City s annual OPEB cost for the year, the amount
actually contributed to the plan and changes in the City s net OPEB obligation
Funded Status and Funding Progress
The funded status of the plan as of March 1 2008 and 2007 is as follows
2008 2007
Actuarial accrued liability(AAL) $ 388 500 000 307 500 000
Actuarial value of plan assets — —
Unfunded actuarial accrued liability(UAAL) $ 388 500 000 307 500 000
Funded ratio —% —%
Covered payroll $ 155 900 000 153,600 000
UAAL as a percentage of covered payroll 249% 200%
Actuarial Methods and Assumptions
Actuarial valuations on an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future Examples include
assumptions about future employment mortality and the healthcare cost trend Amounts determined
regarding the funded status of the plan and the annual required contributions of the employer are subject to
continual revision as actual results are compared with past expectations and new estimates are made about
the future The schedule of funding progress presented as required supplementary information following
the notes to the financial statements presents multiyear trend information about whether the actuarial value
of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as
understood by the employer and the plan members) and include benefits provided at the time of each
valuation and the historical pattern of sharing benefit costs between the employer and plan member to that
point The actuarial methods used include techniques that are designed to reduce the effects of short term
volatility in actuarial accrued liabilities and the actuarial value of assets consistent with the long term
perspective of the calculations In the March 1 2008 actuarial valuation the unit credit actuarial cost
method was used The actuarial assumptions included a 4% projected investment rate of return and an
annual healthcare cost trend of 7 88% initially reduced by decrements to an ultimate rate of 5% after five
73 (Continued)
CITY OF OMAHA,NEBRASKA
Notes to Basic Financial Statements
December 31 2008
years Both rates include a 3 25% inflation assumption The amortization of the unfunded actuarial accrued
liability is calculated assuming 30 annual payments increasing at 4%per year
(13) Self-Insurance
It is the policy of the City not to purchase commercial insurance for the risks of losses to which it is
exposed except for general liability for helicopters Instead, the City management believes it is more
economical to manage its risks internally and set aside assets for claim settlement in the general fund This
fund services all claims for risk of loss to which the City is exposed, mcludmg general liability property
and casualty up to $100 000 per occurrence, workers compensation employee health and accident,
environmental and antitrust Changes in the balance of claims liabilities durmg the fiscal years 2008 and
2007 are as follows
Beginning Current End
of year year Claim of year
liability claims payments liability
2008 $ 19 982 871 47 177 910 44 989 375 22,171 406
2007 13 253 513 44 171 173 37 441 815 19 982 871
(14) Commitments
The City is a defendant in a number of lawsuits in its normal course of operations In addition to the
$1 917 000 recorded by the City as claims and judgments payable the City Attorney is of the opinion that
there is a possibility that the City will incur additional losses on these lawsuits of approximately
$6 8 million
The City participates in a number of federally assisted grant programs, principally Federal Highway
Construction Grants Community Development Block Grant Workforce Investment Act and other local
improvement programs The programs are subject to financial and compliance audits The amount of
expenditures if any that may be disallowed by granting agencies is not determinable at this time,however,
city management does not believe that such amounts if any,would be significant
74 (Continued)
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v
CITY OF OMAHA,NEBRASKA ics���j
Notes to Basic Financial Statements ,iicy o
December 31,2008 "a14
(16) Subsequent Events
On June 3 2009 the City issued City of Omaha Public Facilities Corporation Lease Revenue Bonds in the
amount of$65 000 000 bearing interest at 4 66% Bond proceeds will be used to pay a portion of the costs
of acquinng constructing furnishing and equipping a new 25,000 seat City of Omaha Baseball Stadium
adjacent to the Qwest Center The National Collegiate Athletic Association (NCAA) and College World
Series of Omaha, Inc (CWS) have entered into a 26 year agreement whereby the NCAA commits to
continue to hold the NCAA Division I Men s College World Serves m Omaha Nebraska and CWS will
continue to conduct the event at the new Stadium
The City anticipates that the entire cost of the Stadium will be approximately $128 000,000 of which
approximately $31,000 000 will be paid from private donations $2 000 000 will be paid from the future
concession agreement with the stadium s concessionaire $65,000,000 will be paid from the proceeds of
the debt issue and $30 000 000 will be paid from the proceeds of a series of completion bonds to be issued
in early 2010 The project is scheduled for completion in early 2011
On April 16 2009 the City issued General Obligation Refunding Bonds in the amount of$37 050 000
bearing interest at 3 11% Bond proceeds will be used to refund $37 460 000 of previously issued General
Obligation bonds This refunding was undertaken to reduce total debt service payments over the next 17
years by $1 825 108 and resulted m an economic gain of$721 236 The loan provides for annual principal
payment ranging from $785 493 to $8 314 762 and semiannual interest payments each April 15 and
October 15 through 2025
(17) MECA
(a) Nature of Operations
MECA was incorporated under the Nebraska Nonprofit Corporation Act Neb Stat §21 1901 et seq
in the State of Nebraska Formal operations of MECA commenced on August 25 2000 when the
City approved an Agreement and Lease between the City and MECA to implement the Convention
Center/Arena Redevelopment Plan to provide bond funds to MECA to allow MECA to supervise
the design and construction of the Convention Center/Arena Facility to allow MECA to operate the
Convention Center/Arena and Parking Facility for 99 years and to provide a multiyear operating
subvention from the City The agreement and lease required the City to make annual subvention
payments to MECA initially to fund start up pre construction planning and other pre operational
activities and thereafter to help offset anticipated annual operating losses In 2004 MECA amended
its agreement and lease with the City to provide for the repayment of construction funds In 2006
MECA further amended the agreement and lease Under the amended agreement and lease the City
agreed to transfer to MECA the final subvention amount of$1 815,000 in 2008
Title to the facility and all related infrastructure assets are vested with the City Construction
activities were principally funded by private donations and general obligation bonds of the City
(the Project Funds) Construction costs bond proceeds and payments are not reflected in MECA s
financial statements as these assets liabilities revenues and expenditures are accounted for
separately by the City
76 (Continued)
CITY OF OMAHA,NEBRASKA �,r�
ti w
Notes to Basic Financial Statements `i'^'
<.r,
December 31 2008
Construction was completed and operations commenced for the Qwest Center Omaha facility dunng
fiscal 2004
In June 2004 MECA Authority entered into a facility management services and lease agreement
with the City to manage and operate the Civic Auditorium the Music Hall and the Mancuso Center
(collectively referred to as the Civic Auditorium)for a three year period beginning July 1,2004 The
City and MECA are required under the agreement to make advances to fund Civic Auditorium
operations Any advances made by MECA during the term of this agreement will be repaid through
operating profits of the Civic Auditorium or through a subvention payment by the City in 2013 In
March 2006 MECA and the City extended the Civic Auditorium lease agreement through June 30
2012
In May 2008 MECA entered into the Sixth Amendment to the Agreement and Lease with the City to
implement the Downtown Omaha Stadium Project Plan by expanding the property currently leased
to MECA under the agreement to provide adequate parking, to provide bond and donation funds to
MECA to allow MECA to operate the Omaha Baseball Stadium and additional parking areas
Construction of the stadium is expected to be completed by 2011 MECA also concurrently entered
into agreements with the City the National Collegiate Athletic Association and College World
Series Inc to clarify the terms by which the Men's College World Series Baseball Championship
will be held at the Omaha Baseball Stadium for a 26 year term
(b) Summary of Significant Accounting Policies
Reporting Entity — MECA is a component unit of the City for financial reporting purposes The
GASB establishes the criteria used in determining which organizations should be included in
financial statements Accounting principles generally accepted in the United States of America
require the inclusion of the transactions of government organizations for which an organization is
financially accountable
The extent of financial accountability is based upon several criteria including appointment of a
voting majority imposition of will financial benefit to or burden on a primary government and
financial accountability as a result of fiscal dependency
MECA s financial statements are included m the City s financial statements as a discretely presented
component unit
Measurement Focus Basis of Accounting — MECA accounts for its operations on the flow of
economic resources measurement focus and uses the accrual basis of accounting Under this method
revenues are recorded when earned and expenses are recorded at the time liabilities are incurred
Accounting Standards — in its accounting and financial reporting MECA follows the
pronouncements of the GASB In addition MECA follows the pronouncements of all applicable
Financial Accounting Standards Board (FASB) Statements and Interpretations Accounting
Principles Board (APB) Opinions and Accounting Research Bulletins (ARBs) of the Committee on
Accounting Procedure issued on or before November 30 1989 unless they conflict with or
contradict GASB pronouncements
77 (Continued)
CITY OF OMAHA,NEBRASKA -����
Notes to Basic Financial Statements "41, r7
ire
December 31 2008
Revenue Recognition—MECA recognizes its suite license and club seat revenues over the life of the
agreements Amounts received in advance are recorded as deferred revenues based on the fair value
of services to be provided to the licensee as determined by management Amounts received in
excess of the fair value are recorded as donation revenue when received Advance ticket sales
parking facility rental deposits and other event revenue received in advance are initially recorded as
deferred revenues which are recognized as revenues as the events take place or services are
provided Naming rights and advertising revenues will be recognized ratably over the life of the
agreements
Use of Estimates—The preparation of MECA s financial statements in conformity with accounting
principles generally accepted in the United States of America requires MECA s management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and reported
amounts of revenues and expenses during the reporting penod Actual results could differ from those
estimates
Cash and Cash Equivalents — MECA considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents
Accounts Receivable — Accounts receivable consist primarily of amounts receivable from various
events MECA provides an allowance for doubtful accounts equal to the estimated uncollectible
amounts Management regularly reviews the accounts receivable listing to determine uncollectible
amounts at which time any uncollectible receivables will be written off Recoveries of accounts
receivable previously written off are recorded when received
Capital and Intangible Assets, Net—Capital assets are recorded at cost Additions renewals and
betterments are capitalized and recorded at cost Expenses for maintenance and repairs are expensed
as incurred The cost and related accumulated depreciation of assets retired or sold is removed fiom
the appropriate asset and contra asset accounts,with the resulting gain or loss recognized
Depreciation is provided in amounts sufficient to relate the cost of the depreciable assets to
operations over their estimated service lives on the straight line method Building rights are
amortized over 15 years leasehold improvements are depreciated over 2 to 25 years and furniture
fixtures and equipment are depreciated over 5 to 10 years
Compensated Absences—Eligible employees are entitled to an all purpose time off policy to use for
vacation illness or injury and any personal business The amount of paid time off employees
receive each year increases with the length of their employment with a maximum accrual of
35 days MECA accrues accumulated unpaid time off pay when earned by the employee
Net Assets—Invested in Capital Assets Net of Related Debt—This component of net assets consists
of capital assets net of accumulated depreciation and related debt
Unrestricted Net Assets — This component of net assets consists of net assets not meeting the
definition of invested in capital assets net of related debt
78 (Continued)
CITY OF OMAHA,NEBRASKAcfs
Notes to Basic Financial Statements ill f
December 31 2008
Capital Improvements and Repair and Civic Reserves — As of June 30 2007 the MECA board
established a Capital Improvement Reserve in the amount of$6,000,000 This reserve will be used to
fund future upgrades and improvements to the facility Expenditures from this reserve will be made
for upgrade/improvement projects m excess of$100 000 MECA board also established a Repair and
Replacement Reserve m the amount of$2 500 000 This fund will be used for all other capitalized
asset purchases that are under $100 000 Amounts will be added to the Reserves at the end of each
fiscal year begimmng m June 2008 Fifteen percent (15%) of MECA s net operating profit shall be
allocated to the Capital Improvement Reserve and twenty percent (20%) of MECA s net operating
profit shall be allocated to the Repair and Replacement Reserve with a minimum funding
requirement of $600,000 per year broken out as follows $270 000 to the Capital Improvement
Reserve and $330 000 to the Repair and Replacement Reserve On June 19 2008,the MECA Board
resolved to add $2,000 000 to the reserve in June 2008 Of this amount 45% or $900 000 was
added to the Capital Improvement Reserve and 55% or $1 100 000 was added to the Repair and
Replacement Reserve The Civic Auditorium also has a reserve established which is calculated at
50%of the Civic s cash basis net profit
Income Taxes — MECA is a tax exempt 501(c)(3) nonprofit corporation In Apnl 2006 MECA
received a favorable ruling from the Internal Revenue Service (IRS) m response to a Private Letter
Ruling request filed in July 2003 The ruling found that MECA is lessening the burdens of the City
by managing the operations of Qwest Center Omaha As a result of this finding the IRS determined
that the revenues denved from the facility s operations are not subject to unrelated business income
tax(UBIT)
(c) Deposits and Investments
Bank Deposits—MECA s bank deposits are collateralized at June 30 2008 as follows
Deposits per bank $ 462 854
Money market 9 872 140
Total deposits 10 334 994
FDIC coverage 100 000
Uninsured and
uncollateralized $ 10 234 994
Investments —At June 30 2008 MECA s investments consist of numerous variable rate preferred
securities with various maturity dates During 2008 the auctions for these investments failed and the
market became defunct These mvestments remam valued at cost based on the par redemptions
MECA has received to date and upon advice of MECA s financial advisors In addition MECA has
various mutual fund investments in a deferred compensation account
79 (Continued)
CITY OF OMAHA,NEBRASKA
Notes to Basic Financial Statements
December 31,2008
(d) Property,Equipment, and Intangible Assets
Activity for the year ended June 30, 2008 for property, equipment and intangible assets and
accumulated depreciation are as follows
July 1, June 30,
2007 Additions Dispositions 2008
Leasehold improvements $ 4,243 981 402 872 — 4 646 853
Furniture,fixtures, and
equipment 8 595,327 336 340 — 8 931 667
Building rights 10,079 196 — — 10 079 196
Construction m progress 112 071 — (112 071) —
23 030 575 739 212 (112 071) 23 657 716
Accumulated depreciation
and amortization (4 639 691) (1 788 599) — (6 428 290)
Total $ 18,390 884 (1 049 387) (112 071) 17 229 426
(e) Long-Term Debt
MECA s long term debt activity for the year ended June 30 2008 is as follows
Balance
Balance June 30,
July 1,2007 Additions Reductions 2008
City $ 6 861,514 — (675 946) 6 185 568
Food service contract 2 101 407 — (469 992) 1 631415
Total $ 8 962 921 — (1 145 938) 7 816 983
Through the amended agreement and lease with the City MECA agreed to exercise good faith and
best efforts to raise and pay over to the City the sum of $14 000 000 to offset additional funds
provided by the City for the construction of the facility Proceeds from the sale of Naming Rights
were specifically identified as a source of repayment The Naming Rights have been sold to Qwest
Communications International Inc under a Convention Center/Arena Naming Rights Agreement
which terminates on September 1 2018 As a result the obligation for the repayment of this portion
of the construction funds has been recorded as long-term debt payable to the City offset by recording
intangible Building Rights
Under a long term contract for food service operations MECA received a $4 million interest free
loan from the contractor for the purchase of food service equipment and leasehold improvements
The loan is to be repaid over the 10 year period of the contract which began in July 2003
80 (Continued)
CITY OF OMAHA,NEBRASKA !IL/a
Notes to Basic Financial Statements
December 31 2008
Debt service payments for the City and food service contract debt are as follows
Principal Interest
Years
2009 $ 1 002 226 149 054
2010 1,002,226 149,054
2011 1 002 226 149,054
2012 1 002 226 149 054
2013 1 002 241 149 054
2014—2018 2 805 838 919 162
$ 7 816 983 1,664 432
(I) Commitments and Contingencies
MECA entered into a long term contract for food service operations in November 2001 The terms
of the contract commit MECA to a 10 year CPI indexed annual payment to the contractor of
$672 663 for the year ended June 30, 2008 There are incentive provisions in the contract that may
result in additional payments to the contractor Such incentives totaled $168 166 for the year ended
June 30 2008
(g) Lease Agreements
MECA leases energy systems equipment and other various equipment Lease expense was$1 129 for
the year ended June 30 2008 The energy systems lease was paid in full during January 2007 As a
result of the lease being paid in full during January 2007 MECA has recorded a prepaid expense
which will be amortized to lease expense over the remaining term of the original lease
(h) Employee Benefits
MECA has established a 401(k) profit sharing plan for all employees Participants can contribute up
to 15% of their pretax compensation subject to IRS limitations MECA at its discretion may make
matching contributions equal to a discretionary percentage of the participant s elective deferrals to be
determined by MECA MECA at its discretion may also make profit sharing contributions No
profit sharing contributions were made to the plan during the year ended June 30 2008
(i) Deferred Compensation
Effective November 18, 2004 certain MECA employees were able to participate in a nonqualified
deferred compensation plan in the form of a Rabbi Trust The Plan is intended to qualify as a plan
described in Section 201(2)of the Employee Retirement Security Act and is maintained primarily for
the purpose of providing deferred compensation for a select group of management or highly
compensated employees MECA contributes a specified amount to the employees accounts on an
annual basis The value of debt and equity securities held in the Rabbit Trust at June 30 2008 was
$76 883 and is included m investments
81
rtra!'_
REQUIRED SUPPLEMENTARY INFORMATION
(Other than MD&A)
Schedule
CITY OF OMAHA NEBRASKA
Schedule of Revenues Expenditures and /`_?
Changes in Fund Balances—Budget and Actual—General Fund ^" ���- :
Year ended December 31 2008 �' ;
Vanance with
final budget
Budgeted amounts positive
Ongmal Final Actual (negative)
Revenues
Property tax S 60 919 217 60 919 217 61 795 651 876 434
Motor vehicle taxes 9 009 500 9 009 500 9 374 405 364 905
City sales and use tax 122 000 000 122 000 000 121 532 796 (467 204)
Busmess taxes 31 767 000 31 767 000 32 921 017 1 154 017
Licenses and permits 8 732 400 8 732 400 8 155 504 (576 896)
Intergovernmental revenues 8 946 200 8 946 200 9 437 282 491 082
Charges for services 18 306 119 18 306 119 19 842 674 1 536 555
Interest income 4 400 000 4 400 000 3 847 009 (552 991)
Rent and royalties 150 000 150 000 104 961 (45 039)
Miscellaneous 1 566 000 1 566 000 1 685 643 119 643
Revenue from annexation — — 909 777 909 777
Total revenues 265 796 436 265 796 436 269 606 719 3 810 283
Expenditures
General government
Mayors office $ 1 036 451 1 036 451 946 949 89 502
City clerks 642 184 642 184 548 787 93 397
City council 1 042 918 1 042 918 1 045 114 (2 196)
Law 3 611 722 3 611 722 3 327 073 284 649
Human resources 1 686 182 1 686 182 1 690 591 (4 409)
Human nghts and relations 885 516 885 516 807175 78 341
Finance 2 247 498 2 247 498 2 276 814 (29 316)
Planning 6 189 060 6 189 060 6 612 669 (423 609)
Employee benefits 20 204 634 20 204 634 19 359 233 845 401
Other agencies 30 425 288 27 89s 388 24 771 327 3 122 061
Total general government 67 971 453 65 439 553 61 385 732 4 053 821
Public safety
Fire 68 218 300 70 750 200 74 905 411 (4 155 211)
Police 91 931 522 91 931 522 93 597 942 (1 666 420)
Total public safety 160 149 822 162 681 722 168 503 353 (5 821 631)
Public works
Environmental 13 465 435 13 465 435 12 746 857 718 578
Street and highway 1 746 872 1 746 872 2 241 540 (494 668)
Total public works 15 212 307 15 212 307 14 988 397 223 910
Culture and recreation
Parks and recreation 17 400 010 17 400 010 17 887 259 (487 249)
Libraries 8 312 587 8 312 587 8 173 587 139 000
Convention and tourism — — — —
fotal culture and recreation 25 712 s97 25 712 597 26 060 846 (348 249)
Total expenditures 269 046 179 269 046 179 270 938 328 (1 892 149)
(Deficiency)excess of revenues
over expenditures (3 249 743) (s 249 743) (1 331 609) (1 918 134)
Net changes m fund balances (3 249 743) (3 249 743) (1 331 609) (1 918 134)
Fund balances—begmnmg of year 3 249 743 3 249 743 6 555 432 (3 305 689)
Lapsed encumbrances — — 423 589 (423 589)
Transfer—Contingency Liability Fund — — (200 000) 200 000
Transfer—Stomiwater Fund — — 322 162 (322 162)
Fund balances—end of year S— — — 5 769 574 (5 769 5741
See accompanying notes to schedule of revenues expenditures and changes in fund balances—budget and actual—General Fund
82
CITY OF OMAHA,NEBRASKA im
Notes to Schedule of Revenues,Expenditures r �;
and Changes in Fund Balances—and Actual—General Fund ' : s
Year ended December 31 2008
(1) Budget and Budgetary Accounting
The Mayor is required by the City Charter to prepare and submit an annual budget to the City Council A
budget is prepared for the general fund and all special revenue funds exclusive of all grant funds and the
service type special assessments fund These budgets are prepared pnmanly on a cash basis for revenues
and modified accrual basis for expenditures The budget presented reflects the original budget and the
revised budget prior to the closing ordinance In addition encumbrances are reported as expenditures for
budgetary purposes Under this system, purchase orders contracts, and other commitments for the
expenditure of funds are recorded as encumbrances in order to reserve a portion of the applicable
appropriation
Budgetary control is maintained by department/division and by the followmg category of expenditures
personnel services nonpersonnel services capital outlay and debt service All budget amendments must
be approved by the Mayor and/or City Council Unencumbered appropriations lapse at the end of the fiscal
year Encumbered funds are carried over to the ensuing fiscal year until utilized or canceled
The City Charter also requires the City Council each year to make an ad valorem tax levy for a smking
fund (debt service fund) that shall provide for principal and interest payments on the general obligation
bonded indebtedness of the City
Appropriations for certain special revenue funds and capital projects funds are controlled on a project basis
and are carried forward each year until the project is completed or grant funds are expended
Budgets are also prepared for the proprietary funds as a management control device The budgets for these
funds are prepared on a revenue and expenditure basis similar to the budgets for the governmental fund
types
(2) Reconciliation of Budget-Basis Revenues and Expenditures to GAAP
Revenue and expenditures presented on a non GAAP budget basis of accounting differ from the revenues
and expenditures presented in accordance with GAAP because of the different treatment of encumbrances
and accruals(revenue recognition)
In addition Section 5 14 of the City of Omaha s Home Rule Charter requires in relevant part that the
year end general fund balance be applied as general fund revenue in the budget for the fiscal year two
years subsequent to that fiscal year Therefore the amount of the general fund carryover commg into a
particular fiscal year has already been determined Any general fund encumbrances at the end of a fiscal
year are not included in the year end general fund balance because those encumbrances will normally need
to be paid m the following fiscal year and cannot be held until the fiscal year two years subsequent to the
fiscal year when the encumbrance was incurred
83 (Continued)
CITY OF OMAHA,NEBRASKA 4,r�
Notes to Schedule of Revenues,Expenditures vzt;�,
and Changes in Fund Balances—and Actual—General Fund %Atte,
f
Year ended December 31 2008
All general fund encumbrances are charged to the appropriate accounts at the end of the fiscal year This
allows those funds to be kept separate from the year end general fund balance Therefore when the actual
payments to the vendors are required in the following fiscal year there are general fund moneys available
A reconciliation of the differences between the budgetary versus GAAP is presented below
General
fund
Budget basis
2007 carryover to 2009 $ 3 896 110
2008 carryover to 2010 1 873 464
Total budget basis 5 769 574
Basis differences
Taxes accrued 22 612 615
Accrued interest 473 762
Encumbrances 2 162 667
Inventories 647 796
GAAP basis $ 31 666 414
(3) Expenditures in Excess of Budget
Budgeted expenditures were exceeded in the following departments/divisions
Department/dmision Amount
General fund
City council $ (2 196)
Human resources (4 409)
Finance (29 316)
Planning (423 609)
Public safety
Fire (4 155 211)
Police (1 666 420)
Public works
Street and highway (494 668)
Parks and recreation (487 249)
84
CITY OF OMAHA,NEBRASKA 0I/
Schedule of Funding Progress and Employer Contributions �`4
Year ended December 31 2008
Civilian Plan Schedule of Funding Progress(Unaudited)
(Dollars m millions)
Actuarial UAAL as a
Actuarial accrued Unfunded percentage
value of liability(AAL) AAL Funded Covered of covered
Actuanal assets entry age (UAAL) ratio payroll payroll
valuation date (a) (b) (b a) (a/b) (c) ((b a)/c)
2008 $ 204 5 387 7 183 2 52 7% $ 56 4 324 8%
2007 294 7 369 0 74 3 79 9 54 0 137 6
2006 2920 3617 697 807 482 1446
2005 277 1 352 0 74 9 78 7 53 4 140 3
2004 270 8 327 9 57 1 82 6 53 2 107 3
2003 2501 3167 666 790 549 1213
Required Supplementary Information
Civilian Plan Schedule of Employer Contributions(Unaudited)
Annual Percentage Net
pension of APC pension
Fiscal year ended cost(APC) contributed obligation
2008 $ 9 089 878 59% $ (17 626 003)
2007 8 794 542 57 (13 910 207)
2006 6 135 462 67 (10 090 703)
2005 6 822 028 65 (8 100 275)
2004 6 815 746 65 (5 778 439)
2003 6 176 321 70 (3 411 896)
85 (Continued)
CITY OF OMAHA,NEBRASKA S
Schedule of Funding Progress and Employer Contributions tea,,tin ,"ri
irrE
Year ended December 31 2008 :
Uniformed Plan Schedule of Funding Progress(Unaudited)
(Dollars in millions)
Actuarial UAAL as■
Actuarial accrued Unfunded percentage
value of liability(AAL) AAL Funded Covered of covered
Actuanal assets entry age (UAAL) ratio payroll payroll
valuation date (a) (b) (b-a) (a/b) (c) ((b-a)/c)
2008 S 3659 9476 5817 386/ S 995 58464
2007 530 8 882 7 351 9 60 I 99 6 353 3
2006 507 6 801 1 293 5 63 4 91 7 320 1
2005 4,3 3 703 8 250 5 64 4 86 8 288 6
2004 420 3 543 9 123 6 77 3 82 1 150 5
2003 383 7 511 9 128 2 75 0 85 1 150 6
Uniformed Plan Schedule of Employer Contributions(Unaudited)
Annual Percentage Net
pension of APC pension
Fiscal year ended cost(APC) contnbuted obligation
2008 $ 37 671 425 58% $ (61 464 670)
2007 34 563 067 60 (45 494 051)
2006 30 917 700 65 (31 630 196)
2005 26 145 454 78 (20 884 106)
2004 22,487 399 75 (12 500 861)
2003 23 323 354 74 (6 788 891)
86 (Continued)
CITY OF OMAHA,NEBRASKA ON,
sa
Schedule of Fundmg Progress and Employer Contributions .Year ended December 31,2008
Postretlrement Obligation Schedule of
Funding Progress
Scbedule of Funding Progress(Unaudited)
UAAL as a
Actuarial Actuarial Unfunded percentage
value of accrued AAL Covered of covered
Actuarial assets liability(AAL) (UAAL) Funded ratio payroll payroll
valuation date (a) (b) (b-a) (a/b) (c) ((b-a)/c)
March 1 2008 S — 388 500 000 388 500 000 —/e S 153 600 000 249/
March 1 2006 — 307 500 000 307 500 000 — 153 700 000 200
87
SINGLE AUDIT SECTION
Schedule
CITY OF OMAHA NEBRASKA
Schedule of Expenditures of Federal Awards ►411!iA
Year ended December 31 2008 M:4'
Federal grantor/pass through CFDA 2008
grantor/program title Grant number number expenditures
U S Department of Health and Human Services
Direct program
Metropolitan Medical Response System N/A 93 585 S 785 717
U S Department of Homeland Secunty
Direct program
Assistance to Fire Fighters Grant Venous 97 044 576 523
%temperable Communications Equipment 2004 1NWX 0013 97055 5 477 507
Passed through Nebraska Emergency Management Agency
Urban Area Security Initiative 2005 GETS 0020 97 067 924 224
Urban Area Secunty Initiative 2006 GET6 0016 97 067 2 046 707
Federal Disaster Declaration 1770 Declaration 1770 97036 652412
Federal Disaster Declaration 1779 Declaration 1779 97 036 3 371 385
Total U S Department of Homeland Security 13 048 758
U S Department of Housing and Urban Development
Directprograms
Co Development Block Grants/Entitlement Grants B 04/05 MC 31 0002 14 218 7 013 177
Emergency Shelter Grants Program S 00/01 MC 31 0001 14 231 337 496
HOME Investment Partnership Program M 95/01 MC/DC 31 0203 14 239 2 783 059
Economic Development Incentive Various 14246 195 434
Fair Housing Assistance Program FF207K00/017008 14 401 92 644
Lead Based Paint Hazard Control Various 14 900 1 391 444
Shelter Plus Care N/A 14218 101750
Neighborhood Development Incentives B 01 NI NE OM 0014 14 246 175 954
Total U S Department of Housing and Urban Development 12 090 958
U S Department of Interior
Passed through Nebraska State Historical Society—Historic
Preservation Fund Grants in Aid 1005 15 904 27 400
US Department of Justice
Direct programs
Juvenile Justice&Delinquency 2006 JUX K073 16 540 734 398
Rural Domestic Violence&Child Victimization 2006 WRAX 0005 16'89 146 680
Grants to Fncourage Arrest Policies 2005 WEAX 0035 16 590 318 049
Public Safety Partnership and Community Policing Grants(COPS) Various 16 710 365 413
Weed&Seed Various 16 725 545 789
GREAT Grant Various 16737 114275
Justice Assistance Grant Various 16738 526 574
Paul Coverdell Forensic Sciences Improvement Grant Program 2007 CDBX 0021 16 742 94 950
2007 Edward Byrne Memonal Discretionary Grants Program 2007 DDBX 0604 16 580 160 764
Passed through State of Nebraska Commission on Law
Enforcement and Cnminal Justice
Juvenile Accountability Incentive Block Grants 06 JA 601&05 JA 601 16 523 98 419
Project Safe Neighborhoods Various 16 609 152 892
Metro Drug Task Force 06 D4 307&07 DA 306 16 738 182 052
Total U S Department of justice 3 440 255
U S Department of Transportation
Passed through State of Nebraska Department of Roads
Highway Planning and Construction Various 20205 9 342 456
NOHS Mini Grant Motorcycle Wireless Equipment C8 30 20600 20648
VOIDS Mini Grant Digital In Car Cameras 410 08 2 20 601 21000
Total U S Department of Transportation 9 384 104
U S Environmental Protection Agency
Passed through State of Nebraska Department of
Environmental Quality
Air Pollution Control Program Support BG997325 Al 66 001 70 500
Office of National Drug Control Policy
Direct Programs—High Intensity Drug Trafficking Area Various NA '173 481
Total expenditures of federal awards S 39 121 173
See accompanying independent auditors report and notes to schedule of expenditures of federal awards
88
CITY OF OMAHA,NEBRASKA
_m.
Notes to Schedule of Expenditures and Federal Awards
Year ended December 31 2008
(1) Reporting Entity
The reporting entity for the schedule of expenditures of federal awards (SEFA) is the same as that
disclosed in note 1 to the financial statements except for MECA which is audited separately
(2) Basis of Accounting
Amounts reported in the SEFA are on the accrual basis while the amounts reported on federal financial
reports are primarily on a cash basis
(3) Outstanding Loan Pnncrpal Balances
The following is a list of the outstanding principal balances of Community Development Block Grant and
related program loans due at December 31 2008
Community Development Block Grant $ 460 975
The following is the outstanding principal balance of the HOME Investment Partnership Program at
December 31 2008
HOME Investment Partnership Program $ 1 232 159
Current year loans of$0 are included in the SEFA
The following is a list of outstanding principal balances of capitalization grants for state revolving funds
and related program loans at December 31 2008
Zorinsky Project $ 391,677
Capitalization Grants for Clean Water State Revolving Funds 34 879 284
Total $ 35 270,961
* The City has no continuing compliance requirements for these loans outstanding and is presented for
informational purposes only
(4) Subrecipients
The City granted federal awards in the form of pass through awards to various subrecipients during the
year ended December 31 2008 in the amount of$9 229 284
89
KPMG
KPMG UP
Suite 1501 Suite 1600
Two Central Park Plaza 233 South 13th Street
Omaha NE 68102 Lincoln NE 68508 2041
Independent Auditors'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
The Honorable Mayor and Members
of the City Council
City of Omaha Nebraska
We have audited the financial statements of the governmental activities the business type activities, the
discretely presented component unit, each major fund and the aggregate remaining fund information of the
City of Omaha Nebraska (the City) as of and for the year ended December 31 2008 which collectively
comprise the City s basic financial statements and have issued our report thereon dated August 26 2009
Our report was modified to include a reference to other auditors and the adoption of Governmental
Accounting Standards Board Statement No 50 We conducted our audit in accordance with auditing
standards generally accepted in the United States of America and the standards applicable to financial
audits contained in Government Auditing Standards issued by the Comptroller General of the United
States Other auditors audited the financial statements of Metropolitan Entertainment and Convention
Authority (MECA) the discretely presented component unit as described in our report on the City s
financial statements The financial statements of MECA were not audited in accordance with Government
Auditing Standards This report does not include the results of the other auditors' testing of internal control
over financial reporting or compliance or other matters that are reported on separately by those auditors
Internal Control over Financial Reporting
In planning and performing our audit we considered the City s internal control over financial reporting as
a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial
statements but not for the purpose of expressing an opinion on the effectiveness of the City s internal
control over financial reporting Accordmgly we do not express an opinion on the effectiveness of the
City s internal control over financial reportmg
Our consideration of internal control over financial reporting was for the limited purpose described in the
preceding paragraph and was not designed to identify all deficiencies in internal control over financial
reporting that might be significant deficiencies or material weaknesses and therefore there can be no
assurance that all deficiencies, significant deficiencies or material weaknesses have been identified
However as discussed below we identified certain deficiencies in mternal control over financial reporting
that we consider to be material weaknesses and other deficiencies that we consider to be significant
deficiencies
A deficiency in internal control over financial reporting exists when the design or operation of a control
does not allow management or employees in the normal course of performing their assigned functions to
prevent or detect and correct misstatements on a timely basis A material weakness is a deficiency or
combination of deficiencies in internal control over financial reporting such that there is a reasonable
possibility that a material misstatement of the entity s financial statements will not be prevented or
detected and corrected on a timely basis We consider the deficiency in the City s internal control over
90
KPMGLLP US Imt di Pity t hp theUS
m mb f m f KPMG I t t I Sw p I
financial reporting described in the accompanying schedule of findings and questioned costs to be a
material weakness(Finding#08 01)
A significant deficiency is a deficiency or combination of deficiencies in internal control over financial
reporting that is less severe than a material weakness yet important enough to merit attention by those
charged with governance We consider the deficiency described m the accompanying schedule of findings
and questioned costs to be a significant deficiency in internal control over financial reporting (Finding
#08 02)
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City s basic financial statements are free of
material misstatement we performed tests of its compliance with certain provisions of laws regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts However providing an opinion on compliance with those
provisions was not an objective of our audit and accordingly we do not express such an opinion The
results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards
The City s response to the fmdmgs identified in our audit is described in the accompanying schedule of
findings and questioned costs We did not audit the City s response and accordingly, we express no
opinion on it
This report is intended solely for the information and use of the Mayor members of the City Council
management and federal awarding agencies and pass through entities and is not intended to be and should
not be used by anyone other than these specified parties
Kelpw(G L P
Omaha Nebraska
August 26 2009
91
KPMG
KPMG LLP
Suite 1501 Suite 1600
Two Central Park Plaza 233 South 13th Street
Omaha NE 68102 Lincoln NE 68508 2041
Independent Auditors'Report on Compliance with Requirements
Applicable to Each Major Program and on Internal Control over
Compliance in Accordance with OMB Circular A-133
The Honorable Mayor and Members
of the City Council
City of Omaha Nebraska
Compliance
We have audited the compliance of the City of Omaha Nebraska (the City) with the types of compliance
requirements described in the U S Office of Management and Budget(OMB) Circular A 133 Compliance
Supplement that are applicable to each of its major federal programs for the year ended December 31
2008 The City s major federal programs are identified in the summary of auditors' results section of the
accompanymg schedule of findings and questioned costs Compliance with the requirements of laws
regulations contracts, and grants applicable to each of its major federal programs is the responsibility of
the City s management Our responsibility is to express an opinion on the City s compliance based on our
audit
The City s financial statements include the operations of a discretely presented component unit
Metropolitan Entertainment and Convention Authority (MECA) Our audit described below did not
include the operations of MECA
We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America the standards applicable to financial audits contained m Government Auditing
Standards issued by the Comptroller General of the United States and OMB Circular A 133 Audits of
States Local Governments and Non Profit Organizations Those standards and OMB Circular A 133
require that we plan and perform the audit to obtam reasonable assurance about whether noncompliance
with the types of compliance requirements referred to above that could have a direct and matenal effect on
a major federal program occurred An audit includes examining on a test basis evidence about the City s
compliance with those requirements and performing such other procedures as we considered necessary in
the circumstances We believe that our audit provides a reasonable basis for our opinion Our audit does
not provide a legal determination on the City s compliance with those requirements
In our opinion the City complied in all material respects with the requirements referred to above that are
applicable to each of its major federal programs for the year ended December 31 2008
Internal Control over Compliance
The management of the City is responsible for establishing and maintaining effective internal control over
compliance with requirements of laws regulations contracts and grants applicable to federal programs In
planning and performing our audit we considered the City s internal control over compliance with
requirements that could have a direct and material effect on a major federal program in order to determine
our auditing procedures for the purpose of expressing our opinion on compliance but not for the purpose
92
KPMGLLP US lint ell bltyp I hp th US
m mb f m f KPMG I t t I Sw p t
of expressing an opinion on the effectiveness of internal control over compliance Accordingly, we do not
express an opinion on the effectiveness of the City s internal control over compliance
Our consideration of internal control over compliance was for the limited purpose described in the
preceding paragraph and would not necessarily identify all deficiencies in the City s internal control that
might be significant deficiencies or material weaknesses as defined below However as discussed below,
we identified certain deficiencies m internal control over compliance that we consider to be significant
deficiencies
A control deficiency in an entity s internal control over compliance exists when the design or operation of
a control does not allow management or employees in the normal course of performing their assigned
functions, to prevent or detect noncompliance with a type of compliance requirement of a federal program
on a timely basis A significant deficiency is a control deficiency or combination of control deficiencies
that adversely affects the entity s ability to administer a federal program such that there is more than a
remote likelihood that noncompliance with a type of compliance requirement of a federal program that is
more than inconsequential will not be prevented or detected by the entity s internal control We consider
the deficiencies in internal control over compliance described in the accompanying schedule of findings
and questioned costs as item 08 03 and 08 04 to be significant deficiencies
A material weakness is a significant deficiency or combmation of significant deficiencies that results in
more than a remote likelihood that material noncompliance with a type of compliance requirement of a
federal program will not be prevented or detected by the entity s internal control We did not consider any
of the deficiencies described in the accompanying schedule of findings and questioned costs to be material
weaknesses
The City s response to the findings identified in our audit is described in the accompanying schedule of
findings and questioned costs We did not audit the City s response and accordingly we express no
opinion on it
This report is intended solely for the information and use of the Mayor members of the City Council
management and federal awarding agencies and pass through entities and is not intended to be and should
not be used by anyone other than these specified parties
KIPw(GG LCP
Omaha Nebraska
August 26 2009
93
CITY OF OMAHA,NEBRASKA � (j�
Schedule of Findings and Questioned Costs Enka
Year ended December 31 2008
(1) Summary of Auditors'Results
(a) The type of report issued on the basic financial statements Unqualified opinions
(b) Material weaknesses m mtemal control were disclosed by the audit of the basic financial statements
Yes
Significant deficiencies in internal control were disclosed which were not material weaknesses Yes
(c) Noncompliance which is material to the basic financial statements No
(d) Material weaknesses in internal control over major programs No
Significant deficiencies in internal control over major programs which were not material
weaknesses Yes
(e) The type of report issued on compliance for major programs Unqualified opinions
(f) Any audit findings which are required to be reported under Section 510(a)of OMB Circular A 133
No
(g) Major programs Highway Planning and Construction (20205), Lead-Based Paint Hazard
Control (14 900), Interoperable Communications Equipment (97 055), Urban Area Security
Initiative(97 067), and Public Assistance Grants(97 036)
(h) Dollar threshold used to distinguish between Type A and Type B programs $1,173,960
(i) Auditee qualified as a low risk auditee under Section 530 of OMB Circular A 133 No
(2) Findings Related to the Basic Financial Statements Reported in Accordance with Government
Auditing Standards
Finding#08-01
Program Not applicable
Federal Grantor Agency Not applicable
Critena Governments are required to establish internal controls over access to IT systems
Condition The City s IT service provider did not have adequate controls over access to fmancial systems
Specifically, 20 active accounts had system administrator responsibilities Twelve terminated employees
had access to the system Password complexity was not enforced User accounts did not have password
expirations
Questioned Costs None
Context IT general mtemal controls were determined to be ineffective
Cause The service provider has not effectively monitored access
94 (Continued)
CITY OF OMAHA,NEBRASKA ak
Schedule of Findings and Questioned Costs t,et) in
rLs�
Year ended December 31 2008 t�
Effect Errors were not identified and audit procedures were adjusted accordingly
Recommendation We recommend that the City's service provider establish internal controls over access
to IT information systems Access to the system administrator function should be limited to a few
individuals Password complexity should be enforced Terminated employees should be removed from the
system
Management Response The service provider has adopted additional access controls during June 2008
Annually, all user accounts are reviewed by the City to ensure the appropriate people have access to the
System
Responsible Official Al Herink
Finding#08-02
Program Not applicable
Federal Grantor Agency Not applicable
Cntena The City should have internal controls in place to record expenses in the correct year
Condition An invoice for $3 291 965 for a transfer of land was recorded as an accrued liability in the
City s 2008 financial statements however it should not have been recorded until 2009
Questioned Costs None
Context An audit adjustment of$3 291,965 was made
Cause The City s internal controls failed to catch a material error
Effect The financial statements were misstated
Recommendation The review process over disbursements needs to be strengthened
Management Response The City s controls for monitoring and recording year end expenditures are
thorough and quite extensive After year end payments are initially approved for payment by the receiving
department payments are then reviewed by trained disbursements personnel Payments in excess of
$25 000 are reviewed and approve by the project accountant In the future, the Finance Department will
run a report of all year-end payment in excess of$25,000 and perform an additional review
Responsible Official Al Hennk
(3) Findings and Questioned Costs Relating to Federal Awards
Finding#08-03
Programs 20 205 Highway Planning and Construction pass through grant number 0317319 97 044
Assistance to Firefighters Grant grant number EMW 2006 FG 07794 02653 02660 and FF 04370, and
97 036 Federal Disaster Declarations 1770 and 1779
95 (Continued)
CITY OF OMAHA,NEBRASKA ��
Schedule of Findings and Questioned Costs ; t."+�
��1
Year ended December 31 2008
Federal Grantor Agency U S Department of Transportation and U S Department of Homeland
Security
Cntena The City is responsible to prepare the Schedule of Expenditures of Federal Awards (SEFA) m
accordance with OMB Circular A-133
Condition The City incorrectly stated expenditures on the SEFA for CFDA No 20 205 by$5 77 million
and expenditures for CFDA Nos 97 036 and 97 044 were omitted from the SEFA resulting m an
understatement of$4 61 million
Questioned Costs None
Cause/Context Internal controls over preparation of the SEFA are ineffective
Effect CFDA No 20 205 was overstated by $5 77 million and CFDA Nos 97 036 and 97 044 were
understated by$4 61 million The SEFA was subsequently corrected
Recommendation We recommend the City assign responsibility to review the SEFA after preparation
Management Response The City's Grant Accountant will be responsible to coordinate the completion of
the Schedule of Expenditures of Federal Awards A financial system report will be prepared that lists all
awards with any fiscal year activity This report will be reconciled with the SEFA schedule by the City s
Grant Accountant After the SEFA schedule is completed, a fmal review will be preformed by the
Accounting Manager Corrective action will be completed by December 2009
Responsible Official Al Hermk
Finding#08-04
Programs Urban Area Security(97 067)grants 2005—GETS 0020 and 2006—GET6 0016
Federal Grantor Agency U S Department of Homeland Security
Cntena The City is required to ensure that subrecipients expending more than $500 000 or more in
Federal awards have met the audit requirements of OMB Circular A 133
Condition The City did not have internal controls in place to obtain and review subrecipient audits
Questioned Costs None
Cause/Context Internal controls over subrecipient monitoring are ineffective The City did not obtain
subrecipient A 133 reports for two out of two subrecipients selected for review
Effect Noncompliance or control deficiencies at subrecipients could go undetected
Recommendation Procedures should be established to obtam subrecipient audit reports
96 (Continued)
CITY OF OMAHA,NEBRASKA T
-; _.',I
Schedule of Fmdmgs and Questioned Costs �r��c,��3
Year ended December 31,2008 +k`es
Management Response It will be the City's responsibility to generate and keep up to date a subrecipient
listing The City s grant accountant will monitor subrecipient grantees and request audit reports when
necessary Quarterly the Manager of Budget and Accounting will review this process
Responsible Official Al Hermk
97
CITY OF OMAHA,NEBRASKA �rk
Notes to Basic Financial Statements i.�,'
rtr
December 31 2008
74
Enterprise Funds Revenue Bonds
First
Original payable Series date December 31
Amount issued Issue semiannually due callable 2008
$ 10 000 05/20/03 Elkltom Sewer Revenue 125—3 70 2003—2013 2008 $ 1 060 000
53 170 000 11/15/06 Sanitary Sewer System
Revenue Bonds Series 2006 4 00—4 50 2006—2036 2016 52 235 000
109 750 000 05/15/07 Convention Center Hotel
Revenue Series 2007A 4 00—5 00 2010—2035 2017 109 750 000
$ 163 045 000
Special Obligation Bonds—Governmental activities
Effective
interest rate First
Original payable Series date December31
Amount issued Issue semiannually due callable 2008
$ 29 800 000 2/1/02 Riverfront Redevelopment
Project Series 2002A 4 00%—5 50% 2003—2032 2012 $ 25 955 695
38 535 000 3/25/08 Riverfront Redevelopment
Refund Series 2008 4 00—6 40 2002—2026 2012 38 535 000
$ 64 490 695
Business-Type Activates
Long term debt at December 31 2008 comprises the following individual issues
Special Obligation Bonds—Business type activities(Sewer Revenue fund)
Effective
interest rate First
Original payable Series date December 31
Amount issued Issue semiannually due callable 2008
$ 22 200 000 2/1/02 Riverfront Redevelopment
Project Series 2002A 4 00°/—5 50/° 2003—2032 2012 $ 19 334 305
$ 19 334 305
45 (Continued)
e, 41/
No //,c3
Independent Auditor's Report of Examination
City of Omaha, Basic Financial Statements and
A-133 Reports, December 31, 2008
35 y1 .
RECEIVED
Presented to Council Motion to receive
and September 29 2009
,)-Yea
On fJJ�
Buster Brown
City Clerk