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RES 2009-1123 - Omaha downtown improvement district association financial statements and independent auditor's report I Omaha Downtown Improvement District Association I September 16 2009 Omaha City Council do Warren Weaver 1819 Farnam Street, LCI Omaha,NE 68183 Dear Warren Enclosed is a copy of the Omaha Downtown Improvement Distract Association's(DID) Financial Statements and Independent Auditor s Report for the period of February 1 2008 through March 31 2009 as required by the contract signed by the City of Omaha,the DID and the Downtown Business Improvement District(BID No 6874) Please do not hesitate to contact me if you have any questions Si J..-ph r Moise, Tr r C Mayor Jim Suttle Bernard in den Bosch Curtis Christiansen To tY ALL CM$ DIST 01 GIST#2 DIST #3 DIST 14 DIST 15 -- DIST 06 DIST B7 CH OF",TAFF ✓ STAFr CITY CLERK_ LOBBYIST 1144 SEP 1 , mat Las_agit 1620 Dodge Street Suite 140 I Omaha NE 68102 I www omahadowntown org I (402)916 1796 office I (402)916 1798 fax TABLE OF CONTENTS Page INDEPENDENT AUDITOR S REPORT 2 FINANCIAL STATEMENTS Statement of financial position 3 Statement of activities 4 Statement of cash flows 5 Notes to financial statements 6 10 SUPPLEMENTAL SCHEDULE Schedule of functional expenses 12 H -%s &ASSOCiATES,LLC (rtl dl N 4i.WNaI d( nuhw INDEPENDENT AUDITOR S REPORT To the Board of Directors Omaha Downtown Improvement District Association We have audited the accompanying statement of financial position of Omaha Downtown Improvement District Association (the DID) as of March 31, 2009 and the related statements of activities and cash flows for the period February 1 2008 through March 31, 2009 These financial statements are the responsibility of the DID s management Our responsibility is to express an opinion on these financial statements based on our audit We conducted our audit in accordance with auditing standards generally accepted in the United States of America Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement An audit includes examining, on a test basis evidence supporting the amounts and disclosures in the financial statements An audit also includes assessing the accounting pnnciples used and significant estimates made by management, as well as evaluating the overall financial statement presentation We believe that our audit provides a reasonable basis for our opinion In our opinion the financial statements referred to above present fairly in all material respects the financial position of Omaha Downtown Improvement District Association as of March 31 2009 and the changes in its net assets and its cash flows for the period February 1 2008 through March 31 2009, in conformity with accounting principles generally accepted in the United States of America Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole The schedule of functional expenses on page 12 is presented for purposes of additional analysis and is not a required part of the basic financial statements Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion is fairly stated in all material respects in relation to the basic financial statements taken as a whole 4- LtA4,ete J L L C Hayes & Associates L L C Omaha Nebraska July 29 2009 \estroads Pointe 1011 N 98th St Suite 200 Om tha \ebt tskt 68114 402 390 't80 TI I 40) 490 0885 IEiX xxx hares cpa corn CPA n cmn un ImIThvl Omaha Downtown Improvement District Association STATEMEN1 OF FINANCIAL POSI I ION March 31 2009 ASSF TS (URRFNT ASSET S Cash and cash equivalents $ 267 418 Unconditional promises to give 40 763 Accrued interest receivable 55 Prepaid expenses 765 total current assets 309 001 EQU1PMFNT Equipment 2 518 Liss accumulated dcpreciation (504) 1 otal l quipment 2 014 I otal assets $ 311 015 1 IABILII IF S AND NI 1 ASSETS CURREN I LIABILI I IFS Accounts payable $ 363 Total current liabilities 363 NF1 ASSETS Unrestricted 269 889 I emporartll restricted 40 763 Total net assets 310 652 Total liabilities and ntt assets $ 311 015 See accompany ing notes and independent auditors report 3 Omaha Dom ntown Improvement District Association STA1 FMENT Of ACTIVI I IFS For the,period February 12008 through March 31 2009 7 emporanly Unrestricted Restricted Iota) REV!NUCS AND RECLASSIFICATIONS Contributions $ 603 410 $ 45 763 $ 649 173 Grants 100 68 896 68 996 Interest income 1 432 1432 Net assets released from restrictions 73 896 (73 896) Total revenues and reclassifications 678 838 40 763 719 601 EXPENSES Program services 299 517 299 517 Management and general 109 432 109 432 Total expenses 408 949 408 949 CHANGE IN NET ASSFTS 269 889 40 763 310 652 NFT ASSETS BEGINNING Of PERIOD NL l ASSFTS END Of PE RIOD $ 269 889 $ 40 763 $ 310 652 See accompany ing notes and independent auditors report 4 Omaha Downtown Improvement District Association S IATEMENT OF CASH FLOWS For the period February 1 2008 through March 31 2009 CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets $ 310 652 Adjustments to reconcile change in net assets to net cash from operating activities Depreciation 504 Change in accrued interest receivable (55) Change in prepaid expenses (765) Change in unconditional promises to give (40 763) Change in accounts payable 363 NET CASH FROM OPERATING ACTIVITIES 269 936 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of equipment (2 518) NET CASH FROM INVESING ACTIVITIES (2 518) NET CHANGE IN CASH AND CASH EQUIVALENTS 267 418 CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS END OF PERIOD $ 267 418 See accompanying notes and independent auditors report 5 Omaha Downtown Improvement District Association NOTES TO FINANCIAL STATEMENTS For the period February 1 2008 through March 31 2009 NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The following is a summary of the significant accounting policies of the Omaha Downtown Improvement Distnct Association 1 Organization The Omaha Downtown Improvement District Association (the DID) is a 501(c)(6) trade association representing businesses residents and property owners within a defined boundary in downtown Omaha The DID board was established by election in 2007 and is governed by the Downtown Business Improvement District Board (DBID) whose board members were appointed by the Mayor The DID is compnsed of a volunteer-elected board of representatives from within the district who work in collaboration to implement the mission of a cleaner greener safer Downtown Omaha The DID was created under the laws of the State of Nebraska and the City of Omaha by local ordinance and contracts with the City of Omaha to provide specified activities work and improvements in the district The DiD has a March 31 fiscal year-end, with a requirement to file a reviewed financial statement with the City on an annual basis A summary of the DID's major programs are as follows Advocacy & Communication Provides internal and external communication of the DID issues and promotions The DID has established a comprehensive website periodic newsletters and has participated in long term planning for the downtown area Clean & Safe Establishes relationships and programs that enhance the safety and cleanliness of Downtown Omaha The DID has worked aggressively to establish relationships with City departments and local neighborhood and community groups to help facilitate communication and the sharing of public safety administration In addition to public safety, the DID established a pedestrian recycling program and has contracted enhanced cleaning services of downtown alleys sidewalks and bus shelters Public Amenities Enhances the general landscape of downtown Omaha 1 he DID has implemented a tree planting program and is considering additional efforts to improve the look and feel of downtown - 6 Omaha Downtown Improvement District Association NOTES TO FINANCIAL STATEMENTS For the penod February 1, 2008 through March 31 2009 NO I E A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED 2 Basis of Accounting The financial statements have been prepared on the accrual basis of accounting Revenues are recorded when earned and expenses are recorded when incurred The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures Accordingly actual result could differ from those estimates 3 Basis of Presentation The DID follows Statement of Financial Accounting Standards (SFAS) No 117 Financial Statements of Not for-Profit Organizations in the preparation of its financial statements Under SFAS No 117 the DID is required to report information regarding its financial position and activities according to the following three classes of net assets a Unrestricted net assets include those net assets whose use is not restricted by donors even though their use may be limited in other respects such as by contract or by Board designation b Temporarily restricted net assets are those net assets whose use by the DID has been limited by donors to later penods of time or after specified dates or to specified purposes c Permanently restricted net assets are those net assets whose use by the DID has donor imposed restrictions that stipulate resources be maintained permanently but permit the DID to use up or expend part or all of the income(or economic benefits)denved from the donated assets 4 Cash and Cash Equivalents For the purposes of the statement of cash flows the DID considers all highly liquid investments with an initial matunty of three months or less to be cash and cash equivalents, except as noted below Cash and cash equivalents designated for long term purposes or received with donor-imposed restnctions limiting their use to long term purposes are not considered cash and cash equivalents for the purposes of the statement of cash flows 7 - Omaha Downtown Improvement District Association NOTES TO FINANCIAL STATEMENTS For the period February 1, 2008 through March 31 2009 NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED 5 Allowance for Doubtful Accounts The DID considers all receivables to be fully collectible, therefore, no allowance for doubtful accounts is present at March 31 2009 6 Equipment Equipment is stated at cost, or in the case of donated assets at the fair value at the date of the gift Depreciation of equipment is provided on a straight line basis over the estimated useful lives of the property It is the DID s policy to capitalize property and equipment over$500 7 Income Tax Status The DID is exempt from income taxes under Section 501(c)(6) of the Internal Revenue Code Accordingly, no income taxes are included in these financial statements The DID is not considered a private foundation 8 In-Kind Contributions and Donated Services The DID records various types of in-kind contributions Contributed services are recognized at fair value if the services received (a) create or enhance long lived assets or (b) require specialized skills are provided by individuals possessing those skills and would typically need to be purchased if not provided by donation Contributions of tangible assets are recognized at fair value when received The amounts reflected in the accompanying financial statements as in kind contributions are offset by like amounts included in expenses or additions to property and equipment 9 Revenues and Reclassifications Contributions are recognized when the donor makes a promise to give to the DID that is in substance, unconditional Contributions that are restricted by the donor are reported as increases in temporarily restricted or permanently restricted net assets, depending on the nature of the restriction When a restriction expires temporarily restricted net assets are reclassified to unrestricted net assets 8 Omaha Downtown Improvement District Association NOTES TO FINANCIAL STATEMENTS For the period February 1, 2008 through March 31 2009 NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED 10 Functional Expenses The costs of providing various programs and other activities have been summarized on a functional basis in the statement of activities and in the schedule of functional expenses Accordingly, certain costs have been allocated among the programs and supporting services benefited Costs allocated between program and supporting services are based on management s time estimates 11 Fair Value In management s opinion, the carrying value of short term assets and liabilities and liabilities approximate fair value NOTE B CONCENTRATION OF CREDIT RISKS The DID maintains cash balances at one financial institution in Omaha, Nebraska Accounts at this institution are insured by the Federal Deposit Insurance Corporation (FDIC) In October 2008 congress raised the basic FDIC coverage to $250 000 per depositor until December 31 2013 As of March 31 2009, the uninsured balance is $24,979 The DID believes it is not exposed to any significant credit nsk on its cash balances NOTE C UNCONDITIONAL PROMISES TO GIVE Unconditional promises to give consist of amounts due from the special levy on property in the district assessed by the City of Omaha and passed through as a contnbution to the DID The promises to give of$40 763 at March 31 2009 are due within one year NOTED LEASES The DID entered into a non-cancelable lease for office space commencing January 1 2008 This lease expires June 30, 2009 Under the agreement rent expense is $663 per month Total rent expense was $9,282 for the penod February 1 2008 through March 31 2009 Future minimum payments under this lease are $1 990 for the year ended March 31 2010 - 9 - Omaha Downtown Improvement District Association NOTES TO FINANCIAL STATEMENTS For the penod February 1 2008 through March 31 2009 NOTE E TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets at March 31, 2009 consist of promises to give receivable in future periods for operations These net assets are restricted due to time NOTE F CONTRIBUTED MATERIALS AND SERVICES The DID received contributed security surveillance equipment dunng the period February 1 2008 through March 31, 2009, with a fair value on the date of donation of$5 000 The donated equipment was used for a cleaning& safety project The DID received contributed legal services during the period February 1, 2008 through March 31, 2009 with a fair value on the dates of donation of $20 627 The contributed services were provided in connection with administrative activities of the DID NOTE G RETIREMENT PLAN During the period February 1 2008 through March 31, 2009 the DID provided retirement benefits to its employees through a defined contribution 401(k) plan The plan was initially effective on January 1, 2008 and was terminated as of March 26, 2009 While effective, the plan covered substantially all employees and provided matching contributions at a discretionary rate to be determined annually For the period ended March 31, 2009, the DID contributed $861 to the plan NOTE H CONCENTRATIONS Unconditional promises to give at March 31, 2009 consist of promises from one donor The DID received 96% of its contributions from one donor for the period February 1 2008 through March 31 2009 In addition the balance of unconditional promises to give for the period is due from this donor 10- SUPPLEMENTAL INFORMATION m a N h in v er - eO - oo N $r- v F A) N 0 O r SiP r Ps P 2n 2f1. e N e --v a el N 00 of N e .2. w w1 n '0r n — n'Doan v "' n E = =� M n . a - .O o NOO al EW n �` n av, - N - a N o gu — W 9 g S w w u_ N .eei m oroa Cr 0 en .roro el en crec 00 IN In r t Vn n e - r - a N-� r r r CO E aa y ° o '1 a 2 2 5 N a w w Y o 7 • v.t n `o c WI .o e• - ro a r CC e r .o ci V a.a.L ~ et CD O Wr b ' O n 0D a - P N ~ ci 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