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RES 1996-3031 - Various purpose and refunding bonds series 1996 tAAHA,�F RECEIVED Finance Department 0 F ap 1 -�(�� Omaha/Douglas Civic Center 3 �irnr�y�,� C &� �rltl((iJ'+ty�=� 96 NO V 18 p I; 4 q 1819 Farnam Street,Suite 1004 ® ,[14r r��; Omaha,Nebraska 68183-1004 °�F� } '' ""ti (402)444-5416 Ao C{T C�. Telefax(402)444-5423 Q M A H!�, N E f3 R LI S i'\,s Louis A.D'Ercole City of Omaha Acting Director Hal Daub,Mayor November 19, 1996 Honorable President and Members of the City Council, GENERAL OBLIGATION BONDS VARIOUS PURPOSE AND REFUNDING BONDS - SERIES OF 1996 $17,720,000 Submitted for your consideration is a Resolution regarding the sale of General Obligation Bonds authorized at elections held on May 12, 1992,November 3, 1992 and May 11, 1993, and General Obligation Refunding Bonds authorized by law. The Resolution approves or authorizes the . following: 1. Approves the following exhibits attached to the Resolution and made a part hereof: Exhibit A- Preliminary Official Statement Exhibit B - Official Notice of Sale Exhibit C - Official Bid Form 2. Authorizes the Acting Finance Director to certify and deliver the Preliminary Official Statement on behalf of the City of Omaha. 3. Authorizes and directs the City Comptroller to publish the Official Notice of Sale in _ such a manner as he deems advisable. 4. Authorizes and directs the City Clerk to receive sealed proposals on said Official Bid Form for the.Various Purpose and Refunding Bonds, Series of 1996 until 11:00 a.m., Omaha time, December 17, 1996. Respectfully submitted, Referred to City Council for Consideration: Qrx.e._4.4 , . ///h4 ' C7-..,_.::Cf....122-D 1 i" • . #//5/s Louis A. D'Ercole Date Mayors Office/Titl Date Acting Finance Director P:\FIN\5237.SKZ 0 I S• 3 EXHIBIT A R• c in 'c PRELIMINARY OFFICIAL STATEMENT DATED NOVEMBER 19, 1996 ' .2 •' -' Ratings: Moody's: w , Standard&Poor's: s T (See"RATINGS" herein) v c E o ' In the opinion of Bond Counsel, under existing laws, regulations, rulings and judicial decisions, interest on the Series 1996 Bonds is excluded from .. •- gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals g and corporations, except that such interest must be included in the "adjusted current earnings"of certain corporations for purposes of calculating alternative o y minimum taxable income. Bond Counsel also is of the opinion that, under existing laws of the State of Nebraska, such interest is exempt from Nebraska state a v income taxation as long as it is exempt for purposes of the federal income tax. See "THE BONDS—Tax Exemption"herein. •u v a y R r T $17,720,000 c C ' -a y CITY OF OMAHA,NEBRASKA g a [Omaha Seal] VARIOUS PURPOSE AND REFUNDING BONDS o SERIES OF 1996 w - o T.c al . E O O C c >, c o Dated: December 1, 1996 • Due: December 1, as shown below E w The Series of 1996 Bonds(the"Series 1996 Bonds")are issuable in fully registered form in the denominations of$5,000 and integral multiples thereof. E• c Interest is payable semiannually on June 1 and December 1 of each year,commencing June 1, 1997,by check or draft mailed to the registered owner as of the ),;'‘ ' applicable record date at the address shown on the books of registry maintained by First National Bank of Omaha, as Registrar. Principal of the Series 1996 E ° Bonds is payable upon presentation and surrender of the Series 1996 Bonds at the principal corporate office of First National Bank of Omaha,as Paying Agent, c c in Omaha, Nebraska. The Series 1996 Bonds are subject to optional redemption prior to maturity,as more fully set forth herein. = R .8 o 'u -o The Series 1996 Bonds initially will be registered in the name of Cede&Co.,as nominee for The Depository Trust Company,New York,New York H ° ("DTG"), which will act as securities depository for the Series 1996 Bonds. Purchases of the Series 1996 Bonds may be made only in book-entry form in u R . authorized denominations by credit to participating broker-dealers and other institutions on the books of DTC as described herein. Purchasers will not receive E- ° g certificates evidencing the Series 1996 Bonds. Principal of,premium,if any,and interest on the Series 1996 Bonds will be payable by the paying agent directly y ,_ to DTC as the registered owner thereof. Disbursement of such payments to the DTC Participants is the responsibility of DTC,and disbursement of such payments E ° ° to the beneficial owners is the responsibility of the DTC Participants and the Indirect Participants,as more fully described herein. Any purchaser of a beneficial -o ;, 3 interest in the Series 1996 Bonds must maintain an account with a broker or dealer who is,or acts through,a DTC Participant to receive payment of the principal y• o ti of, premium,if any,and interest on such Series 1996 Bonds. See "THE BONDS—Book-Entry-Only System"herein. `o• y ' The proceeds of the Series 1996 Bonds will be used to pay the costs of acquiring equipment and constructing improvements relating to the City's 0 .y ' streets, sewer system,public facilities and parks and recreation system and to.refund debt assumed by the City as a result of its annexations of five sanitary and E• 0 improvement districts: E v c The Series 1996 Bonds are payable from ad valorem taxes,unlimited as to rate and amount,levied by the City against all taxable property in the City. o E c The full faith and credit of the City are pledged to the prompt payment of the principal of and interest on the Series 1996 Bonds. • c o cn . MATURITY SCHEDULE as L td U N Zv o 5 s Maturity Date Principal Interest Maturity Date Principal Interest c o (December 1) Amount Rate Yield (December 1) Amount Rate Yield , .2 0 1997 $1,180,000 % % 2007 $825,000 % % c .c, , 1998 1,170,000 2008 785,000 2 a` •30 1999 1,170,000 2009 785,000 • o 12 o 2000 1,160,000 2010 785,000 2001 990,000 2011 785,000 N o m °c 2002 920,000 2012 785,000 R € c 3 2003 920,000 2013 675,000 2014 675,000 o E c 2004 920,000 2015 675,000 o -s > > 2005 920,000 c .J c 2006 920,000 2016 675,000 E c 2 (Accrued Interest To Be Added) E 3 The Series 1996 Bonds are being offered when,as and if issued by the City and accepted by the original purchaser,subject to the approval of • tilegality of the Series 1996 Bonds by Kutak Rock,Bond Counsel,and to certain other conditions. It is expected that delivery of the Series 1996 Bonds will 7 € c be made on or about December 30, 1996,at DTC against payment therefor. 5• c Dated: , 1996. C• .2 9, 0. a' O 41( 0 L y F,E-. . CITY OF OMAHA, NEBRASKA HAL DAUB, MAYOR CITY COUNCIL Lee Terry, President Frank Christensen, Vice President Lormong Lo Subby Anzaldo Paul Koneck Brenda Council Richard Takechi MAYOR'S CABINET MEMBERS Louis A. D'Ercole Acting Finance Director Herbert M. Fitle City Attorney Jeffrey Johnson Planning Director George Davis Acting Human Relations Director James N. Skinner Chief of Police Thomas J. Graeve Fire Chief Mark S. Conrey Chief of Communications Jerry D. Parks Parks, Recreation and Public Property Director Don W. Elliott Public Works Director Michele Frost Personnel Director Joseph Mangiamelli Administrative Services Director AGENCY DIRECTORS Diane Thomas Director,Job Training of Greater Omaha Verda Bialac Acting Library Director Louis A. D'Ercole, City Comptroller Mary Galligan Cornett, City Clerk AUDITORS KPMG Peat Marwick LLP Regina Ebong, CPA BOND COUNSEL Kutak Rock FINANCIAL CONSULTANTS Kirkpatrick, Pettis, Smith, Polian Inc., Investment Bankers No dealer,broker,salesperson or other person has been authorized by the City or the original purchaser to give any information or to make any representations in connection with the Bonds or the matters described herein, other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by the City or the original purchaser. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information and expressions of opinion contained herein are subject to change, without notice, and neither the delivery of this Official Statement, nor any sale made hereunder, shall, under any circumstances,create any implication that there has been no change in the matters described herein since the date hereof. This Official Statement is submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. The original purchaser may offer and sell Bonds to certain dealers and others at prices lower than the offering prices stated on the cover page hereof. The offering prices may be changed from time to time by the original purchaser. TABLE OF CONTENTS INTRODUCTION 1 APPENDIX B—City of Omaha—Financial Information B-1 THE BONDS 1 Part One: Selected City of Omaha Financial Description of the Bonds 1 Information B-1 Place of Payment 1 ESTIMATED DEBT SERVICE Book-Entry Only System 1 REQUIREMENTS B-3 Optional Redemption 3 OVERLAPPING DEBT B-5 Disposition of Proceeds 3 LONG-TERM CONTRACTUAL Authority for Issuance 4 AGREEMENTS B-5 Security 4 AUTHORITY TO LEVY TAXES B-6 Recent Developments 5 PROPERTY TAX COLLECTIONS B-9 RATINGS 6 DEBT MANAGEMENT B-9 CONTINUING DISCLOSURE 6 General Obligation Debt Margin B-9 LEGAL OPINION 6 Debt Payment Record B-10 TAX EXEMPTION 6 General Obligation Bonds FINANCIAL STATEMENTS 7 Authorized but Unissued B-10 CERTIFICATION AS TO OFFICIAL CASH RESERVE FUND B-10 STATEMENT 7 EMPLOYEE RELATIONS: RETIREMENT LITIGATION 7 SYSTEMS B-10 CITY OF OMAHA EMPLOYEES' APPENDIX A—City of Omaha—General RETIREMENT SYSTEM B-11 Information A-1 POLICE AND FIREMEN'S RETIREMENT Form of Government A-1 SYSTEM B-14 City Administration A-1 Part Two:Independent Auditors' Report and Location and General Background A-1 General Purpose Financial Statements B-17 Area and Population A-1 Transportation A-1 APPENDIX C—Form of Continuing Utility Services A-2 Disclosure Undertaking Education A-2 Health Services A-2 APPENDIX D—Form of Opinion of Bond Counsel Military A-2 Economy A-2 Selected Economic Indicators A-3 IN CONNECTION WITH THEIR REOFFERING OF THE BONDS,THE ORIGINAL PURCHASER OF THE BONDS MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN MARKET PRICES OF THE BONDS AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. OFFICIAL STATEMENT $17,720,000 CITY OF OMAHA, NEBRASKA Various Purpose and Refunding Bonds Series of 1996 INTRODUCTION The purpose of this Official Statement is to furnish bond analysts, underwriters and investors with pertinent information concerning the City of Omaha, Nebraska(the "City")in connection with its$17,720,000 aggregate principal amount of Various Purpose and Refunding Bonds, Series of 1996(the "Bonds") being offered for sale. THE BONDS Description of the Bonds The Bonds,in aggregate principal amount of$17,720,000 will be dated December 1, 1996,will be issued in fully registered form, and will mature as set forth on the cover page of this Official Statement. Interest is payable semiannually on June 1 and December 1 of each year. Place of Payment The principal of the Bonds will be payable in lawful money of the United States of America at the corporate trust office of the First National Bank of Omaha, as paying agent and registrar (the "Paying Agent" and "Registrar"), in Omaha, Nebraska. Interest on the Bonds will be paid by wire transfer,check or draft mailed to the person in whose name a Bond is registered as of the May 15 or November 15, as the case may be, next preceding each interest payment date. Book-Entry Only System The Depository Trust Company("DTC"), New York,New York,will act as securities depository for the Bonds. The Bonds will be initially issued as fully registered securities registered in the name of Cede& Co. (DTC's partnership nominee). One fully registered Bond certificate will be issued for each maturity of the Bonds and will be deposited with DTC. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds securities that its participants("Direct Participants") deposit with DTC. DTC also facilitates the settlement among Participants (as defined hereinafter) of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts,thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange,Inc. and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers,banks and trust companies that clear through or maintain a custodial relationship with a Direct Participant either directly or indirectly("Indirect Participants"). (Direct Participants and Indirect Participants are referred to herein collectively as the "Participants.") The Rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. O Purchases of the Bonds under the DTC system must be made in authorized denominations by or through Direct Participants,which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond (a "Beneficial Owner") is in turn to be recorded on the Direct Participants' and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase,but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of beneficial ownership interest in the Bonds are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. For every transfer and exchange of beneficial ownership interests in the Bonds, DTC and the Participants may charge the Beneficial Owner a sum sufficient to pay any tax, fee or other governmental charge that may be imposed in relation thereto. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book entry for the Bonds is discontinued. SO LONG AS CEDE & CO., AS NOMINEE FOR DTC, IS THE REGISTERED OWNER OF THE BONDS, THE CITY AND THE PAYING AGENT WILL TREAT CEDE& CO. AS THE ONLY OWNER OF THE BONDS FOR ALL PURPOSES UNDER THE ORDINANCE (AS HEREINAFTER DEFINED), INCLUDING RECEIPT OF ALL PAYMENTS OF PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST ON THE BONDS, RECEIPT OF NOTICES AND VOTING. To facilitate subsequent transfers, the Bonds deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of the Bonds with DTC and their registration in the name of Cede& Co. effect no change in beneficial ownership. DTC will have no knowledge of the actual Beneficial Owners of the Bonds. DTC's records will reflect only the identity of the Direct Participants to whose accounts such Bonds are credited,which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants and by Direct Participants and Indirect Participants to Beneficial Owners, will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices will be sent to Cede& Co. If less than all of the Bonds are being redeemed,DTC's practice is to determine by lot the amount of the interest of each Direct Participant to be redeemed. Neither DTC nor Cede& Co. will consent or vote with respect to the Bonds. Under its usual procedures,DTC mails an Omnibus Proxy to the City, as issuer of the Bonds, as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal, premium, if any, and interest payments on the Bonds will be made by the Paying Agent to DTC. DTC's practice is to credit Direct Participants' accounts on payment dates in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on a payment date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices,as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Paying Agent, the City or any other party under the Ordinance, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principle,premium, if any, and interest to DTC is the responsibility of the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC,and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the City and the Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Bond certificates are required to be delivered as described in the Ordinance. Upon(i) the written direction of the City or (ii) the written consent of 100% of the Bondholders, the Paying Agent shall withdraw the Bonds from DTC and authenticate and deliver Bond certificates fully registered to the assignees 2 ;;t;:. O of DTC or its nominee. If the request for such withdrawal is not the result of any City action or inaction, such withdrawal, authorization and delivery shall be at the cost and expense of the persons requesting such withdrawal, authentication and delivery. The information in this section concerning DTC and DTC's book-entry system has been obtained from DTC. The City does not take any responsibility for its accuracy. THE CITY AND THE PAYING AGENT CANNOT AND DO NOT GIVE ANY ASSURANCES THAT THE DIRECT PARTICIPANTS OR THE INDIRECT PARTICIPANTS WILL DISTRIBUTE TO THE 'BENEFICIAL OWNERS OF THE BONDS (i) PAYMENTS OF PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST ON THE BONDS, (ii) CERTIFICATES REPRESENTING AN OWNERSHIP INTEREST OR OTHER CONFIRMATION OF BENEFICIAL OWNERSHIP INTERESTS IN THE BONDS OR(iii) REDEMPTION OR OTHER NOTICES SENT TO DTC OR CEDE & CO., ITS NOMINEE, AS THE REGISTERED OWNERS OF THE BONDS, OR THAT THEY WILL DO SO ON A TIMELY BASIS OR THAT DTC, DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS WILL SERVE AND ACT IN THE MANNER DESCRIBED IN THIS OFFICIAL STATEMENT. THE CURRENT "RULES" APPLICABLE TO DTC ARE ON FILE WITH THE SECURITIES AND EXCHANGE COMMISSION AND THE CURRENT "PROCEDURES" OF DTC TO BE FOLLOWED IN DEALING WITH DIRECT PARTICIPANTS ARE ON FILE WITH DTC. NEITHER THE CITY NOR THE PAYING AGENT HAS ANY RESPONSIBILITY OR OBLIGATIONS TO THE DIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS WITH RESPECT TO (A) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DIRECT PARTICIPANT;(B) THE PAYMENT BY DTC OR ANY DTC PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNERS IN RESPECT OF THE PRINCIPAL, PREMIUM, IF ANY, AND INTEREST ON THE BONDS; (C) THE DELIVERY OR TIMELINESS OF DELIVERY BY DTC OR ANY DIRECT PARTICIPANT OF ANY NOTICE TO ANY BENEFICIAL OWNER WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE INDENTURE TO BE GIVEN TO BONDHOLDERS; (D) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENTS IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE BONDS; OR(E) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC OR ITS NOMINEE, CEDE& CO., AS BONDHOLDER. Optional Redemption The Bonds maturing December 1, 2007 and thereafter are subject to redemption at the option of the City at any time on or after December 1, 2006, in whole or in part in inverse order of maturities and in such manner as the Paying Agent deems fair within a maturity, at the following redemption prices, plus accrued interest to the date of redemption: Redemption Price Redemption Period (percentage of (dates inclusive) principal amount) December 1, 2006 to November 30, 2009 102% December 1, 2009 to November 30, 2012 101 December 1, 2012 and thereafter 100 At least 30 days' notice of redemption will be mailed to the person whose name appears in the bond registration books as the registered owner of a Bond as of the close of business on the forty-fifth day next preceding the date fixed for redemption. Disposition of Proceeds The amount of$8,100,000 of the proceeds of the Bonds will be applied to pay the cost of constructing streets and highways;$1,700,000 of the proceeds of the Bonds will be used to pay the cost of parks and park building renovation; $750,000 of the proceeds of the Bonds will be applied to pay the cost of constructing sewers;$2,300,000 of the proceeds of the Bonds will be applied to pay for certain public works department and police department facilities; and$650,000 of the proceeds of the Bonds will be applied to pay for certain public safety equipment;and $4,220,000 of the proceeds of the Bonds will be applied to refund certain bonds which the City assumed and became legally liable for upon annexation of Douglas County Sanitary and Improvement District Nos. 142, 210, 249, 343 and 355. Authority for Issuance The Bonds have been authorized in accordance with the Constitution and statutes of the State of Nebraska, the Charter of the City of Omaha and proceedings of the City Council of the City of Omaha providing for the issuance thereof, including Ordinance No. passed by the City Council on December 3, 1996(the "Ordinance"). The issuance of the$8,100,000 of Bonds for street and highway purposes and the$750,000 of Bonds for sewer construction purposes referred to above under the heading "Disposition of Proceeds" was approved by voters at an election held in the City on May 11, 1993. The issuance of the$1,700,000 of Bonds for improvements to the City's parks and the$650,000 of Bonds for public safety equipment was approved by the voters of the City at an election held in the City on May 12, 1992. The issuance of the $2,300,000 of Bonds for the public works department and police department facilities referred to above was approved by the voters of the City at an election held in the City on November 3, 1992. The issuance of the $4,220,000 of Bonds for the refunding purpose also referred to under such heading was approved by the City Council by authority of Sections 10-142 and 10-616, Reissue Revised Statutes of Nebraska, 1943, as amended. Security The Bonds are general obligations of the City, and the City is obligated to levy ad valorem taxes for the payment of said Bonds and the interest thereon upon all property within the City subject to taxation by the City without limitation as to rate or amount. The full faith and credit of the City shall be pledged to the prompt payment of the principal of and interest on the Bonds. See "AUTHORITY TO LEVY TAXES" in Part One of Appendix B. Changes to State Property Tax System. The State of Nebraska's system of assessing and taxing personal property for purposes of local ad valorem taxation for support of local political subdivisions, including the City, has been the subject in recent years of constitutional amendment, legislation and litigation the result of which has been to substantially resolve certain challenges to the validity of the tax system. However, the State of Nebraska's system of assessing and taxing real and personal property has continued to be the object of considerable controversy,legal challenges and legislative action. The Second Session of the 94th Nebraska Legislature passed,and the Governor signed,five related bills designed to reduce property taxes. Two of the bills, LB 299 and LB 1114, will have a direct effect on City spending and property tax levies, respectively. LB 299 prohibits governmental units (a) from adopting a fiscal year 1997 budget in excess of the fiscal year 1996 total plus population growth plus 2% expressed in dollars and (b) from adopting a fiscal year 1998 budget in excess of the fiscal year 1997 budget plus population growth expressed in dollars. However, such budgetary limitations do not apply to, among other things, revenue pledged to retire bonded indebtedness and capital improvements financed by the proceeds of a bond issue, appropriations from a sinking fund "or any other means." Provision also is made for a governmental unit to exceed the budget limit for a given fiscal year by up to an additional 1% upon the affirmative vote of at least 75% of the governing body or to carry forward to future budget years the amount, if any, of unused budget authority. Effective July 1, 1998, LB 1114 caps the property tax levies of local governments. Levies of incorporated cities and villages, such as the City, will be limited to a maximum of 45C/$100 of taxable valuation(plus an additional 5C/$100 to pay the municipality's share of revenue required under interlocal agreements). The levy limit does not apply to levies for preexisting lease-purchase contracts approved prior to July 1, 1998,to bonded indebtedness approved according to law and secured by a levy on property and to pay judgments. LB 1114 does permit a political subdivision to exceed its levy limitation for a period of up to five years by majority vote of the electorate. In 1994,a lawsuit was filed in Lancaster County District Court challenging the validity under the equal protection clauses of the Nebraska Constitution and the Constitution of the United States of America of a May 12, 1992 amendment to the uniformity clause of the Nebraska Constitution. The uniformity clause, as so amended, grants the Nebraska Legislature greater authority to administer the property tax in a nonuniform manner and allows real and personal property to be treated as separate classes of tangible property for taxation purposes. Following arguments in May 1995, the trial 4 judge entered an order denying plaintiffs the requested relief. An appeal has been taken directly to the Nebraska Supreme Court, which has not set an argument date. There can be no assurance that Nebraska's system of assessing and taxing real and personal property will remain substantially unchanged,given the uncertain outcome of the lawsuit and the possibility of further legislation. Such changes could materially and adversely affect the amount of property tax revenues the City could collect in future years. The City does not believe,however, that the Nebraska Legislature would leave the City without adequate taxing resources to pay for its programs and meet its financial obligations, including the repayment of its bonds, lease-purchase obligations and other obligations. The opinion of Bond Counsel will be rendered based on the law existing as of the date of issuance of the Bonds and in reliance upon general legal presumptions in favor of the constitutionality of statutes and upon the holdings of existing case law. Revaluation of Residential Real Property. The Douglas County Assessor has completed a three-year project to revalue residential real property in Douglas County to provide for equalization of assessments of such property for taxation in compliance with the Constitution and statutes of the State. In 1994, the State Board of Equalization and Assessment also imposed a general 10% valuation increase on residential real property in Douglas County for assessment equalization purposes. The initial valuation increases were effective for ad valorem taxes levied in 1994 for collection in 1995. The general effect of the revaluations is to shift to owners of residential real property a portion of the property tax burden previously shouldered by the owners of other classes of real property, such as business and agricultural properties. In order to avoid a windfall of property tax revenues, the City set its 1994, 1995 and 1996 levies at levels designed to limit 1995, 1996 and 1997 collections to amounts estimated not to exceed the amount that would have been collected but for such revaluations. Recent Developments Several development and redevelopment projects involving major downtown and central Omaha employers and the City recently have been announced and are in various stages of planning. In downtown Omaha, the First National Bank of Omaha and the Omaha World-Herald plan to engage in separate, but coordinated projects, including the construction of significant new office and production facilities and the redevelopment of certain underused or deteriorated downtown properties. The City is in the process of approving a redevelopment agreement pursuant to which it would use lease-purchase and other available sources of financing to build two new parking garages serving the First National Bank's existing and new facilities and to provide related street and sewer improvements,at an estimated total cost to the City of $19,000,000. Pursuant to the redevelopment agreement,the First National Bank will enter into a long-term lease of the parking stalls. It is expected that work will commence in early 1997. Union Pacific Railroad recently announced that it plans to bring at least 800 new employees into its downtown Omaha headquarters(which is immediately west of the Omaha World-Herald facilities). The City administration has stated its intention that the City assist Union Pacific Railroad to accommodate the expanded work force and otherwise to enhance its downtown working environment. The nature, timing and magnitude of the City's participation in any such project remain under discussion, and any such participation would require approving action by the City Council. The City administration also has announced its intention that the City participate in two other significant redevelopment projects. The first involves the redevelopment into a park, pursuant to a redevelopment plan approved by the City Council,of the metals refining property now owned by Asarco(which is ceasing local operations)located on the west bank of the Missouri River immediately north of Douglas County's downtown Omaha Riverfront Park. The second involves the redevelopment,in conjunction with First Data Resources,the University of Nebraska at Omaha and Douglas County,Nebraska,of the 300-acre Aksarben racetrack and related properties in central Omaha. In each instance and subject to requisite City Council approvals, the City expects to finance, acquire and construct related public infrastructure improvements. Pending the conclusion of agreements among the parties, the magnitude and details of the City's involvement in such projects remain undetermined. 5 0 RATINGS Standard& Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. ("S&P"), has given the Bonds a rating of " " and Moody's Investors Service("Moody's") has given the Bonds a rating of " ." Any desired explanation of the significance of such ratings should be obtained from S&P and from Moody's. The City furnished the rating agencies with certain information and materials relating to the Bonds and the City which have not been included in this Official Statement. Generally, a rating agency bases its rating on the information and materials so furnished and on investigations,studies and assumptions made by such rating agency. There is no assurance that a particular rating will be maintained for any given period of time or that it will not be lowered or withdrawn entirely if, in the judgment of the agency originally establishing the rating, circumstances so warrant. The City has undertaken no responsibility either to bring to the attention of the owners of the Bonds any proposed revision or withdrawal of the rating of the Bonds or to oppose any such proposed revision or withdrawal. Any such change in or withdrawal of such rating could have an adverse effect on the market price of the Bonds. Any explanation of the significance of such ratings should be obtained from the rating agency furnishing such rating. CONTINUING DISCLOSURE The Ordinance includes the City's undertaking(the "Undertaking")for the benefit of the holders of the Bonds to send certain financial information and operating data to certain information repositories annually and to provide notice to the Municipal Securities Rulemaking Board or certain other repositories of certain events,pursuant to the requirements of Section(b)(5)(i) of Securities and Exchange Commission Rule 15c2-12(17 C.F.R. § 240.15c2-12)(the "Rule"). See APPENDIX C—Form of Continuing Disclosure Undertaking. The City has not failed to comply with any prior such undertaking under the Rule. A failure by the City to comply with the Undertaking will not constitute an event of default with respect to the Bonds, although any holder will have any available remedy at law or in equity, including seeking specific performance by court order, to cause the City to comply with its obligations under the Undertaking. Any such failure must be reported in accordance with the Rule and must be considered by any broker,dealer or municipal securities dealer before recommending the purchase or sale of the Bonds in the secondary market. Consequently,such a failure may adversely affect the transferability and liquidity of the Bonds and their market price. LEGAL OPINION The approving opinion of Kutak Rock("Bond Counsel") will affirm, among other things, that the Bonds have been authorized and issued in accordance with the Constitution and statutes of the State of Nebraska and the Charter of the City of Omaha, and constitute valid and legally binding obligations of the City, and that the City has power and is obligated to levy ad valorem taxes for the payment of the Bonds and the interest thereon upon all the property within the City subject to taxation by the City without limitation as to rate or amount. The rights of the holders of the Bonds and the enforceability thereof may be subject to valid bankruptcy,insolvency, reorganization,moratorium and other laws for the relief of debtors. TAX EXEMPTION In the opinion of Kutak Rock,Bond Counsel,to be delivered at the time of original issuance of the Bonds,under existing laws, regulations, rulings and judicial decisions, interest on the Bonds is (a) excluded from gross income for federal income tax purposes and (b) is not a specific item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations. Interest on the Bonds,however,will be included in the "adjusted current earnings"(i.e.,alternative minimum taxable income as adjusted for certain items, including those items that would be included in the calculation of a corporation's earnings and profits under Subchapter C of the Internal Revenue Code of 1986, as amended(the "Code"))of certain corporations and such corporations are required to include in the calculation of alternative minimum taxable income 75% of the excess of each such corporation's adjusted current earnings over its alternative minimum taxable income(determined without regard to this adjustment and prior to reduction for certain net operating losses). • The opinions set forth above are subject to continuing compliance by the City with its covenants regarding federal tax laws in the Ordinance. Failure to comply with such covenants could cause interest,on the Bonds to be included in gross income retroactive to the date of issue of the Bonds. The accrual or receipt of interest on the Bonds may otherwise affect the federal income tax liability of certain recipients such as banks, thrift institutions, property and casualty insurance companies, corporations (including S corporations,foreign corporations operating branches in the United States and corporations subject to the environmental tax imposed by Section 59A of the Code), Social Security or Railroad Retirement benefit recipients, or individuals who itemize deductions,among others. The extent of these other tax consequences will depend upon the recipients' particular tax status or other items of income or deduction. Bond Counsel expresses no opinion regarding any such consequences and investors should consult their own tax advisors regarding the tax consequences of purchasing or holding the Bonds. In Bond Counsel's further opinion, under the existing laws of the State of Nebraska, the interest on the Bonds is exempt from Nebraska state income taxation so long as it is exempt for purposes of the federal income tax. FINANCIAL STATEMENTS The general purpose financial statements of the City as of and for the year ended December 31, 1995 included as Part Two of Appendix B have been audited by KPMG Peat Marwick LLP and Regina Ebong, CPA, independent certified public accountants, as stated in their report appearing therein. CERTIFICATION AS TO OFFICIAL STATEMENT The City of Omaha, Nebraska, will furnish a certificate signed on its behalf by Louis A. D'Ercole, Acting Finance Director of the City of Omaha, and delivered concurrently with the delivery of the Bonds, to the effect that at the date of this Official Statement and at the date of delivery of the Bonds, (i)the information and statements, including financial statements,of or pertaining to the City, contained in this Official Statement were and are correct in all material respects; and(ii) insofar as the City and its affairs, including its financial affairs, are concerned,this Official Statement did not and does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The City,by such certificate,will further confirm to the effect that insofar as the descriptions and statements, including financial data, contained in the Official Statement of or pertaining to nongovernmental bodies or governmental bodies other than the City are concerned,such descriptions,statements and data have been obtained from sources believed by the City to be reliable, and that the City has no reason to believe that they are untrue or incomplete in any material respect. The execution and delivery of the foregoing certificate will be authorized by the City Council of the City of Omaha, Nebraska. LITIGATION The City is party to legal proceedings which occur in government operations and include claims for property damage and personal injury, contract disputes,discrimination claims and property condemnation proceedings. The legal proceedings, in the opinion of the City management,based on the advice of the City Attorney, are not expected to have a materially adverse effect on the City's financial position at December 31, 1995, after giving effect to available funds provided for such contingencies in the Judgment, Cash Reserve and Contingent Liability Reserve Funds and alternative methods of satisfying judgments,these being identified as: —City's authority to levy under Judgment Fund set by Home Rule Charter. —State Statute, Section 77-1620 R.R.S. 1943, which authorizes a special levy for payment of judgments. 7 —State Statute, Section 23-2415 R.R.S. 1943, which authorizes the City to borrow money from the State to satisfy judgments. In addition to amounts recorded by the City as other accrued liabilities, the City Attorney is of the opinion that there is a reasonable possibility that the City will incur additional losses on these lawsuits not to exceed$9,000,000. • • APPENDIX A CITY OF OMAHA-GENERAL INFORMATION APPENDIX A CITY OF OMAHA—GENERAL INFORMATION Form of Government Omaha operates with a Mayor-Council form of government. As a home-rule city, Omaha has all of the powers available to a home-rule city under the Nebraska Constitution. The Mayor and Council, consisting of seven members, are elected for four-year terms. The Mayor is elected in a city-wide election while the City Council members are elected by district. City Administration The executive and administrative powers of the City are vested in the Mayor, who is popularly elected for four years on a nonpartisan basis. The Honorable Hal Daub,Omaha's Mayor,was elected on December 13, 1994 to complete the term ending in June 1997 of the former Mayor who resigned in September 1994. Mayor Daub assumed his office on January 9, 1995. Prior to December 1994, Mayor Daub, an attorney and businessman in his private capacity,served four terms as a Congressman in the United States House of Representatives from 1981-1989 and, most recently, as a principal and international trade specialist with the accounting firm of Deloitte and Touche. The head of the City's Finance Department is the Acting Finance Director of the City, Louis A. D'Ercole,who assumed the position upon the resignation of the City's former Finance Director in March 1995. Following his graduation from the University of Nebraska at Omaha and service in the United States Army, Mr. D'Ercole joined the Finance Department of the City in 1968 and has held the positions of Accountant/Auditor,Budget Analyst,Budget and Accounting Manager and City Comptroller. Location and General Background Omaha, founded in 1854, is the largest city in the State of Nebraska. Omaha is the hub of a vast transportation network leading to all parts of the nation and thus offers significant advantages to business and industry competing in regional and national markets. This fact is substantiated by the growth of population, employment and income during recent years. Area and Population The population of the five-county Omaha Metropolitan Statistical Area ("MSA"), comprising four Nebraska counties and one Iowa county,numbered an estimated 670,322 as of January 1996. As of October 1, 1996,the population of the City of Omaha was an estimated 354,199, an increase of 5,192 over the 1995 estimate of 349,007 people. Transportation Eppley Eleven major airlines and five commuter airlines currently handle flights in and out of pP Y Airfield. In 1995, 3,172,032 passengers used Eppley Airfield, located less than 15 minutes driving time from downtown Omaha. Omaha is general headquarters for the Union Pacific Railroad. Five other mainline railroads and a terminal railway combine to make Omaha an important rail center. Two interstate highways(Interstate 80 and Interstate 29), five federal highways and seven state highways provide fast all-weather routes within Nebraska and to and from the rest of the nation. In addition,Interstate 480(downtown spur) and Interstate 680(circumferential route)provide quick access to all parts of the metropolitan area. More than 85 motor common carriers haul freight to and from Omaha and all parts of the nation,making Omaha a major midwestern trucking center. Greyhound Bus Lines furnishes Omaha with transcontinental passenger service. Several smaller bus lines operate between Omaha and points in Iowa and Nebraska. Utility Services Residential,commercial and industrial electric service rates in Omaha historically have been below the national averages,according to reports of the Edison Electric Institute in its Statistical Yearbook of the Electrical Utility Industry. In addition to low rates, the Omaha Public Power District, a Nebraska political subdivision, assures its customers ample power with a net generating capability of 1,926,000kW. The Metropolitan Utilities District("MUD"), a Nebraska political subdivision,distributes natural gas and water in the Omaha area. Rates compare favorably with those prevailing in other metropolitan areas in the nation. Omaha has a plentiful water supply (Missouri River and Platte River wells) and a water system designed to the standards of the National Board of Fire Underwriters, with a current capacity of 218 million gallons a day. MUD's supply of natural gas is purchased wholesale from Northern Natural Gas Company. This supply is supplemented with peak-shaving storage facilities which can provide up to approximately 30% of peak demand. There have been no interruptions of natural gas service to firm commercial and residential customers and no interruptions are expected in the foreseeable future. MUD continues to add new natural gas customers. Education Omaha is an important educational center and is the location of Creighton University,the University of Nebraska at Omaha and the University of Nebraska Medical Center. These institutions, together with three additional colleges located in Omaha, offer educational programs at the graduate and undergraduate levels, in law, and in the health professions: medicine,dentistry, nursing and pharmacy. Public elementary and secondary education are provided by four local school districts:School District of Omaha, Douglas County School District No. 66, School District of Millard,and School District of Ralston. The School District of Omaha has the largest enrollment of pupils residing within the City. The City is also served by a number of private and parochial schools at both the elementary and secondary levels. Health Services There are 13 hospitals within the City of Omaha, six of them classified as acute-care community hospitals. Of the remaining seven hospitals,two are acute-care hospitals operated by governmental entities(one by the State of Nebraska and one by Douglas County),four are specialized hospitals(pediatrics,maternity care,geriatrics and psychiatry),and one is a major hospital of the Veterans Administration. There are more than 1,200 physicians and more than 300 dentists in Omaha; their services are utilized both by Omaha residents and by persons within the surrounding region. Military The United States Strategic Command ("StratCom") is headquartered at Offutt Air Force Base, just south of Omaha. StratCom has been assigned planning and targeting responsibility for the nation's strategic nuclear weapons. Economy From an economy founded on the livestock industry in the late nineteenth century,Omaha has become a major grain market in the United States. Food processing is also an important part of the economy and is represented by such companies as ConAgra, Inc., Kellogg Company and Campbell Soup Company. Concurrently with the growth of the City's agribusiness industry, new and related industries began to develop in the area. The City has an increasingly well-diversified economy,although it still remains agriculturally oriented. The Omaha MSA contains more than 670 manufacturing plants, including plants operated by Lucent Technologies(formerly A-2 AT&T Technologies Inc.), Vickers, Inc. (a Trinova Company), Lozier Corporation and Valmont Industries Inc. In the early 1980's, Omaha began developing as a major participant in the reservation and direct-response center industry. Currently,there are 27 such firms located within the City. In total they employ a labor force in excess of 20,000. Major employers in this group include First Data Resources, Hyatt Reservations, Idelman Telemarketing, Inc., Marriott Reservations, Wats Marketing of America, West Telemarketing and 900 Services, Inc. Omaha is the home of 32 insurance companies, including Mutual of Omaha, the world's largest mutual health and accident company,and Woodmen of the World Life Insurance Society, the largest fraternal life insurance company. The district offices of the Farm Credit System for Nebraska, Iowa, South Dakota and Wyoming are headquartered in Omaha. The Farm Credit Bank of Omaha, among the largest in the system, has loans outstanding of over$3.8 billion. A branch Federal Reserve Bank and 20 commercial banks are located within the city limits of Omaha. First Data Resources,Union Pacific Railroad,Northern Natural Gas Company and ConAgra, Inc.maintain their headquarters in Omaha. During 1995, the annual average unemployment rate for the Omaha MSA was 2.4%, compared with 5.6% for the United States as a whole. The Omaha MSA unemployment rate in August 1996 was 2.4%, compared with a rate of 5.1% for the United States as a whole. Selected Economic Indicators Omaha MSA Population and Employment Population' Employment' 1950 366,395 163,050 1960 457,873 188,950 1970 542,646 214,650 1980 569,614 261,532 1990 618,262 331,953 • 1991 624,200 326,360 1992 634,900 333,887 1993 656,434 335,540 1994 662,801 368,772 1995 670,322 357,190 'Source: United States Bureau of Census. 'Estimated annual averages based on labor force available, from Reports of Nebraska Department of Labor,Division of Employment Research and • Statistics. A-3 Largest Employers-City of Omaha September 1995 United States Strategic Command* Department of Defense 11,150 First Data Card Services Group Credit Card Processors 6,500 Mutual of Omaha/United of Omaha Insurance 6,200 Omaha Public Schools School System 6,000 University of Nebraska Medical Center University, Hospital, Clinics 5,800 Methodist Health System Health Care 4,800 Alegent Health Health Care 3,800 Baker's Supermarkets Retail 3,500 Oriental Trading Co. Wholesale 3,500 Union Pacific Railroad Railroad 3,500 U S West Communications Communications 3,200 * Located in Sarpy County (immediately south of Omaha) Omaha MSA Nonagricultural Wage and Salary Employment Average for 1995 August 1996 % of % of Number Total Number Total Industry Manufacturing 37,697 10.11 37,871 10.07 Construction and Mining 16,156 4.33 17,715 4.71 Transportation,Communications and Utilities 25,820 6.93 26,396 7.02 Retail Trade 66,601 17.87 66,828 17.78 Wholesale Trade 25,789 6.92 27,084 7.21 Finance, Insurance and Real Estate 32,532 8.73 32,036 8.52 Services 117,955 31.64 120,838 32.14 Government 50.210 13.47 47,180 12.55 Total 372,761 100.00 375,948 100.00 Source: Estimated annual averages based on place of employment, from Reports of Nebraska Department of Labor, Division of Employment and Research Statistics. Omaha MSA Effective Buying Income* Year Total(000) Per Household 1950 $ 558,006 $ 4,978 1960 966,698 6,856 . 1970 1,956,095 11,734 1980 4,991,836 21,524 1990 9,527,248 31,166 1991 9,728,236 34,898 1992 10,572,879 35,980 1993 11,001,262 37,227 1994 11,567,201 38,596 1995 11,813,171 38,825 Source:Annual surveys of buying power.Sales and Marketing Management. 'Effective Buying Income:personal income(wages,salaries, interest,dividends,profits and property income)minus federal,state and local taxes. A-4 4.(0 • Retail Sales—Douglas County • Retail Retail Year Sales (000) Year Sales (000) 1980 $1,873,004 1988 $3,311,816 1981 2,017,847 1989 3,481,232 1982 2,250,087 1990 3,717,333 1983 3,073,914 1991 3,567,814 1984 2,739,494 1992 4,266,146 1985 2,904,388 1993 4,739,758 1986 3,163,571 1994 5,058,311 1987 3,074,692 1995 5,248,178 Source:Sales and Marketing Management. Banking Activity Year Bank Clearings Year Bank Clearings 1950 $ 6,833,253,983 1987 $34,704,749,145 1960 9,796,472,675 1988 39,836,595,615 1970 16,751,962,240 1989 38,372,075,646 1980 31,915,078,877 1990 38,383,435,837 1981 37,294,813,955 1991 38,119,116,503 1982 33,933,485,920 1992 40,931,943,464 1983 32,048,543,360 1993 34,940,684,074* 1984 32,684,214,958 1994 31,868,830,077 1985 32,884,571,411 1995 34,042,393,113 1986 32,704,050,362 Source:Federal Reserve Bank of Kansas City. 'Effective July 1, 1993,the Federal Reserve Bank changed its policy with respect to the amounts that are included in this total. The effect of the change was a reduction in Bank Clearings reported rather than a reduction in activity. Value of Building Permits—City of Omaha • Year Amount Year Amount 1950 $ 24,105,401 1987 $245,621,274 1960 46,927,523 1988 249,985,556 1970 61,626,242 1989 269,168,245 1980 136,736,312 1990 318,473,517 1981 99,180,317 1991 286,025,269 1982 98,758,516 1992 284,328,785 1983 141,773,718 1993 301,972,761 1984 227,776,399 1994 313,879,897 1985 236,167,683 1995 305,036,452 1986 229,321,621 Source:Department of Permits and Inspections,City of Omaha. A-5 Z APPENDIX B CITY OF OMAHA—FINANCIAL INFORMATION PART ONE Selected City of Omaha Financial Information PART TWO Independent Auditors'Report and General Purpose Financial Statements APPENDIX B CITY OF OMAHA—FINANCIAL INFORMATION PART ONE . SELECTED CITY OF OMAHA FINANCIAL INFORMATION CITY OF OMAHA GENERAL FUND STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE Five Years Ended December 31, 1995 Year Ended December 31 1991 1992 1993 1994 1995 Revenue: Property taxes $ 40,440,017 $42,915,687 $42,526,712 $44,043,664 $46,135,190 City sales and use tax 56,694,789 58,505,433 60,931,372 66,875,807 69,814,452 Business taxes 18,115,070 18,963,884 20,957,900 21,610,353 21,855,710 Licenses and permits 2,498,699 2,987,276 3,740,715 4,075,181 4,505,667 Intergovernmental revenue 5,183,680 5,104,383 5,256,442 5,206,806 5,579,103 Charges for services 7,475,075 8,352,013 7,059,864 7,603,140 8,305,645 Investment income 4,705,686 3,398,404 2,312,140 2,357,026 4,069,580 Rents and royalties 824,541 578,176 428,853 320,148 352,094 Miscellaneous 183,282 315,749 372,780 589,430 1,702,253 Total revenue $136,120,839 $141,121,005 $143,586,778 $152,681,555 $162,319.694 Expenditures: General government 14,382,623 19,394,754 18,444,824 19,918,689 24,593,689 Parks, recreation&public property 16,474,303 12,332,951 12,849,361 13,990,022 14,187,579 Public safety 55,266,989 60,604,640 61,265,388 61,900,313 57,573,160 Public works 14,199,764 16,258,303 14,569,119 13,636,165 18,446,592 Public library 4,639,116 4,525,992 4,798,539 3,992,385 5,433,643 Employee benefits 21,509,669 22,250,349 24,652,517 25,647,435 31,676,957 Lease-purchase agreements 2,987,760 1,857,903 1,841,261 1,950,602 2,213,716 Other 3,256.318 2,749.586 2,920,330 4,872,411 4,160,955 Total expenditures $132,716.542 $139,974,478 $141,341,339 $145.908,022 $158,286,291 Excess(deficiency)of revenues over expenditures 3,404.297 1,146.527 2,245,439 6,773,533 4,033.403 Other sources(uses) of Financial resources: Initial credit 1,113,918 1,124,009 1,403,471 1,102,618 1,461,246 Operating transfers(net) (3,114,744) 51,167,918) (2,187,664) (6,212,188) (3,819,659) Net other sources(uses) of financial resources (2,000,826) (43,909) (784,193) (5,109,570) (2,358,413) Excess(deficiency)of revenues over expenditures and other sources(uses) of Financial resources* 1,403,471 1,102,618 1,461,246 1,663,963 1,674,990 Fund balance,beginning of year 2,237,927 2,527,480 2,505,089 2,563,864 3,125,209 Less—initial credit (1,113,918) (1,124,009) (1,403,471) (1,102,6181 (1,461,246) Fund balance,end of year $ 2,527,480 $ 2,506,089 $ 2,563.864 $ 3,125.209 $ 3,338.953 Source:Records of the Finance Department,City of Omaha. *City of Omaha procedure in General Fund budgeting is as follows: at the end of each fiscal year the excess, if any, of revenues and adjustments over expenditures and encumbrances is determined. Any such excess,less extraordinary transfers out,if any, is used as the initial credit to the General Fund Budget for the second year following the year in which the excess has arisen. 0 CITY OF OMAHA GENERAL DEBT SERVICE FUND STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE Five Years Ended December 31, 1995 1991 1992 1993 1994 1995 Revenue: Taxes $23,054,682 $22,465,930 $21,388,952 $22,000,258 $21,749,152 Receipts in lieu of taxes 77,902 - 78,870 78,425 75,567 68,501 Interest income 535.168 767,635 428,713 283.958 0 Total revenue 23,667.752 23,312.435 21,896.090 22,359.783 21,817,653 Contributions from annexed areas-net 1,318,200 522.487 242,476 2,560.996 1.609.780 Total revenue and contributions 24,985.952 23,834.922 22,138,566 24,920.779 23.427,433 Expenditures: Outside services: Professional fees& liabilities 58,346 1,112,198 64,146 21,604 1,556,292 Collection fees 213,489 205.453 223.862 224,693 217,457 Total outside services 271.835 1,317.651 288.008 246.297 1,773,749 General obligation bonds: Interest expense 9,225,005 8,971,440 7,656,225 7,652,129 7,807,098 Bonds retired 38,887,698 35,756.741 50,978.226 13,762.625 30,298,547 Total general obligation bonds 48,112,703 44,728.181 58,634.451 21,414.754 38,105,645 Total expenditures 48,384,538 46,045,832 58,922,459 21,661,051 39,879.394 Excess of revenues and contributions over(under) (23,398,586) (22,210,910) (36,783,893) 3,259,728 (16,451,961) expenditures Other financing sources(uses): Refunding Bonds 26.264.667 14,426.964 37,009.981 0 17,845.832 Excess of revenues and contributions over(under) expenditures and other financing sources) 2,866,081 (7,783,946) 226,088 3,259,728 1,393,871 Fund balance at beginning of year 16.215.316 19,081.397 11,297.451 11,523.539 14,783,267 Fund balance at end of year $19,081.397 $11.297.451 $11,523.539 $14,783,267 $16,177,138 Source: Records of Finance Department,City of Omaha. B-2 ESTIMATED DEBT SERVICE REQUIREMENTS The annual debt service requirements on all outstanding City of Omaha general obligation bonds, as of October 3.1, 1996, are shown below, together with the estimated annual debt service requirements on City of Omaha Various Purpose and Refunding Bonds, Series of 1996. Debt Service on Debt Service on Various Purpose and Refunding Bonds Outstanding Bonds' Series of 19962 For Year Total Total Total Ending Principal Principal Debt December 31 Principal Interest and Interest Principal Interest and Interest Service 1996 $ 5,265,000 $2,344,422 $ 7,609,422 $ 0 $ 0 $ 0 $ 7,609,422 1997 13,950,000 7,575,921 21,525,921 1,180,000 974,600 2,154,600 23,680,521 1998 13,435,000 6,865,141 20,300,141 1,170,000 909,700 2,079,700 22,379,841 1999 12,850,000 6,183,874 19,033,874 1,170,000 845,350 2,015,350 21,049,224 2000 12,035,000 5,543,011 17,578,011 1,160,000 781,000 1,941,000 19,519,011 2001 11,355,000 4,930,960 16,285,960 990,000 717,200 1,707,200 17,993,160 2002 11,090,000 4,350,728 15,440,728 920,000 662,750 1,582,750 17,023,478 2003 9,415,000 3,776,630 13,191,630 920,000 612,150 1,532,150 14,723,780 2004 . 8,655,000 3,269,073 11,924,073 920,000 561,550 1,481,550 13,405,623 2005 8,155,000 2,801,878 10,956,878 920,000 510,950 1,430,950 12,387,828 2006 7,635,000 2,358,073 9,993,073 920,000 460,350 1,380,350 11,373,423 2007 6,770,000 1,933,665 8,703,665 825,000 409,750 1,234,750 9,938,415 2008 5,930,000 1,553,493 7,483,493 785,000 364,375 1,149,375 8,632,868 2009 5,135,000 1,212,945 6,347,945 785,000 321,200 1,106,200 7,454,145 2010 5,085,000 911,328 5,996,328 785,000 278,025 . 1,063,025 7,059,353 2011 3,645,000 638,745 4,283,745 785,000 234,850 1,019,850 5,303,595 2012 3,095,000 434,165 3,529,165 785,000 191,675 976,675 4,505,840 2013 2,825,000 263,985 3,088,985 675,000 148,500 823,500 3,912,485 2014 1,350,000 110,625 1,460,625 675,000 111,375 786,375 2,247,000 2015 700,000 35,000 735,000 675,000 74,250 749,250 1,484,250 2016 0 0 0 675.000 37,125 712.125 712,125 $148,375,000 $57,093,662 $205,468,662 $17,720,000 $9,206,725 $26,926,725 $232,395,387 1 After deducting principal of and interest on the sanitary and improvement district bonds being refunded. 3 Assumes a Series 1996 Bonds interest rate of 5.50%per annum. B-3 ': f. fp Property Valuations and Debt Ratios as of December 31 1991 1992 19933 1994 1995 Actual Valuation[ $9,706,483,045 $9,922,157,265 $9,840,315,645 $10,109,771,409 $10,949,475,973 Net Direct General Obligation Bonded Debt' 123,242,603 125,857,549 127,967,461 128,491,733 137,232,862 % of Net Direct General Obligation Bonded Debt to Actual Valuation 1.27% 1.27% 1.30% 1.27% 1.25% Source: Records of Accounting Department,Office of the Douglas County Clerk. 'Amounts shown above as Direct General Obligation Bonded Debt are net of the fund balance in the Debt Service Fund. See"CITY OF OMAHA DEBT SERVICE FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE." 3The 1993 taxable valuation was calculated by including increases in valuation due to growth and revaluation and factoring in a 24%reduction in personal property valuations. The reduction is the result of Nebraska Supreme Court rulings which declared that the state's then-existing personal property tax laws were discriminatory and, therefore,unconstitutional. The reductions in tax collections were reimbursed by the State. Population, Net General Bonded Debt and Per Capita Debt Per Capita Net Direct Net Direct General Obligation General Obligation Year Population' Bonded Debt2.3 Bonded Debt 1950 251,117 $ 11,100,500 $ 44.20 1960 301,598 30,697,871 101.78 1970 346,929 71,586,248 206.34 1980 313,911 73,939,298 235.54 1990 335,795 115,435,013 343.77 1991 338,300 123,242,603 364.30 1992 342,600 125,857,549 367.36 1993 342,885 127,967,461 372.10 1994 346,338 128,491,733 371.00 1995 349,007 137,232,862 393.21 'Source: United States Census. • 2Records of the Finance Department,City of Omaha. 31n 1982,the City of Omaha inaugurated a new annexation policy. The current annexation policy is designed to create annual,balanced annexation packages and establish consistency from year to year. Such annexation packages combine areas with relatively high outstanding indebtedness in relation to assessed valuation with other areas that have a more positive financial picture. These balanced packages can then be added to the City without tax increase to cover retirement of the additional debt assumed by the City. Under this approach,Omaha has grown by approximately 35,000 people and over 15 square miles as a result of annexations since 1980. • • B-4 '> OVERLAPPING DEBT Listed below are the political subdivisions which have the power to levy taxes and the amount of net bonded indebtedness of each, as of July 31, 1996, applicable to the taxable property within the City of Omaha: % Applicable to $ Amount Bonds Outstanding City of Omaha Applicable Douglas County' $ 26,345,000 77.00% $ 20,285,650 Omaha-Douglas Public Building Commission' 8,065,000 77.00 6,210,050 School District of Omaha' 55,720,000 86.13 47,991,636 School District of Ralston' 8,400,000 72.94 6,126,960 School District of Millard' 85,170,000 53.56 45,617,000 School District No. 66 of Douglas County' -0- 100.00 -0- Net Overlapping Bonded Debt • $126,231,292 'Douglas County,under various lease purchase agreements, is obligated to provide for annual rental payments. From 1995 to 2005 the highest annual payment is approximately$2,956,000(in the 1996/1997 fiscal year), the lowest annual payment is approximately$414,315 (in the 2004/2005 fiscal year),and the average annual payment is approximately$2,216,000. • 'Payable from certain property tax revenues and payments to be made to it by the City of Omaha and Douglas County under certain contractual agreements. Actual rental payments by the City for 1995 were$819,186. The Act authorizing issuance of bonds by the Omaha-Douglas Public Building Commission(the"Commission")permits the Commission to levy a tax of$.017 per$100 of actual valuation on all the taxable property in Douglas County;the levy for 1996-97 is$0.01307 per$100 of actual valuation. However,although the same Act authorizes the City to levy a tax on all the taxable property in the City,except intangible property,of$.017 per$100 of actual valuation in excess of the Charter limitation described under"AUTHORITY TO LEVY TAXES" in this Appendix B,if and to the extent necessary to make the City's payments to the Commission,no such levy has ever been made by the City for such purpose. 3Tax levies for general obligation bond sinking fund purposes are unlimited as to amount. Residents of the City reside in one of the four school districts and pay taxes only to that school district. LONG-TERM CONTRACTUAL AGREEMENTS The City of Omaha, under certain existing contractual agreements (including lease purchase agreements), is obligated to provide for annual payments which are a charge on the General Fund. From 1996 to 2016,the highest annual payment is $1,156,620(in 1996), the lowest is$692,585 (in 2008), and the average annual payment is $838,895. Such annual payments are included as General Fund budgetary items for which annual appropriations are required. Under the Charter of the City of Omaha, the outstanding amount of any lease purchase agreements executed by the City as vendee or as lessee is not chargeable against the City debt limit. Under terms of a lease purchase agreement with the Omaha Pollution Control Corporation,the City is required to pay basic rental of$360,000 annually, payable in semiannual installments of$180,000. The term of the lease is for a period of 30 years, terminating in 1997. The payments under this agreement are made from the Sewer Revenue Fund. • B-5 ��� City of Omaha and Local Authorities and Districts Revenue and Special Obligation Bonds Outstanding* as of December 31, 1995 City of Omaha: Sanitary Sewerage System Revenue Bonds $ 24,300,000 Tax Increment Bonds and Notes 26,841,099 Special Tax Revenue Bonds 3,700,000 Omaha Public Power District 991,849,000 Metropolitan Utilities District of the City of Omaha -0- Airport Authority of the City of Omaha 60,015,850 Omaha Housing Authority 9,687,140 *Revenue bond indebtedness is not general obligation debt of the City. Principal and interest are paid solely from revenues arising from operations of the respective City facilities or of the Authority or District issuing such revenue bonds. No taxes are levied for payment of either principal or interest. Nor are the Tax Increment Bonds and Notes and Special Tax Revenue Bonds referred to above general obligations of the City. Principal and interest are paid(1)either from that portion of the ad valorem tax on real property in a redevelopment project which is in excess of that portion of the ad valorem tax upon real property in such redevelopment project produced by the levy at the rate fixed each year by or for each public body levying a tax in such redevelopment project on the valuation for assessment of the taxable real property as last certified for the year prior to the providing for division of such taxes pursuant to the redevelopment plan or(2) from special tax revenues collected pursuant to redevelopment laws. AUTHORITY TO LEVY TAXES Under the City Charter, the tax levy of the City in any year for all purposes shall not exceed the total of (i) $.6125 per $100 of actual taxable value plus (ii) whatever tax levy is necessary to provide for principal and interest payments on the indebtedness of the City, for the administrative expenses incurred in issuing and maintaining bonds, and for the satisfaction of judgments and litigation expenses in connection therewith, plus (iii) whatever amount is required to finance certain overtime and holiday pay for members of the police force. In addition, the Omaha-Douglas Public Building Commission Act pursuant to which the Commission issues bonds empowers the City to levy a tax on all the taxable property in the City, except intangible property, of$.017 per $100 of actual valuation in excess of the Charter limitation if and to the extent necessary to make the City's payments to the Commission. Effective July 1, 1998, the tax levy of the City(exclusive of levies for preexisting lease-purchase contracts and bonded indebtedness approved according to law and secured by a levy on property) will be limited by state law to 45C/$100 of taxable valuation. See "THE BONDS--Security—Changes to Property Tax System" in the Official Statement. The City's tax levy during its current fiscal year ending December 31, 1996 is shown in the following table. No separate levy above the Charter limitation was made for payments to the Omaha-Douglas Public Building Commission. A levy of the additional$.017 authorized by the Omaha-Douglas Public Building Commission Act would have meant an additional levy of$1,992,812. Set forth in the following table is a detailed summary of the property tax levied on real and personal property in the City. B-6 Total Property Tax Levies in the City of Omaha (Levied on Real and Tangible Personal Property) 1992 1993 1994 1995 1996 1997 (amount per $100 of actual valuation) City of Omaha General Fund $ .4257 $ .4237 $ .4266 $ .4163 $ .4113. $ .3895 Debt Service Fund .2203 .2176 .2148 .1963 .1913 .1712 Judgment Fund .0000 .0044 .0044 .0043 .0043 .0093 Riverfront Redevelopment Fund .0044 .0047 .0046 .0044 .0044 .0034 Total for City of Omaha $.6504 $.6504 $.6504 $.6213 $.6113 • $.5734 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 (amount per $100 of actual valuation) Other Taxing Units M.U.D.-Water Hydrants $ .0115 $ .0115 $ .0115 $ .0110 $ .0107 $ .0099 Douglas County .2912 .2915 .2912 .2775 .2886 .3101 School District of Omaha' 1.4349 1.5293 1.6477 1.6673 1.6417 1.5258 School District No. 66 of Douglas County' 1.5837 1.5758 1.6193 1.5355 1.4694 1.5360 School District of Ralston' 2.0194 1.8789 1.8837 1.9023 1.9247 1.7310 School District of Millard' 1.4420 1.4111 1.4111 1.4718 1.5732 1.5225 State Educational Service Units .0186 .0197 .0197 .03822 .03502 .03342 Omaha-Douglas Public Building Commission .0170 .0170 .0170 .0149 .0133 .0131 Papio Missouri River Natural Resources District .0321 .0357 .0357 .0350 .0334 .0325 Metropolitan Technical Community College .0700 .0773 .0767 .0776 .0775 .0775 Omaha Transit Authority .0700 .0700 .0700 .0635 .0594 .0548 'Residents in Omaha reside in one of the above four school districts and pay taxes only to that school district. 2Residents residing in school districts other than the School District of Omaha pay$.0331. B-7 t Major Taxpayers' The following are firms located within the City of Omaha with the greatest 1995 real estate valuations. Value of Taxpayer Real Property United Benefit Life Insurance Co. (Mutual/United) $77,427,400 Prudential Insurance Company of America 60,421,300 Creighton Saint Joseph Regional Healthcare System 57,049,700 Oak View Mall Corporation 49,636,400 Crossroads Joint Venture 44,975,000 California Public Retirement System(Two Towers) 28,300,000 Woodmen of the World Life Insurance Society 24,500,000 Regency Associates 20,855,100 Omaha Hotel Inc. 20,624,200 Immanuel Inc. 17,634,900 Vanderbilt Ltd. 17,125,900 AT&T Communications Inc. 16,997,700 Kellogg USA Inc. 16,563,000 Physicians.Mutual Insurance Co. 16,525,000 PDM Inc. 16,310,200 Nebraska Furniture Mart 16,039,700 SFI Ltd. Partnership 13 et al. 16,005,000 • First National of Nebraska Inc. 15,640,000 First Data Resources Inc. 14,977,500 Shorenstein Realty Investors 13,950,000 Red Lion Inns Operating Limited Partnership 13,829,500 State Street Bank and Trust 13,500,000 Guarantee Mutual Life 13,088,500 SFI Ltd. Partnership 12 12,809,500 Construction Developers Inc. 11,890,000 Consolidated Capital Prop. 11,807,200 Norwest Bank Nebraska 11,600,400 Loyal Katskee 11,198,900 Comfre-Dodge Fund VII 11,164,800 Camelot Village Dev. Co. 10,455,400 C F T Company 10,435,000 Clarkson Memorial Hospital 10,295,400 Federal Reserve Bank 10,265,300 Thomasville Inc. 10,230,000 Bernard Taulborg 10,190,200 Prefco XI Limited Partnership 10,121,800 Source: Records of the Tax Control Supervisor, Office of the Douglas County Clerk. • 'In 1986,valuations for Northwestern Bell Telephone Co.(predecessor in interest to US WEST)and Union Pacific Corp.were$52,368,000 and$14,212,600, respectively. Since 1987,valuations for these taxpayers have been determined on a statewide basis and taxes are collected by the Nebraska Department of Revenue. The centrally collected taxes are distributed to local taxing units in proportion to property valuations therein. B-8 v PROPERTY TAX COLLECTIONS Property taxes on tangible property,real and personal,are levied by the City of Omaha,collected by the Douglas County Treasurer and remitted to the City. Real property taxes are levied September 1 of each year and become due December 31. The first half of tax payable becomes delinquent the following April 1 and the second half August 1. Personal property taxes are levied September 1 of each year and become due November 1. The first half of tax payable becomes delinquent December 1 and the second half the following July 1. Taxes for Year Shown Prior Years' Year Ended Amount % Taxes Total December 31 Certified Collected Collected Collected Collections 1991 $63,130,966 $61,035,328 96.7 $3,002,703 $64,038,031 1992 64,533,711 62,482,543 96.8 3,077,626 65,560,169 1993 64,001,413 62,062,689 97.0 3,209,644 65,272,333 1994 65,753,953 64,153,434 97.6 2,996,534 67,149,968 1995 68,020,335 66,426,577 97.7 2,421,640 68,848,217 Source: Records of Finance Department,City of Omaha. DEBT MANAGEMENT General Obligation Debt Margin Article V, Section 5.27, Home Rule Charter of the City of Omaha, 1956, as amended,provides: The total amount of general obligation indebtedness outstanding at any time, which shall include bonds issued but shall not include bonds authorized until they are issued, shall not exceed 3.5 per cent of the actual value of taxable real and personal property in the city. Computation of the general obligation debt margin as defined in the Home Rule Charter, as of December 31, 1995, based upon 1995 valuations, reflects the following: Maximum debt limit(3.5% of total assessed valuation) $383,231,659 General obligation bonds outstanding $153,410,000 Less balance in General Obligation Debt Service Fund December 31, 1995 (16,177,138) 137,232,862 General obligation debt margin $245,998,797 Revenue bond indebtedness, special obligation bonds, general obligation notes and lease-purchase agreements are not chargeable against the general obligation debt margin. The City of Omaha has no general obligation notes outstanding. Revenue and special obligation bond indebtedness and lease purchase agreement obligations are set forth herein under the captions"OVERLAPPING DEBT" and"City of Omaha and Local Authorities and Districts Revenue and Special Obligation Bonds Outstanding." B-9 1 Debt Payment Record The City of Omaha has never defaulted on its obligations to pay principal of or interest on its indebtedness. General Obligation Bonds Authorized but Unissued Upon issuance and sale of the City's Various Purpose and Refunding Bonds, Series of 1996 scheduled for delivery on December 30, 1996, there will be $72,980,000 of general obligation bonds authorized but unissued. It is anticipated that these bonds will be issued in varying amounts annually through 2001. CASH RESERVE FUND At a special City election held on November 6, 1984, voters of the City approved an amendment to Section 5.03 of the City Charter to provide in subsection(10) for the establishment of a cash reserve fund("Cash Reserve Fund") for the purpose of meeting emergencies arising from: (a) the loss or partial loss of a revenue source; (b) an unanticipated expenditure demand due to a natural disaster, casualty loss or act of God; (c) expenditure demand for the satisfaction of judgments and litigation expenses when the Judgment Levy Fund balance is inadequate;or (d) conditions wherein serious loss of life, health or property is threatened or has occurred. The 1984 amendment to the City Charter authorized the appropriation at the close of any fiscal year for credit to the Cash Reserve Fund of any amount, or portion thereof,held as General Fund surplus. Income earned on amounts credited to the Cash Reserve Fund is retained in the fund. The maximum size of the Cash Reserve Fund was established at an amount equal to 4% of General Fund appropriations. The ordinance adopted by the City Council to close Fiscal 1984 Accounts provided that the sum of$1,600,000 be transferred from 1984 available budgetary balances as the initial credit to the Cash Reserve Fund to be held as provided in Section 5.03(10) of the City Charter. The 1994 year end transfer ordinance credited$500,000 to the Cash Reserve Fund, increasing the balance as of December 31, 1994 to $2,434,885. The 1995 year end transfer ordinance credited $300,000 to the Cash Reserve Fund, increasing the balance as of December 31, 1995 to $2,822,018. EMPLOYEE RELATIONS: RETIREMENT SYSTEMS The City of Omaha negotiates with four unions:The Civilian Management Professional and Technical Employees Council; The Omaha City Employees, Local No. 251; The Omaha Association of Firefighters, Local No. 385; and The Omaha Police Union,Local No. 1. Current agreements with the four unions expire as follows: The Civilian Management Professional and Technical Employees Council—December 31, 1996; Omaha Association of Firefighters, Local No. 385—December 27, 1997; Omaha City Employees,Local No. 251—December 27, 1997;and Omaha Police Union, Local No. 1—December 27, 1997. The negotiating procedure involves meeting with the designated union representatives and discussing economic and noneconomic items regarding contractual agreements. At any time, should an impasse be reached, Nebraska law provides that either party may appeal to the Nebraska Commission of Industrial Relations. Either party may appeal the decision of such Commission to the Nebraska Supreme Court, whose decision is final. • B-10 CITY OF OMAHA EMPLOYEES' RETIREMENT SYSTEM The City of Omaha Employees' Retirement System became effective on January 1, 1949. Certain of its provisions, which are governed by Chapter 22.21 of the Omaha Municipal Code, are summarized herein. All 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 to the plan. From July 1, 1972 through December 31, 1976,employees contributed,by payroll deduction,4% of that portion of their total calendar-year compensation subject to Social Security tax and 8% of the excess; provided,however,that an employee was permitted to make a five-year irrevocable election not to contribute the 8% on excess pay and receive benefits based thereon. Since January 1, 1977 employees contribute,by payroll deduction,4% of their total calendar-yearcompeng`ation. The City currently contributes 5.20% of each member's compensation. An employee who has participated in the plan for 25 years may elect to discontinue his contributions and receive no pension credits for service thereafter. The City makes monthly payments equal to the amount contributed by employees plus the remaining cost of membership service plus an amount sufficient to amortize the past service cost over 50 years from January 1, 1949. Prior service credit is granted for employment with the City before January 1, 1949, and membership service credit is granted for employment thereafter. Compulsory military duty and voluntary military duty in time of war count as service. Early retirement is permitted at age 55 with five years of service,with the accrued benefit reduced 8% per year for retirement prior to age 60. For employees whose age plus service equals or exceeds 85, the 8% per year reduction is eliminated. An employee's monthly pension is equal to 1.667% of average final monthly compensation for each year of service. B-11 V Following is a cash flow analysis of the System for the last five fiscal years: Receipts 1991 1992 1993 1994 1995 Employee Contributions $ 1,660,130 $ 1,689,385 $ 1,767,013 $ 1,831,045 $1,893,037 Employer Contributions 2,157,284 2,191,617 2,293,532 2,288,931 2,423,195 Investment Income 11,238,454 14,007,506 14,351,161 12,631,977 17,064,824 Security Lending Income 44,189. 72,203 86,929 58,093 32,953 Total Receipts 15,100,057 17,960,711 18,498,635 16,810,046 21,414,009 Disbursements Retirement Pensions 4,331,443 4,512,988 4,940,575 5,311,297 5,687,596 Death Benefits 125,000 106,000 126,800 118,000 124,375 Refunds 408,344 445,923 337,153 224,457 541,696 Other Disbursements 531,668 699,401 772,342 755,500 805,592 Total Disbursements 5,396,455 5,764,312 6,176,870 6,409,254 7,159,259 Excess of Receipts Over Disbursements $9,703,602 $12,196,399 $12,321,765 $10,400,792 $14,254.750 Source:Records of Finance Department,City of Omaha. Contributions to the System are determined on an actuarial basis by the firm of Mammel Associates, Inc. and include rates that provide for both normal and accrued liability funding. The latest actuarial study by independent actuary was for the period ended June 30, 1993 and included a 7% investment assumption. Summarized below is financial information concerning the System for the last five fiscal years. 1991 1992 1993 1994 1995 System Total Assets (at cost)' $101,860,326 $114,056,725 $126,378,490 $136,779,282 $151,034,032 Employee Contributions' 1,660,130 1,689,385 1,767,013 1,831,045 1,893,037 Employer Contributions' 2,157,284 2,191,617 2,293,532 2,288,931 2,423,195 Present Value of Past Service Cost' $ 5,183,379 $ 11,085,605 'System Total Assets,Employee Contributions and Employer Contributions figures are taken from City of Omaha records as of December 31,of each year. 'Complete Actuarial Valuations are performed every other year,the last being for the period ended June 30,1993(the Actuarial Valuations for the period ended June 30,1995 have not been released in final form). Present Value of Past Service Cost figures for the periods ended June 30,1991 and June 30, 1993 are from reports of Mammel,Schropp,Swartzbaugh,Engler&Jones,Inc. (predecessor of Mammel Associates,Inc.)and supporting schedules. B-12 City of Omaha Employees' Retirement System Actuarial Balance Sheet June 30, 1993 Resources Assets $116,848,751 Present Value of Future Employee Contributions 12,749,365 Present Value of Future City Contributions 8,354,161 Present Value of Past Service Cost — 11,085,605 Total Resources $149,037,882 Requirements Present Value of Benefits(Past and Future Service) Retired Employees and Beneficiaries Service Retirements $37,689,724 Vested Terminations 471,872 Disability 5,979,498 Spouses 9,335,127 Lump-Sum Death Benefits 1,377,761 $54,853,982 Active Employees and Beneficiaries Service Retirements $71,330,193 Disability 3,371,472 Death Benefits 16,216,782 Refund of Employee Contributions 2,865,453 $94,183,900 Total Present Value of Benefits $149,037,882 Source:Mammel Associates, Inc. According to a preliminary actuarial balance sheet prepared by Milliman&Robertson, Inc.,as of June 30, 1995, the total present value of benefits was$171,000,000,providing a funded ratio of 104% (unchanged from July 1, 1993). B-13 POLICE AND FIREMEN'S RETIREMENT SYSTEM The City of Omaha Police and Firemen's Retirement System became effective on July 1, 1961. Certain of-its provisions, which are governed by Chapter 22.61 of the Omaha Municipal Code, are summarized herein. Membership in the System is limited to and shall include only probationary and regular uniformed personnel of the Police and Fire Departments. Effective in 1996, employees contribute, by payroll deduction, 9.1% of their total monthly salary. The City contributes 14.8% of each member's total monthly salary and$1,327,600 per annum in liquidation of the accrued liability for prior service credit. Retirement is optional at age 50 with 20 or 25 years of service with a lifetime monthly service retirement benefit 1 equal to 40% or 50% of average final monthly compensation,respectively. Every additional year of service past 25 years I increases the pension benefit by 1% to a maximum of 60% with 35 years of service. Following is a cash flow analysis of the system for the last five fiscal years: Receipts 1991 1992 1993 1994 1995 Employee Contributions $ 4,196,139 $ 4,653,431 $ 4,727,924 $ 4,864,435 $ 5,891,964 Employer Contributions 4,795,599 5,294,362 5,403,355 5,559,367 6,540,202 Prior Service Contributions 1,327,600 1,327,600 1,327,600 1,327,600 1,327,600 Investment Income 14,480,580 15,261,657 18,982,706 15,134,787 18,394,234 Security Lending Income 51,703 57.495 57,197 71.297 72.368 24,851,621 26.594,545 30.498,782 26,957,486 32,226,368 Disbursements Retirement Pensions 8,581,053 9,294,463 10,310,011 10,892,870 11,558,275 Death Benefits 44,616 45,260 85,380 133,974 53,025 Refunds 137,653 180,551 79,446 175,319 106,987 Other Disbursements 567,891 856,982 783.244 1,356.909 1,458,504 9.331.213 10,377,256 11,258.081 12,559,072 13,176,791 Excess of Receipts $15,520.408 $16,217,289 $19,240,701 $14,398,414 $19,049,577 Over Disbursements Source:Records of Finance Department,City of Omaha. B-14 i Contributions to the System are determined on an actuarial basis and include rates that provide for normal funding. Contributions are determined by Mammel Associates, Inc. 1991 1992 1993 1994 1995 System Total Assets (at cost)' $141,195,507 $157,412,759 $176,653,460 $191,051,874 $210,101,451 Employee Contributions' 4,196,139 4,653,431 4,727,924 4,864,435 5,891,964 Employer Contributions' 6,123,199 6,621,962 6,730,955 6,886,967 7,867,802 Present Value of Prior Service 15,388,718 15,260,454 ayments- Unfunded Accrued Liability' 27,680,326 21,908,437 'System Total Assets, Employee Contributions and Employer Contributions figures are taken from City of Omaha records as of December 31 of each year. • 'Complete Actuarial Valuations are performed every other year. The present value of Prior Service Payments and Unfunded Accrued Liability figures for 1990 are taken from reports of The Wyatt Company; corresponding numbers for 1992 and 1994 are taken from a report prepared by Mammel Associates, Inc. The 1992 Actuarial Study recommended, and the Pension Board adopted,the following changes in actuarial assumptions: (1)an increase in the salary increase assumption at the lower ages and a decrease at higher ages and(2)a one-third decrease in the turnover assumption at all ages. If these • changes in assumptions had not been adopted, the July 1, 1992 unfunded liability would be $35,109,343. The 1994 study was based on the same assumptions as the 1992 study. During 1977, on the basis of an actuarial balance sheet prepared as of January 1, 1977, the District Court of Douglas County, Nebraska made a determination relative to the unfunded liability for past service credits and the method of funding such amount. The City had adopted a policy whereby the employer contributions each year exceeded the matching requirements and served to amortize in part the past service costs. Commencing in 1979,the City contributes to the Police and Firemen's Retirement System the sum of $1,327,600 per year for 50 years to provide for the amortization of the prior service cost. [Remainder of page intentionally left blank.] • B-15 Police and Firemen's Retirement System Actuarial Balance Sheet as of July 1, 1994 Assets Fund $183,255,226 Present Value of: Member Contributions(9.10%) 54,429,267 City Contributions(10.40%) 62,204,877 • Prior Service Payments 15,260,454 Unfunded Liability 21,908,437 Total Assets $337,058,261 Liabilities Inactive Members: Service Retirements $ 61,358,789 Disability Retirements 31,757,784 Surviving Spouses • 9,761,692 Surviving Children 113,960 Lump Sum Death Benefits 205,368 Terminated Vested 391,285 Total Inactive $103,588,878 Active Members: Service Retirements 177,511,386 Disability Retirements 45,512,533 Death Benefits 8,368,885 Refund of Contributions 937,603 1,138,976 Vesting 233,469.383 Total Active Total Liabilities $337,058,261 Source:Mammel Associates, Inc. B-16 PART TWO INDEPENDENT AUDITORS' REPORT AND GENERAL PURPOSE FINANCIAL STATEMENTS B-17 CITY OF OMAHA, NEBRASKA °�;r,s.,+ Table of Contents Exhibit Page INDEPENDENT AUDITORS' REPORT 1 GENERAL PURPOSE FINANCIAL STATEMENTS Combined Balance Sheet-All Fund Types and Account Groups 1 3 Combined Statement of Revenues,Expenditures and Changes in Fund Balances-All Governmental Fund Types and Expendable Trust Funds 2 6 Combined Statement of Revenues,Expenditures and Changes in Fund Balances- Budget and Actual(Budget Basis)-General and Special Revenue Funds 3 8 Combined Statement of Revenues,Expenses and Changes in Retained Earnings/ Fund Balances-All Proprietary Fund Types and Similar Pension Trust Funds 4 9 Combined Statement of Cash Flows-All Proprietary Fund Types 5 10 . Notes to General Purpose Financial Statements 11 • • (0, KPMG Peat Marwick LAP Two Central Park Plaza Suite 1501 Omaha,NE 68102 233 South 13th Street,Suite 1600 Lincoln, NE 68508-2041 INDEPENDENT AUDITORS' REPORT The Honorable Mayor and Members of the City Council City of Omaha,Nebraska: We have audited the general purpose financial statements of the City of Omaha,Nebraska(the City) as of December 31, 1995 and for the year then ended, as listed in the accompanying table of contents. These general purpose financial statements are the responsibility of the management of the City of Omaha. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. The accompanying comparative financial information was excerpted from the general purpose financial statements of the City as of December 31, 1994 and for the year then ended which were audited by other auditors whose report thereon, dated May 19, 1995, expressed an unqualified opinion on those statements. We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, such general purpose financial statements present fairly, in all material respects, the financial position of the City of Omaha, Nebraska at December 31, 1995, and the results of its operations and the cash flows of its.proprietary fund types for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued a report dated May 16, 1996 on our consideration of the City's internal control structure, and a report dated May 16, 1996 on its compliance with laws and regulations. • Member Ft,-1 of Klynvelc Pea;Mawck Goerceler ®®® Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The combining and individual fund and account group financial statements and schedules in Exhibits A-1 through F-4, and the schedule at Table 5 listed in the accompanying table of contents, which are also the responsibility of the management of the City of Omaha, Nebraska are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the City of Omaha, Nebraska. Such additional information has been subjected to the auditing procedures applied in our audit of the general purpose financial statements and, in our opinion, is fairly presented in all material respects when considered in relation to the general purpose financial statements taken as a whole. The supplemental information in Tables 1 through 4, as listed in the accompanying table of contents, is not a required part of the general purpose financial statements but is supplementary information required by the Governmental Accounting Standards Board. This supplementary information is the responsibility of the management of the City of Omaha, Nebraska. We have applied certain limited procedures which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplemental information. However, we did not audit the information and express no opinion on it. /Oa/4 6?Cd 441° May 16, 1996 2) ,' `�� so IE e r OoNCN- 00 Ncp °° � el e N O n I os . oM hov� r cnnso 0 a 9 pp en so rl eas n N h O eA N M en N .• N h ee! �O F e°• ypp�� pp�p. np S in wdoo11a��69 eypn6 pvi 'el.'el �j Lit T I.00 Nhr- I O I VNI1 enn 1N/1 eel fn �O A. O el '1 h ., ,p aria in 2A2. l� ., N N Owe;' . e - ^ ,. 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T o,P e g .. e e . 3 D a.4- = [= a"� e e b b Z '� o u Q y 'C C7 u mmJ o , § e c e3 'e c z• e7 ea .i is 1 6. 8�•d e. > "s o !.4 . �o0 & = obi -0 . p e u Uwuva 1 [5;-V LfD CITY OF OMAHA, NEBRASKA °'k'MA,~pa. Exhibit 4- Combined Statement of Revenues,Expenses „ce. � .4;t^ g Earnings/Fund �1 b .� and Changes in Retained Balances- All 1' Proprietary Fund Types and Similar Pension Trust Funds °'.b 5� ,-i Year ended December 31, 1995 �"r " (With comparative totals for the year ended December 31, 1994) Proprietary Fund Types Fiduciary Totals Internal Fund Type (Memorandum Only) Enterprise Service Pension Trust 1995 1994 Revenues: Sewerage service charges $30,097,556 — — 30,097,556 30,652,873 Other user charges 2,501,890 — — 2,501,890 3,093,799 Miscellaneous revenues 1,160 504,541 105,321 611,022 706,087 Contributions — — 18,276,026 18,276,026 15,851,363 Investment income — — 35.913.625 35.911625 28.197.943 Total revenues 32.600.606 504.541 54.294.972 87.400.119 78.502.065 Expenses: Payroll and related taxes and benefits 12,956,766 — — 12,956,766 12,514,976 Outside services 6,021,381 — — 6,021,381 5,978,566 Commodities 2,715,849 493,951 — 3,209,800 2,989,623 Depreciation and amortization 8,851,360 35,882 — 8,887,242 8,481,992 Pension plan benefits — — 17,891,328 17,891,328 16,825,831 Contribution refunds — — 648,683 648,683 399,776 Trustee's fees — — 1,920,482 1,920,482 1,656,957 Other operating expenses 130.441 — 1.983 132.424 328.218 Total expenses 30.675.797 529.833 20.462.476 51.668.106 49.175.939 Operating income(loss) 1.924.809 (25.292) 33.832.496 35.732.013 29.326.126 Nonoperating revenue(expenses): Interest income 437,877 — — 437,877 576,918 Interest on revenue bonds (1,180,864) — — (1,180,864) (1,421,704) Interest on capitalized lease obligations (49.099) — — (49.099) (65.252) Total nonoperating expenses (792.086) — — (792.086) (910.038) Transfers:In — — — — 1,012,100 Out (50.000) — — (50.000) — Net transfers (50.000) — — (50.000) 1.012.100 Income(loss)before extraordinary loss 1,082,723 (25,292) 33,832,496 34,889,927 29,428,188 Extraordinary loss on defeasance — — — — (1.856.186) Net income(loss) 1,082,723 (25,292) 33,832,496 34,889,927 27,572,002 Retained earnings/fund balances beginning of year 77,367,300 569,344 331,120,304 409,056,948 376,030,063 Depreciation charged to contributed capital 5.591.605 — — 5.591.605 5.454.883 Retained earnings/fund balances end of year $84.041.628 544.052 364.952.890, 449 38 480 409.0 See accompanying notes to general purpose financial statements. CITY OF OMAHA NEBRASKA °,...A."e° v+!'`=r�s/►r Exhibit 5 - Combined Statement of Cash Flows- �„-::^,ti; ,,,' All Proprietary Fund Typesp't'f.,��--' ... P Y ,Trz lira Year ended December 31, 1995 + "2 (With comparative totals for the year ended December 31, 1994) b�ire p FE109..y Totals - Internal (Memorandum Only) Enterprise Service 1995 1994 Cash flows from operating activities: Operating income(loss) $ 1,924,809 (25,292) 1,899,517 4,097,604 Adjustments to reconcile operating income(loss) to net cash provided by operating activities: Depreciation and amortization 8,851,360 35,882 8,887,242 8,481,992 Changes in assets and liabilities: Receivables 1,904,727 (512) 1,904,215 (754,606) Inventory 12,904 — 12,904 2,088 Warrants payable (294,171) 26,704 (267,467) (2,837,489) Accounts payable (21,999) (10,575) (32,574) (474,151) Deposits payable — — — (81,581) Workers' compensation claims 458,349 — 458,349 420,041 Accrued compensated absences 621,005 — 621,005 (21,409) Accrued liabilities 604,191 — 604,191 (1,486) Deferred revenue — — — (29,260) Accrued payroll 34.894 — 34.894 (12.882) Net cash flows provided by operating activities 14.096.069 26.207 J4.122,276 8.788.861 Cash flows from noncapital financing activities: Operating transfer in — — — 1,012,100 Operating transfer out (50.000) — (50.000) — Net cash flows from noncapital financing activities (50.000) — (50.000) 1.012.100 Cash flows from capital and related financing activities: Principal payments under capital lease obligations (310,902) — (310,902) (294,748) Principal payments on long-term debt (2,500,000) — (2,500,000) — Interest paid on capital lease obligations (49,098) — (49,098) (65,252) Principal payments on notes payable (752,925) — (752,925) (1,424,200) Interest paid on long-term debt (1,189,281) — (1,189,281) (897,800) Capital expenditures (10,726,965) (18,363) (10,745,328) (11,964,611) Proceeds from notes payable 1,085,200 — 1,085,200 4,110,125 Proceeds from long-term debt issuance — — — 26,452,912 Transfer to escrow due to defeasance — — — (28,092,228) Return of grant proceeds — — — (101,019) Contributions from other funds — — — (23.150) Net cash flows from capital and related financing activities (14.443.971) (18.363) (14.462.334) (12.299.971) Cash flows from investing activities: Change in investments,net (2,343,361) — (2,343,361) (270,155) Interest received on investments 381.606 — 381.606 622.360 Net cash flows from investing activities (1.961.755) — (1.961.755) 352.205 Net increase(decrease)in cash and cash equivalents (2,359,657) 7,844 (2,351,813) (2,146,805) Cash and cash equivalents at beginning of year 5.053.313 442.420 5.495.733 7.642.538 Cash and cash equivalents at end of year $ 2.693.651 45042,f4 3143X0 5.495222 See accompanying notes to general purpose financial nancial statements. ' }O CITY OF OMAHA, NEBRASKA ;O'QYIAHA,�yFe*7J Notes to General Purpose Financial Statements �r��I��►' December 31, 1995 1 rea PEe 1. Summary of Significant Accounting Policies 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, as a political subdivision of the State of Nebraska, is exempt from state and Federal income taxes. The following is a summary of the more significant accounting policies: Reporting Entity The City's general purpose financial statements include all funds and account groups of the financial reporting entity. The basic criterion for including a governmental department, agency, institution, commission, public authority, or other governmental organization in the City's financial reporting entity is the significance of the City's financial accountability for the governmental unit. The City's general purpose financial statements blend the activity of the City of Omaha Parking Facilities Corporation. The City has evaluated the several other potential governmental units for inclusion in its financial reporting entity and has determined it would be inappropriate to do so. 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 appoint board members of the Omaha Housing Authority, the Omaha Airport Authority, the Metro Area Transit Authority and the Omaha-Douglas Public Building Commission. The City is not financially accountable for these organizations. 4 9 CITY OF OMAHA NEBRASKA moo!`�°"ANV 4e. Purpose Financial Statements Notes to General 1cVL rti.E'a 1., Continued Basis of Presentation- Fund Accounting The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund balance/retained earnings, revenues and expenditures/expenses as appropriate. The various funds are summarized by type in the general purpose financial statements. The following fund types and account groups are used by the City: — Governmental Fund Types - Governmental funds are those through which most general governmental functions of the City are financed. The acquisition, use and balances of the City's expendable financial resources and the related liabilities (except those accounted for in Proprietary Funds) are accounted for through governmental funds. The measurement focus is upon determination of and changes in financial position, rather than upon net income determination. The following are the City's Governmental Fund Types: • General Fund - The General Fund is the primary operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. • Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than expendable trusts or major capital projects) that are legally restricted to expenditures for specified purposes. • Debt Service Funds - Debt Service Funds are used to account for the accumulation of resources for, and the payment of general long-term debt principal,interest and related costs. • Capital Projects Funds- Capital Projects Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds and similar trust funds). 12 "'- CITY OF OMAHA, NEBRASKA ;O_`AAtHA,A,sa Notes to General Purpose Financial Statements % ' #0VL r r? i . Arl0 FE•�r« 1., Continued Basis of Presentation -Fund Accounting, Continued — Proprietary Fund Types - Proprietary funds are used to account for the City's ongoing organizations and activities which are similar to those often found in the private sector. The measurement focus is upon determination of net income and capital maintenance. The following are the City's Proprietary Fund types: • Enterprise Funds -Enterprise Funds are used to 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 (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be 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. • Internal Service Funds - Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the City or to other governmental units on a cost-reimbursement basis. — Fiduciary Fund Types - Fiduciary Funds are used to account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governmental units and/or other funds. • Trust and Agency Funds - The City's Trust and Agency Funds include Expendable Trusts, Pension Trust and Agency Funds. Pension Trust Funds are accounted for and reported essentially in the same manner as Proprietary Funds. Expendable Trust Funds are accounted for and reported essentially in the same manner as Governmental Funds. Agency Funds are custodial in nature and do not involve measurement of results of operations. 13 CITY OF OMAHA, NEBRASKA 4 07AAMA,NFB Notes to General Purpose Financial Statements .12'PD PEel° 1., Continued Basis of Presentation-Fund Accounting, Continued — Account Groups - Account groups are used to establish accounting control and accountability for the City's general fixed assets and general long-term liabilities. They are concerned only with the measurement of financial position. They are not involved with measurement of results of operations. The following are the City's account groups. • General Fixed Assets Account Group - This account group is established to account for all fixed assets of the City, other than those accounted for in the Proprietary Funds. • General Long-term Debt Account Group - This account group is established to account for all long-term liabilities of the City except those accounted for in the Proprietary Funds. Fixed assets used in Governmental Fund Type operations are accounted for in the general fixed assets account group. Assets purchased are recorded as expenditures in the governmental funds and capitalized at cost in the general fixed assets account group. Public domain (infrastructure) general fixed assets consisting of certain improvements other than buildings, including roads, bridges, curbs and gutters, streets and sidewalks, drainage systems and lighting systems are not accounted for with general fixed assets. Such assets normally are immovable and of value only to the City. Therefore, the purpose of stewardship for capital expenditures is satisfied without recording these assets. No depreciation has been provided for on general fixed assets nor has interest been capitalized. All general fixed assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated general fixed assets are valued at their estimated fair value on the date donated. Property, plant and equipment owned by the Proprietary Funds is stated at cost or estimated historical cost. Contributed fixed assets are recorded at fair value at the time received. Depreciation has been provided over the estimated useful lives using the straight-line method. The estimated useful lives are as follows: Facilities in service 20-75 years All others 3- 10 years 14 aM�.H�,pE III CITY OF OMAHA, NEBRASKA 14A.* Notes to General Purpose Financial Statements ����'�• ' 4.1344100. PD!ED 1. Continued Basis of Presentation-Fund Accounting, Continued Because of their spending measurement focus, expenditure recognition for Governmental Fund Types excludes amounts represented by noncurrent liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as Governmental Fund Type expenditures or fund liabilities. They are instead reported as liabilities in the General Long-term Debt Account Group. All Proprietary Funds and Pension Trust Funds are accounted for on a cost of services or "capital maintenance" measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets. Their reported fund equity (net total assets) is segregated into contributed capital and retained earnings components. Proprietary Fund Type operating statements present increases (revenues) and decreases(expenses)in net total assets. In Proprietary Funds, grants, entitlements or shared revenues received for operations and/or for either capital acquisitions or construction are reported as "nonoperating" revenues. Such resources externally restricted for capital acquisitions or construction are reported as contributed capital. Operating expenses include depreciation on all depreciable fixed assets. Depreciation recognized on assets acquired or constructed through resources externally restricted for capital acquisitions is charged to the appropriate contributed capital account and reported in the operating statement. The net (loss) is bythe amount of depreciation on fixed assets acquired or incomeeP adjusted constructed through such resources externally restricted for this purpose and closed to retained earnings. Contributed capital at December 31, 1995 is net of accumulated depreciation. Basis of Accounting Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the general purpose financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. 15 f. CITY OF OMAHA, NEBRASKA oviLAAMAA ivi,64, Notes to General Purpose Financial Statements {� =I ' t M .1 16#Vfli _. e ti w wOAreD __ 1., Continued Basis of Accounting, Continued All Governmental Funds, Agency Funds and Expendable Trust Funds are accounted for using the modified accrual basis of accounting. Their revenues are recognized when they become measurable and available as net current assets. Major revenue sources and the City's basis of accounting are as follows: • Sales taxes collected by the state through December, property taxes levied and business and occupation taxes due for the current year and remitted to the City within 60 days are considered available and are therefore, recognized as revenues in the subsequent year. ' n of the taxes maybe collected even though a portion g Po ' accordance with CityCharter requirements, it is the City's policy, in to account for these types of revenues when received for budgetary purposes. In applying the measurable and available concept to intergovernmental revenues, the legal and contractual requirements of the numerous individual programs are used as guidance. There are, however, essentially two types of these revenues. For one type, monies must be expended on the specific purpose or project before any amounts will be paid to the City; therefore, revenues are recorded based upon expenditures incurred. For the other type, monies are virtually unrestricted as to purpose of expenditure and are usually revocable only for failure to comply with prescribed compliance requirements. These resources are reflected as revenues at the time of receipt or earlier if the measurable and available criteria are met. Licenses and permits, charges for services, fines and forfeits and miscellaneous revenues (except investment earnings) are recorded as revenues when received in cash because they are generally not measurable until actually received. Investment earnings are recorded as earned,since they are measurable. Special assessments are recorded as revenues in the year assessments become current;those amounts receivable after one year are recorded as deferred revenue. Annual installments not yet due are reflected as special assessment receivables and deferred revenues. The accrual basis of accounting is used by Proprietary Funds and Pension Trust Funds. 16 0 CITY OF OMAHA, NEBRASKA QyUMA.NE Notes to General Purpose Financial Statements {,.�lrsi1►' o� . 4•_ tit 'b.4?pO 1., Continued Budget and Budgetary Accounting The Mayor is required by 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 primarily on a cash basis for revenues except as described above and modified accrual basis for expenditures. The budget presented reflects the revised budget prior to the closing ordinance. In addition, encumbrance accounting is employed. 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. The legal level of control (the level on which expenditures may not legally exceed appropriations) is at the department level. Budgetary control is maintained by department/division and by the following 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. Budgets are prepared by department or division and by fund. The City Charter also requires the City Council each year to make an ad valorem tax levy for a sinking fund (Debt Service Fund) which 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. 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 fund balances since they do not constitute liabilities. As explained in the budget footnote above, December 31, 1995 encumbrances have been reported as expenditures on the budget basis statements. 17 CITY OF OMAHA, NEBRASKA �t *,,* Notes to General Purpose Financial Statements ��" -�' ,WI)) r.4.1f'9r1, �e rED PEO r~ 1., Continued 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 undistributed interest in the principal balance of the pool. Interest earned on the City's pooled cash and investments is credited to the General Fund of the City. Investments Investments, except for deferred compensation fund investments, are stated at cost or amortized cost, which approximates market. Deferred compensation fund investments are stated at fair value. Income from investments held by the individual funds is recorded in the respective funds as it is earned. Inventory Inventory of materials and supplies is stated at cost. Cost is determined on a first-in, first-out basis. The costs of Governmental Fund inventories are recorded as expenditures when purchased. • 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 up to a maximum allowed carryover of 240 hours for civilian bargaining employees and 280 hours for civilian management employees plus the current year's earnings. Beginning in 1995, a civilian bargaining employee is reimbursed for one-eighth of accumulated sick leave to a maximum of 1,600 hours (200 hours). Prior to 1995, a civilian bargaining employee was reimbursed for one-sixteenth of accumulated sick leave to a maximum of 1,600 hours (100 hours). A civilian management employee is reimbursed for one-fourth of accumulated sick leave to a maximum of 1,600 hours (400 hours). Civilian bargaining employees have the option of accruing compensatory leave time at a rate of one and one-half (1-1/2) times the actual hours worked in lieu of the payment of overtime. Employees may accrue a maximum of one hundred twenty (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. >r 1-8 CITY OF OMAHA, NEBRASKA °".M�• ,� Notes to General Purpose Financial Statements Jw. i**L 1 M_ESII%Cyr:4 e.. 4:aka ter"• ti 1., Continued Compensated Absences, Continued In the event of termination, police employees are reimbursed for accumulated vacation time up to a maximum of 280 hours. Upon retirement, death, or resignation after 20 years, police employees receive one-quarter of accumulated sick leave up to a maximum of 1,000 hours. In the event of termination, fire department 24-hour shift employees are reimbursed for accumulated vacation time up to a maximum of 360 hours. Upon retirement, fire department 24-hour shift employees are reimbursed for one-quarter of accumulated sick leave up to a maximum of 1,200 hours. In the event of termination, fire department 40-hour shift employees are reimbursed for accumulated vacation time up to a maximum of 240 hours. Upon retirement, 40-hour shift employees are reimbursed for one-quarter of accumulated sick leave up to a maximum of 240 hours. Compensation for future vacation, sick leave and compensatory time rights is accrued as earned in the Enterprise Funds, using current wage rates. Compensation for future vacation, sick leave and compensatory time is accrued as earned for the Governmental Funds in the general long-term debt account group and is expensed by the Governmental Funds when used. Self-Insurance During 1995, the City adopted Government Accounting Standards Board's Statement No. 10, Accounting and Financial Reporting for Risk Financing and Related Issues. The City self-insures all claims related to personal liability and property damage claims for City-owned vehicles, medical, dental and workers' compensation claims, and the first $100,000 of buildings and contents coverage. Capitalized Interest Interest costs incurred on specific construction of proprietary plant and equipment is capitalized. The rate used in determining the capitalized interest amount was the effective rate during the year of the outstanding debt (3.5% in 1995). Interest costs of $178,208 were capitalized during 1995. Comparative Data Comparative total data for the prior year has been presented in the accompanying general purpose financial statements in order to provide an understanding of changes in the City's financial position and operations. However, comparative (i.e., presentation of prior year totals by fund type)data has not been presented in each of the statements since their inclusion would make the statements unduly complex and difficult to read. 19 0 CITY OF OMAHA, NEBRASKA Notes to General Purpose Financial Statements 1 ne 4440 FEewJa' 1., Continued Total Columns on Combined Statements Total columns on the combined statements are captioned `memorandum only" to indicate they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or cash flows in conformity with generally accepted accounting principles, nor is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregate of this data Unbilled Sewer Revenues Sanitary sewer charges are billed for the City by the Metropolitan Utilities District. Unbilled revenues,representing estimated consumer usage for the period between the last billing date and the end of the period, are not recorded. Had this amount, approximately $1,018,000 at December 31, 1995, been recorded, revenue for 1995 would have been higher by approximately $31,000. Unbilled Sewer Revenues, Continued The City Council sets the rate schedule for the sewer charges. A revised rate structure was developed and approved in June 1990 establishing the sewer service charges for the period September 1990 through December 1994. In the absence of subsequent revisions, the 1994 rate structure will remain in effect. Cash Equivalents For purposes of the combined statement of cash flows, the City considers all highly liquid debt instruments with a maturity of three months or less when purchased to be cash equivalents. 2. Property Taxes The Home Rule Charter of the City of Omaha imposes a tax ceiling for general revenue purposes. The tax levy certified in any year shall not exceed $.6125 per$100 of actual valuation plus whatever tax levy is necessary to provide for principal and interest payments on the indebtedness of the City, and for administrative expenses incurred in issuing and maintaining bonds, and for satisfaction of judgments and litigation expenses in connection therewith. The 1995 general tax levy ($.41630 per $100 of actual valuation) was below the legal limit by $.1962 or $22,128,242. The assessed value upon which the 1995 levy was based was $11,278,410,635. CITY OF OMAHA, NEBRASKA Notes to General Purpose Financial Statements ^ ♦,bjti 47.eD FEtoo 2., Continued The tax levies for all political subdivisions in Douglas County are certified by the County Board on or before September 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 November 1 and become delinquent on December 1 and July 1 following the levy date. Delinquent taxes bear 14% interest Motor vehicle taxes are due when an application is made for registration of a motor vehicle. 3. Fund Deficits Fund deficits exist in the following funds: Special Revenue: Judgment Levy Fund $ 1,429,118 Western Heritage Fund 12,928 Federal Disaster Fund 30,559 Capital Projects: 1992 Recreation and Culture Bond Fund 1994 Issue 111,681 1986 Recreation and Culture Bond Fund 54,623 Capital Avenue East Parking Fund 190,990 Capital Type Special Assessments Funds 4,526,128 Rosenblatt Stadium Expansion Fund 2,502,647 Millard Refrigerated Services Fund 2,130 McKesson Robbins Fund 269.505 These fund balance deficits will be eliminated through collection of special assessments and pledges, additional financing,operating transfers or future property tax collections. 2 CITY OF OMAHA, NEBRASKA °�AHA NE Notes to General Purpose Financial Statements ���" / ' . f � 'r y t 4. Interfund Receivables and Payables Individual interfund receivables and payables at December 31, 1995 were as follows: Interfund Interfund payables receivables General Fund $ — 3.310962 Special Revenue Funds: Judgment Levy 1,397,429 — Street and Highway Allocation — 190,990 Contingent Liability Reserve — 1,397,429 Western Heritage 10,627 — 1993 Federal Assistance Fund 974,395 — Auditorium Renovation 594,338 — Emergency Shelter Grant 23,913 — Repeat Drug Offender Track Program 152,913 — Comprehensive Communities Program — 457,263 Vocational Educational -Governors 6% 19,596 — Cops Phase One 457,038 — Weed and Seed Phase IV 225 — HOME Program 59,696 — HUD Secretary Discretionary Fund 154,611 — Community Development Block Grant — 214,307 Focus Omaha 483 — Job Support Work-up 356 — Job Training Partnership Act — 44.348 Total Special Revenue Funds 3.845.620 2.304.337 Capital Projects Funds: Rosenblatt Stadium Expansion 1,912,919 — 1992 Recreation and Culture Bond 474,727 — Capital Avenue East Parking 190,990 — Civic Auditorium Parking 27,454 — 1992 Recreation and Culture Bond-HR-3299#4 — 1,449,122 1986 Recreation and Culture Bond 308,937 — McKesson Robbins 269,505 — Old Market Parking Garage 7.710 — Total Capital Projects Funds 3.192.242 1.449.122 Enterprise Funds - Golf Revenue Fund 26.559 — Total - all funds $7.064,421 7,064,421 2 CI'. Qsm".dye, CITY OF OMAHA, NEBRASKA 6.4A1• L;�►� Notes to General Purpose Financial Statements tit try • y .1Tep lBetVrt 5. Cash and Investments Statute and bond covenants authorize the City to invest in "investments of the nature which individuals of prudence, discretion and intelligence acquire or retain in dealing with the property of another." Investments throughout the year were substantially the same as those held at year-end. Deposits At December 31, 1995, the City had pooled cash of$3,139,301 with a bank balance of $2,639,350. The City's cash accounts were entirely covered by insurance or by collateral held in joint custody by the pledging bank in the City's name. Interest earned from investments held by the City was$5,410,497 for 1995. Investments made by the City are categorized into these three categories of credit risk: (1) Insured or registered, or securities held by the government or its agent in the government's name. (2) Uninsured and unregistered, with securities held by the counterparty's trust department or agent in the government's name. (3) Uninsured and unregistered, with securities held by the counterparty, or by its trust department or agent but not in the government's name. Investments At year-end,the City of Omaha's investment balances were as follows: Category Not Carrying Market 1 2 3 categorized amount value U.S.Treasury Notes $59,343,271 — — — 59,343,271 59,818,427 U.S.Treasury Bills 15,759,448 — — 11,674,687 27,434,135 27,617,840 Discounted notes — 7,245,507 — — 7,245,507 7,420,176 Demand notes — 56,036 — — 56,036 56,036 Time deposits 500,000 5,457,470 — — 5,957,470 5,957,470 Coporate stocks and bonds — — — 10,756,161 10,756,161 10,756,161 Money market funds — — — 512.833 512.833 512.833 Total investments $75,602,719 12.759.013 — 22.943,681 111305.413 112.138,943 Investments in deferred compensation are carried at market value. These investments consist of mutual funds and pooled investments and therefore are not categorized. CITY OF OMAHA, NEBRASKA Notes to General Purpose Financial Statements O'yyh 5., Continued Investments, Continued Investments of the Idle Fund Investment Pool are made from available cash of all City funds and are not identified with any specific fund. The cash and cash equivalents account at December 31, 1995 consisted of: Carrying Fair amount value Discounted notes $ 7,245,507 7,420,176 U.S. Government and government agency securities 56,537,042 57,107,380 Bank deposits (book balance) 3,139,301 3,139,301 Time deposits 5,900,000 5,900,000 Petty cash 52.682 52.682 72,874,532 73,619,539 Less cash: Included in restricted assets 346,524 346,524 Held with trustee 771.726 771,726 $71,756,282 72,501,289 Investments of the Pension Funds for the Civilian Plan and Uniformed Plan consisted of the following at December 31, 1995: Civilian Plan Uniformed Plan Cost Fair value Cost Fair value Short-term investments $ 6,818,437 6,818,437 11,196,100 11,196,100 U.S.Government and government agency securities 35,145,132 38,843,072 66,200,209 74,172,685 Foreign securities — — 1,000,000 1,065,800 Corporate bonds 36,135,381 37,820,687 38,471,263 40,132,999 Corporate stocks 72.888.316 89.669.030 93.035.154 114.929.180 $ 150.987.266 173.151.226 209.902.726 241.496.764 CITY OF OMAHA, NEBRASKA °,�K�•~` Notes to General Purpose Financial Statements �,�L I�•�iL�'r e Of` "rep h 5., Continued Reconciliation of Investments Cost Fair value Demand notes $ 56,036 56,036 U.S. Government and government agency securities 18,565,677 18,663,200 Certificates of deposit 57,470 57,470 Pension funds 360,889,992 414,647,990 Deferred compensation 22,943,681 22,943,681. 402,512,856 456,368,377 Less investments: Included in restricted assets 2,680,000 2,680,000 Held by trustee 22.943,681 22.943.681 $376,889,175 430,744,696 6. Restricted Assets Restricted assets at December 31, 1995 were comprised of the following: Bond Reserve Construction Accounts Account Total Enterprise Funds: Sewer Revenue Fund: Equity in pooled cash and cash equivalents $ — 346,524 346,524 Investments 2,680.000 — 2.680.000 $2,680,000 346,524 3,026,524 0 CITY OF OMAHA, NEBRASKA Notes to General Purpose Financial Statements v'ork-,14:' i4D REDFV 7. Notes Payable The City has obtained a short-term note to fund the current requirements in the Special Assessment Fund Account 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, dated December 18, 1995, in the amount of $4,600,000, at an interest rate of 5.75% with amounts to be repaid with amounts from special assessments. Revolving loan contracts between the City and the Nebraska Department of Environmental Quality (NDEQ) for the purpose of improving wastewater treatment facilities, dated May 6, 1993 and August 26, 1993, were entered into for amounts not to exceed $2,205,000 and $3,500,000, respectively, at interest rates of 3.5% with amounts to be repaid from user charges within ten years 1� and five years, respectively, and with outstanding balances at December 31, 1995 of$1,261,900 and $2,944,700,respectively. 8. Bonds Payable and Other Long-term Obligations A summary of long-term debt is as follows: Retirements Balances at or other Balances at Jan.1,1995 Additions reductions Dec.31,1995 General Long-term Debt Account Group: General obligation bonds $143,275,000 39,895,000 29,760,000 153,410,000 Tax increment notes and bonds 26,633,132 3,070,938 2,862,971 26,841,099 Special tax revenue bonds, Series 1989 3,870,000 — 170,000 3,700,000 Lease-purchase contracts payable 3,165,000 8,475,000 910,000 10,730,000 Accrued compensated absences 10,146,817 5,806,302 — 15,953,119 Workers' compensation claims 9,860,111 3,553,913 — 13,414,024 Other accrued liabilities 5.395.217 — 1.281.813 4.113.404 Total General Long-term Debt Account Group 202.345.277 60.801.153 '4984.784 228.161,646 Enterprise Funds: Revenue bonds 26,800,000 — 2,500,000 24,300,000 Less unamortized discount (353,128) 44,140 — (308,988) Lease-purchase contracts payable 984,750 — 310,902 673,848 Workers' compensation claims 1.404.006 458.349 — 1.862355 Total Enterprise Funds 28.835.628 502.489 2.810.902 26,527.215 Total-all funds $231 S ,303.6� 37 Use& ;$4,68 J 26 CITY OF OMAHA, NEBRASKA °,,.M..NE Notes to General Purpose Financial Statements ;o� �' 1r. .f 'iyz .1a = e f4'to Peer 8., Continued Long-term debt at December 31, 1995 is comprised of the following individual issues: Effective interest rate at issuance- First Original payable Series date amount Issued Issue semiannually due callable Dec.31,1995 General Obligation Bonds $ 6,000,000 3-15-77 Various purpose 4.71691% 1979- 1996 1987 $ 330,000 20,120,000 6-15-78 Various purpose- refund series 5.05974 1979- 1998 1988 900,000 12,800,000 6-15-79 Various purpose 5.25000 1980-1999 1989 2,560,000 14,600,000 5- 1-90 Various purpose 7.000-7.005 1991 -2010 2000 10,950,000 18,940,000 9- 1-91 Various purpose refund series 6.0622 1992-2011 2004 13,280,000 18,270,000 9-15-91 G.O.-defeasance bonds 6.0465 1992-2009 2002 12,955,000 12,765,000 11- 1-92 Various purpose- refund series 5.25-6.10 1993-2012 2002 10,500,000 13,660,000 11- 1-92 G.O.-defeasance bonds 5.00-6.20 1993-2010 2002 10,265,000 16,895,000 10- 1-93 Various purpose- refund series 4.30-4.75 1994-2013 2003 14,145,000 32,090,000 10-15-93 Various purpose- refund series 4.10-4.80 1994-2008 2003 27,990,000 13,000,000 12- 1-94 Various purpose 5.75 -6.25 1995-2014 2004 12,350,000 17,315,000 11- 1-95 Various purpose- • refund series 4.75-5.00 1996-2015 2005 17,315,000 14,470,000 12- 1-95 G.O.-refunding series 4.70-5.00 1996-2013 2005 14.470.000 Total General Obligation Bonds 148.010.000 Annexed Area Bonds 2,500,000 7-15-73 S.I.D.#188 5.81224% 1974- 1998 1978 545,000 410,000 9-15-87 S.I.D.#230 Registered 7.40-7.80 1988-1999 1992 400,000 3,000,000 5-15-78 S.I.D.#261 4.96722 1978-1996 1983 230,000 • 930,000 9-15-89 S.I.D.#243 Registered 6.50-8.00 1995 -2004 1994 765,000 1,130,000 5- 1-90 S.I.D.#265A Registered 7.00-8.50 1995-2005 1995 1,050,000 1,000,000 9-15-77 S.I.D.#210A 5.60-7.00 1980-1998 1982 290,000 650,000 12- 1-78 S.I.D.#210B 6.00-7.25 1981 -2001 1982 375,000 800,000 12- 1-78 S.I.D.#219B 6.00-8.75 1982-1998 1983 245,000 1,650,000 6- 1-91 S.I.D.#325 Registered 6.00-6.30 1992-1996 1994 1500.000 Total Annexed Area Bonds 5.400.000 Total General Obligation and Annexed Area Bonds $153.410.000 27ap CITY OF OMAHA, NEBRASKA °„„.A ~` Jw�trs0i= Notes to General Purpose Financial Statements °'4s:_;..r.=^ tb err *4 8., Continued Effective Original interest rate amount Issue at issuance Dec.31,1995 Tax Increment Notes $ 580,000 Orpheum Theater 10.25% $ 59,671 670,000 18th Street-Skywalk 6.75 380,000 80,000 1102 Harney 14.00 44,188 200,000 Lackawanna Leather Co. - 58,709 12,480,000 Beta West 8.85 11,311,367 700,000 Scoular Redevelopment 10.25 515,000 160,000 New Idea Building 9.25 7,681 790,000 First National Bank Building- RPI Services 10.38 700,000 760,000 Stockyards-Phase 1 9.00 606,939 80,000 Roseland Theater 10.50 44,294 115,000 Leo Vaughn Manor 10.25 40,699 140,000 Mason School 10.50 87,337 310,000 Lozier 8.25 - 669,375 Spring Valley Plaza 10.25 324,392 70,016 Vinton School 11.25 40,071 87,520 Park School 11.25 52,681 ' 450,000 Redick Tower 11.00 - 205.000 Nogg Bros.Paper Co. 8.25 97,295 284,796 John Day 8.25 119,398 702,250 Spring Valley#2,Phase II 10.25 489,530 42,000 Hanighen Square 8.00 27,056 231,068 K B Foods 10.75 107,981 387,027 Millard Refrigerated Services 11.00 259,665 280,000 Stockyards-Phase II 9.30 245,108 750,000 Joseph Terrace 10.00 349,704 500,000 Hill Hotel 10.75 252,641 200,000 Sleepy Partnership/Sleep Inn 10.00 184,302 85,000 MedCentre Villa 10.25 55,827 120,000 Columbian School 10.25 97,464 412,500 Spring Valley#2 10.25 145,726 210,000 Aspen Ridge Apartments 9.50 194,226 88,250 Central Supply Rubber 10.00 22,041 84,500 Omaha Bolt,Nut&Screw 10.00 70,493 246,250 Eggress-O'Flying Building 10.00 241,907 180,015 National Building 7.50 204,235 180,000 Cannonball Express 10.00 146,279 75,000 Hamilton Terrace Apts. 10.00 70,202 40,000 Bakers Supply Building 10.00 41,661 200,000 Union Plaza - 175,212 200,000 Cannonball Express II 7.25 185,582 561,000 Lozier Corp II 7.00 600,270 581,820 Farnam Park Investments 8.00 616,001 167,600 Kellom Heights 10.00 158,E 1.135.000 }e `" 1,135,000 Food Services of America 8.00 '" r Total Tax Increment Notes carried forward $;0566.099 28 Z CITY OF OMAHA, NEBRASKA Notes to General Purpose Financial Statements -°46.�` ' 11yti. 4T�D PEetV 8., Continued Effective interest rate at issuance- First Original payable Series date amount Issued Issue semiannually due callable Dec.31,1995 Tax Increment Notes,Continued Total Tax Increment Notes brought forward $20.566.099 Tax Increment Bonds $ 5,730,000 1-15-91 Riverfront Redevelopment- Project No. 1-Refunding Bonds 5.9-6.9% 1994-2004 1996 5,065,000 1,385,000 1-15-91 Riverfront Redevelopment- Project No. 1 -Taxable Refunding Bonds 8.2-9.25 1994-2004 1996 1210.000 Total Tax Increment Bonds 6275,000 Total Tax Increment Notes and Bonds $26,841.099 Special Tax Revenue Bonds $ 4,700,000 12- 1-88 Riverfront Redevelopment- 5.8-7.3% 1989-2003 1998 1,870,000 Project 7.625 2008 1.830.000 Total Special Tax Revenue Bonds $ 3,700,E Sewer Revenue Bonds $26,800,000 8- 1-94 Regular Sanitary Sewer Revenue 3.5-5.25% 1995-2003 — $24 3041,000 As of December 31, 1995, the bonded debt service requirements of the City for principal and interest in future years were as follows: Year ending General Obligation Bonded Debt Dec.31, Principal Interest Total 1996 $ 17,365,000 7,991,475 25,356,475 1997 13,615,000 7,190,539 20,805,539 1998 13,075,000 6,496,306 19,571,306 1999 12,540,000 5,833,244 18,373,244 2000 11,695,000 5,206,399 16,901,399 2001 and thereafter 85.120.000 26.376.821 111.496.821 $153.410.000 59.094.784 12.504.784 44. 29 ID CITY OF OMAHA, NEBRASKA ",,.. ~" Notes to General Purpose Financial Statements F�'-:;,, �y �47.PD PEE09' 8., Continued Year ending Enterprise Funds Dec.31, Principal Interest Total 1996 $ 2,900,000 1,116,638 4,016,638 1997 3,020,000 987,788 4,007,788 1998 3,160,000 845,578 4,005,578 1999 3,310,000 690,222 4,000,222 2000 3,520,000 521,127 4,041,127 Thereafter 8.390.000 340.689 8.730.689 $24.300,000 4,502.042 28,802,042 Year ending Tax Increment Bonds Dec.31, Principal Interest Total 1996 $ 455,000 438,110 893,110 1997 475,000 407,486 882,486 1998 520,000 374,681 894,681 1999 550,000 338,349 888,349 2000 590,000 299,230 889,230 2001 and thereafter 3.685.000 734.016 4.419.016 $6.275,000 2,591,822 .86$ 6.872 Year ending Special Tax Revenue Bonds Dec.31, Principal Interest Total 1996 $ 180,000 270,460 450,460 1997 195,000 258,400 453,400 1998 210,000 245,238 455,238 1999 220,000 230,958 450,958 2000 240,000 215,778 455,778 2001 and thereafter 2.655.000 1.238.610 3.893.610 $3,700,000, 2.459,444 6,159,444. 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. At December 31, 1995, the City also had $31,180,000 of authorized but unissued general obligation bonds. 44.. _ 30 ; L CITY OF OMAHA, NEBRASKA °,,���,~` Notes to General Purpose Financial Statements ��o���� ' 'b. i 14D lEo, 8., Continued In November 1995,the City issued$17,315,000 of Series 1995 general obligations—various purpose and refunding bonds. The bonds have interest rates ranging from 4.75% to 5.0% and have annual maturities of $1,030,000 to $700,000 due from 1996 to 2015. The City also annexed several area sanitary and improvement districts (S.I.D.) during the current year. S.I.D. #219, which was originally issued in 1993, was assumed at$4,195,000 by the City during 1995. S.I.D. #335 was also assumed by the City at $1,440,000. Both S.I.D. #219 and #335 were refunded in 1995 with the issuance of Series 1995 General Obligation Refunding Bonds. The City also assumed the following during 1995: Annual Amount S.I.D.# Rate installment assumed 210A 7% $90,000 to$100,000 $ 290,000 210B 7.25 , $25,000 to$100,000 375,000 219B 7% $70,000 to $100,000 310,000 325C — Called on January 1, 1996 1.500.000 $2.475.000 4 47 million in General Obligation Refunding Bonds with On December 15, 1995, the Cityissued $1 g an average interest rate of 4.74% to advance refund $13.91 million which includes $4.95 million of outstanding 1986 Series bonds with an average interest rate of 4.25% and $8.96 million of outstanding annexed S.I.D. bonds with an average interest rate ranging from 4.00% to 6.00%. The net proceeds of $14.50 million (after receipt of $25,348 in accrued interest) was deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the 1986 Series and S.I.D. bonds. As a result, the 1986 Series and S.I.D. bonds are considered to be defeased and the liability for those bonds has been removed from the General Long-term Debt Account Group. 3 01'1 CITY OF OMAHA, NEBRASKA OxA``HAAr.Afe Notes to General Purpose Financial Statements 6.ir'' `.I ' y %•44D PEl11‘)rb 8., Continued In conjunction with the above refunding, on January 1, 1996, the City refunded additional S.I.D. bonds of$3,315,000 with an average interest rate ranging from 6.00% to 7.50%. The amount of the proceeds will be applied to refund these bonds which the City assumed and became legally liable upon annexation of Douglas County Sanitary and Improvement District Nos. 243, 265 and 325. The City advance refunded the 1986 Series and S.I.D. bonds to reduce its debt service payments over 18 years by approximately $1.4 million and results in an economic gain (difference between the present values of the debt service payments on the old and new debt)of approximately$745,000. According to the City Charter,the total amount of general obligation indebtedness 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, 1995 is calculated as follows: Debt limit $384,654,776 General obligation debt (153,410,000) Debt service fund balance (16.177.138) Debt margin $215.067.638 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 monies 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. CITY OF OMAHA, NEBRASKA °'��N.r~` Notes to General Purpose Financial Statements ��°��I� 'p .,. 1-Mil bf +j aria re+O P. 8., Continued In prior years, the City defeased certain general obligation and other bonds by placing the proceeds of to provide for all future debt service payments on the old bonds. irrevocable trustP Ym new bondsman Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City's general purpose financial statements. The amount of in-substance defeased debt outstanding at December 31, 1995 is shown below: General Obligation Bonds 1986 Various Purpose and Refunding $ 4,950,000 1987 Various Purpose 6,000,000 1988 Various Purpose 6.500.000 17.450.000 Annexed Area Bonds S.I.D. #219 4,195,000 S.I.D. #230 900,000 S.I.D.#265 1,160,000 S.I.D.#335 1,440,000 S.I.D. #368 1.265.000 8960.000 Lease-Revenue Bonds 1986 Northwest Library Facilities 1.885.000 Sewer Revenue Bonds Revenue Bonds, 1973 Series 5,065,000 Revenue Bonds, 1980 Series 2,595,000 Revenue Bonds, 1983 Series 2,985,000 Revenue Bonds, 1985 Series(defeasance 1 of Series 1973, 1980 and 1983) 10,150,000 Revenue Bonds, 1986 Series 14.000.000 34.795.000 $63.090.000 CITY OF OMAHA, NEBRASKA °'"t "` Notes to General Purpose Financial Statements {r►�=/ sfA� 'b Fa •�rep!Eel' 9. Leases General Obligation The City is leasing the Orpheum Theater, a waste disposal facility and several libraries and other buildings under noncancellable lease-purchase agreements expiring at various times through 2006, at which time title will be conveyed to the City. 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. The following is a schedule by years of future minimum lease payments under the lease-purchase agreements together with the present value of the net minimum lease payments as of December 31, 1995: Fiscal year ending 1996 $ 1,156,620 1997 1,051,315 1998 947,385 1999 942,880 2000 947,180 Later years 11.732.530 Total minimum lease payments 16,777,910 Less amount representing interest 6.047.910 Total obligation under capital leases with rates of interest from 3.7%to 6.4% $ 10.730,009 The City leases space-in the Omaha-Douglas Civic Center and the adjoining Hall of Justice under a noncancellable operating lease that expires only upon payment of all outstanding bonds of the Omaha-Douglas Public Building Commission (ODPBC). The annual rental payments .are determined based upon actual space occupied by the City for operation and maintenance. ODPBC is a blended component unit of Douglas County. Actual rental payments for 1995 were$819,186. The City created the City of Omaha Parking Facilities Corporation (the Corporation) for the purpose of financing all or a portion of the costs of acquisition, construction, furnishing and equipping of two public parking garages. In September 1995, the Corporation issued $8,475,000 of lease revenue bonds to finance the project. The obligations outstanding at December 31, 1995 are collateralized by the revenues of the Corporation, which consists of the cash rents payable by the City under the lease- purchase agreement between the City and the Corporation. The financial activity of the Corporation is blended into the City's general purpose financial statements. 3 0 CITY OF OMAHA, NEBRASKA `MiA N, Notes to General Purpose Financial Statements �„ ,: , 4 ♦,b.ATe ' 9., Continued Enterprise Funds The City is a party to a noncancellable lease-purchase agreement with the Omaha Pollution Control Corporation involving the use of a packing house waste treatment facility. The agreement expires in 1997, at which time the City can purchase the facility for $1. The agreement provides for annual rentals of$360,000 and is accounted for as a capital lease. The facility is presently not in use. The following is a schedule by years of future minimum lease payments under this capital lease, together with the present value of the net minimum lease payments as of December 31, 1995: Fiscal year ending 1996 $ 360,000 1997 360,000 Later years — Total minimum lease payments 720,000 Less amount representing interest 46.152 Total obligation under capital lease with an interest rate implicit in the agreement of 5.4% $ 673.848 10. Operating Lease Commitments The City has several operating leases for office space at various locations. Future annual minimum lease payments due under these operating leases as of December 31, 1995 are as follows: Year ending Dec.31, Amount 1996 $ 99,272 1997 97,166 1998 60,987 1999 24.916 $282.341 Rental expense for these operating leases for the year ended December 31, 1995 is approximately $158,000. 35 CITY OF OMAHA, NEBRASKA ..? fit/O,k1�NA.Ht :., Notes to General Purpose Financial Statements },'t�L 4lu..�a e b F+ 11. Due from Other Governments The total due from other governments of$12,529,872 includes the following items: Fund/fund type Amount Due from/source General $2,543,149 State of Nebraska, state aid distribution General 5,808,888 State of Nebraska,November sales and use tax General 1,570,108 Douglas County,property tax collections General Debt Service/ Debt Service 6,125 Douglas County,special assessment collections General Debt Service/ Debt Service 756,820 Douglas County,property tax collections City Street Maintenance/ Special Revenue 136,189 Douglas County, wheel tax Special Assessments/ Special Revenue 657 Douglas County, special assessment collections Judgment Levy/ g y Special Revenue 16,167 Douglas County,property tax collections Street and Highway Allocation/ Special Revenue 1,513,646 State of Nebraska, gasoline tax Capital Projects Type Special Assessments/ Capital Projects 32,666 Douglas County, special assessment collections Street and Highway Bond/ Capital Projects 145.457 State of Nebraska,gasoline tax $ 12.529.872 3 I_ CITY OF OMAHA, NEBRASKA °,...A HE Notes to General Purpose Financial Statements 12. Contributed Capital The changes in the City of Omaha's contributed capital accounts for its Proprietary Funds were as follows: Enterprise Sewer Municipal Revenue Dock Beginning balance, contributed capital $ 152,580,336 232,792 Contributions 883,713 — Depreciation transfer (5.568.456) (23.149) Ending balance,contributed capital $ 147.895.593 209,643 13. Joint Venture • The City in conjunction with Douglas County, Nebraska has created the Omaha-Douglas Public Building Commission (the Commission). The Commission's Board is composed of two members from each of the City and Douglas County boards and one nonmember of either entity. The Commission is considered a component unit of Douglas County. The Commission has entered into lease agreements with the City and Douglas County to provide adequate funding for operation of the Civic Center and, with taxes to be levied by the Commission, to provide for the retirement of principal and interest on the debt. Complete audited financial statements for the Commission can be obtained from their office at Suite 1200, Omaha-Douglas Civic Center, Omaha,Nebraska 68183. 14. Employees' Retirement Plans The employees of the City are covered by two single-employer retirement plans. The City of Omaha Employees' Retirement System (Civilian Plan) and the City of Omaha Police and Firefighters Retirement System (Uniformed Plan), as described below, are accounted for by the City as Pension Trust Funds. Civilian Plan Plan Description - The Civilian Plan became effective on January 1, 1949. Its provisions are governed by Chapter 22 of the Omaha Municipal Code. All City employees except the following are covered by the Civilian Plan: police; firefighters; persons paid on a contractual or fee basis; seasonal, temporary, part-time employees; and elected officials who do not make written application. For the year ended December 31, 1995, the City's total payroll was $116,578,015 of which$47,425,691 was covered under the Civilian Plan. 4..s. 0 CITY OF OMAHA, NEBRASKA eciAAHA,NE Notes to General Purpose Financial Statements T\F 1,M1�� n lxa 1y 14.,Continued Civilian Plan, Continued The Civilian Plan, as of the last actuarial valuation date, July 1, 1993, had 2,210 members consisting of: Retirees currently receiving benefits 469 Beneficiaries 247 Disability retirements 59 Current active employees: Vested(City's and employee's portion of benefit) 1,093 Nonvested(employee portion only) 342 2,210 An employee with at least five years of service may retire as early as age 55. If an employee retires prior to age 60 his/her benefit shall be reduced by 8% for each year his/her pension commences prior to the year of his/her 60th birthday. If at retirement an employee's age plus service is greater than or equal to 85, the 8% per year reduction is not applied. An employee's monthly pension equals, for each year of service credit, 1.667% of the average final monthly compensation of the highest annual equivalent in pay periods of the last five years of compensation upon which a 4% contribution was made pursuant to the Code. An employee who terminates before obtaining pension eligibility receives a refund of his/her contributions plus interest (currently 5% per annum). If employment terminates after five years of service, the employee may elect a deferred pension instead of a contribution refund. An employee is treated as an active employee if he or she dies before the pension becomes payable. Employees contribute, by payroll deduction, 4% of their total calendar year compensation. Employees are 100% vested in their contributions. An employee who has participated in the plan for twenty-five years may elect to discontinue his contributions and receive no pension credits for service thereafter. The City makes quarterly payments equal to the amount contributed by employees plus the remaining cost of membership service plus an amount sufficient to amortize the past service cost over thirty years from July 1, 1989. Prior service credit is granted for employment with the City before January 1, 1949, and membership service credit is granted for employment thereafter. Compulsory military duty and voluntary military duty in time of war count as service. The Civilian Plan also provides for certain disability and death benefits. 38 CITY OF OMAHA, NEBRASKA otr�*&Amu, y, Notes to General Purpose Financial Statements ��' ` �' otL'4�a ' ' 4Ten peed °'F 14.,Continued Civilian Plan, Continued Funding Status and Progress - The actuarial present value (APV) of credited projected benefits is a standardized disclosure measure of the accrued pension benefit obligation (PBO). It is the discounted amount of benefits estimated to be payable in the future as a result of employee service through the valuation date, computed by attributing an equal benefit amount (including the effects of projected salary increases and step-rate benefits) to each year of credited and expected future employee service. The APV of credited projected benefits at July 1, 1993 was determined through an actuarial valuation. Significant actuarial assumptions used in the valuation include (a) a rate of return on the investment of present and future assets of 7% a year compounded annually, (b) projected salary increases of 4.5% a year, compounded annually, attributable to inflation and seniority merit, and (c) life expectancies before and after retirement based on the 1984 Unisex Pension Mortality Table. Pension benefit obligation as of July 1,1993 Vested benefits: Participants currently receiving benefits $ 54,853,982 Accumulated employee contributions-including interest 24,544,454 Active participant benefits attributable to employer 30.286.166 109,684,602 Nonvested benefits 2.409.028 Pension benefit obligation 112,093,630 Net assets available for benefits at cost(with a market value of$140,689,071 in 1993) 116.848.751 Assets in excess of pension benefit obligation $ 4.755,121, Annual covered payroll $ 44,254, 1Q Net assets available for benefits at cost as a percentage of PBO 104% Assets in excess of PBO as a percentage of annual covered payroll 11% 39 L CITY OF OMAHA NEBRASKA Notes to General Purpose Financial Statements P � M }i F 4Tep lEetV 14.,Continued Civilian Plan, Continued Contribution Required and Contribution Made - The City uses the Entry Age Normal Cost valuation method to determine its required contribution to the plan. The significant actuarial assumptions used to determine the required contribution are the same as those used to compute the PBO. The actuarially determined City contribution requirement for the year ended June 30, 1993 was $2,108,226, including $1,184,755 of normal cost plus $923,471 of underfunded past service cost, based on a projected covered payroll of $44,254,510, or 4.764% as a percentage of payroll. The funds are allocated a portion of the normal cost based on percentages of payroll. Expense of$394,432 and$386,433 for 1994 and 1993, respectively, was incurred and paid by the funds. Actual City contributions are based on the percentage of payroll calculated by the actuary. Actual contributions at December 31, 1995 and 1994 include the following: 1995 1994 As a percentage As a percentage of current year of current year In dollars covered payroll In dollars covered payroll Employer $2,428,383 5.2% $ 2,286,002 5.2% Employee-required 1,897,028 4.0 1,758,463 4.0 Special contributions - Employee — = 70.328 Total $4,325.411 Q% $4.114.793 22% Three-year historical trend information,as available,is as follows: Assets in excess of Pension Col. 1 pension Annual Col.4 Net assets benefit as a % of benefit covered • as a % of for benefits obligation col.2 obligation payroll col.5 (Col. 1) (Col.2) (Col.3) (Col.4) (Col.5) (Col.6) July 1,1993 $ 116,848,751 $ 112,093,630 104% $4,755,121 44,254,510 11% July 1,1994 No Valuation Available July 1,1995 No Valuation Available Required ten-year historical trend information., as available, is presented in Tables 1 and 2 of the accompanying required supplementary information. 40 CITY OF OMAHA, NEBRASKA °,A�.A.~` Notes to General Purpose Financial Statements �w.-. ",�' ♦ M WI telikZ,47: D} Tl h }y }4D two* 14.,Continued Uniformed Plan Plan Description -The Uniformed Plan became effective July 1, 1961. Its provisions are covered by Chapter 22 of the Omaha Municipal Code. The Uniformed Plan covers all probationary and regular uniformed personnel of the police and fire divisions of the public safety department of the City. For the year ended December 31, 1995, the City's payroll covered under the Uniformed Plan was$64,543,883. As of July 1, 1994, the date of the last actuarial valuation, the.Uniformed Plan had membership as follows: Retirees currently receiving benefits 359 Beneficiaries 245 Disability retirements 237 Vested terminations 3 Current active employees 1.2Q2 2.216. An employee with at least twenty-five years of service may retire as early as age 50. An employee's monthly pension is a percentage (from 20 to 60) of the employee's highest average monthly compensation during any consecutive twelve paid months during the employee's last five years of service. Prior to September 1989 the maximum monthly pension compensation percentage was 50%. In September 1989 the City agreed to increase the percentage by 1% for each year of service over twenty-five years of service to the current maximum of 60%. The Uniformed Plan also provides for certain disability and death benefits. An employee who terminatesprior to obtaining pension eligibility receives a refund of his contributions plus interest. If employment terminates before age 50 with more than twenty years of service and prior to obtaining pension eligibility, the employee may elect to receive,in lieu of a refund, a deferred monthly pension beginning at age 50. 41 (II, CITY OF OMAHA, NEBRASKA °x.H�•Hr Notes to Gen eral Purpose Financial Statements iiwAr..•s 1' Fj 'Pea en•sA)t' 14.,Continued Uniformed Plan, Continued Employees are required to contribute, by payroll deduction, 9.1% (previously 8.15% through mid-September 1989) of total monthly salary. The City is required by the Municipal Code to contribute 10.4% (9.45% through mid-September 1989) of each eligible employee's total monthly salary and the City shall make contributions to fund the cost of pensions accrued for prior service in an amount equal to (a) required interest on the unfunded actuarial liability for prior service, or (b) the actual amount of such pensions as they become due and payable. As a result of litigation, the City has agreed to contribute to the Uniformed Plan $1,327,600 per year which fulfills the City's requirement(b) above. Funding Status and Progress - The APV of credited projected benefits at July 1, 1994 was determined through an actuarial valuation. Significant actuarial assumptions used in the valuation included (a) a rate of return on the investment of present and future assets of 8.5%, and(b)projected annual salary increases for inflation plus merit increases based on age. Pension benefit obligation as of July 1,1994 Vested benefits: Retirees and beneficiaries currently receiving benefits and terminated employees entitled to benefits but not yet receiving them $ 103,588,878 Accumulated employee contributions-including interest 54,000,910 Active participant benefits attributable to employer 50.582.163 208,171,951 Nonvested benefits 35.886.659 Pension benefit obligation 244,058,610 Net assets available for benefits at cost(with a market value of$191,282,653 in 1994) 183.255.226 Unfunded pension benefit obligation $ 60,803.3$4 Annual covered payroll $ 53.379.264 Net assets available for benefits at cost as a percentage of PBO 75% Unfunded PBO as a percentage of annual covered payroll 114% .41110( 42 CITY OF OMAHA, NEBRASKA "4'1'441'' Notes to General Purpose Financial Statements ��►�� >�� e 13.,Continued Uniformed Plan, Continued Contribution Required and Contribution Made - The City uses the Aggregate Cost Valuation Method to determine its required contribution to the Plan. The significant actuarial assumptions used to determine the required contribution are the same as those used to compute the PBO. The Plan's contribution was based on the most recent actuarial determination plus an increase resulting from a change in the Plan's provisions made in September 1990. Actual contributions for the year ended December 31, 1995 include: As a percentage of current year In dollars covered payroll City: Current $ 6,712,564 10.40% Prior service 1,327,600 2.06 Employee-required 5.910.451 9.16 Total $ 13.950,615 21.62% Three-year historical trend information, as available,is as follows: Assets deficient Pension Col. 1 of pension Annual Col.4 Net assets benefit as a % of benefit covered as a % of for benefits obligation col.2 obligation payroll col.5 (Col. 1) (Col.2) (Col.3) (Col.4) (Col.5) (Col.6) July 1,1993 No Valuation Available July 1,1994 $ 195,530,733 244,058,610 80.1% (48,527,877) 53,379,264 (91%) July 1,1995 No Valuation Available Required ten-year historical trend information, as available, is presented in Tables 3 and 4 of the accompanying required supplementary information. 3 CITY OF OMAHA, NEBRASKA Notes to General Purpose Financial Statements 6:��= $41' 15.Deferred Compensation Plan The City of Omaha has a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan permits eligible employees to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, unforeseeable emergency,or permanent disability. All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property, or rights are (until paid or made available to the employee or other beneficiary) solely the property and rights of the City (without being restricted to the provisions of benefits under the plan), subject only to the claims of the City's general creditors. Participants' rights under the plan are equal to those of general creditors of the City in an amount equal to the fair market value of the deferred account for each participant. The . plan's assets are held by an external administrator, and are recorded in the general purpose financial statements at fair market value. It is the City's opinion that the City has no liability for losses which may arise under any legally permitted investment of funds under the plan, but does have the duty of due care that would be required of an ordinary prudent investor. The City has not used these assets to pay general creditors and the City believes that it is unlikely that it will use the assets to satisfy the claims of general creditors in the future. sir 4d CITY OF OMAHA, NEBRASKA cu.N�.~`° Notes to General Purpose Financial Statements 6{o� `..q .. r 40 16.Segment Information for Enterprise Funds The City maintains five Enterprise Funds which provide sewer, marina, dock, parking and golf concession services. Segment information for the year ended December 31, 1995 is as follows: Downtown Golf Dodge Park Redevelopment Concession Sewer Marina Municipal Project Revenue Revenue Fund Fund Dock Fund No.1 Fund Fund Total Operating revenues $ 30,097,556 282,699 60,067 — 2,183,433 32,623,755 Operating expenses: Depreciation and amortization 8,668,409 38,489 38,803 — 105,659 8,851,360 Other 18.993.368 258.901 2.261 780 2.569.127 21.824.437 $ 27,661,777 297,390 41,064 _MR 2,674,786 30,675,797 Operating income (loss) $ 2,43 ,779 (1691) 19,0Q3 (780) ,(491,353) , 1,947,958 Net income(loss) $ 1,570,070 4,980 22,947 (740) (491,33,) 1,105,872 Net working capital(deficit) $ 8,783,347 305,29 137,880 78,125 (254,894) 9,049,821 Total assets $263,875,172 855,658 402,611 78,288 1,692,50 266,904,224 Bonds,notes and workers' compensation payable(long- term)-net of unamortized discount $ 22.969,492 — — 210,133 23,179,62 Current year contributed capital $ 883,713 — — — — 883,713 Fund equity $229,603,412 $54,143 400,861 78,195 1,210,253 232,146,864 Net acquisition of property,plant and equipment $ 10,672,212 2.819 — — 915,732 11,59Q,744 Z.H4 CITY OF OMAHA, NEBRASKA '`���cµ\tN� 'N� Notes to General Purpose Financial Statements ~ J* .41 b%ATP . 17. Fixed Assets General Fixed Assets All assets are valued at estimated historical cost or, if donated, estimated market value at time of donation. The City has elected not to record infrastructure assets or to depreciate general fixed assets. A summary of changes in general fixed assets follows: Balance Balance Jan. 1,1995 Additions Deletions Dec.31,1995 Land $ 25,661,440 1,018,785 — 26,680,225 Buildings and improvements 104,855,342 11,756,657 22,510 116,589,489 Equipment 24.331.436 3.922.534 516.285 27.737.685 $154.848.218 16.697.976 538.795 171.007,399 Proprietary Fund Types A summary of Proprietary Fund Type property,plant and equipment at December 31, 1995 follows: Internal Enterprise Service Land $ 1,306,856 — Buildings 893,540 — Improvements other than buildings 2,113,381 — Equipment,machinery and fixtures 9,053,205 289,093 Sewerage treatment plants and other facilities 320,727,683 — Construction in progress 22.793381 — 356,888,046 289,093 Less accumulated depreciation . 112.651.792 129.241 $244.236.254 159,852 ‘iZ 46 C11- CITY OF OMAHA, NEBRASKA Notes to General Purpose Financial Statements o� S_c�la"• •M1 4rrD two �a 18.Reconciliation of Budget Basis Revenues and Expenditures to GAAP Revenue and expenditures presented on a nonGAAP budget basis of accounting differ from the revenues and expenditures presented in accordance with generally accepted accounting principles (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 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 coming 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 in the following fiscal year and cannot be held until the fiscal year two years subsequent to the fiscal year when the encumbrance was incurred. All proper 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 monies available. A reconciliation of the differences between the budgetary versus GAAP fund equities is presented below: Special General Revenue Budgetary fund equity $ 1,457,316 17,598,430 Record property taxes, sales tax and other 44,403,857 — Record other receivables and accruals 13,915,734 21,409,223 Record other liabilities and payables (3,690,988) (4,463,202) Record deferred revenue (40,749,465) (13,012,949) Other (1.639.091) 248.452 GAAP fund equity,December 31, 1995 $13.697.363 21.779.954 CITY OF OMAHA, NEBRASKA Notes to General Purpose Financial Statements "��" 4' 4q4 'b +i ''1Teo PEe 19.Post-Retirement Health Care Benefits In addition to providing the pension benefits described in note 13, the City provides health insurance coverage, in accordance with the City's Municipal Code and the City's contracts with the Omaha Police Union Local No. 101, the Professional Firefighters Association of Omaha Local No. 385 and the Omaha City Employees Local No. 251. Currently, 419 individuals meet these eligibility requirements. The cost of health insurance coverage is recognized as an expense as premiums are paid. For 1995,these costs approximated$2,100,000. 20. Self-Insurance It is the policy of the City not to purchase commercial insurance for the risks of losses to which it is exposed. Instead, the City management believes it is more economical to manage its risks internally and set aside assets for claim settlement in its General Long-term Debt Account Group. This account group services all claims for risk of loss to which the City is exposed, including general liability, property and casualty, workers' compensation, employee health and accident, environmental and antitrust. Changes in the balance of claims liabilities during the fiscal year 1995 were as follows: Beginning-of-year Current-year Claim End-of-year liability claims payment liability $ 15.255.327 18.603.535 16.331.434 17.527.428 21. Pronouncements Issued but not yet Implemented In November 1994, the Governmental Accounting Standards Board (GASB) issued Statement No. 25,Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans, which establishes financial reporting standards for defined benefit plans and for notes to the financial statements of defined contribution plans of state and local governmental entities. This Statement is effective for periods beginning after June 15, 1996. Also during November 1994, the GASB issued Statement No. 27,Accounting for Pensions by State and Local Governmental Employers, which establishes standards for the measurement, recognition and display of pension expenditures/expenses and related liabilities, assets and note disclosures. This Statement is effective for periods beginning after June 15, 1997. The effect of the implementation of the accounting principles discussed above has not yet been determined by management nor has management determined the basis on which future financial statements will be presented. 48 CITY OF OMAHA, NEBRASKA Notes to General Purpose Financial Statements o�►�,r �� 7 'Y 14 p 22. Commitments The City is a defendant in a number of lawsuits in its normal course of operations. In addition to amounts recorded by the City as other accrued liabilities, the City Attorney is of the opinion that there is a reasonable possibility that the City will incur additional losses on these lawsuits not to exceed$1,670,000. The City is a party to numerous contracts related to design and construction projects within the Wastewater Collection and Treatment System. At December 31, 1995, approximately $5,560,000 of such contracts were not recorded as liabilities as the related construction had not been performed. The City participates in a number of Federally assisted grant programs, principally Federal Highway Construction Grants, Community Development Block Grant, Job Training Partnership Act and other local improvement programs. The programs are subject to financial audits. The amount of expenditures, if any, which 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. 49 "�' APPENDIX C FORM OF CONTINUING DISCLOSURE UNDERTAKING APPENDIX C FORM OF CONTINUING DISCLOSURE UNDERTAKING Following is the text of Section 11 of the Ordinance, comprising the City's continuing disclosure undertaking pursuant to Securities and Exchange Commission Rule 15c2-12(b)(5)(i). Section 11. (a) That the City does hereby covenant and agree and enter into a written undertaking for the benefit of the holders of the Series 1996 Bonds in accordance with Section(b)(5)(i) of Securities and Exchange Commission Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (17 C.F.R. §240.15c2-12) (the "Rule"). Capitalized terms used in this Section 11 and not otherwise defined in this Ordinance shall have the meanings assigned such terms in subsection(d)hereof. It being the intention of the City that there be full and complete compliance with the Rule,this Section shall be construed in accordance with the written interpretative guidance and no-action letters published from time to time by the Securities and Exchange Commission and its staff with respect to the Rule. (b) The City undertakes to provide the following information as provided in this Section 11: (1) Annual Financial Information; (2) Audited Financial Statements, if any; and (3) Material Event Notices. (c)(1) The City shall while any Bonds are Outstanding provide the Annual Financial Information on or before the date which is 270 days after the end of each fiscal year of the City(the"Report Date")to each then existing NRMSIR and the SID, if any. The City shall include with each submission of Annual Financial Information a written representation to the effect that the Annual Financial Information is the Annual Financial Information required by this Section 11 and that it complies with the applicable requirements of this Section 11 and that it has been provided to each then existing NRMSIR and the SID, if any. If the City changes its fiscal year, it shall provide written notice of the change of fiscal year to each then existing NRMSIR or the Municipal Securities Rulemaking Board(the "MSRB") and the SID, if any. It shall be sufficient if the City provides to each then existing NRMSIR and the SID, if any, any or all of the Annual Financial Information by specific reference to documents previously provided to each NRMSIR and the SID, if any, or filed with the Securities and Exchange Commission and,if such a document is a final official statement within the meaning of the Rule, available from the MSRB. (2) If not provided as part of the Annual Financial Information,the City shall provide the Audited Financial Statements when and if available while any Bonds are Outstanding to each then existing NRMSIR and the SID, if any. (3) If a Material Event occurs while any Bonds are Outstanding,the City shall provide a Material Event Notice in a timely manner to each then existing NRMSIR or the MSRB and the SID, if any. Each Material Event Notice shall be so captioned and shall prominently state the date, title and CUSIP numbers of the Bonds. (4) The City shall provide in a timely manner to each then existing NRMSIR or the MSRB and to the SID, if any,notice of any failure by the City while any Bonds are outstanding to provide to the NRMSIRs and the SID, if any, Annual Financial Information on or before the Report Date. (d) The following are the definitions of the capitalized terms used in this Section 11 and not otherwise defined in this Ordinance: (1) "Annual Financial Information"means the financial information or operating data with respect to the City, provided at least annually, of the type included in Appendix B of the final official statement with respect to the Bonds. The financial statements included in the Annual Financial Information shall be prepared in accordance with generally accepted accounting principles("GAAP") for governmental units as prescribed by the Government Accounting'Standards Board("GASB"). Such financial statements may, but are not required to be, Audited Financial Statements. (2) "Audited Financial Statements" means the City's annual financial statements, prepared in accordance with GAAP for governmental units as prescribed by GASB, which financial statements shall have been audited by such auditor as shall be then required or permitted by the laws of the State of Nebraska. (3) "Material Event" means any of the following events, if material,with respect to the Bonds: (i) Principal and interest payment delinquencies; (ii) Non-payment related defaults; (iii) Unscheduled draws on debt service reserves reflecting financial difficulties; (iv) Unscheduled draws on credit enhancements reflecting financial difficulties; (v) Substitution of credit or liquidity providers,or their failure to perform; (vi) Adverse tax opinions or events affecting the tax-exempt status of the Bonds; (vii) Modifications to rights of Bondholders; (viii) Bond calls; (ix) Defeasances; (x) Release, substitution or sale of property securing repayment of the Bonds; and (xi) Rating changes. (4) "Material Event Notice" means written or electronic notice of a Material Event. (5) "NRMSIR" means a nationally recognized municipal securities information repository, as recognized from time to time by the Securities and Exchange Commission by no-action letter for the purposes referred to in the Rule.The NRMSIRs as of the date of this Ordinance are:(i)Bloomberg Municipal Repository, Post Office Box 840, Princeton, New Jersey 08542-0840, Phone: (609)279-3200 and Fax: (609)279-5962; (ii) Donnelley Financial, Municipal Security Disclosure Archive, 559 Main Street, Hudson, Massachusetts 01749, Phone: (800) 580-3670; Fax: (508) 562-1969 and Internet: http:\\www.municipal.com; (iii)Thomson NRMSIR, Attention: Secondary Municipal Disclosure, 3rd Floor, 395 Hudson Street, New York, New York 10014, Phone: (212)807-3826, Fax: (212)989-2078 and Internet: Disclosure@Muller.com; (iv)JJ Kenny Information Services, The Repository, 16th Floor, 65 Broadway, New York, New York 10006, Phone: (212)770-4568 and Fax:(212)797-7994;(v)Moody's NRMSIR,Public Finance InformationCenter,99 Church Street,New York,New York 10007-2796,Phone:(800)339-6306 and Fax:(212)553-1460;and(vi) Disclosure Inc., 5161 River Road, Bethesda, Maryland 20816, Attention: Document Augmentation/Municipal Securities, Phone:(301)951-1450(for issuer-related questions)and Fax: (301)718-2329(for issuers to fax in documents). (6) "SID"means a state information depository as operated or designated by the State of Nebraska and recognized by the Securities and Exchange Commission by no-action letter as such for the purposes referred to in the Rule. As of the date of this Ordinance,there is not a SID in the State of Nebraska. (e) Unless otherwise required by law and subject to technical and economic feasibility, the City shall employ such methods of information transmission as shall be requested or recommended by the designated recipients of the City's information. C-2 ' -\ (f)(1) The continuing obligation hereunder of the City to provide Annual Financial Information, Audited Financial Statements, if any, and Material Event Notices shall terminate immediately once the Bonds no longer are Outstanding. This Section 11,or any provision hereof,shall be null and void in the event that the City obtains an opinion of nationally recognized bond counsel to the effect that those portions of the Rule which require this Section 11, or any such provision, are invalid, have been repealed retroactively or otherwise do not apply to the Bonds, provided that the City shall have provided notice of such delivery and the cancellation of this Section 11 to each then existing NRMSIR or the MSRB and the SID, if any. (2) This Section 11 may be amended, without the consent of the Bondholders, but only upon the City obtaining an opinion of nationally recognized bond counsel to the effect that such amendment,and giving effect thereto, will not adversely affect the compliance of this Section 11 and by the City with the Rule,provided that the City shall have provided notice of such delivery and of the amendment to each then existing NRMSIR or the MSRB and the SID, if any. Any such amendment shall satisfy, unless otherwise permitted by the Rule, the following conditions: (i) The amendment may only be made in connection with a change in circumstances that arises from a change in legal requirements,change in law or change in the identity, nature or status of the obligated person or type of business conducted; (ii) This Section 11, as amended,would have complied with the requirements of the Rule at the time of the primary offering, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances;and (iii) The amendment does not materially impair the interests of Bondholders,as determined either by parties unaffiliated with the City (such as nationally recognized bond counsel), or by approving vote of Bondholders pursuant to the terms of the Ordinance at the time of the amendment. The initial Annual Financial Information after the amendment shall explain, in narrative form, the reasons for the amendment and the effect of the change,if any, in the type of operating data or financial information being provided. (g) Any failure by the City to perform in accordance with this Section 11 shall not constitute an Event of Default with respect to the Series 1996 Bonds. If the City fails to comply herewith,any Bondholder may take such actions as may be necessary and appropriate,including seeking specific performance by court order,to cause the City to comply with its obligations hereunder. C-3 APPENDIX D FORM OF OPINION OF BOND COUNSEL • , . , v APPENDIX D FORM OF OPINION OF BOND COUNSEL [Letterhead of Kutak Rock] December , 1996 City Council of the City of Omaha, Nebraska Omaha/Douglas Civic Center 1819 Farnam Street Omaha, NE 68183 $17,720,000 City of Omaha, Nebraska Various Purpose and Refunding Bonds Series of 1996 Ladies and Gentlemen: We have acted as Bond Counsel in connection with the issuance and sale by the City of Omaha, a municipal ' corporation in the State of Nebraska, of $17,720,000 aggregate principal amount of Various Purpose and Refunding Bonds, Series of 1996 (the "Bonds"). The Bonds are issuable as fully registered Bonds without coupons dated as of December 1, 1996 in the denomination of$5,000 or any integral multiple thereof,bearing interest payable semiannually on June 1 and December 1 of each year commencing June 1, 1997,at the rates per annum set forth in the schedule below and maturing serially in numerical order on December 1, in each of the years and in the principal amounts as follows: Amount Interest Amount Interest Year MaturingRate Year Maturing Rate 1997 $ 1,180,000 % 2007 $ 825,000 % 1998 1,170,000 2008 785,000 1999 1,170,000 2009 785,000 2000 1,160,000 2010 785,000 2001 990,000 2011 785,000 2002 920,000 2012 785,000 2003 920,000 2013 675,000 2004 ' 920,000 2014 675,000 2005 920,000 2015 675,000 2006 920,000 2016 675,000 (Accrued Interest to be Added.) The Bonds maturing December 1, 2007 and thereafter are subject to redemption at the option of the City of Omaha at any time on or after December 1,2006,in whole or in part in inverse order of maturities and within a maturity in such manner as the Paying Agent,deems fair,upon the terms and at the prices set forth therein. The Bonds recite that they are issued by the City of Omaha to provide for payment of the cost of certain(i) streets and highways,(ii)park and park building renovation, (iii) sewers and(iv)public works department and police department facilities and the cost of yJl j ;,' • City Council of the City of Omaha, Nebraska December , 1996 Page 2 refunding certain outstanding general obligation indebtedness of the City, under and pursuant to and in full conformity with the Constitution and Statutes of the State of Nebraska and the Charter of the City of Omaha, and pursuant to and in full compliance with the proceedings of the City Council of the City of Omaha duly enacted and adopted. The City has covenanted in the ordinance pursuant to which the Bonds have been issued to comply with all necessary provisions of the Internal Revenue Code of 1986,as amended(the"Code"),to preserve the exclusion of interest on the Bonds from gross income for federal income tax purposes. Noncompliance by the City with such restrictions may cause the interest on the Bonds to be subject to federal income taxation retroactive to their date of issue. We have examined the Constitution and Statutes of the State of Nebraska, the Charter of the City of Omaha, certified copies of proceedings of the City Council of the City of Omaha authorizing the issuance of the Bonds, and an executed bond of said issue. In our opinion the Bonds have been authorized and issued in accordance with the Constitution and Statutes of the State of Nebraska and the Charter of the City of Omaha, and constitute valid and legally binding obligations of the City, and the City has the power and is obligated to levy ad valorem taxes for the payment of the Bonds and the interest thereon upon all the property within the City of Omaha subject to taxation by the City of Omaha without limitation as to rate or amount. The rights of the owners of the Bonds and the enforceability thereof may be subject to valid bankruptcy, insolvency, reorganization,moratorium and other laws for the relief of debtors. It is also our opinion that,assuming compliance by the City of Omaha with the covenant referred to in the third paragraph of this letter,the interest on the Bonds is excluded from gross income for federal income tax purposes and is not a special preference item for purposes of the federal alternative minimum tax imposed on individuals and corporations. Interest on the Bonds, however, must be included in the "adjusted current earnings" of certain corporations (i.e., alternative minimum taxable income as adjusted for certain items, including those items that would be included in the calculation of a corporation's earnings and profits under Subchapter C of the Code)and such corporations are required to include in the calculation of alternative minimum taxable income 75% of the excess of each such corporation's adjusted current earnings(which includes tax-exempt interest)over its alternative minimum taxable income(determined without regard to this adjustment and prior to reduction for certain net operating losses). The accrual or receipt of interest on the Bonds may otherwise affect the federal income tax liability of the recipient. The extent of these other tax consequences will depend upon the recipient's particular tax status or other items of income or deduction. We express no opinion regarding any such consequences. Purchasers of the Bonds,particularly purchasers that are corporations(including S corporations and foreign corporations operating branches in the United States and corporations subject to the environmental tax imposed by Section 59A of the Code),property or casualty insurance companies, banks, thrifts or other financial institutions or certain recipients of Social Security or Railroad Retirement benefits or individuals who itemize deductions are advised to consult their tax advisors as to the tax consequences of purchasing or holding the Bonds. It is further our opinion that,under the existing laws of the State of Nebraska, interest income on the Bonds is exempt from Nebraska state income taxation as long as it is exempt for purposes of the federal income tax. Very truly yours, [To be signed and delivered at closing by Kutak Rock.] D-2 EXHIBIT B OFFICIAL NOTICE OF SALE $17,720,000 City of Omaha, Nebraska Various Purpose and Refunding Bonds Series of 1996 NOTICE IS HEREBY GIVEN that the City of Omaha, Nebraska, will receive sealed bids for the purchase of$17,720,000 principal amount of City of Omaha, Nebraska, Various Purpose and Refunding Bonds, Series of 1996, at the office of the City Clerk in the City of Omaha/Douglas County Civic Center, 1819 Farnam Street, Omaha, Nebraska 68183 until 11:00 a.m., Omaha (Central) time on December 17, 1996. The bonds offered for sale will be dated December 1, 1996, will be fully registered bonds without coupons of the denomination of $5,000 or any integral multiple of $5,000, and will mature serially on December 1 in each of the years and in the principal amounts as follows: Year of Principal Year of Principal Maturity Amount Maturity Amount 1997 $1,180,000 2007 $825,000 1998 1,170,000 2008 785,000 1999 1,170,000 2009 785,000 2000 1,160,000 2010 785,000 2001 990,000 2011 785,000 2002 920,000 2012 785,000 2003 920,000 2013 675,000 2004 920,000 2014 675,000 2005 920,000 2015 675,000 2006 920,000 2016 675,000 Interest will be payable semiannually on June 1 and December 1 of each year, commencing June 1, 1997. Principal of the bonds will be payable at the corporate office of First National Bank of Omaha, Omaha, Nebraska, the Paying Agent and Registrar for the City of Omaha. Interest on the bonds shall be paid by check or draft mailed to the person in whose name a bond is registered as of the May 15 or November 15, as the case may be, next preceding each interest payment date. 01/533580.1 The bonds maturing December 1, 2007 and thereafter are subject to redemption at the option of the City of Omaha at any time on and after December 1, 2006, in whole, or in part from time to time in the inverse order of maturities and in such manner as the Paying Agent deems fair within a maturity, at the principal amount thereof, the interest accrued to the redemption date and the following redemption premiums (expressed as a percentage of the principal amount redeemed) 2% if redeemed December 1, 2006 or thereafter to and including November 30, 2009, 1% if redeemed December 1, 2009 or thereafter to and including November 30, 2012, and no premium if redeemed December 1, 2012 or thereafter. At least 30 days' notice of redemption will be mailed, postage prepaid, by registered or certified mail to the owner of any bonds to be redeemed in whole or in part in whose name such bonds are registered as of a record date which shall be 45 days prior to the redemption date. The bonds are general obligation bonds of the City of Omaha and the City is obligated to levy ad valorem taxes for the payment of the bonds and interest thereon upon all property within said City subject to taxation by said City without limitation as to rate or amount. The full faith and credit of the City shall be pledged to the prompt payment of the principal of and interest on the bonds. The City of Omaha will receive bids for the bonds only on the Official Bid Form prepared by the City. Bidders shall specify the rate or rates of interest per annum the bonds shall bear, to be expressed in multiples of 1/8 or 1/20 of 1%. The interest rate specified for the bonds of any maturity shall not be less than the interest rate specified for the bonds of any earlier maturity. Bidders are not limited as to the number of rates which may be named, but the rate of interest on each separate maturity must be the same single rate for all bonds of that maturity from the date of the bonds to such maturity date. No bid for less than the entire bond issue, or at a price less than par, will be considered. In addition to the price bid, the successful bidder must pay accrued interest from the date of the bonds to the date of delivery of the bonds and the payment of the full purchase price. The bonds will be awarded to the responsible bidder offering to purchase said bonds at the lowest interest cost to the City, such interest cost to be determined by computing the total dollar interest cost from the date of the bonds to the respective maturity dates and deducting therefrom the amount of premium offered, if any, over and above the principal amount. The City Council will meet at 2:00 p.m., Omaha time, on December 17, 1996 for the purpose of taking action with respect to the sealed bids received. - The City Council reserves the right to reject any or all bids, or to waive any informality or irregularity in any bid. A good faith deposit (the "Deposit") in the form of a certified or cashier's check or a Financial Surety Bond in the amount of $354,400 (2% of the principal amount of the bonds), payable to the order of the City, is required for each bid to be considered. If a check is used, it must accompany each bid. The checks of unsuccessful bidders will be returned promptly after the bonds have been awarded. If a Financial Surety Bond is used, it must be from an insurance company licensed to issue such a bond in the State of Nebraska, and such Financial Surety Bond must be submitted to the City prior to the opening of the bids. The Financial Surety Bond must identify each bidder whose Deposit is guaranteed by such Financial Surety Bond. If the bonds 01/533580.1 2 C) are awarded to a bidder utilizing a Financial Surety Bond, then the successful bidder is required to submit its Deposit to the City in the form of a cashier's check (or wire transfer such amount as instructed by the City) not later than 3:30 p.m., Omaha time, on the next business day following the award. If such Deposit is not received by that time, the Financial Surety Bond may be drawn by the City to satisfy the Deposit requirement. No interest on the Deposit will accrue to any bidder. In the event the successful bidder fails to honor its accepted bid, the Deposit will be retained by the City as liquidated damages; otherwise the Deposit will be returned to the successful bidder upon the delivery of the bonds against payment therefor. The full purchase price of the bonds must be paid in federal funds. The bonds will be delivered on December 30, 1996 or as soon as possible thereafter, at the expense of the City to DTC (as hereinafter defined) in New York, New York. The bonds, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"), New York, New York. DTC will act as securities depository of the bonds. Individual purchases will be made in book-entry form only, in the principal amount of $5,000 and integral multiples thereof. Purchasers will not receive certificates representing their interest in the bonds purchased. Principal and interest will be paid to DTC, which will in turn remit such principal and interest to its participants, for subsequent disbursement to the beneficial owners of the bonds. The successful bidder will be responsible for satisfying the underwriting eligibility requirements of DTC. Kutak Rock, Bond Counsel, will provide to the successful bidder an Original Purchaser's Certificate, stating that at least 10% of the bonds of each maturity have been sold to the public (excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at such initial reoffering prices to the public as shall be provided by the successful bidder. Such Certificate must be completed and returned by the delivery date of the bonds. The proceedings authorizing the issuance of the bonds will provide, subject to the terms and restrictions set forth in such proceedings, that so long as such bonds are outstanding, the bonds may be exchanged at the principal office of the Registrar for a like aggregate principal amount of such bonds in other authorized principal sums of the same series, interest rate and maturity, and may be transferred upon the books of registry at the principal office of the Registrar. Upon delivery of the bonds, the successful bidder will also be furnished with the usual closing papers, including a certificate that no litigation is pending or threatened affecting the validity of the bonds or the power and obligation of the City of Omaha to levy taxes for the payment thereof. The successful bidder will also be furnished, at the expense of the City, with the opinion of Kutak Rock, Bond Counsel, approving the validity of the bonds, which opinion will be printed upon the bonds and will state, among other things, that the interest on the bonds is excluded from gross income for purposes of federal income taxation under existing laws, regulations, rulings and judicial decisions, with such exceptions as shall be required by the terms of the Internal Revenue Code of 1986, as amended, and that such interest is not a specific item 01/533580.1 3 of tax preference for purposes of the federal alternative minimum tax on individuals and corporations. The City of Omaha covenants and agrees to enter into a written agreement or contract, constituting an undertaking to provide ongoing disclosure about the City, for the benefit of the Bondholders on or before the date of delivery of the Bonds as required by Section (b)(5)(i) of Securities and Exchange Commission Rule 15c2-12 (the "Rule"), which undertaking shall be a part of the City's bond ordinance and in the form as summarized in the Preliminary Official Statement, with such changes as may be agreed to in writing by the Underwriters. The City of Omaha is in full compliance with each and every undertaking previously entered into by it pursuant to the Rule. The City of Omaha has prepared a Preliminary Official Statement, dated November 19, 1996, relating to the bonds. The Preliminary Official Statement is in a form "deemed final" by the City for the purpose of Section (b)(1) of the Rule, but it is subject to revision, amendment and completion in the final Official Statement. Within seven business days of the sale of the bonds, the City shall furnish the successful bidder with a reasonable number of copies of the final Official Statement, without additional cost, upon request. Copies of the final Official Statement in excess of a reasonable number may be ordered by the successful bidder at its expense. Authorization is hereby given to redistribute this Official Notice of Sale and the Preliminary Official Statement, but only this entire Official Notice of Sale and the entire Preliminary Official Statement, and not portions thereof, may be redistributed. Copies of the Preliminary Official Statement and copies of the Official Notice of Sale and Official Bid Form may be obtained from the undersigned or from Kirkpatrick, Pettis, Smith, Polian Inc., financial consultants to the City, 10250 Regency Circle, Omaha, Nebraska 68114 or from Kutak Rock, 1650 Farnam Street, Omaha, Nebraska 68102. Dated: November 19, 1996 LOUIS A. D'ERCOLE City Comptroller City of Omaha Omaha/Douglas Civic Center 1819 Farnam Street Omaha, NE 68183 01/533580.1 4 We will pay $ plus a premium of$ . We will also pay accrued interest on the bonds from December 1, 1996 to the date of delivery of the bonds and the payment of the full purchase price. This offer is made subject to all the terms of the Official Notice of Sale of said bonds which is annexed hereto. ❑ Enclosed is a check in the amount of $ drawn on payable to the order of the City of Omaha, Nebraska, which check is to be returned, or retained and applied in accordance with the terms of the Official Notice of Sale; OR ❑ Enclosed is a Financial Surety Bond, identifying the undersigned offeror, in the amount of$ and otherwise complying with the requirements of the Official Notice of Sale applying thereto has been submitted to the City of Omaha, Nebraska prior to the opening of this offer. The names of the underwriters who are associated for the purpose of this offer are listed on the reverse side or on a separate sheet attached hereto. Respectfully submitted, By Name Title No addition or alteration, except as provided above, is to be made to this Proposal, and IT MUST NOT BE DETACHED FROM THE OFFICIAL NOTICE OF SALE. (see other side) 01/533580.1 2 f,l 71� EXHIBIT C PROPOSAL FOR PURCHASE OF $17,720,000 City of Omaha, Nebraska Various Purpose and Refunding Bonds Series of 1996 BONDS TO BE SOLD: DECEMBER 17, 1996 OFFICIAL BID FORM The City Council City.of Omaha Omaha, NE 68183 Members of the City Council: We offer to purchase all, but not less than all, of the legally issued, properly executed obligations of the City of Omaha, Nebraska described as follows: $17,720,000 City of Omaha, Nebraska Various Purpose and Refunding Bonds, Series of 1996, dated December 1, 1996 of the denomination of$5,000 or any integral multiple thereof, in fully registered form without coupons, maturing on December 1 in each of the years and in the principal amounts shown below, and with interest payable June 1, 1997 and semiannually thereafter (December 1, 1997 and June 1 and December 1 of each subsequent year) at the rate or rates of interest per annum as follows: Year of Principal Rate of Year of Principal Rate of Maturity Amount Interest Maturity Amount Interest 1997 $1,180,000 % 2007 $825,000* % 1998 1,170,000 % 2008 785,000* % 1999 1,170,000 % 2009 785,000* % 2000 1,160,000 % 2010 785,000* 2001 990,000 % 2011 785,000* % 2002 920,000 % 2012 785,000* % 2003 920,000 % 2013 675,000* % 2004 920,000 % 2014 675,000* % 2005 - 920,000 % 2015 675,000* % 2006 920,000 % 2016 675,000* % *Redeemable December 1, 2006 and thereafter as stated in the Official Notice of Sale. 01/533580.1 The following computation is furnished for informational purposes only and is not a part of the foregoing Proposal. Total interest bid $ Less premium bid Net interest cost $ Average net interest Check No. received with bid Financial Surety Bond issued by Bank drawn on: or Returned to: and identifying the offeror received prior to the bid opening Accepted this day of December, 1996 Mayor City Clerk 01/533580.1 3 L ZSA CITY OF OMAHA LEGISLATIVE CHAMBER Omaha,Nebr 19 RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA: • WHEREAS, the City Council of the City of Omaha,Nebraska was authorized at an election held on May 11, 1993 to issue Sewer Bonds in the aggregate principal amount of $6,000,000, of which $1,000,000 has been issued; and, WHEREAS,the City Council of the City of Omaha,Nebraska was authorized at an election held on May 11, 1993 to issue Street and Highway Bonds in the aggregate principal amount of$30,000,000,of which$13,320,000 has been issued; and, WHEREAS, the City Council of the City of Omaha,Nebraska was authorized at an election held on May 12, 1992 to issue Recreation and Culture Improvement Bonds in the aggregate principal amount of$12,000,000, of which$9,000,000 has been issued; and, WHEREAS, the City Council of the City of Omaha,Nebraska was authorized at an election held on November 3, 1992 to issue Public Facility Bonds in the aggregate principal amount of$8,000,000,of which$2,500,000 has been issued; and, WHEREAS,the City Council of the City of Omaha,Nebraska was authorized at an election held on May 12, 1992 to issue Public Safety Bonds in the aggregate principal amount of $2,600,000, of which$1,600,000 has been issued; and, WHEREAS, the City Council of the City of Omaha, Nebraska has designated for redemption and retirement certain outstanding bonded indebtedness in the aggregate principal amount of$4,220,000,and pursuant to Sections 10-142 and 10-616,Reissue Revised Statutes of Nebraska, 1943,as amended,is authorized to issue general obligation refunding bonds for the purpose of paying and retiring such outstanding bonded indebtedness; and, By Councilmember Adopted City Clerk Approved Mayor C-25A • CITY OF OMAHA LEGISLATIVE CHAMBER Omaha,Nebr 19 PAGE -2- WHEREAS,the City Council of the City of Omaha,Nebraska has determined that it is necessary and in the best interests of said City that general obligation bonds and general obligation refunding bonds be authorized to be issued pursuant to the six authorizations granted and for the purposes provided in the proceedings of the elections referred to in the first through fifth clauses hereof, and for the refunding purpose referred to in the sixth clause hereof, respectively, and to combine said general obligation bonds and general obligation refunding bonds into a single issue of Various Purpose and Refunding Bonds, Series of 1996, in the aggregate principal amount of not to exceed$17,720,000: Date Amount to be Purpose . Authorized Issued Sewers May 11, 1993 $ 750,000 Street and Highway May 11, 1993 $ 8,100,000 Recreation &Culture May 12, 1992 ' $ 1,700,000 Improvements Public Facility November 3, 1992 $ 2,300,000 Public Safety May 12, 1992 $ 650,000 Refunding -- $ 4.220.000 $17.720.000 WHEREAS,to enable prospective underwriters of said general obligation"Various Purpose and Refunding Bonds, Series of 1996" to comply with Rule 15c2-12 under the Securities Exchange Act of 1934,as amended,it is necessary for the City of Omaha to provide said prospective underwriters with an official statement which (except for certain omissions permitted by said Rule 15c-12)the City deems final as of its date; and, WHEREAS, the Finance Department of the City of Omaha and its financial consultants,Kirkpatrick,Pettis,Smith,Pollan,Inc.,have prepared the Preliminary Official Statement, Official Notice of Sale and Official Bid Forms pertaining to the issuance and sale of said general obligation "Various Purpose and Refunding Bonds, Series of 1996." By Councilmember Adopted City Clerk Approved Mayor C-25A CITY OF OMAHA LEGISLATIVE CHAMBER Omaha,Nebr 19 PAGE -3- NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA: THAT, the Preliminary Official Statement, Official Notice of Sale and Official Bid Form pertaining to the issuance and sale of general obligation "Various Purpose and Refunding Bonds, Series of 1996,"in the Exhibits "A", "B" and"C" attached hereto and by this reference made a part hereof as fully as if set forth herein,are hereby approved,the Preliminary Official Statement is deemed fmal as of its date, November 19, 1996, within the meaning of Rule 15c2-12 under the Securities Exchange Act of 1934,as amended(except for certain omissions permitted by said Rule 15c2-12), and the Finance Director or Acting Finance Director of the City of Omaha is hereby authorized to deliver the aforesaid Preliminary Official Statement on behalf of the City of Omaha. BE IT FURTHER RESOLVED: THAT,the City Comptroller of the City of Omaha be and he is hereby authorized and directed to publish said Official Notice of Sale in such a manner as he shall deem advisable. • BE IT ALSO FURTHER RESOLVED: THAT,the City Clerk of the City of Omaha be and she is authorized and directed to receive sealed proposals on said Official Bid Form for said general obligation "Various Purpose and Refunding Bonds, Series of 1996,"until 11:00 a.m. Omaha Time,December 17, 1996. P:\FIN\4273.SAP APPROVED TO RM: SSIS A ITY 0 Y By.... .. .. Councilmember Adopted NOV 91996 --� - j,, City Clerk Approved I►: -1i'Ih:. „ems/ ,S Mayor . , :1:1 CI c1) 0 0 tAl ,C.,,' t' n ca 8- n ,...`"ri. ''+' ib: rri 3 (7)' N y• cn =, O 'C co cr 0 �• = M o C Q `y Fr M o a o•0 , R. n C 1,.. pr ., ,, ,e,., R , 0 ,4. ,180. = 0. M `• • to � `° C , . ,e a °, '"' o � g o 0- MI a' CD Z ao .p n '— co o n o (PPn co cu '.. 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