2012 City of Edmond, Oklahoma Citizen's Report

2012 Citizen's Report City of Edmond, Oklahoma • Fiscal Year Ending June 30, 2012

Look closer, edmond’s growing.

Table of Contents

1

Director’s Letter City Council and Ward Map Statement of Net Position Change in Net Position Edmond's Sales Tax Edmond's Numbers General Fund Long-Term Debt Electric Utility Rates Edmond's Top Employers Economic Outlook

2 4 6 8 10 12 14 18 20 22 23

Dear Citizens of Edmond, We are pleased to present our Citizens Report for the fiscal ending June 30, 2012. This Citizen’s Report is a condensed version of our Comprehensive Annual Financial Report (CAFR), which is located on our website www.edmondok.com/cafr.

The details in this Citizen’s report summarize our City’s financial position based on the audited financial documents contained in the 2012 Comprehensive Annual Financial Report (CAFR). The CAFR is prepared in accordance with generally accepted accounting principles; this report is in summary form and excludes the City’s discretely presented component units: the Edmond Economic Development Authority (EEDA) and the Edmond Historical Preservation Trust (EHPT).

The City provides a wide range of municipal services, including police and fire protection, the construction and maintenance of streets, highways and other infrastructure, and a multitude of recreational and cultural events throughout the year. The City also provides electric, water, wastewater, drainage, and solid waste services to its residents under the legal entity of the Edmond Public Works Authority. Additional information on these operations may be found in the City’s CAFR in the Notes 1.A in the notes to the financial statements.

The City of Edmond continued to improve its financial condition in preparing the budget for the 2011-2012 fiscal year. In fact, the FY11-12 Budget was the smallest in the past 5 years. Along with a significant reduction in budgeted expenditures, the City also saw an improved growth in its main general revenue source

2

– sales tax. Though the budget assumed a 2% growth, the actual increase from the previous year was nearly 6.5%. Part of this increase was due to the growth in retail sales tax permits from the previous year - 2,870 for FY11-12 compared to 2,566 in FY10-11. After years of public discussion and debate, Edmond voters overwhelmingly approved a half-cent sales tax increase to build a $25.5 million Public Safety Center. Over 73 percent approved Proposition No. 1, which would enact the five-year half-cent sales tax. Even with this increase, Edmond’s sales tax will remain the lower than the sales tax rates of neighboring communities by increasing to a rate of 8.25 percent which went into effect April, 2012. Edmond also saw an increase in both residential and commercial building permits – providing more opportunities for our citizens to support the City by buying locally.

As you review the report, we invite you to share any questions, concerns, or comments you may have.

You may contact the Financial Services Department at 405.359.4521 or visit the City Manager’s office at 24 E. First Street. The fully disclosed audited CAFR and summarized PAFR may be found online at edmondok.com/budget/reports.

Respectfully,

Ross VanderHamm Director of Financial Services

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Planning for Growth...

The City of Edmond is a full service city that emphasizes responsiveness, financial accountability and transparency.

We operate under a Council-Manager form of government established by the 1925 Charter. The Mayor and Council are the policy-making and legislative body, and appoint the City Manager as well as the City Attorney and Municipal Judges. The City Manager provides centralized direction and leadership for the day-to-day administration of city services.

city of edmond ward map

way E x tens ion

I-35

Coffee Creek

Covell

WARD 4

WARD 2

Danforth

WARD 1 Edmond

15th

WARD 3

33rd

Memorial

Charles Lamb

■

Mayor October 2011–13 chukolamb@aol.com

Council Member Ward 1 May 2011–15 victoria.caldwell@edmondok.com

■

Darrell Davis

Council Member Ward 3 November 2011–May 2013 darrell.davis@edmondok.com

■

Victoria Caldwell

Nick Massey

Council Member Ward 4 May 2009–13 nick.massey@edmondok.com

5

■

Elizabeth Waner

Council Member Ward 2 May 2011–15 ebwaner@gmail.com

Stephen Schaus City Treasurer May 2009–13

Choctaw

Bro ad

Sorghum Mill

Henney

Hiwassee

Anderson

Westminister

Post

Douglas

Midwest

Air Depot

Sooner

Coltrane

Bryant

Boulevard

Kelly

Santa Fe

Western

Pennsylvania

Waterloo

Statement of Net Position Net Position indicate the amount of unexpended and available resources the City has in funds combined at a point in time to fund emergencies, shortfalls or other unexpected needs. This allows management to track the City's financial position over time.

The Governmental Activities Net Position for fiscal year ending June 30, 2012, reflect a significant increase in the amount of unrestricted funds as opposed to last year. By tightening up the budget we were able to increase the amount of money in this Unrestricted Fund Balance. The full disclosed Statement of Net Position can be located in our CAFR at www.edmondok.com/cafr.

governmental activities

business-t ype activities

2012

2011

2012

2011

2012

Current assets

$ 92,030

$91,692

$86,245

$82,104

$178,275

$173,796

Capital assets,net

227,800

219,315

202,302

198,498

430,102

417,813

9,897

10,093

8,086

9,016

17,983

19,109

329,727

321,100

296,633

289,618

626,360

610,718

Totals 2011

$ in Thousands

Other non-current assets Total Assets

Current liabilities

15,160

15,170

19,458

19,006

34,618

34,176

Non-current liabilities

63,784

67,803

60,893

66,088

124,677

133,891

Total Liabilities

78,944

82,973

80,351

85,094

159,295

168,067

1,632

1,876

3,816

4,175

130,308

304,574

283,064

Deferred Inflows

2,184

2,299

Net Position Invested in capital assets, net of related debt

165,302

152,756

139,272

Restricted by: Enabling legislation

7,473

8,350

7,473

8,350

Statutory requirements

1,021

1,079

1,021

1,079

69,683

68,391

External contracts Unrestricted Total Net Position

56,945

57,288

12,738

11,103

17,858

16,355

62,638

61,237

80,496

77,592

$ 248,599

$235,828

$214,648

$202,648

$463,247

$438,476

Definitions Capital Assets: The accounting treatment of property, plant and equipment (capital assets) depends on whether the assets are used in governmental fund type or proprietary fund operations. In the government wide financial statements, property, plant and equipment are accounted for as capital assets. The threshold for capitalizaiton is $5,000. All capital assets are valued at historical cost or estimated historical cost if actual is unavailable, except for donated capital assets which are recorded at their estimated fair value at the date of the donation.

Restricted Net Position: Restricted assets include both current and non-current assets that are legally restricted as to their use such as those externally imposed by creditors, laws or regulations or by law through constitutional provisions. The primary restricted assets are related to revenue bond and promissory note trustee accounts restricted for debt service and deposits held for refund.

Investments: Securities backed by the full faith and credit of the US Government have historically been considered risk free and were not subject to credit risk ratings for disclosure purposes. In August 2011, Standard Net Position invested in capital assets, net of related debt: This component of net assets consists of capital assets, including restricted capital assets, and Poor downgraded these securities to AA+. Moody’s Investors Service and Fitch Ratings affirmed their AAA credit ratings. net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes or other borrowings that are attributable to the acquisition, construction, or improvement of those assets.

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Net Position

unrestricted

These numbers represent the available funds to pay for emergencies, shortfalls or other unexpected needs in both the Governmental and Business Type Activities for the fiscal year ended June 30, 2012.

17.8M

$

governmental activities

Sales tax, franchise fees, fines, state and federal grants finance most of the City's services.

General Administrative Services Fire Police Street Construction & Repair Park Maintenance

62.6M

$

business-t ype activities

Income from resident utility bills, public golf club and lake fees finance business-type operations.

Electricity Water Drainage Wastewater Solid Waste KickingBird Golf Club Arcadia Lake

7

Change in Net Position

8

governmental activities * Revenues

Expenses The City’s governmental activities’ increase in net position of $12.7 million represents a 92% increase from the prior year’s change in net position and is primarily the result of increased tax collections and increase in transfers from business-type activities.

80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 In Thousands

$0 2008

2009

2010

2011

2012

business-t ype activities * Revenues

Expenses

120,000

The City's business type activities reported net revenues of $14 million for the year. All individual activities reported net revenue for the year with the exception of lake and economic development which reported net expenses of $0.4 million and $0.4 million respectively. Cooperative purchasing services net change was caused by an increase in charges for services. The business-type activities’ increase in net position of $12 million represents a 19% increase from the prior year’s change in net position which is largely attributable to the increase in charges for services.

100,000

80,000

60,000

40,000

20,000

In Thousands $0 2008

2009

2010

2011

2012

The results indicate the City, as a whole, increased in total net position of $24.7 million is a combination of increased revenue collections in taxes and charges for services.

Expenditures as a whole remained relatively neutral.

* Does not include transfers.

This summary report excludes tranfers. Transfers are used to support Government services.

For full disclosure see our CAFR note section 3.F Interfund Balances and Activities.

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Edmond’s Sales Tax supports city services

8.25

%

surrounding cities

8.50%

Mustang

8.50%

Yukon

8.375%

8.35%

Midwest City

8.00%

Moore

8.00%

Norman

Oklahoma City

sales ta x breakdown The City levies a 3 ¾ cent sales tax on taxable sales within the City. It is recorded as follows: Two cents recorded within the General Fund.

One quarter cent recorded as revenue within the Fire Public Safety Limited Tax Fund to account for improvements to the fire department per voter approval.

One eighth cent recorded as revenue within the Park Sales Tax Fund to account for operations and facility improvement costs of the City’s park and recreation system.

One eighth cent recorded as revenue within the Police Public Safety Limited Tax Fund to account for improvements to the police department per voter approval.

Three quarter cent recorded as revenue within the 2000 Capital Improvement Tax Fund to account for capital improvements as recommended to the City Council by the Capital Projects & Financing Task Force.

Beginning April 1, 2012, a ½ cent sales tax was voted on and approved to fund the new Public Safety Center. This additional sales tax will sunset after 5 years. This Public Safety Center will be designed to combine the Edmond Police Department with Central Communications and Emergency Management into a new 75,000 square foot building.

cit y services The City provides a wide range of municipal services, including police and fire protection, the construction and maintenance of highways, streets, and other infrastructure.

The City also provides electric, water, wastewater, drainage and solid waste services to its residents under the legal entity of the Edmond Public Works Authority (EPWA). The City also provides a multitude of recreational and cultural events throughout the year.

The City’s Kickingbird Golf Course, Arcadia Lake and many City parks provides hours of entertainment to our citizens.

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Where does the money come from? governmental revenue by source 4% 3% 13% Sales and Use Taxes Grants

67%

14%

Charges of Service Franchise & Hotel/Motel Taxes Other

Where does the money go? governmental activities uses 5%

4%

8% Public Safety Streets & Highways

11%

General Government Culture, Parks and Recreation

57%

Interest on Long-Term Debt Health & Welfare

15%

11

4.13

23

average response time minutes

cit y playgrounds

12

47.3 4.0 %

unemployment rate

residents with college degrees or higher

13

%

General Fund The General Fund is the primary operating fund for City services. It is used for all activities except those legally or administratively required to be accounted for in other funds. $35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000

Sales and Use Taxes

5,000,000

All other Revenues

$0 2008

2009

2010

2011

2012

general fund revenues * 2012

2011

2010

2009

2008

Sales and Use Taxes

$31,299,351

$28,917,747

$27,484,883

$29,572,916

$27,558,790

Charges for Services

5,646,433

5,725,602

5,489,487

4,956,056

5,091,629

Fines and Forfeitures

2,068,170

2,436,202

2,097,681

2,375,687

2,424,600

Franchise & Public Service Tax

2,106,551

2,341,305

1,885,284

1,995,831

1,865,472

Intergovernmental

2,394,576

2,062,607

1,670,754

1,412,039

1,685,062

Licenses and Permits

1,450,110

1,082,107

1,083,211

1,063,724

1,418,060

Hotel/Motel Taxes

391,664

344,968

345,208

364,232

417,905

Miscellaneous

233,175

262,851

204,481

174,388

262,286

Investment Income

77,904

91,822

68,734

130,675

272,795

$45,667,934

$43,265,211

$40,329,723

$42,045,548

$40,996,599

general fund expenditures * General Government

2012

2011

2010

2009

2008

$4,551,403

$4,537,796

$3,872,823

$4,693,039

$5,322,173

Public Safety

2,173,006

2,344,616

2,042,573

2,015,189

2,396,900

Health and Welfare

1,891,825

1,708,104

1,974,819

1,549,305

1,369,320

Culture, Parks and Recreation

3,784,739

3,288,899

3,105,684

3,231,498

3,329,844

Streets and Highways

4,164,797

3,920,453

3,098,018

3,333,924

4,421,445

Capital Outlay

1,020,451

1,017,337

415,073

886,650

1,012,684

$17,586,221

$16,817,205

$14,508,990

$15,709,605

$17,852,366

*These graphs do not include transfers. Chart reflects direct operating revenues and expenses.

14

General Fund

explanation of terms

general fund revenues Intergovernmental Activities of two or more governments including revenues such as alcoholic beverage tax, cigarette tax, county – property resale, grants, commercial vehicle tax, and gasoline excise tax.

Sales and Use Taxes Of the 3 ž cent sales tax on taxable sales within the City, 2 cents is recorded as revenue in the General Fund. Use tax is if you have purchased items for use in Oklahoma from retailers who do not collect Oklahoma sales tax, you owe Oklahoma use tax on those items.

Use tax is paid by the buyer when the Oklahoma sales tax has not been collected by the seller. This includes purchases made from an out-of-state retailer whether by mail order, catalog, television shopping networks, radio, Internet, phone or in person.

Licenses and Permits Includes all permits and licenses required by the City including engineering inspections fees, occupational licenses, contractor registration, food handling licenses, oil and gas fees, public safety revenues including plumbing, building, electrical, heat/air, furniture stocking, fixture stocking, fire permits, miscellaneous permits, contractor registration, re-inspection fees, temporary certificate of occupancy, building inspection fees, sign permits, and commercial plan review fees.

Charges for Services Includes all revenues collected on services provided through the General Fund, such as planning filing fees, cemetery revenues, right-of-way fees, Animal Welfare fees, 911 service fee, aquatic center admissions season passes, recreation program fees and other miscellaneous charges.

Hotel/Motel Taxes A 4% tax upon the gross receipts derived from all rent for every occupancy of a room in a hotel in the City.

Fines and Forfeitures Includes all court fines and fees, and building code violations.

Miscellaneous Items that are not covered by any of the aforementioned categories.

Franchise & Public Service Taxes Includes fees assessed for private use of public property.

Investment Income Revenue earned from our investment portfolio.

general fund expenditures Marketplace, Edmond Land Conservancy Inc., recreation programs, Senior Center, Gracelawn Cemetery, and Edmond Historical Preservation and Trust.

General Government Includes city council, municipal court, planning, vehicle service of Citylink buses, Downtown Community Center, and airport maintenance and repairs.

Streets and Highways Street rehabilitation and resurfacing, and upkeep of the medians.

Public Safety Expenditures within the funds that support the safety of our citizens, such as police, fire, emergency management, and animal welfare.

Capital Outlay Expenditures for assets that are intended to be held or used for an extended period of time. Includes land, land improvements, building, building improvements, machinery, equipment, and furniture and fixtures. Also includes infrastructure such as streets, sidewalks, culverts, curbs, roads and bridges. It is tangible in nature and must be in excess of $5,000 per item.

Health and Welfare Includes code enforcement, family services, and social services.

Culture, Parks and Recreation Includes maintenance and administration of 26 parks/playgrounds, pool, sports fields, Festival

15

General Fund

16

Unassigned Fund Balance

General Fund

unassigned fund balance

15

12

9

6

3

0%

2008

2009

2010

2011

2012

The ‘unassigned’ fund balance is an indication of the amount of available resources the City has at a point in time to fund emergencies, shortfalls or other unexpected needs. In this analysis only the General Fund information is reported. In our model, 10% is considered a minimum responsible level, while 30% is considered responsible. As you can see by the above chart, we have tightened up and were able to exceed that 10% responsible level. We continue to strive toward the 30% level. See our complete disclosed information in our CAFR, Basic Financial Statements.

17

Long-Term Debt At fiscal year end, the City had $131.6 million in long-term debt outstanding which represents a $9.0 million or 6.0% decrease from the prior year.

18 16

Long-Term Debt

$ in Thousands

governmental activities

business-t ype activities

2012

2011

Accrued absences

$ 2,761

$ 2,623

$ 539

$ 495

$ 3,300

$ 3,118

- 6%

Revenue bonds*

62,750

66,845

46,625

50,695

109,375

117,540

-7%

19,011

20,097

19,011

20,097

- 5%

$66,175

$71,287

$131,686

$140,755

- 6%

Note payable Total

$65,511

$69,468

2012

Totals

2011

2012

revenue bonds payable: governmental activities * All bonds are secured by utility revenues and pledged sales tax Series Sales Tax & Utility System Bonds

Original Issue Amount

Original Date

Final Maturity

2003 $20,000 1/1/2003 7/1/2023

2004 20,000 6/1/2004 7/1/2024

2005 30,000 12/1/2006 7/1/2026

2010 13,900 12/30/2010 7/1/2021

$ in Thousands

Total

$12,209 13,935 23,740 12,170 $62,750

revenue bonds payable: business-t ype activities * All bonds are secured by utility revenues

Utility System Refunding Bonds

Original Issue Amount

Original Date

Final Maturity

2003A $ 6,615 11/1/2003 1/1/2014

2003B 2,120 11/1/2003 1/1/2024

2004 14,700 6/1/2004 1/1/2024

2005 40,435 10/1/2005 7/1/2024

$ in Thousands

19

Total

$ 1,515 1,465 10,875 32,770 $46,625

2011

% of Change

Electric Utility Rates The monthly fees for utility rates include both the customer charge and the energy charge based on the time of year for the total dollar per kWh used. Refer to our CAFR stat table which provides a breakdown of the complete Rate Schedule for the City of Edmond.

customer charge Edmond Electric

$13

13 12.90 12.80 12.70 12.60 12.50

OG&E

$12.48

12.40 12.30 12.20 12.10 $12

20

.097

$.0968

.095 .093

Summer june – september Average Temperature: 78˚ F Average Humidity: 69%

.091 .089 .087 .085

$.084

.083 .081

$.0833

$.0806

.079 $.077

First 1400 kWh

Over 1400 kWh

$.084

$.084

.085

Shoulder may – october Average Temperature: 74˚ F Average Humidity: 69% “Shoulder” is a term used to identify the months on each side of the Summer and Winter rate periods.

.084 .083 .082 .081

$.0806

$.0806

.080 .079 $.078

First 600 kWh

.09 $.0806

.08

Winter november – april Average Temperature: 46˚ F Average Humidity: 68%

Over 600 kWh

$.084

.07 .06 .05

$.045

$.047

.04 .03 .02 .01 $0

First 600 kWh

21

Over 600 kWh

Edmond's Top Employers Edmond Public Schools

Remy International 2

University of Central Oklahoma

Integris Health Edmond

City of Edmond

Pelco Products

Adfitech

Innovative Healthcare Systems

1

OU Medical Center Edmond

Cox Communications

Petra Industries

Ben E. Keith

'06

107

250*

430

189 2,191 350

250

642

The information above is provided by the Edmond Economic Development Authority.

All companies listed in the Top Employers section are headquartered in the City of Edmond and must meet this criteria to be included in this report.

1,009

NOTE: Information for ten years ago is unavailable. The earliest figures available were used. 1 Formerly Edmond Medical Center. 2 Formerly Unit Parts. 3 * Ben E. Keith is located out of City of Edmond limits but was included in 2006 data, this company is still in business, we are only including those within the City limit.

'12

147

277

140

123 91

311

485 2,598

541

659

1,224

22

Healthy Growth in Education The City of Edmond had an increase in enrollment of 900+ students from FY11 to FY12.

22,472 school enrollment

23

Economic Outlook f y12 – 13 general fund's sales ta x FY12 Actuals

FY13 Actuals

3.0

2.5

2.0

1.5

1.0

$ In Millions

0.5 JUL

AUG

SEP

OCT

NOV

DEC

JAN

FEB

MAR

This chart reflects the actual amount of sales tax received for the entire fiscal year ending June 30, 2012. The sales tax revenues for 2013 thus far has exceeded our actual from last year for the first 5 months of fiscal year 2012. December’s revenues fell below last year; however, the overall accumulative growth is 3.37% so far this year.

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APR

MAY

JUN

Outstanding Achievement

The Government Finance Officers Association of the United States and Canada (GFOA) has given an Award for Outstanding Achievement in Popular Annual Financial Reporting to the City of Edmond, Oklahoma for its Popular Annual Financial Report for the fiscal year ended June 30, 2011. The Award for Outstanding Achievement in Popular Annual Financial Reporting is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government popular reports.

In order to receive an Award for Outstanding Achievement in Popular Annual Financial Reporting, a government unit must publish a Popular Annual Financial Report, whose contents conform to program standards of creativity, presentation, understandability and reader appeal.

An Award for Outstanding Achievement in Popular Annual Financial Reporting is valid for a period of one year only.

We believe our current report continues to conform to the Popular Annual Financial Reporting requirements, and we are submitting it to GFOA.

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2012 Citizen's Report City of Edmond, Oklahoma Fiscal Year Ending June 30, 2012 24 E. First St. • Edmond, Oklahoma 73034 405) 359 –4521 • edmondok.com

Look closer, edmond’s growing.