2014 Popular Financial Annual Report

CELEBRATING

YEARS TURNING THE PAGE OF PROSPERITY

t wo t h o u s a n d f o u r t e e n

CITIZEN’S REPORT City of Edmond, Oklahoma • Fiscal Year Ending June 30, 2014

table of contents

Director’s Letter

2

Edmond's Numbers

12

City Council & Ward Map

4

General Fund

14

Statement of Net Position

6

Long-Term Debt

18

Change in Net Position

8

Edmond's Top Employers

20

Edmond's Sales Tax

Economic Outlook

22

10

1

DEAR CITIZENS OF EDMOND, We are pleased to present our Citizens Report for the fiscal ending June 30, 2014. This Citizen’s Report is a condensed version of our Comprehensive Annual Financial Report (CAFR), both of which are located on our website edmondok.com/budget/reports.

The details in this Citizen’s report summarize our City’s financial position based on the audited financial documents contained in the 2014 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 of Edmond 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 detailed financial 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 continued to improve its financial condition in its main general revenue source – sales tax. With an unprecedented growth last fiscal year, the City’s collections in FY13-14 rouse another 2.7% over last year- setting a record high in sales tax revenue. Our rising population, along with strong retail expansions, provided for a greater-than-expected growth. More detailed information about the City’s sales tax collections can be found in the CAFR.

Another area of growth seen by the citizens this last fiscal year was the opening of several major projects. The Mitch Park YMCA /Competition pool opened February 2014 and has seen record numbers in attendance and membership with the YMCA. The City partnered with the YMCA and Edmond Public Schools on this endeavor. Other projects that were completed and opened to the public were the Edmond 66 Softball complex park, along with the kids splash pad located at the Barnett Park. Citizens have also seen the Kelly road widening project from Covell to Coffee Creek. Work has also continued on the development of the I-35 & Covell Hotel/Conference Center with ground breaking set for January, 2015. Finally, the City’s skyline has seen a big change downtown with the construction of the multi-million dollar Public Safety Center project, which is set for completion in mid-2015.

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 4 0 5 . 3 59.4 52 1 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/City Clerk

2

3

Edmond City Council

■

Victoria Caldwell

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

■

Elizabeth Waner

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

Charles Lamb Mayor May 2013–15 chukolamb@aol.com

■

Darrell Davis

Council Member Ward 3 May 2013–17 darrell.davis@edmondok.com

4

■

Nick Massey

Council Member Ward 4 May 2013–17 nick.massey@edmondok.com

5

Statement of Net Position 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.

Net Investment in capital assets: This component of net assets consists of capital assets, including restricted capital assets, 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.

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.

Investments: Investments are reported depending on their type. For a list of all investments and their how their value was reported, see our CAFR, 1.D. section.

Long-Term Debt: The long-term debt consists primarily of accrued compensated absences, general obligation bonds payable, and revenue bonds payable.

Deferred Outflows/Inflows of Resources: Deferred outflows represents a consumption of net position that applies to a future period and will not be recognized as an expense/expenditure until then. Deferred inflows represents an acquisition of net position that applies to a future period and will not be recognized as revenue until that time.

The governmental activities net position for fiscal year ending June 30, 2014, reflect an increase over prior year's net position. The business-type activities also reflect an increase in net position. The full disclosed Statement of Net Position can be located in our CAFR located at edmondok.com/budget/reports.

Unrestricted net position refers to all other net position that is not restricted or net investments in capital assets.

This represents 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.

Governmental Activities

Current assets Capital assets, net Other non-current assets

Business-Type Activities

Totals

2014

2013

2014

2013

2014

2013

$ 1 1 5 ,7 2 2

$111,333

$90,256

$ 8 6 , 24 3

$205,978

$ 1 9 7, 5 76

270,558

2 5 3 , 176

2 1 8 , 5 24

210,338

4 8 9, 0 8 2

4 6 3 , 514

9, 6 8 3

10,557

6,307

7, 5 74

15,990

18,131

395,963

375,066

315,087

30 4,155

711,050

6 7 9, 2 2 1

870

696

1,858

1,061

2 ,7 2 8

1 ,7 5 7

Current liabilities

2 9,7 1 5

2 5 , 24 5

1 9, 0 7 9

17, 9 4 5

4 8 ,7 9 4

43,190

Non-current liabilities

70,6 40

74 , 8 4 4

52,5 4 0

5 6 , 51 5

123,180

131,359

Total liabilities

100,355

100,089

71,619

74 , 4 6 0

17 1 , 9 74

174 , 5 49

Deferred Inflows

1,560

1,923

1,043

1,296

2,603

3,219

2 0 0 ,7 9 5

17 9, 0 8 2

16 6,26 5

152,6 57

3 6 7, 0 6 0

3 3 1 ,7 3 9

Restricted

74 , 5 4 8

7 7, 4 8 1

12,666

13,162

8 7, 2 14

90,6 4 3

Unrestricted

1 9, 5 7 5

17, 1 8 7

6 5,3 52

6 3 , 6 42

8 4,927

80,829

$294,918

$ 2 7 3 ,7 5 0

$ 24 4 , 2 8 3

$ 2 2 9, 4 6 1

$ 5 3 9, 2 0 1

$503,211

Total assets

Deferred Outflows

Net assets Net Investment in capital assets

Total net position 6

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, 2014.

19.5 $ 65. 3 $

g ov e r n m e n ta l ac t i v i t i e s 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

b u s i n e s s - t y p e ac t i v i t i e s Income from resident utility bills, public golf course and lake fees finance business-type operations.

Electricity

Solid Waste

Water

KickingBird Golf Course

Drainage

Arcadia Lake

Wastewater

Transportation Services

7

Change in Net Position NOTES The results indicate the City, as a whole, increased in total net position of $36 million is a combination of less grant contributing and expenses staying in line with revenue collections. *Does not include transfers.

This summary report excludes transfers. Transfers are used to support Government services. For full disclosure see our CAFR note section 3.F Interfund Balances and Activities.

g ov e r n m e n ta l ac t i v i t i e s * The City’s governmental activities’ increase in net position of $21 million represents a 16% decrease from the prior year’s change in net position and is primarily the result of less capital grant contributions. Total expenses for governmental activities amounted to $73.1 million. Of these total expenses, taxes and other general revenues funded $71.1million, while those directly benefiting from the program funded $12.5 million in grants and other contributions and $10.6 million from charges for services.

100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 In Thousands

$0 2010

2011

2012

2013

Revenues

b u s i n e s s - t y p e ac t i v i t i e s * The City's business type activities reported net revenues of $14.8 million for the year. All individual activities reported net revenue for the year. Significant increase in net revenue was recognized in the electric, water, and wastewater operations due to delay in capital projects and management of operating expenses.

The business-type activities’ showed a significant increase in net revenue for drainage and was due to a capital grant contribution to offset the expense spent in FY2013.

2014

Expenses

140,000

120,000

100,000

80,000

60,000

40,000

20,000

In Thousands $0 2010

2011

2012

2013

Revenues 8

2014

Expenses

9

Edmond’s Sales Tax CITY 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.

supports cit y services

8. 25

%

surrounding cities

8.50% Mustang

8.50% Yukon

8.375%

8.35%

Oklahoma City Midwest City

8.25% Moore

8.00% Norman

s a l e s ta x b r e a k d ow n The State of Oklahoma tax rate is 4.5% and is added to the 3.75% City’s sales tax rate that is levied on all taxable sales within the City. It is recorded as follows:

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.

Two cents recorded within the General Fund.

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.

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.

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.

10

One half cent recorded as revenue within the 2012 Capital Improvement Tax Fund-Public Safety Center to account for building the Public Safety Center per voter approval.

W H ERE DOES TH E MON EY COM E FROM?

W H ERE DOES TH E MON EY G O?

g ov e r n m e n ta l r e v e n u e by s o u r c e

g ov e r n m e n ta l ac t i v i t i e s u s e s

3%

3%

3%

3%

8%

1 1%

9%

13%

70%

18%

59%

Sales and Use Taxes

Public Safety

Grants

Streets & Highways

Charges of Service

General Government

Franchise & Hotel/Motel Taxes

Culture, Parks and Recreation

Other

Interest on Long-Term Debt Health & Welfare

11

12

35

23

m e d i a n ag e o f p o p u l at i o n

c i t y r ec r e at i o n a l pa r ks

47

%

residents with c o l l eg e d eg r e e s o r h i g h e r

202 fires extinguished

13

General Fund NOTES general fund revenues *

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.

$40,000,000

$35,000,000 30,000,000

2014

2013

2012

2011

2010

Sales and Use Taxes

36,065,782

34,403,578

31,299,351

28,917,747

27,484,883

Charges for Services

5,840,154

5,850,591

5,646,433

2,341,305

5,489,487

Fines and Forfeitures

344,968

2,097,681

2,099,735

2,053,931

2,068,170

Franchise & Public Service Tax

2,311,150

2,199,488

2,106,551

2,062,607

1,885,284

Intergovernmental

2,155,268

2,299,771

2,394,576

5,725,602

1,670,754

Licenses and Permits

1,608,680

1,389,282

1,450,110

2,436,202

1,083,211

-

391,664

1,082,107

345,208

296,144

233,175

91,822

204,481

** Hotel/Motel Taxes

25,000,000

Miscellaneous Investment Income

20,000,000 15,000,000 10,000,000

238,605 91,653

54,923

77,904

262,851

68,734

50,411,027

48,547,708

45,667,934

43,265,211

40,329,723

2013

2012

general fund expenditures *

5,000,000

2014

$0 2010

2011

Sales and Use Taxes All other Revenues

2012

2013

2014

2011

2010

General Government

5,209,315

5,002,157

4,551,403

4,537,796

3,872,823

Public Safety

2,430,540

2,340,481

2,173,006

2,344,616

2,042,573

1,889,896

1,891,825

1,708,104

1,974,819

Health and Welfare

448,630

Culture, Parks and Recreation

4,204,333

4,135,376

3,784,739

3,288,899

3,105,684

Streets and Highways

4,436,186

4,350,720

4,164,797

3,920,453

3,098,018

Capital Outlay

660,012

399,249

1,020,451

1,017,337

415,073

17,389,016

18,117,879

17,586,221

16,817,205

14,508,990

* These graphs do not include transfers. Chart reflects direct operating revenues and expenses. **Hotel/Motel revenues beginning in 2013 are now being reported in it own newly created fund.

Beginning in 2014, Citylink Transportation has been removed from the General Fund and is now an Enterprise Fund, both Revenues and Expenditures were moved.

14

General Fund

e x p l a n at i o n o f t e r m s

general fund revenues 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.

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.

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.

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

Investment Income Revenue earned from our investment portfolio.

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

Capital Outlay Expenditures for assets that are intended to be held or used for a 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 excess of $5,000 per item. Starting July, 1, 2014, this amount was increased to $7,500. per item.

general fund expenditures

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

General Government Includes city council, municipal court, planning, Downtown Community Center and airport maintenance and repairs.

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

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

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.

Culture, Parks and Recreation Includes maintenance and administration of 26 parks/playgrounds, pool, sports fields, Festival Marketplace, Edmond Land Conservancy Inc., recreation programs, Senior Center, Gracelawn Cemetery, and Edmond Historical Preservation and Trust.

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

15

General Fund

unassigned fund bal ance

NOTES 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.

15

12

9

6

3

0%

16

2010

2011

2012

2013

2014

17

Long-Term Debt NOTES At fiscal year end, the City had $126.9 million in long-term debt outstanding which represents a $10.1 million or 7% decrease from prior year.

In 2014, the City issued series 2014 Sales Tax and Utility Revenue Refunding Bonds to advance refund the 2003 B and 2004 bond series. The City completed the advance refunding to reduce its total debt service payments over the next ten years and to obtain an economic gain of 2,699,908.

See our complete disclosed information in our CAFR, Notes section 3E, Longterm Debt.

g o v e r n m e n ta l activities

b u s i n e s s -t y p e activities

Totals 2013

2 0 14 2 0 1 3 2 0 14 2 0 1 3 2 0 14

Accrued absences

$ 3 ,13 1

$ 2 ,9 9 3

$ 62 2

$ 5 73

$ 3 ,7 5 3

$ 3 ,5 6 6

5%

Revenue bonds*

67, 8 2 1

73 , 26 0

3 7, 8 9 5

42 ,4 0 0

10 5,716

1 15,6 6 0

-9%

17,52 2

17, 8 9 1

17,52 2

17, 8 9 1

-2 %

$ 5 6 ,0 3 9

$ 6 0, 8 6 4

$1 26 ,9 9 1

$13 7,1 17

-7 %

Note payable Total (Thousands)

** These series represent refundings that have benefitted the City in an economic gain.

$70,9 52

$76 , 2 5 3

r e v e n u e b o n d s paya b l e : g ov e r n m e n ta l ac t i v i t i e s * All bonds are secured by utility revenues and pledged sales tax Series Sales Tax & Utility System Bonds

2005 2010 * * 2012 * * 2013 * * 2 0 14

Original Issue Amount

30,000 13,900 13,255 1 3 ,7 1 0 12,6 4 5

Original Date

12/1/2006 12 /30/2010 8 / 16 / 2 0 1 2 5 / 14 / 2 0 1 3 4 / 3 / 2 0 14

Final Maturity Total

7/ 1 / 2 0 2 6 2 2 , 51 5 7/ 1 / 2 0 2 1 1 0 , 9 7 0 7/ 1 / 2 0 2 3 1 3 , 0 3 0 7/ 1 / 2 0 2 3 1 3 ,7 1 0 7/ 1 / 2 0 24 1 2 , 51 1

$ 6 7, 8 2 1 $ in Thousands

r e v e n u e b o n d s paya b l e : b u s i n e s s - t y p e ac t i v i t i e s * All bonds are secured by utility revenues

18

% of Change

Utility System Refunding Bonds

Original Issue Amount

Original Date

Final Maturity Total

2004 14 ,7 0 0 6 / 1 / 2 0 0 4 1 / 1 / 2 0 24 1 0 , 24 0 2005 4 0 , 4 3 5 1 0 / 1 / 2 0 0 5 7/ 1 / 2 0 24 3 0 , 0 1 5 * * 2 0 14 10,085 4 / 3 / 2 0 14 7/ 1 / 2 0 24 1 0 , 0 8 5

$ in Thousands $ 3 7, 8 9 5

19

Edmond's Top Employers NOTES 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.

107

147

250*

253

155 110

300

430

302

1. Formerly Edmond Medical Center.

189

06'

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.

350

250

14'

325 2,191

362

Source: Edmond Economic Development Authority 661 642

1,302

1,009

Edmond Public Schools

Remy International 2

University of Central Oklahoma

Integris Health Edmond

City of Edmond

Pelco Products

Adfitech

Innovative Healthcare Systems

1

Cox Communications

Petra Industries

Ben E. Keith

OU Medical Center Edmond

20

2,731

23, 484 F Y14

school enrollment

Healthy Growth in Education The City of Edmond had an increase in enrollment of 395 students from FY13 to FY14.

21

Economic Outlook

f y 10–15 g e n e r a l f u n d ' s s a l e s ta x

|

ac t ua l s

NOTES This chart reflects the actual amount of sales tax for the General Fund received for the last 5 fiscal years ending June 30, 2014, as well as the first six months of FY2015. The sales tax revenues collected for 2015 thus far has shown a slight increase compared to last year for the first 6 months actuals. The City beginning in July of 2013 has experienced an exceptional increase in sales tax collections which is a result of the economy bouncing back. More retail shops and restaurants have moved into the Edmond area boosting the economy. Single family building permits have increased causing an increase in sales of lumber, concrete, hardware and appliances. For more information, the MD&A of our CAFR will provide more detailed information on our economic growth.

F Y10

F Y11

F Y12

F Y13

F Y14

F Y15

3.0

2.5

2.0

$ In Millions

1.5 JUL

22

AUG

SEP

OCT

NOV

DEC

JAN

FEB

MAR

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, 2013. 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. City of Edmond, Oklahoma has received a Popular Award for the last four consecutive years (fiscal years ended 2010-2013).

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

23

CELEBRATING

YEARS TURNING THE PAGE OF PROSPERITY

t wo t h o u s a n d f o u r t e e n

CITIZEN’S REPORT

7 North Broadway • Edmond, Oklahoma 73034 • (4 05) 359 – 4 521 • edmondok.com