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02/23/2006 - Minutes (2)
PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH WORK SESSION THURSDAY, FEBRUARY 23, 2006 The City Council of Salt Lake City, Utah met in Work Session on Thursday, February 23, 2006, at 5 : 30 p.m. in Room 326, Committee Room, City County Building, 451 South State Street. In Attendance : Council Members Carlton Christensen, Van Turner, Eric Jergensen, Nancy Saxton, Jill Remington Love, Dave Buhler and Soren Simonsen. Also In Attendance : Cindy Gust-Jenson, Executive Council Director; Gary Mumford, Council Deputy Director/Senior Legislative Auditor; Rocky Fluhart, Management Services Department Chief Administrative Officer; Lynn Pace, Deputy City Attorney; Sam Guevara, Mayor' s Chief of Staff; D. J. Baxter, Mayor' s Senior Advisor; Patrick Thronson, Mayor' s Communications/Public Relations Officer; John Spencer, Real Property Agent; Louis Zunguze, Community Development Administration Director; Jamey Knighton, Acting Human Resource Director; Charles Dinse, Police Chief; Jerry Burton, Police Administrative Services Manager; Mary Guy- Sell, Intermodal Hub Consultant; Edwin Rutan, City Attorney; Sylvia Jones, Council Research and Policy Analyst/Constituent Liaison; Vicki Pacheco, Council Staff Assistant; Vic Blanton, Human Resource Management Classification and Compensation Program Manager; Doug Dansie, Community Planning/Land Use and Transportation; Alexander Ikefuna, Planning Administration Director; Brent Wilde, Community Development Administration Deputy Director; Timothy Harpst, Transportation Director; Gordon Hoskins, Chief Financial Officer; Daniel Mule, City Treasurer; Kelly Murdock, City' s Financial Advisor; John Naser, Engineering Senior Project Manager; Jeffrey Niermeyer, Public Utilities Deputy Director; Gaylord Smith, Engineering Project Manager Consultant; Charles Querry, Fire Chief; Rick Graham, Public Services Director; Janet Wolf, Youth City Division Program Director; Cori Petersen, Citizens Compensation Advisory Committee; Allen Miller, Citizens Compensation Advisory Committee; Ross Youngberg, Hansen- Barnett-Maxwell Auditors; Paul Skeen, Hansen-Barnett-Maxwell Auditors, Roger Boyer, Boyer Company; Ralph Jackson, Utah Transit Authority; Even Nixon, Utah Transit Authority Consultant; Chris Burbank, Internal Affairs Captain; Dana Taylor, DMJM Consulting; and Scott Crandall, Deputy Recorder. Councilmember Buhler presided at and conducted the meeting. The meeting was called to order at 6 : 58 p.m. AGENDA ITEMS #1 . 6:58:52 PM RECEIVE A REPORT FROM THE CITIZEN' S COMPENSATION ADVISORY COMMITTEE. View Attachments Sylvia Jones, Vic Blanton, Rocky Fluhart, Cori Petersen, Allen Miller and Jamey Knighton briefed the Council with the attached 06 - 1 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH WORK SESSION THURSDAY, FEBRUARY 23, 2006 handouts . Councilmember Jergensen asked the Administration to review/identify non-monetary ways to reward employees . Mr. Miller said he recommended the City focus on non-cash performance activities . Councilmember Jergensen said he felt that recommendation needed to be directed to the Administration because they were in charge of implementation. Councilmember Buhler asked Mr. Fluhart if the Administration was aware that 70% of employees felt a job well done went unrecognized by management and if anything was being done. Mr. Fluhart said yes . He said the Administration initiated recognition programs in all departments . Councilmember Christensen said a lot of institutional knowledge would be lost when long-term employees starting retiring in large numbers . He asked how the City was preparing for that situation. Mr. Blanton said the Administration would review the issue. Councilmember Buhler said the City' s bereavement leave policy was recently amended and the entire policy needed to be reviewed and standardized to best practices . He asked if the committee had received the Council' s request to review the issue. Ms . Petersen said no, but the committee would follow-up on the request. Councilmember Buhler said if possible, the Council wanted the committee to review the tuition reimbursement and automobile allowance policies prior to the upcoming budget. Councilmember Love asked the committee to review/compare benefits for part-time employees with other agencies . #2 . 8:09:57PM RECEIVE A BRIEFING REGARDING THE CITY' S COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDING JUNE 30 , 2005 AND THE AUDITOR' S LETTERS REGARDING INTERNAL CONTROLS AND COMPLIANCE. View Attachments Gordon Hoskins, Gary Mumford, Ross Youngberg and Paul Skeen briefed the Council with the attached handouts . #3 . 8:20:19PM RECEIVE A BRIEFING REGARDING FEDERAL APPROPRIATIONS FUNDING REQUEST. View Attachments D.J. Baxter, Gary Mumford, Janet Wolf, Jeffrey Niermeyer and Rick Graham briefed the Council with the attached handouts . Councilmember Christensen said he wanted more information on how the success of youth programs was tracked. Ms . Wolf said she would provide information to the Council . 06 - 2 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH WORK SESSION THURSDAY, FEBRUARY 23, 2006 Discussion was held on Pioneer Park. The Council was in favor of establishing a subcommittee consisting of Council Members Saxton, Jergensen and Simonsen to address the issue. Councilmember Simonsen asked for an individual briefing to update him on the proposal . Discussion was held on groundwater contamination. Council Members said the City did not cause the problem and should not have to provide funding or a federal match. Councilmember Saxton said testing also needed to be done on above ground soils . Council Members wanted the Administration to request enough money to complete the project. Discussion was held on adopting a formal motion or a straw poll to advance the proposed items . Ms . Gust-Jenson said a straw poll would be sufficient because the appropriation was contingent on Council approval . A straw poll was taken on the list of projects with the number one priority being $6 million for ground water contamination and Pioneer Park being subject to the subcommittee' s approval . The majority of the Council was in favor. #4 . 7:17:47 PM RECEIVE A BRIEFING REGARDING THE PROPOSAL FOR THE SALT LAKE CITY PUBLIC SAFETY FACILITIES . View Attachments Charles Dinse, Charles Querry, Chris Burbank, Dan Mule, Dana Taylor, Kelly Murdock, and Gaylord Smith briefed the Council with the attached handouts . The Council asked the Administration to analyze ways to demonstrate long-term operational benefits which would significantly reduce long-term operating costs . Councilmember Jergensen said the information would help Council Members respond to constituent questions . Chief Dinse said they would compile the information. Chief Dinse said the Mayor wanted to establish a committee to identify ways to make the project environmentally sound and save money. Councilmember Simonsen suggested having the Council' s energy and environmental subcommittee participate with the committee. Councilmember Saxton said she wanted a cost estimate for tearing down the existing structure and building a new facility on the site . Chief Dinse said staff would follow-up on the request. He said the information would contain other cost factors such as leasing/retrofitting a temporary facility and moving expenses . Councilmember Buhler said before the proposal went on the ballot, information was needed about maintaining the City' s AAA rating if it borrowed $153 million for the project. Mr. Murdock said he would get 06 - 3 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH WORK SESSION THURSDAY, FEBRUARY 23 , 2006 the information . Councilmember Buhler asked the Administration to prioritize various aspects of the proposal . #5 . 8:19:59 PM RECEIVE A BRIEFING ON THE PROPOSED AMENDMENTS TO CHAPTER 8 , ANIMAL CONTROL ORDINANCE (INCLUDING BUT NOT LIMITED TO PROPOSALS FOR: CAT LICENSING, LICENSING OF FERRETS (LIMIT 2) , LICENSE AND OTHER FEE CHARGES, FERAL CAT COLONY REGISTRATION PERMIT, COMMERCIAL AND PET RESCUE PERMIT AMENDMENTS, INCREASED VIOLATION FEE OF A PET "AT LARGE" , AND HOUSEKEEPING ITEMS) . View Attachments No discussion was held. #6 . (TENTATIVE) RECEIVE COMMENTS FROM THE ADMINISTRATION ON LEGISLATIVE ISSUES . No discussion was held. #7 . 9:09:19PM CONSIDER A MOTION TO ENTER INTO EXECUTIVE SESSION FOR THE PURPOSE OF STRATEGY SESSIONS TO DISCUSS THE PURCHASE, EXCHANGE, OR LEASE OF REAL PROPERTY WHEN PUBLIC DISCUSSION OF THE TRANSACTION WOULD DISCLOSE THE APPRAISAL OR ESTIMATED VALUE OF THE PROPERTY UNDER CONSIDERATION OR PREVENT THE PUBLIC BODY FROM COMPLETING THE TRANSACTION ON THE BEST POSSIBLE TERMS, AND TO DISCUSS PENDING OR REASONABLY IMMINENT LITIGATION; PURSUANT TO UTAH CODE ANN. § § 52-4-4 , 52-4-5 (1) (a) (iii) , AND 52-4-5 (1) (a) (iv) , AND ATTORNEY-CLIENT MATTERS THAT ARE PRIVILEGED, PURSUANT TO UTAH CODE ANN. § 78-24-8 . Councilmember Simonsen moved and Councilmember Saxton seconded to enter into Executive Session, which motion carried, all members voted aye . See file M 06-2 for tape and sworn statement . #7 . 9:04:53PM REPORT OF THE EXECUTIVE DIRECTOR, INCLUDING A REVIEW OF COUNCIL INFORMATION ITEMS AND ANNOUNCEMENTS . See file M 06-5 for announcements . The meeting adjourned at 9 : 46 p .m. COUNCIL CHAIR CHIEF DEPUTY CITY RECORDER 06 - 4 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH WORK SESSION THURSDAY, FEBRUARY 23, 2006 This document along with the digital recording constitute the official minutes of the City Council Work Session meeting held February 23, 2006 . sc 06 - 5 CCrCkt-7,-, OFFICE OF THE CITY COUNCIL Salt Lake City Council AGENDA City Council Chambers City& County Building 451 South State Street,Room 326 Salt Lake City,Utah Thursday, February 23, 2006 5:30 p.m. 5:00 p.m., Some Council Members may dine together in Room 125 at the City& CountyBuilding. (The room is open to the public.) A. WORK SESSION: 5:30 p.m.,Room 326, City& County Building,451 South State Street 1. The Council will receive a report from the Citizen's Compensation Advisory Committee. 2. The Council will receive a briefing regarding the City's Comprehensive Annual Financial Report for the year ending June 30,2005 and the auditor's letter's regarding internal controls and compliance. 3. The Council will receive a briefing regarding federal appropriations funding request. 4. The Council will receive a briefing regarding the proposal for the Salt Lake City Public Safety Facilities. 5. The Council will receive a briefing on the proposed amendments to Chapter 8,Animal Control ordinance(including but not limited to proposals for: cat licensing, licensing of ferrets(limit 2), license and other fee changes, feral cat colony registration permit, commercial and pet rescue permit amendments, increased violation fee of a pet"at large,"and housekeeping items). 6. (Tentative)The Council will receive comments from the Administration on Legislative issues. 7. The Council will consider a motion to enter into Executive Session for the purpose of strategy sessions to discuss the purchase, exchange, or lease of real property when public discussion of the transaction would disclose the appraisal or estimated value of the property under consideration or prevent the public body from completing the transaction on the best possible terms, and to discuss pending or reasonably imminent litigation; pursuant to Utah Code Ann. § § 52-4-4, 52-4-5(1)(a)(iii) and 52-4-5(1)(a)(iv), and attorney-client matters that are privileged,pursuant to Utah Code Ann. § 78-24-8. 8. Report of the Executive Director, including review of Council information items and announcements. B. OPENING CEREMONY: (NONE) 451 SOUTH STATE STREET, ROOM 304, SALT LAKE CITY, UTAH 841 1 1 TELEPHONE: 801-535-6642 FAX: 801-535-7651 WWW.SLCGOV.COM C•� aecrccco vnPca Salt Lake City Council Agenda Thursday February 23,2006 C. PUBLIC HEARING (NONE) D. COMMENTS (NONE) E. NEW BUSINESS: (NONE) F. UNFINISHED BUSINESS: 1. Resolution—Extension of the Light Rail System(TRAX) Consider a motion to adopt a resolution authorizing the extension of the Light Rail System and the addition of two new stations at 525 West 200 South and 125 South 400 West. (Petition No. 400-04-52) (P 06-4) Staff Recommendation: Adopt. 2. Ordinance—Household Benefit Package Consider adopting a motion overriding the Mayor's veto of Salt Lake City Ordinance Nos. 4, 5,6,7,8 and 9 of 2006 pertaining to the City's benefits packages and bereavement and dependent leave to employees' "Adult Designees" and their dependents. (0 06-5) Staff Recommendation: Adopt. G. CONSENT: (NONE) 2 Salt Lake City Council Agenda Thursday February 23,2006 H. ADJOURNMENT: Dated: February 21, 2006 By: /. , k Deputy City ec/der STATE OF UTAH ) : ss. COUNTY OF SALT LAKE ) On the 21'day of February,I personally delivered a copy of the foregoing notice to the Mayor and City Council and posted copies of the same in conspicuous view, at the following times and locations within the City& County Building,451 South State Street, Salt Lake City, Utah: 1. At 5:00 p.m. in the City Recorder's Office, Room 415; and 2. At 5:00 p.m. in the Newsroom,Room 315. Deputy City ceder S cribed and sworn to before me this 21'day of February,2006. NOTARY PUBLIC tary Pu r siding inthe a e of Utah ( �g STATE OF UTAH My Commission Expires ( /4 March 24,20.09 CAROLYN I.QERtER 451 S.Sate Street.Site 418 Approval: Sar LF%ECt,,Utah 84111 c. l) Executiv Director Access agendas at http://www.slcgov.com/council/agendas/default.htm. People with disabilities may make requests for reasonable accommodation no later than 48 hours in advance of council meetings. We make every effort to honor these requests, and they should be made as early as possible. Accommodations may include alternate formats, interpreters, and other auxiliary aids. The City and County Building is an accessible facility. For questions or additional information, please contact the ADA Coordinator at 535-7971,or TDD 535-6021. Assistive listening devices are available on Channel I; upon four hours advance notice. Please allow 72 hours advance notice for sign language interpreters; large type and #2 Braille agendas. After 5:00 p.m.,please enter the City&County Building through the east entrance. Accessible route is located on the east side of the building. In accordance with State Statute, City Ordinance and Council Policy, one or more Council Members may be connected via speakerphone. 3 SALT LAKE CITY COUNCIL STAFF REPORT DATE: February 21,2006 SUBJECT: CITIZENS COMPENSATION ADVISORY COMMITTEE ANNUAL REPORT STAFF REPORT BY: Sylvia Jones ADMINISTRATIVE DEPT. Department of Management Services —Human Resource Division AND CONTACT PERSON: Vic Blanton, Classification&Compensation Program Manager CC: Rocky Fluhart, Jamey Knighton, Vic Blanton, Cori Petersen,Allen Miller The Citizens Compensation Advisory Committee was established to evaluate and make recommendations to the Mayor and City Council regarding compensation levels. The annual report of the Committee contains recommendations that are advisory and subject to the City's fiscal ability. The City Council does not need to take any action at this time. The Committee Chair and Vice Chair will be present at the briefing to respond to questions from the Council. Vic Blanton from the City's Human Resource Division serves as staff for the Committee. Following are highlights from the Committee's report: 1. Based on a study of western region Class B/C cities (populations of 50 thousand to 1.5 million), the Consumer Price Index (CPI)has been increasing for the past four years as indicated on page 5 of the report. As of December 2005, the CPI was 2.9%, as compared to 2.7% at the end of 2004, and 1.9% at the end of 2003. 2. Data suggests the total compensation value (TCV) of the City employee pay package is slightly above the local market average. According to the report,however, the higher wages paid to Salt Lake City employees are offset by more liberal benefit packages provided by other public agencies and employers along the Wasatch Front. For instance, some employers provide larger contributions to retirement plans and require lower employee co-pays for medical and dental benefits. 3. A national survey polling public and private employers indicates that salary structure increases (often referred to as COLA adjustments)are projected to increase during 2006 by 2.5%. The same survey indicates the total salary budget(combining COLA adjustments with merit step and/or other awards and raises) will increase by 3.8% in 2006. With the exception of fiscal year 04-05, the City's total salary budget increase during the past several years has been approximately 3.5%. 4. City employee voluntary turnover(including retirement)reached a high of over 10.0% during the third quarter of 2005; however,the average turnover rate for the year 2005 was 6.1%. In 2004,total voluntary turnover was 5.27%, while in 2003, the total was 5.09%. According to the report, retirement is a contributing factor. Some employees are retiring from City employment and taking jobs with other local government agencies in order to maintain salary, insurance, and pension, etc. 5. Given that job growth in Utah appears to be steady and employee turnover is trending upwards, the report suggests that it may become increasingly difficult for the City to attract and retain qualified personnel. 6. The report notes the results of the employee satisfaction survey. Seventy percent of City employees felt that a job well-done often goes unrecognized by management. The committee emphasizes the importance of using non-monetary means to recognize and reward employees. The Committee also supports the practice of issuing cash awards to individuals/groups for completing mission-critical projects above and beyond normal job responsibilities. 7. There were no studies this year regarding executive compensation; however, last year's results indicated that Salt Lake City's executive salaries were approximately 6%lower than the national public sector average, and approximately 10%higher than the local government average. Council Members may wish to note that with some executive positions, for instance, the Police Chief or Airport Director, the City may need to compete on a national level. 8. In addition to making recommendations to the Mayor and City Council regarding compensation levels for the City's employees, the Committee also works on other compensation-related issues that come to the Committee's attention. The Citizens Compensation Advisory Committee indicates that they welcome the opportunity to address the Council's compensation or benefit issues during the coming year. During the Council Work Session on February 7, 2006, the Council asked the Citizen Compensation Advisory Committee to review the top management positions at the Airport, in addition to the Director, to determine the appropriate `market'comparisons, etc. MATTERS AT ISSUE: • Employee Retirement— The Council may wish to ask whether the Administration is anticipating a large percentage of baby boomer retirees during the next five to ten years, and if so, what strategies are in place to deal with the loss of historical knowledge, and what the fiscal impact may be from a retirement payout standpoint. • Employee Turnover—According to the report, agencies such as Sandy, Murray, West Valley City, West Jordan and Salt Lake County use compensation strategies to attract and retain personnel (especially with fire and police personnel). Given the projected increase in competition to retain and attract employees, the Council may wish to ask the Administration to discuss retention methods and strategies employed by the City. • Recommended Increases—For the upcoming fiscal year, the Committee recommends a general salary structure or cost of living (COLA)increase of 2.0 to 2.5% for employees, as well as a one-time lump sum supplement for employees topped out or on the short end of a general increase due to being high in the pay range. As mentioned previously, the Committee's role is advisory in nature, and the recommendations are subject to the City's fiscal ability. • Issues mentioned by Council Members—Council Members have recently raised the following issues: o Opportunities to increase employee satisfaction through regular public recognition opportunities. o Concerns relating to the high number of employees eligible for retirement. o The auto allowance for SLC department directors as compared to the allowance for other governmental entities. o The employee tuition reimbursement program as compared to the programs available for staff employed by other governmental entities. COUNCIL TRANSMITTAL DRAFT TO: Rock J. Fluhart � DATE:TE: January 37, 2006 Chief Administrative Officer FROM: Jamey Knighton, Acting Human Resource Director SUBJECT: 2006-20067 Report of the Citizens Compensation Advisory Committee STAFF CONTACT: Vic Blanton, Classification and Compensation Program Mgr., 535-6026 BUDGET IMPACT: If the committee recommendations are approved, funding impact would occur with Council approval of compensation plans for various pay classifications. RECOMMENDATION: That the City Council receive a presentation of the attached report by the CCAC's Chair Cori Petersen and Vice Chair Allen Miller, and hold a discussion regarding the report. BACKGROUND AND DISCUSSION: The Committee's 2006-2007 report cites developing labor market and cost-of-living changes that are likely to increase pressure for wage adjustments. This year's data regarding market salary and benefits comparisons essentially mirrors last year's information, according to the report. That is, for most of the employee population, data indicates that the City's salaries tend to be higher than market average but its benefits package tends to be lower based on the surveyed categories (retirement, and group health and life insurance). While concern is expressed about data reliability in one of the survey components, the composite data indicates that the value of the City's combined salary and benefits package is only slightly higher overall than that of the identified market—and may actually be slightly less depending on compensation adjustments made by other agencies next July. Given an essentially neutral local market comparison, the Committee advises looking to cost-of- living and forecasted pay-increase trends for guidance in salary budget planning for the coming year. Planning should factor in the real possibility that Utah's strengthening job market will mean tougher competition ahead for attracting and retaining employees. Based on current indicators, the Committee recommends for 2006-2007 that within fiscal ability the City provide a general salary structure or cost-of-living adjustment of 2.0 to 2.5 percent, and consider giving one-time lump sum supplements to employees topped out or otherwise disadvantaged (in terms of general increase percentage) by high range positions. The Committee also recommends increased emphasis on employee recognition through non- monetary means. • • i Citizens Compensation Advisory Committee FISCAL YEAR 2006-2007 ANNUAL REPORT 2 Years CCAC 2006-2007 ANNUAL REPORT MARKET TREND PREDICTIONS EDGE HIGHER FOR `SALARY STRUCTURE' AND `TOTAL SALARY BUDGET' INCREASES A good predictor of "the pace" has been WorldatWork's annual forecast on Salary Structure and Total Salary Budget increases. The forecast is based on a national poll of all industry sectors, both public and private. Often called a cost-of-living adjustment (COLA), a "salary structure" increase refers to a wage schedule increase. This year's report puts 2005's actual salary structure adjustments at 2.2 percent, up from 2004's 2.0 percent, and projections for 2006 slightly higher yet, at 2.5 percent. The total salary budget increase forecast—which adds merit and promotional increases to the structure projection—is 3.8 percent. INDICATORS SUGGEST CITY COMPETITIVE WITH LOCAL PAY PRACTICE, BUT CAUTION IS ADVISED Departing little from previous years' results, current data suggests that the total compensation value (TCV) of the City employee's pay package is overall slightly better than the local market average. Lest this result be seen as cause to withhold pay increases, we reiterate advice given in previous reports about taking market data too literally. Such information is merely an indicator, not an absolute. Besides, if reliable, the difference is not large enough to assume that equity will be sustained without a general increase. It must be kept in mind that adjustments made by other local employers during 2006-2007 are not yet known. TURNOVER PICKS UP Although it is clear that monetary incentive is not the only reason employees stay with employers, we think increased turnover is yet another indicator that pressure for wage increases may be mounting. Voluntary • separations by SLCC employees spiked during the third 2 CCAC 2006-2007 ANNUAL REPORT quarter of 2005, resulting in an annualized rate of more than 10 percent. This is nearly double the average of quarterly rates seen by the City since September 11 , 2001 . Notwithstanding that the 4th quarter experience brought the actual-year rate back down to 6.1 percent, voluntary separations from City employment are clearly trending upward. OUR RECOMMENDATION FOR 2006-2007: PROVIDE A `COLA' OF 2.0 TO 2.5% AND CONSIDER GIVING ONE-TIME-LUMP-SUM PAYMENTS We believe that the indicators support the following advice: Within fiscal ability, increase pay structures by 2.0 to 2.5 percent, and consider giving a one-time lump sum supplement to employees topped out or on the short end of a general increase due to being high in the pay range. While we don't advocate basing pay on routine individual • performance ratings, the City should also provide one- time lump sum awards to team members or individuals who complete mission-critical projects or other accomplishments that go beyond normal job duties. SIDE-NOTE: RECOGNITION AIDS EMPLOYEE RETENTION As we have urged in the past, it is important to use non- monetary means to recognize and reward employees. A recent job-satisfaction poll conducted by the City cited lack of recognition as one of city employees' principal concerns. Seventy percent felt that a job well done often goes unrecognized by management. 3 CCAC 2006-2007 ANNUAL REPORT DISCUSSION Jobs Growth Portends Increased Competition A recent Salt Lake Tribune article states that Utah's economy is adding jobs at a "blistering pace." The article, entitled "Continued Economic Boom Far Outpaces Most Other States," puts Utah's job growth rate at 3.6 percent compared to a national rate of 1 .5 percent. Relying on advice provided by the Utah Department of Workforce Services' senior economist Mark Knold, the article also notes, "Jobs are being added in all income ranges, from those paying near minimum wage to high- paying skilled positions." Knold indicates that the new jobs represent a wide variety of industries, so he doesn't see Utah becoming too dependent on any one sector. With a strong job market comes tougher competition to attract and retain employees. Although applicants are still answering City employment ads in large numbers, voluntary turnover appears to be on the upswing, as the following chart shows: • SLCC Voluntary Turnover 411 8.00% 7.00% , y D � t 6.00% S �--7 c _ co 5.00% 3 0 cu 4.00%—' _ oRetirement cit ■Voluntary Quit a ❑Total E 3.00% w O G d 2.00%- • 1.00 • 0.00% 2000 2001 2002 2003 2004 2005 Calendar Year • 4 CCAC 2006-2007 ANNUAL REPORT • While the year 2005 ended with a voluntary separation rate of 6.1 percent, the annualized quit rate for the third quarter actually exceeded 10 percent! This is a level not seen in decades, according to staff. Although not normally associated with lure from other employers, retirements are a contributor. Staff reports seeing an increased incidence of long-service employees retiring and going to work for other local government agencies. The apparent incentive is the ability to stay covered under group medical insurance, and draw salary, pension, and liberal 401(k) contributions—all at the same time. From a compensation standpoint, there may be cases wherein the City must concede the futility of competing with such an arrangement. Be that as it may, failure to keep pace with market trends will further encourage the loss of valuable skills and experience, regardless of outside lures. Consumer Price Index on the Rise • Most employees see keeping pace with the cost of living as a minimal requirement of fair pay. Accordingly, it is generally factored into employers' annual wage adjustment decisions. As we prepare this report, the Consumer Price Index for all Urban Consumers (CPI-U) is trending upward. During the past several years, the City has relied on the West Region CPI-U for Class B/C Cities (populations of 50 thousand to 1 .5 million) for pay decision insight. The following chart tracks this index's annual averages, starting with the increase from December of 2001 to December of 2002. CPI-U, West Region, Class B/C Cities Base Period: December 1996 = 100 12 Month Average Increase Ending Each December 2002 2003 2004 2005 1.5% 1.9% 2.7% 2.9% Analysts do not see a reversal of this trend happening any time soon, especially if gasoline prices surge again during the 5 CCAC 2006-2007 ANNUAL REPORT months ahead. Combined with increased competition for qualified personnel, such a picture boosts the market pressure • for pay raises. What is the Predicted Trend for Pay Raises? Many employers and compensation consultants alike rely on WorldatWork's annual survey to answer this question. We believe it to be a credible source, and have consistently used it to prepare our annual report. Formerly known as the American Compensation Association, WorldatWork polls both public and private employers throughout the country regarding their plans to increase (or not increase) salaries during the year ahead. The survey is organized into two basic categories: Structure increases and Total Salary Budget increases. A salary structure consists of a schedule of pay grades, each grade with a minimum and maximum level. Some pay grades will have one or more steps through which progression is ID obtained on the basis of merit or longevity. Other pay grades will take the form of ranges, usually using the range midpoint as a means of controlling or influencing general increases. Structure increases are often called cost-of-living adjustments (COLAs). The total salary budget combines structure increases with the anticipated cost of merit step and/or other awards and promotional raises. WorldatWork's survey forecasts for 2006: • Salary structure increase: 2.5 percent • Total salary budget increase: 3.8 percent According to the report, these forecasted figures are slightly higher than the actual experience for 2005. For perspective, staff advises that except for FY 2004-2005 the • City's total salary budget increases during the past several 6 CCAC 2006-2007 ANNUAL REPORT • years has been running around an estimated 3.5 percent. (Only AFSCME-covered employees received a salary structure increase during 2004-2005.) This has generally been within plus or minus one-tenth of one percent of national trend. City Salaries Compared to Local Market The following chart suggests that not much has changed since last year, i.e., the picture appears to be one of higher SLCC wage rates, offset by more liberal benefits packages offered by other employers-especially public agencies along the Wasatch Front. 2004-2005 2005-2006 Actual Actual Actual Average Actual Average Average Salary Plus Average Salary Plus Salary Only Benefits Salary Only Benefits EMPLOYEE GROUP SLCC/MKT SLCC/MKT SLCC/MKT SLCC/MKT Operations/Maintenance 101.5% 102.9% 107.4% 107.6% Clerical/Technical 125.4% 120.6% 122.5% 117.9% • Non-Exempt Professional 105.9% 104.2% 107.6% 107.6% Exempt Professional 111.8% 108.6% 102.6% 102.2% Police Officer 101.4% 96.0% 111.1% 103.1 Sergeant 104.9% 96.0% 104.0% 97.7% Lieutenant 101.3% 96.3% 101.7% 96.1% Police Captain 96.9% 96.6% 99.1% 94.7% Firefighter EMT 112.0% 101.0% 113.5% 100.3% Firefighter Paramedic 119.6% 107.0% 120.8% 106.8% Firefighter Engineer 108.0% 98.4% 109.6% 98.4% Fire Captain 114.3% 103.5% 111.9% 100.6% Battalion Chief 109.0% 99.3% 112.4% 101.3% Average 108.6% 102.3% 109.5% 102.6% Where public sector benefits factor heavily in the equation, the offset is especially pronounced. It primarily reflects more liberal employer-paid retirement plan contributions than those afforded by SLCC, along with lower employee co-pays on medical and dental benefits. Obviously, while the "bottom line" for the combined salary and benefits column suggests SLCC is high overall by 2.6 percent, individual categories convey different messages. Some SLCC 7 e- CCAC 2006-2007 ANNUAL REPORT . rates are substantially higher than market; some substantially 0 lower. Should the City's leadership scale back or freeze salaries where the comparison indicates a large excess—such as in the cases of the first three employee groups listed? For that matter, is there cause to plan a reduced increase to account for the apparent overall 2.6 excess? We believe the answer is negative on both counts. As stated in the preceding Executive Summary, we caution against taking market data too literally. It is an indicator, not an absolute. This year the point is underscored. Staff has detected flaws in one of the main data source reports on salary, which accounts for the inordinate increase in the numbers for the Operations and Maintenance group. Although a merge with other data sources has salvaged the presentation as an "indicator," it should be viewed with reservation. We urge close scrutiny of individual cases, along with a general policy of incremental adjustment rather than precipitous action. The same advice applies to positions that appear to be OP undervalued based on survey data. Breakdown of the Employee Groups With the foregoing caution in mind, following are individual depictions based on a merge of two data sources: the 2005 AON SALT LAKE AREA SALARY & BENEFITS SURVEY and the online survey provided by the Wasatch Compensation Group (WCG) referred to as Technology Net. We have borrowed from WCG the term total compensation value (TCV), to reflect the combined value of salary and such core benefits as retirement and group health/life insurance. AFSCME 100 Series—Operations and Maintenance Covered by contract with the American Federation of State, County and Municipal Employees (AFSCME), operations and maintenance employees (100 Series) number approximately 700, making it the largest single group of SLCC workers. The II 100 Series pay structure consists of salary grades with 5 steps 8 CCAC 2006-2007 ANNUAL REPORT • (A to E). Most 100 Series employees are topped out, so the cost of funding merit steps is relatively very low. The nine operations and maintenance positions selected for comparison are all standard benchmarks in the local market place, being common to both private and public employers. SLCC VS LOCAL MKT AVG TCV-OPERATIONS & MAINTENANCE (100 SERIES) From July 1, 2005 AON and Wasatch Compensation Group Surveys $30.00 _r v, Q N , O . a0 7 N n r W O n U $25.00 w O N ' o 1- N y> Q ; : M N N N N N ui N �(j u, I b V c $20.000 '"FF11 O is a d c liii $15.00 r r e ■TCV SLCC U m $10.00 ■WT.AVG TCV AON/TECHNET •-,' IuiiI110 x $5.00 ' . I 0 . ( . 1 A -- hp ._ .60• .0%0 *e< pG °e< e< <ao< \ae< a‘c G Q t`�°< ge`raQv� GaQe Ope �eteGt‘ oe et et � �`JPC to eo oe J`P```e V1/4 a AFSCME 200 Series—Clerical and Technical The City has approximately 370 clerical and technical employees (200 Series). Also covered by AFSCME, the salary structure for this series is made up of pay grades containing 10 steps. With twice the steps as the 100 Series pay structure (and a routinely higher turnover rate), there are many 200 Series employees who are not topped out. Given the same structure increase, the average total salary increase for the 200 Series—as a percentage—is going to be predictably higher 410 CCAC 2006-2007 ANNUAL REPORT . than for the 100 Series—but the smaller population will account • for comparably less total cost. SLCC VS LOCAL MKT AVG TCV-CLERICAL&TECHNICAL(200 SERIES) From July 1,2005 AON and Wasatch Compensation Group Surveys $30.00 I- $25.00 O N N 0 I O - • $20.00 — F _ 1f )NN W t0 � o N O 0 N d• $15.00 a o ❑TCV SLCC U - $10.00 ■WT.An TCV AON/TECHNET $5.00 ° x RS' ( ra G C °r e�° •4e ah G e �c� c. � �` r ee � •` `o J � p° cge Qe �apers u cp • y�° P c.J 300/600 (Professional) Series There are approximately 340 300 Series employees in the City's pay program. These are professionals considered to be subject to the Fair Labor Standards Act (FLSA) overtime pay requirements . The number of professionals treated as FLSA exempt (600 Series) is about 360. Both pay programs use ranges rather than steps to define the salary grade limits. Hence, there are no merit steps and thus no merit-step costs are associated with these pay series. We obtained survey data on approximately 40 professional position benchmarks. Because of the large data set, regression analysis is used to determine the general relationship between SLCC TCV rates and those of the market. 10 CCAC 2006-2007 ANNUAL REPORT • The next chart shows the comparison for the 300 Series. Solving for Y at 400 evaluation points (see equation on chart), data suggests that the City's TCV for lower level 300 Series positions is about 3 percent above market. Indications are that rates for the higher level jobs average approximately 6.4 percent above market, at 650 evaluation points. SLCC VS.LOCAL MKT AVG TCV--NON-EXEMPT PROFESSIONALS(300 SERIES) From July 1,2005 AON and Wasatch Compensation Group Surveys $40.00 j $35.00 „-.-. y=0.0351 x+ 11.053 • I— ` s K ,.._. ..dF SLCC co m $25.00 "SLCC TCV Trendline • Market TCV Trendline E O V . c $20.00 • _ $15.00 $10.00 _ 350 400 450 500 550 600 650 700 Evaluation Points Looking at the next chart, data for the 600 Series positions (exempt professionals) suggests substantial differences in terms of comparison with market at the lower level vs. the higher level jobs. Indications are that SLCC's TCV is 2.8 percent below market at 500 evaluation points; 7.8 percent above market at 900 evaluation points. Despite the relatively large data set, there could be individual cases causing some skewing of results. For example, the City's TCV for the position of golf course superintendent—which is a maintenance supervisor—is less than 80 percent of market. On the other hand, the attorney TCV data puts SLCC at 115 percent of market. 11 CCAC 2006-2007 ANNUAL REPORT Again, caution is advised. Staff has reported detecting substantial differences in the number of private survey participants providing data for certain benchmarks this year vs. prior years. This raises credibility questions. SLCC VS. LOCAL MKT AVG TCV--EXEMPT PROFESSIONALS (600 SERIES) From July 1, 2005 AON and Wasatch Compensation Group Surveys $60.00 1 11 $55.00 y=0.0492x+6.3304 $50.00 SLCC 3 _ > $45.01;, • $40.00 SLCC TCV Trendline a �> —Market TCV Trendline E $35.00 c $30.0'. . I— $25.00 • $20.00 $15.00 450 550 650 750 850 950 Evaluation Points On a related note (next chart), this year's data indicates that the City's professional employee salary range midpoints—which serve as control points to cluster rates closer to market average—remain high, but not as much as in previous periods. To lessen the risk of overcorrection and morale problems, we have advised modest increases rather than cut backs or freezes. Except for the 2004-2005 freeze, the City appears to have followed that advice. We advocate staying the course. Prudence suggests continuing to increase the midpoints in accordance with market trend. Again, solving for Y, data indicates that on average SLCC • salary range midpoints are approximately 8.3 percent high 12 CCAC 2006-2007 ANNUAL REPORT • compared to market actual average salary at 450 evaluation points; 3.4 percent high at 900 evaluation points. PROFESSIONAL EMPLOYEES (300,600 SERIES )--SLCC MIDPOINT AVERAGE VS. MARKET ACTUAL AVERAGE SALARY From July 1, 2005 AON and Wasatch Compensation Group Surveys $8,000 $7,000 y=7.4481x+206.82 SLCC MIDPOINT $6,000 7a >, $5,000 - 4—SLCC Midpoint Trendline MKT Actual Average Salary Trendline c 0 2 y=7.5479x-111.13 MKT AVG SALARY $3,000 • $2,000 350 450 550 650 750 850 950 Evaluation Points Police (500 and 800 Series) Looking at the next chart, the City's non-supervisory police officers (500 Series) number around 330. Their salary plan has 10 steps, corresponding to years of service. Although many are topped out, there are still a substantial number of officers progressing through the steps. Thus, funding for merit step increases must be considered as significant in the total salary budget. Regarding the supervisory law enforcement group, there are 48 Sergeants, 18 Lieutenants, and 6 Captains, all in a one-step salary structure. Only the sergeants are treated as non-exempt from FLSA requirements. 13 CCAC 2006-2007 ANNUAL REPORT Competition for police recruits is most likely to come from local • agencies who are relatively aggressive in use of compensation strategy to attract and retain personnel. Such agencies include Salt Lake County and the cities of Sandy, Murray, West Valley and West Jordan. These are the agencies used in comparing SLCC's pay practice with that of the local market. Data comes from the Wasatch Compensation Group survey. SLCC VS. LOCAL MKT AVG TCV--POLICE (500 SERIES) From 2005 Wasatch Compensation Group Survey $60.00 M t!� Lf) U c rn $50.00 rn $40.00co ,A v> f6 0 M S30.00 M cs ■Market E ■SLCC o S 76 S20.00 $10.00 o 2 Police Officer Sergeant Lieutenant Captain Fire (400 and 900 Series) Approximate numbers of Firefighters are 60 Firefighter EMTs, 70 Paramedics, 115 Engineers, 8 Fire Captains, and 10 Battalion Chiefs. All personnel are on stepped salary plans; only the Battalion Chiefs are excluded from the FLSA overtime requirements. Non-supervisory personnel make up the 400 Series. Fire Captains and Battalion Chiefs comprise the 900 Series. 14 CCAC 2006-2007 ANNUAL REPORT • There are only three steps in each of the wage schedules for Fire Captain and Battalion Chief, and most of the incumbent population is topped out. Merit-step increase cost, therefore, is negligible. On the other hand, there are many employees in the non-supervisory ranks still progressing through the pay steps, so merit-step increase costs must be a significant factor in the salary budget plan. Like police personnel, lure for firefighter recruits is likely to be strongest with the higher paying local agencies. Thus the ones used for market comparison are the same ones used for police. SLCC VS. LOCAL MKT AVERAGE TCV--FIREFIGHTERS (400 SERIES) From 2005 Wasatch Compensation Group Survey $50.00 > $45.00 "' U N isi H • $40.00 c • > $35.00 M M rn ( O 01 `�' v — $30.00 . N N M o• $25.00 N N O. "' tft ■Market TCV $20.00 - ■SLCC TCV o $15.00 a $10.00 $5.00 S- Firefighter Engineer Paramedic Captain Battalion Chief Executives (000 Series) and Unclassified Employees (U00 Series) The City has 53 executives and 39 "unclassified" employees. Like executives, Unclassified employees are appointed, however, they do not have executive status. Both of these salary plans use ranges rather than steps, but the unclassified 15 CCAC 2006-2007 ANNUAL REPORT structure does not use a control point. Salaries are decided 0 solely by executive discretion of the Administration and the City Council. Except for attorneys, we have not conducted market salary comparisons for unclassified employees due to the lack of benchmark matches. It should also be noted that we did not collect data on executive compensation this year, but last year's results indicated that SLCC's executive salaries were about 6 percent low compared to the national public sector average, and about 10 percent above the local government average. As we noted last year regarding the latter, It should be kept in mind that the scope of responsibilities may differ substantially between that of a Salt Lake City executive and a counterpart working in a much smaller agency. Regarding the Market Comparison Data It bears repeating that the foregoing data sets are merely • indicators not dictates, and precipitous action based on such information is ill-advised. An apparent small excess in total compensation value over the local market should not be seen as cause to curtail pay increases—especially considering the newly developing climate for compensation decision making. Also, not yet known are upcoming fiscal-year adjustments by other local agencies. Such adjustments will likely reduce or may even eliminate the apparent excess. In any case—if we are to rely on the data—the total value of SLCC's compensation package appears to approximate the local market average. Hence, we see it as a neutral factor in the mix of indicators that should influence the City's upcoming pay decisions. Analysts are reporting significant growth in Utah jobs at all levels and in a wide variety of employment sectors. Combined with increases in the cost of living, such information heralds a tighter labor market ahead. We believe these are factors with which the City will have to deal in order to maintain • a competitive pay program. 16 CCAC 2006-2007 ANNUAL REPORT Employee Recognition The City recently conducted an employee satisfaction survey. Among the queries, employees were asked to agree or disagree with such statements as "Employees in my work area are recognized for outstanding performance," and "My department recognizes individuals based on performance." Only 40 percent agreed with the first statement; only 30 percent agreed with the second one. Certainly there are effective means of recognizing employees that do not involve money. A simple thank you for a job well done is one of many. In fact, industry experts say that recognition for good work is at the very top of the job-satisfiers list. As the citizen committee that advises the City on "compensation," prompting improvement in the use of intrinsic motivators may be regarded as a bit out of our bailiwick. But as professionals familiar with the ways and means of employee retention in a tight labor market, we'll go out on that limb. Turning to recognition via monetary means, we hold to the advice given in several of our previous reports that individual pay for performance is problematic for most of the employee population. Here, we refer to linking salary adjustments to routine ratings on how well the job is done. What we do support, however, are cash awards for doing more than the job's expectations. These may take the form of one-time, lump sum awards for accomplishment of a mission-critical project by a team or an individual, or simply an individual's temporary assumption and completion of tasks that go above and beyond the call of duty. On a related note, we advocate for FY 2006-2007 the use of one-time, lump sum payments to employees who are topped out in stepped pay plans—or for any individual who receives an otherwise smaller increase because his or her salary exceeds the respective range midpoint. Regarding the latter case, we note that in previous years the City has used such a combination (base pay plus supplemental pay), not only to stay 17 CCAC 2006-2007 ANNUAL REPORT competitive with the competition, but also to let employees know they're appreciated. In Closing We direct the reader to the executive summary presented on this report's first three pages. It contains the highlights of our observations and recommendations for the Fiscal Year 2006- 2007. We believe Utah's jobs growth is leading to significant competition among local employers to attract and retain qualified personnel. The cost of living appears to be on the rise, too. If so, there will be increased pressure for pay raises and the City will need to respond accordingly. As a citizen advisory committee, we appreciate the opportunity to provide input and guidance for the City's compensation and benefits practice. We look forward to reviewing this report with the Mayor and the City Council, and we will be glad to answer any questions or discuss any needed follow-up. Cori Petersen, Chair Allen Miller, Vice Chair Robert Baty Lourdes Cooke Diane Mansfield Diane Wood Larene Wyss 18 µ. SALT LAKE CITY COUNCIL STAFF REPORT DATE: February 21, 2005 SUBJECT Salt Lake City's Comprehensive Annual Financial Report and Letter to Council and Mayor on Internal Controls AFFECTED COUNCIL DISTRICTS: Citywide STAFF REPORT BY: Gary Mumford ADMINISTRATIVE DEPT. Management Services AND CONTACT PERSON: Gordon Hoskins CC: Rocky Fluhart,Gordon Hoskins,Ross Youngberg,DJ Baxter KEY ELEMENTS: The following four documents relating to the City's annual financial statements and to the independent financial audit are included in your packet: Comprehensive Annual Financial Report—In December, the Department of Management Services prepared and issued the City's Comprehensive Annual Financial Report for the year ended June 30, 2005. The CPA firm Hansen, Barnett &Maxwell audited the financial statements. A representative of the CPA firm and a representative from the Department of Management Services will be present at the work session to answer questions that the Council may have regarding the annual financial report. Management Letter—In performing the audit,the auditors reviewed the City's internal control structure in order to determine auditing procedures. Although the audit was not designed to provide complete assurance on the internal control structure, the auditors noted certain matters in a letter submitted to the Council and Mayor. The recommendations contained in this letter are designed to help the City achieve operational efficiencies and ensure legal compliance with state laws and regulations. Compliance Report—As part of the audit, the CPA firm audited the City's compliance with provisions applicable to state assistance programs as required by the State of Utah Legal Compliance Audit Guide. Letter of Required Communications from Auditor—Auditing standards require the auditor to inform the oversight body of any matters that represent a significant deficiency in the design or operation of the internal control structure, significant audit adjustments, disagreements with management, and difficulties encountered in performing the audit. MATTERS AT ISSUE: Comprehensive Annual Financial Report—The City's Comprehensive Annual Financial Report shows that revenue for the year ended June 30, 2005 exceeded budget by$6.3 million as follows: $2.5 million in sales taxes, $2.0 million in permits, $1.1 million in property taxes, and $0.7 million in franchise taxes. General fund departments spent less than budget by$1.4 million with major savings in the following departments: Public Services $539,000, Police $305,000, Community Development $138,000, Fire$125,000, Management Services $119,000. One million dollars of the $7.7 million in excess review or expenditure savings has already been committed for one-time costs in the annual budget for fiscal year 2006 ($887,000) or in budget amendments ($116,000). Recommendations, observations and legal compliance exceptions—The letter to management contains five recommendations or observations relating to internal control and legal compliance. Please refer to the auditors' letter for a more comprehensive discussion of the observations and recommendations. 1. Use of impact fees time requirement—Impact fees must be used within six years of receipt. The auditors recommend that the City establish a procedure to ensure that expenditures of impact fees occur within six years of receipt. In addition, the auditors recommend that a report be prepared at the end of each fiscal year showing the source and amount of impact fees collected and each impact-fee related expenditure. Response—A special fund has been set up to track fees collected and expended. Management will prepare a special report for the auditors and public at the end of fiscal year 2006. 2. Allowable uses of impact fees—During the auditors testing of impact fee expenditures, they discovered travel expenses for three City employees to attend a public safety planning seminar. Travel expenditures do not meet the criteria for appropriate expenditure of impact fees. Response— The conferences were related to the planning of a public safety building. In response to this finding, the City developed written policies that specifically prohibit the use of impact fees for travel or meals. The expenses have been reimbursed by the general fund. 3. Expenditures in excess of appropriations—Expenditures of the City's special revenue fund for the Arts Council exceeded the budget for that fund. Expenditures of the City's Debt Service Fund exceeded the budget. Response—The expenditures for the Arts Council exceeded budget because of some unbudgeted in-kind expenditures were included to match in-kind revenue. In the future, the Arts Council will budget for in-kind revenue and expenditures. Expenditures in excess of budget for debt service were the result of refinancing bonds near the end of the year. The last budget amendment had already occurred by the time the expenditure calculations associated with defeasance of the debt were available. 4. Filing of audit report on Class C road funds—Cities are required to submit a State Legal Compliance Audit Report relating to Class C road funds within six months of year end. The state compliance report for the year ended June 30, 2004 was not submitted within the six month deadline. Response-The City relies on the outside auditors to complete this report. In the past, the auditors haven't completed this report on time. This tread continues with the current auditors. 2 Note: The Auditor committed to Council staff that the compliance report will be completed within the deadline in future years. 5. Reconciliation of Justice Court trust accounts—The state requires that the account used to deposit bail restitution, unidentified receipts, and other money that requires special accounting be reconciled at least quarterly. Response—The first quarter reconciliation was performed by the Finance Division. The function was transferred to the Justice Court. Because of miscommunication, the reconciliation was not performed for the last three quarters of fiscal year 2005. The problem has been resolved, and the reconciliation has been completed for the first two quarters of fiscal year 2006. 3 HANSEN, BARNETT & MAXWELL A Professional Corporation CERTIFIED PUBLIC ACCOUNTANTS Registered with the Public Company 5 Triad Center,Suite 750 Accounting Oversight Board Salt Lake City,UT 84 1 80-1 1 28 Phone:(801)532-2200 a"indepen°`"`meinee°' Fax:(801)532-7944 BAKER TILLY www.hbmcpas.com INTERNATIONAL Honorable Mayor and Members of the City Council Salt Lake City Corporation In planning and performing our audit of the basic financial statements of Salt Lake City Corporation for the year ended June 30, 2005, we considered the City's internal control structure to determine our auditing procedures for the purpose of expressing an opinion on the financial statements and not to provide assurance on the internal control structure. However, during our audit we became aware of certain matters that provide an opportunity for strengthening internal controls and operating efficiency. This letter does not affect our report dated December 15, 2005, on the financial statements of Salt Lake City Corporation. Comments that are recurring or were noted in prior years have been noted with an asterisk (*). State Compliance Following are the findings resulting from our audit as required by the State of Utah Legal Compliance Audit Guide. 1. Impact Fees Use of Impact Fees—Time Requirement Compliance Requirement: Utah Code 11-36-302(2) states that a local political subdivision shall expend or encumber impact fees for a permissible use within six years of their receipt. Finding: Per inquiry of management, the City is in compliance with this requirement because collection of impact fees began less than six years prior to June 30, 2005. However, the City has not established controls to track expenditures impact fees. We recommend that a system of controls be developed and implemented to ensure the expenditure of these fees within six years of receipt. In addition, a report should be prepared at the end of each fiscal year for each fund or account reporting: 1. The source and amount of all impact fees collected, earned, and received by the fund or account; and 2. Each expenditure from the fund or account. Management Response: Within the Capital Improvement Project (CIP) Fund we established separate funds at the time we began collecting the impact fees. This fund would keep track of the detailed transactions both receipt and expenditure of funds in the HANSEN, BARNETT & MAXWELL Salt Lake City,Utah June 30,2005 Page 2 impact fees. The general rule is the first funds received are the first funds spent. The transactions can be tracked very easily. No formal report has been issued in past years, but we will generate this report in future years for the auditors and general public. 2. Impact Fees Use of Impact Fees—Allowable Uses Compliance Requirement: A local political subdivision may expend impact fees only for: a. system improvements for public facilities identified in the capital facilities plan; and b. system improvements for the specific public facility type for which the fee was collected. (Utah Code 11-36-302(1)) Finding: During our testing of impact fee expenditures, we discovered travel expenses for three City employees to attend a public safety planning seminar. Travel expenditures do not meet to above criteria for the appropriate expenditure of impact fees. Management Response: These funds were spent by the Police Department to attend a conference related to the planning of a new public safety building. After consulting with the attorney's office we agree that these expenditures are not appropriate impact fee expenditures. Community Development has issued policies specifically prohibiting travel and meal expenditures from these impact fee funds. These expenditures were reimbursed from the general fund back to the impact fees CIP fund. 3. *Budgetary Compliance Expenditures in Excess of Total Appropriations Compliance Requirement: Officers and employees of the entity shall not incur expenditures or encumbrances in excess of the total appropriation for any department or fund. For counties and municipalities State Law requires budget integrity at the following levels: General Fund — Each department (If debt service is divided between principle and interest, consider it combined.) Special Revenue Fund—Each separate activity in total. Capital Project Fund—Fund in total. Debt Service Fund—Fund in total. All other taxing entities by fund. Finding: The Arts Council (Special Revenue) and Other Improvements Fund (Debt Services) both had expenditures in excess of final budgeted amounts. HANSEN, BARNETT & MAXWELI. Salt Lake City,Utah June 30, 2005 Page 3 Management Response: The Arts Council expenditures exceeded budget because in-kind expenditures were included to match the associated in-kind revenue. Budgets for the in- kind expenditures were not included resulting in expenditures being over budget. In the future years the Arts Council plans on budgeting for these in-kind revenues and expenditures. The Other Improvement Fund is the result of the calculation and reporting of the defeasance loss associated with the refunding of debt. This calculation is made when the refunding has occurred and cannot accurately be budgeted. As a result this loss is reported even if the opportunity to request a budget amendment has passed. 4. B and C Roads Filing of State Legal Compliance Report Compliance Requirement: Cities and Counties are required to submit a copy of their State Legal Compliance Audit Report to the B and C administrator, indicating that they are in compliance with the B and C regulations within six months of their fiscal year end. Finding: The state compliance report for the year ended June 30, 2004 was not dated until March 15, 2005, and was not filed with UDOT within the six month time period. Management Response: Management relies on the outside auditors to complete this report to the State of Utah. This will be an item mentioned on the next management letter as well because again the outside auditors have not completed the report within the six month period. 5. *Justice Courts Reconciliation of Trust Accounts Compliance Requirement: A trust or revolving account may be established in the name of the justice court for the deposit of bail, restitution, unidentified receipts, and other money that requires special accounting. The account shall be reconciled at least quarterly by the governing body. Finding: Reconciliations were not performed on the Court's trust accounts on a quarterly basis. Management Response: The first quarter of fiscal year 2005 the reconciliation was performed by the Finance Division. The reconciliation function was transferred to the Justice Court Division. Because of miscommunications of the transfer, the reconciliation was not performed for the last three quarters of fiscal year 2005. The problem has been resolved and the reconciliation has been done for the first two quarters of fiscal year 2006. HANSEN, BARNETT & MAXWELL Salt Lake City,Utah June 30, 2005 Page 4 This report is intended solely for the information and use of the Mayor, City Council, City management, and is not intended to be and should not be used by anyone other than these specified parties. t\.)6.4 .44.JSH HANSEN, BARNETT & MAXWELL Salt Lake City, Utah December 15, 2005 HANSEN, BARNETT & MAXWELL A Professional Corporation CERTIFIED PUBLIC ACCOUNTANTS Registered with the Public Company 5 Triad Center,Suite 750 Accounting Oversight Board Salt Lake City,UT 84180-1128 Phone:(801)532-2200 an Independent member°' Fax:(801)532-7944 BAKER T I L LY www.hbmcpas.com INTERNATIONAL The Honorable Mayor and Members of the City Council Salt Lake City Corporation We have audited the basic financial statements of Salt Lake City, Utah(the City), for the year ended June 30, 2005, and have issued our report thereon dated December 15, 2005. As part of our audit, we have audited the City's compliance with the requirements governing types of services allowed or unallowed; eligibility; matching, level of effort, or earmarking; reporting; special tests and provisions applicable to each of its major State assistance programs as required by the State of Utah Legal Compliance Audit Guide for the year ended June 30, 2005. The City received the following major State assistance programs from the State of Utah. • Airport Improvement—East Apron Rehabilitation (Department of Transportation) • Class B Road Funds (Department of Transportation) • Liquor Law Enforcement(State Tax Commission) The City also received the following non-major grants which are not required to be audited for specific compliance requirements: (However, these programs were subject to test work as part of the audit of the City's financial statements.) • Airport Improvement—Auto Weather Observation System(Department of Transportation) • Emergency Medical Services (Department of Health) • Fire Emergency Medical Services (Department of Emergency Management Services) • Inventory Historic Cemeteries (Department of Community and Economic Development) • Jordan River Parkway Trail (Department of Parks and Recreation) • Police EMS Training(Department of Health) • Sidewalk Replacement(Utah Department of Transportation) Our audit also included test work of the City's compliance with those general compliance requirements identified in the State of Utah Legal Compliance Audit Guide, including: • Public Debt • Cash Management • Purchasing Requirements • Budgetary Compliance • Truth in Taxation and Property Tax Limitations • Liquor Law Enforcement • Justice Courts Compliance • B &C Road Funds • Other General Compliance Issues • Uniform Building Code Standards • Impact Fees • Asset Forfeitures The management of the City is responsible for the City's compliance with all compliance requirements identified above. Our responsibility is to express an opinion on compliance with those requirements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America 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 material noncompliance with the requirements referred to above occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements. We believe that our audit provides a reasonable basis for our opinion. The results of our audit procedures disclosed immaterial instances of noncompliance with requirements referred to above, which are described in the accompanying Schedule of Findings. We considered these instances of noncompliance in forming our opinion on compliance, which is expressed in the following paragraph. In our opinion, the Salt Lake City complied, in all material respects, with the general compliance requirements identified above and the requirements governing types of services allowed or unallowed; eligibility; matching, level of effort, or earmarking; reporting; and special tests and provisions that are applicable to each of its major State assistance programs for the year ended June 30, 2005. This report is intended solely for the information and use of the City's management and State funding agencies, as well as the Utah State Auditor's Office and is not intended to be and should not be used by anyone other than these specified parties. .k 1 9X- Z4/ t\t/- 44A, HANSEN, BARNETT & MAXWELL Salt Lake City,Utah December 15, 2005 Salt Lake City, Utah Schedule of Findings For the Year Ended June 30, 2005 CURRENT YEAR FINDINGS: 1. Impact Fees Use of Impact Fees—Time Requirement Compliance Requirement: Utah Code 11-36-302(2) states that a local political subdivision shall expend or encumber impact fees for a permissible use within six years of their receipt. Finding: Per inquiry of management, the City is compliance with this requirement because collection of impact fees began less than six years prior to June 30, 2005. However, the City has not established controls to track expenditures impact fees. We recommend that a system of controls be developed and implemented to ensure the expenditure of these fees within six years of receipt. In addition, a report should be prepared at the end of each fiscal year for each fund or account reporting: 1. The source and amount of all impact fees collected, earned, and received by the fund or account; and 2. Each expenditure from the fund or account. Management Response: Within the Capital Improvement Project (CIP) Fund we established separate funds at the time we began collecting the impact fees. This fund would keep track of the detailed transactions both receipt and expenditure of funds in the impact fees. The general rule is the first funds received are the first funds spent. The transactions can be tracked very easily. No formal report has been issued in past years, but we will generate this report in future years for the auditors and general public. 2. Impact Fees Use of Impact Fees—Allowable Uses Compliance Requirement: A local political subdivision may expend impact fees only for: a. system improvements for public facilities identified in the capital facilities plan; and b. system improvements for the specific public facility type for which the fee was collected. (Utah Code 11-36-302(1)) Finding: During our testing of impact fee expenditures, we discovered travel expenses for three City employees to attend a public safety planning seminar. Travel expenditures to not meet to above criteria for the appropriate expenditure of impact fees. Management Response: These funds were spent by the Police Department to attend a conference related to the planning of a new public safety building. After consulting with the attorney's office we agree that these expenditures are not appropriate impact fee expenditures. Community Development has issued policies specifically prohibiting travel and meal expenditures from these impact fee funds. These expenditures were reimbursed from the general fund back to the impact fees CIP fund. 3. Budgetary Compliance Expenditures in Excess of Total Appropriations Compliance Requirement: Officers and employees of the entity shall not incur expenditures or encumbrances in excess of the total appropriation for any department or fund. For counties and municipalities State Law requires budget integrity at the following levels: General Fund — Each department (If debt service is divided between principle and interest, consider it combined.) Special Revenue Fund—Each separate activity in total. Capital Project Fund—Fund in total. Debt Service Fund—Fund in total. All other taxing entities by fund. Finding: The Arts Council (Special Revenue) and Other Improvements Fund (Debt Services) both had expenditures in excess of final budgeted amounts. Management Response: The Arts Council expenditures exceeded budget because in-kind expenditures were included to match the associated in-kind revenue. Budgets for the in- kind expenditures were not included resulting in expenditures being over budget. In the future years the Arts Council plans on budgeting for these in-kind revenues and expenditures. The Other Improvement Fund is the result of the calculation and reporting of the defeasance loss associated with the refunding of debt. This calculation is made when the refunding has occurred and cannot accurately be budgeted. As a result this loss is reported even if the opportunity to request a budget amendment has passed. 4. B and C Roads Filing of State Legal Compliance Report Compliance Requirement: Cities and Counties are required to submit a copy of their State Legal Compliance Audit Report to the B and C administrator, indicating that they are in compliance with the B and C regulations within six months of their fiscal year end. Finding: The state compliance report for the year ended June 30, 2004 was not dated until March 15, 2005, and was not filed with UDOT within the six month time period. Management Response: Management relies on the outside auditors to complete this report to the State of Utah. This will be an item mentioned on the next management letter as well because again the outside auditors have not completed the report within the six month period. 5. Justice Courts Reconciliation of Trust Accounts Compliance Requirement: A trust or revolving account may be established in the name of the justice court for the deposit of bail, restitution, unidentified receipts, and other money that requires special accounting. The account shall be reconciled at least quarterly by the governing body. Finding: Reconciliations were no performed on the Court's trust accounts on a quarterly basis. Management Response: The first quarter of fiscal year 2005 the reconciliation was performed by the Finance Division. The reconciliation function was transferred to the Justice Court Division. Because of miscommunications of the transfer, the reconciliation was not performed for the last three quarters of fiscal year 2005. The problem has been resolved and the reconciliation has been done for the first two quarters of fiscal year 2006. Status of Prior Year Findings: 1, Justice Court Remittance of Funds Compliance Requirement: All justice courts, having funds due to the State or any political subdivision, shall on or before the 10th day of the month, pay all funds receipted within the preceding month to the appropriate public treasurer. Finding: For one month tested, the prior auditor noted that, although the funds were remitted within the 10 day period, the amount submitted for February did not include receipts from the period of February 23 — 29`h. In addition, the amount submitted for April was overstated because the receipts reflected the wrong month (March). Both misstatements were corrected in a subsequent month. Status: Item is not a current year finding. 2. Justice Court Remittance From Trust Account Compliance Requirement: Money received or collected on any civil process or order issued from a justice court shall be paid within seven days to the party entitled or authorized to receive it. Finding: Certain dispositions from the Court's trust revolving trust account were not made within the required seven-day period. Status: Items is not a current year finding. 3. Justice Court Reconciliation of Trust Account Compliance Requirement: A trust or revolving account may be established in the name of the justice court for the deposit of bail, restitution, unidentified receipts, and other money that requires special accounting. The account shall be reconciled at least quarterly by the governing body. Finding: Reconciliations were not performed on the Court's trust accounts on a quarterly basis. Status: Item is a current year finding. See item 5 in Current Year Findings. 4. Budgetary Compliance Expenditures in Excess of Total Appropriations Compliance Requirement: Officers and employees of the entity shall not incur expenditures or encumbrances in excess of the total appropriation for any department or fund. Finding: The Emergency 911 Dispatch special revenue fund had expenditures in excess of the total appropriation for that fund. Status: Item is a current year finding. See item 3 in current year findings. • HANSEN, BARNETT & MAXWELL A Professional Corporation CERTIFIED PUBLIC ACCOUNTANTS Registered with the Public Company AND Accounting Oversight Board BUSINESS CONSULTANTS 5 Triad Center,Suite 750 Salt Lake City,UT 84180-1128 BAKER T I L LY Phone:(801)532-2200 INTERNATIONAL Fax:(801)532-7944 www.hbmcpas.com December 15, 2005 To the Honorable Mayor and Members of the City Council Salt Lake City Corporation We have audited, in accordance with auditing standards generally accepted in the United States, the financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of Salt Lake City Corporation ("the City") as of and for the year ended June 30, 2005, and our report dated December 15, 2005, expressed an unqualified opinion on those financial statements. Our Responsibility as Defined by Auditing Standards Generally Accepted in the United States As stated in our audit contract with Salt Lake City Corporation, our responsibility, as described by professional standards, is to plan and perform our audit to obtain reasonable, but not absolute, assurance that the financial statements are free of material misstatement and are fairly presented in accordance with accounting principles generally accepted in the United States of America. Because of the concept of reasonable assurance and because we did not perform a detailed examination of all transactions, there is a risk that material errors, irregularities, or illegal acts, including fraud and defalcations, may exist and not be detected by us. As part of our audit, we considered the internal control structure of the City. Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control structure. Other Information in Documents Containing Audited Financial Statements Our responsibility for other information in documents containing the financial statements of the City, including management's discussion and analysis, does not extend beyond the financial information identified in our report. We have no obligation to audit or otherwise corroborate other information contained in those documents. We have read the other information for form and content, and have compared it to the financial information identified in our report. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or its manner of presentation, appearing in the financial statements. Independence We are not aware of any relationships between our Firm and the City during the year ended June 30, 2005 and through December 15, 2005 that, in our professional judgment, may reasonably be thought to affect our independence. We hereby confirm that as of December 15, 2005, we are independent accountants with respect to the City within the meaning of professional standards. Significant Accounting Policies and Accounting Standards Interpretations Management has the responsibility for selection and use of appropriate accounting policies. As part of our audit we have evaluated the appropriateness of the accounting policies selected by management. We are responsible for informing the Mayor and City Council of any policies that we determine to be inappropriate. We are not aware of any inappropriate accounting policies adopted by management. Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements include the valuation of infrastructure, the depreciation of capital assets, and the accrual and deferral of property taxes. We evaluated the key factors and assumptions used to develop these estimates in determining that they are reasonable in relation to the financial statements taken as a whole. Significant Audit Adjustments For purposes of this letter, professional standards define a significant audit adjustment as a proposed correction of the financial statements that, in our judgment, may not have been detected except through our auditing procedures. An audit adjustment may or may not indicate matters that could have a significant effect on the City's financial reporting process (that is, cause the future financial statements to be materially misstated). In our judgment,no audit adjustments were necessary. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting,reporting or auditing matter that could be significant to the financial statements or the auditor's report had it not been resolved. No such disagreements arose during the course of our audit. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing the audit. Deficiencies in Internal Control In planning and performing our audit of the financial statements of the City for the year ended June 30, 2005, we considered its internal control in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control. However, we noted no matters involving the internal control and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control that, in our judgment, could adversely affect the organization's ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements. A material weakness is a reportable condition in which the design or operation of one or more of the internal control elements does not reduce to a relatively low level the risk that errors or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. During the course of our audit we did not note any reportable conditions or material weaknesses. Conclusion This report is intended solely for the information and use of the City Council and management of Salt Lake City Corporation. We will be pleased to discuss the contents of this letter with the members of the City Council or management at any time. Sincerely, HANSEN, BARNETT&MAXWELL (61S, , 41-4-6-17 Ross L. Youngberg, CPA 1 -A, ,Ill( r - `,..✓ .\ - GYM S /. Jt t it _ _ - �, y4 , �S�� l USMrf':i L . �', r Y�i"iy�. 1 F -, ,,/i — 1 - 'ism 1;l)IIII{UU�Ini 14 ,�Y�ir'71�/�_ •::.ii .-1_77...,:,-:,,,, _;,-11_ .,,i,[,,,,, i.l. �- - It - SALT LAKE CITY CORPORATION ...,‘ SALT LAKE CITY, UTAH COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2005 SALT LAKE CITY CORPORATION SALT LAKE CITY,UTAH COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30,2005 With INDEPENDENT AUDITORS' REPORT Prepared by Department of Management Services Rocky J.Fluhart,Chief Administrative Officer Gordon Hoskins,Finance Director -i- TABLE OF CONTENTS INTRODUCTORY SECTION: Page Title Page Table of Contents ii Transmittal Letter v Organizational Chart xi Certificate of Achievement xii FINANCIAL SECTION: Independent Auditors' Report 2 Management's Discussion and Analysis 4 Basic Financial Statements Government-wide Fund Financial Statements Statement of Net Assets 14 Statement of Activities 16 Governmental Fund Financial Statements Balance Sheet 20 Reconciliation of the Balance Sheet—Governmental Funds to the Statement of Net Assets 25 Statement of Revenues, Expenditures,and Changes in Fund Balances ... 26 Reconciliation of the Statement of Revenues,Expenditures, and Changes In Fund Balances—Governmental Funds to the Statement of Activities.... 27 Proprietary Fund Financial Statements Statement of Net Assets 30 Reconciliation of Proprietary Fund Financial Statements to the Government-wide Financial Statement business-type activities 34 Statement of Revenues,Expenses,and Changes in Fund Net Asset 36 Reconciliation of Proprietary Fund Financial Statements Changes in Net Assets to the Government-wide Financial Statement business-type activities Changes in Net Assets 38 Statement of Cash Flows 40 Fiduciary Fund Financial Statements Statement of Fiduciary Net Assets 46 Statement of Changes in Fiduciary Net Assets 47 Notes to the Financial Statements 50 Note 1 - Summary of Significant Accounting Policies Note 2 - Cash,Cash Equivalents and Investments Note 3 - Loans Receivable Note 4 - Restricted Assets Note 5 - Capital Assets Note 6 - Long-term Obligations Note 7 - Reserved Fund Equity Note 8 - Deficit Fund Balances/Net Assets,Expenditures and Other Uses that Exceed Appropriations in Individual Funds Note 9- General Fund Interfund Service Charges Note 10- Transfers Note 11 - Risk Management Note 12 - Pension Plans Note 13 - Post-Employment Benefits Note 14- Deferred Compensation Plans Note 15 - Commitments and Contingencies Note 16- Segments of Information -ii- TABLE OF CONTENTS Page Notes to the Financial Statements(continued) Note 17- Related Party Transactions Note 18- Interfund Receivables and Payables Including Component Units Note 19- Joint Venture Note 20- Prior Period Adjustment—Component Unit Note 21 - Subsequent Events Required Supplementary Information Budgetary Comparison Schedule—General Fund 80 Budgetary Comparison Schedule—Housing Fund 84 Notes to Required Supplementary Information Budgetary—GAAP Reporting Reconciliation 83 Supplementary Information—Combining Statements and Individual Fund Statements and Schedules Governmental Funds Nonmajor Governmental Funds Combining Balance Sheet SI-4 Combining Statement of Revenues,Expenditures and Changes in Fund Balance SI-5 Combining Balance Sheet—Nonmajor Special Revenue Funds SI-6 Combining Statement of Revenues,Expenditures and Changes in Fund Balance—Nonmajor Special Revenue Funds SI-8 Budgetary Comparison Schedules Arts Council SI-10 Downtown Economic Development SI-11 Community Development Operating Fund SI-12 Grants Operating Fund SI-13 Street Lighting SI-14 Demolition, Weed and Forfeiture SI-15 Emergency 911 Dispatch SI-16 Salt Lake City Donation Fund SI-17 Combining Balance Sheet—Nonmajor Debt Service Funds SI-18 Combining Statement of Revenues,Expenditures and Changes in Fund Balance SI-19 Budgetary Comparison Schedules Special Improvement Fund SI-20 Other Improvement Fund SI-21 Enterprise Funds Nonmajor Proprietary Funds Combining Statement of Net Assets SI-24 Combining Statement of Revenues,Expenses and Changes in Fund Net Assets SI-28 Combining Statement of Cash Flows SI-30 Budgetary Comparison Schedules Intermodal Hub SI-34 Storm Water Utility Fund SI-35 Refuse Collection Fund SI-36 Golf Fund SI-37 TABLE OF CONTENTS Page Supplementary Information—Combining Statements and Individual Fund Statements And Schedules(continued) Major Proprietary Funds Budgetary Comparison Schedules Water Utility Fund SI-40 Department of Airports SI-41 Sewer Utility Fund SI-42 Redevelopment Agency Fund SI-43 Capital Projects Fund SI-44 Internal Service Funds Combining Statement of Net Assets S1-46 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets SI-48 Combining Statement of Cash Flows SI-50 Budgetary Comparison Schedules Fleet Management Fund SI-52 Information Management Services Fund SI-53 Risk Management Fund SI-54 Governmental Immunity Fund SI-55 Municipal Building Authority Fund SI-56 Copy Center Fund SI-57 Project Expenditure Schedules Capital Projects Fund SI-60 Community Development Operating Fund SI-62 Grants Operating Fund SI-64 STATISTICAL SECTION: (unaudited) Net Assets by component—Last Four Fiscal Years S- 1 Change in Net Assets—Last Four Fiscal Years S- 2 Fund Balance of Governmental Funds—Last Ten Years S- 4 Changes in Fund Balances of Governmental Funds—Last Ten Years S- 6 Governmental Activities Tax Revenues by Source—Last Four Fiscal Years S- 8 Assessed and Estimated Actual Value of Taxable Property—Last Ten Fiscal Years S- 9 Direct and Overlapping Property Tax Rates S-10 Principal Property Tax Payers S-11 Property Tax Levies and Collections—Last Ten Years S-12 Ratios of Outstanding Debt by Type S-13 Ratios of General Bonded Debt Outstanding—Last Ten Fiscal Years S-14 Computation of Direct and Overlapping Bonded Debt S-15 Legal Debt Margin Information—Last Ten Fiscal Years S-16 Pledged-Revenue Coverage—Last Ten Fiscal Years S-17 Demographic and Economic Statistics S-18 Full-time Equivalent City Government by Functions—Last Ten Fiscal Years S-19 Capital Asset Statistics by Function S-20 -iv- ROCKY J. FLUHART sp ' ; r_\ �. vl irx v,�ORPO D���i Ogi ROSS C. "ROCKY" ANDERSON CHIEF ADMINISTRATIVE OFFICER DEPARTMENT OF MANAGEMENT SERVICES MAYOR ACCOUNTING AND FINANCIAL REPORTING December 15,2005 The Honorable Mayor and Members of the City Council Salt Lake City Corporation Overview The Comprehensive Annual Financial Report of Salt Lake City Corporation ("the City") for the fiscal year ended June 30,2005, is submitted herewith. These financial statements have been prepared by the Salt Lake City Department of Management Services in accordance with Generally Accepted Accounting Principles (GAAP) for local governments as prescribed by the Governmental Accounting Standards Board (GASB). The accuracy of the presented data and the completeness and fairness of the presentations, including all disclosures, are the responsibility of the management of the City. We believe the data, as presented, is accurate in all material respects and is presented in a manner that fairly sets forth the following aspects of the City: (1) the financial position of the governmental activities;(2)the business-type activities;(3)the discretely presented component unit;(4)each major fund; (5) the aggregate remaining fund information; (6) the respective changes in financial position and (7) applicable cash flows. In order to provide a reasonable basis for making these representations, the management of Salt Lake City has established a comprehensive internal control framework that is designed both to protect the government's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the Salt Lake City Corporation's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, Salt Lake City Corporation's comprehensive framework of internal controls has been designed to provide reasonable rather then absolute assurance that the fmancial statements will be free from material misstatement. As management, we assert that to the best of our knowledge and belief,this report is complete and reliable in all material respects. Hansen, Barnett & Maxwell, an independent firm of Certified Public Accountants, has audited these basic financial statements and related notes. Their report is included herein. The goal of the independent audit was to provide reasonable assurance that the financial statements of Salt Lake City Corporation for the fiscal year ended June 30, 2005 are free of material misstatements. This independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,assessing the accounting principles used,and significant estimates made by management. Additionally, Hansen, Barnett & Maxwell audited the compliance requirements of the City's federal and state grant programs for the year ended June 30,2005 as part of the federally mandated"Single Audit" designed to meet the special needs of federal grantor agencies. That report is available under a separate cover. 451 SOUTH STATE STREET, ROOM 248, SALT LAKE CITY, UTAH 84111 TELEPHONE: 801.S35-7675 FAX: 801-535-7682 alRE CYCLED PAPER This annual report consists of three parts. The Introductory Section includes an organizational chart and this transmittal letter. The Financial Section includes the report of independent auditors, management's discussion and analysis, the financial statements and related notes. The management's discussion and analysis is designed to provide a narrative introduction, overview and analysis to accompany the basic financial statements. Also contained in the financial section are the Required Supplementary Information and the Supplementary Information. The Required Supplementary Information includes budgetary information for the City's major governmental funds. The Supplementary Information includes balance sheets and income statements and budgetary information for nonmajor governmental funds,nonmajor proprietary funds, internal service funds, as well as all other budgetary information for major proprietary funds and project schedules. The Statistical Section includes several tables of unaudited data depicting the financial history of the City as well as miscellaneous statistics. Profile of Salt Lake City Salt Lake City lies between the Wasatch Mountains and the Great Salt Lake at an altitude of 4,200 feet. Permanent settlement of the City began on July 24, 1847, when Brigham Young with a party of 148 Mormon pioneers entered the Salt Lake Valley after a 1,500-mile trek westward. Salt Lake City was incorporated on January 6, 1851 and soon became a major center for trade and commerce with the wagon trains carrying settlers and miners westward. Within a few years of the pioneers' arrival, other communities were settled throughout the Salt Lake Valley. Due to continuous economic and population growth, most of these cities in the valley survived and prospered,and have grown into a single large metropolitan area of over 700,000 people. Salt Lake City is the commercial center of this metropolis. Salt Lake City is also the center of the scenic intermountain west. Within a day's drive of the City, travelers can visit 70% of the officially designated national parks and monuments of America. The Wasatch Mountains, east of the City, are well known for their ski resorts, which are within a 45-minute drive from downtown Salt Lake City. Approximately 200,000 out-of-state skiers come to these resorts each year. The scenic Wasatch Front provided an excellent backdrop, as the City hosted the 2002 Winter Olympics. Salt Lake City, in 2004, was chosen by the State of Utah as a Quality Growth Community. This designation shows that the community has completed a comprehensive planning process covering economic development,housing, conservation,and infrastructure efficiency. This further shows that Salt Lake City is a leader in the region. Salt Lake City is the international headquarters of The Church of Jesus Christ of Latter-day Saints, or "Mormon" Church. At Temple Square in downtown Salt Lake City, 2-1/2 million visitors see the famous Salt Lake Temple, Tabernacle,and visitor centers each year. The Salt Palace Convention Center (located in downtown Salt Lake City) plays host to many different activities. This facility has a 36,000 square foot ballroom,256,000 square feet of exhibit space, and 54,000 square feet of meeting space. It is wired with miles of wire and fiber optic cable for up-to-date computer and communications, including satellite uplink capability. Several universities and colleges are located in or near Salt Lake City. The University of Utah is located on the east bench of Salt Lake City. This university was founded in 1850 and is the oldest mainland university west of the Missouri River. Approximately 27,000 full and part-time students are enrolled. The Utah Museum of Fine Arts and the Utah Museum of Natural History are located on the University of Utah campus. The University includes a medical school and hospital. Westminster College of Salt Lake City, Salt Lake Community College, and LDS Business College are also located in Salt Lake City. Three other universities—Utah State University, Weber State University, and Brigham Young University—as well as Utah Valley State College are all located within a two-hour drive from Salt Lake City. These institutions reflect the community's emphasis and dedication to higher education and job skill development. -vi- Salt Lake City also has many opportunities for recreational and cultural activities. The Delta Center, located three blocks directly west of Temple Square, is the home of the Utah Jazz, the 1997 and 1998 Western Conference Champions of the National Basketball Association. Franklin Covey Field,just south of downtown, is the home field of the Salt Lake Stingers,a minor league baseball team. In 2005,the University of Utah Rice-Eccles Stadium hosted the premier season of Real Salt Lake,a Major League Soccer team. Also downtown, directly north of the Salt Palace, is Symphony Hall, home of the Utah Symphony Orchestra. The Salt Lake Art Center with its gallery and art school facilities is located adjacent to Symphony Hall. A few blocks south of Symphony Hall,Salt Lake's historic Capitol Theater serves as the home of Ballet West, Repertory Dance Theater, Ririe-Woodbury Dance Company, and the Utah Opera Company. Nearby, the John W. Gallivan Utah Center is a gathering place for the business and commercial community. The Center's plaza includes an aviary, a 1,000-seat amphitheater, many unique art pieces, and an outdoor pond, which becomes an ice skating rink during the winter. The City also hosts Theater 138, Pioneer Memorial Theater,Utah Civic Opera Company,Hansen Planetarium,and the Utah Heritage Foundation. Salt Lake City is a major transportation crossroads in the intermountain west. Three major railroads, nine major airlines,two bus lines and many truck lines serve the area. The City is located at the convergence of four major highways and two interstate highway systems. The Salt Lake International Airport is a major intermountain air transportation hub and a principal hub and reservation center for Delta Air Lines. The Utah Transit Authority operates an outstanding commuter bus and light rail system in Salt Lake City and throughout neighboring counties. The Utah Transit Authority has been awarded the Outstanding System Achievement Award for being the top transit operation of its size in the country and the John A. Volpe Safety Award for being the safest system in the country. Ninety percent of Salt Lake City's residents rate their overall quality of life as high or very high(Salt Lake City Resident Survey, 2005). Outside Magazine also recognized this high quality of life when they ranked Salt Lake City as one of the ten Best Towns in the U.S. (August 2005). The criteria for these"Dream Towns" were cities that were "cleaner, greener and smarter". Cities that made the list had a commitment to open space, smart solutions to sprawl and gridlock, a can-do community spirit, and an active embrace of the adventurous life. They also looked for cities using green design, green-thinking mayors, thriving farmers' markets and healthy job markets. The City provides a full range of municipal services including police, fire, recreational activities including eight municipal golf courses, libraries, water, sewer, storm water, airports, public improvements, highways and streets,planning and zoning,and general administrative services. Factors Affecting Financial Condition Summary of Local Economy Salt Lake City is the capital city and commercial and industrial center for the State of Utah. The Department of Community and Economic Development aggressively promotes the City as a location for new businesses. The Salt Lake City-Ogden metropolitan area has been named the number one area for a woman running a business. The National Association of Women Business Owners ranked the Salt Lake metropolitan area first nationally in the percentage of growth of women-owned businesses and for their employment levels and sales over the past five years(Deseret News,June 24,2002). In addition, Utah has been ranked ninth in a state-by-state comparison study highlighting the states that are best positioned to succeed in the technology-led information age. The study,released by the Milken Institute, concluded that investments in science and technology, from higher education to industry research and development, are crucial factors in deciding the fate of regional economies. Individual measurements include everything from the percentage of state's population with PhD's to research and development -vii expenditures per capita(Milken Institute, August 2002). Utah was also named one of the top ten U.S. regions for medical technology industry expansion in 2003 (MX magazine, November/December 2002). The University of Utah, the state's largest public university, and its high technology Research Park are both located in Salt Lake City. Showing it's leadership in preserving the environment, Salt Lake City was chosen as a Green Power Purchaser of the Year by the Environmental Protection Agency and the Department of Energy in 2004. This designation was designed to recognize partner's efforts in purchasing renewable energy. Additionally, Salt Lake City has been recognized for it's smart-growth planning in the Sierra Club's annual "Building Better" report. Salt Lake City is one of 12 American cities the Sierra Club recognized for a "commitment to vibrant development geared towards mass transit instead of urban sprawl" (The Salt Lake Tribune, December 1,2005). Salt Lake City's workforce is widely known as being"overwhelmingly enthusiastic"and"the model for high productivity". This praise is well earned—Salt Lake City workers have one of the highest literacy rates in the country, and, additionally, many are fluent in multiple languages—a skill increasingly crucial to successful international trade. According to a 2005 U.S. Census Bureau report, in Utah 74% of the households own a computer, higher than any other state in the nation. Sixty-three percent of the households use the Internet, the fifth highest usage in the nation. This wired workforce allows Salt Lake City to continue to be a strong center for technology workers. Metropolitan Salt Lake City is ranked tenth among the most competitive areas in the world in the global knowledge economy (The World Knowledge Competitiveness Index 2002 by United Kingdom's Robert Huggins Associates). The Salt Lake City-Ogden metropolitan area is ranked number 28 among today's hottest cities for business expansion(Expansion Management magazine,January 2003). Salt Lake City—as a business, cultural, educational, and religious center—faces a number of challenges common to capital cities nationally. While Salt Lake City continues to be a vibrant city, it has felt the effects of the struggling national economy. Employment Activity Salt Lake City is the central city to 1.7 million inhabitants residing in four counties within an hour's drive from downtown. The majority of Utah's 2.4 million people live in the Wasatch Front urban corridor stretching from Ogden to Provo. The City's daytime population increases greatly as a significant portion of the state's total work force commutes to jobs located within the city limits. Following national trends, Salt Lake City experienced declining employment in the first years of the millennium. While the loss of some jobs can be accounted for the by the completion of preparations for the Winter Olympics and the layoffs that occurred after the Olympics,employment also declined in the important sectors of manufacturing, transportation, communications, utilities, finance, insurance, real estate, and professional business services between 2001 and 2002. However, 2003 brought a slight rebound. This rebound appears to be gaining strength as unemployment decreased by 0.5% in 2004 and appears to be continuing the trend in 2005. Over 19,000 jobs were created so far in 2005 in the Salt Lake City Metropolitan Statistical Area,showing an increase of 3.4%. -viii - Taxable Sales Activity Salt Lake City's total taxable sales have reflected both the national and regional economy. From 2001 to 2002, taxable sales in Salt Lake City declined 1.6%, a definite slow down from the robust growth of the mid 1990's. Rebounding slightly in 2003, taxable retail sales in Salt Lake City grew by 1.9%. This modest growth slowed to 1.4% in 2004. In 2005,taxable sales began to show more robust growth of 7%due to increases in construction and car sales and increases in other non-durable goods. The Utah State Tax Commission expects this trend in taxable sales to continue and projects growth of around 14%. Other Economic Indicators During the 1990s, Sale Lake City experienced a great deal of construction activity. During the early 2000s, the construction industry slowed considerably. In 2002 permit authorized construction declined by 10%and in 2003, permit authorized construction fell by almost 26%. However, in 2004 and 2005,the local construction industry has rebounded greatly showing an 8% growth in building permit fees in 2004 and a 51%growth in 2005. While a portion of the increase in 2005 is due to an increase in the permit fee structure, the majority of the increase is due to increased activity. Salt Lake City's downtown is projected to see significant growth in the next five years,according to a study commissioned by the Salt Lake City Downtown Alliance(Economic Benchmarks for Salt Lake City's Central Business District,James A Wood,Bureau of Economic and Business Research,University of Utah, June 2005). The study indicated that employers added 1,500 jobs in 2004,and office employment has recovered to 2001 levels. Retail sales,adjusted for inflation, increased by nearly$84 million in 2004 compared to sales in the year 2000. In the next five years as much as$1.5 billion in new investment could occur in the downtown area. Projects in the planning stages include at least 13 major office,retail and higher education construction projects. The City is beginning to see this growth happen;construction permits have increased over prior years in the last half of 2004 and the first half of 2005. The study also predicted an increase in the population in the downtown area.. By 2010,the Central Business District is expected to have 10,000 residents,compared to 6000 currently. Since 2002,five new housing developments have been completed in the downtown area. The demand for this new housing has been strong,and continues to grow. Summary Outlook While Salt Lake City has felt the lingering effects of the national economic slowdown, it continues to be a vibrant city with optimistic forecasts, especially for its downtown area. An economic rebound has begun,and modest growth over the next five years is expected. Internal Control Structure The City utilizes a computerized financial accounting system, which includes a system of internal accounting controls. These controls are designed to provide reasonable assurance regarding: (1) the safeguarding of assets against loss from unauthorized use or disposition, and (2) the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived, and (2)the evaluation of costs and benefits requires estimates and judgments by management. The City adheres to the above framework for internal controls. We believe that the City's internal accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of fmancial transactions. -ix- Budgetary Control The City Council approves all City budgets at a departmental level. The City Council then may amend the budget by motion during the fiscal year. The Mayor may approve transfers of funds from one object or purpose to another within the same department. Budgetary control is maintained at the department level where expenditures may not legally exceed appropriations. Budgetary control is also maintained in governmental funds by the encumbrance of estimated purchase and construction contract amounts prior to the release of purchase orders or contracts to vendors. Purchase orders which result in an overrun of department appropriations cannot be released until additional appropriations are made available. For purposes of budgetary control, all funds except for the General Fund are considered a department. Open encumbrances are reported as reservations of fund balance at year-end for only the General Fund. Cash Management The City's investment of its temporarily idle funds has as its major objectives: safety of principal, need for liquidity, and maximization of the City's investment income opportunities. Investment earnings strengthen the City's overall financial standing and add annually to its revenues. Cash of the various funds is pooled in order to obtain the best interest rates and ensure that all temporarily idle cash is invested. Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada(GFOA), awarded a Certificate of Achievement for Excellence in Financial Reporting to Salt Lake City Corporation for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2003. The City has now received this,or an equivalent award for over 20 years. In order to be awarded a Certificate of Achievement, the City must publish an easily readable and efficiently organized Comprehensive Annual Financial Report, the contents of which conform to program standards. Such reports must satisfy both Generally Accepted Accounting Principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to conform to Certificate of Achievement Program requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report on a timely basis could not have been accomplished without the efficient and dedicated services of the staff of the Department of Management Services. We appreciate Hansen, Barnett & Maxwell, Certified Public Accountants, for the assistance and guidance they have given us. We also thank the members of the City Council and the Mayor for their interest and support in planning and conducting the financial operations of the City in a responsible and progressive manner. Sincerely, Gordon Hoskins Finance Director -x- Salt Lake City Corporation Organizational Structure Fiscal Year 2004-2005 Citizens of Salt Lake City Mayor City Council Ross C.Anderson 1. Carlton Christensen Mayor's Exec. Staff 2. Van Blair Turner Community Affairs 3. K.Eric Jereensen 4. Nancy Saxton 5. Jill Remington Love 6. David L.Buhler Management Services Airport 7. Dale Lambert Rocky J.Fluhart Timothy L.Campbell Chief Administrative Officer Executive City Attorney's Office Public Services Council Staff Edwin P.Rutan Rick Graham Cindy Gust-Jenson City Attorney Director Executive Director Comm. DevelopmentLJ Police Louis ZunguzeCharles F. Director Chief Fire Public Utilities Charles M.Quetry LeRoy W.Hooton,Jr. Chief Director -Xi- Certificate of Achievement for Excellence in Financial Reporting Presented to Salt Lake City Corporation, Utah For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2004 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports(CAFRs)achieve the highest standards in government accounting and financial reporting. PNGE OFFjt, UNITED STATES AND Ni `ANADA :F. President siva 6y DDRPDRITPOWDgN s CNICAo *Cr Executive Director -xii- Financial Section HANSEN, BARNETT & MAXWELL A Professional Corporation CERTIFIED PUBLIC ACCOUNTANTS Registered with the Public Company Accounting Oversight Board 5 Triad Center,Suite 750 Salt Lake City,UT 841 80-1 1 28 Phone:(801)532-2200 Fax (801)532-7944 BAKE 1L'I ILLY It."i'I'Rf'Al IONAI. www hbmc pas.com REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS The Honorable Mayor and Members of the City Council Salt Lake City Corporation We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of Salt Lake City Corporation(the "C ity"), as of and for the year ended June 30,2005, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Oty's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the basic financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities,the discretely presented component unit, each major fund,and the aggregate remaining fund information of the City as of June 30, 2005, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. Management's Discussion and Analysis and Required Supplementary Information listed in the table of contents are not a required part of the basic financial statements, but are supplementary information required by the Governmental Accounting Standards Board. This information is the responsibility of management. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. 2 Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the aty's basic financial statements. The supplementary combining and individual statements and schedules listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. This information is the responsibility of City's management. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory and statistical sections, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements of the City. Such additional information has not been subjected to the auditing procedures applied in our audit of the basic financial statements and,accordingly,we express no opinion on it. In accordance with Government Auditing Standards, we have also issued our report dated December 15, 2005 on our consideration of the City's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing,and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. .k‘1°V.4L* 944".417.8{-4-111-(4444 HANSEN,BARNETT&MAXWELL Salt Lake City, Utah December 15,2005 3 SALT LAKE CITY CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30,2005 Salt Lake City Corporation's management presents to the readers of its financial statements this narrative information. It contains an overview and analysis of the financial position and results of operations as of and for the twelve months ended June 30, 2005. As management of the City, we encourage readers to consider information contained in this discussion along with the transmittal letter on pages v-x. FINANCIAL HIGHLIGHTS The assets of Salt Lake City (the City) exceeded its liabilities at the end of the current fiscal year by $1,779,104,391 (net assets). Of this amount, $407,928,530 (unrestricted net assets) is available to meet ongoing obligations to citizens and creditors. Net assets increased by$116,065,860. Of this amount,66 percent is a result of business-type activities The City's Governmental funds reported combined ending fund balance of$118,149,432, an increase of $1,127,172 compared to the prior years' ending amount. Of the combined total fund balance, $50,944,587 is available for spending at the discretion of the City(unreserved and undesignated fund balance). The unreserved and undesignated fund balance of the General Fund at June 30,2004 totaled$26,631,267, is 15 percent of the General Fund total revenues for the year and 52 percent of governmental unreserved and undesignated fund balance. The General Fund, also has approximately $2,500,000 of fund balance reserved for encumbrances that will be expended in the following fiscal year. During the year, total bonded debt for Salt Lake City decreased by approximately $36,702,927. The City Issued issue new Sales Tax bonds of$64,057,702. These funds were used to retire Revenue Bonds in the Municipal Building Authority Fund of$63,835,450. The City continued to make the regularly scheduled interest and principal payments. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis serves as an introduction to Salt Lake City's basic financial statements: (1) Government-wide fmancial statements, (2) Fund financial statements and (3) Notes to the financial statements. This report also contains information in addition to the basic financial statements that will help the reader to gain a more in-depth understanding of the City. Government-wide financial statements give readers a broad overview of the entire City's financial position and changes in financial position, similar to consolidated financial statements in a private sector business. These statements consist of the Statement of Net Assets and the Statement of Activities The Statement of Net Assets shows Salt Lake City's entire assets and liabilities with the difference shown as net assets. Increases or decreases over time in net assets gives an indicator as to whether the financial condition of Salt Lake City is improving or declining. The Statement of Activities shows the changes to net assets that occurred during the most recent fiscal year. These changes are recorded on an accrual basis when the underlying event that causes the change occurs, regardless of when the cash transaction takes place. One example is the next debt interest payment when the fiscal year ends in between interest payments. The Statement of Activities shows an additional interest expense for the time period between the last interest payment and the end of the fiscal year. Both of the government-wide financial statements distinguish between activities that are largely supported by taxes and intergovernmental revenues (governmental activities) and those whose operations are entirely or largely financed by user charges and fees (business type-activities). The governmental activities for Salt Lake City include genera] governmental; (Council, Mayor, Attorney, Management Services and Non-departmental); public safety (Police and Fire), streets and recreation (Public Services); and housing and other development (Community and Economic Development). The business-type activities include water, sewer, storm-water, airport, intermodal hub, refuse collection,golf and redevelopment. 4 SALT LAKE CITY CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30,2005 The government-wide financial statements include not only Salt Lake City itself(the primary government), but also those of the legally separate Salt Lake City Library. This entity(a component unit)is financially accountable to the City and is presented separately from the primary government itself. Two other entities, the Redevelopment Agency of Salt Lake City and the Municipal Building Authority are also legally separate from the City, but for all practical purposes function as a part of the City and are therefore blended as an integral part of the primary government. The government-wide financial statements are found immediately following this discussion and analysis. FUND FINANCIAL STATEMENTS A fund is a set of closely related accounts that are used to maintain control over resources that have been segregated for specific activities or purposes. Salt Lake City, like other state and local governments, uses fund accounting to demonstrate compliance with finance-related legal requirements. All of the City's funds can be categorized into one of three categories: governmental funds,proprietary funds and fiduciary funds. Governmental funds account for essentially the same activities as the governmental activities in the government-wide financial statements, but with a narrower focus. Governmental funds concentrate on near-term inflows and outflows of financial resources and the balances of spendable resources available to the government at the end of the fiscal year. This information can be useful in evaluating the government's short term financing requirements. Comparing similar information presented in the government-wide statements for the governmental activities with that presented in governmental funds statements can provide useful information because of the different focus of the two approaches. With the long-term focus of the government-wide statements, a reader may be able to better understand the long-term effects of the near term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues,expenditures and changes in fund balance show reconciliation between the governmental funds statements to the governmental activities in the government-wide statements to aid in the comparison. Salt Lake City uses eleven different individual governmental funds. Of this number, information is shown separately for the General, Housing Loans and Capital Projects Funds, all of which are deemed major funds. Information from the other eight funds is presented in a single combined column. Individual presentations for these non-major funds are contained in combining information shown after the notes to the financial statements as listed in the table of contents. The City adopts an annual appropriated budget for all its governmental funds. Budgetary comparison schedules have been provided to demonstrate compliance with these budgets. Within the Proprietary funds are two types that Salt Lake City utilizes; enterprise and internal service funds. Enterprise funds report the same functions as the business-type activities in the government-wide financial statements. The Enterprise funds maintained by Salt Lake City are: the water, sewer and storm-water utilities; the transportation Intermodal Hub; the Salt Lake City International Airport; refuse collection; golf and redevelopment activities. Internal service funds are used as an accounting device to accumulate and allocate costs among the City's various governmental and enterprise activities. Salt Lake City uses internal service funds to account for its vehicle fleet, information technology,risk management and employee benefits,tort liability and central printing activities. Because all of these activities support primarily governmental rather than business-type activities, they have been included within the governmental activities column of the governmentwide financial statements. Proprietary funds present the same information as in the government-wide statements,except in more detail. The fund statements for proprietary funds provide separate information for the Department of Airports, Water Utility and Redevelopment Agency, all of which are considered to be major funds of Salt Lake City. Individual presentations for the remaining enterprise funds are contained in the combining information elsewhere in this report. All internal service funds are shown in one single column in the proprietary fund financial statements. Individual fund information can be found in the combining information elsewhere in this report. The City also adopts annual appropriated budgets for all of its proprietary funds. As with the governmental funds, budgetary comparison statements are included to show compliance with these budgets. 5 SALT LAKE CITY CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30,2005 The basic proprietary fund financial statements can be found as listed in the table of contents. Fiduciary funds are used to account for resources held by the City for the benefit of entities outside of the government. Since these resources cannot be used to support the operations of Salt Lake City, they are not shown in the government-wide financial statements. The accounting for fiduciaryfunds is similar to that of proprietary funds. The fiduciary fund financial statements can be found as listed in the table of contents. Notes to the financial statements contain additional information important to a complete understanding of the information contained in the government-wide and fund financial statements. Notes to the financial statements are located after the statements for major funds as listed in the table of contents. GOVERNMENT-WIDE FINANCIAL ANALYSIS SALT LAKECITYCORPORATION'S NEI'ASSEIS(thousands) Governmental Business-type Activities Activities Total 2005 2004 2005 2004 2005 2004 Current and other assets $ 236,086 $ 233,604 $ 411,609 $ 409,282 $ 647,695 $ 642,886 Capital assets 532,872 523,982 1,100,969 1,037,963 1,633,841 $ 1,561,945 Total assets $ 768,958 $ 757,586 $1,512,578 $ 1,447,245 $ 2,281,536 $ 2,204,831 Current and other liabilities $ 110,307 $ 103,121 $ 52,462 $ 56,170 $ 162,769 $ 159,291 Long term liabilities 166,597 202,122 173,065 180,380 339,662 382,502 Total liabilities $ 276,904 $ 305,243 $ 225,527 $ 236,550 $ 502,431 $ 541,793 Net assets: Invested in capital assets, net of related debt $ 358,064 $ 323,869 $ 982,029 $ 907,775 $ 1,340,093 $ 1,231,644 Restricted 7,756 9,193 23,327 54,288 31,083 63,481 Unrestricted 126,234 119,281 281,695 248,632 407,929 367,913 Total net assets $ 492,054 $ 452,343 $1,287,051 $ 1,210,695 $ 1,779,105 $ 1,663,038 By far the largest component of Salt Lake City's net assets is its investment in capital assets. The Net Assets percentage-Current Fiscal 75 percent of total net assets represents the City's Year investment in land and land improvements, buildings, o Un- machinery and equipment,roads, streetlights,signals and restricted bridges, less any related outstanding debt that was used Z3' to acquire these assets. Salt Lake City uses these capital =aw 0Invested in assets to provide services to citizens who live, work, "r ; capital pass through or benefit in other ways from the City. By •Restricted ,,fi , assets,net k en their nature, these assets are not available for future a rt , of debt "h spending. Further, even though these capital assets are reported net of any related debt, resources needed to repay the debt must come from other sources, as the assets themselves cannot be used to satisfy the related obligations. 6 SALT LAKE CITY CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30,2005 An additional part of net assets (2 percent) is assets that are subject to external restrictions on how they may be expended (debt reserve funds or unexpended debt proceeds). The remaining 23 percent of net assets ($405,428,581)can be used to meet the City's ongoing obligations to its creditors and to citizens SALT LAKE CITY CORPORATION'S Changes in Net Assets Governmental Business-type Activities Activities Total 2005 2004 2005 2004 2005 2004 Revenues Program revenues Charges fa Services $ 61,918,582 $ 38,367,707 $ 232,114,923 $ 221,033,852 $ 294,033,505 $ 259,401,559 Operating grants and • contributions 14,423,739 17,491,656 29,395,312 28,928,408 43,819,051 46,420,064 Capital grants and contributions 5,795,746 7,723,645 - - 5,795,746 7,723,645 General Revenues Property taxes 66,695,537 63,243,320 - - 66,695,537 63,243,320 Other taxes 68,193,927 62,629,624 - - 68,193,927 62,629,624 Other 5,301,277 3,704,805 6,251,706 4,575,799 11,552,983 8,280,604 Total revenues 222,328,808 193,160,757 267,761,941 254,538,059 490,090,749 447,698,816 Expenses General Government 1,821,060 2,013,133 1,821,060 2,013,133 Council 1,546,212 1,337,504 - - 1,546,212 1,337,504 Mayor 1,470,109 1,407,769 - - 1,470,109 1,407,769 City Attorney 3,571,933 3,440,932 - - 3,571,933 3,440,932 Management Services 10,644,233 11,019,982 - - 10,644,233 11,019,982 Fire 27,893,933 27,505,927 - - 27,893,933 27,505,927 Police 48,720,463 46,482,467 - - 48,720,463 46,482,467 Community and Economic Development 17,367,287 17,909,743 - - 17,367,287 17,909,743 Public Services 38,931,172 33,500,359 - - 38,931,172 33,500,359 Nondepartmental 12,291,477 10,503,850 - - 12,291,477 10,503,850 Infrastructure depreciation 7,031,717 6,461,379 - - 7,031,717 6,461,379 Interest on long-term debt 11,329,180 10,617,868 - - 11,329,180 10,617,868 Water - - 38,000,843 35,574,187 38,000,843 35,574,187 Department of Airports - - 104,371,496 110,013,250 104,371,496 110,013,250 Sewer 12,640,979 12,050,866 12,640,979 12,050,866 Redevelopment Agency - - 17,167,999 13,402,799 17,167,999 13,402,799 Other business-type activities - - 19,224,796 19,306,459 19,224,796 19,306,459 Total Expenses 182,618,776 172,200,913 191,406,113 190,347,561 374,024,889 362,548,474 • Increase in net assets 39,710,032 20,959,844 76,355,828 64,190,498 116,065,860 85,150,342 Net assets beginning 452,343,414 431,383,570 1,210,695,117 1,146,504,619 1,663,038,531 1,577,888,189 Net assets ending $ 492,053,446 $452,343,414 $ 1,287,050,945 $ 1,210,695,117 $1,779,104,391 $ 1,663,038,531 ACTIVITIES,GOVERNMENTAL AND BUSINESS-TYPE Governmental Activities net assets increased by$39,710,032 for the year ended June 30,2005, which is 34% of the total increase in net assets for Salt Lake City Corporation as a whole. The major reasons for theincrease are: (1)An increase in receipts of sales,use,excise and franchise taxes as well as a slight increase in permits. (2) The City has in recent years used federal revenue to fund loans rather than grants in the Housing Loans Fund. Over time,this approach will significantly increase net assets as loan portfolios are built up and both principal and interest received on these loans are"recycled"into new loans; (3) A portion of governmental activities resources is dedicated to making debt principal payments, the payment of which does not reduce net assets. 7 SALT LAKE CITY CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30,2005 Governmental Activities - Expenses and Program Revenues -Millions 0 Expenses ■Program Revenues 60 - 50 20 771 10 *Y � Fire Police Community Develop. Public Sys. All Others Business-type activities contributed increased net assets in the amount of $76,355,828 or 66% of the total Governmental Revenues by Source increase to net assets. The most significant reason for this Unrestricted increase is the Department of Airports' and the Water's grants and revenues and capital contributions exceeding their expenses. s Other Charges for contributionServices Both entities continue to invest heavily in capital assets. The 0% 2% 28% Airport is continuing its program of expanded and improved Other taxes \ facilities while the Water Utility is aggressively replacing the 31% Operatingwater distribution infrastructure. , grants and Financial Analysis of Salt Lake City's Funds contributions Salt Lake City's governmental funds provide Property Capital information on the short-term resource inflows and outflows taxes grants and and account balances at the end of the fiscal year. The total 30% contributions 3% fund balance is a measure of total available resources and the unreserved portion of this total fund balance is a measure of the available spendable resources at June 30,2005. For the period ended June 30, 2005, the City's governmental funds reported a combined fund balance amount of$1 18,149,432 with an increase of$1,127,172 compared to the prior fiscal year. Of the total balance at year-end,$50,944,587 is unreserved and undesignated. There is also an amount of V7,233,923 designated for capital projects which is not considered restricted. The remaining$39,970,922 combined fund balance total is reserved for the following purposes: (1) encumbrances;(2) loans receivable; (3) restricted assets, including an amount for the guarantee of special assessment debt and(4) land and buildings held for resale. 8 SALT LAKE CITY CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30,2005 The General Fund is the main Business type Activies - Expenses and Program Revenues • operating fund for Salt Lake Millions City Corporation. At June 30, 2005, the General Fund's 160 unreserved fund balance was o Expenses $26,631,267 while total fund 140 ■Program Revenues balance equaled $29,158,152. A useful measure of liquidity is 120 to compare the unreserved fund 100 balance and the total fund =s balance to expenditures 80 (including operating transfers , out) for the year. Unreserved 60 - fund balance was 16 percent of 40 total expenditures and transfers while total fund balance equaled 20 �< 18 percent. Water Department of Sewer Redevelopment Other The fund balance of the Airports Agency General Fund for Salt Lake City increased by $7,743,711. Although the initial expectation was that fund balance for the 2005 fiscal year would decrease by approximately$600,000 due to expectations of a continued sluggish economy,actual revenues exceeded budgeted revenue. The Capital Projects Fund has a total fund balance of $33,763,990 at June 30, 2005, all of which is either reserved for restricted assets or designated for unfinished projects. The net decrease in fund balance for the year amounted to $8,113,679. Bonds were sold in fiscal year 2004 for the construction of Tracey Aviary and Bogle Zoo resulting in an prior year increase to fund balance. In the current year these funds were expended resulting in a decrease in fund balance. The Housing Loans Fund has a total fund balance of$20,584,904. Most of the total fund balance is reserved for either land and buildings held for resale or for loans receivable net of related debt. The related debt is used to leverage other resources this fund uses to provide financing for loans to low and moderate-income individuals and families. Fund balance increased by $1,294,907 during the current fiscal year. Business-type Revenues by Source The City's proprietary funds provide the same type of information found in the government-wide fmancial statements, Other � Operating2°/ but in more detail. Unrestricted net assets of the City's Major grants and proprietary funds totaled $140,750,311 for the Department of contribution Airports, $22,726,008 for the Water Fund, $23,748,801 for the °°�° fr P� '' Sewer Fund, and $47,762,809 for the Redevelopment Agency r�r ,"' Fund. Discussions about the finances of these three funds are . ' .� w addressed in the City's business-type activities. .- , Charges for Services 87% 9 SALT LAKE CITY CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30,2005 General Fund Budgetary Highlights Differences between the original and final amended budgets amounted to a total increase in appropriations of $2,673,659. By department, the changes are: • $515,630 increase for City Council • $62,368 increase for Mayor • $24,224 increase for City Attorney • $197,678 increase for Management Services • $68,733 increase for Fire • $477,438 increase for Police • $474,073 increase for Community and Economic Development • $459,740 increase for Public Services • $393,775 increase for Nondepartmental(including transfers out) Of the total increase in expenditure budgets, $170,000 in Community and Economic development was funded by an increase in permit and plan check fees, $105,000 in Public Services was funded by an increase in rental income, $48,328 in Fire and $84,030 in police were funded by an increase in Impact fees reimbursed expenses. The remaining were all funded from fund balance. Of the amount funded by Fund Balance $1,445,618 was for encumbrances carryovers. Capital Asset and Debt Administration Salt Lake City's investment in capital assets for its governmental and business type activities combined totaled$1,633,841,705 (net of$809,390,316 accumulated depreciation)at June 30,2005. Types of assets included in this category are land, land improvements,buildings, machinery and equipment, park and other recreation facilities, roads(including curb and gutter), street lights,traffic signals,parking facilities,water and waste water distribution and collection systems, airport runways and taxiways and bridges. The City's investment in capital assets equals more than 75 percent of total net assets. In comparing capital assets to net assets, the percentages for Governmental activities and Business type activities were 108 percent and 86 percent,respectively. Major capital asset activities that occurred during the past fiscal year include: (1)the Department of Airports placed into service approximately $17,700,000 of constructed assets related to its development master plan; (2) Water main replacement is a continuing program with the Water Utility Fund as many of the existing main lines near the end of their useful lives; (3)The Water utility is also continuing a five year meter replacement program and major modifications to the City Creek Treatment Plant. (4) The Sewer Utility is in the third year of a six-year capital improvement program with a major investment at the Water Reclamation Plant; Salt Lake City Corporation's Capital Assets Governmental Business-type Activities Activities Total • 2005 2004 2005 2004 2005 2004 Land and water rights $ 165,329,841 $ 165,009,373 $ 85,355,450 $ 84,216,020 $ 250,685,291 $ 249,225,393 Infrastructure 219,948,512 215,433,480 - - 219,948,512 215,433,480 Buildings 211,679,858 205,801,758 401,877,800 394,194,978 613,557,658 599,996,736 Improvements other than - buildings 37,900,135 29,735,954 960,343,694 931,813,472 998,243,829 961,549,426 Machinery and equipment 73,910,695 68,338,526 133,034,826 124,485,964 206,945,521 192,824,490 Construction in progress 14,254,627 18,674,415 139,596,273 74,082,363 153,850,900 92,756,778 Accumulated Depreciation (190,151,391) (179,011,236) (619,238,925) (570,830,108) (809,390,316) (749,841,344) Net book value $532,872,277 $523,982,270 $ 1,100,969,118 $1,037,962,689 $1,633,841,395 $1,561,944,959 10 SALT LAKE CITY CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30,2005 At June 30, 2005, Salt Lake City's bonded debt amounted to $308,501,576. The portion that is backed by the full faith and credit of the City amounted to $91,755,109, and the portion for which the City is liable in case of default by assessed property owners amounted to $1,404,000. In the prior year the portion for which the city is not liable was$17,350,00. This amount was retired in the current year. All other bonded debt is known as revenue bonds and is secured by specific revenue sources. In September 2004 and June 2005 the City issued $17,300,000 and $47,355,000 in Sales Tax Revenue Bonds. The proceeds were used to refund Revenue Bonds in the Municipal Building Authority fund. Salt Lake City's general obligation bonded debt has the following ratings from Moody's Investors Service and Fitch IBCA Inc.;Aaa/AAA,respectively. General obligation debt of the City is limited by statute to 8 percent of the reasonable fair cash value of property. The debt limit for FY 2005 calculates to approximately $1.4 billion, which is well in excess of the City's outstanding general obligation debt. Additional information on Salt Lake City's capital assets and debt can be found in Notes 5 and 6. Salt Lake City Corporation's Outtanding Debt General Obligation and Revenue Bonds Business-type Governmental Activities Activities Total 2005 2004 2005 2004 2005 2004 General obligation bonds $ 91,755,109 $ 97,560,974 $ - $ - $ 91,755,109 $ 97,560,974 Special assessment debt with governmental commitment 1,404,000 1,704,000 - - 1,404,000 1,704,000 Special assessment debt without - 17,350,000 - - - 17,350,000 governmental commitment Revenue bonds 65,499,580 66,985,450 149,842,887 161,604,079 215,342,467 228,589,529 Total $ 158,658,689 $ 183,600,424 $ 149,842,887 $ 161,604,079 $308,501,576 $345,204,503 Economic factors and next year's budgets and rates The unemployment rate for the most recent fiscal year available(2004 annual rate) is 5.4 percent,down from 6.7 percent for the previous year. Total employment with the City has increased slightly and taxable sales and franchise taxes increased by 8 percent. Revenue appears to be increasing and the economic factors indicate some improvement in the economy. These static economic factors were considered in preparing and amending the fiscal year 2005 budget. During the just completed fiscal year fund balance in the General Fund increased by approximately $7,743,711. The increase was $8,000,000 more than originally budgeted. To date for FY 2006, the City has avoided appropriating any unreserved fund balance. Currently, Salt Lake City is experiencing slightly positive economic changes. The rates and fees for most services remained constant for FY 2005 compared with the fiscal year just ended. Requests for information This financial report is designed to give its readers a general overview of the city of Salt Lake City's finances. Questions regarding any information contained in this report or requests for additional financial information should be addressed to the Office of the Finance Director,451 South State Street Room 248, Salt Lake City,Utah 84111. 11 This page intentionally left blank. 12 Basic Financial Statements 13 SALT LAKE CITY CORPORATION STATEMENT OF NET ASSETS June 30,2005 Primary Government Component Governmental Business-type Unit Activities Activities Total Library ASSETS Current assets: Cash and cash equivalents(Note 2) Unrestricted $ 105,781,862 $ 252,872,168 $ 358,654,030 $ 348,609 Restricted(Note 2&4) 7,698,066 9,884,737 17,582,803 - Investments(Note 2) - 1,584,068 1,584,068 5,032,923 Receivables: Property,franchise and excise taxes 73,046,038 - 73,046,038 11,633,122 Assessments,including$275,361 of delinquent assessments 1,673,774 - 1,673,774 - Loans and other receivables, less allowance for doubtful accounts of$4,040,726 (Note 3) 41,809,568 1,037,454 42,847,022 79,286 Accounts,less allowance for doubtful accounts of$1 12,040 - 24,482,245 24,482,245 - Due from other governments 3,105,222 1,757,457 4,862,679 - Other,principally accrued interest 1,024,948 99,399 1,124,347 - Prepaid Expenses 199,906 - 199,906 116,920 Inventories 424,746 3,103,019 3,527,765 - Internal balances (162,133) 162,133 - - Total current assets 234,601,997 294,982,680 529,584,677 17,210,860 Noncurrent assets: Restricted cash and cash equivalents(Note 2) - 30,697,041 30,697,041 - Property and equipment,at cost: Land and water rights(Note 5) 165,329,841 85,355,450 250,685,291 590,554 Infrastructure(Note 5) 219,948,512 - 219,948,512 - Buildings(Note 5) 211,679,858 401,877,800 613,557,658 8,167,620 Improvements other than buildings(Note 5) 37,900,135 960,343,694 998,243,829 317,116 Machinery and equipment(Note 5) 73,910,695 133,034,826 206,945,521 19,120,307 Construction in progress(Note S) 14,254,627 139,596,273 153,850,900 - Work in Progress(Note 5) - - - - Accumulated depreciation(Note 5) (190,151,391) (619,238,925) (809,390,316) (12,279,470) Net property and equipment 532,872,277 1,100,969,118 1,633,841,395 15,916,127 Bond issue costs,less accumulated amortization of$1,345,570 1,169,950 2,239,396 3,409,346 - Loans and other long-term receivables - 22,786,296 22,786,296 - Land and buildings held for resale 313,799 15,844,901 16,158,700 - Investment in Joint venture(Note 19) - 26,275,509 26,275,509 - Deferred charges - 14,749,804 14,749,804 - Other - 4,033,435 4,033,435 - Total noncurrent assets 534,356,026 1,186,898,459 1,721,254,485 15,916,127 Total assets $ 768,958,023 $ 1,512,578,180 $ 2,281,536,203 $ 33,126,987 The accompanying notes are an integral part of this statement 14 SALT LAKE CITY CORPORATION STATEMENT OF NET ASSETS June 30,2005 Primary Government Component Governmental Business-type Unit Activities Activities Total Library LIABILITIES Current liabilities: Accounts payable $ 6,276,279 $ 18,962,134 $ 25,238,413 $ 808,602 Accrued liabilities 16,062,580 12,030,521 28,093,101 - Current portion of long-term compensation liability 1,620,189 1,195,707 2,815,896 - Current portion of long-term debt: Payable from unrestricted assets(Note 6) 23,593,571 3,256,399 26,849,970 54,369 Payable from restricted assets(Note 6) - 9,628,988 9,628,988 - Special assessment debt with governmental commitment(Note 6) 311,000 - 311,000 - • Deferred revenue 60,668,551 38,936 60,707,487 13,444,686 Accrued interest,payable from restricted assets - 1,263,204 1,263,204 - Other liabilities payable from restricted assets 563,708 - 563,708 - ' Current deposits and advance rentals 1,211,615 6,086,121 7,297,736 - Total current liabilities 110,307,493 52,462,010 162,769,503 14,307,657 Noncurrent liabilities: Deposits,advance rentals and long term accruals - 27,464,934 27,464,934 - Long-term compensation liability 14,523,078 6,755,304 21,278,382 275,951 Bonds payable 148,677,689 - 148,677,689 - Notes payable 3,269,518 138,844,987 142,114,505 - Notes payable from restricted assets 126,799 - 126,799 - Total noncurrent liabilities 166,597,084 173,065,225 339,662,309 275,951 Total liabilities 276,904,577 225,527,235 502,431,812 14..583,608 NET ASSETS Invested in capital assets,net of related debt 358,063,650 982,029,405 1,340,093,055 15,916,127 Restricted for: Capital projects 7,201,928 - 7,201,928 - Debt service 554,266 23,326,612 23,880,878 - Unrestricted 126,233,602 281,694,928 407,928,530 2,627,252 Total net assets 492,053,446 1,287,050,945 1,779,104,391 18,543,379 Total liabilities and net assets $ 768,958,023 $ 1,512,578,180 $ 2,281,536,203 $ 33,126,987 The accompanying notes are an integral part of this statement I5 SALT LAKE CITY CORPORATION STATEMENT OF ACTIVITIES Year ended June 30,2005 Program Revenues Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Primary government: Governmental activities: General Government $ 1,821,060 $ 20,723,001 $ - $ 5,795,746 City Council 1,546,212 55,507 - - Mayor 1,470,109 278,910 - - City Attorney 3,571,933 319,902 - - Management Services 10,644,233 9,989,347 - - Fire 27,893,933 4,646,830 772,746 - Police 48,720,463 4,511,001 1,157,024 - Community and Economic Development 17,367,287 11,893,602 7,273,939 - Public Services 38,931,172 8,936,957 5,220,030 - Nondepartmental 12,291,477 563,525 - - Unallocated infrastructure depreciation 7,031,717 - - - Interest on long-term debt 11,329,180 - - - Total governmental activities 182,618,776 61,918,582 14,423,739 5,795,746 Business-type activities: Water 38,000,843 43,667,006 2,296,155 - Airport Authority 104,371,496 129,709,388 19,123,668 - Sewer 12,640,979 15,893,395 2,743,672 Redevelopment Agency 17,167,999 22,884,944 - - Other activities 19,224,796 19,960,190 5,231,817 - Total business-type activities 191,406,113 232,114,923 29,395,312 - Total primary government $ 374,024,889 $ 294,033,505 $ 43,819,051 $ 5,795,746 Component unit Library $ 12,984,956 $ 365,001 $ 201,041 $ 251,512 General revenues: Taxes: Property taxes,levied for general purposes Franchise taxes Sales tax Investment earnings Transfers Total general revenues and transfers Change in net assets Net Assets July I,2004 Prior Period Adjustment Net Assets June 30,2005 The accompanying notes are an integral part of this statement 16 Net(Expense)Revenue and Changes in Net Assets Primary Government Governmental Business-type Component Activities Activities Total Units $ 24,697,687 $ - $ 24,697,687 $ - (1,490,705) - (1,490,705) - (1,191,199) - (1,191,199) - (3,252,031) - (3,252,031) - (654,886) - (654,886) - (22,474,357) - (22,474,357) - (43,052,438) - (43 052,438) - 1,800,254 - 1,800,254 - (24,774,185) - (24,774,185) - (11,727,952) - (11,727,952) - (7,031,717) - (7,031,717) - (11,329,180) - (11,329,180) - (100,480,709) - (100,480,709) - 7,962,318 7,962,318 - - 44,461,560 44,461,560 - - 5,996,088 5,996,088- 5,716,945 5,716,945 - - 5,967,211 5,967,211 - - 70,104,122 70,104,122 - (100,480,709) 70,104,122 (30,376,587) - (12,167,402) 66,695,537 - 66,695,537 12,568,667 23,194,439 - 23,194,439 - 44,999,488 - 44,999,488 - 5,090,504 6,462,479 11,552,983 114,487 210,773 (210,773) - - 140,190,741 6,251,706 146,442,447 12,683,154 39,710,032 76,355,828 116,065,860 515,752 452,343,414 1,210,695,117 1,663,038,531 17,571,361 - _ - 456,266 $ 492,053,446 S 1,287,050,945 $ 1,779,104,391 $ 18,543,379 1 The accompanying notes are an integral part of this statement 1 17 This page intentionally left blank. 18 Governmental Fund Financial Statements General Fund - The General Fund is the principal fund of the City and is used to account for resources traditionally associated with governments which are not required to be accounted for in another fund. The General Fund accounts for the normal activities of the City, (i.e. police, fire, public works,parks, community and economic development, general government, etc.). These activities are funded principally by property taxes, sales and use taxes, franchise taxes, licenses and permits. Capital Projects Fund - The City's Capital Projects Fund is used to account for resources designated to construct general fixed assets which, by their nature, may require more than one budgetary cycle for completion. Project budgets are adopted for the Capital Projects Fund. Housing Loans Fund - To account for the loan servicing activities of the City's Governmental Fund Types, except for the Urban Development Action Grant loans. 19 SALT LAKE CITY CORPORATION BALANCE SHEET GOVERNMENTAL FUNDS June 30,2005 General ASSETS Assets: Cash and cash equivalents(Note 2) $ 31,163,138 Receivables: Property, franchise and excise taxes 72,634,279 Assessments, including$277,275 of delinquent assessments _ Taxes receivable _ Loans and other receivables, less allowance for doubtful loans of$4,052,488(Note 3) Due from other funds for cash overdraft(Notes 2& 19) _ Due from other funds for other than cash overdraft(Note 18) _ Due from other governments _ Other,principally accrued interest 486,679 Restricted assets: Cash and cash equivalents(Notes 2&4) _ Land and buildings held for resale _ Total assets $ 104,284,096 The accompanying notes are an integral part of this statement 20 Other Total Capital Housing Governmental Governmental Projects Loans Funds Funds $ 28,904,743 $ 3,203,791 $ 20,492,664 $ 83,764,336 - - - 72,634,279 - - 1,673,774 1,673,774 - - 411,759 411,759 76,774 29,293,112 12,439,682 41,809,568 266,939 - - 266,939 - - 757,834 757,834 293,086 828,096 1,218,697 2,339,879 - - 538,269 1,024,948 6,453,293 107,692 1,010,282 7,571,267 - 313,799 - 313,799 $ 35,994,835 $ 33,746,490 $ 38,542,961 $ 212,568,382 (continued) The accompanying notes are an integral part of this statement 21 SALT LAKE CITY CORPORATION BALANCE SHEET GOVERNMENTAL FUNDS (continued) June 30,2005 General LIABILITIES AND FUND BALANCES Liabilities: Due to other funds for cash overdraft(Notes 2 and 19) $ - Due to other funds for other than cash overdraft(Note 18) Accounts payable 1,885,368 Accrued liabilities 11,283,095 Current deposits and advance rentals 1,211,615 Other liabilities payable from restricted assets - Loan financing notes payable _ Deferred revenue 60,745,866 Total liabilities 75,125,944 Fund balances: Reserved for encumbrances 2,526,885 Reserved for loans receivable and advances - Reserved for restricted assets - Reserved for land and buildings held for resale - Unreserved -designated for capital improvements - Unreserved and undesignated 26,631,267 Unreserved,reported in nonmajor Special Revenue Funds - Debt Service Funds - Total fund balances 29,158,152 Total liabilities and fund balances $ 104,284,096 The accompanying notes are an integral part of this statement 22 Other Total Capital Housing Governmental Governmental Projects Loans Funds Funds $ - $ - $ 20,777 $ 20,777 - 757,834 - 757,834 2,230,845 581,273 1,118,872 5,816,358 - - 56,767 11,339,862 - - - 1,21 1,615 - 107,692 456,016 563,708 - 11,714,787 - 11,714,787 - - 2,248,143 62,994,009 2,230,845 13,161,586 3,900,575 94,418,950 - - - 2,526,885 76,774 17,578,325 12,467,580 30,122,679 6,453,293 - 554,266 7,007,559 - 313,799 - 313,799 27,233,923 - - 27,233,923 - 2,692,780 - 29,324,047 - - 20,751,472 20,751,472 - - 869,068 869,068 33,763,990 20,584,904 34,642,386 118,149,432 $ 35,994,835 $ 33,746,490 $ 38,542,961 $ 212,568,382 The accompanying notes are an integral part of this statement 23 This page intentionally left blank. 24 Salt Lake City Corporation Reconciliation of the Governmental Funds Balance Sheet to the Statements of Net Assets Year ended June 30,2005 Total fund balances for governmental funds $ 118,149,432 Total net assets reported for governmental activities in the statement of net assets is different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. Those assets consist of: (see Note 5) Land 165,329,841 Infrastructure 219,948,512 Buildings 21 1,679,858 Improvements other than buildings 37,900,135 Equipment 73,910,695 Construction in progress 14,254,627 Less accumulated depreciation (190,151,391) Total capital assets 532,872,277 Other assets are reported for governmental activities as they are not considered collectible until after year end. These include other receivables that are long-term in nature and bond issue costs less amortization Other receivables 465,343 Bond issue costs 1,169,950 1,635,293 Internal services funds are used by the City to charge the costs of the fleet management system,data processing services,insurance for employee health,accident,long-term disability,unemployment and worker's compensation,general liability claims,acquisition and lease to the City of purchased or constructed property and equipment and photocopying and printing services. 22,188,403 Some of the internal service net income is allocable to business-type activities. These amounts are shown in the internal balances in the governmental activities statement. (162,133) Recognition of income on the accrual basis of accounting that is deferred on the modified accrual basis of accounting. 2,499,949 it Long-term liabilities applicable to the City's governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. Interest on long-term debt is not accrued in governmental funds,but rather as an expenditure when due. Obligation for compensation liabilities due within one year are included in the governmental fund statements in accrued liabilities. All liabilities-both current and long-term are reported in the statement of net assets.(See Note 6.) Accrued liabilities (6,179,694) Obligation for compensation liabilities due after one year (14,523,078) Current portion of long-term debt (12,189,784) Current portion of obligation for compensation liabilities (163,213) Bonds payable (148,677,689) Note payable (3,396,317) Total liabilities (185,129,775) Total net assets of governmental activities $ 492,053,446 The accompanying notes are an integral part of this statement 25 SALT LAKE CITY CORPORATION STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS Year ended June 30,2005 Other Capital Housing Governmental General Projects Loans Funds Totals Revenues: General property taxes $ 64,472,863 $ - $ - $ - $ 64,472,863 Sales,use,and excise taxes 42,756,404 - - 2,243,084 44,999,488 Franchise taxes 23,194,439 - - - 23,194,439 Licenses 5,505,104 - - - 5,505,104 Permits 6,145,379 735,314 - - 6,880,693 Fines and forfeitures 5,655,903 - - - 5,655,903 Assessments - - - 19,046,085 19,046,085 Interest 2,329,996 398,634 968,691 987,858 4,685,179 Intergovernmental 4,367,262 5,795,746 840,333 9,475,824 20,479,165 Interfund service charges 8,689,335 - - - 8,689,335 Parking meter 1,288,058 - - - 1,288,058 Parking ticket 3,669,078 - - - 3,669,078 Charges for services 3,551,387 - 22,039 59,222 3,632,648 Contributions 11,541 - - 1,490,902 1,502,443 Miscellaneous 427,768 121,652 330,955 679,250 1,559,625 Total revenues 172,064,517 7,051,346 2,162,018 33,982,225 215,260,106 Expenditures: Current: City Council 1,541,482 - - - 1,541,482 Mayor 1,459,969 - - - 1,459,969 City Attorney 2,925,101 - - - 2,925,101 Management Services 9,252,380 - - 25,138 9,277,518 Fire 27,322,150 - - - 27,322,150 Police 44,883,262 - - 1,173,943 46,057,205 Community and Economic Development 7,567,313 - 393,431 8,236,243 16,196,987 Public Services 32,756,205 - - 2,145,748 34,901,953 Arts Council - - - 1,051,870 1,051,870 Nondepartmental 12,291,477 - - - 12,291,477 Capital outlay - 22,847,380 - - 22,847,380 Debt service: Principal - - - 29,828,635 29,828,635 Interest and other fiscal charges - - 602,652 7,729,010 8,331,662 Total expenditures 139,999,339 22,847,380 996,083 50,190,587 214,033,389 Revenues over(under)expenditures 32,065,178 (15,796,034) 1,165,935 (16,208,362) 1,226,717 Other financing sources(uses): Issuance of debt - - - 68,666,038 68,666,038 Premiums from issuance of debt - - - - - Proceeds from sale of property 393,043 1,159,615 - 152,358 1,705,016 Transfers in 1,628,762 20,055,090 873,094 13,286,807 35,843,753 Transfers out (26,343,272) (13,532,350) (744,122) (65,694,608) (106,314,352) Total other financing sources(uses): (24,321,467) 7,682,355 128,972 16,410,595 (99,545) Net Change in Fund Balances 7,743,711 (8,113,679) 1,294,907 202,233 1,127,172 Fund balance July 1,2004 21,414,441 41,877,669 19,289,997 34,440,153 117,022,260 Fund balance June 30,2005 $ 29,158,152 $ 33,763,990 $ 20,584,904 $ 34,642,386 $ 118,149,432 The accompanying notes are an integral part of this statement 26 Salt Lake City Corporation Reconciliation of the Statement of Revenues, Expenditures,and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year ended June 30,2005 Net change in fund balances-total governmental funds $ 1,127,172 The change in net assets reported for governmental activities in the statement of activities is different because: Governmental funds report capital outlays as expenditures. However,in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlay($22,847,380) exceeded depreciation expense($12,472,150). (see Note 5.) 10,375,230 Repayment of principal is an expenditure in the governmental funds but reduces the liability in the statement of net assets. (See Note 6.) 25,220,000 In governmental funds the proceeds from the bonds and notes are considered a source of financing,but in the statement of net assets,the obligation is reported as a liability. (see Note 6.) (68,666,038) Governmental funds do not report infrastructure. Contributions of Infrastructure are reported as contributions in kind in Statement of Activities 1,713,596 Under the modified accrual basis of accounting used in the governmental funds, expenditures are not recognized for transactions that are not normally paid with expendable available financial resources. In the statement of activities, however,which is presented on the accrual basis,expenses and liabilities are reported regardless of when financial resources are available. In addition, interest on long-term debt is not recognized under the modified accrual basis of accounting until due,rather than as it accrues. This adjustment contains the following: Deferred revenue recognized as income 2,499,949 Compensated absences (742,961) Accrual for landfill income 216,007 Capitalization of bond issue costs 833,342 Amortization of bond issue costs (630,377) Deferred loss and amortization of bond premium and deferred loss 4,827,817 Accrued interest 34,392 Gain(loss)on sale of capital assets 118,677 7,156,846 Internal services funds are used by the City to charge the costs of the fleet management system,data processing services,insurance for employee health, accident,long-term disability,unemployment and worker's compensation, general liability claims,acquisition and lease to the City of purchased or constructed property and equipment and photocopying and printing services. The net revenue of internal service funds is allocated between governmental activities and business-type activities. Internal service fund net revenue of $62,761,508 plus amount allocated to business-type activities$21,718. 62,783,226 Change in net assets of governmental activities $ 39,710,032 The accompanying notes are an integral part of this statement 27 This page intentionally left blank. 28 Proprietary Fund Financial Statements Water Utility Fund - This fund is used to account for the activities related to providing water service to the residents of the City and certain residents of Salt Lake County. Airport Authority Fund - This fund is used to account for the activities related to the operation of City airports. Sewer Utility Fund - This fund is used to account for the activities relating to providing sewer service to the residents of the City. Redevelopment Agency Fund - This fund is used to account for urban redevelopment activities such as acquisition of land sites and sale of such land for development, and loans provided for improvements in existing housing and the repayment of loans and related interest. 29 SALT LAKE CITY CORPORATION STATEMENT OF NET ASSETS PROPRIETARY FUNDS June 30,2005 Business-type Activities- Enterprise Funds Department Water of ASSETS Utility Airports Current assets: Cash and cash equivalents(Note 2) Unrestricted $ 19,075,073 $ 134,160,387 Restricted _ - Investments(Note 2) - - Receivables: Accounts,less allowance for doubtful accounts of$79,189 4,988,479 16,464,651 Current portion of loans receivable _ - Other 278,227 1,379,529 Due from other governments - - Prepaid expenses _ Inventory of supplies 2,027,837 - Total current assets 26,369,616 152,004,567 Noncurrent assets: Restricted cash and cash equivalents(Notes 2&4) 9,163,494 8,139,453 Property and equipment,at cost: Land and water rights(Note 5) 16,394,465 42,397,806 Buildings(Note 5) 31,232,467 318,288,397 Improvements other than buildings(Note 5) 203,840,732 561,915,244 Machinery and equipment(Note 5) 19,558,812 69,980,114 Construction in progress(Note 5) 9,279,485 71,179,889 Work in Progress(Note 5) - - Accumulated depreciation(Note 5) (72,668,253) (436,058,290) Net property and equipment 207,637,708 627,703,160 Bond issue costs,less accumulated amortization of$1,345,570 283,483 1,236,714 Loans and other long-term receivables - - Land and buildings held 1For resale - - Investment in joint venture(Note 19) - - Deferred Charges - 14,749,804 Other 1,786,805 403,723 Total noncurrent assets 218,871,490 652,232,854 Total assets $ 245,241,106 $ 804,237,421 The notes accompanying notes are an integral part of this statement 30 Business-type Activities Enterprise Funds Governmental Nonmajor Activities- Sewer Redevelopment Proprietary Internal Utility Agency Funds Total Service Funds $ 21,852,862 $ 56,539,621 $ 21,244,225 $ 252,872,168 $ 22,017,526 9,884,737 - 9,884,737 - - 1,584,068 - 1,584,068 - 1,790,935 - 1,238,180 24,482,245 - - 1,037,454 - 1,037,454 - 99,701 - - 1,757,457 - -- - 99,399 99,399 300,000 - - - - 199,906 603,466 - 471,716 3,103,019 424,746 24,346,964 69,045,880 23,053,520 294,820,547 22,942,178 10,264,950 - 3,129,144 30,697,041 126,799 4,187,449 16,436,520 5,939,210 85,355,450 7,467,587 45,070,923 - 7,286,013 401,877,800 66,835,388 66,564,488 40,845,458 87,177,772 960,343,694 15,655,124 27,320,149 94,589 16,081,162 133,034,826 51,200,378 28,797,395 - 30,339,504 139,596,273 - (53,741,368) (19,105,801) (37,665,213) (619,238,925) (53,710,262) 118,199,036 38,270,766 109,158,448 1,100,969,118 87,448,215 269,214 364,970 85,015 2,239,396 - - 22,786,296 - 22,786,296 - - 15,844,901 - 15,844,901 - - - 26,275,509 26,275,509 - - - - 14,749,804 - 1,842,907 - - 4,033,435 - 130,576,107 77,266,933 138,648,116 1,217,595,500 87,575,014 $ 154,923,071 $ 146,312,813 $ 161,701,636 $ 1,512,416,047 $ 110,517,192 (continued)- The notes accompanying notes are an integral part of this statement 31 SALT LAKE CITY CORPORATION STATEMENT OF NET ASSETS PROPRIETARY FUNDS June 30,2005 Business-type Activities- Enterprise Funds Department Water of LIABILITIES Utility Airports Current liabilities: Due to other funds for cash overdraft(Notes 2& 18) - Accounts payable 3,151,253 10,864,481 Accrued liabilities 541,623 10,983,134 Current portion of long-term compensation liability(Note 6) 313,634 544,952 Current portion of long-term debt: Payable from unrestricted assets(Note 6) 789,269 1,095,994 Payable from restricted assets(Note 6) 890,731 2,929,006 Deferred revenue - - Accrued interest,payable from restricted assets 216,298 69,183 Current deposits and advance rentals 487,074 5,335,883 Total current liabilities 6,389,882 31,822,633 Noncurrent liabilties: Deposits,advance rentals and long-term accruals 157,035 126,069 Other liabilities payable from restricted assets - - Bonds,mortgages,and notes payable 23,341,741 48,229,480 Long-term compensation liability 2,157,599 3,425,848 Total noncurrent liabilities 25,656,375 51,781,397 Total liabilities 32,046,257 83,604,030 NET ASSETS Invested in capital assets,net of related debt 185,002,805 575,448,680 Restricted for debt service 5,466,036 4,434,400 Unrestricted(deficit) 22,726,008 140,750,311 Total net assets 213,194,849 720,633,391 Total liabilities and net assets $ 245,241,106 $ 804,237,421 The notes accompanying notes are an integral part of this statement 32 Business-type Activities Enterprise Funds Governmental Nonmajor Activities- Sewer Redevelopment Proprietary Internal Utility Agency Funds Total Service Funds $ - $ - $ - $ - $ 246,162 3,101,691 420,935 1,423,774 18,962,134 459,921 207,028 18,344 280,392 12,030,521 5,829,514 75,800 9,228 252,093 1,195,707 163,213 443,334 - 927,802 3,256,399 2,208,784 316,666 5,392,585 100,000 9,628,988 - -- - 38,936 38,936 174,491 457,627 375,582 144,514 1,263,204 - 62,142 201,022 6,086,121 - 4,602,146 6,278,816 3,368,533 52,462,010 9,082,085 107,542 27,038,339 35,949 27,464,934 - -- - - - 126,799 23,763,273 34,906,617 8,603,876 138,844,987 3,269,518 442,369 77,490 651,998 6,755,304 1,055,383 24,313,184 62,022,446 9,291,823 173,065,225 4,451,700 28,915,330 68,301,262 12,660,356 225,527,235 13,533,785 100,874,440 20,364,005 100,339,475 982,029,405 81,843,114 1,384,500 9,884,737 2,156,939 23,326,612 - 23,748,801 47,762,809 46,544,866 281,532,795 15,140,293 126,007,741 78,011,551 149,041,280 1,286,888,812 96,983,407 $ 154,923,071 $ 146,312,813 $ 161,701,636 $ 1,512,416,047 $ 110,517,192 The notes accompanying notes are an integral part of this statement ,'_ 33 Salt Lake City Corporation Reconciliation of the Proprietary Funds Statement of Net Assets to the Primary Government business-type Statement of Net Assets Year ended June 30,2005 Total assets for Proprietary Funds $ 1,512,416,047 Internal service fund allocation for proprietary funds-prior year 183,851 Internal service fund allocation for proprietary funds-current year (21,718) Total assets for Primary government business-type activities $ 1,512,578,180 Total net assets for Proprietary Funds $ 1,286,888,812 Internal service fund allocation for proprietary funds-prior year 183,851 Internal service fund allocation for proprietary funds-current year (21,718) Total net assets for Primary government business-type activities $ 1,287,050,945 The accompanying notes are an integral part of this statement 34 This page intentionally left blank. 35 SALT LAKE CITY CORPORATION STATEMENT OF REVENUES,EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS Year ended June 30,2005 Business-type Activities Enterprise Funds Department Water of Utility Airports Operating revenue: Sales and charges for services $ 41,748,982 $ 89,403,244 Rental and other 1,595,795 1,745,307 Total operating revenue 43,344,777 91,148,551 Operating expenses: Personal services 14,103,362 31,628,324 Operating and maintenance 1,977,061 6,115,389 Charges and services 15,574,533 23,163,084 Depreciation and amortization 5,432,552 39,435,645 Participating airline rebate - 4,065,301 Total operating expenses 37,087,508 104,407,743 Operating income(loss) 6,257,269 (13,259,192) Nonoperating revenues(expenses): Interest income 802,547 3,007,120 Interest expense(net of amount capitalized o.f$516,972) (913,335) (1,274,260) Property taxes Equity in joint venture income Gain on disposition of property and equipment 138,280 1,310,507 Loss on writedown of land/buildings held for resale Total nonoperating revenues(expenses) 27,492 3,043,367 Capital Contributions Grants and other contributions 2,296,155 19,123,668 Passenger facility charges - 38,376,148 Total capital contributions 2,296,155 57,499,816 Income before transfers 8,580,916 47,283,991 Transfers in Transfers out (24,415) (42,928) Increase in net assets 8,556,501 47,241,063 Net Assets July 1,2004 204,638,348 673,392,328 Net Assets June 30,2005 $ 213,194,849 $ 720,633,391 The accompanying notes are integral part of this statement 36 Business-type Activities Enterprise Funds Governmental Total Activities- Sewer Redevelopment Nonmajor Internal Utility Agency Funds Total Service Funds $ 15,646,804 $ - $ 20,118,188 $ 166,917,218 $ 44,252,707 218,214 2,030,824 84,055 5,674,195 - 15,865,018 2,030,824 20,202,243 172,591,413 44,252,707 5,870,761 568,533 6,696,167 58,867,147 8,638,989 1,044,462 1,5 89,385 1,374,698 12,100,995 3,891,988 2,102,221 9,125,304 8,623,419 58,588,561 30,119,399 3,637,990 1,733,120 3,099,940 53,339,247 7,238,269 - - 4,065,301 - ' 12,655,434 13,016,342 19,794,224 186,961,251 49,888,645 3,209,584 (10,985,518) 408,019 (14,369,838) (5,635,938) 597,617 1,541,439 513,756 6,462,479 405,325 14,455 (4,151,657) (151,709) (6,476,506) (2,972,103) 20,850,309 - 20,850,309 - - 721,137 721,137 - 58,182 608 121,701 1,629,278 282,852 670,254 18,240,699 1,204,885 23,186,697 (2,283,926) 2,743,672 - 5,231,817 29,395,312 - - - 38,376,148 - 2,743,672 - 5,231,817 67,771,460 - 6,623,510 7,255,181 6,844,721 76,588,319 (7,919,864) - - - 70,919,559 (18,932) (110,751) (13,747) (210,773) (238,187) 6,604,578 7,144,430 6,830,974 76,377,546 62,761,508 119,403,163 70,867,121 142,210,306 1,210,511,266 34,221,899 $ 126,007,741 $ 78,011,551 $ 149,041,280 $ 1,286,888,812 $ 96,983,407 The accompanying notes are integral part of this statement 37 Salt Lake City Corporation Reconciliation of the Proprietary Funds Change in Net Assets to the Primary Government business-type Changes in Net Assets Year ended June 30,2005 Change in net assets for Proprietary Funds $ 6,830,974 Internal service fund allocation for proprietary funds (21,718) Change in net assets for Primary government business-type activities $ 6,809,256 The accompanying notes are an integral part of this statement 38 This page intentionally left blank. 39 SALT LAKE CITY CORPORATION STATEMENT OF CASH FLOWS PROPRIETARY FUNDS Year ended June 30,2005 Department Water of Utility Airports Cash Flows from Operating Activities Receipts from customers and users $ 44,078,579 $ 93,052,375 Payments to suppliers (19,773,284) (37,025,214) Payments to employees (14,249,981) (33,357,997) Loans made - - Principal received on loans - - Other receipts - 37,884,340 Net cash provided by(used in)operating activities 10,055,314 60,553,504 Cash flows from noncapital and related financing activities: Property taxes received - - Payments received on interfund receivables - - Payments made on interfund payables (174,221) - Cash received on deposit-related parties - - Transfers in - - Transfers out (24,415) (42,928) (198,636) (42,928) Cash flows from capital and related financing activities: Proceeds from issuance of debt (net of discount and issuance costs) - - Proceeds from sale of capital assets 90,252 1,437,100 Contributions for aid in construction 1,785,330 19,238,495 Payments on long-term obligations,net of capitalized interest (2,382,793) (4,500,805) Payments for purchase and construction of capital assets, including capitalized interest (13,409,232) (61,187,127) Net cash provided by(used in)capital and related financing activities (13,916,443) (45,012,337) The accompanying notes are an integral part of this statement 40 Governmental Total Nonmajor Activities- Sewer Redevelopment Proprietary Internal Utility Agency Funds Total Service Funds $ 15,696,682 $ 2,030,824 $ 20,106,664 $ 174,965,124 $ 44,220,536 (3,712,765) (10,482,413) (10,003,585) (80,997,261) (33,714,483) (5,930,716) (549,846) (6,695,326) (60,783,866) (8,500,737) (6,046,134) - (6,046,134) - 4,416,645 - 4,416,645- _ - 37,884,340 - 6,053,201 (10,630,924) 3,407,753 69,438,848 2,005,316 20,850,309 - 20,850,309 - 135,090 - (571,439) (436,349) - - (174,221) - - 98,771 - 98,771 - - - 70,919,559 (18,932) (110,751) (13,747) (210,773) (238,187) 116,158 20,838,329 (585,186) 20,127,737 70,681,372 - - 1,914,068 51,721 20,608 197,955 1,797,636 482,815 1,927,546 - 4,447,281 27,398,652 - (2,608,465) (8,262,016) (1,485,169) (19,239,248) (70,004,235) (17,877,166) (1,389,653) (14,058,217) (107,921,395) (4,436,095) (18,506,364) (9,631,061) (10,898,150) (97,964,355) (72,043,447) • (continued) The accompanying notes are an integral part of this statement 41 SALT LAKE CITY CORPORATION STATEMENT OF CASH FLOWS(continued) PROPRIETARY FUNDS Year ended June 30,2005 Department Water of Utility Airports Cash flows from investing activities: Proceeds from investments - - Interest received on investments 802,547 3,103,667 Purchases of water stock (297,674) - Net cash provided by investing activities 504,873 3,103,667 Net increase(decrease)in cash and cash equivalents (3,554,892) 18,601,906 Cash and cash equivalents at beginning of year 31,793,459 123,697,934 Cash and cash equivalents at end of year $ 28,238,567 $ 142,299,840 Cash and cash equivalent components: Unrestricted $ 19,075,073 $ 134,160,387 Restricted 9,163,494 8,139,453 Cash and cash equivalents at end of year $ 28,238,567 $ 142,299,840 Cash flows from operating activities- Operating income(loss) $ 6,257,269 $ (13,259,192) Adjustments to reconcile operating income(loss)to net cash provided by(used in)operating activities: Depreciation and amortization 5,432,552 39,435,645 Increase(decrease)due to changes in: Accounts receivable 765,193 (547,645) Inventory (512,400) - Other current assets (31,391) 39,441,875 Due to other funds for cash overdraft - - Accounts payable (1,988,781) (4,860,894) Accrued liabilities affecting operating activities 132,872 - Deferred revenue - - Other liabilities - 343,715 Long-term compensation liability - - Total adjustments 3,798,045 73,812,696 Loans made to residents and businesses - - Principal collected on loans - - Net cash provided by(used in)operating activities $ 10,055,314 $ 60,553,504 Noncash transactions affecting financial position: Contributions of fixed assets from other entities $ 510,826 $ - The accompanying notes are an integral part of this statement 42 Governmental Total Nonmajor Activities- Sewer Redevelopment Proprietary Internal Utility Agency Funds Total Service Funds 393,092 - 393,092 - 597,617 1,668,607 513,756 6,686,194 351,518 - - - (297,674) - 597,617 2,061,699 513,756 6,781,612 351,518 (11,739,388) 2,638,043 (7,561,827) (1,616,158) 994,759 43,857,200 63,786,315 31,935,196 295,070,104 21,149,566 $ 32,117,812 $ 66,424,358 $ 24,373,369 $ 293,453,946 $ 22,144,325 $ 21,852,862 $ 56,539,621 $ 21,244,225 $ 252,872,168 $ 22,017,526 ' 10,264,950 9,884,737 3,129,144 $ 40,581,778 $ 126,799 $ 32,117,812 $ 66,424,358 $ 24,373,369 $ 293,453,946 $ 22,144,325 $ 3,209,584 $ (10,985,518) $ 408,019 $ (14,369,838) $ (5,635,938) 3,637,990 1,733,120 3,099,940 53,339,247 7,238,269 (171,918) - (82,991) (37,361) - - - - (512,400) 39,760 48,830 - (96,542) 39,362,772 152,195 - - - - (369,890) (727,680) 232,275 (34,992) (7,380,072) (225,657) 56,395 10,490 49,672 249,429 727,059 - - - - 18,206 - - 90,795 434,510 - - _ 8,198 (26,148) (17,950) 61,312 2,843,617 1,984,083 2,999,734 85,438,175 7,641,254 - (6,046,134) - (6,046,134) - - 4,416,645 - 4,416,645 - $ 6,053,201 $ (10,630,924) $ 3,407,753 $ 69,438,848 $ 2,005,316 $ 816,126 $ - $ 4,393,686 $ 5,720,638 $ - • The accompanying notes are an integral part of this statement 43 This page intentionally left blank. 44 Fiduciary Funds Deferred Compensation Fund - This fund is used to account for amounts deferred under the City's employee deferred compensation plan for which the City acts in a fiduciary capacity as trustee. 45 SALT LAKE CITY CORPORATION STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES FIDUCIARY FUNDS June 30,2005 Deferred Compensation ASSETS Trust Restricted investments: Utah State Treasurer's Pool $ 1,133,727 NET ASSETS Held in trust for pension benefits and other purposes $ 1,133,727 The accompanying notes are an integral part of this statement 46 SALT LAKE CITY CORPORATION STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS Year ended June 30,2005 Deferred Compensation Trust Additions: Investment income $ 27,401 Total additions 27,401 Deductions: Investment expenses - Benefits 26,164 Total deductions 26,164 Changes in Net Assets 1,237 Net Assets July 1,2004 1,132,490 Net Assets June 30,2005 $ 1,133,727 The accompanying notes are an integral part of this statement 47 This page intentionally left blank. 48 Notes to the Financial Statements 49 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30, 2005 1. Summary of Significant Accounting Policies Salt Lake City Corporation (the City) was incorporated January 6, 1851. The City operates under a Council-Mayor form of government and provides services to residents and businesses in many areas including police and fire protection, street maintenance, refuse collection, planning and zoning, building construction inspection, parks and recreation, prosecution,water, sewer,storm water,airports,and general administrative services. Reporting Entity For financial reporting purposes, the reporting entity includes all funds, agencies and authorities for which the City holds corporate powers and all component units for which the City is financially accountable. The Governmental Accounting Standards Board (GASB) in its Statement No. 14, The Financial Reporting Entity, has established criteria to consider in determining financial accountability. The criteria are: appointment of a majority of the voting members of an organization's governing board, and either (1) the City has the ability to impose its will on the organization or (2) there is potential for the organization to provide specific financial benefits to, or impose specific financial burdens on,the City. As required by Generally Accepted Accounting Principles (GAAP), these financial statements present the City, the primary government, and its component units. The component units are included in the City's reporting entity because of the significance of their operational or financial relationship with the City. The following funds, all with fiscal years ended June 30, 2005, have separately issued fmancial statements that can be obtained from their respective administrative offices: (1) The Arts Council (a special revenue fund), (2)the Water, Sewer and Storm Water Utility Funds(enterprise funds)and(3)the Department of Airports(an enterprise fund). Blended Component Units The Municipal Building Authority and the Redevelopment Agency of Salt Lake City are legally separate entities from the City, but are part of the City and are blended into the internal service and enterprise funds, respectively. The Redevelopment Agency has separately issued financial statements for the year ended June 30, 2005, which are available at the Agency's administrative office. The sole purpose of the Municipal Building Authority is to serve the City as a financing agency for debt financed projects. The sole purpose of the Redevelopment Agency is the elimination of blight through the process of redevelopment in designated project areas within the boundaries of the City. The Salt Lake City Council serves as the Board of Directors of both the Municipal Building Authority and the Redevelopment Agency. Discretely Presented Component Unit The discrete component unit is the Salt Lake City Library. It is legally separate from, but financially accountable to the City,as the City can impose its will on the Library. It provides services to residents rather than to the City and therefore meets the criteria of a discretely presented component unit. The Salt Lake City Library is a governmental fund and has separately issued financial statements for the year ended June 30, 2005, which are available at the administrative offices of the Library. Joint Venture The City is a fifty percent partner with Salt Lake County in a joint venture known as the City/County Landfill. The purpose of this joint venture is to provide solid waste management and disposal services(see note 19). Related Organizations The City also has activities with three other related organizations,the Metropolitan Water District,the Housing Authority of Salt Lake City and the Salt Lake City Mosquito Abatement District. City officials appoint members of these three boards, but the City's accountability does not extend beyond making the appointments. 50 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 Basis of Presentation-Government-wide and fund financial statements Government-wide statements are comprised of the statement of net assets and the statement of activities. They contain information on all of the activities of the primary government and its component units except for fiduciary activities. Most effects of inter-fund activities have been eliminated from these statements. The exceptions are (1) payments-in-lieu-of-taxes the General Fund charges enterprise funds; (2) charges for water, sewer, storm-water and refuse that all customers pay to these enterprise funds and(3)charges for centrally provided services of the General Fund that benefit the receiving fund. Examples are payroll,purchasing,human resources and legal services. The government- wide statements for the primary government are separated based on the predominance of the type of revenues that support them. Governmental activities are normally supported by taxes and intergovernmental revenues,while business- ' type activities receive a significant portion of revenues from fees and charges for services. Certain entities that are legally separate, but financially accountable to the primary government are reported separately on the government-wide statements. The City currently has one of these entities,its discretely presented component unit. The statement of activities is presented to show the extent that program revenues of a given activity support direct expenses. Direct expenses are those that can clearly be associated with a particular activity or program. Program revenues are: (1) charges to customers or others who purchase, use or directly benefit from the services or goods provided by a given activity or segment or (2) grants or other contributions that are restricted to operating or capital needs of a specific activity or segment. General revenues are those revenues like taxes and other items that are not properly reported as program revenues. Separate financial statements are included for governmental funds, proprietary funds and fiduciary funds. Fiduciary funds, however, are not included in the totals for the government-wide financial statements. Major individual governmental funds are reported in separate columns in the governmental funds statements, as are major individual proprietary funds in the proprietary funds statements. Measurement focus and basis of accounting Measurement focus refers to the types of assets that appear on the statement of net assets and changes to those same assets that appear on the statement of activities. The flow of financial resources measurement focus shows current assets and liabilities on the statement of net assets and changes to net current assets in the statement of activities. The flow of economic resources measurement focus shows total assets and liabilities on the statement of net assets and changes to net assets on the statement of activities. Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Government-wide,proprietary and fiduciary fund statements use the economic resources measurement focus and the accrual basis of accounting. Revenues are recognized in the accounting period in which they are earned and expenses are recognized in the period incurred,regardless of the timing of the related cash flows. Unbilled fees for proprietary funds are recorded as receivables at year end. Property taxes are recorded as revenues in the year for which they are levied. Grants and similar other contributions are recognized as revenue as soon as the eligibility requirements of the provider have been met. The City's major enterprise funds are: (1) Water Utility Fund, (2) The Department of Airports, (3) Sewer Utility Fund and (4) Redevelopment Agency of Salt Lake City, whose purpose is described previously in the section titled "Blended Component Units". The Water Utility collects or purchases fresh water, treats it and delivers potable water to nearly all residents and business located in the City and many residents and business located geographically outside the boundaries of the City. The Department of Airports operates the Salt Lake City International Airport,Airport II and the Tooele Valley Airport,the latter two of which are located outside the boundaries of The City. The Sewer Utility Fund provides treatment and disposition services for waste water. In addition to the major enterprise funds, The City also operates four non-major enterprise funds and six internal service funds. The non-major enterprise funds are the Intermodal Hub, Storm Water Utility, Golf and Refuse. The Intermodal Hub is a fund whose purpose is to provide a central connecting point between the City's inter- state passenger bus and rail lines to the commuter bus and light rail systems. The Storm Water Utility provides treatment and disposition services for storm runoff. The Golf Fund operates all City owned golf courses, while the Refuse Fund provides refuse collection and recycling services for residences and businesses of The City. Internal service funds 51 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 provide services to other departments or agencies of the City on a cost reimbursement basis. The internal service funds are Fleet Management, Information Management, Risk Management, Governmental Immunity, Municipal Building Authority and the Copy Center. The Fleet Management fund owns and services all vehicles of the governmental funds and services vehicles owned by many of the enterprise funds. Information Management maintains the infrastructure for the hard-wired telephone system, centralized computer services and the network of personal computers. Risk Management provides centralized services for the employee benefits of health, life, accident, dental, long-term disability as well as unemployment, workers' compensation and property insurance needs. The Governmental Immunity Fund manages the City's general liability activities. The Municipal Building Authority's purpose is discussed previously in the section titled "Blended Component Units", while the Copy Center provides centralized copying, printing and interdepartmental mail services. The fiduciary fund is the Executive Deferred Compensation Fund. The City is the trustee for this fund and manages it in accordance with provisions of the Utah State Money Management Act and the City's own ordinances, policies and procedures. In the past, city executives could elect to have some or all of their deferred compensation contributed to this fund, but it is now closed to further contributions. Proprietary funds separate operating and non-operating revenues and expenses. Operating revenues and expenses normally arise from providing goods and services in connection with the fund's normal ongoing operations. The principal source of operating revenues for the proprietary funds and the internal service funds are charges to customers for goods and services. Operating expenses include the cost of sales and services, administrative overhead expenses and depreciation on capital assets. All other revenues or expenses are recorded as non-operating. The City has adopted GASB Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities that use Proprietary Fund Accounting. Accordingly, the City has elected to apply all applicable GASB pronouncements as well as Financial Accounting Standards Board (FASB) pronouncements and Accounting Principles Board(APB)Opinions issued on or before November 30, 1989,unless those pronouncements conflict with or contradict GASB pronouncements. Consequently,the City does not apply FASB pronouncements issued after November 30, 1989. Governmental fund statements use the current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis, revenues are recognized when they become measurable and available. "Measurable" means that amounts can be reasonably determined within the current period. "Available" means that amounts are collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. As a practical matter,The City uses two months as a cutoff for meeting the available criterion. Property taxes are considered"measurable"when levied and available when collected and held by Salt Lake County(the County). Any amounts not available are recorded as deferred revenue. Franchise taxes are considered "measurable" when collected and held by the utility company,and are recognized as revenue at that time. Other revenues that are determined to be susceptible to accrual include grants-in-aid earned and other intergovernmental revenues, charges for services, interest, assessments, inter-fund service charges, permits, fines, forfeitures, parking ticket and meter fees, and sale of property. Property taxes and assessments are recorded as receivables when levied or assessed; however, they are reported as deferred revenue until the "available" criterion has been met. Sales and use taxes collected by the state and remitted to the City within the "available" time period are recognized as revenue. Revenues collected in advance are deferred and recognized in the period to which they apply. Revenues that are determined to not be susceptible to accrual because they are either not available soon enough to pay liabilities of the current period (two months) or are not objectively measurable include licenses, contributions, and miscellaneous revenues. Revenue is recognized when cash is received. Expenditures are recognized in the accounting period in which the fund liability is incurred, except for long-term obligations (debt service payments and long term compensated absences) and related interest which are recognized as expenditures when due. Inventories of supplies are expended when purchased. The City has three major governmental funds, the General Fund, the Capital Projects Fund and the Housing Loans Fund. The General Fund is the main operating fund. It accounts for all financial resources of the general government, except for those required to be accounted for in another fund. The Capital Projects Fund accounts for 52 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 resources dedicated to the construction or improvement of capital assets, which may take more than one budgetary cycle to complete. These constructed or improved capital assets are for the benefit of any or all governmental funds. The Housing Loans Fund provides loans to low and moderate-income families and individuals. Resources for these loans are received from a variety of sources including federal government, state government, financial institutions and internally generated sources. The Housing Loans Fund also services these same loans. In addition to the listed major governmental funds,the City also has a total of ten non-major governmental funds: (1)the Arts Council, (2) Downtown Economic Development, (3)Community Development Block Grant(CDBG) Operating, (4) Other Grants Operating,(5) Street Lighting, (6) Demolition, Weed & Forfeiture, (7) Emergency 911 Dispatch, (8) Salt Lake City Donation, (9) Special Improvement Debt Service and(10) Other Improvements Debt Service. As their name implies, the last two are debt service funds while the first eight are special revenue funds. Budgets and budgetary accounting Budgets are legally required for governmental funds. The City has a policy of budgeting for proprietary funds. Annual budgets are prepared and adopted by the City Council on or before June 15 for the fiscal year commencing the following July 1, in accordance with Utah State law. The operating budget includes proposed expenditures and the proposed sources of fmancing for such expenditures. Prior to June 15, a public hearing is conducted to obtain taxpayer input. Budgets are adopted by ordinance in total for each department. Expenditures cannot exceed appropriations at the department level. For budgetary purposes, the City considers each enterprise fund to be a department. Management can move budgeted amounts from one line item to another within a department or decrease appropriations. The City Council can increase appropriations after holding a public hearing. During the year ended June 30,2005,the City Council passed several supplementary appropriations. The General Fund budget is prepared using the modified accrual basis of accounting adjusted for encumbrances and changes in compensated absences. Encumbrance accounting is used by the City to assure effective budgetary control and accountability,and to comply with State law. However,only the General Fund budget is prepared under the assumption that actual expenditures will be adjusted for encumbrances. Unencumbered General Fund appropriations lapse at year end. Encumbered amounts carry over to the subsequent year and are shown as a reservation of fund balance. Generally accepted accounting principles require that open encumbrances not be reported with expenditures. However, in the General Fund budget to actual financial statement, the actual amounts are adjusted to include encumbrances. Compensated absences are budgeted on a cash basis. Non-cash changes in the balances of compensated absences are therefore eliminated for budgetary purposes. Capital lease purchases are budgeted in the year payments are due rather than in the year purchased. Budgets for the Special Revenue Funds, Debt Service Funds and the Capital Projects Fund are also prepared using the modified accrual basis of accounting and are adopted on an annual basis. The budget for the Community Development Operating, Grants Operating (special revenue funds), and the Capital Projects Fund are prepared annually for a specific set of projects. The Debt Service Funds'budgets are not prepared by project. By state law only budgets in the Capital Projects Fund do not lapse at year-end. Therefore, any remaining budget in the Grants Operating Fund and the Community Development Operating Fund are re-appropriated by Council action in the following year. State law also requires a budget comparison for all funds for which an annual budget is adopted. In these three funds, the Council adopts the entire amount of the project, even though the project may not be completed in the first year. As a result, the budget comparisons on an annual basis may show large amounts of unexpended appropriations. Budgets for the Downtown Economic Development Fund, Street Lighting Fund, Demolition, Weed Abatement & Forfeiture Fund, Emergency 911 Fund, and Housing Loans Fund (special revenue funds) lapse at year end. Encumbrances are not reported as expenditures, but where necessary,are re-appropriated in the ensuing year's budget. Budgets for the proprietary funds are prepared using the accrual basis of accounting except for depreciation,lease amortization,and the change in compensated absences,which are not budgeted. Budgets are adopted for the entire amount of estimated proceeds from the sale of property and equipment rather than on the gain or loss from the sale as is reported in the fmancial statements. Budgets are also adopted for the entire amount of any debt issued to fmance multi-year acquisition and construction projects. Budget comparisons in the proprietary funds may therefore show large amounts of unexpended appropriations for construction projects. These unexpended amounts are re- appropriated the following year. 53 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 Cash, Cash Equivalents and Investments The City complies with GASB Statement No. 31 Accounting and Financial Reporting for Certain Investments and for External Investment Pools. The statement requires certain investments to be reported at fair value and the change in fair value to be included in revenues or expenses. The City's policy is to report all investments at fair value except for money market investments and interest-earning investment contracts with a remaining maturity at time of purchase of ninety days or less. These are reported at amortized cost. The City's investment in the State Treasurer's Pool has a fair value equivalent to the value of the pool shares. This pool is administered by the State of Utah and is regulated by the Money Management Council under provisions of the Utah State Money Management Act. In all statements, the City considers all highly liquid investments(including restricted assets)that mature within ninety days or less when purchased to be cash equivalents. Interest rate swap The City entered into an interest rate swap(the "SID Swap)on December 3, 2003 in conjunction with the issuance of its $17,600,000 Adjustable Rate Demand Assessment Bonds(Gateway Project) Series 2003. During FY 2005, the interest rate swap was terminated and the assessment bonds were refunded. Since the Series 2003 Bonds and SID Swap payments were paid entirely from assessments on assessed properties within the Railyard Special Improvement District and the City did not pledge any assets or revenues for payments due under the Bonds or the SID Swap other than special assessment revenues collected from the Railyard SID,the City did not record any gain or loss on the swap termination or the refunding of the bonds Inventories of supplies Inventories of supplies for the proprietary fund types are stated at the lower of cost (using the first-in first-out method)or market. In the proprietary funds, inventory items are considered expenses when used (consumption method). Depreciable capital assets Capital assets are valued at historical cost or estimated historical cost for assets where actual historical cost was not available. Donated capital assets are valued at their estimated fair market value on the date donated. The City has a capitalization threshold of$100,000 for infrastructure in the public right of way and $3,000 for all other assets. The City follows GAAP by capitalizing a portion of its interest costs (net of any interest earned on related interest bearing investments acquired with proceeds of related tax-exempt borrowings) as a cost of constructed property and equipment in enterprise funds. Net interest capitalized for the year ended June 30, 2005, was $2,289,661. Depreciation of capital assets is computed using the straight-line method over the following estimated useful lives: Buildings 35-60 years Building improvements 5-40 years Improvements other than buildings 25-35 years Machinery and equipment, including leased property under capital leases 3-20 years Infrastructure in public way; Roads signals, lights and bridges 20-50 years Water and sewer lines 13-100 years Construction in Progress is not depreciated until the asset is placed into service 54 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 Bond Issuance Costs and Amortization Amortization of bond issue costs and bond premiums or discounts are computed on the effective interest or straight-line method over the life of the related bonds. When the straight-line method is used, it approximates the effective interest method. Property taxes Ad valorem(based on value)property taxes constitute a major source of General Fund revenue. Taxes are levied through the passage of an ordinance in June of each year. The levy is applicable to only one year. All taxable property is required to be assessed and taxed at a uniform and equal rate on the basis of its fair market value. The State Tax Commission is required to assess certain statutorily specified types of property including public utilities and mining property. The county assessor is required to assess all other taxable property,and both entities are required to assess the respective types of property as of January 1,the assessment date. The County is then required to complete the tax rolls by May 15. By July 21, the county treasurer is to mail assessed value and tax notices to property owners. Then a taxpayer may petition the county board of equalization between August 1 and August 15 for a revision of the assessed value. Approved changes in assessed value are made by the county auditor by November 1 and on this same date the auditor is to deliver the completed assessment rolls to the county treasurer. Tax notices are mailed with a due date of November 30, and delinquent taxes are subject to a penalty. Unless the delinquent taxes and penalties are paid before January 15, a lien is attached to the property, and the amount of taxes and penalties bear interest from January 1 until paid. If after five years delinquent taxes have not been paid,the County sells the property at a tax sale. Tax collections are remitted to the City from the County on a monthly basis. With the July 1, 2000 adoption of Statement of Governmental Accounting Standards(SGAS)No. 33, more fully described below, The City changed its accounting for property taxes. SGAS No. 33, Accounting and Financial Reporting for Nonexchange Transactions, defines a nonexchange transaction as one in which "a government either gives value to another party without directly receiving equal value in exchange or receives value from another party without directly giving equal value in exchange." For property taxes, at January 1 of each year(the assessment date), The City has the legal right to collect the taxes, and in accordance with the provisions of the new statement, has now recorded a receivable and a corresponding deferred revenue for the assessed amount of those property taxes as of January 1,2005. Interfund transactions In the normal course of its operations, the City has various transactions between funds. Various City funds provide a number of services such as administrative,fleet maintenance,and information processing to certain other City funds. Charges are treated as revenues in the fund providing the service and as operating expenses in the fund receiving the service(see note 9). Transfers are recognized as transfers in and out, respectively, by the funds receiving and providing the transfer. Short-term payables are shown as due to/from other funds. Long-term payables are shown as advances to/from other funds. Long-term liabilities Long-term liabilities that will be financed from governmental funds are accounted for in the governmental activities portion of the government-wide statements,while those of proprietary funds are accounted for in their respective funds. Use of Fund Balance When both restricted and unrestricted fund balance is available to use for expenditure appropriation, The City's policy is to use restricted fund balance first. Net Assets The City's net assets are classified as follows: (1)Invested in capital assets, net of related debt, which consists of the total investment in capital assets, net of accumulated depreciation and reduced by the outstanding debt 55 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 obligations related to those assets. To the extent debt has been incurred, but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt; (2) Restricted for capital projects are amounts that are restricted by debt covenants to be expended for capital assets; (3) Restricted for debt service consists of that portion of net assets that is restricted by debt covenants for debt service; (4) Unrestricted net assets consist of everything else that does not meet the criteria above. Land and buildings held for resale The cost of land and buildings held for resale in the Housing Loans Fund (special revenue fund), and Redevelopment Agency (enterprise fund), are capitalized until the related property is subsequently sold. Land and buildings held for resale are carried at the lower of cost, market, or committed sales price. Costs of buildings and improvements that management determines are not recoverable are expensed. Gains and losses on dispositions of land and buildings held for resale are included in the operating statement. Use of Estimates in Preparing Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the management of the City to make estimates and assumptions that affect the reported amounts of assets and liabilities. Estimate use also requires the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Total columns The total columns shown on the accompanying fund financial statements are mathematical totals only and do not eliminate inter-fund transactions or include other entries required to present consolidated financial statements. The government-wide financial statements do, however, eliminate most inter-fund transactions and the double counting of revenues and expenses. They are therefore much closer to the consolidated financial statements presented in private sector accounting. 2. Cash,Cash Equivalents and Investments The City maintains a cash pool and an investment pool that are available for use by all funds. Each fund type's portion of these pools is included in the combined balance sheet as "Cash and cash equivalents" and "Investments". Also included are investments separately held by several of the City's funds. It is the policy of Salt Lake City Corporation to invest public funds in accordance with the principles of sound treasury management and in compliance with state and local laws, regulations, and other policies governing the investment of public funds,specifically,according to the terms and conditions of the Utah State Money Management Act of 1974 and Rules of the State Money Management Council as currently amended (the "Act"), and the City's own written investment policy. Broker/dealers and agents who desire to become certified dealers must be certified by the Director of Securities Division of the State of Utah's Department of Commerce and meet the requirements of the Utah Money Management Council. (Rule 16 of the Act.) Only qualified depositories as certified by Utah's Commissioner of Financial Institutions are eligible to receive and hold deposits of public funds. (Rule 12 of the Act.) The Utah Money Management Council quarterly issues a list of certified dealers, and a list of qualified depositories authorized by state statute to conduct transactions with public treasurers. Transactions involving authorized deposits or investments of public funds may be conducted only through Issuers of securities authorized by Section 51-7-11(3), qualified depositories included in the current state list, or certified dealers included in the current state list. All securities purchased from a certified dealer are required to be delivered to the custody of the City Treasurer or to the City's safekeeping bank. The City may place public money in investments/deposits authorized by the Money Management Act (U.C.A. 51-7-11). The Treasurer shall ensure that all purchases and sales of securities are settled within 15 days of the 56 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 trade date. In general these investments can be any of the following subject to restrictions specified in the Act: (1) Obligations of the U.S. Treasury and most Government-Sponsored Agencies; (2)Commercial paper that is classified as "first tier" by two nationally recognized statistical rating organizations, one of which must be Moody's Investors service or Standard& Poor's; (3)Bankers Acceptances; (4)Publicly traded fixed rate corporate obligations rated"A"or higher, or the equivalent of"A: or higher,by two nationally recognized statistical rating organizations; (5) Certain variable rate securities and deposits with the same rating requirements as the fixed rate corporate obligations; (6) Deposits with the State Public Treasurer's Investment Pool; (7) Certain fixed rate negotiable deposits with a qualified depository or through a certified dealer; (8) Qualifying repurchase agreements; (9) Open-end managed money market mutual funds; (10)Utah State Treasurer's Investment Pool; (11)Investments with deferred compensation plan administrators. The City did not enter into any reverse repurchase agreements during the year ended June 30,2005. City policy provides that not more than 25% of total City funds or 25% of the qualified depository's allotment, whichever is less, can be invested in any one qualified depository. Not more than 20% of total City funds may be invested in any one certified out-of-state depository institution. However,there shall be no limitation placed on the amount invested with the Utah State Treasurer's Investment Pool (State Treasurer's Pool) and other money market mutual funds, provided that the overall standards of investments achieve the City's policy objectives. The City's deposits are insured up to $100,000 per account by the Federal Deposit Insurance Corporation. Deposits above the $100,000 per account are exposed to custodial credit risk. Custodial credit risk for deposits is the risk that in the event of a bank failure,the City's deposits may not be recovered. The bank balance of the Primary Government's deposits totaled$172,897. Of this amount,$146,098 was insured and the remaining$26,799 was uninsured and uncollateralized. The bank balance of the Library component unit totaled $56,780, all of it fully insured by federal depository insurance. The City has no formal policy regarding deposit credit risk. Investments - The City Treasurer may take physical delivery of securities or may use a qualified depository bank for safekeeping securities. An account with a money center bank may be maintained for the purpose of settling investment transactions, safekeeping and collecting those investments. A safekeeping receipt issued by a qualified depository supports repurchase agreements with qualified depositories; otherwise, the securities are held in the custody of the City Treasurer or the City's safekeeping bank or trust company. Deposit receipts issued by the State Treasurer's Office support investments in the State Treasurer's Pool. All funds pledged or otherwise dedicated to the payment of interest and principal of bonds issued by the City are invested in accordance with the terms and borrowing instruments applicable to such bonds. City policy also provides that the remaining term to maturity of an investment may not exceed the period of availability of the funds invested. The investment of City funds cannot be of a speculative nature. Custodial credit risk for investments is the risk that, in the event of a failure of the counter party,the City will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The City does not have a formal policy for investment custodial credit risk. Of the total$409,125,852 invested by the City, $14,753,513 was exposed to custodial credit risk. The entire amount exposed was held in the City's name by the counterparty. The Library Component unit had$294,091 exposed to custodial credit risk with the entire amount held in the Library's name by the counter party. The City has no formal policy with respect to investment custodial credit risk. Investment interest rate risk is the risk that changes in interest rates of debt investments will adversely affect the fair value of an investment. The City currently has no policy regarding investment interest rate risk. The table on the following page shows the maturities of the City's investments. 57 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 Fair Investments maturities(in years) Value Less than I I -5 6- 10 More than 10 Primary government Debt Securities U.S.Agency Notes $ 10,932,620 $ - $ 10,932,620 $ - $ - U.S.Treasury Bills 1,584,068 649,806 934,262 - - Money market mutual funds 45,473,360 45,473,360 - Repurchase agreements 2,236,828 2,236,828 - - - 60,226,876 $ 48,359,994 $ 11,866,882 $ Other investments Investment in State Treasurer's Pool 348,898,976 Total investments,primary government $ 409,125,852 Component units: Debt Securities- Repurchase agreements $ 294,091 $ 294,091 $ - $ Other investments Investment in State Treasurer's Pool 5,032,923 Total investments,component units $ 5,327,014 Investment credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Salt Lake City's policy is to follow the previously described Utah Money Management Act to reduce exposure to investment credit risk. The City's rated debt investments are shown in the table below using Standard and Poor's rating scale. The Library Component unit did not have any investments subject to investment credit risk. Fair Quality Ratings Value AAAm AAm A 1 m Unrated Primary government: Debt Securities U.S.Agency Notes $ 10,932,620 $ 10,932,620 $ - $ - $ - Money market mutual funds 45,473,360 39,718,677 - - 5,754,683 Repurchase agreements-underlying Money market mutual mutual funds 2,236,828 - - 2,236,828 Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment is a single issuer. Salt Lake City's policy is to follow the Rules of the Money Management Council. Rule 17 of the Money Management Council limits investments in a single issuer of commercial paper and corporate obligations to between 5% and 10% depending upon the total dollar amount held in the portfolio. The City had debt securities investments as June 30, 2005 with more than 5% of total investments at US Bank. The total invested at this institution was 5.52% A summary of restricted and unrestricted cash, cash equivalents and investments at June 30,2005 is on the following page. 58 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 Primary Component Government Units Unrestricted cash and cash equivalents $ 358,654,030 $ 348,609 Restricted cash and cash equivalents 48,279,844 - Unrestricted investments 1,584,068 5,032,923 Restricted investments 1,133,727 - Total $ 409,651,669 $ 5,381,532 Deposits $ 396,225 $ 53,143 Investments 409,125,852 5,327,014 Cash on hand 129,592 1,375 Total $ 409,651,669 $ 5,381,532 Included in both deposits and investments are cash equivalents with an original maturity of ninety days or less. For statement of cash flows and balance sheet purposes, only those items with maturities of ninety days or less when purchased are considered cash and cash equivalents. The balance sheet amount for unrestricted cash and cash equivalents has been reduced by a total $266,939 in pooled cash overdraft. The funds with cash overdrafts were Community Development Operating special revenue fund ($20,777) and Information Management Services internal service fund($246,162). The Capital Projects Fund shows the receivable relating to the cash overdraft in other funds. 3. Loans Receivable The Housing Loans Fund (a special revenue fund) provides loans to residents for improvements in existing housing within designated project areas. Some loans are payable in monthly installments,others are due on sale or transfer of ownership of the related property, and other loan payments are deferred. These loans have interest rates ranging from 0%to 7% and are collateralized by property or a letter of credit. Housing loans receivable as of June 30, 2005 were$29,293,112,net of$52,488 estimated as uncollectible. The Grants Operating Fund(a special revenue fund)provides loans for commercial construction. The loans receivable at June 30, 2005 were $12,439,682 net of an allowance for uncollectible loans of$4,000,000. Most of these loans are payable in monthly or quarterly installments. One loan has no payment due until the related housing project realizes an operating profit,though interest continues to accrue. These loans have interest rates ranging from 0% to 8.5%and are collateralized by trust deeds on property with the City as a second mortgage holder or by equipment and other assets. The Redevelopment Agency (RDA - an enterprise fund) provides housing loans to homeowners and construction loans to contractors within a designated area of the City. These loans total $23,823,750 at June 30, 2005, are payable in monthly installments, bear interest from 0%to 7.0%and are collateralized by property,letters of credit or restricted cash accounts. 4. Restricted Assets The bond resolutions require all bond proceeds and revenue earned on bond proceeds to be restricted to the payment of bond construction projects specified within the resolutions, the payment of bond principal and interest, and the renewal and replacement of specified property and equipment. Certain Water Utility certificates of deposit are also restricted for consumer deposits and for contributions for reservoir and supply line construction. Restricted assets in the Department of Airports (an enterprise fund) are restricted under the revenue bond resolution for the purpose of paying bond principal and interest and for construction of specific Airport facilities. Also, certain assets are restricted for operating and maintenance costs, and for renewal and replacement of property and equipment. 59 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 Restricted assets in the Redevelopment Agency(an enterprise fund)are restricted by provision of bond resolutions. Restricted assets in the Demolition, Weed and Forfeiture special revenue fund are restricted while awaiting the adjudication of Police Department asset seizures related to criminal cases. Restricted assets in the Housing Loans Fund (a special revenue fund) are restricted for use in accordance with grant or financing provisions. Restricted assets in the Capital Projects Fund are restricted debt proceeds to be used for capital construction. Restricted assets in the Water, Sewer and Storm Water Utilities (enterprise funds) are restricted by bond resolution or contractual agreement for debt service. Restricted assets in the Fleet Management internal service fund are assets held by a trustee and are restricted for the purchase of capital equipment funded by debt proceeds.. Restricted assets in the Other Improvement debt service funds are restricted for debt service. 60 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 5. Capital Assets The following two tables summarize the changes in capital assets for governmental and business-type activities during the year ended June 30,2005: Primary Government Beginning Ending Balance Increases Decreases Balance Governmental activities: Capital assets,not being depreciated: Land $ 165,009,373 $ 1,067,968 $ (747,500) $ 165,329,841 Construction in progress 18,674,412 12,376,092 (16,795,877) 14,254,627 Total capital assets,not being depreciated 183,683,785 13,444,060 (17,543,377) 179,584,468 Capital assets,being depreciated Buildings 205,801,758 5,878,100 - 211,679,858 Improvements other than buildings 29,735,954 8,164,181 - 37,900,135 Machinery and equipment 68,338,527 8,570,258 (2,998,090) 73,910,695 Infrastructure 215,433,480 10,314,474 (5,799,442) 219,948,512 Total capital assets being depreciated 519,309,719 32,927,013 (8,797,532) 543,439,200 Less accumulated depreciation: Buildings 31,407,638 4,450,953 - 35,858,591 Improvements other than buildings 12,464,697 1,234,522 - 13,699,219 Machinery and equipment 44,957,115 7,082,488 (2,733,913) 49,305,690 Infrastructure 90,181,787 6,905,546 (5,799,441) 91,287,891 Total accumulated depreciation 179,011,237 19,673,509 (8,533,354) 190,151,391 Total capital assets,being depreciated net 340,298,482 13,253,504 (264,178) 353,287,809 Governmental activities capital assets,net $ 523,982,267 $26,697,564 $(17,807,555) $ 532,872,277 Business-type activities Beginning Ending Balance Increases Decreases Balance Capital assets,not being depreciated: Land $ 84,216,020 $ 1,150,876 $ (11,446) 85,355,450 Construction in progress 74,082,363 76,319,395 (10,805,485) 139,596,273 Total capital assets,not being depreciated 158,298,383 77,470,271 (10,816,931) 224,951,723 Capital assets,being depreciated Buildings 394,194,978 7,682,822 - 401,877,800 Improvements other than buildings 931,813,472 31,257,450 (2,727,228) 960,343,694 Machinery and equipment 124,485,964 11,111,933 (2,563,071) 133,034,826 Total capital assets being depreciated 1,450,494,414 50,052,205 (5,290,299) 1,495,256,320 Less accumulated depreciation: Buildings 160,361,977 13,713,937 - 174,075,914 Improvements other than buildings 334,526,876 30,609,297 (2,720,719) 362,415,454 Machinery and equipment 75,941,254 8,969,462 (2,163,161) 82,747,555 Total accumulated depreciation 570,830,107 53,292,696 (4,883,880) 619,238,923 Total capital assets,being depreciated net 879,664,307 (3,240,491) (406,419) 876,017,397 Business-type activities capital assets,net $ 1,037,962,690 $74,229,780 $(11,223,350) $ 1,100,969,120 Depreciation expense for the year ended June 30,2005 for governmental and business type activities is shown in the table on the following page. 61 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 5. Capital Assets -Continued Depreciation Expense Governmental activities: General Government City Council 6,209 Mayor 3,438 City Attorney 11,298 Management Services 2,649,884 Fire 357,806 Police 992,537 Community and Economic Development 51,741 Public Services 1,493,691 Infrastructructure Depreciation 6,905,546 Capital assets held by the government's internal service funds are charged to the various functions based on their usage of the assets 7,201,359 Total depreciation expense••governmental activities $ 19,673,509 Business-type activities: Water 5,407,203 Airport Authority 39,435,645 Sewer 3,621,363 Redevelopment Agency 1,733,120 Other activities 3,095,365 Total depreciation expense-.business-type activities $ 53,292,696 Capital asset information for the City's component unit,the Salt Lake City Library shows as follows: Component Unit-Library Beginning Ending Balance IncreasesDe creases Balance Capital assets,not being depreciated: Land $ 590,554 $ - $ - 590,554 Total capital assets,not being depreciated 590,554 - - 590,554 Capital assets,being depreciated Buildings 8,127,288 40,332 - 8,167,620 Improvements other than buildings 317,116 - - 317,116 Machinery and equipment 18,690,520 1,742,621 (1,312,834) 19,120,307 Total capital assets being depreciated 27,134,924 1,782,953 (1,312,834) 27,605,043 Less accumulated depreciation: Buildings 2,233,744 402,651 2,636,395 Improvements other than buildings 227,366 15,974 243,340 Machinery and equipment 8,010,760 2,701,809 (1,312,834) 9,399,735 Total accumulated depreciation 10,471,870 3,120,434 (1,312,834) 12,279,470 Total capital assets,being depreciated net 16,663,054 (1,337,481) - 15,325,573 Component unit capital assets,net $ 17,253,608 $ (1,337,481) $ - $ 15,916,127 6. Long-term obligations Changes in long-term obligations Revenue bonds and other long-term liabilities directly related to and intended to be paid from proprietary funds are included in the accounts of such funds. All other long-term obligations of the City are accounted 62 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 for in the Governmental Activities of the government-wide statements. The following table summarizes changes in long-term obligations for the year ended June 30,2005. Amount of Balance Balance Original Issue June 30, June 30, Due Within Long Term Debt (bonds only) 2004 Additions Retirements 2005 One Year Governmental Activities General obligation bonds-1999 $ 81,000,000 $ 21,110,000 $ - $ 3,095,000 $ 18,015,000$ 3,235,000 General obligation bonds-2001 22,650,000 17,110,000 - 2,135,000 14,975,000 2,220,000 General obligation bonds-2002 48,855,000 47,949,110 - 179,027 47,770,083 155,000 General obligation bonds-2004 11,300,000 11,391,864 - 396,838 10,995,026 435,000 Special improvement bonds 21,453,000 19,054,000 - 17,650000 1,404,000 311,000 Sales tax revenue bonds-2004 17,300,000 - 16,919,190 1,136,550 15,782,640 1,600,000 Sales tax revenue bonds-2005 47,355,000 - 47,138,512 1,572 47,136,940 1,425,000 Motor Fuel Excise tax revenue bonds-1999 5,155,000 3,150,000 - 570,000 2,580,000 600,000 General GE Capital Finance Note 275,494 - 275,494 - - General Long-term compensation liability 14,420,079 6,689,059 6,184,467 14,924,671 1,456,976 Municipal Building Authority-1993A 29,610,000 16,337,011 - 16,337,011 - - Municipal Building Authority-1999A 13,595,000 11,313,194 - 11,313,194 - - Municipal Building Authority-1999B 24,935,000 24,678,369 - 24,678,369 * - - Municipal Building Authority-2001 11,855,000 11,506,876 - 11,506,876 - - Loan financing notes 10,981,058 1,384,452 650,723 11,714,787 487,337 Internal Service Fund Debt: ISF GE Capital Finance Note 6,957,115 1,914,067 3,266,081 5,605,101 2,208,784 ISF Long-term compensation liability 1,092,151 591,944 465,499 1,218,596 163,213 Total Governmental long-term debt $ 217,326,321 $ 74,637,224 $ 99,841,701 $ 192,121,844$ 14,297,310 Business-type Activities Water 1993 series $ 11,110,130 $ 3,346,870 $ - $ 3,346,870 $ - $ - Water 1997 Series 24,515,000 22,344,194 - 8,779,875 13,564,319 1,330,000 Sewer 1993 series 2,389,870 724,764 - 724,764 - - Sewer 2004 series 23,525,800 25,341,805 - 818,532 24,523,273 760,000 Storm 2004 Series 7,429,200 8,002,675 - 258,484 7,744,191 240,000 Water 2005 Series 11,075,000 - 11,460,153 2,731 11,457,422 350,000 Airport 2004A series 35,000,000 30,756,077 - 1,418,651 * 29,337,426 2,275,000 Airport 2004B series 26,875,000 24,106,785 - 1,189,731 ' 22,917,054 1,750,000 Redevelopment Agency 1990 tax increment 24,268,008 13,533,008 - - 13,533,008 777,586 Redevelopment Agency 1997A tax increment 16,505,000 8,223,103 - 1,527,521 6,695,582 1,570,000 Redevelopment Agency 1998A tax increment 24,600,000 13,723,196 - 2,512,017 11,211,179 2,595,000 Redevelopment Agency 2002a tax increment 16,190,000 11,501,602 - 2,642,169 8,859,433 450,000 Enterprise GE Capital Finance Note 1,974,672 - 807,989 1,166,683 566,664 Enterprise Notes Payable 939,892 - 219,088 720,804 231,137 Ent.Long-term compensation liability 7,726,145 4,988,603 4,763,737 7,951,011 1,195,707 Total Business-type long-term debt 172,244,788 16,448,756 29,012,159 159,681,385 14,091,094 Total long-term debt S 389,571,109 $ 91,085,980 $ 128,853,860 $ 351,803,229$ 28,388,404 *(amortization of discount/deferred loss) (Continued) 63 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 6. Long-term obligations-(continued) Amount of Balance Balance Original Issue June 30, June 30, Due Within Long Term Debt (bonds only) 2004 Additions Retirements 2005 One Year Component Units Lib Long-term compensation liability 332,253 - 1,933 330,320 54,369 Total component unit long-term debt $ 332,253 $ - S 1,933 $ 330,320 $ 54,369 The annual debt requirements to maturity, including principal and interest,as of June 30,2005 are listed in the following tables for debt with regularly scheduled payments: Year Revenue Bonds General Obligation Bonds Ending Governmental Activities Business Activities Governmental Activities June 30 Principal Interest Principal Interest Principal Interest 2006 $ 3,625,000 $ 2,303,604 $ 12,097,586 $ 6,159,192 $ 6,045,000 $ 4,700,531 2007 3,655,000 2,708,860 10,944,482 5,737,605 6,315,000 4,410,081 2008 3,720,000 2,646,744 10,939,414 5,432,744 6,620,000 4,086,343 2009 3,875,000 2,489,812 13,934,776 8,759,664 6,875,000 3,770,257 2010 3,305,000 2,330,325 9,318,952 8,574,309 7,200,000 3,440,043 2011-2015 18,710,000 9,433,838 50,392,798 40,506,417 29,055,000 12,168,990 2016-2020 23,630,000 4,434,000 35,515,000 4,491,766 26,755,000 4,293,684 2021-2025 5,465,000 136,625 11,455,000 848,416 3,005,000 356,840 Subtotal 65,985,000 26,483,808 154,598,008 80,510,113 91,870,000 37,226,769 Less discount and deferred loss 485,420 - 4,755,121 - 114,891 - Net debt $ 65,499,580 $ 26,483,808 $ 149,842,887 $ 80,510,113 $ 91,755,109 $ 37,226,769 Year Special Assessment Bonds Other Debt Ending Governmental Activities Governmental Activities Business Activities June 30 Principal Interest Principal Interest Principal Interest 2006 $ 311,000 $ 46,654 $ 2,696,121 $ 851,403 $ 797,801 $ 64,073 2007 236,000 35,923 2,481,810 741,305 631,215 36,449 2008 218,000 27,269 1,629,486 645,070 458,471 15,297 2009 120,000 21,407 925,403 579,821 - - 2010 123,000 17,486 595,835 535,546 - - 2011-2015 396,000 23,943 3,333,436 2,112,992 - - 2016-2020 - - 3,708,512 1,029,335 - - 2021-2025 - - 1,903,816 187,052 - - 2026-2030 - - 45,469 2,274 - - Total $ 1,404,000 $ 172,682 $ 17,319,888 $ 6,684,798 $ 1,887,487 $ 115,819 64 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 Compensation Liabilities(Compensated Absences) Vacation leave, compensatory leave, and the portion of sick leave that will eventually be paid are recognized as liabilities as they are earned. In the event of termination or retirement, an employee is reimbursed for unused accumulated vacation. Employees participating in Plan A are reimbursed for 25% of unused accumulated sick leave upon retirement, while those employees participating in Plan B are reimbursed for 50% of the earned balance of personal leave upon separation or retirement. Upon retirement any unused severance account balance is reimbursed at 100%.The liability for accumulated compensated absences at June 30,2005 is reported in the individual funds except for the long-term portion relating to the governmental funds,which is recorded in the Governmental Activities column of the Government-wide Statements. Compensated absences have traditionally been liquidated by the fund to which the employee's salary is charged. General Obligation Bonds On March 1, 2001, The City issued$22,650,000 in General Obligation Refunding Bonds Series 2001 with a final maturity in fiscal year 2011 and interest rates of 4.00 to 5.50 percent. The bonds were issued to fully pay all 1986 General Obligation bonds, including accrued interest, with maturity dates after June 15, 2001. The balance of the 1991 bonds with maturity dates after June 15, 2001 totaled$22,935,000 and the bond proceeds, including premium and accrued interest totaled$23,770,390. The Series 2001 bonds are not subject to call and redemption prior to maturity. On October 1, 1999,The City issued general obligation bonds in the amount of$81,000,000 at interest rates of 5.00 to 5.75 percent and a final maturity date in fiscal 2019. The bonds were issued to demolish vacant courts and jail complexes, construct a new 200,000 square foot main library building, an adjacent plaza and an underground parking garage,make related improvements on the same block and replace a boiler system that serves current and future buildings on the block and on the block directly east. Part of the proceeds were used to defease a portion of the MBA Series 1993A bonds that were used to improve part of the demolished facilities (see below for a more detailed description of the defeasance). The bonds maturing on or prior to June 15, 2010 are not subject to optional redemption prior to maturity, while those maturing on or after June 15, 2011 are subject to redemption at the election of the City on June 15, 2010 and on any date thereafter, prior to maturity. The redemption price is equal to 100% of the principal amount plus accrued interest on the bonds redeemed.. As noted below a portion of the 1999 bonds were defeased on August 7,2002. The remaining balance of the defeased bonds at June 30,2005 was$45,355,000. On August 7, 2002, The City issued General Obligation Bonds, Series 2002 with a par amount of $48,855,000, an original issue premium amount of$5,236,688 and issuance cost of$312,670, netting to $53,779,018. The proceeds of this bond were used for: (1) $3,106,376 for city construction and (2) $50,672,642 deposited in an irrevocable escrow account with an escrow agent to provide for all future debt service payments on the affected $45,355,000 portion of the 1999 bonds. As a result, $45,355,000 is considered to be defeased and the liability for those bonds was removed from the balance sheet. The advance refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of$5,317,642. This difference, reported as a reduction in bonds payable is charged as interest expense through June 30, 2019 using the effective interest method. The Series 2002 General Obligation Bonds maturing on or prior to June 15,2017,are not subject to call and redemption prior to maturity. Those maturing on or after June 15,2018 are subject to redemption at the option of the City on or any date after June 15, 2012. The redemption price is 100%plus accrued interest to the redemption date. On April 22, 2004, the City issued General Obligation Bonds Series 2004A (Series 2004A)with a par amount of$11,300,000. The bonds were issued with a premium of$98,956 and the City paid $169,463 in issue costs, resulting in net proceeds of$11,229,493. The purpose of the bonds is to make improvements at Hogle Zoo and Tracey Aviary. The improvements at the zoo include an expansion of the elephant and rhinoceros exhibit along with the expansion and renovation of the feline building. The Tracey Aviary project consists of the acquisition and construction of an outdoor exhibit that includes yards, an enclosed walk-through flight cage, holding spaces and viewing areas. Bonds maturing on or prior to June 15,2014 are not subject to call and redemption prior to maturity. Bonds maturing on or after June 15, 2015 are subject to redemption at the option of the City on June 15, 2014 or on any date thereafter, in whole or in part, as selected by the City at the redemption price of 100% of the principal amount plus any accrued interest to the redemption date. 65 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 Special Improvement Bonds with Governmental Commitment Principal and interest on special improvement bonds are paid from special assessment collections. A separate fund, the Special Improvement Debt Service Fund, has been established to contain the receipts derived by the City from the special assessments levied upon the property included in the special improvement districts together with interest on the assessments and if necessary additional funds transferred by the City to the debt service fund. Under the terms of the special improvement bond resolutions and state law,the City has agreed to maintain a special improvement guaranty account for the benefit of the bondholders. This account is to receive a tax levy of.0002, unless the account is equal to or greater than 10% of all outstanding special improvement bonds issued after April 1, 1990. The special improvement guaranty account is $472,589 at June 30, 2005. The City is legally obligated to transfer funds from the guaranty account if sufficient debt service funds are not available. The City is also committed to assume responsibility for the debt in the event of default. These bonds bear rates between 1.75 and 5.40 percent and have a final maturity in fiscal year 2013. Special Improvement bonds without Governmental Commitment On December 3, 2003 the City issued $17,600,000 in Adjustable Rate Demand Assessment Bonds (Gateway Project), Series 2003. These bonds were issued to finance construction of a roadway with sidewalk, curb and gutter in the Gateway development area and are secured only by assessments levied by the City on the property with the assessment district. During FY 2005,the Adjustable Rate Demand Assessment Bonds were fully refunded. Motor Fuel Bonds On December 1, 1999, the City issued $5,155,000 Motor Fuel Excise Tax Revenue Bonds that bear interest at 4.45 to 5.15 percent and have a final maturity in fiscal year 2009. The 1999 series bonds, which are not subject to redemption,were issued to finance the construction or repair of streets located within the corporate boundaries of Salt Lake City, Utah. The City has pledged motor and special fuel excise taxes(Class C road funds)as collateral for these revenue bonds. Sales Tax Revenue Bonds On September 2, 2004, the City issued the Series 2004 Adjustable Rate Sales Tax Revenue Refunding Bonds in the par amount of$17,300,000. The bonds have a final maturity date if fiscal 2015 and bear interest at a variable rate with a maximum of 15 percent. There was no original issue premium or discount associated with the sale. The purposes of the sale were to defease and fully refund the then$16,420,000 outstanding balance of the Series 1993A Municipal Building Authority Lease Revenue Bonds. Proceeds of the Series 2004 sales tax bonds also paid accrued interest on the lease revenue bonds and $253,222 in costs related to the issuance of the 2004 sales tax bonds. Because interest on the Series 2004 bonds is variable,the economic could vary from a gain of approximately$2,100,000 to a loss of approximately $3,400,000. The cash flow of debt service payments could vary from a savings of approximately $2,000,000 to an added amount of approximately$7,600,000. The City incurred a deferred loss of$380,810 that will be amortized over what would have been the remaining life of the series 1993 lease revenue bonds. On June 21, 2005, the City issued the Series 2005A Sales Tax Revenue Refunding Bonds in the par amount of$47,355,000 with interest rates of 3.00% to 5.00% and a fmal maturity date in fiscal 2021. The bonds were sold at a premium of$4,011,338. The proceeds were used to defease the remaining outstanding principal balances of the Series 1999A, 1999B and 2001 Lease Revenue Bonds and to pay issuance costs of$580,120. The City realized an economic gain of approximately $1,900,000 and reduced the total debt payments by approximately $2,800,000. The City recognized a deferred loss of$4,227,826 that will be amortized over the remaining life of the series 2005A bonds. At June 30, 2005, the remaining outstanding balances of the series 1999A, 1999B and 2001 lease revenue bonds are $10,795,000,$24,935,000 and 11,395,000,respectively, 66 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 Water and Sewer Utility Bonds and Debt The bond resolution approved in conjunction with the issuance of the Salt Lake City Water and Sewer Revenue Bonds provides,among other things,that certain funds be established and that certain accounting procedures be followed. Under the terms of the resolution, the City irrevocably pledged the net revenues of the Water and Sewer Utilities to the payment of the bonds and covenanted that rates will be established to yield net revenues,as defined,equal to at least 1.25 times the debt service to become due in the next fiscal year. The Series 1993 Water and Sewer Revenue Refunding Bonds' (rates from 2.90 to 5.70 percent and final maturity in fiscal 2013) principal purpose was to refund a portion of the Series 1986 Bonds in the amount of $9,635,000, maturing on or after February 1,2001 through February 1,2005,with an average interest rate of 7.5%. The series 1993 bonds were defeased on May 1,2005 (see below). The balance outstanding on June 30,2005 of these bonds was$1,042,228. On July 19, 1994, the Utilities issued $14,000,000 in Water, Sewer, and Storm Water Improvement Revenue Bonds with interest rates from 3.50%to 3.65 percent and a final maturity in fiscal 2015 . The principal purpose of these bonds is to finance construction of Water Utility capital improvement projects. The bonds were discounted by $134,399 and incurred bond issue costs of$235,634 resulting in net proceeds of$13,629,967. A portion of the 1994 bonds was defeased on November 1, 1997. The defeased amount of$7,960,000 was outstanding on June 30,2005. On November 1, 1997,the Water Utility issued$24,515,000 in Revenue Bonds. The principal purpose of the Series 1997 bonds was to defease a portion of the 1991 and 1994 Series Bonds and to fmance the acquisition of certain improvements to the water, sewer, and storm water system The bonds have rates from 4.00 to 5.25 percent and a final maturity during fiscal 2017. Net proceeds (net of discount of $1 35,465 and payment of bond issue costs of $267,188) amounted to$24,112,347. In addition to the remaining balance of the defeased 1994 bonds noted above, the defeased 1991 bonds had a June 30,2005 outstanding balance of$2,070,000. On May 1,2005,a portion($7,805,000)of the 1997 bonds was defeased. On June 30,2005,the entire$7,805,000 was outstanding. On February 1,2004,the Sewer and Storm-water Utilities issued$30,955,000 in Revenue Bonds. The principal purpose of the Series 2004 bonds is to fmance a major upgrade at the Sewer Treatment Plant and a new storm system trunk line. Net proceeds (after payment of bond issue costs of $381,233) was $33,344,480, including a $2,389,480 premium. On May 1, 2005, the Water Utility issued $11,075,000 in revenue bonds that bear interest at 3.50 — 5.00 percent and have a final maturity date in Fiscal 2017. The sole purpose of the Series 2005 bonds is to fully defease the remaining balance of the Series 1993 Water and Sewer bonds and a portion of the Series 1997 Water Utility bonds. The Series 2005 revenue bonds include a deferred loss of$366,980 on the refunding and an original issue premium of $752,133. The Water Utility reduced total aggregate debt service by $557,247 and obtained an economic gain of $464,673. Department of Airports Bonds The bond resolution approved in conjunction with the issuance of the Airport revenue bonds provides, among other things,that certain funds be established and certain accounting procedures be followed. Under the terms of this resolution, the City irrevocably pledged the net revenues of the City airports to the payment of the bonds and covenanted that rates will be established to yield net revenues, as defined,equal to at least 1.25 times the debt service to become due in the next fiscal year. On February 20, 2004, the Airport issued $35,000,000 in Adjustable Rate Revenue Refunding Bonds, Series 2004A(the Series 2004A Bond). The principal purpose of the Series 2004A Bond was to refund in full the Series 2000A and 2001 bonds. The refunding created a deferred loss of$1,237,397 due to unamortized issue and discount costs as well as unamortized interest income and expense generated by a terminated interest rate swap arrangement. The deferred loss and the swap income and expense will be amortized using the effective interest rate method over the life of the 2004A Bond. The capitalized issuance costs associated with the issuance of the Series 2004A bonds were$492,482 67 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 and are being amortized over the life of the bond. There was no premium or discount associated with the issuance of the Series 2004A Bond. On February 20, 2004, the Airport issued$26,875,000 in Adjustable Rate Airport Revenue Refunding Bonds, Series 2004B (the "Series 2004B Bonds"). The principal purpose of the 2004B Bonds was to refund in full the Series 1993B Revenue Refunding Bonds. This refunding created a deferred loss of$2,763,856 that will be amortized using the effective interest rate method over the life of the 2004B bonds. The capitalized issuance costs associated with the issuance of the 2004B bonds were$877,453 and are being amortized over the life of the bonds. Municipal Building Authority Bonds In June 1993, the Municipal Building Authority issued $29,610,000 in Lease Revenue Bonds (1993A) at rates from 2.75 to 6.00 percent with a final maturity date in fiscal 2015. Of the total proceeds, $6,084,376 was used to partially defease the February 1988 and April 1990 issues. The defeased February 1988 bonds had a maturity date of October 15, 2002 and were paid at that time. The defeased April 1990 bonds had a maturity date of October 15, 2000, and were redeemed at that time. The original bonds were issued to purchase streetlights, garbage trucks and cans, telephone equipment,purchase and renovate a building and parking structures,and construct the Steiner Aquatic Center. A portion ($410,000) of the 1993A bonds was defeased with part of the proceeds of the $81,000,000 1999 General Obligation Bonds. One of the purposes for the issuance of the 1993A bonds was to renovate a parking structure. That parking structure was demolished to make way for a new building and therefore necessitated the defeasance of the affected portion of the 1993A bonds. On September 2, 2004, the remaining $16,420,000 principal balance of the 1993A bonds were defeased by the Series 2004 Sales Tax Revenue Bonds and then fully refunded on October 1,2004. On July 1, 1999 the Municipal Building Authority issued $13,595,000 in Lease Revenue and Refunding Bonds (Series 1999A). The Authority issued the bonds to (1) defease and refund all of the $4,095,000 outstanding Series 1991A bonds, (2) purchase a City office building, the land on which the building is located, and finance improvements to the building,(3) prepay a lease relating to golf course equipment used at a City golf course and (4) pay costs related to the issuance of the 1999A bonds. They have interest rates from 3.75 to 5.40 percent and a final maturity during fiscal year 2020. On June 21, 2005, the Series 1999A bonds were defeased by the Series 2005A Sales Tax Revenue Refunding Bonds. The outstanding balance of the defeased 1999A bonds on June 30, 2005 was $10,795,000. On November 1, 1999 the Municipal Building Authority issued $24,935,000 in Lease Revenue Bonds Series 1999B (Series 1999B) at rates from 5.00 to 5.75 and a final maturity during fiscal year 2020. The principal purpose for issuing these bonds is (1) construct and equip an ice arena facility, the Steiner Ice Sheet, (2) add to and improve an existing fire training facility and(3)acquire and improve the land and facilities of a public park. On June 21, 2005, the Series 1999B bonds were defeased by the Series 2005 Sales Tax Revenue Bonds. The outstanding balance of the defeased 1999B bonds on June 30, 2005 was$24,935,000. On July 1, 2001, The Municipal Building Authority issued $11,855,000 in Lease Revenue Bonds, Series 2001. The proceeds of the bonds,net of a original issue discount in the amount of$133,107 are being used to: (1) Purchase and renovate a building to be used as the City's Justice Court Complex; (2) Remodel and refurnish an existing building that will be used as a police precinct; and(3)pay certain costs of issuance, fund a reserve,and make initial debt payments. These bonds were issued at rates from 4.00 to 5.20 percent and have a final maturity in fiscal 2021. On June 21, 2005,the Series 2001 bonds were defeased by the Series 2005A Sales Tax Revenue Bonds. The outstanding balance of the defeased 2001 bonds on June 30,2005 was$11,395,000. Redevelopment Agency Bonds The master indenture approved in conjunction with the issuance of Tax Increment Revenue Bonds provides, among other things, that certain funds are established and certain accounting procedures be followed. Under the terms of this indenture, the Redevelopment Agency irrevocably pledged the incremental property tax revenues and investment income of the Agency to the payment of the bonds and covenanted that the estimated annual tax increment revenues will be equal to at least 1.25 times the debt service to become due in the next fiscal year. 68 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 In December of 1990, the Redevelopment Agency as a participating member,remarketed$24,268,008 of Utah Municipal Finance Cooperative Local Government Revenue Bonds (Senior Lien Obligation)at rates from 6.10 to 7.35 percent. The bonds were remarketed as$10,735,000 current interest serial bonds due between March 1, 1994 and March 1, 2005 and $13,533,008 capital appreciation bonds due March 1, 2006 to March 1, 2015. The bonds are collateralized by and will be repaid with incremental property taxes received by the Redevelopment Agency. The serial bonds are subject to redemption on interest dates beginning March 1, 2001 in inverse order of maturity at 100% of the principal amount plus accrued interest. The capital appreciation bonds are not subject to redemption. On June 3, 2002, the outstanding balance of the serial bonds was fully refunded. The capital appreciation bonds have imputed interest as there is no payment of interest on any of the maturities until March 1, 2006. The amount accreted in Fiscal 2005 was $2,658,403. On August 1, 1997, the Redevelopment Agency issued$16,505,000 of Neighborhood Redevelopment Tax Increment Revenue Refunding Bonds Series 1997A with interest rates of 4.15 to 5.5 percent and a final maturity during fiscal year 2008. The net proceeds along with available reserve funds from the Series 89A Tax Increment bonds were used to fully pay the outstanding$17,625,000 balance of the Series 89A Tax Increment bonds. On March 1, 1998, the Redevelopment Agency issued $24,600,000 of Neighborhood Redevelopment Tax Increment Revenue Bonds Series 1998A with interest rates of 3.8 to 4.65 and final maturity during fiscal year 2008. The Series 1998A Bonds were issued for the purpose of financing all or a portion of the costs of improvements related to the implementation of light rail service to downtown Salt Lake City, street lighting, plaza improvements, and other related costs in the Redevelopment Project Area. On April 1, 2002 the Redevelopment Agency issued $16,190,000 principal amount Central Business District Neighborhood Redevelopment Junior Lien Tax Increment Revenue Refunding Bonds Series 2002A at rates of 3.75 to 5.25 percent and a final maturity during fiscal year 2015. The agency received net proceeds of$16,513,371, including accrued interest, original issue premium and issuance costs. The bonds were issued solely to fully refund the serial portion of the series 1990 bonds and fully refund the remaining outstanding balance of the series 1992 bonds. Other The various financing notes payable bear interest at 4.82 to 8.27 percent. Tax anticipation notes totaling$25,000,000 were issued and repaid during fiscal 2005. 7. Reserved Fund Equity Amounts reserved for restricted assets represent that portion of fund balance or net assets that is legally restricted for the payment of debt service, operations and maintenance, renewal and replacement of property and equipment. Amounts reserved for encumbrances represent that portion of fund balance that has been segregated pending vendor performance on purchase commitments or contracts outstanding at June 30,2005. Amounts reserved for guarantee of special improvement bonds represent that portion of fund balance restricted by state law to guarantee the payment of special improvement bond principal and interest. Amounts reserved for the retirement of debt represent that portion of fund balance restricted by bond agreements for the payment of debt service requirements. Amounts reserved for loans receivable represent the unpaid portion of the loan principal that is not related to offsetting obligations. Amounts reserved for land and buildings held for resale represent the acquisition costs of real property purchased with the intent of reselling rather than holding for use as a capital asset. 69 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 8. Deficit Fund Balances/Net Assets, Expenditures and Other Uses that Exceed Appropriations in Individual Funds Expenditures in the Arts Council Fund exceeded budget by $103,254. Expenditures related to in kind contributions were mistakenly not budgeted. Transfers out exceeded budget in the following funds by the following amounts, The Grants Operating ($121,574), Donations($35,689), E-911 ($40,948)special revenue funds, Capital Projects Fund($12,764), Water Utility ($24,415), Sewer Utility ($18,932), Storm Water Utility ($395), Refuse ($207) Golf ($761) enterprise funds, Fleet Management Services ($789), Risk Management($6,276)and Municipal Building Authority($29,382) internal services funds. These over budget conditions arose because of misclassifications in the budget between expenditures and transfers out. 9. General Fund Interfund Service Charges The General Fund charges certain proprietary and special revenue funds,the Capital Projects Fund and the Library component unit for various services. These transactions have been recorded as revenue and expenses or expenditures to the funds as if they involved organizations external to the City, which are generally eliminated for the government wide statements. The amounts of the charges to those funds for the year ended June 30, 2005, are as shown on the following table: General Fund charges for: Fire Police Engineering Administrative protection protection and other services services services services Total Enterprise funds: Intermodal Hub $ - $ - $ - $ 176,656 $ 176,656 Water Utility 534,568 - - 6,906 541,474 Sewer Utility 107,954 - - 118,386 226,340 Storm Water Utility 41,089 - - 7,649 48,738 Airport 1,275,360 3,443,173 96,997 - 4,815,530 Refuse Collection 110,522 - - 193,919 304,441 Golf 134,258 - - 117,870 252,128 Redevelopment Agency 181,607 - - 218,964 400,571 Internal service funds: - Fleet Management 84,624 - - - 84,624 Information Management 112,913 - - - 112,913 Municipal Building Auth. - - - 3,764 3,764 Governmental Immunity 54,498 - - - 54,498 Risk Management 164,969 - - - 164,969 Special revenue funds - CDBG Operating Fund - - - 7,350 7,350 Grants Operating Fund - - - 3,961 3,961 E 911 Dispatch 5,072 - - - 5,072 Capital Projects Fund - - - 1,460,986 1,460,986 Subtotal,primary government 2,807,434 3,443,173 96,997 2,316,411 8,664,015 Component unit- Library 25,320 - - - 25,320 Total reporting entity $ 2,832,754 $ 3,443,173 $ 96,997 $ 2,316,411 $ 8,689,335 70 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 10. Transfers Transfers were made to and from several funds during the course of the year ended June 30,2005. The principal reason for operating transfers is to provide the receiving fund resources to carry out the activities for which the receiving fund was created. The more significant examples are transfers from the General Fund to the Capital Projects Fund, to Fleet Management for the purchase of governmental fund vehicles, and to Governmental Immunity to pay general liability claims. Also,transfers from the Capital Projects Fund to Debt Service Funds provide resources to make scheduled principal and interest payments. The following tables show the detail of transfers. Transfers in to: Capital Housing General Projects Loans Transfers out from: General Fund $ - $ 19,725,243 $ - Capital Projects - - - Housing Loans - 309,847 - Water - - - Airport - - - Sewer - - - Redevelopment - - - Nonmajor Governmental 1,523,222 20,000 873,094 Nonmajor Proprietary - - - Internal Service 105,540 - - $ 1,628,762 $20,055,090 $ 873,094 Transfers in to: Nonmajor Internal Governmental Service Total Transfers out from: General Fund $ 171,420 $ 6,446,609 $ 26,343,272 Capital Projects 12,449,474 1,082,876 13,532,350 Housing Loans 434,275 - 744,122 Water - 24,415 24,415 Airport - 42,928 42,928 Sewer - 18,932 18,932 Redevelopment 106,567 4,184 110,751 Nonmajor Governmental 15,689 63,262,603 65,694,608 Nonmajor Proprietary - 13,747 13,747 Internal Service 109,382 23,265 238,187 $ 13,286,807 $70,919,559 $106,763,312 11. Risk Management The City is self-insured for general liability claims, except for liability incurred at the Airport. The Airport liability policy has a limit of$500,000,000 with no deductible. The Governmental Immunity Fund (an internal service fund)has been established to pay liability claims other than those at the Airport along with certain City Attorney expenses. The City has an all risk property insurance policy that has a limit of$500,000,000 with a$100,000 deductible. The Policy includes: (1) earthquake coverage of$100,000,000 at the airport and$50,000,000 at other locations with a deductible of the higher between 3% of the value or$100,000, (2)$100,000,000 in flood coverage for facilities that are located outside the standard report zone, (3)boiler and machine coverage to policy limit with a$25,000 deductible, (4) fine art coverage of$100,000,000 with a$25,000 deductible. The City is self insured for property loss above the limits and below the deductibles. The Treasurer is covered under a$10,000,000 bond with no deductible. 71 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30, 2005 The City also has: (1) public employee dishonesty insurance (an employee blanket bond) with a $1,000,000 limit per occurrence and a $50,000 deductible (2) a forgery or alteration policy with a $25,000 limit and a deductible of$250 and (3) a theft, disappearance and destruction policy with a limit of$25,000 and a $250 deductible. The City also has excess workers' compensation insurance with statutory limits and a $1,500,000 self-insured retention. The City is self insured for loss above the limits and below the deductibles. The operating departments of the General Fund or proprietary funds assume financial responsibility for risk retained by the City for property damage. Further,the City is self-insured for employee long-term disability, unemployment and $1,500,000 retention for workers' compensation. The Risk Management Fund (an internal service fund) has been established to pay these claims along with health insurance premiums and certain administrative expenses. During the past three fiscal years, there have been no settlements that exceeded insurance coverage. Changes in the estimated claims payable liability carried in the accrued liabilities of the Risk Management Fund since July 1,2002 shows in the table below: A liability is recorded for any claims or judgments when information available prior to issuance of the financial statements indicates it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Incurred but not reported events, if any, are included in the statements. Current year Beginning of claims and Balance at Estimated fiscal year changes in Claim fiscal year due in one liability estimates payments end year 2003-2004 Long term disability $ 978,000 $ 548,404 $ (502,828) $ 1,023,576 Workers'compensation 2,312,000 640,404 (1,187,404) 1,765,000 Unemployment compensation 23,000 284,029 (251,587) 55,442 $ 3,313,000 $ 1,472,837 $ (1,941,819) $ 2,844,018 2004-2005 Long term disability $ 1,023,576 $ 1,004,144 $ (565,752) $ 1,461,968 $ 350,167 Workers'compensation 1,765,000 1,791,174 (1,558,174) 1,998,000 698,120 Unemployment compensation 55,442 224,309 (245,581) 34,170 34,170 $ 2,844,018 $ 3,019,627 $ (2,369,507) $ 3,494,138 $ 1,082,457 12. Pension Plans Identification -The City participates in three cost-sharing multiple-employer public retirement systems (PERS) and one multiple-employer agent PERS. These are defined benefit retirement plans covering public employees of the State of Utah and employees of participating local governmental entities. The systems are administered under the direction of the Utah State Retirement Board whose members are appointed by the governor of Utah. Plan provisions - City police officers are covered by the Public Safety Contributory and Noncontributory System (Public Safety System), the one multiple employer-agent system. Firefighters are covered by the Firemen's System and substantially all other permanent City employees are covered by either the Contributory System or the Noncontributory System. The Noncontributory System was implemented in 1986 as a result of legislation by the State of Utah. The Noncontributory System is mandatory for all new full time employees other than police and firefighters. Current employees were given the opportunity to remain with their present retirement plan or to convert membership to the new Noncontributory system that provides a benefit formula using a three-year rather than a five-year average salary. Other legislation enhanced death benefits for public employees,removed time limitations on re-deposits in the Firemen's System, amended the laws on disability within the Public Safety System, and tightened the laws governing refunds. The systems are established and governed by the respective sections of Chapter 49 of the Utah Code Annotated 1951 as amended. The Utah State Retirement Office Act in Chapter 49 provides for the administration of the Utah Retirement Systems and Plans under the direction of the Utah State Retirement Board (Board). The systems issue a publicly available financial report that includes financial statements and required supplementary information for the Local 72 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 . Governmental Contributory Retirement System, Local Governmental Noncontributory Retirement System, Public Safety Contributory Retirement System, Public Safety Noncontributory Retirement System, and Firefighters Retirement System. A copy of the report may be obtained by writing to the Utah Retirement Systems, 540 East 200 South,Salt Lake City,UT 84102 or by calling 1-800-365-8772. A brief summary of eligibility and benefits is presented on the next page. Public Safety Contributory Contributory Noncontributory and Noncontributory and System System Firefighters'Systems Highest average salary Highest 5 years Highest 3 years Highest 3 years Years of service 30 years any age 30 years any age 20 years any age required and/or age 20 years age 60-61 25 years any age 10 years age 60 eligible for benefit (with actuarial reduction) 10 years age 62-64 20 years age 60-61 4 years age 65 4 years age 65 10 years age 62-64 4 years age 65 Benefit percent 1.15%per year to June 1967 2.5%per year up to 20 years per year of 1.25%per year July 1967 to June 1975 2.0%per year over 20 years service 2.00%per year July 1975 to present Beginning July 1, 1990 all new retirees in the Noncontributory system are paid 2%per year. Cost sharing multiple employer funding policy - The contribution rates, which are actuarially determined at June 30,2005 are: Employee contributions City's paid by City contribution (100%vested) (vested upon retirement) Contributory 6.00 % 7.08 % Noncontributory - 11.09 % Firefighters' System 7.83 % - % The contributions for the current fiscal year and for that of the two previous fiscal years were equal to the required contributions and are presented on the following page: June 30, June 30, June 30, System 2005 2004 2003 Local Government Contributory System: Employer paid for employee contributions $ 519,404 $ 551,763 $ 565,935 Employer contributions 612,901 515,894 441,422 Local Government Noncontributory System 8,502,360 7,220,681 6,277,380 Firefighters'system: Employer paid for employee contributions 1,410,219 1,389,061 1,324,652 73 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 Salt Lake City Public Safety Retirement System - The percent of salary contribution rates for the Contributory system were 4.34% (employee contribution), 9.40% (employer for employee), and 19.96% (employer). The rate for the Noncontributory was 32.52%. The rates are the actuarial determined rates, and are authorized by statute and specified by the Utah State Retirement Board. The combined annual pension cost for the City's contributory and noncontributory public safety systems of$6,621,604 for the fiscal year ended June 30,2005 was equal to the City's required and actual contributions. The required contribution was determined as part of the January 1, 2004 actuarial valuation using the entry age normal cost method. The actuarial assumptions include: (a)an 8% investment rate of return(net of administrative expenses), (b)projected salary increases at 4.50% (3.50% from inflation, 1.00% from membership growth), and (c)2.50%cost of living adjustment. Both (a) and(b) include an inflation component of 3.50%. The actuarial value of the Salt Lake City Public Safety Retirement System assets was determined using techniques that smooth the effects of short-term volatility in the fair value of investments over a 5-year period. The Salt Lake City Public Safety Retirement System unfunded actuarial accrued liability is being amortized over an open 20-year amortization period. Amortization payments are designed to remain level as a percent of payroll. Trend information and the Schedule of Funding progress over a three-year period for the Salt Lake City Public Safety Retirement System are presented as follows: Annual Pension Percentage APC Net pension Year ending Cost(APC) contributed obligation June 30,2005 $ 6,621,604 100% $ - June 30,2004 6,082,305 100% - June 30,2003 5,484,001 100% - Actuarial Actuarial Actuarial Accrued UAAL as a valuation value of Liability (AAL) Unfunded Funding Covered %of covered date assets entry age AAL(UAAL) ratios payroll payroll December 31,2004 $ 142,134,000 $ 186,044,000 $ 43,910,000 76% $20,672,000 212% January 1,2004 138,148,000 176,136,000 37,988,000 78% 20,380,000 186% January 1,2003 129,690,000 168,084,000 38,394,000 77% 19,305,000 199% Historical trend information - Historical trend information for the past 10 years is available in a separately issued financial report issued by the Utah Retirement Systems. These statistical trends provide information about progress made in accumulating sufficient assets to pay benefits when due. 13. Post-Employment Benefits In addition to providing pension benefits, the City provides health care and life insurance benefits for retired City employees. Substantially all of the City's employees may become eligible for those benefits if they reach normal retirement age while working for the City. Although not statutorily required nor contractually obligated,the City has for many years provided health and life insurance coverage for retired employees. These benefits are expensed when incurred and are financed on a pay as you go basis. There were 617 participants that received benefits during the year ended June 30,2005. Depending on the plan, the retired employee contributes 51% to 74% of the cost of the insurance premiums and the City contributes 26% to 49%. Employees can prepay their contribution for a portion of the time or have amounts withheld from their retirement checks by the state retirement system and sent to the City. Any prepaid contribution is recorded as deferred revenue in the Risk Management Fund(an internal service fund). The cost of retiree 74 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 health care and life insurance benefits for the year ended June 30, 2005 was approximately $3,522,000, of which the City's expense was$975,000. The City also provides health, dental and employee assistance benefits to terminated employees under the federal Consolidated Omnibus Budget Reconciliation Act (COBRA). Substantially all employees are eligible for these benefits upon termination of employment with the City. Depending upon the qualifying event, former employees are eligible for either 18 or 36 months of benefits under this act. The premiums for this coverage plus a 2% administrative charge are paid 100%by the former employee. 14. Deferred Compensation Plans 457 Deferred Compensation Plan - The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The Plan, available to all City employees, permits them to defer a portion of their salary until future years. Employees are eligible to voluntarily participate from the date of employment and are vested immediately upon participating. The City is not obligated but did contribute $2,272 to the plan.. The City's total payroll was$133,401,338 for the fiscal year ended June 30, 2005. Employees contributed$2,558,218 to the plan during the fiscal year. All amounts were transferred to the state or administering insurance companies by the due dates. The 457 deferred monies are not available to the City or its general creditors. The 457 resources for which the City has custody and performs all administrative duties, including investment activities, under the Plan are accounted for in a fiduciary fund. Amounts held by entities other than the City do not appear in these financial statements. 401(k) Deferred Compensation Plan - The City also sponsors a deferred compensation plan under Internal Revenue Code Section 401(k) for City employees covered by any of the state retirement plans. The Utah State Retirement Board administers this Plan. The City's total payroll in the fiscal year ended June 30, 2005 was $133,401,338. Of that amount,payroll of$123,695,010 was eligible to participate in this Plan. The City participates at a rate of 2.65% or 1.45% of base payroll only for those current employees who changed from the contributory state retirement plan to the noncontributory retirement plan. The 2.65%applies to current employees who changed at the first opportunity in 1986 and the 1.45% applies to current employees who changed at the second opportunity in 1990. The rate of City participation was established and can be changed by City Council action. During the year ended June 30, 2005, employees contributed $2,875,174 and the City contributed $483,289. All contributions were made by the due dates. The 401(k) deferred compensation monies are not available to the City or its general creditors. Therefore, no assets or liabilities of the 401(k)deferred compensation plan are reflected in these financial statements. 15. Commitments and Contingencies Commitments for major construction, capital improvement and other projects at June 30, 2005 are as follows: Capital Projects Fund $ 10,535,000 Enterprise funds 87,922,000 Total $ 98,457,000 The City is lessee under a number of operating lease agreements, one of which is noncancelable, involving land, buildings and equipment. Rent expense during the fiscal year ended June 30, 2005 approximated $1,196,000 of which $586,543 was related to proprietary funds. The following is a schedule of future minimum rental payments required under non-cancellable operating leases as of June 30,2005: 75 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 General Fund 2006 $ 41,926 2007 41,926 2008 41,926 2009 41,926 2010 41,926 2011-2015 209,630 2016-2020 209,630 2021-2025 209,630 2026-2030 209,630 2031-2035 209,630 Thereafter 1,593,188 Total $ 2,850,968 There are sundry claims or lawsuits that have been filed against the City or its employees involving tort and civil rights matters. The City has evaluated those claims and based upon the advice of counsel, has recorded an estimated claims payable liability in the Governmental Immunity Fund(an internal service fund)to cover any expected losses. Changes in the reported liability carried in the Governmental Immunity Fund since July 1, 2002 resulted in the changes shown in the following table: Current year Beginning of claims and Balance at fiscal year changes in Claim fiscal year liability estimates payments end 2003-2004 2,221,859 438,900 (635,759) 2,025,000 2004-2005 2,025,000 810,686 (846,686) 1,989,000 In the normal course of operations, the City receives grant funds from various Federal Agencies. The grant programs are subject to audit by agents of the granting authority,the purpose of which is to ensure compliance with conditions precedent to the granting of funds. Any liability for reimbursement that may arise as the result of audits of grant funds is not believed to be material. 16. Segment information The enterprise fund that contains debt funded by operating revenues and is not a major proprietary fund is the Stormwater Utility funds. The key financial data for the year ended June 30, 2005 for the fund are on the following page. 76 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 Stormwater Utility Operating revenue $ 5,322,084 Operating expenses: Depreciation and amortization 1,665,077 Other 2,786,374 Total operating expenses 4,451,451 Operating income $ 870,633 Net transfers out $ (1,195) Net asset increase 2,894,294 Grants and contributions 1,646,918 Total assets 89,741,310 Long term liabilities 7,655,996 Net Assets 80,909,499 Acquisitions of property and equipment 9,547,806 Disposal proceeds of property and equipment 53,963 Net working capital 12,896,937 Condensed statements of cash flows for the segments of enterprise funds are as follows: Stormwater Utility Cash flows from: Operating activities $ 2,438,430 Non-capital and related financing activities (572,634) Capital and related financing activities (8,198,399) Investing activities 384,254 Net increase in cash and cash equivalents (5,948,349) Cash and cash equivalents-begin 22,576,707 Cash and cash equivalents-end $16,628,358 17. Related Party Transactions During the year ended June 30, 2005, the Water Utility Fund(an enterprise fund)paid $5,867,733 for water purchased from the Metropolitan Water District of Salt Lake City and Sandy,which is a related entity of the City. 18. Interfund Receivables and Payables The$757,834 due from other funds for other than cash overdraft in the non-major governmental special revenue Grants fund consists of amounts due from the Housing Loans Fund,a major governmental fund. The borrowed funds were used to purchase houses for the First Time Home Buyers Program and will be repaid when the houses are sold to qualifying residents. 77 SALT LAKE CITY CORPORATION NOTES TO FINANCIAL STATEMENTS June 30,2005 19. Joint Venture The City is a member of a joint venture known as the City/County landfill in which the City and Salt Lake County(through its Municipal Affairs Fund and the remainder of the County)each have fifty percent interest. The joint venture was created to provide solid waste management and disposal services. The City's equity in the net resources of the landfill at June 30,2005, was$26,275,509. This equity interest is shown in the City's Refuse Collection Fund(an enterprise fund). The interlocal cooperation agreement created the joint venture and established the Salt Lake Valley Solid Waste Management Council (the Council). The Council consists of five members: one of the County Commissioners,the Mayor of the City, an elected official designated by the Salt Lake County Council of Governments, a member of the Salt Lake City/County Board of Health and one member with technical expertise in solid waste disposal. The Council's responsibilities are to: (1) appoint or remove,as needed, a landfill manager who reports to the Council; (2) plan, establish and approve all construction projects for solid waste operations; and (3) prepare an annual operating budget that includes expenditures and the means of financing them. All actions by the Council are recommendations to the City Council and the County Commission, which have equal power to review,ratify,modify,or veto any action submitted by the Council. The Council has developed a master plan designed to comply with environmental standards established by the federal government and to meet accounting and financial reporting requirements under GASB Statement No. 18, Accounting for Municipal Solid Waste Landfill Closure and Postclosure Care Costs. In compliance with this standard, the Council has established user fees sufficient to cover all operating costs, including postclosure costs that have been mandated by the federal government. For the year ended June 30, 2005, the City paid the landfill approximately $1,526,000 in user fees. Separately audited fmancial statements for the City/County landfill may be obtained from Salt Lake County Public Works,2001 S. State, Room N3300, Salt Lake City,Utah 84190. 20. Prior Period Adjustments—Component Unit Subsequent to the issuance of the Library component unit's fmancial statements, management determined that a clerical error caused an overstatement of depreciation, resulting in and understatement of net assets in the amount of$456,266. Ending net assets as previously stated, $17,571,361. Ending net assets after adjustment of $456,266,$18,543,379. 21. Subsequent Events Subsequent to June 30,2005 the following commitments for major projects were made: General Fund $ 585,000 Special revenue funds 3,795,000 Capital Projects Fund 2,837,000 Proprietary funds 8,591,000 Total $ 15,808,000 The following events occurred subsequent to June 30,2005: The City issued $21,000,000 of tax anticipation notes maturing June 30, 2006. These notes bear interest at 3.75%. 78 Required Supplementary Information 79 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE GENERAL FUND Year ended June 30,2005 General Fund Adjustment Actual on to budgetary budgetary Budgeted Amounts Actual basis basis Onginal Final (GAAP basis) (Note to RS1 I) (non-GAAP) Budget Budget Variance Revenues. General property taxes $ 64,472,863 $ - $ 64,472,863 $ 63,401,255 $ 63,401,255 $ 1,071,608 Sales,use and excise taxes 42,756,404 - 42,756,404 40,088,193 40,188,200 2,568,204 Franchise taxes 23,194,439 - 23,194,439 22,583,972 22,483,972 710,467 Licenses 5,505,104 - 5,505,104 5,548,000 5,548,000 (42,896) Permits 6,145,379 - 6,145,379 4,044,000 4,149,000 1,996,379 Fines and forfeitures 5,655,903 - 5,655,903 5,424,104 5,424,104 231,799 Interest 2,329,996 - 2,329,996 2,241,250 2,241,250 88,746 Intergovernmental 4,367,262 - 4,367,262 4,350,296 4,350,296 16,966 Interfund service charges 8,689,335 - 8,689,335 8,586,200 8,699,528 (10,193) Parking meter 1,288,058 1,288,058 1,200,360 1,200,360 87,698 Parking ticket 3,669,078 - 3,669,078 4,000,000 4,000,000 (330,922) Charges for services 3,551,387 - 3,551,387 3,391,840 3,580,870 (29,483) Contributions 11,541 - 11,541 86,600 86,600 (75,059) Miscellaneous 427,768 - 427,768 375,395 375,395 52,373 Total revenues 172,064,517 - 172,064,517 165,321,465 165,728,830 6,335 687 Expenditures: Current: City Council 1,541,482 486,078 2,027,560 1,540,353 2,055,983 28,423 Mayor 1,459,969 28,899 1,488,868 1,495,039 1,557,407 68,539 City Attorney 2,925,101 19,665 2,944,766 2,927,371 2,951,595 6,829 Management Services 9,252,380 210,583 9,462,963 9,384,164 9,581,842 118,879 Fire 27,322,150 193,672 27,515,822 27,571,966 27,640,699 124,877 Police 44,883 262 299,832 45,183,094 45,011,037 45,488,475 305,381 Community and Economic Development 7,567,313 206,517 7,773,830 7,437,840 7,911,913 138,083 Public Services 32,756,205 1,273,311 34,029,516 34,108,965 34,568,705 539,189 Nondepartmental 12,291,477 46,696 12,338,173 11,978,762 12,363,541 25,368 Total expenditures 139,999,339 2,765,253 142,764,592 141,455,497 144,120,160 1,355,568 Revenues over(under)expenditures 32,065,178 (2,765,253) 29,299,925 23,865,968 21,608,670 7,691,255 Other financing sources(uses): Proceeds from sale of property 393,043 - 393,043 321,662 321,655 71,388 Transfers in 1,628,762 - 1,628,762 1,559,540 1,583,540 45,222 Transfers out (26,343,272) - (26,343,272) (26,338,616) (26,347,612) 4,340 Total other financing sources(uses): (24,321,467) - (24,321,467) (24,457,414) (24,442,417) 120,950 Net Change in Fund Balance 7,743,711 (2,765,253) 4,978,458 (591,446) (2,833,747) 7,812,205 Fund balance July 1,2004 21,414,441 441,877 21,856,318 21,856,318 21,856,318 - Prior year encumbrances appropriated in current year 1,093,738 1,093,738 1,093,738 1,093,738 - Fund balance June 30,2005 $ 29,158,152 $ (1,229,638) $ 27,928,514 $ 22,358,610 $ 20,116,309 $ 7,812,205 See note to RSI. 80 1 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE HOUSING FUND Year ended June 30,2005 Housing Fund Budgeted Amounts Actual Original Final (GAAP basis) Budget Budget Variance Revenues: Interest $ 968,691 $ 654,000 $ 654,000 $ 314,691 Intergovernmental 840,333 609,682 1,355,719 (515,386) Charges for services 22,039 - - 22,039 Miscellaneous 330,955 - 385,802 (54,847) Total revenues 2,162,018 1,263,682 2,395,521 (233,503) Expenditures: Community and Economic Development 393,431 1,454,682 5,455,747 5,062,316 Debt Service:Interest 602,652 648,000 648,000 45,348 Total expenditures 996,083 2,102,682 6,103,747 5,107,664 Revenues over(under)expenditures 1,165,935 (839,000) (3,708,226) 4,874,161 Other financing sources(uses): Proceeds from sale of property - 845,000 845,000 (845,000) Transfers in 873,094 - 1,978,972 (1,105,878) Transfers out (744,122) - (744,122) - Total other financing sources(uses): 128,972 845,000 2,079,850 (1,950,878) Net Change in Fund Balance 1,294,907 6,000 (1,628,376) 2,923,283 Fund balance July 1,2004 19,289,997 19,289,997 19,289,997 - Fund balance June 30,2005 $ 20,584,904 $ 19,295,997 $ 17,661,621 $ 2,923,283 See note to RSI. 81 Note to Required Supplementary Information 82 SALT LAKE CITY CORPORATION NOTES TO REQUIRED SUPPLEMENTARY INFORMATION June 30,2005 1. Budgetary-GAAP Reporting Reconciliation The City Council can amend the budget to any extent, provided the budgeted expenditures do not exceed revenues and appropriated fund balance. During the year ended June 30, 2005, General Fund appropriations increased by $2,674,000. The increases are the results of additional amounts for prior year outstanding encumbrances, increased street lighting costs and added police costs. The Housing Fund increased appropriations (including transfers out) by $4,745,000. The increase was split between re-appropriations of prior year projects (approximately 70%) and recognizing and budgeting program income(approximately 30%). The Schedules of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual include comparisons of the legally adopted budget(more fully described in Note 1 of the Notes to the Financial Statements)with actual data on a budgetary basis for the General Fund and proprietary funds that have a budgetary basis that differs from GAAP. Accounting principles applied for purposes of developing data on a budgetary basis differ from those used to present financial statements in conformity with GAAP. The difference in expenditures between GAAP and budgetary basis for the General Fund is reconciled in the following table. General Fund Expenditures Plus Change in Actual on encumbrances compensated Actual on reporting as of absences budgetary basis June 30,2005 liability basis City Council $ 1,541,482 $ 468,283 $ 17,795 $ 2,027,560 Mayor 1,459,969 36,977 (8,078) 1,488,868 City Attorney 2,925,101 10,129 9,536 2,944,766 Management Services 9,252,380 198,825 11,758 9,462,963 Fire 27,322,150 89,794 103,878 27,515,822 Police 44,883,262 167,093 132,739 45,183,094 Community and Economic Development 7,567,313 256,803 (50,286) 7,773,830 Public Services 32,756,205 1,252,285 21,026 34,029,516 Nondepartmental 12,291,477 46,696 - 12,338,173 Total expenditures 139,999,339 2,526,885 238,368 142,764,592 Transfers out 26,343,272 - - 26,343,272 Total $ 166,342,611 $ 2,526,885 $ 238,368 $ 169,107,864 83 This page intentionally left blank. 84 Supplementary Information SI-1 This page intentionally left blank. SI-2 Nonmajor Governmental Funds Arts Council Fund -To account for activities of the Arts Council and the purchase or construction of art in City owned facilities. Downtown Economic Development Fund - To account for special assessments which are restricted for downtown projects or improvements. Community Development Operating Fund - To account for monies received by the City as grantee participant in the Community Development Block Grant(CDBG)program,except for CDBG monies to be used for capital improvements which are accounted for in the Capital Projects Fund. Grants Operating Fund - To account for monies received by the City under the Comprehensive Community Program, Community Oriected Policing Services, Home Program, Emergency Medical Services, Emergency Shelter Grants, Local Law Enforcement Block Grants, Salt Lake Area Gang Projects, Historic Resourse Grants,and other studies and grants. Street Lighting Fund-To account for the operation of additional street lights, the cost of which is paid by the City and by property owners who benefit from these improvements. Demolition, Weed and Forfeiture Fund - To account for City mandated demolition, weed abatement activities and certain police forfeiture activities. Emergency 911 Dispatch Fund - To account for the City's portion of the County-wide emergency dispatch system. Salt Lake Donation Fund - This fund was established to account for individual private and intergovernmental contributions held in trust by the City for the Tracy Aviary, Late Night Basketball, Bicycle Advisory Committee, Freedom Trail, Indigent Services,and other contributions received to be held for a specific purpose Special Improvement Fund - This fund is used to account for the cost of servicing the debt created by financing the construction of public improvements deemed to benefit the properties against which special assessments are levied. Other Improvements Fund - This fund is used to account for the cost of servicing the debt created by financing projects other than Special Improvements. SI-3 SALT LAKE CITY CORPORATION COMBINING BALANCE SHEET NON MAJOR GOVERNMENTAL FUNDS June 30,2005 Total Special Debt Nonmajor Revenue Service Governmental ASSETS Funds Funds Funds Cash and cash equivalents $ 19,611,997 $ 880,667 $ 20,492,664 Assessments, including$277,275 of delinquent assessments 887,651 786,123 1,673,774 Taxes receivable 411,759 - 411,759 Loans and notes receivable, less allowance for doubtful accounts of$4,000,000 12,439,682 - 12,439,682 Due from other funds for other than cash overdraft 757,834 - 757,834 Due from other governments 1,218,697 - 1,218,697 Other receivables 115,635 422,634 538,269 Restricted assets: Cash and cash equivalents 456,016 554,266 1,010,282 Total assets $ 35,899,271 $ 2,643,690 $ 38,542,961 LIABILITIES AND FUND BALANCES Liabilities: Due to other funds for cash overdraft $ 20,777 $ - $ 20,77, Accounts payable 1,107,273 11,599 1,1 18,872 Accrued liabilities 56,767 - 56,767 Other liabilities payable from restricted assets 456,016 - 456,016 Deferred revenue 1,039,386 1,208,757 2,248,143 Total liabilities 2,680,219 1,220,356 3,900,575 Fund balances: Reserved for loans and advances 12,467,580 - 12,467,580 Reserved for restricted assets - 554,266 554,266 Unreserved and undesignated 20,751,472 869,068 21,620,540 Total fund balances 33,219,052 1,423,334 34,642,386 Total liabilities and fund balance $ 35,899,271 $ 2,643,690 $ 38,542,961 SI-4 SALT LAKE CITY CORPORATION COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS Year ended June 30,2005 Total Special Debt Nonmajor Revenue Service Governmental Funds Funds Funds Revenues: Sales,use and excise taxes $ 2,243,084 $ - $ 2,243,084 Assessments 1,100,439 17,945,646 19,046,085 Interest 777,196 210,662 987,858 Intergovernmental 8,966,567 509,257 9,475,824 Charges for services 59,222 - 59,222 Contributions 1,490,902 - 1,490,902 Proceeds from sale of property 152,358 - 152,358 Miscellaneous 673,653 5,597 679,250 Total revenues 15,463,421 18,671,162 34,134,583 Expenditures: Management Services - 25,138 25,138 Police 1,173,943 - 1,173,943 Community and Economic Development 8,236,243 - 8,236,243 Public Services 2,145,748 - 2,145,748 Arts Council Services 1,051,870 - 1,051,870 Debt Service: Principal - 29,828,635 29,828,635 Interest and other fiscal charges - 7,729,010 7,729,010 Total expenditures 12,607,804 37,582,783 50,190,587 Revenues over(under)expenditures 2,855,617 (18,911,621) (16,056,004) Other financing sources(uses): Proceeds from debt issuance - 68,666,038 68,666,038 Transfers in 727,951 12,558,856 13,286,807 Transfers out (2,472,210) (63,222,398) (65,694,608) Total other financing sources(uses): (1,744,259) 18,002,496 16,258,237 Net change in fund balance 1,111,358 (909,125) 202,233 Fund balance July 1,2004 32,107,694 2,332,459 34,440,153 Fund balance June 30,2005 $ 33,219,052 $ 1,423,334 $ 34,642,386 SI-5 SALT LAKE CITY CORPORATION COMBINING BALANCE SHEET NONMAJOR SPECIAL REVENUE FUNDS June 30,2005 Downtown Community Arts Economic Development ASSETS Council Development Operating Cash and cash equivalents $ 109,687 $ 205,070 $ - Assessments receivable - 689,284 - Taxes receivable - - - Loans and notes receivable, less allowance for doubtful accounts of$4,000,000 - - - Due from other funds for other than cash overdraft - - - Due from other governments - - 935,319 Other receivables 115,635 - - Restricted assets: Cash and cash equivalents - - - Total assets $ 225,322 $ 894,354 $ 935,319 LIABILITIES AND FUND BALANCES Liabilities: Due to other funds for cash overdraft $ - $ - $ 20,777 Accounts payable 22,989 - 228,446 Accrued liabilities 51,305 - - Other liabilities payable from restricted assets - - - Deferred revenue 41,094 689,284 - Total liabilities 115,388 689,284 249,223 Fund balances: Reserved for loans and advances 27,898 - - Unreserved and undesignated 82,036 205,070 686,096 Total fund balances 109,934 205,070 686,096 Total liabilities and fund balance $ 225,322 $ 894,354 $ 935,319 SI-6 i Nonmajor Demolition, Emergency Salt Lake City Special Grants Street Weed and 911 Donations Revenue Operating Lighting Forfeiture Dispatch Fund Total $ 9,150,487 $ 1,570,378 $ 953,792 $ 2,049,355 $ 5,573,228 $ 19,611,997 194,712 - 3,655 - 887,651 - - - 411,759 - 411,759 12,439,682 - - - - 12,439,682 757,834 - - - - 757,834 283,378 - - - - 1,218,697 - - - - 115,635 - - 456,016 - - 456,016 $ 22,631,381 $ 1,765,090 $ 1,409,808 $ 2,464,769 $ 5,573,228 $ 35,899,271 $ - $ - $ - $ - $ - 20,777 668,178 78,975 22,139 22,847 63,699 1,107,273 870 - 2,990 - 1,602 56,767 - - 456,016 - - 456,016 114,296 194,712 - - - 1,039,386 783,344 273,687 481,145 22,847 65,301 2,680,219 12,439,682 - - - - 12,467,580 9,408,355 1,491,403 928,663 2,441,922 5,507,927 20,751,472 21,848,037 1,491,403 928,663 2,441,922 5,507,927 33,219,052 $ 22,631,381 $ 1,765,090 $ 1,409,808 $ 2,464,769 $ 5,573,228 $ 35,899,271 SI-7 SALT LAKE CITY CORPORATION COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR SPECIAL REVENUE FUNDS Year ended June 30,2005 Downtown Community Arts Economic Development Council Development Operating Revenues: Sales,use and excise taxes $ - $ - $ - Assessments - 715,598 - Interest 3,916 6,898 - Intergovernmental - - 3,147,528 Charges for services - - - Contributions 1,013,675 - - Proceeds from sale of property - - - Miscellaneous - - - Total revenues 1,017,591 722,496 3,147,528 Expenditures: Police - - - Community and Economic Development - 529,597 2,929,178 Public Services - - - Arts Council Services 1,051,870 - - Total expenditures 1,051,870 529,597 2,929,178 Revenues over(under)expenditures (34,279) 192,899 218,350 Other financing sources(uses): Transfers in - - 540,842 Transfers out - - (873,094) Total other financing sources(uses): - - (332,252) Net change in fund balance (34,279) 192,899 (113,902) Fund balance July 1,2004 144,213 12,171 799,998 Fund balance June 30,2005 $ 109,934 $ 205,070 $ 686,096 SI-8 i 1 Nonmajor Demolition, Emergency Salt Lake City Special Grants Street Weed and 911 Donation Revenue Operating Lighting Forfeiture Dispatch Fund Total $ - $ - $ - $ 2,243,084 $ - $ 2,243,084 - 374,554 10,287 - - 1,100,439 523,266 49,932 14,682 50,878 127,624 777,196 5,819,039 - - - - 8,966,567 20,542 - 37,726 - 954 59,222 - - - - 477,227 1,490,902 152,358 - - - - 152,358 663,693 - - - 9,960 673,653 7,178,898 424,486 62,695 2,293,962 615,765 15,463,421 - - 1,173,943 - 1,173,943 4,615,765 - 161,703 - - 8,236,243 1,492,786 - - 652,962 2,145,748 - - - - - 1,051,870 4,615,765 1,492,786 161,703 1,173,943 652,962 12,607,804 2,563,133 (1,068,300) (99,008) 1,120,019 (37,197) 2,855,617 14,920 130,000 26,500 - 15,689 727,951 (161,779) - - (1,401,648) (35,689) (2,472,210) (146,859) 130,000 26,500 (1,401,648) (20,000) (1,744,259) 2,416,274 (938,300) (72,508) (281,629) (57,197) 1,111,358 19,431,763 2,429,703 1,001,171 2,723,551 5,565,124 32,107,694 $ 21,848,037 $ 1,491,403 $ 928,663 $ 2,441,922 $ 5,507,927 $ 33,219,052 SI-9 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE ARTS COUNCIL Year ended June 30,2005 Budgeted Amounts Actual (GAAP basis) Original Final Variance Revenues: Interest $ 3,916 $ 3,500 4,032 $ (116) Contributions 1,013,675 890,745 957,475 56,200 Total revenues 1,017,591 894,245 961,507 56,084 Expenditures: Arts Council 1,051,870 901,260 948,616 (103,254) Total expenditures 1,051,870 901,260 948,616 (103,254) Net change in fund balance (34,279) (7,015) 12,891 (47,170) Fund balance July 1,2004 144,213 144,213 144,213 - Fund balance June 30,2005 $ 109,934 $ 137,198 $ 157,104 $ (47,170) SI- 10 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE DOWNTOWN ECONOMIC DEVELOPMENT Year ended June 30,2005 Budgeted Amounts Actual (GAAP basis) Original Final Variance Revenues: Assessments $ 715,598 $ 708,050 $ 708,050 $ 7,548 Interest 6,898 - - 6,898 Total revenues 722,496 708,050 708,050 14,446 Expenditures: Community and Economic Development 529,597 708,050 708,050 178,453 Total expenditures 529,597 708,050 708,050 178,453 Revenues under expenditures 192,899 - - 192,899 Net change in fund balance 192,899 - - 192,899 Fund balance July 1,2004 12,171 12,171 12,171 - Fund balance June 30,2005 $ 205,070 $ 12,171 $ 12,171 $ 192,899 SI- 11 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE COMMUNITY DEVELOPMENT OPERATING FUND Year ended June 30,2005 Budgeted Amounts Actual (GAAP basis) Original Final Variance Revenues: Intergovernmental $ 3,147,528 $ 3,534,304 $ 6,851,882 $ (3,704,354) Total revenues 3,147,528 3,534,304 6,851,882 (3,704,354) Expenditures: Community and Economic Development 2,929,178 3,534,304 5,595,739 2,666,561 Total expenditures 2,929,178 3,534,304 5,595,739 2,666,561 Revenues under expenditures 218,350 - 1,256,143 (1,037,793) Other financing sources(uses): Transfers in 540,842 - - 540,842 Transfers out (873,094) - (1,255,143) 382,049 Total other financing sources: (332,252) - (1,255,143) 922,891 Net change in fund balance (113,902) - 1,000 (114,902) Fund balance July 1,2004 799,998 799,998 799,998 - Fund balance June 30,2005 $ 686,096 $ 799,998 $ 800,998 $ (114,902) SI- 12 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE GRANTS OPERATING FUND Year ended June 30,2005 Budgeted Amounts Actual (GAAP basis) Original Final Variance Revenues: Interest $ 523,266 $ - $ 19,000 $ 504,266 Intergovernmental 5,819,039 2,026,828 13,101,474 (7,282,435) Contributions - - 102,600 (102,600) Miscellaneous 663,693 - 784,723 (121,030) Total revenues 7,005,998 2,026,828 14,007,797 (7,001,799) Expenditures: Community and Economic Development 4,615,765 2,026,828 24,118,489 19,502,724 Total expenditures 4,615,765 2,026,828 24,118,489 19,502,724 Revenues over(under)expenditures 2,390,233 - (10,110,692) 12,500,925 Other financing sources(uses): Transfers in 14,920 - 14,920 - Transfers out (161,779) - (40,205) (121,574) Total other financing sources(uses): (146,859) - (25,285) (121,574) Net change in fund balance 2,243,374 - (10,135,977) 12,379,351 Fund balance July 1,2004 19,431,763 19,431,763 19,431,763 - Fund balance June 30,2005 $ 21,675,137 $ 19,431,763 $ 9,295,786 $ 12,379,351 SI- 13 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE STREET LIGHTING Year ended June 30,2005 Budgeted Amounts Actual (GAAP basis) Original Final Variance Revenues: Assessments $ 374,554 $ 391,777 $ 483,138 $ (108,584) Interest 49,932 - - 49,932 Total revenues 424,486 391,777 483,138 (58,652) Expenditures: Public Services 1,492,786 1,434,016 1,762,250 269,464 Total expenditures 1,492,786 1,434,016 1,762,250 269,464 Revenues over(under)expenditures (1,068,300) (1,042,239) (1,279,112) 210,812 Other financing sources: Transfers in 130,000 130,000 130,000 - Total other financing sources: 130,000 130,000 130,000 - Net change in fund balance (938,300) (912,239) (1,149,112) 210,812 Fund balance July 1,2004 2,429,703 2,429,703 2,429,703 - Fund balance June 30, 2005 $ 1,491,403 $ 1,517,464 $ 1,280,591 $ 210,812 SI- 14 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE DEMOLITION,WEED AND FORFEITURE Year ended June 30,2005 Budgeted Amounts Actual (GAAP basis) Original Final Variance Revenues: Assessments $ 10,287 $ - $ - $ 10,287 Interest 14,682 - - 14,682 Charges for services 37,726 - - 37,726 Total revenues 62,695 - - 62,695 Expenditures: Community and Economic Development 161,703 153,000 1,017,983 856,280 Total expenditures 161,703 153,000 1,017,983 856,280 Revenues over(under)expenditures (99,008) (153,000) (1,017,983) 918,975 Other financing sources: Transfers in 26,500 26,500 26,500 - Total other financing sources: 26,500 26,500 26,500 - Net change in fund balance (72,508) (126,500) (991,483) 918,975 Fund balance July 1,2004 1,001,171 1,001,171 1,001,171 - Fund balance June 30,2005 $ 928,663 $ 874,671 $ 9,688 $ 918,975 SI- 15 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE EMERGENCY 911 DISPATCH Year ended June 30,2005 Budgeted Amounts Actual (GAAP basis) Original Final Variance Revenues: Sales,use and excise taxes $ 2,243,084 $ 2,170,000 $ 2,170,000 $ 73,084 Interest 50,878 - - 50,878 Total revenues 2,293,962 2,170,000 2,170,000 123,962 Expenditures: Police 1,173,943 1,481,700 1,481,700 307,757 Total expenditures 1,173,943 1,481,700 1,481,700 307,757 Revenues over expenditures 1,120,019 688,300 688,300 431,719 Other financing uses Transfers out (1,401,648) (1,360,700) (1,360,700) (40,948) Total other financing uses (1,401,648) (1,360,700) (1,360,700) (40,948) Net change in fund balance (281,629) (672,400) (672,400) 390,771 Fund balance July 1,2004 2,723,551 2,723,551 2,723,551 - Fund balance June 30,2005 $ 2,441,922 $ 2,051,151 $ 2,051,151 $ 390,771 SI- 16 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE SALT LAKE CITY DONATION FUND Year ended June 30,2005 Budgeted Amounts Actual (GAAP basis) Original Final Variance Revenues: Interest $ 127,624 $ - $ - $ 127,624 Charges for services 954 - - 954 Contributions 477,227 400,000 560,346 (83,119) Miscellaneous 9,960 - 5,000 4,960 Total revenues 615,765 400,000 565,346 50,419 Expenditures: Public Services 652,962 400,000 2,015,916 1,362,954 Total expenditures 652,962 400,000 2,015,916 1,362,954 Revenues over(under)expenditures (37,197) - (1,450,570) 1,413,373 Other financing sources: Transfers in 15,689 - - (15,689) Transfers out (35,689) - - (35,689) Total other financing sources: (20,000) - - - (51,378) Net change in fund balance (57,197) - (1,450,570) 1,361,995 Fund balance July 1,2004 5,565,124 5,565,124 5,565,124 - Fund balance June 30,2005 $ 5,507,927 $ 5,565,124 $ 4,114,554 $ 1,361,995 SI- 17 SALT LAKE CITY CORPORATION COMBINING BALANCE SHEET NONMAJOR DEBT SERVICE FUNDS June 30,2005 Debt Special Other Service ASSETS Improvement Improvement Total Cash and cash equivalents $ 778,934 $ 101,733 $ 880,667 Assessments, including$277,275 of delinquent assessments 786,123 - 786,123 Other receivables 422,634 - 422,634 Restricted assets: Cash and cash equivalents - 554,266 554,266 Total assets $ 1,987,691 $ 655,999 $ 2,643,690 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 252 $ 11,347 $ 11,599 Accrued liabilities - - - Deferred revenue 1,208,757 - 1,208,757 Total liabilities 1,209,009 11,347 1,220,356 Fund balances: Reserved for restricted assets - 554,266 554,266 Unreserved and undesignated 778,682 90,386 869,068 Total fund balances 778,682 644,652 1,423,334 Total liabilities and fund balance $ 1,987,691 $ 655,999 $ 2,643,690 SI- 18 SALT LAKE CITY CORPORATION COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR DEBT SERVICE FUNDS Year ended June 30,2005 Debt Special Other Service Improvement Improvement Total Revenues: Assessments $ 17,945,646 $ - $ 17,945,646 Intergovernmental - 509,257 509,257 Interest 172,491 38,171 210,662 Miscellaneous 5,597 - 5,597 Total revenues 18,123,734 547,428 18,671,162 Expenditures: Management Services 18,788 6,350 25,138 Debt Service: Principal 17,650,000 12,178,635 29,828,635 Interest and other fiscal charges 1,396,589 6,332,421 7,729,010 Total expenditures 19,065,377 18,517,406 37,582,783 Expenditures under revenues (941,643) (17,969,978) (18,911,621) Other financing sources: Proceeds from debt issuance - 68,666,038 68,666,038 Transfers in - 12,558,856 12,558,856 Transfers out - (63,222,398) (63,222,398) Total other financing sources: - 18,002,496 18,002,496 Net change in fund balance (941,643) 32,518 (909,125) Fund balance July 1,2004 1,720,325 612,134 2,332,459 Fund balance June 30,2005 $ 778,682 $ 644,652 $ 1,423,334 SI- 19 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE SPECIAL IMPROVEMENT FUND Year ended June 30,2005 Budgeted Amounts Actual (GAAP basis) Original Final Variance Revenues: Assessments $ 17,945,646 $ 1,851,568 $ 19,232,768 $ (1,287,122) Interest 172,491 150,000 150,000 22,491 Miscellaneous 5,597 - - 5,597 Total revenues 18,123,734 2,001,568 19,382,768 (1,259,034) Expenditures: Management Services 18,788 65,750 65,750 46,962 Debt service: Principal 17,650,000 825,000 17,650,000 - Interest 1,396,589 931,371 1,487,571 90,982 Total expenditures 19,065,377 1,822,121 19,203,321 137,944 Net change in fund balance (941,643) 179,447 179,447 (1,396,978) Fund balance July 1,2004 1,720,325 1,720,325 1,720,325 - Fund balance June 30,2005 $ 778,682 $ 1,899,772 $ 1,899,772 $ (1,396,978) SI-20 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE OTHER IMPROVEMENT FUND Year ended June 30,2005 Budgeted Amounts Actual (GAAP basis) Original Final Variance Revenues: Intergovernmental $ 509,257 $ - $ 509,257 $ - Interest 38,171 - - 38,171 Total revenues 547,428 - 509,257 38,171 Expenditures: Management Services 6,350 6,695 6,695 345 Debt service: Principal 12,178,635 6,320,000 7,570,000 (4,608,635) Interest 6,332,421 5,205,366 6,267,440 (64,981) Total expenditures 18,517,406 11,532,061 13,844,135 (4,673,271) Revenues under expenditures (17,969,978) (11,532,061) (13,334,878) (4,635,100) Other financing sources: Proceeds from bond issuance 68,666,038 - 64,925,000 3,741,038 Transfers in 12,558,856 11,480,938 12,529,475 29,381 Transfers out (63,222,398) - (64,170,720) 948,322 Total other financing sources: 18,002,496 11,480,938 13,283,755 4,718,741 Net change in fund balance 32,518 (51,123) (51,123) 83,641 Fund balance July 1,2004 614,919 614,919 614,919 - Fund balance June 30,2005 $ 647,437 $ 563,796 $ 563,796 $ 83,641 SI-21 This page intentionally left blank. SI-22 Nonmaj or Enterprise Funds Intermodal Hub Fund - This fund is used to account for the activities related to providing transportation facilities for the light rail, bus system (other than the commuter system), passenger light rail and passenger heavy rail. Storm Water Utility - This fund is used to account for the activities associated with the collection and disposition of storm water runoff. Refuse Collection Fund - This fund is used to account for the operations and activities related to garbage collection and disposal. Golf Fund - This fund is used to account for the operation of golf courses for use by the general public. SI-23 SALT LAKE CITY CORPORATION COMBINING STATEMENT OF NET ASSETS-NONMAJOR PROPRIETARY FUNDS June 30,2005 Intermodal ASSETS Hub Current assets: Cash and cash equivalents Unrestricted $ 1,789,841 Receivables: Accounts,less allowance for doubtful accounts of$8,041 - Other - Due from other governments - Inventory of supplies - Total current assets 1,789,841 Noncurrent Assets: Restricted cash and cash equivalents - Property and equipment,at cost: Land and water rights - Bui[dings - Improvements other than buildings - Machinery and equipment - Construction in progress 20,784,439 Accumulated depreciation - Net property and equipment 20,784,439 Bond issue costs,less accumulated amortization of$4,575 - Investment in joint venture - Other - Total noncurrent assets 20,784,439 Total assets $ 22,574,280 SI-24 Storm Water Refuse Utility Collection Golf Total $ 13,499,214 $ 4,718,429 $ 1,236,741 $ 21,244,225 573,538 640,970 23,672 1,238,180 99,399 - 99,399 - 471,716 471,716 14,072,752 5,458,798 1,732,129 23,053,520 3,129,144 - - 3,129,144 962,101 - 4,977,109 5,939,210 4,786,078 - 2,499,935 7,286,013 81,284,740 - 5,893,032 87,177,772 2,400,961 8,799,261 4,880,940 16,081,162 9,555,065 - 30,339,504 (26,534,546) (4,265,547) (6,865,120) (37,665,213) 72,454,399 4,533,714 11,385,896 109,158,448 85,015 - - 85,015 26,275,509 - 26,275,509 75,668,558 30,809,223 11,385,896 138,648,116 $ 89,741,310 $ 36,268,021 $ 13,118,025 $ 161,701,636 SI-25 SALT LAKE CITY CORPORATION COMBINING STATEMENT OF NET ASSETS-NONMAJOR PROPRIETARY FUNDS June 30,2005 Intermodal LIABILITIES Hub Current liabilities: Accounts payable $ 155,955 Accrued liabilities 4,618 Current portion of long-term compensation liability - Current portion of long-term debt: Payable from unrestricted assets - Payable from restricted assets - Accrued interest,payable from restricted assets - Current deposits and advance rentals - Total current liabilities 160,573 Noncurrent liabilities: Deposits,advance rentals and long term accruals - Deferred revenue - Bonds,mortgages,and notes payable - Long-term compensation liability - Total noncurrent liabilities - Total liabilities 160,573 NET ASSETS Invested in capital asssets,net of related debt 20,784,439 Restricted for debt service - Unrestricted 1,629,268 Total net assets 22,413,707 Total liabilities and net assets $ 22,574,280 SI-26 Storm Water Refuse Utility Collection Golf Total $ 722,764 $ 272,316 $ 272,739 $ 1,423,774 55,622 74,950 145,202 280,392 12,915 32,532 206,646 252,093 140,000 556,665 231,137 927,802 100,000 - - 100,000 144,514 - - 144,514 - 201,022 201,022 1,175,815 936,463 1,056,746 3,329,597 35,949 - - 35,949 - 38,936 - 38,936 7,504,191 610,018 489,667 8,603,876 115,856 161,523 374,619 651,998 7,655,996 810,477 864,286 9,330,759 8,831,811 1,746,940 1,921,032 12,660,356 65,522,913 3,367,031 10,665,092 100,339,475 2,156,939 - - 2,156,939 13,229,647 31,154,050 531,901 46,544,866 80,909,499 34,521,081 11,196,993 149,041,280 $ 89,741,310 $ 36,268,021 $ 13,118,025 $ 161,701,636 SI-27 SALT LAKE CITY CORPORATION COMBINING STATEMENT OF REVENUES,EXPENSES AND CHANGES IN FUND NET ASSETS NONMAJOR PROPRIETARY FUNDS Year ended June 30,2005 Intermodal Hub Operating revenue: Sales and charges for services $ - Rental and other 11,226 Total operating revenue 11,226 Operating expenses: Personal services 73,215 Operating and maintenance 24,851 Charges and services 130,723 Depreciation and amortization - Total operating expenses 228,789 Operating income(loss) (217,563) Nonoperating revenues(expenses): Interest income - Interest expense(net of amount capitalized of$442,749 - Equity in joint venture income - Gain(loss)on disposition of property,equipment and investments Total nonoperating revenues(expenses) - Capital Contributions Grants and other contributions 3,584,899 Income before transfers and change 3,367,336 Transfers out - Net income(loss) 3,367,336 Net Assets July 1,2004 19,046,371 Net Assets June 30,2005 $ 22,413,707 SI-28 Storm Water Refuse Utility Collection Golf Total $ 5,299,574 $ 7,352,743 $ 7,465,871 $ 20,118,188 22,510 7,895 42,424 84,055 5,322,084 7,360,638 7,508,295 20,202,243 1,374,672 1,721,108 3,527,172 6,696,167 81,080 92,260 1,176,507 1,374,698 1,330,622 4,525,874 2,636,200 8,623,419 1,665,077 801,366 633,497 3,099,940 4,451,451 7,140,608 7,973,376 19,794,224 870,633 220,030 (465,081) 408,019 384,254 105,542 23,960 513,756 (60,279) (47,612) (43,818) (151,709) - 721,137 - 721,137 53,963 68,154 (416) 121,701 377,938 847,221 (20,274) 1,204,885 1,646,918 - - 5,231,817 2,895,489 1,067,251 (485,355) 6,844,721 (1,195) (2,391) (10,161) (13,747) 2,894,294 1,064,860 (495,516) 6,830,974 78,015,205 33,456,221 11,692,509 142,210,306 $ 80,909,499 $ 34,521,081 $ 11,196,993 $ 149,041,280 SI-29 SALT LAKE CITY CORPORATION COMBINING STATEMENT OF CASH FLOWS NONMAJOR PROPIETARY FUNDS Year ended June 30,2005 Intermodal Hub Cash Flows from Operating Activities Receipts from customers and users $ 11,226 Payments to suppliers (155,574) Payments to employees (70,965) Net cash provided by(used in)operating activities (215,313) Cash flows from noncapital and related financing activities: Payments received on interfund receivables - Transfers out - Net cash used in noncapital and related financing activities - Cash flows from capital and related financing activities: Proceeds from issuance of debt (net of discount and issuance costs) - Proceeds from sale of equipment - Contributions for aid in construction 3,584,899 Payment on long-term obligations,net of capitalized interest - Payments for purchase and construction of fixed assets, including capitalized interest (4,324,688) Other receipts Net cash used in capital and related financing activities (739,789) SI-30 Storm Water Refuse Utility Collection Golf Total $ 5,307,386 $ 7,240,869 $ 7,547,183 $ 20,106,664 (1,482,485) (4,636,941) (3,728,585) (10,003,585) (1,386,471) (1,714,995) (3,522,895) (6,695,326) 2,438,430 888,933 295,703 3,407,753 (571,439) - - (571,439) (1,195) (2,391) (10,161) (13,747) (572,634) (2,391) (10,161) (585,186) 53,963 143,528 464 197,955 862,382 - - 4,447,281 (351,474) (642,960) (490,735) (1,485,169) (8,763,270) (922,768) (47,491) (14,058,217) (8,198,399) (1,422,200) (537,762) (10,898,150) -(continued)- SI-31 SALT LAKE CITY CORPORATION COMBINING STATEMENT OF CASH FLOWS NONMAJOR PROPIETARY FUNDS Year ended June 30,2005 Intermodal Hub Cash flows from investing activities: Interest received on investments and loans - Net cash provided by investing activities - Net decrease in cash and cash equivalents (955,102) Cash and cash equivalents at beginning of year 2,744,943 Cash and cash equivalents at end of year $ 1,789,841 Cash and cash equivalent components: Unrestricted $ 1,789,841 Restricted - Cash and cash equivalents at end of year $ 1,789,841 Cash flows from operating activities- Operating income(loss) $ (217,563) Adjustments to reconcile operating income(loss)to net cash provided by(used in)operating activities: Depreciation and amortization $ - Increase(decrease)due to changes in: Accounts receivable - Other current assets - Accounts payable - Accrued liabilities affecting operating activities 2,250 Other liabilities - Long-term compensation liability - Total adjustments 2,250 Net cash provided by(used in)operating activities $ (215,313) Noncash transactions affecting financial position: Contributions of fixed assets from other entities $ - SI-32 Storm Water Refuse Utility Collection Golf Total 384,254 105,542 23,960 513,756 384,254 105,542 23,960 513,756 (5,948,349) (430,116) (228,260) (7,561,827) 22,576,707 5,148,545 1,465,001 31,935,196 $ 16,628,358 $ 4,718,429 $ 1,236,741 $ 24,373,369 $ 13,499,214 $ 4,718,429 $ 1,236,741 $ 21,244,225 3,129,144 - - 3,129,144 $ 16,628,358 $ 4,718,429 $ 1,236,741 $ 24,373,369 $ 870,633 $ 220,030 $ (465,081) $ 408,019 $ 1,665,077 $ 801,366 $ 633,497 $ 3,099,940 (10,714) (59,305) (12,972) (82,991) (3,985) (99,399) 6,842 (96,542) (93,465) (18,807) 77,280 (34,992) 10,884 30,215 6,323 49,672 38,935 51,860 90,795 (24,102) (2,046) (26,148) 1,567,797 668,903 760,784 2,999,734 $ 2,438,430 $ 888,933 $ 295,703 $ 3,407,753 $ 784,536 $ - $ 3,609,150 $ 4,393,686 SI-33 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE INTERMODAL HUB FUND Year ended June 30,2005 Budgetary Basis Actual on Actual on Budgeted Amounts GAAP budgetary basis basis Original Final Variance Revenues and other sources: Grants and other contributions 3,584,899 $ 3,584,899 $ 3,500,000 $ 3,500,000 $ 84,899 Donations - - 1,400,000 1,400,000 (1,400,000) Other 11,226 11,226 8,400 8,400 2,826 Transfer in - - 1,700,000 1,700,000 (1,700,000) Total revenues and other sources 3,596,125 3,596,125 6,608,400 6,608,400 (3,012,275) Expenses and other uses: Personal services 73,215 73,215 - (73,215) Operating and Maintenance 24,851 24,851 6,000 6,000 (18,851) Charges and services 130,723 130,723 114,000 114,000 (16,723) Total expenses before capital outlay 228,789 228,789 120,000 120,000 (108,789) Capital outlay-Construction and purchase of property - 4,324,688 7,200,000 7,200,000 2,875,312 Total expenses and other uses 228,789 4,553,477 7,320,000 7,320,000 2,766,523 Change in net assets $ 3,367,336 $ (957,352) $ (711,600) $ (71 1,600) $ (245,752) SI-34 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE STORM WATER UTILITY FUND Year ended June 30,2005 Budgetary Basis Actual on Actual on Budgeted Amounts GAAP budgetary basis basis Original Final Variance Revenues and other sources: Operating revenue-sales and charges for current services $ 5,322,084 $ 5,322,084 $ 5,358,151 $ 5,358,151 $ (36,067) Gain on sale of assets 53,963 - - - - Equipment disposition proceeds - 53,936 - - 53,936 Interest income 384,254 384,254 200,000 200,000 184,254 Impact fees 821,920 821,920 200,000 200,000 621,920 Contributions and nonoperating grants 824,998 824,998 716,000 716,000 108,998 Total revenues and other sources 7,407,219 7,407,192 6,474,151 6,474,151 933,041 Expenses and other uses: Personal services 1,369,638 1,369,638 1,482,318 1,482,318 112,680 Accrued compensated absences 5,034 - - - - Operating and maintenance 81,080 81,080 123,900 123,900 42,820 Charges and services 1,330,622 1,330,622 1,272,008 1,272,008 (58,614) Depreciation and amortization 1,665,077 - - - - Transfers out 1,195 1,195 800 800 (395) Expenses before debt service 4,452,646 2,782,535 2,879,026 2,879,026 96,491 and capital outlay Debt service: Principal - 229,200 249,600 249,600 20,400 Interest 322,215 322,215 390,400 390,400 68,185 Capitalized interest (261,936) - - - - Capital outlay: Land - 500 - - (500) Buildings - 63,872 1,000,000 1,120,000 1,056,128 4 Improvements other than buildings - 9,305,802 16,004,000 16,124,000 6,818,198 Equipment - 49,418 499,200 499,200 449,782 Total expenses and other uses 4,512,925 12,753,542 21,022,226 21,262,226 8,508,684 Change in net assets $ 2,894,294 $ (5,346,350) $ (14,548,075) $ (14,788,075) $ 9,441,725 SI-35 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE REFUSE COLLECTION FUND Year ended June 30,2005 Budgetary Basis Actual on Actual on Budgeted Amounts GAAP budgetary basis basis Original Final Variance Revenues and other sources: Refuse collection fees $ 7,352,743 $ 7,352,743 $ 7,331,352 $ 7,331,352 $ 21,391 Fixed asset disposition proceeds - 143,528 115,500 115,500 28,028 Gain on fixed asset disposition 68,154 - - - - Rental and other 7,895 7,895 - - 7,895 Proceeds from debt - - - 687,382 (687,382) Interest income 105,542 105,542 80,004 80,004 25,538 Equity in joint venture income 721,137 - - - Total revenues and other sources 8,255,471 7,609,708 7,526,856 8,214,238 (604,530) Expenses and other uses: Personal services 1,718,401 1,718,401 1,963,461 1,963,461 245,060 Accrued compensated absences 2,707 - - - - Operating and maintenance 92,260 92,260 61,920 63,085 (29,175) Charges and services 4,525,874 4,525,874 4,903,608 4,905,780 379,906 Depreciation 801,366 - - - - Transfers out 2,391 2,391 2,184 2,184 (207) Total expenses before debt service and capital outlay 7,142,999 6,338,926 6,931,173 6,934,510 595,584 Debt service: Principal - 595,348 840,348 840,348 245,000 Interest 47,612 47,612 71,652 71,652 24,040 Capital outlay-purchase of equipment - 922,768 295,644 983,026 60,258 Total expenses and other uses 7,190,611 7,904,654 8,138,817 8,829,536 924,882 Change in net assets $ 1,064,860 $ (294,946)' $ (611,961) $ (615,298) $ 320,352 SI-36 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE GOLF FUND Year ended June 30,2005 Budgetary Basis Actual on Actual on GAAP budgetary basis basis Original Final Variance Revenues and other sources: Admissions and fees $ 4,922,066 $ 4,922,066 $ 5,912,343 $ 5,912,343 $ (990,277) Equipment and facility rental 1,728,927 1,728,927 2,062,141 2,062,141 (333,214) Retail sales and concessions 854,760 854,760 830,988 830,988 23,772 Interest income 23,960 23,960 50,000 50,000 (26,040) Loss on sale of assets (416) - - - - Fixed asset disposition proceeds 464 - - 464 Intergovernmental - - - - - Public Donations - - - - - Other revenue 2,542 2,542 1,000 1,000 1,542 Total revenues and other sources 7,531,839 7,532,719 8,856,472 8,856,472 (1,323,753) Expenses and other uses: Personal services 3,531,200 3,531,200 3,822,903 3,822,903 291,703 Accrued compensated absences (4,028) - - - - Operating and maintenance 1,176,507 1,176,507 1,224,855 1,224,855 48,348 Charges and services 2,636,200 2,636,200 2,899,825 2,899,825 263,625 Depreciation 633,497 - - - Transfers out 10,161 10,161 9,400 9,400 (761) Total expenses before debt service and capital outlay 7,983,537 7,354,068 7,956,983 7,956,983 602,915 Debt Service: Principal - 446,917 422,792 422,792 (24,125) Interest 43,818 43,818 68,724 68,724 24,906 Capital outlay-purchase of equipment - 490,735 408,950 408,950 (81,785) Total expenses and other uses 8,027,355 8,335,538 8,857,449 8,857,449 521,911 Change in net assets $ (495,516) $ (802,819) $ (977) $ (977) $ (801,842) SI-37 This page intentionally left blank SI-38 Major Enterprise Funds and Governmental Funds — Budgetary Comparison Schedules SI-39 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE WATER UTILITY FUND Year ended June 30,2005 Budgetary Basis Actual on Actual on Budgeted Amounts GAAP budgetary basis basis Original Final Variance Revenues and other sources: Operating revenue-sales and charges for current services $ 43,344,777 $ 43,344,777 $ 46,222,080 $ 46,222,080 $ (2,877,303) Equipment disposition proceeds - 90,252 50,000 50,000 40,252 Gain on sale of assets 138,280 - - - - Interest income 802,547 802,547 500,000 500,000 302,547 Contributions and nonoperating grants 1,161,855 1,161,855 855,000 855,000 306,855 Impact fees 1,134,300 1,134,300 - - 1,134,300 Total revenues and other sources 46,581,759 46,533,731 47,627,080 47,627,080 (1,093,349) Expenses and other uses: Personal services 14,012,476 14,012,476 13,990,455 13,990,455 (22,021) Accrued compensated absences 90,886 - - - - Operating and maintenance 1,977,061 1,977,061 2,373,149 2,373,149 396,088 Charges and services 15,574,533 15,574,533 17,661,158 17,661,158 2,086,625 Depreciation and amortization 5,432,552 - - - - Transfers out 24,415 24,415 - - (24,415) Expenses before debt service and capital outlay 37,111,923 31,588,485 34,024,762 34,024,762 2,436,277 Debt service: Principal - 3,382,400 3,552,070 3,552,070 169,670 Interest 1,335,373 1,335,373 1,185,676 1,185,676 (149,697) Capitalized interest (422,038) - - - - Capital outlay: Land and water rights - 253,600 530,000 530,000 276,400 Buildings - 5,738,254 10,444,000 10,684,000 4,945,746 Improvements other than buildings - 8,160,293 9,645,261 12,123,943 3,963,650 Equipment - 1,458,410 1,982,700 2,280,700 822,290 Total expenses and other uses 38,025,258 51,916,815 61,364,469 64,381,151 12,464,336 Change in net assets $ 8,556,501 $ (5,383,084) $ (13,737,389) $ (16,754,071) $ 11,370,987 SI-40 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE DEPARTMENT OF AIRPORTS Year ended June 30,2005 Budgetary Basis Actual on Actual on Budgeted Amounts GAAP budgetary basis basis Original Final Variance Revenues and other sources: Airfields $ 16,107,268 $ 16,107,268 $ 15,187,400 $ 15,187,400 $ 919,868 Terminals 32,430,654 32,430,654 29,955,000 29,955,000 2,475,654 Landside 32,584,986 32,584,986 27,184,400 27,184,400 5,400,586 Auxiliary airports 446,978 446,978 394,000 394,000 52,978 General aviation 1,472,099 1,472,099 1,486,400 1,486,400 (14,301) Support areas 6,361,259 6,361,259 6,385,100 6,385,100 (23,841) Other revenue 1,745,307 1,745,307 1,536,500 1,536,500 208,807 Gain on equipment disposition 1,310,507 - - - - Equipment disposition proceeds - 2,579,562 - 12,334 2,567,228 Interest income 3,007,120 2,253,612 2,000,000 2,000,000 253,612 Passenger facility charges 38,376,148 38,376,148 80,111,300 80,111,300 (41,735,152) 4+ Contributions for aid in construction 19,123,668 19,123,668 43,117,800 43,117,800 (23,994,132) A Total revenues and other sources 152,965,994 153,481,541 207,357,900 207,370,234 (53,888,693) Expenses and other uses: Personal services 33,624,324 33,624,324 35,460,868 35,678,768 2,054,444 Accrued compensated absences 76,874 - - - - Capitalized personal services (2,072,873) - - - - Operating and maintenance 6,115,389 6,115,389 6,187,300 6,187,300 71,911 Charges and services 23,163,083 23,163,083 25,255,720 25,037,820 1,874,737 Depreciation and amortization 39,435,645 - - - - Participating airline rebate 4,065,301 4,065,301 4,444,900 4,444,900 379,599 Transfers out 42,928 42,928 300,000 300,000 257,072 Total expenses before debt service and capital outlay 104,450,671 67,011,025 71,648,788 71,648,788 4,637,763 Debt service: Principal - 3,050,000 3,050,000 3,050,000 - Interest 1,817,676 1,817,676 1,216,100 1,216,100 (601,576) Capitalized interest (543,416) - - - - Capital outlay ,* Land - 1,167,939 4,997,000 4,997,000 3,829,061 Equipment - 4,977,194 5,440,300 5,440,300 463,106 Construction,including multi- yearprojects - 58,783,008 156,118,100 156,130,444 97,347,436 Total expenses and other uses 105,724,931 136,806,842 242,470,288 242,482,632 105,675,790 y Change in net assets $ 47,241,063 $ 16,674,699 $ (35,112,388) $ (35,112,398) $ 51,787,097 1 SI-41 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE SEWER UTILITY FUND Year ended June 30,2005 Budgetary Basis Actual on Actual on Budgeted Amounts GAAP budgetary basis basis Original Final Variance Revenues and other sources: Operating revenue-sales and charges for current services $ 15,865,018 $ 15,865,018 $ 16,400,344 $ 17,400,344 $ (1,535,326) Equipment disposition proceeds - 51,721 10,000 I0,000 41,721 Gain on sale of assets 58,182 - - - - Interest income 597,617 597,617 450,000 450,000 147,617 Impact fees 368,545 368,545 325,000 325,000 43,545 Contributions and non-operating grants 2,375,127 1,929,222 500,000 1,500,000 429,222 Total revenues and other sources 19,264,489 18,812,123 17,685,344 19,685,344 (873,221) Expenses and other uses: Personal services 5,832,575 5,832,575 5,982,250 5,982,250 149,675 Accrued compensated absences 38,186 - - - - Operating and maintenance 1,044,462 1,044,462 1,368,934 1,368,934 324,472 Charges and services 2,102,221 2,102,221 2,320,642 2,320,642 218,421 Depreciation and amortization 3,637,990 - - - Transfers out 18,932 18,932 - - (18, Expenses before debt service and capital outlay 12,674,366 8,998,190 9,671,826 9,671,826 673,636 Debt service: Principal - 1,198,400 1,190,570 1,190,570 (7,830) Interest 1,047,816 1,047,816 1,143,880 1,143,880 96,064 Capitalized interest (1,062,271) - - - - Capital outlay: Buildings - 16,034,886 26,750,000 28,150,000 12,115,114 Improvements other than buildings - 2,622,735 4,324,000 4,494,000 1,871,265 Equipment - 355,009 1,068,000 1,181,495 826,486 Total expenses and other uses 12,659,911 30,257,036 44,148,276 45,831,771 15,574,735 Change in net assets $ 6,604,578 $ (11,444,913) $ (26,462,932) $ (26,146,427) $ 14,701,514 SI-42 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE REDEVELOPMENT AGENCY FUND Year ended June 30,2005 Budgetary Basis Actual on Actual on Budgeted Amounts GAAP budgetary basis basis Original Final Variance Revenues and other sources: Operating income-rental and other $ 2,030,824 $ 2,030,824 $ 2,019,558 $ 1,338,858 $ 691,966 Property taxes 20,850,309 20,850,309 31,326,414 20,850,309 Interest income 1,541,439 1,541,439 612,405 964,050 577,389 Property disposition proceeds - 20,608 1,018,007 1,038,007 (1,017,399) Gain on property disposition 608 - - - - Principal received on loans - 4,416,645 300,000 1,250,000 3,166,645 Total revenues and other sources 24,423,180 28,859,825 35,276,384 25,441,224 3,418,601 Expenses and other uses: Personal services 553,326 553,326 568,533 568,533 15,207 Accrued compensated absences 15,207 - - - - Operating and maintenance 1,589,385 1,589,385 12,317,483 12,326,433 10,737,048 Charges and services 9,125,304 9,125,304 35,060,953 25,041,390 15,916,086 Property tax refund designation - 216,500 216,500 216,500 - Loans made to residents and businesses - 6,046,134 9,421,678 9,421,678 3,375,544 Depreciation and amortization 1,733,120 - - - - Loss on writedown of land/buildings held for resale - - - - - Transfers Out 110,751 110,751 4,184 4,184 (106,567) ▪ Total expenses before debt service 13,127,093 17,641,400 57,589,331 47,578,718 29,937,318 4 Debt service: Principal - 6,705,000 10,869,418 10,869,418 4,164,418 ▪ Interest and fiscal charges 1,493,254 1,557,016 2,388,291 2,388,291 831,275 Accrued interest on capital appreciation bonds 2,658,403 - - - - Capital outlay- Land purchases - 1,389,653 6,547,207 6,547,207 5,157,554 Total expenses and other uses 17,278,750 27,293,069 77,394,247 67,383,634 40,090,565 Change in net assets $ 7,144,430 $ 1,566,756 $(42,117,863) $(41,942,410) $43,509,166 SI-43 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE CAPITAL PROJECTS FUND Year ended June 30,2005 Budgeted Amounts Actual Original Final (GAAP basis) Budget Budget Variance Revenues: Permits $ 735,314 $ - $ - $ 735,314 Assessments - 600,000 3,734,037 (3,734,037) Interest 398,634 - 172,317 226,317 Intergovernmental 5,795,746 5,159,359 16,051,981 (10,256,235) Contributions - 63,000 275,500 (275,500) Miscellaneous 121,652 - - 121,652 Total revenues 7,051,346 5,822,359 20,233,835 (13,182,489) Expenditures: Capital outlay 22,847,380 11,394,995 69,366,732 46,519,352 Total expenditures 22,847,380 11,394,995 69,366,732 46,519,352 Revenues under expenditures (15,796,034) (5,572,636) (49,132,897) 33,336,863 Other financing sources(uses): Proceeds from bond issuance - - 994,548 (994,548) Proceeds from sale of property 1,159,615 - - 1,159,615 Transfers in 20,055,090 19,725,243 20,936,593 (881,503) Transfers out (13,532,350) (14,523,450) (13,519,586) (12,764) Total other financing sources(uses): 7,682,355 5,201,793 8,411,555 (729,200) Net Change in Fund Balance (8,113,679) (370,843) (40,721,342) 32,607,663 Fund balance July 1,2004 41,877,669 41,877,669 41,877,669 - Fund balance June 30,2005 $ 33,763,990 $ 41,506,826 $ 1,156,327 $ 32,607,663 SI-44 Internal Service Funds Fleet Management Fund - This fund is used to account for the costs of the fleet management system which provides vehicles for use by City departments, and which provides vehicle maintenance on a cost-reimbursement basis. Information Management Services Fund - This fund is used to account for the costs of providing data processing services to City departments. Costs are recovered by charges to user departments. Risk Management Fund - This fund is used to account for the costs of providing insurance for employee health, accident, long-term disability, unemployment and worker's compensation. It also accounts for costs of the City's property damage insurance. Governmental Immunity Fund - This fund is used to account for payment of general liability claims against the City. Municipal Building Authority Fund - This fund is used to account for the acquisition and lease to the City of purchased or constructed property and equipment. This fund accounts for the bonds which were issued to purchase or construct the property and equipment and also accounts for the retirement of those bonds. Copy Center Fund - This fund is used to account for centralized photocopying and printing activities. SI-45 SALT LAKE CITY CORPORATION COMBINING STATEMENT OF NET ASSETS-INTERNAL SERVICE FUNDS June 30,2005 Information Fleet Management ASSETS Management Services Current assets: Cash and cash equivalents $ 4,706,060 $ - Receivables: Due from other governments - - Other assets Prepaid expenses - 199,906 Inventories of supplies,at cost 417,123 5,032 Total current assets 5,123,183 204,938 Restricted assets-cash and cash equivalents 126,799 - Property and equipment, at cost: Land - - Buildings 5,302 60,411 Improvements other than buildings - - Machinery and equipment 41,523,436 5,529,165 Leased property under capital leases 58,000 - Accumulated depreciation and amortization (25,985,049) (3,905,148) Net property and equipment 15,601,689 1,684,428 Total assets $ 20,851,671 $ 1,889,366 LIABILITIES AND NET ASSETS Current liabilities: Due to other funds for cash overdraft - 246,162 Accounts payable 319,861 22,519 Accrued liabilities 145,734 166,999 Deferred revenue - 139,909 Current portion of long-term compensation liability 50,240 95,030 Current portion of long-term debt 2,208,784 - Total current liabilities 2,724,619 670,619 Long-term liabilities: Notes payable 3,269,518 - Notes payable from restricted assets 126,799 - Obligations for compensation liabilities due after one year 297,578 716,430 Total long-term liabilities 3,693,895 716,430 Total liabilities 6,418,514 1,387,049 Net Assets: Invested in capital assets 9,996,588 1,684,428 Unrestricted(deficit) 4,436,569 (1,182,111) Total net assets 14,433,157 502,317 Total liabilities and net assets $ 20,851,671 $ 1,889,366 SI-46 Municipal Risk Governmental Building Copy Management Immunity Authority Center Total $ 5,517,474 $ 2,921,230 $ 8,861,421 $ 11,341 $ 22,017,526 - - 300,000 - 300,000 - - - - 199,906 - - - 2,591 424,746 A 5,517,474 2,921,230 9,161,421 13,932 22,942,178 - - - 126,799 62,741 - 7,404,846 - 7,467,587 127,384 - 66,642,291 - 66,835,388 - 15,655,124 - 15,655,124 16,837 - 4,056,790 16,150 51,142,378 - 58,000 (45,714) - (23,766,276) (8,075) (53,710,262) 161,248 - 69,992,775 8,075 87,448,215 $ 5,678,722 $ 2,921,230 $ 79,154,196 $ 22,007 $ 110,517,192 - - 246,162 38,219 79,322 - - 459,921 3,517,923 1,998,858 - - 5,829,514 34,582 - - - 174,491 17,943 - - - 163,213 - - 2,208,784 3,608,667 2,078,180 - - 9,082,085 - - - 3,269,518 - - 126,799 4 29,911 11,464 - - 1,055,383 A 29,911 11,464 - - 4,451,700 3,638,578 2,089,644 - - 13,533,785 161,248 - 69,992,775 8,075 81,843,114 1,878,896 831,586 9,161,421 13,932 15,140,293 2,040,144 831,586 79,154,196 22,007 96,983,407 $ 5,678,722 $2,921,230 $ 79,154,196 $ 22,007 $ 110,517,192 SI-47 SALT LAKE CITY CORPORATION COMBINING STATEMENT OF REVENUES,EXPENSES,AND CHANGES IN NET ASSETS INTERNAL SERVICE FUNDS Year ended June 30,2005 Information Fleet Management Management Services Operating revenue-charges for services $ 6,485,377 $ 7,361,929 Operating expenses: Personal services 2,506,055 5,171,506 Operating and maintenance 3,644,669 216,131 Charges and services including change in reserves 586,641 1,260,627 Depreciation and amortization 4,373,171 753,661 Total operating expenses 11,110,536 7,401,925 Operating income(loss) (4,625,159) (39,996) Nonoperating revenues(expenses): Interest income 3,699 26,020 Interest expense (259,807) - Gain(loss)on property and equipment dispostion 283,390 (538) Total nonoperating revenues(expenses) 27,282 25,482 Loss before operating transfers (4,597,877) (14,514) Transfers in 5,050,586 197,699 Transfers out (16,989) - Change in net assets 435,720 183,185 Net Assets July 1,2004 13,997,437 319,132 Net Assets June 30,2005 $ 14,433,157 $ 502,317 SI-48 Govern- Municipal Risk mental Building Copy Management Immunity Authority Center Total $27,842,599 $ 232,147 $ 2,330,655 $ - $ 44,252,707 577,790 383,638 - - 8,638,989 12,111 19,077 - - 3,891,988 27,372,448 896,554 3,129 - 30,119,399 2,716 - 2,105,491 3,230 7,238,269 27,965,065 1,299,269 2,108,620 3,230 49,888,645 (122,466) (1,067,122) 222,035 (3,230) (5,635,938) 97,018 73,790 204,798 - 405,325 - - (2,712,296) - (2,972,103) - - - - 282,852 97,018 73,790 (2,507,498) - (2,283,926) (25,448) (993,332) (2,285,463) (3,230) (7,919,864) 66,000 1,300,000 64,305,274 - 70,919,559 (6,276) - (109,382) (105,540) (238,187) 34,276 306,668 61,910,429 (108,770) 62,761,508 2,005,868 524,918 17,243,767 130,777 34,221,899 $ 2,040,144 $ 831,586 $ 79,154,196 $ 22,007 $ 96,983,407 SI-49 SALT LAKE CITY CORPORATION COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS Year ended June 30,2005 Information Fleet Management Management Services Increase(decrease)in cash and cash equivalents: Cash flows from operating activities- Receipts from customers and users 6,705,093 7,391,835 Payments to suppliers (4,211,803) (1,847,761) Payments to employees (2,443,967) (5,090,547) Net cash provided by(used in)operating activities 49,323 453,527 Cash flows from noncapital financing activities: Transfers in 5,050,586 197,699 Transfers out (16,989) - Net cash provided by(used in) noncapital financing activities 5,033,597 197,699 Cash flows from capital and related financing activities: Proceeds from issuance of debt net of discount and issuance costs 1,914,068 - Proceeds from sale of equipment 471,430 11,385 Payments on long-term obligations (3,535,088) - Payments for purchase of fixed assets (3,747,464) (688,631) Net cash used in capital financing activities (4,897,054) (677,246) Cash flows from investing activities: Interest received on investments 3,699 26,020 Net cash provided by investing activities 3,699 26,020 Net increase(decrease)in cash and cash equivalents 189,565 - Cash and cash equivalents at beginning of year 4,643,294 - Cash and cash equivalents at end of year $ 4,832,859 $ - Cash and cash equivalent components: Unrestricted $ 4,706,060 $ - Restricted 126,799 - Cash and cash equivalents at end of year $ 4,832,859 $ - Reconciliation of operating income to net cash provided by(used in)operating activities: Operating income(loss) $ (4,625,159) $ (39,996) Adjustments to reconcile operating income(loss)to net cash provided by(used in)operating activities: Depreciation and amortization 4,373,171 753,661 Increase(decrease)due to change in: Inventories of supplies (13,729) 50,597 Other current assets 219,716 207,101 Due to other funds for cash overdraft - (369,890) Accounts payable 33,236 (257,174) Accrued liabilities affecting operating income 30,550 53,968 Deferred revenue - 28,269 Long-term compensation liability 31,538 26,991 Total adjustments 4,674,482 493,523 Net cash provided by(used in)operating activities $ 49,323 $ 453,527 SI-50 Govern- Municipal Risk mental Building Copy Management Immunity Authority Center Total 27,842,814 232,147 2,030,655 17,992 44,220,536 (26,796,616) (843,711) (8,029) (6,563) (33,714,483) (552,295) (413,928) - (8,500,737) 493,903 (1,025,492) 2,022,626 11,429 2,005,316 66,000 1,300,000 64,305,274 - 70,919,559 (6,276) - (109,382) (105,540) (238,187) 59,724 1,300,000 64,195,892 (105,540) 70,681,372 - - 1,914,068 - _ - 482,815 - - (66,469,147) - (70,004,235) - - (4,436,095) - - (66,469,147) - (72,043,447) 97,018 73,790 150,991 - 351,518 97,018 73,790 150,991 - 351,518 650,645 348,298 (99,638) (94,111) 994,759 4,866,829 2,572,932 8,961,059 105,452 21,149,566 $ 5,517,474 $ 2,921,230 $ 8,861,421 $ 11,341 $ 22,144,325 $ 5,517,474 $ 2,921,230 $ 8,861,421 $ 11,341 $ 22,017,526 - 126,799 $ 5,517,474 $ 2,921,230 $ 8,861,421 $ 11,341 $ 22,144,325 ' $ (122,466) $ (1,067,122) $ 222,035 $ (3,230) $ (5,635,938) 2,716 - 2,105,491 3,230 7,238,269 A - - - 2,892 39,760 10,278 - (300,000) 15,100 152,195 (369,890) (62,176) 71,920 (4,900) (6,563) (225,657) 677,257 (34,716) - - 727,059 (10,063) - - - 18,206 (1,643) 4,426 - - 61,312 616,369 41,630 1,800,591 14,659 7,641,254 $ 493,903 $ (1,025,492) $ 2,022,626 $ 11,429 $ 2,005,316 SI-51 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE FLEET MANAGEMENT FUND Year ended June 30,2005 Budgetary Basis Actual on Actual on Budgeted Amounts GAAP budgetary basis basis Original Final Variance Revenues and other sources: Charges for maintenance $ 6,485,377 $ 6,485,377 $ 6,285,525 $ 6,285,525 $ 199,852 Interest income 3,699 3,699 - - 3,699 Gain on sale of equipment 283,390 - - - - Proceeds from note - - - 2,023,954 (2,023,954) Proceeds from sale of equipment - 471,430 400,000 400,000 71,430 Transfers in 5,050,586 5,050,586 5,010,381 5,050,586 - Total revenues and other sources 11,823,052 12,011,092 11,695,906 13,760,065 (1,748,973) Expenses and other uses: Personal services 2,455,791 2,455,791 2,509,771 2,509,771 53,980 Accrued compensated absences 50,264 - - - - Operating and maintenance 3,644,669 3,644,669 3,713,664 3,739,117 94,448 Charges and services 586,641 586,641 670,022 670,228 83,587 Depreciation 4,373,171 - - - - Transfers out 16,989 16,989 16,200 16,200 (789) Total expenses before debt service and capital outlay 11,127,525 6,704,090 6,909,657 6,935,316 231,226 Debt service: Principal - 3,275,281 4,022,268 4,022,268 746,987 Interest 259,807 259,807 346,980 346,980 87,173 Capital outlay - 3,747,464 466,500 3,501,597 (245,867) Total expenses and other uses 11,387,332 13,986,642 11,745,405 14,806,161 819,519 Change in net assets $ 435,720 $ (1,975,550) $ (49,499) $(1,046,096) $ (929,454) SI-52 4 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE INFORMATION MANAGEMENT SERVICES FUND Year ended June 30,2005 Budgetary Basis Actual on Actual on Budgeted Amounts GAAP budgetary basis basis Original Final Variance Revenue: Charges for services $ 7,361,190 $ 7,361,190 $ 7,213,459 $ 7,277,776 $ 83,414 Interest income 26,020 26,020 75,000 28,183 (2,163) Proceeds from sale of equipment - 11,385 35,000 17,500 (6,115) Loss on equipment disposition (538) - - - - Miscellaneous revenue 739 739 2,078 2,078 (1,339) Transfers in 197,699 197,699 178,994 178,994 18,705 Total revenues and other sources 7,585,110 7,597,033 7,504,531 7,504,531 92,502 Expenses and other uses: Personal services 5,108,019 5,108,019 5,063,127 5,101,867 (6,152) Accrued compensated absences 63,487 - - - - Operating and maintenance 216,131 216,131 148,228 198,726 (17,405) Charges and services 1,260,627 1,260,627 1,835,208 1,563,970 303,343 Depreciation 753,661 - - - 1 Total expenses before capital outlay 7,401,925 6,584,777 7,046,563 6,864,563 279,786 Capital outlay - 688,631 492,722 674,722 (13,909) Total expenses and other uses 7,401,925 7,273,408 7,539,285 7,539,285 265,877 '' Change in net assets $ 183,185 $ 323,625 $ (34,754) $ (34,754) $ 358,379 t SI-53 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE RISK MANAGEMENT FUND Year ended June 30,2005 Budgetary Basis Actual on Actual on Budgeted Amounts GAAP budgetary basis basis Original Final Variance Revenues and other sources: Charges for services $27,825,379 $27,825,379 $27,662,647 $28,244,561 $ (419,182) Interest income 97,018 97,018 20,376 20,376 76,642 Miscellaneous 17,220 17,220 27,576 27,576 (10,356) Transfers in 66,000 66,000 66,000 66,000 - Total revenues and other sources 28,005,617 28,005,617 27,776,599 28,358,513 (352,896) Expenses and other uses: Personal services 569,520 569,520 551,840 723,060 153,540 Accrued compensated absences 8,270 - - - - Operating and maintenance 12,111 12,111 14,538 14,538 2,427 Premiums and other charges for services 26,722,329 26,722,329 27,210,882 27,621,576 899,247 Change in reserves 650,119 - - - - Depreciation 2,716 - - - - Transfers out 6,276 6,276 - - (6,276) Total expenses before capital outlay 27,971,341 27,310,236 27,777,260 28,359,174 1,048,938 Capital outlay - - 2,000 2,000 2,000 Total expenses and other uses 27,971,341 27,310,236 27,779,260 28,361,174 1,050,938 Change in net assets $ 34,276 $ 695,381 $ (2,661) $ (2,661) $ 698,042 SI-54 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE GOVERNMENTAL IMMUNITY FUND Year ended June 30,2005 Budgetary Basis Actual on Actual on Budgeted Amounts GAAP budgetary basis basis Original Final Variance Revenues and other sources- Interfund service charges $ 232,147 $ 232,147 $ 104,586 $ 104,586 $ 127,561 Interest income 73,790 73,790 73,355 73,355 435 Transfers in 1,300,000 1,300,000 1,300,000 1,300,000 - Total revenues 1,605,937 1,605,937 1,477,941 1,477,941 127,996 Expenses: Personal services 379,212 379,212 426,150 426,150 46,938 Accrued compensated absences 4,426 - - - - Operating and maintenance 19,077 19,077 17,200 17,200 (1,877) Claims,charges and services 860,554 860,554 1,036,280 1,036,280 175,726 Change in reserves 36,000 - - - - Total expenses 1,299,269 1,258,843 1,479,630 1,479,630 220,787 Change in net assets $ 306,668 $ 347,094 $ (1,689) $ (1,689) $ 348,783 1 SI-55 SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE MUNICIPAL BUILDING AUTHORITY FUND Year ended June 30,2005 Budgetary Basis Actual on Actual on Budgeted Amounts GAAP budgetary basis basis Original Final Variance Revenues and other sources: Charges for services $ 2,030,655 $ 2,030,655 $ 2,539,913 $ 2,030,656 $ (I) Intergovernmental 300,000 300,000 - 300,000 Property sale proceeds - - - 500,000 (500,000) Interest income 204,798 204,798 - - 204,798 Transfers in 64,305,274 64,305,274 3,043,943 65,242,262 (936,988) Total revenues and other sources 66,840,727 66,840,727 5,583,856 67,772,918 (932,191) Expenses and other uses: Charges and services 3,129 3,129 10,000 10,000 6,871 Depreciation and amortization 2,105,491 - - - - Total expenses before debt service and capital outlay 2,108,620 3,129 10,000 10,000 6,871 Debt service: Principal - 63,756,851 2,415,000 65,015,720 1,258,869 Interest 2,712,296 2,712,296 3,454,085 2,542,427 (169,869) Capital outlay-acquisition&construction - - - 540,069 540,069 Transfers out 109,382 109,382 80,000 (29,382) Total expenses and other uses 4,930,298 66,581,658 5,879,085 68,188,216 1,606,558 Change in net assets $ 61,910,429 $ 259,069 $ (295,229) $ (415,298) $ 674,367 SI-56 1 I SALT LAKE CITY CORPORATION BUDGETARY COMPARISON SCHEDULE COPY CENTER FUND Year ended June 30,2005 Budgetary Basis Actual on Actual on Budgeted Amounts GAAP budgetary basis basis Original Final Variance Expenses and other uses: Charges and services - - - 165 165 Depreciation 3,230 - - - - Transfers out 105,540 105,540 81,540 105,540 - Total expenses and other uses 108,770 105,540 81,540 105,705 165 Change in net assets $ (108,770) $ (105,540) $ (81,540) $ (105,705) $ 165 SI-57 This page intentionally left blank. SI-58 Project Schedules SI-59 SALT LAKE CITY CORPORATION SCHEDULE OF PROJECT EXPENDITURES CAPITAL PROJECTS FUND As of June 30,2005 Prior years' Current year Total Project expenditures expenditures project Project budget and transfers and transfers expenditures balance 1000 West Reconstruction $ 35,000 $ - $ 25,829 $ 25,829 $ 9,171 1300 East Reconstruction 200,000 - - - 200,000 1300 South Reconstruction 860,000 31,081 631,138 662,219 197,781 2100 South Reconstruction 475,850 308,692 28,509 337,201 138,649 500 West Reconstruction 996,857 809,138 199,052 1,008,190 (11,334) 700 East Reconstruction 199,090 100,565 68,400 168,965 30,125 800 Radio Communication System 62,000 - 61,717 61,717 283 800 South Reconstruction 34,000 4,961 - 4,961 29,039 900 South Reconstruction 7,938,309 220,068 961,077 1,181,145 6,757,164 ADA Modifications-Parks 1,025,000 83,621 425,614 509,235 515,765 ADA Modifications-Ramp/Corner Repairs 1,674,999 568,804 458,268 1,027,072 647,927 Bonneville Boulevard Salt Dome 1,017,404 637,384 - 637,384 380,020 Bridge Rehabilitation 402,658 258,529 33,645 292,174 110,484 City/County Landfill 11,030,433 5,415,926 934,182 6,350,108 4,680,325 City Facility Improvements 2,602,687 625,528 114,206 739,734 1,862,953 Community Action Program 10,828 2,022 - 2,022 8,806 Concrete Replacement 9,181,396 5,980,135 1,650,098 7,630,233 1,551,163 Contingency 1,787,071 - - - 1,787,071 Debt Service-City/County Building 5,281,597 2,308,495 2,973,101 5,281,596 1 Debt Service- Library GO Bond 6,923,900 - 6,923,900 6,923,900 - Debt Service-Justice Court 150,693 - - - 150,693 Debt Service-Motor Fuel Excise Tax Bond 5,547,306 3,785,884 1,761,422 5,547,306 - Debt Service-Pioneer Precinct 53,343 - - - 53,343 Debt Service- Sales Tax 968,537 - 968,537 968,537 - Debt Service-Zoo&Aviary Bond 894,056 - 894,056 894,056 - Emigration Canyon Improvements 425,000 18,025 240,444 258,469 166,5" Engineering 100,000 2,005 97,995 100,000 - Fen way/Strong Court Improvements 180,000 - - - 180,000 Fire Training Center 36,086 34,617 1,469 36,086 - Fremont/Remington Way 37,000 - 29,881 29,881 7,119 FTZ Warehouse 500,000 39,615 226,988 266,603 233,397 Gateway Reconstruction 4,327,054 3,294,259 55,325 3,349,584 977,470 Gladiola Street Reconstruction 700,000 141,982 15,735 157,717 542,283 Glendale Park 240,000 - 34,121 34,121 205,879 Guardsman Way Reconstruction 1,378,884 1,328,602 22,808 1,351,410 27,474 Hogle Zoo 10,355,109 173,316 5,305,110 5,478,426 4,876,683 Human Resource Information System 185,500 168,319 - 168,319 17,181 IFAS Implementation 2,290,906 1,989,887 - 1,989,887 301,019 Impact Fees 1,918,445 - 30,550 30,550 1,887,895 Jordan River Parkway 2,455,705 1,054,601 447,796 1,502,397 953,308 Land Acquisition 3,265,400 - - - 3,265,400 Leonardo 50,000 25,000 - 25,000 25,000 Liberty Park Improvements 10,493,496 6,597,585 2,807,188 9,404,773 1,088,723 Liberty Wells 60,000 - 1 1 59,999 Library Block Reconstruction 3,505,563 3,408,076 87,955 3,496,031 9,532 Light Rail Corridor Construction 12,930,000 11,568,944 - 11,568,944 1,361,056 Local Street Reconstruction 5,099,871 2,575,740 1,143,594 3,719,334 1,380,537 Military Drive 101,500 98,116 3,384 101,500 - Mitigation-Foothills 28,000 - - - 28,000 Neighborhood Legacy Project 822,500 173,353 145,949 319,302 503,198 Open Space 307,944 108,324 12,344 120,668 187,276 Park Improvements 3,651,968 1,771,020 696,431 2,467,451 1,184,517 Parley's Crossing 775,000 - - - 775,000 Path Study/Development 380,001 145,129 31,056 176,185 203,816 Percent for Art 255,999 33,543 49,470 83,013 172,9r Pedestrian Safety Devices 450,000 210,443 15,499 225,942 224,0_ Physical Access Ramps 500,000 199,683 262,857 462,540 37,460 Property Management 515,915 475,737 5,141 480,878 35,037 Public Safety Radio Communication System 607,600 - 605,905 605,905 1,695 SI-60 SALT LAKE CITY CORPORATION SCHEDULE OF PROJECT EXPENDITURES ' CAPITAL PROJECTS FUND(cont.) As of June 30,2005 Prior years' Current year Total Project expenditures expenditures project Project budget and transfers and transfers expenditures balance (continued) Quayle Avenue $ 120,000 $ 20,311 $ 81,126 $ 101,437 $ 18,563 ,, Quiet Zone 700,000 549,640 83,510 633,150 66,850 ▪ Riverpark Community Garden 9,020 7,596 1,424 9,020 0 A Riverside Park Improvements 125,000 - 110,575 110,575 14,425 Rosewood Park Improvements 889,100 11,939 9,143 21,082 868,018 Rotary Glen Park Improvements 285,000 15,761 - 15,761 269,239 Sidewalk Replacement 3,623,271 481,241 654,005 1,135,246 2,488,025 South Temple Reconstruction 1,830,000 1,592,217 123,484 1,715,701 114,299 A State Street Reconstruction 895,830 868,386 - 868,386 27,444 s Street Lighting Improvements 2,836,948 267,621 1,957,099 2,224,720 612,228 SugarHouse Business District 116,829 115,774 1,055 116,829 - • Tracy Aviary 1,1 17,208 104,118 907,377 1,011,495 105,713 Traffic Calming 644,710 70,007 152,014 222,021 422,689 Traffic Island Landscaping 123,000 8,232 80,478 88,710 34,290 • Traffic Signal Improvements 1,750,000 709,736 274,065 983,801 766,199 Unity Center 300,000 74,240 51,900 126,140 173,860 Urban Forestry Program 19,707 19,707 - 19,707 0 • Utahna Drive 903,000 43,604 355,636 399,240 503,760 Wasatch Drive Reconstruction 51,120 - 49,092 49,092 2,028 Total Projects $ 144,623,203 $ 61,736,884 $ 36,379,730 $ 98,116,614 $ 46,506,589 At At At SI-61 SALT LAKE CITY CORPORATION SCHEDULE OF PROJECT EXPENDITURES COMMUNITY DEVELOPMENT OPERATING FUND As of June 30,2005 Prior years' Current year Total Project expenditures expenditures project Project budget and transfers and transfers expenditures balance Administrative Support-30th Year $ 751,912 $ - $ 726,489 $ 726,489 $ 25,423 Alliance House 60,000 - - - 60,000 Boys&Girls Club-Bus Driver 3,896 3,684 212 3,896 - Capitol Hill Master Plan 70,000 65,838 - 65,838 4,162 Capitol West Boys&Girls Club 84,500 42,896 37,603 80,499 4,001 Central City Community Center Plan 25,000 - - - 25,000 Central Community Development Plan 10,001 722 - 722 9,279 Centro de la Familia de Utah 38,000 7,246 - 7,246 30,754 Cleaning/Securing Vacant Property 190,072 103,035 5,845 108,880 81,192 Community Health Center 90,000 - 90,000 90,000 - Contingency 385,736 12,525 6,375 18,900 366,836 Crossroads Urban Center Food Pantry 16,000 - 16,000 16,000 - Emergency Home Repair(ASSIST) 705,000 350,806 344,970 695,776 9,224 Emergency Repair Fund SLC HAND 10,000 - - - 10,000 Family Support Center Improvements 20,000 7,500 10,007 17,507 2,493 Friendly Neighborhood Center 120,000 - - - 120,000 Guadalupe Early Learning Center 55,000 - 55,000 55,000 - Habitat for Humanity 28,315 - - - 28,315 Housing Match-Capital Planning 584,486 176,562 11,885 188,447 396,039 Housing Outreach Rental Program 32,000 - 32,000 32,000 - Housing Rehabilitation 2,604,784 727,074 1,406,546 2,133,620 471,164 Indian Walk-in Center 18,000 - - - 18,000 Kids Café Kitchen 15,000 - 15,000 15,000 - Kostopulos Dream Foundation 10,000 - 8,349 8,349 1,651 Lead-based Paint Training 15,000 - 450 450 14,550 Legal Aid Society of Utah 10,000 - 10,000 10,000 - Lifecare Home Improvement Project 131,000 46,959 81,601 128,560 2,44 Literacy Action Center 5,000 - 5,000 5,000 - Mobile Neighborhood Watch 5,000 - 4,782 4,782 219 Multi-Ethnic Development Corp 10,000 - - - 10,000 Multi-Family Housing 201,422 - - - 201,422 Neighborhood House 46,800 - 46,800 46,800 - Neighborhood Housing Services Revolving Loan 449,999 204,149 69,633 273,782 176,217 Neighborhood Self-Help Grants 19,999 9,315 - 9,315 10,684 Northwest Food Bank 25,000 - 25,000 25,000 - Northwest Mulipurpose Center Plan 40,000 - - - 40,000 Odessey House 8,000 - - - 8,000 People Helping People 20,000 13,516 3,750 17,266 2,734 Rape Crisis Center 67,000 30,984 33,354 64,338 2,662 Road Home 126,000 - 126,000 126,000 - Salt Lake Community Development Corp. 345,000 99,167 115,000 214,167 130,833 Salt Lake Donated Dental Program 30,000 28,924 994 29,918 82 Sarah Daft House 10,000 - 10,000 10,000 - Sorenson Computer Clubhouse 11,650 - 11,625 11,625 25 St. Mary's Home for Men 23,036 - 3,334 3,334 19,702 St. Vincent DePaul 70,500 - 50,339 50,339 20,161 Sugarhouse Master Plan 86,367 56,112 19,855 75,967 10,400 Tenant Home Maintenance Training 11,000 - 11,000 11,000 - Tenth East Senior Center 43,316 14,274 26,689 40,963 2,353 TURN Community Services 53,000 - 17,271 17,271 35,729 Utah Alcoholism Foundation 33,091 - 10,591 10,591 22,500 Utah Federation for Youth 5,000 - - - 5,000 Utah Food Bank 75,000 - 75,000 75,000 - Utah Heritage Foundation 842,770 326,966 15,550 342,516 500,25 Utah Non-Profit Housing 30,000 - 30,000 30,000 - Valley Mental Health 15,000 - - - 15,000 Volunteers of America-Detox Center 40,000 - 39,928 39,928 72 Volunteers of America-Homeless Resource 39,500 - 34,140 34,140 5,360 SI -62 ,ate SALT LAKE CITY CORPORATION SCHEDULE OF PROJECT EXPENDITURES COMMUNITY DEVELOPMENT OPERATING FUND(cont.) As of September 30,2004 Prior years' Current year Total Project expenditures expenditures project Project budget and transfers and transfers expenditures balance (continued) Volunteers of America-Literacy $ 5,000 $ - $ 3,846 $ 3,846 $ 1,154 Wasatch Fish&Garden 20,000 7,500 10,000 17,500 2,500 Wasatch Homeless Health Care 27,000 - 27,000 27,000 - Wasatch Plunge Feasibility Study 25,000 - 12,000 12,000 13,000 Weigand Homeless Day Center 90,000 46,079 39,298 85,377 4,623 Westminster Master Plan 30,000 26,045 - 26,045 3,955 YMCA-After School Project 10,000 - 6,156 6,156 3,844 YWCA-Crisis Shelter 56,000 15,995 40,005 56,000 - Youth with a Voice 20,000 - 20,000 20,000 - Total Projects: $ 9,155,152 $ 2,423,873 $ 3,802,272 $ 6,226,145 $ 2,929,007 e 4 I SI-63 SALT LAKE CITY CORPORATION SCHEDULE OF PROJECT EXPENDITURES GRANTS OPERATING FUND Year ended June 30,2005 Current year Total Project Prior years' expenditures project Project budget expenditures and transfers expenditures balance American Dream Downpayment Initiative $ 177,518 $ - $ 5,000 $ 5,000 $ 172,518 Arts in Eduction 25,000 - 23,451 23,451 1,549 Boarded Transitional Housing 200,000 161,608 - 161,608 38,392 Citizen Corp Council 14,636 2,220 - 2,220 12,416 Citizen Corp Council 6,000 - 4,249 4,249 1,751 Citizen Corp Council 12,000 - - - 12,000 Clean Cities Program-Dept.of Energy 2,000 1,921 79 2,000 - Clean Cities Program-Dept.of Energy 60,000 30,828 29,172 60,000 - Clean Cities Program-Dept.of Energy 60,000 - 33,181 33,181 26,819 Clean Cities Program-State 79,175 73,884 - 73,884 5,291 Clean Cities Program-State 60,000 18,717 - 18,717 41,283 Clean Cities Program-State 4,000 1,876 1,033 2,909 1,091 Clean Cities Program-State 2,000 342 (342) - 2,000 Community Action Program 75,000 - 18,710 18,710 56,290 Community Development Corp.-27th Year 192,500 187,105 5,395 192,500 - Community Development Corp.-28th Year 135,000 - 82,650 82,650 52,350- Community Development Corp.-29th Year 75,000 64,000 11,000 75,000 - Community Development Corp.-29th Year 180,000 4,917 100,967 105,884 74,116 Community Development Corp.-30th Year 125,000 - 39,000 39,000 86,000 COPS in SHOPS 7,000 6,500 - 6,500 500 COPS in Schools 125,000 23,642 50,414 74,056 50,944 COPS Methamphetamine-Supplemental 295,102 257,107 37,995 295,102 - COPS School Based Partners 128,631 79,796 - 79,796 48,835 Criminal Justice Information 50,000 41,245 8,755 50,000 - Crisis Intervention Training 29,000 - 26,590 26,590 2,410 Critical Land Inventory 15,000 - - - 15,000 Dispatch Equipment and Training 4,568 - - - 4,568 Dispatch Grant from UDOT 59,000 - 59,000 59,000 - Drug Free Communities 100,000 24,411 53,778 78,189 21,811 Drug Free Communities 100,000 - 24,372 24,372 75,628 Economic Development Intiative 99,410 - - - 99,410 EDGAR Grant 1,217,437 414,623 615,593 1,030,216 187,221 EDGAR Grant 57,500 1,408 34,022 35,430 22,070 EDGAR Grant 216,340 - - - 216,340 EDGAR Grant 52,500 - 16,847 16,847 35,653 Emergency Management Equipment 40,205 - 40,205 40,205 - Emergency Medical Services 1,070,980 1,030,980 - 1,030,980 40,000 Emergency Medical Services 127,650 76,117 26,159 102,276 25,374 Emergency Medical Services 58,985 - - - 58,985 Emergency Medical Services 3,147 - 3,147 3,147 - Emergency Medical Services 14,249 - 12,009 12,009 2,240 Emergency Medical Services 97,930 - - - 97,930 Emergency Medical Services 10,000 - 2,898 2,898 7,102 Emergency Medical Services-Medical Equip. 91,273 - - - 91,273 Emergency Preparedness Grant 3,000 - - - 3,000 Emergency Preparedness Grant 36,538 - - - 36,538 Emergency Shelter Grant-29th Year 165,767 158,580 7,187 165,767 - Emergency Shelter Grant-30th Year 182,407 - 174,396 174,396 8,011 Emergency Shelter Grant-Holding 2,048 - - - 2,048 Family Support Center 50,000 49,000 1,000 50,000 - SI-64 SALT LAKE CITY CORPORATION SCHEDULE OF PROJECT EXPENDITURES GRANTS OPERATING FUND Year ended June 30,2005 Current year Total Project Prior years' expenditures project Project budget expenditures and transfers expenditures balance Fire Department Assistance Grant $ 5,000 $ - $ - $ - $ 5,000 Fire Prevention and Safety Grant 37,612 - 29,967 29,967 7,645 Gateway Brownsfield Grant 200,000 99,542 2,193 101,735 98,265 Gateway Brownsfield Grant-IPA Position 99,989 95,542 - 95,542 4,447 Grants to Encourage Arrests 500,000 12,745 161,463 174,208 325,792 Hazardous Materials Mitigation Grant 20,000 5,750 - 5,750 14,250 Hazardous Materials Mitigation Grant 24,500 20,500 - 20,500 4,000 Hazardous Materials Mitigation Grant 24,000 - 16,364 16,364 7,636 Hazardous Materials Mitigation Grant 24,000 - 15,681 15,681 8,319 Hear out Voices 18,000 16,189 1,795 17,984 16 Hear out Voices 8,000 - 6,604 6,604 1,396 HIDTA Grant 43,744 14,259 - 14,259 29,485 HIDTA Grant 128,027 67,885 59,387 127,272 755 HIDTA Grant 145,800 - 74,137 74,137 71,663 Historic Planning Survey 18,164 18,080 - 18,080 84 Historic Preservation-SugarHouse 5,000 4,500 - 4,500 500 Historic Preservation-Yalecrest 12,000 - - - 12,000 Historic Property PR Campaign 1,483 - - - 1,483 Home Administration-25th year 120,900 117,939 - 117,939 2,961 Home Administration-27th year 135,400 78,669 56,731 135,400 - Home Administration-28th year 135,400 - 69,339 69,339 66,061 Home Administration-29th year 145,302 - - - 145,302 Home Administration-30th year 145,504 - - - 145,504 Home Contingency 14,015 - - - 14,015 Home Program Income 2,028,106 1,363,472 - 1,363,472 664,634 Homeland Security Grant 434,985 389,874 21,848 411,722 23,263 Homeland Security Grant 32,420 27,731 - 27,731 4,689 Housing Authority 104,765 - - - 104,765 Housing and Neigborhood Development 463,404 - - - 463,404 Housing and Neigborhood Development 570,000 - - - 570,000 Housing and Neigborhood Development 570,000 - - - 570,000 • Housing Opportunities for Persons With AIDS 370,856 281,424 56,693 338,117 32,739 Housing Opportunities for Persons With AIDS 72,073 - - - 72,073 Housing Opportunities for Persons With AIDS 389,385 - 303,303 303,303 86,082 • Housing Opportunities for Persons With AIDS 121,209 - 12,902 12,902 108,307 Housing Trust Fund 5,511,733 1,561,262 99,075 1,660,337 3,851,396 Housing Trust Fund-RDA grant 3,710,444 1,539,564 300,000 1,839,564 1,870,880 Intel Computer Clubhouse 15,000 - 12,594 12,594 2,406 International Rescue Committee 2,000 - - - 2,000 1 Internet Crimes Against Children 58,000 52,751 - 52,751 5,249 • Inventory Historic Cemeteries 14,730 3,619 11,111 14,730 - Justice Assistance Grant 345,123 - - - 345,123 Justice Assistance Grant 182,925 - - - 182,925 Judicial Council Grant 24,600 - 24,600 24,600 - Law Enforcement Terrorism Prevention 182,109 - 69,143 69,143 112,966 Law Enforcement Terrorism Prevention 150,539 - 57,619 57,619 92,920 Lead Based Paint Program 503,300 - 95,441 95,441 407,859 Local Law Enforcement Block Grant'02 312,535 260,074 51,270 311,344 1,191 Local Law Enforcement Block Grant'03 250,446 62,728 117,535 180,263 70,183 Local Law Enforcement Block Grant'03 109,196 - 28,977 28,977 80,219 SI-65 SALT LAKE CITY CORPORATION SCHEDULE OF PROJECT EXPENDITURES GRANTS OPERATING FUND Year ended June 30,2005 Current year Total Project Prior years' expenditures project Project budget expenditures and transfers expenditures balance Metro Fire Investigations Task Force $ 15,000 $ - $ - $ - $ 15,000 Metropolitan Medical Response System 400,001 396,865 3,136 400,001 - Metropolitan Medical Response System 200,000 1,454 157,730 159,184 40,816 Metropolitan Medical Response System 280,000 - 18,350 18,350 261,650 Metropolitan Medical Response System 400,000 - 23,313 23,313 376,687 Microsoft Unlimited Potential 30,000 - - - 30,000 Neighborhood Housing Service-26th Year 384,949 374,481 - 374,481 10,468 Neighborhood Housing Service-27th Year 203,100 - - - 203,100 Neighborhood Housing Service-28th Year 150,000 63,275 - 63,275 86,725 Neighborhood Housing Service-28th Year 163,600 89,389 61,530 150,919 12,681 Neighborhood Housing Service-29th Year 217,953 - 19,577 19,577 198,376 Neighborhood Housing Service-30th Year 464,532 - - - 464,532 Parley's Tunnel 100,000 - - - 100,000 Pedestrian Crossing Design Committee 86,251 45,629 7,400 53,029 33,222 Pioneer Park Use Plan 60,000 59,108 - 59,108 892 Project Safe Neighborhood 56,000 2,616 17,474 20,090 35,910 Project Safe Neighborhood 10,000 - - - 10,000 Refugee Consortium Grant 200,639 190,720 - 190,720 9,919 Refugee Youth&Family Consortium 153,641 147,636 - 147,636 6,005 Refugee Youth&Family Consortium 346,415 339,868 - 339,868 6,547 Refugee Youth&Family Consortium 344,719 321,981 11,551 333,532 11,187 Renter Rehabilitation 2,778,441 2,509,095 - 2,509,095 269,346 Revolving Loan Fund-UDAG 5,044,954 1,693,950 214,988 1,908,938 3,136,016 River Park Program Income 679,082 (17,237) - (17,237) 696,319 Road Home 75,000 - 49,937 49,937 25,063 Safe Street Program 50,000 48,833 - 48,833 1,167 Solar Roof Partnership 50,000 25,085 15,200 40,285 9,715 State Homeland Security Program 334,580 - 128,605 128,605 205,975 State Homeland Security Program 534,649 - 205,584 205,584 329,065 Traffic Control Center Operator 90,000 46,412 41,909 88,321 1,679 Traffic Management Grant-UDOT 45,000 - 16,000 16,000 29,000 Utah Alcolohism Foundation 62,348 - 699 699 61,649 Utah Non-profit Housing 14,000 12,850 - 12,850 1,150 Utah Non-profit Housing 149,995 58,975 91,020 149,995 - Victim of Crime State grant 55,634 45,422 561 45,983 9,651 Victim of Crime State grant 55,183 - 40,889 40,889 14,294 Violence Against Women 21,854 4,785 - 4,785 17,069 Violence Against Women 19,014 8,980 9,030 18,010 1,004 Violence Against Women 58,003 18,030 39,958 57,988 15 Violence Against Women 8,964 - - - 8,964 Violence Against Women 39,521 - - - 39,521 Violence Against Women 19,133 - 8,787 8,787 10,346 Weed&Seed 225,000 - 116,913 116,913 108,087 Weed&Seed 50,000 - 21,038 21,038 28,962 Weed&Seed 175,000 171,989 2,225 174,214 786 Weed&Seed 275,000 242,199 31,412 273,611 1,389 Weed&Seed 225,000 103,825 117,210 221,035 3,965 Weed&Seed Enforcement'97-'98 153,997 150,645 - 150,645 3,352 Workforce Services 2,107 - 1,834 1,834 273 Youth City Employment Program 25,000 - - - 25,000 Total Projects $ 40,120,478 $ 15,961,786 $ 4,777,544 $ 20,739,330 $ 19,381,148 S1-66 This page intentionally left blank. SI-67 STATISTICAL SECTION (unaudited) This part of the Salt Lake City Corporation's Comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the city's overall financial health. Contents Financial Trends S-1 These schedules contain trend information to help the reader understand how the cinty's financial performance and well-being have changed over time. Revenue Capacity S-9 These schedules contain information to help the reader assess the city's Most significant local revenue source, the property tax. Debt Capacity S-13 These schedules present information to help the reader assess the Affordability of the city's current levels of outstanding debt and the City's ability to issue additional debt in the future Demographic and Economic Information S-18 This schedule offers demographic and economic indicators to help the Reader understand the environment within which the city's financial activities take place. Operating Information S-19 These schedules contain service and infrastructure data to help the reader understand how the information in the city's financial report relates to the services the city provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. 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' m rl 2 o y > Q .. mllLhm i `✓, — lOv, oNONNO `O NO ON lO ov o .noi oo CrCa o r, f € - aZc. en rn Tr P b co N v00', 00 Q v% Q — O lO SO N w — O. AN 10 -' O 00 0-0 00 m ON N, O ol M .� b - vt b P Q 00 vt OO O— — 00 N M 0% CO VI e`! a O N ^ N r1 2> S 0 1.1 0 T t ,n O. .0 10 43 v C .0M C• N u a T$ , Oil o c E °' . A ob -ca Em• ° °a ° 1.1 av E u _ ° e'cb pv _aaaa $ °u 'O 0 3 `u -s o E C. ° �` u ,°� v `d- `u a o a.� 3 r v 3p �' • `cd 2 .. G° u •L o g o u o o o E c ` `u `w v = 3 2• o s ° 2` 0 VI w m VI 0 o o vzNz " ZZ oz �zzzz 2�zVV3▪ °3zVV kl gZ € V Gr.. ,, a°. V a .0 co ti a.. 7:. SALT LAKE CITY COUNCIL MEMORANDUM DATE: February 21,2006 SUBJECT: Proposed Federal Funding Requests AFFECTED COUNCIL DISTRICTS: Citywide STAFF REPORT BY: Gary Mumford ADMINISTRATIVE DEPT. Mayor's Office AND CONTACT PERSON: D.J.Baxter,Senior Advisor to the Mayor In June 2005 when the Council adopted the annual budget for fiscal year 2005-06, the Council appropriated$58,000 for a Washington DC lobbyist under the condition that funding for the national lobbyist be contingent upon the Council's advance approval of the items to be lobbied. The Mayor's Office provided the Council with the attached proposed list of requests for earmarked federal funding: 1. Groundwater Contamination: Monitoring and Treatment: $2,750,000 million (groundwater plume in area 700 South and 1600 East) 2. Wasatch Canyons Watershed Protection-Critical Land Acquisition: $2,400,000 (to augment the City's existing land acquisition funding) 3. Water Re-Use Pilot Project: $1,600,000 (deliver re-use water to a number of parks, golf courses,schools, a planned sports complex, and industrial customers) 4. Renovation of Pioneer Park: $900,000 (Stage II concepts including gathering place,cafe and restroom pavilion, tree relocation, and irrigation system upgrades) 5. YouthCity Empowerment Project: $3,000,000 (expand programs to more youth) 6. Police Department- In-car Video: $1,300,000 (dash-mounted video cameras in patrol cars) The Council may wish to discuss these funding requests and determine if these items meet the approval of the Council and whether there are any other priorities that should also be considered. ROSSPeb la 1 C. "ROCKY" ANDERSON SALT_cr�� �,� TY�GORiPO � e. i1,0I f E10p6 MAYOR OFFICE OF THE MAYOR MEMORANDUM c7.- TO: Rocky J. Fluhart / Chief Administrative Officer FROM: D.J. Baxter Senior Adviso e Mayor DATE: February 14, 2006 SUBJECT: FY07 Federal Funding Requests Every year, the Administration works with all interested City departments to develop a list of City needs that might qualify for federal assistance. We then develop brief project descriptions and budgets, and submit these to members of our Congressional delegation as requests for earmarked federal dollars in the annual federal appropriations process. We have now developed this-year's proposals, and wish to brief the City Council on the requests we intend to forward to Congress over the next month. Through discussions with City department directors, we have developed six proposals for federal funding. Detailed proposals are attached to this transmittal. I have provided brief summaries of each project below. 1. Groundwater Contamination: Monitoring and Treatment: $2.75 million Salt Lake City is working closely with the Environmental Protection Agency and the State Department of Environmental Quality to address a groundwater plume that has been discovered in the area surrounding 700 South and 1600 East. This plume has contaminated the deep aquifer where we draw drinking water from a well, and proactive measures are necessary to ensure the safety of the community and the protection of this water resource. This request is likely the first of a multi-year federal request. 2. Wasatch Canyons Watershed Protection-Critical Lands Acquisition: $2.4 million Salt Lake City is seeking federal assistance to augment the existing land acquisition program in our watershed canyons. The program seeks to secure private parcels and"in-holdings" of land for public benefit to protect critical drinking water sources for over 600,000 persons in the Salt Lake City metropolitan area. Public acquisition of these lands within the Wasatch-Cache National Forest also secures recreation access and 451 SOUTH STATE STREET, ROOM 306, SALT LAKE CITY, UTAH B41 1 1 TELEPHONE: B01-535-7704 FAX: B01-535-6331 RECYCLED PAPER resource protection for perpetual public benefit and use. Purchase of these properties often resolves contentious, time consuming, and costly private access and public land management issues for private parcels and adjacent National Forest and City watershed conservation land. 3. Water Re-Use Pilot Project: $1.6 million The Water Re-use Pilot Project seeks to further the City's water conservation goals by using reclaimed water for outdoor uses that would otherwise draw down the City's limited supply of high-quality culinary water. The project will deliver 2089 acre feet of reclaimed water to a number of parks, golf courses, schools, a planned 220-acre sports complex, and industrial customers, replacing an equivalent volume of high quality culinary water to over 2000 households. 4. Renovation of Historic Pioneer Park: $900,000 This project will continue the restoration of the 10-acre historic Pioneer Park by designing and constructing the Stage II concepts identified by the Final Use Plan, which was prepared in 2003 by a citizen stakeholder group. Stage I is currently in design, and will be constructed in 2006. This request for Stage II will help to cover the construction of the "gathering place," café and restroom pavilion, tree relocation and irrigation system upgrades. 5. YouthCity Empowerment Project: $3.0 million This funding will be used to reduce or eliminate waiting lists in current programs, expand programming to the City's northwest quadrant, and reach teens who, in many cases, have graduated from the after-school and summer programs through College Bound and Employment opportunities. Currently, all Youthcity programs have waiting lists for participation. 6. Police Department— In-car Video: $1.3 million Dash-mounted video cameras in patrol cars have become increasingly prevalent and useful within law enforcement agencies across the country. The documentation captured by these cameras proves useful as evidence of criminal activity as well as potential misconduct on the part of police officers. The use of video has vindicated officers and the public as well as convicted violators of law and policy. The Salt Lake City Police Department anticipates the application of in-car video within its fleet will significantly impact officer awareness, accountability, and safety. • ..00040100 SALT 1_AKE CITY FY07 Appropriations Priorities Salt Lake City Groundwater Contamination Interior and Environment State and Tribal Assistance $2,750,000 Monitoring and Treatment Grants Environmental Programs and Management Pioneer Park Renovation Transportation, Treasury, Economic Development $900,000 and Housing and Urban Initiative Development In-Car Video Surveillance Science, State,Justice COPS Technology $1,300,000 Technology and Commerce Wasatch Canyons Interior and Environment Land Acquisition $2,400,000 Watershed- Critical Lands Acquisition Secondary Water Re-use Interior and Environment State and Tribal Assistance $1,600,000 System: Regional Sports Grants Complex YouthCity Empowerment Labor-Health and Human Fund for the Improvement $3,000,000 Program Services, and Education of Education 2005 Accomplishments •d "p r ° ,y:: . ..v_r`t y la ti ti 5$ a , Grant Tower Rail Curves SAFETEA-LU: Surface $5,000,000 Transportation Reauthorization Intermodal Transit Hubs: Including Transportation,Treasury, and $1,500,000 Gateway TRAX Housing and Urban Development (Bus and Bus Facilities) Salt Lake City COPS Science, State,Justice and $150,000 Methamphetamine Initiative Commerce (COPS Technology) Salt Lake City COPS Science, State, Justice and $200,000 Methamphetamine Initiative Commerce (Meth Enforcement and Cleanup) Construct Parley's Creek Trail SAFETEA-LU: Surface $10,500,000 Transportation Reauthorization _ Airport to Downtown Light Rail SAFETEA-LU: Surface Authorized Extension Transportation Reauthorization SALT LAKE CITY Salt Lake City FY07 Appropriations Project Summaries Groundwater Contamination: Monitoring and Treatment Salt Lake City is currently taking steps to address an environmental problem relating to ground water contamination in the area surrounding 700 South and 1600 East. A plume has contaminated the deep aquifer where the City draws drinking water. This request will assist with both treatment and additional monitoring necessary to ensure the safety of the community and the protection of this water resource. The chemical plume has been identified as the result of dry cleaning chemicals and the contaminants have migrated to a culinary drinking well. At this time testing of the 500 South Well has determined that the contaminants are below EPA listed levels that would cause a need for immediate additional water processing. However, the City and its partners must take additional action to ensure this problem does not reach critical levels. The City is working closely with the Environmental Protection Agency and the Utah Division of Water Quality, Division of Environmental Response and Remediation (DERR), and Salt Lake Valley Health to find an appropriate method of addressing this long term contamination which has the potential, in left unmonitored and untreated, of becoming a significant health and environmental issue in the future. Salt Lake' City is requesting $2,750,000 to assist with both treatment and additional monitoring. The total project cost is estimated at $5 million with an estimated $2 million for treatment and $3 million for additional monitoring. Capital costs will include the purchase and installation of an Advanced Oxidation System, plumbing modifications, connection of electrical service, and the construction of a structure to house the system. This estimate does not include ongoing operations and maintenance costs or energy costs associated with the Advanced Oxidation system.. In addition, this request includes continued monitoring and analysis which is necessary to pin-point the location of the plume and its source. This will require the drilling of additional monitoring wells and continued sample collecting and data analysis to pinpoint the extent of the contamination and to determine additional remediation efforts. Additional remediation beyond these steps may also be necessary. Request: $2,750,000 Bill: Interior Account: State and Tribal Assistance Grants/Environmental Programs and Management Wasatch Canyons Watershed- Critical Lands Acquisition The goal of the Wasatch Front Critical Lands Acquisition Program is to secure private parcels and "in-holdings" of land for public benefit to protect critical drinking water sources for over 600,000 persons in the Salt Lake City metropolitan area. Public acquisition of these lands within the Wasatch-Cache National Forest also secures recreation access and resource protection for perpetual public benefit and use. Purchase of these properties often resolve contentious, time consuming, and costly private access and public land management issues for private parcels and adjacent National Forest and City watershed conservation land. Salt Lake City generates an annual fund of$500,000 from rate payers for public purchase of critical watershed lands and water rights. Since 1989 the City has acquired 1,254.14 acres of critical watershed land for drinking water supply protection, conservation, and low-impact public recreation. In the past, the City received a one-time allocation from the LeRoy McCallister Lands Conservation Fund (State of Utah) of$700,000 for this program. Currently, the market value of land with a willing seller exceeds the City's resources. The proposed funding will secure these lands for public benefit in perpetuity, while providing the private land owner fair compensation. The Land Acquisition request has been broken down into two phases. The first property is 64.15 acres of undeveloped alpine property located adjacent to US Forest Service and protected City Watershed land. The property includes approximately 1,000 feet of primary stream frontage, wetlands, and riparian habitat. The parcel has an appraised value of$3.6 million and consists of interspersed stands of mature conifer and aspen groves on moderate to steep slopes; protecting these stands will provide watershed pollution protection for the stream. Due to the City's annual funding limitation of $500,000, purchase will not be possible without additional funding of$3.1 million. The second property is a 155 acre parcel around the Cardiff Fork area with an appraised value of $2.9 million. Adjacent to Wasatch National Forest, this popular hiking area attracts recreational visitors to this private property. The hike follows a free flowing stream to a spectacular site where the stream has, over the years, cut out a formation into the surrounding rocks. Currently, the property owner due to liability issues posted a "no trespassing sign." The acquisition of this land under the Watershed Protection Program would move us towards our goal of protecting critical watershed lands from development and hence, protecting our water supply, while also restoring a valued and unique area to public access. Salt Lake City is requesting $2,400,000 million in FY07 federal appropriations funding to acquire whichever of these two properties is still available and able to be purchased by the City. Request: $2,400,000 Bill: Interior Account: Land Acquisition Secondary Water Re-use System: Regional Sports Complex The population of Salt Lake City and its water service area are expected to double by 2050, yet water supplies remain fixed and limited. Water reuse and conservation holds the potential for allowing us to maintain our public landscapes and support current and future industrial customers without sacrificing our limited supply of high quality drinking water. In 2003 the Salt Lake City Department of Public Utilities (SLCDPU) commissioned a Water Reuse Feasibility Study to evaluate the potential of using reclaimed water for irrigation and industrial customers; this study was completed in 2005. In 2004, the U.S. Environmental Protection Agency identified reclaimed water as offering an effective means of conserving our limited high-quality freshwater supplies while helping to meet the ever growing demands for water. Water reuse is identified as a requirement for meeting conditions outlined under the Utah Lake System project for the Central Utah Project. The Reuse Pilot Project will allow for an opportunity to identify and resolve any public health concerns through monitoring and reporting; familiarize the SLCDPU staff with water recycling operations, identify long-term strategies for reducing future capital and operating costs, and initiate a public outreach program. Additionally, the Pilot Project will create opportunities to study the impacts of reclaimed water on our landscapes and soils. The Pilot Project will deliver 2089 acre feet of reclaimed water to a number of parks, golf courses, schools, a planned 220 acre sports complex, and industrial customers, replacing an equivalent volume of high quality culinary water to over 2000 households. This initial phase is designed and can be constructed to allow for expansion to match the growth of reclaimed water demand. The Estimated capital cost of the Pilot Project is $23.4 million; with $3,030,000 for preliminary engineering. Salt Lake City is requesting $1,600,000 to assist with the costs of preliminary engineering. Request: $1,600,000 Bill: Interior Account: State and Tribal Assistance Grants Law Enforcement In-Car Surveillance Technology Technology needs have become an ever increasing priority of the Salt Lake City Police Depai tment. The goal of the Law Enforcement In-Car Surveillance Technology request is to build on recent success in technology implementation by allowing the Department to take another important step in technology acquisition. Dash mounted video cameras have become ever more prevalent within law enforcement agencies across the country and are an integral component of modern police work. In-car surveillance cameras will greatly benefit both the Department and the City's residents and allow for more capable, safe and accountable police work. The acquisition of this new technology will have a number of benefits both to the Salt Lake City Police Department and to the City's residents. The documentation captured by these types of cameras can provide invaluable evidence in criminal proceedings as well as to help protect those officers accused of misconduct. The Salt Lake City Police Department anticipates that the application of in-car video within its fleet will significantly impact officer awareness, accountability, and safety. Feedback provided will serve as a basis for enhanced in-service training. Specifically the cameras will be swivel mounted in the front and rear windows of the car so that the cameras can be focused on any area in or around the vehicle. Microphones pick up sounds and voices as far away as 200 yards. Officers can record routine traffic or welfare stops, or even keep constant watch on a prisoner in the back seat of their patrol units. Again, this provides an element of safety for both the officer, and the public. Furthermore, the video will constantly record data, and automatically upload to the City server. This eliminates handling by any individual, ensuring that the video is not tampered with or altered. Salt Lake City respectfully requests $1,300,000 in COPS technology funding to assist with the acquisition of the in-car video surveillance technology. The estimated total project cost is $1,500,000 of which the Department is prepared to set aside $200,000 to support the project. Request: $1,300,000 Bill: Science, State,Justice and Commerce Account: COPS Technology Renovation of Historic Pioneer Park: Stage II The objective of this downtown urban park project is to continue the restoration of the 10-acre historic Pioneer Park by designing and constructing the Stage II concepts identified by the Final Use Plan, which was prepared in 2003 by a citizen stakeholder group. Stage I, with a budget of$1.1 million is currently in design, and will be constructed in 2006. The restoration will benefit the local community, and a regional population base by introducing design elements that open up and preserve the park landscape, preserve the historical character of the park, display and tell a historic story of the park and the community, make the park safe and accessible for public use, and enliven the park by introducing activity centers that promotes fitness, community building, play and public recreation. Pioneer Park is listed on the National Register, and is a City landmark site. In 1847, Mormon Pioneers entered the Salt Lake Valley and established a fort at what is now Historic Pioneer Park. In 1890 the fort was used as a public playground site, and in 1898 the fort site was designated a City park. An active and vibrant community once circled the park. It later transitioned into an industrial area, and as a result Pioneer Park become less a park and more an under utilized green space that acquired poor reputation. The Park has seen some improvement over the last 10 years, but it remains an underutilized green space in a community undergoing incredible revitalization. In 2002 the City embarked on a comprehensive community effort to develop a "final use plan" for the Park. When completed the final plan called for three (3) stages of development. Stage I included improvements to park infrastructure, a health and fitness path, improvements that enhance the annual farmers market, security lighting and an off-leash dog area. Stage II calls for improvements that create a central gathering space for events, public restrooms, an in- door outdoor event pavilion, small café, a social gathering area and other infrastructure improvements. Stage III finishes the park renovation by adding historical program elements, recreation activity areas, a children's playground and infrastructure improvements. Pioneer Park is located in the west center area of Salt Lake City's downtown business district. The improvements planned benefit the local community, but the historical significance of this site gives it regional and state-wide significance. This request is also supported by the Friends of Pioneer Park, a self-organized group of local community and business leaders, which has organized itself to fund raise and promote the need for the renovation. Salt Lake City will secure $1.0 million in local funds that will be used for design, construction management, historical research and the construction of several design elements of the project. This request is for$900,000 to be used for the construction of the"gathering place", café and restroom pavilion, tree relocation and irrigation system upgrades. The total estimated cost for Stage II is $1.9 million. Request: $900,000 Bill: Transportation,Treasury,Housing and Urban Development Account: Economic Development Initiative YouthCity Empowerment Project The YouthCity project began in 2001 and is designed to give at risk youth between the ages of 10 — 17 the opportunity to participate in a wide variety of engaging and productive activities after school. YouthCity programs build self esteem and sufficiency, augment and encourage education, support parents' efforts, and foster artistic expression and promote health and nutrition. Since 2001, YouthCity has served over 5,000 youth through a number of different after-school and summer programs. Over 75% of the youth served come from low and moderate income families, and 52% of those served are minorities. While considerable resources have been targeted to younger children, national research indicates that the hours between 3:00 and 6:00 are "high risk" hours for older youth. It is during this time that youth are more likely to engage in risky behaviors including drug use, gang activity, and sexual experimentation. YouthCity provides an alternative through its after-school and summer programs by bring professional art, technology, and recreation education to 5`h through 8`h grade students. The program also offers homework help to assist parents and educators with increasing academic achievement and school attachment. The success of this program is evident by the number of youth who return to this and other YouthCity programs. The YouthCity Employment and College Bound Program offers activities that are designed to increase youth civic involvement, build employment skills, and develop pathways to higher education. During the past year, YouthCity began a pilot project with the University of Utah Women's Resource Center called "Go Girlz!" Specifically, "Go Girlz" provides low- income, minority girls in junior high school an opportunity to spend time on the University campus with college-age mentors from all academic disciplines. In addition, the YouthCity Government program was designed to introduce high school age youth to civics education. The students participate in community service projects, community planning and mapping, and government. Students interact with adults from City, County, State and Federal government. Students also have the opportunity to work with the Salt Lake City Council and Mayor's Office to influence policies that affect their lives. YouthCity has proven itself a successful and well-run program with tangible benefits to the City and its residents. Salt Lake City respectfully requests $3 million for the YouthCity Empowerment Project. This funding will be used to eliminate waiting lists in current programs, expand programming to'the city's northwest quadrant, and reach teens who in many cases have graduated from the after-school and summer programs through College Bound and Employment opportunities. Currently, all YouthCity programs have waiting lists for participation. Request: S3,000,000 Bill: Labor-Health and Human Services-Education Account: Fund for the Improvement of Education MEMORANDUM DATE: February 23,2006 TO: City Council Members FROM: Jennifer Bruno,Policy Analyst RE: Public Safety Facilities Bond Proposal The Council will receive a presentation outlining various options in terms of design, cost,construction timing,and financing for a new Public Safety Building,a Liberty Public Safety Center(Police and Fire),and a Fire Training Center. The Police and Fire Chiefs will make brief presentations,and the architectural consultants and bond counsel will be available at the meeting to answer any questions the Council may have. Included in the Council's packets is a proposal for each of these facilities,outlining specifics including costs,conceptual floor plans,and project details. KEY ELEMENTS A. The Administration is proposing that the City go to the voters to authorize a general obligation bond,to take care of all pressing Public Safety Facilities needs in one bond issue. 1. The total amount of the bond is estimated to be$151.4 million. This does not include"recoverable" money from Impact Fees over the next 20 years ($13 million) and E-911 funds ($1.6 million). This does include bonding costs (estimated at$1.1 million). 2. The annual cost to an average residential property (valued at$193,000)is$94 per year,or just under$8 per month. 3. The annual cost to an average commercial property (based on$1,000,000 value business)is$889 per year,or$74 per month. B. The Public Facilities Program bond is comprised of three independent projects,each with multiple components:The Public Safety Building and Emergency Operations Center,The Liberty Public Safety Center,and the Fire Training Center/Fire Station #14. C. The Administration has prepared a cost/benefit analysis to detail associated costs and associated financial and non-financial benefits related to the project(see Attachment A). D. The Public Safety Building and Emergency Operations Center: 1. Estimated Building Cost:$100.6 million(excluding land acquisition) 2. Square Feet: 123,633 square feet i. Cost is$814 per square foot-this cost estimate includes interior furnishings and the parking garage,but excludes land acquisition cost (yet to be determined). C 1 ii. 24,535 square feet of this is for the Emergency Operations Center (EOC),which is built to stricter, therefore more expensive construction standards (see #8). 3. The overall complex will house both Police and Fire Administration, communications and dispatch,homeland security,City back-up computer servers,property and evidence storage, and improved Police and Fire Parking. The improved parking will allow the City to house the motorcycle fleet at the Public Safety Building complex. It is currently stored at the International Center adjacent to the airport. Note: Council staff has previously suggested that the Administration consider housing the motorcycle fleet at the new Fleet Facility. 4. The Administration is proposing that the Public Safety Building and accompanying structures be built to the"Gold" LEED standard. This would likely significantly reduce yearly maintenance and utility costs. i. Police and Fire officials have communicated to Council Staff that it cost around$253,000 in Fiscal Year 2005 in utilities at their current location, and another$100,000 per year in non-regular maintenance due to the building's age (fixing elevators, excluding regular maintenance such as replacing light bulbs). Projecting maintenance costs out 20 years,with a 1% inflationary adjustment, the Police Department estimates that it would cost$2.2 million over the next 20 years in non-scheduled maintenance due to the age of the building in maintenance alone. ii. It is estimated that a more energy efficient building would save$2.8 million over a 20 year period,or about$142,000 per year. These savings would clearly continue for the life of the building,but the 20 year period is used in order to compare cost savings with the life of the bond. 5. If a new public safety building is not constructed,the City currently has scheduled on its 10 Year Capital Improvement Plan,$330,000 worth of maintenance projects scheduled for 2009,that are in addition to the historical $100,000 per year non-regular maintenance (replacement of absorption chillers and a cooling tower). 6. The conceptual plan for the complex of buildings is to have a 50 foot setback. 7. The Administration has been looking for a location in close proximity to the City and County building. This would mean that the zoning would likely be Central Business District(D-1),but could be Downtown Support district(D- 2). i. The purpose of the D-1 zoning district is to foster an environment consistent with the area's function as the business,retail and cultural center of the community and the region. Inherent in this purpose is the need for careful review of proposed development in order to achieve established objectives for urban design,pedestrian amenities and land use control,particularly in relation to retail commercial uses. 1. In the D-1 Zoning district,when an entire block face is under one ownership (as would likely be the case for the Public 2 Safety Building),no yard can exceed 25 feet,except by conditional use. 2. If the Public Safety Building does not take up an entire block face,no yard can exceed 5 feet except by conditional use, requiring design review by the Planning Commission. ii. The purpose of the D-2 zoning district is to accommodate commercial uses and associated activities that relate to and support the Central Business District,but do not require a location within the Central Business District. Development within the D-2 Downtown Support District is also less intensive than that of the Central Business District. 1. No building may exceed 65 feet in height except by conditional use. With a conditional use,no building may exceed 120 feet in height. 2. There are no minimum or maximum yard requirements. 8. Emergency Operations Center(EOC) i. The EOC will be adjacent to the Public Safety Building ii. It will be constructed to withstand a variety of catastrophic events-to the national standards required for Emergency Operations Centers. iii. It will house communications and dispatch,E-911 service,homeland security,policy rooms,and a redundant City-wide computer system and communication controls. Currently the City has no back-up system for the computer servers. Information Management Services has indicated that there is a strong need for this type of back-up and had been looking for a location to house such a system. iv. It has been separated from the Public Safety Building in order to maximize cost efficiency. Had it been housed in the Public Safety Building,the entire Public Safety Building(which would then have been 4 stories) would have been needed to be built to the strict standards required for Emergency Operations Centers. E. Liberty Public Safety Center 1. Estimated Building Cost:$20.3 million(excluding land acquisition) 2. Total square feet:40,191 (cost-$504 per square foot-this includes interior furnishings,but excludes land cost) 3. The Liberty Public Safety Center would combine an east side police precinct with a Fire Station. 4. This facility would also meet the"Gold" level standard for LEED. 5. The facility would house current Liberty Patrol function,current Fire and medical functions,and would have a community room for public education and use. 6. Combining facilities to incorporate a fire station would eliminate the need to upgrade and replace either Fire Station#3 or#5 (depending on where exactly the land acquired is located),which are both slated to be rebuilt or replaced in the next decade,according to the adopted CIP. i. The 10 Year CIP lists the cost of replacing Fire Station#3 in FY 2011, at$3.4 million. ii. The 10 Year CIP lists the cost of replacing Fire Station#5 as a part of the Public Safety Facilities GO Bond,for$3.8 million,in FY 2008. 3 iii. The recently completed Fire Department Audit identifies both of �. these stations as the oldest on the east side (Fire Station#3 was built in 1975,Fire Station#5 was built in 1979),but says that 30 years is not unreasonably old for a well-maintained fire station. iv. The Council may wish to recommend that the Administration examine the call volume map (page 108 of the Audit), in order to ensure that response times from the new facility would match those of the old facilities. The Audit indicated that the existing stations were well placed to cover the most heavy call volume areas. 7. The Administration indicates that combining facilities would also create efficiencies in other areas-such as a shared locker room and kitchen facilities,shared parking,and an increased public safety "presence." F. Fire Station#14/Fire Training Center 1. Estimated Building Cost: $19.6 million 2. The facility would be 47,947 square feet(cost-$408 per square foot-this includes interior furnishings). 3. No land Acquisition is needed as the current site is large enough. 4. The facility would combine Fire Station#14 and the Fire Training Center. 5. This facility would also meet the"Gold" level standard for LEED. 6. Fire Station#14 was built in 1968,and is scheduled to be replaced in 2016, according to the 10 Year CIP. The CIP identifies the cost of rebuilding/replacing the station at approximately$2.6 million. Consultants have estimated the cost of"adding" the station on to the Fire Training Facility at around$700,000-this is a cost savings of$1.9 million. 7. The Fire Training Center is currently housed in temporary trailer-like structures adjacent to the training tower. The training tower would remain, and the trailer-like structures would be replaced with a permanent structure on the site. 8. The facility would house both Fire Training Center operations (classrooms, offices,community rooms) and a fully-functioning fire station. 9. Possible soil contamination has been identified at this site in the past. However,as the proposed facility only builds above-grade,the Administration indicates that these issues would not affect the scope or cost of the project. G. The cost estimates above are based on costs as of a June bond election. If the Council decides to proceed with the bond election,but delay it until November,the consultants have estimated a 5% increase in costs,roughly$7.5 million overall. Council staff has made the Administration aware that a June bond election is probably not practical given that the Council briefing is just now being held and that information has not yet been available to the public. The Council has previously expressed a preference for November elections to help assure maximum participation from the public. H. The Public Safety Building and EOC complex represents just over 70% of the total bond. If this proportion is applied to the annual cost impact to residents and businesses,the following would be the cost impact if the Council were to only bond for the Public.Safety Building: 4 1. Residential property (valued at$193,000)-$67 per year,or just under$6 per month. This is a cost difference of$27 per year. 2. Commercial business (valued at$1 million)-$635 per year,or just under$53 per month. This is a cost difference of$250 per year. I. Police and Fire officials have indicated that while the Public Safety Building and EOC complex is a priority,all three of the facilities proposed are strongly needed. J. When the City issued a general obligation bond for the Library authorized by the voters in 1998 ($84 million),the impact on residential property (valued at$150,000) was$43 per year. Commercial property impacts were not addressed during this bond issue. MATTERS AT ISSUE A. The Council may wish to ask the Administration to address what the cost vs.benefit of constructing a"Gold" LEED certified building-as compared to the various other levels of LEED certification(certified,silver, gold,platinum). Would the"Gold" level provide the most efficient way to save money in future energy costs? 1. The Police Department has provided Council Staff with research that has a range of estimates for how LEED certification can increase construction costs, while decreasing utility costs: i. National Clean Energy and Development Firm Capital E,has estimated that Gold rated buildings have an average premium of 2.2 percent in their experience over the years,and that these buildings use an estimated 30 percent less energy than conventional buildings. ii. The US Department of Energy estimates that it costs no more than an additional 10 percent to build a"high performance building,"and that the average energy costs are 50 percent less than conventional buildings. iii. The consultants hired by the Administration have assigned a 13 percent"premium"for the Gold LEED certification-in part to provide the most conservative estimates possible,especially given the unknowns about site location and detailed building design. More about true"premiums" associated with the LEED certification would be known once a location is chosen and the detailed design process is under way. There are savings to be had with architectural design choices that do not involve increased construction costs. 1. A study conducted by etc Group,Inc,in 2003,concluded that the annual utility costs at the current public safety building are $195,000,and that energy efficient design could result in a 22% reduction in overall utility costs (with as much as a 60% reduction in natural gas costs). 2. Assuming 2% inflation over 20 years,this amounts to$2.8 million in savings. iv. Removing the 13 percent"premium" from the construction cost estimates (to not address LEED certification)would reduce construction costs by$11.6 million for the Public Safety Building and EOC,and$2.3 million each for the Liberty Public Safety Facility and the Fire Training Center. The only long-term energy savings realized 5 would be the savings realized as a result of newer construction materials than the current building. B. The Council may wish the Administration to discuss the cost and safety efficiencies realized by combining the Police and Fire dispatch. The Council may wish to enquire whether they will be combined into one dispatch unit,as has been discussed in the past. C. The Council may wish to discuss the cost savings realized by keeping construction of the Public Safety Building at 3 stories and below,therefore requiring more land, versus the cost of acquiring less land and building higher. 1. The construction costs could dramatically increase,especially if the Emergency Operations Center is incorporated into the overall building, which would mean that the entire building would have to be constructed to the standards of an EOC. 2. If the building were consolidated and built higher,that could allow for greater flexibility in site selection(given the unique and scarce nature of vacant downtown parcels). The higher building would likely be a better fit in the downtown environment. D. The Council may wish to discuss efficiencies realized by combining the various public safety facilities into a single bond given bonding costs and the escalating cost of construction. E. The Council may wish to discuss the average increase in property taxes,per household,per year as compared to the Library Bond issue of 1998. F. The Council may wish to ask whether the Administration has maximized opportunities to limit the setback in keeping with City policies by using security approaches used by other communities (anchored planters,locating the EOC underground or in a more remote area of the building,etc.) G. 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CD43 a .�: m oa ' n) o Co . o' * _ •� m 53:0 ) vo c ' • • m cn m v. < a. • co o �' p �: o _ v :c •v: m 1 • • GI 69 • (D C'N S� (M. .• (D. .N !N N .N N �.; `< 00 =.N CD.• 0 CDD :,0 • .Oi:=•: :N ' y a: FCr 7 43,D;.... a.0 CD m = •co 7 N Cl. N T *' 7 0: m• m .p ::(1) .. o• p - W :(D . c . 0• -0 CO .O N O. . 0N • N •• v' m: o m . I c m v o Ni V Ni N 0 O 0) '70o VP'15 COUNCIL TRANSMITTAL TO: Rocky J. Fluhart, DATE: February 17, 2006 Chief Administrative Officer FROM: Chief Charles F. "Rick"Dinse Chief Charles M. "Chuck" Querry Police Department Fire Department SUBJECT: Public Safety Bond Proposal STAFF CONTACT: Assistant Chief Chris Burbank, 801-799-3805 DOCUMENT TYPE: Briefing BUDGET IMPACT: General Obligation Bond Proposal BACKGROUND/DISCUSSION: The existing Public Safety Building (PSB) was designed and built in the 1950s. The inadequate design, deteriorating infrastructure and ever increasing maintenance costs prescribe the replacement of the current facility. Recent worldwide catastrophic events have underscored the need for efficient and effective deployment of public safety resources. RECOMMENDATION: The Salt Lake City Police and Fire Departments propose to design and construct new public safety facilities which include a main Public Safety Building and Emergency Operations Center, an east side joint Police precinct and Fire station and a west side Fire Training Center. The proposed structures will replace buildings that no longer meet the needs of the City and are currently leading to the undue expenditure of not only financial assets but environmental resources as well. The proposed buildings will be "Gold" standard, incorporating innovative design features. These elements will set a standard for environmental awareness in public facilities. The Police and Fire Departments request your consideration of this proposal in its entirety. This proposal represents a comprehensive, solution-driven plan that responds to the long term public safety needs of Salt Lake City. This plan provides Salt Lake City with the facilities to support quality public safety services while ensuring its ability to respond without impediment to a natural or human caused disaster. The citizens will be asked to support the City in issuing bonds to construct the proposed public safety facilities. The Salt Lake City Police and Fire Departments request: • Consensus for need of the facilities • Approval of the project concept and scope • Approval of a General Obligation Bond Resolution • Consensus for either a June or November Bond Election SALT LAKE CITY PUBLIC SAFETY FACILITIES PROPOSAL µ; aioNow , 5P,"� LAKE co), gpLT LAK ,, ►C � V‘741V4V":47 Ni°pLIC -'. POLI6 February 2006 INDEX • Scope of Project page 2 • Public Safety Building / Emergency Operations Center page 3 • Liberty Public Safety Center page 5 • Fire Training Center page 7 • Financial Summary page 9 • General Obligation Bond Language page 10 PROJECT SCOPE The existing Public Safety Building (PSB) was designed and built in the 1950s. The inadequate design, deteriorating infrastructure and ever increasing maintenance costs prescribe the replacement of the current facility. Recent worldwide catastrophic events have underscored the need for efficient and effective deployment of public safety resources. The Salt Lake City Police and Fire Departments propose to design and construct new public safety facilities which include a main Public Safety Building and Emergency Operations Center, an east side joint Police precinct and Fire station and a west side Fire Training Center. The proposed structures will replace buildings that no longer meet the needs of the City and are currently leading to the undue expenditure of not only financial assets but environmental resources as well. The proposed buildings will be designed and built to the Leadership in Energy and Environmental Design (L.E.E.D) "Gold" standard, incorporating innovative design features. These elements will set a standard for environmental awareness in public facilities. The Police and Fire Departments request your consideration of this proposal in its entirety. This proposal represents a comprehensive, solution driven plan that responds to the long term public safety needs of Salt Lake City. This plan provides Salt Lake City with the facilities to support quality public safety services while ensuring its ability to respond without impediment to a natural or human caused disaster. The citizens will be asked to support the City in issuing bonds to construct the proposed public safety facilities. The Salt Lake City Police and Fire Departments request: • Consensus for need of the facilities • Approval of the project concept and scope • Approval of a General Obligation Bond Resolution • Consensus for either a June or November Bond Election 2 • • • • PUBLIC SAFETY BUILDING 4110• EMERGENCY OPERATIONS CENTER • • PROJECT DESCRIPTION • The Public Safety Building (PSB) will facilitate the comprehensive delivery of Police • and Fire services throughout the City. The facilities are designed to be accessible and • useful to the public. A collaborative and thoughtful process contributed to a plan that • meets and balances the community's long term public safety needs. • • 123,633 square foot building • • On 5 acres of City-purchased property •S . Will facilitate the comprehensive delivery of the Fire and Police Services • House current Police and Fire functions • • Improved public and employee parking • • Utilize innovative strategies for energy conservation and environmental • awareness • The new PSB will include an element not available in the existing structure — an • Emergency Operations Center. The Emergency Operations Center (EOC) is designed as an adjacent structure to the proposed Public Safety Building. It will house public • safety communications including emergency operations facilities, E-9-1-1 service, homeland security, joint information center and policy rooms. It will maintain redundant City-wide computer and communication controls and will house employees from Emergency Management and Information Management Services. The facility will be • built separately from the PSB to allow it to meet specific construction standards necessary in emergency operations centers. This facility will ensure public safety • services in a catastrophic event and allow other City departments to continue to provide • a coordinated city response in an emergency. • • 24,535 square foot structure • • An adjacent structure to the Public Safety Building • • Will provide public safety services in a catastrophic event • Will allow critical City functions during emergency situations • Will be utilized on a daily basis providing integrated City-wide functions • • COST DESIGN PARAMETERS Land Acquisition Costs: $7,623,000 • Efficient • Constructions Costs: $100,580,000 • Secure • Total: $108,203,000 • Open Public Space • • Cost Effective • • Sustainable • • • • .r • v • Z (D � • N ::_? ,.. ----� �� i �Ai - as -1r 7-— , "'z , 0 ••� • I /�/� -, ,,1 .r a ,4, i,1 i/e'. "„'s ,i-'� e v„ >zo /r.' •••R'o "N" I • I /'r•i Z • I • e o a 0 • �k -., e El e ,f y • 1• o Af'I I I D f • . I C \ ( • \ L Z : ZT:" • 1 — —, n17 r• • w CO I _ ¢ e e a e • • s - Il •n•• Q , _ - Ho e • a e • IIII _-per.. so I ��IIINI� J Q ii1••_ -�IIIII®�• 7 co `tiri iii� nnm�i I nllfn;II.i a p _ • •v Q o 1 • • q I 11 I I I • IPI , a < t1�1��� "� L�JJ 1 • w 'S� w ` .: •1 ..`i .Y - 11 11 a e o ,:pm i I I . _I� _ • I e c ill ill CC a iii • . p- 0 • i W e N I P CC U • -as I e • 00e e e • -yI• • I I— /` CC 0 • < Z vim•+ • 1 YO e W H Q c~n sry M ZU U e �� l 0 I P • • • • z . L1 I I I I } 0 � • I UZ � zO LU • 1 — • • • a 0 < C)c . e >At1 cc CC r Q I • 1 n • • Nk >0I I I z _ N , -.� 0 D • II _ Or_ n—r1 • f�.,_I m J o o a 0 • n,y= —_--__--I--__----__—__—_ c- a- V'.- _-v.'_-_ _ :a.* --ors �Qn�iin ,, "i., 'lit , ' ., i;�� vJ 0 • J m • o- D 0 •. • • • LIBERTY PUBLIC SAFETY CENTER • • PROJECT DESCRIPTION • The Liberty Public Safety Center is designed as a combined Fire station and Police precinct to be built to serve east side neighborhoods. The center will house current • functions observed by the Liberty Patrol Division and also house a Fire station to replace • an aging Fire station within the City. Co-location provides the community with maximum benefit in service and dollars. The east side location would benefit the citizens with • increased Police presence. The building is designed with a community room, inviting the area residents to interact with police and fire officials in community councils, enhancing • communications and improving services. • • Combined Fire station and Police precinct • • Combined service to east side neighborhoods complementing the Pioneer • Precinct in the west area of the City. • 40,191 square foot facility • • Replacement of aging fire station • • Current Liberty patrol functions • Current Fire and medical functions • Provide community with maximum benefit in service and dollars • • Community room for public use • Utilize innovative strategies for energy conservation and environmental awareness • COST • • Land Acquisition Cost: $2,265,000 • Construction Cost: $20,255,000 • Total: $22,520,000 • DESIGN PARAMETERS • • Responsive to the Neighborhood • • Optimize Shared Space • • Efficient • • Flexible • • Secure • Cost Effective • Sustainable • • • • `a • Z �D o • o N CL co • W N H _ - , F. Wa- flie ,, ;! I O ,t. _ -,,, ! � 'tit .N Y 1 >a • 0 ■ cc Z i • d 1 z _Z cca_ a ¢ w a .- b, CCw LL Er LL W t��(( LL '4 ¢W¢ • a y1p� I I I ` _ CI • < f k` MI-u �A'►�■� r LL St • [ _fir i. . A'� ■ ■ ■ ■ ■ ■ CI- ' • i \ i IC i^1ti \liv_ O I ' I.. `' bNINIVkil6-H II F �� Z W O • COm ¢ 'C1�,,1yyY U • IT �o W I r . ; II � I_ _IL _ —I ; F• o _ �Fc —.—. J•J �. w 4r- ' lk :1 f /////2 • a /////it // ` �/Ir0 Z • `�\�� , , ..., ,.._..„„) o a }a • cc W . m_ J • • • • FIRE TRAINING CENTER • • PROJECT DESCRIPTION • The existing training facility is comprised of two 1970s surplus trailers and a temporary or • classroom located to the live fire training tower that was remodeled several years ago. • These units house all aspects of the Fire Department training. The existing fire station #14 was built in 1968 and is scheduled for replacement in the 10 year CIP plan. • The proposed building will house both fire station # 14 and the fire training center. It will • be a fully functioning fire station with the capability to house additional units in large . scale emergencies. The training center will provide sufficient space for all types of fire and EMS training, police tactical training, public education and community events. The • location adjacent to supports the live fire training tower and the surrounding drill • grounds. • • Fire station and Fire Training Center • • 47,947 square foot facility • • Replacement of aging fire station • Current fire and medical functions • • Provide community with maximum benefit in service and dollars • • Multiple use training center O Ongoing firefighter, recruits, and EMS o Hazardous Material o Special Operations • 0 Police Tactical O Public education S • Training room for public use • • Located on City owned property: 1560 South Industrial Road • • Utilize innovative strategies for energy conservation and environmental awareness • • COST • Land Acquisition Cost: $0 (City Owned) Construction Cost: $19,574,000 • • Total: $19,574,000 • DESIGN PARAMETERS • • • Fire Response • Efficient • • Flexibility • Cost Effective • Optimize Shared Space • Maintainable • • Sustainable S • • co •• z cD o 0 N • a co 31111 w N F— i% CL C.)LLJ • Z O • W C.)• MI- a yt I 1-1J / • J • I • ler- 7 e I • 0I • W _�i% • J n,-;_ 0m • GI cl ❑ W 1 • C7 � _ZZ_ W Z W — Z =Ciill Zcc (_n — • 0 Q X � OF ►�� • • 1• 'M" -• • Q cOL � -- i 1, LI • o _4cc le : ,, I Q O gelf yi% W iit\.- -ci. 1 0 C3 ir,,-- g • Z Z J • Z_ /� Q ~ At, • T • co D Q • --I • I Q I w • I pry, z p /� J I I• w i it\c I H O Q I 6 _'ciH 1 U I— Lij o FAIL • =ci% J W e I z — _Z • %sir\c- a '40— zo w U J '�i% Z CI H a i nVc- • ci% a O '�%�}r- a p I- • , 1 : : - g0 <Q _ �S — ,i2 T 21If I I O Z 0 I- Q • U) • CC w • `L PUBLIC SAFETY FACILITIES PROGRAM FINANCIAL SUMMARY February 2006 PROJECT COST Public Safety Building/Emergency Operation Center Acquire 5 acres located centrally to C & C Bldg $ 7,623,000 Design and construct Public Safety Building with co-located Emergency Operation Center to L.E.E.D. (Leadership in Energy and Environmental Design) "Gold" standard 100,580,000 $ 108,203,000 Liberty Public Safety Center Acquire 4 acres located on the eastside of Salt Lake $ 2,265,000 Design and construct Liberty Patrol Division and replace eastside Fire Station to L.E.E.D. (Leadership in Energy and Environmental Design) "Gold" standard 20,255,000 $ 22,520,000 Fire Station #14/Training Center No land acquisition required $ - Replace Fire Station #14 and upgrade Fire Training Center to L.E.E.D. (Leadership in Energy and Environmental Design) "Gold" standard 19,574,000 $ 19,574,000 PROGRAM TOTAL $ 150,297,000 NOTES: Program total anticipates a successful June 27, 2006 general obligation bond election with construction beginning July 2007 First "10 yr" C.I.P. estimate recoverable from Impact Fee eligible projects $ 6,775,000 Second "10yr" C.I.P. estimate recoverable from Impact Fee eligible projects $ 6,242,000 Recoverable from E 9-1-1 fund balance $ 1,600,000 $ 14,617,000 Bond Cost Estimate on $ 151,394,000 $ 1,097,000 Additional construction cost of deferring bond election for 6 months - 5% $ 7,515,000 Estimated cost per year on average residential value of $ 193,000 - $ 94/yr $151,394,000 (20 yr bond) Estimated cost per year on value of$ 1 million taxable commercial property- $ 889/yr $151,394,000 (20 year bond) February 16, 2006 9 BOND LANGUAGE Chapman and Cutler LLP Draft of 02/01/06 CITY PROPOSITION Acquiring, Constructing, Furnishing and Equipping Fire, Police and Other Public Safety Facilities Shall Salt Lake City, Utah, be authorized to issue and sell general obligation bonds of the City in an amount not to exceed One Hundred Fifty-Three Million Dollars ($153,000,000) and to be due and payable in not to exceed twenty-one (21) years from the date or dates of the bonds for the purpose of acquiring, constructing, furnishing and equipping fire, police and other public safety facilities, [and, to the extent necessary, for providing moneys for the refunding, at or prior to the maturity thereof, of general obligation bonds of the City authorized hereunder or heretofore issued and now outstanding]. 1995837.01.03 869511/RJS/RDB/jd Ballot Proposition 10 SALT LAKE CITY COUNCIL STAFF REPORT DATE: February 21,2006 SUBJECT: Proposed amendments to Chapter 8, Animal Control Ordinance AFFECTED COUNCIL DISTRICTS: City-wide STAFF REPORT BY: Jan Aramaki ADMINISTRATIVE DEPT. Laurie Donnell AND CONTACT PERSON: NOTICE REQUIREMENTS: 7 days KEY ELEMENTS: (ordinance) 1. Requires Cat licensing: total maximum limit of four (4) adult cats per household is proposed,including a microchip implant requirement. However,it should be noted that when a pet owner has three (3) or more adult cats,a pet owner must also comply with an additional section of City code (Section 8.04.074,Licensing and Keeping Three (3) or More Cats—Additional Requirements) that requires compliance with Salt Lake Valley Health Regulation#9,Section 7.0 General Requirements for Kennels, Catteries, and Groomeries (refer to page 10 of Transmittal for details). In general,these provisions identify steps that a responsible pet owner would commonly follow such as proper: handling of solid and liquid waste;handling of storage of chemicals,medications and supplies;managing upkeep of buildings, cages,and runs;handling of animal and food waste;handling storage of food products;managing noise beyond the property line;and providing of receptacles that contain clean litter. 2. Requires Licensing of Ferrets with a limit of two (2). 3. Limits the Total Number of Pets Allowable in a Household to four (4) comprised of a combination of dogs,cats,and ferrets,as long each animal does not exceed its permitted limit. An adult cat's kittens or an adult dog's puppies are excluded as part of the pet limit until they reach 4 months old. Typically by 4 months old,kittens and puppies are separated from the mother and placed in a new home. 4. Animal license fee proposed changes and other fee changes to Appendix A: • Increase from$25 to$35 for an unsterilized pet • Maintain a $5 fee for a sterilized pet with the requirement of a registered microchip • $8 license fee for a sterilized pet without a microchip. Page 1 • Senior citizen (60 years and older) annual fee increased from$20 to$25 for an unsterilised pet • Senior Citizen life-time fee increased from$15 to$20 for sterili7ed/microchipped (life-time requires microchip) • Add feral cat colony registration permit of$25 • Adoption fee increase from$25 to$30 • Transfer fee increased from$3 to$5 • Replacement tag fee increased from$3 to$5 • Elimination of multi-year licensing • Add voluntary relinquish fee of$25 • Add microchip implantation fee of$15 (for microchip implanted by SL County Animal Services) • Add Sterili7ation fee for cats of$35 (for sterili7ation services provided by SL County Animal Services) • Add Sterili7ation fee for dogs of$65 (services provided by SL County Animal Services) • The time period for fees for second,third,and subsequent violations is proposed to change from 12 months to 24 months • Current impound fees for first offense is$25;second offense is$50;and third offense is $100;however,for subsequent offenses,it is being proposed to change the fee from "criminal" to a$200 civil fee. • "At large" fee is proposed to change reclassification in Appendix A from"minimum notice of violation penalties" to"animal nuisances" which results in an increase from a current rate of$25 to$50 for first offense;increase of$50 to$100 for second offense;and increase of$100 to$200 for third offense. 5. Feral cat colony registration permit includes the Trap-Neuter-Return(TNP) program as a requirement. Feral cat colonies form when unsterilised pet cats are abandoned or allowed to wander off. Because cats are unsterilized,the colonies grow in number. The "Trap-Neuter-Return" (TNR) method which includes sterili7ation of cats prevents breeding,provides vaccination and marking,allows for the return of healthy cats to the site,provides adoptive homes for kittens,and reduces euthanasia. 6. Commercial and Pet Rescue permit Requirement provides an opportunity for a pet owner who already has two dogs to rescue a third dog as long as the third dog is rescued from Salt Lake County Animal Shelter or a non-profit humane society shelter. 7. Proposed Increase Violation Fee for a pet"at large" 8. Housekeeping Items MATTERS AT ISSUE/POTENTIAL QUESTIONS FOR ADMINISTRATION: 1. Requires Cat Licensing(Limit 4): On November 2001, Council Member Carlton Christensen initiated a legislative action (copy attached) to request an ordinance requiring that pet owners provide licensing for pets in Page 2 Salt Lake City. At that time, there was an increase in the number of calls Council Member Christensen received relating to unattended cats creating a nuisance in Council District One. The intent of the legislative action was to add a nuisance control measure,create a differential in licensing fee for sterilized pet as opposed to unsterilized pets,and increase the chances of safe return to pet owners. Cat over-population creates significant problems in Salt Lake City neighborhoods;therefore a lower licensing fee for sterilized cats would be an incentive for spaying and neutering pets. According to the Administration's paperwork,local municipalities such as Murray, Sandy,Taylorsville,Cottonwood Heights,and Ogden currently require cat licensing fees that are in line with dog licensing fees. (Refer to a comparison chart of licensing fees on page 3 of the Administration's transmittal). The Administration recommends a$5 cat licensing fee for a sterilized and microchip cat; and$35 for an unsterilized cat. When a cat strays away from its home,it is estimated that a microchip implant will increase the cat's chances of being returned safely to its owner, and eliminate the confusion of a pet cat being mistaken for a feral cat. There is the potential that pet owners may be resistant to cat licensing,but licensing is intended to benefit cats,their owners,and the general public just as dog licensing protects dogs. Salt Lake County Animal Services statistics for 2003-04 reveal 1,999 dogs were received in the shelter in comparison to 2,265 cats received in the shelter. The percentage of stray dogs returned to their owners was 44 percent in comparison to only 4 percent of stray cats. If cat licensing is enacted,Council Office can inform the public by having Animal Services post information at the shelter, on the Council's website and Channel 17, and prepare a press release from the Council. However,City Council Members may wish to inquire with the Administration regarding other methods to notify the public of the cat licensing and microchip requirements. Council Members may wish to incorporate a grace period as to when the ordinance would go into effect (perhaps 60 days) to allow ample time for pet owners to be informed and provide ample time for them to license their cats before the ordinance goes into effect. The following are constituent comments received in the City Council Office regarding cat licensing for Council's information and consideration: • There was an incident reported in the Avenues whereby a resident found a dead bat on top of her bed. The bat tested positive for rabies. Cat licensing and vaccination requirements will protect cats from getting rabies from bats. • A constituent expressed opposition about collars for cats stating cats generally do not adapt well to a collar,and there is the potential for a cat to be strangled if a cat's collar is caught on an object such as a branch. The constituent also expressed: "those in rural areas, especially farmers and ranchers,would be penalized by the concept of a licensing requirement because out of necessity, they own multiple cats that control mice,rats and other small mammals-ecological issue-cats control problems with mice and grasshoppers." • Animal Services reported a success incident whereby a stray cat with a microchip was picked up,and the cat was returned to its owner in Bountiful who had lost the cat five Page 3 years ago. • In the past,the question has been raised whether the late fee of$25 is in line with other City late fees. The$25 late fee is a 400 percent increase from the$5 license fee (sterilized and microchipped). According to the Administration because Animal Services takes a diligent approach on enforcing late fees,the result has been that more pet owners have become more conscious and aware of their renewal deadline-pet owners are more apt to make payments in a timely manner to avoid late fees. Animal Services sends a reminder card to pet owners to inform them of their license renewal date;and in addition,a volunteer makes a reminder call to pet owners prior to the expiration date of the current license. Renewals can be accomplished through the mail. A constituent expressed at one time that a microchip implant is costly -a veterinarian charges approximately$50,the Humane Society of Utah charges$25,and the Administration is proposing a fee of$15 for a microchip implant by SL County Animal Services. Grace Period for Licensing: A Council Member inquired about a grace period for pet owners who license their pets. The Administration did not propose a grace period for the fact it would have the effect of licenses being extended for 15 months rather than a year. According to Animal Services,it becomes more difficult for them to maintain current addresses beyond one year. The more successful Animal Services is in keeping current records on pet owners,the more successful they are in returning pets to their owners. 2. Requires.Licensing of Ferrets (limit 2): 8.04.135 and 8.04.136 "Ferrets are domestic animals,cousins of weasels,skunks and otters. Other relatives include minks,ermines,stoats,badgers,black-footed ferrets,polecats,and fishers" (Ferret FAQ). Current Salt Lake City Code classifies ferrets under wild animals and therefore ferrets are not permitted licensed animals. However,it is becoming increasingly popular to have a ferret for a pet. In 2000,Salt Lake County adopted an ordinance allowing residents to license ferrets as pets. The Administration proposes an ordinance amendment to allow residents to license ferrets as pets (limit 2)with the requirement of the pets being vaccinated and having a microchip implant. Also,a pet owner of a ferret is required to attend a ferret ownership class and to allow an Animal Services Officer to inspect the ferret housing facility once a year. The Council may wish to ask for further information on the policy reason for this higher inspection requirement,about the staffing level necessary to meet this requirement,and whether Animal Services will view these visits as a higher priority than public enforcement of issues such as dogs off leash. 3. Total Number of Pets Allowable in a Household, Sections 8.04.070 and 8.04.074 (Limit of 4 pets per residence. An adult cat's kittens or an adult dog's puppies are excluded as part of the pet limit until they reach 4 months old. Typically by 4 months old,kittens and puppies are separated from the mother and placed in a new home.) Page 4 Current Salt Lake City Code permits a person to have 2 cats and/or 2 dogs. In 2004, Administrative staff attended the Mayor's monthly community council chair meeting at which time the Administration offered to attend any community council meetings to discuss the issue of the number of pets permitted in a household. Five community councils made a request for Administrative staff to attend their meetings (Wasatch Hollow,Fairpark, Rose Park,Liberty Wells and Rio Grande). Administrative staff also received comments from Glendale community council. The Administration reports the majority of the community councils supports keeping the limit of dogs to two (2)for the reason that dogs tend to create more of a nuisance than cats. In the past, Council Members have heard from constituents who have expressed concern with a neighbor's dog barking excessively. Enforcement is a challenge for residents who reside near a neighbor with a barking dog, especially if the neighborhood is high density. Before enforcement measures begin,Animal Services requires a complainant to provide documentation as to when a dog barks and how long a dog barks -this requires diligence and time on the part of the complainant. The Administration reports they also heard from 30 plus residents who provided feedback via email and phone calls regarding the allowable limit of pets. The majority of the calls and emails received support increasing the number of pets permitted. However, based upon input received from the community councils,the Administration proposes a limit total of four (4) licensed pets per residence (total can be comprised of a combination of dogs,cats,and ferrets,not to exceed the limit allowable for each pet). • Limit 4 adult cats : The number of cats is proposed to increase from two (2) to four (4) in conjunction with the proposed cat licensing requirement. However,as noted above,when a pet owner has three (3) or more adult cats,a pet owner must also comply with an additional section of City code (Section 8.04.074, Licensing and Keeping Three (3) or More Cats—Additional Requirements) that requires compliance with Salt Lake Valley Health Regulation#9,Section 7.0 General Requirements for Kennels, Catteries, and Groomeries (refer to page 10 of Transmittal for details). In general, these provisions identify steps that a responsible pet owner would commonly follow such as proper: handling of solid and liquid waste;handling of storage of chemicals,medications and supplies;managing upkeep of buildings,cages,and runs;handling of animal and food waste;handling storage of food products; managing noise beyond the property line;and providing of receptacles that contain clean litter. • Maintain dog limit to 2 (excluding puppies younger than 4 months) • Limit 2 ferrets A constituent stated that the real problem does not pertain to the number of dogs and/or cats living in a household,but suggests it would be more effective to address too many animals through a nuisance ordinance rather than limiting the number of pets Page 5 allowed in a household. The constituent believes that people who continue to have as many pets as they desire will continue to do so even if there is a number limit. 4. Proposed Animal License Fee Changes and Other Fee Changes to Appendix A Salt Lake City license fees have not been increased since 1999. Salt Lake County recently adopted new fees in keeping with the proposed license fee increases (below) that are in line with other Utah jurisdictions. In the past Council Member(s)have inquired about potential ways to streamline pet licensing to make it as convenient as possible for pet owners to license their pets;for example,when a pet owner is at the veterinarian for a vaccination or when purchasing a pet at a local pet store,can forms be available to license pets on the spot? According to the Administration,jurisdictional boundaries create a challenge to provide a service of this type. For example,a person buys a pet in Salt Lake City,but lives in a different city where license requirements may differ. Council Members may wish to discuss this further with Animal Services. Proposed Licensing Fees • Unsterilized pet Increase from$25 to$35 • Sterilized pet Increase from$5 to$8 without microchip • Sterilized µchip Maintain$5 (incentive to microchip) • Senior Citizen annual fee Increase from$20 to$25 per year/unsterilized pet • Senior Citizen life-time fee Increase from$15 to$20 for sterilized/microchipped (life-time requires microchip) • Multi-Year Licensing fee The Administration proposes to eliminate because Animal (Eliminate) Services states it helps them to keep current phone numbers and addresses on pet owners when licensing is renewed on an annual basis rather than every three years; however a constituent contacted the Council Office stating multi-year licensing should be an option for pet owners because due date rims in conjunction with the due date of a rabies vaccination (every three years) • Transfer Fee Increase from$3 to$5 • Replacement tag fee Increase from$3 to$5 • Feral cat colony New fee of$25 registration permit Proposed Service and Violation Fees for Pets • Add voluntary Relinquish Fee $25 • Add Microchip Implantation fee $15 • Add sterili7ation fee for cats $35 • Add sterili7ation fee for dogs $65 • Adoption fee Increase from$25 to$30 Page 6 • The time period for fees for second, third,and subsequent violations is proposed to change from 12 months to 24 months • Current impound fees for first offense is$25; second offense is$50;and third offense is $100;however,for subsequent offenses,it is being proposed to change the fee from "criminal" to a$200 civil fee. • "At large" fee is proposed to be reclassified with animal nuisances rather than under "minimum notice of violation penalties" which results in an increase from a current rate of$25 to$50 for first offense;increase of$50 to$100 for second offense; and increase of $100 to$200 for third offense. 5. Feral Cat Colony Registration Permit to Include Trap Neuter Return(TNR) Program: Sections 8.04.135 and 8.04.136 No More Homeless Pets defines a feral cat as: "a cat that has been born into the wild or forsaken by the original owner for an extended period of time." Feral cat colonies form when unsterilized pet cats are abandoned or allowed to wander off and because cats are unsterilized,the colonies grow in number. Feral cat colonies exist in Salt Lake City. The City Council Office was contacted by a constituent who expressed concern about a problem with stray cats in the area of 632 N. Colorado Street(District One). Attached is a copy of a Salt Lake Tribune article dated May 12,2002 that mentions feral cat colonies that roam throughout neighborhoods in the Salt Lake Valley. One method of managing the feral cat colonies is to employ the"Trap-Neuter-Return" (TNR) method which includes sterilisation of cats to: a. Prevent breeding b. Provide vaccination and marking c. Allow for the return of healthy cats to the site d. Provide adoptive homes for kittens e. Reduce euthanasia . The Administration reports that TNR has been established in some areas of the country with great success,and states: "The American Society for the Prevention of Cruelty to Animals endorses TNR as the only proven humane and effective method to manage feral cat colonies." As cats are trapped,neutered,and returned to the same area, the colony population can be controlled in number. The Administration reports that community councils support an ordinance revision to permit feral cat colonies with a Trap Neuter Return(TNR)program. One community council expressed opposition. However, Rio Grande community council reported a positive experience some residents had with TNR. Twelve residents submitted their support for TNR. On January 17,2006,a meeting was held with representatives from: Salt Lake Valley Health Department, the President-elect of the Utah Veterinary Medical Association,the US Department of Agriculture-Wildlife Services,No More Homeless Pets in Utah,West Valley City Animal Services,the Humane Society of Utah,Salt Lake County Animal Services,and Salt Lake City. Salt Lake Valley Health Department raised the following concerns: Page 7 • "When residents set out food for feral cats,it attracts rodents,raccoons and skunks and contributes to the spread of disease (skunks and raccoons are nocturnal); • Initial rabies vaccination is good for one year only; • If someone is bitten by a feral cat,it may difficult to determine responsibility." Other concerns raised at the meeting: • Water that is left out for long periods of time can create an attraction for mosquitoes-important to change water often. • From an enforcement standpoint,a mechanism needs to be in place if circumstances warrant a permit to be revoked. Also, should a mechanism be in place to include neighborhood notification and/or approval? • If permit holder moves or no longer maintains the colony,it should be clear that a future property owner has full legal right to remove the colony. • If a person loses interest in maintaining a cat colony,who will step in? • Salt Lake County reported that they have only two feral cat permits on record, what is the success rate in having residents apply for a feral cat permit? • Chances are slim that a vaccinated feral cat will be identified at a later point in time to accomplish another vaccination-statement was made that one vaccination is better than none. • What will be the long-term impact in an urban environment? The Administration states that West Valley City has partnered with No More Homeless Pets in Utah to implement a feral cat TNR program and reports that within a year,there was a 26 percent decrease in the number of stray cats received and 34 percent reduction in the number of cats euthanized. There are reports of TNR programs that have been successful, however,uncertainties about TNR do exist. It has been proven that TNR programs do minimize the feral cat population and accomplish vaccinations for a part of the feral cat population,therefore,the Administration recommends implementing a TNR program and proposes a$25 feral cat colony registration permit including the following requirements under Section 8.04.135 Feral Cat Colony Registration Permit: (obtained through Salt Lake County Animal Services): • Proof that the cats in the maintained colony have been sterilized,given their vaccinations and ear-tipped,or are being actively trapped so as to perform sterilization,vaccination,and ear-tipping (marking of a neutered feral cat- a procedure that involves removing a quarter-inch in a straight line cut off the tip of the cats left ear while the cat is anesthetized). Page 8 • Present a detailed description of each cat in the colony including vaccination history. • Present proof of property owner and/or landlord permission at the site that the colony is being maintained. • Provide contact information in the event that complaints are received by the Office of Animal Services regarding management of the colony. • Animal Services will recommend that permit holders are affiliated with a local animal rescue organization. In addition,the Administration proposes Section 8.04.136 Maintaining a Registered Feral Colony requires a feral cat colony permit holder to: • Take responsibility for feeding the cat colony regularly throughout the year while ensuring that the food storage area(s) are secure from insect,rodent,and other vermin attraction and harborage. Feeding times shall be set,and any remaining food shall be immediately removed from feeding. • Sterili7e,vaccinate,and ear-tip all adult cats that can be captured. Implanting a microchip is recommended; and • Remove droppings,spoiled food,and other waste from the premises as often as necessary,and at least every seven(7) days to prevent odor, insect,or rodent attraction or breeding,or any other nuisance. To assist the City Council Members in learning more about feral cat colonies and to provide examples of what other cities have implemented,the Administration has provided copies of the following list of articles and information sheets (refer to Administration's paperwork): • Information sheet on rabies control and about feral cats in the U.S. from the Alley Cat Allies. • Humane Society of Utah Letter dated October 25,2004 • The American Humane Association (AHA) 1999 article titled "AHA Announces New Position Statement on Feral Cats" • The Humane Society of the United States (HSUS) 1998 article titled: "HSUS Statement on Free-Roaming Cats" (Also attached is an October 14,2005,HSUS Announcement on New Resources for Feral Cat Management provided by No More Homeless Pets in Utah who states this reflects the current position of HSUS.) • No More Homeless Pets in Utah Trap,Neuter,Return(TNR) information Page 9 • Proclamation by Mayor of the City of Moab to proclaim October 16,2004 to be National Feral Cat Day • Alley Cat Allies (2005)articles: 1) "In Partnership with Animal Control to Save Feral Cats;" 2) "One Caregiver's Story:Making A Difference for Feral Cats" 6. Commercial and Pet Rescue Permit Requirement, Section 8.04.130 Proposed changes to this section of Salt Lake City Code,would allow pet owners of dogs,cats, and ferrets to keep one additional dog,cat or ferret-permitting no more than five total licensed animals (consisting of a combination of dogs,cats and/or ferrets,but not exceeding each animal limit) per residence provided the rescued animal is pending adoption from a local City or County operated animal shelter or a non-profit humane society shelter. Salt Lake County is currently considering an ordinance that goes further to allow a person to"own" a third dog on a permanent basis rather than on a temporary basis as long as it is rescued from a local City or County operated animal shelter or non-profit humane society shelter. Section 8.04.130 is not intended to permit a person to"own" a third dog permanently, but is intended to permit a person to"rescue" a third dog with the understanding it is on a temporary basis until the animal is found an adoptive home;however,there is no time limit requirement as to when a pet shall be adopted. This in effect creates a potential loophole allowing a resident to keep one additional pet for an extensive and/or unlimited time as long as the annual pet rescue permit and license fees are paid. Because this section of City code requires an annual rescue permit fee of$25 and a license fee of$5 (sterilized/microchip implant),the City Council may wish to discuss with SL County Animal Services and the Administration the pros and cons of adding some type of exemption provision which would allow a foster pet owner to transfer a license to the new adoptive owner or even consider a license fee exemption in rescuing situations. This section of City code is intended to address situations when a pet owner already owns the permitted number of pets (proposed number of 4)in a household and is interested in rescuing an additional animal. Council staff would like to emphasize that if a person who does not own any pets or is under the limit of four pets,that person is permitted to rescue the maximum permitted number of four (4) pets. In actuality,even if a persons intent is to rescue an animal temporarily pending an adoptive home,a person would automatically become the owner of the animal which requires licensing and vaccinating the animal before it leaves the shelter. Again,the City Council may wish to inquire with SL County Animal Services and the Administration about adding some type of exemption provision which would allow a rescue pet owner to transfer a license to the new adoptive owner or look at the option of an license fee exemption under the circumstance when a pet is being fostered on a temporary basis. No More Homeless Pets of Utah suggests that under Section 8.04.130,a pet owner is allowed to rescue an additional 4 pets-in addition to the limit of 4 pets an owner may already own. Since there is no time limit requirement as to when a pet shall be adopted,if a pet owner were allowed to rescue an additional four pets,it would contradict what the Page 10 community councils support in keeping the number of dogs allowed in a household to two (2). For example,if a pet owner owns two dogs and two cats (limit of four pets) and was allowed to rescue four additional pets, this section of City code provides a pet owner the opportunity to rescue two additional dogs and two additional cats for an extensive and/or unlimited amount of time, totaling eight pets in a single household. An argument can be made that when a person rescues a pet, the time from when the animal is rescued to the time it is adopted often times involves a short time frame. Also,if more animals are allowed to be rescued more animals would avoid euthanization. This section of City code has the potential to be interpreted as an opportunity to "foster" a pet. According to Animal Services,when a pet is referred to as"rescued," the animal becomes the sole responsibility of the person who rescues the animal. However,when a pet is deemed "fostered,"Animal Services' expectation is that the animal should return to the shelter at some given point in time to be cared for by the shelter. According to SL County Animal Services, there is a distinction between"rescue" and"foster." The City Council may wish to discuss at a later point in time whether a"foster" component should be considered as part of Salt Lake City Code. There is also a provision in this section of City code that requires approval from the appropriate zoning authority,Salt Lake Valley Health Department,and Office of Animal Services. No More Homeless Pets in Utah would like to see that approval from these various authorities be managed by one entity to make the process more feasible for a person who wishes to rescue an animal. SL County Animal Services reports that they are in the process of managing the three approvals,and they report it will help to streamline the process at no additional cost in services. 7. Proposed Increase Violation Fee for a Pet "At Large" The Administration proposes that the violation for having a pet"at large" be reclassified in Appendix A from"minimum notice of violation penalties" to"animal nuisance" which results in an increase from a current rate of$25 to$50 for first offense;increase of$50 to$100 for second offense;and increase of$100 to$200 for third offense-- doubling for each subsequent offense within a proposed 24 month period rather than a 12 month period. In the past,the City Council has received complaints when pet owners allow their dogs to run "at large" which increases the chances of bites and attacks. The intent of a higher fine is to encourage pet owners to keep their pets on leash when in public places. For example,a common reported complaint involves dogs running off-leash in Liberty Park. 8. Housekeeping Items/Other Changes (Refer to Administration's paperwork pages 8 thru 14) The Administration provides an extensive list of housekeeping items on pages 8 through 14 in their transmittal. However,following are items from the housekeeping list that Council staff considers more significant. a) Rabies: Current code Section 8.04.260 Rabies Control currently shall not apply to any animal owned by a person temporarily remaining within the City for less than 30 days — Page 11 change requires a current vaccination even if animal residence is temporary. b) Section 8.04.280H Biting or Potentially Rabid Animals-proposed language to allow the Animal Services Director to deem a bite or attack to be vicious by virtue of the severity of the bite. c) Section 8.04.350 Impoundment-Redemption Conditions: Language has been included that states: "If any animal is impounded on two or more occasions without wearing identification or license tags,the owner shall be required to purchase and have implanted in the animal microchip identification;and upon the third impoundment and prior to the release of a fertile animal,said animal shall be sterilised..." Also,"no impound fee will be charged to the reporting owners of suspected rabid animals if the owners comply with Section 8.04.240 through 8.04.290 of this Chapter...)" d) Section 8.04.370 Animal Nuisances Designated: Council Members may recall two incidents reported to the Council Office: 1) a constituent contacted the Council Office and reported an incident involving her dog in Liberty Park (District 5). The constituent was walking her dog on leash and another dog on leash attacked it. The other dog was taken away by its owner before any follow-up action could be taken,and 2) an incident occurred in Wasatch Hollow Park (District Six) whereby a person attempted to break up a dog fight and was injured when the dog that had been attacked bit the person who was trying to break up the fight. It was argued that the dog that initiated the attack was not responsible. The Administration proposes language to clarify actions that are designated as nuisances"and also clarifies that an attack may be designated as a nuisance whether or not the injured person or animal is the one to whom the attack was directed. The following language is proposed: "The following shall be deemed a nuisance: any animal which... 7) molests,or intimidates neighbors,pedestrians,cyclists, or passersby by lunging at fences,chasing,or acting aggressively toward such person(s) or by acting in such a way to cause unreasonable annoyance,disturbance or discomfort, or which chases passing vehicles. 8) Attacks people or other animals whether or not such attack results in actual physical harm to the person or animal to whom or at which the attack is directed and whether or not the injured person or animal is the one to whom or at which the attack is directed." e) Section 8.04.410 Animals Attacking Persons and Animals Language proposed that indicates a court order may be appropriate to seek forfeiture or euthanasia of an attacking animal. f) Section 8.04.450 Animals Injured by Motorists Current code states that an operator of a"motor or other self-propelled vehicle" upon the streets of the city shall,immediately upon injuring, striking,maiming or Page 12 running down any domestic animal,notify the office of Animal Services. New language also includes a requirement to notify the Salt Lake City Police Department and operator has the duty to comply with the instructions given by the agency contacted. g) Section 8.04.460 Using Animals for Fighting Language proposed to state that anyone convicted of using animals for fighting automatically is ineligible to adopt an animal from the Animal Shelter,criminal violation,a Class B misdemeanor, to include a$1,000 fine and up to six months in jail. h) Section 8.04.470 Cruelty to Animals Prohibited Proposed language: "An Animal Services officer may require an examination of the animal by a licensed veterinarian upon suspicion of abuse." Language also specifies that"care and maintenance of an animal must meet the needs of the species and breed since different breeds may require different care." Additional language is proposed relating to when animals are in vehicles stating it is unlawful to carry or confine any animal in or upon any vehicle"in extreme hot or cold temperatures that may harm the animal. Persons transporting an animal in the open bed of a vehicle shall physically restrain the animal in such a manner as to prevent the animal from jumping or falling out of the vehicle." The Council may wish to consider adding additional language that requires that a restraint is made in a manner to avoid any harmful affect to the animal- comments have been received in the past from constituents who have expressed concern regarding tethering a pet while riding in a vehicle. The Council may wish to raise this discussion with Animal Services. 9. Suggested changes made by constituents that not included in Administration's proposed ordinance. a) Section 8.04.010 Definitions: For definition of"owner" change to"guardian" —The Administration did not include this change because"ownership has been necessary to assign responsibility for violations." Add definition for"Backyard Breeding" Any animal allowed to breed without a license. -The Administration did not include this change for the reason that there are cities that require a separate permit to have an unsterilized dog (or a breeder's permit) and this definition would fit under that scenario. b) Section 8.04.065 Permit and License Fees: Create a penalty for breeding without a license. The Administration did not propose this change. Would the Council wish to require a separate permit for unsterilised pets and/or breeding? PAC,.1R c) Implement a mandatory requirement to microchip pets and eliminate licensing. According to SL County Animal Services, if microchip implants were mandatory, it may eliminate the tag requirements but Animal Services'position is that licensing serves as an important tracking mechanism to ensure vaccinations are current and pet owners'records are current should their pets are ever received in the shelter and are needing to be returned. d) No More Homeless Pets in Utah's recommendations and position on various aspects of the Administration's proposed changes and a comparison chart on license fees from other cities are attached. BUDGE RELATED FACTS The Administration reports that no budget increases are expected in the current year. The contract price for fiscal year 2005-06 between Salt Lake City Corporation and Salt Lake County Animal Services is$867,000. Although the proposed increase in license fees will increase revenue for Salt Lake County and the TNR program is expected to decrease the number of nuisance calls,the workload associated with licensing cats and ferrets will increase. Salt Lake County reports$65,800 of revenue for fiscal year 2004-05 for approximately 8,500 dog licenses. It would appear that cat licensing could potentially double revenue. However, according to the Administration,this is not anticipated. The fee increase for sterilized dogs (comprised of 13 percent of the dogs licensed)would increase revenue by about$11,000 for pets currently licensed. A large majority of the remaining 87 percent of unsterilized pets are microchipped,therefore,there would be no licensing fee increase. Taking into consideration Salt Lake County Animal Services quarterly information on their operation costs,increases in licensing revenue will more than likely offset future cost increases. Cc: Rocky Fluhart,Sam Guevara,Steve Fawcett,Laurie Donnell,Ken Miles,Shon Hardy, Holly Sizemore,Karen Bird,Mike Bodenchuk,Drew Allen,Diane Keay,Peggy Raddon, Sylvia Jones,Lehua Weaver,Marge Harvey,Diana Karrenberg,Annette Daley,Gwen Springmeyer,Barry Esham File location: Chapter 8,Animal Service Revisions Page 14 Memorandum Date: November 20, 2001 To: Council Members CC: Cindy Gust-Jenson, Rocky Fluhart, Jay Magure, Laurie Dillon, John Moore, Annette Daley, and Marge Harvey From: Council Member Carlton Christensen RE: Legislative Action to request an ordinance requiring that pet owners provide licensing for cats that dwell in or on properties in Salt Lake City As the Council Member for District One, I am requesting the Council's support for a Legislative Action item to require Salt Lake City pet owners to license cats they own or allow to dwell on their property. There has been an increase in the number of calls I have received relating to unattended cats creating a nuisance in Council District One. I believe that an ordinance requiring pet owners to license their cats will add a nuisance control measure. According to information gathered from various cities that have instituted a cat licensing ordinance, reports and information from the Division of Animal Services of Salt Lake County, and a report by the Humane Society of the United States, it is concluded that: • Cat licensing administered by local governments protects both cats and people just as dog licensing has protected dogs and their owners. According to the Humane Society of the United States: "Cats frequently bite humans and pose their own threat to public health. Cats can transmit 30 known diseases to humans, ranging from ringworm to rabies." A well-written cat licensing ordinance could link licensure with rabies vaccinations thereby protecting the public health by increasing the number of cats that will be vaccinated. A fee similar to dog licensing is anticipated. • Through differential licensing, whereby license fees are higher for unsterilized animals than for sterilized animals, an incentive for spaying and neutering pets is created. There are very significant problems created by cat over-population. • The chances for the safe return of pets that stray from home increases. Animal Services reports that for October 2001, from a total of 249 cats/kittens brought into the shelter or picked up by Animal Services, 16 were returned to their owners. • The number of cats that are euthanized will decrease. Animal Services reports that for October 2001, from a total of 249 cats/kittens brought into the shelter or picked up by Animal Services, 180 were euthanized. Out of the total number of dogs and cats brought into the shelter for year 2001, euthanization occurred for 36 percent of dogs, and 70-80 percent of cats. • It is anticipated that enforcement for cat licensing will not cause additional burden to the City's contract with the Division of Animal Services of Salt Lake County. Animal Services projects that the revenue received from cat licensing will offset the expense of running the program. Enforcement relating to cat licensing would be the same as it is for dog licensing, becoming part of the officers' routine duties. Therefore, it is anticipated that cat licensing would not involve enforcement efforts specifically for unlicensed cats, but would occur during redemption of the cat or as a response to a complaint. I am aware that the Humane Society of the United States, the American Humane Association, the National Animal Control Association, the National Association of State Public Health Veterinarians, and locally, the Wasatch Humane organization supports the concept of cat licensing. Therefore, I would appreciate the support of the Council in asking the Administration to draft an ordinance requiring Salt Lake City pet owners to license their cats. Feral Felines A Growing Problem in the Salt Lake Valley Sunday, May 12, 2002 BY JOHN KEAHEY THE SALT LAKE TRIBUNE Thousands of feral cats roam neighborhoods throughout the Salt Lake Valley. They yowl. They fight. They leave odoriferous gifts in gardens and flower boxes. And they multiply. Boy, do they multiply. Some harried homeowners would like nothing more than to see these mangy critters wiped out -- the sooner the better. But many animal experts warn that sooner isn't better. Since feral cats live in colonies, if some are trapped and sent to shelters to be euthanized, more inevitably move in to fill the void. It seems to be nature's way. So a better approach, experts argue, is to trap, sterilize and return the animals to their colonies. This keeps the population in balance. However, new litters are significantly reduced or eliminated altogether. Eventually, the colonies die out. Yes, it takes time. Feral cats -- prone to disease and injury -- generally live about five to seven years. But at least spayed females are not producing two to four litters a year with four to eight kittens in each. "It's society's problem to deal with, " said Lynn McCarron, a Salt Lake City veterinarian whose University Pet Clinic averages two to three feral-cat sterilizations a week. " [Society] created it. We have a responsibility to deal with it. " The problem starts when people abandon nonsterilized domestic cats, explains Temma Martin, spokeswoman for Salt Lake County Animal Services. The cats then go into the wild and breed. Their kittens -- along with successive generations -- are wild and nonadoptable, too. The cycle continues and the problem perpetuates. "I know of 30 colonies in Salt Lake City and surrounding areas, " said Holly Sizemore, director of the feral-cat program for No More Homeless Pets and a co-founder of the Community Animal Welfare Society (CAWS) . Sizemore has been working with feral cats for 12 years -- during a time when many volunteers trapped the animals, then paid for sterilizations and vaccinations out of their own pockets. Now, organizations often pay for the surgeries. And vets offer discounts to help reduce the number of feral cats. The Utah Veterinary Medical Association is expected to announce a national foundation-funded program this month to reimburse its members for sterilizing feral cats brought in by volunteers. When sterilized cats are returned to their colony, Sizemore said, "you begin to see a reduction in the population and a reduction in nuisance behaviors, too. " To help aid that effort, Sizemore's program offers 150 traps at various "trading posts" across the state. Salt Lake County Animal Services also provides traps so residents complaining about wild cats in their neighborhoods can take care of the problem themselves. But some residents wonder why they have to do the dirty work. "They told me I would have to come in, plunk down a $50 deposit for a trap and trap them myself, " Shelley Dickerson said. "I have never seen such a lax 1 attitude. , his state needs to do something about this. " Dickerson is weary of the cat colonies that plague her west Salt Lake City neighborhood. "Those cats have got to go, " she said. " [The males] spray over everything, and for every wild cat out there, up to four birds disappear every day. " Dickerson stresses she does not hate cats. In fact, she has two in her home. She just wants the county to do something about the wild ones . Martin, the Animal Services spokeswoman, insists the county stands ready to help. "We will come to the home, empty the trap when a cat is caught and re-set it if there are several cats there, " she said. "And we will do the trapping if an animal has bitten someone. But where there is just a nuisance, we don't have enough officers to deliver traps to everyone who wants them. We need the public's cooperation on this. " Verrall May does his part -- and then some. A furniture mover by profession, the Salt Lake City resident works with four feral-cat colonies -- two in north Salt Lake City, one just west of downtown and one in Murray. Last year, May trapped about 30 feral cats. They were sterilized, vaccinated and returned to their groups. "I never had a hobby in my whole life, " he said. "My girlfriend got me involved and I guess I went overboard. " May can tell which cats have been treated, because vets put a small notch in the tip of a feral cat's ear. And when one has a litter, May collects the kittens as soon as they are weaned so they can be domesticated and adopted. If he waits too long, domestication is nearly impossible. The burgeoning wild-cat population -- some estimates say there are 1 million in Utah -- distresses May. "Some people dump their cats because they think if they take it to the shelter, it will be euthanized. So they figure the cat will survive better in the wilderness, " he said. "They don't realize that those animals are out there mass producing. For me, it is hard to see them dying in the winter. " May says his goal is to close down a colony when the last of the ferals under his control has died off. But he knows the problem won't go away entirely. "Once you start looking in the nooks and crannies in this town, you will find colonies that no one even knew were there. " john.keahey@sltrib.com 2 NO MORE HOMELESS PETS1. Recommend additional increase in number of dogs allowed, I recommend additional increase in number of total animals I N UTAH allowed IF all the animals in the household are A program of.SLniMn�s ABV,rieoands ery spayed/neutered. Current nuisance ordinances allow enforcement for situations where animals are creating nuisance problems. 2. Relax the requirements for obtaining a rescue permit.People fostering rescue animals at their own expense,who are relieving a tax burden by providing this community service should not be additionally taxed. Recommended requirements rescue permit: • be awaiting adoption • comply with all rabies requirements • not cause a nuisance • be affiliated with a municipal animal shelter or 501c3 animal rescue organization(delete word humane society) • have identification either via collar and tag or microchip • be spayed/neutered if over 4 months Wording in current proposal allows only one additional foster animal, even if household is not at current pet limits. Permit should exempt the need to license animals while in 324 South 400 West,Suite C foster care -licensing animals in foster care is not practical nor Salt Lake City,UT 84101 advisable. phone 3. TNR recommendations submitted to Laurie Donnell and (801)364-0370 should be contained within transmittal information. Note,the fax document"HSUS Statement on Free-Roaming Cats", also (801)364-0374 included in the transmittal no longer reflects the position of website HSUS. HSUS issued a press release in October 2005 officially www.utahpets.org endorsing TNR. Recommend permit fee be waived, or be a one-time fee. Sponsored by 4. Providing no and low-cost spay/neuter resources for low- Maddie's Fund income pet owners and feral cat caregivers is THE most and effective way to reduce surplus animals in our communities Best Friends Animal Society and relieve the tax-burden and public health and safety issues that these surplus animals create.Public/private spay/neuter partnerships have shown tremendous success in reducing surplus animals.No More Homeless Pets in Utah runs successful public/private partnerships with West Valley City and Vernal. HSUS Announces New Resources for Feral Cat Management Page 1 of 2 HSUS Announces New Resources for ®Feral Cat Management 000 October 14, 2005 WASHINGTON -The Humane Society of the United States(HSUS)today announced that it is developing new programs designed to help communities across the country manage feral cat colonies. The HSUS will collaborate with Neighborhood Cats, a New York City based organization dedicated to the humane management of feral cats. The announcement comes before the National Feral Cat Summit tomorrow in Philadelphia. By working with Neighborhood Cats (www.neighborhoodcats.org), The HSUS is developing more resources to help feral cat caretakers around the country. The HSUS's new resources will include: ■ A new statement supporting Trap, Neuter, and Return (TNR) programs • An online course through Humane Society University for feral cat caretakers ■ An online course through Humane Society University for animal shelters and adoption groups • A day-long workshop on feral cats at The HSUS's annual Animal Care Expo in Anaheim, Calif. in March 2006 ■ Increased support materials for handling obstacles to feral cat management The HSUS launched its Safe Cat campaign in 2003 to provide people with real solutions for keeping their pet cats safe and happy by providing a stimulating indoor environment and supervised outdoor access with the use of a harness or a special cat enclosure. However,feral cats who cannot be socialized may not thrive as indoor pets. They may be one or more generations removed from a home environment—victims of abandonment, lack of supervision, or accidental loss through no fault of their own—and may live in a group, or colony, of similar cats The goal of any feral cat management program should be to stabilize and eventually eliminate the existing colony through attrition. "Every community has different resources and each must consider many factors when deciding how to help feral cats,"said Nancy Peterson, companion animals issues specialist with The HSUS. "Animal shelters and welfare organizations can play a role in programs to manage feral cats, but it is ultimately the responsibility of the entire community to work together to care for and reduce the numbers of feral cats." The HSUS's renewed commitment through additional resources on TNR should encourage all members of the community—local citizens, veterinarians, animal shelters, policy makers, public health departments, and businesses—to work together towards a goal of non-lethal approaches to feral cat management. The group will soon be launching a feral cat resource center through its website at www.hsus.org/cats to help communities make TNR with ongoing management a reality. The Humane Society of the United States is the nation's largest animal protection organization representing more than 9 million members and constituents. The non-profit organization is a mainstream voice for animals, with active programs in http://www.hsus.org/press_and_publications/press_releases/hsus_announces_new_resourc... 2/16/2006 HSUS Announces New Resources for Feral Cat Management rage L of 2 companion animals and equine protection, disaster preparedness and response, wildlife and habitat protection. animals in research and farm animal welfare. The HSUS protects all animals through education, investigation, litigation, legislation, advocacy, and field work. The group is based in Washington and has numerous field representatives across the country. On the web at www.hsus.org. Karen L.Allanach 301-548-7778 ®E-MAIL THIS PAGE Copyright 0 2004 The Humane Society of the United States.All rights reserved. Pmwmrmd by GeMctwe http://www.hsus.org/press_and_publications/press_releases/hsus announces_new resourc... 2/16/2006 City/County Cat Licensing Cost per License Number of Pets Allowed Required? per Residence Murray yes $5(dog or cat) 2 dogs,2 cats North Ogden voluntary $40 dog 2 dogs,2 cats cats $5 sterilized, microchipped Kennel permit allowed in some $10 sterilized, not chipped areas $30 non-sterilized, not chipped Ogden yes $10 sterilized dog, $5 sterilized cat 2 dogs, 8 cats $30 non-sterilized $25 lifetime for sterilized cat $75 lifetime for sterilized dog Provo voluntary $8 sterilized 2 dogs,2 cats, 1 pot-bellied pig $12 non-sterilized Kennel license available Salt Lake City voluntary $5 sterilized 2 dogs,2 cats,2 rabbits current $25 non-sterilized Salt Lake County voluntary $5 sterilized Permit required for more than ferrets required $25 non-sterilized 2 dogs, 2 cats or 2 ferrets proposed amendment change on the table to allow 3 dogs, 3 cats. Does offer TNR permit Sandy yes $6 sterilized 2 dogs, no more than 6 pets $24 non-sterilized total Hobby permit for up to 5 dogs ($53) Taylorsville yes $5 sterilized 2 adults(dogs, cats, or ferrets), ferrets required $25 non-sterilized No more than 4 pets total Various permits available($15) West Valley City voluntary $5 sterilized 2 licensed animals ferrets and pot- $25 non-sterilized Sportsman's permit allows up bellied pigs to 5 dogs required Incorrect. 2 dogs,2 cats, 4 total pets. Feral cats permitted with TNR. Boise, ID no $15 sterilized dog 4 total(dogs and cats) $40 non-sterilized dog Non-commercial kennel license available Denver, CO yes $7 sterilized not listed (permit required for non-sterilized Pet) Multnoma County yes $9 sterilized cat 2 animals (Portland, OR area) $18 sterilized dog $30 non-sterilized Seattle,WA yes dog-$33 unsterilized, $15 sterilized cat- $20 unsterilized, $10 sterilized potbelly pig-$115, renewal $25 Information as of January 2004 3 City/County Number of Pets Allowed per Residence 3 dogs, reasonable number West Jordan of cats Weber County 3 dogs 9 cats Riverton 3 dogs, 5 with hobby permit, no cat limit Bountiful 2 dogs, no cat limit All Five Burroughs No limit. of New York City 4