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HomeMy WebLinkAbout5389r ,4 RESOLUTION NO. 5389 A RESOLUTION APPROVING THE PRELIMINARY OFFICIAL STATEMENT DATED MAY 2, 1984 FOR CITY OF PUEBLO, COLORADO, GENERAL OBLIGATION STORM SEWER IMPROVEMENT BONDS, SERIES 1984, AND GENERAL OBLIGATION REFUNDING BONDS, SERIES 1984, IN THE AGGREGATE PRINCIPAL AMOUNT OF $9,150,000 AND AUTHORIZING AND DIRECTING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE THE FINAL OFFICIAL STATEMENT WITH ANY APPROPRIATE CHANGES AND ALTERATIONS AND TO DELIVER SAME BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PUEBLO, COLORADO, that: SECTION 1. The Preliminary Official Statement, dated May 2, 1984 for City of Pueblo, Colorado, General Obligation Storm Sewer Improvement Bonds, Series 1984, and General Obligation Refunding Bonds, Series 1984, in the aggregate principal amount of $9,150,000, copies of which are on file in the office of the City Clerk and available for public inspection, is hereby approved and the President of the City Council is hereby authorized and directed to execute and deliver the final Official Statement with any appropriate changes and alterations for and on behalf of the City of Pueblo, Colorado. INTRODUCED: May 14, 1984 By ALLYN MIDDELKAMP Councilman APPROVED: resl ent t e Council ATTEST: C ty Clerk r CD m PRELIMINARY OFFICIAL STATEMENT DATED MAY 2, 1984 e y NEW ISSUE Standard & Poor's Rating: AA E o In the opinion of Bond Counsel, under existing laws, regulations, rulings and judicial decisions, =f interest on the Bonds is exempt from all present federal income taxes, and, under existing laws of the CD y State of Colorado, interest on the Bonds is exempt from all present Colorado individual and corpo- rate income taxes. RL $994559000* Ew7 O co a CITY OF PUEBLO, COLORADO o $5,000,000 GENERAL OBLIGATION STORM SEWER IMPROVEMENT BONDS CD m R SERIES 1984 = y and $4,455,000 GENERAL OBLIGATION REFUNDING BONDS Z1. C2 O_._ r o d SERIES 1984 y Dated: June 1, 1984 Due: December 1, as shown below " The General Obligation Storm Sewer Improvement Bonds, Series 1984 (the "Series 1984 Bonds ") m and the General Obligation Refunding Bonds, Series 1984 (the "Series 1984 Refunding Bonds ") (the = o = Series 1984 Bonds and the Series 1984 Refunding Bonds are sometimes referred to herein collectively = m ° as the "Bonds ") will be issued as fully registered bonds without coupons in denominations of $5,000 o and integral multiples thereof. The principal of and premium, if an on the Bonds will be payable at 22= g P P P P Y, P Y m the principal office of , in ,Colorado, as Paying Agent. Interest on the Bonds is payable on June 1 and December 1, commencing December 1, 1984 by ° check or draft of the Paying Agent mailed to the registered owner. 10 N � O MATURITY SCHEDULE* o h $5,000,000 Series 1984 Bonds W o, CD Year Principal Interest Year Principal Interest E a o (December 1) Amount Rate (December 1) Amount Rate eo 0 1986 $125,000 % 1994 $450,000 % C , y a 1987 135.000 1995 490.000 `O .2 - a 1988 145,000 1996 540,000 o c 1989 155,000 1997 590,000 = ` � 1990 165,000 1998 645,000 CL E 99 1991 180,000 1999 705,000 E'EN 1992 195,000 2000 270,000 0 1993 210,000 co 3 MATURITY SCHEDULE* N N _ h $4,455,000 Series 1984 Refunding Bonds `o Year Principal Interest Year Principal Interest __ o (December 1) Amount Rate (December 1) Amount Rate ° ° `• 2000 $ 505,000 % 2003 $1,030,000 % m1= = z '' = y E 2001 850,000 2004 1,135,000 ID 40 2002 935,000 o <o Price: 100% ° o (Plus Accrued Interest from December 1, 1984) 3 The Series 1984 Bonds maturing prior to December 1, 19 , are noncallable for redemption prior E to maturity. Series 1984 Bonds maturing on December 1, 19 and thereafter are subject to redemption E = prior to maturity as described herein. The Series 1984 Refunding Bonds maturing on or before December 1, 19 , are noncallable for redemption prior to maturity. Series 1984 Refunding Bonds = maturing on December 1, 19 and thereafter are subject to redemption prior to maturity as described herein. CA <e = = The Bonds constitute legally valid general obligations of the City. All of the taxable property in the Ems= > > City is subject to the levy of general (ad valorem) taxes to pay the principal of and interest on the Bonds M without limitation as to rate or amount. The Bonds are offered, subject to prior sale, when, as and if issued by the City and accepted by the Underwriter named below, and subject to the approval of legality by Kutak Rock & Huie, as Bond W 3 :` Counsel and Disclosure Counsel, and certain other conditions. It is expected that delivery of the Series 1984 Bonds will be made on or about June 14, 1984, in Denver, Colorado, against payment therefor. ee W� co = Boettcher & Company f M,eeaenerd Bark= slice 1910 Im. The date of this Official Statement is May , 1984 * Preliminary; subject to change. No person has been authorized to give any information or to make any representations other than those contained in this Official Statement in connection with the offers made hereby and, if given or made, such information or represen- tations must not be relied upon as having been authorized by the City or the Underwriter. Neither the delivery of this Official Statement nor any sale hereunder shall under any circumstances create any implication that there has been no change in the affairs of the City since the date hereof. This Official Statement does not constitute an offer or solicitation in any jurisdiction in which such offer or solicitation is not authorized, or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation. The information set forth herein has been obtained from the City and other sources which are believed to be reliable, but it is not guaranteed as to accuracy or completeness by, and is not to be construed as a represen- tation by, the Underwriter. CONTENTS Off' OFFICIAL STATEMENT Page SUMMARY STATEMENT .. ............................... 3 INTRODUCTORY STATEMENT ............................ 5 USE OF PROCEEDS .... ............................... 6 DEBT STRUCTURE ..... ............................... 7 ASSESSMENTS, LEVIES AND COLLECTION ................ 11 THE BONDS .......... ............................... 13 THE CITY ............................. ........... 16 DEBT SERVICE SCHEDULE ............................. 24 PROPOSED ADDITIONAL FINANCINGS .................... 26 PUEBLO DEMOGRAPHICS ............................... 26 THE ORDINANCE ...... ............................... 29 UNDERWRITING ....... ............................... 30 RATINGS............ ............................... 30 ARBITRAGE .......... ............................... 31 PENDING LEGAL PROCEEDINGS ......................... 31 TAX EXEMPTION ...... ............................... 31 EXPERTS............ ............................... 31 APPROVAL OF LEGAL PROCEEDINGS ..................... 31 MISCELLANEOUS ...... ............................... 32 APPENDIX A - Audited Combined Financial Statements of the City of Pueblo, Colorado, as of and for the year ended December 31, 1983 THE BONDS HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED. IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. SUMMARY STATEMENT All capitalized terms used in this Summary Statement shall have the same meanings ascribed to such terms in the Official Statement. This Summary Statement is subject in all respects to more complete information set forth in the Official Statement and the appendices thereto. The City The City of Pueblo, Colorado, is a body corporate and politic and a municipal corporation duly organized and existing as a home rule city under the laws of the State of Colorado. The City, with an estimated population of 100,117, is located in south - central Colorado, approximately 120 miles south of Denver, Colorado, and 45 miles south of Colorado Springs, Colorado. See "THE CITY" and "PUEBLO DEMOGRAPHICS." Issuance of Bonds and Purpose of Issue The City is offering its City of Pueblo, Colorado, General Obligation Storm Sewer Improvement Bonds, Series 1984 (the "Series 1984 Bonds "), in the aggregate principal amount of $5,000,000, and its General Obligation Refunding Bonds, Series 1984 (the "Series 1984 Refunding Bonds ") (the Series 1984 Bonds and the Series 1984 Refunding Bonds are collectively referred to herein as the "Bonds ") in the aggregate principal amount of $4,455,000 *. The Bonds are issuable only as fully registered bonds without coupons in denominations of $5,000 and integral multiples thereof. The proceeds of the Bonds will be used for the purpose of providing funds to defray the cost of (i) the construction of certain storm sewer improvements and extensions within the City, (ii) refunding the City's General Obligation Bonds, Series A, dated March 1, 1974, previously issued and currently outstanding in the aggregate principal amount of $595,000 (the "Series A Bonds "), (iii) refunding the City's General Obligation Refunding Various Purpose Bonds, Series B, dated March 1, 1974, previously issued and currently outstanding in the aggregate principal amount of $4,380,000 (the "Series B Bonds ") and (iv) paying certain costs and expenses, including underwriter's discount, associated with the issuance of the Bonds, all as described under "USE OF PROCEEDS." *Preliminary; subject to change. -3- The storm sewer improvement project (the "Project ") is intended to alleviate flooding problems in Leach's Westview Addition to the City. The Project will increase the storm sewer system capacity in the particular area from approxi- mately 50 cubic feet per second ( "cfs ") to approximately 700 cfs. Construction of the Project is expected to begin in late August 1984 and to be completed in late May 1985. See "USE OF PROCEEDS." Security for the Bonds The Bonds are direct general obligations of the City, payable as to both principal and interest from general (ad valorem) taxes levied against all taxable property within the City without limitation as to rate or amount. See "THE BONDS." Additional Bonds Additional general obligation bonds payable from general property tax proceeds may be issued by the City upon a favorable vote of the qualified electors thereof, except that general obligation bonds for the acquisition, extension or improvement of water or the municipal waterworks system are not required to be approved by such favorable vote. -4- OFFICIAL STATEMENT $9,455,000* CITY OF PUEBLO, COLORADO $5,000,000 GENERAL OBLIGATION STORM SEWER IMPROVEMENT BONDS SERIES 1984 and $4,455,000* GENERAL OBLIGATION REFUNDING BONDS Series 1984 INTRODUCTORY STATEMENT This Official Statement, which includes the cover page, summary statement and appendices hereto, is furnished in connection with the offering of $9,455,000* aggregate prin- cipal amount of General Obligation Storm Sewer Improvement Bonds, Series 1984 (the "Series 1984 Bonds ") and General Obligation Refunding Bonds, Series 1984 (the "Series 1984 Refunding Bonds ") (the Series 1984 Bonds and the Series 1984 Refunding Bonds are collectively referred to herein as the "Bonds") of the City of Pueblo, Colorado ( the "City ") . The Bonds are legally valid general obligations binding upon the City. All of the taxable real property in the City is subject to the levy of general (ad valorem) taxes to pay the principal of and interest on the Bonds without limita- tion as to rate or amount. The Series 1984 Bonds are being issued pursuant to the City's Charter and a bond ordinance adopted by the City Council of the City (the "Ordinance "). At a general municipal election held in the City on November 8, 1983, a majority of the qualified electors voting voted in favor of the issuance of the Series 1984 Bonds. The Series 1984 Refunding Bonds are being issued pursuant to the City's powers as a home rule city under Article XX of the Colorado Constitution, the Colorado Public Securities Refunding Act, C.R.S. 11 -56 -101 et seq. the City's Charter and the Ordinance. See "THE ORDINANCE." Brief descriptions of the City, the Bonds and the Ordinance are included in this Official Statement. All references herein to the Ordinance are qualified in their entirety by references to such document, and references herein to the Bonds are qualified in their entirety by reference to the form thereof included in the Ordinance. During the period of the offering, copies of the Ordinance will be available at the offices of Boettcher & Company, Inc. (the "Underwriter ") in Pueblo and Denver, Colorado. Copies of the 1982 audited financial statements for the City will also be available at the offices of the Underwriter and will be forwarded to any prospective investor so requesting. *Preliminary; subject to change. -5- IMP USE OF PROCEEDS The net proceeds from the sale of the Bonds will be used for the purpose of providing funds to defray the cost of (i) the construction of certain improvments and extensions of the City's storm sewer system in the area around the Colorado State Fairgrounds, (ii) refunding the City's General Obligation Bonds, Series A, dated March 1, 1974, previously issued and currently outstanding in the aggregate principal amount of $595,000 (the "Series A Bonds "), (iii) refunding the City's General Obligation Refunding Various Purpose Bonds, Series B, dated March 1, 1974, previously issued and currently outstanding in the aggregate principal amount of $4,380,000 (the "Series B Bonds ") (the Series A Bonds and the Series B Bonds are collectively referred to herein as the "Refunded Bonds ") and (iv) paying certain costs and expenses, including Underwriter's discount, associated with the issuance of the Bonds. The storm sewer improvement project (the "Project ") is intended to alleviate flooding problems in the area of Leach's Westview Addition to the City, and involves the construction of a major storm sewer outfall line from Small Street along Prairie Avenue to St.Clair Street, thence along St.Clair Street to Alma Street, thence along Alma Street to Goodnight Street and thence along Argyle Street to the Arkansas River, an overall distance of approximately 7,000 feet. The Project will increase storm sewer capacity in the particular area from approximately 50 cubic feet per second ("cfs ") to approximately 700 cfs. The Project is expected to meet the storm sewer needs of the particular area for the foreseeable future. The Project is being designed by Sellards & Grigg, Lakewood, Colorado. Construction is expected to begin in late August 1984 and to be completed in late May 1985. The estimated application of the proceeds of the Bonds is as follows: Construction ............................. $ Escrow Fund .............................. Costs of Issuance and Underwriter's Discount* ................ $ 9,455,000 * Allocable $ to Series 1984 Bonds and $ to Series 1984 Refunding Bonds. -6- DEBT STRUCTURE Debt Limitation The City's Charter (the "Charter ") provides that the City may not issue bonds payable out of general property taxes (i) except pursuant to an ordinance duly adopted by the City Council of the City, (ii) until the question of such issuance shall have been approved by a majority of the qualified electors of the City at a special or general election, and (iii) if the aggregate amount of such indebtedness of the City (after giving effect to the indebtedness to be incurred) would exceed 10% of the assessed valuation of the taxable property within the City as shown by the last assessment for City purposes. Excluded from the computation of indebtedness for the purpose of this limitation are general obligation bonds or other evidences of indebtedness issued by the City for the acquisition, extension or improvement of water or the municipal water works system, local improvement district bonds, revenue bonds or refunding bonds. The City's current debt limit is $27,213,402 and the amount of outstanding debt applicable to the limit (after deductions allowed by law and assuming the issuance of the Bonds) is $9,455,000, leaving a legal debt margin of $17,758,402. Overlapping Debt The only entity which overlaps the City and which has substantial bonded indebtedness is School District #60. As of December 31, 1983, School District #60 had $1,675,000 in outstanding bonded indebtedness, with the last principal and interest payment due in 1984. The mill levy for School District #60 in 1983 (collectible in 1984) was 51.695, of which 4.229 is intended for the repayment of bonded indebtedness. Some portions of the City are subject to property tax levies for bonded indebtedness of metropolitan districts or other entities which overlap small portions of the City, but none of this indebtedness is material from the standpoint of the amount payable by residents of the City. Pueblo County imposed taxes at a mill levy of 31.230 in 1983 for county services; such taxes are payable in 1984. Summary of Indebtedness The following table summarizes the general debt and revenue bond obligations of the City as of May 1, 1984, as adjusted to give effect to the Bonds: -7- Authorized Interest Outstanding CateQory of Indebtedness Amount Rate Amount Direct General Debt G.O. Storm Sewer Improvement Bonds, Series 1984 $ 5,000,000* % $ 5,000,000 G.O. Refunding Bonds, Series 1984 4,455,000* % 4,455,000 G.O. Water Refunding Bonds Series 1984 24,115,000 6.6- 9.625% 24,115,000 Downtown General Improvement District General Obligation (1) 975,000 5.4 -7.0% 813,000 Total Direct Debt $34,383,000 Overlapping General Debt School District #60 11,540,000 5.2 -6.25% 735,000 Total Direct and Overlapping Debt $ 35,118,000 Revenue Bond Obligations Parking Facilities $ 475,000 4.25 -4.5% $ 50,000 Golf Course 200,000 4.75 -7.75% 10,000 Sewer Revenue 3,800,000 7.75- 11.625% 3,655,000 Total Revenue Bond Obligations $ 3,715,000 *Subject to change. (1) The District has purchased government securities in an amount sufficient to pay the interest on and principal of the bonds as such becomes due. The foregoing table does not include various obligations such as Special Assessments or Capital Leases referred to in Note 15 to the City's 1983 financial statements included as Appendix A hereto. Population and Debt Ratios The following table sets forth data relating to the ratio of general debt and overlapping debt to population and assessed valuation: Estimated City 1984 1983 1982 1981 1980 1979 Population 100,117 100,117 101,000 101,117 101,686 106,000 Direct Debt S 34,383,000(1) $ 32,488,000 $ 34,480,000 $ 30,390,000 $ 31,420,000 $ 32,410,000 Overlapping Debt(2) $ 735,000 $ 1,675,000 $ 6,230,000 $ 6,230,000 $ 8,220,000 $ 10,040,000 Per Capita Direct Debt $ 343.43 $ 324.50 $ 341.39 $ 330.54 $ 308.99 $ 305.75 Per Capita Direct Plus Overlapping Debt(2) $ 350.77 $ 341.23 $ 403.07 $ 362.16 $ 389.83 $ 400.47 Assessed Valuation(3) $272,134,020 $264,876,490 $263,193,020 $264,368,910 $249,389,910 $212,601,570 Direct Debt to Assessed Valuation .1263 .1227 .1310 .1150 .1260 .1524 Direct Plus Over- lapping Debt to Assessed Valuation .1290 .1290 .1547 .1385 .1589 .1997 (1) Includes the Bonds, General Obligation Water Refunding Bonds, Series 1984A and Series 1984B, and Downtown Improvement Bonds. Assumes average interest rate of 9.750% on the Bonds. (2) Includes only School District #60. See "Overlapping Debt." (3) Assessed values upon which taxes are collectible in the years indicated. Estimated Combined Debt Service Schedule The following table presents the City's principal and interest obligations on the Bonds (with pro forma interest at an estimated average interest rate of 9.750%), other existing general obligation indebtedness, and the total estimated debt service requirements: STIM General Year Obligation Fnding t he S 19 84 Bon The Series 12 Refund Bonds Combined Water Bond Total June 30 Principal Interes Princal Interest Debt Service Debt Se De bt Service 1985 -- $436,012.73 $ -- $430,800.50 $ 866,813.23 $2,293,057.67 $3,159,870.90 1986 -- 452,347.50 -- 446,940.00 899,287.50 2,750,810.00 3,650,097.50 1987 125,000 448,285.00 -- 446,940.00 1,020,225.00 3,823,942.50 4,844,176.50 1988 135,000 439,497.50 -- 446,940.00 1,021,437.50 3,826,392.50 4,8 +7,830.00 1989 145,000 429,335.00 -- 446,940.00 1,021,275.00 3,825,292.50 4,846,567.50 1990 155,000 417,891.25 -- 446,940.00 1,019,831.25 3,816,610.00 4,836,441.25 1991 165,000 405,285.00 -- 446,940.00 1,017,225.00 3,815,085.00 4,832,310.00 1992 180,000 391,260.00 -- 446,940.00 1,018,200.00 3,814,375.00 4,832,575.00 1993 195,000 375,547.50 -- 446,940.00 1,017,487.50 3,822,447.50 4,839,935.00 1994 210,000 358,072.50 -- 446,940.00 1,015,012.50 3,822,880.00 4,837,892.50 1995 450,000 328,635.00 -- 446,940.00 1,225,575.00 3,819,257.50 5,044,832.50 1996 490,000 285,845.00 -- 446,940.00 1,222,785.00 3,739,865.00 4,962,650.00 1997 540,000 237,925.00 -- 446,940.00 1,224,865.00 3,236,520.00 4,461,385.00 1998 590,000 185,520.00 -- 446,940.00 1,222,460.00 3,215,800.00 4,438,260.00 1999 645,000 125,535.00 -- 446,940.00 1,217,475.00 1,607,912.50 2,825,381.50 2000 705,000 60,382,50 -- 466,940.00 1,212,322.50 -- 1,212,322.50 2001 270,000(2) 13,095.00 505,000 422,195.00 1,210,290.00 -- 1,210,290.00 2002 850,000 355,375.00 1,205,375.00 -- 1,205,375.00 2003 935,000 266,550.00 1,201,550.00 -- 1,201,550.00 2004 1,030,000 167,785.00 1,197,785.00 -- 1,197,785.00 2005 1,135,000(3) 57,885.00 1,192,885.00 -- 1,192,885.00 (1) Includes debt service on $24,115,000 General Obligation Water Refunding Bonds, Series 1984A and Series 19848, which are additionally secured by a pledge of the net revenues of the City's municipal water works system, and it is anticipated that such debt service will be paid from such revenues. The General Obligation Water Refunding Bonds, Series 1984A and Series 1984B, were authorized by an ordinance finally adopted by the City Council on March 26, 1984, and issued as of April 15, 1984. (2) Final maturity of the Series 1984 Bonds is December 1, 2000. (3) Final maturity of the Series 1984 Refunding Bonds is December 1, 2004. STIM ASSESSMENTS, LEVIES AND COLLECTION Procedures After the City Council of the City enacts the ordinance to make the proper mill levy for the ensuing fiscal year (as described under "THE CITY - -City Budget "), the City Council is directed to cause the new mill levy to be certified to the County Commissioners. The County Assessor extends the mill levy upon the tax list and includes the taxes in the County Assessor's general warrant to the County Treasurer for collection. Colorado statutes provide procedures for the valuation of property for assessment purposes. Under Colorado law, both real and personal property is subject to taxation, but there are classes of property which are exempt from taxation including household furnishings, personal effects and intangible personal property. Using manuals and data furnished by the State Property Tax Administrator, the County Assessor determines the actual value of all taxable real property, and most other classes of taxable property, as of January 1 each year, the annual date of assessment. The factors to be considered by the County Assessor to determine actual value in the case of unimproved land (except portions used for open space) include consideration of the amount of time required to realize potential future values. The assessed valuation of residential property, as provided in the Colorado statutes, is 21% of the base year value (1977 for property tax year 1984); agricultural property is valued on the basis of earning or productive capacity; all other property, except public utilities, producing mines and oil and gas lands, are assessed at 29% of value; producing mines and land or leaseholds producing oil or gas are valued on a basis of annual production; and household furnishings, personal effects, business inven- tories, livestock, agricultural products and agricultural equipment are exempt from taxation. In addition to initial assessment by the pertinent County Assessor, the applicable Colorado statutes provide an opportunity for review at various stages by the County Board of Equalization, the Board of Assessment Appeals, and the state courts. The State Board of Equalization has provided statutory authority to issue orders to county assessors to raise or lower the aggregate valuation with respect to any class or subclass of property. According to the State Property Tax Administrator, Pueblo County was found to be in -11- substantial compliance in respect to the valuation of all categories of property in 1983 and no orders were issued to the Pueblo County Assessor. Pursuant to the City's sales tax ordinance, the City Council cannot adopt a mill levy exceeding 19.75 per thousand dollars assessed value (19.75 mills) for municipal purposes (excluding water bonds) without causing the City's sales and use tax ordinance to become null and void. For 1983 the mill levy was 18.00 mills. If the City Council fails to make the tax levy for any year, the rate last fixed is the rate for the ensuing year. Historical Property Tax Data The following table, based on information compiled by the City, provides a summary of assessed valuations, tax levies, collections and delinquencies for the City: ( 1 ) Assessed values are for the years in which taxes are collected. -12- Total Outstanding Total Tax Collections Accumulated Delinquent Collections as a Outstanding Taxes as Fiscal Mill Assessed Total Including Percentage Delinquent Percentage of Year Levy Valuation(-) Tax Levy Delinquent of Levy Tax Collections Total Levy 1973 16.75 $136,560,322 $2,287,385 $2,268,443 99.17% $ 18,942 .83% 1974 16.75 146,407,679 2,452,328 2,418,143 98.61 34,185 1.40 1975 16.75 157,455,131 2,637,373 2,614,565 99.14 22,808 .86 1976 19.75 167,429,450 3,306,731 3,271,151 98.92 35,580 1.06 1977 18.00 191,764,850 3,451,767 3,414,538 98.92 37,229 1.08 1978 18.00 202,467,870 3,644,421 3,588,128 98.46 56,293 1.54 1979 18.00 212,601,570 3,826,828 3,780,114 98.78 46,714 1.22 1980 18.00 249,389,830 4,489,117 4,407,010 98.17 82,107 1.82 1981 18.00 264,438,910 4,758,640 4,673,809 98.22 84,831 1.78 1982 18.00 263,193,020 4,737,474 4,663,584 98.44 73,890 1.56 1983 18.00 264,876,490 4,767,776 4,727,627 99.16 40,450 .85 1984 18.00 272,134,020 4,898,412 N/A N/A N/A N/A ( 1 ) Assessed values are for the years in which taxes are collected. -12- Largest Taxpayers The following table, based on information provided by the Pueblo County Treasurer, lists the ten largest taxpayers in the City in 1983: Name Assessed Value Mountain States Tel. & Tel. Co. $15,122,300 (Mountain Bell) Central Tel. & Utilities Corp. 7,003,600 (Southern Colorado Power) Public Service Co. of Colo. 2,978,220 Pueblo Mall Limited Partnership 2,311,120 Rockwool Industries 1,239,140 Denver U.S. Bank Corporation, Inc. 1,236,680 Mercantile Properties 868,500 PC II Mart Ltd. 640,830 Colorado National Bank- Pueblo 472,370 Pueblo Beef Products 291,910 Total $ 32,164,670 THE BONDS General Description The Bonds will be dated as of the June 1 or December 1 next preceding their date of issue, or, if issued on a June 1 or December 1, as of such date; provided, however, that any Bonds issued prior to December 1, 1984 shall be dated as of June 1, 1984. If interest on the Bonds is in default, Bonds issued in exchange for Bonds surrendered for transfer or exchange will be dated as of the date to which interest has been paid in full on the Bonds surrendered. The Bonds are issuable solely in the form of fully registered bonds in the denomination of $5,000 or any integral multiple thereof, will mature and bear interest from their date at the rates of interest specified on the cover page of this Official Statement. The principal of and premium, if any, on the Bonds will be payable at the princi- pal office of in Colorado, as Paying Agent. Interest on the Bonds, payable on June 1 and December 1 of each year, commencing on December 1, 1984, is payable to the registered owner thereof as of the Record Date (15 days prior to any interest payment date) by check or draft of the Paying Agent mailed to the registered owner of each Bond. -13- r =df iYi: If upon presentation at maturity, payment of any Bond is not made as provided in the Ordinance, interest shall continue thereon at the interest rate designated in such Bond until the principal thereof is paid in full. In the event any bond is mutilated, lost, stolen or destroyed, the City may execute a new bond of like series, date, maturity and denomination as that mutilated, lost, stolen or destroyed; provided that the City shall have received indemnity satisfactory to it and provided further in the case of any mutilated bond, such mutilated bond shall first be surrendered to the City, and in the case of any lost, stolen or destroyed bond, there shall be first furnished to the City evidence of such loss, theft or destruction satisfactory to the City. In the event any such bond shall have matured, instead of issuing a duplicate bond, the City may pay the same without surrender thereof. The City may charge the holder of such bond with its reasonable fees and expenses (including printing) in connection with the foregoing. Optional Redemption The Series 1984 Bonds maturing prior to December 1, 19 are noncallable for redemption prior to maturity. Series 1984 Bonds maturing on December 1, 19 and thereafter are subject to redemption at the option of the City, on December 1, 19 , and on any interest payment date thereafter, in whole or in part in inverse order of maturity (by lot within a maturity in the manner designated by the Paying Agent) at a price equal to the principal amount thereof plus accrued interest thereon to the redemption date, plus a premium as set forth below: Series 1984 Bonds Redemption Date (Dates Inclusive) Premium (if an December 1, 19 through November 30, 19 December 1, 19 through November 30, 19 December 1, 19 and thereafter No Premium The Series 1984 Refunding Bonds maturing on or before December 1, 19 are noncallable for redemption prior to maturity. Series 1984 Refunding Bonds maturing on December 1, 19 and thereafter shall be redeemable at the option of the City, in whole or in part, and if in part, in inverse order of maturities and by lot within a maturity in the manner designated by the Paying Agent, on December 1, 19 , and on any interest payment date thereafter, at a redemption price (expressed as a percentage of principal amount), plus -14- accrued interest thereon to the redemption date as set forth below: Series 1984 Refunding Bonds Redemption Dates Redemption (Dates Inclusive) Price December 1, 19 through November 30, 19 December 1, 19 through November 30, 19 December 1, 19 and thereafter Notice and Effect of Redemption Notice of any redemption of Bonds shall be given by the Paying Agent in the name of the City by sending a copy of such notice by certified or registered first - class, postage prepaid mail, at least thirty (30) days prior to the redemption date, to the registered owners of each of the Bonds being redeemed. Such notice shall specify the number or numbers of the Bonds or portion thereof so to be redeemed and the redemption date. The portion of any Bond to be redeemed shall be in the principal amount of $5,000, or any integral multiple thereof, and in selecting Bonds for redemption, the Paying Agent shall treat each Bond as representing that number of Bonds which is obtained by dividing the principal amount of that Bond by $5,000. If any of the Bonds shall have been duly called for redemption and if on or before the redemption date there shall have been deposited with the Paying Agent in the Bond Fund sufficient moneys to pay the redemption price of such Bonds at the redemption date, then said Bonds shall become due and payable at such redemption date, and from and after such date interest will cease to accrue thereon. Any Bonds redeemed prior to their maturity by call for prior redemption or otherwise shall not be reissued and shall be cancelled the same as Bonds paid at or after maturity. No further interest shall accrue on the principal of any Bond called for redemption after the redemption date if notice thereof has been given in accordance with the Ordinance and funds sufficient for such redemption are available therefor. Transfer and Exchanae of Bonds Bonds may be transferred or exchanged by the registered owner thereof upon payment of cost, any tax or governmental charge required to be paid with respect to such transfer or exchange, at the principal corporate trust office of the Paying Agent. Bonds may be exchanged for a like aggregate -15- principal amount of Bonds of other authorized denominations of the same type and maturity. Upon surrender for transfer of any Bond, duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner of such Bond or his attorneys duly authorized in writing, the City shall execute and the Paying Agent shall authenticate and deliver in the name of the transferee or transferees a new Bond or Bonds for a like aggregate principal amount. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes. Notwithstanding any of the above, the City and the Paying Agent shall not be required (a) to issue, register, transfer or exchange any Bond during a period beginning at the opening of business on the Record Date and ending at the close of business on the interest payment date or day on which the applicable notice of redemption is given or (b) to register, transfer or exchange any Bond selected or called for redemption in whole or in part. Additional Bonds Additional general obligation bonds payable from general property tax proceeds may be issued by the City upon a favorable vote of the qualified electors thereof, except that general obligation bonds for the acquisition, extension or improvement of water or the municipal waterworks system are not required to be approved by such favorable vote. THE CITY General The City was incorporated in 1885 and is one of the original home rule cities under the Constitution of Colorado. It is an incorporated municipality, a body politic and corporate, existing under the laws of Colorado. Because the City is a "home rule" city, the City's Charter governs all local and municipal matters. State law applies to matters of local or municipal concern only to the extent not superseded by the Charter or ordinances of the City. The Constitution of Colorado reserves to the City certain powers, including the power to issue, refund and liquidate all kinds of municipal obligations and the power to assess property in the City, and to levy and collect taxes on such property, for municipal purposes. City Council The governing body of the City consists of the seven members of the City Council. Four of these members of the City Council are elected by district and three are elected -16- from the City at large. The members of the City Council are elected for staggered four -year terms at the general municipal election held November in odd numbered years. The members of the City Council elect the President of the City Council, who is the presiding officer and is recognized as head of the City government for ceremonial purposes. The President of the City Council votes like other members of the City Council, has no veto power, and has no special administrative duties. The President and members of the City Council, the date of expiration of their current terms, and their principal occupations are, respectively, as follows: All legislative powers of the City are held by the City Council except as provided in the Charter. The affirmative vote of four members of the City Council is required for the adoption of any ordinance. The Charter provides for voter referendum and initiative, pursuant to which voters can require the City Council to submit ordinances to the voters at special or general city elections. The City Council appoints all boards and commissions, unless otherwise required by law, and it appoints the City Manager. The City Manager is the executive head of the government of the City and is responsible for the enforcement of the City's laws and ordinances. The City Manager also administers the operation of all the -17- Expiration Member of Term Occupation Michael G. Salardino 12/31/85 Advertising, KOAA -TV (President) Michael Occhiato 12/31/85 Board Member, Royal Crown Hires Bottling Co., Denver, CO Douglas L. Ring 12/31/85 Real Estate Salesman, Coldwell Banker Apple, Inc. Kenneth F. Hunter 12/31/87 Vice President, Pueblo Bank & Trust Paul Jones 12/31/87 CEO, Martec Corp. Reimar von Kalben 12/31/87 Owner, Allied Refrigeration & Electric Allyn Middelkamp 12/31/87 Owner, Middelkamp Ambulance Service All legislative powers of the City are held by the City Council except as provided in the Charter. The affirmative vote of four members of the City Council is required for the adoption of any ordinance. The Charter provides for voter referendum and initiative, pursuant to which voters can require the City Council to submit ordinances to the voters at special or general city elections. The City Council appoints all boards and commissions, unless otherwise required by law, and it appoints the City Manager. The City Manager is the executive head of the government of the City and is responsible for the enforcement of the City's laws and ordinances. The City Manager also administers the operation of all the -17- departments and divisions of the City, including the Finance, Public Safety, Parks and Recreation, Personnel, Public Works, Purchasing and Transportation Departments. The City Manager has the authority to appoint directors of all departments of the City, including the City Attorney. City Employees The City has a total of approximately 672 full -time employees. Three unions represent City employees. The National Association of Government Employees Local R9 -45 represents over 200 City employees. Approximately 140 employees are represented by the International Brotherhood of Firefighters. The International Brotherhood of Police Officers Local 537 represents about 170 employees. Contracts which expire at the end of 1985 covering all of the City's unionized employees currently are in effect. The current contracts with the City's employees were negotiated in 1983 for a term of two years; however, each of the contracts provides that salaries and certain benefits are negotiated annually, within the general terms of the respective contracts. The City, through a wholly -owned corporation, employs approximately 40 municipal transit workers who are represented by the Amalgamated Transit Workers Local 683. The transit workers are also working pursuant to a two -year contract which expires at the end of 1985. The City considers its employee relations to be satisfactory. Retirement Plans All employees of the City, other than employees of the fire and police departments, participate in the Municipal Division of the State of Colorado Public Employees' Retirement Association ( "PERA "). The City currently is required to contribute to PERA an amount equal to 10.20% of salary of all covered employees, and each covered employee is required to contribute 8.0% of salary. Benefits include an annuity, payable by PERA upon an employee's retirement, equal to 2 -1/2% of final average salary (the average of the highest three consecutive years) per year of service for the first 20 years of service and an additional 1% of final average salary per year of service for the next 20 years, with a maximum annual annuity of 70% of final average salary. Disability and death benefits also are provided. According to the 1983 Statistical Supplement to the Annual Report of the Public Employees' Retirement Association of Colorado (the "Supplement "), the Municipal Division of the c■ Fund had an unfunded accrued service liability of $52,342,744 as of December 31, 1982. Colorado statutes require the unfunded accrued service liability to be amortizable over a period not exceeding 60 years, and the unfunded accrued service liability for the Municipal Division is reported to be amortizable over approximately a 35 -year period, based on current contribution levels and the actuarial assumptions set forth in the Supplement. The Municipal Division, which includes municipal employees throughout Colorado except police, fire and school employees and judges, had 6,206 active members and 974 annuitants as of December 31, 1982. The actuarial assumptions stated in the Supplement include the following: a 7% investment return rate, compounded annually; eligiblity for special early reduced pension retirement at age 55 with 20 or more years of service, and age 60 with 5 or more years of service; and an increase in payroll for active members at the minimum rate of 5.5% per year. The "entry age normal cost" method of valuation is used in determining liabilities and normal cost. An actuarial report for PERA is prepared annually. The City is affiliated with the State Fire and Police Pension Association ( "FPPA ") which was created in 1979 as a result of enactment of Senate Bill 79 by the General Assembly. Fulltime firefighters and police officers hired on or after January 1, 1980 (approximately 47 of the City's police and firefighters), and electing employees hired before January 1, 1980, are entitled to the normal retirement benefits administered by FPPA. Benefits are calculated as 2% of the average of the employee's highest three year's salary per year of service (up to a maximum of 25 years) . Disability retirement and survivor benefits are provided to all full -time firefighters and police officers. Currently employees and employers are each required to contribute 8% of salary to FPPA. The FPPA plans are required to be actuarially valued annually, and the rates of contributions may be adjusted based upon the needs of the plans to reach actuarial soundness, as long as employee contributions do not exceed employer contributions. The actuarial present value of death and disability benefits was calculated to be $22,073,760 as of January 1, 1983 by A.S. Hansen, Inc., based upon certain actuarial assumptions, including an investment return of 7.5 %, life expectancy of participants based on the 1971 Group Annuity Mortality Table (modified for police and fire experience), an assumed average retirement age of 52, and rate of disablement based on actual experience. The actuarial present value of both vested and nonvested retirement plan benefits was not calculated as of January 1, 1983 but according to the calculations would not exceed $641,213, the total amount of employee contributions at that date. Based on the actuarial -19- assumptions used in the valuation, the employer and employee contributions are expected to fully fund all benefits for fire and police employees hired on or after April 7, 1978. The unfunded liability for employees hired before that date would be funded and amortized over 40 years. The State of Colorado is authorized to contribute $20,000,000 annually to a fund designated to assist in the payment of death and disability benefits and the amortization of the accrued unfunded liabilities of the police and firefighers' pension plans throughout Colorado. In 1981, approximately $900,000 was distributed to volunteer firefighter pension plans, and approximately $13,100,000 was contributed to fire and police pension funds for funding of unfunded liabilities with respect to employees hired before January 1, 1980. The balance of $6,000,000 was contributed to FPPA to fund death and disability benefits. The City's firefighters and police who were hired before April 8, 1978 (approximately 119 firefighters and 150 police) are covered by the City's Fire Pension Fund and Police Pension Fund, respectively. Based upon the actuarial valuation reports dated January 1, 1982 prepared by A.S. Hansen, Inc., the unfunded accrued liability for the Fire Pension Fund was $19,207,422, and for the Police Pension Fund, it was $7,132,332. The actuarial assumptions selected included a 7 -1/2% per year (compounded annually) interest rate; retirement at age 50 with 20 years of service for firefighters and at age 55 with 25 years of service for police; graduated disability rates; and mortality rates based upon the 1971 Group Annuity Mortality Table (modified for police and fire experience). Assets were valued at market value. The "entry age normal cost" funding method (which involves the calculation of current funding requirements and past service funding requirements) was used. The 1981 annual payment required to amortize unfunded accrued liability over 40 years from January 1, 1980 was calculated to be required to amortize unfunded accrued liability over 40 years from January 1, 1980 was calculated to be $1,900,424 (or 70.059% of salary) for the Fire Pension Fund and $927,345 (or 28.227% of salary) for the Police Pension Fund. In order to reduce the requirement payments from these amounts, the City adopted a hardship resolution pursuant to the Colorado Policemen's and Firemen's Pension Reform Act. For 1984, the City expects to contribute 16.72% of police salaries and 25.397% of firefighter salaries to these funds with the employees contributing 8.0% of salary. The statute creating the FPPA restricts the use of the $20,000,000 annual State contribution for the amortization of unfunded liability accrued for full rank escalation benefits, if continued by affiliated plans, with respect to -20- employment after January 1, 1980. "Rank escalation" is defined by the statute as the addition to the retirement pension or disability benefit of an amount equal to a fixed percentage of any salary increase, as well as longevity or additional pay based on length of service, granted the rank a member occupied prior to retirement or disability. The City elected to continue rank escalation for fire employees hired prior to April 8, 1978 who retire in 1980, but the City has taken no further action with respect to the continuation or termination of rank escalation benefits for other employees hired before April 8, 1978. The statute does not impose specific requirements for the amortization of accrued unfunded liability for rank escalation benefits, and the City presently is not making payments to amortize the unfunded liability accrued for full rank escalation benefits. Based upon the actuarial valuation reports dated January 1, 1980 prepared by A.S. Hansen, Inc. the unfunded accrued liability, taking full rank escalation into account, was $19,399,899 for the Fire Pension Fund and $7,365,543 for the Police Pension Fund. These amounts exceeded the actuarial valuations for unfunded accrued liabilities calculated without taking full rank escalation into account by $192,477 for the Fire Pension Fund and by $233,211 for the Police Pension Fund. The following table presents information for the years indicated on these four pension plans affecting the City's employees: PERA Number of Employees Covered Employer Contribu- tion Rate Actual Employer Contributions FFPA Number of Employees Covered Employer Contribu- tion Rate Actual Employer Contributions 1983 1982 1 1980 1979 1978 1977 356 387 433 443 428 439 415 10.20% 10.20% 10.20% 9.86% 9.86% 9.86% 9.86% $666,634 $649,884 $630,649 $579,519 $537,747 $487,563 $444,053 47 45 49 42 (1) (1) (1) 8.0% 8.0% 8.0% 8.0% (1) (1) (1) $ 74,032 $ 69,578 $ 54,360 S 51,265 (1) (1) (1) Fire Pension Fund Number of Employees Covered 119 124 143 Employer Contribu- tion Rate 25.397% 25.397% 11.70% Actual Employer Contributions $702,462 $717,057 $321,560 Police Pension Fund Number of Employees Covered 150 151 152 Employer Contribu- tion Rate 16.72% 16.72% 16.72% Actual Employer Contributions $606,861 $574,931 $542,818 (1) The FFPA did not begin operation until 1980. 156 158 160 154 18.97% 27.15% 17.99% 14.54% $559,757 $750,000 $450,000 $315,000 184 12.44% $427,745 _7l- 186 183 189 18.50% 19.85% 21.70% $594,084 $592,264 $554,533 Municipal Services The City provides its citizens with fire and police protection, streets and highways, public works and improve- ments, parks and recreation services, health and sanitation services, social services, planning and zoning and general administrative services. Water services are provided by the Board of Water Works of the City. Gas and electric services in the City are provided by private companies. The City owns and operates Pueblo Memorial Airport and a separately incorporated bus company providing services within the City. The airport facility currently is operated on a self - sustaining basis, and the City expects continuation of operation on this basis. The bus company operations are subsidized by the City and the federal government, with subsidies from the City's general fund and the federal government expected to be $489,712 each for 1984. Citv Revenues The following table sets forth the sources of the City's general revenues for the periods indicated: Year Taxes(1) Licenses and Permits(2) Intergov- ernmental Transfers(31 Charge for Services(4) Fines and Forfe(ts(5) Highway Users(6) Other(7) Totals 1971 $ 5,842,099 $251,614 $171,622 $278,847 $148,572 $ 898,478 $ 96,815 $ 7,688,047 1972 7,736,549 273,082 180,374 300,462 366,431 826,521 76,990 9,760,409 1973 9,070,141 311,157 244,910 330,750 369,013 844,513 225,701 11,396,185 1974 10,023,829 343,532 300,362 387,806 265,037 915,000 250,735 12,486,301 1975 10,910,822 294,438 387,174 405,314 262,670 945,000 177,334 13,382,752 1976 12,864,551 302,454 411,821 375,568 240,568 1,185,000 259,339 15,639,301 1977 15,188,937 321,115 432,189 394,779 249,942 1,277,480 409,548 18,273,990 1978 16,475,631 379,027 531,848 306,364 266,512 1,276,076 637,368 19,872,826 1979 17,928,455 390,215 574,565 335,381 299,927 1,440,998 926,541 21,896,082 1980 18,438,965 236,844 587,416 346,932 422,049 2,078,327 1,151,301 23,306,834 1981 19,377,323 290,929 623,282 323,879 537,594 1,768,032 1,429,315 24,350,354 1982 19,503,570 188,641 584,366 329,561 416,894 1,742,114 1,733,494 24,498,640 1983 20,110,274 97,577 611,395 163,331 307,493 1,868,871 1,544,664 24,703,605 1984(8) 5,554,097 32,233 210,993 31,427 90,158 433,757 102,101 6,454,766 (1) Includes property taxes, cigarette and tobacco taxes, sales and use taxes and franchise taxes. (2) Includes health licenses, professional and occupational licenses, amusement licenses, building permits and miscellaneous other licenses and permits. (3) Includes alcoholic beverage taxes and motor vehicle taxes collected by the State of Colorado, the County of Pueblo's portion of the costs of maintaining a sanitary landfill and animal shelter and miscellaneous other intergovernmental transfers. (4) Includes revenues from sales of building code books, codification books and traffic ordinance books, witness fees, zoning and rezoning variances, xerox copies and miscellaneous other sources. (5) Principally from municipal court. (6) Collected and distributed by the State of Colorado. (7) Includes interest earned on City funds, rentals, sale of trees, discounts earned and miscellaneous other sources. (8) The numbers set forth for 1984 are unaudited totals for the first quarter of 1984. -22- The following table provides a breakdown by type of tax for the City's tax revenues for the years indicated: Calendar Year Property Taxes Sales and Use Taxes Franchise Taxes Tobacco Taxes Total Taxes 1971 $2,246,847 $ 3,089,119 $ 380,225 $125,908 $ 5,842,099 1972 2,187,771 4,991,285 426,970 130,523 7,736,549 1973 2,260,159 6,017,049 527,452 265,481 9,070,141 1974 2,409,804 6,531,058 522,690 560,277 10,023,829 1975 2,604,710 7,150,531 586,370 569,211 10,910,822 1976 3,265,461 8,266,929 738,191 593,970 12,864,551 1977 3,405,940 9,570,911 1,630,734 581,352 15,188,937 1978 3,580,537 11,153,351 1,163,332 578,411 16,475,631 1979 3,771,192 12,225,372 1,363,909 567,982 17,928,455 1980 4,401,090 11,944,532 1,496,467 596,876 18,438,965 1981 4,229,107 12,908,246 1,648,309 591,661 19,377,323 1982 4,210,614 13,027,557 1,733,448 531,951 19,503,570 1983 4,272,393 13,314,608 2,057,295 465,978 20,110,274 1984* 1,003,219 3,665,852 775,387 109,639 5,554,097 *The numbers set forth are unaudited totals for the first quarter of 1984. Summary of Operations The following table sets forth a summary of revenues and expenditures for the City's general fund for the five year period ended December 31, 1983: 1983 1982 1981 1980 1979 Revenues Taxes $20,110,274 19,503,570 19,377,323 18,025,563 17,575,535 Licenses & Permits 97,577 188,641 290,929 236,844 390,215 Revenue from other Agencies 611,395 584,366 623,282 587,416 574,565 Charges for Services 163,331 329,561 323,879 346,932 335,381 Fines & Forfeits 307,493 416,894 537,594 422,049 299,927 Interest Income 1,183,203 1,589,511 1,252,040 856,986 709,382 Miscellaneous 361,461 143,983 177,275 294,315 217,159 Total Revenues 22,834,734 22,756,526 22,582,322 20,770,105 20,102,164 Expenditures Current General Government 2,155,024 1,734,213 1,811,896 1,460,919 1,459,339 Public Safety 11,556,718 11,714,095 10,743,237 9,947,176 9,887,458 Parks & Recreation 2,155,722 2,441,814 2,518,969 2,282,702 2,283,573 Transportation 1,865,395 1,394,894 1,386,844 1,174,274 1,187,036 Public Works 3,394,823 3,495,091 3,243,965 3,063,064 3,059,987 Insurance & contingencies 558,432 466,006 263,751 343,521 612,134 Intergovernmental 1,441,157 705,446 1,608,649 1,129,896 1,045,121 Capital Outlay 503,567 868,613 452,719 660,233 Reimbursement to other funds Total Expenditures 23,630,838 22,820,172 22,024,030 20,061,785 19,534,648 Excess (Deficiency) of revenues over expenditures ( 796,104) ( 63,646) 558,292 708,320 567,516 Other financing sources Operating transfers in 4,483,373 3,274,548 3,096,396 2,741,053 2,994,836 Operating transfers out ( 7,301,163) (2,364,378) (1,993,180) (2,327,251) (2,691,531) Total other financing sources ( 2,817,790) 910,170 1,103,216 413,802 303,305 EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES OVER EXPEND- ITURES AND OTHER USES ( 3,613,894) 846,524 1,661,508 1,122,122 870,821 Balance, January 1 9,855,868 9,185,746 7,524,238 6,398,744 5,523,927 Balance, December 31 $ 6,241,974 10,032,270 9,185,746 7,500,866 6,398,748 -23- 21 City Budget The Charter requires the City Manager to submit to the City Council an annual or current expense budget for the ensuing fiscal year and a capital budget not later than the first regular meeting of the City Council in October of each year. The annual budget is required to contain an estimate of all anticipated revenues and the estimated expenditures necessary for the operation of the City's departments, offices and agencies. It is also required to include an estimate of the general fund surplus or deficit, debt service requirements and an estimate of the sum required to be raised by tax levy for the ensuing fiscal year. After public hearing, the City Council may adopt the budget without change or may amend the budget by adding new items of expenditure or by increasing, decreasing or removing items of expenditure, except that the City Council may not reduce any item of appropriation for debt service. The Charter directs the City Council in adopting the budget to estimate the amount of money necessary to be raised by tax levy, taking into account total proposed expenditures and estimated revenues. Prior to December lst of each year, the City Council is required to adopt the budget, an appropriation ordinance and the tax levy ordinance. For a description of the process by which property is assessed and ad valorem taxes are levied and collected, see "ASSESSMENTS, LEVIES AND COLLECTION." Capital Improvements The City annually budgets and expends funds on capital improvements for street construction, replacement and addition of traffic control devices, improvements and acquisitions of recreational facilities, and other similar improvements. Capital improvements ordinarily are funded from the City's general funds. The City estimates that expenditures for such capital improvements will be approximately $2.34 million in 1984. In addition, the City intends to provide certain improvements in connection with the establishment of a facility for Sperry Corporation in the vicinity of the City, the cost of which improvements is estimated to be $6.15 million. See "PUEBLO DEMOGRAPHICS -- Sperry Corporation." DEBT SERVICE SCHEDULE The following table sets forth the debt service requirements on the Bonds. -24- The Series 1984 Bonds The Series 1984 Refunding Bonds Periodic Annual Payment Date Principal(l) Interest (l) Principal(l) Interest (l) Payment December 31 )(1 12/01/84 -- $209,838.98 $ -- $207,330.50 $ 417,169.48 $ 417,169.48 06/1/85 -- 226,173.75 -- 223,470.00 449,643.75 12/1/85 -- 226,173.75 -- 223,470.00 449,643.75 899,287.50 06/1/86 -- 226,173.75 -- 223,470.00 449,643.75 12/1/86 125,000 226,173.75 -- 223,470.00 574,643.75 1,024,287.50 06/1/87 -- 222,111.25 -- 223,470.00 445,581.25 12/1/87 135,000 222,111.25 -- 223,470.00 580,581.25 1,026,162.50 06/1/88 -- 217,386.25 -- 223;470.00 440,856.25 12/1/88 145,000 217,386.25 -- 223,470.00 585,856.25 1,026,715.50 06/1/89 -- 211,948.75 -- 223,470.00 435,418.75 12/1/89 155,000 211,948.75 -- 223,470.00 590,418.75 1,025,837.50 06/1/90 -- 205,942.50 -- 223,470.00 429,412.50 12/1/90 165,000 205,942.50 -- 223,470.00 594,412.50 1,023,825.00 06/1/91 -- 199,342.50 -- 223,470.00 422,812.50 12/1/91 180,000 199,342.50 -- 223,470.00 602,812.50 1,025,625.00 06/1/92 -- 191,917.50 -- 223,470.00 415,387.50 12/1/92 195,000 191,917.50 -- 223,470.00 610,387.50 1,025,775.00 06/1/93 -- 183,630.00 -- 223,470.00 407,100.00 12/1/93 210,000 183,630.00 -- 223,470.00 617,100.00 1,024,200.00 06/1/94 -- 174,442.50 -- 223,470.00 397,912.50 12/1/94 450,000 174,442.50 -- 223,470.00 847,912.50 1,245,825.00 06/1/95 -- 154,192.50 -- 223,470.00 377,662.50 12/1/95 490,000 154,192.50 -- 223,470.00 867,662.50 1,245,325.00 06/1/96 -- 131,652.50 -- 223,470.00 355,122.50 12/1/96 540,000 131,652.50 -- 223,470.00 895,122.50 1,250,245.00 06/1/97 -- 106,272.50 -- 223,470.00 329,742.50 12/1/97 590,000 106,272.50 -- 223,470.00 919,742.50 1,249,485.00 06/1/98 -- 78,247.50 -- 223,470.00 301,717.50 12/1/98 645,000 78,247.50 -- 223,470.00 946,717.50 1,248,435.00 06/1/99 -- 47,287.50 -- 223,470.00 270,757.50 12/1/99 705,000 47,287.50 -- 223,470.00 975,757.50 1,246,515.00 06/1/00 -- 13,095.00 -- 223,470.00 236,565.00 1211100 270,000 13,095.00 505,000 223,470.00 788,095.00 1,024,660.00 06/1/01 -- -- -- 198,725.00 198,725.00 1211101 -- -- 850,000 198,725.00 1,048,725.00 1,247,450.00 06/1/02 -- -- -- 156,650.00 156,650.00 1211102 -- -- 935,000 156,650.00 1,091,650.00 1,248,300.00 6/01/03 -- -- -- 109,900.00 109,900.00 12/1/03 -- -- 1,030,000 109,900.00 1,139,900.00 1,249,800.00 06/1/04 -- -- -- 57,885.00 57,885.00 12/1/04 -- -- 1,135,000 57,885.00 1,192,885.00 1,250,770.00 Totals (1) Preliminary; subject to change. -25- PROPOSED ADDITIONAL FINANCINGS The City may issue its sewer revenue bonds in the ap- proximate aggregate principal amount of $17,000,000 during 1984. If such bonds are issued, the proceeds of the pro- posed bond issue would be used to finance the City's portion of the cost of construction of a new sewer treatment plant. It is intended that the remaining portion of the cost of construction would be paid by obtaining United States government grant. It is intended that principal of and interest on the proposed bonds would be paid from revenues of the City's sewer system. Except as set forth above, the City does not anticipate any additional financings in 1984. PUEBLO DEMOGRAPHICS Population The population of the City for 1983 was estimated by the Pueblo Area Council of Governments, Regional Planning Division, to be 100,117. This compares to a population of 97,774 in the 1970 Census, and a peak estimated population of 105,312 in 1975 and a 1980 census of 101,686. As of December 31, 1982, the median age of the City was estimated to be 31.2 years; as of the same date, the median age for the State of Colorado was estimated to be 29.6 years. The median household effective buying income for the City was estimated to be $18,200 as of December 31, 1982; the median household effective buying income for the State of Colorado as of the same date was estimated to be $22, 589. Employment The average annual unemployment in the Pueblo Standard Metropolitan Statistical Area ( "SMSA ") and the State of Colorado for the past nine years is as follows, according to data gathered from the Colorado Division of Employment and Training, Research and Development Section: Year Pueblo SMSA Colorado 1984* 10.2% 5.2% 1983 14.4% 7.4% 1982 16.1% 7.7% 1981 9.9% 6.3% 1980 10.3% 5.9% 1979 7.5% 4.8% 1978 8.7% 5.5% 1977 9.5% 6.2% 1976 7.4% 5.9% 1975 7.6% 6.9% *Figure is seasonally adjusted as of February 29. -26- The major employers in the Pueblo area are: Employer Employees CF &I Steel (Manufacturing) ........................... 2,400 School District No. 60 (Local Government) ............ 1,921 Colorado State Hospital (State Government) ........... 1,370 St. Mary- Corwin Hospital ............................. 1,333 Parkview Episcopal Hospital .......................... 995 Pueblo Army Depot (Federal Government) ............... 800 University of Southern Colorado (State Government) ... 604 School District No. 70 ............................... 575 Dana Corp., Perfect Circle Division (Manufacturing) .. 300 PepsiCola ............ ............................... 257 Mountain Bell ......... ............................... 200 U.S. Department of Transportation Test Center (Federal Government) ............................... 200 Broderick & Gibbons ... ............................... 193 Pueblo Community College ............................. 168 Source: Pueblo Chamber of Commerce. CF &I Steel Corporation CF &I Steel Corporation ( "CF &I ") has historically been a major employer in the area. However, the percentage of total employment represented by CF &I has declined from approximately 16% in 1970 to approximately 12% in 1980 to approximately 5% at the present time. There have been no significant reductions in CF &I's work force within the last 18 months. The population of the City has declined from approximately 101,500 in 1980 to approximately 100,117 at present, reflecting some degree of emigration which is attributable at least in part to CF &I's reduction in operations. It appears that CF &I has retained in operation the most modern portions of its overall operations, including its rail and tubing production facilities. During the period from 1971 to 1982, which includes the period of greatest employment decline at CF &I, there were indications that the economy of the area was able to adjust to the decline. City government expenditures increased between 1973 and 1982 from $11,384,353 to $25,184,550, an increase of 121 %. Sales and use tax collections increased between 1972 and 1982 from $4,991,285 to $13,027,557, an increase of 261 %. Assessed value of real estate within the City has increased from $136,560,322 in 1972 to $264,876,490 in 1982, an increase of 94 %. Estimated true value of real estate within the City has increased from $511,168,342 in 1972 to $1, 042, 756, 183 in 1982, an increase of 103 %. -27- At the present time, no one employer accounts for more than 5% of the area's employment. Sperry Corporation On March 9, 1984, representatives of Sperry Corporation ( "Sperry ") announced publicly that Sperry intends to build a computer design and development facility in the immediate vicinity of the City. The facility, expected to cost approximately $27 million to construct and equip, is to be located on a 26 -acre site in the City's proposed industrial park development adjacent to the City's airport; in addition, Sperry will take an option on an additional 22 acres adjoining the site for possible future expansion. The facilitv to be constructed is expected to be approximately 160,000 to 170,000 square feet in size and, assuming construction begins in late April or May 1984, should be completed by approximately April 1985. At full capacity, the facility is expected to employ between 750 and 1,000 persons, including design engineers, research technicians and assembly line workers, at an estimated annual payroll of approximately $20 million. Sperry has announced that it intends to bring to the facility from other facilities between 50 and 100 employees, and that it expects to hire locally the balance of employees needed to staff the facility. Representatives of Sperry have indicated that the facility will design and develop a variety of computers pursuant to contracts between Sperry and the Department of Defense. Sperry, a Delaware corporation is engaged primarily in the development, manufacturing and marketing of products in the following industry segments: computer systems and equipment; guidance and control equipment; farm equipment; and fluid power equipment. Sperry occupies 123 major facilities in the United States, 86 major facilities outside the U.S. and has 16 wholly -owned foreign subsidiaries. It is ranked 57th in Fortune 500 companies. Sperry has total revenues of approximately $5 billion and net income of approximately $118 million in 1983. Its defense - related business accounts for approximately 20% of total corporate revenues and it is one of the top fifteen suppliers of defense - related products to the United States. The City has agreed to provide certain incentives to Sperry in the establishment of the facility, among which are the sale of land owned by the City to Sperry for nominal consideration, the waiver of certain utility hook -up fees and the City's financing of various on- and off -site improvements such as landscaping, access roads, water and sewer lines, general site development and building construction. The cost to the City of such incentives is estimated to be approximately $6.15 million. The City has 23 elementary schools, 6 middle high schools and 4 senior high schools. Enrollment in School District #60 (Pueblo) for the previous five years was as follows: 1983 .................... 19,086 1982 .................... 19,155 1981 .................... 20,133 1980 .................... 20,592 1979 .................... 21,209 Also located within the City is the University of Southern Colorado and Pueblo Community College. In addition to those institutions, the City has business, technical and trade schools. Miscellaneous The following table provides certain economic and demographic data for the City compiled by the Pueblo Area Council of Governments and the Colorado Department of Revenue. Building Year Permits Retail Sales Postal Receipts 1973 $16,758,910 $ 555,949,819 2,457,902 1974 25,371,226 686,877,803 2,818,465 1975 26,043,721 771,936,922 2,788,107 1976 21,860,260 836,379,971 3,588,688 1977 42,158,496 900,374,525 3,633,349 1978 37,461,419 990,537,134 3,840,773 1979 32,667,896 1,158,737,559 4,095,031 1980 14,791,133 1,187,691,753 4,283,960 1981 21,765,381 1,320,414,827 4,919,345 1982 6,081,558 1,033,388,966 4,796,155 1983 14,378,748 707,682,955* 5,015,677 *Figure as of September 30. THE ORDINANCE The City has adopted an ordinance (the "Ordinance ") which authorizes the issuance of the Bonds for the purpose of providing the funds to defray the cost of (i) improving and extending the City's storm sewer system, and (ii) refunding the Refunded Bonds. See "USE OF PROCEEDS." The Ordinance also appoints a registrar and paying agent for the WOZ .1mMulaii Bonds, approves a form of bond, pledges the City's general ad valorem tax revenues to the payment of the Bonds, and makes certain other provisions with regard to the Bonds and the payment of the principal of, premium, if any, and interest on the Bonds. The Ordinance, which includes with it all of the terms of the Bonds, also provides that it shall be irrepealable until the principal of and interest on the Bonds shall have been fully paid, satisfied and discharged. UNDERWRITING Boettcher & Company, Inc., the Underwriter, has agreed to purchase the Bonds from the City under a Bond Purchase Agreement at an aggregate purchase price of _% of the principal amount of the Bonds, plus accrued interest. The Underwriter is committed to take and pay for all of the Bonds if any are taken. The Bonds are being offered for sale to the public at the prices shown on the cover of this Official Statement. The Bond Purchase Agreement provides that the obligations of the Underwriter are subject to certain conditions, including, among other things, that (i) there has been no material change in the condition of the City and the System from that described herein, and (ii) no event has occurred which impairs or threatens to impair the status of the interest on the Bonds as exempt from federal income taxation. RATINGS Standard & Poor's Corporation has given the Bonds ratings of "AA." Such rating reflects only the view of such organization. There is no assurance that such rating will continue for any given period of time or that it will not be revised downward or withdrawn entirely by such rating agency if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds. The City recently issued its General Obligation Water Refunding Bonds, Series 1984A and Series 1984B, in the aggregate principal amount of $24,115,000, dated as of April 15, 1984. Standard & Poor's Corporation gave such issue a rating of "AA" and Moody's Investors Service, Inc. gave such issue a rating of "A." Neither the Series 1984 Bonds nor the Series 1984 Refunding Bonds has been rated by Moody's Investors Service, Inc. -30- :- a A certificate to the effect that the Bonds are not arbitrage bonds within the meaning of Section 103(c) of the Internal Revenue Code of 1954, as amended, will be provided to the Underwriter at the time of delivery of the Bonds. PENDING LEGAL PROCEEDINGS There is not now pending or threatened, litigation of any nature seeking to restrain or enjoin, or in any manner questioning the issuance and delivery of the Bonds, the proceedings and authority under which the Bonds are issued or affecting the validity of the Bonds thereunder or the right and authority of the City to construct the storm sewer improvements or to refund the Refunded Bonds; and neither the corporate existence nor the boundaries of the City or the title of its present officers to their respective offices is being contested. TAX EXEMPTION In the opinion of Kutak Rock & Huie, Denver, Colorado, Bond Counsel, under existing laws, regulations, rulings and judicial decisions, interest on the Bonds is exempt from all present federal income taxes, and, under existing laws of the State of Colorado, interest on the Bonds is exempt from all present Colorado individual and corporate income taxes. EXPERTS The audited financial statements of the City, included as Appendix A hereto, have been examined by Becker, Herrick & Company, Inc., Pueblo, Colorado, independent public accountants, whose report thereon appears in Appendix A, and have been so included in reliance upon the report of Becker, Herrick & Company, Inc. given upon their authority as experts in accounting and auditing. APPROVAL OF LEGAL PROCEEDINGS Legal matters incident to the authorization, issuance and sale by the City of the Bonds and with regard to the tax - exempt status thereof are subject to the unqualified approving opinion of Kutak Rock & Huie, Denver, Colorado, Bond Counsel. Copies of such opinion will be available at the time of the delivery of the Bonds. Certain legal matters will be passed upon for the Underwriter by Kutak Rock & Huie, Denver, Colorado, and for the City by Thomas E. Jagger, Esq., as City Attorney. -31- i d" MISCELLANEOUS The references in this Official Statement to the Ordinance, statutes, resolutions, contracts, and other documents are brief outlines or partial excerpts of certain provisions of those documents. These outlines or excerpts do not purport to be complete, and reference is made to the documents for full and complete statements of their provisions. All estimates used in this Official Statement, including estimates of expected construction costs, are intended only as estimates and not as representations. The execution and delivery of this Official Statement by the President of the City Council of the City has been duly authorized by the City Council of the City of Pueblo, Colorado. CITY OF PUEBLO, COLORADO By /s/ MIC= G. SALAROINO President, City Council -32- APPENDIX A Audited Financial Statements of The City of Pueblo, Colorado As of and For The Year Ended December 31, 1983 A -1 B ecker, Hcrrich be Company, Inc. CERTIFIED PUBLIC ACCOUNTANTS RAYMOND J. HERRICK -C P. A RONALD J. ERJAVEC C. P.A. City Council City of Pueblo, Colorado 212 WEST 13TH" STREET P. O. BOX 7 3 4 PUEBLO, COLORADO 81002 TELEPHONE 1303 542 -8862 We have examined the combined financial statements of the City of Pueblo, Colorado as of and for the year ended December 31, 1983, as listed in the table of contents. Our examination was made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the combined financial statements referred to above present fairly the financial position of the City of Pueblo, Colorado at December 31, 1983, and the results of its operations and changes in the financial position of its proprietary fund types and pension trust funds for the year then ended in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year after giving retroactive effect to the changes, with which we concur, in the method of accounting for compensated absences n the general fund as described in Note 12 to the financial statements and the method of accounting for assessments in the special assessment funds as described in Note 18 to the financial statements. March 12, 1984 (except for Note 13, as to which the date is March 22, 1984) A -2 GENERAL PURPOSE FINANCIAL STATEMENTS A -3 COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS CITY OF PUEBLO, COLORADO December 31, 1983 GOVERNMENTAL FUND TYPES See accompanying notes to financial statements. A -4 SPECIAL CAPITAL ASSETS GENERAL REVENUE PROJECTS Cash (Note 5) $ 341,861 $ 17,442 $ Cash with fiscal agent 475,825 Investments, at cost or amortized cost (Note 5) 7,399,194 3,010,107 2,150,000 Net investment in state fire and police pension plan (Note 11) Receivables, net of allowance for uncollectibles Taxes (Note 6) 4,200,000 450,900 Accounts 116,067 196,893 Special assessments 29,159 Notes (Note 7) Accrued interest 302,703 18,082 115,576 Due from other funds (Note 16) 447,257 474,600 99,180 Due from other governments (Note 8) 3,113,464 2,090,993 Inventories, at cost 63,252 Prepaid expenses Land (Note 9) Buildings (Note 9) Improvements (Note 9) Machinery and equipment (Note 9) Accumulated depreciation (Note 9) Construction in progress (Note 9) Land held for development Investment in joint venture (Note 10) Amount to be provided for retirement of bonds and other debt TOTAL ASSETS $ 13,375,318 $ 7,281,488 $ 4,455,749 See accompanying notes to financial statements. A -4 PROPRIETARY FUND TYPES SPECIAL INTERNAL ASSESSMENT ENTERPRISE _ SERVICE $ $ 58,238 $ 192,000 3,377,270 200 $ FIDUCIARY FUND TYPES TRUST AND AGENCY 694 $ 3,331,424 18,903,718 ACCOUNT GROUPS GENERAL GENERAL TOTAL FIXED LONG -TERM (MEMORANDUM ASSETS DEBT ONLY) 371,510 $ $ 418,435 475,825 19,459,995 18,903,718 A -5 91,900 4,742,800 265,649 12,868 591,477 371,510 400,669 2,869,660 2,869,660 6,066 64,296 49,499 556,222 40,964 84,908 3,229 469,274 1,619,412 70,130 5,274,587 229,511 116,224 408,987 7,148 7,148 580,820 7,964,610 8,545,430 6,124,369 9,039,717 15,164,086 12,056,193 66,472,914 78,529,107 3,454,718 90,672 6,261,029 9,806,419 (11,421,954} ( 49,113) (11,471,067) 1,405,033 1,405,033 32,960 32,960 7 2, 327 7 2, 327 863,000 7,247,818 8,110,818 $ 610,540 $ 16,461,616 $ 161,212 26,592,037 $ 89,738,270 $ 7,247,818 $165,924,048_ A -5 . COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS (CONTINUED) CITY OF PUEBLO, COLORADO December 31, 1983 LIABILITIES AND FUND EQUITY Accounts payable Accrued compensated absences (Note 12) Accrued expenses Deposits Due to other funds (Note 16) Payroll withholdings Accrued payroll Deferred property tax revenue (Note 6) Deferred revenue Unearned contract income Unearned notes receivable (Note 7) Unearned federal and state grants (Note 8) Special assessment bonds payable (Note 15) Revenue bonds payable (Note 15) General obligation bonds payable (Note 15) Obligation under capital lease (Notes 14 and 15) TOTAL LIABILITIES 11,768 2,602,209 1,801,197 7.133.344 3.360.653 1.956.090 FUND EQUITY Conributed capital Investment in general fixed assets Retained earnings Reserved for bond retirement (Note 17) Unreserved (deficit) Fund balances Reserved for S.I.D. mill levy (Note 17) Reserved for inventories (Note 17) Reserved for encumbrances (Note 17) Reserved for employees' retire- ment (Note 11) Unreserved Designated for subsequent years' expenditures (Note 17) Undesignated (deficit) TOTAL FUND EQUITY (DEFICIT) TOTAL LIABILITIES AND FUND EQUITY See accompanying notes to financial statements. 315,823 63,252 12,989 439,268 355,836 3,917,874 4,812,271 1,562,014 1,932,036 ( 1,330,704 581,809 6,241,974 3,920,835 2,499,659 $ 13,375,318 $ 7,281,488 $ 4,455,749 GOVERNMENTAL FUND TYPES SPECIAL CAPITAL GENERAL REVENUE PROJECTS $ 219,499 $ 201,309 $ 50,305 150,000 179,008 1,172,155 94,467 104,588 446,602 766,080 4,200,000 450,900 11,768 2,602,209 1,801,197 7.133.344 3.360.653 1.956.090 FUND EQUITY Conributed capital Investment in general fixed assets Retained earnings Reserved for bond retirement (Note 17) Unreserved (deficit) Fund balances Reserved for S.I.D. mill levy (Note 17) Reserved for inventories (Note 17) Reserved for encumbrances (Note 17) Reserved for employees' retire- ment (Note 11) Unreserved Designated for subsequent years' expenditures (Note 17) Undesignated (deficit) TOTAL FUND EQUITY (DEFICIT) TOTAL LIABILITIES AND FUND EQUITY See accompanying notes to financial statements. 315,823 63,252 12,989 439,268 355,836 3,917,874 4,812,271 1,562,014 1,932,036 ( 1,330,704 581,809 6,241,974 3,920,835 2,499,659 $ 13,375,318 $ 7,281,488 $ 4,455,749 PROPRIETARY FUND TYPES SPECIAL INTERNAL ASSESSMENT ENTERPRISE SERVICE $ $ 139,287 $ 50,834 $ 137,520 25,989 12,583 29,258 51,991 57,520 293,998 312,862 3,655,000 FIDUCIARY FUND TYPES TRUST AND AGENCY _ 1,929 $ 236,229 109,433 91,900 2,869,674 50,000 813,000 636,118 3,996,381 134,343 4,172,165 13,687,776 25,337 ACCOUNT GROUPS GENERAL GENERAL TOTAL FIXED LONG -TERM (MEMORANDUM ASSETS DEBT ONLY) 89,738,270 600 18,903,718 $ $ 663,163 1,896,280 2,209,789 191,591 236,229 1,619,412 446,602 766,080 4,742,800 29 3, 998 11,768 2,869,674 4,403,406 312,862 3,705,000 5,305,000 6,118,000 46,538 46,538 7,247,818 28,636,912 13,713,113 89,738,270 630,660 ( 1,851,669) 315,823 63,252 808,693 18,903,718 10,292,159 ( 25,578 3,515,554 4,673,117 ( 25,578 12,465,235 26,869 22,419,872 89,738,270 137,287,136 $ 610,540 $ 16,461,616 S 16 1, 212 $ 26,592,037 $ 89,738,270 $ 7,247,818 $165,924,048 A -7 630,660 ( 1,853,201) 1,532 l,Vi`"lUliVC.0 J1A1r.;1C.1V1 VC itC.VLrJULJ, L2Ir'✓iNU11UKt.b AM) Vt1A1Nl,LJ 1[N rU1\U bALA:NUtb ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUNDS CITY OF PUEBLO, COLORADO Year Ended December 31, 1983 Revenues Taxes State and federal grants Licenses and permits Revenue from other agencies Charges for services Fines and forfeits Interest income Matching revenue Project income Assessments Miscellaneous Total revenues Expenditures Current General government Public safety Parks and recreation Transportation Public works Programs and projects Insurance and contingencies Matching expenditures Intergovernmental Capital outlay Non - capital expenditures Debt service Principal retirement Interest and fiscal charges Other services and charges Total expenditures Excess (deficiency) of revenues over expenditures GOVERNMENTAL FUND TYPES SPECIAL GENERAL REVENUE DEBT CAPITAL SERVICE PROJECTS 1,659,063 $ 20,110,274 $ 459,630 $ 5,325,476 97,577 611,395 848,056 163,331 307,493 1,183,203 107,983 501,975 596,291 361,461 18,848 22,834,734 7,858,259 690 290,741 _ 13,301 690 1,963,105 2,155,024 11,556,718 2,155,722 3,613,894) 1,968,771 ( 368,451) 1,865,395 3,394,823 9,855,868 2,751,802 3,324,218 Capital contributions (Note 19) 2,710,872 ( 799,738 ( 456,108 558,432 December 31 $ 386,312 $ 3,920,835 $ $ 2,499,659 1,441,157 statements. 503,567 3,182,011 2,205,900 706,839 25,402 310,000 9,701 298,776 15,734 489 23,630,838 7,036,871 608,776 2,206,389 ( 796,104) 821,388 ( 608,086) ( 243,284) Other financing sources (uses) Proceeds from sale of property Gain on sale of securities Operating transfers in 4,483,373 5,460,846 608,086 374,833 Operating transfers out ( 7,301,163 ( 4,313,463 ( 500,000 Total other financing sources (uses) ( 2,817,790 1,147,383 608,086 ( 125,167 EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES OVER EXPENDI- TURES AND OTHER USES ( 3,613,894) 1,968,771 ( 368,451) Fund balances (deficit), January 1 (Notes 12, 18 and 20) 9,855,868 2,751,802 3,324,218 Capital contributions (Note 19) ( 799,738 ( 456,108 Fund balances (deficit), December 31 $ 6,241,974 $ 3,920,835 $ $ 2,499,659 See accompanying notes to financial statements. A -8 SPECIAL ASSESSMENTS 23,554 95,542 35,023 154,119 FIDUCIARY FUND TYPES EXPENDABLE TRUST $ 100,886 545,219 26 2, 567 159,344 1,068,016 376,024 13,145 49,439 6,408 55,847 98,272 61,824 ( 61,824 53,000 54,319 496,488 571,528 150,000 42,448 575,777 ( 753,930) 14,295 98,272 ( 123,850) 585,823 2,930,331 $ (-25,578 S 3,516 154 TOTAL (MEMORANDUM ONLY) $ 20,670,790 7,529,758 97,577 1,459,451 163,331 307,493 1,868,738 501,975 596,291 95,542 587,977 33,878,923 2,155,024 11,556,718 2,155,722 1,865,395 3,394,823 3,086,896 558,432 386,312 1,441,157 5,904,623 706,839 388,402 412,235 22,631 34,035,209 ( 156,286) 150,000 42,448 11,564,739 (12,930,380 ( 1,173,193 ( 1,329,479) 18,738,369 ( 1,255,846 $ 16,153 044 A -9 COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET (GAAP BASIS) AND ACTUAL GENERAL, SPECIAL REVENUE AND DEBT SERVICE FUNDS CITY OF PUEBLO, COLORADO Year Ended December 31, 1983 ievenues Taxes state and federal grants Licenses and permits Revenues from other agencies Charges for services Fines and forfeits Interest income Miscellaneous Total revenues Expenditures Current General government Public safety Parks and recreation Transportation Public works Programs and projects Insurance and contingencies Intergovernmental Capital outlay Non - capital expenditures Principal retirement Interest and fiscal charges Total expenditures 399,000 391,949 716,043 GENERAL FUND SPECIAL REVENUE FUNDS 1,551,968 VARIANCE 110,811 501,022 FAVORABLE 2,545) 4,352,276 BUDGET ACTUAL (UNFAVORABLE) BUDGET ACTUAL 726,136 $19,808,301 $20,110,274 $ 301,973 $ 458,899 $ 459,630 4,734,972 4,120,217 71,500 97,577 26,077 5,806,972 4,335,199 620,794 611,395 ( 9,399) 472,000 843,056 128,725 163,331 34,606 520,000 307,493 ( 212,507) 850,000 1,183,203 333,203 9,000 105,730 104,850 361,461 256,611 62,205 22,104,170 22,834,734 730,574 5,674,871 5,590,838 2,252,423 2,155,024 97,399 11,930,677 11,556,718 373,959 2,164,754 2,155,722 9,032 1,874,568 1,865,395 9,173 3,388,801 3,394,823 ( 6,022) 399,000 391,949 716,043 558,432 157,611 1,551,968 1,441,157 110,811 501,022 503,567 ( 2,545) 4,352,276 3,182,011 1,029,369 726,136 18,955 25,402 7,372 9,701 24,380,256 23,630,838 749,418 5,806,972 4,335,199 Excess (deficiency) of revenues over expenditures (2,276,086) ( 796,104) Other financing sources (uses) Operating transfers in 4,483,373 4,483,373 Operating transfers out (7,412,059 (7,301,163 Total other financing sources (uses) (2,928,686 (2,817,790 EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES OVER EXPEN- ITURES AND OTHER USES (5,204,772) (3,613,894) Fund balances (deficit), Jan- uary 1 (Notes 12 and 23) Capital contributions (Note 19) Fund balance (deficit) Dec- ember 31 (Note 3) 9,855,868 1,479,982 ( 132,101) 1,255,639 5,141,346 5,141,346 110,896 (4,582,603 (4,313,463 110,896 558,743 827,883 1,590,878 426,642 2,083,522 9,855,868 2,625,203 (1,308,644 ( 799,738 $(5,204,772)$ 6,241,974 $ 11,446,746 $( 882,002) 8 3,908,987 See accompanying notes to financial statements. A -10 DEBT SERVICE FUNDS VARIANCE VARIANCE FAVORABLE FAVORABLE UNFAVORABLE) BUDGET ACTUAL (UNFAVORABLE $ 731 $ $ ( 614,755) 371,056 96,730 62,205 ( 84,033 7,051 1,170,265 303,233 ( 6,447) 310,000 310,000 ( 2,329 300,478 298,776 1,471,773 610,478 608,776 1,387,740 ( 610,478) ( 608,086) TOTAL ('fEMORANDUM ONLY) VARIANCE FAVORABLE BUDGET ACTUAL (UNFAVORABLE) $ $20,267,200 $20,569,904 $ 302,704 4,734,972 4,120,217 ( 614,755) 71,500 97,577 26,077 1,092,794 1,454,451 361,657 128,725 163,331 34,606 520,000 307,493 ( 212,507) 690 859,000 1,289,623 430,623 104,850 423,666 318,816 690 27,779,041 28,426,262 647,221 2,252,423 2,155 024 97,399 11,930,67- 11,5- -,,718 373,959 2,164,754 2,155,722 9,032 1,874,568 1,865,395 9,173 3,388,801 3,394,823 ( 6,022) 399,000 391,949 7,051 716,043 558,432 157,611 1,551,968 1,441,157 110,811 4,853,298 3,685,578 1,167,720 1,029,369 726,136 303,233 328,955 335,402 ( 6,447) 1,702 307,850 308,477 ( 627 1,702 30,797,706 28,574,813 2,222,893 2,392 (3,018,665) ( 148,551) 2,870,114 610,478 608,086 ( 2,392) 10,235,197 10,232,805 ( 2,392) 269,140 (11,994,662 380,036 269,140 610,478 608,086 ( 2,392 (1,759,465 1,381,821 377,644 1,656,880 2,625, 203 508,906 ( 4,778,130)( 1,530,372) 3,247,758 12,481,071 12,481,071 ( 1,308,644 799,738 50 $ 4,790,989 $ $ $(6,086,774 S 16,237,735 A -11 COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS /FUND BALANCES ALL PROPRIETARY FUND TYPES AND SIMILAR TRUST FUNDS CITY OF PUEBLO, COLORADO Year Ended December 31, 1983 PROPRIETARY FUND TYPES INTERNAL ENTERPRISE SE RVICE Operating revenues Charges for services $ 4,225,560 $ 1,385,150 Investment income Realized and unrealized gains (losses) from security transactions Pension contributions Total operating revenues 4,225,560 1 ,385,150 Operating expenses Pension payments and member refunds Salaries 2,127,016 373,069 Compensated absences 16,515 ( 5,607) Contract fees and salaries 253,379 Pension 171,374 37,737 Taxes 44,159 Merchandise and supplies 238,077 896,221 Advertising 16,806 Insurance 122,226 9,387 Fringe benefits 231,351 50,716 Management fees 31,834 Supplies 256,433 12,704 Professional services 356,411 Repairs and maintenance 358,728 6,590 Depreciation 484,332 8,142 Utilities and communications 437,368 23,499 Other services and charges 96,517 1,116 Total operating expenses 5,242,526 1,413,574 Operating income (loss) (1,016,966) ( 28,424) Nonoperating revenues (expenses) Contribution of transition asset pool assets, net of cost basis of assets contributed of $606,935 Conversion of transition asset pool asset and income to FPPA market value Transfer to new hire fund Operating grants 410,809 Equity in income (loss) of joint venture ( 2,266) Interest income 327,228 Interest and fiscal charges ( 411,579) Miscellaneous 8,961 Income (loss) before operating transfers ( 683,813) ( 28,424) Operating transfers Operating transfers in 1,343,150 NET INCOME (LOSS) 659,337 ( 28,424) Retained earnings /fund balances (deficit), January 1 (Note 1 (1,881,878 29,956 Retained earnings /fund balances (deficit), December 31 $(1,222,541 $ 1,532 See accompanying notes to financial statements. A -12 FIDUCIARY FUND TYPES PENSION TRUSTS 1,271,929 148,378 2,525,381 3,945,688 1,785,215 1,785,215 2,160,473 135,727 437,698 ( 18,109) 2,715,789 2,715,789 16,187,929 S 18,903 718 TOTAL ( MEMORANDUM ONLY) $ 5,610,710 1,271,929 148,378 2,525,381 9,556,398 1,785,215 2,500,085 10,908 253,379 209,111 44,159 1,134,298 16,806 131,613 282,067 31,834 269,137 356,441 365,318 492,474 460,867 97,633 8,441,315 1,115,083 135,727 437,698 ( 18,109) 410,809 ( 2,266) 327,228 ( 411,579) 8,961 2,003,552 1,343,150 3,346,702 14,336,007 $17,682,709 A -13 CO ",BIKED STATE:,ENT OF CHjkNGES IN FIi;AI'CIAL POSITION ALL PROPRIETARY FUND TYPES AND SIMILAR TRUST FUNDS CITY OF PUEBLO, COLORADO Year Ended December 31, 1983 FIDUCIARY PROPRIETARY FU ND TYPES FUND TYPES FINANCIAL RESOURCES PROVIDED Net income (loss) $ 659,337 Items not requiring working capital: Investment in joint venture 466 Depreciation _ 484,332 Working capital provided (used) by operations 1,144,135 Contributions 1,870,203 Decrease in working capital TOTAL FINANCIAL RESOURCES PROVIDED FINANCIAL RESOURCES APPLIED Acquisition of property and equipment Construction in progress Reduction of revenue bonds payable Increase in net investment in state fire and police pension plan Increase in working capital TOTAL FINANCIAL RESOURCES APPLIED ELEMENT OF INCREASE (DECREASE) IN WORKING CAPITAL Cash Investments Receivables, net Due from general fund Due from other governments Inventories Prepaid expenses Accounts payable Accrued compensated absences Accrued expenses Due to general fund Deferred income Revenue bonds payable INCREASE (DECREASE) IN WORKING $3,014,338 $ 12,146 $ 2,715,789 $ 5,742,273 $1,073,520 1,405,033 :1 111 $ 12,146 $ $ 1,085,666 1,405,033 80,000 2,715,789 455,785 2,715,789 455,785 $3,014,338 $ 12,146 $ 2,715,789 $ 5,742,273 $ 20,103 608,775 ( 135,264) ( 38,829) 9,275 39,435 ( 4,413) ( 20,406) ( 16,515) ( 1,742) ( 26,560) 16,926 5,000 $ 75 $ ( 2,488) (57,005) (42,341) 5,607 63,724 $ 20,178 TOTAL INTERNAL PENSION (MEMORANDUM SERVICE TRUSTS ONLY) $(28,424) $ 2,715,789 $ 3,346,702 ( 4,413) 466 8,142 ( 492,474 (20,282) 2,715,789 3,839,642 37,164 1,870,203 32,428 5,000 32,428 FINANCIAL RESOURCES PROVIDED Net income (loss) $ 659,337 Items not requiring working capital: Investment in joint venture 466 Depreciation _ 484,332 Working capital provided (used) by operations 1,144,135 Contributions 1,870,203 Decrease in working capital TOTAL FINANCIAL RESOURCES PROVIDED FINANCIAL RESOURCES APPLIED Acquisition of property and equipment Construction in progress Reduction of revenue bonds payable Increase in net investment in state fire and police pension plan Increase in working capital TOTAL FINANCIAL RESOURCES APPLIED ELEMENT OF INCREASE (DECREASE) IN WORKING CAPITAL Cash Investments Receivables, net Due from general fund Due from other governments Inventories Prepaid expenses Accounts payable Accrued compensated absences Accrued expenses Due to general fund Deferred income Revenue bonds payable INCREASE (DECREASE) IN WORKING $3,014,338 $ 12,146 $ 2,715,789 $ 5,742,273 $1,073,520 1,405,033 :1 111 $ 12,146 $ $ 1,085,666 1,405,033 80,000 2,715,789 455,785 2,715,789 455,785 $3,014,338 $ 12,146 $ 2,715,789 $ 5,742,273 $ 20,103 608,775 ( 135,264) ( 38,829) 9,275 39,435 ( 4,413) ( 20,406) ( 16,515) ( 1,742) ( 26,560) 16,926 5,000 $ 75 $ ( 2,488) (57,005) (42,341) 5,607 63,724 $ 20,178 608,775 ( 135,264) ( 41,317) 9,275 ( 17,570) ( 4,413) ( 62,747) ( 10,908) ( 1,742) 37,164 16,926 5,000 CAPITAL $ 455,785 $(32,428 $ See accompanying notes to financial statements. 423.357 A -14 NOTES TO FINANCIAL STATEMENTS CITY OF PUEBLO, COLORADO December 31, 1983 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The City of Pueblo, Colorado was incorporated in 1885 as a home rule city under the Constitution of the State of Colorado. The City operates under a council- manager form of government and provides the following services as authorized by its charter: public safety (police and fire), highways and streets, sanitation, social services, culture - recreation, public improvements, planning and zoning, and general administrative services. The accounting policies of the City of Pueblo, Colorado conform to generally accepted accounting principles as applicable to governments. The following is a summary of the.more significant policies: A. REPORTING ENTITY - For financial reporting purposes, in conformance with NCGA Statement No. 3, "Defining the Governmental Reporting Entity," the City of Pueblo, Colorado includes all funds, account groups, agencies, boards, commissions and authorities that are controlled by or dependent on the City. Control by or dependence on the City was determined on the basis of taxing authority, receipt of significant subsidies and responsibility for resources. Based on the foregoing criteria, the following organizations are included in the City's annual report: Pueblo Area Council of Governments - The City provides approximately 75% of the revenue to the Pueblo Area Council of Governments ( PACOG). A majority of the governing body of PACOG is composed of members of City Council. Regional Planning Commission - The Regional Planning Commission is an agency of PACOG and the majority of its revenue is provided by operating transfers from PACOG. Human Resources C ommission - The Human Resources Commission is an agency of PACOG operating transfer and the majority of its revenue is provided by s from PACOG. Pueblo Urban Transportation - The Pueblo Urban Transportation is an agency of PACOG and revenue is provided in part from operating transfers from PACOG. Area Aging Agency - The Area Aging Agency is also an agency of the Pueblo Area Council of Governments. Downtown Improvement District - The governing body of the Downtown Improvement District is composed entirely of members of the city council. Revenue is provided by an annual tax levy set by the governing body. Pueblo Head Start - Pueblo Head Start is a separate, non - profit entity organized to implement certain federal programs. The City is the grantee for the corporation in receiving federal funds and thus, bears ultimate responsibility for the disposition of those resources. The City also appoints members to the corporation's governing body. A -15 Note 1. Continued Pueblo Regional Building Department - As further discussed in note 9, the Pueblo Regional Building Department is a joint venture between the City of Pueblo, Colorado and the County of Pueblo, Colorado for the purpose of enforcing building codes and licensing contractors. The governing body of the Regional Building Department is composed of seven members, three of which are appointed by the City, three are appointed by the County and one member is jointly appointed. Pueblo City - County Health Department - The Pueblo City- County Health Department is also a joint venture between the City of Pueblo, Colorado and the County of Pueblo, Colorado created in 1952 for the purpose of providing public health care services to the residents of the city and county. Approximately 50% of the departments' revenues are composed of subsidies from the City of Pueblo, Colorado and the County of Pueblo, Colorado with another 25% coming from the State of Colorado in the form of a subsidy. The balance of the departments' revenues are derived from grants and user charges. The governing body of the department is composed of five members, of which two are appointed by the City of Pueblo, two are appointed by the County of Pueblo and one member is jointly appointed. The Pueblo Area Council of Governments and its agencies are reported in the accompanying financial statements with the special revenue funds while the Downtown Improvement District is reported with the fiduciary funds as an expendable trust fund. The investment in the Pueblo Regional Building Department joint venture is reported with the enterprise funds using the equity method of accounting while the investment in the City- County Health Department joint venture is a governmental -type fund joint venture and thus, the investment is not reported in the accompanying financial statements. The following organizations are not part of the City of Pueblo, Colorado and thus are excluded from the accompanying financial statements: Pueblo Board of Water Works - The governing body of the Pueblo Board of Water Works, which provides water service to the residents of the city and county, is elected by the citizens of the city. The Board's operating and capital expenditures, including debt service, are financed entirely from charges for water service. The City has no involvement in the determination of the Board's budget or water rates. Pursuant to the City Charter, the entire control, management, and operation is vested in the Board of Water Works. City Council is required to adopt all ordinances requested by the Board which are reasonably necessary to assist the Board in management of the system and its property or to enable the Board to purchase or condemn additional water rights or property of any kind to supply water to the city. Additionally, title to the properties of the water works system is held in the name of the City of Pueblo, Colorado and all general obligation water bonds are legally valid general obligation bonds upon the City. The general obligation water bonds are also secured by a pledge of the net revenues derived from the water works system operated by the Board of Water Works. Even though title to the A -16 Note 1. Continued properties operated by the Board of Water Works is in the City's name and the general obligation water bonds are legally valid obligations of the City, the entire control, management, and operation of the municipal water works system is vested in the Board of Water Works. Financial transactions between the City and the Board of Water Works, reported in the accompanying financial statements, reflect contractual agreements between the parties for the provision of specific services. Pueblo Housing Authority - The Authority's operating and capital expenditures are financed entirely from federal grants and rentals. The City has no involvement in the determination of the Authority's budget and rental rates or any obligation for the Authority's outstanding debt. B. FUND ACCOUNTING - The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self- balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures, or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped, in the accompanying financial statements, into eight generic fund types and three broad fund categories as follows: GOVERNMENTAL FUNDS GENERAL FUND - The general fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. SPECIAL REVENUE FUNDS - Special revenue funds are used to account for the proceeds of specific revenue sources, other than special assessment, expendable trusts, or major capital projects. The special revenue funds consist principally of the capital improvement fund, federal revenue sharing fund, community development fund, and highway users fund. The expenditures of these funds are legally restricted for specified purposes as mandated by the City Charter for the capital improvement fund, by federal rules and regulations for the revenue sharing fund and community development fund, and state guidelines for the highway users fund. The remaining special revenue funds consist of the Pueblo Area Council of Governments ( PACOG) and its agencies and other federally- funded projects. Expenditures and transfers by PACOG and its agencies are restricted to amounts approved by PACOG's governing board and, in the case of federally- funded projects, which includes PACOG's agencies, expenditures are restricted based upon criteria established by the applicable federal agency. DEBT SERVICE FUNDS - Debt service funds are used to account for the accumulation of resources for, and payment of, general long -term debt principal, interest, and related costs. A -17 Note 1. Continued CAPITAL PROJECTS FUNDS - Capital projects funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities, other than those financed by proprietary funds, special assessment funds, and fiduciary funds. SPECIAL ASSESSMENT FUNDS - Special assessment funds are used to account for the financing of public improvements or services deemed to benefit the properties against which special assessments are levied. PROPRIETARY FUNDS ENTERPRISE FUNDS - Enterprise funds are used to account for operations (a) that are financed and operated in a manner similar to private enterprises - where the intent of the governing body is that the costs, including depreciation, of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. INTERNAL SERVICE FUNDS - Internal service funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the City, on a cost - reimbursement basis. FIDUCIARY FUNDS TRUST AND AGENCY FUNDS - Trust and agency funds are used to account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governments, and /or other funds. These include expandable trust, pension trust and agency funds. Pension trusts are accounted for in essentially the same manner as proprietary funds since capital maintenance is critical. Expendable trusts are accounted for in essentially the same manner as governmental funds. Agency funds are custodial in nature (assets equals liabilities) and do not involve measurement of results of operations. C. FIXED ASSETS AND LONG -TERM LIABILITIES - The accounting and reporting treatment applied to the fixed assets and long -term liabilities associated with a fund are determined by its measurement focus. All governmental funds and expendable trust funds are accounted for on a spending or "financial flow" measurement focus. This means that only current assets and current liabilities are generally included in their balance sheets. Their reported fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of "available spendable resources" during a period. FEW Note 1. Continued Fixed assets used in governmental fund type operations (general fixed assets) are accounted for in the General Fixed Assets Account Group, rather than in governmental funds. Public domain ( "infrastructure ") general fixed assets consisting of certain improvements other than buildings, including roads, bridges, curbs and gutters, streets and sidewalks, drainage systems, and lighting systems, are capitalized along with other general fixed assets. No depreciation has been provided on general fixed assets. All fixed assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Donated fixed assets are valued at their estimated fair value on the date donated. Long -term liabilities expected to be financed from governmental funds are accounted for in the General Long -Term Debt Account Group, not in the governmental funds. The one exception to this general rule is for special assessment bonds, which are accounted for in special assessment funds. The two account groups are not "funds." They are concerned only with the measurement of financial position. They are not involved with measurement of results of operations. Special reporting treatments are applied to governmental fund inventories to indicate they do not represent "available spendable resources," even though they are a component of net current assets. Such amounts are offset by fund balance reserve accounts. Because of their spending measurement focus, expenditure recognition for governmental fund types is limited to exclude amounts represented by noncurrent liabilities. Since they do not affect net current assets, such long -term amounts are not recognized as governmental fund type expenditures or fund liabilities. They are instead reported as liabilities in the General Long -Term Debt Account Group. All proprietary funds are accounted for on a cost of services or "capital maintenance" measurement focus. This means that all assets and liabilities, whether current or noncurrent, associated with their activity are included on their balance sheets. Their reported fund equity (net total assets) is segregated into contributed capital and retained earnings components. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in net total assets. Depreciation on all exhaustible fixed assets used by proprietary funds is charged as an expense against their operations. Accumulated depreciation is reported on proprietary fund balance sheets. Depreciation has been provided over the estimated useful lives using the straight -line method. The estimated useful lives are as follows: Buildings and improvements 50 Machinery and equipment 10 A -19 Note 1. Continued D. BASIS OF ACCOUNTING - Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. All governmental funds and expendable trust funds are accounted for using the modified accrual basis of accounting. Their revenues are recognized when they become measureable and available as net current assets. The major sources of revenue which are susceptible to accrual are property taxes, interest income and grants from federal and state governments. Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. Exceptions to this general rule include principal and interest on general long -term debt which is recognized when due. All proprietary funds and pension trust funds are accounted for using the accrual basis of accounting. Their revenues are recognized when they are earned, and their expenses are recognized when they are incurred. Since the City does not operate any utility services, no unbilled utility services are recorded. Sewer user fees, which are collected for the City by the Board of Water Works, which operates the water system, are recorded when earned. E. BUDGET PRESENTATIONS AND ENCUMBRANCES - GAAP basis budgetary comparisons are included for the general fund, certain special revenue funds and debt service funds which are the governmental fund types for which an annual budget has been adopted. The budget presentation for the special revenue funds includes only the following funds: capital improvement, federal revenue sharing, community development, highway users and Pueblo Area Council of Governments (PACOG). The remaining special revenue funds generally consist of federally- funded projects for which annual appropriations are not made by City Council but are governed by project budgets established by the appropriate funding agency. Expenditure estimates in the annual budgets are enacted into law through the passage of an appropriation ordinance, or resolution in the case of PACOG. City Council may amend the original adopted budget during the year by passing a new ordinance to reflect current needs and during 1983, the expenditure estimates were amended. These amendments were made in accordance with the City Charter. For each legally adopted annual operating budget, budgetary control exists at the total fund level. That is to say, total expenditures; other financing uses and capital contributions for each fund cannot legally exceed total appropriations for that fund. Encumbrance accounting, under which purchase orders, contracts, and other committments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of the formal budgetary integration in the general A -20 Note 1. Continued fund, special revenue funds, capital projects funds, and special assessment funds. Encumbrances outstanding at year end are reported as reservations of fund balances since they do not constitute expenditures or liabilities. In addition, appropriations, including encumbered appropriations, lapse at year end.. F. INVESTMENTS - Investments are stated at cost or amortized cost, which approximates market. G. INVENTORIES - Inventory is valued at the lower of first -in, first -out cost or market. Inventory in the general fund consists principally of expendable supplies held for consumption. The cost is recorded as an expenditure at the time individual inventory items are purchased. Reported inventories are equally offset by a fund balance reserve which indicates that they do not constitue "available spendable resources" even though they are a component of net current assets. H. REVENUES, EXPENDITURES AND EXPENSES - Property taxes for the current year that are collected in the subsequent year are accrued as a receivable with an offsetting credit to deferred revenues in as much as while they are measurable, they are not available to finance current operations. Revenue from state and federal grants is recognized as grant costs are incurred. The City affords all full -time employees vacation and sick pay benefits. The amount of accrued vacation and sick pay outstanding at year end is based on current salary, costs and is determined on a terminated basis in accordance with present City policies. The total amount of accrued vacation and sick pay benefits for proprietary fund employees has been accrued as a liability in the affected fund while the remaining liability has been recognized in the general long -term debt account group, except for $150,000 which has been accrued as a liability in the general fund in accordance with NCGA Statement 4. I. TOTAL COLUMNS ON COMBINED STATEMENTS - OVERVIEW - Total columns on the combined statements - overview are captioned memorandum only to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or changes in financial position in conformity with generally accepted accounting principles. Neither is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Note 2. EXCESS OF BUDGETED EXPENDITURES AND OTHER FINANCING USES OVER ACTUAL EXPENDITURES AND OTHER FINANCING USES - The following individual funds incurred actual expenditures and other financing uses in excess of budgeted expenditures and other financing uses: A -21 Note 2. Continued While the City accounts for enterprise funds on the accrual basis, budgets are prepared on the modified accrual basis. The actual expenditures and other financing sources presented above are reported on the modified accrual basis which is the same accounting basis used in preparation of the budgets. Note 3. BUDGETED DEFICIT FUND BALANCES - The following is a summary of the individual funds that had budgeted deficit fund balances at December 31, 1983: General Fund $ 5,204,772 SPECIAL REVENUE FUNDS Capital Improvement $ 410,039 Federal Revenue Sharing 96,963 Highway Users 360,000 Council of Governments 15,000 882 002 The above deficits represent the excess of budgeted expenditures and other financing uses over anticipated revenues and other financing sources for 1983. These deficits have been financed from fund balance accumulations. Note 4. DEFICIT FUND /RETAINED EARNINGS BALANCES - The following is a summary of the individual funds which had deficit fund /retained earnings balances at December 31, 1983: SPECIAL REVENUE FUNDS Head Start ACTUAL EXPENDITURES AND BUDGETED EXPENDITURES AND ACTUAL OVER ENTERPRISE FUNDS OTHER FINANCING USES OTHER FINANCING USES BUDGET SPECIAL ASSESSMENT FUNDS 74 -3 Golf Course $ 339,767 $ 330,225 $ 9,542 Sewer User 2,548,842 2,520,062 28,780 Mountain View 75 -7 831 76 -4 Cemetary 214,003 208,910 5,093 While the City accounts for enterprise funds on the accrual basis, budgets are prepared on the modified accrual basis. The actual expenditures and other financing sources presented above are reported on the modified accrual basis which is the same accounting basis used in preparation of the budgets. Note 3. BUDGETED DEFICIT FUND BALANCES - The following is a summary of the individual funds that had budgeted deficit fund balances at December 31, 1983: General Fund $ 5,204,772 SPECIAL REVENUE FUNDS Capital Improvement $ 410,039 Federal Revenue Sharing 96,963 Highway Users 360,000 Council of Governments 15,000 882 002 The above deficits represent the excess of budgeted expenditures and other financing uses over anticipated revenues and other financing sources for 1983. These deficits have been financed from fund balance accumulations. Note 4. DEFICIT FUND /RETAINED EARNINGS BALANCES - The following is a summary of the individual funds which had deficit fund /retained earnings balances at December 31, 1983: SPECIAL REVENUE FUNDS Head Start $ 53,336 CAPITAL PROJECTS FUNDS Airport Development 48,239 Reeler Parkway Extension 14,322 SPECIAL ASSESSMENT FUNDS 74 -3 847 75 -1 11,720 75 -2 11,477 75 -5 5,624 75 -6 1,635 75 -7 831 76 -4 13,818 76 -7 519 77 -2 126 77 -4 792 78 -3 2,347 78 -4 866 A -22 Note 4. Continued 79 -3 896 79 -9 2,837 79 -10 9,329 79 -11 27,372 79 -12 11,178 80 -1 18,375 80 -2 3,667 80 -3 17,233 80 -6 4,535 80 -8 5,031 80 -10 30,490 81 -1 10,865 81 -2 22,159 81 -3 3,184 82 -1 13,489 83 -2 84 ENTERPRISE FUNDS Memorial Airport 18,332 Ice Arena 167,010 Public Transportation 1,223,451 Sewer User 150,533 INTERNAL SERVICE FUNDS City Shops 11,641 TRUST AND AGENCY FUNDS Restoration of Carousel 5,011 It is anticipated that the deficit in the head start fund will be financed by federal grant revenue. The deficits in the capital projects fund will be financed by federal grant revenues and operating transfers from the general fund. The deficits in the special assessment funds will be financed by the subsequent collection of assessments that have been recorded as deferred revenue and operating transfers from other funds. The deficits in the ice arena and public transportation enterprise funds will be financed by operating transfers from the general fund as well as subsidies from the federal government for the public transportation fund while the deficit in the sewer user enterprise fund will be financed by operating revenues. The deficit in the memorial airport enterprise fund will be financed by operating revenues and operating transfers from the general fund. It is anticipated that the deficit in the city shops internal service fund will be financed from operating revenues. Note 5. CASH AND INVESTMENTS - Cash and investments in the general fund are restricted in the amount of $ 1,172,155 which are due to other funds. Note 6. PROPERTY TAXES - Property taxes are collected by the Pueblo County Treasurer and are remitted monthly to the City. The 1983 property taxes were levied on November 1, 1983, and the lien date was January 2, 1984. The accrued property taxes consist of the 1983 taxes which are collectible in 1984 as follows: General fund Special revenue funds Fiduciary funds $ 4,200,000 450,900 91,900 $ 4,742,800 A -23 Note 7. NOTES RECEIVABLE - Notes receivable of $2,869,660 at December 31, 1983 represent loans made under a housing rehabilitation program. These loans are only partially repayable based on the participant's income level and other criteria. However, if the property is sold or the participant is no longer living in the rehabilitated residence, the total loan becomes due. The total note is recorded as a receivable and is offset by unearned notes receivable. Note 8. DUE FROM OTHER GOVERNMENTS - Federal and state grants are recorded as a receivable at the time the grant is awarded. Revenue is recognized as grant costs are incurred. The unearned federal and state grants represent that portion of the related receivable that has not been recognized as revenue as of December 31, 1983. This portion will be recognized as revenue as grant costs are incurred in future periods. Note 9. CHANGES IN GENERAL FIXED ASSETS - The following is a summary of changes in general fixed assets for the year ended December 31, 1983: A summary of proprietary fund fixed assets at December 31, 1983 is as follows: BALANCE ENTERPRISE FUNDS BALANCE JANUARY 1, 1983 ADDITIONS DELETIONS DECEMBER 31, 1983 Land $ 6,634,994 $ 1,362,576 $ 32,960 $ 7,964,610 Buildings 9,321,811 116,346 398,440 9,039,717 Improvements 63,390,689 3,613,180 530,955 66,472,914 Machinery and Improvements 583,051 11,341,607 31,713 equipment 6,097,429 1,354,191 1,190,591 6,261,029 $ 85,444,923 $ 6,446,293 $ 2,152,946 S 89,738,270 A summary of proprietary fund fixed assets at December 31, 1983 is as follows: A -24 ENTERPRISE FUNDS GOLF MEMORIAL ICE PUBLIC COURSE AIRPORT ARENA TRANSPORTATION Land $ 5,878 $ 49,409 $ 111,696 $ 280,037 Buildings 222,230 2,668,309 1,173,711 1,525,827 Improvements 583,051 11,341,607 31,713 99,822 Machinery and equipment 185,251 543,944 87,357 2,055,635 Total 996,410 14,603,269 1,404,477 3,970,121 Accumulated depreciation (531,521 ( 9,374,735 ( 232,326 ( 1,009,251 Net $ 464,889 $ 5,228,534 $ 1,172,151 $ 2,960,870 Construction in progress S $ 927,861 S 2,059 Depreciation expense for year 1 2 _, 7 2 x_147,585 S 33,363 $ 225,484 A -24 Note 9• Continued REGIONAL BUILDING DEPARTMENT The Pueblo Regional Building Department was created by the governments of the City of Pueblo, Colorado and the County of Pueblo, Colorado to promote the public health, safety and welfare through the enforcement of building codes and licensing of contractors. The governing body of the Department consists of seven members, three of which are appointed by the City, three are appointed by the County and one member is jointly appointed. The governing body of the Department has authority for the appointment of management. The joint venture agreement requires that the annual operating budget of the department be submitted to the City and County for approval prior to adoption. The agreement also stipulates that the Department provide an accounting of actual revenues and expenses to the City and County on a monthly basis. In addition, the fees charged for the issuance of permits and licenses are subject to the approval of the City and County. To the extent feasible, expenses of the Department are allocated to the participants based on the proportion of the value of construction work performed within the participant's jurisdiction compared A -25 ENTERPRISE FUNDS SEWER SWIMMING USER POOLS CEMETARY TOTAL Land $ 125,000 $ $ $ 580,820 Buildings 3,336 530,956 6,124,369 Improvements 12,056,193 Machinery and equipment 517,700 31,862 32,969 3,454,718 Total 646,036 562,818 32,969 22,216,100 Accumulated depreciation (249,167 ( 21,094 ( 3,860 (11,421,954 Net S 396,869 S 541,724 S 29,109 $ 10,794,146 Construction in progress S 475.113 S S 1 .033 Depreciation expense for year S 30.174 S 21.094 S 3,860 $ 484,332 INTERNAL SERVICE FUNDS CITY TRANSPORTATION SHOPS SERVICES TOTAL Machinery and equipment $ 72,916 $ 17,756 $90,672 Accumulated depreciation (39,428 ( 9,685 (49,113 Net L_12_.488 S 8,071 $41,559 Depreciation expense for year S 6,431 $ 1,711 $ 8,142 Note 10. JOINT VENTURES - The City is a participant in two joint ventures consisting of the Regional Building Department and the Pueblo City- County Health Department. A summary of the activities of these joint ventures is as follows: REGIONAL BUILDING DEPARTMENT The Pueblo Regional Building Department was created by the governments of the City of Pueblo, Colorado and the County of Pueblo, Colorado to promote the public health, safety and welfare through the enforcement of building codes and licensing of contractors. The governing body of the Department consists of seven members, three of which are appointed by the City, three are appointed by the County and one member is jointly appointed. The governing body of the Department has authority for the appointment of management. The joint venture agreement requires that the annual operating budget of the department be submitted to the City and County for approval prior to adoption. The agreement also stipulates that the Department provide an accounting of actual revenues and expenses to the City and County on a monthly basis. In addition, the fees charged for the issuance of permits and licenses are subject to the approval of the City and County. To the extent feasible, expenses of the Department are allocated to the participants based on the proportion of the value of construction work performed within the participant's jurisdiction compared A -25 Note 10. Continued to the total value of construction work performed in the entire area. If allocated expenses to any participant exceed revenues generated in that participant's jurisdiction, the governing body of the Department may charge the participant for the deficiency subject to appropriation and the conformity of the expenses incurred to the annual budget approved by the City and County. Summary financial information of the Regional Building Department as of and for the year ended December 31, 1983 is as follows: PUEBLO REGIONAL BUILDING DEPARTMENT BALANCE SHEET December 31, 1983 ASSETS TOTAL ASSETS LIABILITIES AND FUND EQUITY TOTAL LIABILITIES FUND EQUITY TOTAL LIABILITIES AND FUND EQUITY S 91,732 $ 10,810 80,922 � 91,732 PUEBLO REGIONAL BUILDING DEPARTMENT STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS Year Ended December 31, 1983 Operating revenues $ 195,695 Operating expenses 386,949 Operating income (loss) (191,254) Other financing sources (uses) City of Pueblo subsidy 158,000 County of Pueblo subsidy 30,000 Other 556 NET INCOME (LOSS) ( 2,698) Retained earnings, January 1 56,417 Retained earnings, December 31 L-53,719 A -26 Note 10. Continued In as much as the purpose of the Department is to be self- supporting through user fees, the Department has adopted accounting principles which correspond to those used by proprietary funds. Thus, the investment in the joint venture is accounted for using the equity method of accounting. Additionally, the joint venture has no debt which would necessitate the pledging of Department assets as collateral. PUEBLO CITY - COUNTY HEALTH DEPARTMENT The Pueblo City- County Health Department was created by the governments of the City of Pueblo, Colorado and the County of Pueblo, Colorado in 1952. The purpose of the Department is to provide public health services to the residents of the city and county. The governing body of the Department consists of five members, two of which are appointed by the City, two are appointed by the County and one member is jointly appointed by the City and County. The governing body of the Department appoints the administrator and the administrator appoints all other personnel. The joint venture agreement requires that the governing body of the Department submit a proposed annual operating budget to the City and County for their approval. Based upon the proposed budget, the City and County individually determine the amount of their respective annual subsidies for the Department. The joint venture agreement also stipulates that the participants' shall endeavor to appropriate funds to the Department that are reasonable, fair and equitable to all parties. Summary financial information of the Pueblo City- County Health Department as of and for the year ended December 31, 1983 is as follows: PUEBLO CITY - COUNTY HEALTH DEPARTMENT COMBINED BALANCE SHEET -ALL FUND TYPES AND ACCOUNT GROUPS December 31, 1983 TOTAL GENERAL GENERAL (MEMORANDUM ASSETS FUND FIXED ASSETS ONLY) TOTAL ASSETS S 361,965 S 320,099 $ 682,064 LIABILITIES AND FUND EQUITY TOTAL LIABILITIES $ 85,877 $ $ 85,877 TOTAL FUND EQUITY 276,088 320,099 596,187 TOTAL LIABILITIES AND FUND EQUITY J_361,965 S 320,099 $ 682,064 A -27 Note 10. Continued PUEBLO CITY - COUNTY HEALTH DEPARTMENT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE Year Ended December 31, 1983 Total revenues $ 932,691 Total expenditures 1,859,400 Excess (deficiency) of revenues over expenditures ( 926,709) Other financing sources City of Pueblo 471,390 County of Pueblo 444,390 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES ( 10,929) Fund balance, January 1 287,017 Fund balance, December 31 S 276,088 In as much as the accounting principles used by the Department correspond to those used by governmental -type funds, no investment in the joint venture has been recorded in the accompanying financial statements. In addition, the joint venture has no debt which would necessitate the pledging of Department assets as collateral. Note 11. RETIREMENT PLANS - The City has three retirement plans summarized as follows: PUBLIC EMPLOYEES' RETIREMENT ASSOCIATION (PERA) All employees of the City, with the exception of uniformed police and firemen, are eligible for membership in the PERA retirement system. The state -wide plan is under the administration of the Public Employees' Retirement Board of Colorado and thus, the City's fiduciary responsibility is limited to remittance of contributions. Employee's contributions are required and for 1983 was 8.00% of salary. The employer's contribution is determined on the basis of actuarial valuation and is expressed as a percentage of salary. For 1983, this percent was 10.20% and this contribution rate was both the statutory and actuarial funding requirement. The total City contribution in 1983 was $666,634. The basic retirement formula is 2.5 percent of final average salary per year for the first twenty years of service. Final average salary is the average salary of the highest five consecutive years. Employees earn an additional one percent per year for each of the second twenty years of service. An employee may become eligible for retirement with a minimum of thirty years of service at age fifty -five. A -28 Note 11. Continued FIRE AND POLICE PENSION ASSOCIATION Effective January 1, 1981, the fiduciary responsibilities of investment, accountability, and custody of the City of Pueblo Firemen's and Policemen's pension funds were transferred to the State of Colorado Fire and Police Pension Association, which was established January 1, 1980. The terms of this state -wide plan differentiate between those hired before April 8, 1978 (old hires) and those hired subsequent to that date (new hires). The Plan stipulates that all full -time paid firemen and policemen in the state are covered by the death and disability provisions of the plan and all new hires are covered by the retirement provisions of the state -wide plan. The old hires had the option of being covered by the retirement provisions of the state -wide plan or the retirement provisions of the old plans. The amounts reported as "net investment in state fire and police pension plan "and the related" reserve for retirement benefits" represent the City's share of the net assets available for plan benefits of the state -wide plan for the old hires who elected to be covered under the retirement provisions of the old plans. The net investment in the state fire and police pension plan is summarized as follows: City of Pueblo Policemen $ 13,867,343 City of Pueblo Firemen 5,036,375 $ 18,903,718 The amount reported above for the City of Pueblo Policemen includes $1,276,123 of assets which are being held in a separate account known as the Transition Asset Pool (TAP) account. This account is used to account for assets that were transferred to the state -wide plan that met the following requirements: A maturity date longer than five years from the time of transfer . A return of less than 10% of face value . A market value of less than 85% of face value At such time as an asset no longer meets the above requirements, that asset is transferred to the old hire fund at market value with the affiliating entity receiving credit. A summary of the unaudited assets, liabilities, and participants' equity at December 31, 1983 of the state -wide plan for the old hires is as follows: A -29 Note 11. Continued ASSETS Cash Accounts receivable Accrued interest Investments, at market (cost $187,667,891) TOTAL ASSETS LIABILITIES AND PARTICIPANTS' INTEREST Accounts payable TOTAL LIABILITIES PARTICIPANTS' INTEREST TOTAL LIABILITIES AND PARTICIPANTS' INTEREST $ 56,081 530,638 2,211,356 196,784,796 $ 199,582,871 2,715,519 2,715,519 196,867,352 $ 199,582,871 Even though the investment, accountability, and custody responsibilities have been transferred to the state -wide plan, the City retains the fiduciary responsibility for the retirement benefits for the old hires who have elected to be covered under the retirement provisions of the old plans. The City's contribution for the year ended December 31, 1983 for firemen hired prior to April 8, 1978 Teas 25.397% of salaries, or $702,462, with individual firemen contributing 7.0% of their salaries. For firemen hired subsequent to April 8, 1978, the city contributed 8 %, or $34,458 during 1983 with individual firemen contributing an equal amount. The City's contribution for the year ended December 31, 1983 for policemen hired prior to April 8, 1978 was 16.72% of salaries, or $606,861 with individual policemen contributing 7.0% of their salaries. For policemen hired subsequent to April 8, 1978, the City contributed 8 %, or $39,574 during 1983 with individual policemen contributing an equal amount. The latest available actuarially determined unfunded accrued liability of the City of Pueblo Firemen's and Policemen's Pension fund is, as of January 1, 1982, $21,031,207 and $8,138,840, respectively. The actuarial valuation did not separate the unfunded liability between vested and nonvested benefits. The unfunded accrued liability was determined by an actuary. The significant actuarial assumptions used in the valuation as of January 1, 1982 were: A -30 Note 11. Continued ACTUARIAL COST METHOD Individual entry age - normal cost method. INVESTMENT RETURN 7 1 /2y per annum, compounded annually. LIFE EXPECTANCY OF PARTICIPANTS The 1971 Group Annuity Table projected by scale D to 1975, loaded for fire and police experience. SALARY INCREASES 5% per annum compounded annually for benefits accrued prior to January 1, 1980; 3% per annum thereafter (maximum permitted by state law); 5% per annum for full rank escalation which the City has adopted. RETIREMENT Age 50 and 20 years of service for firemen and age 55 and 25 years of service for policemen. The foregoing actuarial assumptions are based on the presumption that the city plans will continue. In addition, the City has elected to fund the accrued service costs over the next 36 years under the "undue initial hardship" provision as stipulated in Colorado Senate Bill 46 which established the state -wide plan. The following is a summary of accumulated plan benefits and plan net assets at January 1, 1982: Actuarial present value of accumu- lated plan benefits Vested Nonvested Total Net assets available for benefits POLICE FIRE $ 11,814,713 $ 15,307,072 2,103,273 5,353,512 $ 13,917,986 $ 20,660,584 $ 9.304.291 $ 3,024 066 The amounts reported above as net asests available for benefits have been reduced by the amounts that were transferred during 1982 to the new hire fund for firemen and policemen hired prior to April 8, 1978, who elected to be covered under the retirement provisions of the state -wide plan. Note 12. ACCRUED COMPENSATED ABSENCES - In accordance with NCGA Statement 4, the City has recognized as an expenditure and a liability in the general fund A -31 Note 12. Continued the accrued vacation and sick pay that is expected to be liquidated with available spendable resources. The remaining amount of the unpaid vacation and sick pay attributable to governmental funds has been recognized in the general long -term debt account group. The unpaid vacation and sick pay attributable to proprietary funds has been accrued in its entirety. The following is a summary of the prior period adjustment to reflect recognition of this liability for the general fund: Fund balance, January 1, 1983, as pre- viously reported $ 10,032,270 Prior period adjustment to record accrued compensated absences expected to be liquidated with available spendable resources ( 176,402 Fund balance, January 1, 1983, as restated $ 9,855,868 The following is a summary of the total unpaid vacation and sick pay that existed at December 31, 1983: General fund $ 150,000 Enterprise funds Memorial Airport 48,895 Sewer User 88,625 Internal Service Funds City Shops 25,989 General long -term debt account group 1,896,280 Total $ 2,209,789 The total amount of $2,209,789 consists of $1,003,184 vacation pay and $1,206,605 sick pay. Note 13. COMMITTMENTS - The following is a summary of the more significant committments as of December 31, 1983: In the late 1970's, the City began a major project to separate storm sewers in various areas of the City, particularly the Downtown area, based on the directive of the Environmental Protection Agency (EPA). This project has been completed except for two phases. It is anticipated that the City will incur additional costs of approximately $1,170,000 in completing this project with EPA reimbursing the City approximately $625,000 of the total costs. It is anticipated that these projects will be completed in 1984. In conjunction with the above EPA directive, the City was required by EPA to commit to the construction of a new sewage treatment plant upon completion of the above sewer separation phase. At the time of this committment, the City understood that 75% of the construction costs of the new sewage treatment plan would be financed by the federal government. A -32 Note 13. Continued Since that time, the EPA has issued new regulations which will drop the federal share to 557. As a consequence, it is anticipated that the City's share of the construction costs will increase by approximately $9 million. It is anticipated that the City will issue revenue bonds to finance their share of the construction costs. The revenue bond debt will be serviced by sewer user charges. At the present time, total construction costs of the sewage treatment plan are estimated to be $32 million with construction slated to begin in 1985 or 1986. In November, 1983, the citizens of the City approved a $5 million dollar bond issue to upgrade storm sewers in an area around the Colorado State Fairgrounds. These will be general obligations bonds and will be serviced by operating transfers from the general fund. In March, 1984, the Sperry Corporation announced plans to construct a computer manufacturing facility in an area near the Pueblo Memorial Airport. As an inducement to the Sperry Corporation to locate in Pueblo, members of the City Council have, individually, proposed certain financial incentives to the Sperry Corporation which may require financial committments on the part 6f the City. At the present time, no formal agreement has been reached between the City and the Sperry Corporation and the amount of the City's financial committment, if any, is not known at this time. Note 14. DESCRIPTION OF LEASING ARRANGEMENTS - During 1982, the City entered into a lease agreement for equipment to convert certain police cars to propane use instead of gasoline use. In accordance with NCGA Statement 5 and FASB 13, this lease is a capital lease and has been capitalized as part of general fixed assets. The following is a schedule by years of future minimum lease payments: Year ended December 31: 1984 $ 35,103 1985 17,551 Total 52,654 Less: amounts representing interest 6,116 Present value of minimum lease payments $ 46,538 No other material operating or capital leases existed at December 31, 1983. A -33 Note 15. LONG -TERM DEBT - The following is a summary of the changes in all long -term debt for the year ended December 31, 1983: Revenue bonds Parking facilities Golf course Sewer, series 1983 A Special assessments Obligation under capi- 75,000 10,000 25,000 10,000 3,730,000 75,000 337,296 266,686 291,120 50,000 3,655,000 312,862 tal lease 71,940 25,402 46,538 Total $ 10,680,236 5266,686 S764,522 $ 10182,400 Special assessment bonds, as presented above, are net of unamortized discount of $29,138 at December 31, 1983. Bonds payable at December 31, 1983 are comprised of the following individual issues: GENERAL OBLIGATION BONDS $6,700,000 1974 refunding serial bonds due in annual installments of $20,000 to $510,000 through 1996; interest at 5.50%; this issue is being serviced by the Refunding Bonds Series B 1974 debt service fund $ 4,665,000 $950,000 1974 recreation serial bonds due in annual installments of $40,000 to $75,000 through 1994; interest at 4.00% to 7.00 %; this issue is being serviced by the Downtown Improve- ment District expendable trust fund $975,000 1976 general improvement serial bonds due in annual installments of $28,000 to $140,000 through 1996; interest at 5.40% to 7.00%; this issue is being serviced by the Downtown Improve- ment District expendable trust fund 640,000 813,000 $ 6,118,000 A -34 BALANCE BALANCE DESCRIPTION JANUARY 1, 1983 ISSUED RETIRED DECEMBER 31, 1983 General obligation Refunding, Series B $ 4,935,000 $ $270,000 $ 4,665,000 Ice Rink, Series A 680,000 40,000 640,000 Downtown Improve- ment 841,000 28,000 813,000 Revenue bonds Parking facilities Golf course Sewer, series 1983 A Special assessments Obligation under capi- 75,000 10,000 25,000 10,000 3,730,000 75,000 337,296 266,686 291,120 50,000 3,655,000 312,862 tal lease 71,940 25,402 46,538 Total $ 10,680,236 5266,686 S764,522 $ 10182,400 Special assessment bonds, as presented above, are net of unamortized discount of $29,138 at December 31, 1983. Bonds payable at December 31, 1983 are comprised of the following individual issues: GENERAL OBLIGATION BONDS $6,700,000 1974 refunding serial bonds due in annual installments of $20,000 to $510,000 through 1996; interest at 5.50%; this issue is being serviced by the Refunding Bonds Series B 1974 debt service fund $ 4,665,000 $950,000 1974 recreation serial bonds due in annual installments of $40,000 to $75,000 through 1994; interest at 4.00% to 7.00 %; this issue is being serviced by the Downtown Improve- ment District expendable trust fund $975,000 1976 general improvement serial bonds due in annual installments of $28,000 to $140,000 through 1996; interest at 5.40% to 7.00%; this issue is being serviced by the Downtown Improve- ment District expendable trust fund 640,000 813,000 $ 6,118,000 A -34 ..- rL.a a+l Note 15. Continued REVENUE BONDS $475,000 1966 parking facilities bonds due in annual installments of $25,000 through 1985; in- terest at 4.5 %; this issue is being serviced by Parking Facilities expendable trust fund $ 50,000 $3,800,000 1981 A sewer revenue bonds due in annual installments of $75,000 to $435,000 through 2001; interest at 7.75% to 11.625 %; this issue is being serviced by the Sewer User enterprise fund SPECIAL ASSESSMENT BONDS $63,000 1974 improvement district 73 -5 serial bonds due in annual installments of $3,000 through 1984; interest at 7.25% $243,000 1975 improvement district 74 -3 serial bonds due in annual installments of $11,000 to $16,000 through 1985; interest at 7.625% $170,000 1975 improvement district 75 -1 serial bonds due in annual installments of $8,000 to $12,000 through 1985; interest at 7.375% $125,000 1975 improvement district 75 -2 serial bonds due in annual installments of $8,000 to $12,000 through 1985; interest at 7.375% $80,000 1975 improvement district 75 -5 serial bonds due in annual installments of $4,000 to $5,000 through 1985; interest at 7.125% $46,000 1975 improvement district 75 -6 serial bonds due in annual installments of $2,000 to $3,000 through 1985; interest at 7.375% $9,000 1975 improvement district 75 -7 serial bonds due in annual installments of $1,000 through 1984; interest at 7.75% $96,000 1977 improvement district 76 -4 serial bonds due in annual installments of $5,000 to $10,000 through 1987; interest at 7.75% $12,000 1976 improvement district 76 -6 serial bonds due in annual installments of $1,000 to $2,000 beginning in 1984 through 1986; interest at 7.75% 3,655,000 S 3,705,000 $ 2,984 13,863 15,757 13,879 7,937 3,968 991 26,642 1,973 A -35 Note 15. Continued $16,000 1976 improvement district 76 -7 serial bonds due in annual installments of $1,000 be- ginning in 1984 through 1985; interest at 7.75% $69,000 1977 improvement district 77 -2 serial bonds due in an annual installment of $3,000 in 1984; interest at 7.5% $13,000 1978 improvement district 77 -3 serial bonds due in annual installments of $1,000 through 1985; interest at 8.0% $30,000 1977 improvement district 77 -4 serial bonds due in annual installments of $1,000 to $3,000 through 1987; interest at 7.5% $21,000 1978 improvement district 78 -2 serial bonds due in annual installments of $1,000 to $2,000 through 1988; interest at 7.5% $8,000 1978 improvement district 78 -3 serial bonds due in annual installments of $1,000 be- ginning in 1985 through 1988; interest at 7.5% $23,000 1982 improvement district 79 -10 serial bonds due in annual installments of $3,000 to $7,000 beginning in 1986 through 1989; interest at 6.70% $51,000 1982 improvement district 79 -11 serial bonds due in annual installments of $3,000 to $13,000 through 1989; interest at 7.25% $28,000 1982 improvement district 79 -12 serial bonds due in annual installments of $3,000 to $8,000 through 1989; interest at 7.75% $12,000 1982 improvement district 80 -2 serial bonds due in annual installments of $1,000 to $4,000 beginning in 1986 through 1990; interest at 11.00% $10,000 1982 improvement district 80 -3 serial bonds due in annual installments of$1,000 to $3,000 through 1990; interest at 10.00% $33,000 1983 improvement district 80 -1 serial bonds due in annual installments of $2,000 to $7,000 beginning in 1986 through 1990; interest at 11.50% 1,985 2,956 1,968 5,905 3,938 17,850 30,821 15,739 7,471 6,318 24,134 A -36 Note 15. Continued $17,000 1983 improvement district 80 -6 serial bonds due in annual installments of $1,000 to $2,000 beginning in 1986 through 1990; interest at 10.00% 6,695 $15,000 1983 improvement district 80 -8 serial bonds due in annual installments of $1,000 to $2,000 beginning in 1986 through 1990; interest at 11.00% 6,412 $22,000 1983 improvement district 80 -10 serial bonds due in annual installments of $1,000 to $6,000 beginning in 1985 through 1990; interest at 10.00% 19,873 $109,000 1983 improvement district 81 -1 serial bonds due in annual installments of $2,000 to $7,000 beginning in 1988 through 1991; interest at 11.50% 16,093 $51,000 1983 improvement district 81 -2 serial bonds due in annual installments of $3,000 to $7,000 beginning in 1985 through 1991; interest at 11.75% 28,650 $11,000 1983 improvement district 81 -3 serial bonds due in annual installments of $1,000 beginning in 1987 through 1991; interest at 12.00% 4,708 $20,000 1983 improvement district 82 -1 serial bonds due in annual installments of $1,000 to $3,000 beginning in 1984 through 1992; interest at 12.50% 15,463 $ 312,862 OBLIGATIONS UNDER CAPITAL LEASES $83,205 capital lease due in annual install- ments of $35,103 through 1985; interest at 17.0 %; this lease obligation is being serviced by the Capital Improvement special revenue fund $ 46,538 '� 10 Note 15. Continued The annual requirements to amortize all debts outstanding as of December 31, 1983, including interest payments of $7,408,102 are as follows: YEAR ENDING GENERAL AMOUNT SPECIAL CAPITAL ISSUED DECEMBER 31 OBLIGATION REVENUE ASSESSMENTS LEASE TOTAL 1984 $ 688,130 $ 510,687 $ 72,000 $35,103 $ 1,305,920 1985 684,289 507,963 60,000 17,551 1,269,803 1986 685,341 485,175 51,000 62,000 1,221,516 1987 686,124 486,863 49,000 $ 594,000 1,221,987 1988 684,587 482,412 42,000 1,208,999 1989 -1993 3,427,728 2,418,500 68,000 5,914,228 1994 -1998 1,598,285 2,421,106 4,019,391 1999 -2001 1,458,069 1,458,069 Total $8,454,484 $8,770,775 $ 342,000 52 _ $17,619,913 Legal debt margin for the year ended December 31, 1983 was $21,908,402. City Council has authorized the issuance of the following special assessment bonds which remain unissued at December 31, 1983: There are a number of limitations and restrictions contained in the various bond indentures. The City is in compliance with all significant limitations and restrictions. Note 16. INDIVIDUAL INTERFUND RECEIVABLES AND PAYABLES - A summary of the individual interfund receivables and payables is as follows: AMOUNT AMOUNT IMPROVEMENT DISTRICT AUTHORIZED ISSUED 75 -7 $ 10,000 $ 9,000 76 -4 193,000 96,000 76 -6 20,000 12,000 77 -3 24,000 13,000 79 -10 128,000 23,000 79 -11 86,000 51,000 79 -12 58,000 28,000 80 -2 62,000 12,000 80 -3 13,000 10,000 $ 594,000 S 254,000 There are a number of limitations and restrictions contained in the various bond indentures. The City is in compliance with all significant limitations and restrictions. Note 16. INDIVIDUAL INTERFUND RECEIVABLES AND PAYABLES - A summary of the individual interfund receivables and payables is as follows: 447 .257 DUE TO n mrr r.•r. r $ 474,600 99,180 40,964 84,908 3,229 469,274 $ 1,172,155 A -38 DUE FROM GENERAL FUND OTHER FUNDS Special Revenue $ 94,467 Capital Projects 104,588 Special Assessments 29,258 Enterprise 51,991 Internal Service 57,520 Trust and Agency 109,433 447 .257 DUE TO n mrr r.•r. r $ 474,600 99,180 40,964 84,908 3,229 469,274 $ 1,172,155 A -38 Note 16. Continued SPECIAL REVENUE FUNDS Capital Improvement Federal Revenue Sharing Community Development Highway Users Council of Governments Regional Planning Commission Pueblo Human Resources Urban Transportation Plan Pueblo Energy Extension Area Aging Agency Emergency Jobs Bill Head Start DUE FROM DUE TO GENERAL FUND GENERAL FUND $ 75,257 68,600 9,918 280,994 7,452 5,479 5,226 3,999 5,772 11,903 474.600 S 99 ,180 21,173 73,294 $ 94,467 DUE TO GENERAL FUND 11,566 51,131 5,542 36,349 �_ 104,588 A -39 DUE FROM CAPITAL PROJECTS FUNDS GENERAL FUND E.D.A. Airport Interchange $ 4,588 Sewer System Construction Fund 47 U.M.T.A. Facilities Grant 40,037 U.M.T.A. Bus Stop Equipment 49,754 Sewer Bonds 4,754 Keeler Parkway Extention Airport Development U.M.T.A. Bus Grant Land, Water Conservation S 99 ,180 21,173 73,294 $ 94,467 DUE TO GENERAL FUND 11,566 51,131 5,542 36,349 �_ 104,588 A -39 Note 16. Continued SPECIAL ASSESSMENT FUNDS DUE FROM DUE TO GENERAL FUND GENER FUND 73 -5 $ 2,411 $ 74 -3 2,828 75 -1 67 75 -2 358 75 -5 214 75 -6 208 76 -4 925 76 -6 274 76 -7 179 77 -2 1,680 77 -3 1,135 77 -4 4,186 78 -1 1,211 78 -2 1,835 78 -3 1,351 79 -10 613 79 -11 1,834 79 -12 1,125 79 -16 1,286 80 -1 4,447 80 -2 3,349 80 -3 872 80 -6 1,577 81 -1 3,393 81 -2 3,051 81 -3 232 Surplus and deficiency 323 78 -4 1,136 79 -3 915 79 -9 4,060 80 -3 11,968 80 -10 10,966 82 -1 129 83 -2 84 $ 40,964 $ 29.258 A -40 Note 16. Continued ENTERPRISE FUNDS Golf Course Memorial Airport Ice Arena Sewer User Swimming Pools Public Transportation Cemetary INTERNAL SERVICE FUNDS DUE FROM DUE TO GENERAL FUND GENERAL FUND $ 451 $ 3,233 56,312 11,877 13,035 31,324 20,667 $ 84,908 $ 51,991 DUE FROM DUE TO GENERAL FUND GENERAL FUND Transportation Services City Shops TRUST AND AGENCY FUNDS Downtown Improvement Leidigh Park Trust Housing Rehabilitation Program Housing Rehabilitation Escrow Parking Facilities Conservation Trust Park Land Escrow Pre -need Cemetary Services Sam Jones Trust Fund Deposits and Clearing Mountain View Cemetary Endowment Restoration of Carousel $ 3,229 $ 3,229 DUE FROM GENERAL FUND $ 57,520 S 57,520 DUE TO GENERAL FUND $ 5,749 $ 786 151,675 73,230 59 219 64,808 822 505 171,421 105,633 3,800 $ 469,274 X109,433 Note 17• FUND EQUITY - Certain portions of fund equity have been reserved that represent funds that are not available for appropriation in the subsequent year. In addition, the City has designated portions of their unreserved fund equity for certain subsequent years' eqpenditures which can be appropriated in future years. The following is a description of these reserves and designations at December 31, 1983: A -41 Note 17. Continued RESERVATIONS OF RETAINED EARNINGS Reservations of retained earnings are summarized as follows: Reserve for warrant fund -golf course bonds $ 80,429 Reserve for warrant sinking fund - golf course bonds 20,231 Reserve for operations -sewer revenue bonds 90,000 Reserve for bonds -sewer revenue bonds 440,000 $ 630,660 The warrant fund and sinking fund reserves were created by ordinance to provide for the accumulation of funds and annual payments for debt retirement of golf course improvement bonds. The sinking fund agreement stipulates that the golf course must transfer $17,000 per year to the sinking fund for payment of the principal and interest on the revenue bonds. The operations and bond reserve of the sewer revenue bonds was created as part of the issuance of the 1981 A series sewer revenue bonds in accordance with the bond indenture. The total of the reserves has been invested in a U.S. treasury note maturing in 1984. RESERVATIONS OF FUND BALANCES Reserve for S.I.D. mill levy The bond agreements for the various special improvement districts provide that a mill levy is to be assessed upon the taxable property within the city. By City Charter, the total levy from all districts cannot exceed two mills in any one year. The purpose of the levy is to provide funds, if the district cannot, for current payments of interest and bond principal. The City Charter provides that, in lieu of such tax levies, the city council may annually t•ransf.er any available money, limited to the amount which would result from such a tax levy. The reserve fund provides the amount needed to meet the bond agreement requirements after reflecting funds available in special assessments accounts. Reserve for inventory A reserve equal to the inventory on hand at December 31, 1983, is provided to reflect the recording of inventories under the purchase method. Reserve for encumbrances Encumbrances outstanding at year end are reported as reservations of fund balances since they do not constitute expenditures or liabilities. A -42 � ;,11'I II II Ip IHI�! N1�1!I� Note 17. Continued UNRESERVED FUND BALANCES - DESIGNATIONS Designated for subsequent years' expenditures The City designates certain portions of its unreserved fund balances for future expenditures based on city council plans for future use. These designations, however, are only estimates and may change due to unforseen circumstances. Note 18. PRIOR PERIOD ADJUSTMENTS - The following is a summary of the prior period adjustments for individual funds which affect beginning fund balances that have not been described in other notes to the financial statements: ENTERPRISE FUNDS Regional Building Department $ L ,39 0 $ 47,390 A -43 FUND BALANCE (DEFICIT) FUND BALANCE JANUARY 1, 1983 (DEFICIT) SPECIAL AS PREVIOUSLY PRIOR PERIOD JANUARY 1 1983 ASSESSMENT FUNDS REPORTED ADJUSTMENT AS RESTATED 73 -5 $ 3,523 $( 5,559) ;( 2,036) 74 -3 4,298 ( 11,584) ( 7,286) 75 -1 ( 13,434) ( 9,513) ( 22,947) 75 -2 ( 6,015) ( 13,070) ( 19,085) 75 -5 ( 5,779) ( 3,794) ( 9,573) 75 -6 ( 2,549) ( 2,555) ( 5,104) 75 -7 ( 1,178) ( 160) ( 1,338) 76 -4 ( 5,561) ( 11,858) ( 17,419) 76 -6 1,895 ( 2,366) ( 471) 76 -7 103 ( 861) ( 758) 77 -2 3,907 ( 2,591) 1,316 77 -3 2,591 ( 3,626) ( 1,035) 77 -4 4,524 ( 11,642) ( 7,118) 78 -1 2,381 ( 313) 2,068 78 -2 2,864 ( 5,033) ( 2,169) 78 -4 548 ( 1,850) ( 1,302) Surplus and deficiency 287,525 (125,468 162,057 $ 279,643 $(211,843 $ 67,800 ENTERPRISE FUNDS Regional Building Department $ L ,39 0 $ 47,390 A -43 Note 18. Continued The prior period adjustment for the special assessment funds represents the adjustment necessary to record the amount of deferred assessment revenues that existed at December 31, 1982 for improvement districts created prior to the effective date of NCGA Statement 1. This adjustment was made so as to comply with NCGA Statement 1. The improvement districts created subsequent to the effective date of NCGA Statement 1 have been accounted for in accordance with generally accepted accounting principles. The prior period adjustment for the Regional Building Department represents the adjustment necessary to record the City's 84% investment in the Regional Building Department joint venture. The remaining 16% is held by the County of Pueblo, Colorado who is the other participant in the joint venture. Note 19. CAPITAL CONTRIBUTIONS - A summary of the capital contributions by individual fund for the year ended December 31, 1983 is as follows: SPECIAL REVENUE FUNDS Capital Improvement $ 799,738 CAPITAL PROJECTS FUNDS U.M.T.A. Facilities Grant $ 2,059 U.M.T.A. Bus Grant 7,191 Airport Development 446,858 $ 456,108 These amounts represent resources expended in these funds which are contributions of capital to certain enterprise funds. As such, they do not constitute expenditures of these funds and are reported as a direct reduction of fund balance. Note 20. EQUITY TRANSFERS - The following is a summary of individual funds that were closed during 1983: SPECIAL ASSESSMENT FUNDS 73 -1 $ 25,395 73 -2 6,805 75 -4 8,980 77 -5 6,839 83 -1 ( 597 $ 47 ,422 These fund balances were closed to the surplus and deficiency special assessment fund. A -44 Note 21• SEGMENT INFORMATION FOR ENTERPRISE FUNDS - The City maintains seven enterprise funds which provide golf, airport, ice rink facilities, transportation, sewer, swimming pools and cemetary services. In addition, the City is a participant in a joint venture with the County of Pueblo, Colorado in the Regional Building Department which is accounted for using the equity method of accounting. Segment information for the year ended December 31, 1983 is as follows: GOLF MEMORIAL ICE PUBLIC COURSE AIRPORT ARENA TRANSPORTATION Operating revenues $ 485,038 $ 462,240 $ 151,745 $ 304,974 Operating expenses, excluding depreciation 463,043 713,210 363,495 1,121,564 Depreciation 22,772 147,585 33,363 225,484 Operating income (loss) ( 777) ( 398,555) ( 245,113) ( 1,042,074) Nonoperating revenues (expenses) Operating grants Equity in income (loss) of joint venture Interest income Other Interest and fiscal charges Income (loss) before operating transfers Operating transfers In NET INCOME (LOSS) Contributed capital Property, plant and equipment Net additions Construction in progress Net working capital Revenue bonds payable Payable from operating rev - venues TOTAL EQUITY 410,809 19,475 33,376 ( 15,500) ( 475 74 24,461 18,223 ( 380,679) ( 245,113) ( 606,730) 310,766 243,436 381,245 $ 18,223 $- 69,913 $ ( 1,677 $ 225,485 401,197 6,758,702 1,395,275 4,272,305 34,393 193,520 12,170 927,861 213,378 583,975 56,114 678,267 6,740,370 1,228,265 11,875 2,059 85,925 3,048,854 A -45 Note 21. Continued Operating revenues Operating expenses, exclud- ing depreciation Depreciation Operating income (loss) Non- operating revenues (expenses) Operating grants Equity in income (loss) of joint venture Interest income Other Interest and fiscal charges Income (loss) before oper- ating transfers Operating transfers In NET INCOME (LOSS) Contributed capital Property, plant and ecuipment ,et additions Construction in progress `Net working capital (deficit) Revenue bonds payable Payable from operating revenues REGIONAL SEWER SWIMMING BUILDING USER POOLS CEMETARY DEPARTMENT TOTAL $2,640,073 $ 82,497 $ 98,993 $ 1,547,234 342,340 207,308 30,174 21,094 3,860 1,062,665 (280,937) (112,175) $ 4,225,560 4,758, 194 484,332 (1,016,966) 410,809 274,303 ( 2,266) ( 2,266) 327 , 228 8,961 ( 411,104 ( 411,579 925,864 (280,937) (112,175) ( 2,266) ( 683,813) 288,000 119,703 1,343,150 $ 925_,864 $ 7,063 $ 7,528 $_L___2,266 230,777 556,319 45,998 27,203 13,687,776 192,815 562,818 65,929 1,073,520 475,113 1,405,033 2,783,262 21,658 ( 8,543) 3,735,7--9 3,655,000 3,655,000 TOTAL EQUITY 80,244 563,382 53,526 72,327 12,465,235 Note 22. CONTINGENCIES - The following is a summary of the more significant contingencies that existed at December 31, 1983: The City is the defendent in several lawsuits for damages and claims, principally in connection with police actions, accidents on city property and employment related personnel actions. It is not known to what extent the City may be liable, if at all, for amounts in excess of insurance coverage until trial or settlement of the various suits. In the opinion of the city attorney, personal injury claims pendit:g against the city arc- adequately insured. A -46 Note '_2. Continued Under the terms of Federal and state grants, periodic audits are required and certain costs may be questioned as not being appropriate expenditures under the terms of the grants. Such audits could lead to reimbursement to the grantor agencies. City management believes disallowances, if any, will be immaterial. Note 23. RECONCILIATIONS - As discussed in Note I(E), only certain special revenue funds have adopted annual budgets. These funds include Capital Improvement, Federal Revenue Sharing, Community Development, Highway Users and Pueblo Area Council of Governments. Only these funds have been included on the combined statement of revenues, expenditures and changes in fund balances - budget (GAAP basis) and actual, as shown on page 5. The remaining special revenue funds generally consist of federally- funded projects for which annual appropriations are not made but are governed by project budgets established by the appropriate funding agency. These funds include Regional Planning Commission, Pueblo Human Resources, Urban Transportation, Pueblo Energy Extension, Department of Highways, Emergency Jobs Bill, Head Start, E.P.A. Water Study and Area Aging AGency. The following is a reconciliation of the actual revenues, expenditures, other sources and uses and changes in fund balances between the combined statement of revenues, expenditures and changes in fund balances as reported on page 4 and the combined statement of revenues, expenditures and changes in fund balances - budget (GAAP basis) and actual as reported on page 5: A -47 Note 23. Continued FUNDS NOT REPORTED FUNDS REPORTED ON TOTAL ON BUDGET STATEMENT BUDGET STATEMENT REPORTED ON PAGE 5 O N PAGE 5 O PAGE 4 Revenues Taxes $ $ 459,630 $ 459,630 State and federal grants 1,205,259 4,120,217 5,325,476 Revenue from other agencies 5,000 843,056 848,056 Interest income 2,253 105,730 107,983 Project income 596,291 596,291 Matching revenue 501,975 501,975 ;Miscellaneous ( 43,357 62,205 _ 18,040 Total revenues 2,267,421 5,590,838 7,858,259 Expenditures Programs and projects 2,318,923 391,949 2,710,872 Matching expendi- tures 386,312 386,312 Capital outlay 3,182,011 3,182,011 '.Von- capital expendi- tures ( 19,297) 726,136 706,839 Principal retire - ment 25,402 25,402 Interest and fiscal charges 9,701 9,701 Other services and charges 15,734 15,734 Total expenditures 2,701,67 4,33 7,036,871 Excess (deficiency) of revenues over expenditures ( 434,251) 1,255,639 821,388 Other financing sources (uses) Operating transfers in 319,500 5,141,346 5,460,846 Operating transfers out (4,313,463 (4,313,463 Total other financing (uses) 319,500 827,883 1,147,383 EXCESS (DEFICIENCY) OF REVENUES AND OTHER SOURCES OVER EXPENDITURES AND OTHER USES ( 114,751) 2,083,522 1,968,771 Fund balances (deficit), January 1 126,599 2,625,203 2,751,802 Capital contributions ( 799,738 ( 799,738 Fund balances (deficit), December 31 X - $ - 3 L 908,987 $3,920 835 ,;