CITY OF AUGUSTA, MAINE $1,560,000 2020 GENERAL … · 2020-06-30 · The City of Augusta, Maine...
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PRELIMINARY OFFICIAL STATEMENT DATED JUNE 30, 2020 NEW ISSUE S&P Rating: AA (Stable Outlook) Northeast Municipal Advisors, LLC (See “THE BONDS—Rating” herein) In the opinion of Preti, Flaherty, Beliveau & Pachios, LLP, bond counsel (“Bond Counsel”) to the City of Augusta, Maine (the “City”), assuming compliance by the City with certain tax covenants described herein, under existing law, interest on the Bonds (as defined below) is excluded from the gross income of the owners of the Bonds for federal income tax purposes pursuant to section 103 of the United States Internal Revenue Code of 1986, as amended (the “Code”), and interest on the Bonds is not an item of tax preference pursuant to section 57 of the Code for purposes of computing alternative minimum tax. Bond Counsel to the City is also of the opinion that interest on the Bonds is exempt from taxation within the State of Maine pursuant to 30-A MRSA §5772(9). The City will designate the Bonds as “qualified tax-exempt obligations” for purposes of section 265(b)(3) of the Code. See “THE BONDS—Tax Matters” and Appendix B herein. CITY OF AUGUSTA, MAINE $1,560,000 2020 GENERAL OBLIGATION BONDS Dated: Date of Delivery Due: June 1, as shown below The City of Augusta, Maine $1,560,000 2020 General Obligation Bonds (the “Bonds”) will be issued as fully-registered securities without coupons and, when issued, will be registered in the name of Cede & Co., as owner of the Bonds and nominee for The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the Bonds. Purchases of the Bonds will be made in book-entry form, in the denomination of $5,000 or any integral multiple thereof. Purchasers will not receive certificates representing their interest in Bonds purchased. See “THE BONDS—Book-Entry-Only System” herein. Principal of and semi-annual interest on the Bonds will be paid to DTC by the City of Augusta, Maine (the “City”). Interest on the Bonds will be payable on December 1, 2020 and semi-annually on each June 1st and December 1st thereafter until maturity. As long as DTC or its nominee is the owner of the Bonds, such payments will be made directly to such owner of the Bonds. Disbursement of such payments to the DTC Participants is the responsibility of DTC and disbursement of such payments to the Beneficial Owners is the responsibility of the DTC Participants and the Indirect Participants, as more fully described herein. The Bonds will be issued by the City and, unless paid from other sources, will be payable as to both principal and interest from ad valorem taxes, which are limited as to rate and amount unless certain requirements set forth in 30-A MRSA §5721-A are satisfied, upon all the property within the territorial limits of the City taxable by the City, except to any extent that the City may enter into an agreement under 30-A MRSA §5751 and following to share any portion of its assessed valuation with another municipality and except also to any extent that the City may retain all or any part of the tax increment of a tax increment financing district for the purpose of financing a development program in accordance with 30-A MRSA §5221 and following. The Bonds are being issued to provide funds to finance acquisition, construction, renovation, reconstruction, improvement and repair of City facilities and equipment. See “THE BONDS—Authorization and Use of Proceeds” herein. MATURITY SCHEDULE June 1 Amount Interest Rate Yield/Price CUSIP June 1 Amount Interest Rate Yield/Price CUSIP 2021 $130,000 2026 $115,000 2022 125,000 2027 115,000 2023 125,000 2028 85,000 2024 125,000 2029 85,000 2025 120,000 2030 85,000 $225,000____% Term Bond, due June 1, 2035, to Yield____%, CUSIP_________ $225,000____% Term Bond, due June 1, 2040, to Yield ____%, CUSIP_________ The Bonds are subject to redemption by the City prior to their stated dates of maturity as more fully set forth herein. See “THE BONDS—OPTIONAL REDEMPTION PRIOR TO MATURITY” and “THE BONDS–MANDATORY REDEMPTION” herein. The Bonds are offered when, as and if issued, subject to the approval of legality by Preti, Flaherty, Beliveau & Pachios, LLP, Augusta, Maine, Bond Counsel to the City. Northeast Municipal Advisors, LLC serves as Municipal Advisor to the City. It is expected that the Bonds, in definitive form, will be available for delivery to the Depository Trust Company in New York, New York, on or about July 24, 2020. The Preliminary Official Statement and the information contained herein are subject to completion or amendment. The City will make available its Final Official Statement with respect to the Bonds. This Preliminary Official Statement is for information purposes only and does not constitute an offer to sell or the solicitation of any offer to buy the Bonds in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under securities laws of such jurisdiction.
Transcript of CITY OF AUGUSTA, MAINE $1,560,000 2020 GENERAL … · 2020-06-30 · The City of Augusta, Maine...
PRELIMINARY OFFICIAL STATEMENT DATED JUNE 30, 2020
NEW ISSUE S&P Rating: AA (Stable Outlook) Northeast Municipal Advisors, LLC (See “THE BONDS—Rating” herein)
In the opinion of Preti, Flaherty, Beliveau & Pachios, LLP, bond counsel (“Bond Counsel”) to the City of Augusta, Maine (the “City”), assuming compliance by the City with certain tax covenants described herein, under existing law, interest on the Bonds (as defined below) is excluded from the gross income of the owners of the Bonds for federal income tax purposes pursuant to section 103 of the United States Internal Revenue Code of 1986, as amended (the “Code”), and interest on the Bonds is not an item of tax preference pursuant to section 57 of the Code for purposes of computing alternative minimum tax. Bond Counsel to the City is also of the opinion that interest on the Bonds is exempt from taxation within the State of Maine pursuant to 30-A MRSA §5772(9). The City will designate the Bonds as “qualified tax-exempt obligations” for purposes of section 265(b)(3) of the Code. See “THE BONDS—Tax Matters” and Appendix B herein.
CITY OF AUGUSTA, MAINE $1,560,000
2020 GENERAL OBLIGATION BONDS
Dated: Date of Delivery Due: June 1, as shown below
The City of Augusta, Maine $1,560,000 2020 General Obligation Bonds (the “Bonds”) will be issued as fully-registered securities without coupons and, when issued, will be registered in the name of Cede & Co., as owner of the Bonds and nominee for The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the Bonds. Purchases of the Bonds will be made in book-entry form, in the denomination of $5,000 or any integral multiple thereof. Purchasers will not receive certificates representing their interest in Bonds purchased. See “THE BONDS—Book-Entry-Only System” herein.
Principal of and semi-annual interest on the Bonds will be paid to DTC by the City of Augusta, Maine (the “City”). Interest on the Bonds will be payable on December 1, 2020 and semi-annually on each June 1st and December 1st thereafter until maturity. As long as DTC or its nominee is the owner of the Bonds, such payments will be made directly to such owner of the Bonds. Disbursement of such payments to the DTC Participants is the responsibility of DTC and disbursement of such payments to the Beneficial Owners is the responsibility of the DTC Participants and the Indirect Participants, as more fully described herein.
The Bonds will be issued by the City and, unless paid from other sources, will be payable as to both principal and interest from ad valorem taxes, which are limited as to rate and amount unless certain requirements set forth in 30-A MRSA §5721-A are satisfied, upon all the property within the territorial limits of the City taxable by the City, except to any extent that the City may enter into an agreement under 30-A MRSA §5751 and following to share any portion of its assessed valuation with another municipality and except also to any extent that the City may retain all or any part of the tax increment of a tax increment financing district for the purpose of financing a development program in accordance with 30-A MRSA §5221 and following.
The Bonds are being issued to provide funds to finance acquisition, construction, renovation, reconstruction, improvement and repair of City facilities and equipment. See “THE BONDS—Authorization and Use of Proceeds” herein.
MATURITY SCHEDULE
June 1 Amount Interest
Rate Yield/Price CUSIP June 1 Amount Interest
Rate Yield/Price CUSIP 2021 $130,000 2026 $115,000 2022 125,000 2027 115,000 2023 125,000 2028 85,0002024 125,000 2029 85,0002025 120,000 2030 85,000
$225,000____% Term Bond, due June 1, 2035, to Yield____%, CUSIP_________
$225,000____% Term Bond, due June 1, 2040, to Yield ____%, CUSIP_________
The Bonds are subject to redemption by the City prior to their stated dates of maturity as more fully set forth herein. See “THE BONDS—OPTIONAL REDEMPTION PRIOR TO MATURITY” and “THE BONDS–MANDATORY REDEMPTION” herein.
The Bonds are offered when, as and if issued, subject to the approval of legality by Preti, Flaherty, Beliveau & Pachios, LLP, Augusta, Maine, Bond Counsel to the City. Northeast Municipal Advisors, LLC serves as Municipal Advisor to the City. It is expected that the Bonds, in definitive form, will be available for delivery to the Depository Trust Company in New York, New York, on or about July 24, 2020.
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THIS OFFICIAL STATEMENT IS MADE AVAILABLE TO PROSPECTIVE PURCHASERS OF THE BONDS FOR REVIEW PRIOR TO PURCHASE AND IS IN A FORM DEEMED FINAL BY THE CITY AS OF ITS DATE (EXCEPT FOR PERMITTED OMISSIONS) FOR PURPOSES OF PARAGRAPH (B)(1) OF SECURITIES AND EXCHANGE COMMISSION RULE 15c2-12 (THE “RULE”), BUT IS SUBJECT TO REVISION, AMENDMENT AND COMPLETION (AS SO REVISED, AMENDED OR COMPLETED SUCH DOCUMENT WILL BE REFERRED TO AS THE “FINAL OFFICIAL STATEMENT”). NO DEALER, BROKER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED BY THE CITY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN AS CONTAINED IN THIS OFFICIAL STATEMENT, AND IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CITY. THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF ANY OFFER TO BUY, NOR SHALL THERE BE ANY OFFER, SOLICITATION OR SALE OF THE BONDS BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH OFFER, SOLICITATION OR SALE. THE INFORMATION SET FORTH HEREIN HAS BEEN OBTAINED FROM THE CITY AND OTHER SOURCES THAT ARE BELIEVED BY THE CITY TO BE RELIABLE, BUT AS TO INFORMATION FROM OTHER SOURCES, IS NOT GUARANTEED AS TO ACCURACY OR COMPLETENESS BY THE CITY. THE INFORMATION AND EXPRESSIONS OF OPINION CONTAINED HEREIN ARE SUBJECT TO CHANGE WITHOUT NOTICE, AND NEITHER THE DELIVERY OF THIS OFFICIAL STATEMENT NOR ANY SALE OF THE BONDS 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 IS NOT TO BE CONSTRUED AS A CONTRACT WITH THE PURCHASERS OF THE BONDS. THE INFORMATION RELATING TO THE DEPOSITORY TRUST COMPANY (“DTC”) AND THE BOOK-ENTRY ONLY SYSTEM CONTAINED IN THIS OFFICIAL STATEMENT HAS BEEN FURNISHED BY DTC. NO REPRESENTATION IS MADE BY THE CITY AS TO THE ADEQUACY OR ACCURACY OF SUCH INFORMATION. THE CITY HAS NOT MADE ANY INDEPENDENT INVESTIGATION OF DTC OR THE BOOK-ENTRY ONLY SYSTEM. THE COVER PAGE HEREOF, THIS PAGE AND THE APPENDICES ATTACHED HERETO ARE PART OF THIS OFFICIAL STATEMENT. IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE CITY AND THE TERMS OF THE BONDS, INCLUDING THE MERITS AND RISKS INVOLVED. THE BONDS HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS
Page Page SUMMARY STATEMENT 1 CITY FINANCES 19 CUSIP IDENTIFICATION NUMBERS 2 Budget Process 19 OFFICIAL STATEMENT 3 Capital Improvement Program 20 Investments 20 THE BONDS 4 Undesignated Fund Balance 20 Description of Bonds 4 Financial Statements 21 Optional Redemption Prior to Maturity 4 Comparative Balance Sheets 21 Mandatory Redemption 4 Comparative Statements of Revenues, Expenditures General Provisions Regarding Redemption 5 and Changes in Fund Balances 22 Bond Authorization and Use of Proceeds 6 Property Taxation 23 Opinion of Bond Counsel to the City 6 Largest Taxpayers-FY20 23 Source of Payment of the Bonds 6 Property Tax Levy Limit 24 Tax Matters 7 Tax Base Sharing 24 Book-Entry-Only System 9 Tax Increment Financing 24 Certificate Concerning Official Statement 10 State Aid 25 Rating 10 Legal Matters 10 INDEBTEDNESS 26 Continuing Disclosure 11 Limitations and Exclusions 26 Municipal Advisor 11 Debt Ratios 26 Net Debt Service Component of CITY OF AUGUSTA 12 Operating Expenditures 27 General 12 Existing Principal Payments by Issue 27 Government 12 Projected Debt Service Requirements 28 Principal Municipal Officials 12 Overlapping Debt 29 Coronavirus (COVID-19) Disclosure 13 Municipal Services 13 RETIREMENT 29 Public Education 14 Maine Public Employees Retirement System 29 Labor Relations 15 Deferred Compensation 29 University of Maine at Augusta 15 Largest Public Employers 15 OTHER POST-EMPLOYMENT BENEFITS 29 Largest Private Employers 16 Building Activity 16 ENVIRONMENTAL MATTERS 30 Retail Sales 17 Economic Characteristics 17 LITIGATION 30
APPENDIX A: JUNE 30, 2019 ANNUAL AUDITED FINANCIAL REPORT APPENDIX B: PROPOSED FORM OF LEGAL OPINION APPENDIX C: PROPOSED FORM OF CONTINUING DISCLOSURE AGREEMENT
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SUMMARY STATEMENT The information set forth below is qualified in its entirety by the information and financial statements appearing elsewhere in the Official Statement. Date of Sale: July 9, 2020 11:00 a.m. (Eastern Daylight Saving Time) Issuer: City of Augusta, Maine Issue: $1,560,000 2020 General Obligation Bonds Dated Date of the Bonds: Date of Delivery Principal Due: June 1, 2021-2030 serial bonds and June 1, 2035 and June 1, 2040 term bonds Interest Due: Each June 1 and December 1 until maturity, commencing December 1, 2020 Purpose: The Bonds will be used to finance various capital improvements and expenditures. Redemption: The Bonds are subject to redemption prior to maturity. See “THE BONDS – OPTIONAL
REDEMPTION PRIOR TO MATURITY” herein. Security: The Bonds will be valid general obligations of the City of Augusta, Maine, and the principal of
and interest on the Bonds are payable from taxes which may be levied upon all taxable property in the City subject to certain exceptions described herein.
Credit Rating: S&P Global Ratings: AA (Stable Outlook) Basis of Award: Lowest True Interest Cost (“TIC”), as of the date of delivery. Tax Exemption: See "THE BONDS - Tax Matters" herein and Appendix B, "Proposed Form of Legal Opinion". Continuing Disclosure: See "THE BONDS - Continuing Disclosure" herein. Bank Qualification: The Bonds WILL BE designated as "qualified tax-exempt obligations" for purposes of Section
265(b)(3) of the United States Internal Revenue Code of 1986, as amended. Legal Opinion: Preti, Flaherty, Beliveau & Pachios, LLP, Augusta, Maine Municipal Advisor: Northeast Municipal Advisors, LLC, Portland, Maine Paying Agent: City of Augusta, 16 Cony Street, Augusta, Maine Delivery and Payment: Delivery of the Bonds in book-entry only form will be made to DTC on or about July 24, 2020,
against payment in Federal Funds. Issuer Officials: Questions concerning the Official Statement should be addressed to: Mr. Raphael St. Pierre,
Assistant City Manager, City of Augusta, Maine, Tel: (207) 626-2300 or Mr. Richard Ranaghan, Municipal Advisor, Northeast Municipal Advisors, LLC, Tel: (207) 797-6681.
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CITY OF AUGUSTA, MAINE $1,560,000 2020 GENERAL OBLIGATION BONDS
CUSIP IDENTIFICATION NUMBERS
Due June 1,
CUSIP
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2035 2040
CUSIP numbers have been assigned by an independent company not affiliated with the City and are included on this page solely for the convenience of the owners of the Bonds. The City makes no representation with respect to the accuracy of such CUSIP numbers as indicated in the above table and does not undertake any responsibility for the selection of the CUSIP numbers or their accuracy now or at any time in the future.
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OFFICIAL STATEMENT
of the
CITY OF AUGUSTA, MAINE
Relating to
$1,560,000
2020 GENERAL OBLIGATION BONDS
This Official Statement is provided for the purpose of presenting certain information relating to the City of Augusta, Maine (the “City” or “Augusta”) in connection with the issuance by the City of its $1,560,000 2020 General Obligation Bonds (the “Bonds”).
This Official Statement is not to be construed as a contract or agreement between the City and the purchasers or holders of the Bonds. Any statements made in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended merely as opinion and not as representations of fact. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof.
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THE BONDS
DESCRIPTION OF THE BONDS
The Bonds will be issued only as fully-registered bonds without coupons, one certificate per maturity and, when issued, will be registered in the name of Cede & Co., nominee for The Depository Trust Company, New York, New York (“DTC” as described in “THE BONDS - Book-Entry-Only System” herein). DTC will act as the securities depository for the Bonds. Purchases of the Bonds will be made in book-entry form, in the denomination of $5,000 or any integral multiple thereof. Purchasers will not receive certificates representing their interest in Bonds purchased.
The Bonds will be dated the date of their delivery and will bear interest, payable on December 1, 2020, and semi-annually thereafter on June 1 and December 1 of each year until maturity. The Bonds will mature annually as follows:
June 1, Amount June 1, Amount 2021 $130,000 2026 $115,000 2022 125,000 2027 115,0002023 125,000 2028 85,0002024 125,000 2029 85,0002025 120,000 2030 85,000
$225,000____% Term Bond, due June 1, 2035, to Yield____%
$225,000____% Term Bond, due June 1, 2040, to Yield ____%
It is expected that the Bonds will be available for delivery on or about July 24, 2020.
Principal of and interest on the Bonds will be payable by the City in Clearing House Funds to DTC, or its nominee, as registered owner of the Bonds. Transfer of principal and interest payments to Participants (as defined below) will be the responsibility of DTC. Transfer of principal and interest payments to Beneficial Owners (as defined below) will be the responsibility of such Participants and other nominees of Beneficial Owners. The City will not be responsible or liable for maintaining, supervising or reviewing the records maintained by DTC, its Participants or persons acting through such Participants.
OPTIONAL REDEMPTION PRIOR TO MATURITY
Bonds maturing on or before June 1, 2030 are not subject to optional redemption prior to their stated dates of maturity. Bonds maturing after June 1, 2030 are subject to redemption prior to their stated dates of maturity, at the option of the City, on or after June 1, 2030, as a whole or in part at any time, in such order of maturity as the City, in its discretion, may determine at the redemption price (expressed as a percentage of the principal of the Bonds to be redeemed) set forth in the following table, together with interest accrued and unpaid to the redemption date:
Redemption Period Redemption Price June 1, 2030 and thereafter 100%
MANDATORY REDEMPTION
Bonds maturing in 2035 and 2040 are subject to mandatory redemption, plus accrued interest to the date of redemption thereof, on June 1 in the following years and principal amounts:
Due June 1, 2035 Due June 1, 2040 2030 $45,000 2035 $45,000 2031 45,000 2036 45,0002032 45,000 2037 45,0002033 45,000 2038 45,0002034 45,000 2039 45,000
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GENERAL PROVISIONS REGARDING REDEMPTION Notice of Redemption For so long as DTC or its nominee is the holder of the Bonds, notice of redemption at the option of the City will be given by the City by sending a copy of such notice by registered or certified first-class, postage prepaid mail at least thirty (30) days prior to the redemption date to the registered owner of each Bond, or portion thereof, to be redeemed, to the address shown on the registration books kept by the City as of the close of business of the City on the fifteenth day prior to the mailing of notice. Notice having been given in the manner described, the Bond or Bonds called for redemption will become due and payable on the redemption date designated and the Bonds to be redeemed will not be deemed to be outstanding and will cease to bear interest from and after such redemption date. Upon presentation of a Bond or Bonds to be redeemed at the office of the City, the City will pay the Bond or Bonds called for redemption with funds of the City. Any notice mailed shall be conclusively presumed to have been duly given, whether or not the bondholder actually receives such notice. The failure of the City to give notice to a bondholder or any defect in such notice shall not affect the validity of the redemption of any Bond of any other owner. Each notice of redemption shall specify the date fixed for redemption, the place or places of payment, that payment will be made upon presentation and surrender of the Bonds to be redeemed, that interest, if any, accrued to the date fixed for redemption will be paid as specified in such notice, and that on and after said date interest thereon will cease to accrue. If less than all the Bonds outstanding are to be redeemed, the notice of redemption shall specify the numbers of the Bonds or portions thereof (in denominations of $5,000 or any integral multiple thereof). DTC or its nominee (see "THE BONDS - BOOK-ENTRY-ONLY SYSTEM" herein) as bondholder will be responsible for notifying its Direct and Indirect Participants who in turn will be responsible for notifying the Beneficial Owners of such Bonds. Any failure on the part of DTC or its nominee, or failure on the part of a nominee of a Beneficial Owner (having received notice from the City, a Direct or Indirect Participant or otherwise) to notify the Beneficial Owner so affected, shall not affect the validity of the redemption of such Bond. Bonds Due and Payable on Redemption Date; Interest Ceases to Accrue On any redemption date, the principal amount of each Bond to be redeemed, together with the premium, if any, and accrued interest thereon to such date, shall become due and payable. Funds shall be deposited by the City with DTC to apply such funds to the payment of the Bonds called for redemption, together with accrued interest thereon to the redemption date. From and after such redemption date, no further interest shall accrue on any of such Bonds and the Bonds to be redeemed (whether or not surrendered) shall not be outstanding. Cancellation On such redemption date, all Bonds that have been called for redemption shall be canceled by the City and a notation of such cancellation shall be made by the City in its records with respect to the Bonds. Partial Redemption of Bonds Bonds to be redeemed in part shall be selected by DTC in accordance with its customary procedures. Record Date; Payment The principal of the Bonds is payable upon surrender thereof at the principal office of the City. Payment of the interest on the Bonds will be made to the person appearing as the registered owner thereof on the registration books to be kept by the City at the close of business on the fifteenth day of the month preceding each interest payment date for the Bonds, and if such day is not a regular business day of the City, then on the next day preceding such fifteenth day which is a regular business day of the City, by check, wire or draft mailed to each registered owner at such person's address as it appears on the registration books, or at another address which may be furnished to the City in writing by the holder of the Bonds. Interest which is not timely paid or provided for shall cease to be payable to the registered owner as of the regular record date and shall be payable to the registered owner at the close of business on a special record date to be fixed by the City.
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BOND AUTHORIZATION AND USE OF PROCEEDS The Bonds are being issued pursuant to (1) Order 19-125 approved by the City Council at a meeting held on August 22, 2019; (2) Orders 19-126 and 19-127 approved by the City Council on August 22, 2019 and approved by a majority of the City’s voters on November 5, 2019 . The Bonds are being issued to provide funds to finance acquisition, construction, renovation, reconstruction, improvement and repair of City facilities and equipment as more fully described below:
Amount Authorized But
Unissued
Amount of this Issue
Order
No.
Purpose
$432,000 $432,000 19-125 Reconstruction, renovation, repair and improvement of City facilities located throughout the City
318,000
215,000
920,000 $1,885,000
318,000
215,000
595,000
$1,560,000
19-125 19-126 19-127
Reconstruction, renovation, repair and improvement of streets, sidewalks and related facilities (other than streets, sidewalks and related facilities) throughout the City Acquisition of fire safety and medical services apparatus and equipment Reconstruction, renovation, repair and improvement of streets, sidewalks and related facilities throughout the City
OPINION OF BOND COUNSEL TO THE CITY
Upon issuance and delivery of the Bonds, an opinion with respect to the Bonds will be rendered by Preti, Flaherty, Beliveau & Pachios, LLP, Augusta, Maine, bond counsel (“Bond Counsel”) to the City in substantially the form which is set forth in Appendix B hereto and which has been provided by Bond Counsel to the City. Bond Counsel to the City is not passing upon and does not assume any responsibility for the accurancy or adequacy of the statements made in this Official Statement and expresses, and will express, no opinion, advice or representation to any person with respect to any statement made in this Official Statement.
SOURCE OF PAYMENT OF THE BONDS The Bonds are general obligations of the City and their payment is not limited to a particular fund or revenue source. The City has power to levy ad valorem property taxes, which are limited as to rate and amount unless certain requirements set forth in 30-A MRSA §5721-A are satisfied, upon all the property within the territorial limits of the City taxable by the City, except to any extent that the City may enter into an agreement under 30-A MRSA §5751 and following, as amended, to share a portion of its assessed valuation with another municipality and except to the extent that the City has established, or may establish, municipal development districts as tax increment financing districts pursuant to 30-A MRSA §5221 and following, as amended, the captured tax increment of which may not be available for payment of debt service on the Bonds. As more fully described under “CITY FINANCES – Tax Increment Financing” herein, the City has established certain municipal development districts and elected to retain the tax increment on the captured assessed value of the property in these districts to provide financial assistance for certain eligible projects within these districts. Within the limits established by statute, the City has the right to designate additional municipal development districts pursuant to 30-A MRSA §5221 and following, as amended. There is no statutory provision for a lien on any portion of the tax levy to secure bonds or notes, or judgments thereon, in priority to other claims.
The City is subject to suit on the Bonds. A Maine statute provides that executions against a municipality shall be issued against certain personal property of the inhabitants of that municipality. The Maine Supreme Judicial Court has held that real estate belonging to a municipality may be attached on a writ against the municipality, under some conditions, as when it is not exempted by statute, and when it is not used by the municipality in the performance of its public functions. Another Maine statute provides that the personal property of the residents and the real estate within the boundaries of a
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municipality may be taken to pay any debt due from the municipality. There has been no judicial determination whether either the statutorily authorized taking of property to satisfy a debt of a municipality or the statutorily authorized execution against a municipality by issuance against certain personal property of the inhabitants of that municipality is constitutional under current due process and equal protection standards. Funds to meet City expenses, including debt service, are not included in the tax levy to the extent they are expected to be met with other non-tax revenues. Amounts necessary to repay sums borrowed temporarily in anticipation of bonds or grants are similarly excluded because they would normally be expected to be paid from the anticipated bond proceeds or grants.
Enforcement of a claim for payment of principal of, premium if any, or interest on bonds or notes is subject to federal bankruptcy law, to the extent, if any, applicable to the City and to United States of America or the State of Maine (the “State”) statutes, if any, now in effect or hereafter enacted, extending the time for payment or imposing other constraints upon enforcement insofar as the same may be constitutionally applied.
Payment of the principal of or interest on the Bonds is not guaranteed by the State of Maine.
TAX MATTERS
Exclusion of Interest on the Bonds from Gross Income for Federal Tax Purposes The United States Internal Revenue Code of 1986, as amended (the “Code”), imposes certain requirements that must be met on a continuing basis subsequent to the issuance of the Bonds in order to assure that interest on the Bonds will be excluded from gross income for federal income tax purposes pursuant to section 103 of the Code. Failure of the City to comply with such requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes, retroactive to the date of issuance of the Bonds. The City will covenant to comply with the provisions of the Code applicable to the Bonds and will covenant not to take any action or permit any action that would cause the interest on the Bonds to be included in gross income pursuant to section 103 of the Code or that would cause interest on the Bonds to be an item of tax preference pursuant to section 57 of the Code. Assuming that the City observes its covenants with respect to compliance with the Code, Bond Counsel to the City is of the opinion that, under existing law, interest on the Bonds is excluded from the gross income of the owners of the Bonds for federal income tax purposes pursuant to section 103 of the Code and interest on the Bonds is not an item of tax preference pursuant to section 57 of the Code for purposes of computing alternative minimum tax. Exemption of Interest on the Bonds from Taxation Within the State of Maine In the opinion of Bond Counsel to the City, interest on the Bonds is exempt from taxation within the State of Maine pursuant to 30-A MRSA §5772(9). Designation of Bonds as Qualified Tax-Exempt Obligations The City will designate the Bonds as “qualified tax-exempt obligations” for purposes of section 265(b)(3) of the Code. Original Issue Discount on the Bonds
Certain maturities of the Bonds (the “Discount Bonds”) may be sold at an initial offering price less than the principal amount payable on the Discount Bonds at the stated maturity. The difference between the initial public offering price at which a substantial amount of each of the Discount Bonds is sold and the stated principal amount payable at maturity (excluding certain “qualified stated interest” that is unconditionally payable at least annually at prescribed rates) of each of the Discount Bonds constitutes original issue discount. Bond Counsel to the City is of the opinion that the appropriate portion of the original issue discount allocable to the original and each subsequent owner of the Discount Bonds will be treated for federal income tax purposes as interest not includable in gross income pursuant to section 103 of the Code to the same extent as stated interest on the Discount Bonds. Pursuant to section 1288 of the Code, original issue discount on the Discount Bonds accrues on the basis of economic accrual. The basis of an initial purchaser of a Discount Bond acquired at the initial public offering price of the Discount Bond will be increased by the amount of such accrued
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discount. Prospective purchasers of the Discount Bonds should consult their tax advisors with respect to the determination for federal income tax purposes of the original issue discount properly accruable with respect to the Discount Bonds and the tax accounting treatment of accrued interest.
Original Issue Premium with Respect to the Bonds
Certain maturities of the Bonds (the “Premium Bonds”) may be sold at an initial offering price in excess of the amount payable at the stated maturity date (excluding certain qualified stated interest that is unconditionally payable at least annually at prescribed rates). The excess, if any, of the tax basis of the Premium Bonds to a purchaser (other than a purchaser who holds such Premium Bonds as inventory, stock in trade or for sale to customers in the ordinary course of business) over the amount payable at the stated maturity (excluding certain qualified stated interest that is unconditionally payable at least annually at prescribed rates) is amortizable bond premium, which is not deductible from gross income for federal income tax purposes. Amortizable bond premium, as it amortizes, will reduce the owner’s tax cost of the Premium Bonds used to determine, for federal income tax purposes, the amount of gain or loss upon the sale, redemption at maturity or other disposition of the Premium Bonds. Accordingly, an owner of a Premium Bond may have taxable gain from the disposition of the Premium Bond, even though the Premium Bond is sold, or disposed of, for a price equal to the owner’s original cost of acquiring the Premium Bond. Bond premium amortizes over the term of the Premium Bonds under the “constant yield method” described in regulations interpreting section 1272 of the Code. Prospective purchasers of the Premium Bonds should consult their tax advisors with respect to the calculation of the amount of bond premium which will be treated for federal income tax purposes as having amortized for any taxable year (or portion thereof) of the owner and with respect to other federal, state and local tax consequences of owning and disposing of the Premium Bonds.
Additional Federal Income Tax Consequences with Respect to the Bonds Prospective purchasers of the Bonds should be aware that ownership of, accrual or receipt of interest on or disposition of tax-exempt obligations, such as the Bonds, may have additional federal income tax consequences for certain taxpayers, including, without limitation, taxpayers eligible for the earned income credit, recipients of certain Social Security and certain Railroad Retirement benefits, taxpayers that may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations, financial institutions, property and casualty insurance companies, foreign corporations and certain S corporations. Prospective purchasers of the Bonds should consult their tax advisors with respect to the need to furnish certain taxpayer information in order to avoid backup withholding. The United States Internal Revenue Service (the “Service”) has an ongoing program of auditing state and local government obligations, which may include randomly selecting bond issues for audit, to determine whether interest paid to the holders is properly excludable from gross income for federal income tax purposes. It cannot be predicted whether the Bonds will be audited. If an audit is commenced, under current Service procedures holders of the Bonds may not be permitted to participate in the audit process and the value and liquidity of the Bonds may be adversely affected.
Changes in Federal Tax Law Affecting Tax-Exempt Bonds
Federal, state or local legislation, administrative pronouncements or court decisions may affect the tax-exempt status of interest on the Bonds, gain from the sale or other disposition of the Bonds, the market value of the Bonds or the marketability of the Bonds. For example, from time to time, the President of the United States has submitted proposals to Congress for legislation that would, among other things, limit the value of tax-exempt interest for higher-income taxpayers. No prediction can be made as to the ultimate outcome of any such legislative proposal. If enacted into law, any such proposal (or any other proposal involving a piecemeal or comprehensive review of the provisions of the Code, including provisions affecting the federal tax treatment of interest on tax-exempt bonds, that Congress might consider) could affect the exclusion from gross income of interest on, or the market price or marketability of, tax-exempt bonds (including the Bonds). Prospective purchasers of the Bonds should consult their tax and financial advisors regarding such matters. Extent of Opinion
Bond Counsel to the City expresses no opinion regarding any tax consequences of holding the Bonds other than its opinion with regard to (a) the exclusion of interest on the Bonds from gross income pursuant to section 103 of the Code, (b) interest on the Bonds not constituting an item of tax preference pursuant to section 57 of the Code and (c) the
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exemption of interest on the Bonds from taxation within the State pursuant to 30-A MRSA §5772(9). Prospective purchasers of the Bonds should consult their tax advisors with respect to all other tax consequences (including but not limited to those described above) of holding the Bonds. BOOK-ENTRY-ONLY SYSTEM The Depository Trust Company (“DTC”) New York, NY, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC.
DTC, the world’s largest depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.
Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each of the Bonds (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of the Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners.
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Redemption notices shall be sent to DTC. If less than all of a maturity of the Bonds is being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an omnibus proxy to the Issuer as soon as possible after the record date. The omnibus proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the omnibus proxy).
Principal, redemption and interest payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Issuer on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Issuer, and disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the Issuer. Under such circumstances, in the event that a successor depository is not obtained, Bonds certificates will be printed and delivered.
The Issuer may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered.
The information in this section concerning DTC and the Book-Entry-Only System has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof.
CERTIFICATE CONCERNING THE OFFICIAL STATEMENT
On the date of delivery of the Bonds, the City will deliver a certificate of the City Manager or his designee (an “Authorized Representative”) to the effect that, to the best of his knowledge and belief, as of the date of sale of the Bonds and as of the date of delivery of the Bonds, this Official Statement (excluding (a) the prices or yields of the Bonds, (b) the information pertaining to DTC and (c) the information set forth under the caption "THE BONDS – Financial Advisor") did not and does not contain any untrue statement of a material fact and did not and does not omit to state a material fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading. RATING The Bonds are rated AA (Stable Outlook) by S&P Global Ratings (“S&P”). The City has furnished S&P certain information and materials, some of which may not have been included in this Official Statement. The rating only reflects the view of S&P at the time the rating is assigned and is subject to revision or withdrawal, which could affect the market price of the Bonds. S&P should be contacted directly for their explanation of the rating. LEGAL MATTERS All legal matters incidental to the authorization, issuance, sale and delivery of the Bonds are subject to the approval of Bond Counsel to the City and, upon issuance and delivery of the Bonds, the approving opinion of Bond Counsel to the City will be delivered with the Bonds in substantially the form attached hereto as APPENDIX B.
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CONTINUING DISCLOSURE In order to assist an underwriter of the Bonds in complying with Rule 15c2-12(b)(5) promulgated by the Securities and Exchange Commission (the "Rule"), the City will covenant for the benefit of owners of the Bonds to provide certain financial information and operating data relating to the City by not later than 270 days after the end of each fiscal year commencing with the fiscal year ending June 30, 2021 (the "Annual Report"), to provide annual audited financial statements when publicly available, to provide notices of the occurrence of certain enumerated events and to provide notice of failure to provide the Annual Report. The covenants will be contained in a Continuing Disclosure Agreement, the proposed form of which is included in Appendix C hereto. On March 7, 2013, the City Council approved an administrative policy, which has been updated, and is intended to provide for the timely and accurate submission of certain financial and operating data, annual audited financial statements and the notices of the occurrence of certain enumerated events as set forth in the Continuing Disclosure Agreement, the proposed form of which is included as Appendix C hereto. To the best of its knowledge, in the previous five years, the City has complied in all material respects with all previous undertakings in a written contract or agreement specified in paragraph (b)(5)(i) of the Rule to provide annual financial information, annual audited financial statements and notices of material events, except as follows: Changes in Ratings of Bond Insurers: The City’s 2003 Bonds were insured by Financial Guaranty Insurance Company and its 2004 Bonds and 2006 Bonds were insured by Syncora Guarantee Inc. (formerly XL Capital Assurance). Over the past several years the numerous changes in the ratings of these bond insurers were not the subject of filings by the City. The City has disclosed these rating changes and has submitted a Notice of Late Filing with the MSRB associated with this information. MUNICIPAL ADVISOR Northeast Municipal Advisors, LLC (“NEMA”) serves as Municipal Advisor to the City. NEMA assisted the City in the preparation of this Official Statement and other matters relating to the planning, structuring and issuance of the Bonds, and provided other advice pursuant to the Municipal Securities Rulemaking Board Rules G-23 and G-42. NEMA will not submit a bid for, or participate in any underwriting of, the Bonds.
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CITY OF AUGUSTA, MAINE GENERAL
The City of Augusta was first incorporated as the Town of Harrington, then changed its name to Augusta on June 9, 1797. In 1827, the City was designated the capital of Maine, which had entered the union in 1820. Augusta was chartered as a city in 1849. The City of Augusta is a suburban community with a vibrant commercial riverfront along the Kennebec River that is supported by a strong government employment presence. The land area of Augusta encompasses 36,707 acres or 57.35 square miles, supporting a population of 18,635 residents. The Augusta downtown is located along the Kennebec River and remains a vital commercial employment and tourist area. The City of Augusta is about 30 miles from the Maine coast and 50 miles from Portland, the largest population center in Maine. As the seat of State government, the City employment base is anchored by a large State government workforce. The City is also the seat of government for Kennebec County (the “County”). The City serves as the region’s leading industrial, commercial, retail, educational and cultural center.
The Wabanaki Indians were present in the area when the first English explorers from the Sagadahoc or Popham Colony visited the area in 1607. In 1628, Plymouth settlers built a trading post to support agricultural and fur trade along the Kennebec River. The Plymouth Company supported the trading operations until it was abandoned around 1676. After years of conflict involving the French, Indians, and English, the Kennebec Proprietors, successors to the Plymouth Company, erected Fort Western along the Kennebec River. Fort Western is located next to the Augusta City Hall and remains as a historic museum. GOVERNMENT The City operates under a charter initially adopted in 1959, as amended (the “Charter”), providing for a Mayor-Council form of government with an eight-member City Council with four elected by ward and four elected at-large with the Mayor elected by the voters of the entire City. The City Council members are elected for three-years in staggered terms. The Charter grants to the City Council all powers to enact, amend, or repeal rules, ordinances and resolutions relating to the City’s property, affairs and government, to preserve the public peace, health and safety, to establish personnel policies and giving effect to any vote of the City and to authorize the issuance of debt. Through its Charter, the City Council adopts an annual budget and provides for an annual audit. The elected School Board appoints the school superintendent and controls school policy. The City Manager is appointed by the City Council and is the administrative head of the City. The City Manager is responsible to the City Council for the administrative management of all departments of the City. PRINCIPAL MUNICIPAL OFFICIALS
Name Title Term Expires David M. Rollins Mayor 12/31/21 Linda J. Conti Councilor, Ward 1 12/31/20 Kevin Judkins Councilor, Ward 2 12/31/21 Michael Michaud Councilor, Ward 3 12/31/22 Eric Lind Councilor, Ward 4 12/31/20 Darek Grant Councilor, At-Large 12/31/20 Raegan LaRochelle Councilor, At-Large 12/31/22 Heather Pouliot Councilor, At-Large 12/31/22 Marci Alexander Councilor, At-Large 12/31/21 William Bridgeo City Manager Three-year contract expiring 6/30/22 Raphael St. Pierre Assistant City Manager Indefinite Tracy Roy Deputy Finance Director Indefinite
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CORONAVIRUS (COVID-19) DISCLOSURE On March 15, 2020, the Governor of the Stare of Maine declared a Civil State of Emergency due to the outbreak of COVID-19. The Governor subsequently issued a number of executive orders imposing rules and regulations in response to the health and safety risks of the virus. On March 16, 2020, the City closed all public facilities to the public with the exception of the Hatch Hill Regional Solid Waste Landfill. The City re-opened public facilities on June 1, 2020 following the Governor’s executive orders and guidance for re-opening businesses. The City redeployed ten employees to the Park & Cemeteries Bureau in lieu of hiring seasonal employees. The City laid off five Civic Center employees and defunded two positions for the remained of fiscal years 2021 and 2022. The Augusta Civic Center (the “Civic Center”) held its last event on March 15, 2020, with the exception of holding blood drives. As of June 1, Civic Center is hosting live public meetings for less than 50 people. There are currently eleven booked events scheduled for fiscal year 2021. The City expects to end fiscal year 2020, with a budgetary surplus of approximately $1,280,000. The City will assign approximately $275,000 to cover the projected deficit in the Augusta Civic Center Enterprise Unrestricted net position for fiscal year 2020. The City Manager’s proposed fiscal year 2021 budget anticipates a reduction in intergovernmental revenues from the State of Maine for municipal revenue sharing, and local road assistance program, investment income and motor vehicle excise taxes. The proposed budget contains eight furlough days for all non-public safety uniformed employees and dispatchers. The furlough days savings will offset the cost of living adjustments contained in union contracts. The COVID-19 outbreak has affected and is expected to continue to affect the overall economy of the nation as well as the State and its various governmental units, including the City. Although the ultimate impact and cost to the State and local economies cannot be determined at this time, the outbreak may have an adverse impact on a governmental unit’s financial condition. MUNICIPAL SERVICES The City provides general governmental services for the territory within its boundaries, including police and fire protection, construction and maintenance of highways, streets and sidewalks, parks, recreation, health and social services, planning and zoning and general administrative services. Public education is provided for grades Kindergarten (“K”) through 12 and for applied technology education. The Police Department operates from the Public Safety Building with a staff of consisting of a Chief, a Deputy Chief, two (2) Lieutenants, two (2) Staff Sergeants, six (6) Sergeants and thirty-two (32) Patrol Officers. The patrol officers are assigned as follows: twenty-two (22) Patrol Division and ten (10) Support Services Division. The Police Department remaining positions are nine (9) Dispatchers, three (3) Reserve Dispatchers, one and one-half (1.5) Parking Enforcement Officers, one (1) Administrative Assistant, one (1) Secretary, one and one-half (1.5) Clerks and one (1) Animal Control Officer. The Augusta Fire Department is comprised of a Chief, a Deputy Chief, one (1) Administrative Assistant, one (1) Mechanic, four (4) Battalion Chiefs, four (4) Lieutenants and thirty-eight (38) full time firefighters and paramedics which are housed in four (4) stations. It is a full-service department that provides not only the obvious function of fire suppression, but is also charged with numerous other prevention and protection tasks. These tasks include emergency medical response including inter-facility transfer; public information; fire safety inspections; public education; fire training; disaster management; water, extrication and rope rescue service; fire alarm; communications; and facility, apparatus and equipment maintenance. The City’s emergency medical services are also provided to the surrounding communities of Hallowell and Chelsea by contract. The Public Works Department consists of the Central Garage, Street Maintenance Bureau, Solid Waste Bureau and the City Engineer. Central Garage is responsible for the maintenance of approximately 120 pieces of Public Works equipment and the equipment of the Solid Waste Bureau and the Parks and Cemetery Department. The Street Bureau
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maintains 150 miles of City streets and 200 miles of sidewalks, including repairs, snow removal and weekly curbside collection of domestic refuse and monthly curbside recycling collections. The Solid Waste Bureau operates the Hatch Hill landfill site and annually processes about 36,000 tons of waste. Fees are charged based upon the type of material and associated tipping fees. The City Engineer is responsible for managing and overseeing the design of City road projects and as applicable including providing technical support to the Planning Board. The Greater Augusta Utility District (the “District”) provides water and wastewater service to the City’s inhabitants. The District was formed in 2007 through an act of the State Legislature that combined the then Augusta Water District and the Augusta Sanitary District while also expanding the wastewater operations and service to the City of Hallowell. The Board of Governance consists of seven voting members, six are from Augusta and are appointed by the Mayor of Augusta and one is from Hallowell and is appointed by the Mayor of Hallowell. There are an additional two non-voting members, one each appointed from the City of Augusta and the City of Hallowell. PUBLIC EDUCATION
The City operates its educational program for grades Pre-K through 12 and career technical education under its own supervision. The City’s school’s staff consists of a Superintendent, Assistant Superintendent, five full-time principals, one Capital Area Technical Center Director, one Adult Education Director and a total of 538 full and/or part time staff including substitutes, coaches and Adult Education teachers. The following table reflects April 1, 2020 enrollments: Estimated Current School Grades Capacity Enrollment Farrington Elementary K-6 470 303 Gilbert Elementary PreK-6 440 360 Hussey Elementary PreK-6 275 281 Lincoln Elementary K-6 310 297 Cony Complex 7-12 1,300 946 2,795 2,187
_____________________ Source: Augusta School Department The following table shows the trend of the City’s school enrollments: ------Grades----- Total April 1, K -1- -2- -3- -4- -5- -6- -7- -8- -9- -10- -11- -12- Other Enrollment 2019 174 176 170 161 152 156 169 154 144 166 173 142 167 83 2,187 2018 177 166 171 164 162 184 165 149 162 184 152 176 161 86 2,259 2017 168 174 168 174 180 166 150 167 160 157 177 171 130 95 2,237 2016 165 169 169 187 160 148 168 161 137 176 180 146 156 94 2,216 2015 175 168 191 164 150 166 161 154 146 195 153 166 177 93 2,259 2014 176 179 174 149 158 159 141 147 154 158 170 181 183 89 2,218 2013 198 185 163 167 159 147 155 143 129 171 192 185 192 92 2,278 2012 204 169 160 165 145 160 146 140 152 191 191 183 222 97 2,325 2011 175 164 163 149 155 151 140 141 129 180 194 219 201 62 2,227 2010 168 173 152 161 156 150 140 131 145 193 237 205 229 79 2,319 _____________________ Source: State of Maine, Department of Education, “April 1 Census of Students Educated at Public Expense”. Note: “Other” includes: Elementary Special, Pre-Kindergarten, Secondary Special and Post-Graduate Students.
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LABOR RELATIONS The City employs approximately 253 full and part-time employees. The School Department employs approximately 411 full and part-time personnel covered by collective bargaining agreements. City employees not included in the below table are not represented by unions. The contracts for the various bargaining units who are represented by a union are effective and expire are shown in the table below:
Bargaining Unit Union(1) Covered
Employees Contract
Effective Date Contract Expiration
Date Police/Dispatch Teamsters (#340) 9 7/1/19 6/30/22 Police/Patrol Fraternal Order of Police 35 7/1/19 6/30/22 Police Supervisory Unit Fraternal Order of Police 10 7/1/19 6/30/22 General Gov’t. Employees Teamsters (#340) 40 7/1/19 6/30/22 Public Works AFSCME (#1458) 44 7/1/19 6/30/22 Fire Dept.(2) IAFF (#1650) 44 7/1/17 6/30/19 Fire Dept. – Battalion Chief IAFF 4 7/1/18 6/30/21 Civic Center Operations Teamsters (#340) 4 7/1/19 6/30/22 Administration AAA 13 7/1/19 6/30/22 Teachers AEA/MEA 202 9/1/19 8/31/22 Support Staff AEA/MEA 123 9/1/17 8/31/20 School Custodians AEA/MEA 22 9/1/17 8/31/20 _____________________ Note: (1)“AFSCME” indicates the American Federation of State, County and Municipal Employees, affiliated with the American
Federation of Labor & Congress of Industrial Organizations (“AFL-CIO”); “IAFF” indicates the International Association of Fire Fighters; “AAA” indicates the Augusta Administration Association; “MEA” indicates the Maine Education Association of which the various components of the Augusta Educational Association (“AEA”) are affiliated, as separate bargaining units and “Teamsters” indicates the International Brotherhood of Teamsters.
(2) The City is currently in negotiations with Fire Privates and Lieutenants. UNIVERSITY OF MAINE AT AUGUSTA With approximately 5,000 full and part-time students the University of Maine at Augusta (“UMA”) is the third largest university in the University of Maine System. UMA offers programs in Mental Health and Human Services, Liberal Arts, Business Administration, Criminal Justice, and Computer Information Systems at the Certificate, Associate and Bachelor degree levels. LARGEST PUBLIC EMPLOYERS As the capital of Maine, public employers are an important mix of the employment base. In addition to the specific public employers listed below there are hundreds of Federal employees spread amongst various agencies. Name Business Number of Employees State of Maine Government 5,575 City of Augusta Municipal/School 662 University of Maine at Augusta Education 413 Kennebec County County Government 171 _____________________ Source: State of Maine, Department of Labor and City of Augusta
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LARGEST PRIVATE EMPLOYERS The following table lists the largest private employers in the City of Augusta: Name Business Number of Employees Maine General Health Hospital 3,243 Central Maine Power Utility 471 Hannaford Brothers Grocery Store 393 NRF Distributors Distribution Services 322 Wal-Mart Department Store 305 PFG-North Center Wholesale Food Products 275 Charlies Motor Mall Auto Dealership 250 O’Connor GMC Buick Auto Dealership 200 Target Retail Clothing 163 Lowes J.S. McCarthy Printers
Hardware/Building Supply Printing Services
144 140
Home Depot Hardware/Building Supply 135 _____________________ Source: City of Augusta BUILDING ACTIVITY The following table lists the number and estimated construction value of building permits issued by the City for the most recent ten years:
Year Ended December 31,
Number of Commercial
Permits
Estimated Cost of Construction for
Commercial
Number of Residential
Permits
Estimated Cost of Construction for
Residential 2019 185 $100,005,914 194 $7,166,911 2018 200 27,724,566 223 6,358,433 2017 168 32,229,715 193 6,481,230 2016 190 35,744,096 181 5,150,962 2015 152 73,520,267 163 5,711,996 2014 174 45,080,252 194 3,434,686 2013 160 16,176,215 182 3,267,484 2012 182 11,385,214 172 13,336,124 2011 150 229,121,263 171 14,701,330 2010 149 18,954,600 194 2,915,692
_____________________ Source: City of Augusta
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RETAIL SALES
Retail Sales by Product Group and Consumer Sales ($000) Business/ Building Food General Other Auto/ Restaurant/ Group Consumer
Year Operating Supply Store Mdse. Retail Transp. Lodging Total Sales 2010 37,861 74,181 45,630 213,022 54,389 187,684 80,980 693,747 655,886 2011 39,779 74,888 46,688 207,167 56,135 201,347 80,696 706,700 666,921 2012 34,006 74,324 47,445 209,843 57,483 207,866 87,655 718,622 684,616 2013 29,663 82,230 47,715 200,676 59,313 221,142 88,588 729,327 699,664 2014 34,958 82,521 48,888 197,859 60,396 227,569 89,788 741,891 706,933 2015 32,870 81,991 50,659 201,380 62,417 260,686 105,746 795,749 762,879 2016 30,333 87,676 63,401 214,146 66,488 258,293 102,087 821,424 791,091 2017 25,395 92,291 58,819 211,564 65,608 276,677 105,011 835,363 809,867 2018 28,527 96,738 62,279 214,711 64,220 293,074 108,647 868,190 829,669 2019 29,726 102,535 65,949 216,015 64,726 305,500 110,898 895,743 865,667
_____________________ Source: State of Maine, Revenue Services
ECONOMIC CHARACTERISTICS
Population Characteristics
City of -----------------------% Change----------------------- Year Augusta City State USA
2018 18,635 (2.6) 0.1 5.8 2010 19,136 3.1 4.2 9.7 2000 18,560 (13.0) 3.8 13.2
1990 21,325 (1.3) 9.2 9.8 1980 21,819 (2.3) 13.4 11.4 1970 22,104 2.0 2.4 13.4 1960 21,680 - 6.1 18.5 _____________________ Sources: 1960-2010 U.S. Census, 2018 American Community Survey (5-year estimates)
Demographic Characteristics
City of Kennebec State of Augusta County Maine USA
Median age (years) 44.8 44.1 44.6 37.9 % school age 14.4 17.2 16.8 19.3 % working age 58.4 59.1 59.0 59.7 % 65 and over 22.2 18.8 19.4 15.2 _____________________ Source: 2018 American Community Survey (5-year estimates)
Income
City of Kennebec State of Augusta County Maine USA
Median family income $61,547 $66,348 $70,370 $72,850 % indiv. below poverty level 19.4 11.1 12.5 11.8 Per capita income $26,526 $29,084 $31,253 $32,621 _____________________ Source: 2018 American Community Survey (5-year estimates)
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Housing
City of Kennebec State of Augusta County Maine USA
% owner occupied 52.3 70.7 72.2 63.8 Owner occ. med. value $142,100 $155,000 $184,500 $204,500 Occupied housing units 8,718 51,542 556,955 119,730,128 _____________________ Source: 2018 American Community Survey (5-year estimates)
Unemployment Calendar
Year City of
Augusta County of Kennebec
State of Maine USA
2019 3.0% 2.9% 3.0% 3.7%2018 3.0 3.1 3.2 3.92017 3.3 3.3 3.3 4.42016 3.6 3.6 3.7 4.42015 4.1 4.2 4.5 5.32014 5.4 5.4 5.7 6.22013 6.3 6.3 6.7 7.42012
2011 2010
7.0 7.2 7.3
6.9 7.1 7.6
7.2 7.5 8.2
8.1 8.9 9.6
_____________________ Source: State of Maine, Department of Labor
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CITY FINANCES
BUDGET PROCESS
The fiscal year of the City begins on the first day of July and ends on the thirtieth day of June of the ensuing year. The Charter provides that the budget be submitted by the City Manager and the Board of Education to the City Council not later than ninety (90) days prior to the commencement of the next fiscal year. The City Council holds a public hearing at least ten (10) days prior to final passage of the annual appropriation resolve.
If the annual appropriation resolve is not adopted by June 30, the current fiscal year appropriation resolve modified by the change in debt service (general obligation bonds and tax anticipation notes), the City Manager’s estimated increase in County tax, and an adjustment, equal to the consumer price index (urban wage earners for the prior twelve months) applied to all other expenditure categories, shall be in effect until final adoption of the appropriation resolve. If the appropriation resolve is not finally adopted within sixty (60) days of the start of the fiscal year, the modified budget, as previously described, will become the adopted budget. The adopted budget is then filed with the City Assessor, who establishes a levy of taxes for the corresponding tax year.
The following table sets forth the trends in the General Fund budget for the last four fiscal years and the current fiscal year:
GENERAL FUND BUDGET (AS OF JUNE 30,)
2020 2019 2018 2017 2016
REVENUES Taxes $35,316,892 $34,584,644 $32,831,446 $31,780,518 $31,954,067
Licenses and permits 300,231 313,775 310,610 282,391 303,503
Intergovernmental 19,212,459 18,615,630 16,904,049 15,540,475 14,646,436
Tuition & other charges 712,500 635,000 865,500 880,500 912,500
Charges for services 2,393,642 2,213,299 2,110,214 1,865,973 1,835,014
Fees and fines 31,240 30,640 34,930 32,500 37,535
Unclassified 170,259 306,682 124,245 221,778 318,919
Investment earnings 628,763 102,975 102,975 102,975 102,975
Budgeted surplus 3,238,697 2,759,982 3,469,072 4,953,669 3,156,683
Transfers 3,182,405 3,094,946 3,021,849 2,411,564 1,627,612
TOTAL REVENUES $65,187,088 $62,657,573 $59,774,890 $58,072,343 $54,895,244
EXPENDITURES
Legislative and executive $659,504 $593,632 $582,790 $566,504 $553,229
Finance and administration 1,987,978 1,879,516 1,813,077 1,788,174 1,718,760
City services 1,811,912 1,749,060 1,774,084 1,659,973 1,538,631
Community services 2,906,598 2,728,946 2,557,253 2,420,645 2,403,786
Public Safety 10,524,183 9,983,480 9,513,069 9,084,403 8,805,185
Public Works 4,338,864 4,284,950 3,862,062 3,746,996 3,631,830
Education 32,325,102 31,211,198 29,774,119 30,257,600 28,445,419
Retirement and Insurance 3,443,581 2,927,018 2,683,502 2,203,333 2,174,287
Utilities 2,350,453 2,638,355 2,643,355 2,525,542 2,481,753
Unclassified 1,610,257 1,583,461 1,523,777 1,486,518 1,683,109
Debt service (excluding education) 3,228,656 3,077,957 3,047,802 2,332,655 1,459,255
Total Expenditures $65,187,088 $62,657,573 $59,774,890 $58,072,343 $54,895,244
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CAPITAL IMPROVEMENT PROGRAM The City Manager is directed by the Charter to prepare and submit a Capital Improvement Program (“CIP”) concurrent with submission of the annual budget. The CIP includes a list of all capital improvements proposed within the next five succeeding fiscal years. This includes costs, methods of financing and time schedules as well as the annual cost to operate and maintain the proposed respective improvement. The CIP is reviewed by the City Council who adopt the program, as amended if necessary, following a public hearing. The summary CIP for fiscal years 2020-2024 is as follows:
Department FY20 FY21 FY22 FY23 FY24 TOTAL
Facilities $ 435,000 $250,000 $255,000 $455,000 $130,000 $1,470,000
Fire Department 247,000 419,000 935,000 670,000 _ 2,271,000
Streets 1,328,000 2,282,500 2,200,000 2,090,000 1,730,000 9,630,000
Finance 50,000 50,000 400,000 50,000 _ 200,000
Community Services 75,000 625,000 405,000 355,000 760,000 2,220,000
Central Garage 493,000 467,000 425,000 351,000 319,000 2,035,000
Hatch Hill 10,000 640,000 - - - 1,075,000
Civic Center 140,000 25,000 400,000 420,000 435,000 1,420,000
$ 2,278,000 $4,758,500 $5,020,000 $4,391,000 $3,374,000 $20,321.000
Funding Sources TIF Bonds (GO) $1,135,000 - - - - $1,135,000
TIF Cash - - $400,000 $400,000 $400,000 800,000
GO Bonds 750,000 $3,626,000 4,915,000 3,620,000 2,620,000 14,811,000
Operating Funds 893,000 1,132,000 425,000 371,000 754,000 $2,778,000 $4,758,000 $5,020,000 $4,391,000 $3,374,000 $20,321,000
INVESTMENTS Maine statutes authorize the City to invest in obligations of the U.S. Treasury and U.S. agencies, repurchase agreements, money market mutual funds, bank deposits, and certain corporate stocks and bonds. The City invests funds in obligations of the U.S Treasury, U.S. agencies, money market mutual funds, and bank deposits that are collateralized by U.S. Treasury or Agency obligations or by Irrevocable Stand-by Letters of Credit issued by the Federal Home Loan Bank. UNDESIGNATED FUND BALANCE The City’s Charter requires that the City maintain an undesignated fund balance, or reserve fund, equal to at least five (5) percent of the previous year’s appropriation exclusive of capital improvements expenditures on debt service. If the undesignated fund balance falls below the 5% floor, the following year’s appropriation resolve shall contain an amount to restore the undesignated fund balance to that level. Further, the City Council shall strive to increase the undesignated fund balance to 8.33% each year. The City Council may spend from the undesignated fund balance to fund unforeseen or unmet needs of the City, subject to its obligation to replenish the fund as indicated above.
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FINANCIAL STATEMENTS Title 30-A MRSA §5821 and following, as amended, and the City’s Charter, provide for independent annual audits of the City’s accounts and establishes procedures for such audits. The City is in conformance with this statute and its Charter. The June 30, 2018 financial statements, audited by Runyon, Kersteen, Ouellette, Certified Public Accountants, is presented as APPENDIX A to this Official Statement. The accounting methods and procedures of the City of Augusta conform to generally accepted accounting principles (GAAP) as applied to governmental units.
CITY OF AUGUSTA COMPARATIVE BALANCE SHEETS
GENERAL FUND (AS OF JUNE 30,)
2019 2018 2017 2016 2015
ASSETS Cash $23,798,072 $25,835,669 $26,877,983 $30,287,795 $30,374,383
Investments 11,694,262 11,916,968 11,563,236 10,965,505 10,928,699
Receivables: Taxes receivable 894,849 852,465 1,008,090 138,110 1,068,311
Tax liens 334,152 379,750 452,022 1,173,450 461,224 Due from other governments 479,200 472,140 641,127 475,418 404,846 Accounts receivable, net of allowance 339,476
283,218 275,209 321,665 422,177
Prepaid expenses 162,020 215,012 139,714 113,121 116,693
Inventory 703 336 473 496 109
TOTAL ASSETS $37,702,734 $39,955,558 $40,957,854 $43,475,560 $43,776,442
LIABILITIES
Accounts payable $936,447 $1,055,993 $1,927,831 $1,289,341 $1,140,225
Accrued payroll and benefits 2,580,567 2,452,197 2,419,988 2,385,787 2,303,732
Escrow payable 39,692 68,080 33,200 7,844 6,624
Deferred revenue 909,003 891,745 1,064,692 1,150,628 1,021,650
Taxes received in advance 4,447 619 2,208 5,495 89,713
Interfund loans payable - 20,510,029 20,094,679 21,513,173 23,040,069
TOTAL LIABILITIES $21,978,392 $24,086,918 $25,542,598 $26,352,268 $27,602,013
FUND BALANCES
Nonspendable $162,723 $215,348 $140,187 $113,617 $116,802
Restricted 2,977,102 3,448,198 4,090,852 5,939,022 5,742,799
Committed - - - - -
Assigned 4,195,247 4,240,496 4,399,779 4,338,644 3,890,718
Unassigned-Budget stab. 1,200,000 - - - -
Unassigned 7,189,270 7,072,853 6,784,438 6,732,009 6,424,110
$15,724,342 $14,976,895 $15,415,256 $17,123,292 $16,174,429
TOTAL LIABILITIES AND FUND BALANCES
$37,702,734 $39,955,558 $40,957,854 $43,475,560 $43,776,442
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CITY OF AUGUSTA COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES GENERAL FUND
(For the Years Ended June 30,)
REVENUES 2019 2018 2017 2016 2015 Taxes $35,208,441 $33,508,590 $32,475,745 $32,255,122 $30,944,004 Licenses and permits 221,108 199,695 208,511 294,213 198,356 Intergovernmental 20,677,144 18,584,081 15,398,158 15,036,116 15,653,123 Tuition & other charges - Education
511,120 757,771 637,679 820,068 823,964
Charges for services - City 2,077,459 2,206,267 1,836,384 1,914,624 1,968,509 Fees and fines 60,159 51,997 59,224 46,925 50,155 Unclassified 701,631 615,441 740,118 601,038 666,269 Investment earnings 880,577 131,156 32,881 280,559 155,269 TOTAL REVENUES $60,337,639 $56,054,998 $51,388,700 $51,248,665 $50,459649 EXPENDITURES Current: General government $564,453 $544,868 $627,192 $556,714 $590,171 Public safety 10,105,637 9,523,605 9,167,872 8,802,013 8,453,214 Public Works 4,129,917 3,999,134 3,630,164 3,512,133 3,928,512 Finance and administration 1,823,705 1,775,921 1,767,684 1,684,792 1,608,701 Development services 1,733,740 1,679,743 1,634,952 1,495,133 1,486,659 Education 31,957,819 30,003,378 28,918,509 26,376,189 25,206,685 Community services 2,660,318 2,473,128 2,395,390 2,247,263 2,277,315 Retirement and insurance 2,584,613 2,383,059 2,294,133 2,152,679 1,638,345 Utilities 2,494,794 2,617,504 2,505,563 2,480,937 2,464,731 Unclassified 1,583,461 1,732,692 1,533,098 1,473,224 1,429,518 Debt service-City 3,128,347 2,643,846 2,281,830 1,414,737 943,301 Capital Outlay - 41,904 - - - TOTAL EXPENDITURES $62,766,804 $59,418,782 $56,756,387 $52,195,814 $50,027,152 EXCESS OF REVENUES OVER EXPENDITURES
(2,429,165) (3,363,784) (5,367,687) (947,149) 432,497
OTHER FINANCING SOURCES (USES):
Operating transfers in 3,176,612 2,925,423 3,797,636 2,253,670 1,784,545 Operating transfers out - - (137,985) (357,658) (1,213,725)
TOTAL OTHER FINANCING SOURCES (USES):
3,176,612 2,925,423 3,659,651 1,896,012 570,820 EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES AND OTHER USES
747,447 (438,361) (1,708,036) 948,863 1,003,317
BEGINNING FUND BALANCE
14,976,895 15,415,256 17,123,292 16,174,429 15,171,112
ENDING FUND BALANCE
$15,724,342 $14,976,895 $15,415,256 $17,123,292 $16,174,429
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PROPERTY TAXATION
The following table sets forth equalized value and assessed valuation of real and personal property, tax rate, tax levy and collection rates for the City for the most recent 10 years:
Fiscal Yr End June 30
Equalized State
Valuation (000)
Assessed Valuation
(000) Tax Rate
Tax Levy (000)
Current Year
Collection (000)
Percent of
Levy
Percent of Levy as of
5/31/20 2020 $1,664,200 $1,811,899 $20.97 $37,996 $36,777 96.79% 96.79% 2019 1,551,300 1,769,273 20.97 37,102 35,706 96.24 99.27 2018 1,540,450 1,706,322 20.38 34,775 34,021 97.83 99.852017 1,524,500 1,694,245 19.79 33,529 32,613 97.27 99.91 2016 1,540,250 1,703,497 19.40 33,048 31,901 96.53 99.91 2015 1,503,750 1,677,742 18.67 31,323 30,339 96.86 99.97 2014 1,490,850 1,626,343 18.15 29,541 28,046 94.94 99.97 2013 1,490,000 1,404,346 17.55 28,156 27,149 96.42 99.98 2012 1,518,500 1,594,105 17.30 27,578 26,662 96.68 99.98 2011 1,526,350 1,585,823 17.05 27,038 25,845 95.59 99.98
_____________________ Source: City of Augusta
The principal tax of the City is the tax on real and personal property. Such taxes are limited as to rate or amount unless certain requirements set forth in 30-A MRSA §5721-A are satisfied. A single tax applies for each fiscal year to the assessed value of the taxable real or personal property. The City’s Tax Collector receives the tax commitment from the City Assessor, with assessed values as of April 1 of each year, after which time the tax bills are mailed. For fiscal year 2020 the tax due dates are September 12, 2019 and March 12, 2020. All taxes paid after the due dates are subject to interest, at the rate of 9.00% per annum, the maximum rate of interest as set by the State Treasurer annually. Historically, the City has adopted the maximum annual rate.
Collection of real estate taxes is ordinarily enforced in the City by the “tax lien” procedure as provided in the Maine Revised Statutes to the collection of delinquent real estate taxes. Real estate tax liens are recorded against the individual property at the Kennebec County Registry of Deeds. This lien has priority over all mortgages, liens, attachments and encumbrances of any nature, subject to any paramount federal tax lien and subject to bankruptcy and insolvency laws. If the account is not satisfied within 18 months, the property becomes tax acquired and may be disposed of by the City.
The City is permitted by the laws of the State of Maine to levy taxes up to 105% of its net budgeted expenditures for the related fiscal period.
LARGEST TAXPAYERS – FY20
Name Type of Business
Assessed Valuation
Property Tax
Percent of Net Levy
Central Maine Power Public Utility $184,726,500 $3,873,715 9.52% W/S Development Retail 84,677,700 1,775,691 4.37 Wal-Mart Properties Retail 34,372,000 720,781 1.77 Central Maine Commerce Center Real Estate Developer 32,489,900 681,313 1.68PDNED Augusta Crossing LLC Retail Developer 29,233,400 613,024 1.51Maine Natural Gas Public Utility 25,238,700 529,256 1.30Summit Natural Gas Public Utility 22,034,200 462,057 1.14MPDC I-IV Total Real Estate Developer 18,061,700 378,754 0.93J&R Associates LLC Real Estate Developer 17,635,000 369,806 0.91Taurus Business Center Limited Retail Developer 17,279,500 362,351 0.89Performance Food Group Inc Real Estate Developer 16,370,200 343,283 0.84ML-CFC2007-8WesternAve LLC Retail 15,643,600 328,046 0.81
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PROPERTY TAX LEVY LIMIT Unless the City follows certain procedural requirements under Title 30-A, Section 5721-A of the Maine Revised Statutes, as amended, the City is limited to an increase in the City’s property tax levy from one year to the next to an amount not more than its municipal property tax levy limit (see “SOURCE OF PAYMENT OF THE BONDS” herein). The municipal property tax levy limit for subsequent fiscal years is the municipal property tax levy limit multiplied by the City Growth Limitation Factor. Therefore, in cases where the amount of the prior year’s municipal property tax levy limit exceeds the amount of the City’s actual property tax levy, the City may carry-forward that difference in establishing its future years’ property tax levy. The following table displays the City’s limitation on the municipal property tax levy:
Fiscal Year 2019/2020 2018/2019 2017/2018 2016/2017 2015/2016 State Personal Income Factor 2.77% 2.61% 2.67% 0.86% 1.09% City Property Growth Factor 4.38 3.01 1.98 2.63 3.90 Growth Limitation Factor 7.15% 5.62% 4.65% 3.49% 4.99% Property Tax Levy Limit $17,190,535 $15,487,571 $15,063,183 $14,466,025 $14,381,627 Property Tax Levy 16,205,858 15,387,987 14,599,335 14,393,868 13,862,702 Amount Below Tax Levy Limit $984,677 $99,584 $463,848 $72,157 $518,925
_____________________ Source: City of Augusta, City Assessor TAX BASE SHARING Tax base sharing is established under 30-A MRSA §5751 and following, as amended, to increase the likelihood of orderly development and to provide an incentive for coordinated multi-community economic development by permitting two or more communities to share their tax base. Any two or more municipalities may, by vote of their legislative bodies, enter into an agreement (the “Sharing Agreement”) to share all or a specific part of the commercial, industrial or residential assessed valuation located within their respective communities. The City has not entered into any tax base sharing agreements. TAX INCREMENT FINANCING Tax increment financing (“TIF”) pursuant to 30-A MRSA §5221 and following, as amended, enables a municipality to finance development by borrowing against the future increased property tax receipts attributable to that development. Under the statutory framework, the municipality designates a tax increment financing district and adopts a development program (the “Development Program”) stating the means and objectives for the development of that district. The municipality dedicates a percentage of the increased property taxes it receives in future years from development within the district to payment of certain obligations and other costs related to the development of the district. Tax increment financing districts are subject to statutory limits on their size, including the following limitations: (a) the total area of a single development district may not exceed 2% of the total acreage of the municipality, (b) the total area of all districts within the municipality may not exceed 5% of the total acreage of the municipality, and (c) the aggregate value of equalized taxable property of all districts within the municipality as of the April 1st preceding the date of designation of each such district cannot exceed 5% of the municipality’s total value of equalized taxable property, excluding from this limit any district involving project costs in excess of $10,000,000, the geographic area of which consists entirely of contiguous property owned by a single taxpayer with an assessed value in excess of 10% of the municipalities total assessed value. The City currently has twenty-six (26) approved tax increment financing districts. For the year ended June 30, 2019, the City captured $4,944,346 in TIF revenues. The City retained $3,259,016 of TIF revenues for approved local economic development activities and eligible infrastructure improvements. The City will remit $1,687,559 back to the developers for eligible project costs. In 2004, the City issued $2,500,000 of general obligation bonds as part of a financing package for the construction of a parking garage located within the Downtown TIF District. The debt service on the bonds is being paid from Downtown TIF District revenues.
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In 2013, the City issued $1,125,000 of general obligation bonds as part of a financing package for the improvement of City streets and sidewalks located within the Cony Circle TIF District. The debt service on the bonds is being paid from Cony Circle TIF District revenues.
In 2015, the City issued $850,000 of general obligation bonds as part of a financing package for the renovation and energy systems improvement at the Augusta Civic Center. The debt service on the bonds is being paid from the Market Place TIF District revenues.
In 2016, the City issued $6,385,000 of general obligation bonds as part of a financing package for construction of the North Augusta Fire Station, acquisition of fire apparatus and improvement of City streets and sidewalks.
In 2017, the City issued $4,460,000 of general obligation bonds as part of a financing package for renovation of the Hartford Fire Station, construction of Mill Park Riverwalk, improvement of City streets and sidewalks and renovation and energy systems improvements at the Augusta Civic Center.
In 2018, the City issued $3,400,000 of general obligation bonds as part of a financing package for renovation of the Hartford Fire Station (Final Phase), construction of the Riverwalk and improvement of City streets and sidewalks.
In 2019, the City issued $1,576,000 of general obligation bonds as part of a financing package for the construction, renovation, repair and improvement of streets, sidewalks and related facilities throughout the City.
STATE AID
The State provides aid to the City in a number of areas including education, welfare assistance, road maintenance, homestead exemption and revenue sharing. The amount of aid in each category is based upon a number of formulas, many of which contain variables that change annually. Further, most categories of State aid are governed by laws that may be changed by the State Legislature and are subject to appropriation by the State Legislature in its budgetary process.
The State subsidizes most local school administrative units through the Essential Programs and Services (“EPS”) model of calculating and distributing state education aid. EPS utilizes a number of factors that are subject to change each year. In addition, the EPS model itself is subject to change by the State Legislature. Furthermore, subsidies for school administrative units are an annual item in the State’s budgetary process and are subject to legislative appropriation in that process.
The following table displays state aid received by the City for the last six fiscal years and projected for this fiscal year:
Fiscal Year End June 30,
State Revenue Sharing
School Aid
Other State Aid
Total From State
2020 $1,830,523 $13,026,905 $2,243,862 $17,101,2002019 1,257,803 15,042,721 2,109,959 18,410,4832018 1,186,930 13,910,255 1,495,774 16,592,9592017 1,063,543 12,769,554 1,296,416 15,129,5132016 1,141,305 12,375,001 1,019,191 14,535,4972015 1,088,323 13,249,691 1,099,198 15,437,2122014 1,177,978 13,549,523 1,129,143 15,856,644
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INDEBTEDNESS
LIMITATIONS AND EXCLUSIONS
In accordance with 30-A MRSA §5702, as amended, “No municipality shall incur debt which would cause its total debt outstanding at any time, exclusive of debt incurred for school purposes, for storm or sanitary sewer purposes, for energy facility purposes or for municipal airport purposes to exceed 7 1/2% of its last full state valuation, or any lower percentage or amount that a municipality may set. A municipality may incur debt for school purposes to an amount outstanding at any time not exceeding 10% of its last full state valuation, or any lower percentage or amount that a municipality may set, for storm and sewer purposes to an amount outstanding at any time not exceeding 7 1/2% of its last full state valuation, or any lower percentage or amount that a municipality may set, and for municipal airport and special district purposes to an amount outstanding at any time not exceeding 3% of its last full state valuation, or any lower percentage or amount that a municipality may set; provided, however, that in no event shall any municipality incur debt which would cause its total debt outstanding at any time to exceed 15% of its last full state valuation, or any lower percentage or amount that a municipality may set.”
The City’s 2020 Equalized State Valuation is $1,664,200,000. The 15% debt limit is $243,630,000. As of June 30, 2020, the City’s long-term debt outstanding is projected to be $41,169,955 or 2.47% of the Equalized State Valuation.
DEBT RATIOS
The following table sets forth the ratio of bonded debt to equalized state valuation and per capita debt ratios for the end of the ten most recent fiscal years:
Fiscal Equalized Assessed Total Debt Per Net Net NetYr. End Valuation Valuation Debt as % Capita Debt Debt as % Debt Per June 30, Population (000) (000) (000) Eq. Val. Debt (000)(1) Eq. Val. Capita
2020 18,635 $1,664,200 $1,811,899 $41,170 2.47% $2,209 $16,457 .99% $ 883 2019 18,635 1,551,300 1,769,273 46,365 2.99 2,488 18,671 1.20 1,002 2018 18,691 1,540,450 1,706,322 49,149 3.19 2,630 23,557 1.53 1,260 2017 18,691 1,524,500 1,694,245 49,923 3.27 2,671 27,810 1.82 1,488 2016 18,691 1,540,250 1,703,497 46,930 3.04 2,511 28,908 1.88 1,547 2015 18,691 1,503,750 1,677,742 44,107 2.93 2,360 17,110 1.14 915 2014 19,136 1,490,850 1,626,343 35,549 2.38 1,858 13,122 0.88 686 2013 19,136 1,490,000 1,604,346 39,706 2.66 2,075 15,145 1.02 791 2012 19,136 1,518,500 1,594,105 41,143 2.71 2,150 14,574 0.96 762 2011 19,136 1,526,350 1,585,823 44,408 2.91 2,321 16,780 1.10 877 2010 19,136 1,552,500 1,569,894 46,291 3.02 2,419 16,604 1.07 868
_____________________ (1) Excludes Self-Supporting and School Subsidized Debt
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NET DEBT SERVICE COMPONENT OF OPERATING EXPENDITURES
2016 2017 2018 2019 2020Total Current Year Debt Service $5,549,804 $5,324,851 $6,309,115 $6,623,738 $6,620,572 Less: Self-supporting Enterprise D/S (1,030,130) (926,955) (879,494) (901,152) (711,320) Less: Self-supporting TIF D/S (498,023) (894,052) (1,380,219) (1,762,014) (1,865,939) Less: State Subsidized School D/S (1,464,950) (1,442,550) (1,442,290) (1,394,675) (1,369,700) Net Tax-backed Debt Service 2,556,702 2,061,295 2,606,912 2,565,897 2,849,188 Budgeted Operating Expense 54,895,244 58,072,343 59,774,890 62,735,573 65,187,088 Net Debt Service as % Operating Exp. 4.86% 3.55% 4.36% 4.09% 4.37%
EXISTING PRINCIPAL PAYMENTS BY ISSUE
June 30
Series 2000
B Hatch
Hill
Series 2001
A Civic
Center Series 2011
QSCB 2011
School Revolving Loan Fund
2011 Series 2013
2014 Pension
Obligation Refunding-Series A
2014 Series
B
2015 Refunding
Bonds Series A
Series 2015
School Revolving Loan Fund
2016 Series 2016
Series 2017
Series 2018
Series 2020
Total Debt
2020 485,000 226,320 90,000 35,598 40,006 195,000 450,000 75,000 1,445,000 770,000 32,433 405,000 445,000 310,000 191,000 5,195,357 2021 226,320 90,000 35,598 40,006 195,000 465,000 75,000 1,440,000 770,000 32,433 405,000 440,000 300,000 190,000 4,704,357 2022 90,000 35,598 195,000 475,000 75,000 1,430,000 770,000 405,000 435,000 295,000 185,000 4,390,598 2023 35,000 125,000 490,000 75,000 1,415,000 770,000 395,000 405,000 290,000 185,000 4,185,000 2024 35,000 125,000 505,000 75,000 1,405,000 515,000 395,000 405,000 285,000 180,000 3,925,000 2025 35,000 125,000 525,000 1,405,000 515,000 395,000 405,000 255,000 175,000 3,835,000 2026 35,000 125,000 545,000 1,295,000 400,000 395,000 405,000 255,000 175,000 3,630,000 2027 35,000 125,000 565,000 1,240,000 400,000 365,000 405,000 245,000 170,000 3,550,000 2028 35,000 590,000 400,000 365,000 325,000 240,000 165,000 2,120,000 2029 35,000 610,000 400,000 290,000 325,000 170,000 165,000 1,995,000 2030 35,000 635,000 400,000 285,000 325,000 170,000 90,000 1,940,000 2031 35,000 400,000 275,000 325,000 165,000 90,000 1,290,000 2032 35,000 400,000 275,000 325,000 165,000 90,000 1,290,000 2033 400,000 275,000 270,000 165,000 90,000 1,200,000 2034 400,000 220,000 270,000 130,000 60,000 1,080,000 2035 400,000 220,000 270,000 130,000 25,000 1,045,000 2036 220,000 270,000 130,000 25,000 645,000 2037 270,000 25,000 295,000 2038 25,000 25,000 2039 25,000 25,000
$485,000 $452,640 $620,000 $106,794 $80,012 1,210,000 $5,855,000 $375,000 $11,075,000 $8,110,000 $64,866 $5,585,000 $6,320,000 $3,700,000 $2,326,000 $46,365,312
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PROJECTED DEBT SERVICE REQUIREMENTS
EXISTING DEBT SERVICE THIS ISSUE (Pro Forma) Year
Ended June 30, Principal Interest
Debt Service Principal Interest Debt Service
Total Debt Service
2020 $5,195,357 $1,425,214 $6,620,571 $130,000 $22,675 $152,675 $6,773,246
2021 4,704,357 1,284,970 5,989,327 125,000 21,375 146,375 6,135,702
2022 4,390,598 1,147,758 5,538,356 125,000 20,125 145,125 5,683,481
2023 4,185,000 1,014,204 5,199,204 125,000 18,875 144,875 5,344,079
2024 3,925,000 887,141 4,812,141 120,000 17,625 137,625 5,949,766
2025 3,835,000 752,869 4,587,869 115,000 16,425 131,425 4,719,294
2026 3,630,000 614,073 4,244,073 115,000 15,160 130,160 4,374,233
2027 3,550,000 484,333 4,034,333 85,000 13,780 98,780 4,133,113
2028 2,120,000 395,410 2,515,410 85,000 12,675 97,675 2,613,085
2029 1,995,000 319,982 2,314,982 85,000 11,485 96,485 2,411,467
2030 1,940,000 287,102 2,227,102 45,000 10,125 55,125 2,282,227
2031 1,290,000 207,144 1,497,144 45,000 9,225 54,225 1,551,369
2032 1,290,000 168,621 1,458,621 45,000 8,325 53,325 1,511,946
2033 1,200,000 131,300 1,331,300 45,000 7,425 52,425 1,383,725
2034 1,080,000 95,175 1,175,175 45,000 6,525 51,525 1,226,700
2035 1,045,000 60,993 1,105,993 45,000 5,625 50,625 1,156,618
2036 645,000 26,982 671,982 45,000 4,500 49,500 721,482
2037 295,000 6,638 301,638 45,000 3,375 48,375 350,013
2038 25,000 1,500 26,500 45,000 2,250 47,250 73,750
2039 25,000 750 25,750 45,000 1,125 46,125 71,875
TOTALS $46,365,312 $9,312,159 $55,677,471 $1,560,000 $228,700 $1,788,700 $$6$57,466,1716142$
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OVERLAPPING DEBT
The City is subject to an annual assessment of its proportional share of the County of Kennebec expenses, including debt repayment, as determined by percentage of the City’s equalized state valuation to the County’s equalized state valuation. As of June 30, 2019, the County’s debt equaled $0.
RETIREMENT
MAINE PUBLIC EMPLOYEES RETIREMENT SYSTEM
City Employees - Description of Plan The City contributes to the Maine Public Employee Retirement System (“Maine PERS”), a cost-sharing multiple-employer public employee retirement system established by the Maine State Legislature. The Maine PERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. The authority to establish and amend benefit provisions rests with the State Legislature. The Maine PERS issues a publicly available financial report that includes financial statements and required supplementary information for the Consolidated Plan for Local Participating Districts (the “PLD Plan”). That report may be obtained by writing to Maine PERS, 46 State House Station, Augusta, Maine 04333-0046 or by calling 1-800-451-9800.
Funding Policy PLD Plan members are required to contribute 8.0% to 9.5% of their annual covered salary depending upon the plan that they are in and the City of Augusta is required to contribute actuarially determined rates which ranged between 10% and 12.7% of annual covered payroll for the fiscal year ended June 30, 2019. The contribution rates of plan members and the City of Augusta are established and may be amended by the Maine State Legislature. The City’s contributions to the Maine State Retirement participating local district for years ended June 30, 2019, June 30, 2018, and June 30, 2017 were $1,629,090, $1,463,344, and $1,415,851, respectively.
Teacher Group - Description of Plan All school teachers, plus other qualified educators, participate in the Maine PERS State Employee and Teacher Plan (the “SET Plan”). The SET Plan is a cost sharing plan with a special funding situation, established by the Maine State Legislature. The Maine State Retirement System provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. The authority to establish and amend benefit provisions rests with the State Legislature. The Maine PERS issues a publicly available financial report that includes financial statements and required supplementary information for the SET Plan. That report may be obtained by writing to Maine PERS, 46 State House Station, Augusta, Maine 04333-0046 or by calling 1-800-451-9800.
Funding Policy - Plan members are required to contribute 7.65% of their compensation to the retirement system. In the past the City was not required to make employer contributions to the SET Plan. Employer contribution for the year ended June 30, 2019 was 3.97% of covered payroll or $587,392 and the State of Maine’s contribution amounted to $2,167,580 or 14.6% of covered payroll.
Please see, Appendix A, Annual Audited Financial Statements, pages 51 - 55 and 59 - 60, Maine Public Employees Retirement System, for a full description of the benefits, liabilities and funding of pensions as of June 30, 2019.
DEFERRED COMPENSATION PLAN
The City offers its employees a deferred compensation plan created in accordance with the Internal Revenue Service Section 457. The City does not make any contribution to the plan. Assets have been placed into a trust for the exclusive benefit of the employees. The plans assets and liabilities are not reflected in the City’s financial statements.
OTHER POST EMPLOYMENT BENEFITS
In addition to pension benefits as described above, the City provides certain retirees with medical care benefits. The portion of the cost of such benefits is generally paid on a pay-as-you-go basis. The pay-as-you-go cost to the City for the year ended June 30, 2019 was $1,392,319, $1,290,712 for the year ended June 30, 2018, and $1,022,085 for the year ended June 30, 2017. The Annual Required Contribution (ARC) was $1,837,317 and the Unfunded Actuarial Accrued Liability (UAAL) was $31,689,479 as of June 30, 2019.
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The Governmental Accounting Standards Board (“GASB”) has promulgated its Statements Nos. 43 and 45 which require public sector entities to report the future costs of these non-pension, post-employment benefits in their financial statements.
Please see Appendix A, Annual Audited Financial Statements, pages 46-54, Other Postemployment Benefits, for a full description of the benefits provided and the actuarial determined liability of the City as of June 30, 2019.
ENVIRONMENTAL MATTERS
The City is subject to a wide variety of federal and state laws and regulations relating to land use, water resources, the use, storage, discharge, emission and disposal of wastes and other environmental matters. While the City believes that its properties and operations are presently in material compliance with all land use and environmental laws, failure to comply with such laws could result in the imposition of severe penalties or restrictions on operations by government agencies or courts that could adversely affect the City. The City is not aware of any environmental conditions or noncompliance, the remediation or correction of which the City believes would have a material adverse impact on the financial condition of the City. The City is not subject to any pending or threatened proceedings or actions involving environmental matters that, if adversely decided, would have a material adverse impact upon the City’s financial condition or ability to pay debt service on the bonds as and when due.
While not having a materially adverse impact upon the City’s financial condition, or its ability to meet its debt service obligations, the City is voluntarily making the following disclosure with respect to environmental liabilities:
The City has recognized a liability for landfill closure and postclosure costs in the Hatch Hill Enterprise Fund. The liability is calculated based upon current cost estimates for closure, estimates for leachate transportation, post closure monitoring and maintenance. The total liability based upon current capacity is estimated at $6,725,357 as of June 30, 2019. Please see Appendix A, Annual Audited Financial Statements, page 45, Landfill Liabilities, for a full description of the landfills and related closure and postclosure liabilities.
LITIGATION
In the opinion of City officials there is no litigation pending against the City which, either individually or in the aggregate, would result in judgments that would have a materially adverse effect on the City’s financial position or its ability to meet its debt service obligations.
Upon delivery of the Bonds, the City shall deliver or cause to be delivered a certificate of an Authorized Representative, dated the date of delivery, to the effect that there is no litigation pending or, to the knowledge of such officer, threatened, affecting the validity of the Bonds or the power of the City to levy and collect taxes to pay them, and that neither the corporate existence nor boundaries of the City, nor the title of certain officers of the City to their respective offices, is being contested.
APPENDIX A
CITY OF AUGUSTA, MAINE FISCAL JUNE 30, 2019
ANNUAL AUDITED FINANCIAL REPORT
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CITY OF AUGUSTA, MAINE
Annual Financial Report
For the Year Ended June 30, 2019
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CITY OF AUGUSTA, MAINEAnnual Financial Report
For the Year Ended June 30, 2019
Table of Contents
PageFINANCIAL SECTION
Independent Auditor's Report 1-3Management’s Discussion and Analysis 4-12
StatementsBasic Financial Statements:
Government-wide Financial Statements:Statement of Net Position 1 15Statement of Activities 2 16
Fund Financial Statements:Balance Sheet - Governmental Funds 3 17Statement of Revenues, Expenditures, and Changes in Fund
Balances - Governmental Funds 4 18Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund
Balances of Governmental Funds to the Statement of Activities 5 19Statement of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual - General Fund 6 20Statement of Net Position - Proprietary Funds 7 21Statement of Revenues, Expenses, and Changes in Net Position - Proprietary Funds 8 22Statement of Cash Flows - Proprietary Funds 9 23Statement of Fiduciary Net Position - Fiduciary Funds 10 24Statement of Changes in Fiduciary Net Position - Fiduciary Funds 11 25
Notes to Basic Financial Statements 26-58
Required Supplementary Information 59-65
ExhibitsCombining and Individual Fund Financial Statements and Schedules:
General Fund:Comparative Balance Sheets A-1 69Statement of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual A-2 70-73Combining Statement of Revenues, Expenditures, and Changes in Fund
Balances - Reserves A-3 74Nonmajor Governmental Funds:
Combining Balance Sheet B-1 77Combining Statement of Revenues, Expenditures, and Changes in
Fund Balances B-2 78Nonmajor Special Revenue Funds - Combining Balance Sheet C-1 79Nonmajor Special Revenue Funds - Combining Statement of
Revenues, Expenditures, and Changes in Fund Balances C-2 80
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CITY OF AUGUSTA, MAINEAnnual Financial Report
For the Year Ended June 30, 2019
Table of Contents, ContinuedSchedules Page
City Special Revenue Funds - Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 1 83-86
School Special Revenue Funds - Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 2 87
Nonmajor Capital Projects - Combining Statement of Revenues, Expenditures,and Changes in Fund Balances 3 88
Nonmajor Permanent Funds - Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 4 89
Private-purpose Trust Funds - Combining Statement of Changes inFiduciary Net Position 5 90-91
Agency Funds - Activity Funds - Statement of Changes in Assets and Liabilities 6 92
STATISTICAL SECTION Tables
Government-wide Expenses by Function 1 95Government-wide Revenues 2 96General Fund Expenditures by Function - Budgetary Basis 3 97General Fund Revenues by Source 4 98Property Tax Levies and Collections 5 99Assessed and State Value of Taxable Property 6 100Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt Per Capita 7 101Principal Taxpayers 8 102
SINGLE AUDIT SECTION
Reports Required by Government Auditing Standards and the Uniform Guidance:
Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 105-106
Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control over Compliance Required by the Uniform Guidance 107-109
Schedule of Expenditures of Federal Awards 110-111
Notes to Schedule of Expenditures of Federal Awards 112
Schedule of Findings and Questioned Costs:Section I - Summary of Auditor's Results 113Section II - Findings Required to be Reported Under Government Auditing Standards 114Section III - Findings and Questioned Costs for Federal Awards 115Section IV - Status of Prior Year Findings and Questioned Costs 116
Certified Public Accountants and Business Consultants
Independent Auditor's Report
City CouncilCity of Augusta, Maine
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Augusta, Maine as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
City CouncilPage 2
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Augusta, Maine, as of June 30, 2019, and the respective changes in financial position and, where applicable, cash flows thereof and the budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, schedule of City’s proportionate share of the net pension liability, schedule of City contributions, schedule of changes in City’s total health plan - MMEHT OPEB liability and related ratios, schedule of changes in City’s total health plan - MEABT OPEB liability and related ratios, schedule of City’s Proportionate Share of the net OPEB liability, and schedule of City OPEB contributions, as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Augusta, Maine’s basic financial statements. The combining and individual fund financial statements and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements.
City CouncilPage 3
The combining and individual fund financial statements and schedule of expenditures of federal awardsare the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund financial statements and schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
The statistical section has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 12, 2019 on our consideration of the City of Augusta, Maine’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City of Augusta, Maine’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Augusta, Maine’s internal control over financial reporting and compliance.
December 12, 2019South Portland, Maine
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CITY OF AUGUSTA, MAINEManagement’s Discussion and Analysis
June 30, 2019
As management of the City of Augusta, we offer readers of the City of Augusta’s financial statements this narrative overview and analysis of the financial activities of the City of Augusta for the fiscal year ended June 30, 2019. We encourage readers to consider the information presented here in conjunction with the additional information that we have furnished in the basic financial statements and the accompanying notes to the financial statements. The City’s financial highlights are presented below:
Fiscal 2019 Financial Highlights
Financial highlights of the year include the following:
City-wide:
The City’s total net position was $14.56 million at June 30, 2019. Of this total, $7.02 million is governmentalnet position and $7.53 million is business-type net position.
The City’s net position increased by $6.5 million. Of this amount, the governmental activities had an increase innet position of $5.1 million. Net position was restated for ending fiscal year 2018 to $1.9 million due to theaddition of an OPEB liability associated with health insurance for the School Department. The business-typeactivities net position increased by $1.4 million. Governmental net position invested in capital assets net of debtincreased by $0.05 million and business-type increased by $3.3 million.
City-wide governmental revenues include program revenues of $28.2 million, an increase of $0.8 million, andgeneral revenues of $44.7 million, an increase of $3.5 million. The increase in program revenues of $0.8 millionis primarily due to Education’s operating grants and contributions. Business-type income was $6.4 million, anincrease of $0.6 million.
Total City-wide governmental expenses were $67.7 million, an increase of $0.4 million and business-typeactivities expenses were $5.1 million, a decrease of $0.4 million, for total expenditures of $72.8 million.
Fund Level:
Governmental fund balance decreased by $2.5 million in Fiscal 2019 to $28.7 million of which $16.2 million isnon-spendable, restricted, or committed. $4.2 million is assigned for specific purposes and $8.3 million isunassigned. Governmental fund revenues totaled $72.6 million, with total expenditures of $78.6 million. Otherfinancing sources and uses added $3.5 million. General fund revenues totaled $60.3 million, with totalexpenditures of $62.8 million, for a deficiency of revenues under expenditures $2.4 million. The total of otherfinancial sources and uses was $3.2 million. The General Fund fund balance increased $0.7 million for fiscal2019.
Overview of the Financial Statements:
This discussion and analysis is intended to serve as an introduction to the City of Augusta’s Annual Financial Report. The City of Augusta’s Basic Financial Report is comprised of three components: (1) Government-wide Financial Statements, (2) Fund Financial Statements, and (3) Notes to the Financial Statements. This report also contains other supplementary information in addition to the basic financial statements themselves.
The Basic Financial Statements
The Basic Financial Statements comprise the Government-wide Financial Statements and the Fund Financial Statements; these two sets of financial statements provide two different views of the City’s financial activities and financial position.
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CITY OF AUGUSTA, MAINEManagement’s Discussion and Analysis, Continued
Government-wide Financial Statements provide a long-term view of the City’s activities as a whole and comprise the Statement of Net Position and the Statement of Activities. The Statement of Net Position provides information about the financial position of the City as a whole, including all of its capital assets and long-term liabilities under full accrual basis, similar to that used by corporations. The Statement of Activities provides information about all the City’s revenues and all of its expenses, also on the full-accrual basis, with the emphasis on measuring net revenues or expenditures of each of the City’s programs. The Statement of Activities explains in detail the change in net position for the year.
All of the City’s activities are grouped into governmental activities and business-type activities, as explained below. All of the amounts in the Statement of Net Position and Statement of Activities are separated into governmental activities and business-type activities in order to provide a summary of these two activities of the City as a whole.
The Fund Financial Statements report the City’s operations in more detail than the Government-wide Statements and focus primarily on the short-term activities of the City’s General Fund and Other Funds. The Fund Financial Statements measure only current revenues and expenditures and fund balances. They exclude capital assets, long-term debt, and other long-term amounts.
Major Funds, which account for the major financial activities of the City, are presented individually while the activities of the Nonmajor Funds are presented in summary, with subordinate schedules presenting the detail for each of these other funds. Major funds are explained below.
The Government-wide Financial Statements
The Statement of Net Position and the Statement of Activities present information about the following:
Governmental Activities:
All of the City’s basic services are considered to be governmental activities including General Government,Community Services, Development Services, Public Safety, Public Works, Education, and GeneralAdministration. These services are supported by general City revenues such as taxes and specific programrevenues such as Code Enforcement fees.
Business-type Activities:
The City’s two enterprise activities, Augusta Civic Center and Hatch Hill Landfill are reported here. Unlikegovernmental services, these services are supported by charges paid by users based on the amount of servicethey use.
The Government-wide Financial Statements are prepared on the accrual basis, which means they measure theflow of all economic resources of the City as a whole.
Fund Financial Statements
The Fund Financial Statements provide detailed information about each of the City’s most significant funds, called Major Funds. The concept of Major Funds, and the determination of which are Major Funds, was established by GASB Statement 34, and replaces the concept of combining like funds and presenting them in total. Instead, each Major Fund is presented individually, with all Nonmajor Funds summarized and presented only in a single column. Subordinate schedules present the detail of these Nonmajor Funds. Major Funds present the major activities of the City for the year, and may change from year to year as a result of changes in the pattern of the City’s activities.
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CITY OF AUGUSTA, MAINEManagement’s Discussion and Analysis, Continued
Fund Financial Statements include Governmental, Enterprise, and Internal Service Funds as discussed below.
Governmental Fund Financial Statements are prepared on the modified accrual basis, which means they measure only current financial resources and uses. Capital assets and other long-lived assets, along with long-term liabilities, are not presented in the Governmental Fund Financial Statements. Enterprise and Internal Service Fund Financial Statements are prepared on the full accrual basis and include all of their assets and liabilities, current and long term.
Comparisons of budget and actual financial information are presented only for the General Fund, as required by GASB 34. Fiduciary Funds are used to account for resources held for the benefit of parties outside of the City.
Fiduciary Funds are not reflected in the Government-wide Financial Statements because the resources of those funds are not available to support the City of Augusta’s own programs. The accounting use for Fiduciary Funds is much like that used for Proprietary Funds.
Financial Activities of the City as a Whole:
This analysis focuses on the net position and changes in net position of the City’s Governmental activities (Table 1) and Business-type activities (Table 4) presented in the citywide statement of net position and statement ofactivities.
Capital assets increased by 3.9% or $3 million. The City’s long-term liabilities (which includes the net pension and OPEB liabilities) decreased by $3.8 million. The City’s other liabilities decreased by $4.7 million. The City’s net investment in capital assets represents the largest portion of the total net position. The City uses these capital assets to provide services and transportation infrastructure to citizens, businesses, and visitors. These assets are not available to finance future operations nor are they available to repay outstanding debt. Resources that are subject to external restrictions in their uses represent 106% of net position. The remaining balance is a deficit in unrestricted net position of $39.7 million.
2019
Restated2018
Current and other assets $ 35,255,087 38,003,576
Capital assets 77,934,475 74,944,250
Total assets 113,189,562 112,947,826
Deferred outflows of resources 4,855,706 5,200,583
Long-term liabilities 101,091,482 104,876,514
Other liabilities 4,966,318 9,664,975
Total liabilities 106,057,800 114,541,489
Deferred inflows of resources 4,963,438 1,719,510
Net investment in capital assets 38,219,982 38,168,793
Restricted 8,536,211 9,295,028Unrestricted (39,732,163) (45,576,411)
Total net position $ 7,024,030 1,887,410
Table 1
Governmental Activities Net Position
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CITY OF AUGUSTA, MAINEManagement’s Discussion and Analysis, Continued
Table 2 Governmental Activities Changes in Net Position
2019 2018 Change
Sources of Revenues
Program Revenues:
Charges for services $ 4,724,073 4,697,779 26,294
Operating grants and contributions 23,216,442 22,325,683 890,759
Capital grants and contributions 248,773 361,152 (112,379)
Total program revenues 28,189,288 27,384,614 804,674
General Revenues:
Property and other taxes 40,627,348 38,330,877 2,296,471
Grants and contributions not restricted to
specific programs 2,787,053 2,339,671 447,382
Licenses, permits and fees 324,269 296,856 27,413
Unrestricted investment income 910,480 129,847 780,633
Other 46,390 92,137 (45,747)
Total general revenues 44,695,540 41,189,388 3,506,152
Total revenues 72,884,828 68,574,002 4,310,826
Functional Expenses:
Legislative and executive 558,937 538,965 19,972
Finance and administration 3,978,356 3,374,470 603,886
Development services 2,536,393 2,871,149 (334,756)
Community services 3,695,504 3,554,495 141,009
Public safety 10,953,000 10,117,451 835,549
Public works 4,090,959 4,008,239 82,720
Education 35,446,188 33,797,350 1,648,838
Retirement and insurance 1,034,314 2,566,453 (1,532,139)
Utilities 2,494,794 2,617,504 (122,710)
Unclassified 341,910 1,859,716 (1,517,806)
Interest on debt 270,711 118,732 151,979
Central garage 1,980,917 1,814,373 166,544
Capital maintenance 366,225 87,452 278,773 Total expenses 67,748,208 67,326,349 421,859
Increase (decrease) in net position 5,136,620 1,247,653 3,888,967
Net position – beginning of year, restated 1,887,410 7,518,250 (5,630,840)
Net position – end of year $ 7,024,030 8,765,903 (1,741,873)
*This table has not been restated for the addition of an OPEB liability associated with health insurance for theSchool Department. The effects of this implementation on individual revenues and expenses during 2018 could notbe determined.
Governmental activities resulted in an increase in net position of $5.1 million. Program revenues increased $0.8million, with capital grants and contributions decreasing by $0.1 million. Charges for services increased by $0.03 million. The State and Federal government increased operating grants and contributions by $0.9 million as compared to FY 2018. General revenues increased $3.5 million. Property and other taxes increased $2.3 million and unrestricted investment income increased $0.8 million. Other revenues decreased by $0.05 million and grants and contributions not restricted to specific programs increased $0.4 million.
8
CITY OF AUGUSTA, MAINEManagement’s Discussion and Analysis, Continued
Source of Revenues
As the source of revenues chart above shows, 56% of the City’s fiscal 2019 governmental activities revenues came from property and other taxes, and 32% from operating grants and contributions. The remaining 12% came from charges for services (6%), grants and contributions not restricted to specific programs (4%), capital grants and contributions (0.34%) and other (1.76%).
Functional Expenses
Property and other taxes56%
Operating grants and contributions
32%
Capital grants and contributions
0.34%
Charges for services6%
Grants and contributions not restricted to specific
programs4% All other
1.76%
Education 52%
Public safety16%
Finance and administration
6%
Development services
4%
Insurance and retirement
2%
Public works6%
Community services5%
Utilities4%
Unclassified0.5%
Central garage3% All other
1.5%
9
CITY OF AUGUSTA, MAINEManagement’s Discussion and Analysis, Continued
The functional expenses chart reflects only current year expenses, which are discussed below. Education accounted for 52% and municipal services 48% of expenses. Public safety accounted for 16% of total expenses. Finance and administration along with insurance and retirement were 8% of expenses, development services accounted for 4%, community services for 5%, and public works accounted for 6% of total expenses. Utilities, unclassified and central garage accounted for 7.5%. Legislative and executive, capital maintenance, and interest on non-educational debtcombined totaled 1.5% of expenses.
Expenses do not include capital outlays, which are capitalized to the City’s capital assets. In 2019, governmental capital assets, net of depreciation, increased $2.99 million. Capital assets not being depreciated decreased $3.2million. Capital assets being depreciated increased $9.7 million and accumulated depreciation increased $3.5 million.
Governmental Activities:
Table 3 presents the net expenses of each of the City’s largest programs. Net expense is defined as total program cost less the revenue generated by those specific activities. Net expenses totaled $39.5 million, as the City is dependent on general revenues for 58% of expenses. Overall, program revenues reduced program expenses by an average of 42% of total expenses. Additionally, governmental activities net expenses decreased $0.39 million or1%. The City’s program revenues include charges for services, State subsidies, and operating and capital grants and contributions.
Table 3Governmental Activities – Net (Expense) Revenue
(In Millions)
2019 2018 Variance
Legislative and executive $ (0.56) (0.52) (0.04)
Finance and administration (3.48) (2.63) (0.85)
Development services (1.86) (2.11) 0.25
Community services (2.45) (2.35) (0.10)
Public safety (8.44) (7.56) (0.88)
Public works (3.53) (3.39) (0.14)
Education (13.23) (13.09) (0.14)
Retirement and insurance (1.03) (2.57) 1.54
Utilities (2.49) (2.62) 0.13
Unclassified (0.34) (1.84) 1.50
Interest on debt (0.27) (0.12) (0.15)
Central garage (1.65) (1.41) (0.24)
Capital maintenance expenses (0.21) 0.27 (0.48)
Total $ (39.54) (39.94) 0.40
10
CITY OF AUGUSTA, MAINEManagement’s Discussion and Analysis, Continued
Table 4Business-type Net Position
(In Millions)
2019 2018 Variance
Current and other assets $ 6.39 8.54 (2.15) Capital assets 10.54 8.16 2.38
Total assets 16.93 16.70 0.23
Long-term liabilities 7.99 10.08 (2.09) Other liabilities 1.40 0.59 0.81
Total liabilities 9.39 10.67 (1.28)
Net investment in capital assets 8.80 5.54 3.26Unrestricted (1.27) 0.49 (1.76)
Total net position $ 7.53 6.03 1.50
Business-type activities net position increased by $1.4 million in fiscal year 2019. The increase in net position is attributable to operating revenues of $6.4 million, being offset by operating expenses of $5.1 million, nonoperating expense (primarily interest expense) of $0.03 million and a transfer in of $0.05 million.
The City’s Fund Financial Statements
Governmental Funds
At June 30, 2019, the City’s governmental funds reported a combined fund balance of $28.7 million. The governmental fund balance is comprised of the following; General Fund $15.7 million and Other Funds $13 million.
Government funds revenues totaled $72.6 million with expenditures totaling $78.6 million, a deficiency of revenues under expenditures of $6 million. Other financing sources and uses netted $3.5 million, resulting in a net decreaseof fund balance by $2.5 million. The General Fund had an increase in fund balance of $0.7 million and Other Governmental Funds had a decrease of $3.2 million.
Proprietary Funds
Proprietary Funds net position increased by $1.4 million for FY 2019. Proprietary Funds operating revenues were$6.4 million, with operating expenses of $5.1 million producing an operating income of $1.4 million. Nonoperatingexpenses were $0.03 million and transfers in, including capital contributions, were $0.05 million.
Analysis of Major Governmental Funds
General Fund
General fund revenues increased $4 million or 7.4%. The City’s two primary revenue sources, taxes and intergovernmental revenues, which account for 92.4% of revenues, had a 0.8% or $0.4 million increase. Taxes had a 0.6% positive variance or $0.2 million and intergovernmental revenues ran a positive variance of 1.2% or $0.2million. Tuition and other educational charges had a negative variance of 20.7% or ($0.1) million. Municipal chargesfor services had a negative variance of ($0.2) million. Unclassified revenues had a positive variance of $0.2 milliondue to property rents, miscellaneous education revenues, miscellaneous public works revenue and miscellaneous public safety revenues. Investment earnings had a positive variance of $0.8 million.
11
CITY OF AUGUSTA, MAINEManagement’s Discussion and Analysis, Continued
General fund expenditures had a budgetary surplus of 2.5% or $1.6 million. Educational expenditures had a budgetary surplus of 2.9% or $0.9 million.
Other Governmental Funds
These funds are not presented in detail in the Basic Financial Statements but are presented as exhibits for supplemental information.
Proprietary Funds
Augusta Civic Center
Net position of the Civic Center decreased $0.3 million for FY 2019. Net position totaled $2.9 million of which $3 million represents net investment in capital assets, and ($0.07) million in unrestricted net position. The Civic Center had net operating income of $0.2 million, with a nonoperating expense of ($0.04) million and a transfer in, which includes capital contributions, of $0.01 million.
Hatch Hill Landfill
Net position of the regional Hatch Hill Landfill increased $1.1 million in fiscal 2019. Net position totaled $4.6 millionof which $5.8 million represents net investment in capital assets, and ($1.2) million in unrestricted net position. Net operating income totaled $1.2 million, non-operating expense totaled $0.01 million and a transfer out of ($0.05) million.
Central Garage (Internal Service Fund)
Net position of the Central Garage Fund decreased by $0.02 million in FY 2019. $2.8 million of net positionrepresented net investment in capital assets and unrestricted net position totaled $0.8 million. The Central Garage Fund had net operating income of $5,206, non-operating revenue of $6,048, and net transfers out/capital contributions totaling $29,237.
Capital Assets
GASB 34 requires the City to record all its capital assets, including infrastructure. Infrastructure assets include roads, sidewalks, and similar assets used by the entire population.
In fiscal 2003, the City recorded the cost of all its infrastructure assets based upon their original acquisition dates and computed the accumulated depreciation for these assets. At the end of fiscal 2019, the cost of infrastructure and other capital assets of Governmental activities recorded on the City’s financial statements net of depreciationwas $77.9 million, an increase of $3 million or 3.9%. The City’s investment in capital assets increased by $6.5 millionand accumulated depreciation increased by $3.5 million.
12
CITY OF AUGUSTA, MAINEManagement’s Discussion and Analysis, Continued
The capital assets of the business-type activities increased due to projects at Hatch Hill Landfill. Table 5 reflects capital assets at June 30, 2019, by Governmental activities and Business-type activities.
Table 5Capital Assets at Year End
Restated
2019 2018 Change
Governmental activities:
Land $ 1,500,302 1,500,302 -
Construction in progress 1,772,089 4,969,840 (3,197,751)
Buildings and improvements 88,478,711 79,796,247 8,682,464
Machinery, vehicles, and equipment 9,119,067 8,146,340 972,727
Infrastructure 40,589,345 40,589,345 -
Internal service fund equipment 6,282,789 6,217,533 65,256
Less: Accumulated depreciation (69,807,828) (66,275,357) (3,532,471)
77,934,475 74,944,250 2,990,225
Business-type activities:
Land 488,211 488,211 -
Construction in progress 210,571 822,554 (611,983)
Buildings and improvements 10,342,593 10,342,593 -
Machinery and equipment 1,499,215 1,426,015 73,200
Landfill 6,540,633 4,295,122 2,245,511
Less: Accumulated depreciation (8,542,177) (9,121,836) 579,659
$ 10,539,046 8,252,659 2,286,387
The City depreciates all its capital assets over their estimated useful lives, as required by GASB 34. The purpose of depreciation is to spread the cost of capital assets over the years of its useful life so that an allocable portion of the cost of the asset is born by all users.
Debt Administration
The City’s governmental activities total bonded indebtedness at June 30, 2019 was $44.9 million, a decrease of $1.9 million. Business-type activities total bonded indebtedness totaled $1.5 million a decrease of $0.9 million. The combined indebtedness totals $46.4 million at June 30, 2019, a decrease of $2.8 million.
Contacting the City’s Financial Management
This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the City’s finances and to show the City’s accountability for the money it receives. If you have any questions about this report or need additional information, contact the City Manager’s office at 207-626-2300.
BASIC FINANCIAL STATEMENTS
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Statement 1
CITY OF AUGUSTA, MAINE
Statement of Net PositionJune 30, 2019
Governmental Business-type
Activities Activities Total
ASSETS
Cash and cash equivalents 24,975,799$ 164,642 25,140,441
Investments 12,207,175 - 12,207,175
Receivables:
Taxes 894,849 - 894,849
Tax liens 334,152 - 334,152
Due from other governments 1,360,073 - 1,360,073
Accounts (net of allowance for uncollectibles) 444,626 444,150 888,776
Notes 145,000 - 145,000
Internal balances (5,442,878) 5,442,878 -
Inventories 161,879 35,773 197,652
Prepaid expenses 174,412 39,707 214,119
Capital assets, not being depreciated 3,272,391 698,782 3,971,173
Capital assets, net of accumulated depreciation 74,662,084 9,840,264 84,502,348
Total assets 113,189,562 16,666,196 129,855,758
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows of resources related to pensions 3,499,009 - 3,499,009
Deferred outflows of resources related to OPEB 1,356,697 - 1,356,697
Total deferred outflows of resources 4,855,706 - 4,855,706
LIABILITIES
Accounts payable and other current liabilities 1,984,549 114,619 2,099,168
Accrued payroll and benefits 2,683,865 24,309 2,708,174
Escrow payable and refundable deposits 39,692 120,935 160,627
Taxes paid in advance 4,447 - 4,447
Accrued interest 253,765 - 253,765
Noncurrent liabilities:
Due within one year 4,895,653 883,795 5,779,448
Due in more than one year 96,195,829 7,989,932 104,185,761
Total liabilities 106,057,800 9,133,590 115,191,390
DEFERRED INFLOWS OF RESOURCES
Deferred charge on refunding 780,000 - 780,000
Deferred inflows of resources related to pensions 2,201,619 - 2,201,619
Deferred inflows of resources related to OPEB 1,981,819 - 1,981,819
Total deferred inflows of resources 4,963,438 - 4,963,438
NET POSITION
Net investment in capital assets 38,219,982 8,800,828 47,020,810
Restricted for:
Permanent Funds - Nonexpendable principal 502,721 - 502,721
Permanent Funds - Expendable 135,436 - 135,436
Education 2,977,102 - 2,977,102
Grants and restricted programs 1,410,123 - 1,410,123
Tax Increment Financing 3,510,829 - 3,510,829
Unrestricted (39,732,163) (1,268,222) (41,000,385)
Total net position 7,024,030$ 7,532,606 14,556,636
See accompanying notes to basic financial statements.
15
Statement 2
CITY OF AUGUSTA, MAINE
Statement of ActivitiesFor the Year Ended June 30, 2019
Operating Capital
Charges for grants and grants and Governmental Business-typeFunctions/programs Expenses services contributions contributions activities activities Total
Primary government:
Governmental activities:
Legislative and executive $ 558,937 - - - (558,937) - (558,937)
Finance and administration 3,978,356 321,541 175,376 - (3,481,439) - (3,481,439)
Development services 2,536,393 237,131 387,522 55,849 (1,855,891) - (1,855,891)
Community services 3,695,504 694,598 547,116 - (2,453,790) - (2,453,790)
Public safety 10,953,000 1,996,889 518,685 - (8,437,426) - (8,437,426)
Public works 4,090,959 77,091 441,392 38,603 (3,533,873) - (3,533,873)
Education 35,446,188 1,069,860 21,146,351 - (13,229,977) - (13,229,977)
Retirement and insurance 1,034,314 - - - (1,034,314) - (1,034,314)
Utilities 2,494,794 - - - (2,494,794) - (2,494,794)
Unclassified 341,910 - - - (341,910) - (341,910)
Interest on debt 270,711 - - - (270,711) - (270,711)
Central garage 1,980,917 326,963 - - (1,653,954) - (1,653,954)
Capital maintenance 366,225 - - 154,321 (211,904) - (211,904)
Total governmental activities 67,748,208 4,724,073 23,216,442 248,773 (39,558,920) - (39,558,920)
Business-type activities:
Augusta Civic Center 2,850,177 3,036,887 - - - 186,710 186,710
Hatch Hill Landfill 2,256,918 3,411,497 - - - 1,154,579 1,154,579
Total business-type activities 5,107,095 6,448,384 - - - 1,341,289 1,341,289
Total primary government $ 72,855,303 11,172,457 23,216,442 248,773 (39,558,920) 1,341,289 (38,217,631)
General revenues:
Property taxes, levied for general purposes 37,254,676$ - 37,254,676
Motor vehicle excise taxes 3,372,672 - 3,372,672
Licenses and permits 221,108 - 221,108
Cable TV franchise fee 103,161 - 103,161
Grants and contributions not restricted to specific programs: Homestead exemption 1,043,547 - 1,043,547 Business equipment tax reimbursement 459,930 - 459,930
State Revenue Sharing 1,257,803 - 1,257,803
Other 25,773 - 25,773
Unrestricted investment earnings 910,480 (247) 910,233
Miscellaneous revenues 65,252 - 65,252
Gain on disposal of assets 33,373 18,867 52,240
Transfers (52,235) 52,235 -
Total general revenues, gain on disposal, and transfers 44,695,540 70,855 44,766,395
Change in net position 5,136,620 1,412,144 6,548,764
Net position - beginning, as restated 1,887,410 6,120,462 8,007,872
Net position - ending 7,024,030$ 7,532,606 14,556,636
See accompanying notes to basic financial statements.
Program Revenues in net position
Primary Government
Net (expense) revenue and changes
16
Statement 3
CITY OF AUGUSTA, MAINE
Balance Sheet
Governmental Funds June 30, 2019
Other Total
Governmental Governmental
General Funds Funds
ASSETS
Cash and cash equivalents $ 23,798,072 1,177,727 24,975,799
Investments 11,694,262 512,913 12,207,175
Receivables:
Taxes 894,849 - 894,849
Tax liens 334,152 - 334,152
Due from other governments 479,200 880,873 1,360,073
Accounts (net of allowance for uncollectibles) 339,476 105,150 444,626
Notes - 145,000 145,000
Interfund loans receivable - 11,667,140 11,667,140
Inventory 703 26,139 26,842
Prepaid items 162,020 5,445 167,465
Total assets $ 37,702,734 14,520,387 52,223,121
LIABILITIES
Accounts payable and other accrued liabilities 936,447 998,648 1,935,095
Accrued payroll and benefits 2,580,567 143,924 2,724,491
Escrow payable 39,692 - 39,692
Taxes paid in advance 4,447 - 4,447
Interfund loans payable 17,508,236 392,448 17,900,684
Total liabilities 21,069,389 1,535,020 22,604,409
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - property taxes 909,003 - 909,003
Total deferred inflows of resources 909,003 - 909,003
FUND BALANCES
Nonspendable 162,723 534,305 697,028
Restricted 2,977,102 8,081,228 11,058,330
Committed - 4,476,109 4,476,109
Assigned 4,195,247 - 4,195,247
Unassigned - budget stabilization 1,200,000 - 1,200,000
Unassigned 7,189,270 (106,275) 7,082,995
Total fund balances 15,724,342 12,985,367 28,709,709
Total liabilities, deferred inflows of resources, and fund balances $ 37,702,734 14,520,387
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not financial resources and, therefore,
are not reported in the funds. 75,097,142
Other long-term assets are not available to pay for current period expenditures
and, therefore, are deferred in the funds. 909,003
Internal service funds are used by management to charge the costs of fleet management
to individual funds. The assets and liabilities of the internal service funds are included
in governmental activities in the statement of net position. 3,675,349
Long-term liabilities that are not due and payable in the current
period and therefore are not reported in the funds:
Accrued compensated absences (4,462,007)
Accrued interest (253,765)
Net pension liability with related deferred outflows and inflows of resources (7,273,617)
Capital leases (3,162,028)
OPEB liabilities with related deferred outflows and inflows of resources (39,976,053)
Bonds payable, including deferred charges and unamortized premiums (46,239,703)
Net position of governmental activities $ 7,024,030
See accompanying notes to basic financial statements.
17
Statement 4
CITY OF AUGUSTA, MAINE
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental FundsFor the year ended June 30, 2019
Other Total
Governmental Governmental
General Funds Funds
Revenues:
Taxes $ 35,208,441 5,401,649 40,610,090
Licenses and permits 221,108 - 221,108
Intergovernmental 20,677,144 4,723,886 25,401,030
Tuition and other charges - education 511,120 - 511,120
Charges for services 2,077,459 1,650,484 3,727,943
Fees and fines 60,159 - 60,159
Unclassified 701,631 415,908 1,117,539
Investment earnings (loss) 880,577 29,903 910,480
Total revenues 60,337,639 12,221,830 72,559,469
Expenditures:
Current:
Legislative and executive 564,453 - 564,453
Finance and administration 1,823,705 2,129,797 3,953,502
Development services 1,733,740 659,424 2,393,164
Community services 2,660,318 809,992 3,470,310
Public safety 10,105,637 515,385 10,621,022
Public works 4,129,917 157,388 4,287,305
Education 31,957,819 4,557,195 36,515,014
Retirement and insurance 2,584,613 - 2,584,613
Utilities 2,494,794 - 2,494,794
Unclassified 1,583,461 15,800 1,599,261
Debt service (excluding education) 3,128,347 - 3,128,347
Capital outlay - 6,951,989 6,951,989
Total expenditures 62,766,804 15,796,970 78,563,774
Excess (deficiency) of revenues over (under) expenditures (2,429,165) (3,575,140) (6,004,305)
Other financing sources (uses):
Issuance of debt - 2,326,000 2,326,000
Premium on issuance of debt - 69,780 69,780
Lease proceeds - 1,150,000 1,150,000
Transfers from other funds 3,176,612 - 3,176,612
Transfers to other funds - (3,199,610) (3,199,610)
Total other financing sources (uses) 3,176,612 346,170 3,522,782
Net change in fund balances 747,447 (3,228,970) (2,481,523)
Fund balances, beginning of year 14,976,895 16,214,337 31,191,232
Fund balances, end of year $ 15,724,342 12,985,367 28,709,709
See accompanying notes to basic financial statements.
18
Statement 5
CITY OF AUGUSTA, MAINE
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds
to the Statement of ActivitiesFor the year ended June 30, 2019
Net change in fund balances - total governmental funds (from Statement 4) (2,481,523)$
Amounts reported for governmental activities in the statement of
activities (Statement 2) are different because:
Governmental funds report capital outlays as expenditures.
However, in the statement of activities, the cost of those assets
is allocated over their estimated useful lives as depreciation expense.
This is the amount by which capital outlay ($6,557,437) and gain
on disposal ($19,881) exceeded depreciation expense ($3,442,446). 3,134,872
Revenues in the statement of activities that do not provide
current financial resources are not reported as revenues in
the funds. 17,258
Capital lease proceeds provide current financial resources to
governmental funds, but issuing debt increases long-term
liabilities in the statement of net position. Repayment of lease
principal is an expenditure in the governmental funds, but the
repayment reduces long-term liabilities in the statement of net
position. This is the amount by which capital lease proceeds ($1,150,000)
exceeded principal repayments ($444,795). (705,205)
Change in accruals are recorded on the statement of net position, but
not on the governmental fund balance sheet - increase in accrued
compensated absences ($260,242) and the decrease
in net pension liability with related deferred outflows
and inflows of resources ($3,140,977) and other post-employment
benefits liability with related deferred outflows and inflows of
of resources ($503,573) and accrued interest ($198). 3,384,506
Bond and note proceeds provide current financial resources to governmental
funds, but issuing debt increases long-term liabilities in the statement
of net position. During the year, the City issued bonds in the amount
of $2,326,000 and premiums to be amortized totaling $69,780. The City
had amortization on deferred charges on refunding debt of $95,000 and
bond premiums of $38,688. Repayment of bond and note principal is an
expenditure in the governmental funds, but the repayment reduces long-term
liabilities in the statement of net position. Principal repayments
totaled $4,256,787. 1,804,695
Internal service funds are used by management to charge the costs
of fleet management to individual funds. The net revenue of certain
activities of internal service funds is reported with governmental
activities. (17,983)
Change in net position of governmental activities (see Statement 2) 5,136,620$
See accompanying notes to basic financial statements.
19
Statement 6
CITY OF AUGUSTA, MAINE
Statement of Revenues, Expenditures, and Changes in Fund Balance
Budget and Actual
General FundFor the year ended June 30, 2019
Variance with
final budget
positive
Original Final Actual (negative)
Revenues:
Taxes $ 35,011,816 35,011,816 35,208,441 196,625
Licenses and permits 129,795 129,795 221,108 91,313
Intergovernmental 18,239,071 18,239,071 18,463,578 224,507
Tuition and other charges - education 645,000 645,000 511,120 (133,880)
Charges for services 2,243,868 2,243,868 2,077,459 (166,409)
Fees and fines 50,440 50,440 60,159 9,719
Unclassified 483,808 483,808 676,831 193,023
Investment earnings 102,975 102,975 880,577 777,602
Total revenues 56,906,773 56,906,773 58,099,273 1,192,500
Expenditures:
Current:
Legislative and executive 593,631 616,516 588,759 27,757
Finance and administration 1,879,516 1,901,243 1,853,211 48,032
Development services 1,749,060 1,811,473 1,746,745 64,728
Community services 2,728,947 2,741,829 2,671,006 70,823
Public safety 9,983,480 10,025,849 10,126,596 (100,747)
Public works 4,284,950 4,423,588 4,300,556 123,032
Education 30,506,395 30,687,958 29,786,632 901,326
Retirement and insurance 2,927,018 2,934,518 2,592,113 342,405
Utilities 2,638,355 2,638,355 2,494,794 143,561
Unclassified 1,583,461 1,583,461 1,583,461 -
Debt service (excluding education) 3,077,957 3,077,957 3,128,347 (50,390)
Total expenditures 61,952,770 62,442,747 60,872,220 1,570,527
Excess (deficiency) of revenues
over (under) expenditures (5,045,997) (5,535,974) (2,772,947) 2,763,027
Other financing sources (uses):
Budgeted utilization of surplus - City 1,436,683 1,436,683 - (1,436,683)
Budgeted utilization of surplus - Education 1,323,299 1,323,299 - (1,323,299)
Use of prior year encumbrances - City - 308,414 - (308,414)
Use of prior year encumbrances - Education - 181,563 - (181,563)
Transfers from other funds 3,054,946 3,054,946 3,192,612 137,666
Total other financing sources (uses) 5,814,928 6,304,905 3,192,612 (3,112,293)
Net change in fund balance - budgetary basis 768,931 768,931 419,665 (349,266)
Reconciliation to GAAP basis:
Add back encumbrances expended in budgetary - City 291,304
Add back encumbrances expended in budgetary - Education 42,379
Change in reserves (5,901)
Net change in fund balance - GAAP basis 747,447
Fund balance, beginning of year 14,976,895
Fund balance, end of year $ 15,724,342
See accompanying notes to basic financial statements.
Budgeted amounts
20
Statement 7
CITY OF AUGUSTA, MAINE
Statement of Net Position
Proprietary Funds June 30, 2019
Business-type Activities - Enterprise Funds
Augusta Hatch Governmental
Civic Hill Activities -
Center Landfill Totals Internal Service
ASSETS
Current assets:
Cash and cash equivalents $ 164,642 - 164,642 -
Accounts receivable 246,076 198,074 444,150 -
Interfund loans receivable - 5,703,209 5,703,209 791,176
Prepaid expenses 7,393 32,314 39,707 6,947
Inventories 35,773 - 35,773 135,037
Total current assets 453,884 5,933,597 6,387,481 933,160
Noncurrent assets:
Property, plant, and equipment:
Land 390,000 98,211 488,211 -
Construction in progress 118,783 91,788 210,571 -
Buildings and improvements 10,319,221 23,372 10,342,593 1,012,503
Equipment and vehicles 464,556 1,034,659 1,499,215 6,282,789
Hatch Hill landfill system - 6,540,633 6,540,633 -
Less accumulated depreciation (7,062,090) (1,480,087) (8,542,177) (4,457,959)
Total noncurrent assets 4,230,470 6,308,576 10,539,046 2,837,333
Total assets 4,684,354 12,242,173 16,926,527 3,770,493
LIABILITIES
Current liabilities:
Accounts payable 34,386 80,233 114,619 49,964
Accrued payroll and benefits 17,219 7,090 24,309 7,107
Refundable deposits 120,935 - 120,935 -
Interfund loans payable 260,331 - 260,331 -
Current portion of bonds payable 367,570 485,000 852,570 -
Current portion of capital leases payable 31,225 - 31,225 -
Total current liabilities 831,666 572,323 1,403,989 57,071
Noncurrent liabilities:
Bonds payable 605,070 - 605,070 -
Capital leases 249,353 - 249,353 -
Accrued compensated absences 94,752 21,212 115,964 38,073
Interim landfill closure accrual - 294,188 294,188 -
Accrued landfill closure and postclosure costs - 6,725,357 6,725,357 -
Total noncurrent liabilities 949,175 7,040,757 7,989,932 38,073
Total liabilities 1,780,841 7,613,080 9,393,921 95,144
NET POSITION
Net investment in capital assets 2,977,252 5,823,576 8,800,828 2,837,333
Unrestricted (73,739) (1,194,483) (1,268,222) 838,016
Total net position $ 2,903,513 4,629,093 7,532,606 3,675,349
See accompanying notes to basic financial statements.
21
Statement 8
CITY OF AUGUSTA, MAINE
Statement of Revenues, Expenses, and Changes in Net Position
Proprietary FundsFor the year ended June 30, 2019
Business-type Activities - Enterprise Funds
Augusta Hatch Governmental
Civic Hill Activities
Center Landfill Totals Internal Service
Operating revenues:
Rental income $ 1,188,242 - 1,188,242 -
Fees 6,702 3,410,938 3,417,640 1,949,720
Advertising 100,275 - 100,275 -
Food and beverage sales 1,732,371 - 1,732,371 -
Miscellaneous 9,297 559 9,856 28,959
Total operating revenues 3,036,887 3,411,497 6,448,384 1,978,679
Operating expenses:
Personnel services 1,474,030 502,394 1,976,424 540,948
Contractual services 467,605 593,567 1,061,172 68,475
Supplies and materials 596,313 243,666 839,979 887,509
Fixed charges 32,068 490,900 522,968 17,942
Capital outlay 3,288 33,635 36,923 7,710
Depreciation 236,287 386,291 622,578 450,889
Total operating expenses 2,809,591 2,250,453 5,060,044 1,973,473
Operating income (loss) 227,296 1,161,044 1,388,340 5,206
Nonoperating revenue (expense):
Investment income (loss) - (247) (247) -
Interest expense (40,586) (6,465) (47,051) (7,444)
Gain (loss) on disposal of assets - 18,867 18,867 13,492
Total nonoperating revenue (expense) (40,586) 12,155 (28,431) 6,048
Net income (loss) before transfers 186,710 1,173,199 1,359,909 11,254
Transfers and contributions:
Transfer from (to) other funds 106,937 (54,702) 52,235 (29,237)
Total transfers and contributions 106,937 (54,702) 52,235 (29,237)
Change in net position 293,647 1,118,497 1,412,144 (17,983)
Total net position, beginning of year as restated 2,609,866 3,510,596 6,120,462 3,693,332
Total net position, end of year $ 2,903,513 4,629,093 7,532,606 3,675,349
See accompanying notes to basic financial statements.
22
Statement 9
CITY OF AUGUSTA, MAINE
Statement of Cash Flows - Proprietary FundsFor the year ended June 30, 2019
Augusta Hatch Governmental
Civic Hill Activities
Center Landfill Totals Internal Service
Cash flows from operating activities:
Receipts from customers and users $ 2,959,258 3,437,844 6,397,102 1,978,679
Payments to suppliers (1,089,508) (1,831,544) (2,921,052) (965,265)
Payments to employees (1,489,599) (502,764) (1,992,363) (546,271)
Payments for internal services used (10,540) (171,634) (182,174) -
Net cash provided by (used in) operating activities 369,611 931,902 1,301,513 467,143
Cash flows from non-capital financing activities:
Transfers from (to) other funds 106,937 (54,702) 52,235 (29,237)
(Increase) decrease in interfund loans 113,845 2,388,727 2,502,572 (137,714)
Net cash provided by (used in) non-capital financing activities 220,782 2,334,025 2,554,807 (166,951)
Cash flows from capital and related financing activities:
Purchase of capital assets (115,882) (2,794,215) (2,910,097) (306,240)
Proceeds from sale of assets - 20,000 20,000 13,492
Bond, note, and lease principal payments (397,918) (485,000) (882,918) -
Interest paid (40,586) (6,465) (47,051) (7,444)
Net cash provided by (used in) capital financing activities (554,386) (3,265,680) (3,820,066) (300,192)
Cash flows from investing activities:
Investment income (loss) - (247) (247) -
Net cash provided by (used in) investing activities - (247) (247) -
Change in cash and cash equivalents 36,007 - 36,007 -
Cash and cash equivalents, beginning of year 128,635 - 128,635 -
Cash and cash equivalents, end of year $ 164,642 - 164,642 -
Reconciliation of operating income (loss) to net cash
provided by (used in) operating activities:
Operating income (loss) $ 227,296 1,161,044 1,388,340 5,206
Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:
Depreciation 236,287 386,291 622,578 450,889
(Increase) decrease in operating assets:
Accounts receivable (76,911) 26,685 (50,226) -
Prepaid expenses 7,337 (23,263) (15,926) 1,523
Inventories 12,867 - 12,867 (7,575)
Increase (decrease) in operating liabilities:
Accounts payable (20,978) (182,158) (203,136) 22,423
Accrued payroll and benefits (2,382) (674) (3,056) (615)
Accrued compensated absences (13,187) 304 (12,883) (4,708)
Refundable deposit (718) (338) (1,056) -
Interim landfill closure accrual - (705,273) (705,273) -
Accrued landfill closure and postclosure costs - 269,284 269,284 -
Net cash provided by (used in) operating activities 369,611 931,902 1,301,513 467,143
See accompanying notes to basic financial statements.
Business-type Activities - Enterprise Funds
23
Statement 10
CITY OF AUGUSTA, MAINE
Statement of Fiduciary Net Position
Fiduciary FundsJune 30, 2019
Private-
purpose
Trust Student
Funds Activities
ASSETS
Cash and cash equivalents $ 59,528 219,790
Investments 669,621 - Total assets 729,149 219,790
LIABILITIES
Interfund loans payable 510 -
Due to others - 219,790Total liabilities 510 219,790
NET POSITIONHeld in trust $ 728,639 -
See accompanying notes to basic financial statements.
Agency Funds
24
Statement 11
Private-
purpose
Trust
Funds
Additions:
Donations $ 16,490
Investment income (loss) 28,906
Total additions 45,396
Deductions:
Scholarships and other 32,874
Total deductions 32,874
Change in net position 12,522
Net position, beginning of year 716,117
Net position, end of year $ 728,639
See accompanying notes to basic financial statements.
CITY OF AUGUSTA, MAINE
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the year ended June 30, 2019
25
26
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting methods and procedures of the City of Augusta, Maine conform to generally accepted accounting principles (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the City's accounting policies are described below.
A. Reporting Entity
The City of Augusta, Maine was incorporated under the laws of the State of Maine in 1797 and operatesunder a council/manager form of government. As required by accounting principles generally accepted inthe United States of America, the financial statements of the reporting entity include those of the City ofAugusta, Maine (the primary government) and its component units. The decision to include a potentialcomponent unit was made by applying the criteria set forth in accounting principles generally accepted inthe United States of America, which defines the reporting entity as the primary government and thosecomponent units for which the primary government is financially accountable. Financial accountability isdefined as appointment of a voting majority of the component unit's board, and either a) the ability of theprimary government to impose its will on the component unit, or b) the possibility that the componentunit will provide a financial benefit to or impose a financial burden on the primary government.Application of this criterion and determination of type of presentation involves considering whether theactivity benefits the government and/or it citizens, or whether the activity is conducted within thegeographic boundaries of the government and is generally available to its citizens. Based upon theapplication of these criteria, there were no potential component units required to be included in thisreport.
Related Organizations:
There are certain organizations whose governing boards are appointed by the Augusta City Council. TheCity is not financially accountable for these organizations and therefore they are not component units ofthe City, but rather are considered “related organizations”. They are as follows:
Greater Augusta Utilities DistrictAugusta Parking DistrictAugusta Housing AuthorityOld Fort Western FundTrustees of the Lithgow Library and Reading Room
B. Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement ofactivities) report information on all of the nonfiduciary activities of the City. For the most part, the effect ofinterfund activity has been removed from these statements. Governmental activities, which normally aresupported by taxes and intergovernmental revenues, are reported separately from business-type activities,which rely to a significant extent on fees and charges for support.
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CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. The City has elected not to allocate indirect costs among the programs, functions, and segments. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.
C. Measurement Focus, Basis of Accounting, and Basis of Presentation
The government-wide financial statements are reported using the economic resources measurement focusand the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements.Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of thetiming of related cash flows. Property taxes are recognized as revenues in the year for which they are levied.Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by theprovider have been met.
Governmental fund financial statements are reported using the current financial resources measurementfocus and the modified accrual basis of accounting. Revenues are recognized as soon as they are bothmeasurable and available. Revenues are considered to be available when they are collectible within thecurrent period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Cityconsiders tax revenues to be available in the fund financial statements if they are collected within 60 days ofthe end of the current fiscal period. A one-year period is used for revenue recognition for all othergovernmental fund revenues. Expenditures generally are recorded when a liability is incurred, as underaccrual accounting. However, debt service expenditures, as well as certain compensated absences and claimsand judgments, are recorded only when the payment is due.
Those revenues susceptible to accrual are property taxes, ambulance receivables, interest revenue, andcharges for services. Fines, licenses, and permits are not susceptible to accrual because generally they are notmeasurable until received in cash. All other revenue items are considered to be measurable and availableonly when cash is received by the City.
The City reports the following major governmental fund:
The General Fund is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
The City reports the following major proprietary funds:
Hatch Hill Landfill Fund accounts for the operation of a regional solid waste disposal and recycling facility.
Augusta Civic Center Fund accounts for the operation of the City’s Civic Center.
As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the City’s general and enterprise funds and other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s proprietary funds are charges to customers for sales and services; operating expenses include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
D. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources, and Equity
1. Cash and Investments
Cash includes amounts in demand deposits as well as short-term investments with a maturity datewithin three months of the date acquired by the City. State statutes authorize the City to invest inobligations of the U.S. Treasury, commercial paper, corporate bonds and repurchase agreements.
Investments are stated at fair value. For purposes of the statement of cash flows, all highly liquidinvestments with a maturity of three months or less when purchased are considered to be cashequivalents.
2. Interfund Receivables/Payables
Transactions between funds that are representative of lending/borrowing arrangements outstanding atthe end of the fiscal year are referred to as interfund loans or as interfund advances (i.e., thenoncurrent portion of interfund loans). Any residual balances outstanding between governmentalactivities and business-type activities are reported in the government-wide financial statements as“internal balances.”
3. Inventories
Inventories are valued at cost, which approximates market, using the first-in/first-out (FIFO) method.The costs of inventories are generally recorded as expenditures when consumed rather than whenpurchased.
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
4. Allowance for Doubtful Accounts
The allowance for doubtful accounts is developed based on management’s past experience with thecollectability of customer balances.
5. Prepaid Items
Payments made to vendors for services that will benefit periods beyond June 30, 2019 are recorded asprepaid items.
6. Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges,sidewalks, and similar items), are reported in the applicable governmental or business-type activitiescolumns in the government-wide financial statements. Such assets are recorded at historical cost orestimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisitioncost at the date of donation.
The threshold for capitalizing assets is $10,000 for governmental activities and $5,000 for business typeactivities. The costs of normal maintenance and repairs that do not add to the value of the assets ormaterially extend asset lives are not capitalized. Major outlays for capital assets and improvements arecapitalized as projects are constructed.
Capital assets of the primary government are depreciated using the straight-line method over thefollowing estimated useful lives:
Buildings and building improvements 40 yearsMachinery, vehicles, and equipment 5-25 yearsInfrastructure 20-70 years
7. Deferred Outflows and Inflows of Resources
In addition to assets and liabilities, the statement of net position and balance sheet will sometimesreport separate sections for deferred outflows of resources and deferred inflows of resources. Theseseparate financial statement elements, deferred outflows of resources and deferred inflows ofresources, represent a consumption or acquisition of net position that applies to a future period(s) andso will not be recognized as an outflow of resources (expense) or inflow of resources (revenue) untilthat time. The governmental funds only report one type of deferred inflow of resources, unavailablerevenue from property taxes. These amounts are deferred and recognized as an inflow of resources inthe period that the amounts become available. The governmental activities have deferred outflows andinflows that relate to the net pension and OPEB liabilities, which include the City’s contributionssubsequent to the measurement date, which are recognized as a reduction of the net pension and OPEBliabilities in the subsequent year. They include changes in assumptions, differences between expectedand actual experience, and changes in proportion and differences between City contributions andproportionate share of contributions, which are deferred and amortized over the average expectedremaining service lives of active and inactive members in the plan. They include the net differencebetween projected and actual earnings on pension plan investments, which is deferred and amortizedover a five-year period. Deferred inflows of resources also include deferred charges on refunding, whichresults from the difference in the carrying value of refunded debt and its reacquisition price. Thisamount is deferred and amortized over the shorter of the life of the refunded or refunding debt.
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
30
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
8. Compensated Absences
It is the City’s policy to permit employees to accumulate earned but unused vacation and sick paybenefits. Accrued vacation and sick leave are accrued when incurred in the governmental-wide andproprietary fund financial statements. A liability for these amounts is reported in governmental fundsonly if they have matured, for example, as a result of employee resignations and retirements.
9. Long-term Obligations
In the government-wide financial statements, and proprietary fund types in the fund financial statements,long-term debt and other long-term obligations are reported as liabilities in the applicable governmentalactivities, business-type activities, or proprietary fund type statement of net position. Bond premiums anddiscounts if material to basic financial statements are deferred and amortized over the life of the bondsusing the straight-line method. Bonds payable are reported net of the applicable bond premium ordiscount.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, aswell as bond issuance costs, during the current period. The face amount of debt is reported as otherfinancing sources. Premiums received on debt issuances are reported as other financing sources whilediscounts on debt issuances are reported as other financing uses. Issuance costs, whether or notwithheld from the actual debt proceeds received, are reported as debt service expenditures.
10. Interfund Transactions
Quasi-external transactions are accounted for as revenues, expenditures, or expenses. Transactionsthat constitute reimbursements to a fund for expenditures/expenses initially made from it that areproperly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fundand as reductions of expenditures/expenses in the fund that is reimbursed.
11. Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflowsof resources related to pensions, and pension expense, information about the fiduciary net position ofthe Maine Public Employees Retirement System Consolidated Plan for Participating Local Districts (PLDPlan) and the Maine Public Employees Retirement System State Employee and Teacher Plan (SET Plan)and additions to/deductions from the Plan’s fiduciary net position have been determined on the samebasis as they are reported by the Plan. For this purpose, benefit payments (including refunds ofemployee contributions) are recognized when due and payable in accordance with the benefit terms.Investments are reported at fair value.
12. Other Post-Employment Benefits (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflowsof resources related to OPEB, and OPEB expense, information about the fiduciary net position of theMaine Public Employees Retirement System Consolidated Plan for Participating Local Districts (PLDPlan) and the Maine Public Employees Retirement System State Employee and Teacher Plan (SET Plan)and additions to/deductions from the Plan’s fiduciary net position have been determined on the samebasis as they are reported by the Plan. For this purpose, benefit payments (including refunds ofemployee contributions) are recognized when due and payable in accordance with the benefit terms.Investments are reported at fair value.
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
31
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
13. Fund Equity
Governmental Fund fund balance is reported in five classifications that comprise a hierarchy basedprimarily on the extent to which the City is bound to honor constraints on the specific purposes forwhich those funds can be spent. The five classifications of fund balance for the Governmental Fundsare as follows:
Nonspendable – resources which cannot be spent because they are either a) not in spendable formor; b) legally or contractually required to be maintained intact.
Restricted – resources with constraints placed on the use of resources which are either a) externallyimposed by creditors (such as through debt covenants), grantors, contributors or laws orregulations of other governments or; b) imposed by law through constitutional provisions orenabling legislation.
Committed – resources which are subject to limitations the City imposes on itself at its highest levelof decision making authority, and that remain binding unless removed in the same manner.
Assigned – resources that are constrained by the City’s intent to be used for specific purposes, butare neither restricted nor committed.
Unassigned – resources which have not been assigned to other funds and that have not beenrestricted, committed, or assigned to specific purposes within the General Fund. The General Fundshould be the only fund that reports a positive unassigned fund balance amount.
The City Council has the responsibility for committing fund balance amounts and likewise would be required to modify or rescind those commitments. The City Council, Board of Education, or a body or official delegated by the City Council or Board of Education may assign unspent budgeted amounts to specific purposes in the General Fund at year end based on Department requests.
Although not a formal policy, when both restricted and unrestricted resources are available for use, it is the City’s intent to use restricted resources first, then unrestricted resources as they are needed. When committed, assigned, and unassigned resources are available for use, it is the City’s intent to use committed or assigned resources first, and then unassigned resources as they are needed.
14. Use of Estimates
Preparation of the City’s financial statements requires management to make estimates andassumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities anddeferred inflows of resources and disclosure of contingent items at the date of the financial statementsand the reported amounts of revenues and expenses/expenditures during the reporting period. Actualresults could differ from those estimates.
15. Comparative Data
Comparative data for the prior year have been presented only for certain funds in the fund financialstatements in order to provide an understanding of the changes in the financial position and operationsof these funds. Also, certain amounts presented in the prior year data have been reclassified in order tobe consistent with the current year’s presentation.
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
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STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. Budgets
The City utilizes a formal budgetary accounting system to control revenues and expenditures accounted forin the General Fund. These budgets are established in accordance with the various laws which govern theCity's operations. Historically, the budget has been prepared on a modified accrual basis of accounting.
The City charter requires that new budgets be submitted to the City Council not later than 90 days prior tothe beginning of the new fiscal year, and the City Council shall make a reasonable effort to pass an annualappropriation resolve not later than 30 days prior to the beginning of that fiscal year.
Hearings are held to obtain public comments. The budget is legally enacted at the department levelthrough the passage of an appropriation resolve. Any revisions to the budget that alter total expendituresmust be approved by the Council. By state law, that portion appropriated for educational purposes mustbe validated through a referendum vote.
All unexpended appropriations lapse at year end unless specific approval is granted to carry forward suchamounts. Department level total expenditures should not exceed appropriations.
Encumbrances represent commitments related to unperformed contracts for goods or services.Encumbrance accounting, under which purchase orders, contracts, and other commitments for theexpenditure of resources are recorded to reserve that portion of the applicable appropriation, is utilized inthe governmental funds. For reporting under accounting principles generally accepted in the United Statesof America, encumbrances outstanding at year end are reported as assigned fund balance and do notconstitute expenditures or liabilities because the commitments will be honored during the subsequentyear.
Each year, the City Manager submits to the City Council a budget for the ensuing fiscal year with anaccompanying budget message. The manager's message explains the budget both in fiscal terms and interms of the work programs. It outlines the proposed financial policies of the City for the coming fiscalyear, describes the important features of the budget, indicates any major changes from the current year infinancial policies, expenditures, and revenues, together with the reasons for such changes, summarizes theCity's debt position, and includes such other material as the manager deems desirable. It also describes thetax impact of the proposed budget.
During the year ended June 30, 2019, the City budgeted to utilize $1,436,683 and the Department of PublicSchools budgeted to utilize $1,323,299 of prior year fund balance as a budgeted use of surplus.
B. Excess of Expenditures over Appropriations
For the year ended June 30, 2019, expenditures exceeded appropriations in the following areas:
Public safety $ 100,747Debt service 50,390
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
33
STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY, CONTINUED
C. Deficit Fund Balances
At June 30, 2019, the following funds had deficit fund balances:
Efficiency Maine $ 3,229 Howard Hill 1,171Cony Farrington Trail Connection 3,015 TIF – all purpose 2,083KRRT Park connection 1,410 Fort Western Trustees 461ADP misc. work highway 16 Augusta Parking District 162Accidents 34,547 OUI grant 118 School misc. work 622 Homeland Security Grant 31,722Recreation – adult 5,388 Regional response team 4,994Pleasant Hill Saw timber 799 Maine Drug Enforcement Agency 2,953MMA safety grant 2,000 DHS law enforcement reimb. 10Title IA – Program Improvement 34 Title III - ESL 1,440College Transition Initiative 10,101
These deficits will be funded by future grant revenue, charges for services, or transfers.
DEPOSITS AND INVESTMENTS
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.
As of June 30, 2019, the City had the following investments, some of which are classified as cash and cash equivalents:
Weighted average Level 1Fair value maturity (years) input
Government mutual fund $ 22,882 N/A yesU.S. Treasury Notes 11,404,820 2.619 yesFederal National Mortgage Association 1,397,384 1.915 yes
Custodial credit risk- deposits – In the case of deposits, this is the risk that in the event of a bank failure, the City’s deposits may not be returned to it. As of June 30, 2019, 100% of the City’s bank balance of $25,753,115 was covered by FDIC insurance, fully insured, or collateralized. In accordance with its investment policy, the City’s funds must be fully covered under FDIC, fully insured or fully collateralized, with pledged collateral being at least 110% of market value of the net amount of public funds secured when marked to market monthly at least 102% of market value of the net amount of public funds secured when marked to market daily.
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
34
DEPOSITS AND INVESTMENTS, CONTINUED
Credit risk – Maine statutes authorize the City to invest in obligations of the U.S. Treasury and U.S. agencies, repurchase agreements and certain corporate stocks and bonds. As of June 30, 2019, all of the City’s investments were rated, at a minimum, AA+ by Standard & Poor’s. In accordance with its investment policy, the City minimizes credit risk by limiting the types of investments to be purchased, pre-qualifying the financial institutions, brokers/dealers, intermediaries, and advisers with which the City will do business, and diversifying the investment portfolio so that the impact of potential losses will be minimized.
Interest rate risk – Interest rate risk arises because potential purchasers of debt securities will not agree to pay face value for those securities if interest rates have subsequently increased. Accordingly, holders of debt securities in the situation just described face the prospect of a loss should those securities be sold prior to maturity, even though cash flows under the debt contract remain unaffected by changes in interest rates. In accordance with its investment policy, the City structures its investment portfolio so securities mature to meet cash requirements for ongoing operations. It invests funds primarily in shorter-term securities, money market mutual funds, or similar investment pools and limits the average maturity of the portfolio.
ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
As of June 30, 2019, the City had the following accounts receivable with allowance for uncollectible account balances:
GeneralFund
Accounts receivable – ambulance service $ 365,050Allowance for uncollectible accounts (102,426)
Accounts receivable, net $ 262,624
PROPERTY TAX
Property taxes for the current year were committed on July 25, 2018, on the assessed value listed as of the prior April 1 for all real and personal property located in the City. Assessed values are periodically established by the City's Assessor at 100% of assumed market value.
The City is permitted by the laws of the State of Maine to levy taxes up to 105% of its net budgeted expenditures for the related fiscal period. The amount raised in excess of 100% is referred to as overlay, and amounted to $768,931 for the year ended June 30, 2019.
Tax liens are placed on real property within twelve months following the tax commitment date if taxes are delinquent. The City has the authority to foreclose on property eighteen months after the filing of the lien if the tax liens and associated costs remain unpaid.
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
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PROPERTY TAX, CONTINUED
Property taxes levied during the year were recorded as receivables at the time the levy was made. The receivables collected during the year and in the first sixty days following the end of the fiscal year have been recorded as revenues. The remaining receivables have been recorded as unavailable revenues.
The following summarizes the levy:2019 2018
Assessed value $1,769,273,400 1,706,322,200Tax rate (per $1,000) 20.97 20.38Commitment 37,101,663 34,774,846Special assessment - 12,351Supplemental taxes assessed 3,071 1,986
37,104,734 34,789,183Less:
Abatements 9,584 20,440Collections 36,336,486 34,026,827
Current year taxes receivable at end of year $ 758,664 741,916
Due date(s) - current year ½ Sept. 13, 2018 ½ Sept. 14, 2017½ March 14, 2019 ½ March 15, 2017
Interest rate on delinquent taxes 8.00% 7.00%Collection rate 97.95% 97.87%
2019 2018
Taxes receivable - current year $ 758,664 741,916 Taxes receivable - prior years 136,185 110,549
Tax liens - prior years 334,152 379,750
Total taxes receivables $ 1,229,001 1,232,215
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
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CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2019 was as follows:
ReclassifiedBalance Balance
June 30, 2018 Increases Decreases June 30, 2019Governmental activities:Capital assets, not being depreciated:Land $ 1,500,302 - - 1,500,302Construction in progress 4,969,840 1,158,642 4,356,393 1,772,089Total capital assets not being depreciated 6,470,142 1,158,642 4,356,393 3,272,391Capital assets, being depreciated:Buildings and building improvements 79,796,247 8,682,464 - 88,478,711Machinery, vehicles and equipment 8,146,340 1,094,059 121,332 9,119,067Infrastructure 40,589,345 - - 40,589,345Internal service fund equipment 6,217,533 306,241 240,985 6,282,789Total capital assets being depreciated 134,749,465 10,082,764 362,317 144,469,912Less accumulated depreciation for:Buildings and building improvements 36,060,495 1,980,261 - 38,040,756Machinery, vehicles and equipment 4,363,954 601,873 119,879 4,845,948Infrastructure 21,827,807 904,464 - 22,732,271Internal service fund equipment 4,023,101 406,737 240,985 4,188,853Total accumulated depreciation 66,275,357 3,893,335 360,864 69,807,828
Total capital assets being depreciated, net 68,474,108 6,189,429 1,453 74,662,084
Governmental activities capital assets, net $ 74,944,250 7,348,071 4,357,846 77,934,475
RestatedBalance BalanceJune 30, June 30,
2018 Increases Decreases 2019Business-type activities:Capital assets, not being depreciated:Land $ 488,211 - - 488,211Construction in progress 822,554 115,882 727,865 210,571Total capital assets not being depreciated 1,310,765 115,882 727,865 698,782Capital assets, being depreciated:Buildings and building improvements 10,342,593 - - 10,342,593Machinery and equipment 1,426,015 175,129 101,929 1,499,215Landfill 4,295,122 3,346,952 1,101,441 6,540,633Total capital assets being depreciated 16,063,730 3,522,081 1,203,370 18,382,441Less accumulated depreciation for:Buildings and building improvements 6,493,458 220,232 - 6,713,690Machinery and equipment 1,166,290 110,583 100,796 1,176,077Landfill 1,462,088 291,763 1,101,441 652,410Total accumulated depreciation 9,121,836 622,578 1,202,237 8,542,177
Total capital assets being depreciated, net 6,941,894 2,899,503 1,133 9,840,264
Business-type activities capital assets, net $ 8,252,659 3,015,385 728,998 10,539,046
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
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CAPITAL ASSETS, CONTINUED
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental activities:Finance and administration $ 78,839Development services 352,369Community services 379,944Public safety 544,558Public works 919,363Education 1,167,373Central garage 450,889
Total depreciation expense – governmental activities $3,893,335
Business-type activities:Augusta Civic Center $ 236,287Hatch Hill Landfill 386,291
Total depreciation expense – business-type activities $ 622,578
LONG-TERM DEBT
Long-term liability activity for the year ended June 30, 2019 was as follows:
RestatedBeginning Ending Due withinbalance Additions Reductions balance one year
Governmental activities:General obligation bonds $ 46,621,142 2,326,000 4,184,348 44,762,794 4,270,348Notes from direct borrowings 217,317 - 72,439 144,878 72,439Premiums 520,939 69,780 38,688 552,031 42,176Capital leases 2,456,823 1,150,000 444,795 3,162,028 510,690Accrued compensated absences 4,294,065 253,748 - 4,547,813 - Net pension liability 12,724,041 - 4,153,034 8,571,007 - Net OPEB liability 644,049 109,354 - 753,403 - Total OPEB liabilities 41,692,203 - 3,094,675 38,597,528 -
Governmental activitieslong-term liabilities $ 109,170,579 3,908,882 11,987,979 101,091,482 4,895,653
Business-type activities:General obligation bonds $ 2,310,210 - 852,570 1,457,640 852,570Capital leases 310,926 - 30,348 280,578 31,225Interim landfill closure 999,461 294,188 999,461 294,188 - Landfill closure 6,456,073 269,284 - 6,725,357 - Accrued compensated absences 128,847 - 12,883 115,964 -
Business-type activitieslong-term liabilities $10,205,517 563,472 1,895,262 8,873,727 883,795
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
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BONDS AND NOTES FROM DIRECT BORROWINGS
Bonds and notes from direct borrowings at June 30, 2019 are comprised of the following:
BalanceDate of Original amount Date of Interest June 30,
issue issued maturity rate 2019Governmental activities:
Bonds: General obligation bonds 2011 5/26/11 $ 1,250,000 2031 2.12-3.375% 620,000General obligation bonds 2018 6/28/18 4,010,000 2036 3.00-3.75% 3,700,000General obligation bonds 2019 5/1/19 2,326,000 2039 1.50-3.00% 2,326,000Qualified school construction 12/30/11 355,980 2022 4.81% 106,794General obligation bonds 2012 12/28/12 2,610,000 2027 2.00% 1,210,000Pension refunding bonds 8/14/14 7,590,000 2030 3.53-4.09% 5,855,000General obligation bonds 2014 8/14/14 750,000 2024 3.53-4.09% 375,000Refunding bonds 2015 1/28/15 16,880,000 2027 3.00-5.00% 11,075,000General obligation bonds 2015 5/27/15 10,340,000 2035 2.00-3.50% 7,685,000General obligation bonds 2016 3/29/16 6,815,000 2036 2.00-3.00% 5,585,000General obligation bonds 2017 5/11/17 7,045,000 2037 2.00-3.25% 6,225,000
Total bonds 44,762,794Notes from direct borrowing:
School revolving loan fund 3/17/11 889,810 2022 0.00% 80,011School revolving loan fund 2016 8/31/16 329,425 2021 0.00% 64,867
Total notes from direct borrowing 144,878Total governmental activities bonds and notes payable 44,907,672
Business-type activities bonds:Hatch Hill Expansion Bond 5/31/00 9,700,000 2020 4.528-5.903% 485,000Civic Center Expansion 5/25/01 4,300,000 2021 4.039-5.539% 452,640General obligation bonds 2015 5/27/15 850,000 2023 2.000-3.500% 425,000General obligation bonds 2017 5/11/17 165,000 2022 2.000-3.250% 95,000
Total business-type activities bonds 1,457,640
Total bonds and notes payable $ 46,365,312
The annual requirements to amortize governmental activities debt outstanding as of June 30, 2019 are as follows:
Bonds Notes from Direct Borrowings June 30, Principal Interest Principal Interest
2020 $ 4,270,348 1,393,097 72,439 - 2021 4,269,348 1,269,294 72,439 - 2022 4,254,348 1,141,084 - - 2023 4,078,750 1,012,267 - - 2024 3,925,000 885,891 - - 2025-2029 15,130,000 2,552,519 - - 2030-2034 6,800,000 859,338 - - 2035-2039 2,035,000 96,863 - -
Total $ 44,762,794 9,210,353 144,878 -
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
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BONDS AND NOTES FROM DIRECT BORROWINGS, CONTINUED
The annual requirements to amortize business type activities debt outstanding as of June 30, 2019 are as follows:
Bonds June 30, Principal Interest
2020 $ 852,570 14,3002021 362,570 10,4632022 136,250 6,6752023 106,250 3,187
Total $ 1,457,640 34,625
Reimbursement for Debt Service Expenditures - The State of Maine currently reimburses the City for a portion of the financing costs of certain school buildings. Continuation of such reimbursements is dependent upon continued appropriation by the State legislature.
CAPITAL LEASES
The City has entered into lease agreements as lessee for financing the acquisition of equipment. The City has capitalized equipment totaling $6,043,560 from capital leases currently outstanding. These leases qualify as capital leases for accounting purposes, and therefore, has been recorded at the present value of future minimum lease payments as of the date of its inception.
The following is a schedule of future minimum lease payments under the capital lease and the present value of the net minimum lease payment at June 30, 2019.
Governmental Business-typeActivities Activities
2020 $ 607,403 39,2192021 444,730 39,2192022 444,730 39,2192023 413,091 39,2192024 413,091 39,2192025-2029 1,283,537 121,650Total minimum lease payments 3,606,582 317,745
Less: amount representing interest 444,554 37,167Present value of future minimum lease
payments $ 3,162,028 280,578
STATUTORY DEBT LIMIT
The City is subject to a statutory limitation, by the State of Maine, of its general long-term debt equal to 15% of the State's valuation of the City. The City's outstanding general long-term debt of $46,365,312 at June 30, 2019was within the statutory limit.
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
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ARBITRAGE REFUND
Pursuant to the Tax Reform Act of 1986, governments issuing tax-exempt bonds or entering into note or lease obligations are required to perform an arbitrage rebate calculation upon the fifth anniversary of the obligation and to remit such rebate to the federal government, subject to certain exceptions. Since August 15, 1986, the effective date of these rules, the City has not been subject to any arbitrage refunds as they have met the exceptions to the arbitrage regulations.
INTERFUND BALANCES AND TRANSFERS
As of June 30, 2019, the balances of interfund loans receivable/payable and transfers were as follows:
Interfund Interfund TransfersFund loans receivable loans payable in (out)
General Fund $ - 17,508,236 3,176,612Special Revenue Funds:
CDBG Loan Fund 40,455 - - Airport - 3,708 - City Special Revenue Funds 4,807,983 - (3,426,931)Adult Education 128,954 - -Adult Education Enrichment 164,987 - -School Lunch 367,322 - -School Special Revenue Funds - 388,740 -
Internal Service Fund 791,176 - (29,237)Proprietary Funds:
Hatch Hill Landfill 5,703,209 - (54,702)Augusta Civic Center - 260,331 106,937
Capital Projects Funds 5,990,240 - 227,321Private-purpose Trust - 510 - Permanent Funds 167,199 - -
Totals $18,161,525 18,161,525 -
BUDGETARY VS. GAAP BASIS OF ACCOUNTING - GENERAL FUND
As required by accounting principles generally accepted in the United States of America, the City has recorded a revenue and an expenditure for Maine Public Employees Retirement contributions made by the State of Maine on behalf of the City. These amounts have not been budgeted in the General Fund and result in a difference in reporting on a budgetary basis of accounting vs. reporting under accounting principles generally accepted in the United States of America of $2,213,566.
These amounts have been included as an intergovernmental revenue and as an education expense/expenditure on Statement 2 and 4 (GAAP basis). There is no effect on the net position/fund balance at the end of the year.
DEFERRED COMPENSATION PLAN
The City offers its employees a deferred compensation plan created in accordance with Internal Revenue (IRC) Section 457. The plan permits participating employees to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency.
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
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DEFERRED COMPENSATION PLAN, CONTINUED
The City amended the plan in accordance with the provisions of IRS Section 457(g). Assets of the plan were placed in trust for the exclusive benefit of participants and their beneficiaries. The requirements of that IRS Section prescribes that the City no longer owns the amounts deferred by employees, including the related income on those amounts. Accordingly, the assets and the liability for the compensation deferred by plan participants, including earnings on their plan assets, were removed from the City’s financial statements.
NET POSITION
Net position represents the difference between assets, deferred outflows of resources, liabilities, and deferred inflows of resources. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of bonds and capital leases payable and adding back any unspent proceeds. The City’s net investment in capital assets was calculated as follows at June 30, 2019:
Governmental Business-typeactivities activities
Capital assets $ 147,742,303 19,081,223Accumulated depreciation (69,807,828) (8,542,177)Bonds and notes from direct borrowings (44,907,672) (1,457,640)Premium on bonds (552,031) - Add back pension obligation bonds (non-capital) 5,855,000 - Add back unspent proceeds 3,052,238 - Capital leases payable (3,162,028) (280,578)
Net investment in capital assets $ 38,219,982 8,800,828
CONTRACT COMMITMENTS
The City has entered into a contract for school transportation services with First Students, Inc. The contract expires in June of 2020. Future payments under this contract are as follows:
2020 $ 892,500
Total $ 892,500
CONSTRUCTION COMMITMENTS
The City has entered into a contract in connection with the LED conversion of City street lights. The following is a summary of the commitments at June 30, 2019:
Contract Percentage Billed BalanceTotal Complete to Date Remaining
Construction contracts $ 953,420 90.71% $ 864,876 $ 88,544
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
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FUND BALANCE
As of June 30, 2019, fund balance components consisted of the following:
OtherGeneral Governmental
Fund Funds TotalNonspendable:
Inventory and prepaid items $ 162,723 31,584 194,307Principal for permanent funds - 502,721 502,721
Total nonspendable 162,723 534,305 697,028Restricted:
Finance and administration - 3,513,004 3,513,004Development services - 535,916 535,916Community services - 91,994 91,994Public safety - 21,124 21,124Education 2,977,102 731,516 3,708,618Capital projects - 3,052,238 3,052,238Permanent funds - 135,436 135,436
Total restricted 2,977,102 8,081,228 11,058,330
Committed:Legislative and executive - 7,035 7,035Finance and administration - 200,954 200,954Development services - 1 1Community services - 698,372 698,372Public safety - 180,303 180,303Public works - 86,408 86,408Capital projects - 3,303,036 3,303,036
Total committed - 4,476,109 4,476,109Assigned:
Subsequent budget 1,436,683 - 1,436,683Reserves 2,467,260 - 2,467,260Encumbrances 291,304 - 291,304
Total assigned 4,195,247 - 4,195,247
*Unassigned 8,389,270 (106,275) 8,282,995
Total fund balance $ 15,724,342 12,985,367 28,709,709
* Includes the $1,200,000 tax relief fund reserve (budget stabilization)
The City has created the tax relief fund (budget stabilization) to draw down the City’s unassigned fund balance in a fiscally prudent manner in order to avoid service reductions and to minimize the increase in the property tax rate. The balance at June 30, 2019 is $1,200,000 and it is categorized as unassigned fund balance.
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
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RESTATEMENT OF NET POSITION
For the fiscal year ended June 30, 2019, the City has restated beginning net position in the government-wide statement of net position to account for the addition of the City’s total OPEB liability in regards to an implicit liability for retiree health insurance through the Maine Education Association Benefits Trust (MEABT), which effectively decreased the City’s net position as of July 1, 2018 by $6,878,493.
Additionally, due to information discovered in the fiscal year 2019 audit, construction in progress for the Hatch Hill Landfill fund was restated to include missing additions from fiscal year 2018. As a result of the restatement, prior net position and construction in progress were increased by $91,788.
TAX INCREMENT FINANCING DISTRICTS
The City has established twenty-six tax increment financing districts under the terms of applicable state laws.
Original Increase in TIF Captured Capturedvalue value cap value tax
Marketplace Phase I $ 1,663,100 22,174,535 (A) 22,174,535 465,000Marketplace Phase II 6,346,100 87,483,904 (B) 87,483,904 1,369,537McCarthy Phase I 2,949,700 366,900 100% 366,900 7,694McCarthy Phase II 29,800 1,282,204 50% 641,102 13,443McCarthy Phase III 3,349,900 709,300 100% 709,300 14,874McCarthy Phase IV 58,400 699,500 100% 699,500 14,668NRF Distributors 262,600 4,316,127 40% 1,726,451 36,204NRF Distributors Phase II 164,000 1,821,600 100% 1,821,600 38,199Water Street Apartments 336,800 1,596,500 50% 798,250 16,739Kennebec Arsenal - 1,576,600 75% 1,182,450 24,796Downtown 30,228,100 15,986,300 100% 15,986,300 335,233Cony Village 170,200 2,249,200 75% 1,686,900 35,375Cony Circle 12,481,400 8,073,000 100% 8,073,000 169,291Commerce Center 1,550,000 22,120,700 100% 22,120,700 506,593(C)Old Belgrade Exit 7,552,200 - 100% - - 222-232 Water Street 244,000 435,000 100% 435,000 9,122Augusta East Phase I 80,300 412,300 100% 412,300 8,646Augusta East Phase II - 9,117,200 100% 9,117,200 191,188Cony Flatiron - 2,752,200 100% 2,752,200 57,714Community Natural Gas 201,700 46,605,000 100% 46,605,000 977,307Maine Instrument Flight - 525,600 100% 525,600 11,022Performance Food Group 5,598,700 10,689,600 100% 10,689,600 224,160275-287 Water Street 176,500 1,711,500 100% 1,711,500 35,890Inn at City Hall - 5,871,400 100% 5,871,400 123,123Hodgkins School Affordable - 2,516,100 100% 2,516,100 52,762Western Avenue 155,500 9,796,300 100% 9,796,300 205,428
(A) $250,000 to be captured for economic development(B) $400,000 to be captured for credit enhancement agreement with developers and moved $969,537 to
Downtown TIF(C) The City has received a portion of back taxes owed in FY 2019 causing additional tax revenue to flow into
fund.
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
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TAX INCREMENT FINANCING DISTRICTS, CONTINUED
The City may provide financial assistance to local economic development projects by using the new property taxes that result from the commercial investment and corresponding increase in taxable property valuation. This is accomplished by utilizing municipal tax increment financing district (TIF) in accordance with Chapter 260 of MRSA Title 30-A. The City Council is authorized by statute to establish a Municipal Tax Increment Financing District and establish the Development Plan subject to the approval by the Commissioner of the Maine Department of Economic and Community Development.
Tax Increment Financing Districts allow the City to “shelter” the increased property valuation from the computation of its State subsidies (General Purpose Aid to Education and Municipal Revenue Sharing) and Kennebec County tax assessments. The City would lose 50%-55% of all new property taxes due to reductions in State subsidies and increase in the City’s share of County taxes.
The Development Plan may authorize the City to enter into a Credit Enhancement Agreement (C.E.A.). The C.E.A. is a mechanism to assist the development project by using all or a portion of the incremental property taxrevenues generated by the new investment to pay certain authorized project cost directly to the developer.
The City had twenty-six (26) approved Tax Increment Financing Districts as of June 30, 2019. For FY 2019, the Citycaptured $4,944,346 in TIF tax revenues and disbursed $1,687,559 in C.E.A. payments to eighteen (18) developers. The remaining $3,259,016 was applied toward eligible local expenditures. The following are the C.E.A. payments that each exceed ten (10) percent of the total amount of C.E.A. payments:
$400,000 (23.70%) was disbursed to the developer of the Market Place at Augusta retail complex. The Market Place contains 39 retail outlets, 9 restaurants, and one cinema complex. The C.E.A became effective for FY 2001 when the development of Phase II exceeded one million dollars in new property valuation.
The City disbursed $274,658 (16.28%) in a C.E.A. payment to reimburse the eligible infrastructure investment for the Central Maine Commerce Center development complex.
$191,187 (11.33%) was disbursed for the redevelopment of a seven-story 317,000 square foot former hospital complex. The C.E.A. payment is on a sliding scale from 100% of incremental tax revenues down to 50% depending on the total percent of square footage under lease agreements. For FY 2019, the C.E.A. payment was at 100%.
$422,034 (25.00%) was disbursed to Performance Food Service, Inc. The C.E.A. was established to help reimburse the company’s $13 million warehouse expansion in the City. The C.E.A. payment is on a decliningscale from 100% of incremental tax revenues in the first three years down to 0% by the twenty first year. For FY 2019, the C.E.A. payment was at 100%.
CONTINGENT LIABILITIES
Grant Funds - Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although the City expects such amounts, if any, to be immaterial.
Other Contingent Liabilities - The City is a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, in the opinion of the City's attorney the resolution of these matters will not have a material adverse effect on the financial condition of the City.
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
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LANDFILL LIABILITIES
The City owns and operates a regional solid waste and recycling facility, which is accounted for in the Hatch Hill Enterprise Fund. The landfill is comprised of several sites: an old site, expansion I, an interim site, expansion II, and expansion III. The old site and the expansion I site are currently at capacity and have been closed in accordance with Department of Environmental Protection Standards (DEP). The interim site has been temporarily closed in accordance with a DEP operating license and expansion II has been permanently closed. Expansion III is the current operating landfill and has capacity for approximately 771,241 tons of municipal solid waste. As of June 30, 2019, a total of approximately 450,473 tons has been placed in the expansion III siteleaving capacity of 320,768 tons. The City has recognized a liability for landfill closure and postclosure costs in the Hatch Hill Enterprise Fund. This liability was calculated based on current cost estimates for closure of each site, estimates for leachate transportation, postclosure monitoring and maintenance.
The total liability on current capacity is estimated as follows:Closure:
Interim site $ 341,800Expansion III (58.41%) 4,999,798
Postclosure monitoring, maintenance andleachate removal 1,383,759
Total accrued liability for landfill closure and postclosure costs $ 6,725,357
The actual cost of closure and postclosure care may be higher or lower due to inflation, changes in technology, engineering estimates, or changes in landfill laws and regulations. Additionally the City has accrued $294,188 for the cost of the intermediate cover that will be completed in the next fiscal period.
RISK MANAGEMENT
The City is exposed to various risks of loss related to torts, theft of, damage to and destruction of assets, errors, and omissions, and natural disasters for which the City either carries commercial insurance, or participates in public entity risk pools or is effectively self-insured. Currently, the City participates in two public entity risk poolssponsored by the Maine Municipal Association. Based on the coverage provided by these pools, as well as certain coverage provided by commercial insurance purchased, the City is not aware of any material actual or potential claim liabilities which should be recorded at June 30, 2019.
The School Department is exposed to various risks of loss related to tort, theft of, damage to and destruction of assets, errors, and omissions, and natural disasters for which the School Department either carries commercial insurance, or participates in public entity risk pools. Currently, the School Department participates in a public entity risk pool sponsored by the Maine School Management Association. Based on the coverage provided by the pool, as well as coverage provided by commercial insurance purchased, the School Department is not aware of any material actual or potential claim liabilities which should be recorded at June 30, 2019.
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
46
OTHER POSTEMPLOYMENT BENEFITS (OPEB) – LIFE INSURANCE
General Information about the OPEB Plans
Plan Description - The City sponsors two post-retirement benefit plans providing group term life insurance to retiring employees. For municipal employees and certain School Department employees the City participates in Group Life Insurance Plan for Participating Local District (PLD). Teachers also participate in the Group Term Life Insurance Plan for State Employees and Teachers (SET). Both plans are a cost-sharing multiple-employer defined benefit OPEB plan administered by the Maine Public Employees Retirement System (MPERS). The MPERS Board of Trustees has the authority to establish and amend the benefit terms and financing requirements for each plan. MPERS issues a publicly available financial reports that are available at www.mainepers.org.
Benefits Provided - Under both the PLD and SET OPEB plans, MPERS provides basic group life insurance benefits, during retirement, to retirees who participated in the plan prior to retirement for a minimum of 10 years. The level of coverage is initially set to an amount equal to the retirees average final compensation. The initial amount of basic life is then subsequently reduced at the rate of 15% per year to the greater of 40% of the initial amount or $2,500.
Contributions - Premium rates for both the PLD and SET OPEB plans are determined by the MPERS Board of Trustees to be actuarially sufficient to pay anticipated claims.
PLD OPEB Plan - Premiums total $0.46 per $1,000 of coverage per month during the post-employment retirement period. Contributions to the PLD OPEB plan from the City were $20,007 for the year ended June 30, 2019.
SET OPEB Plan - The State of Maine is required to remit the total dollar amount of each year’s annual required contribution. Contributions to the OPEB plan by the State of Maine on-behalf of the City were $45,986 for the year ended June 30, 2019. Employers and employees are not required to contribute to the SET OPEB plan.
OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
The net OPEB liability for both the PLD and SET OPEB plans was measured as of June 30, 2018, and the net OPEB liabilities used to calculate the net OPEB liabilities was determined by actuarial valuations as of that date. The City’s proportion of the net OPEB liabilities were based on a projection of the City’s long-term share of contributions to the PLD and SET OPEB plans relative to the projected contributions of all participating employers, actuarially determined.
PLD OPEB Plan - At June 30, 2019, the City reported a liability of $753,403 for its proportionate share of the net OPEB liability. At June 30, 2018, the City’s proportion was 3.7295%.
SET OPEB Plan - At June 30, 2019, the City reported no liability related to the plan. The State of Maine’s proportionate share of the net OPEB liability associated with the City was $503,957 as of June 30, 2019. At June 30, 2018, the City’s proportion was 0.00%.
For the year ended June 30, 2019, the City recognized OPEB expense of $5,519 for the PLD OPEB Plan. For the year ended June 30, 2019, the City recognized OPEB expense of $45,986 and also revenues of $45,986 for support provided by the State related to the SET OPEB plan. At June 30, 2019, the City reported no deferred outflows of resources nor deferred inflows of resources related to the SET OPEB plan.
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
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OTHER POSTEMPLOYMENT BENEFITS (OPEB) – LIFE INSURANCE, CONTINUED
At June 30, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to the PLD OPEB plan from the following sources:
Deferred Outflows Deferred Inflowsof Resources of Resources
Differences between expected and actual experience $ 63,579 - Changes of assumptions - 90,718Net difference between projected and actual earnings on OPEB plan investments - 39,537Changes in proportion and differences between City contributions and proportionate share of contributions - 29,367City contributions subsequent to the measurement date 20,007 -
Total $ 83,586 159,622
An amount of $20,007 is reported as deferred outflows of resources related to OPEB resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability in the year ended June 30, 2020. Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:
Year ended June 30:2020 $ (30,342)2021 (30,342)2022 (30,342)2023 (22,878)2024 17,861
Actuarial Assumptions - The net OPEB liability in the June 30, 2018 actuarial valuations was determined using the following assumptions, applied to all periods included in the measurement, unless otherwise specified:
PLD OPEB Plan SET OPEB Plan
Inflation 2.75% 2.75%Salary increases 2.75% - 9.00% 2.75% - 14.50%Investment rate of return 6.75% 6.75%
Mortality rates for each plan were based on the RP2014 Total Dataset Healthy Annuitant Mortality Table, for males and females.
The actuarial assumptions used in the June 30, 2018 valuations were based on the results of an actuarial experience study conducted for the period June 30, 2012 to June 30, 2015.
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
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OTHER POSTEMPLOYMENT BENEFITS (OPEB) – LIFE INSURANCE, CONTINUED
The long-term expected rate of return on both PLD and SET OPEB plan investments was determined using a building-block method which best estimates ranges of expected future real rates of return (expected returns, net of investment expense and inflation) are developed for each major class of assets. These ranges are combined to produce long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:
Asset Class Target Allocation
Long-term Expected Real Rate
of Return
Public equities 70.0% 6.0%Real estate 5.0% 5.2%Traditional credit 15.0% 3.0%US government securities 10.0% 2.3%
Discount Rate - The rate used to measure the net OPEB liability for the PLD OPEB plan was 5.13% which is a blend of the assumed long-term expected rate of return of 6.75% and a municipal bond index rate of 3.87%, based on the Bond Buyer GO 20-Year Municipal Bond Index as of June 30, 2018. Projections of the plan’s fiduciary net position indicate that it is not expected to be sufficient to make projected benefit payments for current members beyond 2047. Therefore, the portion of the future projected benefit payments after 2047 are discounted at the municipal bond index rate. The projection of cash flows used to determine the discount rate assumed that employer contributions will be made at contractually required rates, actuarially determined.
The rate used to measure the net OPEB liability for the SET OPEB plan was 6.75%. The projection of cash flows used to determine the discount rate assumed that employer contributions will be made at contractually required rates, actuarially determined. Based on this assumption, the OPEB plans fiduciary net position was projected to be available to make all projected OPEB payments for current and inactive employees. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.
Sensitivity of the City’s Proportionate Share of the Net OPEB Liability to Changes in the Discount Rate - The following presents the City’s proportionate share of the net PLD OPEB plan liability calculated using the discount rate of 5.13%, as well as what the City’s proportionate share of the net PLD OPEB plan liability would be if it were calculated using a discount rate that is 1 percentage-point lower (4.13%) or 1 percentage-point higher (6.13%) than the current rate:
1% Decrease(4.13%)
Discount Rate
(5.13%)
1% Increase(6.13%)
Net OPEB liability $ 995,359 753,403 562,638
Sensitivity of the City’s proportionate share of the net SET OPEB plan liability to the changes in the discount rate are not presented as the City does not have any liability related to this plan given that the SET OPEB plan is 100% funded by contributions from the State of Maine.
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
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OTHER POSTEMPLOYMENT BENEFITS (OPEB) – LIFE INSURANCE, CONTINUED
OPEB Plan Fiduciary Net Position - Detailed information about both the PLD and SET OPEB plan’s fiduciary net positions are available in a separately issued MPERS financial report.
OTHER POSTEMPLOYMENT BENEFITS (OPEB) HEALTH INSURANCE - MMEHT
Plan Description - The City sponsors a post-retirement benefit plan providing health insurance to retiring employees (hereafter referred to as the Health Plan). The plan is a single-employer defined benefit OPEB plan administered by the Maine Municipal Employees Health Trust (MMEHT). The City Council has the authority to establish and amend the benefit terms and financing requirements. No assets are accumulated in a trust that meets the criteria of paragraph 4 of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions.
Benefits Provided - Under the Health Plan, MMEHT provides healthcare benefits for certain retired employees.In general, employees hired prior to cut-off dates in the early 1990’s (2005 for firefighters) are eligible for the same health insurance as active employees until the age of 65, and thereafter many are provided a Medicare supplemental plan. Some retirees have coverage for spouses and others individual only. Most retirees receivethis benefit as 100% City-paid; however, employees who are eligible for retiree health coverage and retire(d) after cut-off dates in 2010 make a contribution to their coverage. This amount varies by unit but is most commonly 20% of the premium costs. For additional details, please refer to the various collective bargaining agreements and plan documents.
Teachers are eligible for up to $3,234 level dollar annual reimbursement of single health insurance coverage with twenty-two years of service upon retirement between the ages of 55-65. School administrators are eligible for 100% single health insurance premiums with seven years of service upon retirement between the ages of 55-65.
Municipal employees not eligible for City-provided health insurance premiums are eligible to receive health benefit coverage upon retirement with the eligible retiree covering 100% of the health insurance premium.
Employees Covered by Benefit Terms – At June 30, 2019, the following employees were covered by the Health Plan benefit terms:
Inactive employees or beneficiaries currently receiving benefits 156Inactive employee entitled to but not yet receiving benefits -Active employees 561
Total 717
Contributions - The City is required to remit premiums for monthly health coverage during the post-employment retirement period for eligible employees based on years of service and date of hire. Contributions to the Health Plan from the City were $1,540,962 for the year ended June 30, 2019. Employees are not required to contribute to the Health Plan during years of service.
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
50
OTHER POSTEMPLOYMENT BENEFITS (OPEB) HEALTH INSURANCE – MMEHT, CONTINUED
OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
The City’s total Health Plan OPEB liability of $31,689,479 was measured as of January 1, 2019, and was determined by an actuarial valuation as of January 1, 2018.
Changes in the Total Health Plan OPEB Liability
Total OPEB Liability
Balance at June 30, 2018 $ 34,482,285Changes for the year: Service cost 221,303 Interest 1,167,523 Changes of benefit terms - Differences between expected and actual experience - Changes in assumptions or other inputs (2,640,670) Benefit payments (1,540,962)
Net changes (2,792,806)
Balance at June 30, 2019 $ 31,689,479
Change in assumptions reflects a change in the discount rate from 3.44% to 4.10%.
For the year ended June 30, 2019, the City recognized OPEB gain of $376,409 related to the Health Plan. At June 30, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to the Health Plan from the following sources:
Deferred Outflows of Resources
Deferred Inflows of Resources
Differences between expected and actual experience $ 423,447 -Changes of assumption or other inputs - 1,602,223City contributions subsequent to the measurement date 506,374 -
Total $ 929,821 1,602,223
$506,374 is reported as deferred outflows of resources related to the Health Plan OPEB resulting from City contributions subsequent to the measurement date and will be recognized as a reduction of the OPEB liability in the year ended June 30, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the Health Plan OPEB will be recognized in OPEB expense as follows:
Year ended June 30:2020 $ (216,881)2021 (216,881)2022 (216,881)2023 (528,134)
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
51
OTHER POSTEMPLOYMENT BENEFITS (OPEB) HEALTH INSURANCE – MMEHT, CONTINUED
The total OPEB liability in the January 1, 2018 actuarial valuation for the Health Plan was determined using the following assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified:
Inflation 3.00% per annumSalary increases 2.75% per annumDiscount rate 4.10% per annumHealthcare cost trend rates 8.27% for 2018, decreasing to 4.00% for 2032Retirees’ share of the benefit related costs 5%-100% of projected health insurance
premiums
Mortality rates for the Health Plan were based on the RP2014 Total Dataset Healthy Annuitant Mortality Table, for males and females.
The actuarial assumptions used in the January 1, 2018 valuation for the Health Plan were based on the results of an actuarial experience study for the period June 30, 2012 through June 30, 2015.
Discount Rate - The rate used to measure the total OPEB liability for the Health Plan was 4.10%. Since the plan is pay as you go and is not funded, the discount rate will be based on a 20-year tax-exempt general obligation municipal bond index. The rate is assumed to be an index rate for 20-year tax exempt general obligation municipal bonds with an average rating of AA/Aa or higher, for pay as you go plans.
Sensitivity of the Total Health Plan OPEB Liability to Changes in the Discount Rate - The following presents the City’s total OPEB liability related to the Health Plan calculated using the discount rate of 4.10%, as well as what the City’s total OPEB liability would be if it were calculated using a discount rate that is 1 percentage-point lower (3.10%) or 1 percentage-point higher (5.10%) than the current rate:
1% Decrease(3.10%)
Discount Rate
(4.10%)
1% Increase(5.10%)
Total OPEB liability $ 35,841,105 31,689,479 28,303,473
Sensitivity of the Total Health Plan OPEB Liability to Changes in the Healthcare Cost Trend Rates – The following presents the City’s total OPEB liability related to the Health Plan calculated using the healthcare cost trend rates, as well as what the City’s total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1 percentage-point lower or 1 percentage-point higher than the current healthcare cost trend rates:
1% DecreaseHealthcare Cost
Trend Rates 1% Increase
Total OPEB liability $ 28,455,307 31,689,479 35,616,129
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
52
OTHER POSTEMPLOYMENT BENEFITS – HEALTH INSURANCE – MEABT
General Information about the OPEB Plan
Plan Description - The City sponsors a post-retirement benefit plan providing health insurance to retiring employees. The plan is a single-employer defined benefit OPEB plan administered by the Maine Education Association Benefits Trust (MEABT). The State Legislature has the authority to establish and amend the benefit terms and financing requirements. No assets are accumulated in a trust that meets the criteria of paragraph 4 of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions.
Benefits Provided - MEABT provides healthcare insurance benefits for retirees and their dependents. The employee must have participated in the MEABT health plan for the 12 months prior to retirement and have 10 years of continuous active service and enrollment in the health plan (under age 50), or 5 years of continuous active service and enrollment in the health plan (age 50 or above), in order to be eligible for postretirement benefits. The retiree is eligible for a State subsidy of 45% of the blended single premium for the retiree only. Under State laws, the blended premium is determined by blending rates for active members and retired members. The retiree pays 55% of the blended premium rate for coverage selected. Spouses must contribute 100% of the blended premium amounts. Thus, the total premium is paid for by both the State and the retiree and or spouse.
Employees Covered by Benefit Terms – At June 30, 2019, the following employees were covered by the benefit terms:
Inactive employees or beneficiaries currently receiving benefits 180Inactive employee entitled to but not yet receiving benefits -Active employees 311
Total 491
OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
The City’s total OPEB liability of $6,908,049 was measured as of June 30, 2018, and was determined by an actuarial valuation as of that date.
Changes in the Total OPEB Liability
Balance at June 30, 2018 $ 7,209,918Changes for the year: Service cost 50,481 Interest 254,042 Changes of benefit terms - Differences between expected and actual experience - Changes in assumptions or other inputs (274,967) Benefit payments (331,425)
Net changes (301,869)
Balance at June 30, 2019 $ 6,908,049
Change in assumptions reflects a change in the discount rate from 3.58% to 3.87%.
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
53
OTHER POSTEMPLOYMENT BENEFITS – HEALTH INSURANCE – MEABT, CONTINUED
For the year ended June 30, 2019, The City recognized OPEB expense of $249,530. At June 30, 2019, The Cityreported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:
Deferred Outflows of Resources
Deferred Inflows of Resources
Changes of assumption or other inputs $ - 219,974City contributions subsequent to measurement date 343,290 -
Total $ 343,290 219,974
$343,290 is reported as deferred outflows of resources related to OPEB resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the total OPEB liability in the year ended June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:
Year ended June 30:
2020 $ (54,993)2021 (54,993)2022 (54,993)2023 (54,995)
Actuarial Assumptions - The total OPEB liability in the June 30, 2018 actuarial valuation for the total OPEB liability was determined using the following assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified:
Inflation Not reportedSalary increases 2.75% - 14.50% per yearDiscount rate 3.87% per annumHealthcare cost trend rates - Pre-MedicareHealthcare cost trend rates - Medicare
5.55% for 2018 grading over 15 years to 3.73%3.72% for 2018 grading over 15 years to 2.81%
Retirees’ share of the benefit related costs 55% of the blended premium rate with a State subsidy for the remaining 45% of the blended premium rate
Mortality rates were based on the RP2014 Total Dataset Healthy Annuitant Mortality Table, for males and females.
The actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial experience study for the period June 30, 2012 through June 30, 2015.
Discount Rate - The rate used to measure the total OPEB liability was 3.87% per annum. Since the plan is pay as you go and is not funded, the discount rate was based upon high quality AA/Aa or higher bond yields in effect for 20 years, tax-exempt general obligation municipal bonds using the Bond Buyer 20-Bond GO Index.
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
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OTHER POSTEMPLOYMENT BENEFITS – HEALTH INSURANCE – MEABT, CONTINUED
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate - The following presents the City’s total OPEB liability calculated using the discount rate of 3.87%, as well as what the City’s total OPEB liability would be if it were calculated using a discount rate that is 1 percentage-point lower (2.87%) or 1 percentage-point higher (4.87%) than the current rate:
1% Decrease(2.87%)
Discount Rate
(3.87%)
1% Increase(4.87%)
Total OPEB liability $ 7,932,017 6,908,049 6,076,020
Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates - The following presents the City’s total OPEB liability calculated using the healthcare cost trend rates, as well as what the City’s total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1 percentage-point lower or 1 percentage-point higher than the current healthcare cost trend rates:
1% DecreaseHealthcare Cost
Trend Rates 1% Increase
Total OPEB liability $ 6,033,053 6,908,049 7,983,158
NET PENSION LIABILITY
General Information about the Pension Plan
Plan Description - Employees of the City are provided with pensions through the Maine Public Employees Retirement System Consolidated Plan for Local Participating Districts (PLD Plan) and teaching-certified employees of the City are provided with pensions through the Maine Public Employees Retirement System State Employee and Teacher Plan (SET Plan), cost-sharing multiple-employer defined benefit pension plans, administered by the Maine Public Employees Retirement System (MPERS). Benefit terms are established in Maine statute. MPERS issues a publicly available financial report that can be obtained at www.mainepers.org.
Benefits Provided - The PLD and SET Plans provide defined retirement benefits based on members’ average final compensation and service credit earned as of retirement. Vesting (i.e., eligibility for benefits upon reaching qualification) occurs upon the earning of five years of service credit. In some cases, vesting occurs on the earning of one year of service credit immediately preceding retirement at or after normal retirement age. For PLD members, normal retirement age is 60 (65 for new members to the PLD Plan on or after July 1, 2014) except for special plan members, primarily uniformed public safety employees, who can retire after twenty-five years of creditable service at any age. For SET Plan members, normal retirement age is 60, 62, or 65. The normal retirement age is determined by whether a member had met certain creditable service requirements on specific dates, as established by statute. The monthly benefit of members who retire before normal retirement age is reduced by a statutorily prescribed factor for each year of age that a member is below her/his normal retirement age at retirement. MPERS also provides disability and death benefits, which are established by contract under applicable statutory provisions (PLD Plan) or by statute (SET Plan).
Contributions - Employee contribution rates are defined by law or Board rule and depend on the terms of the plan under which an employee is covered. Employer contributions are determined by actuarial valuations. The contractually required contribution rates are actuarially determined as an amount that, when combined with employee contributions, is expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
55
NET PENSION LIABILITY, CONTINUED
PLD Plan - Employees are required to contribute 8.0% to 9.5% of their annual pay. The City’s contractually required contribution rates for the year ended June 30, 2019 were 10.0% to 12.7% of annual payroll. Contributions to the pension plan from the City were $1,629,090 for the year ended June 30, 2019.
SET Plan - Maine statute requires the State to contribute a portion of the City’s contractually required contributions. Employees are required to contribute 7.65% of their annual pay. The City’s contractually required contribution rate for the year ended June 30, 2019, was 15.05% of annual payroll of which 3.97% of payroll was required from the City and 11.08% was required from the State. Contributions to the pension plan from the City were $587,392 for the year ended June 30, 2019.
Pension Liabilities, Pension Expense, and Deferred Outflows and Deferred Inflows of Resources Related to Pensions
The net pension liabilities were measured as of June 30, 2018, and the total pension liabilities used to calculate the net pension liabilities were determined by actuarial valuations as of that date. The City’s proportion of the net pension liabilities were based on projections of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating local districts (PLD Plan) and of all participating School Administrative Units and the State (SET Plan), actuarially determined.
PLD Plan - At June 30, 2019, the City reported a liability of $7,218,191 for its proportionate share of the net pension liability. At June 30, 2018, the City’s proportion of the PLD Plan was 2.6375%.
SET Plan - At June 30, 2019, the City reported a liability for its proportionate share of the net pension liability that reflected a reduction for State pension support provided to the City. The amount recognized by the Cityas its proportionate share of the net pension liability, the related State support, and the total portion of the net pension liability that was associated with the City were as follows:
City’s proportionate share of the net pension liability $ 1,352,816State’s proportionate share of the net pension liability
associated with the City 14,340,111
Total $ 15,692,927
At June 30, 2018, the City’s proportion of the SET Plan was 0.1002%.
For the year ended June 30, 2019, the City recognized pension gain of $1,406,096 for the PLD Plan and pension expense of $2,120,972 for the SET Plan with revenue of $1,639,371 for support provided by the State.
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
56
NET PENSION LIABILITY, CONTINUED
At June 30, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
PLD Plan SET PlanDeferred Deferred Deferred DeferredOutflows Inflows Outflows Inflows
of Resources of Resources of Resources of Resources
Differences between expected and actual experience $ - 56,680 $ 41,317 - Changes of assumptions 1,152,071 - 85,095 - Net difference between projected and actual earnings on pension plan investments - 1,742,906 - 175,866Changes in proportion and differences between City contributions and proportionate share of contributions - 226,167 4,044 - City contributions subsequent to the measurement date 1,629,090 - 587,392 -
Total $ 2,781,161 2,025,753 717,848 175,866
$2,216,482 is reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liabilities in the year ended June 30, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:
Year ended June 30: PLD Plan SET Plan2020 $ 889,765 98,4012021 (127,289) 28,6332022 (1,185,691) (125,198)2023 (450,467) (47,246)
Actuarial Assumptions - The total pension liability in the June 30, 2018 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:
PLD Plan SET Plan
Inflation 2.75% 2.75%Salary Increases, per year 2.75% to 9.0% 2.75% to 14.5%Investment return, per annum, compounded annually 6.75% 6.75%Cost of living benefit increases, per annum 1.91% 2.20%
Mortality rates were based on the RP2014 Total Dataset Healthy Annuitant Mortality Table, for males and females.
The actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial experience study for the period June 30, 2012 to June 30, 2015.
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
57
NET PENSION LIABILITY, CONTINUED
The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan’s target asset allocation as of June 30, 2018 are summarized in the following table:
Long-term expectedAsset class Target allocation real rate of return
Public equities 30.0% 6.0%U.S. government 7.5% 2.3%Private equity 15.0% 7.6%Real estate 10.0% 5.2%Infrastructure 10.0% 5.3%Natural resources 5.0% 5.0%Traditional credit 7.5% 3.0%Alternative credit 5.0% 4.2%Diversifiers 10.0% 5.9%
Discount Rate - The discount rate used to measure the total pension liability was 6.75% for the PLD Plan and the SET Plan. The projection of cash flows used to determine the discount rates assumed that employee contributions will be made at the current contribution rate and that contributions from participating local districts will be made at contractually required rates, actuarially determined. Based on these assumptions, the pension plans’ fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liabilities.
Sensitivity of the City’s Proportionate Share of the Net Pension Liabilities to Changes in the Discount Rate - The following presents the City’s proportionate share of the net pension liability calculated using the discount rate of 6.75% for the PLD Plan and the SET Plan, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (5.75% for PLD Plan and for SET Plan) or 1 percentage-point higher (7.75% for PLD Plan and for SET Plan) than the current rate:
PLD Plan 1% Current 1%Decrease Discount Rate Increase(5.75%) (6.75%) (7.75%)
City’s proportionate share of the net pension liability $ 17,012,319 7,218,191 (1,936,630)
SET Plan 1% Current 1%Decrease Discount Rate Increase(5.75%) (6.75%) (7.75%)
City’s proportionate share of the net pension liability $ 2,500,004 1,352,816 397,394
CITY OF AUGUSTA, MAINENotes to Basic Financial Statements, Continued
58
NET PENSION LIABILITY, CONTINUED
Pension Plan Fiduciary Net Position - Detailed information about the pension plan’s fiduciary net position is available in the separately issued MPERS financial report.
Payables to the Pension Plan - None as of June 30, 2019.
CITY OF AUGUSTA, MAINERequired Supplementary Information
59
Schedule of Changes in the City’s Total Health Plan - MMEHT OPEB Liability and Related RatiosLast 10 Fiscal Years*
2019 2018
Total OPEB Liability
Service Cost $ 221,303 239,984Interest 1,167,523 1,226,114Changes of benefit terms - -Differences between expected and actual experience - 705,742Changes of assumptions or other inputs (2,640,670) 850,523Benefit payments (1,540,962) (1,460,405)
Net change in total OPEB Liability (2,792,806) 1,561,958
Total OPEB liability - beginning 34,482,285 32,920,327
Total OPEB liability - ending $ 31,689,479 34,482,285
Covered-employee payroll $ 31,387,630 31,387,630Total OPEB liability as a percentage of covered-employee payroll 100.96% 109.86%
* Only two years of information available.
CITY OF AUGUSTA, MAINERequired Supplementary Information, Continued
60
Schedule of Changes in the City’s Total Health Plan – MEABT OPEB Liability and Related RatiosLast 10 Fiscal Years*
2019
Total OPEB Liability
Service Cost $ 50,481Interest 254,042Changes of benefit terms -Differences between expected and actual experience -Changes of assumptions or other inputs (274,967)Benefit payments (331,425)
Net change in total OPEB Liability (301,869)
Total OPEB liability - beginning 7,209,918
Total OPEB liability - ending $ 6,908,049
Covered-employee payroll $ 14,652,167Total OPEB liability as a percentage of covered-employee payroll 47.15%
* Only one year of information available.
CITY OF AUGUSTA, MAINERequired Supplementary Information, Continued
61
Schedule of City’s Proportionate Share of the Net OPEB LiabilityLast 10 Fiscal Years*
2019 2018
PLD OPEB PlanCity’s proportion of the net OPEB liability 3.7295% 3.8156%City’s proportionate share of the net OPEB liability $ 753,403 644,049City’s covered-employee payroll 14,465,832 14,531,169
City’s proportionate share of net OPEB liability as a percentage of its covered-employee payroll 5.21% 4.43%Plan fiduciary net position as a percentage of the total OPEB liability 43.92% 47.42%
SET OPEB PlanCity’s proportion of the net OPEB liability 0.00% 0.00%City’s proportionate share of the net OPEB liability $ - -State’s proportionate share of the net OPEB liability associated with the City 503,957 483,780
Total 503,957 483,780
Plan fiduciary net position as a percentage of the total OPEB liability 48.04% 47.29%
* Only two years of information available. Amounts presented for each fiscal year were determined as of the endof the previous fiscal year.
CITY OF AUGUSTA, MAINERequired Supplementary Information, Continued
62
Schedule of City OPEB ContributionsLast 10 Fiscal Years*
2019 2018
PLD OPEB PlanContractually required contribution $ 20,007 18,916Contributions in relation to the contractually required contribution (20,007) (18,916)
Contribution deficiency (excess) $ - -
City’s covered-employee payroll $ 15,424,144 14,465,832Contributions as a percentage of covered-employee payroll 0.13% 0.13%
* Only two years of information available.
CITY OF AUGUSTA, MAINERequired Supplementary Information, Continued
63
Schedule of City’s Proportionate Share of the Net Pension Liability Maine Public Employees Retirement System
Consolidated Plan (PLD) and State Employee and Teacher Plan (SET)Last 10 Fiscal Years*
2019** 2018** 2017** 2016** 2015**PLD PlanCity’s proportion of the net pension liability 2.6375% 2.7624% 2.6915% 2.6631% 2.6391%City’s proportionate share of the net pension liability $ 7,218,191 11,310,273 14,300,793 8,496,421 4,061,126City’s covered payroll 14,465,832 14,531,169 13,545,518 13,115,762 13,109,489City’s proportion share of the net pension liability as a percentage of its covered payroll 49.90% 77.83% 105.58% 64.78% 30.98%Plan fiduciary net position as a percentage of of the total pension liability 91.14% 86.43% 81.61% 88.27% 94.10%
SET PlanCity’s proportion of the net pension liability 0.1002% 0.0973% 0.1023% 0.1107% 0.1080%
City’s proportionate share of the net pension liability 1,352,816 1,413,768 1,806,941 1,494,270 1,166,713State’s proportionate share of the net pension liability associated with the City 14,340,111 15,323,897 18,506,075 14,298,777 11,437,550
Total $ 15,692,927 16,737,665 20,313,016 15,793,047 12,604,263
City’s covered payroll $ 14,283,554 13,939,693 13,501,297 13,257,588 13,098,829City’s proportion share of the net pension liability as a percentage of its covered payroll 9.47% 10.14% 13.38% 11.27% 9.26%Plan fiduciary net position as a percentage of of the total pension liability 82.90% 80.78% 76.21% 81.18% 83.91%
* Only five years of information available.** The amounts presented for each fiscal year were determined as of the prior fiscal year.
CITY OF AUGUSTA, MAINERequired Supplementary Information, Continued
64
Schedule of City ContributionsMaine Public Employees Retirement System
Consolidated Plan (PLD) and State Employee and Teacher Plan (SET)
Last 10 Fiscal Years*
2019 2018 2017 2016 2015 2014PLD PlanContractually required contribution $ 1,629,090 1,463,344 1,415,851 1,262,918 1,076,272 914,894Contributions in relation to the contractually required contribution (1,629,090) (1,463,344) (1,415,851) (1,262,918) (1,076,272) (914,894)
Contribution deficiency (excess) - - - - - -
City’s covered payroll 15,424,144 14,465,832 14,531,169 13,545,518 13,115,762 13,109,488Contributions as a percentage of covered payroll 10.56% 10.12% 9.74% 9.32% 8.21% 6.98%
SET PlanContractually required contribution 587,392 567,057 468,374 453,644 351,326 347,119Contributions in relation to the contractually required contribution (587,392) (567,057) (468,374) (453,644) (351,326) (347,119)
Contribution deficiency (excess) $ - - - - - -
City’s covered payroll $ 14,795,770 14,283,554 13,939,693 13,501,297 13,257,588 13,098,829Contributions as a percentage of covered payroll 3.97% 3.97% 3.36% 3.36% 2.65% 2.65%
* Only six years of information available.
CITY OF AUGUSTA, MAINENotes to Required Supplementary Information
65
Changes of Benefit Terms (Pension) - None
Changes of Assumptions (Pension) - The following are changes in actuarial assumptions used in the most recent valuations:
2018 2016 2015 2014 2013
Discount rate – PLD 6.750% 6.875% 7.125% 7.250% 7.250%Discount rate – SET 6.750% 6.875% 7.125% 7.125% 7.250%Inflation rate 2.75% 2.75% 3.50% 3.50% 3.50%Salary increases – PLD 2.75-9.00% 2.75-9.00% 3.50-9.50% 3.50-9.50% 3.50-9.50%Salary increases – SET 2.75-14.50% 2.75-14.50% 3.50-13.50% 3.50-13.50% 3.50-13.50%Cost of living increases – PLD 1.91% 2.20% 2.55% 3.12% 3.12%Cost of living increases – SET 2.20% 2.20% 2.55% 2.55% 2.55%
* This schedule is intended to show information for ten years, but only the years in which changes occurred havebeen displayed. Additional years' information will be displayed as it becomes available.
Mortality rates:In 2015, mortality rates were based on the RP2000 Combined Mortality Table projected forward to 2015 using Scale AA. In 2016 and going forward, mortality rates were based on the RP2014 Total Data Set Health Annuitant Mortality Table.
Changes of Benefit Terms (OPEB) - None
Changes of Assumptions (OPEB) - The following are changes in actuarial assumptions used in the most recent valuations regarding the MPERS life insurance plans:
2018 2017
Discount rate – SET 6.750% 6.875%
Under the Health Plan - MMEHT, changes of assumptions and other inputs reflects the changes in the discount rate each period. The following are the discount rates used in each period:
Fiscal YearDiscount
Rate20192018
4.10%3.44%
2017 3.78%
Under the Health Plan – MEABT, changes of assumptions and other inputs reflects the changes in the discount rate each period. The following are the discount rates used in each period:
Fiscal YearDiscount
Rate2019 3.87%2018 3.58%
Additionally, the valuation method was changed from the Projected Unit Credit funding method in 2017 to the Entry Age Normal funding method in 2018.
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GENERAL FUND
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Exhibit A-1
CITY OF AUGUSTA, MAINE
General Fund
Comparative Balance Sheets
June 30, 2019 and 2018
2019 2018
ASSETS
Cash and cash equivalents $ 23,798,072 25,835,669
Investments 11,694,262 11,916,968
Receivables:
Taxes 894,849 852,465
Tax liens 334,152 379,750
Due from other governments 479,200 472,140
Accounts (net of allowance for uncollectibles) 339,476 283,218
Inventory 703 336
Prepaid items 162,020 215,012
Total assets $ 37,702,734 39,955,558
LIABILITIES
Accounts payable and other accrued liabilities 936,447 1,055,993
Accrued payroll and benefits 2,580,567 2,452,197
Escrow payable 39,692 68,080
Taxes paid in advance 4,447 619
Interfund loans payable 17,508,236 20,510,029
Total liabilities 21,069,389 24,086,918
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - property taxes 909,003 891,745
Total deferred inflows of resources 909,003 891,745
FUND BALANCES
Nonspendable - inventory and prepaids 162,723 215,348
Restricted for education 2,977,102 3,448,198
Assigned for subsequent budget 1,436,683 1,436,683
Assigned for reserves 2,467,260 2,473,161
Assigned for encumbrances 291,304 330,652
Unassigned - budget stabilization 1,200,000 1,200,000
Unassigned 7,189,270 5,872,853
Total fund balances 15,724,342 14,976,895
Total liabilities, deferred inflows of
resources, and fund balances $ 37,702,734 39,955,558
69
Exhibit A-2
CITY OF AUGUSTA, MAINEGeneral Fund
Statement of Revenues, Expenditures, and Changesin Fund Balance - Budget and Actual
For the year ended June 30, 2019(with comparative actual amounts for the year ended June 30, 2018)
2019Variancepositive 2018
Budget Actual (negative) Actual
Revenues:Taxes:
Real and personal property $ 31,655,932 31,634,266 (21,666) 29,939,410 Tax interest, lien penalties, payments in lieu 197,184 201,503 4,319 214,548 Excise taxes 3,158,700 3,372,672 213,972 3,354,632
Total taxes 35,011,816 35,208,441 196,625 33,508,590
Licenses and permits 129,795 221,108 91,313 199,695
Intergovernmental:Education 15,161,188 15,289,688 128,500 13,932,675 Tree growth reimbursement 8,967 8,818 (149) 8,967Veterans exemption reimbursement 15,579 16,955 1,376 15,579 Homestead exemption 1,043,547 1,043,547 - 810,782Business equipment tax reimbursement 459,504 459,930 426 317,413 State revenue sharing 1,197,186 1,257,803 60,617 1,186,930 FEMA - 38,603 38,603 - General assistance DHS/SSI 12,100 8,230 (3,870) 13,282 Police reimbursement - 328 328 1,942 Urban Rural Initiative Payment 341,000 339,676 (1,324) 341,092
Total intergovernmental 18,239,071 18,463,578 224,507 16,628,662
Tuition and other charges for services - education 645,000 511,120 (133,880) 757,771
Charges for services:Police 132,230 135,598 3,368 130,425 Fire and ambulance 1,987,657 1,832,167 (155,490) 1,945,622 Community services 4,000 5,178 1,178 4,628
Public works 8,000 14,388 6,388 8,055 Finance and admin 111,981 90,128 (21,853) 117,537
Total charges for services 2,243,868 2,077,459 (166,409) 2,206,267
Fees and fines:Traffic tickets 2,690 2,447 (243) 3,760Court fees 14,000 22,402 8,402 12,691 Lithgow Library 28,750 30,135 1,385 30,775 Code enforcement - 900 900 221
False alarm calls 5,000 4,275 (725) 4,550Total fees and fines 50,440 60,159 9,719 51,997
Unclassified:Rents - City property 98,807 97,888 (919) 102,878Cemeteries 27,500 20,582 (6,918) 21,065Planning - - - 9,000Animal control program 8,950 10,259 1,309 10,684General assistance reimbursement 166,215 232,803 66,588 163,994Cable TV franchise 97,161 97,161 - 97,161Public safety miscellaneous revenue 8,000 11,804 3,804 21,409Public works miscellaneous 4,075 15,640 11,565 46,209Workers compensation 3,500 21,120 17,620 11,650Unclassified - City 39,600 44,133 4,533 43,254Unclassified - Education 30,000 125,441 95,441 81,958
Total unclassified 483,808 676,831 193,023 609,262
Investment earnings 102,975 880,577 777,602 131,156
Total revenues 56,906,773 58,099,273 1,192,500 54,093,400
70
Exhibit A-2, Cont.
CITY OF AUGUSTA, MAINE
Statement of Revenues, Expenditures, and Changes
in Fund Balance - Budget and Actual - General Fund, Continued
2019
Variance
positive 2018
Budget Actual (negative) Actual
Expenditures:
Current:
Legislative and executive:
Mayor and council $ 30,765 30,338 427 30,586
City management 237,488 239,470 (1,982) 232,664
Corporation counsel 128,004 131,431 (3,427) 103,133
Unclassified 188,680 163,655 25,025 169,964
Contingency 31,579 23,865 7,714 31,406
Total legislative and executive 616,516 588,759 27,757 567,753
Finance and administration:
City clerk/treasurer/collection 520,956 472,287 48,669 475,751
Registrations and elections 56,192 38,585 17,607 34,647
City auditor 231,627 269,112 (37,485) 177,484
Information systems 476,229 480,321 (4,092) 485,259
Assessor 192,552 185,658 6,894 177,909
Finance and administration 160,346 148,773 11,573 157,680
Human resources 263,341 258,475 4,866 288,918
Total finance and administration 1,901,243 1,853,211 48,032 1,797,648
Development services:
Economic development 200,704 254,660 (53,956) 274,161
Planning 263,718 260,581 3,137 273,442
Historic preservation 4,000 1,748 2,252 2,294
Code enforcement 243,411 171,774 71,637 174,092
City facilities 1,099,640 1,057,982 41,658 927,876
Total development services 1,811,473 1,746,745 64,728 1,651,865
Community services:
Community services administration 216,375 216,084 291 213,121
Public library 820,867 763,548 57,319 745,461
Recreation 182,818 177,394 5,424 172,003
Parks and cemeteries 974,420 874,377 100,043 821,613
Fort Western 112,385 114,067 (1,682) 108,271
Bicentennial Nature Park 28,189 30,159 (1,970) 28,216
Health and welfare 169,325 162,738 6,587 162,537
General assistance 237,450 332,639 (95,189) 235,543
Total community services 2,741,829 2,671,006 70,823 2,486,765
71
Exhibit A-2, Cont.
CITY OF AUGUSTA, MAINE
Statement of Revenues, Expenditures, and Changes
in Fund Balance - Budget and Actual - General Fund, Continued
2019
Variance
positive 2018
Budget Actual (negative) Actual
Expenditures, continued:
Current, continued:
Public safety:
Police $ 5,261,795 5,189,792 72,003 5,081,217
Fire and ambulance 4,764,054 4,936,804 (172,750) 4,488,536
Total public safety 10,025,849 10,126,596 (100,747) 9,569,753
Public works:
Public works administration 68,502 70,436 (1,934) 68,491
Highway 2,133,160 1,924,153 209,007 1,826,259
Snow removal 1,296,730 1,400,727 (103,997) 1,505,545
Waste removal 832,899 831,057 1,842 747,439
Engineering 92,297 74,183 18,114 90,467
Total public works 4,423,588 4,300,556 123,032 4,238,201
Education:
Current:
Regular instruction 10,214,036 9,968,032 246,004 9,335,494
Special education 5,126,347 4,961,598 164,749 4,416,553
Career and technical education 2,530,092 2,360,099 169,993 2,168,543
Other instruction 597,579 539,647 57,932 527,914
Student and staff support 2,659,660 2,505,667 153,993 2,002,701
System administration 910,309 844,507 65,802 854,207
School administration 1,740,772 1,613,516 127,256 1,606,549
Transportation and buses 1,634,604 1,754,376 (119,772) 1,671,413
Facilities maintenance 3,250,604 3,225,324 25,280 3,577,111
All other 5,187 1,016 4,171 2,000
Debt service 2,018,768 2,012,850 5,918 2,069,714
Total education 30,687,958 29,786,632 901,326 28,232,199
Retirement and insurance:
Retirement and insurance 2,934,518 2,592,113 342,405 2,390,559
Total retirement and insurance 2,934,518 2,592,113 342,405 2,390,559
Utilities:
Sanitary sewer and drains 1,323,893 1,316,182 7,711 1,311,438
Lighting and electricity 556,086 412,766 143,320 537,830
Water 758,376 765,846 (7,470) 768,236
Total utilities 2,638,355 2,494,794 143,561 2,617,504
72
Exhibit A-2, Cont.
CITY OF AUGUSTA, MAINE
Statement of Revenues, Expenditures, and Changes
in Fund Balance - Budget and Actual - General Fund, Continued
2019
Variance
positive 2018
Budget Actual (negative) Actual
Expenditures, continued:
Current, continued:
Unclassified:
County tax $ 1,583,461 1,583,461 - 1,523,777
Sick/vacation payout - - - 208,915
Total unclassified 1,583,461 1,583,461 - 1,732,692
Debt service (excluding education) 3,077,957 3,128,347 (50,390) 2,643,846
Total expenditures 62,442,747 60,872,220 1,570,527 57,928,785
Excess (deficiency) of revenues over
(under) expenditures (5,535,974) (2,772,947) 2,763,027 (3,835,385)
Other financing sources (uses):
Budgeted utilization of surplus - City 1,436,683 - (1,436,683) -
Budgeted utilization of surplus - Education 1,323,299 - (1,323,299) -
Use of prior year encumbrances - City 308,414 - (308,414) -
Use of prior year encumbrances - Education 181,563 - (181,563) -
Transfers from other funds 3,054,946 3,192,612 137,666 2,915,923
Total other financing sources (uses) 6,304,905 3,192,612 (3,112,293) 2,915,923
Net change in fund balance - budgetary basis 768,931 419,665 (349,266) (919,462)
Reconciliation to GAAP basis:
Add back: encumbrances expended in budgetary - City 291,304 330,652
Add back: encumbrances expended in budgetary - Education 42,379 184,240
Change in reserves (5,901) (33,791)
Net change in fund balance - GAAP basis 747,447 (438,361)
Fund balance, beginning of year 14,976,895 15,415,256
Fund balance, end of year $ 15,724,342 14,976,895
73
Exhibit A-3
CITY OF AUGUSTA, MAINE
Reserves - General Fund
Combining Statement of Revenues, Expenditures, and Changes in Fund BalancesFor the year ended June 30, 2019
Fund Fund
balances Revenues balances
beginning of Development end of
year Unclassified Services Public Safety Transfers year
City reserves - assigned:
1901 Central service reserve $ 36,927 - - - - 36,927
1902 Equipment maintenance self reserve 17,149 700 - - - 17,849
1903 Sick and vacation reserve 1,832,556 - - - - 1,832,556
1905 Historic preservation reserve 20,618 - - - - 20,618
1906 Police local match reserve 74,740 - - - - 74,740
1907 Fire local match reserve 1,755 - - - - 1,755
1908 Quimby lot infrastructure reserve 10,310 - - - - 10,310
1911 Severance payout 33,353 - - - - 33,353
1912 Lithgow Library 2,162 - - - - 2,162
1915 Forest mgmt plan - Bond Brook 6,000 - - - - 6,000
1916 Mill Park easement 40,000 - - - (16,000) 24,000
1917 Fuel assistance 330 100 - - - 430
1918 Fire equipment reserve 5,100 - - - - 5,100
1921 Colonial Theater 300,000 - - - - 300,000
1922 Downtown incentive 42,161 - 1,383 - - 40,778
1923 Bond Brook recreation 50,000 - 11,718 - - 38,282
1925 Police Reserve - 24,000 - 1,600 - 22,400
City reserves - unassigned:
1919 Tax relief fund (budget stabilization) 1,200,000 - - - - 1,200,000
Total City reserves 3,673,161 24,800 13,101 1,600 (16,000) 3,667,260
School reserves:
1952 Sick and vacation reserve 136,777 - - - - 136,777
Total School reserves 136,777 - - - - 136,777
Total reserves $ 3,809,938 24,800 13,101 1,600 (16,000) 3,804,037
Expenditures
74
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
Special revenue funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes.
CAPITAL PROJECTS FUNDS
Capital projects funds are used to account for the purchase or construction of capital assets other than those accounted for in other funds.
PERMANENT FUNDS
Permanent funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the reporting government’s programs.
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Exhibit B-1
CITY OF AUGUSTA, MAINE
Nonmajor Governmental Funds
Combining Balance SheetJune 30, 2019
Special Capital Total Nonmajor
Revenue Projects Permanent Governmental
Funds Funds Funds Funds
ASSETS
Cash and cash equivalents $ 3,902 1,157,067 16,758 1,177,727
Investments 58,713 - 454,200 512,913
Receivables:
Due from other governments 880,873 - - 880,873
Accounts 105,150 - - 105,150
Notes 145,000 - - 145,000
Interfund loans receivable 5,509,701 5,990,240 167,199 11,667,140
Inventory 26,139 - - 26,139
Prepaid items 5,445 - - 5,445
Total assets $ 6,734,923 7,147,307 638,157 14,520,387
LIABILITIES
Accounts payable and other accrued liabilities 206,615 792,033 - 998,648
Accrued payroll and benefits 143,924 - - 143,924
Interfund loans payable 392,448 - - 392,448
Total liabilities 742,987 792,033 - 1,535,020
FUND BALANCES
Nonspendable 31,584 - 502,721 534,305
Restricted 4,893,554 3,052,238 135,436 8,081,228
Committed 1,173,073 3,303,036 - 4,476,109
Unassigned (106,275) - - (106,275)
Total fund balances 5,991,936 6,355,274 638,157 12,985,367
Total liabilities and fund balances $ 6,734,923 7,147,307 638,157 14,520,387
77
Exhibit B-2
CITY OF AUGUSTA, MAINE
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund BalancesFor the year ended June 30, 2019
Capital
Special Projects Permanent Total Nonmajor
Revenue Funds Funds Governmental
Funds (Schedule 3) (Schedule 4) Funds
Revenues:Property taxes $ 5,401,649 - - 5,401,649
Intergovernmental 4,599,675 124,211 - 4,723,886
Unclassified 410,598 5,310 - 415,908
Charges for services 1,650,484 - - 1,650,484
Investment income (loss) - 9,106 20,797 29,903
Total revenues 12,062,406 138,627 20,797 12,221,830
Expenditures:
Current:
Finance and administration 2,129,797 - - 2,129,797
Development services 659,424 - - 659,424
Community services 809,992 - - 809,992
Public safety 515,385 - - 515,385
Public works 157,388 - - 157,388
Education 3,119,292 - - 3,119,292
Food services 1,437,903 - - 1,437,903
Unclassified - - 15,800 15,800
Capital outlay - 6,951,989 - 6,951,989
Total expenditures 8,829,181 6,951,989 15,800 15,796,970
Excess (deficiency) of revenues
over (under) expenditures 3,233,225 (6,813,362) 4,997 (3,575,140)
Other financing sources (uses):
Issuance of debt - 2,326,000 - 2,326,000
Premium on issuance of debt - 69,780 - 69,780
Lease proceeds - 1,150,000 - 1,150,000
Transfer from (to) other funds (3,426,931) 227,321 - (3,199,610)
Total other financing sources (uses) (3,426,931) 3,773,101 - 346,170
Net change in fund balance (193,706) (3,040,261) 4,997 (3,228,970)
Fund balances, beginning of year 6,185,642 9,395,535 633,160 16,214,337
Fund balances, end of year $ 5,991,936 6,355,274 638,157 12,985,367
78
Exhibit C-1
CITY OF AUGUSTA, MAINENonmajor Special Revenue Funds
Combining Balance SheetJune 30, 2019
City SchoolSpecial Special Adult
CDBG Revenue Revenue Adult Education SchoolLoan Fund Airport Funds Funds Education Enrichment Lunch Totals
ASSETSCash and cash equivalents $ 3,873 - 29 - - - - 3,902 Investments - - 58,713 - - - - 58,713 Receivables:
Due from other governments - 100,491 202,362 540,036 - - 37,984 880,873 Accounts - 4,172 100,978 - - - - 105,150 Notes 145,000 - - - - - - 145,000
Interfund loans receivable 40,455 - 4,807,983 - 128,954 164,987 367,322 5,509,701 Inventory - - - - - - 26,139 26,139 Prepaid items - 1,259 4,186 - - - - 5,445
Total assets $ 189,328 105,922 5,174,251 540,036 128,954 164,987 431,445 6,734,923
LIABILITIESAccounts payable and other accrued liabilities - 9,108 141,054 54,483 1,005 846 119 206,615
Accrued payroll and benefits - 47,733 22,042 714 5,715 2,644 65,076 143,924 Interfund loans payable - 3,708 - 388,740 - - - 392,448
Total liabilities - 60,549 163,096 443,937 6,720 3,490 65,195 742,987
FUND BALANCESNonspendable - 1,259 4,186 - - - 26,139 31,584 Restricted 189,328 44,114 3,928,596 107,674 122,234 161,497 340,111 4,893,554 Committed - - 1,173,073 - - - - 1,173,073 Unassigned - - (94,700) (11,575) - - - (106,275)
Total fund balances 189,328 45,373 5,011,155 96,099 122,234 161,497 366,250 5,991,936
Total liabilities and fund balances $ 189,328 105,922 5,174,251 540,036 128,954 164,987 431,445 6,734,923
79
Exhibit C-2
CITY OF AUGUSTA, MAINE
Nonmajor Special Revenue Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund BalancesFor the year ended June 30, 2019
City School
CDBG Special Special Adult
Loan Revenue Revenue Adult Education School
Fund Airport (Schedule 1) (Schedule 2) Education Enrichment Lunch Totals
Revenues:
Property taxes $ - - 4,944,346 - 457,303 - - 5,401,649
Intergovernmental - 348,502 803,827 2,286,827 187,602 - 972,917 4,599,675
Charges for services - 236,231 855,513 - 10,966 149,557 398,217 1,650,484
Unclassified (43) - 341,921 68,720 - - - 410,598
Total revenues (43) 584,733 6,945,607 2,355,547 655,871 149,557 1,371,134 12,062,406
Expenditures:
Current:
Finance and administration - - 2,129,797 - - - - 2,129,797
Development services - 601,021 58,403 - - - - 659,424
Community services - - 809,992 - - - - 809,992
Public safety - - 515,385 - - - - 515,385
Public works - - 157,388 - - - - 157,388
Education - - - 2,345,999 612,013 161,280 - 3,119,292
Food services - - - - - - 1,437,903 1,437,903
Total expenditures - 601,021 3,670,965 2,345,999 612,013 161,280 1,437,903 8,829,181
Excess (deficiency) of revenues over
(under) expenditures (43) (16,288) 3,274,642 9,548 43,858 (11,723) (66,769) 3,233,225
Other financing sources (uses):
Transfer to other funds - - (3,426,931) - - - - (3,426,931)
Total other financing sources (uses) - - (3,426,931) - - - - (3,426,931)
Net change in fund balances (43) (16,288) (152,289) 9,548 43,858 (11,723) (66,769) (193,706)
Fund balances, beginning of year 189,371 61,661 5,163,444 86,551 78,376 173,220 433,019 6,185,642
Fund balances, end of year $ 189,328 45,373 5,011,155 96,099 122,234 161,497 366,250 5,991,936
80
SCHEDULES
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Schedule 1
CITY OF AUGUSTA, MAINECity Special Revenue Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund BalancesFor the year ended June 30, 2019
Balances Balances
(deficits) (deficits)
beginning Inter- Transfers endof year governmental Other Expenditures in (out) of year
Legislative and executive:
Other programs - Committed:2019 Commemorative Quilts $ 6,335 - - - - 6,335
2135 Meetings 105 - - - - 1052194 Promotional service 595 - - - - 595
Total legislative and executive 7,035 - - - - 7,035
Development services: Federal/State programs:
2122 Canal Street 5,052 - - - - 5,052
2142 Regional efficiency grant 753 - - - - 753
2217 Blair Road Bridge replacement 57,783 - - - - 57,783
2221 Efficiency Maine (3,229) - - - - (3,229)
2227 Airport marketing grant 180 - - - - 180
2257 Civic Center Drive sidewalks 76,761 - - - 73,239 150,000 2256 KRRT Park connection (45,268) 55,575 - 11,717 - (1,410)
2258 Cony Farrington Trail connection 292 274 - 7,581 4,000 (3,015)
2278 CDBG market place 52,061 - - - - 52,061
2283 CDBG workforce development - 39,063 - 39,063 - - Other programs - Restricted:
2124 First time home buyers program 7,009 - - - - 7,009
2133 Museum in the streets 3,601 - - - - 3,601 2137 Fairfield Inn - Anthony Ave. 9,169 - - - (9,169) - 2147 Impact fee Packard Development 18,410 - - - - 18,410 2148 Capitol Street extension 2,094 - - - - 2,094 2174 Texas Roadhouse LLC 2,773 - - - - 2,773
2267 Skowhegan Savings Bank 6,600 - - - (6,600) - 2273 Elm Street Corp impact fee 6,600 - - - - 6,600 2286 AARP - Age friendly community 1,289 - - 42 - 1,2472290 Stonewater impact fee 39,025 - - - - 39,025
Other programs - Committed:
2012 Sale of Cony HS 164,341 - - - (164,340) 1Total development services 405,296 94,912 - 58,403 (102,870) 338,935
Public works: Other programs - Committed:
2035 ADP misc. work highway 152 - 62,648 62,816 - (16)2036 Accidents (26,673) - 79,147 87,021 - (34,547)
2038 School miscellaneous work - - 6,929 7,551 - (622)
2117 Public works special revenues 445 - - - - 4452248 Failed septic 7,145 - - - - 7,145
2271 Natural gas street opening permits 78,763 - 55 - - 78,818Total public works 59,832 - 148,779 157,388 - 51,223
Revenues
83
Schedule 1, cont.
Balances Balances
(deficits) (deficits)
beginning Inter- Transfers end
of year governmental Other Expenditures in (out) of year
Community services:
Federal/State programs:
2095 Blaine Memorial Trees $ 347 - - - - 347
2135 Snowmobile grant 1,060 3,840 - 4,900 - -
Other programs - Restricted:
2060 Stain Glass Lithgow Library 1,774 - - - - 1,774
2061 Lost library books 7,640 - 17,378 16,292 - 8,726
2138 Farmer's market 438 - - - - 438
2145 Viles Park Memorial 6,655 - - - - 6,655
2164 Graffiti removal 2,799 - - 57 - 2,742
2178 Kennebec Rail Trail 20,302 - 21,250 16,858 - 24,694
2208 Storage shed tennis court 626 - - - - 626
2216 Kennebec River Rail Trail paving 269 - - - - 269
2230 Food for thought 172 - - - - 172
2260 Lets go gardening grant 18 - - - - 18
2270 Petanque Court 1,419 - - - - 1,419
Other programs - Committed:
2055 Tree board 480 - - - - 480
2065 After School Daycare 244,004 212,181 380,098 518,463 201,510 519,330
2079 Recreation - adult (5,688) - 26,985 26,685 - (5,388)
2080 Recreation - youth 5,019 - 150,423 127,207 - 28,235
2081 Recreation - special events 2,656 - 20 300 - 2,376
2085 School mowing contract 44,429 - 92,727 93,136 - 44,020
2086 Bicentennial park 1,074 - - - - 1,074
2088 4th of July 3,522 - - - - 3,522
2096 Pleasant Hill Saw timber (799) - - - - (799)
2111 Spring running 214 - - - - 214
2207 Ball field improvements 940 - - - - 940
2226 Dog park 216 - - - - 216
2231 Cable TV equipment 14,557 - 6,000 2,720 - 17,837
2243 Tree Board investment fund 22,059 - 852 - - 22,911
2244 Bicentennial park investment 32,017 - - - - 32,017
2293 Forest Grove Cemetery - - 30,000 614 - 29,386
2294 Howard Hill - - 1,589 2,760 - (1,171)
Total community services 408,219 216,021 727,322 809,992 201,510 743,080
Revenues
CITY OF AUGUSTA, MAINE
City Special Revenue Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund BalancesFor the year ended June 30, 2019
84
Schedule 1, cont.
Balances Balances
(deficits) (deficits)
beginning Inter- Transfers end
of year governmental Other Expenditures in (out) of year
Finance and administration:
Other Programs - Restricted
2009 TIF - Downtown $ 433,252 - 335,233 72,898 (175,801) 519,786
2300 TIF - all purpose - - 90,691 92,774 - (2,083)
2301 TIF - Cony Circle 529,622 - 169,291 - (87,424) 611,489
2302 TIF - Old Belgrade Road 83 - - - - 83
2303 TIF - Central Maine Commerce 118,858 - 506,593 274,658 (155,384) 195,409
2304 TIF - Market Place Phase 1 208,936 - 465,000 - (574,750) 99,186
2305 TIF - Market Place Phase 2 - - 1,369,537 400,000 (969,537) -
2306 TIF - JS McCarthy (2011) 26,233 - 14,874 7,437 (33,670) -
2307 TIF - Gas 2,024,541 - 977,307 - (1,222,128) 1,779,720
2308 TIF - JS McCarthy (2001) - - 7,694 - (7,694) -
2309 TIF - Augusta East 54,789 - 199,834 195,511 (59,112) -
2310 TIF - NRF 1 66,830 - 36,204 - (103,034) -
2311 TIF - NRF 2014 21,203 - 38,199 15,279 (44,123) -
2312 TIF - Cony Flat Iron - - 57,714 53,285 (4,429) -
2313 TIF - 222-232 Water Street - - 9,122 6,386 (2,736) -
2314 TIF - Maine Instrument Flight - - 11,022 5,511 (5,511) -
2315 TIF - Western Avenue 141,904 - 205,428 - (58,238) 289,094
2316 TIF - Hodgkins School 4,300 - 52,762 48,334 - 8,728
2317 TIF - McCarthy IV - - 14,668 7,334 - 7,334
2318 TIF - PFG Northcenter 197,874 - 224,160 422,034 - -
2319 TIF - 275-287 Water Street - - 35,890 35,890 - -
2320 TIF - Inn at City Hall Rehabilitation - - 123,123 123,123 - -
2016 MMEHT wellness grant 4,354 - 7,658 9,837 - 2,175
Other programs - Committed:
2010 Cable TV Franchise 8,318 - 161,997 137,359 (22,000) 10,956
2013 Fort Western Trustees (316) - 75,800 75,945 - (461)
2014 Augusta Housing Authority - - 12,112 7,842 - 4,270
2015 Augusta Parking District (77) - 1,552 1,637 - (162)
2205 GAUD 3,491 - 53,093 53,093 - 3,491
2228 Wellness loss prevention 25,490 - - 453 - 25,037
2245 Cony High School investment 34,460 - 1,471 - - 35,931
2281 Tax acquired property 200,196 - 4,250 83,177 - 121,269
Total finance and administration 4,104,341 - 5,262,279 2,129,797 (3,525,571) 3,711,252
CITY OF AUGUSTA, MAINE
City Special Revenue Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund BalancesFor the year ended June 30, 2019
Revenues
85
Schedule 1, cont.
Balances Balances
(deficits) (deficits)
beginning Inter- Transfers end
of year governmental Other Expenditures in (out) of year
Public safety:
Federal/State programs:
2040 Forfeiture fund $ 11,060 4,222 - 9,495 - 5,787
2047 Bulletproof vest - 3,953 - 3,953 - -
2048 Seatbelt grant - 20,422 - 20,422 - -
2049 OUI grant - 14,173 - 14,291 - (118)
2076 Edward Byrne Memorial (JAG) - 38,751 - 38,751 - -
2113 Hazmat sustainment 4,994 - - - - 4,994
2125 Speed enforcement - 6,616 - 6,615 - 1
2152 DHS law enforcement reimb (157) 16,506 - 16,359 - (10)
2189 Southern Kennebec underage drinking - 9,986 - 9,986 - -
2203 ATV Grant 74 1,349 - 1,375 - 48
2229 Underage Drinking - 3,225 - 3,225 - -
2232 2010 Homeland security grant 5,053 - - - - 5,053
2269 2012 Homeland security grant - 139,608 - 171,330 - (31,722)
2275 Regional response team (4,994) - - - - (4,994)
2284 Private grants - 2,000 - 2,000 - -
2285 Maine Drug Enforcement Agency (1,597) 91,642 - 92,998 - (2,953)
2289 COPS hiring program 195 43,878 - 43,674 - 399
2291 Targeted pedestrian enforcement - 1,735 - 1,735 - -
2292 US Marshal grant - 339 - 339 - -
2553 Teen driver safety grant 170 26,700 - 26,870 - -
Other programs - Restricted:
2050 Fire prevention education 2,308 - 3,400 866 - 4,842
2119 MMA safety grant - - - 2,000 - (2,000)
2225 MMA safety grant - 1,360 - 1,360 - -
Other programs - Committed:
2042 Police outside work 57,917 66,429 - 47,741 - 76,605
2175 Fire airport service 103,698 - - - - 103,698
Total public safety 178,721 492,894 3,400 515,385 - 159,630
Total City special revenue funds $ 5,163,444 803,827 6,141,780 3,670,965 (3,426,931) 5,011,155
Revenues
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
CITY OF AUGUSTA, MAINE
City Special Revenue Funds
For the year ended June 30, 2019
86
Schedule 2
CITY OF AUGUSTA, MAINE
School Special Revenue Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund BalancesFor the year ended June 30, 2019
Balances Balances
(deficits) (deficits)
beginning end of
of year Revenues Expenditures year
Federal programs:
0205 CC of ME Adult Education $ 3,061 3,000 397 5,664
0230 Title IA - Chapter I - Disadvantaged - 970,341 970,341 -
0232 Title IA - Program Improvement - - 34 (34)
0240 Student Support and Academic Enrichment - 28,576 28,576 -
0247 Local Entitlement - 633,650 633,650 -
0251 PreSchool - 12,341 12,341 -
0261 Title VII - McKinney Homeless (428) 7,392 6,964 -
0267 Rural Low Income - 33,421 33,421 -
0268 Title III - ESL (1,440) 13,734 13,734 (1,440)
0270 Title IIA - Improving Teacher Quality - 111,512 111,512 -
0272 ESL Refugee - 16,162 16,162 -
0286 Perkins Learning Center - 114,395 114,395 -
0289 Title IC Perkins - 12,081 12,081 -
0295 ABE Federal Program - 69,015 69,015 -
0915 Fiscal Agent - 69,335 69,335 -
Total federal programs 1,193 2,094,955 2,091,958 4,190
State programs:
0220 State Mini Grant - Vocational - 100,913 76,674 24,239
0223 Proficiency Education 28,465 - 13,740 14,725
0225 College Transition Initiative - 17,559 27,660 (10,101)
0226 CTE Early College Grant 12,844 - - 12,844
0233 PEPG Development Grant 561 - 552 9
0237 MLTI Grant - 73,400 73,400 -
Total state programs 41,870 191,872 192,026 41,716
Other programs:
0203 MELMAC College Access 14,909 22,000 15,231 21,678
0208 Computer Repairs 20,474 3,600 3,023 21,051
0209 Donations 2,256 347 1,292 1,311
0218 Oak Grove Mini-Grant - 7,550 6,896 654
0601 School Catering 681 - - 681
0618 Chizzle Whizzle - 17,864 17,864 -
0900 Scholarship 508 17,359 17,709 158
0916 Adult Education Pass Through 4,660 - - 4,660
Total other programs 43,488 68,720 62,015 50,193
Totals $ 86,551 2,355,547 2,345,999 96,099
87
Schedule 3
CITY OF AUGUSTA, MAINE
Nonmajor Capital Project Funds
Combining Statement of Revenues, Expenditures, and Changes in Fund BalancesFor the year ended June 30, 2019
Balances Bond/ Balances
beginning lease Transfers end
of year Revenues Expenditures proceeds in (out) of year
City Funds:
3003 Fiscal 2003 $ 28,346 - - - - 28,346
3009 Fiscal 2009 56,300 - - - - 56,300
3010 Fiscal 2010 28,590 - - - (24,426) 4,164
3011 Fiscal 2011 109,143 - - - (53,727) 55,416
3012 Fiscal 2012 118,171 - 5,354 - (63,888) 48,929
3013 Fiscal 2013 137,725 - 1,902 - (62,709) 73,114
3014 Fiscal 2014 291,271 - 6,540 - (18,483) 266,248
3015 Fiscal 2015 492,994 - 74,415 - (127,398) 291,181
3016 Fiscal 2016 536,667 5,310 290,802 - (133,551) 117,624
3017 Fiscal 2017 3,165,632 - 3,594,474 - 2,438,841 2,009,999
3018 Fiscal 2018 4,088,087 124,211 1,602,641 - (1,244,436) 1,365,221
3019 Fiscal 2019 - - 290,062 2,395,780 (482,902) 1,622,816
3086 Dickman Parking Garage 200,322 - - - - 200,322
3099 Library Expansion 139,240 2,084 - - - 141,324
3100 LED Lighting Project - 7,022 1,085,799 1,150,000 - 71,223
School Funds:
0401 Energy Savings Project 47 - - - - 47
0403 Hussey Roof Project 3,000 - - - - 3,000
Total nonmajor capital projects $ 9,395,535 138,627 6,951,989 3,545,780 227,321 6,355,274
88
Schedule 4
Fund balance
Fund balance, unexpended Fund balance
principal, income, Investment Fund balance unexpended
beginning beginning income principal, income,
City Funds of year of year Donations (loss) Expenditures end of year end of year
6501 L. W. Titcomb Playground $ 6,281 (135) - 259 - 6,281 124
6502 Lithgow Library 24,933 1,823 - 1,128 - 24,933 2,951
6503 St. Mark's Church 11,968 647 - 532 - 11,968 1,179
6507 Cemetery Trust Fund 150,105 11,719 - 6,761 - 150,105 18,480
6516 Forest Grove Cemetery 75,538 19,980 - 3,794 15,000 75,538 8,774
6529 Kling Trust 9,974 700 - 458 - 9,974 1,158
6543 Alice Reynolds Trust 11,600 100 - 491 100 11,600 491
6544 Ed E. Gage Family Trust 49,700 1,100 - 2,136 - 49,700 3,236
6545 Edwards Dam Scholarship - 24,541 - 1,080 500 - 25,121
6546 Eliza Church Fund 3,385 174 - 151 - 3,385 325
6547 Ira Bunker 500 32 - 22 - 500 54
6548 Lipman Memorial Trust 4,169 1,093 - 227 100 4,169 1,220
6549 Miriam Titcomb Trust 22,660 2,211 - 1,006 - 22,660 3,217
6550 Peavy Scholarship Fund 1,000 3,348 - 182 100 1,000 3,430
6551 Sanford Legacy 1,496 80 - 67 - 1,496 147
6552 Cony Family Fund 10,050 183 - 434 - 10,050 617
6555 Cemetery Perpetual Care 104,362 63,910 - 2,100 - 104,362 66,010
6556 Mall Mitigation Land Trust 15,000 (1,067) - (31) - 15,000 (1,098)
Total City Funds $ 502,721 130,439 - 20,797 15,800 502,721 135,436
For the year ended June 30, 2019
Nonmajor Permanent Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
CITY OF AUGUSTA, MAINE
89
Schedule 5
Net position
Net position unexpended Net position
principal, income, Deductions Net position unexpended
beginning beginning Investment principal, income,
of year of year income Donations Expenditures end of year end of year
6002 Refurbish Alumni Field at Cony $ - 246,957 10,097 - - - 257,054
6003 Howard Hill Trust - 92,703 3,709 - 1,590 - 94,822
6251 Auto Mechanic Scholarship - 2,518 108 - - - 2,626
6252 Childcare Scholarship - 619 26 - - - 645
6253 CATC Multi-media Scholarship 595 207 33 - - 595 240
6254 CATC Plumbing And Heating - 443 19 - - - 462
6255 CHS Class of 1926 Perkins Award (held at CHS) - 122 - - 122 - -
6256 CHS Class of 1938 Scholarship Fund - 503 19 - 200 - 322
6257 CHS Special Music Concert (held at CHS) - 119 - - 119 - -
6258 Cony Restoration Fund - 1,868 79 - - - 1,947
6259 Devina Mudge Scholarship - 36 2 - - - 38
6260 Ebbie Brooks Math and Science Fund - 113 5 - 50 - 68
6261 Edgar A. Hussey Memorial - 4,936 206 - 200 - 4,942
6262 Eliza Church Fund - 978 41 - - - 1,019
6263 Frank Hewins Music - 836 34 - - - 870
6264 Friedlander Memorial Award - 58 2 - - - 60
6265 Georgianna Hayes English - 1,333 56 - - - 1,389
6266 Jon Crockett Memorial Fund - 3,810 157 - 150 - 3,817
6267 Lanny Cooper Memorial - 1,268 54 - - - 1,322
6268 Lee and Larry Leighton Scholars - 4,116 166 - 400 - 3,882
6269 Mable Thompson - 422 17 - 50 - 389
6270 Theresa Brannigan Memorial - 1,632 68 - - - 1,700
6271 Titcomb Fund 22,720 18,156 1,720 - - 22,720 19,876
6272 Florence Tanner McIntire Memorial - 93 5 - - - 98
6274 Mallory Dulac Scholarship - 1,258 48 - 500 - 806
6275 Cony High Scholarship (held at CHS) - 307 - - 307 - -
6276 Hawes/Jones Family Scholarship - 23,722 951 - 1,000 - 23,673
6277 Maynard Bob Young Memorial Scholarship - 19,819 783 100 - - 20,702
6701 Ann Williams Funds 2,000 11,893 583 - - 2,000 12,476
6702 Alumni Hall Restoration 50 868 49 - - 50 917
6703 Arthur E. Shea Memorial 1,161 (127) 44 - - 1,161 (83)
6704 CATC School Wide Scholarship 10,000 906 460 - - 10,000 1,366
6705 CHS Class of 1943 Scholarship Fund 7,199 1,629 367 - 500 7,199 1,496
6706 CHS Scholarship and Student Aid (held at CHS in checking) - 4,525 - - 4,525 - -
6707 CHS Scholarship and Student Aid (held at CHS in CD) - 9,153 - - 9,153 - -
6708 Carpentry Scholarship - 179 7 - - - 186
6709 Charles McGrail Scholarship 3,257 3,291 273 - 200 3,257 3,364
6710 Dorothy Giddings Fund 1,000 2,331 140 - - 1,000 2,471
6711 Edward Albing Math Fund 500 38 23 - 50 500 11
Subtotal $ 48,482 463,638 20,351 100 19,116 48,482 464,973
For the year ended June 30, 2019
Private-purpose Trust Funds
Combining Statement of Changes in Fiduciary Net Position
CITY OF AUGUSTA, MAINE
Additions
90
Schedule 5, cont.
Net positionNet position unexpended Net position
principal, income, Net position unexpendedbeginning beginning Investment principal, income,
of year of year income Donations Expenditures end of year end of year
6713 Food Service Scholarship $ - 114 5 - - - 1196714 Garside English Fund 1,000 (391) 26 - - 1,000 (365)6715 Helen Dyer Scholarship 1,717 174 80 - - 1,717 254
6716 H. Graham Nye CATC Scholarship 2,500 149 111 - - 2,500 2606718 Karen Carey Scholarship 2,608 (25) 106 - - 2,608 816719 Louis Ochmanski Scholarship 2,500 1,150 151 - 100 2,500 1,2016720 Louise Webber Fund 10,000 5,483 645 - 500 10,000 5,6286722 Mable I. Morton 1,933 1,490 143 - - 1,933 1,6336723 Mable Richmond Fund 200 11 8 - - 200 196724 Machine Tool Scholarship 15 877 39 - - 15 9166725 Melanie Ann Cote Scholarship 1,800 2,580 185 - - 1,800 2,7656726 Nora Jackson Scholarship 3,000 5,032 339 - - 3,000 5,3716727 Raymond Falconia Fund 5,000 131 214 - 200 5,000 145
6728 Richard Ayotte Scholarship 2,030 87 89 150 150 2,030 176
6729 Sandra Lipman Arts Fund - 345 14 - 150 - 209
6730 Theodore Rhoades Memorial 5,000 1,469 273 - - 5,000 1,742
6731 Thomas Bishop Memorial Scholarship 1,730 (226) 56 25 1,000 1,730 (1,145)
6734 G & E Roofing - 141 7 - - - 1486736 Mary O'Connell 9,930 212 427 - - 9,930 6396737 Scott Laliberte - 2,808 127 1,850 1,500 - 3,2856738 Chrissanne Burns Memorial - 5,783 205 3,050 3,500 - 5,5386739 Michaud Family Scholarship - 66 3 - - - 69 6740 A Joan Bridge - (2) 2 - - - - 6741 Richard Shaw Jackson Scholarship - 2,904 120 - - - 3,0246742 E Jean Andrews Scholarship 50,000 49,609 4,017 - 4,000 50,000 49,6266743 Evelyn and Pricilla Wilkins - 15,182 611 - 500 - 15,2936744 Richard McGuire School - 299 131 2,955 500 - 2,8856745 Cony High School Scholarship - 1,077 57 1,100 250 - 1,9846746 Geoffery Brown Scholarship - 327 11 - - - 3386747 Jean Radsky Scholarship - 244 6 - 248 - 26748 Josh Wilson Memorial Scholarship - 489 21 100 - - 6106749 Muriel McMallister Memorial - 39 1 - - - 406750 Barbara Hughes Hanson - 73 3 - - - 766751 Soule Scholarship - 2,023 80 300 300 - 2,1036752 Wayne Harris Scholarship - 98 4 - - - 102 6753 Tardiff-Fine Scholarship - 644 27 860 860 - 6716754 Curtis O'Brien Scholarship - 732 30 - - - 7626755 Bethlehem Lodge Scholarship - 488 20 - - - 5086756 General Scholarship - 1,348 55 - - - 1,4036757 Peter Dionne Scholarship - - 106 6,000 - - 6,106
Total $ 149,445 566,672 28,906 16,490 32,874 149,445 579,194
For the year ended June 30, 2019
Private-purpose Trust FundsCombining Statement of Changes in Fiduciary Net Position, Continued
CITY OF AUGUSTA, MAINE
Additions Deductions
91
Schedule 6
CITY OF AUGUSTA, MAINE
Agency Funds - Activity Funds
Statement of Changes in Assets and LiabilitiesFor the year ended June 30, 2019
Beginning End
of year Additions Deletions of year
ASSETS
Cash $ 251,324 227,067 258,601 219,790
Total assets $ 251,324 227,067 258,601 219,790
LIABILITIES
Due to student groups 251,324 227,067 258,601 219,790
Total liabilities $ 251,324 227,067 258,601 219,790
92
STATISTICAL SECTION
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Table 1
CITY OF AUGUSTA, MAINE
Government-wide Expenses by Function
Last Ten Fiscal Years
Development
Legislative services (1) and Retirement
Fiscal and Finance and public Community Public and
year executive administration works services safety Education insurance Utilities
2010 620,474$ 2,934,491 6,015,890 2,443,777 8,169,237 33,150,558 3,668,658 1,843,957
2011 530,991 3,128,512 5,186,770 2,540,309 8,414,744 31,882,197 1,372,067 1,849,879
2012 503,962 3,739,345 5,675,393 2,629,189 8,024,923 31,653,870 2,887,343 1,686,770
2013 451,287 3,098,179 5,215,484 2,508,477 8,067,039 30,516,363 3,166,570 2,263,375
2014 599,307 3,042,873 6,214,489 2,883,609 8,700,558 30,804,216 3,108,473 2,570,299
2015 576,556 3,171,224 6,211,761 2,995,671 8,817,839 30,430,740 1,803,541 2,464,731
2016 530,504 3,024,307 5,707,536 3,075,618 9,418,051 31,424,245 5,001,945 2,480,937
2017 595,730 3,231,743 6,453,848 3,430,938 9,986,398 33,978,049 4,283,436 2,468,640
2018 538,965 3,374,470 6,879,388 3,554,495 10,117,451 33,797,350 2,566,453 2,617,504
2019 558,937 3,978,356 6,627,352 3,695,504 10,953,000 35,446,188 1,034,314 2,494,794
Interest Central Capital Augusta Hatch Hill
Unclassified on debt garage maintenance Civic Center Landfill Airport (1) Total
1,634,375$ 150,443 1,325,849 9,586 2,689,638 2,917,070 505,709 68,079,712
1,545,250 132,514 1,391,499 - 2,757,129 2,842,985 - 63,574,846
1,633,097 155,541 1,578,780 - 2,658,420 2,197,797 - 65,024,430
1,563,403 180,084 1,746,202 - 2,708,495 2,421,337 - 63,906,295
1,434,554 151,240 1,854,746 13,964 2,610,474 1,767,362 - 65,756,164
1,588,673 228,732 1,893,276 520,857 2,650,799 1,848,165 - 65,202,565
1,639,085 240,336 1,742,689 944,470 2,438,453 2,177,496 - 69,845,672
1,741,613 80,035 1,823,599 1,125,080 2,556,550 2,286,252 - 74,041,911
1,859,716 118,732 1,814,373 87,452 2,671,401 2,858,583 - 72,856,333
341,910 270,711 1,980,917 366,225 2,850,177 2,256,918 - 72,855,303
(1) Beginning in the year ended June 30, 2011, airport services were moved into a special revenue fund (development services) in the governmental activities.
95
Table 2
CITY OF AUGUSTA, MAINE
Government-wide RevenuesLast Ten Fiscal Years
Operating Capital Grants and
Charges Grants Grants Contributions not Unrestricted
Fiscal for and and General Restricted to Investment
year Services Contributions Contributions Revenues Specific Programs Earnings Miscellaneous Total
2010 $ 9,366,323 23,685,244 - 28,993,720 2,576,597 449,766 2,257,182 67,328,832
2011 9,392,481 22,707,795 904,457 30,378,865 2,350,821 308,636 660,968 66,704,023
2012 9,564,646 21,731,296 214,107 31,108,749 2,340,970 257,353 169,294 65,386,415
2013 9,761,724 20,302,592 87,089 31,545,957 2,340,921 25,274 158,589 64,222,146
2014 8,758,034 23,286,886 166,182 33,104,730 1,806,050 140,720 236,490 67,499,092
2015 9,103,246 22,537,478 3,148,046 34,978,320 1,719,131 160,563 114,892 71,761,676
2016 9,255,592 21,375,896 117,139 36,903,317 1,813,228 315,466 266,838 70,047,476
2017 9,121,808 22,235,557 897,804 37,171,550 1,961,176 32,490 46,885 71,467,270
2018 10,484,662 22,325,683 429,397 38,627,733 2,339,671 130,583 147,893 74,485,622
2019 11,172,457 23,216,442 248,773 40,951,617 2,787,053 910,233 117,492 79,404,067
Program Revenues General Revenues
96
Table 3
CITY OF AUGUSTA, MAINE
General Fund Expenditures by Function - Budgetary BasisLast Ten Fiscal Years
Development
services and Insurances
Legislative and Finance and public Community Public and Debt
Year executive administration works services safety utilities Unclassified County Education service Total
2010 $ 628,168 1,462,186 4,636,937 1,892,153 7,263,830 4,138,021 221,610 1,358,766 26,145,023 1,002,847 48,749,541
2011 555,129 1,377,274 4,821,949 1,959,452 7,671,112 4,387,729 237,003 1,396,619 24,921,342 765,334 48,092,943
2012 541,282 1,525,188 4,544,805 2,097,974 7,870,019 4,265,327 56,235 1,350,807 26,520,191 694,840 49,466,668
2013 483,077 1,574,172 4,718,043 2,179,071 7,864,817 5,035,552 147,428 1,398,648 25,391,160 852,070 49,644,038
2014 630,217 1,575,804 4,848,663 2,285,625 8,156,722 5,294,000 - 1,404,986 25,245,751 898,014 50,339,782
2015 590,171 1,608,701 5,415,171 2,277,315 8,453,214 4,103,076 - 1,429,518 25,206,685 943,301 50,027,152
2016 556,714 1,684,792 5,007,266 2,247,263 8,802,013 4,633,616 (2,597) 1,475,821 26,376,189 1,414,737 52,195,814
2017 627,192 1,767,684 5,265,116 2,395,390 9,167,872 4,799,696 - 1,533,098 28,918,509 2,281,830 56,756,387
2018 567,753 1,797,648 5,890,066 2,486,765 9,569,753 5,008,063 208,915 1,523,777 28,232,199 2,643,846 57,928,785
2019 588,759 1,853,211 6,047,301 2,671,006 10,126,596 5,086,907 - 1,583,461 29,786,632 3,128,347 60,872,220
97
Table 4
CITY OF AUGUSTA, MAINE
General Fund Revenues by Source Last Ten Fiscal Years
Licenses Charges Fines
Fiscal and Inter- for and Investment
year Taxes permits governmental services fees earnings Unclassified Total
2010 $ 26,549,455 110,211 16,854,140 3,080,733 50,647 408,934 706,056 47,760,176
2011 27,423,576 205,010 15,360,985 3,420,571 52,650 295,917 576,129 47,334,838
2012 29,042,178 372,244 15,882,572 3,453,378 46,433 231,746 644,964 49,673,515
2013 28,531,192 193,724 15,057,731 3,399,461 52,495 22,635 683,840 47,941,078
2014 29,796,006 190,959 15,942,676 2,589,834 48,454 136,379 727,204 49,431,512
2015 30,944,004 198,356 15,653,123 2,792,473 50,155 155,269 666,269 50,459,649
2016 32,255,122 294,213 15,036,116 2,734,692 46,925 280,559 601,038 51,248,665
2017 32,475,745 208,511 15,398,158 2,474,063 59,224 32,881 740,118 51,388,700
2018 33,508,590 199,695 16,628,662 2,964,038 51,997 131,156 609,262 54,093,400
2019 35,208,441 221,108 18,463,578 2,588,579 60,159 880,577 676,831 58,099,273
98
Table 5
CITY OF AUGUSTA, MAINE
Property Tax Levies and CollectionsLast Ten Fiscal Years
Total Current Prior year Total % of total tax
Fiscal tax tax % of levy tax tax collection
year levy collections collected collections collections to levy
2010 $ 26,196,756 25,037,880 95.58% 1,124,893 26,162,773 99.87%
2011 27,016,108 25,845,259 95.67% 1,164,592 27,009,851 99.98%
2012 27,566,724 26,662,434 96.72% 895,628 27,558,062 99.97%
2013 28,120,753 27,183,423 96.67% 923,969 28,107,392 99.95%
2014 29,526,059 28,560,954 96.73% 943,201 29,504,155 99.93%
2015 31,299,897 30,280,492 96.74% 991,338 31,271,830 99.91%
2016 32,959,415 32,145,826 97.53% 777,641 32,923,467 99.89%
2017 33,509,678 32,603,955 97.30% 863,823 33,467,778 99.87%
2018 34,768,743 34,026,827 97.87% 492,420 34,519,247 99.28%
2019 37,095,150 36,336,486 97.95% - 36,336,486 97.95%
99
Table 6
CITY OF AUGUSTA, MAINE
Assessed and State Value of Taxable PropertyLast Ten Fiscal Years
Ratio
Assessed Value Total assessed
Fiscal Real Personal Assessed State to
year property property value value State
2010 $ 1,469,535,400 100,358,600 1,569,894,000 1,552,500,000 101.12%
2011 1,490,271,100 95,551,900 1,585,823,000 1,526,350,000 103.90%
2012 1,496,559,400 97,546,000 1,594,105,400 1,518,850,000 104.95%
2013 1,509,575,600 94,770,100 1,604,345,700 1,490,000,000 107.67%
2014 1,529,301,900 97,040,800 1,626,342,700 1,490,850,000 109.09%
2015 1,576,565,600 101,176,400 1,677,742,000 1,503,750,000 111.57%
2016 1,609,474,900 94,021,700 1,703,496,600 1,540,250,000 110.60%
2017 1,587,323,300 106,921,500 1,694,244,800 1,524,500,000 111.13%
2018 1,589,040,000 117,282,200 1,706,322,200 1,540,450,000 110.77%
2019 1,607,628,000 161,645,400 1,769,273,400 1,551,300,000 114.05%
100
Table 7
CITY OF AUGUSTA, MAINE
Ratio of Net General Bonded Debt
to Assessed Value and Net Bonded
Debt Per CapitaLast Ten Fiscal Years
Ratio Net debt
Fiscal Assessed Gross Enterprise Net bonded net debt per
year Population value debt debt debt to value capita
2010 18,560 1,569,894,000 46,290,730 7,339,480 38,951,250 2.48% 2,099
2011 19,136 1,585,823,000 44,407,724 6,628,165 37,779,559 2.38% 1,974
2012 19,136 1,594,105,400 41,142,883 5,916,850 35,226,033 2.21% 1,841
2013 19,136 1,604,345,700 39,705,964 5,205,535 34,500,429 2.15% 1,803
2014 19,136 1,626,342,700 35,549,045 4,494,220 31,054,825 1.91% 1,623
2015 19,136 1,677,742,000 44,107,126 4,632,905 39,474,221 2.35% 2,063
2016 19,136 1,703,496,600 46,930,207 3,815,340 43,114,867 2.53% 2,253
2017 19,136 1,694,244,800 49,923,021 3,162,775 46,760,246 2.76% 2,444
2018 19,136 1,706,322,200 49,148,669 2,310,210 46,838,459 2.74% 2,448
2019 19,136 1,769,273,400 46,365,312 1,457,640 44,907,672 2.54% 2,347
Sources for population information: U.S. Census Bureau
101
Table 8
CITY OF AUGUSTA, MAINE
Principal TaxpayersJune 30, 2019
Assessed % of total
Taxpayer Business value value
Central Maine Power Public Utility $ 160,034,100 9.05%
W/S Development Retail 84,677,700 4.79%
Wal-Mart Stores, Inc. Retail 33,047,500 1.87%
Central Maine Commerce Center Office Building 32,629,900 1.84%
PDNED Augusta Crossing Inc Developer 29,233,400 1.65%
Maine Natural Gas Gas Pipelines 24,619,500 1.39%
Summit Natural Gas Gas Pipelines 21,879,000 1.24%
Taurus Business Center Lmtd Retail 19,521,500 1.10%
J & R Associates LLC Developer 17,686,400 1.00%
Performance Food Group Distributor 16,486,500 0.93%
102
SINGLE AUDIT SECTION
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105
Certified Public Accountants and Business Consultants
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTINGAND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
City Council and Board of EducationCity of Augusta, Maine
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Augusta, Maine, as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the City of Augusta, Maine’s basic financial statements, and have issued our report thereon datedDecember 12, 2019.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City of Augusta, Maine’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City of Augusta, Maine’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City of Augusta, Maine’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses orsignificant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
106
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTINGAND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS, CONTINUED
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Augusta, Maine’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
We noted other certain matters that we reported to management of the City of Augusta, Maine in a separate letter dated December 12, 2019.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
December 12, 2019South Portland, Maine
107
Certified Public Accountants and Business Consultants
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE
City Council and Board of EducationCity of Augusta, Maine
Report on Compliance for Each Major Federal Program
We have audited the City of Augusta, Maine’s compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the City of Augusta, Maine’s major federal programs for the year ended June 30, 2019. The City of Augusta, Maine’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.
Management’s Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of the City of Augusta, Maine’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City of Augusta, Maine’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the City of Augusta, Maine’s compliance.
108
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE, CONTINUED
Opinion on Each Major Federal Program
In our opinion, the City of Augusta, Maine, complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2019.
Report on Internal Control over Compliance
Management of the City of Augusta, Maine is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City of Augusta, Maine's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City of Augusta, Maine’s internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the firstparagraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
109
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE, CONTINUED
Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Augusta, Maine as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the City of Augusta, Maine’s basic financial statements. We issued our report thereon dated December 12, 2019, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.
December 12, 2019South Portland, Maine
CITY OF AUGUSTA, MAINE
Schedule of Expenditures of Federal AwardsFor the year ended June 30, 2019
Federal Pass- CFDA/ Passed
Federal Grantor/Pass-through CFDA through Federal Cluster Through to
Grantor/Program Title Number Number Expenditures Totals Subrecipients
U.S. Department of Education,
Passed through Maine Department of Education:
0295 Adult Basic Education 84.002 6296 $ 138,350 69,335
0230 Title IA 84.010 3107 970,341 -
0230 Title IA Program Improvement 84.010 N/A 34 970,375 -
Special Education Cluster:
0247 Special Education State Grants Individuals with Disabilities Act 84.027 3046 633,650 -
0251 Preschool 84.173 6247 12,341 -
Total Special Education Cluster 645,991
0286 Carl Perkins - Basic Grant (Learning Center) 84.048 3030 114,395 -
0289 Carl Perkins - Title IC Perkins 84.048 3040 12,081 126,476 -
0261 McKinney Homeless 84.196 3104 6,964 -
0267 Rural Low Income 84.358 3305 33,421 -
0268 Title III - ESL 84.365 3115 13,734 -
0270 Teacher Quality Grant 84.367 3042 111,512 -
0240 Student Support and Academic Enrichment Program 84.424 3345 28,576 -
Total U.S. Department of Education 2,075,399 69,335
U.S. Department of Agriculture, passed through the Maine Dept. of Education:
Child Nutrition Cluster:
National School Lunch Program 10.555 3022/3024 553,550 -
School Breakfast Program 10.553 3014 221,716 -
Summer Food Service Program 10.559 3016/3018 54,502 -
Food Donation Program 10.555 N/A 79,828 -
Total Child Nutrition Cluster 909,596
Fresh Fruit and Vegetable Program 10.582 3028 45,167 -
Total U.S. Department of Agriculture 954,763 -
U.S. Department of Justice
Direct Program:
2076 Edward Byrne Memorial (JAG) 16.738 N/A 38,751 -
Passed through the Maine Department of Justice:
2047 Bulletproof Vest 16.607 N/A 3,953 -
2289 COPS Hiring Program 16.710 N/A 43,674 -
2292 US Marshall Service investigative Operations 16.XXX FWB300F 339 -
Total U.S. Department of Justice 86,717 -
0600
110
CITY OF AUGUSTA, MAINESchedule of Expenditures of Federal Awards, Continued
For the year ended June 30, 2019
Federal Pass- CFDA/ PassedFederal Grantor/Pass-through CFDA through Federal Cluster Through toGrantor/Program Title Number Number Expenditures Totals Subrecipients
U.S. Department of Transportation:Highway Safety Cluster:
Passed through the Maine Bureau of Highway Safety:2049 OUI Grant 20.600 ID19-047 $ 14,291 - 2125 Speed Enforcement 20.600 PT19-027 6,615 - 2048 Seatbelt Grant 20.600 OPB19-018 20,422 - 2291 HV Distracted Driving 20.600 DD19-018 1,735 43,063 -
Passed through the Maine Department of Public Safety:2553 Teen Driver Safety Grant 20.616 N/A 26,870 -
Total Highway Safety Cluster 69,933 Passed through the Maine Department of Transportation:
2256 Highway Planning and Construction (Kennebec Rail Trail) 20.205 N/A 11,717 - 2258 Highway Planning and Construction (Safe Routes) 20.205 N/A 7,581 19,298 -
Total U.S. Department of Transportation 89,231 -
U.S. Department of Housing and Urban Development, passed through theMaine Department of Economic and Community Development:
2283 CDBG Workforce Development 14.228 2017117000000001726-2 39,063 39,063 - Total U.S. Department of Housing and Urban Development 39,063 -
U.S. Department of Health and Human Services, passed through Kennebec County:
2189 Southern Kennebec Underage Drinking Task Force 93.243 N/A 9,986 - Catholic Charities of Maine:
0205 Refugee and Entrant Assistance - Social Services 93.566 N/A 397 - 0272 Refugee and Entrant Assistance - School Impact 93.566 N/A 16,162 16,559 -
Total U.S. Department of Health and Human Services 26,545 -
U.S. Department of Homeland Security:Passed through Maine Emergency Management Agency:
1000 FEMA Disaster Relief 97.036 N/A 32,169 - 2269 Homeland Security Grant 97.067 N/A 171,330 - 2152 TSA - Officer Reimbursement 97.090 N/A 16,359 -
Total U.S. Department of Homeland Security 219,858 -
Totals $ 3,491,576 69,335
See accompanying notes to schedule of expenditures of federal awards.
111
112
CITY OF AUGUSTA, MAINENotes to Schedule of Expenditures of Federal Awards
June 30, 2019
PURPOSE OF THE SCHEDULE
Office of Management and Budget (OMB)’s Uniform Guidance requires a schedule of expenditures of federal awards showing total expenditures for each federal award program as identified in the Catalog of Federal Domestic Assistance (CFDA).
SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity - The accompanying schedule includes all federal award programs of the City of Augusta,Maine for the fiscal year ended June 30, 2019. The reporting entity is defined in the notes to basic financialstatements of the City of Augusta, Maine.
B. Basis of Presentation - The information in the accompanying schedule of expenditures of federal awards ispresented in accordance with the Uniform Guidance.
1. Pursuant to the Uniform Guidance, federal awards are defined as assistance provided by a federalagency, either directly or indirectly, in the form of grants, contracts, cooperative agreements, loans,loan guarantees, property, interest subsidies, insurance or direct appropriations.
2. Major Programs - The Uniform Guidance establishes the level of expenditures or expenses to be used indefining major federal award programs. Major programs for the City of Augusta, Maine are identified inthe summary of auditor’s results in the schedule of findings and questioned costs.
C. Basis of Accounting - The information presented in the schedule of expenditures of federal awards ispresented on the modified accrual basis of accounting, which is consistent with the reporting in the City ofAugusta, Maine’s fund financial statements.
D. The City of Augusta, Maine has elected not to use the 10-percent de minimis indirect cost rate allowedunder the Uniform Guidance.
113
CITY OF AUGUSTA, MAINESchedule of Findings and Questioned Costs
June 30, 2019
Section I-Summary of Auditor's Results
Basic financial statements
Type of auditor’s report issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified
Internal control over financial reporting:Material weaknesses identified? NoSignificant deficiencies identified? None reported
Noncompliance material to financial statements noted? No
Federal Awards
Internal control over major federal programs:Material weaknesses identified? NoSignificant deficiencies identified? None reported
Type of auditor’s report issued on compliancefor major federal programs: Unmodified
Any audit findings disclosed that are required to be reported in accordance withthe Uniform Guidance? No
Identification of major federal programs:
CFDA Number(s) Name of Federal Program or Cluster
10.553-10.559 Child Nutrition Cluster
Dollar threshold used to distinguish between Type A and Type B programs: $750,000
Auditee qualified as low-risk auditee? Yes
114
CITY OF AUGUSTA, MAINESchedule of Findings and Questioned Costs, Continued
Section II - Findings Required to be Reported Under Government Auditing Standards
None
115
CITY OF AUGUSTA, MAINESchedule of Findings and Questioned Costs, Continued
Section III - Findings and Questioned Costs for Federal Awards
None
116
CITY OF AUGUSTA, MAINESchedule of Findings and Questioned Costs, Continued
Section IV - Status of Prior Year Findings and Questioned Costs
None
APPENDIX B
PROPOSED FORM OF LEGAL OPINION
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APPENDIX B
Upon issuance and delivery of the Bonds, Preti, Flaherty, Beliveau & Pachios, LLP, Augusta, Maine, Bond Counsel to the City of Augusta, Maine, will deliver an opinion with respect to the Bonds in substantially the following form:
[Closing Date]
City of Augusta 16 Cony Street Augusta, Maine 04330 Dear Ladies and Gentlemen:
We have acted as bond counsel to the City of Augusta, Maine, a municipality of the State of Maine (the "Governmental Unit"), in connection with the issuance by the Governmental Unit of its $___________ 2020 General Obligation Bonds (the “Bonds”). In such capacity, we have examined a record of proceedings submitted to us by the Governmental Unit relating to the issuance of the Bonds pursuant to 30-A MRSA §5772, as amended, the city charter of the Governmental Unit and certain orders adopted by the city councilof the Governmental Unit and, if required, approved by the voters of the Governmental Unit.
We have also examined such statutes, regulations and law as we have deemed necessary under the circumstances. We are not passing upon and do not assume any responsibility for the accuracy or adequacy of the statements made in any offering material or similar information provided by the Governmental Unit with respect to the Bonds and we express no opinion, advice or representation to any person with respect to any such offering material or similar information.
We have not been engaged or undertaken to review the accuracy, completeness or sufficiency of any offering material relating to the Bonds and we express no opinion relating thereto.
As to questions of fact material to our opinion, we have relied upon the certified proceedings and other certificates of public officials without undertaking to verify such facts by independent investigation. We have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to the originals of all documents submitted to us as copies.
The Bonds are dated, mature on the dates and in the principal amounts, bear interest and are payable, all as provided in the Bonds. The Bonds are subject to redemption prior to maturity at the option of the Governmental Unit as provided in the Bonds.
The United States Internal Revenue Code of 1986, as amended, and implementing regulations, as amended (the "Code"), establish certain requirements that must be met subsequent to the issuance and delivery of the Bonds in order that interest on the Bonds be and remain excluded from gross income for federal income tax purposes pursuant to section 103 of the Code. Noncompliance with such requirements may cause interest on the Bonds to be included in the gross income of the owners thereof retroactive to the date of issuance of the Bonds, regardless of the date on which such noncompliance occurs.
The Non-Arbitrage and Use of Proceeds Certificate executed and delivered concurrently herewith on behalf of the Governmental Unit with respect to the Bonds (the "Non-Arbitrage Certificate") contains provisions and procedures regarding compliance with the requirements of the Code. The Governmental Unit, in executing the Non-Arbitrage Certificate, has covenanted to comply with the provisions and
procedures set forth therein and to do and perform all acts and things necessary or desirable in order to assure that interest paid on the Bonds shall, for purposes of federal income taxation, be excluded from gross income of the owners of the Bonds.
In rendering the opinions in paragraphs 2 and 3 hereof, we have relied upon the representations of the Governmental Unit set forth in its Non-Arbitrage Certificate with respect to such requirements under the Code and we have assumed that the Governmental Unit will be able to, and will, comply with the covenants and procedures set forth in the Non-Arbitrage Certificate.
Based upon the foregoing, we are of the opinion as of the date hereof and under the law in effect as of the date hereof that:
1. The Bonds are valid general obligations of the Governmental Unit and, unless paid fromother sources, are payable as to both principal and interest from ad valorem taxes, whichare limited as to rate and amount unless certain requirements set forth in 30-A MRSA§5721-A are satisfied, upon all the property within the territorial limits of theGovernmental Unit taxable by the Governmental Unit, except to any extent that theGovernmental Unit may enter into an agreement under 30-A MRSA §5751 and following,as amended, to share any portion of its assessed valuation with another municipality andexcept also to the extent that the Governmental Unit may establish municipal developmentdistricts or affordable housing districts pursuant to Title 30-A, Chapters 206 and former207 (now repealed) of the Maine Revised Statues, as amended, the tax increment revenueson retained captured assessed values of which may not be available for payment of debtservice on the Bonds.
2. Based on existing statutes and court decisions, interest on the Bonds will be excluded fromthe gross income of the owners thereof for federal income tax purposes pursuant to section103 of the Code. In addition, such interest will not be an item of tax preference pursuantto section 57 of the Code for purposes of computing alternative minimum tax.
3. Pursuant to 30-A MRSA §5772(9), interest on the Bonds is exempt from taxation withinthe State of Maine.
Except as set forth in paragraphs 2 and 3 above, we express no opinion as to any tax consequences of holding the Bonds.
Our opinion is qualified to the extent that the validity and binding nature of any of the terms of the Bonds may be limited or otherwise affected by limitations on the availability of equitable remedies, including specific performance, and by bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws, now or hereafter in effect, generally affecting creditors' rights and may also be subject to general principles of equity and the exercise of judicial discretion in appropriate cases.
We are members of the bar of the State of Maine and do not purport to be experts in, or to render any opinion concerning, the currently applicable laws of any jurisdiction other than the State of Maine and, to the limited extent provided herein, the currently applicable laws of the United States. This letter is solely for the benefit of the Governmental Unit and no one other than the Governmental Unit is entitled to rely upon this letter without our express written consent. We assume no obligation to update, revise or supplement this letter to reflect any facts, circumstances or changes in law which may hereafter come to our attention. This opinion letter may not be quoted in whole or in part or otherwise referred to without our prior written consent. This is only an opinion letter and not a warranty or guaranty of the matters discussed herein.
APPENDIX C
PROPOSED FORM OF CONTINUING DISCLOSURE AGREEMENT
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1
CITY OF AUGUSTA, MAINE
CONTINUING DISCLOSURE AGREEMENT
In connection with the issuance by the City of Augusta, Maine (the "Issuer") of its $________ 2020
General Obligation Bonds (the "Bonds") and with reference to the continuing disclosure requirements of
Rule 15c2-12 under the Securities and Exchange Act of 1934, as amended, and officially interpreted
from time to time (the "Rule"), the Issuer hereby covenants that it will take the actions described in
sections 1, 2 and 3 herein for the benefit of the beneficial owners of the Bonds, subject to the conditions
and limitations specified herein. The Issuer reserves the right to incorporate by reference in any future
disclosure provided hereunder its Official Statement dated July ___, 2020 relating to the Bonds (the
"Official Statement") which is expected to be submitted, at the time of delivery of the Bonds, to the
Municipal Securities Rulemaking Board established under the Securities and Exchange Act of 1934, as
amended, or any successor thereto ("MSRB").
1. The Issuer will provide to the MSRB: (a) not later than 270 days after the end of each fiscal year,
commencing with the fiscal year ending June 30, 2021, financial information and operating data relating to
the Issuer for the preceding fiscal year of the type presented in the Official Statement regarding (i)
revenues and expenditures of the Issuer relating to its operating budget, (ii) capital expenditures, (iii) fund
balances, (iv) property tax or rate information, (v) outstanding indebtedness and overlapping debt of the
Issuer, (vi) pension and other post-employment benefit obligations of the Issuer, and (vii) such other financial
information and operating data as may be required to comply with the Rule; and (b) promptly upon
their public release, the audited financial statements of the Issuer, prepared in accordance with
generally accepted accounting principles.
The Issuer reserves the right to modify from time to time the specific types of information provided
under clause (a) above or the format of the presentation of such information to reflect changed
circumstances, provided that any such modification will be done in a manner consistent with the Rule.
2. The Issuer will provide to the MSRB in a timely manner not in excess of nine (9) business days after
the occurrence of an event listed in this section 2 notice of the occurrence of any of the following
events with respect to the Bonds:
a. Principal and interest payment delinquencies;
b. Non-payment related defaults, if material;
c. Unscheduled draws on debt service reserves reflecting financial difficulties;
d. Unscheduled draws on credit enhancements reflecting financial difficulties;
e. Substitution of credit or liquidity providers, or their failure to perform;
f. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final
determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other
material notices or determinations with respect to the tax status of the Bonds, or other
material events affecting the tax status of the Bonds;
g. Modifications to rights of holders of the Bonds, if material;
h. Bond calls, if material, and tender offers;
i. Defeasances;
j. Release, substitution, or sale of property securing repayment of the Bonds, if material;
k. Rating changes;
2
l. Bankruptcy, insolvency, receivership or similar event of the Issuer; 1
m. The consummation of a merger, consolidation, or acquisition involving the Issuer or the sale
of all or substantially all of the assets of the Issuer, other than in the ordinary course of
business, the entry into a definitive agreement to undertake such an action or the termination
of a definitive agreement relating to any such actions, other than pursuant to its terms, if
material;
n. Appointment of a successor or additional trustee or the change of name of a trustee, if material;
o. Incurrence of a financial obligation2 of the Issuer, if material, or agreement to covenants,
events of default, remedies, priority rights, or other similar terms of a financial obligation of
the Issuer, any of which affect the holders of the Bonds, if material; and
p. Default, event of acceleration, termination event, modification of terms, or other similar events
under the terms of a financial obligation of the Issuer, any of which reflect financial
difficulties.
The Issuer from time to time may choose to provide notice of the occurrence of other events, in addition to
those listed above, if, in the judgment of the Issuer, such other event is material with respect to the Bonds, but
the Issuer does not undertake or commit to provide any such notice of the occurrence of any material event
except those listed above.
3. The Issuer will provide, in a timely manner, to the MSRB notice of a failure to satisfy the requirements
of section 1 herein.
4. The intent of the Issuer's undertaking in this Continuing Disclosure Agreement is to provide on a
continuing basis the information described in the Rule. The provisions of this Continuing Disclosure
Agreement may be amended by the Issuer without the consent of, or notice to, any beneficial owners of
the Bonds, (a) to comply with or conform to the provisions of the Rule or any amendments thereto or
authoritative interpretations thereof by the Securities and Exchange Commission (the "SEC") or its
staff (whether required or optional), (b) to add a dissemination agent for the information required to be
provided by such undertakings and to make any necessary or desirable provisions with respect thereto, (c)
to add to the covenants of the Issuer for the benefit of the beneficial owners of the Bonds, (d) to modify
the contents, presentation and format of the financial information from time to time as a result of a change
in circumstances that arises from a change in legal requirements, or (e) to otherwise modify the
undertakings in a manner consistent with the requirements of the Rule concerning continuing
disclosure; provided, however, that in the case of any amendment pursuant to clause (d) or (e), (i) the
1 This event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar
officer for the Issuer in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in
which a court or government authority has assumed jurisdiction over substantially all of the assets or business of the Issuer, or
if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject
to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization,
arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the
assets or business of the Issuer.
2 “Financial obligation” means a:
(i) debt obligation;
(ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an
existing or planned debt obligation; or
(iii) guarantee of clause (i) or clause (ii) above.
3
undertaking, as amended, would have complied with the requirements of the Rule at the time of the
offering of the Bonds, after taking into account any amendments or authoritative interpretations of
the Rule, as well as any change in circumstances, and (ii) the amendment does not materially impair the
interests of the beneficial owners of the Bonds, as determined either by a party unaffiliated with the Issuer
(such as bond counsel to the Issuer), or by the vote or consent of beneficial owners of a majority in outstanding
principal amount of the Bonds affected thereby at or prior to the time of such amendment. Furthermore, to
the extent that the Rule, as in effect from time to time, no longer requires the issuers of municipal
securities to provide all or any portion of the information the Issuer has agreed to provide pursuant to this
Continuing Disclosure Agreement, the obligation of the Issuer to provide such information also shall cease
immediately.
5. The purpose of this Continuing Disclosure Agreement is to assist an underwriter of the Bonds in complying
with the requirements of the Rule and, except for creating the right on the part of the beneficial owners
of the Bonds, from time to time, to specifically enforce the Issuer's obligations hereunder, this
Continuing Disclosure Agreement does not create new contractual or other rights for any beneficial
owner of the Bonds, any municipal securities broker or dealer, any potential purchaser of the Bonds, the
SEC or any other person. The sole remedy in the event of any actual or alleged failure by the Issuer to
comply with any provision herein shall be an action for the specific performance of the Issuer's
obligations hereunder and not for money damages in any amount. Any failure by the Issuer to comply
with any provision of this undertaking shall not constitute an event of default with respect to the Bonds.
6. Unless otherwise required by law, all notices, documents and information provided to the MSRB shall
be provided in electronic format, with identifying information, as prescribed by the MSRB, to the MSRB’s
Internet-based electronic submitter interface (EMMA Dataport) located at www.emma.msrb.org.
7. In the past five (5) years, the Issuer has never failed to comply in any material respect with any previous
undertakings in regard to continuing or material events disclosure, except to the extent described in the
Official Statement.
8. The Issuer's Assistant City Manager/Director of Finance and Administration, or such official's
designee, shall be the contact person on behalf of the Issuer from whom the foregoing information,
data and notices may be obtained. The name, address and telephone number of the initial contact person
is: Raphael St. Pierre, Assistant City Manager/Director of Finance and Administration, City of Augusta,
16 Cony Street, Augusta, ME 04330; Telephone: (207) 626-2300.
9. This Continuing Disclosure Agreement shall be governed by and construed in accordance with the laws of
the State of Maine and applicable law of the United States of America.
IN TESTIMONY WHEREOF, this Continuing Disclosure Agreement has been signed as of July __,
2020.
CITY OF AUGUSTA, MAINE
By:
Raphael St. Pierre
Assistant City Manager/Director of Finance
and Administration
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