PDF Maryland - Baltimore City Department of Finance

[Pages:122]City of Baltimore

Maryland

Comprehensive Annual Financial Report Year Ended June 30, 2004

City of Baltimore, Maryland

Comprehensive Annual Financial Report Year Ended June 30, 2004

Prepared by the Department of Finance Peggy J. Watson

Director of Finance Bureau of Accounting and Payroll Services

Michael E. Broache Bureau Chief

454 City Hall, 100 N. Holliday Street, Baltimore, Maryland 21202

ELECTED OFFICIALS

MAYOR Martin O'Malley

PRESIDENT OF THE CITY COUNCIL Sheila Dixon

COMPTROLLER Joan M. Pratt

BOARD OF ESTIMATES

PRESIDENT Sheila Dixon

MAYOR Martin O'Malley

COMPTROLLER Joan M. Pratt

DIRECTOR OF PUBLIC WORKS George L. Winfield

CITY SOLICITOR Ralph S. Tyler

CITY COUNCIL

Sheila Dixon, President Stephanie C. Rawlings, Vice-President

FIRST DISTRICT John L. Cain

Nicholas C. D'Adamo, Jr. Lois Garey

FOURTH DISTRICT Keiffer J. Mitchell, Jr.

Catherine E. Pugh Agnes Welch

SECOND DISTRICT Paula Johnson Branch

Pamela V. Carter Bernard C. Young

FIFTH DISTRICT Stephanie Rawlings Blake

Helen Holton Rochelle "Rikki" Spector

THIRD DISTRICT Robert W. Curran Kenneth N. Harris, Sr.

Lisa Joi Stancil

SIXTH DISTRICT Dr. Kwama Osayaba Abayomi

Edward L. Reisinger Melvin L. Stukes

II

City of Baltimore Comprehensive Annual Financial Report

Year Ended June 30, 2004

TABLE OF CONTENTS

Page

INTRODUCTORY SECTION

Title Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I Elected Officials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III Letter of Transmittal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII Municipal Organization Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XIX Certificate of Achievement for Excellence in Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XX

FINANCIAL SECTION

Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Management's Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Basic Financial Statements:

Government-wide Financial Statements: Statement of Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Statement of Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Fund Financial Statements: Balance Sheet -- Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Statement of Revenues, Expenditures, and Changes in Fund Balances -- Governmental Funds . . . . . . . . . . . . . . . . 20 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Statement of Fund Net Assets -- Proprietary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Statement of Revenues, Expenses, and Changes in Fund Net Assets -- Proprietary Funds . . . . . . . . . . . . . . . . . . . . 23 Statement of Cash Flows -- Proprietary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Statement of Fiduciary Net Assets -- Fiduciary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Statement of Changes in Fiduciary Net Assets -- Pension Trust Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Notes to the Basic Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Required Supplementary Information:

Schedule of Revenues, Expenditures and Encumbrances and Changes in Fund Balance -- Budget and Actual -- Budgetary Basis -- General Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Schedule of Revenues, Expenditures and Encumbrances and Changes in Fund Balance -- Budget and Actual -- Budgetary Basis -- Motor Vehicle Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Schedule of Funding Progress -- Pension Trust Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Notes to the Required Supplementary Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Combining and Individual Fund Statements and Schedules: Combining Balance Sheet -- Nonmajor Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 Combining Statement of Revenues, Expenditures and Changes in Fund Balances -- Nonmajor Governmental

Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

III

Page Schedule of Revenues, Expenditures and Encumbrances and Changes in Fund Balance -- Budget and Actual --

Special Racetrack Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 Combining Statement of Fund Net Assets -- Nonmajor Proprietary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets -- Nonmajor Proprietary

Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 Combining Statement of Cash Flows -- Nonmajor Proprietary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Combining Statement of Fund Net Assets -- Internal Service Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets -- Internal Service Funds . . . . . . 80 Combining Statement of Cash Flows -- Internal Service Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Combining Statement of Fiduciary Net Assets -- Pension Trust Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 Combining Statement of Changes in Fiduciary Net Assets -- Pension Trust Funds . . . . . . . . . . . . . . . . . . . . . . . . . 84 Combining Statement of Fiduciary Net Assets -- Agency Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 Combining Statement of Changes in Assets and Liabilities -- Agency Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

STATISTICAL SECTION

Government-wide information: Government-wide Expenses by Function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 Government-wide Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

Fund Information: General Governmental Revenues by Sources (GAAP Basis) -- Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . 91 General Governmental Expenditures by Function (GAAP Basis) -- Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . 91 Property Tax Levies and Collections -- Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 Assessed and Estimated Actual Value of Taxable Property -- Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . 92 Property Tax Rates -- Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures -- Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 Ratio of Net General Bonded Debt to Assessed Value and Net General Bonded Debt per Capita -- Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 Revenue Bond Coverage -- Water Utility, Waste Water Utility, Parking Facilities and Convention Center Bonds -- Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 Computation of Overlapping Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 Real Property Value, Construction Permits and Bank Deposits -- Last Ten Fiscal Years . . . . . . . . . . . . . . . . . . . 96 Principal Taxpayers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 Demographic and Miscellaneous Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

IV

Introductory Section

? Letter of Transmittal ? Certificate of Achievement -- Government

Finance Officers Association ? Organization Chart

(THIS PAGE INTENTIONALLY LEFT BLANK)

CITY OF BALTIMORE

MARTIN O'MALLEY, Mayor

Honorable President and Members of The Board of Estimates City of Baltimore, Maryland

DEPARTMENT OF FINANCE

PEGGY J. WATSON, Director 469 City Hall Baltimore, Maryland 21202

December 3, 2004

In compliance with Article VII, Section 8, of the revised City Charter (November, 1964), submitted herewith is the Comprehensive Annual Financial Report (CAFR) of the City of Baltimore, Maryland, (the City) for the year ended June 30, 2004. The CAFR was prepared by the City's Department of Finance. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the City. We believe that the data, as presented, is accurate in all material aspects; that it is presented in a manner designed to fairly set forth the financial position and changes in financial position of the City; and, that all disclosures necessary to enable the reader to gain the maximum understanding of the City's financial affairs have been provided.

The CAFR is presented in three sections: introductory, financial, and statistical. The introductory section includes this transmittal letter, the City's organizational chart, a list of principal officials and the certificate of achievement for excellence in financial reporting. The financial section includes the auditor's opinion, management's discussion and analysis and basic financial statements with related notes, and required supplementary information. The financial section also includes the combining and individual fund financial statements and schedules. The statistical section includes selected financial and demographic information, generally presented on a multiyear basis.

Management has provided a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to compliment MD&A and should be read in conjunction with it. The City's MD&A can be found immediately following the report of the independent auditors in the Financial Section of the CAFR.

The City Charter established a Department of Audits under the general supervision of the City Comptroller. The Charter requires the City Auditor to "annually make a general comprehensive public report of the financial position of the City; in the discretion of the Comptroller, such report may be in the form of an opinion on the annual financial statements prepared by the Director of Finance." The Comptroller has elected to have the City Auditor render an opinion as to the fairness of the Director of Finance's presentation of the City's basic financial statements. Additionally, the Board of Estimates awarded a contract to the nationally recognized independent certified public accounting firm, Ernst & Young LLP, to perform a joint audit with the City Auditor of the basic financial statements of the City for the year ended June 30, 2004. Their joint audit report is contained herein. Their audit was conducted in accordance with auditing standards generally accepted in the United States of America and, for the basic financial statements of the City, the standards for financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. On the basis of this examination, the independent auditors have issued an unqualified opinion that the presentation of the basic financial statements conforms with accounting principles generally accepted in the United States. In conducting the audit, the auditors performed tests of the accounting records and such other procedures as were considered necessary in the circumstances to provide a reasonable basis for this opinion on the financial statements. The auditors also assessed the accounting principles used and significant estimates made by management, as well as evaluated the overall financial statement presentation.

The independent audit of the City's financial statements is part of a broader, federally mandated "Single Audit" designed to meet the special needs of federal grantor agencies. This audit was conducted by the City Auditor, and the Single Audit Report is available as a separate document.

This report includes all of the funds that we consider to be part of, controlled by or dependent on the City. Professional judgment must be used to determine whether or not a potential component unit should be included in the reporting entity. Various potential component units were evaluated to determine whether they should be reported in the City's CAFR. Two

VII

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