Complete the Preliminary Analysis of the financial statements for the City of Providence including the balance amounts.

CITY OF PROVIDENCE, RHODE ISLAND COMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Year Ended June 30, 2011 City of Providence Finance Department xi Certificate of Achievement for Excellence in Financial Reporting Presented to Text38: City of Providence Rhode Island For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2010 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to government units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest standards in government accounting and financial reporting. President Executive Director xiii CITY OF PROVIDENCE, RHODE ISLAND Combining Statement of Revenues, Expenditures, and Changes in Fund Balanc Nonmajor Governmental Funds June 30, 2011 (in thousands) Neighborhood Housing Revenues Departmental Intergovernmental Investment and rental income Other Total Revenues Expenditures Current: Executive, legislative, and judicial Finance Public safety Recreation Public lands and parks Community development Debt service Principal Interest and other costs Capital outlay Total expenditures Excess (deficiency) of revenue over expenditures $ 81 758 13 278 1,130 Federal Funds $ PEDC 7 12,647 40 12,694 PRA $ $ 1,043 303 325 1,671 7,047 1,254 254 290 8,845 $ $ 154 496 3,809 438 522 5,265 58 3,934 345 545 92 154 Skating Rink $ 324 12,609 324 12,609 806 85 WDO 419 $ 3,212 $ 419 6,962 215 215 3,222 23 373 7,299 411 496 2,539 53 1 5,363 475 4,295 12,672 58 5,074 411 (3,827) 96 191 8 (43) 7,299 (337) 23 869 192 2,353 257 (655) 17,350 16,695 806 85 (43) 10 6,962 1,660 1,714 Other Nonmajor Governmental Funds Capital Proceeds Fund 158 Other Financing Sources (Uses) Transfers in Transfers out Bond proceeds Total other financing sources (uses Net change in fund balance (deficit Other Special Revenue Fund Other P&D 257 (2,000) 110 (767) (2,000) (657) Totals $ 8,060 26,627 4,220 1,670 40,577 554 11,233 756 1,041 17,282 5,416 476 4,295 41,053 (476) 367 (3,422) 17,350 14,295 12,868 96 448 8 (337) (1,808) 1,696 13,819 Fund Balance (deficit), beginning of year, as restated 7,326 (1,286) 12,224 (1,439) 45 2,194 (47) 35 13,021 13,082 45,155 Fund Balance (deficit), end of year 8,132 (1,201) 12,181 11,429 141 2,642 (39) (302) 11,213 14,778 58,974 66 CITY OF PROVIDENCE, RHODE ISLAND COMPREHENSIVE ANNUAL FINANCIAL REPORT Fiscal Year Ended June 30, 2013 City of Providence Finance Department 25 Dorrance Street, Providence, RI 02903 CITY OF PROVIDENCE RHODE ISLAND YEAR ENDED JUNE 30, 2013 TABLE OF CONTENTS Page(s) INTRODUCTORY SECTION: Letter of Transmittal ...................................................................... ... .............. .. ... ......... .... .... . Organization Chart ................................................................................................................ List of City Officials ............................................................................................................... GFOA Certificate of Achievement ................ ............. ...... ............................................... .. ... . i-vii viii ix X FINANCIAL SECTION: Report of Independent Auditors ..... ...... .......... .. ...... ... .. ... .. .... ... .. .... ......... ... ...................... ..... . 1-2 Basic Financial Statements and Required Supplementary Information: Management's Discussion and Analysis ............................................................................. . 3- 11 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position .... ...... .... ................ ... .. .... ........... .. ... ........... .... .... ........ .. .. ... ... ... ... ... Statement of Activities ....... .. .. .. ........... ......... .. ........... ... ....... .... ......... ...... .............. ..... ... ........ . A-1 A-2 12 13 B-1 B-2 14 15 B-3 16 Proprietary Funds: Statement of Net Position ................ .... ......... ..... ... ..... .................. ......... .......... .. ................... . Statement of Revenues, Expenses and Changes in Net Position .................... .................. .. Statement of Cash Flows ... ...................... ..... ............ ..... ...... ... ..... .................. ............ ......... . C-1 C-2 C-3 17 18 19-20 Fiduciary Funds: Statement of Fiduciary Net Position .... ............................ .......... .......... ........ ........ .... ............ . Statement of Changes in Fiduciary Net Position ...... .... .. ................ .................................... .. D-1 D-2 21 22 Fund Financial Statements: Governmental Funds: Balance Sheet .... .. ... ...... ..... ......... ......... ....... .. ...... ........ .. ... .. ........... ......... ........ ... ............... .. . . Statement of Revenues, Expenditures, and Changes in Fund Balances ............................ . Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds (B-2) to the Statement of Activities (A-2) ........ ............ .. Notes to Financial Statements ............. .. ........... ..... .... ... .. .. ........................... ................... .. 23-55 Required Supplementary Information: Budgetary Comparison Schedule for the General Fund .. .......................... ...... .................... . Budgetary Comparison Schedule for the School General Fund .......................................... . Notes to Required Supplementary Information ................................ ............ .. ................ .. .. .. Schedule of Funding Progress ............................................................................................ . E-1 E-2 E-3 E-4 56-60 61 62 Other Supplementary Information: Non-major Governmental Funds: Combining Balance Sheet ............. ...... .... .... .. ...... .... ... .. ... ................ ............ .. .... ...... ............ . Combining Statement of Revenues, Expenditures , and Changes in Fund Balances ........ .. F-1 F-2 64 65 63 (CONTINUED) CITY DE PROVIDENCE RHODE ISLAND YEAR ENDED JUNE 30, 2013 TABLE OF CONTENTS Page(s) School Grant Funds: Combining Balance Sheet .................................................................................................... Combining Statement of Revenues, Expenses and Changes in Fund Balances ................ . G-1 G-2 66 67 Agency Funds: Statement of Changes in Assets and Liabilities .................................................................. . 1-1 68 Capital assets schedules: Capital Assets Used in the Operation of Governmental Funds ..................... .... ............ ..... . J-1 69 Schedule STATISTICAL SECTION: Net Position by Component ...... ... .......... ............. ...... ... ...... ........ .......................................... . Changes in Net Position ....................................................................................................... Fund Balances, Governmental Funds ... .... .... .. ............. ....... ......... ... ..... ....................... ..... ... . Changes in Fund Balances, Governmental Funds ... .... .... ... ..... .. ..... ...... ........... ................... . Tax Revenue by Source ............................................................... ...... .............................. ... . Assessed Values and Estimated Actual Values of Taxable Property .... .. ....... ... ................. .. Principal Property Taxpayers ............... ......... ...... ..... ... ... .......... ........... ................................. . Property Tax Levies and Collections ..... ...... ..... .......... .. ............ ... .... .. .. .. ....... ....................... . Ratios of General Bonded Debt Outstanding ...................................................................... . Direct Governmental Activities Debt .................................................................................... . Legal Debt Margin Information ........... ...... ............... .. ........... ........ .. ............ ....... .. ........... ..... . Pledged Revenue Coverage ..... ....... ........................ .... ................... ..... ......... ... ..... .. ............. . Demographic and Economic Statistics ................................................................................ . Principal Employers ..... .................. ...................... ..... ...... ...... .............. ....... ............... ......... .. . Full-Time Equivalent Employees by Function ... ...................................... ....................... ...... . Operating Indicators by Function ................. .. ............................... ............. .. ........................ . Capital Assets Statistical by Function .... .... ... ............. ....... .. ................... .................. ............ . 1 2 3 4 5 6 7 8 9 10 11-12 13 14 15 16 17 18 70 71-72 73 74 75 76 77 78 79 80 81-82 83 84 85 86 87 88 (CONCLUDED) CITY OF PROVIDENCE Angel Taveras, Mayor Introductory Section Letter of Transmittal Organizational Chart List of City Officials GFOA Certificate of Achievement CITY OF PROVIDENCE Angel Taveras, Mayor December 31, 2013 City Council Providence, Rhode Island Honorable Members, Rhode Island state law requires that all general purpose, local governments publish a complete set of audited financial statements within six months of the close of each fiscal year. This report fulfills that requirement for the fisc a l year (FY) that ended June 30,2013 . Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute assurance that the financial statements are free of any material misstatements . Accountants and advisers from Braver PC have issued an unqualified (" clean") opinion on the City of Providence, Rhode Island 's financial statements for the year ended June 30, 2013. A copy of their independent auditor's report is located at the front of the financial section of this report. Management's discussion and analysis (MD&A) immediately follows the independent auditor 's report and provides a narrative introduction, overview and analysis ofthe basic financial statements. The MD&A is intended to compliment this letter of transmittal and should be read in conjunction with it. Profile of the Government The capital city of Providence was founded in 163 6 and incorporated in 183 I . It occupies a total land area of 18.1 square miles and an additional 1.9 square miles of water; is located at the head ofNarragansett Bay on the Providence River, and is the major population , financial , educational, governmental, and industrial center of Rhode Island . Situated on the Boston- Washington Interstate 95 corridor, with proximity to multi-billion dollar markets and multi-million population centers, residents and businesses have ready access to all major forms of transportation, including AMTRAK, Providence & Worcester Railroad , TF Green International Airport, the Port of Providence and Interstates 95 and 195. Multi-modal transportation has most recently been expanded with the opening of Interlink, increasing commuter rail service connections with the Massachusetts Bay Transit Authority. Providence has the largest population of Rhode Island 's cities and towns with 178,036 residents (20 I 0 Census), up 2.5 percent from 173 ,618 in 2000 (2000 Census .) The demographic profile for the City is as follows: Caucasians 49.8 percent; Hispanics 38.1 percent; African Americans 16.0 percent; Asians 6.4 percent; and Native Americans 1.4 percent. The City has a Mayor-Council form of government. A Home Rule Charter was adopted in 1980 and became fully effective on January 3, 1983. The responsibilities of City government include providing a range of services that include: general government, community development, administrative services, public safety, sanitation, public works, planning and development, workforce development, recreation, parks and public education. The City adopts an Annual Budget for the General Fund, which includes the School Department. The legal level of control is by Department. Providence is Recovering Upon taking office in January 20 I I, Mayor Angel Taveras signed an Executive Order creating an independent Municipal Finances Review Panel to conduct a full review of the City ' s finances. On March 3, 2011, the Panel delivered a report that identified a $110 million structural deficit in FY2012. Mayor Taveras took swift and decisive action to address this "Category 5 Fiscal Hurricane." He called on every stakeholder in the city to share in the sacrifices necessary to pull Providence back from the brink. He cut his own pay by I 0 percent and reduced the Mayor's Office budget by 10 percent. The Mayor renegotiated union contracts with City workers, firefighters , police officers and teachers, saving approximately 10 percent of the value of those contracts in FY20 12 and more than $100 million over the next several years. Mayor Taveras secured contributions from Brown University and the six other major, tax-exempt universities, colleges and hospitals in Providence, totaling nearly $48 million in additional revenue over II years. In FY20 13, the City reached a landmark agreement with retirees and current employees to reform the City pension and retiree health care system. The agreement saved Providence approximately $18.5 million in FY20 13 and reduces the City ' s unfunded pension liability by approximately $170 million . Details of the agreements: Pension PENSIONS CAPPED: In FY2023 , COLAs will be reinstated only for retirees with pensions less than 150 percent the state median income OR less than the salary of an incumbent employee of the same rank as the retiree at the time of retirement (police and fire retirees only), whichever is lower. COLA SUSPENSION: All COLAs suspended for 10 years. (Families of city employees killed in the line of duty will continue to receive annual COLA .) After 10 years, COLAs will only be reinstated for retirees who are under the pension cap, and COLAs will end when the cap is reached. ELIMINATION OF HIGH-END COLAS: All 5 and 6 percent compounded COLAs are permanently eliminated . FUTURE COLAS LIMITED: Retirees whose COLAs are reinstated in FY2023 will receive annual raises of 3 percent compounded or what is called for in their contract, whichever is less. ONE-TIME STIPEND IN FY2017: In FY20 17 (Year 5 of the agreement), retirees collecting pensions of less than $100,000 will receive a stipend of $1 ,500 . This one-time payment will not change their future pension calculations. CONTINGENT STIPEND IN FY2020: In FY2020 (Year 8 of the agreement), retirees collecting pensions of less than $100,000 may receive a separate one-time stipend of up to $1 ,500 if the city achieves savings through the creation of a self-insured dental plan. The potential payment would not change future pension calculations. ii SUSTAINABLE REFORMS TO PENSION CALCULATIONS: Future pensions will be calculated based on the four highest years of service. The current system calculates pensions based on the highest three years. CONTINUED PENSION CONTRIBUTIONS: Employees will be required to contribute to the pension system for as long as they earn credit toward a pension. ACCIDENTAL DISABILITY: Accidental disability pension calculations will be based on 66 2/3 of the employee's final salary. Healthcare (pertains only to police, fire and retiree association) MEDICARE SETTLEMENT: Retirees 65 and older will move onto Medicare. PART B SUPPLEMENT AND MEDICARE PENALTY: The City will provide funding to cover Medicare's Part B supplement and any penalties retirees will be required to pay. PART D PRESCRIPTION DRUG COVERAGE: The City will also provide funding to cover Medicare Part 0 prescription drug coverage. UNDER 65 HEALTH COVERAGE UNCHANGED : Health care for retirees under the age of 65 will not be changed. These reforms saved the City $4 million ofthe $18.5 million noted above in FY2013 and are projected to save the City more than $40 million over the next I 0 years. Through collaborative efforts and shared sacrifice, the Taveras administration, with the partnership of the Providence City Council and stakeholders across the City, has all but eliminated the City's $110 million structural deficit and ended FY20 13 with a $1.57 million surplus in the general fund. Creating Jobs and Growing Providence's Economy Just as bold actions were necessary to weather Providence 's "Category 5 Fiscal Hurricane" and put the city on the path to long-term financial sustainability, equally bold actions are now being taken to lay the groundwork for a sustained recovery. In April 2013, Mayor Angel Taveras announced a 20-point economic development action plan, Putting Providence Back to Work. The plan builds on Providence's competitive advantages: a knowledge economy anchored by best-in-class hospitals and universities, vibrant arts and cultural centers, a strong maritime industry, thriving small businesses in local neighborhood economies and a young workforce. The City is also making long-term investments in basic municipal operations: strong schools, safe neighborhoods, reliable public infrastructure and the timely provision of city services. 1. Freeze Commercial Tax Rates. In its FY2014 budget, the Taveras administration successfully worked with the City Council to freeze Providence's commercial tax rate. 2. Fix the Permitting Process. The City of Providence has established a new departmental subgroup focused solely on small permit application review so that simple, small-dollar projects proceed more quickly. Providence will also soon allow for online permit application submissions. 3. Remove Barriers to Redevelopment. The Providence Redevelopment Agency is aggressively pursuing a range of economic development tools to spur the continued development of key real estate parcels in the city. iii 4. Develop Surface Lots Citywide. The Taveras administration is preparing a new citywide tax stabilization ordinance designed to incentivize new development on Providence' s surface parking lots . 5. Reinvent Kennedy Plaza . In partnership with a range of stakeholders, Providence is undertaking a fundamental infrastructure reformation of its downtown hub, Kennedy Plaza. The project is designed to make the downtown more attractive for visitors, businesses and residents alike. 6. Invest in Storefront Improvement. The Taveras administration is working to begin a program of reimbursing eligible, main-street small businesses for storefront capital improvements. 7. Provide Targeted Back Office Supports. Providence will begin providing operational support and technical assistance to small businesses and/or eligible start-ups. 8. Reform the City's Zoning Ordinance. Providence is currently undertaking a comprehensive update of the City's existing zoning ordinance to support goals for smart growth, sustainable, cultural , equitable and transit-oriented development. 9. Invest in Historic Preservation. Providence worked with the General Assembly, the Office of the Governor and local advocates to win reinstatement ofthis critical tax credit. 10. Market Available Real Estate. Providence will create and maintain a public database of properties available for development. Beyond being available online, Providence ' s available real estate will be aggressively marketed to site selection consultants nationwide . 11. Raise Participation in State Incentive Programs. Using a range of outreach strategies, the City will execute an outreach campaign to increase the rate of participation . 12. Review Statewide Regulatory Policy. The City proposes a full review of Rhode Island labor, tax and regulatory policy, in cooperation with both business organizations and labor representatives, with the goal of aligning Rhode Island standards with national norms . 13. Raise Student Achievement. Providence is implementing two new, award winning programsProvidence Talks and Providence Reads - to help ensure Providence children enter kindergarten ready to learn and reach grade level reading proficiency by third grade. 14. Expand Apprenticeship Programs. Providence will expand its portfolio of apprenticeship programs, looking first to Providence's working waterfront and creative economy. 15. Support Nursing & Health Sciences. Providence will work to bring a nursing school to the City. 16. Expand Adult Education. Workforce Solutions of Providence/Cranston will seek new partnerships between Rhode Island ' s institutions of public higher education and local community organizations. 17. Make Streetcars a Reality. Providence is aggressively pursuing a sustainable funding strategy to bring this transportation option to fruition . 18. Rehabilitate Foreclosed Properties . Providence will partner with Community Development Corporations to direct the rehabilitation of abandoned and vacant residential properties. 19. Market Providence. In the summer of 20 13 Providence conducted a regional marketing and advertising campaign encouraging visitors to "Come to Providence." iv 20. Improve the Visitor Experience. Providence will erect new visitor information kiosks, which will double as a centralized ticketing hub for all a1ts related events and activities in Providence. Infrastructure Improvements The City is working to improve infrastructure in ways that will impact all residents and businesses for years to come . Providence Road Improvement Project: In spring 2013, the City kicked off the Providence Road Improvement Project, its efforts to rebuild and repair approximately 65 miles of roads, or one out of every six roads, in Providence. The road improvement work is funded by a $40 million bond that was overwhelmingly approved by city voters in November 2012. Improving Public Education Plans to grow the City's economy can never be divorced from efforts to improve our schools. The City is working to provide every child in Providence with a first-class education. Providence Reads - In fall20 12, the City launched Providence Reads- an initiative in partnership with more than a dozen businesses and organizations to increase grade-level reading, promote school readiness, improve school attendance and support summer learning in Providence. Providence Talks - In March 2013, the City became the $5 million Grand Prize Winner of Bloomberg Philanthropies ' Mayors Challenge for its innovative proposal to set low-income children on a path toward lifelong achievement by increasing the number of words they hear in their earliest years. Children and Youth Cabinet - The City is working closely with the Providence Children and Youth Cabinet (CYC), a diverse team of more than I 00 community leaders helping to guide the future of education in Providence. In October 2012, the CYC released its 'Educate Providence: Action for Change' report, which provides baseline data and II indicators to measure the City's progress in educating children from cradle to career. Awards- Providence's efforts to improve public education were recognized and honored. o In July 2012, Providence was named an All-America City by the National Civic League for its ambitious plan to ensure that more children are reading at grade level by the end of third grade. o In July 2012, the Casey Foundation chose Providence as the first site for Evidence2Success because of the City's and the State's commitment to investing in children and youth, and for their collaborative efforts to improve outcomes of children in low-income neighborhoods. o In October 2012, the Mayor 's Children and Youth Cabinet was among the national winners of the Together for Tomorrow School Improvement Grant. Providence received the national recognition for its efforts to turn around low-performing schools and raise student achievement in every public school. v o In October 2012, Cities of Service announced that it awarded Providence a $25,000 grant supported by Bloomberg Philanthropies to implement Leyendo, a service-based initiative to boost reading levels for Providence students who are not reading on grade level and speak a language other than Eng li sh at home. Healthy Communities In August 2012, Mayor Taveras signed an executive order establishing the Healthy Communities Office. The office is charged with improving the health and well ness of Providence residents by improving nutrition and increasing access to healthy foods , promoting physical activity and recreation, and preventing substance abuse among young people, among other efforts. The Healthy Communities Office, along with other City departments, has worked to make Providence a healthier community for all. Cyclovia: In 2012, the City held its first Cyclovia on Broad Street. The street was closed to traffic for exclusive use of pedestrians, runners, skaters and bicyclists. Cyclovia is an international phenomenon that reportedly began in Bogota, Colombia and has spread to cities across the globe, including New York City, Chicago, Seattle, San Francisco, Los Angeles, Miami , and Cambridge, Mass. In spring 2013, Mayor Taveras announced that the City will host an expanded schedule of three Cyclovia events over the summer. Tobacco Prevention: In early 2012, Mayor Taveras and the Providence City Council passed two ordinances banning the sale of tobacco products and store discounts aimed at children. The tobacco industry sued to prevent the laws from taking effect. In December 2012, the City won an important victory in its fight to protect children from the harmful effects of tobacco, when Rhode Island U.S. District Cou1t Chief Judge Mary Lisi ruled against Big Tobacco's attempt to block City officials from enforcing the new anti-tobacco laws. Sustainability The City of Providence is taking vital steps to improve the quality of life for City residents and to ensure that Providence is a sustainable and livable place for residents and visitors. Big Green Can Recycling: In October 2012, the City launched a new recycling initiative, making it easier for residents to recycle in Providence. Every Providence household received a new, 65-gallon gray trash barrel and began using the large, 95-gallon ' Big Green Can' for recycling. The larger recycling barrel , coupled with the statewide transition to single-stream recycling, aims to increase recycling rates by making it easier for all residents to recycle. Lots of Hope: In 2012, the City of Providence, in partnership with the Southside Community Land Trust and the Rhode Island Foundation, launched Lots of Hope, a new initiative to convert city-owned vacant lots into productive urban farms. Earth Day City-wide Clean Up : ln April 2013, Mayor Taveras and the City of Providence hosted the first annual city-wide celebration of Earth Day, drawing I ,800 volunteers who cleaned parks, planted trees and worked on neighborhood beautification efforts. vi Debt Administration Outstanding governmental ~nd business-type activity bonds at June 30,2013 totaled $623,051,000. (Note 7 of this report presents more detailed information about the City's debt position.) The City has the following bond ratings: Moody's Investor Services Standard and Poors Fitch Baal BBB BBB Long-Term Financial Planning As part of the annual budget process, the Finance and Planning Departments present a five-year Capital Improvement Plan. This plan identifies costs and financing methods for those capital projects the City expects to fund over the next five years. The 20 12 - 20 16 fiscal year Capital Improvement Plan projects needs through FY20 16. The plan provides for the needs of the general government and addresses issues such as infrastructure, major equipment replacement, school facilities, public safety, recreation and public lands and parks. Acknowledgments The preparation of this report could not have been accomplished without the dedication and hard work of the Finance, Planning & Development, Policy and Communications professionals who work for the City of Providence. I would like to express my appreciation and gratitude to all of the staff members who assisted and contributed to its preparation. I also appreciate the assistance and dedication of the audit team of BraverPC. Finally, I would like to thank Mayor Angel Taveras and the Providence City Council for their steady and responsible stewardship of all aspects of City government. ~~~~ ~~~ini Lawrence J. Finance Director vii ,~,, City of Providence Organizational Chart Mayor City Council Water Supply Board Treasury City Archives City Council Office Parks Com iss ion Finance Police Information Technology Emergency Management Public Property/ Purchasing Fire Telecommunications Economic Development Board of Canvassers Redevelopment Agency Parks & Recreation Inspections & Standards Art, Culture & Tourism viii City Officials As of June 30, 2013 Mayor Angel Taveras City Council Ward Ward Ward Ward Ward I -Seth Yurdin 2- Samuel D. Zurier 3- Kevin Jackson 4- Nicholas A. Narducci 5 - Michael A. Solomon Ward Ward Ward Ward Ward 6- Michael J. Correia 7- John J. Igliozzi 8 - Wilbur W . Jennings , Jr. 9- Carmen Castillo I 0 - Luis A. Aponte Ward Ward Ward Ward Ward 11 - Davian Sanchez 12- Terrence Hassett 13 -Brian Principe 14 - David A. Salvatore 15 - Sabina Matos Department Directors Chief Engineer/GM of Water Supply Chief of Fire Department Chief of Police Department Chief of Staff City Clerk City Controller City Solicitor City Treasurer Director of Administration Director of Arts, Culture, and Tourism Director of Emergency Management Director of Finance Director oflnformation Technology Director of Inspections and Standards Director of Operations Director of Personnel Director of Planning and Development Director of Public Works Director of Telecommunications Internal Auditor Recorder of Deeds Registrar of Vital Statistics Superintendent of Parks and Recreation Superintendent of Schools Tax Assessor Tax Collector Traffic Engineer ix Boyce Spinelli Michael Dillon, Acting Col. Hugh Clements, Jr. Michael D 'Amico, Acting Anna Stetson Michael D ' Antuono Jeffrey Padwa, Esq. James Lombardi, III Michael D'Amico Lynne McCormack Col. Peter Gaynor (ret) Michael Pearis James Silveria Jeff Lykins Alan Sepe Sybil Bailey Ruben Flores-Marzan William Bombard, Acting William Trinque Matthew M . Clarkin, Jr. John Murphy Serena Conley Robert McMahon Dr. Susan Lusi David L. Quinn John Murphy William Bombard Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Providence Rhode Island For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30,2012 Executive Director/CEO X I CITY OF PROVIDENCE FINANCIAL SECTION REPORT OF INDEPENDENT AUDITORS MANAGEMENT'S DISCUSSION AND ANALYSIS BASIC FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION I & Braver" I Accountants & Advi sors REPORT OF INDEPENDENT AUDITORS To the Honorable Mayor and Members of the City Council Providence, Rhode Island 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 Providence, Rhode Island, as of and for the year ended June 30, 2013, 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. Auditors' 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 financ ial statements. The procedures selected depend on the auditors' 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. 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 Providence, Rhode Island, as of June 30, 2013, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Needham Taunton 155 South Main Street, Suite 100, Providence. Rl 02903 T401.421.27 10 F401.274.5230 www.thebravergroup .com Providence Other Matters Required Supplementary Informa tion Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, budgetary comparison information, and Schedules of Funding Progress on Pages 3-ll, Pages 56-62 and Page 63, respectively, 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 Providence, Rhode Island's basic financial statements. The introductory section and the accompanying financial information listed as supplemental schedules in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining fund financial statements and capital assets schedules are the responsibility of management and were derived from and relate d irectly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures app lied 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 financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America, In our opinion, the information is fairly stated in all material respects in relation to the financial statements taken as a whole. The introductory section and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 31,2013, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Providence, Rhode Island's internal control over financial reporting and compliance. Providence, Rhode Island December 31, 20 13 2 CITY OF PROVIDENCE, RHODE ISLAND MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30,2013 This Management's Discussion and Analysis of the City of Providence, Rhode Island 's Basic Financial Statements provides a narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2013. Financial Highlights- Primary Government Government- Wide Highlights Net Position- The liabilities of the City's governmental activities exceeded its assets for the fiscal year ending June 30, 2013 by $146.3 million (presented as "total net position"). Of this amount, a negative of $263.7 million was reported as " unrestricted.' The net investment in capital assets was $117.4 million. The assets of the City's business-type activities exceed its liabilities by $258.7 million. Of this amount, $217.2 million represents the City's net investment in capital assets. Change in Net Position- The City's total net position decreased by $5.3 million in fiscal year 2013. Net position of governmental activities decreased by $7.8 million, while net position of business-type activities increased by $13.1 million. Fund Highlights Governmental Funds - Fund Balances - As of June 30, 2013, the City's governmental funds reported a combined ending fund balance of$91.4 million, a $38.9 million increase from the prior year. Ofthe total fund balance reported, a negative $9.8 million represents " unassigned fund balance". Long-Term Obligations The City's total long-term obligations related to its government activities had a net increase of $42.8 million during the current fiscal year. The total long-term obligations of the City's proprietary activities increased $.02 million during the current fiscal year. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of Providence's basic financial statements. The City's basic financials statements include three components: I) government- wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains additional supplementary information (budget schedules) and other supplementary information (combining financial statements). These components are described in this next section of this analysis. Basic Financial Statements The basic financial statements include two types of statements that present different views of the City's financial information. These statements are the Government-Wide and the Fund Financial statements. These financial statements are accompanied by Notes to the financial Statements, which provide detailed information about financial statement items. 3 CITY OF PROVIDENCE, RHODE ISLAND MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30,2013 Government-Wide Financial Statements The government-wide financial statements provide a broad view of the city's operations in a manner similar to a business operating in the private sector. The statements provide short-term and long-term information about the City' s financial position, which assists in assessing the City's economic condition at the end of the fiscal year. These are prepared using the flow of economic resources measurement focus and the accrual basis of accounting. This basically means they follow methods that are similar to those used by most businesses. They take into account all revenues and expenses connected with the fiscal year even if cash involved has not been received or paid. The government-wide financial statements include two statements: The Statement of Net Positon presents all of the government's assets and liabilities, with the difference between the two reported as " net position." Over time, increases or decreases in the City's net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The Statement of Activities presents information showing how the government's net position changed during the fiscal year. All changes in net position are reported, as soon as, the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expense are reported in this statement for some items that will not result in cash flows until future fiscal periods (such as, uncollected taxes and earned, but unused vacation leave). This statement also presents a comparison between direct expenses and program revenues for each function of the City. Both of the above financial statements have separate sections for two different types of the City's programs or activities . These activities are defined below: Governmental Activities - The activities in this section are supported mostly by tax revenues and intergovernmental revenues (federal and state grants). Most services normally associated with City government fall into this category, including the executive, legislative and judicial, financial administration, human resources, public safety, building inspections, public works, recreation, parks, schools, public property, planning, other general government, judgment and c laims, retirement costs, debt service, and other employee benefits. Business-Type Activities - These functions normally are intended to recover all or a significant portion of their costs through user fees and charges to external users of goods and services. The City's business-type activities include the operations of the Water Supply Board and The Providence Public Building Authority. The City does not have any discretely presented component units . Fund Fin ancial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. Like other local Governments, the City uses fund accounting to ensure and demonstrate compliance with finance-regu lated legal requirements. The fund financial statements focus on individual parts of the City government, reporting the City's operations in more detail than the government-wide statements. All of the funds of the City can be divided into three categories. It is important to note that these fund categories use different accounting approaches and should be interpreted differently. The three categories of funds are described below: 4 CITY OF PROVIDENCE, RHODE ISLAND MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2013 1. Governmental Fund Financial Statements - Most of the basic services provided by the City are financed through governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, the governmental fund financial statements focus on near-term inflows and outflows of spendable recourses. They also focus on the balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluation the government's near-term financing requirements. This approach is known as using the flow of current financial resources measurement focus and the modified accrual basis of accounting. These statements provide a detailed, short-term view of the City's finances that assists in determining whether there will be adequate financial resources available to meet the current needs of the City. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-side financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and the governmental activities. These reconciliations are presented on the page immediately following each governmental fund financial statement. The City has four governmental funds considered to be major funds for financial statement presentation. That is, each major fund is presented in a separate column in the governmental fund balance sheet and governmental fund statement of revenues, expenditures, and changes in fund balances. The City's four major governmental funds are comprised of the following: (I) the General Fund, (2) the School Fund, (3) the School Grant Fund, and ( 4) the Capital Projects Fund. All nonmajor governmental funds are presented in single column. The basic governmental fund financial statements can be found immediately following the government-wide statements. 2. Proprietary Fund Financial Statements - These funds are used to show activities that operate more like those of commercial enterprises. Because these funds charge fees for services provided to outside customer, including local governments, which are known as enterprise funds. Proprietary funds provide that same type of information as the government-wide financial statement, only in more detail. Like the government-wide financial statements, proprietary fund financial statements use the accrual basis of accounting. There is no reconciliation needed between the government-wide financial statements for business-type activities and proprietary fund financial statements. The City has two major enterprise funds: The Water Supply Board and the Providence Public Buildings Authority. Financial statements for the Providence Public Buildings Authority may be obtained from the City of Providence Finance Department. The Internal Service Fund is maintained to account for the self-insured health claims and potential legal claims of the City. The basic proprietary fund financial statements can be found immediately following the governmental fund financial statements. 5 CITY OF PROVIDENCE, RHODE ISLAND MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2013 3. Fiduciary Fund Financial Statements - These funds are used to account for resources held for the benefit of parties outside the City government. Fiduciary funds are not reflected in the governmentwide financial statements because the resources of these funds are not available to support the City' s own programs. The accounting used for fiduciary funds is similar to that used for proprietary funds . They use the accrual basis of accounting. The City' s fiduciary funds are the Employee Retirement Fund, various Private-Purpose Trust Funds, and Agency Funds. The fiduciary financial statements can be found immediately following the proprietary fund financial statements. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and the fund basis financial statements. The notes to the financial statements can be found immediately following the fiduciary fund financial statements. Required Supplementary Information The basic financial statements are followed by a section of required supplementary information. This section includes budgetary comparison schedules for the general and school funds - the only governmental funds for which legal budgets are adopted annually. In fiscal year 2013 , there were no significant modifications to the budgets originally adopted for each fund . Other Supplementary Information Combining Financial Statements and Schedules Combining financial statements are presented for nonmajor governmental funds and combining schedules are presented by individual grant within the school department. These are presented following the required supplementary information. The total columns of these combining financial statements and schedules are presented in the applicable fund financial statement. 6 CITY OF PROVIDENCE, RHODE ISLAND MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2013 Government-Wide Financial Analysis Net Postion As earlier noted, net position may serve as a useful indicator of the government' s financial position over time. The City' s combined net position (government and business-type activities) totaled $112.4 million at the end of2013 , compared to $107.1 million at the end last year. The largest portion of the City' s net position, $334.7 million, reflect its investment in capital assets, like land, buildings, equipment, and infrastructure (roads, bridges, and other immovable assets) less any outstanding related debt used to acquire that asset. The City uses these capital assets to provide services to citi zens; consequentially, these assets are not available for future spending. Although the City' s investments in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets can not be used to liquidate these liabilities. June 30,2013 June 30, 2012 Governmental Business-type Activitites Activities Current and other assets Capital assets Total Assets $ Current liabilities Long-term liabilities Total liabilities Net Assets: Investment in capital asse1 net of related debt Restricted Unrestricted $ Total Net assets 275,678 685 ,985 961 ,663 $ 64,006 295,297 359,303 Total $ 339,684 981 ,282 1,320,966 Governmental Business-type Activitites Activities $ 233,151 684, 133 917,284 $ 74,183 266,247 340,430 Total $ 307,334 950,380 1,257,714 220, 182 887,794 1, 107,976 22,256 78,322 100,578 242,438 966, 116 1,208,554 205,922 849,873 1,055,795 20, 151 51 ,462 71 ,613 226,073 901 ,335 I, 127,408 117,449 217,210 334,659 122,997 213 ,758 336,755 35, 112 6,403 258,725 35 ,112 (257 ,359) 112,412 20,943 10,749 245 ,450 20,943 (250,759) 106,939 (263,762) (146,313) $ $ $ (261 ,508) (138,511) $ $ Restricted net position of $35 .1 million primarily represent water restricted funds that are subject to external restrictions on how they may be used. Internally imposed designations of resources are not presented as restricted net position. Changes in Net Position The City's net postion decreased by $7.8 million and increased by $13.1 million for governmental activities and business-type activities, respectively. General fund revenues increased due to the success of increased tax collections and higher than budgeted departmental while expenditures for healthcare and pension costs came in higher than the budgeted amounts. Business-type activities increased due to large commitment to the replacement of infrastructure included in water rates in FY2013 . Approximately 47 .5% ofthe City' s total governmental revenues were generated from taxes and payments in lieu of taxes . 34% resulted from grants and contributions, including Federal Aid. Charges for various goods and services provided 13.3% of total revenues, while other revenues and investment and rental income accounted for 5.2% of total revenues, respectively. The C ity ' s expenses cover a range of services. The largest expenses were for school, public safety, retirement costs, and employee benefits. Revenues from business-type activities in 2013 exceeded 7 CITY OF PROVIDENCE, RHODE ISLAND MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2013 expense by $12.8 million . The Business-type activities reported an increase in revenue of I%, while expense increased 2% over the prior year. June 30,2013 Revenues: Program revenues: Charges for service Operating grants and contributions Capital grants and contributions General revenues: Property taxes Grants not restricted for a speci fie purpose Miscellaneous Unrestricted investment earnings Total revenues Governmental Activities Businesstype Activities $ $ Net assets- beginning $ $ $ 243 2, 100 99,409 351,605 19,296 18,290 2,184 848,029 344,052 21 ,472 16,846 100 716,188 51,677 57,819 I 57,676 4,126 25 ,754 1,644 19,437 379,768 18,687 32,365 19,396 52,553 86,371 32,662 58,429 165,773 4,264 21 ,889 1,903 20,415 410,416 24,297 30,796 19,396 52,553 842,793 (7 ,802) 13 ,038 (138,511) 245 ,687 756,422 Change in net assets $ Businesstype Activities 852 32,662 58,429 165 ,773 4,264 21 ,889 1,903 20,415 395,994 24,297 30,796 96,214 Total Governmental Activities 194,548 261,254 852 351 ,605 19,296 18,047 84 748,620 Expenses: Executive, legislati ve and judicial Finance Public safety Builiding inspection Public works Recreation Public lands and parks Education Community development Interest on long-term debt Economic development Water Total expenses Net assets- ending 98,334 261 ,254 June 30, 2012 14,422 ( 146,313) $ 258,725 $ 92,095 241,623 Total 97,270 $ 189,365 827 241,623 827 200 98,297 344,052 21 ,472 16,846 300 814,485 748,953 19,992 50,461 84,361 51 ,677 57,819 157,676 4, 126 25 ,754 1,644 19,437 393 ,676 18,687 32,365 19,992 50,461 833 ,3 14 5,236 (32,765) 13 ,936 ( 18,829) 107, 176 (I 05 ,746) 231,75 I 126,005 (138,511) $ 245 ,687 $ 107, 176 112,412 $ 13,908 Business-Type Activities The business-type activities increased the City's net position by $13 .1 million. This resulted primarily from a $11 million increase in net position of the Water Supply Board, an increase of net position of$! million by the Providence Public Building Authority, and $1 million by the school lunch program. Financial Analysis of the City's Individual Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. 8 CITY OF PROVIDENCE, RHODE ISLAND MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2013 Governmental Funds The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City' s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. The general fund is the chief operating fund of the City. At the end of the current fiscal year, unassigned fund balance of the general fund was a negative $9 .8 million , an increase of 1.6 million from 11.4 million the prior year. The increase in fund balance is due to increased tax collections and higher than budgeted departmental revenues. As a measure of the general funds ' liquidity, it may be useful to compare both unassigned fund balance and total fund balance. School Grants-Fund Balance - The school grant funds account for federal and state grants received and expended by the school system. The fiscal year 2013 school grants fund balance is reported at $1.99 million, a $.2 million decrease from fiscal year 2012. The inclusion of all state aid in fiscal 2013 was included in the School ' s general fund and excluded from the school grants fund. School Fund - The school fund ended the year with a $0 fund balance in accordance with City charter regulations. The expenditures were $337.9 million as compared to $320.4 million in the prior year. The inclusion of all state aid in fiscal 2013 was included in the School's general fund and excluded in the school grants fund . Capital Projects Fund-Fund Balance - The capital projects fund accounts for resources to be used for the acquisition or construction of capital assets for housing and community improvement activities in the City, other than those financed by proprietary funds. The fiscal year 2013 capital projects fund balance is $39.6 million. The $38 .63 million increase from fiscal year 2012 is attributable most notably to the $40 Million Road Bond Paving Initiative. Proprietary Funds The City' s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. As discussed in the business-type activities above, the City's proprietary net position increased by $13 million as a result of operations in the individual enterprise funds. This resulted primarily from a $11 million increase in net position of the Water Supply Board, an increase of net position of $1 million by the Providence Public Building Authority, and $1 million by the school lunch program. General Fund Budgetary Highlights The general fund incurred an uncombined surplus in FY 2013 of $1.9 million. This will increase the cumulative uncombined general fund balance to a negative $17 .9 million. The new GASB 54 requirement for combining funds shows a cumulative general fund balance as a negative $9.8 million. Total general fund revenues and transfers for the fiscal year were $449.8 million and total general fund expenditures and transfers for the fiscal year were $447.9 million. Further details of favorable and unfavorable variances of revenue and expense items can be found in the Required Supplementary Information on pages 56 to 60 of the Comprehensive Annual Financial Report. 9 CITY OF PROVIDENCE, RHODE ISLAND MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2013 Capital Asset and Debt Administration Capital Assets (Note 5 to the Basic Financial Statements) Land Land Improvements Building and Improvements Machinery and Equipment Infrastructure Leased Assets Construction in Progress Governmental Activitites June 30, 2013 Business-type Activities $ 46,768 $ $ 144,398 16,704 102,817 347,703 27,595 685,985 $ 24,529 18,682 146,869 3,033 10,041 75 ,049 278,203 Total $ $ 71 ,297 18,682 291 ,267 19,737 102,817 357,744 102,644 964, 188 Governmental Activitites $ 46,865 $ 132,470 15,519 106, 159 350,852 32,268 684, 133 June 30, 2012 Business-type Activities $ $ 21 ,917 18,682 148,545 3,082 10,225 63 ,796 266,247 Total $ $ 68,782 18,682 281,015 18,601 106, 159 361 ,077 96,064 950,380 The City's investment in capital assets for its governmental activities as of June 30, 2013 amounts to $1,072.6 million, net of accumulated depreciation of $386.6 million, leaving a net book value of $686 million. This investment in capital assets included land , buildings, improvements, equipment, infrastructure and construction in progress. Infrastructure assets are items that are normally immovable and of value only to the City, such as roads, bridges, streets and sidewalks, drainage systems, lighting systems, and similar items. 10 CITY OF PROVIDENCE, RHODE ISLAND MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30,2013 Debt Administration Governmental Activitites General Obligation Bonds $ Revenue Bonds June 30, 2013 Business-type Activities 105,66 1 $ 65 ,934 Tax Increment Obligations Capital Notes Payable Notes Payable Total 78 ,087 $ 144,021 June 30, 2012 Business-type Activities Total $ 73 ,815 68 ,860 52,489 73,815 121,349 9,450 9,450 12,585 12,585 35 , 127 35 , 127 39,554 39,554 2,777 2,777 2,776 2,776 PPBA Debt 363 ,919 $ 105 ,66 1 Governmental Activitites 218,949 $ 442,006 363 ,919 $ 660,955 388,487 $ 197,590 $ 440,976 388,487 $ 638,566 The authority of the City to incur debt is governed by federal and state laws, which restrict the amounts and purposes for which a municipality can incur debt. General obligation bonds are backed by the full faith and credit of the City, including the City's power to levy additional taxes to ensure repayment of the debt. Accordingly, all general obligation debt currently outstanding was approved by a vote of the City Council. The City's total outstanding notes and bonds increased by $22.4 million during the current fiscal year. The 2004 State legislative session authorized the City to issue variable rate debt and to participate in interest rate swaps. The City is developing policies that will set guidelines and procedures and define permitted instruments. It will set participant requirements and limitations on exposure, as well as ongoing management and reporting requirements. The City of Providence maintains the following ratings from Wall Street's credit agencies for general obligation debt: an Baal rating from Moody 's Investors Service, and a BBB rating from Standard and Poor and an BBB rating from Fitch. The City of Providence continues to perform long-term strategic planning in a pro-active attempt to control costs: examples of these costs are health insurance, pension costs, education, salaries and benefits and debt service. The City has negotiated with all of its unions to increase employee contributions for health insurance. Additional information on the City's long-term debt obligations can be found in Notes 7 and 8 to the Financial Statements. Requests for Information This financial report is designed to provide a general overview of the City of Providence's finances for all of the City of Providence's citizens, taxpayers, customers, and investors and creditors. This financial report seeks to demonstrate the City's accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional information should be addressed to: City of Providence, Finance Department, Providence City Hall, Providence, RI 02903. 11 I CITY OF PROVIDENCE BASIC FINANCIAL STATEMENTS I A-1 CITY OF PROVIDENCE Statement of Net Position June 30, 2013 (in thousands) Governmental Activities ASSETS: Current Assets: Cash and cash equivalents Restricted cash and cash equivalents Investments Restricted investments Taxes receivable (net of allowance) Intergovernmental receivable Loan receivable (net of allowance) Restricted receivables Other receivable Charges for service receivable (net of allowance) Internal balances Other assets Total current assets $ $ 27 ,039 24,259 46,831 28,041 32 ,088 26 ,628 8,698 6,261 Totals* $ 874 18 13,295 Noncurrent assets Deferred charges Capital assets , nondepreciable Capital assets , depreciable , net Total noncurrent assets TOTAL ASSETS LIABILITIES: Current Liabilities: Warrants and accounts payable Payable to retirement plan Due to other governments Line of credit Accrued liabilities Other Unearned revenue Amounts payable with current restricted assets Long term debt due within one year Total current liabilities 13,098 (25 ,048) 1,389 64 ,006 3,871 337 ,032 2,652 74 ,363 611 ,622 688,637 102,326 192,971 295 ,297 2,652 176,689 804,593 983 ,934 961 ,663 359,303 1,320 ,966 30 ,055 39 ,603 165 6,995 91 ,748 220 ,182 5,051 1,997 1,395 3,818 22 ,256 37 ,050 39,603 165 3,000 43 ,466 5,051 17,142 1,395 95 ,566 242 ,438 887 ,794 887 ,794 78,322 78 ,322 966,116 966 ,116 1,107,976 100,578 1,208 ,554 117,449 217 ,210 31 ,512 3,600 6,403 258,725 3,000 15,145 TOTAL LIABILITIES $ 138,119 26,628 35,737 6,261 24,259 47,705 28 ,041 18 13,295 13,098 25 ,048 2,482 273 ,026 43,466 Noncurrent liabilities: Due in more than one year Total noncurrent liabilities Net Position Net investment in capital assets Restricted for Water Quality Protection Restricted for debt service Unrestricted TOTAL NET POSITION 106,031 Business-Type Activities (263 ,762) (146,313) $ *After internal receivables and payables have been eliminated SEE NOTES TO THE BASIC FINANCIAL STATEMENTS 12 $ 334 ,659 31 ,512 3,600 (257,359) 112 ,412 A-2 CITY OF PROVIDENCE, RHODE ISLAND Statement of A ctivities For the Year Ended June 30, 201 3 (in thous ands) Prog ram Revenues Charges