2005 Audited Financial Statement

CITYOFNEWARK
NEWCASTLECOUNry DELAWARE
AUDITREPORT
DECEMBER
31,2OO5
CIIY OF NEWARK
IA8I.TOF COI'ITEMS
REPORT
INDEPENOENT
AUDTORS'
BASICFIMNCIA!SIAIEMEIIIS
Enlllv-wldstlmnclol slqiem€nlsi
- Slololn€nlol Nel Assels
- Slql€m€nlof Actlvlllgs
Fund tlnonclqlSlolemenlsl
- Soloncash6et - GovemmenlqlFunda
- neconclllollonot lhe Boloncesheel ' Gov€lnmanljolFundslo
Siolomonlol Net As56ls
- Slolomenlof R6von!e!, ExpgndltuGsond Chongesln
fund Eolonc€s- Govemmgnlolfunds
- Reconclllollonol stotemenlot Rgvonugs,Exp€ndlluresond
Chongpr In Fundglolonceaol Govsnmenlol Fundllo
slolemonl ot Aclivlll€s
- Stolqmanlot R6venu95,Expondlfui€rond Chong€sIn fund Eoloncas'
Eudgeldnd Acluol - GenorolFund
9
- Stolem€nlof Nol Alaols- PropdeioryFunds
l0
- Slol€m6nlof Revenu6s,Expsm€5ond Chonga3In FundNofAss6ls'
PropdoloryFunds
ll
- siolem€nl of CoshFlows- PropdeloryFundl
12
- Siolem€niof Nol Alsel! - FlducloryFunds
l3
- Slolom€nlof ChongeaIn Nel fus€ls- Flduclorytunds
l4
SIAIEMENTS
NOIESTOFINANCIAI,
t5-37
INFORMATION
SUPPLEMENIANY
Comt nlng FundSlolomenli:
- ComblnlngSolonceSh6el- NonmolorGov€mmenlolFund]ypel
- @mbhhg Stotomentot Rovonu65,apgndlluros ond Chongos
In FundEoloncss- NonmolorGovemm€nid FundTyp6i
39
- comblnlng Slolomontot Nel Assots- FlducloryFund3
40
- ComblnlngStolgmenlol Chong€sIn Nol A5s6ts- FlducloryFundt
41
INDEP€NDENT
AUDITORS'
REPORT
Decemb€r6, 2006
Momb€lsot Clly Councll
CfV ot l{owofi
Ngwork.Dolowoto
Wehovo oudlt€d lhe occomponytng ttnonclotdot€m9nb of th6 govemmonlqtocflvilies,ihe budn€a!lypo ocllv[br, soch rnojor fund ond lh6 oggr6gole l6molnlng fund Intormoflonol the CW ol Ngwork,
N€work,Delowore,os ot ond tor lhe ysor onat€dD6c6mber31, 2OOS,
whlch collec vglv comprlselhe
Clly's bodc flnonclol liol€mgnts os llsled In tho lobtg ot conlehts. Iheso llnonclol slolemgnb ole ihe
respondb|flt ot lh€ Clifr monqgemenl. Olr r€sponslbllltylr lo axpaerson optntonon th€soflnonclol
siol€mgnls bos6d on our oudll. Th€ prlor yedr summodzedComporollve Inlormollon hoi L€en
d6 v6d lrom the Cli/s 2m4 flnonclol rlolgments ond, In our reporl duol_doted July O. 2(X)Sond
Oclober 6, 2006,w9 €xpr€ilgd on unquotlfledoplntonon thosaflnonctol rlol6menti
We conducled our oudtt In occordonce wlh oudlllng slondords qendo y occ€pl€d ln th€ Un[€d
Slolot ot Amo co ond the sljondordsopFrlcobl€to flnoncbl oudlls conlolnod tn Gawe.nmdt A)d lng
Stondords,lssu6dby the Comptfoll€rGonercl ot lh€ th od Stol6r. lhoss slondorclsr6qulrelhol w€
plon ohd perlorm lhe oudll to oblolh reosonobl6o$suKrnc€obout whgth€r the finonctol slolgmenls
or9l€€ of mol€rlol mlsslolemenl. An oudil Incluctgsexomlnlng,on o losl bqsls,evldence sufporllng
thg omounls ond dlsclcsuresIn th6 llnonclql alolemenb. An oudll ollo Includor oss€s5tnglhe
occouning palnclpJesus€d ond slgnlicont esfmot6s mocle by monogrmgnl, 03 wglt os evoluo ng
th6 ov6roll flnoncld ilol6menl pr6sentollon. We b€lteve lhol our oudil provtd€so a€osonoblobosts
torouf opinlohs,
In ou odnlon, the tlnonclol sliolemenl!r6fer6d l,o obove p€sonl tokly, ln oll mot€rlol rosp€cls,lhe
lespecllvo flnonclol poslllon ot the governm€ntolocllvlfles, th€ busln6ss-lyp9ocllvlllgst eoch rholor
tund ond lhe oggrgglole femolnlng lund lnlornollon ot th€ Clly of Notvod<,Nevrork,Oolowore,os ot
D€comt€r 31, 2005, ond lh€ reapecllvechonge! In flnohctotposlfionond cosh flow,, wh€.e
oppllcoue, lhea6otond the budgolory compodsonstor lh9 gBnorol tund tor lhe y€or then ond€d, In
conlohlly wlth occounltng pdnclpl€sgsn€ro y occepl6d In the UnltedSlotesot Amo co,
fn occordonco wflh GovemmenlAudttlng s'or'dd/rdt,we hove ql$o lssuedou reporl cbled Oecembe,
6, 2006 on ou conEld€.ollonof the Clt ol Newolk'sInl€r|ol conlrol over flnonclol rgporflngqnd our
igsir of lh compllonce wllh carlotn provbloosol towi, regulollons,conlrqcts, gronl ogl6gm€nls ond
olher mollers, lhg pu.p$e of lhol r€portt! lo delcib€ th€ ,cope ol our t63llngot lntelnol controtov6r
nnonclolr€porling ond compttonca onal lhc rosulr ot thol l6sllng, ond not to provtdo dn odnlon on
lhs Inletnol conhol ov6r llnonctol reportinoor on comp[once, Thot rsporl lr on lntegrol pdrt ot on
oudfl pedomad fn occordonce with GovernmehtArdllhtg Siohdo.dsortd shoutdbo cond<teredln
o$6sgng lh6 r6l1llbol our oudll.
,t,
Membgrsot CltVCouncll
CIV ot Newqrk
Itl€ monogomonl'adlrcur6lonond onolyslsls nol o requlr€dpod ol ihg bodc tlnonclol liolemenl6 but
l iopplemenlory lnlormollon €qulrgd by occounling pdnclplas gor|erolly occ€pted In ihg Unlled
slolgs ol Amgrloq. Th6Clt ol ll€wo* hot not paelenledthe monogemenfi dl cusslonond onolysk
lhol rccgunllng pdnclde! 96n€rolly ocrepied In the Unlt€d SlolFsof Am€dco hov€ dotomlnod b
n6cessclrylo r{/pplgmenl, ollhough nol r6qulredto bc porl ol lho boslc tlnonclol slql€monls.
Ot! oudlt wo, conduclod for lhe purFoso of lolmlng oplnlons on lh,a linonclol ilolem€nb lhol
coll€cilvoly compdsa lh€ Clty of Ngwoat'6bo,lc llnonclol dolemenlr. lhe comblnlm fund tlnonclol
stotemenli ore p€lanlod lor purposgsot qdclllonol onqvslsqnd oro not o r€qulr€d porl ol lhe boilc
fnonclol slolom6nlt. lh6 comunlng lund flnonclol dolemonL hove b€gn qrbJoct€dlo lhe oudning
proc6duret opdlod In lhg oudll ol lhe bodc flnoncbl slolomenbond, In our oplnlon, 016lol y sliolod
In oll molerlol r€sp€clsIn r6lollon to lhe boslcflnonclol tlol€monls lok6n os o whole.
/Jo"[..-.-
:f n o.t a-: Caq2a"!L
SARBACANE,
THORMON& COINPAI{Y
-2-
CIrY OF I{EW RK
STATEf,EIII OF I{ET ASIETS
DECETSER11.2OO5
Prlm|ll Gornrlxn rt
Go[mi|.nt
t
Bu.tn.t .{yD.
^.dvth.
Aclvth.
ASSETA
Cash6nd cash equiv.l€ni!
$
Ac.ounb ncaivabl€, mt
ous trm of'or gov€mmonb
$
---ro-F 3,W2
6Is'
Toblcumnt 8..t.
NoncumntArxt:
4,989,380
_
5.963,568
8,854,278
3,210,321
Conslruclicnin prc9rc33
Buildinge
Madjnery and Equipm6nt
--ar#f"+
l--EntlE-
461,321
9,0€7.529
3,783,248
$
330.000
055,875
39.235
PrBpaidli.ma and dstornrdohaQos
Tot l noncun nt[-t
!,44{t,878
7,415,920
'|,w7,2AA
253,303
-iSEzstt
---.d-
2oo5
1,910,199 t
17,083,:t49
5,r50,530
253,303
330,000
895,110
221
3,057,108
28,4fi,422
s,550,563
251.61
793,029
5,/too
--EEBfii --E#fii
a,7aa,127
r5,710,8{X
€,973.576
16,201,7U
8An,89O
----:a=Eo=iar
13,7n,4'0f
15,710,804
12,957,141
25,11€,0€2
4,0O5,211
-3--Es8-ZiEi-
13,fn,507
10.159,085
13,386,693
24,593,995
3,875.719
14'76
-----65Jd7tt3-
$ 103.922.8sO
uaa[lrEa
215.61K1
185,738
82,557
330,000
44,7W
Compons.iedabs€nces
ouo to otnff gov€m,ndnls
Accn €d int€rastparabto
3,914,i€
498,855
6,715
38,103
165,952
26,587
725.000
aA74
495.000
Olh€rcun rt liabiliiio!
Tot.l cumnt l||bllltlc
Noncur |t l||bltnt..:
Comp€rEat6dab6€rc€3
12,365
--T5e.oa3-
----sr8-Zs-tt
370,448
53.960
3,548
10,941
15,600.000
'103,4,92
3.375.000
Totrl noncunri
fol.l llrbll(c..
tt.bttttLr
3,745,448
15.972,059
21,354,8A8
5,093,571
rnv6sl€din epitat 8s6ta, n.t of rctat€dd.bl
Tot l lLblltl...nd
_
n t |'..tr
'19,167,547
31,91€,587
9.316,or|(t
28,.€3.567
FSSir;i3.-
10,415,679
423W.266
E-E3'6-E?iE-
Th€ sccompaniry nor.s ero an inroglatpad of rh€setinancjslsr.t€menF.
I
4,129,786
684,593
69,272
369,103
212,732
24,587
1,22O,OOO
6,474
12.3€5
----75d51r-
S
--
2,2A2,A1A
673,97A
67,61()
193,4,18
218,750
3€,468
1,215,000
a,471
4.6soJ-n
424,444
3,546
t0,941
19,175,000
39E,049
2,79
37,001
20,395,000
26,448,4s9
2-Eeaa-
51,0E4,134
49,441,4n
/r,s96,277
---lE#Hi --a#ltri
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BALANCE
STGEI
@vEilFttlL
FUro9
DECEXBER
li, ror'3
P.C.ct
ASSETS
C.dr aid e8h .qulvlLntt
a
oG lEn oh.. tu.ns
3af,417
I
1,550.000
552,41f
253,303
Fun.L
173.203 t
4,165,557
,ntll4
784,516
1.646,3,t1
814,871
405,$1
221 ---AJi-tz23.3ss-
z0ott
::@
1.325,168 3
7J41,806
1,8f ,298
253,303
a05,9al
22,O51
22,o'51
221
T-'o-iE3:ei6- t
355,517
?.751,152
i,zl2,3f6
251.&l
14,0e3
5,,100
10.r27_07s
ITB|UNE! AI{I) FUNOBAIA CE
t
lor.t
.utd..
151,2U
185,738
i,830.842
605,941
t
,
3,S50
2,f74,605
3,650
4,700,891
L!* 6nid€n.nt
P.*r a.d |!fulion
Tot l tund b.L'p.
Tot l ll.o||rd.. md turd b.l.nco
=**
t
-
s
16,612
130,000
12,06a
158,?00
256,1a5
353,25.1
195,433
1,740,@8
12,044 -.55676t
$.N7
------a$s-3Ef-
i,&|a,500
4{r619
515,711
72,t,030
153,222
4,400,4r0
46,619
535.711
f24,030
153,222
=*Et ;T*jesl-
Th. [email protected] mr.. er! .n hi.got tart ot t|@ nMntt t tt t mont!.
I
171.6€6
185,733
1,43),882
735,981
I
10,75s,9r0 t
6,4€4,586
rr0,303
195022
372,Xsf
131,:t03
39,041
f ,8f ,372
1{i,'fr{
R.coocttt.don ot th. AJ.nc. Sh..t-cov.nn
ntrl Fuad, to th. Srabri.nt o, t{.t A$.t
O.c.mb.r 31, 2005
Totrl Fund aahnca - cov.mmand
Fund.
7,819.5515
AmorJnl6r€pod€dfor gov€mm€ntetactMths in th€ stabm€nt of
n€t a66otsars dittd€rn bea$s:
Capitalalssb us€d in govdnm€ntatactivitiG a|r not tinanciatr6ourc€.
and, lh€.€'1o.6,a.. nor r6po.t€din lhe tund!. Atso exdudsd ,l€ $5AE.6:tl
ol Inl€rml 36rvc€ c€pdrt isssh ac6unlad for h ths ioloung lh€.
Intornals6rvic6tunds ar€ us6d by md|'g€mdi to dr€r€€ rh€ cGts of th€
op66lion of m€d1inry, r€t €te and buitdhg m€lntenanc€pmvid€dto oti€r
d€partmg{s ot th6 City on a costrsimbuEom€nrb6.is. Th€ aBssrsand
lisbiliti€. ot rba ht€md s€rvtcstund ts inctud€dln tho go/€rnmsnratac vitid
in tho 3lste.n€ntot n€t assei!
o|hsr loog t€.n *e€t! such as bond issuoco6G€ro not av€atdteto oav
ro. cun€nt p€iod srp€.d ur63ard. rjorctoro, rE d€t.fl€d in ths tu;g
Som€of th3 Towr16htp.s
rsv6||u6 wi b€ co €.tsd aftsr ysar_€ndbut are nol
ardlabt€ soon 6noughto pay tor tis cun'|t p€dod6o(p€nditur6sand
lhsr€rorod€ dgfarr€din ih€ thds.
22,4,1qw
710,637
14,766
1,830,605
Som€ ti6bititi6 616not du6 and payabb in th€ cln€nt p€rbd and llrsdorc
a.o not r€po.t€din tne tunds, Tho6etiabititiG co.tsistof:
Nct ..r.tr
Eon& Payabt€
Comp6nsat€dab€eoc€s
Acc.u€dint6r65tpayabte
of lowrnm.nta .ctlvt0..
Ths accompanyngnol66.F an int€gEt pa.t o{ th€.6 finandal stat.m€rns
{3,870,000)
(424,009)
CIIY OF NEWARK
STATEIEI'I OF REVEI{UE!,EIPENOIIURE! ^l{D CHAIIOESII{ FUI{D&{II{CES
GOVERI{f,EI'ITALFUI{D3
FORIHE YEAREXDEDDECEIAER 3I, 2OO!I
C.pltl
Prol.crr
O0r.r
@vrmmdt l
Fundt
REVEiIUES
1 3 , 5 6 3 . 7 5 3 S - $
2,2€r,U1
R@l .!lat€ lran€lsr
Lien.o3 and p{rnit!
Fi le3, torf.ib a.d c6ts
hl.r6€l dMd6& d! .anls
hl€rlovotnmonbi EwnuB
chr!.r b. svc.!
Subvontin - UnivGl9 of D€laMrc
243,789
r,329,526
1,594,150
95,112
309.545
1,3t0,tt6
--nffi
EXPEIIOITURES
G.n 6l C.v6mdn
52,95
44,422
1,566,071
25,235
109.935
27,fiO
2.W,77e
@,465
212,31E
1,631,959
34qn5
12,1ae
116,145
505,@0
157,089
2.003.617 --nfrr,4r6
----1ti-ia,o4o---ZlGin
(D.ncbne, ol dy.nu.r lurld.r) dp.ndllrtr
orH€R FTNXCnG aOURCE! lugEa,
[email protected]. tron tno 6€l€of catii.l a.6€t!
R.irding bdd3 tis{r€d
Paymsnlto bo rennd€dbondeicrow egdt
Ih€ 6cc@padylng mi6
(89,.{58)
@.n
Int gdt pa.t ot r!6.
fnancjat stat rnonb.
3,432,231
1,410.1t0
1,821,231
1,329,392
260,686
2.973€66
r,337,605
4,314,201
8,029,046
1,@,42f
349,ns
2,102,S16
220,9f
505,00o
t5?.089
2.@3,A21
---:p342F-
4,041,040
7,,|e1.990
4,4€9,92t
520.893
2.050.3s9
39,786
4€0,@
20a,92
1,279,A?1
---J0.€o-1Jo-i
(1,210,043)
(9,259,74a1
0:f'3,na)
2,11r,508
-
1,862,406
1436,692)
12,94f.274
(3.454,077)
22,731
13,268.700
15,114,2021
44,306
2,040,000
(2.0o5,000)
134,971
4,@5,920
r--+3#;T.,7636i-
b€. 3t
t
{1.962,537)
-----;FFFFFFFFFFFFFFFF.tid
---?.rrr-iir ----iaiiir
Totd oth.r f mmlry |ourc.r ud 0t.r
iltl ch.n9. In tund bd.rd
Fud bdand - Janlary I
Fundb.hno.. {D€ndt)- o6c
4,067,361
(3,021,385)
22.734
3,563.753
2,291,U1
243.799
1.529,526
1.02(t455
255,169
1,902.916
1.405.881
---rrj.r -,.,"r-,ir--#S# -###
4,314,?01
7,410,f26
3,028,460
Coomu.it O.v.k'Fno(
Cultu.6dd r.tcletton
Chsngsin tan €tuo of lnvostn€it
s
t
206,070
2,*2.411
3.109.031
--liiitsi
272,18
---iC"-i*
287.$!
7,279,&f
7,a)47,372
Clty ot Lw.d(
Racoiclll.don of Shtamant ol Ravanuaa,Erpandltu.rr Jrd Changa. In Flnd Bdrncaa ol
Gov.mnrnt l Fundr to th. St t m.nt ot Ac,{vtu..
For th. Y..r End.d D.c.mbcr 31. 2005
at Chang.3In FundBalancaa. Tot tGovamfiant tfunda
252,183
Amounbr6po.t€dfor govamrn€ntatactivid€sIn tho staiamontof activitios
alo dlitar€ntb€c€us6r
Govommental
tundsr€poncapitalouttaF as oxpandthiro3.How€v€r,
in lh6 stalementof actlvlll€s,the cost of thos€aslots (9,103,126) is eltocatsdov€r
th€ir$Umat6du3€tu1livesas dopr€cialion€rp€ns€(91.471,039).Thtsis '16 amount
by whichclepreciation
6xc66d€dcapii€toudaysin fio cur€nt p€riod.
632,087
R€v€nu6 in lh€ statomontof acttvitjesthetdo not p|ovid€c!fisnt financial
re8or,rc€3
ar€ not t€port€das r€v6nu63In th€iinda.
90,274
Tha net efi€ctof vadousmiscellan€ous
lransacljomInvolvlngc€pitata6s6ts
(1,o.,salos,IrEd€'ins,and donations)ts lo d€creas€n6(ass€ts_
(27,158)
R€paymontof debtprinclpalis an €)(p€ndttu€in the gov€mm€ntatfundB,
but th€ r6paymsntreducoslong-telmtiabititiesin th6 stat€mentof n6t ass€ts:
Bondorincioal
Accru€dintet€slpayable
:o5,0(,0
6,018
Th6 lasuanc€of long-t6m d€btprovidsscufl€ntfinancialresoorcosto gov6mm€nlal
i/nds, rf l€ th6 rspaymentot lh€ princtpalof tong.is.md6btconsum6tth€cln€nt
finsnclalr6sourc€3ol gov€mmsntalfunds, Notth€r!.ans&lton,ho*€v6r, hasanv€fi6cton
netaas€b. Also,govemmofllatfundsrgportth6 slfscl of bondissusncecostr wtt6nth€ dabtis
frst issued,wi€r€a6 thes€amounbar€ dsferr€dandemortiz€din the 6talomsntof
€ctivid€s.
(3,692)
Some6xp€ns€sr€port€din ihe stretemsnt
ot activl!€sdo nol requt.6th€ usg
of cunonlfinancidlr€sourc6sandlherofor€ar€ noi r€portedas €rDendltures
in lh€ govomri€otalfunds:
Componsat€d
ab€€nces
(23,239)
htemal €€rvicofund3are |]36dby manag€nEntto chgryefi€ costgof tho operEdon
of machinory,v6hicl66nd buitdtngmainl€nancoprovidedto otlsl d€Dadn;ts ol th€
Cityon a cosl-reifi$urs€msntbasts, Ths n6t Fvenu€ol c€riainactiviti€sot inteftal
s€rvicstun& b.aporled withgovemmontalactvtu63
58,986
Ctmg. h lLt A$.t.
of cov.mft.ntrt
Ac0vt .r
Thoaccomparrying
not€sar€ an integratpaft of thes€financjatslalefi€nts.
S
1.490.2t59
CITYOF TIEWARK
STATEflEI{T OF REVEI{UES,EXPENDITURES,
ANO C}tA GEg II{ FU'{O BATA}ICES. BUDGETAIID ACTUAL
GEIIERALFUID
Original
Budoet
REVE UES
Real €stat6- cuF€nt
Real sstat€- dolinquentand inter€st
R€al estele - tlansfer
$
Lic€ns€€and pe|mits
Fines,torigils and costs
lnt€rolt, divid€ndsand r6nts
Inl€rgovemmenlelrevenuss
Chargastor siicsdt€€5
Subvention- Univ€rsttyof Detaware
3,'|0,000
25.000
1,400,000
243,2*
1,40€,000
1,297,500
100,000
389,750
1,301,780
2(X,000
(BudgEiary
Basis)
(NegEtlv€)
3,526,776
36.977
2,291,841
28:i,799
1,529,526
1,594,150
s5,412
309,545
1,380.44€
11,252,472
EXPEI{DITURES
Cuneol:
G€n€ralgovarnment:
Fjnancod€partln€ol
Planning
Admlnlstration
L€glslaliv€
Judicial
Tolal g€n€ralgovemm€nt
Public6af6tyl
Euilding
1,774,203
719,n1
659,120
892,8€8
4,3s5.826
1,683,549
21,890
691,496
83s,702
331,564
14.201
(13,224)
11,Sn
801,84.1
549
123,526
296,650
(4.588)
(80,205)
78,660
1.30s,192
90,654
(52,119)
(32.376)
57,184
(21,718)
4't,625
956,273
6,755.544
7,711,A17
Totalpubticsaf€ty
$
(236l
(104,675)
(104,911)
Hlghwaysand streets
S6nitation
Totalpublicworks
Cultur€and recreallon
Nond€parlm€ntal:
Changoin fak valu€ot lnv€strn€nts
Tolel cxpandlturaa
17
60.465
17,310,640
Daflclancy ot rcvanuaaundar arpandlturc.
(7,32,5541
{€,058.r68)
(1,2U,78/d1
8.967,351
(3,021.385)
22,734
(7,973,gtt)
8,S67.381
(2,3,{O,385)
(7,2@l
97rl.300
3,110,840
2.085.751
Otfi.r Fln.nclng Sosr€.r (Ul..l
Appropriatcdtund betanco
Transfersln
Tran6f€.6Out
Proce€dsftom lh€ sale of capitalass€ls
Proc€od6froansale of bqds
Total othaafinanclng rourc.a and u.aa
949,555
2.078,913
3,028,488
2,0&.778
27,745
@,a27
88,372
(5,027)
7,973,954
(681,000)
30,000
5,968,710
N.i ch.ng.In fund b.l.nco
- JanuaryI
FundSalances
FundEatancos- Ooc€mber31
(89,458)
39,041
-t----ts7i7i
The accompantngnoles a.e an int€€ral part of thesofnancial slat€menls.
I
(89J58)
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CITYOF NEWARK
STATEIENT OF T{ETASSETS
FIDUCIARY
FUNDS
DECEIIBER
3I,2q'5
Ponalonand
Solt lnalaanca
Tru3l Fund
Aaaat!
Ca6handcashequivalents
Invostm€nt6
roceivable
Contdbutions
TotalAssgls
15,653
6,705,221
$
Ll.bllltl.o
Accountspayable
Total Liabilities
36.810,059
2.552
t{at Aaaott
A$ets heldin fusl for employo€polt emdoyment
benefits
Theaccompaning
not6sarean integralpartof lhosefinancial
stalements.
13
36,807,507
CITYOF TEWARK
STATETSEI{T
OF CHAI{GESI1{NETASSETS
FIDUCIARY
FUNDS
FORTHEYEARE DEDDECEI{BER
3I.2OO5
Ponalonrnd
golf Inau.anc.
Truat Fund
Addltlonr
Conhibutions:
Emplq/€rcontdbulions
Slateaid- polic€
EmploJ€a
Tolalcontributions
Invgstmenls:
Investmenl
earnings
s
1,253,304
231,254
369,212
1,853,770
45,496
Notincreas€
(dec.6as€)
in fak vafti€of investrn€nls
Totalinvoslment
eernings
Totaladditions
Deduc-tlont
B€nEfits
Claims
Adminislrative
exp€na€s
Tolal O€ductions
Ch.ngo In N.t Arlots
N€tA'lata . JanuaryI
t{€t Aarotr - D.cembar 31
2,23a28
2,27a,1U
4,'131.954
2,064,891
135,227
1,825,229
35,182,278
36,807,507
Th€accompaning
notesar€an int€gralpartof th€seflnancial
sial€menls.
14
CIIY OF NEWARK,
DEI.AWARE
NOTESIO THEFII'IANCIAISTAIEMENTS
NOIE I
SUMMARY
OFSIoNIFICANT
ACCOUNNNG
POUCIES
lto- -Clly ol Ncwork comdl.s wnh g6n€ro y occ6pted occounltng pdnctpbs (dAp),
GAAP Include, otl rebvont Govar*nenlol Accounflng Stondords Ooord (GASB)
pronounc€m6nls. lhe occounllng ond r6podtng fromowotk ond lh9 morg stgnillcont
occounllrlg pollclesore ctlscursodIn subs€quonlsubs€c ons of ihtsNoto.
FlnonclolR€podlnoEnlltu
Ih6 Clly of N€work,D6loworellhe 'ClM wo! lncoDoroled In 1652,undgrthe qovlslon! ol
lhe Slole ot D6lowor€. lh6 Ctty Operoiosunder o Cc,unc-Monog€r tolm ot gov6mm€nt
ond p.ovlclgsthe lollowlng sorylceso! oufDdzod by ltr chortgr: publlc sol6ty, streets,
€nllollon, uillllles, heollh ond soclol s6rytces, cufiurg ond focreo on. Dubllc
lmprov6m6nh,pionnlng ond zonlng,ond genelol odmlnlslrdllon.
Ihe Goiomm€nlol Accounltng Slondordi Boord esiobllsh€dlhs crllerb tor delomlnng
th9 oclMies, olgonlzolionsond tuncliohsot govenmenl lo b€ lnclud€d In ihe flnonc|ol
aloiom€nl! of th6 ropodhg enfliy. The c ledo us€d tn d€t€mtnlng whether such
orgonlzolkrni $ould b€ Included In the Clty.s fnonclol r€porling enll'y org fnonc|ol
ld,oldee:ndongl .€teclk n ot gov6mtngouthortty,destgnottonot monogom€nt,ob ny
lo Cgnflconlly Intluence op6rolion!, occountob fiy br nrcol mofiorr, sc-opeot oubllc
sorvlcoond sp€cloltlnonctngrelotlonshtpa.
lhe Clt hoa dotermlned lhol no othgr oolCd€ ogency m€ols the obov€ crilsdo qnd,
fh6r€to€, no olher ogency ho5been lncluded os o compon€nt unlt In the CIV! fnonclol
dolemonh. In oddltton, ths Clly ls not owqr6 ot ony enllly whlch wouLl ex€.ctsesucn
ovedghl whlch woutd r€sullIn th6 C[y belng conlider6d o component unlt ot the 6n fu.
Govommenl-Wde
dnd fund Flnonctot
Slolomonh
lh9 govommgnl-wlde tinonclol slolemonb (1.e.,lhe slotgment ot not ossels ond lh€
stqlemenlof chong€s In nei osigls)reporl Intomollon on oll ol lhe nonllducloryocfivllles
ot lhe Clly. Ellmlnottonsol lntcrfi$d oclvlt hov6 b6€n modo to mtnlmks the douob
counllng ol Inl€rnol oclkttt6!. covommontol ocflvntgt, whlch normollyore luppodeo Dy
t(uo3 ond Inl6rgov€mmenlol rev€nug!, ol€ repodod topotol6ly trom budftoss-lvoe
ocl9figs, whlch rely to o stgnlllconl€xt6nton t66sond chorger for aupport.
lhe rlolom€nl ot ocllvillg! (bmonslrolesihe d6gr€€ lo whlch lh6 dlrecl oxp€Nos ol o
glv6n tuncllon or s€gmenl or9 otf!€l by prcgrom.evgnugi. Dk€cl exp€ns6!oro lho6e
lhol oro cloorly ldenllttobte wjtrho sp€cnc funcion or logrn€nl. proglom rovenues
Include l) chorg.s to ct tlomeo who purchole, use or dllocty bon€til trom goods,
s6rvbesor prMl€gei provid€d by o tuncflon or s€gmont.ond 2) gronb ond conl lr ons
lhot or0 aeddclod to mo61ln9tho oF€rollonot or copttol @qul.€m6nlsof o lunc on or
!€qrn6nl. Toxs! or'!d gthgr llems not prop€dy Inclu<lodomong progom €venu€s ore
Epod€d Inilood os g€nofol r€venu€a.
-t5,
CIW Of N€WARK,OELAWART
NOIESIO THEFINANC|AISTAIEMEITTS
NOIE I
sUMtiiARY
oF SIGNIFICANI
ACCoUNnNcpO[CtEs {confd)
s€porot6 flnonclol stotremonts
o16p.ovtdd frorgovernmenbt runds,propri€iory,undsqnd
llductorytunds, even though th€ toit oro exctided trom |tro govi,;fi.i*tje
;nor..,
!|ol€mgnb, .Molor lndMduol govommonlol tunds ond molor indlvtduol enfeipA* f,rnOr
orar reponeo os s€po.ot€ column! In the fund finonctol stotemenls.
govornmgnlottunds or9 oggr€goied ond roport€d os nonmo,offuncL. tnAl r€molnlng
oOA on, rne
fund tlnonclol rtolemenb pr6s€nlIntelnolservtcetundsond ffducloryfun* OVfunJ fv!.
lhe gov6rnm6nt-wtcbtlnonctol stoljem6ntiore r€Frod6duslng lhe €conomb l€|lourcaa
mecBur€montbcur ohctthe occruol bo!l! of occounflng, os 016the prcpdelorytund
fiduclory tund itotiement. R€vsnu6s016 rocord€d itren eoneo o,iJ "rJ",id oncl
"r.
rocorcledol the tlme lloblllllosore Incur6d, regqfdlgssof the llmlng of na ddJ
"*n
ore r€cogntzed
os rsvenietn ne yeort", frrt iirey-oie-iou,.o.
l!y:l
fl9?Tty..tor:.
('fonl! om.s|m
or fl€ms(nonexchongekonsoclbns) ot6 r€cognEed os nav€nueos soon
or ol_glrgEI[y r€quremenh ImpGod by lhe provtd€rhovg bo€n loisfled. Aoency
repon onryosselsond ob lll6s,os ihey do not hovs o m€osurgm€nt,ocus buj ao funds
use,ne
occruorDostsol occounflng,
Ih€ govemmenlol fund flnonclot siolemenls ol9 €fror'6d ustng lhs currgnl llnohc|ql
r€touacosnr€oaulenl€nltocuaord the modfl6d occtuol bogs ol occoonflno. Rgveiua!
ora rocognEodqs soon 05 th6y b€como bolh m€osurobl6ond ovoloble, R-evenujs
ore
concdered to be ovo obli r they ore co ect€d wnhtnthe cunent pertJo, i*n .iiugn
iher6ql|er lo poy llobllnieJot lhe curr€nl p€rlod. Forgovernmentoifr^O-iyp".,
congclor.oll rov€nuesto bo ovotk bte Ir rroy o€ co eciod wtthln60 d.rys d;ti;iyr",fn. Cfry
6nd.. Rovenuesconstdor€dsuscepfitDle
trooccnrot Inauae property tco<ei,i;;;-&".,
fronchlsetox6s, c€nsos,Intered ond dtvtdend lncome, orio
ironh <si*iJeo iifr= ,ne
cur€nt ttscotyeor. onty tho por on of th6 spectotosressmendrecef"qOrJo;e
wtt;i;.s
cur6nl ffscolyeor ls con3ld6r€dlo b€ ,uscep ble to occr(rol ond recognfrJ oa i"""nuu
In the curonl ttscol ysor. Alt other r€vonue ltems ore constdeiii-;;;;;;;'"r"
ovolloblo only whgn cosh t! r€cslveclbv tho Clfu
Erp6ndllufesEre Fcorded wfign the relot€d t.ytd llot ly 13Incur€d (upon r€c6tpl
ol
gooda or !orvtca,), except for prtnclpot ond Intereston gen€rot tohg-d;
o"6r, "ilr.,
ono Juogmenl3,ond comp€nGlod ob3onc6!, whlch oI. r€cognl2cdo! axp€Mlrure!
to
tho extenl th€y hove motur€d. Generqt copfiol os!€ts ocq-ut, on3 o;6'r.;d;
",
exp€ndtturss In governmentot tundr. t-ong_t€lmd€bt t!sr6; ono *qrfrr-rJni
ii"",
clpllol l€o59s016r€porl€d os olh€r inonclng sources.
Ih€ clly leport! rhe to owlng molor gov6mmenid tunds:
- Ihb rund l! u.€d to occount tor the g€nerol operoing
E?nefqqllaC
octMlt€s o, th€
clly.. cenerot governm.nt, publc loiBty, pr.rbtb io|k, p"iij ".o-.J,iJ6"]
ono
,ud-lclctyotfber ore ftnonc€d lhroughlhtstund wtfir r6c€tptt tiom gBnoroi
pro-p"rfyt*".,
-tor
t|center ond pglmlts, Invgtlm€nt lnt..et, flnes, cnorger
cuir"ni "!.uicrr,
Inl€rgov€lnmenlolond olh€r revenue,
-t6-
CITYOFNEWARK.
DEIAWARE
NOIESTOI}IE F}IANCIJAI
STAIEMENI;
NOIE I
Summ6 ot SldnlllcontAcco{lnllnoPolctos(cont'd)
Cdottiot Prot€ctaFund - Ihls fund b us€d to occounl to. iho d€Cgn, conslrucflononcl
lmp.ovem€nl ot Clly buttdhgc, lond lmprovomeots,ond ltro purchosa ond r6ptoc€mgntolveHclss.mochtneryonal
equlpment.
Ihe Clly repod6lh€ tollowlngmojor proprletoayfundsj
Ebctrb Fund- Usedto occounl for the ope@llonot on €l€cHc dtahlbullonsysl€.n,
\l/ot€r Fund - Usgdto occounl lor the operoflonot o wqter suppv system.
lgwglEllld - t s6d 1ooccounl tor the opero on ot o s€wog6co oclton sysi6m.
Pgllog-EUOlL-Usedto occount tor the operotionot o muntctpotpo*tng tot sws.n.
lhe Clty olso r6portsthe ic[owtng tund tpe3:
lnlemol SeMco Fund - lhls fund ls usad lo occounl tor lhe operqfion of mochlnory,
vehicb qnd b(Jlldlngmolnlenonce provld€d lo olhe, deportmonh of the Clly on o
cosl'relmbuFemenlboCs,
P€n{on lhJrl Fund - Ihls lund ls ur6d lo occouni tor th€ ossoh h€ld by ths pon5bn
progrom In o lrus'leocopoclty for lhe omptoyoesot the
Clty. lhe p€rubn progrom,
whlch ls pod ot the Clt'3 tegot 6n1ty, 6 o stngte-emptoyerdsflned b€nefi pe-nsbn
plon lhdl provldesb€nefltt to Cltyemployeei.
Self-lnsuroncoIrud Fund - ThtEfund occounls tor posl€mpl,oymenlb€n9ffitspold on
beholt of rellre€sot l'\€ Clty.
AII gov€rnmenlol ond busines-typgocfivlfle! ond gnlerpdlg tunds of th6 CtV tollorv
FlhonclclAccounting StondordrBoord(FAS8)
Stotomonlsond Intelp.otqiom tssu€doh
d Lr€loreNovomber30, 1969,Accounthg prtnctplo6Boord Optntoruond Accounflng
R€a€orchBulbllns,unt€s6thosepronounc€mgnlsconf ct wlfh GASSpronouncemenli.
fh€ Cliy olso hqa lho option lo lo ow lubr€quenl ptuole-s€ctor gul€lrrce
tor lls
-but
builnesr-type octlvlllos ond 6ntelpds6functswllh cerloln llmltotions,
hos 9t6ct€d
nol lo do to.
Wlh llmll€d exc€pllon,, lho ofl€cls ot Iniorfundocflvtiy hove b€on e mlnolg<tllom lhg
govemmentyrlde flnonclqt doiamgntr. ExcepflonsIncludo chqrgoa by ono gov€mrnontol luncllon lo onoth6r wh6r0aoNlcoshov6 bo€n govtd€d. Etimlnollonot thesc
chorget woilld dlslort the dlr€ct coctr ond progfom revonuos.gpod6d foalh6 vo ru!
funclbru.
-17-
CITYOFNEWAiK,DEI.AWARE
NOIESIO IHEFIMNC|AISIAIEMEI.fiS
NOTEI
portctEs (confd)
suMtd RYOf S|GN|F|CANTACCOUNnNG
Roprl6tory fund6 dtsthgutrh operoflng rgvcnua! ond exponseslroft nonoperollng
ll€m& Opgroling l6vonu6sqnd expotu$ gon€roly r€6utttrom p.ovldlng servtcesonO
pro<luchg ond dellve ng goods In coolleclton wlth o paoprtoloryfu-nd,sprtncloot
ongolng op€rollons. lhe princtpol op€rollng r€venuot ot tho d;hb, wodr, !€for
ond pofing paoprl9toryfundsond lh6 motnienonc0Inlolnol seryicefund oro chorq€s
to ouatom€Gtor solsr ortd s€.vlces. Opercdingexponsa tor €nterprtlg ond lnl6;ol
sg lce lunda Include lhe corl ot sotei ond seNlc6s, odmlnlaLolivo6xp6l}r€s ono
<leprgclollonon copllol osrgls. All r€venuosond €xp€n6e6nol mg€ltng thtsdeflnlton
ote r€poded os nonoporqllng|evenueaond €xpons€a.
Whsn bolh resttcred or|d unro.rrlcl€d rosourcosof€ ovoltoble lor ulo In c6rloth
prc€roms, ll ls lhe Clt's po cy lo oppty cosl_r€lmbul!€m€nt
Cfonl r€,olrc€s flrsi to
rnos6 progroms,to owed by tjond proceods, cot€gortcol btock gronlr ond lh€n by
gengrol levonuei, os they ore n€€d6d.
CoshAnd CoshEoulvotonts
Forlhe purposeot lt|e rtolomeni ol cosh flows,th€ propdetoryfundscon tderoll hlqhtv
llquld Inverlm6nlswith on odgtnotmotudt ot thre6 monthsor tesswhsn purctrose; ,o
be cosh €qulvotenta.
Alowonco ForDoubtlulAccounls
Th€Cliy ot Nswork'swoler, s€wg|ond €bchlc ufllt or o)llod6nca vory smolllo5s€strom
uhcollscllblg occounls. Woter ond sgworlo6s consfitutoo lt€n ogolnst 16olotooertv
ond (lsuollycon be co ect€d h tu \r,h€n fis trondo6. Accordhgt. on offo*i.,JJroi
doublful occo_unhls tund€d onnuolly ol lhs rqlg ot .l per"ent-oi onnuoi,*enuei,
6xcludlng odlt$lm€nl, penotiles ond mlscelbnoour r6v9nudl.
ffrfs omouni
opproxlmoiel ocluol lo3e€s,Only bobncos thol remotnotier to( solgsqrq wtllt9n of,
eoch y€or. El€clrlclo6s do oot coorflfut€ o ll6n; howev€r,molntenohceof oO*uJ"
cu9omor ctepodta,monthly bl tng ond d lgsnt co eclion pr@oduaosmtnlmLeloss€s
nom unco ocltbi€ occounL. Accordlngty, on olowqnce tor doubtfut occounls ts
tundod onnuotlyol the |ote of .2 porcenl ot onnuol r6v€nuos,o(cludlng oaF*mJnf,
ponolllesond mllcollon€ousrevenusa.lhtr omountopproxtmolerffre Ciirs
dcfuoifosi
6xp€derc6.
coniotnlng ctos€doccounls or€ molnlolnod tor o poriod ot
_Recgfuobtes
lve y€ora. Eoch y€or oll occounh trom the otdosl ygor on record ore wdfien gf,
ogohst th6 ollowonco. As ol Docembor 31, 2OOS,the ollowonce tor ooubliui
occount!omounlodto Sll7,173 In ih6 Et€ctaic
Fund,S2g,O49In
th6 SowerFundond
$2| ,7uOIn the Wot€rFund.
Inv6nlori6sAnd Preooldll€ms
Inveniod65.of propd€tory lurE fypes ore volu€d ot overog€ cosl. Th6 cosls ol
gowmmonld fund,tpe Invenlodesorg record€d os expendttureswhen consumod
rolhor lhon when purchoied. Cedoln poymentsto vondori rellecl costsoppffcoOiefJ
fulureoccounllng psrtodi ohctole recordedos plepold llems.
-t8-
CIWOFNEWARI(,
DETAWARE
NOTES
TOIHEFIMNCT STA'IEM€N]S
NOIE ]
SUMITI
RYOFSIGNIFICANIACCOUNnNG
(contd)
POUC|ES
Copllol Ass€ls
Codlol o$ets Includtngpropgrt, ptont ond equtp.n€ntore ropoded In the opp cqbt€
govelnmenlol or bualnels-lypaoctlvilles columns In lhe gov€mmenl-wtdgllnohcbl
riolomenls. Ih€ Cty hos donn€d copllol ossglsos ossetsvrllh o mtntmumcosl ot
$3,(x)0 dnd on esllmot€d usefutltt€ In 6xcessot one yeor, The Cfiy reporh lntloslructur€o$els on o n6lwor*ond subsystembods. Accordlngly,th6 omounlssp€nltol
llro cohrlrucllon oaocqulsilbn of Infroslrucfurgo,s€ls qr€ copllolb€d ond looort€d ln
lh6 gov€mm€nl-Wd€flnonclql itolomenls rggordleis ol th€h omounl. Cogllot olsols
moy tre purchos€d or conslnrcledom ore r€cordod ol cosl. Donotod copnol oSrelt
oro r6cord€d ol eillmoled fok volu6 ol lh€ dot9 ol dooo on. Ih6 costr ol normot
rnolnlenonce ond repolls thol do nol odd lo the volue ol lhe ossei or mol€rlolly
exlond lhg o9s€l'sllte or€ nol coollollz€d.
Codtql osrgis ol lhe CIV ol9 dgpaeclot€d ustng tho stotghlllno melfbd over lh6
€slLnol€d usoful llv6s ol lhe rcloled o3s6L. lh6 Cfy g6nero y us6aih9 lollovrlng
osllmoied uselul llv€s unle$ on o,!€t! llte hos boon odjusted bosad on octuol
6xDgd6nc6i
Bulldlngs
ElecttlcSyslom
SoworSyal€m
WoterSystgm
lmptovem€nis
Equlpm6nl
20-40y6ors
I &30 yeors
50 y€ort
2G50 y6ors
I G20 y€ors
5-10y€ors
Comoen6ql6dAbsences
Clly €mployees eorn vocollon qnd slck leovo depgndlng on lhek lenglh ot aevlca.
Slck lsove ls occumulol6d oi lhe lolo ot l5 doyt por y€or. Any unuled rlck logvg ls
pold onnuolly ol lh6 lqle ot ono doy for everythroe doys occumuloled In 6xc€srot 90
doys. Employeoshove no ve,ted Into.€stIn unu36dltck leovo ot tomlnollon ond.
(rccordlngly, lh€ Clty hos no ,uch ttlbi ty. Altsr I Oy€on ot seMce. employe€! moy
coray foMord up lo two w6ok! ot vocolton me whlch, lt unused,ts pold ot llm€ oj
l6oving lh€ Clly. Co.np€.$olory limg li occumuloisd os 6oln€d, wllh onv unus€d
omounlsb€lng pold ot tlme ot toovlngth6 Clly.
Lono-T6mObllootlons
In lh€ gov€mmenl-wldeflnonclol 3lolem€nhond tho paopd€torylund tpos h th6 fund
flnonclol diol6menls.long-lormd€bl ond olher long-lerm ob goiions ore Eporl€d os
lloblllll€! In tho oppllcqble govemmonliol ocflvll6t, bushestvpo octMlios or
paoprl9lorytund lyp6 slolemontot net oss6ts. Bond promturn!ond ct/rcounb,os well
os l auonce cosls. or9 datefiod ond omodlz€dovgr lh6 llte ot th6 bonds uslrlg th6
oltocllv9 Infered roto mothod. Bondr poyoble or9 Gported net ot lh€ oppllcoblo
bond premlum or dbcothl. Bond lssuoncocostsore reporl€d 03 d€terFd chorgeg
ond omorllted over lh€ lgrm ot lho r€loted ctett.
-t9-
CIWOf NEWARK.
OEIAWARE
NOIESTOIHEFIMNCIA!STATEMEN$
NOTEI
StMli[ PYOFSIGNIFICANTACCOUN|INC
(con]d)
POI-|C|ES
In the fund linonclql slolemgnF,govslnmentol fund typ€6 rocognlzebond plemtumi,
dkcounls ond bond ls$rorrc€ colt dudng the cq.ent llnonclol psdod. Ihe foca
omount of debl li3ugd 15repodod os olher ftnonclng sourcas. paemlumsrecetuodon
debl lasuonces016 roporiBd o! olhor flnonclng sources whlle dllcdJnls on debl
lttuonc€s ore ropoatedoa olhet flnonclng u!6s. lssuonc6 cotls, wlreih€r ot nol
wllhheld trom lhe ocluol debl proce6d! lecelved, o16 roporlgd os d6bt setvlce
expendilut€s.
N6l AB!6tsAnd FundEoullv
lhs dllt€€rc6 b€lw69o tund o3selsond lloblttttosls "N6t Aglsts' on the gov€rnmontwld6. ploprlalory ond llduclrry lund slolemgnt!ond "FundBotonc6"on govonm€nlor
fund sl,oiamgnli. N€l Assekor€ closttl€d o! 'lnt/et€d ln Coplol Ais€t!. Nsl ol Rolol€o
D6bl ' l€grolly'Resticl€d' tor o sp€cltlc purposo,or .Unrosldclod'ond ovollobl€ for
opF[oprbllon lor lhe gsn6rol purpos€sol lhe fund.
In lh6 govelnmenlol flnd flnonclol rlolemonls,rosotvotbnsol tuhd bolonco rop.€s9nl
omounl9lhol o€ legolly rostrlcledby outsE6 porflostor uso tof d sp€clflc purpo6€or
oro olh€twlsonol ovollobl6 tor opprop ollon. Dostgnollonaol tund bolonce reprosenl
,eniollve monog€menidons lhol or€ luq€d b chongo.
Eg!g$L!crg!
Properv loxes otloch os on gntofceobl€ ll€n on prop€av wh€n levl6d. Tqes ore
l€vled on July I ond qr€ poyobl€ on of belorg Septombgr30. Tox6sDold ofter th€
poyoblo dolg o,€ osross€do tlve p€rcant ponolty ior nonpoymentond one ond onoholt porcent Inlereslp€r month th9r€otler. TheClty b|l|! ond colbcts ltt own gop€rty
ldxer Clly paoporlylor revohue! ol€ r€cognlz9d on o pa9 rqlo bosls. Oellnquenl
loxes o.g conCdered fulty colloctlbls ond. th€retor€,no otlowonco tor uncolbc bt€
ioxgs la provlded. lhe properly lox 1016tor 2m5 vros45 conls p€r Slm ot osr€s!€d
lJseOl Esllmol€sIn lhe PreoorollonOl FlnonclolStotem€nts
lh€ pfgporollon ol tlnonclol dolgmentr In contomlt wllh g€ncrolly occaplad
occounllng prlnclpleargquhosmonogementlo moke eltimoloa ond oaaumpllon!thol
oll€ct c€.loin repoded omounls ond dlsclosqre!. Accordlhgly, ocluol rgsultacould
dltt€r lrom lhos6osllmoles.
NOIE 2
STEWARDSHIPCOMPTIANCE
ANDACCOUMAXITMY
EUDG€I'trYINFORMAIION
Iho CIV lollows lhos€ procedurosIn ostobttlhtngthe budgetory doto rofl€cl€d 1lrihe
llnonclol alol€menlsl
-20-
CIIYOf NEWARK,
OETAWARE
NOIESIO IHEFIMNCIAI,STA'IEMENIS
NOIE 2
slEwARpsHtP.
coMPtrANcEANOACCOUNTAB|TfiY
(CONTD)
o.
Formol budgElory Intggrotion 15omployed o! o monog€m€nl coolrct clovlc€
durlng lhg y€or tor lh€ Generol Fund. lhts budget ls odoptod on o bosts
consl ,gr wllh gatnorotty@c6pled occounling prlnclplos.
b.
lh€ Clty Councll odopls t€gol onnuol budggts tor the G€n€rol Fund,propdglory
Funds, ce oln Speclol Rovenuetunds dnd the Debt SgMce Fund. lhe Cliy
Councll olso odopts t€gol proloct length budgols lor tb Copllot prolgctaFundr
ond cedoln SpeclotR€venugFunds. Stnce proJ6ctp€do<ti moy dtfier trom lhe
Cfiy's fl3col yoor, q cornpo 6on ot bldg€iory Inlormoflon for the combln€q
Copltol Prolocls Fundr ond cedoln Spgclol Revanue Funds woutd rrot be
|neqnlnglul ond hos nol E€en presanied In lha occomponylng tkrdnclol
slol6menls,
c.
lhe Clty Monoger ls oulhodredlo lronslsr b{dggl omounL b€hre€n deporlm6nls
wllhln ony lund; however,ony rovlslonslhol oner lhe totot opproprlqitom of on,
lund mud be opprov€d by the Clty Counc , Thor€toro,th€ lov6t ot budgator,
respondbilltyls by iolol opproprloltona;howevor,tor repod Furpose,,thtstev6lhos
been gxponal€dlo o tuncllonotbosts.
d.
Unusodopp.oprlollonstor oll ol lhg obovg onnuolly budg€lod tund! totrio ot y€or
end.
e.
lh€ budge, omounh lhown In lho ffnonclol slolemgnl! ore lh€ flnot oulhoriEd
omounL or reMs€ddurlngih€ yeor.
Exoendlluteio'y6l Aoorco ollons
tor lhe yeor end€d Dec€mbd 31, 2005,expendllur€sexc€gd€d qppaoptiollonrIn lhe
puulc rotet depodmenlot lho g€noroltund by $104,91tond In ,he cunureono
recr€ollon depqrlmsnl of lhe gongrot tund by S5,027. lh€s6 ov€r-expendllureswers
lundod by gr€oler lhon onllclpotod fevenuesIn the g€nerot tund.
Detlcll Fundtoullv
Ihe Gengrol Fund hod o d€lictt fund boljrlce ot $50,417 os ot Docomb€r3t, Zms.
Extoordlnoryclrcumslonca!r6ull6d In operottnglorge! In thg ol€clrlc ond aetverulllity
tunalslhol llmlled cosh ovolloblo fo. op€roting trongtersthol typlco y supporlgonerol
gowmmentol ocllvlflga.
NOIE 3
CASH.CASHEOUIVA|.ENTS
ANDITMSIMENIS
D6ooslls
Curtodlol crodll rlskls ths drkihol In tho event ot o bonk tollur6,lh€ Clty.t deposlbmoy
nol tlo r6iumed. TheClly doos not hove o w ll€n pollcy tor cudodtol crodlt rtsk, Al
December 3l, 2005, lh€ corrytng omount ot lhe C[y,s cosh occouhls ond colh on
-21 -
CIIYOf NEWAR(,
DEI.AWARE
NOIESTOIH: FIMNCIAISTA'IEMENTS
NOIE 3
(cont'd)
CASH.CASHEOUIVALENTS
ANDIIIVESIMENTS
hond wqs St,925,852.ll|9 bonk botonceswe.€ $t,493,46O.Ot the bonkboloncr,,
S2O0,q)0wor covo@d by foderol DeposltoryInruaorcg. lhe r6mqlnlng bolonce ot
S1,293,460 wqs s€cur€d by collolerol conslsling ot unln,ulod qrd unr€glstered
lrw€slmonlshgld by tho ptodgtngttnonclolInsflfuflonbul not In lhe Clly's nom6.
Theobovo does nol Includ6ponConfund depos s r6fl6cted ln Not69.
Investm€nls
lh€ Clly's Inveslmenlsore repodod ot toh volls. lhe Clly ls oulhodzedlo Invesllh
t nlled Sloijesgov€mmgnl!€curltl€s:t€defol ogerrcy s€cuallles;cedmcobs of depo6ll,
llme deposlts ond bonkeG occ6ptdnce!; cofporol9 debl lnstrumgnb:r6Durchos6
ogroem6nk; money mork€l mufuot tunds;th6 pooted Investm€ntfund tnown oa lhe
D6lowqrg Locol Governm€nl Inv€6tmenlpoot (DELG|Aqs oultloriz€d bry nl|6 29,
Chopler l2 ol lhe Oelowor€Code; munlclpolobllgollonsthot or€ ro& In ollhorot lho
lwo hlghed rollng cof€gode3by o nolionotlyGcognlz€d rollng og6.lcy; ond guoron.
l€€d Invedmenl coni.ocls. Amountsthoi moy be Inv€slod In ony one ot thea€
cologorles ore suqecl lo porc€ntoge llmloflons os sel todh In th€ C[v's witten
Inv€slmonlpollcy.
Ar ol D€cember31, 2005,th6 Cttyhod the tollowtngInvoslmentsl
Inv€stmenlMetudti€6rin vearst
LeaaThan OnotoFlve StloTen Mor.Than
Fak value
yG€I!
OneY6sr
Tanyssrs
Y9cI9
U.S.GowrnmanlS€c|ritl6. 12,621,627 S1,317,482g 1,307.348 S
- S
FederafAqency
S€orrjties
La52,624 2,OU,AU
7,5O0,21a
117,526
CorporateNoles
1,737,533 1,215,qA
{el.q's
Corllfic€les
ot Oepo3lt
4,353,638 349,5€1 Z 2O7,Ag7 1,424,121 322,0{16
Mon6yFunds
185,661
1a5,661
Inlg8tmenlTvoe
TOTAL
018,59.|,8831s,173,0€6 511,507,91191,424,12. t 4E9.s82
lnveslmenh In t nlled Slolos Governm€nlSecu.lfl€5,Federol Agency S6cunflsaond
Cedlflcoi€sot Depoill 016 lnsuFd, r€gki6red, of hetd by the Cfry or lls ogent In lh6
Cllys nomg.
Crodlt Rlsk
Iho Cft'yhor no pollcy €gqrdlng cr€dlt riskto. U.S.GovemmentSecurlll€sor Fodolol
Agency Sgcurllles.
lh€ CIV'Slnv6lm6nls In U.S.cov6rnm6ntsecuritlcs(U.S.Ilgosrrrynoles)ore loi6ct AAA
by Slondord & Poor! os ot Oecembor31, 2005. fh6 ClV.! Inv€stmenl!In tod€rol
og€ncy ,ocurillos or€ compalssdot Fedorcl Homo Loon Mortgoge Corporoflon
(FroddleMoc), F€d€rolHom€Loongonk(fHl-),Fedorottorm CrqcfitBonk!ond F€d9rol
Nollonol Mortgoge Assoclolloa(FNlrA secudllos. lh€se s€curlll€sore roled AA\ bv
Slondord& Poorsos ot Decombsr3l , 2005.
- 22-
CIWOf NEWARK,
D€I.AWAPE
NOTES
TOIH€ FIMNCIAISTAIEMENTS
NOTE3
CASH.CASHEAlJVATENTS
ANp II{VESTMCNTS
(cont'd)
lhe Clt's InvgalmonkIn clErolole nolioaore rot€d AA by SfiCndord& Poo/s oa ot
D€cembef31, 2005.
lnl6r6slRol6 Rlsk
Inlerosl ,ole dsk ls lhe pocllblllt lhol on Inleroslrdte chonge coutatoclvers€lyoltgcl
on Invg$menl'slok volue.
Ihe Cltl Inveshnenlpollcy r€qordlng mox|mummoludly of Invejm€nls |6qutrerth€
molnl9nonc6 ot od€quole llquldlv to ms€t coah tlow ne€rt5 ol lh€ Cllv, lhs
po tollo ls truclur6d In o monngr lhol ansur€slufttclont cosh ta ovolloble to moet
onficlpotgd llquldlv ng€d!. Ihe porfollo l! Inwsicd In p€mlltod Inveitmontswlrh
o sljolgd molurily ol no moro lhon tlve y€or6 frcm lhe dote ot pufchos€ unlossthe
Eocurllyls molched lo o specltlc obllgo on or dobt ot tho C[y. To cont ot voto lh
ot the porltollo, lhe Clly delermln€s o durotlon iorgot for h€ podfolio, not to
cxc66cllhr€6 y€ors.
CuslodlolCredll Rlsk
Cu5lodlol credll rlsk ls lhe 5k lhot In lhe evgnl ot follure ot the counlsrporty, the
Clly wlll nol be oble lo lecover lh€ volug ot lts Inv6dm6nh or collol€rot recudllos
lhol ore ln th6 possesslon
of on outsldeporty.
A,l Inv€dmenl s€curillespurchosed by lh€ Ctty of held os collolerol on deDoslls
or Invetlmgnlsore held In ihlrdfody sot€ke€ptngot o quo fled flnonctot Ins fullor,
lhol l! nol o counleporly lo lho Invoslmenitronsoctlon.
Al socurltlesIn ih6 Clly Inveslmeniporttollo o16 hold In ihe nom€ of lhe CIV ond
ore lroe ond cl€orot ony lien,
Appoprlote Clt otllclolr ond roprelenbtve! ol lhe depollory responrtbl6for. or In
ony monn6r Involvod wllh, lho sol6k0eplng ond custody proc6ss ot lhe Clty qro
bond€d.
Concenhollon
ol C€dlt Rlsk
CorEgnfollon ot cr€dll rlst lr the Inobfity to r€covgrlhe vqtu€ ot d6fro9ls,tnveilmonts
o. collolorol secu lles In lh6 possosslonot on outslde porv co6ed by o lqck ol
dtuersltlcolion(lnv€slmgnlrocquk€d trom o Cngb tssu€.|.
Itl€ Cliyl portlollr ls dtueBlll€dlo lllnll €xposuroio ohy on€ trau6f. No mor6 ihon
tlvg p€rc€nl ol lhe Cltl porfiollo l! InvostodIn tha recurlltesot ony dn9l9 llsu€awlth
lhe folkrwlngexcepllons:
U,S,Taeosurv
Eoch tederql oo€ncy
Tlm€d€posllslully Insurodby FDIC/FSUC
-23-
I 00oAmoxlmum
25%moxlmum
l0% moxlmum
CITYOF NEWARK,OELAWARE
NO'IESTOTHEFIMNC|AI STAIEMENTS
NOTE3
CASH.CASHEoUlr'A[ENrSANp Ii{VESTM€NTS(cont'd)
Edch r€purcho!€ogao€m€nlcounleFody
Monoymorketmutuoltund
D:LGIP
25%moxlmum
25% moxllnum
25%modmum
Inv6lm€nls ln bsuels lhol repres€nl tlv6 p€rc€nl ot more ot lolol Inveatm6nlsol
D€c€mber31, 2005ore os lollows:
Inv..tn.nulnuer
ConcantndonRl.l
Dlttrlbudon
fi!!llrl!!
$2,38.r,307
2,065.853
2,965,531
2,276,935
2,424,427
1,737,933
a,353,A38
130,6
FoderalHomeLoanMorlgageCoD
F€d6r6lHomr LoanBank
Fecl6rel
FarmCrodllBrnks
UnilodSlatosGov€mmentS€drriti€g
CorporateNot6s
Cerliflc5tosof Daposil
NOTE 4
'noa
1E%
12.4
11%
e%
23.4
CAPITAL
ASSETS
lh€ copltol oslol octivlty lor lhe yeor end€d Decemb€r 31, 2O0Swos 03 follows:
B.timidg
Baloe
EndinS
hcrer!€s
Dc$ear.s
Cov.rmdral Activirid
Crpitll A$eh Not B.int D.p.ccialed:
s 4,9E9,1E0
S
Total CapitalAssetrNot Beinr Depr.cist d
Capiial AssctsB€ingD.prcciated:
Buildings
Ml.hin6y andcquiphcnt
Tot l CapitalAsslts Bcing Dcprcciarcd
t !r rccumulatld dcptuiation forl
Buildiryr
-
J
9,t37,252 t14,l9l
9,2Er,443
|,597,t87
E24,2E9
t2,521,476
8.382.11081.114.646 (497,1t4) 9.0t9.940
(197,tt4) 30,822.859
29,2t6,E47 ?,t03,126
3,U2.@6
255,269
3,370.4E3 296,7t5
5.360.520 919.055
tt.173.609 l.47l.Ol9
Ma.ltndy ord .quipmdtt
Totrl Aeumulatcd D.D@iarion
Totd C.pit l Ars€rsBcing DcprcciaEdN.t
Cnv.lmmtal Adivirics CapiralAs.rs, Na
BBin6-we Acrivitics
Capibl Asst3 Not B.ing D+rcciat.d:
lrd
CoD8lruction-i|Fprog.*s
Total Capibi A$ct! Nor BcingDcpr@ialcd
- 21-
s 4.989_380
4.9E9,1E0
-
3,297,815
3,661,t9E
(459.9161 5.t09.6t9
1469-956t 12.771.592
t?.443238 632.087
(27.15Et I E,048,167
$22.432,6tEt 632.0E7 $ (27.158)123.037.J47
- t
I t,7t8,r27 S
10.rt9.095 5.5J1,?09
18,947,222 SJ,5fl,709 t
$ E.7tE,t27
t5.710.t04
J24.498.911
CITYOf NEWARK,
DETAWANE
NO'IESIO II{E FIMNCIAI STAIEMENTS
NOIE 4
CAPIIALASSETS(confd)
Bcgimidg
Dccreases
240,639
745,172
25t.420
|,23?,531
(lt4.424\
t5,E60,E90
31,823,954
2.0t8.81E
(1f1,824)
49.703.682
(l t4,82{)
0 f4,E24)
E,tt?,3t4
15,552,170
t.t63.94E
25.6t3.4J2
B8in6$t@ Activities (@ntd)
Clpital Ass.ls Bcing Dcprcided:
BuildiDts
Impov.6ml!
M&hincry 4d cquipmcnt
Totrl CapitalAss.ls B€iry D.p@iarcd
f5,620:51
31,07E,482
1,882,242
48,tE0,95
Lcs Eeunularcd deprcci3riontor:
Buildings
Imprcv6ncnti
M&hincry dd cquipm.nt
Tot!.l [email protected] D€pr€iarion
E,32E:05
559,t09
14,Et1.t95 750,975
I,02E,:l0E 250,364
24,t67,808 t,J60,rt4E
ToralCapiirt ArsctsBeinSDcFlciar.d, N.t
24,413,t67
auliness-t?c Aclivitics CapilaiAsscrs,Nc!
EndinS
Bal&e
Incr66
(122,9171
24.090.250
l{J,160,1E9$t,228,?92J-J4E.5E9.lEt
Dopr€clollon €xp9n66 wos chorg€d lo lhe funclions os followsl
Gencrd Cov€rnm€nt
Public Safety
Culturcand Rccr.ation
Capitslassetshcld by th. govcmm€ntsintemaise*icc fimdssrc
charScdto th€ variousfunctionsbarcdon th€irusage
Total D€prcciationExpeNc - GovcrnDcntalAcriviaics
Busincss-typ€
ActiviliB:
El€ctric
Parking
- Busincss-tnc
TolaLD€p.ccialion
Expensc
Activiti€s
NOIE 5
366,329
543,191
160,686
67,598
!-1ry_
650,149
60E,459
201,6t6
94,204
!]4t!.
LONG.TERM
DTET
GonerolOblloollon Bonds
Gan6fol ottlgolloh bond! hove beon llsu6d lor boih govemmsnlol ond blJCness-typ€
octlvnlos. All bonds oulslondlngon D€cembor31, 2@5 ore generol obltgoton debt
qrppoded by the full folth ond cGdll ot lh6 Clt.
lhe 2000 Ssri€sG€r|€rol Obllgollon Bondsvrgre l$ued lo podiolly r€imbu|r€ fundt
odvonced tor lhe ocqulCllonol o .es€rvolrCt€ oncl odJocsnl op6n ,poco ond lo Eroy
lh€ coib ot lssulhg the bonda. Th6 bonds moturo S€ptgmbor '1, 2003 through
Sgplombgrl, 2020 ond boor Inlgreslrolig! lhol vory lrom 4.6 p€rcenl lo 5.1 porcenl,
poyoble Morch I ond Soplemb6rL Proporv l,ox rav€nue. wlll b€ usod lo poy lh€
prlnclpolondlniio€sidue on lho bond!.
-25-
CIW OF NEWARK,
DEI.AWARE
NOTESIO IHI FIMNCTALSTAIEMEI{TS
NOIE 5
LONG-IIRMDEST(confd)
lhe 2q)2 S6rk$ conerol Obllgollon Bonatsw6r6 lssu€d to prjovlct€tuftls lor ih6
conrhucllon of o wql€r reagfiolrond SouthWellfletdwqter lreolmenl plont ond b ;
tho co5t5 of lssulngthe bondr. lhe tlonds mofur€ S€plombq 15. 2OO3lhrouo;
Soplsmb€r 15, 2022 oN fui Interestot rotos thot vory trom Z.O percEnt fo liS
pgrc6nl, poyoblo Moach15ond SeptemberI S, Wol€rsoMeo teeswllt ir useO poy
to
lho p.lnclpol ond Inle€st due on tho bor|d!.
lhe 2m4 56.l€6A Gon€rolObltOoflootonds wer€ lssuedtjoprovtdgfun& n€celsorvlor
the cur.onl refundtDgot lh6 Cfiy,sc9n€aolObltgo on 8onds,Soai6s
ot 1993. llrs Lron.k
motureJohuory15,2@5 lhrowh Jonuory15,201Oond b€or hter6ltol o ldte ol 2.,|l
perc€nt, poyoblg Jonuory 15 ond Juty 15. propertylox revenueswfl b€
u5€d10poy
lh6 pdnclpol ond Inleresldue on lh€ bonds
Gonerolobllgottonbondscurrohllyoublondtng016o, tollows:
Pu|Dose
Arnounl
Goverhmgnlolocilvilies
Bualness-iype
ocllvttlgs
s 3,670,@0
16.525,0m
s20,395,000
Annuol debt lslvlce roqukomgntslo motudtv for g6n9rol obtlgollon bonds oro
o5
Y.ar Ending
Dcccmbcr
3l
2006
2007
2008
2009
2010
20tt:20t5
2016-2020
2021-2022
Gov.mm.ntal Activities
Principal
Ilcr9s
s 495,000
490,000
480,000
450,000
28J,000
730,000
940,000
$ t43,0rE
r29,080
I t5,042
101,263
E9,718
343,825
I45,645
Busincss-tvpe
Activiti.s
Principal
l!!se!t
$ 725,000
745,000
765,000
790,000
Et5,000
4,5t5,000
5,545,000
$ 646,055
627,930
605,580
5E2,630
558,930
2,2t3,450
1,301,920
)77,370
s6,783,865
Ihe, Clty olso hos o not€ wlh Wtmlngtonlrust Compony, Inc. ot OOpercenl
ot lh€
noflonor comm€rctd rote, us€d to. tho purchosoof 38.OOO
squoro teel o, r€otertol€
knownos tot #l. thg poymontsot p nctpot ond Int€restoro gi,86f "o"f, ._ft-.-Jni
hs nnot poyrr€nt sch€dut€dtor Sopt€mbor2m7. lhs toon Isco otero aed Lot# I
W
lond.
-26-
CIW Of NEWARK.DETAWARE
NO]ESTOIIIE FIMNCIAI STAIEMENIS
NOTE5
|-oNG-IERMDEBT{confd)
Annuol clebl a€rvlce r€qulr6monb lo mofudv tor lhe nol€ poyobl€ ore o3 lolbwi:
Ye& Erding
Busincss-rvp. Activitics
Dcc€mb€r3 |
Princip8l
I!!9lert
2006
2007
NOTE6
t 26,587
10,941
$ r,456
307
3 37,52E
I1,763
CIIANGESIN LONEIERM IjAAIIIES
long tgrm lloblllly ocflvlly tor the yoor endgd Decemt er 3l , 2mS. wos os toltows:
Bcginnios
Balancc
Govchm.ntal activilics:
Bonds payablc
Comp€nsstcdabrcnocs
GovcrnmeDt6l activiii€s
lons-tcrm tiabilities
Busir.!s-tpc activitics:
Bonds Fyablc
Plus: dcf€rftd lmounls Notc payablc
Compcnsatcd Ebsenc€s
Bushess-t T'c activiti.s
long-icrn Iiabiliti.s
Addnions
-
s 4,175,000s
406,993 t,0E4,t6t
Ending
Rcductiods
Du€ Widin
t (505,000) s 3,870,000t495,000
(1,058,t09)
433,045
62,55.1
s 4,781,993$,084,161 90,563,t09) $ 4,303,045 $557.55?
$17,215,000 $
-
l)6,540
17,3s1,540
69,467
58.696
254.141
$ (?10,000) I6,52s,000
(6,474)
(7t5,474\
( 31,919)
(252.1441
$725,000
110,066
6,474
t6,635,066 73t,414
37,528
26,587
60.695
6.715
st5,733,2A9 t7U.776
Iho tund ,gspondble lor Incurlng lhg componsot€d obsence, poyg the obllgq on.
lh6 Ini€mol se|vlc€ tund predomlnonllys6rvoslhe govgmmenlol lundr. lcco-hgly.
loog-tem llobittllgi tor thgm ore Includedoi port ot the obove lotob for govglnmenlol
ocllvllles. A ot D€cember31, 2005,S8,946of IntemolseMce luhdscompensored
obsencgstsIncluded In the obov6 omounla.
NOIE7
INIERFUNO
IMNSfERS
Iho comportttonot Intorfundlronstolsos tor lhe yeor €nd6d Oecemb€rgl, 2OOS
vrgre
ctslollowS:
Tr.nsf.r ln
Gcncr.l F $d
CapitalProjcotsFund
Nomajor gov€rnmcntlltunds
$ E,967,360
2,117,508
1,852,405
t90,E64
Total Transfcrs
-27 -
Tr.nsfcr Out
$ 3,021,385
436.691
7,002,360
2,300,000
400.000
CITYOF NEWARK,DEI.AWI,RE
NOTES
IO THEFIMNCI^I SIAT€MENIS
NOIE 7
(confd)
TnANSFERS
INIERFUND
mor lo 1996,the Clt motntolnedo stngteoperollngfund. Stnce1996.on onnuol
oFr€roting|ronller ol oleclrlc ulillv rovonuesls mode to lho Ggn€rolFund. Woie{|otgs
odopled on July l, 2ml obo lnclude S40O,000h onnuol aupporl tor lhe G€nerol
Fund. Ih6 Ct/6 pollcy ls thot gonorol rev€nuG shoutdsl./pporl50p€.c€nl or more or
loiol Gonorol Fund sxp6ndtture!,wilh th€ bolonca of luppod funded by op€rothg
llonJers 'lom fi€ eniEpdsotunds.
NOIE 8
FUNDMTANCE
Amounlsore r9s€rygdtor lh€ lollowlngpurpose,l
Debl sorvlcotund
Sp€clol tov€nuelund - low enlorcemenl
Copllol proJech
Sh€els
Po*s ond recroolion
NOIE 9
S 46,619Itordebl .ervlcepoym€ntsl
S 535,71I(torpo c6 grontproJocts)
5 4,760,89t (toropp.ov6d copiidt projectsl
S 724,930(lorslro6tmotntenonce)
S 153,222(io'rpo*s ond r€cr€olton)
PENSIONS
PlonD€lcrlpllon
subslonliollyoll futt-tlmoqmploygosof lh€ CIV oro covered Lyylhs Am6nded ponslon
Pbn lor Emdoye€s ol the Cftryot Newoft, Dslowole, cr€ot€d om operotgd un<tea
S€ctlon2.98 ot ,h9 Ctty Cod€, lhls ls o slngto€mploygrdsfln€d benefit ponslonpton
occounted lor os o penlton fiust tund ond odmhlst6.ad by lt|€ C[y Counc ,llllng or
lho Eoord ot lrusl€€s. lh6 dofln€d bgnofli p€njlon plon la reporl€d In thg C]t,s
inoncbl llolements qnd t$ not Includ€d In tho reporl ot ony oth€r psb c employ€e
aolir€m9nlsyslem or olhd onity, Eoch y€or on Jonuory l. Wlllom M, lr€rcer,
IncoForol€d, p.6poret o complelo pcnston pton Acfuoriol Voluofloo Report thol tl
ovollobl6 ior rovtewln lh6 Fhonc6 D9podmenl. On o quort9dy boltr. FronkRu$cll
lrurt Compony paepoleso perlormqncemonllorlngr6pgd on tho Invgslmenlret({nsol
don o$91a, Flnonce Defrortmenlstoft p.oporg o s€porote r6pod whlch, otono wlh
lhoia ot lhe consullonls,ls Ironrmltled to the loord ot Trusle$, dlscuss€dol r;ulol
publlc mo6lingsond mdd€ ovollobb for r€vlswh th€ FlnonceDepodm€nt.
All tull-flrnomunblpol omptoyoss016 ellglbl6 to onrcll In ihe plon tmm6dlotetyupon
hlro. PdorsaMce os o porl-ttmeor tompoEry €mptoye€ls nol conslder€d.
Althoughdon olsets ore coltgclfu€tymomg€d ond odmtntrtolod,the plon tr ocluolly
o comblnollon ol lhr€€ ptonr wllh djrthctv d[tgrenl lev€t! ot bon€flis. Evonlhoug;
lharo ore lhre€ benslll l6vel3,oll pion o9s6lsore ovolloble lo poy bonelilslo ony pt6n
rn€mbet. lhe lhree dons orel
- clvlllon!non-sworn,
l. tlon-Pollce
r6gutor,tull-llmq€mploys€s
2. Pollce- oll swolnpollco otttc€rsoxcept the Chlel of pollce
3. Sp€clolPollce- th€ Cttet ot po ce
-28
CITYOFNEWARK,
DEIAWAPE
NOIESIO THEFIMNCIAISTAIEMENIS
NO'IE9
(conl'd)
PENSIONS
Non-Pollc6ond Sp6clol Pollcoemdoyoes ore 6nilll9d lo o benoflt ot 2.1 porc€nl ol
lhelr fnol ov€rog6 comp€nslion comprl56dol bo56 poy plus bngevlty llm€6y€orsol
credlled sgrvlce. For Exempt ond Sp€clol Pollce employ€os, llnol ov€rog€
comp€hlqllon €quols lhe ovarogo ot lhe emdoyeo's 60 hlgh€st pold @ns€culive
months ol Clty employmenl, For membeasol lhe Int€molbnol Unlon of Ebct lcol
Woftora (whlte colloo ond the Angdcon Fedgrollon ol Stotg, County ond Munlclpol
Employoos(Hu€ collor), flnol ov€m€6 comp€nsollon €quql! tho overogs of lhe
6mdoy66's 36 hlghed pold consecullvemonlhsot Clly employmenl. ForNon-Polb€
emdoyegi lh€ normol rellremenlcbl€ l! lh€ llrsl doy ot lh€ month colncldlng wllh or
nexl lollowlngth€ lolier of lhs tltf'rronnlv€aaoay
ot lhe m6mbo/s plon porficlpoliondole
or lhe memb€r's65lh bl hdoy, Fo, Speclol Pollce th6 nofmol lell€m6nt dole ls lhe
lolgr of lh6 empbyeg's scih blrthdqy or the 6mploye9's llllh onnve6ory ol
po.fclpollon In lho Plon. Ihe Plonpemlls €o y r€llrom€nlfor Non-Pollceemployeos
ol dge 55 wllh lhe complollon ol 15 o. more yeo6 of c€dlled sorvlce. Tt€ 6orly
rgllr€menlb€n€tll k ocluo olly r6duc€d unl63slhe sum ol y6drs ot s€tvlcaond oge ls
6quol lo 85. Th€leoaeno oorlv rollr€menloplloN lor Spgclol Pollco.
Pollce 6mploye9s ore enllllod to o benotlt colculoted oi dtfer€ol rolos. Fors€rvlce
prlor lo Jonuory I , t 97E,o bonellt ql 2.2 pgrcenl ol lh9 llnol overoge compenlollon
(lhe ovgrogg of lhe €mployee', 36 hlgheslpold conseculive monlhsol gmdoymsnt
with the Clty)comprls€dot bos6 poy phJslongevlly lhes y€on ol crodltod soNlc6. For
reMce lromJonuoryI, 1978ihrolgh D€cemb€r31, 1987,!€Mc6 crgdll5occumulols
ol lh6 lole of 2.25 p€rcanl for eoch yeof ol s€rvice. For soMce oller Dscembd 31.
1907 lervlce credlls occumulol€ ol lh6 role ol 2.5 p€rconl lor €och y€or ot aewicr.
Pollc€6moloveesore llmlled lo o moxlmumoccruol ol €rvlco crodlls ln lhe omounl ot
62ffi.
A Pollce€mploy€ohkgd on JonuoryI, 1976would occumulolgmoxlmumaeMca
cr€dlbIn lhe omounlof 62.5porcontlhrowh Docember31, 2005os llluslrotod
belowi
t976-t977
2 Yeo6
t978-1987
l0 Y€ort
l9t8-2(D5
l6 Y€oB
Sublolol
IVAXMUM
AIIOWAEITSEFr'ICE
CREDIT
x
X
x
2.21ood Yeol
2.25% o€t Y.ol
2.5% o€r Y6or
4.4%
225&
4t 0%
71.9%
62.5%
Normol r€llr€menllor Pollceomdoy€ss hlr€d botor6 Jonuory I , 1989 ls th€ eorllerol
(l) lhe lolof ol lho gmploy€€'sSOlhblrthdoy or lhe lttth onnlveraoryol lhe m€mb€/,
doig ol porllclpollon In lhe plqn or (21lhd cofid6lion ot 20 ycqrl ol crodll€d !6Mce
o! o Pollc€ employ€o. For o Pollce6mdoyee hhod otlef Jonuory l. 1989,nomol
rallremenl occurs upon lf|o complollon ol 25 v€on of crodlled roMca qs o
conlrlbullno momber. A Pollcs member who hos complolod 15 or drole y.ors ol
cr€dll€d lorvlc€ ond who lormlnolesemploymenlno mo(e lhon llrc y€d.s palcrlo lho
membor's normol r€llr€mentdol. sholl bc ellglblt lo recelve o r6tll€m€nl p€nslon
benolll commonclng on lho l|lsl ot lhe month lollowlng th9 memb€/s normol
r€llr€monldol€.
-29-
CITYOf NEWARK,
DETAWARE
NOIESTOII{E FIMNC|AI STATEMENTS
NOIE 9
PENSIONS
(conldi
Eoch omploye€ vrholi unoble lo 9ngog6 In ony $rbslonllol golnful ocllvtly by rgolon
ot o m€dlcolly d6t6mlnobb phydcol or m6nlot lrhpotm€nl moy b€ oltgibte tor o
dlroblllv p6nrlon €quol lo lhe €mployoel occumulolqd s€Mce credlls, r€duc€d by
ony banotlls pob under the Clly'! long{6m dlsoblllly Insuronceproorqm. Pollc€ond
Spocbl Pollc€ €mployeei whos€ dlloblllv rosullsllom the dlscholge of thelr ofibbl
dutiqs shqll r€calve p€n8lon benoflh ot hol lgrr thon 75 porcanl ot lh6lr Drlor
December I componsibn, r€duc€d by ony ben€lll! pold un<rerqny work6r!
comp€nsollonlovr, lhe Clly'r long-tem dlsoullt l5$Joncepaogromqnd 50 porcontol
octuol SoclolSocudtyAcl dl,oblllly b€neffls.
It o memb€alormlnqlos€mployan€nlb€tore bocomlng ellgtble foaony other b€nofts
uncler th6 plon, lhe m€mbar b enllflod lo o comdgtg relund ot th€ gmplov66,s
pgndon conldbutlons.lhe conflbuflon3olo relunddd with Interest,whlch occumuloles
ol lhe lole ol tour porcanl onnuolly.
Wllh ive y9or. or mol6 ot cr€dltod serytce,9l9hl vesliedbqr|€lll opllons ot €qufuol€nt
octuorlolvolueore ovollobl6os iottowsi
l. A relk€menlbeneflt foi lh6 r€molnderot tt|o ohploye€'5 llto,
2. A relt6m6nl b€n€lll icr o mlnlmumot flvc wols ond ih6n only for th9 rest ot lhe
m6mber's 1116. ll lhg momber do6s nol tlv€ tor tlve y6or5 ofld lemlnollng
omploym€nt, lh€h lh9 bongfblory would conttnu€ lo rscafuo th9 b€nelll lor th6
romolndorol lho llvo-y€orpadod.
3, A letlrem€nt b€n€lll tor o mlnlmumot l0 y€ors ond th€n only tor the les, of lh€
m6mbo/s llte. lf lh€ memb€r doos nol llvo tor I 0 y6or5 ofigl lemlnollng
employnenl, lhen the bengficlory would conttnug to lecelvg lhg bohellt tor lh6
remolnderot lhe I o-y€orp€riod.
4, A rollrem€nl b€netll lor o mlnlmumol l5 y€on ond lhon only toathe rosl ol lho
m6mb6r's lllo. ll lhg member do€s not llvg tor l5 y€ol! oller l€rmlnollng
omployment, lh€n lh9 benetlclory would contlnu€ lo recolve the beheit tor lh€
remoln€lerot lhs ls-yeor p€dod.
5. A sJrvlvorbonelll €quol to 50 percentot lhe employ€o'sbenelll otler lho m€mtj€r!
deolh.
6. A survtuorbonetlt 6quol lo 66-213p€rc€nl ot lh6 omptoyee! b6nefli o'|er lhe
membg/rd€olh.
7. A surylvorb€nelll 6quol lo 75 pqcont ot lh€ omploye€! b0neft ofl€. th€ membe/3
d6oth.
6. A luwlvor bonefll cquql lo l0O perconl ot lh6 employ6o's bonsfll ott€a t'ro
memb€r'! ctarolh.
-30,
CIWOf NEWARK,
OELAWARE
NOTES
TOIHEFIMNCIAISIAIEMENIS
NOIE9
lEllllgNs (confd)
Ih6 conlrlbutlon porcenliogg tor NorFPollcoond Sp€clol Pollce emdoyeos In 2005
wor 2.5 p€rcenl ol cu,renl bose ond long6vit poy aorned lhroughout lho y€or.
Pollc6 employ€o! ol the CIV ore loqulred lo conl bul6 lo lhg plon ol o
porcenloge of lh€lr tos€ ond longevlv poy os dolermlned on Docomber 'l ol
lhg pr€c€dlng yeor.
Theconfulbulionrot6 ls €quol lo lh€ pr6vlruscobnalor yeor oclr.lorlollv€commgncted
amployorconl bullon rot€ for th6 Pollcoomdoyoes, provlded thot ll daes nol exceod
6.0 p6rc6nl ond lhol ll do€s nol Increosomore lhon 2,0 pglcsnl over th6 orevlou!
y6o/s roi6. ThePollceemployo€conklbullonrol€ wos 6.0 percenl In 2005.
AnnuolPonslonCosl
lho CltV l! r€qulred to mok€ onnuol conhlbullonsbos€d on on ocluodollv comgol,od
p€acenlogeot covered wog6s In omounlssulllcl9nl lo cov6r normol coslsol b€netits
ond omorllzothe prlit 5eMc6 lloblllllesovgr o pg od ol 15 yeors. Ihs onnuol r€qulred
contrlbutlon tor lhe curenl y6or \{os d€lgrmln€d o! porl ol th6 Jonuqry l, 2@5
dcluorlol voluolion Uslnglh€ 9nlry og€ cosl melhod os d6lln6d In Secllon I ot GASB
Stolem€nlNo. 27. Slnc€1994,lh9 Clly hor mode 6xce3sconklbuilonsof 5104,549
over lb onnuol roqulred conldbullon. lh€ ocluorldl volue ol osrgl! wo! dolernlned
ullng technlques lhot smooth lho effocls ot shod-l6m volotlllly In lh6 loh vqtuo ot
lnvestm6nlsov6r o lhr6o-y€orDeriod. Th6untuMed ocluodol llobllltlosore omoatlzed
over o clos€d Is-yeor p€rlod lrom lh6 voluollon dote ol the voluollon role ol 7,5
ootc€nt.
Annuolreouk€dconlrlbullon
Inl6.€il on n€l pondon obllgoilon
Adruslmeniio onnuol r6qulr€dConLlbullon
AnnuolDonsloncosl
Conlrlbullonsmode
IncrooseIn n6l ponslonobllgollon
Net pensionobllgollon, b€glnnlngot y€or
N€l p€nsionobllgollon. €nd ot y€or
s 1,453,304
4,377
t6.610l
I,45t,071
I,484,557
(33,i186)
r54ll
s _lil4luz
Durlng th€ yoor €ndod O€c€mbar 31, 2005, lhg p|on orps €ncgd o 2.5 p€acenl
Increoro In lls untuM€d oct(lodol lloblllv. lhe unfunded ocluqriol occrued llJblltrv
lncrgds€dSl24,020lor Ponce,5105,134
tor Non-Polb6ond 5229.154
tor lhe Plonos o
whole. Clly co,li Incr€os€d.70 p€acenl. A! o percontoga ol poyroll, lhg 2005 Clly
cohlrlbullon hos d€cr€osd sllghllyirom 2004 (ond budgot 2mS) |6wb. Inveslmenl
produclng o nel Inw'tmenl to6s,
|6lum! on ossek woro b6low ochroriol ossumpllcrats,
2m4 c|'Y ond Stole clnlrlbu'lbns w6ro lesslhon lh€ r€commendodomounl. thla wot
podlolly oflsel by hlgher thon 9xp9cted €mployoo conldbulions.lhc lmpoci ol ths
low€rlhqn €xpocl€d don ols€li rryq5morelhon oflsel by on Incaoos€In lhe nunbat ot
3l -
c|N OFNEWARK,
DCTAWARE
NOTES
TOTHEFIMNCIAI.SIAIEMENTS
NOIE 9
PEtlSlONs(confd)
employ€osworklngpost lh6lr qssum€dr€llr€menl096. lh€ rgauttls o d€croos€ In lhe
Clly'i normol cosl lor 2005;lhlah llkelyo shorl,termevenl thol wtltrgv6.!o lh6ll os lh€se
employ6€sr6lho ord or€ €plocad by youngd wo*€rs.
fh6re w6r€ no o,sumplionor plon chongss lq lho 2005voluollqn. Slgnltlcontocluotiol
o3$mplions us6dln del€rmlnlnglhe ngt pontbn bcncflt obttgolbn Includ€i (o) rote of
r9ftJm on lhe Invedmsnl pBsanl ord fulure olseh ot 7.5 porcont por y€or
compoundod onnuolly, (b) proieclgd lolory Incroosgsot 4.5 pdc6nt p€f y€or, (c) o
2.5 p€rcenl €mployee conldbt]llon rote for .lon-pollco ond o rolllng lhr6e.yoor
overogo of lha pdor ihr€o yeo|s ocluol contdbullon roles tor pollc€, ond (d) lhe
os$mpllon lhot benetilswlll nol lrlcr€os9oflearellromenl. Aslumptionrfor Inflq on 016
lmpllcll In Gsumpllonslor lh€ Inveslmgnl1016of r€fumaotoryIncGoaes,qnd emplovoe
conhlbullons. Ih€ Clfy's onnuol omployer penilon cosl lor the flscot y6o. encled
Decembor31. 2005 y,os91,451,071.lhe contibltlon! tor tho y6or by vo our Clty
tund! lololed 51,484,558Includlng5231.254ot lunclsprovtd€d by th6 Stoteot
Delowo16.
PlonMemberrhlo
As ot Jonuory1, 2005,the mosl recenlocluoriolvoluotton,employ€€membershlp
conslsl€dol:
Podlcloonlr
egl]99
R€ilaedond dlsobled mernb€arr€c€lvlnob€nottb
V€rlod l6rmlnoi6d m€mb€[ nol rocelvingb€n€flts
50
_l
IOIA
u4
tlon-F'olbeond
Sp€clolt'ollca
r60
61
I9le!
219
ll4
-l
?t|
t!2
ThoClt's lolol poyroll toaoll emdoyoes cov€r€d by lhe Plqnior lhg curonl y€or wq!
$10,720,609.PorllclpolbnIn the Plonls volunloryond vlduolvoll €llgtbt€employ€€s
hqve chosenlo oorllcloole.
PlonAss6h
In occodonce wlth GASBNo. 25, Invoslmgntsor€ reporled ol tok voluo, Shorl-l€h
InveSlmgnis
ore rgpod€d ol co6l, whlch oppaoxlmolestok volue. Socurlllgatrod€d on
o nolionol or Inl€r|ollonol exchonge ore volu€d ol lhe lqai rgpo.led lolgj prtce ot
currenl exchongo loles. In 2001, ih€ CIV hh€d lhe FronkRussollTruglComponv to
monoge lh€ lnveslm€nl ol pendon plon ossoL, Tho Russa componv mot. olnt
numerou!commlngled Inv65lmenlfund3lor quolltl€d pubttc e|nployeo pgnalonplons.
lh6sc Invoslmonko.€ nol colegodzed occordlng to lhg lovol ot .t!k oaslm€d ot y€or
€nd b€courg lhey or€ nol ropr€s€niodby 3€curllles.
-32-
CIW Of NEWARK,
DETAWARI
NOIESTOTHEFIMNCAI STAIEMENIS
NolE 9
fENIIQNS(conrd)
Toioloss6t5ond nel oss€lsovolloble tor bgnefflros ot Dgcembor3l, 2005 condstodol
lhg tollowlng j
flx€d lncome muluol tun<b
Lorgecop eqult muluol tund!
Inlemolloholoqullv muluoltunds
Smollcopequllymufuollunds
Gov€mmenls€cualtl'es
tund
514,223,791
r2.62r,605
5,536,999
't,724,U2
887,050
s35,193,987
AdmlnlslrolivoCosls
Admlnlslrollv6cosls,lncludlnglhg Inv€dmenlmonoger, cuslodlol lrusleeond ocluorlol
seNlcos,ore chorg6d ond pold by sho.ljgm o$ola ot ihs plon.
Conconlrolionot PlonAssols
As ot Decombor 3t, 2005 lhere wele no Indlvlduol Invgslmonli. olher lhon lhose
bocked by the U.S.Gcvelnmenl,whlch consliluled llve percenl or mo€ ot lho plont
r|€l o560!s,
Roquk€dSupplemenloryInlomollon MunlclpolGenerolEmploy€€s
P€mlonPlon
Sch€duleot FundlnoProoross
Unfimded
Liability
(AAL) - ErFy
Age (b)
Dst
(UAAL,)
(b-a)
Funded
I(aiio
(db)
o/.ot
Payroll
(c)
Payroll
tO-!Ycl
1/t/o5 s3?,ot7,7E2$41,509,81Is9,492,029 7 7 . 1 3 y ' $10,720,609 8E.54%
l /o4 30,0E9,369 39,352,244 9,262,E75 76.46V" 10,323,409 89.73o/o
l/v03 28,E09,165 36,418,942 7,609,177 79.1t%
79.78%
1/l/o2
28,999,363
t/v0l
27,817,800 3 r,280,847 3,463,O47 88-93o/.
8,941,662 38.730/.
l/t/o0
26,547,363 29,242,E02 2,695,439 90.74r/"
4J47,748
33,301,942 4,30E,579 E7.O6o/t
-33-
9,t77,t26 46.95%
12.29./,
CIW OF NEWAR(.DETAWARE
NOTESIO IHE FIMNCIAI- STAIEMENTS
NOTT9
(confd)
PENSIONS
Schodul€ ol Conldtxrllom From Emobvor ond Olher Contrlbuflnd En ti€s
Ycsr Ended
D.cember31
AnnualRequired
ConEibution
2005
2004
2001
2002
2001
2000
$1y'53,304
1,43E,278
|,225,756
1999
1998
692,368
548,558
473,334
483,63E
666,6t0
E44,193
746,566
t99l
1996
NOIEl0
City Contsibution
s1,464,558
1,374,838
t,t76,223
Contribut.d
t02.16./0
932,141
867,436
95.s90/"
95.96y.
1o7.594/0
t02.7syo
755,350
tot.lto/,
690,944
518,018
46E,840
99.79yo
521,686
94.43'/.
99.05n/.
t01.81%
RISK
IVIAMG€MEN]
The CIiy molnlolns commerclol Insuronca cov€roge lor rlsk ot logsgsrelollm to
genorot.outomotive,
pollcaprofesslonot,
publjcofflclotsond c,lms.lhere hosb€€i nc'
Canltlconl chongg In coveroge durlng the post yeor. lhele hove b€on no losses
oErov9Inlurohce ttmtbdurlngthg toil toury€ora.
lhe Ctt b selt-lnsurodtor workg/s compenlollon; lrowovor, modlcot cots lgbted lo
on-lh€.job Inlul€s or0 cover€d by lhe Clly's hoollh Insuroncoprovldor. lho Clty,s
comp€ns< on poymonlsore colculoted bos6d upon o wdtfonpo cv odmlntto.ed bv
lhe Clly. Tt|€Clly molntiotns
on int€hols€wlc6fundior work€r's
compgnrolionctotmi
ond al€ducilbleomountspold to I! InslJronceund€turlels. thot Soll]nsuronc€Flsd ls
Includod In lhosg stot€m€nls.R€sourcosore olocoted lo tht! turld frorn oDerollno
lundr. Hlslo colly, th€ CIV hos6xp€ 6nced very lew Indtvlduotclolms. On OiemU]
31,2005,lh€r€w6r€threeouttondlngclqtmaond nonependlng.
lhe Clly hos requ€sledo ploposol trom on ocfuo.lot comullont lo d€tsmkE tf ll ls
posslblelo e5tlmol6tulu€ ctollnsond obiljll€r bos6d on ovollobtg dolo.
Fiscal
2005
2004
2003
2002
AssrcgatcLiability
for ClaimsOl/0 1/04
Actual Claims
Cl3ims
$139,227
14,252
60,220
44,77O
- 31-
sr39,227
14,252
60,220
44,770
Aggr.gatc Licbility
for Claim$ l2r3ll05
CITYOFNEWARK,
OETAWARE
NOIESTOTHEFIMNCIqISTATEMEN]S
NOIE I I
DEFERRED
COMPENSANON
PLAN
lhe Clly ottgrs lls employg6so d€tgfied compensdllon plon cleoled In occordonce
wllh lr elnol Rovonue Code (|rc) Socnon 457. the pton, ovo obte to oll Ctty
employg€!, permllsthem to dot€r o porttonot lh6lr soldryun t lufureyoors.
]he lrc Secllon il57 wqs om€nded by oddlng subs€cfion(g), whtch r€qutr€dthe Ctty
lo omend ll5 Delgred Componsolbnnon Grc4 Tru5lAg.€gm€nl. In D€camb€r1996.
lhe Clty qmend€d lli DCPond om€nd€d ltr exlsllngDCPTrustAgreem€nllo comply
vrllhchonges In the lRC.
Ihg omgnded DCPprovtdosthot olt ocreb ond Income ot ths DCpof6 hotd In tho DCp
Irusl for tho 6xcluslv€b€neflt ot podlclponlsond thgk tronoiclo.t€s. Ihoreloro, th6se
oileb wlll no longef bo tho sol6 p.oporty ol lhe Clty ond wttl nol bo sublect io lhe
clolms ol the Clly's genercdcFdllors. In oddlllon, o! o lesull ol lhlschonge, lho o3r€is
hov6 be€n sllmlnol€dtrcm lhe Clly'sboloncesh€€toi ol JonuoryI , 1999. Al cosis
ond €xp€n€i of odmlnldednothe plon or€ born€ by lhe porliclponta.
NOIE ] 2
POST.RENREMENT
HEATIH
CAREEENEf
ITS
In oddlllon lo provldlng p€Dron bonelllsdescdb€dIn Not€ 9, lh6 CIV p(ovldgsc€dolh
llmll€d po,l-rellremenl h€ollh core b€o€tlls lor gmploycos thot m66t ollglbltfy
Gquh6monls. lh6s6 bgnellls w6le Included ln controcli nogoliotod wiih the CIV!
€mploy€eborgolnlngunllslhol b€comeetf€cllveAprttt, 2@1. In €xchongetor o
llx6d conklbullonfowordIndlvlduolr6ttr6€heolthcore promlurns,
th9 Cltyoblolnoo
o long{grm lobor ogleomgnl, woge Inct€oler bolow lh6 hlstoalcolovercEg, o
rod9Jgn ol h€ollh bongtlb ond conlrlluibm loword ocllvg emdov€o h€olh
Inruronco premlumi Curr€nlly,nlne gmploye€smeet the ellglbillv r€qutrgmenlsond
qr€ rocelvlng o benetit. Th€ coal of rellreo heolth core li Gcognkod os on
exp€ndlfur€In lh€ Self.ln ronc! TrusiFundos premlumsoro pold. Forlh6 y6or 6nd6o
D6c6mbor31, 2005,tho!€corlsw6r6SI06,546.
NO'IE13
RESERVOIR
ANDWA'IER
SYSIEM
IMPROVEMEN'S
In 1999,lhe NoworkClly Councllopprovod on updotgd Wol6. Sysl6.nMoatorplon lhot
Includ€d conslruclionot o reservolrn€or the Whlt6Cloy Cr€ek, on lron Gmovot ptonl
tor tho SoulhW6ll Fl€lclond olher moosuresdestgned to provlde lhe CtV wt,r'bo sotf.
sulllclgnl wolor supply. Lqler f'tlotygof, lh6 CftVInltloted condsmnollon p@c66dln€6
lo ocqulre o I l2-ocrg porcol odlocait lo tho Clt ond ttr wql9| treotmenltqcllly on
lhe WhlljoCby Cre€k. On Novgmber 2, 1999. N€work vot6rs opproved o bond
.et€rsndumlo flnoncolheslleocquisilion
by borrowlngup to S4.2Smllllon.
In 2000. ttle lo th6 3lt6 wos ocqutrod tor 97.95 m lton. Th€ Stot6 of Dotowore
porllclpotgd ln lhe p.oiect wllh o copll,olconktbullon ot S3.4mlllbn. proc€€dafom o
Decembor 14. 2000 generct ottlgotton bond lsrue of S2.7 mllllon hove ollov,od the
-35-
CIW OF NEWARX,
OETAWART
NO]ESTOT]{EFIMNCTAI SIAIEMENTS
NO]El3
@(confd)
cily to relmbursollsolt lor oll but 52 mllllonior whlch copllol releNeswe.e used. Dobr
seMce tor lhe Serles2000 G€n€rolObllgo on Sond ls provld€d trom o S.03prop€dy
iqx Incr€oseol 7.7 poacenlttrot wos odoptgd by Clly Councll on November13. 2000
os port ot lhe 2001 operollng budg€l lhe new tox roto b€come otteclfue on Jdy I
2001.
On Aprll 10, 2001,Newo* vot6Gposs€don 518.6m lon gen9rolob gotkrnbond
r6t6r€ndumlhol Includeclwoiof 1016Incr0os6sot opprodmololy 84 p€rc€nl In ord€rlc
luppoal dobl lervlce, construcllonond op€rollon ol lhe woler syalem. Publlcsupport
for both p(ol€cls \Nosovorwh€lmlng;82.8 porcenl voled In iovor o, bllldlng lhe
releNolr ond 86.5 percenl vol€d In lovor of bulldlng th€ wot6r h6olm6nt loclllt.
Wqler rol6s were Inc€o5€d opprodmotely 84 p€.c6nt on July I, 2001 03 octuedisedln
lh6 retelendum.
!h6 Clty lssued lts Sedes2002 Gonerol Obllgotlon Sondr on Sopl€mb€r 17, 2002.
Wochovlo gonk purchosgdlho bonal6on o compotlilvo bld ol lhe In,leInloreslcod ot
3.946063porcent. FltchRollngsdselgn€dth€ rollng AA lhol wosenhonc€d lo AM by
Wochovlo's pu.chos€ ol o bond Insuroncepollcy provlded by A.nboc Asgrronce
Corpofolion. Moody'sInv€sloriSgMce osilgned th6 unlnsuredlottng ofAo3 ond the
Insur€drollng ol rroo. On D€camber19, 2002,the Clly fohburled f!e[ In iho omount
of $5,109,t21 tor roservolrohd vroler lieolmenl plont oxp€ndtluGt pold p.lor to th€
trond llsuonc€clolg. Thlirglmbullemonlwos outhorlzodbV Cl|y CouncllRolollllon
0l -Wdoled NovomborI2, 2001.
Slnce ocqlhlng llll€ to lh€ r€s€rvokCt€, lhe Clty ho5 €nlor€d conlrqcls lolo ng
516,576,553tor lhe deCgn ond conshucllonot lhe reseryoirond on expordod woigl
treqlmenl loclllly tor SouthW6lltl6ld. Ctty Counclt ho! delo|mlnod thol lhs slro ot th€
rosololr wlll I'o opproxlmololy
318 mllllongollons,lorge enouqhlo provklevlduolly
I 00 perconl €llobillly tor droughh rocorcr.gd
dudng tho post I 00 yeoti,
Consfucllon begon In Jun6 2(Xl2qnd wos achoduledlo bg compl€led In Dec€mbor
2OO:1.lh€ genorol conlroclor hlrod lo bulld the prolect rtopped wo.k In S9pl6mb6r
2003 ond lotusod lo complele poriormonco,orgulng lhot ,ha proJcctcould not b€
bulll qi deslgned. Att€rottempt lo medlot! ihg dl pute, ihe conhoct wos lermlnoled
by th€ Clty In €orly 2004. Ih6 conlroclor lll€d o ctvtt suttogolrul th6 CltVIn the U.S.
Dlilrlct Court lor D€loworeoll€glng br€och of conhocl, dotdmotton ond cMl dOhl5
Molollons.
In Novembo.2004. lh€ Clly negollol€d o n€w controcl wllh o dlftorgnl compony lo
complgle lho prol€ct lor opproxlmcl€ly 56 mllllon. lh9 Ngwqrk Rosotvokvvor
comdgl€d In Mqy 2006 ond 15fully op€rotlonol. Al wol6r lystom tmprov6msnlstor
whlch g€nerol obllgotlon dobl wqs lssuedoro now compt6ta. App,oxlmotofyS75,OO0
of tho ClVs orlglnol budgel tor lhd!6 proJecbr€molnsovolloble.
-36.
CIIYOFNEWARK,
DELAWARE
NOTES
TOTHEFIMNC|^I SIAIEMEN]S
NOTEI3
@(confd)
Iho trlol phoa€of the clvll $Jlthlliolod by ih€ lgrmlnol€d conhocior In 2(X)4concluci6d
on October 6. 2006. A fed6rol lury owqrded ths plolnltff $25 ml ton ln ctvl rtght
alomoge! for pr€clurlon ol lho contociot'9 dght lo puEue posl{ormlhollon budneas
wllhout dug proc$s ond opproxlmolelySll mllllon In conhocl domggg!. Ihl$
conlrcclor hod orlglnolty ogr€€d lio consLucl ih6 resoryohfo( S9.6 mllttonond wo$
pqll 96,2 mllllon lor workcomplsLd. Ih6 Clly hod wfhheld poyment ot S275,000tor
Involce! lubmltlredond cedlttod by the englneer ol lecord. lhe verdlcl hos nol yel
bggn gnleaedby th6 Coud pondlng rullngon oulsliondlngrnotionr. ll thti v€rdlcl b nol
sol ollde by lh6 ldol ludgo, lh€ Clly wlll llle llr opp€ol ln lhe lhtrd U.S.CtrcuttCou.t ol
App€ob In Phlldelphlo, Ponnsylvonlowhen oll post-tttol mottonr hove bo€n ruted
upon.
lho Clly's InsurqncoundgMdis(, Sl, Poul Trovolds, hor provlded the def€naeot lhls
cole lrom the outsel. Sl. Poul Trqvgl9rshos no llobllllv on conlrocfuot llsuoabut hos
opp.oxlmolely S7 mllllon In llobllttylor lhe clvll rlghtt podlon ot ihe vsrdtct. St. tbut
Trovolgnhot on obllgollon lo d€t€nd lhe Clly ond ho6oaCgnedn€w towyeBlo pursle
oppellole octlon. lhe Clly Sollcllorond lh€ CIVI triol counsel b€[ov6 thot there t!
subslonliollovelslblo srror In lhe Courll p€-lrlol rullngs,lrbl rutlng! ond lury Inslrucltonr
60 os lo ylgld o slrong portblllly ot iucc6$ on oppcot. Al the paolent t|mo, trlol
couns€|, ougmenl€d by o number ot oddltlrnol otlort|eys retolnod by Sl. Poui, oae
vlgorouslyplrsulng mollonslor new |.lrl, tor rsconCdgrottonot €orll€( rullngsond tor
r6ducllonsof the omounli ol lh9 v€rdiclr. Iho CltV Counctt hoi dlr€ctod lh€ Soltcnor
ond ih€ Clt's hlol counsollo vlgo@urlypo|ile every ovenue ot opp6ol.
-37-
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