$14,355,000 CITY OF LEWISTON Maine

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1 This Preliminary Official Statement and the information contained herein are subject to completion or amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. NEW ISSUE S&P Global Ratings: (See Rating ) NOTICE OF SALE AND PRELIMINARY OFFICIAL STATEMENT DATED MAY 1, 2018 In the opinion of Locke Lord LLP, Bond Counsel, based upon an analysis of existing law and assuming, among other matters, compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes under the Internal Revenue Code of 1986 (the Code ). Interest on the Bonds will not be included in computing the alternative minimum taxable income of individuals or, except as described herein, corporations. Under existing law, the interest on the Bonds is exempt from the State of Maine income tax imposed on individuals. Bond Counsel expresses no other opinion regarding any other tax consequences related to the ownership or disposition of, or the accrual or receipt of interest on, the Bonds. See Tax Exemption herein. The Bonds will NOT be designated as qualified tax-exempt obligations for purposes of Section 265(b)(3) of the Code. $14,355,000 CITY OF LEWISTON Maine GENERAL OBLIGATION PUBLIC IMPROVEMENT BONDS MATURITIES Dated: Date of Delivery Due: January 15, Principal Interest Price/ CUSIP Principal Interest Price/ CUSIP Year Amount Rate Yield 52850C Year Amount Rate Yield 52850C 2020 $ 1,100, $610, ,100, , ,100, , ,075, , ,075, , , , , , , , , , , ,000 Principal of the Bonds will be payable January 15 of the years in which the Bonds mature. Interest from the date of the Bonds will be payable on January 15, 2019 and semi-annually thereafter on each July 15 and January 15 until the principal amount is paid. The Bonds are subject to redemption prior to their stated dates of maturity, as described herein. The Bonds are issuable only in fully registered form without coupons and, when issued, will be registered in the name of Cede & Co., as Bondowner and nominee for The Depository Trust Company ("DTC"), New York, New York. DTC will act as securities depository for the Bonds. Purchases of the Bonds will be made in book-entry form, in the denomination of $5,000 (see "Part I. The Bonds, Book-Entry Transfer System" herein). The Bonds are offered subject to the final approving opinion of Locke Lord LLP, Boston, Massachusetts, Bond Counsel to the City (See Opinion of Bond Counsel herein.) UniBank Fiscal Advisory Services, Inc. serves as financial advisor to the City. It is expected that the Bonds, in definitive form, will be delivered to DTC, or the offices of its custodial agent, on or about May 23, 2018 against payment in federal reserve funds. ELECTRONIC BIDS RECEIVED 11:00 a.m. (Eastern Daylight Savings Time) Wednesday, May 9, 2018

2 Table of Contents Page Issue Summary Statement...i Notice of Sale...ii Exhibit to the Notice of Sale...viii Official Statement...1 Introduction...1 Part I. The Bonds...2 Description of the Bonds...2 Record Date...2 Book-Entry Transfer System...2 Authorization and Use of Proceeds...4 Optional Redemption...5 Mandatory Redemption...5 Other Redemption Provisions...5 Sources of Payment and Remedies...6 Limitation on Municipal Property Tax Levy...6 Opinion of Bond Counsel...7 Tax Exemption...7 Rating...9 Continuing Disclosure...9 Part II. The City...10 Form of Government...10 Services...10 Governing Bodies and Officers...12 Authorization of General Obligation Bonds and Notes...13 Debt...14 Five Years Outstanding Debt...15 Projected Principal Payments by Purpose...15 Annual Debt Service...16 Tax-Supported Debt Service...17 Overlapping Debt...17 Authorized Unissued Debt...18 Bates Mill...18 Retirement Plans...19 Page Property Taxation and Valuation...21 Valuations...22 Classification of Property...22 State Equalized Valuation...22 Largest Taxpayers...23 Calculation of Tax Levies...24 Tax Base Sharing...24 Tax Collections and Abatements...25 City Finances...25 Budget Comparison...26 State Aid...26 Motor Vehicle Excise...27 Investments...27 Water, Sewer and Storm Water Enterprises...27 Collective Bargaining...28 Physical and Economic Characteristics...28 Principal Employers...29 Employment and Payrolls...30 Building Permits...31 Economic Development...31 Annual Project Listings...41 Tax Increment Financing...43 Other Data...46 Litigation...47 Potential Consolidation with the City of Auburn...47 Appendix A. Audited Financial Statements of the City...A-1 Appendix B. Fiscal 2017 Comprehensive Annual Financial Report...B-1 Appendix C. Proposed Form of Legal Opinion...C-1 Appendix D Proposed Form of Continuing Disclosure Certificate...D-1 The information set forth herein has been obtained from the City and from other sources which are believed to be reliable, but it is not guaranteed as to accuracy or completeness. Any statements made in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended merely as opinion and not as representations of fact. The information and expressions of opinion in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the Bonds shall, under any circumstances, create any implication that there has been no material change in the affairs of the City since the date of this Official Statement.

3 Issuer: Date of Sale: Method of Sale: ISSUE SUMMARY STATEMENT City of Lewiston, Maine Wednesday, May 9, 2018 at 11:00 a.m. (Eastern Daylight Savings Time) Electronic Bids via Parity Location of Sale: UniBank Fiscal Advisory Services, Inc., 49 Church Street, Whitinsville, MA Minimum Bid: Issue: Purpose: Dated Date of Bonds: Maturity Date of Bonds: Credit Rating: Redemption: Security: Basis of Award: Tax Status: Continuing Disclosure: Bank Qualification: Paying Agent: Legal Opinion: Delivery and Payment: Issue Contacts: percent of par ($14,444,718.75) plus accrued interest, if any, to the date of delivery $14,355,000 General Obligation Public Improvement Bonds Book-Entry-Only (See Part I The Bonds, Book-Entry Transfer System, herein) Various capital improvements. (See AUTHORIZATION AND USE OF PROCEEDS herein.) Date of Delivery Serially on January 15, 2020 through 2039, as detailed herein S&P Global Ratings is pending. (See RATING herein.) The Bonds are subject to redemption prior to their stated dates of maturity, as described herein The Bonds are general obligations of the City and, with certain limited exceptions, all taxable property in the City is subject to the levy of unlimited ad valorem taxes to pay both principal and interest therein. (See Source of Payment and Remedies, herein) Lowest true interest cost (TIC) as of the dated date Refer to Part I. The Bonds Tax Exemption and Appendix C Proposed Form of Legal Opinion herein Refer to Part I. The Bonds Continuing Disclosure and Appendix D Proposed Form of Continuing Disclosure Certificate herein The City will not designate the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. U.S. Bank National Association, Boston, Massachusetts Locke Lord LLP, Boston, Massachusetts It is expected that the Bonds will be delivered to DTC, or the offices of its custodial agent, against payment to the account of the City in federal reserve funds on or about May 23, Heather A. Hunter, Finance Director, City of Lewiston, Maine, Telephone # (207) ; David M. Eisenthal, Vice President, UniBank Fiscal Advisory Services, Inc., Telephone # (508) ; Richard A. Manley, Jr., Esq., Locke Lord LLP, Boston, Massachusetts, Telephone # (617) Additional Information: Refer to the Preliminary Official Statement dated May 1, i

4 NOTICE OF SALE CITY OF LEWISTON Maine $14,355,000 GENERAL OBLIGATION PUBLIC IMPROVEMENT BONDS The City of Lewiston, Maine, will receive electronic proposals until 11:00 A.M (Eastern Daylight Savings Time), on Wednesday, May 9, 2018 at UniBank Fiscal Advisory Services, Inc., Whitinsville, Massachusetts, for the purchase of the following described Bonds: $14,355,000 GENERAL OBLIGATION PUBLIC IMPROVEMENT BONDS, payable January 15 of the years and in the amounts as follows: Principal Principal Year Amount Year Amount 2020 $ 1,100, $610, ,100, , ,100, , ,075, , ,075, , , , , , , , , , , ,000 Details of the Bonds The Bonds will be dated as of May 23, Interest from the date of the Bonds will be payable on January 15, 2019 and semi-annually thereafter on each July 15 and January 15 until their final maturity. Principal of and interest on the Bonds will be paid as described below. The Bonds will be issued by means of a book-entry system with no physical distribution of the Bonds made to the public. One certificate for each maturity of the Bonds will be issued to The Depository Trust Company, New York, New York, (DTC), or its custodial agent, and immobilized in their custody. A book-entry system will be employed, evidencing ownership of the Bonds in principal amounts of $5,000 or integral multiples thereof with transfers of ownership effected on the records of DTC and its participants pursuant to rules and procedures adopted by DTC and its participants. The winning bidder, as a condition to delivery of the Bonds, shall be required to deposit the Bonds with DTC, registered in the name of Cede & Co. Principal of and interest on the Bonds will be payable to DTC or its nominee as registered owner of the Bonds. Transfer of principal and interest payments to participants of DTC will be the responsibility of DTC; transfer of principal and interest payments to beneficial owners by participants of DTC will be the responsibility of such participants and other nominees of beneficial owners. Neither the City nor the Paying Agent will be responsible or liable for maintaining, supervising or reviewing the records maintained by DTC, its participants or persons acting through such participants. ii

5 Bank Qualification The Bonds will NOT be designated as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. Optional Redemption The Bonds are subject to redemption, at the option of the City, upon the terms and conditions set forth in the City s Preliminary Official Statement dated May 1, 2018, prepared in connection with the issuance of the Bonds. Term Bonds For Bonds maturing on and after January 15, 2026, bidders may specify that all of the principal amount of such Bonds having two or more consecutive maturities, may in lieu of having separate maturity dates, be combined to comprise one or more Term Bonds, and shall be subject to mandatory redemption or mature at par as described above, in each of the years and in the principal amounts specified in the foregoing maturity schedule. Each mandatory redemption shall be allocated to the payment of the Term Bond having the nearest subsequent maturity date. Term Bonds, if any, shall be subject to mandatory redemption on January 15 in the year immediately prior to the stated maturity of such Term Bond (the particular Bonds of such maturity to be redeemed to be selected by lot), as indicated in the foregoing maturity schedule at the principal amount thereof plus accrued interest to the redemption date, without premium. Form of Bid and Basis of Award Electronic proposals will be submitted through i-deal. If any provisions in this Notice of Sale conflict with information provided by i-deal, this Notice of Sale shall control. Further information about i-deal, including any fees charged, may be obtained from i-deal at (212) The City assumes no responsibility or liability for bids submitted through i-deal. An electronic bid made in accordance with this Notice of Sale shall be deemed an irrevocable offer to purchase the Bonds in accordance with the terms provided in this Notice of Sale and shall be binding upon the bidder as if made by a signed and sealed written bid delivered to the City. A good faith deposit is not required. Bidders shall state the rate or rates of interest per annum which the Bonds are to bear in a multiple of 1/8th or 1/20th of 1% but shall not state (a) more than one interest rate for any Bonds having a like maturity, and (b) any interest rate which exceeds the interest rate stated for any other Bonds by more than 3%. No bid of less than percent of par, or $14,444,718.75, and accrued interest to date of delivery, if any, will be considered. As between proposals which comply with this Notice of Sale, the award will be to the bidder who offers to purchase all the Bonds at the lowest net effective interest rate to the City. Such interest rate shall be determined on a true interest cost (TIC) basis, which shall mean that rate which, as of May 23, 2018, discounts semi-annually all future payments on account of principal and interest to the price bid, not including interest accrued to the date of delivery, which accrued interest shall be paid by the successful bidder. The award of the Bonds to the winning bidder will not be effective until the bid has been approved by the Finance Director/Treasurer of the City. Bond Insurance The City has not contracted for the issuance of any policy of municipal bond insurance for the Bonds. If the Bonds qualify for issuance of any such policy or commitment therefor, any purchase of such insurance or commitment shall be at the sole option and expense of the bidder. Proposals shall not be conditioned upon the issuance of any such policy or commitment. Any failure of the Bonds to be so insured or of any such policy or commitment to be issued shall not in any way relieve the purchaser of the contractual obligations arising from the acceptance of a proposal for the purchase of the Bonds. Should the successful bidder purchase municipal bond insurance, all expenses associated with such policy or commitment will be borne by the successful bidder, except for the fee paid to S&P Global Ratings for the rating of the Bonds. Any such fee paid to S&P Global Ratings would be borne by the City. iii

6 Establishment of Issue Price The successful bidder shall assist the City in establishing the issue price of the Bonds and shall execute and deliver to the City on the Closing Date an issue price or similar certificate, in the applicable form set forth in Exhibit 1 to this Notice of Sale, setting forth the reasonably expected initial offering prices to the public or the sales price of the Bonds together with the supporting pricing wires or equivalent communications, or, if applicable, the amount bid, with such modifications as may be appropriate or necessary, in the reasonable judgment of the successful bidder, the City and Bond Counsel. All actions to be taken by the City under this Notice of Sale to establish the issue price of the Bonds may be taken on behalf of the City by UniBank Fiscal Advisory Services, Inc. (the Financial Advisor ) and any notice or report to be provided to the City may be provided to the Financial Advisor. Competitive Sale Requirements. If the competitive sale requirements ( competitive sale requirements ) set forth in Treasury Regulation (f)(3)(i) (defining competitive sale for purposes of establishing the issue price of the Bonds) have been satisfied, the City will furnish to the successful bidder on the Closing Date a certificate of the Financial Advisor, which will certify each of the following conditions to be true: 1. the City has disseminated this Notice of Sale to potential underwriters in a manner that is reasonably designed to reach potential underwriters; 2. all bidders had an equal opportunity to bid; 3. the City received bids from at least three underwriters of municipal bonds who have established industry reputations for underwriting new issuances of municipal bonds; and 4. the City awarded the sale of the Bonds to the bidder who submitted a firm offer to purchase the Bonds at the highest price (or lowest interest cost), as set forth in this Notice of Sale. Any bid submitted pursuant to this Notice of Sale shall be considered a firm offer for the purchase of the Bonds, as specified in the bid. Unless a bidder notifies the City prior to submitting its bid by facsimile or to the Financial Advisor [ or david.eisenthal@unibank.com] or in its bid submitted via Parity, that it will not be an underwriter (as defined below) of the Bonds, by submitting its bid, each bidder shall be deemed to confirm that it has an established industry reputation for underwriting new issuances of municipal bonds. Unless the bidder has notified the City that it will not be an underwriter (as defined below) of the Bonds, in submitting a bid, each bidder is deemed to acknowledge that it is an underwriter that intends to reoffer the Bonds to the public. In the event that the competitive sale requirements are not satisfied, the City shall so advise the successful bidder. Failure to Meet the Competitive Sale Requirements Option A The Successful Bidder Intends to Reoffer the Bonds to the Public. If the competitive sale requirements are not satisfied and the successful bidder intends to reoffer the Bonds to the public, the City will use the first price at which 10% of a maturity of the Bonds (the 10% test ) is sold to the public as the issue price of that maturity, applied on a maturity-by-maturity basis, of the Bonds. The successful bidder shall advise the Financial Advisor if any maturity of the Bonds satisfies the 10% test as of the date and time of the award of the Bonds. The City will not require bidders to comply with the hold-the-offering-price rule set forth in the applicable Treasury Regulations and therefore does not intend to use the initial offering price to the public as of the Sale Date of any maturity of the Bonds as the issue price of that maturity, if the competitive sale requirements are not met. If the competitive sale requirements are not satisfied, then until the 10% test has been satisfied as to each maturity of the Bonds or all of the Bonds are sold to the public, the successful bidder agrees to promptly report to the Financial Advisor the prices at which the unsold Bonds of each maturity have been sold to the public, which reporting obligation shall continue, whether or not the Closing Date has occurred, until the 10% test has been satisfied for each maturity of the Bonds or until all the Bonds of a maturity have been sold. The successful bidder shall be obligated to report each sale of Bonds to the Financial Advisor until notified in writing by the City or the Financial Advisor that it no longer needs to do so. iv

7 By submitting a bid and if the competitive sale requirements are not met, each bidder confirms that: (i) any agreement among underwriters, any selling group agreement and each retail distribution agreement (to which the bidder is a party) relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter, each dealer who is a member of the selling group, and each broker-dealer that is a party to such retail distribution agreement, as applicable, to report the prices at which it sells to the public the unsold Bonds of each maturity allotted to it until it is notified by the successful bidder that either the 10% test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the public, if and for so long as directed by the successful bidder and as set forth in the related pricing wires and (ii) any agreement among underwriters relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter that is a party to a retail distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such retail distribution agreement to report the prices at which it sells to the public the unsold Bonds of each maturity allotted to it until it is notified by the successful bidder or such underwriter that either the 10% test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the public if and for so long as directed by the successful bidder or such underwriter and as set forth in the related pricing wires. Sales of any Bonds to any person that is a related party to an underwriter shall not constitute sales to the public for purposes of this Notice of Sale. Further, for purposes of this Notice of Sale: 1. public means any person other than an underwriter or a related party, 2. underwriter means (A) any person, including the successful bidder, that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the public), and 3. a purchaser of any of the Bonds is a related party to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) at least 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other). Failure to Meet the Competitive Sale Requirements Option B The Successful Bidder Intends to Reoffer the Bonds to the Public and Agrees to Hold the Price of Maturities of Bonds for Which the 10% Test in Option A Is Not Met as of the Sale Date. The successful bidder may, at its option, notify the Financial Advisor in writing, which may be by (the Hold the Price Notice ), not later than 4:00 p.m.(eastern Daylight Savings Time) on the Sale Date, that it has not sold 10% of the maturities of the Bonds listed in the Hold the Price Notice (the Unsold Maturities ) and that the successful bidder will not offer the Unsold Maturities to any person at a price that is higher than the initial offering price to the public during the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date or (ii) the date on which the successful bidder has sold at least 10% of the applicable Unsold Maturity to the public at a price that is no higher than the initial offering price to the public. If the successful bidder delivers a Hold the Price Notice to the Financial Advisor, the successful bidder must provide to the Issuer on or before the Closing Date, in addition to the certification described in Option A above, evidence that each underwriter of the Bonds, including underwriters in an underwriting syndicate or selling group, has agreed in writing to hold the price of the Unsold Maturities in the manner described in the preceding sentence. Failure to Meet the Competitive Sale Requirements and/or the Successful Bidder Does Not Intend to Reoffer the Bonds to the Public Option C. If the successful bidder has purchased the Bonds for its own account and will not distribute or resell the Bonds to the public, then, whether or not the competitive sale requirements were met, the reoffering price certificate will recite such facts and identify the price or prices at which the purchase of the Bonds was made. v

8 Legal Opinion The legality of the Bonds will be approved by Locke Lord LLP, Boston, Massachusetts, whose opinion will be furnished to the purchaser without charge. Bond Counsel are not passing and do not assume any responsibility for the accuracy or adequacy of the following information contained in the Preliminary Official Statement other than matters set forth as the opinion of Bond Counsel and they make no representation that they have independently verified the same. Documents to be Delivered at Closing It shall be a condition to the obligation of the successful bidder to accept delivery of and pay for the Bonds that the bidder shall be furnished, without cost, with (a) the approving opinion of the firm of Locke Lord LLP of Boston, Massachusetts, substantially in the form of Appendix C of the Preliminary Official Statement dated May 1, 2018 included herein, (see "Tax Exemption" and Appendix C in the Preliminary Official Statement), (b) a certificate in form satisfactory to said firm dated as of the date of delivery of the Bonds and receipt of payment therefor to the effect that there is no litigation pending or, to the knowledge of the signers thereof, threatened affecting the validity of the Bonds or the power of the City to levy and collect taxes to pay them, (c) a certificate of the Finance Director to the effect that, to the best of her knowledge and belief, both as of the date of sale and of the date of delivery of the Bonds, the Preliminary Official Statement referred to below does not contain any untrue statement of a material fact and does not omit to state a material fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading; and (d) a Continuing Disclosure Certificate to be dated as of the date of the Bonds and incorporated by reference in the Bonds. CUSIP Identification Numbers It is anticipated that CUSIP identification numbers will be printed on the Bonds, but neither the failure to print such numbers on any bond, nor any error with respect thereto shall constitute cause for a failure or refusal by the purchaser thereof to accept delivery of and pay for the Bonds. The City assumes no responsibility for any CUSIP Service Bureau or other charge that may be imposed for the assignment of such numbers. Continuing Disclosure In order to assist bidders in complying with Rule 15c2-12(b)(5) promulgated by the Securities and Exchange Commission, the City will undertake to provide annual reports and notices of certain significant events. A description of this undertaking is set forth in the Preliminary Official Statement. Delivery The Bonds, in definitive form, will be delivered to the purchaser at DTC, or the offices of its custodial agent, on or about May 23, Additional Information and Copies of the Official Statement Additional information concerning the City and the Bonds is contained in the Preliminary Official Statement dated May 1, 2018, to which prospective bidders are directed. The Preliminary Official Statement is provided for informational purposes only and is not a part of this Notice of Sale. Such Preliminary Official Statement is deemed final by the City as of its date for purposes of SEC Rule 15c 2-12(b)(1). Copies of the Preliminary Official Statement may be obtained from David M. Eisenthal, Vice President, UniBank Fiscal Advisory Services, Inc., 49 Church Street, Whitinsville, Massachusetts 01588, telephone (508) vi

9 Within seven (7) business days following award of the Bonds in accordance herewith, up to twenty-five (25) copies of a Final Official Statement will be furnished to the successful bidder, as requested. Additional copies may be obtained at the successful bidder s expense. The right is reserved to reject any or all bids and to reject any bid not complying with this Notice of Sale and, so far as permitted by law, to waive any irregularity with respect to any proposal. Dated: May 1, 2018 CITY OF LEWISTON Maine /s/ Heather A. Hunter Finance Director/Treasurer vii

10 EXHIBIT 1 [Issue Price Certificate for Use If the Competitive Sale Requirements Are Met] $14,355,000 CITY OF LEWISTON, MAINE GENERAL OBLIGATION PUBLIC IMPROVEMENT BONDS Dated May 23, 2018 ISSUE PRICE CERTIFICATE AND RECEIPT The undersigned, on behalf of [NAME OF SUCCESSFUL BIDDER] (the Successful Bidder ), hereby certifies as set forth below with respect to the sale of the above-captioned obligations (the Bonds ) of the City of Lewiston, Maine (the Issuer ). 1. Reasonably Expected Initial Offering Prices. (a) As of the Sale Date, the reasonably expected initial offering prices of the Bonds to the Public by the Successful Bidder are the prices listed in Schedule A (the Expected Offering Prices ). The Expected Offering Prices are the prices for the Maturities of the Bonds used by the Successful Bidder in formulating its bid to purchase the Bonds. Attached as Schedule B is a true and correct copy of the bid provided by the Successful Bidder to purchase the Bonds. bid. (b) (c) The Successful Bidder was not given the opportunity to review other bids prior to submitting its The bid submitted by the Successful Bidder constituted a firm offer to purchase the Bonds. 2. Defined Terms. (a) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities. (b) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than a Successful Bidder or a related party to a Successful Bidder. The term related party for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (c) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is May 9, (d) Underwriter means (i) any person, including the Successful Bidder, that agrees pursuant to a written contract with the Issuer (or with the lead Successful Bidder to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public). The representations set forth in this certificate is limited to factual matters only. Nothing in this certificate represents the Successful Bidder s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Locke Lord LLP viii

11 in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. The Successful Bidder hereby acknowledges receipt from the Issuer of the Bonds and further acknowledges receipt of all certificates, opinion, and other documents required to be delivered to the Successful Bidder, before or simultaneously with the delivery of such Bonds, which certificates, opinions and other documents are satisfactory to the Successful Bidder. Dated: May, 2018 [SUCCESSFUL BIDDER] By: Name: Title: SCHEDULE A Expected Reoffering Prices (to be attached) SCHEDULE B Copy of Successful Bidder s Bid (to be attached) ix

12 [Issue Price Certificate for Use If the Competitive Sale Requirements Are Not Met and the Hold the Price Rule Is Not Used] $14,355,000 CITY OF LEWISTON, MAINE GENERAL OBLIGATION PUBLIC IMPROVEMENT BONDS Dated May 23, 2018 ISSUE PRICE CERTIFICATE AND RECEIPT The undersigned, on behalf of (the [Successful Bidder][Representative] on behalf of itself [and NAMES OF OTHER UNDERWRITERS] hereby certifies as set forth below with respect to the sale and issuance of the above-captioned obligations (the Bonds ) by the Issuer. 1. Sale of the Bonds. As of the date of this certificate, [except as set forth in paragraph 2 below,] for each Maturity of the Bonds, the first price at which at least 10% of such Maturity of the Bonds was sold to the Public is the respective price listed in Schedule A. [Only use the next paragraph if the 10% test has not been met or all of the Bonds have not been sold for one or more Maturities of Bonds as of the Closing Date.] 2. For each Maturity of the Bonds as to which no price is listed in Schedule A, as set forth in the Notice of Sale for the Bonds, until the 10% test has been satisfied as to each Maturity of the Bonds or all of the Bonds are sold to the Public, the Successful Bidder agrees to promptly report to the Issuer s financial advisor, UniBank Fiscal Advisory Services, Inc. (the Financial Advisor ) the prices at which the unsold Bonds of each Maturity have been sold to the Public, which reporting obligation shall continue after the date hereof until the 10% test has been satisfied for each Maturity of the Bonds or until all the Bonds of a Maturity have been sold. The [Successful Bidder][Representative] shall continue to report each sale of Bonds to the Financial Advisor until notified by or in writing by the State or the Financial Advisor that it no longer needs to do so. 3. Defined Terms. (a) Issuer means the City of Lewiston, Maine. (b) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities. (c) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term related party for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (d) Underwriter means (i) any person, including the [Successful Bidder][Representative], that agrees pursuant to a written contract with the Issuer (or with the lead Underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public). The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents the [Successful Bidder][Representative] s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Locke Lord x

13 LLP in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. The [Successful Bidder][Representative] hereby acknowledges receipt from the Issuer of the Bonds and further acknowledges receipt of all certificates, opinion, and other documents required to be delivered to the [Successful Bidder][Representative], before or simultaneously with the delivery of such Bonds, which certificates, opinions and other documents are satisfactory to the [Successful Bidder][Representative]. Dated: May, 2018 [SUCCESSFUL BIDDER] [REPRESENTATIVE] By: Name: Title: [SCHEDULE A SALE PRICES (to be attached)] xi

14 [Issue Price Certificate for Use If the Competitive Sale Requirements Are Not Met and the Hold the Price Rule Is Used] $14,355,000 CITY OF LEWISTON, MAINE GENERAL OBLIGATION PUBLIC IMPROVEMENT BONDS DATED MAY 23, 2018 ISSUE PRICE CERTIFICATE AND RECEIPT The undersigned, on behalf of (the ( [Successful Bidder][Representative] ), on behalf of itself [and [NAMES OF OTHER UNDERWRITERS] ]hereby certifies as set forth below with respect to the sale and issuance of the abovecaptioned obligations (the Bonds ) of the City of Lewiston, Maine (the Issuer ). 1. Sale of the Bonds. As of the date of this certificate, [except as set forth in paragraph 2 below,] for each Maturity of the Bonds, the first price at which at least 10% of such Maturity of the Bonds was sold to the Public is the respective price listed in Schedule A. [Only use the next paragraph if the 10% test has not been met as of the Sale Date.] [For each Maturity of the Bonds as to which no price is listed in Schedule A (the Unsold Maturities ), as set forth in the Notice of Sale for the Bonds, the [Successful Bidder][Representative] and any other Underwriter did not reoffer the Unsold Maturities until the earlier of (i), 2018 or (ii) the date on which the [Successful Bidder][Representative] or any other Underwriter sold at least 10% of each Unsold Maturity at a price that is no higher than the initial offering price to the Public.] 2. Defined Terms. (a) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities. (b) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term related party for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (c) Underwriter means (i) any person, including the [Successful Bidder][Representative], that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public). 3. Receipt. The [Successful Bidder][Representative] hereby acknowledges receipt from the Issuer of the Bonds and further acknowledges receipt of all certificates, opinion and other documents required to be delivered to the [Successful Bidder][Representative], before or simultaneously with the delivery of the Series A Bonds, which certificates, opinions and other documents are satisfactory to the [Successful Bidder][Representative]. The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents the [Successful Bidder s][representative s] interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Locke Lord LLP in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal xii

15 Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. Dated: May, 2018 [SUCCESSFUL BIDDER][REPRESENTATIVE] By: Name: Title: Schedule A Sale Prices (to be attached) xiii

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17 OFFICIAL STATEMENT CITY OF LEWISTON MAINE $14,355,000 GENERAL OBLIGATION PUBLIC IMPROVEMENT BONDS INTRODUCTION This Official Statement is provided for the purpose of presenting certain information relating to the City of Lewiston, Maine (the "City") in connection with the sale of the City s $14,355,000 General Obligation Public Improvement Bonds (the Bonds ), dated as of their Date of Delivery (May 23, 2018). The Bonds are being offered for sale at a public bidding and a Notice of Sale dated May 1, 2018 with respect to the Bonds has been furnished to prospective bidders. Reference is hereby made to the Notice of Sale for the Bonds for the terms and conditions of bidding. The Bonds will be general obligations of the City for which its full faith and credit are pledged. They are not guaranteed by the State of Maine (the "State") or any other entity. The security for the Bonds is more fully described under the caption SOURCES OF PAYMENT AND REMEDIES herein. See also the caption OPINION OF BOND COUNSEL. Questions regarding information contained in this Official Statement or other matters should be directed to the following: Heather A. Hunter, Finance Director/Treasurer, City of Lewiston, Maine, (207) ; David M. Eisenthal, Vice President, UniBank Fiscal Advisory Services, Inc., (508) ; or Richard A. Manley, Jr., Locke Lord LLP, (617) The information contained herein has been obtained from the sources indicated or from the City. 1

18 PART I THE BONDS DESCRIPTION OF THE BONDS The Bonds will be dated as of the Date of Delivery (May 23, 2018), and will mature on January 15 of the years and in the principal amounts as follows: Principal Principal Year Amount Year Amount 2020 $1,100, $610, ,100, , ,100, , ,075, , ,075, , , , , , , , , , , ,000 The Bonds will bear interest at the rate or rates per annum as specified by the successful bidder. The Bonds are subject to optional redemption prior to their stated dates of maturity, as described herein. Principal and semi-annual interest on the Bonds will be paid by U.S. Bank National Association, Boston, Massachusetts, acting as paying agent (the "Paying Agent"). Interest from the date of the Bonds will be payable on January 15, 2019 and semi-annually thereafter on each July 15 and January 15 until the principal amount is paid. So long as The Depository Trust Company ( DTC ), New York, New York, or its nominee, Cede & Co., is the Bondowner, such payments of principal and interest on the Bonds will be made directly to DTC. Disbursements of such payments to the DTC Participants are the responsibility of DTC and disbursement of such payments to the Beneficial Owners is the responsibility of the DTC Participants and the Indirect Participants, as more fully described herein. The Bonds are issuable only in fully registered form without coupons, and, when issued, will be registered in the name of Cede & Co., as Bondowner and nominee for DTC. DTC will act as securities depository for the Bonds. Purchases of the Bonds will be made in book-entry form, in the denomination of $5,000 or any integral multiple thereof. Purchasers will not receive certificates representing their interests in Bonds purchased. So long as Cede & Co. is the Bondowner, as nominee of DTC, references herein to the Bondowners or registered owner shall mean Cede & Co., as aforesaid, and shall not mean the Beneficial Owners (as defined herein) of the Bonds. (See "Book-Entry Transfer System" herein.) Record Date The record date for each payment of interest is the last business day of the month preceding the interest payment date, provided that with respect to overdue interest or interest on any overdue amount, the Paying Agent may establish a special record date. The special record date may not be more than twenty (20) days before the date set for payment. The Paying Agent will mail notice of a special record date to the bondholders at least ten (10) days before the special record date. Book-Entry Transfer System The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the Bonds. The Bonds will be issued in fully-registered form registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One-fully registered certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. 2

19 DTC, the world's largest depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-u.s. equity, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation, and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a S&P Global Ratings rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at and Purchases of the securities deposited with the DTC system must be made by or through Direct Participants, which will receive a credit for such securities on DTC's records. The ownership interest of each actual purchaser of each security held by DTC ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in securities held by DTC are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in securities held by DTC, except in the event that use of the book-entry system for such securities is discontinued. To facilitate subsequent transfers, all securities deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as requested by an authorized representative of DTC. The deposit of securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the securities deposited with it; DTC's records reflect only the identity of the Direct Participants to whose accounts such securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices for the Bonds shall be sent to DTC. If less than all of the Bonds within a maturity is being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent to vote with respect to securities deposited with it unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the issuer of such securities or its paying agent as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments on the securities held by DTC will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the issuer of such securities or its paying agent, on the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners 3

20 will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC (nor its nominee), the issuer of such securities or the paying agent, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the issuer of such securities or its paying agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the securities held by it at any time by giving reasonable notice to the issuer of such securities or its paying agent. Under such circumstances, in the event that a successor depository is not obtained, physical certificates are required to be printed and delivered to Beneficial Owners. The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, physical certificates will be printed and delivered to Beneficial Owners. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. DTC Practices The City can make no assurances that DTC, Direct Participants, Indirect Participants or other nominees of the Beneficial Owners of the Bonds will act in a manner described in this Official Statement. DTC is required to act according to rules and procedures established by DTC and its participants which are on file with the Securities and Exchange Commission. AUTHORIZATION AND USE OF PROCEEDS $14,355,000 par amount of the Bonds is authorized as part of the City s fiscal 2016, 2017, and 2018 capital improvement plans for the following purposes under the M.R.S.A. 30-A, Section 5772, and by votes of the City Council on May 19, 2015, May 17, 2016, and May 16, 2017: General Fund Municipal Project Amount Authorization Date Comprehensive Plan $ 50,000 5/19/2015 Airport Terminal Parking 350,000 5/17/2016 Radio Replacement 500,000 5/17/2016 Riverfront Island Implementation 320,000 5/16/2017 Camera System Upgrade 150,000 5/16/2017 Central Fire Station Generator 58,000 5/16/2017 Central Fire Station Roof Replacement 165,000 5/16/2017 Sabattus Street Fire Station Replacement 315,000 5/16/2017 City Hall Second Floor Restoration 104,000 5/16/2017 Sidewalk Maintenance/Replacement 301,000 5/16/2017 Crosswalk Evaluation/Implementation 175,000 5/16/2017 Street Maintenance 2,732,000 5/16/2017 Kennedy Park Master Plan 339,000 5/16/2017 Marcotte Park Playground 75,000 5/16/2017 Hudson Bus Property Soccer Field 300,000 5/16/2017 Municipal Garage Vehicle Replacement 1,229,000 5/16/2017 Municipal Subtotal $ 7,163,000 4

21 General Fund - Schools High School Parking Lot Expansion $ 240,000 5/16/2017 Montello Electrical and Library HVAC 462,000 5/16/2017 Schools Subtotal $ 702,000 Water Fund (expected to be supported by user charges) Distribution Mains $ 1,995,000 5/16/2017 Water Subtotal $ 1,995,000 Sewer Fund (expected to be supported by user charges) Rehabilitation of Sanitary Sewer Mains $1,000,000 5/16/2017 Collection System Inspection and Rehab 600,000 5/16/2017 Pump Station Replacement 205,000 5/16/2017 Combined Sewer Overflow Separation 500,000 5/16/2017 EPA Order Software 450,000 5/16/2017 Sewer Subtotal $ 2,755,000 Stormwater Fund (expected to be supported by user charges) Culvert Replacement Program 210,000 5/16/2017 Jepson Brook Channel Upgrades 1,030,000 5/16/2017 Combined Sewer Overflow Separation 500,000 5/16/2017 Stormwater Subtotal $ 1,740,000 TOTAL $ 14,355,000 OPTIONAL REDEMPTION The Bonds maturing in the years 2020 through 2025, inclusive, are not subject to redemption prior to their stated dates of maturity. The Bonds maturing on and after January 15, 2026 are subject to redemption prior to their stated dates of maturity, at the option of the City, on and after January 15, 2025 either in whole or in part at any time, and if in part, by lot within a maturity, at par plus accrued interest to the date set for redemption. MANDATORY REDEMPTION If any Term Bonds are specified by the successful bidder, they will be subject to mandatory redemption on January 15 in the year immediately prior to the stated maturity of such Term Bond (the particular Bonds of such maturity to be redeemed to be selected by lot) as indicated on the cover page of the Preliminary Official Statement at the principal amount thereof plus accrued interest to the redemption date. OTHER REDEMPTION PROVISIONS So long as DTC is the registered owner of the Bonds, notice of any redemption of Bonds, prior to their maturities, specifying the Bonds (or portions thereof) to be redeemed will be sent by mail, or in such other manner acceptable to DTC, to the registered owner of such Bonds, as nominee of DTC not more than 60 days nor less than 30 days prior to the redemption date. Any failure on the part of DTC to notify the DTC Participants of the redemption or failure on the part of the DTC Participants or of a nominee of a Beneficial Owner (having received notice from a DTC Participant or otherwise) to notify the Beneficial Owner shall not affect the validity of the redemption. If moneys for the redemption are held by the Paying Agent on the redemption date and if notice of the redemption shall have been duly mailed, then from and after the redemption date interest on the Bonds (or portions thereof) called for redemption shall cease to accrue. 5

22 SOURCES OF PAYMENT AND REMEDIES General The Bonds are general obligations of the City and, except to the extent they are paid from other sources, their payment is not limited to a particular fund or revenue source. The City has power to levy ad valorem property taxes without limit as to rate or amount upon all the taxable property within its territorial limits to pay principal and interest on the Bonds, subject to certain procedural requirements under Title 30-A M.R.S.A. s A, except to the extent that the City may enter into an agreement under Title 30-A, Chapter 223, Subchapter V of the Maine Revised Statutes, as amended, to share its assessed valuation with another municipality, and except to the extent that the City establishes or has established municipal development districts or municipal affordable housing districts pursuant to Title 30-A, Chapters 206 and 207 of the Maine Revised Statutes, as amended, the captured tax increment of which may not be available for payment of debt service on the Bonds. The City has entered into certain tax base sharing agreements and has established certain municipal development districts (tax increment financing districts) pursuant to Title 30-A and elected to retain a portion of the tax increment on the captured assessed value of the property in these districts to pay costs of development projects within the districts (see PROPERTY TAXATION AND VALUATION Tax Base Sharing and TAX INCREMENT FINANCING herein). Within the limits established by statute, the City has the right to designate additional municipal development districts or municipal affordable housing development districts pursuant to Chapter 206 and 207 of Title 30- A of the Maine Revised Statutes, as amended. There is no provision for a lien on any portion of the tax levy, or any other funds, to secure bonds or notes, or judgments thereon, in priority of other claims. The City is subject to suit on the Bonds. The Maine Supreme Judicial Court has established that municipalities have an inherent right to tax their inhabitants to pay municipal indebtedness. In addition, the Maine statutes provide that any debt of a municipality may be satisfied by the taking of the personal property of any resident and any real estate within the municipality, although there has been no judicial determination of whether this remedy is constitutional under current due process and equal protection standards. Enforcement of a claim for payment of principal of or interest on bonds or notes would also be subject to the applicable provisions of federal bankruptcy, insolvency, reorganization, moratorium, and other similar laws and to the provisions of statutes, if any, affecting creditors rights heretofore or hereafter enacted by Congress or the State Legislature extending the time for payment or imposing other constraints upon enforcement insofar as the same may be constitutionally applied. Limitation on Municipal Property Tax Levy Effective July 1, 2005, the legislature enacted Title 30-A, Section 5721-A of the Maine Revised Statutes, as amended, which, subject to certain procedural overrides, establishes a limit on municipal property tax levies. With certain exceptions, a municipality may not increase its property tax levy from one year to the next by more than a specified growth limitation factor. However, the City may exceed the property tax levy limit by a majority vote of the entire City Council on a separate article that specifically identifies the intent to exceed the property tax levy limit. This action is subject to override by initiative upon a petition signed by at least 10% of the number of voters voting in the last gubernatorial election in the municipality submitted within 30 days of the council s vote. The growth limitation factor is: (a) the 10-year average real personal income growth plus the Property Growth Factor as defined in the legislation (when the state and local tax burden ranks in the highest 1/3 of all states); or (b) the 10-year average real personal income growth plus forecasted inflation plus the Property Growth Factor (when the state and local tax burden ranks in the middle 1/3 of all states). In addition, a municipality is required to lower its property tax levy limit in any year by an amount equal to net new funds provided by the State for existing services funded in whole or in part by the property tax levy. The property tax levy limit also may be exceeded for extraordinary circumstances such as: 6

23 (1) Catastrophic events such as natural disaster, terrorism, fire, war or riot; (2) Unfunded or underfunded state or federal mandates; (3) Citizens initiatives or other referenda; (4) Court orders or decrees; or (5) Loss of state or federal funding. Extraordinary circumstances do not include changes in economic conditions, revenue shortfalls, increases in salaries or benefits, new programs or program expansions that go beyond existing program criteria and operation. OPINION OF BOND COUNSEL The legal opinion of the firm of Locke Lord LLP, of Boston, Massachusetts (see Appendix C) will be furnished to the successful bidder. The opinion will be dated and given on and will speak only as of the date of original delivery of the Bonds to the successful bidder. The scope of engagement of Bond Counsel does not extend to passing upon or assuming responsibility for the accuracy or adequacy of any statements made in this Official Statement other than matters expressly set forth as their opinion and they make no representation that they have independently verified the same. TAX EXEMPTION In the opinion of Locke Lord LLP, Bond Counsel to the City ( Bond Counsel ), based upon an analysis of existing laws, regulations, rulings, and court decisions, and assuming, among other matters, compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the Code ). Bond Counsel is of the further opinion that interest on the Bonds will not be included in computing the alternative minimum taxable income of Bondholders who are individuals or, except as described herein, corporations. Bond Counsel expresses no opinion regarding any other federal tax consequences arising with respect to the ownership or disposition of, or the accrual or receipt of interest on the Bonds. The Bonds will NOT be designated as qualified tax-exempt obligations for purposes of Section 265(b)(3) of the Code. For taxable years that began before January 1, 2018, interest on the Bonds owned by a corporation (other than an S corporation, a qualified mutual fund, a real estate investment trust, a real estate mortgage investment conduit, or a financial asset securitization investment trust) will be included in such corporation s adjusted current earnings for purposes of computing the alternative minimum taxable income of such corporation. The alternative minimum tax on corporations has been repealed for taxable years beginning on or after January 1, The Code imposes various requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Bonds. Failure to comply with these requirements may result in interest on the Bonds being included in gross income for federal income tax purposes, possibly from the date of original issuance of the Bonds. The City has covenanted to comply with such requirements to ensure that interest on the Bonds will not be included in federal gross income. The opinion of Bond Counsel assumes compliance with these requirements. Bond Counsel is also of the opinion that, under existing law, interest on the Bonds is exempt from the Maine income tax imposed on individuals. Bond Counsel has not opined as to other Maine tax consequences arising with respect to the Bonds and Bond Counsel has not opined as to the taxability of the Bonds or the income therefrom or any other tax consequences arising with respect to the Bonds under the laws of any state other than Maine. A complete copy of the proposed form of opinion of Bond Counsel is set forth in Appendix C hereto. To the extent the issue price of any maturity of the Bonds is less than the amount to be paid at maturity of such Bonds (excluding amounts stated to be interest and payable at least annually over the term of such Bonds), the difference constitutes original issue discount, the accrual of which, to the extent properly allocable to each owner thereof, is treated as interest on the Bonds which is excluded from gross income for federal income tax purposes and is exempt from Maine income tax imposed on individuals. For this purpose, the issue price of a particular maturity of the Bonds is either the reasonably expected initial offering price to the public or the first price at which a substantial amount of such maturity of the Bonds is sold to the public, as applicable. The original issue discount with respect to any maturity of the Bonds 7

24 accrues daily over the term to maturity of such Bonds on the basis of a constant interest rate compounded semiannually (with straight-line interpolations between compounding dates). The accruing original issue discount is added to the adjusted basis of such Bonds to determine taxable gain or loss upon disposition (including sale, redemption, or payment on maturity) of such Bonds. Bondholders should consult their own tax advisors with respect to the tax consequences of ownership of Bonds with original issue discount, including the treatment of purchasers who do not purchase such Bonds in the original offering to the public at the reasonably expected initial offering price or, if applicable, the first price at which a substantial amount of such Bonds is sold to the public. Bonds purchased, whether at original issuance or otherwise, for an amount greater than the stated principal amount to be paid at maturity of such Bonds, or, in some cases, at the earlier redemption date of such Bonds ( Premium Bonds ), will be treated as having amortizable bond premium for federal income tax purposes and the Maine income tax imposed on individuals. No deduction is allowable for the amortizable bond premium in the case of obligations, such as the Premium Bonds, the interest on which is excluded from gross income for federal income tax purposes. However, a Bondholder s basis in a Premium Bond will be reduced by the amount of amortizable bond premium properly allocable to such Bondholder. Holders of Premium Bonds should consult their own tax advisors with respect to the proper treatment of amortizable bond premium in their particular circumstances. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken) or events occurring (or not occurring) after the date of issuance of the Bonds may adversely affect the value of, or the tax status of interest on, the Bonds. Although Bond Counsel is of the opinion that interest on the Bonds is excluded from gross income for federal income tax purposes and is exempt from the Maine income tax imposed on individuals, the ownership or disposition of, or the accrual or receipt of interest on, the Bonds may otherwise affect the federal or state tax liability of a Bondholder. Among other possible consequences of ownership or disposition of, or the accrual or receipt of interest on, the Bonds, the Code requires recipients of certain social security and certain railroad retirement benefits to take into account receipts or accruals of interest on the Bonds in determining the portion of such benefits that are included in gross income. The nature and extent of all such other tax consequences will depend upon the particular tax status of the Bondholder or the Bondholder s other items of income, deduction, or exclusion. Bond Counsel expresses no opinion regarding any such other tax consequences, and Bondholders should consult with their own tax advisors with respect to such consequences. Risk of Future Legislative Changes and/or Court Decisions Legislation affecting tax-exempt obligations is regularly considered by the United States Congress and may also be considered by the Maine legislature. Court proceedings may also be filed, the outcome of which could modify the tax treatment of obligations such as the Bonds. There can be no assurance that legislation enacted or proposed, or actions by a court, after the date of issuance of the Bonds will not have an adverse effect on the tax status of interest on the Bonds or the market value or marketability of the Bonds. These adverse effects could result, for example, from changes to federal or state income tax rates, changes in the structure of federal or state income taxes (including replacement with another type of tax), or repeal (or reduction in the benefit) of the exclusion of interest on the Bonds from gross income for federal or state income tax purposes for all or certain taxpayers. For example, H.R. 1, signed into law on December 22, 2017, reduces the corporate tax rate, modifies individual tax rates, eliminates many deductions, and raises the income threshold above which the individual alternative minimum tax is invoked, among other things. These changes may increase, reduce or otherwise change the financial benefits of owning state and local government bonds. Additionally, Bondholders should be aware that future legislative actions (including federal income tax reform) may retroactively change the treatment of all or a portion of the interest on the Bonds for federal income tax purposes for all or certain taxpayers. In all such events, the market value of the Bonds may be affected and the ability of Bondholders to sell their Bonds in the secondary market may be reduced. The Bonds are not subject to special mandatory redemption, and the interest rates on the Bonds are not subject to adjustment, in the event of any such change in the tax treatment of interest on the Bonds. 8

25 Investors should consult their own financial and tax advisors to analyze the importance of these risks. RATING Application has been made to S&P Global Ratings for a rating on the Bonds. Such rating, if obtained, will reflect only the agency s view and will be subject to revision or withdrawal which could affect the market price of the Bonds. CONTINUING DISCLOSURE In order to assist the Underwriters in complying with Rule 15c2-12(b)(5) promulgated by the Securities and Exchange Commission (the Rule ), the City will covenant for the benefit of owners of the Bonds to provide certain financial information and operating data relating to the City by not later than 270 days after the end of each fiscal year, (the Annual Report ), and to provide notices of the occurrence of certain enumerated events. The covenants will be contained in a Continuing Disclosure Certificate, the proposed form of which is provided in Appendix D. The Certificate will be executed by the signers of the Bonds, and incorporated by reference in the Bonds. The City is the only obligated person with respect to the Bonds within the meaning of the Rule. In the last five years, the City believes it has complied, in all material respects, with its previous undertakings to provide annual reports or notices of significant events in accordance with the Rule. However, during a review of the City s filings on the Electronic Municipal Market Access Service (EMMA) of the Municipal Securities Rulemaking Board (MSRB), it was noted that some past Annual Reports were not properly linked to certain past bond issues. This issue has been corrected. 9

26 PART II THE CITY The City of Lewiston, Maine (the City ) was incorporated as a Town in 1795 and established as a City in It is located in Androscoggin County, about 35 miles north of Portland, Maine and 140 miles north of Boston, Massachusetts. It is the second largest city in Maine. FORM OF GOVERNMENT Under the City s current charter, which was adopted in 1979, the City operates under a Mayor, seven-member City Council, and City Administrator form of government. The City Administrator is appointed by and reports solely to the City Council. The City Administrator appoints all department heads, some with City Council confirmation. The City Council is vested with the authority to determine the budget and also the City s tax rate. Its members are elected by the voters for two-year terms and have the ultimate policy and decision-making power in the City. The Mayor, who is elected by the voters for two-year terms, has no veto power over Council actions. The Lewiston public school system is administered by a nine-member school committee made up of one citizen from each of the City s seven wards, one member elected at-large, and one member of the City Council. The School Committee is elected by the voters of the City for two-year terms. The School Committee has responsibility for school policy and hiring department employees, including the Superintendent. However, the ultimate control over the school budget lies with the City Council. The Finance Director is appointed by the City Administrator and is confirmed by the City Council. She organizes and directs the City s financial activities, including guiding City officers on fiscal matters. SERVICES The City provides general government services within its corporate boundaries. These services include police and fire protection, water and sewer, street maintenance, solid waste removal, disposal, and recycling, human services, culture and recreation, and public education in grades pre-k to 12. While most City services are funded through the general operating budget, the Water, Sewer and Storm Water Divisions are operated as enterprise funds. Both operating and capital costs of these divisions, including debt service, are supported entirely by user charges. Water The City s water supply source is Lake Auburn, located in the City of Auburn. Lake Auburn also supplies the Auburn Water District (the District ) which services most residents and businesses in the City of Auburn. The distribution systems of the City and the District are entirely separate. The City has avoided the need to construct a water treatment plant (estimated cost $35 million) on Lake Auburn through measures taken in conjunction with the City of Auburn and the District to protect the Lake s watershed. One such measure was the creation of the Lewiston-Auburn Watershed Protection Commission. This Commission manages the watershed area surrounding Lake Auburn and has purchased and controls in excess of 2,200 acres within the watershed. It consists of nine-members: three appointed by the City, three appointed by the District, one appointed by the Town of Turner, one appointed by the Towns of Minot, Hebron, and Buckfield, and one appointed by the Androscoggin Valley Council of Governments (AVCOG). The Commission was created during fiscal year The Commission s budget is supported by assessments on the City and the District. The City and the District have constructed an ultraviolet light treatment facility at Lake Auburn at a cost of $7.7 million, which was financed through the Maine Drinking Water State Revolving Loan Fund with funds directly allocated from the American Recovery and Reinvestment Act. The City and the District have proceeded to Phase II & III of the ultraviolet light construction project which includes consolidated chemical treatment and laboratory facilities and SCADA control space. 10

27 To maintain their filtration waiver and meet regulatory requirements, the City and the District need to provide two forms of treatment to drinking water in addition to other various requirements. This requirement has been satisfied through the addition of chlorine and the ultraviolet light treatment. In September of 2012, Lake Auburn experienced an algae bloom which negatively affected the turbidity level of the lake. Although the turbidity level was elevated, it didn t exceed level 5 which would have triggered the requirement to filter the water. The City and the District have taken a proactive approach to maintain the health of the lake by securing funds to apply an algaecide which once applied has a 10 year life, and improve area infrastructure to mitigate erosion runoff into the lake. Since 2012, the Lake s health and turbidity levels have remained at acceptable levels, thus not requiring the algaecide application. Sewer Sewage treatment is provided by the Lewiston-Auburn Water Pollution Control Authority (the Authority ), a joint venture of the City and the Auburn Sewerage District. The Authority operates a wastewater facility on the Androscoggin River, which has the capacity to process 14.2 million gallons per day of sewage. The Authority has constructed a composting facility which processes 60% of the plant s sewage sludge to produce a marketable fertilizer compound. The Authority was incorporated in 1967 to provide and maintain facilities adequate for treating wastewater of the City and the City of Auburn. It is governed by a seven-member board consisting of officials from both cities, including Lewiston s Deputy City Administrator and Public Works Director. It is supported in large part by assessments on the two members. The City s assessment is paid from the revenues of its Sewer Enterprise Fund. Androscoggin County The City is located in Androscoggin County, which is supported in large part by assessments on the City, the City of Auburn, and 12 towns. The County provides the following services: a jail, a sheriff s department, a registry of deeds, a registry of probate, and a district attorney s office. Airport The Auburn-Lewiston Airport, located in Auburn, is owned and operated jointly by the two cities. It is governed by a seven-member Board: the Lewiston Finance Director (ex-officio), a Lewiston City Councilor, a member appointed by the Lewiston City Council, the Auburn City Manager (ex-officio), an Auburn City Councilor, a member appointed by the Auburn City Council, and a member appointed by the Board (alternating between Lewiston and Auburn). The Airport is supported by assessments on the two cities, user fees, investment income, and federal and state grants. The Airport is designated a reliever facility for the Portland International Jetport. As such, the Airport is officially registered as part of the National Air System. This status has made additional federal funding available to the airport. Public Transportation The Lewiston-Auburn Transit Committee is a joint venture of the Cities of Lewiston and Auburn formed to provide bus transit services to the twin city area. The Committee is made up of seven members, three from each of the cities appointed by their respective City Councils, and one member, who may be from either city, appointed by the Committee. The Committee receives the majority of its funding from state and federal grants. Assessments are also made on the two cities for the local share of these grants. Solid Waste The City has an agreement with Mid Maine Waste Action Corporation (MMWAC) for disposal of its municipal solid waste at its waste to energy facility, located in Auburn. The City transports its municipal solid waste to MMWAC and accepts ash residue waste from MMWAC to be disposed of in Lewiston's landfill. This agreement has allowed for extending the useful life of the City's landfill until at least The current contract between the City and MMWAC expires in June

28 GOVERNING BODIES AND OFFICERS The following are the City s principal officers: City Council Two-Year Term Expires Shane Bouchard... Mayor 2020 James Lysen.... Council Member - Ward Zachary Pettengill... Council Member - Ward Alicia Rea... Council Member - Ward Michel Lajoie... Council Member - Ward Kristen S. Cloutier... Council Member - Ward Joline Landry Beam... Council Member - Ward Michael Marcotte... Council Member - Ward City Administration Edward A. Barrett... City Administrator Appointed Denis D Auteuil Deputy City Administrator Appointed Heather A. Hunter... Finance Director/Treasurer Appointed Pamela LaBelle... Tax Collector/Deputy Treasurer Appointed Kathleen M. Montejo... City Clerk Appointed William Healey... Assessor Appointed Finance Committee Robert Reed, Chairman Matthew Shaw Michael Marcotte James Lysen Michael Lachance 12

29 AUTHORIZATION OF GENERAL OBLIGATION BONDS AND NOTES Bonds, including temporary loans in anticipation of current tax revenues and federal or state grants or reimbursements, are generally authorized by a majority vote of the members of the City Council. However, the City s Charter requires that where the amount of any single purpose bonds authorized for an individual project exceeds 15% of the property tax levy of the preceding fiscal year, such authorization must be approved by the voters at a regular or special election prior to issuance. For fiscal year 2018, 15% of the fiscal year 2017 gross tax levy of $52,147,855 was $7,822,178. Notes issued in anticipation of bonds may be renewed for up to three years from the date of original issue or the time set in the vote authorizing the issue, whichever is less. Bonds which are in serial form may be payable in unequal principal amounts. The first payment on serial bonds must be within five years of the date of issue; the last payment must be made within 30 years unless a shorter term is specified by the City Council. In accordance with 30-A M.R.S.A. Section 5702, as amended, No municipality shall incur debt which could cause its total debt outstanding at any time, exclusive of debt incurred for school purposes, for storm or sanitary sewer purposes, for energy facility purposes or for municipal airport purposes to exceed 7½% of its last full state valuation. A municipality may incur debt for school purposes to an amount outstanding at any time not exceeding 10% of its last full state valuation, or any lower percentage or amount that a municipality may set, for storm or sanitary sewer purposes to an amount outstanding at any time not exceeding 7½% of its last full state valuation, or any lower percentage or amount that a municipality may set, and for municipal airport and special district purposes to an amount outstanding at any time not exceeding 3% of its last full state valuation, or any lower percentage or amount that a municipality may set; provided, however, that in no event may any municipality incur debt which would cause its total debt outstanding at any time to exceed 15% of its last full state valuation, or any lower percentage or amount that a municipality may set. 30-A M.R.S.A., Section 5703, as amended, provides that the limitations on municipal debt contained in Section 5702 do not apply to any funds received in trust by any municipality, any loan which has been funded or refunded, notes issued in anticipation of federal or state aid or revenue sharing money, tax anticipation loans, notes maturing in the current municipal year, indebtedness of entities other than municipalities, indebtedness of any municipality to the Maine School Building Authority, debt issued under Chapter 213 (now Section 5401 et. seq. of Title 30-A) and Title 10, Chapter 110, Subchapter IV (now Section 1061 et seq. of Title 10), obligations payable from revenues of the current municipal year or from other revenues previously appropriated by or committed to the municipality, and the state reimbursable portion of school debt and certain other municipal debt. Lewiston s overall debt limit is 15% of $2,237,250,000 (the 2018 State Equalized Valuation) or $335,587,500. As of June 30, 2018, the City is expected to have combined outstanding and authorized unissued debt of $194,630,570. The City s available debt capacity is $140,746,930 (see Direct Debt Summary herein). 13

30 DEBT The following table sets forth the direct debt of the City as of June 30, 2018, together with the current issue of Bonds. General Obligation Bonds and Other Direct Obligations Outstanding: General (1)... $42,592,792 School (2)... 81,707,775 Water (3)... 19,404,187 Sewer (4)... Storm Water (4)... 14,538,903 10,373,893 Total Outstanding... $168,617,550 Authorized Unissued (5)... 6,580,000 Total Outstanding and Authorized Unissued $175,197,550 Total This Issue 14,355,000 Total Direct Debt After This Issue... $189,552,550 (1) Subject to debt limit of 7½% of state equalized valuation, or $167,793,750. Following this issue, the City will have additional general borrowing capacity of $118,037,958, subject to the overall limit of 15% of state equalized valuation. Includes $3,775,000 general obligation pension bonds. (2) Subject to debt limit of 10% of state equalized valuation, or $223,725,000. Following this issue, the City will have additional school borrowing capacity of $141,315,225, subject to the overall limit of 15% of state equalized valuation. The State of Maine reimburses the City for a portion of principal and interest payable on school debt. Subject to annual appropriation by the State of Maine, debt service on $57,827,633 of these bonds is expected to be paid entirely from state subsidies. See CITY FINANCES State Aid. (3) Subject to debt limit of 3% of state equalized valuation, or $67,117,500. Following this issue, the City will have additional water borrowing capacity of $45,718,313, subject to the overall limit of 15% of state equalized valuation. Water debt service is supported entirely by user charges. (4) Subject to debt limit of 7½% of state equalized valuation, or $167,793,750. Following this issue, the City will have additional sewer borrowing capacity of 150,499,847, and storm water capacity of $155,679,857, subject to the overall limit of 15% of state equalized valuation. Sewer and Storm Water debt service is supported entirely by user charges. (5) Does not include the current issue of Bonds. See AUTHORIZED UNISSUED DEBT herein. 14

31 Five Years Outstanding Debt The following table sets forth the City s bonded debt, including bond anticipation notes, this issuance, and net debt as percentages of the City s state equalized valuation as of the end of the most recently completed fiscal years. Total Bonded Levy Supported Fiscal G.O. Bonded Debt Total State Equalized Bonded Debt Debt as % of State Equalized Debt as a % of State Equalized Year End Outstanding Valuation (1) Per Capita (2) Valuation Valuation (3) 2018 $182,972,550 $2,237,250,000 $5, ,086,629 2,203,000,000 3, ,906,210 2,174,800,000 3, ,773,434 2,157,100,000 3, ,583,219 2,196,750,000 4, (1) As determined by the State of Maine. (2) 2013 Census Estimate of 36,437 used for fiscal years (3) Includes bonded debt (as well as School and TIF debt) less water, sewer and stormwater debt. Projected Principal Payments by Purpose The following table sets forth principal payments by purpose on all general obligation bonds of the City expected, as of June 30, 2018, including the Bonds. Fiscal Storm Year General School (1) Water (2) Sewer (2) Water (2) Total The Bonds Total (3) Amortization 2019 $6,979,603 $5,751,549 $1,771,443 $1,271,670 $1,118,136 $16,892,401 - $16,892, % ,735,659 5,749,694 1,73,005 1,240,317 1,050,305 16,512,980 $1,100,000 17,612, % ,683,559 5,762,976 1,717,280 1,216,426 1,008,079 16,388,320 1,100,000 17,488, % ,697,414 5,665,153 1,674,655 1,153, ,029 14,141,714 1,100,000 15,241, % ,416,042 5,588,271 1,632,373 1,110, ,492 13,638,053 1,075,000 14,713, % ,469,248 5,301,779 1,408,482 1,059, ,102 12,048,392 1,075,000 13,123, % ,210,043 5,289,778 1,371,343 1,017, ,205 10,618, ,000 11,518, % ,926,195 4,979,766 1,131, , ,859 9,747, ,000 10,647, % ,453,668 4,788,249 1,091, , ,276 8,916, ,000 9,816, % ,918 4,634,107 1,015, , ,726 7,896, ,000 8,796, % ,014 4,044, , , ,537 6,876, ,000 7,776, % ,215 3,095, , , ,169 5,483, ,000 6,093, % ,215 3,095, , , ,326 5,384, ,000 5,994, % ,332 3,095, , , ,951 4,706, ,000 5,311, % ,166 3,095, , , ,701 4,401, ,000 5,006, % ,500 2,362, , ,425 75,000 3,221, ,000 3,821, % ,500 2,362, , ,425 25,000 3,036, ,000 3,311, % ,500 2,362, , ,425 25,000 3,036, ,000 3,311, % ,500 2,362, , ,425 25,000 3,036, ,000 3,311, % ,500 2,320, ,575 94,425 2,636, ,000 2,911, % , , % $2,592,792 $81,707,775 $9,404,187 $14,538,903 $10,373,892 $168,617,550 $14,355,000 $182,972,550 Note: Totals may not add up due to rounding (1) Includes $57,827,663 principal amount of the City s outstanding school debt for direct funded school projects, which is reimbursed by the State of Maine. (2) Supported from their respective enterprise funds. (3) Includes the Bonds. 15

32 Annual Debt Service (June 30, 2018)(1) Fiscal Storm The Bonds The Bonds Year General School Water Sewer Water Principal Interest Principal Interest(2) Total 2019 $6,979,603 $5,751,549 $1,771,443 $1,271,670 $1,118,136 $16,892,401 $5,212,328 $379,324 $22,484, ,735,659 5,749,694 1,737,005 1,240,317 1,050,305 16,512,980 4,687,144 $1,100, ,606 22,888, ,683,559 5,762,976 1,717,280 1,216,426 1,008,079 16,388,320 4,176,403 1,100, ,606 22,198, ,697,414 5,665,153 1,674,655 1,153, ,029 14,141,714 3,682,345 1,100, ,606 19,402, ,416,042 5,588,271 1,632,373 1,110, ,492 13,638,053 3,285,004 1,075, ,421, ,469,248 5,301,779 1,408,482 1,059, ,102 12,048,392 2,893,955 1,075, ,856 16,387, ,210,043 5,289,778 1,371,343 1,017, ,205 10,618,392 2,506, , ,106 14,341, ,926,195 4,979,766 1,131, , ,859 9,747,284 2,157, , ,106 13,076, ,453,668 4,788,249 1,091, , ,276 8,916,562 1,837, , ,106 11,879, ,918 4,634,107 1,015, , ,726 7,896,561 1,556, , ,481 10,555, ,014 4,044, , , ,537 6,876,562 1,325, , ,606 9,278, ,215 3,095, , , ,169 5,483,134 1,131, , ,606 7,374, ,215 3,095, , , ,326 5,384, , , ,544 7,090, ,332 3,095, , , ,951 4,706, , , ,719 6,221, ,166 3,095, , , ,701 4,401, , ,000 90,300 5,746, ,500 2,362, , ,425 75,000 3,221, , ,000 69,125 4,393, ,500 2,362, , ,425 25,000 3,036, , ,000 48,125 3,749, ,500 2,362, , ,425 25,000 3,036, , ,000 38,500 3,631, ,500 2,362, , ,425 25,000 3,036, , ,000 28,875 3,511, ,500 2,320, ,575 94,425 2,636,070 57, ,000 19,250 2,988, ,000 9, ,625 $42,592,792 $81,707,775 $19,404,187 $14,538,903 $10,373,892 $68,617,550 $38,271,935 $14,355,000 $ 4,660,680 $225,905,165 (1) Totals may not add up due to rounding. (2) Assumes average coupon rate of 3.71% on the Bonds. 16

33 Tax Supported Debt Service (1) Less Less % Fiscal General School State-Supported Net Gross State-Supported Net Net Net Principal Year Principal Principal Principal (2) Principal Interest Interest (2) Interest Debt Service Amortized 2019 $6,979,603 $5,751,549 $(3,562,638) $9,168,514 $4,119,349 $(1,875,376) $2,243,973 $11,412, % ,359,074 5,804,494 (3,562,638) 9,600,930 3,840,160 (1,779,368) 2,060,792 11,661, % ,306,974 5,817,776 (3,562,638) 9,562,112 3,423,191 (1,681,336) 1,741,855 11,303, % ,320,829 5,719,953 (3,562,638) 7,478,144 3,023,468 (1,580,853) 1,442,615 8,920, % ,019,457 5,643,071 (3,562,638) 7,099,890 2,698,500 (1,475,454) 1,223,046 8,322, % ,072,663 5,356,579 (3,562,638) 5,866,604 2,374,535 (1,362,961) 1,011,574 6,878, % ,637,742 5,344,578 (3,562,638) 4,419,682 2,051,410 (1,243,025) 808,385 5,228, % ,353,894 5,034,566 (3,562,638) 3,825,822 1,771,764 (1,121,105) 650,659 4,476, % ,881,367 4,843,049 (3,562,638) 3,161,778 1,515,629 (999,345) 516,284 3,678, % ,412,617 4,688,907 (3,562,638) 2,538,886 1,296,844 (874,678) 422,166 2,961, % ,074,713 4,099,389 (3,018,559) 2,155,543 1,108,326 (757,110) 351,217 2,506, % ,414 3,126,588 (2,130,832) 1,756, ,598 (669,518) 290,080 2,046, % ,414 3,126,587 (2,130,832) 1,756, ,594 (601,363) 238,231 1,994, % ,531 3,126,587 (2,130,832) 1,554, ,688 (529,416) 186,272 1,740, % ,365 3,126,587 (2,130,832) 1,486, ,686 (454,336) 139,350 1,625, % ,699 2,392,837 (2,130,832) 712, ,077 (376,422) 92, , % ,100 2,362,037 (2,130,832) 555, ,832 (296,058) 69, , % ,100 2,362,037 (2,130,832) 555, ,859 (213,563) 52, , % ,100 2,362,037 (2,130,832) 555, ,752 (129,214) 34, , % ,100 2,320,570 (2,130,832) 403,838 59,824 (43,309) 16, , % , ,035 4,551 4, , % $49,755,791 $82,409,778 $(57,822,421) $74,343,148 $31,660,638 $(18,063,808) $13,596,830 $87,939,978 (1) Includes projected debt service on current issue of Bonds (2) State support of school construction debt service is subject to annual appropriation by the State of Maine. See STATE AID herein. OVERLAPPING DEBT The City is situated in Androscoggin County and is a participant in the Lewiston-Auburn Water Pollution Control Authority, the Lewiston-Auburn Airport, the Lewiston-Auburn Transit Committee, the Lake Auburn Water Protection Commission, and the Lewiston-Auburn 911 Committee. The following table sets forth the outstanding bonded debt, exclusive of temporary loans in anticipation of bonds or current revenue, of Androscoggin County, the Lewiston-Auburn Water Pollution Control Authority, the Auburn-Lewiston Airport, and the Lewiston-Auburn Transit Committee, the Lake Auburn Water Protection Committee and the Lewiston-Auburn 911 Committee as of June 30, 2018 and the City s estimated gross share of such debt and fiscal 2018 assessment. 17

34 Fiscal 2018 Outstanding City Estimated Share City Overlapping Entity Debt Percent $ Amount Assessment Androscoggin County (1) $ % $ 0 $2,589,393 Lewiston- Auburn Water Pollution Control Authority (2) 17,409, % 10,893,429 3,007,290 Auburn-Lewiston Airport (3) 165,600 Lewiston-Auburn Transit Committee (4) ,554 Lake Auburn Water Protection Commission (5) ,000 Lewiston-Auburn 911 Committee (6) 1,019, % 509,900 1,069,122 (1) Source: Androscoggin County. The City is subject to annual assessment for its proportion of County expenses, including debt service. This proportion is based on the City s state equalized valuation as a percentage of the County s for the most recent year. (2) Source: Lewiston-Auburn Water Pollution Control Authority. The City is subject to an annual assessment for its proportion of the Authority s expenses, including debt service. The City supports its assessment to the Authority entirely through sewer user fees. This proportion is based on the City s share of sewage treated by the Authority s treatment plant. (3) Source: Auburn-Lewiston Airport. The Cities of Lewiston and Auburn are each assessed for 50% of those Airport expenditures not covered by the Airport s estimated revenues. The Airport has no authorized unissued debt and has no plans for any new debt authorization. (4) Source: Lewiston-Auburn Transit Committee. The City provides an equal subsidy with the City of Auburn to the Committee for its share of expenses. The Committee has no authorized unissued debt and has no plans for any new debt authorization. (5) The Commission was created to protect Lake Auburn, which is the main source of drinking water for both the City and the City of Auburn. The Commission is funded by assessments on the City and the Auburn Water District, which is substantially coterminous with the City of Auburn. (6) The Committee is a joint venture of the City and the City of Auburn, Maine, which provides a 911 emergency communication system for the Lewiston-Auburn area. The Committee is funded exclusively by equal contributions from the cities. AUTHORIZED UNISSUED DEBT Following delivery of the Bonds, the City will have $6,580,000 authorized unissued debt as follows: Amount Purpose $4,080,000 Bates Mill LLC Guarantee Bonds 2,500,000 Municipal 2014 Projects deferred $6,580,000 The Bates Mill guarantee bonds represent standby borrowing authorization that the City would utilize only in the event that the City fails to perform under its contract with the Bates Mill LLC. (See BATES MILL herein for further discussion of this contract.) Absent such failure to perform, the City does not expect to borrow against this authorization. Plans for financing the remaining authorization from 2014 is uncertain at this time. BATES MILL In 1992, the City took ownership of the Bates Mill, a 1,000,000 sf former textile factory located in downtown Lewiston, through a tax foreclosure (See PROPERTY TAXATION AND VALUATION herein for discussion of the tax foreclosure process.) In December 2003 the City entered into an agreement to sell the majority of the Bates Mill Complex (all land and buildings except the Steam Plant and Bates Mill #5 to the Bates Mill Limited Liability Company, a real estate development and management company controlled by Tom Platz. Mr. Platz is a local architect and developer who has partnered with the City in the redevelopment of the Bates Mill Complex since the mid 1990 s. Under the terms of the sale agreement, the City agreed to fund a significant amount of post-closing environmental cleanup, public infrastructure improvements, and the construction of a total of 2,040 parking spaces, 1,850 of which were to be new surface or decked surface parking spaces to support the project. The Bates Mill Sales Agreement required the City to provide a $2.5 million Line of Credit and a $5.4 million Springing Bond to secure those obligations. The required public infrastructure and post-closing clean-up has been completed and the Line of Credit has been released. 18

35 The provision of the 1,850 parking spaces were to be provided on a staggered schedule triggered by notices from Bates Mill LLC of the square footage of sections of the mill complex that they were beginning to redevelop, based roughly on the City providing 4 parking spaces for every 1,000 sf redeveloped. To date, Bates Mill LLC has provided notice for the construction of 1,368 spaces. Including 190 surface parking spaces the agreement credited the City with having provided at the time of the sale, the City has provided a total of 1,509 spaces, more than meeting the demand notice requirement. Under the terms of the original sale agreement the City is obligated to provide an additional 531 parking spaces. They will be built when demand warrants them. The Springing Bond will be released once the parking obligation is met. RETIREMENT PLANS The City contributes to the Maine Public Employee Retirement System Consolidated Plan, a cost sharing, multiple employer, public employee retirement system established by the State of Maine. The Maine Public Employee Retirement System (MePERS) provides retirement and disability benefits, cost-of-living adjustments and death benefits to plan members and beneficiaries. The authority to establish and amend benefit provisions rests with the Maine State Legislature. MePERS issues a publicly available financial report that includes financial statements and required supplementary information for the Consolidated Plan. The most recent Comprehensive Annual Financial Report, for the year ending June 30, 2017, is currently available at Certain other reports may be obtained from MePERS by calling (207) As of June 30, 2017, the most recent date available, the Consolidated Plan for Participating Local Districts ( PLDs ) had an actuarial liability of $3,016,660,721 with net assets (fiduciary net position) of $2,607,223,644 for a net pension liability totaling $409,437,077. The liability is calculated based on a percent discount rate. A copy of this valuation study is currently available at The CAFR and the Valuation Report, as well as certain other reports, are also available from MePERS by calling (207) The entire unfunded liability of, $409,437,077 was categorized as a pooled liability. As of this date, individual PLDs are not responsible for funding the pooled liability, except through their ongoing payments to MePERS. It is the City s understanding that MePERS is considering changes that could allocate pooled liability to individual PLDs, including the City. The City cannot foresee, at this time, the effect of such changes. PLD Plan members are required to contribute 8.0% of their annual covered salary and the City of Lewiston is required to contribute an actuarially determined rate. As of July 1, 2017, the current rate is 9.6% for municipal employees under Plan A, and 10.1% for certain police and firefighters under Special Plan Option #2, of annual covered payroll. The State of Maine pays 96.03% of the employer s share of State funded teachers, while the Lewiston School Department pays 3.97% for State funded and 15.65% for Federally funded teachers. The teachers employee share is 7.65%. The contribution rates of plan members and the City of Lewiston are established and may be amended by the MePERS Board of Trustees. Upon joining the consolidated plan on July 1, 1997, the City s initial unfunded unpooled actuarial liability (IUUAL) was calculated. The IUUAL represents the remaining amount of the City s pension liability under its then existing PLD at the time it transitioned to the consolidated plan. The outstanding IUUAL at that time was amortized over a 20 year period, with the annual payment increasing by 6%, until the IUUAL is paid in full. In December 2001, the City issued general obligation pension bonds, with a total par value of $16,395,000 to pay off its outstanding IUUAL. The City refunded the outstanding portion of these bonds on December 15, 2011 with an issue of $10,000,000 general obligation pension refunding bonds and a transfer from undesignated unreserved fund balance. The outstanding balance of these pension obligation bonds, as of June 30, 2018, was $3,775,000. Effective July 1, 2006, the City amended its Special Plan Option #2C to include full retirement benefits for all firefighters serving 25 years of service with a no age provision. This modification resulted in an IUAAL of $2,467,807 to be amortized over a 15 year period. As of June 30, 2017, the City remitted IUUAL payments of $269,616 as contractually agreed upon. Additionally, the City Council approved a supplemental appropriation on May 9, 2017 to fund the remaining outstanding balance of $940,

36 During the previous five years, the following total contributions were made by the City: Contributions Fiscal Period (1) Employer Employee 2017 $3,259,850 $4,109, ,247,638 3,767, ,707,047 3,749, ,562,155 3,381, ,601,873 3,267,414 (1) City contributions coincide with the State s fiscal year (July 1 - June 30). Source: MePERS and the City of Lewiston. In addition to MePERS, the City provides a pension plan administered by the City which covers certain police, fire and public works employees who joined prior to the City s participation in the Maine Public Employee Retirement System. Once the City elected to participate in MePERS, employees were no longer eligible to join this plan. This plan calls for retirement benefits of ½ of the average final compensation to be paid upon an employee attaining the age of 65 or having served not less than 25 years. Beneficiaries of fire and police retirees are also entitled to survivor benefits. Cost-of-living adjustments provided to the members and beneficiaries, are made through Finance Committee authorization. At July 1, 2017, the plan consisted of 1 retiree beneficiary. Given the amount, the City no longer obtains an actuarial evaluation and has converted it to a pure pay-as-go plan with a FY18 appropriation of $29,742. There are no active employees in the plan. The City funds the plan on a pay-as-you-go basis and budgets sufficient funds, each year, to meet the annual pension cost. As a result, no funds have been accumulated, nor are any funds expected to be accumulated for the payment of these benefits. All benefits are paid directly by the City when they become due. Year Contributions 2017 $37, , , , ,010 Other Post-Employment Benefits. In addition to pension benefits, cities and towns may provide retired employees with health care and life insurance benefits. The portion of the cost of such benefits paid by cities and towns is generally provided on a pay-as-you-go basis. The Governmental Accounting Standards Board ( GASB ) Statements 43 and 45 require public sector entities to report the future costs of these non-pension, post-employment benefits in their financial statements. These accounting standards do not require pre-funding the payment of these costs as the liability for them accrues, but the basis applied by the standards for measurement of costs and liabilities for these benefits is conservative if they continue to be funded on a pay-as-you-go basis and will result in larger yearly cost and liability accruals than if the cost of such benefits were prefunded in a trust fund in the same manner as traditional pension benefits. Although cities and towns that choose to self-insure all or a portion of the cost of the health care benefits provided to employees and retirees may establish a trust fund for the purpose of paying claims, Maine law does not currently provide cities and towns with general legal authority to establish a trust fund for the purpose of pre-funding this liability in the same manner as traditional pension benefits. The City does not pay for post-employment health benefits. Non-School retirees pay their own health insurance costs as members of the City s plan. The City s only exposure to the cost of post-employment benefits comes from the higher utilization of health services by retirees, which raises the risk profile of the entire system. For retirees from School Department, post-employment health benefits are paid by the State of Maine Department of Education. The City s actuarial accrued liability as of January 1, 2017 is $3,790,563, based on a 4% discount rate. 20

37 The following are the City s annual OPEB expenditures: Annual OPEB Cost $262,773 $249,124 $251,326 $302,609 $307,467 Actual Contribution $214,672 $206,123 $240,295 $198,169 $235,976 Percentage Contributed 81.7% 82.7% 95.6% 65.4% 76.7% Net OPEB Obligation $1,643,729 $1,508,397 $1,465,396 $1,454,365 $1,349,925 PROPERTY TAXATION AND VALUATION The major source of revenue for the City is the tax on real and personal property. The amount to be levied each year is the amount appropriated or required by law to be raised by municipal expenditures less estimated receipts from other sources and amounts voted from available funds. The Tax Collector receives the tax commitment from the City Assessor in July; all real estate and personal property tax bills are mailed by August 1. The due dates are September 15 and March 15; payments made after these dates accrue interest at a maximum rate set by the State Treasurer. The fiscal year 2018 interest rate is 7.0% per annum. Real estate taxes are a first lien on the property, subject to any paramount federal lien and bankruptcy and insolvency laws, and that lien may be enforced through the tax lien mortgage procedure. The Tax Collector, after eight months and within one year of the commitment of the tax, may give written notice to the person against whom the tax is assessed that a lien is claimed and that payment must be made within thirty days. If payment is not made within this thirty-day period, the Tax Collector records a tax lien certificate at the Androscoggin County Registry of Deeds, thus creating a tax lien mortgage on the property to the City. The Tax Collector is required to send true copies of the tax lien certificate to all mortgagees of record and to the owner of record if the property was not assessed to such owner at the time the tax lien certificate is recorded. If the tax, together with the interest and costs, is not paid within 18 months after the filing of the certificate, the mortgage shall be deemed to have been foreclosed and the right of redemption to have expired. If the tax, together with the interest and costs, is paid by the owner or any mortgagee within the applicable redemption period, the City records a discharge of the tax lien at the Androscoggin County Registry of Deeds. In case of hardship, an escrow account may be established to allow the taxpayer to accrue payments to cover all taxes, interest, and costs. Once funds in the escrow account are sufficient to pay all taxes and penalties owed, those funds may be used to re-purchase the property from the City. Alternatively, the City may, after eight months and within one year of the commitment of the tax, obtain a judgment for the tax, interest, and costs of suit and proceed to sell the real estate publicly. Such real estate may be redeemed within one year of the date of the sale. The City may also sell such real estate without a judgment, delivering the deed to the purchaser only after two years have elapsed. To enforce unpaid personal property taxes, the City, pursuant to its ordinances, may refuse the payment of any monies due a taxpayer and withhold the issuance of various licenses and permits. A single tax rate applies for each fiscal year to all taxable real and personal property. The rate is equal to the amount to be raised divided by the total assessed value. The following table sets forth the trend in the City s assessed valuations, tax rates, gross tax levies and tax levy per capita. 21

38 Valuations Fiscal Real Estate Personal Property Total Assessed Tax Rate Per $1,000 of Assessed Gross Tax Levy Per Year Valuation (1) Valuation (2) Valuation Valuation Tax Levy Capita (3) 2018 $1,742,564,075 $165,800,400 $1,908,364,475 $28.02 $53,472,373 $1, ,729,746, ,784,950 1,893,531, ,147,855 1, ,732,759, ,633,100 1,896,392, ,904,270 1, ,717,688, ,014,650 1,905,703, ,672,650 1, ,705,678, ,577,950 1,891,256, ,004,815 1, (1) Excludes Homestead Value Exemption. (2) Excludes Business Equipment Tax Exemption. (3) The 2013 Census Estimate used for fiscal years 2014 to 2018 is 36,437. Classification of Property The following table shows the breakdown of the total assessed valuation for fiscal year 2018 by use: Assessed Percentage Use Valuation of Total Residential... $1,001,150,620 (1) 52.5% Commercial ,897,640 (2) 25.5 Industrial ,194,050 (2) 8.8 Utilities ,122,170 (2) 13.2 Total... $1,908,364, % (1) Does not include $53,521,230 Homestead Exemption Value. (2) Does not include $61,592,264 Business Equipment Tax Exemption. State Equalized Valuation Under Maine law, cities and towns are required to revalue when local assessed valuation is at or less than 70% of state equalized valuation. Assessed Fiscal Year State Equalized Valuation City Assessed Valuation Valuation as a % of Equalized Valuation 2018 $2,237,250,000 $1,908,364, % ,203,000,000 1,893,531, ,174,800,000 1,896,392, ,157,100,000 1,905,703, ,196,750,000 1,891,256,

39 Largest Taxpayers The following is a list of the ten largest taxpayers for fiscal 2018 (1): Fiscal 2018 % of Total Nature of Assessed Assessed Name Business Valuation Valuation Central Maine Power Utility $ 122,171, % Brookfield White Pines Utility 87,034, Wal-Mart Stores East LP Distribution Center 72,290, Northern Utilities/Unitil Utility 23,762, T D Bank Banking 19,745, Lepage Bakeries Bakery 19,662, Gendron & Gendron Construction 12,754, L L Bean Telemarketing 12,589, Lewiston Prop LLC Real Estate 10,950, Elmet Technology Metal/Wire Mfg 10,474, Total $391,434, % (1) All these taxpayers are current on payment of real estate and personal property taxes to the City. 23

40 CALCULATION OF TAX LEVIES The following table shows the details of the calculation of the tax levies for the current and most recent fiscal years: Fiscal 2018 Fiscal 2017 Fiscal 2016 Fiscal 2015 Fiscal 2014 Estimated Requirements: (1) Operational Budget: General Government... $2,756,868 $2,671,888 $2,605,780 $ 2,673,110 $ 2,689,041 Public Works... 6,089,735 6,111,938 5,958,907 5,867,307 5,921,825 Public Safety... 12,653,228 12,043,452 11,838,635 11,775,030 11,494,659 Culture and 1,264,665 1,201,627 1,134,310 1,286,079 1,323,801 Recreation... Social Services... 1,153,181 1,015,431 1,046,563 1,104,444 1,107,265 Education... 74,200,068 68,793,143 64,718,832 61,177,976 58,440,895 Capital Outlay ,842 11,250 72,300 Debt Service... 8,044,655 7,862,252 8,276,231 8,761,850 8,615,293 Intergovernmental... 4,008,069 3,845,588 3,811,611 3,658,010 3,658,400 Miscellaneous (2)... 9,188,079 9,039,144 8,741,498 7,741,967 7,785,768 TIF Financing... 2,139,492 2,134,625 2,112,236 2,184,765 2,100,977 Overlay... 1,596,049 1,056, ,297 1,120, ,550 Total Estimated Requirements $123,094,089 $115,775,989 $110,992,742 $107,362,779 $104,186,774 Less: Anticipated Revenue... 66,269,904 58,869,757 56,695,266 54,471,655 50,391,069 Prior Year s Surplus 126,332 1,938, ,810,734 Total Estimated Revenue 66,396,236 60,808,017 56,695,266 54,471,655 52,201,803 Amount to be Raised Through Tax Levy... $ 56,697,853 (3) $ 54,967,972 (4) $ 54,297,476 (5) $ 52,891,124 (6) $ 51,984,971 (7) (1) Estimated requirements and anticipated revenue do not include the budgets of the Water, Sewer and Stormwater Departments. (2) (3) Includes Insurance, Retirement, Workers Compensation, and Unemployment Compensation. Includes $1,499,665 State Homestead Exemption reimbursement and $1,725,815 State Business Equipment Tax Reimbursement (4) Includes $1,152,063 State Homestead Exemption reimbursement and $1,668,054 State Business Equipment Tax Reimbursement (5) Includes $768,043 State Homestead Exemption reimbursement and $1,625,163 State Business Equipment Tax reimbursement. (6) Includes $753,935 State Homestead Exemption reimbursement and $1,464,540 State Business Equipment Tax reimbursement. (7) Includes $761,634 State Homestead Exemption reimbursement and $1,218,526 State Business Equipment Tax reimbursement. Tax Base Sharing Under Maine Law, a municipality may establish an agreement to share the tax revenues generated by a specific parcel or parcels of land with another municipality. The City has two such agreements with the City of Auburn: the Auburn- Lewiston Airpark located in Auburn and the Brookfield White Pines (BWP) Hydroelectric Generating Facility in Lewiston. The Airpark is a 125-acre industrial park located next to the Auburn-Lewiston Airport. The Airpark had assessed valuation of $22,286,200 and generated tax revenues of $512,360 in fiscal year 2017 of which $179,326 (35%) was paid to the City of Lewiston. In addition, tax revenue from a sphere of influence adjacent to the Airpark generated tax revenue at a rate of 17.5%, providing additional taxes of $35,220 to the City. The BWP facility is located at the falls in the Androscoggin River between Auburn and Lewiston, near the respective downtowns. The facility is capable of generating about 25 megawatts of power, and has a fiscal 2018 assessed valuation of $36,393,200, generating tax revenues of $1,019,737, of which 82.5% is retained by the City and 17.5% is paid to the City of Auburn. 24

41 TAX COLLECTIONS AND ABATEMENTS The following table compares the City s tax collections with its gross tax levies for the past five fiscal years. Fiscal Gross Collected Year of % of Tax Collected as of % of Net Year Tax Levy Levy* Levy 3/30/18 Levy 2018* $53,472,373 $51,041, % $51,041, % ,147,855 51,006, ,564, ,904,270 50,960, , 808, ,672,650 49,607, ,627, ,004,815 48,803, ,964, *For fiscal year 2018, collection amount is as of March 30, CITY FINANCES Budget and Appropriation Process The budget process in the City of Lewiston normally commences with a request by the City Administrator that all departments submit to him, in writing, a detailed estimate of the appropriations required for the efficient and proper conduct of their respective departments during the next fiscal year. On or before the first day of April the City Administrator must submit to the City Council a copy of the budget for the ensuing fiscal year which contains a clear general summary of its contents and, in detail, all estimated income, the proposed property tax levy and all proposed expenditures, including debt service. The City Council, by resolution, adopts the budget not later than one month prior to the end of the current fiscal year. In the event the Council fails to adopt the budget at least one month prior to the end of the current year, the Administrator and School Committee, within seventy-two hours thereafter, present a final budget to the Council. If the Council fails to adopt a budget at least twenty days prior to the end of the current fiscal year, the Administrator s and School Committee s final budget are deemed to be automatically adopted. 25

42 Budget Comparison (1) The following table sets forth the final budgets for fiscal years 2014 through 2018: Fiscal 2018 Fiscal 2017 Fiscal 2016 Fiscal 2015 Fiscal 2014 General Government.. $2,756,868 $ 2,671,888 $ 2,605,780 $ 2,673,860 $ 2,693,141 Public Safety... 12,653,228 12,043,452 11,838,635 11,775,030 11,513,709 Public Works... 6,089,735 6,111,938 5,970,749 5,875,307 5,965,475 Human Services... 1,153,181 1,015,431 1,046,563 1,104,444 1,107,265 Culture/Recreation... 1,264,665 1,201,627 1,134,310 1,286,079 1,326,801 Debt Service... 8,044,655 7,862,252 8,276,231 8,761,850 8,615,293 Intergovernmental (2)... 4,008,069 3,845,588 3,811,611 3,658,010 3,658,400 Education... 74,200,068 68,793,143 64,718,832 61,177,976 58,440,895 Miscellaneous (3)... 9,188,079 9,039,144 8,741,498 7,744,467 7,788,268 Total General Fund... $119,358,548 $112,584,463 $108,144,209 $104,057,023 $101,109,248 Water, Sewer, & Stormwater Enterprises (4) 14,697,883 13,873,335 13,500,501 13,500,641 13,181,835 Total General Fund and Enterprises... $134,056,431 $126,457,798 $121,644,710 $117,557,664 $114,291,083 (1) These categories include Capital Outlay. (2) Intergovernmental includes payments to the Auburn-Lewiston Airport, the regional 911 communications system, the Lewiston- Auburn Regional Transit Committee, and Androscoggin County. (3) Miscellaneous includes Insurance, Retirement, Workers Compensation, and Unemployment Compensation. (4) The Water and Sewer Enterprises include debt service for projects within those divisions. These Enterprises are entirely supported through user charges. A Stormwater Enterprise Fund was established as of July 1, As with the Water and Sewer Enterprises, the Stormwater Enterprise will be fully supported through user charges. STATE AID The City receives financial assistance from the State of Maine through a number of programs. State aid is subject to annual appropriation. Fiscal 2017 State Aid totaled $48,704,322. State Aid, as of March 31, 2018, totaled $41,466,643 (unaudited). School aid represents the largest proportion of state funding. Under Maine statutes, the State is required to allocate funds equaling a certain percentage of approved educational expenses, including debt service for certain State-approved construction projects. These funds are allocated based on calculated amounts per-pupil, adjusted by valuation, and certain other factors. The percentage of the school budget supported by state aid for fiscal 2018 was 71.71%. In fiscal 2017, School Aid equaled $46,009,433 as of year-end. School Aid, as of March 31, 2018, totaled $39,473,533 (unaudited). The State of Maine has approved state subsidies for three recent school construction projects. These were replacing the Farwell Elementary School, the Pettingill Elementary School, and the Robert V. Connors School, a new consolidated elementary school under construction with a projected capacity, to replace the Longley and Martel Elementary Schools. The City issued $11,026,000 general obligation bonds on November 1, 2007 to finance the replacement of the Farwell Elementary School. Subject to annual appropriation by the State of Maine, the State is expected to fully subsidize debt service on $10,426,410 par amount of those bonds, or approximately 94.6% of the total. The City issued $18,975,000 general obligation bonds on December 15, 2008 to finance replacement of the Pettingill Elementary School. Subject to annual appropriation by the State of Maine, the State is expected to fully subsidize debt service on $18,211,265 par amount of those bonds, or approximately 96.0% of the total. On October 4, 2017, the City, through the Maine Municipal Bond Bank, sold two series of general obligation bonds totaling $44,721,394, to construct the Connors Elementary School and relocate the Lewiston High School s Sport Complex. One bond, totaling $42,616,633 is expected to be fully subsidized by the State of Maine. The second issue for $2,104,761 represents the combined project s local share cost. 26

43 Another major aid program is State-Municipal Revenue Sharing. This program distributes a percentage of State sales and income tax revenue to Maine municipalities. The formula dictates that approximately 5% of the State s sales and income taxes are to be distributed in this manner. The allocation of these funds is based upon population and property tax burden, with greater amounts going to communities with larger populations and higher tax rates. Distributions of State Revenue Sharing have been threatened in recent years as the State looks for ways to balance their budget. However, recent enacted legislation preserves this municipal revenue source through In fiscal 2017, the City received $2,694,889 through this program, and $1,993,110 for fiscal 2018, as of March 31 st (unaudited). Maine state law imposes limits on municipal property tax levies (see SOURCES OF PAYMENT AND REMEDIES Limitation on Municipal Property Tax Levy herein) and provides that the State will increase school aid to a level that will support 55 percent of eligible public school expenditures no later than fiscal The legislation also provides for increases in municipal revenue sharing. Due to the present fiscal demands at the State, the 55 percent funding level for school aid has been delayed. MOTOR VEHICLE EXCISE The motor vehicle excise tax is assessed at a uniform state-wide rate based on factory list prices on domestic vehicles and port of entry (POE) prices on foreign vehicles. The rates are based on the automobile s age as follows: $24.00 per thousand the first year, $17.50 the second year, $13.50 the third year, $10.00 the fourth year, $6.50 the fifth year, and $4.00 for the sixth and subsequent years. The tax rate always applies to factory list/poe prices as suggested by the manufacturer at the time of manufacture. Fiscal 2017 collections were $4,897,516 and fiscal 2018 receipts totaled $3,642,970 as of March 31 st. INVESTMENTS The City invests cash balances from its various funds in demand deposits, certificates of deposits, and perfected repurchase agreements. As of March 31, 2018, the market value and carrying value of the City s General Fund cash and money market funds were $28,300,004 and the total amount invested in fully insured certificates of deposit was $6,708,985. The audited balances as of June 30, 2017, are $17,034,239 for cash and money market funds and $6,657,985 for fully insured certificates of deposit. WATER, SEWER, AND STORM WATER ENTERPRISES The operations of the water, sewer and storm water divisions are entirely supported by user charges. All enterprise rates are under the control of the City Council, although the City must seek permission of the Maine Public Utilities Commission for any increases in water rates. The basic quarterly rate for water is $45.60 for the first 1,200 cubic feet of metered consumption, $2.95 per 100 cubic feet for the next 9,000 cubic feet of metered consumption, and $2.65 per 100 cubic feet for any additional usage. These rates went into effect on July 1, 2013, an increase totaling 20% over previous rates. As a result of this increase, the Water Division will remain fully supported by user charges. The City s basic sewer rate, increased on July 1, 2017 by 16% in order to maintain full cost recovery. The sewer rates are $2.90 per 100 cubic feet for the first 800 cubic feet of metered water consumption, and $4.82 per 100 cubic feet for any excess metered water consumption. In addition, there is a ready-to-serve charge which is based on meter size. An enterprise fund was established in July 2006 to fund the cost of storm water operations through user charges rather than property taxes. The rate for storm water user charges is based on the square footage of impervious surface area on properties in the City, a measure which reflects the impact of a property on the storm water system. In order to minimize administrative burdens and expenses, the current flat fee of $60 per year for the first 2,900 square feet of impervious surface has been established. Single family homes are charged this flat rate and duplex residential units are charged a flat rate of $90 per year. Other properties are charged a flat rate of $60 per year for the first 2,900 square feet of impervious 27

44 surface and $ for every additional square foot exceeding the base amount. These rates reflect a 15% rate increase for the storm water utility on July 1, COLLECTIVE BARGAINING The City employs approximately 1,377 full-time equivalent employees, of whom 1,025 are employed by the school department, 94 by the police department, 79 by the fire department, by the public works department (including water, sewer, and stormwater) and the balance by various other departments. City employees other than confidential employees are entitled to join unions and to bargain collectively on wages, hours and other terms and conditions of employment. Approximately 1,269 full time employees are represented by 12 unions. The following table indicates the status of contracts between the City and the various unions representing City employees. Union Contracts Contract Employee Group Expiration Teachers 8/31/18 Food Service Workers 6/30/19 School Administrators 8/31/19 Educational Technicians 8/31/19 General Government 6/30/20 Police: Patrolmen 6/30/18 Police: Supervisory 6/30/18 Firefighters 6/30/19 Department of Public Works 6/30/20 Food Service Managers 8/31/19 Professional-Technical 6/30/20 General Government School 6/30/20 PHYSICAL AND ECONOMIC CHARACTERISTICS General Lewiston is the second largest city in Maine with a population of 36,592 (2010 census). Lewiston is the largest city in the Lewiston-Auburn Metropolitan Statistical Area (MSA), the fourth largest MSA in Maine, with a population of 107,702 at the last Census count. The other major municipality in the MSA is the City of Auburn. The City is part of a broad and diverse economy. In addition to the economic opportunities in the Lewiston-Auburn MSA, City residents find employment opportunities as far away as Augusta, Portland, southern Maine, and further south in New Hampshire and Massachusetts. Given the geographic dimensions of the state, long commuting distances are not unusual. The City is a major junction for State Highways 4, 121, 126, 136, and 196, and U.S The Maine Turnpike, which is Interstate 95, is a major connector to southern New England and the rest of the nation. The City is served by three interchanges, with one in Lewiston, and one in each of the neighboring communities of Auburn and Sabattus. Private air service is available at the Auburn-Lewiston Airport. Commercial air service is available at the Portland International Jetport, 34 miles to the south, and at Bangor International Airport, 100 miles to the north. Public transit service is provided six days a week in Lewiston. Located at the base of the Great Falls of the Androscoggin River, Lewiston harnessed the power of the river and developed as a manufacturing center, mostly of textiles, which drove the local economy in the nineteenth and early twentieth centuries. In recent years, Lewiston s economy has diversified, reducing the City s dependence on manufacturing and making the community less susceptible to economic downturns. Commerce and services, such as 28

45 health care, financial services, education (Lewiston is the home of Bates College and three other colleges), precision manufacturing, telecommunications and warehousing/distribution now dominate the City s economic life. Principal Employers (1) The following is a list of the largest employers in the City, except for the City itself. Name Product/Service Approximate # of Employees Central Maine Medical Center Health Care 2,025 Sisters of Charity Health Care Systems Health Care 1,900 TD Bank Banking 989 Bates College Education 839 Wal-Mart Distribution Center Retail Distribution 807 McKesson Health Care Administration 401 L.L. Bean, Inc. 240 Telemarketing (700 seasonal) +100 manufacturing 340 Lepage Bakery Bakery 300 Androscoggin Home Health Health Services 242 Carbonite Computer Data Center 175 Geiger Brothers Printed & Novelty Products 215 State of Maine Department of Human Services 230 Hannaford Grocery Store 197 Tri-County Mental Health Social Services 178 Lewiston Sun/Journal Newspaper Publication 170 Elmet Technologies Primary Metals Mfg. 153 Maine Community Health Options Health Insurance Cooperative 147 Shaw s Supermarket Grocery Store 143 Argo Marketing Marketing and Call Center 135 Boston Brands of Maine Liquor Mfg. & Distributor 135 Marshwood Center Nursing Home 132 Marden s Retail 130 Russell Street Rehabilitation Health Services 130 Community Concepts Nonprofit Housing & Service Provider 75 Northeast Bank Banking 60 Grand Rounds Medical IT 60 Senior Flexsonic Pathways Precision Metal Fabrication 58 Rinck Advertising Marketing/Public Relations 50 (1) As of April

46 Employment and Payrolls Number of Firms Payroll Number of Employees 2016 Manufacturing.. 69 $67,572,232 1,543 Non-Manufacturing. 1,036 $900,591,837 20,675 Total $968,164,069 22, Manufacturing.. 67 $ 70,051,365 1,585 Non-Manufacturing. 1,032 $874,627,367 20,535 Total. 1,099 $952,477,847 22, Manufacturing.. 73 $ 74,000,766 1,669 Non-Manufacturing. 1,008 $874,627,367 20,895 Total. 1,081 $948,628,133 22, Manufacturing.. 75 $ 71,363,584 1,630 Non-Manufacturing. 1,011 $815,250,232 20,360 Total. 1,086 $886,613,816 21, : Manufacturing.. 73 $ 84,308,084 1,635 Non-Manufacturing. 1,059 $873,620,052 22,253 Total. 1,132 $957,929,136 23,888 Source: Maine Department of Labor, Center for Workforce Information and Research, Quarterly Employment, Wages, and Contributions Reports (ES-202 Program). Data based on place of employment. Data are annual averages for each year. 30

47 Building Permits The following table sets forth the number of building permits issued and the total reported dollar value of new construction and alterations for fiscal years 2009 through 2017, and through the 3 rd quarter for fiscal 2018 for private and public construction projects. Total Fiscal Permits Non- Additions & Year Issued Residential Residential Alterations (1) Total $2,091,810 $47,553,889 $10,642,576 $60,288, ,182,507 3,163,912 22,237,078 28,583, ,753,989 $913,931 10,525,258 20,193, ,299,330 44,554,954 1,173,413 50,027, ,160,470 20,642,977 1,189,825 29,993, ,592,870 16,628,693 1,533,424 32,785, ,351,466 21,713,521 1,607,533 33,672, ,393,290 12,695,435 11,407,754 31,496, ,498,493 49,082,619 2,200,157 63,781, ,490,037 14,609,385 2,915,173 24,014,595 (1) Includes accessory buildings, renovations and tenant fit-out, additions Source: City of Lewiston, Development Department ECONOMIC DEVELOPMENT Between January 2000 and December 2009, $432.6 million in public and private development was built in the City. Since January 2010, $277.2 million in economic development investment has been completed or is underway. Investment has occurred across a broad spectrum of industries, including health care, manufacturing, warehousing/distribution/logistics, financial services, telecommunications, hospitality, and multi-family development. Lewiston s economy has diversified significantly from its origins in textile and shoe manufacturing. The community and economy are healthier for it. The narrative and charts below detail the more significant recently completed or in progress economic development projects in various sectors of the City. Centreville (downtown) Downtown Lewiston is experiencing a level of reinvestment that has not been seen for a generation. In the first decade of the 21 st century $212 million was invested economic development, including $21.7 million of City investment in road, streetscape, and parking infrastructure improvements, as well as expansion and improvements at the library. Private sector investment and business growth has been supported through the creation of 2,526 parking spaces. Since January 2010, an additional $111.9 million in development has been completed or begun, including the relocation and expansion of Central Maine Medical Center s emergency room and lab, construction of the Lincoln Street Parking Garage, several new restaurants, and the renovation of several historic buildings for housing and other uses. In 2016 a historic downtown building located at 46 Lisbon Street was renovated into 2 market rate apartments and street level commercial space by two architects who purchased the building in 2015, relocating from Manhattan to Lewiston. Rinck Advertising relocated to another historic building that had been mostly vacant for 30 years. The building had $1.6 million invested in renovations. With 50 creative employees, Rinck is bringing new energy and vitality to the street. 31

48 Auburn based Center Street Dental purchased 110 Canal Street in 2015, and spent approximately 18 months designing and renovating the space. They invested $1.9 million into the building and the dental practice expanded, relocated, and rebranded as Maple Way Dental in the fall of Construction is underway on the 63 unit The Hartley Block mixed income housing project being built in the heart of downtown at 159 Lisbon Street. The project will have a mix of one, two, and three bedroom units with 22 of them being market rate. The building will have 4,000 s.f. of commercial space for rent at street level. Construction costs are $9 million. A Massachusetts based developer, Weston and Associates, acquired three residential development properties in 2015, and invested $14 million in renovations. Two of the properties, Chestnut Place and Gateway apartments are located in the downtown; the third, Pleasant View Acres, is located in an outer residential neighborhood. In 2013 Argo Marketing, a multi-division marketing, consulting and management company specializing in direct response advertising across all telecommunications spectrums bought a derelict 16,000 s.f. building in the heart of downtown Lewiston, invested $2.4 million, and transformed it into their corporate headquarters, training center, and an inbound call center that includes customer care, social media management, and back end operational support. Founded in 2003 as a one man operation, Argo has had consistent and sustained growth. They employed 80 people at another downtown location. To date with this relocation and expansion they have created an additional 90 jobs. Their building rehabilitation includes 5,000 s.f. of commercial space done on spec. which has been leased, adding to the diversity and vitality of Lisbon Street. Argo took tenancy of their new space in January Rainbow Bikes, a well-known regional bike shop, purchased a downtown building in December The Grand Opening celebration for the 5,000 s.f. of renovated space was held in December Located in the same building as Rainbow Bikes are Quiet City Books, and Ben s Burrito s, a restaurant established in 2016 which is adding to the mix of restaurants and growing vitality on Lisbon Street. Several historic buildings have been renovated or work is underway to redevelop them with commercial space at street level with office, studio or residential uses above. After more than a year of renovations to the building, Forage, a local foods market, grocery store, café, and wood fired bakery opened in spring A yoga studio, artist space and apartment occupy the upper two floors. Eric Agren, the owner of Fuel restaurant, is considered by many to be the spark that ignited downtown s resurgence. Agren renovated the historic Lyceum Hall in 2007 and donated the space to a gallery. After the gallery closed, Agren further improved the space in 2015 adding a special events room for private and community events. Agren renovated a 5,000 s.f. urban loft style apartment above the restaurant and gallery, redefining downtown living in Lewiston. In 2009 he purchased and renovated a building across the street from Fuel, opening a second restaurant, Marché, with a market rate apartment above. In 2011, he converted Lyceum Hall to condominiums and sold the top floor to a local dentist who renovated it for use as his home. In 2012, Agren renovated a neighboring building, building three market rate apartments on the second floor. The first floor of this building has been renovated for a start-up microbrewery, Bear Bones Beer, which opened fall This brewery is the second microbrewery to locate in Lewiston, the third in the Lewiston/Auburn area, adding to Maine s growing craft beer economy. In 2013, Agren renovated the 3 rd floor of Lyceum Hall, building two residential condominiums. The apartments were leased and the condos sold before they were completed. Bear Bones Brewery recently purchased their commercial condominium and have plans to expand the brewery, seating area, and to install a commercial kitchen. To help spark the development of more market rate housing downtown, the City sold 84 Lisbon Street to a party who redeveloped the top floor as their home, and created a combined total of four market rate apartments on the second and third floors. The street level space was renovated for commercial use which is tenanted by The Vault, a wine and beer shop. This formerly dilapidated property was sold for $50,000, and is now back on the tax rolls, adding to the life and vitality of Lisbon Street. With the success of housing above Marché, Fuel, and 84 Lisbon Street, interest in redeveloping smaller scale historic downtown buildings with market housing above and street level commercial has increased. Two local architects 32

49 purchased a historic building and renovated the second floor space into an apartment. The street level space is tenanted by Anchour, a marketing/public relations company. The McGillicuddy Building was purchased in spring It is a National Historic Register property. In 2013, a full gut rehabilitation of the interior, replacement of all windows, and cleaning and repointing of exterior brick has resulted in the creation of eight market rate apartments on the upper floors. All of the apartments were rented prior to construction being completed. A restaurant occupies the street level space. As quickly as it is developed market rate housing west of Park Street is snatched up, a testament to the strength of the market demand for quality downtown living options. Developers have taken notice as is evidenced by the Hartley Block. A $5 million, 29-unit workforce housing project called Pierce Place has recently been completed and is welcoming new tenants. It is the first significant new investment in area of the city ravaged by a series of fires in In addition to funding infrastructure improvements, the City has encouraged and helped support these downtown revitalization efforts with Elevator, Life Safety, and Façade Grant Programs as well as, a low-interest loan program. These grant and loan programs are funded through the Federal Community Development Block Grant Program, requiring private sector matching funds and target the downtown Lisbon and Main Street corridors. Many of the projects listed above took advantage of these loan and grant programs. In 2011, Community Concepts, Inc. built and took occupancy of a $2.2 million Class A office building adjacent to downtown s Kennedy Park. Seventy-five people, including the agency s top management, work in the building. The City has continued to invest in public parks that will enhance Lewiston s desirability as a place to live. Installation of a new soccer field, fencing, shelter, and play equipment at Mark W. Paradis Park began in the 2012 construction season and was completed in In 2010, a new pool house was built adjacent to the public pool in Kennedy Park, the downtown s most utilized public park. In 2017 CDBG funds were used to install new playground equipment in Lionel Potvin Park. The basketball court will be resurfaced this year along with a water feature and new benches. Construction will begin this summer on Shane s Inspiration in Marcotte Park, Maine s first universally accessible playground. Bates Mill Redevelopment The City led the charge in redeveloping and revitalizing the Bates Mill Complex. This downtown facility, once a textile mill of 1.25 million square feet, has been co-developed by the City and a private developer as a multi-use complex. Currently, ten business tenants employ approximately 1,300 people and lease about 490,000 s.f. When fully redeveloped, employment in the Bates Mill Complex is expected to reach 5,000. Recent activity in the Bates Mill Complex includes diversifying the mix of uses to include housing and light manufacturing. Grand Rounds, a San Francisco based medical information services company took occupancy of 22,000 s.f. of space on the top floor of Mill #6 in late winter Renovation of the space cost $1.7 million. They currently employ 60 people and plan to grow to 150 employees over the next 5 years. A Grand Opening was held in November 2012 for The Lofts at Bates Mill, a 48 unit mixed-income housing project. The addition of high quality urban loft style apartments to the complex will add significantly to the after business hours vitality of the complex and downtown, fostering and supporting restaurant, retail, service and cultural activity. More details are provided in the Housing TIF section. Willis Insurance took occupancy in August 2012 of 10,000 s.f. of Class A office space renovated for them in Bates Mill #2 Wing/Storehouse. In 2014, Willis Insurance was purchased by Cross Insurance Agency. Cross Insurance offices remain in Bates Mill #2. In 2013, Community Health Options - a newly created health insurance cooperative initially capitalized by the federal government and created by the private sector to provide competition in the health insurance marketplace took occupancy on the floor below Cross Insurance, and in 2014 took another floor in the building, expanding their presence to 20,000 s.f. 33

50 In 2014 and 2015, Community Health Options signed up approximately 80% of Maine residents signing up for health coverage utilizing the Affordable Care Act insurance exchanges. Baxter Brewing began shipping beer in January 2011, from 5,000 s.f. of mill space renovated into a 30 barrel craft beer production brewery. They invested $1.4 million into the renovation and equipment. Baxter was the first brewery in New England to produce and deliver micro-brewed beer in cans. Baxter was very well received in the market place, and in short order was only able to meet less than 50% of demand. They doubled production capacity in summer 2011, and announced plans in October 2012 to increase that capacity 400%. In March 2014, they completed that expansion. They have grown from 5,000 barrels of production in their first year to having capacity for 33,000 barrels three years later, making them the 3 rd largest brewery in Maine. They have grown from 5 employees to 25. They are now running three shifts and are able to keep up with market demand, but they are continuing to expand their distribution footprint. To date they have invested $4 million and renovated 5,000 s.f. of mill space above the brewery for use as their corporate offices. Construction is underway on a 4,800 s.f. tap room being built adjacent to the brewery that will open in summer Bates Mill LLC has completed renovating the Atrium area between Mills #1 and #2 with a total investment of $2.5 million for new entries, an elevator, food court, retail space, and a grand staircase connecting the east and west sides of the Complex. The Atrium has been used to host several gala events and conferences. The long term plan for the space is for restaurant/retail space as part of the larger Bates Mill campus. The following is a brief review of Bates Mill development since Bates Mill buildings #3, #7, and #6 were sold to Bates Mill LLC in 2001, with a developer committed to invest an additional $10 million in the mills. The rest of the complex, with the exception of Mill #5 and the steam plant, was sold to the same development group in A more detailed discussion of the future of Mill #5 site can be found in the Western Gateway section below. The largest single tenant in the Mill Complex is TD Bank. They occupy all of Bates Mill #3 and #7 (over 200,000 s.f.), employ over 900 people at the complex, and have invested over $16 million in the Bates Mill Complex. TD Bank recently extended their lease to Beginning in 2005, more than $5 million has been invested in redeveloping Mill #6. Current tenants include Fishbones, an upscale seafood restaurant; 17,000 s.f. of back office operations for Androscoggin Bank; Bates Mill Dermatology; and Symquest, an IT and managed print services company. Davinci s Restaurant, an early tenant of Mill #1, relocated to Mill #2 Wing and Storehouse in July 2007, tripling their square footage. Development cost for this new space was $600,000. Southern Gateway Since 2004 a combination of private and public investment in the Southern Gateway transformed this important area from blight and despair to vitality and promise. In 2004, Oxford Networks invested $4 million constructing and equipping a 3,000 s.f. building on Lisbon Street to house its fiber optic, video, and telecommunications switching equipment on Lisbon Street. In September 2004, Oxford Networks took occupancy of an 18,000 s.f., $1.6 million Class A office building built for them in the gateway. In addition to these impressive building projects, Oxford Networks invested $10 million installing a state of the art fiber optic network in downtown Lewiston and Auburn, and have continued to expand to L.A. industrial parks. This world-class fiber optic infrastructure, which can transmit data at 10 gigabits per second (10X faster than the celebrated Google Town fiber that Google is expanding in select locations around the country which transmits at 1 gigabit per second) makes Lewiston more competitive in attracting companies with high telecommunications needs. Other Southern Gateway businesses include VIP Parts, Tire and Service s flagship store. The company bought and invested $1.8 million renovating an 18,000 s.f., 1906 vintage building in the Gateway in Andover College renovated 13,000 s.f. of former warehouse space in the gateway into first class educational space at a cost of $800,000. Since opening, enrollment in the college has far exceeded expectations. Andover College was subsequently acquired by Kaplan University, a major provider of online education. With 550 students and nearly 100 faculty and staff, the 34

51 Lewiston campus has Kaplan s highest enrollment numbers in Maine. The school was recently accredited to offer fouryear degrees. In 2018, Kaplan was acquired by Purdue University Global. Northeast Bank moved their corporate headquarters into their 27,800 s.f., $2.83 million Class A office building in In 2011, Northeast Bank merged with a Boston based financial services company and became a subsidiary of Northeast Bancorp, expanding the reach of some of their services nationally. The Public Theatre, an equity theater company that was an early pioneer in the Southern Gateway, has completed Phase III of their four-phase, $2.4 million expansion plans. Franklin Property Trust is the developer and owner of the Kaplan University, Oxford Networks and Northeast Bank buildings. A TIF District was created to support developing these projects. In late 2010, Argo Marketing took occupancy of 4,500 s.f. of space at 415 Lisbon Street before renovating and expanding to their current location in the downtown outlined in the Centreville section. Canusa Corporation, an international trading company processor of recyclables and industrial plastics; and Aizoon, an international technology consulting firm have leased space at 415 Lisbon, Street, filling a portion of the vacated space. Western Gateway /Riverfront Island In October 2007, the City adopted a formal development program for the Western Gateway district. Much like the Southern Gateway described above, the Western Gateway was recognized as a focal point for redevelopment efforts in the downtown area and should serve as an appealing welcome for those travelling to Lewiston across the Androscoggin River. The City identified four major project areas for the initial phase of the Western Gateway development program: Construction of a $10 million, 100-room high quality hotel located along the Lewiston riverfront. Redevelopment of the 345,000 s.f. Bates Mill #5 on the corner of Lincoln and Main Streets. Clearance and redevelopment of the R.I. Mitchell site (15 Lincoln St.). Redevelopment/improvement of the Bates Mill #5 surface parking lot to support the Western Gateway and other associated projects. In 2007, the City acquired and cleared 15 Lincoln Street. An underground Combined Sewer Overflow (CSO) facility was built on a portion of the site to meet Federal clean water requirements, at a combined total cost of $5.6 million including acquisition and clearance. The CSO project saved the City an estimated $14 million in comparison with the alternative of separating sewer and storm water lines. Acting upon another Western Gateway Development District goal, the 396-car, $5 million Lincoln Street Parking Garage opened in December It is located on the southwest corner of the Bates Mill #5 surface lot. In 2012, the City utilized a HUD Economic Development Initiative Grant to develop a Riverfront Island Master Plan. The master plan used the Western Gateway Development Program as a starting point, and expanded and built upon it. Riverfront Island is 77 acres in size and bounded on the east by the main canal, on the south by Cedar Street, and by the Androscoggin River on the west and north. With 3,700 feet of riverfront, and over a mile of canal frontage the area is entirely bounded by water. It has 1.8 million square feet of mill space prime for redevelopment, 4 public parks, and 1,250 public parking spaces. One third of the land is either publicly owned, or owned by the Lewiston Auburn Railroad Company, an entity in which the City is the majority shareholder. The driving force behind the planning effort was to develop a mixed-use plan that capitalizes on the tremendous potential of the area and that draw the creative economy to Lewiston by offering a mix of hospitality, arts and culture, housing, green space, and diverse employment and recreational opportunities. The nine month planning process led by Goody Clancy, with oversight by a 17-member advisory committee; included interviews with 40 stakeholders groups. Three public meetings, designed to engage citizens in imagining the future of this area, each attracted more than 100 residents who actively participated in discussing, shaping, and fine tuning the plan. 35

52 The City Council has approved the plan and incorporated it into the City s Comprehensive Plan. The Planning Board has taken on the role of overseeing implementation of the plan. The Northern New England Chapter of the American Planning Association awarded it their 2012 Plan of the Year. The plan is market based. An economic study conducted as part of the planning effort estimated demand for up to 400 market rate, urban loft style apartments; 2 full service restaurants and 2 to 5 smaller food/beverage establishments; 200,000 s.f. of office space; a grocery anchored retail center; and a 90 room hotel. A partial list of physical improvement recommendations included improving access to the water for fishing, boating and walking; improved or new trail systems along the water; a new gateway park better connecting Simard Payne Park (a 7 acre riverfront park) to Lincoln Street; and enhanced streetscape adjacent to the canals in order to better capitalize upon them as assets. Gateway Park, a $592,000 public investment, was completed in 2014 providing a distinctive entrance to Simard Payne Park. Additionally, $162,000 was invested in tripling the size of and upgrading the pedestrian bridge entrance into Simard Payne Park. Constructed in 2015 is a new amphitheater and river access in Simard Payne Park, a $379,000 public investment. The plan also recommended adopting design standards for the area to ensure quality development, and to develop shared parking arrangements with private landowners in order to reduce the amount of decked public parking to be built. It also recommended demolishing Bates Mill #5, and utilizing the land for a mixture of public green space and high quality commercial development. However, as noted below, a concerned group of citizens rallied to see Bates Mill #5 redeveloped rather than demolished. That effort is getting traction. The plan has generated excitement and captured the public and developer s imaginations leading to the purchase of the Pamco Mill by Developers Collaborative shortly after the plan was adopted. Developer s Collaborative has evaluated a number of redevelopment options and is in discussions with a possible master tenant considering leasing housing to be developed on the upper floors. In 2013, construction began on a 93-room Hampton Inn to be built on the river, at the corner of Main and Lincoln Streets (15 Lincoln Street). The Hampton Inn is the first downtown hotel located in Lewiston in more than 30 years. The hotel welcomed its first guests in October As explained under Bates Mill Redevelopment, 30,000 square feet of new Class A office space has been leased at the Bates Mill to Cross Insurance and Maine Community Health Options. Construction of the production capacity upgrades and corporate headquarters have been completed at Baxter Brewing; with a new brewpub/taproom opening in summer In the fall of 2013, the City entered into a Purchase and Sale Option with Platz Associates to transfer Bates Mill #5. Prior to that decision, Grow L+A, a dedicated group of concerned citizens focused their efforts on spurring redevelopment activity within Mill #5. They were successful in capturing the attention of several businesses with the desire, need and capacity to become tenants within the building. With tenant interest sparked, Grow L+A attracted the interest of Platz Associates, the City s partner in the redevelopment of the rest of the Bates Mill project. Platz is in various stages of design and lease negotiations with the YMCA, an educational institution, and a light manufacturer for more than 200,000 s.f. of space. The YMCA space will include a 1/6 th of a mile indoor track, 8 lane lap pool and therapy pool in addition to other weight and aerobic equipment. This is a national model being brought to Lewiston and improved upon. The developer plans to be before the City Council for approval of a public/private partnership for parking and other public infrastructure needed to support the project in the fall of Industrial and Business Parks The City is home to a number of publicly and privately managed industrial and business parks that have attracted private sector investment over a number of years. Gendron Business Park The City approved construction of this privately owned business park in 2003, and the road and utility infrastructure for this approximate 35 acre, 7-lot subdivision was completed in All seven lots have been sold, with eleven businesses; Max Finkelstein, Micronettix, Cianbro, Eaton Corporation, Childcare Services, Fielding s Oil, Cash Energy, Yorktowne Casket Company, Baxter Brewing, Apria Healthcare, and AutoParts International currently operating in 36

53 the Park. (A twelfth, Fed Ex consolidated operations from multiple facilities in a new facility nearby, see below.) In total, these eleven operations use over 190,000 s.f. and represent $9.5 million in investment. Given the rapid success of the first phase of this project, a second phase has been designed and is under construction. Gendron Business Park Phase II is an eleven lot, 145 acre business park that will accommodate over 1 million square feet of industrial/commercial space when fully developed. The City invested $5.11 million to build roads, install a storm water management system, extend water, sewer, and electrical utilities, and pay the City s share of wetland mitigation costs. At full build out, Phase II is conservatively projected to have a total real property assessed valuation of $54 million. Park infrastructure and site work on the lots were completed in Gendron & Gendron plans to begin construction of a 45,000 s.f. spec building in On River Road, just beyond the boundaries of Gendron Business Park, two major distribution facilities have been built since Estes Express Lines, a nationwide carrier, completed construction of a $2.7 million, 15,000 s.f. truck terminal and office building in In the summer of 2008, FedEx Ground opened its $5 million, 78,000 s.f. regional hub. Lewiston Industrial Park Lewiston s first industrial park, completed in the 1960's, occupies 200 acres. The Lewiston Development Corporation (LDC) developed and manages the park. It is currently home to 41 businesses and is at 95% of capacity. The park has direct access to the Maine Turnpike System. Pathways Metroflex completed a 17,000 s.f., $2.2 million expansion of their main facility in L.L. Bean had been manufacturing the rubber bottoms of their iconic boots in a 50,000 s.f. light industrial building within the park, and in 2017 relocated to a 100,000 s.f. building in the park. They invested $1 million in new equipment and expanded their local manufacturing workforce by 100 people. Turnpike Industrial Park The Lewiston Development Corporation also manages a 70-acre, fully serviced industrial park in South Lewiston. The park has direct access to the Maine Turnpike. Approximately fifty acres of the park remain to be developed. Current tenants include Modula/System Logistics and Stanley Elevator. Modula/System Logistics was formed when Diamond Phoenix, a manufacturer of automated material handling system, merged with System S.P.A., a multinational company headquartered in Italy. In 2015, Modula/System Logistics entered into a lease/purchase for their 100,000 s.f. manufacturing facility and have invested $6 million in automated manufacturing equipment. Stanley Elevator warehouses equipment and parts, operates a regional service and repair business out of space formerly occupied by Radio City. In 2002, fifty-two acres of this park were rezoned from Industrial to Urban Enterprise. The change allows retail as a permitted use. The site is adjacent to a turnpike interchange and has turnpike visibility. The Maine Turnpike Authority and Maine Department of Transportation are into the second phase of construction of a fully redesigned Exit 80 which will accommodate additional commercial and industrial growth in the area. Phase I of the project, which entailed realignment of the north and south bound on-ramps was completed in Phase II, which entails realignment of the north and south bound off-ramps was completed in Bridge work and installation of a Single Point Urban Interchange (SPUI) was completed in 2016, as well as improvements to Alfred Plourde Parkway. Total construction costs for all phases were $22.5 million. South Park Industrial Park The City-established South Park Development Corporation (SPDC) which operates a 95-acre industrial park in South Lewiston. It also has direct access to the Turnpike. The park includes a wide array of tenants, including a financial institution s back office operations, manufacturers, federal and state agencies, a construction firm, a wood waste to fuel facility, and a regional travel tour company. Compounding Solutions cut the ribbon in May 2011, on a 28,000 s.f. expansion, adding to their 20,000 s.f. footprint. The expansion includes a clean room where Compounding Solutions custom blends plastic compounds to specifications 37

54 for medical applications, building upon their expertise in plastic compound blending for industrial applications. The Planning Board approved a 40,000 s.f. expansion for Compounding Solutions in early Construction is underway and will be completed in Construction was completed in 2012, on an $8 million, 32,000 s.f. Community Based Outpatient Clinic built for the Veteran s Administration (VA). The facility is owned by Summit Smith and leased to the VA making the property taxable. In 2004, a 22MVA 115/12.47 KV substation was built by Central Maine Power Company within the confines of the park. This $3.2 million substation helped meet the needs of the Wal-Mart Distribution Center adjacent to the park as well as support future industrial and retail demands in the area. Road, traffic, water and sewer improvements related to the Wal-Mart project were also made in adjacent portions of South Park. Wal-Mart opened a mechanized food distribution center in The 850,000 s.f. facility has a total assessed valuation (including personal property) of over $65.4 million. The center currently has over 800 employees. It ranks as the largest single private investment in Lewiston in over 30 years. Foss Road Business Park This privately owned 55-acre, 13-lot park was established in Current tenants include a number of manufacturers as well as a wholesale distribution company. In 2005, the Lewiston Development Corporation completed a $1.4 million, 18,000 s.f. building in the park occupied by Northland Industrial Truck Co. Inc. (NITCO), a materials handling solutions provider. In early 2007, another key tenant, Central Distributors, completed a 31,400 s.f., $1,200,000 expansion of its warehouse in Clariant, an international specialty chemical company with a division that manufactures colorings and specialty compounds for plastics received Planning Board approval for a 12,000 s.f. addition at their Foss Road plant. The expansion was completed in Fairgrounds Business Park This project, consisting of the redevelopment of the old Lewiston Fairgrounds, began in 1993 and was completed in This project was originally assisted through a Tax Increment Financing (TIF) District. Three new tenants sited in the park in St. Mary s Healthcare renovated a former state office building for medical office use. Merrimack River Medical Services renovated and opened a clinic in 5,500 s.f. Carbonite, a leading provider of automatic online computer backup services, renovated 5,500 s.f. for use as a call and technical service center. Since then, Carbonite has doubled the size of their tenancy and increased their workforce to 175 employees. Other businesses located in the park include: McKesson, Central Maine Power residential energy program, Hartford Insurance, Lever s Daycare, several state agencies including the Department of Motor Vehicles, Department of Labor, and Worker s Compensation Bureau. In 2005, Pediatric Associates opened its $3.4 million, 22,500 s.f. medical office, and Marco s Restaurant, which relocated from its downtown location after a fire; invested $1,000,000 to renovate an old auto repair shop into a restaurant. Winner s Circle, an off-track betting facility, constructed a $600,000, 8,000 s.f. building in Construction was completed in 2017 on a new Subway franchise and 3,000 s.f. spec. building on a lot at the entrance to the park. Industry Sector - Specific Development Much of the previous discussion has focused on a geographical snapshot of where development has occurred in Lewiston in recent years. However, we have witnessed heavy concentrations of development activity in certain sectors that bear highlighting. Three sectors and development associated with them are listed below: Financial Sector Beginning in 1999 with Peoples Heritage Bank s tenancy of 48,000 s.f. at Bates Mill #7, Lewiston has seen significant growth in the financial sector. Peoples Heritage Bank embarked on an aggressive growth as they grew to become 38

55 TD Bank, one of the 15 largest banks in the United States, employing nearly 1,000 people locally. They recently renegotiated their lease at Bates Mill #3, extending their lease commitment to TD Bank was not alone in choosing Lewiston. Northeast Bank relocated their corporate headquarters to the Southern Gateway. They merged with a Boston-based investment group and are expanding their services nationally, adding to the number of people they employ in Lewiston. Androscoggin Bank is headquartered here and they expanded their back office operations to Bates Mill #6. Design work is underway to expand their presence in Lewiston within the next few years, with an addition to their corporate headquarters on Lisbon Street, and possible construction of a branch and training center in Lewiston s Western Gateway. Competition in the marketplace is strong. Community Credit Union invested $1 million renovating their flagship location in Lisbon Federal Credit Union choosing Lewiston for their first branch expansion, opening to the local market in December In 2010, Bangor Savings Bank cut the ribbon on a new branch and Maine Family Credit Union cut the ribbon on a $3.5 million, 24,000 s.f. expansion. Other branch locations or expansions in recent - years include: Five County Credit Union acquiring two floors in a signature downtown building and investing $350,000 in renovations, Auburn Savings Bank investing $762,000 in a new branch; Androscoggin Bank investing $700,000 in demolishing and rebuilding their Sabattus Street branch. Key Bank built a state-of-the-art 3,300 s.f. branch at a cost of $2 million; and locally based Mechanics Savings Bank reconstructed a new branch on their previous site on Main Street. This $900,000 full-service branch went into service in January Health Care Sector Health care is the largest employment sector in Lewiston. Development in this sector is driven by the City s two largest employers, Central Maine Medical Center and St. Mary s Health System. Both hospitals have grown significantly in recent years. In 2011, St. Mary s Health Systems opened the doors to a new $15 million surgical suite. In spring 2010, they cut the ribbon on an $8.6 million emergency care facility. They opened the $2 million, 10,000 s.f. Center for Joint Replacement in 2007, and a $10 million Women s Health Pavilion in St. Mary s also completed its new Nutrition Center in the former Wallace School in downtown Lewiston in In 2012, Central Maine Medical Center (CMMC) relocated and expanded the Patrick Dempsey Center for Cancer Hope and Healing to 10,000 s.f. in the Lowell Court. In 2011, they began serving patients in their relocated and expanded emergency room and lab. Combined, the lab and emergency room represent $43 million in new investment. Other projects over the last decade include the $76 million Central Maine Heart and Vascular Institute, which brought 200 high quality jobs to the community. Other significant projects completed by CMMC since 2000 include a $10 million renovation of a former shoe factory into medical business services space (Lowell Court), a $2.3 renovation of an adjacent building into a nursing school; and in 2006, nearly $2 million in renovations and upgrades to existing hospital facilities. CMMC invested an additional $7.1 million in outfitting its new 39,000 s.f. intensive care unit on the 4 th floor of the Central Maine Heart and Vascular Institute which came online in October Maine Cardiology established an 11,000 s.f. medical office in Lewiston in 2004; Pediatric Associates built a $3.4 million medical office building in 2005; and Tri-County Mental Health built a $1.4 million office building in As detailed in the South Park Industrial Park section, construction is done on a new Veteran s Administration Community Based Outpatient Clinic. Although the majority of St. Mary s and CMMC s investments are tax-exempt, the multiplier effects, improvements to the quality of life, and the enhanced status of Lewiston as a service community are significant positives. Woodlands Senior Living, a memory care facility, broke ground in Lewiston in 2014 with their 7 th facility in Maine. This $6.5 million project opened its doors in October 2015 adding a needed service for the area as well as 40 new jobs. 39

56 Education Sector Lewiston s reputation as a center of academic advancement continues to grow as is reflected in the many new construction projects undertaken by our colleges over the last several years. Over the past seven years, Bates College has invested $88 million in new or renovated facilities with their most recent investment of $30 million constructing two new dormitories. In 2008, the College opened its new two-story dining hall and a 52,000 s.f. residence hall, while also renovating the campus library and existing dormitories. The football stadium was rebuilt in The University of Southern Maine s L/A College is one of the State of Maine s most rapidly growing educational institutions. In 2008, USM-LA completed a 25,000 s.f., $5 million classroom building expansion. In 2015, they completed a $600,000 expansion of their occupational therapy and nursing program facilities. Kaplan University s growth is described in the Southern Gateway section In addition to these post-secondary institutions, the City of Lewiston has also made significant investment in its own school system with the Geiger Elementary School. This 93,000 s.f., $14.3 million state-of-the-art facility opened its doors to students in August Construction is complete on a $5.5 million addition to the McMahon Elementary School and a $9.5 million three story expansion of the Lewiston Middle School. With a growing population of school age children, the Lewiston Public School System added in 2015, a $1.5 million classroom expansion to the Farwell Elementary School. In June 2016, Lewiston voters approved the development of a $52.9 million new elementary school that is anticipated to open in The new elementary school will replace two older elementary school buildings: Montel and Longley schools. 100% of the base cost of the new school will be paid by state revenues. Local voters approved $2.1 million in additional spending for a regulation size gymnasium, installation of artificial turf on a relocated baseball/field hockey field, and full air conditioning of the facility so it can be used for summer school and other summer programming. Construction of the new Robert V. Connors School began in June It is anticipated that it will welcome its first students in the fall of Manufacturing Sector Elmet Technologies, a global manufacturer of high performance refractory metal products, was sold in early Anania & Associates Investments Company, LLC, an investment fund that owns and operates six other Maine based specialty manufacturing companies partnered closely with company management, the Maine Technology Institute, and a small group of committed individual investors to secure the business. Elmet employs 145 people in the Lewiston Auburn area. Automated material handling equipment manufacturer Modula/System Logistics installed state of the art manufacturing technology at their Lewiston facility with a capital investment of $6 million in The 100,000 s.f. factory was revamped to enable the production of equipment known as Vertical Lift Modules. They are in the process of purchasing their building, a testament to their commitment to the area. Expansions at Compounding Solutions and Clariant have been covered in the Industrial Park Section of the report. Recent and Upcoming Developments Lewiston Loop The Maine Public Utilities Commission approved Central Maine Power Company s proposed $43.3 million upgrade to downtown Lewiston s electrical infrastructure to an 115kV system. It will provide greater safety, reliability, longevity, and improve the infrastructure to not only downtown Lewiston but industrial parks in the region. The costs of the 115kV will be shared by all rate payers that are part of the ISO New England grid. Maine rate payers will pay 8% of the costs. Construction of the upgraded lines and new substation began in July 2015 and was completed in Central Maine Power Company has been chosen by Massachusetts to be the provider of Clean Energy to the state for an initial period 20 years. CMP will build a $950 million transmission line to deliver Quebec Hydro energy to Massachusetts. As part of that project Lewiston will receive a $250 million AC/DC Converter Station. The project is going through permitting. 40

57 ANNUAL PROJECT LISTINGS The following tables set forth commercial/industrial and residential projects valued at over $200,000 completed or started in the City in fiscal years and through Q3 FY Values and dates shown are taken from building permits. Major Projects Description Value July 1, 2017 to March 31, 2018 Commercial/Industrial 17 Foss Road Clariant warehouse addition $1,200, Bartlett Street Connors Elementary School $36,751, Sabattus Street New Gas/Convenience Store $475, Main Street CMMC emergency room rehab & new MRI suite $1,057, Lisbon Street Installation of 3 cell towers $250, Sabattus Street Hannaford rehabilitation $2,900, Lisbon Street Federal Distributors renovations $770, Main Street CMMC nursing unit renovations $428, Lisbon Street Federal Distributors addition $1,843,600 Residential 159 Lisbon Street The Hartley Block 63 units + 4,000 s.f. retail $8,300,000 July 1, 2016 to June 30, 2017 Commercial/Industrial 51 Mt. Hope Avenue Construction of a 2 buildings totaling 9,800 s.f. $550, Lincoln Street Grand Rounds tenant improvements $1,315, Lisbon Street Rinck Advertising renovations $1,017, Mt. Hope Avenue Geiger redevelopment $8,852, Canal Street Maple Way Dental tenant improvements $1,891, Greystone Drive 6,500 s.f. warehouse for Hudson Bus $325, Howe Street Tree Street Youth renovations $776,000 1 Mollison Way Subway Store $705, Lisbon Street Berman & Simmons interior renovations $357, Main Street New Cumberland Farms $940, Lisbon Street Paychex 15,000 s.f. tenant improvements $312, Campus Avenue St. Mary s Hospital behavioral health unit $1,100, Goddard Road Compounding Solutions 40,000 s.f. expansion $798,000 Residential 7 Cortland Way New single family & attached garage $200, Webster Street Renovation of former office building into 8 units $300, Cortland Way New single family home $230,000 July 1, 2015 to June 30, 2016 Commercial/Industrial 143 Lincoln Street Addition of stairway and elevator $2,432,177 St. Mary s Health Systems Interior renovations to surgical practice $375,000 St. Mary s Health Systems Interior renovations to pediatric department $692, Lisbon Street Interior & exterior renovations to mixed use building $325,000 Bates College Renovation $1,036,000 Lewiston Public Schools 6-classroom addition at Farwell St $1,512,907 Walmart Distribution Center Hydrogen storage and re-fueling infrastructure $375,000 41

58 Residential 4 Marygold Way New single family home $325,000 Pierce Place Housing Project 29-units, 3 multi-family housing project $5,253,194 July to June 30, 2015 Commercial/Industrial New Beginnings Renovation of office space $982,000 Woodlands Senior Living Construction of a 64-bed facility $4,500,000 City of Lewiston Construction of 13,000 s.f. solid waste facility $735,000 Central Maine Medical Center Y3 Bed renovation project $650,000 Dollar General New construction of a 9,100 s.f. building $425,000 USM/LA College Renovation of OT and nursing departments $600,000 Residential Bates College Construction of 2-35,952 s.f. dormitories $30,090,314 July 1, 2013 to June 30, 2014 Commercial/Industrial Middle School Renovations to 120,000 s.f. $6,743,607 6 Atlantis Way TD Bank renovations $584,000 Hampton Inn Four story, 93-room hotel $6,550,238 Argo Marketing Redevelopment of former McCrory Dept. Store $1,750,000 Dunkin Donuts Two story, new construction $550,000 Family Dollar New construction of 8,320 s.f. building $500,000 ME Community Health Options Interior renovations of 5,700 s.f. office space $350,000 McGillicuddy Building Historic rehab to create 8 market rate apartments $350,000 July 1, 2012 to June 30, 2013 Commercial/Industrial Maine Community Health Options Renovations to 10,000 s.f. of Bates Mill $700,000 Champoux Insurance Renovation of former K of C Hall to office $552,000 Bates College Repairs and renovation to 3 floors $596,200 Veteran s Inc. Conversion of former school to housing $1,000,000 Cumberland Farms New 4,500 s.f. convenience store $740,000 CMMC Dempsey Center Building renovations $950, Goddard Road Construction of 5,000 s.f. office/warehouse space $400,000 McMahon School Building addition $5,500,000 Middle School Building addition $9,500,000 Residential Bates College Chase Hall renovations $497, Lisbon Street Three market-rate condo units $300,000 July 1, 2011 to June 30, 2012 Commercial/Industrial St. Mary s Health Systems New family practice and weight center $900,000 St. Mary s Health Systems Interior renovations at 95 Campus Ave. $571,000 St. Mary s Health Systems CT Scan addition $411, Mill Street 9,744 s.f. office expansion $389, Lincoln Street Restaurant space expansion $298,433 Rite-Aid Drug Store Renovations $200,000 Central Maine Medical Center Office space renovations $275,000 J & S Oil Convenience store, gas, and pet & car wash $3,836,000 Seniors Plus Interior renovations with elevator $340,000 White Rock Distilleries Installation of a tank farm $666,000 LA Water Pollution Control Auth. New building construction $11,140,558 42

59 TAX INCREMENT FINANCING Under Maine law, municipalities may create Tax Increment Financing (TIF) Districts and use a portion or all of the additional tax revenues generated by development within the District to finance infrastructure improvements and/or provide financial support for projects within the Districts. There are two ways municipalities can provide financial support to projects through this mechanism: bonding and credit enhancement. In a bonded TIF, a municipality borrows money for infrastructure improvements such as roads, sewer, and utilities. Tax revenues generated by new development within the improved area are earmarked for debt retirement. In a credit enhancement TIF, a municipality does not have to borrow money. Instead, a portion of the tax revenue generated by new development within a TIF District is returned to the taxpayer. The criteria governing how the money may be used are more lenient in credit enhancement TIFs. During the tenure of a TIF, tax revenue that is not earmarked for debt retirement or credit enhancement obligations goes to the City s General Fund. After the term of the TIF District expires, 100% of the tax revenues go to the General Fund. Tax Increment Financing is an effective economic development tool. It allows municipalities to shelter that portion of the increase in property value that is necessary to generate tax revenue sufficient to meet debt retirement or credit enhancement obligations from inclusion in the municipality s total assessed valuation. Doing so minimizes the impact of the new development on the amount the municipality receives in State Revenue Sharing and State Aid to Education, and the amount paid in County Tax. In Maine, as total assessed valuation increases, the amount received in State Revenue Sharing and State Aid to Education decreases, and the amount paid in County tax increases. Lewiston has been aggressive in utilizing tax increment financing to leverage private sector investment. In recent years, credit enhancements TIFs have been the preferred funding mechanism. What follows is a brief outline of each Lewiston TIF District, beginning with the most recent and working backwards. In December 2015, the City Council approved the Exit 80-South Lewiston Omnibus Tax Increment Financing District and Development Program. Under that program the City will pay for the extension of water and sewer to the site and for offsite traffic improvements required by the development. New tax revenues generated will be used to pay the city s debt service associated with the project, as well as to pay the developer 40% of the new taxes generated within the district for 20 years or until he has been made whole for the extraordinary site costs incurred, whichever comes first. The Exit 80 South Lewiston Ominbus TIF District is 426 acres in size and will last for 30 years. The retail site, which is included within the district, is 56 acres. Attracting a major retail anchor to the Exit 80 area will serve as a catalyst and springboard for development in the larger district. A full build out analysis for the area projects $150 million in development could occur in the South Lewiston area over the next years. In May 2013, the Council approved a 10 year TIF program with Argo Marketing. Over the first 5 years of the TIF 50% of the new taxes paid will be returned to the developer to help offset high redevelopment costs. The TIF reimbursement will drop to 40% in Years The redevelopment project included the creation of 4,900 s.f. of retail and restaurant space which is available for lease. If 50% or more of the lease space is rented during the first five years of the district, the TIF reimbursement rate will drop to 40% in the year following the tenancy, and remain at that level for the remainder of the TIF term. The City sheltered other TIF revenues generated by the project and will use the revenues to provide funding for economic development programs, marketing of the community as a business and arts location, capitalization of commercial loan programs, and downtown infrastructure that will support tourism development. The Council approved a 10 year TIF program for the Hampton Inn. On average the hotel will annually return $100,000 of the new tax revenue generated from the project. The level of TIF support is higher in the early years of the hotel, during the ramp-up phase to stabilize occupancy levels. The TIF reimbursement is $110,000 in Year 1; $120,000 in Year 2; $130,000 in Year 3; and then drops to $100,000 for Years 4-7. For the last three years of the TIF, the reimbursement rate drops to $90,000, $80,000, and $70,000 respectively. Total project costs for the hotel are estimated at $9.9 million. Over the course of the TIF term, the hotel is projected to generate a total of $500,000 in General Fund revenue and produce an estimated minimum of $159,000 annually in taxes thereafter. In 2015 Central Maine Power Company (CMP) completed the Maine Power Reliability Program (MPRP), a $1.4 billion upgrade to the electrical transmission infrastructure in Maine. The purpose of the upgrade was to expand the capacity and improve the reliability of the transmission grid in Maine. In Lewiston, CMP invested an estimated total of 43

60 $108 million in the MPRP, including $71.3 million for a new substation, $11.4 million in other substation improvements, and $25.9 million in transmission line upgrades. A group of Lewiston residents who reside along an approximately 6.6 mile section of the transmission corridor voiced objections to the impacts the MPRP would have on their properties. The City worked with CMP and the citizen group to develop an alternative construction scenario that is acceptable to the residents. The estimated additional construction cost for these changes is $3.5 million. The City s created a TIF District that utilizes a portion of the new taxes generated within the District to pay CMP $358,723 annually for 20 years and reimburse CMP $65,000 annually for the taxes they will pay on the requested additional upgrades. The $65,000 annual tax reimbursement is based on what they are estimated to pay in taxes during the first year, and will remain steady over the 20 year term of the TIF. The combined annual total of these payments represents 35% of the new taxes to be generated within the TIF District. It is a Credit Enhancement TIF the City will not have municipal debt associated with the project. The TIF District became active in 2014 when the MPRP investment in Lewiston was fully realized. CMP powered up the new $71.3 million Larrabee Road Substation in December In spring 2009, the City received State approval for a TIF on Gendron Business Park Phase II, an eleven lot, 145 acre business park that is estimated to accommodate over 1 million square feet of industrial/commercial development. The City borrowed approximately $5 million to fund construction of the road, installation of the storm water system, extension of water, sewer, and electrical and the City s share of wetland mitigation costs for this project. The City will only use tax revenues generated by the project as necessary to pay its debt service on bonds used to fund these improvements. In the early years of the TIF District, after all development expenditures have been made but before sufficient economic development occurs to generate enough taxes to cover the debt service, shortfalls in funding are expected. Under the Development Program, those tax revenue shortfalls will be made up as additional development is realized and the assessed valuation and generated taxes will allow. The City estimates that in the first eight years of the TIF program, 100% of the new real property taxes generated within the TIF District will be used to cover the associated bonded debt. Beginning in year 9 and beyond, the amount of revenue used for debt service will decline and the percentage of the new real property taxes going to the general fund will increase. This will become possible after the shortfalls have been covered, and as the serial debt service payments decline. A TIF District was approved in 2004 for Franklin Property Trust. Under the TIF agreement, the City will reimburse Franklin Property Trust 100% of the incremental real property taxes paid within the District for 20 years. Included within the District are the Oxford Networks and Northeast Bank buildings and the renovated Kaplan University space. This level of support was necessary to write down lease rates and attract new investment to the most blighted area of the City. The City will deposit all personal property taxes generated by the new investment in the General Fund. The Southern Gateway project and Franklin Property Trust investments have already attracted more than $10 million in new investment to the gateway that is located outside of the TIF District. In December 2003, the State approved the creation of a bonded debt TIF that will allow the City to pay its debt service on a $1.04 million bond for the City s share of the $3.2 million Central Maine Power substation project. The City will use 100% of the real property tax revenues generated for 20 years to pay the associated serial debt costs. The new substation provides power for the new Wal-Mart Mechanized Distribution Center, expands electrical capacity to permit build out of the industrial/commercial land in South Lewiston (including multiple phases of Plourde Business Park), and improves reliability and redundancy for much of the already developed industrial/commercial areas of the City. In FY2018, an additional $25,794 of net new taxes were received by the City. Wal-Mart completed construction on an 850,000 square foot, $91 million mechanized food distribution center in Fifty-nine million dollars of the investment is in real property, with the remaining $32 million in personal property (mostly refrigeration and mechanized material handling systems). Beginning in 2006, the City agreed to return 50% of the real property taxes paid on the property for 20 years. The City will retain all of the taxes paid on personal property. Fifty percent of the personal property taxes will be sheltered from the City s total valuation under the TIF agreement, and will be used to pay bonded debt associated with the project and for other economic development related expenditures that would have otherwise been paid by the General Fund. In fiscal year 2018, the City expects to receive approximately $764,289 in net new property tax revenues from the project. 44

61 Affordable Housing TIFs While similar in structure to traditional economic development Tax Increment Financing, where valuations of new investments can be sheltered and portions of tax revenue generated by the project can be returned to the developer to offset development costs, Affordable Housing Tax Increment Financing (AHTIF) is a new affordable housing tool from Maine Housing that is designed to encourage development of affordable housing that would otherwise not be economically viable due to high development costs and the artificially low rents required over many years to qualify as affordable for the purposes of obtaining financing. The revenue returned to a project through an AHTIF can be used to offset approved project costs over the life of the AHTIF. Lewiston s first experience using an AHTIF was on the Bates Street Senior Housing project developed by Community Concepts, Inc. (CCI). This 30-unit senior housing project was completed in The CCI AHTIF is structured so that the percentage of TIF revenues used to help offset operational expenses will decline over the term of the TIF District. For the first five years of the District, 80% of the incremental increase in taxes will be returned to Community Concepts to fund the development program. For years six through ten, 65% of the incremental taxes will be returned. For years eleven through twenty, 50% of the incremental taxes will be returned. In fiscal year 2018, the City realized $24,489 in net new real estate property tax revenue from this TIF. In September 2007, the Lewiston City Council approved the creation of a second AHTIF to assist in the development of a new 20-unit senior housing project being built on the Birch Street Hill area. The project, Birch Hill Elderly Housing Associates, added 20 affordable senior rental apartments into the City s housing stock. All of the units will be occupied by senior households earning not more than 60 percent of the area median income with not less than 8 units occupied by households earning less than 50 percent of median income. Construction on the $4.5 million project began in spring 2009 and units became available in March For the Birch Hill project, the TIF structure is based on the City s receipt of a fixed amount of tax revenue in the first year ($5,000 or $250 per unit), with an annual increase of 2.5% over the life of the TIF. The TIF percentage for a given year will be calculated based on how much of the total TIF revenue would be returned to the project after the City receives its required amount rather than being based on a set percentage. Over its 17-year term, the TIF will help offset operational expenses and keep rents affordable. In fiscal year 2018, the City realized $6,092 in net new real estate property tax revenue from this TIF. The developer began welcoming tenants to the redeveloped 81 Ash Street/In Town Manor in January This historically significant downtown building has been redeveloped as 32-units of affordable senior housing. This AHTIF is designed to return 60% of the incremental tax revenues to the property annually over its 17-year life. The City will realize $11,939 in net new real estate property tax revenue from this TIF in fiscal year In 2010, Lewiston approved AHTIF for The Lofts at Bates Mill project. This project represents Lewiston's first effort at introducing a housing component into the historic Bates Mill Complex. It is also unique in being the first mixed income project on which we have utilized the Affordable Housing TIF mechanism. The project consists of a total of 48 units, of which 33 are affordable and the remaining 15 are market rate. This AHTIF is designed to return 50% of the incremental tax revenues to the project annually over 20 years. Tenancy began in November The project fully leased up several months ahead of projections, with the market rate units being the first to fill. Net new taxes totaled $24,489 for In June 2016, the City Council approved an agreement for Development Assistance and Tax Increment Financing (TIF) for the Hartley Block to support the development of 63 residential units and 4,100 square feet of commercial space at Lisbon Street. The AHTIF will return 50% of the new taxes generated by the project within the District to the developer for a period of 20 years. Those tax revenues will be used to help offset operational expenses of the project. As part of the agreement, the developer will invest a minimum of $11 million in the project to achieve an optimal assessed value of $3.2 million. Of the 63 apartments, 22 will be market rate. Construction is underway. 45

62 OTHER DATA Unemployment (1) Unemployment Rates Month City of Lewiston- State of United or Year Lewiston Auburn MSA Maine States % 3.0% 3.9% 4.4% % 3.1% 3.3% 4.4% % 3.5% 3.7% 4.9% % 4.4% 4.4% 5.3% % 5.5% 5.7% 6.2% % 5.6% 6.2% 6.5% (1) Maine Department of Labor. Full year annual averages, except for 2018, which is for the month of February. Income Levels The following table presents 1990, 2000, and 2010 census figures for Lewiston, the State and the country. Lewiston Maine United States Median Age: Median Household Income: $36,743 $46,933 $51, ,033 45,529 49, ,073 32,422 35,225 Per Capita Income: $20,014 $25,385 $27, ,032 19,200 21, ,185 12,957 14,420 Population Trends Based upon the 2010 census, population density in the City is 1,045 persons per square mile. Source: Federal Census. Census Population 2013 estimate... 36, , , ,757 46

63 Public School Enrollments The Lewiston Public Schools include six elementary schools, a middle school, and a comprehensive high school /regional technical center. Enrollment, as of October 1, 2017 was 5,515 with a staff of 1,025 full-time equivalents, of which 494 are teachers. Excluding special services, the average class size is 22 to 1. Total capacity of the Lewiston Public Schools is currently slightly over 6,000 students. School enrollment is expected to increase by 100 students on average per year until The system requires new classroom space for every 25 student increase. The City and School Department are working collaboratively to provide additional classroom space by utilizing existing municipal facilities. Additions to McMahon Elementary School, Farwell Elementary School, and the Lewiston Middle School expansion project are complete. Upon completion of the new Connor Elementary School, the system s student capacity will increase to 6,400. The following table shows the actual school enrollments as of October 1, 2013 through Grades (1) Elementary... 3,155 3,164 3,273 3,200 3,272 Middle School High School... 1,354 1,326 1,467 1,431 1,441 Outplaced Students Totals. 5,234 5,264 5,554 5, (1) As of October 1 of each school year. LITIGATION At present there are a number of suits pending in which the City is a defendant. In the opinion of the City, none of the pending litigation is considered likely to result, either individually or in the aggregate, in final judgments which would materially affect the City's financial position. POTENTIAL CONSOLIDATION WITH THE CITY OF AUBURN In 2014, the voters of Lewiston and Auburn began the process of developing a combined charter for the two cities. On June 10, 2014, voters in both Lewiston and Auburn each elected three members to the Commission. The Commission is charged with drafting a proposed new combined charter, and with analyzing existing operations and finances and producing various consolidation options. The Commission retained a consulting firm, the Center for Governmental Research Inc., to assist in this effort. Funding for consulting services included private contributions and a State grant, with neither City providing funding. Both Auburn and Lewiston placed the question of the proposed charter on their ballots at the election on November 7, Both cities defeated the proposed charter by substantial margins. The City does not expect consolidation with Auburn to be considered again in the foreseeable future. CITY OF LEWISTON, Maine Dated: May 1, 2018 By: /s/ Heather A. Hunter Finance Director 47

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65 APPENDIX A The following are Balance Sheets for fiscal years ending June 30, 2013 through 2017, the Comparative Statements of Revenues and Expenditures (General Fund) for fiscal years ending June 30, 2013 through 2017, and the Comparative Statements of Revenues, Expenses, and Changes in Net Position (Water, Sewer, and Stormwater Funds) for the fiscal years ending June 30, 2013 through These figures have been excerpted from the audited financial statements of the City for those years. A-1

66 CITY OF LEWISTON, MAINE BALANCE SHEET YEAR ENDED JUNE 30, GENERAL FUND (1) (2) ASSETS Cash and Equivalents $1,011,250 $ 3,748,730 $ 5,976,951 $10,842,450 $6,723,062 Investments 22,680,975 20,620,432 14,610,466 12,465,801 15,722,989 Accounts Receivable net 542, ,064 1,683, , ,160 Taxes Receivable 1,903,091 1,914,902 1,907,180 1,994,907 1,958,794 Intergovernmental Receivables 785, , , , ,932 Loans 1,731,474 1,864,547 1,967, ,000 1,000,000 Due from Other Funds 7,796,450 5,676,710 3,480,151 1,534, ,872 Prepaid Expenditure 197, ,011 91, ,468 79,507 Inventories 248, , , , ,371 TOTAL ASSETS 36,897,091 35,931,421 30,474,109 29,176,688 28,556,686 LIABILITIES, EQUITY, & OTHER CREDITS Liabilities Accounts Payable 2,802,095 2,370,704 3,176,960 2,592,343 1,663,649 Wages & Taxes Payable 7,366,082 5,826,731 5,029,498 5,026,758 3,222,746 Customer Deposits 4,553 2, ,915 Deferred Revenue/Credits Unearned Revenue 705, , , , ,935 Due to Other Funds ,145 Total Liabilities 10,878,153 8,911,664 8,938,378 8,329,661 5,685,390 Deferred Inflows Unavailable Tax Revenue 1,708,734 1,693,298 1,688,956 1,796,042 1,739,518 Equity and Other Credits Fund Balances Nonspendable 1,230,458 1,390,604 1,200,061 1,241,392 1,343,878 Restricted 1,790,711 4,061,215 2,007,965 71,058 1,715,737 Assigned 4,873,803 4,366,131 3,666,392 4,382,726 5,134,228 Unassigned 16,415,234 15,508,510 12,972,357 13,355,807 12,937,935 Total Equity and Other Credits 24,310,206 25,326,460 19,846,775 19,050,983 21,131,778 TOTAL LIABILITIES, EQUITY, $36,897,091 $35,931,421 $30,474,109 $29,176,686 $28,556,686 AND OTHER CREDITS (1) Extracted from audited financial statements of the City. (2) Numbers may not add up due to rounding. A-2

67 REVENUES: CITY OF LEWISTON, MAINE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GENERAL FUND (1) YEAR ENDED JUNE 30, Taxes $ 57,735,755 $57,015,724 $55,181,378 $53,917,843 $52,010,363 Licenses and Permits 407, , , , ,835 Intergovernmental 54,560,834 53,595,980 50,765,045 47,462,198 46,331,108 Charges for Services 1,263,393 1,795,925 1,702,379 1,556,085 1,588,523 Fines and Forfeits 192, , , , ,049 Interest 1,662,745 1,587,641 1,430,365 1,315,423 1,399,227 Other 376, , , , ,633 Total Revenues $116,199,459 $114,689,856 $109,972,320 $105,249, ,162,738 EXPENDITURES: Current: General Government 3,077,144 2,815,220 2,959,388 2,948,675 2,830,091 Public Safety 13,876,063 12,823,752 12,680,382 12,927,886 12,370,953 Public Works 6,689,837 5,971,893 6,924,704 7,129,282 7,037,063 Human Services 1,078, , , , ,677 Culture and Recreation 1,360,917 1,239,633 1,255,453 1,380,090 1,489,860 Education 67,344,686 61,661,206 57,239,968 57,907,212 54,427,702 Unclassified 7,312,178 6,407,935 5,954,451 6,210,038 5,640,639 Intergovernmental 3,886,281 3,811,611 3,700,698 3,652,352 3,691,051 Total Expenditures 104,625,749 95,666,511 91,653,347 93,094,849 88,398,036 Excess (Deficiency) of Revenues over Expenditures 11,573,710 19,023,346 18,318,973 12,154,574 13,764,702 Other Financing Sources (Uses): Capital Lease Operating Transfers In 732, , , ,398 1,076,996 Operating Transfers Out (2) (13,322,084) (14,081,550) (18,099,023) (15,034,767) (13,248,959) Excess (Deficiency) of Revenues and Other Sources Over Expenditures and Other Uses (1,016,254) 5,479, ,791 (2,080,795) 1,592,739 Beginning Fund Balance $25,326,460 $19,846,776 $19,050,984 21,131,778 19,539,038 (restated) Ending Fund Balance $24,310,206 $25,326,460 $19,846,776 $19,050,984 $21,131,778 (1) Extracted from the audited financial statements of the City. (2) Includes transfers to Debt Service Fund. A-3

68 COMPARATIVE STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION WATER FUND (1) YEAR ENDED JUNE 30, Operating Revenues: Charges for Services $5,448,327 $5,391,606 $5,393,146 $5,362,908 $4,547,881 Total Operating Revenues $5,448,327 $5,391,606 $5,393,146 $5,362,908 $4,547,881 Operating Expenses: Cost of Sales & Services 1,887,868 1,853,277 2,017,436 2,157,716 1,776,297 Administration 839, , , , ,691 Depreciation 1,252,249 1,247,349 1,200,950 1,151,100 1,071,300 Total Operating Expenses 3,979,637 3,956,304 4,064,980 4,113,443 3,636,288 Operating Income 1,468,690 1,435,302 1,328,166 1,249, ,593 Non-Operating Revenue (Expenses): Interest Revenue ,171 5,770 Interest Expense (469,043) (447,295) (499,887) (491,900) (493,041) Increase/Decrease in Fund Equity (2) 56,429 67, ,462 85,856 83,938 Gain/(Loss) on Sale of Capital Assets 5,085 (13,799) (18,379) 22,840 (2,410) Amortization of Deferred Charges (13,800) 0 (6,861) 0 (57,958) Non-Operating Revenues (Expenses) (421,329) (393,075) (415,494) (377,434) (469,471) Income Before Operating Transfers 1,047,361 1,042, , , ,122 Total Operating Transfers Out (25,645) (22,548) (21,916) (21,982) (21,982) Contributed Capital 35,876 28,079 27,361 18,557 29,504 Increase in Retained Earnings/Net Assets 1,057,592 1,047, , , ,644 Beginning Retained Earnings/Net Assets $28,215,406 $27,167,648 $26,249,531 25,380,925 24,931,281 Ending Retained Earnings/Net Assets $29,272,998 $28,215,406 $27,167,648 $26,249,531 $25,380,925 (1) Extracted from the audited financial statements of the City. (2) Lake Auburn Watershed Protection Commission. A-4

69 COMPARATIVE STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION SEWER FUND (1) YEAR ENDED JUNE 30, Operating Revenues: Charges for Services $ 5,969,042 $ 5,061,250 $ 5,102,783 $5,150,572 $5,194,399 Total Operating Revenues 5,969,042 5,061,250 5,102,783 5,150,572 5,194,399 Operating Expenses: Cost of Sales & Services 3,475,507 3,223,800 3,178,843 3,091,817 3,166,394 Administration 645, , , , ,397 Depreciation 672, , , , ,839 Total Operating Expenses 4,793,722 4,518,987 4,424,634 4,285,322 4,320,630 Operating Income 1,175, , , , ,769 Non-Operating Revenue (Expenses): Increase in Fund Equity (2) 95,888 54,270 32,562 61, ,877 Interest Revenue 4,938 18,619 5,824 11,489 Interest Expense (375,491) (347,406) (371,152) (336,507) (343,471) Gain on Sale of Fixed Assets 0 0 (18,379) 1,500 1,000 Amortization of Deferred Charges (113,204) (68,595) (23,366) (15,346) (61,249) Non-Operating Revenues (Expenses) (387,869) (343,112) (356,132) (277,763) 191,157 Operating Transfers and Capital Contributions (42,506) (44,685) (47,712) 0 (69,295) Increase in Retained Earnings/Net Assets 744, , , , ,631 Beginning Retained Earnings/Net Assets $14,469,017 $14.314,551 $14.040,246 $13,503,452 $23,013,499 Ending Retained Earnings/Net Assets $15,213,962 $14,469,017 $14,314,551 $14,040,246 $24,009,130 (1) Extracted from the audited financial statements of the City. Fiscal 2014 beginning net position restated due to change in recognition of depreciation by the Lewiston-Auburn Water Pollution Control Authority. (2) Lewiston Auburn Water Pollution Control Authority. A-5

70 COMPARATIVE STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION STORM WATER FUND (1) YEAR ENDED JUNE 30, Operating Revenues: Charges for Services $2,614,835 $2,604,641 $2,565,015 $2,567,901 $2,544,732 Total Operating Revenues $6,614,835 $2,604,641 $2,565,015 2,567,901 2,544,732 Operating Expenses: Cost of Sales & Services 828, , , , ,803 Administration 363, , , , ,660 Depreciation 248, , , , ,847 Total Operating Expenses 1,411,585 1,438,689 1,299,797 1,168,259 1,179,310 Operating Income 1,173,250 1,165,952 1,265,218 1,399,642 1,365,422 Non-Operating Revenue (Expenses): Interest Revenue 12,410 24,215 6,857 8,822 0 Interest Expense (239,674) (239,163) (256,287) (229,101) (238,264) Amortization of Deferred Charges (99,930) (87,464) (70,032) (77,195) (105,650) Total Non-Operating Revenues (Expenses) (327,194) (302,412) (319,462) (297,474) (343,914) Income before Operating Transfers 846, , ,756 1,102,168 1,021,508 Operating Transfers and Capital Cont. (365,267) (389,473) (401,291) (430,480) (457,471) Increase in Net Assets 480, , , , ,037 Beginning Net Assets 4,514,494 4,040,427 3,495,962 2,824,284 2,260,238 Ending Retained Earnings/Net Assets $4,995,283 $4,514,494 $4,040,427 $3,495,962 $2,824,275 (1) Extracted from the audited financial statements of the City. A-6

71 APPENDIX B There follows in this Appendix audited financial statements of the City of Lewiston, Maine, as of June 30, 2017 together with the auditor's report of RHR Smith & Company, Certified Public Accountants, Buxton, Maine. The attached report speaks only as of its date, and only to matters expressly set forth therein. The auditors have not been engaged to review this official statement or to perform audit procedures regarding the post audit period, nor have the auditors been requested to give their consent to the inclusion of their report in Appendix B. Except as stated in their report, the auditors have not been engaged to verify the financial information set out in Appendix B and are not passing upon and do not assume responsibility for the sufficiency, accuracy in completeness of the financial information presented in Appendix B. B-1

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73 Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2017

74 City of Lewiston, Maine CO:Jvt. P'R'EJf 'E:NSIY'E..'A:N:NU..'A. jl:n..'a:nci..'a. 'R'EPO'R'I' For the Fiscal Year Ended June 30, 2017 Prepared by: Heather A. Bunter, Finance Director Cover Photography Credit - Norman J. Beauparlant

75 INTRODUCTORY SECTION

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77 City of Lewiston, Maine COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2017 TABLE OF CONTENTS Exhibit Number Page Numbe.r INTRODUCTORY SECTION: Table of Contents Letter of Transmittal Certificate of Achievement for Excellence in financial Reporting Organizational Chart List of Principal Officials B-5 B-7 B-15 B-17 B-18 FINANCIAL SECTION: Independent Auditor's Report Management's Discussion and Analysis Basic Financ~al Statements: Governmental-Wide Financial Statements ~ Statement of Net Position Statement of Activities Fund Financial Statements: Balance Sheet - Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds Reconciliation of the Statement of Revenues, Expenditures. and Changes in Fund Balances of Governmental Funds to the Statement of Activities Statement of Revenues, Expenditures, and Changes in Fund Balance - Bud.get and Actual - Budgetary Basis Statement of Net Position - Proprietary Funds Statement of Revenues, Expenses. and Changes in Net Position - Proprietary Funds Statement of Cash Flows - Proprietary Funds Statement of Fiduciary Net Position - Fiduciary Funds Statement of Changes in Fiduciary Net Position - Fiduciary Funds Notes to the Financial Statements Required Supplementary Information: Retiree Healthcare Plan - Schedule of Funding Progress Maine Public Employees Retirement System Consolidated Plans - Schedules of Proportionate Share of Net Pension Liability and Funding Progress Combining and Individua l Fund Statements and Schedules: Combining Balance Sheet - Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Nonmajor Governmental Funds Combining Balance Sheet - Nonmajor Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Nonmajor Special Revenue Funds Sched'Ule of Revenues. Expenditures, and Changes in Fund Balance - Budget and Actual - Community Development Block Grant Special Revenue Fund Schedule of Revenues, Expenditures, and Changes in Net Position - Proprietary Funds - Budget and Actual Combining Statement of Fiduciary Net Position - Fiduciary Funds - Private Purpose Trust Funds A-1 A-2 B-1 B-2 B-3 C-1 D-1 B-21 B-25 B-40 B-41 B-42 B-44 B-45 B-46 B-48 B-50 B-51 B-52 B-53 B-54 B-87 B-87 B-90 B-91 B-92 B-93 B-94 B-95 B-96 B-5

78 City of Le'lw'.iston Table of Contents, Continued Combining Statement of Changes in Fiduciary Net Position - Fiduciary Funds - Private Purpose Trust Funds Combining Statement of Fiduciary Net Position - Fiduciary Funds - Agency Funds Combining Statement of Changes in Fiduciary Net Position - Fiduciary Funds - Agency Funds Statistical Section: Governmental-Wide Information: Net Position by Category Changes in Net Position Fund Information: Governmental Funds Fund Balance Governmental Funds Change in Fund Balance Property Tax Levies and Collections Assessed and Estimated Actual Value of Taxable Property Direct and Overlapping Property Tax Rates Principal Tax payers Ratios of Outstanding Debt by Type Ratios of General Bonded Debt Outstanding Legal Debt Margin Calculation Revenue Bond Coverage - Water Fund Revenue Bond Coverage - Sewer Fund Revenue Bond Coverage - Storm Water Fund Municipal Information: Demographic Statistics Principal Employers Number of Municipal Employees by Function Operating Indicators by Function Capital Asset and Infrastructure by Function Exhibit Number D-1 D-2 D-3 Table 1 Table 2 Table 3 Table 4 Table 5 Table 5 Table 6 Table 6 Table 7 Table 7 Table 8 Table 9 Table 9 Table 9 Table 10 Table 10 Table 11 Table 12 Table 13 Page Number B-96 B-97 B-98 B-101 B-102 B-104 B-106 B-108 B-108 B-109 B-109 B-110 B-110 B-111 B-112 B-112 B-112 B-113 B-113 B-114 B-115 B-116 B-6

79 Citq 0 Lewiston Heaiher Hunt er..fina.nee D.irecto/' LA It's Happening Here! December 24, 2017 Honorable Robert E. Macdonald, Mayor Members of the City Council, and Citizens of Lewiston The comprehensive annual financial report (CAFR) of the City of Lewiston for the year ended June 30, 2017 is hereby submitted as required by the City Charter. The Charter requires that the City of Lewiston issue a report annually on its financial position and activity, and that this report be audited by an independent firm of certified public accountants. The financial statements are presented in conformance with generally accepted accounting principles in the United States (GAAP) and audited in accordance with generally accepted auditing standafds (GAAS). Management of the City of Lewiston assumes full responsibility for the completeness and accuracy of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed the anticipated benefits, the objective is to provide reasonabl'e, rather than absolute, assurance that the financial statements are free of any material misstatements. The City of Lewiston's financial statements have been audited by RHR Smith & Company, a firm of licensed certified public accountants. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion on the City of Lewiston's financial statements for the fiscal year ended June 30, The independent auditor's report is presented at the front of the financial section of this report. The independent audit of the financial statements of the City of Lewiston was part of a broader, federally mandated audit in accordance with OMB Circular A-1'33 designed to meet the special needs of federal granter agencies. The standards governing the OMB Circular A-133 engagements require the independent auditor to report not only on the fair presentatfon of the financial statements, but also on the audited government's internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the City of LeWiston's separately issued report. The Management's Discussion and Analysis (MD&A) immediately follows the independent auditor's report and provides a narrative introduction, overview a.nd analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it. The comprehensive annual financial report is presented in three sections: introductory. B-7

80 financial and statisti.cal. The introductory section, which is not audited, includes the transmittal letter, the City's organizational chart and a list of principal officiars. The financial section includes the basic financial statements and the combining and individual fund statements and schedules as well as the independent auditor s report and MD&A. The statistical section includes selected financial and demographic information. which is generaljy p(esented on a multi-year basis and is unaudited. GOVERNMENTAL PROFILE Lewiston incorporated as a Town in 1795 and established as a City in 1863, is located on the east bank of the Androscogg in River in the south-central section of the State and is the second largest City in Maine with a population of 36,592, as of the 2010 census. The City is 34 miles north of Portland, Maine, 1 42 miles from Boston and 195 miles from Quebec City, Canada and encompasses an area of 34 sqljare miles. The City has operated under the Council-Administrator form of government since its most recent charter revision effecthr,e in Policy making and legislative authority are vested in the governing council which consists of a mayor and seven-member council. The governing council is vested with the authority. among other things, to adopt the budget, pass ordinances 1 and hire the City Administrator and City Attorney. The City Administrator is responsibje for carrying out the policies and ordinances of the City Council, for overseeing the day-to-day operations of the City, and for appointing the City's department heads. The Finance Director and other officials, whose primary function is financial, such as the Treasurer and Tax Collector, shall be appointed by the City Administrator and confirmed by the City Council. The City Clerk is also appointed by the City Administrator and confirmed by the City Council. The Mayor and Coundl are elected on a nonpartisan basis and to two-year terms. Only the Mayor has a limit on the term of office of 2, two-year terms. A school committee, consisting of nine members, eight elected and one City Council representative, has general authority for the public schools. The financial reporting entity includes all funds of the City of Lewiston. The City provides a full range of services including: police and fire protection; education; sanitation services; the construction and maintenance of highways, streets and infrastructure; human services; recreation and cultural activities; water, sewer and storm water utility services. Blended component units, although legalry separate entities 1 are, in substance, part of the primary government's operations and are included as part of the primary government. Accordingly, the Lewiston Mill Redevelopment Corporation is reported as a nonmajor special revenue fund in the City's governmental fund financial statements and included in the Governmental Activities column in the City's government-wide financial statements. Financial statements for the following entities are not included in this report as they are administered by boards separate from, or independent of. the City Council and otherwise have not met the established criteria for inclusion in the reporting entity: Lewiston-Auburn Water Pollution Control Authority Lake Auburn watershed Protection Commission Auburn-Lewiston Municipal Airport B-8

81 Lewiston-Auburn Transit Committee Lewiston-Auburn Economic Growth Council Lewiston-Auburn Committee Brief descriptions of these organizations and selected financial data are incorporated in the notes to the financial statements. The annual budget serves as the foundation for the City of Lewiston's financial planning and control. The City Administrator is required to submit a budget to the City Council for the ensuing fiscal year. The City of Lewiston's School Committee is also required to submit a budget to the City Council for adoption. The City Administrator's budget message explains the budget in fiscal terms and in terms of the work programs. It outlines the proposed financial policies of the City for the ensuing fiscal year, describes the important features of the budget, and indicates any major changes from the current year in financial policies, expenditures. and revenues together with the reason for such changes. The legal level of budgetary control is at the department level for the general fund and enterprise funds; and at the federal program level for the Community Development Block Grant (CDBG) fund. At anytime during the fiscal year, the Administrator may transfer part or all of any unencumbered appropriation balance among programs within a department. The City Council may transfer part or all of any unencumbered balance to another department. ASSESSING ECONOMIC CONDITION The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the economic condition within the City of Lewiston. Local Economy. Lewiston, along with the adjacent City of Auburn, is part of a broad and diverse economy. With a combined total population of 107,702, the Lewiston-Auburn area is the fourth largest MetropoHtan Statistical Area in Maine. Considerable growth has occurred in the service sector over the past several decades which have increased the diversity of Lewiston's economy, from mainly manufacturing-based economy to a mixed economy. Over the past 10 years, the average number of manufacturing jobs has decreased from 2,000 to 1,543 or 23%. The steady reduction in manufacturjng jobs had reversed itself for a couple of years before declining again during the economic slump. During the same 10 year period. the non-manufacturing Jobs remained relatively flat, going from 20,929, to 20,675, recognizing we are comparing. today's count to the height of the economic boom in the mid-2000s. Although total employment within the City declined by 3.1 %, total payroll grew by $169.1 million or an average of 2.1 % per year. Major ihdustries within the City's boundaries include health care, education and financial services, and specialized manufacturing. The City has two major regional hospitals and many health care service providers; and along with education service providers.for a fouryear liberal arts college, a state university, a two-year business college and the K-12 school system, they provide a great deal of stability to the City's workforce. The two hospitals employ a combined 4,566 employees and are the two largest employers. Viewing a 10- year snapshot comparison. employment at these major hospitals has grown by 67 4 employees from 3,892or17.3%. Professional and business services are the next largest B-9

82 sector of our employment base. The third largest employer ism Bank which has an operations center and retail banking outlets employing a combined total of 994 employees_ Recent economic activity during the past year encompassed several diverse projects including two office fit-out and renovation of space at the Bates Mill Complex totaling $2.3 million. An urban community center known as Tree Street Youth Center, undertook a capital campaign to expand and rehabilitate the center at a total cost of $776,000. Additionally 1 a vacant intercity bu11ding was refurbished to locate Maple Way Dental at a budget of $1.9 million, and a new $705 ~000 Subway franchise building was constructed at the Fairgrounds Business Park. Geiger Company, the home of the fame.us Farmers' Almanac, was founded in 1878 and conunues to invest in the community both economically and philanthropically. The company's recent initiative focuses on being socially responsible by reducing their carbon footprint. Their goals include having a carbon offset for every package they ship to reducing energy consumption and storm water runoff through technology, equipment upgrades. and building renovations. Geiger invested $8.9 million to achieve this goal. New home construction and major home renovation is beginning to get greater traction within in the City with a half a dozen projects permitted that exceed the $100, 000 threshold 1 and total $1.3 mill.ion in value. Long-term Financial Planning. Each year, the Crty Administrator submits a Capital Improvement Plan (CI P) which is submitted to the Finance Committee, Planrning Board and City Council for review. The fi\te-year plan includes an inventory of possible capital projects which may ultimately be included in the City's Capital Improvement Plan that may be financed through a variety of sources including federal or state grants; general operating fund; user fee revenue; or through the issuance of indebtedness. The issuance of debt is subject to specific authorization of the City Council and after a pubflc hearing on the matter. If the total amount of a single-purpose project exceeds 15% of the previous year's tax levy, authori zation to borrow must be approved by the voters at a referendum election (15% of FY 2016 Gross Tax Levy of $51,,904,270 is $7,785,641). The City Council formally adopted a Fvnd Balance Policy in fiscal year 2011, with the implementation of GASS Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. The poi.icy calls for the City to maintain a minimum unassigned fund balance in the general fund of 8% of general fund revenues and transfers in. At the close of the fiscal year, unassigned fund balance was 14.04% of revenues and transfers in, and is within the policy. Continuing to maintain adequate reserves is a priority of management and the City Council. With the State's enactment of Public Law 1 which estabushes municipal property tax levy limitations each year, the City's management is strategically planning. utilization of less than the allowable growth each year in order to bank portions of the ~llowable growth for future carry overs which is allowed by law. The City was $14,408,515 bel.ow the allowable lirnit of $44,209,575 for FY2017. This practice will allow the City Council greater flexibility in times of economic downturn. B-10

83 Financial Trends. Utilizing a ten year financial trend snapshot comparison is not indicative of the financial stresses that the City has experienced as of late. With the recent recession coupled with flat or declining nontax revenues, the municipal side of the budget has been forced to contract through layoffs, expenditure curtailments and use of rainy day funds for one time capital purchases. FY201 O provides the line of demarcation between growth in a strong economy and the recession. Since the recession hit, the City's operating budget has remained virtually flat. While debt service fell by almost $1,690,000 or roughly 18%, other operating cost rose by a similar amount producing a net overall increase in seven years of $$8,699. Prerecession, the City's portion of the tax rate went from $16.25 in FY07 to $14.58 in FY2010. Since then, the City rate rose to $15.83 in FY14, was flat in FY15, and rose again to $16.04 in FY16, due to a 26.7% loss in nontax revenue over that same period. For FY17, the City began to feel some revenue relief and projected a modest 4.23% increase - enough of a cushion to reduce that portion of the tax rate to $ Cost of education has outpaced recent increases in General Purpose Aid revenue. Additional costs include personnel increase due to union contract settlements, insurance costs, and additional teachers needed given class size ratios; special education and English Language Learner demands; transportation costs; and expanded educational programing for summer school and the Star Academy. The Essential Programs and Services (EPS) formula calculates a required local share in order to receive the full General Purposed Aid amount. Since FY11, the State provided a local share waiver to municipalities, thus lessen the impact on the tax rate. This waiver was phased out over a three year period concluding in FY17. Prerecession, the school's portion of the tax rate went from $9.06 in FY07 to $9.02 in FY2010. The rate further declined after the recession hit to a low of $8.91 thanks to the EPS waiver. However, given the phase-out, the education portion of the FY16 tax rate rose to $10.08 and further to $10.30-the minimum required amount to receive the full General Purpose Aid allocation. From FY07 to FY09, the City's State equalized valuation experienced growth of 13.9% or $2.267 billion to $2.582 billion, then the recession hit. From FY10, with a valuation of $2.474 billion, to FY16's valuation of$2.175 billion, valuation declined marginally each year or a total of 12.1 %. As with other positive financial measures this fiscal year, the Citis valuation rose to $2.203 billion or 1.3%. Major Initiatives. With the appointment of a new Recreation Director and a Program Coordinator this fiscal year, the Recreation Division will be showcased to highlight their fresh look on programing, improving department efficiency, and enhancing customer service. This year has been a busy one for Lewiston Recreation. We've created mascots, developed logos, added programs and started rejuvenating the Historic Lewiston Memorial Armory. We are moving forward with our mission and direction to provide affordable services, facilities and programs to improve the quality of life within our community. We have built relationships with the Lewiston High School Athletic Department to utilize coaching expertise to help advance the youth programs: We have also begun to cross the road to our neighbors at Bates to partner with their students to improve our activities. B-11

84 Income Statement $140,000 $120,000 $100,000 $80,000 $60,000 SllD,000 $20,000 t $0 -$ Revenues $116,774 $77,508 $96,374 $114,972. Expens.es 5126, ,964 $97,574 $ Profit/l0 S -$9,808 -$9,456 -$1,WO $9.896 We have increased programs and revenues and now nearly all of the programs are covering their own expenses without taxpayer assistance. Some of the major program increases have come. from our new partnerships like golf, ski/snowboard lessons, outdoor school camps and vacation camps. We've added summer basketball camps, a craft fair, a tiny triathlon, outdoor t-ball and our Lewiston Sparks cheering program. In just the last year Lewiston Recreation has increas.ed our program participants to 1, 141, an almost20% increase over 2016! Lewiston Recreation is now home to almost 90 different sessions of activities for youth, adults and seniors. The Lewiston Memorial Armory hosts over 30 different special events and user groups with more to come! Program Part icipants One of the major factors for the increased participation is our marketing and online presence. Lewiston Recreation has increased their Facebook likes by over 22% in the last year, to over 1,840 likes. It has almost been a full year since the introduction of an on line registration software system. This software has allowed the public to register online; creates class rosters; provides invoice as needed; and enables direct communication from B-12

85 Recreation staff. In less than one year, we have over 1,800 members in the registration software. The department has further expanded their on line functionality to include Armory rental space reservations, posting various athletic schedules in addition to their online program registration. Further the Department is using the recently added Web Store functionality provided on the City's website to allqw the public to make registration scholarship donations for children in need. The website solicited enough funds to provide free swimming passes for all children for the whole summer. We now truly are where the fun is... and cheering... and wrestling... and archery... and futsal... and golf... and volleyball... and scrapbooking... and skiing! AWARDS AND ACKNOWLEDGEMENTS. The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for ExcelJence in Financial Reporting to the City of Lewiston for its comprehensive annual financial report for the year ended June 30, This was the forty-second consecutive year that the City has received this prestigious award. In order to be awarded a Certificate of Achievement, the City published an easily readable and efficiently organized CAFR. This report satisfied both GAAP and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report could not have been accomplished without the efficient and B-13

86 dedicated services of the accounting and auditing division. Special thanks to Ralph Lenfestey, Assistant Finance Director and Allen Ward, Purchasing Agent for their dedication and loyalty, and countless hours contributed in preparation of this report and to all the staff in the finance department for their valuable assistance. I would also like to acknowledge the firm of RHR Smith & Company for their efforts and guidance during the engagement. Credit must also be given to the Mayor and City Council for their interest and support in planning and conducting operations of the City in a responsible and progressive manner. Respectfully submitted, flealher.a.j./wibi1 Heather A. Hunter, Finance Director B-14

87 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Lewiston Maine For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2016 Executive Director/CEO B-15

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89 City of Lewiston, Maine Organizational Chart Voters City Adminlstrator,, ,...{... Oe_P_utv_c_uy_A_d_rn_lh_ls_tra_to_r,) Assessrng r- - Community & Economic Development Finance & Human Resources Fire City Clerk Library,...,.. ~ Management Information Secvices (MIS) Planning & Code EnforcelT)ent Police Social Services Pobiic Works & Recreation B-17

90 City of Lewiston, Maine List of Principal Officials June 30, 2017 Robert E. Macdonald James J. Lysen Timothy J. Lajoie Isobel C. Golden Shane D. Bouchard Kristen S. Cloutier, Council President Joline Landry Beam Michael R. Lachance Elected Officials Mayor Council Member - Ward 1 Council Member - Ward 2 Council Member - Ward 3 Council Member - Ward 4 Council Member - Ward 5 Council Member - Ward 6 Council Member - Ward 7 Appointed Officials and Department Heads Edward A. Barrett, City Administrator William H. Healey, Chief Assessor Lincoln Jeffers, Community & Economic Dev. Director Bruce H. McKay, Acting Fire Chief David A. Jones, Public Works Director Gildace J. Arsenault, Planning & Code Enforcement Director Sue A. Charron, Social Services Director Philippe J. Nadeau, Deputy City Administrat Kathleen M. Montejo. City Clerk Heather A. Hunter, Finance Director Brian T. O'Malley, Police Chief Timothy J. Earle, MI S Director Marcela S. Peres, Library Director B-18

91 FINANCIAL SECTION B-19

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93 RHR - - SI\llTH! - < i>\11' \\I City Council City of Lewiston Lewiston, Maine Pnwen E.xpettise mu/ lnte{:rio IND6PENDENT AUDITORS' REPORT Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the City of Lewiston, Maine as of and fqr the year ended June 30, 2017, and the related notes to the financial statements, which collective.ly comprise the City of Lewiston, Maine'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 ihdudes the design, implementanon, 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 finaneial statements bas.ed on our audit. We conducted our audit in accordance with auqiting standards generally accepted in the Unit~d States of Americ~ ancl the standards.applica.ble to financial audits contained in Government Auditing.Standards, is-sued by the Comptroller General of the United Stat~s. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures. in the financial statet'nents. The procedures selected depend on th~ auditor's judgment, including the asse$sment of the risks of material misstatement of the financial statements, Whether due to fraud or error. In making those risk assessments, the auditor considers internal contrnt relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, bl!t hot for the purpose of expressing an opfnron on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluati11g the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as,evaluating the overall presentation of the financial statements... 1 Old Orchard Road, Bu.. xron. :--tw1c ( "rel: (800) 300-'"'DS (.2ff7') CJ'.!iJ--11$!16 r=ax: (~ff 1 } ijlfj--1601} WW\\.rbn;mit.11.. cmn B-21

94 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In oµr 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 Lewiston, Maine, as of June 30, 2017, and, the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary lnformat;on Accounting principjes generally accepted in the United States of America require that the management's discussion and analysis, retiree healthcare plan information and pension information. as listed in the table of contents, be presented ta 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 tor placing the basic financial statements in an appropriate operational, economi c, or historical context. We have applied certain limited procedures to the required supplementary lnformati.oli in accordance with auditing standards generally accepted in the United States of America, which consisted of Inquiries of management about the rnethods of preparing the Information and comparing the information for consistency with mana ement'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 ari 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 Lewiston. Maine's basic financial statements. The introductory section. combining and individual nonrnajor fund financial statements, and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financia'i statements are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures. Including comparing B-22

95 and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion. the combining and individual nonmajor fund financial statements are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provjde any assurance on them Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, We have a.isa issued our report dated December 12, 2017, on our consideration of the City of Lewiston, Maine's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations. contracts and grants 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 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 Lewiston, Maine's internal control over financlaj reporting ahd compliance. f.f1t.s rluin ~ ectr[;f:lat;j Buxton, Maine December 12, 2017 B-23

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97 CITY OF LEWISTON, MAINE Management's Discussion and Analysis Jun.e 30~ 2011 As :management of the Chy of Lewiston, we offer the readers of the City.. s. financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30., We encourage readers to consider the infonnation presented here in conjunction with additionaj information that we have furnished in our letter of transmittal which can be found dn page 7 of this report. All amounts, unless otherwise fodicated, are expressed in thousands of dollars. Flnancial Highlights The assets of the City of Lewi?ton exceeded its liabilities at the close of the most reeent fiscal year by $157,974 (net position). 111e City's total net position: increased b.y $2,944,_ which represents al.9% increase. As of the close of the current fiscal year, the City of Lewiston' s governmental funds reported combined ending fund balances of $27,362 a decrease of $4,546 in comparison with the prior year. ;\pproximately 56.6% of this. totaj amount or $15,475 is available.for spending, at the City's diser-etion (assigned and unassignedfimd balance).. At the end of the current fis(;al year, unassigned fund balance for the general fund was$] 6.,415 or 14.04% of general fund revenues and transfers. in. The City oflewrston s total debt decreased by $2,090 (1.6%) during the current fiscal year. Overview.of the Financial Statements This discussion and analysis is intended to se:rve as an introduction to the City of Lewiston's basic financi al statements. The City's basic financial statements comprise thre.e components: 1) government wide financial statements. 2) fund.financial statements. and 3) notes to the.financial statements. This report also contains other swplementary infonnation in addition to. the basic financial statements themselves. Government-wide Finandal Statements. The governmenr-wide jlncmcial smtements are designed to provide readers with a broad overview of the City's finances. in a manner similar ta a privatesector business. The statement of net position presents information on all of the City of Lewiston's assets. deferred outflows of resources, liabilities, and deferred inflows of resources, with the difference repo11ed as net position. Over time, increa5es or decreases in net position may serve as a useful indicator of whether the financial position of the City of Lew1ston is improving or deteriorating. The sta1emem of activities presents information showing how the City's net position 9hanged during the most recent 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 /lows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., unc()llected taxes. and eamed but unused vacation leave.) B-25

98 Both of tbe government-wide financial statements distinguish functions of the City of Lewiston that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover al I or a signi ficanl porrjon of thei:r costs through user fees and charges (business-type ac1ivi1ies). The governmental activities of the City of Lewiston include the broad activities of general government, public safely. higln ays and streets, sanitation (public works). human services. culture and recreation, and education and nutrition. The business-type actjvities of the City of Lewiston indude the water system. the sanitary sewer system, and the storm water system. The government-wide financial statements jnclude not only the City of Lewiston itself (hwwn as 1ha primary government) ~ but also tbe Lewiston Mill Redevelopment Corporation as a blended component unit. The government:-wide financial statements can be found on pages of this report. Fund Financial Statements. A.ftmd is a grouping of related. accounts thal is. used to maintain control over resources that have been segregated for speci fic activities or objectives. The City of Lewiston. like other state and local governments, uses fund acco unting co ensure and demonstrate compliance with fjnance-related legal requirements. AJI of the funds of the City of Lewiston can be divided into three categories: governmental funds, proprietary funds and fiduciary funds... Govermne11tal Fu11ds. Govermrrental fimds are used to account for essemiall_ the same functions reported as governmental acth1ifies in lhe govemment.. wide financial Statements. However. unl ike the government-wide financial statements, governmental fund financial statements focus on nearlerm inflows and outflows of spendable re,wurces,,. as well as balances of spendcrble resut1rces available at the end of the fiscal year. Such infonnation may be useful in evaluating a government's near-term financing requirements. Because the focus of governmental funds is narrower than that of governmeuc-wide financial statements, 1t is useful to compare the infonnation presented for governmental funds with simjlar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long lem1 impact of ~he government's near-term financin,g decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconcijiation to facilitate tl1is compari~on between govemmenral funds and governmental activities. The City of Lewiston maintains thirteen individual govommental funds. fnfom1ation is presented separately in the ~ovem.menta l fund balance sheet and in the governmental statement of revenues. expenditures and changes in fund balances for the general fund, capital prajects fund, school categorical grants special revenue fund and the debt service fond which are considered to be major funds. Data from the other nine govemmemal funds are combined into a single aggregate presentation. Indi vidual fund data for each of these non-major governmental funds is provided in the fonn of combining rarements elsewhere in this report. Tiie City of Lewiston adopts an annual appropriated budget for its general fund. A budgetary comparison statement has been provided for the general fund to demonstrate compliance with this budget. B-26

99 The basic governmental fund financial statements can be found on pages of this report. Proprietary Funds. The City of Lewiston maintains one type of proprietary fund:. Ente1prise.fiouf, are used to report tbe same functions presented as business rype activities in the government-wide financial statements. The City of Lewiston uses enterprise funds to account for its water system and storm and sanitary sewer systems. Proprietary funds provide the same type of information as the government-wide financial statements. only in more detail. The proprietary fund financial statements provide separate infom1ation for the waler system, sanitary sewer system, and storm water utility fund. all of wh ich are considered to be major funds of the City of Lewiston. The basic proprieta1y fund financial statements can be follnd on pages of this report. Fiduciary Funds, Fidudary funds are used lo account for resources held for the benefit of parlies outside the government. Pidaciary funds are 1101 reflected in tbe government-wide financial statements because the resources of those funds are 1101 available to suppon the City of Lewiston s own programs. The accounting used for fiduciary funds is much like that used fo r proprietary funds. The basic fiduciary f w1d financial statements can be found on pages of this report. Notes to the Financial Statements. The notes provide additional information thal is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be fou nd on pages of this report. 0th.er Information. Jn addition to the basic financial statements and accompanying notes. this report also presents certain reqt.rired supplementary information concerning the City of Lewiston s progress in funding its obligation "to provide pension benefits and other post-employment benefits to its employees. The combining statements refen-ed to earlier in connection with the non-major governmental funds are presented immediately following the required supplementary information on pensions and other postemployment benefits. Combining and individual fund statements and schedul.es can be found on page 90 of this report. Government-wide Financial Analysis As noted earlier. net position may serve over time as a useful indicator of a govemmem s financial position. In the case of the City of Lewiston, assets exceeded liabilities by $157,974 at the close of the most recent fiscal year. A comparison of key government-wide c.:omponents is found in the following tab]e. B-27

100 Assets: Current & Other Assets Capital Assets Total Assets Deferred Outflows of Resources Liabilities: Noncurrent Liabilities Other Liabilities. Total Liabilities Deferred Inflows of Resources Net Position: Net Investment in Capital Assets Restricted Unrestricted Total Net Position City oflewiston's Net Position Governmental Business-type Aetivities Activities $42, , ,710 14, ,465 26, ,615 6, ,158 11,002 (16,668) $108,492 $44, , ,288 10, ,783 24, ,856 7, ,508 14,145 (19,821) $107,901 $10,746 81,826 92,573 37,468 5,622 43,090 40,886 8,596 $49,482 $ 10,324 77,364 87,688 35,430 5,059 40,489 38,834 8,366 $47,199 Total Primary Government $53, , ,282 14,J83 149,933 31, ,705 6; ,044 I l,002 (8,072) $157,974 $55, , ,976 10, ,214 29, ,345 7, ,342 14,145 (11,456) $155,100 By far the largest portion of the City of Lewiston' s net position ($155,044) reflects its investment in capital assets (e.g., land, buildings, machinery and equipment); less any related debt used to acquire those assets that is still outstanding. The City of Lewiston uses the capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City of Lewiston's investment 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 s.ol,lrces since the capital assets themselves cannot be. used to liquidate these. liabilities. An additional portion of the City of Lewiston' s net position ($11,002) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position, a deficit of $13,599 is mainly due to recording all of the City's long-term liabilities that are not due and payable in the current period. Liabilities of this nature include noncapi taj bonds payable, bond premium, accrued interest payable, obligations. for workers' compensation claims, unfunded actuarial pension liability, long-term compensated absences., other post-employment benefits, and landfill closure and postclosure care costs. A complete reconciliation, by item and amount, can be found in the notes to the financial statements.. At the end of the current fiscal year, the City of Lewiston is able to report positive balances in all three categories of total net position, both for the government as a whole, as well as for its governmental and business-type activities. The same situation was true for the priorfiscal year. The City'-s net position increased by $2,944 during the course of the year. Contributing factors in the increase in governmental activities net position ($661) were increases in combined grants and contributions of $ 1,138, tax related revenues of $381, which tempered the $10,020 growth in expenses. Net position in business-type activities increased by $2,283 due to.charges for services B-28

101 exceeding expenses in water by $1,083, jn sewer by the amount of $783, and $835 in stonn water. The business-type activities' grants and contributions rose by $40 which offset the $25 de.cline ia investment earnings. Governmental Activities. Governmental activities incre ased the City of Lewiston's net position by $661. Key elements of the incre.ase are as follows: City of Lewiston's Changes in Net Position Governmental Business-type Activities Activities Total Revenues: Progtiam revenues: Charges for services $4,583 $4,715 $14 ~032 $13,057 $ 18,616 $1'7,772 Operating grants &. G:Ontributions 64,231 63,966 ' ,088 Capital grants & contributions 2,524 L65l ,679 General revenues:. Property taxes 52, ,206 52, ,206 Other ta-xes 5,434 5,015 5,434 5,015 Grants & contributions not restricted to specific programs , L6 5,288 Other ], , Total revenues 135, ,308 14,239 11, , ,~penses: Genernl gqvernment 12J98 12,977 12;3'98 12,977 Public safety l8j08 16,700 18)08 16,700 Public works 16,480 14, ,480 14,192 Human seivices 1,562 1, ,263 Culture & recreation 2,358 1,934 2,358 1,934 Education & nutrition ,439 81,409 75,439 Interest on long-term deht ,082 3, Water 4,457 4, Al8 Sewer 5, , Storm water l,781 1,765 l.781 1, 765 Total Expenses 135, ,521 1 l,li8 147,060 (36,706 Increase in net position before transfers ,718 2,' ,852 Transfers (435) (457) lnorease in net position '661 8,l 76 2,283 1, ,852 Net po$ition. July l 107, ,656 47, , ,178' Net position, June 30 $108,493 $107,832 $49,482 $47 ~ 199 $157,974 $155,030 Revenues received from the Maine Departme,nt of Transportation grants rose by $873. ln spitt;! of a seventeen cent tax rate, property tax revenue shrank by $38. B-29

102 Charges for service lagged behind the prior year by $13 I, of which $65 is attributed to a decline fo adult education and school lunch fees. Pro ram Revenues Com ared to Pro 90, , , , , , , ' 10,000 0 Expenses Revenues Governmental Activities Revenue Sources a charges For service Oper. Grants & Contributions o Capital Grants & Contrtbutlons CJ Property Taxes Other Taxes 2% ounrestncted Grants & Cont. Other Revenue Business-type Activities, The City of Lewiston s net position for business-type activities increased by $ Key financial elements are as follows: Increase in fund equity from joint ventures with the Auburn Water & Sewer Districts in Sewer ($96) and in Water ($56). B-30

103 lncome from operations continues to be strong at $14.032, an increase from the prior year of $975. Operating Expense rose by 3.6% or $403. Program Revenues Compared to Program Expenses.~~~~~~ ~----'"-~~~~~~ 7,000 6,000 5,000 4,000 3,000 mrevenues Expenses Water Sewer Storm Water Financial Analysis of the Government's Funds As noted earlier, the City of Lewiston uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds. The focus of the City of Lewiston's governmental.fzmds is to provide information on a near-term inflows, outflows and balances of spendable resources. Such information is usefu] in assessing the City of Lewiston's financing requirements. In pa11icular, unassigned fund balance may se1ve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City of Lewiston 's governmental funds repo1ted combined ending fund balances of $27,362, a decrease of $4.546 in comparison with the prior year. Approximately 56.6% of this tota] amount ($15,475) constitutes assigned and unassigned fimd balance, which is available for spending at the city's discretion. The remainder of the fund balance is either restricted ($7,814) to indicate that it is not available for spending due to constraints placed on the use of resources which are either externally imposed by creditors, granters. contributors, or other governments or imposed by law through constitutional provisions or enabling legislation or; nonspendable because they are not in spendable form ($2.854) or are legally or contractuajly required to be maintained intact ($1.218). The general fund is the primary operating fund of the City of Lewiston and, by definition. is the only fund that may have a positive unassjgned fund balance. At the end of the current fiscal year, unassigned fund balance of the general fund was $16,415 while total fund balance was $24,310. As a measure of the general fond 's liquidity, it may be useful to compare both unassigned fund balance B-31

104 and total fund balance to total fund revenues. Unassigned fund balance represents 14.04% of total general fund revenues and transfers in ($116,932), while total fund balance represents 20.79% of that same amount. To provide for unforeseen events and liquidity preservation, the City adopted a fund balance policy that targets the unassigned general fund balance at a floor of 8% and a ceiling of 12%. The current unassigned fund balance of 14.04% faus well above the prescribed range. The fund balance of the City of Lewiston's general fund decreased by $1,016 durjng the current fiscal year. Key factors contributing to this change are as follows: Total revenues including transfers in, rose by $6,624 or 5. 75%. Expenditures grew by $8,959 with $5,683 attributed to a rise in educational costs. Transfers out which is comprised primarily of debt service dropped by $759. The school categorical grants func:l has a fund balance of $647.. The fund balahce decreased by $956 during the year due to a $ 1,971 decrease in grant revenue which was partially mitigated by a $241 increase in charges for service. Both grant funded oper~ting expenses and the cost of the sch.ool nutrition program rose by $157 and $180 respectively. The debt service fund has a zero fund balance. The capital projects fund has a total deficit fund balance of $6, 159. Expenditures for capit(,11 projects amounted to $10,969 during the year. The City elected to defer the sale of $6,756 in bonds for a portion of the FY2014 and most of the FY2017 capital improvement plan until early in FY2018. Grant funds received from the Maine Department of Transportation totaled $1,987, a $f,539 increase from Total fund balance decreased by $2,657. Proprietary Funds. The City of Lewiston' s proprietary funds provide the same type of information found in the government-wide financial statements but in more detail. Unrestricted net position of the water fund at the end of the year was $3,984; for the sewer fund $3,689;, and for the stotm water fund $530. The total growth in net position for the water fund was $1,057, while the increase in net position of the sewer fund was $745, and $481 for the storm water fund. Other factors concerning the finances of these three funds have already been addressed in the discussion of the City of Lewiston' s business-type activities. General Fund Budgetary Highlights The City Council approved two supplemental budget adjustments during the fiscal year. A supplemental appropriation was approved to fund $2,333 of one time capital items for various departments, and another $577 was authorize to replace a fire pumper that was damaged in an accident. The only other changes to the original budget approved by the City Council during the course of the year were transfers within and between departments. The majority of the transfers made were to allocate the salary reserve and fonge benefits to specific departments, as well as pay for the cost of repairs or projects that were unanticipated when the budgets were originally submitted. The total amount of transfers made was $2,210. B-32

105 The overall general fund budget (on a-budgetary basis of accounting) ended the year with a decrease in fund balance of$ l,ol6-more favorable then the planned use Qf $5,030 of fund balance. The following schedule provides a summary of genera] fund revenues on the budgetary basis of accounting for the year and the amount ofinereases and decreases in relation to prior year revenues: In.crease/ Final Actual Percentage. (Decrease) Revenues Budget Amount of Total from 2016 Taxes~ Real Estate $ 52,.957 $ 52; % $ 354 Excise 4,066 4, % 366 Licenses and Permits % 11 Intergovernmental 51,076 50, % 703 Charges for Sen/ices 1,206 1, % (533) Fines % 12 Interest, RentS & Royalties t,606 1, % 75 Miscellaneous % 2S9' Transfers from Other Funds % 194 Total $ 112,088 $ 113, % $ 1,441 Fiscal year revenues for the general fund (on lhe budgetary basis of accounting) totaled $113,058 or a 1.3% iru:rrease. Current and prior year real estate and personal property taxes continue to represent the largest i:evenue sourcet with $52.8 million or 47% of all general fund revenues. The increase of $354 in the amount collected. is a result of a seventeen cent tax rat!;! increase. Exci$.e tax r~venue which amounted to $4~ 13, outpaced the prior year by '$366 or 8%, and represents 4.3% of the revenues. lntergovemmental revenues amounted to $50,686 or 44.8% of the total, the c ity~ s second largest revenue source. The inctease of $703 from the previous year was largely due to addit'ional school a id and general assistance reimbursements. Charges for seryjces decreased $5S3 from $1,796 to $1,263 with ~he reductions in tipping fees at the solid waste facili ty ($200) and education tuition reimbursements ($318). Ioteresti rents, and royalties increased by $75 to $1r663'. Combined parking garage revenues climbed by $86 and franchise fees rose slightly by $6 in the current fiscaj year. Miscellan.eous revenues.increase by the sale of surplus property ($1.02), unclassified.revenue ($9), and the sale of recyclabje. materials and metals (.$17), Transfers from other funds 1ncreased by $194 due to the annual tluctuation that occurs from the school categorical special revenue fund to the general fund for r~imbursed costs and an increase in operating reimbursements from the enterprise funds. B-33

106 Increase/ Final Budget & Actual Percentage (Decrease) Expenditures FY1 6 E'ncum. Amount of Total from 2016 General government $ 3,788 $ 3, % $ 2 32 Public safety 14,3'18 14, % 1,140 Public works 7,882 7,553 '6.5% 790 Human services 1,104 1,079'.0.9% 144 Recreation % 172 Library 1,100 1, % 78 lnt~rgovernmenta l 4,089 4, % 153 Education 63,773' % 5,371 Insurances & pensic:ms 6,538 5, % 1,260 Miscellaneous 585 1,608 1,4% (351) Transfers to other funds 1.3,332 13, % (760) Total $ 11'T,117.$ 116, % $ 8,229 Expenditures for the g~neraj fund (on ihe budgetary basis of accounting) totaled.$1 16,243 in fiscal year ended June 30, The net increase in general governnient expenditures of $2.32 were attributed to increases in legal cost ($14), labor relations ($28), administrative ~a lari es due. to a re.tirernent ($45), and the purchases of capital items funded through the City Council's supplemental appropriations ($130). Savings were reaped in the election budget ($20). and assessing ($32) due to personnel costs. Public safety increas.ed by $1,140 to $14, 181. The cost of police and fire operations rose by $207 and $.861 respectively primarily resulting from regular personnel and bei1efit costs, overtime ($161), and $.577 in additional capital costs for eme-rge11cy vehicje replacement. The departments found some relief in gas prices which provided an overall savrngs' of $1 I and in cepai;rs ro vehicles and equipment ($17). Edu~atiop_ expeudirures of $63,492 represent '54.6% of the total expenditures. Expendit~res rose by $5,371 due to' additional personnel costs, new prog'raming 1 special education, and staffing and operational needs in order to meet the rise in student enrollment. CuJturaJ and recreation had a combined increase of $250. fncreases were noted in personnel costs and benefits ($6), supplies inch,iding books ($33), and capital improvements to the City's Armory building and library ($202) for additionaj security, roof work 1 elevator control replacement, and gymnasium improvements. The public works department didn't have the 1uxury of a mild winter this year which attributed $470 to the $790 overall increase from As experienced in other departments, personal costs rose by $308. Th.e CounciFs supplemental appropriation provided $776 in additional capital and one-time repair funds which included: $157 for the street Jight r.eplacemen1 program,, $87 in leachate monitoring, $70 in sidewa1k improvements,, $73 for park and pool upgrades, and the purchase of a GJ>S fleet tracking system for $62. The replacement of most of the City's mercury street lights with energy saving LEDs pmvided an $83' sav'it1gs in electricity. The municipal garage posted a $125 B-34

107 surplus attributed to an inerease. in vehicle rental credits of $145 and a surplus in vehicle repairs of $32 offsetting the $15 deficit in gasoline. Intergovernmental expenditures rose by $153 resulting from an increase in the county tax ($64 ) 1 additional capital funding for the municipal airport ($64\ and operati'onal increases for the transit agency ($26) due to a new busing contract. Insurance and pension eosts.gtew by $1,260.. Healthcare costs rose by $106 due to the City"s 8.53<J-~ rate increase which dampened the savings earned by converting the remaining bargaining un1ts from the POS plan to the PPO plan. Tl1e City offers a flexible spending account to assj.st with out of pocket costs - th.is year that benefit rose by $10. Auto coverage rose by $'16. Given the number of retirements this year partjcular1y in senior management> the amount of severance pay benefits rose by $251. As(! co.st savings measure, the City Council. appropriated an additional $900 to pay off the out.standing public safety IUUAL which produced a cash savings of $110,612. With one.remaining pensioner; the City pension plan. cost dropped again this year by $21. The workers compensation fund is merged with the City's m1sc.euaneous expenditmes and represents $I ~304 of the $1,608. Total miscellaneous costs shrank by $3.5 L of which $148 is attr.ibuted to workers compensation due to a reduction in claim costs. The.salary reservation deqreased by $346 reflecting th~ signing of the public safety labor contracts. Debt transfers to the debt service.fund shrank by $406 to $J 3,04L The transter to the Acquisition/Demolition Special Revenue Fund was reduced by $353 1n the current year. Capital Asset and Debt Administration Capital As~ets. TJ1e City of Lewiston's investment in cap it~t assets for its governmental and business~type activities as of June , amounts to. $ (net of accumulated depreciation). This investment in capital assets includes land, buildings and system improvements, machinery and equipment, park facilities; roads, highways, bridges and water and sewer systems. The total increase in the City of Lewiston ~ s investment in net capital assets for the current fiscal year was.2% (a 1.1 % increase. for governmental activities and a 5.8% jncrease for business-type activities). Major capital ass~t ey:ents during the cucrent fiscal year included the following: Municipal building impr0vements totaled $3,268, of which the final addition to the FarweJl Elementary School amounted to $ l,548, b.i,gb school ventilation and electrical upgrades ot $445, and Montello School mof and restroom replacement at $900. Improvements to streets, signals. and sidewalks totaled $984, $1, l 42~ and $427 respe.ctively. Park and playground improvements tota.led $738 which included variot1s elementary school equipment replacemenl and upgr.ades of $94, the :final capitalization. of the amphitheater ($421.) and the Kennedy Park Gazeebo ($144) 1 and equipment enhancements at Potvin Park ($45). Equipment added for all dep.artments during the year amounted to $3 ~013 ~ which included a fire response vehicle and Pierce pumper at $646, variety.of city and school technology upgrades of $1,036, four police vehicles at $11 l, school lunch equipment purchases totaled $78, and a variety B-35

108 of municipal garage equipment totaling $ 1,005 including three combination plow/sander trucks. at $477. Tbewater uti1ity replaced 9,649 feet qfwaterma:ins at a cost of$1}913. The sanita{y sewer line rehabilitation projects costs $891. The River Road pump station was upgraded for a rota I o.f $3 3 7 There was $1 $37 4 of CSO infrastructure improvements to the Sunnyside area. A $232 vacuum sweeper was purchased by the storm water util-ity. City of Lewiston' s Capital Assets (Net of Accumulated. Depredation) Governmental Business-type Activi.ties Activities Total " Land $15,200 $ 14,164 $1,295 $ 1,295 $16,495 $ 1 S,459 Buildings 63, ~ 810 6,507 6,394 70,08 l 69,.204 lmptovements Other Than Buil.dings 18, ,750 18,192 18,750 Machine.ry & Equipment 23,116 22, ~997 22,957 l nfrastructure 72J ,322 66, , Construction in Progress 5,243 5,224 2,821 2,420 8, Total Capital Assets $197,440 $195,341 $81,826 $77,364 $279,2.96 $272,705 Additional information on tbe City of Lewiston's capital assets can be found in note IV.Con pages of this report. Long-term Debt. At the end of the current fiscal year,. the City of Lewiston had total bonded debt outstanding of $124,816. which was a dec~ease from 2016 of $2,090 or 1.65%. The entire amount is backed by the full fai th and credit of the City. The following schedule represents ai breakdown of the debt by governmental and business-type activities and comparisons with the previous fiscal year. City oflewiston's Outstanding Debt GQvernmental Business-type Activities Activities Total 20_ l ' Bonds Payable $84;805 $88,812 $40,011 $38,094 $124,816 $ 126,906 The City oflewiston's rating was.affirmed at an AA- with a stable. outlook from Standard & Poor's for its general obligation debt. Please refer to Standard & Poor' s report for a comprehensive explanation 9f their rating assessment. State statutes limjt the amount 0f general obligation debt a mu.ni'c'ipality may issue to 15% of its total state as ~essed valua,tion. The current debt limitation of the City of Lewiston is $330,450 which is significantly in excess: of the City of Lewiston' s outstanding general obligation debt. Additional information on the City of Lewiston's l ong~term debt can be found in note IV.Fon page:; of this report B-36

109 Economic Factors and Next Year's Budgets and Rates During the past year, the City of Lewiston experienced a decline in real estate value of $3,010 which offset the uptick in personal property value pf $152 attributed to Central Maine Power's infrastructure improvements. The reduction in real estate valuation steams from the City's demolition efforts to eliminate the.inner city blight($ t213). and an increase in the City's portion of the Homestead Exemption ($13,771). Valuation growth continues in the.utility category by $18,692, and tempers the reductions in residential ($ l 5.803). commercial ($3, 750) and industrial ($2,000) segments. Fluctuatiops in value during FY.?017 produeed an 86% assessed value to state equ(lliz;ed value ratio, which was a slight reduction from last year's. 87.2% and is above the minimum rate of 7S% of market value. For the third year in a row since the decline ]ti ihe state equalized value or market value grew by $28.2 million to $2:203 million, but still falls wen short of the peak of $2.58 million in FY2009. FY18's budget did not post expanded growth in nontax municipal revenues that was experienced in the FYI 7. Revenue budget estimates rose slightly by $30 br.26%. The mlmicipal operating expenses and county tax rose by $1,214 or 2.94%.and $J 53 or 6.2 8% respectively. Municipal budget category fluctuations are. noted in the table below. The impact on the tax rate was a 53 aent increase for the ruunicipality and a 7 cent increase to cove;r the growth in the county budget. FY 17 Approved FY18 Approved Increase/ O/o Cate&o!l Bud&et Bud~et (Decrease) Chan&e Personnel Services (including fringe) $22,932,043 $23,850,683 $918, % Contractual Services 4,999,901 5,054,214 54, % Supplies & Materials. 2,042,138 2,029,400 (12,738) -.60% Fixed Costs 13,831,573 t4,224, ,6.JO 2.8% Capital (14,335) % T9taJ Municipal Budget $43,7.91,320 $45,158,480 $1,367, /o Past student enrolfment increases continue to in1pact many areas of the schoo.1 budget from additional staffing to increases in contractua.1 services particularly in the areq of special education and English Language Learner resources, forcing a.$5.407 increase in total expenditures - a figure that just satisfies tbe minhmun required amowlt in order to receive I 00% of the stat~ 's educational subsidy. Given the two-year dela~ by the state, the department is now receiving $7.370 in additional funding from the Ma.ine Department of Education for prior years' enrollment growth and additional earmarked funds. The net result produced a 12 ee nt reduction to $10.18 in their portion of tax rate. Additiona1 highlights of the FY2018 budget include the fo1lowing: The overall tax rate rose by 48 cents to $ The City Council cut an additional $123 of expenditures from the City Ac;imjnistrator's recommended budget. The rise in debt service of $182 and intergovernmental agencies of $I 62 tnade 1tp the 1ncrease in fixed costs. General govetnme.nt, pub'lic safety ~ and social service budgets all rose by $85, $61 O. and $138 resp.ectively, while public works declined by $22. The City aqded eight new p9,sitions: 4 in fire, 3 jn sewer, and I in economic devc;!lopment. B-37

110 The Schoo1 Department increased empfoyment by 38.4 positions. The state's homestead ~xemption rose from $13.5 to $17.8 which.produced a tax savings for those home owners who have real estate values under $250: Public L.aw 1 adopted in 2005, imposes a property ta,x levy limit wj:iich is based on a combination of the State's average personal income growth factor.and the property growth factor of each individual municipahty. The limit is on the municipal tax levy only. excluding schools and tbe County which has its own limitations. The total growth factor for the City on the 2018 fiscal year budget is 5.41 %. The growth limitation factor is cumulative each year and alk>ws municipalities to utilize unused growth in previous years. The budget adopted by the City Council was well w ithin the Limits established by the law and has been since the City has been under this limitation. The water, sewer and stom1 water department budgets are separately funded witb user.tees. The approved 2018 fiscal year wate.r department budget of $5,317 was 1.4% less than the prev.ious year, and no water rate increase was required. The sewer department budget of $6,497 was an increase of 14. l %. A 16% rate increase was necessary provide the needed operating capital. The storm water budget.of $2,883 rose by $97 over the previous year. Pr:ojectecl cash flows were 'insufficient to cover the additional costs therefore a 15% rate increase was required. The unemployment rate for the Cjty of Lewiston is currently 3.5% which was the same rate as a y~ar ago. This rate is the same as the states -rate ~ and below the national average unemployment rate of 4.4%. Requests for lnform.ation This financial report is designed to provide a general overview 0f the City. of Lewi.ston's finances for all those with an interest in the City's finances. Questions concemfng any 9,f the information provided in this report or requests for additional information should be addressed to the Office of the Finance Director, City of Lewiston. Maine, 27 l>ine Street Lewiston, Maine B-38

111 BASIC FINANCIAL STATEMENTS B-39

112 City of Lewiston, Maine Statement 1 Comparative Statement of Net Position June 30, 2017 Primary Government Governmental Bus i nes~ -Ty,pe Total Total 2016 Activities Activities Resta~d ASSETS Cash and Cash Equivalents $ 4,012,701 $ 416Jl78 $ 4,429,379 $ 6,639,.777 Investments 27,868, ',989 28,302,314 27,882,453 Receivables: Taxes 1,903,091 1,.903,091 1,914,902 Accounts (Net.of Allowance for Uncollectibles} 884,097 2,-023, ,752 3, lnterfund 0 0 Intergovernmental 3,256, ,779 3,529,286 Loans (Net of Allowance for Uncollectib'les) 3,755,668 3,755,66.8 3,741,037 Prepaid Items 258, lnventory , Restricted' Cash & lnvestmehts 396, , ,344 Intangible Assets (Net of Amortization) 1.,220,527 1,220, ,626 Investment in Joint Ventures 5,755,1.86 5,755;186 5,602;870 Capital Assets: Land 1'5,199,596 1,294,710 16,494, ,121 Buildings 107,616,629' 11,101.,959 ' 18',718, , Improvements Other Than Buildings 37,239,23'4 37,239,234 36;607,31 2 Machinery and Equipment 413,129,812 3,073,651 49,203,463 47,840,119 Infrastructure 130,575,743 91,137, ,713, ,557,977 Less: Accumulated Depretiation (144,564;493) (27 Ji03,515) (172,168,008) (164,'502,.194) Construction In Progress 5,243,399 2, ,064,833 7,644,936 Total Net' Capital Assets 197,439,920 81,82.6, ,266, ,635,836 Total Assets 239,710, ',572, ,282, ,907,276 DEFERRED OUTFLOWS OF RESOURCES Deferred Outflows of Resources Related to Pensions 14,183,110 14,183,110 10,325,971 Total Deferred Outflows of Resources 14,183,110 14,183,110 10,325,971 LIASILITlc S Accounts. Payable 4,716,008 1, ,189 5,301,590 Accrued Wages and Taxes Payable 7,757, ,706 7,812,843 6,247,201 Customers! Deposits.4,553 4,553 2,594 Accrued Interest Payable 453, , , S.406 Unearned Revenue ,42.7 Liabilities Payable From Restricted' Assets 396, , ;.344 Noncurrent Liabilities: Due Within 0.ne Year 12,'497,083 3,640.30'3 16,137,386 15,685,979 Due in More Than One Year 1 12.,464, , ,933, , Total Liabilities ,716 43,090, ,704,991 1 '15,345,326 DEFERRED INFLOWS OF RESOURCES Deferred Inflows of Resources Related to Penslbns 6, , ,857,530 Tota 1 Deferred inflows of Besources. 6., , ,530 NET POSITION Net Investment in Capital Assets 114,158,085 40,8&5; :341,317 Restricted For: Recreation and Human s ervices 6,738,433 6,738,433 6,837,286 Nonexp~ndable PQrtion of Permanent Fu.nds 1,218',385 1,218,385 1,218,385 EXp~ ri(!ab le Ponioh of P~rmanent Funds 607,39'2 607, ,168 Education 2,437, ,538 5,664,246 Unrestricted {16,667,752) 8.596,578 (8,074,174) ~ , 019) Total,Net Position $ 108,492,081 $ 49-,482,243 $ 157,974,316 $ :0,383 The notes to the financial statements are an integral part of this statement B-40

113 Ci~ of Lewiston, Maine. StatemJJnt 2 Comparative Statement of Activities Fo r the Year Ended June 30, 2017 Progtam Revenues Net (Expense) Revenue anfl, Changes in Ne't Position Primary Government Total, Operating Capital Bus.lness- Charges For Grants and Grants and Governmental Type Restated Functions and Programs Expenses Services Contributions Contributions Activities Actilvlties '6 Primary Government Governmental Activities: General Govemrnent s 12,397,570 $ 2.406,346 s 2.902,887 s (7,088,337) s (7,088,337) $ (8, } Public Safety (17,647,686) '(17,647,686) ~'1 6,245,937 } Public Works ,8,95 938,092 $ 2, (13,018,013) (13,018,013) ( ,026) Human Services 1,562, ,040 (~21, 176) (821,176) (577,97.S) Culture & Recreation 2,35'8,Q9Q 196, , ~9;4 (2.090,648) (2,090,648) (1,747,97~) Education & Nutrition 81,408, ,011 60,516,009 (20,310,957) (20,31'0,957) (1 3,349,629) Interest orr Long-Term Debt t34224,201 ) (3.224,201} (3,082,226) TQtal Governmental ActMties ,231, (64,201,018) (64,201,018) (55,256,510) Buslne$s-Type Activities; Water 4;451, ,327 56,429 35,876 $. 1!, ,237' 1,070,159 Sewer 5, , : , , Storm Water 1,781,1.,89 2,614, , ,325 T!)tal Busi ness-type Ac1Mties 11,521,001 14,032, ,317 37,876 2,701,396. 2,701,396' 2,090,016 Total Primary Government $ 147,060,463 $ $ 64,383,547 $ 2,561,666 $ (64,W1,bt8) $ 2,701,396 $ (61, ) $ (53, 166,494) General Revenues: Property Taxe.s 52,167,890 52,167,890 52,205,919 Payment fn Lieu of T~xes 387, , ,341 Motor Vehicle Excise Taxes 4, ,91,2, ,032 Franchise T~es 134, , Grants and Contribufi.ons Not Restricted to Specific Prowams: Homestead Exemption & BETE Refrnbursement 2.820,60.9 2, Sta:te Revenµe SharTng 2,694, ~4,889 2,878,000.Unrestricted Investment Earnings 1.308,717 17,348 1,326, 06~ 509,622 Transfers (435,418) Total General Revenues and Transfers ,625 ( ) Change in Net Position 660,607 2,283,326 i.943,933 9,852,0.72 Net Position, July 1 107, ,198, ,030, ,178,312 Net Positlon, June 30 $ ,0&1 s ,243 '$ 157,974;316 $ 155,030,383 The notes to the financial statements are an integral part of this statement, B-41

114 City of Lewiston, Maine Statement3 Comparative Barance Sheet Governmental Funds June 30, 2017 ASSETS School Categorical Other Total Governmental Funds Grants Special Capital.Governmental General Revenue Fund Projects Funds Cash and Cash Equivalents $ 1,011,250 $ 710 $' 81.2,877 $ 2,187,&65 $ 4,012,701 $. 5,776,596 Investments 22,680, ,292,862 27,868,325 26,226,356 Receivables: Taxes 1,903,091 1,903,091 1,914.,902 Accounts (Net of Allowance for U11collectlbles) 542,216 23, , ,097 1,060,41.5 lntergovemmental 785, , , ,029 3,256,779 3,529,286 Loans (Net of Allowance '[or Uncollectibles) 1, ,024,194 3,755,668 3,741,037 lnterfund Receivable 7, ,796,450 5,699,412 Pr~paid Items 197,697 p1, ,011 Inventory 248, , ,266 Total Assets $ 36,897,091 $ 1,811,019 $ 2, $ 9,326.,641 $ 50,066,645 $ 48, UA91UllES, DEFERRED INFLOWS OF RESOURCES, AND FUNQ BALANCES Liabilities: Actm.ints Pay~ble $ 2', $ t73,992 $ 1,284,739 $ 45~,182 $ (108 $ 4,413,841 Accrued Wages and Taxe& Payable 7,366, ,7:67 7, ,200,131 lnterfund Payable , ,481 7, ,634,640 Unearned Revenue 705,422 16, , Customer's Deposits 4,55'3 4,553 2,594 Total Liabilities 10, ,1 64,191 8',191, , ,995,913 14,981,234 Deferred Inflows of Resources: Deferred Tax. Rev,e.nue ,734 1,708,734 1,693,298 Total Deferred Inflows of Resources 1, ,708,734 1,693,298 B-42

115 Fund Balances= Non spendable: Permanent Fund Principal Prepaid Expenditures Inventory Long-Term Notes Receivable Restricted for: School Education Permanent Fund Unexpended Income Nonmajor Special Revenue Funds Assigned to: Asset Acquisition. Future Workers Comp. Expenditures Future Unemployment Comp. Expenditures Compensated Absences Future General Fund Expenditures Nonmajor Special Revenue Funds Unassigned Total Fund Balances 1,218, ,697 61, ,261 82, ,500 1,480,086 1,790, , ,392 4,912,755 21,597 1,116,221 15,143 1,512,823 2,208, ,592 16,415,234 (6, 159,244) 24,310, ,827 (6, 159,244) 8,564,205 1,218,385 1,218, , , , ,266 2,264,586 2,460, 112 2,293,963 5,566, , ,168 4,912,755 4,863,498 21,597 21, ,221 1,093,207 15,143 10,153 1,512,823 1,435,767 2,208,019 1,805, , ,675 10,255,990 12,005,928 27,362,002 31,907,750 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 36,897,091 $ 1,811,019 $ 2,031,895 $ 9,326,641 Amounts reported for governmental activities in the statement of net position are different because= Deferred outflows of resources related to. pension Deferred inflows of resources related to pension Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the "funds.. Other long-term assets are not available to pay current period expenditures and, therefore, are deferred in the funds. Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported In the funds. 14, 183, ,325,971 (6, 786,428) (7,857,530) 197,439, ,.271,415 1,708,734 1,693,298 (125,415,252) (123,509,425) Net position of governmental activities $ 108,492,081 $ 107, The notes to the financial statements are an integral part of this statement. B-43

116 City of Lewiston, Maine Statement4 Comparative Statement of Revenues, Expenditures and Ch~nges in Fund Balance Gov ernmental Funds For the Year Ended J.une 30, 2017 REVENUES School Categorical Debt Other Total Governmental Funds Grants Special Service Capital Governmental General Revenue Fund Fund Projects Funds Taxes $ 57,735,755 $ 2,150,064 s 59,885,818 s 59,158,648 Licenses and Permits , Intergovernmental s ,802 s 1.986,849 J, , Cha1ges For Services 1.263, ,040 1,798,<166 2, Fine's 192, Interest, Rents and Royalties , Oona11ons 285, ,703 Mr.;cellaneous 376, , 141 ~.8Z2 ;?68,592 Total Revenues ,459 10, ,474,797 6, ,910 EXPENDITURES Current. General Government 3, , ,094,779 Public Safety Public Works Human Services 1, , ,084,462 Culture and Recreation 1,360, ,606 1,666,523 1, Intergovernmental 3,886,281 3,886,281 3, Education 67,344,SBe 7,668,072 75,012,758 69,172,690 Nutntion 3,719,712 3,719, ,121 Miscellaneous s , , Debt Service Redemption of Sena! Bonds 10, ,440,240 10,740,961 Interest on Serial Bonds ,293 Capital Lease Debi 181, , Capl!al Outlay ; ,596 11,520,968 7,970,583 Total Expenditures ,387, ,897 10,96.9, , ,273 Excess (Dellc1ency) of Revenues Over (Unoer) Expencfttures 11, ( ) (14.372,897) ( ) ( ) ( ) (1 45,363) OTHER FINANCING SOURCES (USES) Transfers In 732, ,568, , ,867 15,003, ,913 Transfers Out ( ,084) (55,255) (830,514) (359,915) (1 4, ) (15, 135,207) Issuance of Refunded Bonds 3,155,000 3,155, Premium from Bond Issuance 1,316,133 1,316, ,339 PaymMI 10 RefundeCI Bond Escrow Agent ( ) ( } (4.182,302) Issuance of General Obligation Bonds {125.(XlO) , Total Other F11iancing Source (Uses) (12.589,964) (55,25~ 14,372, , , , Net Change In Fund Balances (1,016,254) ( ) 0 (2,656,662) ( ) Fund Balance, July ,460 1, !J.502,582) 8.480,836 31,907,752 27,928,370 Fund Balance, June 30 $ ,206 s 640,827 $ 0 s!6, 159,244) s 8.564,205 s ,002 s 31, The notes to!he financial statements are an integral part of this statement B-44

117 City of Lewiston, Maine Statement 5 ReconciHafion of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental funds to the Statement of Activities For the Year Ended J~ne 30, 2017 Net Change in Fund Balances - Total GovernrnentaJ Funds.Reported on Statement 4 $ (4.545,750) Amounts reported for governmental activities in the statement of activities (Statement 2) are different because: Governmental funds report capital outlays as expendlt_ures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlays of $11,081, 723 was reduced.by depreciation expense of $8, The net effect o.f the disposition of capital assets which resulted in a loss that decreased net pos\tion. Disposed a.ssets were hlstorically valued at $ , with accumulated depreciation of $2,262,606. Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt cons1jmes the current financial resources of governmental funds. Neither transaction, however. has any effect on the net position. Ttils amount is the net effect of these differences in the treatment of long-term debt. Some expenses reported in the statement of activities dq not require the use of current financial resources and. therefore 1 are not reported as expenditures in governmental funds. 2,390,053 ( ) 15,439 4,169,364 l1,146,950) Change.in net position of governmental activities (see Statement2) $ 660,607 The notes to the financial statements are an integral part of this statement, B-45

118 City of Lewiston, Maine Statement 6 Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - Budgetary Basis General Fund For the Year Ended June 30, 2017 REVENUES Taxes: Budgeted Amounts Variance With Original & Final & Actual & Final Budget Year End Positive Encumbrances Encumbrances Encumbrances (Negative) Real Estate $ 52, $ 52,957,348 $ 52,822,996 $ (134,352) Excise 4.066,000 4,066,000 4,912, ,759 Licenses and Pennits 351, , ,101 55,860 Intergovernmental 51,075,676 51,075,676 50, (390,141) Charges For Services 1.205,668 1,205,668 1,263, Fines 173, , , Interest, Rents and Royalties 1,606,087 1,606,087 1, ,658 Miscellaneous 267, , , ,096 Total Revenues 111,703, ,703, ,324, ,055 EXPENDITURES Current General Government: Mayor and City Council 29,340 31,899 31, City Administrator , ,878 (31 1) City Attorney 92,000 92,000 93,80'1 (1,801) City Clerk ,902. Human Resources 134, ,232 2,093 Finance and Administration 1.431,938 1, ,507 Buildings and Parking Facilities 758, , ,91 4 Total General Government 3,126,227 3,787,679 3, Public Safety: Po.lice 5,775, ,490, Fire 6,024, ,451 94,931 Inspection 458, , Total Public Safety 12,257,975 14, Public Works: AdmlnistratiC)n 146, , ,298 2,638 Engineering 171, , ,180 15,373 Maintenance and Sanitation 6,594,444 7,504,505 7,193, ,533 Total Public Works 6,912,577 7,881,994 7,553, ,544 Human Services 1,015,431 1,103,891 1,078,643 25,248 Recreation 404, , ,908 (23,1 47) Library 1,009,393 1, ,070,987 29,143 lntergovernmen1al ,089,448 4,089, Education 63,773, ,218 63, ,536 B-46

119 City of Lewiston, Maine Statement 6, Continued Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - Budgetary Basis General Fund For the Year Ended June 30, 2017 Miscellaneous: Budgeted Amounts Original & Final & Actual & Year End Encumbrances Encumbrances Encumbrances 0 Insurances 4,787,844 4, ,487,654 Pensions and Retirement 2,959,613 1,760, 176 1,227,252 Reserves and Contingencies 223,000 96,207 (30,709) Other Miscellaneous 435, ,427 1,638,981 Total Miscellaneous 8,406,255 7,123,654 7,323,17.8 Total Expenditures 100,874, ,785, ,920,763 Variance With Final Budget - Positive (Negative) , ,916 (1, 149,554) (199,525) 864,285 Excess of Revenues Over Expenditures 10,828,216 7,918,057 9,403,397 1,485,340 OTHER FINANCING SOURCES (USES) Transfers In 384, ,120 Transfers Out (13,332,266) (13,332,266) (13,322,084) Total Other Financing Sources and Uses (12.947,670) (12, ) (12,589,964) 347,523 10, ,706 Net Change in Fund Balance - Budgetary Basis (2,119,454) (5,029,613) (3,186,567) 1.843,045 Add Back Encumbrances 1,877,656 1,877,655 2,170, ,659 Net Change in Fund Balance - GAAP Basis (241,799) (3, 151,958) (1,016,254) 2.135,704 Fund Balance, July 1, 25,326,460 25,326,460 25,326,460 Fund Balance, June 30 $ 25,084,661 $ 22,174,502 $ 24,310,206 $ 2,135,704 The notes to the financial statemenls are an integral part of I.his statement. B-47

120 City of Lewiston, Maine Statement 7 Comparative Statement of Net Position Proprietary Funds June 30, 2017 Business-Type Activities - Enterprise Funds Water Sewer StonnWater Total Enterprise Enterprise Enterprise Fund Fund Fund ASSETS Current Assets; Cash and Cash Equivalents $ $ 306,232 $ 416,678 $ 863,181 Investments 108, , ,989 1,6li6,097 Restricted Cash - Customer Deposits $ l , lnterfund Reeefvable 163, ,513 Accounts Receivable (Net of Allowance for Uncollectibles) 1,054, ,132 2.:523, ,455 Total Current Assets 1,286, ,165,854 3, ,526,on Noncurrent Assets: Other Assets: Intangible Assets (Net of Am9rtizatfon) 34, , ,406 1,220,527 1,259,626 Investment in Joint Ventures 2.729, ,395 5, ,602,870 Total Other Assets ,289.3,789, ,713 a, Capital Assets; Land 71, ,023 1,.294, ,710 Buildings 6,546,294 4,555,66'5 11, 101.9'59 10,765,114 I ritrastruoture ,802 26,300,447 12,346, ;137, ,806 Machinery and Equipment 1.499,997 f,313, ,542 3,073,651 2,828,970 Less. Accumulated Oeprec~ation (16,358,068) (10,023,565) ( ) (27,603,515} (26,366, 75~ ) Construci1on ln Progress 371, , 161 2, Total Net Capital Assets 44,622,049 24,833,595 12,370,509 81,:826,153 n, Total Noncurrent Assets ,338 28,622,613 12,792,915 88,801,866 84,226,917 Total Assets $ ,712 $ 30,104,548 $ 13,958,769 $ ,029 $ ,994 The notes to!he financial statements are an integral part of this statement B-48

121 City of Lewiston, Maine Statement 7, Continued Comparative Statement of Net Position Pro.prietary Funds June 30, 2017 Business-Type Activities - Enterpri~e Funcls LIABILITIES Current Liabilities: Water Sewer Storm Water Total Enterprise Enterprise Enterprise Fund Fund Fund Net Revenue Bonds Payable - Current s $ 1, $ $ 3.623,606 s 3, Accounts Payable.316, , , ,749 Accrued Wages and Taxes Payable 24,396 1'8,517 12,793 55,706 46,470 Compensated Absences Payable - Current ,980 Accrued Interest Payable 132, ,200 76, , ,042 lnterfuhd Payable 163, ,513 2,064,772 Customer Deposits Payable , Total Current ltab1hties 2,205, , , ,617 Noncurrent Liab11it1es: Compensated Absences Payable Net Revenue Bonds Payable 17,089,019 12,350,81 0 7,877,053 37,316,882 35,268,219 Total Noncurrenl Ltabllitles 17, 194,3!.)2 12,397, ,053 37, ,460 Total l1abilit1es 19,399,714 14;8~ ,963,486 43, ,654,0TI NET POSfTION Net lnvestmeht in Capital Assets , , , Unrestricted 3, , , Total Net Position $ 29, $ $ $ $ 47, 198,917 B-49

122 City of Lewiston, Maine Statement 8 Comparative Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds For the Fiscal Year Ended June 30, 2017 Business-Type Activities - Enterprise Funds OPERA TING REVENUES Water Sewer Storm Water Total Enterprise Enterprise Enterprise Fund Fund Fund Charges for Services $ 5,448,327 $ 5,969,042 $ 2,614,835 $ 14,032,204 $ 13,057,497 Total Operating Revenues 5,448,327 5,969,042 2,614,835 14,032, OPERA TING EXPENSES Cost of Sales and Services 1 ;887,868 3,475, ,706 6, 192,081 5,945,587 Administration 839, , ,933 1,849,021 1,837,398 Depreciation 1.252, , ,946 2,173,842 2,130,995 Total Operating Expenses 3,979,637 4,793,722 1, ,214,944 9,913,980 Operating Income 1,468,690 1,175,320 1,173,250 3,817,260 3,143,517 NONOPERATING REVENUES (EXPENSES} Interest Revenues 4, ,348 42,981 Increase in Fund Equity of Joint Ventures 56,429 95, , ,142 Interest Expense (469,043) {375,491) (239,674) (1,084,208) (1,033,864) Gain (Loss) on Sale of Capital Assets ,085 Amortization of Deferred Charges (13,800) (113,204) {99,930) (226,934) (169,858) Total Nonoperating Revenue (Expenses) (421,329) (387,869) (327, 194) (1,136,392) (1,038,599) Income Before Contributions & Transfers 1,047, , , ,868 2, Transfers Out (25.645) (42,506) (367,267) (435,418} (456,706) Capital Contributions 35,876 2,000 37,876 28,079 Change in Net Position 1,057, , ,789 2,283, ,291 Total Net Position. July 1 28,215,406 14,469,017 4,514,494 47,198,917 45,522,626 Total Net Position. June 30 $ 29,272,998 $ 15, $ 4, $ 49,482,243 $ 47,198,917 The notes to the financial statements are an integral part of this statement. B-50

123 City of Lewiston, Maine St.atemenJ 9 Comparative Statement of Cash Flows - Proprietary Funds For the Fiscal Vear Ended June 30, 2017 Business-Type Activities - Enterprise Funds CA.SH FLOWS FROM OPERATING ACTIVITIES Cash Received From Customers Cash Paid to Suppliers for Goods end Services Cash Paid to Employees for Services Net Cash Provided by Operatlng Actlvlues CASH FLOWS FflOM. NONCAPITAL FINANCING ACTlVITIES Transfers to Olher Funds Net Cash {Used For) Noncapttal Flnancing ActiVities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds From Sale of Revenue Bonds. Proceeds Advance from (Repayment 10) General Fund Acquisition and Constructipri of Capl1ai Assets PrlnclpaJ Paic:I on Revenue Bonds Interest Paid on Revenue Bonds Cosr of Issuing gevenue Bonds Capital Contributions Net Cash {Used For) Capital & Relaled Financing Activities CASH FtOWS FROM INVESTING ACTIVITIES Interest Earned on Investments Net Cash Provtded By Investing Activities Water Entorprlse Fund Sewer Enter.prise Fund s 5,570,2.32 $ 5.820,654 $ (1,n2.508) (2,812,614) ( ) (25.645} (25.645) 2,694,498 (2.064, 772) (1,996,306) (1.586,264) (485,092) (17,081) 35,876 ( ) ( ) (42,506) (42.506) 2,264,601 ( )! } (376,629} (14.355) ( ) Storm Water Enterprise Fund 2, s (970,813) (384,747) 1,286,54.2 (367,267) ( ) ( ) ( ) (247,076) (4,785) ( ) 12, Total ,032,988 s ,051 (5,555,935) (5,469,576) ( ) (2,263.8'16) 6,319, (435,418) ( ) (2.064,772) ( } ( ) (1, ) ('36.221) (7, ) (456,706) ( ) 1.457, ,772 {6.188,800) ( ) ( ) (21.081) (7, ) Net lnorease/(decrease) in Cash and Cash Equivalents ( ) ( } ( ) (1, ) ( ) Cash and Cash Equivalents, July 1 972, , , Ca$h and Cash Equl.valenls. June 30 s s s s s Cash and Cash Equivalents Investments Restricted Cash Tola! Cash and Cash Equivalents s 110, , ,960 $ 371, ,806 $ 306, ,741, 1, $ 416, , ,181 1,656, , ,344,, $ 2.958,62.2 i,;.;~~; o10j,;..;u-;;9 In~ 't; N;.t ~h" i>;~ 'BY op."";.ti';9 A"ctMt;; j Operating income $ S U75,320 S $ 3,817,260 s 3,143,617 j j MJustments to Real'lCile Operating Income to Net j C8stl Prollided By Operating ~lvitles: Depredation and Amortization Chariges. in Assets and Llabllifles: (Increase) Deaease ln Accounts Receivable (lnctease) Decrease in Inventory 1,252, , (96,611) Increase (Decrease) rn Customer Oeposlls Increase (Decrease) In Accounts Payable Increase {Decrease) in Accrued Payroll 956 (1'36;231) (51,777,) 462,297 1,729 7,806 (3,634) 4,2.26 (43,015) 322,432 9,237 lnaease (Decrease) ln lnterfund 163,51'3 (163,5'13) lnaease (Oeaease) rn I Comperisaled Absence~Payable (5.328) (3,993) 1_3~,43_1_j Total Adjustments , , ! Net Cash ProYided By Operating Activities $ 2. 76'4.568 $ 2, S ~2 S $ 5, f 19,461 2, ,800 I 2.130,995 i ( 120,226)!. 29,095! I i (53,764)j. I I ~ ~------~- --M ~ The notes 10 \he financial statements are an Integral part of this statement B-51

124 City of Lewiston, Maine Statement 10 Comparative Statement of Fiduciary Net Position Fiduciary Funds June 30, 2017 Private Purpose Trust Funds Agency Funds ASSETS Cash and Cash Equivalents $ Investments $ $ 134,873 Accounts Receivable 9 Total Assets $ 122,463 $ 134,883 $ $ $ 715,290 LIABILITIES Accounts Payable $ 118 $ Accrued Payroll School Activities Payable Lewiston Senior Citizens Payable Franklin Pasture Payable Holiday Parade Committee Payable SSI Client Payable Total Liabilities 118 $ 104 $ , , , , ,162 $ 715,290 NET POSITION Held in trust for scholarships and other purposes $ 122,345 $ 134,883 The notes to the financial statements are an integral part of this statement. B-52

125 City of Lewiston, Maine Statement 11 Comparative Stat~ment of Changes in Fiduciary Net Posit1on Fiduciary Funds For the Fiscal Year Ended June 30, 2017 Private Purpose Trust Funds ADDITIONS Investment Eamings Total Additions 2017 $ , $ DEDUCTIONS Medical Disbursements SchoJarship Awards. Total Deductions , ,4~ Change, in Net Pesition (,12,537) (,2,396)' Net Position - Beginning 134, ,27.9 Net Position _, Ending $ 122,345, 134,883 The_ notes to the financial statements are -an integral part of this statement. B-53

126 CITY OF LEWISTON, MAINE NOTES TO THE FINANCIAL STATEMENTS June 30, The ~nanc1al statements of the City of Lewiston have been prepared tn conformity with accounting pnnclples generally accepted in the United States as applied to government units. The Governmental Accounting Standards Board (GASS) is the accepted' standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the Cfty's accounting policies are described below I. SUMMARY OF SIGNIFLCANT ACCOUNTING POLl.CIES A. Reporting Entity The City of Lewiston is a munielpal corporation governed b,y an elected may.or and a seven-member council. In evaluating how to define the reporting entity for financial reporting purposes. management has considered all potential component units. T he decision to include a potential component unit was made by applying the criteria set forth by accounting principles generally accepted in the United States. The criterion used defines the repo(ting entity as the primary government and those component units for which the primary government is financially accountable. Financial accountability is defined as the appointment o( a voting. majority of the component unit's board and either a) the ability to impos~ wlll by ~he primary government, or b) the possibility that the component unit will provide a financial benefit to or impose a financial burden on the primary government. Appttcation of this criterion and determination of the type of presentation involves considering whether the activity benefits the government andlor its citizens. or whether the activity is conducted within the geographic boundaries of the government and is generally available to its citizens. As required by accounting principles generally accepted in the.united States, these financial statements present the City with one blended component unit. an entity for which the City is considered to be financially accountable. Blended component units, although legally separate entities. are in substance, part of the City's operations and so data from lhese units are combined with data of the City Blended Component Unit The Lewiston Mill Redevelopment Corporation (lmrc) was incorporated as a nonprofit entity on November 18, 1992, to act on behalf of the City Council in the management of the tax acquired former Bates Mill Compfex. In fiscal year 2005, the LMRC sold a portion of the complex to a local developer for further rehabilitation and economic development The upcoming charge of the Board rs now to engage in activities to support redevelopment or demolition of the Bates Mill Building #5 and manage the boiler plant that services the rnajorttyi of the mill complex. The LMRC operates under a fourmember Board of Directors comprised df rhe Mayor of the City of Lewiston; the. City Administrator; the City Economic & Community Development Director. and the City Flnance Director. The LMRC is included in the City's financial statements as a nonmajor governmental special revenue fund because, although the entity is legally separate fmm the City, it only acts as a managing agent on behalf of th e City. As such, it is essentially an extension of the City government FinQncial statements for the LMRC can be obtained from the City of Lewiston's Finance Department, 27 Pine Street, Lewiston, Malne B. Government-Wide and Fund Financial Statements The government-wide financial $tatements, which encompass the Statement of Net Position artd the Statement of ActtvitjeS, report financial information on.the City of Lewiston's nonfiduciary activities. The effect of significant interfund activity has been removed from these statements. Governmental Activities. which normally are supported by taxes and inter.governmental revenues. are reported separately from Business-Type Activities. which rely to a significant extent on user fees and charges for service for support. The Statement of Activities demonstrates the degree to wh;ch the direct expenses of a given function or segment, are offset by program revenues. Direct expenses are those that are cleady identifiable with a specific function or segment. Program revenues include 1 ) Charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2,) Grants and contributions that are restricted to meeting the operational or capital B-54

127 requirernents of the respective function or segment. Taxes and other Items not directly applicable to one function 0r segment are reported as general revenues The City of Lewiston has provided separate financial statements for governmental funds. pmpnetary funds, and fiduciary funds, even though fiduciary funds are not included in the government-wide financial statements. Individual governmental and enterprise funds that quahfy as a major fund are reported as separate cojumns. Individual funds deemed to be nonmajor are condehsed to one columh OF! the fund financial statements. C. Measurement Focus, Basis of Accounting and Presentation The government-wide financial statements are reported using the economic resources measur-ement focus and the accrual basis of i?ccounting, as are the proprietary and fiduciary fund statements. Under this basis, revenues are recorded when earned and expenses are recorded when a liability ts incurred regardless of the flow of cash. Property taxes are recognized as revenues 1n the year for which they are levied. Grants and similar Items are recognized as revenues at the completion of all imposed eligibility requirements. The modified accrual basis of accounting and the current financial resources measurement focus Is used by all governmen!al fund types Under the modified accrual basis of accounting_. re.venues are recognized only when they becomes available. "Available" means collectible within the current period or soon enough thereafter to be used to pay lrabilities of the current period The government considers property taxes as available if they are collected within 60 days after year end. A six month or less availabillty period is used for revenue recognition for all other governmental fund revenues. Expenditures are recorded when the rejated fund litibility is incurred. Principal and interest on general long-term debt, as well as expenditures deriving from long-term compensated absences, cla1ms, and judgments are recorded as funa liabilities when due or when amounts have been accumulated for payments to be made eafly in the following year Property taxes, licenses, and governmental reimbutsements are considered ta be susceptible to acert.jal ana so nave been recognized as revenues In the current fiscal year All other revenue items are conslderea to be measurabfe and available only when cash is received by the government. The City of Lewiston reports the following major governmental funds: General Fund - is used to account for resources traditionally associated with the general operation of the government, which are not legally required or by sound financfal rrtanagement to be accounted for in another fund. School Categorical Grants Special Revenue Fund - reports the activity of various federal and state educational grants for special programs administered by the Lewiston scnool department. Debt Service Fund - records the accumulation of governmental resources 'to fund capital leases and general obligation bond principal and interest payments, Capital Protects - a consolidated fund to account for the acquisition of municipal capital assets, or the construction of capital projects and infrastructure funded through general obllgat1on bonds financed by governmental funds. The City of Lewiston discloses the following ma1or proprietary funds: Water Enterprise Fund - reports the operating and construction activity of the water system for ttie City of Lewiston. This fund also provides half of the operating and land acquisition costs associated with the Lake Auburn Watershed Protection Commission. Sewer Enterprise Fund - accounts. for the operation of the sanitary sewer system in Lewiston and payment of Lewiston's share of the costs of waste water treatment provided by the Lewiston-Auburn Water Pollution Control Authority. B-55

128 Storm Water Enterprise Fvnd -this fund was created to provide funding for federal storm watef mandates and operations. User fees are derived from the amount of impervious surface owned by the customer that creates storm wat~r run-off. Add1t1onally. the City of Lewiston reports the fdltowing Fiduciary Fund Types: Private Purpose Trust Funds - funds used to report the activity for bequests left for charitable payments and scholarship awards. These assets are held by the City In a trustee capacity. Whereby the original bequest is preserved as nonexpendable and the accumulated interest earnings are available to provide for educational awards and basic necessities for inpigent individvals. Agencv Funds - account for assets held by the City as an agent for mdividuals. private organiz.ations. other governments and/or funds. The City of Lewiston serves as an agent for; various school activity accounts. private fundfng for the downtown holiday parade and celebration, the Franklin Pasture Sports Complex, the local senior citizens group, and the Social Security pass thro1.1gh client program. Fiducjary Funds use an economic resources measurement focus, with the exception of Agency Funds which have no measurement focus. As a general rule, the C ity has elimlnated the effect of mterfund activity from the entity-wide financial statements, with the exception of the water and sewer charges, and other governmental functions between the proprietary and g.overnmental funds Elimination of these charges would distort the direct costs and program revenues reported for the various functions involved Amounts reported as program revenues include: 1) charges to customers or applicants for goods. services, or privileges provided, 2) operating grants and contributions. and 3) capital grants and contributions Internally dedicated resources are reported as general revenues rather than as program revenues Likewise, general revenues includeaji faxes Proprialary Funds distinguish operating revenues and expenses from nonoperating activity. Operating revenues arise from providing goods or services to outside parties for a fee The intent of the governing body is that the operating costs, including administration and depreclatlon. of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred. and net Income ts appropriate for capital maintenance. publlc pollcy, management control, accountability. or other purposes. Revenues and expenses that are not derived directly from operations are reported as nonoperating revenues and expenses. O. Assets, Deferred Outflows of Resources, Liabi1Jties 1 Deferred Inflows of Resources., and Net Position or Equity 1. Cash and Investments Gash Includes amounts in demand deposits and certificates of deposit with original maturities of less than three montns The City primarily invests in money market accounts. The City does not participate in any external Investment pools, The investments are. reported at their fair value on the oalance sheet. For Statement of Cash Flow purposes. the City considers cash and cash equivalents to be demand deposits, certlffcates of deposit with maturities of less than lhree months and money market mutual funds. 2. Receivables and Payables During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. These receivables and payables a(e classified as h(nterfund Receivable" or "lntertund Payable" on the balance sheet for current activities and "advances to/from other funds" for noncurrent activiti~. Outstanding interfund balances. if any, between g_overnrnentat activities and business-type activ1cies are reported in the statement of net position as ''internal balances". Ali trade, property tax and loan receivables, where applicable, are shown net of an allowance for uncollectible accounts. B-56

129 3. Inventories Inventories are valued at cost in the School Categorical Grants Special Revenue Fund and at a weighted average cost method in the General Fund. The costs of inventory items are recognized as expenditures when purchased in the governmental funds, except for the School Categorical Special Revenue Fund and the Highway Department of the General Fund, where inventory items are recorded as expenditures when used. The business-type activities-enterprise Funds utilize a just'-in-time inventory system whereby inventory is delivered when needed and items are recognized as expenses when used. Therefore, no inventory is held for these funds. 4. Restricted Assets Deposits placed on customer accounts for the enterprise funds are classified as restricted assets on the balance sheet due to their limited use. It is the City's policy to require an account deposit for all new service users. This deposit, with applicable interest, is restricted from general operating use in order to preserve monies to refund the customer after remaining in good standing for one year. If favorable credit standing is jeopardized within a year, the deposit proceeds are applied to delinquent balances. 5. Capital Assets Capital assets, which include land. buildings, capital improvements, equipment. and infrastru_cture. are reported in the applicable governmental or business-type activities columns in the statement of net position financial statement. Assets are capitalized if their total cost exceeds $5,000 and their useful life extends beyond one year. Capital assets are recorded at historical costs or estimated historical costs if constructed. Donated capital assets, donated works of art, and similar items are recorded at acquisition value at the time received. The costs of normal maintenance and repairs that do not add value to the asset or materially extend asset lives are, also, not capitalized. Capital assets of the City of Lewiston are depreciated using the straight line method over the following estimated useful lives: Buildings Improvements OtherThan Buildings Infrastructure Equipment Vehicles Intangible Assets 50 years years years 3-15 years 5-10 years 10 years 6. Compensated Absences Under terms of union contracts and employment agreements. City employees are granted vacation and sick leave in varying amounts. City employees. including teachers. may accumulate up to 180 days of unused sick leave. Teachers are reimbursed for up to 50 days of accumulated sick leave upon retirement; all other City employees are reimbursed for up to 90 days of accumulated sick leave upon retirement. Employees, with the exception of teachers. may accumulate up to 40 vacation days and are entitled to full payment upon termination. Matured accumulated vacation and sick leave are reported as a liability in the governmental funds. All other vacation accumulations are accrued when incurred in the government-wide and proprietary fund financial statements. A liability is created for amounts of accumulated sick leave that are not matured. yet qualified employees are entitled to these benefits upon separation or retirement. Noncurrent, vested sick balances are reported as a liability in the statement of net position for governmental and business-type activities, but typically liquidated by the General Fund. B-57

130 7. Long-Term Obligations In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. In the fund financial statements, governmental fund types recognized long-term obligations as a liability when due. or when resources have been accumulated in the debt service fund for payment early in the following year. For other long-term obligations. only that portion expected to be financed from expendable available financial resources is reported as a fund liabmty of a governmental fund. The individual fund that incurred the original long-term debt obligation will provide the financial resources to liquidate the liability. The General Fund has the primary funding role in the liquidation of the net pension and other postemployment benefit obligations. and the liability for compensated absences. The City implemented GASS Statement No. 65, "Items Previously Reported as Assets and Liabilities"; as a result, bond issuance costs are recognized and expensed in the current pertod for both governmental and proprietary funds. 8. Deferred Outflows and Inflows of Resources In addition to assets and liabilities, the Statement of Net Position and the Governmental Fund Balance Sheet will sometimes report a separate section for deferred outflows and ihflows of resources. Deferred outflows of resources represent the future reporting of the consumption of the government's net position. Conversely. deferred inflows of resources will increase net position in a future period. The City of Lewiston has a deferred inflow on its Governmental Fund Balance Sheet. which arises under the modified accrual basis of accounting that qualifies for report.ing in this category. Deferred tax revenue of $1, is deferred and recognized as an inflow of resources in the period that the amounts become available. The City recorded a deferred outflow related to the net pension liability, which include the City's contributions subsequent to the measurement date. which is recognized as a reduction of the net pension liability in the subsequent year. The differences between expected and actual experience, and changes in the proportion and differences between City contributions and the proportionate share of contributions, which are deferred and amortized over the average, expected remaining service lives of active and inactive members in the plan. The separate financial statement element. deferred inflows of resources, represents an acquisition of net pension that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The deferred inflow relates to the net pension liability, which includes the net difference between the projected and the actual investment earnings on the pension plan investments. which is deferred and amortized over a five year period. 9. Fund Equity In the fund financial statements, governmental fund balance is presented in five possible categories: Nonspendable - resources which cannot be spent because they are either a) not in spendable form or; b) legally or contractually required to be maintained intact. Restricted - resources with constraints placed on the use of resources are either a) externally imposed by creditors (such as through debt covenants), granters, contributors. or laws or regulations of other governments; orb) imposed by law through constitutional prov;isions or enabling legislation. Some of the City's Nonmajor Special Revenue Funds include Federal and State grants which require fund balance to be restricted for those purposes. Committed - resources which are subject to limitations the government imposes upon itself at its highest level of decision making, for Lewiston, it's through City Council order, and that remains binding unless removed in the same manner. Assigned - resources neither restricted nor committed for which a government has a stated intended use as established by the City Council or a body or official to which the City Council B-58

131 has delegated the authority to assign amounts for specific purposes. The City Council has delegated through its Fund Balance Policy, this authority to the City Administrator and the Finance Director. The City Council has assigned the Lewiston Mill Redevelopment Corp. and the Recreation Activity Nonmajor Special Revenue Funds' fund balance to be retained for those purposes. Unassigned - resources which cannot be properly classified in one of the other tour categories. The General Fund should be the only fund that reports a positive unassigned fund balance. Although not a formal policy, when both restricted and unrestricted resources are available for use, it is the City's intent to use restricted resources first, then unrestricted resources as they are needed. When commitled, assigned and unassigned resources are available for use, it is the City's intent to use committed or assigned resources first, and then unassigned resources as they are needed. 10. Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Maine Public Employees Retirement System Participating Local District (PLO) Consolidated Plan and State Employee and Teacher (SET) Plan, and additions to/deductions from the PLO Consolidated and SET Plans' fiduciary net position have been determined on the same basis as they are reported by the PLO Consolidated and SET Plans. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordarice with the benefit terms. Investments are reported at fair value where applicable. 11. Comparative Data and Reclassifications Selected comparative total data for the prior year have been presented throughout this financial report in order to provide an understanding of the changes in the financial position and operations of these funds. Additionally, certain amounts presented in the prior year data may have been reclassified in order to be consistent with the current year's presentation. 12. Implementation of New Accounting Standards GASB has several new accounting standards that take effect this fiscal year. These new standards include: Statement No. 73, '' Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68'': Statement No. 74, ''Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans"; Statement No. 80, "Blending Requirements for Certain Component Units"; Statement No. 81, "Irrevocable Split-Interest Agreements"; and Statement No. 82, ''P.ension Issues". Management has determined that these statements are either not applicable to the City of Lewiston or the impact of the statements are not material to the financial statements. The City has incorporated the additional disclosures required with the Implementation of GASB Statement No. 77, '' Tax Abatement Disclosures" as it pertains to our Tax Increment Financing rnstricts found in footnote V. - Other Information. II. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS A. Explanation of certain differences between the Governmental Fund Balance Sheet and the Government-wide Statement of Net Position The Governmental Fund Balance Sheet includes a reconciliation between total governmental fund balance and governmental activities net position as reported in the Government-wide Statement of Net Position. One element of that reconciliation explains that long-term liabilities. including bonds payable, are not due and payable in the current period and, therefore are not reported in the funds. The components of this $125,415,252 difference are as follows: B-59

132 Bonds Payable Bond Premium Accrued Interest Payable Obligation for Workers Compensation Claims Compensated Absences Payable - Sick OPES UAAL MEPERS Net Pension liability Compensated Absences Payable - Vacation Ca-pital Lease Payable Landfill Closure and Post ~Closure care Costs Net adjustment to reduce total governmental fund balances to arrive at go.vernmental activities net position $ $ 84,805.,145 3,426, ,511 4, ,162,614 1,643,729 22,847,919 2,087, ,238 3, ,~15,252 B, Explanatron of certain differences between the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balance and the Government-wide Statement of Activities Statement 5 provides a reconciliation of tlie Statement of Revenues, Expenditures. and Changes in Fund Balances of Governmental Funds to the Statement of Activities. One element of that reconciliation explains that "the issuance of long-term debt provides current finan.clal resources to gov.ernmental funds. while the repayment of the principal of long-term debt uses current financial resources.of governr;iental funds." Neither transaction, however, has any effect on the net position. The detail.s of this $4, difference are as follows: Debt l.ssued: Issuance of General Obligation Bonds Refunding Principal Adjustment Prlncipal Repayments: General Obligation Deb.t Capital Lease Payments $ (6,558,553) 125, , Net adjustment to increa.se net changes in fund balances - total governmental funds to arrive at changes in net position of governm~nta1 activities $ 4,'.169,364 Another cor:nponent of the reconc;iliatl.on states that "Some expenses reported in the Statement of Activities do not rectulre the use of current financial resources and, 1herefore, are not reported as expenditures in governmen.tal funds." The elements that comprise the $1, 146,950 reconciling item are noted below B-60

133 Accrued lnterest.adjtjstment Workers Compensation Claims Bond Premium OPEB.UAAL Compensated ft\bsences - Sick Compensated Absences - Vacation Landfill Closure & Postclosure: Care MainePERS IUUAL MEPERS Pension Liability Net adjustment to increase net changes in fund balances - total governmental funds te arrive: at.changes in net position of governmental acti.vities $ (36, 147) (501,142.) (1,114,167) (22.885) 503,757 ( ) (47,047) 1,320,753 (9.08,401) $ il, ) llt. STEWAROSHI~, COMPLIANCE AND ACCOUNTABILITY A. Budgets Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States with the exception that encumbrances are treated as expenditures for budgetary purposes, Budgets for the General Fund, Enterprise Funds and Community Development Block Grant (CDBG) Special Revenue Fund are formally adopted eacti year through the passage of an appropriation resolve.. Other Special Revenue Funds and all Capital Projects Funds have adopted project-1,ength budgets. Unencumbered appropriations lapse. at fiscal year end. Encumbrances represent commitments related to unperformed contracts for goods.or services. Erieumbrance accounting, under whrcti purchase orders, c0ntracts and other commitments for the expenditure of resources are recorded to reserve that portion. of the applicable appropriation, is utilized in governmental funds. Encumbrances outstanding at year end are reported as assigned fund balance and do no't constitute expenditures or liabilitfes because goads and services have not been received in the aurren'tyear. However, for budgetary purposes, encumbrances are treated as expenditures_ Each year, on dr before April 1. the City Administrator s.ubr,nits to the City Council a budget for the ensuing fiscal year along with an accompanying message. The Administrator's message explains the buoget both in fiscal terms and. ln terms of work programs. It outlines the proposed. financial policies. of the City for the.comin.g fiscal year; describes the Important features of the budget; indicates any major changes from the current year's financial policies, expenditures. and revenues, together with the reasons for such changes; summarizes the City's debt position: and includes such other materials as the Administrator deems oesfrable. It also describes the tax impact of the proposed budget. The budget is prepared ustng accounting principles generally accepted in the United States with the exception that enc\jmbrances are treated as expenditures for budgetary purposes and the on-behalf ppyments by the State. of Maine for the teacher 1 s retirement plan are not budgeted_ It provides a complete financial plan of the City's General and Enterprise Funds for the ehsu1ng fiscal year. It begins with a general summary of its contents and shows: in detail, all estimated Income, indicating the proposed property tax levy affecting the general fund, and all proposed expendltures, including debt service, for the ehsuing fiscal year, arranged to show comparative figures for actual and estimated income and expe'nditur.es to tne preceding fiscal year. It indlcates in separate sections: (a) Proposed expenditures for current operations curing the ensuing fiscal year, deta~ed by department in terms of 'their respective work programs, and methods of financing -such expenditures; (b) Proposed capital expenditures during the ensuing fiscal yeat 1 detailed by department. and proposed method of financing such capital expend iturns: B-61

134 (c) Anticip<;ited net surplus or deficit for the ensuing fiscal year of each utllity owned or operated by the City and the proposed method of its disposition; and (d) ComparaHve statements reflecting actual expenditures for the current year and estimated expenditures for the next succeeding fiscal year. The Administrator makes allotments to various City departments in accordance with needs. No e~penditures may be made or obligation incurred without his certification. The level of budgetary control is at the department level for the General Fund and Water, Sewer and Storm Water Enterprise Funds and at the federal program level for the CDBG Special Revenue Fund. The federal prngram level is established by HUD for program categories serviced by COBG funds. Within each of these categories, the City of Lewiston outlines projects to be completed to satisfy HUD's national objectives. At any time during the fiscal year. the Admini~trator may transfer part or all of any unencumbered appropriation balance among programs within a department. Also. upon written request by the Admi nistrator. the City Council may, by resolution. transfer part or all of any unencumbered balance to another department. If, during 'the fiscal year. the Administrator certifies that there are revenues in excess of the total estimated budget. the Council may make, after a public hearing. supplemental resolutions uf!! to the amount of the excess revenues. Also, to meet a public emergency, the Col..lncil may make emergency appropriations by resolution. During the fiscal year ended June 30, 2017, there were two general fund supplemental appropriations totaling $2,910,159. The City Council authorized the supplemental appropriation to purchase various one time capital rtems and/or repairs, and replace a fire pumper that was damaged in an accident. Every budgetary account lapses at the dose of the fiscal year to the extent that it has not been expended or encumbered. Encumbered appropriations are carried forward into the following year's budget. Copies of the budget, as adopted, are public records and are made available for inspection by the public at designated places and on the City's website. B~ Budgetary Basis vs. GAAP Basis The City's budget is r"0ported on a modified accrual basis, except that current year encumbrances are treated as expenditures for budgetary purposes. For financiaj reportfng on ~he budgetary basis, funds encumbered in the previous year are added to the current year's budgeted figures. Expenditures against the prior year's encumbrances are included with current year expenditmes. Tlie Statement of Revenues, Expenditures. and Changes in Fund Balances - Budg,et to Actual - General Fund and Special Revenue Fund - Budgetary Basis (Statement 6 and Exhibit B-3) presents comparisons of legally adopted budgets, modified by the inclusion of the previous year's encumbrances and with actual expenditures modified by the inclusion of current year encumbrances. Since accounting principles applied for the purposes of developing data on a budgetary basis differ significantly from those used to present financial statements 1n conformity with accounting principle-s generally accepted fh the United States, a reconciliation of the entity's timing differehces in ~cess (Deficiency) of Revenues & Other Financing Sources Over (Under) Expenditures & Other Financing (Uses) of financial resources I~ provided on each financial statement. As required by accounting pnnc1ples generally accepted in the United States, the City tlas recorded a revenue and expenditure for Maine Public Employees Retirement contributions made by the State of Maine on behalf of the City of Lewiston School Department. ihis amount has not been budgeted in the General Fund and results in a difference in reporting on a budg~tary basis of accounting vs. reporting under aqcounting,principles generally accepted In the United States, An intergovernmental rev~nue of $ ,299 and additional expenditure of $~ 1 876,299 in education have been Included on Stat~ment 2, Statement of Activities, and in the General Fund, and on Statement 4, Statement Qf Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds (GAAP basis) and have not been reported on Statement o (Budgetary Basis). Outstanding encumbrances are treated as expenditur.es under the Budgetary Basis. Total encumbrances amount to $2, 17Q,314 for General Fund on Statement 6, but have been properly excluded on Statement 4, under the GMP basis of accounting. For the current yea.r, the Community Development Block Grant Special Revenue Fund had $93,630 of encumbered program balances. B-62

135 Significant buctget deficits resulting from operatrons were experienced in the reserves and contingencies line item ($23, 147) due to additional building repairs needed at the Armory; and otheir miscellaneous ($1,149,554) resulting from additional worker compensation costs. IV. DETAILED NOT ES ON ALL FUNDS A. Deposits and Investments The City of Lewiston has formally adopted an investment policy, Whereby cill available furtds are invested at the highest possible rates, in conformance with legal requirements, while avoiding unreasonable risk The current investment policy does not.speciflcally address concentration of investment risk. Deposits. At.June 30, 2017 the carr)iing amount of the City's deposits was $5,554,869 and the related bank balance was $7,724,186 Custodia/ Credit Risk for Deposits - The City of Lewiston.does not have a formal policy that addresses custodial risk for deposits, which is the risk that the funds may no.t be returned in the case of bank failure. A portion of this risk is mitigated by the fact the financial insti.tutlons holding these deposits are F.D.l.C insured. Of the $7,724,186 bank balance noted above. 100% of the balance was insured by federal depository insurance or collateralrzed_ There were no remaining deposits held in the City's name that were exposed to custodlal credit risk by being uninsured afld uncollateralized. Investments. Maine statutes authorize the City to invest in obligations of the U. S. Treasury.. agencies, instrumentalities, certlficates of deposit repurchase agreements. corporate securities. stocks of financial institutions. and other stock Investments. At year end, the City's investments consisted of the following: 30-Jun- 17 Total Investments by Fair Value Level Debt Securities: U.S. Agency Securities $2.506,649 Corporate Bonds 379, 116 Brokered Certificates of Deposit 6,209,985 Total Debt Securities 9, Equity Securities: Common Stock 1, 110,063 Mutual Funds and Exchange-Traded Funds 121,425 Real Estate Investment Trusts 13,232 Total Equity Securities 1,244,720 Total ln.vestmenrs by Fair Value Level 10,340,469 Investments Measured at the Net Asset Value (NAV): Money Market Mutual Funds 17,636,308 Total Investments Measured at the NAV 17,636,308 Total Investments Measured at Fair Value $27.976, 777 Quoted Prices in Active Markets for Identical Assets (Level I) $1,110,063 Significant Other Observable Inputs (Level II) $2,506, , 116 6,209, ,425 13,232 1,244,120 $ $9,095,749 Equity securities classified In Level I of the fair value hierarchy are valued using prices quoted ln active marl<ets for those securities. Debt securities. classified in Level 2 of the fair value hierarchy are valued from publicly reliable sources or using a matrix pricing technique. Matrix prjcing is used to value securities B-63

136 based on the securities' relationship to benchmark quoted prices. The City has no Level 3 investments. The fair value of money market mutual funds that are measured at NAV per share {or its equivalent) is calculated as of June 30, 2017 in a manner consistent with the Financial Accounting Standards Board's measurement principles for investment companies. Certificates of Deposit held with local financial institutions for $448,000 are excluded from the hierarchy as these investments are considered held to maturity and are therefore not measured at fair value. It is the intent of the City to hold the brokered certificates of deposit listed above to maturity as well. Fair Value Wt. Average Maturity in Years Certificates of Deposits Treasury Bonds Corporate Stocks Corporate Bonds Money Market Total Fair Value $6,657, ,506, ,244,720 NIA 379, ;308 Less than 1 year $28,424,777 Interest Rate Risk - The City has a policy which dictates that less than 20% of its portfolio may be invested in maturities between one and ten years. As a result. the City elects to invest the majority of its funds in short term deposits to satisfy cashflow needs and limit their exposure to declines in fair value. Excess monies in the governmental funds are swept daily by the financial institution into overnight repurchase agreements. Credit Risk - Maine statutes authorizes the City to invest In U.S. Treasury and agencies. repurchase agreements and certain corporate stocks and bonds. The Library Endowment Permanent Fund is the only fund that utilizes equity investments. The Library Board of Directors contracted with R.M. Davis to manage and invest the endowment funds through Charles Schwab in safe and secure equities. In accordance with City policy, investments in certificates of deposits must be F.DJ.C insured and the principal shall not exceed the amount covered by the insurance at a single financial institution. The City held $25,458 of corporate bonds with a bond rating of AA+, $ rated at a AA-, $65,250 rated at an A+, $232,761 rated at an A, $9,889 rated at an A-, and $20,554 rated at a BBB+. The City did not invest in perfected repurchase agreements as a cash management tool during the current year. Custodial Credit Risk for Investments - This is the investment risk taken by the City of Lewiston in the event that we will not be able to recover the value of our investments or collateral securities that are in the possession of an outside entity. The City limits its custodial risk by occasionally purchasing perfected repurchase agreements through the trust departments of TD Bank and Bangor Savings Bank, in the City's name and is held at the Federal Reserve Bank in Boston. Of the $4, 130,485 Investment in corporate equities, bonds. and U.S. Treasuries, $1,748,206 has custodial credit risk because those securities are uninsured, unregistered and are held by the City's brokerage firm. B. Receivables Receivables at June 30, 2017, for the City of Lewiston's individual major funds, nonmajor, and Businesstype - Enterprise funds consist of the following: B-64

137 Other Enter~rise Funds School Capital Gov. Storm General Categorical Projects Funds Water Sewer Water Total Taxes $1,903,091 $1,903,091 Accounts 558,876 $23,190 $318,691 $1,068,984 $1,.131, 170 $399,841 3, Notes\Loans ,534,603 Intergovernmental 785, ,543 $324, ,029.3,256,778 Gross Receivables 4,979, $324, , ,841 1'3.195,224 Less: Allowance for Uncollectibles (16,660l ~778,935} (14,590} {2 1, 041~ (40.709} {871, 935~ Net Receivables $4,962,458 $1,66 6,733 $324,529 $2.845,914 $1,054,394 $1,110,129 $359,132 $12,323,289 Property ta.xes for the current year were committed August 2, on the assessed value listed as of April 1, 20'16. for all real and personal property located in the City Taxes were due in t\rlo installments -September , and March Interest was charged at 7% on all taxes unpaid as of tfle due date. Under state statute 1 the Tax Collector, after the expiration of eight {8) months, and within one year after the date of the original tax commitment, records a tax lien certrficate against any unpaid real estate property tax. The last complete revaluation occurred in 1988 and was effective for the 1988 assessment. A revaluation of land values occurred in 2003 for fiscal year The assessed value for the Hst of April upon Which the 2017 levy was based, was at approximately 8Q% of the estimated market value. Property taxes levied during fiscal year 2017 are recorded as regeivables. The receivables collected during the fisca,i year ended June and duftng the 1st 60 days of fiscal year 2018 are recognized as revenues in the Governmental Fonds, in fiscal year 2017 Rece ivc:ibl~ of $1,708,734, estimated to be collectible subsequent to the 60 day period are considered to be deferred inflows of resources. Prior year tax levies were recorded usmg this same principle. The non-current portion of the notes/loans receivable in the General Fund and Special Revenue Funds are categorized in the nonspendable portion of fund balance in that fund because these assets are not in spendable form. Intergovernmental receivables consist primarily of funds due from the State of Maine and from the Office of Housing and Urban Development. On the Statement of Net Position, the Governmental Funds reported $ as unearned revenue. Thls amount represents the prepayment of fiscal year 2018 taxes, solid waste removal for multi-unit apartment buildings school lunches. and monthly parking billing The unearned revenue reflects the recognition of resources that have been received but yet to be earned. C. Capital Assets The following ls a s,ummary of Changes in the Primary Government's Governmental Activities' Capital As'Sets during the fiscal year B-65

138 Capital Assets Not Depreciated: Restated Balance Balance July 1, 2016 Additions Retirement June 30, 2017 Land $ 14, 164,411 $ 1,054,634 $ 19,449 $ ,596 Construction in Progress 5,224,359 7,969, ,892 5,243,399 Total Capital Assets Not Depreciated 19,388,769 9,024,566 7,970,341 20,442,995 Capital Assets Being Depreciated: Buildings 104,263,442 3,544, , ,616,629 Improvements Other Than Buildings 36,607, ,922 37,239,234 Machinery and Equipment 45,011, , , ,812 Infrastructure 128,136,171 2,553, , ,575,743 Total Capital Assets Being Depreciated 314,018,075 10,008,049 2,464, ,561,420 Less Accumulated Depreciation for: Buildings (41,198,325) (2,873,395) ( ) (44.041,809) Improvements Other Than Buildings (18,025,728) (1,022,552) (19,048,280) Machinery and Equipment (22,972,458) {2, 159,751) (2, 118,880) (23,013,329) Infrastructure ~55, 938,919} {2,635,972) p 13,815} (58.461,076} Total Accumulated Deprecation (138, 135,429! (8,691,670) (2,262,606! (144,564,493) Total Net Capital Assets Being Depreciated 175,882,646 1,316, , ,927 Governmental Activities Capital Assets, Net $ 195,271,415 $ 10,340,945 $ 8,172,440 $ 197)439,920 Depreciation expense was charged to the various governmental functions as follows: general government, $1,051,393; public safety, $480,257; public works, $3,996,379; culture and recreation, $259,263; and education and nutrition, $2,904,378. At June 30, 2017, the City had entered into contracts for, or had otherwise committed to, the construction or renovation of various facilities as follows: Required Project Expended Further Authorization To Date Commitment Financing General Street Rehab. $ 9,608,921 $ 4,225,089 $ 2,044,990 None New Elementary School Construct 45, ,347, ,039 None Riverfront Master Plan 325,000 86,555 18,246 None School Library Air Conditioning 200, ,000 23,950 None Fire Station Roof Replacement 165,000 5,500 None Landfill Improvements 195,000 90,750 79,954 None The following is a summary of the Primary Government's Business-type capital assets for the City's Enterprise Funds at June 30, 2017: B-66

139 Balance Balance Jul~ 1, 20'16 Additions Deletions June 30, 2017 Capttal' Assets Not Depreciated: Land $ 1,294,710 $ 1,294,710 Construction 1n Progress $ 6, 189,287 $ 51788;430 2,821,434 Total Capital Assets Not Depreciated 3, ,189,287 5,788,430 4,116,114 Capital Assets Being Depreciated: Buildings ,845 11, 101,959 Equipment 2,828, ,651 Sewer arid Water Lines 86, , ,914 Total Capi1al Assets Being Depreciated 100,015,890 6,234, ,313,524 Less Accumulated Depreciation for: Buildings (4, ) (223, 1.29) (4.594,655) Equipment (2,066J86) (181,655) (55,354) (2.193,088). Sewer and Water Li.nes {191928,444} (1,769,058} ( } (20, ) Total Accumulated Depreciation (26,366,756} (2, 173,8421 (937,083! {27,603,515} Total Net Capital Assets Being Depreciated 73, , ,009 Business-type CapitaJ Assets, Net s 77,364,421 $ 10,250,162 $ 5,788,430 $ 81,826,153 Intangible Assets Being Amortized; Balance Balance Ju l~ 1, 2016 Additions Deletions June 30, 2017 Intangible Asset Costs $ 1.810,568 $ 187,838 s 1,998,406 Less Accumulated Amortization {550,942l { } ( } Business-type Intangible Assets, Net $ 1, 259,626 $ (39,096) $ 1,220,5.27 Depreciation expense was charged to the various business-type activities as follows; water enterprise fund, $1,252,249: sewer enterprise 'fund, $672,647, and the storm water enterprise fund, $248,946. The water, sewer and storm water enterprise funds incurred amortized deferred charges of $13.,800, $113,204, and '$99,930 respectfully. D. lnterfund Transactions As of June 30, 2017 the balances of interfund activity were as follows_ lnterfund Recefvable tnterfund Payable General Fund $ 7,796A50 Storm Water Enterprise Fund 163,513 School Categofical Grants Fund 606,568 Capital Projects Fund 6, Sewer Enterprise Fund ' Nonrnajor Governmental t="unds Total $ 7,959,963 $ 7,959,963 B-67

140 lnterfund receivables and payables "3s of year end primarily represent ur.ire1rnbursed accounts payable and payroll d1sbursernents from the General Fund's consolidated checking account. Transfers In/Out: Transfers lo Transfers Qut General Fund.$ 732,120 $ 13,322,084 School Categorical Grahts 55,255 Debt Service Fund ,512 Capital Pro1ects Fund 109, ,514 Nonmajor Governmental Funds ,915 Water Enterprise Fund Sewer Enterprise Fund 42,506 Storm Water Enterprise Fund Total $ 15,003,186 $ 15,003,186 The majority of the transfers between funds are comprised of debt service payments of current year principal and interest payments to the Debt Service Fund. Other transfers are made for fringe benefit payments and overhead costs. E. Leases Operating Leases. Th'e City of Lewiston renovated the old District Court Building in order to prepare for the State of Maine's Violation Bureau's operations. The City has a 15 year lease with the.judicial Department. with a 5 year renewal option. Rental Income from this operating lease in 2017 was $139,904. The cost of the building and associated improvements was $735,889 and accumulated depreciati'on at the end of this fiscal year was $619,718 restjlting in the net carrying value of $1i6,171 _ Lewiston CellTelCo Partnership has contracted with the City of Lewiston, the lessor, to rent a portion of roof and ground space at the Lewrston Armory to construct a mobile telephone base stauan The agreement ts for frve years. with 3 five-year renewal options. rn the amount of $22,018 per year. St Mary's Regional Medical Center entered Into a parking and circulation easement agreement with the City. the lessor, to rent a portion of land near the Lewiston Armory, This ten year lease provides an annual payment of $12,500 to be utilized by the school department's Aspirations Program.and $ to the municipal government. The City of Lewiston Leased 10,000 square feet of land to Mariner Tower ll, LLC, the lessee, to construc't a communications tower and related infrastructure. This is a five year lease with 5 five-year renewal provisions, Rental income of $25,800 was received in fiscal year 2017_ The City entered into an agreement with Casella Recycling LLC to lease surplus building space al the City's solid waste facility to proce.ss their zero-sort recycling materfals. The lease's term is 20 years with a five year extension. The annual base rent is $69,000 with a minimum annual price lnflator of 2%. Rental income for FY2017 wa,s $ As part of the Southern Gateway Development, the municipality. as a lessee. entered into two operating leases for tour parcels of land. The security of this land Cifforded the City the opportunity to construct a new mun1cipal parking garage and a parking area in our targ~ted development area. Rental expenditures for this lease were $38,433, and $3,960 respectfulty for each lease. The City is leasing eight votlhg machines from the State of Mai ne for a five year period with lease payments amounting to $4,868 annually B-68

141 The School Department entered into a 3 year land lease with Aubuchon Realty for auxiliary teacher parking. The lease payment in FY1 7 totaled $1,980. Operating leases do not give rise to property rights and therefore the results of the lease agreements are not reflected in the City's capital assets. The lessees are responsible for paying all executory costs such as maintenance and insurance. The following is a schedule by year, of minimum future rental income and expenditures on the City's noncancelable operating leases as of June 30, 2017: Fiscal Year General General Ended Fund Rental Fund Rental June 30 Income Expendit ures 2018 $ 268,234 $ 49, ,644 49, , ,259 42, ,385 39,423 Thereafter 850,660 1,233,051 TOTAL $ 1,875,398 $ 1,460,790 Minimum ft1ture rentals do not include contingent rentals which may be received as stipulated in the lease contracts ~ There were no contingent rental payments received ln fiscal year Capital Leases. The City has entered into three capital lease agreements as a lessee for financing municipal equipment. These leases have given rise to property rights and qualify as a capjtal lease for accounting purposes. These assets acquired through capital leases included machinery and equipment of $2, less $869,905 of accumulated depreciation, were recorded in the Governmental Activities Fund. Payment obligations for these capital leases have been satisfied as of year end. The future minimum lease obligations of the remaining leases, and the net present value (PV) of these minimum lease payments as of June 30, 2017, were as follows: Fiscal Year Ended June Less: Amount of Interest PV of Lease Payments Lease Payment Amount 178,148 93,319 (14.228) $257,239 F. Long-Term Debt General Obligation Bonds. The City issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds are direct obligations and pledge the full faith and credit of the City. These bonds generally are issued as 15 year serial bonds with equal amounts of principal maturing annually. The general obligation bonds currently outstanding, of the original $177, issued, are as follows: Municipal Improvements Capital Improvement Interest Rate 4.6% Balance At 6/30/17 32,500 B-69

142 Capital Improvement % Capital Improvement % 292,000 Capital Improvement &6.9% 1,717, 170 Capital Improvement % Municipal Pension Bonds 3.17% 4,950,000 Capital Improvement % 1,297, 154 Capital Improvement % 7,049,887 Capital Improvement % 2,593,690 Capital Improvement % Capital Improvement % 3,514,451 Education Bonds &42% 6,201,628 Capital Improvement % 14,205,733 Capital Improvement % 3,210,000 McMahon Expansion Project % 1, Capital Improvement % 4,110,600 School Renovation Loan Fund % 127,781 School Qualified Construction Bonds 2% 906,496 Capital Improvement % 2,231,800 Capital Improvement % 1,650, 165 Capital Improvement % 12, Capital Improvement % 2,056,922 Capital Improvement % 3, Capital Improvement % 6,558,553 $ 84,805,145 Annual debt service requirements to maturity for general obligation bonds. Including interest of $15,638,641 are as follows: Fiscal Year Total Debt Ended Principal Interest Service June 30 Reguirements Re9uirements Re9uirements 2018 $ 10,637,217 $ 2,n6,944 $ 13, , 165,698 2,450,217 12,615, , , ,806,982 1,782, ,589, ,702,416 1,476,521 9, 178, ,561,245 4,151,622 30,712, , , 195 9,363, ,491,085 82,197 1,573,282 Total $ 84,805,145 $ 15,638,641 $ 100,443,786 B-70

143 Revenue Bonds. The City also issues bonds through its Enterprise Fund, where the City pledges income derived from acquired or constructed assets to pay debt service. Revenue bonds outstanding at June 30, 2017, of the total $67,373,490 originally issued, are as follows: Municipal Improvements Water Division: Water Improvement Water Improvement Water Improvement Water Improvement Water Improvement Water Improvement Water Improvement Water Improvement Water Improvement Water Improvement Water Improvement U.V. Treatment Facility Water Improvement Water Improvement Chlorination Facility Water Improvement Water Improvement Water Improvement Water Improvement Water Improvement Water Improvement Sewer Division: Sewer Improvement Sewer Improvement Sewer Improvement Sewer Improvement Sewer Improvement Sewer Improvement Sewer Improvement Sewer Improvement Sewer Improvement Sewer Improvement Clean Water Act Sewer Improvement Interest Rate 4.6% 4.5% 5.4% 4.3% 4.3% 3.2% 4.25% 4.02% 4.17% 4.46% 5.1% 0% 3.6% 2.8% 0% 2.7% 2.1% 2.5% 2.6% 2.43% 2.33% 4.5% 5.4% 4.3% 4.3% 3.2% 4.25% 4.02% 4.17% 4.46% 5.1% 0% 3.6% Balance at 6./30/17 17,500 47,500 13,519 46, ,070 1,347, ,164 1,982, , , , 139 1,693, ,925 1,448, ,915 1,840,000 1,723, ,601 2,498,650 18,301,461 9,500 59, , , , , , 123 1,581, , , ,987 B-71

144 Sewer Improvement O Sewer Improvement Sewer Improvement Sewer lmprovement-2013 Sewer Improvement Sewer lmprovement-2015 Sewer Improvement Storm Water Division: Storm Water Improvement Storm Water Improvement Clean Water Act Storm Waterlmprovement Storm Water Improvement Storm Water Improvement Storm Water Improvement Stofm Water Improvement Storm Water Improvement Storm Water Improvement Storm Water Improvement % 3.1% 2.1% 2.5% 2.6 %1 2.25% 2.52% 446%.5.1% 0% 3.6% 2.8% 31% 2.1% 2.3% 2.6% 1_93% 2 37% 498, ,000 1,505,505 1, '0 13,226,981 1,527, , , , , , ,415 1, , ,00Q 700,000 8,482,731 Total Revenue Bond Debt Less: Current Installments Long-Term Rev~nue Bond Debt ,946 $ 36,458,228 Revenue bond debt service requirements to maturity, including $7, oflhterest, are as follows: Fiscal Year Annual Debt Ended Principal Interest Service June 30 Regu irements Requirements Requirements 2018 $ 3; $ 1, $ 4.666, ,490,634 1,021,883 4,512, ,388, ,187 4,309, ,345, ,163, ,203, , , ,42.7,089 2,398,466, 15,825, ,694, ,436 8,546, , ,034,610 - TOTAL $- 40,011,174 $ 7, s 47,977,618 B-72

145 At June 30, 2017', the City had $ , 104 bonds authorized by the City Council but have not been issued. There are no restrictive bgnd covenants with which the City must comply. Changes in Long-Term Liabilities. During the year ended June 30, 2017, the following changes occurred in long-term liabilities for the City of Lewiston: Governmental Activities: Balance Balance Due Within July 1 Additions Reductions June 30 One Year General Obllgation Debt $88,811,832 $6,433,553 $10,440,240 $84,805, 145 $10,637,,217 Bond Premium 2,312,523 1,455, ,703 ~,426, ,703 Workers Comp Claims 4,154,573 1,465, ,501 4,655,715 1,000,000 Compensated Absences - Sfck 2,666, , ,000 Capital Leases 419, , , , 163 Comp. Absences - Vacation 1.745, ,025 62,354 2,087, OPEB UAAL ,729 Net Pension Liability 17,01 1,277 10,735,716 4,899,074 '22,847,919 MainePERS IUUAL 1,320,753 1, Landfill Closure and Postclosure Care 3,028, , '31,000 Total Governmental Activities 123,092,060 20,815,695 18,948, ,961,742 12,497,083 Business-Tl Re Activities: Revenue Bond Debt 38,094,371 5,253,650 3,.336,847 40,011,174 3,552,946 Bond Premium 613, ,095 49, Bond Discount (72,111) (13,423) (58,688) (10, 179) Comp. Absences - Vacation , ,696 Total Business-Type Activities 38,807,699 5, ,389,432 41, Total Liabilities $161,899,759 $26,506, 143 $22,337,447 -$166J070,_45i7 $16, The City is subject to the laws of the State of Maine which limits the amount of long-term debt to 15% of the state's assessed valuation of the City At June , the statutory limit for the City was $330,450,000. The City's General Fund is used to liquidate the net pension obligation and other post-employment benefit obligation. In accordance with the Tax Reform Act of 1986, governments issumg tax-exempt bonds or entering into note or lease obligations are required to perform an arbitrage rebate calculation Upon the fifth anniversary of the obligation and to remit the rebate to the federal government, subject to certain exceptions. Since the effectrve d ~te of these rules, the Crty has been subject to one arbitrage refund due to a spend-down exception on its 2006 bond issue. The rebate amount remitted was $13,604 and has satisfied the requirement for that issuance. The City has issued bonds which may be subject to an arbitrage calculation. The amount will not be determined until the related projects are completed or the five year anniversary has lapsed. Advance Refundlngs. On September , the City sold $3, of general obligation refunding bonds to advance refund the outstanding callabte rnaturfties of the City's 2009 Series A general obligation bonds Advance refunding prooeeds and reaffering premium of $386,748 were placed in an irrevocable trust for the purpose of generating resources to satisfy the remaining debt obligations for the 2009 bonds As a result, the refunded bonds are considered to be defeased and the liability has been removed from B-73

146 the City's financial statements. The reacquisition price exceeded the prior principal carrying value of those bonds by $125,000. The true interest cost (TIC) on the 2009 refunding was 2.04%. The economic gain was $307,200. There was a $335,637 reduction in cashflow required between the old debt and the new debl In prior years the City defeased certain general obligation bonds by placing the proceeds of new bonds in irrevocable trusts to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City's financial statements. At June 30, 2017, $39,219,800 of bonds outstanding are considered defeased. Overlapping Debt. The actual direct and overlapping debt at June 30, 2017, of $135,762,052 was $194,687,948 less than the statutory limit. The City's proportlonate share of all local governmental units which provide services within the City and which must be borne by properties in the City, is summarized below: Percentage Debt Applicable City's Share Outstanding to the City of Debt Municipal & School Debt $84,805, % $84, Water. Sewer & Storm Water Debt 40, % 40,011,174 L.A. Water Pollution Control Authority 18,910, % 10,935,833 L.A. 911 Committee 19, % 9,900 $135,762,052 This results in a ratio of City debt to April 1, 2016 assessed valuation of 6.59% and a ratio of overlapping debt to April 1, 2016 valuation of 7.17%. Conduit Debt. The City has from time to Ume, assisted third parties in financing capital activities by participating in conduit debt transactions. The City is not obligated in any manner for this debt. and as a result has not reported these liabilities or any related assets in the basic financial statements. The outstanding principal balance of conduit debt. as of June , was $3, V. OTHER INFORMATION A. Tax Increment Financing Districts In accordance with M.R.S.A Tltle 30-A, , the City of Lewiston has established several tax increment financing districts (TIFs) to stimulate new investment in the community by assisting businesses with public infrastructure or unusually high development costs. The TIF districts were formed locally, as the City defined the districts and chose how much of the new taxes would go to what public and private projects over what period of time, subject to the approval of the City Council, local tax payers and ultimately by the Commissioner of the Maine Department of Economic and Community Development. Taxes generated from TIF districts can be "captured" and utilized to pay for the City's bonded indebtedness associated with the new public infrastructure investment or returned to the developer in the form of a credit enhancement agreement for defined periods of up to 30 years, The City of Lewiston accounts for all the activity of the TIF districts including captured taxes and expenditures for approved purposes in the Urban Development Special Revenue Fund. The City has chosen to disclose information about its tax abatement (credit enhancement) agreements Individually and negotiates property tax abatement agreements on an individual basis. The following is a brief description of and the total amount of taxes abated for each tax increment financing district: B-74

147 Original Current Eiq~ended for: Assessed Assessed TIF New Debt Credit TIF District Value Value cae Taxes Service Enhancement Housing_ T!Fs: Birch Hill Housing $30,700 $650,000 $5, % $5,943 $11,112 Lofts at Bates Mill $402,450 $2,150,440 50% $24,070 $24,070 Bates St. Housing $187,000 $1,600,000 65% $13,620 $25, Ash Street $519,750 $1,585,000 90% $11,735 $17,602 Economic Develoe.ment T/Fs: CMP Power Reliability $474,500 $51,225, 130 $423,723 $973,949 $423,723 None Gendron Business Park $300,000 $784,030 0% $13,330 None Franklin Property Trust $443,800 $7, % None $188,250 Agora $321,600 $ % None $431 Argo Marketing $268,750 $1,390,000 40% None $15,440 Riverfront Island Hotel $0 $6,151,000 $130,000 $39,399 $130,000 CMP Sub-station $16,950 $3,225,500 Varies $21,603 $66,761 None Wal-Mart $1,333,700 $47,290,600 50% $737,791 $239,286 $632,826 The City has not made any commitments as part of the agreements other than to reduce or reimburse taxes. The City is not subject to any tax abatement agreements entered into by other governmental entities. B. Risk Management The City is self-ihsured in the areas of workers' compensation and unemployment compensation, and accounts for and finances its uninsured risks of loss in the General Fund. The City established a limited risk management program for Workers' Compensation in The program is self-insured for up to $500,000 per occurrence on all employees. Excess coverage Is purchased above this retained level. The City has contracted with outside parties for claims administration. All funds of the City participate in the program. Funds are appropriated in the General Fund and premiums are assessed to all other participating funds to pay claims, claim reserves and administrative costs of the program. These payments are based primarily on rates established by the St<3te of Maine for various job classifications and are adjusted to cover the liability for future claims, as determined by annual actuarial estimates. The actuarial estimates reflect discounting at.8% to recognize the time lag between when claim obligations are recognized by the City and when claims are paid. The safety margih confidence level is set at 75%. During the fiscal year ended June 30, 201 7, a total of $1,304, 175, net of insurance proceeds, was paid in benefits and administrative costs. The outstanding future claim settlements estimation is reported on the Statement of Net Position-Governmental Activities as a noncurrent liability. Consistent With accounting principles generally accepted in the United States, a liability for claims is reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasohably estimated. Changes in the Workers' Compensation claims liability amount in fiscal years 2016 and 2017 were as follows: Beginning Liability Balance Current Year Changes in Estimates Claims Payments Ending Balance $4,154,573 1,465,643 ( ) $4,655,715 $5,150, ,996 (1, ) $4,154,573 Currently. there is a shortfall of $3,477,921 between the amount available to Pi3Y the nonc1urrent workers' comp claims and the noncurrent workers' comp. liability. The City increased the shortfall by $489, 703 during this fiscal year due an increase in reported compensable claims in spite of a reduction in average B-75

148 claim costs of $3,868. The City will continue to fund this shmtfall over the next few years through increased budget appropriations An additional $175,000 was funded by general fund above the budgeted amounl Claims for unemployment compensation do not represent a material amount and therefore have not been accrued at year end. Other. Additionally, the City is expose'd to various risks of loss related to torts, theft of, damage to and destruction of assets, errors and omissions, and natural disasters for Which the Ctfy either carries commercial insurance or participates Tn a public entity risk pool. Currently. the City participates in a public entity risk pool sponsored by the Maine Municipal Association (MMA) for property and casualty. Based on the coverag.e provlded by the pool. the City ls not aware of any material actual or potential claim liabilities Which should be recorded at June nor were there any additional settlements that exceeded the maximum limitation. C. Contingent LiabiHties Amounts received or receivable from granter agencies are subject to audit and adjustment by the granter agencies. principally the federal g0vernment. Any disallowed claims, lncludlng amounts already collected, may constitute a liability of the applicable funds. The amount, if an.y, of expenditures which may be disallowed by the,granter cannot be determined at this time although the government expects such amounts, if any. to be immaterial. The City is a defendant fn various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinien of the City's cotmsel that resolution of these matters will not have a material adverse effect on the financial condition of the City. 0. Related Organizations The Mayor has the responsibility for appointing arr seven members of the Lewiston Housing Authority Board of Directors, who serve staggered five-year terms. Each appointment is subject to confirmation by the City Council. The City's accountability far the Housing Authority does not extend beyond making these appointments. E. Joint Ventures The City of Lewiston has entered rnto several joint ventures with other entities. These joint ventures are considered to be separate reporting entities and have not been included within the ffnancial statements of tlle City. The joint ventures are as follows: 1. Lewiston-Auburn Water Pollution Control Authority The Lewiston-Auburn Water Pollution Control Authority is a J<::>iht venture of the City of Lewiston and the Auburn Sewerage District The Authority was Incorporated 1n as a quasi-municipal corporation to provide and mafntaln facilities adequate for the treatment and disposal of waste watef discharged by the sewage systems of the two cities. Income and losses are allocated among the participating entities based on the service benefiting each city. The Lewiston-Auburn Water Pollution Control Authority meets tlle criteria for a JO n.t venture of tne Business.:type Fund and is included as an Investment in the City's Sewer Enterprise Fund using the equity method of accounting. Management consists of a seven member Board of Directors comprised Qf (1) the Lewiston Assistant City Administrator; (2) the Lewiston Public Serv[ces Director (3) an at-large citizen of Lewiston who is appointed by the Mayor and confirmed by the Clty Council, (4) the Auburn City Manager; (5) the Superintendent of the Auburn Water & Sewerage District: (6) the President or his appointe.e of the Auburn Water & Sewerage District: and (7) a resident of either Lewiston or Auburn elected by the Board. The City's share of the net change in the Authority's net position is reported as a nonoperatlng revenue in its Sewer Enterprise Fund- At June , the City s equity interest in the LAWPCA was recorded at $3-,025,395, an incfease of $95,888 from 201"6. In the fiscal year ended June , $ was B-76

149 paid to the Authority out of the City's Sewer Enterprise Fund. At December 31, 2016, the Authority was liable for unsecured bonds payable totaling $18,910,311, a decrease of $1,492,492 from The City's liability for the Authority's debt is limited to its share of the operations. In 2017, Lewiston's share was set at 57.83%. Complete financial statements can be obtained from the LAWPCA's main office at 535 Lincoln Street, Lewiston, Maine, Auburn-Lewiston Municipal Airport The Auburn-Lewiston Municipal Airport is owned jointly by the cities of Auburn (50%) and Lewiston (50%). The board is comprised of the Auburn City Manager, the Lewiston Finance Director; one councilor from each city, appointed by their respective City Council; one member from each city. appointed by their respective City Council; one member nominated by the Chamber of Commerce and approved by the Board, with each appointment being a resident of the alternate city of the previous seventh member; one member appointed from the Lewiston Auburn Economic Growth Council; and one member appointed from the Androscoggin Valley Council of Governments. The City of Lewiston contributed $105,000 for operating expenditures and $25,825 for capital contributions. In addition to contributions from the two municipalities. the Airport derives revenue through rents, user fees, interest from investments in time deposits, and from federal and state grants. In the year ended June 30, 2017, the Airport's unrestricted net position increased by $26,879 to $250,897. Complete financial statements can be obtained from the Airport's main office at Lewiston Juncti'on Rd, Auburn. Maine, Lewiston-Auburn Transit Committee The Lewiston-Auburn Transit Committee is a joint venture of the Cities of Lewiston and Auburn. The Committee was formed for the purpose of planning and implementing short-term and long-term bus transit development. The Committee also applies for and administers federal and state capital acquisition and operating assistance grants, for mass transit benefiting the twin city area. Since the Transit Committee has leased its buses to a private operator, for transit system use. The Committee is made up of seven members. three each from the cities of Lewiston and Auburn, appointed by their respective Clty Councils, and an at large member from either city appointed by the Committee. The Committee's sources of revenue include rentals, federal and state grants, and contributions from the Cities of Lewiston and Auburn. For the fiscal year ended June 30, 2017, the City of Lewiston contributed $235,000 for operating expenses and $14,868 towards bus replacement In the year ended September 30, 2016, the Committee's unrestricted net position decreased by $72,307 to $239,372. Complete financial statements can be obtained from the Androscoggin Valley Council of Governments, 125 Manley Rd, Auburn, Maine, Lewiston-Auburn Economic Growth Council The Lewiston-Auburn Economic Growth Council (LAEGC) is a non-profit corporation formed to stimulate industrial and commercial development and expansion in the Cities of Lewiston and Auburn. Lewiston participates equally in this joint venture with the City of Auburn. The Council is administered by a twelve member board comprised of three members from each city who are appointed by the Mayors of those cities. Three board members are appointed by the Lewiston Development Corporation and three board members are appointed by the Auburn Business Development Corporation. The Council derives the bulk of its revenues from the participants, but also receives some funds from user fees. In fiscal year 2017, the City of Lewiston cont(ibuted $160,610. In the year ended June 30, 2016, the LAEGC's unrestricted net assets increased by $35,607 to $ Complete financial statements may be obtained at the LAEGC's main office at 415 Lisbon St.. Lewiston, Maine Lewiston-Auburn Committee The Lewiston-Auburn Committee is a joint venture of the Cities of Lewiston and Auburn. Incorporated on January 26, 1978, the committee provides an emergency communication system for the B-77

150 Lewiston-Auburn area. The Committee Is made up of nine members: the police and fire chiefs of each city, one coundlor from each city; a citizen-at-large from each city, appointed by the respective Clty councils; and a citizen-at-large elected by those eight members The committee's primary source of revenues consists of equal contributions from the Cities of Lewiston and Auburn. In the fiscal yraar ended June 30, 2017, the City of Lewiston contributed $1, 069, 122. In the year ended June 30, 2017, the Committee's unassigned fund balance decreased by $1.54,709 to $172,778. Complete financial statements may be obtained from the Lewiston-Auburn 9~ 1-1 Manager at 550 Minot Ave. Auburn, Maine, Lake Auburn Watershed Protection Commission The Lake Auburn Watershed Protection Commission is a 1omt venture of the City of Lewiston anc;i the Auburn Water District. The Commission,. incorporated in 1993, was created to preserve the purity of Lake Auburn, the main water source for the iwin cities. The Commission is administered by a nine member board made up of three members appointed by the Auburn Water District, of whom one must be the Trustee; three members appointed by the Lewiston City Council, of whom one must be a Councilor; two members appointed by the municipal officers of the foll9wing towns Which border the watershed Minot, Hebron, Buckfield, and Turner, and one member of the Androscoggin Valley Council of Governments who must be its Executive Director or hfs deslgnee_ The Commission derives its revenues solely from equal contributions from the City of Lewiston and the Auburn Water District The Lake Auburn Watershed Protection Commission meets the criteria for a joint venture of the Business-type Fund and is included as. an investment in the City's Water Enterprise Fund. At June 30, 2017, the City's equity lnter'9st in the Commission was $2, , an Increase of $ The City also contributed $137,545 as its share of the Commission's operating expenses for the year Complete financial statements can be obtained from the City of Lewiston's Finance Department 27 Pine St., Lewiston, Maine, F. Landfill Closure and Postclosure Care Cost Under state and federal laws and regulations. the City Is required to place a final cover on its landfills when waste is no longer accepted, and to perform certain maintenance and monitoring 'functions at the sites for thirty years after closure_ In addition to opera.ting expenditures related to current activities of the landfills. the City is recognizing a related liabllity based on estimated future closure and postclosure care costs that will be paid near or after the date that the landfills stop accepting waste and ash. The City reports a: portion of these closure and postclosure care costs as a long-term liability on the Statement of Net Position under Governmental Activities based on landfill capacity used as of each balance sheet date. In December 1992, the then existing River Road landfill stopped accepting waste. Work on the final cover was completed in the fiscal year ended June 30, The new landfill began accepting waste in April and i s currently a recipient of ash, as part of an Ash for Trash Program This landfill ls expected t9 remain operational Until The cumulative amount estimated to date for post-closure care costs of the closed landfill totals $318,600. The closure and postclosure care costs, based on the usage to date of 57.61% of total estimated capacity of the new landfill, amount to $2,756,546 The total liability of $3,Q75, 146 is reported as a. noncurrent liability of the Statement of Net Position. The liability increased by a net of $47,047 based on utilization of the new landfill and the amortization of the postc!osure landfill costs durrng the year. The balance of estimated closure and postclosure care costs for the new landfill 1 of $4,9 16,556 will be recognized as the remaining capacity of the landfill is utilized. The estimated total current cost of the landfill closure and post closure care, of $5,245, 156, is based on the amount that would be paid for all equipment, facilities, and services required to close, monltor, and maintain lhe landfill as of June 3-0, The estimated cost of closure and postclosure care does not anticipate cost sharing with the State of Maine. Actual cost may be higher due to inflation, changes in technology, or changes in regulations, or iow.et if the State of Malne reimburses the City for a portion of the cost The City expects to pay for the.actual closure cost with general obligation bonds issued at the time of closure and for postclosure care costs through its annual operating budgets thereafter B-78

151 G. Subsequent Events On July 1, 2017, the City issued $13,270,000 of general obligation public improvement bonds to fund portions of the 2014 and 2017 Capital Improvement Programs. The terms of the sale require varying maturities of principal begi.nning June 1, 2019 through 2038, with an overall true interest cost of 2.636%. On November , the City participated In the Maine Municipal Bond Bank bond sale. This sale provided construction funding for the new Robert V. Connors Elementary School, a state of the art school which will replace Longley and Martel Elementary Schools. Total student capacity is anticipated to be students. The debt was sold as two parts - $42,616,633 for the school construction costs of which the State of Maine will reimburse 93.8%; and $2,104,761 to increase the capacity of the gym, fully air condition the building, and install a second artificial turf surface for the baseball/field hockey field. Principal repayments begin on November 1, 2018 through 2037, with a true interest cost of % H. Prior Period Adjustments During the current fiscal year. the City had cause to restate prior year balances on the Statement of Net Position, and the Comparative Statements of Activities - Governmental Activities. With the implementation of new capital asset software. the City's investment in joint agency assets were grossed up. The following accounts were impacted by this change and the FY2016 balances were restated by increases in: buildings $1, 131,377, improvements other than buildings $5, , equipment $2,242,833, accumulated depreciation $9, and depreciation expense $ The adjustment to depreciation expense reduced the amount of net position in total and in the governmental activities by that amount. I. Deferred Compensation and Retirement Health Savings Plans The City of Lewiston offers its employees three deferred compensation plans created in accordance with Internal Revenue Code (IRC) Section 457. The plans. available to an city employees. permit them to defer a portion of their salary until future years. Participation in the plans is optional. The deferred compensation is not available to employees until termination, retirement. death or unforeseeable emergency. In the City amended the plan in accordance with the provisions of IRC Section 457{g). In that year, assets of the plan were placed in trust for the exclusive benefit of participants and their beneficiaries. The requirements of that IRC Section prescribes that the City no tonger owns the amounts deferred by employees, including the related income on those amounts. Accordingly, the assets and the liability for the compensation deferred by plan participants, including earnings on plan assets, were removed from the City's financial statements. In addition to the deferred compensation plans, the City offers a retirement health savings plan to employees. Funding to the accounts is provided by the exchange of various hours of accumulated sick and vacation time as provided in the union contracts or personnel policfes. Employees who qualify are allowed to convert, once yearly, time into a monetary value using the employee's then hourly rate and deposited into the employee's retirement health savings plan account. The City does not own the individual plan assets or the accumulated earnings, thus they are not included in this report Investments are manag.ed by the plans' trustees under several investment options. The choice of investment options is made by the participants. J. Other Post-Employment Benefits The City of Lewiston is a member of the Maine Municipal Employees Health Trust. The Health Trust is an agent multiple-employer association. The City is an individually rated member of the Association. The Health Trust contracted with an outside consultant, Cheiron. to assist in the valuation of the City's OPEB liability under GASB Statement No. 45. An OPES liability actuarial valuation was completed by Cheiron using a January valuation date. The Trust issues a publicly available financial report which may be obtained by contacting the Maine Municipal Association at 60 Community Drive. Augusta. Maine B-79

152 Description of the Plan. In addition to providing pension benefits, the City provides health insurance for certain retired employees. Eligibility to receive health care benefits follows the same requirements as MainePERS. Eligible retirees are required to pay 100% of the health insurance premium to receive health benefit coverage. Description of Funding Policy. GASB Statement No. 45 does not mandate the prefundfng of postemployment benefits liability. The City currently plans to utilize a pay-as-you-go program to fund these benefits. No assets have been segregated and restricted to provide postemployment benefits. The annual required contribution (ARC), an actuarial determined rate, represents a level of funding that. if paid on an ongoing basis, is projected to cover normal cost each year. The unfunded actuarial liability is amortized as a. level dollar open over an open period of 30 years. using an entry age normal cost metho<:l. The following table represents OPEB costs for the year and the annual required contribution: Normal Cost Amortization of Unfunded Liability Interest Annual Required Contribution (ARC) $ , $289,668 The City's net OPEB obligations wer.e calculated as follows: Net OPEB Obligation, beginning of the year Annual Required Contribution Interest of Net OPES Obligation Adjustment to Annual Required Contribution Annual OPEB Cost Employer Contributions Net OPEB Obligation, end of the year 2017 $1.508, ,668 60,336 (87.231} 262,773 ( ) $1,643, $1,465, ,257 63, 114 (91,247) 249,124 (206,123) $1,508, $1,454, ,257 58,175 (84,106) 251,326 (240,295) $1,465,396 Funding Status and Unfunded Actuarial Liability. The City of Lewiston's annual OPES cost. the percentage of annual OPES cost contributed to the plan. and the net OPES obligatlon for 2017, 2016, and 2015 are as follows: Annual OPES Cost Actual Contribution Percentage Contributed Net OPEB Obligation 2017 $ $214, % $1,643, $ $206, % $1,508, $251,326 $240, % $1,465,396 Actuarial Accrued Liability Plan Assets Unfunded Actuarial Accrued Liability Covered Payroll Unfunded Actuarial Accrued Liability as a Percentage of Covered Payroll Reconciliation of Actuarial Liability Expected Actuarial Liability, 1/1/2015 Actuarial Liability: Retirees & Beneficiaries Active Employees Total Gain/( Loss) 1,873,387 1,917,176 $3,7$0,563 0 $3,790,563 $18, % $3,610, 118 3, ($180,445) B-80

153 Ch.anges due to: Medical Costs Updated Demographics. & Enrollment Shifts Qemographic Assumption Changes Fuhdin.g Method Change Trends Total Changes ($546,058) 505, ,515 (291,638) (66,841) ($180,445) Actuarial Lia bility: Retirees & Beneficiaries Active-Employei:is Total Actuarial Value of Assets Unfunded Actuarial ~iability Sensitivity to Healthcare Trend Rates -1 % Base $1,712r938 1,602,954 3,31.5,892 0 $3,31 5,892 $1,873,387 1,917, 116 3,790,563 0 $3,n~o.ss3 +1 % $2,060, ,592 4,384,399 0 $4~ 384,399 Annual Required Contribution: Normal Costs UAL Amortt.zation Interest Total ARC $59, ,383 4,832 $248,823 $73, ,778 5,625 $289,668 $ , $342,414 Projections of benefits are based on the substantive plan G!S Uhderstood by the employer and plan members and include the benefits in force at the valuation date of January 1, 2017, and the cost sharing arr.angement at that time_ Ac\uari al calculations reflect a long-term perspective and utilize methods that reduce shorherm volatility in actuarial a<;:crneq liabilities and the.actuaria:i value of plan assets. It should be noted, however, actuarial valuati9ns for our OPES plan Involve estimate.s of the value of reported amounts and assymptions about.the probability of events far into the future. These estimate(j amo1,mts are subject to continuai revision.as results ar~ compared to past expectations and new estimates are made about the future. The actuarial assumptions used in the plan evaluation include: entry age normal actuarial cost method, a 2,75% general inflation rate, a 4% return on investment, 4% ultimate rate of medical inflation, and a 2.75% future cost-of-living. adjustment. Tlie unfunded actuarial accrued liability is being recoghized as a level dollar opefl amquht over an open 30 year period. K.. Employee Retirement Systems Con.solidated Plan Description of the Plan. The City contributes to Maine Public Employees Retirement System Consolidated Participating Local Districts Plan (PLO), a cost sharing, multiple-employer, public employee retirement system established by the Maine State legislature. The Maine Public Employees Retirement System (MainePERS) provides retirement and dlsabllity benefits. annual cost-of-living adjustments and death benefits to plan members and. beneficiaries. The authority to establish and amend benefit provisions rests with the Maine State Legislature. The MainePERS issues a publicly available fihancial report that includes financial statements and required supplementary information for the Consolidated Plan. That report may be obtained by writing to MainePERS, 46 State House Station. Augusta. Maine or by calling ~9800: or by visiting their website atwww.mainepers.org. Benefits Provided The Maine Public Employees Retirement System provides -retlremenl and disability benefits, annual cost-of-living adjustments and death benefits to plan members and beneficiaries. The System's retirement progr:ams provide defined retirement benefits based on members' a~erage final compensation and service credit earned as of retirement. Vesting (i.e., eligibility for benefits upon reaching qualification) :occurs upon the earning of five years of service credit (effective October 1, the prior ten year requirement was reduced by legislative action to five years for employees of PLDs). In so.me cases, vesting occ1,,1rs on the earning of one year of service credit immediately preceding retirement B-81

154 at or after normal retirement age. For PLD members. normal retirement age is 60 or 65. The monthly benefit of members who retire before normal reorement age by virtue of havin.g at least 25 years of service credit is reduced by a statutorily prescribed factor for each year of age that a member is below her/his normal retirement age at retirement. The System also provides disability and death benefits which are established by contract with PLD employers under appli able statutory provisions. Upon termination of membership. members' accumulated employee contributions are refundable with tnterest. credited in accc>rdance with statute. Withdrawal of accumulated contributlons results in forfeiture of all benefits and membership rights. The annual rate of interest credited t0 members' accounts is set by the System's Board of Trustees and i.s currently %. Description of Funding Polley. Plan members are required to contribute 8% of their annual covered salary and the City of Lewiston is required to contribute an actuarially determined rate. The current rate Is 9.5% for municipal employees under Plan A, and 9.1% for certain public safety employees under Special Plan Option #2C 1 of annual covered payroll. The contribution rares of plan members and the City of Lewiston are established and may be amended by the MainePERS Board of Trustees. The City's contributions to the MalnePERS Cons01idated Plan for the years ended June.30, 2017, 2016, and 2015 were $1,807,880, $1,662,802, and $1,454,623, respectively, equal to the required contributions for each year. Unfunded Actuarial Liability. Upon joining the consoridated plan on July , the City's initial unfunded unpooled actuarial liability (IUUAL) was calculated. The luual represents the remaining amount of the City's pension liability upbn transitioning to the consolidated plan trom a participating local district (PLO). The outstanding IUUAL at t.hat time was amortized over a 20 year period. wrth the annual payment increasing by 6%. until the IUUAL ls paid in full. In December 2001, th.e City lssµed general obligation pension bonds, with a total par value of $ to pay off its outstanding IUUAL As of June , the outstanding balance of the original general obligation pension bonds was $4.950,000. Effective July the City amended its Special Plan Option #2C to include- full retirement benefits for all firefighters serving 25 years of service with a no age provision. This modification resulted in an IUAAL of $2,467,807 to be amortized, over a 15 year period. As of June 30, 2017, the City remitted IUUAL payments of $269,616 as contractually agreed upon, plus an additional amount 0f $940,525 based on an agreement between the Maine Pub!Tc Employees Ret1rement System and ~he City for the payoff of the Ci.ty 's then-existing IUUAL The payoff provided a cash savings to the City of $ Teachers Plan Description of the Plan. All of the Cityi's teachers, plus other qualifled educators. participate in the MPERS teacher group. The State Education Teacher's group (SET) ls a cost sharing plan with a special funding situation established by the Main.e State legislature. MainePERS provides the retirement and disability benefits, annual cost-of-living adjustments and death benefits to plan members and beneficianes The authority to establish and amend benefit provisions rests with the Maine State Legislature. MainePERS issues a publicly available financial report that includes financ1a~ statements and required supplementary information for the teacher's group, That report may be obtained by writing to MaihePERS, 46 State House Station, Augusta., Maine or by calling or by visiting thelr website 9t org. Benefits Provided. The Maine Public Employees Retirement System provides retirement and disability benefits, annual cost-ot-hvtng adjustments and death benefits to plan members and beneficiaries The authority to establish and amend benefit previsions rests with the State Legislature The System's retirement programs provide defined retlremenl benefits based on members' average final compensation and service credit earned as of retirement. Vesting {i.e., eligibility for benefits upon reaching quarrficatlon) occurs upon the earning of five years of service credit (effeotlve October , the prior ten y.ear requirement was reduced by legislative action to five years for State employees and teachers). In some cases, vesting occurs on the earning of one year of se.rvice credit immediately preceding retirement at or after normal retirement age Normal retirement age for State employees and teachers is age 60, 62 or 65 The normal retirement age is determined by whether a member had met certain creditable service requlrements on specific dates, as established by statute. The monthly benefit of members who retire before normal retirement age by virtue of having at least 25 years of service c.redit is reduced by a B-82

155 statutorily prescribed factor for each year of age that a member 1s below her/his normal retirement age at retirement, The System also provides disability and death benefits which are established by statute for State employee and teacher members. Upon termination of membership, members' accumulated employee contributions are refundable with interes~ credited in accordance with statute. Withdrawal of accumulated contributions results in forfeiture of all benefits and membership rights. The annual rate of interest credited to members' accounts 1s set by the System's Board of Trustees and is currently 6.0%. Deser/ption of Funding Polley. Employees are required, by state statute, to contribute 7.65% of their compensation to the retlrement system. For employees compensated through federal pass-through grants, the City contributes amounts determined by the State of Maine. The Maine State Department of Education is requked. by the same statue. to contribute the employer contribution. Thls amount has been reported as an intergovernmental revenue and education expenditure on the GMP basis financial statements (Statement 4). The City contributed $1,349,225 (13.93%) for the federally fund~d teacher's employer con1r1bution and 3.36% for state teacher's normal costs. In the. year ended June 30, 2017, employees contributed $ , while the State of Maine Department of Education contributed $3.875,299 or 12.68%. and $ for other costs on behalf of the City's educators. In addition, the City is required to contribute toward the UAL of the plan and pay a small percentage of payroll towards the administrati ve costs for federally funded teachers. which amounts to 10,57% of compensation and totaled $ for the year ended June 30, Pension Liabilities, Pension Expense, and Deferred Outflows and Inflows of Resources Related to MEPERS Pensions. At June 30, 201'7 1 the City reported a llabillty of $22i847,919 for its. share of the net pension liablllty.(npl) of which $19,021,119 was attributed to the City's PLO plan and $3,826,800 was attributed to the City's proportionate share for the SET plan. The State's proportionate share of the SET net pension liability attributed to the City Is $ , for a total of $ ,293. The net pension liability was measured as of June. 30, 2016, and the total pension liability used to calculate the net pension Oability was determined by an actuarial valuation as of that date_ The City and School's proportion of the net pension liability was based on an actuarial projection of the long-term share of conttibutions to the pension plan relative to the projected contributions of all participating members. As of June 30, 2016, the City's PLO proportion was %, an increase of % from June 30, For that same period, the City's proportion share o.f the SET was %, which was a decrease of, 17'4231%. For the year ended June 30, 2017 the City recognized total pension expense of $3, for the PLO plan and pension expense of '$4, 166,933 and revenue of $4, for support provided by the State of Maihe for the SET plan. Al June 30, 2017, the City reported deferred outflows of resources and deterred inflows of resources related to pensions from the following sources: PLO Plan SET Plan Deterred Deferred Oeferfed Oeferred Outflows Inflows Outflows Inflows. Differences between Expected & Actual Experience $230,580 $1,223,414 $74,009 $7,227 Changes of Assurnptions 2,039,110 98,282 Changes in Proportion & Differences between Contributlons & Proportionate Share of Contributions 54, , ,516 1,614,458 Contributions Subsequent to the Measurement Date 1.807,880 1,349.,255 Net Difference between Projected & Actual Plan lrwestment Earnings 7,028,927 2,925,346 1,221, ,712 Total Deferred Outflows & Inflows $11, 161,348 $4,565,749 $3,021,762 $2, $1,807,880 for the PLD plan and $1, for the SET plan were reported as deferred ~utflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows'. B-83

156 Projected Deferred Outftows/(lnflows) to be Recognized as Pension Expense PLO Plan SET Plan Fiscal' Year 2017 Fiscal Year 2018 Fiscal Year 2019 Fiscal Year 2020 Fiscal Year 2021 Thereafter $747,982 ($360,092) 579,924 ( ) 2.363, , , Actuarial Methods and Assumptions. The tetal pension liabllity ln the June 30, 2016 actuarial valuatlon was determined using the following actuarial methods and assumptions. applied to all periods included in the measurement The Entry Age Normal actuarial funding method' is used to determine costs. Under this funding method, the total employer contribution rate consists of two elements the normal co.st rate and the unfunded actuarial liability (UAL) rate. The individual entry age normal method Is used to determine llabillties. Under the Individual entry age normal method, a normal cost rate is calculated for each employee. This rate is determined by tal<ing the value. as of age at entry rnto the plan. of the member's projected future benefits. and dividing it by the value, also as of the member's entry age. of his or her expected ftjture salary. The nocmal cost for each employee Is 1 the product of his or her pay and his or her normal cost rate_ The normal cost for the 9,roup 1s the sum o f the normal costs for all members. Experience gains and losses, i.e., decreases or increases in liabilities and/or in assets when actual experience differs from the actuarial assumptions, affect the unfunded actuarial accrued liability. The actuarial valuation employs a technique for determi ning the actuarial value of asset~ which dampens the swing In the market value. The specific technique adopted in this valuation recognrzes. in a given year one-third of the investment return that is different from the actuarial assumption for investment return PLO NPL Plan Amortization Method C.loseo basis over a 20 vear oeriod Level percentage of payr:oll amortized over the period in SET NPL Plan Amortization Method effect under statutorv & constitutional reauirements 2.75%-9% per year for PLO and 2.75%-14 5% for SET for Salary Increases, Merit & Inflation FY2016, and 3.5%-9 5% peryear and 3 6%-13.5% respectively for FY % per annum for FY2016 and 7.125% for FY2015, Investment Rate of Return comoounded annually Cost of Living Benefit Increases 2.2% for FY2016 and 2.55% for FY2015 For actlv.e member and non-disabled retirees, the RP2014 Total Dataset Healthy Annuitant Mortality Table, for males and females, is use.d for FY2016. For all rec1p1ents of disabllity benefits, the RP2014 Total Dataset Disabled Annuitant Mortality Table, for males and females, is used. Mortality Rates Table RP2000 Combined Mortcality projected forward to 2015 using Scale AA. for active members and non-disabled retirees, ages are set back 2 years, for disabled recipients the Revenue Ruling 96-7 Disabled Mortahty Table for Males & Females 1s used Actuarial Exoerience Study Period Julv 1, 2005 to June 30, 201 O The long-term expected rate of return on pension plan investments was determined using a building-block method 1n which best estimate ranges of expected future real rates of return (expected returns, net of pension plan investment elq;iense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term e~pected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of B-84

157 arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of June 30, 2016 are summarized in the following table. Assets for each of the defined benefit plans are commingled for investments purposes. Asset Class U.S. Equities Non-U.S. Equities Private Equity Real Estate Infrastructure Hard Assets Fixed Income Tota l Target Allocation 20% 20% 10% 10% 10% 5% 25% 100% LT. Expected Real Rate of Return 5.7% 5.5% 7.6% 5.2% 5.3% 5.0% 2.9% The discount rate used to measure the collective total pension liability was 6.875% and 7.125% for each of the Plans in 2016 and 2015 respectively. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and non-employer entity contributions will be made at contractually required rates, actuarially determined. Based on these assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments to current plan members. Therefo0re, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. The following table shows how the collective net pension liability/ (asset) as of June 30, 2016 would change if the discount rate used was one percentage point lower or one percentage point higher than the current rate. The current rate is 6.875% for each of the Plans. Sensitivity to the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate -1% Decrease Current Rate +1% Increase PLD Plan Discount Rate Net Pension Liability - City's PLO Portion 5.875% $31,571,631 6,875% $19,021, % $7,205,260 Set Plan Discount Rate Net Pension Liability - City's SET Portion 5.875% $6, 127, % $3,826, % $1,909,036 Changes in Net Pension Liability. Changes in net pension liability are recognized in pension expense for the year ended June 30, 2016 with the following exceptions: The difference between expected and actual experience with regard to economic or demographic factors were recognized in pension expense using a straight-line amortization method over a Closed period equal to the average expected remaining service lives of active and inactive members in each plan. The first year is recognized as pension expense and the remaining years are shown as either deferred outflows of resources or deferred inflows of resources. For 2016, this was 4 years for the PLD Consolidated Plan and 3 years for the SET Plan. Differences between projected and actual investment earnings were recognized in pension expense using a straight-line amortization method over a closed five-year period. The first year is recognized as pension expense and the remaining years are shown as either deferred outflows of resources or deferred inflows of resources. Differences due to changes in assumptions about future economic or demographic factors or other inputs were recognized in pension expense using a straight-line amortization method over a closed period equal to the average expected remaining service lives. of active and inactive members in each plan. The actuarial assumptions used for the year ended June 30, 2016 valuation were based on the results of an actuarial experience study for the period of June through June 30, Please refer to page 87 for information relating to changes of assumptions. The first year is recognized as pension expense and the remaining years are shown as either deferred outflows of resources or deferred inflows of resources, B-85

158 Differences resulting ftom a change in propmtionate share of contributrons and differences between total employer contributions and the employer's proportionate share of contributions were recognized in pension expense using a straight-line amortization method over a closed period equal to fhe averag_e expected remaining service lives of active and inactive members in each plan. The first year is recognized as pension expense and the remaifling years are shown as either deferred outflows of resources er deferred inflows of resources. Differences between total employer contributions and the employer's proportionate share of contributions may arise when an employer has a contribution requirement for an employer specific liability. B-86

159 CITY OF LEWISTON, MAINE Required Supplementary lnformauon June 30, 2017 I. Retiree Healthcare Plan Schedule of Funding Progress. The City provides healthcare benefits. for certai.n retired employees. The e,ligible retirees pay 100% of the health insurance premiums to receive benefit coverage. The City of Lewiston plans to fund these benefits on a pay~as-you-go basis. The following tables represent information for only the years available. Actuarial Unfunded Annual UAAL asa Fiscal Valuation Plan Actuarial Actuarial Funded Covered % of Covered Year Date Assets Liability (AL) Liability (UAL) Ratio Pa.vroll Payroll /1/ $8,495,53.4 $8,495, % $16,697, % /1/ $6,984,012 $6.,984, % $16,086, % / $6.984,012 $ % $14, % /1/ $4,191,155 $4.191, % $16, % /1/ $4, $4, % $16, % J1/ $3,442,071 $3,442, % $16.674, % /1/ $3,4.42,071 $3,442, % $17,653, % "2011 1/1/ $3,790,563 $3,790, % $1:8,345, % Schedule of Employer Contributions. Fiscal Annual OPEB %of AOC Net OPEB Year Cost (AOC) Contributed Obligation 2010 $703, % $1, $506,593 ~3. 7% $1,035, $ % $1,278, $307, % $1.349, $ % $1.454, $ % $1,465, ' $ % $1,508, $262, % $ II. Maine Public Employees Retirement System Consolidated Plans PLO Plan: Proportion of the Net P ension Liability Schedul~ of Proportionate Share of the Net Pension Liability Last Ten fiscal Years as of June 30 (for the only years available) 2017' 201~ % 3.56% 3.78% 3.87% Proportionate Share of the Net Pension Liability Covered Employee Payroll Proportionate Share of the Net Pension Liability as a Percentage of Covered Erriployee Pay.roll Plan Fiduciary Net Position as a Per centa.ge of the Total Pen$ion Liability $19, 021, 119 $11,353,542 $5-,823,895 $11,916,68 $18, $18.047,694 $18.107,800 $18,977, % 62,91% 32.16% 62.79% 81.. oo o/o 88.30% % 87.50% B-87

160 SET Plan: City's Proportion of the Net Pension Liability City's Proportionate Share of the Net Pension Liabilfty State's Proportionate Share bf the City's Net Pension.Liability Total 0.39% $3,826,BOQ $41,924,493 $45,751, % 0.31%. $5, $3,394,310 31, t69,079 24;371,793 $36, 445 '908 $ , 103 City's Covered Employee Payroll Percentage of City's Proportionate Share of the Net Pension Liability to Covered Payroll Percentage of Plan Fiduciary Net Position,to the Total Pension liability $3i,369, % 76.20% $30,253;436 $28.851, % 11.76% 81,2.0% 83.90% Schedule of Contri butions for the Last Ten Fiscal Years (for the only years available) PLO Plan: Contractually Requfr.ed Contribution $1,807,880 $.1,662,802 $1,454,623 $1,312,009 Contributions Made in Relation to Requlred Contributions ( 1,807,880) (1,662,802) (1,454,623) (1,S12,009} Contributions Deficiency/(Excess) Covered Employee Payroll $19, $18,683, 164 $18, $18, 1'07,"800 Percentage of Contributions to Covered Payroll 9.25% 8.90% 8.()6%. 7,25% SET Plan: Contractually Required Contribution $1,349,254 $1,310,028 $1,430,398 $1.23'4.56'5 Contributions Made in Relation to Required Contributions (1,349,254) (1,310,028) ( 1,430,398) (1.234,565} Contributions Deficiency/(Exeess) Govered Employee Payroll $33, $31,369,502 $30,253,436 $28,851,036 Percentage of Contributions to Covered Payroll 3.99% 4_18% 4.73% 4.28% Notes to Required Supplementary Information Changes o.f.assi.jmpt;ons. There was a change in the investment rafe of return assumption this year from 7.125% tg 6.875%. Annual salary increases, including inflation, changed from 3.50% ~ 9,50% to 2.75% - 9"00%, for the PLO Consolfda~ed Plan and from 3.50% % to 2. 75% %) for the SET Plan. There was also a change in the cost of livi ng benefit.increase from 2.55% to 2.20%. Finally, the mortality rates for active m.embe.rs. nondi.sabled retirees and recipients of disabllity benefifs, were determined using the RP2014 Total Dataset Healthy Annuitant Mortality Table and the RP2014 Total Dataset Disabled Annuitant Mortality Tab'le, tot males and femares, compared to the RP2000 Tables projected forward and the Revenue Ruling 96-7 Disabled Mortarity Table used in the prror year_ B-88

161 Nonmajor Governmental Funds SPECIAL REVENUE FONDS Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditures for particular purposes. Community Development Block Grants To record federal grants.. obtained and expended under the Ho"Using an~ Community Development Act of 1974, as amended, for the, development of viable.urban communities. Urban Development Action Grant To account for federal awards obtained and expended under the Housing and Community Development Act of 1974, for ttle redevelopment of the downtown commetcial core of the city, Rehabilitation Loan Program To.account for the residential rehabilitation loans received from the Housing Opportunity Zone Pr:ogram. Funds are targeted to the development ofa low/mod residential section of the City. Lewiston Mill Redevelopment Corporation A blended component unit that reports the operating activity of a 360,QOO square foot multi.use complex acquired by the City through matured tax liens., Urban Development Fund A fund used to record restr icted federal and state grant awards received by the City to fund targett?d rnhal;>ilitation pr.ejects, tax increment finaneing districts, envirqnmental rerned i ~tion, a.nd infrastructvre improvements In out aore urban area. Recreationa'I Activity Programs Funds generated by offering vcirious recreational activities in which the City provides. facilities. Public Safety, Culture and Other Grants To accoun.t for grants received from various sources, primarily from drug enforcement. but also from other state grants and their related programs. PERMANENT FUNDS Permanent Funds are used to account for resources that are legally restricted t9 the extentthat only earnings, not principal, may be used for p,urposes.that support the reporting government's programs. GAR Cemetery Care Fund The cemetery care fund was established by various donors for the perpetual care of sever-al old cemeteries, maintenance is provided from the investment income received. Library Endowment Fund The library Endowment f und' is used to purchase library books, videos and periodicals, as well as fund approved capital expendttures. B-89

162 City of Lewiston, Maine ExhibitA-1 Combining Balance Sheet Nonmajor Governmental Funds June 30, 2017 {With Comparative Totals for June 30, 2016) ASSETS Total Nonmajor Special PennanentFunds Governmental Funds Revenue GAR Library Funds Cemetery Endowment Total Cash and Cash Equivalents $ 2, 1.87,865 $ 2, 187,865 $ 1,551,762 Investments 2,406,864 $ 23,665 $ 1, $ 1.885,998 4,292,862 4,685,153 Receivables.: Accounts 318, , ,213 Rehabilitation Loans (Net of Allowance for Uncollectibles) 2,024,194 2,024, 194 1,876,490 lnterfund Intergovernmental 5.03, , ,096 Total Assets. $ 7,440,643 $ 23,665 $ 1,862,333 $ 1,885,998 $ 9,326,641 $ 9,267,415 LIABILITIES ANO FUND BALANCE Liabilities: Account!) Payable $ 455,162 $ 20 $ 20 $ 455, 182 $ 340,904 lnterfund Payables 223,280 60,201 60, , ,774 Accrued Payroll 23,767 23,767 20,898 Total Liabilities 702; , ,576 Fund Balances: Nonspendable: Permanent Fund Principal $ 12,043 1,206,342 1,,218,385 1,218,385 1,218,385 Long-Term Notes Receivable 1,480,086 1,480,086 1,606,112 Restricted for: Community Development Block Grant 1, 115,807 1,115,807 1,261,430 Urban Development Action Grant 279, ,426 79,248 Rehabilitation Loan Programs 88,543 88, ,415 Urban Development 2,964,879 2,964,879 3,062,445 Permanent Fund Unexpended Income 11, , , , ,168 Public Safety and Culture Grants 464, , ,960 Assig:ned to: Lewiston Mill Redevelopment Corp. '169; , ,297 Recreation Activity Programs 175, , ,378 Total Fund Balances 6,738,432 23,665 1,802,112 1,825,773 8,564,205 8,480,836 Total Liabilities & Fund Balances $ 7,440,643 $ 23,665 $ 1;862,333 $ 1,885,998 $ 9,326,641 $ 9,267,415 B-90

163 City of Lewisto n, Maine Exhibit A-2 Combining Statement of Revenues, Expenditures and Changes in Fun.d Balance Nonmajor Governmental Funds Fo r the Fiscal Year Ended J u ne 30, 2017 (With Comparative Totals for Year Ende'd June 30, 2016) REVENUES Total Nonmajor Special Permanent Funds Governmental Funds Revenue GAR Library Funds Cemetery Endowment Total Taxes $ 2,150,064 $ 2,150,064 $ 2,142,925 lntergovernme.ntal 3, 163,468.3, ,618 Charges For Services 103, ,040 88,766 Interest, Rents and Gain on Investments 476,593. $ 58 $ 225,555 $ 225, , ,819 Miscellaneous 184,, , ,214 Donations 257,831 27,370 27, ,201 92,703 Total Revenues 6,335; ,983 ~.588, ,044 EXPENDITURES C.urrent: General Government 5,682,375 5,682,375 4,279,559 Human Services 142, , ,202 Culture & Recreation 237,569 68,037 68, , ,471 Capital Outlay 604,873 2,723 2, ,273 To.ta! Expenditures 6,666;942 70,759 70,759 6,737,701 5,462,505 Excess (Deficiency) of Revenues Over (Under) Expenditures (331,805) , ,224 (149,581) 272,539 OTHE:R FINANCING SOURCES (USES) Transfers In 592, , ,107 Transfers Out (359,915) (359,915) (663,295) Total Oiher Financing Sources (Uses) 232, , ,811 Net Change in Fund Balances (98,853) , , ,350 Fund Balance, July 1 6,837, ,607 1,619,946 1,643,551 8,480,836 8,004,486 Fund Balance. June 30 $ 6,738,432 $ 23,665 $ 1, $ 1,825,773 $ 8,564,205 $ 8,480,836 B-91

164 City of Lewiston, Maine Exhibit e--1 Nonmajor Special Revenue Funds Combinln.g Balance Sheet June 30, 2017 (With Comparative Totals for June ) Community Urban Roh ab Lowi.ston MUI Recreation Public Safoty, Total All funds Development OeYelopment Loan Redevelopment Ufban Activity Culture & Block Grant Action Grant ~rogram s Corporation Oevoloptnent Fund Other Grants ' ASSETS Casll and Cash Equlvalents s 445,521 s 74,880 s 44,983 s 64,408 s 1,266, 131 s 85,764 s 206,178 s ~. 187,865 s 1,551,762 Investments. 490,251 82,397 49,499 70,875 1, , ,218 2,405, ,490 Jnterfund Receivables Receivables. Accounts 34,863 54, ,107 2;944 1, ,69i 381,213 Rehabllltatfon Loans (Net of Allowance for Unoollectibles) 1, , , ,876,490 lnlergovernm.ent al 141, , ,096 Total Assets S 2.412,692 s 400'.465 s 309, 189 s $ s 183,083 s 490,941 s 7.440,644 s 7,553,753 LIABILITIES AND FUND BALANCES uabililles: Actoun1s Payable s 128,267 s 170,294 s 20,035 $ 1 l4,482 $ 1,626 s 2 '458 s 455,162 $ lnterfund Payables 63,203 34, , , ,738 Accrued Payroll sao 5,039 5,831 6, ,767 20,898 Total Liabilities , a S, , ,46(> Fund Balances; Nonspendable: Long-Term Notes Rece.i\lable 1,100,ea2 s 12 1,039 14,14'T 244, , 112 Restricted for: Community Development Block Grant 1, ,115, ,430 Urban Development Acllon Grant 279, ,426 79,248 Rehabl!Uatlon Loan Prograflls 88,543 88,543 1'15,41 5 Urban Development 2, ,964,879 3,062,445 Public Safety arid Culture Grants 464, , ,960 Assigned to: Lewiston Mllf Redevelopmeril Gorp , ,297 Recreation Activity Programs 175, , ,378 Total Fund Balances , , ,967 3,209, , , ,432 l.l.63(,285 Total Liabilities and Fund Balances s 2,412,892 s 400,465 s s 190.()02 s J,454,071 s 183,083 s 490,94.1' s 7,440.6'44 s 7,553,753 B-92

165 City of Lewiston, Maine Exhibit B-2 Nonmajor Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balance For the Fiscal Year Ended June 30, 2017 (With Comparative Totals for June 30, 2016) Community Urban Rehab Lewiston Mill Recreation Public Safety, Total All Funds Development Development Loan Redevelopment Urban Activity Culture & Block Grant Action Grant Programs Corporation Development Fund Other Grants REVENUES Taxes $ $ 2, 150,064 $ 2, Intergovernmental $ $ 1, $ ,1 63, ,618 Charges For SeNioes $ 103, )040 88,766 Interest and Rents 23,931 $ 11, $ 410,391 28,547 1, , ,533 Donations 10, , ,831 91,081 Miscellaneous 39, ,598 3, , ,214 Total Revenues ,700, ,391 2, , ,345 6,335, EXPENDITURES Current: General Government 515,857 25, , , ,603 5,682,375 4,279,559 Human SeNices 142, , ,202 Culture and Recreation , , , ,155 Capital Outlay 449, , , Total Expenditures ,033 1,728, ,721 3,062, , ,817 6,666, ,158 Excess (Deficiency) of Revenues Over (Under) Expenditures (32,355) (17.733) (28.320) (31.330) (351,842) 9, (331,805) 290,979 OTHER FINANCING SOURCE (USES) Transfers In , , 107 Transfers Out (1,839) (204) (356,485) ~1.388) p59,915} ~663,295! Total Other Financing Sources (Uses) (1.839) (204) (1,388) 232, ,812 Net Change in Fund Balances (34.194) (17,733) (28,524) (31,330) (115,459) 9, , 140 (98,853) 494,790 Fund Balance, July 1 2,250, , , ,297 3,324, , ,960 6,837,285 6,342,495 Fund Balance, June 30 $ 2.216,489 $ 400,465 $ 102,690 s , $ 175,625 $ 464,100 $ 6,738;432 $ 6, B-93

166 City of Lewiston 1 Maine Exhibit 8~3 Community Development Block Grant Special Revenue Fund Schedule of Revenues, Expenditures and Changes:in Fund Balance Budget and Actual For the Fiscal Year Ended June 30, 2017 REVENUES Budgeted Amounts Actual & Variance Original & 2016 Final & Year'End Pos.itive Encumbrances Encumbrances Encumbrances (N~gative) Intergovernmental $ 954,758 $ 954,758 $ '690t018 $ (264,740) Interest and Misc. Revenue 63,189 63,189 Total Revenues 954, ,758' 753,207 (201,551) EXPENDrTURES Public Service Activities 152; :, ,125 10,476 Adminiwation an(l Planning 217, , , 124 (1,224) Economic Development 46,449 46,44!} 46,449 Housing Rehabilitation 368, , ,363 (21.487} Parks and Recreation 167, , ,580 39,513 Total Expenditures 952; , ,192 73,7'2,7 Excess (Deficiency) of Revenues Over (Under) Expenditures. 1,839 1,839 (125,985) (127,.824) OTHER FINANCING (USES) Transfers Out (1.839) (1.839) p.839) Total Ofher FinancinQ (Uses) (1,839) (1,839.) (1.839) Net Change in F"und Balance - Budgetary Basis (127,824) (127,824) Add Back Encumbrances 93,630 93,630 Net Change in Fund Balance - GAAP Basis (34, 194) (34, 194) Fund Balance, July 1 2,.2-50, 83 2,250,683 2,250,683. Funa Balance, June 30 $ 2,250,683 $ 2,250,683. $ 2, $ (34,194) B-94

167 City of Lewiston, Maine ExhibitC-1 Schedule of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds - Budget and Actual For the Fiscal Year Ended June 30, 2017 Business.Type ActMties - Enterprise Funds Water Enterprise Fund Sewer Enterprise Fund Storm Water Enterprise Fund Variance Variance Variance Original Final 'Positive Original Final Positive Original & Ffnat Positive Budget. Budget Actual (Negative) Budget Budget Actual (Negative) audget Actual (Negative) OPERATING REVENUES Charges for Services $5.291,080 $5,291,080 $ 5.448,327 $157,247 $5, $5,697,620 $5,969,042 $271,422 $2.501,000 $2,614,835 $113,835 Total Operating. Revenue 5,291,080 5,291, , ,247 5,697,620 5,697,620 5,969, ,501,000 2,61 4, ,835 OPERATING EXPENSES Cost of Sales and Services 2,076,275.2,073,775 1,887, '3.425,722 3, , (52,285) 874, ,706 45,867 Administralion 881, ,261? 839, , , , , Depreciation 333', ,770 1,252,249 ( } 111, , ,647 (558,897} 234, ,946 (14,696) Total Operating Expenses 3,290,811 3,290,811 3,979;637 (68.8,826) 4,227,774 4,227,774 4,793,722 (565,948} 1,473,228 1,441., Operating Income (Loss) ,000, ,690 (531,579) 1,469,846 1,469,846 1, (294,526) 1,027,772 1,173,250 l45,478 NONOPERATING REVENUES (EXPENSES) Interest- Revenue 4,938 4,938 12,410 12,4.10 lnc~ase in Funo Equity of Joint Ventures 56,429 56,429 95,888 SS,888 Interest Expense ( ) (491,210) {469, , 16.7 ( ) (374,453) (315,491) (i.038) (248,594) {2:l9,674) 8,920 Gain on Sale of Capital Assets ,085 Amortlzallon of Deferred Charges (13,800) (13,800) (113,204) (lls,204) (99.930) (99,930) Total Nonoperating Revenue (EJ<penses (491,2 10) (491,210) (421,329) 69,881 ( ) (374,453) (387,869) (13.416) ( ) ( ) (78,600) Income (loss) Before Gontrltrul!ons & Transfers 1,509,059 1,509;059 1,047,361 (461,698) 1,095,393 1,095, ,,451 (307,942) n ,056 66,678 Transfers Out (25,645) (25,645) (25 ;64~ ) (42,506) (42,.506} (42,506) (367,267) (367,267) Capital Contributions J.5,876 35,876 2,000 2,000 Change in Net Posltion 1,<1e ,414 1,057,592 (425,822) 1,052,887 1,052, ,945 (307,942) 411, ,789 68,878 Total Net Pos1tloh. July 1 28,215,406 28,215,406 28, ,469,011 14,469, ,469,01 7 4,514,494 4,514,494 Total Net Position, June 30 $ ' 820 $29, $29:,272,998 ($425,822) $15, $15.,521,904 $15,213,962 ($ ) $4, $4,995,283 $68:878 B-95

168 City of Lewiston, Maine Exhibit D-1 Combining Statement of Fiduciary Net Position Fiduciary Funds - Private Purpose Trust Funds June 30, 2017 ASSETS Investments Total Assets $ $ Farrar Fund Private Purpose Trust Funds 34,011 $ 34,011 $ Scholarship Fund Total ,453 $ 122,463 88,453 $ 122,463 ====== LIABILITIES Accounts Payable - General Fund $ Total Liabilities NET POSITION Held in trust for scholarships and other purposes $ 33,893 $ 88,453 $ 122,345 ====== Combining Statement of Changes in Fiduciary Net Position Fiduciary Funds - Private Purpose Trust Funds For the Fiscal year Ended June 30, 2017 Private Purpose Trust Funds Farrar Scholarship Fund Fund Total ADDITIONS Investment Earnings $ 85 $ 136 $ 221 Total Additions DEDUCTIONS Scholarship Awards 12,007 12,007 Medical Costs Total Deductions ,007 12,758 Change in Net Position (666) (11,871) (12,537) Net Position - Beginning 34, , ,883 Net Position - Ending $ 33,893 $ 88,453 $ 122,345 B-96

169 C'ity of Lewiston, Maine Exhibit 0-2 Combining Statement of Fiduciary Net Position Fiduciary Funds w Agency Funds June 30, 2017 Agency Funds School FrankUn Lewiston Holiday Activities Pasture Senior Citizens Parade Total ASSETS Cash and Cash Equivalents $ 439,9'50 $ 261,569 $ $ 205 $ Total Assets $ 439,950 $ 261,569 $ 27,438 $ 205 $ 729, 162 LIABILITIES Accounts Payable $ 104 $ 104 Accrued Payroll School Activities Payable $ 439, Franklfn Pasture Payable s Lewiston Seruor Citizens Payable ,066 Holiday Parade Committee Payable $ T otat Liabilities.$ 439,950 $ $ $ 205 $ B-97

170 City of Lew.isto_r:i, Maine Exhi bit D?3 School Activities Combining Statement of Changes in Assets and Liabilities Agency Funds For the Fiscal year Ended June 30, 2017 Bal~nce Balance 07/0t /2016 Additions Deletions 06/30/2017 Ass~ts Cash ana Cash Equivalents $ 425,1'84 $ 884,342 $ $ '0 Liabilities Payable to Student Groups 425, , , ,950 Total Liabilities $ 425, 184 $ 88'4,342 $ 869,576 $ 439,950 Franklin P(!sture Trustees Assets Cash and Cash Equivalef1ts $ 258,375 $ 3,194 $ 26'1;569 Liab11ftfes Payable to Franklin PastL1re Trust $ 258,375 $ 3,194 $ 261,569 L.ewiston Senior Citizens Assets Cash and Cash E.qulvalents $ 14,524 $.60,875 $ 4.7,961 $ 27,438 Uabifities Accounts Payable $ 395 $ 104 $ 395 $ 104 Accrued Payroll Payable to Lewiston Senior Citizens 14, ,875 47,923 27,066 Total Liabilities $ 14,524 $ 61.,247 $ 48,333 $ 27,438 Holiday Parade Assets Cash and Cash Equivalents $ 204 $ 1,500 $ 1,500 '$ 205 liabilities Payable to Holiday Parade Committee $ 204 $ 1,500 $ 1,500 $ 205 Social Security Client Program Assets Cash and Cash Equivalents '$ 17,002 $ 48,42~ $ 65.,431 ~ p Liabilities Gllent Disbursements Payable $ 17,002 $ 48,429 $ 65,431 $ 0 Total - Agency Funds Assets Cash and Gash Equivalents $ $ 998,341 $ 984,46 8 $ 729, 162 Total Assets $ 715,290 $ 998,34 1 $ 984,468 $. 729, 162. Liabilities Accounts Payable $ 3~5 $ 104 $ 3~5 $ 104 Accrued Payroll Payable to Student Groups , ,950 Payable to Franklin, Pasture 258,375 3, ,569 Payable to Lewiston Senior Citizens 14,115 60,875 47,923 27,066. Payable to Holiday Parade Committee 204 1,500 1, Client Disbursements Payable 17, ,431 0 Total l...labilities $ 715,;a9o $ $ 964.,.840 $ 729,1!;>2 B-98

171 STATISTICAL SECTION The City of Lewiston's statistical section presents detail trend information that supplements the users' understanding of the financial data in the financial statements. footnotes, and required supplementary information as it relates to the overall financial strength of the City. Financial Trends Tables 1-4, found on pages , contain trend information to help the user gain an understanding of how the City's financial performance and strength have changed over time. Revenue Capacity Information about the City's most significant revenue source, property taxes, and other sources can be located on Tables 5 and 6, or pages 108 and 109. Debt Capacity These tables provide information that allows the user to assess the affordability of the City's current levels of outstanding debt and the ability to issue additional debt in the future. Debt capacity tables are located on pages or Tables 7-9. Demographic and Economic Information Local demographic and economic statistics are presented on Table 10, or page 113. Information noted on this table helps facilitate the understanding of our local environment as it pertains to our financial activities. Operating Information Tables 11-13, located on pages , disclose service and infrastructure information to assist in the comparison of how the City of Lewiston's financial reports correlate with the services the City provides and activities performed. B-99

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173 City of Lewiston, Maine Table 1 NET POSITION BY CATEGOR.Y Last Ten Fiscal Years Govel'flmfllllff/ Activities Ne! lnvestrnent in.capital Assets Reslricte!'.l for: Recreation ancl Human SeNlces Debt Service Capital Proj.ects Perpetual Care Endowment f'::und EdtJcalion Unresvfoted Ne1 Position Total Governmental AcHviliE!$ Ne! Position BL!siness. Type Activities Net lrwe sted in Capital Assets Un,restric1~d Ne! Positiori Tol'a! Business-Type Aclivi!l.es Nel Position Prima;y Government Net lnvestmenl fn Cap\lal A$sels s 11' $ ,, 799 $ 6.738, ,286 23, ,607: 1, ,619JJ46 2.,4.37,538 5,664,246 (16, ) ( , ,665 38,833, ,365, ,243 47,198, : '41.3t7 Fiscal Year , S' $100,553,266.' s 98,0S0,353 $ '91, $ ,940 s 93,135,486' s 88;644,179 6,342,496 6,611,945 5,798,132 5,944,371 5,,839;864 7,542,483 a.405,42? 7,636, , 120 4, i 1 ;822:21.7 2, ,.726,269 2,492; ,t95 6,543,754 23, , , ,425 1, ,458 1,348.01'3 1, , ,629 1,2-33,000 2,505, ,348,228 3,823,905 Z,084,n7 (21,3$9,053) (27;987.n4) f22,622,23:3! (11, 165,253) (W,516,226) (17, } (25,363,2601 ( ,948) , , ,340 35,660,028 33,821,418 31,998, ,75'1 27,837,898 24, 177, , ,286 B, , ,206, ,963,882 1'5, ,163,513 n,2zs.oa ,785, , ' ' , ,185, ;374, ',0.88, ,112, ,099, , ,135,573 Restricted for; Recreation and Human Services Debt Service Capital Projects Perpetual Care Endowment fl,md Education Unre$l(icteq N!;lt Posl\lon 1'o~a l Prlma)'y Govern ment Nel'Posltion 6, , ,607 1,802,1i2 1,619,!146 2,43753'8 5,664,246!8,071,174) (11.456,011} $157,974,316 $ 155,.030,3'83 $ 6,342,496 6,$11, '5.94.4, , , 120 8, ,636,032 4,872', , ,726,269 2,492; ,195 '6,543,754 23, ' ,473 23,3& : ,,638; ,458 1,348., t.099, ,629 1,233.ooo 2,. 05, , ,557 2,084;7?7 (12,919,767) ~19,862,013) (14,734,999! 5.562,868' (3.5'52,344! (1, J69,73'~!!9, 199,747) (15.907,916) 145,.178,311 s 132, 133,402 $ ,216 $ ,299 s 138,538.,266 su2.oa1,1ss s $25 s ;203 B-101

174 B-102

175 Table 2 Fiscal Year s ,951 $ 10, s $ $ s 7.460,064 16,096,995 14,003, , , , ,677 16,363,859 20,807,401 13, ,081,077 1,271, , , , , ,596 1, ,527 1, ,631, ,952 3,461,371 3,608, , ,929 58,015,493 60,569,773 61, ,131,700 44,763,336 11,092,886 4,681,379 5,196,488 5,608,076 5,429,024 5, 135, ,784, ,675, , ,390, , ,373, ,960, 133 4,189,697 3,754,861 3,757, '.405 3, ,124,947 4,724,350 4,624,232 4,546',256 4,600,726 4,546,496 4,143,408 1, ,382, ; ,598 1,225,926 1,046,206 10,437, ,534 9, ,475,729 9,372,4.10 8,31 4, ,1 12, ,804, ,118, ,249, ,745, ,274, ,721 1,914,534 1,448,471 1,408,160 1,370, , ,158 1,162, ,377 1,256,058 1,402,349 1,354, ,968 1,343,402 1,092, ,983 1,156, , , , , ,694,985 52,180,117 53,353,911 50, , 180,177 43,168, ,423,315 3, ,622, , ,045 60,357,339 61, , , ,698 12, ,174 12, ,293, ,444 10,652, ,319 1,388,172 1,544,902 2, , , , 995,331 13,431,346 13,768,606 13,525,939 11,698, ,352,670 75,398,519 74,827,540 71,011,567 65,466,308 59,710,088 (61,318,023) (49,075,921 ) (55,331,997) (50, ) (54,605, 742) (59,799,435) 2.558,060 3,669,812 4,040,824 4,050,210 2,326,464 3,234,8'29 48,291,793 47,437,697 47, , ,088 44, ,140 i35, ,9($2 11 1, , ,228 3, , ,605 4, , , , , , , ,660,390 1,462,070 1,635, , ,868 4,187,759 4, 184,510 3,943,411 3,932, ,804 5,187, , ,957 1,104,533 1,055,001 1, ,909, , , , , , ,360,81)3 57,351, , ,233 54,380 19, , ,611 (548,748) (616,663) (673,57 ) (710,441 ) ( ) (821,935) ~ ) ~586,430 ) (619,195) {691,329) (704,765) (641,324) 59,100,652 58,134,044 57,741,668 56,660,489 58,280,899 57,498,081 (1, ) 9,644,553 3,028,866 7, ,379,921 (1,660,031 ) ,083,382 3,421,629 3,358,881 1,621,699 2, $ 340,689 $ 12,727,935 $ 6,450,495 $ 10,422,934 s 6,001,620 $ 933,474 B-103

176 Ct~ Of- LeWiston, Maine GOVERNMENTAL FUNDS FUND BALANCES L ast Ten Fiscal Years Genetal Fund: Nonspendable: Inventory $248,261.$273,593 $197,207 $180,924 Long-Term Note Receivable 784, , , ,000 Prepaid Expenditures 197, , Restricted for: School Education 1,790,711 A, , ,058 Assigned to: Asset Acquisition 21, ,690 21,830 Future General Fund Expenditures ,805, :392 Component Unit Subsequent Year's Expenditures Future Workers Comp. Expenditure s 1,116,221 1,093,207 1,453,497 1,341,370 Future Unemployment Comp. Expenditures Compensated Absences 1,"512, , ,071 Unasstgned , , ,,807 Total General Fund 24,310,206 25,326,460 19,846,776 19",050,984 All Other Governmental F~nds : Nonspendable; Special Revenue Funds 1,623,661 1;703,785 1,877, ,287 Permanent Flmds 1,218,385 l,218,385 1,2.18,385 1,216,'835 Restricted for: Capital Projects 4.872,789 Special Revenue Funds 5, , ,765 Permanent Funds 607, Debt Service Fund Ass1gneci to: Special Revenue Funds 345, , , ,493 Unassigned (6.159,244} (3,502,$82} ~420, 515) Tota.I All Other Governmental Funds 3,051,793 6,581,288 8,081,593 13,739,314 Total Governmental Funds $27,362,002 $31_,907,750 $27,928,370 $32.,790,299 Beginning with the year ended June 30, 2011, the City reported ~ovemmental fund balances in accordance with categori es 'defined in GASB No 54 Pr!oryears have been restated to reflect GASB 54 categories. B-104

177 Table 3 Fiscal Year $324,371 $ $580,511 $526,107 $419,446 $ ,000 1, ,000,000 1,000,000 t,000,000 79,507 1,71.5,737 2,678,516 1,211, ,7~4 8,963 55,000 55,000 55,, 000 1,839, , , ,7:46 603,939 1,067,521 1T5, , ,135 1,898,091 t,165,000 1,792,451 2,076,039 2,386,718 2,407,900 2,421,818 2,3 96,303 SQ, ,350 63,296 11, ,184 1,36.5, ,618 1,346, , 170 1, ,937,935 11,595,987 9,207,486 8,031,352 8,541,403 8,022,245 21,.131, ,539;038 17, ,825,502 16,312,152 14,594 ~880 1, ,336,5'.54 2,71.2,993 2,707,357 3;035,391 2,985,986 1,206,350 1,148,208 1, 148,208 1,111,217 1, ,137,428 11,822, ,325 4,726,269 2, , ,736,347 4,000,715 3, 189,756 4, , ,339, , , ,527 11,265 11, ,303 11,003, , , , , (68,318) (144,605~ 19, ,457,572 23,765,927 11,102,441 '13,551,475 15,435,542 S-40 ;881 ~850 $30,996,605 $41,069,536 $25~ 927,943 $29,863,627 $30,030,422 B-105

178 Cit)'. of Lewiston, Maine GOVERNMENTAL FUNDS Last Ten Fiscal Revenues Taxes $ 59,'885,818 $ 59,158,648 $ 57, $ ,941 Licenses ano Permits 407, , , ,015 Intergovernmental 69, , ,740, 144 Charges For Services 1, , ,21A ,398 Fines 192, , Interest. Rents and Gains 2,852,900 2,290, 107 2,021, Donations 285, , ,gn Misceflc;ineous 560, , , Total Revenues , ,944, EKpenditures Current General Government 8, , , ,262,405 Public Safety 13,876,063 12,.823, ,680,382 12, Public Works 6,689,83-7 5,971, ,704 7,129,282 Human Services 1.220,768 1,084, , Culture and Recreation 1,666,523 1, ,404,367 1,552,810 I ntergo11ernmental 3, , Q,698 3; Education 75,012,758 69,172,690 6~. 655,234 64,935,289 Nutrttion 3.7"19,712 3,540,121 3,093,917 2, Mtscellaneous 8,297,378 6, ,955,364 6,1-39,688 Debt Service: Redemption of Serial Bonds ,240 10,746,961 14,485, Interest on Bond Ant. Notes Interest on Serial Bonds 2,947,20.0 3,058, ,796,517 Capital Lease Debt 181, , , ,644 Bond Issuance Costs C.apltal Outlay , ,583 6,565,001 11,128,912 Total Expeodftures 148',218, ,448, , 276. ~ ,667 Excess (Deficiency) of Revenues Over (Under) ExpendltLrres (12.469,1 06) ( ) ( } (11.31'9,717) Other Financing Sources/(Uses) Transfers In 15, , ,356, ,191 Transfers Out (14.567,768) (15, 135,207) (18.885,085) l 16,245,035) Proceeds From Capital Lease lssuance_of Bond Anticipation Notes Redemption of Bond Ant Notes Premium from Bond Issuance 1,316, , Issuance of General Obligation Bonds , ,886,625 Redemption of Refunded Bond (3.,541,748) (4,182,302) (9,382,906) Issuance of Refunded Bonds 3, 155,000 3,995,000 8.,995,000 Total Other Financing Sour.ce (Uses) 7,923,356 4,124, ,917 3, Net Change in Fund Balances $ (4,545,750) $ 3,979,380 $ (4,861,932) $!8, ) Debt Services as a Percentage of Noncapital Expenditures 9.8% 10.9% 15.7% i2.0% B-106

179 lable 4 CHANGE IN FUND BALANCE Years Fiscal Year $ 53,734,557 $ $ 52, $ ,449 $ 50,988,225 "$ 49,359, , , , , , ,997 60,751,975 60, ,196,459 57,246,889 53,746,030 49,080,684 2, 180,207 2,947,749 2,341,240 2,593,555 2,370,396 2,387, , , , , ,128 2, 111,34'1 2, 116,005 2,223,301 2,029,096 2,235,383 2,829,328 10, , , , , , , , ,532 1, , ,070, ,917, , ,350 5,855,344 7,498,833 7,604,022 6,471,3'20 6, 170,962 8,677, ,823,001 11, , ,037,063 6,623,827 6,235,791 6,986,370 7,410,330 8,195, ,251 1, ,706 1, , ,619 1,608,515 1,648,175 1,713,642 1,879,000 1,857,948 1,865,611 3,691, ,498 3,521, " ,608,601 3, ,541,053 58,039,922 58, 170,565 58,745,376 54,301,915 51,782,514 2,511,394 2,570,702 2, ,294,884 2,06.0, ,307 6, ,217, ,947 5,459,117 5,694,280 11,119, , ,017 10,116, ,439, ,143 3,770,473 4,4.21,727 5,185,659 5,26d,880 4,889;391 4,231, , , , , , , , ,855 14,896, ,522, , ,285, ,231, ,847, ,763,415 (8A51.807) ( ) (9.367,434) (16.090,627) ( ) ( ) 14, , ,513, ,102 36,972,145 44,374,985 (14,311,630) (16.421,509) (16,840,197) (18, 104,660) (36, ) (43,553,049) 108, , , ,841 10,800,000 29,025,000 (20,225,000) (30,119,281) 2,937,872 16,721,400 2,584,000 13,835,452 10,741,917 26,787,080 13,073,279 (31.440,976) ( ,840) ( ) ( ) ( ) 29,570,000 2, 18~738 15,555,000 2,625, ,000 18,337,044 (8, ) 24,'50~9, , , ,774 $ 9,885,238 $ (10,072,929) $ 15,141,593 $ (3,935,685) $ (166,795) $ (7,304,291} 11 3% 12 7% 12.2'% 13.4 % 11.6% 10,3% B-107

180 Cit):'. of Lewiston, Maine f able 5 PROPERTY TAX LEVIES AND COUECTIONS Last Ten Fiscal Years Ratio of Ratio of Collections Collected in Total Tax Ase.al Tax TotalTa>t Colleered in in Leyy Year Subsequent Total Ta>t Collec(ions Vear Rate Levy Year of Levy to Tax Levy Yeats Collections io Tax Levy 2008' 24,60 S45,569.7~7 544, ,05% 51,344,985 S-45, % 2009' S47., ,8'21, % , , 145, % $47,125,353 $45,769,770 97_12% s1,211 t91 S47,040, % , 180,554 S46 785, % Si, , 175, % $ $45,946, % $1.294,742 $47 4'41,066 9R97% ,849,733 $46,712,891 97:62% $1, $47, 8Hl, % 2014' $50,004,815 S % S1,,33, ,86% 2015' $50,706,360 $49.!?37, % $979.~97 SS0,6 '16, % 2016~ $ $53,360, "/o $ $ % $ $53.615, % 553,815, % Note C1Jrrent taxes are due semiannually on September 15th and March 15th, With a 7% Interest :rate charged on taxes. outstanding,.after each respective due date. Ol1lstanding dellnquenr real estate taxes are subject to tax liens pursuant.to Stat~ Statutes. Includes st.ate hames1ead and business equipment tax: exemptions. Outstanding Delinquent Taxes 51,689 $84,392 $5,072 $15,521 $29,963 $67,901 $89,778 $ $1, Ratio of Delinquent Taxes to Tax levy 000% 0.00% 0.18% 0.01 % 003% 0.06% 0.14% O.HI% 0 84% 2,10% ASSESSED ANO ESTiMATEO ACTUAL VALUE OF TAXABLE PROPERTY Last Ten Fiscal Years Assessed Value Total Estimated Direct flscal Assessed Actual la.x Year Residential Commercial Industri al U.tilitJes Value Value Rate ,852 $ $208,138 S103,859 $1,820,119 $2,266,700 $ ,009 $1.021,<l,74 $533,030 $ $ $\, $2.499,2{)0 $ $1, $507,042 $182,434 S107,924 $1.826,900 S2.5S1,550 $ $ $ $.1134,302 $107,413 $1, $2.473,650 $24, $1,032,963 $ $195-,.358 $120,575 $1,832,361 52,334,250.$ $1, $492,757 $192,486 $141,702 $1.855.il60 $2, $24, $987,340 $512,320 $~13, 178 $ $ $2,196,750 $ $1, $ $200,535 $ $ 1,9P5.7(J3 $2,157,100 $25_ $1, $462,210 $200,535 $ $1,896,393 $2, $ $1,013,065 $458,460 $198,535 $ $1.89'3. 53~ $2, $26.25 Ratio of Assessed Value to Estimated Actual Value 60.30% 74 05% 70.77% 74,36% 78.50% 8118% 86.09% 88.35% 87 20% 85.95% Note: E!iilfmaled a_c:tval vatuallon amounts are the state eqvaft~ed vall1es pljbflstied by lhe Bureau of Property Taxa11on- Amounts expressed in thou.sands. B-108

181 City of Lewiston, Maine Table 6 DIRECT AND 'OVE~LAPPING PROPERTY TA>< RATES last Ten Fiscal Years Total Overlapping Total Fiscal City Education Direct Rate Tax Year Rate* Rate* Rate* Co.unty Govt. Rate* Water Rates Per Cubic Feet~* Sewer Rates Per Cubic Feet 2008 $14.79 $8.54 $23.33 $1.27 $ $14.62 $9.01 $23:63 $1.27 $ $,14.58 $9.02 $23.60 $1.30 $ $15.17 $8.97 $24.14 $1.26 $25AO 2012 $15.62 $8..91 $ $1.25 $ $15.62 $8.91 $24.53 $1.25 $ $'1,5.83 $9.39 $25.22 $1.22 $26A $15.83 $9.54 $25.37 $1.22 $ $16.04 $1CL08 $26.12 $1.2.5 $ $15.95 $10.30 $26.25 $1.29 $27.54.$33.60 $ $33.60 $ $33.60 $2.12-3'.51 $38.40 $2, $38.40 $ $45.60 $2. 12~3,51 $45,60 $2, $45.60 $ $45.60 $2. 12~3.51 $45.60 $2_ Tax rates are based upon $1,000 of assessed Vafue ~Water rates are based upon the first rate tler o.f thr.ee rate tiers. PRINCIPAL TAXPAYERS As of June 30, 2017 and Nine Years Ago Tax.payer Type of Bvsiness Assessed Valuat;on 2017 Percentage of Total Assessed Valuation.Asse~sed Valuation 2008 Percentage of Total Assessed Valuation Central Maine Power Brookfield Wal-Mart Stores l::ast LP Northerri Utilities. Lepage Bakeries TD Bank LL. Bean Gendron & Gendron Elmet Technology Lewistoh Prop. LLC Donald Toussaint Geiger Utility Utility Distribution Center Utility Bakery Banking Call Center Construction Metal/Wire Mfg. Real E'state Real Estate Specialty Item Mfg. Total $113,256,070 $87,034,850 $72,290,6SQ $ ,000 $20,541,670 $17,037,210 $12,579,760 $12,295,960 $10.616,450 $9,834,360 $378,473, % 4.ElO.% 3.82% 1.21% 1.08% 0.90% 0.66% 0.66% 0.56% 0.52% 19.99%,$31, 149,680 $56,376,280 $94,390,200 $14, $23, 102,970 $38,549,440 $12, 118, 12.0.$ ;600 $15.992,290 $10,797,61 b $320,706; % 3.10% 5.19% 0.82% 1.27% 2.12% 0'.67% 1.28% 0.88% 0.59% % Source: Clty of Lewiston Assessment Records B-109

182 C l~ of Lewiston, Maine Table 7 RATIOS OF OUTS TANDING oear BY TYPE Last Ten Fiscal Years Ratio of Bonded Total Debt to Percentage General To tal Water Sewer Stonn Business- Total Estimated of Fiscal Obligation Capital Governmental Revenue Revenue Water Type Primary Actual Personal Per Year Bonds Leases Activities Bonds.,.,.. Bonds... Bonc:ts - Activities Government Prop. Value ~- Income Capita 2008 $96,98 1,7 17 $421,007 $97 ;402' 724 $1 2',982,272,$7,479,068 S3,020,000 $23.481,340 $120,884, % 19.89% $3, $ 11 & $ ! ,924 S $ $26, $1 42,199, % 23.39% $ s 115,lf ,378, '17,235,118 $15, S $26.806!876 $ !% 23-70% S4, S130,2A2,592 S1 120,923 S131,363,515 St8,970,564. S9,d,jl 1,419 SS,624,700 S34.,036,683 S1'65,400, t % 2S.54% $4, ,314 $1, S ,306 $18,791,591 SI0.805,326 $7, S S149,353", tlfo 20,3SJ% $4, S'l20, $914,251 $ $19,416, 192 $12,065,572 $8.357, 161 $39.838,925 $161,742, % 22.09% $ $112,857,201 $:748,734 $ , ,481 $,13.834,395 S9,690,073 $43.821,949 $ % 21.50% S $98, 191,21'4 $576,073 $98,767,287 s 18, 703,923 $12,792,776 ss.ooo,s13 $ $13$', ,271l/n 19-02% $3, $91 124, $9.1, $17, $ S8.583,744 $38.635,479 St30, % 17 '78% SM ,231,835 S257,238 S88,48~, , $13, S8,S28,155 $40,940, ,429, % 1767% S3,537 Source The Federal 2000 Census used for years and the 2010 Census u.sed thereafter Personal Income was $ lhru FV2010, then S.20,014 used thereafter... Only 9011emmenta1 g_eneral obhgation bonds are paid rrom property taxes, 1nclu.des bond premiums and discounts wh.ere appllcable_ RA TlOS OF GENERAL BONDED DEBT OUTSTANDING Last Ten Fisca.I Years General Less Amounts Percentage of Fi scal Obligat1on Available in Debt Estimated Actual Per Year Bonds... Service.Fund Total Property Tax Value Capita ,717 $5.710,000 S91,271, % 52, ,230,906 so $ 11.S.230, % $ $115,856,173 so $115,856, % S $ l 30,242,59l S11,003,120 $ 119; % $3, $111, $0 $111,661, % S3; $120, $0 $120,989,562 5,29% $3, $112,857,201 $0 $1 '12,857,201 5_14% $3, , so $98,191, % $2, $9.1, ~ so $91, 124, % $2, $88, so $88,231,835 A.01% $2,411 Source: The Federal 2000 Census uaed for years and fhe Census used thereafter B-110

183 City of Lewiston, Maine Table 8 LEGAL DEBT MARGIN CALCULATION June 30, 2017 and for the Last Ten Fiscal Years Total Estimated Actual Valuation Per State Legal Debt Margin Limit of 15% of Estimated Actual Valuation $ 2,203, $ ,000 Debt Applicable to Debt Limit: Principal Percentage Amount Debt Applicable to Applicable to Purpose Legal Maximum Outstanding the City the City Direct Debt Reg_afd with Prog_ertv Taxes: Municipal 7.5% $ ,000 $47,172, % $47,172,697 School 10.0% $220,300,000 $37, % $37, $84,805,145 Overlag_g_ing_ Debt: L.A. Water Pollution Control Authority $18,910, % $10.935,833 LA Committee $19,800 50% $9,900 Total $385,525,000 $ Total Bonded Debt Applicable to Debt Limit $95,750,877 Legal Debt Margin $234,699, 123 Debt Reg_aid wit11 User Fees: Water 3.0% $66,090,000 $18,301, % $18, 301,461 Sewer 7.5% $165,225,000 $13, % $13,226,981 Storm Water 7.5% $165,225,000 $8,482, % $8.482,731 Note: Statutory debt limit is in accordance with.30 MRSA, Section 5061, as amended. For overlapping debt, the City's portion reflects the required funding percentage as outlined in the interlocal agreement. Total Debt Legal Total Debt Applicable Debt Applicable Debt to the Limit as a Fiscal Year Limit to Limit Margin Percentage of Debt Limit 2008 $340,005,000 $102,281,092 $272,598, % 2009 $374,880,000 $120,504,440 $266,728, % 2010 $387,232,500 $120,391,434 $250,656, % $371,047,500 $135,698,461 $214, % 2012 $350,137,500 $123,955,690 $218,854, % 2013 $342,810,000 $129,891,423 $199,621, % 2014 $329,512,500 $121,638, 149 $201,926, % 2015 $323,565,000 $106,498,871 $217,066, % 2016 $ ,000 $100,243,708 $225, % B-111

184 City of Lewiston, Maine Table 9 REVENUE BOND COVERAGE Last Ten Fiscat Years Net Revenue Available Fiscal Gross Operating for Debt Debt Service Reguiremeht$ Year Revenues 'Expenses Service Principal Interest Total Coverage Water Enterpris~ Fund: 2008 $41153,509' $1., $2,377,028 $1,092,23'5 $530,308 $1,622, % 2009 $4,166,609 $2,240,678 $1,925,931 $1,096,923 $531,569 $1,628.,492 11'8% 2010 $4, $2,116,813 $.1,894,836 $1,230,372 $047,534 $1 J77, % 2011 $4, $2, $2,176,127 $1,277,461 $ $1,813, % 2012 $4,593,604 $2;213,079 $2,380,525 $1,404,788 $592,243 $1,997, % 2013 $4,547,881 $2, $1, $1,432,327 $496,648 $1,928, % 2014 $5,362,908 $2,962,343 $2,400,565 $ 1,523,904 $526,Q95 $2,049, % 2015 $5,39'3, 146: $2,864,030 $2,529;116 $1,580,379 $526,191 $2, 106, % 2016 $5,391,606 $2,708,955 $2,6S2,651 $1,589,074 $475,3-13 $2,064, % '2017 -$5,448,327 $2,727,388 $2,720,939 $1.586,264 $485,092 $2,071, % Sewer Enterprise F1.,md: 2008 $4,421, 191 $3, $969,769 $550,510 $279,024 $829, % 2009 $4,577,420 $3,808,835 $768,585 $563,349 $322,951 $886,300 87% 2010 $5,182,5.87 $3,806,605 $1,375,982 $588,400 $325,234 $913, % 2Q11 $5,42.8,221 $3,753,516 $1, $531,867 $ $826, % 2012 $5,184,843 $3,700,612 $1,484,231 $664,379 $347,201 $1,011, % 2013 $5, 194,399 $3, $1,462,608 $ $328,333 $1,090, % 2014 $5, $3,667,686 $1,482,886 $871,274 $370,,496 $1,241, % $5,104,783 $3, 772,5.38 $1, $1,057,706 $~70, 903 $1,428,609 93% 2016 $5,061,250 $3,855,454 $1.205,796 $1.087,840 $355,953 $1,443,793 84% 2017 $5,969,042 $4,12.1,075 $1,847,967 $1,052,300 $376,629 $1,428, % Storm Water Enterprise Fund: 2008 $2,100,793 $832,674 $1,268,119 $160,000 $81,958 $ % 2009 $2, 135,082 $1,107,063 $1,028,01.9 $171,500 $136,578 $308, % 2010 $4,099,42S. $1,121,537 $977,888 $201,093 $148,329 $349, % 2011 $2,275,124 $1,106,683 $1,168,441 $208,937 $161,33.4 $370, % 2012 $2,264,727.$ $1,267,662 $327, 312 $ $529, %.2013 $2,5.44,732 $1,047,463 $1, $ $216,647 $631, % 2014 $2,567,901 '$1,014,900 $1,553,001 $596,590 $263.,247 $859, % 2015 $2,565,015 $1',113,082 $1,451,933 $752,383 $253,649 $1,006, % 2016 $2,604;641 $1,218,576 $1,386,065 $756,643 $248,987 '$1,004, '% 2017 $2.,614,835 $1.192,639 $1.422,196 $698, 28~ $247,078 $945, % NOTE: Operating expenses are exclusive of depreciation. B-112