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Council Packet 09/27/2010
6:30 p.m. Pre-Meeting CITY COUNCIL MEETING CITY OF WHEAT RIDGE, COLORADO 7500 WEST 29TH AVENUE, MUNICIPAL BUILDING September 27, 2010 7:00 p.m. Individuals with disabilities are encouraged to participate in all public meetings sponsored by the City of Wheat Ridge. Call Heather Geyer, Public Information Officer, at 303-235-2826 at least one week in advance of a meeting if you are interested in participating and need inclusion assistance. CALL TO ORDER PLEDGE OF ALLEGIANCE ROLL CALL OF MEMBERS APPROVAL OF MINUTES OF September 13, 2010 PROCLAMATIONS AND CEREMONIES Domestic Violence Prevention Month Walk to School Day CITIZENS’ RIGHT TO SPEAK a. Citizens, who wish, may speak on any matter not on the Agenda for a maximum of 3 Minutes and sign the Public Comment Roster. b. Citizens who wish to speak on Agenda Items, please sign the GENERAL AGENDA ROSTER or appropriate PUBLIC HEARING ROSTER before the item is called to be heard. APPROVAL OF AGENDA DECISIONS, RESOLUTIONS, AND MOTIONS 1. Motion to accept the 2009 Comprehensive Annual Financial Report (CAFR). 2. Motion to approve the annual Police Radio System contract payment to the West Metro Fire Protection District in the amount of $88,586 for Police Radio System Services. CITY COUNCIL AGENDA: September 27, 2010 Page -2-DECISIONS, RESOLUTIONS, AND MOTIONS (con't) 3. Resolution 50-2010 -amending the Fiscal year 2010 General Fund Budget to reflect the approval of a Supplemental Budget appropriation in the amount of $57,782 for the Abatement of Outstanding Property Damage from the July 2009 Storm. 4. Motion to approve the Annual Renewal of the Microsoft Enterprise Agreement (EA) Program in the amount of $60,838.56 to Insight. 5. Motion to approve the renewal of the Geographic Information System (GIS) Enterprise License Agreement with Environmental Systems Research Institute, Inc. (ESRI) in the amount of $35,750 for one year. CITY MANAGER'S MATTERS CITY ATTORNEY'S MATTERS ELECTED OFFICIALS' MATTERS ADJOURNMENT to STUDY SESSION CITY OF WHEAT RIDGE, COLORADO September 13, 2010 Mayor DiTullio called the Regular City Council Meeting to order at 7:00 p.m. Council Members present: Karen Adams, Joseph DeMott, Tracy Langworthy, Davis Reinhart, Wanda Sang, and Mike Stites. Also present: City Clerk, Michael Snow; City Manager, Patrick Goff; Director of Community Development, Kenneth Johnstone; Interim Director of Administrative Services, Heather Geyer; Planner, Sarah Showalter; staff; and interested citizens. Council Members Karen Berry and Joyce Jay were absent. APPROVAL OF MINUTES OF August 9,2010 & August 23,2010 Motion by Mr. Reinhart for approval of the Minutes of August 9, 2010 and August 23, 2010; seconded by Mrs. Sang; carried 6-0. PROCLAMATIONS AND CEREMONIES Census Bureau presentation of plaque for City/Recreation Center assistance for 2010 Census Larry Mutler of the Census Bureau presented Council and the City of Wheat Ridge with a plaque thanking the City for their support in the census efforts. National Active Aging Week Karen Karen Ruiz was present to accept the proclamation, read by Mrs. Wheat Ridge, Karen Thaler. CITIZENS' RIGHT TO SPEAK Public Input on 2011 Budget No citizens were present to speak. City Clerk Michael Snow read into the record written testimony submitted to the City Clerk's Office from Nancy Snow. The following were Mrs. Snow's comments: Because /am unable to come to the Council meeting tonight to speak on next year's budget, I ask that the following comments be entered into the record. One: Regardless of the results of the November election on the issue of changing the current form of city government, I would like to express my opinion that this City City Council Minutes, September 13, 2010 Page 2 does not need a city manager/or administrator making over $125, 000 a year AND an Assistant City Manager/Administrator also making about the same amount of salary. This is a small city which has changed only slightly in size since its incorporation, and one professional city manager or administrator -whatever the title -is sufficient. Two: Please refrain from any more expenditure for consultants. The amount spent for consultants in the past two years is excessive. Signed: Nancy Snow APPROVAL OF AGENDA Motion by Mrs. Sang to add Item 5 to the Agenda, a Resolution Beginning a CityInitiated Rezoning of Properties Located at the Southeast Corner of 44th Avenue and Wadsworth Boulevard to Mixed Use -Commercial; seconded by Mr. DeMott; carried 6-O. City Clerk Michael Snow assigned Resolution 55-2010 to Item 5. 1. CONSENT AGENDA A. Resolution 51-2010 -amending the Fiscal Year 2010 General Fund Budget to reflect the approval of a Supplemental Budget appropriation in the amount of $2,760 for the renewal of the WRTV8 Scheduling Software. B. Resolution 54-2010 -amending the Fiscal Year 2010 General Fund Budget to reflect the approval of a Supplemental Budget Appropriation for additional contract building inspections related to damage from the July 20, 2009 storm to Building Code Services International in the amount of $30,600. C. Motion approving payment to Murray Dahl Kuechenmeister & Renauld, LLP for Legal Service Fees incurred in August, 2010 in the amount of $17,193.93. Consent Agenda was introduced and read by Mrs. Langworthy. Motion by Mrs. Langworthy for approval of the Consent Agenda; seconded by Mrs. Sang; carried 6-0 City Council Minutes, September 13, 2010 Page 3 PUBLIC HEARINGS AND ORDINANCES ON SECOND READING 2. Council Bill 16-2010 -amending Chapter 26 of the Code of Laws concerning the creation of Mixed Use Zone Districts (Case No. ZOA-09-07). Mayor DiTullio opened the public hearing. Council Bill 16-2010 was introduced on second reading by Council Member Stites. City Clerk Michael Snow assigned Ordinance No. 1471 . Mr. Johnstone and Ms. Showalter presented the staff report. Bill Mahar spoke on behalf of LiveWell Wheat Ridge, who has participated in the Mixed-Use Zone planning process and funded the Mixed-Use Zone website. Mr. Mahar indicated they have received numerous positive responses to the potential of investment and revitalization of the 38th Avenue and Wadsworth corridors and believes this is the right time for Wheat Ridge to adopt a progressive and attractive land use planning zone. He encouraged the City Council to adopt the proposed Mixed-use Zone District and submitted to Council a memo in favor of the proposal (amended to this packet). Dana Oehm, member of the Active Communities Task Force, also spoke in favor of the proposed Zone District adoption. Mrs. Oehm believes Mixed-Use zoning is shown in the research to affect positively the interest for reinvestment and redevelopment in a community and that this is one of the things necessary for Wheat Ridge to see the changes they wish in their community. Denise Waddell who served on the Mixed-Use Zoning Task force as a Wheat Ridge business and property owner, was impressed with the level of professionalism employed in developing the proposed Zoning Districts. She believes, to remain competitive, Wheat Ridge must have consistent, predictable zoning guidelines to replace the decades old standards that exist today. Mrs. Waddell submitted to Council a letter from the Wheat Ridge 2020 Executive Board in favor of the Zone District (amended to this packet). Bruce McLennan also served on the Task Force as a consultant with MCNN Architects. He commended staff for involving experts such as his firm early in the process of designing of the zone districts, which benefits the quality of the project. He also believes this Mixed-Use Zone district incentivizes good development without stifling creativity, creates more opportunities for incentives and allows market forces to dictate the development potential. City Council Minutes, September 13, 2010 Page 4 City Clerk Michael Snow read and entered into the record the following written comment submitted to the City Clerk's Office from Nancy Snow. The following were Mrs. Snow's comments: Because I am unable to attend tonight's council meeting and the hearing on adoption of regulations for the Mixed Use Districts, I would like the following comments to be entered into the record: As you all know, I was adamantly opposed to the removal of height and density limits from the Charter. For that reason, you may well think that my opinion is an isolated one, since the majority of voters did approve the change. However, I have talked to many people both before and since the election, and I have not heard anyone express an opinion that they wanted, or envisioned, buildings as high as 122 feet. In fact, it was common for people advocating the change to reassure prospective voters that no one was proposing buildings as high as 100 feet, that what was needed and desired was just a few more stories to be competitive. Once again, it seems that hired consultants have come up with a proposal for buildings far higher than anyone but developers want. I would encourage someone on the Council to scale back several stories from the current written proposed ordinance. Mayor DiTullio closed the public hearing. Motion by Mr. Stites to approve Council Bill 16-2010 (Ordinance 1471) on second reading and that it take effect 15 days after final publication; seconded by Mrs. Sang; carried 6-0. DECISIONS, RESOLUTIONS, AND MOTIONS 3. Resolution 52-2010 -opposing Proposition 101 and Amendments 60 and 61 and asking voters to educate themselves on the devastating impact these measures will have on the ability of their Governmental Agencies to provide essential services and programs. Resolution 52-2010 was introduced and read by Council Member Mr. Reinhart. Motion by Mr. Reinhart to approve Resolution 52-2010; seconded by Mrs. Langworthy; carried 5-1 with Mr. DeMott voting No. City Council Minutes, September 13, 2010 Page 5 4. Resolution 53-2010 -authorizing assignment to the Colorado Housing and Finance Authority of a Private Activity Bond allocation of the City of Wheat Ridge pursuant to the Colorado Private Activity Bond Ceiling Allocation Act. Mayor DiTullio opened the public hearing. Resolution 53-2010 was introduced by Council Member DeMott. Mr. Goff presented the Staff Report. No one was present to speak. Mayor DiTullio closed the Public Hearing. Motion by Mr. DeMott to approve Resolution 53-2010; seconded by Mr. Stites; carried 6-0. 5. Resolution 55-2010 -Beginning a City-Initiated Rezoning of Properties Located at the Southeast Corner of 44th Avenue and Wadsworth Boulevard to Mixed UseCommercial Resolution 55-2010 was introduced by Council Member Sang. Motion by Mrs. Sang to approve Resolution 55-2010; seconded by Mr. Reinhart; carried 6-0. CITY MANAGER'S MATTERS Mr. Goff congratulated and commended staff on receiving two first place CML Sawy Awards this year, one for the Police Department's Hold Up program on Channel 8, the second for the Business Education Series Training (BEST), developed by former Economic Development specialist, Ryan Stachelski. Mr. Goff announced the City's partnering with Exempla Lutheran Medical and the Drug Enforcement Agency (DEA) for a Prescription Take-Back Day to be held September 25, 2010 enabling residents to anonymously drop off unused and unneeded prescriptions between 10-2pm. Please contact Police Department or consult the City website for more information. ELECTED OFFICIALS' MATTERS City Clerk Michael Snow informed voters of where to get information on the many ballot initiatives that will be on this Novembers' ballot. The State's "Blue Book" will provide summaries of state-wide ballot questions, while the County's beige book will provide summarjes of TABOR related or tax related ballot questions. However, the three local, City Council Minutes. September 13. 201 0 Page 6 City of Wheat Ridge ballot questions. which are not TABOR related. will not be included in either of these booklets. For information on these, voters should consult their local newspapers and look for publications from the organizations in support of or in opposition to the ballot questions. Council encouraged citizens to sign up and participate in this year's Farmer's 5000 Running Race on September 19. Runners interested in participating may register and obtain information online at www.farmers5000.org . ADJOURNMENT Meeting adjourned at 8:10p.m. (' I .:n Michael Snow, City Clerk APPROVED BY CITY COUNCIL ON September 27, 2010 BY A VOTE OF __ to __ Davis Reinhart, Mayor pro tern The preceding Minutes were prepared according to §47 of Robert's Rules of Order, i.e. they contain a record of what was done at the meeting, not what was said by the members. Recordings and DVD's of the meetings are available for listening or viewing in the City Clerk's Office, as well as copies of Ordinances and Resolutions. _ r City of , WheatRL-dge lTEMNO: 1-DATE: September 27, 2010 REQUEST FOR CITY COUNCIL ACTION TITLE: MOTION TO ACCEPT THE 2009 COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR) o PUBLIC HEARING BIDS/MOTIONS o RESOLUTIONS QUASI-JUDICIAL: o ORDINANCES FOR 1 ST READING o ORDINANCES FOR 2ND READING DYES NO Director . (L .. City Manager EXECUTIVE SUMMARY: Section 10.15 of the Municipal Charter for the City of Wheat Ridge requires that an independent audit be performed annually of all City accounts. The CPA firm of Swanhorst & Company, LLC performed the audit of the City's financial statements for the year ended December 31, 2009. As is reported in the attached Management Letter from Swanhorst & Company, the following conclusions were reached from the audit: 1. "We noted no transactions entered into by the City during the year that were both significant and unusual, and of which, under professional standards, we are required to inform you, or transactions for which there is a lack of authoritative guidance or consensus." 2. "We evaluated the key factors and assumptions used to develop the estimates in determining that they are reasonable in relation to the financial statements taken as a whole." 3. "We provided management with a schedule of audit adjustments. Management has determined that a significant adjustment to the Wheat Ridge Urban Renewal Authority's accounts records to report the land held for resale at estimated market value. Because it is held for resale, it must be reported at market value, which will require the City to continuously evaluate the carrying of the property. Council Action Form September 27, 2010 Page 2 4. "We are pleased to report that no such disagreements [with management] arose during the course of the audit." 5. "We encountered no significant difficulties while performing our audit." A representative from Swanhorst & Company will be at the September 27, 2010 City COlmcil meeting to present the 2009 CAFR to City Council for acceptance. ISSUE: For the year ended December 31 , 2009, the auditors have made the following recommendations: I. "The City maintains several subsidiary accounting systems, including the Recreation Center and sales tax. We identified differences in the amounts reported from these systems and the general ledger system. Although the City periodically compares these subsidiary systems to the general ledger, these reviews are not consistently performed. We recommend the City evaluate its accounting personnel and systems to ensure that internal controls are adequate to detect errors and fraud. Reconciliations to subsidiary systems should be performed in a timely manner, and any differences should be resolved immediately. 2. We have provided a separate memorandum to management with the suggestions for implementing the system security throughout the City. Our recommendations include limiting unnecessary employee access to systems, securing customer data and documenting a disaster recovery plan. 3. The City utilizes various brokers to purchase U.S. Agency securities. As we mentioned last year, in some cases the broker also holds the securities on behalf of the City. While this may not present a significant risk to the City, the investments would be safer if they were held by a third part custodian, rather than the broker that purchased the investment security. 4. We have mentioned in the past years that the City has a decentralized system for administering grant awards. As a result, accounting personnel are not always aware that the City has received grants, which could lead to noncompliance with the applicable laws and regulations. Especially because the City is expecting to receive several grants in the next fiscal year, we recommend that the City strengthen its internal controls over the identification and monitoring of grant awards. 5. The City reported expenditures of approximately $107,000 for a parks project to the Conservation Trust Fund and also to the County's Open Space Program for reimbursement. This error seems to be a result of the decentralized process for monitoring these programs, similar to the grants mentioned above. 6. As we discussed last year, the City continues to use purchasing cards to purchase gift cards for employees. We recommend that the city discontinue the purchase of gift cards using purchasing cards, and reflect this requirement in its written Council Action Form September 27,20 I 0 Page 3 policies. In addition, procedures should be implemented to detect employee compensation to ensure the City in complying with Federal regulations. 7. The City's liability for unused employee vacation time has increased over several years, to a balance of over $1 million at December 31 , 2009. The City may want to evaluate the policies in place to determine if they are reasonable and beneficial to the City. 8. For the year ended December 31, 2011 , the City will be required to adopt new accounting standards that require additional classifications of fund balance to be reported in the financial statements. These classifications include the City Council's future plans and commitments. In addition, reporting separate funds will not be allowed unless their revenues derive from a restricted or committed source. This may require the City to discontinue using certain funds, such as the Equipment Replacement Fund. Management should begin planning for these new standards since the budget will require changed in advance of adopting the standards, and City policies may require revisions." PRIOR ACTION: None BACKGROUND: None FINANCIAL IMPACT: The contract for audit services with Swanhorst & Company, LLC is for an amount not to exceed $21 ,500 which was budgeted as part of the 20 I 0 budget. RECOMMENDED MOTION: "I move to accept the 2009 Comprehensive Annual Financial Report from Swanhorst & Company, LLC." Or, "I move to postpone indefinitely the acceptance of the Financial Report from Swanhorst & Company, reason(s) " REPORT PREPARED AND REVIEWED BY: Linda Stengel, Accounting Supervisor Heather Geyer, Interim Administrative Services Director Patrick Goff, City Manager A TT ACHMENTS: I. 2009 CAFR 2009 Comprehensive Annual LLC for the following COMPREHENSIVE ANNUaL FINaNcIaL REPORT CITY OF WHEAT RIDGE, COLORADO FINANCIAL STATEMENTS December 31, 2009 TABLE OF CONTENTS PAGE INTRODUCTORY SECTION Directory of City Officials FINANCIAL SECTION Independent Auditors’ Report Management’s Discussion and Analysis i -ix Basic Financial Statements Statement of Net Assets 1 Statement of Activities 2 Balance Sheet -Governmental Funds 3 Statement of Revenues, Expenditures and Changes in Fund Balances -Governmental Funds 4 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 5 Notes to Financial Statements 6 -16 Required Supplementary Information Budgetary Comparison Schedule -General Fund 17 Budgetary Comparison Schedule -Recreation Center Operating Fund 18 Notes to Required Supplementary Information 19 Combining and Individual Fund Financial Statements and Schedules Combining Balance Sheet -Nonmajor Governmental Funds 20 Combining Statement of Revenues, Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds 21 Budgetary Comparison Schedule -Open Space Fund 22 Budgetary Comparison Schedule -Police Investigation Fund 23 Budgetary Comparison Schedule -Municipal Court Fund 24 Budgetary Comparison Schedule -Richards/Hart Improvement Fund 25 TABLE OF CONTENTS (Continued) PAGE FINANCIAL SECTION (Continued) Combining and Individual Fund Financial Statements and Schedules (Continued) Budgetary Comparison Schedule -Conservation Trust Fund 26 Budgetary Comparison Schedule -Equipment Fund 27 Budgetary Comparison Schedule -Crime Prevention Fund 28 Budgetary Comparison Schedule -Capital Projects Fund 29 Balance Sheet -Component Unit 30 Statement of Revenues, Expenditures and Changes in Fund Balance -Component Unit 31 Budgetary Comparison Schedule -Wheat Ridge Urban Renewal Authority 32 COMPLIANCE SECTION Local Highway Finance Report 33 -34 INTRODUCTORY SECTION CITY OF WHEAT RIDGE, COLORADO CITY OFFICIALS December 31, 2009 MAYOR Jerry DiTullio CITY COUNCIL District 1 District 2 District 3 District 4 Karen Berry Joyce Jay Karen Adams Joseph DeMott Davis Reinhart Wanda Sang Mike Stites Tracy Langworthy CITY CLERK Michael Snow MUNICIPAL JUDGE Christopher Randall CITY TREASURER Larry Schulz CITY ATTORNEY Gerald Dahl CITY MANAGER Randy Young DEPUTY CITY MANAGER Patrick Goff ACCOUNTING SUPERVISOR Linda Stengel DIRECTOR OF COMMUNITY DEVELOPMENT Kenneth Johnstone DIRECTOR OF PARKS & RECREATION Joyce Manwaring DIRECTOR OF PUBLIC WORKS Timothy Paranto CHIEF OF POLICE Daniel G. Brennan HUMAN RESOURCE MANAGER Karen Croom PURCHASING AND CONTRACTING AGENT Linda Trimble FINANCIAL SECTION --s-&C Swanhorst & Company LLC Certificd Public Accountants Honorable Mayor and Members of the City Council City of Wheat Ridge Wheat Ridge, Colorado INDEPENDENT AUDITORS' REPORT We have audited the accompanying financial statements ofthe governmental activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Wheat Ridge as of and for the year ended December 31,2009, which collectively comprise the basic financial statements of the City of Wheat Ridge, as listed in the table of contents. These financial statements are the responsibility of the City of Wheat Ridge's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information ofthe City of Wheat Ridge as of December 31,2009, and the respective changes in financial position for the year then ended in conformity with accounting principles generally accepted in the United States of America. The management's discussion and analysis and required supplementary information listed in the table of contents are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation ofthe supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose offorming opinions on the financial statements that collectively comprise the City of Wheat Ridge's basic financial statements. The combining and individual fund financial statements and schedules and local highway finance report listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we express no opinion on it. 8w~1~ August 9,2010 8400 E. Crescent Parkway • Suite 600 • Greenwood Village, CO 80111 • (720) 528-4306 Fax: (720) 528-4307 i Management’s Discussion and Analysis As management of the City of Wheat Ridge, we offer this narrative overview and analysis of the financial activities of the City of Wheat Ridge for the fiscal year ended December 31, 2009. Please read it in conjunction with the City’s financial statements, which follow this section. Financial Highlights The assets of the City of Wheat Ridge exceeded its liabilities at the close of fiscal year 2009 by $73.1 million (net assets). Of this amount, $13.0 million (unrestricted net assets) may be used to meet the City’s ongoing obligations to citizens and creditors. At the close of fiscal year 2009, the City of Wheat Ridge’s governmental funds reported combined ending fund balances of $16.6 million, an increase of $1,305,008 in comparison with the prior year. Approximately 83%, $13.7 million is available for spending at the government’s discretion (unreserved fund balance). At the end of the fiscal year 2009, unreserved fund balance for the general fund was $7.6 million, or 33% of total general fund expenditures. General fund actual revenues were $592,095 less than final budgeted revenue for the fiscal year 2009 and actual expenditures were $2.0 million less than final budgeted expenditures. Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to the City of Wheat Ridge’s basic financial statements. The basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements report information on all activities of the City and its component unit (Wheat Ridge Urban Renewal Authority). The statement of net assets includes all of the City’s assets and liabilities. All of the current year’s revenues and expenses are accounted for in the statement of activities regardless of when cash is received or paid. The statement of net assets presents information on all of the City of Wheat Ridge’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City of Wheat Ridge is improving or deteriorating. The statement of activities presents information showing how the City of Wheat Ridge’s net assets changed during fiscal year 2009. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses reported in this statement for some items ii will result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). The government-wide financial statements include not only the City itself, but also a legally separate Urban Renewal Authority for which the City is financially accountable. The governmental activities of the City include general government, community development, police, public works, and parks and recreation. Fund financial statements. The fund financial statements provide more detailed information about the City’s most significant funds – not the City as a whole. Funds are accounting devices that the City uses to keep track of specific sources of funding and spending for particular purposes. Some funds are required by State law and bond covenants. The City Council establishes other funds to control and manage money for particular purposes (like the Recreation Center Operating Fund) or to show that it is properly using certain taxes and grants (like the Conservation Trust Fund). The City has one type of fund: Governmental funds – All of the City’s basic services are included in governmental funds, which focus on (1) how cash and other financial assets can readily be converted to cash flow in and out and (2) the balances left at year-end that are available for spending. Consequently, the governmental funds statements provide a detailed short-term view that helps determine whether or not there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. Because this information does not encompass the additional long-term focus of the government-wide statements, additional information at the bottom of the governmental funds statement, or on the subsequent page, is provided to explain the relationship (or differences) between them. Financial Analysis of the City as a Whole Net assets. As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. In the case of the City of Wheat Ridge, assets exceeded liabilities by $73,076,551 at the close of the 2009 fiscal year. By far the largest portion of the City of Wheat Ridge’s net assets (79%) reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment). The City of Wheat Ridge uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. An additional portion of the City of Wheat Ridge’s net assets (3%) represents resources that are subject to external restrictions on how they may be used (open space and parks, police investigations, crime prevention activities, government access channel and iii emergency reserves). The remaining balance of unrestricted net assets ($12,916,288) may be used to meet the City’s obligations to citizens and creditors. At the end of the current fiscal year, the City of Wheat Ridge is able to report positive balances in net assets for the City as a whole, as well as for its governmental funds as a whole. The same situation held true for the prior fiscal year. City of Wheat Ridge Net Assets 2009 2008 Current and other assets $18,800,422 $17,483,800 Capital assets $57,744,171 $57,114,384 Total assets $76,544,593 $74,598,184 Long-term liabilities outstanding $1,239,448 $1,200,436 Other liabilities $2,228,594 $2,216,980 Total liabilities $3,468,042 $3,417,416 Net assets: Invested in capital assets, net of related debt $57,744,171 $57,114,384 Restricted $2,416,092 $2,063,539 Unrestricted $12,916,288 $12,002,845 Total net assets $73,076,551 $71,180,768 Governmental Activities Changes in Net Assets Governmental activities. Governmental-type Activities increased the City’s City’s total net assets by $1.9 million primarily due to an increase of cash and investments. Significant budget reductions were implemented in 2009 due to the downturn in the economy. Unrestricted net assets increased by approximately 8.0% in 2009. iv City of Wheat Ridge Changes in Net Assets 2009 2008 Revenues Program Revenues Charges for services $5,406,546 $5,502,327 Operating grants and contributions $1,786,495 $1,754,369 Captial grants and contributions $3,858,364 $1,442,690 General Revenues Property taxes $778,465 $771,625 Sales taxes $14,504,415 $15,295,307 Use taxes $3,206,385 $4,264,325 Franchise taxes $1,171,307 $1,329,589 Other taxes $1,298,636 $1,421,950 Investment earnings $321,687 $508,282 Miscellaneous $1,055,982 $744,815 Total revenues $33,388,282 $33,035,279 Expenses General Government $8,884,981 $11,151,817 Community Development $1,033,264 $733,282 Police $8,499,092 $8,696,675 Public Works $6,565,658 $7,620,533 Parks and Recreation $6,509,504 $6,057,482 Total expenses $31,492,499 $34,259,789 Increases in net assets $1,895,783 -$1,224,510 Net assets, beginning $71,180,768 $72,405,278 Net assets, ending $73,076,551 $71,180,768 Governmental Activities Capital grants and contributions increased by about $2.4 million primarily due to the value of land dedicated to the City by Cabelas and Jefferson County for the Crossing at Clear Creek project. Sales tax revenue decreased by about $790,892 due to national recession and decrease in local spending. Use tax revenue decreased by approximately $1.0 million primarily due to one-time use tax revenues from the Lutheran Hospital expansion project in 2008. Investment earnings decreased by about 37% due to the decrease in interest rates. Miscellaneous revenues increased by approximately 42% due to a one-time reimbursement from CIRSA for damage caused by the July 20, 2009 storm to City vehicles and buildings; reimbursement from Jeffco 911 for police department cell phone expenses; AT&T rent for tower rent; and an increase of reimbursements for Workman’s Comp claims. General Government expenses include budgets for the City Treasurer, Legislative Services, Finance, City Manager, City Attorney, City Clerk’s Office, Municipal Court, Administrative Services, Human Resources, Sales Tax, Purchasing and Contracting, Information Technology and Central Charges. v Total expenses decreased by about $2.8 million primarily due to a directive from the City Manager to identify all discretionary spending which could be cut from the 2009 General Fund budget. Reductions of $2.5 million in appropriations were made, resulting in a net reduction of $1.4 million to the City’s 2009 budget. Revenues by Source -Governmental Activities Other taxes 4%Investment earnings 1% Miscelleneous 3% Capital grants and contributions 12% Charges for services 16% Property taxes Sales taxes 2% 43% Use taxes 10% Operating grants and contributions 5% Franchise taxes 4% vi Expenses and Program Revenues -Governmental Activities $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 $10,000,000 General Government Community Development Police Public Works Parks and Recreation Expenses Program Revenues Financial Analysis of the City’s Funds The focus of the City of Wheat Ridge’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Wheat Ridge’s financing requirements. In particular, unreserved fund balance may serve 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 fiscal year 2009, the City of Wheat Ridge’s governmental funds reported combined ending fund balances of $16.6 million, an increase of $1,305,008 in comparison with the prior year. Approximately 83% of this total amount ($13.7 million) constitutes unreserved fund balance, which is available for spending at the City’s discretion. The remainder of fund balance is reserved to indicate that it is not available for new spending because it has already been committed 1) for Urban Renewal Authority loan collateral ($410,145); 2) for open space and parks ($1,005,942); 3) for police investigations ($101,080); 4) for crime prevention activities ($206,898); 5) for government access channel ($177,172) and 6) for state mandated emergency reserves ($925,000). The general fund is the chief operating fund of the City of Wheat Ridge. At the end of fiscal year 2009, unreserved fund balance of the general fund was $7.6 million, while total fund balance reached approximately $9.1 million. As a measure of the general fund’s liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 33% of total general fund expenditures, while total fund balance represents 39% of that same amount. vii General Fund Budgetary Highlights The original budget was amended by City Council for a total of $1,105,369 in supplemental budget appropriations throughout the 2009 fiscal year. In addition, a reduction in appropriations in the amount of $1,246,264 was made to address a reduction in revenues. These amendments can be briefly summarized as follows: Supplemental Budget Appropriations $332,875 allocated for prior year encumbrances $326,455 allocated for the July 20th storm damage clean up program $200,000 allocated for purchase of a house in the floodplain $176,500 allocated for additional building inspections due to the July 20th storm $36,810 allocated for Police patrol sedan replacement $14,988 allocated for swimming pool drains for compliance with the Virginia Graham Baker Act $6,171 allocated for the video streaming costs $6,120 allocated for the annual maintenance service for Community Bulletin Board Software $5,450 allocated for Channel 8 closet cleanup Reduction in Appropriations $262,529 reduction in personnel services $179,875 reduction in materials and supplies $475,505 reduction in other services and charges $328,355 reduction in capital outlay In addition to the reduction in appropriations the City did not make the scheduled $1,035,000 transfer from the General Fund to the Capital Projects fund. Capital Asset and Debt Administration Capital assets. The City of Wheat Ridge’s investment in capital assets for its governmental activities as of December 31, 2009 amounts to $57.7 million (net of accumulated depreciation). This investment in capital assets includes land, artwork, land improvements, buildings, vehicles, machinery and equipment, infrastructure and software. Major capital asset events during the 2009 fiscal year totaled $4.5 million and included the following: Land in the amount of $3,084,806 o Property at 3453 Simms Street purchased for flood mitigation project o Property at 4593 Parfet Street for the future expansion of the Public Works/Park Operations Facility viii o Land dedicated to the City by Cabelas and Jefferson County for the Crossing at Clear Creek project Construction in Progress in the amount of $233,032 o Watchable Wildlife Boardwalk Bass Lake o Park construction at 38th and Kipling o Baugh House restoration Land Improvements in the amount of $312,253 o Independence Court bridge re-decking o Kipling Signage Buildings in the amount of $153,247 o Refinish of leisure pool/Recreation Center o New roof/Recreation Center o Carpet/Richards Hart Estate Vehicles in the amount of $186,074 o Five police vehicles o One community development vehicle Machinery and Equipment in the amount of $528,847 o Power vault video storage o Daniels Mobile Repeater o Doolittle Tilt deck trailer o HVAC replacement/Community Center o PVI Boiler/Recreation Center o 10 Ton compressor/Recreation Center o 2 Adaptive motion trainers o 3 Monroe plows o 11 Emergency Warning System towers o Anderson Park Water Slide splashdown o Prospect Park Waterline City of Wheat Ridge’s Ridge’s Capital Assets (net of depreciation) 2009 2008 Land $13,776,593 $10,691,787 Artwork $39,295 $39,295 Construction in Progress $289,511 $131,503 Land improvements $3,260,649 $3,259,761 Buildings $14,498,825 $14,973,240 Vehicles $1,188,974 $1,401,880 Machinery and equipment $3,294,755 $3,170,820 Infrastructure $21,315,699 $23,324,252 Software $79,870 $121,846 Total Capital Assets $57,744,171 $57,114,384 Governmental Activities ix Long-term debt. At the end of the 2009 fiscal year, the City of Wheat Ridge had total long-term debt outstanding of $1,239,448. Of this amount, $302,809 is due within one year. This total debt represents compensated absences and claims payable, which are expected to be liquidated primarily with revenues of the General Fund. Economic Factors and Next Year’s Budgets and Rates The City’s sales and use tax rate for 2009 was 3 percent. The mill levy was 1.830 mills. Both rates are among the lowest in the Denver metro area. City Council is reviewing alternative revenue options but will not ask voters to increase the sales or property tax rates in 2010. During the 2009 fiscal year, unreserved fund balance in the General Fund increased to $7.6 million. The 2010 General Fund budget was adopted by utilizing $1.0 million of this fund balance. The increase in unreserved fund balance can be primarily attributed to a significant budget reduction program in 2009. The City Manager directed all departments to identify all discretionary spending which could be cut from the 2009 budget. Approximately $2.5 million in 2009 budget appropriations were identified. All efforts were made to maintain base levels of services and programs. The adopted 2010 fiscal year budget is $30 million. It includes a $24.9 million operating budget and a $1.3 million capital investment budget. Many capital projects were cut from the 2010 budget due to significant budget constraints. Because of decreasing revenues, increasing expenses and uncertainty in the economy, the 2010 budget was adopted as a “bare bones” budget which provides resources for a base level of services and programs. Requests for Information This financial report is designed to provide a general overview of the City of Wheat Ridge’s finances for those with an interest in the City’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to: Administrative Services Director City of Wheat Ridge 7500 W. 29th Avenue Wheat Ridge, Colorado 80033 BASIC FINANCIAL STATEMENTS CITY OF WHEAT RIDGE, COLORADO STATEMENT OF NET ASSETS December 31, 2009 PRIMARY GOVERNMENT COMPONENT UNIT GOVERNMENTAL URBAN RENEWAL ACTIVITIES AUTHORITY ASSETS Cash and Investments $ 14,635,250 $ 915,123 Receivables Accounts 2,249,578 -Property Taxes 776,775 -Intergovernmental 689,644 277,482 Accrued Interest 39,030 -Due from Component Unit 410,145 Property Held for Resale -3,275,000 Capital Assets, Not Being Depreciated 14,105,399 -Capital Assets, Net of Accumulated Depreciation 43,638,772 -TOTAL ASSETS 76,544,593 4,467,605 LIABILITIES Accounts Payable 810,704 24,689 Accrued Liabilities 233,253 -Refundable Deposits 214,578 80,000 Deferred Revenues 970,059 -Due to Primary Government -410,145 Noncurrent Liabilities Due Within One Year 302,809 173,815 Due in More Than One Year 936,639 2,836,197 TOTAL LIABILITIES 3,468,042 3,524,846 NET ASSETS Invested in Capital Assets 57,744,171 -Restricted for Open Space and Parks 1,005,942 -Restricted for Police Investigations 101,080 -Restricted for Crime Prevention Activities 206,898 -Restricted for Government Access Channel 177,172 -Restricted for Emergencies 925,000 -Unrestricted 12,916,288 942,759 TOTAL NET ASSETS $ 73,076,551 $ 942,759 The accompanying notes are an integral part of the financial statements. 1 CITY OF WHEAT RIDGE, COLORADO STATEMENT OF ACTIVITIES Year Ended December 31, 2009 PROGRAM REVENUES OPERATING CAPITAL CHARGES FOR GRANTS AND GRANTS AND FUNCTIONS/PROGRAMS EXPENSES SERVICES CONTRIBUTIONS CONTRIBUTIONS PRIMARY GOVERNMENT Governmental Activities General Government $ 8,884,981 $ 438,427 $ 107,699 $ -Community Development 1,033,264 1,373,961 --Police 8,499,092 913,131 171,765 -Public Works 6,565,658 88,110 1,483,675 2,584,594 Parks and Recreation 6,509,504 2,592,917 23,356 1,273,770 Total Primary Government $ 31,492,499 $ 5,406,546 $ 1,786,495 $ 3,858,364 COMPONENT UNIT Urban Renewal Authority $ 847,680 $ -$ -$ -GENERAL REVENUES Property Taxes Sales Taxes Use Taxes Franchise Taxes Other Taxes Investment Earnings Miscellaneous TOTAL GENERAL REVENUES CHANGE IN NET ASSETS NET ASSETS, Beginning NET ASSETS, Ending The accompanying notes are an integral part of the financial statements. 2 NET (EXPENSE) REVENUE AND CHANGE IN NET ASSETS PRIMARY COMPONENT GOVERNMENT UNIT GOVERNMENTAL URBAN RENEWAL ACTIVITIES AUTHORITY $ (8,338,855) $ -340,697 -(7,414,196) -(2,409,279) -(2,619,461) -(20,441,094) --(847,680) 778,465 26,784 14,504,415 277,482 3,206,385 -1,171,307 -1,298,636 -321,687 23,757 1,055,982 92,377 22,336,877 420,400 1,895,783 (427,280) 71,180,768 1,370,039 $ 73,076,551 $ 942,759 CITY OF WHEAT RIDGE, COLORADO BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2009 RECREATION CENTER CAPITAL GENERAL OPERATING PROJECTS ASSETS Cash and Investments $ 7,291,824 $ 2,072,920 $ 3,762,003 Receivables Accounts 2,222,086 155 9,735 Property Taxes 776,775 --Intergovernmental 422,306 -98,607 Accrued Interest -1,550 37,480 Due from Component Unit 410,145 --TOTAL ASSETS $ 11,123,136 $ 2,074,625 $ 3,907,825 LIABILITIES AND FUND BALANCE LIABILITIES Accounts Payable $ 668,798 $ 28,637 $ 89,790 Accrued Liabilities 204,828 18,905 -Refundable Deposits 214,578 --Deferred Revenues Property Taxes 776,775 --Other 117,254 -25,000 TOTAL LIABILITIES 1,982,233 47,542 114,790 FUND BALANCES Reserved for Due from Component Unit 410,145 --Reserved for Open Space and Parks ---Reserved for Police Investigations ---Reserved for Crime Prevention Activities ---Reserved for Government Access Channel 177,172 --Reserved for Emergencies 925,000 --Unreserved, reported in General Fund 7,628,586 --Special Revenue Funds -2,027,083 -Capital Projects Fund --3,793,035 TOTAL FUND BALANCES 9,140,903 2,027,083 3,793,035 TOTAL LIABILITIES AND FUND BALANCES $ 11,123,136 $ 2,074,625 $ 3,907,825 Amounts Reported for Governmental Activities in the Statement of Net Assets are Different Because: Total Fund Balances of Governmental Funds Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Long-term liabilities, including claims payable ($227,622) and compensated absences ($1,011,826), are not due and payable in the current year and, therefore, are not reported in the funds. Total Net Assets of Governmental Activities The accompanying notes are an integral part of the financial statements. 3 OTHER GOVERNMENTAL FUNDS TOTALS $ 1,508,503 $ 14,635,250 17,602 2,249,578 -776,775 168,731 689,644 -39,030 -410,145 $ 1,694,836 $ 18,800,422 $ 23,479 $ 810,704 9,520 233,253 -214,578 -776,775 51,030 193,284 84,029 2,228,594 -410,145 1,005,942 1,005,942 101,080 101,080 206,898 206,898 -177,172 -925,000 -7,628,586 296,887 2,323,970 -3,793,035 1,610,807 16,571,828 $ 1,694,836 $ 18,800,422 $ 16,571,828 57,744,171 (1,239,448) $ 73,076,551 CITY OF WHEAT RIDGE, COLORADO STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS Year Ended December 31, 2009 RECREATION CENTER CAPITAL GENERAL OPERATING PROJECTS REVENUES Taxes $ 20,516,584 $ -$ 177,049 Licenses and Permits 1,688,784 --Intergovernmental 1,786,494 -50,000 Charges for Services 962,813 1,867,301 -Fines and Forfeitures 801,006 --Investment Earnings 119,566 62,082 130,436 Miscellaneous 514,678 105,504 390,091 TOTAL REVENUES 26,389,925 2,034,887 747,576 EXPENDITURES Current General Government 8,295,605 --Community Development 1,044,649 --Police 7,960,318 --Public Works 3,379,864 --Parks and Recreation 2,737,356 2,436,904 -Capital Outlay --2,285,229 TOTAL EXPENDITURES 23,417,792 2,436,904 2,285,229 NET CHANGE IN FUND BALANCES 2,972,133 (402,017) (1,537,653) FUND BALANCES, Beginning 6,168,770 2,429,100 5,330,688 FUND BALANCES, Ending $ 9,140,903 $ 2,027,083 $ 3,793,035 The accompanying notes are an integral part of the financial statements. 4 OTHER GOVERNMENTAL FUNDS TOTALS $ 265,575 $ 20,959,208 -1,688,784 1,273,771 3,110,265 26,947 2,857,061 59,695 860,701 9,603 321,687 45,709 1,055,982 1,681,300 30,853,688 28,797 8,324,402 -1,044,649 335,394 8,295,712 -3,379,864 1,044,564 6,218,824 -2,285,229 1,408,755 29,548,680 272,545 1,305,008 1,338,262 15,266,820 $ 1,610,807 $ 16,571,828 CITY OF WHEAT RIDGE, COLORADO RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES Year Ended December 31, 2009 Amounts Reported for Governmental Activities in the Statement of Activities are Different Because: Net Change in Fund Balances of Governmental Funds $ 1,305,008 Capital outlays to purchase or build capital assets are reported in governmental funds as expenditures. However, for governmental activities those costs are capitalized in the statement of net assets and allocated over their estimated useful lives as annual depreciation expense in the statement of activities. This is the amount by which capital outlay $1,888,641 and contributed capital $2,534,594 exceeded depreciation expense ($3,793,448) during the current year. 629,787 Repayments of long-term debt are expenditures in the governmental funds, but they reduce long-term liabilities in the statement of net assets and do not affect the statement of activities. This amount represents the increase in claims payable ($31,493) and compensated absences ($7,519). (39,012) Change in Net Assets of Governmental Activities $ 1,895,783 The accompanying notes are an integral part of the financial statements. 5 CITY OF WHEAT RIDGE, COLORADO NOTES TO FINANCIAL STATEMENTS December 31, 2009 6 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Wheat Ridge, Colorado (the “City”) was incorporated in August, 1969, and became a home rule city in 1976, as defined by State statutes. The City is governed by a Mayor and eightmember Council elected by the residents. The accounting policies of the City conform to generally accepted accounting principles as applicable to government entities. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in the government-wide financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Following is a summary of the more significant policies. Reporting Entity The financial reporting entity consists of the City and organizations for which the City is financially accountable. All funds, organizations, institutions, agencies, departments and offices that are not legally separate are part of the City. In addition, any legally separate organizations for which the City is financially accountable are considered part of the reporting entity. Financial accountability exists if the City appoints a voting majority of the organization’s governing board and is able to impose its will on the organization, or if the organization provides benefits to, or imposes financial burdens on, the City. Based on the application of this criteria, the City includes the following discretely presented component unit in its reporting entity. The Wheat Ridge Urban Renewal Authority (the “Authority”) was created to redevelop or rehabilitate certain blighted areas within the City. The Authority board members are appointed by the Mayor and City Council. Although the Authority is legally separate from the City, the Authority’s primary revenue source, tax increment financing, can only be established by the City. The Authority does not issue separate financial statements. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all activities of the City and its component unit. For the most part, the effect of interfund activity has been removed from these statements. Exceptions to this general rule are charges for interfund services that are reasonably equivalent to the services provided. Governmental activities normally are supported by taxes and intergovernmental revenues. The statement of activities demonstrates the degree to which the direct expenses of the given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Internally dedicated resources are reported as general revenues rather than as program revenues. CITY OF WHEAT RIDGE, COLORADO NOTES TO FINANCIAL STATEMENTS December 31, 2009 7 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Government-wide and Fund Financial Statements (Continued) Separate financial statements are provided for governmental funds. Major individual funds are reported as separate columns in the fund financial statements. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when the liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenues as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collected within the current year or soon enough thereafter to pay liabilities of the current year. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current year. Taxes, intergovernmental revenues, and interest associated with the current year are considered to be susceptible to accrual and so have been recognized as revenues of the current year. All other revenues are considered to be measurable and available only when cash is received by the City. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences, are recorded only when payment is due. When both restricted and unrestricted resources are available for use, it is the City’s practice to use restricted resources first, then unrestricted resources as they are needed. The City reports the following major governmental funds: The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. The Recreation Center Operating Fund accounts for the operations of the recreation center. The Capital Projects Fund is used to account for the acquisition or construction of major capital assets. CITY OF WHEAT RIDGE, COLORADO NOTES TO FINANCIAL STATEMENTS December 31, 2009 8 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Assets, Liabilities and Net Assets/Fund Balances Cash and Investments -Investments are reported at fair value. Receivables -Receivables consist of sales and use taxes, lodging taxes, and other miscellaneous receivables. Receivables are reported at their gross value and, where appropriate, are reduced by the estimated portion that is expected to be uncollectible. Capital Assets -Capital assets, which include property, equipment, and infrastructure acquired or constructed since 1980, are reported in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Capital assets of the City are depreciated using the straight-line method over the following estimated useful lives. Land Improvements 25 years Buildings 10 -40 years Vehicles, Machinery and Equipment 3 -40 years Infrastructure 20 -40 years Software 5 years Deferred Revenues -Deferred revenues include grant funds that have been collected but the corresponding expenditures have not been incurred. Property taxes earned but levied for a subsequent year are also recorded as deferred revenues in the financial statements. Compensated Absences -Employees of the City are allowed to accumulate unused vacation and sick time up to a maximum based on years of service. Upon termination of employment from the City, an employee will be compensated for all accrued vacation time at their current pay rate. A long-term liability has been reported in the government-wide financial statements for the accrued vacation time. Long-Term Debt -In the government-wide financial statements, long-term debt and other longterm obligations are reported as liabilities. In the fund financial statements, governmental funds recognize the face amount of debt issued as other financing sources. Governmental funds recognize long-term liabilities only when payment is due. Payments of long-term debt are reported as current expenditures. CITY OF WHEAT RIDGE, COLORADO NOTES TO FINANCIAL STATEMENTS December 31, 2009 9 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Assets, Liabilities and Net Assets/Fund Balances (Continued) Net Assets/Fund Balances -In the government-wide financial statements, net assets are restricted when constraints placed on the net assets are externally imposed. In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Property Taxes Property taxes attach as an enforceable lien on property on January 1 and are levied the following January 1. Taxes are payable in full on April 30 or in two installments on February 28 and June 15. The County Treasurer’s office collects property taxes and remits to the City on a monthly basis. Since property tax revenues are collected in arrears during the succeeding year, a receivable and corresponding deferred revenue are reported at year end. Contraband Forfeitures The Colorado Contraband Forfeiture Act allows law enforcement agencies to retain proceeds from the seizure of contraband. These transactions are reported in the Police Investigation Special Revenue Fund. NOTE 2: CASH AND INVESTMENTS At December 31, 2009, the City had the following cash and investments. Primary Government Petty Cash $ 3,130 Cash Deposits 11,995,184 Investments 2,636,936 Total $ 14,635,250 Component Unit Cash Deposits $ 891,197 Investments 23,926 Total $ 915,123 CITY OF WHEAT RIDGE, COLORADO NOTES TO FINANCIAL STATEMENTS December 31, 2009 10 NOTE 2: CASH AND INVESTMENTS (Continued) Cash Deposits The Colorado Public Deposit Protection Act (PDPA) requires all local government entities to deposit cash in eligible public depositories. Eligibility is determined by State regulations. Amounts on deposit in excess of federal insurance levels must be collateralized by eligible collateral as determined by the PDPA. The PDPA allows the financial institution to create a single collateral pool for all public funds held. The pool is to be maintained by another institution, or held in trust for all uninsured public deposits as a group. The market value of the collateral must be at least equal to 102% of the uninsured deposits. At December 31, 2009, the City and the Authority had bank deposits of $10,226,662 and $644,052, respectively, collateralized with securities held by the financial institutions’ agents but not in their name. Investments The City and the Authority are required to comply with State statutes which specify investment instruments meeting defined rating, maturity and concentration risk criteria in which local governments may invest. State statutes do not address custodial risk. The City has further restricted the investments of the City to the following. • U.S. Treasury Obligations • Federal Instrumentality Securities • Prime Commercial Paper • Local Government Investment Pools • Certificates of deposit or savings accounts in state or national banks and savings and loans The City and the Authority had the following investments at December 31, 2009: Investment Maturities (in Years) S&P Less Investment Type Rating Than 1 Fair Value Money Market Funds AAAm $ 5,295 $ 5,295 U.S. Agency Securities AAA 1,304,560 1,304,560 Local Government Investment Pools AAAm 1,351,007 1,351,007 Total $ 2,660,862 $ 2,660,862 Interest Rate Risk -State statutes generally limit investments to an original maturity of five years unless the governing board authorizes the investment for a period in excess of five years. CITY OF WHEAT RIDGE, COLORADO NOTES TO FINANCIAL STATEMENTS December 31, 2009 11 NOTE 2: CASH AND INVESTMENTS (Continued) Investments (Continued) Credit Risk -State statutes limit investments in U.S. Agency securities to the highest rating issued by two or more nationally recognized statistical rating organizations (NRSROs). State statutes also limit investments in money market funds to those that maintain a constant share price, with a maximum remaining maturity in accordance with Rule 2a-7, and either have assets of one billion dollars or the highest rating issued by a NRSRO. Custodial Credit Risk -At December 31, 2009, the City’s investments in U.S. Agency securities were held by the counterparty (broker), but not in the City’s name. Concentration of Credit Risk -State statutes do not limit the amount the City may invest in one issuer. At December 31, 2009, the City’s investments in the Federal Home Loan Bank, Federal National Mortgage Association and Federal Home Loan Mortgage Corporation were 11%, 15% and 23%, respectively, of total investments. Local Government Investment Pool -At December 31, 2009, the City had $414,404 and $912,677, respectively, invested in the Colorado Local Government Liquid Asset Trust (Colotrust) and the Colorado Surplus Asset Fund Trust (CSAFE). The Authority had $23,926 invested in Colotrust. The Pools are investment vehicles established for local government entities in Colorado to pool surplus funds. The Colorado Division of Securities administers and enforces the requirements of creating and operating the Pools. The Pools operate similarly to a money market fund and each share is equal in value to $1.00. The Pools are rated AAAm by Standard and Poor’s. Investments of the Pools are limited to those allowed by State statutes. A designated custodial bank provides safekeeping and depository services in connection with the direct investment and withdrawal functions. The custodian’s internal records identify the investments owned by the participating governments. NOTE 3: COMPONENT UNIT LOAN During 2008, the City loaned $410,145 to the Wheat Ridge Urban Renewal Authority to collateralize a redevelopment loan. The loan is non-interest bearing. The Authority is required to repay the loan when the redevelopment properties are sold or on April 14, 2014, whichever occurs first. CITY OF WHEAT RIDGE, COLORADO NOTES TO FINANCIAL STATEMENTS December 31, 2009 12 NOTE 4: CAPITAL ASSETS Capital asset activity for the year ended December 31, 2009, is summarized below. Balances Balances 12/31/08 Additions Deletions 12/31/09 Governmental Activities Capital Assets, Not Being Depreciated Land $ 10,691,787 $ 3,084,806 $ -$ 13,776,593 Artwork 39,295 --39,295 Construction in Progress 131,503 233,032 75,024 289,511 Total Capital Assets, Not Being Depreciated 10,862,585 3,317,838 75,024 14,105,399 Capital Assets, Being Depreciated Land Improvements 5,493,459 312,253 -5,805,712 Buildings 21,271,365 153,247 -21,424,612 Vehicles 4,201,564 186,074 125,988 4,261,650 Machinery and Equipment 5,035,248 528,847 -5,564,095 Infrastructure 62,642,822 --62,642,822 Software 211,692 --211,692 Total Capital Assets, Being Depreciated 98,856,150 1,180,421 125,988 99,910,583 Less Accumulated Depreciation Land Improvements 2,233,698 311,365 -2,545,063 Buildings 6,298,125 627,662 -6,925,787 Vehicles 2,799,684 398,980 125,988 3,072,676 Machinery and Equipment 1,864,428 404,912 -2,269,340 Infrastructure 39,318,570 2,008,553 -41,327,123 Software 89,846 41,976 -131,822 Total Accumulated Depreciation 52,604,351 3,793,448 125,988 56,271,811 Total Capital Assets, Being Depreciated, Net 46,251,799 (2,613,027) -43,638,772 Governmental Activities Capital Assets, Net $ 57,114,384 $ 704,811 $ 75,024 $ 57,744,171 Depreciation expense was charged to programs of the City as follows: General Government $ 281,804 Community Development 9,461 Police 313,111 Public Works 2,179,756 Parks and Recreation 1,009,316 Total $ 3,793,448 CITY OF WHEAT RIDGE, COLORADO NOTES TO FINANCIAL STATEMENTS December 31, 2009 13 NOTE 5: LONG-TERM DEBT Following is a summary of long-term debt transactions for the year ended December 31, 2009. Balances Balances Due Within 12/31/08 Additions Payments 12/31/09 One Year Governmental Activities Compensated Absences $ 1,004,307 $ 74,089 $ 66,570 $ 1,011,826 $ 75,187 Claims Payable 196,129 916,655 885,162 227,622 227,622 Total $ 1,200,436 $ 990,744 $ 951,732 $ 1,239,448 $ 302,809 Compensated absences are expected to be liquidated primarily with revenues of the General Fund. Balances Balances Due Within 12/31/08 Additions Payments 12/31/09 One Year Urban Renewal Authority Loan Payable $ 3,176,937 $ -$ 166,925 $ 3,010,012 $ 173,815 In April 2008, the Authority entered into a loan agreement with Firstbank of Wheat Ridge in the amount of $3,285,000 to purchase property for redevelopment. The loan bears interest at 4% per annum. Principal and interest payments of $24,389 are due on the 15th of each month with a final balloon payment of $2,227,799 due on April 15, 2014. Future debt service requirements to maturity are as follows: Year Ended December 31, Principal Interest Total 2010 $173,815 $ 118,859 $ 292,674 2011 181,000 111,674 292,674 2012 188,175 104,499 292,674 2013 196,250 96,424 292,674 2014 2,270,772 30,196 2,300,968 Total $ 3,010,012 $ 461,652 $ 3,471,664 CITY OF WHEAT RIDGE, COLORADO NOTES TO FINANCIAL STATEMENTS December 31, 2009 14 NOTE 6: RISK MANAGEMENT The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City has agreed to self-insure for general liability claims to a maximum of $150,000, automobile, property and physical damage claims to a maximum of $10,000, and workers compensation claims to a maximum of $5,000 per occurrence. Changes in claims payable for the years ended December 31, 2009 and 2008, were as follows: 2009 2008 Claims Payable, January 1 $ 196,129 $ 103,344 Incurred Claims 916,655 746,032 Claims Paid (885,162) (653,247) Claims Payable, December 31 $ 227,622 $ 196,129 For excess liability, property and workers compensation claims, the City is involved with the Colorado Intergovernmental Risk Sharing Agency (CIRSA), a separate and independent governmental and legal entity formed by intergovernmental agreement by member municipalities pursuant to the provisions of 24-10-115.5, Colorado Revised Statutes (1982 Replacement Volume) and the Colorado Constitution, Article XIV, Section 18(2). The purposes of CIRSA are to provide members defined liability, property, and workers compensation coverages and to assist members to prevent and reduce losses and injuries to municipal property and to persons or property which might result in claims being made against members of CIRSA, their employees and officers. It is the intent of the members of CIRSA to create an entity in perpetuity which will administer and use funds contributed by the members to defend and indemnify, in accordance with the bylaws, any member of CIRSA against stated liability of loss, to the limit of the financial resources of CIRSA. It is also the intent of the members to have CIRSA provide continuing stability and availability of needed coverages at reasonable costs. All income and assets of CIRSA shall be at all times dedicated to the exclusive benefit of of its members. CIRSA is a separate legal entity and the City does not approve budgets nor does it have ability to significantly affect the operations of the unit. CITY OF WHEAT RIDGE, COLORADO NOTES TO FINANCIAL STATEMENTS December 31, 2009 15 NOTE 7: RETIREMENT COMMITMENTS Police Pension Plan The City contributes to a single-employer defined contribution money purchase pension plan on behalf of sworn police officers. The Plan is administered by the International City/County Management Association (ICMA). Employees are required to contribute 10% of their compensation to the Plan, and the City contributes 10%. Employees become vested in City contributions to the Plan at 20% annually, beginning in the third year of employment. The contribution requirements of Plan members and the City are established and may be amended by the City Council. During the year ended December 31, 2009, the City and employee contributions to the Plan were $494,243 and $494,243, respectively, equal to the required contributions. Department Head Pension Plan City department heads participate in a multiple-employer defined contribution pension plan upon employment with the City. The Plan is administered by ICMA. Department heads are required to contribute 4% of their compensation to the Plan and the City contributes 5%, except for the City Manager for which the City contributes 10%. Employees become vested in all contributions to the Plan immediately. The contribution requirements of Plan members and the City are established and may be amended by the City Council. During the year ended December 31, 2009, the City and employee contributions to the Plan were $44,747 and $29,949, respectively, equal to the required contributions. Employee Pension Plan The City contributes to a multiple-employer defined contribution pension plan on behalf of all employees, except sworn personnel and department heads. The Plan is administered by ICMA. Employees are required to contribute 4% of their compensation to the Plan, and the City contributes 4%. Employees become vested in City contributions to the Plan at 20% annually after one year of employment. The contribution requirements of Plan members and the City are established and may be amended by the City Council. During the year ended December 31, 2009, the City and employee contributions to the Plan were $298,761 and $298,761, respectively, equal to the required contributions. CITY OF WHEAT RIDGE, COLORADO NOTES TO FINANCIAL STATEMENTS December 31, 2009 16 NOTE 8: COMMITMENTS AND CONTINGENCIES Tabor Amendment Colorado voters passed an amendment to the State Constitution, Article X, Section 20, which has several limitations, including revenue raising, spending abilities, and other specific requirements of state and local governments. The Amendment requires, with certain exceptions, advance voter approval for any new tax, tax rate increase, mill levy above that for the prior year, extension of an expiring tax, or tax policy change directly causing a net tax revenue gain to the City. Revenue in excess of the fiscal year spending limit must be refunded in the next fiscal year unless voters approve retention of such revenue. The City’s management believes it is in compliance with the provisions of the Amendment. However, the Amendment is complex and subject to interpretation. Many of its provisions may require judicial interpretation. In November, 2006, voters agreed to allow the City City to spend all revenues generated during 2006 and each subsequent year for police protection, street construction -repair and maintenance, parks and recreation -trails and open space, capital projects, and other basic municipal services, without limitation. The City has established an emergency reserve, representing 3% of qualifying expenditures, as required by the Amendment. At December 31, 2009, the emergency reserve of $925,000 was reported as a reservation of fund balance in the General Fund. Litigation The City is involved in various litigation. The outcome of this litigation cannot be determined at this time. REQUIRED SUPPLEMENTARY INFORMATION CITY OF WHEAT RIDGE, COLORADO BUDGETARY COMPARISON SCHEDULE GENERAL FUND Year Ended December 31, 2009 VARIANCE ORIGINAL FINAL Positive BUDGET BUDGET ACTUAL (Negative) REVENUES Taxes $ 21,518,999 $ 21,518,999 $ 20,516,584 $ (1,002,415) Licenses and Permits 1,123,808 1,123,808 1,688,784 564,976 Intergovernmental 1,635,500 1,635,500 1,786,494 150,994 Charges for Services 1,167,963 1,167,963 962,813 (205,150) Fines and Forfeitures 933,750 933,750 801,006 (132,744) Investment Earnings 200,000 200,000 119,566 (80,434) Miscellaneous 402,000 402,000 514,678 112,678 TOTAL REVENUES 26,982,020 26,982,020 26,389,925 (592,095) EXPENDITURES Current General Government 7,159,138 8,651,525 8,295,605 355,920 Community Development 1,857,492 1,121,425 1,044,649 76,776 Police 8,662,035 8,341,863 7,960,318 381,545 Public Works 3,967,034 3,763,027 3,379,864 383,163 Parks and Recreation 4,121,032 3,547,996 2,737,356 810,640 TOTAL EXPENDITURES 25,766,731 25,425,836 23,417,792 2,008,044 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 1,215,289 1,556,184 2,972,133 1,415,949 OTHER FINANCING SOURCES (USES) Transfers Out (1,035,000) ---NET CHANGE IN FUND BALANCE 180,289 1,556,184 2,972,133 1,415,949 FUND BALANCE, Beginning 5,503,802 5,503,802 6,168,770 664,968 FUND BALANCE, Ending $ 5,684,091 $ 7,059,986 $ 9,140,903 $ 2,080,917 See the accompanying Independent Auditors' Report. 17 CITY OF WHEAT RIDGE, COLORADO BUDGETARY COMPARISON SCHEDULE RECREATION CENTER OPERATING FUND Year Ended December 31, 2009 VARIANCE ORIGINAL FINAL Positive BUDGET BUDGET ACTUAL (Negative) REVENUES Charges for Services $ 2,010,523 $ 2,010,523 $ 1,867,301 $ (143,222) Investment Earnings 100,000 100,000 62,082 (37,918) Miscellaneous --105,504 105,504 TOTAL REVENUES 2,110,523 2,110,523 2,034,887 (75,636) EXPENDITURES Current Parks and Recreation 2,573,850 2,679,198 2,436,904 242,294 TOTAL EXPENDITURES 2,573,850 2,679,198 2,436,904 242,294 NET CHANGE IN FUND BALANCE (463,327) (568,675) (402,017) 166,658 FUND BALANCE, Beginning 2,398,947 2,398,947 2,429,100 30,153 FUND BALANCE, Ending $ 1,935,620 $ 1,830,272 $ 2,027,083 $ 196,811 See the accompanying Independent Auditors' Report. 18 19 CITY OF WHEAT RIDGE, COLORADO NOTES TO REQUIRED SUPPLEMENTARY INFORMATION December 31, 2009 NOTE 1: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY Budgets and Budgetary Accounting State statutes require that all funds have legally adopted budgets and appropriations. Total expenditures may not exceed the amount appropriated at the fund level. Budgets are adopted for all funds of the City on a basis consistent with generally accepted accounting principles (GAAP). The City follows these procedures in establishing the budgetary data reflected in the financial statements: • In September, management submits to the City Council a proposed operating budget for the fiscal year commencing the following January 1. The operating budget includes proposed expenditures and the means of financing them. • Public hearings are conducted to obtain taxpayer comments. • Prior to December 31, the budget is legally enacted through passage of a resolution. • Revisions that alter the total expenditures of any fund must be approved by by the City Council. • All appropriations lapse at year end. Budgetary information presented in the financial statements for the Authority was approved by the governing board of the Authority. Legal Compliance For the year ended December 31, 2009, the Wheat Ridge Urban Renewal Authority expenditures exceeded the budgeted amounts by $176,126. This may be a violation of State statutes. COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF WHEAT RIDGE, COLORADO COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS December 31, 2009 RICHARDS/OPEN POLICE MUNICIPAL HART SPACE INVESTIGATION COURT IMPROVEMENT ASSETS Cash and Investments $ 239,179 $ 101,080 $ 64,810 $ 33,249 Receivables Accounts 3,000 ---Intergovernmental 168,731 ---TOTAL ASSETS $ 410,910 $ 101,080 $ 64,810 $ 33,249 LIABILITIES AND FUND BALANCES LIABILITIES Accounts Payable $ 10,381 $ -$ 3,969 $ 268 Accrued Liabilities 5,493 ---Deferred Revenues 51,030 ---TOTAL LIABILITIES 66,904 -3,969 268 FUND BALANCES Reserved for Open Space and Parks 344,006 ---Reserved for Police Investigations -101,080 --Reserved for Crime Prevention Activities ----Unreserved, Reported in Special Revenue Funds --60,841 32,981 TOTAL FUND BALANCES 344,006 101,080 60,841 32,981 TOTAL LIABILITIES AND FUND BALANCES $ 410,910 $ 101,080 $ 64,810 $ 33,249 See the accompanying Independent Auditors' Report. 20 CONSERVATION EQUIPMENT CRIME TRUST REPLACEMENT PREVENTION TOTALS $ 670,704 $ 203,065 $ 196,416 $ 1,508,503 --14,602 17,602 ---168,731 $ 670,704 $ 203,065 $ 211,018 $ 1,694,836 $ 8,768 $ -$ 93 $ 23,479 --4,027 9,520 ---51,030 8,768 -4,120 84,029 661,936 --1,005,942 ---101,080 --206,898 206,898 -203,065 -296,887 661,936 203,065 206,898 1,610,807 $ 670,704 $ 203,065 $ 211,018 $ 1,694,836 CITY OF WHEAT RIDGE, COLORADO COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS Year Ended December 31, 2009 RICHARDS/OPEN POLICE MUNICIPAL HART SPACE INVESTIGATION COURT IMPROVEMENT REVENUES Taxes $ -$ -$ -$ -Intergovernmental 872,133 ---Charges for Services ---26,947 Fines and Forfeitures --27,605 -Investment Earnings 930 564 277 109 Miscellaneous 3,605 42,104 --TOTAL REVENUES 876,668 42,668 27,882 27,056 EXPENDITURES Current General Government --28,797 -Police -3,924 --Parks and Recreation 977,747 --12,696 TOTAL EXPENDITURES 977,747 3,924 28,797 12,696 NET CHANGE IN FUND BALANCES (101,079) 38,744 (915) 14,360 FUND BALANCES, Beginning 445,085 62,336 61,756 18,621 FUND BALANCES, Ending $ 344,006 $ 101,080 $ 60,841 $ 32,981 See the accompanying Independent Auditors' Report. 21 CONSERVATION EQUIPMENT CRIME TRUST REPLACEMENT PREVENTION TOTALS $ -$ -$ 265,575 $ 265,575 401,638 --1,273,771 ---26,947 --32,090 59,695 6,266 853 604 9,603 ---45,709 407,904 853 298,269 1,681,300 ---28,797 --331,470 335,394 54,121 --1,044,564 54,121 -331,470 1,408,755 353,783 853 (33,201) 272,545 308,153 202,212 240,099 1,338,262 $ 661,936 $ 203,065 $ 206,898 $ 1,610,807 CITY OF WHEAT RIDGE, COLORADO BUDGETARY COMPARISON SCHEDULE OPEN SPACE FUND Year Ended December 31, 2009 VARIANCE ORIGINAL FINAL Positive BUDGET BUDGET ACTUAL (Negative) REVENUES Intergovernmental $ 1,610,000 $ 1,435,000 $ 872,133 $ (562,867) Investment Earnings -50,000 930 (49,070) Miscellaneous -125,000 3,605 (121,395) TOTAL REVENUES 1,610,000 1,610,000 876,668 (733,332) EXPENDITURES Current Parks and Recreation 1,522,533 1,821,023 977,747 843,276 TOTAL EXPENDITURES 1,522,533 1,821,023 977,747 843,276 NET CHANGE IN FUND BALANCE 87,467 (211,023) (101,079) 109,944 FUND BALANCE, Beginning 316,505 316,505 445,085 128,580 FUND BALANCE, Ending $ 403,972 $ 105,482 $ 344,006 $ 238,524 See the accompanying Independent Auditors' Report. 22 CITY OF WHEAT RIDGE, COLORADO BUDGETARY COMPARISON SCHEDULE POLICE INVESTIGATION FUND Year Ended December 31, 2009 ORIGINAL VARIANCE AND FINAL Positive BUDGET ACTUAL (Negative) REVENUES Investment Earnings $ 1,000 $ 564 $ (436) Miscellaneous -42,104 42,104 TOTAL REVENUES 1,000 42,668 41,668 EXPENDITURES Current Police 10,000 3,924 6,076 NET CHANGE IN FUND BALANCE (9,000) 38,744 47,744 FUND BALANCE, Beginning 64,995 62,336 (2,659) FUND BALANCE, Ending $ 55,995 $ 101,080 $ 45,085 See the accompanying Independent Auditors' Report. 23 CITY OF WHEAT RIDGE, COLORADO BUDGETARY COMPARISON SCHEDULE MUNICIPAL COURT FUND Year Ended December 31, 2009 ORIGINAL VARIANCE AND FINAL Positive BUDGET ACTUAL (Negative) REVENUES Fines and Forfeitures $ 41,500 $ 27,605 $ (13,895) Investment Earnings 3,000 277 (2,723) TOTAL REVENUES 44,500 27,882 (16,618) EXPENDITURES Current General Government 79,500 28,797 50,703 NET CHANGE IN FUND BALANCE (35,000) (915) 34,085 FUND BALANCE, Beginning 59,471 61,756 2,285 FUND BALANCE, Ending $ 24,471 $ 60,841 $ 36,370 See the accompanying Independent Auditors' Report. 24 CITY OF WHEAT RIDGE, COLORADO BUDGETARY COMPARISON SCHEDULE RICHARDS/HART IMPROVEMENT FUND Year Ended December 31, 2009 ORIGINAL VARIANCE AND FINAL Positive BUDGET ACTUAL (Negative) REVENUES Charges for Services $ 13,000 $ 26,947 $ 13,947 Investment Earnings 1,500 109 (1,391) TOTAL REVENUES 14,500 27,056 12,556 EXPENDITURES Current Parks and Recreation 16,700 12,696 4,004 NET CHANGE IN FUND BALANCE (2,200) 14,360 16,560 FUND BALANCE, Beginning 11,742 18,621 6,879 FUND BALANCE, Ending $ 9,542 $ 32,981 $ 23,439 See the accompanying Independent Auditors' Report. 25 CITY OF WHEAT RIDGE, COLORADO BUDGETARY COMPARISON SCHEDULE CONSERVATION TRUST FUND Year Ended December 31, 2009 ORIGINAL VARIANCE AND FINAL Positive BUDGET ACTUAL (Negative) REVENUES Intergovernmental $ 455,000 $ 401,638 $ (53,362) Investment Earnings 17,000 6,266 (10,734) TOTAL REVENUES 472,000 407,904 (64,096) EXPENDITURES Current Parks and Recreation 725,000 54,121 670,879 NET CHANGE IN FUND BALANCE (253,000) 353,783 606,783 FUND BALANCE, Beginning 380,225 308,153 (72,072) FUND BALANCE, Ending $ 127,225 $ 661,936 $ 534,711 See the accompanying Independent Auditors' Report. 26 CITY OF WHEAT RIDGE, COLORADO BUDGETARY COMPARISON SCHEDULE EQUIPMENT FUND Year Ended December 31, 2009 ORIGINAL VARIANCE AND FINAL Positive BUDGET ACTUAL (Negative) REVENUES Investment Earnings $ 2,000 $ 853 $ (1,147) NET CHANGE IN FUND BALANCE 2,000 853 (1,147) FUND BALANCE, Beginning ---FUND BALANCE, Ending $ 2,000 $ 853 $ (1,147) See the accompanying Independent Auditors' Report. 27 CITY OF WHEAT RIDGE, COLORADO BUDGETARY COMPARISON SCHEDULE CRIME PREVENTION FUND Year Ended December 31, 2009 ORIGINAL VARIANCE AND FINAL Positive BUDGET ACTUAL (Negative) REVENUES Taxes $ 300,000 $ 265,575 $ (34,425) Fines and Forfeitures 40,000 32,090 (7,910) Investment Earnings 6,500 604 (5,896) TOTAL REVENUES 346,500 298,269 (48,231) EXPENDITURES Current Police 371,962 331,470 40,492 NET CHANGE IN FUND BALANCE (25,462) (33,201) (7,739) FUND BALANCE, Beginning 252,172 240,099 (12,073) FUND BALANCE, Ending $ 226,710 $ 206,898 $ (19,812) See the accompanying Independent Auditors' Report. 28 CITY OF WHEAT RIDGE, COLORADO BUDGETARY COMPARISON SCHEDULE CAPITAL PROJECTS FUND Year Ended December 31, 2009 VARIANCE ORIGINAL FINAL Positive BUDGET BUDGET ACTUAL (Negative) REVENUES Taxes $ 200,000 $ 200,000 $ 177,049 $ (22,951) Intergovernmental --50,000 50,000 Investment Earnings 100,000 100,000 130,436 30,436 Miscellaneous --390,091 390,091 TOTAL REVENUES 300,000 300,000 747,576 447,576 EXPENDITURES Capital Outlay 4,584,000 5,851,925 2,285,229 3,566,696 TOTAL EXPENDITURES 4,584,000 5,851,925 2,285,229 3,566,696 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (4,284,000) (5,551,925) (1,537,653) 4,014,272 OTHER FINANCING SOURCES Transfers In 1,035,000 1,235,000 -(1,235,000) NET CHANGE IN FUND BALANCE (3,249,000) (4,316,925) (1,537,653) 2,779,272 FUND BALANCE, Beginning 3,445,167 5,330,688 5,330,688 -FUND BALANCE, Ending $ 196,167 $ 1,013,763 $ 3,793,035 $ 2,779,272 See the accompanying Independent Auditors' Report. 29 CITY OF WHEAT RIDGE, COLORADO BALANCE SHEET COMPONENT UNIT December 31, 2009 URBAN RENEWAL AUTHORITY ASSETS Cash and Investments $ 915,123 Receivables Intergovernmental 277,482 Property Held for Resale 3,275,000 TOTAL ASSETS $ 4,467,605 LIABILITIES AND FUND BALANCE LIABILITIES Accounts Payable $ 24,689 Refundable Deposits 80,000 Due to Primary Government 410,145 TOTAL LIABILITIES 514,834 FUND BALANCE Reserved for Property Held for Resale 3,275,000 Unreserved 677,771 TOTAL FUND BALANCE 3,952,771 TOTAL LIABILITIES AND FUND BALANCE $ 4,467,605 Amounts Reported for the Component Unit in the Statement of Net Assets are Different Because: Total Fund Balance of Component Unit $ 3,952,771 Long-term liabilities are not due and payable in the current year and, therefore, are not reported in the fund. (3,010,012) Total Net Assets of Component Unit $ 942,759 See the accompanying Independent Auditors' Report. 30 CITY OF WHEAT RIDGE, COLORADO STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE COMPONENT UNIT Year Ended December 31, 2009 URBAN RENEWAL AUTHORITY REVENUES Property Taxes $ 26,784 Sales Taxes 277,482 Investment Earnings 23,757 Miscellaneous 92,377 TOTAL REVENUES 420,400 EXPENDITURES Current Community Development 721,908 Debt Service Principal 166,925 Interest 125,772 TOTAL EXPENDITURES 1,014,605 NET CHANGE IN FUND BALANCE (594,205) FUND BALANCE, Beginning 4,546,976 FUND BALANCE, Ending $ 3,952,771 Amounts Reported for the Component Unit in the Statement of Activities are Different Because: Net Change in Fund Balance of Component Unit $ (594,205) Repayments of long-term debt are expenditures in governmental funds, but the repayment reduces long-term liabilities in the statement of net assets and does not affect the statement of activities. This amount represents loan payments in the current year. 166,925 Change in Net Assets of Component Unit $ (427,280) See the accompanying Independent Auditors' Report. 31 CITY OF WHEAT RIDGE, COLORADO BUDGETARY COMPARISON SCHEDULE WHEAT RIDGE URBAN RENEWAL AUTHORITY Year Ended December 31, 2009 VARIANCE ORIGINAL FINAL Positive BUDGET BUDGET ACTUAL (Negative) REVENUES Taxes $ 330,000 $ 300,000 $ 304,266 $ 4,266 Investment Earnings 15,000 15,000 23,757 8,757 Miscellaneous 60,000 60,000 92,377 32,377 TOTAL REVENUES 405,000 375,000 420,400 45,400 EXPENDITURES Current Community Development 119,600 545,805 721,908 (176,103) Debt Service Principal 166,902 166,902 166,925 (23) Interest 125,772 125,772 125,772 -TOTAL EXPENDITURES 412,274 838,479 1,014,605 (176,126) NET CHANGE IN FUND BALANCE (7,274) (463,479) (594,205) (130,726) FUND BALANCE, Beginning 1,083,863 1,083,863 4,546,976 3,463,113 FUND BALANCE, Ending $ 1,076,589 $ 620,384 $ 3,952,771 $ 3,332,387 See the accompanying Independent Auditors' Report. 32 COMPLIANCE SECTION The public report burden for this information collection is estimated to average 380 hours annually. LOCAL HIGHWAY FINANCE REPORT Financial Planning 02/01 Form # 350-050-36 I. DISPOSITION OF HIGHWAY-USER REVENUES AVAILABLE FOR LOCAL GOVERNMENT EXPENDITURE ITEM 1. 2. 3. 4. 5. A. I. 2. 3. 4. 5. 6. B. C. D. A. Local Motor-Fuel Taxes B. Local Motor-Vehicle Taxes C. Receipts from State Highway-User Taxes D. Receipts from Federal Highway Administration 214,285 767,389 1,877,197 5,361,473 A. B. V. LOCAL ROAD AND STREET FUND BALANCE o B. Total Recei ts 5,361,473 C. Total Disbursement 5,361,473 E. Reconciliation o FORM FHWA-536 (Rev. 1-05) PREVIOUS EDITIONS OBSOLETE 1 33 (Next Page) 09Highway Report.xls LOCAL HIGHWAY FINANCE REPORT STATE: Colorado YEAR ENDING (mm/yy): December 2009 2,917,733 3,688,413 (Carry forward to page J) II. RECEIPTS FOR ROAD AND STREET PURPOSES -DETAIL AMOUNT III. DISBURSEMENTS FOR ROAD AND STREET PURPOSES -DETAIL 501,348 84,859 194,655 780,862 (Carry forward to page I) A.I. d. omments: ON NATIONAL I-IIGlIWA Y SYSTEM oo OFF NATIONAL HIGHWAY SYSTEM b 300,008 300,008 748,476 TOTAL c ooo 300,008 300,008 748,476 (Carry forward to page 1) FORM FHWA-S36 (Rev. I-OS) PREVIOUS EDITIONS OBSOLETE 2 34 .. , • _ • City of -PWheatRl..dge DATE: September 27, 2010 REQUEST FOR CITY COUNCIL ACTION TITLE: MOTION TO APPROVE THE ANNUAL POLICE RADIO SYSTEM CONTRACT PAYMENT TO THE WEST METRO FIRE PROTECTION DISTRICT IN THE AMOUNT OF $88,586 FOR POLICE RADIO SYSTEM SERVICES D PUBLIC HEARING IZI BIDS/MOTIONS D RESOLUTIONS QUASI-JUDICIAL: ISSUE: D ORDINANCES FOR 1sT READING D ORDINANCES FOR 2ND READING DYES IZI NO -(l,,, City Manager In 2005, the City of Wheat Ridge entered into an IGA with the West Metro Fire Protection District for annual contracted radio services. These services include technical support, system maintenance, equipment repair, a lease agreement for the Mount Morrison antenna site and associated software and hardware costs. These services have provided significant improvement to the department's radio infrastructure and improved public safety in our community. PRIOR ACTION: These fees have been budgeted yearly by the Police Department and approved by City Council each each year since 2005. FINANCIAL IMP ACT: The total amount of these fees has been budgeted by the Police Department and approved by City Council for the 2010 budget in account # 01-204-700-704. RECOMMENDATIONS: Approve the contract payment in the amount of $88,586.00 to the West Metro Fire Protection District. Council Action Form: Annual Police Radio System Contract September 2 I, 20 I 0 Page 2 RECOMMENDED MOTION: "I move to approve the annual police radio contract payment to the West Metro Fire Protection District in the amount of $88,586 from account # 0 I -204-700-704 for police radio system services. " Or, "I move to deny approval for the annual police radio contract payment to the West Metro Fire Protection District in the amount of$88,586 from account # 01-204-700-704 for police radio system services for the following reason(s) " REPORT PREPARED BY; Jim Lorentz, Division Commander ATTACHMENTS; I. Copy of invoices for 20 I 0 Contract Services 01 /01 /10 -12/3 III 0 t , .• , INVOICE DATE: WE S T \1 E T H O rlRE PROTECTION OIS TR IC'f Bill To: Larry Stodden City of Wheat Ridge 7500 W 29th Avenue Wheat Ridge, CO 80033 Protection District for radio communications technical services for calendar year 2010, consideration is now due. The amount of $56,271.00 for one-half man-year for technical support, equipment repair facilities, utilities, test equipment, vehicle, fuel, maintenance. The amount of $15,290.00 for Mount Morrison Lease Agreement amount covers the above listed contract services from January 1, 2010 thru December 31 , 2010. amount does not include: SoftwarelFirmware maintenance agreement from HARRIS. This cost will be invoiced separately when received. Please remit to: West Metro Fire Protection District Finance Division 433 S. Allison Pkwy Lakewood, CO 80226 THANK YOU FOR YOUR BUStNESSI ,. Attachment 1 FOR: Juty 2,2010 Tech Services 2010 $71,.:>tll .UUI INVOICE W E. S T :'1 l' T R 0 Bill To: Larry Siodden City of Wheat Ridge 7500 W29th Avenue Wheat Ridge, CO 80033 DATE: FOR: and Fire Protection District for radio communications technical seNices for calendar year 201 0, consideration is now due. 1/4 FX (software/firmware), TAC Annual HARRIS maintenance agreement Please remit to: West Metro Fire Protection District Finance Division 433 S. Allison Pkwy Lakewood, CO 80226 THANK YOU FOR YOUR BUSINESSI July 2. 2010 Tech Services 2010 $17,025.00 • City of. ? Wheat RL.dge TITLE: DATE: September 27, 20 10 REQUEST FOR CITY COUNCIL ACTION RESOLUTION NO. 50-2010 -A RESOLUTION AMENDING THE FISCAL YEAR 2010 GENERAL FUND BUDGET TO REFLECT THE APPROVAL OF A SUPPLEMENTAL BUDGET APPROPRIATION IN THE AMOUNT OF $57,782 FOR THE ABATEMENT OF OUTSTANDING PROPERTY DAMAGE FROM THE JULY 2009 STORM o PUBLIC HEARING o ORDINANCES FOR 1ST READING o BIDS/MOTIONS RESOLUTIONS QUASI-JUDICIAL: ISSUE: o ORDINANCES FOR 2ND READING DYES NO The residential structure located at 11480 W. 44th Avenue was substantially damaged beyond reasonable repair on July 20, 2009. A Notice and Order to abate the damage has been posted on the property and served to the owner without response or action. In excess of one year since the date of damage has passed, the condition of the property remains unchanged, and the Building Division wishes to proceed with the process of abatement. A written estimate has been received for abatement of the property by the City's approved approved on-call demolition services firm, Alford Construction, totaling $66,574. An asbestos assessment of the structure has been conducted and certified by the state, with the determination being that no asbestos abatement will be necessary. The Building Division's 2010 abatement funding was budgeted at $10,000. Approximately $1,208 of that has been expended, leaving $8,792 in that fund. A supplemental budget appropriation in the amount of $57,782 is necessary to conduct the abatement. If authorized by Council, the City will go through a bid process to select the contractor, since the value of the work exceeds $25,000. Budget Supplemental for Building Abatement Council Action Form September 27, 2010 Page 2 PRIOR ACTION: On July 27, 2010, a legal Notice and Order conforming to the procedural requirements set forth in the 1997 Uniform Code for the Abatement of Dangerous Buildings was posted on the property and sent via certified mail to the owner of record ordering the abatement of the residential structure. The Building Division has received confirmation of delivery of the notice to the owner, but has received no other response from the owner of record and no action has been taken by the owner to abate the violations. FINANCIAL IMPACT: The approved 2010 Building Division Ordinance Enforcement Budget account did not anticipate the need for an abatement of this magnitude. The approved budget currently includes $8,792. An additional $57,782 is required to perform this abatement. There are adequate funds in the General Fund unreserved fund balance to meet this request. The City can recover the costs of the abatement work through a property tax lien process. BACKGROUND: BACKGROUND: The storm that occurred on July 20,2009, uprooted a large tree on the property at 11480 W. 44th Avenue, which fell onto the residential structure at that address, causing substantial damage to the structure. There are also issues on the property related to debris and junk. At this time, the residential structure remains damaged with the felled tree still on it, in excess of one year after the damage occurred, and debris and junk is scattered throughout the property. The City has served notice to the property owner to abate the damage and debris and has informed the owner of the legal right of the City to perform the abatement and to assess the costs for such abatement against the property. The property owner of record has indicated that the property is in financial distress and there is no intent on their part to repair the damage sustained. The state of disrepair of the property poses a potential safety hazard to the general public and has become an unsightly nuisance. Based on the inaction over the past year and the communications between the property owner and the Community Services Unit, it is reasonable to infer that no action to abate the violations will be taken unless the City acts to do so. RECOMMENDATIONS: Staff is recommending approval of the supplemental budget appropriation in order to perform the abatement of the structure and associated debris on the property. If the supplemental appropriation were not approved, the abatement of the structure and debris would not occur and the property would remain in a state of disrepair and would continue to be an unsightly nuisance. RECOMMENDED MOTION: "I move to approve Resolution No. 50-2010 -A resolution amending the Fiscal Year 2010 General Fund Budget to reflect the approval of a supplemental budget appropriation in the amount of$57,782." Or, Council Action Fonn September 27, 2010 Page 3 "I move to postpone indefinitely Resolution No. 50-20 I 0 -A resolution amending the Fiscal Year 20 I 0 General Fund Budget to reflect the approval of a supplemental budget appropriation of$57,782.00, for the following reason(s) " REPORT PREPARED/REVIEWED BY: John Schumacher, Chief Building Official Ken Johnstone, Community Development Director A TT ACHMENTS: 1. Resolution No. 50-20 I 0 CITY OF WHEAT RIDGE, COLORADO RESOLUTION NO. 50 Series 2010 TITLE: A RESOLUTION AMENDING THE FISCAL YEAR 2010 GENERAL FUND BUDGET TO REFLECT THE APPROVAL OF A SUPPLEMENTAL BUDGET APPROPRIATION IN THE AMOUNT OF $57,782 TO ABATE A DANGEROUS STRUCTURE LOCATED AT 11480 WEST 44TH AVENUE WHEREAS, the building located at 11480 W. 44th Avenue in Wheat Ridge was significantly damaged when a tree fell into the house during a weather event on July 20, 2009; and WHEREAS, the building has been damaged to a point beyond which it is possible to repair and it will be necessary to demolish the building; and WHEREAS, the building , in its current condition represents a public safety hazard; and WHEREAS, the City has adopted the 1997 Uniform Code for the Abatement of Dangerous Buildings, which gives the City the right to demolish unsafe buildings; and WHEREAS, the City has given the property owner proper notice of the need to abate the building and subsequently provided adequate notice of the City's intent to initiate our own own abatement of the structure and property. NOW THEREFORE BE IT RESOLVED by the City Council of the City of Wheat Ridge, Colorado, as follows: A. The City of Wheat Ridge fiscal year 2010 General Fund Budget be amended accordingly, specifically transferring a total of $57,782 from General Fund unreserved fund balance into account #01-122-700-719 (Building DivisionOrdinance Enforcement). DONE AND RESOLVED THIS 27th Day of September 2010. Jerry DiTullio, Mayor ATTEST: Michael Snow, City Clerk Attachment 1 , _ , • c.' ty o r' p Wheat.RL..dge DATE: September 27, 2010 REQUEST FOR CITY COUNCIL ACTION TITLE: MOTION TO APPROVE THE ANNUAL RENEWAL OF THE MICROSOFT ENTERPRISE AGREEMENT (EA) PROGRAM IN THE AMOUNT OF $60,838.56 TO INSIGHT D PUBLIC HEARING [g] BIDS/MOTIONS D RESOLUTIONS QUASI-JUDICIAL: D ORDINANCES FOR 1sT READING D ORDINANCES FOR 2ND READING DYES Director ISSUE: Approval ofthe Microsoft Software Licensing Enterprise Agreement (EA) renewal to Insight will allow the City to continue to stay current on all Microsoft licenses. The EA provides licensing and support for all Microsoft software throughout the City as well as periodic upgrades. The annual renewal of the EA will cost $60,838.56 which was included in the 2010 IT Division budget. PRIOR ACTION: City Council last approved an EA renewal in 2009. FINANCIAL IMP ACT: Staff recommends awarding the renewal purchase of the EA to Insight in the total amount of $60,838.56. These funds are budgeted in the 2010 Information Technology (IT) Division budget. BACKGROUND: This is our fifth year participating in the EA program and Staff recommends the renewal of the Agreement for another year with Council approval. V:IFomlslCAFtemplate Council Action Form September 27, 2010 Page 2 Prior to 2005, software licensing control and purchases were decentralized, non-standardized and recordkeeping was sporadic and incomplete. In 2005, based on an IT Division evaluation ofthe status of the City's software needs and requirements, IT Staff decided to leverage the City's purchasing power by engaging Microsoft in a five-year agreement to maintain proper licensing for the City. It also decided at that time to manage all the software centrally within the IT Division. With the help of a new IT Administrative Guideline, this was accomplished. As a result, the City has been compliant with Microsoft's licensing rules and regulations as of 2005. Additionally, this program allows for discounts on software licenses, professional services and planning and training vouchers from Microsoft. IT has used these services to implement the Outlook web application, and to upgrade to Exchange 2010, Windows 7, Office 2010 and other Microsoft software. Enterprise Agreement Agreement (EA) is a program for software licensing which gives Microsoft customers the ability to acquire Microsoft products with a minimum of effort, amortize the cost, and provide extra benefits and upgrades at no cost. The City has completed the five-year agreement and another five-year EA is available at a reduced cost. The Agreement includes Software Assurance (SA). SA provides upgrades to the newest version of software as it is released for the duration of the Agreement. Without SA, a new version of the software must be purchased at full cost when a version upgrade is desired. In the EA, there is a 'True Up' provision that is calculated once a year. Usage of additional software applications are reported and paid for during this period. This simplifies the licensing and bookkeeping needed to stay current. Licensing compliance information is available over the internet for ease of administration. From an enterprise-wide IT standpoint, there are several provisions of the EA which makes our jobs easier and keeps the City within the letter of the licensing regulations. Rollout, maintenance, and management of the City's systems have been streamlined. In business, Microsoft is generally regarded as the defacto software for email, spreadsheets, databases, word processing, presentations and project management. Our Microsoft Enterprise Agreement allows us to have access to the latest versions of all of these applications at a more reasonable fee. It also enables the IT Division to manage and control the licenses that are deployed and thereby control costs. RECOMMENDATIONS: Staff recommends approval of the annual renewal for the Microsoft Enterprise Agreement. RECOMMENDED MOTION: "I move to approve the annual support and licensing renewal for the Microsoft Enterprise Agreement in the amount of$60,838.56 Council Action Form Septem ber 27, 2010 Page 3 Or, "I move to postpone indefinitely the renewal of the Microsoft Enterprise Agreement for the following reason(s) " REPORT PREPARED AND REVIEWED BY: Michael Steinke, IT Manager Heather Geyer, Interim Administrative Services Director ATTACHMENTS: 1. Insight Microsoft Quote # 091 O-wheatridge-EA I-jw Confidential. Insight. City of Wheat Ridge September 14, 2010 9/21/2010 Microsoft Enterprise Agreement (USO) Contact Name: Contact Phone #: Reference Number: Jinny Williams 509-979-1773 091 O-wheatridge-EA l-jw All Prices subject to change without notice and are exclusive of any taxes, duties, or tariffs. Please include the above "Reference Number" with or on your Purchase Order (PO). MFG Part Number Product Name TRUE UP FEES PaIy ment for Deskt-, Added in Y t:df .5, . A07-00041 ProOsktp ALNG LicSAPk MVL H30-00235 ALNG LicSAPk MVL wi 359-00851 SOLCAL ALNG LicSAPk MVL OvcCAL True Up Payment Total: ......... ............ ........ " .... ' ...... .,., A07-00042 ProOsktp ALNG SA MVL H30-00238 ALNG SA MVL wi 087-01159 VisioPro ALNG SA MVL 312-02257 ExchgSvrStd ALNG SA MVL 359-00792 SOLCAL ALNG SA MVL OvcCAL 228-04433 SOLSvrStd ALNG SA MVL 228-03148 SOLSvrStd ALNG SA MVL 1 Proc J3A-00162 00162 SysCtrCnfgMgrSvr ALNG SA MVL P72-00188 WinSvrEnt ALNG SA MVL P73-00226 WinSvrStd ALNG SA MVL Renewal Payment Total: 2010 Payment Total True Up & Renewal $ S S $ $ $ $ $ $ $ $ $ S Product Price 411 .08 596.37 106.37 147.25 168.36 86.35 114.81 26.53 145.56 1,163.79 93.95 382.54 117.71 Qty 10 5 20 275 10 5 1 50 2 2 1 5 25 Extended Product Price $ 4,110.80 $ 2,981 .85 $ 2,127.40 I $ 9,220.05 I $ 40,493.75 $ 1,683.60 $ 431.75 $ 114.81 $ 1,326.50 $ 291 .12 $ 2,327.58 $ 93.95 $ 1,912.70 $ 2,942.75 I $ 51,618.51 I I $ 60,838.56 I Page 1 of 1 Thank you for the opportunity to quote. « .. , • _ r . City of DATE: September 27, 2010 REQUEST FOR CITY COUNCIL ACTION TITLE: MOTION TO APPROVE THE RENEWAL OF THE GEOGRAPHIC INFORMATION SYSTEM (GIS) ENTERPRISE LICENSE AGREEMENT WITH ENVIRONMENTAL SYSTEMS RESEARCH INSTITUTE, INC. (ESRI) IN THE AMOUNT OF $35,750 FOR ONE YEAR o PUBLIC HEARING BIDSIMOTIONS o RESOLUTIONS QUASI-JUDICIAL: ISSUE: o ORDINANCES FOR I ST READING o ORDINANCES FOR 2 ND READING DYES City Manager The Environmental Systems Research Institute, Inc. (ESRI) is a sole provider of licensing and support ofthe City's existing Geographic Information System (GIS). Although the company requires a three-year license agreement to receive favorable pricing, the agreement does include a "termination for lack of funds" clause as outlined in Article 5.2, which is contingent upon Council approval of funding (included in the budget) on an annual basis. The annual cost of the licensing and support is $35,750 which was approved in the 2010 IT Division budget. PRIOR ACTION: None FINANCIAL IMP ACT: The annual renewal amount of $35,750 was included in the 2010 IT Division budget approved by City Council. V:IFormslCAFtemplate Council Action Fonn September 27,20 I 0 Page 2 BACKGROUND: The proposed annual renewal of licensing and support of the ESRI GIS is necessary to maintain engineering, planning, land and parcel data for the City of Wheat Ridge. The City of Wheat Ridge data is survey quality and allows for accurate planning and development of land. The annual renewal of licensing and support will cost $35,750 as approved in the 20 I 0 IT Budget. This package is all inclusive for licensing and technical support services. It includes software upgrades and bug fixes and patches, plus technical support to implement these software enhancements and fixes. ESRI is the sole source for this software. The continued renewal of the annual licensing and support contract is a strategic move to maintain and keep GIS software up to date and provide the proper licenses to utilize the software. This will be advantageous to the City'S Information Technology Division allowing for proactive support and maintenance. Staff recommends entering into a a new three-year agreement to allow for favorable pricing, options and flexibility. The tenn, while crossing over multiple years does have a "termination for lack of funds" as outlined in Article 5.2. RECOMMENDA nONS: Staff recommends approval of the renewal of the ESRI agreement and annual payment for the GIS software and licenses and support. RECOMMENDED MOTION: "I move to approve the renewal of the Geographic lnfonnation System (GIS) Enterprise License Agreement with Environmental Systems Research Institute, Inc. (ESRI) and an annual payment of $35,750. Or, "I move to postpone indefinitely the renewal of the Enterprise License Agreement with Environmental Systems Research Institute, Inc. (ESRI) for the following reason(s) " REPORT PREPARED AND REVIEWED BY: Michael Steinke, IT Manager Heather Geyer, Interim Administrative Services Director ATTACHMENTS: 1. ESRI Quote #20369344 lii;l' July7,2010 Ms. Annabel Montoya CITY OF WHEAT RIDGE 7500 W 29TH AVE WHEAT RIDGE, CO 80033-8001 Dear AlUla bel, The ESRl Small Municipal and County Enterprise License Agreement (ELA) is a three-year agreement that will grant your orga nization access to ESRlI< software on an unlimited basis inc luding maintenance on a ll sotiwa re offcrcd through the ELA for the tenn of the agreemcnt. The ELA will be effective on the date executed and will require a firm, tiu'ee-year commitment. Based on ESRl's work with several organizations similar to yours, we know there is significant potential to apply geographic infollllation system (GIS) technology in many operat ional and technical areas wi thin your organization. For this reason, we believe that your organization wi ll greatly benefit from an enterp rise license agreement. An ELA will provide your organization with numerous benetits including: • A lower cost per unit for licensed so ftware • Substantially reduced administrative and procurement expenses • Maintenance on all ES Rl software deployed under this agreement • Complete fl exi bility to deploy software products when and where needed The following business terms and conditions will apply: • All CllITent departments, employees, and in-house co ntractors of the organi zation wi ll be e ligible to use the software and services included in the ELA. • If your organizat ion wishes to acquire andlor maintain any ESRI software during the term of the agreement that is not included in the ELA, it may do so separately at the ESRl pricing that is generally available for your orga ni zation for so ftware and maintenance. • The organi za tion will establi sh a single po int of co ntact for ord crs and deli veries and will be responsible for rcdistribution to elig ible users. • The orga nization will es tabli sh a Tier I support center to field ca lls from internal users of ESRI software. The organization may designate indi viduals as specified in the ELA who may directly contact ESRI for Tier 2 technical support. • The organi zati on wi ll provide an annual report of installed ESRI softwa re to ESRI. Sillall Government ELA ATTACHMENT 1 ESRI 380 New York 51.. Redlands, CA 92373-8100, USA. TEl 909-793-2853 • FAX 909-793-5953 info@esri.com . WEB www.esrLcom • ES RI so rtware and updates tha t you are licensed to use will be shipped au tomati cal ly as they become avai lable. • The orga ni zation wi ll act as an ESRJ reference site and will permit ES Rl to pub lic ize its use of ESRI so ftware and services. • Licenses arc va lid ror the term of the ELi\. This program o ffer is va lid for 90 days. To complete the agreement within this time frame, please co ntact me within the next seven days to work through any qu estions or concerns you may have. To expedite your acceptance of this ELA offer: I. Sign and retum the s ignature page of the ELA with a Pu rc hase Order or issue a Pu rchase Order that refcrenccs this ELA Quotation and inc ludes the following statement on the face of the Purchase Oreler: "THIS PURCHASE ORDER IS GOVERNED BY TIlE TERMS AND CONDITIONS OF THE ESRI SMALL MUNICIPAL AND COUNTY ELA, AND ADDITIONAL TERMS AND CONDITIONS IN THIS PURCHASE ORDER WILL NOT APPLY." and have it signed by an authorized representative of the organization. 2. On the first page of th e ELA, identi fy the centra l po int o f contactiagreement administrator. The agreement administrator is the party that will be the co ntact fo r management of the so ftwa re, administration issues, and general operations. In fo nnation should inc lude name, title if applica ble, address, phone number, and e-mail address. 3. In the purchase order, identify the "Ship to" and "Bill to" information fo r your orga niza tion. 4. Send the purchase order and agreement to the address noted below: ES Rl Attn.: Customer Service SG-ELA 380 New York Street Redlands, CA 92373-8 100 Or e-mail serv icc@esri .com or fax documents to 909-307-3083. I apprec iate the opportunity to present you with this proposa l, and I believe it will bring great bcnefits to your organization. Thank you ve,y muc h for your cons ideration. Best regards, Wade Kloos Quotation # 20369344 Date: July 7, 2010 ENVIRONMENTAL SYSTEMS RESEARCH INSTITUTE, INC. 380 New York Street Customer # 10602 Contract # Redlands, CA 92373·8100 Phone : 909·793·2853 CITY OF WHEAT RIDGE IT DEPT DUNS Number: 06·313-4175 7500 W 29TH AVE Fax: 909·307·3049 CAGE Code: OAMS3 WHEAT RIDGE, CO 80033·8001 To expedite your order, please attach a copy of this quotation to your purchase order. ATTENTION: Annabel Montoya PHONE: (303) 235·2872 FAX: 303·235·2857 Quote is valid from: 07107/2010 To: 1010512010 Material Oty Description 110036 1 Populations of 25,001 to 50,000 Small Government Enterprise Term License Agreement (year 1) 110036 Populations of 25,001 to 50,000 Small Government Enterprise Term License Agreement (year 2) 110036 Populations of 25,001 to 50,000 Small Government Enterprise Term License Agreement (year 3) Unit Price 35,000.00 35,000.00 35,000.00 Item Total: Subtotal: Sales Tax: Estimated Shipping & Handling(2 Day Delivery) : Contract Pricing Adjust: Please reference attached cover letter for terms and payment information Material 11 5572 The following items are optiona l items listed for your convenience. These items are not included in the totals of this quotation. Qly Description 1 ArcPad Populations of 25,001 to 50,000 Small Government Enterprise License Agreement·per year Total: Unit Price 750.00 Total 35,000.00 35,000.00 35,000.00 105,000.00 105,000.00 0.00 0.00 0.00 $105,000.00 Total 750.00 • Please mdkate 00 your purchase order if this purchase Is funded tI1rough the Amencao Recovery and Re,nve:;tmef1t Act. and whether ESRl,s a Pnme Recop,ent, Sub-reCIpIent. or Vendor for repoong purposes. Quoted By: Oliver D'Silva, (909) 793·2853 x2044 Email: odsilva@esri.com Account Manager: Wade Kloos Email: wkloos@esri.com D'SILVAD Acceptance of this quotation is limited to the ESRI License Agreement and the Quotation Terms and Conditions This Quotation is made in confidence for your review. It may not be disclosed to third parties, except as required by law. If sending remittance, please address to: ESRI, File No. 54630, Los Angeles, Ca 90074·4630 This offer is limited to the terms and conditions incorporated and attached herem. SMALL AND COUNTY ENTERI'RISE LICENSE AGREEMENT (E214-25114/20 10) ESRI, 380 New York St.. Redlands, CA 92373-8100 USA· TEL 909-793-2853 • FAX 909-793-5953 This Small Municipal and County Enterprise License Agreement ("ELA") is by and between the organization identified in the ELA Quotation ("LicenseeK ) and Environmental Systems Research Institute, Inc. ("ESRI"), with offices at 380 New York Street, Redlands, California 92373-8100. Unless otherwise agreed to by the parties, the Effective Dale of this ELA is the dale of the signature below or, jf no dale is provided with the signature, the date of ESRl's receipt of Licensee's Purchase Order citing this ELA This ELA grants licensee certain rights 10 use specific ESRI Soflware, Data, Web Services, and Documentation for a limited, fixed period beginning from the Effective Date and provides tailored maintenance subject to payment of fees and the terms of this ELA. This ELA is composed of (i) this signature page, (ii) the ELA Terms and Conditions, (iii) Exhibit 1-Scope of Use (E300), (iv) Exhibit 2-Training Addendum (E207), and (v) the ELA Quotation, which together constitute the sale and entire agreement of the parties as to the subject matter set forth herein. Should there be any conflict between the terms and conditions of the documents that comprise the ELA, the order of precedence for the documents shall be as follows: (i) this Signature page, (ii) the ELA Terms and Conditions, (iii) Exhibit 1-Scope of Use (E300), (iv) Exhibit 2-Training Addendum (E207), and (v) the ELA Quotation. In the event Licensee orders training courses, the terms and conditions of the Training Addendum will take precedence over the provision of the ELA with respect to the training courses, Licensee agrees that additional terms and conditions in any Licensee Purchase Order will not apply, and the terms of this ELA will govern. Unlimited Quantities ENTERPRISE SOFTWARE SCHEDULE ArclMS Desktop Software and Extensions Arclnfo ArcEdilor ArcView ArcGIS Desktop Extensions: 3D Analyst, Spatial Analyst, Network Analyst, Geostatistical Analyst, ArcScan for ArcGIS, ArcGIS Publisher, Maplex for ArcGIS , Schematics, and Job Tracking for ArcGIS (JTX) Server Software and Extensions ArcGIS Server Workgroup or Enterprise (Advanced, Standard, and Basic) ArcGIS Server ExtenSions: 3D, Schematics, Geostatistical, Job Tracking, Network. Image, and Spatial Developer ArcGIS Engine Runtime ArcGIS Engine Runtime Extensions: 3D. Spatial, Geodatabase Update, Network, Schematics, and Maplex Limited Quantities One Annual Subscription to ESRI Developer Network (EON) OTHER BENEFITS Number of ESRI International User Conference Registrations provided annually 3 Number of Tier 1 Help Desk Individuals authorized to call ESRI 3 Sets of media* 2 Virtual Campus Dollars allowance for ESRI authored courses only 7.500 Five percent (5%) discount on all commercially available instructor-led training at ESRI facilities Additional sets of media may be purchased. This ELA supersedes any previous agreements, proposals, presentalions, understandings, and arrangements between the parties relating to such subject matter, which is the licensing of the Enterprise Software. Except as provided in Section 9.1 Future Versions/Updates. any modifications or amendments to this ELA must be in writing and signed by an authorized representative of each party. Licensee may accept this ELA by signing and returning it with an authorizing Purchase Order that matches the ELA Quotation, references the ELA, and includes the following statement on the face of its Purchase Order: "THIS PURCHASE ORDER IS GOVERNED BY THE TERMS AND CONDITIONS OF THE ESRI SMALL MUNICIPAL AND COUNTY ELA. AND ADOITIONAL TERMS AND CONDITIONS IN THE PURCHASE ORDER WILL NOT APPLY." Licensee will return this ELA and its Purchase Order to Attn .: ESRI Customer Service, Dept. SG-ELA. 380 New York Street, Redlands, CA 92373-8100; e-mail it to servlce@esri.com; or fax it to 909-307-3083. ACCEPTED AND AGREED: Licensee Contact Information ConlactName: _________________ _ (Licensee) Address: __________________ _ By:-=== _________ _ _ _ _ Signature City, State, ZIP: ________________ _ Telephone: _________________ _ Printed Name: _________________ _ Fax: ___________________ _ Title: ___ ________________ _ E-mail: ___________________ _ Oal.: _ _____________ _ ___ _ ELA Quotation Number: ______________ _ ESRt Contract Number: ______________ _ E2 14-2 Page t of 11 05/14/20 10 ELA TERMS AND CONDITIONS ARTICLE 1-DEFINITIONS Definitions. The terms used are defined as follows: "Oala" means any ESRI or digital dataset(s) including , but nol limited to, geographic vector data coordinates, rasler, reports, or associated tabular attributes licensed under this ELA "Deploy," "Deployed," or "Deployment" means to redistribule and install or the redistribution and installation of the Enterprise Software (and related key codes/registration files) or its having been redistributed and installed by licensee on licensee's hardware. "Documentation" means all printed and digital materials including, but not limited 10, help files, user reference documentation, training documentation, or technical information and briefings. "ELA Fee" means the fee set forth in the ELA Quotation. "ELA Maintenance" means Tier 2 Support, updates, and patches provided by ESRI to Licensee for the Enterprise Software. "ELA QuotationH means the ESRI quote form provided to Licensee for the Small Municipal and County ELA containing the ELA Fee and annual payment schedule. "Enterprise Software" means the items identified in the Enterprise Software Schedule on page 1 of this ELA. "Incident" means a failure of the Software to operate according to the Documentation where such failure substantially impacts operational or functional performance. "License Agreement" and "ELA" are used interchangeably and mean the ELA Terms and Conditions, including Exhibit 1-Scope of Use (E300), that apply to Enterprise Software provided to Licensee by ESRI under this ELA. "Software" means the actual copy of all or any portion of ESRl's proprietary software technology accessed or downloaded from an authorized ESRI Web site or delivered on any media. in any format, including backups, updates, service packs, patches, hot fixes, or permitted merged copies. "Samples" means sample code, sample applications, addons, or sample extensions of Software, Data, Documentation, or Web Services. "Technical Support" means a process to attempt attempt to resolve reported Incidents through error correction; patches; hot fixes; workarounds; replacement deliveries; or any other type of Software, Data, or Documentation corrections or modifications. 'Term License" means licenses provided for use during a fixed or limited time period concurrent with the term of this ELk "Tier 1 Help Desk" means Licensee point of contact from which all Tier 1 Support will be given to Licensee. "Tier 1 Support" means the Technical Support provided by the Tier 1 Help Desk as the primary contact to Licensee in attempted resolution of reported Incidents. "Tier 2 Support" means the Technical Support provided by ESRt to the Tier 1 Help Desk when the Incident cannot be resolved through Tier 1 Support. "Web ServicesH means software services or ESRI or thirdparty data provided by ESRI that perform geographic information system (GIS) functions. tasks, or data services and are accessed over the Internet, excluding Virtual Campus. ARTICLE 2-INTELLECTUAL PROPERTY RIGHTS AND RESERVATION OF OWNERSHIP The Enterprise Software is licensed and not sold. ESRI and its licensors own the Enterprise Software and all copies, which are protected by United Stales and applicable International laws, treaties, and conventions regarding intellectual property and proprietary rights including trade secrets. Licensee agrees to use reasonable means to protecl the Enterprise Software from unauthorized use. reproduction, distribution, or publication. ESRI and its third-party licensors reserve all rights not specifically granted in this ElA including the right to change and improve Web Services. ARTICLE 3-GRANT OF LICENSE 3.1 Grant of License. Subject to the terms and conditions of this ELA, ESRI grants to a personal, nonexclusive, nontransferable Term License solely to a. Use, copy, and Deploy quantities of Enterprise Software as defined in the Enterprise Software Schedule of this ELA for Licensee's own internal use for a term concurrent with this ELA. b. Deploy one subscription of the ESRI ESRI Developer Network for use by a single named developer for the term of this ELA. c. Access and use any secure ESRI Web site resources made available to Licensee for Licensee's internal use, provided that Licensee follows ESRl's terms of use policy specified therein. All password or controlled access information provided by ESRI shall be treated as ESRI confidential information. d. Use Enterprise Software in accordance with Exhibit 1 (provided that all licenses are Term Licenses). 3.2 Consultant Access. Subject to 3.1, Licensee may provide access to Ihe Enterprise Software to any consultant or contractor of Licensee, provided consultants' and contractors' use is for the sole benefit of Licensee while (i) working on-site at Licensee's facili ties, (ii) remotely accessing or using Enterprise Software from Licensee's on-site computers or machines, or (iii) remotely using/accessing Enterprise Software from a third party's computers or machines under contract to the Licensee. Licensee shall be responsible for for compliance by consultants or contractors with the terms and conditions of this ELA. Licensee shall require consultant or contractor to discontinue access to and use of Enterprise Software upon completion of work for Licensee. ARTICLE 4-SCOPE OF USE 4.1 Permitted Uses a. Licensee may install and store the Software, Data, and Documentation on electronic storage device(s). b. Licensee may make one (1) copy of the Software. Data, and Documentation for archival purposes. Licensee may make routine computer backups. c_ Licensee may customize the Software using any (i) macro or scripting language, (Ii) published application programming inleriace (API), or (iii) source or object code libraries, but only to the extent that such customization is described in the Documentation. d. Licensee may use, copy, or prepare derivative works of the Documentation supplied in digital format and thereafter reproduce, display, and redistribute the customized documentation only for Licensee's own internal use. Portion(s) of Documentation supplied in digital format merged with other software and printed or digital documentation are subject to this ELA. Licensee shall include the following copyright allribution nolice acknowledging the proprietary rights of ESRI and its licensor(s): "Portions of lhis document include intellectual property of ESRI and its licensor(s) and are used herein under license. Copyright © [Insert the actual copyright daters) from the source materials] ESRI and its licensor(s). All rights reserved ." E21-l-2 Page 2 of 12 0511 I 0 4.2 Uses Not Permitted a. Except as provided herein, Licensee shall not sell, rent. lease, sublicense, lend, assign, or time-share the Enterprise Software. Licensee shall not act as a service bureau or commercial application service provider (ASP) that allows third-party access to the Enterprise Software. Licensee shall not use Enterprise Software for a site or service and operate the site or the service for a profit or generate revenue through direct or indirect methods (e.g ., advertising or charging for access to the site or service). b. Except as provided herein, Licensee shall not redistribute the Software to third parties, in whole or in part, including, but not limited to, extensions, components, or DLLs. c. Licensee shall not reverse engineer, decompile, or disassemble the Enterprise Software, except to the extent that such activity is expressly permitted by applicable law notwithstanding this restriction. d. Except to the extent that applicable law prohibits this restriction, Licensee shall not make any attempt to circumvent the technological measures that control access to, or use of, the Enterprise Software. e. Except as provided herein, Licensee shall not redistribute the Software activation number(s), registration numberllicense authorization file(s), developer license file(s), or Web Services access codes to third parties. f. Licensee shall not use the Software or Web Services to transfer or exchange any material where such transfer or exchange is prohibited by intellectual property laws or any other applicable laws. g. Licensee shall not remove or obscure any ESRI or its licensor(s) patent, copyright, trademark, or proprietary rights notices contained in or affixed to the Enterprise Software. h. Licensee shall not unbundle individual or component parts of the Software or Data for independent use. 1. Hard--copy Documentation may not be copied. Licensee shall not use, transfer, redistribute, or Deploy Enterprise Software outside the United States. ARTICLE 5--TERM AND TERMINATION AND EXPIRATION 5.1 5.1 Term. The term of the ELA shall be three (3) years from the Effective Date, unless this ELA is terminated earlier as provided herein. The term of all licenses and the authorized period of use for all Enterprise Software Deployed shall be concurrent with the term of this ELA No indefinite or perpetual term license grants are provided with this ELA 5.2 Termination for Lack of Funds. Either party may terminate this ELA for Lack of Funds. Lack of Funds is the inability of Licensee to secure appropriation of funds through the legislative or governing body's approval process for annual payments due. 5.3 Termination for a Material Breach. Either party may terminate this ELA for a material breach by the other party. The breaching party shalt be given a period of ten (10) days from date of written notice to cure any materia! breach. 5.4 No Use upon Expiration or Termination. Upon expiration or termination of this ELA, all Enterprise Software Deployed shall terminate. Licensee shall cease access and use of Web Services and clear Web Services client·side data cache and cease use, uninstall . remove, and destroy all Deployed Software, Data, and Documentation and any whole or partial copies, modifications, media. or merged portions in any form and execute and deliver evidence of such actions to ESRI. ELA Maintenance, Virtual Campus access. and User Conference Registrations shall also terminate. ARTICLE 6-LlMITED WARRANTtES ANO DISCLAIMERS 6.1 Limited Warranties. Except as otherwise provided for in this Article 6, ESRI warrants that (i) the unmodified Software will substantially conform to the published Documentation and (il) the media upon which the Software, Data, and Documentation are provided will be free from defects in materials and workmanship under normal use and service for a period of ninety (90) days from the date of receipt. 6.2 Data and Web Services Disclaimer. The Data and Web Services may contain some nonconformi\ies, defects, errors, or omissions. THE DATA AND WEB SERVICES ARE PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND. Without limiting the generality of the preceding sentence, ESRI and its ticensor(s) do not warrant that the Data and Web Services will meet licensee's needs or expectations, that the use of the Data and Web Services will be uninterrupted, or that all nonconformities can or will be corrected. ESRI and its licensor(s) are not inviting reliance on this Data or Web Services, and Licensee should always verify actual Data or Web Services. 6.3 Special Disclaimer. SAMPLES, PATCHES. AND HOT FIXES ARE DELIVERED "AS IS" WITHOUT WARRANTY OF ANY KIND. LICENSEE ASSUMES ALL RISK AS TO THE QUALITY AND PERFORMANCE OF THE SAMPLES, PATCHES, AND HOT FIXES. 6.4 Internet Disclaimer. THE PARTIES EXPRESSLY ACKNOWLEDGE AND AGREE THAT THE INTERNET IS A NETWORK OF PRIVATE AND PUBLIC NETWORKS, AND THAT (i) THE INTERNET IS NOT A SECURE INFRASTRUCTURE, (ii) THE PARTIES HAVE NO CONTROL OVER THE INTERNET, AND (iii) NONE OF THE PARTIES SHALL BE LIABLE FOR DAMAGES UNDER ANY THEORY OF LAW RELATED TO THE DISCONTINUANCE OF OPERATION OF ANY PORTION OF THE INTERNET OR POSSIBLE REGULATION OF THE INTERNET THAT MIGHT RESTRICT OR PROHIBIT THE OPERATION OF THE WEB SERVICE. 6.5 General Disclaimer. EXCEPT FOR THE ABOVE EXPRESS LIMITED WARRANTIES, ESRI DISCLAIMS ALL OTHER WARRANTIES OR CONDITIONS OF ANY KIND, WHETHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OR CONDITIONS OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, NONINTERFERENCE, SYSTEM INTEGRATION, ANO NONINFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS. ESRI OOES NOT WARRANT AND DISCLAIMS THAT THE ENTERPRISE SOFTWARE WILL MEET LICENSEE'S NEEDS; THAT LICENSEE'S OPERATION OF THE SAME WILL BE UNINTERRUPTEO, ERROR FREE, FAULT TOLERANT, OR FAIL-SAFE; OR THAT ALL NONCONFORMITIES CAN OR WILL BE CORRECTED. SOFTWARE, DATA, WEB SERVICES, AND DOCUMENTATION ARE NOT DESIGNED, MANUFACTURED, OR INTENDED FOR USE IN ENVIRONMENTS OR APPLICATIONS THAT MAY LEAD TO DEATH, PERSONAL INJURY, OR PHYSICAL PROPERTYI ENVIRONMENTAL DAMAGE. ANY SUCH USE SHALL BE AT LICENSEE'S OWN RISK RISK AND COST. 6.6 Exclusive Remedy. licensee's exclusive remedy and ESRt's entire liabifity for breach of the limited warranties set forth in this Article 6 shall be limited, at ESRI's sole discretion, to (i) replacement of any defective media; (ii) repair, correction, or a workaround for the Software subject to the ESRI Maintenance Program found at www.esri .com/legallmaintenance.html; or (iii) return of the license fees paid by Licensee for the Software or Documentation that does not meet ESRl's limited warranty, provided that licensee uninstalls. removes, and destroys all copies of the Software or Documentation and executes and delivers evidence of such actions to ESRt. 1::214-2 Page 3 of [2 05/1 412010 ARTICLE 7-LlMITATION OF LIABI LITY 7.1 Disclaimer of Certain Types of Liability. ESRI AND ITS LlCENSOR(S) SHALL NOT BE LIABLE TO LICENSEE FOR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES; LOST PROFITS; LOST SALES OR BUSINESS EXPENDITURES; INVESTMENTS; BUSINESS COMMITMENTS; OR LOSS OF ANY GOODWILL OR FOR ANY INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES' ARISING OUT OF OR RELATED TO THIS ELA OR USE OF THE ENTERPRISE SOFTWARE, HOWEVER CAUSED ON ANY THEORY OF LIABILITY, WHETHER OR NOT ESRI OR ITS LlCENSOR(S) HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. 7.2 General Limitation of Liability. EXCEPT AS PROVIDED IN ARTICLE 8-INFRINGEMENT INDEMNITY, ESRI'S TOTAL CUMULATIVE LIABILITY HEREUNDER, FROM ALL CAUSES OF ACTION OF ANY KIND, INCLUDING, BUT NOT LIMITED TO, CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, BREACH OF WARRANTY, MISREPRESENTATION, OR OTHERWISE, SHALL NOT EXCEED THE AMOUNTS PAID BY LICENSEE FOR ENTERPRISE SOFTWARE PURSUANT TO THIS ELA 7.3 Applicability of Disclaimers and Limitation s. The parties agree that ESRI has set its fees and entered into this ELA in reliance upon the disclaimers and limitations set forth herein, that the same reflect an allocation of risk between the parties, and that the same form an essential basis of the bargain between the parties. THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY, ARTICLE 8-INFRINGEMENT INDEMNITY 8.1 ESRI shall defend, indemnify, and hold harmless Licensee from and against any loss. liability, cost, or expense, including reasonable attorneys' fees, which may be incurred by Licensee against any claims, actions, or demands by a third party alleging that the Software infringes a U.S. patent, copyright, or trademark provided a. Licensee promptly notifies ESRI in writing of the claim; b. Licensee provides documents clearly describing the allegations of infringement; c. ESRI has sole control of the defense of any actions and negotiations related to the defense or settlement of any claim; and d. Licensee cooperates fully in the defense of the claim. 8.2 If the Software is found to infringe a U.S. patent, copyright, or trademark, ESRI, at its own expense, may ei ther (i) obtain rights for Licensee to con tinue using the Software or (ii) modify the allegedly infringing elements of the Software while maintaining substantia lly similar software functionality or data/informational content. If neither alternative is commercially reasonable. the infringing items shall be returned to ESRI, the license shall terminate, and Licensee shall uninstallthe infringing items. ESRl's enti re liability shall then be to indemnify Licensee pursuant to section 8.1 and to refund a portion of the fees paid by Licensee in the current fee payment period. The refund wi ll be ca lculated for the time remaining for the fee payment period, starting from the notice date of infringement to the end of the fee payment period. 8.3 ESRt shalt have no obligation to defend Licensee or to pay any resulting costs, damages, or attomeys' fees for any claims or demands alleging direct or contributory infringement of the Software by (i) the combination of or integration with a product process, or system not supplied by ESRI; (iil material alteration by anyone other than ESRI or contractors acting on behalf of ESRI : (iii) use after Licensee has been notified of possible infringement; or (iv) use after modifications are provided or a return is ordered by ESRI under section 8.2. 8.4 In no event shalt the indemnification set forth in this Article 8 apply to any Samples delivered hereunder. THE FOREGOING STATES THE ENTIRE OBLIGATION OF ESRI AND ITS DISTRIBUTOR WITH RESPECT TO INFRINGEMENT OR ALLEGATION OF INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD PARTY, ARTICLE 9-GENERAL PROVISIONS 9.1 Future VersionsfUpdates. Updated or new Enterprise Software may require additional or revised terms and conditions. Terms and conditions subject to revision are limited to Article 1-Defini tions, Article 4-Scope of Use, and Exhibit 1-Scope of Use (E300) or any term as required by law. ESRI may provide notice of the revisions to Licensee in writing or by posting them on ESRl's Web site at www.esri.comJlegal. The revisions shall be incorporated into this ELA upon use of the updated or new Enterprise Software. Should Licensee reject the revisions, then Licensee shall not install or use the revised, updated, or new Enterprise Software. 9. 2 Export Control Regulations. Licensee expressly acknowledges and agrees that Licensee shall not export, reexport, transfer, or release the Enterprise Software, in whole or in part, to (i) any U.S. embargoed country (or to a national or resident of any U.S. embargoed country); (ii) any person on the U.S. Treasury Department's list of Specially Designated Nationals; (iii) any person or entity on the U.S. Commerce Department's Denied Persons List, Entity List, or Unveri fied List, or (iv) any person or entity to which such export or reexport violates any U.S. export control laws or regulations including, but not limited to, the terms of any export license or licensing provision and any amendments and supplemental additions to U.S. export laws as they may occur from time to time. 9.3 Taxes and Fees. Sales or use taxes for the fees quoted are as required by law. The tax amounl may change depending on the time elapsed between this quote and date of the invoice. ESRI will include applicable sales or use taxes on your invoice unless you provide proof with your order that your organization or use of the product is tax exempt. 9.4 No Implied Waivers. The failure of either party to enforce any provision of this ELA shall not be deemed a waiver of the provisions or of the right of such party thereafter to enforce that or any other provision. 9.5 Severability. The parties agree that if any provision of this ELA is held to be unenforceable for any reason, such provision shall be reformed only to the extent necessary to make the intent of the language enforceable. 9.6 Successor and Assigns. Licensee shall not assign, sublicense, or transfer Licensee's rights or delegate its obligations under this ELA wi thout ESRl's prior written consent, and any attempt to do so without consent shall be void. This ELA shall be binding upon the respective successors and assigns of the parties to this ELA 9.7 Survival of Terms. The provisions of Articles 2, 5, 6, 7, B. and 9 of this EtA shall survive the expiration or termination of this ELA. 9.8 Equitable Relief. The parties agree that any breach of this ELA may cause irreparable damage and that, in the event of such breach, in addition to any and all remedies at law. a party shall E1 14-2 Page -10 1' 11 0511 -1110 10 have the right to seek an injunction, specific performance, or other equitable relief in any court of competent jurisdiction. 9.9 Governing Law. This ELA shall be governed by and construed in accordance with the laws of the state in which Licensee is located without reference to connict of laws principles, except that U.S. federal law shall govern in matters of intellectual property. ARTICLE 10-ELA MAINTENANCE ELA Maintenance for Software provided under this ELA is included with the ELA Fee. ELA Maintenance includes standard maintenance benefits specified in the most current applicable ESRI U.S. Software Maintenance Program document (found at www.esri.comJlegal) as modified by this Article 10-ELA Maintenance. ELA Maintenance does not include Technical Support for Web Services. a. Tier 1 Support Provided by Licensee (1) Licensee shall provide Tier 1 Support through the Tier 1 Help Desk to all Licensee's authorized users. (2) The Tier 1 Help Desk will use analysts fully trained in the Software they are supporting. (3) At a minimum, Tier 1 Support wi ll include those activities that assist the user in resolving how-to and operational questions as well as questions on installation and troubleshooting procedures. (4) Tier 1 Support analysts will be the initial points of contact for all questions and Incidents. Tier 1 Support analysts shall obtain a full description of each reported Incident and the system configuration from Licensee user. This may include obtaining any customizalions, code samples, or data involved in the Incident. The analyst may also use any other information and databases that may be developed to satisfactorily resolve Incidents. (5) If the Tier 1 Help Desk cannot resolve the Incident, an authorized Tier 1 Help Desk individual may contact ESRI Tier 2 Support. The Tier 1 Help Desk shall provide support in such a way as to minimize repeat calls and make solutions to problems available to Licensee. (6) Tier 1 Help Desk individuals identified by Licensee are the only individuals (ca llers) aulhorized to contact ESRI directly for Tier 2 Support. Licensee may revise named individuals by written notice. b. Tier 2 Support Provided by ESRI (1) ESRI shall log the calls received from Tier 1 Help Desk individuals. (2) ESRI shall review all information collected by and received from Tier 1 Help Desk individuals including preliminary documented troubleshooting provided by Tier 1 Help Desk when Tier 2 Support is required. (3) ESRI may request that Tier 1 Help Desk individuals provide verification of information, additional information, or answers to additional questions to supplement any preliminary information gathering or troubleshooting performed by Tier 1 Help Desk. (4) ESRI shall attempt to resolve the Incidents submitted by Tier 1 Help Desk by assisting the Tier 1 Help Desk individuals. (5) When the Incident is resolved, ESRI shall communicate the information to the Tier 1 Help Desk individuals, and the Tier 1 Help Desk shall disseminate the resolution to the Licensee user. ESRJ may, at ESRl's sate discretion, make patches, hot fixes, or updates available for downloading from ESRl's Web site or deliver them on media. ARTICLE 11-0RDERING, ADMINISTRATIVE PROCEDURES, DELIVERY, AND DEPLOYMENT 11.1 Purchase Orders, Delivery, and Deployment a. Licensee shall issue a Purchase Order upon execution of the ELA and annually thereafter in accordance with the ELA Quotation. Payment shall be due and payable within thirty (30) days of the anniversary date of the Effective Date, with the initial payment due within thirty (30) days of execution of the ELA. ESRJ's FederallD Number is 95-2775-732. b. Upon receipt of the initial Purchase Order from licensee, ESRI shall deliver media containing the Enterprise Software to Licensee for its Deployment activities. ESRI shall ship the media to the ship-to address identified on the Purchase Order, FOB Destination, with shipping charges prepaid. c. ESRI shall provide registration numbers or keycodes, as applicable, to activate the nondestructive copy protection program that enables the Enterprise Software to operate. d. Licensee shall Deploy, install, configure, and track the Deployment status of the Enterprise Software. 11.2 Purchase Order Requirements a. All orders pertaining to this ELA shall be processed through Licensee's centralized point of contact. b. The following information shall be included in each Purchase Order: (1) Licensee name; ESRI customer number, if known; and bill-to and ship-to addresses (2) Purchase Order number (3) Applicable annual payment due (4) On the face page of its Purchase Order (or ordering document), Licensee shall insert a reference to the ELA and the following statement: "THIS PURCHASE ORDER IS GOVERNED BY THE TERMS AND CONDITIONS OF THE ESRI SMALL MUNICIPAL AND COUNTY ELA, ADDITIONAL TERMS AND CONDITIONS IN THE PURCHASE ORDER WILL NOT APPLY." ARTICLE 12-ENDORSEMENT AND PUBLICITY This ELA shall not be construed or interpreted as an exclusive dealings agreement or an endorsement of ESRI by Licensee. licensee agrees that upon execution of the ELA, ESRI may publicize the existence of this ELA. ARTICLE 13-ADMINISTRATIVE REQUIREMENTS 13.1 OEM Licenses. If Licensee obtains Software, Data, Web Services, or any component thereof as part of an original equipment manufacturer (OEM) software program or product developed and licensed by an OEM business partner of ESRI, Licensee shall not be entitled to or seek any discount from the OEM business partner or ESRI, directly or indirectly, as a result of or based on the availability of such Software, Data, or Web Services as Enterprise Software under this ELA. In addition, such Software, Data, Web Services, or any component thereof included in the OEM software program or product will be licensed through the license agreement provided by the OEM business partner and not through this ELA. 13,2 Product Obsolescence. During the term of this EtA, some Enterprise Software items may become obsolete, may no longer be commercially offered, or may no longer be available for unlimited quantity Deployment. Licensee may continue to use such Enterprise Software that has been Deployed for the term of the ELA, but updates for such obsolete Enterprise Software may not be available. ESRI's Product life Cycle Support Policy, available at hltp.1lresollrces.arcgis com/contenUproducllife-cycles, defines the support phases and overall support plans. ELA Maintenance shall be subject to the Product Ufe Cycle Page S of 12 05/14/20 10 Support Status, which can be found at 13.3 Renewal. Upon expiration of this ELA, the parties will evaluate Licensee's requirements. Any follow-on ELA will be offered in accordance with license terms and condition and pricing then in effect and based on Licensee's then current population count. ARTICLE 14-0PTIONAL ITEMS If additional Software iden tified in the ELA Quotation is acquired, it will be deemed added to the Enterprise Software Schedule and subject to the terms of this ELA. If training courses identified in the ELA Quotation are acquired, they will be subject to the terms found in Exhibit 2-Training Addendum. In the event Licensee orders training courses, the terms and conditions of the Training Addendum will lake precedence over the provision of the ELA with respect to the training courses. E2 1-l-2 Page 6 or 12 05/1.4120 10 EXIII BIT I SCOPE OF USE (E300 051 1412010) The scope or usc for the Software. Data. \Veb Ser\'ices. and Documentation identi fied below is described in the app! icable rootnotes identified in parentheses. Software ArcExplorer-Java and Windows Editions (20 and 25) ArcGIS API for iPhone (I, 16. 25. and 33) ArcG IS Desktop ArcJnfo (either I or 2 and 25. 26. 33. and 45) ArcEditor (either I or 2 and 25. 26. 33, 44. and 45) ArcView (either 1 or 2 and 25. 33, 44 , and 45) ArcGIS Desktop Extensions (7) • ArcGIS Engine Developer Kit and Extensions ( 1. 14.15.22,25,26. and 43) ArcGIS Engine RUlltime and Extensions (either or2 and 15.22,25,26, and 33) ArcGIS Explorer (20, 25. and 33) • ArcGIS for AutoCAD (1. 20, and 25) ArcGIS for iPhone (1. 20. 25, and 33) • ArcGIS Mapping -For Excel (5. 6. 33. and 35) -For SharePoint (5, 6. 31,33,35. and 47) • ArcG IS Mobile Deployments (1. 15. 16.25. and 33) • AreO I S Server Workgroup (either 3 or 5 and 8. 9. 25. 28. 29. 30,32,33,38, 39,40. Jncl45) -Enterprise (either 3. 4, or 5 and 8. 9, 25, 27. 31, 33,38.39,40, and 45) ArcG IS Server Extensions ArcGIS Server Geoportal Ex tension (ei ther 3, 4, or 5 and 7 and 52) -ArcG IS Server Image Extension (7. 8. and 42) ArcGIS Server Image Extension Service Editor (I) Other Extensions (7) • ArcGIS Web Mapping APls (including JavaScrip1'M, Adobe® Flexn'. Microsoft® Silverlight"'/WPF"', SOAP. and REST) (6.33,3 5. and 53) • ArclMS -ArclMS and Extensions (either 3. 4. or 5 and 8, 10,31, and 45) ArcLogistics -Desktop (either I or 2 and 25) Using ArcGIS Online (6.20,25,34.35, and 46) Using ArcGIS Server (6.20.25.34.35. and -t6) Navigator (I 46) ArcPad (I, 12. \3, 25. and 33) • ArcReader (20. 25. 33. and 45) • Arc View 3.x and Extensions ( I. 7. and 17) • ESRJ Aeronautical Solution (either 1 or 2) ESRI Business Analyst (either I or 2 and 25. 33. 45. and 48) ESRI Business Analyst Server (either 3. 4. or 5 and S, 9. 21. 25, 28, 31. 33. 39, 40, 45, and 48) • ESRl Business Analyst Server Developer (6,25,33, 35. and 51) • ESRI Defense Mapping (either I or 2) • ESRI Developer Network (EDN) son ware. Web Services. and Data (6, 7. 24, 25. 26, 33. 34, and 35) • ESRI N<lutical Solution (either I OJ' 2) • ESRJ Production Mapping (either I or 2) Geoportal Cl ients for AreGIS (7, 20, and 52) MapJt (11,25,31. 33,35.49. and 50) MapObjects-Java Edition (I, 5, 8.15, IS, and 19) MapObjectsLT(I , 14, and 16) • MapObjects-Windows Edition (I. 14. IS, 16. and 18) MOLE ( I) • NctEnginc Internet (5) • Tracking Server (either 4 or 5 3 I) \Veb Servi ces • ArcG IS Online Services (6,25,3 3,34. and 35) DMa Address Coder (either 1,2, or 5 and 21, 22, 25, and 48) ArcG IS Data Appliance (6,23,25, and 41) ESRI Data & Maps (either 1.2.3,4, or 5 and 23 and 37) ESRI Data (either 1,2, or 5 and 25 and 48) -Demographic. Consumer Spending, Market Potcntial, Retail Market Place, Business, Traffic. Shopping Center, Cable Boundaries, Banking. and Crime • Sourcebook-America (I and 2 1) StreetMap Premi um (either I. 2, 4, or 5 and 6 and 25) Tapestry Segmentation (either L L 2. or 5 and 21 and 48) E214-2 Page 7 or 12 05/1412010 [. "Single Use License." Licensee may permit a single authoriLcd end user to in stall and usc the Sonware. Data, and Documentation on a !)i ngle computer for use by that end LiseI' on the computer on which the Software is insta[led. Remote access is not permilted. Licensee may permit the single authorized end lIscr \0 make a second copy for end user's exclusive use on a portable computer as long as only one ([) copy of the Software. Data, and Documentation is in usc at anyone (I) time. No other end USCI' may use the Software, Data. or Documentation under the same I icense at the same time for any other purpose. 2. "Concurrent Use License." Licensee may install and Lise the Software. Data. and Documentation on.compuler(s) on a network, but the number of simultaneous user!) may not exceed the number of licenses acquired. No other end USCI' may use the Software, Data. or Docllmentation under the same license at the same time for any other purpose. 3. "Development Server License." Licensee may install and use the Software on a single computer to de!)ign and build applications that interface wi th or utilize server Software as described in the Documentation. 4. "Staging Server License." In addition to the Deve[opment Server License righ ts, Licensee may use and insta[1 the Software for the follow ing purposes: user acceptance testing. performance testing. load testing of' other third-pa ziy software, staging new commercial data updates. and training activit ies. 5. "Deployment Server License." In addition to the Staging Server License rights. Licensee may install and use the Software or Data to provide services to multiple users on the same or other compllter(s) . 6. License is provided only as a Term License. "Term License" means license provided for use in a limited time period or on a subscription or transaction basis. 7. Extensions to Soflware programs fo[low the same scope of use as that granted for the corresponding Software programs. 8. The administration tools for the Software may be copied and redistributed throughout Licensee's organization. 9. User-developed ArcG IS Server administration 100b may be copied throughout Licensee's organization. but the ArcCalalog application (found ill ArcG IS Desktop) may not be copied. to. The ArciMS license includes the right to deploy MapObjects-Windows Edition applications on the Intcmet or intranct. Licensee sha[1 not devetop client/server solutions with the ArcJMS-Java Archive (JAR) files without a license for the MapObjects-Java Edition developer kit. I I. Licensee may insta[1 and use the Software to provide services to multiple users on the same or other computer(s). The Software is licensed pCI' server. The licensed server is the server 011 which Licensee installs the Spatial Data Service. 12. Sofhvare is on ly licensed for navigational lise when used in conjunction with ArcLogistics. 13. "Dual Use License" means the Software may be insta[led on a desktop computer and used simu[taneously with either a personal digital assistant (PDA) or handheld mobile computer as long as Ihe Software is only used by a single individual at anyone (I) time. 14. Developers must include the following attribution with any deployed MapObjects application: "Portions of this computer program are owned by LizardTech. Inc., and are Copyrightt· 1995-2002 LizardTech. Inc., and/or the Un iversity of Californ ia. All rights reserved. U.S. Patent No. 5.710.835." 15. Deployment licenses for desktop or Intel11et applicat ion(s) may be subject to payment of addi tional license rees. 16. Licensee may deliver applications to its sublicensee(s) provided Licensee uses a written sublicense agreement that protects ESRI 's righ ts in ils Software, Data, Web Services. and Documentation to the same extent as the ESRI License Agreement including, but not limited to. the fo llowing terms: a. Sublicensee may not reverse engineer. decompile, or disassemble the ESRI Software. Data, Web Services. or Documentation , except to the extent permilled by app[icable law; copy for commercial use: transfer: or ass ign its rights under the license grant: b. Sublicensee may not use any ESRI Sol1ware, Data. Web Services. or Documentation. in whole or in part, separate from Licensee's executable application: and c. Third-party dependent or required components are red istribu tab[e subjcct to permission from the owner or aut hor. 17. Licensee may use Business Objects Crystal Reports software on ly with the ArcView 3.x Software with which it was acquired and subject to the Crysta l Reports Liccnse Agrecmcnt available on the media. Licensee may not usc a software program or system 10 cache or queue report requests. 18. The deployment license is per applicat ion per computer. 19. MapObjects-Java Edition contains Java Archive li[es. which indicate they are authentic ESRI-certificated riles when used over the Internet. Licensee shall not use ESRI certi fication or reference ESRI as a source of trusted content in any modi fied MapObjccts-Java Arch ive files. Licensee may deploy the unmodified Java class ESRI-certified libraries as an integral paz1 of the Licensee's app[ication(s). 20. Licensee may reproduce and deploy the Software provided all the follow ing occur: (a) the Software is reproduced and dep loyed in its entirety: (b) a license agreement accompanies each copy of the Software that protects the Software to the same extent as the ESRJ License Agreement, and the recipient agrees to be bound by the terms and conditions of the E214-2 Page S of t2 0511 .. 12010 license agrecment: (c) all copyright and trademark attributions/notices are reproduced: and (d) there is 110 charge or fec att ributable to the use of the Software. 21. Licensee shal l not withhold any substantial right (e.g., extension of credit) from any individual based solely on the individual's place of residence, as profiled in the Tapestry Segmentation system. 22. (a) ArcGIS Engine Runtime licenses shall not be lIsed for Internet and server development and deployment ; (b) an end user must license either ArcGIS Engine Runtime Softwnrc or other ArcGIS Desktop Software (AreView. ArcEditor, or Arclnfo) to obtain the right to run an ArcO IS Engine application on one (I) computer: and (c) the ArcG IS Engine Runtime extensions shall not be used in combination with ArcG IS Desktop Software to run ArcGIS Engine applications. A single user can have mUltiple applications installed on one (I) computer for use only by that end user. 23 . Licensee may redistribute the Data as described in the Redistribution Rights Matrix available at hltp::,\",·ww.t::-ri.col1l/legal/. in the Help system. or in supporting metadata tiles, subject to the specific attribution descri ptions and requirements for the dataset accessed. 24. EON Software, Web Services. and Data may only be lIsed by one (I) named developer per subscription sole ly for the purposes of research, development, testing. and demonstration of a prototype application. EDN server Software and Dnln may be insta lled on mult ip le computers for lise by any named EON developer. 25. Use of incl uded third-party owned data shall be subject to the Use of Data Restrictions found at http Jiwww.l·sri.com/legal! for the specific Data accessed. The Use of Data Restrictions may be mod ified by ESRI from time to time. If a modification is unacceptable to Licensee, Licensee may cancel a subscription upon written notice to ESRI, or discontinue lise of the Data or \Veb Services, as applicable. If Licensee continues to use the Data or Web Services, Licensee will be deemed to have accepted the modification. 26. An ArcSDE Personal Edition geodatabase is restric ted to four (4) gigabytes of Li censee data. 27. ArcG IS Server Web ADF Runtime Software may not be deployed independent of Licensee's ArcG IS Server Enterprise configuration. 28. Use is limited to ten (10) concurrent end users of applications other than ArcGIS Server applications. This restrict ion includes use of ArcG IS Desktop Software, ArcG IS Engine Software, and third-party applications thai connect directly to any ArcG IS Server geodatabase. There are no lim itations on the number of connections from Web applications. 29. Software can on ly be used wi th SQL Server 200512008 Express. 30. Use is rest ricted to a maximum of four (4) gigabytes of Licensee data. 31 . Redundant Software insta ll ation(s) for fail over operations is allowed but can only be operational during the period the primary site is nonoperational. The redunda nt Soflware installation(s) shal l remain dormant. except for system mai ntenance and updating of databases, while the primary site or any other redundant site is operat ional. 32. No redu ndant So ft ware insta llation is permitted. 33. Licensee's access to and use of ArcOIS Online Services or Microsoft Bing Maps are condit ioned upon Licensee's acceptance of the ESRI Web Site and Service Terms of Use Agreement and the terms and condit ions specific to ArcGIS Online Services or Microsoft Bing Maps found at 34. Licensee's organ ization is limited to the number of specified credits. transac tions, geography. or number of users as described in the online product description. 35. Licensed end users shall not share the data cache derived from ArcG IS Online Services with other licensed end users or thi rd panics. 36. Reserved. 37. Data provided with St reetMap USA may be used for mapping. geocoding, and routi ng pu rposes but is not licensed for dynamic routing purposes. For instance, StreetMap USA may not be used to alert a user about upcoming maneuvers (such as warni ng of an upcoming tum) or to calculate an alternate rou te if a turn is missed. 38. The ArcGIS Server 3D extension included with ArcG1S Server Standard (Workgroup or Enterpri se) may only be used for generating globe data cache(s) or publishing a globe document as an ArcGIS Globe Service. No other use of the ArcG IS Server 3D extension Software is permitted with ArcGIS Server Standard. 39. Any editing functionality included wi th ArcG IS Server is not permitted for use with ArcGIS Server Basic (Workgroup or Enterprise). 40. Geospat ial Enterprise l ava8eans (EJ8) provided with ArcO IS Server (Workgroup or Enterprise) is permilted for use only with ArcO IS Server Advanced. 41. Licensee may only lise Datn from a single state with the Single State vers ion of ArcG IS Data Appliance. This restrict ion applies to a large-sca le (i.e., scale levels below 1: 1 00,000) street map, transportation layer, boundaries and places layer. and one (I )-mcter or better resol ution imagery included in the USA Collection. This restriction does not apply to the smal l-scale ( i.e., scale levels above I: 1 00,000) maps provided in the World Coll ection. which are intended for display at global and regional scales. 42. Licensee has the right to one ( I) desktop deployment of the ArcG IS Server Image extension Service Definit ion Editor for every four (4) cores of ArcOIS Server Image extension that are licensed. E214-2 Page 9 ot"12 05/1412010 43. Licensee may develop an unlimited number ofnpplications on a single computer Gnd deliver the Gpplications to end with or without the ArcG IS Engine Runtime So/lware. 44. For any operating system environment in which Licensee instances of the ConcUITent Use License management software, Licensee may run tip to the same number of passive failover instances of the Concurrent Use License management software in a separate operating system environment for temporary failover support. 45. Data licensed with ESRI Business Analyst and ESRI Business Analyst Server is restricted for use only in conjunction with the respective Business Analyst extension. 46. Licensee should not follow any route suggestions that appear to be hazardous. unsafe. or illegal. Li censee assumes all risk of using this navigation Software. 47. Licensee may install and use the Software to provide services to multiple users on the same or other cOl1lputer(s). The Software is licensed per server. The licensed server is the server on which Licensee has also installed the Microsofi SharePoint Server. 48. Licensee may include reports and maps created trom the Software or Data in hard-copy or read-only format for presentation packages or marketing studies for subsidi aries and customers. The total content of the ESRI rep0l1s and maps must be less than twenty percent (20%) of Licensee's total content of the presentation package or marketing study. Ful L complete. stand-alone repol1s or maps created from the So(\ware or Data and not part of a presentation package or marketing study cannot be resold. sublicensed, or otherwise transferred without prior written permission of ESR I. Licensee's third-party customer may on ly receive reports and maps generated by Licensee and may only use the maps and reports received from Licensee for intemal purposes. In no case shall Licensee redistribute the Data in digital formalS. 49. ESRl Mapll Silverlight Web or WPF applications may not be deployed independent of Licensee's Maplt deployment configuration. 50. Licensee has the right to one (I) desktop deployment of Spatial Data Assistant for each ESRI Maplt server license. 51. ESRI Business Analyst Server Developer and Data may only be installed on Olle (1) server per license solely for the purposes of research. development. testing. and demonstration of a prototype application. 52. Source code is the intellectual property ofESRl. Licensee sha ll treat any source code file identified as "Software" in a README file or at http://www.esri.comilegalfasa trade secret for Licensee's own internal use only and not for further redistribution or access by unlicensed third parties. Licensee shall 1101 modify the Software. Documentation. Data. or source code to incorporate. embed, link. or otherwise include any code, libraries, or data licensed or distributed under an open source licensing or distribution models similar to Free Software Foundation's GNU General Public License (GPL) or GPL-complianllicenses, including, without limitation, the Artistic License (e.g., Perl), the Mozilla Public License. the Nctscape Public License, and the Sun Community or Industry Standards License. that cou ld require a user to make its proprietary source code avai lable to a request ing third party. 53. Deployment license options are as follows: E214-2 a. A license for Web applications is per the principal registered unique domain identifier. Domain is the Internet domain name registered with a domain name registrar. For example, in example.com or example.com.xx (where xx is a registered country code), example is the principal registered unique domain identifier. b. A license for desktop applications is per organization. For the purposes of this license. organization is equivalent to a prin cipal registered unique domain identifier (as described above). For example. desktop applications can be used by any employee oflhe organization with the principal registered unique domain identifier. There is no limit to the number of applications that can be built and deployed within an organization. Page 100f 12 05/14/2010 EX IIIBIT 2 TRAINING ADDENDUM (E207CWM 9/09) ARTICLE 1-TRAINING DESCRIPTION ESRI offers instructor-led training related to the use of its proprietary GIS software_ ESRI will provide to Licensee a fixed number of days of Instructor-Led Training , as defined in the Small Enterprise Training Package included in the ELA. Instructor-led training events occur at an ESRI Learning Center or via the Web. The ESRI software training course(s) to be conducted. location , and schedule dates are set forth in the ESRI Course Catalog located on ESRl's Training Web site (hltpJ/tralmng,esrLcom l. All courses are conducted in substantial conformity with course descriptions outlined on the ESRI Training Web sile. ESRI reserves the right to mOdify course content when necessary due to software technical capabilities or limitations. ARTICLE 2-ESRI'S RESPONSIBILITIES ESRI will provide an instructor qualified to conduct the course(s) as well as all necessary training materials sufficient for the number of registered participants (hereinafter "Student(s)") on the scheduled dates. ESRI will provide each Student with a course manual where applicable. ESRI will confirm Learning Center training class scheduled dates approximately ten (10) business days prior to the class start date. ARTICLE 3-lICENSEE'S RESPONSIBILITIES Licensee must ensure the protection of ESRI's copyrights. Licensee shall neither copy or distribute nor permit a third party to copy or distribute any of ESRI's training material(s). Licensee must not resell seat(s) to an ESRI training class unless explicitly authorized in writing by ESRI. Licensee must confirm thai all registered Students meet the minimum prerequisites for the applicable class set forth on ESRI's Training Web site. Licensee must submit registrations with a confirmed payment commitment at least seven (7) business days before the class start date. If Licensee submits a registration without a confirmed payment, ESRI will not confirm the seat reservation. The reservation will be added to the waiting list pending payment confirmation and subject to availability. U.S. government export control laws and regulations prohibit U.S. persons from engaging in transactions with certain denied persons found on various U.S. Government Denied Persons lists (e.g ., U.S. Department of the Treasury's Specially Designated Nationals List, U.S. Commerce Department's Denied Persons/Entity List, etc.). To meet these export requirements, Licensee must submit to the ESRI Training Event Assistant a list of the names of Students that are to attend any training class. Licensee must submit the list of Student names to ESRI at least three (3) business days before the class start date. Any Student that is found on any of the various U.S. Government Denied Persons lists will nol be permitted to attend training. Licensee is responsible for all Studenl travel arrangements. ESRI assumes no responsibility for losses from nonrefundable travel arrangements resulting from denial of a Student's participation due to U.S. government export regulation requirements, course scheduling changes, or cancellations. Licensee must provide written notice to ESRl's Customer Service of any cancellation, rescheduling, or Student substitution requirements and receive confirmation of these change(s) prior to the class start date. Licensee is responsible to ensure that it adheres to the course, facility, and equipment requirements for ESRI training as found at http://training.esri.com/gateway/index.cfm?fa trainingOp!ions.gateway. Students may not use audio and/or video recording equipment within the classroom without prior written approval from ESRI. ARTICLE 4-CANCELLATION AND RESCHEDULING POLICY Licensee may cancel or reschedule Student attendance in training up to three (3) working days before the scheduled class start date. In the event of a cancellation, Licensee will reimburse ESRI for any reasonable travel and shipping expenses incurred by ESRI. In the event Licensee does not nomy ESRI at least three (3) days prior to the scheduled training date, ESRI will deduct the appropriate number of class days from the remaining account training days. If ESRI is unable to conduct the training on the scheduled date, ESRI will notify Licensee at least three (3) business days before the scheduled date, If cancellation of a training event is necessary due to Force Majeure, the affected party is released in full from the three (3)business-day notification. The affected party will either reschedule the training or cancel the order without that affected party incurring any liability. Students may transfer from one scheduled ESRI Learning Center class to another up to two (2) times at no additional charge. Subsequent transfers may be assessed an additional nonrefundable transfer fee. Student substitutions, when a Student's place in class is filled by another person from the same organization, are allowed provided that ESRI Customer Service is notified three (3) business days in advance of the class start date. ARTICLE 5-UNIQUE TERMS FOR THE SMALL ENTERPRISE TRAINING PACKAGE The training training days are available for a period of thirty-six (36) months, commencing on the Effective Date, or when all training days are consumed, whichever is sooner. Licensee is committed to scheduled training days when ESRI training requests are received and accepted by ESRI. ESRI will invoice for outstanding training expenses where applicable. Upon the anniversary, unused training days are forleited . Training days are nontransferable and nonrefundable for any other ESRI products or services. ARTICLE 6-CONFIDENTIALINFORMATION ESRI or the Licensee may disclose to the other party certain confiden tial information under this Agreement. The disclosing party shall identify the information as confidential information at the time of disclosure. Each party shall use the confidential information described above only for exchanging information needed to provide the training con templated by this Agreement. Within fourteen (14) days of completion of the training, each party shall return or destroy and provide written notification of destruction of the confidential information of the other party. ARTICLE 7-RESERVATION OF OWNERSHIP AND GRANT OF LICENSE Except as specifically granted in this Agreement, ESRI and/or its licensors own and retain all right, title, and interest in software, data, documentation, and training materials. E21 4-2 Pagcll ofl1 ARTICLE 8-WARRANTY ESRI will provide training in a manner consistent with the technical and professional standards of the industry. 8.1 Disclaimer of Warranties. WITH THE EXCEPTION OF THE LIMITED WARRANTY SET FORTH IN THIS ARTICLE, ESRI DISCLAIMS. AND THIS AGREEMENT EXPRESSLY EXCLUDES. ALL OTHER WARRANTIES. EXPRESS OR IMPLIED. ORAL OR WRITTEN. INCLUDING. WITHOUT LIMITATION. ANY AND ALL WARRANTIES OF MERCHANTABILITY. FITNESS FOR A PARTICULAR PURPOSE. NONINTERFERENCE. AND NONINFRINGEMENT. AS WELL AS ANY WARRANTIES THAT THE DELIVERABLES ARE ERROR FREE. ARTICLE 9-UMITATION OF LIABILITY AND EXCLUSIVE REMEDY EXCEPT FOR INDEMNITY ASSOCIATED WITH CLIENT SITE TRAINING. IN NO EVENT SHALL ESRI BE LIABLE TO LICENSEE FOR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR TRAINING; LOST PROFITS; LOST SALES; BUSINESS EXPENDITURES; INVESTMENTS; BUSINESS COMMITMENTS; LOSS OF ANY GOODWILL; OR ANY INDIRECT. SPECIAL. EXEMPLARY. CONSEQUENTIAL. OR INCIDENTAL DAMAGES ARISING OUT OF. OR RELATED TO. THIS AGREEMENT. HOWEVER CAUSED OR UNDER UNDER ANY THEORY OF LlABILlTY, EVEN IF ESRI HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. ESRI'S TOTAL CUMULATIVE LIABILITY HEREUNDER. FROM ALL CAUSES OF ACTION OF ANY KIND. SHALL IN NO EVENT EXCEED THE AMOUNT ACTUALLY PAID BY LICENSEE FOR THE PORTION OF THE TRAINING UNDER THIS AGREEMENT. THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY, ARTICLE 10-UCC INAPPLICABILITY Training provided under this Agreement will nol be governed by the Uniform Commercial Code (Uee) and will not be deemed "goods" within the definition of the uee. 1.:214-2 Pilge 1101' 11 05 /1411010