CITY OF MOBILE, ALABAMA

COMPREHENSIVE ANNUAL FINANCIAL REPORT

FOR THE FISCAL YEAR ENDED September 30, 2009

Samuel L. Jones, Mayor Barbara S. Malkove, Executive Director of Finance Patricia A. Aldrich, Comptroller

CITY OF MOBILE, ALABAMA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED September 30, 2009

TABLE OF CONTENTS PAGES I. INTRODUCTORY SECTION Transmittal Letter GFOA Certificate of Achievement Organization Chart List of Principal Officers

i-v vi vii viii

II. FINANCIAL SECTION Independent Auditor's Report

1-2

A. MANAGEMENT’S DISCUSSION AND ANALYSIS

3 - 15

B. BASIC FINANCIAL STATEMENTS Government-wide Financial Statements Statement of Net Assets

16

Statement of Activities

17 - 18

Fund Financial Statements Governmental Fund Financial Statements Balance Sheet Reconciliation of the Balance Sheet Governmental Funds to the Statement of Net Assets Statement of Revenues, Expenditures, and Changes in Fund Balances Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activites

19 - 20 21 22 - 23 24

Proprietary Fund Financial Statements Balance Sheet Statement of Revenues, Expenses and Changes in Fund Net Assets Statement of Cash Flows

25 - 26 27 - 28 29 - 32

Component Units Financial Statements Statement of Net Assets Statement of Activities

33 34 - 35

Notes to the Financial Statements

36 - 77

C. REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MD&A Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund Notes to Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - General Fund

78 - 81 82

D. COMBINING FINANCIAL STATEMENTS Combining Balance Sheet - Non-major Governmental Funds (by fund type)

83

Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Non-major Governmental Funds (by fund type)

84

Non-major Special Revenue Funds Combining Balance Sheet

85 - 86

Combining Statement of Revenues, Expenditures and Changes in Fund Balances

87 - 88

Schedule of Capital Projects by Program and Disposition

89 - 90

Non-major Debt Service Funds Combining Balance Sheet

91 - 92

Combining Statement of Revenues, Expenditures, and Changes in Fund Balances

93 - 94

Non-major Capital Projects Funds Combining Balance Sheet

95 - 96

Combining Statement of Revenues, Expenditures, and Changes in Fund Balances

97 - 98

Schedule of Capital Projects by Program and Disposition

99 - 108

Internal Service Funds Combining Balance Sheet

109

Combining Statement of Revenues, Expenses and Changes in Fund Net Assets

110

Combining Statement of Cash Flows

111 - 112

Non-major Enterprise Funds Combining Balance Sheet

113 - 114

Combining Statement of Revenues, Expenses and Changes in Fund Net Assets

115 - 116

Combining Statement of Cash Flows

117 - 120

Schedule of Capital Projects by Program and Disposition

121 - 122

E. OTHER SUPPLEMENTARY INFORMATION General Fund Schedule of Revenues - Budget and Actual (Budgetary Basis) Schedule of Other Financing Sources (Uses) - Budget and Actual (Budgetary Basis)

123 - 124 125

Capital Assets Capital Assets Used in the Operation of Governmental Activities - Schedule by Source

126

Capital Assets Used in the Operation of Governmental Activities - Schedule by Function

127 - 128

Long-Term Debt Schedule of Bonds, Warrents, And Notes Payable III.STATISTICAL SECTION Net Assets by Component Changes in Net Assets Governmental Activities Tax Revenue by Source Fund Balances of Governmental Funds Changes in Fund Balances of Governmental Funds Value of Taxable Sales Sales Tax Rates Direct and Overlapping Governments Principal Sales Taxpayers Assessed Value and Estimated Actual Value of Taxable Property Property Tax Rates Direct and Overlapping Governments Principal Property Taxpayers Property Tax Levies and Collections Ratios of Outstanding Debt by Type Ratios of General Bonded Debt Outstanding Direct and Overlapping Government Debt Legal Debt Margin Information Pledged - Revenue Coverage Demographic and Economic Statistics Principal Employers Full-time Equivalent City Government Employees by Function Operating Indicators by Function Capital Asset Statistics by Function

129 - 130

131 - 132 133 - 138 139 - 140 141 - 142 143 - 144 145 146 - 147 148 149 - 150 151 152 153 - 154 155 - 156 157 158 159 - 160 161 162 - 163 164 165 - 166 167 - 170 171

SAMUEL L. JONES MAYOR

Part I Introductory Section

CITY OF MOBILE

OFFICE OF THE CITY COUNCIL COUNCIL MEMBERS

REGGIE COPELAND, SR. PRESIDENT-DISTRICT 5

FREDRICK D. RICHARDSON, JR. VICE PRESIDENT-DISTRICT I

WILLIAM C. CARROLL, JR. DISTRICT 2

JERMAINE A. BURRELL DISTRICT 3

JOHN C. WILLIAMS DISTRICT 4

CONNIE HUDSON

SAMUEL L. JONES

DISTRICT 6

MAYOR

GINA GREGORY DISTRICT 7 CITY CLERK

LISA C. LAMBERT

March 25, 2010 TO THE CITIZENS OF THE CITY OF MOBILE, ALABAMA: The Comprehensive Annual Financial Report (CAFR) of the City of Mobile, Alabama (the City) for the fiscal year ended September 30, 2009 is hereby presented to you. The CAFR is provided to give detailed information about the financial position and activities of the City to its citizens, City Council, City staff and other readers. Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests with the City of Mobile management. To the best of our knowledge and belief, the enclosed data are accurate in all material respects and are reported in a manner designed to present fairly the fmancial position and results of operations of the City as a whole and the various funds of the City. All disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. Alabama state law requires an annual audit of the City's financial statements by independent certified public accountants who must conduct the audit in accordance with generally accepted auditing standards. The accounting firm of Banks, Finley, White & Co., conducted the audit and their report on the City's basic financial statements is included herein. The City is required to undergo an annual single audit in conformity with the provisions of the Single Audit Act Amendments of 1996 and the U. S. Office of Management and Budget Circular A-133, "Audits of State and Local Governments," The audit has been performed and the separately issued Single Audit Report is available for review at the Federal Audit Clearinghouse. Management's discussion and analysis (MD&A) immediately follows the independent auditors' report. It provides a narrative introduction, overview and analysis to accompany the basic financial statements. This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. PROFILE OF THE CITY Three hundred-year-old historic Mobile is the county seat of Mobile County and is located in the southwestern section of Alabama, at the head of Mobile Bay, thirty-one miles from the Gulf of Mexico. The city covers a land area of 179 square miles and is part of the second largest metropolitan area in

P. O. BOX 1827· MOBILE, ALABAMA 36633-1827

Alabama. The latest figures from the 2000 census indicate the population of Mobile to be 198,915 and the Mobile Metropolitan Statistical Area (MSA) to be 540,258. The City of Mobile, Alabama (the City) was incorporated on January 20, 1814 under the provisions of Act 1911, No. 281, page 330; Code 1940. The City operates under a Mayor and seven-member council form of government, with the council members elected by district. Responsibility for day-to-day operations of the City rests with the Mayor. Various council committees also work closely with the Mayor and department heads. This report includes all funds of the City. The City provides a full range of services. These services include police and fire protection; the construction and maintenance of highways, streets and infrastructure; and recreational activities and cultural events. The Mobile Public Library and the Public Parks and Recreation Board (Ladd - Peebles Stadium) have both met the established criteria to be included in the reporting entity as component units, and accordingly are included in the report. The Board of Water and Sewer Commissioners of the City of Mobile, Mobile Housing Board, Mobile Airport Authority, Mobile Board of Health, Mobile Emergency Management, and Mobile Personnel Board are related entities but have not met the established criteria for inclusion in the reporting entity, and accordingly are excluded from this report. Additional information on all of these entities can be found in the notes to the financial statements (See Note 1). Policy making and legislative authority are vested in a seven member city council who are, among other things, responsible for passing local ordinances, adopting budgets, appointing committees and board members of related organizations, and approving the appointment of executive directors of the City. The Mayor is responsible for carrying out the policies and ordinances of the City Council, supervising the operation of the City and appointing executive directors. The Mayor and Council members are elected to four-year terms. All council members are elected from within their respective districts. The annual budget serves as the foundation for the City’s financial planning and control. The Mayor is required to submit a budget proposal to the City Council for most of the City’s departments and funds by August 20 of each fiscal year. The Council, after public comment and evaluation, adopts the balanced budget by the beginning of the fiscal year each October. The City maintains budgetary controls to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City’s governing body. Activities of the general fund are included in the annual appropriated budget. Project-length financial plans are adopted for the capital projects funds. The comparison between the project-length basis budget to actual expenditures for the year is not meaningful and, therefore, is not presented. The level of budgetary control is on the departmental level within an individual fund for legal and administrative control. The City also maintains an encumbrance accounting system as one technique of accomplishing budgetary control. Unencumbered amounts lapse at year-end. ECONOMIC CONDITION Along with the rest of the country the City faced an economic slowdown in 2009. Although unemployment doubled in the area between September 2008 and September 2009 (according to the Bureau of Labor Statistics) and sales tax revenues declined, the City has been able to maintain services and avoid layoffs due to the hard work and dedication of its current employees.

ii

This year Forbes.com listed Mobile as one of the "10 Best Cities for Recession Recovery" for mediumsized cities. To find the 10 cities that look best poised for recovery Forbes.com examined estimates from data provider Moody’s Economy.com of the projected gross domestic product of metropolitan areas across the U.S., as well as unemployment figures from the Bureau of Labor Statistics and home prices, incomes and affordability data from the National Association of Home Builders. ThyssenKrupp Steel USA, LLC continues to construct a multibillion dollar state-of-the-art carbon steel processing facility in north Mobile County, Alabama. The plant is expected to begin operation in 2010 and when fully operational will create 2,700 jobs. Mobile has always been a center of maritime activity and on April 9, 2009 held a groundbreaking ceremony for GulfQuest, an interactive maritime museum on the downtown waterfront expected to open in 2011. This museum will “celebrate the historical, economic and cultural significance of 'America’s Sea' and its coastal region.” Austal USA continues to be a key player in our current shipbuilding history. Austal builds large aluminum vessels, including everything from high-speed passenger ferries to dinner cruise yachts. Austal delivered its 121 metre Littoral Combat Ship LCS-2 “Independence” to the Navy at a commissioning ceremony on January 16, 2010. Also, in January 2010 the U S Navy awarded Mobile’s Austal USA shipyard $204.2 million for two Joint High Speed Vessels which will create 500 additional jobs in the area. Austal USA also built a new Modular Manufacturing Facility, completed in July 2009 and is currently building an Administrative Building that will accommodate 400 employees and be completed in June 2010. Mobile’s original cruise ship Holiday was replaced by the Fantasy which is 158 feet longer and carries 42% more passengers. It is expected that 17,000 passengers will travel through the port of Mobile. The conversion to the larger ship required the installation of a new gangway at the Alabama Cruise Terminal during the year. In the quality of life category, Mobile Regional Senior Community Center was opened in November 2008. The center includes state-of-the-art fitness equipment, a thermal plunge pool, a billiards room, three multipurpose activity rooms, a full kitchen and café and a computer lab. For sports events, Ladd-Peebles Stadium was renovated during the year in anticipation of the University of South Alabama’s inaugural football season which began September 5, 2009. A $2.5 million project added eleven luxury skybox suites to the 41,000 seat stadium. Unity Point Park was constructed during the year and showcases the work of Mayor Joseph Langan and civil rights leader John LeFlore. The Bring Back Broad Street Project is a step closer with this project and the boulevard and landscaping south of Government Street. LONG-TERM FINANCIAL PLANNING Moody’s Investor Service and Standard and Poor’s maintained the City’s bond ratings to A1 and AAwhich had been upgraded in 2008. This reflected the city’s financial position, a growing economic base and positive economic development trends. In addition to new and expanding industry in and around the city, citizens in the Theodore and Windmill place subdivision voted to be annexed. These annexations provided a broader tax base for the City along with increasing the City’s service area.

iii

MAJOR INITIATIVES Subsequent to year end the City borrowed $23 million for the construction of GulfQuest Maritime Museum, a parking facility and a fire station. The City also refinanced $56 million in debt from a 2002 bond issue. Recovery Zone Economic Development Bonds, a new type of bond created by the American Recovery and Reinvestment Act (ARRA) were used to finance these government projects with economic development outcomes. This program allocates the authority to issue bonds and sell tax credits to bond and tax credit investors in order to finance economic development activities; it is not a direct funding program that allocates public dollars. The City of Mobile used the funds to help finance projects in 2009. In addition to the Recovery Zone Bonds we participated in the new Build American Bonds. Traditionally, tax-exempt bonds provide a critical source of capital for state and local governments, but the recession has sharply reduced their ability to finance new projects. Supplementing this existing market, the Build America Bond program was designed to provide a federal subsidy for a larger portion of the borrowing costs of state and local governments than traditional tax-exempt bonds in order to stimulate the economy and encourage investments in capital projects in 2009 and 2010. At the election of the state and local governments, the Treasury Department will make a direct payment to the state or local governmental issuer in an amount equal to 35 percent of the interest payment on the Build America Bonds. As a result of this federal subsidy payment, state and local governments will have lower net borrowing costs and will be able to reach more sources of borrowing than with more traditional tax-exempt or tax credit bonds. RELEVANT FINANCIAL POLICIES Management of the City is responsible for establishing and maintaining internal control designed to ensure that the assets of the City are protected from loss, theft or misuse and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. Internal control is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. Single Audit. As a recipient of Federal and State awards, the City also is responsible for ensuring that adequate internal control is in place to ensure compliance with applicable laws and regulations related to those programs. This internal control is subject to periodic evaluation by the City. As a part of the City’s single audit, tests are made to determine the adequacy of internal control, including that portion related to Federal awards, as well as to determine that the City’s single audit for the fiscal year ended September 30, 2009 provided no instances of material weaknesses in internal control or significant violations of applicable laws and regulations. Cash Management. Cash temporarily idle during the fiscal year was invested in government securities and bank certificates of deposit. The City’s investment policy is to minimize credit and market risks while maintaining a competitive yield on its portfolio. Accordingly, deposits were either insured by Federal Depository Insurance or collateralized. The deposits that were not insured by Federal Depository Insurance were covered under the Security for Alabama Funds Enhancement (SAFE) program. Each of the banks holding the City’s deposits is a certified participant in the SAFE program. Through the SAFE program, all public funds are protected through a collateral pool administered by the Alabama State Treasury. iv

vi

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John Bell

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Public Services Division

Architectural

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Public Buildings

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Municipal Court

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U.lson

Police Department

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Airport Authority Housing Board Industrial Development Planning Commission

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Keep Mobile Beautiful Ubrary Board Mob/Ie ConventionNl.!tors Bureau Mobile Museum of Art Board Mobile MU6eum Board, Inc, Old Dauphin Way Review Board SoUd Waele Authority South Alabama Regional Planning Tree Commission Water & Sewer Comml,eloners Youth Council

,_._,_,_._,_,_,_,_

_._'-'-'- - - -'-'-'-'-'-'-. Commissions Appointed by Council

Board of Adjultment Civic Center Board Codea Advisory Committee Commercial Development Authority Downto'M"l Redevelopment Comm, Historic Devolopment Commle81on Historic Preaervatlon Authority Human Reletlons Commission

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CITY OF MOBILE, ALABAMA LIST OF PRINCIPAL OFFICIALS SEPTEMBER 30, 2009 TITLE

NAME

Mayor

Samuel L. Jones

City Council District 1 District 2 District 3 District 4 District 5 District 6 District 7

Fredrick D. Richardson, Jr. William Carroll Clinton L. Johnson John C. Williams Reggie Copeland, Sr. Connie Hudson Gina Gregory

Executive Director of Finance

Barbara S. Malkove

City Clerk

Lisa C. Lambert

viii

SAMUEL L. JONES MAYOR

Part II Financial Section

MANAGEMENT'S DISCUSSION AND ANALYSIS

MANAGEMENT’S DISCUSSION AND ANALYSIS This section of the City of Mobile’s Comprehensive Annual Financial Report (CAFR) presents City management’s discussion and analysis of the City’s financial performance during the fiscal year that ended on September 30, 2009. Please read this in conjunction with the City’s financial statements, which follow this section, and the additional information furnished in the letter of transmittal, which can be found in the introductory section of the CAFR. FINANCIAL HIGHLIGHTS 





 



The assets of the City of Mobile exceeded its liabilities at the close of the fiscal year by $415.1 million (net assets). Of this amount the City had a deficit in unrestricted net assets of $64.0 million offset by $13.3 million in restricted net assets and $465.8 million in capital assets net of related debt. The City’s total net assets increased $39.2 million, or 10.4%, as a result of this year’s operations. While net assets of our governmental activities increased $43.0 million, or 16.0%, the net assets of our business-type activities decreased $3.8 million, or 3.5%. At the close of the current fiscal year, the City’s governmental funds reported a combined fund balance of $78.6 million. This was a decrease of $44.6 million (36.2%) from the prior year. At the end of the current fiscal year, total fund balance for the General fund was $4.5 million, a decrease of 73.4% from the prior year. The City's only bond issue during the year was for the purchase of copy machines and amounted to $569,000 with 3.84% interest payments due semi-annually and maturing on August 15, 2012. Sales and use tax, the City’s single largest revenue source, declined $7.6 million or 5.2% from the prior year. OVERVIEW OF THE FINANCIAL STATEMENTS

The financial statements consist of four parts: management’s discussion and analysis (this section), the basic financial statements, and the narrative notes to the financial statements and the required supplementary information. The basic financial statements include two kinds of statements that present different views of the City’s finances.  

The first two statements are government-wide financial statements that provide both longterm and short-term information about the City’s overall financial status. The remaining statements are fund financial statements that focus on individual elements of the City government, reporting the City’s operations in more detail than the governmentwide statements.  The governmental funds statements tell how general government services like public safety were financed in the short-term as well as what remains for future spending.  Proprietary funds statements offer short- and long-term financial information about the activities the government operates like businesses such as the cruise terminal.

3

The financial statements also include narrative notes that explain some of the information in the financial statements and provide more detailed data. To assess the overall economic health of the City, additional non-financial factors, such as changes in the City’s tax base, planning and zoning actions, and the condition of the City’s roads and other infrastructure should be considered. USING THIS ANNUAL REPORT The Statement of Net Assets and the Statement of Activities, (pages 16-18) provide information about the activities of the City as a whole and present a longer-term view of the City's finances. Fund financial statements start on page 19. For governmental activities, these statements tell how these services were financed in the short term as well as what remains for future spending. Fund financial statements also report the City's operations in more detail than the government wide statements by providing information about the City's most significant funds. The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements start on page 36. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City's general fund budget. A budgetary comparison schedule has been provided for the general fund to demonstrate compliance with the budget starting on page 78. REPORTING THE CITY AS A WHOLE The Statement of Net Assets and the Statement of Activities One of the most important questions asked about the City's finances is "Is the City as a whole better off or worse off as a result of the year's activities?" The Statement of Net Assets and the Statement of Activities report information about the City as a whole and about its activities in a way that helps answer this question. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. All of the current year's revenues and expenses are taken into account regardless of when cash is received or paid. These two statements report the City's net assets and changes in them. You can think of the City's net assets - the difference between assets and liabilities - as one way to measure the City's financial health, or financial position. Over time, increases or decreases in the City's net assets are one indicator of whether its financial health is improving or deteriorating. You will need to consider other non-financial factors, however, such as changes in the City's tax bases and the condition of the City's drainage systems and roads, to assess the overall health of the City.

4

In the Statement of Net Assets and the Statement of Activities, we divide the City into three kinds of activities: • Governmental activities - Most of the City's basic services are reported here, including the police, fire, public works, parks and recreation departments and general administration. Sales, business license, property taxes, franchise fees, and state and federal grants finance most of these activities. • Business-type activities - The City charges a fee to customers to help it cover all or most of the cost of certain services provided. Convention center, civic center, the golf and tennis centers and parking facilities are reported here. • Component units - The City includes two separate legal entities in its report – Mobile Public Library and The Public Park and Recreation Board (Ladd-Peebles Stadium). Although legally separate, these "component units" are important because the City is financially accountable for them. More comprehensive information about the City's component units can be found in Note 1. REPORTING THE CITY'S MOST SIGNIFICANT FUNDS Fund Financial Statements The fund financial statements provide detailed information about the most significant funds – not the City as a whole. Some funds are required to be established by State Law and by bond covenants. However, the City Council established many other funds to help control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other money (like grants received from the Federal Transportation Authority and the Department of Justice). Major funds are separately reported while all others are combined into a single, aggregated presentation. Individual fund data for non-major funds is provided in the form of combining statements in a later section of this report. The City's two kinds of funds - governmental and proprietary - use different accounting approaches. • Governmental funds - Most of the City's basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City's general government operations and the basic services it provides. Government fund information helps you determine whether there are more or fewer resources that can be spent in the near future to finance the City's programs. We describe the relationship (or differences) between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds in a separate reconciliation following each fund financial statement. • Proprietary funds - When the City charges customers for the services it provides, whether to outside customers or to other units of the City, these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Assets and the Statement of Activities. In fact, the City's enterprise funds (a component of proprietary funds) are the same as the business-type activities we report in the government-wide statements but provide more detail and additional information, such as cash flows, for proprietary funds. We use internal service funds (the other component of proprietary funds) to report activities that provide supplies and services for the City's other programs and activities - such as the City's Motor Pool. Because internal service funds primarily serve governmental functions, they are included within the governmental activities of the government-wide financial statements.

5

THE CITY AS A WHOLE - CONDENSED FINANCIAL INFORMATION As year-to-year financial information is accumulated on a consistent basis, changes in net assets may be observed and used to discuss the changing financial position of the City as a whole. The City's net assets at fiscal year-end are $415.1 million. This is a $39.2 million increase over last year's net assets of $375.9 million. The following table provides a summary of the City's net assets:

Governmental Activities 2009 2008 Current and other assets Capital assets Total assets Long-term liabilites Other liabilites Total liabilites Net assets: Invested in capital assets, net of related debt Restricted Unrestricted Total net assets Total liabilities and net assets

City of Mobile, Alabama Summary of Net Assets (dollars are in thousands) Business-type Total Primary Activities Government 2009 2008 2009 2008

Amount Change

% Change

$ 97,032 602,927 $ 699,959

$ 148,314 490,010 $ 638,324

$

5,613 105,823 $ 111,436

$

6,347 108,923 $ 115,270

$ 102,645 708,750 $ 811,395

$ 154,661 598,933 $ 753,594

$ (52,016) 109,817 $ 57,801

(33.63)% 18.34 % 7.67 %

$ 345,932 42,495 388,427

$ 326,746 43,055 369,801

$

$

$ 346,932 49,353 396,285

$ 327,870 49,860 377,730

$ 19,062 (507) 18,555

5.81 % (1.02)% 4.91 %

360,785 13,331 (62,584) 311,532 $ 699,959

165,220 101,137 2,166 268,523 $ 638,324

1,000 6,858 7,858

104,970 (1,392) 103,578 $ 111,436

1,124 6,805 7,929

108,695 (1,354) 107,341 $ 115,270

465,755 13,331 (63,976) 415,110 $ 811,395

273,915 101,137 812 375,864 $ 753,594

191,840 70.04 % (87,806) (86.82)% (64,788) (7,978.82)% 39,246 10.44 % $ 57,801

7.67 %

The largest portion of the City's net assets (112.2%) reflects its investment in capital assets (e.g., land, buildings, infrastructure, equipment, etc.) less any related debt used to acquire those assets that are still outstanding, excluding any unspent proceeds of the debt issued. The City uses these capital assets to provide services to citizens; therefore, these assets are not available for future spending. Although the City's investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay debt must be provided from other sources, since capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City's net assets (3.2%) represents resources that are subject to restrictions as to how they may be used. The remaining balance of unrestricted net assets may be used to meet the City's on-going obligations to citizens and creditors. At the end of the current fiscal year, the City is able to report positive balances in invested in capital assets, net of related debt and restricted net assets but unrestricted net assets has a deficit balance of $62.6 million for governmental activities. This deficit arose mainly because of three factors. First, the City has elected to fund its other post-employment benefits (OPEB) obligation on a pay as you go basis. The OPEB expense for the City of Mobile is substantial and increased by $27.8 million during the current fiscal year. Second, due to a sluggish economy, tax revenues have fallen short of amounts originally anticipated. Finally, due to this revenue shortfall, the City has had to use its fund balances to finance daily operations.

6

Also, the unrestricted net assets for business-type activities show a deficit of $1.4 million due primarily to unrestricted deficits at the municipal garage of $3 million and unrestricted deficits at the WAVE Transit of $1.2 million offset by unrestricted net assets at the Mobile Convention Center of approximately $3.2 million. Comparative data is accumulated and presented to assist analysis. The following table provides a summary of the City’s changes in net assets: City of Mobile, Alabama Summary of Changes in Net Assets (dollars are in thousands) Governmental Activities 2009 2008 Program Revenues: Charges for services $ Operating grants and contributions Capital grants and contributions General revenues: Taxes Investment earnings Other Total revenues Program Expenses: General government Economic development Public safety Public works Culture and recreation Finance Interest on long-term debt Alabama Cruise Terminal Civic Center Convention Center Golf Course Firemedics Parking garage Tennis Center Affordable homes program WAVE Transit Total expenses Change in net assets before capital contributions and transfers Captial contributions Transfers Change in net assets Net assets, beginning Net assets, ending

$

55,461

$

51,140

Business-type Activities 2009 2008 $

11,842

$

10,947

1,939 4,647

5,189 3,180

3,330 -

3,667 83

175,545 1,010 6,298 244,900

181,771 3,150 5,550 249,980

9,543 16 156 24,887

98,695 1,430 113,063 45,892 20,374 6,823

49,311 984 96,010 40,955 22,192 5,274

15,717

36,120

301,994

250,846

(57,094) 105,131 (5,028) 43,009 268,523 311,532 $

(866) (26,333) (27,199) 295,722 268,523 $

Total Primary Government 2009 2008 $

67,303

$

62,087

Amount Change

$

5,216

% Change

8.40 %

5,269 4,647

8,856 3,263

(3,587) 1,384

(40.50)% 42.41 %

8,941 59 (164) 23,533

185,088 1,026 6,454 269,787

190,712 3,209 5,386 273,513

(5,624) (2,183) 1,068 (3,726)

(2.95)% (68.03)% 19.83 % (1.36)%

-

-

98,695 1,430 113,063 45,892 20,374 6,823

49,311 984 96,010 40,955 22,192 5,274

49,384 446 17,053 4,937 (1,818) 1,549

100.15 % 45.33 % 17.76 % 12.05 % (8.19)% 29.37 %

-

-

15,717

36,120

(20,403)

(56.49)%

415 3,686 10,981 1,518 5,478 270 510 8 10,812 335,672

4,134 9,922 1,303 5,633 265 543 16 10,244 282,906

415 (448) 1,059 215 (155) 5 (33) (8) 568 52,766

% (10.84)% 10.67 % 16.50 % (2.75)% 1.89 % (6.08)% (50.00)% 5.54 % 18.65 %

(65,885) 105,131 39,246 375,864 415,110 $

(9,393) (56,492) 105,131 (9,393) 48,639 385,257 (9,393) 375,864 $ 39,246

601.43 % % % (517.82)% (2.44)% 10.44 %

415 3,686 10,981 1,518 5,478 270 510 8 10,812 33,678 (8,791) 5,028 (3,763) 107,341 103,578 $

4,134 9,922 1,303 5,633 265 543 16 10,244 32,060 (8,527) 26,333 17,806 89,535 107,341 $

Graphic presentations of selected data from the summary tables follow to assist in the analysis of the City’s activities for fiscal year 2009.

7

GOVERNMENTAL REVENUES 2009

Other 2.57%

22.65% Charges for services

Investment earnings 0.41%

0.79% Operating grants and contributions

1.90% Capital grants and contributions

Taxes 71.68% Other

Investment earnings

Taxes

Capital grants and contributions

Operating grants and contributions

Charges for services

GOVERNMENTAL REVENUES 2008

Other 2.22%

20.46% Charges for services

Investment earnings 1.26%

2.08% Operating grants and contributions

1.27% Capital grants and contributions

Taxes 72.71% Other

Investment earnings

Taxes

Capital grants and contributions

Operating grants and contributions

Charges for services

As graphically portrayed above, the City is heavily reliant on taxes to support governmental operations. Taxes provided 71.68 % and 72.71% of the City's total governmental revenues in fiscal years 2009 and 2008, respectively.

8

GOVERNMENTAL FUNCTIONAL EXPENSES 2009

5.20% Interest on long-term debt 2.26% Finance 15.20% Public works General government 32.68% 6.75% Culture and recreation 0.47% Economic development

37.44% Public safety

GOVERNMENTAL FUNCTIONAL EXPENSES 2008

Interest on long-term debt 14.40% Finance 2.10%

19.66% General government 0.39% Economic development

Culture and recreation 8.85%

Public works 16.33% 38.27% Public safety

See the following page for discussion of these graphs.

9

Governmental activities Governmental activities increased the City's net assets by $43.0 million. The key elements of this increase are as follows:   

  

Excess expenses over revenue for governmental activities amounted to $239.9 million dollars. Investment earnings amounted to $1.0 million which was a decrease of $2.14 million from the prior year. Tax revenues amounted to $174.1 which was a decrease of $7.63 million during the year primarily due to the decrease in spending by consumers and the current condition of the national economy. Due to an annexation of land in October 2008 the City had capital contributions for adopted streets of $105.1 million. Other revenue amounted to $7.7 million. Transfers out of governmental activities totaled $5 million.

Governmental activity expenses increased over the prior year. Of the $301.99 million of governmental activity expenses, public safety was the largest operating cost, at 37.4% of total costs in 2009. For the government-wide full accrual statements, capital outlay expenses were eliminated and capital assets were reported. Business-type activities Business-type activities decreased the City's total net assets by $3.8 million. Business-type activities are shown comparing costs to revenues generated by related services. The golf course, parking garage and cruise terminal business-type activities are self-supporting with user charges and other revenues designed to recover costs. The civic center, convention center, Firemedics, WAVE Transit, tennis center, and Affordable Homes Program provided services with user charges that did not recover costs in the current year. These activities required subsidization by the City. The below graphs illustrate results of operations.

10

Revenues vs. Costs 2008

8,000

6,000

4,000

2,000

0

Civic Center

Convention Center

Golf course

Firemedics

Parking garage

Tennis center

Alabama Cruise Terminal

BUSINESS-TYPE ACTIVITIES

Alabama Cruise Terminal

Affordable homes program

Tennis center

Parking garage

Firemedics

Golf course

Convention Center

Civic Center

Costs

Revenues

Costs Revenue

WAVE Transit

BUSINESS ACTIVITY

WAVE Transit

10,000

Dollar Value in Thousands

10,000

8,000

6,000

4,000

2,000

0

Dollar Value in Thousands

BUSINESS-TYPE ACTIVITIES Revenues vs. Costs 2009

BUSINESS ACTIVITY

11

THE CITY'S FUNDS Governmental Funds The focus of the City's governmental funds is to provide information on short-term inflows, outflows, and balances of expendable resources. Such information is useful in comparing the City's resources at the end of the year with upcoming 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. Governmental funds reported ending fund balance of $78.6 million, of which $62.0 million is unreserved, indicating availability for continuing the City's service requirements. The reserved fund balances include $8.0 million committed to encumbrances outstanding at year end, $1.6 million committed for long-term notes receivable, $2.5 million committed to grant administration, $0.7 committed to law enforcement, $3.1 million committed to economic development, and $0.7 million committed to road and bridge repair and construction. The total ending fund balances of governmental funds show a $44.6 million decrease from the prior year. This decrease is due primarily to $22.7 million expenditures for the construction of the Public Safety Complex and for ThyssenKrupp Steel & Stainless plant in the 2008 General Capital Improvements Projects Fund. Additionally, there was a $12.4 million reduction in fund balance in the General Fund. This can be attributed to an unfavorable $7.2 million variance in budgeted revenues and a $3.8 million increase in expenditures resulting primarily from an increase of $3 million in transfers to other funds. There was also a $5.3 million reduction in fund balance in Governmental Funds - Non Major and a $3.2 million reduction in fund balance in the 2006 G.O. Refunding and Capital Projects Fund. Major Governmental Funds The General Fund is the City's primary operating fund and the largest source of day-to-day service delivery. The fund balance in the General Fund decreased by approximately $12.4 million. See General Fund Budgetary Highlights and the preceeding paragraph for more information. The Capital Improvements Fund has a fund balance of $24.7 million which includes a net decrease of $0.4 million. The 2006 G.O. Refunding and Capital Projects fund has a fund balance of $4.8 million. This fund accounts for expenditures related to projects financed by the proceeds of the 2006 G.O. Refunding and Capital Warrants. The fund balance in this fund decreased by $3.2 million as a result of increased capital outlays. Proprietary Funds The proprietary fund statements share the same focus as the government-wide statements, reporting both short-term and long-term information about financial status.

12

Enterprise Funds The City's enterprise funds consist of the Alabama Cruise Terminal, the Mobile Civic Center, the Municipal Parking Garage, the Azalea City Golf Course, Firemedics, Mobile Convention Center, the Tennis Center, Affordable Homes Program and WAVE Transit. The total net assets of the Enterprise Funds decreased by $3.7 million during the current fiscal year. This overall decrease is attributable to decreased subsidization in the current year. Internal Service Funds Internal Service Funds are used to account for the financing of goods or services provided by one department to other departments of the City on a cost-reimbursement basis. The City's three internal service funds include the Motor Pool Fund, Insurance Fund and Employee Health Fund. The net assets of the funds decreased by $3.4 million from the prior year, primarily due to increases in health benefits paid. GENERAL FUND BUDGETARY HIGHLIGHTS The deficiency of revenues over expenditures on a budgetary basis during the year was $10.5 million. The following are the main components of the deficiency: • Tax revenue was under expected budgeted amounts by $11.3 million due to a severe slowdown in the local and national economy. • Departmental expenditures were under budget by $.6. There were no changes to anticipated revenues from the original to the final amended budget. The budget for fiscal year 2009 was approximately $202 million. This was an increase of $36 million from the prior year amended budget. Total revenues were approximately $7.2 million under budget while expenditures were $3.3 million over budget. This was due to decreases in tax revenue and increases in nondepartmental expenses. Total revenues included more than $4.1 million in unbudgeted grant proceeds from state and federal government sources. Grant expenditures were also unbudgeted so that total expenditures were over budget for approximately the same amount. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets As of September 30, 2009, the City's investment in capital assets, net of accumulated depreciation for governmental and business-type activities was $360.8 million and $105.0 million, respectively. The overall increase was $191.8 million or 70.0% from 2008 for the City as a whole. See Note 7 for additional information about changes in capital assets during the fiscal year and construction commitments outstanding at the end of the year.

13

Capital Assets Net of Accumulated Depreciation (dollars are in thousands)

Non-depreciable capital assets: Land Infrastructurein-progress Constructionin-progress Depreciable capital assets, net Buildings Improvements Vehicular equip Other equip Infrastructure Total capital assets, net

Governmental Activities 2009 2008

Business-type Activities 2009 2008

$

$ 10,381

24,547

$

24,124

$

-

8,574 -

Total 2009 $

2008

Total % Change

34,928

$ 32,698

6.82 %

54,519

48,749

11.84 %

54,519

48,749

30,866

30,348

1,054

993

31,920

31,341

1.85 %

35,904 67,208 17,400 12,867 359,617

30,332 70,541 17,368 14,263 254,285

82,837 6,239 3,007 2,304 -

86,261 6,223 4,042 2,830 -

118,741 73,447 20,407 15,171 359,617

116,593 76,764 21,410 17,093 254,285

1.84 % (4.32)% (4.68)% (11.24)% 41.42 %

$ 602,928

$ 490,010

$ 105,822

$ 108,923

$ 708,750

$ 598,933

18.34 %

Long-Term Debt As of September 30, 2009, the City had $288.3 million of long-term debt outstanding, including bonds and warrants payable, notes payable, and obligations under capital leases. In the current fiscal year, the City retired principal on long-term debt in the amount of $9,241,828. Interest payments on long-term debt totaled $14,203,382. In February, 2009, the City issued Series 2009 General Obligation Warrants in the amount of $569,000 for the purchase of copy machines. The debt has a final maturity date of August 15, 2010 with semi-annual interest and annual principal payments. See Note 8 for additional information about changes in long-term debt during the fiscal year. The following table summarizes the City's longterm debt: Outstanding Long-term Debt (dollars are in thousands) Governmental Activites 2009 Bonds and warrants $ 284,241 Notes payable 1,580 Obligations under capital leases 2,462 Total long-term debt $ 288,283

$

$

2008 291,060 1,790 5,660 298,510

Business-type Activities

$

$

2009 853 853

$

$

2008 1,003 1,003

Total 2009 $ 284,241 1,580

2008 $291,060 1,790

Total % Change (2.34)% (11.73)%

3,315 $ 289,136

6,663 $299,513

(50.25)% (3.46)%

All of the City's general obligation bond issues are insured and as a result, carry the highest ratings from Standard & Poor's Corporation (AAA) and Moody's Investor Services (Aaa). Subsequent to year end, both S & P and Moody's increased the City's underlying rating. Under current State of Alabama statutes, the City's general obligation bonded debt issuances are subject to a legal limitation based on 20 percent of total assessed value of real and personal property. As of September 30, 2009, the City's permissible debt limit exceeded actual debt by approximately $246 million.

14

BASIC FINANCIAL STATEMENTS

CITY OF MOBILE, ALABAMA STATEMENT OF NET ASSETS September 30, 2009 Primary Government

ASSETS Cash, equity in pooled cash and investments Receivables - net Inventories Internal balances Other assets Nondepreciable capital assets Depreciable capital assets, net Total Assets LIABILITIES Accounts payable and accrued liabilities Unearned revenue Pension contribution Noncurrent liabilities: Due in less than 1 year: Bonds and warrants payable Notes payable Capital lease obligations Compensated absences Insurance claims Landfill postclosure liability Due in more than 1 year: Bonds and warrants payable Notes payable Capital lease obligations Compensated absences Self-insured liability - legal Insurance claims Landfill postclosure liability Postemployment benefits Total liabilies

Governmental Activities $

$ $

Business-Type Activities

68,100,814 22,099,379 2,171,757 2,004,829 2,654,684 109,931,782 492,995,879 699,959,124

$

17,422,232 408,347 7,902,527

$

4,485,327 $ 2,696,018 274,450 (2,004,829) 162,664 11,435,235 94,387,482 $ 111,436,347 $ 1,830,649 4,787,611 -

Component Units

Total

$

72,586,141 24,795,397 2,446,207 2,817,348 121,367,017 587,383,361 811,395,471

$

19,252,881 5,195,958 7,902,527

$

$

3,549,910 603,200 968,937 5,122,047 493,479 -

9,427,017 220,000 1,582,883 818,750 4,675,022 37,891

156,838 83,416 -

9,427,017 220,000 1,739,721 902,166 4,675,022 37,891

93,293 50,680 -

274,813,715 1,360,000 879,154 14,053,411 420,000 4,737,918 933,126 48,735,000 388,426,993

695,707 304,343 7,858,564

274,813,715 1,360,000 1,574,861 14,357,754 420,000 4,737,918 933,126 48,735,000 396,285,557

231,772 453,571 1,322,795

NET ASSETS Invested in capital assets, net of related debt

360,784,525

104,970,172

465,754,697

895,918

Restricted for: Capital projects Debt Service Economic development Grant programs Unrestricted Total net assets Total liabilities and net assets

4,331,808 3,367,694 3,164,397 2,467,570 (62,583,863) (1,392,389) 311,532,131 103,577,783 699,959,124 $ 111,436,347 $

$

4,331,808 3,367,694 3,164,397 2,467,570 (63,976,252) 415,109,914 811,395,471

$

2,903,334 3,799,252 5,122,047

See Accompanying Notes to the Financial Statements. 16

CITY OF MOBILE, ALABAMA STATEMENT OF ACTIVITIES For the Year Ended September 30, 2009 Program Revenues Operating Grants and Contributions

Charges for Services

Expenses

Capital Grants and Contributions

Primary Government: Governmental Activities: General government Economic development Public safety Public works Culture and recreation Finance Interest on long-term debt Total governmental activities

$

98,695,339 1,429,622 113,062,743 45,892,056 20,373,562 6,823,212 15,717,193 301,993,727

$

13,394,552 41,261,597 267,731 537,176 55,461,056

$

285,455 1,653,334 1,938,789

$

1,678,902 2,913,671 54,646 4,647,219

Business-Type Activities: Alabama Cruise Terminal Civic Center Convention Center Golf course Firemedics Parking garage Tennis Center Affordable homes program WAVE Transit Total business-type activities Total primary government

415,494 3,685,566 10,981,125 1,518,478 5,478,439 270,307 509,708 7,875 10,812,366 33,679,358 335,673,085

1,058,523 1,754,181 3,576,172 1,509,422 2,425,990 411,804 78,687 1,027,542 11,842,321 67,303,377

3,330,363 3,330,363 5,269,152

4,647,219

10,263,051 1,019,003 11,282,054

891,857 912,737 1,804,594

1,409,777 1,409,777

204,687 204,687

Component units: Mobile Public Library Public Park and Recreation Board Total component units

$

$

$

$

General Revenues: Taxes: Real and personal property tax Sales tax Gasoline tax Room tax Beer and liquor tax Rental and leasing tax Cigarette stamp tax Other tobacco tax Financial excise tax Other tax revenue Grants and contributions not restricted to specific programs Investment earnings Other Capital contributions Transfers Total General Revenues and Transfers Change in Net Assets Net Assets Beginning of Year Net Assets End of Year

See Accompanying Notes to the Financial Statements. 17

Net (Expense) Revenue and Changes in Net Assests

Governmental Activities

$

Business-Type Activities

(83,336,430) 1,484,049 (70,093,166) (45,624,325) (19,836,386) (6,823,212) (15,717,193) (239,946,663)

$

$

(239,946,663)

Component Units

Totals

643,029 (1,931,385) (7,404,953) (9,056) (3,052,449) 141,497 (431,021) (7,875) (6,454,461) (18,506,674) (18,506,674)

(83,336,430) 1,484,049 (70,093,166) (45,624,325) (19,836,386) (6,823,212) (15,717,193) (239,946,663)

$

643,029 (1,931,385) (7,404,953) (9,056) (3,052,449) 141,497 (431,021) (7,875) (6,454,461) (18,506,674) (258,453,337)

$

$

15,969,310 132,218,742 7,735,285 4,795,120 2,137,149 4,104,708 2,253,663 455,907 1,320,726 4,554,032 1,009,662 6,298,450 105,130,798 (5,027,942) 282,955,610 43,008,947 268,523,184 311,532,131 $

7,974,021 1,568,826 16,563 155,907 5,027,942 14,743,259 (3,763,415) 107,341,198 103,577,783 $

15,969,310 140,192,763 7,735,285 6,363,946 2,137,149 4,104,708 2,253,663 455,907 1,320,726 4,554,032 1,026,225 6,454,357 105,130,798 297,698,869 39,245,532 375,864,382 415,109,914

-

$

(7,756,730) (106,266) (7,862,996)

$

7,508,371 26,989 7,535,360 (327,636) 4,126,888 3,799,252

See Accompanying Notes to the Financial Statements. 18

GOVERNMENTAL FUNDS

Governmental funds are those through which most governmental functions of the City are financed. General Fund Capital Improvements Fund 2006 G.O. Refunding and Capital Projects Fund 2008 General Capital Improvement Projects

CITY OF MOBILE, ALABAMA BALANCE SHEET GOVERNMENTAL FUNDS September 30, 2009

Capital Improvements Fund

General Fund ASSETS Cash, equity in pooled cash and investments Receivables, net Due from other funds Inventories Other assets Total Assets LIABILITIES Accounts payable and accrued liabilities Deferred revenue Due to other funds Compensated absences - terminated employees Insurance claims payable Total liabilities FUND BALANCES Reserved for: Encumbrances Long-term notes receivable Grant administration Law enforcement Economic development Road and bridge repair Road and bridge construction Unreserved, reported in: General fund Capital projects funds Debt service funds Total fund balances Total liabilities and fund balances

$

$ $

$

17,452,909 5,469,750 2,171,757 10,000 25,104,416

$

11,976,250 408,348 7,389,240 204,688 640,048 20,618,574

$

$

13,964,837 3,455,830 8,051,026 25,471,693 334,652 115,954 350,000 800,606

1,034,392 1,580,000 2,467,570 670,839 -

6,996,236 -

(1,266,959) 4,485,842 25,104,416

17,674,851 24,671,087 25,471,693

$

See Accompanying Notes to the Financial Statements. 19

2006 G. O. Refunding and Capital Projects Funds $

$ $

2008 General Capital Improvements Projects

5,074,912 5,074,912

$

267,342 267,342

$

$

-

$

4,807,570 4,807,570 5,074,912

Governmental Funds - Non Major

18,576,325 18,576,325

$

717,534 717,534

$

$

-

$

17,858,791 17,858,791 18,576,325

Total Governmental Funds

27,811,805 1,119,735 18,500 28,950,040

$

1,573,410 606,995 2,180,405

$

$

10,153 3,164,397 608,929 103,166

$

19,515,295 3,367,695 26,769,635 28,950,040

65,427,879 22,028,474 13,539,276 2,171,757 10,000 103,177,386 14,869,188 524,302 8,346,235 204,688 640,048 24,584,461

8,040,781 1,580,000 2,467,570 670,839 3,164,397 608,929 103,166

$

(1,266,959) 59,856,507 3,367,695 78,592,925 103,177,386

See Accompanying Notes to the Financial Statements. 20

CITY OF MOBILE, ALABAMA RECONCILIATION OF THE BALANCE SHEET GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS September 30, 2009 Total Fund Balances - Governmental Funds Amounts reported for governmental activities in the Statement of Net Assets are different because: Capital Assets used in governmental activities are not financial resources and therefore are not reported as assets in governmental funds. Governmental capital assets Less accumulated depreciation Other assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Bond costs Less accumulated amortization Long-term liabilities are not due and payable in the current period and therefore are not reported in the governmental funds. Accrued interest payable Pension contribution Bonds and warrants payable Notes payable Capital lease obligations Compensated absences Insurance claims payable Landfill postclosure liability OPEB liability Deferred revenue in governmental funds is susceptible to full accrual accounting in the government-wide financial statements.

$

78,592,925

$ 760,074,036 (168,416,132)

591,657,904

3,138,951 (494,266)

2,644,685

(1,757,950) (7,902,527) (284,240,732) (1,580,000) (1,785,767) (14,667,473) (6,658,064) (971,017) (48,735,000)

Revenue that is deferred because it is not available to finance current expenditures. Internal service funds are used by management to charge the costs of certain activities to individual funds. The assets and liabilities of the internal service funds are reported with governmental activities. Total net Assets - Governmental Activities

(368,298,530)

115,954

6,819,193 $ 311,532,131

See Accompanying Notes to the Financial Statements. 21

CITY OF MOBILE, ALABAMA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Year Ended September 30, 2009

Capital Improvements Fund

General Fund Revenues Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures State and federal assistance Interest Other revenue Total revenues

$

140,661,823 34,199,725 1,548,996 8,167,239 4,691,317 4,093,733 468,552 1,639,010 195,470,395

$

18,319,089 2,824,202 21,143,291

Expenditures Current: General government Economic development Public safety Public works Culture and recreation Finance Nondepartmental Capital outlay Debt Service: Principal payments Interest and fees Total expenditures Excess (deficiency) of revenues over expenditures

18,919,215 1,008,755 86,342,817 37,334,095 15,154,032 5,010,643 37,036,130 -

6,893,817

200,805,687 (5,335,292)

3,130,851 177,200 10,201,868 10,941,423

Other financing sources (uses) Transfers in Transfers out Capital-related debt issued Proceeds from disposal of assets Total other financing sources (uses) Net change in fund balance Fund balances, beginning of the year Fund balances, end of the year

7,750,316 (14,872,939) 75,602 (7,047,021) (12,382,313) 16,868,155 4,485,842

1,559,985 (13,479,707) 569,000 (11,350,722) (409,299) 25,080,386 24,671,087

$

$

See Accompanying Notes to the Financial Statements. 22

2006 G. O. Refunding and Capital Projects Funds

$

-

2008 General Capital Improvements Projects

$

78,749

3,258,288

23,021,897

3,327,851 12,164,808

18,919,215 1,008,755 86,342,817 37,334,095 15,154,032 5,010,643 40,363,981 45,338,810

3,258,288 (3,179,539)

23,021,897 (22,727,845)

8,890,000 14,263,651 38,646,310 (16,246,533)

12,020,851 14,440,851 275,934,050 (36,547,786)

(3,179,539) 7,987,109 4,807,570

(22,727,845) 40,586,636 17,858,791

23,673,723 (13,365,915) 10,307,808 (5,938,725) 32,708,360 26,769,635

32,984,024 (41,718,561) 569,000 75,602 (8,089,935) (44,637,721) 123,230,646 78,592,925

78,749

$

$

$

15,829,795 2,801,113 2,408,569 215,209 1,145,091 22,399,777

Total Governmental Funds

294,052 294,052

-

$

Governmental Funds - Non Major

$

$

174,810,707 37,000,838 1,548,996 8,167,239 4,691,317 6,502,302 1,056,562 5,608,303 239,386,264

See Accompanying Notes to the Financial Statements. 23

CITY OF MOBILE, ALABAMA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the Year Ended September 30, 2009 Net Change in Fund Balances - Total Governmental Funds

$ (44,637,721)

Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report the acquisition of capital assets as expenditures. However, in the statement of activities, the cost of those assets are capitalized and depreciated over their estimated useful lives. Expenditures for capital assets Less accumulated depreciation

$

22,874,767 (16,287,874)

6,586,893

Contributions of capital assets are not reported as income in governmental funds

105,130,798

Change in deferred revenue

11,014

Proceeds from debt obligations provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net assets. Repayment of principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statements of net assets. Capital-related debt issued Principal payments - capital lease obligations Principal payments - bonds and notes payable

(569,000) 2,871,214 9,241,828

11,544,042

Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in the governmental funds. Amortization of deferred amount on refunding Amortization of current year bond premium Amortization of current year bond costs Amoritzation of current year bond discount Change in long-term compensated absences Change in long-term insurance claims Change in long-term landfill postclosure liability Change in accrued interest Change in pension contribution Change in OPEB liability Gain (loss) on disposal of fixed assets

(364,361) 184,374 374,292 (1,463,965) (1,044,460) 1,680,435 36,442 195,886 (4,193,256) (27,799,000) 202,580

(32,191,033)

Internal service funds are used by management to charge the costs of certain actvities to individual funds. The net revenue of the internal service funds is reported with governmental activities.

Change in net assets of governmental activities

$

(3,435,046) 43,008,947

See Accompanying Notes to the Financial Statements. 24

PROPRIETARY FUNDS

Proprietary funds are used to account for the City's ongoing organizations and activities which are similar to those often found in the private sector. Mobile Civic Center Mobile Convention Center WAVE Transit Municipal Parking Garage Alabama Cruise Terminal

CITY OF MOBILE, ALABAMA BALANCE SHEET PROPRIETARY FUNDS September 30, 2009

Mobile Convention Center

Mobile Civic Center ASSETS Current assets: Cash, equity in pooled cash and investments Receivables, net Due from other funds Other assets Inventories Total Current Assets Noncurrent assets: Non-depreciable capital assets Depreciable capital assets, net Total noncurrent assets Total assets LIABILITIES Current liabilities: Accounts payable and accrued liabilities Deferred revenue Capital lease obligations - current portion Compensated absences Insurance claims payable Due to other funds Total current liabilities Noncurrent liabilities: Compensated absences Self-insured liability - legal Capital lease obligations, net of current portion Total noncurrent liabilities Total liabilities NET ASSETS Invested in capital assets, net of related debt Unrestricted Total net assets Total liabilities and fund balances

$

$

$

175,269 16,494 24,010 20,684 236,457 224,350 9,673,094 9,897,444 10,133,901

247,699 183,913 431,612

$

$

$

2,795,708 786,381 6,018 44,721 3,632,828 4,999,575 42,453,313 47,452,888 51,085,716

293,750 126,657 420,407

-

$

$

$

$

-

431,612 9,897,444 (195,155) 9,702,289 10,133,901

WAVE Transit

$

1,807,222 17,199,959 19,007,181 20,262,755

845,679 156,838 83,416 1,173,555 2,259,488 304,343 -

420,407 47,452,888 3,212,421 50,665,309 51,085,716

136,390 548,003 279,714 132,636 158,831 1,255,574

695,707 1,000,050 3,259,538

$

18,154,636 (1,151,419) 17,003,217 20,262,755

See Accompanying Notes to the Financial Statements. 25

Governmental Activities

Municipal Parking Garage

Alabama Cruise Terminal

$

$

$

$

456,275 235,000 780,000 1,471,275 1,895,790 4,920,659 6,816,449 8,287,724

4,477,041 4,477,041

$

$

-

$

50,753 18,345,324 18,396,077 18,804,750

50,753 430,000 480,753

$

$

$

-

4,477,041 6,816,449 (3,005,766) 3,810,683 8,287,724

408,673 408,673

Other Enterprise Funds

$

18,396,077 (72,080) 18,323,997 18,804,750

$

2,457,545 1,795,133 4,252,678 5,926,044

11,435,235 94,387,482 105,822,717 $ 114,500,890

$

392,769 1,460,987 1,853,756

$

$

1,853,756

$

4,252,678 (180,390) 4,072,288 5,926,044

4,485,326 2,696,019 1,059,714 162,664 274,450 8,678,173

Internal Service Funds

513,011 1,110,141 50,214 1,673,366

-

480,753

Totals

1,830,650 4,787,611 156,838 83,416 3,064,542 9,923,057

$

2,672,937 70,904 2,743,841 11,269,758 11,269,758 14,013,599

795,095 149,660 2,114,828 3,188,213 6,247,796

304,343 -

420,000

695,707 1,000,050 10,923,107

526,610 946,610 7,194,406

104,970,172 (1,392,389) 103,577,783 $ 114,500,890

$

9,088,123 (2,268,930) 6,819,193 14,013,599

See Accompanying Notes to the Financial Statements. 26

CITY OF MOBILE, ALABAMA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS September 30, 2009

Mobile Convention Center

Mobile Civic Center OPERATING REVENUES Facility rent Sales revenue Parking fees User charges Concessions Miscellaneous revenue Employee Contributions Total operating revenues

$

404,182 311,714 712,068 158,868 167,349 1,754,181

$

431,760 122,681 2,368,878 568,158 84,695 3,576,172

OPERATING EXPENSES Utilities Materials Cost of goods sold Personnel services Professional and technical Commodities Insurance benefit payments Self-insured liability - legal Event expenses Other charges Depreciation Capital outlay Total operating expenses Operating income (loss)

746,492 1,191,906 263,440 98,369 628,924 168,604 587,831 3,685,566 (1,931,385)

736,713 4,280,201 3,391,049 320,669 64,997 931,063 1,256,433 10,981,125 (7,404,953)

NONOPERATING REVENUES (EXPENSES) Taxes Miscellaneous revenue Investment income Interest and fees Gain (loss) on disposal of assets Operating grants and contributions Cost reimbursement Damaged vehicles reimbursement Net nonoperating revenues (expenses) Net income (loss) before contributions and transfers Transfers in Transfers out Change in net assets Net assets - beginning Net assets - end of the year

(1,931,385) 1,178,394 (752,991) 10,455,280 9,702,289

9,542,847 9,542,847 2,137,894 (3,800,000) (1,662,106) 52,327,415 50,665,309

$

$

WAVE Transit

$

972,549 54,992 1,027,541 253,495 6,280,201 1,641,003 316,218 647,225 1,632,295 10,770,437 (9,742,896) -

$

14 (41,394) 100,814 3,330,363 3,389,797 (6,353,099) 6,610,617 (1,226,845) (969,327) 17,972,544 17,003,217

See Accompanying Notes to the Financial Statements. 27

Governmental Activities

Municipal Parking Garage

Alabama Cruise Terminal

$

$

411,804 411,804 22,307 25,000 201,766 21,233 270,306 141,498 -

$

3,880 (2,682) 1,198 142,696 142,696 3,667,987 3,810,683

$

1,058,523 1,058,523

Other Enterprise Funds

$

161,982 3,840,364 5,981 5,772 4,014,099

Totals

$

1,247,746 161,982 434,395 7,893,859 733,007 1,371,331 11,842,320

Internal Service Funds

$

19,592,734 4,080,025 23,672,759

(40,753) 405,494 50,754 415,495 643,028

203,433 128,803 5,705,358 274,753 566,102 370,306 127,212 138,534 7,514,501 (3,500,402)

1,940,133 128,803 17,457,666 3,929,242 2,607,697 316,218 693,921 2,142,198 4,211,031 210,521 33,637,430 (21,795,110)

44,423 2,759,030 146,578 941,035 23,724,248 410,083 983,637 1,942,412 30,951,446 (7,278,687)

643,028 (1,212,621) (569,593) 18,893,590 18,323,997

12,669 57,242 69,911 (3,430,491) 3,478,397 47,906 4,024,382 4,072,288

9,542,847 16,563 (41,394) 155,374 3,330,363 13,003,753 (8,791,357) 11,267,408 (6,239,466) (3,763,415) 107,341,198 $ 103,577,783

81,717 3,840 (36,850) 14,974 27,236 46,128 137,045 (7,141,642) 4,606,595 (900,000) (3,435,047) 10,254,240 6,819,193

$

$

See Accompanying Notes to the Financial Statements. 28

CITY OF MOBILE, ALABAMA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the year ended September 30, 2009

Mobile Convention Center

Mobile Civic Center Cash flows from operating activities Cash received from: User charges Sales revenue Internal billings Employee contributions Facility rent Parking fees Concessions Miscellaneous Cash payments for insurance claims Cash payments for operating expenses Cash payments for interfund services use Cash payments to employees for services Net cash provided (used) by operating activities

$

Cash flows from non-capital financing activities Taxes Federal operating grants received Miscellaneous income Cost reimbursements Transfers in from other funds Transfers out Net cash provided by non-capital financing activities Cash flows from capital and related financing activities Interest payments Acquisition of capital assets Proceeds from disposal of capital assets Reimbursement for damaged vehicles Payments on capital leases Federal capital grants received Transfers from other funds Net cash used by capital and related financing activities Cash flows from investing activities Investment income received Net cash flows provided by investing activities Net increase (decrease) in pooled cash and investments Pooled cash and investments - beginning of the year Pooled cash and investments - end of year

$

712,068 495,890 311,714 158,868 187,334 (2,109,393) 271,930 (1,191,906) (1,163,495)

$

2,335,017 431,760 122,681 568,158 41,915 (5,453,836) (4,280,201) (6,234,506)

WAVE Transit

$

1,080,434 (2,926,148) (5,820,435) (7,666,149)

1,178,394 -

9,542,846 (3,800,000)

3,167,939 6,535,200 (2,056,390)

1,178,394

5,742,846

7,646,749

-

-

(41,928) (859,941) 100,814 (150,545) 703,560 171,988

-

-

(76,052)

-

-

14,899 160,370 175,269

$

(491,660) 3,287,368 2,795,708

14 14

$

(95,438) 231,828 136,390

See Accompanying Notes to the Financial Statements. 29

Governmental Activities

Municipal Parking Garage

Alabama Cruise Terminal

$

$

309,763 (99,320) (430,000) (219,557)

$

3,784,777 161,982 5,981 5,772 (1,649,583) (5,695,224) (3,386,295)

Totals

$

7,912,296 161,982 1,237,413 434,395 733,007 1,496,215 (12,197,527) 271,930 (16,987,766) (16,938,055)

Internal Service Funds

$

125,164 19,566,815 3,954,861 (23,536,436) (4,860,300) 2,510,864 (146,398) (2,385,430)

-

(1,212,621)

3,478,397 -

9,542,846 3,167,939 11,191,991 (7,069,011)

81,717 27,236 4,606,595 (900,000)

-

(1,212,621)

3,478,397

16,833,765

3,815,548

-

(110,653) -

(97,567) 11,860 -

(41,928) (1,068,161) 112,674 (150,545) 703,560 171,988

(36,850) (1,937,823) (986,832) 46,128 (535,393) -

-

(110,653)

(85,707)

(272,412)

(3,450,770)

12,669 12,669

16,563 16,563

3,880 3,880

$

1,261,194 40,753 430,000 1,731,947

Other Enterprise Funds

(215,677) 671,952 456,275

-

$

408,673 408,673

$

19,064 493,947 513,011

$

(360,139) 4,845,465 4,485,326

3,840 3,840

$

(2,016,812) 4,689,749 2,672,937

See Accompanying Notes to the Financial Statements. 30

CITY OF MOBILE, ALABAMA STATEMENT OF CASH FLOWS (CONT'D) PROPRIETARY FUNDS For the Year Ended September 30, 2009

Mobile Convention Center

Mobile Civic Center Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities Depreciation Change in assets and liabilities Decrease (increase) in: Accounts receivable Materials and supplies Increase (decrease) in: Accounts payable Accrued liabilities Insurance claims payable Self-insured liability - legal Due to other funds Deferred revenue Total adjustments Net cash provided (used) by operating activities

$

(1,931,385)

$

587,831

$

(7,404,953)

WAVE Transit

$

1,256,433

(9,742,896) 1,632,295

363,638 (22,814)

(15,861) (966)

17,766 (33,477)

(160,765) 767,890 (1,163,495)

(69,159) 1,170,447 (6,234,506)

(34,729) 494,892 2,076,747 (7,666,149)

$

$

See Accompanying Notes to the Financial Statements. 31

Governmental Activities

Municipal Parking Garage

Alabama Cruise Terminal

$

$

141,498 201,766

-

$

(30,782) (430,000) (102,040) (361,056) (219,558)

$

643,028

Other Enterprise Funds

$

(3,500,402)

Totals

$ (21,795,110)

Internal Service Funds

$

405,494

127,212

202,671 -

(55,587) (2,317)

512,627 (59,574)

(88,386) -

50,754 430,000 1,088,919 1,731,947

(12,504) 10,136 47,167 114,107 (3,386,295)

(257,185) 505,028 47,167 (102,040) 4,857,054 $ (16,938,056)

113,976 181 410,083 4,127 2,510,864 4,893,257 (2,385,430)

$

4,211,031

(7,278,687) 1,942,412

$

See Accompanying Notes to the Financial Statements. 32

COMPONENT UNITS

Mobile Public Library The Public Park and Recreation Board

CITY OF MOBILE, ALABAMA STATEMENT OF NET ASSETS COMPONENT UNITS September 30, 2009

Mobile Public Library ASSETS Cash, equity in pooled cash and investments Receivables: Accounts, notes and other - net Depreciable capital assets, net Total assets LIABILITIES Current liabilities: Accounts payable and accrued liabilities Due within one year: Compensated absences

$

3,414,300

$

135,610

$

164,574 760,421 4,339,295

$

347,225

Due after one year: Compensated absences Notes payable Total liabilities NET ASSETS Invested in capital assets, net of related debt Unrestricted Total net assets Total liabilities and net assets

Public Park and Recreation Board

$

Total $

3,549,910

$

438,626 208,516 782,752

$

603,200 968,937 5,122,047

$

146,254

$

493,479

50,680 -

93,293

50,680 93,293

453,571 851,476

231,772 471,319

453,571 231,772 1,322,795

760,421 2,727,398 3,487,819 4,339,295

135,497 175,936 311,433 782,752

895,918 2,903,334 3,799,252 5,122,047

$

$

See Accompanying Notes to the Financial Statements. 33

CITY OF MOBILE, ALABAMA STATEMENT OF ACTIVITIES COMPONENTS UNITS For the year ended September 30, 2009

Program Revenues

Expenses Mobile Public Library Culture and recreation

$

Total Mobile Public Library Public Park and Recreation Board Culture and recreation Total Public Park and Recreation Board Total component units

$

10,263,051

Operating Grants and Contributions

Charges for Services

$

891,857

$

1,409,777

Capital Grants and Contributions

$

10,263,051

891,857

1,019,003

912,737

-

-

1,019,003

912,737

-

-

11,282,054

$

1,804,594

1,409,777

204,687

$

1,409,777

204,687

$

204,687

General Revenues: Payment from City of Mobile Payment from City of Saraland Grants, entitlements and contributins not restriced to specific programs Interest income Total general revenues Change in net assets Net assets - beginning Net assets - ending

See Accompanying Notes to the Financial Statements. 34

Net (Expenses) Revenue and Changes in Net Assets Public Park and Recreation Board

Public Library

$

(7,756,730)

Totals

$

(7,756,730)

(7,756,730) (7,756,730)

$

(106,266)

(106,266)

(106,266)

(106,266) (7,862,996)

6,986,104 165,000

-

6,986,104 165,000

357,267

-

357,267

26,989

-

26,989

7,535,360

-

7,535,360

(221,370)

(106,266)

3,709,189 $

3,487,819

(327,636)

417,699 $

311,433

4,126,888 $

3,799,252

See Accompanying Notes to the Financial Statements. 35

NOTES TO THE FINANCIAL STATEMENTS

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 1 - ORGANIZATION AND REPORTING ENTITY Organization The City of Mobile, Alabama (the City) was incorporated on January 20, 1814 under the provisions of Act 1911, No. 281, page 330; Code 1940. The City operates under a mayor-council form of government. The City engages in a comprehensive range of municipal services, including public safety, street and drainage, sanitation, health and social services, culture and recreation, public improvements, public transportation, planning and zoning, and general administrative services. Reporting Entity The financial statements of the City have been prepared in conformity with the accounting principles generally accepted in the United States as specified by the Governmental Accounting Standards Board (GASB). As required by accounting principles generally accepted in the United States, these financial statements present the primary government (the City) and its discretely presented component units, entities for which the government is considered financially accountable. Because the City appoints the Boards of Directors for these entities and there is a financial burden or benefit from these entities, they are considered governmental fund type component units and are reported in a separate column in the government-wide statements to emphasize that they are legally separate from the primary government. Each discretely presented component unit has a September 30 fiscal year-end. Component Units • Mobile Public Library - The Library has its own governing body which is appointed by the Council of the City of Mobile. The City contributes financial support to the Library on an annual basis. The Library's other sources of revenue come from State and Federal financial assistance, other municipalities, Mobile County and user fees. • The Public Park and Recreation Board (Ladd - Peebles Stadium) - The City appropriates funds to the Public Park and Recreation Board for operational and capital outlay purposes. The members of the Board are appointed by the Council of the City of Mobile. The Board's other sources of revenue come from the rental of Ladd – Peebles Stadium. Complete financial statements of the individual component units can be obtained directly from their administrative offices as provided below. Mobile Public Library 700 Government Street Mobile, AL 36602

The Public Park and Recreation Board (Ladd-Peebles Stadium) P.O. Box 66721 Mobile, Alabama 36660

36

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 1 - ORGANIZATION AND REPORTING ENTITY (continued) Related Organizations The City's officials are also responsible for appointing the members of the boards of other organizations. However, the City has no financial burden or benefit from these organizations, nor do they have the power to impose their will upon the members of their boards. Therefore, these organizations are not considered component units of the City. The City's related organizations are as follows: • Board of Water and Sewer Commissioners of the City of Mobile (BWSC) – BWSC is a separate governmental unit granted independent authority by the State of Alabama General Statutes. All of the five board members are appointed by the Council of the City of Mobile. BWSC has the ability to issue its own debt, and its operations are financed through water and sewer usage fees. • Mobile Housing Board - The Mayor appoints members to the governing board and can remove members for cause. The Housing Board has complete legislative and administrative authority. The Housing Board's primary revenues come from rents and monies received from the Federal government. • Mobile Airport Authority - The Mayor appoints members to the governing board and can remove members for cause. The Airport Authority has complete legislative and administrative authority and has the ability to issue its own debt. Its operations are financed through aviation revenues and monies received from the Federal government. Joint Ventures The City is a participant with other local governments in joint ventures to operate the following organizations: • Mobile Board of Health - The Mayor and the Council of the City of Mobile do not appoint the board members for the Mobile Board of Health. The City is legally required to contribute financial support to the Board of Health on an annual basis. The City contributed $600,000 to the Mobile Board of Health during the fiscal year ended September 30, 2009. The Mobile Board of Health receives contributions from other municipalities included within Mobile County as well as from Mobile County. Of the contributing entities, not one entity has unilateral control over the operations of the Mobile Board of Health. In addition, the Mobile Board of Health receives State and Federal financial assistance. The City has no equity interest in the Mobile Board of Health. Complete financial statements for the Mobile Board of Health may be obtained from their administrative office at 251 North Bayou Street, Mobile, Alabama 36601. • Mobile Emergency Management - The board members for Mobile Emergency Management are the mayors for the municipalities in Mobile County and the President of the Mobile County Commission or their appointees. The City is legally required to contribute financial support to Mobile Emergency Management on an annual basis. The City contributed $432,876 to Mobile Emergency Management during the fiscal year ended September 30, 2009. Mobile Emergency Management receives contributions from other municipalities included within Mobile County as well as State and Federal financial assistance. The City has no equity interest in Mobile Emergency Management. Complete financial statements for Mobile Emergency Management may be obtained from their administrative office at 348 North McGregor Avenue, Mobile, Alabama 36618.

37

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 1 - ORGANIZATION AND REPORTING ENTITY (continued) • Mobile Personnel Board - The five board members are appointed by a supervisory committee. The supervisory committee consists of the mayors for all cities in Mobile County, the County Sheriff, the County License Commissioner, the County Revenue Commissioner and various county judges. The City is legally required to contribute financial support to the Personnel Board on an annual basis. The City contributed $1,239,517 to the Mobile Personnel Board during the fiscal year ended September 30, 2009. The Mobile Personnel Board also receives contributions from all municipalities included within Mobile County as well as from Mobile County. The City has no equity interest in the Mobile Personnel Board. Complete financial statements for the Mobile Personnel Board may be obtained from their administrative office at P.O. Box 66794, Mobile, Alabama 36660-1794.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The more significant of the government's accounting policies are described below. Basis of Presentation - Government-wide and Fund Accounting The basic financial statements include both government-wide (based on the City as a whole) and fund financial statements. The focus is on either the City as a whole or major individual funds. Both the government-wide and fund financial statements categorize primary activities as either governmental or business-type. In the governmentwide Statement of Net Assets, both the governmental and business-type activities columns (a) are presented on a consolidated basis by column, and (b) are reflected, on a full accrual, economic resource basis, which incorporates long-term assets and receivables as well as long-term debt and obligations. The City generally first uses restricted assets for expenses incurred for which both restricted and unrestricted assets are available. The City may defer the use of restricted assets based on a review of the specific transaction. The government-wide Statement of Activities reflects both the gross and net cost per functional category (public works, public safety, etc.) which are otherwise being supported by general government revenues (taxes, licenses and permits, etc.). The Statement of Activities reduces gross expenses, including depreciation, by related program revenues (charges for services, operating and capital grants, and contributions). The program revenues must be directly associated with a function or a business-type activity. Direct expenses are those that are clearly identifiable with a specific function or segment. Direct expenses are not eliminated from the various functional categories. The City does not allocate indirect expenses. Eliminations have been made to minimize the double-counting of internal activities. Interfund services provided and used are not eliminated in the process of consolidation. The operating grants include operating-specific and discretionary (either operating or capital) grants while the capital grants column reflects capital-specific grants. The governmental funds financial statements are presented on a current financial resource and modified accrual basis of accounting. This is the manner in which these funds are normally budgeted. Since the governmental fund statements are presented on a different measurement focus and basis of accounting than the government-wide statements' governmental column, a reconciliation is presented which briefly explains the adjustments necessary to reconcile the governmental fund statements to the government-wide statements' governmental column. The focus of this reporting model is on the City as a whole and the fund financial statements, including the major individual funds of the governmental and business-type categories, as well as the component units. Each presentation provides valuable information that can be analyzed and compared (between years and between governments) to enhance the usefulness of the information.

38

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) In the fund financial statements, the City's accounting records are organized and operated on a fund basis. A fund is a fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on the specific activities or attaining certain objectives, in accordance with special regulations, restrictions or limitations. The types of funds used in accounting for the financial operations of the City and their nature and purpose are as follows: Governmental Funds - Governmental funds are those through which most governmental functions of the City are financed. The acquisition, use and balances of the City's expendable financial resources and the related liabilities (except those accounted for in proprietary funds) are accounted for through governmental funds. The measurement focus is based upon determination of changes in financial position, rather than upon net income determination. The following are the City's governmental funds: General Fund - The General Fund is the general operating fund of the City and is considered a major governmental fund. All general tax revenue and other receipts that are not allocated by law or contractual agreement to another fund are accounted for in this fund. The general operating expenditures, fixed charges and capital improvement costs that are not paid through other funds, are paid from the General Fund. Special Revenue Funds - The Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than for major capital projects) requiring separate accounting because of legal or regulatory provisions or administrative action. The Special Revenue Funds are considered non-major governmental funds. Special Revenue Funds used by the City are as follows: • Four-cent Gasoline Tax - This fund accounts for tax revenues to be used to pay for street resurfacing. • Five-cent Gasoline Tax - This fund accounts for tax revenues to be used to pay the cost of construction, improvement, maintenance and supervision of highways, bridges and streets, including the retirement of bonds for the payment of which such revenues have been or may hereafter be pledged. • Seven-cent Gasoline Tax - This fund accounts for tax revenues to be used to pay the cost of electricity for street lights and the cost of operating the concrete and storm sewer maintenance, street sweeping, street repair, ditch cleaning, pipe-laying and heavy equipment departments. • Fuel Inspection Fees - This fund accounts for a special inspection fee levied by the State of Alabama to be used for street improvements and City planning purposes. • Economic Development - This fund is used to account for activities funded by recaptured funds from refinanced second mortgages for economic development planning from the Mobile Housing Board. • Tax Increment - This fund is used to account for revenues generated by tax collections under the Tax Increment Financing Plan and used to pay for redevelopment projects in the downtown area. Debt Service Funds - These funds are non-major governmental funds used to account for assets held for the repayment of principal and interest on the City's outstanding bond issues. Debt service funds used by the City are as follows: 39

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) • 1996 General Obligation Refunding Warrants - This fund is used to service the remaining debt outstanding on the 1996 General Obligation Refunding Warrants. • 1998 General Obligation Refunding and Improvement Warrants - This fund is used to service the remaining debt outstanding on the 1998 General Obligation Refunding and Improvement Warrants. • 1999 General Obligation Private Placement Warrants - This fund is used to service the remaining debt outstanding on the 1999 General Obligation Private Placement Warrants. • 1999 General Obligation Private Placement Warrants (I.P.S.C.O.) - This fund is used to service the remaining debt outstanding on the 1999 General Obligation Private Placement Warrants (I.P.S.C.O.). • 2001 General Obligation Refunding and School Warrants - This fund is used to service the remaining debt outstanding on the 2001 General Obligation Refunding and School Warrants. • Bank Service Charges - Various Issues - This fund is used to pay agent and trustee fees for defeased debt. • 2002 General Obligation Refunding Warrants - This fund is used to service the remaining debt outstanding on the 2002 General Obligation Refunding Warrants. • 2002 Limited Obligation Tax Increment Warrants - This fund is used to service the remaining debt outstanding on the 2002 Limited Obligation Tax Increment Warrants. • 2006 General Obligation Refunding and Improvement Warrants - This fund is used to service the remaining debt outstanding on the 2006 General Obligation Refunding and Improvement Warrants. • 2006 General Obligation Private Placement Warrants - This fund is used to service the remaining debt outstanding on the 2006 General Obligation Private Placement Warrants. • 2008 General Obligation Capital Improvement Warrants - This fund is used to service the debt outstanding on the 2008 General Obligation Capital Improvement Warrants. • 2008B & C General Obligation Refunding and Capital Improvement Warrants - This fund is used to service both 2008B and 2008C General Obligation Refunding and Capital Improvement Warrants. • 2009 General Obligation Warrants - Copiers - This fund is used to service the debt outstanding on the 2009 General Obligation Warrants - Copiers. Capital Projects Funds - These funds are used to account for financial resources for the acquisition or construction of major capital facilities (other than those financed by proprietary fund types). Capital Projects Funds used by the City are as follows: • Capital Improvements - This fund is considered a major governmental fund and is used to provide for necessary capital improvements and is financed by the one and two thirds cents sales tax. • Strategic Plan - This fund is used to provide for several special projects. The majority of this fund is financed by a portion of the gasoline tax and sales tax. 40

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) • 1995 Capital Projects - This fund is used to provide for several projects: the closure of Bates Field Landfill, the upgrading of Azalea City Golf Course facilities, engineering for Magnolia Grove Road, a tennis court parking lot, purchase of the Touchdown building and improvements to Airport Boulevard and the garage work area. This fund was financed by the 1995 General Obligation Capital Improvement Warrants. • 1996 General Obligation Capital Projects - This fund is used to provide for several projects; the renovation of Ladd Memorial Stadium, several drainage projects, street improvements, and water quality studies. This fund was financed by the 1996 General Obligation Capital Improvement Warrants. • Municipal Government Capital Improvements - This fund is used for several projects including the Mobile Regional Senior Community Center and various building maintenance projects. • 1998 General Obligation Capital Projects - This fund is used to provide for several projects including modular buildings at Strickland Youth Center and the construction and installation of certain improvements to the City's storm water drainage system. • 1998 General Obligation Refunding and Capital Projects - This fund is used to provide for certain capital improvement projects, including addition to Public Library, Fine Arts Museum, GM&O Terminal renovations, Public Safety buildings, and City/County Misdemeanor facility. • 1998 General Obligation Private Placement Projects - This fund is to provide for the acquisition of a new financial system and work order system. • 1999 General Obligation Private Placement (I.P.S.C.O.) - This fund is to provide for site and infrastructure improvements to be constructed and installed by the Industrial Development Board of Mobile County at the site of a facility that produces and manufactures steel products by I.P.S.C.O. • 2000 Capital Projects - This fund is used to provide for improvements to the City's parks and recreational facilities and for storm water drainage and sewer improvements. • 2002 Limited Obligation Tax Increment Capital Projects -This fund is used to acquire certain land and finance, construct and install certain public improvements located within the Tax Increment District. • 2006 General Obligation Refunding and Capital Projects - This fund is a major governmental fund used to provide for certain capital improvement projects of the City. This fund was financed by the 2006 General Obligation Refunding and Capital Warrants. • Flood Management - This fund is used to hold funds collected from developers to help defray the cost of future drainage in an area. This fund was established by ordinance passed by the City Council. • 2008 General Capital Improvement Projects - This fund is used to provide for certain capital improvement projects of the City. • 2008-B General Obligation Capital Improvement Projects - This fund is used for certain capital improvement projects of the City.

41

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) • 2008-C General Obligation Capital Improvement Projects - This fund is used for certain capital improvement projects of the City. Proprietary Funds - Proprietary funds are used to account for the City's ongoing organizations and activities which are similar to those often found in the private sector. The measurement focus is based upon determination of net income. Revenues are recognized in the period in which they are earned and expenses are recognized in the period incurred. Operating revenues shown for proprietary operations generally result from producing or providing goods and services. Operating expenses for these operations include all costs related to providing the service or product. All other revenue and expenses not meeting these definitions are reported as nonoperating revenues and expenses. The City's proprietary funds are as follows: Enterprise Funds - The City has the following nine enterprise funds to account for activities whose operations are financed and operated in a manner similar to private business operations where the intent of the City is that the costs of providing goods or services to the general public on a continuing basis is financed or recovered primarily through user charges. The City has determined that periodic determination of revenues earned, expenses incurred and net income is appropriate for capital maintenance, public policy, management control and accountability. • Mobile Civic Center - This major enterprise fund is used to account for the operations of the Mobile Civic Center which include activities such as sporting events, social events, musical performances, and theatrical performances. • Mobile Convention Center - This major enterprise fund is used to account for the operations of the Mobile Convention Center which includes activities such as business conventions and social events. • WAVE Transit - This major enterprise fund is used to account for the operations of the City's public transportation system which derives the majority of its income from passenger fare revenues and various government subsidies. • Alabama Cruise Terminal - This major enterprise fund is used to account for the operations of the Alabama Cruise Terminal, a cruise ship homeport, which includes an arrival and departure terminal facility and secured parking facilities. • Municipal Parking Garage - This major enterprise fund is used to account for the operations of the Municipal Parking Garage which is rented to the general public on a daily basis. • Azalea City Golf Course - This fund is used to account for the operations of the Azalea City Golf Course which derives revenues from course and cart rental. • Firemedics - This fund is used to account for the operations of the firemedics division which provides ambulance services to the general public. • Tennis Center - This fund is used to account for the operations of the Tennis Center which derives the majority of its income from tennis court rentals. • Affordable Homes Program - This fund is used to account for the operations of the Affordable Homes Program which derives the majority of its income from rental activity.

42

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Internal Service Funds - These funds are used to account for the financing of goods or services provided to other departments or agencies of the City, or to other governments, on a cost reimbursement basis. The internal service funds are included in governmental activities for government-wide reporting purposes. The excess revenue or expenses for the funds are allocated to the appropriate functional activity (governmental activities). Excess amounts have not been allocated to any business-type activity since these amounts would be insignificant. The City's internal service funds are as follows: • Motor Pool - This fund is used to account for vehicles and equipment provided and maintained by the Motor Pool for other departments of the City. • Insurance Fund - This fund is used to account for automobile and general liability claims and expenses paid for other departments of the City. • Employee Health Fund - This fund is used to account for assets held in trust by the City for the payment of health insurance claims. Basis of Accounting - Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. The government-wide financial statements, as well as the enterprise funds, apply Financial Accounting Standards Board (FASB) pronouncements and Accounting Principles Board (APB) opinions issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements, in which case, GASB prevails. The City's reporting entity does not apply FASB pronouncements or APB opinions issued after November 30, 1989. Government-wide Financial Statements In the government-wide Statement of Net Assets and Statement of Activities, both governmental and business-type activities are presented using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Fund Financial Statements Governmental Funds All governmental funds are accounted for using the modified accrual basis of accounting. Their revenues are recognized when they become both "measurable and available" to finance current expenditures. Measurable means knowing or being able to reasonably estimate the amount. Available means collectible within the current period or soon enough thereafter to pay current liabilities (the City considers revenue available if it is collected within 60 days after year end). Selective sales and use taxes are considered available and measurable when the underlying exchange has occurred (i.e., September sales taxes are recorded as revenue in September even though the taxpayers remit the taxes in October) and are recognized as revenue at that time. Anticipated refunds of such taxes are recorded as liabilities and reductions of revenue when they are measurable and their validity seems certain.

43

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Property taxes are recognized as revenue when the enforceable legal claim has occurred. Grant revenues are recognized when all eligibility requirements have been met. Other revenues, including licenses and permits, certain charges for services, and miscellaneous revenues, are recorded as revenue when received in cash because they are generally not measurable until actually received. Expenditures (including capital outlay) are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. Principal and interest on general long-term debt are exceptions to this rule and are recognized when due. Also, expenditures related to insurance claims, employee pension liability, compensated absences and the sinking fund are recognized when payable from expendable available financial resources. Proprietary Funds Proprietary funds are accounted for using the accrual basis of accounting. Their revenues are recognized when they are earned, and their expenses are recognized when a liability is incurred, regardless of the timing of related cash flows. Budgets and Budgetary Accounting - The City follows these procedures in establishing the budgetary data presented in the accompanying financial statements: • Prior to August 20, the Mayor submits to the City Council a proposed current revenue and expenditure budget for the general operations of the City government for the fiscal year beginning October 1, which constitutes the General Fund Budget, a Capital Budget and a budget message. However, a legally adopted budget is only required for the General Fund. By law, expenditures may not exceed revenues and surplus available, if any. • A public hearing is held to obtain final taxpayer input, and necessary revisions are made not later than September 30. • The budget is adopted by a majority vote of the City Council, and any required revenue measures are legally enacted through passage of an ordinance. • Changes or amendments to budgeted expenditures of the City at the departmental and fund level must be approved by the City Council. • Departmental expenditures may not legally exceed budgetary appropriations for the General Fund. Accordingly, the legal level of budgetary control is established within the General Fund at the departmental level. Management may amend the budget at the object level within departments without City Council approval. All unencumbered balances lapse at year-end. Revenue Recognition - Ad valorem taxes are assessed on property valuations and statutory liens are attached to such properties as of October 1st each year. These taxes are due October 1st, but do not become delinquent until December 31st, after which penalty fees are levied. If taxes and penalties are not paid by June 30th of the following year, the property is then sold for taxes due and remittance is made at this time by the Mobile County Tax Collector to the City of Mobile. All tax levies are collected and remitted to the City of Mobile by the end of the City's fiscal year; consequently, the financial statements do not have accounts receivable or allowance for uncollected tax levies. 44

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Other material revenue which is susceptible to accrual includes sales tax, interest income and state-shared revenue. Revenue which is not both available and measurable and is thus not susceptible to accrual includes property and franchise taxes and business licenses. Deferred Revenue - The fund financial statements include both unearned revenue and revenue that is not considered available to finance current expenditures. The government-wide financial statements include only unearned revenue. Encumbrances - Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditures of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary control in the General Fund and Capital Projects Funds. Encumbrances outstanding at year-end are reported as a reservation of fund balance for subsequent year expenditures. For budgetary purposes, current year encumbrances are treated as expenditures and any unencumbered balances lapse at year-end. Encumbrances have been recorded in the General Fund and Capital Projects Funds. Pooled Cash and Investments - Pooled cash and investments consist of cash, government securities, certificates of deposit, and repurchase agreements. Cash balances and the requirements of all funds are considered in determining the amount to be invested. Interest earned on pooled cash and investments is recorded as General Fund revenue and allocated between funds based upon balances (see Note 3). The City reports its money market investments and investments in short-term debt securities that have remaining maturities of one year or less at amortized cost. Inventories - All City inventories are maintained on a consumption basis of accounting where items are purchased for inventory and charged to the budgetary accounts as the items are consumed. Inventories held by the General Fund consist principally of traffic engineering, municipal garage, public buildings, and electrical department supplies. Inventories are stated at average or weighted average cost. Appropriate allowances have been recorded for obsolete and surplus items. Interfund Transactions - On fund financial statements, receivables and payables resulting from outstanding balances are classified as "interfund receivables/payables." Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances." Flow of cash or goods from one fund to another without a requirement for repayment is reported as interfund transfers. Interfund transfers are reported as other financing sources/uses in governmental funds. The government-wide statements eliminate interfund transfers and receivables/payables as reported within the segregated governmental and business-type activities column. Only transfers and receivables/payables between the two columns appear in this statement, which zero in total. Interfund services provided and used are not eliminated in the process of consolidation. Capital Assets - The accounting treatment over capital assets depends on whether the assets are used in governmental fund operations or proprietary fund operations and whether they are reported in the government-wide or fund financial statements.

45

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Government-wide Financial Statements In the government-wide financial statements, capital assets are valued at historical cost, or estimated historical cost if actual is unavailable. Donated capital assets are valued at their estimated fair market value on the date donated. The City capitalizes assets with a cost of $2,500 or more as purchase and construction outlays occur. Infrastructure has been capitalized retroactively to 1980 using estimated historical costs. Depreciation is recorded as an allocated expense in the Statement of Activities, with accumulated depreciation reflected in the Statement of Net Assets. Depreciation is provided over the assets' useful lives using the straightline method of depreciation. The range of estimated useful lives by type of asset is as follows: Types of Assets Buildings Improvements Infrastructure (Drainage, Streets, Bridges, Sidewalks and Docking) Infrastructure (Utilities and Landscaping) Machinery and equipment Automotive equipment Office equipment

Estimated Useful Life 25-60 years 20 years 50 years 25 years 5-10 years 3-15 years 6 years

Fund Financial Statements In the fund financial statements, capital assets used in governmental fund operations are accounted for as capital outlay expenditures upon acquisition. Capital assets used in proprietary fund operations are accounted for the same as in the government-wide financial statements. Bond Discounts, Premiums and Issuance Costs - In the governmental funds, bond discounts, premiums and issuance costs are treated as period costs in the year of issue. In the government-wide financial statements, bond discounts, premiums and issuance costs are deferred and amortized over the term of the bonds using the bonds outstanding method which approximates the effective interest method. Bond discounts/premiums are presented as a reduction/addition to the face amount of the bonds payable whereas issuance costs are recorded as other assets.

46

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Compensated Absences - The GASB requires that accrued liabilities for future vacations and sick leave be recorded if, (1) the employees' rights to receive compensation are attributable to services already rendered, and (2) it is probable that the employer will compensate the employees for the benefits through paid time off or some other means, such as cash payments at termination or retirement. The liability for these compensated absences is recorded as long-term debt in the government-wide financial statements. The current portion of this debt is estimated based on historical trends. In the enterprise funds, the compensated absences liability is presented in the balance sheet, and is classified as current and non-current. In the governmental fund financial statements, amounts that would normally be paid with expendable available financial resources once the liability has matured, for example as a result of employee resignations and retirements, are recorded in the General Fund, and the amounts considered noncurrent are not reported in the fund financial statements. Amounts paid or payable within 60 days are deemed to be payable from expendable financial resources. Equity Classifications Government-wide Financial Statements Equity is classified as net assets and displayed in three components: • Invested in capital assets, net of related debt - Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds and mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. • Restricted net assets - Consists of net assets with constraints placed on the use either by (1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments; or (2) the City's own laws through its enabling legislation and other provisions of its laws and regulations. • Unrestricted net assets - All other net assets that do not meet the definition of "restricted" or "invested in capital assets, net of related debt." Fund Financial Statements The fund equity of the governmental fund financial statements is classified as fund balance. Fund balance is further classified as reserved and unreserved. The fund equity of the proprietary fund financial statements is classified in the same manner as the government-wide financial statements. Statement of Cash Flows - For the purposes of the Statement of Cash Flows, the proprietary funds consider cash and all highly liquid investments with an original maturity of three months or less to be cash equivalents.

47

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Adoption of new GASB pronouncements: GASB Statement No. 49, Accounting and Financial Reporting for Pollution Remediation Obligations. Issued on December 2006, this Statement requires governments to estimate their expected outlays for pollution remediation if they know a site is polluted and any of the recognition triggers set by the standard occur. The City and its discretely presented component units were not involved in pollution remediation activities that would require a long-term loss contingency accrual, and accordingly did not report any obligations that required a restatement of beginning net assets. GASB Statement No. 55, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments. Issued on March 2009, the objective of this Statement is to incorporate the hierarchy of generally accepted accounting principles (GAAP) for state and local governments into the Governmental Accounting Standards Board's (GASB) authoritative literature. The "GAAP hierarchy" consists of the sources of accounting principles used in the preparation of financial statements of state and local governmental entities that are presented in conformity with GAAP, and the framework for selecting those principles. The requirements in this Statement will improve financial reporting by contributing to GASB's efforts to codify all GAAP for state and local governments so they derive from a single source. The Board concluded that the GAAP hierarchy should reside in the accounting literature source. The Board concluded that the GAAP hierarchy should reside in the accounting literature established by the GASB and is issuing this Statement to accomplish that objective. This Statement will make it easier for preparers of state and local government financial statements to identify and apply all relevant guidance. This Statement did not result in a change in current practice. GASB Statement No. 56, Codification of Accounting and Financial Reporting Guidance Contained in the AICPA Statements on Auditing Standards. Issued March 2009, the objective of this Statement is to incorporate into the Governmental Accounting Standards Board's (GASB) authoritative literature certain accounting and financial reporting guidance presented in the American Institute of Certified Public Accountants' Statements on Auditing Standards. This Statement addresses three issues not included in the authoritative literature that establishes accounting principles - related party transactions, going concern considerations, and subsequent events. The presentation of principles used in the preparation of financial statements is more appropriately included in accounting and financial reporting standards rather than in auditing literature. This Statement does not establish new accounting standards but rather incorporates the existing guidance (to the extent appropriate in a governmental environment) into the GASB standards. The requirements in this Statement will improve financial reporting by contributing to GASB's efforts to codify all sources of GAAP for state and local governments so that they derive from a single source. This effort is important from the perspective of bringing the authoritative accounting and financial reporting literature together in one place, with that guidance modified as necessary to appropriately recognize the governmental environment and the needs of governmental financial statement users. Future adoption of GASB pronouncements: Future adoption of GASB pronouncements have been issued, but are not yet effective at September 30, 2009

48

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) GASB Statement No. 51, Accounting and Financial Reporting for Intangible Assets. Issued June 2007, the objective of this Statement is to establish accounting and financial reporting requirements for intangible assets to reduce inconsistencies, thereby enhancing the comparability of the accounting and financial reporting of state and local governments. This Statement requires that an intangible be recognized in the statement of net assets only if it is considered identifiable and that it must be treated like capital assets. Additionally, this Statement establishes a specified-conditions approach to recognizing intangible assets that are internally generated. GASB 51 will be effective for the City fiscal year October 1, 2009 - September 30, 2010. GASB Statement No. 53, Accounting and Financial Reporting for Derivative Instruments. Issued June 2008, the objective of this Statement is to improve the recognition, measurement, and disclosures regarding derivative instruments, thereby improving the understandability of a government's resources available to provide services. Though the changing financial and commodity prices result in changing cash flows and fair values that can be used as effective risk management or investment tools, there is significant exposure to risks and liabilities. Disclosure requirements include the objectives, terms and risks of hedging derivative instruments, a summary of the activity that provides an indication of the location of fair value amounts reported in the financial statements. The City is currently evaluating the impact, if any, that GASB Statement No. 53 will have on its financial statements. GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. Issued February 2009, the objective of this Statement is to improve the usefulness and understandability of governmental fund balance information. This Statement provides more clearly defined categories to make the nature and extent of the constraints placed on a government's fund balance more transparent. It also clarifies the existing governmental fund type definitions to improve the comparability of governmental fund financial statements and help financial statement users better understand the purposes for which governments have chosen to use particular for financial reporting. GASB 54 will be effective for the City fiscal year October 1, 2010 - September 30, 2011. The City of Mobile will implement the new GASB pronouncements in the fiscal year no later than the required effective date. The City has not yet determined if the above listed new GASB pronouncements will have a significant financial impact to the City or in issuing its financial statements.

NOTE 3 - CASH, EQUITY IN POOLED CASH AND INVESTMENTS Deposits Cash balances available for investment by most City funds are maintained in pooled cash and investment accounts to improve investment opportunities. The equity in pooled cash and investment balances in the accompanying combined balance sheet represents the undivided interest of each respective fund in pooled accounts.

49

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 3 - CASH, EQUITY IN POOLED CASH AND INVESTMENTS (continued) Included as deposits are bank accounts and certificates of deposit. Each of the banks holding the City's deposits, as well as those of the Component Units, is a certified participant in the Security for Alabama Funds Enhancement (SAFE) program. Through the SAFE program, all public funds are protected through a collateral pool administered by the Alabama State Treasury. The City's primary government deposits were fully insured or collateralized at September 30, 2009. At year-end, the carrying amount of the City's deposits was $72,586,141 and the bank balance was $78,305,395. Included in the bank balances are certificates of deposit totaling $31,881,687. Of the total bank balance, $2,860,885 was covered by Federal Depository Insurance. The remainder of $75,444,510 was covered under the SAFE program. Investments The City is restricted by State statute to investments in U.S. Government Treasury and Agency securities, certificates of deposit and money market accounts, repurchase agreements and reverse repurchase agreements, banker's acceptances and commercial paper. In each case, all funds must be fully insured or collateralized by the pledge of securities. Securities allowed as collateral include U.S. Government Treasury and Agency securities, State of Alabama Obligations and City of Mobile Obligations. As of September 30, 2009, the City had the following investments:

Money market funds Sweep accounts Certificates of deposit

Fair Value 218,158 11,881,868 31,881,687 $ 43,981,713 $

Weighted Average Maturity (Years) 0.0027 0.0027 0.0612 0.0222

Credit Risk and Concentration of Credit Risk The City's investment policy prohibits the purchase of debt securities rated below AA. As of September 30, 2009, the City's investments in money market accounts are under the SAFE program. The investment policy also requires diversification of the City's investment portfolio by security type and institution. With the exception of U.S. Treasury Securities, the City will allow no more than 65% of its investment portfolio to be invested in single security types. At September 30, 2009, 72% of the City's total investments were invested in certificates of deposit. The City will correct this imbalance in the current current year. Of the City's total investments $218,158 are in Dreyfus Government Cash Funds and $11,881,868 are in sweep accounts at two banks.

50

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 3 - CASH, EQUITY IN POOLED CASH AND INVESTMENTS (continued) Custodial Credit Risk The City's investment policy includes a requirement that City funds be collateralized at 102%. Investments are exposed to custodial credit risk if the securities are uninsured and unregistered and are either held by the counterparty, or by the counterparty's trust department or agent but not in the City's name. Interest Rate Risk The City has an investment policy that limits the maturities on individual investments to no more than one year.

NOTE 4 - RECEIVABLES Receivables at September 30, 2009 consist of the following: Businesstype Activities

Governmental Activities

Total Primary Government

Receivables Taxes

$

13,392,279

$

723,163

$14,115,442

Customers and other

5,117,780

6,244,992

11,362,772

Other governmental units

3,605,275

4,884

3,610,159

22,115,334 (15,955)

Gross receivables Less: allowance for uncollectables Net receivables

$

22,099,379

6,973,039 (4,277,021) $ 2,696,018

29,088,373 (4,292,976) $24,795,397

Substantially all receivables are due in 2010, except General Fund assessments receivable for lot cleaning and building demolitions of $2,284,954, a long-term note receivable from the Mobile Housing Board for $1,580,000 and Capital Projects Funds assessments receivable for public improvements of $115,954.

51

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 5 - INTERFUND TRANSFERS Transfers within the reporting entity are substantially for the purposes of subsidizing operating functions, funding capital projects and asset acquisitions, or maintaining debt service on a routine basis. Resources are accumulated in a fund to support and simplify the administration of various projects or programs. Interfund transfers for the year ended September 30, 2009, are as follows: Transfer In

Transfer Out

Major Governmental Funds General Fund

Capital Improvements Fund Other Governmental Funds Internal Service Funds Mobile Civic Center WAVE Transit Other Enterprise Funds Total General Fund

$

13,275 6,226,075

6,850,789

347,363 175,000 4,606,595 1,178,394 6,110,617 2,454,969 14,872,938

347,363 1,212,621 1,559,984

13,275 12,966,432 500,000 13,479,707

193,500 12,966,432 6,997,913 3,800,000 615,406 24,573,251

5,344,575 6,997,913 1,023,428 13,365,916

4,606,595 4,606,595

900,000 900,000

611,439

-

$

Capital Improvements Fund General Fund Other Governmental Funds WAVE Transit Other Enterprise Funds Total Capital Improvements Fund

Other Governmental Funds General Fund Capital Improvements Fund Other Governmental Funds Mobile Convention Center WAVE Transit Other Enterprise Funds Total Other Governmental Funds

Internal Service Funds General Fund Total Internal Service Funds Major Enterprise Funds

Mobile Convention Center Other Governmental Funds Total Mobile Convention Center

-

-

3,800,000 3,800,000

WAVE Transit General Fund Capital Improvements Fund Other Governmental Funds

6,110,617 500,000

Total WAVE Transit

6,610,617

-

611,439 615,406 1,226,845

Alabama Cruise Terminal -

Capital Improvements Fund Total Alabama Cruise Terminal

-

1,212,621 1,212,621

Other Enterprise Funds General Fund Other Governmental Funds Total Other Enterprise Funds $

3,633,363 1,023,428

-

4,656,791

-

48,858,027

$ 48,858,027

52

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 6 - INTERFUND RECEIVABLES AND PAYABLES Generally, outstanding balances between funds reported as "due to/from other funds" include subsidy commitments outstanding at year-end and other miscellaneous receivables/payables between funds. Interfund receivables and payables at September 30, 2009, are as follows: Due To Other Funds

Due From Other Funds

Major Governmental Funds

General Fund Capital Improvements Fund Other Governmental Funds WAVE Transit Other Enterprise Funds Internal Service Funds Total General Fund

$

7,091,026 18,500 279,714 7,389,240

$

6,995 1,173,555 1,100,987 3,188,213 5,469,750

Capital Improvements Fund General Fund Municipal Parking Garage Other Governmental Funds Other Enterprise Funds Total Capital Improvements Fund

350,000

350,000

7,091,026 600,000 360,000 8,051,026

6,995

18,500

600,000 606,995

18,500

-

Other Governmental Funds General Fund Capital Improvements Fund

Total Other Governmental Funds

Internal Service Funds General Fund Total Internal Service Funds

3,188,213 3,188,213

-

WAVE Transit General Fund Total WAVE Transit

1,173,555 1,173,555

279,714 279,714

Municipal Parking Garage Capital Improvements Fund Other Enterprise Funds Total Municipal Parking Garage

-

350,000 430,000 780,000

Cruise Terminal Municipal Parking Garage Total Cruise Terminal Other Enterprise Funds General Fund Capital Improvements Fund

Total Other Enterprise Funds

430,000 430,000

-

1,100,987

-

360,000 1,460,987

-

$ 14,598,990

$ 14,598,990

53

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 6 - INTERFUND RECEIVABLES AND PAYABLES (continued) Substantially all interfund balances are expected to be repaid within one year except $350,000 due to the Municipal Parking Garage from the Capital Improvements Fund, $430,000 due to the Municipal Parking Garage form the Cruise Terminal Fund, and $600,000 due to the Capital Improvements Fund from the Strategic Plan Fund.

NOTE 7 - CAPITAL ASSETS Governmental Activities The following is a summary of changes in capital assets for the year ended September 30, 2009: Capital Assets, Not Depreciated

Land

Construction in Progress

Capital Assets, Depreciated

Infrastructure in Progress

Improvements Other Than Buildings

Buildings

Vehicular Equipment

Other Equipment

Infrastructure

Totals

Balance, 10/1/08 $ Additions Deductions Balance, 9/30/09 Accumulated Depreciation Balance, 10/1/08 Additions Deductions Balance, 9/30/09

24,123,484 423,505 24,546,989

$

-

30,348,472 8,734,993 (8,217,312) 30,866,153

$

-

-

48,749,155 11,066,154 (5,296,668) 54,518,641

$

-

-

53,353,919 25,143,923 (18,709,918) 59,787,924

$

23,021,471 1,236,582 (373,850)

-

95,224,161 696,005 95,920,166

$

24,683,669 4,028,352 -

23,884,203

50,514,051 3,645,264 (1,474,483) 52,684,832

$

33,145,607 3,436,276 (1,297,019)

28,712,021

42,721,915 1,344,375 (748,216) 43,318,074

$

28,459,188 2,648,889 (656,651)

35,284,864

321,218,861 112,212,630 433,431,491

$

66,933,908 6,880,187 -

30,451,426

666,254,018 163,266,849 (34,446,597) 795,074,270 176,243,843 18,230,286 (2,327,520)

73,814,095

192,146,609

Capital Assets, Net $

24,546,989

$

30,866,153

$

54,518,641

$

35,903,721

$

67,208,145

$

17,399,968

$

12,866,648

$

359,617,396

$

602,927,661

54

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 7 - CAPITAL ASSETS (continued) Construction in progress consists of the following: Balance Balance October 01, September 30, 2008 Additions Deductions 2009 Municipal Garage Expansion $ 917,475 $ $ $ 917,475 GIS Mapping System 2,857,503 40,305 2,897,808 Police - Joint Use Firearms Range 1,968,474 22,979 1,991,453 Lake Drive Tricentennial Park 641,744 4,761 (646,505) New Senior Citizen Center - District 6 5,248,820 329,713 (5,578,533) Waterfront Development 14,497,978 615,405 15,113,383 Fort Conde Reconstruction - HUD 108 1,101,002 1,101,002 Sage Avenue Armory - New Renovations 5,330 136,728 142,058 Springhill Avenue Recreation Center Renovation 550,638 50,277 600,915 Bring Back Broad Street Infrastructure 1,785,164 157,609 (1,942,773) New Towing Facility - Impound Yard 426,932 199,888 626,820 New Public Safety Facility 183,357 1,679,164 1,862,521 Cruise Terminal & Gangway 519,985 519,985 Fire - Miscellaneous Fire Station Building Improvements 104,552 530,722 635,274 Kidd Park Improvements 5,087 5,087 Lavretta Park Improvements 79,386 79,386 Purchase and Renovate 200 Government Street Building 82,140 82,140 Fire - Warehouse Purchase & Renovate 11,234 511,709 522,943 Police - Renovate 850 St. Anthony 1,674 1,674 Ladd Stadium Renovations FY09 2,966,052 2,966,052 Broad Street Pocket Parks Ph 2 40,731 751,007 791,738 Theodore Area Park 5,988 5,988 Other 2,451 49,501 (49,501) 2,451 Total $ 30,348,472 $ 8,734,993 $ (8,217,312) $ 30,866,153 As of September 30, 2009, commitments to contractors on capital projects totaled approximately $3.3 million. Budgeted costs to complete projects in progress totaled approximately $44.9 million.

55

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 7 - CAPITAL ASSETS (continued) Depreciation expense was charged to governmental activities as follows: General government Economic development Public safety Public works Culture and recreation Finance Total depreciation expense

$

$

11,967,566 2,497 2,609,866 796,634 2,064,375 789,348 18,230,286

Business-type Activities The following is a summary of changes in capital assets for the year ended September 30, 2009: Capital Assets, Not Depreciated

Balance,10/1/08 Additions Deductions Balance, 9/30/09 Accumulated Depreciation Balance,10/1/08 Additions Deductions Balance, 9/30/09 Capital Assets, Net

$

Land 8,573,814 1,807,222 10,381,036

$ 10,381,036

Capital Assets, Depreciated Improvements Other than Construction Vehicular Other Buildings in Progress Buildings Equipment Equipment $ 993,182 $ 127,103,867 $ 10,619,572 $ 12,689,650 $ 5,777,225 199,901 1,324,108 442,733 761,017 (138,884) (2,135,777) (1,623,596) 1,054,199 126,292,198 11,062,305 11,066,054 6,538,242

$

1,054,199

40,842,685 2,612,458 43,455,143 $ 82,837,055

$

4,396,611 426,271 4,822,882 6,239,423

$

8,647,525 (588,804) 8,058,721 3,007,333 $

2,947,600 1,172,302 114,669 4,234,571 2,303,671

$

$

Totals 165,757,310 4,534,981 (3,898,257) 166,394,034 56,834,421 4,211,031 (474,135) 60,571,317 105,822,717

Approximately $6.8 million (cost of $12.1 million and accumulated depreciation of $5.3 million) of the Municipal Parking Garage property is leased to others as of September 30, 2009. (See Note 12) Depreciation expense was charged to business-type activities as follows: Civic center Convention center Cruise Terminal WAVE Transit Parking garage Golf course Firemedics Tennis center Affordable homes program Total depreciation expense

$

$

587,831 1,256,433 405,494 1,632,295 201,766 109,428 6,577 5,688 5,519 4,211,031

56

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 8 - LONG-TERM DEBT New Debt Issuances On February 5, 2009 the City issued $569,000 in City of Mobile, Alabama General Obligation Warrant, Series 2009. The Series 2009 Warrant was issued to finance the purchase of 112 printer/copier/fax machines. Principal and interest on the Series 2009 Warrant is payable annually on August 15 of each year beginning August 15, 2009 through August 15, 2012 at an interest rate of 3.84% per annum. The general and limited obligation bonds/warrants and notes of the City include the following at September 30, 2009: $31,430,000; 2001 General Obligation Refunding Warrants, due annually with interest payable semi-annually at rates ranging from 4.00% to 5.00% per annum; maturing February 15, 2020 $65,725,000; 2002 General Obligation Refunding Warrants, due annually with interest payable semi-annually at rates ranging from 5.2% to 5.5% per annum; maturing August 15, 2020 $10,655,000; 2002 Limited Obligation Tax Increment Warrants; due annually with interest payable semi-annually at rates ranging from 3.75% to 5.50% per annum; maturing February 15, 2023 $63,410,000; 2006 General Obligation Refunding and Improvement Warrants; due annually with interest payable semi-annually at rates ranging from 4.38% to 5.00% per annum; maturing February 15, 2030 $3,100,000; 2006 General Obligation Private Placement Warrants; due semiannually with interest payable semi-annually at a rate of 4.50% per annum; maturing August 15, 2016 $57,000,000; 2008 General Obligation Refunding and Improvement Warrants, due semi-annually with interest payable at rates ranging from 4.00% to 5.00% per annum; maturing February 15, 2020 $69,295,000; 2008B General Obligation Refunding and Improvement Warrants, due semi-annually with interest payable at rates ranging from 4.00% to 5.00% per annum; maturing February 15, 2030 $22,095,000; 2008C (AMT) General Obligation Refunding and Improvement Warrants, due semi-annually with interest payable at rates ranging from 4.00% to 5.00% per annum; maturing February 15, 2030 $569,000; 2009 General Obligation Warrants, due semi-annually with interest payable annually at 3.84% per annum; maturing August 15, 2012 Total bonds/warrants payable

$ 14,415,000

$2,000,000; note payable to Chemical Bank of New York, annual principal payments ranging from $40,000 to $200,000 through August 2012, semi-annual interest payments with rates ranging from 3.73% to 7.90% per annum $1,275,000; note payable to JPMorgan Chase, annual principal payments ranging from $40,000 to $115,000 through August 2022, semi-annual interest payments at LIBOR plus 0.2% (0.83% at September 30, 2009) Total notes payable

$

52,355,000 9,000,000 57,950,000 2,330,000 57,000,000 69,295,000 22,095,000 427,172 $ 284,867,172 545,000 1,035,000 $

1,580,000 57

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 8 - LONG-TERM DEBT (continued) The principal maturities and related interest requirements for the bonds, warrants and notes payable for the next five fiscal years and thereafter are as follows: Bonds/Warrants Payable

Fiscal Year Ending September 30 2010 2011 2012 2013 2014 2015-2019 2020-2024 2025-2029 2030 Subtotals Plus: bond Premium Less: Deferred Bond Discount Less: Deferred amount on refunding Totals

$

2010 2011 2012 2013 2014 2015-2019 2020-2022 Totals

$

$

Governmental Activities Principal Interest 9,427,017 $ 13,415,287 $ 9,882,277 12,984,500 14,147,878 12,448,715 15,045,000 11,785,169 15,420,000 11,108,633 89,070,000 43,537,202 59,325,000 23,331,490 59,005,000 10,398,463 13,545,000 309,600 284,867,172 139,319,059 3,167,279 (3,167,279) (350,785) 350,785 (3,442,934) 3,442,934 284,240,732 $ 139,945,499 $

Total 22,842,304 22,866,777 26,596,593 26,830,169 26,528,633 132,607,202 82,656,490 69,403,463 13,854,600 424,186,231 424,186,231

Notes Payable

$

220,000 235,000 260,000 65,000 70,000 410,000 320,000 1,580,000

$

$

80,918 71,557 60,931 48,635 45,333 167,104 38,561 513,039

$

$

300,918 306,557 320,931 113,635 115,333 577,104 358,561 2,093,039

The City has entered into capital leases for various items including an aerial ladder truck, garbage trucks and cans, fire trucks, heavy equipment for the motor pool, police cars, heavy equipment for public works and services. Future debt service payments under these governmental activity capital leases are as follows: Fiscal Year Ending September 30 2010 2011 2012 Totals

Present Value of Net Minimum Lease Payments $ 1,582,883 698,730 180,424 $ 2,462,037

Amount Representing Interest $ 83,397 30,990 6,717 $ 121,104

Total Minimum Future Lease Payments $ 1,666,280 729,720 187,141 $ 2,583,141

58

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 8 - LONG-TERM DEBT (continued) The City previously entered into a capital lease for six diesel transit buses for use in public transportation. Future debt service payments under these business-type activity capital leases are as follows: Fiscal Year Ending September 30 2010 2011 2012 2013 2014 Totals

Present Value of Net Minimum Lease Payments $ 156,838 163,394 170,224 177,339 184,750 $ 852,545

Amount Representing Interest $ 35,636 29,080 22,250 15,135 7,723 $ 109,824

Total Minimum Future Lease Payments $ 192,474 192,474 192,474 192,474 192,473 $ 962,369

Generally, the capital leases provide for bargain purchase options or options to purchase at prices representing the expected fair value of the property. The following is an analysis of the leased property under capital leases by major classes:

Vehicles Equipment Less: Accumulated amortization

Governmental Activities $ 5,891,886 2,423,146 8,315,032 2,404,573 $ 5,910,459

Business-Type Activities $ 1,527,798 1,527,798 615,363 $ 912,435

59

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 8 - LONG-TERM DEBT (continued) The following is a summary of the changes in liabilities reported in the Statement of Net Assets for the year ended September 30, 2009: Balance October 1 Governmental Activities General and limited obligation bonds/warrants $ 293,330,000 $ Plus: Bond premium 3,351,654 Less: Bond discount (1,814,749) Less: Deferred amount on refunding (3,807,295) Total general and limited obligation bonds/warrants 291,059,610 Notes payable 1,790,000 Obligations under capital leases 5,660,073 Compensated absences 14,229,553 Self-insured legal liability 415,874 Insurance claims 8,852,859 Landfill postclosure liability 1,007,459 OPEB liability 20,936,000 Total governmental activities 343,951,428 Business-type Activities Obligations under capital leases 1,003,091 Compensated absences 346,179 Total business-type activities 1,349,270 Total primary government $ 345,300,698 $

Additions 569,000 -

Deductions $

Balance September 30

Due Within One Year

9,031,828 $ 284,867,172 $ 184,375 3,167,279 (1,463,964) (350,785) (364,361)

(3,442,934)

9,427,017 -

569,000 1,461,358 4,126 26,465,626 27,799,000

7,387,878 210,000 3,198,036 818,750 25,905,545 36,442 -

284,240,732 1,580,000 2,462,037 14,872,161 420,000 9,412,940 971,017 48,735,000

9,427,017 220,000 1,582,883 818,750 4,675,022 37,891 -

56,299,110

37,556,651

362,693,887

16,761,563

444,541

150,546 402,961

852,545 387,759

156,838 83,416

444,541 56,743,651

553,507 $ 38,110,158

1,240,304 $ 363,934,191

240,254 $ 17,001,817

Repayment of principal and interest maturities is made from sales taxes. Also, for governmental activities, compensated absences are generally liquidated by the general fund. Under State law, the City's legal debt may not exceed 20% of the total assessed value of real and personal property within the City. At September 30, 2009, the permissible debt limit exceeded actual debt by approximately $246 million. The City, on behalf of the Mobile Housing Board, has obtained a total of three loans from a bank guaranteed by the Secretary for Housing and Urban Development (HUD) under section 108 of the Housing and Community Development Act of 1974. Proceeds of the loans were passed through the City to the Mobile Housing Board for the construction of three buildings located in downtown Mobile. Although the City remains contingently liable, the loans have been recorded as obligations of the Mobile Housing Board, a separate reporting entity, because of its agreement to service the debt until retirement with proceeds from a HUD community development block grant. The balances of the loans outstanding at September 30, 2009 totaled $4,155,000.

60

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 9 - DEFEASANCE OF PRIOR DEBT The City has defeased certain outstanding general obligation bonds and warrants and other debt by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old debt. Accordingly, the trust accounts and the defeased debt are not included in the City's financial statements. At September 30, 2009, the following outstanding debt is considered defeased: 2000 General Obligation Capital Improvement Warrants $10,645,000. NOTE 10 - RETIREMENT PLANS AND OTHER EMPLOYEE BENEFITS The City contributes to three retirement plans covering substantially all of its employees. Contributions by the City to the three plans during the year are summarized as follows: Employees' Retirement System of Alabama (ERSA) Police and Firefighters Retirement Plan (PFFRP) General Municipal Employee Pension Trust Fund (GMEPTF) Total

$ $

4,260,938 14,333,667 23,218 18,617,823

Employees' Retirement System of Alabama - All of the City's employees, other than police and fire employees, participate in ERSA, an agent multiple-employer, defined benefit pension plan. ERSA provides retirement and other benefits for state employees, state police, and, on an elective basis, to employees of all cities, counties, towns and quasi-public organizations. The ERSA issues a stand-alone financial report which may be obtained by contacting The Retirement Systems of Alabama at 135 South Union Street, Montgomery, AL 36130-2150. The plan provides retirement benefits as well as death and disability benefits. Members vest after 10 years of service. Employees attaining the earlier of age 60 or completing 25 or more creditable years of service are entitled to an annual retirement benefit, payable monthly for life. Service retirement benefits are calculated by three methods with the members receiving payments under the method which yields the highest monthly benefit: (1) minimum guaranteed, (2) money purchase, or (3) formula. Under the formula method, members are allowed 2.0125% of their final average salary (best 3 of the last 10 years) for each year of service. The plan permits early retirement at the age of 60 and completion of 10 years of creditable service. Active employees who become disabled receive disability benefits which are calculated in the same manner as those used for service retirement benefits. These benefits are paid until the earlier of death or recovery from disability. If an active employee dies, his/her designated beneficiary receives payments, not to exceed the balance of his/her vested contributions plus the member's annual earnings from the previous fiscal year at date of death. The beneficiary has the option of receiving an initial lump sum or to receive monthly payments until the designated amount is paid in full.

61

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 10 - RETIREMENT PLANS AND OTHER EMPLOYEE BENEFITS (continued) If a member's employment is terminated before the member is eligible for any other benefits under the Employees' Retirement System of Alabama, the member shall receive a refund of his/her member contribution plus interest credited at 4% per year compounded annually, based upon the following years of service: Service Less than 3 years 3 - 15 years 16 - 20 years 21 - 25 years

Interest credit None 50% of interest earned 60% of interest earned 70 % of interest earned

Employees participating in the plan are required to contribute 5% of their earnings to the plan. Employer contributions during fiscal 2009 were based on 9.20% of salaries. Employer contributions required to support the benefits of the system are determined using a level funding approach and consist of a normal contribution, determined using the "entry age normal" method, and an unfunded accrued liability determined by subtracting the present value of prospective employer normal contributions and member contributions together with the current assets held from the present value of total expected benefits to be paid from the system. Total contributions to the pension plan in fiscal 2009 amounted to $6,838,674 of which $4,260,938 and $2,577,736 were made by the City of Mobile and its employees respectively. The contributed amounts were actuarially determined as described above and were based on an actuarial valuation as of September 30, 2008. The authority to establish or amend the Plan's funding policy is granted under Provisions of Act 515, Acts of Alabama 1945, for the purpose of providing retirement allowances and other specified benefits for state employees, state police, and, on an elective basis, all cities, counties, towns and quasi-public organizations. The responsibility for the general administration and operation of the employee retirement system is vested in the Board of Control. Benefit provisions are established by the Code of Alabama 1975, Sections 36-27-1 through 36-27-103, as amended, sections 36-27-120 through 36-27-139, as amended, and sections 36-27B-1 through 36-27B-6. The annual pension cost and total contributions made for Plan years 2008/09 and 2007/08 were as follows: Plan Year 2008/09

Plan Year 2007/08

Annual pension cost

$

3,293,726

$

2,773,256

Contributions made

$

3,293,726

$

2,773,256

62

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 10 - RETIREMENT PLANS AND OTHER EMPLOYEE BENEFITS (continued) Significant actuarial assumptions used in determining the annual required contribution at September 30, 2008 include: (a) rate of return on investment of present and future assets of 8 percent per year compounded annually and (b) projected salary increases depending on age of employee ranging from 4.61 percent to 7.75 percent per year. Of the salary increases assumption, approximately 4.5 percent of the salary increases is attributable to inflation while the remainder is attributable to merit or seniority. The actuarial value of assets was determined using a five year smoothed market method. The unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at September 30, 2008 was 20 years. Trend information for the Plan: Fiscal Year Ended

Annual Pension Cost (APC)

Percentage of APC Contributed

Net Pension Obligation

Septmeber 30, 2006

$

2,533,082

100%

-

September 30, 2007

$

2,773,256

100%

-

Septmeber 30, 2008

$

3,293,726

100%

-

The schedule of funding progress is as follows: (a)

(b) (c) (d) (e) (f) Actuarial UAAL as Accrued Unfunded a % of Actuarial Actuarial Liability AAL Funded Covered Valuation Value of (AAL) Entry (UAAL) Ratio Covered Payroll Date Assets Age1 (b)-(a) (a)/(b) Payroll (c)/(e) 2 9/30/2003 $ 114,956,154 $ 119,690,360 $ 4,734,206 96.0 % $36,792,401 12.9 % 9/30/20043 $ 118,004,522 $ 123,347,798 $ 5,343,276 95.7 % $36,896,041 14.5 % 9/30/2005 $ 122,477,322 $ 138,627,267 $16,149,945 88.4 % $41,064,856 39.3 % 9/30/20064 $ 127,390,730 $ 148,706,041 $21,315,311 85.7 % $41,421,892 51.5 % 9/30/2007 $ 134,013,310 $ 155,672,217 $21,658,907 86.1 % $42,240,873 51.3 % 9/30/2008 $ 135,296,627 $ 163,728,994 $28,432,367 82.6 % $44,651,914 63.7 % 1Reflects liability for cost of living benefit increases granted on or after October 1, 1978. 2Reflects effect of DROP if unit elected to enroll prior to May 18, 2004. 3Reflects effect of DROP if unit elected to enroll prior to August 4, 2005. 4Reflects changes in actuarial assumptions.

63

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 10 - RETIREMENT PLANS AND OTHER EMPLOYEE BENEFITS (continued) Police and Firefighters Retirement Plan - Every member of the police and fire departments of the City, except for civilian employees hired on or after April 15, 1985, certain civilian employees hired before April 15, 1985, and certain policemen and firemen who elected not to participate during a temporary period of discretionary participation, participates in the PFFRP, a single employer, defined-benefit pension plan. The PFFRP was established by an Act of the Alabama State Legislature. The Act requires that employees contribute 8% of their earnings to the fund, and the City contributes an actuarial1y determined amount. Also contributed by the City are 5% of certain Municipal Court fines and 2% of the gross fire insurance premiums collected on policies which cover property within the City of Mobile limits and its police jurisdiction. The City reimburses the PFFRP for the liability for the pre-retirement lump sum death benefit equal to a match of the employee contributions up to $5,000. The PFFRP issues a stand-alone financial report which may be obtained by contacting the Mobile Police and Firefighters' Retirement Plan Board at Post Office Box 1827, Mobile, AL 36633-1827. Participants in the PFFRP are entitled to certain benefits depending upon whether sufficient assets are in the fund to cover the benefits. Participating members hired prior to March 28, 1990, attaining the earlier of age 50 and completing 20 or more years of service with the last ten years being consecutive are entitled to a monthly benefit of 2.5% of the member's final three years' average salary, not to exceed 75% of final average salary. Participating members hired on or after March 28, 1990, attaining the earlier of age 55 and completing 20 or more years of service with the last ten years being consecutive are entitled to a monthly benefit of 2.5% of the member's final five years' average salary plus 2.25% of final average salary for each year of service in excess of 20 years, not to exceed 72.5% of final average salary. A member actively employed who is eligible for retirement may elect to remain employed by the City as an Eligible Employee and participate in the Deferred Retirement Option Plan for a period not to exceed 36 months, deferring receipt of retirement benefit until employment with the City is terminated. If a participating member of the police or fire department who has at least 15 years of service becomes permanently physically or mentally disabled other than while performing his/her duties as a uniformed officer, he/she shall be entitled to a disability pension equal to 2.5% of his/her final salary multiplied by his/her years of service, but not more than 60% of his/her final salary. If any participant becomes permanently physically or mentally disabled in the line of duty, he/she shall receive a monthly benefit equal to 45% of his/her final salary. If a member disabled in the line of duty can prove to the Board's satisfaction that he/she is totally disabled, he/she will be entitled to 60% of his /her final salary. If a member terminates his/her employment for reasons other than disability or death after completing more than 15 years of service but less than 20 years, the last 10 years being consecutive, he/she is entitled to receive a maximum monthly benefit equal to 2.5% of his/her final three years' average salary multiplied by his/her years' service beginning the later of his/her termination or his/her 65th birthday. If a member with less than 15 years terminates his/her employment for reasons other than disability or death, he/she shall receive a refund of his/her contributions to the Plan.

64

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 10 - RETIREMENT PLANS AND OTHER EMPLOYEE BENEFITS (continued) If a member eligible for retirement dies prior to his/her annuity starting date, his/her eligible family members shall receive a benefit equal to the greater of the 50% survivor's benefit, or a single sum equal to the lesser of twice the member's contributions to the Plan or the sum of the member's contributions plus $5,000. If a member eligible for retirement dies prior to his/her annuity starting date who is not survived by an eligible family member, or if a member not eligible for retirement dies, the beneficiary shall receive a single sum equal to the lesser of twice the member's contributions to the Plan or the sum of the member's contributions plus $5,000. The PFFRP Board has the authority to establish and/or amend the obligations to contribute to the Plan of the Plan members and/or the Plan's sponsor with approval by a majority vote of the city council or like governing body of the City. The minimum required contribution as determined by the Act is the sum of the following amounts: (a) the normal cost for the plan year (determined using the projected unit credit actuarial cost method); (b) the increasing 30-year amortization payment required to amortize the initial unfunded actuarial accrued determined as of October 1, 1996, which amortization payment is scheduled to increase at the rate of annum; (c) the level-dollar 30-year amortization payment required to amortize changes in the unfunded actuarial liability due to plan changes; (d) the level-dollar 10-year amortization payment required to amortize changes in the unfunded actuarial liability due to assumption and method changes; and (e) the level-dollar five-year amortization payment required to amortize changes in the unfunded actuarial liability due to experience.

liability 4% per accrued accrued accrued

The significant actuarial assumptions used to compute the contribution requirements are the same as those used to compute the actuarial accrued liability. The required contribution percentages, developed in the most recent actuarial valuations for the plans, to cover minimum pension liabilities are: Determination of minimum required contribution: Normal cost Amortization of the unfunded actuarial accrued liability Total required contributions as a percentage of expected payroll

12.50 % 37.54 % 50.04 %

Estimated contributions by source: Employees Fire insurance premiums Municipal Court fines City of Mobile

7.60 3.00 0.35 39.09 50.04

% % % % %

$ 2,975,165 1,174,606 137,037 15,303,812 $ 19,590,620

65

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 10 - RETIREMENT PLANS AND OTHER EMPLOYEE BENEFITS (continued) The actuarial required contribution for 2008/2009 and 2007/2008 plan years were determined as part of the October 1 actuarial valuations using the projected unit credit actuarial cost method. The actuarial assumptions included (a) 8% investment rate of return and (b) projected salary increase of 4% per year. Both (a) and (b) included an inflation component of 2.75%. The actuarial value of assets was determined using market value. The unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at October 1, 2008 was 30 years. Trend information for the Annual Pension Cost of the Plan for the current and two previous years are as follows: Fiscal Year Ended September 30, 2007 September 30, 2008 September 30, 2009

Annual Pension Cost (APC) $ 2,810,659 $ 6,443,263 $ 8,307,711

Percentage of APC Contributed 100 % 100 % 100 %

Net Pension Obligation -

The schedule of funding progress is as follows:

Actuarial Valuation Date 10/1/2003 10/1/2004 10/1/2005 10/1/2006 10/1/2007 10/1/2008

(1)

(2)

(3)

Actuarial Value of Assets $ 61,521,737 $ 61,705,780 $ 83,819,260 $ 92,405,268 $105,396,066 $ 89,418,544

Actuarial Accrued Liability (AAL) $ 184,055,017 $ 190,094,181 $ 197,225,687 $ 205,362,700 $ 222,111,577 $ 225,276,657

Unfunded AAL (UAAL) (2)-(1) $ $ $ $ $ $

122,533,280 128,388,401 113,406,427 112,957,432 116,715,511 135,858,113

(4)

Funded Ratio (1)/(2) 33.4 % 32.5 % 42.5 % 45.0 % 47.5 % 39.7 %

(5)

(6)

Covered Payroll $29,428,553 $30,974,684 $32,055,235 $33,158,518 $36,488,843 $39,153,543

UAAL as a % of Covered Payroll (3)/(5) 416.4 % 414.5 % 353.8 % 340.7 % 319.9 % 347.0 %

General Municipal Employee Pension Trust Fund - In 1968, a significant curtailment with respect to participation in the GMEPTF occurred, the effect of which rendered the plan virtually inactive. Participation in the pension fund by City employees hired after 1968 was ended. Eligible employees in 1968 were able to elect participation in the Employees' Retirement System of Alabama plus some combination of benefits under the GMEPTF. The pension fund was insolvent at the date of the change in the plan. The City plans to fund benefits under the GMEPTF as they become due.

66

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 10 - RETIREMENT PLANS AND OTHER EMPLOYEE BENEFITS (continued) At September 30, 2009, the Fund had no assets; accordingly, the City will pay benefits as needed from the General Fund. Annually, the City reviews the plan for significant changes in actuarial assumptions. As a result of such a review as of September 30, 2009, the City has determined that an actuarial update is not required due to the discontinuance of participation in the plan, stable actuarial assumptions, the annual diminishment of the estimated pension liability resulting from benefit payments and the relative insignificance of the plan to the financial position and results of operation of the City. Benefits paid by the City under the GMEPTF during the year ended September 30, 2009 were $23,218. Transit Workers Pension Plan (TWPP) - On June 30, 2003 the City entered into an agreement and declaration of trust (the trust agreement) with Transit Management of Mobile, Inc. (the contracted Operator), to be retroactively effective to July 1, 2002 which contractually obligated the City (as plan sponsor) to reimburse the contracted Operator for the payment of any pension plan or other employee benefits. The trust agreement establishes the TWPP, a single-employer defined benefit pension plan, for the purpose of providing pension benefits to participants, retired participants and beneficiaries that are equivalent to those benefits that were previously offered under the ERSA. The TWPP covers employees of the contracted Operator (former employees of the City) and was established under the Urban Mass Transportation Act which requires provisions for the preservation of rights, privileges and benefits, including the continuation of pension rights and benefits. All full-time employees of the contracted Operator, other than the general manager, are eligible to participate in the plan. The plan year begins July 1, and ends June 30. The TWPP issues a stand-alone financial report which may be obtained by contacting the Board of Trustees of the TWPP at 1224 West 1-65 Service Road South, Mobile, AL 36609. The plan provides retirement benefits as well as death and disability benefits. Members vest after 5 years of service. Employees attaining the earlier of age 60 or completing 25 or more creditable years of service are entitled to an annual retirement benefit, payable monthly for life. Participants receive credited service for all periods of full-time covered employment as well as for the period during which the participant was a member of the ERSA, including periods of purchased creditable service under the ERSA, as well as for the period beginning with the date the participant was no longer an active member of ERSA and ending on June 30, 2002. Members receive payments based on 2.0125% of average monthly compensation (best 3 of the last 10 years) multiplied by credited service, offset by the monthly accrued benefit payable from the ERSA and attributable to service recognized as credited service under this plan. The plan permits early retirement at the age of 60 upon completion of 5 years of creditable service. Active employees who become disabled receive disability benefits which are calculated in the same manner as that used for service retirement benefits. These benefits are paid until the earlier of death or recovery from disability. If an active employee dies, his/her designated beneficiary receives payments, not to exceed the balance of his/her vested contributions plus the member's annual earnings from the previous fiscal year at date of death. The beneficiary has the option of receiving an initial lump sum or to receive monthly payments until the designated amount is paid in full.

67

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 10 - RETIREMENT PLANS AND OTHER EMPLOYEE BENEFITS (continued) If a member's employment is terminated before the member is eligible for any other benefits under the plan, the member shall receive a single lump sum payment equal to accumulated contributions plus interest credited at 4% per year compounded annually (for participants who have earned less than five years of credited service), or a monthly accrued benefit payable at normal retirement age calculated in the same manner as that used for service retirement benefits (for participants who have earned at least five years of credited service). Employees participating in the plan are required to contribute 5% of their earnings to the plan, and the City contributes an actuarially determined amount. Employer contributions required to support the benefits of the system are determined using a level funding approach and consist of a normal contribution, determined using the unit credit cost method, and an unfunded accrued liability determined by subtracting the present value of prospective employer normal contributions and member contributions together with the current assets held from the present value of total expected benefits to be paid from the system. The contributed amounts were actuarially determined as described above and were based on an actuarial valuation as of July 1, 2008. The actuarial assumptions included (a) 5.9% investment rate of return and (b) projected salary increase of 4% per year. Both (a) and (b) included an inflation component of 3%. The actuarial value of assets was determined using market value. The unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on a closed basis. The remaining amortization period at July 1, 2008 was 6 years. Trend information for the Annual Required Contribution of the Plan for the current and three previous years are as follows:

Plan Year Ended June 30, 2006 June 30, 2007 June 30, 2008 June 30, 2009

Annual Required Contribution $ $ 48,357 $ 232,679 $ 789,769

Percentage Contributed 100 100 100 100

% % % %

Net Pension Obligation -

68

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 10 - RETIREMENT PLANS AND OTHER EMPLOYEE BENEFITS (continued) The schedule of funding progress is as follows:

Actuarial Valuation Date 7/1/2003 7/1/2004 7/1/2005 7/1/2006 7/1/2007 7/1/2008

$ $ $ $ $ $

(1)

(2)

Actuarial Value of Assets 1,142,784 1,486,579 1,640,163 2,051,366 2,645,002 2,793,191

Actuarial Accrued Liability (AAL) 2,527,329 3,183,378 3,716,181 3,747,562 4,537,095 5,037,031

$ $ $ $ $ $

(3)

(4)

Unfunded AAL (UAAL) Funded Ratio (1)/(2) (2)-(1) $ 1,384,545 45.2 % $ 1,696,799 46.7 % $ 2,076,018 44.1 % $ 1,696,196 54.7 % $ 1,892,093 58.3 % $ 2,243,840 55.5 %

(5)

$ $ $ $ $ $

Covered Payroll 1,940,890 2,321,101 2,766,040 2,733,052 3,280,678 3,468,543

(6) UAAL as a % of Covered Payroll (3)/(5) 71.3 % 73.1 % 75.1 % 62.1 % 57.7 % 64.7 %

Other Post-Employment Benefits (OPEBs) The City provides post-employment health care coverage, including dental benefits, and life insurance, as allowed by Alabama state laws, to eligible individuals on a pay-as-you-go basis. With respect to retirees, life insurance is equal to $6,000 for former employees and $2,000 for each covered dependent and is a fully-insured benefit provided by an insurance company selected periodically by the City. With respect to disabled employees for the first 12 months of disability prior to age 65, life insurance is equal to the lesser of two times annual salary or $75,000 plus an accidental death and dismemberment benefit of the same amount. The cost of retiree health care, dental care and life insurance benefits is recognized as an expenditure as claims are paid. For fiscal year 2009, those costs totaled approximately $5,901,520 and the liability for incurred and not paid claims totaled $920,600. Eligible Individuals: Eligible individuals include all regular, full-time employees of the City and their spouses and dependent children who are covered on the date of the employee's retirement, disability, or death, as applicable. General employees must be age 60 with at least 10 years of service with the City out of the last 12 years of employment or any age with at least 25 years of service, of which at least the last 10 years were in active employment with the City and at least 20 years were under the Mobile County Merit System. Alternatively, general employees with at least 10 years of service who become eligible for a disability pension under the Retirement System of Alabama (RSA) will also be eligible for coverage. Police and fire employees must be age 50 (if hired prior to March 28, 1990) or age 55 (otherwise) with at least 20 years of service or must become eligible for a disability pension from the police and firefighter retirement plan sponsored by the City. Alternatively, police and fire employees who terminate their employment prior to retirement, but who have earned at least 20 years of service, will also be eligible for coverage, provided that they pay the COBRA premium during the deferral period prior to their retirement. All other employees who terminate their employment are eligible for COBRA coverage. Spouses of deceased employees or retirees are also eligible for COBRA coverage prior to age 65.

69

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 10 - RETIREMENT PLANS AND OTHER EMPLOYEE BENEFITS (continued) Required Monthly Premium for Post-Employment Benefit Coverage: Retirees must pay the required monthly premium for either single or family coverage, as applicable. During fiscal year 2009, retirees have been assumed to make monthly contributions equal to $54 for single coverage and $140 for family coverage. COBRA contributions for the same period have been assumed to be $275 per month for single coverage and $714 per month for family coverage. Dependents of deceased retirees may pay the monthly retiree rate for up to 12 months after the retiree's death, but must pay the monthly COBRA premium thereafter. Dependents of employees who either have earned at least 10 years of service or die in the line of duty are eligible to pay the same premium. All other terminated employees and dependents must pay the COBRA premium for continued coverage. Annual OPEB Cost and Net OPEB Obligation: The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period of time. The following table shows the components of the City's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City's net OPEB obligation to the OPEB Plan:

Annual OPEB Cost Employer Contributions Interest on Employer Contributions Increase in the Net OPEB Obligation Net OPEB Obligation, beginning of year Net OPEB Obligation, end of year Trend information for the OPEB Plan: Annual Required Contribution Fiscal Year Ended (ARC) September 30, 2008 $ 26,672,000 September 30, 2009 $ 35,056,000

As of September 30, 2009 $ 34,082,000 (6,161,000) (122,000) 27,799,000 20,936,000 $ 48,735,000

Percentage Contributed 22% 18%

Annual OPEB Cost $ 26,672,000 $ 34,082,000

% Contributed 22% 18%

70

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 10 - RETIREMENT PLANS AND OTHER EMPLOYEE BENEFITS (continued) Funding Status and Funding Progress As of September 30, 2009, the actuarial accrued liability for benefits was $254,637,000, all of which was unfunded. The covered payroll (annual payroll of active employees covered by the plan) was $93,574,000 and the ratio of the unfunded actuarial accrued liability to the covered payroll was 272.1 percent. The projection of future benefit payments for an ongoing plan involves estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, present trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. The schedule of funding progress is as follows: (1) Actuarial Valuation Date October 1, 2007 October 1, 2009

(2)

(3) (4) Actuarial Unfunded Actuarial Accrued AAL (UAAL) Value of (3)-(2) Liability Assets (AAL) $ $ 196,597,000 $ 196,597,000 $ $ 254,637,000 $ 254,637,000

(5) Funded Ratio (1)/(2) 0% 0%

(6)

(7)

Covered Net OPEB Payroll Obligation $71,720,000 274.1% $93,574,000 272.1%

Actuarial Methods and Assumptions: Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The City used the projected unit credit cost method to determine all liabilities, with the liability for each active employee assumed to accrue over his working lifetime based on elapsed time from his date of hire until retirement.

71

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 10 - RETIREMENT PLANS AND OTHER EMPLOYEE BENEFITS (continued) Valuation date

October 1, 2009

Actuarial cost method

Projected unit credit

Amortization method

15 year open period; level-dollar payment

Investment return

4.0% per annum (includes inflation at 2.5% per annum)

Healthcare cost trend rate(s): Select rates

Ultimate rate

Medical 10% for 2009/2010 graded to 6% for 2017/2018

Dental Not applicable

5.0% per annum

3.0% per annum

Deferred Compensation Plans - The City offers its employees a choice of two deferred compensation plans created in accordance with Internal Revenue Code Section 457. The plans, available to all City employees, permit them to defer a portion of their salary until future years. One of the plans is administered by a nongovernmental third party and the other by the Retirement Systems of Alabama. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency. All amounts of compensation deferred under the plans, all property and rights purchased with those amounts, and all income attributable to those amounts, property or rights are (until paid or made available to the employee or other beneficiary) solely the property and rights of the individuals who participate in the deferred compensation plan and are not subject to the claims of the City's general creditors. NOTE 11 - RESTRICTED NET ASSETS The following is a summary of the restricted net assets at September 30, 2009: Activity Capital Projects Capital Projects Debt Service Economic Development Grant Programs

Restricted By Enabling Legislation Legal Restriction Legal Restriction Enabling Legislation Grant Agreements

$

$

Amount 712,096 3,619,712 3,367,694 3,164,397 2,467,570 13,331,469 72

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 12 - RENTAL INCOME The City is lessor of a parking garage under a lease agreement effective August 17, 2004 for an initial term of 49 years. The lessee may, at its option, extend the initial term of the lease for two additional periods. The first extension shall be for a term of 15 years on the same terms and conditions of the initial term by giving written notice to the City at least 60 days prior to the end of the initial term. The second extension shall be for a term of 12 years and 2 days, terminating on August 19, 2080 on the same terms and conditions of the initial term by giving written notice to the City at least 60 days prior to the end of the first extension term. The lessee paid a base amount of $5,000,000 which constituted payment in full of all base rent due under the lease for the lease term; therefore the base rental amount is being recognized as revenue over a period of 49 years. The lease allows the lessee to pay all expenses associated with the operation of the parking garage from rentals received. A percentage of the balance remaining after payment of these expenses is to be remitted to the City at the end of each lease year commencing on October 1 of each year. Rental income of $411,804 for fiscal year 2009 is included in the Enterprise Funds - Municipal Parking Garage fund. Also see Note 8 for additional information relating to leased property. NOTE 13 - COMMITMENTS AND CONTINGENCIES Joint Governmental Complex On June 26, 1990, the City entered into an operating lease with the County of Mobile (The County) to lease space in a joint governmental complex. Lease payments for the City were $1,313,389 for the year ended September 30, 2009. The above referenced lease agreement is renewable annually and calls for the City to pay a minimum $935,000 in lease payments for each full renewed lease year. The annual rent is adjusted once every two lease years by a factor based on the fee received by the City from the County for the City's collection of the County's sales tax.

73

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 13 - COMMITMENTS AND CONTINGENCIES (continued) University of South Alabama Cancer Center The City entered into a performance agreement with the University of South Alabama dated December 7, 2004 to pay to the University a sum sufficient to pay debt service on $6 million (plus interest at 5% per annum) of the total construction and start-up costs of the Cancer Center. The funds will be paid over a ten year period commencing August 1, 2005. In order to provide for a method of paying the sums agreed, the City adopted Ordinance No. 34-055 effective December 7, 2004 to amend the tax rate imposed on hotels, motels, tourist courts, tourist cabins, lodging houses and rooming houses (the Lodging Tax) within the City, in addition to all license taxes already imposed upon them, a license tax equal to 8% of gross receipts and that in the Police Jurisdiction to an additional 3% of gross receipts. The City has specially and irrevocably pledged this increase for the payment of the principal and interest to the University. Future payments under this agreement are due as follows: Fiscal Year Ending September 30 2010 2011 2012 2013 2014 Totals

Amount Representing Principal $ 600,000 600,000 600,000 600,000 600,000 $ 3,000,000

Amount Representing Interest $ 163,671 163,671 163,671 163,671 163,671 $ 818,355

Total Future Commitments $ 763,671 763,671 763,671 763,671 763,671 $ 3,818,355

Self-Insured Liability - Legal The City of Mobile is a defendant in various suits and has been notified of claims against it, said suits and claims arising from alleged defects in sidewalks, streets, public drainage facilities and other public ways, or arising from alleged negligent operation of motor vehicles and other alleged tortuous misconduct on the part of City employees. The City attorney has reviewed these claims and lawsuits in order to evaluate the likelihood of an unfavorable outcome to the City and to arrive at an estimate, if any, of the amount or range of potential loss to the City. As a result of such review, the various claims and lawsuits have been categorized into "probable", "reasonably possible" and "remote" contingencies. According to the City attorney, loss contingencies categorized as "probable" range between $420,000 and $632,341. Consequently, the City has accrued at September 30, 2009, the lesser of the range equal to $420,000. Loss contingencies categorized as "reasonably possible" range between $398,504 and $786,000.

74

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 14 - 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 claim liabilities are reported if information prior to issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. The City is self-insured for claims and judgments, general liability, and general automobile liability. As more fully discussed in Note 13, the City has determined and recorded an estimate of $420,000 for loss contingencies relating to claims and judgments. Claim settlement and loss expenses are accrued for estimated reported claims. Past experience indicates that incurred but not reported claims, in aggregate, do not represent a material amount and, therefore, have not been accrued at year-end. The City is also self-insured for workers' compensation claims up to $500,000 per accident and for employee health insurance claims. An excess coverage insurance policy covers individual claims in excess of $500,000 per accident for workers' compensation claims. The City has contracted with outside parties for claims administration. The estimated liability for workers' compensation claims as of September 30, 2009 is $7,298,112. The liability for employee health insurance claims includes an estimated amount for claims that have been incurred but have not been reported. The present value of the estimated liability for employee health claims as of September 30, 2009 is $2,114,828. The schedule below presents the changes in claims liabilities for the past two years for the City's selfinsured liabilities:

Claims and judgments, general liability and general and automotive liability 2007-2008 2008-2009 Employee Health 2007-2008 2008-2009 Workers' Compensation 2007-2008 2008-2009

Beginning of Fiscal Year Liability

Current Year Claims and Changes in Estimates

Claim Payments

$ $

420,734 415,874

$ 1,695,559 $ 969,480

$ 1,700,419 $ 965,354

$ $

$ 1,763,630 $ 1,704,746

$19,415,131 $24,134,330

$ 19,474,015 $ 23,724,248

$ 1,704,746 $ 2,114,828

$ 8,143,885 $ 7,148,114

$ 1,327,558 $ 2,136,094

$ 2,323,329 $ 1,986,096

$ 7,148,114 $ 7,298,112

End of Fiscal Year Liability

415,874 420,000

75

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 15 - FUNDS DEFICITS OF NON-MAJOR FUNDS Deficits in net assets/fund balance of non-major funds at September 30, 2009, are as follows: Non-major Enterprise Fund Firemedics Internal Service Fund Employee Health Fund

$

142,648

$

5,955,003

NOTE 16 - MUNICIPAL SOLID WASTE LANDFILLS The City has in operation two solid waste landfills. The responsibility for annual operation and future closure and postclosure care costs of one of the landfills has been transferred to another entity. At September 30, 2009, the City believes that this entity is financially capable of meeting the closure and postclosure care obligations when they are due. Accordingly, a liability for such future costs has not been established. The City owns a second landfill site which has reached full capacity. State and federal laws and regulations require the City to perform certain maintenance and monitoring functions at the landfill site for thirty years after closure. The $971,017 reported in the Statement of Net Assets as a landfill postclosure liability at September 30, 2009 represents the estimated current cost of all postclosure care. However, due to changes in technology, laws or regulations, these costs may change in the future.

NOTE 17 - IRREVOCABLE LETTER OF CREDIT The City entered into an Irrevocable Letter of Credit on May 14, 2002 with their 2002 Limited Obligation Tax Increment Warrants' Paying Agent in the amount of $11,148,326 for the benefit of the holders of the $10,655,000 City of Mobile, Alabama Limited Obligation Tax Increment Warrants, Series 2002 (Warrants) issued by the City pursuant to an Ordinance duly adopted by the City on May 7, 2002. The Letter of Credit can only be used by the City to make a drawing to pay the amount of principal and/or interest due on the Warrants or redemption premium of the Warrants. The Letter of Credit was renewed on May 15, 2009 with the terms and conditions requiring an annual renewal of the agreement.

76

CITY OF MOBILE, ALABAMA NOTES TO THE FINANCIAL STATEMENTS September 30, 2009

NOTE 18 - SUBSEQUENT EVENTS On November 27, 2009 a lease-purchase agreement was entered into for $3,200,000 for the purchase of safety equipment. On December 9, 2009 the City issued 2009A G. O. Refunding Warrants in the amount of $56,380,000. The Series 2009A Warrants were issued for the purpose of refunding the City's General Obligation Refunding Warrants, Series 2002. On the same date the City issued 2009B (Taxable) G. O. Build America Warrants and 2009C (Taxable) G. O. Recovery Zone Economic Development Warrants in the amounts of $16,765,000 and $6,430,000 respectively. These warrants are for the construction of Gulf Quest, Maritime Museum, a parking facility and a fire station. On February 17, 2010 the City issued G. O. Taxable Build America Warrants, Series 2010 in the amount of $2,000,000 for the purchase of fire pumper trucks.

77

RSI - GENERAL FUND

Required Supplementary Information Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget to Actual - General Fund Notes to Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget to Actual - General Fund

REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN THE MD&A

CITY OF MOBILE, ALABAMA SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GENERAL FUND For the Year Ended September 30, 2009 Actual (Budgetary Basis)

Budgeted Amounts Original

Final

Variance with Final Budget Positive/ (Negative)

Revenues Taxes Licenses and permits Intergovernmental Charges for Services Fines and forfeitures State and federal assistance Interest Miscellaneous (other) Total

Expenditures Departmental General government City Clerk Mayor's office City Council CitiSmart City Hall Overhead Archives Legal Urban development Administrative services Human resources Municipal info. system Geographical info. system Telecommunications Total general government

Economic development Mobile film office Historic development Neighborhood and community services Total economic development

Public safety Police Fire Municipal court Mobile Metro Jail Animal shelter Total public safety

$

151,974,505 34,440,844 785,000 9,289,554 5,017,938 1,130,000 50,000 202,687,841

$ 151,974,505 34,440,844 785,000 9,289,554 5,017,938 1,130,000 50,000 202,687,841

658,660 850,916 948,921 276,445 4,060,866 348,621 1,514,861 4,743,361 304,017 456,082 3,395,734 783,579 913,206

$

140,661,823 34,199,725 1,548,996 8,167,239 4,570,041 4,093,733 468,552 1,760,286 195,470,395

$ (11,312,682) (241,119) 763,996 (1,122,315) (447,897) 4,093,733 (661,448) 1,710,286 (7,217,446)

659,959 851,840 784,626 276,610 3,916,570 349,666 1,518,683 4,760,777 302,250 457,315 3,426,575 786,997 916,914

508,741 712,535 750,780 239,972 4,449,191 287,958 1,305,448 4,179,566 283,325 422,176 3,300,203 768,812 840,124

151,218 139,305 33,846 36,638 (532,621) 61,708 213,235 581,211 18,925 35,139 126,372 18,185 76,790

19,255,269

19,008,782

18,048,831

959,951

195,062 340,622

195,062 348,616

186,630 309,224

8,432 39,392

653,873 1,189,557

669,530 1,213,208

502,090 997,944

167,440 215,264

45,396,323 27,914,041 2,861,275 7,483,524 869,670 84,524,833

45,551,036 27,973,120 3,704,973 7,483,524 877,948 85,590,601

45,758,017 28,148,348 3,121,477 7,591,528 862,672 85,482,042

(206,981) (175,228) 583,496 (108,004) 15,276 108,559

78

CITY OF MOBILE, ALABAMA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL (CONT'D) GENERAL FUND For the Year Ended September 30, 2009

Budgeted Amounts Original

Variance with Final Budget Positive/ (Negative)

Actual (Budgetary Basis)

Final

Departmental (Cont'd) Public works Public service administration Flood control Administration Concrete and sidewalk repair Right-of-way maintenance Asphalt street repair Street sweeping Dredge Storm drain & heavy equipment Landfill Solid waste Trash Electrical Engineering Real estate office Real estate management Keep Mobile Beautiful Municipal garage Architectural engineering Environmental services Public buildings Mechanical systems Traffic engineering Total public works Culture and recreation Parks and recreation director Community activities Mobile Museum of Art History Museum Parks maintenance Recreation - athletics Recreation Special activities Parks and cemeteries Mobile Regional Senior Community Center Baseball stadium Total culture and recreation

$

240,154 1,502,805 1,366,108 1,382,430 934,337 1,330,015 665,913 903,150 1,469,618 2,543,000 3,617,884 3,464,088 2,617,887 1,811,613 241,628 172,413 379,599 12,880,360 1,354,083 572,061 2,290,745 1,827,725 1,452,078 45,019,694

$

240,182 1,558,789 1,325,157 1,432,286 937,565 1,313,760 669,820 913,651 1,472,174 2,544,818 3,640,876 3,459,107 2,651,803 1,801,872 241,699 172,404 380,283 13,269,071 1,354,338 583,296 2,293,747 1,838,003 1,540,810 45,635,511

$

233,564 1,481,265 1,129,349 1,418,718 736,573 948,345 612,517 764,423 1,145,604 2,700,709 3,385,175 3,351,310 1,991,405 1,501,138 228,120 169,846 326,187 7,636,819 1,330,465 511,381 2,168,439 1,867,809 1,550,363 37,189,524

$

6,618 77,524 195,808 13,568 200,992 365,415 57,303 149,228 326,570 (155,891) 255,701 107,797 660,398 300,734 13,579 2,558 54,096 5,632,252 23,873 71,915 125,308 (29,806) (9,553) 8,445,987

157,580 145,061 2,303,202 1,534,003 4,736,550 942,264 3,732,927 486,444 2,430,478

157,751 149,502 2,353,804 1,540,381 4,752,211 943,015 3,744,076 488,018 2,435,931

154,272 150,061 2,100,834 1,468,165 3,686,851 828,043 3,335,986 584,762 2,309,842

3,479 (559) 252,970 72,216 1,065,360 114,972 408,090 (96,744) 126,089

523,191 6,000

602,624 6,000

446,210 -

156,414 6,000

16,997,700

17,173,313

15,065,026

2,108,287

320,391 269,071 456,337 869,088 477,532 382,358 232,641 209,025 2,439,093 5,655,536

320,391 269,090 456,764 870,573 477,523 382,503 234,878 209,065 2,449,458 5,670,245

306,204 222,634 422,621 724,352 431,969 341,242 231,704 198,293 2,143,281 5,022,300

14,187 46,456 34,143 146,221 45,554 41,261 3,174 10,772 306,177 647,945

Finance Finance administration Budget Purchasing Accounting Inventory control Treasury Payroll Police and fire pension Revenue Total finance

79

CITY OF MOBILE, ALABAMA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL (CONT'D) GENERAL FUND For the Year Ended September 30, 2009

Budgeted Amounts Original

Attrition savings Reserve for retirement Total departmental expenditures

$

Final

(12,586,742) $ (12,586,742) $ 1,500,000 1,500,000 161,555,847 163,204,918

Actual (Budgetary Basis)

Variance with Final Budget Positive/ (Negative)

770,897 162,576,564

$ (12,586,742) 729,103 628,354

(112,329) 385,328 272,999

Nondepartmental Mandated activities Personnel Board Board of Health Juvenile court and youth center Total mandated activities Joint activities Board of equalization Emergency management Mobile legislative delegation Total joint activities Agencies Public Library Total agencies Employee cost Retired employees insurance Employee education Workmen's compensation Unemployment compensation Employees' pension Police and firefighter's retirement Total employee cost Other Fire insurance Contractual South Alabama Regional Planning Dues Athletic fund Police drug fund State and federal projects General miscellaneous

Total other Total nondepartmental expenditures Total expenditures Excess (deficiency) of revenues over expenditures

1,127,188 600,000 3,200,000 4,927,188

1,127,188 600,000 3,200,000 4,927,188

1,239,517 600,000 2,814,672 4,654,189

7,152 485,564 43,608 536,324

7,152 485,564 43,608 536,324

7,142 432,876 43,058 483,076

6,986,104 6,986,104

6,986,104 6,986,104

6,986,104 6,986,104

4,410,000 50,000 2,275,000 65,000 109,272 6,502,366 13,411,638

4,410,000 50,000 2,275,500 65,000 109,272 6,502,366 13,412,138

4,460,777 115,254 2,465,958 53,771 99,710 5,401,634 12,597,104

(50,777) (65,254) (190,458) 11,229 9,562 1,100,732 815,034

1,950,000 5,112,172 439,826 154,000 105,000 7,760,998

1,950,000 5,112,172 439,826 154,000 6,068 474,401 103,805 8,240,272

1,720,408 5,100,126 1,963 440,170 142,393 322,371 4,650,060 944,630 13,322,121

229,592 12,046 (1,963) (344) 11,607 (316,303) (4,175,659) (840,825) (5,081,849)

33,622,252 195,178,099

34,102,026 197,306,944

38,042,594 200,619,158

(3,940,568) (3,312,214)

7,509,742

5,380,897

(5,148,763)

10 52,688 550 53,248 -

(10,529,660)

80

CITY OF MOBILE, ALABAMA SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL (CONT'D) GENERAL FUND For the Year Ended September 30, 2009

Budgeted Amounts Original

Variance with Final Budget Positive/ (Negative)

Actual (Budgetary Basis)

Final

Other financing sources (uses): Transfers in Transfers out Sales of general capital assets Total other financing sources (uses) Excess (deficiency) of revenues and other financing sources over expenditures and other financing uses Fund balances Beginning of the year End of the year Adjustments necessary to convert the results of operations at the end of the year on the budget basis to the modified accrual basis are as follows: Excess (deficiency) of revenues and other financing sources over expenditures and other financing uses Encumbrances outstanding at September 30, 2009 Encumbrances outstanding at September 30, 2008 Net change in fund balance per the statement of revenues, expenditures, and changes in fund balance

$

$

7,045,272 $ 7,058,547 $ (17,486,947) (17,853,902) 8,000 8,000 (10,433,675) (10,787,355)

7,750,318 (14,872,939) 75,602 (7,047,019)

$

691,771 2,980,963 67,602 3,740,336

$

(6,789,324)

(2,923,933)

(5,406,458)

(12,195,782)

(14,280,274)

(31,146,453)

15,647,232

(17,204,207) $ (36,552,911) $

$

3,451,450

(12,195,782) 1,034,392 (1,220,923)

$

(12,382,313)

81

CITY OF MOBILE, ALABAMA NOTES TO SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GENERAL FUND For the Year Ended September 30, 2009 NOTE 1 - BUDGET RECONCILIATION The reported budgetary data represents the final appropriated budget after amendments adopted by the City Council. An appropriated budget was legally adopted for the General Fund on the same modifiedaccrual basis used to present actual revenue and expenditures, except, for budgetary purposes, current year encumbrances are treated as expenditures. The following is a summary of the reconciliation of generally accepted accounting principles (GAAP) expenditures to budgetary expenditures for the fiscal year ended September 30, 2009: GAAP expenditures

$ 200,805,687

Encumbrances at: September 30, 2009 September 30, 2008 Budgetary expenditures

1,034,392 (1,220,923) $ 200,619,156

For the fiscal year ended September 30, 2009, general fund expenditures exceeded budgetary appropriations by $3,312,214. NOTE 2 - FUND BALANCE Following is a reconciliation of the General Fund's fund balance - budgetary basis to fund balance generally accepted accounting principles (GAAP) basis: Fund balance - budgetary basis at September 30, 2009 Add encumbrances: Function General government Economic development Public safety Public works Culture and recreation Finance Other Total encumbrances Fund balance - GAAP basis at September 30, 2009

$

3,451,450

$

166,209 6,290 249,347 496,172 86,611 26,364 3,399 1,034,392 4,485,842

82

GOVERNMENTAL FUNDS - NON-MAJOR

Governmental funds are those through which most governmental functions of the City are financed. Special Revenue Funds - These funds are used to account for the proceeds of specific revenue sources (other than for major capital projects) requiring separate accounting because of legal or regulatory provisions or administrative action. Debt Service Funds - These funds are used to account for assets held for the repayment of principal and interest on the City's outstanding bond issues. Capital Projects Funds - These funds are used to account for financial resources for the acquisition or construction of major capital facilities (other than those financed by proprietary fund types).

COMBINING FINANCIAL STATEMENTS

CITY OF MOBILE, ALABAMA COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS (BY FUND TYPE) September 30, 2009

Debt Service Funds

Special Revenue Funds

ASSETS Cash, equity in pooled cash and investments Receivables, net Due from other funds Total assets LIABILITIES Accounts payable and accrued liabilities Due to other funds Total liabilities FUND BALANCES Reserved for: Encumbrances Economic development Road and bridge repair Road and bridge construction Unreserved, reported in: Capital projects funds Debt service funds Total fund balances Total liabilities and fund balances

$ $ $

4,275,892 378,399 18,500 4,672,791

$

789,304 6,995 796,299

$

$

3,164,397 608,929 103,166

$

3,876,492 4,672,791

3,367,695 3,367,695 -

Capital Projects Funds

$ $ $

-

$

3,367,695 3,367,695 3,367,695

Total Non-major Governmental Funds

$

20,168,218 741,336 20,909,554

$

784,106 600,000 1,384,106

$

$

27,811,805 1,119,735 18,500 28,950,040 1,573,410 606,995 2,180,405

10,153 -

10,153 3,164,397 608,929 103,166

19,515,295 19,525,448 20,909,554

19,515,295 3,367,695 26,769,635 28,950,040

$

83

CITY OF MOBILE, ALABAMA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS (BY FUND TYPE) For the Year Ended September 30, 2009

Special Revenue Funds Revenues Taxes Licenses and permits State and federal assistance Interest Other revenue Total revenues Expenditures Current: Nondepartmental Capital outlay Debt Service: Principal payments Interest and fees Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balance Fund balances, beginning of the year Fund balances, end of the year

$

6,434,849 16,180 8,773 6,459,802

Debt Service Funds $

2,564,181 1,431,185

-

-

$

88,905 88,905

Total Non-major Governmental Funds

Capital Projects Funds $

9,394,946 2,801,113 2,408,569 110,124 1,136,318 15,851,070

$

15,829,795 2,801,113 2,408,569 215,209 1,145,091 22,399,777

763,670 10,733,623

3,327,851 12,164,808

1,615 3,996,981

8,890,000 14,162,353 23,052,353

99,683 11,596,976

8,890,000 14,263,651 38,646,310

2,462,821

(22,963,448)

4,254,094

(16,246,533)

18,500 (1,886,430) (1,867,930) 594,891 3,281,601 3,876,492

23,655,223 (662,397) 22,992,826 29,378 3,338,317 3,367,695

$

(10,817,088) (10,817,088) (6,562,994) 26,088,442 $ 19,525,448

23,673,723 (13,365,915) 10,307,808 (5,938,725) 32,708,360 $ 26,769,635

84

NON-MAJOR SPECIAL REVENUE FUNDS

·

Four-cent Gasoline Tax - This fund accounts for tax revenues to be used to pay for street resurfacing.

·

Five-cent Gasoline Tax - This fund accounts for tax revenues to be used to pay the cost of construction, improvement, maintenance and supervision of highways, bridges and streets, including the retirement of bonds for the payment of which such revenues have been or may hereafter be pledged.

·

Seven-cent Gasoline Tax - This fund accounts for tax revenues to be used to pay the cost of electricity for street lights and the cost of operating the concrete and storm sewer maintenance, street sweeping, street repair, ditch cleaning, pipe-laying and heavy equipment departments.

·

Fuel Inspection Fees - This fund accounts for a special inspection fee levied by the State of Alabama to be used for street improvements and City planning purposes.

·

Economic Development - This fund is used to account for activities funded by recaptured funds from refinanced second mortgages for economic development planning from the Mobile Housing Board.

·

Tax Increment - This fund is used to account for revenues generated by tax collections under the Tax Increment Financing Plan and used to pay for redevelopment projects in the downtown area.

CITY OF MOBILE, ALABAMA COMBINING BALANCE SHEET NON-MAJOR SPECIAL REVENUE FUNDS September 30, 2009 Gasoline Tax Funds

4 Cent Gasoline Tax ASSETS Cash, equity in pooled cash and investments Receivables, net Due from other funds Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Retainage payable Due to other funds Total liabilities Fund Balances: Reserved for: Economic development Road and bridge repair Road and bridge construction Total fund balances Total liabilities and fund balances

$ $

$

$

5 Cent Gasoline Tax

7 Cent Gasoline Tax

1,018,783 115,504 1,134,287

$

$

462,287 63,071 525,358

$

608,929 608,929 1,134,287

$

$

46,300 56,866 103,166

-

103,166 103,166 103,166

$

$

$

Total

199,034 18,500 217,534

$

217,534 217,534

$

217,534

$

$

1,065,083 371,404 18,500 1,454,987

679,821 63,071 742,892

608,929 103,166 712,095 1,454,987

85

Fuel Inspection Fees

$

-

Economic Development

$

30,737 30,737

$

$

6,995 6,995

-

6,995

30,737 30,737 30,737

6,995 $

$

6,995

-

$

$

$

Tax Increment

$

$

$

Total

3,180,072 3,180,072

$

45,252 1,160 46,412

$

3,133,660 3,133,660 3,180,072

$

$

4,275,892 378,399 18,500 4,672,791

725,073 64,231 6,995 796,299

3,164,397 608,929 103,166 3,876,492 4,672,791

86

CITY OF MOBILE, ALABAMA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR SPECIAL REVENUE FUNDS For the Year Ended September 30, 2009 Gasoline Tax Funds

Revenues Taxes Interest Other revenue Total revenues Expenditures Nondepartmental Economic development Gas Electricity Professional and technical Total nondepartmental Capital outlay Construction Testing Right-of-way and realty Total capital outlay Total expenditures Excess (deficiency) of revenues over expenditures Other financing sources (uses) Transfers in Transfers out Interest and fees Net change in fund balance Fund balances, beginning of the year Fund balances, end of the year

4 Cent Gasoline Tax

5 Cent Gasoline Tax

7 Cent Gasoline Tax

Total

$ 1,310,997 1,310,997

$ 646,264 646,264

$ 2,261,921 2,261,921

$ 4,219,182 4,219,182

-

-

73,208 2,405,760 2,478,968

73,208 2,405,760 2,478,968

1,043,431 10,612 644 1,054,687 1,054,687

-

2,478,968

1,043,431 10,612 644 1,054,687 3,533,655

256,310

$

256,310 352,619 608,929

646,264 (1,075,000) (428,736) 531,902 $ 103,166

(217,047) 18,500 198,547 $ -

685,527

$

18,500 (876,453) (172,426) 884,521 712,095

87

Fuel Inspection Fees $

$

Tax Increment

Total

$ 2,133,818 16,151 2,149,969

$ 6,434,849 16,180 8,773 6,459,802

360 360

84,853 84,853

84,853 73,208 2,405,760 360 2,564,181

360

376,498 376,498 461,351

1,419,929 10,612 644 1,431,185 3,995,366

81,849

8,442

1,688,618

2,464,436

(81,849) -

8,442 22,295 30,737

(928,128) (1,615) 758,875 2,374,785 $ 3,133,660

81,849 81,849

Economic Development $

29 8,773 8,802

-

-

-

-

$

18,500 (1,886,430) (1,615) 594,891 3,281,601 $ 3,876,492

88

CITY OF MOBILE, ALABAMA SCHEDULE OF CAPITAL PROJECTS BY PROGRAM AND DISPOSITION NON-MAJOR SPECIAL REVENUE FUNDS Beginning of Project through September 30, 2009 Total Project to

Project

Program/Project Name 4 Cent Gasoline Tax Fund Resurfacing projects Total 4 cent gasoline tax fund Tax Increment Fund Broad Street Pocket Park TIF District - infrastructure project Cruise Terminal Total tax increment fund Total special revenue funds projects

$

$

Cost Prior

Current

September 30

Years

Activity

2009

-

$

$

1,054,687 1,054,687 330,085 86,468 46,412 462,965 1,517,652

$

$

1,054,687 1,054,687 330,085 86,468 46,412 462,965 1,517,652

89

Disposition Completed

In-Progress Expensed $

$

-

Expensed

Capitalized $

$

1,043,431 1,043,431 330,085 46,412 376,497 1,419,928

$

-

Capitalized

$

86,468 $

86,468 86,468 $

11,256 11,256 11,256

90

NON-MAJOR DEBT SERVICE FUNDS •

1996 General Obligation Refunding Warrants - This fund is used to service the remaining debt outstanding on the 1996 General Obligation Refunding Warrants.



1998 General Obligation Refunding and Improvement Warrants - This fund is used to service the remaining debt outstanding on the 1998 General Obligation Refunding and Improvement Warrants.



1999 General Obligation Private Placement Warrants - This fund is used to service the remaining debt outstanding on the 1999 General Obligation Private Placement Warrants.



1999 General Obligation Private Placement Warrants (I.P.S.C.O.) - This fund is used to service the remaining debt outstanding on the 1999 General Obligation Private Placement Warrants (I.P.S.C.O.).



2001 General Obligation Refunding and School Warrants - This fund is used to service the remaining debt outstanding on the 2001 General Obligation Refunding and School Warrants.



Bank Service Charges - Various Issues - This fund is used to pay agent and trustee fees for defeased debt.



2002 General Obligation Refunding Warrants - This fund is used to service the remaining debt outstanding on the 2002 General Obligation Refunding Warrants.



2002 Limited Obligation Tax Increment Warrants - This fund is used to service the remaining debt outstanding on the 2002 Limited Obligation Tax Increment Warrants.



2006 General Obligation Refunding and Improvement Warrants - This fund is used to service the remaining debt outstanding on the 2006 General Obligation Refunding and Improvement Warrants.



2006 General Obligation Private Placement Warrants - This fund is used to service the remaining debt outstanding on the 2006 General Obligation Private Placement Warrants.



2008 General Obligation Capital Improvement Warrants - This fund is used to service the remaining debt outstanding on the 2008 General Obligation Capital Improvement Warrants.



2008B & C General Obligation Refunding and Capital Warrants – This fund is used to service the remaining debt outstanding on the 2008B and 2008C General Obligation Refunding and Capital Warrants.

CITY OF MOBILE, ALABAMA COMBINING BALANCE SHEET NON-MAJOR DEBT SERVICE FUNDS September 30, 2009 1999 General Obligation Priv Placement WarrIPSCO

2001 General Obligation Refunding and School Warr

1996 General Obligation Refunding Warrants

1998 General Obligation Refunding Warrants

1999 General Obligation Private Placement Warrants

ASSETS Cash, equity in pooled cash and investments

$

-

$

-

$

-

$

-

$ 166,593

FUND BALANCES Fund balances unreserved Debt service funds

$

-

$

-

$

-

$

-

$ 166,593

91

Bank Service Charges Various Issues

2002 General Obligation Refunding Warrants

2002 Limited Obligation Tax Increment Warrants

2006 General Obligation Refunding and Improvement

2006 General Obligation Private Placement Warrants

2008 General Obligation Cap Impv Warrants

2008B & C General Obligation Ref & Cap Warr

Total

$ 135,962

$ 768,178

$

-

$

1,638,942

$

3,048

$

357

$ 654,615

$ 3,367,695

$ 135,962

$ 768,178

$

-

$

1,638,942

$

3,048

$

357

$ 654,615

$ 3,367,695

92

CITY OF MOBILE, ALABAMA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR DEBT SERVICE FUNDS For the Year Ended September 30, 2009

1996 General Obligation Refunding Warrants

1998 General Obligation Refunding Warrants

1999 General Obligation Private Placement Warrants

1999 General Obligation Priv Placement Warr-IPSCO

2001 General Obligation Refunding and School Warr

$

$

$

$

$

Revenues Interest Total revenues

45 45

11,363 11,363

-

428 428

2,400 2,400

Expenditures Principal payments Interest Bank fees Total expenditures Excess (deficiency) of revenues over expenditures

-

45

11,363

31,537 31,537

330,000 8,003 16,814 354,817

1,645,000 710,180 1,930 2,357,110

(31,537)

(354,389)

(2,354,710)

338,003 338,003

2,355,180 2,355,180

Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses)

Net change in fund balances Fund balances, beginning Fund balances, ending

$

(7,980) (7,980)

(654,417) (654,417)

(7,935)

(643,054)

7,935 -

$

643,054 -

(31,537)

$

31,537 -

(16,386)

$

16,386 -

470

$

166,123 166,593

93

Bank Service Charges Various Issues

2002 General Obligation Refunding Warrants

2002 Limited Obligation Tax Increment Warrants

2006 General Obligation Refunding and Improvement

2006 General Obligation Private Placement Warrants

2008 General Obligation Cap Impv Warrants

$

$

$

$

$

$

48,186 48,186

-

15,028 15,028

102 102

1,692 1,692

$

2,440 2,440

Total $

88,905 88,905

3,290 3,290

3,995,000 3,003,854 2,139 7,000,993

440,000 487,878 250 928,128

2,200,000 2,812,975 5,012,975

280,000 114,413 394,413

2,492,900 1,574 2,494,474

4,472,374 2,242 4,474,616

8,890,000 14,102,577 59,776 23,052,353

44,896

(6,993,772)

(928,128)

(4,997,947)

(394,311)

(2,492,782)

(4,472,176)

(22,963,448)

6,998,853 6,998,853

928,128 928,128

5,020,955 5,020,955

394,413 394,413

2,492,900 2,492,900

5,126,791 5,126,791

23,655,223 (662,397) 22,992,826

-

23,008

102

118

654,615

29,378

-

1,615,934 $ 1,638,942

654,615

3,338,317 $ 3,367,695

44,896

$

7,221 7,221

2008B & C General Obligation Ref & Cap Warr

91,066 135,962

5,081

$

763,097 768,178

$

$

2,946 3,048

$

239 357

$

94

NON-MAJOR CAPITAL PROJECTS FUNDS

·

Strategic Plan - This fund is used to provide for several special projects. The majority of this fund is financed by a portion of the gasoline tax and sales tax.

·

1995 Capital Projects - This fund is used to provide for several projects: the closure of Bates Field Landfill, the upgrading of Azalea City Golf Course facilities, engineering for Magnolia Grove Road, a tennis court parking lot, purchase of the Touchdown building and improvements to Airport Boulevard and the garage work area. This fund was financed by the 1995 General Obligation Capital Improvement Warrants.

·

1996 General Obligation Capital Projects - This fund is used to provide for several projects; the renovation of Ladd Memorial Stadium, several drainage projects, street improvements, and water quality studies. This fund was financed by the 1996 General Obligation Capital Improvement Warrants.

·

Municipal Government Capital Improvements - This fund is used for several projects including the Mobile Regional Senior Community Center and various building maintenance projects.

·

1998 General Obligation Capital Projects - This fund is used to provide for several projects including modular buildings at Strickland Youth Center, and the construction and installation of certain improvements to the City's storm water drainage system.

·

1998 General Obligation Refunding and Capital Projects - This fund is used to provide for certain capital improvement projects, including addition to Public Library, Fine Arts Museum, GM&O Terminal renovations, Public Safety buildings, and City/County Misdemeanor facility.

·

1998 General Obligation Private Placement Projects - This fund is to provide for the acquisition of a new financial system and work order system.

·

1999 General Obligation Private Placement (I.P.S.C.O.) - This fund is to provide for site and infrastructure improvements to be constructed and installed by the Industrial Development Board of Mobile County at the site of a facility that produces and manufacturers steel products by I.P.S.C.O.

·

2000 Capital Projects - This fund is used to provide for improvements to the City's parks and recreational facilities and for storm water drainage and sewer improvements.

·

2002 Limited Obligation Tax Increment Capital Projects -This fund is used to acquire certain land and finance, construct and install certain public improvements located within the Tax Increment District.

·

Flood Management - This fund is used to hold funds collected from developers to help defray the cost of future drainage in an area. This fund was established by ordinance passed by the City Council.

·

2008B General Obligation Capital Improvement Projects - This fund is used to provide for the certain capital improvement projects.

·

2008C General Obligation Capital Improvement Projects - This fund is used to pay the cost of certain improvements to the Alabama Cruise Terminal.

CITY OF MOBILE, ALABAMA COMBINING BALANCE SHEET NON-MAJOR CAPITAL PROJECTS FUNDS September 30, 2009

1995 Capital Projects

1996 General Obligation Capital Projects

Municipal Government Capital Improvements

1998 General Obligation Capital Projects

1998 General Obligation Refunding and Capital Proj

$ 3,966,262 741,336 $ 4,707,598

$

$

$

$ 2,269,891 $ 2,269,891

$ 1,726,448 $ 1,726,448

$

$

$

$

Strategic Plan

ASSETS Cash, equity in pooled cash and investments Receivables, net Total assets

$

54,323 54,323

$

400,824 400,824

$

3,457,296 3,457,296

LIABILITIES AND FUND BALANCES Liabilities Accounts payable Retainage payable Due to other funds Total liabilities Fund balances Encumbrances Unreserved Total fund balances Total liabilities and fund balances

600,000 600,000

4,107,598 4,107,598 $ 4,707,598

$

54,323 54,323 54,323

$

$

(335) 1,606 1,271 399,553 399,553 400,824

$

$

73,854 73,854 10,153 3,373,289 3,383,442 3,457,296

-

(30) 2,269,921 2,269,891 $ 2,269,891

17,105 17,105

30 1,709,313 1,709,343 $ 1,726,448

95

1998 General Obligation Private Placement Projects

$

1999 General Obligation Private Placement IPSCO

15

$

15

$

$

$

-

$

-

$

15 15 15

$

83,462 83,462

83,462 83,462 83,462

2000 Capital Projects

2002 Limited Obligation Tax Increment Capital Proj

$ 1,754,681 $ 1,754,681

$

$

$

169,837 18,265 188,102

1,566,579 1,566,579 $ 1,754,681

$

$

152,593 152,593

152,593 152,593 152,593

Flood Management

$ $

$

$

2008B General Obligation Capital Improvement Proj

83,676 83,676

$

-

$

83,676 83,676 83,676

$

$

2008C General Obligation Capital Improvement Proj

3,499,170 3,499,170

$

263,813 68,398 332,211

$

3,166,959 3,166,959 3,499,170

$

$

2,719,577 2,719,577

152,175 19,388 171,563 2,548,014 2,548,014 2,719,577

Total

$ 20,168,218 741,336 $ 20,909,554

$

659,344 124,762 600,000 1,384,106

10,153 19,515,295 19,525,448 $ 20,909,554

96

CITY OF MOBILE, ALABAMA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR CAPITAL PROJECTS FUNDS September 30, 2009

1995 Capital Projects

Strategic Plan

1996 General Obligation Capital Projects

Municipal Government Capital Improvements

1998 General Obligation Capital Projects

1998 General Obligation Refunding and Capital Proj

Revenues Sales tax Lease/rental - tax Motor fuel - tax Room - tax Business license State and federal assistance Interest Other revenue Total revenues

$ 3,669,608 1,931,025 2,195,994 1,598,319 2,801,113 12,701 1,136,318 13,345,078

$

-

$

2,465 2,465

$

2,408,569 14,687 2,423,256

$

17,115 17,115

$

13,558 13,558

Expenditures Current Nondepartmental Interest and fees Capital outlay Capitalized equipment Right-of-way and realty Testing Engineering Architectural Commodities Construction Professional services Other Total capital outlay Total expenditures

Excess (deficiency) of revenues over expenditures Other financing uses Transfers out Total other financing sources (uses)

Net change in fund balance Fund balances, beginning Fund balances, ending

763,670 -

-

-

75,723 1,832 1,593 207,388 2,634,553 2,921,089 3,684,759

-

-

9,660,319

-

(10,422,675)

-

-

(10,422,675)

-

-

(762,356) 4,869,954 $ 4,107,598

54,323 $

54,323

99,683

-

-

5,371 55,212 491 61,147 61,147

175,812 959 21,491 144,452 9,107 124,972 338,419 288,650 1,103,862 1,203,545

3,347 5,902 42,268 26,646 604,182 369 307 683,021 683,021

2,139 1,714 81,514 33,050 5,509 85,307 400 209,633 209,633

(58,682)

1,219,711

(665,906)

(196,075)

(394,413)

-

-

(394,413)

-

-

(665,906) 2,935,797

(196,075) 1,905,418

73

(58,682) 458,235 $ 399,553

825,298 2,558,144 $ 3,383,442

$ 2,269,891

$ 1,709,343

97

1998 General Obligation Private Placement Projects $

-

1999 General Obligation Private Placement IPSCO $

-

$

890 890

14,518 14,518

$

-

Flood Management

2008B General Obligation Capital Improvement Proj

2008C General Obligation Capital Improvement Proj

$

$

$

-

926

136

-

926

136

-

-

-

-

-

-

-

4,663 9,163 108,037 365,307 487,170 487,170

-

-

1 1 1 (1)

890

(472,652)

926

21,422 21,422

-

136

11,706 11,706

-

Total $ 3,669,608 1,931,025 2,195,994 1,598,319 2,801,113 2,408,569 110,124 1,136,318 15,851,070

763,670 99,683

1,592 1,105,185 7,530 307,048 62,081 121,341 3,192,640 74,921 (78,212) 4,794,126 4,794,126

48,187 395,000 29,631 231 473,574 473,574

253,127 1,116,891 45,800 733,338 104,238 285,432 5,036,067 601,850 2,556,880 10,733,623 11,596,976

(4,772,704)

(461,868)

4,254,094

525

-

-

-

-

-

-

-

(10,817,088)

-

-

-

-

-

-

-

(10,817,088)

(472,652) 2,039,231

926 151,667

(1) 16 $

2000 Capital Projects

2002 Limited Obligation Tax Increment Capital Proj

15

890 82,572 $

83,462

$ 1,566,579

$ 152,593

136 83,540 $

83,676

(4,772,704) 7,939,663 $ 3,166,959

(461,868) 3,009,882 $ 2,548,014

(6,562,994) 26,088,442 $ 19,525,448

98

CITY OF MOBILE, ALABAMA SCHEDULE OF CAPITAL PROJECTS BY PROGRAM AND DISPOSITION CAPITAL PROJECTS FUNDS BEGINNING OF PROJECT THROUGH SEPTEMBER 30, 2009 Total Project to

Project

Program/Project Name General Government Multipurpose Mobile Housing Board - home grant Various bank charges Finance - general government equip and misc items Fredrick Richardson - District 1 William Carroll - District 2 John Williams - District 4 Gina Gregory - District 7 Reserve for Contingency - TIF Building and grounds allowance CSX - Quiet Zone Initiative City share - Crepe Myrtle Trail City share - Crepe Myrtle Trail - General Fund Ciy share - economic development City share - ThyssenKrupp Citywide strategic and marketing plans Demolitions - condemned buildings Equipment - administrative services Equipment - animal shelter Equipment - city clerk Equipment - public works Equipment - telecommunications Expand municipal garage Fax/copier lease purchase Financial software maintenance Sage avenue armory GIS/aerial mapping system GIS mapping system Workforce development Mechanical maintenance - maintenance projects Miscellaneous capital projects - Mayor Mobile Area Education Fund Mobile Airport - rent Aviation Training School Public buildings - maintenance projects Telephone switch upgrade Technology building - purchase and renovation Strategic planning - comm/react/CitiSmart Strategic planning - Mayor's office misc renov and equip Total multipurpose

$

Cost Prior

Current

September 30

Years

Activity

2009

118,083 1,222,560 (1,125,408) 360,044 917,475 5,330 2,696,503 161,000 4,355,587

$

42,659 24,533 58,241 3,620 630 2,400 1,029 99,683 137,149 (79,257) 38,313 (28,981) 234,000 18,397,314 74,840 41,770 4,155 11,234 17,534 158,768 2,913 570,689 228,929 136,728 57,188 60,000 105,238 50,000 150,000 9,026 76,203 62,140 660 384,480 17,616 21,151,444

$

42,659 24,533 58,241 3,620 630 2,400 1,029 99,683 137,149 38,826 1,260,873 (1,154,389) 234,000 18,397,314 434,884 41,770 4,155 11,234 17,534 158,768 2,913 917,475 570,689 228,929 142,058 2,753,691 161,000 60,000 105,238 50,000 150,000 9,026 76,203 62,140 660 384,480 17,616 25,507,031

99

Disposition In-Progress Expensed

$

434,884 62,140 497,024

Completed

Capitalized

$

$ 1,260,873 (1,154,389) 917,475 142,058 2,736,808 161,000 4,063,825

Expensed

Capitalized

42,659 $ 24,533 58,241 3,620 630 2,400 1,029 99,683 137,149 38,826 234,000 18,397,314 41,770 4,155 11,234 17,534 122,074 2,913 10,254 228,929 7,071 60,000 96,501 50,000 150,000 9,026 76,202 660 384,480

-

17,616 20,330,503

615,679

36,694 560,435 9,812 8,738 -

100

CITY OF MOBILE, ALABAMA SCHEDULE OF CAPITAL PROJECTS BY PROGRAM AND DISPOSITION (CONT'D) CAPITAL PROJECTS FUNDS BEGINNING OF PROJECT THROUGH SEPTEMBER 30, 2009 Total Project to

Project

Program/Project Name General Government Environmental Engineering, row and testing 12 mile creek - Museum Dr. 2006 Various drainage pipe rep 2007 Annex areas 1 & 2 2008 Misc drainage/pipes Water quality studies Airport Blvd. stabilization Bates Landfill closure Bayou St. Board of Health Big Stickney Culv at Springhill Avenue Carlisle phase 2 - Morlee Drive to ICG railroad Catherine Street drainage Conception Street drainage Cottage Hill - bridge repair Craft Highway - stormwater Craft Highway - bridge repair Dauphin Street extension drainage Eslava Creek repairs at Wimbledon Eslava Creek at Airport Environment testing and upgrade FEMA - mitigation buyout Florida Street - Woodcock Creek - Dauphin Government Street phase 3 - Houston/Crenshaw Government Street drainage - loop area Granada Drive and Spring Creek Gulffield Drive drainage Halls Mill Road at Moore - bridge Hillwood Road - District 5 Ice House Branch drainage Jackson Heights drainage Little Stickney - 3 mile tributary Little Stickney - Springhill to Louiselle Macy Place drainage Michigan Avenue bridge repairs Middle Br - Moores Creek Montlimar Canal repairs Navco Road bridge and Bolton NCRS erosion debris removal Panorama Boulevard drainage Seabreeze Road East drainage Spring Creek bank stabilization Springhill Avenue and Ann Street Southern drain phase 2 Spencer Branch drainage - Dodge School Three Mile Creek bank stabilization Various channel improvements - citywide Wilshire Road drainage Total environmental

$

Cost Prior

Current

September 30

Years

Activity

2009

345,802 2,000 970,955 4,742 48,402 6,000 5,450 3,048,006 1,430,727 39,023 13,450 31,613 69,198 2,000,157 122,069 533 1,553,126 4,594,837 3,082,789 1,383,181 714 51,597 1,313,522 472,076 3,810,586 82,488 2,759,623 228,853 19,177 1,407,956 915,180 114,288 162,515 6,105,111 448,183 136,765 824,155 16,800 37,621,649

$

56,233 241,530 1,350 1,922,479 236,746 325,000 15,900 13,337 40,863 94,227 45,739 36,785 15,986 73,420 33,125 33,414 2,315,895 224,622 17,989 85,821 351,865 1,168,768 259,580 8,795 46,505 6,309 54,751 375 2,633 100,869 24,783 3,000 7,858,694

$

56,233 587,332 3,350 2,893,434 241,488 325,000 48,402 15,900 19,337 46,313 3,142,233 1,430,727 84,762 13,450 31,613 69,198 2,036,942 138,055 73,953 33,125 1,586,540 6,910,732 3,082,789 1,383,181 225,336 17,989 51,597 85,821 1,665,387 472,076 3,810,586 82,488 3,928,391 488,433 8,795 19,177 1,454,461 921,489 114,288 217,266 375 2,633 6,205,980 448,183 136,765 848,938 19,800 45,480,343

101

Disposition Completed

In-Progress Expensed

$

921,489 921,489

Expensed

Capitalized

$

2,893,434 241,488 48,402 19,337 46,313 3,142,233 84,762 13,450 69,198 2,036,942 138,055 73,953 6,910,732 1,383,181 225,336 51,597 85,821 1,665,387 3,810,586 82,488 3,928,391 488,434 8,794 1,454,461 217,266 2,633 6,205,980 448,183 136,765 848,938 19,800 36,782,340

$

56,233 $ 3,350 325,000 33,125 1,586,540 17,989 375 2,022,612

Capitalized

587,332 15,900 1,430,727 31,613 3,082,789 472,076 19,177 114,288 5,753,902

102

CITY OF MOBILE, ALABAMA SCHEDULE OF CAPITAL PROJECTS BY PROGRAM AND DISPOSITION (CONT'D) CAPITAL PROJECTS FUNDS BEGINNING OF PROJECT THROUGH SEPTEMBER 30, 2009 Total Project to

Project

Program/Project Name General Government Transportation Electrical equipment FHWA Grant - Bring Back Broad Street FHWA Grant - Bring Back Broad Street - grant INFRA-ADA modifications Traffic engineering - street improvements Resurfacing - 4 cent gas tax project Resurfacing - 2006 bond projects Bel Air Boulevard bridge repairs City's share - Hillcrest MPO project City's share - Zeigler Boulevard Cody Road widening project Airport Boulevard signal system improvements Airport Boulevard interconnect Elwood Drive repairs Hillsdale Heights sidewalks Lloyds Lane sidewalks Miscellaneous street improvements Mobile Street improvements Morgan Street bridge repairs Old Shell Road sidewalks Old Shell Road sidewalks - grant Old Shell/McGregor intersection improvements Safe routes to schools - sidewalks Water Street improvements - sign design St. Stephens Road sidewalks Stormwater - miscellaneous bridges Neighborhood Beautification - District 4 Traffic circles/calming devices Traffic engineering - signal at Cody Road Traffic engineering - signal at Dauphin Street at Du Rhu Traffic engineering - signal at Dauphin - golf course Traffic engineering - signal at MLK Traffic engineering - two way St. Louis Street Traffic engineering - signal at Providence Park Total transportation Security 800 MHZ radio site rental City's share - fire department grant install generators Equipment - fire Equipment - police Equipment - public safety Equipment - police lease

$

Cost Prior

Current

September 30

Years

Activity

2009

1,785,164 (1,785,164) 724,251 4,051,828 1,065,602 3,018,667 505,265 100,681 84,308 6,809 1,875 585,704 37,960 24,290 914,757 7,562 651,791 47,573 365,236 162,700 16,387 12,373,246 -

$

7,755 232,609 (157,609) 27,200 111,720 1,407,840 16,211 16,063 28,671 353,087 14,344 19,913 10,890 24,971 240,472 (235,661) 130,715 45,000 6,619 47,848 12,452 21,145 9,652 1,140 2,500 2,500

$

7,755 2,017,773 (1,942,773) 27,200 111,720 2,132,091 4,051,828 1,081,813 3,018,667 521,328 129,352 437,395 21,153 1,875 19,913 10,890 24,971 585,704 37,960 264,762 (235,661) 130,715 45,000 914,757 14,181 699,639 12,452 21,145 57,225

42,378 2,440,425

366,376 2,500 2,500 162,700 58,765 14,813,671

121,552 28,005 36,447 627,782 16,129 12

121,552 28,005 36,447 627,782 16,129 12

103

Disposition Completed

In-Progress Expensed

$

-

Capitalized

$

$ 2,017,774 (1,942,773) 1,942,327 4,051,828 1,081,813 3,018,667 521,328 437,395 21,153 1,875 19,913 10,890 585,704 37,960 264,762 (235,661) 130,715 45,000 14,181 699,639 366,376 162,700 13,253,566 -

Expensed

7,755 $ 27,200 111,721 24,971 12,452 1,431 2,500 2,500 -

Capitalized

189,765 129,351 914,757 19,713 57,225 -

37,006 227,536

21,759 1,332,570

121,552 28,005 36,447 103,019 8,874 12

524,763 7,255 -

104

CITY OF MOBILE, ALABAMA SCHEDULE OF CAPITAL PROJECTS BY PROGRAM AND DISPOSITION (CONT'D) CAPITAL PROJECTS FUNDS BEGINNING OF PROJECT THROUGH SEPTEMBER 30, 2009 Total Project to

Project

Program/Project Name General Government Security (Cont'd) Fire - miscellaneous fire station building imprv. Fire - various station upgrades Fire station - Theodore Fire - warehouse purchase Public safety facility Police - Towing facility Police building - 200 Government Street Police building - 850 St. Anthony Police - motorcycles Police - Toulmonville multipurpose room Police joint use firearms facility Police joint use firearms facility - grant Total security Recreation Equipment - parks and recreation Broad/Dauphin Transit Pocket Park College Football Bowl Contribution - LPGA Contribution - Bayfest Contribution - Gulf Coast Classic Cruise terminal and gangway Ladd Stadium renovation Municipal Pier - McNally Park Parks - annexed area Parks - citywide swimming pool repairs Parks - Crawford Park improvements Parks - Dearborn Street Community Center Parks - Heritage Park Parks - Hillsdale Community Center Parks - ISOM Park Parks - Japanese Gardens Parks - Kidd Park improvements Parks - Lake Drive Tricentennial Park Parks - Lake Drive Tricentennial Park - general fund Parks - Langan various improvements Parks - Langan playground Parks - Lavretta restrooms Parks - Mary Abby Berg Parks - Medal of Honor improvements Parks - Senior Citizen Center

$

Cost Prior

Current

September 30

Years

Activity

2009

104,552 11,234 183,357 426,931 1,968,474 (1,877,258) 817,290 40,731 2,450 13,600 5,087 641,744 (497,646) 5,248,820

$

530,722 9,982 77,766 520,599 1,679,164 199,889 1,031,852 1,674 77,315 150 23,479 (23,479) 4,959,040 129,611 420,921 1,150,000 350,000 270,000 275,000 473,573 2,966,052 49,500 170,143 2,875 12,600 6,892 151 2,428 4,761 2,090 5,811 79,386 100,000 3,500 427,047

$

635,274 9,982 77,766 531,833 1,862,521 626,820 1,031,852 1,674 77,315 150 1,991,953 (1,900,737) 5,776,330 129,611 461,652 1,150,000 350,000 270,000 275,000 473,573 2,966,052 49,500 2,450 170,143 2,875 12,600 13,600 6,892 151 2,428 5,087 646,505 (497,646) 2,090 5,811 79,386 100,000 3,500 5,675,867

105

Dispositon Completed

In Progress Expensed

$

-

$

13,600 -

Capitalized

635,274 $ 77,766 522,943 1,862,521 626,820 82,140 1,674 1,991,453 (1,900,237) 3,900,354 461,653 473,573 2,966,052 2,450 5,087 79,386 -

Expensed

-

Capitalized

$ 9,982

8,890 1,592 150 500 (500) 318,523 21,579 1,150,000 350,000 270,000 275,000 170,143 2,875 12,600 6,892 151 2,428 2,090 5,811 100,000 3,500 -

949,712 75,723 1,557,453 108,032 49,500 646,505 (497,646) 5,675,868

106

CITY OF MOBILE, ALABAMA SCHEDULE OF CAPITAL PROJECTS BY PROGRAM AND DISPOSITION (CONT'D) CAPITAL PROJECTS FUNDS BEGINNING OF PROJECT THROUGH September 30, 2009 Total Project to

Project

Program/Project Name General Government Recreation (Cont'd) Parks - Theodore area park Springhill Avenue - recreation center Mobile Tennis - resurface courts Strategic Plan - Ladd Stadium debt Waterfront development Waterfront development - general fund Total recreation Cultural Centre for the Living Arts Strategic Plan - Saenger Theatre renovations Historic dev. - African American Heritage Trail Strategic Plan - Battleship restoration Equipment - culture and recreation Total cultural Total general government Proprietary Mobile Civic Center: Civic Center renovations Maintenance Total proprietary Total capital projects

$

$

Cost Prior

Current

September 30

Years

Activity

2009

550,638 14,497,978 (14,496,362) 6,007,040

$

153,727 50,277 3,500 98,975 615,405 (615,405) 7,208,820

$

153,727 600,915 3,500 98,975 15,113,383 (15,111,767) 13,215,860

61,174,812

100,000 4,535 4,321 50,000 449 159,305 43,777,728

100,000 4,535 4,321 50,000 449 159,305 104,952,540

61,174,812

464 253,648 254,112 44,031,840

464 253,648 254,112 $ 105,206,652

$

107

Disposition Completed

In-Progress Expensed

$

-

$

13,600

$

Expensed

Capitalized

153,727 $ 600,915 15,113,383 (15,111,767) 4,744,459

-

Capitalized

$

2,475,544

5,982,259

3,500 98,975

1,432,113

62,744,544

100,000 4,535 4,321 50,000 449 159,305 25,534,023

15,241,863

1,432,113

62,744,543

464 126,707 127,171 25,661,194 $

126,941 126,941 15,368,804

$

$

108

INTERNAL SERVICE FUNDS

Internal Service funds are used to account for the financing of goods or services provided to other departments or agencies of the City, or to other governments, on a costreimbursement basis. Motor Pool Fund - This fund is used to account for vehicles and equipment provided and maintained by the Motor Pool for other departments of the City. Insurance Fund - This fund is used to account for automobile and general liability claims and expenses paid for other departments of the City. Employee Health Fund - This fund is used to account for assets held in trust by the City for the payment of health insurance claims.

CITY OF MOBILE, ALABAMA COMBINING BALANCE SHEET INTERNAL SERVICE FUNDS September 30, 2009

ASSETS Current assets: Cash, equity in pooled cash and investments Receivables, net Total current assets Property, plant and equipment Vehicles Furniture, fixtures and equipment Less: accumulated depreciation Property, plant and equipment - net Total assets LIABILITIES Current liabilities: Accounts payable Accrued payroll Capital lease obligations - current portion Insurance claims payable Due to other funds Total current liabilities Noncurrent liabilities: Capital lease obligations, net of current portion Self-insured liability - legal Total noncurrent liabilities Total liabilities Net Assets Invested in capital assets, net of related debt Unrestricted Total net assets Total liabilities and net assets

Motor Pool Fund

Insurance Fund

$

$

1,096,191 8,438 1,104,629

31,193,610 3,806,623 35,000,233 (23,730,475) 11,269,758 $ 12,374,387

$

$

$

$

10,527 7,598 149,660 167,785

1,576,746 1,576,746 1,576,746

62,542 62,542

526,610 526,610 694,395

420,000 420,000 482,542

9,088,123 2,591,869 11,679,992 12,374,387

1,094,204 1,094,204 1,576,746

$

Employee Health Fund

$

$

$

$

Total

62,466 62,466

$

62,466

31,193,610 3,806,623 35,000,233 (23,730,475) 11,269,758 $ 14,013,599

714,428 2,114,828 3,188,213 6,017,469

$

2,672,937 70,904 2,743,841

787,497 7,598 149,660 2,114,828 3,188,213 6,247,796

6,017,469

526,610 420,000 946,610 7,194,406

(5,955,003) (5,955,003) 62,466

9,088,123 (2,268,930) 6,819,193 14,013,599

$

109

CITY OF MOBILE, ALABAMA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS For the year ended September 30, 2009 Motor Pool Fund

Employee Health Fund

Insurance Fund

Total

Operating revenues Charges for services: User charges Employee Contributions Total operating revenues Operating expenditures Materials Personnel services Professional and technical Utilities Other charges Insurance benefit payments Increase (decrease) in provision for selfinsured loss Depreciation Total operating expense Operating income (loss) Nonoperating revenues (expenses) Gain (loss) on disposal of assets Damaged vehicles reimbursement Cost reimbursement Investment income Interest Miscellaneous revenue Total nonoperating revenues Income (loss) before operating transfers Transfers in Transfers out Change in net assets Net assets at beginning of the year Net assets at end of the year

$

4,368,277 4,368,277

$

2,709,824 146,578 61,130 44,423 11,423 -

$

$

49,206 805,174 969,482 -

1,942,412 4,915,790 (547,513) 14,974 46,128 24,692 3,840 (36,850) 52,784 (494,729) 40,000 (454,729) 12,134,721 11,679,992

-

1,823,862 (1,823,862) 2,544 -

$

2,544 (1,821,318) 2,852,491 (900,000) 131,173 963,031 1,094,204

$

15,224,457 4,080,025 19,304,482

$

19,592,734 4,080,025 23,672,759

74,731 2,732 23,724,248

2,759,030 146,578 941,035 44,423 983,637 23,724,248

410,083 24,211,794 (4,907,312)

410,083 1,942,412 30,951,446 (7,278,687)

81,717 81,717 (4,825,595) 1,714,104 (3,111,491) (2,843,512) (5,955,003)

14,974 46,128 27,236 3,840 (36,850) 81,717 137,045 (7,141,642) 4,606,595 (900,000) (3,435,047) 10,254,240 6,819,193

$

110

CITY OF MOBILE, ALABAMA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS For the year ended September 30, 2009 Motor Pool Fund Cash flows from operating activities Cash received from: Internal billings User charges Employee contributions Cash payments for insurance claims Cash payments for operating expenses Cash payments to employees for services Cash payments for interfund services use Net cash provided (used) by operating activities

$

Cash flows from non-capital financing activities Cost reimbursements Miscellaneous income Transfers in from other funds Transfers out to other funds Net cash provided by non-capital financing activities Cash flows from capital and related financing activities Acquisition of capital assets Proceeds from disposal of capital assets Payments on capital leases Interest payments Reimbursement for damaged vehicles Net cash used by capital and related financing activities Cash flows from investing activities Investment income received Net cash provided by investing activities Net increase (decrease) in pooled cash and investments Pooled cash and investments - beginning of the year Pooled cash and investments - end of year

4,342,358 (2,903,532) (146,398) -

$

(1,882,037) -

$

15,224,457 125,164 3,954,861 (23,536,436) (74,731) 2,510,864

Total

$

19,566,815 125,164 3,954,861 (23,536,436) (4,860,300) (146,398) 2,510,864

1,292,428

(1,882,037)

(1,795,821)

(2,385,430)

24,692 40,000 -

2,544 2,852,491 (900,000)

81,717 1,714,104 -

27,236 81,717 4,606,595 (900,000)

64,692

1,955,035

1,795,821

3,815,548

(1,937,823) (986,832) (535,393) (36,850) 46,128

-

-

(1,937,823) (986,832) (535,393) (36,850) 46,128

(3,450,770)

-

-

(3,450,770)

-

-

72,998

-

3,840 3,840 (2,089,810)

$

Employee Health Fund

Insurance Fund

3,186,001 1,096,191

$

1,503,748 1,576,746

$

-

3,840 3,840 (2,016,812)

$

4,689,749 2,672,937

111

CITY OF MOBILE, ALABAMA COMBINING STATEMENT OF CASH FLOWS (CONT'D) INTERNAL SERVICE FUNDS For the year ended September 30, 2009 Motor Pool Fund Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities Depreciation Change in assets and liabilities: Decrease (increase) in: Accounts receivable Increase (decrease) in: Accounts payable Accrued liabilities Insurance claims payable Self-insured liability - legal Due to other funds Total adjustments Net cash provided (used) by operating activities

$

(547,513)

$

1,942,412

(25,920) (76,732) 181 1,839,941 $

1,292,428

Employee Health Fund

Insurance Fund

(1,823,862)

$

-

-

-

(62,466)

(62,302) 4,127 (58,175) $

(4,907,312)

(1,882,037)

Total

$

1,942,412

(88,386)

253,010 410,083 2,510,864 3,111,491 $

(1,795,821)

(7,278,687)

113,976 181 410,083 4,127 2,510,864 4,893,257 $

(2,385,430)

112

ENTERPRISE FUNDS - NON MAJOR

Enterprise funds account for activities whose operations are financed and operated in a manner similar to private business operations - where the intent of the City is that the costs of providing goods or services to the general public on a continuing basis is financed or recovered primarily through user charges. Azalea City Golf Course - This fund is used to account for the operations of the Azalea City Golf Course which derives revenues from course and cart rental. Firemedics - This fund is used to account for the operations of the Firemedics division which provides ambulance service to the general public. Tennis Center - This fund is used to account for the operations of the Tennis Center which derives the majority of its income from tennis court rentals. Affordable Homes Program - This fund is used to account for the operations of the Affordable Homes Program which derives the majority of its income from rental activity.

CITY OF MOBILE, ALABAMA COMBINING BALANCE SHEET NON-MAJOR ENTERPRISE FUNDS September 30, 2009

Azalea City Golf Course

ASSETS Current assets: Cash, equity in pooled cash and investments Receivables, net Inventories Total current assets Noncurrent assets equipment Non-depreciable capital assets Depreciable capital assets, net Total noncurrent assets Total assets LIABILITIES Current liabilities: Accounts payable and accrued liabilities Due to other funds Total current liabilities Noncurrent liabilities: Net Assets Invested in capital assets, net of related debt Unrestricted Total net assets Total liabilities and net assets

$

$

$

$

12,257 410 50,214 62,881 2,454,545 1,414,321 3,868,866 3,931,747

91,526 360,000 451,526

3,868,866 (388,645) 3,480,221 3,931,747

Firemedics

$

$

$

$

1,109,731 1,109,731 108,086 108,086 1,217,817

259,478 1,100,987 1,360,465

108,086 (250,734) (142,648) 1,217,817

113

Affordable Homes Program

Tennis Center

$

600

$

600

500,154 500,154

86,421 86,421 87,021

3,000 186,305 189,305 689,459

$

47

$

-

$

$

$

Totals

41,718 41,718

86,421 (41,118) 45,303 87,021

$

$

$

47

$

189,305 500,107 689,412 689,459

$

513,011 1,110,141 50,214 1,673,366 2,457,545 1,795,133 4,252,678 5,926,044

392,769 1,460,987 1,853,756

4,252,678 (180,390) 4,072,288 5,926,044

114

CITY OF MOBILE, ALABAMA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS NON-MAJOR ENTERPRISE FUNDS For the year ended September 30, 2009

Azalea City Golf Course Operating revenues Sales revenue User charges Concessions Miscellaneous revenue Total operating revenues Operating expenditures Utilities Cost of goods sold Personnel services Professional and technical Commodities Other charges Depreciation Capital outlay Total operating expense Operating income (loss) Nonoperating revenues (expenses) Investment income Gain (loss) on disposal of assets Total nonoperating revenues (expenses) Net income (loss) before transfers Transfers in Change in net assets Net assets at beginning of the year Net assets at end of the year

$

159,182 1,344,644 5,596 1,509,422

Firemedics $

83,452 128,803 856,067 13,032 65,355 123,806 109,428 138,534 1,518,477 (9,055)

$

12,669 (155) 12,514 3,459 3,459 3,476,762 3,480,221

2,425,990 2,425,990 35,325 4,528,787 225,054 448,079 234,618 6,577 5,478,440 (3,052,450) -

$

(872) (872) (3,053,322) 3,062,717 9,395 (152,043) (142,648)

115

Affordable Homes Program

Tennis Center $

2,800 69,730 5,981 176 78,687

$

83,187 320,504 36,667 51,780 11,882 5,688 509,708 (431,021)

$

(431,021) 415,680 (15,341) 60,644 45,303

-

Totals

$

1,469

203,433 128,803 5,705,358 274,753 566,102 370,306 127,212 138,534 7,514,501 (3,500,402)

888 5,519 7,876 (7,876)

$

58,269 58,269 50,393 50,393 639,019 689,412

161,982 3,840,364 5,981 5,772 4,014,099

$

12,669 57,242 69,911 (3,430,491) 3,478,397 47,906 4,024,382 4,072,288

116

CITY OF MOBILE, ALABAMA COMBINING STATEMENT OF CASH FLOWS NON-MAJOR ENTERPRISE FUNDS For the year ended September 30, 2009

Azalea City Golf Course Cash flows from operating activities Cash received from: User charges Sales revenue Concessions Miscellaneous Cash payments for operating expenses Cash payments to employees for services Net cash provided (used) by operating activities

$

Cash flows from non-capital financing activities Transfers in from other funds Net cash provided by non-capital financing activities

1,344,968 159,182 5,596 (562,018) (852,777) 94,951

Firemedics

$

-

2,370,079 (908,327) (4,524,469) (3,062,717) 3,062,717 3,062,717

Cash flows from capital and related financing activities Acquisition of capital assets Proceeds from disposal of capital assets Net cash used by capital and related financing activities

(313,567) (1,548) (315,115)

-

Cash flows from investing activities Investment income received Net cash provided by investing activities Net increase (decrease) in pooled cash and investments Pooled cash and investments - beginning of the year Pooled cash and investments - end of the year

12,669 12,669 (207,495) 219,752 12,257

-

$

$

117

Affordable Homes Program

Tennis Center

$

69,730 2,800 5,981 176 (176,913) (317,978) (416,204)

$

415,680 415,680

$

(2,325) (2,325)

Total

$

-

3,784,777 161,982 5,981 5,772 (1,649,583) (5,695,224) (3,386,295) 3,478,397 3,478,397

-

216,000 13,408 229,408

(97,567) 11,860 (85,707)

-

227,083 273,071 500,154

12,669 12,669 19,064 493,947 513,011

(524) 1,124 600

$

$

118

CITY OF MOBILE, ALABAMA COMBINING STATEMENT OF CASH FLOWS (CONT'D) NON-MAJOR ENTERPIRSE FUNDS For the year ended September 30, 2009

Azalea City Golf Course Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss)

$

Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities Depreciation Change in assets and liabilities:

$

109,428

Decrease (increase) in: Accounts receivable Materials and supplies Increase (decrease) in: Accounts payable Accrued liabilities Due to other funds Total adjustments Net cash provided (used) by operating activities

(9,055)

Firemedics

$

(3,052,450)

6,577

324 (2,318)

(55,911) -

(6,718) 3,290 104,006 94,951

(12,418) 4,318 47,167 (10,267) (3,062,717)

$

119

Affordable Homes Program

Tennis Center

$

(431,021)

$

(7,876)

5,688

$

5,519

-

14,817 (416,204)

(55,587) (2,318) 32

$

(3,500,402)

127,212

6,603 2,526

$

Total

5,551 (2,325)

$

(12,501) 10,134 47,167 114,107 (3,386,295)

120

CITY OF MOBILE, ALABAMA SCHEDULE OF CAPITAL PROJECTS BY PROGRAM AND DISPOSITION ENTERPRISE FUNDS BEGINNING OF PROJECT THROUGH SEPTEMBER 30, 2009 Total Project Cost to

Project

Program/Project Name Azalea City Golf Course Clubhouse renovations Golf Course parking lot WAVE Transit Facility improvement - N. Mobile County Mobile Convention Center Equipment VIP elevator Fire alarm Chiller Alabama Cruise Terminal Equipment Terminal and gangway Municipal Parking Garage Equipment - traffic engineering Total

$

Cost Prior

Current

September 30,

Years

Activity

2009

986,361 280

$

5,128

$

10,544 138,604

$

-

996,905 138,884 5,128

-

133,995 1,290 41,849 17,892

133,995 1,290 41,849 17,892

-

69,900 50,753

69,900 50,753

991,769

$

22,307 487,134

$

22,307 1,478,903

121

Disposition In Progress Expended $

-

Completed

Capitalized $

996,905 -

-

$

5,128

-

Capitalized $

138,884

-

-

-

-

133,995 41,849 17,892

-

-

50,753

-

-

22,307 216,043 $

208,784

1,290

$

Expensed

1,290

$

1,052,786

$

69,900

122

SUPPLEMENTARY INFORMATION

Other Supplementary Information General Fund Capital Assets Long-Term Debt

OTHER SUPPLEMENTARY INFORMATION

CITY OF MOBILE, ALABAMA SCHEDULE OF REVENUES - BUDGET AND ACTUAL (BUDGETARY BASIS) GENERAL FUND September 30, 2009

Budget

Taxes Property Real estate Motor vehicle Sales and use Sales tax - City Sales tax - Police Jurisdiction Lease/rental - City Lease/rental - Police Jurisdiction Room tax - City Room tax - Police Jurisdiction Motor vehicle rental - City Motor vehicle rental - Police Jurisdiction Selective sales and use Motor fuel Regular - City Regular - Police Jurisdiction County equalization Alcoholic beverages Liquor - City Liquor - Police Jurisdiction Liquor - ABC Board Table Wine Beer Other Cigarette stamp tax Other tobacco tax - City Other tobacco tax - Police Jurisdiction Other tax revenue Total taxes Licenses and permits Business licenses - City Business licenses - Police Jurisdiction Motor vehicle licenses Dog licenses Total licenses and permits Intergovernmental Alcoholic Beverage Control Board Financial excise tax Oil and gas tax Mobile County Racing Commission Total intergovernmental

$

12,418,000 1,520,643

Variance Positive/ (Negative)

Actual

$

12,316,230 1,519,263

$

(101,770) (1,380)

105,650,486 15,280,026 3,960,272 472,141 3,422,544 338,214 575,316 248,708

101,064,283 9,165,762 3,844,978 259,730 3,138,124 58,677 929,764 51,993

(4,586,203) (6,114,264) (115,294) (212,411) (284,420) (279,537) 354,448 (196,715)

2,108,778 989,462 420,000

2,195,993 808,245 430,015

87,215 (181,217) 10,015

529,145 42,000 160,000 151,710 1,108,364

453,940 36,995 199,969 160,487 1,285,759

(75,205) (5,005) 39,969 8,777 177,395

2,107,894 410,802 30,000 30,000 151,974,505

2,253,663 418,271 37,636 32,047 140,661,824

145,769 7,469 7,636 2,047 (11,312,681)

30,647,844 3,150,000 625,000 18,000 34,440,844

30,990,838 2,565,387 607,064 36,435 34,199,724

342,994 (584,613) (17,936) 18,435 (241,120)

140,000 400,000 120,000 125,000 785,000

70,325 1,320,726 85,685 72,260 1,548,996

(69,675) 920,726 (34,315) (52,740) 763,996

123

CITY OF MOBILE, ALABAMA SCHEDULE OF REVENUES - BUDGET AND ACTUAL (BUDGETARY BASIS) GENERAL FUND (CONT'D) September 30, 2009

Budget

Charges for services Health Lot cleaning Building demolition fee Animal shelter Public safety Inspection Fire plan review fee Police and fire Engineering Parking management fees County sales tax collection fee Property rental Franchise fees - miscellaneous Recreational fees Landfill Total charges for services Fines and forfeitures Municipal offense fines Police fines Driver's education Bond forfeitures Court costs DA Restitution Unit collection fees Corrections fund Alarm ordinance fines and permits Probation fee from court City drug testing Other fees Total fines and forfeitures State and federal assistance Interest Investment of idle funds Interest on receivables Total interest Miscellaneous Law enforcement revenues Athletic fund Miscellaneous Total miscellaneous (other) Total revenues

$

35,000 75,000 14,000

Variance Positive/ (Negative)

Actual

$

51,484 52,261 13,748

$

16,484 (22,739) (252)

2,125,554 40,000 450,000 265,000 220,000 2,850,000 40,000 2,275,000 525,000 375,000 9,289,554

1,499,929 35,250 441,646 267,731 247,799 2,428,841 34,196 2,237,620 537,176 319,557 8,167,238

(625,625) (4,750) (8,354) 2,731 27,799 (421,159) (5,804) (37,380) 12,176 (55,443) (1,122,316)

105,000 2,247,938 365,000 100,000 575,000 115,000 1,500,000 10,000 5,017,938 -

184,168 1,693,727 393,530 89,015 428,241 120,911 1,197,909 5,100 302,915 127,780 26,745 4,570,041 4,093,733

79,168 (554,211) 28,530 (10,985) (146,759) 5,911 (302,091) (4,900) 302,915 127,780 26,745 (447,897) 4,093,733

1,000,000 130,000 1,130,000

331,176 137,375 468,551

(668,824) 7,375 (661,449)

50,000 50,000 $ 202,687,841

680,978 111,222 968,088 1,760,288 $ 195,470,395

680,978 111,222 918,088 1,710,288 (7,217,446)

$

124

CITY OF MOBILE, ALABAMA SCHEDULE OF OTHER FINANCING SOURCES (USES) BUDGET AND ACTUAL (BUDGETARY BASIS) GENERAL FUND For the year ended September 30, 2009

Budget Other financing sources Operating transfers in: From 5-cent Gasoline Tax Special Revenue Fund From 7-cent Gasoline Tax Special Revenue Fund From Fuel Inspection Fees Special Revenue Fund From Strategic Plan Capital Projects Fund From Capital Improvements Capital Projects Fund From WAVE Transit From Grant Administration From Internal Service Funds Total operating transfers in Sales of general capital assets Total other financing sources Other financing uses Operating transfers out: To Mobile Civic Center Enterprise Fund To Capital Improvement Fund To Firemedics Enterprise Fund To Mobile Tennis Center Enterprise Fund To Insurance Internal Service Fund To Employee Health Plan Internal Service Fund To Metro Transit Enterprise Fund To Grant Administration To Motor Pool Internal Service Fund Total operating transfers out Total other financing sources (uses)

$

1,075,000

Variance Positive/ (Negative)

Actual

$

1,075,000

$

-

600,000

(217,046)

84,000

81,849

4,386,272

4,386,272

900,000 7,045,272 8,000 7,053,272

122,398 1,226,845 175,000 900,000 7,750,318 75,602 7,825,920

122,398 1,226,845 175,000 705,046 67,602 772,648

1,150,000 3,448,532 636,131 2,700,000

1,178,394 347,363 2,039,289 415,680 2,852,491

28,394 347,363 (1,409,243) (220,451) 152,491

1,714,104 6,110,617 175,000 40,000 14,872,938 (7,047,018)

(2,163,180) 610,617 40,000 (2,614,009) 3,386,657

3,877,284 5,500,000 175,000 17,486,947 $ (10,433,675)

$

(817,046) (2,151) -

$

125

CITY OF MOBILE, ALABAMA CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL ACTIVITIES SCHEDULE BY SOURCE September 30, 2009 Accumulated Depreciation

Cost Governmental activities capital assets Land Buildings Improvements other than buildings Vehicular equipment Other equipment Infrastructure Infrastructure-in-progress Construction-in-progress Total governmental activities Investment in governmental activities General obligation warrants General grants and other Revenue sharing Capital improvements General fund Internal service funds Special revenue funds Gifts Total investment in governmental activities

$

Book Value

24,546,989 59,787,924 95,920,166 52,684,832 43,318,074 433,431,491 54,518,641 30,866,153 $ 795,074,270

$

23,884,203 28,712,021 35,284,864 30,451,426 73,814,095 $ 192,146,609

$

$

$

$

77,532,569 48,681,474 926,995 344,084,938 8,144,461 35,129,979 49,300,440 231,273,414

$ 795,074,270

22,541,459 11,021,886 643,494 92,960,009 4,951,451 23,844,962 11,527,812 24,655,536

$ 192,146,609

24,546,989 35,903,721 67,208,145 17,399,968 12,866,648 359,617,396 54,518,641 30,866,153 $ 602,927,661 54,991,110 37,659,588 283,501 251,124,929 3,193,010 11,285,017 37,772,628 206,617,878

$ 602,927,661

126

CITY OF MOBILE, ALABAMA CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL ACTIVITIES SCHEDULE BY FUNCTION September 30, 2009 General government Economic development Public safety Public works Culture and recreation Finance Nondepartmental Total governmental capital assets allocated to functions Construction in progress Infrastructure in progress Total governmental activities capital assets Less: accumulated depreciation Net governmental activities capital assets

Land

Improvements

$ 22,926,452 419,850 75,715 1,124,972 -

$ 58,047,962 5,489,653 962,889 31,416,205 3,457 -

$ 24,546,989

$ 95,920,166

127

Buildings

Equipment

Infrastructure

Total

$ 27,046,252 8,890,749 1,428,858 22,037,265 384,800

$ 32,911,857 71,111 27,333,522 18,655,087 3,093,337 4,996,106 8,941,886

$ 433,431,491 -

$ 574,364,014 71,111 42,133,774 21,122,549 57,671,779 4,999,563 9,326,686

$ 59,787,924

$ 96,002,906

$ 433,431,491

709,689,476 30,866,153 54,518,641 795,074,270 192,146,609 $ 602,927,661

128

CITY OF MOBILE, ALABAMA SCHEDULE OF BONDS, WARRANTS AND NOTES PAYABLE For the year ended September 30, 2009 Interest Rates Percent

Interest Payment Dates

Issue Dates

Final Maturity Date

4.85%

2/15-8/15

3/11/99

2/15/09

Semi-annual interest with annual principal payments ranging from $225,000 to $330,000

2001 General Obligation Refunding and School Warrants

4.0-5.0%

2/15-8/15

8/15/01

2/15/20

Semi-annual interest payments with annual principal payments ranging from $785,000 to $2,925,000

2002 General Obligation Refunding Warrants

5.2-5.5%

2/15-8/15

5/15/02

8/15/20

Semi-annual interest payments with annual principal payments ranging from $1,975,000 to $5,475,000

2002 Limited Obligation Tax Increment Warrants

3.7-5.5%

2/15-8/15

5/15/02

2/15/23

Semi-annual interest payments with annual principal payments ranging from $390,000 to $885,000

2006 General Obligation Refunding and Improvement Warrants

4.38-5.0%

2/15-8/15

7/1/06

2/15/30

Semi-annual interest payments with annual principal payments ranging from $1,000,000 to $8,750,000

2006 General Obligation Private Placement Warrants

4.5%

2/15-8/15

10/2/06

8/15/16

Semi-annual interest payments with annual principal payments ranging from $225,000 to $380,000

2008 General Obligation Warrants

4.0-5.0%

2/15-8/15

1/22/08

2/15/30

Semi-annual interest payments with annual principal payments ranging from $1,905,000 to $8,950,000

2008B General Obligation Refunding and Improvement Warrants

4.0-4.66%

2/15-8/15

7/24/08

2/15/20

Semi-annual interest payments with annual principal payments ranging from $3,160,000 to $11,285,000

2008C (AMT) General Obligation Improvement Warrants

4.0-4.83%

2/15-8/15

7/24/08

2/15/30

Semi-annual interest payments with annual principal payments ranging from $715,000 to $845,000

2009 General Obligation Warrants

3.84%

2/15-8/15

2/5/09

8/15/12

Semi-annual interest payments with annual principal payments ranging from $137,016 to $147,878

Note payable to Chemical Bank of New York

3.73-7.9%

2/1-8/1

8/5/92

8/1/12

Semi-annual interest payments with annual principal payments ranging from $40,000 to $200,000

Note payable to JPMorgan Chase Bank

Variable 0.2 + LIBOR

2/1-8/1

6/30/04

8/1/22

Semi-annual interest payments with annual principal payments ranging from $40,000 to $115,000

1999 General Obligation Private Placement Warrants (IPSCO)

Serial Payments

Total

129

Original Amount of Issue $

$

2,700,000

Year Ended September 30, 2009 Issued

Balance September 30, 2008 $

330,000

$

Year Ended September 30, 2009 Retirements -

$

Balance September 30, 2009

330,000

$

Interest for Year Ended September 2009 -

$

8,003

31,430,000

16,060,000

-

1,645,000

14,415,000

710,180

65,725,000

56,350,000

-

3,995,000

52,355,000

3,003,854

10,655,000

9,440,000

-

440,000

9,000,000

487,878

63,410,000

60,150,000

-

2,200,000

57,950,000

2,812,975

3,100,000

2,610,000

-

280,000

2,330,000

114,413

57,000,000

57,000,000

-

-

57,000,000

2,492,900

69,295,000

69,295,000

-

-

69,295,000

3,259,753

22,095,000

22,095,000

-

-

22,095,000

1,212,621

569,000

-

569,000

141,828

427,172

11,592

2,000,000

700,000

-

155,000

545,000

30,081

1,275,000

1,090,000

-

55,000

1,035,000

59,135

329,254,000

$

295,120,000

$

569,000

$

9,241,828

$

286,447,172

$

14,203,382

130

SAMUEL L. JONES MAYOR

Part III Statistical Section

CITY OF MOBILE, ALABAMA

STATISTICAL SECTION This part of the City of Mobile's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial health.

Contents

Page

Financial Trends These schedules contain trend information to help the reader understand how the government's financial performance and well-being have changed over time.

131

Revenue Capacity These schedules contain information to help the reader assess the government's local revenue sources.

145

Debt Capacity These schedules present information to help the reader assess the affordability of the government's current levels of outstanding debt and the government's ability to issue additional debt in the future.

149

Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place.

162

Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the services the government provides and the activities it performs

167

Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year.

CITY OF MOBILE, ALABAMA NET ASSETS BY COMPONENT 1 LAST EIGHT FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING)

2009

2008

2007

Governmental activities Invested in capital assets, net of related debt Restricted Unrestricted Total governmental activities net assets

$ 360,784,525 13,331,469 (62,583,863) $ 311,532,131

$ 165,220,265 101,136,760 2,166,159 $ 268,523,184

$ 268,805,699 16,179,486 10,736,409 $ 295,721,594

Business-type activities Invested in capital assets, net of related debt Unrestricted Total business-type activities net assets

$ 104,970,172 (1,392,389) $ 103,577,783

$ 108,695,419 (1,354,221) $ 107,341,198

$

Primary government Invested in capital assets, net of related debt Restricted Unrestricted Total primary government net assets

$ 465,754,697 13,331,469 (63,976,252) $ 415,109,914

$ 273,915,684 101,136,760 811,938 $ 375,864,382

$ 361,627,552 16,179,486 7,449,064 $ 385,256,102

1

$

92,821,853 (3,287,345) 89,534,508

Only years available

131

2006

2005

2004

2003

(restated) 2002

$ 209,514,867 51,146,572 16,388,241 $ 277,049,680

$ 216,935,303 25,943,133 5,596,978 $ 248,475,414

$ 197,814,817 29,656,613 (30,103) $ 227,441,327

$ 182,995,270 34,061,195 (4,535,895) $ 212,520,570

$ 159,719,874 44,654,378 1,928,536 $ 206,302,788

$

$

$

$

97,229,101 4,429,680 $ 101,658,781

$

$ 280,224,371 34,061,195 (106,215) $ 314,179,351

$ 256,802,472 44,654,378 6,238,965 $ 307,695,815

$

93,845,147 (1,610,125) 92,235,022

$ 303,360,014 51,146,572 14,778,116 $ 369,284,702

$

94,654,880 (829,620) 93,825,260

$ 311,590,183 25,943,133 4,767,358 $ 342,300,674

$

93,570,979 4,572,242 98,143,221

$ 291,385,796 29,656,613 4,542,139 $ 325,584,548

97,082,598 4,310,429 $ 101,393,027

132

CITY OF MOBILE, ALABAMA CHANGES IN NET ASSETS 1 LAST EIGHT FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING)

2009 Expenses Governmental activities: General government Economic development Public safety Public works Culture and recreation Finance Nondepartmental Interest on long-term debt Total governmental activities expenses Business-type activities: Alabama Cruise Terminal Civic center Convention center Golf course Firemedics Parking garage Tennis center Affordable homes program WAVE transit Total business-type activities expenses Total primary government expenses

$

98,695,339 1,429,622 113,062,743 45,892,056 20,373,562 6,823,212 15,717,193 301,993,727

415,494 3,685,566 10,981,125 1,518,478 5,478,439 270,307 509,708 7,875 10,812,366 33,679,358 $ 335,673,085

2008

$

49,310,958 984,354 96,009,857 40,955,090 22,191,802 5,273,774 36,120,233 250,846,068

4,134,371 9,921,621 1,302,813 5,632,700 264,875 542,698 16,295 10,244,202 32,059,575 $ 282,905,643

2007

$

25,688,828 1,011,217 79,092,490 34,964,378 15,418,136 5,363,060 53,282,158 9,879,154 224,699,421

3,833,788 9,240,980 1,371,130 4,473,192 243,425 546,246 10,864 9,445,274 29,164,899 $ 253,864,320

1

Only years available

133

2006

$

25,254,679 749,116 72,728,165 33,730,335 13,666,917 5,220,066 55,690,268 8,310,320 215,349,866

3,882,027 7,842,320 1,347,414 4,265,886 247,879 494,000 11,223 9,144,479 27,235,228 $ 242,585,094

2005

$

24,452,166 881,185 69,825,747 31,860,023 13,964,452 4,886,293 52,284,454 8,856,242 207,010,562

3,664,294 7,997,931 1,262,802 4,099,539 463,143 426,896 31,865 8,168,928 26,115,398 $ 233,125,960

2004

$

21,644,715 866,762 65,977,916 29,415,975 11,905,849 3,947,068 36,157,225 8,851,566 178,767,076

3,774,381 6,663,265 1,149,487 3,741,557 279,366 432,122 16,045 7,040,061 23,096,284 $ 201,863,360

(restated) 2002

2003

$

19,229,493 2,795,934 66,273,267 27,897,415 9,695,397 3,948,490 41,714,086 9,041,529 180,595,611

3,960,368 5,454,468 1,108,755 3,375,538 288,411 382,228 17,240 6,726,593 21,313,601 $ 201,909,212

$

19,030,342 2,666,172 69,394,743 32,406,083 9,048,813 4,475,376 49,754,258 37,051,729 223,827,516

4,604,404 5,244,403 1,007,526 3,521,868 287,034 412,593 21,762 5,754,512 20,854,102 $ 244,681,618

134

CITY OF MOBILE, ALABAMA CHANGES IN NET ASSETS 1 LAST EIGHT FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING)

2009 Program Revenues Governmental activities: Charges for services General government Public safety Public works Culture and Recreation Operating grants and contributions Capital grants and contributions

$

13,394,552 41,261,597 267,731 537,176 1,938,789 4,647,219 62,047,064

Business-type activities: Charges for services Alabama Cruise Terminal Civic center Convention center Golf course Firemedics Parking garage Tennis center Affordable homes program Metro transit Operating grants and contributions Capital grants and contributions Total business-type activities program revenues Total primary government program revenues

$

Net Expense Governmental activities Business-type activities Total primary government net expense

$ (239,946,663) (18,506,674) $ (258,453,337)

1,058,523 1,754,181 3,576,172 1,509,422 2,425,990 411,804 78,687 1,027,542 3,330,363 15,172,684 77,219,748

2008

$

$

9,056,023 41,289,992 277,672 516,332 5,189,084 3,180,406 59,509,509

202,671 2,200,886 3,169,704 1,423,508 2,299,286 475,082 76,195 1,099,053 3,667,452 82,935 14,696,772 74,206,281

$ (191,336,559) (17,362,803) $ (208,699,362)

2007

$

$

9,357,220 43,238,905 261,901 488,084 4,611,096 2,849,792 60,806,998

1,886,225 1,626,680 1,436,369 1,935,848 315,206 71,577 1,001,989 189,500 2,463,690 10,927,084 71,734,082

$ (163,892,423) (18,237,815) $ (182,130,238)

1

Only years available

135

2006

$

$

9,738,673 39,537,888 233,358 503,998 2,259,958 10,452,699 62,726,574

1,927,101 1,438,348 1,433,407 1,783,517 332,442 72,256 2,515 960,770 3,187,170 11,137,526 73,864,100

$ (152,623,292) (16,097,702) $ (168,720,994)

2005

$

$

8,559,445 35,693,676 241,089 421,705 1,312,445 12,160,117 58,388,477

1,781,537 1,582,472 1,248,908 1,589,705 270,805 64,550 42,033 826,705 190,775 7,069,778 14,667,268 73,055,745

$ (148,622,085) (11,448,130) $ (160,070,215)

2004

$

$

7,501,714 33,474,098 241,330 484,650 1,800,444 4,302,290 47,804,526

1,857,264 1,095,902 1,103,880 1,230,873 295,248 71,603 30,950 947,123 782,380 2,954,854 10,370,077 58,174,603

$ (130,962,550) (12,726,207) $ (143,688,757)

(restated) 2002

2003

$

$

6,866,737 31,868,172 232,441 530,574 2,222,375 3,207,269 44,927,568

2,013,122 1,096,499 1,184,329 2,042,130 277,674 71,692 29,292 1,291,535 317,138 7,764,261 16,087,672 61,015,240

$ (135,668,043) (5,225,929) $ (140,893,972)

$

$

7,950,586 31,264,796 227,607 519,719 1,375,823 1,330,199 42,668,730

2,501,326 1,205,863 1,166,718 1,787,673 315,338 77,093 36,706 1,075,378 14,631,958 22,798,053 65,466,783

$ (181,158,786) 1,943,951 $ (179,214,835)

136

CITY OF MOBILE, ALABAMA CHANGES IN NET ASSETS LAST EIGHT1 FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING)

2009 General Revenues and Other Changes in Net Assets Governmental activities: Taxes: Real and personal property tax Sales tax Gross receipts tax Gasoline tax Room tax Beer and liquor tax Rental and leasing tax Cigarette stamp tax Other tobacco tax Financial excise tax Other tax revenue Investment earnings Other Capital contributions Transfers Total governmental activities Business-type activities: Taxes: Sales tax Gross receipts tax Room tax Investment earnings Capital contributions Other Transfers Total business-type activities Total primary government Changes in Net Assets Governmental activities Business-type activities Total primary government net expense

$

15,969,310 132,218,742 7,735,285 4,795,120 2,137,149 4,104,708 2,253,663 455,907 4,468,347 1,009,662 7,704,861 105,130,798 (5,027,942) 282,955,610

2008

$

14,938,843 140,470,973 7,775,814 5,239,745 2,027,597 4,430,951 2,188,771 434,014 4,264,065 3,150,149 5,550,454 (26,333,227) 164,138,149

2007

$

13,200,779 135,345,733 10,020,374 4,689,885 1,933,147 6,638,181 2,229,154 444,534 1,286,414 149,249 4,658,748 5,086,335 4,693,831 (7,812,027) 182,564,337

7,974,021 1,568,826 16,563 155,907 5,027,942 14,743,259 $ 297,698,869

7,354,647 1,586,408 59,405 (164,194) 26,333,227 35,169,493 $ 199,307,642

6,285,253 1,405,841 34,180 7,812,027 15,537,301 $ 198,101,638

$

$ (27,198,410) 17,806,690 $ (9,391,720)

$

$

43,008,947 (3,763,415) 39,245,532

$

18,671,914 (2,700,514) 15,971,400

1

Only years available

137

2006

$

12,834,026 142,430,882 10,054,815 4,883,060 2,000,960 6,573,934 2,250,584 461,272 1,681,486 185,176 2,914,890 1,688,182 (6,761,709) 181,197,558

2005

$

12,514,663 125,670,947 10,240,950 4,038,979 1,851,427 5,817,366 2,306,408 387,780 676,323 156,916 1,224,720 4,941,870 (172,177) 169,656,172

2004

$

11,483,033 110,299,805 9,576,652 2,147,609 1,738,397 5,312,377 2,305,187 305,632 1,359,800 138,824 572,095 3,773,696 (3,129,800) 145,883,307

(restated) 2002

2003

$

11,250,105 106,370,132 9,773,049 2,035,015 1,446,190 6,019,106 771,869 334,239 129,902 1,300,571 2,125,914 329,733 141,885,825

$

10,778,874 107,721,408 9,887,274 2,164,859 1,479,985 6,184,240 727,935 127,940 1,160,117 10,174,430 3,221,150 153,628,212

6,255,350 1,438,130 40,239 12,036 6,761,709 14,507,464 $ 195,705,022

5,574,203 1,284,105 29,506 70,178 172,177 7,130,169 $ 176,786,341

5,105,314 962,656 12,877 3,129,800 9,210,647 $ 155,093,954

4,888,988 914,858 17,570 (329,733) 5,491,683 $ 147,377,508

4,984,322 978,744 20,170 32,564 (3,221,150) 2,794,650 $ 156,422,862

$

$

$

$

$ (27,530,574) 4,738,601 $ (22,791,973)

$

28,574,266 (1,590,238) 26,984,028

$

21,034,087 (4,317,961) 16,716,126

$

14,920,757 (3,515,560) 11,405,197

$

6,217,782 265,754 6,483,536

138

CITY OF MOBILE, ALABAMA GOVERNMENTAL ACTIVITIES TAX REVENUE BY SOURCE LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING)

Fiscal Year 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000

Property Tax $

15,969,310 14,938,843 13,200,779 12,834,026 12,514,663 11,483,033 11,250,105 10,778,874 10,767,183 10,175,574

Motor Fuel Tax

Sales Tax $ 132,218,742 140,470,973 135,345,733 142,430,882 125,670,947 110,299,805 106,370,132 107,721,408 107,521,673 108,225,256

$

7,735,285 7,775,814 10,020,374 10,054,815 10,240,950 9,576,652 9,773,049 9,887,274 9,850,348 9,516,250

Room Tax $

4,795,120 5,239,745 4,689,885 4,883,060 4,038,979 2,147,609 2,035,015 2,164,859 2,049,239 2,122,663

Note: Effective October 1, 2003, the City changed from a gross receipts tax to a sales tax.

139

Alcoholic Beverage Tax $

2,137,149 2,027,597 1,933,147 2,000,960 1,851,427 1,738,397 1,446,190 1,479,985 1,578,942 1,859,915

Rental and Leasing Tax $

4,104,708 4,430,951 6,638,181 6,573,934 5,817,366 5,312,377 6,019,106 6,184,240 6,525,032 6,646,595

Tobacco Tax $

2,253,663 2,622,785 2,673,688 2,711,856 2,694,188 2,610,819 771,869 727,935 775,379 750,924

Other Tax Revenue $

32,047 36,470 35,212 30,735 39,468 44,088 39,395 74,002 62,548 76,595

Total 169,246,024 177,543,178 174,536,999 181,520,268 162,867,988 143,212,780 137,704,861 139,018,577 139,130,344 139,373,772

140

CITY OF MOBILE, ALABAMA FUND BALANCES OF GOVERNMENT FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING)

2009 General fund Reserved Unreserved Total general fund All other governmental funds Reserved Unreserved, reported in: Capital projects funds Debt service funds Total all other governmental funds

$

2008

$

$

5,752,801 (1,266,959) 4,485,842

$

$

2007

$

$

5,832,499 11,035,656 16,868,155

10,882,881

$

10,510,041

59,856,507 3,367,695 74,107,083

92,514,133 3,338,317 $ 106,362,491

2006

$

$

5,205,071 12,993,274 18,198,345

$

4,689,693 18,402,448 23,092,141

$

11,622,558

$

5,793,041

$

56,428,126 2,688,293 70,738,977

$

72,006,529 2,400,188 80,199,758

141

2005

$

2004

$

$

5,174,935 11,796,629 16,971,564

$

5,520,833

$

42,678,174 1,433,489 49,632,496

(restated) 2002

2003

$

$

3,882,731 6,097,162 9,979,893

$

$

2,971,512 4,210,595 7,182,107

$

2,697,375

$

2,571,322

$

43,412,545 1,369,219 47,479,139

$

45,369,844 1,283,533 49,224,699

2001

$

$

2,875,792 10,139,464 13,015,256

$

4,762,746

$

53,714,582 1,266,712 59,744,040

2000

$

$

3,570,622 16,868,488 20,439,110

$

3,734,948 1,654,601 5,389,549

$

3,313,747

$

3,396,765

$

73,923,236 1,378,443 78,615,426

105,787,983 705,351 $ 109,890,099

142

CITY OF MOBILE, ALABAMA CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING)

Revenues Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures State and federal assistance Interest Other Total revenues

2009

2008

2007

2006

$ 174,810,707 37,000,838 1,548,996 8,167,239 4,691,317 6,502,302 1,056,562 5,608,303 239,386,264

$ 181,770,773 36,321,711 539,578 9,850,027 4,968,281 8,306,569 3,150,149 4,575,337 249,482,425

$ 174,536,999 34,637,574 1,730,873 9,764,293 4,547,176 7,460,888 4,786,183 4,652,330 242,116,316

$ 181,520,268 31,928,461 2,242,992 9,722,612 3,573,552 12,712,656 2,914,890 1,481,766 246,097,197

Expenditures General government Economic development Public safety Public works Culture and recreation Finance Nondepartmental Capital outlay Debt service Principal Interest and fees Total expenditures

18,919,217 1,008,755 86,342,817 37,334,095 15,154,032 5,010,643 40,363,981 45,338,810

16,774,235 903,138 84,463,292 36,655,722 13,191,508 4,597,974 46,884,800 46,840,175

15,156,729 996,402 75,746,232 33,982,373 12,830,294 4,395,742 46,938,096 36,810,657

14,781,181 714,758 69,966,349 32,858,243 11,331,104 4,295,572 51,929,138 20,300,611

12,020,851 14,440,851 275,934,052

46,944,636 36,120,233 333,375,713

12,556,427 9,637,487 249,050,439

13,261,003 8,887,309 228,325,268

Excess of revenue over (under) expenditures

(36,547,788)

(83,893,288)

(6,934,123)

17,771,929

Other Financing Sources (Uses) Proceeds from borrowing Proceeds from refunding Payments to escrow agent Transfers in Transfers out Insurance recoveries Premiums (discounts) on bonds issued Sale of general fixed assets Total other financing sources (uses)

569,000 32,984,026 (41,718,561) 75,602 (8,089,933)

148,390,000 56,126,848 (86,780,999) 448,534 2,233 118,186,616

3,930,000 41,185,247 (53,102,723) 564,370 2,652 (7,420,454)

1,800,000 63,410,000 (37,722,873) 44,794,015 (55,805,630) 1,166,236 1,190,117 84,045 18,915,910

Net change in fund balance Debt service as a percentage of noncapital expenditures

$ (44,637,721)

11.48%

$ 34,293,328

28.99%

$ (14,354,577)

10.61%

$ 36,687,839

10.95%

143

2005

2004

2003

2002

2001

2000

162,867,988 29,365,388 1,076,162 8,691,951 3,177,332 13,472,562 1,224,720 4,287,774 224,163,877

$ 143,212,780 27,454,522 1,733,778 8,822,692 3,377,271 6,102,734 549,682 3,342,784 194,596,243

$ 137,704,861 26,656,919 728,280 6,371,405 3,573,210 5,429,644 888,848 1,621,789 182,974,956

$ 139,018,577 26,405,321 294,829 6,704,404 3,258,769 2,706,022 1,594,253 3,760,469 183,742,644

$ 139,130,344 26,880,488 692,041 6,445,979 3,254,660 3,210,900 5,909,888 9,039,739 194,564,039

$ 139,373,772 25,671,694 722,817 6,209,924 3,471,529 4,837,334 7,513,660 1,647,246 189,447,976

14,382,821 800,771 67,849,441 31,394,476 11,215,110 4,112,383 46,402,180 21,688,401

13,397,019 818,305 64,386,318 28,890,302 10,519,569 3,890,413 39,403,235 16,977,026

11,665,659 886,056 64,444,891 27,427,242 8,400,232 3,911,753 41,032,941 22,443,462

12,150,695 963,459 69,012,864 28,414,539 8,715,623 4,492,412 40,820,701 39,421,934

10,913,546 908,000 63,352,719 26,839,772 8,057,244 4,160,579 37,526,250 46,500,212

11,141,500 964,955 62,649,747 26,748,487 7,769,667 4,179,403 29,621,619 38,952,878

9,364,428 8,643,848 215,853,859

8,437,064 8,537,613 195,256,864

11,684,709 8,914,939 200,811,884

12,640,070 8,536,082 225,168,379

21,767,505 4,753,208 224,779,035

19,861,172 5,306,034 207,195,462

(660,621)

(17,836,928)

(41,425,735)

(30,214,996)

(17,747,486)

5,925,000 49,313,834 (51,992,311) 43,324 3,289,847

3,622,429 44,985,268 (47,150,658) 27,399 1,484,438

13,415,597 65,725,000 (66,525,000) 53,853,596 (53,999,180) 36,066 12,506,079

31,669,860 (26,606,401) 67,699,976 (68,726,927) 57,245 4,093,753

18,975,889 50,167,297 (53,495,512) 21,457 15,669,131

$ (16,352,490)

$ (28,919,656)

$ (26,121,243)

$ (2,078,355)

11.87%

11.85%

14.99%

15.04%

8,310,018 2,763,710 48,194,093 (51,744,152) 44,359 (741,990) 7,568,028

9.61%

$

2,629,226

9.73%

144

CITY OF MOBILE, ALABAMA VALUE OF TAXABLE SALES LAST FOUR1 FISCAL YEARS

Value of Taxable Sales - General Sales Tax (in millions)

Fiscal Year Ended September 30 2009 2008 2007 2006 2005 2004

1

$

2,728 2,910 2,166 2,152 2,062 1,813

Direct Tax Rate General Sales Tax 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%

Only Years Available

145

CITY OF MOBILE, ALABAMA SALES TAX RATES DIRECT AND OVERLAPPING1 GOVERNMENTS LAST TEN FISCAL YEARS

Fiscal Year 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999

General 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%

Auto 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%

City of Mobile Farm Manuf. Machinery Machinery 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%

Vending 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%

General 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%

City of Mobile Police Jurisdiction2 Farm Manuf. Auto Machinery Machinery 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%

Vending 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%

Source: Alabama Department of Revenue 1

Overlapping rates are those of local and county governments that apply to sales in common geographical areas.

2

The City collects sales and use tax revenues on sales made within the City of Mobile Police Jurisdiction, located outside of the City's limits and within Mobile County.

3

Tax increases effective August 1, 2001.

146

Overlapping Rates

General 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.0% 1.0%

Auto 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 0.5% 0.5%

Mobile County3 Farm Manuf. Machinery Machinery 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.0% 1.0% 1.0% 1.0%

Vending 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.0% 1.0%

General 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.0% 7.0%

Total Direct and Overlapping Rates Farm Manuf. Auto Machinery Machinery 4.0% 4.5% 4.5% 4.0% 4.5% 4.5% 4.0% 4.5% 4.5% 4.0% 4.5% 4.5% 4.0% 4.5% 4.5% 4.0% 4.5% 4.5% 4.0% 4.5% 4.5% 4.0% 4.5% 4.5% 4.0% 4.5% 4.5% 3.5% 4.0% 4.0% 3.5% 4.0% 4.0%

Vending 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.0% 7.0%

147

CITY OF MOBILE, ALABAMA PRINCIPAL SALES TAXPAYERS CURRENT AND NINE YEARS AGO

2009

Taxpayer

Wal-Mart #866 Wal-Mart #853 Wal-Mart #991 Sams Club Target #1376 Best Buy Wal-Mart #5174 Lowes #549 Lowes Home Center Lowes #212 Sears

Rank

1 2 3 4 5 6 7 8 9 10

Percentage of Total Taxable Sales

3.96% 3.44% 2.99% 2.57% 1.65% 1.44% 1.36% 1.32% 1.27% 1.27%

Home Depot #865

Dillard McConnell Auto Treadwell Ford Totals

21.27%

2000

Rank

Percentage of Total Taxable Sales

3 2 8 1

2.95% 3.16% 1.76% 3.38%

5 4 6 7 9 10

2.01% 2.87% 1.92% 1.78% 1.58% 1.50% 22.91%

Source: City of Mobile Revenue Department

148

CITY OF MOBILE, ALABAMA ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS

Fiscal Year Ended September 30 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000

Real Property Residential Commercial Property Property $

643,869,600 628,768,700 587,342,300 509,203,420 481,963,100 473,294,640 417,991,000 * * *

$ 1,180,581,160 1,131,989,640 874,409,560 866,730,580 839,232,940 814,882,360 782,168,820 * * *

Personal Property Motor Vehicles Other $

231,378,520 308,008,300 265,979,820 243,609,900 219,470,040 249,635,960 212,153,500 * * *

$

325,416,280 243,601,600 245,266,880 246,235,260 254,434,700 256,324,340 249,508,000 * * *

* Data not available Source: Mobile County Revenue Commissioner Note: Property in the county is reassessed annually. Estimated actual value is calculated by dividing assessed value by those percentages. 1

Includes tax-exempt property.

149

Less: Tax Exempt Real Property $

67,818,840 66,816,900 68,678,920 48,288,160 47,304,180 45,358,180 34,489,340 * * *

Total Taxable Assessed Value $

2,313,426,720 2,245,551,340 1,904,319,640 1,817,491,000 1,747,796,600 1,748,779,120 1,627,331,980 1,629,603,960 1,507,445,520 1,454,710,080

Total Direct Tax Rate 7 mills 7 mills 7 mills 7 mills 7 mills 7 mills 7 mills 7 mills 7 mills 7 mills

Estimated Actual Taxable Value $

12,420,469,867 12,191,259,500 12,012,219,333 10,723,840,500 11,703,335,996 11,693,749,299 11,267,370,642 11,064,269,975 11,299,236,604 9,994,584,971

Assessed 1 Value as a Percentage of Actual Value 19.17% 18.97% 16.42% 17.40% 15.34% 15.34% 14.75% 14.73% 13.34% 14.55%

150

CITY OF MOBILE, ALABAMA PROPERTY TAX RATES DIRECT AND OVERLAPPING1 GOVERNMENTS LAST TEN FISCAL YEARS

Fiscal Year

City of Mobile Total City Millage

2009 2008 2007 2006 2005 2004 2003 2002 2001 2000

7 7 7 7 7 7 7 7 7 7

Overlapping Rates Mobile County County of Mobile School District Total Total County School Millage Millage 16 16 16 16 16 16 16 16 16 16

29.5 29.5 29.5 29.5 29.5 29.5 29.5 29.5 29.5 17.5

Total Direct & Overlapping Rates 52.5 52.5 52.5 52.5 52.5 52.5 52.5 52.5 52.5 40.5

Source: Mobile County Revenue Commissioner 1

Overlapping rates are those of local and county governments that apply to property owners within the City of

Mobile. A twelve (12) mill property tax increase for schools was approved by the voters in 2001.

151

CITY OF MOBILE, ALABAMA PRINCIPAL PROPERTY TAXPAYERS CURRENT AND NINE YEARS AGO

2009

Taxpayer Alabama Power Company Gulf Stream Natural Gas System Bell South Telecommunications Florida Gas Transmission Kimberly Clark Corporation Mobile Gas Service Corporation Evonik Degussa Corp. Southeast Supply Header Marelda Bel Air Mall LLC SSAB Alabama Inc. International Paper Company Exxon, Corp. Colonial Realty Limited Mobile Bay Processing Mobil Exploration Totals

2000

Taxable Assessed Value

Rank

Percentage of Tax to Total Assessed Valuation

$ 253,189,480 63,312,820 41,334,900 44,160,220 34,285,720 33,312,000 30,928,760 28,759,000 17,045,180 33,846,620

1 2 3 4 5 6 7 8 9 10

5.21% 4.85% 5.80% 4.85% 5.77% 5.74% 4.63% 4.85% 6.35% 3.02%

$ 580,174,700

5.11%

Taxable Assessed Value

Rank

Percentage of Tax to Total Assessed Valuation

$ 70,521,840

1

11.23%

49,496,560

3

4.93%

52,898,300 25,014,920 21,779,040

2 6 5

5.12% 4.87% 6.08%

35,481,180 23,773,480 17,711,460 15,888,720 15,138,440 $ 327,703,940

4 7 8 9 10

4.71% 4.46% 4.71% 4.45% 4.45% 6.27%

Source: Mobile County Revenue Commissioner

152

CITY OF MOBILE, ALABAMA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS

Fiscal Year Ended September 30 2009

Total Tax Levy for Fiscal Year $

Collected within the Fiscal Year of the Levy Amount Percentage of Levy

13,614,847

2008

13,136,355

2007

* $

*

12,810,663

97.52

12,430,360

12,193,226

98.09

2006

10,899,543

10,700,744

98.18

2005

10,473,789

10,281,664

98.17

2004

10,255,078

10,005,488

97.57

2003

9,883,960

8,945,606

90.51

2002

10,015,923

9,829,314

98.14

2001

9,092,716

9,014,930

99.14

2000

8,969,769

8,413,904

93.80

1999

8,917,431

8,362,572

93.78

* Data not available Source: Mobile County Revenue Commissioner

153

Collection in Subsequent Years

Total Collection to Date Amount Percentage of Levy

* -

* $

*

12,810,663

97.52

-

12,193,226

98.09

-

10,700,744

98.18

-

10,281,664

98.17

-

10,005,488

97.57

-

8,945,606

90.51

-

9,829,314

98.14

-

9,014,930

99.14

-

8,413,904

93.80

-

8,362,572

93.78

154

CITY OF MOBILE, ALABAMA RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS

Fiscal Year

General Obligation Bonds

2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998

$ 275,867,172 283,890,000 178,646,500 185,056,754 167,983,067 175,177,814 182,291,559 192,999,006 172,414,353 187,669,353 190,685,481 201,363,963

Governmental Activities Limited Obligation Notes Bonds Payable $

9,000,000 9,440,000 9,860,000 10,265,000 10,655,000 10,655,000 10,655,000 10,655,000 -

$

1,580,000 1,790,000 1,980,000 2,160,000 2,325,000 2,475,000 1,750,000 1,595,000 1,780,000 1,960,000 1,635,000 1,737,727

Capital Leases $

2,462,037 5,660,073 7,625,028 9,576,004 9,889,815 9,502,800 5,924,503 3,719,450 2,160,062 2,922,567 831,378 1,011,540

* Data not available Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. 1

See the Schedule of Demographic and Economic Statistics on pages 162 - 163 for personal income and

population data.

155

Business Type Activities Capital Leases $

852,545 1,003,091 1,211,680 1,393,250 1,567,401 1,546,520 47,441 88,946 128,715 50,919

Total Primary Government

Percentage of Personal Income¹

$ 289,761,754 301,783,163 199,323,209 208,451,008 192,420,283 199,357,134 200,668,503 209,057,402 176,483,130 192,551,920 193,151,859 204,164,149

* 2.45% 1.73% 1.86% 1.90% 2.09% 2.19% 2.35% 2.00% 2.22% 1.71% 1.91%

Per Capita¹ $

712 743 495 516 481 499 501 519 440 481 483 511

156

CITY OF MOBILE, ALABAMA RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS

Fiscal Year

General Obligation Bonds

2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999

$275,867,112 283,890,000 178,646,500 185,056,754 167,983,067 175,177,814 182,291,559 192,999,006 172,414,353 187,669,353 190,685,481

Less: Amounts Available in Debt Service Fund $3,367,694 3,338,316 2,688,196 2,400,188 1,433,489 1,369,219 1,283,533 1,266,716 1,378,443 705,351 396,402

Total $272,499,418 280,551,684 175,958,304 182,656,566 166,549,578 173,808,595 181,008,026 191,732,290 171,035,910 186,964,002 190,289,079

Percentage of Estimated Actual Taxable Value¹ of Property 2.19% 2.30% 1.46% 1.70% 1.42% 1.49% 1.61% 1.73% 1.51% 1.87% 2.18%

Per Capita² 670 690 437 452 417 435 452 476 426 467 475

Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. 1

See the Schedule of Assessed Value and Estimated Actual Value of Taxable Property on pages 149 - 150

for property value of data. 2

Population data can be found in the Schedule of Demographic and Economic Statistics on page 162 - 163.

157

CITY OF MOBILE, ALABAMA DIRECT AND OVERLAPPING GOVERNMENT DEBT AS OF SEPTEMBER 30, 2009

Governmental Unit Debt Repaid with Property taxes: County Subtotal, overlapping debt City of Mobile direct debt

Debt Outstanding $

Estimated Share of Overlapping Debt

Estimated Percentage Applicable¹

382,553,083

51%

281,499,478

100%

Total direct and overlapping debt

$

196,872,901 196,872,901 281,499,478

$

478,372,379

Sources: Assessed value data used to estimate applicable percentages provided by the Mobile County Commissioner's Office. Debt outstanding data provided by the County. Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the city. This schedule estimates the portion of the outstanding debt of those overlapping governemnts that is borne by the residents and businesses of the City of Mobile. This process recognizes that, when considering the government's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident and therefore responsible for repaying the debt, of each overlapping government. 1

The percentage of overlapping debt applicable is estimated using taxable assessed property values.

Applicable percentages were estimated by determining the portion of the county's taxable assessed value that is within the government's boundaries and dividing it by the county's total taxable assessed value.

158

CITY OF MOBILE, ALABAMA LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS

Fiscal Year

Debt Limit Less: Total net debt applicable to limit Legal debt margin Total net debt applicable to the limit as a percentage of debt limit

2009

2008

2007

$ 476,249,112

$ 462,473,648

$ 394,599,712

229,861,239

239,875,431

171,439,425

$ 246,387,873

$ 222,598,217

$ 223,160,287

48.3%

51.9%

43.4%

2006 $

373,155,832 181,386,101

$

191,769,731

48.6%

Legal Debt Margin Calculation for Fiscal Year 2009 Assessed value of real property, September 30, 2009 Assessed value of personal property, September 30, 2009 Total assessed value Debt Limt (20% of total assessed value) Less: Total net debt applicable to limit Legal debt margin

$ 1,824,450,760 556,794,800 2,381,245,560

$

476,249,112 229,861,239 246,387,873

Note: Under state finance law, the City of Mobile's outstanding general obligation debt should not exceed 20 percent of total assessed property value. By law, the general obligation debt subject to the limitation may be offset by amounts set aside for repaying general obligation bonds. Excludes general obligation warrants applicable to drainage improvements.

159

Fiscal year 2005

2004

2003

2002

2001

2000

$ 358,670,228

$ 349,755,824

$ 325,466,396

$ 325,920,792

$ 301,489,104

$ 290,942,016

171,891,345

172,289,655

173,130,826

181,163,369

159,414,187

174,776,968

$ 186,778,883

$ 177,466,169

$ 152,335,570

$ 144,757,423

$ 142,074,917

$ 116,165,048

47.9%

49.3%

53.2%

55.6%

52.9%

60.1%

160

CITY OF MOBILE, ALABAMA PLEDGED-REVENUE COVERAGE LAST EIGHT2 FISCAL YEARS

Limited Obligation Tax Increment Financing Plan Tax Increment

Year 2009 2008 2007 2006 2005 2004 2003 2002

$

2,133,818 1,778,031 1,416,398 1,371,461

Debt Service Principal $

Interest

440,000 420,000 405,000 390,000

$

487,878 506,163 522,876 538,090

1,283,642

1

545,305

960,200

1

545,296

760,616

1

545,430

667,308

1

157,658

Note: Details regarding the government's outstanding debt can be found in the notes to the financial statements. 1

No principal payments were scheduled in this period.

2

This debt was issued in 2002.

161

CITY OF MOBILE, ALABAMA DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS

Personal Income Fiscal Year 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998

Population

(amounts expressed in millions)

Per Capita Personal Income

406,928 406,309 403,000 404,111 399,727 399,635 400,300 402,539 401,108 400,364 400,295 399,875

* $12,330 11,540 11,235 10,127 9,539 9,160 8,905 8,810 8,682 11,274 10,667

* 30,346 28,635 28,080 25,227 23,840 22,916 22,135 22,004 21,590 21,814 21,202

* Data not available Source: Mobile Chamber of Commerce Note: All statistical data presented above are for the County of Mobile as the City of Mobile comprises the majority of the county

162

Median Age

Education Level in Years of Formal Schooling

School Enrollment

Unemployement Rate

36.1 35.9 35.3 35.7 35.3 35.1 34.4 34.3 34.3 34.7 34.4 32.5

HighSchool Graduate HighSchool Graduate HighSchool Graduate HighSchool Graduate HighSchool Graduate HighSchool Graduate HighSchool Graduate HighSchool Graduate HighSchool Graduate HighSchool Graduate HighSchool Graduate HighSchool Graduate

63,914 63,657 65,614 65,345 64,818 65,340 64,159 65,223 65,013 65,544 65,745 66,149

9.9% 4.7% 3.7% 3.3% 4.8% 6.5% 7.0% 6.7% 6.0% 5.1% 5.1% 4.2%

163

CITY OF MOBILE, ALABAMA PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO

2009

Taxpayer Mobile County Public School System Mobile Infirmary Medical System Univ. of South Alabama and USA Medical WalMart City of Mobile Providence Hospital Mobile County ST Aerospace Mobile Springhill Medical Center Austal USA U.S. Army Corps of Engineers U.S. Postal Service Ciba Specialty Chemicals Totals

Employees

Rank

8,134 5,500 5,000 2,900 2,200 2,100 1,700 1,300 1,225 1,000

1 2 3 4 5 6 7 8 9 10

31,059

2000 Percentage of Total Employement 4.67% 3.16% 2.87% 1.66% 1.26% 1.20% 0.98% 0.75% 0.70% 0.57%

17.82%

Percentage of Total Employement

Employees

Rank

8,762 3,500 4,800

1 3 2

4.37% 1.75% 2.39%

2,550 2,307 1,699

4 5 6

1.27% 1.15% 0.85%

1,200

9

0.60%

1,374 1,300 1,200 28,692

7 8 10

0.69% 0.65% 0.60% 14.31%

Source: Mobile Chamber of Commerce

164

CITY OF MOBILE, ALABAMA FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS

2009 Function General government Economic development Public safety Public works Culture and recreation Finance Golf course Firemedics Tennis center Motor Pool Total

197 13 1,312 575 317 91 28 66 10 3 2,612

Full-time Equivalent Employees as of September 30 2008 2007 2006

189 12 1,307 553 294 88 28 61 10 3 2,545

196 13 1,273 585 325 91 17 59 7 3 2,569

184 7 1,178 512 323 90 27 58 11 3 2,393

2005

173 10 1,190 547 276 87 30 60 11 3 2,387

Source: City Payroll Department

165

2004

173 12 1,212 582 288 88 28 57 10 3 2,453

Full-time Equivalent Employees as of September 30 2003 2002 2001

179 16 1,200 583 287 86 25 52 12 3 2,443

186 16 1,229 591 289 94 27 58 12 3 2,505

188 16 1,230 588 282 96 22 59 13 3 2,497

2000

189 15 1,246 574 278 98 23 59 13 3 2,498

166

CITY OF MOBILE, ALABAMA OPERATING INDICATORS BY FUNCTION LAST FOUR1 FISCAL YEARS Function 2009 General Government Urban Development Service request orders 12,374 Municipal offense tickets 1,722 Inspections/investigations 30,749 Plan reviews 5,191 Plan reviews - Right of Way 2,850 Notice of violations 6,292 Permits 11,787 Certificate of occupancy 460 PC/BOA applications 700 Tree commission applications 27 Complete nuisance abatement cases 39 Complete weed abatement cases 660 Removal of trees 371 Trimming removal Stump removal 221 Mobile Human Resources Department 2 Medical claims 265 Indemnity claims 29 Total claims 294 Mobile 311 Calls 110,655 SROs created 60,345 Municipal Information Technology & Telecommunications Buildings with computer equipment 175 Miles of fiber 820 Wireless sites 20 Computer user accounts 2,680 Email accounts 2,203 Voicemail accounts 1,584 Computers/printers supported 2,496 Servers supported 90 800Mhz subscribers 1,906 City phone extensions 2,544 Broadband Data Cards 102 Software Applications Supported 391 MIT Help Desk Cases 5,331 Number of Employees Trained 889 Cell Phones 340 Telecom Help Desk Requests 2,302

2008

2007

2006

10,525 1,883 48,626 6,094 3,238 6,735 13,808 507 1,282 16 26 410 499 1,813 366

12,264 1,811 57,494 3,576 3,815 5,820 16,940 793 1,260 29 35 480 294 806 381

10,887 1,550 50,838 3,720 * * 16,871 290 608 40 20 160 266 665 406

290 24 314

298 34 332

236 37 273

110,168 55,644

100,234 51,725

72,126 36,348

170 810 25 2,850 2,050 1,545 2,450 75 1,906 2,442 97 375 5,209 510 307 2,952

166 800 35 2,821 1,810 1,285 2,397 60 1,906 2,475 86 342 5,040 620 244 2,674

155 560 45 2,407 1,576 1,311 2,302 81 1,906 2,351 69 * * * 210 2,906 167

CITY OF MOBILE, ALABAMA OPERATING INDICATORS BY FUNCTION LAST FOUR1 FISCAL YEARS (CONT'D) Function Economic Development Mobile Historic Development Commission Applications reviewed Certificates issued Applications heard by review board Applications denied Public Safety Mobile Police Department Crime Incidents: Murder (or Non-Neg Manslaughter) Murder Domestic Negligent Manslaughter Forcible Rape Carjacking Robbery Aggravated Assault Burglary Larceny Vehicle Theft Arson Simple Assault Sex Offenses Narcotic Laws Weapons Offence Forgery-Counterfeiting D.U.I. All Other Offenses Total Tickets Following too close Run red light Run stop sign Speeding Speeding in school zone Mobile Fire Rescue Department Total calls answered Inspections Plans reviewed Permits issued

2009

2008

2007

2006

433 391 158 16

584 543 226 7

597 526 226 24

577 469 108 14

27 2 30 73 775 301 3,493 9,555 972 56 5,639 233 3,096 400 382 478 31,223

35 3 22 68 833 311 3,182 9,707 1,192 78 5,822 275 3,059 383 652 589 33,085

34 6 2 30 59 639 370 3,416 9,749 1,278 89 5,929 266 3,115 354 623 565 33,885

31 3 1 54 46 601 398 3,349 9,655 1,432 56 6,230 294 3,189 352 623 472 34,512

129 2,105 1,971 12,774 255

118 2,765 2,251 15,500 218

57 2,165 1,097 12,234 183

45 1,994 1,148 9,314 132

34,248 695 1,619 1,331

31,712 641 3,854 1,265

30,579 872 871 1,191

25,588 658 196 350

168

CITY OF MOBILE, ALABAMA OPERATING INDICATORS BY FUNCTION LAST FOUR1 FISCAL YEARS (CONT'D) Function Mobile Municipal Court Total cases processed Domestic violence cases Environmental cases Traffic cases Criminal cases Public works Flood control Debris removed (cubic yards) Work on ditches (miles) Administration Disciplinary actions processed Claims/reports processed Concrete and sidewalk repair Concrete poured Repairs Replacements Right-of-way maintenance Material hauled (cubic yards) Material used (cubic yards) Repairs Asphalt street repair Asphalt used (tons) Repairs Street Sweeping Miles sweeper swept Debris removed (cubic yards) Water used (gallons) Dredge Material dredged (cubic yards) Material removed (cubic yards) Material hauled (cubic yards) Storm drain and heavy equipment Drains cleaned Material hauled (cubic yards) Solid waste Waste removal (tons) Other waste removal Special events Carcass removal Trash division Trash picked up Pay pile loads

2009

2008

2007

2006

67,571 1,485 3,285 52,590 10,211

76,578 1,567 4,311 61,096 9,604

69,951 1,698 2,614 56,363 9,276

57,772 1,691 2,610 43,489 9,982

1,720 30

180 36

940 32

18,120 141

320 147

102 117

152 100

175 106

4,114 1,193 507

5,305 886 526

3,238 1,049 540

2,342 881 522

55,341 9,450 244

40,572 8,845 320

47,654 9,930 261

20,845 7,825 126

2,402 18,925

2,376 17,801

3,152 21,332

2,467 21,376

16,400 14,304 299,604

17,623 17,460 369,640

18,319 17,697 467,000

19,260 20,310 840,000

12,055 2,980

8,350 16,780

25,500 12,650 11,500

27,275 10,250 9,284

5,387 16,188

4,455 5,472

3,506 11,488

4,859 13,458

55,972 68.27 (ton) 245 5,525

56,647 57 (ton) 242 6,925

58,235 227 (ton) 160 7,588

58,734 61,800 (cy) 560 4,512

201,900 526

231,900 896

264,602 977

333,285 610

169

CITY OF MOBILE, ALABAMA OPERATING INDICATORS BY FUNCTION LAST FOUR1 FISCAL YEARS (CONT'D) Function Environmental Response Crew Collections (gallons) Other Collections (yards) Cleaned (feet) Culture and Recreation Museum of Mobile Total admissions Mobile Public Library Items circulated Customer visits

2009

2008

2007

805 34,805

1,442 19,555

1,338 13 19,707

4,643 6,285

92,483

87,815

201,629

39,598

2,121,584 1,469,049

1,975,446 1,369,611

1,830,942 1,264,125

1,739,028 1,123,116

1

Only years available

2

2006-2008 data restated per information from the Human Resource Department.

2006

* Data not available Source: Various City Departments

170

CITY OF MOBILE, ALABAMA CAPITAL ASSET STATISTICS BY FUNCTION LAST FOUR1 FISCAL YEARS

Function Streets and Highways Paved Unimproved Traffic Signals Street Lights Public Safety Police Precincts and Mini-Precincts Fire Number of Stations Culture and Recreation Number of Parks Parks Acreage Swimming Pools Tennis Courts Community Centers Motor Pool Number of Sanitation Collection Trucks

2009

2008

2007

2006

1262.5 21.8 452 4922

1261.5 20.9 452 4922

1179.7 15.8 398 4922

1164.1 12.8 283 4893

9

10

10

8

20

20

19

17

91 1740 7 97 17

89 1740 7 97 17

68 1740** 6 97 16

67 1740** 6 87 16

48

34

31

*

* Information not available ** Fiscal year 2007 and 2006 information restated. More accruate method of measuring acreage implemented in 2008. Source: Various City Departments 1

Only years available

171

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Page 1 ... further promote public safety, the City Council desires to create and establish a citizens' advisory .... to facilitate the business of the Advisory Council.

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Apr 23, 2009 - Ten-Year Plan to End Homelessness. Eleven Goals, 2005 ... 2. Establishing an ongoing drug-free awareness program to inform employees about: (a) The dangers of drug abuse in ..... Alabama Vocational Rehabilitation. HHS.