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Home My WebLink About2016 Comprehensive Annual Financial Report (CAFR)COMPREHENSIVE ANNUAL FINANCIAL REPORT City of Tukwila, Washington For the fiscal year ended December 31, 2016 ti tNis 11, I City of Tukwila, Washington VISION The city of opportunity, the community of choice 1 2 3 4 5 MISSION To provide superior services that support a safe, inviting and healthy environment for our residents, businesses and guests. VALUES Caring Professional Responsive STRATEGIC GOALS AND OBJECTIVES A community of inviting neighborhoods and vibrant business districts Cultivate community ownership of shared spaces. Build a broad and collaborative approach to preventing crime and increasing the sense of safety. Focus City planning and investments on creating a connected, dynamic urban environment. Use City efforts and investments to realize established visions for specific sub -areas. A solid foundation for all Tukwila residents Partner with organizations that help meet the basic needs of all residents. Strive for excellent education, vocational supports, and personal growth opportunities through effective partnerships and City services. Encourage maintenance, improvements and diversity in the City's housing stock. A diverse and regionally competitive economy Embrace the City's economic potential and strengthen the City's role as a regional business and employment center. Strengthen the City's engagement and partnership with the business community. A high -performing and effective organization Use Tukwila's Vision, Mission, and Strategic Plan to focus and prioritize City efforts. Advance Tukwila's interests through participation in regional partnerships. Continue to develop as an organization and support individual growth. Ensure City facilities are safe, efficient and inviting to the public. Ensure the long-term fiscal sustainability of the City. A positive community identity and image Improve the City's ability to build trust and work with all members of the Tukwila community. Facilitate connections among Tukwila's communities. Promote a positive identity and image of Tukwila. COVER PHOTO1 Duwamish Gardens project completed in 2016 The City of Tukwila, Washington COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended December 31, 2016 Prepared by the City of Tukwila, Finance Department Peggy McCarthy, Finance Director Allan Ekberg, MAYOR TUKWILA CITY COUNCIL Dennis Robertson, Council President Joe Duffie Kathy Hougardy Kate Kruller Verna Seal De'Sean Quinn Thomas McLeod CITY OF TUKWILA: 2016 CAFR TABLE OF CONTENTS COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended December 31, 2016 TABLE OF CONTENTS Page I. INTRODUCTORY SECTION Administrative Organizational Structure, Principal Officials, and Council Committees 1 Letter of Transmittal 3 Certificate of Achievement 9 II. FINANCIAL SECTION Auditor's Report 11 Management's Discussion and Analysis 15 Basic Financial Statements Government -wide Financial Statements: Statement of Net Position 29 Statement of Activities 30 Fund Financial Statements: Balance Sheet — Governmental Funds 31 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 32 Statement of Revenues, Expenditures, and Changes in Fund Balance — Governmental Funds 33 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 34 Statement of Net Position — Proprietary Funds 35 Statement of Revenues, Expenses, and Changes in Net Position — Proprietary Funds 36 Statement of Cash Flows — Proprietary Funds 37 Statement of Fiduciary Net Position — Fiduciary Fund 39 Statement of Changes in Fiduciary Net Position — Fiduciary Fund 40 Notes to the Financial Statements 41 Required Supplemental Information: Schedules of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual General Fund 101 Notes to the Required Supplementary Information 102 Firemen's Pension Trust Fund 105 Retiree Medical and Long -Term Care Benefits for LEOFF I Employees 108 Combining and Individual Fund Financial Statements and Schedules: Combining Balance Sheet — Non -Major Governmental Funds 111 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances — Non -Major Governmental Funds 112 Combining Balance Sheet — Non -Major Special Revenue Funds 113 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances — Non -Major Special Revenue Funds 114 CITY OF TUKWILA: 2016 CAFR TABLE OF CONTENTS TABLE OF CONTENTS - continued Page Combining Balance Sheet — Non -Major Debt Service Funds 115 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances — Non -Major Debt Service Funds 116 Combining Balance Sheet — Non -Major Capital Project Funds 117 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances — Non -Major Capital Project Funds 118 Schedules of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual: Arterial Street Capital Project Fund 119 Local Improvement District #33 Debt Service Fund 120 Public Safety Plan Capital Project Fund 121 Hotel/Motel Special Revenue Fund 122 Drug Seizure Special Revenue Fund 123 Residential Street Capital Project Fund 124 Land & Park Acquisition Capital Project Fund 125 Facilities Capital Project Fund 126 General Government Improvements Capital Project Fund 127 Fire Improvements Capital Project Fund 128 Debt Service Funds 129 Combining Statements of Net Position — Internal Service Funds 131 Combining Statement of Revenues, Expenses, and Changes in Net Position — Internal Service Funds 132 Combining Statement of Cash Flows — Internal Service Funds 133 Statement of Changes in Assets and Liabilities — Agency Fund 135 III. STATISTICAL SECTION Schedule Net Position by Component 1 138 Changes in Net Position 2 140 Fund Balances, Governmental Funds 3 142 Changes in Fund Balances of Governmental Funds 4 144 General Government Tax Revenues by Source 5 146 Property Tax Levies and Collections 6 147 Assessed and Estimated Actual Value of Taxable Property 7 148 Property Tax Rates — Direct and Overlapping Governments 8 149 Principal Property Taxpayers 9 150 Retail Sales Tax Collections by Sector 10 152 Sales Tax Rate Direct and Overlapping Governments 11 154 Ratios of Outstanding Debt by Type 12 156 Ratios of General Bonded Debt Outstanding 13 158 Computation of Direct and Overlapping Debt 14 159 Legal Debt Margin Information 15 160 Demographic Statistics 16 162 Principal Employers 17 163 Full -Time Equivalent City Government Employees by Department 18 164 Operating Indicators by Function 19 165 Capital Assets by Function 20 166 FINANCE Peggy McCarthy J CITY OF TUKWILA: 2016 CAFR ADMINISTRATIVE ORGANIZATIONAL STRUCTURE, PRINCIPAL OFFICIALS ADMINISTRATIVE ORGANIZATIONAL STRUCTURE AND PRINCIPAL OFFICIALS CITIZENS OF TUKWILA COUNCIL MEMBERS MAYOR Allan Ekberg C TY ADMINISTRATOR David Cline MUNICIPAL COURT Kimberly Walden \ i CITY ATTORNEY Kenyon Disend PLLC (Contracted) HUMAN RESOURCES Stephanie Brown TECHNOLOGY INFORMATION SERVICES Joseph Todd \ COMMUNITY DEVELOPMENT Jack Pace FINANCE COMMITTEE Verna Seal, Chairperson Kathy Hougardy, Member Thomas McLeod, Member PARKS AND RECREATION Rick Still FIRE Jay Wittwer COUNCIL COMMITTEES COUNCIL PRESIDENT Dennis Robertson COMMUNITY DEVELOPMENT & NEIGHBORHOODS Kathy Hougardy, Chairperson Verna Seal, Member Kate Kruller, Member 1 r \ 1 PUBLIC WORKS Bob Giberson J 1 POLICE Mike Villa TRANSPORTATION & INFRASTRUCTURE Kate Kruller, Chairperson Joe Duffle, Member De'Sean Quinn, Member PUBLIC SAFETY Thomas McLeod, Chairperson Joe Duffle, Member De'Sean Quinn, Member CITY OF TUKWILA: 2016 CAFR ADMINISTRATIVE ORGANIZATIONAL STRUCTURE, PRINCIPAL OFFICIALS 2 City of Tukwila 6200 Southcenter Blvd, Tukwila, WA 98188 Allan Ekberg, Mayor June 28, 2017 Honorable Allan Ekberg, Mayor Members of the Tukwila City Council Citizens of Tukwila City of Tukwila 6200 Southcenter Boulevard Tukwila, Washington 98188-2599 Subject: TRANSMITTAL OF 2016 COMPREHENSIVE ANNUAL FINANCIAL REPORT I am pleased to transmit the City of Tukwila's Comprehensive Annual Financial Report (CAFR) for the year ended December 31, 2016. This transmittal letter provides an overview of the report and the financial condition of the City. State law requires that cities publish financial statements annually in conformity with Generally Accepted Accounting Principles (GAAP), which are audited in accordance with generally accepted auditing standards by the State Auditor's Office, under the Revised Code of Washington (RCW) 43.09.230. The CAFR has several significant uses. First, it provides a general overview of the City's finances to the general public and taxpayers. Second, it is used as a reference by bond buyers and rating agencies to evaluate the City's fiscal stability and creditworthiness. Finally, the CAFR is a series of financial statements that have been audited by the State Auditor's Office and provides assurances that assets are safeguarded and funds are expended as they were legally appropriated in the adopted budget. The Tukwila Finance Department prepared the report and accepts responsibility for the accuracy, completeness, and fairness of presentation of the information included. The data is believed to be accurate in all material respects, and it is believed that the data is presented in a manner that fairly sets forth the results of operations and financial position of the City, as measured by the financial activity of the City's various funds. All disclosures necessary to enable the reader to gain the maximum understanding of the City's financial activity have been included. The report has been prepared in conformance with GAAP and in conformance with financial reporting standards issued by the Governmental Accounting Standards Board (GASB). City management has developed and evaluated a comprehensive internal control structure that is designed to provide reasonable, but not absolute, assurance regarding the safeguarding of assets against loss from unauthorized use or disposition, and the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance is based on the assumption that the cost of internal controls should not exceed the benefits expected to be derived. As management, we attest that, to the best of our knowledge and belief, this financial report is complete and reliable in all material aspects. 3 CITY OF TUKWILA: 2016 CAFR LETTER OF TRANSMITTAL As a recipient of federal, state and county financial assistance, the City is required to undergo an annual single audit in conformity with the provisions of the Single Audit Act amendments of 1996 and U.S. Office of Management and Budget Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The audit is conducted by the State Auditor's Office in conjunction with the City's annual independent audit. Information related to this single audit includes the Schedule of Expenditures of Federal Awards, findings, and recommendations, if applicable, and auditor's reports on internal control and compliance with applicable laws, regulations, contracts, and agreements. The results of the City's annual single audit for the fiscal year ended December 31, 2016 provided no instances of material weaknesses in the internal control structure or significant violations of applicable laws. Management's Discussion and Analysis (MD&A) immediately follows the State Auditor's report and provides a narrative introduction, overview, and analysis to accompany the basic financial statements. This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. PROFILE OF THE CITY Incorporated in 1908, the City of Tukwila is located in the heart of the Puget Sound region, 12 miles south of downtown Seattle, 17 miles north of Tacoma, and one mile east of Seattle -Tacoma International Airport. Tukwila has a small residential population of 19,540, making it the 54th largest of 281 cities in the State of Washington. However, the daytime shopper/visitor and working population can reach over 150,000 during the holiday shopping season. The City of Tukwila is a non -charter optional code City, operating under Section 35A of the Revised Code of Washington. It has a strong Mayor form of government with a seven -member City Council elected by the voters of the City to serve a four-year term. Councilmembers are elected at large rather than by district and are responsible for establishing the general guidelines and policies for the City. The Mayor appoints the City Administrator as the City's chief administrative officer responsible for carrying out the policies and direction set by the Mayor and City Council. The City of Tukwila provides a full range of local government services. These services include police and fire protection, emergency medical services, construction and maintenance of streets and traditional municipal infrastructure, planning and zoning, park and recreational activities, and cultural events. In addition, the City operates an equipment maintenance/rental fund. The City operates its own municipal 18 -hole golf course and provides sewer, water, and surface water services. Tukwila has a municipal court for traffic infractions, misdemeanors, and gross misdemeanors. Other jurisdictions provide jail services to the City. Tukwila residents receive library services from the King County Library System. Since the 2009-2010 biennium, the City has adopted a biennial budget in accordance with RCW 35A.34. The Council is required to adopt a biennial budget prior to the first of each odd -numbered calendar year. Budget reviews are conducted at mid -biennium and any changes for the second half of the biennium are adopted by the City Council. The biennial budget serves as the foundation for the City of Tukwila's financial planning and control. The budget is adopted at the fund level and any increases or decreases to a fund must be authorized by Council. Appropriation changes within a fund may be authorized by the Mayor. The General Fund, two special revenue funds, one debt service fund, and seven capital project funds are included in the biennially appropriated operating budget and have budget to actual statements presented for 2016. As demonstrated by the statements and schedules included in the financial section of this report, the city continues to meet its responsibility for sound financial management. 4 CITY OF TUKWILA: 2016 CAFR LETTER OF TRANSMITTAL LOCAL ECONOMY Tukwila is a great place for business. With over 40,000 jobs, more people are employed in the City of Tukwila than in 29 of the 39 counties in the State of Washington. Approximately one third of the jobs are retail, one third are in manufacturing, and the remainder span everything from entertainment to real estate. Many well-known companies such as Boeing and Costco employ thousands of people in Tukwila. Further, Tukwila is home to the global headquarters of Boeing Employees Credit Union (BECU), Continental Mills, Odin Brewing Company, Pop Gourmet Foods, Red Dot Corporation, Sabey Corporation, and Seattle Chocolates. Tukwila is also home to hundreds of small businesses, many of which are owned by members of the city's diverse international community. Tukwila enjoys a strong position in the Puget Sound region as well as the state of Washington. Tukwila's location is at the crossroads of the State's most significant freeway network (the 1-5 and 1-405 interchange), and includes all modes of public transportation. Tukwila's transit stations include the commuter Sounder train, Sound Transit's light rail, and the Tukwila Transit Center that all reinforce the well-established advantages of Tukwila as an employment and retail hub. These major transportation systems, the strategic access to Seattle, Tacoma, Sea -Tac Airport, and the population base of the south Puget Sound region provide a natural setting for commercial and industrial activity. Tukwila is a retail powerhouse with one of the largest local retail sales tax bases in the state of Washington. Anchored by Westfield Southcenter, which is the largest mall in the Pacific Northwest, Tukwila generated over $2.2 billion dollars in taxable retail sales in 2016. The total retail sales tax revenue amounted to $18.9 million in 2016, representing slight decrease in the $19.3 million collected in the prior year. LONG-TERM FINANCIAL PLANNING The city uses its six-year financial planning model and Capital Improvement Program (CIP) as long-term financial planning tools. These tools, along with regular review and revisions to the financial policies, ensure the City incorporates current economic conditions and financial projections into its long-range financial plans. In mid -2015, the City revised its financial reserve policy to increase the General Fund reserve level from 10% to 18%, and added a one-time 10% revenue reserve in the Contingency Fund. These changes will ensure the City's policies are in alignment with the Government Finance Officers Association's "Best Practices" and provide additional protection from future downturns in the economy. The City's diversified revenue base is supported by an assessed valuation of $5.7 billion, which is an increase of 6.8% from 2015, allowing the City to pursue a long-term capital investment program. The City's 2017-2018 Capital Improvement Program anticipates $38 million in infrastructure improvements, 77% of which will be paid for by non -City funding sources. These improvements are vital to the economic health of the City which must continue to efficiently move employees, shoppers, and goods into and out of the area. Additional investments include nearly $15 million for residential street improvements, of which 40% is funded from non -General Fund sources, including $2.5 million from grants. The CIP also includes opportunities to leverage city resources to enhance parks, continue to improve water quality, and focus on promoting a healthy environment in alignment with the adopted Strategic Plan. 5 CITY OF TUKWILA: 2016 CAFR LETTER OF TRANSMITTAL MAJOR INITIATIVES The City made significant investments of time and financial resources into key public projects in 2016. These projects represent Council's commitment to meeting their five Strategic Goals and Objectives: • A community of inviting neighborhoods and vibrant business districts • A solid foundation for all Tukwila residents • A diverse and regionally competitive economy • A high -performing and effective organization, and • A positive community identity and image The City of Tukwila has design underway for the Early Start Work for the Strander Boulevard Extension Phase 3 Project. This project will extend Strander Boulevard from West Valley Highway to Oaksdale Ave in the City of Renton. Phase 1 and 2 have been completed and extended Strander Boulevard from Renton to the new Sounder Commuter Station. The final connection under the railroad tracks will add capacity for a new east/west corridor between 1-405 and South 180th Street. This $39 million project is needed to serve Tukwila and Renton access to the Southcenter Mall and Tukwila's Southcenter District. The City was awarded $5.1 million in federal STP funds in 2016 for the preliminary engineering and right-of-way phases. The groundbreaking for the new $10 million Tukwila Urban Center Pedestrian/Bicycle Bridge was held on August 12, 2016 with construction ongoing through 2017. The new pedestrian and bicycle bridge will span the Green River near the intersection of West Valley Highway and Longacres Way. This bridge will link the Southcenter District with the Tukwila commuter rail station and enable the area to grow as a transit -oriented neighborhood. The pedestrian bridge is fully funded with a $6.8 million state regional mobility grant, federal grant, and park impact fees. King County grant funding was also awarded for the Baker Boulevard Non -Motorized Improvement Project. This $1 million project will design and construct non -motorized corridor improvements on Baker Boulevard from Andover Park West (at the Tukwila Urban Center Transit Center) to Christensen Road and the new pedestrian bridge. Tukwila finished design in 2016 to rehabilitate four different bridges in the City. The Boeing Access Road Bridge over the BNSF Railroad was awarded a $9.7 million federal grant. This bridge is structurally and seismically deficient and serves the Manufacturing/Industrial Center of Tukwila, which includes thousands of Boeing jobs and the Museum of Flight. The City also received grant funds to perform major maintenance on three City bridges that include seismic retrofit, deck and joint repair, and painting. The bridge work will preserve the City -owned infrastructure and extend the service lives of the bridges. Construction on the four bridges is scheduled for 2017. The City of Tukwila has an on-going extensive rehabilitation program in the Sewer Fund for the Southcenter Commercial Business District. As the sewer mains are reaching their 50 -year life span, the City has budgeted over $1 million for 5 years to reline the asbestos concrete pipes in the Southcenter area. The relining of the sewer pipes will extend the life span approximately 50 years and reinforce the strength with little impact to the roadway and minimal excavation. Another water and sewer project began in 2016 in the Southcenter area. This project will replace the water and sewer mains in Andover Park East from Strander Boulevard to Tukwila Parkway. The infrastructure must be upgraded with larger mains to facilitate the new development in the Commercial Business District that includes Washington Place and a new Holiday Inn Express. Construction began September 26, 2016 and will continue into 2017, with final paving of Andover Park East. 6 CITY OF TUKWILA: 2016 CAFR LETTER OF TRANSMITTAL The City continued its partnership with Tukwila Village Development Associates to develop six acres of City -owned land on Tukwila International Boulevard at South 144th Street, known as Tukwila Village. Tukwila Village will be home to a new King County Library, 400 apartments for seniors, a police neighborhood resource center, retail, office, a restaurant, a cafe, a community room, and a plaza. The project was under construction in 2016 and the library should be open in April 2017. The plaza is scheduled to be open in summer 2017 and the senior apartments will start opening in early 2018. When completed, the entire Tukwila Village project costs will be over $100 million. Adjacent to Tukwila Village, the City finished design for street and frontage improvements on South 144th Street between Tukwila International Blvd and 42nd Avenue South. This project will also include a new traffic signal next to Tukwila School District's Foster High School. Construction will begin in 2017. The City demolished four motels on Tukwila International Boulevard in 2016. The site was then cleared, graded with topsoil, hydro -seeded, and was completed with a split rail fence. Council selected HealthPoint, a federally accredited community health center, who will develop and operate a $25 million health and wellness facility on Tukwila International Boulevard. AWARDS AND ACKNOWLEDGEMENTS The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Tukwila for its comprehensive annual financial report for the fiscal year that ended December 31, 2015. This was the 29th consecutive year that Tukwila has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. Preparation of this report could not have been accomplished without the professional, efficient, and dedicated services of the entire staff of the Finance Department and the cooperation of other City departments. Their long hours of assistance with the preparation and review of this report are greatly appreciated. The Mayor, City Administrator and City Council are to be complimented for their encouragement, interest, and support in conducting the financial operations of the City in a fiscally sound and progressive manner. The efficient assistance of examiners from the Office of the State Auditor is also appreciated. Staff who had a direct role in preparing Tukwila's 2016 Comprehensive Annual Financial Report take great pride in their work, and the entire team who worked on this project is to be commended. Respectfully submitted, PC Peggy McCarthy, CPA Finance Director 7 CITY OF TUKWILA: 2016 CAFR LETTER OF TRANSMITTAL 8 CITY OF TUKWILA: 2016 CAFR CERTIFICATE OF ACHIEVEMENT GD Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting F r stinted t0 City of Tukwila Washington For its C cmprehensiv e Annual Financial Repot. For the Fiscal Year Ended December 31, 2015 ExeciUtive 1Lirectir10EO 9 CITY OF TUKWILA: 2016 CAFR CERTIFICATE OF ACHIEVEMENT 10 Office of the Washington State Auditor Pat McCarthy INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS June 28, 2017 Mayor and City Council City of Tukwila Tukwila, Washington REPORT ON THE FINANCIAL STATEMENTS We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the City of Tukwila, King County, Washington, as of and for the year ended December 31, 2016, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. Insurance Building, P.O. Box 40021 • Olympia, Washington 98504-0021 • (360) 902-0370 • Pat.McCarthy@sao.wa.gov 11 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the City of Tukwila, King County, Washington, as of December 31, 2016, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 15 through 28, budgetary comparison information on pages 103 through 104, pension plan information on pages 105 through 110, and information on postemployment benefits other than pensions on pages 111 through 112 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying information listed as combining financial statements and supplementary information on pages 115 through 122 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. This information has been subjected to auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. The information identified in the table of contents as the Introductory and Statistical Sections is presented for purposes of additional analysis and is not a required part of the basic financial statements of the City. 12 Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it. OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we will also issue our report dated June 28, 2017, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. That report will be issued under separate cover in the City's Single Audit Report. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. Sincerely, f Pat McCarthy State Auditor Olympia, WA 13 CITY OF TUKWILA: 2016 CAFR AUDITOR'S OPINION LETTER 14 CITY OF TUKWILA: 2016 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS MANAGEMENT'S DISCUSSION AND ANALYSIS For the Year Ended December 31, 2016 The management discussion and analysis section of the City of Tukwila's Comprehensive Annual Financial Report provides an overview of the City's financial activities for the year ended December 31, 2016. The intent of this discussion and analysis is to look at the City's financial performance as a whole. Readers should also review the transmittal letter, and the basic financial statements to enhance their understanding of the City's financial performance. FINANCIAL HIGHLIGHTS • As of December 31, 2016, the City of Tukwila's total assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $296.0 million. Of this amount, $33.0 million represents unrestricted net position, which may be used to meet the government's ongoing obligations to citizens and creditors. • In November of 2016, the City of Tukwila issued $36.7 million in voter approved bonds (including the premium on bonds issued) to finance rebuilding three fire stations, various fire equipment and apparatus, and the construction of a Justice Center to house the City's police department and municipal court. This resulted in a $36.9 million net increase in governmental activities restricted cash. • The City of Tukwila's total net position increased $8.9 million, or 3.1%. Governmental activities increased $5.0 million partially due to growth in excise taxes. Business -type activities increased $3.9 million due in part to rate increases in all three utility funds. • At the close of the current fiscal year, the City of Tukwila's governmental funds reported combined fund balances of $76.1 million, an increase of $37.4 million. Approximately 15.3% ($11.6 million) of the fund balance is available for spending at the City's discretion (unassigned fund balance). • Revenues exceeded expenditures in the governmental funds by $1.0 million, an increase of $2.4 million from 2015 when expenditures exceeded revenues by $1.4 million. This is primarily due to a $2.1 million decrease in capital outlay in the Arterial Street fund. OVERVIEW OF THE FINANCIAL STATEMENTS The discussion and analysis is intended to serve as an introduction to the City of Tukwila's basic financial statements. The City's basic financial statements are presented in three parts: 1) Government -wide financial statements 2) Fund financial statements 3) Notes to the financial statements This report also includes supplementary information intended to furnish additional detail to support the basic financial statements. Government -wide Financial Statements The government -wide financial statements provide both long-term and short-term information about the City's overall financial status, in a manner similar to private -sector business. The Statement of Net Position presents financial information on all of the City's Tukwila's assets, liabilities, and deferred inflows/outflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of Tukwila is improving or deteriorating. 15 CITY OF TUKWILA: 2016 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS The Statement of Activities presents information designed to show how the City's net position changed during the year. The statement distinguishes revenue generated by specific functions from revenue provided by taxes and other sources not related to a specific function. The revenue generated by the specific functions (charges for services, grants, and contributions) is compared to the expenses for those functions to show the degree to which each function supports itself or relies on taxes and other general funding sources for support. All activity on this statement is reported on the accrual basis of accounting, requiring that revenues are reported when they are earned and expenses are reported when they are incurred, regardless of when cash is received or disbursed. Items such as (but not limited to) uncollected taxes, unpaid vendor invoices for goods or services received during the year, and earned but unused vacation leave are included in the statement of activities as revenue and expenses even though no cash has changed hands. Both the government -wide financial statements distinguish functions of the City of Tukwila that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City of Tukwila include general government (finance, executive, legal, court, and human resources), public safety (police and fire), physical environment, economic environment, transportation, mental/physical health, and culture and recreation. The City's business -type activities include a water, sewer, and surface water utilities, and a municipal golf course. Governmental activities are primarily supported by taxes, charges for services, and grants. Business -type activities are primarily self-supporting through user fees and charges. Fund Financial Statements The annual financial report includes fund financial statements in addition to the government -wide financial statements. A fund is a fiscal and accounting entity with a self -balancing set of accounts used to account for specific activities or meet certain objectives. The City of Tukwila Funds are often set up in accordance with special regulations, restrictions or limitations. The City of Tukwila, like other state and local governments, uses fund accounting to ensure and show compliance with finance -related legal requirements. The City's funds are divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds are used to account for essentially the same functions that are reported as governmental activities in the government -wide financial statements. The governmental fund statements focus on the near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the year. The information in the governmental fund statements can be used to evaluate the City's near-term financing requirements and immediate fiscal health. Comparing the governmental fund statements with the government -wide statements can help the reader better understand the long-term impact of the City's current year financing decisions. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains twenty individual governmental funds. Of these, four are considered major (the general fund, the arterial street fund, the local improvement district #33 fund, and the public safety plan fund) and are presented separately in the governmental funds' Balance Sheet and the governmental funds' Statement of Revenues, Expenditures and Changes in Fund Balances. The remaining governmental funds are combined into a single column labeled "Other Governmental Funds." Individual fund data for each of these non -major governmental funds is presented in the combining and individual fund statements and schedules section of this report. The City maintains budgetary control over its operating funds through the adoption of a biennial budget. Budgets are adopted at the fund level according to state law. A budgetary comparison schedule is presented for the general fund in the Required Supplemental Information section of the report. Other budgetary comparison schedules are included following the other governmental funds' combining statements in this report. 16 CITY OF TUKWILA: 2016 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS Proprietary funds are used by governments to account for their business -type activities and use the same basis of accounting as utilized in private industry. Business -type activities provide specific goods or services to a group of customers that are paid for by fees charged to those customers. There is a direct relationship between the fees paid and the services rendered. The City has two types of proprietary funds: enterprise funds and internal service funds. Enterprise funds are used to account for goods and services provided to citizens, while internal service funds are used to account for goods and services provided internally to various City departments. The same basis of accounting is used for proprietary funds in both the government -wide and individual fund statements. Enterprise funds report the same functions presented as business -type activities in the government -wide statements, but in greater detail. The City's enterprise fund statements provide information on the City's three utilities (water, sanitary sewer, surface water) as well as the City -owned golf course. Internal service funds are an essential accounting tool used to accumulate and allocate costs internally among the City's various functions. The City uses internal service funds to account for its fleet of vehicles, and its insurance premiums for active employees and LEOFF 1 retirees. Internal service fund activities are predominantly governmental and have been included in the governmental activities columns of the government -wide statements. Individual fund data for the internal service funds is provided in the form of combining statements in the combining and individual fund statements and schedules section of this report. Fiduciary funds are used to account for resources held for the benefit of parties outside of the government. Fiduciary funds are not reported in the government -wide financial statements because the resources of those funds are not available to support the City of Tukwila's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The City maintains two different types of fiduciary funds. The Firemen's Pension Trust Fund is used to report resources held in trust for retirees and beneficiaries covered by the Firemen's Pension plan. The agency fund reports resources held by Tukwila in a custodial capacity for individuals, private organizations, and other governments. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found immediately following the fund financial statements. Other Information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information including a budget and actual schedule for the City's general fund and schedules of progress in funding its obligation to provide pension and OPEB benefits to its former employees. Additional pension benefit information is found in Note 8. The combining statements referred to earlier in connection with nonmajor governmental funds and internal service funds are presented immediately following the required supplementary information on pensions and OPEB. 17 CITY OF TUKWILA: 2016 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS GOVERNMENT -WIDE FINANCIAL ANALYSIS As noted earlier, net position over time, may serve as a useful indicator of a government's financial position. In the case of the City of Tukwila, assets and deferred outflows of resources exceeded liabilities by $296.0 million at the close of the most recent fiscal year. Total net position increased by $8.9 million (3.1%) when compared to 2015. Current and other assets Capital assets, net of accumulated depreciation Total assets Deferred Outflows of Resources Long-term liabilities Net pension liability Net OPEB obligation Other liabilities Total liabilities Deferred Inflows of Resources Net position Net investment in capital assets Restricted Unrestricted Total net position CITY OF TUKWILA'S NET POSITION (in thousands) Governmental Activities Business -type Activities Total 2016 2015 2016 2015 2016 2015 $112,308 $74,640 $20,741 $17,629 $133,049 $92,269 206,147 205,816 67,410 66,826 273,557 272,642 318,455 280,456 88,151 84,455 406,606 364,912 4,629 2,576 470 288 5,100 2,864 73,776 47,172 6,943 7,723 80,719 54,895 12,944 11,631 2,539 2,095 15,483 13,726 9,179 0 0 0 9,179 0 8,149 7,139 993 436 9,142 7,576 104,048 65,942 10,475 10,254 114,523 76,197 1,117 4,187 98 346 1,216 4,533 193,113 191,331 60,807 59,483 253,920 250,815 8,996 5,446 - - 8,996 5,446 15,810 16,126 17,241 14,659 33,051 30,785 $217,919 $212,903 $78,048 $74,142 $295,967 $287,045 By far, the largest portion of the City's net position ($253.9 million or 85.8%) reflects its investment in capital assets (e.g., land, buildings, machinery, equipment, vehicles, and infrastructure), less any related outstanding debt that was used to acquire those assets. The City uses these capital assets to provide a variety of services to citizens. Accordingly, these assets are not available for future spending. Although investment in capital assets is reported net of related debt, it should be noted that the resources used to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City's net position ($9.0 million or 3.0%) represents resources that are subject to external restrictions on how they may be used. The business -type activities do not report any restrictions, so the entire $9.0 million is restricted in governmental activities funds. The majority is related to land and park acquisition. The remaining net position balance ($33.0 million, or 11.2%) is unrestricted and may be used to meet the City's ongoing obligations to its citizens and creditors. At the end of the current fiscal year, the City of Tukwila continued to report positive balances in all categories of net position. The City's overall net position increased $8.9 million from the prior fiscal year. The reasons for this overall increase are discussed in the following sections for governmental activities and business -type activities. 18 CITY OF TUKWILA: 2016 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS CITY OF TUKWILA'S CHANGES IN NET POSITION (in thousands) Governmental Activities Business -type Activities Total 2016 2015 2016 2015 2016 2015 Revenues: Program revenues Charges for services $11,904 $9,748 $22,963 $22,158 $34,867 $31,906 Operating grants and contributions 1,079 893 25 184 1,104 1,077 Capital grants and contributions 5,001 6,432 768 2,040 5,769 8,471 General revenues Property taxes 14,563 14,320 - 14,563 14,320 Sales and use taxes 18,908 19,334 18,908 19,334 Natural gas use tax - - - - Hotel/Motel taxes 710 678 - 710 678 Utility taxes 4,046 4,019 - 4,046 4,019 Interfund utility taxes 2,147 2,061 - 2,147 2,061 Business taxes 2,716 2,749 - 2,716 2,749 Excise taxes 6,509 5,321 - 6,509 5,321 State entitlements 1,916 1,844 - 1,916 1,844 Investment earnings 560 475 560 475 Miscellaneous 1,000 281 - 1,000 281 Total revenues 71,058 68,156 23,756 24,381 94,813 92,537 Expenses: General government 9,662 8,042 - 9,662 8,042 Public safety 31,419 29,403 - 31,419 29,403 Transportation 11,188 11,070 - 11,188 11,070 Physical environment 2,554 2,611 2,554 2,611 Culture and recreation 5,431 5,125 5,431 5,125 Economic environment 4,411 5,783 - 4,411 5,783 Interest on long-term debt 1,076 1,033 - 1,076 1,033 Water/sewer - 13,984 13,186 13,984 13,186 Foster golf course - 2,078 2,087 2,078 2,087 Surface water - 4,088 4,148 4,088 4,148 Total expenses 65,741 63,068 20,150 19,421 85,892 82,489 Increase (decrease) in net position before 5,316 5,088 3,605 4,960 8,922 10,048 transfers and special items Transfers (300) (300) 300 300 - Special Item - (957) - (957) Change in net position 5,016 3,831 3,905 5,260 8,922 9,091 Net position -beginning of period 212,903 220,064 74,142 71,948 287,045 292,012 Change in accounting principle - Retirement Costs - (9,551) (2,308) (11,859) Change in accounting principle - (757) (757) Prior Period Adjustment - (1,442) - (1,442) Net position -beginning balance, as restated 212,903 209,072 74,142 68,882 287,045 277,954 Net position -end of period $217,919 $212,903 $78,048 $74,142 $295,967 $287,045 Governmental Activities During the current fiscal year, net position for governmental activities increased $5.0 million (2.4%) from the prior fiscal year for an ending balance of $217.9 million. The primary reasons for this increase are: • Charges for services increased by $2.2 million (22.1%) to $11.9 million. The reason for the increase is the recognition of just over $2.0 million in fire impact fees related to new development. • Capital grants and contributions decreased $1.4 million (22.2%), although this was partially offset by a $0.2 million increase in operating grants and contributions. In 2015, capital grants made up 10% of all governmental revenue, while in 2016 capital grants were only 7% of total revenues. The decrease in capital grant funding is mostly related to a one-time, $1.3 million State grant received in 2015 for the Interurban Avenue South project. 19 CITY OF TUKWILA: 2016 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS • Excise taxes increased $1.2 million (22.3%) due to a $0.3 million increase in real estate excise taxes from the sale of properties in Tukwila, combined with a $0.9 million increase in gambling tax revenues. • Total expenses increased $2.7 million (4.2%), mostly related to general growth in employee costs, including medical benefits, retirement costs, and a 2% cost of living adjustment. REVENUES BY SOURCE — GOVERNMENTAL ACTIVITIES Other taxes 14% Utility taxes 9% Sales Other revenue 5% Charges for services 17% Operating grants & contributions 1% use taxes 27% Capital grants & contributions 7% ty taxes 0% PROGRAM REVENUES AND EXPENSES — GOVERNMENTAL ACTIVITIES $30,000,000 $27,000,000 $24,000,000 $21,000,000 $18,000,000 $15,000,000 $12,000,000 $9,000,000 $6,000,000 $3,000,000 so • Program revenues ■ Expenses 11 1 II _ ■ . 1 ■ 1 ��.�� ya��,�J ,b,• ��•�w a• �\oc ��w o,�t ��\\� hoc ,\�o� `mac ,`tom be' <2\-‘ Q , c''' J`a\�� ea�a o \`ems • t t� C� Q� `J� God 20 CITY OF TUKWILA: 2016 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS Business -Type Activities For the City of Tukwila's business -type activities, the results for the current fiscal year were positive in that overall net position increased by $3.9 million (5.3%) to reach an ending balance of $78.0 million. The overall growth is attributable to the following factors: • In the Water Utility, total net position increased by $0.8 million (4.4%). This resulted from a 5.0% rate increase effective January 1, 2016, combined with a slight reduction in operating expenses from the prior year. • In the Sewer Utility, charges for services increased $0.2 million (1.8%) primarily due to a 5.0% rate increase effective January 1, 2016 combined with a slight reduction in water usage by customers. • In the Surface Water Utility, a 15.0% rate increase resulted in charges for services increasing by almost $0.8 million (15.0%). • Despite the rate increases, operating income was $2.8 million, or approximately $20,000 less than last year, signifying that the rate increases were adequate to cover the growth in operating expenses. • Of the $78.0 million total net position, $17.2 million (22.1%) is unrestricted and each utility can utilize their portion for any purpose. This operating balance is necessary for future planned infrastructure replacements and repairs. The following chart shows the relative net position balances for each business -type fund: Surface wat 46% BUSINESS -TYPE NET POSITION - BY FUND Foster golf course 8% The majority of net position in the City's enterprise funds relate to capital asset infrastructure, such as water and sewer mains, and the golf course land. As such, most of the net position is not available to support the ongoing expenses of the funds. The following chart contrasts the total net position to the spendable portion of net position for each enterprise fund: 21 1 CITY OF TUKWILA: 2016 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS COMPARISON OF TOTAL NET POSITION TO SPENDABLE NET POSITION -BUSINESS-TYPE FUNDS $45,000,000 $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 Water Sewer Surface water Foster golf course The following chart depicts the revenues and expenses for business -type funds: $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 so BUSINESS -TYPE ACTIVITY REVENUES & EXPENSES (before Capital Contributions & Transfers) ■ Revenues ■ Expenses 1 1 Water Sewer Surface Water Foster Golf Course 22 CITY OF TUKWILA: 2016 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS FINANCIAL ANALYSIS OF GOVERNMENTAL FUNDS The purpose of the City's governmental funds is to report on near-term inflows, outflows, and balances of spendable resources. This information helps determine the City's financial requirements in the near future. Specifically, unassigned fund balance may serve as a useful measure of a government's net resources available for discretionary use as they represent the portion of fund balance which has not yet been limited to use for a particular purpose by either an external party, the City of Tukwila itself, or a group or individual that has been delegated authority to assign resources for use for a particular purpose. As of December 31, 2016, the City's governmental funds had combined fund balances of $76.1 million, an increase of $37.4 million, or almost double the 2015 fund balance total of $38.6 million. The increase is primarily due to bond proceeds of $33.0 million, plus a premium of $3.7 million, in the public safety plan fund. The change in fund balance for governmental funds compared to 2015 is as follows: • General Fund $ 0.7 million • Arterial Street Fund (1.1 million) • Local Improvement District #33 (0.1 million) • Public Safety Plan 36.5 million • Other Governmental Funds 1.4 million The general fund is the primary operating fund of the City. All receipts and payments of ordinary City operations are processed through this fund unless they are required to be accounted for in another. At the end of 2016, the general fund had a $19.0 million fund balance, with $11.6 million (61.0%) of the balance classified as unassigned and available to meet the City's general obligations. The arterial street fund decrease in fund balance is related to the planned use of reserves for capital projects. In 2016, a total of $5.5 million was spent on capital outlay. The fund balance in the local improvement district #33 fund decreased by the difference between the special assessment revenue received and the payment on the LID bonds issued. The following chart shows the relative fund balances for governmental funds: GOVERNMENTAL FUNDS — FUND BALANCES Public Safety Plan fund 48% Local Improvem District #33 1% Arterial street fund 5% General fund 25% 23 Facilities/Urban Renewal 0% Capital project funds 17% Special revenue funds 2% Debt service funds 2% CITY OF TUKWILA: 2016 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS The general fund revenue increase of $1.1 million is combined from the following sources: $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 ($100,000) ($200,000) GENERAL FUND REVENUE INCREASES/DECREASES — BY SOURCE Taxes $685,392 Ch a rges for servi ces $389,659 Investment earnings $69,926 Miscellaneous Fi nes a nd forfeitures $93,557 $57,002 ■ Licenses and permits Intergovernmental ($113,035) ($127,780) FINANCIAL ANALYSIS OF PROPRIETARY FUNDS The City's proprietary funds provide the same type of information as found in the government -wide financial statements, but in greater detail. Factors affecting the finances of the City's proprietary funds have already been addressed in the discussion of the City's business -type activities. Unrestricted net position in business -type activities ended 2016 at $17.2 million, an increase of $2.6 million (17.6%) from 2015. GENERAL FUND BUDGETARY HIGHLIGHTS The City budgets biennially by adopting a budget at the end of the preceding biennium, and then making adjustments as necessary via budget amendments throughout the next two years. Following is a summary of such budget amendments that occurred in 2016: • Gambling Tax revenue increased by $600,000 to reflect increase in tax collections partially due to a local casino resuming operations. • Additional revenue and expenditures were appropriated for the City's COPS grant and two police officers, one dedicated to the Auto Theft Task Force and the other dedicated to the Criminal Justice Training Center for the Basic Law Enforcement Academy. • Carryover of project costs unspent in 2015 related to the Police records management system and Laserfiche Rio projects. • Adjustments in transfers from the General Fund to other funds, including: o $800,000 reduction in transfer to the Arterial Street Fund due to $1.0 million of unanticipated REET funds in 2015 to cover Arterial Street projects; and o $275,000 increase in transfer to the Contingency Fund in line with policy requirements. 24 CITY OF TUKWILA: 2016 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS Reasons for the significant variances in the general fund between the final budget and actual results include: • Tax revenue was $0.6 million, or 1.4%, higher than budget. Of that amount, property taxes decreased $0.3 million due to a planned annexation that was not approved, sales and use taxes increased $0.3 million, and gambling taxes increased $0.6 million partially due to the resumption of operations at one of the local casinos. • Fines and forfeitures was $26 thousand (8.9%) over budget. This was due to false alarms coming in higher than anticipated. • A $2.1 million transfer in from the Facilities/Urban Renewal fund was budgeted but did not occur because an anticipated land sale did not happen in 2016. • Expenditures were below budget by $1.9 million, or 3.6%. Public safety expenditures contributed $1.0 million of the budgetary savings due to less spending on overtime ($0.3 million), equipment operations and maintenance ($0.4 million), and equipment replacement costs ($0.2 million). Additional budgetary savings occurred in economic environment related primarily to salary and benefit savings from unfilled positions. CAPITAL ASSETS The City's investment in capital assets for both its governmental and business -type activities as of December 31, 2016 totaled $ 273.6 million (net of accumulated depreciation), an increase of nearly $1.0 million (0.3%) from 2015. This investment in capital assets includes land, buildings, improvements, machinery and equipment, construction in progress, utility transmission/distribution systems, roads, bridges, and infrastructure. CITY OF TUKWILA'S CAPITAL ASSETS (net of depreciation) Governmental Activities Business -Type Activities Total 2016 2015 2016 2015 2016 2015 Land Buildings Other Improvements Machinery and Equipment Infrastructure Construction in Progress Total $ 35,498,580 11,834,146 10,528,019 7,111,094 131,110, 688 10,064,699 35,312,814 $ 2,346,230 2,346,230 $ 37,844,810 10,711,996 8,307,234 8,679,027 20,141,380 5,933,158 54,158,840 48,145,336 64,686,859 6,811,474 386,113 407,530 7,497, 207 120, 913, 528 - 131,110, 688 26,133,182 2,211,229 7,247,963 12, 275, 927 37,659,044 19,391,023 54, 078,494 7,219,004 120, 913, 528 33,381,145 $206,147,226 205,816,152 $ 67,409,646 66,826,087 $273,556,872 272,642,240 More detailed information on capital assets is provided in Note 6 to the financial statements. General capital outlay purchases added $798,601 in machinery and equipment and included various technology purchases in the amount of $769,943, Parks & Recreational equipment for $10,686, and Street Division thermal imaging cameras totaling $11,676. Many of the projects in the Arterial Street Fund continue to be in the construction phase adding $5.5 million in construction -in -progress for the period. The major arterial street fund activities are comprised of the following: • Interurban Avenue South, $2.1 million • Tukwila Urban Center Pedestrian/Bicycle Bridge, $2.3 million • Tukwila Urban Center Transit Center, $0.23 million • Boeing Access Road Bridge Rehabilitation, $0.11 million • Andover Park West, $0.08 million • Various other Arterial Street Fund projects total $0.64 million Major construction projects completed in 2016 added $18 million to capitalized infrastructure for the Arterial Street Fund which included Interurban Avenue South with total overall previous and current years' construction -in - 25 CITY OF TUKWILA: 2016 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS progress costs of $9.2 million; Tukwila Urban Transit Center with costs of $6.6 million; and, Andover Park West with costs of $2.2 million. Ongoing Residential Street Fund construction projects added $649,579 to construction -in -progress and include the following: • 40 — 42nd Avenue South, $246,583 • Cascade View Safe Routes to School — Phase II, $153,924 • 42nd Avenue South Roadside Barriers, $90,010 • Various other Residential Street Fund projects total $159,062 Projects completed in 2016 for the Residential Street Fund include the newly constructed 42nd Avenue South roadside barriers with total overall previous and current years' construction -in -progress costs of $196,100. Land Acquisition, Recreation & Park Development activities consist of $1,435,602 for the Duwamish Gardens and Duwamish Hill Preserve work in progress improvements. Both projects were completed in 2016 with total overall previous and current years' construction costs of $3,387,210 and $992,327 and capitalized into parks improvement infrastructure. Other park related projects total $11,900 in added current year construction -in -progress costs. Other governmental funds' activity in the areas of facilities improvements provided an additional $13,138 to construction -in -progress work for the year. Business -type activities consisted of $2.7 million in added construction -in -progress work for the year. Major projects in the utility funds comprise of the following: • East Marginal Way South Pipes, $694,852 • Andover Park East Waterline, $1,062,773 • Crystal Springs lntertie, $410,171 A total of $569,653 in other utility construction projects were added to construction -in -progress during the current period. Major construction projects completed in 2016 include Interurban Avenue South and East Marginal Way South Pipe projects with total overall previous and current years' construction -in -progress costs of $2.6 million and $3.2 million, respectively, which have both been capitalized into utilities infrastructure. LONG-TERM DEBT At the end of the current fiscal year, the City had total bonded debt outstanding of $61.1 million, excluding the premium on bonds issued. Of this amount, $54.1 million is general obligation bonds which is backed by the full faith and credit of the City, $1.6 million is revenue bonds for the water/sewer and surface water utilities, and the remaining $5.4 million is special assessment bonds which were issued to improve access to the City's urban center. The City issued $36.7 million (including premium) in general obligation debt in 2016 to finance a new Justice Center to house the police department and court operations, reconstruct three fire stations within the city, and provide funding for fire equipment and apparatus for 20 years. This new debt issuance resulted in an overall debt increase of $35.0 million. The City currently maintains a rating of "AA" with Standard and Poor's and Fitch's Investor Service, and "Al" with Moody's for its general obligation debt. In February 2017, Moody's informed the City that it raised the city's rating to Aa3. 26 CITY OF TUKWILA: 2016 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS The following schedule summarizes the City's long-term debt: CITY OF TUKWILA'S LONG-TERM DEBT Governmental Activities Business -type Activities Total 2016 2015 2016 2015 2016 2015 General obligation bonds $ 54,114,977 $ 23,057,714 $ - $ - $ 54,114,977 $ 23,057,714 Revenue bonds - 1,597,704 1,742,527 1,597,704 1,742,527 Premium on bonds issued 4,380,732 761,523 4,380,732 761,523 Special assessment bonds 5,412,500 6,082,500 - 5,412,500 6,082,500 Public Works Trust Fund Loans - 5,046,991 5,646,459 5,046,991 5,646,459 Due to other governments 6,093,556 6,265,200 - - 6,093,556 6,265,200 $ 70,001,765 $ 36,166,937 $ 6,644,695 $ 7,388,986 $ 76,646,460 $ 43,555,923 More detailed information on long-term debt, including debt limitations, is provided in Note 10 to the financial statements. ECONOMIC FACTORS AND THE UPCOMING BIENNIAL BUDGET The following economic factors currently affect the City of Tukwila and were considered in developing the 2017- 2018 biennial budget: • The City's 2017 assessed value of $5.8 billion is 6.8% higher than 2016 and its growth reflects positively on the local economy. • Sales Tax is the City's largest revenue source and is conservatively estimated to increase 7.5% in 2017 and an additional 2.9% in 2018, another sign that the local economy has rebounded. • Property tax is the second largest revenue source, contributing to approximately one-quarter of the annual general fund budget. This revenue source is limited to 1% growth annually, however new construction estimated in 2018 results in a 2.5% increase over 2017. • The 2017-2018 biennial budget includes a one-time revenue of $1.8 million in 2017 and $6.1 million in 2018 for anticipated property sales in both the Tukwila Village and Tukwila Redevelopment (urban renewal) areas. These funds will be used for capital improvements throughout the City. In addition, $2.25 million will be used to repay the line of credit the City received in 2015 to purchase property in the urban renewal area. • Rate increases of 5% annually are scheduled in the Water utility from 2017-2022 to cover the cost of purchasing water from the Cascade Water Alliance and maintain the utility's infrastructure. An additional increase of 3.5% in sewer rates is scheduled for 2018. • National Pollutant Discharge Elimination system (NPDES) permit requirements have significant costs for the surface water fund, which will result in a 5% rate increase in 2017 and 3% in 2018 for that utility. • Capital outlay in the General Fund decreased 47.5% in 2017 and an additional 87.2% in 2018. This reduction reflects the fact that the Police records management system was completed in 2016 and the Parks and Recreation class registration system will be completed in 2017. The City's reserve policy specifies that the General Fund ending fund balance shall equal or exceed 18% of the previous year's operating revenues. The policy also requires that a 10% minimum fund balance be maintained for the Contingency Fund. The biennial budget complies with both these requirements. 27 CITY OF TUKWILA: 2016 CAFR MANAGEMENT'S DISCUSSION AND ANALYSIS REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the City of Tukwila's finances for readers with an interest in the City's finances. Questions concerning this report, or requests for additional information, may be addressed to the Finance Director, City of Tukwila, 6200 Southcenter Blvd, Tukwila, WA 98188-2544. 28 CITY OF TUKWILA: 2016 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF NET POSITION DECEMBER 31, 2016 Governmental Business -Type Activities Activities Total ASSETS: Cash and cash equivalents $ 27,816,183 $ 15,987,448 $ 43,803,631 Investments 5,956,032 2,642,502 8,598,534 Taxes receivable 6,807,605 836 6,808,441 Other receivables 418,712 1,678,017 2,096,728 Due from other governmental units 2,576,606 64,822 2,641,427 Inventory of materials and supplies 15,778 53,458 69,237 Restricted cash and cash equivalents 38,386,341 93,007 38,479,349 Restricted investments 1,000,203 1,000,203 Notes receivable 8,723,916 221,035 8,944,951 Real property held for resale 7,645,000 7,645,000 Investment in joint ventures 9,188,795 9,188,795 Non -depreciable capital assets 45,563,279 4,557,459 50,120,737 Depreciable capital assets (net of accumulated depreciation) 160,583,947 62,852,187 223,436,134 Net Pension asset 3,772,659 3,772,659 Total Assets 318,455,055 88,150,771 406,605,827 DEFERRED OUTFLOWS OF RESOURCES: Deferred loss on refunding 324,261 42,079 366,340 Deferred outflows related to pensions 4,304,943 428,254 4,733,197 Total Deferred Outflows Of Resources 4,629,204 470,333 5,099,537 LIABILITIES: Accounts payable Accrued w ages and benefits payable Accrued interest payable Unearned revenue Other liabilities Bonds and other debt payable Due w ithin one year Due in more than one year Net pension liability Net other post employment obligation Total Liabilities 3,344,240 1,551,266 355,347 228,090 2,670,165 3,979,399 69,796,567 12,943,779 9,178,836 661,414 120,627 17,782 17,100 175,598 776,814 6,166,240 2,539,401 4,005,655 1,671,892 373,129 245,190 2,845,764 4,756,213 75,962,807 15,483,180 9,178,836 104,047, 688 10,474,977 114, 522,665 DEFERRED INFLOWS OF RESOURCES: Deferred inflow s related to pensions Business taxes received in advance Total Deferred Inflow s Of Resources NET POSITION: Net investment in capital assets Restricted for: Debt service Tourism promotion Arterial street improvements Drug investigation and enforcement Land and park acquisition, development Fire improvements Public safety facilities Unrestricted net position Total Net Position 543,699 98,478 642,177 573,715 573,715 1,117,414 98,478 1,215,892 193,113,026 60,807,030 253,920,057 1,567,571 912,558 134,373 553,539 3,341,625 736,518 1,750,000 15,809,945 17,240,620 1,567,571 912,558 134,373 553,539 3,341,625 736,518 1,750,000 33,050,565 $ 217,919,156 $ 78,047,650 $ 295,966,806 The notes to the financial statements are an integral part of this statement. 29 -Net (Expense) Revenue and Changes in Net Position - CITY OF TUKWILA: 2016 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2016 --Expenses-- Program revenues Charges Operating Capital Grants For Services Grants and and Contributions Contributions Governmental Business -Type Total Activities Activities FUNCTIONS / PROGRAMS: PRIMARY GOVERNMENT Governmental activities General Government Public safety Transportation Physical environment Culture and recreation Economic environment Interest on long-term debt Total Governmental Activities BUSINESS -TYPE ACTIVITIES: Water Sewer Surface w ater Foster golf course Total Business -Type Activities Total Primary Government $ 9,662,207 31,418,713 11,188,189 2,554,259 5,431,324 4,410,841 1,075,729 65,741,262 5,700,976 8,283,392 4,088,360 2,077,536 20,150,264 $ 3,742,937 $ 114,451 $ 4,130,701 545,067 454,525 254,844 3,602,614 464 624,276 1,140,558 57,748 774,053 2,434,546 106,910 11,903,732 1,079,020 5,000,942 6,431,763 9,229,356 5,875,343 1,426,385 22,962,846 101,291 270,857 25,000 395,583 $ (5,804,818) $ (26,742,945) (6,876,206) (1,929,519) (3,458,965) (1,869,385) (1,075,729) (47,757,567) 25,000 767,732 832,078 1,216,821 2,207,566 (651,151) 3,605,314 $ (5,804,817) (26,742,945) (6,876,206) (1,929,519) (3,458,965) (1,869,385) (1,075,729) (47,757,566) 832,078 1,216,821 2,207,566 (651,151) 3,605,314 $ 85,891,525 $ 34,866,578 $ 1,104,020 $ 5,768,674 $ (47,757,567) $ 3,605,314 $ (44,152,252) General Revenues: Taxes Property taxes Retail sales and use taxes Hotel/motel taxes Utility taxes Interfund utility taxes Business taxes Excise Taxes State entitlements Unrestricted investment earning Miscellaneous Total General Revenues Excess of revenues over expenses before transfers Transfers Change in net position Net position - beginning $ 14,562,501 18,908,190 710,267 4,045,916 2,146,515 2,716,257 6,508,665 1,915,810 559,733 1,000,049 53,073,904 5,316,337 (300,000) 5,016,337 212,902,819 $ $ 14,562,501 18,908,190 710,267 4,045,916 2,146,515 2,716,257 6,508,665 1,915,810 559,733 1,000,049 53,073,904 3,605,314 8,921,652 300,000 3,905,314 8,921,652 74,142,336 287,045,155 Net position -ending $217,919,156 $ 78,047,650 $ 295,966,806 The notes to the financial statements are an integral part of this statement. 30 CITY OF TUKWILA: 2016 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, 2016 Local Public Other Total General Arterial Improvement Safety Governmental Governmental Fund Street District #33 Ran Funds Funds ASSETS: Cash and cash equivalents $ 12,278,557 $ 1,667,647 $ 898,722 $ 114,324 $ 6,542,202 $ 21,501,453 Investments 3,053,018 3,053,018 Taxes receivable 5,645,241 541,874 620,491 6,807,605 Other receivables 365,262 21,703 189 6,600 393,754 Due from other governmental units 288,036 1,125,152 1,163,418 2,576,606 Restricted assets: Cash and cash equivalents 8,406 2,371,097 35,503,363 503,475 38,386,341 Investments - 1,000,203 1,000,203 Special assessment receivable 4,794,009 4,794,009 Notes receivable 1,501,003 378,882 - 1,750,000 300,022 3,929,907 Real property held for resale - - 7,645,000 7,645,000 Total Assets $ 23,139,523 $ 6,106,355 $ 5,692,731 $38,368,079 $ 16,781,208 $ 90,087,896 LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES: Liabilities: Accounts payable 1,093,021 1,377,034 104,952 682,766 3,257,773 Accrued w ages & benefits 1,504,321 20,448 6,799 1,531,568 Unearned revenue 228,090 228,090 Other liabilities 122,742 322,279 - 175,644 620,665 Total Liabilities 2,948,174 1,719,761 - 104,952 865,209 5,638,095 Deferred inflow of resources Unavailable revenue -special assessment 4,794,009 4,794,009 Business taxes received in advance 573,715 - 573,715 Unavailable revenue -property tax, other 217,959 - 217,959 Unavailable revenue -developer agreement 367,931 387,217 - 1,750,000 306,622 2,811,771 Total Deferred Inflow Of Resources 1,159,605 387,217 4,794,009 1,750,000 306,622 8,397,454 Fund balance: Nonspendable 1,141,484 7,645,000 8,786,484 Restricted: Hotel/motel tax - - 912,558 912,558 Arterial street capital improvements 2,371,097 2,371,097 Drug investigation and enforcement - 553,539 553,539 Park and land acquisition/development 3,341,625 3,341,625 Public safety facilities 36,503,556 36,503,556 Fire improvements 736,518 736,518 Debt service guraranty fund - 668,849 668,849 Local Improvement District 898,722 898,722 Assigned: Residential street improvements 658,932 658,932 Arterial street improvements 1,628,279 1,628,279 Contingencies 6,050,624 6,050,624 Land & park acquisition 10,488 10,488 Facilities & urban renew al - - 295,040 295,040 General government improvements - - 391,903 391,903 Public safety facilities - 9,571 9,571 1% Arts 184,000 184,000 Technology 43,306 - - - 43,306 Debt service 394,925 394,925 Unassigned 11,612,330 - 11,612,330 Total Fund Balance 19,031,744 3,999,376 898,722 36,513,127 15,609,377 76,052,346 Total Liabilities, Deferred Inflows And Fund Balances $ 23,139,523 $ 6,106,355 $ 5,692,731 $38,368,079 $ 16,781,208 $ 90,087,895 The notes to the financial statements are an integral part ofthisftatement. CITY OF TUKWILA: 2016 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION DECEMBER 31, 2016 Total Governmental Funds Total governmental fund balances as reported on this statement $ 76,052,346 Capital assets used in governmental activities are not financial resources and therefore not reported in the funds. Non -depreciable assets Depreciable assets (net) Internal service fund assets The net pension asset is not an available resource and, therefore, is not reported in the funds. Deferred outflow of pension costs Deferred inflow of pension contributions 45,563,279 155,875,835 4,708,113 206,147,226 3,772,659 4,304,943 (543,699) 3,761,244 The City has an equity interest in two joint ventures. This equity interest for the provision of governmental services is not a current financial resource and therefore is not reported in the funds. 9,188,795 Revenue that was not collected within the recognition period and therefore was not available to pay current liabilities: Unavailable revenue reported for propertytax and other receivables Unavailable revenue reported for developer agreement Unavailable revenue reported for special assessment Some liabilities are not due and payable in the current period and therefore are not reported in the funds. Long term liabilities due within one year Long term liabilities due in more than one year Accrued interest payable Deferred outflow on refunding Internal service fund net position exclusive of capital assets, deferred outflow of pension costs and deferred inflow of pension contributions which are included with other reconciling items above Internal service funds are used by management to charge the cost of certain activities, such as health insurance and fleet maintenance, to individual funds. The assets and liabilities of these internal service funds are included in governmental activities in the statement of net position. 217,959 2,811,771 4,794,009 (3,979,399) (82,358,785) (355,347) 324,261 7,823,739 (95,548,106) 6,721,251 Net Position Of Government Activities As Reported On The Statement Of Net Position $ 217,919,156 The notes to the financial statements are an integral part of this statement. 32 CITY OF TUKWILA: 2016 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2016 Local Public Other Total General Arterial Improvement Safety Governmental Governmental Fund Street District #33 Plan Funds Funds REVENUES: Taxes $ 45,886,761 $ 1,573,930 $ Licenses and permits 2,129,221 Intergovernmental 4,498,683 3,642,889 Charges for services 3,286,105 441,500 Fines and forfeitures 318,459 Investment earnings 233,544 19,711 267,930 Special assessments 542,180 Miscellaneous 214,444 117,549 886 $ $ 2,127,801 $ 49,588,492 2,129,221 1,925,841 10,067,413 183,867 3,911,473 318,459 9,561 10,553 541,299 542,180 624,279 957,158 Total Revenues 56,567,215 5,795,580 810,997 9,561 4,872,341 68, 055, 695 EXPENDITURES: Current: General government 8,315,631 - - - 1,090,359 9,405,989 Econonic environment 4,070,805 422,405 4,493,210 Physical environment 1,955,028 - 3 1,955,031 Public safety 29,100,506 - 206,388 59,303 29,366,198 Culture and recreation 4,408,302 135,038 4,543,339 Transportation 2,879,996 2,096,831 - - 261,641 5,238,468 Debt service: Principal 670,000 1,932,782 2,602,782 Interest 281,044 812,540 1,093,584 Capital outlay 810,180 5,502,756 - 2,045,515 8,358,450 Total Expenditures 51,540,446 7,599,587 951,044 206,388 6,759,585 67,057,051 Excess (deficiency)of revenues Over (Under) Expenditures 5,026,769 (1,804,007) (140,047) (196,827) (1,887,245) 998,643 OTHER FINANCING SOURCES (USES): Transfers in Transfer out Issuance of debt Bond premium (4,325,831) 751,000 - 3,274,831 4,025,831 - - (4,325,831) 32,990,000 32,990,000 - 3,719,954 3,719,954 Total Other Financing Sources And Uses (4,325,831) 751,000 - 36,709,954 3,274,831 36,409,954 Net change in fund balances 700,938 (1,053,007) (140,047) 36,513,127 1,387,586 37,408,597 Fund balance- beginning 18,330,806 5,052,383 1,038,769 14,221,790 38,643,748 Fund Balance - Ending $ 19,031,744 $ 3,999,376 $ 898,722 $ 36,513,127 $ 15,609,377 $ 76,052,346 The notes to the financial statements are an integral part of this statement. 33 CITY OF TUKWILA: 2016 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENT FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31, 2016 Net change in fund balances per the Statement of Revenues, Expenditures, and Changes in Fund Balances Amount reported as change in net position in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. In the current period, these amounts are: Capital Outlay 8,358,450 Adjustments to construction in progress (912,881) Donated capital assets 82,808 Depreciation Expense (excludes internal service fund depreciation which is reflected in internal service fund change in net position listed below) (7,164,280) Excess of Capital Outlay Over Depreciation Expense The net effect of various transactions involving the Citys pension plans are: Reduction in pension liability and expense Increase in pension contribution revenue Reduction in the Fireman's Pension liability and expense 519,875 509,312 394,435 $ 37,408,597 364,098 1,423,622 The City has equity interests in two joint ventures. The equity interests for the provision of governmental (4,208) services are not current financial resources and therefore are not reported in the funds. Repayment of long-term debt is reported as an expenditure in governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position. In the current year, these amounts consist of: Bond principal retirement 2,602,782 Amortization expense 100,745 2,703,526 Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. General Obligation Bonds issued General Obligation Bonds issued Internal service funds are used by management to charge the costs of certain activities to individual funds. The change in net position of internal service funds is reported with governmental activities. Because some revenues will not be collected for several months after the Citys fiscal year ends, they are not considered "available" revenues in the government funds. Changes this year are for: Miscellaneous receivables (41,228) Developer agreements 2,811,771 Property taxes 9,820 Special assessment (542,180) 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 governmental funds. These activities consist of: Increase in accrued interest (16,278) Amortization of deferred outflow on bond refunding (66,613) Increase in compensated absences 86,271 Increase in unfunded other post employment benefits (2,033,913) Total additional expense (increase) decrease (3,719,954) (32,818,400) (548,596) 2,238,183 (2,030,533) Change In Net Position On The Statement Of Activities $ 5,016,337 The notes to the financial statements are an integral part of this statement. 34 CITY OF TUKWILA: 2016 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF NET POSITION PROPRIETARY FUNDS DECEMBER 31, 2016 Governmental Foster Surface Total Activities Water Sewer Golf Water Enterprise Internal Utility Utility Course Utility Funds Service Funds Current assets: Cash and cash equivalents $ 4,991,515 $ 6,938,662 $ 723,484 $ 3,333,787 $ 15,987,448 $ 6,314,729 Investments 2,134,587 507,915 - 2,642,502 2,903,014 Taxes receivable - - 836 - 836 - Other receivables 431,760 770,779 2,582 472,896 1,678,017 25,462 Due from other governmental units 64,822 64,822 Inventory of materials and supplies 53,458 - 53,458 15,273 Current assets restricted Cash and cash equivalents 35,830 57,177 - 93,007 Total Current Assets 7,593,692 8,217,356 837,537 3,871,505 20,520,091 9,258,478 Noncurrent assets: Notes receivable 221,035 221,035 Capital assets Land 87,347 69,525 1,609,575 579,783 2,346,230 - Building 1,416,567 3,364,962 6,627,496 1,875,395 13,284,419 Other improvements 22,188,810 14,586,442 3,559,992 47,829,405 88,164,649 Machinery and equipment 787,303 1,242,767 94,786 49,776 2,174,631 14,942,639 Less: accumulated depreciation (10,922,163) (8,254,806) (6,086,998) (15,507,546) (40,771,512) (10,234,527) Construction in progress 728,271 862,642 - 620,315 2,211,229 Total capital assets (net of accumulated depreciation) 14,286,135 11,871,532 5,804,851 35,447,129 67,409,646 4,708,113 Total Noncurrent Assets 14,286,135 12,092,566 5,804,851 35,447,129 67,630,681 4,708,113 Total Assets 21,879,827 20,309,922 6,642,388 39,318,634 88,150,771 13,966,590 Deferred Outflow s of Resources Deferred pension Deferred Loss on Refunding Total Deferred Outflows Of Resources LIABILITIES: Current Liabilities Accounts payable Accrued w ages and benefits Accrued interest payable Unearned revenue Other current liabilities Due to other governments Compensated absences Revenue bond payable Total Current Liabilities Noncurrent liabilities: Reserve for unreported claims Revenue bonds payable Net pension liability Compensated absences Due to other governments 91,452 10,941 102,393 186,838 28,294 2,872 5,785 77,532 95,080 37,253 433,654 378,150 542,277 127,437 622,195 66,221 26,089 92,310 209,593 16,084 8,339 27,629 233,436 8,635 88,835 592,551 109,089 161,492 5,050 109,089 166,542 3,034 29,070 52,247 18,486 102,837 901,742 392,669 646,859 53,777 1,963,450 261,949 47,179 6,570 11,315 18,190 270,953 6,943 17,194 640,293 174,531 957,596 83,082 1,861,878 428,254 42,079 470,333 64,348 64,348 661,414 86,468 120,627 19,698 17,782 17,100 175,598 748,250 599,468 34,064 143,282 1,769,336 854,416 1,454,422 2,539,401 264,295 4,447,523 1,301,250 381,561 Total Noncurrent Liabilities Total Liabilities 1,670,059 3,257,861 700,636 3,077,086 8,705,642 1,682,811 2,103,714 3,850,411 803,473 3,717,379 10,474,977 2,537,227 Deferred Inflow s of Resources Deferred inflow pension earnings Total Deferred Inflows Of Resources 21,359 14,678 25,172 37,269 98,478 14,963 21,359 14,678 25,172 37,269 98,478 14,963 NET POSITION: Net investment in capital assets 13,164,397 8,710,158 5,804,851 33,127,624 60,807,030 4,708,113 Unrestricted 6,692,750 7,826,985 117,982 2,602,903 17,240,620 6,770,636 Total Net Position $ 19,857,146 $ 16,537,143 $ 5,922,833 $ 35,730,527 $ 78,047,650 $ 11,478,749 The notes to the financial statements are an integral part of this statement. 35 Total Net Position - ending $ 19,857,146 $ 16,537,143 $ 5,922,833 $ 35,730,527 $ 78,047,650 $ 11,478,749 CITY OF TUKWILA: 2016 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2016 Governmental Foster Surface Total Activities Water Sewer Golf Water Enterprise Internal Utility Utility Course Utility Funds Service Funds OPERATING REVENUES: Charges for services $ 6,401,456 $ 9,186,732 $ 1,317,806 $ 5,850,799 $ 22,756,794 $ 7,988,226 Other operating revenue 186 106,079 240 106,505 140,076 Total Operating Revenues 6,401,642 9,186,732 1,423,886 5,851,039 22,863,299 8,128,302 OPERATING EXPENSES: Operating & maintenance 3,581,646 6,259,871 1,507,558 1,798,874 13,147,948 7,578,017 Administrative and general 645,770 556,465 177,352 702,884 2,082,471 448,689 Taxes 931,294 1,057,474 65,114 655,744 2,709,626 - Depreciation and amortization 526,817 370,312 327,513 914,244 2,138,886 799,436 Total Operating Expenses 5,685,527 8,244,121 2,077,536 4,071,745 20,078,930 8,826,142 Operating Income (Loss) 716,114 942,611 (653,651) 1,779,294 2,784,369 (697,840) NON-OPERATING REVENUE (EXPENSE): Investment earnings 33,658 42,624 2,500 29,101 107,883 52,291 Interest expense (15,449) (39,271) (16,614) (71,333) Gain (loss) on disposal of capital assets (3,538) - (4,798) (8,336) 96,953 Other non-operating revenue 25,000 25,000 Total Non -Operating Revenue (Expense) 14,672 3,353 2,500 32,689 53,214 149,244 Income (Loss) Before Contributions &Transfers 730,787 945,964 (651,151) 1,811,983 2,837,582 (548,596) Capital contributions 101,291 270,857 395,583 767,732 Transfers in 300,000 300,000 Change in Net Position 832,078 1,216,821 (351,151) 2,207,566 3,905,314 (548,596) Total net position - beginning 19,025,068 15,320,322 6,273,984 33,522,961 74,142,335 12,027,345 The notes to the financial statements are an integral part of this statement. 36 CITY OF TUKWILA: 2016 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2016 Page 1 of 2 Governmental Foster Surface Total Activities Water Sewer Golf Water Enterprise Internal Utility Utility Course Utility Funds Service Funds CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers $ 6,459,464 $ 9,346,013 $ 1,408,602 $ 5,656,394 $ 22,870,473 $ 8,190,613 Cash paid to supplier (3,368,184) (6,097,869) (727,753) (1,018,151) (11,211,957) (1,284,411) Cash paid for taxes (931,294) (1,057,474) (65,114) (655,744) (2,709,626) (570) Cash paid to or on behalf of employees (731,491) (513,566) (975,147) (1,275,260) (3,495,464) (6,850,302) Other cash received (paid) 186 - 8,603 240 9,029 - Net Cash Provided (Used) By Operating Activities 1,428,680 1,677,104 (350,808) 2,707,479 5,462,455 55,330 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Operating grant received - - 25,000 25,000 Transfers in - 300,000 300,000 Net Cash Provided (Used) By Non - Capital Financing Activities 300,000 25,000 325,000 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Purchase of capital assets Contributed capital Capital grants Principal payment on debt Interest paymenton debt Proceeds from sale of equipment Other (621,865) 60,209 431,877 (132,734) (15,354) (701,042) 248,459 24,015 (323,226) (38,010) 80,321 (1,438,707) (2,761,613) (797,536) - 273,792 582,460 - - 323,884 779,777 - - (288,331) (744,291) - (17,231) (70,595) - - - 128,075 - (49,488) 30,833 - Net Cash Provided (used) for Capital And Related Financing Acivities (277,866) (709,483) (1,196,080) (2,183,429) (669,461) CASH FLOW FROM INVESTING ACTIVITIES: Sale of investments Interest received Net Cash Provided (Used) In Investing Activities Net increase (decrease) in cash and Cash equivalents Cash and cash equivalents -beginning of year Cash And Cash Equivalents- end of year Cash at end of year consists of: Cash and cash equivalents Restricted cash -customer deposits Total Cash and cash equivalents - - - - 1,015,930 15,563 53,649 2,500 29,101 100,813 173,121 15,563 53,649 2,500 29,101 100,813 1,189,051 1,166,378 1,021,270 (48,309) 1,565,500 3,704,839 574,920 3,860,968 5,917,392 828,971 1,768,287 12,375,617 5,739,809 $ 5,027,345 $ 6,938,662 $ 780,662 $ 3,333,787 $ 16,080,456 $ 6,314,729 4,991,515 6,938,662 723,484 3,333,787 15,987,448 $ 6,314,729 35,830 - 57,177 - 93,007 - $ 5,027,345 $ 6,938,662 $ 780,662 $ 3,333,787 $ 16,080,456 $ 6,314,729 The notes to the financial statements are an integral part of this statement. 37 Net Cash Provided (Used) By Operating Activities $ 1,428,680 $ 1,677,104 $ (350,808) $ 2,707,479 $ 5,462,455 $ 55,331 CITY OF TUKWILA: 2016 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2016 Page 2 of 2 Governmental Foster Surface Total Activities Water Sewer Golf Water Enterprise Internal Utility Utility Course Utility Funds Service Funds RECONCILIATION OF NET OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating Income (Loss) $ 716,114 $ 942,611 $ (653,651) $ 1,779,294 $ 2,784,369 $ (697,840) Adjustments to reconcile operating income to net cash Provided (used) by operating activities: Depreciation 526,817 370,312 327,513 914,244 2,138,886 799,436 Asset (increase) decrease: Accounts receivable 36,928 159,281 2,448 (194,405) 4,252 62,311 Inventory and other - 8,944 8,944 (1,436) Deferred outflow of resources (increase) decrease (36,638) (34,395) (46,759) (69,191) (186,983) (26,438) Liability increases (decreases): Accounts payable 143,659 175,139 (2,130) 219,183 535,851 (93,833) Other liabilities 22,580 (5,224) (9,129) 6,126 14,353 Wages & benefits payable 10,234 (15,939) (19,374) (8,657) (33,736) 213 Deferred inflow of resources increase (decrease) 8,986 85,319 41,328 60,886 196,519 12,917 Total Adjustments 712,566 734,492 302,843 928,185 2,678,086 753,170 SCHEDULE OF NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES Capital assets acquired by contributed capital $ (390,795) $ (1,617) $ - $ - $ (392,412) $ Increase (decrease) in fair value of investment - - (18,661) Total Non Cash investing, Capital and Financing Activities $ (390,795) $ (1,617) $ $ - $ (392,412) $ (18,661) The notes to the financial statements are an integral part of this statement. 38 CITY OF TUKWILA: 2016 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF FIDUCIARY NET POSITON FIDUCIARY FUND DECEMBER 31, 2016 Firemen's Pension Agency Trust Fund Fund ASSETS: Cash and cash equivalents $ 427,867 $ 201,739 Investments 1,000,508 - Customer accounts - 55,543 Interest receivable 708 Total Assets 1,429,083 257,282 LIABILITIES: Accounts and other payables 257,282 Total Liabilities - 257,282 NET POSITION: 1,429,083 Held In Trust For Pension Benefits And Other Purposes $ 1,429,083 $ The notes to the financial statements are an integral part of this statement. 39 CITY OF TUKWILA: 2016 CAFR BASIC FINANCIAL STATEMENTS CITY OF TUKWILA, WASHINGTON STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUND FOR THE YEAR ENDED DECEMBER 31, 2016 Firemen's Pension Trust Fund ADDITIONS: Contributions from nonemployer entities: Fire Insurance Premiums Transferred in $ 66,360 Investment earnings 10,205 Total Additions 76,565 DEDUCTIONS: Benefit payments $ 60,488 Administrative expenses 3,500 Total Deductions 63,988 Change In Net Position 12,577 Net position - beginning 1,416,506 Net Position - ending $ 1,429,083 The notes to the financial statements are an integral part of this statement. 40 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS For the Year Ended December 31, 2016 NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting and reporting policies of the City of Tukwila conform to generally accepted accounting principles as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The City's significant accounting policies are described in this note. A. The Reporting Entity The City of Tukwila was incorporated on June 23, 1908, and operates under the laws of the State of Washington applicable to a non -charter optional code city with a Mayor/Council form of government. Tukwila is served by a Mayor and seven councilmembers, all elected at large to four-year terms. The City provides what are considered general government services including public safety, streets, parks, planning and zoning, permits and inspection, general administrative, water services, sanitary sewer collection, and storm drainage. The City of Tukwila has no component units (either blended or discretely presented) included in these statements. B. Basis of Presentation The City's basic financial statements consist of government -wide statements, including a statement of net position and a statement of activities, and fund financial statements which provide a more detailed level of financial information. Government -wide Financial Statements The statement of net position and the statement of activities report information on all of the nonfiduciary activities of the City. The activity of the internal service funds is eliminated to avoid "doubling up" revenues and expenses. The statements distinguish between governmental activities and business -type activities. The statement of net position presents the financial condition of the governmental and business -type activities of the City at year-end. The statement of activities presents a comparison between direct expenses and program activity of the City. Direct expenses are those specifically associated with a service, program, or department and therefore clearly identifiable to a particular function. Indirect costs are included in the program expense reported for individual functions and activities. The statement of activities reports the expenses of a given function offset by program revenues directly connected with the functional program. A function is an assembly of similar activities and may include portions of a fund or summarize more than one fund to capture the expenses and program revenues associated with a distinct functional activity. Program revenues include charges paid by the recipient of the goods or services offered by the program, grants and contributions that are restricted to meeting the operational or capital requirements of a particular program and interest earned on grants that is required to be used to support a particular program. For identifying to which function program revenue pertains, the determining factor for charges for services is which function generates the revenue. For grants and contributions, the determining factor is to which functions the revenues are restricted. 41 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Revenues which are not classified as program revenues are presented as general revenues of the City, and certain limited exceptions. The comparison of direct expenses with program revenues identifies the extent to which each business segment or governmental function is self-financing or draws from the general revenues of the City. Fund Financial Statements During the year, the City segregates transactions related to certain City functions or activities in separate funds in order to aid financial management and to demonstrate legal compliance. Fund financial statements are designed to present financial information of the City at this more detailed level. The focus of governmental and enterprise fund financial statements is on major funds. Each major fund is presented in a separate column. Non -major funds are aggregated and presented in a single column. Internal service funds are combined and the totals are presented in a single column on the face of the proprietary fund statements. Fiduciary funds are reported by type. While fiduciary funds are excluded from the government -wide statements, they are included in the fund financial statements. C. Fund Accounting The accounts of the City are organized on the basis of funds; each of which is considered a separate accounting entity. Each fund is accounted for with a separate set of self -balancing accounts that are comprised of assets, deferred outflow of resources, liabilities, deferred inflow of resources, fund equity, revenues and expenditures or expenses, as appropriate. The City's resources are allocated to - and accounted for - in individual funds according to the purpose for which they are spent and how they are controlled. There are three categories of funds: governmental, proprietary and fiduciary. Governmental Funds All governmental funds are accounted for on a "flow of current financial resources" measurement focus. Their reported fund balance is considered a measure of "available spendable resources." Governmental fund operating statements focus on measuring changes in current financial position, rather than net income; they present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in fund balance. The following are the City's major governmental funds: • The general fund accounts for all the City's financial resources except those required by statute or generally accepted accounting principles to be accounted for in another fund. As is the case with most municipalities, the general fund is the largest and most important accounting entity of the City. The general fund receives the bulk of its revenues from local taxes, followed by State shared revenues, service charges, and other income. • The Arterial Street fund was established in accordance with RCW 82.36.020 for the administration of the State -levied motor vehicle half -cent gasoline tax distributed to Tukwila and is used primarily to account for capital arterial street projects. In addition to the State -levied motor vehicle gasoline tax, other revenue includes state and federal grants, impact fees, and transfers in from the general fund. • The Local Improvement District (LID) #33 accounts for assessments related to the LID and provides payment to the Fiscal Agent for principal and interest on bonds issued in November 2013. • The Public Safety Plan fund was established in 2016 after voters approved a $77.4 million bond measure to construct a justice center, rebuild 3 fire stations, and provide for life -cycle replacement of fire department apparatus and equipment. The other governmental funds of the City, account for the proceeds of specific revenue sources that are segregated to ensure that expenditures are made exclusively for qualified purposes. 42 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Proprietary and Internal Service Funds Proprietary and internal service funds are accounted for on a "flow of economic resources" measurement focus. This means all assets and all liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets. Proprietary fund operating statements present increases (revenues and gains) and decreases (expenses and losses) in net position. Proprietary funds measurement focus is based upon determination of net income, financial position, and cash flows. Proprietary and internal service funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the City's enterprise and internal service funds are charges to the City's customers for sales and services. Operating expenses for the enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. As described further below, there are two fund types in this category - enterprise and internal service. Restricted assets shown in the government -wide financial statements and the proprietary funds balance sheet include monies reserved for payment of revenue bond debt, and deposits held for utility and golf course customer accounts. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. The City's enterprise funds account for utility and golf course operations, which are self -supported through user charges. The utilities are financed and operated like a private business enterprise, which requires periodic determination of revenues earned, expenses incurred, and net income for capital maintenance, public policy, management control and accountability. The City's major enterprise funds are as follows: • Water Utility Fund accounts for operations and capital improvements to provide water services to the City. • Sewer Utility Fund accounts for operations and capital improvements to provide sanitary sewer services to the City. • Foster Golf Course Fund is used to account for the operation, maintenance, and improvements of the municipal golf course facility. • Surface Water Utility Fund accounts for the operations and capital improvements for the City's storm drainage and surface water management function. The City has three internal service funds. The Equipment Rental Fund is used to account for the costs of maintaining and replacing all City vehicles and auxiliary equipment. All equipment costs, including depreciation, are factors in calculating the rates charged to each user department. The Insurance and Insurance — LEOFF I Funds are used to account for the costs of the City's self-insured medical plan for active employees and retired LEOFF I employees respectively. Medical and dental costs for covered employees are charged to the respective user departments. All premiums, medical and dental costs and ancillary charges are included. Fiduciary Funds Fiduciary funds account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governments, and other funds. The City has two fiduciary funds, Firemen's Pension Trust Fund and Agency Fund. The Firemen's Pension Trust Fund is accounted for in essentially the same manner as proprietary funds. The agency fund is custodial in nature (assets equal liabilities) and does not involve a measurement of results of operations. Fiduciary funds are excluded from the government -wide financial statements. 43 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS D. Measurement Focus Government -wide Financial Statements The government -wide financial statements are prepared using the economic resources measurement focus. All assets, deferred outflow of resources, liabilities, and deferred inflow of resources associated with the operation of the City are included on the Statement of Net Position. Fund Financial Statements All governmental funds are accounted for using a flow of current financial resources measurement focus. With this measurement focus, only current assets, current liabilities, and deferred inflow of resources generally are included on the balance sheet. The statement of revenues, expenditures and changes in fund balances reports on the sources (i.e., revenues and other financing sources) and uses (i.e., expenditures and other financing uses) of current financial resources. This approach differs from the manner in which the government activities of the government -wide financial statements are prepared. Governmental fund financial statements therefore include a reconciliation with brief explanations to better identify the relationship between the government -wide statements and statements for governmental funds. Like the government -wide statements, all proprietary and internal service fund types are accounted for on a flow of economic resources measurement focus. All assets and all liabilities associated with the operation of these funds are included on the statement of net position. The statement of changes in activities presents increases (i.e., revenues) and decreases (i.e., expenses) in net total position. The statement of cash flows provides information about how the City finances and meets the cash flow needs of its proprietary activities. Fiduciary funds are reported using the economic resources measurement focus. E. Basis of Accounting Basis of accounting refers to the recognition of revenues and expenditures or expenses in the accounts and reporting them in the financial statements. Government -wide financial statements are prepared using the accrual basis of accounting. Governmental funds use the modified accrual basis of accounting. Proprietary and fiduciary funds use the accrual basis of accounting. Revenues — Exchange and Non -Exchange Transactions Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is recorded on the accrual basis when the exchange takes place. The modified accrual basis of accounting is followed in all governmental funds of the City. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual, i.e., both measurable and available. "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to pay current liabilities. For the City, available means expected to be received within sixty (60) days of year-end. The primary accrued revenues that meet these criteria are sales, real estate, and utility taxes. Non-exchange transactions, in which the City receives value without directly giving equal value in return, include property taxes, sales and use taxes, admission taxes, gambling taxes, utility taxes, hotel/motel taxes, grants, entitlements, and donations. These revenues are on an accrual basis. On the accrual basis, the revenue is recognized in the period in which the income is earned. Revenue from property taxes is recognized in the fiscal year for which the taxes are levied. (See Note 4 on receivables). 44 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Other Revenue Sources Revenue sources which are not considered to meet the measurable and available criteria for revenue recognition include licenses and permits, fines and forfeitures, and other miscellaneous revenues since they are generally not measurable until received. Under the modified accrual basis, expenditures are recorded when the fund liability is incurred, except for principal and interest on general long-term debt and vacation and sick pay which are recorded when paid. As a general rule the effect of interfund activity has been eliminated from the government -wide financial statements via the process of consolidation. Internal service fund and similar internal activity has been eliminated from the government -wide statement of activities so expenses are not reported twice. Exceptions to this general rule are payments for interfund services provided and used, such as between the City's water, sewer, and surface water functions and various other functions of the City, which are not eliminated in the process of consolidation. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported on the government -wide statements as program revenues include, charges to customers or applicants for goods, operating grants and contributions, and capital grants and contributions. General revenues include all taxes. The accrual basis of accounting is followed in all proprietary funds. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when incurred. All assets and liabilities are recorded in the fund. F. Budgets and Budgetary Accounting The City of Tukwila budgets its funds in accordance with the Revised Code of Washington 35A.33. In compliance with the code, biennial budgets are adopted for the general fund and special revenue funds. For governmental funds, there are no substantial differences between the budgetary basis and generally accepted accounting principles. Budgetary accounts are integrated in fund ledgers for all budgeted funds, but the financial statements include budgetary comparisons for biennially budgeted governmental funds only. Budgets established for proprietary and fiduciary funds are "management budgets" and are not legally required to be reported and, as such, are not reported in the CAFR. The biennial appropriated budgets are adopted at the fund level and the budgets constitute the legal authority for expenditures at that level. Subsidiary revenue and expenditure records are used to compare the budgeted amounts with actual revenues and expenditures. As a management control device, the subsidiary ledgers monitor expenditures for individual functions and activities by object class. Any unexpended appropriation balances lapse at the end of the biennium. The City of Tukwila's budget procedures are mandated by RCW 35A.33. The steps in the budget process are as follows: 1) Prior to November 1 on even numbered years, the Mayor submits a proposed budget to the City Council. This budget is based on priorities established by the Council and estimates provided by the City departments during the preceding months, and balanced with revenue estimates made by the Mayor. 2) The City Council conducts public hearings on the proposed budget in November. Public hearings are also held in December, if necessary. 3) The Council makes its adjustments to the proposed budget and adopts by ordinance a final balanced budget no later than December 31. 4) The final operating budget as adopted is published and distributed within the first month of the following year. Copies of the budget are made available to the public. The City Council must approve, by ordinance, any amendments that increase the total for the fund. Budget amounts presented in the financial statements include both the original amounts and the final amended budget as approved 45 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS by the City Council. The final budget is the original budget adjusted by all reserves, transfers, allocations, supplemental appropriations, and other legally authorized changes applicable to the fiscal year. Expenditure Categories General Government Includes administration, finance, municipal court, attorney, and city clerk activities. Public Safety Includes all police and fire activities. Physical Environment Includes expenditures for the public works activities not chargeable to the enterprise funds. Transportation Includes all street and arterial street maintenance and construction. Economic Development Reflects the planning and building inspection activities. Culture and Recreation Includes the parks and recreation activities. G. Assets, Liabilities, and Fund Equity Cash and Cash Equivalents The government's cash and cash equivalents are considered to be cash on hand, demand deposits, and short- term investments with original maturities of three months or less from the date of acquisition. Investments Investments are held separately by each fund with interest earned directly for the benefit of each fund. Investments are reported in the financial statements at fair value, based on quoted prices in accordance with GASB Statement No. 72, Fair Value Measurement and Application. Washington State statutes provide for the City to hold investments consisting of obligations of the Federal Government, repurchase agreements, prime banker's acceptances, and time certificates of deposit. Additional deposit and investment information is presented in Note 2. Notes Receivable Notes receivable in the enterprise funds consists of sewer connection fees due from customers to the utility. In the governmental funds, it consists of the special assessment as well as developer agreements. The City currently has two developer agreements included in the financial statements. Amounts Due to and From Other Funds and Governments, Interfund Loans and Advances Receivable Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "interfund loans receivable/payable" or "advances to/from other funds." Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances." As of December 31, 2016, there are no residual balances outstanding between the governmental activities and business -type activities. The non-current portion of interfund loans in the general fund and advances between funds, as reported in the fund financial statements, are offset by a fund balance nonspendable account in applicable governmental funds to indicate they are not available for appropriation and are not expendable available financial resources. See Note 4 on interfund transactions. 46 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Special Assessments Special assessments are amounts levied against benefited properties to recover costs associated with the construction of Local Improvement District (LID) projects. A lien is recorded against benefited properties until the assessment has been paid. Special assessments receivable represent all outstanding assessment amounts including current assessments billed but not collected, delinquent assessments unpaid at year-end, and special assessment amounts due in future years, which are recorded in a deferred inflow of resources account in the fund financial statements. Since special assessments are secured by liens against related properties, no allowance for uncollectible amounts is made. Inventories Inventory is defined as items purchased for resale to external customers or other City departments, or supplies and small tools used in normal operations that are considered material in amount. The inventory amount on this year's financial statements reflect only those items that will be resold. The inventory is valued at average cost using the consumption method and there is a physical inventory count taken annually at year-end. Governmental funds use the purchase method whereby inventory items are considered expenditures when purchased. Real Property Held for Resale Governmental funds do not report property, plant, and equipment because such assets normally are used in operations, and therefore will never be available for spending (they are not financial assets). However, specific items of property occasionally are acquired with the intent of sale. Examples include foreclosure properties, redevelopment properties, and donated assets held for resale rather than retained for use in operations. Governments often acquire redevelopment properties to attract private -sector investment in an economically depressed area and are willing to sell the property at a price that may be far less than the government's cost to acquire and improve the property. Since assets held for sale can never be reported at an amount higher than their net realizable value, any cost in excess of net realizable value must be excluded from the property value reported in the financial statements. The City has acquired a number of redevelopment properties in its urban renewal area along Tukwila International Boulevard. For the Tukwila Village project, property acquisition began in 1999. The City has acquired and cleared a total of 5.76 acres. In 2012 the City executed an agreement to develop and sell the property and the first phase is currently under construction. As part of a crime -reduction project, the City purchased three crime -ridden motels in 2014 plus another motel and retail shop in 2015. All structures on those properties were demolished in 2016 and the vacant land will be sold for redevelopment. All redevelopment properties are reported at net realizable value in the financial statements. Deferred Outflows /Inflows of Resources Deferred outflow of resources represents a consumption of net position by the government that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has two items that qualify for reporting in this category. The City reports a deferred outflow related to pension and a deferred loss on refunding water/sewer bonds. Deferred inflow of resources represents an acquisition of net position by the government that applies to a future period(s) and will not be recognized as an inflow of resources (revenue) until that time The City has two items that qualify for reporting in this category. The City reports business taxes that are received in advance and a deferred inflow related to pensions. 47 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Capital Assets and Depreciation The accounting and reporting treatment applied to the capital assets associated with a fund are determined by its measurement focus. Capital assets acquired in governmental funds are accounted for as expenditures in the fund when the asset is purchased. These assets are reported in the governmental activities column of the government - wide statement of net position but are not reported in the fund financial statements. Capital assets utilized by the proprietary funds are reported both in the business -type activities column of the government -wide statement of net position and in the respective funds. All capital assets are capitalized at cost (or estimated historical cost) and updated for additions and retirements during the year. Where historical cost is not known, assets are recorded at estimated historical costs. Donated assets are recorded at acquisition value at time of acquisition. The City maintains a capitalization threshold of five thousand ($5,000) dollars. The City's infrastructure consists of roads, bridges, storm sewers, water and sewer distribution and collection systems. Improvements are capitalized while the costs of normal maintenance and repairs that do not add to the value of the asset or materially extend an asset's life are not. Depreciation is computed using the straight line method over estimated service lives, as follows: Asset Estimated Service Life Buildings 25 to 50 years Non -Building Improvements 25 to 50 years Machinery and Equipment 2 to 50 years Intangibles 2 to 50 years Infrastructure 25 to 50 years See Note 6 for additional information on capital assets. Other Liabilities Other liabilities include retainage, deposits and the incurred -but -not -reported (IBNR) claims and claim reserve for the self-insured healthcare funds. The self-insurance fund for active employees includes an IBNR liability of $743,300 determined using actuarial methods. This liability is multiplied by a factor of 2.5 to meet the City's financial goal of maintaining reserves at 1 x IBNR for claim fluctuations plus 1.5 x IBNR for a claims reserve yielding a total liability of $1,858,250. The self-insurance fund for LEOFF 1 retirees includes an IBNR liability of $76,500 and total liability of $191,250 utilizing the same calculations as the active employees self-insurance fund. Compensated Absences City policy and labor contracts with City of Tukwila employees call for the accumulation of vacation and sick leave. At termination of employment, employees with the required length of service may receive cash payments for all accumulated vacation leave to a maximum of 384 hours. Sick leave termination benefits are based on a percentage of accumulated sick leave up to a maximum of 180 hours. The payment is based on current wages at termination. The entire compensated absence liability, which includes salary and wages as well as related taxes, is reported on the government -wide financial statements. In the enterprise funds, the entire amount of compensated absences is reported as a fund liability. This reporting format is in compliance with GASB Statement No. 16. The current portion reported on the schedule of long-term liabilities is calculated using the last -in -first -out (LIFO) approach. Anticipated subsequent yearly usage is used to determine the current portion of the liability. There is 48 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS no current portion to report when the anticipated leave usage is less than the anticipated leave to be accrued during the next year. Long -Term Obligations In the government -wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business - type activities, or proprietary fund type statement of net position. Bond premiums and discounts are amortized over the life of the bonds using the straight line method. Bonds payable are reported net of the applicable bond premium or discount. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as expenses. In the fund financial statements, governmental fund types recognize bond premiums and discounts during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Long-term debt outstanding at year-end is outlined in Note 10. Fund Balance/Net Position A fund balance represents the difference between the current assets and current liabilities plus deferred inflows. The City restricts those portions of fund balance which are legally segregated for a specific future use or which do not represent available, spendable resources and therefore are not available for general appropriation or expenditure. Net position represents the difference between assets plus deferred outflow of resources and liabilities plus deferred inflow of resources. Net position invested in capital assets, net of related debt, consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowing used (i.e., the amount that the City has spent) for the acquisition, construction, or improvement of those assets. Net position is reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. The remaining balance is reported as unrestricted. In 2012 and again in 2015, the City revised the Reserve Policy which addresses the various types of the City's operating and restricted use funds. The objectives of this Policy are to establish, attain, and restore minimum fund balances, including self-insurance health care reserve funds, and specified review and reporting of fund balances. At the close of each fiscal year, the General Fund balance shall equal or exceed 18%, and the Contingency Reserve Fund balance shall each equal or exceed 10%, of the previous year General Fund revenue, exclusive of significant non-operating, non-recurring revenues such as real estate sales or transfers in from other funds. Additionally, 10% of the previous year one-time revenues shall be set aside in a one-time revenue reserve within the Contingency Reserve fund. Enterprise funds, at the close of each fiscal year, the unrestricted fund balance shall equal or exceed 20% of the previous year revenue, exclusive of non-operating, non-recurring revenues such as real estate sales, transfers in from other funds or debt proceeds. The City shall maintain a reserve balance in each of its self-insured health care funds an amount equal to 2.5 times or 250%, of the actuarially determined IBNR liability. Fund Balance Components The fund balance amounts for governmental funds have been classified in accordance with GASB Statement No. 54 and are reported as nonspendable, restricted, committed, assigned or unassigned. 49 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS • Nonspendable fund balance includes items that cannot be spent. This includes activity that is not in a spendable form (inventories, prepaid amounts, long-term portion of loans/notes receivable, or property held for resale unless the proceeds are restricted, committed or assigned) and activity that is legally or contractually required to remain intact, such as a principal balance in a permanent fund. The general fund's nonspendable fund balance of $1.1 million is the outstanding balance of a loan from the general fund to the Tukwila Metropolitan Park District. The facilities fund, reported in the Other Governmental Funds column in the balance sheet, has a nonspendable fund balance of $7.65 million representing real property held for resale. At this time, there is no constraint on how the eventual proceeds will be spent. • Restricted fund balances have constraints placed upon the use of the resources either by an external party or imposed by law through a constitutional provision or enabling legislation. • Committed fund balances can be used only for specific purposes pursuant to constraints imposed by a formal action in the form of ordinances and resolutions of Tukwila Councilmembers, the City's highest level of decision-making authority. This formal action is the passage of an ordinance by City Council creating, modifying, or rescinding an appropriation. These committed amounts cannot be used for any other purpose unless Council removes or changes the specified use by taking the same type of action it employed to previously commit those amounts. • Assigned fund balance includes amounts that are constrained by the City's intent to be used for a specific purpose, but are neither restricted nor committed. Assigned also includes a contingency balance authorized via the City's Reserve Fund Balance policy. Intent of use and authority to assign amounts is determined through the budgetary process, either during adoption or amending, and the Finance Director has final authority. • Unassigned fund balance is the residual amount not included in the four categories described above. Also, any deficit fund balances within the other governmental fund types are reported as unassigned. Each fund has been analyzed to classify the fund balance in accordance with GASB Statement No. 54. Funds are created by the City Council and money is authorized to be transferred to the fund for a particular purpose. At this point, balances in these funds are at least committed, and may be further restricted depending on whether there is an external party, constitutional provision, or enabling legislation constraint involved. The City applies restricted resources first when an expense is incurred for purposes of which both restricted and unrestricted net position is available in the governmental funds. When expenditures are incurred for purposes, for which unrestricted (committed, assigned, and unassigned) resources are available, and amounts in any of these unrestricted classifications can be used, it is the City's policy to spend committed resources first, the assigned second, followed by unassigned. Operating Revenues and Expenses Operating revenues are generated directly from the primary activity of the proprietary funds. For the City, these revenues are service fees for utilities, charges for services for the use of the golf course and the internal use of vehicles, computers, and facilities. Operating expenses are necessary costs incurred to provide the good or service that are the primary activity of each fund. All other revenues and expenses are classified as non-operating including investment earnings, interest expense and the gain or loss on the disposition of capital assets. Contributions of Capital Contributions of capital in proprietary fund financial statement arise from outside contributions of capital assets, for example, developers, and grants or outside contributions of resources restricted to capital acquisition and construction. It also includes water and sewer connection charges. 50 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Indirect Cost Allocation Indirect costs, also referred to as overhead costs, consist of the cost of central services or support functions shared across departments. They include accounting, human resources, payroll, information technology, janitorial services, and others. These services are paid through the general fund and charged back to the proprietary funds that directly benefit from them. In prior years, the indirect costs allocated to the proprietary funds were recorded as a transfer out of the proprietary funds and a transfer in to the general fund. Pursuant to guidance by the Washington State Auditor's Office, Budgeting, Accounting, and Reporting System (BARS), the indirect costs allocated to the proprietary and other funds of $2,233,476 for 2016 are reported as a reduction of general government expenditures on the Statement of Activities rather than as transfers in and transfers out. Interfund Activity Exchange transactions between funds are reported as revenues in the seller funds and as expenditures/expenses in the purchaser funds. On the government -wide statement of activities, the exchange transactions between the internal service funds and the user funds are eliminated. Flows of cash or goods from one fund to another without a requirement for repayment are reported as interfund transfers. Interfund transfers are reported as other financing sources/uses in governmental funds and after non-operating revenues/expenses section in proprietary funds. Transfers between governmental and business -type activities on the government -wide statement of activities are reported separately after general revenues. Transfers between funds reported in the governmental activities column are eliminated. Transfers between funds reported in the business type activities column are eliminated. Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. Risk Management It is the City of Tukwila's policy to self -insure for unemployment benefits because of the insignificant liability. Medical and dental self-insurance coverage is also provided for employees. All buildings, City equipment, and City vehicles are insured by carriers for property coverage at replacement value. The City of Tukwila is a member of the Washington Cities Insurance Authority (WCIA) as of January 1, 1984. WCIA is an organization of Washington entities numbering 168 as of December 31, 2016. WCIA provides pooled self- insurance coverage for general liability, vehicle liability, false arrest, and errors and omissions. See Note 13 for additional information on risk management. H. Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of all state sponsored pension plans and additions to/deductions from those plans' fiduciary net position have been determined on the same basis as they are reported by the Washington State Department of Retirement Systems. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. I. Changes in Reporting Effective for fiscal year 2016 reporting, the City adopted the following new standard issued by the Governmental Accounting Standards Board (GASB): 51 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS GASB Statement No. 72 Fair Value Measurement and Application, defines fair value and provides guidance for determining a fair value measurement for financial reporting purposes. NOTE 2 —DEPOSITS AND INVESTMENTS The City maintains a cash and investment pool available for use by all funds. Interest earned on pooled investments is recorded in the participating funds. Investments are also held separately by several of the funds, with interest earned directly for the benefit of each fund. Cash and Cash Equivalents Custodial credit risk is the risk associated with the failure of a depository financial institution. In the event of a depository financial institution's failure, it is the risk that the City would not be able to recover its deposits or collateralized securities that are in the possession of the outside parties. The City minimizes custodial credit risk by following the restrictions set forth in state law. At year-end, the carrying amount of the City's cash balance held in banks was $25,841,328. Of the bank balance, $250,000 was covered by Federal depository insurance and the Washington Public Deposit Protection Commission (WPDPC) insured the remainder. The City also maintains imprest funds totaling $14,950. The City participates in the State Treasurer's Investment Pool, which is a 2a7 -like unrated pool, overseen by the State Treasurer's Office. A 2a7 -like -pool is an external investment pool that is not registered with the SEC as an investment company but nevertheless has a policy that it will, and does, operate in a manner consistent with the SEC's Rule 2a7 of the Investment Company Act of 1940. Rule 2a7 allows SEC -registered mutual funds to use amortized cost, which approximates fair value, to report net assets and compute share prices. The fair value of the City's position in the pool is the same as the value of the pool shares. Because of its highly liquid nature, the Pool funds are considered cash equivalents. Investments The City's investment portfolio includes certificate of deposits insured by the Washington State Public Depository Commission, U.S. Government Agency Notes, and municipal bonds issued by state and local agencies. These investments are reported at fair value based on quoted market prices. Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Also, the Firemen's Pension Fund is authorized to invest in stocks, bonds, and mutual funds. 52 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS At December 31, 2016, the City had the following deposits and investments. Certificates of deposits are measured at amortized cost, agencies and municipal bonds are measured at fair value. SCHEDULE OF INVESTMENTS BY MATURITY Maturity Credit Fair Date Rating Value Certificates of Deposit: Sound Community Bank Bank of Washington Total Certificate of Deposits U.S. Government Agency Notes: Federal Home Loan Mtg Corp Federal Home Loan Mtg Corp Federal Farm Credit Bank Federal Farm Credit Bank Total U.S. Agency Notes 3/4/2017 5/1/2016 5/26/2017 Aaa / AA+ 5/25/2018 Aaa / AA+ 12/21/2018 Aaa / AA+ 12/27/2019 Aaa / AA+ $ 3,201,903 250,000 3,451,903 1,000,508 996,086 1,000,015 1,000,203 3,996,812 Municipal Bonds: Washington State Biomedical Research: Revenue - Facilities 7/1/2017 Aa1 / AA+ 507,915 Marysville Washington: Limited General Obligation 12/1/2017 Aa2 155,138 Skagit County, Washington: Limited General Obligation 12/1/2017 Aa2 370,490 Washington State Biomedical Research:Revenue - Facilities 7/1/2019 Aa1 / AA+ 537,765 Port ofAnacortes, Washington: Limited General Obligation 9/1/2020 Aa3 357,986 Douglas County School District, Washington: Unlimited General Obligation 12/1/2020 Aa1 1,221,237 Total Municipal Bonds TOTAL INVESTMENTS 3,150,530 $ 10,599,245 No credit rating with certificate of deposit accounts; accounts are insured by the Public Depository Protection Commission. 53 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS RECONCILIATION OF ALL CASH, DEPOSITS AND INVESTMENTS CASH & CASH RESTRICTED RESTRICTED SUMMARY BY FUNDS EQUIVALENTS CASH INVESTMENTS INVESTMENTS TOTAL Governmental Funds General Fund $ 12,278,557 $ 8,406 $ 3,053,018 $ $ 15,339,981 Arterial Street 1,667,647 2,371,097 4,038,744 Local Improvement District #33 898,722 - - 898,722 Public Safety Plan 114,324 35,503,363 - 1,000,203 36,617,890 Facilities Urban Renewal - - Other Governmental Funds 6,542,203 503,475 - 7,045,678 Proprietary Funds Water 4,991,515 35,830 2,134,587 7,161,933 Sewer 6,938,662 - 507,915 7,446,577 Foster Golf Course 723,484 57,177 - 780,662 Surface Water 3,333,787 - - 3,333,787 Internal Service Funds 6,314,729 - 2,903,014 9,217,744 Total as Reported on Statement of Net Position 43,803,631 38,479,349 8,598,534 1,000,203 91,881,717 Firemen's Pension Trust Fund 427,867 1,000,508 1,428,375 Agency Fund 201,739 - 201,739 Total Cash, Cash Equivalents and Investments $ 43,803,631 $ 39,108,955 $ 9,599,042 $ 1,000,203 $ 93,511,831 SUMMARY BY TYPE: Cash and Cash Equivalents: Local Government Investment Pool Money market account Cash on hand Cash in bank -book balance Total cash and cash equivalents Investments: Certificates of deposit U.S. Government Agency Notes Municipal bonds Total investments $ 43,001,758 14, 219, 309 14,950 25, 676, 569 82,912,586 3,451,903 3,996,812 3,150, 530 10, 599, 245 Total Cash, Cash Equivalents, and Investments $ 93,511,831 54 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Restricted Assets - Governmental Cash & cash equivalents Deposits Drug Seizure funds - federal portion Debt Service Impact fees Investments $ 35, 503, 363 8,406 503,475 2,213,705 157,392 1,000,203 Restricted Assets -Governmental $ 39,386,544 Restricted Assets - Business -Type Customer Deposits -Water Utility Customer Deposits -Golf Course Lease Deposits -Golf Course $ 35,830 42,177 15,000 Restricted Assets -Business -Type $ 93,007 Total Restricted Assets $ 39,479,552 Fair Value Measurement The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. • Level 1 inputs are quoted prices in active markets for identical assets. These valuation inputs are considered most reliable. • Level 2 inputs are quoted prices for similar assets, quoted prices for identical or similar assets in markets that are not active, or other observables. These valuation inputs are considered to be reliable. • Level 3 inputs are significant unobservable inputs and are considered to be the least reliable. The City has the following recurring fair value measurements as of December 31, 2016: Fair Value Measurements Using Investments by Fair Value Level US Government Agencies Municipal Bonds Total $ 3,996,812 3,150, 530 Quoted Prices in Active Markets for Identical Assets (Level 1) $ 3,996,812 Significant Other Observable Inputs (Level 2) $ 3,150, 530 Significant Unobservable Inputs (Level 3) Total Investments by Fair Value Level $ 7,147,342 $ 3,996,812 $ 3,150, 530 55 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Interest Rate Risk Interest rate risk is the risk that changes in interest rates of debt investments will adversely affect the fair value of an investment. As a means of limiting its exposure to fair value losses arising from rising interest rates, the City's investment policy limits at least half of the City's cash and investment portfolio to maturities of less than one year. Investment maturities are limited as follows: 1) At the time of investment, a minimum of thirty percent (30%) of the cash and investment portfolio will be comprised of investments maturing or available within one year. 2) At the time of investment, eighty percent (80%) of the portfolio will be comprised of investments maturing or available within five (5) years and no instruments shall have a maturity exceeding ten (10) years, except when compatible with a specific fund's investment needs. 3) The average maturity of the portfolio shall not exceed three and one half (3 1/2) years or forty-two (42) months. The City uses the weighted average maturity method to manage interest rate risk. Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State statutes and the City's investment policy limit the types of securities authorized for investment by the City. The principal governing statutes are RCW 39.59 and RCW 39.60. The Finance Director may further restrict eligible investments by this policy at his/her discretion. Authorized investments include (but are not limited to): 1) U.S. Treasury Securities. 2) U.S. Agency Securities (i.e., obligations of any government-sponsored corporation eligible for collateral purposes at the Federal Reserve). 3) Certificates of Deposit, Money Market Deposit Accounts and savings deposits with qualified depositories within statutory limits as promulgated by the WPDPC at the time of investment. 4) Bankers Acceptances (BA's) purchased on the secondary market with a rating of A-1, P-1, its equivalent or better. 5) General Obligation Bonds of a state or local government which have at the time of the investment one of the three highest credit ratings of a nationally -recognized rating agency. 6) The Washington State Local Government Investment Pool (LGIP). As of December 31, 2016, the City's investments in municipal bonds were rated Aaa to Aa3 by Moody's Investor Service. Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of an investment in a single issuer. The City of Tukwila diversifies its investments by security type and institution as described below: 1) No more than fifty percent (50%) of the City's cash and investment portfolio, at the time of purchase, shall be in any single financial institution. 2) Except, that no more than seventy-five percent (75%) of the City's portfolio, at the time of purchase, shall be invested in the Washington State Local Government Investment Pool, and 56 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS 3) No more than seventy-five percent (75%) of the City's portfolio, at the time of purchase, shall be invested in U.S. Treasury or Agency securities. NOTE 3 — RECEIVABLES Taxes receivable consists of property, sales and use, gambling, leasehold, and hotel/motel taxes. Customer accounts receivable consists of amounts owed by private individuals or organizations for goods and services provided. Uncollectible amounts are considered immaterial and the direct write-off method is used. Customer accounts receivable also includes the current portion of special assessments due from property owners within Local Improvement District No. 33. Other types of accounts receivable include utility taxes due from private organizations and customer accounts receivable for amounts owed which billings have not been prepared. Governmental Business -Type Activities Activities Total Taxes Receivable Property $ 198,515 $ $ 198,515 Sales & Use 3,639,652 3,639,652 Real Estate Excise Tax 986,711 986,711 Utility Tax 757,438 757,438 Admission/Gambling/Parking/Other 1,225,290 836 1,226,126 Total Taxes Receivable 6,807,605 836 6,808,442 Customer Receivable Miscellaneous Utility Accounts Total Customer Receivable 167,097 2,582 1,664,695 169,678 1,664,695 167,097 1,667,277 1,834,373 Interest 44,695 10,740 55,435 Notes due within one year 206,920 206,920 Total Receivables $ 7,226,317 $ 1,678,853 $ 8,905,170 Property Taxes Receivable The County Treasurer acts as an agent to collect property taxes levied in the County for all taxing authorities. Collections are distributed daily via wire transfer. January 1St February 14th April 30th May 31st October 31st Property Tax Calendar Taxes are levied and become an enforceable lien against properties. Tax bills are mailed. First of two equal installment payments is due. If taxes are less than $50, full payment is due. (RCW 84.56.020) Assessed value of property established for next year's levy at 100 percent of market value. Second installment is due. (RCW84.56.020) Assessed values are established by the County Assessor at 100% of fair market value. A revaluation of all property is required every two years. On May 31 of each year the assessed value of property is established for the next year's property tax levy. 57 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Property taxes levied by the County Assessor and collected by the County treasurer become a lien on the first day of the levy year and may be paid in two equal installments if the total amount is $50 or more. The first half of real property taxes is due on April 30 and the balance is due October 31. Delinquent taxes bear interest at the rate of 12% and are subject to additional penalties if not paid as scheduled. During the year, property tax revenues are recognized when cash is received. At year-end, unpaid property taxes are recorded as a receivable. Property tax receivables at year-end not expected to be collected within 60 days after the current period are reported as other unavailable revenue in the deferred inflow of resources section of the governmental funds financial statements. The tax rate for general City operations is limited to $3.60 per $1,000 of assessed value. An additional levy rate of $0.225 is available to the City because the City funds a Firemen's Pension Fund. The payment of principal and interest on limited tax (non -voted) bonds issued by the City is made from the general levy. Accordingly, the issuance of limited tax general obligation bonds has the effect of reducing property taxes available for the general operations of City government. State law also provides that the City's operating levy may not exceed 101% of the largest single levy since 1985. The State Constitution provides that the total of all taxes upon real and personal property by the State and all taxing entities, including the City, shall not in any year exceed 1% ($10 per $1,000) of the true and fair monetary value of such property. This limitation may be exceeded upon the approval of 60% of the City voters at an election in which the total vote exceeds 40% of the votes cast at the last general election. Washington State Constitution and Washington State law, RCW 84.55.010, limit the rate. The City's regular levy in 2016 was $2.710173 per $1,000 of assessed valuation of $5,736,568,228 for a total regular levy of $14,592,910. Due from Other Governments All receivables from other governments are recorded at year-end as amounts Due from Other Governmental Units. These amounts represent federal, state, and local reimbursement -type grants, and are reported as receivables and intergovernmental revenues in the year when the related expenditures are incurred. As of December 31, 2016, the majority represents grants. Notes Receivable Notes receivable for governmental activities consists of the long-term portion of the special assessments related to Local Improvement District (LID) No. 33. Special assessments are levied against certain property owners benefited by the improvement. The current portion of outstanding assessments is reported in the receivables category on the Statement of Net Position and consists of assessments which are due within one year and delinquent assessments from the prior year. Assessments are charged to property owners within the LID annually with payments due in October of each year. The repayment period for the assessments is 15 years with the first installment due in 2014 and the final installment due in 2028. The other note receivable category is related to developer agreements. There are three agreements with local developers to defer fire, parks and traffic impact fees, along with building permit fees as part of new, large construction projects. The first agreement defers the developer's obligation to pay the building permit fee on the Washington Place project until 2017. The second agreement, also related to the Washington Place project, defers the developer's obligation to pay traffic, park, and fire impact fees until 2018. Finally, the third agreement is for the Tukwila South project which defers $1.75 million in fire impact fees, with annual payments due each December from 2017 through 2031. Notes receivable for business—type activities consists of outstanding payment plans for sewer connection fees. The City designed and constructed sewer infrastructure in both the Allentown and Foster Point neighborhoods, which was previously on septic. The project was completed and accepted by City Council in 2007. The connection fees to be paid by property owners were established by ordinance, effective in August, 2007. One option given to 58 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS property owners was an installment payment plan. This option allowed owners to sign an agreement to have the connection charge added to their monthly water bill and repaid over 5, 10, or 15 years with a 4% annual interest rate. The balance reflects all principal outstanding at year-end. Governmental Business -Type Activities Activities Total Notes Receivable Special Assessments Developer Agreements Sewer Payment Plan $ 4,794,009 $ 3,929,907 $ 4,794,009 3,929,907 221,035 221,035 Total Receivables $ 8,723,916 $ 221,035 $ 8,944,951 NOTE 4 — INTERFUND TRANSACTIONS Interfund activity is the term used to describe similar financial transactions between funds of the primary government. Reciprocal interfund activity involves the exchange of equal or almost equal value between funds. Services Provided/Used — Transactions that would be treated as revenues, expenditures or expenses if they involve external organizations, such as buying goods and services in return for equal or almost equal value, are similarly treated when they involve other funds of the City of Tukwila. Interfund Loans/Advances — Loans between funds are classified as interfund loans receivable and payable or as advances to and from other funds in the fund statements. Interfund loans are offset by a reservation of fund equity. Interfund loans are subject to elimination upon consolidation. As of December 31, 2016, the City has no outstanding interfund loans or advances. Nonreciprocal interfund activity does not involve the exchange of equal or almost equal value between funds. Transfers — Transactions to support the operations of other funds are recorded as "Transfers" and classified with "Other Financing Sources or Uses" in the fund statements. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the government -wide financial statements. Contributions — Contributions to the capital of enterprise or internal service funds, transfers of capital assets between proprietary and governmental funds, transfers to establish or reduce working capital in other funds, and transfers of remaining balances when funds are closed are classified non-operating revenue. Reimbursements — Repayments from funds responsible for expenditures or expenses to the funds that initially paid for them. These transactions are expenditures/expense in the fund responsible and as a reduction of expenditure/expensed in the fund being reimbursed. 59 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Interfund transfers for the year were as follows: SUMMARY OF INTERFUND TRANSFERS Governmental Proprietary Funds Funds General Arterial Other GoVt Total Golf Fund Street Funds Governmental Course TOTAL Transfers In $ - $ 751,000 $ 3,274,831 $ 4,025,831 $ 300,000 $ 4,325,831 Transfers Out (4,325,831) - - (4,325,831) - (4,325,831) Net Transfers In (Out) $ (4,325,831) $ 751,000 $ 3,274,831 $ (300, 000) $ 300,000 $ The principal purposes for interfund transfers include interfund subsidies and transfers into debt service and capital projects funds. NOTE 5 — OPERATING LEASES During 2016 the City maintained operating lease agreements for City operated machinery and equipment. Tukwila leases office/ storage space for the purposes of the Records Center, Police Archives Storage, Police Gym, and the Neighborhood Resource Center. In addition the City leased a postage machine and copiers during 2016. Costs associated with these activities are as follows. SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS 2016 2017 2018 2019 2019 Records Center 1 Neighborhood Resource Center 2 Police Archives/Vehicle Storage Police Department Gym Postage Machines Office Equipment Total Lease Payments 29,400 21,300 10,800 - 55,752 57,424 59,144 60,916 58,652 14,652 15,091 15,542 16,012 6,780 6,948 6,948 4,055 50,600 49,947 33,262 16,863 13,311 $ 178,652 $ 140,210 $ 112,003 $ 93,791 $ 78,743 'Leasing of the Records Center expires on 5/31/2017. The tenant is responsible for the cost of utilities and maintenance of building, w hich is estimated, based on square footage and reconciled annually by the lessor. 2 Leasing of the Neighborhood Resource Center expires on 6/30/2017. 60 Governmental activity capital assets, net $ 205,816,154 $ 24,084,986 $ (23,753,914) $ 206,147,226 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS NOTE 6 — CAPITAL ASSETS Capital asset activity for the year ended December 31, 2016, was as follows: GOVERNMENTAL ACTIVITIES BEGINNING ENDING BALANCE BALANCE 1/1/2016 INCREASES DECREASES 12/31/2016 Governmental Activities Capital assets, not being depreciated: Land Construction in Progress Total capital assets, not being depreciated $ 35,312,814 $ 185,766 $ 26,133,182 7,612,974 (23, 681, 457) $ 35,498,580 10,064,699 61,445,996 7,798,740 (23,681,457) 45,563,279 Capital assets, being depreciated: Buildings 22, 671,409 1,759,932 Other Improvements 18,064,032 5,290,289 Machinery and Equipment 20,641,332 1,674,523 Infrastructure 173, 864, 754 15, 545, 969 (820, 820) 24,431,341 23,354,321 21,495,035 189,410,723 Total capital assets being depreciated 235,241,527 24,270,713 (820,820) 258,691,420 Less accumulated depreciation for: Buildings (11,959,413) (637,782) - (12,597,195) Other Improvements (12,130,873) (695,429) - (12,826,302) Machinery and Equipment (13,829,857) (1,302,447) 748,363 (14,383,941) Infrastructure (52,951,226) (5,348,809) (58,300,035) Total accumulated depreciation (90,871,369) (7,984,467) 748,363 (98,107,473) Total capital assets, being depreciated, net 144,370,158 16,286,246 (72,457) 160,583,947 61 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS BUSINESS -TYPE ACTIVITIES BEGINNING ENDING BALANCE BALANCE 1/1/2016 INCREASES DECREASES 12/31/2016 Business -Type Activities Capital assets, not being depreciated: Land $ 2,346,230 $ - $ - $ 2,346,230 Construction in Progress 7,247,963 2,737,449 (7,774,182) 2,211,229 Total capital assets, not being depreciated 9,594,193 2,737,449 (7,774,182) 4,557,459 Capital assets, being depreciated: Buildings Other Improvements Machinery and Equipment Total capital assets being depreciated 13, 284,419 80,641,041 2,189,468 7,743,350 24,164 (219, 743) (39,001) 13, 284, 419 88,164, 649 2,174, 631 96,114, 928 7,767,514 (258, 744) 103, 623, 698 Less accumulated depreciation for: Buildings (4,605,392) (371,794) - (4,977,186) Other Improvements (32,495,706) (1,718,780) 208,677 (34,005,809) Machinery and Equipment (1,781,937) (48,312) 41,730 (1,788,518) Total accumulated depreciation (38,883,035) (2,138,886) 250,407 (40,771,513) Total capital assets, being depreciated, net 57,231,895 5,628,630 (8,337) 62,852,187 Business -Type activity capital assets, net $ 66,826,088 $ $ 8,366,078 $ (7,782,519) $ 67,409,646 62 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS DEPRECIATION Depreciation expense for 2016 was charged to functions/programs as follows: Governmental Activities General Government $ 255,007 Public Safety 152,172 Physical Environment 688,014 Transportation 5,379,671 Economic Environment 2,907 Culture and Recreation 707,260 Capital assets held by the government's internal service funds are charged to the various functions based on their usage of the assets 799,436 Total 2016 depreciation expense - governmental activities $ 7,984,467 Business -type activities: Water Utility Sewer Utility Foster Golf Course Surface Water Utility Total 2016 depreciation expense - business -type activities NOTE 7 — JOINT VENTURES $ 526,817 370,312 327,513 914,244 $ 2,138, 886 A joint venture is a legal entity or other organization that results from a contractual agreement and that is owned, operated, or governed by two or more participants as a separate and specific activity subject to joint control in which the participants retain (a) an on-going financial interest or (b) an on-going financial responsibility. The City participates in two joint ventures. A summary of the City's investment in joint ventures follows. SUMMARY OF INVESTMENT IN JOINT VENTURES Equity in Equity in Capital Assets TOTAL Operations financed by Outstanding Investment in Debt Joint Ventures Valley Com $ 2,391,872 $ $ 2,391,872 SCORE 703,323 6,093,600 6,796,923 TOTAL $ 3,095,195 $ 6,093,600 $ 9,188,795 Valley Communications Center The "Valley Communications Center" was established August 20, 1976, when an Interlocal Agreement was entered into by the four original participating municipal corporations, including the cities of Renton, Kent, Auburn, and 63 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Tukwila. Federal Way was formally admitted during 2000. The agreement is sanctioned by the provisions and terms of the Interlocal Cooperation Act pursuant to RCW 39.34. The initial duration of the agreement was five years, and thereafter is automatically extended for consecutive five-year periods. The purpose of the joint operation, hereafter referred to as Valley Com, is to provide improved consolidated emergency communications (dispatch) services for police, fire, and medical aid, to the five participating cities and to several subscribing agencies. Separate agreements between Valley Com and the subscribing agencies have been executed, which set forth conditions of services and rates charged. The allocation of prorated financial participation among the five participating cities is the percentage of estimated dispatched calls attributed to each jurisdiction compared to the total estimated dispatched calls for the current 12 -month period ending December 31. The 2016 cost distribution for the five (5) participating cities is as follows: City Dispatchable Calls Percent of Total Renton 86,799 20.28% Kent 114,769 26.81% Auburn 96,406 22.52% Tukwila 37,375 8.73% Federal Way 92,658 21.65% Total 428,007 100.00% Valley Com is governed by an Administration Board composed of the Mayors from the five participating cities of Renton, Kent, Auburn, Tukwila, and Federal Way. The Board is responsible for the following functions: (1) Adopting an annual budget after review by participating legislative bodies; (2) Appointment and/or discharge of the Director; (3) Approves personnel policy and makes final decisions on all major policy changes; (4) Reviews and approves all contracts. In addition, an Operating Board was established and consists of two members of each participating City's Public Safety Departments, including the heads of such departments or their designees. The Operating Board performs the following functions: (1) Oversees the operation of Valley Com and advises and makes recommendations to the Administration Board; (2) Makes recommendation on Director selection; (3) Presents proposed policies and budgets to the Administration Board; (4) Approves disbursement of funds by the Director. The Director presents a proposed budget to the Operating Board on or before August 15 of each year. The proposed budget is then presented to the Administration Board by September 1 of each year. The Administration Board can make changes to the proposed Valley Com budget as it finds necessary, but final approval falls to the legislative body of each participating city, in accordance with the provisions of the Interlocal Agreement. The share of equity belonging to the five (5) participating cities is as follows: ITEM FEDERAL RENTON KENT AUBURN TUKWILA WAY TOTAL Equity January 1, 2016 $ 3,944,879 $5,538,893 $3,853,230 $2,139,261 $ 2,858,305 $18,334,568 Current Year Increase/(Decrease) 586,665 775,712 651,598 252,611 626,263 2,892,848 Equity December 31, 2016 $ 4,531,544 $6,314,605 $4,504,828 $2,391,872 $ 3,484,568 $21,227,416 Percent of Equity 21.35% 29.75% 21.22% 11.27% 16.42% 100.00% Liabilities are the responsibility of the five participating cities in direct proportion to their equity position. In August 1993, Valley Com entered into an interlocal cooperation agreement, pursuant to RCW 39.34 RCW, with the sub- regions of King County, Seattle, and the Eastside Public Safety Communications Agency. This agreement governs 64 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS the development, acquisition and installation of the 800 MHz emergency radio communications system funded by a $57 million King County levy approved in November 1992. This agreement provides that upon voluntary termination of any sub -region's participation in the system, it surrenders its radio frequencies, relinquishes its equipment and transfers any unexpended levy proceeds and associated equipment replacement reserves to another sub -region or consortium of sub -regions. Thus, in accordance with this agreement, the participating cities of Valley Com have no equity interest in Valley Com's 800 -MHz communications system. During 2000, the Valley Communications Center Development Authority was created to issue $12,758,000 in General Obligation Bonds to finance construction, equipment, and land for a new facility completed in 2002. Each of the five participating cities was responsible for one-fifth of the debt obligation, which originally was $2,551,600 per City. The basic agreement shall not be terminated until all bonds issued by Valley Communications Center Development Authority have been paid and retired. The final payment on the bonds was made in 2015. A complete set of financial statements are available from Valley Communications Center, 27519 108th Ave SE, Kent, WA 98030, or by telephone 253-372-1300. South Correctional Entity (SCORE) The South Correctional Entity (SCORE) consolidated correctional facility was established February 25, 2009, when an Interlocal Agreement (the "Original Interlocal Agreement") was entered into by seven participating municipal governments, the "Member Cities" of Auburn, Burien, Des Moines, Federal Way, Renton, SeaTac and Tukwila, under the authority of the "Interlocal Cooperation Act" (RCW 39.34). This "Original Interlocal Agreement" was amended and restated October 1, 2009 and named the City of Des Moines as the "Host City" and the remaining Member Cities as "Owner Cities". This interlocal agreement is known as the "Formation Interlocal Agreement". Pursuant to a separate "Host City Agreement" dated October 1, 2009, the Host City will not enjoy the same equity position as the Owner Cities until all debts issued are paid and the Host City fulfills all of its obligations as outlined in the Host City Agreement. Pursuant to SCORE financial policies, all unexpected funds or reserve funds shall be distributed based on the percentage of the Member City's average daily population at the SCORE Facility for the last three (3) years regardless of its Owner City or Host City status. SCORE, a governmental administrative agency pursuant to RCW 39.34.030(3), has the power to acquire, construct, own, operate, maintain, equip, and improve a correctional facility known as the "SCORE Facility" and to provide correctional services and functions incidental thereto, for the purpose of detaining arrestees and sentenced offenders in the furtherance of public safety and emergencies within the jurisdiction of the Member Cities. The SCORE Facility may serve the Member Cities and Subscribing Agencies which are in need of correctional facilities. Any agreement with a Subscribing Agency shall be in writing and approved by SCORE as provided within the SCORE Formation Interlocal Agreement. Financing for the acquisition, construction, equipping, and improvement of the SCORE Facility was provided by bonds issued by the South Correctional Entity Facility Public Development Authority (the "SCORE PDA"), a public development authority chartered by the City of Renton pursuant to RCW 35.21.730 through 35.21.755. The SCORE PDA issued $86 million in special obligation bonds in 2009 (the "Bonds") to construct, develop, acquire and equip the SCORE Facility. Pursuant to the Formation Interlocal Agreement and the ordinances of each city, each Owner City (which includes the Cities of Auburn, Burien, Federal Way, Renton, SeaTac, and Tukwila) is obligated to budget for and pay its share, and only its share, of the principal of and interest on the Bonds as the same become due and payable. Each Owner City's obligation to pay its portion is an irrevocable, unconditional full faith and credit obligation of such Owner City, payable from property taxes levied within the constitutional and statutory authority provided without a vote of the electors of the Owner City on all of the taxable property within the Owner City and other sources of revenues available therefor. The following is a summary of the debt service requirements for the Bonds: 65 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS SUMMARY OF DEBT SERVICE REQUIREMENTS The City of Tukwila reports its share of equity interest in the Governmental Activities column within the Government - wide financial statements under assets. The following is condensed (unaudited) financial information as of December 31, 2016 related to SCORE. The share of equity belonging to the seven participating cities are as follows ITEM FEDERAL AUBURN BURIEN DES MOINES WAY RENTON SEATAC TUKWILA TOTAL Equity January 1, 2016 $ 3,331,776 $ 376,841 $ 197,267 $2,620,575 $ 3,222,670 $ 498,467 $ 788,541 $11,036,137 Current Year Increase/(Decrease) (216,443) (52,239) (30,684) (328,310) (281,167) (64,438) (85,218) (1,058,499) Equity December 31, 2016 $ 3,115,334 $ 324,602 $ 166,583 $2,292,265 $ 2,941,503 $ 434,029 $ 703,323 $ 9,977,638 Percent of Equity 31.22% 3.25% 1.67% 22.97% 29.48% 4.35% 7.05% 100.00% The investment in joint venture for SCORE on the Statement of Net Position includes Tukwila's share of debt issued in 2009. The City's share of SCORE debt is $6,093,600. See Note 10 for additional information on long-term debt. Completed financial statements for SCORE and SCORE PDA can be obtained from the SCORE, Attn: Finance Manager, 20817 17th Avenue South, Des Moines, WA 98198. NOTE 8 - PENSION PLANS The following table represents the aggregate pension amounts for all plans subject to the requirements of the GASB Statement 68, Accounting and Financial Reporting for Pensions for the year 2016: Aggregate Pension Amounts - All Plans Debt Service Schedule $ (15,483,180) Pension assets $ 3,772,659 Deferred outflows of resources Debt Service Allocation to Owner Cities Deferred inflows of resources $ (642,177) Pension expense/expenditures $ 2,166,724 BABs Aubum Burien Federal Way Renton SeaTac Tukwila Year Principal Interest Subsidy Total 31% 4% 18% 36% 3% 8% 2017 $ 2,145,000 $ 4,820,241 $ (1,510,874) $ 5,454,367 $ 1,690,854 $ 218,175 $ 981,786 $ 1,963,572 $ 163,631 $ 436,349 2018 2,240,000 4,715,979 (1,510,063) 5,445,916 1,688,234 217,837 980,265 1,960,529 163,377 435,674 2019 2,310,000 4,602,229 (1,473,568) 5,438,661 1,685,985 217,546 978,959 1,957,918 163,160 435,093 2020 2,385,000 4,484,854 (1,435,933) 5,433,921 1,684,516 217,357 978,106 1,956,212 163,018 434,714 2021 2,465,000 4,363,604 (1,397,075) 5,431,529 1,683,774 217,261 977,675 1,955,350 162,946 434,522 2022-2026 13,945,000 19,586,127 (6,994,733) 26,536,394 8,226,282 1,061,456 4,776,551 9,553,102 796,092 2,122,912 2027-2031 17,010,000 14,723,464 (5,346,730) 26,386,734 8,179,888 1,055,470 4,749,612 9,499,224 791,602 2,110,939 2032-2036 20,955,000 8,498,417 (3,217,063) 26,236,354 8,133,270 1,049,454 4,722,544 9,445,087 787,091 2,098,908 2037-2040 14,860,000 1,502,494 (697,922) 15,664,572 4,856,017 626,583 2,819,623 5,639,246 469,937 1,253,166 Totals $78,315,000 $67,297,409 $(23,583,961) $ 122,028,448 $ 37,828,820 $4,881,138 $21,965,121 $43,930,241 $3,660,854 $ 9,762,276 The City of Tukwila reports its share of equity interest in the Governmental Activities column within the Government - wide financial statements under assets. The following is condensed (unaudited) financial information as of December 31, 2016 related to SCORE. The share of equity belonging to the seven participating cities are as follows ITEM FEDERAL AUBURN BURIEN DES MOINES WAY RENTON SEATAC TUKWILA TOTAL Equity January 1, 2016 $ 3,331,776 $ 376,841 $ 197,267 $2,620,575 $ 3,222,670 $ 498,467 $ 788,541 $11,036,137 Current Year Increase/(Decrease) (216,443) (52,239) (30,684) (328,310) (281,167) (64,438) (85,218) (1,058,499) Equity December 31, 2016 $ 3,115,334 $ 324,602 $ 166,583 $2,292,265 $ 2,941,503 $ 434,029 $ 703,323 $ 9,977,638 Percent of Equity 31.22% 3.25% 1.67% 22.97% 29.48% 4.35% 7.05% 100.00% The investment in joint venture for SCORE on the Statement of Net Position includes Tukwila's share of debt issued in 2009. The City's share of SCORE debt is $6,093,600. See Note 10 for additional information on long-term debt. Completed financial statements for SCORE and SCORE PDA can be obtained from the SCORE, Attn: Finance Manager, 20817 17th Avenue South, Des Moines, WA 98198. NOTE 8 - PENSION PLANS The following table represents the aggregate pension amounts for all plans subject to the requirements of the GASB Statement 68, Accounting and Financial Reporting for Pensions for the year 2016: Aggregate Pension Amounts - All Plans Pension liabilities $ (15,483,180) Pension assets $ 3,772,659 Deferred outflows of resources $ 4,733,197 Deferred inflows of resources $ (642,177) Pension expense/expenditures $ 2,166,724 Washington State Department of Retirement Systems Substantially all City of Tukwila full-time and qualifying part-time employees participate in one of the following statewide retirement systems administered by the Washington State Department of Retirement Systems, under cost-sharing, multiple -employer public employee defined benefit and defined contribution retirement plans. The state Legislature establishes, and amends, laws pertaining to the creation and administration of all public retirement systems. 66 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS The Department of Retirement Systems (DRS), a department within the primary government of the State of Washington, issues a publicly available comprehensive annual financial report (CAFR) that includes financial statements and required supplementary information for each plan. The DRS CAFR may be obtained by writing to: Department of Retirement Systems Communications Unit P.O. Box 48380, Olympia, WA 98504-8380 Or the DRS CAFR may be downloaded from the DRS website at www.drs.wa.gov. A. Public Employees Retirement System (PERS) Plans 1, 2, and 3 PERS members include elected officials; state employees; employees of the Supreme, Appeals and Superior Courts; employees of the legislature; employees of district and municipal courts; employees of local governments; and higher education employees not participating in higher education retirement programs. PERS is comprised of three separate pension plans for membership purposes. PERS plans 1 and 2 are defined benefit plans, and PERS plan 3 is a defined benefit plan with a defined contribution component. PERS Plan 1 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the member's average final compensation (AFC) times the member's years of service. The AFC is the average of the member's 24 highest consecutive service months. Members are eligible for retirement from active status at any age with at least 30 years of service, at age 55 with at least 25 years of service, or at age 60 with at least five years of service. Members retiring from active status prior to the age of 65 may receive actuarially reduced benefits. Retirement benefits are actuarially reduced to reflect the choice of a survivor benefit. Other benefits include duty and non -duty disability payments, an optional cost -of -living adjustment (COLA), and a one-time duty -related death benefit, if found eligible by the Department of Labor and Industries. PERS 1 members were vested after the completion of five years of eligible service. The plan was closed to new entrants on September 30, 1977. Contributions The PERS Plan 1 member contribution rate is established by State statute at 6 percent. The employer contribution rate is developed by the Office of the State Actuary and includes an administrative expense component that is currently set at 0.18 percent. Each biennium, the state Pension Funding Council adopts Plan 1 employer contribution rates. The PERS Plan 1 required contribution rates (expressed as a percentage of covered payroll) for 2016 were as follows: PERS Plan 1 Actual Contribution Rates: Employer Employee* PERS Plan 1 6.23% 6.00% PERS Plan 1 UAAL 4.77% Administrative Fee 0.18% Total 11.18% 6.00% The City of Tukwila did not contribute to PERS Plan 1 in 2016 as there are no employees covered under this plan. Although, $752,418 of the PERS 2/3 contributions were allocated to the PERS 1 unfunded actuarial accrued liability (UAAL). PERS Plan 2/3 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the member's average final compensation (AFC) times the member's years of service for Plan 2 and 1 percent of AFC for Plan 3. The AFC is the average of the member's 60 highest-paid consecutive service months. There is no cap on years of service credit. Members are eligible for retirement with a full benefit at 65 with at least 67 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS five years of service credit. Retirement before age 65 is considered an early retirement. PERS Plan 2/3 members who have at least 20 years of service credit and are 55 years of age or older, are eligible for early retirement with a benefit that is reduced by a factor that varies according to age for each year before age 65. PERS Plan 2/3 members who have 30 or more years of service credit and are at least 55 years old can retire under one of two provisions: • With a benefit that is reduced by three percent for each year before age 65; or • With a benefit that has a smaller (or no) reduction (depending on age) that imposes stricter return -to -work rules. PERS Plan 2/3 members hired on or after May 1, 2013 have the option to retire early by accepting a reduction of five percent for each year of retirement before age 65. This option is available only to those who are age 55 or older and have at least 30 years of service credit. PERS Plan 2/3 retirement benefits are also actuarially reduced to reflect the choice of a survivor benefit. Other PERS Plan 2/3 benefits include duty and non -duty disability payments, a cost -of -living allowance (based on the CPI), capped at three percent annually and a one-time duty related death benefit, if found eligible by the Department of Labor and Industries. PERS 2 members are vested after completing five years of eligible service. Plan 3 members are vested in the defined benefit portion of their plan after ten years of service; or after five years of service if 12 months of that service are earned after age 44. PERS Plan 3 defined contribution benefits are totally dependent on employee contributions and investment earnings on those contributions. PERS Plan 3 members choose their contribution rate upon joining membership and have a chance to change rates upon changing employers. As established by statute, Plan 3 required defined contribution rates are set at a minimum of 5 percent and escalate to 15 percent with a choice of six options. Employers do not contribute to the defined contribution benefits. PERS Plan 3 members are immediately vested in the defined contribution portion of their plan. Contributions The PERS Plan 2/3 employer and employee contribution rates are developed by the Office of the State Actuary to fully fund Plan 2 and the defined benefit portion of Plan 3. The Plan 2/3 employer rates include a component to address the PERS Plan 1 UAAL and an administrative expense that is currently set at 0.18 percent. Each biennium, the state Pension Funding Council adopts Plan 2 employer and employee contribution rates and Plan 3 contribution rates. The PERS Plan 2/3 required contribution rates (expressed as a percentage of covered payroll) for 2016 were as follows: PERS Plan 2/3 Actual Contribution Rates: Employer 2/3 Employee 2 PERS Plan 2/3 6.23% 6.12% PERS Plan 1 UAAL 4.77% Administrative Fee 0.18% Employee PERS Plan 3 Varies Total 11.18% 6.12% The City of Tukwila actual contributions to the plan were $972,612 for the year ended December 31, 2016 Public Safety Employees' Retirement System (PSERS) PSERS Plan 2 was created by the 2004 Legislature and became effective July 1, 2006. To be eligible for membership, an employee must work on a full time basis and: • Have completed a certified criminal justice training course with authority to arrest, conduct criminal investigations, enforce the criminal laws of Washington, and carry a firearm as part of the job; or • Have primary responsibility to ensure the custody and security of incarcerated or probationary individuals; or 68 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS • Function as a limited authority Washington peace officer, as defined in RCW 10.93.020; or • Have primary responsibility to supervise eligible members who meet the above criteria. PSERS membership includes: • PERS 2 or 3 employees hired by a covered employer before July 1, 2006, who met at least one of the PSERS eligibility criteria and elected membership during the period of July 1, 2006 to September 30 2006; and • Employees hired on or after July 1, 2006 by a covered employer, that meet at least one of the PSERS eligibility criteria. PSERS covered employers include: • Certain State of Washington agencies (Department of Corrections, Department of Natural Resources, Gambling commission, Liquor Control Board, Parks and Recreation Commission, and Washington State Patrol), • Washington State Counties, • Washington State Cities (except for Seattle, Spokane, and Tacoma), • Correctional entities formed by PSERS employers under the Interlocal Cooperation Act. PSERS Plan 2 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the average final compensation (AFC) for each year of service. The AFC is based on the member's 60 consecutive highest creditable months of service. Benefits are actuarially reduced for each year that the member's age is less than 60 (with ten or more service credit years in PSERS), or less than 65 (with fewer than ten service credit years). There is no cap on years of service credit. Members are eligible for retirement at the age of 65 with five years of service; or at the age of 60 with at least ten years of PSERS service credit; or at age 53 with 20 years of service. Retirement before age 60 is considered an early retirement. PSERS members who retire prior to the age of 60 receive reduced benefits. If retirement is at age 53 or older with at least 20 years of service, a three percent per year reduction for each year between the age at retirement and age 60 applies. PSERS Plan 2 retirement benefits are actuarially reduced to reflect the choice of a survivor benefit. Other benefits include duty and non -duty disability payments, an optional cost -of living adjustment (COLA), and a one-time duty -related death benefit, if found eligible by the Department of Labor and Industries. PSERS Plan 2 members are vested after completing five years of eligible service. Contributions The PSERS Plan 2 employer and employee contribution rates are developed by the Office of the State Actuary to fully fund Plan 2. The Plan 2 employer rates include components to address the PERS Plan 1 unfunded actuarial accrued liability and administrative expense currently set at 0.18 percent. Each biennium, the state Pension Funding Council adopts Plan 2 employer and employee contribution rates. 69 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS The PSERS Plan 2 required contribution rates (expressed as a percentage of current -year covered payroll) for 2016 were as follows: PSERS Plan 2 Actual Contribution Rates: Employer Employee PSERS Plan 2 6.59% 6.59% PERS Plan 1 UAAL 4.77% Administrative Fee 0.18% Totals 11.54% 6.59% The City of Tukwila actual contributions to the plan were $18,635 for the year ended December 31, 2016 Law Enforcement Officers' and Fire Fighters' Retirement System (LEOFF) LEOFF membership includes all full-time, fully compensated, local law enforcement commissioned officers, firefighters, and as of July 24, 2005, emergency medical technicians. LEOFF is comprised of two separate defined benefit plans. LEOFF Plan 1 provides retirement, disability and death benefits. Retirement benefits are determined per year of service calculated as a percent of final average salary (FAS) as follows: • 20+ years of service — 2.0% of FAS • 10-19 years of service — 1.5% of FAS • 5-9 years of service — 1')/0 of FAS The FAS is the basic monthly salary received at the time of retirement, provided a member has held the same position or rank for 12 months preceding the date of retirement. Otherwise, it is the average of the highest consecutive 24 months' salary within the last ten years of service. Members are eligible for retirement with five years of service at the age of 50. Other benefits include duty and non -duty disability payments, a cost -of living adjustment (COLA), and a one-time duty -related death benefit, if found eligible by the Department of Labor and Industries. LEOFF 1 members were vested after the completion of five years of eligible service. The plan was closed to new entrants on September 30, 1977. Contributions Starting on July 1, 2000, LEOFF Plan 1 employers and employees contribute zero percent, as long as the plan remains fully funded. The LEOFF Plan I had no required employer or employee contributions for fiscal year 2016. Employers paid only the administrative expense of 0.18 percent of covered payroll. LEOFF Plan 2 provides retirement, disability and death benefits. Retirement benefits are determined as two percent of the final average salary (FAS) per year of service (the FAS is based on the highest consecutive 60 months). Members are eligible for retirement with a full benefit at 53 with at least five years of service credit. Members who retire prior to the age of 53 receive reduced benefits. If the member has at least 20 years of service and is age 50, the reduction is three percent for each year prior to age 53. Otherwise, the benefits are actuarially reduced for each year prior to age 53. LEOFF 2 retirement benefits are also actuarially reduced to reflect the choice of a survivor benefit. Other benefits include duty and non -duty disability payments, a cost -of -living allowance (based on the CPI), capped at three percent annually and a one-time duty -related death benefit, if found eligible by the Department of Labor and Industries. LEOFF 2 members are vested after the completion of five years of eligible service. 70 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Contributions The LEOFF Plan 2 employer and employee contribution rates are developed by the Office of the State Actuary to fully fund Plan 2. The employer rate included an administrative expense component set at 0.18 percent. Plan 2 employers and employees are required to pay at the level adopted by the LEOFF Plan 2 Retirement Board. The LEOFF Plan 2 required contribution rates (expressed as a percentage of covered payroll) for 2016 were as follows: LEOFF Plan 2 Actual Contribution Rates: Employer Employee State and local governments 5.05% 8.41% Administrative Fee 0.18% Total 5.23% 8.41% The City of Tukwila actual contributions to the plan were $815,165 for the year ended December 31, 2016 The Legislature, by means of a special funding arrangement, appropriates money from the state General Fund to supplement the current service liability and fund the prior service costs of Plan 2 in accordance with the recommendations of the Pension Funding Council and the LEOFF Plan 2 Retirement Board. This special funding situation is not mandated by the state constitution and could be changed by statute. For the state fiscal year ending June 30, 2016, the state contributed $60,375,158 to LEOFF Plan 2. The amount recognized by the City of Tukwila as its proportionate share of this amount is $509,312. Actuarial Assumptions The total pension liability (TPL) for each of the DRS plans was determined using the most recent actuarial valuation completed in 2016 with a valuation date of June 30, 2015. The actuarial assumptions used in the valuation were based on the results of the Office of the State Actuary's (OSA) 2007-2012 Experience Study. Additional assumptions for subsequent events and law changes are current as of the 2015 actuarial valuation report. The TPL was calculated as of the valuation date and rolled forward to the measurement date of June 30, 2016. Plan liabilities were rolled forward from June 30, 2015, to June 30, 2016, reflecting each plan's normal cost (using the entry -age cost method), assumed interest and actual benefit payments. • Inflation: 3.0% total economic inflation; 3.75% salary inflation • Salary increases: In addition to the base 3.75% salary inflation assumption, salaries are also expected to grow by promotions and longevity. • Investment rate of return: 7.5% Mortality rates were based on the RP -2000 report's Combined Healthy Table and Combined Disabled Table, published by the Society of Actuaries. The OSA applied offsets to the base table and recognized future improvements in mortality by projecting the mortality rates using 100 percent Scale BB. Mortality rates are applied on a generational basis; meaning, each member is assumed to receive additional mortality improvements in each future year throughout his or her lifetime. There were minor changes in methods and assumptions since the last valuation. • For all systems, except LEOFF Plan 2, the assumed valuation interest rate was lowered from 7.8% to 7.7%. Assumed administrative factors were updated. • Valuation software was corrected on how the nonduty disability benefits for LEOFF Plan 2 active members is calculated. 71 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS • New LEOFF Plan 2 benefit definitions were added within the OSA valuation software to model legislation signed into law during the 2015 legislative session. Discount Rate The discount rate used to measure the total pension liability for all DRS plans was 7.5 percent. To determine that rate, an asset sufficiency test included an assumed 7.7 percent long-term discount rate to determine funding liabilities for calculating future contribution rate requirements. (All plans use 7.7 percent except LEOFF 2, which has assumed 7.5 percent). Consistent with the long-term expected rate of return, a 7.5 percent future investment rate of return on invested assets was assumed for the test. Contributions from plan members and employers are assumed to continue being made at contractually required rates (including PERS 2/3, PSERS 2, SERS 2/3, and TRS 2/3 employers, whose rates include a component for the PERS 1, and TRS 1 plan liabilities). Based on these assumptions, the pension plans' fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return of 7.5 percent was used to determine the total liability. Long -Term Expected Rate of Return The long-term expected rate of return on the DRS pension plan investments of 7.5 percent was determined using a building -block -method. The Washington State Investment Board (WSIB) used a best estimate of expected future rates of return (expected returns, net of pension plan investment expense, including inflation) to develop each major asset class. Those expected returns make up one component of WSIB's capital market assumptions. The WSIB uses the capital market assumptions and their target asset allocation to simulate future investment returns at various future times. The long-term expected rate of return of 7.5 percent approximately equals the median of the simulated investment returns over a 50 -year time horizon. Estimated Rates of Return by Asset Class Best estimates of arithmetic real rates of return for each major asset class included in the pension plan's target asset allocation as of June 30, 2016, are summarized in the table below. The inflation component used to create the table is 2.2 percent and represents the WSIB's most recent long-term estimate of broad economic inflation. Asset Class Target Allocation % Long -Term Expected Real Rate of Return Arithmetic Fixed Income 20% 1.70% Tangible Assets 5% 4.40% Real Estate 15% 5.80% Global Equity 37% 6.60% Private Equity 23% 9.60% 100% Sensitivity of the Net Pension (Liability)/Asset The table below presents the City of Tukwila proportionate share of the net pension liability calculated using the discount rate of 7.5 percent, as well as what the City of Tukwila proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 -percentage point lower (6.5 percent) or 1 -percentage point higher (8.5 percent) than the current rate. 72 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Pension Plan Fiduciary Net Position Detailed information about the State's pension plans' fiduciary net position is available in the separately issued DRS financial report. Pension (Liabilities)/Assets, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2016, the City of Tukwila reported a pension asset of $3,772,659 and a pension liability of $15,463,180 for its proportionate share of the net pension liabilities as follows: 1% Decrease 6.50% Current Rate 7.50% 1% Increase 8.50% PERS 1 8,506,811 7,054,328 5,804,378 PERS 2/3 15,446,184 8,389,286 (4,367,108) PSERS 2 89,366 20,581 (28,415) FIREMENS PENSION 82,436 18,985 (26,211) LEOFF 1 (476,712) (802,490) (1,080,957) LEOFF 2 8,329,174 (2,970,169) (11,486,593) Pension Plan Fiduciary Net Position Detailed information about the State's pension plans' fiduciary net position is available in the separately issued DRS financial report. Pension (Liabilities)/Assets, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2016, the City of Tukwila reported a pension asset of $3,772,659 and a pension liability of $15,463,180 for its proportionate share of the net pension liabilities as follows: The amount of the asset reported above for LEOFF Plan 1 and 2 reflects a reduction for State pension support provided to the City of Tukwila. The amount recognized by the City of Tukwila as its proportionate share of the net pension (liability)/asset, the related State support, and the total portion of the net pension asset that was associated with the City of Tukwila were as follows: LEOFF 1 Asset (Asset)/Liability PERS 1 $ 7,054,328 PERS 2/3 $ 8,389,286 PSERS 2 $ 20,581 FIREMENS PENSION $ 18,985 LEOFF 1 $ (802,490) LEOFF 2 $ (2,970,169) The amount of the asset reported above for LEOFF Plan 1 and 2 reflects a reduction for State pension support provided to the City of Tukwila. The amount recognized by the City of Tukwila as its proportionate share of the net pension (liability)/asset, the related State support, and the total portion of the net pension asset that was associated with the City of Tukwila were as follows: 73 LEOFF 1 Asset LEOFF 1 - employer's proportionate share (802,490) LEOFF 1 - State's proportionate share of the net pension asset associated with the employer (5,428,021) TOTAL (6,230,511) 73 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS At June 30, the City of Tukwila proportionate share of the collective net pension liabilities was as follows: LEOFF 2 Asset LEOFF 2 - employer's proportionate share 2,970,169 LEOFF 2 - State's proportionate share of the net pension asset associated with the employer 1,936,334 TOTAL 4,906,503 At June 30, the City of Tukwila proportionate share of the collective net pension liabilities was as follows: Employer contribution transmittals received and processed by the DRS for the fiscal year ended June 30 are used as the basis for determining each employer's proportionate share of the collective pension amounts reported by the DRS in the Schedules of Employer and Nonemployer Allocations for all plans except LEOFF 1. LEOFF Plan 1 allocation percentages are based on the total historical employer contributions to LEOFF 1 from 1971 through 2000 and the retirement benefit payments in fiscal year 2016. Historical data was obtained from a 2011 study by the Office of the State Actuary (OSA). In fiscal year 2016, the state of Washington contributed 87.12 percent of LEOFF 1 employer contributions and all other employers contributed the remaining 12.88 percent of employer contributions. LEOFF 1 is fully funded and no further employer contributions have been required since June 2000. If the plan becomes underfunded, funding of the remaining liability will require new legislation. The allocation method the plan chose reflects the projected long-term contribution effort based on historical data. In fiscal year 2016, the state of Washington contributed 39.46 percent of LEOFF 2 employer contributions pursuant to RCW 41.26.725 and all other employers contributed the remaining 60.54 percent of employer contributions. The collective net pension liability (asset) was measured as of June 30, 2016, and the actuarial valuation date on which the total pension liability (asset) is based was as of June 30, 2015, with update procedures used to roll forward the total pension liability to the measurement date. Pension Expense For the year ended December 31, 2016, the city of Tukwila recognized pension expense as follows: 74 Proportionate Share 6/30/15 Proportionate Share 6/30/16 Change in Proportion PERS 1 0.135736% 0.131354% -0.004382% PERS 2/3 0.173592% 0.166622% -0.006970% PSERS 2 0.052748% 0.048428% -0.004320% LEOFF 1 0.077944% 0.077890% -0.000054% LEOFF 2 0.519159% 0.510663% -0.008496% Employer contribution transmittals received and processed by the DRS for the fiscal year ended June 30 are used as the basis for determining each employer's proportionate share of the collective pension amounts reported by the DRS in the Schedules of Employer and Nonemployer Allocations for all plans except LEOFF 1. LEOFF Plan 1 allocation percentages are based on the total historical employer contributions to LEOFF 1 from 1971 through 2000 and the retirement benefit payments in fiscal year 2016. Historical data was obtained from a 2011 study by the Office of the State Actuary (OSA). In fiscal year 2016, the state of Washington contributed 87.12 percent of LEOFF 1 employer contributions and all other employers contributed the remaining 12.88 percent of employer contributions. LEOFF 1 is fully funded and no further employer contributions have been required since June 2000. If the plan becomes underfunded, funding of the remaining liability will require new legislation. The allocation method the plan chose reflects the projected long-term contribution effort based on historical data. In fiscal year 2016, the state of Washington contributed 39.46 percent of LEOFF 2 employer contributions pursuant to RCW 41.26.725 and all other employers contributed the remaining 60.54 percent of employer contributions. The collective net pension liability (asset) was measured as of June 30, 2016, and the actuarial valuation date on which the total pension liability (asset) is based was as of June 30, 2015, with update procedures used to roll forward the total pension liability to the measurement date. Pension Expense For the year ended December 31, 2016, the city of Tukwila recognized pension expense as follows: 74 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Deferred Outflows of Resources and Deferred Inflows of Resources At December 31, 2016, the City of Tukwila reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: PERS 1 Pension Expense PERS 1 138,454 PERS 2/3 1,063,703 PSERS 2 14,629 LEOFF 1 (103,253) LEOFF 2 970,084 FIREMENTS PENSION 83,107 Deferred Outflows of Resources and Deferred Inflows of Resources At December 31, 2016, the City of Tukwila reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: PERS 1 Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience - Net difference between projected and actual investment earnings on pension plan investments 177,617 - Changes of assumptions - - Changes in proportion and differences between contributions and proportionate Contributions subsequent to the measurement date $378,081 TOTAL $555,698 $0 75 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS PERS 2/3 Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience 446,724 (276,944) Net difference between projected and actual investment earnings on pension plan investments 1,026,606 - Changes of assumptions 86,710 - Changes in proportion and differences between contributions and proportionate share of contributions - (328,447) Contributions subsequent to the measurement date 488,726 TOTAL 2,048,765 (605, 390) 76 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS PSERS 2 Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience 7,010 - Net difference between projected and actual investment earnings on pension plan investments 4,245 - Changes of assumptions 80 - Changes in proportion and differences between contributions and proportionate share of contributions - (496) Contributions subsequent to the measurement date 5,372 TOTAL 16,707 (496) LEOFF 1 Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience - Net difference between projected and actual investment earnings on pension plan investments 81,572 Changes of assumptions - Changes in proportion and differences between contributions and proportionate share of contributions Contributions subsequent to the measurement date TOTAL 81,572 - 77 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS LEOFF 2 Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience 406,993 - Net difference between projected and actual investment earnings on pension plan investments 1,067,301 - Changes of assumptions 11,199 - Changes in proportion and differences between contributions and proportionate share of contributions 57,284 (36,291) Contributions subsequent to the measurement date 404,571 TOTAL 1,947,348 (36, 291) Deferred outflows of resources related to pensions resulting from the City of Tukwila contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2017. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended December 31 PERS1 2017 (43,733) 2018 (43,733) 2019 163,122 2020 101,961 2021 Thereafter TOTAL 177,617 78 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Year ended December 31 PERS 2/3 2017 (108,148) 2018 (108,148) 2019 698,141 2020 472,804 2021 1,326 Thereafter (31) TOTAL 954,649 Year ended December 31 PSERS 2017 1,295 2018 1,295 2019 3,910 2020 3,045 2021 1,326 Thereafter (31) TOTAL 10,839 Year ended December 31 LEOFF 1 2017 (16, 857) 2018 (16,857) 2019 70,647 2020 44,639 2021 35,100 Thereafter TOTAL 81,572 Year ended December 31 LEOFF 2 2017 (11, 672) 2018 (11, 672) 2019 884,726 2020 610,004 2021 35,100 Thereafter TOTAL 1,506,486 79 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Firemen's Pension System Summary of Significant Accounting Policies Investments are valued and reported at fair value. Plan Description Plan Administration: The Firefighters" Pension Fund is administered by the City of Tukwila. The plan is a single - employer defined benefit pension plan that provides pensions for firefighters that were hired prior to 1970. The firefighters' pension board consists of the following five members: the chairperson of the fire commissioners for said district who shall be chairperson of the board, the county auditor, county treasurer, and in addition, two regularly employed or retired firefighters elected by secret ballot of the employed and retired firefighters. Retired members who are subject to the jurisdiction of the pension board have both the right to elect and the right to be elected under this section. The first members to be elected by the firefighters shall be elected annually for a two-year term. The two firefighter -elected members shall, in turn, select a third eligible member who shall serve in the event of an absence of one of the regularly elected members. Plan membership is limited to active members of the Firefighters' Pension Fund (FPF) as of March 1, 1970. On that date, the Washington Law Enforcement Officers' and Firefighters' System (LEOFF) was established. FPF is responsible for paying the pensions of those members retired prior to March 1, 1970 and for providing the "excess benefit", the excess of FPF formula benefits over the LEOFF benefits. Therefore, the plan is closed to new members. At December 31, 2016, FPF membership consisted of the following: Type of Membership Total Inactive plan members retired prior to March 1, 1970 0 Inactive plan members retired March 1, 1970 or after 10 Active Plan Members 0 Total 10 Benefits Provided All benefit terms are in statutes RCW 41.16, 41.18, and 41.26. FPF provides retirement, disability, and death benefits. Each firefighter in service on March 1, 1970 receives the greater of the benefit payable under the Washington Law Enforcement Officers' and Firefighters' Retirement System and the benefits available under the provisions of prior law. Where benefits under the old law exceed those under the new law for any firefighter, the excess benefits are paid from the FPF of the city employing the member on March 1, 1970. All members are retired and drawing benefits. Benefit terms provide for cost -of -living adjustments to each member's retirement benefit. There are two types of increases: escalation by salary in proportion to the current salary of the rank from which the firefighter retired, or an increase proportionate to the increase in the Seattle -area CPI, with the change computed annually. Regardless of the increase (or decrease) in the CPI, the benefits are increased at least 2% each year. The former applies to firefighters who retired from service after 1969, their survivors, and to firefighters who retired for duty disability (but not their survivors) after 1961. The latter applies to all other types of monthly benefits. Contributions As long as the FPF provides for benefits to covered members, the City will be eligible to receive a share of the State's distribution of the fire insurance premium taxes. The amount the City receives is 25% of all monies received by the State from taxes on fire insurance premiums. Contributions can also come from taxes paid pursuant to the provisions of RCW 41.16.060. This statute require that each municipality levy up to $0.45 (only $0.225 of which can 80 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS be in excess of the property tax limit pursuant to RCW 84.52.043) per $1,000 of assessed valuation, based on reports by a qualified actuary, to maintain the fund. The actuarial assumptions were provided by an independent actuary. Investments It is the policy of the City of Tukwila to invest public funds in a manner that will provide maximum security with the highest investment return while meeting the daily cash flow demands of the City, while conforming to all state and local statutes governing the investment of public funds. The money -weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amount actually invested. Concentrations. Approximately 70% of investments are in a long-term government bond. City's Net Pension Liability The components of the City's net pension liability at December 31, 2016 are as follows: Total pension liability Less: Plan fiduciary net position City's net pension liability Plan fiduciary net position as a percentage of the total pension liability $ 1,445,352 1,426,367 $ 18,985 98.69% Schedule of Changes in the City's Net Pension Liability and Related Ratios S Total Pension Liability 2014 2015 2016 Service Cost Interest 50,098 49,716 49,332 Changes of benefit terms Differences between expected and actual experience (2,442) (311,190) Changes in assumptions (62,728) Benefit payments, included refunds of employee contributions (61,863) (58,277) (59,988) Net change in total pension liability (11,765) (11,003) (384,574) Total pension liability — beginning 1,852,693 1,840,929 1,829,926 Total pension liability — ending (a) $ 1,840,929 $ 1,829,926 1,445,352 81 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Plan Fiduciary Net Position Contributions — employer 64,114 63,590 66,360 Contributions — employee Net investment income 1,805 2,667 7,988 Benefit payments, including refunds of employee contributions (61,863) (58,277) (59,988) Administrative expense (4,500) (4,500) Other Net change in plan fiduciary net position 4,056 3,481 9,861 Plan fiduciary net position — beginning 1,408,970 1,413,026 1,416,506 Plan fiduciary net position — ending (b) 1,413,026 1,416,506 1,426,367 City's net pension liability — ending (a) — (b) $ 427,903 413,420 18,985 Plan fiduciary net position as a percentage of the total pension liability Covered -employee payroll 76.76% 77.41% 98.69% City's net pension liability as a percentage of covered -employee payroll n/a n/a n/a Deferred Outflows of Resources and Deferred Inflows of Resources At December 31, 2016, the City of Tukwila reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: 82 Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience - Net difference between projected and actual investment earnings on pension plan investments 83,107 Totals 83,107 - 82 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Deferred outflows of resources related to pensions resulting from the City of Tukwila contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2017. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended December 31: 2017 $ 22,625 2018 22,625 2019 22,625 2020 15,231 2021 - Actuarial Assumptions The total pension liability was determined by an actuarial valuation as of December 31, 2016, using the following actuarial assumptions, applied to all periods included in the measurement: Inflation Salary increases Investment rate of return 2.75% 3.75% 2.75% Healthy life mortality rates were based on the RP -2014 mortality table, total dataset, fully generational projected with Scale MP -2014, set back one year for males and set forward one year for females. Disabled life mortality rates were based on the RP -2014 mortality table, total dataset, fully generational projected with Scale MP -2014, set back two years for males and females. The long-term expected rate of return on pension plan investments assumption was based on the nature and mix of current and expected pension plan assets over a period of time representative of the expected length of time between the first day of service and date of the last benefit payment. The discount rate used to measure the total pension liability was 2.75%. The projection of cash flows used to determine the discount rate assumed City contributions were equal to revenue received from Fire Insurance premiums and the amount received would increase at the inflation rate of 2.75%. Based on this assumption, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payment of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the net pension liability to changes in the discount rate. The following presents the Firemen's net pension liability of the City, calculated using the discount rate of 2.75%, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 -percentage -point lower, 2.75%, or 1 -percentage point higher, 3.75%, than the current rate: Firemen's net pension 1% Decrease Current Discount 1% Increase liability Rate $ 196,149 $ 18,985 $ (130,661) 83 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Basis of Valuation A general summary of the substantive plan used as the basis of the valuation follows. Applicable Statutes Benefits RCW 41.16, 41.18, 41.26 Each firefighter in service on March 1, 1970 receives the greater of the benefit payable under LEOFF or FPF. Where benefits under the old law exceed those under the new for any firefighter, the excess benefits are paid from the FPF of the city employing the member on March 1, 1970. Service Retirement Benefit Member Eligibility: age 50 and 25 years of service (RCW 41.18.040) or Age 50 and five years of service (RCW 41.26.090). Survivor Amount of benefit: 50% of salary plus an additional 2% for each year of service in excess of 25 years. Maximum benefit of 60% of salary (does not apply for those retiring after July 1, 2006). Eligibility: spouse or child Amount of benefit: continuation of the firefighter's benefit. (If spouse — same, plus additional 5% of salary per child. If no spouse — 30% of salary for first child, 10% for each additional child. Maximum of 60% of salary). Duty Disability Retirement Benefit Member Eligibility: disabled after six-month waiting period. Amount of benefit: determined the same as Service Retirement Benefit. Recovery: restoration to service. Survivor See Survivor's Benefit section under Service Retirement. Non Duty Disability Retirement Benefit Member Survivor Duty Death Benefit Eligibility: disabled after 90 -day waiting period. Amount of benefit: 50% of salary, or service retirement benefit, if greater. Recovery: see Duty Disability Retirement. Limitations: no benefits payable if firefighter employed elsewhere when disabled. Eligibility: spouse or child Amount of benefit: 33.3% to widow or children only. 45.8% to widow and one child. 47.6% to widow and two children. 50.0% to widow and three children. Eligibility: spouse or child Amount of benefit: If spouse — 50% of salary plus an additional 5% of salary per child; maximum benefit of 60% of salary. If no spouse — 50% of salary to children. Non Duty Death Benefit Eligibility: spouse or child Amount of benefit: provisions the same as Survivor's Benefit under Non -Duty Disability Retirement. Special Provisions Under disability or death benefits, a surviving spouse may elect a lump -sum payment of $5,000 in lieu of future monthly benefits. 84 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Vesting Deferred Benefit Postretirement Increase Benefits Payable Under LEOFF Type 1 Type 2 Applicability Minimum Benefit Funeral Benefit Participant Summary December 31, 2016 Age and service determined as of the census date. Termination after 20 years of service (RCW 41.18.130) or five years of service (RCW 41.26.090). Commences: when a firefighter would have had 25 years of service (RCW 41.18.130) or age 50 (RCW 41.26.090). Amount of benefit: 2% of salary for each year of service. Other provisions apply, see statutes. Death while vested prior to commencement of benefits: payment of firefighters deferred benefit to spouse or child. Annual increase proportionate to the increase in the Seattle -area CPI. Minimum increase at least 2% each year. Escalation by salary in proportion to current salary or rank from which the firefighter retired. Annual increase proportionate to the increase in the Seattle -area CPI. Minimum increase at least 2% each year. Type 1 applies to firefighters who retired from service after 1969, their survivors, and to firefighters who retired for duty disability (but not their survivors) after 1961. Type 2 applies to all other types of monthly benefits After April 25, 1973, a minimum benefit of $300 per month to all retired firefighters and their survivors. This minimum is increased by the CPI. $500 RCW 41.18.140, no provision under RCW 41.26. LEOFF Plan 1 (Firemen's Pension) Inactive Participants Age Service Retirees Disabled Retirees Surviving Spouses Total < 65 0 0 0 0 65 — 69 0 0 0 0 70 — 74 1 1 1 3 75 — 79 1 1 2 4 80 — 84 0 1 1 1 85-89 1 0 0 1 90 + 0 0 0 0 Total 3 3 4 10 Annual pension amounts through December 31, 2016: Paid by City Paid by LEOFF $59,988 $440,025 The information presented in the preceding required schedules were determined as part of the actuarial valuations at the dates indicated. 85 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS The key actuarial assumptions used for the January 1, 2017 valuation were: Assumption Rates Actuarial Cost Method Asset Valuation Method Measurement Date Inflation Rate Discount Rate (or Investment Return) Cost of Living Salary Increases (for calculated benefit increases based on rank) Healthy Mortality Disabled Mortality Spouse Age Entry Age Fair Market Value December 31, 2016 2.75% We based the long-term expected rate of return on pension plan investments assumption on the nature and mix of current and expected pension plan assets over a period of time representative of the expected length of time between the first day of service and date of the last benefit payment. The rate of 2.75% was selected. 2.75%, based on SSA OASDI 2014 report. 3.75%, based on SSA OASDI 2014 report. RP -2014 mortality table, total dataset, fully generational with mortality improvement scale MP -2014 setback one year for males and set forward one year for females. RP -2014 mortality table, total dataset, fully generational with mortality improvement scale MP -2014 set forward two years for males and females. We assumed that wives are three years younger than husbands. NOTE 9 — OTHER POSTEMPLOYMENT BENEFIT (OPEB) PLAN During the year ended December 31, 2008, the City elected to adopt the provisions of GASB Statement No. 45, "Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions" (GASB No. 45), which requires the City to accrue other postemployment benefits (OPEB) expense related to its postretirement healthcare plan based on a computed annual required contribution (ARC) that includes the current period's service cost and an amount to amortize unfunded actuarial accrued liabilities. Instead of recording expense on a "pay-as- you-go" basis, the City, under GASB No. 45, has recorded a liability of $9,178,836 for the difference between the actuarially calculated ARC and the estimated contributions made since the adoption of GASB No. 45. This liability is included in other noncurrent liabilities in the accompanying December 31, 2016 statement of net position. The effect of GASB No. 45 for the current fiscal year was to decrease the City's excess of revenue over expenses before capital contributions and the City's increase in net position for the year ended December 31, 2016 by $2,033,913. Plan Description The City of Tukwila's LEOFF Plan 1 (the Health Plan) is a single -employer defined -benefit healthcare plan administered by the City. The authority to establish and amend benefits is determined by the LEOFF board. The Health Plan provides medical, prescription drug, dental, Medicare Part B premiums, long-term care, and vision expenses for LEOFF Plan 1 retirees. Dependent spouses and children are not covered. The Health Plan's actuary is Healthcare Actuaries. The Health Plan does not issue a separate standalone financial report. 86 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Membership As of December 31, 2016, there were 35 retirees meeting the eligibility requirements of a LEOFF 1 member. The actuarial valuation is based on the 40 retirees in the plan as of December 31, 2014. This is considered a closed group with no new members. Funding Policy Funding for LEOFF 1 retiree healthcare costs is provided entirely by the City as required by RCW. The City's funding policy is based upon pay-as-you-go financing requirements. For the fiscal year ended December 31, 2016, the City contributed $275,530 to the Health Plan through use of existing fund balance. The City's contribution was entirely to fund 'pay-as-you-go' costs under the Health Plan and not to prefund benefits. There were no retiree contributions. Annual OPEB Cost and Net OPEB Obligation The City's annual other postemployment benefit (OPEB) cost is calculated based on the annual required contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 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 unfunded actuarial liabilities over a period 21 years as of January 1, 2008. The following tables show 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. ANNUAL OPEB COST AND NET OPEB OBLIGATION 2014 2015 2016 Annual required contribution (ARC) Interest on Net OPEB Obligation Adjustment to ARC Annual OPEB cost (expense) Employer contributions Change in Net OPEB Obligation Net OPEB Obligation at Beginning of year $ 1,903,679 $ 2,585,779 $ 2,765,486 171,067 146,904 178,623 (388,580) (452,441) (634,666) 1,686,166 2,280,242 2,309,443 (905, 974) (477,292) (275,530) 780,192 4,561,781 1,802,950 5,341,973 2,033,913 7,144, 923 Net OPEB Obligation at End of year $ 5,341,973 $ 7,144, 923 $ 9,178, 836 * (i) is the assumed interest rate that year, 2.75% in 2014, The net OPEB obligation of $9,178,836 is included as 2.75% in 2015 and 2.50% in 2016. a non-current liability on the Statement of Net Position. 87 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS ANNUAL DEVELOPMENT OF OPEB COST Fiscal Year Ended Annual Required Contribution Interest on Net OPEB ARC Annual Obligation Adjustment OPEB Cost Total Employer Contri- butions Change in Net OPEB Obligation Net OPEB Obligation (Gain)/ Balance Loss 2008 $ 1,366,284 $ - $ 2009 2010 2011 2012 2013 2014 2015 2016 1,366,284 1,366,284 1,264,522 1,264,522 1,264,522 1,903,679 2,585,779 2,765,486 40,459 61,839 90,941 143,332 112,598 213,809 145,727 287,945 174,458 359,904 171,067 388,580 146,904 452,441 178,623 634,666 $1,366,284 1,344,904 1,313,893 1,163,311 1,122,304 1,079,076 1,686,166 2,280,242 2,309,443 * Based on a 21 -year closed amortization as of January 1, 2008 $ 557,103 335,265 317,771 335,090 404,007 878,755 905,974 477,292 275,530 $ 809,181 1,009,639 996,122 828,221 718,297 200,321 780,192 1,802,950 2,033,913 $ 809,181 1,818,820 2,814,942 3,643,163 4,361,460 4,561,781 5,341,973 7,144, 923 9,178, 836 $ 809,181 1,031,019 1,048,513 929,432 860,515 385,767 997,705 2,108,487 2,489,956 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation were as follows: PERCENTAGE OF ANNUAL OPEB COST CONTRIBUTED Fiscal Year Ending Annual OPEB Cost Employer Contribution Percentage of Annual OPEB Net OPEB Cost Contributed Obligation December 31, 2014 December 31, 2015 December 31, 2016 Funded Status and Funding Progress 1,686,166 2,280,242 2,309,443 905,974 477,292 275,530 54 21 12 5,341,973 7,144, 923 9,178, 836 As of January 1, 2017, the most recent actuarial accounting update, the plan was 0% funded. The actuarial accrued liability for benefits was $29.1 million, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $29.1 million and a funded ratio of 0%. The funded ratio is 0%, because the City funds benefits on a pay-as-you-go basis. SCHEDULE OF FUNDING PROGRESS (rounded to thousands) Actuarial Actuarial Value Accrued Valuation Date of Assets Liabilities Unfunded Actuarial Accrued Liabilities (UAAL)* Funded Covered Ratio Payroll UAAL as a Percentage of Covered Payroll January 1, 2008 January 1, 2011 January 1, 2014 January 1, 2015 January 1, 2016 $0 0 0 0 0 $16,103 14,805 21,264 29,538 30,186 88 $16,103 14,805 21,264 29,538 30,186 0% 0 0 0 0 $581 371 195 132 0 4% 3 1 0 0 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Actuarial valuations of an ongoing plan involve 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 healthcare cost trend. Actuarially determined amounts are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. GASB 45 requires that the schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information that shows whether the actuarial value of Health Plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions The basis of projections of benefits for financial reporting purposes is the substantive plan (the Health Plan as understood by the City and members of the Health Plan) and includes the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the City and Members of the Health 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 January 1, 2015 valuation used the entry age normal actuarial cost method. The actuarial assumptions included a 2.75% investment rate of return (net of administrative expenses) and an initial annual healthcare cost trend rate of 9.0% for pre -Medicare expenses, to an ultimate rate of 3.8% after 61 years. The Medicare trend assumption is 6.5%, to an ultimate rate of 3.8% after 61 years. The dental trend assumption is 5.5%, to an ultimate rate of 3.5% after 4 years. The Medicare premium trend rate is 5.4% for all years. The long-term care trend rate is 5.0% for all years. The trend for the Excise Tax threshold is 0% until 2020, when a trend rate of 4.24% is used. The trend for all future years after that year is 3.24%. All trend rates include a 3.0% inflation assumption. The UAAL is amortized as a level dollar amount on a closed basis over 21 years beginning January 1, 2008. The remaining amortization period at December 31, 2016 was 12.0 years. Assumption Rates Actuarial Cost Method Entry Age Normal method. Measurement Date January 1, 2015 Inflation Rate 3.00% Discount Rate (or Investment Return) Selected the assumed discount rate of 2.75% based on the five - year average investment yield on the investments expected to finance the payment of benefits. Healthy Mortality RPH-2014 mortality table (headcount weighted), total dataset, fully generational with mortality improvement scale MP -2014 setback one year for males and set forward one year for females. Disabled Mortality RPH-2014 mortality table (headcount weighted), total dataset, fully generational with mortality improvement scale MP -2014 set forward two years for males and females. Turnover None assumed. All LEOFF 1 actives are fully eligible for retirement. 89 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Per Capita Claims Cost Assumed annual per capita claims costs are as follows: Age Medical/Rx Dental Vision LTC 55 $ 21,875 $ 966 $ 181 $ 133 60 28,071 966 181 220 65 15,406 966 181 448 70 16,924 966 181 1,183 75 17,984 966 181 3,028 80 18,348 966 181 6,499 Aging or Morbidity Factors Aging/morbidity factors are included in the per capita claims costs shown above (except dental and vision). Medicare Part B Premium Reimbursements The City reimburses Medicare retirees for Part B premiums. The 2015 annual premium is $1,258.80. Affordable Care Act (ACA) Excise Tax Threshold Ages 55-64 All Other Single $ 11,850 $ 10,200 ACA Base Premium Assumed annual plan costs upon which the ACA tax calculation is based: Medicare ineligible $ 28,071 Medicare eligible $ 16,557 ACA Tax • We assumed a 40% excise tax rate on premiums above the ACA threshold. • We assumed the City of Tukwila pays no federal taxes. • We assumed the excise tax will apply to medical/Rx and Medicare premium reimbursements. Trend Rates Medical Long -Term Trends* from Getzen SOA Model version 2014_b using baseline assumptions. Excise Pre- Part B Long -Term. Tax Year Medicare Medicare Dental Vision Premiums Care Threshold 2015 9.00% 6.50% 5.5% 4.O% 5.4% 5.{}% {}.cao% 2016 7.50% 6.50% 5.O% 4.O% 5.4% 5.0% 0. 00% 2017 6.50% 6..01% 4.5% 4.O% 5.4% 5.0% O.00% 2018 5.50% 5.50% 4.0% 4.{}% 5,4% 5.0% 4.24% 2019 5.50% 5.50% 3.5% 1 5% 5.4% 5.0% 3.24% 202o 5.4&% 5.46% 3.5% 3.5% 5.4% 5.0% 3.24% 2021-2074 -__ __- 3.5% 3.5% 5.4% 5.0% 3.24% 2075+ 3.80% 3.80% 3.5% 3.5% 5.4% 5.0% 3.24% * The trend rates include assumed inflation of Pc for all future years. The Schedule of Funding Progress, presented as required supplementary information following the notes to the financial statements, provides the multi-year trend information showing whether the actuarial value of plan assets is increasing or decreasing over time relative to the actual. 90 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS NOTE 10 — LONG-TERM LIABILITIES Governmental Activities Long -Term Debt General Obligation Bonds are direct obligations of the City for which its full faith and credit are pledged. Debt service for voter -approved issues, of which the City has one, are funded by special property tax levies. Debt service for City Council authorized bonds, also called councilmanic bonds, is funded from regular property taxes, sales taxes, or other general revenues, and is generally paid from debt service funds. The City currently maintains a rating of Al from Moody's Investor Service, Aa3 from Standard & Poor's, and a rating of AA- from Fitch's Rating Service for its General Obligation Bonds. General Obligation Bonds outstanding at year-end are as follows: • 2008 LTGO bonds were issued to refund the remaining debt of the 1999 LTGO bonds. The 1999 LTGO bonds were issued to purchase an additional City Hall Annex (6300 building) and economic revitalization projects. • 2010 LTGO bonds were issued for the construction and realignment of Southcenter Parkway in the Tukwila South Annexation area and for the cost of emergency preparedness capital and other equipment. • 2011 LTGO refunding bonds were issued to refund a portion of the bonds issued in 2003 for the City's Arterial Street program. • 2013 LTGO bonds were issued and the proceeds loaned to the Tukwila Metropolitan Park District to pay for improvements to the pool. • 2014 LTGO bonds were issued to fund the purchase of land acquisition and capital costs of redevelopment activities within the City's Tukwila International Boulevard (TIB) urban renewal area. • 2014 LTGO general obligation bond in the form of a line of credit to purchase property and pay for capital costs of redevelopment activities within the City's Urban Renewal area. • 2015 LTGO bonds were issued to pay for improvements to Interurban Avenue South and reconstruct or retrofit Boeing Access Road Bridge. • 2016 UTGO bonds in the amount of $32.99 million were issued after voters approved a $77.385 million bond measure that will fund a justice center, rebuild 3 fire stations and provide fire apparatus and life -safety equipment replacement for 20 years. Special assessment bonds are issued to finance construction of local improvement district (LID) projects and are repaid through assessments collected from property owners benefiting from related improvements. Although the bonds are secured by liens against assessed properties, the City is required under state law to establish a guaranty fund to provide a means of paying LID bond debt service obligations in the event there are insufficient resources in the LID debt service fund. The special assessment bonds are not general obligation debt but the City is obligated in some manner to cover the interest on the bonds. Therefore, the bonds are reported as Special Assessment Debt with Governmental Commitment. Special assessments outstanding at year-end are as follows: • 2013 special assessment bonds LID No. 33 were issued to reimburse the City for a portion of the costs of a major reconstruction of Klickitat and Southcenter Parkway to improve access to the urban center. 91 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS Business -Type Activities Long -Term Debt Revenue bond indebtedness issued to fund proprietary activities is recorded in proprietary funds. Debt service payments are made from operating revenues generated by the proprietary funds. In proprietary funds, bonds are displayed net of unamortized premium or discount; annual interest expense is decreased by amortization of debt premium and increased by the amortization of debt discount. The City currently maintains a rating of Aaa from Moody's Investor Service for debt in this category. Revenue bonds outstanding at year-end are as follows: • 2015 water/sewer/SWM bonds were issued to refund the remaining debt of the 2006 revenue bonds. The bonds were issued to provide neighborhood revitalization to Allentown and Foster Point Sewer system. State of Washington Public Works Trust Fund Loans are a low interest rate loans available from the State of Washington Department of Commerce, Local Government & Infrastructure Division for qualifying projects and are a direct responsibility of the City. This debt is repaid by proprietary fund revenues. Public Works Trust Fund loans outstanding at year-end are as follows: • 2003 loan to install new sewers in the Duwamish neighborhood. The project upgraded water and surface water infrastructure. • 2004 loan to install new water, sewer, and surface water infrastructure in Allentown and Foster Point neighborhoods. Additionally, 2 new sewer lift stations with generators, 33 manholes and catch basins, and 15 new fire hydrants were installed. • 2004 loan constructed an underground collection system in the Cascade View neighborhood. • 2014 loan to install sewer liners in the City's commercial business district of Southcenter. Relining the sewer main avoids full excavation for a significant savings and has minimal impact to the roadway. The City is in compliance with all Washington State debt limitation statutes and bond indenture agreements. The schedules that follow summarize the long-term debt transactions of the City for the year ended December 31, 2016. 92 Totals $ 54,114,932 $ 23,952,586 $ 6,093,600 $ 3,262,718 $ 5,412,500 $ 2,037,825 $ 94,874,161 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS CHANGES IN LONG-TERM LIABILITIES SUMMARY — GOVERNMENTAL ACTIVITIES DUE TO OTHER GENERAL SPECIAL COMPENSATED OTHER POST EMPLOY- NET PENSION OBLIGATION ASSESSMENT ABSENCES GOVERNMENTS MENT BENEFITS LIABILITY TOTAL Outstanding 01/01/2016 $23,057,714 $6,082,500 $ 3,860,473 $ 6,265,200 $ 7,144,923 $11,630,656 $ 58,041,466 Added 32,990,000 2,965,804 - 2,033,913 1,313,123 39,302,840 Retired / redeemed (1,932,782) (670,000) (3,052,075) (171,600) - - (5,826,458) Outstanding 12/31/2016 $54,114,932 $5,412,500 $ 3,774,201 $ 6,093,600 $ 9,178,836 $12,943,779 $ 91,517,848 4,380,732 $ 95,898,580 Add Premiums, Subtract Discounts Total Long -Term Liabilities Debt Service to Maturity Following are schedules showing the debt service requirements to maturity for the City's long-term debt, excluding compensated absences, OPEB, and pensions. 2017 2018 2019 2020 2021 2022-2026 2027-2031 2032-2036 2037-2040 $ 5,356,428 $ 2,212,951 3,302,196 2,168,111 3,513,521 2,020,971 1,726,461 1,853,741 1,865,560 1,781,913 11,956,765 7,353,718 12,191, 000 4,738,893 14,203,000 1,822,290 $ 179,200 $ 249,088 184,800 243,173 190,800 237,069 197,200 229,039 207,200 220,332 1,158, 800 973,846 1,418, 000 706,725 1,004,800 266,367 1,552,800 137,080 $ 607,500 $ 259,939 445,000 257,655 445,000 243,638 445,000 223,613 445,000 203,588 2,225,000 705,881 800,000 143,513 $ 8,865,105 6,600,935 6,650,999 4,675,053 4,723,593 24, 374, 010 19, 998,130 17, 296,457 1,689,880 93 Governmental Activities Year Ended December 31 General Obligation Bonds Principal Interest Due to Other Governments Principal Interest Special Assessments Principal Interest Total 2017 2018 2019 2020 2021 2022-2026 2027-2031 2032-2036 2037-2040 $ 5,356,428 $ 2,212,951 3,302,196 2,168,111 3,513,521 2,020,971 1,726,461 1,853,741 1,865,560 1,781,913 11,956,765 7,353,718 12,191, 000 4,738,893 14,203,000 1,822,290 $ 179,200 $ 249,088 184,800 243,173 190,800 237,069 197,200 229,039 207,200 220,332 1,158, 800 973,846 1,418, 000 706,725 1,004,800 266,367 1,552,800 137,080 $ 607,500 $ 259,939 445,000 257,655 445,000 243,638 445,000 223,613 445,000 203,588 2,225,000 705,881 800,000 143,513 $ 8,865,105 6,600,935 6,650,999 4,675,053 4,723,593 24, 374, 010 19, 998,130 17, 296,457 1,689,880 93 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS CHANGES IN LONG-TERM LIABILITIES — GOVERNMENTAL ACTIVITIES ITEM Interest OUTSTANDING OUTSTANDING Due Within Rates Maturity Authorized 12/31/2015 ISSUED REDEEMED 12/31/16 One Year GOVERNMENTAL ACTIVITIES: Limited General Obligation (LTGO) Bonds Payable: 2008 Refunding-Streets/Facilities 4.00-6.00 12/01/19 6,180,000 2,820,000 2010 Streets / Equipment 2.00-5.41 12/01/24 5,870,000 3,970,000 2011 Refunding Streets (2003 GO) 1.25-4.00 12/01/23 4,620,000 3,780,000 2013 LTGO-MPD Pool Improve 2.00-4.00 12/01/22 1,000,000 703,714 2014 LTGO-Urban Renewal 0.85-4.86 12/01/34 3,850,000 3,709,000 2014 LTGO-Line of Credit 1 Mo. LIBOR+ 1.0% 12/01/17 2,250,000 2,250,000 2015 LTGO-Interurban, BAR 2.25-3.00 12/01/35 5,825,000 5,825,000 655,000 395,000 420,000 93,782 149,000 220,000 2,165,000 680,000 3,575,000 405,000 3,360,000 435,000 609,932 96,428 3,560,000 150,000 2,250,000 - 5,605,000 225,000 Total LTGO Bonds Payable 29,595,000 23,057,714 - 1,932,782 21,124,932 1,991,428 Unlimited General Obligation (UTGO) Bonds Payable: 2016 UTGO- Public Safety 4.50-5.00 12/01/35 77,385,000 Total UTGO Bonds Payable 77,385,000 Issuance premiums 32,990,000 32,990,000 32,990,000 32,990,000 761,523 3,719,954 100,745 4,380,732 1,115,000 1,115,000 Net Bonds Payable 106,980,000 23,819,237 36,709,954 2,033,527 58,495,664 3,106,428 Due to Other Governments 2009 Facility SCORE 3.00-6.62 01/01/39 6,898,800 6,265,200 171,600 6,093,600 179,200 Total Due Other Governments 6,898,800 6,265,200 171,600 6,093,600 179,200 Special Assessment Debt Klickitat Urban Access Project 3.150-5.375 01/15/29 6,687,500 6,082,500 670,000 5,412,500 607,500 Total Special Assessment Debt 6,687,500 6,082,500 670,000 5,412,500 607,500 Other Post-Employement Benefits Payable Net Pension Liability Compensated Absences: 7,144,923 11,630,656 3,860,473 2,033,913 1,313,123 2,965,804 3,052,075 9,178,836 12,943,779 3,774,201 86,271 Total Governmental Funds $ 120,566,300 $ 58,802,989 $43,022,794 $ 5,927,203 $ 95,898,580 $ 3,979,399 All governmental funds debt is liquidated by the general fund except for the special assessment debt and the 2009 SCORE intergovernmental debt. The special assessment debt is liquidated from assessments collected annually from property owners within boundaries of Local Improvement District #33. The 2009 SCORE debt was paid by SCORE from user fees. Due to Other Governments SCORE Public Development Authority issued General Obligation bonds in 2009 to acquire, construct, improve, and equip a consolidated correctional facility to be located in Des Moines, Washington. The City is contracted to pay 8% of the debt service of these 30 year bonds that mature in 2039. This debt is paid from the General fund. 94 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS CHANGES IN LONG-TERM LIABILITIES SUMMARY - BUSINESS -TYPE ACTIVITIES REVENUE PUBLIC WORKS BONDS TRUST FUND COMPENSATED NET PENSION UTILTIES LOANS ABSENCES LIABILITY TOTAL Outstanding 01/01/2016 $1,742,527 $ 5,646,458 $ 334,004 $ 2,095,180 $ 9,818,169 Added - 290,095 444,223 734,318 Retired / redeemed (144,823) (599,468) (325,740) (1,070,031) Outstanding 12/31/2016 $ 1,597,704 $ 5,046,990 $ 298,359 $ 2,539,403 $ 9,482,455 Total Long -Term Liabilities $ 9,482,455 Debt Service to Maturity Following are schedules showing the debt service requirements to maturity for the City's long-term debt, excluding compensated absences and net pension liability. 2017 2018 2019 2020 2021 2022-2026 2027-2031 2032 $ 143,282 $ 37,386 149,659 34,033 150,736 30,531 156,614 27,004 157,178 23,339 840,235 59,829 $ 599,468 $ 25,235 599,468 22,238 599,468 19,240 599,468 16,243 599,447 13,246 1,802,601 25,232 205,875 4,118 41,195 206 $ 805,371 805,398 799,976 799,329 793,210 2,727,897 209,992 41,401 Totals $ 1,597,704 $ 212,124 $ 5,046,990 $ 125,757 $ 6,982,576 95 Business -Type Activities Year Ended December 31 Revenue Bonds Principal Interest Public Works Trust Fund Loans Principal Interest Total 2017 2018 2019 2020 2021 2022-2026 2027-2031 2032 $ 143,282 $ 37,386 149,659 34,033 150,736 30,531 156,614 27,004 157,178 23,339 840,235 59,829 $ 599,468 $ 25,235 599,468 22,238 599,468 19,240 599,468 16,243 599,447 13,246 1,802,601 25,232 205,875 4,118 41,195 206 $ 805,371 805,398 799,976 799,329 793,210 2,727,897 209,992 41,401 Totals $ 1,597,704 $ 212,124 $ 5,046,990 $ 125,757 $ 6,982,576 95 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS CHANGES IN LONG-TERM LIABILITIES - BUSINESS -TYPE ACTIVITIES Interest OUTSTANDING OUTSTANDING Due Within ITEM Rates Maturity Authorized 12/31/2015 ISSUED REDEEMED 12/31/16 One Year BUSINESS -TYPE ACTIVITIES: Bonds Payable: 2015 Water/Sewer/SWM Refunding 2.34 12/01/26 1,742,527 1,742,527 144,823 1,597,704 143,282 Total Bonds Payable 1,742,527 1,742,527 144,823 1,597,704 143,282 Public Works Trust Fund Loans: 2003 Loan-Water/Sewer 0.50 06/01/21 273,870 86,725 - 14,454 72,271 14,454 2003 Loan -Surface Water 0.50 06/01/21 219,725 69,578 - 11,597 57,982 11,597 2004 Loan-Water/Sewer 0.50-2.00 06/01/24 5,016,000 2,455,976 - 272,886 2,183,090 272,886 2004 Loan -Surface Water 0.50-2.00 06/01/24 684,000 334,906 37,212 297,694 37,212 2004 Loan -Surface Water 1.00 06/01/24 4,196,056 1,999,297 - 222,144 1,777,153 222,144 2014 Loan -Sewer 0.5 06/01/32 750,000 699,975 41,175 658,800 41,175 Total Public Works Trust Fund Loans 11,139,651 5,646,458 - 599,468 5,046,990 599,468 Net Pension Liability 2,095,180 Compensated Absences 444,223 - 2,539,403 334,004 290,095 325,740 298,359 34,064 Total Business -Type Activities $ 12,882,178 $ 9,818,169 $ 734,318 $ 1,070,031 $ 9,482,455 $ 776,814 TOTAL ALL FUNDS $133,448,478 $ 68,621,157 $ 43,757,112 $ 6,997,234 $ 105,381,036 $ 4,756,213 LONG-TERM LIABILITIES RECONCILIATION Governmental Business -Type Balance Activities Activities 12-31-16 General obligation bonds $54,114,932 $ $ 54,114,932 Special assessment bonds 5,412,500 - 5,412,500 Revenue bonds - 1,597,704 1,597,704 Public Works Trust Fund loans 5,046,990 5,046,990 Due to Other Governments 6,093,600 6,093,600 Employee leave benefits 3,774,201 298,359 4,072,560 Net Premiums/Discounts 4,380,732 4,380,732 Other Post -Employment Benefits 9,178,836 9,178,836 Net Pension Liability 12,943,779 2,539,403 15,483,182 Total long-term debt $95,898,580 $ 9,482,455 $ 105,381,036 Debt Limit Capacities State law provides that debt cannot be incurred in excess of the following percentages of the value of the taxable property of the City: 1.5% without a vote of the people; 2.5% with a vote of the people; 5.0% with a vote of the people, provided the indebtedness in excess of 2.5% is for utilities; 7.5% with a vote of the people, provided the indebtedness in excess of 5.0% is for parks or open space development. 96 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS At December 31, 2016, the debt limits for the City were as follows: SUMMARY OF DEBT LIMIT CAPACITIES Item Without a Vote 1.5% With a Vote of the People 2.5% 5.0% 7.5% Legal Limit Outstanding Net Indebtedness $ 86, 048, 523 $ 143, 414, 206 $ 286, 828, 411 $ 430, 242, 617 63,525,489 63,525,489 63, 525, 489 63, 525, 489 Margin Available $ 22,523,035 $ 79,888,717 $ 223,302,923 $ 366,717,128 Prior Year Defeasance of Debt In 2015, the City defeased water and sewer bonds by placing the proceeds of the new bonds in an irrevocable trust account to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City's financial statements. At December 31, 2016, $1,910,000 of the defeased bonds were outstanding. Long-term Liabilities other than debt Claims are paid from one or more funds based on the nature of the transaction. Employees' compensable leave is the City's liability for all unused vacation and sick leave and unpaid overtime accrued by employees and, payable under specified conditions. This obligation is paid only at the time of termination, usually from the same funding source(s) from which the employee's salary or wage compensation was paid. The City does not report a liability for termination benefits because it is not reasonably estimable. Local Improvement District No. 33 Tukwila Urban Access Improvement Project Local Improvement District (LID) No. 33 was formed on November 16, 2009 by Ordinance No. 2260. The project was designed to improve congestion within the City's Urban Center. The project included a partial lid over Southcenter Parkway, removal of conflicting turning movements, and the widening of Southcenter Parkway. Construction for the project began in March 2011 and was completed in October 2011. The project was closed out and accepted as complete by City Council on February 19, 2013. A variety of funding sources were used to pay for the project including federal and state grants, impact fees, City funds, a right-of-way donation, and special assessments. The City chose to fund the project internally, rather than obtain external, short-term financing then apply special assessments to property owners after the project was completed. Fund 104 Arterial Streets, where the project was accounted for, loaned the project funds as needed using a draw method at an interest rate of 1.80%. This loan was repaid in 2013 when special assessment bonds were issued. The City confirmed the assessment roll with a final assessment of $9,475,894. The prepayment period for the special assessments was open in the fall of 2013 and during that time the City received $2,788,350 in prepayments. Once the prepayment window closed, the City issued bonds for the remaining outstanding assessments in the amount of $6,687,500. From these proceeds, the City deposited $668,750 to the guaranty fund. The third of 15 annual installments for the assessments was due by October 16, 2016. As of December 31, 2016, all LID Special Assessments were current, nothing was delinquent. During 2016, several property owners chose to pay the assessment in full. Because of the additional principal payments received, the 97 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS City has enough funds in the LID No. 33 funds to meet debt service requirements in 2017 and pay $157,500 additional principal. Estimated Arbitrage Rebate The Federal Tax Reform Act of 1986 requires issuers of tax-exempt debt of over $5 million to make payments to the United States Treasury of investment interest received at yields that exceed the issuer's tax-exempt borrowing rates. Payments of arbitrage rebate amounts due under these regulations must be made to the U.S. Treasury every five years. The City's estimated rebatable arbitrage amount as of December 31, 2016 is $0 for its tax-exempt bond issues subject to the Tax Reform Act. NOTE 11 — COMMITMENTS Property Sale Commitment. In December 2014, the City agreed to a sell the land parcel commonly known as the Longacre Property for $1.6 million. The sale is contingent upon the suitability of the property as determined by the purchaser. The examination period to determine suitability expires July 1, 2017. Construction Commitments. As of December 31, 2016, the City share of contractual obligations on construction projects total $13,194,339. Governmental Activities Remaining Commitment 42nd Ave S Phase III/Gilliam Creek SSWM $ 207,617 53rd Ave S Street Improvements 389,019 Public Safety Plan 2,694,716 Tukwila 205 Levee Certification Phase 1 & 2 316,788 Tukwila Urban Center - Pedestrian/Bicyle Bridge 5,127,518 Boeing Access Road Bridge 185,128 Strander Blvd Extension Phase 3 125,410 Duwamish Gardens 303,964 Other governmental projects 559,440 Total Governmental Activities $ 9,909,599 Business -Type Activties Projects Remaining Commitment Andover Park East Water/Sewer Macadam Rd S Water Upgrade East Marginal Way South Storm Pipe Replacement Other Utility related projects Total Business -Type Activities $ 3,154, 507 81,384 36,247 12,602 $ 3,284,740 Total Construction Commitments $ 13,194,339 98 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS NOTE 12 — POTENTIAL POLLUTION REMEDIATION AND OTHER LIABILITIES There are several lawsuits in which the City is involved. The City Attorney estimates that the potential claims against the City to have no material financial impact. The City of Tukwila may share in potential liability under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") for sediment contamination within the Lower Duwamish Waterway Superfund site. The Environmental Protection Agency has estimated the total costs to be $342 million with 120 parties sharing in the liability. While it is impossible to accurately estimate the City's potential CERCLA liability at this time, the relatively small size of the City's storm water system within the Lower Duwamish Waterway Superfund site area, as well as the system's recent establishment in 1989, gives reason to the City to believe that its share of the potential liability is not significant and not estimable. NOTE 13 — RISK MANAGEMENT The city of Tukwila is a member of the Washington Cities Insurance Authority (WCIA). Utilizing Chapter 48.62 RCW (self-insurance regulation) and Chapter 39.34 RCW (Interlocal Cooperation Act), nine cities originally formed WCIA on January 1, 1981. WCIA was created for the purpose of providing a pooling mechanism for jointly purchasing insurance, jointly self-insuring, and/or jointly contracting for risk management services. WCIA has a total of 168 Members. New members initially contract for a three-year term, and thereafter automatically renew on an annual basis. A one-year withdrawal notice is required before membership can be terminated. Termination does not relieve a former member from its unresolved loss history incurred during membership. Liability coverage is written on an occurrence basis, without deductibles. Coverage includes general, automobile, police, errors or omissions, stop gap, employment practices and employee benefits liability. Limits are $4 million per occurrence in the self-insured layer, and $16 million in limits above the self-insured layer is provided by reinsurance. Total limits are $20 million per occurrence subject to aggregates and sublimits. The Board of Directors determines the limits and terms of coverage annually. Insurance for property, automobile physical damage, fidelity, inland marine, and boiler and machinery coverage are purchased on a group basis. Various deductibles apply by type of coverage. Property coverage is self-funded from the members' deductible to $750,000, for all perils other than flood and earthquake, and insured above that to $300 million per occurrence subject to aggregates and sublimits. Automobile physical damage coverage is self-funded from the members' deductible to $250,000 and insured above that to $100 million per occurrence subject to aggregates and sublimits. In-house services include risk management consultation, loss control field services, and claims and litigation administration. WCIA contracts for certain claims investigations, consultants for personnel and land use issues, insurance brokerage, actuarial, and lobbyist services. WCIA is fully funded by its members, who make annual assessments on a prospectively rated basis, as determined by an outside, independent actuary. The assessment covers loss, loss adjustment, and administrative expenses. As outlined in the interlocal, WCIA retains the right to additionally assess the membership for any funding shortfall. An investment committee, using investment brokers, produces additional revenue by investment of WCIA's assets in financial instruments which comply with all State guidelines. A Board of Directors governs WCIA, which is comprised of one designated representative from each member. The Board elects an Executive Committee and appoints a Treasurer to provide general policy direction for the 99 CITY OF TUKWILA: 2016 CAFR NOTES TO THE FINANCIAL STATEMENTS organization. The WCIA Executive Director reports to the Executive Committee and is responsible for conducting the day to day operations of WCIA. The City insures its buildings, equipment, and vehicle property insurance with WCIA. They self -fund up to $250,000 with standard property insurance purchased above that amount. Traveler's insures boiler machinery and provides for employee dishonesty coverage. The City of Tukwila has a Risk Management and a Safety Committee to oversee risk management. In addition, the WCIA provides support for a proactive risk analysis program and a loss control manual. There were no significant reductions in insurance coverage in the past year. During the year under audit and in the past three years, no settlement has exceeded insurance coverage. The City self -insures for unemployment benefits. This is budgeted each year and the City paid $43,488 in unemployment in 2016. This expense is budgeted in the Finance Department within the general fund and no reserves are allocated because of the limited liability and historical cost. The City also self -insures for medical, dental and other health care benefits. A third -party administrator, Healthcare Management Administrators, Inc., provides claims administration. The City has a stop -loss policy with Sun Life Insurance Company, which provides individual limits of $175,000 and a plan limit of $8,326,642 in 2016. Each fund contributes an appropriate amount each year to pay premiums and claims. Liabilities include an actuarially determined amount for claims that have been incurred but not reported (IBNR's) and a contingency reserve equal to 2.5 times the IBNR liability. The IBNR liability is estimated using actuarial methods. Based on results as well as a review of actual run -out, average lag days of 54.9 days for medical, 19.6 days for pharmacy, 32.2 days for dental, and 48.7 days for vision were selected. Using average lag days and net adjusted paid claims, the IBNR liability was estimated as of December 15, 2016. Next, the estimated IBNR liability as of December 31, 2016 was developed by trending the December 15, 2016 estimates to year-end. No explicit margin for claims fluctuations was added because the amount of the reserve in the fund balance is sufficient to cover expected claims fluctuations. Administrative costs were then added. The following table reflects changes in the balances of claims liabilities for 2016 and 2015. SUMMARY OF HEALTH CARE CLAIM LIABILITIES ITE M Active Employees Retired Employees LEOFF I 2016 2015 2016 2015 Claim Liabilities at Beginning of Year Claim expenses: Current year and changes in estimates Claim payments and expenses Claim Liabilities at End of Year NOTE 14 — SUBSEQUENT EVENT $ 1,947,500 $ 2,260,000 $ 221,250 $ 285,750 5,938,336 5,561,504 524,274 134,050 (6,027,586) (5,874,004) (554,274) (198,550) $ 1,858,250 $ 1,947,500 $ 191,250 $ 221,250 In June 2017, the City Council approved an ordinance to sell bonds in July up to the amount of $8.8 million. Proceeds will be used to fund two residential sidewalk projects. 100 CITY OF TUKWILA: 2016 CAFR REQUIRED SUPPLEMENTAL INFORMATION CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL GENERAL FUND FOR THE YEAR ENDED DECEMBER 31,2016 Original Final Budget Budget (Gaap Basis) (Gaap Bais) Actual Results Variance With Final Budget Positive (Negative) REVENUES: Taxes $ 43,668,417 $ 45,268,417 $ 45,886,761 $ 618,344 Licenses and permits 2,165,661 2,140,110 2,129,221 (10,889) Intergovernmental 4,785,929 4,570,473 4,498,683 (71,790) Charges for services 2,441,464 3,402,412 3,286,105 (116,307) Fines and Foreitures 217,198 292,380 318,459 26,079 Investment earnings 89,731 129,731 233,544 103,813 Miscellaneous 97,288 97,288 214,444 117,156 Total Revenues 53,465,688 55,900,811 56,567,215 666,404 EXPENDITURES: Current: General Government 8,206,283 8,208,474 8,315,631 (107,157) Economic environment 4,465,648 4,710,648 4,070,805 639,843 Physical environment 2,072,847 2,015,847 1,955,028 60,819 Public Safety 28,200,194 30,111,895 29,100,506 1,011,389 Culture and recreation 4,228,863 4,361,063 4,408,302 (47,239) Transportation 3,162,762 3,162,762 2,879,996 282,766 Capital outlay 39,040 914,740 810,180 104,560 Total Expenditures 50,375,637 53,485,429 51,540,446 1,944,983 Excess Of Revenues And Expenditures 3,090,051 2,415,382 5,026,769 2,611,387 OTHER FINANCING SOURCES (USES): Sales of capital assets Transfers in Transfers out 1,600,000 2,075,000 (7,153,791) 2,075,000 (4,325,831) - (2,075,000) (4,325,831) Total Other Financing Sources And Uses (3,478,791) (2,250,831) (4,325,831) (2,075,000) Net change in fund balances Fund balances - beginning Fund Balances - Ending (388,740) 164,551 700,938 15, 404, 983 16, 962, 983 18, 330, 806 536,387 1,367,823 $ 15,016,243 $ 17,127,534 $ 19,031,744 $ 1,904,210 101 CITY OF TUKWILA: 2016 CAFR REQUIRED SUPPLEMENTAL INFORMATION NOTES TO REQUIRED SUPPLEMENTARY INFORMATION The City of Tukwila budgets its funds in accordance with the Revised Code of Washington 35A.33. In compliance with the code, biennial budgets are adopted for the general fund and special revenue funds. For governmental funds, there are no substantial differences between the budgetary basis and generally accepted accounting principles. Budgetary accounts are integrated in fund ledgers for all budgeted funds, but the financial statements include budgetary comparisons for biennially budgeted governmental funds only. Budgets established for proprietary and fiduciary funds are "management budgets" and are not legally required to be reported and, as such, are not reported in the CAFR. The biennial appropriated budgets are adopted at the fund level and the budgets constitute the legal authority for expenditures at that level. Subsidiary revenue and expenditure records are used to compare the budgeted amounts with actual revenues and expenditures. As a management control device, the subsidiary ledgers monitor expenditures for individual functions and activities by object class. Any unexpended appropriation balances lapse at the end of the biennium. The City of Tukwila's budget procedures are mandated by RCW 35A.33. The steps in the budget process are as follows: 1) Prior to November 1 on even numbered years, the Mayor submits a proposed budget to the City Council. This budget is based on priorities established by the Council and estimates provided by the City departments during the preceding months, and balanced with revenue estimates made by the Mayor. 2) The City Council conducts public hearings on the proposed budget in November and December. 3) The Council makes its adjustments to the proposed budget and adopts by ordinance a final balanced budget no later than December 31. 4) The final operating budget as adopted is published and distributed within the first month of the following year. Copies of the budget are made available to the public. The City Council must approve by ordinance any amendments that increase the total for the fund. Budget amounts presented in the basic financial statements include both the original amounts and the final amended budget as approved by the City Council. Expenditure Categories General Government Includes administration, finance, municipal court, attorney, and city clerk activities. Public Safety Includes all police and fire activities. Physical Environment Includes expenditures for the public works activities not chargeable to the enterprise funds. Transportation Includes all street and arterial street maintenance and construction. Economic Environment Reflects the planning and building inspection activities. Culture and Recreation Includes expenditures related to parks and recreational activities. The information presented in the following required schedules was determined as part of the actuarial valuations at the dates indicated. 102 CITY OF TUKWILA: 2016 CAFR REQUIRED SUPPLEMENTAL INFORMATION COST SHARING MULTIPLE EMPLOYER DEFINED BENEFIT PENSION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY PERS 1 Fiscal Year Ending June 30, 2015 June 30, 2016 PERS 2/3 Employer's proportion of the net pension liability (asset) 0.135736% 0.131354% Employer's proportionate share of the net pension liability $ 7,100,255 $ 7,054,328 State's proportionate share of the net pension liability (asset) associated with the employer Total: Proportionate share of the net pension liability (asset) $ 7,100,255 $ 7,054,328 Employer's proportionate share of the net pension liability as a Employer's covered percentage of covered employee payroll employee payroll $ 15,561,015 $ 15,736,921 45.63% 44.83% Plan fiduciary net position as a percentage of the total pension liability 59.10% 57.03% Fiscal Year Ending June 30, 2015 June 30, 2016 PSERS Employer's Employer's proportion of the net proportionate share pension liability of the net pension (asset) liability 0.173592% $ 6,202,541 0.166622% $ 8,389,286 State's proportionate share of the net pension liability (asset) associated with the employer Total: Proportionate share of the net pension liability (asset) $ 6,202,541 $ 8,389,286 Employer's proportionate share of the net pension liability as a Employer's covered percentage of covered employee payroll employee payroll $ 15,406,589 $ 15,579,718 40.26% 53.85% Plan fiduciary net position as a percentage of the total pension liability 89.20% 85.82% Fiscal Year Ending June 30, 2015 June 30, 2016 LEOFF 1 Employer's Employer's proportion of the net proportionate share pension liability of the net pension (asset) liability State's proportionate share of the net pension liability (asset) associated with the employer 0.052748% $ 0.048428% $ 9,628 $ 20,581 $ Total: Proportionate share of the net pension liability (asset) $ 9,628 $ 20,581 Employer's covered employee payroll $ 154,426 $ 157,203 Employers proportionate share of the net pension liability as a percentage of covered employee payroll 6.23% 13.09% Plan fiduciary net position as a percentage of the total pension liability 95.08% 90.41 % Fiscal Year Ending June 30, 2015 June 30, 2016 LEOFF 2 State's proportionate share Employers Employer's of the net pension proportion of the net proportionate share liability (asset) pension liability of the net pension associated with the (asset) 0.077944% 0.077890% liability $ (939,397) $ $ (802,490) $ employer Total: Proportionate share of the net pension liability Employer's covered (asset) employee payroll $ (939,397) $ 76,144 $ (802,490) $ Employer's proportionate share of the net pension liability as a percentage of covered employee payroll -1233.71% 0.00% Plan fiduciary net position as a percentage of the total pension liability 127.36% 123.74% Fiscal Year Ending June 30, 2015 June 30, 2016 State's proportionate share Employer's Employer's of the net pension Total: Proportionate proportion of the net proportionate share liability (asset) share of the net pension liability of the net pension associated with the pension liability Employer's covered (asset) liability employer (asset) employee payroll 0.519159% $ (5,335,916) $ (2,123,832) $ (7,459,748) $ 15,113,237 0.510663% $ (2,970,169) $ (1,936,334) $ (4,906,503) $ 15,480,062 Employers proportionate share of the net pension liability as a percentage of covered employee payroll -49.36% -31.70% * Until a full 10 -year trend is compiled, govemments should present information only for those years for which information is available. 103 Plan fiduciary net position as a percentage of the total pension liability 111.67% 106.04% CITY OF TUKWILA: 2016 CAFR REQUIRED SUPPLEMENTAL INFORMATION SCHEDULE OF EMPLOYER CONTRIBUTIONS PERS 1 Fiscal Year Ending Statutorily Determined Contribution Less: Contributions in Relation to the Statutorily Determined Contribution Copntribution as a Percentage of Contribution Covered Employee Covered Employee Deficiency (Excess) Payroll Payroll December 31, 2015 $ December 31, 2016 $ PERS 2/3 686,881 $ 752,418 $ (686, 881) $ (752,418) $ $ 15,654,255 $ 15,777,881 4.39% 4.77% Fiscal Year Ending Statutorily Determined Contribution Less: Contributions in Relation to the Statutorily Determined Contribution Contribution Deficiency (Excess) Covered Employee Payroll Copntribution as a Percentage of Covered Employee Payroll December 31, 2015 $ December 31, 2016 $ PSERS 873,248 $ 972,612 $ (873,248) $ (972,612) $ $ 15,498,171 $ 15,616,400 5.63% 6.23% Fiscal Year Ending Statutorily Determined Contribution Less: Contributions in Relation to the Statutorily Determined Contribution Contribution Deficiency (Excess) Covered Employee Payroll Copntribution as a Percentage of Covered Employee Payroll December 31, 2015 $ December 31, 2016 $ LEOFF 2 10,105 $ 10,642 $ (10,105) $ (10,642) $ $ $ 156,084 161,481 6.47% 6.59% Fiscal Year Ending Statutorily Determined Contribution Less: Contributions in Relation to the Statutorily Determined Contribution Contribution Deficiency (Excess) Covered Employee Payroll Copntribution as a Percentage of Covered Employee Payroll December 31, 2015 $ December 31, 2016 $ 776,719 $ 787,110 $ (776,719) $ (787,110) $ $ 15,380,541 $ 15,586,296 5.05% 5.05% * Until a full 10 -year trend is compiled, governments should present information only for those years for which information is available. 104 CITY OF TUKWILA: 2016 CAFR REQUIRED SUPPLEMENTAL INFORMATION FIREMEN'S PENSION TRUST FUND SCHEDULE OF FUNDING PROGRESS (Rounded to thousands) Actuarial Unfunded Actuarial UAAL as a Actuarial Actuarial Value Accrued Accrued Liabilities Funded Covered Percentage of Valuation Date of Assets Liabilities (UAAL) Ratio Payroll Covered Payroll January 1, 2005 $1,265 $1,182 ($83) 107% $608 N/A January 1, 2007 1,336 1,310 (26) 102 463 N/A January 1, 2009 1,445 1,610 165 90 442 37 January 1, 2011 1,430 1,582 152 90 0 N/A January 1, 2013 1,416 1,296 (120) 109 0 N/A January 1, 2014* 1,409 1,853 444 76 0 N/A January 1, 2015 1,413 1,830 417 77 0 N/A January 1, 2016 1,417 1,445 28 99 0 N/A January 1, 2014 change in actuary and adoption of GASB 67 Schedule of Changes in the City's Net Pension Liability and Related Ratios Total Pension Liability 2014 2015 2016 Service Cost $ $ Interest 50,098 49,716 49,332 Changes of benefit terms Differences between expected and actual experience (2,442) (311,190) Changes in assumptions (62,728) Benefit payments, included refunds of employee contributions (61,863) (58,277) (59,988) Net change in total pension liability (11,765) (11,003) (384,574) Total pension liability — beginning 1,852,693 1,840,929 1,829,926 Total pension liability — ending (a) $ 1,840,929 $ 1,829,926 1,445,352 Plan Fiduciary Net Position Contributions — employer $ 64,114 $ 63,590 66,360 Contributions — employee 105 CITY OF TUKWILA: 2016 CAFR REQUIRED SUPPLEMENTAL INFORMATION Net investment income 1,805 2,667 7,988 Benefit payments, including refunds of employee contributions Administrative expense (61,863) (58,277) (59,988) (4,500) (4,500) Other Net change in plan fiduciary net position 4,056 3,481 9,861 Plan fiduciary net position — beginning Plan fiduciary net position — ending (b) City's net pension liability — ending (a) — (b) 1,408,970 1,413,026 1,416,506 1,413,026 1,416,506 1,426,367 $ 427,903 $ 413,420 18,985 Plan fiduciary net position as a percentage of the total pension liability 76.76% 77.41% 98.69% Covered -employee payroll $ City's net pension liability as a percentage of covered -employee payroll n/a n/a Schedule of Employer Contributions Fiscal Year Ending Statutorily Determined Contribution Less: Contributions in Relation to the Statutorily Determined Contribution Contribution Deficiency (Excess) Copntribution as a Percentage of Covered Employee Covered Employee Payroll Payroll December 31, 2007 December 31, 2008 December 31, 2009 December 31, 2010 December 31, 2011 December 31, 2012 December 31, 2013 December 31, 2014 December 31, 2015 December 31, 2016 $ 50,555 52,571 48,537 49,989 54,865 52,249 56,962 64,114 63,590 66,360 $ 50,555 52,571 48,537 49,989 54,865 52,249 56,962 64,114 63,590 66,360 106 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a CITY OF TUKWILA: 2016 CAFR REQUIRED SUPPLEMENTAL INFORMATION Contributions are a portion of State Fire Insurance Premiums. Schedule of Investment Returns Schedule of Investment Returns Annual money -weighted rate of return, net of investment expense 2011 0.12% 2012 0.20% 2013 0.17% 2014 0.13% 2015 0.19% 2016 0.56% Ten-year schedule required. However, until a full 10 -year trend is compiled, information is presented for those years where information is available. 107 CITY OF TUKWILA: 2016 CAFR REQUIRED SUPPLEMENTAL INFORMATION RETIREE MEDICAL AND LONG-TERM CARE BENEFITS FOR LEOFF 1 EMPLOYEES SCHEDULE OF FUNDING PROGRESS (Rounded to thousands) Actuarial Unfunded Actuarial UAAL as a Actuarial Value Accrued Accrued Liabilities Funded Covered Percentage of Valuation Date of Assets Liabilities (UAAL)" Ratio Payroll Covered Payroll January 1, 2008 $0 $16,103 $16,103 0% $581 4% January 1, 2011 0 14,805 14,805 0 371 3 January 1, 2014 0 21,264 21,264 0 195 1 January 1, 2015 0 29,538 29,538 0 132 0 January 1, 2016 0 30,186 30,186 0 0 0 January 1, 2017 0 29,054 29,054 0 0 0 SCHEDULE OF EMPLOYER CONTRIBUTIONS Annual Required Fiscal Employer Contributions Percentage of Year Ending Contributions (ARC) ARC Contributed December31, 2008 $557,103 $1,366,284 41% December 31, 2009 $335,265 $1,366,284 25 December 31, 2010 317,771 1,366,284 23 December 31, 2011 335,090 1,264,522 26 December 31, 2012 404,007 1,264,522 32 December 31, 2013 878,755 1,264,522 69 December 31, 2014 905,974 1,903,679 48 December 31, 2015 477,292 2,585,779 18 December 31, 2016 275,530 2,765,486 18 108 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES Nonmajor Governmental Funds Special Revenue Funds Special Revenue Funds are established to account for proceeds of specific taxes or other specific revenue sources that are legally restricted to or committed for expenditures for particular purposes. • Hotel/Motel Tax Fund — Established to account for the proceeds of a 1% special excise tax on overnight lodging in Tukwila. This tax provides resources to support tourism development and promotion activities in Tukwila. • Drug Seizure Fund —Accounts for monies and proceeds from the sale of property seized during drug and felony investigations. These funds are legally required to be expended on drug and felony related police activities. Debt Service Funds Debt Service Funds are account for the accumulation of resources for and the payment of principal and interest on general obligation and special assessment bonds. • Local Improvement Guaranty Fund — Holds reserve funds required under state law to provide a means of paying local improvement district (LID) bond debt service obligations in the event there are insufficient resources in the LID debt service fund. • Limited Tax G.O. Refunding 2003 — Accounts for the principal and interest payments for the refunded Limited Tax G.O. 1994 Bonds for the construction of a new Community Center and the replacement of Fire Station #53. This bond has been paid off. • Limited Tax G.O. Refunding 2008 — Accounts for the principal and interest payments for the refunded Limited Tax G.O. 1999 Bonds which were issued for the purchase of a City Hall annex, known as the 6300 Building, and the purchase of land and payment of other economic revitalization costs for the future Tukwila Village project. • Limited Tax G.O. SCORE — Accounts for the principal and interest payments required per the debt service schedule for the City's portion of the construction of a correctional facility along with six other cities. • Limited Tax G.O. 2010 — Accounts for the principal and interest payments for the bonds issued for the construction and realignment of a major arterial street, Southcenter Parkway, in the Tukwila South Annexation area and for the cost of emergency preparedness capital and other equipment. • Limited Tax G.O. Refunding 2010 — This fund provides payment to Valley Communications Center for principal and interest on bonds issued in April 2010 to refund bonds that were originally issued in 2000 to pay for the new Valley Communications Center. This debt reflects Tukwila's share with four other cities. Each of the five cities was responsible for one-fifth of the annual debt service. The final payment was made in 2015. • Limited Tax G.O. Refunding 2011 — Accounts for the principal and interest payments for the portion of the Limited Tax G.O. 2003 Bonds refunded and pertaining to arterial street projects. 109 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES • Limited Tax G.O. 2013 — Accounts for principal and interest on bonds issued for the renovation of the Tukwila Metropolitan Park District swimming pool. The proceeds were loaned to the District; the District reimburses the City for the debt service based on an interlocal agreement between the two entities. • Limited Tax G.O Fund — Accounts for principal and interest payments on bonds issued in 2014 for the Tukwila International Boulevard Revitalization project and for bonds issued in 2015 for the Interurban Avenue South improvement and Boeing Access Road Bridge retrofit projects. Capital Project Funds Capital Project Funds account for the acquisition or development of major capital facilities, except those projects financed by proprietary funds. Sources of revenue to these funds include general obligation bond proceeds, federal and state grants, real estate excise taxes, and transfers from the General Fund. • Residential Street — Established in accordance with RCW 35A.37.010 to account for maintenance and improvement of the City's residential streets. Major sources of support are the State -levied tax on motor vehicle fuels distributed to Tukwila, to be used for City street purposes, state and federal grants, and transfers in from the General Fund. • Land Acquisition, Recreation, and Park Development — Accounts for the acquisition of land, development of land, and construction of park facilities. • Facilities (Urban Renewal) — Established in 1988, this fund accounts for costs associated with property owned by the City that will be utilized for redevelopment or renewal purposes. • General Government Improvements — This fund was established in 1992 to provide funding for minor capital improvements not related to parks, land acquisition, or major building replacements. • Fire Improvements — This fund is to be used for the acquisition of land, development of land and construction of fire facilities. Revenue for this fund comes primarily from fire impact fees. 110 Total Liabilities and Fund Balances $ 1,684,188 $ 1,063,774 $ 14,033,247 $ 16,781,208 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING BALANCE SHEET NON -MAJOR GOVERNMENT FUNDS DECEMBER 31, 2016 Total Total Total Total Special Revenue Debt Service Capital Projects Governmental Funds Funds Funds Funds ASSETS: Cash and cash equivalents $ 1,096,397 $ 1,063,774 $ 4,382,031 $ 6,542,202 Taxes receivable 84,316 536,175 620,491 Other receivables 6,600 6,600 Due from other governmental units - 1,163,418 1,163,418 Restricted Assets: Cash and cash equivalents 503,475 503,475 Notes receivable - 300,022 300,022 Capital assets held for resale 7,645,000 7,645,000 Total Assets $ 1,684,188 1,063,774 14,033,247 16,781,208 LIABILITIES AND FUND BALANCES: Current liabilities Accounts payable Accrued w ages and benefits Customer deposit 218,091 464,675 6,799 175,644 682,766 6,799 175,644 Total Liabilities 218,091 647,118 865,209 DEFERRED INFLOWS OF RESOURCES Unavailable revenue -impact fee TOTAL DEFERRED INFLOWS OF RESOUR( Fund balances: Nonspendable Restricted Assigned Total Fund balances 306,622 306,622 1,466,097 668,849 394,925 306,622 306,622 7,645,000 4,078,143 1,356,364 7,645,000 6,213,088 1,751,288 1,466,097 1,063,774 13, 079, 507 15, 609, 377 111 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON -MAJOR GOVERNMENT FUNDS FOR THE YEAR ENDED DECEMBER 31,2016 Total Special Revenue Funds Total Debt Service Funds Total Capital Projects Funds Total Governmental Funds REVENUES: TAXES: Taxes Charges for services Intergovernmental Investment earnings Miscellaneous Total Revenues EXPENDITURES: Current: General government Economic environment Physical environment Public safety Cultural and Recreation Transportation Debt service Principal Interest Capital Outlay Total Expenditures Exces (deficiency) of revenues Over (Under) Expenditures $ 710,267 $ 1,607 624,279 62,091 2 $ 1,417,534 183,867 1,863,750 8,943 $ 2,127,801 183,867 1,925,841 10,553 624,279 1,336,153 422,405 59,303 18,707 62,093 3,474,094 1,932,782 812,540 1,090,359 3 135,038 261,641 2,026,808 4,872,341 1,090,359 422,405 3 59,303 135,038 261,641 1,932,782 812,540 2,045,515 500,415 2,745,321 3,513,849 6,759,585 835,738 (2,683,228) (39,755) (1,887,245) OTHER FINANCING SOURCES (USES): Transfers in Total Other Financing Sources And Uses Net change in fund balances Fund balances - beginning Fund Balances - Ending 2,874,831 400,000 3,274,831 2,874,831 835,738 191,604 630,359 872,169 400,000 360,245 12,719,262 3,274,831 1,387,586 14,221,790 $ 1,466,097 $ 1,063,774 $ 13,079,507 $ 15,609,378 112 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING BALANCE SHEET NON -MAJOR SPECIAL REVENUE FUNDS DECEMBER 31, 2016 Hotel/Motel Tax Drug Seizure Total Special Revenue Funds ASSETS: Cash and cash equivalents Taxes receivables Cash and cash equivalents Total Assets LIABILITIES AND FUND BALANCES: Accounts payable Total Liabilities Fund balances: Restricted Total Fund Balances $ 1,049,539 $ 46,858 $ 1,096,397 84,316 84,316 503,475 503,475 1,133,855 550,333 1,684,188 221,297 (3,206) 218,091 221,297 912,558 (3,206) 218,091 553,539 1,466, 097 912,558 553,539 1,466,097 Total Liabilities and Fund Balances $ 1,133,855 $ 550,333 $ 1,684,188 113 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON -MAJOR SPECIAL REVENUE FUNDS FOR THE YEAR ENDED DECEMBER 31,2016 Total Special Revenue Hotel/Motel Tax Drug Seizure Funds REVENUES: Taxes $ 710,267 $ - $ 710,267 Investment earnings 1,576 31 1,607 Miscellaneous - 624,279 624,279 Total Revenue 711,843 EXPENDITURES: Current: Public safety Economic environment Capital outlay Total Expenditures Excess (deficiency) of revenues 624,310 1,336,153 - 59,303 59,303 422,405 - 422,405 - 18,707 18,707 422,405 78,010 500,415 Over (Under) Expenditures 289,438 546,300 835,738 Net change in fund balances 289,438 546,300 835,738 Fund balances - beginning 623,120 7,239 630,359 Fund Balances - ending $ 912,558 $ 553,539 $ 1,466,097 114 PTotal Liabilities and Fund Balances $ 669,148 $ 195 $ 416 $ 2 $ 33,940 $ 794 $ 539 $ $ 358,740 $ 1,063,774 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING BALANCE SHEET NON -MAJOR DEBT SERVICE FUNDS DECEMBER 31, 2016 Special LTGO LTGO Score LTGO Valley LTGO LTGO LTGO Bond Total Assesment Refunding Refunding LTGO Bonds Com Refunding Bonds Fund Bonds Bonds Bonds Bonds 2010** LTGO Bonds 2013 Nonmajor Guaranty 2003 (Ref 2008 (Ref 2009* Refunding 2011 (Ref Debt Service Fund 2013 1994) 1999) Bonds 2003) Funds 2010 (Ref 2000) ASSETS: Cash and cash equivalents $ 669,150 $ 195 $ 416 $ 2 $ 33,940 $ 794 $ 539 $ - $ 358,740 $ 1,063,774 TOTAL ASSETS 669,150 195 416 2 33,940 794 539 358,740 1,063,774 LIABILITIES AND FUND BALANCES: Total Liabilities Fund balances: Restricted 668,849 - - - - 668,849 Assigned 300 195 416 2 33,940 794 539 - 358,740 394,925 • Total Fund Balances 669,148 195 416 2 33,940 794 539 - 358,740 1,063,774 * Limited Tax GO Bonds 2009A also includes Limited Tax GO Bonds 2009B ** Limited Tax GO Bonds 2010A also includes Taxable Build America Bonds 2010B 115 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON -MAJOR DEBT SERVICE FUNDS FOR THE YEAR ENDED DECEMBER 31,2016 Special LTGO LTGO Score LTGO Valley LTGO LTGO LTGO Bond Total Assessment Refundin Refunding LTGO Bonds Com Refunding Bonds Fund Nonrrajor Debt Bonds g Bonds Bonds Bonds 2010** LTGO Bonds 2013 Service Funds Guaranty 2003 (Ref 2008 (Ref 2009* Refunding 2011 (Ref Fund 2013 1994) 1999) Bonds 2003) 2010 (Ref 20001 REVENUES: Intergovernmental $ - $ - $ $ - $ 62,091 $ - $ - $ - $ Investment earnings 2 62,091 2 Total revenues 2 - - - 62,091 - 62,093 EXPENDITURES: Debt service Principal 655,000 395,000 420,000 93,782 369,000 1,932,782 Interest - 156,100 190,450 128,675 19,348 317,966 812,539 Total Expenditures 811,100 585,450 548,675 113,130 686,966 2,745,321 Excess (deficiency) of revenues Over (Under) Expenditures 2 - (811,100) - (523,358) - (548,675) (113,130) (686,966) (2,683,228) OTHER FINANCING SOURCES (USES): Transfers in - - 811,100 - 523,593 - 548,675 113,130 878,333 2,874,831 Total Other Financing Source And Use - 811,100 523,593 548,675 113,130 878,333 2,874,831 Net change in fund balances 2 - - 235 - - - 191,367 191,604 Fund balances - beginning 669,146 195 416 2 33,705 794 539 - 167,372 872,169 Fund Balances - Ending $ 669,148 $ 195 $ 416 $ 2 $ 33,940 $ 794 $ 539 $ $ 358,739 $ 1,063,774 * Limited Tax GO Bonds 2009A also includes Limited Tax GO Bonds 2009B ** Limited Tax GO Bonds 2010A also includes Taxable Build America Bonds 2010B 116 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING BALANCE SHEET NON -MAJOR CAPITAL PROJECTS FUNDS DECEMBER 31, 2016 Land Acq. Facilities General Total Nonmajor Residential Rec & Park Urban Government Fire Capital Project Street Development Renew al Improvements Improvements Funds ASSETS: Cash and cash equivalents Taxes receivable Other receivables Due from other governmental units RESTRICTED ASSETS: Notes receivable Capital asset held for resale Total Assets $ 719,316 $ 2,079,567 $ 445,059 $ 401,572 $ 736,518 $ 4,382,031 42,820 493,355 - - 536,175 - - 6,600 6,600 24,672 1,138,746 - - - 1,163,418 300,022 300,022 7,645,000 - 7,645,000 786,808 3,711,668 8,090,059 401,572 1,043,140 14,033,247 LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES: Current payables: Accounts payables 106,577 332,980 20,968 4,150 464,675 Accrued w ages and benefits 2,578 329 - 3,892 6,799 Customer deposit 18,720 26,246 129,050 1,627 - 175,644 Total Liabilities 127,875 359,555 150,018 9,669 647,118 Deferred Inflow of resources: Unavailable revenue -impact fee - - - 306,622 306,622 Total Deferred Inflow of Resurces - - - 306,622 306,622 Fund balances: Nonspendable 7,645,000 - 7,645,000 Restricted - 3,341,625 - - 736,518 4,078,143 Assigned 658,932 10,488 295,040 391,903 1,356,364 Total Fund Balace 658,932 3,352,113 7,940,040 391,903 736,518 13,079,507 Total Liabilities and Fund Balances $ 786,808 $ 3,711,668 $8,090,059 $ 401,572 $1,043,140 $ 14,033,247 117 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON -MAJOR CAPITAL PROJECTS FUNDS FOR THE YEAR ENDED DECEMBER 31,2016 Land Acq. Facilities General Total Nonmajor Residential Rec & Park Urban Government Fire Capital Rojects Street Development Renewal Improvements Improvements Funds REVENUES: Taxes $ - $ 1,417,534 $ $ - $ - $ 1,417,534 Charges for services - 183,867 183,867 Intergovernmental 465,422 1,398,328 - 1,863,750 Investment earnings 2,163 1,702 2,706 1,156 1,216 8,943 Total Revenues 467,585 2,817,564 2,706 1,156 185,084 3,474,094 EXPENDITURES: Current: General government - 897,211 193,148 1,090,359 Physical environment 3 - 3 Culture and recreation 135,038 - 135,038 Transportation 261,641 - - 261,641 Capital Outlay 566,172 1,447,498 - 13,138 2,026,808 Total Expenditures 827,813 1,582,540 897,211 206,285 3,513,849 Execs (deficiency) of revenues Over (Under) Expenditures (360,229) 1,235,025 (894,505) (205,130) 185,084 (39,755) OTHER FINANCING SOURCES (USES): Transfers in 200,000 - - 200,000 - 400,000 Total Other Financing Sources And Uses 200,000 - - 200,000 - 400,000 Net change in fund balances (160,229) 1,235,025 (894,505) (5,130) 185,084 360,245 Fund balances - beginning 819,161 2,117,089 8,834,545 397,033 551,434 12,719,262 Fund Balances - ending $ 658,932 $ 3,352,113 $ 7,940,040 $ 391,903 $ 736,518 $ 13,079,507 118 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL ARTERIAL STREET CAPITAL PROJECT FUND FOR THE YEAR ENDED DECEMBER 31, 2016 Original Final Budget Budget (Gaap Basis) (Gaap Basis) Actual Results Variance With Final Budget Positive (Negative) REVENUES: Taxes $ 365,160 $ 365,160 $ 1,573,930 $ 1,208,770 Intergovernmental 10,322,920 10,322,920 3,642,889 (6,680,031) Charges for services 160,000 160,000 441,500 281,500 Investment earnings 5,000 5,000 19,711 14,711 Miscellaneous - 117,549 117,549 Total Revenues 10,853,080 10,853,080 5,795,580 (5,057,500) EXPENDITURES: Current: Transportation 436,216 436,216 Capital outlay 13,764,001 14,164,001 Total Expenditures Excees (deficiency) of revenues 2,096,831 5,502,756 (1,660,615) 8,661,245 14,200,217 14,600,217 7,599,587 7,000,630 Over (Under) Expenditures (3,347,137) (3,747,137) (1,804,007) 1,943,130 OTHER FINANCING SOURCES (USES): Transfers in 3,151,000 751,000 751,000 Total Other Financing Sources And Uses 3,151,000 751,000 751,000 Net change in fund balances (196,137) (2,996,137) (1,053,007) 1,943,130 Fund balance - beginning 344,489 5,044,489 5,052,383 7,894 Fund Balances - Ending $ 148,352 $ 2,048,352 $ 3,999,376 $ 1,951,024 119 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL LOCAL IMPROVEMENT DISTRICT #33 DEBT SERVICE FUND FOR THE YEAR ENDED DECEMBER 31,2016 Original Final Budget Budget (Gaap Basis) (Gaap Bais) Actual Results Variance With Final Budget Positive (Negative) REVENUES: Special assessment $ 443,147 $ 593,147 $ 542,180 $ (50,967) Investment earnings 342,526 342,526 267,930 (74,596) Miscellaneous - - 886 886 Total Revenues 785,673 935,673 810,997 (124,676) EXPENDITURES: Debt service: Principal 450,000 900,000 670,000 230,000 Interest 286,005 286,005 281,044 4,961 Total Expenditures 736,005 1,186,005 951,044 234,961 Excess Of Revenues And Expenditures 49,668 (250,332) (140,047) 110,285 Net change in fund balances 49,668 (250,332) (140,047) 110,285 Fund balances - beginning 820,856 820,856 1,038,769 217,913 Fund Balances - Ending $ 870,524 $ 570,524 $ 898,722 $ 328,198 120 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL PUBLIC SAFETY PLAN CAPITAL PROJECT FUND FOR THE YEAR ENDED DECEMBER 31,2016 Original Final Budget Budget (Gaap Basis) (Gaap Bais) Actual Results Variance With Final Budget Positive (Negative) REVENUES: Investment earnings $ - $ - $ 9,561 $ 9,561 Total Revenues - - 9,561 9,561 EXPENDITURES: Current: General Government Total Expenditures 209,954 206,388 3,566 Excess Of Revenues And Expenditures (209,954) (196,827) 13,127 OTHER FINANCING SOURCES (USES): Bond proceeds Premium on bonds issued Total Other Financing Sources And Uses 32,990,000 3,719,954 32,990,000 3,719,954 36,709,954 36,709,954 Net change in fund balances - 36,500,000 36,513,127 13,127 Fund balances - beginning - - - Fund Balances - Ending $ - $ 36,500,000 $ 36,513,127 $ 13,127 121 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL HOTEL/MOTEL TAX SPECIAL REVENUE FUND FOR THE YEAR ENDED DECEMBER 31,2016 Variance With Original Final Final Budget Budget Bduget Actual Positive (Gaap Basis) (Gaap Basis) Results (Negative) REVENUES: Taxes $ 630,000 $ 630,000 $ 710,267 $ 80,267 Investment earnings - - 1,576 1,576 Total Revenues 630,000 630,000 711,843 81,843 EXPENDITURES: Current: Economic environment 427,500 427,500 422,405 5,095 Total Expenditures 427,500 427,500 422,405 5,095 Excess (deficiency) of revenues Over (Under) Expenditures 202,500 202,500 289,438 86,938 Net change in fund balances 202,500 202,500 289,438 86,938 Fund balances - beginning 389,674 389,674 623,120 233,446 Fund Balances - Ending $ 592,174 $ 592,174 $ 912,558 $ 320,384 122 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL DRUG SEIZURE SPECIAL REVENUE FUND FOR THE YEAR ENDED DECEMBER 31,2016 Variance With Original Final Final Budget Budget Budget Actual positive (Gaap Basis) (Gaap Basis) Results (Negative) REVENUES: Investment earnings $ - $ - $ 31 $ 31 Fines and forfeitures 60,000 635,000 624,279 (10,721) Total Revenues 60,000 635,000 624,310 (10,690) EXPENDITURES: Current: Public safety 45,000 95,000 59,303 35,697 Capital outlay: Public safety - - 18,707 (18,707) Total Expenditures 45,000 95,000 78,010 35,697 Excess (deficiency) of revenues Over (Under) Expenditures 15,000 540,000 546,300 6,300 Net change in fund balances 15,000 540,000 546,300 6,300 Fund Balances - beginning 65,000 65,000 7,239 (57,761) Fund Balances - Ending $ 80,000 $ 605,000 $ 553,539 $ (51,461) 123 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL RESIDENTIAL STREET CAPITAL PROJECT FUND FOR THE YEAR ENDED DECEMBER 31,2016 Original Final Budget Budget (Gaap Basis) (Gaap Bais) Actual Results Variance With Final Budget Positive (Negative) REVENUES: Intergovernmental $ 1,705,078 $ 2,544,028 $ 465,422 $ (2,078,606) Investment earnings 1,800 1,800 2,163 363 Miscellaneous 2,850,000 2,850,000 - (2,850,000) Total Revenues 4,556,878 5,395,828 467,585 (4,928,243) EXPENDITURES: Current: Transportation Capital outlay 8,823,000 - 261,641 (261,641) 9,751,000 566,172 9,184,828 Total Expenditures 8,823,000 9,751,000 827,813 8,923,187 Excess Of Revenues And Expenditures (4,266,122) (4,355,172) (360,229) 3,994,943 OTHER FINANCING SOURCES (USES): Bond proceeds Transfers in 4,400,000 4,400,000 - (4,400,000) 200,000 200,000 200,000 Total Other Financing Sources And Uses 4,600,000 4,600,000 200,000 (4,400,000) Net change in fund balances Fund balances - beginning Fund Balances - Ending 333,878 244,828 56,842 806,842 (160,229) (405,057) 819,161 12,319 $ 390,720 $ 1,051,670 $ 658,932 $ (392,738) 124 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL LAND & PARK ACQUISITION CAPITAL PROJECT FUND FOR THE YEAR ENDED DECEMBER 31,2016 Original Final Budget Budget (Gaap Basis) (Gaap Bais) Actual Results Variance With Final Budget Positive (Negative) REVENUES: Taxes $ 260,000 $ 260,000 $ 1,417,534 $ 1,157,534 Intergovernmental 10,000 810,000 1,398,328 588,328 Charges for services 40,000 40,000 (40,000) Investment earnings 1,000 1,000 1,702 702 Total Revenues 311,000 1,111,000 2,817,564 1,706,564 EXPENDITURES: Current: Physical environment Culture and recreation Capital outlay Total Expenditures 292,000 1,092,000 3 (3) 135,038 (135,038) 1,447,498 (355,498) 292,000 1,092,000 1,582,540 (490,540) Excess Of Revenues And Expenditures 19,000 19,000 1,235,025 1,216,025 Net change in fund balances 19,000 19,000 1,235,025 1,216,025 Fund balances - beginning 318,000 2,118,000 2,117,089 (911) Fund Balances - Ending $ 337,000 $ 2,137,000 $ 3,352,113 $ 1,215,113 125 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FACILITIES CAPITAL PROJECT FUND FOR THE YEAR ENDED DECEMBER 31,2016 Original Final Budget Budget (Gaap Basis) (Gaap Bais) Actual Results Variance With Final Budget Positive (Negative) REVENUES: Investment earnings $ 3,602 $ 3,602 $ 2,706 $ (896) Total Revenues 3,602 3,602 2,706 (896) EXPENDITURES: Current: General Government 897,211 (897,211) Principal 2,250,000 2,250,000 - 2,250,000 Capital outlay 90,000 90,000 - 90,000 Total Expenditures 2,340,000 2,340,000 897,211 1,442,789 Excess Of Revenues And Expenditures (2,336,398) (2,336,398) (894,505) 1,441,893 OTHER FINANCING SOURCES (USES): Sales of capital assets Transfers out Total Other Financing Sources And Uses 4,325,000 (2,075,000) 2,250,000 4,325,000 (2,075,000) 2,250,000 (4,325,000) 2,075,000 (2,250,000) Net change in fund balances before special item (86,398) (86,398) (894,505) (808,107) Fund balances - beginning 1,873,602 1,873,602 8,834,545 6,960,943 Fund Balances - Ending $ 1,787,204 $ 1,787,204 $ 7,940,040 $ 6,152,836 126 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL GENERAL GOVERNMENT IMPROVEMENTS CAPITAL PROJECT FUND FOR THE YEAR ENDED DECEMBER 31,2016 Variance With Original Final Final Budget Budget Budget Actual Positive (Gaap Basis) (Gaap Bais) Results (Negative) REVENUES: Investment earnings $ 500 $ 500 $ 1,156 $ 656 Total Revenues 500 500 1,156 656 EXPENDITURES: Current: General Government General Government Improvements Capital outlay Total Expenditures Excess Of Revenues And Expenditures - 193,148 (193,148) 130,640 130,640 130,640 200,000 200,000 13,138 186,862 330,640 330,640 206,285 124,355 (330,140) (330,140) (205,130) 125,010 OTHER FINANCING SOURCES (USES): Transfers in 200,000 200,000 200,000 Total Other Financing Sources And Uses 200,000 200,000 200,000 Net change in fund balances (130,140) (130,140) (5,130) 125,010 Fund balances - beginning 379,950 379,950 397,033 17,083 Fund Balances - Ending $ 249,810 $ 249,810 $ 391,903 $ 142,093 127 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FIRE IMPROVEMENTS CAPITAL PROJECT FUND FOR THE YEAR ENDED DECEMBER 31,2016 Original Final Budget Budget (Gaap Basis) (Gaap Bais) Actual Results Variance With Final Budget Positive (Negative) REVENUES: Fire impact fees $ 50,000 $ 50,000 $ 183,867 $ 133,867 Investment earnings 100 100 1,216 1,116 Total Revenues 50,100 50,100 185,084 134,984 EXPENDITURES: Current: Public Safety Capital outlay Total Expenditures Excess Of Revenues And Expenditures 50,100 50,100 185,084 134,984 Net change in fund balances 50,100 50,100 185,084 134,984 Fund balances - beginning 500,100 500,100 551,434 51,334 Fund Balances - Ending $ 550,200 $ 550,200 $ 736,518 $ 186,318 128 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL DEBT SERVICE FUNDS FOR THE YEAR ENDED DECEMBER 31,2016 Original Final Budget Budget (Gaap Basis) (Gaap Bais) Actual Results Variance With Final Budget Positive (Negative) REVENUES: Intergovernmental $ 61,858 $ 61,858 $ 62,091 $ 233 Investment earnings 500 500 2 (498) Total Revenues 62,358 62,358 62,093 (265) EXPENDITURES: Debt service: Principal 2,607,271 2,442,071 1,932,782 Interest 757,378 494,618 812,539 Total Expenditures 509,289 (317,921) 3,364,649 2,936,689 2,745,321 (191,368) Excess Of Revenues And Expenditures (3,302,291) (2,874,331) (2,683,227) 191,104 OTHER FINANCING SOURCES (USES): Transfers in 3,302,791 2,874,831 2,874,831 Total Other Financing Sources And Uses 3,302,791 2,874,831 2,874,831 Net change in fund balances 500 500 191,604 191,104 Fund balances - beginning 673,500 673,500 872,170 198,670 Fund Balances - Ending $ 674,000 $ 674,000 $ 1,063,773 $ 389,773 129 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES NON -MAJOR INTERNAL SERVICE FUNDS Internal Service Funds The City's internal service funds are used to account for the financing of special services performed by designated departments within the City of Tukwila for the benefit of other departments within the City. The funds provide services then generate revenue by billing the department for which the service was provided. • Equipment Rental Fund — Accounts for the costs of maintaining and replacing all City vehicles and auxiliary equipment. All equipment costs, including depreciation, are factors in calculating the rates which are charged to each user department. • Insurance Fund Active Employees — Accounts for the costs of the City's self-insured medical plan. Medical and dental costs for covered employees are charged to the respective departments. All premiums, medical and dental costs and ancillary charges are included. • Insurance Fund LEOFF 1 Retirees — Accounts for the costs of the City's self-insured medical plan for LEOFF 1 retirees. Medical and dental costs for covered employees are charged to the respective departments, either the Police Department or the Fire Department. All premiums, medical and dental costs and ancillary charges are included. 130 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS DECEMBER 31, 2016 Total Insurance - Insurance - Internal Equipment Active Leoff I Service Rental Employees Retirees Funds ASSETS: Current assets Cash and cash equivalents $ 4,285,711 $ 951,771 $ 1,077,247 6,314,729 Investments 525,627 2,377,387 - 2,903,014 Receivables 1,546 23,915 - 25,462 Inventory of materials and supplies 15,273 - - 15,273 Total Current Assets 4,828,157 3,353,073 1,077,247 9,258,478 NONCURRENT ASSETS: Capital Assets: Machinery and equipment Less: accumulated depreciation Total Capital Assets (Net Of A/D) 14,942,639 (10,234,527) 4,708,113 - - 14,942,639 (10,234,527) - - 4,708,113 Total Noncurrent Assets 4,708,113 - - 4,708,113 Total Assets 9,536,270 3,353,073 1,077,247 13,966,590 Deferred Outflow s of Resources Deferred outflow pension earnings Total Deferred Inflow s Of Resources LIABILITIES: Current liabilities: Accounts payable Accrued w ages and benefits Claims incurred but not reported Total Current Liabilities Noncurrent liabilities: Reserve for unreported claims Net pension liability Total Noncurrent Liabilities 64,348 - - 64,348 64,348 - - 64,348 82,948 - 3,519 86,468 19,698 - - 19,698 689,750 58,500 748,250 102,646 689,750 62,019 854,416 1,168,500 132,750 1,301,250 381,561 - - 381,561 381,561 1,168,500 132,750 1,682,811 Total Liabilities 484,207 1,858,250 194,769 2,537,227 Deferred Inflow s of Resources Deferred inflow pension earnings 14,963 - - 14,963 Total Deferred Inflows Of Resources 14,963 - - 14,963 NET POSITION: Investment in capital assets 4,708,113 - - 4,708,113 Unrestricted 4,393,334 1,494,823 882,478 6,770,636 Total Net Position $ 9,101,447 $ 1,494,823 $ 882,478 $ 11,478,749 131 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED DECEMBER 31, 2016 Total Insurance - Insurance- Internal Equipment Active Leoff I Service Rental Employees Retirees Funds OPERATING REVENUES: Charges for services $ 2,066,889 $ 5,290,893 $ 630,444 $ 7,988,226 Other operating revenue 2,043 138,033 - 140,076 Total Operating Revenue 2,068,932 5,428,926 630,444 8,128,302 OPERATING EXPENSES: Operations & maintenance 1,247,530 5,817,626 512,861 7,578,017 Administrative & general 316,578 120,703 11,408 448,689 Depreciation 799,436 - 799,436 Total Operating Expenses Operating Income (Loss) 2,363,544 (294,613) 5,938,329 (509,403) 524,269 106,175 8,826,142 (697,840) NON-OPERATING REVENUE ( EXPENSE): Investment earnings Gain (loss) on disposal of capital assets Total Non -Operating Revenue (Expense) Change In Net Position Net position beginning of year 29,435 22,288 569 96,953 - 52,291 96,953 126,388 22,288 569 149,244 (168,225) 9,269,672 (487,115) 1,981,939 106,744 775,734 (548,596) 12,027,345 Net Position end of year $ 9,101,447 $ 1,494,823 $ 882,478 $ 11,478,749 132 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2016 Page 1 of 2 Equipment Rental Insurance - Active Employees Insurance- Leoff I Retirees Total Internal Service Funds CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from users Cash paid to suppliers Cash paid for taxes Cash paid to, or on behalf of, employees $ 2,068,932 $ 5,423,842 $ (990,773) (246,446) (570) (562,898) (5,781,133) 697,839 $ 8,190,613 (47,192) (1,284,411) (570) (506,271) (6,850,302) Net Cash Provided (Used) By Operating Activities 514,691 (603,737) 144,376 55,330 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Proceed from sale of equipment Purchase of capital asset 128,075 (797,536) 128,075 (797,536) Net Cash Provided (Used) For Capital And Related Financing Activities (669,461) (669,461) CASH FLOW FROM INVESTING ACTIVITIES: Proceeds from sale of investments Purchase of investments Interest received Net Cash Provided (Used) In Investing Activities (225,000) 33,052 1,240,930 139,501 569 1,015,930 173,121 (191,948) 1,380,431 569 1,189,051 Net Increase (Decrease) In Cash And Cash Equivalents (346,719) 776,694 144,945 574,920 Cash and cash equivalents -beginning of year Cash And Cash Equivalents -End Of Year 4,632,430 $ 4,285,711 $ 175,077 932,303 5,739,809 951,771 $ 1,077,247 $ 6,314,729 Cash at end of year consists of: Cash and cash equivalents $ 4,285,711 $ 951,771 $ 1,077,247 6,314,729 Total Cash $ 4,285,711 $ 951,771 $ 1,077,247 $ 6,314,729 133 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2016 Page 2 of 2 Total Insurance - Insurance- Internal Equipment Active Leoff I Service Rental Employees Retirees Funds RECONCILIATION OF NET OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating Income (Loss) $ (294,613) $ (509,403) $ 106,175 $ (697,840) Adjustments to reconcile operating income to net cash Provided (used) by operating activities: Depreciation 799,436 799,436 Asset (increases) decreases: Accounts receivable (5,084) 67,395 62,311 Inventory (1,436) (1,436) Deferred outflow of resources (increase) decrease (26,438) (26,438) Liability increases (decreases): Accounts payable 24,611 (89,250) (29,194) (93,833) Wages and benefits payable 213 213 Deferred inflow of resources increase (decrease) 12,917 12,917 Total Adjustments 809,303 (94,334) 38,201 753,170 Net Cash Provided (Used) By Operating Activities $ 514,691 $ (603,737) $ 144,376 $ 55,331 SCHEDULE OF NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES Increase in fair value of investment $ (18,661) $ $ (18,661) Total Non Cash Investing, Capital And Financing Acitivties $ (18,661) $ $ (18,661) 134 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES CITY OF TUKWILA, WASHINGTON STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUND FOR THE YEAR ENDED DECEMBER 31, 2016 Balance Balance January 1, 2016 Additions Deductions December 31,2016 ASSETS Cash and cash equivalents $ 124,624 $ 940,142 $ (863,027) $ 201,739 Receivables 12,467 131,437 (88,361) 55,543 Total Assets 137,092 1,071,579 (951,389) 257,282 LIABILITIES Accounts and other payables Total Liabilities 137,092 1,857,890 (1,737,700) 257,282 137,092 $ 1,857,890 $ (1,737,700) $ 257,282 The notes to the financial statements are an integral part of this statement. 135 CITY OF TUKWILA: 2016 CAFR FUND FINANCIAL STATEMENTS AND SCHEDULES 136 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION City of Tukwila STATISTICAL SECTION December 31, 2016 Financial Trends Information Financial trends schedules are intended to provide users with information to assist them in understanding and assessing how the City's financial position has changed over time. Schedule 1 Net Position by Component 138 Schedule 2 Changes in Net Position 140 Schedule 3 Fund Balances, Governmental Funds 142 Schedule 4 Changes in Fund Balances, Governmental Funds 144 Schedule 5 General Governmental Tax Revenues by Source 146 Revenue Capacity Information The objective of providing revenue capacity information is to help users understand and assess the factors affecting the City's ability to generate its most significant local source revenues. Schedule 6 Property Tax Levies and Collections 147 Schedule 7 Assessed and Estimated Actual Value of Taxable Property 148 Schedule 8 Property Tax Rates -Direct and Overlapping Governments 149 Schedule 9 Principal Property Taxpayers 150 Schedule 10 Retail Sales Tax Collections by Sector 152 Schedule 11 Sales Tax Rate Direct and Overlapping Governments 154 Debt Capacity Information Debt capacity information is intended to assist users to understand and assess the City's current levels of outstanding debt and ability to issue additional debt in the future. Schedule 12 Ratios of Outstanding Debt by Type 156 Schedule 13 Ratios of General Bonded Debt Outstanding 158 Schedule 14 Computation of Direct and Overlapping Debt 159 Schedule 15 Legal Debt Margin Information 160 Demographic and Economic Information These Schedules offer demographic and economic information to assist users in understanding certain aspects of the environment within which the City operates and to provide information that facilitates comparisons of financial statement information over time and across governmental units. Schedule 16 Demographic Statistics 162 Schedule 17 Principal Employers 163 Operating Information These Schedules contain service and infrastructure data to help users understand how the information in the City's financial report relates to the services the City provides and the activities it performs. Schedule 18 Full-time Equivalent Employee by Department 164 Schedule 19 Operating Indicators by Function 165 Schedule 20 Capital Assets by Function 166 137 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION CITY OF TUKWILA SCHEDULE 1 NET POSITION BY COMPONENT(a) LAST TEN FISCAL YEARS Page 1 of 2 2007 2008 2009 2010 Governmental activities: Net investment in capital assets $ 136,053,013 $ 136,742,368 $ 155,847,012 $ 177,078,793 Restricted 1,233,234 19,720,546 16,360,097 23,005,792 Unrestricted 35,520,681 18,476,837 16,031,473 12,119,923 Total governmental activities net position $ 172,806,928 $ 174,939,751 $ 188,238,582 $ 212,204,508 Business -type activites: Net investment in capital assets $ 36,083,972 $ 36,071,402 $ 38,052,488 $ 44,759,489 Restricted 441,073 439,100 438,619 430,444 Unrestricted 11,267,171 13,335, 836 10,987,162 11,158,081 Total business -type activities net position $ 47,792,216 $ 49,846,338 $ 49,478,269 $ 56,348,014 Primary government: Net investment in capital assets $ 172,136,985 $ 172,813,770 $ 193,899,500 $ 221,838,282 Restricted 1,674,307 20,159,646 16,798,716 23,436,236 Unrestricted 46,787,852 31,812,673 27,018,635 23,278,004 Total primary government net position $ 220,599,144 $ 224,786,089 $ 237,716,851 $ 268,552,522 Notes: (a) All amounts are reported on the accrual basis Source: Tukw ila Finance Department 138 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION Page 2 of 2 2011 2012 2013 2014 2015 2016 $ 199,511,779 $ 203,206,940 $ 207,660,389 $ 191,081,461 $ 191,331,156 $ 193,113,026 5,019,817 2,749,680 3,480,002 3,973,726 5,446,074 8,996,183 21,479,064 20,194,333 26,981,105 25,009,212 16,125,592 15,809,945 $ 226,010,660 $ 226,150,953 $ 238,121,496 $ 220,064,399 $ 212,902,822 $ 217,919,155 $ 52,134,799 $ 52,911,741 $ 55,955,595 $ 57,677,764 $ 59,483,424 $ 60,807,030 430,444 430,444 430,444 430,444 - - 10, 225, 558 11, 011, 319 12, 964, 539 13, 839, 529 14,658,912 17,240,620 $ 62,790,801 $ 64,353,504 $ 69,350,577 $ 71,947,736 $ 74,142,335 $ 78,047,650 $ 248,636,920 $ 253,253,170 $ 263,615,984 $ 248,759,225 $ 250,814,581 $ 253,920,056 5,450,261 3,180,123 3,910,445 4,404,170 5,446,074 8,996,183 34,714,280 34,071,164 39,945,644 38,848,741 30,784,504 33,050,565 $ 288,801,461 $ 290,504,457 $ 307,472,073 $ 292,012,136 $ 287,045,158 $ 295,966,804 139 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 2 CHANGES IN NET POSITION (a) Page 1 of 2 2007 2008 2009 2010 a Expenses Governmental Activities General Government Public Safety Physical Environment Transportation Economic Environment Mental and Physcial Health Culture and Recreation Interest on Long Term Debt Total Governmental Activities Business Type Activities Water/Sew er Utility Foster Golf Course Surface Water Utility Total Business Type Activities Total Primary Government Expenses Program Revenues Governmental Activities Charges for Services General Government Public Safety Physical Environment Transportation Economic Environment Cultural and Recreation Operating Grants and Contributions Capital Grants and Contributions Total Governmental Activities Rogram Revenues Business Type Activities Charges for Services Water/Sewer Utility Foster Golf Course Surface Water Utility Operating Grants and Contributions Capital Grants and Contributions Total Business Type Activities Program Revenues Total Primary Government Program Revenues Net (Expense)/Revenue Governmental Activities Business Type Activities Total Primary Government Net Expense General Revenues and Other Changes in Net Position Governmental Activitie s Taxes Property Tax Retail Sales and Use Tax Natural Gas Use Tax HoteVMotel Tax Utility Tax Interfund Utility Taxes Business Tax Excise Tax State Entitlements Unrestricted Investment Earnings Gain/Loss on Sale of Capital Assets Miscellaneous Transfers Total Governmental Activities Business Type Activities Retail Sales and Use Taxes Unrestricted Investment Interest Gain/Loss on Sale of Capital Assets Miscellaneous Transfers Total Business Type Activities Total Primary Government Change in Net Position Before Special Item Special item Change in Net Position Governmental Activities Business Type Activities Total Primary Government Notes: (a) All amounts are reported on the accrual basis $ 7,456,335 21,726,932 2,764,373 5,310,247 3,890,845 4,204 4,506,223 896,215 46,555,374 $ 4,723,103 $ 6,689,659 24,147,992 26,959,352 2,862,487 2,575,405 5,864,297 5,541,367 5,017,935 4,637,531 4,173 4,332 4,797,856 4,914,256 1,844,224 753,904 49,262,067 52,075,806 7,046,603 7,293,362 9,293,434 1,849,542 1,968,595 2,050,172 1,920,194 1,762,417 2,299,394 10, 816,339 11,024,374 13,643,000 $ 57,371,713 $ 60,286,441 $ 65,718,806 $ 7,052,717 26,088,644 2,533,394 6,015,197 4,579,338 4,539 4,756,676 1,061,419 52,091,924 9,343,368 1,935,014 2,476,170 13,754,552 $ 65,846,476 $ 1,590,553 425,241 25,341 133,500 2,319,634 777,484 1,692,766 3,746,743 $ 895,966 1,184,530 1,200 130,637 2,476,501 711,542 1,325,163 2,282,592 $ 1,136,642 572,094 103,311 1,001,511 647,354 3,386,269 14,784,074 $ 1,080,801 819,043 6,200 571,110 1,787,274 811,679 2,139,029 23,992,563 10,711,262 8,272,647 1,272,425 2,208,549 347,416 9,008,131 8,621,909 1,563,681 2,642,325 756,400 21,631,255 31,207,699 10,124,653 1,424,595 2,641,313 515,633 9,665,095 1,425,327 3,029,630 7,390,545 12,101, 037 13, 584, 315 14, 706,194 21, 510, 597 22,812,299 22,592,446 36,337,449 52,718,296 (35,844,111) (40,253,937) 1,284,700 2,559,941 $ (34,559,411) $ (37,693,996) (30,444,551) 1,063,194 $ (29,381,357) (20,884,225) 7,756,045 $ (13,128,180) Source: Tukw ila Finance Department $ 11,302,099 19,355,867 344,748 583,232 3,666,079 2,236,675 4,127,360 217,600 1,727,879 13,652 1,134,683 $ 11,656,979 18,009,297 643,037 587,216 5,136,444 2,497,705 983,078 874,046 801,847 (186,663) 1,383,774 $ 11,901,072 14,588,297 748,772 489,806 7,390,860 3,196,178 367,198 2,233,445 246,287 980,267 1,601,200 $ 13,363,096 14,669,328 533,811 458,092 5,600,683 4,205,574 507,798 1,951,936 108,929 1,399,310 44,709,874 42,386,760 43,743,382 42,798,557 500,000 500,000 327,999 329,527 618,563 377,955 106,032 85,942 - - (264,093) - - 97,541 (1,134,683) (1,383,774) (1,601,200) (1,399,310) (16,120) (505,819) (1,431,262) (886,300) $ 44,693,754 $ 41,880,941 $ 42,312,120 $ 41,912,257 10,134,343 4,186,945 12,930,763 28,784,077 10,134,343 $ 8,865,765 $ 1,268,580 4,186,945 2,132,823 2,054,122 $ 10,134,345 $ 4,186,945 12,930,763 28,784,077 $ 13,298,831 $ 21,914,332 (368,068) 6,869,745 $ 12,930,763 $ 28,784,077 140 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION Page 2 of 2 2011 2012 2013 m= 2014 A 2015 • $ 9,150,573 25,348,318 2,885,175 6,872,708 4,712,832 4,591 4,203,824 472,438 $ 8,343,107 26,598,432 3,625,696 7,314,707 4,801,342 4,242,725 1,152,063 $ 10,195,049 25,938,946 2,610,591 7,658,280 5,209,954 5,635,347 1,038,851 $ 10,289,399 29,292,587 11,668,098 2,479,533 5,716,091 5,336,659 1,204,771 $ 8,042,254 29,403,206 2,611,297 11,069,605 5,782,907 5,125,227 1,033,440 2016 1 $ 9,662,207 31,418,713 2,554,259 11,188,189 4,410,841 5,431,324 1,075,729 53,650,459 56,078,072 10,092,903 1,986,747 2,588,098 10,149,557 1,701,131 2,699,767 58,287,017 65,987,138 63,067,935 65,741,262 10,421,064 1,707,993 2,563,132 12,752,125 13,186,236 1,945,789 2,086,586 3,310,716 4,147,974 13,984,368 2,077,536 4,088,360 14, 667, 748 14, 550, 455 $ 68,318,207 $ 70,628,527 $ $ 2,462,671 809,806 7,572 345,373 1,722,285 1,001,117 2,250,601 18,495,127 $ 1,332,418 684,744 4,939 1,004,911 2,323,528 481,404 4,411,618 1,581,882 14,692,189 18,008,631 19,420,796 20,150,264 72,979,205 $ 83,995,769 $ 82,488,731 $ 85,891,525 $ 1,495,438 871,919 27,407 287,956 2,786,178 744,014 3,289,818 16,947,529 $ 3,858,862 970,594 196,506 8,425 726,869 2,793,185 2,563,002 8,053,435 $ 3,794,134 1,754,856 206,065 3,348,802 644,283 893,470 6,431,537 $ 3,742,937 4,130,701 464 454,525 2,434,546 1,140,558 1,079,020 5,000,942 27,094,552 11,825,444 11,711,242 1,304,016 3,355,956 1,993,537 11,758,658 1,448,729 3,827,010 135,603 26,450,258 13,146,131 1,404,264 3,913,184 338,943 19,170,879 17,073,146 17,983,694 14,308,945 1,406,440 4,168,313 1,548,280 15,572,709 1,482,288 5,286,233 2,039,890 15,661,118 1,426,385 5,875,343 25,000 767,732 18,364,751 17,170,000 18,802,521 21,431,978 24,381,122 23,755,578 45,459,303 28,995,444 45,252,779 40,602,857 41,454,268 41,739,272 (26,555,907) (44,252,628) (31,836,759) (46,816,260) (45,994,789) (47,757,566) 3,697,003 2,619,546 4,110,332 3,423,348 4,960,326 3,605,314 $ (22,858,904) $ (41,633,082) $ (27,726,426) $ (43,392,912) $ (41,034,463) $ (44,152,252) $ 13,443,137 15,796,054 317,531 555,682 7,534,260 667,679 2,170,293 2,085,740 275,477 525,864 $ 14,131,605 15,441,683 232,208 522,033 5,535,966 2,497,606 2,860,948 1,895,647 116,694 101,688 1,056,843 $ 14,510,241 16,316,398 204,457 526,832 3,879,992 1,686,859 2,570,111 2,745,475 1,861,511 102,486 304,704 1,060,650 $ 14,870,621 17,105,322 596,781 3,855,544 1,851,013 2,555,999 3,512,894 1,735,637 444,282 179,394 (600,000) $ 14,320,085 $ 14,562,501 19,334,152 18,908,190 677,971 4,019,288 2,061,098 2,749,140 5,321,281 1,843,634 475,345 710,267 4,045,916 2,146,515 2,716,257 6,508,665 1,915,810 559,733 280,551 1,000,049 (300,000) 43,371,717 44,392,921 61,119 200,871 45,769,716 46,107,488 51,082,545 52,773,904 (525,864) (1,056,843) (1,060,650) 600,000 - 300,000 (263,874) (1,056,843) (1,060,650) 600,000 300,000 $ 43,107,843 $ 43,336,078 $ 44,709,066 $ 46,707,488 $ 51,082,545 $ 53,073,904 20,248,939 1,702,996 16,982,640 3,314,576 10,048,082 8,921,652 (1,995,000) (956,798) - 20,248,939 1,702,996 16,982,640 1,319,576 9,091,285 8,921,652 $ 16,815,810 $ 140,293 $ 13,932,957 $ (2,703,772) $ 3,830,958 $ 5,016,337 3,433,129 1,562,703 3,049,682 4,023,348 5,260,326 3,905,314 $ 20,248,939 $ 1,702,996 $ 16,982,640 $ 1,319,576 $ 9,091,285 $ 8,921,651 141 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 3 FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) Page 1 of 2 2007 2008 2009 2010 General Fund (GASB 54) Nonspendable Restricted Committed Assigned Unassigned General Fund (Prior to GASB 54) Reserved Unreserved Total general fund 12,650 10,504,748 $ 10,517,398 $ - $ 17,800 7,687,515 $ 7,705,315 17,900 7,371,530 $ 7,389,430 17,900 5,739,140 $ 5,757,040 All other governmental funds (GASB 54) Nonspendable $ Restricted Committed Assigned Unassigned All other governmental funds (Prior to GASB 54) Reserved Unreserved, reported in: Special revenue funds Debt service funds Capital Projects funds Total all other governmental funds $ - $ 10,834,781 12,943,487 9,123,401 1,233,234 1,248,901 135,438 8,113,739 6,831,634 7,101,258 $ 20,181,754 $ 21,024,022 $ 16,360,097 14,461,546 3,051 8,541,195 $ 23,005,792 Note: In 2011 the City of Tukw ila implemented GASB Statement No. 54, w hich changed the categories for fund balances. Balances prior to 2011 w ere not restated to the new standards. Source: Tukw ila Finance Department In O $80 $70 $60 $50 $40 $30 $20 $10 $- Fund Balances r tAll Other Governmental 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 General Fund 142 $ 8,260,141 $ 8,378,557 $17,285,986 $17,496,550 $18,330,806 $19,031,744 $ 16,544,344 $ 9,770,864 $ 6,424,449 $ 14,060,311 $ 20,312,943 $ 57,020,602 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION Page 2 of 2 2011 2012 2013 2014 2015 2016 $ 5,000 $ - $ 1,743,362 $ 1,544,022 $ 1,340,914 $ 1,141,484 18,000 - - - 225,000 5,771,471 6,078,648 6,277,929 8,237,141 8,378,557 15,317, 624 10,181, 057 10,911,244 11,612,330 $ - $ - $ - $ 7,370,000 $ 7,645,000 $ 7,645,000 5,014,817 2,749,681 3,480,001 3,973,726 5,446,074 45,986,463 402,306 - - - 11,127,221 7,021,183 4,510,623 4,076,803 7,221,870 3,389,139 - - (1,566,175) (1,360,218) - 143 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 4 CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS (a) LAST TEN FISCAL YEARS page 1 of 2 2007 2008 2009 2010 Revenues Taxes $ 39,660,792 $ 37,412,569 $ 37,167,281 $ 37,267,918 Licenses and Perrrtits 1,827,709 2,022,851 1,283,463 1,618,830 Intergovernmental 6,403,217 5,697,598 17,596,486 14,525,872 Charges for Services 2,024,892 2,569,381 1,443,680 2,366,174 Fines and Forfeitures 266,188 259,991 301,761 390,079 Investment Income 1,425,423 926,913 282,604 144,258 Special Assessments - Miscellaneous 1,751,145 816,054 701,957 891,307 Total Revenues 53,359,366 49,705,357 58,777,232 57,204,438 Expenditures General Government Public Safety Physical Environment Transportation Economic Environment Mental & Physical Health Culture and Recreation Debt Service Principal Interest Capital Outlay Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses) Transfers In Transfers In - Assessment Transfers Out Capital Leases Sale of Capital Assets General Obligation Bonds Issued General Obligation Refunding Bonds Issued LID Bonds Assessment Operating Loan-Tukw ila MPD Premium on General Obligation Debt Premium on General Obligation Refunding Debt Issuance Costs on General Obligation Refunding Debt Payment to Refunded Bond Escrow Agent Total Other Financing Sources (Uses) Change in Fund Balance Before Special Item Special Item 7,034,602 21,038,810 2,196,422 2,413,390 3,878,658 4,204 3,938,779 930,000 914,584 7,243,879 7,992,286 22,878,689 2,255,880 2,783,077 4,995,514 4,173 4,293,658 972,000 872,224 6,089,703 8,574,563 25,576,932 2,058,913 2,334,298 4,601, 391 4,332 4,365,023 1,316,297 778,018 16,860,362 8,387,317 24,676,370 1,724,147 2,332,178 4,541,845 4,539 4,163,503 1,555,028 849,148 11,513,976 49,593,328 53,137,204 4,036,039 (3,431,846) 66,470,129 59,748,051 (7,692,894) (2,543,613) 2,266,349 2,515,982 3,865,744 2,461,806 (1,131,666) (1,107,543) (2,234,444) (1,020,857) - - 110,509 100 53,592 1,014,608 27,308 - 6,935,000 6,180,000 483,599 (108,326) (6,555,273) 6,947,574 112,151 (6,880,397) (1,069,000) 1,134,783 5,170,822 1,462,031 (1,969,815) 2,713,085 (4,979,809) 7,556,917 5,013,304 Net Change in Fund Balances $ 5,170,822 $ (1,969,815) $ (4,979,809) $ 5,013,304 Ratio of Debt Service Expenditures To Total Non -Capital Expenditures Note: (a) All amounts are reported on the modified - accrual basis Source: Tukw ila Finance Department 4.6% 4.1% 4.4% 5.2% 144 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION page 2 of 2 2011 2012 2013 2014 2015 2016 $ 38,035,681 $ 41,502,608 $ 42,402,070 $ 44,441,783 $ 48,548,116 $ 49,588,492 3,473,910 1,604,594 2,013,875 2,114,638 2,242,256 2,129,221 24,059,907 7,626,487 7,190,325 14,298,126 11,839,883 10,067,413 2,359,600 3,974,356 3,747,646 3,838,531 3,935,248 3,911,473 308,027 220,752 242,638 264,934 261,457 318,459 275,479 106,286 151,911 479,219 475,345 541,299 - 2,788,350 701,723 650,415 542,180 356,409 131,979 427,368 354,395 332,268 957,158 68,869,013 55,167,062 58,964,183 66,493,348 68,284,989 68,055,695 8,253,440 8,504,511 9,303,742 7,505,173 7,708,394 9,405,989 24,327,498 24,918,306 25,720,884 27,254,312 29,035,165 29,366,198 2,060,482 3,022,516 1,935,895 1,807,993 1,935,228 1,955,031 2,676,511 2,769,182 3,111,493 5,820,601 5,792,668 5,238,468 4,682,646 4,767,944 5,224,964 5,226,832 5,832,384 4,493,210 4,591 3,507,150 3,373,000 4,386,392 4,680,651 4,350,052 4,543,339 1,766,774 1,991,540 5,024,991 2,288,988 2,480,507 2,602,782 881,850 1,178,464 1,162,649 961,457 1,125,609 1,093,584 25,643,704 12,099,293 5,854,962 10,150,912 11,426,274 8,358,450 73,804,646 62,624,756 61,725,970 65,696,921 69,686,279 67,057,051 (4,935,633) (7,457,694) (2,761,786) 796,428 (1,401,291) 998,643 11,001,619 7,625,792 20,918,983 7,300,080 5,633,846 4,025,831 2,788,350 (10,061,205) (6,174,358) (23,301,516) (7,900,080) (5,933,846) (4,325,831) 15,468 - - 21,406 9,903 5,493 5,055,688 1,000,000 3,850,000 8,075,000 32,990,000 - 6,687,500 - - (658,706) - - - - 309,758 3,719,954 (5,055,688) 977,288 (3,958,345) 802,631 (6,655,063) 8,098,809 5,337,023 3,250,000 4,046,428 8,084,758 6,683,467 (1,995,000) (956,798) 36,409,954 37,408,597 $ (3,958,345) $ (6,655,064) $ 5,337,023 $ 2,051,428 $ 5,726,669 $ 37,408,597 5.8% 6.7% 11.07% 6.65% 145 6.34% 6.30% CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 5 GENERAL GOVERNMENTAL TAX REVENUES BY SOURCE LAST TEN FISCAL YEARS Fiscal Year Property Sales & Use Utility(a) Excise Business(b) Other(`) Total Taxes 2007 11,177,532 19,355,867 3,666,079 4,124,168 405,973 931,173 39,660,792 2008 11,245,973 17,709,319 3,934,210 3,003,438 475,500 1,089,344 37,457,785 2009 12,190,219 14,585,015 6,172,569 2,824,407 738,341 656,730 37,167,281 2010 13,188,942 14,251,312 6,134,494 2,488,357 727,151 301,867 37,092,122 2011 13,427,139 16,113,584 5,424,643 1,780,294 667,064 622,955 38,035,681 2012 14,072,015 15,441,683 4,001,385 3,201,098 2,497,606 2,288,822 41,502,608 2013 14,510,241 16,316,398 3,879,992 2,745,475 2,570,111 2,418,148 42,440,365 2014 14,870,621 17,105,322 3,855,544 3,512,894 2,555,999 2,447,794 44,348,175 2015 14,320,085 19,334,152 4,019,288 5,321,280 2,749,140 2,739,070 48,483,015 2016 14,562,501 18,908,190 4,045,916 6,508,665 2,716,257 2,856,782 49,598,312 Change 2007-2016 30.3% -2.3% 10.4% 57.8% 569.1% 206.8% Notes: (a) Utility taxes enacted beginning in 2003 for electric, natural gas, cable and telephone utilities are assessed at rates of 6.0%. A utility tax was added in 2009 for solid waste and recycling assessed at a 6.0% rate. A utility tax rate of 10.0% was added in 2010 on the City's water, sewer, and stormwater utilities. (b) Beginning in 2012, reporting of "Business" tax revenues include the Revenue Generating Regulatory License (RGRL) fees. (`) "Other Taxes" include a hotel/motel tax and interfund utility taxes. Source: Tukw ila Finance Department 25.1% $50,000,000 $45, 000,000 $40, 000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 Tax Revenue by Source 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ❑ Other ■ Business Tax ■ Excise Tax ■ Utility Tax ■ Sales & Use Tax ■ Property Tax 146 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 6 PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Collected Within the Fiscal Year of the Levy Total Collections to Date Collections in Fiscal Taxes Levied for Subsequent Year Fiscal Year Amount % of Levy Years Amount % of Levy Levy Balance 2007 11,176,155 10,994,127 98.37% 182,036 11,176,163 100.00% (8) 2008 11,410,664 11,194,247 98.10% 216,076 11,410,323 100.00% 341 2009 12,286,929 12,017,213 97.80% 264,905 12,282,118 99.96% 4,811 2010 13,233,796 13,152,012 99.38% 80,311 13,232,323 99.99% 1,473 2011 13,383,153 13,225,338 98.82% 156,088 13,381,426 99.99% 1,727 2012 13,697,474 13,521,621 98.72% 173,716 13,695,337 99.98% 2,137 2013 13,740,076 13,549,525 98.61% 175,699 13,725,224 99.89% 14,852 2014 14,047,317 13,916,718 99.07% 95,467 14,012,185 99.75% 35,132 2015 14,245,846 14,113,739 99.07% - 14,113,739 99.07% 132,108 2016 14,516,623 14,375,358 99.03% 14,375,358 99.03% 141,265 Source: King County Office of Finance 15,000,000 12,000,000 9,000,000 - 6,000,000 - 3,000,000 - Property Tax Levies and Collections 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ■ Taxes Levied for Fiscal Year ■ Amount Collected Within Fiscal Year of Levy 147 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 7 ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS Fiscal Year Total Assessed Total Direct Real Property Personal Property Public Utilities Value Tax Rate 2007 3,853,680,774 509,151,926 87,410,974 4,450,243,674 2.56911 2008 4,470,042,539 595,268,205 110,399,231 5,175,709,975 2.37324 2009 4,122,961,628 746,710,751 112,779,972 4,982,452,351 2.66345 2010 3,950,829,851 717,795,417 119,827,058 4,788,452,326 2.82566 2011 3,833,295,985 712,607,656 129,726,102 4,675,629,743 2.95408 2012 3,778,571,709 736,480,616 134,138,983 4,649,191,308 2.98778 2013 3,824,448,044 779,103,146 152,822,498 4,756,373,688 2.97799 2014 4,146,952,417 744,616,273 162,510,057 5,054,078,747 2.84188 2015 4,409,931,075 810,422,092 174,971,951 5,395,325,118 2.71073 2016 4,763,568,175 849,695,435 150,386,219 5,763,649,829 3.05735 Note: 'Real, personal, and state public service property have been assessed at 100% of the estimated value. Source: King County Department of Assessments $7,000,000,000 $6,000,000,000 $5,000,000,000 $4,000,000,000 $3,000,000,000 $2,000,000,000 $1,000,000,000 $- Assessed Value By Type 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Public Utilities 1 Personal Property f Real Property 148 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 8 PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS (PER $1,000 OF ASSESSED VALUATION) LAST TEN FISCAL YEARS CITY OF TUKWILA Central Puget Sound Emergency Tukw ila Tukw ila Pool Regional General Special King Port of Medical School Dist Flood Metropolitan Hospital Transit Fiscal Year Levy Levy Total WA State County(') Seattle Service #406 Control Park District District #1 Authority Total 2007 2.56911 2.56911 2.13233 1.66106 0.22359 0.30000 4.73164 0.10000 0.50854 12.22627 2008 2.37324 2.37324 1.96268 1.51508 0.19700 0.27404 4.12360 0.09123 - 0.47141 11.00828 2009 2.66345 2.66345 2.22253 1.74587 0.21597 0.30000 3.89183 0.10514 0.53290 11.67769 2010 2.82566 2.82566 2.27990 1.90797 0.22366 0.30000 5.03380 0.10976 0.55753 13.23828 2011 2.95408 2.95408 2.42266 1.98580 0.22982 0.30000 5.44659 0.11616 - 0.50372 13.95883 2012 2.98778 2.98778 2.56720 2.11172 0.23324 0.30000 5.69832 0.13210 0.15000 0.50000 14.68036 2013 2.97799 2.97799 2.47044 2.08129 0.21533 0.33500 5.89098 0.15369 0.14944 0.50000 14.77416 2014 2.84188 2.84188 2.28514 1.84798 0.18885 0.30217 5.50160 0.13860 0.14962 0.50000 13.75584 2015 2.71073 2.71073 2.16898 1.95741 0.16954 0.28235 5.22858 0.12980 0.14853 0.50000 13.29592 2016 3.05735 - 3.05735 2.03205 1.83412 0.15334 0.26305 5.36954 0.11740 0.15653 0.50089 0.25000 13.73427 Note: Includes King County Library District tax and Ferry Source: King County Department of Assessments 3.50000 3.00000 2.50000 2.00000 1.50000 1.00000 0.50000 Direct Property Tax Rates 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 149 TOTA1..0 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 9 PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO Name Type of Business 2016 Assessed Valuation Percent of 2015 Total Assessed Valueial 2007 Assessed Valuation Percent of 2006 Total Assessed Valueibl Boeing Company Westfield (WEA) Southcenter LLC La Ranta LP/Segale Roperties Sabey Corporation KIR Tukw ila 050 LLCJKIMCO E Property Tax Dept LIT Industrtial Limited Partnership CenturyLink Communications (Qw est Corporation) International Gateway East CFF Kent Valley LLC BKM Tukw ila 117 LLC (formerly Icon Tukw ila Ow ner Pool 1) 3301 South Norfolk LLC (Sea-Tuk Warehouse LLC) Boeing Employees Credit Union Wig Properties LLC (JC Fenney) Puget Sound Energy/Gas - Electric COSTCO Wholesale Bank of China New York Branch (formerly Anne Arundel Apartments AMB Property Washington Tow ers LP International Gateway West CLPF-Tukw ila LP Seatac Hotel (Koar-Seatac Partners LP) Southcenter Corporate Square CSM Corp Federated Department Stores (Macys) Centerpoint 8801 Marginal (Merrill Creek Holdings LLC) John C Radovich Dev. Co. Talon Riverview Raza LLC (formerly BRCP Riverview Raza LLC) CHA Tukw ila LLC (Doubletree Inn) Avis Rent A Car System LLC Demon Trust Oxbow 2601 Jorgensen Forge Corporation Harnish Group Incorporated Sterling Realty Organization Lowe's HIW Incorporated Hill Investment Company Reef America Reit II Corporation Heitman Airplane company Department Stores Commercial Properties Real Estate Development Commercial Roperties Commercial Roperties Business Services Telephone Utility Non -Residential Property Manageme Commercial Properties Investment Property Food Distribution Credit Union Department Stores Electric/Gas Utility Cash & Carry Warehouse Apartments Real Estate Development Real Estate Development Non -Residential Property Manageme Startup Company Lodging Commercial Properties Real Estate Development Department Stores Properties Trust Commercial Properties Commercial Properties Lodging Car Rental Services Manufacturing Steel Manufacturer Truck Equipment Commercial Properties Home Improvement Commercial Properties Commercial Properties Commercial Properties $ 482,031,129 306,693,888 114,654,362 103,743,927 89,180,000 85,477,600 84,820,900 60,820,553 59,218,716 49,242,900 47,127,300 43,431,100 41,444,700 41,146,250 35,698,234 33,683,557 31,261,100 30,193,200 29,834,900 29,811,600 28,793,600 28,554,100 28,365,000 28,205,623 27,825,600 27,552,200 25,967,700 25,597,000 24,429,800 24,109,727 24,069,200 21,784,544 8.36% 5.32% 1.99% 1.80% 1.55% 1.48% 1.47% 1.06% 1.03% 0.85% 0.82% 0.75% 0.72% 0.71% 0.62% 0.58% 0.54% 0.52% 0.52% 0.52% 0.50% 0.50% 0.49% 0.49% 0.48% 0.48% 0.45% 0.44% 0.42% 0.42% 0.42% 0.38% $ 470,751,450 130,337,850 85,320,368 10.58 2.93% 1.92% 96,063,800 2.16% 62,945,200 1.41% 12,392,870 0.28% 29,159,800 52,386,532 24,136,800 25,408,979 0.66% 1.18% 0.54% 0.57% 29,944,400 0.67% 20,963,110 0.47% 26,920,700 0.60% 18,104,000 0.41% 26,637,900 0.60% 19,469,641 0.44% 20,131,703 14,595,306 35,693,100 15,816,965 7,811,400 63,451,550 57,055,700 0.45% 0.33% 0.80% 0.36% 0.18% 1.43% 1.28% $ 2,114,770,010 36.69% $ 1,345,499,124 30.23% Notes: to In 2016 the total assessed property value in the City of Tukwila was $5, 763,649,829 tal In 2007 the total assessed property value in the City of Tukwila was $4,450,243,674. Source: King County Department of Assessments 150 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION 151 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 10 RETAIL SALES TAX COLLECTIONS BY SECTOR LAST TEN FISCAL YEARS page 1 of 2 Major Industry Sector 2007 2008 2009 2010 Construction and Contracting $ 2,018,058 $ 1,967,785 $ 869,640 $ 917,250 Finance, Insurance & Real Estate 121,879 118,780 119,121 99,975 Manufacturing 590,455 375,263 246,429 387,234 Transportation, Communications & Utilities 483,419 492,960 440,206 441,822 Wholesale - Durable/Non-durable Goods 2,457,437 1,760,449 1,436,045 1,346,750 Retail Trade - General Merchandise 2,571,601 2,231,745 2,072,356 2,068,263 Retail Trade - Furniture/Home Furnishings 2,399,347 1,830,576 1,304,234 1,380,407 Retail Trade - Miscellaneous 1,766,853 1,718,898 1,473,496 1,521,741 Retail Trade - Clothing & Accessories 1,838,646 2,103,630 2,017,904 2,018,304 Retail Trade - Restaurants 1,158,424 1,312,603 1,292,252 1,342,964 Retail Trade - Automotive/Gas 1,026,778 1,066,183 748,482 664,310 Retail Trade - Building Materials 777,870 619,657 589,341 499,383 Service Industries - Business 1,198,690 1,129,380 868,260 882,012 Service Industries - Hotels 531,836 548,962 453,657 428,450 Service Industries - Other 294,869 318,696 283,319 215,045 All Other Categories 179,421 185,312 208,467 366,925 Total Retail Sales Tax Collections $ 19,415,583 $ 17,780,879 $ 14,423,209 $ 14,580,835 Notes: By State law, the City of Tukwila is prohibited from reporting individual sales tax payers. Sources: Tukw ila Finance Department and Washington State Department of Revenue. 152 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION page 2 of 2 2011 2012 2013 2014 2015 2016 $ 1,390,952 $ 961,125 $ 1,212,594 $ 829,073 $ 1,255,650 $ 1,383,624 115,123 143,792 174,705 141,010 163,161 175,060 232,737 390,252 386,964 322,189 281,501 269,117 405,197 432,608 475,688 549,126 743,746 746,115 1,119,527 1,077,613 1,108,771 1,592,613 2,016,722 1,295,141 2,003,947 2,000,865 2,154,523 2,137,256 2,205,778 2,202,158 1,771, 083 1,537,143 1,405,274 1,431, 965 1,527, 377 1,623,926 1,626,452 1,703,741 1,870,200 1,973,478 1,954,150 2,032,967 2,037,554 2,082,930 2,070,198 2,013,796 2,159,647 2,089,128 1,337,067 1,472, 343 1,529,101 1,611,860 1,703,187 1,751,724 670,806 690,076 690,691 765,765 825,143 743,468 487,620 516,861 565,734 600,610 683,485 733,928 932,422 928,610 968,996 1,073,511 1,265,789 1,467,620 459,606 487,977 502,721 562,130 626,822 650,270 202,217 234,870 246,802 274,497 273,514 253,089 553,493 381,693 525,133 468,547 978,142 845,209 $ 15,345,801 $ 15,042,499 $ 15,888,089 $ 16,347,426 $ 18,663,814 $ 18,262,544 153 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 11 SALES TAX RATE DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS 2007(`) 2008 (d) 2009 (a) 2010 2011 2012 2013 2014 2015 2016 BASIC SALES TAX RATES City of Tukwila 0.84% 0.84% 0.84% 0.84% 0.84% 0.84% 0.84% 0.84% 0.84% 0.84% Washington State 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% 6.50% King County 0.15% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% Regional Transit Authority 0.40% 0.40% 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% Metro 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% 0.90% Criminal Justice 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% 0.10% Department of Revenue 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% Administration Fee Total Basic Combined Sales Tax Rat 8.90% 9.00% 9.50% 9.50% 9.50% 9.50% 9.50% 9.50% 9.50% 9.50% SPECIAL SALES TAX RATES Restaurants (a) 0.50% 0.50% 0.50% 0.50% 0.50% Motor Vehicles (b) 0.30% 0.30% 0.30% 0.30% 0.30% 0.30% 0.30% 0.30% 0.30% 0.30% Notes: (a) King County Food & Beverage tax is in addition to the combined sales tax rate for restaurants, taverns and bars. The funds are used to finance the professional baseball stadium in Seattle. * NOTE: This tax expired on October 1, 2011 as taxes imposed to pay the construction bonds for the Seattle baseball stadium expired. roi Effective July 1, 2003, all retail sales, leases and transfers of motor vehicles are subject to the additional sales tax of three -tenths of one percent (.003). The funds are used to finance transportation improvements. f ) Effective April 1, 2007, King County increased the local sales & use tax rate one-tenth of one percent (.001). The tax will be used for transportation purposes. (d) Effective April 1, 2008, King County increased the local sales & use tax rate one-tenth of one percent (.001). The tax will be used for chemical dependency or mental health treatment services. lal Effective April 1, 2009, the Regional Transit Authority Tax increased five -tenths of one percent (.005). The tax wi11 be used to expand and coordinate light-rail, commuter -rail, and express bus service, and improve access to transit facilities in King, Pierce, and Snohomish Counties. Source: Washington State Department of Revenue Local Sales and Use Tax Rates. 154 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION 155 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 12 RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Page 1 of 2 2007 2008 2009 2010 GOVERNMENTAL ACTIVITIES General Obligation Bonds (°) $ 17,946,335 $17,261,348 $ 22,453,003 $ 26,763,975 Special Assessment (d) - - - Leases - - 40,184 Total Governmental Activities 17,946,335 17,261,348 22,453,003 26,804,159 BUSINESS -TYPE ACTIVITIES General Obligation Bonds 4,102,500 3,642,500 3,423,797 3,238,825 Revenue Bonds 5,470,162 5,112,231 4,790,000 4,395,000 Public Works Trust Fund Loans 9,378,506 9,021,951 8,405,397 7,788,843 Leases 45,587 11,666 Total Business -Type Activities 18,996,755 17,788,348 16,619,194 15,422,668 TOTAL PRIMARY GOVERNMENT(') $ 36,943,090 $35,049,696 $ 39,072,197 $ 42,226,827 Population (b) 18,000 18,080 18,170 19,107 Per Capita Personal Income (b) $ 57,409 $ 58,141 $ 56,904 $ 44,271 Percentage of Personal Income 3.58% 3.33% 3.78% 4.99% Debt Per Capita $ 2,052 $ 1,939 $ 2,150 $ 2,210 Notes: (a) Details regarding the City's outstanding debt can be found in the Notes to the Financial Statements sectic (b) Reference SCHEDULE 16, Demographic Statistics, for population and personal income data. (c) Includes amounts Due to Other Governments. (d) Special assessment debt was issued in 2013 for the Klickitat Urban Access Project. *** Data not available at time of publication. Sources: U.S. Census Bureau WA State Office of Financial Management City of Tukw ila Finance Department 90,000,000 80,000,000 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 Total Debt 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 156 $ 39,202,326 $ 35,913,942 $ 37,553,180 $ 38,861,742 $ 43,555,922 $ 76,646,368 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION Page 2 of 2 2011 2012 2013 2014 2015 2016 $ 28,006,800 $ 25,752,600 $ 21,727,609 $ 23,851,376 $ 30,084,437 $ 64,589,264 - 6,687,500 6,687,500 6,082,500 5,412,500 35,891 28,042,691 25,752,600 28,415,109 30,538,876 36,166,937 70,001,764 3,980,000 3,540,000 3,075,000 2,580,000 1,742,527 1,597,704 7,179,635 6,621,342 6,063,071 5,742,866 5,646,458 5,046,900 11,159,635 10,161,342 9,138,071 8,322,866 7,388,985 6,644,604 n. 19,486 19,611 19,765 19,920 19,300 19,540 $ 43,887 $ 43,333 $ 43,331 $ 44,820 $ 47,717 4.58% 4.23% 4.38% 4.35% 4.73% $ 2,012 $ 1,831 $ 1,900 $ 1,951 $ 2,257 $ 3,923 157 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 13 RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS Debt Payable Ratio of Net Net Special Less Debt from Bonded Debt Bonded Fiscal Gross Bonded Assessment Service Enterprise Net Bonded to Assessed Debt per Year Population Assessed Value Debt Debt (a) Funds(') Revenues(`) Debt Value Capita 2007 18,000 4,450,243,674 24,421,474 1,233,234 4,102,500 19,085,740 0.43% 1,060 2008 18,080 5,175,709,975 23,125,007 1,250,275 3,642,500 18,232,231 0.35% 1,008 2009 18,170 4,973,984,133 25,876,800 135,438 3,423,797 22,317,565 0.45% 1,228 2010 19,107 4,809,486,786 29,950,150 3,050 3,238,825 26,708,275 0.56% 1,398 2011 19,486 4,752,606,030 28,006,800 3,330,312 - 24,676,488 0.52% 1,266 2012 19,611 4,649,191,308 25,752,600 - 3,012,381 22,740,219 0.49% 1,160 2013 19,765 4,756,373,688 21,727,609 6,687,500 696,346 27,718,763 0.58% 1,402 2014 19,920 5,054,078,747 23,851,376 6,687,500 1,687,497 28,851,379 0.57% 1,448 2015 19,300 5,395,325,118 30,084,437 6,082,500 1,910,940 34,255,997 0.63% 1,775 2016 19,540 5,763,649,829 64,589,264 5,412,500 1,962,497 68,039,267 1.18% 3,482 Note: (a) Special assessment debt was issued in 2013 for the Klickitat Urban Access Project. (b) Includes both restricted and assigned fund balance available for debt service payment. (c) These amounts are the general obligation bonds that are being repaid by the Foster Golf Course Fund. Sources: U.S. Census Bureau State of Washington Office of Financial Management King County Department of Assessments Tukw ila Finance Department 158 Net Bonded Debt $80 N .2 $70 R $60 $50 $40 $30 $20 $10 $D 2007 , 2008 2009 2010 2011 2012 2013 2014 2015 2016 158 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 14 COMPUTATION OF DIRECT AND OVERLAPPING DEBT AS OF DECEMBER 31, 2016 Jurisdiction Net General Percentage Estimated Obligation Debt Applicable to Applicable to Outstanding Tukw ila(1) Tukw ila Direct: City of Tukwila $ 64,589,264 100.00% $ 64,589,264 Overlapping: King County 764,587,000 1.27% 9,710,255 King County Library 97,581,556 2.18% 2,127,278 Port of Seattle 283,620,000 1.27% 3,601,974 Tukw ila School District #406 61,895,040 91.32% 56,522,551 Hospital District #1 5.22% Total Overlapping Debt: 1,207,683,596 71,962,057 Total Direct and Overlapping Debt: Sources: King County Office of Finance King County Office of Assessments $ 1,272,272,860 $ 136,551,321 (1) The percentage of overlapping debt applicable is estimated using taxable county assessed property values. $70 E $60 $50 $40 $30 $20 $10 $- Direct and Overlapping Debt ■ City of Tukwila ■ King County OKing County Library ■ Port of Seattle • Tukwila School District ■Hos pital District 159 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 15 LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS Page 1 of 2 2007 2008 2009 2010 Debt Limit Total net debt applicable to limit Legal debt margin Total net debt applicable to the limit as a percentage of debt limit Assessed Value as of December 31, 2016 Debt Limit (7.5% of assessed value) Debt applicable to limit: General obligation bonds Other long-term debt $ 333, 768, 277 $ 388,178, 248 $ 373, 048, 810 $ 360, 711, 509 23,188, 240 21, 881, 765 28, 291, 920 32, 919,123 $ 310, 580, 037 $ 366, 296, 483 $ 344, 756, 890 $ 327, 792, 386 6.95% 5.64% $ 5, 763, 649, 829 432,273,737 60, 208, 532 372,065,205 Less: Amount set aside for repayment of general obligation debt and contracts payable Total net debt applicable to limit 60,208,532 Legal debt margin $ 372,065,205 Source: Tukw ila Finance Department 160 7.58% 9.13% CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION Page 2 of 2 2011 2012 2013 2014 2015 2016 $ 356,445,452 $ 348,689,348 $ 356,728,027 $ 379,055,906 $ 404,649,384 $ 432,273,737 29, 703, 995 25, 884, 632 21, 727, 609 23, 288, 621 29, 322, 914 60, 208, 532 $ 326,741,457 $ 322,804,716 $ 335,000,418 $ 355,767,285 $ 375,326,470 $ 372,065,205 8.33% 7.42% 6.09% 6.14% 7.25% 13.93% 161 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 16 DEMOGRAPHIC STATISTICS LAST TEN FISCAL YEARS Per Capita Personal Number of Number of Tukw ila School Fiscal Personal Income (b) Single -Family Multi -Family District Unemployment Year Population Income (a) (in thousands) Homes Units Enrollment Rate (°) 2007 18,000 57,409 1,033,362 3,864 4,107 2,862 5.0% 2008 18,080 58,141 1,051,189 3,884 4,107 2,769 5.9% 2009 18,170 56,904 1,033,946 3,885 4,107 2,795 10.9% 2010 19,107 44,271 845,886 3,892 4,107 2,907 11.7% 2011 19,486 43,887 855,182 3,894 4,094 2,870 7.6% 2012 19,611 43,333 849,803 3,896 4,094 2,902 7.4% 2013 19,765 43,331 856,437 3,915 4,094 2,882 5.2% 2014 19,920 44,820 892,814 3,920 4,103 2,978 4.1% 2015 19,300 47,717 920,938 3,940 4,103 2,910 4.5% 2016 19,540 "" *** 3,969 4,103 2,873 4.2% Notes: (a) Per Capita Personal Income data shown is for King County. Specific data for City of Tukwila is not available. (b) Personal Income estimates are calculated by multiplying Tukwila population by the Per Capita Personal Income estimates for Tukwila and are based on a revised methodology that provides for more accuracy. See also Footnote (a). (c) Unemployment rates are listed and estimated using the census -share method. **' Data not available at time of publication. Sources: Tukw ila Banning Division, Department of Community Development State of Washington Office of Financial Management Work Force Development Council of Seattle - King County (Unemployment Data) Tukw ila School District #406 US Bureau of Economic Analysis 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Unemployment Rate - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 162 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 17 PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO Name of Company/Employer Product or Business 2016 Full & Percentage of 2007 Full & Percentage of Part -Time Total City Part -Time Total City Employment Employees Employment Employees Boeing Company Normac Inc. Allied Mechanical Services, Inc. Group Health Cooperative Macy's West Stores Inc King County Metro COSTCO Wholesale Corp. King County Correction Guild Boeing Employee's Credit Union United Parcel Service Inc. Sub -total - Major Employers All Other Employment TOTAL EMPLOYMENT Source: Aircraft Manufacturing Wholesalers Plumbing, Heating & AC Contractors Data Ctr/Lab/Pharmacy/Mfg. Department Store Transit operating base Warehouse Clubs and Supercenters Non -Profit Organization Credit Union Couriers and Express Delivery Service Tukw ila Finance Department - Business Licenses 163 5,597 13.19% 8,043 18.98% 1,821 4.29% 0.00% 1,249 2.94% 0.00% 950 2.24% 1,100 2.60% 869 2.05% 400 0.94% 800 1.89% 664 1.57% 609 1.44% 0.00% 545 1.28% - 0.00% 516 1.22% 376 0.89% 381 0.90% 0.00% 13,337 10,583 29,086 31,785 42,423 42,368 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 18 FULL TIME EQUIVALENT EMPLOYEE BY DEPARTMENT LAST TEN FISCAL YEARS 2007 2008 2009 2010 2011 2012 2013 2014 2015 DEPARTM ENT Administrative Services (a) 26.75 19.75 - - - Council 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 Mayor (b) 12.00 11.00 16.00 17.00 15.75 16.75 17.75 21.00 20.00 17.00 Human Resources (a) 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 Finance 11.00 12.00 12.00 13.00 11.00 12.00 12.00 12.00 12.00 12.00 Recreation 23.50 23.50 22.50 20.75 16.25 16.25 16.25 16.00 16.75 17.25 Community Development 20.25 24.25 24.25 23.00 22.63 23.38 22.13 21.63 21.00 23.75 Court (a) 9.75 8.75 8.75 9.00 9.00 9.10 8.10 9.10 Police (a) 80.00 83.00 82.00 80.00 83.00 88.00 87.50 89.00 93.00 93.75 Fire 66.00 64.00 63.00 65.00 66.00 67.00 67.00 67.00 70.00 71.00 Information Technology (a) 8.00 8.00 8.00 8.00 7.00 6.00 6.00 7.00 Public Works 32.00 33.00 32.00 30.00 30.00 30.00 31.00 31.00 32.00 32.00 Parks 7.50 7.50 7.50 7.50 7.50 7.50 6.00 7.00 7.00 8.00 Street 11.00 12.00 12.00 11.00 12.00 12.00 12.50 11.50 10.00 12.00 Water 7.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 6.00 7.00 Sewer 3.00 2.00 2.00 1.00 2.00 2.00 2.00 2.00 2.00 2.00 Golf 9.25 9.75 9.75 10.00 9.25 8.25 9.25 8.25 8.25 7.75 Surface Water 7.00 8.00 8.00 7.00 8.00 8.00 8.00 8.00 9.00 9.00 Equipment Rental 4.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 Metropolitan Park District Pool (a) - 2.00 2.00 2.00 2.00 327.25 328.75 331.75 325.00 325.13 333.13 332.38 334.48 337.10 344.60. Notes: Based on filled positions not budgeted positions. (a)The departments for Human Resources, Court, City Clerk and Information Technology were previously reported under Administrative Services. (14 The department of City Clerk began reporting to the Mayor's department in 2009. rot The department of City Clerk began reporting to the Mayor's department in 2009. (d) On September 12, 2011, the Board of Commissioners approved the formation of the Tukwila Metropolitan Park District (MPD) Pool. For the comprehensive annual financial report years of 2011 and 2012, the MPD Pool was treated as a discretely presented component unit. Effective with the report year 2013, statistical information is now included for the MPD and presented as a blended component unit. 164 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 19 OPERATING INDICATORS BY FUNCTION LAST TEN FISCAL YEARS 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 FUNCTION Police Number of Calls for Service Fire Number of Responses Total Fire Loss Total Inspections 33,985 35,816 33,095 32,889 30,272 31,916 31,355 29,840 32,946 34,229 4,673 4,824 4,654 4,574 4,649 4,844 4,604 5,156 5,549 5,754 $3,065,005 $2,300,685 $1,934,596 $1,655,571 $1,601,596 $675,847 $343,495 $2,738,080 $1,926,944 $2,821,016 4,845 6,787 6,787 (1') 1,550 0) 1,360 0) 4,541 3,389 3,850 2,331 1,860 Parks and Recreation Class Participants 98,087 109,273 103,603 85,693 64,049 58,260 52,319 45,514 68,970 64,782 Community Ctr Admissions 90,141 117,533 134,183 134,275 115,728 116,136 114,748 132,397 136,984 141,218 Rounds of Golf Rayed 55,446 53,565 53,800 50,445 45,947 47,392 47,757 47,267 51,017 47,595 Pool Attendance ** 57,624 59,077 80,727 101,128 66,213 69,332 71,233 79,537 Street tulles 79 79 79 79 79 79 79 79 79 79 Hours Maintaining 17,540 19,840 22,140 20,360 20,360 22,920 16,767 8,627 4,716 4,836 Signalized Intersections 63 63 59 59 59 62 62 62 62 64 Hours Maintaining 7,540 7,540 6,700 6,925 6,925 7,000 8,815 3,012 2,408 2,135 Water Utility Services Total Customers 2,113 2,109 2,112 2,100 2,109 2,117 2,118 2,126 2,145 2,160 Total Gallons/Water(in thousands) 680,649 660,915 731,469 630,755 625,976 650,659 645,982 668,740 697,147 655,472 Sanitary Sewer Total Customers 1,718 1,684 1,694 1,699 1,710 1,727 1,742 1,752 1,775 1,789 Surface Water Total Customers 5,156 5,164 5,204 5,207 5,207 5,212 5,226 5,239 5,242 5,249 Licenses Business Licenses 2,350 2,523 2,422 2,454 2,611 2,030 1,877 2,208 2,220 1,909 Outside Contractors >`1 1,066 1,132 1,216 1,215 945 Permits Building Permits 425 423 265 290 389 354 374 347 277 311 Mechanical Pewits 238 256 159 160 180 191 221 216 154 192 Dectrical Permits 758 1,533 821 955 1,158 1,175 1,337 1,223 1,119 1,175 Runlbing Permits 306 264 145 163 187 210 167 184 140 185 Public Works Permits 136 154 131 138 106 126 155 152 163 175 Libraries Number of Libraries 3 3 3 2 2 2 2 2 2 2 Total Circulation 306,001 303,665 318,991 327,004 333,451 332,509 313,571 284,667 214,520 184,492 Notes: lal Construction of new clubhouse completed and opened in 2003. (b) Due to information system and data program transitioning, this total does not include fire prevention staff inspections at this time as reported in prior years. °I During 2012, Outside Contractors began their ow n business licensing category. Prior to this, outside contractors w ere consolidated w ith current year issued licenses. * Information not available. ** Pool facilities acquired from King County in 2003. Sources: Tukwila Departments, King County Library System 165 CITY OF TUKWILA: 2016 CAFR STATISTICAL SECTION CITY OF TUKWILA, WASHINGTON SCHEDULE 20 CAPITAL ASSETS BY FUNCTION LAST TEN FISCAL YEARS 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 FUNCTION General Government Total City Area (Square Mies) Public Safety Police: Number of Vehicle Units 8.6 8.6 9.7 9.7 9.7 9.63 9.63 9.63 9.63 9.63 64 67 70 76 84 88 81 89 89 93 Fire: Number of Fire Stations 4 4 4 4 4 4 4 4 4 4 Number of Engines/Rescue Trucks/Ladders 9 9 9 8 7 7 7 9 9 9 Number of Medical Aid Vehicles 2 2 2 2 1 1 1 1 1 1 Number of Hazardous Materials Trailer Units 2 2 2 2 2 2 2 2 2 2 Transportation Paved Streets (lane miles) 163 163 178 178 178 188.2 188.2 188.2 188.2 188.2 Sidewalks (miles) 54 54 56 56 56 64.8 64.8 64.8 64.8 64.8 Number of Traffic Signals 57 57 59 59 59 64 63 63 63 74 Number of Streetlights Owned by Seattle City Light 1,180 1,180 1,180 1,335 1,335 I`I 901 901 902 902 902 Number of Streetlights Ow ned by Riget Sound Energy 670 670 696 696 623 (`) 187 187 187 187 187 Number of Streetlights Ow ned by City of Tukwila - - (0) 1,210 1,216 1224 1224 1224 Culture and Recreation Parks Acreage la1 160 162 162 162 162 175.6 175.6 175.6 190 190 Number of Parks 18 18 18 18 18 19 19 19 19 19 Golf Course Acreage 67 67 67 67 67 77.26 77.26 77.26 77.26 77.26 Maintained Trails (miles) 11 11 15 15 15 15 15 15 15 15 Number of Playgrounds 13 13 11 11 11 11 11 11 11 11 Swimming Pool 1 1 1 1 - - - Visitor Center 1 1 1 1 1 1 1 1 1 1 Community Center/Recreation Facilities 1 1 1 1 1 1 1 1 1 1 Number of Libraries 3 3 3 2 2 2 2 2 2 2 Water Water Distribution Mains (miles) 47 47 41 41 41 41 41 49 49 49 Maximum Daily Capacity (millions of gallons) 10 10 10 10 10 10 10 10 10 10 Number of Fire Hydrants (Ow ned by Qty of Tukw ila) 555 572 541 542 554 576 576 576 577 577 Vehicles 8 8 8 8 8 8 8 9 9 9 Sewer Sanitary Sewers (miles) 37 37 37 37 37 37 37 37 37 37 Maximum Daily Treatment Capacity (millions of gallons) 6.33 6.33 6.33 6.33 6.33 6.33 6.33 6.33 6.33 6.33 Vehicles 5 6 6 6 6 6 5 4 4 5 Surface Water Storm Drains (Mies) (b) 67 67 69 69 70 70 70 70 71 70.5 Vehicles 4 4 4 4 4 4 4 8 8 8 Notes: I 1 Reflects the correct reporting of data for Culture and Recreation - Parks Acreage for the years 2001 through 2006. Parks acreage previously reported included golf course acreage. (b) Reflects the correct reporting of data for Surface Water - Storm Drains (miles) for the years 2001 through 2006. Miles previously reported were incorrect data estimates. City's meters. Also, additional street lights were added due to new construction for Southcenter Parkway Extension and Klickitat Projects. Sources: Various Departments -Tukwila 166